(i)

(ii)

(iii)

(iv)

Upon the written request of a party, the other party within five (5)
business days will designate an authorized representative who
does not devote substantially all of his or her time to performance
under this Agreement, whose task it will be to meet for the purpose
of endeavoring to resolve such dispute.

The designated representatives shall meet as often as the Parties
reasonably deem necessary in order to gather and furnish to the
other all information with respect to the matter in issue that the
Parties believe to be appropriate and germane in connection with
its resolution. The representatives shall discuss the problem and
negotiate in good faith in an effort to resolve the dispute without the
necessity of any formal proceeding.

The specific format for the discussions will be left to the discretion
of the designated representatives, but may include the preparation
of agreed-upon statements of fact or written statements of position.
The Parties agree that any such written statements will be prepared
in connection with settlement negotiations, and as such will be
privileged and shall not be used against the party who prepared
such statement unless it is subsequently introduced by the
preparing party in the formal proceedings.

If the amount in controversy exceeds $50,000 and should the
designated representatives fail to reach agreement within thirty (30)
days of the initiation of the dispute resolution process (or such

longer period as such representatives may agree in writing), then

18


14,

from performing any of its obligations as a result of delays caused by the other

party or by an act of God, war, civil disturbance, court order or other cause

beyond its reasonable control, including failures or fluctuations in electrical or
mechanical equipment, communication lines, heat, light or telecommunications

(‘Force Majeure Event”). The affected party shall give the other party prompt

written notice of any Force Majeure Event and include in the notice a description

of the Force Majeure Event, its effect on the ability of the affected party to
perform its obligations under this Agreement, and the actions the affected party
plans to take to mitigate the effect of the Force Majeure Event. If the affected

party is unable to comply with its obligations under this Agreement due to a

Force Majeure Event not caused by the other party for a period of more than

thirty (30) days, the other party may terminate this Agreement upon written notice

to the affected party. CFE shall not incur payment obligations hereunder to NFA
with respect to any time periods in which NFA is unable to perform its obligations
hereunder due to a Force Majuere Event that is not caused by CFE.

Liability; Indemnification.

(a) NEA. NFA's officers, directors, employees and agents shall have no
responsibility or liability, contingent or otherwise, for any injury or damages
arising in connection with the Regulatory Services provided by NFA to
CFE under this Agreement. Notwithstanding the foregoing, NFA shall
indemnify, defend and hold harmless CFE and its officers, directors,
employees, agents, successors and assignees, in accordance with the
procedures described in Section 14(c), from any and all losses, liabilities,

damages and claims, and all related costs and expenses (including

12


the United States mail, postage prepaid and return receipt requested, (iii)
delivered by a recognized document overnight delivery service or (iv) sent
by telecopy, facsimile, electronic mail or other electronic transmission
service. All notices, invoices or other communications delivered in
accordance with this Section shall be sent to the appropriate address or
number, as set forth below, or to such other address or to the attention of
such other person as the recipient party has specified by prior written
Notice to the sending party. Notices will be deemed given upon personal
delivery, three (3) business days after deposit in the United States mail,
one (1) business day after deposit with an overnight delivery service or
when confirmation of receipt is obtained if sent by telecopy, facsimile,

electronic mail or other electronic transmission service, as applicable.

NFA Contact for Notices
Regarding Regulatory Matters

National Futures Association
Attention: Edward Dasso

200 W. Madison Street
Chicago, IL 60606

Fax No: (312) 781-1520

E-mail: edasso@nfa.futures.org

NEA Contact for Notices
Regarding Contract Matters

National Futures Association
Attention: Karen Wuertz

200 W. Madison Street
Chicago, IL 60606

Fax No: (312) 781-1535

E-mail: kwuertz@nfa.futures.org

22

CFE Contact for Notices
Regarding Regulatory Matters

CBOE Futures Exchange, LLC
Attention: Steven Slawinski
400 South LaSalle Street
Chicago, IL 60605

Fax No.: (312) 786-7982
E-mail: slawinss@cboe.com

CFE Contact for Notices
Regarding Contract Matters

CBOE Futures Exchange, LLC
Attention: Patrick Fay

400 South LaSalle Street
Chicago, IL 60605

Fax No.: (312) 786-7575
E-mail: fayp@cboe.com


necessary to accomplish the development work within seventy-five (75) days
after the Effective Date or, if applicable, an earlier date agreed to by the parties.

Payment of Requlatory Services Fees. CFE will pay for the Regulatory

Services in accordance with the provisions of Schedule B “Fee Schedule for
Regulatory Services,” attached hereto. The charges set forth in Schedule B shall
cover all of the obligations of NFA hereunder, and NFA shail not be entitled to
any compensation from CFE for performing its obligations hereunder other than
as set forth in Schedule B, as otherwise set forth in this Agreement or as
otherwise agreed upon as set forth in Section 16(g). Any changes or
amendments to Schedule B shall be agreed upon as set forth in Section 16(g).
NFA shall invoice CFE on a monthly basis or as otherwise provided in
Schedule B, and CFE will cause each invoice to be paid within thirty (30) days of
the date of receipt of the invoice by CFE or as otherwise provided in Schedule B.
All invoices shall be in writing. In the event that this Agreement is terminated
pursuant to Section 9 or Section 13, CFE agrees to pay NFA for all Regulatory
Services performed through the termination date as set forth in Section 9 or
Section 13 or the date of cessation of services as set forth in Section 10, as the

case may be.

Third Party Software and Equipment Fees. NFA will pay to the appropriate

software and equipment manufacturers, suppliers and distributors all license
fees, royalties, use charges or other payments associated with the technology
utilized in NFA’s development of a market surveillance and trade practice
system.

Quatity Assurance.


(d)

(e)

the President or the President's designee (however designated) of
each party shall attempt to resolve the issue within fifteen (15) days
following such failure.

A formal proceeding for the resolution of a dispute may be commenced

after the earlier of:

(i) the designated representative concluding in good faith that
amicable resolution through continued negotiation of the matter
does not appear likely; or

(ii) thirty (30) days after the initial request to negotiate the dispute, or if
Section 15(b)(iv) applies, twenty (20) days after the matter has
been referred to the President or designee (however designated) of
each party.

This Section will not be construed to prevent a party from instituting, and

each party is authorized to institute, a formal proceeding at any time:

(i) to avoid the expiration of any applicable limitations period;

(ii) to preserve a superior position with respect to other creditors;

(iii) to obtain a temporary restraining order, injunction, or other relief in
the case of any alleged violation of Section 12; or

(iv) to assert a claim for indemnification pursuant to Section 14 in the
event that a third party claim covered by Section 14 is asserted.

Except where clearly prevented by the matter subject to a dispute, both

parties agree to continue performing their respective obligations under this

Agreement while the dispute is being considered pursuant to the dispute

resolution procedures set forth in this Section.

19


(n)

(0)

(p)

Attomeys’ Fees. If any legal action or other proceeding is brought for the
enforcement of this Agreement, the prevailing party shall be entitled to
recover reasonable and documented attorneys’ fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it may be entitled.

Authority. NFA represents and warrants to CFE that NFA has the right to
enter into this Agreement and to provide the Regulatory Services and
perform its obligations hereunder during the term of this Agreement. CFE
represents and warrants to NFA that CFE has the right to enter into this
Agreement and to perform its obligations hereunder during the term of this
Agreement.

Survival. Following any expiration or termination of this Agreement in
accordance with its terms and the expiration of the post-termination
obligations of the parties pursuant to Section 10 and Section 11, all
obligations of each party hereunder shall terminate, except that the
provisions of Sections 8, 12, 14, 15 and 16 shall survive and remain in
effect following any expiration or termination of this Agreement.

Rights and Remedies Cumulative. All rights and remedies of the parties

under this Agreement shall be cumulative and none shall exclude or
prejudice any other right or remedy available to the parties under law or by
virtue of the provisions of this Agreement.

Construction. The language used in this Agreement will be deemed to

be the language chosen by the parties to express their mutual intent, and

25


(c)

(d)

(e)

(ii) NFA may assign its rights and delegate its responsibilities under this
Agreement to an entity that controls, is controlled by or is under common
control with NFA.

Additionally, NFA may not subcontract any of the Regulatory Services
without the prior express written consent of CFE, which shall not be
unreasonably withheld or delayed.

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

Governing Law. The laws of the State of Illinois shall govern the validity,
interpretation and enforcement of this Agreement, as it applies to a
contract executed, delivered and performed solely in such state. Any and
all court proceedings arising from or relating in any manner to any dispute
between NFA and CFE arising out of, relating to or referencing this
Agreement or its breach in any way, shall be brought in, and only in, a
United States federal or Illinois state court sitting in Chicago, Illinois. Each
party hereby consents to the exercise of jurisdiction by such courts and
irrevocably waives any objection that such party may now or later have
based on venue or forum non conveniens with respect to any action
initiated in such courts.

Notices. All notices, invoices or other communications required or
permitted by this Agreement shall be sufficiently given for all purposes

hereunder if given in writing and (i) delivered personally, (ii) deposited in

21


(iii) Consequential/Punitive. Neither CFE nor NFA shall be liable for,
nor will the measure of damages include, any indirect, incidental, punitive,
special, or consequential damages or amounts for loss of income or
profits, even if such damages were foreseeable.

Dispute Resolution. Any dispute between the Parties, either with respect to the

interpretation of any provision of this Agreement or with respect to the

performance hereunder by NFA or CFE, shall be submitted for resolution as
provided in this Section. Prior to the initiation of a suit, action or proceeding in
court, the Parties shall first attempt to resolve their dispute, as follows:

(a) If the dispute is over payment, except as otherwise provided in this
Agreement, NFA may not terminate this Agreement, suspend or refuse to
provide the Regulatory Services due to CFE’s failure to pay NFA any
amount that is reasonably disputed by CFE in good faith so long as (1)
CFE promptly notifies NFA of any disputed amount being withheld from
NFA no later than the deadline for doing so as set forth in Section 9(a)(ii)
and specifies the reasons why that amount is disputed; (2) all such
amounts so withheld are, within ten (10) business days after CFE’s notice
to NFA, deposited into an Escrow Account (as hereinafter defined); and
(3) all amounts not disputed are paid as due and in accordance with the
terms of this Agreement. For purposes hereof, an “Escrow Account” shall
be an interest-bearing account established by CFE in the name of CFE at
a major national bank selected by CFE and reasonably acceptable to
NFA. The funds deposited in the Escrow Account shall remain the

property of CFE subject to the disbursement requirements provided

16


11.

the overdue amount and pays NFA monthly in advance thereafter for the
provision of those Regulatory Services.

CFE may continue to receive the Regulatory Services pursuant to the provisions

of this Section for a period not to exceed four (4) months. In the event that CFE

elects to continue receiving Regulatory Services in accordance with this Section,
then CFE shall give at least forty-five (45) days written notice to NFA of the date
for the cessation of the Regulatory Services.

Termination Assistance. Upon the termination of this Agreement for any

reason:

(a) In order to assist CFE in terminating applicable services and transitioning
those services to another entity, NFA shall provide to CFE the following
services (the “Transition Services”):

(i) NFA and CFE shall prepare in collaboration with each other a
transition plan setting forth the respective tasks to be accomplished
by each party in connection with the orderly transition and a
schedule pursuant to which the tasks are to be completed; and

(ii) NFA shall provide CFE upon request with all data maintained in
NFA’s databases necessary to transfer responsibility for providing
Regulatory Services to another entity as of the date for which
services are no longer rendered by NFA and all of CFE's hard-copy
records maintained by NFA on CFE's behalf. Such data shall be on
magnetic tape or such other medium acceptable to CFE and NFA.

(b) CFE shall pay or reimburse NFA for all costs (“Transition Costs")

reasonably incurred by NFA that are directly attributable to providing these


SCHEDULE A AND SCHEDULE B ARE REDACTED



Proprietary Protection. As between CFE and NFA, NFA shall have sole and
exclusive ownership of all right, title and interest in and to the technology,
systems and equipment purchased or created by it and utilized to perform the
Regulatory Services. NFA agrees that the trading data provided to NFA by CFE
shall be and remain the property of CFE. CFE shall have joint ownership with
NFA of all reports and other materials created by NFA related to CFE regulatory
matters and CFE's regulatory functions, and NFA hereby assigns to CFE joint
right, title and interest in and to those reports and other materials.

Termination Rights.

(a) Default. (i) Except for non-payment of fees, either party may terminate
this Agreement (subject to exhaustion of the dispute resolution procedures
set forth in Section 15) upon written notice to the other party if the other
party materially breaches this Agreement and fails to cure the breach
within ten (10) days following receipt of written notice from the first party
describing the breach. (ii) In the event that NFA does not receive payment
of any invoice, or notice that CFE disputes any amount under the invoice
in accordance with the provisions of Section 15, within thirty (30) days
after the date that payment under the invoice is due: NFA may terminate
this Agreement upon written notice to CFE if CFE fails to make payment of
the full amount overdue, or to dispute in good faith the amount due in
accordance with the provisions of Section 15, within fifteen (15) days
following receipt of written notice from NFA stating that this Agreement is
subject to termination if CFE fails to take one of the foregoing actions

within fifteen (15) days of receipt of the notice by CFE.


(a) | NFA shall promptly report to CFE (i) all material malfunctions in or the
cessation of NFA’s market surveillance and trade practice system
discovered by NFA; (ii) any knowledge of circumstances that could
reasonably result in a material malfunction or lead to a delay in the
performance of the market surveillance and trade practice services; and
(iii) NFA’s proposed solution to (i) and (ii), if any.

(b) | CFE shall promptly report to NFA (i) all material malfunctions in CFE's
trading system discovered by CFE; (ii) any knowledge of circumstances
that could reasonably result in a material malfunction or lead to a delay of
the trading system; and (iii) CFE's proposed solution to (i) and (ii), if any.

Disaster Recovery. NFA shall maintain off-site disaster recovery capabilities

that will permit NFA to recover from a disaster and continue providing services to

CFE within a commercially reasonable time. NFA shall test the operation and

effectiveness of its disaster recovery plan at least annually, which shall include

CFE data and services as part of such test. NFA shall also maintain a backup

power supply system designed to provide an uninterrupted supply of electrical

power, in the event of temporary electrical outages, to the equipment utilized by

NFA to perform the Regulatory Services.

Technical Cooperation. The parties acknowledge that, even after the

development work, each party may have to incorporate new equipment into or

modify their respective technology system(s) that will require testing from time to
time. In implementing and testing new equipment or modifications, both parties
acknowledge that they may require the technical assistance and cooperation of

the other, and both parties agree to provide such assistance and cooperation.


herein. CFE shall pay all costs associated with the Escrow Account. The
Escrow Account shall be established pursuant to an escrow agreement
that provides that the funds therein, including accrued interest, shall be
disbursed to NFA or CFE, as applicable, only in accordance with the
mutual agreement of NFA and CFE or an arbitration or judicial decision
binding on both parties. After resolution of any dispute with respect to the
funds placed in the Escrow Account pursuant to the mutual agreement of
NFA and CFE or an arbitration or judicial decision binding on NFA and
CFE, and after payment from the Escrow Account of all amounts due to
NFA with respect to that dispute, including accrued interest as agreed on
by the parties or awarded in an arbitration or judicial decision, any
remaining portion of the funds that were placed in the Escrow Account
with respect to that dispute, including undisbursed accrued interest
thereon, shall be promptly paid to CFE. If the funds that were placed in
the Escrow Account with respect to the dispute are not sufficient to satisfy
any arbitration or judicial award or mutually agreed amount due to NFA
with respect to that dispute, then CFE shall promptly pay to NFA the
balance due, including accrued interest thereon as agreed on by the
parties or awarded by such arbitration or judicial tribunal.

Every effort should be made to resolve all disputes at the lowest possible
level of authority. If the parties fail to agree through normal channels and
procedures, then the parties shall attempt to resolve any disputes arising

hereunder in the following manner.

17


Regulatory Services, CFE shall have the right to continue receiving the

Regulatory Services as follows:

(a)

(c)

In the event that this Agreement is terminated as a result of a material
default of this Agreement by CFE pursuant to Section 9(a)(i), by CFE
pursuant to Section 9(c), by NFA pursuant to Section 13, or if CFE elects
not to renew this Agreement pursuant to Section 2, CFE shall have the
right to continue receiving the Regulatory Services from NFA after the
expiration or effective termination date, as the case may be, at the fees
set forth in Schedule B except that the monthly service fee shall be an
amount equal to 150% of the monthly fee in effect as of the termination
date.

In the event that this Agreement is terminated as a result of a material
default of this Agreement by NFA pursuant to the provisions of Section
Q(a){i), by NFA pursuant to Section 9(c), by CFE pursuant to Section 9(b),
or if NFA elects not to renew this Agreement pursuant to Section 2, CFE
shall have the right to continue receiving the Regulatory Services from
NFA after the expiration date or effective termination date, as the case
may be, at the fees set forth in Schedule B.

In the event that this Agreement is terminated by NFA pursuant to Section
9(a)(ii) for nonpayment of fees or by NFA pursuant to Section 9(b), CFE
shall have the right to continue receiving the Regulatory Services from
NFA after the effective termination date at an amount equal to 150% of the

monthly fee in effect as of the termination date, but only if CFE pays NFA


(9)

CFE has agreed that certain material events will trigger notification
to NFA. These events are specified on Schedule C “Material Event
Notification,” attached hereto.

Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

Amendments. This Agreement may not be modified or amended except
by an instrument or instruments in writing. Any amendment must refer to
the provisions of this Agreement so affected and be executed by an
authorized representative of both NFA and CFE, and no other act,
document, usage or custom shall be deemed to amend this Agreement.

Schedules; Entire Agreement. The Schedules to this Agreement are

hereby incorporated by reference and made a part hereof. This
Agreement constitutes the entire understanding of the parties with respect
to the subject matter hereof and there are no restrictions, promises,
warranties, covenants or undertakings other than those expressly set forth
or referred to herein. This Agreement supersedes all prior negotiations,
agreements and undertakings between the parties with respect to such
subject matter, including but not limited to confidentiality or non-disclosure

agreements.

23



OP EUTUIPEE PACHANGE

April 6. 2006

Via Electronic Mail

Ms. Jean A. Webb

Secretary

Commodity Futures Trading Commission
Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: CBOE Futures Exchange, LLC Rule Certification
Submission Number CFE-2006-06

Dear Ms. Webb:

Pursuant to Section Sc(c)(1) of the Commodity Exchange Act, as amended ("Act"), and
§40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission
("Commission") under the Act, CBOE Futures Exchange, LLC ("CFE" or "Exchange") hereby
submits (i) the Regulatory Services Agreement ("RSA"), dated as of December 27, 2005, by and
between C and National Futures Association and (ii) new C Rule 216 (“Rule”) relating to
the RSA. The RSA and the Rule will become effective on April 10, 2006 in that the RSA will be
implemented on that date.

CFE is not aware of any substantive opposing views to the RSA or the Rule.

CFE hereby certifies that the RSA and the Rule comply with the Act and the regulations
thereunder.

The RSA is attached hereto as Exhibit A. Schedule A to the RSA and Schedule B to the
RSA have been separately submitted to Commission staff on April 6, 2006 pursuant to a FOIA
confidential treatment request and are redacted from the attached copy of the RSA.

The text of the Rule is set forth below:

kkk

Rule 216. Regulatory Services Agreement with NFA.

The Exchange has contracted with NFA to provide certain regulatory services to the
Exchange pursuant to a Regulatory Services Agreement. In accordance that Agreement. NFA
may perform certain surveillance, investigative. and regulatory functions under the Rules of the
Exchange and the Exchange may provide information to NFA in connection with the
performance by NFA of those functions.

ke RH

A400 South LaSalie Street Chicago. Illino:s 60605-1023 www. cboe.comicfe



(b)

Holders ("TPHs"), and regulatory activities. With respect to NFA, this
information may include, among other things, the type of technology
utilized for NFA's market surveillance and trade practice system and the
details of the methodology of such surveillance. All such confidential or
proprietary information of either party is collectively referred to in this
Agreement as “Proprietary Business Information.”

Both parties agree that when disclosing Propnetary Business Information
to the other each will, to the extent practicable, identify information
considered Proprietary Business Information. To the extent practicable,
written disclosures of Proprietary Business Information shall bear
reasonable legends to that effect. 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. Each party agrees that, except as
expressly authorized by the disclosing party, the receiving party shall not
disclose Proprietary Business Information of the disclosing party to any
person, except the receiving party's representatives (directors, officers,
employees, committee members, agents or advisors, including without
limitation, attorneys, accountants and consultants) who need to know such

information for the foregoing purposes.
{n no event shall the provisions of this Section 12 apply to any information

that: (i) was rightfully known to the receiving party prior to its receipt from

10


Transition Services. Transition Costs shall be billed to CFE at cost and
shall not include a profit margin for NFA. CFE and NFA shall act in good
faith and use reasonable business efforts to minimize and mitigate any
Transition Costs. (i) If this Agreement is terminated pursuant to Section 2,
Section 9(a)(i), Section 9(c), or Section 13 or by CFE pursuant to Section
9(b), NFA shall invoice CFE in arrears for Transition Costs and CFE shall
remit payment in full within thirty (30) days of the date of receipt of the
invoice by CFE. (ii) If this Agreement is terminated as a result of a
material default by CFE pursuant to Section 9(a)(ii) or by NFA pursuant to
Section 9(b), prior to providing these Transition Services, NFA shall
invoice CFE for Transition Costs that NFA reasonably expects to incur and
CFE shall remit payment in full. if CFE fails to remit payment in full within
thirty (30) days of the date of receipt of the invoice by CFE, NFA shall not
be obligated to provide any Transition Services, except that NFA shalt
return to CFE all of CFE’s data maintained in NFA’s databases and all of
CFE's hard-copy records maintained by NFA on CFE’s behalf. Such data
shall be on a medium and in a format that NFA shall determine in its sole

discretion.

12. Confidentiality.

(a)

CFE and NFA each acknowledges that it will receive in connection with
this Agreement confidential or proprietary information of the other party.
With respect to CFE, this information may include, among other things, the
trading data provided to NFA by CFE and information relating to CFE’s

current and proposed business plans, technology, Trading Privilege


One (1) business day in advance of launching a new contract that does
not require changes in or modification to CFE’s trading system, software
programs utilized by CFE's trading system and/or the type and format of
data submitted to NFA.

Thirty (30) days in advance of launching a new contract with new
specifications that requires modest changes in or modification to CFE’s
trading system, software programs utilized by CFE's trading system and/or
the type and format of data submitted to NFA.

At least ninety (90) days in advance of any major change in or

modification to CFE’s trading system, software programs utilized by CFE's
trading system and/or the type and format of data submitted to NFA.

48



Schedule C
Material Event Notification

NFA must be notified prior to the effective date of any amendments and/or
changes to CFE's Bylaws, Rules or Regulations including, but not limited to:
Settlement procedures, Open and Closing Price Determinants, Contract

Specifications, Position Limits, Contract Price Calculations, Trading Sessions,
and Acceptable Orders.

NFA must be notified as soon as reasonably possible of any of the following
events:

1.

Malfunctions (or interruptions) with/to computer system(s), data feed(s),
etc. which may directly or indirectly affect CFE’s trading or NFA's
surveillance activities. This includes any stoppage or cessation of trading
due to circuit breakers or other actions that may be taken by CFE’s Board
of Directors.

2. Any market-wide actions taken (such as liquidation only trading).

3. interactions with the CFTC regarding CFE operational and regulatory
matters, including but not limited to: CFE being a subject of a CFTC
complaint, non-routine requests from the CFTC for documents and rule
enforcement reviews.

4. Interactions with the CFTC regarding CFE rule submissions that relate to
the Regulatory Services.

5. Any material change in the organizational structure of CFE, including
mergers.

6. Any disciplinary proceedings or actions taken by CFE against CFE TPHs
and/or their principals and employees, or that are reported to CFE by
other agencies.

6. Any TPH whose capital position is below that which is required by CFE.

7. Any change in CFE's designated personnel responsible for Market
Supervision.

8. Any complaints received by CFE. The promptness of this notification

should be based upon the severity of the complaint.

Unless otherwise agreed, CFE agrees to notify NFA as far in advance as
possible, but no later than the time parameters set forth below, of any of the
following events:

47


10.

(b) Bankruptcy. This Agreement may be terminated immediately by either
party by written notice to the other party upon the occurrence of any of the
following events affecting the other party:

{i) The other party admits its inability to pay its debts generally as they
become due, or makes an assignment for the benefit of its
creditors;

(ii) Proceedings 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, are commenced by the other
party, or are commenced against such party and are not
discharged within sixty (60) days of their commencement; or

(iii) | A receiver or trustee is appointed 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 days of his or
her appointment, or such proceedings are not discharged within
sixty (60) days of their commencement.

(c) Convenience. This Agreement may be terminated by either party upon
written notification of termination given at least three (3) months before the
effective termination date.

Limited Right to Continuance of Services. Unless otherwise specified, upon

the effective termination or expiration date of this Agreement, if CFE is unable to

engage another entity able to provide services to CFE comparable to the


16.

(f)

Nothing contained in this Section 15 shall be deemed to prevent, hinder or
delay the exercise of any right of any party to terminate this Agreement for

convenience as provided elsewhere in this Agreement.

Miscellaneous.

(a)

(b)

Headings. The Section headings herein are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.

Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that no party hereto will assign its rights
or delegate its obligations under this Agreement without the express prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, NFA .
and CFE may assign its rights or delegate its obligations under this
Agreement without the prior express written consent of the other as
follows:

(i) if an entity that is a party to a Regulatory Services Agreement with NFA
succeeds to CFE’s business existing at that time as a designated contract
market (“Successor Entity”), including any successor by merger or other
business combination, CFE may assign its rights and delegate its
responsibilities under this Agreement to the Successor Entity regardless of
whether CFE continues to exist and regardless of whether the Successor

Entity controls, is controlled by or is under common control with CFE;

20


no rule of strict construction shall be applied against any party. Any

reference to any federal, state, local or foreign statute or law shall be

26


exchange-traded funds and narrow-based indexes, the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, each as in effect
from time to time, and any and all other applicable requirements from time to time
of the Securities and Exchange Commission ("SEC"); and (iv) directions arising
from consultations between CFE and NFA. Unless specifically provided for in
this Agreement that NFA shall provide a particular Regulatory Service, CFE shall
provide all services and resources necessary to meet its regulatory requirements.
Any changes or amendments to the Regulatory Services for which CFE shall
incur fees pursuant to Schedule B shall be agreed upon as set forth in Section
16(g).

Term. This Agreement shall commence upon the Effective Date and, unless
sooner terminated in accordance with the terms set forth in Section 9 or Section
13, shall terminate thirty-six (36) months after the date that NFA begins providing
Regulatory Services for CFE. This Agreement shall automatically renew for one-
year terms unless either NFA or CFE notifies the other in writing at least four
months prior to the expiration of the initial term or any renewal term of its
decision not to renew.

NFA and CFE acknowledge and agree that, after the Effective Date, the
parties will be engaged in pre-launch development work with respect to the
Regulatory Services. The purpose of this development work is to ensure that
NFA's market surveillance and trade practice monitoring system is properly
tested and evaluated for conformity with CFE’s business requirements. The

parties agree to cooperate and use reasonable efforts to perform the tasks


reasonable attorney fees), arising from the reckless, wanton, malicious or
intentional tortious acts or omissions or gross negligence on the part of
NFA or its officers, directors, employees and/or agents.

CFE. CFE's officers, directors, employees and agents shall have no
responsibility or liability, contingent or otherwise, for any injury or damages
arising in connection with the performance of its obligations under this
Agreement and its operation as a contract market. Notwithstanding the
foregoing, CFE shall indemnify, defend and hold harmless NFA and its
officers, directors, employees, agents, successors and assignees, in
accordance with the procedures described in Section 14(c), from any and
all losses, liabilities, damages and claims, and all related costs and
expenses (including reasonable attorney fees), arising from the reckless,
wanton, malicious or intentional tortious acts or omissions or gross
negligence on the part of CFE or its officers, directors, employees and/or
agents.

Procedure. If any third party shall notify a party hereto (the "Indemnified
Party”) with respect to any matter which may give rise to a claim for
indemnification against any other party (the “Indemnifying Party’), then the
Indemnified Party shall notify the Indemnifying Party promptly; provided,
however, that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any liability or
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is damaged. !In the event any Indemnifying

Party notifies the Indemnified Party that it is assuming the defense thereof,

13


(d)

admission of, fault, culpability or failure to act by or on behalf of the

Indemnified Party.

Liability Limits; Consequential and Punitive Damages.

(i) NFA. With respect to any and all actions brought by CFE against NFA,
whether in contract, tort or otherwise, NFA’s aggregate liability hereunder
to CFE for damages for breach of this Agreement by NFA shall be
expressly limited to direct damages in an amount not to exceed $500,000.
This limitation shall apply in the aggregate to all claims occurring during
the initial term or any renewal term, where the term “claim” means all
claims arising out of each accident, happening, or event, (whether
damages were foreseeable or not, whether the conduct was intended or
not, and regardless of the number of days involved), which causes
damage to CFE.

(ii) CFE. With respect to any and all actions brought by NFA against
CFE, whether in contract, tort or otherwise, CFE’s aggregate liability
hereunder to NFA for damages for breach of this Agreement by CFE shall
be expressly limited to direct damages in an amount not to exceed
$500,000. This limitation shall apply in the aggregate to all claims
occurring during the initial term or any renewal term, where the term
“claim” means all claims arising out of each accident, happening, or event,
(whether damages were foreseeable or not, whether the conduct was
intended or not, and regardless of the number of days involved), which

causes damage to NFA.

15


a

EXHIBIT A

REGULATORY SERVICES AGREEMENT

This Regulatory Services Agreement (“Agreement”) is dated as of Decenber
(the “Effective Date”), by and between CBOE Futures Exchange, LLC

(“CFE”), a Delaware Limited Liability Company, and National Futures Association
(“NFA”), a Delaware not-for-profit Corporation.

RECITALS

WHEREAS, NFA is a self-regulatory organization for the commodity

futures industry and provides regulatory services in connection therewith; and

WHEREAS, NFA desires to provide certain regulatory services to CFE

and CFE desires to have NFA provide it with such regulatory services.

NOW, THEREFORE, in consideration of the recitals and for good and

valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows: .

1.

Services. During the term of this Agreement, NFA shall provide to CFE only the
regulatory services having the specifications described in Schedule A “Scope of
Regulatory Services” (“Regulatory Services”), attached hereto, provided that CFE
supplies NFA with all necessary data in a form acceptable to NFA to perform
those services. The Regulatory Services shall be rendered by NFA with proper,
sufficient and reasonable care and will be in accordance with: (i) CFE’s rules,
interpretations and policies, and circulars and instruments corresponding to any
of the foregoing, in each case as amended from time to time by CFE; (ii) the
Commodity Exchange Act, as amended, and the rules and regulations
thereunder, each as in effect from time to time, and any and all other
requirements from time to time of the Commodity Futures Trading Commission

(‘CFTC’); (iii) to the extent applicable with respect to security futures on


(i)

@)

{k)

No Third Party Beneficiaries. This Agreement is not intended to and

shall not be construed to give any person or entity, other than the parties
hereto, any interest, rights, or remedies (including, without limitation, any
third party beneficiary rights) with respect to or in connection with this
Agreement or any agreements or provisions contemplated hereby.
Relationship of Parties. NFA, in furnishing services to CFE under this
Agreement, is acting only as an independent contractor. Except as
expressly provided in this Agreement, NFA does not undertake by this
Agreement or otherwise to perform any obligations of CFE, whether
regulatory or contractual, or to assume any responsibility for CFE’s
business or operations.

Publicity; Trade Reference. Before using CFE’s name as a trade
reference or for publicity, marketing, or advertising, NFA shall obtain
CFE’s prior written consent, which shall not be unreasonably withheld or
delayed. Likewise, prior to CFE using NFA's name as a trade reference or
for publicity, marketing, or advertising, CFE shall obtain NFA’s prior written
consent, which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, either party may publicly identify NFA as a
regulatory service provider to CFE without the prior written consent of the
other party. Additionally, a party may publicly disseminate, and is not
required to resubmit to the other party for review and approval, any
materials that are substantially similar to materials previously approved by

the other party.

24


Ms. Jean A. Webb
Page 2 of 2

Questions regarding this submission may be directed to Arthur Reinstein at (312) 786-
7570. Please reference our submission number CFE-2006-06 in any related correspondence

CBOE Futures Exchange, LLC

‘awick J. Fay
Managing Director

ce: Riva Adriance
Mark Baumgardner (OCC)
Edward Dasso (NFA)


deemed also to refer to all rules and regulations promulgated thereunder,

unless the context require otherwise.

IN WITNESS WHEREOF., the parties have caused this Agreement to be
executed in their names as of the date above written.

NATIONAL FUTURES ASSOCIATION CBOE FUTURES EXCHANGE, LLC

BucDL QM _woRe=— *

" Rathorized Represeniative gS a a

Name: Dan el J Roth Name: TVA rece On fay
tite: Presdent © CEO tite: Phere we Lh ein

Date: December a], 2005 Date: © Vee eueen 227007

27



the disclosing party in connection with this Agreement, or becomes
rightfully known to the receiving party other than in connection with 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; (iv)
is independently developed by the receiving party without use of any
confidential or proprietary information of the disclosing party; (v) is
disclosed in accordance with CFE's regulatory processes; or (vi) is
disclosed with the approval of the disclosing party. Notwithstanding
anything in Section 12(b) to the contrary, each party may disclose any
Proprietary Business Information received by it to the extent that it is
required by subpoena or other order of court, law or other regulation, or
required or requested by any governmental or regulatory authority having
jurisdiction, to furnish such Proprietary Business Information; provided
that, in any such case, the receiving Party shall provide the disclosing
party with prompt notice thereof prior to making any such disclosure so
that the disclosing party may seek an appropriate protective order or
confidential treatment. In the absence of a protective order or confidential
treatment, if the receiving party is nonetheless, in the opinion of its
counsel, compelled to furnish Proprietary Business Information to any third
party or else stand liable for contempt or suffer other censure or penalty,
the receiving party may furnish such information without liability under this

Section 12 or otherwise.

13. | Force Majeure. Each party shall be excused from performance under this

Agreement and shall have no liability to the other for any period it is prevented

1


(i)

(ii)

(iii)

the Indemnifying Party will defend the Indemnified Party against the
matter with counsel of its choice reasonably satisfactory to the
Indemnified Party;

the Indemnified Party may retain separate co-counsel at its sole
cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of the separate co-counsel
to the extent the Indemnified Party concludes reasonably that (1)
the counsel the Indemnifying Party has selected has a conflict of
interest or (2) there is an actual or potential conflict of interest
between the Indemnified Party and the Indemnifying Party with
respect to the matter such that counsel selected by the
Indemnifying Party cannot represent both the Indemnified Party and
the Indemnifying Party without waivers of such conflict);

the Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party, which consent will not be
withheld or delayed unreasonably, and;

the Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the matter without the
written consent of the Indemnified Party, which consent will not be
withheld or delayed unreasonably, unless the resolution (a) is
limited solely to monetary damages, (b) includes an unconditional
release of the Indemnified Party from all liability arising out of the

matter, and (c) does not include any statement as to, or any

14