LICENSE AGREEMENT FOR INDEX-RELATED DERIVATIVE PRODUCTS BETWEEN FRANK RUSSELL COMPANY AND INTERCONTINENTAL-EXCHANGE, INC.
Exhibit 10.1
LICENSE AGREEMENT
FOR INDEX-RELATED DERIVATIVE PRODUCTS
BETWEEN XXXXX XXXXXXX COMPANY
AND INTERCONTINENTAL-EXCHANGE, INC.
FOR INDEX-RELATED DERIVATIVE PRODUCTS
BETWEEN XXXXX XXXXXXX COMPANY
AND INTERCONTINENTAL-EXCHANGE, INC.
[Certain information in this agreement has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested with respect to the
omitted portions.]
This License Agreement (the “Agreement”), is entered into as of
June 15, 2007 (the “Effective Date”), by and between the Xxxxx Xxxxxxx Company (“XXXXXXX”) and
INTERCONTINENTAL-EXCHANGE, INC. (“Licensee”).
WHEREAS, XXXXXXX is an international financial services firm and the owner of intellectual
property and other rights in and associated with a series and family of securities indexes (each,
a “Xxxxxxx US Index” and collectively the “Xxxxxxx Indexes”), including without limitation
“Xxxxxxx 1000”, “Xxxxxxx 2000” and “Xxxxxxx 3000”. XXXXXXX determines and weights the components
of the Xxxxxxx US Indexes and calculates, maintains and disseminates the Xxxxxxx US Indexes on a
time-sensitive basis.
WHEREAS, the Xxxxxxx US Indexes are associated with various registered and unregistered trade
names, trademarks and service marks owned by XXXXXXX (the “Xxxxxxx Xxxx(s)”). The use of the
Xxxxxxx Xxxxx implies, and/or is likely to cause third parties to infer, an association between
the user of the Xxxxxxx Xxxxx and XXXXXXX and the substantial reputation and good will maintained
by XXXXXXX and its affiliates.
WHEREAS, Licensee operates Board of Trade of the City of New York, Inc. (“NYBOT”), a regulated
commodities exchange, and operates or intends to operate the facilities specified in Exhibit A (the
“Exhibit A Affiliates”) (NYBOT and the Exhibit A Affiliates are each referred to herein as the
“Licensed Exchange”). Licensee desires to design, create, issue, list, trade, and/or facilitate
the trading of, one or more financial products (“Derivative Products”) derived in whole or in part
from, or otherwise associated with, either (i) one or more Xxxxxxx US Indexes and/or the Xxxxxxx
Xxxxx or (ii) interests in funds or other securities issued by others that are derived in whole or
in part from, or are otherwise associated with, one or more Xxxxxxx US Indexes and/or the Xxxxxxx
Xxxxx. Licensee further desires to engage in marketing and promotional activities related to
certain Derivative Products and the listing and/or trading thereof on or through the Licensed
Exchange, and in that connection, to use the associated Xxxxxxx Xxxxx. Licensee desires, and
acknowledges that it requires, a license and other permissions from XXXXXXX to do so.
WHEREAS, XXXXXXX is willing on an exclusive basis as described in Section 4 to license and
otherwise permit Licensee on the terms of this Agreement to engage in certain activities involving
certain Derivative Products as expressly provided herein.
NOW THEREFORE, in consideration thereof and the following covenants and conditions, and for
good and valuable consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. License Grant. Subject to the terms of this Agreement including the termination or
expiration of the waiting period applicable to this Agreement under the Xxxx-Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the “HSR Act”), XXXXXXX hereby grants Licensee an exclusive
as described in Section 4.2, transferable and sub-licensable license, under and to the Xxxxxxx US
Indexes and the Xxxxxxx Xxxxx, for use within the territory (the “Territory”) and subject to the
territorial
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restrictions, if any, described in Exhibit A hereto, and during the term stated in Section 3
(the “Term”) or an applicable Closing Period (as defined in Section 5):
(a) to design, create, and/or issue (collectively, to “Issue”, “Issued” or to effect the
“Issuance” of) the particular Derivative Products listed in Exhibit B (the “Licensed Derivative
Products”);
(b) to list or otherwise facilitate the trading by others of the Licensed Derivative
Products (to “List”, “Listed” or “Listing”) on or through the Licensed Exchange, (including
the Exhibit A Affiliates) if legally qualified to list and trade the Licensed Derivative
Products;
(c) to permit and/or authorize distributors, underwriters, syndicators, market makers,
brokers, dealers, and futures commission merchants that hold current and active rights to engage in
and to effect trades of financial products generally on or through the Licensed Exchange (the
“Authorized Traders”), to Issue and to List one or more of the Licensed Derivative Products on or
through the Licensed Exchange (including the Exhibit A Affiliates);
(d) to engage in marketing and other promotional activities with respect to the activities
stated in clauses (a), (b) and (c) above using advertising, sales promotion, training, and/or
demonstration methods and materials (collectively “Marketing Methods and Materials”), subject to
the conditions stated herein;
(e) to indicate that XXXXXXX is the source of the Xxxxxxx US Index on which such Licensed
Derivative Products are based (the “Associated Xxxxxxx US Index”) as may be required by
applicable laws, rules, regulations, court orders or this Agreement; and
(f) to disseminate the index values of the Associated Xxxxxxx US Indexes, as provided by
XXXXXXX, to securities information processors, communications vendors, and news services for
informational purposes in connection with the Issuance and the Listing of the Licensed Derivative
Products on or through the Licensed Exchange.
2. Clearing.
If the Agreement fails to be exclusive with respect to any Index as described in Section 4.4
or 4.5, XXXXXXX may request that Licensee cause the Licensed Exchange, and its clearing
organization, to enter into an agreement with all other U.S. commodity exchanges on which the same
Licensed Derivative Products are traded, and their respective clearing organizations, that will
provide traders the ability to initiate a contract in a common Licensed Derivative Product on one
exchange and offset or closeout such contract by a transaction executed on another exchange,
provided, however, that each other exchange on which the common Licensed Derivative Product is
listed for trading, and its respective clearing organization, has executed a definitive written
agreement providing for the ability to so initiate and close-out positions in common Licensed
Derivative Products and provided further, however, that XXXXXXX may terminate this Agreement with
respect to such common Licensed Derivative Product, but shall not be entitled to any damages for
breach of contract or otherwise, in the event that the Licensed Exchange and its clearing
organization fail to execute such definitive written agreement.
3. Term.
Licensee’s rights under this Agreement shall commence on the Effective Date and shall
continue, unless terminated as provided herein, through July 1, 2014 (“the Initial Term”).
Following the expiration of the Initial Term, Licensee’s rights under this Agreement, including
exclusivity, shall be automatically renewed for successive one (1) year periods (each a “Renewal
Term”) unless either party
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provides the other party with at least ninety (90) days prior written notice before the end of
the Initial Term or any Renewal Term of its intent to not renew the Agreement. The Initial Term
and the Renewal Terms (if any) shall together constitute the “Term” under this Agreement.
4. Exclusivity.
4.1 Licensee understands that XXXXXXX has licensed other exchanges (“other licensees”), with
respect to one or more of the Licensed Derivative Products, to engage in one or more of the
activities and rights licensed under Section 1 of this Agreement (the “Existing Licenses”).
(a) XXXXXXX represents and warrants that the Existing Licenses will expire on or about
November 1, 2007, and January 29, 2008 subject, however to the other licensee’s limited rights and
obligations during a closing period following such expiration, with the closing period being
similar to the Closing Period described in Section 5 below.
(b) XXXXXXX represents and agrees that it shall not renew or extend the Existing Licenses
beyond their expiration date of on or about November 1, 2007 and January 29, 2008.
(c) XXXXXXX acknowledges and agrees that Licensee’s rights under this Agreement commencing on
the Effective Date shall be exclusive, with the exception of any of Licensee’s rights that overlap
the Existing Licenses, which rights shall be non-exclusive until expiration of the Existing
Licenses and any applicable closing period, and then Licensee’s rights shall be exclusive
thereafter for the remainder of the Term under this Agreement, subject to the Exclusivity Term set
forth below.
(d) XXXXXXX represents and agrees that promptly following the Effective Date of this
Agreement, it shall send a notice of termination to the other licensee advising that the Existing
Licenses shall expire on November 1, 2007 and January 29, 2008, respectively and will not be
renewed or extended. If any other licensees continue to engage in the Issuance or Listing of
Licensed Derivative Products after expiration of the rights granted in their Existing Licenses,
XXXXXXX agrees to undertake an action or actions against such other licensees to protect the
Licensees rights under this Agreement. XXXXXXX shall pay the expenses incurred in connection with
such action or actions.
4.2 XXXXXXX represents and agrees that it will not, with effect at any time during the
Exclusivity Term (as defined below) applicable to a particular Licensed Derivative Product, grant a
license to any third party (other than under the Existing Licenses as described above) to Issue or
to List such Licensed Derivative Product in the Territory.
4.3 The “Exclusivity Term” with respect to a Licensed Derivative Product shall mean the
shortest of the following periods, as applicable to such Licensed Derivative Product in a given
country:
(a) the period from the Effective Date until the occurrence of a US or Global Triggering Event
(as defined below) with respect to the Associated Xxxxxxx US Index for such Licensed Derivative
Product;
(b) the period from the Effective Date until a court of competent country determines in a
final ruling that the exclusivity provisions of this Section 4 are unenforceable in the Territory
as applied to such Licensed Derivative Product or the Associated Xxxxxxx US Index for such Licensed
Derivative Product; and
(c) the period from the Effective Date until the end of the Term.
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4.4
(a) U.S. Triggering Event. If, during any two consecutive calendar quarters,
beginning on or after three years from the Effective Date, Licensee fails to maintain an average
trading volume of at least [**] contracts per day (“Minimum U.S. Average Daily Trading Volume”) on
any of the Exhibit A Affiliates, in the aggregate, for a particular Xxxxxxx US Index (in the
aggregate for all contracts for all Licensed Derivative Products that are based on such Xxxxxxx US
Index), XXXXXXX may, in its sole discretion, elect to convert Licensee’s exclusivity rights in the
United States with respect to all Licensed Derivative Products based on such Xxxxxxx US Index to
non-exclusive rights upon giving Licensee at least thirty (30) days prior written notice of such
election. Such conversion at the end of such notice period shall be a “US Triggering Event” with
respect to that Xxxxxxx US Index. For purposes of this Agreement, the term “contract” shall be
used to identify a financial instrument comprising a matched long and short position.
(b) Global Triggering Event. If, during any two consecutive calendar quarters,
beginning on or after one year following Licensee’s initial Issuing or Listing in any non-US
country according to Section 4.6 below, Licensee and/or any licensed third party, in the aggregate,
fail to maintain an average trading volume of at least [**] contracts per day in such non-US
country (“Minimum Global Average Daily Trading Volume”) for a particular Xxxxxxx US Index, XXXXXXX
may, in its sole discretion, elect to convert Licensee’s non-U.S. exclusivity rights in that
country with respect to all Licensed Derivative Products based on such Xxxxxxx US Index to
non-exclusive rights upon giving Licensee at least thirty (30) days prior written notice of such
election. Such conversion at the end of such notice period shall be a “Global Triggering Event”
with respect to that Xxxxxxx US Index traded in that particular country, but shall in no way affect
Licensee’s rights with respect to other Xxxxxxx US Indexes or other countries.
4.5 During any period in which Licensee is not actively Listing any Licensed Derivative
Product based on a particular Xxxxxxx US Index, XXXXXXX may, from time to time and by written
notice to Licensee (a “Forcing Option Notice”), require Licensee to elect whether or not Licensee
will take prompt action to Issue and List one or more Licensed Derivative Products based on such
Xxxxxxx US Index. Upon receipt of a Forcing Option Notice, Licensee shall either:
(a) send a written response to XXXXXXX within thirty (30) days of its receipt of such Forcing
Option Notice that Licensee does not intend to Issue and List a Derivative Product based on the
applicable Xxxxxxx US Index (which response shall be a “US Triggering Event” with respect to the
applicable Xxxxxxx US Index if the Licensee does not intend to Issue or List in the US or a Global
Triggering Event if Licensee does not intend to Issue or List in the particular country which is
the subject of the Forcing Option Notice); or
(b) begin, within no more than ninety (90) days of its receipt of such Forcing Option Notice,
to Issue and List on a sustained basis at least one Licensed Derivative Product based on the
applicable Xxxxxxx US Index. If Licensee fails to comply with this clause (b), the expiration of
such 90-day period shall at XXXXXXX’x option (exercisable upon written notice to Licensee within 30
days thereafter) be a “US Triggering Event” with respect to that Xxxxxxx US Index if the failure
relates to the US, and a “Global Triggering Event” if the failure relates to a non-US country.
** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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4.6
(a) During any period in which Licensee is not licensed for trading in a country and XXXXXXX
desires that Licensee provide access to the Licensed Derivative Products in that country, XXXXXXX
and Licensee will agree to a reasonable time period but in no event greater than 180 days to allow
Licensee to either obtain the necessary regulatory approvals to provide the Licensed Derivative
Products in that country, or to enter into a relationship with a third party already having the
necessary regulatory approvals to provide the Licensed Derivative Products in that country. In
connection with Licensee entering into a relationship with a third party to provide the Licensed
Derivative Products, Xxxxxxx shall have the sublicense approval rights specified in Section 18 of
this Agreement; provided, however, that if Xxxxxxx does not consent to a sublicense to a bona fide
third party with whom Licensee desires to establish a relationship, Xxxxxxx shall have no further
right to license to any other third party as provided hereafter in this paragraph. If after such
time period, Licensee has not obtained the necessary regulatory approvals or entered into a
relationship with a third party to provide the Licensed Derivative Products, and XXXXXXX in its
sole discretion has not extended the time period for Licensee to obtain approvals, then XXXXXXX
shall have the limited right to license the Xxxxxxx US Indexes and the Xxxxxxx Xxxxx to a third
party in that specific country to Issue or List the Licensed Derivative Products and will take
appropriate measures to ensure that the license to the third party does not in any way compete
with, interfere with or impede Licensee’s rights under this Agreement, provided, however, that any
such license is limited to the Issuing or Listing of Licensed Derivative Products for trading in
said country or countries and Xxxxxxx and Licensee shall make good faith efforts to enforce such
limitation. Licensee will be permitted to Issue and List the Licensed Derivative Products in the
territory in question even after XXXXXXX provides the third party with the limited license.
(b) During any period in which Licensee is not licensed for trading in a country and XXXXXXX
is approached by a third party desiring to Issue and List the Licensed Derivative Products and
XXXXXXX desires that such third party be able to Issue and List in that country and such third
party [**] contracts per day from such country, XXXXXXX shall inform Licensee of such third party,
and Licensee shall have the option to:
(i) agree to a minimum average trading volume to at least [**] contracts per day in
said country commensurate with the obligations outlined in Section 4.4(b); or
(ii) enter into a relationship with such third party to provide an average trading
volume of at least [**] contracts per day in said country commensurate with the
obligations outlined in Section 4.4(b),
in each case in order to maintain exclusivity in such country.
In the event that Licensee fails to fulfill either of options (i) or (ii) within a reasonable
time period as agreed to by XXXXXXX and Licensee, but in no event greater than 180 days, and
XXXXXXX in its sole discretion has not extended the time period, XXXXXXX shall have the limited
right to license the Xxxxxxx US Indexes and the Xxxxxxx Xxxxx to a third party in that specific
country to Issue or List the Licensed Derivative Products and will take appropriate measures to
ensure that the license to the third party does not in any way compete with, interfere with or
impede Licensee’s rights under this Agreement, provided, however, that any such license is limited
to the Issuing or Listing of Licensed
** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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Derivative Products for trading in said country or countries and Xxxxxxx and Licensee shall make
good faith efforts to enforce such limitation. Licensee will be permitted to Issue and List the
Licensed Derivative Products in the territory in question even after XXXXXXX provides the third
party with the limited license. For the avoidance of doubt, XXXXXXX’x notification to Licensee
under 4.6(b) herein shall be considered as XXXXXXX’x consent for Licensee to sublicense or delegate
this Agreement and any rights or obligations hereunder to such third party in said country.
5. Closing Period Rights and Obligations.
If and to the extent that any contracts for Licensed Derivative Products have open interests
at the end of the Term, Licensee shall, at its option: (i) continue to facilitate the trading of
such contracts through their expiration, provided such expiration shall not occur later than one
(1) year following the end of the Term (such trading through expiration is called the “Closing
Period” herein), (ii) permit another exchange to trade those contracts during the Closing Period,
or (iii) arrange for the open interest to be closed out during the Closing Period via the
clearing-corporation where the open interest is held.
6. Calculation and Continuity of the Associated Xxxxxxx US Indexes.
6.1 At no cost to Licensee other than the fees described in Exhibit D (the “Fees”), XXXXXXX
or its agent shall compute and make available for transmission to and reception by vendors the
index value of each Associated Xxxxxxx US Index at least once every fifteen seconds during normal
trading hours of the Licensed Exchange. XXXXXXX reserves the right to require recipients of
Xxxxxxx US Index values to be validated as current subscribers to Xxxxxxx US Index services.
6.2 Each day that the Licensed Exchange is open for business, XXXXXXX shall, upon receipt of
a final closing value of each Associated Xxxxxxx US Index, designate an official closing index
value for that Associated Xxxxxxx US Index for purposes of this Agreement. XXXXXXX shall exert
commercially reasonable efforts to provide such official closing values to the Licensee no later
than 6:00 p.m. Eastern Time on each such day.
6.3 If XXXXXXX becomes aware of an error causing a difference of .01 index points or more in
the official closing value of any Associated Xxxxxxx US Index then XXXXXXX shall, at its own
expense, use commercially reasonable efforts to correct such error in a timely fashion. XXXXXXX
shall disseminate the revised closing value through its normal channels of dissemination.
6.4 XXXXXXX shall use commercially reasonable efforts to preserve the continuity and
consistency of each Associated Xxxxxxx US Index as a measure of that segment of the market such
Associated Xxxxxxx US Index was designed to reflect, although XXXXXXX is free to select and alter
the components and methods of calculation of each Associated Xxxxxxx US Index without consent of
Licensee.
6.5 XXXXXXX shall institute processes reasonably designed to give Licensee prior notice of
any material alteration to and of the Associated Xxxxxxx US Indexes during the Term or the
Closing Period, if any.
6.6 If XXXXXXX, during the Term or any Closing Period, ceases to calculate or disseminate
index values for any Associated Xxxxxxx US Index, XXXXXXX shall, on a confidential basis, provide
Licensee with the then applicable method of calculation of the discontinued Associated Xxxxxxx US
Index along with any reasonably needed past and future information.
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7. Disclaimer of Warranties. While XXXXXXX will use commercially reasonable efforts based on
sources it deems adequate in calculating the Associated Xxxxxxx US Indexes in accordance with its
then applicable method for calculation of such Associated Xxxxxxx US Index, XXXXXXX DOES NOT
WARRANT THE ACCURACY OR COMPLETENESS OF ANY XXXXXXX US INDEX OR OF THE DATA USED TO CALCULATE ANY
XXXXXXX US INDEX OR DETERMINE ITS COMPONENTS, OR THE UNINTERRUPTED OR UNDELAYED CALCULATION OR
DISSEMINATION OF ANY XXXXXXX US INDEX. XXXXXXX PROVIDES THE XXXXXXX US INDEXES “AS-IS”
AND DOES NOT REPRESENT OR WARRANT THAT THE XXXXXXX US INDEXES OR THE MEANS BY WHICH XXXXXXX
CALCULATES THEM IS FREE OF DEFECTS. XXXXXXX DOES NOT REPRESENT OR WARRANT THE TIMELINESS,
SEQUENCE, ACCURACY OR COMPLETENESS OF THE XXXXXXX US INDEXES, OR THAT THE XXXXXXX US INDEXES
ACCURATELY REFLECT PAST, PRESENT, OR FUTURE MARKET PERFORMANCE OR WILL MEET LICENSEE’S
REQUIREMENTS. XXXXXXX DISCLAIMS ALL INDEMNITIES (EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT)AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, ANY IMPLIED WARRANTY
ARISING FROM TRADE USAGE, COURSE OF DEALING, OR COURSE OF PERFORMANCE, AND ANY OTHER WARRANTY OR
OBLIGATION ON THE PART OF XXXXXXX
8. Promotion Efforts; Marketing Methods and Materials.
8.1 Licensee shall throughout the Term devote continuing commercially reasonable efforts
to the development and promotion of the Licensed Derivative Products, including without
limitation through the specific activities and efforts described in Exhibit C hereto. To that end,
Licensee is free to determine, in its sole discretion, the timing and the extent to which, if at
all, the specific activities and efforts described in Exhibit C hereto will be carried out.
8.2 All Marketing Methods and Materials which use any of the Xxxxxxx Xxxxx shall expressly
state that XXXXXXX is the owner of the Xxxxxxx Xxxxx and shall include the appropriate trademark
symbol (either “SM” or “®”), as designated by XXXXXXX from time to
time, and shall otherwise conform to XXXXXXX’x trademark usage and notification policies as
communicated to Licensee. Such statement shall substantially take the following form, unless
XXXXXXX otherwise directs:
“Xxxxxxx [2000®] is a trademark and service xxxx of the Xxxxxxx Investment Group, used
under license.”
8.3 If Licensee or any Authorized Trader uses any material for which XXXXXXX owns the
copyright, Licensee shall devote commercially reasonable efforts to assure that all copies
thereof include appropriate copyright notices in a form designated by XXXXXXX.
8.4 In any prospectus, offering memorandum, contract, or writing delivered to a third party
in connection with the Issuance or proposed Issuance of any Licensed Derivative Product, Licensee
shall devote commercially reasonable efforts to insure that substantially the following language
shall prominently appear:
“NEITHER XXXXX XXXXXXX COMPANY‘S PUBLICATION OF THE XXXXXXX US
INDEXES NOR ITS LICENSING OF ITS TRADEMARKS FOR USE IN CONNECTION WITH SECURITIES OR OTHER
FINANCIAL PRODUCTS DERIVED FROM A XXXXXXX US INDEX IN ANY WAY SUGGESTS OR IMPLIES A
REPRESENTATION OR OPINION BY XXXXX XXXXXXX COMPANY, INTERCONTINENTALEXCHANGE, INC. OR ANY OF
THEIR RESPECTIVE SUBSIDIARIES AS TO THE ATTRACTIVENESS OF INVESTMENT IN ANY SECURITIES OR
OTHER FINANCIAL PRODUCTS BASED UPON OR DERIVED FROM ANY XXXXXXX US INDEX. XXXXX XXXXXXX
COMPANY, OR ANY OF ITS SUBSIDIARIES ARE NOT THE ISSUER OF ANY SUCH SECURITIES OR OTHER
FINANCIAL PRODUCTS AND MAKE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ANY XXXXXXX US INDEX OR ANY DATA INCLUDED OR
REFLECTED THEREIN, NOR AS TO RESULTS TO BE OBTAINED BY
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ANY PERSON OR ANY ENTITY FROM THE USE OF THE XXXXXXX US INDEX OR ANY DATA INCLUDED OR
REFLECTED THEREIN.”
8.5 Solely in connection with the preservation and policing of rights in and to the
Xxxxxxx Xxxxx, XXXXXXX shall have the right to review and approve prior to their use or release,
all Marketing Methods and Materials proposed or desired to be used by the Licensee or any
Authorized Trader; provided, however, that Licensee may use or release such
Marketing Methods and Materials, or permit an Authorized Trader to do so, without XXXXXXX’x
approval if XXXXXXX has not objected to the contents thereof within five business days of XXXXXXX’x
receipt of such Marketing Methods and Materials. Licensee need not resupply any Marketing Methods
and Materials to XXXXXXX as long as the same contain all required notices and disclaimer language
in unchanged and unobscured form and are substantially like the Marketing Methods and Materials
previously approved by XXXXXXX to the extent they describe or refer to XXXXXXX or any Xxxxxxx US
Indexes or use any Xxxxxxx Xxxxx. XXXXXXX shall not unreasonably withhold approval for Marketing
Methods and Materials.
8.6 In the event that Licensee becomes aware of any particular potential, threatened, or
actual infringement or misappropriation of rights in, or unauthorized use of, any of the Xxxxxxx
US Indexes or any of the Xxxxxxx Xxxxx by a third party (“Unlicensed Use”), of the Associated
Xxxxxxx US Index or Xxxxxxx Xxxxx on which a Licensed Derivative Product is based that has, or can
reasonably be expected to have, a material adverse impact upon the benefits derived by the
Licensee hereunder, and XXXXXXX does not undertake an action or settlement with respect to such
Unlicensed Use within thirty (30) calendar days of becoming so aware, whether by Licensee’s notice
to XXXXXXX or otherwise, the Licensee shall have the right to bring an action or actions, at
Licensee’s sole discretion, against the third party to protect the benefits derived by the
Licensee hereunder. XXXXXXX agrees to be designated as plaintiff, co-plaintiff or any other
suitable party designation in any action or actions, as determined appropriate in Licensee’s sole
discretion, and XXXXXXX also shall as reasonably requested by Licensee from time to time and at
Licensee’s expense, cooperate with Licensee with respect to any action taken by Licensee against a
third party as described in this Section. All of all expenses incurred by Licensee on account of
any such action or actions brought against a third party, including but not limited to legal fees
and costs, shall be setoff against any royalties payable to XXXXXXX pursuant to Exhibit D of this
Agreement. Any damages or fees recovered as a result of any action or actions brought against any
third parties, whether by XXXXXXX or Licensee, shall be allocated first to reimburse both parties
for any expenses incurred in bringing such action or actions, including to reimburse all
outstanding royalties payable to XXXXXXX that have been setoff, and with any remaining recovery to
be shared equally between the parties.
8.7 Licensee shall as requested by XXXXXXX from time to time and at XXXXXXX’x expense,
cooperate with XXXXXXX in the maintenance, registration, and policing of XXXXXXX’x rights in the
Xxxxxxx US Indexes and the Xxxxxxx Xxxxx.
9. Fees and Audit Rights.
9.1 Licensee shall, on a quarterly basis, provide written reports to XXXXXXX itemizing the
contracts traded for each Licensed Derivative Product, and stating the average trading volume
achieved by the Licensee during such quarter for each Xxxxxxx US Index. Licensee shall pay XXXXXXX
the Fees specified in Exhibit D hereto. Any amount not paid within 30 days after its due date is
subject to interest at the rate of 1% per month (or, if less, the highest rate permitted by law)
until paid, plus costs of collection, including reasonable outside attorneys’ fees. Licensee shall
also assume full and complete responsibility for the payment of any taxes, charges or assessments
imposed on Licensee, by any foreign or domestic national, state, provincial, local or other
government bodies, or subdivisions thereof, and any penalties or interest (other than personal
property or income taxes imposed on XXXXXXX) relating to this Agreement. In addition, if Licensee
is required by applicable law to deduct or withhold any such tax, charge or
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assessment from the amounts due XXXXXXX, then such amounts due shall be increased so that the
net amount actually received by XXXXXXX after the deduction or withholding of any such tax, charge
or assessment, will equal one hundred percent (100%) of the charges specified herein.
9.2 XXXXXXX shall have the right, upon reasonable notice to Licensee, not more than once per
calendar year, to audit on a confidential basis, any relevant books and records of Licensee, any
Exhibit A Affiliate, or any Authorized Trader (to the extent Licensee maintains such information
and is not prohibited from disclosing such information to Xxxxxxx), to determine whether Licensee
has achieved the Minimum U.S. Average Daily Trading Volume and the Minimum Global Average Trading
Volume, and to ensure that the type and amount of Fees calculated or stated to be payable to
XXXXXXX are complete and accurate. Such an audit shall take place during normal business hours. If
Licensee has underreported the Fees due to XXXXXXX under this Agreement by more than 5%, Licensee
shall bear the reasonable costs of such audit.
10. Certain Limitations; Reservation of Rights and Properties.
10.1 This Agreement affects the grant of a license to Licensee and not the sale of any rights
in the Xxxxxxx US Indexes or the Xxxxxxx Xxxxx. This license does not apply to any Derivative
Products other than the Licensed Derivative Products. No implied licenses are intended hereunder
and none shall be inferred. All rights not expressly granted herein are reserved by XXXXXXX.
10.2 Licensee agrees that the Xxxxxxx US Indexes are products of the selection, coordination,
arrangement, and editing of XXXXXXX or its affiliates or contractors and that such efforts involve
the considerable expenditure by XXXXXXX of time, effort, and judgment. As between the parties,
Licensee recognizes that XXXXXXX is the rightful licensor of the Xxxxxxx US Indexes and Xxxxxxx
Xxxxx. No license is granted to Licensee to calculate the Xxxxxxx US Indexes.
10.3 Each of XXXXXXX and Licensee retains the right to require that a Licensed Derivative
Product be delisted if continued listing of it on the Licensed Exchange would violate the rules of
Licensee, the Commodity Futures Trading Commission (“CFTC”), the Securities and Exchange Commission
(the “SEC”) or any other applicable governmental standards in the Territory.
10.4 XXXXXXX and Licensee shall jointly select the ticker symbol for each of the
Licensed Derivative Products that is currently listed or that will be traded on more than one
exchange. Licensee may, with the prior consent of XXXXXXX, which consent will not be
unreasonably withheld or delayed, choose the ticker symbol for other Licensed Derivative
Products that are not currently listed and that will be exclusively traded on the Licensed
Exchange.
10.5 XXXXXXX acknowledges that Licensee is and shall be the owner of the order, quotation,
trade, position, and other data and contents of all data bases resulting from Licensee’s systems,
and all information extracted or derived therefrom. XXXXXXX shall be entitled to access and use
such data for its own internal use only subject to applicable provisions of the Commodity Exchange
Act and the Rules of the Licensee and applicable Exhibit A Affiliate but shall not redistribute the
same without the written consent of Licensee. No express or implied licenses are intended to be
granted hereunder to XXXXXXX and none shall be inferred. All rights herein are reserved by
Licensee.
10.6 The parties agree to work in good faith to launch the global index products as described
in Exhibit E attached hereto and to enter into a definitive agreement with respect to the launch of
the global index products described in Exhibit E within one month from the Effective Date.
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11. Indemnification.
11.1 XXXXXXX will defend, indemnify, and hold harmless Licensee, the Licensed Exchange
(including the Exhibit A Affiliates), and its and their respective officers, directors,
employees, and agents against any and all claims, demands, actions, suits, or proceedings
(including the reasonable costs of defense inclusive of attorneys’ fees) to the extent arising
from (i) any third party claim asserting that any Xxxxxxx US Index or Xxxxxxx Xxxx when properly
used by Licensee hereunder infringes the patent, copyright, trade secret, trademark, service
xxxx, or other proprietary right (“Intellectual Property”) of any third party, and (ii) the gross
negligence or willful misconduct of XXXXXXX or its officers, directors, employees or agents.
11.2 Licensee represents and warrants that the Licensed Exchange has or will have at the
time of listing, all necessary rights to Issue and List the Licensed Derivative Products and to
promote the same, other than the rights obtained by Licensee from XXXXXXX under this Agreement.
Licensee represents and warrants that each Licensed Derivative Product Issued by it or which it
Lists on a Licensed Exchange shall be Issued and Listed strictly in accordance with all applicable
legal requirements and without violation of any third party rights. Licensee will defend,
indemnify, and hold harmless XXXXXXX and its affiliates, officers, directors, employees, and agents
against any and all claims, demands, actions, suits, or proceedings (including the reasonable costs
of defense inclusive of attorneys’ fees) to the extent arising from a breach of such warranty by
Licensee and asserting that the Issuance, Listing or trading of any Licensed Derivative Product
infringes the Intellectual Property right of any third party, violates applicable legal
requirements, or violates the rights of a third party. The indemnity contained in this Section 11.2
shall not apply to any claims, demands, actions, suits or proceedings to the extent covered by
XXXXXXX’x indemnity contained in Section 11.1 hereof.
11.3 The parties’ obligations under Sections 11.1 and 11.2 shall apply only where (a) the
party seeking indemnification promptly, and within no more than ten (10) business days of its
receipt of notice of a claim, demand, action, suit, or proceeding, gives notice thereof to the
other party; (b) the party seeking indemnification cooperates fully with the other in the defense
thereof (such cooperation does not require and is without waiver by either party of
attorney/client, work product, or other privilege); and (c) the indemnifying party has sole control
of the defense and all related settlement negotiations, provided, however, that the indemnifying
party shall not settle any claim, demand, action, suit or proceeding without the consent
of the indemnified party, which consent shall not be unreasonably withheld.
12. Limitation of Liability.
EXCEPT FOR LIABILITY RESULTING FROM XXXXXXX’X WILLFUL MISCONDUCT OR GROSS NEGLIGENCE,
LIABILITY UNDER SECTION 11 FOR DAMAGES TO A THIRD PARTY, OR LIABILITY FOR BREACH OF SECTION 16.1,
THE TOTAL AMOUNT OF XXXXXXX’X LIABILITY FOR CLAIMS OR LOSSES BASED UPON, ARISING OUT OF, RESULTING
FROM OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR BREACH OF THIS AGREEMENT, WHETHER BASED UPON
CONTRACT, TORT, WARRANTY, OR OTHERWISE, SHALL IN NO EVENT OR EVENTS EXCEED TWENTY MILLION DOLLARS
($20,000,000). THE ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT XXXXXXX’X LIABILITY
UNDER THIS AGREEMENT. LICENSEE UNDERSTANDS AND AGREES THAT THIS LIMITATION REFLECTS A NEGOTIATED
AND REASONABLE ALLOCATION OF RISK GIVEN THE FEES AND THE COMMERCIAL REALITIES OF THE TRANSACTION.
13. Consequential Damages.
EXCEPT FOR LIABILITY RESULTING FROM THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF A PARTY
LIABILITY UNDER SECTION 11 FOR DAMAGES TO A THIRD PARTY, OR LIABILITY FOR BREACH OF SECTION
16.1, " NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, ANY SUBLICENSEE, OR
ANY OTHER PERSON OR ENTITY FOR ANY LOST PROFITS, ANTICIPATED PROFITS, LOSS BY REASON OF SHUTDOWN
IN OPERATION OR INCREASED EXPENSES OF OPERATION, LOSS OF GOODWILL, OR ANY CONSEQUENTIAL,
INCIDENTAL, INDIRECT, PUNITIVE, OR SPECIAL DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
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14. Force Majeure. Notwithstanding any other term or condition of this Agreement,
neither XXXXXXX nor Licensee shall be obligated to perform or observe its obligations undertaken
in this Agreement if prevented or hindered from doing so by any circumstances beyond its control,
including, without limitation, acts of God, perils of the sea and air, fire, flood, drought, war,
explosion, sabotage, terrorism, embargo, civil commotion, acts of any governmental body, supplier
delays, communications, or power failure, equipment or software malfunction, and labor disputes.
15. Trading by XXXXXXX Employees. Employees of XXXXXXX who are involved in the composition,
computation, method of stock selection or data collection for the Xxxxxxx US Indexes shall be
expressly prohibited by XXXXXXX from trading any Licensed Derivative Product based on a Xxxxxxx US
Index. XXXXXXX shall adopt such reasonable and appropriate procedures as are customary in the
financial services industry to attempt to ensure that neither it, its affiliates nor its employees
shall take advantage of, or communicate to any other person, any knowledge concerning changes in
the composition of the Xxxxxxx US Indexes before such information is made publicly available, and
to ensure that prior to the time that such information is made publicly available, it shall be
disseminated on a need-to-know basis only or pursuant to XXXXXXX’x contractual obligations to its
clients.
16. Confidentiality.
16.1 Each party shall treat as confidential and shall not disclose or transmit to any third
party, other than an officer, director or employee of the party who needs to know such information
in order for the party to enter into this contract or fulfill its obligations hereunder, any
documentation or other written materials that are marked as confidential and proprietary by the
providing party (“Confidential Information”). In fulfilling its confidentiality obligations, each
party shall use a reasonable standard of care, at least the same standard of care which it uses to
protect its own similar confidential or proprietary information. The specific terms of this
Agreement shall be treated as Confidential Information. Confidential Information shall not include
(i) any information that is or becomes available to the public or to the receiving party hereunder
from sources other than the providing party (provided that such source is not subject to a
confidentiality agreement with regard to such information) or (ii) any information that is
independently developed by the receiving party without use of or reference to information from the
providing party. Notwithstanding the foregoing, either party may reveal Confidential Information to
any regulatory agency or court of competent country if such information to be disclosed is (a)
approved in writing by the other party for such disclosure or (b) required by law, regulatory
agency or court order to be disclosed by a party, provided, if permitted by law, that prior written
notice of such required disclosure is given to the other party and provided further that the
providing party shall cooperate with the other party to limit the extent of such disclosure. The
provisions of this Section 16 shall survive for a period of five (5) years following the end of the
Term.
16.2 If and to the extent that Licensee demonstrates to XXXXXXX that data underlying the
Xxxxxxx US Indexes must be submitted by or for Licensee to a governmental regulatory agency, any
commodity self-regulatory organization or to the Intermarket Surveillance Group (“ISG”), for
compliance or surveillance purposes, XXXXXXX will make the relevant data available to such agency
or group, provided that the Licensee assists and cooperates with XXXXXXX to limit the scope of such
disclosure to the extent permissible and to impose and comply with all protective or similar orders
and confidentiality protections that may be available in the circumstances.
17. Termination.
17.1 Either party may elect, without prejudice to any other rights or remedies, to terminate
this Agreement or the Term of any affected Licensed Derivative Product, upon 30 days written notice
if the
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other party has materially breached this Agreement and fails to cure such breach within such
30-day period.
17.2 Either party may elect, without prejudice to any other rights or remedies, to terminate
this Agreement or the Term of any affected Licensed Derivative Product without notice, if a
petition in bankruptcy has been filed by (upon 60 days notice with an opportunity to cure within
the stated period if a petition has been filed against the other party), or the other party has
made an assignment for the benefit of creditors, or a receiver has been appointed for the other
party or any substantial portion of other party’s property, or the other party’s or its officers or
directors takes action approving or makes an application for any of the above.
17.3 XXXXXXX may elect, without prejudice to any other rights or remedies, to terminate the
Term of any affected Licensed Derivative Products if XXXXXXX reasonably believes that such Licensed
Derivative Product is illegal or has been illegally Issued, or if the Licensee or any Authorized
Trader does not have the power to Issue or to List such Licensed Derivative Products which it has
or is attempting to Issue and/or List, provided that XXXXXXX shall not do so without consulting
with Licensee and affording Licensee reasonable opportunity to demonstrate that Licensee has the
power to List and Trade such Licensed Derivative Product.
17.4 Sections 5 and 6 (each for the sole purpose of the parties’ continuing obligations during
the Closing Period), and sections 7, 9, 10, 11, 12, 13, 14, 16, 18 through 25 of this Agreement
shall survive and continue to bind the parties after the cancellation, termination, or rescission
of this Agreement.
18. Restrictions on Assignment. Licensee shall not assign, transfer, sublicense or delegate
this Agreement and any rights or obligations hereunder without the other party’s prior written
consent, which shall not be unreasonably withheld or delayed, except that Licensee can assign,
transfer, sublicense or delegate to the Licensed Exchange (including any Exhibit A Affiliate)
provided however that Licensee shall not be relieved of its obligations hereunder. The parties
hereby acknowledge, agree and confirm that they will each give due regard to the value and
importance of the exclusivity provided in this Agreement and the value in allowing the transfer of
each party’s rights and obligations under this Agreement when asked to consent to an assignment,
transfer, sublicense or delegation.
19. Relationship of the Parties. Nothing in this Agreement, express or implied, is
intended to or shall confer on any person other than the parties hereto, or their respective
permitted successors or assigns, any rights or remedies under or by reason of this Agreement.
The parties are independent contractors under this Agreement and nothing herein or in their
performance hereunder shall constitute either of the parties as a partner or participant in a
joint venture, or as an agent of the other party.
20. Entire Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes all prior negotiations, communications,
writings, and understandings.
21. Governing Law. This Agreement shall be interpreted, construed and enforced in accordance
with the laws of the State of New York, without reference to its principles of conflicts of laws.
Any action, suit or proceeding with respect to any matter arising out of or related to this
Agreement, if commenced by Licensee, shall be commenced in the United States District Court for the
Western District of Washington in Seattle, or, if no federal country exists, then in the Superior
Court of King County, Washington, and if commenced by XXXXXXX, shall be commenced in the United
States District Court for the Southern District of New York, or if no federal country exists, then
in the Supreme Court of the State of New York, New York County. Licensee hereby agrees to submit to
the country of such courts and to
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waive any objections based on venue in any such action, suit or proceeding. No party may bring
any action pertaining to this Agreement more than three years after the event giving rise to such
action has occurred.
22. Notices. All notices, invoices, and other communications under this Agreement shall be
given in writing (including by facsimile transmission in which an acknowledgement of receipt is
returned electronically) and shall be deemed to have been duly given upon actual receipt by the
parties, or upon constructive receipt if sent by certified mail, return receipt requested (as of
the date of signature or of first refusal of the return receipt), or by such facsimile
transmission. All such notices shall be directed to the respective addresses stated below or to
such other address as any party hereto shall hereafter specify by written notice to the other
party:
to Licensee: | Intercontinental-Exchange, Inc. 0000 XxxxxXxxx Xxxxxxx, Xxxxx 000 Xxxxxxx, XX 00000 Fax: 000-000-0000 Attn: President, Chief Operating Officer cc: General Counsel (excluding invoices) |
|||
With a copy to | NYBOT Xxx Xxxxx Xxx Xxxxxx Xxx Xxxx, XX 00000 Fax: 000-000-0000 Attn: President, Chief Operating Officer cc: General Counsel |
|||
to XXXXXXX: | Xxxxx Xxxxxxx Company 000 X Xxxxxx |
|||
Xxxxxx, Xxxxxxxxxx 00000 | ||||
Fax: (000) 000-0000 | ||||
Attn: Xxxxx Xxxxxxxx | ||||
cc: General Counsel (excluding invoices) |
23. Amendment. Except as otherwise provided herein, no provision of this Agreement may be
amended, modified, or waived, unless by an instrument in writing executed by a duly authorized
officer of the party against whom enforcement of such amendment, modification, or waiver is
sought.
24. Waiver. No failure on the part of XXXXXXX or Licensee to exercise, no delay in
exercising, and no course of dealing with respect to any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right, power, or privilege preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege under this Agreement.
25. Severability. If any of the provisions of this Agreement, or application thereof to any
person or circumstance, shall to any extent be held invalid or unenforceable, the remainder of this
Agreement, or the application of such terms or provisions to persons or circumstances other than
those as to which they are held invalid or unenforceable, shall not be affected thereby and each
such term and provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
26. HSR Act Filings. Each party and their respective board of directors and employees shall
grant such approvals and take such actions as are necessary so that the Agreement may be
consummated as
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promptly as practicable on the terms contemplated. Licensee shall pay the filing fees due
under the HSR Act.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date contained in
the signature block for each party below. Each of the persons signing this Agreement affirms
that he or she is duly authorized to do so and thereby binds the indicated entity. This
Agreement may be executed in counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
XXXXX XXXXXXX COMPANY
|
INTERCONTINENTALEXCHANGE, INC. | |||
/s/ P. Xxxxx Xxxxxx
|
/s/ Xxxxxxx X. Xxxxxxxx
|
|||
President & Chief Executive Officer
|
Chairman and Chief Executive Officer | |||
Date: June 16, 2007
|
Date: June 16, 2007 |
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EXHIBIT A
The Licensed Exchange:
Each of Board of Trade of the City of New York, Inc. (a Delaware Corporation) and the
Exhibit A Affiliates identified herein.
“Exhibit A Affiliates”:
New York Futures Exchange, Inc.
ICE Futures.
Board of Trade of the City of Chicago, Inc. (“CBOT”), if and only if a merger or other
business combination is consummated between Licensee and CBOT Holdings, Inc., resulting
in the establishment and maintenance of a similar affiliate relationship between Licensee
and the CBOT.
Any exchange Licensee owns or controls.
Territory and territorial restrictions:
World wide.
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EXHIBIT B
The Licensed Derivative Products
Cash settled futures and options on futures on the following Xxxxxxx US Indexes
Xxxxxxx 1000® Index
Xxxxxxx 1000® Growth Index
Xxxxxxx 1000® Value Index
Xxxxxxx 2000® Index
Xxxxxxx 2000® Growth Index
Xxxxxxx 2000® Value Index
Xxxxxxx 2500TM Index
Xxxxxxx 2500TM Growth Index
Xxxxxxx 2500TM Value Index
Xxxxxxx 3000® Index
Xxxxxxx 3000® Growth Index
Xxxxxxx 3000® Value Index
Xxxxxxx Xxxxxx® Index
Xxxxxxx Midcap® Growth Index
Xxxxxxx Xxxxxx® Value Index
Xxxxxxx Top 200® Index
Xxxxxxx Top 200® Growth Index
Xxxxxxx Top 200® Value Index
Xxxxxxx Xxxxx Cap Completeness® Index
Xxxxxxx Xxxxx Cap Completeness® Growth Index
Xxxxxxx Xxxxx Cap Completeness® Value Index
Xxxxxxx Top 50® Index
Xxxxxxx Microcap® Index
Xxxxxxx Microcap® Growth Index
Xxxxxxx Microcap® Value Index
Xxxxxxx 3000E™ Index
Xxxxxxx 1000® Growth Index
Xxxxxxx 1000® Value Index
Xxxxxxx 2000® Index
Xxxxxxx 2000® Growth Index
Xxxxxxx 2000® Value Index
Xxxxxxx 2500TM Index
Xxxxxxx 2500TM Growth Index
Xxxxxxx 2500TM Value Index
Xxxxxxx 3000® Index
Xxxxxxx 3000® Growth Index
Xxxxxxx 3000® Value Index
Xxxxxxx Xxxxxx® Index
Xxxxxxx Midcap® Growth Index
Xxxxxxx Xxxxxx® Value Index
Xxxxxxx Top 200® Index
Xxxxxxx Top 200® Growth Index
Xxxxxxx Top 200® Value Index
Xxxxxxx Xxxxx Cap Completeness® Index
Xxxxxxx Xxxxx Cap Completeness® Growth Index
Xxxxxxx Xxxxx Cap Completeness® Value Index
Xxxxxxx Top 50® Index
Xxxxxxx Microcap® Index
Xxxxxxx Microcap® Growth Index
Xxxxxxx Microcap® Value Index
Xxxxxxx 3000E™ Index
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EXHIBIT C
Licensee Promotional and Marketing Efforts
List and display the Licensed Derivative Products and definitions of the Licensed Derivative
Products prominently on the Licensee’s web site, corporate communications, newsletters, press
releases, and various media sources.
Make reasonable effort to list and display the Licensed Derivative Products on parent company (if
any) and partner web sites and signage.
Develop and hold seminars in support of the Licensed Derivative Products with invitations to
XXXXXXX to participate.
Attend and sponsor industry conferences for marketing and sales for the Licensed Derivative
Products.
Develop and provide prominent marketing materials to utilize various external electronic,
television, radio and/or print media sources.
As directed by XXXXXXX, use XXXXXXX’x logos, names or other registered marks associated with the
Licensed Derivative Product.
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EXHIBIT D
Fees
1. | Upon the Effective Date of this Agreement, Licensee shall pay XXXXXXX a one-time fee of Fifty Million Dollars ($50,000,000), payable on or before July 1, 2007, in cash or by wire transfer to an account designated in writing for this purpose by XXXXXXX. | |
2. | Contract Royalties | |
Contract royalties with respect to the first twelve month period following the Effective Date and with respect to any twelve month period from the Effective Date (if any) during the Term following 2014 shall be equal to the sum of all contract royalties based on actual contracts traded, as described below. Contract royalties with respect to each twelve month period following the first twelve month period following the Effective Date and during the Initial Term shall be the greater of (i) the minimum set forth below for such period; or (ii) the sum of all contract royalties based on actual contracts traded. Minimum contract royalties will be payable by Licensee to XXXXXXX quarterly (i.e., in an amount equal to 25% of the minimum annual contract royalties as set forth in paragraph 3 below); any contract royalties accruing above the minimum amount shall be reconciled, invoiced and payable within 30 days after the end of the fourth quarter of each one year period. | ||
Xxxxxxx 1000 Index Contract Royalties: |
A. | With respect to the first 0 to 100,000 contracts: |
(i) | Each contract traded with a multiplier between one dollar ($1) and one hundred dollar ($100.00) — $[**] per contract | ||
(ii) | Each contract traded with a multiplier between one hundred and one dollars ($101.00) and five hundred dollar ($500.00) — $[**] per contract | ||
(iii) | Each contract traded with a multiplier greater than five hundred dollars — A ratio of $[**] per $500 per contract (e.g., if the multiplier is $1,000, the royalty would be $[**] per contract) |
B. | With respect to the contract 100,001 and above: |
(i) | Each contract traded with a multiplier between one dollar ($1) and one hundred dollar ($100.00) — $[**] per contract | ||
(ii) | Each contract traded with a multiplier between one hundred and one dollars ($101.00) and five hundred dollar ($500.00) — $[**] per contract | ||
(iii) | Each contract traded with a multiplier greater than five hundred dollars — A ratio of $[**] per $500 per contract (e.g., if the multiplier is $1,000, the royalty would be $[**] per contract) |
All Xxxxxxx US Indexes Except Xxxxxxx 1000 Index Contract Royalties: |
A. | With respect to the first 0 to 100,000 contracts: |
(i) | Each contract traded with a multiplier between one dollar ($1) and one hundred dollar ($100.00) — $[**] per contract | ||
(ii) | Each contract traded with a multiplier between one hundred and one dollars ($101.00) and five hundred dollar ($500.00) — $[**] per contract |
** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(iii) | Each contract traded with a multiplier greater than five hundred dollars — A ratio of $[**] per $500 per contract (e.g., if the multiplier is $1,000, the royalty would be $[**] per contract) |
B. | With respect to the contract 100,001 and above: |
(i) | Each contract traded with a multiplier between one dollar ($1) and one hundred dollar ($100.00) — $[**] per contract | ||
(ii) | Each contract traded with a multiplier between one hundred and one dollars ($101.00) and five hundred dollar ($500.00) — $[**] per contract | ||
(iii) | Each contract traded with a multiplier greater than five hundred dollars—A ratio of $[**] per $500 per contract (e.g., if the multiplier is $1,000, the royalty would be $[**] per contract) |
3. | Minimum annual contract royalties (cumulative over all Licensed Derivative Products: |
First twelve calendar months following Effective Date: |
$ | [**] | ||
Next twelve calendar months |
[**] | |||
Next twelve calendar months |
[**] | |||
Next twelve calendar months |
[**] | |||
Next twelve calendar months |
[**] | |||
Next twelve calendar months |
[**] | |||
Next twelve calendar months |
[**] |
4. | With respect to contracts traded in any twelve month period, the contract royalty rates stated in paragraph 2 above shall be reduced by a discount of thirty percent (30%) for the aggregate amount of contracts (if any) traded during a twelve month period in excess of the volume of trades in that twelve month period required to reach the minimum annual contract royalties stated in paragraph 3 above for that twelve month period (i.e., if in the first twelve months following the Effective Date, the aggregate amount of contracts traded results in payments to XXXXXXX of greater than $ [**] (which is the minimum annual contract royalty), the amount of contract royalties Licensee owes XXXXXXX for each contract above the contract volume that exceeded the payment of $ [**] will be discounted by 30%. |
** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT E
Global Index Licensed Derivative Product Launch
Licensee agrees to use good faith efforts to launch a Licensed Derivative Product on at
least two of the Xxxxxxx Global Indexes as listed on Xxxxxxx.xxx, within 24 months of the
Effective Date of this Agreement pursuant to a separate license agreement for such Licensed
Derivative Product between Xxxxxxx and Licensee.
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