Exhibit 10.8

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

SERVICES AGREEMENT

EFFECTIVE THIS 6th DAY OF APRIL, 2006

BETWEEN

CHICAGO MERCANTILE EXCHANGE INC., a business corporation organized under the
laws of the State of Delaware and having its principal office situated at 20
South Wacker Drive, Chicago, Illinois 60606 U.S.A., duly represented by its
Chairman of the Board, Mr. Terrence Duffy, and by its Chief Executive Officer,
Mr. Craig S. Donohue, (hereinafter referred to as “CME”),

AND

NEW YORK MERCANTILE EXCHANGE, INC., a Delaware corporation having an office at
One North End Avenue, World Financial Center, New York, New York 10282 U.S.A.,
duly represented by its Chairman of the Board, Mr. Mitchell Steinhause, and by
its President, Mr. James E. Newsome, (together with its Affiliates, hereinafter
referred to as “NYMEX”).

RECITALS:

WHEREAS, CME is registered with the Commodity Futures Trading Commission (the
“CFTC”) as a “designated contract market” and a “derivatives clearing
organization” within the meaning of the Commodity Exchange Act, as amended (the
“CEA”), and lists for trading futures contracts and options on futures contracts
based on various financial and commodity products;

WHEREAS, New York Mercantile Exchange, Inc. is registered with the CFTC as a
“designated contract market” and a “derivatives clearing organization” within
the meaning of the CEA, and lists for trading futures contracts and options on
futures contracts based on various commodity products;

WHEREAS, NYMEX and CME wish to enter into an arrangement pursuant to which
certain NYMEX products will be traded on Globex;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and with the intent to be legally
bound, the parties hereby agree as follows:

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

1. INTERPRETATION

 

  1.1. Definitions. In this Agreement, unless the context otherwise requires:

 

  1.1.1. “ADV” means the average daily trading volume, in contracts (composed of
both a buy-side and a sell-side), measured by dividing the total number of
contracts traded during a specified period by the total number of trading days
during such period.

 

  1.1.2. “Affiliates” means, with respect to any specified Person, any other
Person that, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person. A Person shall be deemed to control
another Person if it owns more than 50% of the capital stock or other equity
interests of such other Person or possesses, directly or indirectly, the power
to direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise) of such other Person. In the case of NYMEX, Affiliates as of the
Effective Date include but are not limited to NYMEX Holdings, Inc. and COMEX.
For purposes of this Agreement, however, Affiliates of NYMEX shall not include
(i) NYMEX Europe, unless and until this Agreement is amended to so provide, or
(ii) DME, unless and until NYMEX increases its ownership or economic interest
in, or control over, DME.

 

  1.1.3. “Business Day” means Mondays through Fridays, excluding any days that
are identified by NYMEX as holidays pursuant to Section 7.1.3.

 

  1.1.4. “CEA” has the meaning set forth in the recitals.

 

  1.1.5. “CME Documentation” has the meaning set forth in Section 10.4.

 

  1.1.6. “CME Marks” has the meaning set forth in Section 9.2.1.

 

  1.1.7. “CME Policies” has the meaning set forth in Section 6.3.

 

  1.1.8. “CME Globex Contracts” means the electronically traded products for
which CME is the DCM and the derivatives clearing organization under the CEA
that are traded on Globex.

 

  1.1.9. “CME Messaging Policies” has the meaning set forth in Section 6.10.1.

 

  1.1.10. “CME Services” has the meaning set forth in Section 6.1.

 

  1.1.11. “CME Systems” has the meaning set forth in Section 6.3.

 

  1.1.12. “COMEX” means the Commodity Exchange Inc., which merged with NYMEX on
August 3, 1994. Following the COMEX merger, NYMEX established two divisions of
membership, the NYMEX Division and the COMEX Division.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  1.1.13. “COMEX Products” means all futures and futures options products listed
for trading by COMEX. COMEX Products are a subset of NYMEX Products.

 

  1.1.14. “Competitive Contract” has the meaning set forth in Section 3.4.2.

 

  1.1.15. “Customer Connection Agreement” means the agreement, including all
relevant attachments, that CME requires to be executed and delivered to CME
before a Person may access Globex for trading. CME may modify the Customer
Connection Agreement from time to time and may in its discretion periodically
require market participants to execute revised versions of the agreement.

 

  1.1.16. “DCM” means a designated contract market under the CEA (or
corresponding designation under the laws of any non-U.S. jurisdiction).

 

  1.1.17. “DME” means DME Holdings Limited and Dubai Mercantile Exchange
Limited, collectively or individually as the context requires.

 

  1.1.18. “Effective Date” means April 6, 2006.

 

  1.1.19. “Eligible Participant” has the meaning set forth in Section 5.1.1.

 

  1.1.20. “Error Trade Policy” has the meaning set forth in Section 8.7.

 

  1.1.21. “Fees” has the meaning set forth in Section 11.1.

 

  1.1.22. “Force Majeure Event” has the meaning set forth in Article 18.

 

 

1.1.23.

“Globex” means the CME Globex® electronic trade execution system, including any
licensed software that is a part of it from time to time, and any successor
electronic trading system thereto.

 

 

1.1.24.

“Globex Control Center” or “GCC” means the Globex Control CenterTM, a technical
support center established and maintained by CME to provide technical support
and control over the operations of Globex and related systems utilized by CME
for trading CME Globex Contracts.

 

  1.1.25. “Globex Marketing Materials” has the meaning set forth in
Section 9.2.2.

 

  1.1.26. “Globex Site” has the meaning set forth in Section 5.1.2.

 

  1.1.27. “Launch Date” and “Launch Dates” means any or all of Launch Date 1, 2
and 3, as the context requires.

 

  1.1.28. “Launch Date 1” means the date on which the required NYMEX Mini
Contracts and NYMEX Big Contracts (as set forth in Section 3.1.1) are first
listed for trading on Globex (excluding any testing period that precedes live
trading). Launch Date 1 is generally expected to be in May or June of 2006.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  1.1.29. “Launch Date 2” means the first date on which NYMEX ACCESS Contracts
are listed for trading on Globex (excluding any testing period that precedes
live trading). Launch Date 2 is generally expected to be in June or July of
2006.

 

  1.1.30. “Launch Date 3” means the date on which required implied
inter-commodity “crack” spreading functionality, as determined by the parties in
accordance with Section 4.1, is available for use in live trading (excluding any
testing period that precedes live trading). Launch Date 3 is generally expected
to be before the end of 2006, depending upon the requirements for the implied
inter-commodity spread functionality described in Section 6.5.2.

 

  1.1.31. “Losses” means, with respect to any party’s indemnification
obligations hereunder, any and all losses, liabilities, damages and claims, and
all related costs and expenses (including without limitation reasonable
attorneys’ fees).

 

  1.1.32. “Market Data” has the meaning set forth in Section 9.3.1.

 

  1.1.33. “Mass Quoting Functionality” means functionality that would allow
designated Globex users to submit to Globex both bids and offers across multiple
strike-price futures options instruments, but within a single series (meaning a
specific expiration date), using a single message.

 

 

1.1.34.

“NYMEX ACCESS” means the NYMEX ACCESS® electronic trade execution system. For
purposes of this Agreement, the term NYMEX ACCESS shall also be deemed to
include any electronic trading system that is a successor to NYMEX ACCESS.

 

  1.1.35. “NYMEX ACCESS Contracts” means NYMEX Products that are listed by NYMEX
for trading on NYMEX ACCESS prior to Launch Date 2.

 

  1.1.36. “NYMEX Big Contracts” means the NYMEX Globex Contracts that are
futures contracts that are full-sized versions of NYMEX futures contracts traded
on the NYMEX trading floor.

 

  1.1.37. “NYMEX ClearPort” means the NYMEX ClearPort® electronic trade
execution system. For purposes of this Agreement, the term NYMEX ClearPort shall
also be deemed to include any electronic trading system that is a successor to
NYMEX ClearPort.

 

  1.1.38. “NYMEX Core Commodities” means the energy and metals commodities
underlying NYMEX Products (including both a commodity and an index of prices of
such commodity if settlement of a futures contract to that index can be used as
a substitute for a futures contract that is settled by delivery of the
commodity).

 

  1.1.39. “NYMEX Europe” means NYMEX Europe Limited and NYMEX Europe Exchange
Holdings Limited, collectively or individually as the context requires.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  1.1.40. “NYMEX Globex Contracts” means all NYMEX Products that are listed by
NYMEX for trading on Globex. NYMEX Globex Contracts refers only to the products
actually listed on Globex and not to any other NYMEX Product, even though it may
be identical as to contract specifications but for the mode of trading.

 

  1.1.41. “NYMEX Marketing Materials” has the meaning set forth in
Section 9.2.1.

 

  1.1.42. “NYMEX Marks” has the meaning set forth in Section 9.2.2.

 

  1.1.43. “NYMEX Mini Contracts” means the NYMEX Globex Contracts that are
futures contracts that are smaller-sized versions of NYMEX Products that are
futures contracts traded on the NYMEX trading floor.

 

  1.1.44. “NYMEX Products” means all futures and futures options products listed
for trading by NYMEX as to which NYMEX is the DCM (and all OTC Look-Alike
versions of such products), including products traded on NYMEX’s trading floor,
COMEX Products, NYMEX ACCESS Products, products traded on NYMEX ClearPort and
the NYMEX Globex Contracts, and futures or futures options products (or OTC
Look-Alike products) traded by any NYMEX Affiliate or any entity that NYMEX
acquires or with which NYMEX merges.

 

  1.1.45. “OTC Look-Alike” means, with respect to a traded product, a
standardized instrument that mimics a futures or futures option product that is
listed for trading by NYMEX, which instrument is traded by means of the
facilities of a trading system that is not a DCM. Neither the size of the OTC
contract nor the form of delivery shall be relevant to whether the contract is
an OTC Look-Alike.

 

  1.1.46. “Performance Standards” has the meaning set forth in Section 6.2.

 

  1.1.47. “Person” means an individual, partnership, limited partnership,
corporation, limited liability company, joint stock company, unincorporated
organization or association, trust or joint venture, or any other similar entity
as the context reasonably permits.

 

  1.1.48.

“Prior Year’s Fees” means the actual Fees payable under Exhibit B for a period
of 12 full calendar months that precedes any reference date given in this
Agreement, provided that if the actual Fees for such period are less than the
applicable annual minimum payment, as described in Exhibit B, then the annual
minimum payment shall be the Prior Year’s Fees. For purposes of determining an
annual minimum payment to compare to an amount of Fees that were payable, the
annual minimum payment shall be calculated hypothetically for any 12-month
period that does not align to an annual period specified in Exhibit B. For
example, if Year 1 under Exhibit B is July 1, 2006 through June 30, 2007, and
Prior Year’s Fees must be measured for a reference date of April 15, 2008, the
applicable twelve month period would be April 1, 2007 through March 30, 2008,
and the hypothetical annual

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

minimum payment would be $ [***Redacted***] $ [***Redacted***] + $
[***Redacted***]

 

  1.1.49. “Project Plans” has the meaning set forth in Section 8.1.

 

  1.1.50. “Proprietary Business Information” has the meaning set forth in
Section 17.1.

 

  1.1.51. “Qualifying NYMEX Contract” means a NYMEX Globex Contract listed
during regular trading hours (i) that is identical in specifications to the
applicable version of the product that is traded on the NYMEX trading floor,
including physical delivery of the product, such that a long contract of such
product traded on Globex automatically offsets a short contract of such product
traded on the NYMEX trading floor (and vice-versa), (ii) where at least 4
contract months of such product are listed on Globex at all times (with five
available during the roll period), (iii) where implied calendar spreading is
permitted during all Trading Hours, (iv) where pricing is comparable, meaning
that the pricing structure does not discourage electronic trading, and (v) where
trading rules (other than rules relating to credit and similar limits imposed on
users of electronic systems on the basis of such users’ particular
characteristics) are identical in all material respects and not structured to
discourage electronic trading. A NYMEX Globex Contract that fully replaces the
version of the product that is traded on the NYMEX trading floor shall also
qualify as a Qualifying NYMEX Contract, regardless of whether it is physically
delivered or cash-settled. Additionally, if a NYMEX Big Contract that is
cash-settled becomes the dominant product for a particular underlying commodity,
CME shall negotiate in good faith as to whether it qualifies as a Qualifying
NYMEX Contract, even if the physically-delivered version of the product
continues to be traded on the NYMEX trading floor.

 

  1.1.52. “Specifications Intellectual Property” has the meaning set forth in
Section 3.4.6.

 

  1.1.53. “System Malfunction” has the meaning set forth in Section 6.6.1.

 

  1.1.54. “Term” has the meaning set forth in Article 2.

 

  1.1.55. “TPS” means transactions per second, calculated by determining the
average number of order entry, order modification, order cancel, request for
quote messages and other similar messages received by the match engine per
second.

 

  1.1.56. “Trading Hours” has the meaning set forth in Section 7.1.1.

 

  1.2. References. Unless something in the subject matter or context is
inconsistent with the resulting interpretation, all references to Sections,
Paragraphs, Articles and Exhibits are to Sections, Paragraphs, Articles and
Exhibits of this Agreement. The words “hereto”, “herein”, “of this Agreement”,
“under this Agreement” and similar expressions mean and refer to this Agreement.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  1.3. Headings. The inclusion of headings in this Agreement is for convenience
of reference only and does not affect the construction or interpretation of this
Agreement.

 

  1.4. Interpretation. The use of any term herein in the singular shall, where
appropriate, include the plural and vice versa. The word “include”, “includes”
and “including” will be deemed to be followed by the words “without limitation”.
“Futures”, “futures options,” “products” and “contracts”, as used herein,
encompass the listing of multiple contract months for delivery; a new contract
month, for example, is not a new or different product for purposes of this
Agreement. However, a futures product is a different product or contract from a
futures options product or contract, even though the futures options product may
settle into the futures contract, and both are economically linked to the same
underlying commodity.

 

  1.5. Exhibits. The Exhibits forming part of this Agreement are as follows:

 

  Exhibit A CME Services

  Exhibit B Fees

  Exhibit C NYMEX Market Maker Agreements

  Exhibit D Information Sharing Agreement

  Exhibit E Cross Margining Agreement

 

2. TERM

This Agreement shall commence on the Effective Date and, unless sooner
terminated in accordance with Article 12 below, shall terminate on the 10th
anniversary of Launch Date 1. Upon expiration of the initial term, this
Agreement shall automatically renew for successive three-year renewal terms
unless either (i) NYMEX notifies the CME in writing at least twelve (12) months
prior to the beginning of the applicable renewal term of its decision not to
renew or (ii) CME notifies NYMEX in writing at least eighteen (18) months prior
to the beginning of the applicable renewal term of its decision not to renew.
The initial term and the renewal terms, if any, shall collectively be referred
to herein as the “Term”.

 

3. NYMEX GLOBEX CONTRACTS; NON-COMPETE

 

  3.1. NYMEX Globex Contracts.

 

  3.1.1. Required NYMEX Mini Contracts. NYMEX Mini Contracts on light, sweet
crude oil, natural gas, heating oil, gasoline shall be listed for trading on
Globex on Launch Date 1. Each of the foregoing NYMEX Mini Contracts (i) must be
listed during both daytime and night-time trading hours, and (ii) shall continue
to be listed for trading on Globex during the Term unless and until a Qualifying
NYMEX Contract on the same underlying commodity is listed for trading on Globex
(at which point NYMEX may but need not delist the NYMEX Mini Contract).

 

  3.1.2.

Required NYMEX Big Contracts. NYMEX Big Contracts on light, sweet crude oil,
natural gas, heating oil and gasoline shall be listed for trading during regular

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  trading hours on Globex on Launch Date 1. Each of the foregoing NYMEX Big
Contracts must be listed during both daytime and night-time trading hours. NYMEX
shall determine in its discretion whether a NYMEX Big Contract will be settled
on a cash basis or by physical delivery, except that, beginning on
[***Redacted***], physically-delivered NYMEX Big Contracts must be listed for
trading during night-time trading hours, even if cash-settled NYMEX Big
Contracts are also listed. If a NYMEX Big Contract is settled by physical
delivery, it must be considered to be the same product for clearing purposes as
the related version of the product that is traded on NYMEX’s trading floor such
that positions of the NYMEX Big Contract automatically offset positions of that
product that are traded on the trading floor. If a NYMEX Big Contract is
cash-settled, any NYMEX Mini Contract that is based on the same underlying
commodity must be fungible at the clearing level with cash-settled NYMEX Big
Contracts of equivalent total notional value, meaning that NYMEX shall establish
an administrative process by which NYMEX Mini Contract positions may offset
NYMEX Big Contract positions upon request and without charge.

 

  3.1.3. NYMEX ACCESS Contracts. All NYMEX ACCESS Contracts (except for NYMEX
ACCESS Contracts that are COMEX Products, as further set forth in and subject to
Section 4.4) shall be listed for trading as NYMEX Globex Contracts on Launch
Date 2. NYMEX ACCESS Contracts that are listed as NYMEX Globex Contracts must be
listed during night-time trading hours at a minimum, and must be considered to
be the same products for clearing purposes as any related version that is traded
on NYMEX’s trading floor such that positions of the NYMEX Globex Contract
automatically offset positions of that product that are traded on the trading
floor. As used throughout this Section 3.1, “daytime” trading hours means at
least the same hours as apply for trading on NYMEX’s trading floor, and
“night-time” trading hours means at least the trading hours during which NYMEX
ACCESS Products were available for trading, in either case only to the extent
that CME can support such hours as described in Section 7.1.1.

 

  3.1.4. NYMEX ClearPort. With respect to NYMEX Products permitted to be listed
for trading on NYMEX ClearPort in accordance with Section 3.3.2, if any such
NYMEX Product achieves an ADV of [***Redacted***] or more contracts in any
rolling [***Redacted***]-month period following the [***Redacted***], NYMEX
shall promptly add such NYMEX Product to Globex by providing the notice
described in Section 3.2.1 and shall delist the NYMEX Product from NYMEX
ClearPort for trading upon its listing for trading on Globex.

 

  3.1.5. COMEX Products. NYMEX shall use commercially reasonable efforts to
persuade the COMEX Governors Committee to approve the listing of NYMEX Mini
Contracts and NYMEX Big Contracts on gold, silver and copper during daytime
trading hours; in support of this effort NYMEX shall facilitate meetings among
CME senior management and members of the COMEX Board.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  3.1.6. Other NYMEX Products. NYMEX may in its discretion include additional
NYMEX Products to be listed on Globex on Launch Date 1 or Launch Date 2, subject
to the requirements of Article 4. Thereafter, NYMEX may from time to time add
other NYMEX Products to Globex as set forth more fully in Section 3.2.

 

  3.1.7. Options Products. By the [***Redacted***] of the [***Redacted***],
NYMEX shall have listed options, with a reasonable number of strikes and
expirations, on each NYMEX Globex Contract that is functionally equivalent to a
NYMEX Product on which NYMEX listed futures options for trading (whether
electronically or on NYMEX’s trading floor) as of the Effective Date.
Functionally equivalent, as used above, means having identical or near identical
specifications, including as to size or notional value, but excluding
distinctions between cash-settlement and settlement by physical delivery. For
the avoidance of doubt, nothing in this Section 3.1.7 will obligate COMEX
Products that are futures contracts to be listed for trading during daytime
trading hours.

 

  3.2. New Products, Changes to Products or Contract Specifications.

 

  3.2.1. Generally. NYMEX shall be responsible for determining the products on
which the NYMEX Globex Contracts will be based and the specifications for such
contracts. NYMEX may, in its discretion, from time to time add or withdraw NYMEX
Globex Contracts and/or modify any of the specifications for the NYMEX Globex
Contracts, provided that any addition, withdrawal or modification does not
effectively contravene any provision of this Agreement, and subject to
Section 6.8 with respect to any new functionality that may be required to
support such change or a new NYMEX Globex Contract. NYMEX shall, as soon as
reasonably practicable, provide the GCC advance written notice of any addition
or withdrawal of a NYMEX Globex Contract or modification of the specifications
for a NYMEX Globex Contract.

 

  3.2.2. CME Obligations and Objections. Following receipt of a notice specified
in Section 3.2.1 above, CME shall (i) promptly effectuate the addition, deletion
or modification to specifications (generally within 30 Business Days, absent
unusual circumstances such as a systems freeze that also limit the listing of
new CME Globex Contracts), or (ii) within ten (10) Business Days of GCC’s
receipt of such notice, notify NYMEX that CME has determined in its reasonable
discretion that a proposed addition of a NYMEX Globex Contract or modification
to specifications for an existing NYMEX Globex Contract (A) would materially
increase CME’s costs of providing the CME Services or (B) would require
modifications to the CME Systems that would materially impair functionality or
materially increase operational costs. Upon receipt of such notice from CME,
NYMEX shall (1) withdraw its proposed addition or modification to
specifications, or (2) work with CME to revise the proposed addition or
modification such that any CME objections are remedied and submit a change
request to CME in accordance with Section 6.8.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  3.2.3. Spread Trading. Without limiting the generality of Section 3.2.1, NYMEX
shall be responsible for determining the extent to which spread trading shall be
permitted among NYMEX Globex Contracts or between NYMEX Globex Contracts and
other products listed for trading on Globex, and CME shall use reasonable
commercial efforts to enforce such decisions within the limits of the CME
Systems. Consistent with this requirement, (i) NYMEX may determine whether to
allow Eligible Participants to include NYMEX Globex Contracts within
user-defined spreads after CME launches user-defined spreading functionality
(NYMEX understands that the CME may not be able to limit the functionality such
that it would allow user-defined spreading only within the universe of NYMEX
Globex Contracts), and (ii) if an Eligible Participant registers to connect an
automated trading system to Globex and indicates an intention to automatically
trade spreads between NYMEX Globex Contracts and other products listed for
trading on Globex, CME shall reject such registration or application.
Notwithstanding the foregoing, NYMEX understands and agrees that CME’s ability
to enforce limitations on inter-commodity spread trading by users is limited.
Furthermore, CME may in its sole discretion modify or eliminate altogether any
requirement that users of Globex register or seek approval for automated trading
systems.

 

  3.2.4. Withdrawal. Notwithstanding the foregoing, a NYMEX Globex Contract
shall be withdrawn from trading if either party notifies the other party that it
(i) has determined in its reasonable discretion, upon consultation with
competent counsel in the relevant jurisdiction, that initiating or continuing
trading of such product pursuant to this Agreement would violate any applicable
law, regulation or order, and (ii) is unable, after reasonably diligent efforts,
to secure appropriate relief. The party giving notice shall notify the other
party as soon as reasonably practicable after determining that initiating or
continuing trading of a NYMEX Globex Contract may violate any applicable law,
regulation or order, and each party shall provide reasonable cooperation to the
other in efforts undertaken to secure appropriate relief.

 

  3.3. Exclusive Arrangement.

 

  3.3.1. Exclusivity. Globex shall be the exclusive platform for electronic
trading of NYMEX Products during the Term, except as set forth in Section 3.3.2
or Section 4.4.3.

 

  3.3.2. Limited Exception for NYMEX ClearPort. Notwithstanding the foregoing,
NYMEX shall be entitled to list NYMEX Products for trading on NYMEX ClearPort
rather than on Globex only if such products are listed for clearing on NYMEX
ClearPort and only if listing of the product for trading is required for
regulatory purposes, provided that if any such NYMEX Product listed on NYMEX
ClearPort Trading achieves an ADV of [***Redacted***] contracts or greater in
any rolling [***Redacted***]-month period following the Effective Date, NYMEX
shall promptly add such NYMEX Product to Globex by providing the notice
described in Section 3.2.1 and shall delist the NYMEX Product from NYMEX
ClearPort Trading upon its listing on Globex.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  3.3.3. Dubai Mercantile Exchange. Following the Effective Date, CME and NYMEX
shall engage in good faith negotiations concerning the inclusion of products
listed for trading by DME in the service arrangement set forth in this
Agreement. Neither party shall be bound to any particular outcome of such
negotiations, except that CME shall be obligated at the request of NYMEX and DME
to include DME products in this Agreement on the same terms as if they were
NYMEX Products.

 

  3.3.4. NYMEX Europe. NYMEX shall use its commercially reasonable efforts to
encourage NYMEX Europe to become a party to this Agreement, in which case NYMEX
Europe shall be deemed an Affiliate, pursuant to the terms of an amendment to be
mutually agreed among CME, NYMEX and NYMEX Europe. Notwithstanding anything
herein to the contrary, neither NYMEX nor NYMEX Europe shall have any obligation
to list products of NYMEX Europe on Globex unless and until appropriate
regulatory approvals are obtained.

 

  3.4. Non-Compete. The following restrictions shall apply to CME during the
Term:

 

  3.4.1. Generally. CME shall not list any Competitive Contract for trading on
Globex and shall not allow another Person to make any Competitive Contract
available for trading through Globex, provided that the following conditions
shall apply:

 

  (1) Between [***Redacted***], CME may not list (or announce that it will list
for trading) any new CME Globex Contract that would be a Competitive Contract to
a NYMEX Globex Contract that NYMEX indicates it will list for trading on either
Launch Date 1 or Launch Date 2 (as described in Section 4.1).

 

  (2) Beginning on [***Redacted***], CME may not list for trading any new
Competitive Contract to a NYMEX Globex Contract (i) during the first year of
trading of such NYMEX Globex Contract and (ii) after the first year of trading
of such NYMEX Globex Contract provided that it achieves and maintains an ADV of
[***Redacted***] contracts, measured over the three-month period immediately
preceding the first anniversary of the launch of such NYMEX Globex Contract and
on a rolling 3-month basis thereafter.

 

  (3)

Notwithstanding paragraph (2), beginning on [***Redacted***], CME may list for
trading or continue to list for trading any Competitive Contract that CME had
(i) listed for trading or (ii) publicly announced that it would list for trading
with a date certain 90 days or less after the announcement (with any appropriate
regulatory filings prior to or simultaneous with the announcement), in either
case prior to NYMEX notifying CME that it would list a new NYMEX Globex Contract
as to which the Competitive Contract would be competitive. For the avoidance of
doubt and

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  notwithstanding anything to the contrary in this Agreement, no restrictions
under this Section 3.3.1 shall apply to CME Globex Contracts that were listed
for trading prior to the Effective Date.

 

  (4) With respect to COMEX Products specifically, and notwithstanding anything
else in this Agreement to the contrary: (i) between the [***Redacted***] and the
[***Redacted***] anniversary of [***Redacted***], CME may not list for trading
any new CME Globex Contract that would be a Competitive Contract to a COMEX
Product (regardless of the fact that no NYMEX Globex Contract has yet been
listed based on such COMEX Product), and (ii) beginning on the [***Redacted***]]
anniversary of [***Redacted***], CME may list Competitive Contracts to any COMEX
Product, unless that COMEX Product is (a) listed as NYMEX Globex Contracts with
open access to trading for all Eligible Participants, and (b) listed as a NYMEX
Globex Contract that has at the time and maintains thereafter an ADV of
[***Redacted***] contracts, measured on a rolling 3-calendar month basis
thereafter. At such time as all of the NYMEX Globex Contracts that are based on
COMEX Products are listed with open access for trading by all Eligible
Participants, the provisions of this paragraph shall no longer apply and such
products will fall under the general provisions of this Section 3.3.1, including
paragraphs (1) through (3) above.

 

  3.4.2. Competitive Contracts. “Competitive Contract” means a futures contract,
an option on futures contract or an OTC Look-Alike product that
has[***Redacted***]. Competitive Contract also includes a futures contract, a
futures option contract or an OTC Look-Alike product that has [***Redacted***]
provided that (i) each of the relevant NYMEX Globex Contracts (a) is in its
first year of trading as a NYMEX Globex Contract or (b) achieved and has
maintained [***Redacted***], measured over the three-month period immediately
preceding the first anniversary of the launch of such NYMEX Globex Contract and
on a rolling 3-month basis thereafter, and (ii) the specifications (exclusive of
size or notional value) for the proposed CME Globex Contract are similar enough
to the relevant NYMEX Globex Contracts to be an effective economic substitute
for trading those contracts individually.

 

  3.4.3. NYMEX Europe and DME. The restrictions on CME under Section 3.4.1 shall
not apply with respect to any CME Globex Contract that is based on an underlying
commodity that is the same underlying commodity as a product listed for trading
by NYMEX Europe or DME unless and until NYMEX Europe or DME, as applicable,
becomes a party to this Agreement, in which case products of NYMEX Europe or
DME, as applicable, shall be deemed NYMEX Products within the meaning of this
Agreement.

 

  3.4.4.

CME Mergers or Acquisitions; NYMEX Termination Rights. If CME acquires or merges
with an entity that, at the time of acquisition or merger, is engaged in trading

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

Competitive Contracts, CME shall not be deemed to be in violation of
Section 3.4.3 simply by virtue of ownership or interests acquired through the
acquisition or merger. However, if CME acquires such an entity, the following
provisions shall apply: (i) NYMEX shall have [***Redacted***] months following
announcement of the acquisition or merger to terminate this Agreement and delist
the NYMEX Globex Contracts; (ii) if NYMEX has not elected to terminate under
clause (i) above (whether or not the [***Redacted***]-month period has passed)
and CME proposes to move the acquired entity’s Competitive Contracts to Globex,
CME shall provide NYMEX [***Redacted***] years’ advance written notice, and
NYMEX shall have [***Redacted***] months from receipt of the notice to elect to
terminate this Agreement, in which case the NYMEX Globex Contracts shall be
delisted by the end of the [***Redacted***] –year notice period. For the
avoidance of doubt, CME may deliver the notice described in clause
(ii) simultaneously with the closing of the acquisition or merger. If NYMEX does
not terminate this Agreement, Section 3.4.3 shall be inapplicable during the
remainder of the Term with respect to the products listed for trading by the
acquired entity as of the closing of the acquisition.

 

  3.4.5. Other Services Permitted. For the avoidance of doubt, providing
services that are distinct from electronic trade matching and order routing
(such as clearing services, market surveillance and related regulatory services,
marketing services and billing services) shall not be deemed a violation by CME
of Section 3.4.3; provided that CME shall not, without the express written
consent of NYMEX, provide cross-margining, portfolio margining, spread credits
or other similar forms of margin or performance bond reductions based on NYMEX
Globex Contracts and other contracts or products traded on Globex or cleared by
CME, subject to the terms of the Cross-Margining Agreement.

 

  3.4.6. Licensing of Specifications. NYMEX agrees to license any right, title
or interest it may have in the specifications or settlement prices for the
futures contracts it lists for trading in NYMEX Products as of the Effective
Date (“Specifications Intellectual Property”) to CME, without further
consideration, if and to the extent that such licensing is deemed to be
necessary for purposes of fulfilling the terms of this Agreement.

 

  3.4.7. NYMEX Mergers or Acquisitions. If NYMEX acquires or merges with an
entity that, at the time of acquisition or merger, operates a trading execution
system for futures or futures options products (or OTC Look-Alike versions of
such products), electronic trading of such products shall be subject to the
exclusivity requirement in Section 3.3.1, and all electronic trading of such
products by the acquired entity shall be transitioned to Globex within two years
following closing of the acquisition or merger. The foregoing requirement to
transition the acquired entity’s electronically-traded products shall be subject
to the prior approval of Globex by the applicable regulatory authority, if
necessary, and/or any other necessary regulatory approvals, and CME and NYMEX
will use commercially reasonable efforts to secure any such regulatory approvals
in a timely manner.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

4. LAUNCH DATES

 

  4.1. Launch Dates for NYMEX Globex Contracts. Within 30 days after the
Effective Date, CME and NYMEX shall mutually agree upon (i) target dates for the
Launch Dates, (ii) the list of NYMEX Products that will be listed as NYMEX
Globex Contracts on Launch Date 1 and Launch Date 2, in accordance with the
requirements of Section 3.2 and considering the impact that the inclusion of
additional products may have upon the target launch dates, if any, and
(ii) develop the initial Project Plan or plans for the Launch Dates, as further
described in Section 8.1.1. Launch Date 1 shall include only futures products
and not futures options products; Launch Date 2 may include futures options
products if NYMEX so desires. Nothing in this Section 4.1 is intended to limit
NYMEX’s ability to request listing of additional NYMEX Globex Contracts between
Launch Date 1 and Launch Date 2 pursuant to Section 3.2.1, except that NYMEX may
not require the listing of futures options products sooner than may be agreed
upon between the parties in the Project Plan or plans for the Launch Dates.

 

  4.2. Requirements for Launch Date 1. The parties shall use commercially
reasonable efforts to meet all requirements and resolve all issues necessary to
launch the NYMEX Mini Contracts and the NYMEX Big Contracts on Globex by the
target date for Launch Date 1, but either party may require a delay of Launch
Date 1 upon reasonable advance notice to the other party specifying the reason
that the delay is necessary or appropriate. However, if Launch Date 1 is delayed
by 45 or more days past the target date and the delay is primarily due to the
fault or failure of one party, the party at fault shall owe the other party
liquidated damages equal to [***Redacted***] % of the Fees payable for the first
year after Launch Date 1; if the launch is delayed by 3 months or more, the
liquidated damages level increases to [***Redacted***] %. In any event, Launch
Date 1 must precede Launch Date 2.

 

  4.3.

Requirements and Penalties for Launch Date 2 and Launch Date 3. The parties
shall use commercially reasonable efforts to meet all requirements and resolve
all issues necessary to launch the NYMEX ACCESS Contracts on Globex by the
target date for Launch Date 2, and to launch required implied inter-commodity
spread trading functionality (as described in Section 6.5.2) by Launch Date 3,
including the completion of specifications and functional requirements for
inter-commodity crack spreads and the development of the Project Plan or plans
immediately following the Effective Date that shall specify requirements and
obligations for both parties. Both parties shall use commercially reasonable
efforts to comply with the elements of the Project Plan or plans, but either
party may require a delay of Launch Date 2 or 3 upon reasonable advance notice
to the other party specifying the reason that the delay is necessary or
appropriate. However, if either Launch Date is delayed by 3 months or more past
the target date and the delay is primarily due to the fault or failure of one
party, the party at fault shall owe the other party liquidated damages equal to
[***Redacted***] % of the Fees payable for the first year after the applicable
Launch Date; if the launch is delayed by 6 months or more, the liquidated
damages level increases to [***Redacted***] % and the party not at fault shall
also have the option to continue the Agreement or terminate the Agreement, in
either case receiving the [***Redacted***] % liquidated damages payment from the

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

party at fault. In any event, Launch Date 2 must precede Launch Date 3, and if
liquidated damages described in this Section with respect to Launch Date 2
apply, the target date for Launch Date 3 shall be extended by the amount of time
by which Launch Date 2 is delayed, such that liquidated damages payments cannot
be compounded (or repeated, with respect to the right to terminate) unless a
delay of Launch Date 3 is generated independently.

 

  4.4. COMEX Products. Within [***Redacted***] days following the
[***Redacted***] NYMEX shall determine whether the NYMEX ACCESS Contracts that
are based on COMEX Products will be listed for trading on Globex with open
access for all Eligible Participants or with closed access in which trading on
Globex is limited to NYMEX Members that are members of the COMEX Division. If
open access is selected, then the products shall be listed for trading on Launch
Date 2. If closed access is selected, the following provisions shall apply:

 

  4.4.1. Project Plan. Promptly following NYMEX’s notice to CME of its decision,
the parties shall cooperate to create a Project Plan for developing
functionality to support closed access, provided that the manner of developing
and implementing this functionality shall be left largely to CME’s discretion.

 

  4.4.2. Launch Date. The Project Plan shall include a target launch date for
the functionality, which shall be determined by CME in its sole discretion,
subject only to the following requirements: (i) CME will use commercially
reasonable efforts to identify an approach that will allow the target date to be
the same target date as applies for Launch Date 2, and (ii) the target date will
not be any later than [***Redacted***], unless the reason for a later launch
date is based upon material information or requirements that were not disclosed
by NYMEX to CME prior to the Effective Date. CME in its discretion may
thereafter delay the launch date by establishing a new target date that is no
later than [***Redacted***] upon reasonable advance notice to NYMEX.

 

  4.4.3. COMEX Products on NYMEX ACCESS. Notwithstanding Section 3.3.1, NYMEX
may continue to list COMEX Products on NYMEX ACCESS until the closed access
functionality is launched.

 

  4.4.4. Delay by NYMEX. If the launch date is delayed for reasons that are
primarily the fault or failure of NYMEX, including by reason of information or
requirements that were not disclosed by NYMEX to CME before the initial target
date was determined, then NYMEX shall pay CME Fees for all volume traded in
COMEX Products on NYMEX ACCESS as if such trading had occurred on Globex,
beginning on the initial target date. If the launch date is delayed beyond
[***Redacted***], primarily due to the fault or failure of NYMEX, NYMEX shall
owe CME liquidated damages equal to [***Redacted***]% of the Fees payable for
the [***Redacted***] after the launch occurs, and CME shall also have the option
to terminate the Agreement [***Redacted***].

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  4.4.5. Delay by CME. If the launch date is delayed beyond [***Redacted***],
primarily due to the fault or failure of CME, CME shall owe NYMEX liquidated
damages equal to [***Redacted***]% of the Fees payable for the [***Redacted***]
after the [***Redacted***] occurs, and NYMEX shall also have the option to
terminate the Agreement in such case still receiving the [***Redacted***]%
liquidated damages payment.

 

  4.4.6. Cost of Modifications. NYMEX shall reimburse CME for its fully-loaded
costs of making the modifications described in this section, up to a maximum of
[***Redacted***] in the aggregate. CME shall bear any costs above this amount,
except to the extent that the excess cost fairly may be attributed to
information or requirements that were not disclosed by NYMEX to CME before the
initial target date was determined, or material requirements other than the
requirement that access to trading in COMEX Products be available only to COMEX
Division members.

 

  4.5. Liquidated Damages Payments. The amounts described above for liquidated
damages shall be calculated on the basis of Fees payable for the twelve full
calendar months immediately following the applicable launch date, calculated
using the method described in the definition of Prior Year’s Fees in
Section 1.1.48, and any liquidated damages owed shall be paid within 30 days
after notice of the amount owed is submitted to the payor by the payee.
Additionally, if one party is primarily at fault for an initial period of delay
but the other party is primarily at fault for a second period of delay, the
damages shall be considered equal and shall cancel each other, without any right
of termination. As used in this Article 4, “primarily due to the fault or
failure of one party” means that the delay was proximately caused by factors
within the party’s reasonable control, and material mistakes or failures by the
other party did not so substantially contribute to the delay that it likely
could have avoided. The parties agree that the liquidated damages described in
this Article 4 represent a reasonable measure of damages. The parties agree that
calculating the actual measure of damages to either party under the
circumstances in which a Launch Date is delayed would be extremely difficult
given the complexities of the business arrangements, the uncertainty of the
revenues to be earned by either party through the arrangements set forth in this
Agreement, and the uncertainty of the value of the opportunities that will have
been lost by the terminating party if this Agreement is terminated as a result
of any such delay. Amounts paid as liquidated damages under this Article 4 shall
not be applied against the limits on liability set forth in Article 19.
Notwithstanding the foregoing, if this Agreement is terminated by either party
under Section 4.3 as a result of the willful misconduct of the other party, then
the terminating party shall be entitled to seek actual damages in lieu of the
liquidated damages penalty specified above.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

5. ACCESS ARRANGEMENTS; CME MARKET MAKERS

 

  5.1. Access to NYMEX Globex Contracts.

 

  5.1.1. Generally. All Persons shall be eligible to execute transactions in
NYMEX Globex Contracts, provided that such Persons (i) are authorized by CME to
execute transactions on Globex and (ii) have established a relationship with a
NYMEX clearing member for the purpose of clearing such transactions (“Eligible
Participants” upon satisfaction of both requirements). CME shall grant Eligible
Participants access to electronic trading of NYMEX Globex Contracts on the same
terms that apply to CME members generally with respect to access to Globex,
other than with respect to fees or any different terms that may result from
regulatory requirements that are not subject to waiver.

 

  5.1.2. Process. Eligible Participants may obtain such access in their
discretion from time to time during the Term through a Globex access mechanism,
including any access interface (each, a “Globex Site”). CME shall provide access
to Globex for transactions in NYMEX Globex Contracts from a Globex Site only
upon CME’s receipt of (i) a Customer Connection Agreement and any applicable
schedules, exhibits or appendices thereto required by CME and (ii) written
confirmation from NYMEX that such Globex Site is approved for Globex access for
the purpose of executing transactions in NYMEX Globex Contracts.

 

  5.1.3. Connectivity Fees. Eligible Participants that are NYMEX members shall
be required to pay the same fees, if any, for access to trading on Globex as
apply to CME members. Eligible Participants that are neither CME members nor
NYMEX members shall pay the same fees without regard to what products they
desire to trade. Globex access fees are subject to change from time to time by
CME in its sole discretion and may vary depending upon the means or type of
access.

 

  5.2. CME Members Trading NYMEX Globex Contracts. Without limitation of the
preferential fees that may apply to market makers designated by CME as set forth
in Section 5.3, (i) Eligible Participants that are CME members but not NYMEX
members or otherwise subject to NYMEX disciplinary jurisdiction apart from the
arrangements set forth in this Agreement shall be deemed customers by NYMEX when
trading NYMEX Globex Contracts, and shall not be subject to NYMEX disciplinary
jurisdiction, except with respect to NYMEX’s authority to terminate any such
Eligible Participant’s access for violations of NYMEX’s rules; and (ii) Eligible
Participants that are CME members may intermediate the execution of trades in
NYMEX Globex Contracts on behalf of customers, provided that such Eligible
Participants are otherwise legally entitled to do so under applicable law.

 

  5.3. CME Market Maker Program for NYMEX Globex Contracts.

 

  5.3.1. Generally. CME shall establish a special market maker program for the
NYMEX Globex Contracts. CME shall determine the terms for the market maker
program

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  and select the Persons to be named as market makers in its sole discretion,
except that the following terms shall apply: (i) the selected market makers
shall be entitled to trade NYMEX Globex Contracts at NYMEX member rates, (ii) if
the market maker is an entity rather than a natural person, multiple traders may
execute trades, but only trades for that entity’s proprietary account shall
qualify for NYMEX member rates, and (iii) if a selected market maker owns or
leases a NYMEX membership, the market maker must maintain that membership status
in order to continue as a market maker under the program. The program shall
apply for [***Redacted***] years, measured from the beginning of the month after
Launch Date 1. During the first year, CME may designate up to [***Redacted***]
market makers at any given time. During each of the [***Redacted***] and
[***Redacted***] years, CME may designate up to [***Redacted***] market makers
at any given time. During the [***Redacted***] year, CME may designate up to
[***Redacted***] market makers at any given time. CME may add, remove or replace
designated market makers in its discretion at any time during the program,
subject only to the maximum numbers above. For the avoidance of doubt, nothing
in this Section 5.3 shall entitle the designated market makers to trade the
pit-traded NYMEX Products at NYMEX member rates by virtue of participation in
the market maker program. In the event NYMEX elects to eliminate all existing
market maker programs (described below in Section 5.3.3.) prior to Launch Date
1, then the CME market maker program shall apply for only [***Redacted***]
years, measured from the beginning of the month after Launch Date 1. During the
first of the [***Redacted***] years, CME may designate up to [***Redacted***]
market makers at any given time; during each of the following years, CME may
designate up to [***Redacted***] market makers at any given time.

 

  5.3.2. Simultaneous NYMEX Market Maker Programs. During the period of the CME
special market maker program for the NYMEX Globex Contracts, NYMEX shall not
implement or maintain any market maker program (or maintain any benefits under a
past market maker program) for any NYMEX Globex Product, except as may be
mutually agreed upon in writing between the Parties in a formal agreement that
refers specifically to this section of this Agreement, except as specifically
described and subject to the requirements of Sections 5.3.3, 5.3.4 and 5.3.5
below. A NYMEX market maker program, as used in this Section 5.3.2, shall not
include any program that involves purely financial incentives directly to the
market maker (such as waived fees or separate payments), without priority
trading rights or other trading-related privileges or benefits that could impact
the market.

 

  5.3.3. Existing Market Maker Programs. NYMEX represents and warrants that
(i) Exhibit C contains a true and complete list of all market maker programs
currently in effect that will apply to any NYMEX Globex Product (the “Market
Maker Agreements”) and an accurate summary of the critical terms, including
expiration date, if any, and priority trading rights and other trading-related

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  privileges or benefits that could impact the market, (ii) the agreements
identified on Exhibit C accurately and completely reflect all material terms of
each market maker program, and (iii) an accurate copy of each agreement has been
provided to CME.

 

  5.3.4. Undertaking to Modify Existing Market Maker Program in Light Sweet
Crude Oil. Prior to Launch Date 1, the Market Maker Agreement for light sweet
crude oil shall be amended such that (i) from Launch Date until the first
anniversary of Launch Date 1, the market maker priority trading right does not
exceed [***Redacted***]%, (ii) from the first anniversary until the fourth
anniversary of Launch Date 1, the market maker priority trading right does not
exceed [***Redacted***]%, and (iii) no other priority trading rights or other
trading-related privileges or benefits shall be granted beyond those rights,
privileges and benefits outlined in the applicable Market Maker Agreement.

 

  5.3.5. Undertaking to Modify Other Existing Market Maker Programs. Prior to
Launch Date 1, each of the Market Maker Agreements in heating oil, gasoline, and
natural gas will be (i) amended such that (A) the aggregate priority trading
right to all market makers does not exceed [***Redacted***]%, (B) no other
priority trading rights or other trading-related privileges or benefits shall be
granted beyond those rights, privileges and benefits outlined in the applicable
Market Maker Agreements, and (C) the Market Maker Agreements will terminate no
later than the second anniversary of the original execution of the agreements
described in Exhibit C, or (ii) terminated. Notwithstanding clause (i)(C) above,
if the volume threshold for the Market Maker Agreements in natural gas was met
in March 2006, then those agreements may extend until the expiration date that
is specified therein.

 

6. CME OBLIGATIONS AND ONGOING OPERATIONS

 

  6.1. Services Provided. During the Term, CME shall provide the services
described in Part I of Exhibit A hereto (such services, the “CME Services”) with
respect to the NYMEX Globex Contracts.

 

  6.2. Performance Parameters. CME shall provide the CME Services in accordance
with and subject to the performance standards (the “Performance Standards”) set
forth in Part II of Exhibit A.

 

  6.3. CME Systems and Policies.

 

  6.3.1. Generally. The systems utilized by CME in connection with providing the
CME Services and its other obligations hereunder, including, without limitation,
Globex and the various other systems used by CME for order-routing and market
data delivery and all other activities relating to electronic trading, are
referred to herein collectively as the “CME Systems”. CME’s established policies
and procedures relating to the CME Systems and electronic trading generally,
which shall generally

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

(but not exclusively) be policies and procedures of the type described in CME’s
rules, interpretations and other similar documents, are referred to herein
collectively as “CME Policies”.

 

  6.3.2. Application of CME Policies. Except as specifically set forth elsewhere
in this Agreement, the CME Policies shall apply to the trading of the NYMEX
Globex Contracts.

 

  6.3.3. Licensing Charges and Other Fees. Except as specifically set forth
elsewhere in this Agreement, CME shall be responsible for the payment of all
costs, license fees, royalties, use charges or other payments associated with
the intellectual property and technology utilized by CME in connection with the
CME Systems. CME shall use reasonable and prudent means to ensure that no
computer viruses, worms, software bombs, or similar items are introduced into
the CME Systems.

 

  6.4. Performance of Services. CME shall provide the CME Services and perform
its other obligations hereunder in a timely and professional manner, and with
proper and reasonable care by personnel possessing the skills, experience,
qualifications and knowledge sufficient to perform those tasks they are assigned
in connection with providing the CME Services in accordance with this Agreement.
In addition to satisfying the Performance Standards, the quality of the CME
Services generally shall be comparable on average in all material respects to
the services CME provides as to the CME Globex Contracts, except for any
differences that result from (i) differences in the specifications of the NYMEX
Globex Contracts, the nature of the underlying commodities, applicable
regulatory requirements or other matters not within CME’s reasonable control, or
(ii) upgrades in services or technology (excluding capacity upgrades that apply
equally to the NYMEX Globex Contracts and to CME Globex Contracts) the
application of which to the NYMEX Globex Contracts would (A) result in material
increases in CME’s operational costs as to the NYMEX Globex Contracts or
(B) violate any of the conditions described in clauses (i) through (iii) of
Section 6.5.1.

 

  6.5. Systems Modifications.

 

  6.5.1. Generally. Subject to the Performance Standards and the requirements
set forth above, CME may make modifications to the CME Services, the CME Systems
and the CME Policies on its own initiative and at its own expense as it may
reasonably deem necessary or desirable, provided that such modifications do not
(i) materially reduce the scope or quality of the CME Services, (ii) require
NYMEX, NYMEX members or NYMEX customers with access to Globex to make material
changes to systems, software, or equipment other than (A) changes made in the
ordinary course of business, or (B) changes that CME members or customers are
also required to make with respect to any CME Globex Contracts; or
(iii) otherwise impose upon NYMEX any material increase in costs. If CME desires
to make any change that would violate the conditions described in clauses
(i) through (iii) above, CME may make such change only after obtaining NYMEX’s
written consent. Any costs associated with capacity upgrades necessary to
maintain the quality of the CME

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

Services and compliance with the Performance Standards shall be borne by CME.
NYMEX acknowledges and agrees that material changes that will significantly
increase the message traffic associated with NYMEX Globex Contracts may require
development work, the installation and testing of new hardware and software, and
testing with NYMEX and other parties. Consequently, any such material changes
shall be subject to an implementation plan and schedule to be determined by the
parties. Notwithstanding the foregoing, the CME Systems shall have sufficient
capacity for CME to perform the CME Services in accordance with the Performance
Standards for trading of NYMEX Globex Contracts following Launch Date 1 and
Launch Date 2, and increases in message traffic associated with these product
launches shall be managed at CME’s expense.

 

  6.5.2. Implied “Crack” Spreads. Promptly following the Effective Date, CME and
NYMEX shall work cooperatively to define the scope for implied inter-commodity
spreading functionality to be available for Launch Date 2 (expected to include
1:1 crack spreads) and Launch Date 3 (expected to include 3:2:1 crack spreads
and 5:3:2 crack spreads). The addition of this implied inter-commodity spreading
functionality shall not be deemed a change request by NYMEX pursuant to
Section 6.8.

 

  6.5.3. Communications. Following the Effective Date, information technology
personnel at CME and NYMEX shall cooperate to develop procedures for sharing
information as to material modifications to the CME Systems or CME Policies that
are likely to materially affect trading in the NYMEX Globex Contracts.

 

  6.6. System Malfunction; Notification to NYMEX.

 

  6.6.1. Generally. CME shall promptly report to NYMEX’s Chief Information
Officer or any other individual designated by NYMEX: (i) any and all material
malfunctions in or any delay or interruption of the CME Services or the CME
Systems as relates to the NYMEX Globex Contracts (including, without limitation,
any material slowdowns of the CME Systems) (each, a “System Malfunction”), as
and when such System Malfunction is discovered by CME or CME otherwise becomes
aware of it; (ii) any knowledge of circumstances that could reasonably result in
any System Malfunction; and (iii) CME’s proposed solution to any of the
circumstances described in clauses (i) and (ii), if any. NYMEX’s CIO and other
key personnel shall subscribe to CME’s Globex notification service, and
notification over such service shall satisfy the requirements of this provision
except with respect to extreme circumstances or circumstances that affect NYMEX
Globex Contracts in a different manner from CME Globex Contracts.

 

  6.6.2.

Process. CME shall use good faith efforts to remedy any such System Malfunction
(to the extent the System Malfunction is capable of being remedied) and keep
NYMEX reasonably informed of its progress in resolving such System Malfunction.
Designated NYMEX personnel shall be registered in CME’s emergency contact
system. If any such condition persists for longer than

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

[***Redacted***] hour, CME operations and technical staff shall inform CME’s
Managing Director, Operations (or in such person’s absence or unavailability,
CME’s Managing Director, Trading Operations or any Managing Director on CME’s
Management Team), who shall personally oversee efforts to restore full services
and provide NYMEX’s Chief Information Officer regular progress updates. If such
condition persists for longer than [***Redacted***] hours, CME’s Chief Executive
Officer shall be informed, and such Chief Executive Officer shall then maintain
regular contact with NYMEX’s President or his or her designee until the System
Malfunction is resolved or this Agreement is terminated pursuant to Article 13.

 

  6.6.3. Breach of Contract. NYMEX understands and agrees that System
Malfunctions may occur from time to time and that such temporary conditions
shall not be deemed a material breach of this Agreement by CME unless (i) where
CME Globex Contracts are similarly affected, CME fails to restore affected
services as to the NYMEX Globex Contracts on the same general schedule as it
restores such services as to the CME Globex Contracts (except in the case of a
malfunction that affects only the NYMEX Globex Contracts), (ii) in any event,
CME fails to restore affected services within [***Redacted***] Business Days, or
(iii) where a persistent and recurring System Malfunction has damaged or is
reasonably likely to damage trading in the NYMEX Globex Contracts despite notice
from NYMEX of the seriousness of the System Malfunction and a reasonable
opportunity to cure. If any condition set forth in the preceding sentence
occurs, NYMEX may declare CME in material default of this Agreement, without
application of any cure period under Section 13.1 except as described in clause
(iii), and may thereafter exercise its rights set forth in Article 13 below.
Notwithstanding the foregoing and without regard to whether NYMEX exercises its
right, if any, to declare CME in material breach of this Agreement, in any case
in which a System Malfunction persists for longer than [***Redacted***] hours,
NYMEX shall be given a credit against Fees as follows: (x) for outage periods in
which trading is halted because of the System Malfunction, a credit of
[***Redacted***] % of the average daily Fees for the month in which the outage
occurs, multiplied by [***Redacted***], or (y) for periods in which trading is
affected by the System Malfunction but not halted, a credit of [***Redacted***]%
of the average daily Fees for the month in which the outage occurs, multiplied
by [***Redacted***]. Notwithstanding the foregoing, this Section 6.6.3 shall not
apply with respect to any System Malfunction that results from changes in market
conditions or in trading behavior rather than malfunctions or performance
problems within the CME Systems. For example, System Malfunction as used in this
Section 6.6.3 shall not include a slowdown that results from market conditions
generating an increase in message volume that causes TPS as to the NYMEX Globex
Contracts to exceed the thresholds set forth in Part II of Exhibit A.

 

  6.6.4.

Communications. Following the Effective Date, information technology personnel
at CME and NYMEX shall cooperate to develop procedures for sharing

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

information as to System Malfunctions that are likely to materially affect
trading in the NYMEX Globex Contracts, including (i) the identification of
communication escalation procedures to supplement the procedures described in
Section 6.6.2, and (ii) the identification of procedures whereby the NYMEX Chief
Information Officer may participate in formal communications relating to the
System Malfunction (i.e., conference calls, email notifications, etc.) that
involve third parties.

 

  6.7. Backup and Disaster Recovery. CME shall provide, as a part of the CME
Services, such backup and disaster recovery services, procedures and functions
with respect to the NYMEX Globex Contracts as CME provides with respect to the
CME Globex Contracts. CME shall modify its disaster recovery communication plan
to include the NYMEX CEO, the NYMEX CIO and the NYMEX Business Continuity
Coordinator. CME may make newly introduced disaster recovery systems gradually
available to the CME Globex Contracts and the NYMEX Globex Contracts. If a
disaster, system outage or similar event affects services as to both the NYMEX
Globex Contracts and any CME Globex Contracts, CME shall give equal priority to
restoring services to the NYMEX Globex Contracts. Notwithstanding the foregoing,
NYMEX shall be solely responsible for determining and administering any
emergency procedures to facilitate trading of NYMEX Globex Contracts through
other means during any extended Globex outage, such as facilitating trading
through open outcry or on NYMEX ACCESS or permitting “bundling” of orders in
NYMEX Globex Contracts into orders in related NYMEX Products traded on NYMEX’s
trading floor, provided that nothing in this Section shall be deemed to require
NYMEX to establish such procedures. CME shall not be deemed to violate its
obligations under this Agreement by having facilitated trading of CME Globex
Contracts through alternate means during any such extended Globex outage.

 

  6.8. NYMEX Change Requests. CME shall respond to requests from NYMEX
concerning modifications or enhancements to the CME Services or the CME Systems
by evaluating the request, including the cost of the requested change and the
impact of the requested change upon the CME Systems, and providing a response in
accordance with this Section to NYMEX concerning such request within thirty
(30) days of CME’s receipt of such request (unless the complexity of such
request reasonably requires a longer period, in which case CME shall provide an
initial response).

 

  6.8.1. No material concerns. If CME reasonably determines in its sole judgment
that the requested change will not materially impair functionality or materially
increase operational costs to CME or CME members, CME shall submit to NYMEX a
reasonably detailed proposal for implementing the change, which need not be
binding, and which shall include an estimate of the amount to be paid to CME for
any requested change.

 

  6.8.2.

Material concerns. If CME reasonably determines in its sole judgment that the
requested change will materially impair functionality or materially increase
operational costs to CME or CME members, CME may, but shall not be required to,

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

submit to NYMEX a reasonably detailed proposal for implementing the change,
including cost estimates, which need not be binding.

 

  6.8.3. Negotiations in good faith. In any case, the parties shall negotiate in
good faith as to any requested change and the terms of CME’s proposal, if any.
Any change implemented by CME pursuant to this Section shall be made, unless
otherwise agreed, at the sole expense of NYMEX at a commercially reasonable fee
or other financial basis to be agreed upon between the parties. Such financial
arrangement may include upfront fees and/or modifications to the fee structure
set forth in Exhibit B.

 

  6.9. Investigations and Complaints; Notice to NYMEX. CME shall inform NYMEX of
(i) any inquiry it receives from any governmental or regulatory authority
concerning trading irregularities in the NYMEX Globex Contracts, to the extent
that notification to NYMEX would not violate any confidentiality requirements
imposed upon CME by any governmental or regulatory authority, and (ii) any
formal complaint it receives from any Person concerning trading systems, rules
or procedures as relates to the NYMEX Globex Contracts. For purposes of clause
(ii), a “formal complaint” shall generally be in writing, directed to a
responsible official at CME, and shall relate specifically to the NYMEX Globex
Contracts, and not to Globex generally. Formal complaints shall not include oral
complaints, questions or comments registered with GCC.

 

  6.10. CME Messaging Policies.

 

  6.10.1. Generally. CME may in its discretion impose policies and procedures
designed to limit the amount of message traffic (typically measured in TPS)
submitted by Globex users on an overall basis or on a product-specific basis
(“CME Messaging Policies”). CME Messaging Policies may include, without
limitation, registration requirements, rules prohibiting certain trading
practices, requirements that users limit message traffic or pay penalties for
excess message traffic and cancellation of a user’s access to trading on Globex
for repeated violations. CME may add, cancel or modify any CME Messaging Policy
in its sole discretion. Notwithstanding the foregoing, CME Messaging Policies
shall apply to all Globex users, including users trading NYMEX Globex Contracts,
provided that (i) users trading NYMEX Globex Contracts and users trading CME
Globex Contracts must be treated equally on a per-category basis (i.e., NYMEX
members treated equally to CME members, options market makers designated by
NYMEX treated equally to those designated by CME) and (ii) as to any CME
Messaging Policies that apply on a per-product basis, the CME Messaging Policy
must be determined and applied on even-handed basis as to the NYMEX Globex
Contracts based on those products’ characteristics. For example, the ratios to
which Globex users would be limited for NYMEX Globex Contracts under the 2005
Messaging Policy (as defined below) would be based upon the actual ratios for
NYMEX Globex Contracts, even though actual ratios for NYMEX Globex Contracts may
be higher or lower than actual ratios for CME Globex Contracts from time to time
during the Term.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  6.10.2. 2005 Messaging Policy; Capacity Upgrades. As of the Effective Date,
CME applies a CME Messaging Policy (the “2005 Messaging Policy”) that limits
Globex users to a maximum ratio of TPS to contracts executed for each CME
Product, which ratio is equal to the overall ratio of TPS to contracts executed
in such product and is periodically re-set based on actual experience. The
applicable ratios for the NYMEX Globex Contracts shall be set on the basis of
the first three full calendar months of trading, which ratios will be re-set
from time to time based on actual experience on the same basis as ratios are
re-set for the CME Globex Contracts. Notwithstanding anything to the contrary in
Section 6.10.1, if CME continues to apply the 2005 Messaging Policy and the
actual ratios experienced for any NYMEX Globex Contract increase by more than
50% during any rolling period of twelve calendar months or less, measured on a
monthly basis and compared against the twelve ratios for the prior twelve
calendar months, then CME may in its discretion require NYMEX to either (i) pay
for the direct hardware and software costs for capacity upgrades necessary to
support the excess message traffic or (ii) take steps to limit message traffic
so as to reduce the overall ratio to less than the maximum. The remedy shall be
at NYMEX’s option as between approach (i) or (ii) after receiving a binding
estimate of costs in writing from CME as to approach (i). If NYMEX selects
approach (ii), CME shall cooperate with NYMEX to provide any data necessary in
order for NYMEX to limit message traffic.

 

  6.11. No Obligations as to Transactions Following Match. Without limitation of
CME’s obligations to comply with Section 8.6 and notwithstanding anything to the
contrary in this Agreement, upon matching by CME of a transaction in NYMEX
Globex Contracts as provided for under the terms of this Agreement, CME shall
not be responsible or liable to the parties to such transaction, or their
qualifying clearing member firms, with respect to any clearing guarantee
associated with the performance of such contracts. Nothing in this Section 6.11,
however, is intended to limit CME’s obligations with respect to “phantom
orders”, as described in Section 8.6, or impose upon NYMEX any obligations with
respect to phantom orders, except as described in Section 8.6.

 

  6.12. SAS Certification. CME shall provide, on an annual basis, a SAS70
report, either “Type I” or “Type II” as requested by NYMEX and completed by
CME’s independent auditors, provided that CME shall provide only a Type I report
in respect of calendar year 2006.

 

7. NYMEX OBLIGATIONS

 

  7.1. Designated Contract Market; Market Operations. NYMEX shall be the DCM
with respect to the NYMEX Globex Contracts. As the DCM, NYMEX shall be
responsible for market operations functions as described below and generally
shall perform all other obligations assigned to NYMEX in this Agreement.

 

  7.1.1.

Trading Hours. The daily trading period for each NYMEX Globex Contract shall be
as determined by NYMEX in its discretion from time to time (the “Trading
Hours”), provided that the Trading Hours shall not extend into any period during

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

which Globex is not available as to CME Globex Contracts, which periods are
subject to change by CME in its discretion. If NYMEX determines to modify the
Trading Hours as to any NYMEX Globex Contract, NYMEX shall provide the GCC at
least five (5) Business Days advance notice. If CME determines to modify the
daily trading period during which Globex is available as to CME Globex Contracts
and such change impacts the NYMEX Globex Contracts, CME shall provide NYMEX
notice of such determination at least five (5) Business Days in advance of
effecting such change. Notwithstanding the foregoing, where special market
conditions exist NYMEX may determine to extend the trading period for a
particular day and CME shall use commercially reasonable efforts to implement
such extension upon NYMEX’s notification to GCC, provided that (A) NYMEX must
provide a minimum of one (1) hour of advance notice of such extension (before
the regularly-scheduled close) and (B) CME shall not be obligated to extend the
Trading Hours later than 4:30 p.m. Chicago time (or such other time as may begin
the daily maintenance shutdown for the CME Systems, if any), unless NYMEX has
provided sufficient advance notice to CME to permit CME to perform daily
maintenance.

 

  7.1.2. Pre-Opening Procedures. NYMEX shall be responsible for determining the
pre-opening period as to the NYMEX Globex Contracts, provided that such period
must be thirty (30) seconds or longer, and, subject to Section 6.8, may modify
such period at any time, by providing GCC at least five (5) Business Days’
advance notice.

 

  7.1.3. Holidays. NYMEX shall provide the GCC an annual list of holidays as to
NYMEX Products and shall provide the GCC at least five (5) Business Days advance
notice of any change thereto during the course of the year. For the avoidance of
doubt, CME shall operate Globex as necessary for the trading of NYMEX Globex
Contracts pursuant to this Section even on days when CME Globex Contracts are
not available for trading on Globex due to a CME holiday (but subject to the
limits of Section 7.1.1 with respect to CME’s daily or weekly operational and
maintenance cycles). NYMEX understands and agrees that, in such event, required
operational functions, including GCC functions, may be performed by a
comparatively small number of CME employees.

 

  7.1.4.

Trading Halts; Emergencies. NYMEX shall be responsible for determining, with
respect to any NYMEX Globex Contract, (i) when a trading halt, delayed opening
or other suspension of trading is required and (ii) when trading should resume
or open, as a result of regulatory requirements, market conditions or other
emergencies. In such event, NYMEX shall provide the GCC as much advance notice
of the halt, delay, or suspension, and of the time when trading shall resume, as
is practicable under the circumstances, and CME shall use commercially
reasonable efforts to control trading in accordance with such instructions.
Additionally, NYMEX shall promptly inform CME if at any time during normal
trading hours any relevant pit on NYMEX’s trading floor is closed for any
reason, as applicable with respect to a corresponding NYMEX Globex Contract,
even if

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

NYMEX does not elect to halt trading in such NYMEX Globex Contract. NYMEX will
provide CME a list of persons that may authorize a trading halt.

 

  7.1.5. Matching Algorithm. NYMEX shall determine the matching algorithm or
algorithms that will apply to the NYMEX Globex Contracts, provided that NYMEX
shall make reasonable efforts to consult with CME as to any change in the
matching algorithm from the price-time priority algorithm originally selected by
NYMEX. NYMEX may modify any such algorithm in its discretion, subject to
Section 3.2 and Section 6.8 with respect to algorithms not supported by CME.
NYMEX shall provide the GCC at least five (5) Business Days advance notice if it
elects to use an alternate, existing algorithm as to which programming and other
technical development work is complete. Otherwise, NYMEX shall request the
implementation within the CME Systems of a new algorithm pursuant to a change
request under Section 6.8, and subject to any agreement between the parties as
described in Section 10.2.

 

  7.1.6. Market Maker Programs. Except as described in Section 5.3, NYMEX shall
be solely responsible for determining the market maker programs, if any, that
will apply to the NYMEX Globex Contracts. NYMEX may establish and modify any
such market maker program in its discretion, subject to Section 6.8. NYMEX shall
consult with CME prior to implementing or making material changes to any such
program, and shall provide the GCC such notice of the implementation or
modification as may be required for CME to effectuate necessary changes. “Market
maker program,” as used in this Section, refers to programs that grant one or
more designated Persons particular benefits, such as a guaranteed portion of
order flow, in exchange for such Person’s agreement to satisfy certain market
making obligations that do not apply to other market participants.
Notwithstanding the foregoing, with respect to futures options products, NYMEX
may designate no more than five (5) market makers per futures option product,
which market makers shall be entitled to use Mass Quoting Functionality in order
to quote markets in the products as to which they are designated market makers,
subject only to any message traffic limits as may be imposed by CME from time to
time with respect to market makers using mass quoting functionality in CME
futures options products.

 

  7.1.7. “No Bust” Ranges. NYMEX shall specify the “no bust” ranges that will
apply to the NYMEX Globex Contracts under the error trade policy that applies to
the NYMEX Globex Contracts, which ranges may be modified from time to time by
NYMEX in its discretion, provided, however, that CME may reject or require NYMEX
to modify a no bust range where CME reasonably concludes that the range selected
by NYMEX (i) imposes or is likely to impose undue burdens upon GCC, or
(ii) threatens or is likely to threaten market integrity.

 

  7.1.8.

Daily Product Files. With respect to all NYMEX Globex Contracts, NYMEX shall be
responsible for producing and delivering to CME on a daily basis, at a mutually
agreeable time, a file containing the NYMEX Globex Contracts and a

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

settlement file for such contracts, both in the electronic file format specified
by CME.

 

  7.2. Regulatory Responsibility.

 

  7.2.1. Generally. Except as otherwise specified in this Agreement, NYMEX shall
bear all responsibility and perform all regulatory obligations imposed upon
NYMEX in its capacity as the DCM or the derivatives clearing organization by any
applicable governmental or regulatory authority with respect to the NYMEX Globex
Contracts. NYMEX shall perform all required or appropriate regulatory and
compliance functions with respect to the NYMEX Globex Contracts with the same
care and promptness as to which it performs such services with respect to other
NYMEX Products. Such functions include, without limitation, conducting market
surveillance, investigation and disciplinary proceedings, securing any necessary
regulatory approvals, and conducting all required financial supervision, sales
practice and audit functions.

 

  7.2.2. Notification to CME. NYMEX shall keep CME reasonably informed of
regulatory developments or regulatory issues of which NYMEX is aware that relate
specifically to the NYMEX Globex Contracts (as opposed to general regulatory
issues of which CME would ordinarily be aware in the course of its own
business). This notification requirement applies, without limitation, to any
investigation or audit by NYMEX or by any governmental or regulatory authority
concerning trading irregularities in the NYMEX Globex Contracts, to the extent
that notification to CME would not violate any confidentiality requirements
imposed upon NYMEX by any governmental or regulatory authority.

 

  7.2.3. Trading Rules. Subject to Article 14, NYMEX shall be responsible for
developing, adopting and enforcing trading rules concerning the NYMEX Globex
Contracts (including without limitation rules as to price limits, price banding,
and order size limits, if any), provided, however, that such trading rules may
not (i) require CME or CME members to make material changes to systems, software
or equipment other than changes made in the ordinary course of business,
(ii) otherwise impose upon CME any material increase in costs or increase in
service obligations hereunder, (iii) conflict with any term set forth in this
Agreement, or (iv) violate any applicable law, regulation or order. NYMEX shall
discuss in advance with CME any new trading rule or modification to an existing
trading rule that would require modifications to the CME Systems, and any such
changes shall be subject to the provisions of Section 6.8.

 

  7.3. Derivatives Clearing Organization.

 

  7.3.1.

Generally. NYMEX shall be the derivatives clearing organization under the CEA
(or any corresponding designation under the laws of any non-U.S. jurisdiction)
with respect to the NYMEX Globex Contracts, and shall be responsible for
clearing

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

matched trades in such transactions in accordance with applicable regulatory
requirements.

 

  7.3.2. Acceptance of Matched Trades. Without limitation of CME’s obligations
to comply with Section 8.6, NYMEX shall accept for clearing and shall clear
pursuant to its rules, policies and procedures all matched trades in NYMEX
Globex Contracts that are submitted to it by CME under this Agreement, except
that NYMEX may reject any transaction in NYMEX Globex Contracts executed through
a Globex Site that was not authorized for trading by NYMEX pursuant to
Section 5.1.2. NYMEX agrees that it shall have rules allocating responsibility
for trades.

 

  7.3.3. Clearing System Malfunctions; Notice to CME. NYMEX shall promptly
report to the GCC: (i) any and all material malfunctions in its clearing systems
or any delay or interruption of its clearing services, as and when discovered by
NYMEX; (ii) any knowledge of circumstances that could reasonably result in any
such material malfunction, substantial delay or interruption; and (iii) NYMEX’s
proposed solution to any of the circumstances described in clauses (i) and (ii),
if any. NYMEX shall keep the GCC reasonably informed of its progress in
resolving any such malfunction. CME understands and agrees that such
malfunctions may occur from time to time and such temporary conditions shall not
be deemed a material breach of this Agreement by NYMEX unless (1) where other
NYMEX Products are similarly affected, NYMEX fails to restore affected services
as to the NYMEX Globex Contracts on the same general schedule as it restores
such services as to other NYMEX Products or (2) in all cases, NYMEX fails to
restore affected services within five (5) Business Days. If either condition set
forth in the preceding sentence occurs, CME may declare NYMEX in material
default of this Agreement, without application of any cure period under
Section 13.1, and may thereafter exercise its rights set forth in Article 13
below.

 

8. COOPERATION BETWEEN THE PARTIES; PROJECT PLAN

 

  8.1. Project Plans.

 

  8.1.1. Generally. The parties acknowledge and agree that, prior to the Launch
Dates and for a reasonable period thereafter, they will be engaged in
substantial development work to create or modify systems and develop appropriate
policies and procedures as necessary for each party effectively to perform its
obligations as to the NYMEX Globex Contracts. To aid the parties in implementing
the arrangements set forth in this Agreement, the parties shall work together to
create a detailed implementation and testing plan or plans (“Project Plans”).
The parties shall create a Project Plan or Project Plans to prepare for Launch
Dates 1, 2 and 3 within 30 days following the Effective Date, and for launching
NYMEX Globex Contracts that are based on COMEX Products if closed access is
selected, as described in Section 4.4. Project Plans shall include the
identification of Acceptance Criteria (as defined in Section 8.2.2).

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  8.1.2. Modifications. Project Plans may be modified from time to time by
mutual agreement of the individuals working on the project implementation, who
need not be officers with signing authority, provided that (i) approval by
responsible officers of each party shall be required for modifications that
would materially alter the terms of services to be provided by one or both
parties or that would substantially delay any of the Launch Dates, and (ii) no
modification of a Project Plan shall be deemed to amend or modify the terms of
this Agreement.

 

  8.1.3. Compliance with Terms. The parties shall use commercially reasonable
efforts to adhere to the tasks and schedule set forth in any Project Plan.
Nonetheless, a party’s failure to adhere to a Project Plan with respect to any
particular task or element of the schedule shall not be deemed a material breach
of this Agreement. However, if a party fails to adhere to a Project Plan in any
material respect and such failure (i) was due to factors within such party’s
reasonable control, and (ii) (A) impairs the other party’s ability to comply
with its obligations or (B) threatens to delay any Launch Date beyond that
proposed in the Project Plan, then the party responsible for such failure shall
be obligated to correct such failure at its own expense as expeditiously as
possible, using external consultants if necessary and reimburse the other party
for any additional costs or expenses that it incurs as a result of such failure.

 

  8.2. Testing and Acceptance Criteria.

 

  8.2.1. Testing. The parties shall cooperate to conduct testing of the systems
employed by NYMEX and CME to perform their respective obligations under this
Agreement with regard to listing NYMEX Globex Contracts and processing,
clearing, and billing trades for NYMEX Globex Contracts, including, without
limitation, the CME Systems (collectively, the “Tested Systems”).

 

  8.2.2. Acceptance Criteria. The Project Plan or Project Plans shall also
identify acceptance criteria (“Acceptance Criteria”) for the testing to be
performed, each party shall, in its sole discretion, assess whether the Tested
Systems of the other party conform in all material respects to the Acceptance
Criteria.

 

  8.2.3. Material Conformance. If a party determines that Tested Systems of the
other party conform in all material respects to the Acceptance Criteria, it
shall notify the other of its acceptance.

 

  8.2.4. Non-Conformance. If a party determines that Tested Systems of the other
party fail to conform to the Acceptance Criteria in one or more material
respects (each, a “Defect”), then the party refusing acceptance shall provide
the other party a report identifying each such Defect. Thereafter, the parties
shall cooperate to allocate responsibility for remedying each such Defect and
each party shall, as applicable in accordance with such allocation, (i) use good
faith efforts to promptly remedy the Defect(s), and (ii) notify the other party
once it reasonably believes such Defect(s) has (have) been remedied.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  8.2.5. Re-Testing. Following receipt of notification that each Defect
identified has been remedied, the parties shall cooperate to re-test the Tested
Systems and shall, unless otherwise agreed, repeat the procedures set forth in
Sections 8.2.2, 8.2.3 and 8.2.4 until the earlier of (i) acceptance of the
Tested Systems pursuant to Section 8.2.3 or (ii) notice of termination of this
Agreement is given pursuant to Article 13.

 

  8.2.6. Launch Dates. No Launch Date shall occur unless the Tested Systems (if
any) identified in the applicable Project Plan for such Launch Date are
accepted. Notwithstanding the foregoing, at any time following identification of
any Defect(s), the party refusing acceptance may elect to accept the Tested
Systems despite the existence of such Defect and proceed with a launch provided
that (i) a workaround acceptable to such party exists for each Defect and
(ii) unless otherwise agreed by the parties, the parties create a mutually
agreed upon detailed plan for remedying each Defect and shall cooperate to
execute such plan and remedy the Defect(s) within ten (10) Business Days
following the proposed date for the applicable launch.

 

  8.2.7. Failure to Accept. In the event a party refuses to accept Tested
Systems in accordance with this Section 8.2, any delay of a Launch Date
resulting from such decision shall not preclude such party from exercising any
right to terminate the Agreement pursuant to Section 13.1 unless such delay is
caused by other factors within the refusing party’s reasonable control (e.g.,
failure to remedy Defects within those systems operated by the refusing party).

 

  8.3. Ongoing Technical Cooperation. Each party acknowledges that during the
Term the other party may have to incorporate new equipment into or modify its
technical systems, policies or procedures in connection with fulfilling its
obligations under this Agreement, including, without limitation, its obligations
under the Cross Margining Agreement. The parties acknowledge that such changes
may require significant development work and testing from time to time. Each
party acknowledges that, in implementing and testing such new equipment or
modifications, it may require the technical assistance and cooperation of the
other, and each party agrees to provide such reasonable assistance and
cooperation to the other upon request, provided that the party requesting
assistance shall reimburse the party providing such assistance with respect to
any extraordinary expenses for matters falling outside the normal course of
ongoing operations or development work for exchange systems. For the avoidance
of doubt, employee time and/or independent contractor time and access to various
systems (including testing, certification and production environments) will
periodically be required, including on weekends and holidays when pre-production
testing is generally performed, and such expenses shall generally not be subject
to reimbursement.

 

  8.4.

Assistance with Regulatory Matters. Each party agrees to cooperate with the
other as reasonable or necessary with respect to any regulatory matters that
relate to the NYMEX Globex Contracts or the cross margining arrangement, and
each agrees to make available sufficient human and technical resources as
necessary to assist the responsible party with any submissions or presentations
to, or meetings or discussions with, the staff of the

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

CFTC or any other governmental or regulatory body with jurisdiction. If a party
reasonably determines that its active participation in such submissions,
presentations, meetings or discussions could result in the disclosure of
confidential or proprietary information, the party requesting such assistance
shall provide assistance in securing appropriate nondisclosure and
confidentiality commitments from the CFTC or other governmental or regulatory
authority prior to any such disclosure.

 

  8.5. Information Sharing. Without limiting the generality of Section 8.4, the
parties shall simultaneously herewith enter into the Information Sharing
Agreement attached as Exhibit D hereto.

 

  8.6. Management of Negligence Claims and Phantom Orders.

 

  8.6.1. Generally. The parties agree that (i) Eligible Participants shall be
entitled to file against CME claims alleging negligence by GCC personnel or CME
employees with respect to transactions in NYMEX Globex Contracts, which claims
shall be filed in accordance with and subject to applicable CME Policies,
procedures and rules including CME Rule 578 and, with respect to claims alleging
negligence involving order statusing, CME Rule 579; and (ii) CME shall respond
to “phantom orders” as to NYMEX Globex Contracts under CME Rule 587 in a
substantially similar manner as it would to phantom orders as to CME Globex
Contracts. The limitation of liability amount set forth in CME Rule 578 shall
apply jointly and in the aggregate to claims involving CME Globex Contracts and
NYMEX Globex Contracts.

 

  8.6.2. Amendment of Rules. CME shall amend its Rules to the extent necessary
or appropriate to permit the procedures outlined in this Section 8.6 and to
permit CME members and NYMEX members to participate in any procedures set forth
in such Rules on the same basis. NYMEX shall also amend its Rules to the extent
necessary or appropriate to permit the procedures outlined in this Section 8.6.

 

  8.6.3.

Administration. CME shall administer claims under CME Rule 578 and Rule 579, and
responses to phantom orders under CME Rule 587, in respect of transactions or
orders in NYMEX Globex Contracts in accordance with the policies and procedures
that it follows with respect to such matters with respect to CME Globex
Contracts, provided that (i) CME shall notify NYMEX of any claim filed under CME
Rule 578 or Rule 579 with respect to transactions in NYMEX Globex Contracts
promptly after such claim is filed (ii) CME shall notify NYMEX of any phantom
order transactions in NYMEX Globex Contracts promptly after such issue is
identified, and (iii) CME shall use reasonable efforts to involve NYMEX
representatives in the process of resolving such negligence claim or phantom
order issue, upon NYMEX’s request. Additionally, NYMEX shall use reasonable
efforts to assist CME with respect to any proceeding relating to any such claim
or phantom order transactions upon CME’s request, including the provision of
relevant trading records and other trading data, provided that CME shall
reimburse NYMEX for any reasonable travel expenses or other reasonable
out-of-pocket costs incurred by

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

NYMEX employees or by independent contractors of NYMEX in connection with such
assistance.

 

  8.7. Error Trade Policy Administration and Arbitration of Claims.

 

  8.7.1. Generally. NYMEX shall adopt the CME’s error trade policy, as included
in CME’s Rulebook and subject to amendment from time to time by CME in its
discretion, as the error trade policy for the NYMEX Globex Contracts, provided
that NYMEX shall specify the no bust ranges for NYMEX Globex Contracts in
accordance with Section 7.1.7 (the “Error Trade Policy”). CME shall promptly
notify NYMEX of any changes to the Error Trade Policy, provided that such notice
may be delivered via any rule change notification service utilized by CME, to
which appropriate NYMEX personnel shall subscribe.

 

  8.7.2. Administration. GCC shall administer the Error Trade Policy in the same
manner as it administers CME’s error trade policy as to CME Globex Contracts.

 

  8.7.3. Error Trade Dispute Arbitrations. Notwithstanding the foregoing, any
arbitration under the Error Trade Policy between any Person and any Eligible
Participant shall be administered by NYMEX under its arbitration policies and
procedures. CME shall use reasonable efforts to assist NYMEX with respect to any
such arbitration or related proceeding upon NYMEX’s request, provided that NYMEX
shall reimburse CME for any reasonable travel expenses or other reasonable
out-of-pocket costs incurred by CME employees or independent contractors of CME
in connection with such assistance.

 

  8.7.4. Amendment of Rules. NYMEX shall amend its Rules to the extent necessary
or appropriate to permit the procedures outlined in this Section 8.7 and to
permit CME Members and NYMEX Members to participate in any procedures set forth
in such Rules on the same basis. CME shall also amend its Rules to the extent
necessary or appropriate to permit the procedures outlined in this Section 8.7.

 

9. MARKETING & MARKET DATA

 

  9.1. Marketing.

 

  9.1.1. Globex Marketing. CME shall have sole responsibility for marketing
Globex to potential users, provided that CME shall update its marketing
materials, where appropriate, to include descriptions of the NYMEX Globex
Contracts as products available for trading through Globex. Notwithstanding the
foregoing, NYMEX will be entitled to market Globex to its clearing firms,
members and existing or potential customers. CME and NYMEX shall cooperate to
develop NYMEX marketing materials describing trading on Globex for the NYMEX
Globex Contracts. NYMEX shall have primary responsibility for developing such
materials, which shall be subject to review with respect to the CME Marks and
CME standard usage, as described in Section 9.2.3.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  9.1.2. Product Marketing and Brand Names for NYMEX Globex Contracts. NYMEX
shall have sole responsibility for marketing the NYMEX Globex Contracts to
potential users. Notwithstanding the foregoing, CME will be entitled to market
the NYMEX Globex Contracts to its clearing firms, members and existing or
potential customers. NYMEX shall determine the brand names for the NYMEX Globex
Contracts, which names NYMEX may change from time to time in its discretion
provided that NYMEX must provide CME reasonable advance notice of any such
change. CME agrees that (i) NYMEX may use the term “miNY” (without an “e” or “E”
preceding such term) with respect to NYMEX Products both during and after the
Term, (ii) CME shall not at any time attempt to prevent or otherwise hinder
NYMEX in any effort by NYMEX to use “miNY” as a brand name or as a component of
a brand name for any NYMEX product or in any effort by it to register “miNY” as
a trademark or service mark in the United States or in any other jurisdiction,
and (iii) NYMEX shall own any and all right, title and interest in and to the
term “miNY” that may arise as the result of NYMEX’s usage or registration of
such term or any brand name comprised of such term. For the avoidance of doubt,
the foregoing clause (iii) does not apply to uses or registrations of “e-miNY”
or “E-miNY”.

 

  9.1.3. Joint Marketing Committee. NYMEX and CME shall work in good faith to
establish a joint marketing committee composed of senior product and marketing
staff from each exchange. The joint marketing committee will be charged with
overseeing product marketing efforts, provided that the committee shall make
recommendations and oversee the relationship between NYMEX and CME as to product
marketing, without having any direct authority with respect to the marketing of
the NYMEX Globex Contracts, except as NYMEX may allow from time to time.

 

  9.2. Trade Names and Marks; Review Process.

 

 

9.2.1.

CME Trade Names and Marks. CME authorizes NYMEX to use such trade names and
marks as it may specify (the “CME Marks”) in connection with appropriate
marketing materials, including printed materials and on NYMEX’s web site located
at www.nymex.com (collectively, the “NYMEX Marketing Materials”). In addition to
any additional CME Marks that CME may specify during the Term, CME authorizes
NYMEX to use “CME®”, “CME Globex®” and “Globex TraderSM”. In each instance in
which NYMEX uses any of the CME Marks in NYMEX Marketing Materials, NYMEX shall
use such CME Mark (i) in accordance with any CME trademark usage guidelines, as
amended from time to time and provided to NYMEX by CME and (ii) in any style and
format prescribed by CME to NYMEX, including, without limitation, by employing
as a superscript at the end of the CME Mark any designation(s) of registration
or ownership prescribed by CME (e.g., the symbol “®” for marks registered in the
United States, and the notices “TM” or “SM”, as appropriate). In addition, NYMEX
shall include with each usage of any CME Mark that is a trademark or service
mark a footnote indicating that the identified term is (1) for registered marks,
a trademark or service mark (as appropriate) of CME registered with the United
States Patent and

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

Trademark Office and/or other applicable jurisdiction(s); or (2) for
nonregistered marks, a trademark or service mark (as appropriate) of CME. In
connection with its permitted use of the CME Marks, NYMEX (A) shall use
commercially reasonable efforts to protect the goodwill and reputation of CME
and the CME Marks; (B) shall not in any manner represent that it has any
ownership interest in any of the CME Marks; (C) shall not sublicense the rights
granted in this Section; and (D) specifically acknowledges that NYMEX’s
permitted use of the CME Marks shall not create with respect to NYMEX any
rights, title or interest in or to any CME Mark.

 

  9.2.2. NYMEX Trade Names and Marks. NYMEX authorizes CME to use such trade
names and marks as it may specify (the “NYMEX Marks”) in connection with
appropriate marketing materials, including printed materials and on CME’s web
site located at www.cme.com (collectively, the “Globex Marketing Materials”). In
addition to any additional NYMEX Marks that NYMEX may specify during the Term,
NYMEX authorizes CME to use “COMEX”, “NYMEX”, “NYMEX ACCESS®”, “NYMEX
ClearPort®” and “New York Mercantile Exchange”. In each instance in which CME
uses any of the NYMEX Marks in Globex Marketing Materials, CME shall use such
NYMEX Mark (i) in accordance with any NYMEX trademark usage guidelines, as
amended from time to time and provided to CME by NYMEX and (ii) in any style and
format prescribed by NYMEX to CME, including, without limitation, by employing
as a superscript at the end of the NYMEX Mark any designation(s) of registration
or ownership prescribed by NYMEX (e.g., the symbol “®” for marks registered in
the United States, and the notices “TM” or “SM”, as appropriate). In addition,
CME shall include with each usage of any NYMEX Mark that is a trademark or
service mark a footnote indicating that the identified term is (1) for
registered marks, a trademark or service mark (as appropriate) of NYMEX
registered with the United States Patent and Trademark Office and/or other
applicable jurisdiction(s); or (2) for nonregistered marks, a trademark or
service mark (as appropriate) of NYMEX. In connection with its permitted use of
the NYMEX Marks, CME (A) shall use commercially reasonable efforts to protect
the goodwill and reputation of NYMEX and the NYMEX Marks; (B) shall not in any
manner represent that it has any ownership interest in any of the NYMEX Marks;
(C) shall not sublicense the rights granted in this Section; and
(D) specifically acknowledges that CME’s permitted use of the NYMEX Marks shall
not create with respect to CME any rights, title or interest in or to any NYMEX
Mark.

 

  9.2.3.

Prior Review and Approval. Each party shall provide the other party
representative samples of any CME Marketing Materials or NYMEX Marketing
Materials, as applicable, or other documents, such as press releases, that refer
to the arrangement described in this Agreement or use the other party’s marks,
for the other party’s review and approval (which shall not unreasonably be
withheld) prior to their release. This right of review and approval shall relate
to use of the CME Marks or NYMEX Marks, as applicable, and to materials
describing the

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

arrangement set forth in this Agreement, and not to the marketing materials
generally. The reviewing party shall make good faith efforts to notify the other
party of its approval or request for modification of each representative sample
within three (3) Business Days of receipt of such sample, provided, however,
that if the reviewing party fails to do so within such period, the sample shall
be deemed approved. If modifications are requested, the originating party may
not release the sample without making modifications and securing approval or
eliminating the reference requiring approval. Notwithstanding the foregoing,
prior review or approval shall not be required for routine releases or product
descriptions the form of which has previously been approved.

 

  9.2.4. Changes to Trade Names, Trademarks or Brand Names for NYMEX Globex
Contracts. If either party makes a material change to any of its Marks, or the
guidelines for use of the Marks, it shall use reasonable efforts to inform the
other party of the change, and the other party shall use reasonable efforts to
update all Marketing Materials and other documents as necessary to reflect the
change. CME shall similarly use reasonable efforts to update its Marketing
Materials with respect to any change in the brand names or contract
specifications for the NYMEX Globex Contracts. The obligation to update
materials in accordance with this Section shall be reasonably balanced against
the cost of such updates, in view of the significance of the change and the
likelihood of confusion of market participants or the general public.

 

  9.3. Market Data.

 

  9.3.1. Generally. NYMEX shall be the exclusive distributor of market data
concerning the NYMEX Globex Contracts (“Market Data”), and shall provide for the
distribution of Market Data in a substantially similar manner as NYMEX
distributes market data concerning other NYMEX Products. As between CME and
NYMEX, NYMEX is and shall remain the sole owner of all right, title and interest
in and to Market Data, except that CME shall have a perpetual royalty-free
license to use aggregated historical Market Data in creating and distributing
information relating to the performance of Globex is derived from such Market
Data (e.g., with respect to record Globex volume or number of transactions
processed).

 

  9.3.2. Distribution over Globex Network. CME shall be authorized to make
Globex Market Data, as defined in Exhibit A, available over Globex to market
participants that receive market data through Globex on the same basis as CME
makes available other Globex market data as to CME Globex Contracts.

 

  9.3.3. Display on CME Trading Floor. CME shall be authorized in its discretion
to display Market Data, as well as market data showing prices in related NYMEX
products (i.e., physically delivered NYMEX Products traded on NYMEX’s trading
floor as to which related cash-settled NYMEX Globex Contracts are listed), on
wallboards over its trading floors and on MercQuote, CME’s closed circuit
television system.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  9.3.4. Publication in CME Daily Bulletin. CME shall be authorized in its
discretion to print summary Market Data in its “Daily Bulletin” (in hard copy
and/or on CME’s web site), provided that CME shall state in such publication
that such Market Data is the property of NYMEX and that commercial
redistribution of such Market Data and use of such Market Data other than in
connection with trading the NYMEX Globex Contracts are prohibited.

 

  9.3.5. CME Web Site. NYMEX authorizes CME to display Market Data on CME’s
Internet site, including aggregated and real-time or substantially real-time
Market Data and historical Market Data.

 

  9.3.6. NYMEX Market Data Protection. The parties shall cooperate to agree upon
measures designed to protect NYMEX’s rights in the Market Data (i) with respect
to the use of real-time or substantially real-time Market Data on CME’s Web
Site, and (ii) by ensuring that NYMEX Market Data is protected to the same
degree as market data in the CME Globex Contracts by including NYMEX Market Data
appropriately in the Customer Connection Agreement and in any agreements that
CME has with clearing firms or ISVs relating to market data distribution over
Globex that is under the control of any such clearing firm or ISV.

 

10. INTELLECTUAL PROPERTY

 

  10.1. CME Ownership. Subject to any different agreement between the parties
pursuant to a change request or as otherwise specified in this Section 10, CME
and its licensors, as applicable, shall have sole and exclusive ownership of all
right title and interest in and to the intellectual property (“IP”) and
technology developed or used by CME in connection with providing the CME
Services, including all IP in the CME Systems. Except as provided in Sections
6.5.1 and 6.5.2, no provision of this Agreement shall be construed to bind or
obligate CME in any way to develop, make further enhancements to or maintain any
current or future version of Globex or of any of the related exchange systems or
services, provided that this sentence is not intended to limit or modify in any
other respect CME’s obligations under this Agreement to provide the CME Services
in accordance with and subject to the Performance Standards.

 

  10.2. NYMEX Change Requests. NYMEX may request in writing to retain some or
all IP rights in the functionality, processes, or other features disclosed in a
change request submitted pursuant to Section 6.8. Any such request to retain IP
rights shall be made prior to written approval by authorized representatives of
both parties of any change order based on such change request. In the absence of
such a written approval, CME and/or its licensors, as applicable, shall own all
right, title and interest in any IP created by the parties in connection with
such change order. Notwithstanding the foregoing, NYMEX shall retain any IP
rights that it may have in [***Redacted***] specified by NYMEX in a change
order. To the extent that NYMEX claims such IP rights to [***Redacted***], NYMEX
shall notify CME of such in the change request and indicate the scope of rights
it is granting to CME to [***Redacted***].

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  10.3. Patent License.

 

  10.3.1. Mutual Release. As of the Effective Date, each party and its
Affiliates hereby releases, acquits and forever discharges the other party and
its Affiliates, from any and all claims or liability for infringement (direct,
indirect or contributory) of any patent owned by the parties that arose prior to
the Effective Date, to the extent such infringement would have been licensed
under the license granted in this Section 10 if such license had been in
existence at the time of such infringing activity.

 

  10.3.2. NYMEX Patent License. CME hereby grants, for the duration of the Term,
NYMEX and its Affiliates a non-exclusive, non-transferable, worldwide,
royalty-free license, without the right to sublicense, [***Redacted***].

 

  10.3.3. CME Patent License. NYMEX hereby grants, for the duration of the Term,
CME and its Affiliates a non-exclusive, non-transferable, worldwide,
royalty-free license, without the right to sublicense, [***Redacted***].

 

  10.3.4. Joint Inventions. CME and NYMEX agree to mutually determine whether to
apply for any patent(s) for invention(s) jointly developed and jointly owned
(“Joint Inventions”) and, if so, the procedures by which they will prepare and
prosecute any such patent application(s). The parties agree to cooperate and to
provide reasonable assistance in the prosecution of such patent applications.
The costs for such applications shall be equally shared unless the parties
otherwise agree. Any patent issuing from such a patent application shall be
jointly owned by the parties and the parties may grant licenses to third parties
under such patent without obtaining the permission of the other party or
accounting to the other party for royalties or other consideration in connection
with such license. Neither party shall transfer or assign a jointly held patent
or patent application without the prior written consent of the other party,
which consent shall not be unreasonably withheld, conditioned or delay.

 

  10.4. CME Documentation; Intellectual Property Data. NYMEX shall have a
limited right during the Term to use, modify, and make copies of all manuals and
written policies and procedures provided by CME to NYMEX in the course of
providing the CME Services (“CME Documentation”). Upon the expiration or earlier
termination of this Agreement, NYMEX shall return to CME any and all copies of
CME Documentation or destroyed all CME Documentation in its possession, except
that NYMEX may retain copies of the CME Documentation for archival purposes and
for its appropriate regulatory and surveillance purposes. Upon CME’s request,
NYMEX shall certify such return or destruction. Marketing materials and other
CME Documentation that have been made publicly available shall not be subject to
the return or destroy provision of this Section 10.4.

 

  10.5. NYMEX Data.

 

  10.5.1.

Generally. As between NYMEX and CME, any and all trading data, Market Data,
surveillance records, investigation reports and other similar data or
information

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

created, generated, collected, or processed by CME in the performance of the CME
Services or its other obligations hereunder (“NYMEX Data”) is and shall remain
the sole property of NYMEX, and CME will and hereby does, without additional
consideration, assign to NYMEX any and all right, title and interest that CME
may now or hereafter possess in and to the NYMEX Data. Except as provided in
Section 9.3 and in this Article 10, NYMEX Data shall not be utilized by CME for
any purpose other than the performance of the CME Services under this Agreement
and shall not be sold, assigned, leased or otherwise transferred, disposed of or
provided to third parties by CME or commercially exploited by or on behalf of
CME.

 

  10.5.2. Return Upon Termination. CME shall promptly retrieve and deliver to
NYMEX a copy of all NYMEX Data (or such portions as are specified by NYMEX), in
the format and on the media reasonably prescribed by NYMEX, at NYMEX’s
reasonable request from time to time, including (i) upon the effective date of
termination of this Agreement or (ii) at the completion of any requested
Transition Services. Upon the effective date of termination or at the completion
of any requested Transition Services (whichever is later), if requested by
NYMEX, CME shall destroy or securely erase all copies of the NYMEX Data in CME’s
possession or under CME’s control, except that CME may retain copies of such
NYMEX Data for archival purposes and for its appropriate regulatory and
surveillance purposes. CME shall certify such destruction or secure erasure upon
NYMEX’s request.

 

  10.5.3. Security of Data. In order to safeguard and maintain the security and
confidentiality of the NYMEX Data, CME shall employ all such measures to protect
NYMEX Data as CME employs to protect its own such data, and in no event shall
CME employ less than reasonable measures: (i) to preserve the security of the
NYMEX Data; (ii) to prevent unauthorized access to or modification of any NYMEX
Data; and (iii) to establish and maintain environmental, safety, facility and
data security procedures and other safeguards against destruction, loss,
alteration or theft of, or unauthorized access to, any NYMEX Data.

 

  10.5.4. CME Use. Notwithstanding NYMEX’s ownership of NYMEX Data as described
above but subject to Article 17, NYMEX hereby grants CME a limited, royalty-free
license to use the NYMEX Data (i) as described in Section 9.3; (ii) in
connection with performing the CME Services; and (iii) in satisfying any
applicable regulatory or other legal requirements during the Term, and any
period following the Term during which CME is providing Transition Services.

 

11. FEES FOR SERVICES

 

 

11.1.

Generally. No later than the 23rd day of each calendar month, NYMEX shall pay to
CME the aggregate fees owed to CME under Exhibit B with respect to matched
transactions for the prior calendar month (“Fees”). The payment of Fees shall be
made by electronic wire transfer pursuant to instructions that CME shall provide
to NYMEX from time to time. Prior to or simultaneously with the delivery of such
payment, NYMEX shall provide CME a written statement detailing the calculation
of Fees, in

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

such electronic or paper copy form as NYMEX may reasonably select. NYMEX shall
also calculate and pay CME any amount that is owed under an annual minimum
payment, as described in Exhibit B, no later than the 23rd day of the calendar
month following the applicable annual period.

 

  11.2. Interest for Late Payments. Without regard to whether CME exercises its
rights under Section 11.3, any amounts due and payable by NYMEX to CME pursuant
to Section 11.1 that remain unpaid more than seven (7) days after the date upon
which such payment was due shall accrue simple interest at a 9% per annum rate
for the period from, but excluding, the date upon which such payment originally
was due until, and including, the date upon which payment is delivered. Any such
interest amounts shall be pro rated on a daily basis.

 

  11.3. Delay in Payment. If CME does not receive any Fees owed to it in
accordance with Section 11.1, CME shall provide written notice to NYMEX of such
failure, and if NYMEX fails to pay such Fees within thirty (30) days of NYMEX’s
receipt of such notice, CME may declare NYMEX in material default of this
Agreement, without application of any cure period under Section 13.1, and may
thereafter exercise its rights set forth in Article 13 below.

 

  11.4. Electronic Fund Transfer. With respect to any payments to be made by
electronic fund transfer, if the final Business Day upon which payment may be
made is a bank holiday for either the transferring or receiving bank, the period
during which payment may be made shall be extended to the next day upon which
such transfer may be effectuated.

 

  11.5. Fees Following Termination. If this Agreement is not renewed or is
terminated for any reason, NYMEX agrees to pay Fees for services through and
including the last day on which any NYMEX Globex Contract is traded, without
regard to or limitation of any other payments or penalties that may be owed
under other provisions of this Agreement.

 

12. TELECOMMUNICATIONS CONNECTION BETWEEN CME AND NYMEX

 

  12.1. Globex Routers; Telecommunication Services. CME shall maintain an
appropriate Globex router or routers and/or switch gear at NYMEX’s main facility
and at NYMEX’s disaster recovery site, as applicable, for the purposes of
(i) connecting to NYMEX for clearing purposes, (ii) connecting to the NYMEX
training facility, (iii) delivering data to NYMEX for clearing purposes,
(iv) exchanging data between the parties for cross-margining purposes, and
(v) connecting Globex access from the NYMEX floor, if NYMEX so desires. CME
additionally shall maintain appropriate telecommunications circuits between
NYMEX and CME as necessary to handle message flow and data delivery as set forth
above. NYMEX shall provide computer room floor space and inside wiring for such
routers and shall provide CME or any telecommunications provider with which it
contracts for such services reasonable access for maintenance and testing
purposes. The parties shall use CME recommended configurations for communication
between primary and backup sites.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  12.2. Outsourcing Permitted. CME may fulfill its obligation to establish and
maintain the routers and telecommunications circuits described in Section 12.1
through appropriate contractual arrangements with telecommunications service
providers and/or other technology service providers.

 

  12.3. Financial Terms. NYMEX shall be responsible for paying, via
reimbursement to CME or direct billing, all third party or other direct costs
(not to include CME employee or CME independent contractor time) associated with
the telecommunications circuits, switches and routers described in Section 12.1,
provided that (i) where CME has a negotiated rate with an applicable
telecommunications provider, CME shall attempt to secure for NYMEX any
preferential rate available under such contract, and (ii) in no event shall the
amounts paid by NYMEX under this Section exceed the published tariff rate of the
applicable telecommunications provider. Unless CME arranges for NYMEX to be
billed directly by the applicable telecommunications provider, CME shall submit
to NYMEX an invoice for reimbursement of fees or other third-party costs
actually paid by CME, and NYMEX shall pay CME such amounts no later than the
thirty (30) days following the month in which CME invoices NYMEX. Any failure by
NYMEX to pay amounts due and payable under this Section shall be subject to the
interest and default provisions set forth in Sections 11.2 and 11.3.

 

  12.4. Waived Installation Fees. The parties understand and agree that certain
installation fees as to the circuits and routers installed pursuant to
Section 12.1 will be waived by the applicable telecommunications providers, and
that such waived fees will become due and payable if the installed circuits and
routers are cancelled in less than one year. NYMEX agrees that it shall
reimburse CME for any such waived installation fees that become due and payable
unless the circuits and routers are cancelled because of termination of this
Agreement by NYMEX pursuant to Section 13.1, Section 13.3 or Section 13.7, in
which case CME shall be solely responsible for such fees.

 

  12.5. Telecommunications Hub. The Project Plans shall include a timeline and
obligations for both CME and NYMEX with respect to establishing
telecommunications hubs (the “CME Hubs”) at NYMEX’s primary and backup data
center facilities. The CME Hubs will use such equipment and conform to such
standards as CME may determine in its sole discretion, provided that the CME
Hubs shall be reasonably comparable to telecommunications hubs that CME has
established in other remote locations. CME shall cover the costs of purchasing,
installing, configuring and maintaining the equipment at the Hub. During the
Term and for a transition period of up to one year thereafter, NYMEX shall
provide at its cost adequate and appropriate data center space for all CME
equipment necessary for the CME Hubs. NYMEX shall also provide for 24-hour
access for CME’s employees or agents for maintenance purposes. CME shall operate
the CME Hubs in a manner that is reasonably comparable to CME operations for its
other telecommunications hubs. For the avoidance of doubt, CME may use the CME
Hubs for purposes unrelated to this Agreement, including, without limitation,
for connecting ISVs, clearing firms, customers and other distribution channel
partners to Globex.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

13. TERMINATION

 

  13.1. Default. Either party may terminate this Agreement by written notice to
the other party in the event that the other party is in material default with
respect to any of the terms of this Agreement. Except as may otherwise be
specified in this Agreement with respect to particular circumstances, the
non-defaulting party shall provide the defaulting party with notice of a
material breach prior to exercising its termination right hereunder and the
defaulting party shall have thirty (30) days from receipt of such notice to cure
such breach, if it can be cured. If the defaulting party cures such breach
within such 30-day period, then termination shall not occur and the defaulting
party shall not be subject to any further remedy or liability in respect of such
breach, except as may otherwise be specified in this Agreement. Notwithstanding
the foregoing, a party shall not be found in material default by reason of a
failure to perform its obligations hereunder where such failure was proximately
caused by an act, or failure to act, of the other party in violation of this
Agreement or any other agreement between the parties that relates to this
Agreement.

 

  13.2. Bankruptcy. Either party may terminate this Agreement immediately upon
the occurrence of any of the following events affecting the other party:

 

  13.2.1. Demonstrated Insolvency. The other party admits its inability to pay
its debts generally as they become due, or makes an assignment of substantially
all of its assets for the benefit of its creditors;

 

  13.2.2. Bankruptcy Proceeding Filed. A proceeding in bankruptcy or for the
reorganization of the other party or for the readjustment of its debts, under
the United States Bankruptcy Code or any other State or Federal law for the
relief of debtors now or hereafter existing, is commenced by or against the
other party and is not dismissed within sixty (60) days of commencement; or

 

  13.2.3. Receivership. A receiver or trustee is appointed in a bankruptcy
proceeding for the other party or for any substantial part of its assets, or any
proceedings are instituted for the dissolution or the full or partial
liquidation of such party, and such receiver or trustee is not discharged within
sixty (60) days of his or her appointment or such proceedings are not discharged
within sixty (60) days of their commencement, as the case may be.

 

  13.3. Legal Impairment. Either party may terminate this Agreement, upon
written notice to the other party, in the event that any statute, rule,
regulation, court order, or other judicial, administrative agency or legislative
decree materially impairs either its or the other party’s ability to perform its
obligations hereunder.

 

  13.4. Failure to Launch. If Launch Date 2 or Launch Date 3 does not occur
[***Redacted***] or less from the target date for such launch, as described in
Section 4.3, the party not at fault may terminate this Agreement in accordance
with such section.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  13.5. Mid-Term Termination. During the one-year period between the fifth and
sixth anniversaries of Launch Date 1, either NYMEX or CME may terminate this
Agreement by providing written notice to the other party during such period. If
NYMEX provides notice, NYMEX must delist the NYMEX Globex Contracts within 6
months after delivery of the notice. If CME provides notice, NYMEX must delist
the NYMEX Globex Contracts within 12 months after delivery of the notice. In
either case, the terminating party must pay the non-terminating party a
termination fee equal to [***Redacted***] payable by NYMEX to CME under Exhibit
B for the period of [***Redacted***] full calendar months immediately preceding
the month in which the notice is delivered, with [***Redacted***]% of the fee
payable within [***Redacted***] Business Days following delivery of the notice
and [***Redacted***]% payable within 10 Business Days following the date on
which the NYMEX Globex Contracts have been delisted.

 

  13.6. Force Majeure Event. In the event of a Force Majeure Event that endures
for thirty (30) days or longer, this Agreement may be terminated upon written
notice to the other party by (i) the nonaffected party or (ii) where both
parties are similarly impaired in their performance of their obligations
hereunder, either party.

 

  13.7. Acquisition of Competitor or Competitive Products on Globex. If CME
provides the notice described in Section 3.4.4, NYMEX may in its discretion
terminate this Agreement by providing written notice to CME in accordance with
Section 3.4.4.

 

  13.8. NYMEX Europe. If NYMEX Europe does not become a party to this Agreement
with appropriate regulatory approvals to list products for trading on Globex by
December 31, 2006, then CME shall have the option to terminate this Agreement
upon 3 months’ advance written notice to NYMEX (providing NYMEX an opportunity
to persuade NYMEX Europe to become a party and/or complete necessary regulatory
approval processes), which option shall continue throughout the Term even if not
initially exercised by CME until such time as NYMEX Europe does become a party
to this Agreement; provided, however, that CME shall not have the right to
terminate in the event that NYMEX Europe is unable to become a party to this
Agreement because it was not able to obtain the required regulatory approvals
after reasonable diligent efforts to do so and consultation with CME.

 

14. EXCHANGE RULES

 

  14.1. Generally. Within 30 days following the Effective Date, CME and NYMEX
shall determine the rule changes required to be made at each exchange to support
the arrangement contemplated by this Agreement. Without limiting the generality
of the foregoing, each of CME and NYMEX shall adopt rule amendments naming the
other party in its limitation of liability rule. To the extent practicable, any
new rules shall conform to rules previously adopted by the parties in connection
with the prior agreement between them for NYMEX e-miNY products. CME and NYMEX
shall adopt the agreed upon rules and shall cooperate as necessary to obtain any
required regulatory certifications or approvals.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  14.2. Amendment of Rules. The parties acknowledge that it may be appropriate
for either party to make changes in the future to rules that relate to or may
impact the arrangement set forth in this Agreement. The parties shall use
reasonable efforts to discuss any such changes prior to implementation. The
parties shall also use reasonable efforts to negotiate in good faith as to
changes to shared rules. Notwithstanding any obligation to negotiate that may
apply, (i) CME may in its discretion change any CME rules that directly relate
to the CME Systems, the operation of Globex and the GCC generally, and all rules
that directly relate to CME Globex Contracts, and (ii) NYMEX may in its
discretion change any NYMEX rules that directly relate to the NYMEX Products,
including the NYMEX Globex Contracts, subject to Section 6.8 with respect to
changes to the CME Services or CME Systems that may be necessary to support such
change. Notwithstanding the foregoing, at all times during the Term, CME and
NYMEX shall maintain a rule for limitation of liability that limits liability to
the other party equally with the party issuing the rule.

 

15. CROSS-MARGINING ARRANGEMENT

In order to provide capital and margin efficiencies for market participants
trading certain NYMEX Products and CME Globex Contracts, the parties shall enter
into the Cross Margining Agreement attached as Exhibit E hereto.

 

16. TRANSITION ASSISTANCE

 

  16.1. CME to Provide Assistance. Following the termination of this Agreement
for any reason after the Launch Date, CME shall reasonably assist NYMEX in
transitioning the services provided by CME as CME Services to another entity in
an orderly manner if requested by NYMEX prior to the effective date of
termination. Specifically, CME shall, if and as requested by NYMEX, provide the
services described in Sections 16.2 and 16.3 (the “Transition Services”).

 

  16.2. Transition Plan. CME and NYMEX shall cooperate to prepare a transition
plan setting forth the respective tasks to be accomplished by each party in
connection with the transition and a schedule pursuant to which such tasks are
to be completed.

 

  16.3. Relevant Information. CME shall provide NYMEX with all data and other
information maintained by CME necessary to transfer responsibility for providing
the CME Services to another entity and all hardcopy records of NYMEX Data
maintained by CME, except that CME may retain copies of such data and other
information for appropriate archival, regulatory and surveillance purposes. Such
data and other information shall be provided to NYMEX on magnetic tape or such
other storage medium, and in such format, reasonably acceptable to NYMEX.

 

  16.4.

Costs. NYMEX shall pay or reimburse CME for any and all costs (“Transition
Costs”) reasonably and actually incurred by CME that are directly attributable
to providing Transition Services in accordance with this Article 16 (with the
rates for any CME employees used to perform such CME Services reasonably
reflecting CME’s

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

fully-loaded costs with respect to such employees, plus a commercially
reasonable profit margin); provided that CME shall act in good faith and use
commercially reasonable efforts to minimize and mitigate any Transition Costs.

 

17. CONFIDENTIALITY

 

  17.1. Proprietary Business Information.

 

  17.1.1. Generally. NYMEX and CME each acknowledges that it will receive during
the term of this Agreement confidential or proprietary information of the other
party relating to such party’s performance of its obligations or exercise of its
rights hereunder, other non-public information regarding the other party or its
business, and confidential information of third parties that the disclosing
party has a duty to maintain as confidential. (All such information, together
with the terms of this Agreement and all material correspondence or other
information or materials exchanged between the parties in connection with the
negotiation of this Agreement and any development work relating to the
arrangement described herein, is collectively referred to in this Agreement as
“Proprietary Business Information.”) Materials embodying such information and
within the scope of this Section 17.1 shall bear reasonable legends to such
effect to the extent appropriate. Each party agrees to take reasonable steps to
maintain the confidentiality of the Proprietary Business Information of the
other party, and each party agrees to use such information only in connection
with the performance of its obligations and the exercise of its rights under
this Agreement and for appropriate regulatory and surveillance purposes. In the
event that this Agreement is terminated for any reason, each party agrees that
it shall use reasonable efforts to return to the other party or destroy all
Proprietary Business Information of the other party in its possession in
tangible form and that it shall not knowingly retain any copies thereof, except
that each party may retain copies of the other party’s Proprietary Business
Information for archival purposes and for its appropriate regulatory and
surveillance purposes.

 

  17.1.2. Exclusions. In no event shall the provisions of this Section 17.1
apply to any information that: (i) was rightfully known to the receiving party
prior to its receipt from the disclosing party, or becomes rightfully known to
the receiving party other than as a result of the relationship between the
parties pursuant to this Agreement; (ii) is or becomes public knowledge through
no fault of the receiving party; (iii) is disclosed to the receiving party by a
third party with the right to disclose the information without restriction or
subject to restrictions to which the receiving party has conformed; or (iv) is
independently developed by the receiving party without use of any confidential
or proprietary information of the disclosing party.

 

  17.2.

Disclosure Required by Law. Notwithstanding anything in this Article 17 to the
contrary, each party may disclose any Proprietary Business Information received
by it to the extent required by subpoena or other order of court, law or other
regulation, or required or requested by any governmental or regulatory authority
having jurisdiction or

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

required pursuant to an information sharing agreement, rule, or policy with
another self-regulatory body, to furnish such Proprietary Business Information
to any third party, or as otherwise permitted in this Agreement; provided that,
in any such case, the party required or requested to disclose the information
shall promptly notify the other party of such requirement or request, and shall
use good faith efforts, in consultation with the other party, to secure
confidential treatment of the relevant Proprietary Business Information or seek
an appropriate protective order, as applicable.

 

  17.3. Disclosures in Violation of Obligations. NYMEX and CME each agree that
any breach of the obligations set forth in this Article 17 would not be
adequately compensated by monetary damages. As such, in the event of actual or
threatened breach of this Article, the party neither breaching nor threatening
to breach shall, without limitation of any other remedies that may be available,
be entitled to injunctive relief, without proving monetary damages or posting a
bond or other security.

 

18. FORCE MAJEURE

Notwithstanding any other provision of this Agreement to the contrary, each
party shall be excused from performance under this Agreement and shall have no
liability to the other party to the extent that, and for any period during
which, it is prevented from performing any of its obligations hereunder by an
act of God, floods, war, civil disturbance, act of terrorism, court order or
other cause beyond its reasonable control (including, without limitation,
failures or fluctuations in the electrical or mechanical equipment,
communication lines, heat, light or telecommunications, in each case to the
extent beyond the relevant party’s reasonable control) (each a “Force Majeure
Event”), provided, however that (i) in such event, the other party also shall be
excused from performing any corresponding obligations hereunder as appropriate
under the circumstances; (ii) the party suffering the Force Majeure Event shall
notify the other party of such Force Majeure Event as soon as practicable and
shall, to the extent practicable, use good faith efforts to mitigate the effects
of the Force Majeure Event; and (iii) this Agreement may be terminated pursuant
to Section 13.6 where such Force Majeure Event endures for thirty (30) days or
longer.

 

19. LIMITATION ON LIABILITY

 

  19.1. CME Limited Liability. In any action brought by NYMEX against CME,
whether in contract, tort or otherwise, CME’s aggregate liability to NYMEX shall
be limited as follows: (i) with respect to claims related to NYMEX’s termination
of this Agreement under Section 13.1, to a maximum of $ [***Redacted***], and
(ii) with respect to all other claims, to a maximum of [***Redacted***] % of the
Prior Year’s Fees per claim or set of related claims, not to exceed
[***Redacted***] % of the Prior Year’s Fees during any rolling 12-month period,
provided however, that the following claims shall not be subject to the
foregoing limitations:

 

  19.1.1. CME’s indemnification obligations pursuant to Section 20.1;

 

  19.1.2. Liability for gross negligence, willful misconduct and fraud;

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  19.1.3. Willful breach of Section 3.3 (after receiving notice of such willful
breach and failing to cure); or

 

  19.1.4. Breach of the confidentiality provision set forth in Article 17,.

 

  19.2. NYMEX Limited Liability. In any action brought by CME against NYMEX,
whether in contract, tort or otherwise, NYMEX’s aggregate liability to CME under
this Agreement shall be limited as follows: (i) with respect to claims related
to CME’s termination of this Agreement under Section 13.1, to a maximum of
[***Redacted***] % of the Prior Year’s Fees, and (ii) with respect to all other
claims, to a maximum of [***Redacted***]% of the Prior Year’s Fees per claim or
set of related claims, not to exceed [***Redacted***]% of the Prior Year’s Fees
during any rolling 12-month period, provided however, that the following claims
shall not be subject to the foregoing limitations:

 

  19.2.1. NYMEX’s indemnification obligations pursuant to Section 20.2;

 

  19.2.2. Liability for gross negligence, willful misconduct and fraud;

 

  19.2.3. Willful breach of Section 3.3 (after receiving notice of such willful
breach and failing to cure);

 

  19.2.4. Breach of the confidentiality provision set forth in Article 17; or

 

  19.2.5. Any liability of NYMEX to CME arising out of failure by NYMEX to pay
fees or to reimburse amounts to CME as required by this Agreement.

 

20. INDEMNIFICATION

 

  20.1. By CME. CME shall indemnify, defend and hold harmless NYMEX and its
directors, officers, employees and agents from and against Losses arising from
third party claims as a result of (i) gross negligence or the willful misconduct
on the part of CME, its directors, officers, employees or agents and (ii) any
claim that the CME Systems or any other system operated by CME in connection
with the performance of its obligations under this Agreement, any portion of
either of the foregoing, or any of the CME Marks, infringe(s) or otherwise
violate(s) the patent, trademark, service mark, copyright or other intellectual
property of any third Person, (iii) any claim that is based upon CME’s failure
to properly match trades in NYMEX Globex Contracts pursuant to this Agreement
(or any improper matching of trades by CME in violation of this Agreement), or
(iv) any claim based upon CME’s breach of this Agreement.

 

  20.2.

By NYMEX. NYMEX shall indemnify, defend and hold harmless CME and its directors,
officers, employees and agents from and against Losses arising from arising from
third party claims as a result of (i) gross negligence or the willful misconduct
on the part of NYMEX, its directors, officers, employees or agents and (ii) any
claim that any system operated by NYMEX in connection with the performance of
its obligations under this Agreement, or any portion of such a system, or any of
the NYMEX Marks,

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

infringe(s) or otherwise violate(s) the patent, trademark, service mark,
copyright or other intellectual property of any third Person, (iii) any claim
arising out of any transaction in NYMEX Globex Contracts that was properly
matched by CME pursuant to the terms of this Agreement but that NYMEX declined
to clear pursuant to its rules or otherwise failed to clear or accept for
clearing pursuant to Section 7.3, provided, however, that NYMEX shall not be
obligated to so indemnify CME to the extent of any increase in the amount of
such Losses that resulted from CME’s failure to timely deliver the relevant
matched trade information to NYMEX due to reasons within CME’s reasonable
control, or (iv) any claim based upon NYMEX’s breach of this Agreement.

 

  20.3. Notification. If any third party notifies either party (the “Indemnified
Party”) with respect to any matter which may give rise to a claim for
indemnification against the other party (the “Indemnifying Party”), then the
Indemnified Party shall promptly notify the Indemnifying Party thereof;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder, except to the extent (if any) that the
Indemnifying Party is damaged by such delay.

 

  20.4. Defense of Claim. If the Indemnifying Party notifies the Indemnified
Party that it is assuming the defense of any claim:

 

  (a) The Indemnifying Party shall defend the Indemnified Party against such
claim with counsel of its choice reasonably satisfactory to the Indemnified
Party;

 

  (b) the Indemnified Party may retain separate co-counsel at its sole cost and
expense (except that the Indemnifying Party shall be responsible for the fees
and expenses of the separate co-counsel to the extent that the Indemnified Party
concludes reasonably that the counsel the Indemnifying Party has selected has a
conflict of interest);

 

  (c) the Indemnified Party shall not, without foregoing the benefits of this
Section (a), consent to the entry of any judgment or enter into any settlement
with respect to such claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed; and

 

  (d) the Indemnifying Party shall not consent to the entry of any judgment with
respect to the matter or enter into any settlement which does not include a
provision whereby the plaintiff or claimant releases the Indemnified Party from
any and all responsibility and liability with respect to such claim, without the
prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed.

 

21. CONSEQUENTIAL AND PUNITIVE DAMAGES

Excluding each party’s respective indemnification obligations pursuant to
Section 20.1 and Section 20.2 and respective liability for gross negligence,
willful misconduct, fraud, or breach of

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

the confidentiality provision set forth in Article 17, in no event shall either
party be liable for, nor shall the measure of damages include, any indirect,
consequential, punitive or special damages or amounts for loss of income or
profits, even if such damages were foreseeable. Notwithstanding the foregoing,
with respect to any willful breach by NYMEX of Section 3.3.1 or willful breach
by CME of Section 3.4 (in either case, after receiving notice of such willful
breach and failing to cure), the non-breaching party shall be entitled to seek
damages for actual lost profits as a result of such breach.

 

22. REPRESENTATIONS AND WARRANTIES

 

  22.1. By CME.

 

  22.1.1. CME is a for-profit corporation duly formed, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and all necessary registrations and authorizations to carry on its
business as now being conducted. CME has the full right, power and authority to
enter into this Agreement and perform its obligations hereunder.

 

  22.1.2. The execution and delivery of this Agreement by CME and performance of
its obligations hereunder have been duly authorized, and this Agreement has been
duly executed and delivered by CME. This Agreement constitutes the valid and
binding obligation of CME, enforceable in accordance with its terms, subject
only to applicable bankruptcy, insolvency or similar laws affecting the rights
of creditors generally.

 

  22.1.3. There is no charter, by-law or capital stock provision of CME or any
of its parents, subsidiaries or other related entities, nor is there any
agreement, statute, rule or regulation or any judgment, decree or order of any
court or agency, binding on CME, that would be contravened by the execution and
delivery or performance by CME of this Agreement.

 

  22.1.4. CME has all necessary rights, as owner or licensee, to any
intellectual property or other property and technology, including the CME
Systems, that CME will use in connection with performing the CME Services and
its other obligations hereunder.

 

  22.1.5. CME is not subject to any contractual provision, and is not aware of
any law, regulation or order, that would be violated by the performance of its
obligations hereunder with respect to the NYMEX Globex Contracts expected to be
listed for trading under this Agreement.

 

  22.1.6. CME shall comply in all material respects with all laws, rules and
regulations applicable to its provision of the CME Services and the performance
of its obligations under this Agreement.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  22.2. By NYMEX.

 

  22.2.1. NYMEX is a for-profit corporation duly formed, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and all necessary registrations and authorizations to carry on its
business as now being conducted. NYMEX has the full right, power and authority
to enter into this Agreement.

 

  22.2.2. The execution and delivery of this Agreement by NYMEX and performance
of its obligations hereunder have been duly authorized, and this Agreement has
been duly executed and delivered by NYMEX. This Agreement constitutes the valid
and binding obligation of NYMEX, enforceable in accordance with its terms,
subject only to applicable bankruptcy, insolvency or similar laws affecting the
rights of creditors generally.

 

  22.2.3. There is no charter, by-law or capital stock provision of NYMEX, or
any of its parents, subsidiaries or other related entities, nor is there any
agreement, statute, rule or regulation or any judgment, decree or order of any
court or agency, binding on NYMEX, that would be contravened by the execution
and delivery or performance by NYMEX of this Agreement.

 

  22.2.4. NYMEX has all necessary rights, as owner or licensee, to any
intellectual property or other property and technology that NYMEX will use in
connection with performing its obligations hereunder.

 

  22.2.5. CME shall comply in all material respects with all laws, rules and
regulations applicable to its provision of the CME Services and the performance
of its obligations under this Agreement.

 

  22.3. Intellectual Property Claims. Notwithstanding the representations set
forth in Sections 22.1.4 and 22.2.4, and without limiting the indemnification
obligations set forth in Article 20, if either party shall be subject to any
claim of unlawful use or infringement in connection with intellectual property
used by such party in performing its obligations hereunder, such party may, at
its own expense, (i) secure appropriate rights to continue to use such
intellectual property, or (ii) modify or replace such intellectual property with
compatible, functionally equivalent intellectual property, such that its
performance of its obligations hereunder are not materially impaired. If such
party fails to secure such rights or modify or replace such intellectual
property and its performance of its obligations hereunder is materially
impaired, the other party may terminate this Agreement for material default
pursuant to Section 13.1 (subject to the cure period set forth therein, unless
the reason for termination falls within a section of this Agreement that
specifies that no cure period shall apply).

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

23. MISCELLANEOUS

 

  23.1. Benefits of Agreement. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors. Except to
the extent provided in Article 20 above with respect to the directors, officers,
employees and agents of NYMEX and CME, respectively, nothing in this Agreement,
express or implied, shall give to any other Person any benefit or any legal or
equitable right or remedy. Without limiting the generality of the foregoing, the
parties expressly agree that this Agreement shall not confer any rights upon the
members or clearing members of either exchange or any other market participant
as third-party beneficiaries of this Agreement.

 

  23.2. Waiver. Except as expressly provided herein, neither party shall, by
mere lapse of time, without giving notice or taking any other action, be deemed
to have waived any breach by the other party of any of the provisions of this
Agreement.

 

  23.3. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Illinois (other than the laws thereof
that would require reference to the laws of any other jurisdiction).

 

  23.4. Dispute Resolution. A party shall not commence a litigation proceeding
against the other party unless that party first gives written notice to the
other party setting forth the nature of the dispute (“Dispute Notice”). The
parties shall attempt in good faith to resolve the dispute by mediation with a
mediator selected by mutual agreement of the parties. If the parties cannot
agree on the selection of a mediator within thirty (30) days after delivery of
the Dispute Notice, or if the dispute has not been resolved by mediation as
provided by this Section 23.4 within sixty (60) days after the delivery of the
Dispute Notice, then either party may commence litigation. The Illinois state
courts located in Cook County, Illinois and the United States District Court for
the Northern District of Illinois shall have the exclusive jurisdiction over any
and all litigated claims arising out of or relating to this Agreement or the
subject matter hereof that are initiated by NYMEX. The New York state courts
located in New York, New York, and the United States District Court for the
Southern District of New York shall have the exclusive jurisdiction over any and
all litigated claims arising out of or relating to this Agreement or the subject
matter hereof that are initiated by CME. Each of the parties hereby irrevocably
(i) submits to the personal jurisdiction of such courts over such party in
connection with any litigation, proceeding or other legal action arising out of
or in connection with this Agreement or the subject matter hereof, (ii) waives
to the fullest extent permitted by law any objection to the venue of any such
litigation, proceeding or action which is brought in any such court, and
(iii) agrees to the mailing of service of process to the address specified below
for such party as an alternative method of service of process in any legal
proceeding brought in any such court.

 

  23.5.

Notices. Except as expressly set forth in this Agreement as to particular
notices, all communications or notices required or permitted to be given under
this Agreement shall be sufficiently given for all purposes hereunder if given
in writing and (i) delivered personally, (ii) deposited in the United States
mail, postage prepaid and return receipt

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

requested, (iii) delivered by a recognized document overnight delivery service
or (iv) sent by telecopy, facsimile or other electronic transmission service
(provided a confirmation of delivery is received). All notices delivered in
accordance with this Section shall be sent to the appropriate address or
facsimile number set forth below, or to such other address or facsimile number
or to the attention of such other person as the recipient party may have
specified by prior written notice to the sending party.

 

CME Contact

  

NYMEX Contact

Mr. Craig Donohue

   Mr. James E. Newsome

Chief Executive Officer

   President

Chicago Mercantile Exchange Inc.

   New York Mercantile Exchange, Inc.

20 South Wacker Drive

   One North End Avenue

Chicago, Illinois 60606

   New York, New York 10282

Facsimile No.: 312-930-3209

   Facsimile No.: (212) 299-2299

With copies to:

   With copies to:

Ms. Kathleen Cronin

   Mr. Christopher K. Bowen

Managing Director, General Counsel

   General Counsel and Chief Administrative Officer

Chicago Mercantile Exchange Inc.

   New York Mercantile Exchange, Inc.

20 South Wacker Drive

   One North End Avenue

Chicago, Illinois 60606

   New York, New York 10282

Facsimile No.: 312-930-3323

   Facsimile No.: (212) 299-2299

Mr. James R. Krause

   Chief Information Officer

Managing Director & Chief Information Officer

   New York Mercantile Exchange, Inc.

Chicago Mercantile Exchange Inc.

   One North End Avenue

20 South Wacker Drive

   New York, New York 10282

Chicago, Illinois 60606

   Facsimile No.: (212) 301-4555

Facsimile No.: 312-634-8652

  

 

  23.6. Severability. If any provision of this Agreement is deemed to be illegal
or unenforceable by any court of competent jurisdiction, (i) such provision
shall be deemed to be severable from the remainder of this Agreement, (ii) the
effect of such determination shall be limited to such provision to the extent
reasonably practicable, and (iii) the validity, legality and enforceability of
such provision in any other jurisdiction shall not in any way be affected or
impaired thereby.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  23.7. Amendments. No provision of this Agreement may be amended, modified,
supplemented or waived, except by an agreement in writing executed and delivered
by authorized representatives of both parties.

 

  23.8. Entire Agreement. This Agreement, including the Exhibits hereto,
constitutes the entire agreement and understanding, and supersedes any and all
prior agreements and understandings, whether written or oral, between the
parties with respect to the subject matter hereof.

 

  23.9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be an original, but all of
which together shall constitute but one and the same instrument.

 

  23.10. Assignment and Successors. This Agreement may not be assigned in whole
or in part by either party hereto without the prior written consent of the other
party hereto; provided, however, that NYMEX may assign this Agreement and its
rights and obligations hereunder, in their entirety, to an entity to which NYMEX
sells all or substantially all of its assets without the prior written consent
of CME, and CME may assign this Agreement and its rights and obligations
hereunder, in their entirety, to an entity to which CME sells all or
substantially all of its assets without the prior written consent of NYMEX. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, by merger,
purchase, consolidation or otherwise, and their respective Affiliates.

 

  23.11. Survival. Following any expiration or termination of this Agreement in
accordance with its terms and the expiration of the post-termination obligations
of CME pursuant to Article 16 hereof, all obligations hereunder of each party to
the other shall terminate. Notwithstanding the foregoing, however, the
provisions of Sections 6.6.3, 6.12, 8.4, 8.6, 8.7, 9.1.2, 9.3.1, 12.4 and 12.5,
Articles 10, 16, 17, 19, 20, 21 and 23, and all other relevant definitions,
cross-references and the like necessary to effectuate the intent of this Article
shall survive and remain in effect following any expiration or termination of
this Agreement.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first above written.

 

CHICAGO MERCANTILE EXCHANGE INC.          NEW YORK MERCANTILE EXCHANGE, INC. By:
 

/s/ Craig S. Donohue

       By:  

/s/ James E. Newsome

Name:   Craig S. Donohue        Name:   James E. Newsome Title:   Chief
Executive Officer        Title:   President

EXHIBIT A

I. CME SERVICES:

1. Match Engine

The NYMEX Globex Contracts will be listed on a software instance of the Globex
match engine that CME uses for [***Redacted***] as of the Effective Date. CME
will add contract months on a listing schedule specified by NYMEX.

Globex will receive bids and offers and other related messages (such as
cancellations and/or mass quotes from designated market makers) from Eligible
Participants and will register or modify active orders in the Globex order book
for matching. Globex will delete an active order or mass quote registered in the
Globex order book upon receipt of a cancellation message by the Globex match
engine. Globex will acknowledge the receipt of orders/mass quotes and related
messages for NYMEX Globex Contracts. Active orders registered in the Globex
order book will be matched [***Redacted***] as selected by NYMEX. Globex will
notify an Eligible Participant upon the partial or complete execution of an
active order.

The market will be operated in accordance with a schedule to be established by
NYMEX, subject to any scheduling constraints that apply generally as to all
markets operated on Globex, except as otherwise specified in the Agreement
(e.g., with respect to holidays under Section 7.1.3).

2. Market Data Feed

CME will deliver in real-time Globex Market Data over the Globex network and to
the NYMEX for their electronic trading network.

“Globex Market Data” as used in this section will include, with respect to each
contract month listed for each NYMEX Globex Contract, dynamic updates as to the
last price and size of any executed transaction, best five bids and size of
bids, best five offers and size of offers (including implied quantities as
described and limited in the design specifications), and (for the given trading
period) highest price executed, lowest price executed, and volume.

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

[***Redacted***]

“Quote Vendor Market Data” as used in this section will include, with respect to
each contract month listed for each NYMEX Globex Contract, dynamic updates as to
the best bid and size, the best offer and size, the last price and size of any
executed transaction, and (for the given trading period) the opening price, and
market condition messages, such as market open messages. For implied trading,
the size includes both the actual and the implied totaled together.

3. Front-ends

CME will provide [***Redacted***] and any interfaces that succeed them
(collectively, the “APIs”) to allow for order management and for the delivery of
Globex Market Data (data in NYMEX futures options will only be available via
[***Redacted***]). The APIs will support the functionality set forth above with
respect to the matching engine and delivery of market data. Additionally, the
APIs will support the transmission of trader ids (as were in place for the NYMEX
e-miNY products under the prior agreement between the parties) for use by NYMEX.
CME and NYMEX will notify users that intend to access the NYMEX Globex Contracts
of the trader id submission requirements for particular APIs.

CME will provide support for approved individuals, firms and ISVs with respect
to the connection to and usage of the respective APIs. CME will maintain
contractual and technology processes for the certification of individuals, firms
and ISVs as approved API users. CME will notify NYMEX of material changes in
these processes.

CME will provide at its discretion a Globex Trader front-end to Eligible
Participants for entering orders into Globex and the display of Globex Market
Data. In addition to displaying Globex Market Data, the Globex Trader software
maintains and displays a log of order entries, cancels and executions. CME will
be responsible for providing software installation support for Globex Trader
users, including those connecting through the NYMEX electronic trading network.
CME will offer VPN connectivity through the use of the CME front end. Nothing in
this Agreement, however, shall require CME to maintain or continue to offer
Globex Trader or any other proprietary front-end.

CME will provide network connectivity for Globex to approved sites using the
APIs or for Globex Trader software to the NYMEX electronic trading network to
trade NYMEX Globex Contracts and CME Globex Contracts on Globex. Customers are
responsible for the local connection per the normal CME rate schedule. Upon
CME’s reasonable request and NYMEX’s written consent, NYMEX shall allow CME to
install, at NYMEX’s offices in New York, Market Data dissemination servers
(either SLC or MDP) to support market participants trading on the NYMEX
electronic trading network and to control bandwidth usage costs. NYMEX will also
permit the installation of communications gears and switches to provide this
connectivity.

 

A-2

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

4. Clearing Data Feed

CME will deliver trade data necessary for clearing and billing purposes to
NYMEX, in real-time or as requested by NYMEX, over

one or more dedicated telecommunications circuits described in Article 12 as
follows:

(1) CME will deliver in real time to NYMEX [***Redacted***] for each executed
transaction in the NYMEX Globex Contracts. The [***Redacted***] format is
attached as Schedule 1 hereto.

(2) CME will deliver to NYMEX on a daily basis a database file in a mutually
agreed upon format that specifies [***Redacted***] for use by NYMEX in
connection with clearing and calculating transaction fees for executed
transactions in NYMEX Globex Contracts (the “Translation Table”). CME will
provide a copy of the Translation Table format promptly following the Effective
Date.

5. Regulatory Data Feed

CME will create an “Audit Trail File” that will be compiled from trade data of
NYMEX Globex Contracts into an electronic file. The Audit Trail File will be
delivered to NYMEX on a weekly basis. The Audit Trail File will include data
required by NYMEX to perform its regulatory obligations, including, but not
limited to, records of order messages (whether or not executed) and
acknowledgments of executed transactions for the relevant period. CME will
provide a copy of the Audit Trail File format promptly following the Effective
Date.

6. Globex Control Center

CME maintains a Globex Control Center which monitors the operation of Globex
market and system and network performance, administers market operation
procedures and provides market participant support. CME will make available to
NYMEX members and other personnel that are registered as “contacts” with the GCC
the services of the GCC for assistance with orders, trades and Globex systems
problems [***Redacted***]. Specifically, GCC will (i) respond to inquiries
concerning the status of orders or executed transactions, (ii) cancel an
existing, unexecuted order if the user is unable to do so, (iii) respond to
inquiries and requests concerning error trades in accordance with CME’s Error
Trade Policy and, with respect to the NYMEX Globex Contracts, NYMEX’s error
trade policy, and (iv) respond to other inquiries concerning Globex system
problems. Additionally, GCC personnel will work with NYMEX technical or
operations staff to support the orderly trading of the NYMEX Globex Contracts
and CME Globex Contracts from the workstations connected to the NYMEX electronic
trading network, if NYMEX elects to connect its network to Globex.

All services of the GCC will be performed in accordance with and subject to the
policies and procedures established by CME for GCC operations, which are subject
to change from time to time in CME’s sole discretion, provided that (i) no such
change shall limit CME’s obligations as specified elsewhere in this Agreement
and (ii) no such change shall discriminate against NYMEX members or the NYMEX
Globex Contracts.

 

A-3

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

II. PERFORMANCE PARAMETERS

For the purpose of assessing the performance of CME Systems, the minimum
“Performance Standards” to be achieved by CME Systems, with respect to the
“Performance Measures,” each calendar week following the Launch Date are:

 

Performance Measure

 

Minimum Performance Standard

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

 

Performance Measure

 

Definition

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

[***Redacted***]

  [***Redacted***]

 

A-4

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

The Performance Measures calculated on a daily basis. Availability measures will
be calculated on a monthly basis.

On a [***Redacted***] basis or as otherwise agreed to between the parties, CME
will provide to NYMEX a confidential written report of the Performance Measures
calculated by CME. Such report will be in a format agreed upon by the parties.

 

A-5

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

EXHIBIT B

FEES

 

I. Basic Fees. NYMEX will pay CME service fees based upon the following schedule
with respect to NYMEX Globex Contracts traded on Globex. As used below,
“contract” means in round turns (i.e., both a buy-side and a sell-side).

[***Redacted***]

In determining the Fees to be paid by NYMEX to CME under Section 11.1, ADV will
be totaled for each calendar month with respect for all transactions matched on
Globex in all NYMEX Globex Contracts during such calendar month (or partial
calendar month, with respect to months in which there is not at least one NYMEX
Globex Contract listed on each trading day). The aggregate amount of Fees to be
paid to CME will be determined by multiplying the per contract fees specified in
either the basic schedule or the enhanced schedule, as applicable, against the
total number of contracts traded in NYMEX Globex Contracts, with any lower
per-contract fee applying only to the volume above the threshold for such lower
fee.

For example, if 5,880,000 contracts are traded in NYMEX Globex Contracts in the
aggregate over the 21 trading days in June 2007, then Fees for June 2007 would
be payable to CME as follows:

ADV = 280,000 contracts [5,880,000 contracts / 21 days]

Fees = $[***Redacted***]

 

II. Enhanced Fees. If NYMEX does not list Qualifying NYMEX Contracts on light
sweet crude oil, natural gas, gasoline and heating oil by the end of the
[***Redacted***] month following [***Redacted***], the basic fee schedule will
be replaced with the enhanced fee schedule below:

[***Redacted***]

If the enhanced fee schedule is imposed, it will begin as of the
[***Redacted***] day of the calendar month immediately following the
[***Redacted***] anniversary of [***Redacted***]and continue to apply until the
last day of the calendar month in which the Qualifying NYMEX Contracts specified
above have been listed; thereafter the basic fee schedule will resume.

 

III.

Annual Minimum Fee. If Fees during any [***Redacted***]-year period following
the launch date are less than the annual minimum fee specified below, NYMEX will
pay CME the difference between the actual Fees paid for such period and the
specified minimum. Each

 

B-2

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

1-year period will be 12 full calendar months, running consecutively from the
[***Redacted***] day of the calendar month following [***Redacted***] until the
last calendar month in the Term (without reducing or pro-rating the annual
minimum payment to account for any trading days of such final calendar month in
which there are no NYMEX Globex Contracts listed). The annual minimum fees are:

 

Year 1

   $[***Redacted***]

Year 2

   $[***Redacted***]

Year 3

   $[***Redacted***]

Year 4

   $[***Redacted***]

Year 5

   $[***Redacted***]

Year 6

   $[***Redacted***]

Year 7

   $[***Redacted***]

Year 8

   $[***Redacted***]

Year 9

   $[***Redacted***]

Year 10

   $[***Redacted***]

If the Term extends beyond the initial term, the annual minimum payment for each
1-year period during the remainder of the Term shall be determined by increasing
the Year 10 annual minimum by [***Redacted***]% per year.

 

IV. Fee Adjustments. Fees will be adjusted under the following circumstances:

 

  1. Inflation Adjustments. In any 1-year period during the Term in which the
year-over-year increase in the [***Redacted***]equals or exceeds
[***Redacted***]%, the Fee schedules above will be increased by the percentage
amount of the year-over-year increase. Inflation adjustments, if any, will apply
only to the per-contract Fees and not to the annual minimum payments. For
purposes of this calculation: (i) the 1-year periods will be 12 full calendar
months, beginning with the first calendar month following [***Redacted***],
(ii) the year-over-year [***Redacted***] increase will be rounded to the nearest
[***Redacted***]of a percent, (iii) any increase to Fees will be rounded to the
nearest [***Redacted***] of a cent, (iv) any increased Fee schedule will begin
to apply with respect to transactions in NYMEX Globex Contracts executed in the
first calendar month following the end of the applicable 1-year period.

For example, if Launch Date 1 is June 2006 and year-over-year [***Redacted***]
increases are less than [***Redacted***]% between July 2006 and June 2007, and
July 2007 and June 2008, there will be no increases to Fees. However, if in July
2009, the [***Redacted***] issued for June 2009 is [***Redacted***] and the
[***Redacted***] for July 2008 was [***Redacted***], there would be an increase
because the year-over-year increase is [***Redacted***]% [***Redacted***].
Accordingly, each per-contract fee within the fee schedules above will increased
by [***Redacted***]%, rounded to the nearest [***Redacted***] of a cent. The
resulting new fee schedules will begin to apply with respect to transactions
executed in July 2009

 

B-3

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

and will continue to apply until the calculated increase in CPI-U again exceeds
[***Redacted***]% (if ever), subject only to periodic reductions as described
below.

[***Redacted***]

[***Redacted***]

 

B-4

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

EXHIBIT C

[***Redacted***]

 

C-2

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

EXHIBIT D

AMENDED AND RESTATED INFORMATION SHARING AGREEMENT BETWEEN

THE NEW YORK MERCANTILE EXCHANGE, INC. AND

CHICAGO MERCANTILE EXCHANGE INC.

The New York Mercantile Exchange, Inc. (“NYMEX”), a Delaware corporation having
an office at One North End Avenue, World Financial Center, New York, New York
10282 U.S.A. and Chicago Mercantile Exchange Inc., (“CME”), a business
corporation organized under the laws of the State of Delaware and having its
principal office situated at 20 South Wacker Drive, Chicago, Illinois 60606
U.S.A. (each an “Exchange” and collectively “the Exchanges”), in anticipation of
certain NYMEX products being listed for trading on Globex®, and the
corresponding need to administer and enforce the rules of their respective
Exchanges, desire to amend and restate their existing Information Sharing
Agreement, dated as of June 6, 2002, and have reached the following
understanding:

NOW, THEREFORE, in consideration of the premises and mutual covenants stated
herein, it is hereby agreed as follows:

(1) The following are definitions of certain terms as they appear in this
Amended and Restated Information Sharing Agreement:

 

  (A) “Designated Regulator” shall be defined as the Exchange with primary
regulatory oversight responsibility for a product listed and traded on Globex.;

 

  (B) “Member or Member Firm” shall be defined as a Person with trading rights
at the Designated Regulator’s Exchange who is under the disciplinary
jurisdiction of the Designated Regulator;

 

  (C) “Customer” of an Exchange shall be defined as a Person with the ability to
trade products listed by an Exchange on Globex who is not a Member or Member
Firm of the Exchange on which the product is listed;

 

  (D) “Person” for the purposes of this Agreement, shall include, but not be
limited to, a natural person, unincorporated association, corporation,
partnership or body corporate, government or political subdivision, agency or
instrumentality of a government.

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

I. Scope

 

1.   (1)   The Exchanges will provide the fullest mutual assistance to each
other, within the framework of this Information Sharing Agreement and the
respective laws and their respective rules to which they are subject. Such
assistance will be provided to facilitate the administration and enforcement of
the laws of the United States of America and the rules of each Exchange.   (2)  
When requested, the Exchanges agree to promptly share information concerning
their respective Members, Member Firms or Persons within their jurisdiction.
Assistance available under this Information Sharing Agreement may include:

 

  (a) providing access to information regarding trading on the Globex markets it
regulates, including trading by Customers, contained in the files of the
Exchange from which the information is requested (“requested Exchange”);

 

  (b) taking the testimony and statements of persons pertaining to trading on
Globex;

 

  (c) obtaining information and documents from persons regarding trading on
Globex; and

 

  (d) conducting compliance inspections or examinations of futures businesses,
futures processing businesses and futures markets related to trading on Globex.

 

  (3)   The Exchanges have entered into this Information Sharing Agreement for
the purpose of establishing procedures for the provision of mutual assistance as
provided herein. Nothing in this Agreement is intended to limit the right of an
Exchange otherwise to obtain information in accordance with applicable law.

 

II. Requests for Assistance

 

  1.   Requests for assistance will be made in writing and addressed to the
Exchange’s contact officer listed in Appendix A.

 

  2.   A request for assistance as it pertains to trading on Globex and the
corresponding need to administer and enforce the rules of their respective
Exchanges as Designated Regulator will specify the following:

 

  (a) a general description of both the subject matter of the request and the
purpose for which the information and/or testimony is sought;

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

  (b) a general description of the assistance, information, documents or
testimony of persons sought;

 

  (c) information in the possession of the requesting Exchange that might assist
the requested Exchange in identifying the persons or entities believed by the
requesting Exchange to possess the information sought, or the places where such
information may be obtained;

 

  (d) the legal provisions pertaining to the matter that is the subject of the
request;

 

  (e) the desired time period for the reply; and

 

  (f) information in the possession of the requesting Exchange that supports an
inference that the subject matter of the request concerns a breach of the law
administered by the requesting Exchange or the rules of such Exchange.

 

  3. In urgent circumstances, a request for assistance and a reply to such a
request may be effected by summary procedures or by means of communication other
than the exchange of letters, provided that they are confirmed in the manner
prescribed in this Section.

 

III. Execution of Requests Subject to the Limitations in Section I Clause 1
Above

 

  1. Access to information held in the files of the requested Exchange will be
provided upon the request of the requesting Exchange.

 

  2. The requested Exchange will, in response to a request, interview the
persons involved, directly or indirectly, in the activities underlying the
request, or holding information that may assist in carrying out the request. In
the event an interview is sought, the requesting Exchange, in its discretion,
may:

 

  (a) request that specific person(s) be interviewed;

 

  (b) request that a representative of the requesting Exchange be permitted to
be present during such interview(s);

 

  (c) supply a list of questions to be asked.

 

  (d) specify specific books and records to be inspected in connection with the
interview; and

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  (e) provide a description of the specific issues relevant to the requested
interview.

The requested Exchange also may require the production of other evidence from
any other person or persons designated by the requesting Exchange.

 

  3. The interview of persons will be taken in accordance with the rules of the
requested Exchange. Any person providing information or evidence as a result of
a request made under this Information Sharing Agreement will be entitled to all
of the rights and protections of the rules of the requested Exchange.

 

  4. When requested by the requesting Exchange, an inspection or examination
will be conducted of the books and records of a Member or other person or entity
authorized to do business on the Exchange.

 

IV. Permissible Use of Information

The requesting Exchange may use the information furnished pursuant to this
Information Sharing Agreement solely:

 

  (a) for the purposes stated in the request, including ensuring compliance with
or enforcement of the rules of the requesting Exchange specified in the request,
and related provisions; or

 

  (b) for any other related regulatory purposes, including assisting in or
conducting a civil or administrative enforcement proceeding, assisting in or
conducting a self-regulatory enforcement proceeding, conducting or assisting in
a criminal prosecution, or assisting in or conducting any investigation related
thereto for any general charge applicable to the violation of the provision
specified in the request.

 

V. Confidentiality of Requests

 

  1. To the extent permitted by law or as otherwise necessary for the
furtherance of the request or for the enforcement of Exchange rules:

 

  (a) each Exchange will keep confidential requests made under this Information
Sharing Agreement, the contents of such requests, and any other matters arising
during the operation of this Information Sharing Agreement; and

 

  (b) the requesting Exchange will keep confidential any information received
pursuant to this Information Sharing Agreement.

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

  2. The requesting Exchange, to the extent permitted by law, will notify the
requested Exchange of any legally enforceable demand for information prior to
complying with the demand and will assert such appropriate legal exemptions or
privileges with respect to such information as may be available.

 

  3. In response to a request by the requested Exchange and to the extent
permitted by law, as soon as the requesting Exchange has terminated the matter
for which assistance has been requested under this Information Sharing
Agreement, it will return to the requested Exchange all documents and copies
thereof not already disclosed in proceedings referred to in Section III. and
other material disclosing the contents of such documents, other than material
generated as part of the deliberative or internal analytical processes of the
requesting Exchange, which may be retained.

 

VI. Consultations Regarding Mutual Assistance Pursuant to this Information
Sharing Agreement

 

  1. The Exchanges will keep the operation of this Information Sharing Agreement
under continuous review and will consult with a view to improving its operation
and resolving any matters which may arise. In particular, the Exchanges will
consult upon request in the event of:

 

  (a) a denial by one Exchange of, or opposition by one Exchange to, a request
or proposal made by the other Exchange pursuant to this Information Sharing
Agreement; or

 

  (b) a change in market or business conditions, or in the laws and regulations
of the State of either Exchange, or any other development which makes it
necessary to amend or extend this Information Sharing Agreement in order to
achieve its purposes.

The Exchanges may determine such practical measures as may be necessary to
facilitate the implementation of this Information Sharing Agreement.

 

  2. Any of the terms of this Information Sharing Agreement may be amended,
relaxed or waived by mutual written agreement. In the event that the provisions
of this Agreement are amended, the Exchanges agree that NYMEX and CME will
notify the Commodity Futures Trading Commission of such amendment.

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

VII. Indemnification

Each Party agrees to indemnify and hold harmless any Party and its directors,
officers, employees, and agents, from and against any and all losses, claims,
damages, liabilities and expenses (including costs of investigation or defending
the same and reasonable counsel fees incurred in connection therewith) incurred
or threatened against the indemnified Party and arising as a result of or in
connection with any misuse by the indemnifying Party of any information provided
to the indemnifying Party pursuant to this Agreement. Any use of provisions of
this Agreement shall be deemed to be a “misuse” of such information.

 

VIII. Limitation of Liability

Except with respect to liability, loss or damage suffered by a Party and caused
directly by an intentional wrongful act or intentional wrongful omission
committed in bad faith by another party, its directors, officers or employees,
neither the Party nor any of its directors, officers or employees shall be
liable to the other Party, to any of its directors, officers or employees, or to
any other person, for any liability, loss or damage resulting from or claimed to
have resulted from any delays, inaccuracies, errors or omissions with respect to
any information shared by, or to have been shared by a Party hereunder, or with
respect to the performance by a Party of any term or condition of this
Agreement. No Party nor any of its directors, officers or employees shall be
liable to any or all of the other Parties or to any other person for the
non-performance or delay or interruption in the performance of any term or
condition of this Agreement due to acts of God, war, riot, public disturbances,
civil insurrection, directives, orders, or acts of any court or governmental
agency or authority, delays in performing or failure to perform by any public
utility, fires explosions, the elements, epidemics, quarantines, strikes, labor
disputes, embargoes, and other causes of a similar nature.

 

IX. Assignment

Neither this Agreement nor any of the rights or obligations of any party hereto
may be assigned, licensed or otherwise transferred by any party hereto without
the prior written consent of each other party hereto.

 

X. Effective Date

This Information Sharing Agreement will be effective from the date of its
signature by the Exchanges.

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

XI. Termination

This Information Sharing Agreement will continue in effect until the date of
termination of the Services Agreement between the New York Mercantile Exchange
and the Chicago Mercantile Exchange Inc., dated April 4, 2006. This Information
Sharing Agreement will continue to have effect with respect to all requests for
assistance that were made before the effective date of notification until the
requesting Exchange terminates the matter for which assistance was requested.

 

SIGNED this 4th day of April, 2006      SIGNED this 4th day of April, 2006
            FOR:                  FOR: NEW YORK MERCANTILE EXCHANGE, INC.     
CHICAGO MERCANTILE EXCHANGE INC.

/s/ James E. Newsome

    

/s/ Craig S. Donohue

James E. Newsome      Craig S. Donohue President      Chief Executive Officer

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX A

EXCHANGE CONTACT OFFICERS

1. CHICAGO MERCANTILE EXCHANGE INC.

Eric Wolff

Managing Director-Regulatory Affairs

Chicago Mercantile Exchange

20 S. Wacker Drive

Chicago, IL 60606

2. NEW YORK MERCANTILE EXCHANGE

Thomas LaSala

Senior Vice President – Compliance and Risk Management

New York Mercantile Exchange

One North End Avenue

New York, New York 10282-1101

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

EXHIBIT E

AMENDED AND RESTATED CME/NYMEX

CROSS-MARGINING AGREEMENT

This Amended and Restated Cross-Margining Agreement (the “Agreement”) is entered
into this 4th day of April, 2006, between:

CHICAGO MERCANTILE EXCHANGE INC., a business corporation organized under the
laws of the State of Delaware and having its principal office situated at 20
South Wacker Drive, Chicago, Illinois 60606 U.S.A., duly represented by its
Chairman of the Board, Mr. Terrence Duffy, and by its Chief Executive Officer,
Mr. Craig S. Donohue, (hereinafter referred to at times as “CME”)

AND

NEW YORK MERCANTILE EXCHANGE, INC., a Delaware corporation having an office at
One North End Avenue, World Financial Center, New York, New York 10282 U.S.A.,
duly represented by its Chairman of the Board, Mr. Mitchell Steinhaus, and by
its President, Mr. James E. Newsome, (hereinafter referred to at times as
“NYMEX”).

Each of NYMEX and CME is referred to herein as a “Clearing Organization” and
collectively as “Clearing Organizations.”

RECITALS

A. CME is a “derivatives clearing organization” and acts as the clearing
organization for certain futures contracts and options on futures contracts that
are traded on one or more markets that are “designated contract markets.” CME is
regulated by the Commodity Futures Trading Commission (the “CFTC”) pursuant to
the Commodity Exchange Act, as amended (the “CEA”).

B. NYMEX is a “derivatives clearing organization” and acts as the clearing
organization for certain futures contracts and options on futures contracts that
are traded on one or more markets that are “designated contract markets.” NYMEX
is regulated by the CFTC pursuant to the CEA.

C. CME and NYMEX desire to amend and restate their existing Cross-Margining
Arrangement originally executed on June 6th, 2002 to cross-margin products whose
price volatility is sufficiently closely correlated that long and short
positions in such products offset

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

one another to some degree (as will be determined under this Agreement) for
purposes of determining margin requirements.

D. CME and NYMEX desire to enter into this Agreement whereby (i) entities that
are Clearing Members of both CME and NYMEX, or (ii) Clearing Members of one
Clearing Organization that have an Affiliate that is a Clearing Member of the
other such Clearing Organization, may elect to become Cross-Margining
Participants and to have their margin obligations in respect of positions in
futures contracts and options on futures contracts in Eligible Products in their
proprietary accounts at CME offset against their margin obligations in respect
of positions in futures contracts and options on futures contracts in Eligible
Products in their proprietary accounts at NYMEX, and vice versa, to the extent
permitted under this Agreement.

E. In order to facilitate such a Cross-Margining Arrangement, CME and NYMEX
desire to establish procedures whereby CME will guarantee certain obligations of
a Cross-Margining Participant to NYMEX, and NYMEX will guarantee certain
obligations of a Cross-Margining Participant to CME, such guaranties to be
collateralized pursuant to the Guarantor’s Rules by the positions and Margin of
the Cross-Margining Participant held by the Guarantor.

F. It is understood that CME is currently a party to other cross-margining and
loss sharing agreements that are listed on Appendix A hereto, and that CME may
enter into additional cross-margining and loss sharing agreements in the future
(which may include Eligible Products) that shall be added to Appendix A upon
written notice thereof by CME to NYMEX as provided herein. It is further
understood that NYMEX, while not currently party to any such other agreements,
may enter into one or more cross-margining or loss sharing agreements in the
future (which may include Eligible Products) that shall be added to Appendix A
upon written notice thereof by NYMEX to CME as provided herein. Such other
agreements shall not affect the obligations of the parties to this Agreement.
Except as otherwise required under this Agreement, any deficiency of Margin
attributable to any such agreement or other agreements shall not remove, reduce
or increase payment obligations under this Agreement nor trigger payment
obligations under this Agreement.

AGREEMENTS

In consideration of the mutual covenants contained herein, the parties hereto
agree as follows:

1. Definitions. In addition to the terms defined above, certain other terms used
in this Agreement shall be defined as follows:

“Affiliate” means, when used in respect of a particular Clearing Member, a
Clearing Member of the other Clearing Organization which is wholly owned by the
particular Clearing Member or which shares a common parent which wholly owns
both Clearing Members,

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

subject to any other definition jointly agreed to by the Clearing Organizations
as provided in section 2 of this Agreement.

“Business Day” means, a day on which trading in an Eligible Product is conducted
and on which CME or NYMEX conduct money settlements or any other day as may be
agreed upon from time to time by the parties.

“Clearing Member” means any firm which is a clearing member of NYMEX or a
clearing member of CME.

“Clearing Organization” means either CME or NYMEX.

“Cross Margin Spread” shall have the meaning given to that term in Section 4 of
this Agreement.

“Cross Margin Spread Credit Rate” shall have the meaning given to that term in
Section 4 of this Agreement.

“Cross-Margining Affiliate,” as used in respect of a Cross-Margining Participant
of a particular Clearing Organization, means an Affiliate of such
Cross-Margining Participant that is a Cross-Margining Participant of the other
Clearing Organization.

“Cross-Margining Arrangement” means the arrangement between CME and NYMEX as set
forth in this Agreement.

“Cross-Margining Participant” means a Clearing Member that has become a
participant in the Cross-Margining Arrangement as between CME and NYMEX under
the terms of this Agreement. The term “Cross-Margining Participant” shall, where
the context requires, refer collectively to the Cross-Margining Participant and
its Cross-Margining Affiliate, if any.

“Cross-Margining Reduction” means the amount by which a Cross-Margining
Participant’s margin requirement at one Clearing Organization may be reduced as
a result of the Cross-Margining Arrangement.

“Defaulting Member” shall have the meaning given to that term in Section 7(a) of
this Agreement.

“Effective Date” shall mean the date established pursuant to Section 15(j) of
this Agreement.

“Eligible Position” means an amount of a particular Eligible Product held by a
Cross-Margining Participant in net long or net short futures and options on
futures contracts.

“Eligible Product” means certain CME futures contracts or options on futures
contracts traded on and cleared by CME, and certain NYMEX futures contracts or
options on

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

futures contracts traded on NYMEX and cleared by NYMEX, as identified on
Appendix B hereto and any other products mutually agreed to in the future
between the parties by amendment to Appendix B.

“Guaranty” means the obligation of CME to NYMEX, or of NYMEX to CME, as in
effect at a particular time with respect to a particular Cross-Margining
Participant as set forth in Sections 8A and 8B of this Agreement. The term
“Cross-Guaranties” refers to both the Guaranty of CME to NYMEX and the Guaranty
of NYMEX to CME.

“Guaranty Fund” means a fund maintained by NYMEX consisting of required
contributions by Clearing Members that is maintained for the purpose of securing
the obligations of the depositing Clearing Member to NYMEX (in relation to the
Guaranty Fund) and ensuring the financial integrity of NYMEX. The term “Guaranty
Fund” shall include, for such purposes, any right or recourse of NYMEX to assess
its Clearing Members, any insurance cover, guarantee or analogous arrangement.
For the avoidance of doubt, “Guaranty Fund” shall not include a Clearing
Member’s ownership of the stock issued by NYMEX.

“Guaranty Payment” means the amount that is determined by applying the loss
sharing principles set forth in Section 7(d) of this Agreement.

“Last Paid Margin Cycle” means the last margin cycle (variation and/or
settlement) run by a Clearing Organization in which the Cross-Margining
Participant met in full all of its payment obligations to the Clearing
Organization.

“Margin” means initial or original margin (“Performance Bond”) or other
collateral, whether in the form of cash, securities, letters of credit or other
assets, required to be held or actually held by a Clearing Organization to
secure the obligations of a Cross-Margining Participant to it, whether in
respect of Eligible Positions or otherwise.

“Mark-to-Market Payment” as used in respect of an Eligible Position means a
“variation” payment or other payment made by a Clearing Member to a Clearing
Organization or vice versa representing the difference between (i) either the
current market price of such Eligible Position or, if the Eligible Position has
been closed out, the price(s) at which it was closed out, and (ii) either the
price of the Eligible Position upon which the most recent Mark to-Market Payment
was based or, if there was none, the price at which the Eligible Position was
entered into.

“Maximization Payment” shall mean the additional payment(s), if any, that are
required to be made by CME to NYMEX, or vice versa, pursuant to section 8C of
this Agreement after payments are made under the Guaranty.

“Net Loss” means any loss suffered or incurred by a Clearing Organization on the
liquidation of a Cross-Margining Participant’s Offsetting Positions held with
the Clearing Organization and application of Offsetting Margin as determined in
accordance with Section 7 of this Agreement.

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

“Net Surplus” means any surplus realized by a Clearing Organization after the
liquidation of a Cross-Margining Participant’s Offsetting Positions held by the
Clearing Organization and application of Offsetting Margin as determined in
accordance with Section 7 of this Agreement.

“Offsetting Margin” means that amount of Margin which supports Offsetting
Positions. In the case of either of CME or NYMEX, “Offsetting Margin” shall not
include funds or property to the extent that such funds or property may not
lawfully be applied by such Clearing Organization to reduce a Net Loss or
increase a Net Surplus (as such terms are defined in Section 7 below) without
violating any law or regulation by which such Clearing Organization is legally
bound.

“Offsetting Position” means an amount of Eligible Position held by a
Cross-Margining Participant that has been recognized by a Clearing Organization
in the calculation of the Cross-Margining Reduction.

“Proprietary Account Deficit” means any deficit realized by a Clearing
Organization on the liquidation of all of a Cross-Margining Participant’s
Proprietary Portfolio, after the application of Margin and taking into account
any surplus or deficit attributable to the effect of other cross-margining or
loss sharing agreements (but before taking into account the effect of any
“maximization payment” under such other cross-margining or loss sharing
agreements as such term is used in a manner similar to its definition under this
Agreement).

“Proprietary Account Surplus” means any surplus realized on the liquidation of
all of a Cross-Margining Participant’s Proprietary Portfolio and after the
application of Margin and taking into account any surplus or deficit
attributable to other cross-margining or loss sharing agreements (but before
taking into account the effect of any “maximization payment” under such other
cross-margining or loss sharing agreements as such term is used in a manner
similar to its definition under this Agreement) to the extent such surplus may
be applied without violating any law or regulation by which such Clearing
Organization is legally bound.

“Proprietary Portfolio” means all of a Cross-Margining Participant’s proprietary
positions both cross-margined and non-cross-margined held with a Clearing
Organization.

“Reimbursement Obligation” means the obligation, as set forth in Section 7(f),
of a Cross-Margining Participant to a Clearing Organization that is obligated to
make a payment on behalf of such Cross-Margining Participant or its
Cross-Margining Affiliate pursuant to such Clearing Organization’s Guaranty.

“Remaining Account Surplus” means, when used with respect to the liquidation of
a Cross-Margining Participant, the amount of any surplus at a Clearing
Organization remaining after all obligations of the Defaulting Member to the
Clearing Organization have been fully satisfied and includes the sum of any
Proprietary Account Surplus after deducting any Return of Guaranty Payment
pursuant to Section 7(e) plus the Defaulting Member’s portion of

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

the Guaranty Fund (when determining whether NYMEX has a Remaining Account
Surplus) or the Security Deposit Fund (when determining whether CME has a
Remaining Account Surplus).

“Return of Guaranty Payment” means the amount, if any, that is determined
pursuant to Section 7(e) of this Agreement.

“Rules” means the By-Laws, Policies, Procedures and Rules of CME (“CME Rules”),
the By-Laws, Regulations, Rules, Procedures, Policies and Resolutions of NYMEX
(“NYMEX Regulations”) as they may be in effect from time to time.

“Security Deposit Fund” means a fund maintained by CME consisting of required
contributions by Clearing Members and other funds that is maintained for the
purpose of securing the obligations of the depositing Clearing Member to CME (in
relation to the Security Deposit Fund) and ensuring the financial integrity of
the CME. The term “Security Deposit Fund” shall include, for such purposes, any
right or recourse of CME to assess its Clearing Members, any insurance cover,
guarantee or analogous arrangement. For the avoidance of doubt, “Security
Deposit Fund” shall not include a Clearing Member’s ownership of the stock
issued by CME.

2. Participation. (a) CME and NYMEX shall determine which of its Clearing
Members is eligible to become a Cross-Margining Participant; provided that in
order to become a Cross-Margining Participant, a Clearing Member of either CME
or NYMEX must be, or have an Affiliate that is, a Clearing Member of the other
Clearing Organization that such other Clearing Organization has determined to be
eligible to be a Cross-Margining Participant. A common member of CME and NYMEX
shall become a Cross-Margining Participant upon acceptance by CME and NYMEX of
an agreement in the form of Appendix C hereto. A member of CME and its Affiliate
that is a member of NYMEX shall become Cross-Margining Participants and
Cross-Margining Affiliates of one another upon acceptance by CME and NYMEX of an
agreement in the form of Appendix D hereto. Either CME or NYMEX may require a
Cross-Margining Participant to provide an opinion of counsel as to the
enforceability of the provisions of this Agreement and the Rules of the
applicable Clearing Organization with respect to such Cross-Margining
Participant and its Cross-Margining Affiliate, if any, and where such opinion is
provided it shall be shared with the other Clearing Organization.

(b) CME and NYMEX may terminate the participation under this Cross-Margining
Agreement of a particular Cross-Margining Participant (and its Cross-Margining
Affiliate, if any) upon two Business Days’ prior written notice to the other
parties and such Cross-Margining Participant (and its Cross-Margining Affiliate,
if any). A Cross-Margining Participant may terminate its participation under
this Cross-Margining Agreement (and that of its Cross-Margining Affiliate, if
any) upon two Business Days’ prior written notice to CME and NYMEX, if
applicable; provided, however, that no such termination shall be effective so
long as any Cross-Margining Reduction or Guaranty with respect to that
Cross-Margining Participant or its Cross-Margining Affiliate is outstanding
between and CME and NYMEX.

 

E-7

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

3. Positions Subject to Cross-Margining. All positions in Eligible Products
maintained by a Cross-Margining Participant in its proprietary account(s) at CME
and all positions in Eligible Products maintained by a Cross-Margining
Participant in its proprietary account(s) at NYMEX shall be deemed to be
Eligible Positions for purposes of this Agreement. Upon receipt of any required
regulatory approval, the parties hereto agree to include positions in Eligible
Products maintained by Cross-Margining Participants in their respective customer
accounts at CME and NYMEX to be deemed to be Eligible Positions for purposes of
this Agreement.

4. Inter-Commodity Spread Credit and Spread Priorities. For purposes of
calculating the Cross-Margining Reduction for Eligible Positions at CME and
NYMEX in accordance with Section 5 of this Agreement, CME and NYMEX shall
jointly agree to the inter-commodity spread credit(s) applicable to Eligible
Products and shall apply that credit in their margining of Cross-Margining
Participants (such agreed upon credit is referred to herein as the “Cross Margin
Spread Credit Rate”). A review of the currently applicable Cross Margin Spread
Credit Rate(s) shall take place not less than each quarter or at the request of
either Clearing Organization. In the event of a difference of view concerning
the Cross Margin Spread Credit Rate, the lower of the Cross Margin Spread Credit
Rates proposed by the Clearing Organizations shall be applied. The Clearing
Organizations shall give the Eligible Products the spread priorities which are
consistent with the general approach to such priorities in their respective
margining programs. The initial spread priorities between Eligible Products for
purposes of this Cross-Margining Agreement (referred to herein as the “Cross
Margin Spread”) are set forth in Appendix B to this Agreement. Modifications to
the Cross Margin Spread Credit Rate(s) and/or the Cross Margin Spread(s) will be
discussed and agreed to by the Clearing Organizations and notification of any
such modifications will be sent to Cross-Margining Participants.

5. Calculation of the Cross-Margining Reduction. (a) On each Business Day on and
after the Effective Date, CME and NYMEX shall each run one or more margin cycles
as each Clearing Organization’s business needs require. Such margin cycles need
not occur simultaneously. At the conclusion of a specified margin cycle(s) (as
set forth in Appendix F hereto) the Clearing Organizations will each calculate a
total Cross-Margining Reduction with respect to each Cross-Margining
Participant’s Offsetting Positions using the Cross Margin Spread Credit Rate(s)
and Cross Margin Spread(s) as described in Section 4 of the Agreement. With
respect to the agreed upon Cross Margin Spread(s), the Clearing Organizations
shall calculate the outright margin requirement currently required by each
Clearing Organization on its leg of the Cross Margin Spread. For each recognized
Cross Margin Spread, the amount of the Cross-Margining Reduction shall be
limited to the agreed upon Cross Margin Spread Credit Rate times the lower of
(a) CME’s outright margin requirement on its leg of the Cross Margin Spread or
(b) NYMEX’s outright margin requirement on its leg of the Cross Margin Spread.
The sum of the Cross-Margining Reductions for each recognized Cross Margin
Spread shall be the total Cross-Margining Reduction on the Offsetting Positions.
The CME shall use its SPAN® margining program and NYMEX shall also use the SPAN®
margining program or some other agreed upon method to make such calculations.
Both CME and NYMEX shall promptly inform each other of changes to the margin
rates applicable to the Eligible Products.

 

E-8

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Attached as Appendix E are non-exhaustive examples that illustrate how the
Cross-Margining Reduction will be calculated. In the event of inconsistency
between Appendix E and the provisions of the main part of this Agreement, the
main part of the Agreement shall control.

If an Eligible Product is cross-marginable with more than one other contract
across more than one other clearing organization, a particular Eligible Position
may only be allocated to a single clearing organization (including the other
Clearing Organization to this Agreement). Allocation of Eligible Positions
shall, where possible, be accomplished in a manner that maximizes the
cross-margin benefits for Cross-Margining Participants. In making a request for
payment under the terms of this Agreement, either Clearing Organization shall
demonstrate the impact of any other agreement or agreements in respect of the
Eligible Products on its Net Loss.

Notwithstanding any other provision of this Agreement, each of CME and NYMEX may
unilaterally determine, on any Business Day, to reduce (including to reduce to
zero) the Eligible Positions allocated to the other Clearing Organization for
cross-margining with respect to any individual Cross-Margining Participant or
with respect to all Cross-Margining Participants. A Clearing Organization that
makes such a unilateral determination shall promptly notify the other Clearing
Organization that it has done so.

CME shall inform NYMEX, and NYMEX shall inform CME, of the exact method used to
calculate the amount of Eligible Positions and the Margin requirements with
respect thereto. CME shall inform NYMEX, and NYMEX shall inform CME, of any
non-emergency changes in such calculations no less than 30 days prior to
implementation of such change, with the understanding that this obligation to
provide advance notice of changes in such method shall not limit either Clearing
Organization’s rights under the preceding paragraph or its right under
Section 5(c) below to determine its actual Margin requirements with respect to a
Cross-Margining Participant’s Eligible Positions. CME shall inform NYMEX, and
NYMEX shall inform CME, in advance (and to the extent practicable, not less than
30 calendar days in advance) of any non-emergency change to the contract
specifications of their respective Eligible Products. Each Clearing Organization
shall inform the other as soon as reasonably practicable of any emergency change
to either the method used to calculate Eligible Positions or the Margin
requirements with respect thereto, or to contract specifications of any Eligible
Product.

(b) The CME and NYMEX agree to reduce a Cross-Margining Participant’s actual
Margin requirement with respect to the Eligible Positions in an amount equal to
the Cross-Margining Reduction. The CME and NYMEX agree to jointly monitor the
relative size of the Cross-Margining Reductions and agree to work together in
good faith to modify the calculation in the event of any significant disparity
between the Clearing Organizations’ Cross-Margining Reductions. Notwithstanding
the foregoing provisions of this paragraph, the CME shall require an additional
amount of actual Margin (the “Supplemental Margin”) with respect to the Eligible
Positions of each Cross-Margining Participant it margins to take into account
risks that may be associated with certain CME Eligible Products that contain
components that are not-related to any NYMEX Eligible Product. The amount of the
Supplemental Margin required by the CME shall be computed according to the
method mutually agreed upon by CME and NYMEX.

 

E-9

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(c) Notwithstanding any other provision of this Agreement, each Clearing
Organization may unilaterally determine its Margin requirements in respect of a
Cross-Margining Participant’s Eligible Positions taking into consideration
market conditions, the financial condition of a Cross-Margining Participant (or
its Cross-Margining Affiliate), the size of positions carried by a
Cross-Margining Participant (or its Cross-Margining Affiliate) or any other
factor or circumstance deemed by it to be relevant. CME and NYMEX shall each
determine to its own satisfaction that the Margin it requires in respect of a
Cross-Margining Participant’s Eligible Positions, together with the Guaranty of
the other Clearing Organization, is adequate to protect itself. In general, any
such unilateral determination of a Clearing Organization’s Margin requirements
with respect to a Cross-Margining Participant’s Eligible Positions may only
result in an increase to a Cross-Margining Participant’s Margin requirement.
However, if a Clearing Organization makes a unilateral determination to increase
the amount of Cross-Margining Reduction given to a Cross-Margining Participant
on its Offsetting Positions, then the amount of such “Additional Cross-Margining
Reduction” shall be added to the calculation of the amount of proceeds from the
liquidation of Margin collateral that is associated with the Offsetting
Positions when determining whether the Defaulting Member has a Net Surplus or
Net Loss in accordance with Section 7 of this Agreement. In the event that a
Margin requirement with respect to a Cross-Margining Participant’s Eligible
Positions is unilaterally modified by a Clearing Organization, such Clearing
Organization shall promptly provide notice of the change to the other Clearing
Organization.

Absent gross negligence or willful misconduct, neither Clearing Organization
shall have liability to the other Clearing Organization or to any other person
based solely upon an allegation or the fact that any information given or
calculated pursuant to Section 5 of this Agreement was inaccurate or inadequate.
Any calculation of a Cross-Margining Reduction provided for in Section 5 of this
Agreement shall not result in any guarantee to any Cross-Margining Participant
that such calculation will yield any, or the highest possible, Cross-Margining
Reduction.

6. Daily Procedures for Exchange of Cross-Margining Data. (a) All daily
settlements of funds and securities, including Margin payments, with respect to
Eligible Positions and transactions relating to Eligible Positions shall be
conducted on each Business Day in accordance with the ordinary settlement
procedures of each Clearing Organization; provided, however, that CME and NYMEX
shall establish procedures, including time frames, to exchange on each Business
Day such information as may reasonably be required in order to calculate the
Cross-Margining Reduction for each Cross-Margining Participant and to ensure
that both CME and NYMEX are informed of the amount of such Cross-Margining
Reduction. CME and NYMEX agree that each will include in such exchange of
information such other settlement information as the other Clearing Organization
may reasonably request in relation to the Cross-Margining Arrangement. The
initial procedures and time frames for such exchange of information are set
forth on Appendix F to this Agreement.

In addition to the time frames set forth in Appendix F, the Clearing
Organizations may release excess Margin or Guaranty Fund or Security Deposit
Fund collateral, as applicable, to Cross-Margining Participants in accordance
with such Clearing Organization’s normal

 

E-10

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

procedures. In the event that a Clearing Organization is unable to exchange the
information necessary for the other Clearing Organization to calculate the
Cross-Margining Reduction due to systems or operational malfunctions, the
Clearing Organizations shall use the information last received from the other
Clearing Organization to calculate the Cross-Margining Reduction; provided that,
in accordance with Section 5(c) of this Agreement, a Clearing Organization shall
have the discretion unilaterally to determine its Margin requirements in respect
of a Cross-Margining Participant’s Eligible Positions. Notwithstanding the
foregoing, neither CME nor NYMEX shall make payment to a Cross-Margining
Participant with respect to any Mark-to-Market payment, original margin, initial
margin, Security Deposit Fund or Guaranty Fund payment, as applicable, or other
margin or settlement payment due to such Cross-Margining Participant with
respect to Eligible Positions prior to the times specified in Appendix G on any
Business Day. Notwithstanding any other provision of this Agreement other than
the preceding sentence, neither CME nor NYMEX shall be prevented from conducting
any margin cycle (including intraday settlement variation cycles).

In the event that either CME or NYMEX is notified prior to such time on any
Business Day that a Cross-Margining Participant or its Cross-Margining Affiliate
has failed to make any Margin or settlement payment due to the other Clearing
Organization, then the Clearing Organization receiving such notice shall
withhold any such Margin or settlement payment (or other releases of “excess”
collateral) otherwise due to (or requested by) its Cross-Margining Participant
until such time as the Clearing Organization receiving the notice has determined
whether or not to suspend its Cross-Margining Participant or liquidate such
Cross-Margining Participant’s positions. If the Clearing Organization receiving
such notice determines to suspend or liquidate as referred to above, such Margin
or settlement payment shall be applied by the Clearing Organization in
accordance with its Rules and with this Agreement.

(b) On any day that is a Business Day for CME and not for NYMEX or vice versa,
the Clearing Organization that is open for business shall use the information
last received from the other Clearing Organization to calculate the
Cross-Margining Reduction; provided that, in accordance with Section 5(c) of
this Agreement, a Clearing Organization shall have the discretion unilaterally
to determine its Margin requirements in respect of a Cross-Margining
Participant’s Eligible Positions. Days that are holidays and therefore not
Business Days for CME or for NYMEX are set forth on Appendix H.

7. Suspension and Liquidation of a Cross-Margining Participant. (a) Either CME
or NYMEX may at any time exercise any rights under its Rules to terminate,
suspend or otherwise cease to act for or limit the activities of a
Cross-Margining Participant (a “Defaulting Member”) and to liquidate the
positions and Margin of such Cross-Margining Participant. Upon such event, the
terminating or suspending Clearing Organization shall immediately by telephone
or in person, and thereafter in writing, notify the other Clearing Organization
of such event and the other Clearing Organization shall exercise any rights
under its Rules to terminate, suspend or otherwise cease to act for or limit the
activities of the Defaulting Member. Both such Clearing Organizations shall
promptly liquidate to the extent permitted by applicable law (through market
transactions or other commercially reasonable means) the Eligible Products and
Margin of such Defaulting Member (or its Cross-Margining Affiliate, as the case
may be) at such Clearing

 

E-11

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Organizations except to the extent that CME and NYMEX mutually agree to delay
liquidation of some or all of such Eligible Products and Margin or except to the
extent that either determines unilaterally not to do so as provided below. CME
and NYMEX shall use reasonable efforts to coordinate the liquidation of Eligible
Products so that offsetting or hedged positions at CME and NYMEX can be closed
out simultaneously.

Any funds received by a Clearing Organization as a result of the liquidation of
positions and Margin of a Cross-Margining Participant pursuant to this Section 7
shall be applied in accordance with the following paragraphs of this Section and
the Rules of the Clearing Organization.

(b) In order to establish whether a Guaranty Payment must be made by one
Clearing Organization to the other, the Clearing Organizations shall determine
if a Net Surplus or Net Loss on Offsetting Positions exists. The Clearing
Organizations shall first determine if a Net Surplus or Net Loss exists with
respect to Offsetting Positions by liquidating the positions in Eligible
Products and Margin of the Defaulting Member (and its Affiliate). Net Surplus or
Net Loss on Offsetting Positions shall be determined in the following manner:

(i) Proceeds from Liquidation of Offsetting Positions:

 

  •  

Proceeds from the liquidation of the long side of market positions (long
futures, long calls and short puts) shall be computed separately from the short
side of market positions (short futures, short calls and long puts). When
positions are liquidated as spread transactions (e.g., as a calendar spread or
an option spread such as a straddle), a fair market price will be attributed to
each leg of the spread to prevent unduly shifting gains or losses from one side
of the market to the other.

 

  •  

Only the proceeds from the side of market that was offset pursuant to this
Agreement at the Last Paid Margin Cycle will be allocated to determine Net
Surplus or Net Loss.

 

  •  

For options (calls and puts), only the net change in value from the Last Paid
Margin Cycle to the liquidation value shall be used to calculate the proceeds
attributable to the liquidation of Eligible Products. The value of the options
from the Last Paid Margin Cycle will be used to establish a liquidation of
Margin collateral value (in the case of long option value) or a liability (in
the case of short option value).

 

  •  

The portion of the proceeds from the liquidation of the Eligible Positions that
will be allocated to the Offsetting Positions will be the portion determined by
multiplying the liquidation proceeds (as determined above) by the percentage
that the number of “futures equivalent” Offsetting Positions are to the total
number of “futures equivalent” Eligible Positions on the side of the market that
was

 

E-12

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

 

offset. Where “futures equivalent” means the measure of the size of a portfolio
containing futures and/or options on futures, in terms of an equivalent standard
full size futures contract.

(ii) Proceeds from the liquidation of Margin collateral associated with
Offsetting Positions:

 

  •  

All Margin collateral held in support of the Defaulting Member’s account will be
liquidated (this includes options in Eligible Products, but may or may not
include options in non-Eligible Products). The value of the options at the Last
Paid Margin Cycle will be used to establish a Margin collateral or liability
value.

 

  •  

The portion of the proceeds from the liquidation of collateral that will be
allocated to the Offsetting Positions, will be the ratio that the Offsetting
Positions contributed to the total SPAN risk requirement at the Last Paid Margin
Cycle. Any Supplemental Margin collected or other unilateral decrease in the
amount of Cross-Margining Reduction given to the Defaulting Member at the Last
Paid Margin Cycle will be considered as an increase in the SPAN risk
requirement.

 

  •  

In the event that a Clearing Organization unilaterally gave the Defaulting
Member an “Additional Cross-Margining Reduction” as allowed pursuant to
Section 5(c) of this Agreement, then such additional amount shall be added to
both the numerator and the denominator of the above ratio of Offsetting
Positions to the total SPAN risk requirement at the Last Paid Margin Cycle.

(iii) Net Surplus or Net Loss on Offsetting Positions will be the sum of the
7(b)(i) and (ii). In the event that the sum is a positive number, a Net Surplus
will result. In the event that the above result is a negative number, a Net Loss
will result.

Attached as Appendix I are non-exhaustive examples that illustrate how the above
Net Surplus/Net Loss calculation will operate. In the event of inconsistency
between Appendix I and the provisions of the main part of this Agreement, the
main part of this Agreement shall control.

For purposes of the foregoing determination of whether a Clearing Organization
has a Net Surplus or Net Loss, a Clearing Organization that has elected
unilaterally not to liquidate any of the Eligible Products and Margin of the
Defaulting Member or its Cross-Margining Affiliate shall be deemed to have a Net
Surplus equal to the Net Loss of the Clearing Organization that liquidated its
Defaulting Member. A Clearing Organization that has elected to liquidate a
portion, but not all, of the Eligible Products of the Defaulting Member or its
Cross-

 

E-13

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Margining Affiliate (a “Partially Liquidating CO”) shall be deemed to have a Net
Surplus or Net Loss equal to the gain or loss on the liquidated portion
(determined after application of all Offsetting Margin) plus a gain equal to a
pro rated amount of the Net Loss of the Clearing Organization that liquidated
its Defaulting Member, pro rated based on the portion of the Eligible Products
that the Partially Liquidating CO did not liquidate.

(c) A Guaranty Payment between the Clearing Organizations shall be “triggered”
in the circumstances set forth in section 7(d) below. If each Clearing
Organization cross-margins more than one Eligible Product with the other
Clearing Organization, Offsetting Positions between such Eligible Products shall
be separately calculated to determine the Guaranty Payment, if any. If
applicable, the Clearing Organizations shall net Guaranty Payments among
Offsetting Positions. In liquidating positions and Margin of their respective
Cross-Margining Participant(s), CME and NYMEX shall each determine as soon as
practicable but in any event within seven (7) Business Days following a
suspension or termination, the Net Loss or Net Surplus on Offsetting Positions
at that Clearing Organization. The calculation of the Net Loss or Net Surplus on
Offsetting Positions by CME and NYMEX shall be independent of, and not include,
any other cross-margining or loss sharing programs either Clearing Organization
is currently participating in or may in the future participate in. CME shall
notify NYMEX and NYMEX shall notify CME of the amount of its own Net Loss or Net
Surplus on Offsetting Positions and, in such detail as may reasonably be
requested, the means by which such Net Loss or Net Surplus on Offsetting
Positions was calculated.

(d) Guaranty Payment. If CME and NYMEX each have a Net Loss or a Net Surplus on
Offsetting Positions, or one Clearing Organization has a Net Loss and the other
Clearing Organization has a Net Surplus on Offsetting Positions, or one Clearing
Organization has either a Net Loss or a Net Surplus on Offsetting Positions and
the other Clearing Organization has neither a Net Loss nor a Net Surplus on
Offsetting Positions, a Guaranty Payment shall be made between the Clearing
Organizations that will equalize the Net Loss or Net Surplus on Offsetting
Positions between the Clearing Organizations. If the Clearing Organizations have
equal Net Losses or equal Net Surpluses, then no payment will be made between
the Clearing Organizations (except that a “Maximization Payment” under
Section 8C below may be made). The Clearing Organization receiving a payment
shall be the “Beneficiary” and the Clearing Organization making the payment
shall be the “Guarantor.” The Guarantor shall make such Guaranty Payment
promptly by Fed wire transfer to the designated account of the Beneficiary and
in any event not later than the second Business Day next following such
determination. If at any time within six months following the suspension or
termination of a Cross-Margining Participant, either Clearing Organization
determines that any amount paid to the other Clearing Organization in respect of
a Guaranty was incorrect (including any possible return of Guaranty Payment as
determined below in Section 7(e)) either because of errors in calculation at the
time or because new information relevant to the determination of such amount was
discovered after the determination of such amount, the Clearing Organizations
shall cooperate with one another to recalculate the appropriate amount of any
Guaranty payments to be made and shall make any necessary payments by Fed wire

 

E-14

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

transfer to one another to correct the error within two Business Days following
completion of such recalculation.

Attached as Appendix J are non-exhaustive examples that illustrate how the above
loss-sharing provisions will operate. In the event of inconsistency between
Appendix J and the provisions of the main part of this Agreement, the main part
of this Agreement shall control.

(e) Possible Return of Guaranty Payment. A Beneficiary may be required to return
all or a portion of the Guaranty Payment it received under the circumstances set
forth in this paragraph. In order to establish whether the Guaranty Payment
shall be returned, in whole or in part, to the Guarantor, the Beneficiary shall
promptly determine whether it has a Proprietary Account Surplus or Proprietary
Account Deficit. If the Beneficiary has a Proprietary Account Surplus, it shall
make a payment to the Guarantor, in respect of a Guaranty, known as the “Return
of Guaranty Payment” and equal to the lesser of: (i) the Beneficiary’s
Proprietary Account Surplus or (ii) the amount of the initial Guaranty Payment.
Such “Return of Guaranty Payment” shall be made promptly and in no event later
than the third business day following the calculation of the Proprietary Account
Surplus by the Beneficiary. Such payment shall be made in immediately available
funds.

A Clearing Organization making a Return of Guaranty Payment pursuant to this
Agreement shall not pay out any Proprietary Account Surplus that it is legally
prohibited from paying. Each Clearing Organization may, in its discretion, apply
internally, Proprietary Account Surpluses to the Defaulting Member’s customer or
client deficits prior to making a Return of Guaranty Payment where permitted by
applicable law, and shall do so, if required by applicable law.

(f) In the event that a Guarantor becomes obligated to make a Guaranty Payment
to the Beneficiary in respect of the obligation of a Defaulting Member or its
Cross-Margining Affiliate to the Beneficiary, the Defaulting Member and such
Affiliate, shall thereupon immediately be obligated, whether or not the
Guarantor has then made the Guaranty payment to the Beneficiary, to reimburse
the Guarantor for the amount of the Guaranty payment as determined by the
Guarantor, and the Guarantor shall be subrogated to all of the rights, if any,
of the Beneficiary against the Defaulting Member or its Cross-Margining
Affiliate. Such obligation (the “Reimbursement Obligation”) shall be due
immediately upon a demand by the Guarantor to the Defaulting Member or its
Cross-Margining Affiliate specifying the amount of such obligation. In the event
that the final amount of the Guaranty Payment is greater or less than the amount
originally determined, the Reimbursement Obligation shall be adjusted
accordingly and payment of the difference shall be made between the Guarantor
and the Defaulting Member or its Cross-Margining Affiliate, as appropriate.

It is understood and agreed that any payment between the Guarantor or its
Cross-Margining Participant and the Beneficiary with respect to the Guaranty,
and any payment between the Defaulting Member or its Cross-Margining Affiliate
and the Guarantor, is a “margin payment” as defined in Section 761 of the
Bankruptcy Code. In the event that the Guarantor had a Proprietary Account
Surplus or a Remaining Account Surplus in respect of the Defaulting Member or
its Cross-Margining Affiliate, such surplus shall constitute “cash, securities,
or other

 

E-15

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

property held by or due from” the Guarantor within the meaning of Section 362 of
the Bankruptcy Code, and the Reimbursement Obligation of the Defaulting Member
or its Cross-Margining Affiliate shall be netted and set off against such
surplus, and any remaining surplus shall be returned to the Defaulting Member or
its representative or otherwise disposed of in accordance with the Rules of the
Guarantor.

For purposes of Title IV, Subtitle A of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 USC 4401-4407), this Agreement shall be
deemed to be a “netting contract” and all payments made or to be made hereunder,
including payments made in accordance with this Agreement in connection with the
liquidation of a Cross-Margining Participant shall be deemed to be “covered
contractual payment obligations” or “covered contractual payment entitlements,”
as the case may be, as well as “covered clearing obligations.”

8A. Guaranty of CME to NYMEX. (a) CME hereby unconditionally guaranties the
prompt payment when due (whether at maturity, by declaration, by demand or
otherwise), and at any and all times thereafter, of all indebtedness and other
obligations of every kind and nature of each Cross-Margining Participant or its
Cross-Margining Affiliate (hereafter referred to, in either case, as NYMEX’s
Debtor) to NYMEX, direct or indirect, absolute or contingent, due or to become
due whether new or hereafter existing, arising from or related to, but limited
to the amount determined under Section 7 of this Agreement (such indebtedness
being hereinafter called the “Indebtedness to NYMEX”). CME further agrees to pay
any and all reasonable costs and expenses (including, without limitation,
counsel fees and expenses) incurred by NYMEX in enforcing its rights against CME
under this Section 8A.

(b) The liability of CME under this Guaranty shall be unconditional and
irrespective of (i) any lack of enforceability of any Indebtedness to NYMEX or
any guaranty thereof; (ii) any change of the time, manner or place of payment,
or any other term, of any Indebtedness to NYMEX or any guaranty thereof;
(iii) any taking, exchange, subordination, release or non-perfection of any
collateral securing payment of any Indebtedness to NYMEX; (iv) the acceptance of
additional parties or the release of anyone primarily or secondarily liable on
the Indebtedness to NYMEX; (v) any law, rule, regulation or order of any
jurisdiction or any governmental, regulatory or administrative authority of any
kind, whether now or hereafter in effect, affecting any term of any Indebtedness
to NYMEX or any guaranty or security therefor or NYMEX’s rights with respect
thereto; and (vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, NYMEX’s Debtor or a guarantor. CME
waives promptness, diligence, and notices with respect to any Indebtedness to
NYMEX and this Guaranty and any requirement that NYMEX exhaust any right or take
any action against NYMEX’s Debtor or any other person or entity or with respect
to any guaranty or collateral security therefor and any duty on NYMEX’s part to
disclose to CME any matter, fact or thing related to the business, operations or
conditions (financial or otherwise) of NYMEX’s Debtor or its affiliates or its
property, whether now or hereafter known by NYMEX. CME acknowledges that this
Guaranty is a guaranty of payment not collection and that CME has made and will
continue to make its own investigations with respect to all matters regarding
NYMEX’s Debtor.

 

E-16

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(c) In the event that CME makes any payment to NYMEX under this Guaranty, and to
the extent such payment is not returned to CME in whole or in part pursuant to
Section 7(e) of this Agreement, CME shall be subrogated to the rights of NYMEX
against the Cross-Margining Participant or its Cross-Margining Affiliate in
respect of whose Indebtedness to NYMEX such Guaranty payment was made and to the
rights of NYMEX against any other guarantor or other third party with respect to
such Indebtedness to NYMEX. However, notwithstanding the CME’s subrogation
rights hereunder, the Defaulting Member is directly required under the CME Rules
to satisfy its Reimbursement Obligation to the CME. NYMEX shall not be liable
for any payment to be made by CME under this Agreement, including, without
limitation, any Guaranty Payment or Maximization Payment.

(d) All of NYMEX’s rights and remedies provided for herein or otherwise
available to CME at law or otherwise, and all of the CME’s direct legal rights
against the Defaulting Member and its Affiliate, shall be cumulative to the
extent permitted by law.

8B. Guaranty of NYMEX to CME. (a) NYMEX hereby unconditionally guaranties the
prompt payment when due (whether at maturity, by declaration, by demand or
otherwise), and at any and all times thereafter, of all indebtedness and other
obligations of every kind and nature of each Cross-Margining Participant or its
Cross-Margining Affiliate (hereafter referred to, in either case, as CME’s
Debtor) to CME, direct or indirect, absolute or contingent, due or to become due
whether new or hereafter existing, arising from or related to, but limited to
the amount determined under Section 7 of this Agreement (such indebtedness being
hereinafter called the “Indebtedness to CME”). NYMEX further agrees to pay any
and all reasonable costs and expenses (including, without limitation, counsel
fees and expenses) incurred by CME in enforcing its rights against NYMEX under
this Section 8B.

(b) The liability of NYMEX under this Guaranty shall be unconditional and
irrespective of (i) any lack of enforceability of any Indebtedness to CME or any
guaranty thereof; (ii) any change of the time, manner or place of payment, or
any other term, of any Indebtedness to CME or any guaranty thereof; (iii) any
taking, exchange, subordination, release or non-perfection of any collateral
securing payment of any Indebtedness to CME; (iv) the acceptance of additional
parties or the release of anyone primarily or secondarily liable on the
Indebtedness to CME; (v) any law, rule, regulation or order of any jurisdiction
or any governmental, regulatory or administrative authority of any kind, whether
now or hereafter in effect, affecting any term of any Indebtedness to CME or any
guaranty or security therefor or CME’s rights with respect thereto; and (vi) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, CME’s Debtor or a guarantor. NYMEX waives promptness, diligence,
and notices with respect to any Indebtedness to CME and this Guaranty and any
requirement that CME exhaust any right or take any action against CME’s Debtor
or any other person or entity or with respect to any guaranty or collateral
security therefor and any duty on CME’s part to disclose to NYMEX any matter,
fact or thing related to the business, operations or conditions (financial or
otherwise) of CME’s Debtor or its affiliates or its property, whether now or
hereafter known by CME. NYMEX acknowledges that this Guaranty is a guaranty of
payment not collection and that NYMEX has made and will continue to make its own
investigations with respect to all matters regarding CME’s Debtor.

 

E-17

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(c) In the event that NYMEX makes any payment to CME under this Guaranty, and to
the extent such payment is not returned to NYMEX in whole or in part pursuant to
Section 7(e) of this Agreement, NYMEX shall be subrogated to the rights of CME
against the Cross-Margining Participant or its Cross-Margining Affiliate in
respect of whose Indebtedness to CME such Guaranty payment was made and to the
rights of CME against any other guarantor or other third party with respect to
such Indebtedness to CME. However, notwithstanding NYMEX’s subrogation rights
hereunder, the Defaulting Member is directly required under the NYMEX Rules to
satisfy its Reimbursement Obligation to NYMEX. CME shall not be liable for any
payment to be made by NYMEX under this Agreement, including, without limitation,
any Guaranty Payment or Maximization Payment.

(d) All of CME’s rights and remedies provided for herein or otherwise available
to NYMEX at law or otherwise, and all of the NYMEX’s direct legal rights against
the Defaulting Member and its Affiliate, shall be cumulative to the extent
permitted by law.

8C. Maximization Payment.

(a) If, after payment is made under the Guaranty referred to in Sections 8A and
8B of this Agreement, CME has a Remaining Account Surplus, CME shall distribute
such surplus among NYMEX and the other clearing organizations with which CME has
similar cross-margining arrangements in proportion to the Cross-Margining
Reduction amounts (or comparable amounts under such other cross-margining
agreements) most recently calculated prior to the suspension or termination of
the Defaulting Member pursuant to their applicable cross-margining agreements
until either (i) all the Defaulting Member’s (or its Cross-Margining
Affiliate’s) obligations to such clearing organizations are fully satisfied or
(ii) CME’s Remaining Account Surplus has been used up.

(b) If, after payment is made under the Guaranty referred to in Sections 8A and
8B of this Agreement, NYMEX has a Remaining Account Surplus, NYMEX shall
distribute such surplus among CME and the other clearing organizations with
which NYMEX has similar cross-margining arrangements in proportion to the
Cross-Margining Reduction amounts (or comparable amounts under such other
cross-margining agreements) most recently calculated prior to the suspension or
termination of the Defaulting Member pursuant to their applicable
cross-margining agreements until either (i) all the Defaulting Member’s (or its
Cross-Margining Affiliate’s) obligations to such clearing organizations are
fully satisfied or (ii) NYMEX’s Remaining Account Surplus has been used up.

(c) A Clearing Organization making a Maximization Payment pursuant to this
Agreement shall not pay out any Remaining Account Surplus that it is legally
prohibited from paying. Each Clearing Organization may, in its discretion, apply
internally, Remaining Account Surpluses to the Defaulting Member’s customer or
client deficits prior to making a Maximization Payment where permitted by
applicable law, and shall do so, if required by applicable law.

 

E-18

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

9. Confidentiality. (a) Except as expressly authorized in this Agreement, each
party shall maintain in confidence, and shall not disclose to any individual or
entity that is not a party to this Agreement, any information obtained by it
from the other Clearing Organization in connection with this Agreement or the
transactions or activities contemplated herein with respect to any party or the
positions, transactions or financial condition of any Clearing Member
(“Confidential Information”). The foregoing shall not apply to: (i) any
information which is or becomes generally known to the public, other than
through an action or failure to act by such party or Clearing Member, or
(ii) the disclosure of Confidential Information to a third party to whom such
information was previously known. This Section 9 shall not prohibit any party
from furnishing Confidential Information to the CFTC, or pursuant to any
surveillance agreement or similar arrangement to which such party is a party, to
any “self-regulatory organization” within the meaning of the CEA or to any other
government or regulatory body, or to a Representative of such Clearing
Organization with a “need to know” the Confidential Information who has been
instructed to maintain the confidentiality of such Confidential Information in
accordance with the provisions of this Agreement and who has agreed to do so.
The term “Representative” shall mean, with respect to a Clearing Organization,
such Clearing Organization’s directors, officers, employees, agents, consultants
and professional advisers.

(b) In the event that any party is required by subpoena, or by any other order
of court, law or regulation to disclose any Confidential Information in the
possession of such party, it is agreed that the party which is subject to such
requirement shall provide the other party with prompt notice of such requirement
so that the other party may seek an appropriate protective order and/or waive
compliance with the provisions of this Section with respect to such required
disclosure. In the event that such other party determines to seek a protective
order, the party subject to the requirement shall cooperate to the extent
reasonably requested by the other. It is further agreed that if in the absence
of a protective order or the receipt of a waiver hereunder, the party subject to
the requirement is nonetheless, in the reasonable opinion of its counsel,
compelled to disclose such Confidential Information to any tribunal or
regulatory agency or else stand liable for contempt or suffer other censure or
penalty, such party may produce such Confidential Information without liability
under this Section 9.

10. Indemnification. (a) Each of the parties (each, individually an
“Indemnitor”) shall indemnify, defend and hold harmless the other, its
directors, officers, employees, agents and each person, if any, who controls the
indemnified party (each an “Indemnified Party”) against any Claims and Losses
(as defined below) incurred by an Indemnified Party as the result, or arising
from allegations, of any act or failure to act by the Indemnitor in connection
with this Agreement if such act or failure to act constitutes either (i) gross
negligence or willful misconduct on the part of the Indemnitor; or (ii) a
material breach of this Agreement, or any obligation undertaken in connection
with this Agreement, any Rule of the Indemnitor (except to the extent that such
Rule is inconsistent with the provisions of this Agreement), or any law or
governmental regulation applicable to the Indemnitor.

(b) As used in this Section 10, the term “Claims and Losses” means any and all
losses, damages and expenses whatsoever arising from claims of third parties
including, without limitation, liabilities, judgments, damages, costs of
investigation, reasonable attorney’s

 

E-19

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

fees and other expenses and amounts paid in settlement (pursuant to consent of
the Indemnitor, which consent shall not be unreasonably withheld) in connection
with any action, suit, litigation, claim or proceeding to which an Indemnified
Party is made a party defendant, or is threatened to be made such a party.

(c) Promptly after receipt by an Indemnified Party of notice of the commencement
of any action or the assertion of any claim against such Indemnified Party, such
Indemnified Party shall, if a claim in respect thereof is to be made against the
Indemnitor, notify the Indemnitor in writing of the commencement of such action
or assertion of such claims, but the omission so to notify the Indemnitor will
not relieve the Indemnitor from any liability which it may have to any
Indemnified Party except to the extent that the Indemnitor has been prejudiced
by the lack of prompt notice and shall in any event not relieve the Indemnitor
of any liability which it may have to an Indemnified Party otherwise than under
this Section 10. In case any such action is brought against any Indemnified
Party, and such party promptly notifies the Indemnitor of the commencement
thereof, the Indemnitor will be entitled to participate in, and, to the extent
that it may wish, to assume and control the defense thereof, with counsel chosen
by it, and, after notice from the Indemnitor to such Indemnified Party of its
election so to assume the defense thereof, the Indemnitor will not be liable to
such Indemnified Party under this Section 10 for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, but the Indemnified Party
may, at its own expense, participate in such defense by counsel chosen by it,
without, however, impairing the Indemnitor’s control of the defense. In any
action in which the named parties include the Indemnitor and one or more
Indemnified Parties, the Indemnitor shall have the right to assume control of
any legal defenses that are available to it and any of the Indemnified Parties.
Notwithstanding the foregoing, in any action in which the named parties include
both the Indemnitor and an Indemnified Party and in which the Indemnified Party
shall have been advised by its counsel that there may be legal defenses
available to the Indemnified Party that are different from or additional to
those available to the Indemnitor, the Indemnitor shall not have the right to
assume such different or additional legal defenses, and provided further that
the Indemnitor shall not, in connection with one action or separate but
substantially similar actions arising out of the same general allegations or
circumstances, be liable for more than the reasonable fees and disbursements of
one separate firm of attorneys for all of the Indemnified Parties for the
purpose of conducting such different or additional legal defenses. The
Indemnitor may negotiate a compromise or settlement of any such action or claim
provided that such compromise or settlement does not require a contribution by,
or otherwise adversely affect the rights of, the Indemnified Party.

11. Rules of the Clearing Organizations. CME and NYMEX each shall propose and
use all reasonable efforts to obtain any necessary regulatory approval necessary
to adopt and maintain in effect such provisions in its Rules as are reasonably
necessary to implement the provisions of this Agreement. Without limiting the
generality of the foregoing, such Rules shall provide in effect that
Cross-Margining Participants of the Clearing Organization shall be bound by the
provisions of this Agreement (as amended from time to time) and that the
Clearing Organization may use its Security Deposit Fund or Guaranty Fund, as
applicable, including any

 

E-20

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

rights of assessments against its Clearing Members, to make payment under any
Guaranty given by such Clearing Organization pursuant to Section 8A or 8B of
this Agreement.

CME and NYMEX shall give each other reasonable notice of the intended
effectiveness of any Rule or Rule amendment (other than an emergency rule or
rule amendment, as to which notice shall be given promptly) adopted by such
Clearing Organization if such Rule or Rule amendment relates in a material way
to such Clearing Organization’s Security Deposit Fund or Guaranty Fund, as
applicable, contributions to capital, or rights of assessment against its
Clearing Members.

12. Representations and Warranties. (a) Each Party represents and warrants to
the others, as of the date hereof and as of the Effective Date, and which
representations and warranties shall be deemed to be repeated each day during
the term of the Agreement, as follows:

(i) Good Standing. It is a company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the power
and authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged and is duly qualified and authorized to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which failure to so qualify could have a material adverse effect
on its financial condition, business or operations.

(ii) Corporate Power and Authority. It has all requisite corporate power and
authority to enter into this Agreement and the agreements referenced in this
Agreement, as applicable, and full power and authority to take all actions
required of it pursuant to such agreements. This Agreement will constitute, when
executed and delivered, valid and binding obligations of such party, and the
execution, delivery and performance of all of its obligations under this
Agreement have been duly authorized by all necessary corporate action on the
part of such Party.

(iii) No Violation. Except for provisions as to which waivers have been
obtained, and except to the extent representations made hereunder as of the date
hereof may be subject to the regulatory approvals referred to in paragraph
(b) hereof, the execution and delivery of this Agreement by the Clearing
Organization and the performance of its obligations under this Agreement: (i) do
not result in a violation or breach of, do not conflict with or constitute a
default under, and will not accelerate or permit the acceleration of performance
required by, any of the terms and provisions of its certificate or articles of
incorporation, by-laws, rules or other governing documents, any note, debt
instrument, or any other agreement to which it is a party or to which any of its
assets or properties is subject, and will not be an event which after notice or
lapse of time or both will result in any such violation, breach, conflict,
default or acceleration; and (ii) do not result in a violation or breach of any
law, judgment, decree, order, rule or regulation of any governmental authority
or court, whether federal, state or local, at law or in equity, applicable to it
or any of its assets or properties.

 

E-21

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(b) Each party represents and warrants to the others, as of the Effective Date
that all authorizations, permits, approvals or consents required to be obtained
from, and all notifications and filings required to be made with, all
governmental authorities and regulatory bodies and third parties to permit such
party to place into effect this Agreement and to perform its obligations under
this Agreement have been obtained.

13. Termination. (a) Each party may terminate this Agreement without cause by
delivering written notice of termination to the other party specifying a
termination date not less than 30 days following the date on which such notice
is sent. Unless the parties otherwise agree, this Agreement shall terminate on
the same date as the termination of that certain Services Agreement between the
parties dated April 4th, 2006.

(b) In the event that any party fails to perform any material obligation under
this Agreement and such failure is not promptly rectified after written notice
thereof is sent to such party, the non-defaulting party may terminate this
Agreement by delivering written notice of such termination to the other party
specifying a termination date not less than five Business Days following the
date on which such notice of termination is sent.

(c) In the event that a termination date is established under paragraphs (a), or
(b) above, each party shall promptly notify all of its Cross-Margining
Participants. Each party shall cooperate fully in exchanging all necessary data,
records, computer files and other information, and in executing documents and
taking other action necessary or appropriate to effect transfers, releases, etc.
in order to effect termination of the Cross-Margining Arrangement as to the
terminating parties. In the event that a liquidation of a Cross-Margining
Participant is pending on the termination date, the provisions of this Agreement
pertaining to such liquidation shall survive the termination until such
liquidation has been completed and any Guaranty Payment, possible Return of
Guaranty Payment and Maximization Payment that may be due from one Clearing
Organization to the other in respect of such liquidation have been paid.

(d) All obligations arising under this Agreement prior to the termination
thereof that remain unsatisfied shall survive the termination of this Agreement
including any rights of subrogation under Sections 8A and 8B of this Agreement.
In addition, the provisions of Section 9 shall survive the termination of this
Agreement to the extent that they apply to Confidential Information received by
a party prior to the termination of this Agreement, and the provisions of
Section 10 shall survive the termination of this Agreement to the extent that
the event giving rise to an obligation of indemnification occurs prior to the
termination of this Agreement.

14. Information Sharing. (a) CME and NYMEX hereby agree to provide one another
with the following information regarding their respective Cross-Margining
Participants:

(i) If either Clearing Organization applies any special surveillance procedures
to a Cross-Margining Participant or places such Cross-Margining Participant on

 

E-22

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

“remedial action status”, “high risk status” or higher as provided in such
Clearing Organization’s Rules, such Clearing Organization will inform the other
Clearing Organization of that fact.

(ii) If either Clearing Organization requires more frequent reporting of
financial information by a Cross-Margining Participant, that Clearing
Organization will inform the other Clearing Organization of that fact and the
period of reporting.

(iii) If either Clearing Organization increases the capital requirement for any
Cross-Margining Participant, that Clearing Organization will notify the other
Clearing Organization of that fact, the amount of the additional capital
required and the deadline for meeting the requirement.

(iv) If either Clearing Organization imposes higher Margin requirements with
respect to a particular Cross-Margining Participant, or issues a special
intra-day call for Margin or settlement variation in respect of a
Cross-Margining Participant, that Clearing Organization shall notify the other
Clearing Organization of that fact and the amount of the additional Margin
required.

(v) Each Clearing Organization shall, upon request by the other Clearing
Organization, promptly furnish to such other Clearing Organization the following
information with respect to each account carried by a Cross-Margining
Participant with the Clearing Organization from whom the information is
requested: (A) Margin required and on deposit in respect of such account, and
(B) the dollar amount of any current settlement obligations owed to or by the
Cross-Margining Participant that have been determined for such account in
respect of variation margin, premiums, option exercises and any other
settlements.

(vi) CME and NYMEX shall each promptly notify the other of any actions,
disciplinary or otherwise, taken against a Cross-Margining Participant which it
reasonably believes would prevent such Cross-Margining Participant from
fulfilling its obligations under this Agreement.

(vii) Each Clearing Organization shall promptly notify the other in the event
that the notifying Clearing Organization learns of any major processing
difficulties (including, but not limited to, back-office or bank computer
problems) or any major operational errors of a Cross-Margining Participant.

(viii) Each Clearing Organization agrees to notify the other Clearing
Organization immediately in the event that a Cross-Margining Participant
defaults materially in any settlement obligation (other than routine delays of
not more than forty-eight hours in the physical delivery of underlying
interests) or if either Clearing Organization suspends, terminates, ceases to
act for, or liquidates any Clearing Member.

(ix) In the case of any notice given pursuant to paragraphs (i), (ii), (iii),
(iv), (vii), or (viii) above, the Clearing Organization giving such notice shall
also notify the recipient when the condition giving rise to such notice is
terminated.

 

E-23

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(b) CME agrees to inform NYMEX, and NYMEX agrees to inform CME, as requested, of
the total size of or a material change in the total size of, and aggregate
amount of required contributions to, such Clearing Organization’s Guaranty Fund
or Security Deposit Fund, as applicable.

(c) Each Clearing Organization shall notify the other Clearing Organization of
any material fine, penalty, disciplinary action, regulatory surveillance or
other action taken against a Cross-Margining Participant by its Designated
Self-Regulatory Organization or any other agency or body that has regulatory
oversight over such Cross-Margining Participant.

(d) Any notice required to be given pursuant to this Section shall be given by
telephone and facsimile promptly upon the occurrence of the event giving rise to
the requirement of notification. Each such notice shall be directed as follows:

If to NYMEX:

 

Arthur McCoy Vice President; Financial Surveillance New York Mercantile
Exchange, Inc. One North End Avenue New York, New York 10282 Telephone:  
212-299-2928 Fax:   212-301-4712 Charles Bebel Vice President; Clearing
Operations New York Mercantile Exchange, Inc. One North End Avenue New York, New
York 10282 Telephone:   212-299-2130 Fax:   212-301-4506 Christopher Bowen Chief
Administrative Officer New York Mercantile Exchange, Inc. One North End Avenue
New York, New York 10282 Telephone:   212-299-2200 Fax:   212-299-2299

 

E-24

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

and

If to CME:

 

Ms. Kim Taylor

Managing Director and President, Clearing House Division

Chicago Mercantile Exchange

Telephone:

  

(312) 930-3156

Fax:

  

(312) 634-1553

Mr. Timothy Doar

Managing Director, Risk Management

Chicago Mercantile Exchange

Telephone:

  

(312) 930-3162

Fax:

  

(312) 930-1553

Either Clearing Organization may amend or supplement the notice information set
forth above by fax notice to the other Clearing Organization containing the name
and telephone number of any different or additional individual designated by
such Clearing Organization pursuant to the preceding sentence.

(d) In the event that notification is given by a Clearing Organization pursuant
to this Section, such Clearing Organization shall furnish to the other upon
request such additional information or documents relating to the circumstances
leading to the notification as may reasonably be requested by it. Notices shall
be deemed given when received.

15. General Provisions.

(a) Further Assurances. Each party agrees, without additional consideration, to
execute and deliver such instruments and take such other actions as shall be
reasonably required or as shall be reasonably requested by the other party in
order to carry out the transactions, agreements and covenants contemplated by
this Agreement.

(b) Amendment, Modification and Waiver. Unless otherwise expressly provided
herein, this Agreement may be permanently modified, amended or supplemented only
by mutual written agreement of the parties. A party may temporarily waive or
modify any condition intended to be for its benefit provided such waiver shall
be in writing signed by the party or parties to be charged. Any delay or failure
of a party hereto at any time to require performance by the other party of any
provision of this Agreement shall in no way affect the right of such party to
require future performance of that or any other provision of this Agreement and
shall not be construed as a waiver of any subsequent breach of any provision, a
waiver of

 

E-25

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

this provision itself or a waiver of any other right under this Agreement. The
parties shall inform their respective Cross-Margining Participants of any
amendments or modifications made to this Agreement.

(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws (without regard to principles of conflicts of laws) of
the State of Illinois.

(d) Notices. Unless otherwise expressly provided in this Agreement, all notices
to be given by any party under this Agreement shall be in writing and shall be
given by facsimile, hand delivery, recognized courier delivery service, or by
confirmed telecopy, to the other parties at the following addresses (or such
other addresses as any party may furnish to the others in writing for such
purpose):

If to NYMEX:

 

Arthur McCoy

Vice President; Financial Surveillance

New York Mercantile Exchange, Inc.

One North End Avenue

New York, New York 10282

Telephone:

 

212-299-2928

Fax:

 

212-301-4712

Charles Bebel

Vice President; Clearing Operations

New York Mercantile Exchange, Inc.

One North End Avenue

New York, New York 10282

Telephone:

 

212-299-2130

Fax:

 

212-301-4506

Christopher Bowen

Chief Administrative Officer

New York Mercantile Exchange, Inc.

One North End Avenue

New York, New York 10282

Telephone:

 

212-299-2200

Fax:

 

212-299-2299

 

E-26

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

If to CME:

  Chicago Mercantile Exchange   20 South Wacker Drive, 6 South   Chicago, IL
60606   Attention: President, Clearing House Division   Fax: 312-634-1553

Copy to:

  Chicago Mercantile Exchange   20 South Wacker Drive, 7 North   Chicago, IL
60606   Attention: General Counsel   Fax: 312-930-3323

All notices given pursuant to this Agreement shall be effective upon receipt.

(e) Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party hereto
without the prior written consent of the other party, except that such other
party’s consent shall not be required in the case of an assignment to an
affiliate of such party. Nothing in this Agreement is intended to confer any
rights or remedies upon any person except the parties hereto.

(f) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

(g) Headings. The section and paragraph headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties and shall not affect in any way the meaning or interpretation of this
Agreement.

(h) Entire Agreement. Except as set forth expressly herein or in another
instrument in writing signed by the party to be bound thereby which makes
reference to this Agreement, this Agreement, including the appendices hereto,
embodies the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein, and no other restrictions, promises,
representations, warranties, covenants, or undertakings in relation thereto
exist among the parties. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

(i) Invalid Provision. In the event that any provision, or any portion of any
provision, of this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision, or any other portion of any provision, of
this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

(j) Effective Date. This Agreement shall become effective on a date mutually
agreed to by CME and NYMEX, which date shall be not earlier than the date on
which all necessary regulatory and board approvals have been received by CME and
NYMEX, if any.

 

E-27

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(k) Force Majeure. Notwithstanding any other provision of this Agreement, no
party hereto shall be liable for any failure to perform or delay in performing
its obligations hereunder if such failure or delay is caused by fire, flood,
strike, power failure, riot or other civil commotion, act of war or terrorism,
acts of nature, acts of international, federal, state or municipal public
authorities, governmentally ordered business or banking moratoria or orders to
refrain from using power (whether or not such moratoria or orders are legally
authorized), or any other condition or event beyond the reasonable control of
the party whose performance is prevented or delayed. Each party agrees to notify
the other promptly upon learning that any such condition or event has occurred
and shall cooperate with the other, upon request, in arranging alternative
procedures and in otherwise taking reasonable steps to mitigate the effects of
any inability to perform or any delay in performing.

16. Arbitration. (a) Any controversy or claim arising out of or relating to this
Agreement, as it may be amended or modified from time to time, including any
claim or controversy arising out of or relating to the alleged breach,
termination or invalidity thereof and any claim based on federal or state
statute, shall be settled by arbitration in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (the “AAA”)
to the extent that such Rules do not conflict with any provisions of this
section. The parties do not, however, appoint the AAA as administrator of the
arbitration.

(b) The arbitration shall be held at a mutually agreed place or at the offices
of AAA in the city of the party who is the Respondent if no agreement is
reached. It shall be held before a panel of three arbitrators: one appointed by
each Clearing Organization and one neutral arbitrator to be appointed by
agreement of the party-appointed arbitrators. Each neutral arbitrator shall be
an attorney with not less than an aggregate of 12 years of experience in legal
practice, legal teaching or adjudication. The neutral arbitrator shall act as
chairman.

(c) A party (the “Claimant”) may initiate arbitration under this Agreement by
sending to the other party or parties (“Respondents”), by overnight courier, a
written demand for arbitration containing a description in reasonable detail of
(i) the nature of the claim, dispute or controversy it desires to arbitrate, and
(ii) the remedy or remedies sought including Claimant’s best current information
as to the amount of money, if any, sought to be recovered. The arbitration shall
be deemed commenced on the date Respondent receives the demand (the
“Commencement Date”).

(d) Within seven Business Days after the Commencement Date, Respondent may send
to Claimant any written responsive statement to the demand it wishes. Within
that time period, Respondent shall send to Claimant or Claimant’s counsel, by
overnight courier, return receipt requested, a written demand for arbitration of
any claims Respondent then wishes to arbitrate against Claimant, containing the
same information as in an initial demand.

(e) Claimants and Respondents may freely amend, restate, clarify or supplement
their claims in writing until a reasonable time, not less than 21 Business Days,
prior

 

E-28

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

to the first arbitration hearing, except that no wholly new claim may be
submitted after selection of the arbitrators without the arbitrators’ consent.

(f) Any award, order or judgment pursuant to such arbitration shall be deemed
final and may be entered and enforced in any state or federal court of competent
jurisdiction located in the State of New York or Illinois. Each party agrees to
submit to the jurisdiction of any such court for purposes of the enforcement of
any such award, order or judgment.

(g) Any award of damages pursuant to such arbitration shall be included in a
written decision which shall state the reasons upon which the award was based,
including all the elements involved in the calculation of any award of damages.

(h) Any arbitration proceeding hereunder shall be conducted on a confidential
basis.

(i) Notwithstanding any other provision of this Agreement, each party shall have
the right to apply to any court of competent jurisdiction for temporary
injunctive or other preliminary relief.

(j)(1) There shall be no pre-hearing written interrogatories, written requests
for admission, or discovery depositions. The arbitrators may require the parties
to respond to limited and reasonable requests for production of documents from
the opposing party.

(2) In considering the extent of pre-hearing document discovery to be permitted,
the arbitrators shall consider that reduced time, expense and burden are
principal reasons the parties have chosen to resolve their disputes through
arbitration rather than court proceedings, and shall require pre-hearing
document production only where necessary to avoid injustice. The arbitrators
shall require that a party requesting pre-hearing production of documents shall
reimburse the producing party for the costs of copying and for the time and fees
of the producing party’s employees and attorneys in locating, reviewing,
organizing and copying requested documents.

(3) With the approval of the arbitrators, evidence depositions may be taken of
witnesses who cannot be subpoenaed to testify at the hearing. The arbitrators
may require advance disclosure by the parties of evidence to be offered at the
hearing in order to avoid unfair surprise.

(k) No arbitration arising out of or relating to this Agreement shall include,
by consolidation, joinder or in any other manner, any additional person not a
party to this Agreement except by written consent containing a specific
reference to this Agreement and signed by the Clearing Organizations. Any such
written consent to arbitration involving an additional person or persons shall
not constitute consent to arbitration of any dispute not described therein or
with any person not named or described therein.

 

E-29

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

[Signature Page Follows]

 

E-30

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.

 

By:  

/s/ Craig S. Donohue

  Craig S. Donohue   Chief Executive Officer NEW YORK MERCANTILE EXCHANGE, INC.
By:  

/s/ James E. Newsome

  James E. Newsome   President

 

E-31

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX A

Cross-Margining or Other Loss Sharing Arrangements of CME:

 

Agreement

 

Includes Eligible Products?

CME/BOTCC Cross-Margining Agreement dated April 15, 1999

  No

CME/GSCC Cross-Margining Agreement dated July 24, 2001

  No

CME/LCH Cross-Margining Agreement dated March 24, 2000

  No

CME/OCC/NYCC Cross-Margining Agreement dated June 7, 1993

  No

Cross-Margining or Other Loss Sharing Arrangements of NYMEX:

NONE.

 

E-32

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX B

ELIGIBLE PRODUCTS

(CROSS MARGIN SPREADS)

 

CME

 

NYMEX

100 CME Goldman Sachs Commodity Index futures contracts**

  50 Crude Oil futures contracts   13 Natural Gas futures contracts   13 Heating
Oil futures contracts   12 Unleaded Gas futures contracts**

In addition to the CME Products listed above, additional CME Products available
for cross margining pursuant to the terms of this Agreement include CME Weather
Contracts, CME GSCI Excess Return Contract and CME Rogers TRAKRS Contract.

 

E-33

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

** References to “futures contracts” includes options on futures contracts.

** CME and NYMEX shall, on an annual basis (or more frequently if agreed to by
CME and NYMEX), reevaluate the composition of the Goldman Sachs Commodity Index
(“GSCI”) based upon updates (if any) made to the GSCI by Goldman Sachs and shall
modify the Cross Margin Spread set forth above as applicable based on such
evaluation.

** “Eligible Products” shall also include NYMEX Mini Contracts as defined in the
Cooperation Agreement between CME and NYMEX dated June 6, 2002 and that are
listed for trading on GLOBEX® pursuant to the Cooperation Agreement. NYMEX Mini
Contracts that become Eligible Products shall be used in this Cross-Margining
Agreement as part of the spread priorities set forth above to the extent that
the aggregate amount of the NYMEX Mini Contracts in any one commodity is equal
to a full-sized standard futures contract in such commodity (e.g., Assume a
Cross-Margining Participant is long 48 full sized Crude Oil futures contracts
and is long 5 “Mini” Crude Oil futures contracts (where the ratio of “Minis” to
full sized contracts is 5:2). In this example, the 5 “Minis” (the equivalent of
2 full sized Crude Oil contracts) will be aggregated with the 48 full sized
Crude Oil contracts and the Cross-Margining Participant will be considered to be
long 50 full sized Crude Oil contracts).

 

E-34

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX C

CHICAGO MERCANTILE EXCHANGE INC./

NEW YORK MERCANTILE EXCHANGE INC.

CROSS-MARGINING PARTICIPANT AGREEMENT

(COMMON MEMBER)

The undersigned (“Member”) is a Clearing Member of the New York Mercantile
Exchange, Inc. (“NYMEX”) and a Clearing Member of the Chicago Mercantile
Exchange Inc. (“CME”). The term “Clearing Organization” means either CME or
NYMEX. Member hereby elects to become a Cross-Margining Participant in the
Cross-Margining Arrangement between NYMEX and CME. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Member agrees to be bound by the NYMEX Rules and the CME Rules applicable to
Cross-Margining Participants and by the provisions of the Cross-Margining
Agreement between NYMEX and CME (the “Cross-Margining Agreement”), as any of the
foregoing may be in effect from time to time, a copy of each of which Member has
reviewed.

Without limiting the generality of the foregoing, Member agrees that all of its
positions, margin deposits, investment property (as defined by the Uniform
Commercial Code), and other property in the possession or subject to the control
of NYMEX shall be subject to the security interest of NYMEX as set forth in
NYMEX’s Rules and in the Cross-Margining Agreement. Member further agrees that
all of its positions, margin deposits, investment property (as defined by the
Uniform Commercial Code), and other property in the possession or subject to the
control of CME shall be subject to the security interest of CME as set forth in
CME’s Rules and in the Cross-Margining Agreement. Member unconditionally
promises immediate payment of any Reimbursement Obligation to a Clearing
Organization as set forth in the Cross-Margining Agreement.

Member further agrees that, if a Clearing Organization has suspended, terminated
or otherwise declared the Member to be in default under its Rules, then the
other Clearing Organization may suspend, terminate or otherwise declare the
Member to be in default under its Rules.

Member agrees that Clearing Data (as hereinafter defined) regarding the Member
may be disclosed by CME to NYMEX and by NYMEX to CME. Clearing Data means
transactions and other data that is received by CME or NYMEX in its clearance
and/or settlement processes, and such data, reports or summaries thereof which
may be produced as a result of processing such data, including regarding
Member’s positions, margin requirements and deposits.

 

E-35

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Neither CME nor NYMEX guarantees to Member that the calculation of the
Cross-Margining Reduction pursuant to the Cross-Margining Agreement will yield
any, or the highest possible, Cross-Margining Reduction.

Member represents and warrants to and for the benefit of the Clearing
Organizations that: (i) it has full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; (ii) its execution and
delivery of this Agreement and the performance of its obligations hereunder have
been duly authorized by all requisite action; (iii) all authorizations of and
exemptions, actions, approvals and consents by, and all notices to or filings
with, any governmental or other authority or other persons that are necessary to
enable it to execute and deliver this Agreement and to perform its obligations
hereunder have been obtained or made and are in full force and effect, and it
has complied with all of the conditions thereof; (iv) this Agreement has been
duly executed and delivered by it; (v) this Agreement is a legal, valid and
binding obligation on its part, enforceable against it in accordance with its
terms; and (vi) its execution, delivery and performance of this Agreement do not
violate or conflict with any law, regulation, rule of a self-regulatory
organization or judicial or government order or decree to which it is subject,
any provision of its constitutional or governing documents, or term of any
agreement or instrument to which it is a party, or by which its property or
assets is bound or affected.

This agreement shall be effective, when accepted by both CME and NYMEX. This
agreement may be terminated by the Member upon two Business Days’ notice to CME
and NYMEX and such termination shall be effective upon written acknowledgement
by both CME and NYMEX. Either CME or NYMEX may terminate this Agreement
immediately upon notice to the Member. Notwithstanding the previous two
sentences, the Member’s obligations under this Agreement and the Cross Margining
Agreement shall survive the termination of this Agreement. Capitalized terms
used in this Agreement that are not otherwise defined shall have the meanings
given to them in the Cross-Margining Agreement.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Illinois.

(i) NYMEX/CME MEMBER

 

E-36

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Firm Name:  

 

By:  

 

 

(Print Name)

Title:  

 

Date:  

 

 

Accepted By:       Accepted By: New York Mercantile Exchange, Inc.     Chicago
Mercantile Exchange Inc. By:  

 

    By:  

 

 

(Print name)

     

(Print name)

Title:  

 

    Title:  

 

Date:  

 

    Date:  

 

This Agreement is effective as of                     

[To be filled in upon acceptance of CME and NYMEX.]

3.

 

E-37

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX D

CHICAGO MERCANTILE EXCHANGE INC./

NEW YORK MERCANTILE EXCHANGE, INC.

CROSS-MARGINING PARTICIPANT AGREEMENT

(AFFILIATED MEMBERS)

The undersigned “NYMEX Member” is a Clearing Member of the New York Mercantile
Exchange, Inc. (“NYMEX”). The undersigned “CME Member” is a Clearing Member of
the Chicago Mercantile Exchange Inc. (“CME”). The term “Clearing Organization”
means either CME or NYMEX. NYMEX Member hereby elects to become a
Cross-Margining Participant of NYMEX, and CME Member hereby elects to become a
Cross-Margining Participant of CME, for purposes of the Cross-Margining
Arrangement between NYMEX and CME. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, NYMEX Member agrees to
be bound by the NYMEX Rules applicable to Cross-Margining Participants; CME
Member agrees to be bound by the CME Rules applicable to Cross-Margining
Participants; and NYMEX Member and CME Member both agree to be bound by the
provisions of the Cross-Margining Agreement between NYMEX and CME (the
“Cross-Margining Agreement”), as any of the foregoing may be in effect from time
to time, a copy of each of which Member has reviewed. Without limiting the
generality of the foregoing, NYMEX Member agrees that all of its positions,
margin deposits, investment property (as defined by the Uniform Commercial
Code), and other property in the possession or subject to the control of NYMEX
shall be subject to the security interest of NYMEX as set forth in NYMEX’s Rules
and in the Cross-Margining Agreement; and CME Member agrees that all of its
positions, margin deposits, investment property (as defined by the Uniform
Commercial Code), and other property in the possession or subject to the control
of CME shall be subject to the security interest of CME as set forth in CME’s
Rules and in the Cross-Margining Agreement.

NYMEX Member and CME Member each unconditionally promises immediate payment of
any Reimbursement Obligation to a Clearing Organization as set forth in the
Cross-Margining Agreement.

CME Member and NYMEX member each further agree that, (i) if CME has suspended,
terminated or otherwise declared the CME Member to be in default under its
Rules, then NYMEX may suspend, terminate or otherwise declare the NYMEX Member
to be in default under its Rules and (ii) if NYMEX has suspended, terminated or
otherwise declared the NYMEX Member to be in default under its Rules, then CME
may suspend, terminate or otherwise declare the CME Member to be in default
under its Rules.

NYMEX Member and CME Member each represent and warrant to NYMEX and CME that
they are Affiliates of one another as defined in the Cross-Margining Agreement.
NYMEX Member and CME Member acknowledge and agree that they will be treated as
Cross-Margining

 

E-38

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Affiliates for purposes of the Cross-Margining Arrangement and that, as a
result, a default by NYMEX Member to NYMEX may result in a loss to CME Clearing
Member, and a default by CME Clearing Member to CME may result in a loss to
NYMEX Member.

NYMEX Member and CME Member agree that Clearing Data (as hereinafter defined)
regarding such members may be disclosed by CME to NYMEX and by NYMEX to CME.
Clearing Data means transactions and other data that is received by CME or NYMEX
in its clearance and/or settlement processes, and such data, reports or
summaries thereof which may be produced as a result of processing such data,
including regarding a NYMEX Member’s or CME Member’s positions, margin
requirements and deposits.

Neither CME nor NYMEX guarantees to NYMEX Member or CME Member that the
calculation of the Cross-Margining Reduction pursuant to the Cross-Margining
Agreement will yield any, or the highest possible, Cross-Margining Reduction for
either NYMEX Member or CME Member.

Each of NYMEX Member and CME Member represents and warrants to and for the
benefit of the Clearing Organizations that: (i) it has full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
(ii) its execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all requisite action;
(iii) all authorizations of and exemptions, actions, approvals and consents by,
and all notices to or filings with, any governmental or other authority or other
persons that are necessary to enable it to execute and deliver this Agreement
and to perform its obligations hereunder have been obtained or made and are in
full force and effect, and it has complied with all of the conditions thereof;
(iv) this Agreement has been duly executed and delivered by it; (v) this
Agreement is a legal, valid and binding obligation on its part, enforceable
against it in accordance with its terms; and (vi) its execution, delivery and
performance of this Agreement do not violate or conflict with any law,
regulation, rule of a self-regulatory organization or judicial or government
order or decree to which it is subject, any provision of its constitutional or
governing documents, or term of any agreement or instrument to which it is a
party, or by which its property or assets is bound or affected.

This Agreement shall be effective, when accepted by both CME and NYMEX. This
agreement may be terminated by the NYMEX Member or CME Member upon two Business
Days’ notice to CME and NYMEX and such termination shall be effective upon
written acknowledgement by both CME and NYMEX. Either CME or NYMEX may terminate
this Agreement immediately upon notice to the NYMEX Member and CME Member.
Notwithstanding the previous two sentences, the NYMEX Member’s and CME Member’s
obligations under this Agreement and the Cross Margining Agreement shall survive
the termination of this Agreement. Capitalized terms used in this Agreement that
are undefined shall have the meanings given to them in the Cross-Margining
Agreement.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Illinois.

 

E-39

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

4. CME CLEARING

 

MEMBER           NYMEX CLEARING MEMBER Firm Name:  

 

      Firm Name:  

 

By:  

 

      By  

 

    (Print Name)           (Print Name) Title  

 

      Title:  

 

Date:  

 

      Date:  

 

Accepted By:       Accepted By: Chicago Mercantile Exchange Inc.     New York
Mercantile Exchange, Inc. By:  

 

    By:  

 

  (Print name)       (Print name) Title:  

 

    Title:  

 

Date:  

 

    Date:  

 

This Agreement is effective as of                     .

[To be filled in upon acceptance of CME and NYMEX.]

 

E-40

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX E

CROSS-MARGINING REDUCTION CALCULATION EXAMPLE

 

Cross Margin Spread

   CME
leg(s)    Outright
Margin Per
Contract    Outright
Requirement    NYMEX
leg(s)    Outright
Margin Per
Contract    Outright
Requirement

1)

   100 GI    $ 1,500    $ 150,000    50 CL    $ 2,000    $ 100,000            
13 NG    $ 4,000    $ 52,000             13 HO    $ 2,000    $ 26,000         
   12 HU    $ 2,500    $ 30,000                              

Total

         $ 150,000          $ 208,000                          

If the Cross Margin Spread Credit Rate for the 100 GI vs 50 CL, 13 NG, 13 HO, 12
HU (NYMEX Basket) is agreed at 80% then the applicable Cross Margin Reduction
for each clearing organization would be the lower of the outright requirements
for the CME leg(s) or the outright requirements for the NYMEX leg(s) times 80%.

= $150,000 * .80 = $120,000

CME would apply $120,000 credit for the CME legs of 100 GI and NYMEX would limit
its Cross Margin Reduction to $120,000 for the NYMEX legs (NYMEX Basket) of this
spread.

The following is an example of how the Cross Margin Reduction would apply over
hypothetical positions over a number of margin cycles.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Additional Assumptions (on a normal Business Day):

 

  1) CME Supplemental Margin is zero. Neither CME nor NYMEX make any unilateral
increase or decrease in the amount of the Cross-Margining Reduction

 

  2) CME will send its available Eligible Positions to NYMEX once a day after
its RTH cycle

 

  3) NYMEX will send its Eligible Positions to CME once a day (its prior day’s
RTH “morning modified” positions) after its ITD cycle.

 

  4) CME will run its twice a day margining and settlement cycle (ITD & RTH) and
will recalculate its Cross-Margining Reduction twice a day.

 

  5) NYMEX will run settlement twice a day (RTH & ITD), but will remargin only
once a day at its ITD cycle.

 

  6) For simplicity, NYMEX positions will be denoted as NYMEX Basket positions
and will be in the ratio of 50 CL, 13 NG, 13 HO and 12 HU contracts. CME GI
positions will be denoted in 100 contracts bundles

 

  7) End of Day 0 portfolios. CME GI: Long 25; NYMEX Baskets Short 45.

APPENDIX E (CONT.)

 

Day

   Cycle    Current
CME pos.
(1 = 100
GI
contracts)    NYMEX
Baskets
available
to CME
(1 =
NYMEX
basket)    CME
Outright
Requirement
($150,000 /
100
contracts)    CME
Cross
Margin
Reduction
($120,000 /
spread)    Current
NYMEX
position
(1 =
NYMEX
basket)    CME GI
positions
available
to
NYMEX
(1 = 100
GI
contracts)    NYMEX
Outright
Requirement
($208,000 /
NYMEX
basket)    NYMEX
Cross
Margin
Reduction
($120,000
per
spread)    Eligible Position File
Transfer

0

   RTH    2    NA          -4            

1

   ITD    3    NA    $ 450,000      NA    -2    NA    $ 416,000      NA   
NYMEX to CME short
2 eligible baskets    RTH    4    -2    $ 600,000    $ 240,000    -3    NA    $
416,000      NA    CME to NYMEX 4
long GI contracts

2

   ITD    3    -2    $ 450,000    $ 240,000    -1    4    $ 208,000    $ 120,000
   NYMEX to CME short
1 basket    RTH    2    -1    $ 300,000    $ 120,000    2    4    $ 208,000    $
120,000    CME to NYMEX 2
long GI contracts

3

   ITD    3    -1    $ 450,000    $ 120,000    3    2    $ 624,000      0   
NYMEX to CME long
3 baskets    RTH    1    3    $ 150,000      0    2    2    $ 624,000      0   
CME to NYMEX 1
long GI contracts

4

   ITD    -2    3    $ 300,000    $ 240,000    1    1    $ 208,000      0   
NYMEX to CME long
1 basket    RTH    -3    1    $ 450,000    $ 120,000    4    1    $ 208,000     
0    CME to NYMEX short
3 GI contracts

5

   ITD    -4    1    $ 600,000    $ 120,000    5    -3    $ 1,040,000    $
360,000    NYMEX to CME long
5 baskets    RTH    -4    5    $ 600,000    $ 480,000    6    -3    $ 1,040,000
   $ 360,000    CME to NYMEX short
4 GI contracts

6

   ITD    2    5    $ 300,000      0    2    -4    $ 416,000    $ 240,000   
NYMEX to CME long
2 baskets    RTH    3    2    $ 450,000      0    -1    -4    $ 416,000    $
240,000    CME to NYMEX long
3 GI contracts

7

   ITD    4    2    $ 600,000      0    -3    3    $ 624,000    $ 360,000   
NYMEX to CME short
3 baskets    RTH    5    -3    $ 750,000    $ 360,000    0    3    $ 624,000   
$ 360,000    CME to NYMEX long
5 GI contracts

]

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX F

On normal Business Days, CME will transfer data following its RTH cycle to the
NYMEX. The normal time for the file transfer will be approximately 11:00 p.m.
Chicago time for the RTH file. NYMEX will utilize the data received from CME for
purposes of calculating a Cross-Margining Reduction during its ITD margin cycle.

On normal Business Days, NYMEX will transfer data following its ITD cycle to the
CME (these positions will be based on NYMEX’s prior day’s RTH positions as
reflected in NYMEX’s “morning modified” position file). The normal time for that
file transfer will be approximately 12:00 p.m. New York time. CME will utilize
the data received from NYMEX for purposes of calculating a Cross-Margining
Reduction during its ITD and RTH cycles.

The following information will be contained in each file transferred for each
Clearing Member Participant:

The firm #

Origin #

Eligible Products

Current Margin Requirement with respect to each Eligible Product

Total Net Eligible Positions

Available Eligible Positions

Cross-Margining Reduction (from current margin cycle)

Spreads formed

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

The following information may, at the option of each Clearing Organization, be
contained in each file transferred for such Clearing Organization’s Clearing
Member Participant:

Offsetting Positions associated with Cross-Margining Reduction (from current
margin cycle)

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX G

CME ITD settlement bank notification—12:40 p.m. Chicago time

CME RTH settlement bank notification—11:30 p.m. Chicago time

NYMEX RTH settlement bank notification—8:30 a.m. New York time

NYMEX ITD settlement bank notification—12:00 p.m. New York time

In addition to the settlement times set forth above, either Clearing
Organization may run additional Margin cycles as needed based upon market
volatility. In the event that a Clearing Organization runs an additional Margin
cycle, it shall provide reasonable notification to the other Clearing
Organization.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX H

 

* Good Friday: CME open if it is 1st Friday of the Month.

 

CME Holidays

 

NYMEX Holidays

Date

 

Day

 

Holiday Name

 

Date

 

Day

 

Holiday Name

1/2/2006

  Monday   New Year’s Day   1/2/2006   Monday   New Year’s Day

1/16/2006

  Monday   Martin Luther King Jr. Day   1/16/2006   Monday   Martin Luther King
Jr. Day

1/20/2006

  Monday   President’s Day   1/20/2006   Monday   President’s Day

4/14/2006

  Friday   Good Friday   4/14/2006   Friday   Good Friday

5/29/2006

  Monday   Memorial Day   5/29/2006   Monday   Memorial Day

7/3/2006

  Monday   July 3rd *   7/3/2006   Monday   July 3rd* *

7/4/2006

  Tuesday   Independence Day   7/4/2006   Tuesday   Independence Day

9/4/2006

  Monday   Labor Day   9/4/2006   Monday   Labor Day

11/23/2006

  Thursday   Thanksgiving Day   11/23/2006   Thursday   Thanksgiving Day

11/24/2006

  Friday   Friday after Thanksgiving****   11/24/2006   Friday   Friday after
Thanksgiving

12/25/2006

  Monday   Christmas Day   12/25/2006   Monday   Christmas Day

1/1/2007

  Monday   New Year’s Day   1/1/2007   Monday   New Year’s Day

--------------------------------------------------------------------------------

* CME – Monday, July 3, 2006 – Weather Closed

** NYMEX – Monday, July 3, 2006 – Electronic Trading Closed Sunday and Monday
July 2 & 3, reopens 7:00p.m. on July 4)

*** CME – Monday, October 9, 2006 – Columbus Day – Foreign Exchange & Interest
Rates Closed; Commodities, GSCI & Weather – Normal Day

**** CME – Friday, November 24, 2006 – Weather and Dairy Closed.

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX I

CALCULATION OF NET SURPLUS OR NET LOSS FOR LOSS SHARING PURPOSES

The calculation of Net Surplus or Net Loss for loss sharing purposes is in two
steps: 1) an allocation of the proceeds from the liquidation of positions and 2)
an allocation of the proceeds from liquidation of Margin collateral. The
principal concept is to allocate such proceeds to the Offsetting Positions in an
equitable manner.

Written Description of Net Surplus/Net Loss Calculation – Section 7(b) of
Cross-Margining Agreement

(b) . . . Net Surplus or Net Loss on Offsetting Positions shall be determined in
the following manner:

(i) Proceeds from Liquidation of Offsetting Positions:

 

  •  

Proceeds from the liquidation of the long side of market positions (long
futures, long calls and short puts) shall be computed separately from the short
side of market positions (short futures, short calls and long puts). When
positions are liquidated as spread transactions (e.g., as a calendar spread or
an option spread such as a straddle), a fair market price will be attributed to
each leg of the spread to prevent unduly shifting gains or losses from one side
of the market to the other.

 

  •  

Only the proceeds from the side of market that was offset pursuant to this
Agreement at the Last Paid Margin Cycle will be allocated to determine Net
Surplus or Net Loss.

 

  •  

For options (calls and puts), only the net change in value from the Last Paid
Margin Cycle to the liquidation value shall be used to calculate the proceeds
attributable to the liquidation of Eligible Products. The value of the options
from the Last Paid Margin Cycle will be used to establish a liquidation of
Margin collateral value (in the case of long option value) or a liability (in
the case of short option value).

 

  •  

The portion of the proceeds from the liquidation of the Eligible Positions that
will be allocated to the Offsetting Positions will be the portion determined by
multiplying the liquidation proceeds (as determined above) by the percentage
that the number of “futures equivalent” Offsetting Positions are to the total
number of “futures equivalent” Eligible Positions on the side of the market that
was offset. Where “futures equivalent” means the measure of the size of a
portfolio containing futures and/or options on futures, in terms of an
equivalent standard full size futures contract.

 

D-116

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

(ii) Proceeds from the liquidation of Margin collateral associated with
Offsetting Positions:

 

  •  

All Margin collateral held in support of the Defaulting Member’s account will be
liquidated (this includes options in Eligible Products, but may or may not
include options in non-Eligible Products). The value of the options at the Last
Paid Margin Cycle will be used to establish a Margin collateral or liability
value.

 

  •  

The portion of the proceeds from the liquidation of collateral that will be
allocated to the Offsetting Positions, will be the ratio that the Offsetting
Positions contributed to the total SPAN risk requirement at the Last Paid Margin
Cycle. Any Supplemental Margin collected or other unilateral decrease in the
amount of Cross-Margining Reduction given to the Defaulting Member at the Last
Paid Margin Cycle will be considered as an increase in the SPAN Risk
requirement.

 

  •  

In the event that a Clearing Organization unilaterally gave the Defaulting
Member an “Additional Cross-Margining Reduction” as allowed pursuant to
Section 5(c) of this Agreement, then such additional amount shall be added to
both the numerator and the denominator of the above ratio of Offsetting
Positions to the total SPAN risk requirement at the Last Paid Margin Cycle.

(iii) Net Surplus or Net Loss on Offsetting Positions will be the sum of the
7(b)(i) and (ii). In the event that the sum is a positive number, a Net Surplus
will result. In the event that the above result is a negative number, a Net Loss
will result.

CME Numerical Example

A Defaulting Member has the following portfolio at CME: 200 Long GSCI deltas
were offset through cross margining with a spread credit of 80%.

 

Item

   Price @ Last
Paid Margin
Cycle    Value and Delta @
Last Paid Margin
Cycle    Average
Liquidation
Price   

Net Gain/<Loss>

Long 100 June/02 S&P 500

   1072.00       1077.20    100 * 5.2 * 250 = $130,000

Short 300 Aug/02 Live Cattle

   63.20       63.77    -300 * 0.57 * 400 = <$68,400>

Long 500 Jun/02 GSCI Futures

   199.50       203.80    500 * 4.3 * 250 = $573,500

Long 100 May/02 GSCI 200 Call Options

   1.70    0.5 delta $ 42,500    4.00    100 * 2.3 * 250 = $57,500

Short 100 May/02 GSCI Futures

   200.80       203.90    -100 * 3.1 * 250 = <$77,500>

 

D-117

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Allocation of Proceeds from Liquidation of Positions

Using only proceeds from the liquidation of the long side of market positions
for GSCI, allocate proceeds to the 200 GSCI positions spread with NYMEX basket
of energies.

Number of Deltas Cross Margin Spread

Total Number of Deltas on Side of Market that was Cross Margin Spread

= 200 = 36.4%

   550

Surplus or Loss of Long Side of Market Positions for GSCI = Gain on Long 500
Jun/02 GSCI Futures Plus Gain on Long May/02 200 GI Calls.

= $573,500 + $57,500 = $631,000

Proceeds from liquidation of positions allocated to Cross Margin Gain or Loss =
$631,000 * 36.4% = $229,684

Allocation of Proceeds from Liquidation of Collateral

Offsetting Position Contribution to Risk Requirement + any unilateral increase
by CME

in the amount of Cross-Margining Reduction

Total Risk Requirement + any unilateral increase by CME in the amount of
Cross-Margining Reduction

“Offsetting Position Contribution to Risk Requirement” =

(The Number of Deltas Offset * FPSR) – (Cross Margining Reduction) +
Supplemental Margin + (any unilateral decrease in the amount of Cross-Margining
Reduction) – (any unilateral increase in the amount of Cross-Margining
Reduction)

Where FPSR = SPAN Futures Price Scan Range

 

Item

  

Charge or Credit

  

FPSR or charge
per spread

  

Subtotal

  

Note

Long 100 SP

   Scan Risk Charge    $15,750    $1,575,000   

Short 300 LC

   Scan Risk Charge    $600    $180,000   

450 GI deltas

   Charge    $1,4301    $643,500    Net of 100 short May plus 50 deltas from the
options

100 GI Intra spreads

   Charge    $500    $50,000    Cross Margining Reduction on 200 GI vs NYMEX
basket    (Credit)    $1,430 * 80% = $1,144    ($228,800)   

Total Risk Requirement

         $2,219,700   

 

D-118

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

In this example, the Offsetting Position Contribution to the Risk Requirement
would be calculated as follows:

= (200 * $1,430) – (200 * $1,430 * 0.80) + 0 + 0 – 0

=286,000 – 228,800

= $57,200

The proportion of the Total Risk Requirement contributed by Cross Margin
Offsetting Positions would be:

  $57,200   = 2.6%

$2,219,700

As a result 2.6% of the proceeds from the liquidation of margin collateral would
be allocated to the Cross Margined positions. If Margin Collateral were
liquidated to $2,200,000, the allocation to Cross Margin spread positions would
be $57,200. Note: The collateral value of $2,200,000 includes the Long Option
Value of $42,500 from the long 100 May/02 GSCI 200 Call Options.

Net Surplus (or Net Loss) allocated to 200 GSCI deltas Cross Margin spread with
NYMEX

= Allocation of Proceeds from Liquidation of Positions + Allocation of Proceeds
from Liquidation of Collateral

= $229,684 + $57,200

= $286,884 Net Surplus

 

--------------------------------------------------------------------------------

1

$1,430 is lower than $1,500 outright margin requirement on a futures position
because the cross-margined positions contain long options.

 

D-119

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

NYMEX Numerical Example

Two short NYMEX Baskets (100 CL, 26 NG, 26 HO, 24 HU) are offset with Long 200
CME GI contracts. Cross Margin Reduction is capped at $120,000 per basket. NYMEX
has given Cross Margin Reduction of $240,000 plus reduced requirements on the
two baskets an additional $92,800 which additional reduction is not guaranteed
by CME.

 

Item

   Price @ Last
Paid Margin
Cycle    Value and Delta
@ Last Paid
Margin Cycle    Average
Liquidation
Price   

Net Gain/<Loss>

Short 200 June/02 CL

   27.11       27.29    -200 * 0.18 * 1000 = <$36,000>

Short 100 June/02 NG

   3.372       3.795    -100 * 0.423 * 10,000 = <$423,000>

Short 50 June/02 HO

   68.19       69.19    -50 * 1.00 * 420 = <$21,000>

Short 25 June/02 HU

   81.52       81.32    -25 * -0.20 * 420 = $2,100

Total

            <$477,900>

Allocation of Proceeds from Liquidation of Positions

Using only proceeds from the liquidation of the short side of market positions
for NYMEX Basket, allocate proceeds to NYMEX Basket spread with the 200 GI
positions.

Number of Deltas Cross Margin Spread

Total Number of Deltas on Side of Market that was Cross Margin Spread

 

Item

   Total Position
Delta    Delta used in
Cross Margin Spread    Ratio    Total Loss for Commodity
on Side of Market that
was Spread    Loss Allocated to
Cross Margin
Positions

Short 200 June/02 CL

   200    100    50%    <$36,000>    <$18,000>

Short 100 June/02 NG

   100    26    26%    <$423,000>    <$109,980>

Short 50 June/02 HO

   50    26    52%    <$21,000>    <$10,920>

Short 25 June/02 HU

   25    24    96%    $2,100    $2,016

Total

            <477,900>    <136,884>

Total Net Loss for Eligible Products for side of market that was spread =
$477,900 Loss

 

D-120

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

Allocation of proceeds from liquidation of positions allocated to Cross Margin
Gain or Loss = $136,884 Loss

Allocation of Proceeds from Liquidation of Collateral

Allocation=

Offsetting Position Contribution to Risk Requirement + any unilateral increase
by

NYMEX in the amount of Cross-Margining Reduction

Total Risk Requirement + any unilateral increase by NYMEX in the amount of
Cross-Margining Reduction

“Offsetting Position Contribution to Risk Requirement” =

Sum for all basket legs (The Number of Deltas Offset * FPSR) – Cross Margining
Reduction + (any unilateral decrease in the amount of Cross-Margining Reduction)
– (any unilateral increase in the amount of Cross-Margining Reduction)

Where FPSR = SPAN® Futures Price Scan Range

 

Item

   Futures Price
Scan Range    Total Delta
Position    Initial Risk
Requirement*     Deltas Cross
Margin Spread    Risk Requirement
Attributable to
Cross Margin Positions

CL

   $ 2,000    -200    $ 400,000     100    $ 200,000

NG

   $ 4,000    -100    $ 400,000     26    $ 104,000

HO

   $ 2,000    -50    $ 100,000     26    $ 52,000

HU

   $ 2,500    -25    $ 62,500     24    $ 60,000

Total

         $ 962,500 *      $ 416,000

--------------------------------------------------------------------------------

*Total Risk Requirement = $962,500 – $240,000 (Cross Margining Reduction) –
$92,800

(increase in Cross-Margining Reduction not guaranteed by CME)

= $629,700

The Offsetting Positions Contribution to the Total Risk Requirement would be
calculated as follows:

Sum for all basket legs (The Number Deltas Offset * FPSR) – (Cross Margining
Reduction) + (any unilateral decrease in the amount of Cross-Margining
Reduction) – (any unilateral increase in the amount of Cross-Margining
Reduction)

= $416,000 – $240,000 + 0 – $92,800

= $83,200

 

D-121

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

The proportion of the Total Risk Requirement contributed by Cross Margin Offset
positions would be calculated as follows:

= (83,200 + 92,800) / (629,700 + 92,800)

= 176,000 / 722,500

= 24.36%

As a result 24.36% of the proceeds from the liquidation of margin collateral
would be allocated to the Cross Margined positions. If Margin collateral were
liquidated to $1,000,000 the allocation to Cross Margin spread positions would
be $240,360.

Net Surplus (or Loss) allocated to 2 NYMEX baskets spread with CME GI

= Allocation of Proceeds from Liquidation of Positions + Allocation of Proceeds
from Liquidation of Collateral

= <$136,884> + $240,360

= $103,476 Net Surplus

Cross-Margining Equalization Payment (see also Appendix J)

CME Surplus = $286,884

NYMEX Surplus = $103,476

CME pays NYMEX $91,704, resulting in a equal surplus of $195,180 for each
Clearing Organization.

 

D-122

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by “[***Redacted***]”, and the omitted text has
been filed separately with the Securities and Exchange Commission.

 

APPENDIX J

Loss Sharing Scenarios

Example:

 

Loss
Scenarios    CME Net Surplus
or Net Loss on
Offsetting Positions    NYMEX Net Surplus
or Net Loss on
Offsetting Positions   

Loss Sharing Under Loss Equalization

   CME resulting
gain or loss
under equalization    NYMEX resulting
gain or loss under
equalization 1)    Gain 500k    Gain 600k   

NYMEX pays CME 50k to equalize gain of 550k

   550k gain    550k gain 2)    Lose 500k    Gain 600k   

NYMEX pays CME 550k to equalize gain of 50k

   50K gain    50K gain 3)    Lose 500k    Gain 400k   

NYMEX pays CME 450k to equalize loss of 50k

   50k loss    50k loss 4)    Lose 500k    Gain 1,400k   

NYMEX pays CME 950k to equalize gain of 450k

   450k gain    450k gain 5)    lose 1,100k    gain 400k   

NYMEX pays CME 750k to equalize loss of 350k

   350k loss    350k loss 6)    lose 500k    lose 400k   

NYMEX pays CME 50k to equalize loss at 450k

   450k loss    450k loss 7)    lose 2,000k    lose 400k   

NYMEX pays CME 800k to equalize loss at 1,200k

   1,200k loss    1,200k loss 8)    lose 2,000k    lose 900k   

NYMEX pays CME 550k to equalize loss at 1,450k

   1,450k loss    1,450k loss

]