(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
Or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
(State or other jurisdiction of incorporation or organization) |
58-2555670
(IRS Employer Identification Number) |
|
2100 RiverEdge Parkway,
Suite 500, Atlanta, Georgia (Address of principal executive offices) |
30328
(Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $0.01 par value per share
|
New York Stock Exchange |
Large accelerated filer
þ
|
Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
i
57
67
145
146
IntercontinentalExchange, ICE,
we, us, our, our
company and our business refer to
IntercontinentalExchange, Inc. and its consolidated subsidiaries.
ICE Futures Europe refers to our wholly-owned
subsidiary, which, prior to September 3, 2007, operated as
ICE Futures and which, prior to October 25, 2005, operated
as the International Petroleum Exchange of London, Ltd., or the
IPE.
ICE Futures U.S. refers to our wholly-owned
subsidiary that we acquired on January 12, 2007, which,
prior to our acquisition, operated as the Board of Trade of the
City of New York, Inc., or NYBOT, a member-owned
not-for-profit
corporation, and, after our acquisition, operated as the Board
of Trade of the City of New York, Inc., a wholly-owned
subsidiary of IntercontinentalExchange. On September 3,
2007, we renamed NYBOT ICE Futures U.S. ICE
Clear U.S. refers to ICE Futures U.S.s wholly-owned
clearing subsidiary, which previously operated as the New York
Clearing Corporation, or NYCC.
ICE Futures Canada refers to our wholly-owned
subsidiary that we acquired on August 27, 2007 and which
previously operated as the Winnipeg Commodity Exchange, Inc, or
the WCE. ICE Clear Canada refers to ICE Futures
Canadas wholly-owned clearing subsidiary, which previously
operated as WCE Clearing Corporation, or WCECC.
our expectations regarding the business environment in which we
operate and trends in our industry, including increasing
competition, consolidation and trading volumes;
conditions in global financial markets;
our ability to identify and effectively pursue acquisitions and
strategic alliances and successfully integrate the companies we
acquire;
our ability to minimize the risks associated with operating
multiple clearing houses in multiple jurisdictions;
the impact of any changes in domestic and foreign regulations or
government policy, including any changes or reviews of
previously issued regulations and policies;
our initiative to establish a credit derivatives clearing house
to clear credit default swaps;
1
Table of Contents
our ability to keep pace with rapid technological developments
and to ensure that the technology we utilize is not vulnerable
to security risks;
the accuracy of our cost estimates and expectations;
our belief that cash flows will be sufficient to service our
debt and fund our working capital needs and capital
expenditures, at least through the end of 2010;
our ability, on a timely and cost-effective basis, to offer
additional products and services, leverage our risk management
capabilities and enhance our technology;
our ability to maintain existing market participants and attract
new ones;
our ability to protect our intellectual property rights,
including the costs associated with such protection, and our
ability to operate our business without violating the
intellectual property rights of others;
potential adverse litigation results; and
our belief in the soundness of our electronic platform and
disaster recovery system technologies, as well as our ability to
gain access on a timely and cost-effective basis to comparable
products and services if our key technology contracts were
terminated.
ITEM 1.
BUSINESS
2
Table of Contents
3
Table of Contents
4
Table of Contents
liquid, diverse global markets and benchmark contracts;
diverse and complementary risk management products and services;
widely-distributed, leading edge technology for trading and risk
management;
market transparency and efficient access to futures and OTC
markets;
geographic and product diversity with multiple regulated
exchanges and clearing houses, and global OTC markets; and
innovative, customer-focused management with a focus on growth.
5
Table of Contents
Year Ended December 31,
2008
2007
2006
Number of
Notional
Number of
Notional
Number of
Notional
Contracts
Value
Contracts
Value
Contracts
Value
(In thousands)
(In billions)
(In thousands)
(In billions)
(In thousands)
(In billions)
68,368
$
6,771.3
59,729
$
4,293.2
44,346
$
2,936.2
51,092
5,210.4
51,388
3,727.2
28,673
1,919.4
28,805
2,637.2
24,510
1,582.8
18,290
1,071.6
36,437
492.5
26,251
289.9
17,054
1,201.7
336
79.4
(1)
Trading commenced in February 2006.
(2)
Sugar No. 11 futures and options trade on ICE Futures U.S.,
which was acquired in January 2007.
(3)
Russell index futures and options began trading exclusively on
ICE Futures U.S. in September 2008.
Year Ended December 31,
2008
2007
2006
Number of
Notional
Number of
Notional
Number of
Notional
Contracts
Value
Contracts
Value
Contracts
Value
(In thousands)
(In billions)
(In thousands)
(In billions)
(In thousands)
(In billions)
228,544
$
4,531.3
157,956
$
2,705.6
121,047
$
2,289.3
10,085
533.7
8,331
394.2
6,014
284.7
8,334
443.8
8,471
305.9
3,772
116.3
6
Table of Contents
7
Table of Contents
attract new market participants;
offer additional markets and services across futures and OTC
markets;
leverage our extensive risk management capabilities;
continue to enhance our technology infrastructure and increase
connectivity; and
pursue select strategic opportunities.
8
Table of Contents
9
Table of Contents
10
Table of Contents
11
Table of Contents
12
Table of Contents
13
Table of Contents
14
Table of Contents
Year Ended December 31,
2008
2007
2006
10
10
7
1,246
1,041
990
31,715
23,780
17,540
15
Table of Contents
16
Table of Contents
17
Table of Contents
18
Table of Contents
19
Table of Contents
20
Table of Contents
21
Table of Contents
22
Table of Contents
Order Routing
The order routing specification
is based on the industry standard Financial Information
eXchange, or FIX, protocol. The FIX message specification is
fully compliant with the standard protocol.
Market Data
we offer a light weight,
technology platform independent market data feed called iMpact.
This feed provides full depth of book and can be used by both
trading clients and Quote vendors.
Trade Capture
We currently offer a java and
FIX based API to capture all trades done by a given company
which can be used by firms to manage position and risk of their
participants.
OTC
For OTC energy products that have complex
bilateral and cleared trading requirements, we offer a
Java-based API which can be used to trade these products on the
trading platform.
23
Table of Contents
depth and liquidity of markets;
price transparency;
reliability and speed of trade execution and processing;
technological capabilities and innovation;
breadth of product range;
rate and quality of new product developments;
quality of service;
distribution and ease of connectivity;
24
Table of Contents
mid- and back-office service offerings, including differentiated
and value-added services;
transaction costs; and
reputation.
25
Table of Contents
26
Table of Contents
27
Table of Contents
28
Table of Contents
report to the CFTC certain information regarding transactions in
products that are subject to the CFTCs jurisdiction and
that meet certain specified trading volume levels;
report to the CFTC certain large trader position information for
our cleared OTC natural gas markets pursuant to special calls
issued by the CFTC; and
record and report to the CFTC complaints that we receive of
alleged fraud or manipulative trading activity related to
certain of our products.
29
Table of Contents
30
Table of Contents
Futures:
A future is a standardized contract
to buy or sell a specified quantity of an underlying asset
during a particular month (an exact delivery date or a range of
dates will be specified). Contract sizes are standardized and
differ by product. For example, the ICE Brent Crude futures
contract has a
31
Table of Contents
contract quantity of 1,000 net barrels, or 42,000
U.S. gallons. The price of the futures contract is
determined through the auction process on the exchange. Futures
contracts are settled through either physical delivery or cash
settlement, depending on the contract specification.
Options:
An option is a contract that conveys
to the buyer the right, but not the obligation, to call (buy) or
put (sell) an underlying futures contract at a price determined
at the time of the execution of the option.
Continued Adoption of Electronic
Trading:
Innovations in technology have increased
the speed of communications and the availability of information,
enabling market participants to access and participate in the
markets more easily, quickly and cost efficiently. During the
last decade, the use of electronic trading has become
increasingly prevalent, and offers a number of advantages
relative to floor- or telephone-based trading. These include the
ability to offer a larger number of contracts, to increase
distribution and access via the benefits of the network
effect, as well as increased speed of information and
increased market transparency.
Increased Reliance on Derivatives Markets for Risk
Management:
The barriers to entry for
participating in derivatives markets have traditionally been
significant. However, in recent years, a considerable
32
Table of Contents
erosion of these barriers has occurred largely due to the
preference for electronic trading and the transition away from
floor-based, membership-based markets. In addition to electronic
trading, other changes in market structure contributing to lower
barriers to entry include declining exchange membership fees,
use of ISVs and the introduction of cleared OTC contracts. In
addition, many companies have increasingly sought to hedge
exposure to the risk of adverse price movements by relying on
the derivatives markets. For example, today many industrial and
commercial users of natural gas may directly access the markets
to monitor prices and hedge against adverse price movements.
Innovations in Product Development and
Clearing:
With increased reliance on the
derivatives markets for hedging, the need for new or specialized
instruments has led to the establishment of new traded markets
and product development over the past decade. For example, in
the credit markets, banks access the credit derivatives market
to hedge exposure to their credit portfolios, establishing the
credit default swap market over the past decade. Moreover, the
use of a central counterparty clearing house in previously
bilateral markets such as
over-the-counter
energy and credit markets has resulted in greater liquidity and
transparency, thereby attracting additional market participation
and product development.
New Market Participants:
In recent years, as
market access has increased and new products have been
introduced, growth in trading volumes among most asset classes
has been driven in part by diverse participation in derivatives
markets by producers, industrials, financial institutions, hedge
funds, proprietary trading firms and retail investors globally.
ITEM 1(A).
RISK
FACTORS
33
Table of Contents
regulated, diversified futures exchanges globally that offer
trading in a variety of asset classes similar to those offered
by us such as energy, agriculture, equity index and foreign
exchange;
voice brokers active in the global commodities and credit
markets;
existing and newly formed electronic trading platforms for OTC
markets;
other clearing houses;
market data and information vendors; and
possible consortiums of customers and the above listed
competitors that may pool their competitive advantages to
establish new exchanges, trading platforms or clearing
facilities.
a reduction in the number of traders that use our platform;
a reduction in trading demand by customers or a decision to
curtail or cease speculative trading;
heightened capital maintenance requirements resulting from new
regulation or mandated reductions in existing leverage;
a reduced access to capital required to fund trading activities;
significant defaults by issuers of debt leading to market
disruption or a lack of confidence in the markets ability
to process such defaults;
34
Table of Contents
increased instances of counterparty failure or
bankruptcy; or
an increase in the inability of CDS protection sellers to pay
out contractual obligations upon the occurrence of a credit
event.
economic, political and market conditions in the United States,
Europe, the Middle East and elsewhere in the world;
weather conditions, including hurricanes and other significant
weather events, that impact the production of commodities, and,
in the case of energy commodities, production, refining and
distribution facilities for oil and natural gas;
the volatility in production volume of the commodities
underlying our energy, soft agricultural and agricultural
products and markets;
35
Table of Contents
war and acts of terrorism;
legislative and regulatory changes;
credit quality of market participants;
the availability of capital;
broad trends in industry and finance, including the
consolidation in our industry;
the level and volatility of interest rates;
fluctuating exchange rates and currency values; and
concerns over inflation.
development of competing contracts, and competition generally;
reliance on technology to conduct trading;
the relative stability of commodity prices;
reduced growth in mature commodity markets;
increased availability of electronic trading on competing
contracts;
possible regulatory changes; and
adverse publicity and government investigations.
36
Table of Contents
37
Table of Contents
38
Table of Contents
39
Table of Contents
40
Table of Contents
the manner in which we communicate with and contract with our
participants;
a requirement that we impose additional position limits or
position accountability limits on our participants;
prohibitions against certain categories of participants (e.g.,
pension funds) from accessing our markets;
the demand for and pricing of our products and services;
the tax treatment of trading in our products;
a requirement that we maintain minimum regulatory capital on
hand;
a requirement that we exercise regulatory oversight of our OTC
participants, and assume responsibility for their conduct;
a requirement that we make additional reports to regulatory
authorities regarding the trading activities of our
participants, which would impact our financial and regulatory
reporting practices;
our record-keeping and record-retention procedures;
the nature and role of our self-regulatory responsibilities may
change;
our ability to launch new products or contracts since we may
need to satisfy certain regulatory obligations prior to
launching such new products or contracts.
the licensing of our employees; and
the conduct of our directors, officers, employees and affiliates.
41
Table of Contents
enhance our existing services and maintain and improve the
functionality and reliability of our electronic platform, in
particular, reducing network downtime or disruptions;
develop or license new technologies that address the
increasingly sophisticated and varied needs of our participants;
anticipate and respond to technological advances and emerging
industry practices on a cost-effective and timely basis; and
continue to attract and retain highly skilled technology staff
to maintain and develop our existing technology and to adapt to
and manage emerging technologies while attempting to keep our
employee headcount low.
42
Table of Contents
unanticipated disruption in service to our participants;
slower response time and delays in our participants trade
execution and processing;
failed settlement by participants to whom we provide trade
confirmation or clearing services;
incomplete or inaccurate accounting, recording or processing of
trades;
our distribution of inaccurate or untimely market data to
participants who rely on this data in their trading
activity; and
financial loss.
geopolitical events;
weather;
real and perceived supply and demand imbalances in the
underlying commodities;
43
Table of Contents
regulatory considerations;
the availability of capital;
the number of trading days in a quarter; and
seasonality.
44
Table of Contents
45
Table of Contents
46
Table of Contents
47
Table of Contents
48
Table of Contents
ITEM 1(B).
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
49
Table of Contents
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 4(A).
EXECUTIVE
OFFICERS OF INTERCONTINENTALEXCHANGE, INC.
53
Chairman of the Board and Chief Executive Officer
45
President and Chief Operating Officer
41
Chief Financial Officer and Senior Vice President
48
Senior Vice President, Chief Strategic Officer
41
Chief Technology Officer and Senior Vice President
43
Senior Vice President, General Counsel and Corporate Secretary
43
President and Chief Operating Officer, ICE Futures Europe
33
President and Chief Operating Officer, ICE Futures U.S.
52
President and Chief Operating Officer, Creditex
50
Table of Contents
51
Table of Contents
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
52
Table of Contents
Common Stock Market Price
High
Low
$
167.00
$
108.15
$
162.47
$
120.56
$
174.15
$
117.25
$
194.92
$
151.76
$
193.87
$
110.25
$
167.28
$
113.99
$
116.39
$
61.00
$
92.98
$
49.69
Number of Securities
Number of
Available for Future
Securities to be Issued
Issuance Under Equity
Upon Exercise of
Weighted Average
Compensation Plans
Outstanding Options
Exercise Price of
(Excluding Securities
and Rights
Outstanding Options
Reflected in Column (a))
(a)
(b)
(c)
2,079,320
(1)
$
49.06
(1)
948,601
1,755,264
(2)
$
26.86
(2)
1,121,034
3,834,584
$
36.83
(1)(2)
2,069,635
(1)
The 2000 Stock Option Plan was approved by our stockholders in
June 2000 and the 2005 Equity Incentive Plan was approved by our
stockholders in June 2005. Of the 2,079,320 securities to be
issued upon exercise of outstanding options and rights,
1,103,158 are options with a weighted average exercise price of
$49.06 and the remaining 976,162 securities are restricted stock
shares that do not have an exercise price.
(2)
This category includes the 2003 Directors Plan, the 2004
Restricted Stock Plan and the Creditex 1999 Stock Options/Stock
Issuance Plan. Of the 1,755,264 securities to be issued upon
exercise of outstanding options and rights, 1,360,257 are
options with a weighted average exercise price of $26.86 and the
remaining 395,007 securities are restricted stock shares that do
not have an exercise price. For more information concerning
these plans, see note 10 to our consolidated financial
statements and related notes that are included elsewhere in this
Annual Report on
Form 10-K.
53
Table of Contents
ITEM 6.
SELECTED
FINANCIAL DATA
Year Ended December 31,
2008(1)
2007(1)
2006
2005
2004
(In thousands, except for per share data)
$
693,229
$
490,358
$
273,629
$
136,976
$
90,906
102,944
70,396
34,236
14,642
12,290
16,905
13,539
5,934
4,247
5,218
813,078
574,293
313,799
155,865
108,414
159,792
101,397
49,750
35,753
30,074
29,705
23,047
11,395
10,124
12,312
1,705
9,039
1,491
32
11,121
67,800
50,759
25,266
17,395
16,578
4,814
15,000
62,247
32,701
13,714
15,083
17,024
319,544
220,730
109,164
99,660
76,020
493,534
353,563
204,635
56,205
32,394
(20,038
)
4,871
7,908
3,790
1,328
473,496
358,434
212,543
59,995
33,722
172,524
117,822
69,275
19,585
11,773
$
300,972
$
240,612
$
143,268
$
40,410
$
21,949
(61,319
)
$
300,972
$
240,612
$
143,268
$
(20,909
)
$
21,949
$
4.23
$
3.49
$
2.54
$
(0.39
)
$
0.42
$
4.17
$
3.39
$
2.40
$
(0.39
)
$
0.41
71,184
68,985
56,474
53,218
52,865
72,164
70,980
59,599
53,218
53,062
54
Table of Contents
(1)
We acquired several companies during the years ended
December 31, 2008 and 2007 and have included the financial
results of these companies in our consolidated financial
statements effective from the respective acquisition dates
forward. Refer to note 3 to our consolidated financial
statements and related notes, which are included elsewhere in
this Annual Report on
Form 10-K,
for more information on these acquisitions.
(2)
Includes revenues from related parties generated in the ordinary
course of our business. For a presentation and discussion of our
revenues attributable to related parties for the years ended
December 31, 2008, 2007 and 2006, see our consolidated
statements of income and note 12 to our consolidated
financial statements that are included elsewhere in this Annual
Report on
Form 10-K.
Our transaction and clearing fees are presented net of rebates.
For a discussion of these rebates, see Item 7
Managements Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in
this Annual Report on
Form 10-K.
(3)
In 2007, we incurred $11.1 million in transaction costs
directly relating to the proposed merger with CBOT Holdings,
Inc., or CBOT. We did not succeed in our proposed merger with
CBOT and the Chicago Mercantile Exchange completed its
acquisition of CBOT in July 2007. These costs are classified as
CBOT merger-related transaction costs in the
accompanying consolidated statement of income for the year ended
December 31, 2007. See note 17 to our consolidated
financial statements and related notes that are included
elsewhere in this Annual Report on
Form 10-K.
(4)
The financial results for the years ended December 31, 2008
and 2007 include $13.2 million and $15.5 million,
respectively, in interest expense on our outstanding
indebtedness and $6.0 million and $3.1 million,
respectively, in interest expense relating to the Russell
Licensing Agreement. The financial results for the year ended
December 31, 2007 include a gain on disposal of an asset of
$9.3 million. Refer to notes 7, 9 and 15 to our
consolidated financial statements and related notes, which are
included elsewhere in this Annual Report on
Form 10-K,
for more information on these items.
(5)
We have an 8% equity ownership in the National Commodity and
Derivatives Exchange, Ltd, or NCDEX, a derivatives exchange
located in Mumbai, India, which we acquired for
$37.0 million in 2006. The NCDEX investment is classified
as a cost method investment. The financial results for the year
ended December 31, 2008 include an impairment loss on the
NCDEX cost method investment of $15.7 million, which was
recorded as other expense. For additional information, refer to
note 6 to our consolidated financial statements and related
notes, which are included elsewhere in this Annual Report on
Form 10-K.
Excluding this charge, net of taxes, our consolidated net income
for the year ended December 31, 2008 would have been
$312.2 million and basic and diluted earnings per share
would have been $4.39 and $4.33, respectively. See Item 7
Managements Discussion and Analysis of Financial
Condition and Results of Operations
Non-GAAP Financial Measures included elsewhere is
this Annual Report on
Form 10-K.
(6)
In connection with our formation, we granted a put option to
Continental Power Exchange, Inc., an entity controlled by our
Chairman and Chief Executive Officer, Jeffrey C. Sprecher. The
put option would have required us under certain circumstances to
purchase Continental Power Exchange, Inc.s equity interest
in our business at a purchase price equal to the greater of the
fair market value of the equity interest or $5 million. We
initially recorded the redeemable stock put at the minimum
$5 million redemption threshold. We adjusted the redeemable
stock put to its redemption amount at each subsequent balance
sheet date. Adjustments to the redemption amount were recorded
to retained earnings or, in the absence of positive retained
earnings, additional paid-in capital. In October 2005, we
entered into an agreement with Continental Power Exchange, Inc.
to terminate the redeemable stock put upon the closing of our
initial public offering of common stock in November 2005. We
increased the redeemable stock put by $61.3 million during
the year ended December 31, 2005 resulting from an increase
in the estimated fair value of our common stock from $8.00 per
share as of December 31, 2004 to $35.90 per share as of
November 21, 2005, the closing date of our initial public
offering of common stock and the termination date of the
redeemable stock put. The balance of the redeemable stock put on
November 21, 2005 was $78.9 million and was
reclassified to additional paid-in capital upon its termination.
In connection with the termination of the put option, we amended
certain registration rights previously granted to Continental
Power
55
Table of Contents
Exchange, Inc. pursuant to which we may be obligated to pay the
expenses of registration, including underwriting discounts up to
a maximum of $4.5 million.
(7)
The impact of outstanding stock options is considered to be
antidilutive in the calculation of diluted earnings per share
when a net loss available to common shareholders is reported.
Our outstanding stock options have not been included in the
computation of diluted earnings per share for the year ended
December 31, 2005 due to the $20.9 million net loss
available to common shareholders as a result of the
$61.3 million charged to retained earnings related to the
redeemable stock put adjustments. Therefore, our diluted
earnings per share are computed in the same manner as basic
earnings per share for the year ended December 31, 2005.
As of December 31,
2008
2007
2006
2005
2004
(In thousands)
$
283,522
$
119,597
$
204,257
$
20,002
$
61,199
3,419
140,955
77,354
111,181
5,700
12,117,820
792,052
12,552,588
1,142,094
340,917
164,015
100,042
88,952
63,524
26,280
20,348
19,364
2,163,671
1,547,409
81,126
76,054
86,075
14,959,581
2,796,345
493,211
265,770
207,518
12,117,820
792,052
12,311,642
910,961
37,899
26,394
34,440
379,375
221,875
25,000
2,006,231
1,476,856
454,468
232,623
132,149
(1)
We received net proceeds from our initial public offering of our
common stock in November 2005 of $60.8 million, after
deducting the underwriting discount. We invested a portion of
this cash in short-term investments. Due to the adverse
conditions in the credit markets, in 2008 we decided to shift
more of our funds into cash equivalent investments as compared
to short-term investments.
(2)
Clearing members of ICE Clear Europe, ICE Clear U.S. and ICE
Clear Canada are required to deposit original margin and
variation margin and to make deposits to a guaranty fund. The
cash deposits made to these margin accounts and to the guaranty
fund are recorded in the consolidated balance sheet as current
assets with offsetting current liabilities to the clearing
members that deposited them. ICE Clear Europe began clearing
contracts in November 2008 upon the transition of clearing from
LCH.Clearnet Ltd. See note 14 to our consolidation
financial statement and related notes that are included
elsewhere in this Annual Report on
Form 10-K.
(3)
The increase in the goodwill and intangible assets in 2008
primarily relates to the acquisition of Creditex Group Inc. in
August 2008. The increase in the goodwill and other intangible
assets in 2007 primarily relates to the acquisition of ICE
Futures U.S. in January 2007. See notes 3 and 8 to our
consolidation financial statements and related notes that are
included elsewhere in this Annual Report on
Form 10-K.
(4)
We borrowed $250.0 million in a senior unsecured credit
facility in connection with the purchase of ICE Futures U.S. in
January 2007 and we borrowed an additional $195.0 million
in 2008 in connection with our stock repurchases. See
note 9 to our consolidation financial statements and
related notes that are included elsewhere in this Annual Report
on
Form 10-K.
56
Table of Contents
Year Ended December 31,
2008
2007
2006
2005
2004
(In thousands, except for rate per contract and
percentages)
$
756
$
696
$
482
$
226
$
179
613
426
341
178
102
79
80
982
667
487
233
94
1,323
845
589
312
174
$
2,692
$
1,967
$
1,071
$
538
$
353
237,226
191,848
92,721
42,055
35,541
922
771
373
166
140
247,093
176,561
130,832
61,999
30,961
977
723
525
247
123
$
1.23
$
1.29
$
1.32
$
1.35
$
1.26
$
2.13
$
1.88
$
0.96
$
1.68
46.8
%
45.5
%
46.8
%
48.8
%
56.5
%
23.4
%
23.6
%
21.2
%
20.5
%
22.4
%
29.8
%
30.9
%
32.0
%
30.7
%
21.1
%
(1)
Represents the total commission fee, exchange fee and clearing
fee revenues for the year divided by the number of trading days
during that year.
(2)
Volume is calculated based on the number of contracts traded in
our markets, which is the number of round turn trades. Each
round turn trade represents a matched buy and sell order of one
contract. Average daily volume represents the total volume, in
contracts, for the year divided by the number of trading days
during the year.
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Table of Contents
58
Table of Contents
Our consolidated revenues increased by 41.6% to a record
$813.1 million for the year ended December 31, 2008,
compared to 2007, primarily due to increased contract volumes in
our futures and OTC markets resulting from increased volatility,
organic growth and acquisitions.
Our consolidated operating expenses increased by 44.8% to
$319.5 million for the year ended December 31, 2008,
compared to the same period in 2007, primarily due to
acquisitions, higher cash and non-cash compensation costs, costs
associated with the establishment of ICE Clear Europe, the
closure of our futures trading floors in New York and Dublin and
increased technology spending and related depreciation expenses,
partially offset by CBOT Holdings, Inc., or CBOT, merger-related
transaction costs incurred during the year ended
December 31, 2007.
Our consolidated operating margin decreased to 60.7% for the
year ended December 31, 2008, compared to 61.6% for the
same period in 2007.
Our consolidated net income increased by 25.1% to
$301.0 million for the year ended December 31, 2008,
compared to the same period in 2007.
Consolidated cash flows from operations increased by 30.3% to
$375.1 million for the year ended December 31, 2008,
compared to the same period in 2007.
59
Table of Contents
Geopolitical Events:
Geopolitical events tend
to impact global commodity prices and may impact commodity
supply. Because commodity prices often move in conjunction with
changes in the perception of geopolitical risk, these events in
the past have impacted trading activities in our markets due to
the increased volatility and need for risk management in times
of uncertainty.
Weather:
Weather events have been an important
factor in price volatility and the supply and demand of energy,
soft agricultural and agricultural commodities and, therefore,
the trading activities of market participants. Unexpected or
extreme weather conditions, such as low temperatures or
hurricanes, and other events that cause demand increases, supply
disruptions or unexpected volatility tend to result in business
disruptions and expanded hedging and trading activity in our
markets.
Real and Perceived Supply and Demand
Imbalances:
Various agencies and groups, such as
the International Energy Agency and the U.S. Energy
Information Administration, regularly track commodity supply
data. Reporting on supply or production may impact trading
volume and price volatility due to real or perceived supply and
demand imbalances.
Regulatory Considerations:
Generally,
legislative and regulatory bodies have expressed increased
concern regarding derivatives markets when underlying commodity
and financial instrument prices are volatile. As a result,
legislative and regulatory actions, including proposed actions,
may create uncertainty for market participants and affect
trading volumes.
Availability of Capital:
Margin is required to
be deposited for each cleared trade executed in our markets.
Cost of capital, balance sheet capacity available to support
trading, capital markets conditions or any combination of these
factors may impact trading volumes due to higher costs or lower
availability of capital available to support trading.
Number of Trading Days:
The variability in the
number of business days in each quarter affects our revenues,
and will affect quarter-to-quarter revenue comparisons, since
trading generally only takes place on business days.
60
Table of Contents
Seasonality:
Participants engaged in energy,
soft agricultural and agricultural businesses tend to experience
moderate seasonal fluctuations in demand and price volatility,
although such seasonal impacts have been somewhat negated in
periods of high volume trading.
Year Ended December 31,
2008(1)
%
2007(1)
%
2006
%
(Dollar amounts in thousands)
$
92,971
25.3
%
$
87,308
29.8
%
$
64,126
48.8
%
47,941
13.0
49,942
17.0
30,683
23.3
42,641
11.6
36,890
12.6
26,363
20.0
76,948
20.9
48,647
16.6
23,171
6.3
17,920
6.1
13,540
3.7
542
0.2
54,289
14.7
37,344
12.7
2,248
1.8
5,746
1.6
3,754
1.3
4,404
3.4
36
10,693
2.9
10,740
3.7
3,568
2.7
367,940
100.0
293,087
100.0
131,428
100.0
80,506
21.9
80,053
27.3
25,939
19.7
38,767
10.5
30,836
10.5
24,892
18.9
13,472
3.7
6,386
2.2
2,031
1.6
132,745
36.1
117,275
40.0
52,862
40.2
235,195
63.9
175,812
60.0
78,566
59.8
5,165
1.4
14,217
4.9
1,687
1.3
84,017
22.8
64,005
21.8
28,089
21.4
$
156,343
42.5
%
$
126,024
43.0
%
$
52,164
39.7
%
(1)
The financial results for the years ended December 31, 2008
and 2007 include the financial results for ICE Futures U.S.
subsequent to its acquisition on January 12, 2007.
61
Table of Contents
(2)
Revenues attributable to related parties were $110,000, $424,000
and $12.7 million for the years ended December 31,
2008, 2007 and 2006, respectively. For a discussion of our
related parties, see note 12 to our consolidated financial
statements and related notes, which are included elsewhere in
this Annual Report on
Form 10-K.
Our transaction and clearing fees are presented net of rebates.
(3)
Sugar, cotton and Russell index futures and options began
trading in January 2007 in connection with the ICE Futures U.S.
acquisition. The Russell index futures and options began trading
exclusively on ICE Futures U.S. in September 2008.
(4)
Includes compensation and benefits expenses and professional
services expenses.
(5)
Intersegment expenses represent fees paid by our futures
business segment for support provided by the OTC business
segment to operate the electronic trading platform used in our
futures business.
(6)
The financial results for the years ended December 31, 2008
and 2007 include $6.0 million and $3.1 million,
respectively, in interest expense relating to the Russell
Licensing Agreement. The financial results for the year ended
December 31, 2007 include a gain on disposal of an asset of
$9.3 million. Refer to notes 7 and 15 to our
consolidated financial statements and related notes, which are
included elsewhere in this Annual Report on
Form 10-K,
for more information on these two items.
62
Table of Contents
Size
1,000
Barrels
1,000
Barrels
1,000
Metric Tonnes
112,000
Pounds
Year Ended December 31,
2008
2007
2006
(In thousands)
68,368
59,729
44,346
51,092
51,388
28,673
28,805
24,510
18,290
36,437
26,355
10,631
9,526
17,054
338
24,839
20,002
1,412
237,226
191,848
92,721
(1)
Sugar, cotton and Russell index futures and options began
trading in January 2007 in connection with the ICE Futures U.S.
acquisition. The Russell index futures and options began trading
exclusively on ICE Futures U.S. in September 2008.
(2)
The increase in the other futures and options contracts
primarily relates to the trading of the coffee futures and
options and cocoa futures and options, which began trading in
January 2007 in connection with the ICE Futures U.S. acquisition.
63
Table of Contents
As of December 31,
2008
2007
2006
(In thousands)
614
539
547
519
593
418
418
273
321
1,707
1,796
351
579
250
348
158
201
446
17
777
577
128
5,240
4,923
1,414
(1)
Sugar, cotton, coffee, cocoa and Russell index futures and
options began trading in January 2007 in connection with the ICE
Futures U.S. acquisition. The Russell index futures and options
began trading exclusively on ICE Futures U.S. in September 2008.
64
Table of Contents
Year Ended December 31,
2008(1)
%
2007
%
2006
%
(Dollar amounts in thousands)
$
214,403
49.0
%
$
155,533
56.6
%
$
117,302
60.0
%
60,400
13.8
43,349
15.8
27,223
13.9
52,098
11.9
7,954
1.8
6,873
2.6
2,175
1.1
6,873
1.6
6,010
2.2
3,509
1.8
41,199
9.4
32,311
11.8
26,704
13.7
48,458
11.1
27,256
9.9
16,168
8.3
6,165
1.4
2,782
1.1
2,366
1.2
437,550
100.0
274,114
100.0
195,447
100.0
174,113
39.8
94,350
34.4
67,451
34.5
34,004
7.8
19,405
7.1
11,221
5.7
11,121
4.1
48,651
11.1
26,286
9.6
11,671
6.0
256,768
58.7
151,162
55.1
90,343
46.2
180,782
41.3
122,952
44.9
105,104
53.8
(26,281
)
(6.0
)
(9,846
)
(3.6
)
6,248
3.2
61,622
14.1
33,907
12.4
33,858
17.3
$
92,879
21.2
%
$
79,199
28.9
%
$
77,494
39.7
%
(1)
The financial results for the year ended December 31, 2008
include the financial results for Creditex subsequent to its
acquisition on August 29, 2008.
(2)
Revenues attributable to related parties were $570,000,
$1.3 million and $3.2 million for the years ended
December 31, 2008, 2007 and 2006, respectively. For a
discussion of our related parties, see note 12 to our
consolidated financial statements, which are included elsewhere
in this Annual Report on
Form 10-K.
Our transaction and clearing fees are presented net of rebates.
(3)
Credit derivatives began trading on September 1, 2008 in
connection with the closing of the Creditex acquisition.
(4)
Includes compensation and benefits expenses, professional
services expenses and patent royalty expenses.
(5)
The financial results for the year ended December 31, 2007
include $11.1 million in CBOT merger-related transaction
costs. Refer to note 17 to our consolidated financial
statements and related notes, which are included elsewhere in
this Annual Report on
Form 10-K,
for more information.
(6)
The financial results for the years ended December 31, 2008
and 2007 include $12.2 million and $15.5 million,
respectively, in interest expense on outstanding indebtedness.
Refer to note 9 to our consolidated financial statements
and related notes, which are included elsewhere in this Annual
Report on
Form 10-K,
for more information.
(7)
The financial results for the year ended December 31, 2008
include an impairment loss on the NCDEX cost method investment
of $15.7 million, which was recorded as other expense. For
additional information,
65
Table of Contents
refer to note 6 to our consolidated financial statements
and related notes, which are included elsewhere in this Annual
Report on
Form 10-K.
Excluding this charge, net of taxes, our OTC business segment
net income for the year ended December 31, 2008 would have
been $104.1 million. See also
Non-GAAP Financial Measures below.
Year Ended December 31,
2008
2007
2006
(In millions)
571,364
394,880
302,591
$
1,064.8
6,490
5,492
4,000
1,036
907
576
(1)
We began offering credit default swaps following our acquisition
of Creditex on August 29, 2008. The notional value
presented is for the period from September 1, 2008 to
December 31, 2008.
66
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
228,554
159,659
121,047
10,085
8,331
6,014
8,454
8,571
3,771
247,093
176,561
130,832
Size
2,500
MMBtu
2,500
MMBtu
800
Megawatt Hours per day
400
Megawatt Hours per day
1,000
Barrels
100
Barrels
As of December 31,
2008
2007
2006
(In thousands)
7,486
5,986
3,781
1,784
1,161
792
98
28
18
9,368
7,175
4,591
Year Ended December 31,
2008
%
2007
%
2006
%
(Dollar amounts in thousands)
$
54,486
61.9
%
$
43,140
69.3
%
$
18,032
61.8
%
33,432
38.0
19,079
30.7
11,123
38.2
47
0.1
17
87,965
100.0
62,236
100.0
29,155
100.0
2,678
3.0
2,505
4.0
2,060
7.1
7,606
8.7
4,903
7.9
6,118
21.0
124
0.1
29
12
10,408
11.8
7,437
11.9
8,190
28.1
77,557
88.2
54,799
88.1
20,965
71.9
1,078
1.2
500
0.8
(27
)
(0.1
)
26,885
30.6
19,910
32.0
7,328
25.1
$
51,750
58.8
%
$
35,389
56.9
%
$
13,610
46.7
%
Table of Contents
(1)
Revenues attributable to related parties were $157,000 for the
year ended December 31, 2006. For a discussion of our
related parties, see note 12 to our consolidated financial
statements and related notes, which are included elsewhere in
this Annual Report on
Form 10-K.
(2)
Includes compensation and benefits expenses and professional
services expenses.
68
Table of Contents
69
Table of Contents
70
Table of Contents
71
Table of Contents
72
Table of Contents
73
Table of Contents
74
Table of Contents
75
Table of Contents
Three Months Ended,
December 31,
September 30,
June 30,
March 31,
December 31,
September 30,
June 30,
March 31,
2008(1)
2008(2)
2008
2008
2007
2007
2007(3)
2007(4)
(In thousands)
$
24,470
$
21,583
$
23,809
$
23,109
$
21,320
$
22,071
$
21,796
$
22,121
11,352
10,837
12,722
13,030
12,592
12,791
11,889
12,670
11,440
10,740
9,532
10,929
10,599
10,051
7,911
8,329
11,864
17,345
21,491
26,248
12,160
12,829
14,823
8,835
3,595
3,998
6,281
9,297
4,992
4,920
5,032
2,976
9,023
4,269
126
122
181
149
110
102
13,947
12,563
13,129
14,650
10,556
10,522
9,224
7,042
40,090
55,171
59,076
60,066
43,410
41,665
34,275
36,183
14,177
14,364
16,157
15,702
12,627
12,212
9,713
8,797
35,537
16,561
1,570
1,758
2,300
2,326
2,393
2,199
1,237
1,044
1,093
1,786
2,041
1,953
1,725
1,681
1,362
1,242
26,960
25,771
25,493
24,720
23,306
17,225
15,846
14,019
2,142
4,698
5,003
5,062
3,435
3,420
3,436
3,248
207,260
201,444
197,160
207,214
159,296
151,735
136,654
126,608
57,004
41,186
30,923
30,679
34,913
23,009
21,717
21,758
6,716
9,089
6,928
6,972
4,820
6,650
6,714
4,863
1,705
33
144
10,944
20,157
17,626
15,680
14,337
13,457
12,170
13,002
12,130
26,056
14,401
10,844
10,946
9,546
8,898
7,748
6,509
109,933
82,302
64,375
62,934
62,769
50,871
60,125
46,965
97,327
119,142
132,785
144,280
96,527
100,864
76,529
79,643
(16,171
)
(860
)
(1,146
)
(1,861
)
(438
)
(1,590
)
(1,322
)
8,221
32,301
43,319
46,775
50,129
31,437
32,593
21,514
32,278
$
48,855
$
74,963
$
84,864
$
92,290
$
64,652
$
66,681
$
53,693
$
55,586
(1)
The financial results for the three months ended
December 31, 2008 include an impairment loss on the NCDEX
cost method investment of $15.7 million, which was recorded
as other expense. For additional information, refer to
note 6 to our consolidated financial statements and related
notes, which are included
76
Table of Contents
elsewhere in this Annual Report on
Form 10-K.
Excluding this charge, net of taxes, our consolidated net income
for the three months ended December 31, 2008 would have
been $60.1 million. See also
Non-GAAP Financial Measures below.
(2)
The financial results for the three months ended September, 2008
include the results of Creditex for the period from
September 1, 2008 to September 30, 2008, following the
acquisition of Creditex on August 29, 2008.
(3)
The financial results for the three months ended June 30,
2007 include $10.9 million in CBOT merger-related
transaction costs, or $7.1 million after tax.
(4)
The financial results for the three months ended March 31,
2007 include the results of ICE Futures U.S. for the period from
January 13, 2007 to March 31, 2007 and also include a
gain of $9.3 million, or $5.8 million after tax,
relating to the sale our former open-outcry disaster recovery
site in London.
77
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
375,112
$
287,781
$
150,689
(69,746
)
(637,388
)
(27,628
)
(141,119
)
264,759
58,339
(322
)
188
2,855
$
163,925
$
(84,660
)
$
184,255
78
Table of Contents
79
Table of Contents
80
Table of Contents
Payments Due by Period
Less than
After
Total
1 Year
1-3 Years
4-5 Years
5 Years
(In thousands)
$
397,471
$
57,837
$
320,743
$
18,891
$
107,159
14,400
38,016
54,743
72,125
15,737
28,649
22,238
5,501
48,266
24,766
18,500
2,000
3,000
$
625,021
$
112,740
$
405,908
$
97,872
$
8,501
81
Table of Contents
OTC
Consolidated
Segment
Year Ended
Three Months
Year Ended
December 31,
Ended
December 31,
2008
December 31, 2008
2008
(In thousands, except per share amounts)
$
300,972
$
48,855
$
92,879
15,700
15,700
15,700
(4,477
)
(4,477
)
(4,477
)
$
312,195
$
60,078
$
104,102
$
4.23
$
0.68
$
4.17
$
0.67
$
4.39
$
0.83
$
4.33
$
0.82
71,184
72,280
72,164
73,465
82
Table of Contents
83
Table of Contents
84
Table of Contents
ITEM 7(A).
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
85
Table of Contents
86
Table of Contents
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Page
88
89
91
92
93
94
95
96
97
87
Table of Contents
Jeffrey C. Sprecher
Chairman of the Board and
Chief Executive Officer
Scott A. Hill
Senior Vice President,
Chief Financial Officer
February 11, 2009
88
Table of Contents
CONTROL OVER FINANCIAL REPORTING
89
Table of Contents
90
Table of Contents
FINANCIAL STATEMENTS
IntercontinentalExchange, Inc.
February 10, 2009
91
Table of Contents
(In thousands, except per share amounts)
December 31,
2008
2007
$
283,522
$
119,597
30,724
19,624
3,419
140,955
81,248
52,018
12,117,820
792,052
35,855
17,848
12,552,588
1,142,094
88,952
63,524
1,434,816
1,009,687
728,855
537,722
105,740
3,000
32,724
38,778
15,906
1,540
2,318,041
1,590,727
$
14,959,581
$
2,796,345
$
49,663
$
27,811
41,096
23,878
12,686
10,572
46,875
37,500
17,708
11,687
12,117,820
792,052
8,737
1,748
17,057
5,713
12,311,642
910,961
194,301
108,739
332,500
184,375
82,989
89,645
8,737
24,901
17,032
634,691
408,528
12,946,333
1,319,489
5,949
1,068
765
710
(355,520
)
(30,188
)
1,608,344
1,043,971
732,752
431,708
19,890
30,655
2,006,231
1,476,856
$
14,959,581
$
2,796,345
92
Table of Contents
Year Ended December 31,
2008
2007
2006
$
693,229
$
490,358
$
273,629
102,944
70,396
34,236
16,905
13,539
5,934
813,078
574,293
313,799
159,792
101,397
49,750
29,705
23,047
11,395
1,705
9,039
11,121
67,800
50,759
25,266
62,247
32,701
13,714
319,544
220,730
109,164
493,534
353,563
204,635
11,536
11,865
8,565
(19,573
)
(18,641
)
(231
)
(12,001
)
11,647
(426
)
(20,038
)
4,871
7,908
473,496
358,434
212,543
172,524
117,822
69,275
$
300,972
$
240,612
$
143,268
$
4.23
$
3.49
$
2.54
$
4.17
$
3.39
$
2.40
71,184
68,985
56,474
72,164
70,980
59,599
93
Table of Contents
Consolidated Statements of Changes in
Shareholders Equity
(In thousands)
Accumulated Other
Class A
Class A
Comprehensive Income
Common
Common
Net Unrealized Gain (Loss) from
Common
Stock,
Stock,
Additional
Deferred
Foreign
Available-
Net
Total
Stock
Series 1
Series 2
Treasury Stock
Paid-in
Stock
Retained
Currency
For-Sale
Investment
Shareholders
Shares
Value
Shares
Value
Shares
Value
Shares
Value
Capital
Compensation
Earnings
Translation
Securities
Hedges
Equity
18,400
$
184
2,863
$
29
35,782
$
358
(1,534
)
$
(5,541
)
$
177,602
$
(6,899
)
$
47,911
$
21,338
$
91
$
(2,450
)
$
232,623
8,525
(93
)
8,432
2,407
24
103
1
(3
)
(188
)
21,981
21,818
(6,899
)
6,899
38,748
388
(2,863
)
(29
)
(35,885
)
(359
)
(69
)
(4,765
)
(4,765
)
9,489
9,489
16
135
746
(746
)
43,313
43,313
25
290
290
143,268
143,268
59,596
596
(1,471
)
(9,748
)
245,030
191,179
29,863
(2
)
(2,450
)
454,468
3,183
61
3,244
1,044
11
(4
)
(472
)
9,920
9,459
10,303
103
707,560
707,663
(1
)
(197
)
(197
)
(181
)
(24,814
)
(24,814
)
25,415
25,415
20
405
5,043
(5,043
)
61,089
61,089
(83
)
(83
)
240,612
240,612
70,963
710
(1,252
)
(30,188
)
1,043,971
431,708
33,046
59
(2,450
)
1,476,856
(10,657
)
(108
)
(10,765
)
397
4
(1
)
(225
)
5,206
4,985
4,906
49
496,532
496,581
(3,220
)
(300,000
)
(300,000
)
72
72
(295
)
(45,783
)
(45,783
)
39,112
39,112
236
2
630
20,676
(20,678
)
44,201
44,201
300,972
300,972
76,502
$
765
$
$
(4,138
)
$
(355,520
)
$
1,608,344
$
$
732,752
$
22,389
$
(49
)
$
(2,450
)
$
2,006,231
94
Table of Contents
Year Ended December 31,
2008
2007
2006
$
300,972
$
240,612
$
143,268
(10,657
)
3,183
8,525
(108
)
61
(93
)
$
290,207
$
243,856
$
151,700
95
Table of Contents
Year Ended December 31,
2008
2007
2006
$
300,972
$
240,612
$
143,268
62,247
32,701
13,714
(9,268
)
1,644
698
147
530
(615
)
724
15,700
(47
)
(171
)
(882
)
36,382
23,595
8,825
55
(16,986
)
(3,222
)
(5,345
)
(44,080
)
(60,812
)
(40,996
)
(15,159
)
(4,919
)
(19,397
)
777
(329
)
1,325
(3,051
)
(2,359
)
(4,310
)
1,029
1,267
(510
)
58,023
74,003
37,791
(22,924
)
(3,400
)
16,335
74,140
47,169
7,421
375,112
287,781
150,689
(30,484
)
(30,999
)
(12,377
)
(18,328
)
(12,267
)
(7,438
)
(44,606
)
(480,114
)
(61,099
)
13,269
(2,385
)
(40
)
(36,937
)
236,935
272,771
346,090
(102,567
)
(332,357
)
(309,227
)
(2,210
)
(121
)
(4,124
)
(106,101
)
(6,431
)
(3,615
)
(69,746
)
(637,388
)
(27,628
)
44,080
60,812
40,996
290
195,000
250,000
(37,500
)
(28,125
)
(1,519
)
(2,375
)
(46,008
)
(25,484
)
(4,953
)
(300,000
)
(382
)
5,210
9,931
22,006
(141,119
)
264,759
58,339
(322
)
188
2,855
163,925
(84,660
)
184,255
119,597
204,257
20,002
$
283,522
$
119,597
$
204,257
$
129,879
$
54,255
$
38,279
$
10,963
$
14,586
$
86
$
499,768
$
707,663
$
96
Table of Contents
1.
Nature of
Business and Organization
97
Table of Contents
2.
Summary
of Significant Accounting Policies
98
Table of Contents
99
Table of Contents
100
Table of Contents
101
Table of Contents
102
Table of Contents
103
Table of Contents
104
Table of Contents
3.
Acquisitions
105
Table of Contents
$
48,684
475,197
6,188
5,326
$
535,395
$
45,913
35,795
5,368
380,080
215,400
20,896
(55,510
)
(99,110
)
(13,437
)
$
535,395
Accumulated
Net Book
Fair Value
Amortization
Value
$
184,000
$
3,534
$
180,466
12 years
15,100
2,990
12,110
1-1.75 years
13,700
1,476
12,224
5 years
2,600
433
2,167
2 years
$
215,400
$
8,433
$
206,967
106
Table of Contents
Year Ended December 31,
2008
2007
$
933,584
$
733,634
$
286,841
$
225,924
$
3.77
$
3.06
$
3.72
$
2.95
$
400,000
706,663
2,109
14,670
$
1,123,442
107
Table of Contents
$
39,945
784,385
14,993
16,149
890,573
327,500
24,658
(37,985
)
(14,366
)
(784,385
)
(114,108
)
(23,917
)
$
1,123,442
Accumulated
Net Book
Fair Value
Amortization
Value
$
195,200
$
$
195,200
Indefinite
14,400
1,003
13,397
20 years
29,700
4,030
25,670
17-20 years
7,900
5,178
2,722
3 years
12,000
7,894
4,106
2-5 years
68,300
68,300
Indefinite
$
327,500
$
18,105
$
309,395
108
Table of Contents
$
11,040
3,326
(11,761
)
2,605
(2,605
)
$
109
Table of Contents
4.
Short-Term
and Long-Term Restricted Cash
110
Table of Contents
5.
Short-Term
and Long-Term Investments
Gross
Gross
Unrealized
Unrealized
Estimated
Cost
Gains
Losses
Fair Value
$
143
$
1
$
$
144
1,997
1,997
8
2
6
1,320
48
1,272
3,065
3,065
$
6,533
$
1
$
50
$
6,484
Gross
Gross
Unrealized
Unrealized
Estimated
Cost
Gains
Losses
Fair Value
$
418
$
$
1
$
417
28,757
106
46
28,817
111,721
111,721
$
140,896
$
106
$
47
$
140,955
Estimated
Fair
Value
$
3,107
312
3,065
$
6,484
111
Table of Contents
6.
Cost
Method Investments and Impairment of NCDEX
112
Table of Contents
7.
Property
and Equipment
December 31,
Depreciation
2008
2007
Period
(In thousands)
(In years)
$
64,398
$
46,393
3
94,733
70,336
3
12,830
11,707
5
27,028
14,492
7
198,989
142,928
(110,037
)
(79,404
)
$
88,952
$
63,524
8.
Goodwill
and Other Intangible Assets
$
79,575
890,466
37,801
1,845
1,009,687
380,080
46,961
(1,912
)
$
1,434,816
113
Table of Contents
December 31,
2008
2007
Useful Life
(In thousands)
(In years)
$
249,409
$
62,709
4 to 20
149,796
149,796
7
14,400
14,400
20
31,402
15,502
1 to 5
31,580
9,383
3 to 11
2,585
665
2 to 5
479,172
252,455
(45,516
)
(15,754
)
433,656
236,701
212,684
216,858
68,300
68,300
14,215
15,863
295,199
301,021
$
728,855
$
537,722
$
63,354
55,860
54,642
53,068
52,377
154,355
$
433,656
114
Table of Contents
9.
Credit
Facilities
115
Table of Contents
10.
Shareholders
Equity
Weighted Average
Number of
Exercise Price per
Options
Option
4,787,418
$
9.51
170,654
100.38
(2,510,481
)
8.80
(142,683
)
8.49
2,304,908
17.05
108,126
180.63
(1,043,734
)
9.51
(10,213
)
10.79
1,359,087
35.91
1,534,390
31.28
(397,255
)
13.05
(32,807
)
26.94
2,463,415
36.83
116
Table of Contents
Weighted Average
Aggregate
Weighted Average
Remaining
Intrinsic
Number of Options
Exercise Price
Contractual Life
Value
(Years)
(In thousands)
2,281,687
$
34.68
6.94
$
118,308
1,675,337
$
24.35
6.32
$
101,377
Weighted Average
Options
Remaining
Options
Outstanding
Contractual Life
Exercisable
(Years)
878,429
5.3
874,944
851,398
7.3
627,498
499,820
9.2
48,320
138,200
8.0
91,106
95,568
8.9
33,469
2,463,415
7.1
1,675,337
Year Ended December 31,
2008
2007
2006
2.13
%
3.8
%
4.6
%
1.7
6
6
52
%
49
%
49
%
0
%
0
%
0
%
$
64.65
$
92.58
$
53.06
117
Table of Contents
118
Table of Contents
119
Table of Contents
Number of
Weighted Average
Restricted
Grant-Date Fair
Stock Shares
Value per Share
1,271,474
$
9.01
349,521
89.29
(213,391
)
(9.78
)
(68,535
)
(8.31
)
1,339,069
29.87
199,159
165.27
(268,998
)
(21.91
)
(32,276
)
(38.09
)
1,236,954
53.19
857,265
84.80
(898,927
)
(26.58
)
(30,694
)
(103.62
)
1,164,598
95.67
120
Table of Contents
11.
Income
Taxes
Year Ended December 31,
2008
2007
2006
$
140,233
$
72,623
$
44,576
49,277
48,144
30,359
189,510
120,767
74,935
(11,609
)
(4,393
)
(2,370
)
(5,377
)
1,448
(3,290
)
(16,986
)
(2,945
)
(5,660
)
$
172,524
$
117,822
$
69,275
121
Table of Contents
December 31,
2008
2007
$
10,998
$
7,478
12,119
9,904
7,130
8,446
4,209
1,888
4,477
5,765
3,398
44,698
31,114
(5,078
)
(2,718
)
39,620
28,396
(5,748
)
(6,772
)
(213,358
)
(122,642
)
(2,429
)
(2,813
)
(221,535
)
(132,227
)
(181,915
)
(103,831
)
7,909
4,908
$
(189,824
)
$
(108,739
)
Year Ended
December 31,
2008
2007
2006
35.0
%
35.0
%
35.0
%
3.2
2.0
1.1
(1.1
)
(2.2
)
(0.2
)
(2.5
)
(2.3
)
(3.2
)
1.8
0.4
(0.1
)
36.4
%
32.9
%
32.6
%
122
Table of Contents
123
Table of Contents
$
13,173
2,570
1,659
(3,365
)
(80
)
(1,894
)
(100
)
11,963
5,217
1,409
117
(370
)
(2,473
)
(193
)
$
15,670
12.
Related-Parties
124
Table of Contents
13.
Unearned
Government Grant
14.
Clearing
Organizations
125
Table of Contents
126
Table of Contents
ICE Clear U.S.
ICE Clear Europe
ICE Clear Canada
Total
$
1,815,532
$
9,872,269
$
11,023
$
11,698,824
11,325
11,325
22,914
381,877
2,880
407,671
$
1,849,771
$
10,254,146
$
13,903
$
12,117,820
ICE Clear U.S.
ICE Clear Canada
Total
$
774,593
$
6,936
$
781,529
7,895
7,895
1,768
860
2,628
$
784,256
$
7,796
$
792,052
127
Table of Contents
U.S.
Government
Money
Securities at
Market
Face Value
Mutual Fund
$
8,238,542
$
580,906
137,596
24,622
$
8,376,138
$
605,528
Government
Securities at
Letters
Face Value
of Credit
$
4,803,718
$
1,270,000
1,000
$
4,804,718
$
1,270,000
Canadian
Government
Securities at
Letters
Face Value
of Credit
$
55,842
$
5,311
22,611
$
78,453
$
5,311
128
Table of Contents
U.S.
Government
Money
Securities at
Market
Face Value
Mutual Fund
$
3,139,010
$
834,310
94,443
$
3,233,453
$
834,310
Canadian
Government
Securities at
Letters
Face Value
of Credit
$
40,897
$
18,925
17,751
$
58,648
$
18,925
129
Table of Contents
15.
Commitments
and Contingencies
$
15,525
14,345
14,198
12,709
9,529
5,500
$
71,806
130
Table of Contents
131
Table of Contents
16.
Employee
Benefit Plans
17.
CBOT
Merger-Related Transaction Costs
18.
Segment
Reporting
132
Table of Contents
Market
OTC
Futures
Data
Business
Business
Business
Segment
Segment
Segment
Total
(In thousands)
$
396,351
$
362,194
$
54,533
$
813,078
41,199
5,746
33,432
80,377
48,651
13,472
124
62,247
2,828
8,045
663
11,536
13,219
6,354
19,573
61,622
84,017
26,885
172,524
92,879
156,343
51,750
300,972
2,307,685
12,633,541
18,355
14,959,581
35,473
13,121
218
48,812
2,021,201
142,470
2,163,671
176,445
110,182
88,485
375,112
European
Union and
United States
Canada
Total
(In thousands)
$
565,028
$
248,050
$
813,078
74,488
14,464
88,952
2,163,671
2,163,671
133
Table of Contents
Market
OTC
Futures
Data
Business
Business
Business
Segment
Segment
Segment
Total
(In thousands)
$
241,803
$
289,333
$
43,157
$
574,293
32,311
3,754
19,079
55,144
26,286
6,386
29
32,701
5,589
5,747
529
11,865
15,658
2,983
18,641
33,907
64,005
19,910
117,822
79,199
126,024
35,389
240,612
1,654,133
1,122,279
19,933
2,796,345
38,044
5,051
171
43,266
1,397,696
149,713
1,547,409
115,541
120,249
51,991
287,781
European
Union and
United States
Canada
Total
(In thousands)
$
376,012
$
198,281
$
574,293
60,874
2,650
63,524
1,547,409
1,547,409
134
Table of Contents
Market
OTC
Futures
Data
Business
Business
Business
Segment
Segment
Segment
Total
(In thousands)
$
168,743
$
127,024
$
18,032
$
313,799
26,704
4,404
11,123
42,231
11,671
2,031
12
13,714
6,067
2,402
96
8,565
231
231
33,858
28,089
7,328
69,275
77,494
52,164
13,610
143,268
414,193
71,972
7,046
493,211
18,068
1,678
69
19,815
81,126
81,126
68,884
64,730
17,075
150,689
European
United States
Union
Total
(In thousands)
$
178,100
$
135,699
$
313,799
21,820
4,460
26,280
81,126
81,126
135
Table of Contents
19.
Earnings
Per Common Share
Years Ended December 31,
2008
2007
2006
$
300,972
$
240,612
$
143,268
71,184
68,985
56,474
$
4.23
$
3.49
$
2.54
71,184
68,985
56,474
980
1,995
3,125
72,164
70,980
59,599
$
4.17
$
3.39
$
2.40
136
Table of Contents
20.
Quarterly
Financial Data (Unaudited)
1
st
Qtr(a)
2
nd
Qtr(b)
3
rd
Qtr
4
th
Qtr(c)
$
207,214
$
197,160
$
201,444
$
207,260
144,280
132,785
119,142
97,327
92,290
84,864
74,963
48,855
$
1.31
$
1.20
$
1.05
$
0.68
$
1.29
$
1.19
$
1.04
$
0.67
$
126,608
$
136,654
$
151,735
$
159,296
79,643
76,529
100,864
96,527
55,586
53,693
66,681
64,652
$
0.82
$
0.78
$
0.96
$
0.93
$
0.80
$
0.75
$
0.93
$
0.90
(a)
The Company recognized a net gain on disposal of an asset of
$9.3 million during the first quarter of 2007 (Note 7).
(b)
The Company recognized $11.1 million in CBOT merger-related
transaction costs during the second quarter of 2007
(Note 17).
(c)
The Company recognized an impairment loss on the NCDEX cost
method investment of $15.7 million during the fourth
quarter of 2008 (Note 6).
(d)
The annual earnings per common share may not equal the sum of
the individual quarters earnings per common share due to
rounding.
137
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9(A).
CONTROLS
AND PROCEDURES
ITEM 9(B).
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
138
Table of Contents
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
Consolidated Balance Sheets as of December 31, 2008 and
2007.
Consolidated Statements of Income for the years ended
December 31, 2008, 2007 and 2006.
Consolidated Statements of Changes in Shareholders Equity
for the years ended December 31, 2008, 2007 and 2006.
139
Table of Contents
Consolidated Statements of Comprehensive Income for the years
ended December 31, 2008, 2007 and 2006.
Consolidated Statements of Cash Flows for the years ended
December 31, 2008, 2007 and 2006.
Notes to Consolidated Financial Statements.
140
Table of Contents
(Registrant)
By:
Chairman of the Board and Chief
Executive Officer
(principal executive officer)
February 11, 2009
Senior Vice President,
Chief Financial Officer
(principal financial
and accounting officer)
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
141
Table of Contents
Director
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
Director
February 11, 2009
142
Table of Contents
Years Ended December 31, 2008, 2007 and 2006
Additions
Balance at
Charged to
Beginning of
Costs and
Balance at
Year
Expenses(1)
Deductions(2)
End of Year
(In thousands)
$
370
$
2,019
$
(989
)
$
1,400
$
2,718
$
2,360
$
$
5,078
$
985
$
199
$
(814
)
$
370
$
$
2,718
$
$
2,718
$
261
$
1,034
$
(310
)
$
985
(1)
Additions charged to costs and expenses for the allowance for
doubtful accounts are based on our historical collection
experiences and managements assessment of the
collectibility of specific accounts. Additions to the deferred
income tax valuation allowance relate to state research and
development tax credits and foreign net operating loss
carryforwards which the Company does not expect to realize. This
column also includes the foreign currency translation
adjustments.
(2)
Deductions represent the write-off of uncollectible receivables,
net of recoveries.
143
Table of Contents
Exhibit
2
.1
Agreement and Plan of Merger by and among
IntercontinentalExchange, Inc., Columbia Merger Corporation,
Creditex Group Inc. and TA Associates, Inc. dated June 3,
2008 (incorporated by reference to Exhibit 10.1 to
ICEs Quarterly Report on
Form 10-Q,
filed with the SEC on August 4, 2008, File
No. 001-32671).
2
.2
Amendment to Agreement and Plan of Merger, dated as of
August 26, 2008, to the Agreement and Plan of Merger, dated
as of June 3, 2008, by and among ICE, MergerCo, Creditex
and the Stockholders Representative (incorporated by
reference to Exhibit 10.1 to ICEs Current Report on
Form 8-K,
filed with the SEC on September 2, 2008, File
No. 001-32671).
3
.1
Fourth Amended and Restated Certificate of Incorporation of
IntercontinentalExchange, Inc. (incorporated by reference to
Exhibit 3.1 to ICEs Annual Report on
Form 10-K,
filed with the SEC on March 10, 2006, File
No. 001-32671).
3
.2
Amended and Restated Bylaws of IntercontinentalExchange, Inc.
(incorporated by reference to Exhibit 3.1 to ICEs
Current Report on
Form 8-K,
filed with the SEC on December 16, 2008, File
No. 001-32671).
10
.1
Employment Agreement, dated as of December 31, 2008,
between IntercontinentalExchange, Inc. and Jeffrey C. Sprecher
(incorporated by reference to Exhibit 10.1 to ICEs
Current Report on
Form 8-K,
filed with the SEC on January 7, 2009, File
No. 001-32671).
10
.2
Employment Agreement, dated as of December 31, 2008,
between Intercontinental-Exchange, Inc. and Charles A. Vice
(incorporated by reference to Exhibit 10.2 to ICEs
Current Report on
Form 8-K,
filed with the SEC on January 7, 2009, File
No. 001-32671).
10
.3
Employment Agreement, dated as of December 31, 2008,
between Intercontinental-Exchange, Inc. and David S. Goone
(incorporated by reference to Exhibit 10.3 to ICEs
Current Report on
Form 8-K,
filed with the SEC on January 7, 2009, File
No. 001-32671).
10
.4
Employment Agreement, dated as of December 31, 2008,
between Intercontinental-Exchange, Inc. and Edwin D. Marcial
(incorporated by reference to Exhibit 10.4 to ICEs
Current Report on
Form 8-K,
filed with the SEC on January 7, 2009, File
No. 001-32671).
10
.5
Employment Agreement dated as of December 31, 2008, between
Intercontinental-Exchange, Inc. and Scott A. Hill (incorporated
by reference to Exhibit 10.5 to ICEs Current Report
on
Form 8-K,
filed with the SEC on January 7, 2009, File
No. 001-32671).
10
.6
IntercontinentalExchange, Inc. 2000 Stock Option Plan, as
amended effective December 31, 2008.
10
.7
IntercontinentalExchange, Inc. 2003 Restricted Stock Deferral
Plan for Outside Directors, as amended effective
December 31, 2008.
10
.8
IntercontinentalExchange, Inc. 2004 Restricted Stock Plan, as
amended effective December 31, 2008.
10
.9
IntercontinentalExchange, Inc. 2005 Equity Incentive Plan, as
amended effective December 31, 2008.
10
.10
$500,000,000 Credit Agreement, dated as of January 12,
2007, among IntercontinentalExchange, Inc. Wachovia Bank,
National Association, as Administrative Agent, Bank of America,
N.A., as Syndication Agent, and other Lenders named therein
(incorporated by reference to Exhibit 10.1 to ICEs
Current Report on
Form 8-K,
filed with the SEC on January 12, 2007, File
No. 001-32671).
10
.11
First Amendment to $500,000,000 Credit Agreement among
IntercontinentalExchange, Inc. and Wachovia Bank, National
Association, as Administrative Agent, Bank of America, N.A., as
Syndication Agent, and the Lenders named therein dated as of
August 24, 2007 (incorporated by reference to
Exhibit 10.1 to our Current Report on
Form 8-K,
filed with the SEC on August 30, 2007, File
No. 001-32671).
144
Table of Contents
Exhibit
10
.12
Second Amendment to $500,000,000 Credit Agreement among
IntercontinentalExchange, Inc. and Wachovia Bank, National
Association, as Administrative Agent, Bank of America, N.A., as
Syndication Agent, and the Lenders named therein dated as of
June 13, 2008 (incorporated by reference to
Exhibit 10.1 to our Current Report on
Form 8-K,
filed with the SEC on June 19, 2008, File
No. 001-32671).
10
.13
$150,000,000 Credit Agreement, dated as of June 27, 2008,
among IntercontinentalExchange, Inc. Wachovia Bank, National
Association, as Administrative Agent, Bank of America, N.A., as
Syndication Agent, and other Lenders named therein (incorporated
by reference to Exhibit 10.1 to ICEs Current Report
on
Form 8-K,
filed with the SEC on July 3, 2008,
File No. 001-32671).
10
.14
Office Lease, dated as of June 8, 2000, as amended, between
CMD Realty Investment Fund IV, L.P. and
IntercontinentalExchange, LLC (incorporated by reference to
Exhibit 10.17 to ICEs registration statement on
Form S-1,
filed with the SEC on June 6, 2005, File
No. 333-123500).*
10
.15
Lease Amendment Six, dated as of October 12, 2005, by and
between CMD Realty Investment Fund IV, L.P. and
IntercontinentalExchange, Inc. (incorporated by reference to
Exhibit 10.27 to ICEs registration statement on
Form S-1,
filed with the SEC on October 14, 2005, File
No. 333-123500).*
10
.16
Lease Amendment Seven, dated as of May 12, 2006, by and
between CMD Realty Investment Fund IV, L.P. and
IntercontinentalExchange, Inc. (incorporated by reference to
Exhibit 10.2 to ICEs Current Report on
Form 8-K,
filed with the SEC on May 17, 2006, File
No. 001-32671).*
10
.17
Lease Amendment Eight, dated as of November 28, 2006.*
10
.18
Lease Amendment Nine, dated as of February 21, 2007.*
10
.19
Lease Amendment Ten, dated as of May 15, 2008.*
10
.20
TRS Application Services Agreement, dated as of
April 25, 2001, between The International Petroleum
Exchange of London Limited and LIFFE Services Company Limited
(incorporated by reference to Exhibit 10.14 to ICEs
registration statement on
Form S-1,
filed with the SEC on October 14, 2005, File
No. 333-123500).*
10
.21
Deed of Novation, dated July 22, 2005, between The
International Petroleum Exchange of London Limited, LIFFE
Services Limited, Atos Euronext Market Solutions Limited, and
LIFFE Administration and Management (incorporated by reference
to Exhibit 10.25 to ICEs registration statement on
Form S-1,
filed with the SEC on October 14, 2005, File
No. 333-123500).
10
.22
Managed Services Agreement, dated as of December 21, 2007,
between ICE Clear Europe Limited and Atos Euronext Market
Solutions Limited.*
10
.23
Patent License Agreement, dated as of March 29, 2002,
between eSpeed, Inc. and IntercontinentalExchange, Inc.
(incorporated by reference to Exhibit 10.16 to ICEs
registration statement on
Form S-1,
filed with the SEC on June 6, 2005,
File No. 333-123500).
10
.24
Settlement Agreement, dated as of September 1, 2005, by and
between EBS Group Limited and IntercontinentalExchange, Inc.
(incorporated by reference to Exhibit 10.26 to ICEs
registration statement on
Form S-1,
filed with the SEC on October 14, 2005, File
No. 333-123500).
10
.25
License Agreement For Index-Related Derivative Products dated as
of June 15, 2007 between IntercontinentalExchange, Inc. and
Frank Russell Company (incorporated by reference to
Exhibit 10.1 to ICEs Current Report on
Form 8-K,
filed with the SEC on June 20, 2007,
File No. 001-32671).*
10
.26
Contribution and Asset Transfer Agreement, dated as of
May 11, 2000, by and between IntercontinentalExchange, LLC,
Continental Power Exchange, Inc., and Jeffrey C. Sprecher
(incorporated by reference to Exhibit 10.31 to ICEs
registration statement on
Form S-1,
filed with the SEC on October 25, 2005, File
No. 333-123500).
10
.27
First Amendment to Contribution and Asset Transfer Agreement,
dated as of May 17, 2000, by and among
IntercontinentalExchange, LLC, Continental Power Exchange, Inc.,
and Jeffrey C. Sprecher (incorporated by reference to
Exhibit 10.32 to ICEs registration statement on
Form S-1,
filed with the SEC on October 25, 2005, File
No. 333-123500).
Table of Contents
Exhibit
10
.28
Second Amendment to Contribution and Asset Transfer Agreement,
dated as of October 24, 2005, by and among
IntercontinentalExchange, Inc., Continental Power Exchange,
Inc., and Jeffrey C. Sprecher (incorporated by
reference to Exhibit 10.33 to ICEs registration
statement on
Form S-1,
filed with the SEC on October 25, 2005, File
No. 333-123500).
10
.29
IntercontinentalExchange, Inc. Amended and Restated 1999 Stock
Option/Stock Issuance Plan (formerly the Creditex Group Inc.
Amended and Restated 1999 Stock Option/Stock Issuance Plan)
(incorporated by reference to Exhibit 4.1 to ICEs
registration statement on
Form S-8,
filed with the SEC on September 2, 2008, File
No. 333-153299).
21
.1
Subsidiaries of IntercontinentalExchange, Inc.
23
.1
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm.
24
.1
Power of Attorney (included with signature page hereto).
31
.1
Rule 13a - 14(a)/15d - 14(a) Certification of
Chief Executive Officer.
31
.2
Rule 13a - 14(a)/15d - 14(a) Certification of
Chief Financial Officer.
32
.1
Section 1350 Certification of Chief Executive Officer.
32
.2
Section 1350 Certification of Chief Financial Officer.
*
Confidential treatment has been previously requested or granted
to portions of this exhibit by the SEC.
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-2-
-3-
-4-
4. | ELECTION TO RECEIVE SHARES OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS |
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
INTERCONTINENTALEXCHANGE, INC.
|
||||
By | /s/ Jeffrey C. Sprecher | |||
Jeffrey C. Sprecher, | ||||
Chairman and Chief Executive Officer | ||||
By | /s/ Johnathan H. Short | |||
Johnathan H. Short, | ||||
Senior Vice President,
General Counsel and Corporate Secretary |
||||
-13-
-2-
-3-
-4-
-5-
-6-
INTERCONTINENTALEXCHANGE, INC. | ||||||
|
||||||
|
By |
/s/ Jeffrey C. Sprecher
|
||||
|
||||||
|
By |
/s/ Johnathan H. Short
Counsel and Corporate Secretary |
-7-
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
|
/s/ Johnathan H. Short | |
|
||
|
Johnathan H. Short, Secretary |
-18-
*** | Certain information in this agreement has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
1
Additional | ||
Premises | ||
Period | Monthly Base Rent | |
Additional Premises Commencement Date May 31, 2007
|
[***] | |
June 1, 2007 May 31, 2008
|
[***] | |
June 1, 2008 May 31, 2009
|
[***] | |
June 1, 2009 May 31, 2010
|
[***] | |
June 1, 2010 May 31, 2011
|
[***] | |
June 1, 2011 Lease Expiration Date
|
[***] |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
2
3
LANDLORD: |
CMD Realty Investment Fund IV, L.P.
[SEAL]
an Illinois limited partnership |
|||
By: | CMD/Fund IV GP Investments, L.P., | |||
an Illinois limited partnership, its general partner | ||||
By: | CMD REIM IV, Inc., | |||
an Illinois corporation, its general partner | ||||
By: | CMD Realty Investors, | |||
an Illinois general partnership, as agent | ||||
/s/ Joseph J. Bowar | ||||
Joseph J. Bowar | ||||
Senior Vice President | ||||
TENANT: |
IntercontinentalExchange, Inc.
[SEAL]
a Delaware corporation |
|||
/s/ Jeffrey C. Sprecher | ||||
Jeffrey C. Sprecher | ||||
Chairman and Chief Executive Officer |
4
A-1
B-1
B-2
B-3
B-4
B-5
B-6
B-7
B-8
CMD 108C (3/04)
Minor/Moderate Work
Tenant Performance/Allowance
***
Confidential information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the omitted portions.
*** | Certain information in this agreement has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
Additional | ||
Premises | ||
Period | Monthly Base Rent | |
Additional Premises Commencement Date April 30, 2008
|
[***] | |
May 1, 2008 April 30, 2009
|
[***] | |
May 1, 2009 April 30, 2010
|
[***] | |
May 1, 2010 April 30, 2011
|
[***] | |
May 1, 2011 Lease Expiration Date
|
[***] |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
2
3
4
5
LANDLORD: |
CMD Realty Investment Fund IV, L.P.
[SEAL]
an Illinois limited partnership |
|||
By: | CMD/Fund IV GP Investments, L.P., | |||
an Illinois limited partnership, its general partner | ||||
By: | CMD REIM IV, Inc., an Illinois corporation, | |||
its general partner | ||||
By: | Wind Realty Partners, an Illinois general | |||
partnership, as agent | ||||
/s/ Andrew Runge | ||||
Andrew Runge | ||||
Senior Vice President | ||||
TENANT: |
IntercontinentalExchange, Inc.
[SEAL]
a Delaware corporation |
|||
/s/ Jeffrey C. Sprecher | ||||
Jeffrey C. Sprecher | ||||
Chairman and Chief Executive Officer |
6
A-1
EXHIBIT B | 109E-1 (1/01) |
B-1
B-2
B-3
*** | Certain information in this agreement has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
1
Suite 500 | ||
Period | Monthly Base Rent | |
|
||
March 1, 2012 February 28, 2013
|
[***] | |
March 1, 2013 February 28, 2014
|
[***] | |
March 1, 2014 New Expiration Date
|
[***] |
Suite 600 | ||
Period | Monthly Base Rent | |
|
||
March 1, 2012 February 28, 2013
|
[***] | |
March 1, 2013 February 28, 2014
|
[***] | |
March 1, 2014 New Expiration Date
|
[***] |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
2
Suite 650 | ||
Period | Monthly Base Rent | |
|
||
March 1, 2012 February 28, 2013
|
[***] | |
March 1, 2013 February 28, 2014
|
[***] | |
March 1, 2014 New Expiration Date
|
[***] |
Suite LL-9 | ||
Period | Monthly Base Rent | |
|
||
March 1, 2012 February 28, 2013
|
[***] | |
March 1, 2013 February 28, 2014
|
[***] | |
March 1, 2014 New Expiration Date
|
[***] |
Additional Premises | ||
Period | Monthly Base Rent | |
|
||
Additional Premises Commencement Date October 31,
2009
|
[***] | |
November 1, 2009 October 31, 2010
|
[***] | |
November 1, 2010 October 31, 2011
|
[***] | |
November 1, 2011 October 31, 2012
|
[***] | |
November 1, 2012 October 31, 2013
|
[***] | |
November 1, 2013 New Expiration Date
|
[***] |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
3
4
5
6
7
LANDLORD
:
[SEAL]
RFP MAINSTREET 2100 RIVEREDGE, LLC, a Delaware limited liability company |
||||
/s/ Paul J. Kilgallon | ||||
Paul J. Kilgallon, President | ||||
TENANT
:
[SEAL]
INTERCONTINENTALEXCHANGE, INC. , a Delaware corporation |
||||
/s/ Jeffrey C. Sprecher | ||||
Jeffrey C. Sprecher | ||||
Chairman and Chief Executive Officer |
8
A-1
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
B-1
B-2
B-3
B-4
B-5
B-6
B-7
B-8
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
C-1
C-1-1
D-1
D-2
D-3
E-1
F-1
F-2
F-3
AGREEMENT is made December 21, 2007
|
Exhibit 10.22 |
1. | ATOS EURONEXT MARKET SOLUTIONS LIMITED, a company incorporated in England with registered number 3962327 and having its registered office at 25 Bank Street, Canary Wharf, London E14 5NQ ( Supplier ); and | |
2. | ICE CLEAR EUROPE LIMITED a company incorporated in England with registered number 06219884 and having its principal office at International House, St Katharines Way, London E1W 1UY (the Customer ). |
1. | DEFINITIONS AND INTERPRETATION | |
1.1 | In this Agreement: |
1.1.1 | Affiliate means any company, partnership or other entity which is a Subsidiary or Holding Company (as such expressions are defined by Section 736 of the Companies Act 1985 (as amended)). | ||
1.1.2 | Agreement means this agreement and any and all schedules and appendices to it as may be varied from time to time in accordance with the provisions of this agreement. | ||
1.1.3 | Best Industry Standards means the standards which fall within the upper quartile in the relevant industry for the provision of comparable services which are substantially similar to the Services or the relevant part of them, having regard to factors such as the nature and size of the parties, the service levels, the term, the pricing structure and any other relevant factors. | ||
1.1.4 | Business Continuity Plan has the meaning given to that term in Clause 3.1. | ||
1.1.5 | Business Day shall be any day upon which the market operated by ICE Futures Europe is open for business. |
*** | Certain information in this agreement has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
1.1.6
Certified Emissions Reductions
means a unit issued by the UN Clean
Development Mechanism Executive Board pursuant to Article 12 of the Kyoto Protocol and
the decisions adopted pursuant to the UNFCCC or the Kyoto Protocol.
1.1.7
Change
means any change to the Services, the Service Level Agreement or
any other aspect of this Agreement proposed by either party in accordance with
Schedule 5.
1.1.8
Change of Control
means a transaction in which there is a change in
Control of either the Supplier or Customer
1.1.9
Change Control Procedure
means the procedure for changing the Services set
out in Schedule 5.
1.1.10
Change Request
means a document containing full written particulars of a Change
which either party may require.
1.1.11
Charges
means the charges which are payable by the Customer for the Services as
set out in Schedule 3.
1.1.12
Clearing Member
means a clearing member of the clearing house operated by the
Customer
.
1.1.13
Commencement Date
means the date of execution of this Agreement by the parties.
1.1.14
Confidential Information
means any and all confidential information relating to
the business, finance or affairs of one party coming into the possession of the other
party pursuant to this Agreement.
1.1.15
Contracts
means contracts, including options (being any option contract as defined
by Article 83 of the Regulated Activities Order), futures (being any future as defined
by Article 84 of the Regulated Activities Order), contracts for differences (being any
contract for differences or other contract defined by Article 85 of the Regulated
Activities Order) and cash or spot contracts and over the counter bilateral forward
and option contracts, over or in respect or in respect of any underlying product,
commodity, financial instrument or other asset.
1.1.16
Control
means the ownership of more than 50% of the issued share capital or the
legal power to direct or cause the direction of the general management and policies of
the party in question.
1.1.17
CPS or Clearing Processing System
means the Suppliers proprietary clearing
processing system which is used together with TRS to provide the Services
.
1.1.18
Customer
means ICE Clear Europe Limited and excludes ICE Futures US, Inc. and its
subsidiaries.
1.1.19
Data
means pre-existing and new Customer data pertaining to its business
(including without limitation as to its Member Firms and their customers) generated,
modified and/or adapted by the Services.
1.1.20
Data Controller
has the meaning set out in the Data Protection Act 1998.
1.1.21
Data Processor
has the meaning set out in the Data Protection Act 1998.
1.1.22
Development Services
means the services described in Schedule 1 relating to the
development phase of the Services.
1.1.23
Disclosing Party
means a party which discloses Confidential Information to the
other party.
1.1.24
Disengagement Plan
means the disengagement plan set out in Schedule 4 as the same
may be amended from time to time in accordance with this Agreement.
1.1.25
Emissions Contracts
means Contracts over or in respect of emissions of Sulphur
Dioxide, Nitrous Oxide, Carbon Dioxide, or Contracts over or in respect of Certified
Emissions Reductions..
1.1.26
Energy Contracts
means Contracts over or in respect of oil and oil products,
ethanol, palm oil, biofuels, coal, natural gas, and electricity.
1.1.27
Exchange Member Firms
means the members of the market place operated by ICE
Futures Europe.
1.1.28
Force Majeure
has the meaning given to that term in Clause 20.
1.1.29
Go Live Date
means the date on which the Services become operational in accordance
with the provisions of Schedule 1. For the avoidance of doubt, the Go Live Date shall
not be before the date on which ICE Futures Europe and/ or ICE Futures US Inc and/ or
any Affiliate or associated companys current clearing contract with LCH.Clearnet
terminates or expires.
1.1.30
ICE Futures Europe
means the company established under the laws of England and
Wales being a recognised investment exchange (Recognised Investment Exchange) for
the purposes of section 285 of the Financial Services and Markets Act of 2000, having
its principal place of business at International House, 1 St. Katharines Way, London
E1W 1UY, an Affiliate of the Customer.
1.1.31
ICE Futures US, Inc.
means the Derivatives Contract Market (DCM) operated by ICE
Futures US, Inc., an Affiliate of the Customer, with headquarters at the World
Financial Center, One North End Avenue, 13
th
Floor, New York, New York
10282, USA, formerly known as NYBOT or the New York Board of Trade.
1.1.32
Incentive Scheme
means the applicable debits or bonuses against Service Levels
provided herein accruing and calculated in accordance with the process outlined in
Schedule 3
1.1.33
Indexation
means the adjustment of the sum or figure in question by the addition
of a percentage of that sum or figure which is equal to 75% of the percentage increase
in the Retail Price Index (
RPI
) produced by the
1.1.34
Intellectual Property Rights
means copyright, database rights, domain names,
patents, design rights (registered and unregistered), trade marks, confidential
information, know-how and any and all like rights of whatever nature subsisting in any
country.
1.1.35
Liability
means any loss, damage, liability, expenses or costs whether arising in
contract, tort (including negligence), under statute, statutory provision regulation
or otherwise.
1.1.36
Market Competitor
means an exchange, trading system or facility, platform, any
other type of market, or clearing house, or any Affiliate thereof, that offers
execution and/or clearing services in connection with products that are the same as or
substantially similar to, or which can be used as substitutes for, the OTC Contracts
or Futures Contracts which form a material part of the business of the Customer or any
Affiliate of the Customer save that NYSE Euronext Inc., or any Affiliate thereof,
shall not be deemed to be a Market Competitor of the Customer . For the avoidance of
doubt, the New York Mercantile Exchange is a Market Competitor of the Customer.
1.1.37
Member Firm
means a broker or a trading company (including any agent or customer
of a Member Firm) which is a registered Clearing Member of the Customer and is
authorised by the Customer to use CPS and/or TRS.
1.1.38
OTC Contracts
means those contracts those OTC contracts (including forwards,
swaps, differentials, spreads, and options) available for trading on the electronic
OTC market operated by ICE, Inc. on the Commencement Date.
1.1.39
Recipient Party
means a party which receives Confidential Information from the
other party.
1.1.40
Regulatory Authority
means, in the UK, the Financial Services Authority (
FSA
),
and any comparable authority which exercises a regulatory or supervisory function
under the laws of any jurisdiction in relation to financial services, the financial
markets, exchanges or clearing organisations.
1.1.41
Relief Event
means any: (i) act or omission of the Customer, its officers,
directors, employees, agents or sub-contractors in relation to its obligations set out
in this Agreement; and, (ii) any delay or failure by the
1.1.42 | Representative has the meaning given to that term in Clause 10.1. | ||
1.1.43 | Service Level means a performance standard set out in the Service Level Agreement in accordance with which the Supplier is to provide the Service to which it relates. | ||
1.1.44 | Service Level Agreement or SLA means the service level agreement set out in Schedule 2 as the same may be amended from time to time in accordance with this Agreement. | ||
1.1.45 | Services means those services more particularly described in Schedule 1.. | ||
1.1.46 | Source Code means the human readable version of the applicable software which has not been compiled or interpreted by a computer system and all documentation and materials related thereto. | ||
1.1.47 | Staff mean the Suppliers employees, sub-contractors or consultants engaged in the provision of the Services. | ||
1.1.48 | Term means the period from the Commencement Date until [***]. | ||
1.1.49 | " Clearing Day means a day upon which the Customer is open for business . | ||
1.1.50 | The NCC Group means the independent information technology assurance, security and consultancy service provider whose registered office is at Manchester Technology Centre, Oxford Road, Manchester, M1 7EF. | ||
1.1.51 | TRS or Trade Registration System means the Suppliers proprietary trade registration system used to provide real time matching of trades carried out by Member Firms and Exchange Member Firms. | ||
1.1.52 | Working Day means any day other than a Saturday, Sunday, bank or other public holiday in England and Wales. |
1.2 | In this Agreement:- |
1.2.1 | unless the context otherwise requires all references to a particular Clause or Schedule shall be a reference to that Clause or Schedule in or to this Agreement as it may be amended from time to time pursuant to this Agreement; |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
1.2.2
unless the contrary intention appears words denoting persons shall include
any individual, firm, partnership, company, or other body corporate, corporation,
joint venture, trust, association, organisation or other entity, in each case whether
or not having separate legal personality;
1.2.3
reference to any statute, statutory provision or regulation includes any
modification, amendment, re-enactment or replacement of that statute, statutory
provision or regulation;
1.2.4
any reference to a day shall mean a period of 24 hours running from
midnight to midnight;
1.2.5
references to indemnifying any person against any
circumstance include
indemnifying and keeping him harmless from all actions, claims and proceedings from
time to time made against him and all loss, damage, payments, cost or expenses
suffered made or incurred by him as a consequence of that circumstance;
1.2.6
If there is any conflict or inconsistency between the terms and conditions
of Parts A-D herein and the Schedules, such conflict or inconsistency shall be
resolved in accordance with the following order of priority:
1.2.6.1
the terms and conditions of Parts A-D herein; and
1.2.6.2
the Schedules.
2. | PROVISION OF SERVICES |
2.1 | The Supplier shall provide the Development Services from the Commencement Date and the entirety of the Services from the Go Live Date to the Customer subject to and in accordance with the terms and conditions of this Agreement. | |
2.2 | The Supplier warrants to the Customer that it shall: |
2.2.10 | have the full power and authority to enter into this Agreement and to perform all of its obligations under this Agreement; | ||
2.2.11 | supply the instance of CPS, together with all data within CPS, to the Customer which, at the Business Day prior to the Go Live Date, interfaces with the instance of TRS provided by the Supplier to ICE Futures Europe. |
2.3 | The Customer warrants that it shall: |
2.4 | Subject to Clauses 2.2 and 2.3 above (together with any express provision of this Agreement indicating the contrary) and to the extent permitted by law, all other implied warranties and representations in relation to the Services and any other matter arising under this Agreement are expressly excluded. | |
2.5 | If the Supplier fails to provide the Services or any aspect thereof in accordance with the SLA or is aware (on a reasonable basis) of any such likely failure which has not yet occurred, the Supplier shall promptly report each such failure (or potential failure) to the Customer. | |
2.6 | For the avoidance of doubt, the Services provided by the Supplier only allow the Customer to clear products as outlined in Schedule 1. They do not allow the Customer to clear products or process trades in respect of contracts falling outside of the expressly stated scope of use set out at Schedule 1. To the extent the Customer requires the Services to apply to additional contracts and to have them included within the scope of this Agreement at a future date, the parties shall agree and discuss the consequent changes required to this Agreement (including costs) and, subject to agreement, shall implement them by way of a letter amendment to these terms and conditions and appropriate Change Requests in respect of the Services. Any use of the Services or submission of data for processing by the Customer in contravention of Schedule 1 (i.e. contrary to the scope of use set out in this Agreement) will be deemed a material breach of this Agreement. |
3. | BUSINESS CONTINUITY PLANS |
3.1 | No later than 90 days after the Commencement Date, the Supplier, working in conjunction with the Customer, shall submit to the Customer a business continuity plan to secure the continued performance and operational resilience of the Services (the Business Continuity Plan ) (in specified circumstances including in the event of a Force Majeure event) which shall take appropriate account of the Suppliers regulatory obligations . | |
3.2 | The Supplier shall maintain and where appropriate revise the Business Continuity Plan periodically in accordance with Best Industry Standards and, in consultation with the Customer, in accordance with the Customers regulatory obligations. Any such revisions shall be entirely for the account of the Supplier. | |
3.3 | The Supplier shall implement the Business Continuity Plan throughout the Term in accordance with the provisions of the Business Continuity Plan and shall also include specific testing arrangements. |
4. | TECHNOLOGY REFRESH AND SERVICES ENHANCEMENT |
4.1 |
The Supplier shall monitor market practice in the United Kingdom in relation to the provision
of services equivalent to the Services to ensure that it maintains provision of the Services
and the performance levels contained in the Service Level Agreement to levels commensurate
with Best Industry Standards, as appropriate. As a result of such monitoring, the Supplier
shall provide to the Customer,
on a |
4.2 | Any request by the Customer to implement improvements or upgrades notified by the Supplier pursuant to Clause 4.1 shall constitute a Change Request. | |
4.3 | The Supplier shall at all times during this Agreement be responsive to the Customers diverse and changing business needs and shall discuss with the Customer whether these should result in modifications to the Services which shall be effected using the Change Control Procedure or as otherwise agreed between the parties. |
5. | SERVICE LEVEL AGREEMENT REVIEW |
5.1 | At least once quarterly, the Governance Committee (as defined in Schedule 6) shall meet in accordance with the provisions of Schedule 6. |
6. | CHANGE REQUEST |
6.1 | All Change Requests will be handled in accordance with the Change Control Procedure. | |
6.2 | The Supplier will conduct a risk assessment of each Change and will advise the Customer of that assessment. Where the Supplier and Customer disagree as to the risk associated with a Change Request the matter will be escalated to Contract Management in accordance with Schedule 6. |
7. | DELAYS IN PROVISION OF SERVICE |
7.1 | The Supplier shall provide the Services on the Go Live Date. | |
7.2 | Subject to clause 18 if the Services are not provided by the Go Live Date, the Supplier shall be liable for any reasonable costs up to a maximum of 25% of the Charges payable by the Customer to the Supplier for the first 12 months of the Term, that the Customer can demonstrate it incurred as a direct result of such delay. | |
7.3 | For the avoidance of doubt, the Supplier shall not be liable for any delays, and any costs/ expenses or losses incurred by the Customer in relation to such delays, if such delay was caused as a result of a Force Majeure or a Relief Event. |
8. | RELIEF EVENTS |
8.1 | To the extent that the Supplier is prevented or delayed in performing the Services as a direct result of a Relief Event, (a) the Supplier shall be granted an appropriate extension of time in respect of the performance of those Services or, at the Customers option, a waiver of such performance, and shall not be liable with respect to such prevented or delayed performance and (b) any Service Levels and |
delivery schedules applicable to such Services shall be adjusted or extended accordingly. |
9. | CONTRACT MANAGEMENT |
9.1 | The parties shall perform their respective obligations in accordance with the provision of Schedule 6. In doing so, the Supplier shall appoint a Service Manager in accordance with Schedule 6 to serve as the individual responsible for the day to day management of the relationship the parties have with respect to the Services. The Customer shall appoint a Relationship Manager in accordance with Schedule 6 to serve as the individual responsible for liaising with the Service Manager. |
10. | REPRESENTATIVE |
10.1 | The Customer and the Supplier shall each nominate a Representative ( Representative ) who shall be the Account Manager for either Party, as outlined in Schedule 6, and who shall have full authority to take all necessary decisions regarding the provision of the Services and the other obligations of the party nominating such Representative under this Agreement including any variation to this Agreement. The Representative of each party must at all times be an employee, contractor or agent of that party. The first such appointments are set out in Schedule 6. Each party may replace the Representative from time to time provided that it has obtained the prior written approval of the other party, such approval not to be unreasonably withheld or delayed. Each party shall ensure that its Representative has full authority to bind it in connection with its obligations under or pursuant to this Agreement. | |
10.2 | Where, in this Agreement, any decision, consent, approval, notice or certification is required to be given by a party, it shall be sufficient for such decision, consent, approval, notice or certification to be given by that partys Representative without any further enquiry or action by the other party. |
11. | PAYMENT |
11.1 | The Supplier shall raise invoices and the Customer shall pay Charges to the Supplier in accordance with the payment provisions and procedures set out in Schedule 3. | |
11.2 | In addition to the Charges, the Customer shall: |
11.2.1 | pay the Supplier for such additional work carried out in accordance with any agreed Change Request(s); and | ||
11.2.2 | reimburse the Supplier for reasonable travelling, accommodation and other expenses provided that the Supplier obtains the Customers prior written consent to incur such expenses; and | ||
11.2.3 | pay the Supplier as outlined in the Incentive Scheme in Schedule 3 in accordance with the payment terms of this Agreement. |
11.3 | Each invoice submitted by the Supplier which is not reasonably disputed by the Customer in accordance with the dispute resolution procedure outlined in clause 27 shall be payable within 28 days of its receipt by the Customer. | |
11.4 | The Charges shall be subject to Indexation on each anniversary of the Commencement Date. | |
11.5 | The Supplier shall notify the Customer of the amount of the increase within 28 days of each such anniversary and shall be entitled to add to any subsequent invoice an amount which reflects that the Indexation to the Charges will be effective from each such anniversary. | |
11.6 | All payments under the terms of this Agreement are expressed to be exclusive of Value Added Tax, or similar tax, howsoever arising and the Customer shall pay to the Supplier in addition to those payments or if earlier on receipt of a valid tax invoice or invoices from the Supplier, all Value Added Tax in relation to any supply made or deemed to be made for Value Added Tax purposes pursuant to this Agreement. | |
11.7 | The Supplier shall indemnify the Customer against any liability (including any interest, penalties, or costs incurred) which is levied, demanded or assessed on the Customer at any time in respect of the Suppliers failure to account for, or to pay any VAT relating to the payments made by the Supplier under this Agreement. | |
11.8 | Without prejudice to any other right or remedy of the Supplier, if the Supplier does not receive payment of any invoice due to it under this Agreement (unless such invoice is reasonably disputed by the Customer) on the due date for payment, interest will accrue 30 days from the due date for payment at the rate of 2.5% per month above LIBOR on such outstanding invoice from the date payment is due until payment in full. Interest under this Clause 11.8 shall accrue from day to day and shall be paid by the Customer on demand. | |
11.9 | Subject to Clause 11.3, the Customer shall not be entitled to withhold any amount payable to the Supplier under this Agreement. |
11.10
Both Parties together acknowledge and agree that the bonus and debit scheme specified in
Schedule 3, the Incentive Scheme, represents a genuine pre-estimate of the specific loss
which may be suffered by the Customer.
12. | CONFIDENTIALITY |
12.1 | Each Recipient Party undertakes and agrees to: |
12.1.1 | use the Confidential Information solely for the purposes envisaged under this Agreement and not use the same for any other purpose whatsoever; | ||
12.1.2 | ensure that only those of its officers, employees and advisors who are directly concerned with the carrying out of this Agreement and who need to know the Confidential Information have access to the Confidential Information; and | ||
12.1.3 | keep the Confidential Information secret and confidential and shall not directly or indirectly disclose or permit to be disclosed the same to any third party for any reason without the prior written consent of the Disclosing Party. |
12.2 | The Supplier shall not, and shall procure that its Staff and other officers, employees and advisors do not use any of the Customers Confidential Information received otherwise than for the purposes of this Agreement. | |
12.3 | At the written request of the Customer, the Supplier shall procure that its Staff and each officer, employee or advisor identified in the Customers request signs a confidentiality undertaking prior to commencing any work in connection with this Agreement. | |
12.4 | The obligations of confidence referred to in Clause 12.1 shall not extend to any Confidential Information which: |
12.4.1 | is or becomes generally available to the public otherwise than by reason of breach by the Recipient Party of the provisions of this Clause; | ||
12.4.2 | is known to the Recipient Party and is at its free disposal prior to its disclosure by the Disclosing Party; | ||
12.4.3 | is subsequently disclosed to the Recipient Party without obligations of confidence by a third party owing no such obligations to the Disclosing Party in respect of that Confidential Information; | ||
12.4.4 | is required by law to be disclosed; or, | ||
12.4.5 | is required by any Regulatory Authority to be disclosed. |
13. | DIRECT ENGAGEMENT |
13.1 | During the term of this Agreement and for 12 months thereafter neither party shall solicit, entice or offer employment to any person employed or engaged by the other party without the express written consent of the other party except where such person is recruited as a result of an otherwise unsolicited response to a public recruitment advertisement. If a party breaches this Clause 13, that party shall pay to the other a sum equivalent to such persons total compensation for his first 12 months work for any person other than the party which employed him. The parties agree that such sum, constituting liquidated damages, represents a |
fair estimate of the cost to the party which employed the person of recruiting a suitable replacement for such person. |
14. | DATA PROTECTION |
14.1 | With respect to the parties rights and obligations under this Agreement, the parties agree that the Customer is the Data Controller and that the Supplier is the Data Processor. | |
14.2 | The Customer warrants that all personal data held by the Customer to be processed by the Supplier under this Agreement ( Customer Personal Data ) has been or will be obtained and processed by the Customer (in so far as such data has been or will be processed by the Customer) in accordance with the Data Protection Act 1984 and to the extent superseded thereby the Data Protection Act 1998 and all associated regulations (the Acts ) and in a manner which permits the Supplier to perform its obligations under this Agreement in compliance with the Acts. | |
14.3 | Each party warrants to the other that: |
14.3.1 | it is, and at all times during the term of this Agreement will be, adequately and appropriately registered under the Acts in order to comply with its obligations under this Agreement; and | ||
14.3.2 | it will at all times during the term of this Agreement comply with the Acts in performing its obligations under this Agreement. |
14.4 | The Supplier shall: |
14.4.1 | process the Customer Personal Data only on behalf of the Customer only for the purposes of performing this Agreement and only in accordance with instructions contained in this Agreement or received from the Customer in writing from time to time; | ||
14.4.2 | not otherwise modify, amend or alter the contents of the Customer Personal Data or disclose or permit the disclosure of any of the Customer Personal Data to any third party unless specifically authorised in writing by the Customer; | ||
14.4.3 | at all times comply with the provisions of the Seventh Data Protection Principle set out in Schedule 1 of the Data Protection Act 1998 and, in so doing, provide a written description of the technical and organisational methods employed by the Supplier for processing the Customer Personal Data (within the timescales required by the Customer) and implement appropriate technical and organisational measures to protect the Customer Personal Data against unauthorised or unlawful processing and against accidental loss, destruction, damage, alteration or disclosure; | ||
14.4.4 | take reasonable steps to ensure the reliability of any Staff who has access to the Customer Personal Data; | ||
14.4.5 | obtain prior written consent from the Customer before transferring the Customer Personal Data to any sub-contractors in connection with the provision of the Services; |
14.4.6 | ensure that only those of the Staff who need to have access to the Customer Personal Data are granted access to such data and only for the purposes of the performance of this Agreement and all of the Staff required to access the Customer Personal Data are informed of the confidential nature of the Customer Personal Data and comply with the obligations set out in this clause 14; | ||
14.4.7 | not publish, disclose or divulge any of the Customer Personal Data to any third party unless directed to do so in writing by the Customer; |
14.5 | The parties shall, and the Supplier shall procure that its Staff shall, comply at all times with the Data Protection legislation and shall not perform their obligations under this Agreement in such a way as to cause either party to breach any of its obligations under the Data Protection legislation. The Supplier shall immediately notify the Customer in the event that it becomes aware of any breach of the Data Protection Legislation by the Supplier or any of the Staff in connection with this Agreement; | |
14.6 | The Supplier shall, at all times during and after the Term, subject to Clause 18, indemnify the Customer and keep the Customer indemnified against all losses, damages, costs or expenses and other liabilities (including legal fees) incurred by, awarded against or agreed to be paid by the Customer arising from any breach of the Suppliers obligations under this clause 14 except and to the extent that such liabilities have resulted directly from the Customers instructions. |
15. | INTELLECTUAL PROPERTY RIGHTS |
15.1 | Subject to clause 15.4 all Intellectual Property Rights created by the Staff in the course of providing the Services to the Customer under this Agreement in modifications and enhancements to any Existing Materials (as defined below) ( Project IPRs ) shall remain the property of the Supplier. | |
15.2 | In respect of programs, specifications, designs or reports (including data) which are pre-existing or are an adaptation of or derived from existing materials, including any adaptations made to such programs, specifications, designs or reports pursuant to the Change Control Procedure (together Existing Materials ) which are made available as part of the provision of the Services the ownership of the intellectual property rights in such Existing Materials remains with the owner thereof. | |
15.3 | Neither party shall delete proprietary information or trade mark notices if any appear on any software or documentation supplied to it by the other at any time. Further, both parties shall ensure that all copies of software or documentation created or supplied by them under the provisions hereof shall carry a copyright notice. | |
15.4 | The Supplier grants to the Customer the following licences: |
15.4.1 | a non-exclusive non-transferable royalty free licence for the duration of the Term to use the Existing Materials for its own internal business purposes only in accordance with Schedule 1. | ||
15.4.2 | a non-exclusive, non-transferable royalty free licence for the duration of the Term to use the Project IPRs for its own internal business purposes only in accordance with Schedule 1. The Customer agrees that: |
a. | it may not permit any third party to use the Project IPRs and shall not make any related documentation available to any third party; and | ||
b. | it will use the Project IPRs in accordance with any conditions contained in the Service Level Agreement. |
15.5 | It being understood that in the event that the use of the Existing Materials or the Project IPRs needs to be licensed to a third party agent of the Customer (which might for the avoidance of doubt, include Affiliates of the Customer) for the purposes of ensuring that the Services can be appropriately implemented, then the Supplier shall grant a limited licence for the purposes of ensuring the appropriate implementation of the Services. | |
15.6 | The Parties agree that breach of these license terms will automatically be deemed a material breach of this Agreement. | |
15.7 | The Supplier represents and warrants that it will not infringe the Intellectual Property Rights of any person or entity in the provision of the Services. | |
15.8 | Either party (the Indemnifying Party ) shall indemnify and keep indemnified the other (the Indemnified Party ) against any and all Liability suffered by the Indemnified Party as a result of any claim by a third party that the use of the Services or Existing Material or the Project IPRs which the Indemnifying Party has licensed to or supplied to the Indemnified Party to use by the Indemnified Party in accordance with this Agreement infringes the Intellectual Property Rights of that third party provided that: |
15.8.1 | the Indemnifying Party is given notice of the claim as soon as reasonably practicable after receipt of a written claim by the Indemnified Party from any such third party; | ||
15.8.2 | the Indemnifying Party is given complete control over such claim, and the Indemnified Party co-operates with the Indemnifying Party at the Indemnifying Partys expense in the conduct of such claim, unless the Indemnifying Party is proposing to make representations and/or statements in relation to the Indemnified Party, in which event the Indemnifying Party may only make such representations and/or statements that might form part of the Indemnifying partys management of such claim with the approval of the Indemnified Party; | ||
15.8.3 | the Indemnified Party does not prejudice the Indemnifying Partys conduct of such claim; | ||
15.8.4 | the Supplier will not be obliged to indemnify the Customer for any claim of infringement based on the: |
c. | use of an altered version of the Existing Materials or Project IPRs; | ||
d. | combination, operation or use of the Existing Materials or Project IPRs with software, hardware, equipment or other materials not supplied by the Supplier; or | ||
e. | use of a superseded version of the Existing Materials or Project IPRs where the Customer has failed to comply with a request by the |
Supplier to install any new version of the Existing Materials or Project IPRs. |
15.9 | The provisions of this clause 15 shall survive termination of this Agreement for any reason. |
16. | TERM AND TERMINATION |
16.1 | This Agreement shall commence on the Commencement Date and shall continue for at least the duration of the Term unless terminated in accordance with the provisions of this clause 16. |
16.2 | At the end of the Term this Agreement shall be automatically renewed for 1 year periods on the mutual agreement of the parties. |
16.3 | Without prejudice to any of its other rights or remedies under this Agreement, either party may terminate this Agreement: |
16.3.1 | During the final calendar year of the Term by providing no less than 12 months written notice to the other party; | ||
16.3.2 | After the end of the Term by providing no less than 12 months written notice to the other party. |
16.4 | Without prejudice to any of its other rights or remedies under this Agreement, Customer may terminate this Agreement |
16.5 | if there is a material delay in the provision of the Services by the Supplier pursuant to Clause 7. |
16.6 | Without prejudice to any of its other rights or remedies under this Agreement, each party (the Terminating Party) shall have the right to terminate this Agreement upon giving written notice of termination to the other party (the Defaulting Party) if the Defaulting Party: |
16.6.1 | commits a material breach of this Agreement which in the case of a breach capable of remedy shall not have been remedied within 30 days of the receipt by it of a written notice from the other party identifying the breach and requiring its remedy; or | ||
16.6.2 | makes any voluntary arrangement with its creditors or becomes subject to an administration or passes a resolution for winding-up (otherwise than for a bona fide reconstruction or amalgamation) or becomes bankrupt or insolvent or goes into liquidation or a receiver or similar officer is appointed over any or all of the assets of the Defaulting Party or the Defaulting Party ceases or threatens to cease to carry on business. |
16.7 | The Supplier may terminate this Agreement by giving written notice to the Customer if the Customer fails to pay any invoice which is not reasonably disputed to the Supplier under this Agreement and has not remedied such failure within 30 days of receiving written notice from the Supplier requiring it to remedy such failure. |
16.8 | Both Parties agree to provide notice (a Change of Control Notice) to the other Party of the earlier of: (i) its execution of any agreement effecting a Change of |
Control with respect to it; or, (ii) its awareness of a transaction that has resulted in
a Change of Control with respect to it. In the event of the Customer receiving a Change of
Control Notice the Customer shall have the right to terminate the Agreement (within three
months of the date of receipt of the Change of Control Notice) on a period of notice that
shall not exceed 12 months, save that it will not be deemed a Change of Control if either
NY Euronext Inc., or an Affiliate, or Atos Origin SA, or an Affiliate, assumes Control of
the Supplier.
16.9
In the event of the Supplier receiving a Change of Control Notice the Supplier shall have the
right to terminate the Agreement (within three months of the date of receipt of the Change of
Control Notice) on a period of notice that shall not be less than 12 months.
16.10
Clauses [12, 13, 16.7, 18, Schedule 4] [Note: Internal referencing to be checked] and any
other provision which expressly or impliedly survives the expiry or termination of this
Agreement shall remain in force notwithstanding the expiry or termination of this Agreement.
17.
CONSEQUENCES OF TERMINATION
17.1
Upon the expiry or termination of this Agreement for whatever reason the parties shall follow
the provisions of the Disengagement Plan as set out in Schedule 4; and the licence of the
Existing Materials and Project IPRs granted to the Supplier under this Agreement shall
terminate automatically and the Supplier shall return all copies of such Existing Materials
and Project IPRs.
17.2
the Supplier shall repay to the Customer any amount which it may have paid in advance in
respect of Services not provided or procured by the Supplier as at the date of termination of
this Agreement..
18.
LIABILITY
18.1
The Supplier acknowledges and agrees that its liability for death or personal injury caused
by its negligence or the negligence of its directors, officers, employees, contractors or
agents or fraudulent misrepresentation shall not be limited.
18.2
Subject to Clauses 7 and 18.1, the Suppliers total liability to the Customer whether in
contract, tort (including negligence) or otherwise in connection with this Agreement shall not
exceed in aggregate the amount paid or payable in charges by the Customer to the Supplier
under the Agreement during the 12 month period prior to the date upon which the events giving
rise to any relevant claim arose, or in the case of a series of events the date upon which the
first of the series occurred
18.3
Subject to Clauses 7 and 18.1, the Customers total liability to the Supplier (other than for
charges properly due and payable under this Agreement) whether in contract, tort (including
negligence) or otherwise in connection with this Agreement shall not exceed the amount paid or
payable in charges by the Customer to the Supplier under the Agreement during the 12 month
period prior to the date upon which the events giving rise to any relevant claim arose, or in
the case of a series of events the date upon which the first of the series occurred
18.4
Subject to Clauses 7 and 18.1, in no circumstances will the Supplier be liable for any loss
of profit, loss of business, loss of goodwill, loss of anticipated savings, loss of data or
any consequential or indirect loss suffered by the Customer unless
such loss(es) arise as a result of the Suppliers breach of its obligations under this Agreement. | ||
18.5 | If either party ( Claiming Party ) wishes to make any claim against the other party ( Defending Party ) under or in connection with this Agreement: |
18.5.1 | the Claiming Party must give written notice to the Defending Party specifying in reasonable detail the reason for such claim and the amount of such claim prior to taking any other action; | ||
18.5.2 | each party must continue to perform its obligations under this Agreement notwithstanding such claim; and | ||
18.5.3 | the Claiming Party must give the notice required under Clause 18.5.1 to the Defending Party as soon as practicable and in any event no later than [two] years after the event or incident giving rise to such claim. |
18.6 | Any failure to comply with the provisions of this Clause 18.5 shall not however invalidate the claim of the Claiming Party in the event that the Claiming Party elects to commence legal proceedings immediately. |
19. | ASSIGNMENT |
19.1 | Neither party may assign any or all of its rights under this Agreement (excepting monies due or to become due) to a third party without the prior written consent of the other, such consent not to be unreasonably withheld. |
19.2 | A party may assign its rights under this Agreement to an Affiliate, Atos Origin S.A. or an Affiliate thereof, or a third party acquiring the entire business of the assigning party without requiring the consent of the other party provided that such Affiliate, Atos Origin S.A. or an Affiliate thereof, or third party first undertakes in writing to the other party to be bound by the terms of this Agreement. |
19.3 | The Suppliers right to assign under the terms of Clauses 19.1 and 19.2 are at all times qualified by the fact that the Supplier may not assign any or all of its rights under this Agreement to a Market Competitor of the Customer. |
19.4 | Except as in the case of an assignment under the terms of Clause 19.1 or 19.2 as appropriate, no term of this agreement shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by a third party. |
20. | FORCE MAJEURE |
20.1 | Neither party shall be liable to the other for any breach or non-performance of this Agreement arising from any event beyond its reasonable control including, without limitation, acts of God, failure or shortage of power supplies, flood, drought, lightning, fire, earthquake, strike, lock-out, trade dispute or labour disturbance, act or omission of Government or any regulatory authority, war, riot, civil disorder, or delay or failure due to any such cause in manufacture, production or supply by third parties of any goods or services required for performance under this Agreement provided that lack of funds shall not constitute an event beyond the reasonable control of either party (each of the above events, a Force Majeure event). However, if the Force Majeure event continues to affect a partys ability to perform its obligations under this agreement for a period exceeding 30 days, either |
party may terminate the agreement by giving the other party written notice without incurring any liability to the other. | ||
20.2 | The Party affected by the Force Majeure will use all reasonable endeavours to mitigate the effect of the Force Majeure. |
21. | SEVERANCE OF TERMS |
21.1 | If the whole or any part of this Agreement is or becomes or is declared illegal, invalid or unenforceable in any jurisdiction for any reason: |
21.1.1 | in the case of the illegality, invalidity or unenforceability of the whole of this Agreement it shall terminate in relation to the jurisdiction in question; or | ||
21.1.2 | in the case of the illegality, invalidity or unenforceability of part of this Agreement, that part shall be severed from this Agreement in the jurisdiction in question and that illegality, invalidity or unenforceability shall not in any way whatsoever prejudice or affect the remaining parts of this Agreement which shall continue in full force and effect. |
22. | ENTIRE AGREEMENT/VARIATIONS |
22.1 | This Agreement constitutes the entire agreement and understanding between the parties in relation to its subject matter and supercedes all prior oral or written understandings, arrangements, representations or agreements between them relating to the subject matter of this Agreement. The parties acknowledge that no claims shall arise in respect of any understandings, arrangements, representations or agreements so superceded. No director, employee or agent of any party is authorised to make any representation or warranty to the other party not contained in this Agreement, and each party acknowledges that it has not relied on any such oral or written representations or warranties. |
22.2 | No variation, amendments, modification or supplement to this Agreement shall be valid unless agreed in writing in the English language and signed by a duly authorised representative of each party. |
23. | NOTICES |
23.1 | Any notice or other communication given pursuant to or made under or in connection with the matters contemplated by this Agreement shall be in writing and shall be delivered by courier, sent by post or sent by facsimile to the address of the recipient set out above or as notified to the other party in accordance with this Clause. Notices sent by e-mail shall not be valid of themselves and must be confirmed in hard copy form by courier, by post or facsimile. |
23.2 | Any notice given pursuant to this Clause shall be deemed to have been received: |
23.2.1 | if delivered by courier, at the time of delivery; or | ||
23.2.2 | if sent by post, on the second Working Day following the day of posting; or | ||
23.2.3 | if sent by facsimile on acknowledgement by the recipient facsimile receiving equipment on a Working Day if the acknowledgement occurs before 1700 hours local time on a Working Day of the recipient and in any other case on the following Working Day. |
24. | THIS AGREEMENT NOT TO CONSTITUTE A PARTNERSHIP |
24.1 | Nothing in this Agreement and no action taken by the parties pursuant to this Agreement shall constitute or be deemed to constitute a partnership, association, joint venture or other co-operative entity between the parties and neither party shall have any authority to bind the other in any way except as provided in this Agreement. |
25. | WAIVER |
25.1 | Save as expressly provided in this Agreement neither party shall be deemed to have waived any of its rights or remedies whatsoever howsoever arising unless the waiver is made in writing, signed by a duly authorised representative of that party and may be given subject to any conditions thought fit by the grantor. Unless otherwise expressly stated any waiver shall be effective only in the instance and for the purpose for which it is given. |
25.2 | No delay or failure of either party in exercising or enforcing any of its rights or remedies whatsoever shall operate as a waiver of those rights or remedies or so as to preclude or impair the exercise or enforcement of those rights or remedies. No single or partial exercise or enforcement of any right or remedy by either party shall preclude or impair any other exercise or enforcement of that right or remedy by that party. |
26. | ANNOUNCEMENTS |
26.1 | Both parties agree not to make any public announcements about the existence or contents of this Agreement without the prior notice to and the written approval of the other Party, unless such announcement is required by law or regulation. |
27. | DISPUTE RESOLUTION |
27.1 | Any dispute which may arise with respect to any matter or thing arising out of or in relation to this Agreement shall be dealt with in accordance with the Contract Management procedure as set out in Schedule 6 |
28. | REGULATORY CHANGES |
28.1 | The Parties shall be responsible pursuant to the Change Control Procedure for making such modifications as are necessary to take into account any changes to existing financial services legislation, rules and regulations or any such new legislation, rules and regulations which have an impact (either directly or indirectly) on the provision of the Services or any part thereof and which are outside the scope of Clause 28.2, below. |
28.2 | The Parties shall also be responsible, at the Customers expense, for making such modifications as are necessary to take into account: |
28.2.1 | any changes to existing commodities or derivatives trading legislation and statutory restrictions or any such new legislation and regulations relating specifically to the commodities or derivatives trading industry noted to the Supplier by the Customer and which have an impact (either directly or indirectly) on the provision of the Services or any part thereof; and/or |
28.2.2 | any changes which are deemed necessary by the Customer or a Regulatory Authority. |
28.3 | The changes referred to above in Clauses 28.1 and 28.2 ( Regulatory Changes ) shall be implemented by way of the Change Control Procedure. For the avoidance of doubt, the Supplier shall not be able to decline to perform any Regulatory Change deemed necessary by the Customer as long as the Customer agrees to the Charge for the Regulatory Change. |
29. | AUDIT |
29.1 | The Customer or the Regulatory Authority (for the purposes of this clause references to the Customer shall be deemed to include the Regulatory Authority) shall have the right, from time to time and upon 7 Working Days written notice to the Supplier, to conduct an audit of the compliance by the Supplier with its obligations under this Agreement and the changes made by Supplier in performing such obligations (an Audit). The Audit must be in relation to, matters specified by the Customer in such notice, the assessment of the proper amount of any payment made or to be made hereunder, or, the performance by the Supplier of its obligations under this Agreement (Audit Matters). The Audit may be conducted by such professional auditors or advisers as the Customer may decide to appoint and notify to the Supplier. |
29.2 | For the avoidance of doubt, the categories of information that may be sought under this provision shall only be that which is necessary for the reasonable assessment of the Audit Matters specified in any notice issued by the Customer under Clause 29.1 above. |
29.3 | The Supplier shall provide to the Customer and its advisers such assistance and facilities and access to such premises, accounts, invoices, documents and information as it shall reasonably require for the purposes of any Audit. The Supplier shall provide the Customer with copies of relevant accounts, invoices, documents and information in such form as the Customer or its advisers shall reasonably require, but only to the extent that such accounts, invoices, documents and information relate to the Audit Matters. |
29.4 | The Customer shall be entitled to conduct an Audit at such times as it may reasonably require subject to a maximum of one Audit in any 6 month period, provided that such maximum shall not apply (and neither shall the advance notice period specified in Clause 29.1) where the Customer bona fide believes that there is a material non-compliance (as the case may be) by Supplier with any of its obligations under this Agreement which an Audit may detect or of which an Audit may provide details. |
29.5 | The Customer shall: |
29.5.1 | use its reasonable endeavours to minimise any disruption to the Suppliers operations or the performance of the Services caused by an Audit; and | ||
29.5.2 | ensure that all of the employees and agents are under a duty of confidence in relation to any information disclosed or made available to them by the Supplier for the purpose of that Audit. |
29.6 | The Customer shall pay all reasonable costs incurred by the Supplier in relation to any Audit. |
30. | DATA SECURITY |
30.1 | In the event of a loss, corruption or destruction of Data attributable to the Customers failure to perform its obligations under this Agreement, the Supplier shall take such steps which someone using Best Industry Standards would take to recover, retrieve and reconstruct any such lost, corrupted or destroyed Data as appropriate. The Customer shall pay all reasonable costs incurred by the Supplier in relation to such reconstruction. |
30.2 | Subject to Clause 18, the Supplier hereby indemnifies and undertakes to keep the Customer indemnified in respect of any loss, corruption or destruction of Data caused by the act or omission of the Supplier, calculation of any such loss to take reasonable account of any successful reconstruction under sub-Clause 30.1 |
31. | INSURANCE |
31.1 | The Supplier warrants and represents to the Customer that it has the benefit of policies of insurance with reputable insurers which are sufficient to cover its responsibilities and obligations under this Agreement including, inter alia, in respect of loss or damage to tangible property and professional indemnity for amounts suitable to cover such liability. |
32. | ESCROW |
32.1 | The parties shall, within 90 days of execution of this Agreement, enter into an escrow agreement in respect of the Source Code of the Existing Materials and Project IPR (the Escrowed Material) with the NCC Group for the provision of a full validation escrow service (the Escrow Agreement) in accordance with the Escrow Order Form outlined in Schedule 8. The Supplier shall, from time to time, deliver into escrow with NCC further Source Code in the Project IPR as it is created and in accordance with the terms of the Escrow Agreement with NCC. |
32.2 | In accordance with the terms of the Escrow Agreement NCC will release the Escrow Material to the Customer if the Supplier: (a) materially breaches the Agreement in a manner giving rise to a termination right on the part of the Customer; (b) becomes insolvent or unable to pay its debts and/or perform its obligations in the ordinary course of business; or, (c) becomes the subject of any voluntary or involuntary proceeding in bankruptcy, liquidation, dissolution, receivership, attachment or composition, or makes a general assignment for the benefit of creditors. The Customers licence rights to released Escrow Material will be sufficient to permit the Customer to perform the Services with the addition of the rights to use, reproduce and create derivative works of the released Escrow Material and to distribute, perform and display (publicly or otherwise) such derivative works, all in connection with the sole purpose of implementing, operating and maintaining the Services. |
33. | GOVERNING LAW AND JURISDICTION |
33.1 | This Agreement shall be governed by and construed in accordance with English law and the parties hereby submit to the exclusive jurisdiction of the courts of England and Wales. |
33.2 | Any proceedings relating to any claim or matter arising under or in connection with this Agreement instituted against either party by the Customer may be brought in the courts of England and Wales . |
SIGNED by
|
) /s/ K. Tregidgo | |
for and on behalf of
|
) Head of Strategy | |
ATOS EURONEXT MARKET
|
) | |
SOLUTIONS LIMITED
|
) | |
|
||
SIGNED by Sir Bob Reid
|
) /s/ Sir Bob Reid | |
for and on behalf of
|
) Board of Directors | |
ICE CLEAR EUROPE LIMITED
|
) | |
|
||
SIGNED by Paul Swann
|
) /s/ Paul Swann | |
for and on behalf of
|
) President & Chief Operating Officer | |
ICE CLEAR EUROPE LIMITED
|
) |
1.1.1 | The managed services which together constitute CPS provided by the Supplier are defined as follows: |
| Scope of Use defining the business transactions that are permitted to utilise the functional services | ||
| Functional Services defining the high level functional services available to the Customer and their clients | ||
| Environments for each requested instance of the Function Services, service characteristics and capacity requirements are defined. | ||
| Support Services additional services required for the managed service |
1.1.2 | Changes to the Services shall be by Change Request, as set out in Schedule 5, Change Control Procedure. |
1.2.1 | The Services are restricted to Energy Contracts and Emissions Contracts (including, futures, options on futures, forwards, swaps, differentials, spreads and options) to the extent traded on markets owned and operated by ICE Inc, ICE Futures Europe Ltd and European Climate Exchange Ltd. | ||
1.2.2 | Such service scope may be extended or otherwise amended by prior written agreement of the Parties from time to time, in accordance with the Change Control Procedures set out in Schedule 5. |
1.3.1 | Clearing Functions |
| Position keeping the automatic maintenance of positions as post-trade functions are performed | ||
| Position search the ability to review current and historical position data | ||
| Settlement instruction entry, edit and search the management of long and short positions | ||
| Position transfer instruction entry, edit and search the movement of volume between position accounts | ||
| Exercise instruction entry, edit and search nomination of options positions for exercise | ||
| Automatic Exercise instruction edit and search position selection criteria for options expiry processing | ||
| Tender Deletion instruction entry, edit and search manual deletion of positions awaiting delivery |
| Margin Exclusion Instruction entry, edit and search manual omission of delivery positions from margin calculation | ||
| Delivery instruction entry edit and search manual early notification of an intention to deliver |
1.3.2 | Clearing Processing Service |
| Clearing instruction processing the processing of settlement, transfer, exercise, delivery, tender deletion and margin exclusion instructions to update positions | ||
| Variation margin calculation the calculation of realised and unrealised profit and loss | ||
| Initial margin calculation the calculation of initial margin liability using the London SPAN algorithm |
1.3.3 | Management Functions |
| Contract expiry date entry, edit and search | ||
| London SPAN parameter maintenance | ||
| Clearing price entry, edit and search | ||
| Validate and load standing data files | ||
| Load clearing prices | ||
| Calculation of options volatility values | ||
| Monitor and control intraday and end-of-day clearing processes | ||
| Generation and dissemination of London SPAN risk arrays |
1.3.4 | Systems Integration Functions |
| TRAMP interface an electronic messaging interface through which the Customer and their clients can perform Post-Trade Functions | ||
| TSCS Feed an electronic feed of audit events providing the Customer and their clients details of: |
o | Trade and claim changes |
o | Clearing instruction changes | ||
o | Clearing processing changes | ||
o | Initial and Variation margin values | ||
o | End of day position details | ||
o | System events |
1.3.5 | File Transfer Service |
| Files transferred from Supplier to Customer: |
o | Trade File | ||
o | SPAN File | ||
o | Position File | ||
o | Margin File | ||
o | Position Note File | ||
o | Open Interest File |
| Files transferred from Customer to Supplier: |
o | Banking Reports |
Characteristic | Value | |
Resilience Model
|
Fault Tolerant (service will be provided on hardware hosted in two geographically-separated Tier 4 data centres, connected via diversely-routed telecommunications channels. The hardware in each data centre shall be capable of delivering the services to the specified capacity. The functional services may be provided by system components in both data centres. Data shall be protected using Raid 5 technology and inter-data centre disk mirroring technology. Failure of a single hardware or software component or an entire data centre will not cause significant interruption to the services) | |
|
||
Service Capacity
|
Monthly Futures Contracts: 150 | |
|
Monthly Futures Expiries: 3,500 | |
|
Daily Futures Contracts: 60 | |
|
Daily Futures Expiries: 3,000 | |
|
Options Contracts: 10 | |
|
Options Expiries: 200 | |
|
Options Series: 30,000 | |
|
Daily Half-trades recorded: 950,000 | |
|
Open Positions (single day): 50,000 | |
|
Open Positions (historical): 6,000,000 | |
|
Interactive (GUI) Users: 250 | |
|
Electronic (TRAMP/TSCS) Users: 100 | |
|
||
Clearing Functions Start Time
|
07:00 each Clearing Day | |
|
||
Clearing Functions Close Time
|
24:00, or until End of Stream 1 , each Clearing Day |
1.5.1 | Change Control Function An agreed process for notifying the Customer of planned changes to the services provided by the Supplier, and for the submission of change requests (both system enhancement and product configuration) by the Customer to the Supplier will be documented and subject to performance targets. | ||
1.5.2 | Call Management Service The staffing of a Supplier service desk with agreed call management performance criteria and response times subject to agreed maximum peak and average levels of calls. | ||
1.5.3 | Incident Management Service A system for the categorisation of incidents relating to any of the services provided by severity according to agreed criteria, with associated limits on time to resolution. | ||
1.5.4 | Software Maintenance Service The correction of known or suspected errors, through the release of specific fixes, service packs or full software releases. | ||
1.5.5 | Service Level Management Service The provision of agreed schedules detailing service statistics by the Supplier. Separate review processes will periodically determine service, performance and capacity thresholds, Change Management plans, and maintenance schedules. Service levels will be subject to review at the service review meetings and may be subject to change as agreed at those meetings. | ||
1.5.6 | Backup and Restore Service The Supplier will employ a backup scheme agreed with the Customer with standards for frequency, scope and data retention time. Requests for restoration of historical data (in a non-disaster/BCP context) will be subject to performance targets. | ||
1.5.7 | Disaster Recovery Service The Supplier will provide a continuously-available hot standby facility for the provision of the Services in the event of a disaster affecting the data centre where CPS is currently running. Agreed schedules will be in place for the testing of the facility and production of statistics and reports from the testing. | ||
1.5.8 | IMAC Service The Supplier will provide a service to process requests for infrastructure installations, moves and ceases (IMAC). Infrastructure represents connectivity between the Suppliers data centres and the Customer and their clients |
1.1. | 1 End of Stream (EOS) is the last event recorded in the TRS Audit Stream for a trading day, and represents the end of processing. |
2.1.1 | The Supplier will support and maintain all services, hardware and system software that comprises the Services to ensure that the application performs in accordance with its appropriate functional specification and that performance targets are met as specified in section 2.5. | ||
2.1.2 | The Supplier shall, in each month following the Go Live Date, measure the performance for each of the Service Levels at the specified Service Target(s). | ||
2.1.3 | Service Requests | ||
2.1.4 | Requests for modifications to the Services will be handled as set out in Schedule 5 Change Control Procedure. | ||
2.1.5 | Availability | ||
2.1.6 | The Supplier agrees to make the Services available to the Customer in accordance with section 2.5. | ||
2.1.7 | Service Level | ||
2.1.8 | The Supplier agrees to provide the Services to service levels in accordance with section 2.5. | ||
2.1.9 | For maintenance of the Services, Supplier will respond to reported faults in line with section 2.5. | ||
2.1.10 | Customer Responsibilities | ||
2.1.11 | The Customer shall use the Services in accordance with the user manuals as at the Go Live Date, and updates as issued by the Supplier. |
2.2.1 | Service Availability and Whole Availability shall mean that that Service is usable by a defined number of authorised users in the normal operational manner in support of normal business processes. Availability is calculated as follows for each Service Period: |
|
Service Availability % = | ((Total Available Time) - | (Whole Unavailable Time Exceptions)) | * 100 | ||||||
|
Total Available Time |
|
Whole Availability % = | ((Total Available Time) - | (Whole Unavailable Time + Partial Unavailable Time Exceptions)) | * 100 | ||||||
|
Total Available Time |
|
Total Available Time in
minutes in the Reporting Period |
Equals |
(#days in Reporting Period) *
(service hours per day) * 60 |
Condition | Criteria | |
Wholly Unavailable Time
occurs when
the process or function was
suspended, halted or denied due to
the criteria adjacent arising.
|
The inability for Customer and all of their clients to be able to utilise the Clearing Functions | |
|
||
Partial Unavailable Time
occurs when
the process or function was affected
due to the criteria adjacent
arising.
|
The inability of some, but not all of the Customers users, or one of their clients, to utilise the Clearing Functions |
2.4.1 | Exceptions for each Service shall be the sum of the minutes of unavailable time during the appropriate Service Time arising from the following factors: |
| Agreed scheduled downtime arising from planned events which cannot be performed outside the Service Time (e.g. system changes, system upgrades, system housekeeping, existing hardware preventative maintenance arrangements, maintenance of Applications and releases relating to Applications). | ||
| Downtime directly due to the Customers failure to meet its obligations. | ||
| Downtime due to Force Majeure. | ||
| Any downtime arising from unauthorised interference with equipment by the Customer. | ||
| Downtime incurred when system usage is shown to be outside the limits of relevant Operational Assumptions. | ||
| Periods of time for which the Supplier can reasonably demonstrate that member users have not adhered to normal operational practice. The Supplier shall provide guidelines to the Customer for relevant end-user training in such normal operational practice and the Customer shall ensure that end-users are trained accordingly. Where the Supplier introduces a change to TRS/CPS that requires the Customers staff to be trained, the Supplier will provide that training without charge to the Customer. | ||
| For certain Performance Targets relevant Operational Assumptions are given. When actual usage of the Services is greater than one or more of these Operational Assumptions for a period of time, such period during the relevant Service Time shall be included in the exceptions for relevant performance targets. Notwithstanding this, the Supplier shall at all times use all reasonable endeavours to meet all Performance Targets. | ||
| Downtime incurred outside the relevant Service Time |
2.5.1 | For the purposes of the table below the following words shall have the following meanings: | ||
Service Time means the period of time between the Service Start Time and Service Close Time as referred to in Clause 2.5.2. | |||
Service Period means the period of time during which the performance of a Managed Service will be measured which shall be one (1) month. | |||
Service Target means the targeted level of performance of a Managed Service during the applicable Service Period. The Service Target for each applicable Managed Service is shown in the table below. | |||
Service Threshold means the threshold applicable to each Managed Service which, if exceeded, may impair the delivery of such Managed Service. These Service Thresholds are derived from steady state service experience and/or solution design specifications. | |||
2.5.2 | The table below details the Service Targets and Service Thresholds which the Supplier shall meet in the performance of the Service: |
SERVICE THRESHOLD and | ||||||||
MANAGED SERVICE | SERVICE START TIME | SERVICE CLOSE TIME | SERVICE TARGET | EXCLUSIONS | ||||
CPS 1 Production
Environment
Clearing Functions
Availability
|
As defined in
Services Schedule |
As defined in
Services Schedule |
Clearing Functions Service Availabilitye for 99.6% of available hours during
each Service Period.
Clearing Functions Service Whole Availability for 98% of available hours during each Service Period. |
Subject to Service Capacity for Production Environment | ||||
|
||||||||
CPS 2 Production
Environment End of
Day Clearing
Processing Time
|
ICE Futures TRS System in End of Day | End of Stream |
End of Day Clearing processing elapsed time
< 60 minutes for all but 2 days per Service Period <90 minutes for all days per Service Period System drop dead time of 3:00am |
Calculation excludes time elapsed due to Clearing runs being halted or recovered due to Customer business reasons not associated with technology failure. |
SERVICE THRESHOLD and
MANAGED SERVICE
SERVICE START TIME
SERVICE CLOSE TIME
SERVICE TARGET
EXCLUSIONS
Clearing Functions
Service Start Time
as defined in
Services Schedule
End of Stream
System Management Functions to be operable by at least one user for 99.60%
of available hours during each Service Period.
Maximum number of
concurrent users of
each console of four
(4).
Excludes any
incidents of
unavailability that
are proven, upon
further
investigation, to be
due to failures
within the
Customers
infrastructure.
Clearing Functions
Service Start Time
as defined in
Services Schedule
End of Stream
System Integration Functions Service Availability for 99.6% of available
hours during each Service Period.
System Integration Functions Service Whole Availability for 98% of available
hours during each Service Period.
File Transfer criteria and targets are defined in section 2.6
Critical File transfer to be achieved by the Expected Time in for 90% of the
service period. Remainder to be achieved by the Maximum Time.
Routine File transfer to be achieved by the Expected Time for 90% of the
service period. Remainder to be achieved by the Maximum Time.
File transfer to be achieved by Latest Time.
The Supplier shall advise the Customer of known changes, planned or
otherwise, that may affect the delivery of the Services, where possible
providing a minimum of 5 Business Days, or other agreed, notice of such
changes. The Supplier shall also use best endeavours to ensure such changes
are effected outside the Available Hours
Customer Service Desk to Supplier Service Desk
90% of calls to be answered within 3 rings (if within Service Time).
The management of Calls and Incidents will be performed in accordance with
the applicable procedure: call, incident or serious incident management as
agreed between the Parties from time to time.
SERVICE THRESHOLD and
MANAGED SERVICE
SERVICE START TIME
SERVICE CLOSE TIME
SERVICE TARGET
EXCLUSIONS
The target time to restore an adversely impacted service is shown below in
order of decreasing severity of the incident. The target restoration time is
measured from the time the incident is reported to the Call Management
Function to the time the impacted process or function is restored.
Each incident is assigned one of four severity ratings according to the
impact it has upon the affected process or function: Severity 1 = most
severe, Severity 4 = least severe.
Severity 1 Serious Incidents
: The Customer, or two or more of their clients,
are unable to utilise one or more Functional Services, System Integration
Functions and/or CMR Report availability.
Restoration time for Severity 1 incidents is not more than one (1) hour.
Severity 2 High Impact Incidents
: Unacceptable response time is experienced
by the Customer, or two or more of their clients
Restoration time for Severity 2 incidents is not more than two (2) hours.
Targets for resolution of Serious Incidents, Severity 1 and Severity 2 High
Impact incidents are taken into account in the calculation of the agreed
total of Wholly Unavailable Hours per Service Period.
Severity 3 Medium Impact Incidents
: End of Day Clearing Processing is
delayed or File Transfer to Customer is delayed, or Customer is unable to
use one or more Management Functions or report availability.
Restoration time for Severity 3 incidents is not more than four (4) hours
providing that the drop dead time on the end of day processing and file
transfer is not compromised.
Severity 4 Low Impact Incidents
: Any other reported incidents.
Restoration time for Severity 4 incidents is not more than twelve (12) hours.
The incident and escalation processes are described in section 2.7
SERVICE THRESHOLD and
MANAGED SERVICE
SERVICE START TIME
SERVICE CLOSE TIME
SERVICE TARGET
EXCLUSIONS
Maintenance of Software to maintain service targets. Correction of known or
suspected errors, through the release of fixes, service packs and or new
releases of software.
Severity 1 errors
include: software defects that significantly disrupt the
availability of services, for example by impacting availability or by
reducing functionality at critical periods, and where no viable work around
exists.
The resolution of a Severity 1 error will be accorded the highest priority
by the Supplier, which may result in delay to other programmes or projects.
Severity 2 errors
include significant defects in software that impacts
availability or functionality of services. The error may have a business or
technical work around or the frequency of the incident which caused it may
be such that it does not significantly impact service levels.
The timescales for resolution of a Severity 2 error will be agreed between
the Parties, fixes will be delivered either as part of a future software
release or as a scheduled service pack which may include the resolution of
other errors.
Severity 3 errors
include minor software defects not significantly impacting
availability or functionality of services.
Resolution of Severity 3 errors will be undertaken when it is convenient,
e.g. if the software is being worked on for other reasons.
A review of all outstanding errors will be conducted by the Parties.
SERVICE THRESHOLD and
MANAGED SERVICE
SERVICE START TIME
SERVICE CLOSE TIME
SERVICE TARGET
EXCLUSIONS
Supplier shall ensure that the following events take place at the end of
each Service Period in accordance with time scales set out below:
+5 trading days
: a report containing actual levels of services provided. To
include
actual levels of service achieved against service levels documented;
trend analysis of historical service level performance;
summary information of reported Incidents arising during the Service Period
and proposed timetable for correction;
Service Improvement plans, current status and proposed new plans;
Service metrics correlating to the thresholds within the SLA.
+10 trading days
: a review meeting shall be held to discuss the report.
+12 trading days
: review meeting minutes shall be distributed.
Outside of the Service Review the Parties shall periodically review:
Service, performance and capacity thresholds to determine the proximity of
current volumes to service thresholds;
Change Management historical analysis and forward schedule for the immediate
following 3 months
Where applicable preventive maintenance schedules for the immediate
following 6 months.
The Service Management roles and responsibilities are described in section
2.9
SERVICE THRESHOLD and
MANAGED SERVICE
SERVICE START TIME
SERVICE CLOSE TIME
SERVICE TARGET
EXCLUSIONS
Backup Service Daily Backup of all data processed by and resulting from
the Functional Services to primary backup media, as an integral part of the
backup cycle which captures all reports and transaction data each Trading
Day. Primary backup media is stored in a secure offsite location, by the
Suppliers archival supplier, for a minimum for 7 years. The Supplier
retains and maintains the equipment necessary to restore data from this
media for that 7 year period.
Media recall for offsite backup tapes can be made via scheduled delivery (24
hours), or within 5 hours, as a chargeable service by the archival supplier.
Restoration requests from the Customer are to be requested via the Change
Control Process.
Daily Backup to a secondary copy is kept on site for 4 weeks then reused
within the backup cycle. The Supplier provides a restoration service:
If request is < 3 days from data creation then restoration completion
target is 3 working days
If request is > 3 days from data creation then restoration completion
target is 10 working days
Maximum of 10 media
recall requests per
Service Period.
Maximum of 10
restoration service
requests per Service
Period
Supplier shall maintain at all times a backup facility capable of providing
the CPS service in the event of a disaster affecting the data centre from
which the current instance of TRS/CPS is running.
Targets are:
Establishment of capability
Recover service to the point of failure with no loss of data or transaction
informationwithin 4 hours following invocation
BCP testing to be undertaken twice a year and a report to be provided by the
Supplier to the Customer within 10 Business Days of such test.
2.6 | File Transfer Performance Targets |
Critical File | Direction | Frequency | Expected | Maximum | Latest | |||||
Span File
|
Supplier ->
Customer |
Daily |
5 minutes
from Load Sett 2 |
10 minutes
from Load Sett |
23:00 | |||||
|
||||||||||
Position File
|
Supplier ->
Customer |
Daily |
10 minutes
from EOS |
20 minutes
from EOS |
01:00 | |||||
|
||||||||||
Margin File
|
Supplier ->
Customer |
Daily |
10 minutes
from EOS |
20 minutes
from EOS |
01:00 | |||||
|
||||||||||
Position Note File
|
Supplier ->
Customer |
Daily |
10 minutes
from EOS |
20 minutes
from EOS |
01:00 |
Routine File | Direction | Frequency | Expected | Maximum | Latest | |||||
Trade File
|
Supplier ->
Customer |
Daily |
40 minutes
from EOD 3 |
60 minutes
from EOD |
03:00 | |||||
|
||||||||||
Open Interest
|
Supplier ->
Customer |
Daily | 10:00 | 11:00 | 12:00 | |||||
|
||||||||||
Banking Reports
|
Customer ->
Supplier |
Daily |
Publication
within 1 hour of receipt |
Publication
within 2 hours of receipt |
Publication
within 3 hours of receipt |
2.7 | Incident and Escalation Processes |
2.7.1 | Support Services shall be provided by the Supplier to assist the Customer with the proper operation and smooth running of the services. | ||
2.7.2 | Upon receipt of a call to the Supplier Service Desk the Supplier will set the severity of the call to reflect the business impact. Once the severity is set in accordance with CPS 9, it shall not be changed with the exception of escalation of incidents. Each severity rating will have a target resolution time, which is described under support services in section 2.5. | ||
2.7.3 | The target time to restore an adversely impacted service is defined in section 2.5. The target restoration time is measured from the time the incident is reported to the Call Management Function to the time the impacted process or function is restored. |
2.8 | Escalation Procedure |
2.8.1 | Call and Incident Management includes an escalation process which may be invoked at any time by the Customer during the hours of service availability. |
1.2. | 2 Load Sett is the Management Function through which settlement prices are loaded into the Clearing Service. The SPAN File is generated as a result of this function. | |
1.3. | 3 EOD is the system event that indicates that all post-trade activities have been completed. End of Day Clearing Processing is initiated at this time. |
Page 37 of 63
2.8.2 | The procedure to instigate escalation is detailed in Schedule 6 to this Agreement. The process can be invoked by the Customer contacting the IT Duty Manager directly and invoking a Serious Incident. | ||
2.8.3 | Serious incidents can be raised by the IT Duty Manager on receipt of an issue raised or the support analyst escalating an issue from the monitoring tools or checks put in place to identify serious incidents. | ||
2.8.4 | Once a Serious Incident has been identified the IT Duty Manager will escalate to the Duty Incident Manager who will take control of the incident through to resolution. | ||
2.8.5 | If the incident is identified as a Severity 1 (service impacting) then the Duty Incident Manager will contact the Duty Director and Service Manager who will set up a conference call with the Customer. Incidents deemed as Severity 2 will be escalated to the Duty Director and Service Manager after 120 minutes. | ||
2.8.6 | Customer Responsibilities shall be to provide accurate and complete information to the extent that it is available to the Customer when placing a call with the Call and Incident Management Service. |
2.9 | Service Management and Service Reviews |
2.9.1 | The Supplier shall provide manage the Service in order to review the service specifications originating from the Customer, develop new services or propose amendment to existing Services. | ||
2.9.2 | The Supplier shall also track performance of the Supplier in delivering the Services against the service targets set out in 2.5. | ||
2.9.3 | The Supplier shall also provide an escalation vehicle in the event the Customer is dissatisfied with the level of service provided by the Supplier in addition to the incident escalation process. | ||
2.9.4 | At the end of each Service Period, the Supplier shall provide information pertaining to the services provided for the entire Service Period. A Service Level Report shall be produced to show the actual service provided compared to service targets. | ||
2.9.5 | The Supplier shall organise and chair review meetings, and shall minute and publish the outcome of service review meetings. | ||
2.9.6 | Responsibilities |
| The Supplier and Customer agree to attend Service Level reviews and provide feedback as appropriate. | ||
| The Supplier and Customer shall nominate a representative to act as single point of contact known as the Contract Manager (Customer) and Service Manager (Supplier). | ||
| The Supplier and Customer shall attend scheduled and ad-hoc service review meetings with the Service Manager on an agreed frequency and at an agreed location. | ||
| The Customer shall review service level reports and raise any concerns or anomalies with measurement data with Supplier Service Manager. |
Page 38 of 63
2.9.7 | The parties shall notify each other in writing from time to time of the persons authorised by each as a contact for each of the following areas of responsibility, assuming the titles, described below. Authorised deputies may be assigned to cover periods of absence of nominated individuals: |
| The Supplier |
Title
|
Area of responsibility | |
Service Manager
|
Service Level Management | |
IT Duty Manager
|
Management of Supplier Service Desk | |
Account Manager
|
Pricing and Service extensions |
| The Customer |
Title
|
Area of responsibility | |
Contract Manager
|
Management of the service and contract terms and conditions | |
Service
Desk Manager
|
Management of Supplier Service Desk |
Page 39 of 63
3.1 | Purpose |
3.1.1 | This schedule sets out the Charges, which shall apply to all amounts payable in respect of this Agreement. |
3.2 | Scope |
3.2.1 | A Service Charge will be levied in advance of each Monthly Service Period. | ||
3.2.2 | Fee Rates will apply to Changes carried out under the provisions of Schedule 5 (Change Control) of this Agreement or Schedule 4 (Disengagement Services). |
3.3 | The Charges |
3.3.1 | A Service Charge of [***] will be made for the first and subsequent Monthly Service Periods subject to revisions in accordance with section 3.4 of this schedule. | ||
3.3.2 | Work undertaken in association with Changes will be invoiced on a monthly basis. A final invoice will be levied on completion of a change which will be signified by the acceptance of the Change by an authorised member of ICE Clear. | ||
3.3.3 | Charges in respect of Changes will be based upon the Fee Rates specified in Section 3.3.4 of this schedule or shall be as otherwise agreed between the Parties. | ||
3.3.4 | The Fee Rates chargeable in respect of any Changes commissioned under this Agreement shall be in accordance with the Fee Rates applicable in relation to the supply of TRS by the Supplier to ICE Futures Europe. | ||
3.3.5 | The above Fee Rates are subject to review as described in Section 3.4.2 of this schedule and exclude V.A.T. which is charged at the prevailing rate. Any long term projects are subject to preferential rate discussions. |
*** | Confidential information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. |
Page 40 of 63
3.4 | Variation of Charges |
3.4.1 | On each anniversary of the Go Live Date, Supplier reserves the right to increase the Service Charge by an amount equal to 75% of the percentage increase in RPI over the last twelve months for which figures are available. |
3.5 | Disengagement Charges |
3.5.1 | Charges for Disengagement referenced in Schedule 4 of this Agreement will be levied at the then prevailing Fee Rates for the relevant activities. |
3.6 | Incentive Scheme |
3.6.1 | The Parties have agreed to implement a scheme to incentivise the Supplier to achieve service excellence when delivering the Services (the Incentive Scheme ) which shall operate from the Commencement Date. | ||
3.6.2 | The Incentive Scheme shall comprise a pool the total value of which will be 10% of the annual value of the Service Charge. The scheme is based on the principal of shared risk so that the pool will be equally funded by the Supplier and the Customer. | ||
3.6.3 | Monthly Bonus and Debit Scheme | ||
3.6.3.1 | The two Key Service elements, CPS1 Production Environment Clearing Functions Availability and CPS2 Production Environment End of Day Clearing Processing Time will be measured on a monthly basis such that: |
a. | a service or service element that exceeds its service level will result in the Supplier accumulating bonus (positive) points (Credits) in accordance with the formulae set out in clauses 3.6.7 and 3.6.8 of this schedule (a service or service element that meets its service level equates to zero bonus points); | ||
b. | a service or service element that does not meet its service level will result in the Supplier accumulating debit (negative) points (Debits) in accordance with the formulae set out in clauses 3.6.7 and 3.6.8 of this schedule. | ||
c. | The value of each bonus and debit point shall be 0.05% of the monthly Service Charge. |
3.6.3.2 | At the end of each month the total number of accumulated bonus (positive) points will be added to the total number of accumulated debit (negative) points, and; |
a. | if the resulting points total is positive, the Supplier will be entitled to a sum equivalent to the number of positive points multiplied by the value of each point for that month; or | ||
b. | if the resulting points total is negative the Supplier will not be entitled to a payment for that month. |
3.6.4 | Service Stability Periods |
Page 41 of 63
3.6.4.1 | The application of Credits or Debits for the Incentive Scheme under this Schedule may be waived during a period following a significant change to the Services. Such changes may include: |
c. | Hardware platform | ||
d. | Software upgrade | ||
e. | Increased product listings by the Customer |
3.6.4.2 | The purpose of the stability period is for the parties to evaluate the performance of the Services, and to agree any adjustments to the Incentive Scheme. | ||
3.6.4.3 | The period of such a stability period is to be agreed by the Parties. | ||
3.6.5 | Bonus and Debit Points Allocation | ||
3.6.5.1 | A maximum of 100 bonus points and 100 debit points have been allocated to the Monthly Bonus and Credit Scheme which are allocated to two applicable Service elements | ||
3.6.5.2 | The allocation of each of the allocated points to the individual services will be split 50 / 50 between the services applicable to the Monthly Bonus and Debit Scheme. | ||
3.6.6 | Review | ||
3.6.6.1 | The Parties shall review the Incentive Scheme at least annually and will co-operate to seek consensus to incorporate, any applicable modifications to the Incentive Scheme that may have arisen as a result of Changes. | ||
3.6.7 | Formula for Availability and Performance Service Elements | ||
3.6.7.1 | Points for service elements based upon availability percentages are calculated by prorating the achieved performance percentage below or above the Service Target each month and using the resultant variance to determine the positive or negative points accumulated for that service element. | ||
3.6.7.2 | Maximum points are achieved for performing 100% to SLA, Performance at the SLA target shall equate to 0 ( Zero) points and maximum negative points where the performance fails by equal to or more than the percentage difference between the target and 100%. | ||
3.6.7.3 | Example 1: |
a. | Assume the target is 99.6% and the number of points allocated is 50, maximum points are achieved at 100% achieved performance (50 Points), Zero points are scored when the performance is 99.6% and maximum negative points are scored when the service falls at or below 99.2% (-50 points) | ||
b. | If the achieved percentage is 99.8% the number of points scored will be half way between the SLA target and 100%, therefore the points scored will be 25 |
Page 42 of 63
c | If the achieved percentage is 99.3% the number of negative points will be three quarters between the maximum negative point performance and the Target, therefore the points allocation will be -37.5 points. |
3.6.8 | Formula for Deadline Service Elements | ||
3.6.8.1 | Points for service elements based on deadlines are calculated by subtracting the total number of debit points accrued for breaching the deadline from the maximum bonus points available for the applicable service element. A service element that misses the final deadline accrues maximum debit points for that service element for that month. | ||
3.6.8.2 | Example 2 |
a. | Assume the total number of point allocated is 50 | ||
b. | The Service Target is no more that 2 breaches of the Maximum Time, therefore the number of points allocated for each breach will be -25. | ||
c. | If the Drop Dead Time is breached at any point during the Service period the points will be scored at maximum negative points i.e. -50 | ||
d. | If there is one breach of during the Service period and no breaches of the Drop Dead Time the points score will be 50-25 =25 | ||
e. | If there are three breaches of the Maximum Time during the Service period and no breaches of the Drop Dead Time the points score will be 50-75 =-25 | ||
f. | If there is one breach of the Drop Dead Time regardless of the performance of the maximum time the points score will be -50 |
Page 43 of 63
4.1 | Disengagement Services |
4.1.1 | The Supplier and the Customer shall each appoint a Disengagement Manager and provide written notification of such appointment to each other within three months of the Commencement Date. The Suppliers Disengagement Manager shall be responsible for ensuring that the Supplier and its employees and agents comply with this Schedule. The Supplier shall ensure that its Disengagement Manager has the requisite authority to arrange and procure any resources of the Supplier as are reasonably necessary to enable the Supplier to comply with this Schedule 4. The Disengagement Managers shall liaise with one another in relation to all issues relevant to termination or expiry and all matters connected with this Schedule 4 and each partys compliance with it. | ||
4.1.2 | The Supplier shall provide reasonable assistance and information to the Customer to enable the orderly transition and migration of the Services from the Supplier to the Customer or its nominated alternative service supplier in the event that the Customer requests it in accordance with paragraph 3 below (Disengagement Services). For the avoidance of doubt the Supplier is responsible for the overall management of the Disengagement Services. |
4.2 | Disengagement Period |
4.2.1 | The Disengagement Services will be provided as soon as is reasonably practicable from the date that the Customer first requests those services (which shall not be any earlier than 6 months prior to the expiry of the Agreement (the Commencement of Disengagement) until the expiry of 13 months from the Commencement of Disengagement (or such lesser period agreed with the Customer in writing) (Disengagement Period). | ||
4.2.2 | For the avoidance of doubt, the Disengagement Services shall be provided regardless of the reason for the expiry or termination of the Agreement. |
4.3.1 | The Supplier shall, at least 60 days prior to the Commencement of Disengagement, agree with the Customer a written plan demonstrating how and when the Supplier will fulfil its obligations under this Schedule 4 (the Disengagement Plan). The Supplier shall provide the first draft of such Disengagement Plan 120 days prior to the Commencement of Disengagement. If the Parties are unable to agree the contents of the Disengagement Plan 90 days prior to the Commencement of Disengagement, either party may refer the matter for resolution in accordance with the provisions of clause 27 and Schedule 6. | ||
4.3.2 | The Disengagement Plan shall include the following: |
(a) | address each of the issues set out in this Schedule 4 to facilitate the transition of the Services from the Supplier to the Customers nominated alternative service supplier and/or the Customer and |
Page 44 of 63
(b) | detail how the Services will transfer to the nominated alternative service supplier and/or the Customer including details of the processes, documentation, data transfer, systems migration, security and the segregation of the Customers technology components from any technology components run by the Supplier or any of its sub-contractors (where applicable); | ||
(c) | provide for the transfer of historic information to an extent required by the Customer to meet its regulatory reporting/audit requirements; | ||
(d) | assist in the transition of Member Firms and Member Firms to an alternative clearing processing system through the provision of information relating to the feeds and reports that are made available to members and Member Firms in accordance with the terms of this Agreement; | ||
(e) | specify the scope of the Disengagement Services that may be required by the Customer, and detail how such services would be provided (if required) during the Disengagement Period (for the avoidance of doubt any such Disengagement Services shall be provided in accordance with the rates specified for the Charges); | ||
(f) | provide a timetable within the Disengagement Period and identify critical issues in relation to the provision of the Disengagement Services; and | ||
(g) | set out the management and escalation structure to be put in place and employed during the Disengagement Period. |
4.4 | Continued Provision of Services |
4.4.1 | The Supplier shall, as part of the Disengagement Services and to the extent requested in writing by the Customer, continue to provide the Services in accordance with the Agreement from the date of termination or expiry of the Agreement until expiry of the Disengagement Period. |
Page 45 of 63
5.1.1 | The Change Control Procedures set out in this Schedule (including where relevant the Appendices) shall be used whenever the Customer or the Supplier has a requirement to change any component of the Services, Until such time as a Change is made in accordance with the Change Control Procedure, the Supplier shall, unless otherwise agreed in writing, continue to perform its obligations under this Agreement in compliance with its terms prior to such Change | ||
5.1.2 | A Change Request Document shall refer to a paper or electronic document that accurately records all required information and authorisation (physical or electronic) specified in this Change Control Procedure in respect of the Change Request which will generally be in the form of Appendix II completed as appropriate. Any changes to the Change Request Document or the technology used must be agreed between the Parties. | ||
5.1.3 | The parties shall designate individuals to negotiate and authorise the commercial aspects of Changes; on behalf of the Customer (the Commercial Manager ), and on behalf of the Supplier (the Account Manager ). | ||
5.1.4 | The Supplier will assign a Delivery Manager who is responsible for the overall management and scheduling of all work related to the Change Request. The Delivery Manager shall be responsible to the Customer for all aspects of Change Request including without limitation technology, design, progress and issues arising. The Delivery Manager, with notification to the Customer, may nominate a Project Manager to undertake any stage of any Change Request. However, the Delivery Manager remains responsible for all deliverables. | ||
5.1.5 | The Customer shall appoint an individual (the Customer Change Manager ) to liaise with the Delivery Manager on all technical and delivery aspects of a particular change request. | ||
5.1.6 | Day to day administration of the Change Control Procedures will be performed on behalf of the Account Manager by an individual so nominated (the Change Administrator ). A similar role may also be nominated on behalf of the Customer. | ||
5.1.7 | The representative of the Party requesting the Change will be referred to hereinafter as the Change Requester. | ||
5.1.8 | Throughout the Change Control Procedures the Customer and the Supplier shall use reasonable endeavours to ensure that appropriate personnel are available to give to the other party any requested information or resources pertaining to a Change Request. | ||
5.1.9 | The effort involved in preparation of an Initial Assessment for most Change Requests will be non-chargeable. However the Supplier would like to reserve the right to negotiate with the Customer for a separate chargeable pre-assessment in the event that this entails a material effort. . |
Page 46 of 63
5.2 | Submit Change Request |
5.2.1 | Either party may initiate a Change Request Document by submitting all of the information, as set out in Appendix 2 under the section entitled Change Requester Details and Authorisation, and also a title for the Change Request. | ||
5.2.2 | Prior to submission a Change Request Document must be authorised for submission by at least the Account Manager or the Commercial Manager. |
5.3 | Acknowledge Change Request |
5.3.1 | On receipt of the Change Request Document, the Change Administrator shall acknowledge such receipt by issuing a number to correspond with the Change Request Document, and noting on the Change Request Document information requested in Appendix 2 under the section entitled Change Request Acknowledgement by the Supplier | ||
5.3.2 | The Change Administrator will then send to the Change Requester and Delivery Manager a copy of the acknowledged document with acknowledgement details within two (2) Working Days from receipt of the Change Request Document. |
5.4 | Preliminary Review of Change Request |
5.4.1 | Following the acknowledgment of receipt of the Change Request Document, the Delivery Manager will undertake a preliminary review of the Change Request Document to ensure that the Change Requester has provided the requisite details, scope and priority, and will liaise with the Change Requester to obtain and agree the submission content of the Change Request Document | ||
5.4.2 | The Supplier will not proceed with further assessment of the Change Request until and unless the submission content is agreed or the Parties agree otherwise. | ||
5.4.3 | The Account Manager shall contact the Commercial Manager to discuss whether the Initial Assessment of the Change Request is to be chargeable. | ||
5.4.4 | The Account Manager and Commercial Manager, shall authorise the commencement of an Initial Assessment by signing the appropriate section of the Change Request Document. Where there is no charge for the Change Request, the Delivery Manager and Customer Change Manager shall authorise commencement of the Initial Assessment. | ||
5.4.5 | Any work done by the Supplier in producing the Initial Assessment shall usually be non-chargeable, however where the Account Manager determines the Initial Assessment to be chargeable, this will be agreed with the Commercial Manager prior to starting the stage of Initial Assessment. |
Page 47 of 63
5.5.1 | The Supplier shall complete the Initial Assessment within ten (10) Working Days unless agreement to the contrary is reached by the parties in relation to the Change Request. | ||
5.5.2 | As applicable to the particular Change Request, the Supplier will assess the Change Request and shall document and deliver to the Customer the Initial Assessment, which comprises, |
(i) | the solution options which would satisfy the Change requested; | ||
(ii) | all information as set out in Appendix 2 under the section entitled Initial Assessment Completed | ||
(iii) | an estimate of the Charges and a reasonable breakdown of same, which would be associated with implementation of the Change requested; and | ||
(iv) | an assessment of how the Change Request maintains or improves service levels of the Services and affects the Charges. |
5.5.3 | The parties acknowledge that the solution options, and other information, provided during the course of the Change Control process may contain proprietary information which will be subject to the Confidentiality terms of this Agreement. | ||
5.5.4 | Agreement to proceed will require authority from the Commercial Manager to accept charges associated with future stages by signature on (or providing email approval of) the Change Request Document. |
5.6.1 | Commercial Manager shall respond either with agreement to proceed or a decision not to proceed with the next stage within ten (10) Working Days of receipt of the Initial Assessment (or as otherwise agreed by the parties in the relevant Change Request). | ||
5.6.2 | If the Initial Assessment is rejected and no further work on the Initial Assessment is to be undertaken, the Change Request shall be closed in accordance with the cancellation procedures defined in Section 5.11 of this Schedule. | ||
5.6.3 | If the Initial Assessment is rejected and it is agreed that additional work on the Initial Assessment is to be conducted, the process will be repeated from Section 5.5 to determine and revise the Initial Assessment. | ||
5.6.4 | If the Account Manager and Commercial Manager agree to the Initial Assessment, then they will indicate such acceptance on the Change Request Document by signing (or providing email approval of) the appropriate section of the Change Request Document. | ||
5.6.5 | Once the parties have accepted the Initial Assessment, a detailed plan may be prepared if this is indicated as being required. Otherwise this step will be omitted and the Supplier shall commence implementation as defined in section 5.9 |
5.7 | Plan |
Page 48 of 63
5.7.1 | If required, the Delivery Manager will then coordinate the production of a plan for the requested change and shall use reasonable efforts to complete the plan [within 5 days of the finalising of the Initial Assessment]. Each such plan will include: |
(i) | a schedule for implementation of the Change requested; and | ||
(ii) | the Charges which would be associated with implementation of the requested Change. |
5.7.2 | Once the plan has been completed, the Account Manager will attach to the relevant Change Request Document a copy of the detailed plan and provide to the Commercial Manager and the Customer Change Manager a copy of such plan. | ||
5.7.3 | Supplier shall ensure in so far as is reasonably practicable that the resource allocated to carry out a Change Request shall be the most effective mix of skills and ability to meet the change. |
5.8 | Acceptance of Plan |
5.8.1 | Thereafter, the Account Manager and Commercial Manager, will review the completed plan and determine (i) whether to accept or reject the plan and (ii) if the plan is rejected, whether to file the Change Request Document and close the matter or to continue working on the plan. | ||
5.8.2 | If the plan is rejected and no further work on the plan is to be undertaken, the change request shall be closed in accordance with the cancellation procedures defined in Section 5.11 of this Schedule. | ||
5.8.3 | If the Plan is rejected and it is agreed that additional work on the Plan is to be conducted, the process will be repeated from Section 5.7 onwards to determine and approve new estimates for the Initial Assessment and plan. | ||
5.8.4 | If the Account Manager and Commercial Manager accept the plan and its commercial terms, then they will indicate such acceptance by signing the appropriate section of the Change Request Document or by email approval. |
5.9 | Implement Solution |
5.9.1 | On receiving Customer approval of the plan (or Initial Assessment where a plan is not required), the Delivery Manager will coordinate the implementation of the Change requested as per the plan and will periodically provide to the Customer a report of the current status of the implementation of the Change requested. | ||
5.9.2 | At any time during the implementation of the solution, the Parties may agree that either the scope of the Change Request requires amendment or that the circumstances have changed due to external or internal factors; as a result either party may request a return to the Plan stage or the Initial Assessment. | ||
5.9.3 | As applicable to the particular Change Request, the agreed process for delivery may include a number of checkpoints where stages of the delivery are approved by the Customer. |
Page 49 of 63
5.9.4 | When the requested Change has been successfully implemented, the Delivery Manager shall indicate such completion by signing the appropriate section of the Change Request Document. |
5.10 | Complete Change Request |
5.10.1 | Once implementation has been completed, the Commercial Manager will indicate final acceptance by signing the appropriate section of the Change Request Document. | ||
5.10.2 | The Account Manager will thereafter (i) arrange for a final invoice to be sent to the Customer for any remaining Charges associated with the assessment, planning, design, build, test, and or implementation as appropriate of the requested Change and (ii) file the completed, and fully executed, Change Request Document. |
5.11 | Cancellation or Suspension |
5.11.1 | A Change Request may be cancelled or suspended by the Customer at any stage in this process, if authorised by the Commercial Manager. In these circumstances, the Customer will be liable for the Charges due up to the time the Change Request was cancelled or suspended provided that the Customer approval had been given post the Initial Assessment. In addition, the Customer may be liable for further Charges relating to the costs incurred by the Supplier in cancelling or suspending work on the Change. The Supplier will endeavour to minimise the Charges through redeploying resources where possible and or cancellation of orders. The Account Manager and the Commercial Manager shall discuss in good faith the financial implications of such cancellation or suspension, and agree the Charges to be applied. | ||
5.11.2 | Once a Change Request has been cancelled, and the final payment terms agreed between the Customer and Supplier, the Supplier shall file the Change Request Document and close the matter accordingly. | ||
5.11.3 | If a Change Request has been suspended all Initial Assessments and detailed plans prepared for that Change Request become null and void. If the Customer wishes to continue work on the Change Request, the Account Manager and the Commercial Manager shall discuss and agree the appropriate assessment or planning phase of the Change Control Procedures at which work will commence. Restarting work requires the authorisation of both the Commercial Manager and the Account Manager. |
Page 50 of 63
Page 51 of 63
Change Requester Details & Authorisation | ||
Name of Change Requester
:
|
Date of Request: / / | |
|
||
Party Requesting Change:
|
||
The Supplier
|
||
Customer
|
||
|
||
Description of Change
|
||
|
||
1.1.
|
||
1.2.
|
||
|
||
Continued on separate sheet YES/NO
|
||
Reason for Requested Change
|
||
|
||
Continued on separate sheet YES/NO
|
Date Request Received:
/
/
|
Change Request Number Issued: | |
|
||
Date Number Issued:
/
/
|
Number Issued | |
by:
|
Acknowledgement Sent:
/
/
|
||
|
||
Name of Supplier Delivery Manager: |
Page 52 of 63
Name:
|
Signature: | Date: / / | ||
|
||||
Customer (Commercial Manager/Customer Change Manager) : | ||||
|
||||
Name:
|
Signature: | Date: / / | ||
|
Name:
|
Signature: | Date: / / | ||
|
||||
Customer (Commercial Manager) : | ||||
|
||||
Name:
|
Signature: | Date: / / |
Page 53 of 63
Name:
|
Signature: | Date: / / | ||
|
||||
Customer (Commercial Manager) : | ||||
|
||||
Name:
|
Signature: | Date: / / |
Name:
|
Signature: | Date: / / | ||
|
||||
Customer (Commercial Manager) : | ||||
|
||||
Name:
|
Signature: | Date: / / |
Page 54 of 63
6.1 | Account Manager and Supplier Service Manager |
6.1.1 | Appointments. The Supplier shall appoint and inform the Customer of the identity of a service manager to oversee the delivery of the Services (the Suppliers Service Manager). In addition the Supplier and Customer shall both appoint and inform the other of the identity of an account manager (Account Manager) to oversee the commercial relationship between the Parties. Each Party shall promptly notify the other Party in writing of any substitutions or replacements of Suppliers Service Manager or Account Manager, as applicable, and shall take all reasonable steps to minimise any potentially adverse effects of such changes. | ||
6.1.2 | Meetings. At least monthly, the Suppliers Service Manager will meet in person or conference on the telephone, or as the Parties may agree (Service Review Meeting) the Account Managers and other invited parties from either side (a) to review the Services and discuss the day-to-day operational issues arising from the provision of such Services, including any management or financial issues relating to the Services; and (b) to review the Service Levels provided during the Service Period. The Supplier shall, in consultation with the Customer Account Manager, prepare (a) a report regarding the performance of the Services (a Service Report); and (b) minutes of the Service Review meeting. If the Parties are in dispute in relation to any matter raised in the Service Review Meeting, either Party may refer such disputed issue to the Governance Committee. | ||
6.1.3 | Reports for the Governance Committee. The Account Managers and Suppliers Service Manager shall work together to prepare reports relating to (i) any issue requiring escalation to the Governance Committee in accordance with Paragraph 6.1.2 above, and (ii) any other matters the Parties wish to present to the Governance Committee, including, for example, Suppliers performance of the Services. |
6.2 | The Governance Committee |
6.2.1 | Composition of the Committee. In accordance with such terms as the Parties agree, the Parties shall establish a Governance Committee. The Customer Account Manager shall chair the Governance Committee. Constitution of the remaining members of the first Governance Committee shall be as as agreed between the Parties in writing (agreement to any such change not to be unreasonably withheld by either party) from time to time | ||
6.2.2 | Objectives. The objective of the Governance Committee is to act as an escalation point from the Service Review Meeting and for each Party to raise and address any issues that may arise with respect to the Services, including but not limited to: (a) issues that have not been resolved between the Account Managers (b) Change Requests regarding the Services; (c) issues relating to the Services; and (d) Suppliers performance of the Services. |
Page 55 of 63
6.2.3 | Meetings. The Governance Committee shall meet in person or conference by telephone, or as the Parties may agree, at least quarterly. Meetings of the Governance Committee may be called upon reasonable notice by either Party who may co-opt representatives of project or programme boards as appropriate. | ||
6.2.4 | Escalation. In the event that any issues raised at a Governance Committee meeting are not resolved, the issue may be escalated as a Dispute and the parties shall follow the procedure set out in Paragraph 6.4. | ||
6.2.5 | Reports. At any meeting of the Governance Committee, the Parties may present (a) Change Requests under consideration pursuant to the Change Control Procedure; and (b) any Reports provided that such Change Requests and or Reports have been distributed to each Governance Committee member prior to such meeting. For the avoidance of doubt, Change Requests may be made at any time during the Term of this Agreement. |
6.3 | Representatives |
6.3.1 | The Account Manager for either Party will be automatically deemed to be the Representative of that Party. |
6.4 | Dispute Resolution. |
6.4.1 | Any Dispute which may arise with respect to any matter or thing arising out of or in relation to this Agreement shall be referred for discussion in good faith and resolution by the Representative of each party. If agreement is not reached at that level within 14 days of such referral, the Parties will endeavour to resolve the issue using the Governance Committee. If the matter cannot be resolved in that forum, the matter shall be referred to the respective Chief Executive Officers of the Supplier and the Customer who shall endeavour in good faith to reach agreement within a period of 14 days from the matter first being referred to them. This Paragraph 6.4.1 shall not apply to Disputes which have already been referred to the Governance Committee. | ||
6.4.2 | Any dispute not settled after following the processes set out above either at Paragraph 6.4.1 or in accordance with Paragraph 6.2 may, by agreement, be referred to a panel of arbitrators (the Panel) constituted as follows: |
| the parties shall appoint one member each; and | ||
| the third member who shall act as chairman of the Panel shall be appointed by the President for the time being of the International Chamber of Commerce. |
6.4.3 | Each party shall pay the fees and disbursements of its own member and half the fees and disbursements of the chairman of the Panel. | ||
6.4.4 | Arbitration proceedings under this clause may be commenced by any party to a dispute following failure by the respective Chief Executive Officers of both Parties to resolve the issue in the timeframe outlined in this clause, by: |
Page 56 of 63
| serving upon the other or others notice of its intention to refer such dispute to arbitration and nominating a member of the Panel; and | ||
| requesting the President of the International Chamber of Commerce for the time being to appoint a chairman of the Panel. |
6.4.5 | The Panel shall determine its own rules of procedure. | ||
6.4.6 | The Panel will have the right to allocate the costs of the arbitration as between the parties. |
Page 57 of 63
7.1 | Purpose |
7.1.1 | This schedule addresses: |
| access to the Supplier Production Environment. This includes system, application, local and remote access; | ||
| data security. This includes the requirements to restrict the data presented and fields to selected groups of users; and | ||
| physical security. Applicable to locations and equipment where the Customer data is held and/or from which the Services are delivered. |
7.2 | Requirements |
7.2.1 | Physical Security |
| Supplier will ensure that all CPS hardware installed on the Supplier managed premises is situated in areas with adequate physical security controls. | ||
| Supplier shall be responsible for ensuring the physical location where the Service is delivered from is secure. Access to the Production and Back Up location shall be via a recognised mechanism, e.g. swipecard, keypad etc. All Supplier Production and Back Up Environments will be housed within appropriately managed industry standard machine rooms. |
7.2.2 | Passwords |
| All access to the system shall be controlled by username and password. Passwords shall be of a minimum length, have no repetition within an agreed period and be forcibly changed on a monthly basis. | ||
| All unused accounts shall be automatically de-activated after one (1) Month. | ||
| Supplier shall create, amend and delete ICE Clear users access rights to the applications within a 24 hour period from the initial request. |
7.2.3 | System Access |
| Supplier shall ensure that any required update access to: |
o | the operating system; | ||
o | the database; and | ||
o | the application code |
Page 58 of 63
| Suppliers application shall provide a rules based facility that allow subsets of the Data to be presented to the User. They shall include: |
o | all Data; | ||
o | Data by Clearing Member Firm; and | ||
o | Data by Clearing Member Firm and associated Non Clearing Member Firms and/or registered traders; |
7.2.4 | Supplier shall ensure that changes to the application are tested before release into the Production Environment. | ||
7.2.5 | In providing CPS the Supplier will ensure that all Data on the System is held securely and only made available in accordance with the permissions specified by the Customer; | ||
7.2.6 | Supplier shall ensure that appropriate back ups of both the system and standing data are maintained in line with commercially reasonable efforts. |
7.3 | Audit, Reporting and Security Reviews |
7.3.1 | Appropriate audit trail mechanisms must be enabled on key systems including: |
| Accounting (including login failures and process termination states); | ||
| Auditing (including changes to accounts and break in attempts); and | ||
| TCP logging (including records of all TCP/IP connections to the systems). |
7.3.2 | From time to time the Supplier may change the level of auditing required and such changes will use the Change Control Procedures, as set out in Schedule 5. | ||
7.3.3 | The Supplier shall use the Serious Incident Management service (as described in the Service Level Agreement in Schedule 2) to respond to any serious information security incidents. | ||
7.3.4 | On commencement of this Agreement, Supplier shall appoint or nominate a representative to be a specific point of contact on any security matters or concerns in relation to provision of the Services. | ||
7.3.5 | The Supplier will host a quarterly information security forum to review events within the previous period and, where appropriate, present any proposed improvements for the next period. |
Page 59 of 63
Section 1 Please tick the party who will be responsible for payment of the | ||||||
following fees when they become due and payable | Owner | Licensee | Distributor | |||
Initial fee
|
||||||
Non-standard agreement fee
|
||||||
Annual fee(s)
|
||||||
Integrity plus fee
|
||||||
Full verification fee
|
||||||
Escrow secure fee
|
||||||
Escrow complete fee
|
||||||
Deposit update fee(s)
|
||||||
Release fee
|
Company Name
|
||||
Registered Office Address
|
||||
Company Registration No.
|
||||
Correspondence Address
|
||||
VAT No.
|
||||
Contact Name
|
||||
Job Title
|
Fax | |||
Phone
|
Company Name
|
||||
Registered Office Address
|
||||
Company Registration No.
|
||||
Correspondence Address
|
||||
VAT No.
|
||||
Contact Name
|
||||
Job Title
|
Fax | |||
Phone
|
Page 60 of 63
Company Name
|
||||
Registered Office Address
|
||||
Company Registration No.
|
||||
Correspondence Address
|
||||
VAT No.
|
||||
Contact Name
|
||||
Job Title
|
Fax | |||
Phone
|
Fee type | 33.2.1..1.1.1 Description of fees | Unit Price | Qty | Cost | ||||
Initial Agreement Set-Up
|
For any agreement payable before commencement of work. | £945 | £ | |||||
|
||||||||
Non-standard
Agreement
|
Minimum charge for non-standard agreements payable before commencement of work. Work in excess of 2 hours will be charged at £150 per hour or part thereof, which will be invoiced separately. | From £345 | £ | |||||
|
||||||||
Single Licensee
Annual
*
|
Single agreement annual fees, payable on signature of agreement and thereafter in advance of each anniversary. | £795 | £ | |||||
|
||||||||
Multi Licensee
Annual
*
|
Payable per licensee upon registration under the agreement and thereafter in advance of each anniversary. A Minimum Annual Fee is payable if less than 2 Licensees are registered on any anniversary of agreement. | £670 | £ | |||||
|
||||||||
Financial Model Annual
|
Payable on signature of agreement and thereafter in advance of each anniversary. | £945 | £ | |||||
|
||||||||
Integrity Plus Testing Fee
|
Material to be deposited under the Escrow agreement is collected, integrity tested and audited at owners site by NCC Group. Payable upon completion of on-site testing. | £3,450 + expenses | £ | |||||
|
||||||||
Full Verification Service Fee
|
Full Verification Service which ensures that the deposited Source Code can be built into the latest working application. Payable upon completion of on-site testing. | £7,750 + expenses | £ | |||||
|
||||||||
Repeat Full Verification Fee
|
Repeat of a Full Verification. Payable upon completion of on-site testing. | £7,250 + expenses | £ | |||||
|
||||||||
Escrow Secure Fee
|
Comprehensive Escrow protection including cost of Initial fee & Full Verification fee. 20% of fee payable before commencement of work and 80% payable upon completion of the Full Verification. | £8,550 + expenses | £ | |||||
|
||||||||
Escrow Now
|
Full Verification conducted at NCC Group. Payable upon completion of testing. | From £10,995 | £ | |||||
|
||||||||
Escrow Complete Fee
|
Full Verification at both the Owners and Licensees sites. 50% payable upon completion of each Full Verification. | From £15,250 + expenses | £ | |||||
|
||||||||
Please indicate the calendar month in which you require any ordered testing services to be carried out. | Month: | |||||||
Fee for Scheduled
Update |
Per deposit after the first, invoiced on signature of the agreement and on each anniversary - £225 per unscheduled deposit | £150 | £ | |||||
Release
|
Payable per licensee on release request. |
£100 +
expenses |
£ | |||||
|
||||||||
|
||||||||
Please Note:
|
||||||||
Credit card and BACS payment methods are available on request. | Sub Total | £ | ||||||
Web Escrow & Development Escrow need a minimum of 3 additional scheduled updates | VAT | |||||||
Prices are effective until 31.10.07. | @ 17.5% | £ | ||||||
* For Staggered Release agreements an annual fee will also be payable by the Distributor | ||||||||
Fixed price for one or dual deposits. | Total | £ |
Invoice (please quote official Purchase Order number)
|
PO No: | |
Cheque attached (please make payable to NCC Services Ltd)
|
Cheque No: |
Page 61 of 63
Name
|
||
Signature
|
Date | |
Position
|
||
Company
|
||
If the invoicing address is different from above, please indicate:
|
||
Name of person to be invoiced
|
||
Address
|
Page 62 of 63
|
Dated | 2007 | ||||
Name of Subsidiary | Jurisdiction of Incorporation or Organization | ||
IntercontinentalExchange Holdings
|
United Kingdom | ||
ICE Futures Europe
|
United Kingdom | ||
ICE Clear Europe, Ltd.
|
United Kingdom | ||
ICE Futures U.S., Inc.
|
Delaware, U.S.A. | ||
ICE Clear U.S., Inc.
|
New York, U.S.A. | ||
Creditex Group, Inc.
|
Delaware, U.S.A. |
/s/ Ernst & Young LLP |
/s/ Jeffrey C. Sprecher | ||||
Jeffrey C. Sprecher | ||||
Chairman of the Board and Chief Executive Officer |
/s/ Scott A. Hill | ||||
Scott A. Hill | ||||
Senior Vice President, Chief Financial Officer |
/s/ Jeffrey C. Sprecher | ||||
Jeffrey C. Sprecher | ||||
Chairman of the Board and Chief Executive Officer |
/s/ Scott A. Hill | ||||
Scott A. Hill | ||||
Senior Vice President, Chief Financial Officer | ||||