Document:

Agreement for Discharge dated January 1, 2006

Table of Contents

 Exhibit 4.43 
 English Translation 
 [Pacific Telecommunication (China) Company Limited; 
 or any other English proper name of the company] 
 (

) 
  

 Agreement for Discharge of Equity Joint Venture Contract 
  

 1st January, 2006 
  

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Table of Contents

 Agreement for Discharge of Equity Joint Venture Contract 
 This Agreement for Discharge is made on the 1st day of January     , 2006 by the following two parties: 
 Party A: Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (

), a limited company incorporated in accordance with the laws of the People’s Republic of China, whose registered address is Southwest, 18/F, Olympic Building, Shangbao Road, Futian District,
Shenzhen City, China (

); and 
 Party B: Pacific Internat (Hong Kong) Limited, a
limited company incorporated in accordance with the laws of the Hong Kong Special Administrative Region, whose registered address is Unit 59-74, 5th Floor, Hong Kong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong. 
 WHEREAS: 
  

	 (A)
	 Party A and Party B signed an Equity Joint Venture Contract (“EJV Contract”) on 30th December, 2005 and agreed to establish a Sino-Foreign Equity Joint Venture company in China (provisionally Chinese named
“

”). As of present, the application procedure regarding the establishment of such Sino-Foreign Equity Joint Venture company has not been commenced with the relevant authorities.

  

	(B)	Party A and Party B have both agreed, after friendly negotiation with one another, to enter into this Agreement for Discharge in order to prematurely discharge the EJV Contract.

  

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 NOW Party A and Party B hereby agree as follows:- 
  

	1.	Discharge of EJV Contract 

  

	1.1	In accordance with clause 42.1 of the EJV Contract, Party A and Party B hereby agree and confirm that the EJV Contract is discharged on the date of signing of this Agreement for
Discharge. Upon discharge, the EJV Contract shall become of no effect whatsoever. 

  

	1.2	Party A and Party B agree and confirm that upon discharge of the EJV Contract, the rights and obligations to perform of both parties as provided for in the EJV Contract shall cease
immediately. Party A and Party B promise that they will not raise any demands, claims, or requests for compensation as against one another in connection with the EJV Contract, but nevertheless that, in respect of any legal or economic
responsibilities or expenses that have already been incurred during the time from the signing of the EJV Contract to the discharge of the EJV Contract, the parties shall bear such share of those responsibilities as is in accordance with the portion
of capital contributions respectively provided for them in the EJV Contract. 

  

	2.	Signing of NEW EJV Contract 

  

	2.1	Party A and Party B hereby promise and confirm that on the day of signing of this Agreement for Discharge, they shall at the same time sign a new Equity Joint Venture Contract
(“New EJV Contract”), the content of which is at Annex 1 hereto. 

  

	 2.2
	 The New EJV Contract shall substitute the EJV Contract in all respects (including without limitation all of the clauses
in the “Cooperation Agreement” signed by Party A and Party B on 30th December 2005 which referred
therein to the “EJV Contract”). 

  

	3.	Applicable Law 

  

	3.1	The entering into, effect, interpretation, and performance of this Agreement for Discharge shall be in accordance with the laws of the People’s Republic of China.

  

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 This Agreement for Discharge is signed by the following parties: 
  

	Party A:	Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (

) 

 Legal Representative: Lin Yi Ping (

) 
  

	Party B:	Pacific Internet (Hong Kong) Limited 

 Legal Representative: Eddy Kuk Cho
Yiu (

) 
  

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 Annex 1 
 New EJV Contract 
  

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 Annex 1 
 English Translation 
 [Pacific Telecommunication (China) Company Limited; 
 or any other English proper name of the company] 
 (

) 
  

 Equity Joint Venture Contract 
  

 1st January, 2006 
  

 1 

Table of Contents

 
Table of Content 
  

			
	Chapter 1	  	
General
	Chapter 2	  	
The Two Equity Joint Venture Parties
	Chapter 3	  	
Establishment of Equity Joint Venture Company
	Chapter 4	  	
Objective, Scope and Scale of Business, and Venues of Business Operations
	Chapter 5	  	
Total Investment and Registered Capital 
	Chapter 6	  	
Procurement of Equipments and Associated Materials
	Chapter 7	  	
Undertakings and Duties of the two EJV Parties
	Chapter 8	  	
Confidentiality
	Chapter 9	  	
Board of Directors
	Chapter 10	  	
Management Organizations
	Chapter 11	  	
Finance and Audit
	Chapter 12	  	
Management of Labour
	Chapter 13	  	
Insurance
	Chapter 14	  	
Force Majeure
	Chapter 15	  	
Period of Operation, Termination, Dissolution, and Liquidation of EJV Company
	Chapter 16	  	
Disclosure of Contract
	Chapter 17	  	
Amendment, Variation, and Termination of Contract
	Chapter 18	  	
Liability for Breach of Contract
	Chapter 19	  	
Applicable Law and Amendment of Law
	Chapter 20	  	
Dispute Resolution
	Chapter 21	  	
Coming into Effect of Contract and other matters

  

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 Equity Joint Venture Contract 
  

	Party A:	Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (

) 

  

	Address:	Southwest, 18/F, Olympic Building, Shangbao Road, Futian District, Shenzhen City, China (

)

  

	Party B:	Pacific Internet (Hong Kong) Limited 

  

	 Address:
	 Unit 59-74, 5th Floor, Hong Kong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong (

) 

 
Chapter 1    General 
 Party A and Party B, who having based on the principle of mutual benefit agreed to
cooperate to invest in projects concerning value-added services in telecommunication, do enter into this Contract in accordance with the Law of PRC on Chinese-foreign Equity Joint Ventures, Telecommunication Ordinance of PRC,
Regulations for Management of Foreign-invested Telecommunication Enterprises. 
 
Chapter 2    The Two Equity Joint Venture Parties 
 Article 1 
 The two equity joint venture parties to this Contract shall be as below: 
  

	1.1	Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (

) (hereinafter referred to as “Party A”), being a corporate legal person constituted and existing under the laws of the People’s Republic of China (hereinafter referred to as
“China”), registered in China. 

  

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 Legal Address: Southwest, 18/F, Olympic Building, Shangbao Road, Futian District, Shenzhen City, China
(

) 
 Legal Representative: Lam Yat Ping (

) 
 Nationality: China 
  

	1.2	Pacific Internet (Hong Kong) Ltd. (hereinafter referred to as “Party B”), being a corporate legal person constituted and existing under the laws of Hong Kong, registered
in Hong Kong. 

 Legal Address: Unit 59-74, 5th Floor, Hong Kong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong (

) 
 Legal Representative: Eddy Kuk Cho Yiu (

) 
 Nationality: China 
 
Chapter 3    Establishment of Equity Joint Venture Company 
 Article 2 
 In accordance with the Law of PRC on Chinese-foreign Equity Joint Ventures, Telecommunication Ordinance of PRC, Regulations for Management of
Foreign-invested Telecommunication Enterprises, and other relevant laws and regulations, the two parties to this Contract agree to establish Equity Joint Venture Company in the City of Shenzhen, Guangdong Province, China. 
 Article 3 
 The Chinese name of the Equity Joint Venture Company shall
be provisionally “

” (hereinafter referred to as “the EJV Company”). 
  

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 Article 4 
 The EJV
Company shall be a company of limited liability, whereas the liability of the EJV Company shall be limited to the value of its total assets, and the liability of the two Equity Joint Venture parties shall be limited to their capital contribution
towards the registered capital of the EJV Company. Profits of the EJV Company shall be shared by the two parties in accordance with the ratio of capital contribution towards its registered capital, and losses of the EJV Company shall also be borne
by the two parties in accordance with the ratio of capital contribution towards its registered capital. 
 
Chapter 4    Objective, Scope and Scale of Business, and Venues of Business Operations 
 Article 5
Objective of Business 
 Through cooperation and technological exchange, Party A and Party B desire to utilize the market advantage of Party A at
value-added business in telecommunication in the Mainland and the good operation experience of Party B in the international telecommunication market, so as to enable the EJV Company to secure the issuance by the Ministry of Information Industries of
a Permit for Operation of Cross-provinces Telecom Value-Added Business (hereinafter referred to as “the Permit”), and to bring about significant economic benefits for the two investing parties. 
 Article 6 Scope of Business and Venues of Business Operations of the EJV Company 
  

	6.1	The scope of business of the company shall include: provision of value-added telecom services such as Internet connection, Internet data center, storage relay etc. and the
associated client services, as well as any other value-added telecom services as the relevant state authority for administration of the industry may permit. 

  

	6.2	The legal address of the EJV Company shall be: City of Shenzhen, China. 

  

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Chapter 5    Total Investment and Registered Capital 
 Article 7 
 The total amount of investment of the EJV Company shall be: RMB10,000,000. 
 Article 8 Registered Capital 
  

	8.1	The registered capital of the EJV Company shall be: Renminbi Ten Million (RMB10,000,000) and the respective capital contributions towards the registered capital of the two
parties shall be: 

 Party A shall contribute Renminbi Five Million, being 50% of the registered capital; and 

Party B shall contribute Renminbi Five Million, being 50% of the registered capital. 
  

	8.2	Whenever there should be any increase of registered capital beyond that provided for in Article 8.1, the amount of increased capital to be paid by the two parties respectively shall
be based on the principle of the same proportions. If any of Party A and Party B should refuse to make the whole or any part of the increased capital contribution required of it, the two parties may by negotiation decide the respective portions of
increased capital contributions that should be borne by them respectively. 

 Article 9 
 The means of capital contributions by Party A and Party B are respectively as follows: 
  

	9.1	Party A shall make the capital contribution partly in cash in Reminbi and partly in kinds, of which: 

  

	 	9.1.1	the capital contribution in cash being Renminbi Two and a Half Million (RMB2,500,000) shall be made within 60 days of the collection by the EJV Company of the Certificate of
Approval; and 

  

	 	9.1.2	the capital contribution in kinds shall be equivalent to Renminbi Two and a Half Million. 

  

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 Party A and Party B shall before the incorporation of the EJV Company appoint a valuation authority
recognized by both parties for it to assess the value of the capital contribution to be made in kinds, and shall within 60 days of collection of the Certificate of Approval arrange for the relevant transfer(s) of the property rights thereof.

 If the value of the capital contribution to be made in kinds by Party A should be assessed at lower than Renminbi Two and a Half
Million, then Party A shall make up the difference by cash in Renminbi. 
  

	9.2	Party A shall make its capital contribution by remittance by a sum of cash in Hong Kong dollars equivalent to Renminbi Five Million, to be calculated at such exchange rate as
is announced by the State Administration of Foreign Exchange of the PRC for the exchange of Hong Kong dollars into Renminbi on the date on which the EJV Company should receive the remittance, and Party A shall make the whole of such capital
contribution within 60 days of the collection by the EJV Company of the Certificate of Approval. 

  

	9.3	Party A and Party B shall each ensure that they should make the whole of their respective capital contribution after the EJV Company has, pursuant to relevant provisions in the
Telecommunication Ordinance and Regulations for Management of Foreign-invested Telecommunication Enterprises, submitted to the Ministry of Information Industry an application for Permit to Operate Cross-territorial Value-added
Telecommunication Services at the grade of cross-provincial services and has been issued a Business License for Incorporated Enterprise by the relevant Authority for Administration of Industry and Commerce, so as to enable the EJV Company to
satisfy the requirement connected with the said application for permit for the registered capital to be at least Renminbi Ten Million. 

 Article 10 Transfer 
  

	10.1	Any of Party A or Party B may transfer all or part of its equity share to the other party or any third party in accordance with the provisions in this Contract.

  

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	10.2	When any of Party A or Party B is to transfer the whole of any part of its equity share, it shall firstly consult the other party on the transfer. A party may only sign any
agreement for transfer with a third party after the other party has given it a written approval. 

  

	10.3	When any of Party A or Party B is to transfer its equity share, the other party shall have a right of first refusal to buy that equity share upon the same conditions.

  

	10.4	A party to whom any equity share is transferred under this Article shall be required to inherent the position of the transferor being a party to this Contract, including all the
rights and obligations of the transferor, and further the transferor shall, insofar as the transferred portion of equity share is concerned, ceased to enjoy any rights as being a party to this Contract. Within 3 years of the completion of any
transfer of equity share, the transferor shall remain bound to perform the duty regarding confidentiality, and shall keep any information it knows of about the EJV Company or the other joint venture party strictly confidential, and must not divulge
the same to any outside party. 

  

	10.5	Party A and Party B shall not create any right of security, mortgage, or charge on their respective capital contributions or the registered capital. 

 Article 11 Report on Verification of Capital and Proof of Capital Contribution 
  

	11.1	The Board of Directors of the company shall employ a firm of Chinese Registered Accountants to verify the capital contributions as made by both parties according to Article 9
towards the registered capital, and a report on verification of capital contributions shall be produced by the appointed Registered Accountant. 

  

	11.2	The EJV Company shall upon receipt of the Report on Verification of Capital from the Registered Accountant issue to each of the two joint venture parties a Certificate of Capital
Contribution as a proof of the made capital contribution. 

  

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 Article 12 Loans 
 If
Party A and Party B shall reach such consensus, the Total Investment may be increased. The increase in investment amount may be met by loans after approval by the Board of Directors. The EJV Company may provide its assets for mortgages against
loans. 
 
Chapter 6    Procurement of Equipments and Associated Materials 
 Article 13 Procurement of Equipments
and Associated Materials 
  

	13.1	Whether before or after the commencement of business by the EJV Company, Party B shall assist in resolving matters concerning the transportation into China of those materials that
are raised by the EJV Company overseas. 

  

	13.2	Before commencement of business by the EJV Company, Party A shall assist in resolving matters concerning the custom clearance and inland transportation of materials raised by the
EJV Company overseas, as well as matters concerning the inland transportation of materials raised within China. After commencement of business, these will be operated by the EJV Company itself, and if it is unable to resolve any such matters, Party
A shall render necessary assistance. 

  

	13.3	The EJV Company shall, on condition that it can ensure product quality, purchase any equipment and other associated materials required for operation within China as a matter of
priority. 

 
Chapter 7    Undertakings and Duties of the two EJV Parties 
 Article 14 Undertakings and Declarations
of Party A 
 Party A declares and undertakes to Party B as follows: 
  

	14.1	Party A is an incorporated legal person established in accordance with the laws of China. Party A is empowered to sign this Contract and perform the duties and obligations provided
for in this Contract. 

  

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	14.2	Before signing of this Contract, approval for Party A and Party B to invest in this project has been obtained from the relevant authority in China. 

  

	14.3	Party A warrants that its entering into this Contract with Party B and its entering into this project are not encumbered or restricted by any third party interest or dispute.

  

	14.4	Party A warrants that the trademarks that will be licensed by it to the EJV Company for use are all lawfully owned by it and have been properly registered. Party A also undertakes
to ensure that those trademarks shall remain lawful and valid during the subsistence of the EJV Company. 

  

	14.5	Party A warrants that its capital contributions in kinds towards the EJV Company have been given all necessary permissions, approval, and authorizations by all concerned parties
including the Board of Directors of Party A and any creditors, and that it has performed all procedural steps regarding notices and filings. 

 Article 15 Duties and Obligations of Party A 
  

	15.1	To make capital contributions according to provisions in Chapter 5; 

  

	15.2	To handle matters such as application to relevant governing authority for approval of establishment of the EJV Company, registration of incorporation, collection of Business
License, application for permit to operate value-added telecommunication services; 

  

	15.3	To handle the filing(s) with relevant administrative authority of the agreement(s) for lease of venues for business operation; 

  

	15.4	To assist the EJV Company in liaising for the realization of infrastructural facilities such as water, electricity, and transport; 

  

	15.5	To assist the EJV Company in obtaining all tax deductions and other advantages or preferential treatments as may be enjoyed by Chinese-foreign Equity Joint Venture Enterprises
according to the laws and regulations of China; 

  

	15.6	To assist the EJV Company in employing managerial staff, technical staff, workers and other necessary personnel in China; 

  

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	15.7	To assist staff members with foreign nationality in obtaining visa for entry, work permits, resident permits, and procedures regarding travel etc.; 

  

	15.8	To assist Party B in receiving foreign exchange remittance to overseas of dividends from the EJV Company; 

  

	15.9	To assist the EJV Company in establishing inland sales channels, and to provide the EJV Company with supports in the construction of new equipments and to help improve work
processes; 

  

	15.10	To promptly transmit to Party B by fax the approval documents and reply documents obtained in relation to establishment of the EJV Company. 

  

	15.11	To assist the EJV Company in handling of registration of incorporated legal person, and processes regarding tax, foreign exchange, finance, and customs registrations;

  

	15.12	To be responsible for obtaining all such approval documents as are required by laws and regulations to be issued by central and local governments in order for the EJV Company to
implement this project as planned; 

  

	15.13	To be responsible for handling other matters entrusted to it by the EJV Company. 

 Article 16 Undertakings and Declarations of Party B 
 Party B undertakes and declares to Party B as follows: 
  

	16.1	Party B is an incorporated legal person established in accordance with the laws of Hong Kong. Party B is empowered to sign this Contract and perform the duties and obligations
provided for in this Contract. 

  

	16.2	Party B warrants that its entering into this Contract with Party A and its entering into this project are not encumbered or restricted by any third party interest or dispute.

  

	16.3	Party B warrants that it will render prompt assistance to Party A in the establishment of the EJV Company; and 

  

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	16.4	Undertakes that equipment and technologies introduced by Party B for importation are all of advanced technologies and in compliance with the requirements of all applicable laws and
regulations of China. 

 Article 17 Duties and Obligations of Party B 
  

	17.1	To make capital contributions according to provisions in Chapter 5; 

  

	17.2	To handle matters entrusted by the EJV Company to it concerning the selection of machine and equipments and associated materials outside China; 

  

	17.3	To assist the EJV Company in the installation and testing of equipments; 

  

	17.4	To provide training for the managerial staff, sales staff, technical staff, and workers of the EJV Company; 

  

	17.5	To assist the EJV Company in steadily providing various value-added telecommunication services within the specified time limit(s) and according to the design capacity;

  

	17.6	To assist the EJV Company in the exploitation and development of overseas market; and 

  

	17.7	To be responsible for handling other matters entrusted to it by the EJV Company. 

 
Chapter 8    Confidentiality 
 Article 18 Confidentiality 
  

	18.1	Each party having or may have to divulge to the other parties confidential and exclusive information regarding its business, financial status, and other confidential matters.
Furthermore, the various parties may obtain confidential and exclusive information belonging to the EJV Company, and the EJV Company may obtain confidential or exclusive information belonging to the various parties. Unless otherwise provided for by
other confidentiality agreements, each party and the EJV Company who receive any of the above-mentioned information shall: 

  

	 	18.1.1	Treat the above-mentioned confidential information confidential; 

  

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	 	18.1.2	Refrain from divulging any of the above-mentioned confidential information to any person or body, except to its employees who are required to know of the above-mentioned
confidential information in the performance of it work duties. 

  

	18.2	The provisions in the above clause (1) do not apply to the following confidential information: 

 Information that can be proved by written records compiled before the disclosure to be already known to the party to whom the disclosure was made before
the disclosure; 
  

	 	18.2.1	Information known in the public arena but not being so for reason of a breach by the party disclosing the information; and 

  

	 	18.2.2	Information obtained from any third party who has no duty of confidentiality regarding the confidential information. 

  

	18.3	If requested by any party, the EJV Company shall sign a separate confidentiality agreement for confidential information obtained from that party or its connected companies, the
terms of which shall be substantially the same as the provisions in this Chapter. 

  

	18.4	Each party and the EJV Company shall establish its own regulations and system to ensure that the directors, senior staff members, and other employees of it and its connected
companies shall similarly abide by the duty of confidentiality prescribed by this Chapter. The directors, senior staff members, and other employees of the EJV Company shall sign a confidentiality agreement in a form acceptable to all parties.

  

	18.5	 The provisions in this Chapter shall not apply to divulgence of information to any connected companies, any lenders or financial institutions, any employees or
consultants of the parties, or third party to whom a party is expecting to transfer all or part of its equity share in the EJV Company; provided that even in such circumstances the party divulging information shall 

  

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only divulge any information to persons or body who require those information for reasonable business purposes and who has given a prior written undertaking
to treat those information confidential. 

  

	18.6	Where the above-mentioned information is required by any provisions or demands of laws, the provisions in this Chapter shall neither apply to the divulgence of information to any
government or any relevant authority or departments. However, the party who is required to so divulge information shall before it did so immediately notify all other parties of such demand and the terms of the demand (unless such notification is
prohibited by any laws and regulations). Any of the other parties shall have a right to raise their objection with the relevant authority or department against disclosure of the above-mentioned information, and to seek for confidentiality
protections for the confidential information to be disclosed on terms at the discretion of that party. 

  

	18.7	Without prejudice to the above provisions in this Chapter, no party shall publish or divulge any information (including confidential information) about the EJV Company without the
prior written consent of all other parties (which consent shall be not unreasonable withheld any party). Provided always that no provisions in this Article shall prevent any party from publishing or divulging any information in good faith pursuant
to the requirement of any laws, regulations, of rules of stock exchanges. 

  

	18.8	The provisions in this Chapter shall remain binding on any natural or legal person who has been a party to this Contract, notwithstanding that it has already ceased to be a party to
this Contract upon transfer of all equity share in the EJV Company and all the corresponding rights and obligations of this Contract. Furthermore, the rights and obligations provided for under this Chapter shall remain valid for at least two years
after the expiry or premature termination of this Contract, and shall not be affected by the dissolution of the EJV Company. 

  

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Chapter 9    Board of Directors 
 Article 19 
 The date of issuance of the Business License shall be the establishment date of the board of directors (“the Board”). 
 Article 20 
 The Board shall be comprised of five directors, of whom
one shall be appointed by Party A and four by Party B. Each appointing Party may at any time dismiss or change the director(s) appointed by it. In such case, the term of office of the newly appointed director shall be the remaining term of the
replaced director. 
 The term of office of a director shall be four years and each may serve consecutive terms if re-appointed by the Party originally
making the appointment. 
 The Chairman shall be appointed by Party B (or by Party A in event Party B declines to make the appointment). In the event of a
deadlock in passing any resolution at a Board meeting, the Chairman shall not have a casting vote in respect of such resolution. 
 Article 21

  

	21.1	The Board shall be the highest authority of the EJV Company. It shall determine all important issues relating to the Company. 

  

	21.2	Any resolution on the following matters shall require a vote of three quarters of the directors (with at least three of whom being the directors appointed by Party B) attending the
Board meeting: 

  

	 	1.	amendment to the Articles of Association of the EJV Company; 

  

	 	2.	action or cause to an action resulting in the termination, dissolution or liquidation of the EJV Company or application for extension of the operation term;

  

	 	3.	increase or decrease in registered capital of the EJV Company; 

  

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	 	4.	consolidation, division or conversion of the registered capital of the EJV Company; 

  

	 	5.	merger with another economic organisation or restructure/consolidation of the business of the EJV Company 

  

	21.3	Any resolution on the following matters shall require a vote of three fifths of the directors (with at least two of whom being the directors appointed by Party B) attending the
Board meeting:: 

  

	 	1.	declaration or formulation of plan for allocation of dividends of the EJV Company; 

  

	 	2.	approval of the annual budget, financial reports and important for operation and investment plan of the EJV Company; 

  

	 	3.	change of fiscal year, auditor or accounting system of the EJV Company; 

  

	 	4.	any expenditure of the EJV Company exceeding an amount equivalent to RMB 50,000 (for the purpose of this Article, an expenditure of RMB 50,000 shall include a single expenditure of
50,000 RMB and multiple expenditures of the same nature with an aggregate amount of RMB 50,000). 

  

	 	5.	obtaining loan or credit facility from any organization or individual; 

  

	 	6.	providing any enterprise, organization, partnership or individual with loan or credit facility (except for credit facility provided to customers in the course of ordinary business);

  

	 	7.	commencing or engaging in any activity beyond the business scope the EJV Company as provided for in Article 6.1 of this Contract; 

  

	 	8.	implementing any arrangement of partnership or joint venture, so as to establish any new company or economic organization or any other activities beyond the business scope of the
EJV Company; 

  

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	 	9.	affiliate transaction between the EJV Company and any shareholder or senior management personnel or other affiliated parties; 

  

	 	10.	any litigation or claim, except for claim for payment incurred in the ordinary course of operation. 

  

	 	11.	appointment of General Manage and Finance Controller; 

  

	 	12.	determining, amending or varying the remuneration of fulltime director, General Manager and Finance Controller; 

  

	 	13.	lease of venue(s) for the operation of the EJV Company; 

  

	 	14.	pledge/ charge of equity share in the EJV Company; 

  

	 	15.	change, variation or waiver of equity interest in the EJV Company; 

  

	 	16.	issuance or allocation of shares of the EJV Company, or provision of any right to subscribe for or exchange equity shares of the EJV Company; 

  

	 	17.	liquidation of the EJV Company, establishment of liquidation committee or entering into restructure agreement with creditor(s); 

  

	 	18.	increase or decrease of members of the Board; 

  

	 	19.	entering into, amending or varying any employment contract or welfare plan in respect of departmental head(s) or with annual income exceeding RMB 200,000; 

 

	 	20.	changing or determining the authorized signatory for bank accounts; 

  

	 	21.	transfer of interests in any contract, agreement (whether oral or in writing) to which the EJV Company is a party to any third party, except for such permitted by Party B;

  

	 	22.	entering into or amending service contract, employment contract, consultancy contract with the EJV Company being one party and Party A or its affiliate being the other party;

  

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	 	23.	entering into any material asset sale transaction with amount exceeding RMB 50,000 or value exceeding 0.5% of the net asset of the EJV Company (whichever is lower);

  

	 	24.	acquisition, disposal of or decrease of any direct or indirect equity share and/or interest in any subsidiary or any other companies, or establishment of subsidiary or branch;

  

	 	25.	direct or indirect provision of loan or any guarantee, security or performance bond by the EJV Company; 

  

	 	26.	any material investment or disposition of asset of the EJV Company which is beyond the ordinary business scope of the EJV Company; 

  

	 	27.	any issues other than such as mentioned above which shall substantially affect the interest of the EJV Company or the Parties to this Contract. 

  

	21.4	The management of the EJV Company in the preparation period shall be agreed by Party A and Party B subject to the best interest of the EJV Company. 

 Article 22 Board Meeting 
  

	22.1	Except for issues provided for in Article 22, resolutions on other matters shall be passed by the Board by a simple majority of affirmative votes. 

  

	22.2	A quorum for a meeting of the Board shall exist of at least four(4) directors, among whom at least three shall be directors appointed by Party B. If any meeting of the Board does
not meet the quorum as provided for in this Article, an alternative meeting may be convened within 14 working days from the originally date of meeting. The quorum for such alternative meeting shall be three directors, among whom at least two shall
be directors appointed by Party B. 

  

	22.3	 Unless otherwise unanimously agreed by the directors, written notice of the Board meeting shall be sent to each of the 

  

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Directors or its representative by fax, telex or email not less than fourteen days in advance. Such notice shall include the agenda in details. Only issues
listed in the agenda may be discussed and resolved in the meeting. Issues other than such listed in the agenda may only be discussed if the directors attending the meeting unanimously agree and such discussion will not violate the provision of
Article 23.1. 

 Article 23 
 The
Chairman shall be the legal representative of the EJV Company. In event the Chairman is unable to perform his/her duty, the Chairman shall authorize in writing the Deputy Chairman or other director to perform his/her duty on his/her behalf.

 Article 24 
 The Board shall conduct a meeting at least
once a year. The meeting shall be convened and presided by the Chairman. An extraordinary meeting of the Board may be convened upon proposal by not less than one-third of the directors. Meetings of the Board may be held at the venue of the EJV
Company or at other places as agreed by the parties, or may be held by such other means as telephone conference or video conference. 
 Minutes of each Board
meeting (including extraordinary meeting) shall be signed by the directors attending the meeting and filed for record with the EJV Company. A fax copy of minute signed by a director and delivered to the EJV Company by fax shall also be valid.

 If any director is unable to attend a Board meeting, he/she may appoint by notice in writing a proxy to attend and vote on his/her behalf. The appointment
notice shall specify the ambit of authority of such proxy. The absence of a director without his appointment of a proxy shall constitute a forfeiture of such director’s rights with respect to such meeting. 
 Meetings of the board (including extraordinary meeting) shall be held in the city of Shenzhen and Hong Kong alternately. 
 The travelling and accommodation expenses incurred by each director for attending the meetings of the board shall be borne by the EJV Company. 
 Article 25 Remunerations for Directors 
  

	25.1	Except for as arranged in accordance with Article 26.2, the directors shall not be paid any remuneration by the EJV Company. 

  

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	25.2	Remuneration for director(s) providing fulltime service to the EJV Company shall be determined by the Board according to Article 22 of this Contract. 

 
Chapter 10    Management Organizations 
 Article 26 
 The EJV Company shall establish a management organization, responsible for the day-to-day operation of the EJV Company. 
 Article 27 
 The EJV Company shall have one General Manager. One
Finance Controller may be appointed subject to the consent of the Board. The General Manager and the Finance Controller shall be nominated by Party B. If nominated by Party A, one Finance Manager may be appointed. 
 The duties of the General Manager shall be to carry out the resolutions of the Board and to organise and supervise the day-to-day operation and management of the EJV
Company. The operation and management shall be carried out in accordance with the regulations enacted by the Board. 
 The EJV Company shall appoint
departmental managers according to the need of the business of the EJV Company responsible for the day-to-day business of the departments. The departmental managers shall be accountable to the Board. 
 The General Manager, Finance Controller shall be appointed by the Board. 
 Unless otherwise approved by the Board, the General Manager shall not hold any management positions in other economic organisations nor shall he/she be allowed to be involved in the activities of other economic organisations which are in
commercial competition with the EJV Company. 
 
Chapter 11    Finance and Audit 
 Article 28 
 The financial accounting system of the EJV Company shall be handled in accordance with the relevant PRC laws and regulations and the actual situations of the EJV Company.
The EJV Company shall promptly after its establishment submit applications to the local financial authority and tax authority for registration. 
 Article
29 
 EJV Company shall adapt the calendar year as its fiscal year, starting from 1 January end on 31 December. All bookings, receipts, 

  

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financial reports, financial statements shall be prepared in Chinese. Monthly financial reports, seasonal financial reports and annual financial reports
shall be delivered to the directors before the end of the following month, the 15th of the following month after the
end of a season and the end of January of the following year respectively. 
 Article 30 
 The EJV Company’s accounting statements and reports shall be audited and examined by a firm of certified accountant registered in the PRC once a year at the cost of the EJV Company. Each of the parties may at its
own expense appoint another auditor to conduct an audit of the Company’s accounting statements and reports 
 Article 31 
 In the first month of each fiscal year, the General Manager together with the Finance Controller shall organise the preparation of the balance sheet, profit and loss
statement, cash flow statement and dividends allocation proposal for the examining and approving by the Board. Party A and Party B agree that all annual after tax profit shall be distributed to Party A and Party B in proportion to their respective
capital contribution towards the registered capital. 
 
Chapter 12    Management of Labour 
 Article 32 
 The plans for matters pertaining to staff recruitment, dismissal, wages, labour insurance, welfare benefits, rewards and disciplinary action etc. shall be determined by
the Board according to the relevant PRC laws and regulations. The EJV Company shall enter into individual or collective labour contracts with the employees. The labour contracts shall be filed with the local labour authority for record. 

Existing employees of Party A shall be employed by the EJV Company with priority, other employees shall be publicly recruited. The EJV Company shall enter into new
labour contracts with the recruited Party A’s existing employees. Such labour contracts shall incorporate the labour responsibilities terms currently adapted by Party A. 
 
Chapter 13    Insurance 
 Article 33 
 Insurance policies shall be purchased and insurance company shall be selected by the JVC Company according to the actually need of the JVC Company. Types of insurance, insurance value, insurance term shall be proposed
by the General Manager together with the Finance Controller and discussed and approved by the Board meeting in accordance with the relevant PRC laws. 
  

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Chapter 14    Force Majeure 
 Article 34 
 If any failure of performance or failure of performance in accordance with the terms and conditions agreed upon by the parties is due directly to earthquake, fire,
typhoon, war or any other analogous natural event that occurs which cannot be foreseen, prevented or avoided, the affected party shall forthwith inform the other party by telex, email or fax of the situation, and shall render to the other party the
details of the situation and valid evidence that the contract cannot be performed, or partly cannot be performed, or that performance is required to be delayed. Such evidence shall be notarized by the local public notary of the place where the force
majeure event occurs. The parties shall negotiate on whether to terminate the Contract or to postpone the performance of the contract according the extent the event affects the performance of the Contract. 
 
Chapter 15    Period of Operation, Termination, Dissolution, and Liquidation of EJV Company 
 Article
35 
 The operation period of the EJV Company shall be ten years. The establishment date of the CJV Company shall be the date the business license of the
Company is issued. At the request of either Party and upon the unanimous approval of the Board meeting, an application may be made to the original examining and approval authority 6 months before the expiration of the term of this Contract for an
extension of the operation period. 
 Article 36 
  

	36.1	If both parties or either party do not agree to extend the operation period of the CJV Company upon the expiry of the operation period, the CJV Company terminates.

  

	36.2	This Contract shall be early terminated upon mutual agreement of the parties. Early termination of the EJV Company shall be decided by the Board meeting and shall be subject to the
approval of the original examining and approval authority. 

  

	36.3	After a resolution on the early termination of the EJV Company has been passed in accordance with this Article, the EJV Company shall, simultaneously with handling the approval
formalities, adapt necessary means to deal with the settlement of the employees of the EJV Company. 

  

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	36.4	In event the EJV Company is terminated upon expiry of the operation period or due to other reasons and such termination has been approved by the examining and approving authority,
the EJV Company shall forthwith establish the liquidation committee so as to liquidate the EJV Company. The remain assets shall be distributed to the parties in proportion to their respective capital contribution towards the registered capital.

 
Chapter 16    Disclosure of Contract 
 Article 37 
  

	37.1	Unless required by (i) order of law or court, (ii) government authorities, or (iii) demand of relevant stock exchange, any party of this contract shall not by any
means disclose this contract without the prior written consent of the other party. 

  

	37.2	Except for the purpose of consultation with its consultant, any party of this contract shall not disclose to any third party the content of this contract without the prior written
consent of the other party. 

 
Chapter 17    Amendment, Variation, and Termination of Contract 
 Article 38 
 Any amendments to this contract and its appendices shall be agreed to by the parties in writing and shall come into effect only upon approval by the original examining
and approving authority. 
 Article 39 
 Where failure of
performance of the contract is caused by force majeure, change of laws or administrative orders, this contract may be early terminated subject to the unanimous resolution of the Board and approval by the original examining and approving authority.

  

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 Article 40 
  

	40.1	This contract may be terminated even prior to the expiry of the operation period of the EJV Company upon mutual agreement of the parties. 

  

	40.2	Upon the occurrence of the following events, the parties shall be deemed to have agreed to terminate this contract prior to the expiry of the operation period of the EJV Company:

  

	 	1.	The business license for establishment of the EJV Company has not been issued within 9 months from the execution of this contract; 

  

	 	2.	The EJV Company fails to obtain the approvals from the examining and approving authority for the operation of the EJV Company, resulting in the frustration of the purposes for
co-operation of the parties. 

  

	 	3.	Any party fails to perform the obligations under the contract and the Articles of Association, or materially breaching the provisions of the contract and the Articles of
Association, causing the failure of the EJV Company to operate or failure in achievement of the operation purposes, and such failure of performance continues for one month after having received the other party’s written request for performance.

  

	 	4.	Where the contract is terminated according to Section 1 of Article 42.2, upon mutual agreement of the parties, the expenses incurred from the execution of this contract to the
termination of this contract shall be borne, in principle, by the parties in proportion to their respective capital contribution towards the registered capital of the EJV Company. 

 
Chapter 18    Liability for Breach of Contract 
 Article 41 
  

	41.1	Where any Party breaches the contract causing the failure of performance or partly failure of performance of this contract and its appendices, or causing the failure in achievement
of the operation purpose hereunder, the other party shall have the right to request the party in breach to rectify. 

  

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	41.2	Where the party in breach does not rectify its breach, it shall be deemed such party as having fundamentally breached the contract, the other party shall have the right to claim
against the party in breach for economic damages, and shall simultaneously have the right to apply to the original examining and approving authority to approval the termination of the contract. 

  

	41.3	Where the parties agree to continue the operation of the EJV Company, the EJV Company and the other party shall have the right to claim against the party in breach for any economic
loss suffered. 

  

	41.4	Where any party fails to make capital contribution within the time and in amount according to this contract, the other party shall issue a written notice of demand, requesting such
party to make its capital contribution within 7 days from the date of receipt of such notice. The failure of such party to make capital contribution within 7 days shall constitute breach of the contract. The party in breach shall be liable to the
other party for a liquidated damage of 0.021% of the amount payable for each day from the eighth day of the above-mentioned notice to the day such party completes its capital contribution. 

 
Chapter 19    Applicable Law and Amendment of Law 
 Article 42 
 This formation, effect, interpretation and performance of this contract shall be governed by the PRC laws. In the event that there is no PRC law which governs a
particular matter relating to this Contract, reference may be made to international custom and practice. 
 
Chapter 20    Dispute Resolution 
 Article 43 
 Any dispute arising from the performance or relating to this contract shall be settled through friendly negotiations. If the dispute fails to be resolved through friendly
negotiations, the dispute shall be referred to the South China Sub-commission of China International Economic and Trade Arbitration Commission for arbitration in accordance with the arbitration rules of such commission. The arbitral award rendered
shall be final and binding upon the parties. 
  

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 Article 44 
 When any
dispute is under arbitration, except for the matters under dispute, parties shall continue to perform their remaining respective obligations under this contract. 
 
Chapter 21    Coming into Effect of Contract and other matters 
 Article 45 
 The ancillary documents executed in accordance with the principles of the contract, including the Articles of Association of the EJV Company, shall form an integral part
of this contract 
 Article 46 
 Any matter not covered by
this contract shall be supplemented by ancillary or supplementary agreement between the parties. 
 Article 47 
 This contract shall become effective from the date of its approval by the relevant PRC examining and approving authority. 
 Article 48 
 Where there is any inconsistency between this contract
and the agreements of the parties prior to the coming into effect of this contract, this contract shall prevail. 
 Article 49 
 This contract shall have priority effect to the Articles of Association, where there is any inconsistency between this contract and the Articles of Association, this
contract shall prevail. 
 Article 50 
 If any notice
given by any party by telegram or telex involves the rights and obligations of the parties, a written notice shall be given forthwith for confirmation. The addresses of the parties shall be their respective addresses list hereunder. 
  

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 Article 51 
 This Contract is executed by the legal representatives or authorised representatives of the parties on
1st January, 2006, in the city of Shenzhen of Guangdong Province of China. 
  

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 Party A: Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (

) 
 Legal representative: Lam Yat Ping (

) 
 Date: 1st January, 2006 
 Party B: Pacific Internet (Hong Kong)
Limited 
 Legal representative: Eddy Kuk Cho Yiu (

) 
 Date: 1st January, 2006 
  

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 English Translation 
 [Pacific Telecommunication (China) Company Limited; 
 or any other English proper name of the company]

 

 
  

 Articles of Association 
  

 1st January, 2006 
  

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Table of Content 
  

			
	Chapter 1	  	
General
		
	Chapter 2	  	
Objective, Scope and Scale of Business, and Scale
		
	Chapter 3	  	
Total Investment and Registered Capital
		
	Chapter 4	  	
Board of Directors
		
	Chapter 5	  	
Management Organizations
		
	Chapter 6	  	
Finance and Audit
		
	Chapter 7	  	
Distribution of Profits
		
	Chapter 8	  	
Employees
		
	Chapter 9	  	
Labour Union
		
	Chapter 10	  	
Period of Operation, Termination, and Liquidation
		
	Chapter 11	  	
Rules and Regulations
		
	Chapter 12	  	
Amendment of Articles of Association
		
	Chapter 13	  	
Miscellaneous

  

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 Articles of Association 
  

			
	Party A:	  	Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited
		
	Address:	  	Southwest, 18/F, Olympic Building, Shangbao Road, Futian District, Shenzhen City, China
		
	Party B:	  	Pacific Internet (Hong Kong) Limited
		
	Address:	  	Unit 59-74, 5th Floor, Hong Kong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong

 
Chapter 1 General 
 Article 1 
 These Articles of Association are formulated (these “Articles”) in accordance with the Law of the PRC on Sino-foreign Equity Joint Ventures (the “Joint Venture Law”) and other relevant PRC laws and regulations, and the
Joint Venture Contract for [Pacific Telecommunication (China) Company Limited] between Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited (“Party A”) and Pacific Internet (Hong Kong) Limited (“Party
B”) dated                      2006, (the “Contract”) in the City of Shenzhen of Guangdong Province of the PRC. 
 Article 2 
 The Chinese name of the Equity Joint Venture Company shall
be provisionally “

” (hereinafter referred to as the “Company”). 
 Article 3 
 The names and legal address of the parties are: 
 Party A: Shenzhen Zhong Ren
New Telecommunication Science and Technology Company Limited 
 Place of establishment: The city of Shenzhen, Guangdong Province, PRC 
  

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 Legal address: Southwest, 18/F, Olympic Building, Shangbao Road, Futian District, Shenzhen City, China 
 Legal Representative: Lam Yat Ping 
 Nationality: China 
 Party B: Pacific Internet (Hong Kong) Ltd. 
 Place of Establishment: The Hong
Kong Special Administrative Region of the PRC 
 Legal Address: Unit 59-74, 5th Floor, Hong Kong International Trade & Exhibition 
 Centre, 1 Trademart Drive, Kowloon Bay, Hong Kong 
 Legal Representative: Eddy
Kuk Cho Yiu 
 Nationality: China 
 Article 4 

The Company shall be a company of limited liability with the status of Chinese incorporated enterprise, and shall be governed and protected by PRC laws. The liability
of the two parties shall be limited to their capital contribution towards the registered capital of the Company. Profits of the Company shall be shared by the two parties in accordance with the ratio of capital contribution towards its registered
capital, and losses of the Company shall also be borne by the two parties in accordance with the ratio of capital contribution towards its registered capital. The liability of the Company shall be limited to the value of its total assets.

 Article 5 
 All activities of the Company shall be in
compliance with laws, regulations, relevant rules and these Articles. 
 Article 6 
 These Articles shall become effective upon approval by the authority for Foreign economic and trade affairs of the PRC government, and shall become a legally binding document governing the organization and activities
of the Company, the rights and obligations between the parties. The parties may bring legal action against the Company according to these Articles; the Company may bring legal action against the parties, directors, general manager and other senior
management personnel according to these Articles; any party may bring legal action against the other party according to these Articles; any party may bring legal action against the directors, general manager and other senior management personnel
according to these Articles. 
  

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Chapter 2 Objective, Scope and Scale of Business, and Scale 
 Article 7 
 The objectives of the Company are through cooperation and technological exchange, to utilize the market advantage of Party A at value-added business in telecommunication
in the Mainland and the good operation experience of Party B in the international telecommunication market, so as to enable the Company to secure the issuance by the Ministry of Information Industries of a Permit for Operation of Cross-provinces
Telecom Value-Added Business (hereinafter referred to as “the Permit”), and to bring about significant economic benefits for the two investing parties. 
 Article 8 
 The scope of business of the Company shall include: provision of value-added telecom services such as
Internet connection, Internet data center, storage relay etc. and the associated client services, as well as any other value-added telecom services as the relevant state authority for administration of the industry may permit. 
 The scope of business of the Company shall be changed from time to time according to the need for business development subject to the approval of the relevant
authority/authorities. 
 Article 9 
 The business scale
of the Company shall be: an annual business turnover of RMB 10,000,000. 
 
Chapter 3 Total Investment and Registered Capital 
 Article 10 
 The total amount of investment of the Company shall be: RMB10,000,000. 
  

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 Article 11 
 The
registered capital of the Company shall be: Renminbi Ten Million (RMB10,000,000). 
 Party A shall contribute Renminbi Five Million, being 50%
of the registered capital; and 
 Party B shall contribute Renminbi Five Million, being 50% of the registered capital. 
 Article 12 
 The respective capital contributions towards the
registered capital of the two parties shall be: 
  

	1.	Party A shall make its capital contribution in partly RMB cash and partly in kinds as follows: 

  

	 	(1)	the capital contribution in cash being Renminbi Two and a Half Million (RMB2,500,000) shall be made within 60 days of the collection by the Company of the Certificate of
Approval; and 

  

	 	(2)	the capital contribution in kinds shall be equivalent to Renminbi Two and a Half Million. 

 Party A and Party B shall before the incorporation of the Company appoint a valuation authority recognized by both parties for it to assess the value of
the capital contribution to be made in kinds, and shall within 60 days of collection of the Certificate of Approval arrange for the relevant transfer(s) of the property rights thereof. 
 If the value of the capital contribution to be made in kinds by Party A should be assessed at lower than Renminbi Two and a Half Million, then
Party A shall make up the difference by cash in Renminbi. 
  

	2.	 Party A shall make its capital contribution by remittance by a sum of cash in Hong Kong dollars equivalent to Renminbi Five Million, to be calculated at such
exchange rate as is announced by the State Administration of Foreign Exchange of the PRC for 

  

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the exchange of Hong Kong dollars into Renminbi on the date on which the Company should receive the remittance, and the whole of such capital
contribution shall be made within 60 days of the collection by the Company of the Certificate of Approval. 

  

	3.	Party A and Party B shall each ensure that they should make the whole of their respective capital contribution after the Company has, pursuant to relevant provisions in the
Telecommunication Ordinance and Regulations for Management of Foreign-invested Telecommunication Enterprises, submitted to the Ministry of Information Industry an application for Permit to Operate Cross-territorial Value-added
Telecommunication Services at the grade of cross-provincial services and has been issued a Business License for Incorporated Enterprise by the relevant Authority for Administration of Industry and Commerce, so as to enable the Company to satisfy
the requirement connected with the said application for permit for the registered capital to be at least Renminbi Ten Million. 

 Article 13 
 The capital contributions made by the parties shall each be verified by a firm of Chinese Registered Accountants. A report on
verification of capital contributions shall be produced respectively by the appointed Registered Accountant for each of such capital contributions. The Company shall upon receipt of the Report on Verification of Capital from the Registered
Accountant issue to each of the two joint venture parties a Certificate of Capital Contribution. 
 The Certificate of Capital Contribution shall include the
following items: name of the Company, establishment time of the Company, name of the investing party and its capital contribution, time of capital contribution, time of issuance of the certificate. 
 Article 14 
 Party A and Party B shall make their respective capital
contribution within the time and in amount as provided for in these Articles. 
 Where any party fails to make capital contribution within the time and in
amount according to these Articles, the other party shall issue a written notice of demand, requesting such party to make its capital contribution within 7 days from the date of receipt of such 

  

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notice. The failure of such party to make capital contribution within 7 days shall constitute breach of the contract. The party in breach shall be liable to
the other party for a liquidated damage of 0.021% of the amount payable for each day from the eighth day of the above-mentioned notice to the day such party completes its capital contribution. 
 Article 15 
 The registered capital of the Company shall not be
decreased within the operation period. 
 Article 16 
 The
Company may, according to the relevant PRC laws and regulations and subject to the resolution of the Board of Directors (“the Board”) and approval of the examining and approving authority, increase the total investment and registered
capital in accordance with the terms as mutual agreed by Party A and Party B. 
 Article 17 
 The parties are prohibited from withdrawing their respective capital contribution after the registration of the Company. 
 Article 18 
 The transfer of equity shares of the parties shall comply
with the following principles: 
  

	1.	When any of Party A or Party B is to transfer the whole of any part of its equity share, it shall firstly consult the other party on the transfer. A party may only sign any
agreement for transfer with a third party after the other party has given it a written approval. 

  

	2.	When any of Party A or Party B transfers the whole of its equity share, unless other agreed in writing by the transferor, the Company shall cease to use the trademark of the
transferor from the date the transfer is approved by the examining and approving authority. 

  

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	3.	When any of Party A or Party B is to transfer its equity share to a third party, the other party shall have a right of first refusal to buy that equity share upon the same
conditions. 

  

	4.	A party to whom any equity share is transferred under this Article and the Joint Venture Contract shall be required to inherent the position of the transferor being a party to this
Contract, including all the rights and obligations of the transferor, and further the transferor shall, insofar as the transferred portion of equity share is concerned, ceased to enjoy any rights as being a party to this Contract.

  

	5.	Within 3 years of the completion of any transfer of equity share, the transferor shall remain bound to perform the duty regarding confidentiality, and shall keep any information it
knows of about the Company or the other joint venture party strictly confidential, and must not divulge the same to any outside party. 

 Article 19 
 Whenever there should be any increase of registered capital beyond that provided for in Article 11, the amount of increased
capital to be paid by the two parties respectively shall be based on the principle of the same proportions. If any of Party A and Party B should refuse to make the whole or any part of the increased capital contribution required of it, the two
parties may by negotiation decide the respective portions of increased capital contributions that should be borne by them respectively. 
 Article 20

 Any of Party A or Party B shall not create any right of security, mortgage, or charge on their respective capital contributions or the registered
capital. 
 
Chapter 4 Board of Directors 
 Article 21 
 The Board shall be the highest authority of the Company. It shall determine all important issues relating to the Company. 
  

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 Article 22 
 The date
of issuance of the Business License shall be the establishment date of the Board. 
 Article 23 
 The Board shall be comprised of five directors, of whom one shall be appointed by Party A and four by Party B. The term of office of a director shall be four years and
each may serve consecutive terms if re-appointed by the Party originally making the appointment. Each appointing Party may at any time dismiss or change the director(s) appointed by it. In such case, the term of office of the newly appointed
director shall be the remaining term of the replaced director. 
 Article 24 
 The Chairman shall be appointed by Party B (or by Party A in event Party B declines to make the appointment). In the event of a deadlock in passing any resolution at a Board meeting, the Chairman shall not have a
casting vote in respect of such resolution. 
 Except for director(s) who provide(s) fulltime service to the Company, the directors shall not be paid any
remuneration by the Company. 
 Article 25 
 The Board
shall exercise the following functions and powers: 
  

	1.	to make amendments to the Articles of Association of the Company; 

  

	2.	to determine the termination, dissolution or liquidation of the Company or application for extension of the operation term; 

  

	3.	to determine the increase or decrease in registered capital of the Company; 

  

	4.	to determine the consolidation, division or conversion of the registered capital of the Company; 

  

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	5.	to determine the merger with another economic organisation or restructure/consolidation of the business of the Company. 

  

	6.	to declare or formulate plan for distribution of profits of the Company; 

  

	7.	to approve the annual budget, financial reports and important for operation and investment plan of the Company; 

  

	8.	to determine the change of fiscal year, auditor or accounting system of the Company; 

  

	9.	to determine any expenditure of the Company exceeding an amount equivalent to RMB 50,000 (for the purpose of this Article, an expenditure of RMB 50,000 shall include a single
expenditure of 50,000 RMB and multiple expenditures of the same nature with an aggregate amount of RMB 50,000). 

  

	10.	to determine the obtaining loan or credit facility from any organization or individual; 

  

	11.	to determine the provision to any enterprise, organization, partnership or individual with loan or credit facility (except for credit facility provided to customers in the course of
ordinary business); 

  

	12.	to determine to commence or engage in any activity beyond the business scope the Company as provided for in Article 8 of these Articles; 

  

	13.	to implement any arrangement of partnership or joint venture, so as to establish any new company or economic organization or any other activities beyond the business scope of the
Company; 

  

	14.	to approve any affiliate transaction between the Company and any shareholder or senior management personnel or other affiliated parties; 

  

	15.	to determine on any litigation or claim, except for claim for payment incurred in the ordinary course of operation. 

  

	16.	to appoint the General Manage and Finance Controller; 

  

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	17.	to determine, amend or vary the remuneration of fulltime director, General Manager and Finance Controller; 

  

	18.	to determine the lease venue(s) for the operation of the Company; 

  

	19.	to approve any pledge/charge of equity share in the Company; 

  

	20.	to approve any change, variation or waiver of equity interest in the Company; 

  

	21.	to approve the issuance or allocation of shares of the Company, or provision of any right to subscribe for or exchange equity shares of the Company; 

  

	22.	to determine the liquidation of the Company, establishment of liquidation committee or entering into restructure agreement with creditor(s); 

  

	23.	to determine the increase or decrease of members of the Board; 

  

	24.	to approve the execution, amendment of any employment contract or welfare plan in respect of departmental head(s) or with annual income exceeding RMB 200,000;

  

	25.	to determine and change the authorized signatory for bank accounts; 

  

	26.	to approve the transfer of interests in any contract, agreement (whether oral or in writing) to which the Company is a party to any third party, except for such permitted by Party
B; 

  

	27.	to approve the execution or amendment service contract, employment contract, consultancy contract with the Company being one party and Party A or its affiliate being the other
party; 

  

	28.	to approve the execution of any material asset sale transaction with amount exceeding RMB 50,000 or value exceeding 0.5% of the net asset of the Company (whichever is lower);

  

	29.	to determine the acquisition, disposal of or decrease of any direct or indirect equity share and/or interest in any subsidiary or any other companies, or establishment of subsidiary
or branch; 

  

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	30.	to approve any direct or indirect provision of loan or any guarantee, security or performance bond by the Company; 

  

	31.	to determine any material investment or disposition of asset of the Company which is beyond the ordinary business scope of the Company; 

  

	32.	to determine or approve any issues other than such as mentioned above which shall substantially affect the interest of the Company or the Parties to this Contract.

 Article 26 
 The Chairman shall be the
legal representative of the Company, representing the Company in its business activities. 
 Article 27 
 In event the Chairman is unable to perform his/her duty, the Chairman shall authorize in writing the Deputy Chairman or other director to perform his/her duty on his/her
behalf. 
 Article 28 
 The Board shall conduct a meeting
at least once a year. The meeting shall be convened and presided by the Chairman. An extraordinary meeting of the Board may be convened upon proposal by not less than one-third of the directors. 
 Article 29 
 A quorum for a meeting of the Board shall exist of at
least four(4) directors, among whom at least three shall be directors appointed by Party B. If any meeting of the Board does not meet the quorum as provided for in this Article, an alternative meeting may be convened within 14 working days from the
originally date of meeting. The quorum for such alternative meeting shall be three directors, among whom at least two shall be directors appointed by Party B. 
  

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 If any director is unable to attend a Board meeting, he/she may appoint by notice in writing a proxy to attend and vote
on his/her behalf. The appointment notice shall specify the ambit of authority of such proxy. The absence of a director without his appointment of a proxy shall constitute a forfeiture of such director’s rights with respect to such meeting.

 Article 30 
 The travelling and accommodation expenses
incurred by each director for attending the meetings of the board shall be borne by the Company. 
 Article 31 
 The directors shall vote by raising hands in a Board meeting. A raise of hand represents an affirmative vote, while a refusal or failure in raise of hand represents a
negative vote. 
 The Director or his/her authorized representative shall be responsible for counting the votes for each resolution. The voting result shall
be forthwith declared. 
 Article 32 
 Any resolution on
the matters as listed from items 1-5 in Article 25 of these Articles shall require a vote of four-fifths of the directors (with at least three of whom being the directors appointed by Party B) attending the Board meeting. Any resolution on the
matters as listed from items 6-32 in the said Article shall require a vote of three-fifths of the directors (with at least two of whom being the directors appointed by Party B) attending the Board meeting: 
 Article 33 
 Written notice of the Board meeting shall be sent to each
of the Directors or its representative by fax, telex or email not less than fourteen days in advance. Only issues listed in the agenda may be discussed and resolved in the meeting. Issues other than such listed in the agenda may only be discussed if
the directors attending the meeting unanimously agree and such discussion will not violate the provision of these Articles. 
  

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 Article 34 
 The
notice of Board meeting shall include the following items: 
  

	1.	date, venue and period of the meeting; 

  

	2.	matters for discussion in the meeting; 

  

	3.	clear indication that if a director cannot attend a meeting, he/she may authorize a proxy to attend the meeting and vote within the ambit of authorization; 

 

	4.	the time and address for submitting an authorization notice. 

  

	5.	contact person and his/her contact details for the meeting. 

 Article
35 
 Unless due to the occurrence of force majeure event or other accidental incidents, the convener of the meeting shall not alter the time of the
meeting after the notice of meeting has been served. In event the time of meeting must be altered due to force majeure, written notice shall be served to each director within explanation for the change. 
 Article 36 
 A authorization notice authorizing a proxy to attend the
Board meeting issued by a director shall include the following items: 
  

	1.	name of proxy; 

  

	2.	indication of whether the proxy is authorized to vote; 

  

	3.	instruction on vote with respect to each matter listed in the agenda of the Board meeting; 

  

	4.	indication of whether the proxy may vote with respect to matters that may be raised as a provisional proposal in the Board meeting, and instruction on vote with respect to such
matter; 

  

 15 

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	5.	date of issuance and valid period of the authorization; 

  

	6.	signature of the director; 

  

	7.	indication on whether the proxy may vote at his/her own discretion with respect to matter the director has not provided any instruction. 

 Article 37 
 Minutes of Board meeting shall be prepared. The minutes
shall include the following items: 
  

	1.	number and names of people attending the meeting; 

  

	2.	date and venue of meeting; 

  

	3.	name of president of meeting, agenda of meeting; 

  

	4.	abstracts of presentation of each speaker; 

  

	5.	Voting result of each resolution and the names of directors voting for/against the resolution; 

  

	6.	any other contents the Board meeting consider as necessary or required by the Articles to be included in the minutes. 

 Article 38 
 Minutes of each Board meeting (including extraordinary
meeting) shall be signed by each director or his/her proxy attending the meeting and filed for record with the Company and delivered to each director. A fax copy of minute signed by a director and delivered to the Company by fax shall also be valid.

 The filing period of minutes of Board meeting shall be the same period of the operation period of the Company. 
  

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 Article 39 
 An
extraordinary meeting of Board shall be convened within one month upon the occurrence of any of the events: 
  

	1.	The number of directors becomes less than the two-thirds of the number of directors as provided for in these Articles. 

  

	2.	The accumulated loss of the Company not recovered reaches one-third of the total amount of registered capital 

  

	3.	Proposed by not less than one-third of the directors; or 

  

	4.	Proposed by the General Manager or the Finance Controller, and not less than one-third of the directors agree to such proposal. 

 Article 40 
 The Chairman shall be responsible to the Board, and shall
exercise the following functions and powers: 
  

	1.	to convene and preside Board meetings, and to report his/her work to the Board; 

  

	2.	to examine the implementation of the resolutions of the Board meetings, and to submit such examinations for discussion by the Board; 

  

	3.	to represent the Board in the management and supervision of all matters of the Company; 

  

	4.	to represent the Company in external affairs in accordance with these Articles within the scope of authorization of the Board. 

  

	5.	to sign bond notes and Certificates of Capital Contribution in accordance with these Articles; 

  

	6.	to submit investment proposal of the Company for discussion by the Board; 

  

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	7.	to submit proposal for increase of registered capital for discussion by the Board; 

  

	8.	to draft proposal for merge, division, alteration, termination and dissolution of the Company for discussion by the Board. 

 Article 41 
 A director shall be replaced upon the occurrence of any
of the following events: 
  

	1.	committing any breach of his/her fiduciary obligation or any serious breach of duty; 

  

	2.	committing a crime; or 

  

	3.	having lost his/her ability to perform the duties of a director. 

  

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Chapter 5 Management Organizations 
 Article 42 
 The Company shall establish a management organization, responsible for the day-to-day operation of the Company. 
 Article
43 
 The Company shall have one General Manager. 
 Upon the
consent of the Board, one Finance Controller may be appointed. The General Manager and the Finance Controller shall be nominated by Party B. If nominated by Party A, one Finance Manager may be appointed. 
 Article 44 
 The General Manager, Finance Controller shall be
appointed by the Board. 
 Article 45 
 The manager shall
be directly accountable to the Board and shall be responsible for carrying out the resolutions of the Board and to organise and supervise the day-to-day safety and production, technical and business management of the Company. 
 Article 46 
 The Company shall appoint departmental managers according
to the need of the business of the Company responsible for the day-to-day business of the departments. The departmental managers shall be accountable to the General Manager. 
 Article 47 
 Unless otherwise approved by the Board, the General Manager shall not hold any management positions in
other economic organisations nor shall he/she be allowed to be involved in the activities of other economic organisations which are in commercial competition with the Company. 
  

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 Article 48 
 According
to the provisions of these Articles and the authorization of the Board, the General Manager shall exercise the following functions and powers: 
  

	1.	to be in charge of the production, operation and management of the company, and to organize the implementation of the resolutions of the board of directors;

  

	2.	to organize the implementation of the annual business plans and investment plans of the company; 

  

	3.	to draft the plan for the establishment of the company’s internal management organization, and to carry out such plan upon the approval by the Board; 

 

	4.	to draft the basic management system of the company, and to implement such system upon the approval by the Board; 

  

	5.	to formulate the specific regulations and rules according to the basic management system as approved by the Board; 

  

	6.	to propose the appointment or dismissal of the senior management personnel of the Company; 

  

	7.	to decide on the employment or dismissal of management personnel other than those to be employed or dismissed by the Board; 

  

	8.	to formulate the proposal for salaries, welfare, awards and punishments for employees; 

  

	9.	to propose to convene an extraordinary meeting of the Board; 

  

	10.	to report to the Board on the execution and performance of material contracts, the situation of use of funds and the status losses; 

  

	11.	General Manager who is not a director may attend the Board meeting without the power to vote; 

  

	12.	to formulate the annual budget with the Finance Controller, and to implement the budget upon approval by the Board; 

  

	13.	to formulate the profits distribution proposal and losses recovery proposal with the Finance Controller, and to implement such proposals upon approval by the Board; and

  

	14.	to exercise other functions and powers delegated by the Board. 

 Article 49 
 The specific rules for duties of the General Manager shall include the following items: 
  

	1.	Conditions and procedures convening a General Manager meeting and the members of such meeting; 

  

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	2.	The specific responsibilities of the General Manager and other senior management personnel; 

  

	3.	The power for using funds and assets of the Company and for execution of material contracts, and the system for reporting to the Board; and 

  

	4.	Any other items as considered necessary by the Board. 

 The specific rules
for duties of the General Manager shall be implemented upon approval by the Board. 
 Article 50 
 The Finance Controller shall be responsible for the financial affairs and other related matters, and shall be directly accountable to the Board. 
 Article 51 
 The Finance Controller shall exercise the following
functions and powers: 
  

	1.	to formulate the financial system of the Company, and to carry out such system upon approval by the Board; 

  

	2.	to prepare the monthly, seasonal and annual financial report; 

  

	3.	to examine the implementation of the Company’s financial system, and to specifically be responsible for the accounting matters of the Company; 

  

	4.	to examine the financial personnel of the Company, and to propose the appointment, change and dismissal of such personnel; 

  

	5.	to examine the Company’s contracts and other related legal matters; 

  

	6.	to supervise the senior management personnel in event of violation of the Company’s financial discipline or financial system; 

  

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	7.	to supervise the capital operation of the Company; 

  

	8.	to propose to convene extraordinary meeting of the Board; 

  

	9.	to attend the Board meeting without the power to vote. 

 Article 52

 Directors and senior management personnel shall not misappropriate the funds of the company or lend the funds of the company to any other parties.

 Directors and senior management personnel shall not deposit the funds of the company in an account opened in his personal name or in the name of another
individual. 
 Directors and senior management personnel shall not provide security for the debts of any shareholder, employees of the company or any other
individual with the asset of the Company. 
 Article 53 
 Directors and senior management personnel shall not enter into a contract or transaction with the company without the consent of the Board. 
 
Chapter 6 Finance and Audit 
 Article 54 
 The financial accounting system of the Company shall be handled in accordance with the relevant PRC laws and regulations and the actual situations of the Company. The Company shall promptly after its establishment
submit applications to the local financial authority and tax authority for registration. 
 Article 55 
 The Company shall adopt the calendar year as its fiscal year, starting from 1 January end on 31 December. 
  

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 Article 56 
 All
bookings, receipts, financial reports, financial statements shall be prepared in Chinese. 
 Article 57 
 Monthly financial reports, seasonal financial reports and annual financial reports shall be delivered to the directors before the end of the following month, the 15th of
the following month after the end of a season and the end of January of the following year respectively. 
 Article 58 
 The Company shall use Renminbi (RMB) as its bookkeeping currency. The exchange rate of Renminbi with other currencies shall be calculated at such exchange
rate as is announced by the State Administration of Foreign Exchange of the PRC on the date the transaction occurs. 
 Article 59 
 The Company shall adopt the accrual system and debit and credit method in its bookkeeping. 
 Article 60 
 The accounting books of the Company shall include the following items: 
  

	1.	The amount of all cash income and expenditure of the Company; 

  

	2.	The sale and purchase information of all materials of the Company; 

  

	3.	The data of registered capital and debts of the Company; 

  

	4.	The information on the time for capital contribution towards the registered capital, and details of the increase and transfer of registered capital. 

  

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 Article 61 
 In the
first month of each fiscal year, the financial department of the Company shall prepare the balance sheet, profit and loss statement, cash flow statement and other ancillary statements for the examining and approving by the Board after audited by
registered accountant. Party A and Party B agree that all annual after tax profit shall be distributed to Party A and Party B in proportion to their respective capital contribution towards the registered capital. 
 Article 62 
 Each of the parties may at its own expense appoint its
own auditor to conduct an audit of the Company’s accounting statements and reports. The Company shall provide the necessary convenience for such audit. 
 Article 63 
 The depreciation period of the fixed assets of the Company shall be determined by the Board in accordance with the relevant PRC
laws and regulations. 
 Article 64 
 All matters related
to foreign exchange of the Company shall be handled in compliance with the Regulations of the PRC on Administration of Foreign Exchange and other relevant regulations and the provisions of these Articles and the Joint Venture Contract.

 Article 65 
 The following documents, certificates and
statements shall become valid upon verification by PRC certified accountant: 
  

	1.	Certification of Capital Contribution of the parties; 

  

	2.	Annual accounting statements of the Company; 

  

	3.	Accounting statements of liquidation of the Company. 

  

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Chapter 7 Distribution of Profits 
 Article 66 
 The Company shall allocate a reserve fund, an enterprise expansion fund and a bonus and welfare fund for staff and workers, all in accordance with the stipulations of the Law of PRC on Sino-foreign Joint Venture Law
and its Implementing Regulations. The annual proportion of allocations shall be decided by the Board according to the business situation of the Company. 
 Article 67 
 The profit of the Company shall be distributed to the parties in proportion to their respective capital contribution towards the
registered capital after the payment of income tax and allocations to the funds are made. 
 Article 68 
 Profit shall be distributed once a year. The proposal for profit distribution and the amount distributable to each party shall be announced within four months from the
end of each fiscal year. 
 Article 69 
 No profit shall
be distributed unless the deficit from the previous years is made up. Profits retained by the Company and carried over from the previous years may be distributed together with the distributable profits of the current year. 
 Article 70 
 The Company adopts an internal audit system with
specialized auditing personnel responsible for conducting internal audit on the income and expenditure and economic activities of the Company. 
 Article
71 
 Upon approval by the Board, the internal audit system of the Company and the audit personnel shall be supervised by the Finance Controller who shall
be responsible to the Board. 
  

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Chapter 8 Employees 
 Article 72 
 The plans for matters pertaining to staff recruitment, dismissal, wages, labour insurance, welfare benefits, rewards and disciplinary action etc. shall be determined by the Board according to the relevant PRC laws and regulations. The
Company shall enter into individual or collective labour contracts with the employees. The labour contracts shall be filed with the local labour authority for record. 
 Article 73 
 Existing employees of Party A shall be employed by the Company with priority, other employees shall be
publicly recruited. The Company shall enter into new labour contracts with the recruited Party A’s existing employees. Such labour contracts shall incorporate the labour responsibilities terms currently adapted by Party A. 
 Article 74 
 The Company shall have the right to impose such
punishments as warning, record of misconduct, deduction of salary on an employee where such employee violates the rules and regulations and labour discipline of the Company. Under serious circumstance, the Company may dismiss such employee and file
a record with the local labour authority. In event of dismissing an employee, a one-month notice shall be given to the employee to be dismissed. Employees shall have the right to resign. If an employee resigns, he/she shall submit an application one
month in advance, and handle the formalities upon the approval of the Company. Where the employee fails to submit the said application, he/she shall be responsible for the inducing economic loss suffered by the Company. 
 Article 75 
 The employees of the Company may enjoy the national legal
holidays and other holidays as provided for in the PRC Labour Law and other relevant regulations. 
  

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Chapter 9 Labour Union 
 Article 76 
 The employees shall have the right to establish a labour union in accordance with the PRC Labour Union Law. 
 Article 77 
 The labour union of the Company represents the interests of the employees. Its purpose is to protect the democratic rights and
material interests of the employees, to assist the Company in arranging and using the welfare funds, to organize the employees to take part in political, business, scientific and technological studies, to launch entertainment activities, to educate
the employees to observe labour discipline and accomplish work. 
 Article 78 
 The labour union may represent the employees execute labour contracts with the Company, and supervise the implementation of the contracts. 
 Article 79 
 The labour union may participate in the mediation of disputes between the employees and the Company.

 Article 80 
 The Company shall allocate an amount of 2%
of the total actual salary of the employees as labour union fund. The labour union shall use the fund in accordance with the Rules for Administration of Labour Union Fund issued by the China National Labour Union. 
 
Chapter 10 Period of Operation, Termination, and Liquidation 
 Article 81 
 The operation period of the Company shall be ten years. 
  

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 Article 82 
 Upon
agreement of the parties and the unanimous approval of the Board meeting, an application may be made to the original examining and approval authority 6 months before the expiration of the term of this Contract for an extension of the operation
period. Change of registration shall be made with the industrial and commercial authority. 
 Article 83 
 If both parties or either party do not agree to extend the operation period of the CJV Company upon the expiry of the operation period, the CJV Company terminates.

 Article 84 
 This Contract shall be early terminated
upon mutual agreement of the parties. Early termination of the Company shall be decided by the Board meeting and shall be subject to the approval of the original examining and approval authority. 
 After a resolution on the early termination of the Company has been passed in accordance with this Article, the Company shall, simultaneously with handling the approval
formalities, adapt necessary means to deal with the settlement of the employees of the Company. 
 Article 85 
 In event the Company is terminated upon expiry of the operation period or due to other reasons and such termination has been approved by the examining and approving
authority, the Company shall forthwith establish the liquidation committee so as to liquidate the Company. 
 Article 86 
 The functions of the liquidation committee are to clarify the assets, rights and debts of the Company, to prepare a balance sheet and list of assets, formulate a
liquidation proposal, and to implement such proposal upon approval by the Board. 
  

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 Article 87 
 The
liquidation committee shall represent the Company in litigation during liquidation. 
 Article 88 
 The expenses for liquidation and remuneration for the liquidation committee shall be paid from the Company’s assets with priority. 
 Article 89 
 The assets remained from the liquidation shall be
distributed to the parties in proportion to their respective capital contribution towards the registered capital. 
 Article 90 
 After completion of liquidation, the Company shall submit a written report to the original examining and approving authority, and shall handle the cancellation of
registration with the industrial and commercial authority, and shall return the Business License and publish its termination. 
 
Chapter 11 Rules and Regulations 
 Article 91 
 The following are the detailed rules and regulations to be formulated by the Board: 
  

	1.	management regulations, including the powers and functions of the managerial branches and working rules and procedures; 

  

	2.	rules for the staff and workers; 

  

	3.	rules with respect to labour and remuneration of employees; 

  

	4.	rules with respect to work attendance, promotion and awards and penalty for the staff and workers; 

  

	5.	rules of the staff and workers’ welfare; 

  

	6.	rules with respect to financial system; 

  

	7.	procedures with respect to liquidation upon dissolution of the Company; 

  

	8.	other rules and regulations as deemed necessary or desirable by the Board. 

  

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Chapter 12 Amendment of Articles of Association 
 Article 92 
 Amendments to these Articles shall be made upon the occurrence of the following events: 
  

	1.	The amendment of the Law of PRC on Sino-foreign Joint Venture Enterprise Law and other relevant laws and regulations resulting in the inconsistency of these Articles with such laws;

  

	2.	The change of the Company’s circumstances resulting in the inconsistency of these Articles with such changes; 

  

	3.	Decision of the Board to amend these Articles. 

 Article 93

 Amendments to these Articles shall observe the following procedures: 
  

	1.	A proposal for amendment is submitted by one-third of the directors; 

  

	2.	The proposal for amendment is submitted to the Board and is approved by the resolution of the Board meeting; 

  

	3.	The Board passes an unanimous resolution, and the amendment becomes effective upon approval by the examining and approving authority. 

 
Chapter 13 Miscellaneous 
 Article 94 
 [not applicable in English version] 
 Article 95 
 The Company shall have the right to interpret the provisions of these Articles. 
 Article 96 
 This Articles are executed by the legal representatives or authorised representatives of the parties on 1st January, 2006, in the city of Shenzhen of Guangdong
Province of China. 
  

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 Party A: Shenzhen Zhong Ren New Telecommunication Science and Technology Company Limited 
 Legal representative: Lam Yat Ping 
 Date: 1st January, 2006 
 Party B: Pacific Internet (Hong Kong) Limited 
 Legal representative: Eddy
Kuk Cho Yiu 
 Date: 1st January, 2006 
  

 31Settlement Agreement, dated June 4, 2003

 Exhibit 10.1 
  

							
	UNITED STATES DISTRICT COURT	 		  		  	
	EASTERN DISTRICT OF NEW YORK	 		  		  	
	————————————————————— -x	  	MASTER FILE NO. CV-96-5238	  	
		  	(Gleeson, J.) (Mann, M.J.)	  	
	IN RE VISA CHECK/MASTERMONEY	 		  		  	
	ANTITRUST LITIGATION	 		  		  	
	————————————————————— -x	  		  	

 SETTLEMENT AGREEMENT 
 THIS SETTLEMENT AGREEMENT (the “Settlement Agreement” or “Agreement”) is made as of the 4th day of June 2003, by Defendant Visa
U.S.A. Inc. (“Visa”) and Plaintiffs in In Re Visa Check/MasterMoney Antitrust Litigation, No. 96-CV-5238 (JG), a Class Action (the “Class Action” or “Action”), on behalf of each and every member of the Class
defined herein (collectively, the “Plaintiffs” or “Class Members”). 
 WHEREAS the first of the complaints comprising
this Action was filed on October 25, 1996. 
 WHEREAS by Order dated December 27, 1996, the Court (i) consolidated the
original complaint with numerous additional complaints filed subsequent to the filing of the original complaint alleging similar or identical claims against Visa and MasterCard International Incorporated (“MasterCard”), and
(ii) designated the law firms of Constantine & Partners (“C&P”) and Hagens Berman (“HB”) as Plaintiffs’ Co-Lead Counsel. 
 WHEREAS the operative complaint in this Action, the Second Amended Consolidated Class Action Complaint and Jury Demand (the “Complaint”), was filed on May 26,1999; 
 WHEREAS the Complaint alleges, among other things, that Visa has violated the Sherman Act (15 U.S.C. §§ 1 and 2) based on the following claims,
among others: (i) Visa has illegally tied merchant acceptance of its debit card services to merchant acceptance of its credit card services under Visa’s so-called “Honor All Cards” rule, (ii) Visa, alone and together with

 
MasterCard, have used their respective tying arrangements, and other anticompetitive conduct, in an attempt to monopolize the market consisting of debit card
services to merchants, (iii) Visa and MasterCard have conspired to monopolize the debit card services market, and (iv) Visa’s anticompetitive conduct has resulted in merchants paying higher interchange fees for accepting Visa card
transactions. 
 WHEREAS this Action involved the production of more than five (5) million pages of document discovery and approximately
four-hundred (400) depositions taken over five-hundred (500) days. 
 WHEREAS by Order dated February 22, 2000, the Court
certified this Action as a class action under Rules 23(b)(2) and 23(b)(3) of the Federal Rules of Civil Procedure. 
 WHEREAS by decision
dated October 17, 2001, the United States Court of Appeals for the Second Circuit affirmed the Courts’ Order certifying this Action as a class action. 
 WHEREAS on June 10, 2002, the United States Supreme Court denied Visa and MasterCard’s petition for a writ of certiorari of the Second Circuit’s decision affirming the Court’s Order certifying this
Action as a class action. 
 WHEREAS by Order dated April 1, 2003, the Court denied in their entirety Visa and MasterCard’s motions
for summary judgment, and granted in part and denied in part Plaintiffs’ motion for summary judgment. 
 WHEREAS by Order dated
April 1, 2003, the Court denied MasterCard’s motion for severance or a separate trial. 
 WHEREAS on April 30, 2003,
Plaintiffs and Visa entered into a Memorandum of Understanding regarding the proposed settlement of this Action as against Visa. 
  

 2 

 WHEREAS Visa denies each and every one of Plaintiffs’ allegations of unlawful conduct and damages
and has asserted a number of defenses to Plaintiffs’ claims. 
 WHEREAS Plaintiffs and Visa agree that this Settlement Agreement shall
not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by Visa or of the truth or merit, or lack of truth or merit, of any of the claims or allegations alleged in the Class
Action. 
 WHEREAS arm’s length settlement negotiations have taken place between counsel for Plaintiffs and Visa, and this Settlement
Agreement, including its exhibits, which embodies all of the terms and conditions of the Settlement between Visa and the Plaintiffs, has been reached, subject to the final approval of the Court. 
 WHEREAS Plaintiffs’ Counsel have concluded, after extensive discovery and investigation of the facts and after carefully considering the
circumstances of the Class Action and the applicable law, that the terms and conditions of this Settlement Agreement are fair, reasonable, and adequate to Plaintiffs, and in their best interests, and have agreed to settle the claims released herein
after considering (i) the substantial benefits that Plaintiffs will receive under the Settlement Agreement, and (ii) the burden, expense and uncertainties of litigation, and particularly complex litigation such as this Action. 

WHEREAS Visa has concluded, despite its belief that it is not liable for the claims asserted and has good defenses thereto, that it will enter into
this Settlement Agreement to avoid the further expense, inconvenience and burden of this protracted litigation, and the distraction and diversion of its personnel and resources, and thereby to put to rest this controversy with valued business
customers, and to avoid the risks inherent in uncertain complex litigation. 
  

 3 

 NOW THEREFORE without any admission or concession on the part of Plaintiffs of any lack of merit of the
Action whatsoever, and without any admission or concession of any liability or wrongdoing or lack of merit in the defenses whatsoever by Visa, it is hereby AGREED by the undersigned, on behalf of Visa and Plaintiffs, that the Class Action and all
claims of the Plaintiffs be settled, compromised and dismissed on the merits and with prejudice as to Visa, and, except as hereinafter provided, without costs as to Plaintiffs or Visa, subject to the approval of the Court, on the following terms and
conditions: 
 ADDITIONAL DEFINITIONS 
 1. As used herein, and for the purposes of the Settlement Agreement only, the following additional terms shall be defined as set forth below: 
 a. “Authorized Claimant” means a Class Member who is entitled to receive a distribution from the Net Settlement Fund as provided for in the Plan
of Allocation of Settlement Funds. 
 b. “Claims Administrator” means the firm of Garden City Group, Inc., which shall administer
the Settlement and the provision of Notice, under Plaintiffs’ Co-Lead Counsel’s supervision. 
 c. “Class,” as defined in
the Court’s class certification Order dated February 22, 2000, means all persons and business entities who have accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa branded and/or MasterCard branded
debit cards under the challenged tying arrangements at any point during the Class Period. Excluded from the Class are any putative class members who previously excluded themselves from this Action by filing a request for exclusion in accordance with
the requirements set forth in the Notice of Pendency of Class Action dated June 21, 2002 previously provided to Class Members. 
  

 4 

 d. “Class Member” means any member of the Class. 
 e. “Class Period” means the period of time from October 25, 1992 through the date of the first publication of Notice, expected to be on or
around June 21, 2003. 
 f. “Effective Date” means the date of Final Settlement Approval. 
 g. “Fee and Expense Application” means the application submitted by Plaintiffs’ Co-Lead Counsel seeking Plaintiffs’ attorneys’
fees, expenses and costs. 
 h. “Fee Award” means Plaintiffs’ attorneys’ fees, expenses and costs as may be awarded by
the Court to Plaintiffs and their counsel. 
 i. “Final Settlement Approval” means final approval of the Settlement as specified in
paragraph 25 below. 
 j. “Gross Settlement Fund” means the Settlement Fund, and any interest earned thereon. 
 k. “Net Settlement Fund” means the Gross Settlement Fund, less the amount of the Fee Award and Court-approved fees, expenses, taxes, and costs
of Notice and administration. 
 l. “Notice” means the notice of this Settlement, attached hereto as Exhibits A and B, that will be
sent by First Class Mail to all Class Members and published in various periodicals, respectively, in the manner provided for in the Notice Plan. 
 m. “Notice Plan” means the method by which Notice will be sent to all Class Members as detailed in the Stipulation and Order for Providing Notice of Settlement, attached hereto as Exhibit C. 
 n. “Order and Final Judgment” means the proposed Order and Final Judgment to be entered by the Court approving the Settlement, attached hereto
as Exhibit D. 
  

 5 

 o. “Other Visa Product” means any product, device, program, or service bearing or offered under
the Visa blue, white and gold bands design, or under any other Visa brand Visa may choose as a replacement for the blue, white and gold bands design, issued within the United States by United States member financial institutions, that does not fall
within the definition of Visa POS Debit Device. Attached as Exhibit E hereto is a list of all current Visa products, devices, programs, or services that qualify as an Other Visa Product. 
 p. “Plaintiffs’ Co-Lead Counsel Signatories” means the individual attorneys from C&P and HB who are the signatories to this Agreement.

 q. “Plaintiffs’ Counsel” means Plaintiffs’ Co-Lead Counsel and other counsel representing any of the named Plaintiffs
in this Action. 
 r. “Plan of Allocation of Settlement Funds” means the terms and procedures for allocating the Net Settlement
Fund among, and distributing the Net Settlement Fund to, Authorized Claimants as set forth in the Notice, or such other plan of allocation as the Court shall approve. 
 s. “Preliminary Approval Order” means the proposed order preliminarily approving the Settlement and directing Notice to the Class, attached hereto as Exhibit F. 
 t. “Released Parties” means Visa, Visa International Service Association, and their past, present or future officers, directors, stockholders,
member financial institutions, agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors, and assigns. 

 

 6 

 u. “Released Claims” means only the claims of the Releasing Parties from which the Released
Parties will be released and discharged upon Final Settlement Approval as specified in paragraphs 25 and 28 below. 
 v. “Releasing
Parties” means the named Plaintiffs and any Class Members who have not timely excluded themselves from the Class Action – including any of their past, present or future officers, directors, stockholders, agents, employees, legal
representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns – whether or not they object to the Settlement and whether or not
they make a claim upon or participate in the Settlement Fund, whether directly, representatively, derivatively or in any other capacity. 
 w. “Settlement” means the settlement contemplated by this Agreement. 
 x. “Settlement Fund” means the amounts
to be paid into the Settlement Fund Account by Visa as specified in paragraph 3 below. 
 y. “Settlement Fund Account” means
(i) prior to the Effective Date, a joint interest-bearing account at such financial institution as the Settling Parties may agree into which Visa will make the Settlement Fund payments, and (ii) after the Effective Date, an account at such
financial institution as Plaintiffs’ Co-Lead Counsel designate into which Visa will make the Settlement Fund payments, including, without limitation, a trust account. 
 z. “Settling Parties” means Plaintiffs and Visa. 
 aa. “Visa Branded Product” means any Visa POS Debit Device or Other Visa Product. 
 bb. “Visa
POS Debit Device” means any consumer product, device, program, or service bearing or offered under the Visa blue, white and gold bands design, or under any 

  

 7 

 
other Visa brand Visa may choose pursuant to paragraph 5(d), issued within the United States by United States member financial institutions, that, when
presented for payment in the United States, accesses, debits, holds or settles funds from the consumer’s demand deposit or asset account. Attached hereto as Exhibit G is a list of all current Visa products, devices, programs, or services that
qualify as a Visa POS Debit Device. Notwithstanding the foregoing, the term Visa POS Debit Device shall not include (i) any payment device that accesses, debits, holds or settles funds from the user’s demand deposit or asset account
fourteen (14) days or more after the date of the purchase, (ii) any cards issued under the specific issuer programs listed on Exhibit H, or (iii) any cards issued under the specific brokerage account deferred debit programs listed on
Exhibit B to the MasterCard Settlement Agreement to the extent that Visa and any of its issuers convert the cards in such programs to Visa branded cards, so long as those cards are offered under the same brokerage account deferred debit card
program. 
 TERMS AND CONDITIONS 
 2. The Settling Parties agree to the following terms and conditions in full and final disposition of the Action as against Visa, and any and all Released Claims as against all Released Parties. 
 Payment of Settlement Funds 
 3. (a) Visa shall pay the Settlement Fund Account, in settlement of the claims released below, a total of two billion and twenty five million dollars ($2,025,000,000), which includes the payment referenced in paragraph 8(b), to be made by
wire transfer under the following schedule: 
 Payment One: ten million dollars ($10,000,000) on or before July 4, 2003;

 Payment Two: two-hundred fifteen million dollars ($215,000,000) on or before December 22, 2003; 
  

 8 

 Payment Three: two-hundred million dollars ($200,000,000) on or before December 22, 2004;

 Payment Four: two-hundred million dollars ($200,000,000) on or before December 22, 2005; 
 Payment Five: two-hundred million dollars ($200,000,000) on or before December 22, 2006; 
 Payment Six: two-hundred million dollars ($200,000,000) on or before December 22, 2007; 
 Payment Seven: two-hundred million dollars ($200,000,000) on or before December 22, 2008; 
 Payment Eight: two-hundred million dollars ($200,000,000) on or before December 22, 2009; 
 Payment Nine: two-hundred million dollars ($200,000,000) on or before December 22, 2010; 
 Payment Ten: two-hundred million dollars ($200,000,000) on or before December 22, 2011; and 
 Payment Eleven: two-hundred million dollars ($200,000,000) on or before December 22, 2012. 
 Nothing in this Agreement will require the Settlement Fund Account to be funded or established before the Agreement is submitted to the Court for preliminary approval.
Visa’s timely payment of Payments One through Eleven into the Settlement Fund Account shall extinguish Visa’s obligations under this subparagraph with respect to each such payment. The satisfaction of Visa’s obligations under this
subparagraph shall in no way be contingent on whether or how the Settlement Funds are disbursed. 
 (b) Disbursements of funds from the
Settlement Fund Account shall require a signature from each of the Plaintiffs’ Co-Lead Counsel Signatories, and a signature from a designated shareholder of Heller Ehrman White & McAuliffe, LLP (“HE”). Any requests for
disbursements of funds shall be accompanied by appropriate documentation supporting the expenditures. Plaintiffs’ Co-Lead Counsel and HE agree to hold the funds in the Settlement 

  

 9 

 
Fund Account for the purposes set forth herein. Upon the Effective Date of the Settlement, HE will resign as a co-signatory on the Settlement Fund Account.
Thereafter, Plaintiffs’ Co-Lead Counsel Signatories shall be the sole signatories on the Settlement Fund Account. 
 (c) The Gross
Settlement Fund shall be used to pay (i) the Notice and administration costs specified in paragraph 11, (ii) the Fee Award specified in paragraph 14, (iii) any additional Plaintiffs’ attorneys’ fees, costs and expenses
incurred for the benefit of the Class and approved by the Court including, without limitation, any fees, costs, and expenses incurred in obtaining Final Settlement Approval or administering the Settlement, and (iv) any taxes owed on any income
from the funds held in the Settlement Fund Account as well as expenses and costs incurred in connection with the payment of such taxes. The balance of the funds of the Settlement Fund Account shall be the Net Settlement Fund which shall be
distributed to the Authorized Claimants. 
 (d) The Settling Parties agree that the Settlement Fund Account is intended to be a Qualified
Settlement Fund within the meaning of Treasury Regulation § 1.468B-1. All taxes with respect to the earnings on the funds in the Settlement Fund Account shall be the responsibility of the Settlement Fund Account. Plaintiffs’ Co-Lead
Counsel shall administer the Settlement Fund Account. Plaintiffs’ Co-Lead Counsel may designate the Claims Administrator to administer the Settlement, subject to Court approval. It shall be the responsibility of the Plaintiffs’ Co-Lead
Counsel, with the cooperation of Visa as set forth in paragraphs 44 and 45 below, to establish and maintain the Settlement Fund Account as a Qualified Settlement Fund within the meaning of Treasury Regulation § 1.468B-1. 
 (e) Nothing in this Agreement shall prevent Plaintiffs from selling, assigning, or securitizing the Settlement Fund, or using the Settlement Fund to
obtain financing. In the 

  

 10 

 
event Plaintiffs seek to sell, assign, securitize, or in any way obtain financing using the Settlement Fund, they must apply to the Court for approval, upon
notice to Visa. Visa will not oppose any such application and will provide reasonable assistance to Plaintiffs in the event Plaintiffs seek to sell, assign, securitize, or obtain financing using the Settlement Fund. Plaintiffs shall reimburse Visa
from the Settlement Fund for Visa’s reasonable costs in connection with such assistance. Such assistance shall include, but not be limited to, providing to appropriate parties, on a confidential basis, reasonable information and documents and
reasonably cooperating with rating agencies (such as Standard and Poors and Moody’s) to rate any financial instrument that may be issued to facilitate the sale, assignment, securitization, or the use for financing of the Settlement Fund. Visa
agrees to deliver Settlement Fund payments to either (i) the Settlement Fund Account, or (ii) an account of any trustee, paying agent or other entity designated by Plaintiffs’ Co-Lead Counsel in order to effect the sale, assignment,
securitization or the use for financing of the Settlement Fund, provided, however, that any such account referenced in (ii) above shall also qualify as a Qualified Settlement Fund within the meaning of Treasury Regulation § 1.468B-1. Such
payment instructions may be modified by Plaintiffs’ Co-Lead Counsel from time to time as may be required and upon reasonable notice to Visa (provided that any new account designated shall also qualify as a Qualified Settlement Fund within the
meaning of Treasury Regulation § 1.468B-1). 
 Visa’s Commitments 
 Unbundling of Debit and Credit 
 4. (a) Visa shall
adopt rules that will, effective January 1, 2004, unbundle, and Visa agrees not to bundle in the future, merchant acceptance of Visa POS Debit Devices and merchant acceptance of any Other Visa Products. “Unbundle” as used herein means
that Visa shall not require that as a condition of accepting Other Visa Products, merchants must accept Visa POS Debit Devices, and vice versa. 
  

 11 

 (b) These rules shall provide that, commencing January 1, 2004, with respect to any contract
existing on that date under which a merchant accepts Visa Branded Products: (i) merchants may choose to stop accepting Visa POS Debit Devices by providing no less than thirty (30) days’ advance written notice to their acquirers (which
may be given prior to January 1, 2004); and (ii) merchants may choose to stop accepting Other Visa Products by providing no less than thirty (30) days’ advance written notice to their acquirers (which may be given prior to
January 1, 2004). The rules shall further provide that merchants who want to begin accepting Visa Branded Products after January 1, 2004 will be free to accept Visa POS Debit Devices only, Other Visa Products only, or both Visa POS Debit
Devices and Other Visa Products. 
 (c) These rules shall also require that any contract used by an acquirer with any merchant shall provide
the clear option (including a statement of applicable merchant discount rates by product) for the merchant to elect to accept Visa POS Debit Devices, Other Visa Products, or both. 
 (d) Visa shall immediately require that, from August 1, 2003 through January 1, 2004, acquirers provide, in their regular communications with
merchants, but no more often than monthly, clear and conspicuous notice to merchants that as of January 1, 2004 they will have the right to (i) accept Visa POS Debit Devices without accepting Other Visa Products, and (ii) accept Other
Visa Products without accepting Visa POS Debit Devices. Attached hereto as Exhibit I is an exemplar of the notice that will be provided under this provision. 
 (e) Nothing herein shall prevent Visa from adopting and enforcing an Honor All Cards rule that requires merchants who choose to accept any Visa POS Debit Device to 

  

 12 

 
accept all, or any subset of, Visa POS Debit Devices. However, nothing in this Agreement requires any merchant to purchase or install a PIN pad in order to
continue to accept Visa POS Debit Devices which are authorized by signature. Nor do Plaintiffs agree that anything in this Agreement or otherwise, including the Honor All Cards rule for Visa POS Debit Devices contemplated in this paragraph, permits
Visa to apply any honor all cards rule to require merchants to install a PIN pad in order to continue accepting Visa POS Debit Devices which are authorized by signature. 
 (f) Nothing herein shall prevent Visa from adopting and enforcing an Honor All Cards rule that requires merchants who choose to accept any Other Visa Product to accept all, or any subset of, Other Visa Products.

 (g) On or about June 30, 2003 and on or about December 31, 2003, Visa shall provide Plaintiffs’ Co-Lead Counsel with notice
of any Visa products, devices, programs, or services that Visa then currently expects to offer by December 31, 2004 that would qualify as either a Visa POS Debit Device or an Other Visa Product (or a multi-function Visa Branded Product as
described below) that are not identified on Exhibits G and E. Such notice will be provided by letter to Plaintiffs’ Co-Lead Counsel; this information shall not be used for any purpose other than the enforcement or interpretation of this
Agreement and shall not be disclosed to anyone other than those employees of the named Plaintiffs to whom such disclosure is necessary for that purpose. 
 (h) If Visa offers a Visa Branded Product that incorporates the payment functions of both a Visa POS Debit Device and an Other Visa Product, a merchant will be free to accept the Visa POS Debit Device payment function
only, the Other Visa Product payment function only, or both the Visa POS Debit Device and Other Visa Product payment functions, 

  

 13 

 
consistent with the terms set forth in paragraph 4. Any such multi-function Visa Branded Product will satisfy, so far as practicable, the requirements for
the clear and conspicuous identifier and unique electronic identity, consistent with the terms set forth in paragraphs 5 and 7 below, that would enable merchants to identify visually any such Visa Branded Product and to identify electronically its
different payment functions. Visa shall provide Plaintiffs’ Co-Lead Counsel within sixty (60) days before it is implemented written notice of the unique identifier (e.g., “Relationship Card”) that would be used to denote
the multi-function nature of such a product. 
 Clear and Conspicuous Debit Identifier 
 5. (a) Visa shall implement rules, effective January 1, 2004, requiring issuers in the United States to place on the face of all Visa POS Debit
Devices, subject to section (b) below, the debit identifier “CHECK CARD.” This debit identifier must be clear and conspicuous and used consistently and uniformly on all Visa POS Debit Devices. Specifically, the preceding sentence
shall require that for all Visa POS Debit Devices, the debit identifier be in at least 11 point font, all capital letters, placed in the identical location in the upper right portion of the card immediately above the Visa hologram, in a color
clearly contrasted with the background color over which the debit identifier is laid, and clearly separate from any other wordmark or symbol on the card. Notwithstanding the foregoing, Visa shall have the right after execution of the Agreement, but
before October 1, 2003, to propose an equally or more clear, conspicuous, consistent and uniform alternative scheme for displaying a debit identifier on the card based on conclusions from market research, and Plaintiffs’ Co-Lead Counsel
agree to consider such alternative scheme in good faith. Visa shall provide Plaintiffs’ Co-Lead Counsel no later than November 1, 2003 (i) a copy of the rules adopted by the Visa Board of Directors 

  

 14 

 
that implement the design requirements of this paragraph, and (ii) an exemplar of a Visa POS Debit Device that complies with the rules. In the event
that Plaintiffs at any time agree, or the Court rules, that MasterCard may use a particular visual identification method for MasterCard POS Debit Devices, then Plaintiffs’ agreement or the Court’s ruling will be considered a term of the
MasterCard Settlement Agreement for purposes of the Most Favored Nations Clause set forth in paragraph 30 below. 
 (b) These rules shall
require that the debit identifier compliant with paragraph (a) above be contained on any Visa POS Debit Devices issued after January 1, 2004 and on Visa POS Debit Devices issued before January 1, 2004 upon re-issuance within the
normal re-issuance cycle, provided however that Visa will require issuers to have 80 percent of outstanding Visa POS Debit Devices in compliance herewith by July 1, 2005, and 100 percent in compliance by January 1, 2007. The foregoing
requirements shall not apply to prepaid gift cards that are disposable, issued prior to January 1, 2004, and not reloadable after January 1, 2004. Reloadable pre-paid gift cards issued prior to January 1, 2004, that do not comply with
the design requirements of subparagraph (a) above, may not be reloaded after January 1, 2004. For purposes of satisfying the 80% requirement as of July 1, 2005 only, any Visa POS Debit Device issued as of January 1, 2004 that
displays the words “check card” on the face of the card shall be deemed to be a complying card. Visa shall provide Plaintiffs’ Co-Lead Counsel, upon written request, written certification that the 80 percent and 100 percent compliance
requirements have been reached. 
 (c) In lieu of using the debit identifier on Visa POS Debit Devices as described in paragraph
(a) above, Visa retains the right at any time to adopt a new debit identifier for all devices herein defined as Visa POS Debit Devices, so long as these devices comply with 

  

 15 

 
the design requirements of subparagraph (a) above, and all other applicable terms of this Agreement, and Visa provides Plaintiffs’ Co-Lead Counsel
within sixty (60) days before it is implemented both (i) written notice of any such debit identifier, and (ii) an exemplar of a Visa POS Debit Device that carries the new debit identifier. 
 (d) In lieu of using the current Visa blue, white, and gold bands design as the Visa brand on Visa POS Debit Devices, Visa retains the right at any time
to adopt a new brand for all or any devices herein defined as Visa POS Debit Devices, so long as these devices comply with all applicable requirements of paragraphs 4, 5, and 7 and Visa provides Plaintiffs’ Co-Lead Counsel within sixty
(60) days before it is implemented both (i) written notice of any such brand, and (ii) an exemplar of a Visa POS Debit Device that carries the new brand. 
 Signage 
 6. On or before January 1, 2004, Visa, shall deliver signage to acquirers, upon
request, for merchant usage at the point of sale and at the entrance to the store, communicating the fact that a given merchant accepts Visa POS Debit Devices. Visa shall provide Plaintiffs’ Co-Lead Counsel an exemplar of such signage by
November 1, 2003. 
 Electronic Identification 
 7. (a) Visa shall adopt rules, effective January 1, 2004, requiring that Visa POS Debit Devices not already having one be given unique Bank Identification Numbers (“BINs”), which each merchant and
acquirer can utilize, with currently available technology, to distinguish Visa POS Debit Devices from Other Visa Products. This BIN shall be encoded in the magnetic stripe and any other electronic component of the card used for authorization and/or
settlement (e.g., a chip) in such a way that all electronic point-of-sale terminals are, or can reasonably be made, capable of reading the electronic information. Visa shall provide a copy of these rules to Plaintiffs’ Co-Lead Counsel no
later than November 1, 2003. 
  

 16 

 (b) These rules shall apply to any Visa POS Debit Devices issued after January 1, 2004, and to Visa
POS Debit Devices issued before January 1, 2004 upon their re-issuance in accordance with normal re-issuance cycles, provided however that Visa will require issuers to have 80 percent of outstanding Visa POS Debit Devices in compliance herewith
by July 1, 2005, and 100 percent in compliance by January 1, 2007. The foregoing requirements shall not apply to prepaid gift cards that are disposable, issued prior to January 1, 2004, and not reloadable after January 1, 2004.
Reloadable pre-paid gift cards issued prior to January 1, 2004, that do not comply with the electronic identity requirements of subparagraph (a) above, may not be reloaded after January 1, 2004. Visa shall provide Plaintiffs’
Co-Lead Counsel, upon written request, written certification that the 80 percent and 100 percent compliance requirements have been reached. 
 (c) These rules shall also provide that Visa shall require its acquirers to make available to merchants, upon merchants’ request and in any form they reasonably request, a complete list of the BIN numbers that apply to all Visa POS
Debit Devices, updated consistent with the current practice of Visa’s acquirers. 
 (d) Commencing July 1, 2004, for the period
ending January 1, 2007, Visa shall offer an electronic service to enable merchants to identify Visa POS Debit Devices: (i) in the event that, exercising its reasonable and good faith belief, Visa concludes that there is a reasonable market
demand and business case that justifies such service, and that the demand is not otherwise being reasonably met, or (ii) upon a showing by Plaintiffs’ Co-Lead Counsel that there is a reasonable market demand and business case that
justifies such service, and that the 

  

 17 

 
demand is not otherwise being reasonably met. In the event of a dispute as to whether there is a reasonable market demand and business case that justifies
such service, and that the demand is not otherwise being reasonably met, the question shall be determined by the Court or by such arbitrator as the Court may designate. 
 (e) Until the time that Visa has reached 100 percent compliance with the design requirements provided in paragraph 5 above, merchants that choose not to accept Visa POS Debit Devices and that use any of the above
methods for electronically identifying Visa POS Debit Devices shall not incur any charges by either Visa or its acquirers for a Visa POS Debit Device transaction that is declined or rejected because the merchant does not accept Visa POS Debit
transactions. 
 Interchange Rate Reductions 
 8. (a) By August 1, 2003, and continuing through December 31, 2003, Visa shall reduce by at least $0.14 for supermarket debit transactions at Class Members, and by at least 48 basis points, on an aggregate effective basis, for all
other types and categories of Visa POS Debit Device transactions at Class Members, the published interchange rates in effect on April 30, 2003 for these transactions. These reductions will result in a supermarket debit transaction rate of $0.26
or lower at Class Members and an aggregate effective interchange rate for all other types and categories of Visa POS Debit Device transactions at Class Members estimated by Visa to be 123 basis points or lower. On January 1, 2004 the
requirement in the preceding sentence shall terminate, and Visa shall be free to set interchange rates without restriction after that date, as otherwise permitted by law. On or before July 1, 2003, Visa will provide Plaintiffs’ Co-Lead
Counsel with a schedule that contains the actual interchange rates that will take effect by August 1, 2003 for each type and category of Visa POS Debit Device transaction at Class Members and 

  

 18 

 
the rates for these transactions in effect on April 30, 2003. Visa will provide notice to acquirers forty-five (45) days in advance of the first
change in interchange rates for Visa POS Debit Device transactions occurring on or after January 1, 2004, and Visa will require its acquirers to provide written notice of such changes to merchants in the acquirers’ next regular
communication with their merchants. In the alternative, Visa will provide Plaintiffs’ Co-Lead Counsel with thirty (30) days advance written notice of such interchange rate changes. Nothing contained in this Agreement shall be deemed to
prohibit Visa from providing negotiated interchange rates to merchants to incent acceptance or promotion of any or all Visa Branded Products. 
 (b) In recognition of the interim period between the execution of the Memorandum of Understanding on April 30, 2003, and August 1, 2003, on or before December 22, 2003, Visa shall pay the Settlement Fund Account the sum of
twenty-five million dollars ($25,000,000). This payment is reflected in Payments One and Two in the schedule set forth in paragraph 3. 
 Steering

 9. Visa will not enact any rules that prohibit merchants from encouraging or steering Visa POS Debit Device cardholders to use other
forms of payment or that prohibit merchants from providing a discount to consumers who pay by any other form of payment. 
 Prohibiting Competing Debit
Marks 
 10. For a period of two years from the date of the Settlement Agreement, Visa (including Interlink and any other Visa affiliate,
parent, subsidiary, or division) will not enter into a contract with a member financial institution that prohibits the financial institution from issuing an ATM and/or POS debit card of any competing ATM and/or POS network, other than 

  

 19 

 
one operating under a trademark owned by MasterCard. This provision does not affect the validity of existing agreements entered into prior to the date of
this Settlement Agreement. Apart from this provision, nothing herein shall prohibit Visa from competing with any other payment card brand for the card issuing business of Visa member financial institutions. 
 Notice and Administration Costs 
 11. The Gross Settlement Fund shall be used to pay the costs and expenses associated with the administration of the Settlement, including without limitation, the costs of identifying Class Members and effecting the mailing and publishing of
Notice, the administrative expenses incurred and fees charged by the Claims Administrator in connection with providing Notice and administering the distribution of the Net Settlement Fund, the payment of any taxes on the earnings of the Gross
Settlement Fund, and the provision of any educational materials to merchants and consumers explaining the terms and conditions of this Agreement. If Plaintiffs’ Co-Lead Counsel determine that such payments are necessary prior to the Effective
Date, HE will not unreasonably withhold its signature on such expenditures from the Settlement Fund Account, and Plaintiffs’ Co-Lead Counsel, or at their direction, the Claims Administrator, may make such expenditures without Court approval. In
the event that HE is requested by Plaintiffs’ Co-Lead Counsel, under this paragraph or paragraph 3(b), to provide its signature to authorize payment for notice or administration expenses or for any other expenditure, and HE so provides its
signature, then Plaintiffs (solely through the Settlement Fund) will indemnify and hold harmless Visa and HE from and against any and all claims asserted by any person arising out of such payment. In the event that HE unreasonably withholds its
signature, then Visa will indemnify and hold harmless Plaintiffs and Plaintiffs’ Co-Lead Counsel from and against any and all claims asserted by any person arising out of the failure to provide such payment. 
  

 20 

 Plan of Allocation of Settlement Funds 
 12. (a) On or before August 18, 2003, Plaintiffs’ Co-Lead Counsel shall file a motion for approval of a Plan of Allocation of Settlement Funds
that in their opinion will fairly and adequately address the questions of settlement administration, any claims requirements, and allocation of the Net Settlement Fund among the Class Members. Visa shall not directly or indirectly take any position
with respect to any plan of allocation or amount of distribution to any Class Member, counsel, expert or consultant, or any other person in connection with this Class Action. 
 (b) Except as otherwise expressly provided in this Settlement Agreement, in no event shall any portion of the Gross Settlement Fund be distributed or
revert to Visa, under any circumstances. 
 (c) After Final Settlement Approval, the amounts remaining in the Gross Settlement Fund shall be
distributed as ordered by the Court. 
 13. In no event shall Visa have any liability or responsibility with respect to the distribution and
administration of the Gross Settlement Fund, including, but not limited to, the costs and expenses of such distribution and administration, and the costs and expenses of Notice. The Plan of Allocation of Settlement Funds is a matter separate and
apart from this Settlement Agreement, and any decision by the Court concerning the plan of distribution shall not effect the validity or finality of the Settlement as to Visa. 
 Attorneys’ Fees and Expenses 
 14. On or before August 18,
2003, Plaintiffs’ Co-Lead Counsel shall file a Fee and Expense Application for distribution from the Gross Settlement Fund of a Fee Award consisting of an award of Plaintiffs’ attorneys’ fees and reimbursement of costs and expenses.
Plaintiffs’ 

  

 21 

 
Co-Lead Counsel reserves the right to make additional applications for fees, costs, and expenses incurred in obtaining Final Settlement Approval and
administering the Settlement. C&P shall allocate the Fee Award among Plaintiffs and their counsel, and with respect to Plaintiffs’ attorneys’ fees, in a manner in which they in good faith believe reflects the contributions of
Plaintiffs’ Counsel to the prosecution and settlement of the Action. Visa agrees that it shall not directly or indirectly take any position on Plaintiffs’ Fee and Expense Application. 
 15. Visa shall not be liable for any costs, fees or expenses of any of Plaintiffs’ respective attorneys, experts, advisors, agents and
representatives. All such costs, fees and expenses, including the costs and expenses of the class representatives, as approved by the Court, shall be paid out of the Gross Settlement Fund. Except as provided in paragraphs 3 and 11 relating to
Visa’s obligation to reasonably consent to the distribution of settlement funds for the payment of Notice and administration costs prior to the Effective Date, Visa shall not have any liability with respect to the distribution and
administration of the Gross Settlement Fund, including, but not limited to, the costs and expenses of such distribution and administration or to the giving of Notice, including, but not limited to, the costs and expenses associated with identifying
Class Members. 
 16. Upon the Court’s entry of the Order and Final Judgment, Plaintiffs’ Co-Lead Counsel may make an application
to the Court for immediate payment of the Fee Award. Visa will take no position on such an application, subject to Plaintiffs’ counsel’s obligation to pay back any such amount if, or to the extent that, the Fee Award is amended, reversed
on appeal, or does not become final. 
 17. The procedure for the allowance or disallowance by the Court of any applications for
Plaintiffs’ attorneys’ fees, costs and expenses to be paid out of the Gross Settlement Fund, are 

  

 22 

 
distinct from the Settlement set forth in the Settlement Agreement, and are to be considered by the Court separately from the Court’s consideration of
the fairness, reasonableness and adequacy of the Settlement. Any order or proceedings relating to any fee and expense application, or any appeal from any order relating thereto or reversal or modification thereof, shall not operate to terminate or
cancel the Settlement Agreement, or affect or delay the finality of the Order and Final Judgment approving the Settlement Agreement. 
 Best Efforts to Effectuate This Settlement 
 18. The Settling Parties and their counsel agree to recommend approval
of this Settlement Agreement by the Court and to undertake their best efforts, including all steps and efforts contemplated by this Settlement Agreement and any other steps and efforts that may be necessary or appropriate, by order of the Court or
otherwise, to secure Final Settlement Approval and otherwise carry out the terms of this Settlement Agreement. 
 19. Visa will cooperate
with Plaintiffs by using reasonable efforts to provide Plaintiffs existing merchant specific and aggregate transaction data from Visa’s databases to be used in connection with the allocation of the Net Settlement Fund (with all reasonable costs
incurred under this paragraph and paragraph 23 to be paid out of the Settlement Fund Account and capped at $35,000). 
 Motion for
Preliminary Approval 
 20. By June 9, 2003, Plaintiffs shall submit to the Court a motion for preliminary approval of the
Settlement, and for a stay of all proceedings in the Class Action against Visa until the Court has approved the Settlement and entered the Order and Final Judgment. Visa will not oppose this motion. This motion shall include (i) the proposed
form of Order and Final Judgment, attached hereto as Exhibit D, and (ii) the proposed form of Preliminary Approval Order preliminarily approving this Settlement Agreement, attached hereto as Exhibit F. By June 

  

 23 

 
9, 2003, Plaintiffs shall also submit to the Court for approval a Stipulation and Order for Providing Notice of Settlement, attached hereto as Exhibit C,
which contains the Notice Plan and the forms of mail and publication Notice. 
 Notice to Class 
 21. In the event that the Court preliminarily approves the Settlement on or before June 16, 2003, and as more fully set forth in the Notice Plan,
Plaintiffs shall pursuant to Rule 23 of the Federal Rules of Civil Procedure (i) on or before July 5, 2003, provide Class Members who have been identified by reasonable means, notice of the Settlement by first class mail, unless
circumstances beyond the control of Plaintiffs prevent Plaintiffs from providing such mail notice, in which case Plaintiffs shall take all necessary and appropriate steps to insure that such notice is provided as soon as possible pursuant to an
order of the Court approving Notice, and (ii) on or before August 4, 2003, provide Class Members notice by publication in a Notice Plan designed to have at least the same reach as that approved by the parties and the Court and implemented
in the Fall of 2002 for the purposes of providing Class Members with Notice of Pendency. 
 22. The Settling Parties shall cooperate in
effecting Notice to the Class that satisfies the requirements of due process and Rule 23 of the Federal Rules of Civil Procedure. 
 23. Visa
will cooperate with Plaintiffs by using reasonable efforts to provide Plaintiffs existing merchant specific and aggregate data from Visa’s databases to be used in connection with providing Notice to the Class (with all reasonable costs incurred
under this paragraph and paragraph 19 to be paid out of the Settlement Fund Account and capped at $35,000). 
  

 24 

 Motion for Entry of Final Judgment 
 24. If, after Notice to the Class, the Court approves this Settlement Agreement, then Plaintiffs shall seek, and Visa will not oppose, entry of an Order
and Final Judgment, in the form attached hereto as Exhibit D, which among other things: 
 a. Approves finally this Settlement and its terms
as being a fair, reasonable and adequate settlement as to Plaintiffs within the meaning of Rule 23 of the Federal Rules of Civil Procedure and directing its consummation pursuant to its terms; 
 b. Approves finally the Plan of Allocation of Settlement Funds, Notice, and the Notice Plan, as being fair and reasonable within the meaning of, and
satisfying the requirements of, Rule 23 of the Federal Rules or Civil Procedure and due process; 
 c. Directs that, as to Visa, the Class
Action be dismissed with prejudice and, except as provided for herein, without costs; 
 d. Directs that Visa comply with its payment
obligations and other commitments set forth in the Agreement; 
 e. Reserves to this Court exclusive jurisdiction over the Settlement and
this Settlement Agreement, including the administration and consummation of this Settlement; 
 f. Determines pursuant to Rule 54(b) of the
Federal Rules of Civil Procedure that there is no just reason for delay and directing that the judgment of dismissal shall be final and appealable; and 
 g. Directs that, for a period of five years, the Clerk of the Court shall maintain the record of those members of the Class who have timely excluded themselves from the Class and that a certified copy of such records
shall be provided to Visa, at its expense. 
  

 25 

 Final Settlement Approval 
 25. This Settlement Agreement shall become final upon the occurrence of all of the following three events: 
 a. Approval of the Settlement Agreement in all material respects by the Court as required by Rule 23(e) of the Federal Rules of Civil Procedure;

 b. Entry by the Court, as provided for in paragraph 24, of an Order and Final Judgment of dismissal with prejudice as to Visa against all
Plaintiffs and members of the Class who have not timely excluded themselves from the Class Action and the Order and Final Judgment is not vacated or modified in any material way affecting any party’s rights or obligations under the Settlement
Agreement, upon appeal or otherwise; and 
 c. Expiration of the time for appeal, or the time to seek permission to appeal, from the
Court’s approval of this Settlement Agreement and entry of an Order and Final Judgment (as described in paragraph 24 hereof) or, if appealed, approval of this Settlement Agreement and the Order and Final Judgment have been affirmed in their
entirety by the court of last resort to which such appeal has been taken and such affirmance has become no longer subject to further appeal or review. However, the Settlement shall become final with respect to Visa notwithstanding the actual or
potential filing of any appeal that concerns only (i) an award of attorneys’ fees, costs, or expenses; or (ii) the plan of allocation of the Settlement Fund (as distinct from the amount of the Settlement Fund). A modification or
reversal on appeal of any award of attorneys’ fees, costs, or expenses, or of the Plan of Allocation of the Settlement Fund (as distinct from the amount of the Settlement Fund) shall not be deemed to be a modification of all or part of the
terms of this Settlement Agreement or the Order and Final Judgment. 
 No Final Settlement Approval 
 26. In the event there is no Final Settlement Approval, then: 
 a. The Gross Settlement Fund, less (i) only the costs incurred up to $6 million in connection with Notice and administration, and (ii) any taxes incurred or held in reserve by the Settlement Fund for
the payment of taxes on any interest earned by it, shall revert to Visa; and 
  

 26 

 b. This Settlement Agreement shall be canceled and terminated, and shall become null and void. In such
event, the Settlement shall be without prejudice; the Settling Parties shall revert to their litigation positions immediately prior to the execution of the Memorandum of Understanding executed on April 30, 2003; and the fact and terms of this
Settlement shall not be admissible in any hearing or trial of this Action or any other civil action. 
 Satisfaction of Claims

 27. Plaintiffs shall look solely to the Settlement Agreement for settlement and satisfaction against Visa of all claims that are
released hereunder. Except as provided by order of the Court, no Class Member shall have any interest in the Settlement Fund or any portion thereof. 
 Release 
 28. In addition to the effect of any Order and Final Judgment entered in accordance with this Settlement
Agreement, upon this Settlement Agreement becoming final as to Visa, the Released Parties shall be released and forever discharged from all manner of claims, demands, actions, suits, causes of action against the Released Parties, whether class,
individual, or otherwise in nature, damages whenever incurred, liabilities of any nature whatsoever, including costs, expenses, penalties and attorneys’ fees, known or unknown, suspected or unsuspected, in law or equity, that any Releasing
Party ever had, now has or hereafter can, shall or may have, relating in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the Complaint or any of the complaints consolidated therein, including, without
limitation, claims 

  

 27 

 
which have been asserted or could have been asserted in this litigation which arise under or relate to any federal or state antitrust, unfair competition,
unfair practices, or other law or regulation, or common law, including, without limitation, the Sherman Act, 15 U.S.C § 1 et seq. Each Class Member hereby covenants and agrees that it shall not, hereafter, seek to establish liability
against any of the Released Parties based, in whole or in part, upon any of the Released Claims. 
 Waiver of Breach 

29. The waiver by any party of any breach of this Agreement shall not be deemed or construed as a waiver of any other breach of this Agreement,
whether prior, subsequent or contemporaneous. 
 Most Favored Nations Clause 
 30. Plaintiffs agree that, effective upon the date hereof, in the event that Plaintiffs’ settlement in this Action with MasterCard provides for a
more favorable term or terms than the term or terms set forth herein, then Visa shall be entitled to the more favorable term or terms and this Settlement Agreement shall be amended to incorporate the more favorable term or terms. Notwithstanding the
foregoing, this provision does not apply to the terms set forth in paragraphs 3, 8, and 10 of this Settlement Agreement relating to (i) payments to the Settlement Fund Account, (ii) interchange rate reductions, and (iii) prohibiting
members from issuing the ATM or POS debit card of a competing ATM and/or POS debit network. 
 This Settlement Is not an Admission

 31. In the event that the Settlement does not become final as to Visa in accordance with the terms hereof, then this Settlement
Agreement (including its exhibits) shall be of no force or effect and, in any event, the Settling Parties agree that this Settlement Agreement, including its exhibits, whether or not it shall become final as to Visa, and any and all negotiations,
documents and discussions associated with it shall be without prejudice to the rights of any party, 

  

 28 

 
shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by Visa or of the
truth of any of the claims or allegations contained in the Complaint or any other pleading, and evidence thereof shall not be discoverable or used directly or indirectly, in any way, whether in the Class Action or in any other action or proceeding.
The Settling Parties expressly reserve all of their rights if the Settlement does not become final as to Visa in accordance with the terms of this Settlement Agreement. 
 Protection of Confidential Information and Discovery Materials 
 32. The Settling Parties and
their respective counsel acknowledge and agree that discovery in this action has involved disclosure of trade secrets and other confidential and proprietary business, technical and financial information. The Settling Parties and their respective
counsel agree that, except as otherwise required by law, within sixty (60) days after the later of the time as of which (i) Visa has complied with all of its obligations under the Settlement Agreement, or (ii) all litigation against
Visa by merchants who have opted out of the Class have been concluded, all materials produced by, or information discovered of, or records of information discovered of, the Settling Parties (including their past, present and former parents,
subsidiaries, divisions, affiliates, associates, successors, predecessors, trustees, member financial institutions, attorneys, advisors, investment advisors, insurers, co-insurers, reinsurers, foundations, stockholders, officers, directors,
employees, agents and any of their legal representatives (and the predecessors, heirs, executors, administrators, successors and assigns of each of the foregoing)) that contain Confidential Information or Outside Counsel Eyes Only Information (as
defined in the Protective Order governing this Action) including, without limitation, information or data stored or recorded in the form of electronic or magnetic media, that are in the possession of counsel for the Settling Parties or their
experts, shall be destroyed or returned to the producing party. Upon request, counsel for each party shall provide the 

  

 29 

 
producing party with a written declaration under penalties of perjury certifying that all documents required to be returned or destroyed have been returned
or destroyed. Notwithstanding the foregoing, and pursuant to the terms of the Protective Order and the limitations set forth therein on how Confidential and Outside Counsel Eyes Only Information can be used, this provision does not apply to
(i) outside counsel’s copies of documents filed with the Court, and (ii) outside counsel’s file copies of papers prepared in connection with this Action. This provision also does not apply to materials that have been unsealed by
the Court. 
 Binding Effect 
 33. This Settlement Agreement shall be binding upon, and inure to the benefit of, the Settling Parties and their respective past, present or future officers, directors, stockholders, member financial institutions,
agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns. 
 Representation and Warranty 
 34. Visa represents and warrants that it has the authority to require its member financial institutions to comply with the rules adopted by Visa in compliance with the terms and conditions set forth in the Settlement Agreement. Visa further
represents and warrants that it will take all reasonably necessary steps to ensure compliance by its member financial institutions with the rules so adopted by Visa using no less stringent measures of enforcement as are applied to the enforcement of
other Visa rules, which may include at Visa’s option, but not be limited to, rescinding all membership rights of any member financial institution that fails to comply with any term or condition set forth in the Settlement Agreement. 

 

 30 

 Integrated Agreement 
 35. This Settlement Agreement contains an entire, complete, and integrated statement of each and every term and provision agreed to by and among the
Settling Parties; it is not subject to any condition not provided for herein. This Settlement Agreement shall not be modified in any respect except by a writing executed by all the parties hereto. All of the exhibits attached hereto are hereby
incorporated by reference as though fully set forth herein. 
 No Conflict Intended 
 36. Any inconsistency between this Settlement Agreement and the exhibits attached hereto shall be resolved in favor of this Settlement Agreement. The
headings used in this Settlement Agreement are for the convenience of the reader only and shall not affect the meaning or interpretation of this Settlement Agreement. 
 No Party Is the Drafter 
 37. None of the Settling Parties shall be considered to be the
drafter of this Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter hereof. 
 Choice of Law 
 38. All terms
of this Settlement Agreement and the exhibits hereto shall be governed by and interpreted according to the substantive laws of the State of New York without regard to its choice of law or conflict of laws principles. 
 Continuing Jurisdiction of this Court 
 39. (a) The Settling Parties hereby irrevocably submit to the exclusive jurisdiction of the United States District Court for the Eastern District of New York for any suit, action, proceeding or dispute arising out of or relating to this
Settlement Agreement or the applicability 

  

 31 

 
of this Settlement Agreement and exhibits hereto. All applications to the Court with respect to any aspect of the Settlement shall be presented to and
determined by United States District Judge John Gleeson, or, if he is not available, any other Judge designated by the Court. Without limiting the generality of the foregoing, it is hereby agreed that any dispute, including but not limited to any
suit, action or proceeding by a Plaintiff in which the provisions of this Settlement Agreement are asserted as a defense in whole or in part to any claim or cause of action or otherwise raised as an objection, constitutes a suit, action or
proceeding arising out of or relating to this Settlement Agreement and exhibits hereto. 
 (b) In the event that the provisions of this
Settlement Agreement are asserted by Visa as a defense in whole or in part to any claim or cause of action or otherwise raised as an objection in any other suit, action or proceeding by a Plaintiff, it is hereby agreed that Visa shall be entitled to
a stay of that suit, action or proceeding until the United States District Court for the Eastern District of New York has entered an order or judgment determining any issues relating to the defense or objection based on such provisions. Solely for
purposes of such suit, action or proceeding, to the fullest extent they may effectively do so under applicable law, the Settling Parties irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim or objection
that they are not subject to the jurisdiction of such court, or that such court is, in any way, an improper venue or an inconvenient forum. 
 40. In the event that Visa does not fulfill any of its obligations under the Settlement Agreement, Plaintiffs’ Co-Lead Counsel, may seek from the Court any and all relief they believe appropriate. 
 41. In the event that Visa does not fulfill its obligations relating to payments to the Settlement Fund Account as specified in paragraph 3, both
Plaintiffs’ Co-Lead Counsel or any 

  

 32 

 
purchaser, assignee, or entity involved with securitization or financing of the Settlement Fund as provided for in paragraph 3(e), may seek from the Court
any and all relief they believe appropriate. 
 42. Visa’s obligations under paragraphs 4 through 7, and 9 above, are subject to
modification by the Court, upon the motion of either Visa or Plaintiffs, pursuant to the processes and standards for modification of consent decrees. 
 Reservation of Rights and Privileges 
 43. Nothing in this Settlement Agreement is intended to
waive the Settling Parties’ right to assert that any information or material is protected from discovery by reason of any individual or joint defense privilege or work product protection or other privilege, protection or immunity, or is
intended to waive the Settling Parties’ right to contest any such claim of privilege, protection or immunity. 
 Tax Treatment

 44. The Settling Parties agree to treat the Settlement Fund Account as being at all times a qualified settlement fund within the
meaning of Treasury Regulation § 1.468B-1 and Section 468B of the Internal Revenue Code, as amended, for the taxable years of the Settlement Fund Account, beginning with the date it is created. In addition, the fund
“administrator,” as defined below, and, as required, Visa, shall jointly and timely make such elections as are necessary or advisable to carry out the provisions of this paragraph, including the “relation-back election” (as
defined in Treas. Reg. § 1.468B-1(j)(2)) back to the earliest permitted date. Such elections shall be made in compliance with the procedures and requirements contained in such regulations. It shall be the responsibility of Plaintiffs’
Co-Lead Counsel to timely and properly prepare, and deliver the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur. 
  

 33 

 45. For purposes of Section 468B of the Internal Revenue Code, as amended, and the regulations
promulgated thereunder, the fund administrator shall be Plaintiffs’ Co-Lead Counsel, or any person or entity that Plaintiffs’ Co-Lead Counsel may designate. Plaintiffs’ Co-Lead Counsel shall timely and properly file or cause to be
filed all tax returns necessary or advisable with respect to the Settlement Fund Account, and make or cause to be made all required tax payments, including deposits of estimated tax payments in accordance with Treas. Reg. § 1.468B-2(k).
Such returns (as well as the election described in paragraph 44 hereof) shall be consistent with this paragraph and reflect that all taxes (including any interest or penalties) on the income earned by the Settlement Fund Account shall be paid out of
the Settlement Fund Account. Visa further agrees to file and furnish all statements and take all actions required of a transferor by section 1.468B-3(e) of the Treasury Regulations. All expenses and costs incurred in connection with the operation
and implementation of this paragraph (including without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this paragraph)
(“Tax Expenses”), shall be paid out of the Gross Settlement Fund or the Settlement Fund Account. 
 46. All (i) taxes
(including any interest or penalties) arising with respect to the income earned by the Gross Settlement Fund, including any taxes or tax detriments that may be imposed upon Visa with respect to any income earned by the Gross Settlement Fund for any
period during which the Gross Settlement Fund does not qualify as a qualified settlement fund for Federal or state income tax purposes (“Taxes”); and (ii) expenses and costs incurred in connection with the operation and implementation
of this paragraph (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this paragraph) (“Tax 

  

 34 

 
Expenses”), shall be paid out of the Gross Settlement Fund or the Settlement Fund Account; in all events the Released Parties shall have no liability
for Taxes or the Tax Expenses. Further, Taxes and Tax Expenses shall be treated as, and considered to be, a cost of administration of the Settlement and shall be timely paid out of the Gross Settlement Fund or the Settlement Fund Account without
prior order from the Court. The fund administrator shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to Class members any funds necessary to pay such amounts including the establishment of adequate
reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be withheld under Treas. Reg. § 1.468B-2(l)(2)). The Released Parties are not responsible and shall have no liability therefor. The Settling Parties agree
to cooperate with the fund administrator, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions of this paragraph. 
 47. Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure is required to be kept confidential to the extent necessary to comply with any applicable federal or state
securities laws, or as required by any party to facilitate compliance with such laws. 
 Execution in Counterparts 

48. This Settlement Agreement may be executed in counterparts, including signature transmitted by facsimile. Each counterpart when so executed shall
be deemed to be an original, and all such counterparts together shall constitute the same instrument. 
  

 35 

 Provision of Notice to Counsel 
 49. All notices or materials that must be provided under this Agreement shall be sent by (i) hand delivery, (ii) registered or certified mail,
return receipt requested, postage pre-paid, or (iii) Federal Express or similar overnight courier, and directed as follows: 
  

	 	a.	If to Plaintiffs’ Co-Lead Counsel, then to: 

 Constantine & Partners, P.C. 
 Lloyd Constantine 
 477 Madison Avenue 
 New York, NY 10022 
 and 
 Hagens Berman LLP 
 George Sampson 
 1301 Fifth Avenue, Suite 2900 
 Seattle, Washington 98101 
  

	 	b.	If to Visa’s Counsel, then to: 

 Heller Ehrman White & McAuliffe, LLP 
 Stephen V. Bomse 
 333 Bush Street 
 San Francisco, CA 94104 
 or such other address or person as Plaintiffs’ Co-Lead Counsel or Visa may designate by giving notice to the
Settling Parties in the manner described in this paragraph. 
  

 36 

 IN WITNESS WHEREOF, the signatories have read and understood this Settlement Agreement, have executed it,
represent that the undersigned are authorized to execute this Settlement Agreement on behalf of the represented parties, have agreed to be bound by its terms, and have entered into this Settlement Agreement as of June 4, 2003. 
  

											
	CONSTANTINE & PARTNERS, P.C.	 		 	HELLER EHRMAN WHITE & McAULIFFE, LLP	  	
						
	By:	 	 /s/ Lloyd Constantine
	 		 		 		  	
						
		 		 		 	By:	 	 /s/ Stephen V. Bomse
	  	
	Lloyd Constantine (LC-8465)	 		 		  	
	Robert L. Begleiter (RB-7052)	 		 	Stephen V. Bomse	  	
	Matthew L. Cantor (MC-8183)	 		 	Brian P. Brosnahan	  	
	Stacey Anne Mahoney (SM-5425)	 		 	333 Bush Street	  	
	Amy N. Roth (AR-4534)	 		 	San Francisco, CA 94104	  	
	Gordon Schnell (GS-2567)	 		 	(212) 772-6000 (telephone)	  	
	Jonathan D. Shaman (JS-8481)	 		 	(212) 772-6268 (facsimile)	  	
	Mitchell C. Shapiro (MS-1019)	 		 		  	
	Jeffrey I. Shinder (JS-5719)	 		 	Counsel for Visa USA Inc.	  	
	Michael Spyropoulos (MS-9873)	 		 		 		  	
	477 Madison Avenue, 11th Floor	 		 		 		  	
	New York, New York 10022	 		 		 		  	
	(212) 350-2700 (telephone)	 		 		 		  	
	(212) 350-2701 (facsimile)	 		 		 		  	
					
	Counsel for Wal-Mart, Limited Brands, Sears, Safeway, Circuit City, National Retail Federation, Food Marketing Institute, and International Mass Retail Association, and Lead Counsel
for the Certified Class	 		 		 		  	
					
	 HAGENS BERMAN LLP
	 		 		 		  	
						
	 By:
	 	 /s/ George Sampson
	 		 		 		  	
					
	 George W. Sampson (GS-8973)
 1301 Fifth
Avenue, Suite 2900
 Seattle, Washington 98101
 (206) 623-7292 (telephone)
 (206) 623-0594 (facsimile)
	 		 		 		  	
					
	Counsel for Bernie’s Army-Navy Store and Co-Lead Counsel for the Certified Class	 		 		 		  	

  

 37 

 In re Visa Check/MasterMoney Antitrust Litigation: 
 IMPORTANT LEGAL NOTICE TO ALL CLASS MEMBERS 
 FORWARD TO CORPORATE HEADQUARTERS/LEGAL COUNSEL 
 UNITED STATES DISTRICT COURT 
 EASTERN DISTRICT OF NEW YORK 
  

									
	  
	  		  		  		  	
		  	:	  		  		  	
	 IN RE:
	  	:	  		  		  	
		  	:	  		  		  	
	 VISA CHECK/MASTERMONEY
	  	:	  		  		  	
	 ANTITRUST LITIGATION
	  	:	  		  	MASTER FILE NO.	  	
		  	:	  		  	CV-96-5238	  	
		  	:	  		  		  	
	 This Document Relates To:
	  	:	  		  		  	
		  	:	  		  		  	
	 ALL ACTIONS
	  	:	  		  	(Gleeson, J.) (Mann, M. J.)	  	
	  
	  	:	  		  		  	

 NOTICE OF SETTLEMENT OF CLASS ACTION 
  

	TO:	ALL PERSONS AND BUSINESS ENTITIES IN THE UNITED STATES WHO, AT ANY TIME FROM OCTOBER 25, 1992 TO JUNE 21, 2003, HAVE ACCEPTED VISA AND/OR MASTERCARD CREDIT CARDS FOR PAYMENT AND
HAVE THEREFORE BEEN REQUIRED TO ACCEPT VISA AND/OR MASTERCARD-BRANDED DEBIT CARDS (ALSO KNOWN AS VISA CHECK, MASTERMONEY OR MASTERDEBIT CARDS) FOR PAYMENT (“THE CLASS”).

 THIS NOTICE MAY AFFECT YOUR RIGHTS 
 PLEASE READ IT CAREFULLY 
 1. This Notice of Settlement of Class Action
(“Settlement Notice”) is directed to you because your rights may be affected by the settlement of the class action pending in the United States District Court for the Eastern District of New York styled In re Visa Check/MasterMoney
Antitrust Litigation, No. CV-96-5238 (the “Action”). 
 HISTORY OF THE ACTION 
 2. The Action began in October 1996 with the filing of lawsuits by certain retailers and retail trade associations (collectively, the “Named
Plaintiffs”) against Visa U.S.A. Inc. 

 
(“Visa”) and MasterCard International Incorporated (“MasterCard”) (collectively, “the Defendants”). In December 1996, those
lawsuits were consolidated (the “Consolidated Action”), and the Court appointed the New York, New York based law firm of Constantine & Partners to serve as Lead Counsel, and the Seattle, Washington based law firm of Hagens Berman
LLP to serve as Co-Lead Counsel, for the putative class of plaintiffs. (You may view a copy of Pretrial Order Number 1 and additional documents, materials and information about the case by visiting the case website at
www.InReVisaCheck-MasterMoneyAntitrustLitigation.com (the “Website”).) The Named Plaintiffs in the Action who represent the Class certified by the Court, are: Wal-Mart Stores, Inc.; The Limited, Inc.; Sears Roebuck and Co.; Circuit
City Stores, Inc.; Safeway, Inc.; Auto-Lab of Farmington Hills; Bernie’s Army Navy Store; Burlington Coat Factory Warehouse Corporation; The Coffee Stop, Inc., d/b/a Torrero Coffee & Tea Company; Computer Supplies Unlimited; Denture
Specialists, Inc.; Payless ShoeSource, Inc.; Shoes Etc., Inc., d/b/a Arnold’s Shoes; Scrub Shop, Inc.; Sportstop, Inc.; UCC Kwik Doc, Inc., f/k/a UCC Express, Inc.; and Geneva White, D.M.D., P.A. The first (or lead) case was filed by a group of
merchants represented by Constantine & Partners that included Wal-Mart, The Limited, Sears, Circuit City and Safeway; the lead case and the Consolidated Action have sometimes been referred to as the “Wal-Mart case” or the
“Wal-Mart action.” Three merchant trade associations, National Retail Federation, International Mass Retail Association, and Food Marketing Institute, are also Named Plaintiffs in the lead case (and the Consolidated Action). 
 3. The allegations against Visa and MasterCard are set forth in the Second Amended Consolidated Class Action Complaint filed with the Court on
May 26, 1999, a copy of which may be viewed on the Website. In the Action, plaintiffs claimed, among other things, that Visa and MasterCard, individually, and in conspiracy with each other and with their member banks, 

  

 2 

 
have violated the federal antitrust laws by forcing merchants who accept Visa and/or MasterCard-branded credit cards for payment also to accept Visa and/or
MasterCard-branded debit cards for payment, and by conspiring and attempting to monopolize a market for general purpose point of sale debit cards. Plaintiffs claimed that defendants’ actions have caused merchants to pay excessive fees on Visa
and MasterCard signature debit and credit transactions and on on-line PIN debit transactions, and have injured competition, merchants and consumers. Plaintiffs sought: (1) an injunction prohibiting the Defendants from engaging in the alleged
violations of the federal antitrust laws (including the elimination of the alleged forced acceptance of the Visa and/or MasterCard-branded debit card transactions for payment by merchants who accept Visa and/or MasterCard-branded credit cards for
payment), and (2) the recovery of damages for the alleged excess portion of fees paid, as well as costs and attorneys’ fees. 
 4.
Defendants denied Plaintiffs’ allegations, and have denied that Defendants in any way violated the antitrust laws. Defendants asserted defenses to Plaintiffs’ claims, including that Defendants’ challenged actions were lawful,
justified, the result of independent business competition, and that those actions have benefited competition, merchants and consumers. Defendants also asserted that Plaintiffs have not suffered economic harm from the challenged conduct but, in fact,
have benefited. (Copies of defendants’ Answers may be viewed on the Website.) Counsel for MasterCard are located in the New York and Washington, D.C. offices of Clifford Chance US and the New York office of Simpson Thacher and Bartlett. Counsel
for Visa are located in the San Francisco and New York offices of Heller Ehrman White & McAuliffe LLP and the New York office of Arnold & Porter. 
 5. The Named Plaintiffs and defendants engaged in pre-trial discovery that lasted for over three and-a-half years. Pre-trial discovery consisted of the production and review of more than five million pages of
documents and approximately 400 depositions of party and non-party representatives that took over 500 days. Fact discovery concluded on March 15, 2000. 
  

 3 

 6. The Named Plaintiffs submitted reports from five experts in total, including the reports of their
liability and damages expert, Dr. Franklin M. Fisher of MIT, who previously served as the expert for IBM in its multi-decade defense of an antitrust prosecution by the United States government and as the expert for the government in its
antitrust prosecution of Microsoft. Defendants submitted reports from fourteen expert witnesses. Expert discovery was completed on May 26, 2000, except for the further depositions of experts that filed supplemental reports in October 2002,
which were completed by October 31, 2002. 
 7. In the summer of 2000, defendants and the Named Plaintiffs each filed motions asking the
Court to enter summary judgment in their respective favors without a trial, and opposed each others’ motions. The Court elected not to rule on the summary judgment motions until after class certification proceedings had been completed. The
Court permitted the parties to supplement their expert witness reports and summary judgment filings in the Fall of 2002 (thus completing four rounds of briefings and four rounds of expert reports), and conducted an extensive oral argument hearing on
the summary judgment motions on January 10, 2003. On April 1, 2003, 27 days before the scheduled start of the trial, the Court denied defendants’ motions in their entirety, and granted plaintiffs’ summary judgment motion as to
certain elements of plaintiffs’ claims for relief. The Court denied plaintiffs’ motion for summary judgment as to certain of defendants’ defenses. (A copy of the Court’s 4/1/03 Summary Judgment Order may be viewed on the
Website.) As described more fully below in paragraphs 12-14, on April 30, 2003 plaintiffs entered into separate memoranda of understanding with each defendant that set forth the basic terms of the settlement of this lawsuit, and on June 4,
2003 plaintiffs entered into separate settlement agreements with Visa and MasterCard, which collectively are referred to as the “Settlements” or the “Settlement Agreements.” 
  

 4 

 THE CLASS CERTIFICATION RULING AND NOTICE OF PENDENCY TO THE CLASS 
 8. On February 22, 2000, the Court entered an order certifying the Consolidated Action as a class action on behalf of “all persons and business
entities who have accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa Check and/or MasterMoney debit cards” at any time from October 25, 1992 to the present. The Court further ordered that the Class
does not include the named Defendants, their directors, officers or members of their families. Defendants appealed the Court’s Class Certification Order, which was affirmed by the United States Court of Appeals for the Second Circuit in late
2001; the United States Supreme Court rejected defendants’ petition to review the class certification order in 2002. (Copies of the orders of the District Court (2/22/00), the Circuit Court (10/17/01), and the Supreme Court (6/10/02) all
may be viewed on the Website.) 
 9. From September 9 through October 14, 2002, members of the Class were given notice of the
pendency of the class action in an extensive notice campaign, consisting of web postings, newswire press releases, nationwide publication of summary notice and the direct first class mailing of a document entitled Notice of Pendency to over
7.7 million addresses of class members that were provided to the Administrator by Visa, MasterCard and the 80 largest acquirers and processors of Visa and MasterCard transactions. The December 15, 2002 Status Report Concerning Notice to
the Class, which attaches copies of the Notice of Pendency and the Summary Notice, may be viewed on the Website. The Court ruled that the notice plan, which provided class members the opportunity to exclude themselves from the Class if they filed
such requests by November 14, 2002, comported with the requirements of due process and Rule 23 of the Federal Rules of Civil Procedure. (The 6/21/02 Consent Order/Notice of Pendency Order may be viewed on the Website.) 
  

 5 

 10. The Notice of Pendency provided in pertinent part that “by remaining a Class member, you will be
bound by the terms of any judgment in the Action, whether favorable or unfavorable to Plaintiffs. You also agree that any claims against Defendants arising out of the Defendants’ conduct at issue in the Action will be determined in the Action
and cannot be pursued in any other action. If there is a recovery, you may be entitled to share in the proceeds, less such Plaintiffs’ costs, expenses, and attorneys’ fees as the Court may allow out of any such recovery...”

 11. This Settlement Notice has been sent to you in the belief that you may be a member of the Class whose rights may be affected by the
Settlements. It should not be understood as an expression of any opinion by the Court concerning the merits of the Settlements. This Settlement Notice is intended merely to advise you of the Settlements and of your rights with respect to them,
including the right to file an objection by September 5, 2003 and to appear at a hearing to determine the fairness of the Settlements scheduled for September 25, 2003. 
 THE SETTLEMENTS 
 12. The Consolidated Action was scheduled to be tried before a jury between
April 28, 2003 and August 1, 2003. After an exhaustive mediation, which continued night and day for a full week, throughout the weekend prior to the start of trial, on Monday, April 28, 2003, prior to final jury selection, plaintiffs
and MasterCard had negotiated the basic terms of a settlement, and the Court announced that the case against MasterCard had settled. On April 28, 2003, the Court supervised the selection of the jury that would hear the case between plaintiffs
and defendant Visa, and the Court then postponed the start of that trial until April 30, 2003. On the 

  

 6 

 
morning of April 30, 2003, the Court announced a final postponement of the commencement of the trial for two additional days, until May 2, 2003, to
provide the parties additional time to complete a settlement. A Memorandum of Understanding, executed by defendant MasterCard and the plaintiffs’ Lead Counsel and Co-lead Counsel, outlining the parameters of the MasterCard Settlement, was
signed on April 30, 2003. That night, defendant Visa and the plaintiffs’ Lead-Counsel and Co-lead Counsel signed a separate Memorandum of Understanding, also dated April 30, 2003, which incorporated the equitable terms of the
MasterCard MOU, plus one significant additional term of relief, and in view of Visa’s larger transaction volume, twice the monetary recovery. 
 13. Lead-Counsel and Co-lead Counsel for the plaintiffs then engaged in separate negotiations with Visa and MasterCard, which resulted in the execution of two separate settlement agreements on June 4, 2003. The Visa Settlement
Agreement and the MasterCard Settlement Agreement (collectively, the “Settlement Agreements”) may be viewed on the Website. 
 14.
The Settlement Agreements specify the following relief for the members of the certified class: 
 A. The creation of two settlement funds,
totaling $3.05 billion, from which class member claims for damages can be satisfied (after the payment of Class Counsel’s fees, costs and expenses, including the costs of notice and administration of the settlement funds, to be awarded by the
Court). MasterCard will deposit $1.025 billion over a ten-year period in the MasterCard Settlement Fund and Visa will deposit $2.025 billion in the Visa Settlement Fund over the same ten-year period. 
 B. The unbundling of Visa and MasterCard debit card services to merchants from Visa and MasterCard credit card services to merchants, effective
January 1, 2004. Because of this unbundling, merchants will have the right to decide whether or not to accept the Visa and/or MasterCard debit products in a competitive environment, and not be required to accept the Visa and MasterCard
signature debit transactions as a condition of accepting the Visa and MasterCard credit cards. Plaintiffs believe that, because of this competition, and merchants’ right to 

  

 7 

 
decline Visa and MasterCard signature debit acceptance, Visa and MasterCard will maintain their lower interim rates or may even lower their rates further
after January 1, 2004 to merchants for acceptance of their debit products, and that this could result in savings to class members that have not been determined but which could be worth tens of billions of dollars or more. Visa and MasterCard
financial institutions – i.e., the banks that receive the interchange fees at issue for the Visa and MasterCard debit transactions performed by their cardholders – have already begun to report an anticipated reduction in
earnings/revenues that will result from the Settlements. 
 C. The creation and placement of clear, conspicuous and uniform visual
designations on Visa and MasterCard debit cards (or debit devices). In this way, merchants will be able to visually identify Visa and MasterCard debit cards/devices at the point of sale. Visa and MasterCard are also required to identify their debit
cards/devices so merchants can identify them with electronic equipment. 
 D. Merchants shall also have the right to encourage or steer
customers from Visa and MasterCard debit transactions to other forms of payment. 
 E. The barring of Visa for two years from entering into
agreements with financial institutions that prohibit financial institutions from issuing debit cards from competing PIN debit networks. 
 F.
The establishment of unique interim interchange rates for Visa and MasterCard debit transactions for the period from August 1, 2003 through December 31, 2003. These rates will be significantly lower than the rates currently being charged
for Visa and MasterCard debit transactions (for MasterCard at least 1/3 lower aggregate effective rate, for Visa at least 48 basis points lower for nonsupermarkets and at least 14 cents lower per transaction for supermarkets). Plaintiffs believe
that this could result in savings to class members that have not been determined but which could be worth more than $1 billion. 
 G. The
Court’s continuing jurisdiction over Visa, MasterCard and this case to ensure compliance with the Settlement Agreements. 
 DISTRIBUTION OF
SETTLEMENT FUNDS 
 15. If the Settlement Agreements are approved by the Court and become effective, the Settlement Funds (less taxes
on the escrow fund interest, Court approved attorneys’ fees, costs and other expenses, including without limitation costs of Notice and Claims Administration), will be distributed to members of the Class pursuant to a Court approved plan of
allocation and 

  

 8 

 
distribution. By August 18, 2003, Class Counsel will file a detailed plan of allocation, which may include a series of payments to be made over ten
years or may include two or more sets of payments to be made over a shorter period of time to be determined by the Court. While the plan of allocation and distribution has not yet been finalized, plaintiffs will ask the Court to approve a
distribution pro rata (based on a calculation of the participating Class members’ approximate amount of overcharges paid, as claimed by plaintiffs) to participating Class members. It has not yet determined whether participating
Class members will need to provide documentation. Beginning on August 18, 2003, you may visit the Website for details concerning the plan for allocation and distribution. 
 16. In the event the Settlement Agreements are approved, a subsequent notice will advise you of how to participate in the Settlement Funds. (It is
your responsibility to advise the Administrator of any change of address subsequent to your receiving this notice.) In order to establish a right to share in the Settlement Funds, Class members may be required to provide information concerning
their gross United States domestic sales, their sales made with Visa and MasterCard debit cards and/or their sales made with Visa and MasterCard credit cards and debit cards, dating back to October 25, 1992 (and/or such other information
necessary to properly determine and distribute class members’ shares). You should save any and all of your records which contain such information. Whether or not such records will be required under the plaintiffs’ proposed plan of
allocation should be determined by the time of the filing of the plan of allocation and distribution on August 18, 2003, and should be disclosed at that time on the Website. 
 17. Also on August 18, 2003, Class Counsel will file a petition for payment of attorneys’ fees, costs and expenses, and may, from time to time
thereafter, petition the Court for 

  

 9 

 
reimbursement of fees, costs and expenses from the Settlement Funds, including fees incurred by Class Counsel and the Administrator while providing Notice to
the class and while administering the Settlement Funds (including the plan of allocation and distribution). Plaintiffs will NOT be applying to the Court for an incentive award for the Named Plaintiffs, despite the fact that these companies dedicated
thousands of hours of the time of their executive and in-house counsel time prosecuting this case and subjecting their executives to depositions. Plaintiffs will petition for reimbursement of out of pocket costs and expenses incurred and paid by the
Named Plaintiffs in connection with their prosecution of this action on behalf of the Class. Beginning on August 18, 2003, you may visit the Website for details concerning Class Counsel’s petition for payment of attorneys’ fees, costs
and expenses. 
 RELEASE PROVISIONS 
 18. If the Settlement Agreements are approved and become effective, you and all Class Members will be bound by the terms of the Settlement Agreements, and upon their becoming effective, you will be releasing Visa, MasterCard and other
entities from certain claims as set forth below, including claims relating in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the Second Amended Consolidated Class Action Complaint or any of the complaints
consolidated therein, including, without limitation, claims which have been asserted or could have been asserted in this litigation, as follows: 
 Visa, MasterCard and their past, present or future officers, directors, stockholders, member financial institutions, agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners,
heirs, executors, administrators, purchasers, predecessors, successors and assigns (the “Released Parties”) shall be released and forever discharged from all manner of claims, demands, actions, suits, causes of action against the Released
Parties, whether class, individual, or otherwise in nature, damages whenever incurred, liabilities of any nature whatsoever, including costs, expenses, penalties and attorneys’ fees, known or unknown, suspected or unsuspected, in law or equity,
that any Plaintiff or Class Members who have not timely excluded themselves from the Class Action (including any of their past, present or future officers, directors, 

  

 10 

 
stockholders, agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors,
administrators, purchasers, predecessors, successors and assigns), whether or not they object to the Settlement and whether or not they make a claim upon or participate in the Settlement Fund, whether directly, representatively, derivatively or in
any other capacity, ever had, now has or hereafter can, shall or may have, relating in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the Second Amended Consolidated Class Action Complaint or any of the
complaints consolidated therein, including, without limitation, claims which have been asserted or could have been asserted in this litigation which arise under or relate to any federal or state antitrust, unfair competition, unfair practices, or
other law or regulation, or common law, including, without limitation, the Sherman Act, 15 U.S.C § 1 et seq. (the “Released Claims”). Each Class Member hereby covenants and agrees that it shall not, hereafter, seek to establish
liability against any of the Released Parties based, in whole or in part, upon any of the Released Claims. 
 19. In the event that any
provision of this Settlement Agreement is asserted as a defense or is otherwise raised as an objection to any claim or cause of action asserted in any case involving Visa or MasterCard, the District Court for the Eastern District of New York shall
have exclusive jurisdiction to determine any issues relating to the assertion of that defense or objection, and any such case shall be stayed until the United States District Court for the Eastern District of New York has entered an order or
judgment determining such issues. 
 ELECTION BY CLASS MEMBERS TO PARTICIPATE IN, OR TO OBJECT TO, THE CLASS ACTION SETTLEMENTS AND TO APPEAR AT THE
SETTLEMENT FAIRNESS HEARING 
 20. You are a member of the Class if you are not one of the Defendants or their directors, officers or
members of their families, and if you or your business has accepted Visa and/or MasterCard credit cards for payment at any time from October 25, 1992 to June 21, 2003, and if you did not timely file a request for exclusion. If you began
accepting Visa or MasterCard branded credit cards and/or debit cards after June 21, 2002, please see paragraphs 26-32 below, which allow you to opt out of this lawsuit. If you are a Class member, you will be bound by the final Settlements of
this litigation. 
  

 11 

 21. If you are a member of the Class and you want to participate in the Settlements, you are not required
to do anything at this time, although it is advisable for members of the Class who did not receive direct notice addressed to them by first class mail to register with the Administrator by writing to the Administrator at Garden City Group, Inc.,
P.O. Box 9000-6014, Merrick, New York, 11566-9000, in an envelope clearly marked “In Re Visa Check/MasterMoney Antitrust Litigation: Absent Class Member Inquiry.” 
 22. Pursuant to an Order of the Court, a hearing will be held at 9:30 a.m. on September 25, 2003 at the Federal Courthouse, 225 Cadman Plaza East,
Brooklyn, New York, for the purpose of determining whether the Settlements with Visa and MasterCard are fair, reasonable and adequate. The time and date of the hearing may be continued from time to time without further notice. 
 23. Members of the Class that do not wish to object to the Settlements need not appear at the hearing nor do anything else at this time. Any member of
the Class that has not timely requested exclusion from the Class may submit a written objection to the Settlements and/or appear at the hearing in person or by duly authorized attorneys and show cause why the Settlements should not be approved as
fair, reasonable and adequate. However, no Class member shall be heard in opposition to the Settlements, and no paper or brief submitted by any class member shall be received or considered by the Court unless, on or before September 5, 2003,
the Class member files a notice of intention to appear and a statement of the position to be asserted and the grounds therefor, together with copies of any supporting papers or briefs with the Clerk, United States District Court for the Eastern
District of New York, Federal Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Copies of any such objection, supporting papers or brief shall also be sent by first class mail, postage prepaid, postmarked no later than 

  

 12 

 
September 5, 2003, in separate envelopes clearly marked as “Objection by Absent Class Member: In Re Visa Check/MasterMoney Antitrust
Litigation,” addressed to the following: Constantine & Partners, PC, 477 Madison Avenue, New York, New York 10022, The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, NY 10017, and Heller Ehrman White & McAuliffe, LLP, 333 Bush Street, San Francisco, CA, 94104. Your objection should provide the name, address and telephone number of the person or business entity that wishes to
raise the objection, contain your printed name and title (if on behalf of a business entity), verify that the objection is being raised by a Class Member, and be signed by you. In order for your objections to be effective and to be considered by the
Court, they must be postmarked on or before September 5, 2003. 
 24. In determining whether you want to object to the Settlements by
September 5, 2003 and appear at the fairness hearing on September 25, 2003, you may want to consult your own attorney. As noted above, you may enter an appearance through your own counsel at your own expense. As a member of the Class, you
will not be personally responsible for any attorneys’ fees or costs of litigation unless you retain your own counsel, in which case you may be responsible for his or her fees. 
 25. Except as provided herein, no persons shall be entitled to contest the terms and conditions of the Settlements, and persons who fail to object as
provided herein shall be deemed to have waived and shall be foreclosed forever from raising any such objections. 
  

 13 

 ELECTION BY CLASS MEMBERS – WHO BEGAN TO ACCEPT VISA AND/OR MASTERCARD CREDIT CARDS AND/OR DEBIT CARDS FOR
PAYMENT AFTER JUNE 21, 2002 (“NEW MERCHANTS”) – TO PARTICIPATE IN, OR TO BE EXCLUDED FROM, THE CLASS 
 26. If you or your
company is a Class member who became a Class member after June 21, 2002 (i.e., you or your company first began accepting Visa and/or MasterCard credit cards or debit cards for payment after June 21, 2002) (“New
Merchants”), you have a choice of whether to remain a member of the Class. Your choice will have consequences that you should understand before making your decision. In determining whether you want to remain in or be excluded from the Class,
you may want to consult your own attorney. Please note that the right to be excluded from the Class only applies to New Merchants. Class Members who were members of the Class as of June 21, 2002 were provided opt-out rights through a Notice of
Pendency (either by first class mail or by publication of Summary Notice) between September 9 and October 14, 2002, and had the right to be excluded from the Class by making a written request for exclusion by November 14, 2002.

 27. If you are a New Merchant and want to remain a member of the Class, you are not required to do anything at this time. By remaining a
Class member, you will be bound by the Settlements, and by the release of claims described in paragraph 18 above. You may be entitled to share in the Settlement Fund proceeds, less such costs, expenses, and attorneys’ fees (including the costs
of notice and claims administration) as the Court may allow out of any such recovery. 
 28. If you remain a member of the Class: The
Class Representatives, Lead Counsel and Co-Lead Counsel will represent your interests in resolving the Action against Defendants. You will not be personally responsible for Plaintiffs’ attorneys’ fees or costs, except to the extent 

  

 14 

 
that the Court may award such fees, costs and expenses to the attorneys which would be paid out of the Settlement Funds or other recovery in this Action, if
any. If you desire, you also may appear by your own attorney at your own expense. You also may seek to intervene. You will have the right to participate in the Settlements (or in the event the Settlement Agreements do not become effective, any
recovery that may be obtained from Visa or MasterCard on behalf of the Class). If the Settlements do not become effective, and the Named Plaintiffs proceed with the Consolidated Action on behalf of the Class, and no recovery is ultimately obtained,
you may be bound by that result. As detailed above, you may be required as a condition of participating in any recovery to present evidence concerning your acceptance of MasterCard and Visa credit and debit transactions. You should, therefore,
preserve all records concerning these transactions. Your decision to remain a member of the Class or to opt-out of the Class will be binding, regardless of whether the Settlement Agreements are approved or disapproved by the Court. 
 29. You should give notice of any corrections or changes in your address, in writing, in an envelope addressed to the Administrator appointed by the
Court, at The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Attn: In re Visa Check/MasterMoney Antitrust Litigation, that bears the notation “Address Change; In Re: Visa Check/MasterMoney Antitrust
Litigation.” 
 30. If you are a New Merchant and do not want to remain a member of the Class, you may choose to be excluded from the
Class. By electing to be excluded from the Class: 
 A. You will not share in the Settlement Funds (or in the event the Settlements are not
approved by the Court, in any monetary recovery that Visa or MasterCard might pay as a result of a judgment or settlement in Plaintiffs’ favor). 
 B. You will have the right, at your own expense, to pursue any individual claim that you may have against Visa and/or MasterCard by filing your own lawsuit or by seeking to intervene in the Action. 
  

 15 

 31. If you want to be excluded from the Class, you must make a written request for exclusion bearing the
title “Request for Exclusion from Class: In Re Visa Check/MasterMoney Antitrust Litigation,” and send it by first class mail, postage pre-paid, to The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Attn:
In re Visa Check/MasterMoney Antitrust Litigation. Your request should provide the name, address and telephone number of the person(s) or business entity(/ies) that wish(es) to be excluded from the class, contain your printed name and title (if on
behalf of a business entity), and be signed by you. In order for your request to be effective, it must be postmarked on or before September 5, 2003. 
 32. New Merchants who choose not to exclude themselves from the Class may object to the Settlements and participate in the fairness hearing, as detailed in paragraphs 20-25, above. 
 ADDITIONAL INFORMATION 
 33. All references in this Settlement Notice to pleadings, allegations, claims, defenses and Court orders are summaries. Complete copies of the pleadings, orders and other publicly filed documents in the Action may be examined and copied at
any time during regular office hours at the office of the Clerk of the Court, United States District Court for the Eastern District of New York, 225 Cadman Plaza East, Brooklyn, New York, under the file No. CV-96-5238. You also may access the
documents referenced in this notice, along with additional information about the case, the settlements and the settlement approval process by visiting the Website at www.InReVisaCheck-MasterMoneyAntitrustLitigation.com. 
 34. Any questions you have concerning the matters raised in this Notice, or any corrections or changes of name or address, should not be directed to the
Court but should be directed in writing to The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Attn: In re Visa Check/MasterMoney Antitrust Litigation. You may also receive additional information by calling 1
(888) 641-4437. 
  

 16 

 35. Lead Counsel for Plaintiffs is Constantine & Partners, 477 Madison Avenue, New York, New
York 10022; Co-lead Counsel for Plaintiffs is Hagens Berman LLP, 1301 Fifth Avenue, Seattle, Washington, 98101. Any requests for additional information about the case can be submitted to lead counsel or co-lead counsel in writing at either address
listed above, in an envelope that bears the legend “Inquiry by Absent Class Member: In Re Visa Check/MasterMoney Antitrust Litigation”, or by calling 212-350-2799. You may, of course, seek the advice and guidance of your own attorney if
you desire. 
 EXCEPT AS SET FORTH IN THIS NOTICE, 
 PLEASE DO NOT CONTACT THE COURT 
  

					
	 Dated: June     , 2003
	  	  
	  	
		  	 Hon. John Gleeson
 United States District
Judge
	  	

  

 17 

 Legal Notice of Class Action Settlement 
 IF YOU OR YOUR COMPANY HAVE ACCEPTED MASTERCARD AND/OR VISA 
 CARDS FOR PAYMENT AT ANY TIME FROM OCTOBER 25, 1992 THROUGH JUNE 21, 2003, 
 YOU MAY BE
ELIGIBLE TO RECEIVE BENEFITS. 
 Your rights may be affected. Please read this Court-ordered Class Action Notice.

 If you or your company have accepted MasterCard or Visa-branded credit cards or debit cards as payment for goods or services at any time from
October 25, 1992 to June 21, 2003, you or your company may be affected by the settlement of a class action lawsuit pending in the United States District Court for the Eastern District of New York styled In re Visa Check/MasterMoney
Antitrust Litigation (a/k/a Wal-Mart Stores, Inc. et al. v. Visa U.S.A. Inc. and MasterCard International, Inc.), No. CV-96-5238. Defendants Visa and MasterCard have entered into separate settlement agreements by which they would, among other
things, allow merchants to accept the Visa or MasterCard branded credit cards without accepting their debit cards (and vice versa), reduce the prices charged to merchants for off-line signature debit transactions for a period of time, and pay over
ten years into a Settlement Fund amounts totaling $3.05 billion (before payment of attorneys’ fees, costs and expenses to be awarded by the Court). 
 If you are a member of this Class, you may be entitled to benefits if the settlement is approved, and you are encouraged to seek additional information about the settlement of the case, the nature of the claims, your right to object to the
settlement and to participate in a fairness hearing, and your right to opt-out of the settlement if you are a New Merchant (i.e., if you first began accepting Visa and/or MasterCard cards for payment after June 21, 2002). 
 PLEASE NOTE THE FOLLOWING IMPORTANT DATES: 
 Filing of Plan of Allocation/Distribution of Settlement Proceeds: August 18, 2003 
 Filing of Class Counsel
Application for Fees, Costs and Expenses: August 18, 2003 
 Deadline for All Class Members to Object/New Merchants to Opt-out:
September 5, 2003 
 Fairness Hearing: September 25, 2003 
  

 FOR DETAILED INFORMATION

 AND TO OBTAIN A COPY OF THE COMPLETE NOTICE, VISIT THE WEBSITE AT 
 www.InReVisaCheck-MasterMoneyAntitrustLitigation.com 
 OR CONTACT THE
CLAIMS ADMINISTRATOR 
 The Garden City Group, Inc. 
 P.O. Box 9000-6014 
 Merrick, NY 11566-9000 
 Attn: In Re Visa Check/MasterMoney Antitrust Litigation 
 Toll-free: 1 (888) 641-4437 
 OR CONTACT LEAD COUNSEL FOR THE PLAINTIFFS, 
 Constantine & Partners, 212-350-2799, www.cpny.com 
 EXCEPT AS INSTRUCTED IN THE NOTICE, PLEASE DO NOT CONTACT THE COURT. 

 UNITED STATES DISTRICT COURT 
 EASTERN DISTRICT OF NEW YORK 
  

									
	  
	  		  		  		  	
		  	:	  		  		  	
	 IN RE:
	  	:	  		  		  	
		  	:	  		  		  	
	 VISA CHECK/MASTERMONEY
	  	:	  		  		  	
	 ANTITRUST LITIGATION
	  	:	  		  	MASTER FILE NO.	  	
		  	:	  		  	CV-96-5238	  	
		  	:	  		  		  	
	 This Document Relates To:
	  	:	  		  		  	
		  	:	  		  		  	
	 ALL ACTIONS
	  	:	  		  	(Gleeson, J.) (Mann, M. J.)	  	
	  
	  	:	  		  		  	

 STIPULATION AND ORDER FOR PROVIDING NOTICE OF SETTLEMENT 
 OF CLASS ACTION TO MEMBERS OF THE CERTIFIED CLASS 
 By order dated February 22, 2000 (the “Class Certification Order”), this Court certified a class, pursuant to Fed. R. Civ. P. 23(b)(2) and 23(b)(3), “of all persons and business entities who have
accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa Check and/or MasterMoney debit cards under the challenged tying arrangements during the fullest period permitted by the applicable statute of limitations.
The Class does not include the named Defendants, their directors, officers or members of their families.” Class Certification Order at 44 (footnote omitted). By decision dated October 17, 2001, the United States Court of Appeals for the
Second Circuit affirmed the Class Certification Order, and on June 10, 2002, the United States Supreme Court denied defendant Visa USA Inc.’s and defendant MasterCard International Incorporated’s petition for a writ of certiorari of
the Second Circuit’s decision affirming the Court’s Order certifying this lawsuit as a class action. 
 By Order dated
June 21, 2002, this Court directed that Notice of Pendency of the class action be given to the members of the class (“Consent Order” or “Notice of Pendency Order”). The Notice of Pendency Order approved a Notice Plan that
satisfied the requirements of Rule 23 

 
and due process by providing Notice of Pendency to the members of the class through direct mail of almost 7.7 million notices, publication of summary
notice in a series of national and trade publications and through PR newswire releases, between September 9 and October 14, 2002, and the maintenance of a dedicated website and a toll free hotline since September 9, 2002. Members of
the Class were given until November 14, 2002 to exercise their rights to exclude themselves from the Class. Plaintiffs and the Court appointed administrator provided Notice of Pendency to the class members in compliance with the Notice Plan.

 By Order dated April 1, 2003, the Court denied in their entirety Visa’s and MasterCard’s motions for summary judgment, and
granted in part and denied in part Plaintiffs’ motion for summary judgment. By Order dated April 1, 2003, the Court denied MasterCard’s motion for severance or a separate trial. 
 On April 30, 2003, Plaintiffs entered into separate memoranda of understanding with defendant Visa and defendant MasterCard in which they settled
this lawsuit. Each defendant subsequently signed a separate settlement agreement with the Plaintiffs as of June 4, 2003 (collectively, the “Settlements”). The Court has granted Preliminary Approval of the Settlements. 
 The applicable class period in this case is from October 25, 1992 through the date of the first publication of the Summary Notice of Settlement,
expected to be June 21, 2003 (the “class period”). 
 The Court, having considered the parties’ submissions with respect
to the proper means for providing Notice of Settlement to members of the certified class, hereby makes the following findings, and orders that notice be provided to class members as set forth below. 
  

 2 

 FINDINGS 
 A. In order to provide notice of this action to the members of the certified class, the Court finds that a notice plan consisting of individual notice to absent class members whose contact information has been ascertained in the manner
specified below (see ¶¶ F, 2-3, infra), together with supplemental publication notice in the manner specified below (see ¶¶ 5-6, infra), constitutes the best means practicable of providing notice, and
satisfies the requirements of Fed. R. Civ. P. 23 and due process. 
 B. Defendants MasterCard International Incorporated (“MasterCard”) and Visa
U.S.A. Inc. (“Visa”) are each membership corporations comprised of member financial institutions. Some of those members are “Acquirers” who are licensed by either MasterCard or Visa or both to sign up merchants to accept
MasterCard and Visa payment cards and to handle the processing of payments made with those cards. 
 C. MasterCard and Visa each have thousands of Acquirers.
A subset of Acquirers (along with companies they retain, known in the industry as “Processors”) are responsible for processing the vast majority of MasterCard and Visa transactions on behalf of merchants. As relied upon in developing the
Notice Plan for the provision of Notice of Pendency in the Summer of 2002, according to the February 2002 Nilson Report (at pp. 6-7, attached to the Notice of Pendency Order as Exhibit A) — acknowledged by the parties as a leading
publication covering consumer payment systems relied upon by the payments industry, the accuracy of which is accepted by the parties for this purpose — in 2001: the 80 largest Acquirers and Processors handled more than 99% of all MasterCard and
Visa transaction sales volume on behalf of approximately 3.6 million merchants (operating approximately 5.8 million merchant outlets) in the United States. The 80 largest Acquirers and Processors maintain contact information concerning the
merchants that they have signed up to accept defendants’ credit cards and debit cards for payment. 
  

 3 

 D. Visa and MasterCard also each maintains information concerning merchant outlets at which transactions using their
respective Purchasing or Corporate Cards have been processed. Visa maintains this information on a database known as the Visa Merchant Profile Database (“VMPD”). MasterCard maintains such information on a database referred to as the
“MasterCard virtual data warehouse.” Data on both the Visa VMPD and the MasterCard virtual data warehouse include (where available) merchant outlet addresses, merchant names, “doing business as” names, as well as taxpayer
identification numbers. 
 E. For purposes of providing Notice of Pendency, the parties stipulated, and the Court concluded, that the best way to identify
individual merchant class members was, therefore, through merchant contact information maintained by the 80 largest Acquirers and Processors, supplemented by any non-duplicative merchant information maintained in the Visa VMPD and the MasterCard
virtual data warehouse. That merchant contact information should identify the substantial majority of current class members that can be reached through individual notice. 
 F. In order to provide Notice of Pendency, plaintiffs successfully subpoenaed the 80 largest Acquirers and Processors identified in Exhibit A to the Notice of Pendency Order who actually had data regarding Visa and
MasterCard transactions. During June, July and August 2002, plaintiffs and the Administrator obtained and incorporated into the Class Member List (as defined below) the merchant contact information accessible from the 80 largest Acquirers’ and
Processors’ then-current and existing databases. In sum, during the Summer of 2002, plaintiffs’ counsel collectively made more than 500 telephone calls, wrote over 150 letters, and spent approximately 400 hours to procure Merchant Contact
Lists (as defined in the Notice of 

  

 4 

 
Pendency) from these 80 Acquirers and Processors (some of which produced data through other entities) that totaled 8,564,426 million names of merchants
or other entities that had accepted Visa and MasterCard credit and off-line signature debit transactions dating back to October 1992. The last of the Merchant Contact Lists was not produced until more than 44 days after the initial request, and more
than 28 days beyond the initial Court-imposed deadline (with the vast majority of the Merchant Contact Lists and records being produced more than 37 days after the initial request and more than 21 days after the deadline). Once these Merchant
Contact Lists were procured, the Court-appointed Class Notice Administrator was required to combine the data into a Class Member List and to undertake reasonable efforts to eliminate duplicate entries. These efforts included eliminating the
duplication between the databases separately supplied by Visa and MasterCard and then supplementing the Class Member List with any non-duplicative entries, which ultimately resulted in a Class Member List that included 7,657,888 records. Mailing the
Notice of Pendency to the 7,657,888 records on the Class Member List revealed that approximately 1.17 million of these records were “bad records” that corresponded to an undeliverable address for which no forwarding information could
be reasonably determined. 
 G. With respect to those merchants whose names and addresses appear on the Class Member List (i.e., those whose accurate
contact information was obtained through reasonable efforts from the 80 largest Acquirers and Processors, and from Visa’s VMPD and MasterCard’s virtual data warehouse in 2002 and then supplemented with “New Merchants” in
Visa’s VMPD and MasterCard’s virtual data warehouse as of approximately June 4, 2003, or who registered with the Administrator following the Notice of Pendency), providing individual notice by first class mail is the best notice
practicable under the circumstances. 
  

 5 

 H. Because the certified class is composed of merchants who have accepted for payment MasterCard or Visa credit card and
debit card transactions dating back to October 25, 1992, some class members likely were not identified through the merchant contact information that was obtained from the 80 largest Acquirers or Processors, as supplemented by the Visa VMPD and
the MasterCard virtual data warehouse, in the Summer of 2002. For example, class members who are no longer in business no longer accept MasterCard or Visa credit cards and debit cards and may no longer be included in the databases maintained by the
Acquirers and Processors. In addition, there may be New Merchants that began accepting Visa and MasterCard credit card and debit card transactions after June 21, 2002, the date when the Merchant Contact Lists were first ordered for production
for purposes of the Notice of Pendency, whose names do not appear in the Visa VMPD or the MasterCard virtual data warehouse. It is not reasonably practicable under the circumstances to obtain supplemental merchant contact information regarding New
Merchants from the largest Acquirers and Processors in a timely or cost effective manner. 
 I. Accordingly, supplemental notice by publication also should
be provided to the members of the certified class. 
 J. Plaintiffs should retain and compensate a notice and claims administrator (the
“Administrator”) to maintain the Class Member List that was originally derived from the information produced by the 80 largest Acquirers and Processors, Visa’s VMPD and MasterCard’s virtual data warehouse in the Summer of 2002
(the “Merchant Contact Lists”), as well as to compile merchant information about New Merchants from Visa’s current VMPD and MasterCard’s current virtual data warehouse, mail notices to those merchant contacts, provide for
supplemental notice by publication, maintain lists of any New Merchants who opt-out of the Rule 23(b)(3) class, and handle other aspects of the class notice and claims administration process. 
  

 6 

 CLASS NOTICE PLAN 
 Based on the foregoing, the Court orders that the following plan for identifying and providing notice to members of the certified class complies with Rule 23 and the requirements of due process, and shall be
implemented: 
 1. The Court hereby approves the appointment of The Garden City Group, Inc. to serve as the Administrator. The qualifications
of The Garden City Group to serve as the Administrator were described in Exhibit B to the Notice of Pendency Order, and have been demonstrated by The Garden City Group’s administration of the Notice of Pendency and management of the Class
Member List. 
 2. By June 16, 2003, Visa and MasterCard will provide the Administrator data from the Visa VMPD (at a previously
agreed-upon cost to be paid from the Settlement Funds) and from the MasterCard virtual data warehouse (at a previously agreed-upon cost to be paid from the Settlement Funds), respectively, for merchants who can be identified through reasonable
efforts that were not listed in the Visa VMPD and the MasterCard virtual data warehouse at the time that Visa and MasterCard compiled the Merchant Contact Lists that were provided on July 1, 2002 (“New Merchants”). 
  

	 	(a)	The entry for each such New Merchant will include (where available) merchant outlet names and addresses, “doing business as” names, and taxpayer identification numbers, in
ASCII format, unless some other format is subsequently agreed to by the parties. 

  

	 	(b)	 The Administrator shall use this data solely for the purpose of providing notice to members of the certified class, as set forth in this Order. The Court has
ordered MasterCard and Visa specifically to produce taxpayer identification numbers, because that information is necessary to assist in providing notice to 

  

 7 

	 	 
individual members of the class. The Administrator shall keep such taxpayer identification numbers strictly confidential and shall use the information solely
for the purpose of providing notice hereunder. The Administrator shall implement and maintain reasonable administrative, technical and physical safeguards to protect the security, confidentiality and integrity of such information.

 3. The Administrator previously compiled a database of the Merchant Contact Lists received from the 80 largest Acquirers
and Processors, and of the non-duplicative merchant information from the Visa VMPD and the MasterCard virtual data warehouse that was utilized to provide Notice of Pendency to members of the class during September 2002 (“Class Member
List”). The Class Member List shall be modified by the Administrator as follows, and then utilized to provide direct mail Notice of Settlement to the individuals and entities who appear on the modified Class Member List: 
  

	 	(a)	By June 16, 2003, Visa and MasterCard shall each have provided the Administrator with their respective list of New Merchants. Entries for those New Merchants shall be added to
the Class Member List to the extent that they are not duplicative of records for individuals or entities already listed on the Class Member List, and the Administrator shall provide direct mail Notice of Settlement to the New Merchants;

  

	 	(b)	The Administrator shall also add to the Class Member List, and shall provide direct mail Notice of Settlement to, each individual or entity that previously registered with the
Administrator; 

  

	 	(c)	The Administrator shall remove from the Class Member List, and shall not provide direct mail Notice of Settlement to, the names and addresses of merchants that were determined
during the Notice of Pendency process to not be deliverable addresses; 

  

	 	(d)	The Administrator shall remove from the Class Member List, and shall not provide direct mail Notice of Settlement to, those individuals or entities who filed timely requests for
exclusion and whose names appeared on the Administrator’s final exclusion report dated February 13, 2003 and filed with the Court on February 18, 2003; 

  

 8 

	 	(e)	The Administrator shall remove from the Class Member List, and shall not provide direct mail Notice of Settlement to, those individuals or entities who were located outside of the
continental United States and Alaska and Hawaii at the time that they accepted Visa and/or MasterCard credit cards or debit cards; 

  

	 	(f)	The Administrator also shall undertake reasonable efforts to eliminate duplication in class member entries in the Class Member List. 

 4. The “Notice of Class Action Settlement,” attached hereto as Exhibit 1 (the “Notice of Settlement”), has been approved by the Court
and shall be used to provide notice to merchants on the Class Member List, as modified in paragraph 3 above. By July 5, 2003, the Administrator shall send a copy of the Notice of Settlement by first class mail to each class member on the Class
Member List. Each such mailing will bear the following legend on the envelope: VISA CHECK/MASTERMONEY ANTITRUST LITIGATION: IMPORTANT LEGAL NOTICE TO ALL CLASS MEMBERS, FORWARD TO CORPORATE HEADQUARTERS/LEGAL COUNSEL. 
 5. The Summary Notice of Settlement of Class Action, attached hereto as Exhibit 2 (the “Summary Notice of Settlement”), has been approved by
the Court for use in publication notice. Plaintiffs shall cause the Summary Notice of Settlement to be published, commencing within 3 days after the initial mailing of the Notice of Settlement and concluding by August 4, 2003, in the
publications listed on Exhibit 3. In that same timeframe, plaintiffs shall also cause the Summary Notice of Settlement to be published twice over the PR Newswire (to more than 2,400 media outlets, including newspapers, magazines, national wire
services, television and radio broadcast media, web sites, and Internet portals) and in the plaintiff trade associations’ publications that are scheduled to run between July 1 and August 4, 2003. 
 6. By the date of the first mailing of the Notice of Settlement, the Administrator shall have updated the website established for the case
(www.InReVisaCheck- 

  

 9 

 
MasterMoneyAntitrustLitigation.com), and until such time as all claims have been paid and the Settlement Fund disbursed, plaintiffs shall maintain the
website, which shall contain a copy of the Notice of Settlement, the Summary Notice of Settlement, the Settlement Agreements, the papers submitted to the Court by Plaintiffs in support of preliminary approval of the Settlement, the 4/1/03 Order of
the Court denying defendants’ motions for summary judgment and granting in part and denying in part plaintiffs’ motions for summary judgment, the November 15, 2002 Status Report Concerning Notice to the Members of the Certified Class,
the June 21, 2002 Notice of Pendency Order (and attachments, including the Notice of Pendency and Summary Notice), the 10/17/01 Circuit Court Order affirming the District Court Order certifying the class, the 2/22/00 District Court Order
certifying the Class, the Second Amended Consolidated Class Action Complaint, and other documents or materials that Plaintiffs’ Lead Counsel deem appropriate to post on the website for purposes of informing and communicating with Members of the
Class. In the event that Visa or MasterCard objects to the posting of any particular documents or materials on the Website on the grounds that the posting of any particular documents or materials will injure Visa or MasterCard, such objection shall
be made in writing to Lead Counsel. Lead Counsel shall use best reasonable efforts to remove the particular documents or materials from the Website as soon as practicable while the objection is being resolved. In the event that Lead Counsel
disagrees with the objection, the objecting party shall move the Court for an order enjoining Lead Counsel from posting the particular documents or materials within 3 calendar days after Lead Counsel has disagreed with the objection. The Website
shall be shut down within 90 days after all claims have been paid under the plan of allocation and distribution. 
  

 10 

 7. As provided in the Notice of Settlement, class members who are New Merchants shall have until
September 5, 2003 (i.e., 30 calendar days after the last publication notice date and approximately 60 days after the first notice mailing date, whichever is later), to opt-out of the Rule 23(b)(3) class. 
 8. As provided in the Notice of Settlement, class members – including New Merchants who do not exclude themselves from the class – shall have
until September 5, 2003 (i.e., approximately 30 calendar days after the last publication notice date and approximately 60 days after the first notice mailing date, whichever is later) to object to the settlements and to give notice of
their intention to appear at the September 25, 2003 fairness hearing. 
 9. With respect to receiving and processing requests for
exclusion and objections, and handling other aspects of notice administration, the Administrator shall: 
  

	 	(a)	Collect mail daily from a United States Post Office Box specifically designated for requests for exclusion, objections and other case-related correspondence.

  

	 	(b)	Sort mail into requests for exclusion, objections, forms returned undeliverable, and other general correspondence. 

  

	 	(c)	If a Notice of Settlement is returned undeliverable, the Administrator shall send it to the forwarding address if one is provided. 

  

	 	(d)	With respect to returned notices for which no forwarding address has been provided, the Administrator shall undertake reasonable efforts to obtain updated contact information
concerning the merchant. If such information is available, the Administrator shall enter it in the merchant database. The Administrator shall then re-send the notice to the updated address. 

  

	 	(e)	Respond to all general correspondence. 

  

	 	(f)	Maintain the Class Member List described above and modify it as necessary based on correspondence from class members. 

  

	 	(g)	Send correspondence to class members, opt-outs or objectors as necessary. 

  

 11 

	 	(h)	Create such reports as become necessary. 

  

	 	(i)	The Administrator and its employees and agents shall execute the confidentiality agreement required in connection with the Notice of Pendency, and shall maintain the confidentiality
of all Merchant Contact Lists and databases incorporating any portion of those lists, including the Class Member List, at all times, in accordance with the terms of the executed confidentiality agreements. Notwithstanding the foregoing, the
Administrator shall provide Lead Counsel with access to the data contained on the Class Member List for purposes of developing and administering the plan of allocation and distribution, and in assisting in the administration of the Notice of
Settlement and in the administration of the Settlement Fund, to the extent permitted under the applicable confidentiality agreements and Court orders regarding the confidential treatment of the data. 

 10. On September 18, 2003 (i.e., 13 calendar days after the deadline for New Merchants to serve requests for exclusion and for all objections
to the settlements to have been filed), plaintiffs and the Administrator shall serve on counsel for the parties, and file with the Court, a report that describes the activities undertaken to provide Notice of Class Action Settlement to the class,
including the dates on which mailings of notice took place and the dates on which notice was published. The report also shall identify each class member that has elected to opt-out of the Rule 23(b)(3) class, and certify that notice has been
provided in accordance with this Order. The Administrator shall supplement this second report promptly as necessary, including to reflect additional New Merchants who opted out of the Rule 23(b)(3) class by the expiration of the opt-out period, but
whose names were not reflected in the Administrator’s September 18, 2003 report. 
 11. Nothing herein shall be deemed to preclude
the Court from modifying this Order, or any party from seeking a modification of it, for good cause at a later date. 
  

 12 

											
	CONSTANTINE & PARTNERS	 		 	HAGENS & BERMAN LLP	 	
						
	By:	 	 /s/ Mitchell C. Shapiro
	 		 	By:	 	 /s/ George Sampson
	 	
		 	Mitchell C. Shapiro (MS-1019)	 		 		 	George W. Sampson (GS-8973)	 	
		 	Robert L. Begleiter (RB-7052)	 		 	1301 Fifth Avenue Suite 2929	 	
		 	Matthew L. Cantor (MC-8183)	 		 	Seattle, Washington 98101	 	
		 	Lloyd Constantine (LC-8464)	 		 	(206) 623-7292	 	
		 	Stacey Anne Mahoney (SM-5425)	 		 	Co-Lead Counsel for Plaintiffs	 	
		 	Michelle Peters (MP-7804)	 		 	Dated: June 5, 2003	 	
		 	Amy Roth (AR-4534)	 		 		 	
		 	Gordon Schnell (GS-2567)	 		 	HELLER EHRMAN WHITE & McAULIFFE LLP	 	
		 	Jeffrey I. Shinder (JS-5719)	 		 		 	
		 	Michael Spyropoulos (MS-9873)	 		 		 		 	
	477 Madison Avenue, Eleventh Floor	 		 	By:	 	 [ILLEGIBLE]
	 	
	New York, New York 10022	 		 		 	M. Laurence Popofsky (LP-8822)	 	
	(212) 350-2700	 		 		 	Stephen V. Bomse (SB-6594)	 	
	Lead Counsel for Plaintiffs	 		 		 	Brian P. Brosnahan (BB-8908)	 	
	Dated: June 5, 2003	 		 		 	David M. Goldstein (DG-1841)	 	
		 		 		 	Lawrence J. Zweifach (LZ-8641)	 	
	SIMPSON THACHER & BARTLETT	 		 	333 Bush Street	 	
		 		 	San Francisco, CA 94104-2878	 	
		 		 		 	(415) 772-6000	 	
	By:	 	 /s/ Joseph Tringali
	 		 	Attorneys for Defendant Visa U.S.A. Inc.	 	
		 	Kevin Arquit (KA-21301)	 		 	Dated: June 5, 2003	 	
		 	 Aimee H. Goldstein (AG-7539)
	 		 		 		 	
		 	 Joseph Tringali (JT-9575)
	 		 		 		 	
	 425 Lexington Avenue
	 		 		 		 	
	 New York, New York
	 		 		 		 	
	 Attorneys for Defendant MasterCard
	 		 		 		 	
	 International Incorporated
	 		 		 		 	
	 Dated: June 5, 2003
	 		 		 		 	
				
		 		 	So Ordered:	 	
				
	 Dated: June     , 2003
	 		 	  
	 	
		 		 		 	Hon. John Gleeson, United States District Judge	 	

  

 13 

 Exhibit 1 
 In re Visa Check/MasterMoney Antitrust Litigation: 
 IMPORTANT LEGAL NOTICE TO ALL CLASS
MEMBERS 
 FORWARD TO CORPORATE HEADQUARTERS/LEGAL COUNSEL 
 UNITED STATES DISTRICT COURT 
 EASTERN DISTRICT OF NEW YORK 
  

									
	  
	  		  		  		  	
		  	:	  		  		  	
	 IN RE:
	  	:	  		  		  	
		  	:	  		  		  	
	 VISA CHECK/MASTERMONEY
	  	:	  		  		  	
	 ANTITRUST LITIGATION
	  	:	  		  	MASTER FILE NO.	  	
		  	:	  		  	CV-96-5238	  	
		  	:	  		  		  	
	 This Document Relates To:
	  	:	  		  		  	
		  	:	  		  		  	
	 ALL ACTIONS
	  	:	  		  	(Gleeson, J.) (Mann, M. J.)	  	
	  
	  	:	  		  		  	

 NOTICE OF SETTLEMENT OF CLASS ACTION 
  

	TO:	ALL PERSONS AND BUSINESS ENTITIES IN THE UNITED STATES WHO, AT ANY TIME FROM OCTOBER 25, 1992 TO JUNE 21, 2003, HAVE ACCEPTED VISA AND/OR MASTERCARD CREDIT CARDS FOR PAYMENT AND
HAVE THEREFORE BEEN REQUIRED TO ACCEPT VISA AND/OR MASTERCARD-BRANDED DEBIT CARDS (ALSO KNOWN AS VISA CHECK, MASTERMONEY OR MASTERDEBIT CARDS) FOR PAYMENT (“THE CLASS”).

 THIS NOTICE MAY AFFECT YOUR RIGHTS 
 PLEASE READ IT CAREFULLY 
 1. This Notice of Settlement of Class Action
(“Settlement Notice”) is directed to you because your rights may be affected by the settlement of the class action pending in the United States District Court for the Eastern District of New York styled In re Visa Check/MasterMoney
Antitrust Litigation, No. CV-96-5238 (the “Action”). 

 HISTORY OF THE ACTION 
 2. The Action began in October 1996 with the filing of lawsuits by certain retailers and retail trade associations (collectively, the “Named
Plaintiffs”) against Visa U.S.A. Inc. (“Visa”) and MasterCard International Incorporated (“MasterCard”) (collectively, “the Defendants”). In December 1996, those lawsuits were consolidated (the “Consolidated
Action”), and the Court appointed the New York, New York based law firm of Constantine & Partners to serve as Lead Counsel, and the Seattle, Washington based law firm of Hagens Berman LLP to serve as Co-Lead Counsel, for the putative
class of plaintiffs. (You may view a copy of Pretrial Order Number 1 and additional documents, materials and information about the case by visiting the case website at www.InReVisaCheck-MasterMonevAntitrustLitigation.com (the
“Website”).) The Named Plaintiffs in the Action who represent the Class certified by the Court are: Wal-Mart Stores, Inc.; The Limited, Inc.; Sears Roebuck and Co.; Circuit City Stores, Inc.; Safeway, Inc.; Auto-Lab of Farmington Hills;
Bernie’s Army Navy Store; Burlington Coat Factory Warehouse Corporation; The Coffee Stop, Inc., d/b/a Torrero Coffee & Tea Company; Computer Supplies Unlimited; Denture Specialists, Inc.; Payless ShoeSource, Inc.; Shoes Etc., Inc.,
d/b/a Arnold’s Shoes; Scrub Shop, Inc.; Sportstop, Inc.; UCC Kwik Doc, Inc., f/k/a UCC Express, Inc.; and Geneva White, D.M.D., P.A. The first (or lead) case was filed by a group of merchants represented by Constantine & Partners that
included Wal-Mart, The Limited, Sears, Circuit City and Safeway; the lead case and the Consolidated Action have sometimes been referred to as the “Wal-Mart case” or the “Wal-Mart action.” Three merchant trade associations,
National Retail Federation, International Mass Retail Association, and Food Marketing Institute, are also Named Plaintiffs in the lead case (and the Consolidated Action). 
 3. The allegations against Visa and MasterCard are set forth in the Second Amended Consolidated Class Action Complaint filed with the Court on May 26, 1999, a copy of which 

  

 2 

 
may be viewed on the Website. In the Action, plaintiffs claimed, among other things, that Visa and MasterCard, individually, and in conspiracy with each
other and with their member banks, have violated the federal antitrust laws by forcing merchants who accept Visa and/or MasterCard-branded credit cards for payment also to accept Visa and/or MasterCard-branded debit cards for payment, and by
conspiring and attempting to monopolize a market for general purpose point of sale debit cards. Plaintiffs claimed that defendants’ actions have caused merchants to pay excessive fees on Visa and MasterCard signature debit and credit
transactions and on on-line PIN debit transactions, and have injured competition, merchants and consumers. Plaintiffs sought: (1) an injunction prohibiting the Defendants from engaging in the alleged violations of the federal antitrust laws
(including the elimination of the alleged forced acceptance of the Visa and/or MasterCard-branded debit card transactions for payment by merchants who accept Visa and/or MasterCard-branded credit cards for payment), and (2) the recovery of
damages for the alleged excess portion of fees paid, as well as costs and attorneys’ fees. 
 4. Defendants denied Plaintiffs’
allegations, and have denied that Defendants in any way violated the antitrust laws. Defendants asserted defenses to Plaintiffs’ claims, including that Defendants’ challenged actions were lawful, justified, the result of independent
business competition, and that those actions have benefited competition, merchants and consumers. Defendants also asserted that Plaintiffs have not suffered economic harm from the challenged conduct but, in fact, have benefited. (Copies of
defendants’ Answers may be viewed on the Website.) Counsel for MasterCard are located in the New York and Washington, D.C. offices of Clifford Chance US and the New York office of Simpson Thacher and Bartlett. Counsel for Visa are located in
the San Francisco and New York offices of Heller Ehrman White & McAuliffe LLP and the New York office of Arnold & Porter. 
  

 3 

 5. The Named Plaintiffs and defendants engaged in pre-trial discovery that lasted for over three
and-a-half years. Pre-trial discovery consisted of the production and review of more than five million pages of documents and approximately 400 depositions of party and non-party representatives that took over 500 days. Fact discovery concluded on
March 15, 2000. 
 6. The Named Plaintiffs submitted reports from five experts in total, including the reports of their liability and
damages expert, Dr. Franklin M. Fisher of MIT, who previously served as the expert for IBM in its multi-decade defense of an antitrust prosecution by the United States government and as the expert for the government in its antitrust
prosecution of Microsoft. Defendants submitted reports from fourteen expert witnesses. Expert discovery was completed on May 26, 2000, except for the further depositions of experts that filed supplemental reports in October 2002, which were
completed by October 31, 2002. 
 7. In the summer of 2000, defendants and the Named Plaintiffs each filed motions asking the Court to
enter summary judgment in their respective favors without a trial, and opposed each others’ motions. The Court elected not to rule on the summary judgment motions until after class certification proceedings had been completed. The Court
permitted the parties to supplement their expert witness reports and summary judgment filings in the Fall of 2002 (thus completing four rounds of briefings and four rounds of expert reports), and conducted an extensive oral argument hearing on the
summary judgment motions on January 10, 2003. On April 1, 2003, 27 days before the scheduled start of the trial, the Court denied defendants’ motions in their entirety, and granted plaintiffs’ summary judgment motion as to
certain elements of plaintiffs’ claims for relief. The Court denied plaintiffs’ motion for summary judgment as to certain of defendants’ defenses. (A copy of the Court’s 4/1/03 Summary Judgment Order may be viewed on the
Website.) As described more fully below in paragraphs 12-14, on April 30, 

  

 4 

 
2003 plaintiffs entered into separate memoranda of understanding with each defendant that set forth the basic terms of the settlement of this lawsuit, and on
June 4, 2003 plaintiffs entered into separate settlement agreements with Visa and MasterCard, which collectively are referred to as the “Settlements” or the “Settlement Agreements.” 
 THE CLASS CERTIFICATION RULING AND NOTICE OF PENDENCY TO THE CLASS 
 8. On February 22, 2000, the Court entered an order certifying the Consolidated Action as a class action on behalf of “all persons and business
entities who have accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa Check and/or MasterMoney debit cards” at any time from October 25, 1992 to the present. The Court further ordered that the Class
does not include the named Defendants, their directors, officers or members of their families. Defendants appealed the Court’s Class Certification Order, which was affirmed by the United States Court of Appeals for the Second Circuit in late
2001; the United States Supreme Court rejected defendants’ petition to review the class certification order in 2002. (Copies of the orders of the District Court (2/22/00), the Circuit Court (10/17/01), and the Supreme Court (6/10/02) all
may be viewed on the Website.) 
 9. From September 9 through October 14, 2002, members of the Class were given notice of the
pendency of the class action in an extensive notice campaign, consisting of web postings, newswire press releases, nationwide publication of summary notice and the direct first class mailing of a document entitled Notice of Pendency to over
7.7 million addresses of class members that were provided to the Administrator by Visa, MasterCard and the 80 largest acquirers and processors of Visa and MasterCard transactions. The December 15, 2002 Status Report Concerning Notice to
the Class, which attaches copies of the Notice of Pendency and the Summary Notice, may be viewed on the Website. The Court ruled that the notice plan, which 

  

 5 

 
provided class members the opportunity to exclude themselves from the Class if they filed such requests by November 14, 2002, comported with the
requirements of due process and Rule 23 of the Federal Rules of Civil Procedure. (The 6/21/02 Consent Order/Notice of Pendency Order may be viewed on the Website.) 
 10. The Notice of Pendency provided in pertinent part that “by remaining a Class member, you will be bound by the terms of any judgment in the Action, whether favorable or unfavorable to Plaintiffs. You also
agree that any claims against Defendants arising out of the Defendants’ conduct at issue in the Action will be determined in the Action and cannot be pursued in any other action. If there is a recovery, you may be entitled to share in the
proceeds, less such Plaintiffs’ costs, expenses, and attorneys’ fees as the Court may allow out of any such recovery...” 
 11. This Settlement Notice has been sent to you in the belief that you may be a member of the Class whose rights may be affected by the Settlements. It should not be understood as an expression of any opinion by the Court concerning the
merits of the Settlements. This Settlement Notice is intended merely to advise you of the Settlements and of your rights with respect to them, including the right to file an objection by September 5, 2003 and to appear at a hearing to determine
the fairness of the Settlements scheduled for September 25, 2003. 
 THE SETTLEMENTS 
 12. The Consolidated Action was scheduled to be tried before a jury between April 28, 2003 and August 1, 2003. After an exhaustive mediation,
which continued night and day for a full week, throughout the weekend prior to the start of trial, on Monday, April 28, 2003, prior to final jury selection, plaintiffs and MasterCard had negotiated the basic terms of a settlement, and the Court
announced that the case against MasterCard had settled. On April 28, 2003, the 

  

 6 

 
Court supervised the selection of the jury that would hear the case between plaintiffs and defendant Visa, and the Court then postponed the start of that
trial until April 30, 2003. On the morning of April 30, 2003, the Court announced a final postponement of the commencement of the trial for two additional days, until May 2, 2003, to provide the parties additional time to complete a
settlement. A Memorandum of Understanding, executed by defendant MasterCard and the plaintiffs’ Lead Counsel and Co-lead Counsel, outlining the parameters of the MasterCard Settlement, was signed on April 30, 2003. That night, defendant
Visa and the plaintiffs’ Lead-Counsel and Co-lead Counsel signed a separate Memorandum of Understanding, also dated April 30, 2003, which incorporated the equitable terms of the MasterCard MOU, plus one significant additional term of
relief, and in view of Visa’s larger transaction volume, twice the monetary recovery. 
 13. Lead-Counsel and Co-lead Counsel for the
plaintiffs then engaged in separate negotiations with Visa and MasterCard, which resulted in the execution of two separate settlement agreements on June 4, 2003. The Visa Settlement Agreement and the MasterCard Settlement Agreement
(collectively, the “Settlement Agreements”) may be viewed on the Website. 
 14. The Settlement Agreements specify the following
relief for the members of the certified class: 
 A. The creation of two settlement funds, totaling $3.05 billion, from which class member
claims for damages can be satisfied (after the payment of Class Counsel’s fees, costs and expenses, including the costs of notice and administration of the settlement funds, to be awarded by the Court). MasterCard will deposit $1.025 billion
over a ten-year period in the MasterCard Settlement Fund and Visa will deposit $2.025 billion in the Visa Settlement Fund over the same ten-year period. 
 B. The unbundling of Visa and MasterCard debit card services to merchants from Visa and MasterCard credit card services to merchants, effective January 1, 2004. Because of this unbundling, merchants will have the
right to decide whether or 

  

 7 

 
not to accept the Visa and/or MasterCard debit products in a competitive environment, and not be required to accept the Visa and MasterCard signature debit
transactions as a condition of accepting the Visa and MasterCard credit cards. Plaintiffs believe that, because of this competition, and merchants’ right to decline Visa and MasterCard signature debit acceptance, Visa and MasterCard will
maintain their lower interim rates or may even lower their rates further after January 1, 2004 to merchants for acceptance of their debit products, and that this could result in savings to class members that have not been determined but which
could be worth tens of billions of dollars or more. Visa and MasterCard financial institutions – i.e., the banks that receive the interchange fees at issue for the Visa and MasterCard debit transactions performed by their cardholders
– have already begun to report an anticipated reduction in earnings/revenues that will result from the Settlements. 
 C. The creation
and placement of clear, conspicuous and uniform visual designations on Visa and MasterCard debit cards (or debit devices). In this way, merchants will be able to visually identify Visa and MasterCard debit cards/devices at the point of sale. Visa
and MasterCard are also required to identify their debit cards/devices so merchants can identify them with electronic equipment. 
 D.
Merchants shall also have the right to encourage or steer customers from Visa and MasterCard debit transactions to other forms of payment. 
 E. The barring of Visa for two years from entering into agreements with financial institutions that prohibit financial institutions from issuing debit cards from competing PIN debit networks. 
 F. The establishment of unique interim interchange rates for Visa and MasterCard debit transactions for the period from August 1, 2003 through
December 31, 2003. These rates will be significantly lower than the rates currently being charged for Visa and MasterCard debit transactions (for MasterCard at least 1/3 lower aggregate effective rate, for Visa at least 48 basis points lower
for nonsupermarkets and at least 14 cents lower per transaction for supermarkets). Plaintiffs believe that this could result in savings to class members that have not been determined but which could be worth more than $1 billion. 
 G. The Court’s continuing jurisdiction over Visa, MasterCard and this case to ensure compliance with the Settlement Agreements. 
 DISTRIBUTION OF SETTLEMENT FUNDS 
 15. If the
Settlement Agreements are approved by the Court and become effective, the Settlement Funds (less taxes on the escrow fund interest, Court approved attorneys’ fees, costs 

  

 8 

 
and other expenses, including, without limitation, costs of Notice and Claims Administration), will be distributed to members of the Class pursuant to a
Court approved plan of allocation and distribution. By August 18, 2003, Class Counsel will file a detailed plan of allocation, which may include a series of payments to be made over ten years or may include two or more sets of payments to be
made over a shorter period of time to be determined by the Court. While the plan of allocation and distribution has not yet been finalized, plaintiffs will ask the Court to approve a distribution pro rata (based on a calculation of the
participating Class members’ approximate amount of overcharges paid, as claimed by plaintiffs) to participating Class members. It has not yet determined whether participating Class members will need to provide documentation. Beginning on
August 18, 2003, you may visit the Website for details concerning the plan for allocation and distribution. 
 16. In the event the
Settlement Agreements are approved, a subsequent notice will advise you of how to participate in the Settlement Funds. (It is your responsibility to advise the Administrator of any change of address subsequent to your receiving this notice.)
In order to establish a right to share in the Settlement Funds, Class members may be required to provide information concerning their gross United States domestic sales, their sales made with Visa and MasterCard debit cards and/or their sales made
with Visa and MasterCard credit cards and debit cards, dating back to October 25, 1992 (and/or such other information necessary to properly determine and distribute class members’ shares). You should save any and all of your records which
contain such information. Whether or not such records will be required under the plaintiffs’ proposed plan of allocation should be determined by the time of the filing of the plan of allocation and distribution on August 18, 2003, and
should be disclosed at that time on the Website. 
  

 9 

 17. Also on August 18, 2003, Class Counsel will file a petition for payment of attorneys’ fees,
costs and expenses, and may, from time to time thereafter, petition the Court for reimbursement of fees, costs and expenses from the Settlement Funds, including fees incurred by Class Counsel and the Administrator while providing Notice to the class
and while administering the Settlement Funds (including the plan of allocation and distribution). Plaintiffs will NOT be applying to the Court for an incentive award for the Named Plaintiffs, despite the fact that these companies dedicated thousands
of hours of the time of their executive and in-house counsel time prosecuting this case and subjecting their executives to depositions. Plaintiffs will petition for reimbursement of out of pocket costs and expenses incurred and paid by the Named
Plaintiffs in connection with their prosecution of this action on behalf of the Class. Beginning on August 18, 2003, you may visit the Website for details concerning Class Counsel’s petition for payment of attorneys’ fees, costs and
expenses. 
 RELEASE PROVISIONS 
 18. If the Settlement Agreements are approved and become effective, you and all Class Members will be bound by the terms of the Settlement Agreements, and upon their becoming effective, you will be releasing Visa, MasterCard and other
entities from certain claims as set forth below, including claims relating in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the Second Amended Consolidated Class Action Complaint or any of the complaints
consolidated therein, including, without limitation, claims which have been asserted or could have been asserted in this litigation, as follows: 
 Visa, MasterCard and their past, present or future officers, directors, stockholders, member financial institutions, agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners,
heirs, executors, administrators, purchasers, predecessors, successors and assigns (the “Released Parties”) shall be released and forever discharged from all manner of claims, demands, actions, suits, causes of action against the Released
Parties, whether class, individual, or otherwise in nature, damages whenever incurred, liabilities of 

  

 10 

 
any nature whatsoever, including costs, expenses, penalties and attorneys’ fees, known or unknown, suspected or unsuspected, in law or equity, that any
Plaintiff or Class Members who have not timely excluded themselves from the Class Action (including any of their past, present or future officers, directors, stockholders, agents, employees, legal representatives, trustees, parents, associates,
affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns), whether or not they object to the Settlement and whether or not they make a claim upon or participate in the
Settlement Fund, whether directly, representatively, derivatively or in any other capacity, ever had, now has or hereafter can, shall or may have, relating in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the
Second Amended Consolidated Class Action Complaint or any of the complaints consolidated therein, including, without limitation, claims which have been asserted or could have been asserted in this litigation which arise under or relate to any
federal or state antitrust, unfair competition, unfair practices, or other law or regulation, or common law, including, without limitation, the Sherman Act, 15 U.S.C § 1 et seq. (the “Released Claims”). Each Class Member hereby
covenants and agrees that it shall not, hereafter, seek to establish liability against any of the Released Parties based, in whole or in part, upon any of the Released Claims. 
 19. In the event that any provision of this Settlement Agreement is asserted as a defense or is otherwise raised as an objection to any claim or cause of
action asserted in any case involving Visa or MasterCard, the District Court for the Eastern District of New York shall have exclusive jurisdiction to determine any issues relating to the assertion of that defense or objection, and any such case
shall be stayed until the United States District Court for the Eastern District of New York has entered an order or judgment determining such issues. 
 ELECTION BY CLASS MEMBERS TO PARTICIPATE IN, OR TO OBJECT TO, THE CLASS ACTION SETTLEMENTS AND TO APPEAR AT THE SETTLEMENT FAIRNESS HEARING 
 20. You are a member of the Class if you are not one of the Defendants or their directors, officers or members of their families, and if you or your business has accepted Visa and/or MasterCard credit cards for
payment at any time from October 25, 1992 to June 21, 2003, and if you did not timely file a request for exclusion. If you began accepting Visa or MasterCard branded credit cards and/or debit cards after June 21, 2002, please see
paragraphs 26-32 below, which allow you to opt out of this lawsuit. If you are a Class member, you will be bound by the final Settlements of this litigation. 
  

 11 

 21. If you are a member of the Class and you want to participate in the Settlements, you are not required
to do anything at this time, although it is advisable for members of the Class who did not receive direct notice addressed to them by first class mail to register with the Administrator by writing to the Administrator at Garden City Group, Inc.,
P.O. Box 9000-6014, Merrick, New York, 11566-9000, in an envelope clearly marked “In Re Visa Check/MasterMoney Antitrust Litigation: Absent Class Member Inquiry.” 
 22. Pursuant to an Order of the Court, a hearing will be held at 9:30 a.m. on September 25, 2003 at the Federal Courthouse, 225 Cadman Plaza East,
Brooklyn, New York, for the purpose of determining whether the Settlements with Visa and MasterCard are fair, reasonable and adequate. The time and date of the hearing may be continued from time to time without further notice. 
 23. Members of the Class that do not wish to object to the Settlements need not appear at the hearing nor do anything else at this time. Any member of
the Class that has not timely requested exclusion from the Class may submit a written objection to the Settlements and/or appear at the hearing in person or by duly authorized attorneys and show cause why the Settlements should not be approved as
fair, reasonable and adequate. However, no Class member shall be heard in opposition to the Settlements, and no paper or brief submitted by any class member shall be received or considered by the Court unless, on or before September 5, 2003,
the Class member files a notice of intention to appear and a statement of the position to be asserted and the grounds therefor, together with copies of any supporting papers or briefs with the Clerk, United States District Court for the Eastern
District of New York, Federal Courthouse, 

  

 12 

 
225 Cadman Plaza East, Brooklyn, New York. Copies of any such objection, supporting papers or brief shall also be sent by first class mail, postage prepaid,
postmarked no later than September 5, 2003, in separate envelopes clearly marked as “Objection by Absent Class Member: In Re Visa Check/MasterMoney Antitrust Litigation,” addressed to the following: Constantine & Partners,
PC, 477 Madison Avenue, New York, New York 10022, The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, and Heller Ehrman White &
McAuliffe, LLP, 333 Bush Street, San Francisco, CA, 94104. Your objection should provide the name, address and telephone number of the person or business entity that wishes to raise the objection, contain your printed name and title (if on behalf of
a business entity), verify that the objection is being raised by a Class Member, and be signed by you. In order for your objections to be effective and to be considered by the Court, they must be postmarked on or before September 5, 2003.

 24. In determining whether you want to object to the Settlements by September 5, 2003 and appear at the fairness hearing on
September 25, 2003, you may want to consult your own attorney. As noted above, you may enter an appearance through your own counsel at your own expense. As a member of the Class, you will not be personally responsible for any attorneys’
fees or costs of litigation unless you retain your own counsel, in which case you may be responsible for his or her fees. 
 25. Except as
provided herein, no persons shall be entitled to contest the terms and conditions of the Settlements, and persons who fail to object as provided herein shall be deemed to have waived and shall be foreclosed forever from raising any such objections.

  

 13 

 ELECTION BY CLASS MEMBERS – WHO BEGAN TO ACCEPT VISA AND/OR MASTERCARD CREDIT CARDS AND/OR DEBIT CARDS FOR
PAYMENT AFTER JUNE 21, 2002 (“NEW MERCHANTS”) – TO PARTICIPATE IN, OR TO BE EXCLUDED FROM, THE CLASS 
 26. If you or
your company is a Class member who became a Class member after June 21, 2002 (i.e., you or your company first began accepting Visa and/or MasterCard credit cards or debit cards for payment after June 21, 2002) (“New
Merchants”), you have a choice of whether to remain a member of the Class. Your choice will have consequences that you should understand before making your decision. In determining whether you want to remain in or be excluded from the Class,
you may want to consult your own attorney. Please note that the right to be excluded from the Class only applies to New Merchants. Class Members who were members of the Class as of June 21, 2002 were provided opt-out rights through a Notice of
Pendency (either by first class mail or by publication of Summary Notice) between September 9 and October 14, 2002, and had the right to be excluded from the Class by making a written request for exclusion by November 14, 2002.

 27. If you are a New Merchant and want to remain a member of the Class, you are not required to do anything at this time. By remaining a
Class member, you will be bound by the Settlements, and by the release of claims described in paragraph 18 above. You may be entitled to share in the Settlement Fund proceeds, less such costs, expenses, and attorneys’ fees (including the costs
of notice and claims administration) as the Court may allow out of any such recovery. 
 28. If you remain a member of the Class: The
Class Representatives, Lead Counsel and Co-Lead Counsel will represent your interests in resolving the Action against Defendants. You will not be personally responsible for Plaintiffs’ attorneys’ fees or costs, except to the extent that
the Court may award such fees, costs and expenses to the attorneys which would be paid out 

  

 14 

 
of the Settlement Funds or other recovery in this Action, if any. If you desire, you also may appear by your own attorney at your own expense. You also may
seek to intervene. You will have the right to participate in the Settlements (or in the event the Settlement Agreements do not become effective, any recovery that may be obtained from Visa or MasterCard on behalf of the Class). If the Settlements do
not become effective, and the Named Plaintiffs proceed with the Consolidated Action on behalf of the Class, and no recovery is ultimately obtained, you may be bound by that result. As detailed above, you may be required as a condition of
participating in any recovery to present evidence concerning your acceptance of MasterCard and Visa credit and debit transactions. You should, therefore, preserve all records concerning these transactions. Your decision to remain a member of the
Class or to opt-out of the Class will be binding, regardless of whether the Settlement Agreements are approved or disapproved by the Court. 
 29. You should give notice of any corrections or changes in your address, in writing, in an envelope addressed to the Administrator appointed by the Court, at The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000,
Attn: In re Visa Check/MasterMoney Antitrust Litigation, that bears the notation “Address Change; In Re: Visa Check/MasterMoney Antitrust Litigation.” 
 30. If you are a New Merchant and do not want to remain a member of the Class, you may choose to be excluded from the Class. By electing to be excluded from the Class: 
 A. You will not share in the Settlement Funds (or in the event the Settlements are not approved by the Court, in any monetary recovery that Visa or
MasterCard might pay as a result of a judgment or settlement in Plaintiffs’ favor). 
 B. You will have the right, at your own expense,
to pursue any individual claim that you may have against Visa and/or MasterCard by filing your own lawsuit or by seeking to intervene in the Action. 
 31. If you want to be excluded from the Class, you must make a written request for exclusion bearing the title “Request for Exclusion from Class: In Re Visa Check/MasterMoney 

  

 15 

 
Antitrust Litigation,” and send it by first class mail, postage pre-paid, to The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York,
11566-9000, Attn: In re Visa Check/MasterMoney Antitrust Litigation. Your request should provide the name, address and telephone number of the person(s) or business entity(/ies) that wish(es) to be excluded from the class, contain your printed name
and title (if on behalf of a business entity), and be signed by you. In order for your request to be effective, it must be postmarked on or before September 5, 2003. 
 32. New Merchants who choose not to exclude themselves from the Class may object to the Settlements and participate in the fairness hearing, as detailed
in paragraphs 20-25, above. 
 ADDITIONAL INFORMATION 
 33. All references in this Settlement Notice to pleadings, allegations, claims, defenses and Court orders are summaries. Complete copies of the
pleadings, orders and other publicly filed documents in the Action may be examined and copied at any time during regular office hours at the office of the Clerk of the Court, United States District Court for the Eastern District of New York, 225
Cadman Plaza East, Brooklyn, New York, under the file No. CV-96-5238. You also may access the documents referenced in this notice, along with additional information about the case, the settlements and the settlement approval process by visiting the
Website at www.InReVisaCheck-MasterMoneyAntitrustLitigation.com. 
 34. Any questions you have concerning the matters raised in this
Notice, or any corrections or changes of name or address, should not be directed to the Court but should be directed in writing to The Garden City Group, Inc., P.O. Box 9000-6014, Merrick, New York, 11566-9000, Attn: In re Visa Check/MasterMoney
Antitrust Litigation. You may also receive additional information by calling 1 (888) 641-4437. 
  

 16 

 35. Lead Counsel for Plaintiffs is Constantine & Partners, 477 Madison Avenue, New York, New
York 10022; Co-lead Counsel for Plaintiffs is Hagens Berman LLP, 1301 Fifth Avenue, Seattle, Washington, 98101. Any requests for additional information about the case can be submitted to lead counsel or co-lead counsel in writing at either address
listed above, in an envelope that bears the legend “Inquiry by Absent Class Member: In Re Visa Check/MasterMoney Antitrust Litigation”, or by calling 212-350-2799. You may, of course, seek the advice and guidance of your own attorney if
you desire. 
 EXCEPT AS SET FORTH IN THIS NOTICE, 
 PLEASE DO NOT CONTACT THE COURT 
  

					
	 Dated: June     , 2003
	  	  
	  	
		  	Hon. John Gleeson	  	
		  	United States District Judge	  	

  

 17 

 Exhibit 2  
 Legal Notice of Class Action Settlement 
 IF YOU OR YOUR COMPANY HAVE ACCEPTED MASTERCARD

 AND/OR VISA CARDS FOR PAYMENT AT ANY TIME FROM 
 OCTOBER 25, 1992 THROUGH JUNE 21, 2003, YOU MAY BE ELIGIBLE 
 TO RECEIVE BENEFITS. 

Your rights may be affected. Please read this Court-ordered Class Action Notice. 
 If you or your company have accepted MasterCard or Visa-branded credit cards or debit cards as payment for goods or services at any time from October 25, 1992 to
June 21, 2003, you or your company may be affected by the settlement of a class action lawsuit pending in the United States District Court for the Eastern District of New York styled In re Visa Check/MasterMoney Antitrust Litigation (a/k/a
Wal-Mart Stores, Inc. et al. v. Visa U.S.A. Inc. and MasterCard International, Inc.), No. CV-96-5238. Defendants Visa and MasterCard have entered into separate settlement agreements by which they would, among other things, allow merchants to
accept the Visa or MasterCard branded credit cards without accepting their debit cards (and vice versa), reduce the prices charged to merchants for off-line signature debit transactions for a period of time, and pay over ten years into a Settlement
Fund amounts totaling $3.05 billion (before payment of attorneys’ fees, costs and expenses to be awarded by the Court). 
 If you are a member of this
Class, you may be entitled to benefits if the settlement is approved, and you are encouraged to seek additional information about the settlement of the case, the nature of the claims, your right to object to the settlement and to participate in a
fairness hearing, and your right to opt-out of the settlement if you are a New Merchant (i.e., if you first began accepting Visa and/or MasterCard cards for payment after June 21, 2002). 
 PLEASE NOTE THE FOLLOWING IMPORTANT DATES: 
 Filing of Plan of Allocation/Distribution of Settlement Proceeds: August 18, 2003 
 Filing of Class Counsel
Application for Fees, Costs and Expenses: August 18, 2003 
 Deadline for All Class Members to Object/New Merchants to Opt-out:
September 5, 2003 
 Fairness Hearing: September 25, 2003 
  

 FOR DETAILED INFORMATION AND

 TO OBTAIN A COPY OF THE COMPLETE NOTICE, VISIT THE WEBSITE AT 
 www.InReVisaCheck-MasterMoneyAntitrustLitigation.com 
 OR
CONTACT THE CLAIMS ADMINISTRATOR 
 The Garden City Group, Inc. 
 P.O. Box 9000-6014 
 Merrick, NY 11566-9000 
 Attn: In Re Visa Check/MasterMoney Antitrust Litigation 
 Toll-free: 1 (888) 641-4437 
 OR CONTACT LEAD COUNSEL FOR THE PLAINTIFFS, 
 Constantine & Partners, 212-350-2799, www.cpny.com 
 EXCEPT AS INSTRUCTED IN THE NOTICE, PLEASE DO NOT CONTACT THE COURT. 

 Exhibit 3 
 THE GARDEN CITY GROUP, INC. 
  

 In re Visa Check/MasterMoney Antitrust Litigation 
  

													
	 National Publications
	  		  		  		  		  		  	
	 Publication
	  	#
Insertions	  	Unit Size	  	Frequency	  	Issue Date	  	On-Sale Date	  	Total
Circulation
	 Parade Magazine (First Insertion)
	  	2	  	2/5 Page	  	Weekly	  	7/20 and 7/27	  	7/20 and 7/27	  	35,507,036
	 USA Weekend (First Insertion)
	  	2	  	2/5 Page	  	Weekly	  	7/20 and 7/27	  	7/20 and 7/27	  	21,352,002
	 Wall Street Journal
	  	1	  	1/4 Page	  	Daily	  	6/20/2003	  	6/20/2003	  	1,820,525
	 TV Guide (First Insertion)
	  	2	  	Full Page	  	Weekly	  	7/19 and 7/26	  	7/14 and 7/21	  	9,061,639
	 People (First Insertion)
	  	2	  	1/2 Page	  	Weekly	  	7/28 and 8/4	  	7/18 and 7/25	  	3,632,804
	 Time
	  	1	  	1/2 Page	  	Weekly	  	7/28/2003	  	7/21/2003	  	4,109,962
	 Sports Illustrated
	  	1	  	1/2 Page	  	Weekly	  	7/28/2003	  	7/23/2003	  	3,245,940
	 Newsweek
	  	1	  	1/2 Page	  	Weekly	  	7/28/2003	  	7/21/2003	  	3,125,151
	 Subtotal National Publications
	  	12	  		  		  		  		  	81,855,059
							
	 Merchant Trades
	  		  		  		  		  		  	
	 Publication
	  	#
Insertions	  	Unit Size	  	Frequency	  	Issue Date	  	On-Sale Date	  	Total
Circulation
	 Chain Store Age
	  	1	  	Full Page	  	Monthly	  	July	  	7/1	  	35,488
	 DSN Retailing Today
	  	1	  	Jr Page	  	23 times a year	  	7/21	  	7/21	  	29,855
	 MMR/Mass Market Retailers
	  	1	  	Jr Page	  	21 times a year	  	7/28	  	7/14-7/24	  	20,597
	 RIS/Retail Info Systems News
	  	1	  	Jr Page	  	Monthly	  	July	  	7/10	  	20,029
	 Retail Merchandiser
	  	1	  	Jr Page	  	Monthly	  	July	  	7/1-7/4	  	26,500
	 Stores
	  	1	  	Full Page	  	Monthly	  	July	  	7/6	  	33,063
	 Supermarket News
	  	1	  	Jr Page	  	Weekly - Mondays	  	7/21	  	7/22	  	39,965
	 Subtotal Merchant Trades
	  	7	  		  		  		  		  	205,497
	 Total
	  	19	  		  		  		  		  	82,060,556

							
	UNITED STATES DISTRICT COURT	 		  		  	
	EASTERN DISTRICT OF NEW YORK	 		  		  	
	————————————————————— -x	  		  	
	IN RE VISA CHECK/MASTERMONEY	 		  	96-CV-5238 (JG)(JM)	  	
	ANTITRUST LITIGATION	 		  		  	
	————————————————————— -x	  		  	

 PROPOSED ORDER AND FINAL JUDGMENT 
 On September 25, 2003, this Court held a hearing on (i) whether the terms and conditions of the Settlement Agreement entered into as of
June 4, 2003 between Visa U.S.A. Inc. (“Visa”) and Plaintiffs (the “Settling Parties”), attached hereto as Exhibit 1 (the “Settlement Agreement” or “Agreement”), are fair, reasonable and adequate for the
settlement of all claims released by Plaintiffs against Visa in the above-captioned action (the “Action” or “Class Action”); (ii) whether judgment should be entered dismissing Visa from the Action with prejudice;
(iii) whether to approve the Plan of Allocation of Settlement Funds as a fair and reasonable method to allocate the settlement proceeds among the members of the Class, and (iv) whether and in what amount to award Plaintiffs’
attorneys’ fees and reimbursement of costs and expenses. 
 The Court, having considered all matters submitted to it at the hearing and
otherwise; and having certified, by order dated February 22, 2000, a Plaintiff Class (the “Class”), pursuant to Rules 23(a), 23(b)(2) and 23(b)(3) of the Federal Rules of Civil Procedure, of all persons and business entities who have
accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa branded and/or MasterCard branded debit cards under the challenged tying arrangements at any time during the period of October 25, 1992 through the
Class Period (ending on or around June 21, 2003); 

 HEREBY FINDS, with all terms used herein having the meanings as set forth and defined in the Settlement Agreement, that:

 a. The Court has personal jurisdiction over the Settling Parties, and has subject matter jurisdiction to approve the Settlement Agreement,
including all exhibits thereto; 
 b. Notice to the Class required by Rule 23(e) of the Federal Rules of Civil Procedure, including, but not
limited to, the forms of notice and methods of identifying and notifying members of the Class, has been given in an adequate and sufficient manner, constituting the best notice practicable, satisfying and complying in all respects with such Rule,
due process, and any other applicable law; 
 c. The Court has held a hearing to consider the fairness, reasonableness and adequacy of the
Settlement; 
 d. The Court has been advised of all objections to the Settlement and has given consideration thereto; 
 e. Arm’s length negotiations have taken place in good faith between counsel for Plaintiffs and Visa, resulting in the Settlement; 
 f. The Plan of Allocation of Settlement Funds is a fair and reasonable method to allocate the settlement proceeds among the members of the Class; and

 g. The Settlement, including the terms of the Settlement Agreement and the exhibits thereto, is in all respects fair, reasonable and
adequate, and in the best interests of the Class. 
 ACCORDINGLY, the proposed Settlement is hereby fully and finally APPROVED pursuant to
Rule 23(e) of the Federal Rules of Civil Procedure. In accordance with the Settlement Agreement, the terms of which are hereby incorporated by reference, it is hereby ORDERED, ADJUDGED AND DECREED that: 
 1. The Settling Parties are directed to implement and consummate the Settlement Agreement according to its terms and conditions, including, but not
limited to, those items specifically identified below; 
  

 2 

 2. Visa is dismissed with prejudice from the Class Action; 
 3. Visa is directed to pay Plaintiffs, in settlement of the claims released by the Settlement Agreement, a total of two billion and twenty-five million
dollars ($2,025,000,000), to be made by wire transfer into the Settlement Fund Account under the schedule set forth in paragraph 3 of the Settlement Agreement; 
 4. Visa is directed to adopt rules that will, effective January 1, 2004, unbundle, and Visa agrees not bundle in the future, merchant acceptance of Visa POS Debit Devices and merchant acceptance of any Other Visa
Products as set forth in paragraph 4 of the Settlement Agreement; 
 5. Visa is directed to adopt rules, effective January 1, 2004,
requiring issuers in the United States to clearly and conspicuously identify all Visa POS Debit Devices in the manner set forth in paragraph 5 of the Settlement Agreement; 
 6. Visa is directed to adopt rules, effective January 1, 2004, requiring that Visa POS Debit Devices be given unique electronic identities in the
manner set forth in paragraph 7 of the Settlement Agreement; 
 7. By August 1, 2003, and continuing through December 31, 2003,
Visa is directed to reduce by at least $0.14 for supermarket debit transactions at Class Members, and by at least 48 basis points, on an aggregate effective basis, for all other types and categories of Visa POS Debit Device transactions at Class
Members, the published interchange rates in effect on April 30, 2003 for these transactions as set forth in paragraph 8 of the Settlement Agreement; 
  

 3 

 8. Visa is directed not to enact any rules that prohibit merchants from encouraging or steering Visa POS
Debit Device cardholders to use other forms of payment as set forth in paragraph 9 of the Settlement Agreement; 
 9. Visa is prohibited
until June 4, 2005 from entering into any agreements that prohibit financial institution members from issuing debit cards of competing networks, other than MasterCard as set forth in paragraph 10 of the Settlement Agreement; 
 10. Visa is directed to comply with all of its other obligations under the Settlement Agreement; 
 11. Plaintiffs are directed to comply with all of their obligations under the Settlement Agreement; 
 12. Visa and its past, present or future officers, directors, stockholders, member financial institutions, agents, employees, legal representatives,
trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns (the “Released Parties”) shall be released and forever discharged from all
manner of claims, demands, actions, suits, causes of action against the Released Parties, whether class, individual, or otherwise in nature, damages whenever incurred, liabilities of any nature whatsoever, including costs, expenses, penalties and
attorneys’ fees, known or unknown, suspected or unsuspected, in law or equity, that any Plaintiff or Class Members who have not timely excluded themselves from the Class Action (including any of their past, present or future officers,
directors, stockholders, agents, employees, legal representatives, trustees, parents, associates, affiliates, subsidiaries, divisions, partners, heirs, executors, administrators, purchasers, predecessors, successors and assigns), whether or not they
object to the Settlement and whether or not they make a claim upon or participate in the 

  

 4 

 
Settlement Fund, whether directly, representatively, derivatively or in any other capacity, ever had, now has or hereafter can, shall or may have, relating
in any way to any conduct prior to January 1, 2004 concerning any claims alleged in the Class Action Complaint or any of the complaints consolidated therein, including, without limitation, claims which have been asserted or could have been
asserted in this litigation which arise under or relate to any federal or state antitrust, unfair competition, unfair practices, or other law or regulation, or common law, including, without limitation, the Sherman Antitrust Act, 15 U.S.C § 1
et seq. (“Released Claims”). Each Class Member hereby covenants and agrees that it shall not, hereafter, seek to establish liability against any of the Released Parties based, in whole or in part, upon any of the Released Claims.

 13. For a period of five years, the Clerk of the Court shall maintain the record of those members of the Class who have timely excluded
themselves from the Class and shall provide a certified copy of such records to Visa, at its expense; 
 14. Nothing in this Order and Final
Judgment, the Settlement, or the Settlement Agreement is or shall be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by Visa or of the truth or validity or lack of truth or
lack of validity of any of the claims or allegations alleged in the Class Action or actions consolidated therein. 
 15. Plaintiffs and their
counsel are hereby awarded                      in attorneys’ fees, which the Court finds to be fair and reasonable, and
$             in reimbursement of costs and expenses, together with interest thereon from the date of entry of this Final Order and Judgment to the date of payment at the rate earned
by the Settlement Fund during such period. These amounts shall be paid out of the Settlement Fund Account in accordance with the terms of the 

  

 5 

 
Settlement Agreement. Constantine & Partners shall allocate and distribute the award of attorneys’ fees in a fashion which, in its opinion,
fairly compensates Plaintiffs’ Counsel for their respective contributions in the prosecution and settlement of the Action. 
 16.
Without affecting the finality of this judgment, the Court retains jurisdiction of this Settlement and the Settlement Agreement, including the administration and consummation of the Settlement and in order to determine issues relating to any
distribution to Class Members, and to attorneys’ fees, costs, and expenses incurred subsequent to entry of this judgment, which Plaintiffs’ Counsel may seek to recover from the Settlement Fund. In addition, without affecting the finality
of this judgment, the Court retains exclusive jurisdiction, and Visa and each member of the Class are hereby deemed to have submitted irrevocably to the exclusive jurisdiction of this Court for any suit, action, proceeding or dispute arising out of
or relating to this Order and Final Judgment, the Settlement Agreement or the applicability of the Settlement Agreement and exhibits thereto. Without limiting the generality of the foregoing, any dispute concerning the provisions of paragraph 12,
including but not limited to any suit, action or proceeding by a Plaintiff in which the provisions of paragraph 12 are asserted as a defense in whole or in part to any claim or cause of action or otherwise raised as an objection, shall constitute a
suit, action or proceeding arising out of or relating to this Order and Final Judgment. Solely for purposes of such suit, action or proceeding, to the fullest extent possible under applicable law, the parties hereto are hereby deemed to have
irrevocably waived and agreed not to assert, by way of motion, as a defense or otherwise, any claim or objection that they are not subject to the jurisdiction of this Court, or that this Court is, in any way, an improper venue or an inconvenient
forum. 
 17. In the event that the provisions of this Settlement Agreement are asserted by Visa as a defense in whole or in part to any
claim or cause of action or otherwise raised as an 

  

 6 

 
objection in any other suit, action or proceeding by a Plaintiff, Visa shall be entitled to a stay of that suit, action or proceeding until the United States
District Court for the Eastern District of New York has entered an order or judgment determining any issues relating to the defense or objection based on such provisions. Solely for purposes of such suit, action or proceeding, to the fullest extent
they may effectively do so under applicable law, the Settling Parties irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim or objection that they are not subject to the jurisdiction of such court, or that
such court is, in any way, an improper venue or an inconvenient forum. 
 18. The Court finds, pursuant to Rule 54(b) of the Federal Rules of
Civil Procedure, that there is no just reason for delay in the entry of this Order and Final Judgment, and directs the Clerk to immediately enter this Order and Final Judgment 
  

					
		  	  
	  	
		  	 Honorable John Gleeson
 United States District
Judge
	  	
			
	 DATED:                     ,
2003
	  		  	

  

 7 

 Exhibit E 
 Current Other Visa Products 
  

	 	•	 	 Consumer Credit Products (including co-branded and smart Visa versions) 

  

	 	¡	 	 Classic 

  

	 	¡	 	 Gold 

  

	 	¡	 	 Platinum 

  

	 	¡	 	 Signature 

  

	 	¡	 	 Infinite 

  

	 	•	 	 Commercial Products 

  

	 	¡	 	 Small Business Products 

  

	 	Ÿ	 	 Business Credit 

  

	 	Ÿ	 	 Business Debit 

  

	 	Ÿ	 	 Business Line of Credit 

  

	 	Ÿ	 	 Smart Visa Business 

  

	 	¡	 	 Purchasing Card 

  

	 	¡	 	 Corporate Card 

  

	 	¡	 	 Fleet Card 

  

	 	¡	 	 Commercial Prepaid 

							
	UNITED STATES DISTRICT COURT	 		  		  	
	EASTERN DISTRICT OF NEW YORK	 		  		  	
	————————————————————— -x	  		  	
	IN RE VISA CHECK/MASTERMONEY	 		  	96-CV-5238 (JG)(JM)	  	
	ANTITRUST LITIGATION	 		  		  	
	————————————————————— -x	  		  	

 ORDER PRELIMINARILY APPROVING PROPOSED SETTLEMENT 
 Based on the record to date, and upon review and consideration of the Settlement Agreement dated as of June 4, 2003 between Visa U.S.A. Inc.
(“Visa”) and Plaintiffs (the “Settlement Agreement”), the motion of the parties for an Order Preliminarily Approving the Proposed Settlement, the Memorandum of Law in support thereof, and the Stipulation and Order for Providing
Notice of Settlement, IT IS HEREBY ORDERED AND DECREED as follows: 
 1. The Settlement between Plaintiffs and Visa, as embodied in the
Settlement Agreement and the exhibits thereto, attached hereto, the terms of which are incorporated herein, is hereby preliminarily approved, and all proceedings in this Action against Visa are hereby stayed pending final approval of the Settlement;

 2. Approval is hereby given to the forms of Notice, attached to the Settlement Agreement as Exhibits A and B, and to the Notice Plan
contained in the Stipulation and Order for Providing Notice of Settlement, attached to the Settlement Agreement as Exhibit C, the terms of which are incorporated herein; 
 3. On or before July 5, 2003, Plaintiffs’ Co-Lead Counsel shall cause copies of the Notice to be sent to members of the Class by first class mail as set forth in the Notice Plan; 
 4. On or before August 4, 2003, Plaintiffs’ Co-Lead Counsel shall publish copies of the Notice as set forth in the Notice Plan; 

 5. On or before August 18, 2003, Plaintiffs’ Co-Lead Counsel shall file with the Court a
(i) Plan of Allocation of Settlement Funds setting forth a plan for allocating and distributing the Net Settlement Fund to the Class, and (ii) a Fee and Expense Application setting forth Plaintiffs’ request for attorneys’ fees,
expenses, and costs; 
 6. On or before September 18, 2003, Plaintiffs will file with the Court a Motion for Final Approval of the
Settlement and a Memorandum of Law in support thereof; 
 7. On September 25, 2003 at
            o’clock, the Court will hold a hearing on final approval of the Settlement to determine whether the Settlement on the terms set forth in the Settlement Agreement is
fair, reasonable, and adequate to the Class and should be finally approved by the Court; whether final judgment should be entered thereon; whether the Plan of Allocation of the Settlement Funds should be approved; and whether Plaintiffs’
request for attorneys’ fees and reimbursement of costs and expenses should be granted; 
 8. The Court will consider comments and/or
objections to the Settlement or the award of Plaintiffs’ attorneys’ fees and reimbursement of costs and expenses only if such comments or objections and any supporting papers are filed in writing with the Clerk of the Court, and mailed to
counsel for Plaintiffs and Visa, on or before September 5, 2003; 
 9. Attendance at the hearing is not necessary; however, persons
wishing to be heard orally in opposition to the approval of the Settlement, Plan of Allocation, or the award of Plaintiffs’ attorneys’ fees, costs, and expenses are required to provide in their written objections or comments a statement of
their intention to appear at the hearing, a statement of their position and the grounds therefor, the identity of any witnesses they may call to testify, and all exhibits they intend to introduce at the hearing; and 
  

 2 

 10. Preliminary approval is hereby given to the form of Order and Final Judgment, attached hereto as
Exhibit D. 
 DONE AND ORDERED this              day of June, 2003. 
  

					
		  	  
	  	
		  	 Honorable John Gleeson
 United States District
Judge
	  	

  

 3 

 Exhibit G 
 Current Visa POS Debit Devices 
  

	 	•	 	 Consumer Check Card 

  

	 	¡	 	 Classic (including affinity/co-brand) 

  

	 	¡	 	 Gold (including affinity/co-brand) 

  

	 	¡	 	 Platinum (including affinity/co-brand) 

  

	 	¡	 	 Check Card II 

  

	 	•	 	 Prepaid Cards/EBT Cards 

  

	 	¡	 	 Visa Buxx 

  

	 	¡	 	 Visa Payroll 

  

	 	¡	 	 Visa Gift Cards (including incentives, promotional, rebate) 

  

	 	¡	 	 Child support cards 

  

	 	¡	 	 Unemployment cards 

  

	 	¡	 	 Insurance claim cards 

  

	 	¡	 	 Customer service cards (e.g., airline courtesy comp cards for cancelled flights) 

  

	 	¡	 	 State disbursement cards (other than unemployment or child support, e.g., state disability insurance cards) 

  

	 	¡	 	 Flexible spending account cards (e.g., Medical Savings Acct.) 

  

	 	¡	 	 Customer Everyday/general purpose re-loadable and one time use prepaid (including stored value) cards 

  

	 	¡	 	 Student aid college cards 

 EXHIBIT H 
 Exempted Deferred Debit Programs 
 Issuer: Merrill Lynch  
 Program Name: Merrill Lynch Visa Signature Rewards® (aka Merrill Lynch Your Way Signature Rewards®) 
 Issuer: Merrill Lynch  
 Program Name: Visa Gold (same deferred debit program as above, for different customer segment, without rewards) 
 Issuer: Wachovia  
 Program Name: COMMAND Visa Platinum
Debit Card, with optional Rewards Program (offered by Prudential Securities) 
 Issuer: Citibank  
 Program Name: Smith Barney FMA (aka Smith Barney Gold Debit Card) 
 Issuer: Bank One  
 Program Name: Investment Access (offered by Dain Rauscher) 
 Issuer: PFPC (PNC Bank affiliate)  
 Program Name:
Metlife Asset Management Account 

 Exhibit I 
 Exemplar of Required Notice from Acquirers to Merchants 
 “New procedures will soon go into effect as result of
the settlement reached in the merchant lawsuit In re Visa Check/MasterMoney Antitrust Litigation (United States District Court, Eastern District of New York Case No. 96-CV-5238 (JG): Effective January 1, 2004, you will have the
choice of discontinuing acceptance of either Visa credit or Visa debit, including Visa Check and Visa Prepaid cards (i.e., non-PIN debit). If you decide to stop accepting one of these product categories under an existing contract, you must notify
[Acquirer name] in writing at least thirty days before the date you will stop. If you do not want to change your current acceptance of both Visa credit and Visa check card you do not need to do anything.”

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