Document:

EX-10.12

 

Exhibit 10.12

AMENDMENT & RESTATEMENT

AGREEMENT

	 	 	 	 	 
	 	Date
	9th October 2003	 	 
	 	 	 	 

BETWEEN

The London Clearing House Limited (“LCH”)

of Aldgate House, 33 Aldgate High Street, London EC3N 1EA, UK

AND

IntercontinentalExchange Inc. (“ICE”)

of 2100 RiverEdge Parkway, Fifth Floor, Atlanta, GA 30328, USA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain
information in this agreement has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

INDEX

	 	 	 	 	 
	1.
	 	Interpretation	 	page 2
	2.
	 	Commencement	 	page 6
	3.
	 	Appointment to provide central counterparty services	 	page 7
	4.
	 	LCH Membership, Documentation and related matters	 	page 8
	5.
	 	Provision of Transaction Data	 	page 12
	6.
	 	Registration of LCH EnClear Contracts	 	page 12
	7.
	 	Eligible Derivative Products	 	page 13
	8.
	 	Settlement of LCH EnClear Contracts	 	page 21
	9.
	 	Default	 	page 22
	10.
	 	Margin	 	page 24
	11.
	 	Amendments to the Regulations and to ICE Documentation	 	page 26
	12.
	 	Systems Interfaces	 	page 28
	13.
	 	Record Keeping and information	 	page 30
	14.
	 	Charges, costs and expenses	 	page 30
	15.
	 	Confidentiality	 	page 32
	16.
	 	Trade emergencies and market disorder	 	page 35
	17.
	 	Period for acceptance of LCH EnClear Transactions arising in respect of Designated Trades	 	page 36
	18.
	 	Contract Terms	 	page 36
	19.
	 	Default Fund	 	page 37
	20.
	 	Assignment and delegation	 	page 37
	21.
	 	Termination	 	page 38
	22.
	 	Amendment	 	page 42
	23.
	 	Filings	 	page 43
	24.
	 	Additional assurance	 	page 43
	25.
	 	Warranty of capacity and power	 	page 43
	26.
	 	Liability	 	page 45
	27.
	 	Force Majeure	 	page 47
	28.
	 	Instructions	 	page 49
	29.
	 	Illegality	 	page 50
	30.
	 	Severability	 	page 51
	31.
	 	Notices	 	page 51
	32.
	 	Waivers	 	page 51
	33.
	 	Remedies Cumulative	 	page 51
	34.
	 	Entire Agreement	 	page 52
	35.
	 	Legal Relationship	 	page 52
	36.
	 	No rights under Contracts (Rights of Third Parties) Act 1999	 	page 52
	37.
	 	Number of counterparts	 	page 53
	38.
	 	Governing law and jurisdiction	 	page 53
	39.
	 	Dispute Resolution	 	page 53

	 	 	 
	Schedule 1
	 	Notices
	Annex 1
	 	The Services
	Annex 2
	 	New Product Notice
	Annex 3
	 	The Initial Products

 

THIS AMENDMENT AND RESTATEMENT AGREEMENT is made on

October 2003

Between

The London Clearing House Limited (“LCH”)

of Aldgate House, 33 Aldgate High Street, London EC3N 1EA, UK

and

IntercontinentalExchange Inc. (ICE”)

of 2100 RiverEdge Parkway, Fifth Floor, Atlanta, GA 30328, USA

WHEREAS

	(A)  	ICE operates a trading system which can be used by its participants for trading certain
derivative products, and has filed the required notice with the Commodity Futures Trading
Commission (“CFTC”) of the United States in order to claim exemption from the Commodity
Exchange Act (“CEA”) of the United States, and CFTC regulation as an exempt commercial market
in respect of the Trading System and has received acknowledgement from the CFTC of such
filing.
	 
	(B)  	LCH carries on the business of a Recognised Clearing House authorised under the Financial
Services and Markets Act 2000, and provides central counterparty and other services to its
members, and has been registered by CFTC as a Derivatives Clearing Organisation (“DCO”)
pursuant to Sections 5b of the CEA for the purpose of clearing OTC derivatives contracts,
agreements and transactions excluded or exempt under Sections 2(c), 2(d), 2(f), 2(g) or 2(h)
of the CEA or that are OTC derivative instruments as defined in Section 408 of the Federal
Deposit Insurance Corporation Improvement Act 1991 of the United States.
	 
	(C)  	LCH and ICE entered into an agreement (“the Original Agreement”) dated 15 March 2002 in which
ICE appointed LCH to provide central counterparty services in respect of certain transactions
executed through or entered in the trading

 

	   	system, and the parties agreed certain provisions
in respect of the provision of such services.
	 
	(D)  	On 13 March 2003 the Parties entered into a further agreement (“the Amendment Agreement”) in
order to amend the Original Agreement.
	 
	(E)  	The Parties now wish further to amend the Original Agreement and to restate some of the terms
of the Original Agreement and to this end now enter into this Amendment and Restatement
Agreement. This Amendment and Restatement Agreement supersedes and replaces the Original
Agreement and the Amendment Agreement with effect from the Effective Date (as defined
hereinbelow).

IT IS AGREED AS FOLLOWS -

Interpretation

	1.1     	In this Agreement the following expressions shall have the following meanings -

	   	Business Day means any day on which commercial banks in both New York State and England are
generally open for general banking business, other than 1 January, 25 and 26 December;
	 
	   	CFTC means the United States’ Commodity Futures Trading Commission;
	 
	   	Clearing Day means any London day, as published from time to time by LCH, upon which LCH is
open for the presentation of particulars of Designated Trades for registration by LCH;
	 
	   	Clearing Membership Agreement shall have the same meaning as in the Regulations;
	 
	   	Commencement Date means the day on which LCH begins to provide the Services, which date
shall be no later than 18 March 2002 unless the Parties hereto mutually agree to extend such
date;

Page 2

 

	   	Customer means any customer or other party pursuant to whose trading activity a Designated
Trade arises either directly or indirectly;
	 
	   	Default shall have the same meaning as in the Regulations;
	 
	   	Default Notice in relation to LCH, has the meaning given in the Regulations;
	 
	   	Default Rules means LCH’s Default Rules, which form part of the Regulations;
	 
	   	Delegated Functions has the meaning given in sub-paragraph 15.4;
	 
	   	Default Fund has the same meaning as in the Regulations;
	 
	   	Designated Trade means a trade in an Eligible Derivative Product which (i) has been executed
through the Trading System, and which gives rise to a transaction, the details of which are
forwarded by the Trading System for registration by LCH, in accordance with the Regulations;
or (ii) is an Off Market Trade, the details of which are entered into the Trading System in
accordance with the ICE Documentation, for registration by LCH in accordance with the
Regulations;
	 
	   	Effective Date means the date upon which this is Agreement is executed by both Parties, or,
if executed on different dates by each of the Parties the later of such dates;
	 
	   	Eligible Derivative Product means any ICE Product which is or at any time in the future
becomes eligible, in accordance with this Agreement and the Regulations for registration by
LCH;
	 
	   	Energy Product means contracts, including but not limited to options, futures, swaps and
forwards, over or in respect of oil and oil products, coal, natural gas, electricity or any
other similar energy products;
	 
	   	Fee Moratorium Period means the period commencing on the Effective Date and ending on 15
March 2006;
	 
	   	FSA means the United Kingdom’s Financial Services Authority;

Page 3

 

	   	Fund Amount, and Exchange Fund Amount have the same meaning as in the Regulations;
	 
	   	Group has the same meaning as in the Companies Act 1985 and Group of Companies means
companies which are in the same Group;
	 
	   	ICE Documentation means the terms and conditions, agreements, procedures, user guides,
requirements, and other documentation which govern the relationship between
ICE and each of its Participants, including, without prejudice to the generality of the
foregoing, any terms adopted by the board of directors of ICE or by any committee thereof;
	 
	   	ICE Product means a product which is or at any time in the future becomes available for
trading through the Trading System;
	 
	   	ICE Third Party Clearing Agreement means the agreement entitled “LCH EnClear Third Party
Clearing Agreement for use by ICE Participants”, in a form to be agreed between the Parties,
as prescribed from time to time by LCH in relation to the Services;
	 
	   	IPE means The International Petroleum Exchange of London Limited whose registered office is
at International House, 1 St. Katharine’s Way, London E1W 1UY, UK;
	 
	   	LCIA means the London Court of International Arbitration, The International Dispute
Resolution Centre, 8 Breams Buildings, Chancery Lane, London EC4A IHP, UK;
	 
	   	LCH Clearing Approval means any agreement or other document (other than a Clearing
Membership Agreement) under which LCH agrees to provide the Services to any LCH Member;
	 
	   	LCH EnClear Clearing Member means an LCH Member authorised by LCH to receive the Services;

Page 4

 

	   	LCH EnClear Contract means an LCH EnClear Contract as defined by the Regulations and which
has arisen, in accordance with the Regulations, from an LCH EnClear Transaction submitted to
LCH for registration;
	 
	   	LCH EnClear Transaction means a transaction arising from a Designated Trade and which is
eligible in accordance with the Regulations for registration by LCH;
	 
	   	LCH General Policy means the general policy which LCH uses with regard to the markets for
which it provides central counterparty services, which is to treat all markets substantially
equally, except to the extent that LCH reasonably determines that the requirements
applicable to a market must be tailored to meet the characteristics and
needs of the particular market place, or to ensure and maintain standards that do not
adversely affect LCH’s risk, or to maintain the integrity and security appropriate to the
relevant market;
	 
	   	LCH Member means a member of LCH;
	 
	   	Off Market Trade means a trade in an Eligible Derivative Product which is executed outside
the electronic part of the Trading System by two ICE Participants in accordance with the ICE
Documentation;
	 
	   	Participant means a person authorised by ICE to use the Trading System for the execution of
trades;
	 
	   	Parties means the parties to this Agreement and “Party” shall be construed as a reference to
either of them as the context so demands;
	 
	   	Procedures means the procedures which form part of the Regulations;
	 
	   	Product Group means a group of Eligible Derivative Products agreed as such from time to time
by the Parties;
	 
	   	Regulations means the General Regulations, Default Rules and Procedures of LCH, as amended
from time to time and any reference to a Regulation shall be construed as a reference to the
relevant General Regulation;

Page 5

 

	   	Services means the central counterparty services as set out in Annex 1 hereto to be provided
by LCH under this Agreement or as otherwise agreed by ICE and LCH;
	 
	   	Third Party Clearing Participant means a Participant which is not an LCH EnClear Clearing
Member but who has executed and is maintaining a valid ICE Third Party Clearing Agreement;
	 
	   	Trading System means the trading system or systems operated now or from time to time by ICE
which permits quote and order entry and automated execution of trades by Participants and
includes the arrangements for the forwarding to LCH for registration of those Designated
Trades which are Off Market Trades;
	 
	   	Transaction Data has the meaning given in sub-paragraph 15.3;
	 
	1.2  	In this Agreement unless the context otherwise requires -
	 
	(a)  	the headings are inserted for convenience only and do not affect the construction of the
Agreement;
	 
	(b)  	any reference to a rule, an enactment or a statutory provision is a reference to it as it may
have been, or may from time to time be amended, modified, consolidated, re-enacted or
replaced;
	 
	(c)  	any reference to any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court official or any other legal concept is, in
respect of any jurisdiction other than England, deemed to include the legal concept or term
which most nearly approximates in that jurisdiction to the English legal term.

Commencement

	2.1  	This Agreement shall commence on the Effective Date and shall continue in force until
terminated in accordance with the provisions of paragraph 21 hereof or otherwise by law.

Page 6

 

	2.2  	The Parties agree that on the Effective Date the Original Agreement and the Amendment
Agreement shall terminate and cease to have any force and effect, being superseded and
replaced by this Amendment and Restatement Agreement (“this Agreement”).

Appointment to provide central counterparty services

	3.1  	Subject to ICE’s rights as set out in paragraph 7 below, ICE hereby appoints LCH, on the
terms and subject to the conditions of this Agreement, to be exclusive provider of central
counterparty services (“the Services”) in respect of Designated Trades. LCH hereby accepts
such appointment and undertakes to provide the Services on the terms and subject to the
conditions of this Agreement.
	 
	3.2  	LCH undertakes to comply with all such parts of its Regulations as are relevant to the
provision of the Services and to its obligations under this Agreement, and ICE
undertakes to comply with all such parts of the ICE Documentation as are relevant to
Designated Trades and to comply with its obligations under this Agreement.
	 
	3.3  	ICE acknowledges that LCH is subject to the supervision of the FSA and the jurisdiction of
the CFTC. ICE agrees that, notwithstanding any provision to the contrary contained in this
Agreement, upon request by LCH, it will use its reasonable endeavours to take any action or
refrain from taking any action as may be required by the FSA, the CFTC or any regulator to
whose jurisdiction or supervision LCH may from time to time become subject in order to comply
with its obligations to such regulator.
	 
	3.4  	LCH acknowledges that ICE is subject to the jurisdiction of the CFTC and certain of ICE’s
subsidiaries currently are or will be subject to supervision of the FSA. LCH agrees that,
notwithstanding any provision to the contrary contained in this Agreement, upon request by
ICE, it will use its reasonable endeavours to take any action or refrain from taking any
action as may be required by the CFTC or the FSA or any other regulator to whose jurisdiction

Page 7

 

	  	or supervision ICE may from time to time become subject in order to comply with its
obligations to such regulator.
	 
	3.5  	LCH shall at all times be entitled to provide services in relation to trades executed on
other trading platforms or trading systems operated otherwise than by ICE in respect of
energy, related products, or without limitation, other products.
	 
	3.6  	LCH agrees that [***].
	 
	3.7  	CH shall apply the LCH General Policy to the allocation of LCH’s staff and resources in the
performance of the Services. For the purposes of this subparagraph 3.7, ICE and the IPE shall
be treated as a single unit.

LCH Membership, Documentation and related matters

	4.1  	Any Participant which is not an LCH Member will be eligible to become an LCH EnClear Clearing
Member, subject to such entry and other requirements as may be set out in the Regulations.
	 
	4.2  	In establishing or amending any requirements under the Regulations that are applicable to the
Services, including but not limited to those requirements applicable to LCH EnClear Clearing
Members or Participants or applicants for Participant status applying to become LCH EnClear
Clearing Members, LCH will adhere to LCH General Policy. LCH will consult with ICE with regard
to any amendment to existing entry or other requirements which might have a disproportionate
adverse effect on LCH EnClear Clearing Members or on Participants or applicants for
Participant status applying to become LCH EnClear Clearing Members, will give due
consideration to the views of ICE
	 
	

	***  	Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.

Page 8

 

	   	and will only make such amendments as are consistent with
LCH General Policy.
	 
	4.3  	ICE agrees to amend the ICE Documentation to provide that a Participant shall only be
eligible to submit orders or other trade particulars (“Trading Platform Particulars”) in
Eligible Derivative Products with a view to the execution, directly or indirectly, of
Designated Trades or to be party to any Designated Trade if that Participant is: –
	 
	4.3.1  	an LCH EnClear Clearing Member; or
	 
	4.3.2  	a Third Party Clearing Participant; or
	 
	4.3.3  	the Customer of an EnClear Clearing Member or Customer of a Third Party Clearing
Participant; or
	 
	4.3.4  	party to some other agreement with an LCH EnClear Clearing Member and such other persons and
LCH, as may be agreed from time to time between the Parties
	 
	   	providing always that only a Participant which is an LCH EnClear Clearing Member or Third
Party Clearing Participant may be party to any Designated Trade.
	 
	4.4.1  	Subject to sub-paragraph 4.11, if LCH declines to give an LCH Clearing Approval to an
LCH Member, it shall notify ICE as soon as reasonably practicable, identifying the reasons
why.
	 
	4.4.2  	Subject to sub-paragraph 4.11, if LCH declines to enter into a Clearing Membership Agreement
with a Participant or an applicant for Participant status on ICE, it shall notify ICE as soon
as reasonably practicable. Insofar as it is reasonably practicable so to do, LCH shall
identify to ICE the reasons why it has so declined but only insofar as such reasons relate to
the provision of the Services to such Participant or applicant.

Page 9

 

	4.4.3  	LCH shall act in good faith and in accordance with the Regulations and adhere to LCH General
Policy in declining to give an LCH Clearing Approval to an LCH Member, or in declining to
enter into a Clearing Membership Agreement with a Participant or applicant for Participant
status.
	 
	4.5  	Without prejudice to LCH’s powers under the Default Rules, LCH shall give ICE not less than
one Business Day’s prior notice of its intention to withdraw an LCH Clearing Approval from any
LCH EnClear Clearing Member and shall identify the reasons for that withdrawal, providing
always that:
	 
	4.5.1  	LCH shall act in good faith and in accordance with the Regulations and adhere to LCH General
Policy in withdrawing any such LCH Clearing Approval; and
	 
	4.5.2  	Nothing in this sub-paragraph 4.5 shall require LCH to give such notice or adhere to LCH
General Policy when LCH exercises or is contemplating the exercise of its powers under the
Default Rules.
	 
	4.6  	Without prejudice to clause 4.5, LCH shall notify ICE as soon as reasonably practicable of:
	 
	4.6.1  	the termination of any Clearing Membership Agreement where the LCH Member was, immediately
before such termination, an LCH EnClear Clearing Member;
	 
	4.6.2  	the termination of any ICE Third Party Clearing Agreement or other agreement to which clause
4.3.4 refers.
	 
	4.7  	ICE may at any time introduce new categories or classes of participation or modify or alter
existing rights, privileges or obligations of an existing category or class of participation
with regard to the Trading System, provided that where such introduction, alteration or
modification is reasonably likely materially to affect the provision of the Services by LCH,
ICE shall as soon as reasonably practicable, advise LCH of its proposal to make such
introduction, alteration or modification, and shall thereafter consult with LCH. ICE shall

Page 10

 

	   	give to LCH no less than ten (10) Business Days written notice of its intention to make such
introduction or modification or alteration.
	 
	4.8  	In the event that LCH reasonably determines that any introduction, modification or alteration
as described in sub-paragraph 4.7 above will materially adversely affect its ability to
provide the Services in accordance with this Agreement and the Regulations or is reasonably
likely to affect its risk adversely, LCH may, by giving written notice to ICE within ten (10)
Business Days after the expiry of the notice period referred to in sub-paragraph 4.7 above,
decline to register any Designated Trades presented by or having any connection to any
Participant in any such new category or class of participation or in respect of whose class of
participation existing rights, privileges or obligations are about to be or have been modified
or altered.
	 
	4.9  	Neither party shall make any public announcement regarding any intention on the part of ICE
to take any action as described in sub-paragraph 4.7 above unless such announcement shall have
been agreed by both ICE and LCH.
	 
	4.10.1  	A Third Party Clearing Participant shall not be entitled to enter into any LCH EnClear
Contract with LCH and ICE acknowledges and agrees that only LCH EnClear Clearing Members shall
be entitled to enter into LCH EnClear Contracts with LCH in respect of LCH EnClear
Transactions. In all dealings between LCH EnClear Clearing Members and LCH (including those
originated by Third Party
Clearing Participants) LCH EnClear Clearing Members shall act as principal and ICE shall
make provision in the ICE Documentation that all contracts entered into between those of
its Participants who are LCH EnClear Clearing Members and LCH shall be made by each such
person as principal and not as agent at any time.
	 
	4.10.2  	For the avoidance of doubt, the Parties agree that the obligations of ICE pursuant to
sub-paragraph 4.10.1 shall be limited to ensuring that the provisions of sub-paragraph 4.10.1
shall be materially replicated in the ICE Documentation and that nothing in the ICE
Documentation or other written

Page 11

 

	   	material published in electronic, paper or oral form by or on
behalf of ICE shall contradict the statements made in the provisions of sub-paragraph 4.10.1.
	 
	4.11  	Nothing in this paragraph 4 shall require either party to provide any information or data to
the other which may reasonably be expected to breach any obligation of confidentiality owed by
the first party to any person.

Provision of Transaction Data

	5.1  	No later than 10 p.m. London time on each Clearing Day ICE shall provide LCH with a full,
complete and accurate account (in such form and with such content as shall be agreed from time
to time by the Parties) of the particulars of all LCH EnClear Transactions arising in the
course of that Clearing Day. The Parties agree that LCH may register any LCH EnClear Contracts
arising therefrom in accordance with such particulars notwithstanding that any such
particulars may be inconsistent, inaccurate, incomplete or corrupted.
	 
	5.2  	Particulars of any LCH EnClear Transaction which are presented by or on behalf of ICE for
registration by LCH, pursuant to sub-paragraph 5.1 or otherwise, shall be deemed to be
presented by the LCH EnClear Clearing Members in whose names they are presented to LCH.
	 
	5.3  	LCH shall be under no duty or obligation whatsoever to verify the accuracy or completeness of
such particulars referred to in this paragraph 5 and presented to LCH pursuant to this
paragraph 5 or otherwise.
	 
	5.4  	If requested by ICE, LCH shall provide to ICE a full, complete and accurate record of all LCH
EnClear Contracts registered by LCH on the preceding Clearing Day in such form as may be
agreed from time to time by the Parties.

Registration of LCH EnClear Contracts

	6.1  	LCH undertakes that it will not decline to register an LCH EnClear Transaction otherwise than
in accordance with this Agreement, the Regulations or as required by law or the order of any
United Kingdom court or

Page 12

 

	   	regulatory authority having jurisdiction over it, or in the
circumstances described in sub-paragraph 6.3 below.
	 
	6.2  	If LCH declines to register a Designated Trade it shall promptly notify ICE in accordance
with such procedures as may be agreed between the Parties and, wherever practicable, LCH shall
identify the reasons for declining to register such trade.
	 
	6.3  	If as a result of any malfunction, breakdown or other failure in LCH’s computer systems or in
the electronic communication link between ICE and LCH or for any other reason there is a delay
of which LCH is aware generally in the registration by LCH of LCH EnClear Transactions, LCH
shall notify ICE as soon as reasonably practicable.

Eligible Derivative Products

	7.1  	As of the Commencement Date, the Eligible Derivative Products shall be the ICE Products
described in Annex 3 hereto on such terms as are set out therein (“the Initial Derivative
Products”). In accordance with the procedure set out in sub-paragraph 7.2 below, ICE may
nominate additional ICE Products to be Eligible Derivative Products from time to time, subject
always to LCH’s rights, in accordance with sub-paragraphs 7.3 and 7.7 below, to decline to
provide the Services in respect of any such ICE Products so nominated.
	 
	7.2  	In the event that ICE wishes to nominate an additional ICE Product (“a New Product”) to be an
Eligible Derivative Product, subject to sub-paragraph 7.7 below, it shall give notice in
writing substantially in the form of the example set forth in Annex 2 hereto (“New Product
Notice”) to LCH. Any such New Product Notice shall
be served on LCH in accordance with the provisions of Schedule 1, hereto, and
shall contain details of the ICE Product, including but not limited to the name
of the ICE Product as traded on the Trading System, reasonable estimates of the
number and volume of trades in respect of which LCH is likely to be asked to
provide the Services, price history (if available) or appropriate correlations,
contract terms, Product Group to which such New

Page 13

 

	   	Product is proposed to be
allocated, details of any regulatory issues which are reasonably likely to
arise in the United States in respect of the provision of the Services by LCH
for that New Product, and the date proposed by ICE for the commencement of the
provision of the Services in respect of that New Product.
	 
	7.3.1  	Subject to sub-paragraph 7.3.2 below, LCH
shall notify ICE in writing (an “LCH New
Product Reply Notice”), as soon as
reasonably practicable and in any event
within fifteen (15) Business Days
(including the date of service of such
notice) of its receipt of a New Product
Notice, as to whether, in principle, LCH
expects to be able to provide the Services
in respect of the New Product described in
such Notice, the date by which it expects
to be able to commence to provide such
Services (the “LCH Proposed New Product
Commencement Date”), and, providing ICE
shall have made available to LCH such data
as LCH may reasonably have requested, an
outline of the margin requirements and a
reasonable estimate of Clearing Fees (or
alternatively a date by which LCH agrees
to provide to ICE such an estimate of
Clearing Fees) expected to be applicable
to such ICE Product. ICE acknowledges and
agrees that the final decision by LCH
regarding whether or not it can provide
the Services in respect of any such New
Product is dependent upon approval by the
LCH Risk Committee (or any successor of
that committee) and/or the Board of LCH.
	 
	7.3.2  	LCH may decline to provide the Services in respect of a New Product described a New Product
Notice and served in accordance with sub-paragraph 7.2 above only for any one or more of the
following reasons: –
	 
	7.3.2.1  	LCH reasonably determines that the provision of the Services in respect of such New Product
is reasonably likely to expose LCH to any material adverse risk; or
	 
	7.3.2.2  	LCH reasonably determines that it would be unlawful or in breach of any applicable
regulation or direction of the FSA, CFTC or any regulatory body to whose jurisdiction or
supervision LCH is subject at the time, to provide the

Page 14

 

	   	Services in respect of the ICE Product
described in the New Product Notice; or
	 
	7.3.2.3  	LCH, after making reasonable inquiries, forms the conclusion that it is not reasonably
likely to be able to conclude all necessary arrangements for the settlement of LCH EnClear
Contracts arising in respect of Designated Trades in such New Product, or, where appropriate,
for delivery of any underlying commodity, or the LCH systems are not reasonably capable of
processing or settling such LCH EnClear Contracts; or
	 
	7.3.2.4  	the Parties are unable, after conducting negotiations in good faith, to reach agreement
about responsibility for any costs likely to be incurred by LCH in respect of providing the
Services for that ICE Product.
	 
	7.4  	In the event that pursuant to sub-paragraph 7.3 above, LCH declines to provide the Services
in respect of a New Product, it shall serve a written notice on ICE in accordance with the
provisions of Schedule 1. Such notice shall be served on ICE as soon as practicable and no
later than fifteen (15) days following receipt by LCH of the relevant New Product Notice
referred to in sub-paragraph 7.1 above. Such notice from LCH shall set out the reasons for
LCH’s determination and, if sub-paragraph 7.3.2.1 is applicable, the nature of the relevant
risk/s and proposals for how the Parties might work together to reduce such risks. The Parties
agree that they will use all reasonable endeavours to work together thereafter in good faith,
providing each other with such information and data, and, in the case of ICE, making such
changes to the New Product or the terms on which it is traded, as may be reasonably necessary
in order to reduce such risks to levels acceptable to LCH, and/or remove any relevant
impediment of a legal or regulatory nature, and/or resolve any relevant difficulties with
regard to settlement by LCH of LCH EnClear Contracts in respect of such New Product or the
delivery of any underlying
commodity and/or resolve any systems issues in order to render such New Product
acceptable to LCH.

Page 15

 

	7.5  	Notwithstanding anything to the contrary in this Agreement, ICE shall be entitled to make
other arrangements with a third party for the clearance and settlement of any trades (and
services related thereto) in respect of a New Product described in a New Product Notice served
on LCH in accordance with sub-paragraph 7.2 above, and LCH shall be relieved of any obligation
to provide the Services in respect of that New Product if (i) LCH declines, pursuant to
sub-paragraph 7.3.2 above, to provide the Services in respect of such ICE Product; or (ii) the
LCH New Product Reply Notice specifies an LCH Proposed New Product Commencement Date, being a
date which ICE, in its reasonable judgment and acting in good faith, determines to be
commercially unacceptable, providing always that any LCH Proposed New Product Commencement
Date which is within a period of thirty (30) days from the date upon which the LCH New Product
Reply notice is served upon ICE (exclusive of the date of service) shall not be determined by
ICE to be commercially unacceptable; or (iii) LCH is unable for whatsoever reason, during the
period between service of the LCH New Product Reply Notice and the LCH Proposed New Product
Commencement Date to meet any milestone as shall be agreed between the Parties in the project
plan for that New Product; or (iv) LCH is unable for whatsoever reason during the period
mentioned in (iii) above, to make the necessary arrangements for the settlement of LCH EnClear
Contracts in respect of such New Product, or where appropriate, for delivery of any underlying
commodity.
	 
	7.6  	For the avoidance of doubt, LCH SHALL HAVE NO LIABILITY TO ICE IN THE EVENT THAT IT EXERCISES
ITS RIGHT PURSUANT TO SUB-PARAGRAPH 7.3.2 ABOVE TO DECLINE TO PROVIDE THE SERVICES IN RESPECT
OF A NEW PRODUCT OR IN THE EVENT THAT ICE EXERCISES ITS RIGHTS TO MAKE OTHER ARRANGEMENTS WITH
A THIRD PARTY FOR THE CLEARANCE AND SETTLEMENT OF ANY TRADES IN RESPECT OF A NEW PRODUCT
PURSUANT TO SUB-PARAGRAPH 7.5 OR SUB-PARAGRAPH 7.13.

Page 16

 

	7.7  	No more than five (5) New Product Notices may be open at any time. For the purposes of this
provision a New Product Notice shall be open from the time when it is served upon LCH until
such time as LCH accepts or declines to provide the Services in respect of the New Product to
which it refers in accordance with sub-paragraph 7.3.1 or sub-paragraph 7.3.2. For purposes of
this paragraph 7, the Parties may agree that, where an ICE Product described in a New Product
Notice (for these purposes “Similar New Product Notice”) is substantially the same with regard
to its underlying commodity, reference pricing, and manner of settlement and delivery (where
applicable) as another ICE Product described another open New Product Notice which has been
submitted or an Eligible Derivative Product, the Similar New Product Notice shall not be taken
into consideration for the purposes of calculating the number of New Product Notices open at
any time.
	 
	7.8  	LCH agrees that upon signing this Agreement and from time to time thereafter ICE may nominate
an appropriately qualified and experienced person with knowledge of the ICE Products for
membership of the Risk Committee of LCH (or any successor committee), and, subject to that
person being reasonably acceptable to LCH, that person shall be invited by LCH to serve upon
the Risk Committee or any successor committee as soon as practicable following such
nomination. LCH shall not unreasonably withhold its acceptance of any such person so nominated
by ICE. LCH further agrees that upon the formation of an energy product advisory group by LCH,
ICE may be represented at meetings of that group by the person appointed by the IPE (“the IPE
Representative”) to represent the IPE at meetings of that group. In the event that any matter
particular to ICE is to be discussed at any such meeting of such group, and the IPE and ICE
agree that it is not appropriate that the IPE Representative should represent ICE at such
meeting, IPE and ICE may agree that a person nominated by ICE (being a person appropriately
qualified and experienced in the matters to be discussed at such meeting) may attend such
meeting in the place of the IPE Representative. Reference in this sub-clause 7.8 to the energy
product advisory group includes that

Page 17

 

	   	committee or group of persons by whatever name called
which take on the functions of such group or committee.
	 
	7.9  	ICE agrees to provide to LCH no less than ten (10) Business Days written notice to LCH if it
intends to suspend or remove any Eligible Derivative Products trading on the Trading System;
provided, however, that ICE may, in the event of an emergency, suspend or remove any such
Eligible Derivative Product immediately and provide LCH with written notice as soon as
reasonably practicable thereafter.
	 
	7.10  	With respect to any period of notice set out in this paragraph 7, the Parties may agree to a
shorter period of notice on any occasion.
	 
	7.11  	Neither LCH nor ICE shall make any public announcement of the intention to introduce or the
introduction of any new ICE Product as an Eligible Derivative Product prior to such
introduction without the prior written permission of the other party.
	 
	7.12.1  	For the purposes of this sub-paragraph 7.12:-
	 
	   	a “Directly Competing Product” shall mean an oil, gas, power or metal product, which is
available for trading on a Competing Trading System and which is defined in all material
respects in substantially the same terms as (i) an Eligible Derivative Product which is
available for trading through the Trading System at that time, or (ii) a New Product
described in a New Product Notice which has been served on LCH in accordance with the
provisions of sub-paragraph 7.2 above and which has a New Product Commencement Date
agreed with LCH being no later than six (6) calendar months from the date of the New
Product Notice, each such Eligible Derivative Product or New Product being referred to
hereinafter as “the Comparable ICE Product”; and
	 
	   	a “Competing Trading System” shall mean a trading system or exchange operated by a
Competitor; and

Page 18

 

	   	a “Competitor” shall mean an undertaking which is not a parent, subsidiary or affiliate
(direct or indirect) of ICE; and
	 
	   	“Central Counterparty Clearing Service” shall mean a service whereby trades executed on
or through a trading system or exchange and presented to LCH for registration are
discharged and replaced in each case by a pair of new contracts, one between LCH and the
person described as buyer in the trade and the other between LCH and the person
described as seller in that trade; and
	 
	7.12.2  	Subject to sub-paragraph 7.12.3 if, during any Successive Contract Period (as defined in
sub-paragraph 21.1 below), LCH commences to provide a Central Counterparty Clearing Service in
respect of a Directly Competing Product, ICE shall have the right to give no less than twelve
(12) months written notice to LCH of the withdrawal of all Eligible Derivative Products within
the same Product Group as the Comparable ICE Product from the status of Eligible Derivative
Products, and at the end of such notice period ICE shall have the right to utilise the
services of a third party for the clearance and settlement of trades in those ICE Products.
	 
	7.12.3  	The provisions of sub-paragraph 7.12.2 shall not apply in respect of any Directly Competing
Product, whether or not currently available at the date of this Agreement, for which LCH
provides or commences to provide clearing services according to the provisions of any
agreement, arrangement or LCH service existing at the date of this Agreement.
	 
	7.13.1  	For the purposes of this sub-paragraph 7.13.:-
	 
	(i)  	a “Systems Event” shall mean the failure by any computer system utilised by LCH to register
any LCH EnClear Transactions in respect of any Eligible Derivative Product on a total of any
five (5) Clearing Days, or three (3) consecutive Clearing Days, in any Calendar Quarter; and
	 
	(ii)  	a “Calendar Quarter” shall mean either the period from 1 January until 31 March inclusive, or
the period

Page 19

 

	   	from 1 April to 30 June inclusive, or the period from 1 July until 30 September
inclusive or the period from 1 October until 31 December inclusive, in any year.
	 
	7.13.2  	If a Systems Event occurs, ICE may, in accordance with the provisions of Schedule 1, serve a
written notice upon LCH (a “Systems Issue Notice”) setting out in detail the reasons for such
view, the name of the Eligible Derivative Product and the action proposed by ICE.
	 
	7.13.3  	Following the service of a Systems Issue Notice as set out in sub-paragraph 7.13.2 above,
the Parties shall work together in good faith in order to resolve the issue set out in such
System Issue Notice. If, however within a period of one (1) month from the receipt of such
Systems Issue Notice by LCH, the Parties are unable to agree a solution, ICE may give no less
than three (3) months written notice to LCH in accordance with the provisions of Schedule 1
hereto of the withdrawal of any ICE Product specified in that Systems Issue Notice from the
status of Eligible Derivative Product and, at the end of such period of notice ICE shall have
the right to utilise the services of a third party for the clearance and settlement of trades
in that ICE Product.
	 
	7.14  	In the event that, following the service by ICE upon LCH of a New Product Notice:
	 
	7.14.1  	LCH, pursuant to sub-paragraph 7.3.1 above, notifies ICE that it expects to be able to
provide the Services in respect of any New Product described therein;
	 
	7.14.2  	the Parties agree in writing a date for the commencement of the provision of such Services
(the “Launch Date”); and
	 
	7.14.3  	LCH is fully capable of providing the Services in respect of the New Product on the Launch
Date,
	 
	   	ICE shall make such New Product available for trading through the Trading System on the
Launch Date and for twelve (12) weeks thereafter. In the event that ICE does not make
such New Product so available, ICE shall reimburse

Page 20

 

	   	LCH for all reasonable costs and
expenses incurred by LCH in considering and responding to such New Product Notice and in
making preparations for the provision of the Services in respect of such New Product.

Settlement of LCH EnClear Contracts

	8.1  	LCH shall, in consultation with ICE establish in a timely manner such mutually acceptable
arrangements as may be necessary from time to time for the settlement of LCH EnClear Contracts
and, where appropriate, delivery of commodities underlying such LCH EnClear Contracts. Details
of any such settlement arrangements shall be set out in Procedures. Furthermore ICE and LCH
will make such mutually acceptable arrangements with such third parties as may be necessary in
order to effect such settlement and delivery. The Parties agree and acknowledge that for LCH
EnClear Contracts in the Initial Products, settlement shall be effected by means of cash
settlement and no physical delivery of any underlying commodity will be required.
	 
	8.2  	If either ICE or LCH becomes aware of any dispute related to any LCH EnClear Contract it
shall promptly notify the other Party.
	 
	8.3  	LCH and ICE acknowledge that from time to time in the future a dispute may arise between LCH
EnClear Clearing Members who are party to a Designated Trade, LCH EnClear Transaction or any
LCH EnClear Contracts, and ICE agrees that the Regulations may require LCH EnClear Clearing
Members to submit to arbitration, and that the arbitration proceedings will be conducted in
accordance with LCH requirements, as agreed between LCH and ICE, at no expense to LCH or ICE
and with no involvement of LCH or ICE.
	 
	8.4  	ICE agrees that, in the event that an Eligible Derivative Product is proposed by ICE in a New
Product Notice, as defined in sub-paragraph 7.2 above, and in respect of which mutually
acceptable arrangements for settlement and delivery are made between ICE and LCH in accordance
with sub-paragraph 8.1 above, ICE and LCH shall enter into discussions in good faith with a
view to agreeing suitable arrangements for the conduct of the arbitration

Page 21

 

	   	proceedings in
respect of any dispute between parties to a Designated Trade or any dispute involving any
person who input Trading Platform Particulars in respect of such Designated Trade with regard
to settlement or delivery of the LCH EnClear Contract resulting therefrom and for the
inclusion in the ICE Documentation of provisions requiring participation by such persons in
those arbitration proceedings.

Default

	9.1  	If at any time either LCH or ICE suspects or anticipates that an LCH EnClear Clearing Member
has become or is likely to become unable to perform its obligations in respect of any LCH
EnClear Contract and it considers that the circumstances might lead to LCH serving a Default
Notice, then that Party shall, unless precluded by law, forthwith notify the other Party of
the circumstances in accordance with such procedures as may be agreed between the Parties;
provided that neither Party shall owe the other any duty to monitor any LCH EnClear Clearing
Member.
	 
	9.2  	Subject always to sub-paragraph 9.3, nothing in sub-paragraph 9.1 shall require LCH to obtain
the approval of ICE prior to doing any act or thing in accordance with the provisions of its
Default Rules.
	 
	9.3  	LCH shall give ICE not less than 30 minutes’ prior notice, or such shorter notice as the
Parties may agree in relation to any particular case, of any intention to issue a Default
Notice in respect of any LCH EnClear Clearing Member. Such notice shall be given in accordance
with the provisions of Schedule 1 hereto.
	 
	9.4  	ICE shall promptly upon receipt of notice under sub-paragraph 9.3 above take such action as
may be necessary in the circumstances to prevent that LCH EnClear Clearing Member, and any
Third Party Clearing Participant who is party to any subsisting ICE Third Party Clearing
Agreement with that LCH EnClear Clearing Member and LCH, and any Customer of such LCH EnClear
Clearing Member or Third Party Clearing Participant and who is entitled to input Trading
Platform Particulars which might give rise to a Designated 

Page 22

 

	   	Trade, from executing or entering
into the Trading System Designated Trades or inputting such Trading Platform Particulars and
will continue so to do until such time as LCH may notify ICE to the contrary.
	 
	9.5  	LCH shall, in accordance with the provisions of Schedule 1 hereto, promptly send to ICE a
copy of any Default Notice issued in respect of any LCH EnClear Clearing Member as soon as the
notice is issued under LCH’s Default Rules.
	 
	9.6  	ICE shall notify LCH as soon as practicable and in any event no later than thirty (30)
minutes after such suspension or termination takes effect of any intention to suspend or
terminate its contractual relationship with any Participant that is an LCH EnClear Clearing
Member or a Third Party Clearing Participant or a Customer of an LCH EnClear Clearing Member
or a Third Party Clearing Participant and who is entitled to submit Trading Platform
Particulars in respect of any Designated Trade or to enter Designated Trades into the Trading
System, the reason/s for such suspension or termination, the date and time upon which such
suspension or termination takes effect and, in the event of a suspension, the period of such
suspension.
	 
	9.7  	ICE acknowledges and agrees that upon the service of a Default Notice on an LCH EnClear
Clearing Member by LCH under its Regulations any unsettled LCH EnClear Contract arising from a
Designated Trade shall be dealt with in accordance with the Default Rules of LCH.
	 
	9.8  	If either party exercises any powers it may have, in the case of LCH, under its Default Rules
in relation to an LCH EnClear Clearing Member or, in the case of ICE, to terminate or suspend
any contractual relationship with a Participant which is either an LCH EnClear Clearing Member
or a Third Party Clearing Participant, the Parties shall co-operate and share information to
the extent necessary to enable LCH to discharge its functions under the Regulations (including
but not limited to the Default Rules).
	 
	9.9  	ICE agrees to operate and maintain in force powers and procedures to enable it to suspend or
terminate the ability of any Participant (“the Relevant

Page 23

 

	   	Participant”) to submit Trading
Platform Particulars which might give rise to Designated Trades on the Trading System and to
enter Designated Trades into the Trading System in the event of the Default of the Relevant
Participant (if the Relevant Participant is an LCH EnClear Clearing Member) or in the event of
the Default of the LCH EnClear Clearing Member with whom the Relevant Participant, being a
Third Party Clearing Participant, maintains an ICE Third Party Clearing Agreement, or in the
event of the Default of the LCH EnClear Clearing Member who is party to an ICE Third
Party Clearing Agreement with a Participant of whom the Relevant Participant is a
Customer.

Margin

	10.1  	LCH shall, after consultation with ICE and such LCH EnClear Clearing Members as LCH decides,
and having given due consideration to any views expressed by ICE and such LCH EnClear Clearing
Members in such consultation determine an appropriate algorithm for use by LCH in the
calculation of initial margin to be provided by LCH EnClear Clearing Members in respect of LCH
EnClear Contracts. It is agreed that London SPAN, as used for IPE products, is to be used.
	 
	10.2  	LCH shall in consultation with ICE, establish, review and adjust parameters used in the
algorithm or algorithms referred to in sub-paragraph 10.1 above. The Parties agree that in the
event of any disagreement between them concerning the appropriateness of such parameters, the
determination of LCH shall prevail, providing that LCH shall adhere to LCH General Policy in
making such determination.
	 
	10.3  	LCH shall, following consultation with ICE and such LCH EnClear Clearing Members as ICE and
LCH shall together determine, and having given consideration to the views expressed by ICE and
those LCH EnClear Clearing Members, determine whether variation margin shall be called and
paid in cash or a contingent variation method shall be employed, in which LCH EnClear Clearing
Members may cover negative variation margin in

Page 24

 

	   	collateral, and LCH EnClear Clearing Members
with positive variation margin may receive credits but not daily cash payments.
	 
	10.4  	LCH may at any time, after consultation with ICE and having given due consideration to any
views expressed by ICE in such consultation, alter the algorithm used to calculate initial
margin to be provided by LCH EnClear Clearing Members in respect of LCH EnClear Contracts, if
LCH reasonably believes that such action is necessary or appropriate in order properly to
manage LCH’s risk. LCH shall notify ICE of such changes, wherever practicable, prior to making
such changes. The Parties agree that in the event of any disagreement between them
about the appropriateness or other aspect of such alteration the determination of LCH
shall prevail.
	 
	10.5  	Subject to sub-paragraph 10.6 below, if either of the Parties proposes the adoption of
another scenario-based margining system that employs contract level margin rates and
inter-contract margin offsets to replace London SPAN the Parties shall consult on the
proposal. Following such consultation LCH may adopt such a replacement margining system.
	 
	10.6  	If either Party proposes, within the framework of London SPAN or of a replacement
scenario-based margining system adopted pursuant to sub-paragraph 10.5 above, to permit margin
offsets between LCH EnClear Contracts whether individually or in aggregate and: (i) contracts
in other Energy Products cleared by LCH; or (ii) contracts in other Energy Products not
cleared by LCH, the Parties shall consult and the LCH may make the change in question only
with ICE’s prior written consent.
	 
	10.7  	LCH agrees that, if so requested by an LCH EnClear Clearing Member it will make appropriate
arrangements to enable:-
	 
	10.7.1  	any cash margin; and/or
	 
	10.7.2  	insofar as LCH is permitted to do so by any relevant law or regulatory requirement or such
facilities as are then currently available for the transfer and delivery of the relevant
securities, any cover for margin provided by that

Page 25

 

	   	LCH EnClear Clearing Member in respect of
LCH EnClear Contracts to which it is party, to be held in cash or securities accounts held by
LCH (or any nominee of LCH) in the United States.
	 
	10.8  	Subject to sub-paragraphs 10.5 and 10.6 above, the Parties agree to use their reasonable
commercial endeavours to develop appropriate arrangements to enable margin off-sets regarding
positions held by LCH EnClear Clearing Members in respect of LCH EnClear Contracts with
certain other trades effected on certain other exchanges (the identity of which is to be
agreed between the Parties) and registered by LCH. LCH agrees not to introduce any such margin
off-sets without the express written consent of ICE.
	 
	10.9  	LCH agrees that without the prior written consent of ICE it shall not permit the close-out of
any LCH EnClear Contract arising from a Designated Trade by means of any contract registered
by LCH which was not executed or entered through the Trading System nor will it permit any
such contract to be closed out by means of an LCH EnClear Contract arising from a Designated
Trade, except that LCH may do either or both of these things following the issue of a Default
Notice in respect of any LCH EnClear Clearing Member. This sub-paragraph 10.9 is to survive
termination of this Agreement.

Amendments to the Regulations and to ICE Documentation

	11.1  	Subject to LCH General Policy, LCH will make, or use its reasonable endeavours to procure
agreement to the making of, all amendments to the Regulations as may be necessary to
facilitate the provision of the Services. LCH will use its best endeavours to produce draft
Regulations and Procedures that will enable LCH to provide the Services and are in conformity
with this Agreement by the Commencement Date.
	 
	11.2  	LCH may at any time amend the Regulations in accordance with the provisions of the
Regulations and LCH General Policy, providing that LCH shall consult with ICE and give due
consideration to any views expressed by ICE during such consultation, regarding any proposed
amendments to the

Page 26

 

	   	extent that such amendment relates to the provision by LCH of the Services
or such amendment might reasonably be expected to have a disproportionate adverse effect on
LCH EnClear Clearing Members generally.
	 
	11.3  	ICE agrees that it will not knowingly maintain or introduce any requirement of its
Participants in the ICE Documentation or other documentation binding upon its Participants
which is reasonably likely to have a material adverse effect on LCH’s ability properly and
fully to provide the Services in accordance with the Regulations and this Agreement without
the prior written consent of LCH.
	 
	11.4  	If either party becomes aware that any provision of the ICE Documentation is materially
inconsistent with any provision of the Regulations, it shall notify the other
as soon as reasonably practicable and the Parties shall co-operate to make such
amendments as they may agree in order to remove that inconsistency.
	 
	11.5  	Each Party acknowledges that the other may make any amendment to the ICE Documentation or
Regulations, as the case may be, if required to do so in order to comply with law or its
obligations to or any valid requirement of any regulator with jurisdiction over it or
authority to regulate its business activities.
	 
	11.6  	LCH shall supply ICE with a copy of its form of the LCH Clearing Approval and ICE Third Party
Clearing Agreement and promptly notify ICE of any amendments thereto as they occur from time
to time. In respect of those parts of those agreements which relate to the provision of the
Services, amendments to such provisions will only be made by LCH to the extent that such
amendments are consistent with LCH General Policy.
	 
	11.7  	ICE shall provide LCH with a copy of its ICE Documentation and, without prejudice to the
requirements of sub-paragraph 11.3 above promptly notify LCH of any proposed amendments
thereto that may reasonably be expected materially to affect the rights and obligations of LCH
pursuant to this Agreement or otherwise.

Page 27

 

	11.8  	ICE shall notify LCH of the name, contact address, contact person, telephone and email (if
applicable) of such Participants authorised by it from time to time to enter into trades in
respect of which the Services are to be provided, and LCH shall notify ICE of the same
particulars of those LCH Members who receive an LCH Clearing Approval and are thereby
authorised by LCH to receive the Services, and of Third Party Clearing Participants who have
entered into ICE Third Party Clearing Agreements.
	 
	11.9  	Each party shall include the other in its distribution list so that –
	 
	(a)  	ICE will receive a copy of any guidance, circulars and other notices issued by LCH to LCH
EnClear Clearing Members in respect of the Services; and
	 
	(b)  	LCH will receive a copy of any guidance, circulars or other notices issued to Participants by
ICE relating to Eligible Derivative Products and the Services.
	 
	11.10  	LCH agrees that it will use all reasonable commercial endeavours to make such amendments as
may be reasonably necessary to the Regulations and ICE Documentation respectively in order to
facilitate the provision of the Services with respect to Off Market Trades with effect from 15
April 2003 or such later date as the Parties may agree.
	 
	11.11  	ICE agrees to make such amendments to the ICE Documentation as LCH may reasonably require in
order to facilitate the provision of the Services with respect to Off Market Trades with
effect from 1 March 2003 or such later date as the Parties may agree.

System Interface

	12.1  	ICE will, as soon as reasonably practicable, and in any event no later than the Commencement
Date, design and develop to agreed specifications (or procure that the same be done) an
interface between its Trading System and the relevant system/s of LCH for the purpose of
transmitting trade data and prices to LCH in respect of the Initial Products. LCH shall
provide all commercially reasonable co-operation to ICE and such other persons as may be
involved in order to facilitate the development of such interface. Such

Page 28

 

	   	interface shall be
fully operational no later than the Commencement Date. IN THE EVENT THAT AND DURING ANY PERIOD
WHEN SUCH INTERFACE IS NOT ADEQUATELY OPERATIONAL, LCH SHALL BE RELIEVED OF ITS OBLIGATIONS
UNDER THIS AGREEMENT TO PROVIDE THE SERVICES DURING SUCH PERIOD. LCH AND ICE SHALL, DURING
SUCH PERIOD, WORK TOGETHER TO AGREE ALTERNATIVE MEASURES FOR THE PROVISION OF THE SERVICES. To
the extent that it is necessary in order materially to meet the batching and registration
procedures of LCH currently in place for IPE, ICE shall put in place by the Commencement Date
adequate and fully operational mechanisms to enable it to hold data relating to Designated
Trades overnight for transmission to LCH for registration the next Clearing Day. LCH
acknowledges that ICE owns and will retain all intellectual property and related rights to the
system interfaces developed by ICE pursuant to this clause.
	 
	12.2  	Each Party agrees to consult with the other in respect of any proposal by that Party to
change or modify any direct or indirect computer interfaces between the Parties which may
materially affect its ability or that of the other Party to perform its obligations under this
Agreement.
	 
	12.3  	LCH agrees that:
	 
	(i)  	it will consult with ICE in the on-going development of its IT strategy insofar as the same
may affect the provision of the Services, including in relation to any successor system to the
CFS clearing processing system; and
	 
	(ii)  	it will, at ICE’s election, make available to ICE as part of the Services such elements of
its Clearing 21 system (or any other clearing processing system which it may develop) as it
may from time to time make available to the IPE and other exchanges (including, for the
avoidance of doubt, members of the Euronext Group).

Page 29

 

Record Keeping and information

	13.1  	ICE undertakes to keep adequate records in respect of Designated Trades to enable LCH to
establish a full audit trail of all such Designated Trades including details of each
Designated Trade, date and time it was entered into, Participants party to such Designated
Trades, and details of persons who submitted Trading Platform Particulars in respect of such
Designated Trades.
	 
	13.2  	LCH undertakes to keep adequate records in respect of LCH EnClear Contracts to enable ICE to
establish a full audit trail of all LCH EnClear Contracts including details of each LCH
EnClear Contract and LCH EnClear Clearing Members to that LCH EnClear Contract, and the date
and time of each LCH EnClear Contract.
	 
	13.3  	Any records which are required to be maintained under this paragraph 13 may be on paper, on
microfiche or in computerised or other electronic form and shall be maintained for a period of
at least six years or, such other longer period as may be required by applicable law or
regulation or as the Parties may agree.
	 
	13.4  	Each Party shall upon reasonable notice provide the other Party with a copy of any records
which are required to be maintained by it under this paragraph 13.
	 
	13.5  	LCH undertakes to procure from LCH Members and ICE undertakes to procure from those of its
Participants that are eligible to be party to Designated Trades or to submit Trading Platform
Particulars in respect of Designated Trades, all waivers of any rights to secrecy or
confidentiality which it requires to enable it to perform its obligations under this
Agreement.

Charges, costs and expenses

	14.1  	For the period of one (1) year from the Commencement Date the clearing fee chargeable by LCH
to a Clearing Member in respect of its side of an LCH EnClear Contract one of the Initial
Products shall be as determined in writing between the Parties.

Page 30

 

	14.2  	LCH shall not levy any additional membership fee upon any person who is an LCH Member at the
Commencement Date (“Existing Member”) in respect of any decision by LCH to permit that person
to receive the Services. In calculating and adopting membership fees applicable to persons
wishing to receive the Services, other than Existing Members, insofar as the proposed
membership fee relates to the provision of the Services, LCH shall consult with ICE and shall
give due consideration to any views expressed by ICE during that consultation, and will act
consistently with LCH General Policy.
	 
	14.3  	LCH may collect Clearing Fees from LCH EnClear Clearing Members in such manner and form as is
set out in the Regulations. LCH may also collect (by such manner as may be agreed between LCH
and ICE) from such LCH EnClear Clearing Members such ICE Fees in respect of each such
Designated Trade as may be agreed from time to time between LCH and ICE. Where such ICE Fees
are collected by LCH it shall provide to ICE, no later than seven (7) business days after the
end of each month, a statement showing the amount collected in such detail as may be agreed’
between LCH and ICE and shall account to ICE for such ICE Fees in such manner as the Parties
may agree.
	 
	14.4  	For the purposes of this paragraph 14, “Clearing Fees” shall mean fees charged by LCH to LCH
EnClear Clearing Members in respect of LCH EnClear Contracts and “ICE Fees” shall mean fees
charged by ICE to Participants in respect of Designated Trades.
	 
	14.5  	Except with the prior agreement of ICE, LCH agrees that:
	 
	14.5.1  	No increase in Clearing Fees payable by LCH EnClear Clearing Members in respect of
Designated Trades in those ICE Products which are Eligible Derivative Products on the
Effective Date shall be implemented during the Fee Moratorium Period, nor shall any new fee or
charge be payable by LCH EnClear Clearing Members in respect of such Designated Trades during
such period; and

Page 31

 

	14.5.2  	where, pursuant to the procedure described in paragraph 7 above a New Product becomes an
Eligible Derivative Product during the Fee Moratorium Period, and a Clearing Fee payable by
LCH EnClear Clearing Members is set by LCH in respect of Designated Trades in such New
Product, no increase in such Clearing Fee shall be implemented during the Fee Moratorium
Period.

Confidentiality

	15.1  	Each of the Parties shall -
	 
	(a)  	keep confidential the terms of this Agreement and all information, whether in written or any
other form, which has been disclosed to it by or on behalf of the other party in confidence or
which by its nature ought to be regarded as confidential (including, without limitation, any
business information in respect of the other Party which is not directly applicable or
relevant to the Services); and
	 
	(b)  	procure that its officers, employees, agents and representatives keep secret and treat as
confidential all such documentation and information.
	 
	15.2  	Sub-paragraph 15.1 does not apply to information -
	 
	(a)  	which shall after the date of this Agreement become published or otherwise generally
available to the public, except in consequence of a willful or negligent act
or omission by the other Party to this Agreement in contravention of the obligations in
sub-paragraph 15.1;
	 
	(b)  	to the extent made available to the recipient Party by a third party who is entitled to
divulge such information and who is not under any obligation of confidentiality in respect of
such information to the other Party or who has disclosed such information under an express
statement that it is not confidential;
	 
	(c)  	to the extent required to be disclosed by the Regulations or any applicable law or by the
FSA, CFTC or any other governmental or other regulatory or supervisory body or authority of
competent jurisdiction to whose rules the

Page 32

 

	   	Party making the disclosure is subject, whether or
not having the force of law, provided that the Party disclosing the information shall notify
the other Party of the information to be disclosed (and of the circumstances in which the
disclosure is alleged to be required) as early as reasonably possible before such disclosure
must be made and shall take all reasonable action to avoid and limit such disclosure to any
extent lawfully and reasonably practicable;
	 
	(d)  	which has been independently and lawfully developed by the recipient Party otherwise than in
the course of or pursuant to the exercise of that Party’s rights under this Agreement or the
implementation of this Agreement;
	 
	(e)  	which either Party is required to disclose to a third party in order to perform its
obligations under or pursuant to this Agreement;
	 
	(f)  	disclosed to any applicable tax authority to the extent reasonably required to assist the
settlement of the disclosing Party’s tax affairs or those of any company of which it is a
subsidiary of or any other person under the same control as the disclosing Party; or
	 
	(g)  	which the recipient Party can prove was already lawfully known to it before its receipt from
the disclosing Party.
	 
	15.3  	Without limiting sub-paragraph 15.1, LCH acknowledges and agrees that all trade data relating
to Designated Trades (the “Transaction Data”) are the property of ICE
and its Participants and undertakes that it will use the Transaction Data only for the
purposes set out in sub-paragraphs 15.4, 15.5 and 15.6. ICE grants LCH a royalty-free
non-transferable license to use and copy Transaction Data or any part of them for any
and all of the purposes set out in such sub-paragraphs and to grant
sub-licences on
similar terms for any one or more of such purposes to any sub-contractor or delegate
referred to in sub-paragraph 15.4.
	 
	15.4  	ICE acknowledges that LCH may delegate and/or sub-contract certain functions related to the
provision of the Services (the “Delegated Functions” and agrees that LCH may disclose
Transaction Data to any such delegate or

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	   	sub-contractor and may grant such person or persons a
sub-licence to use and copy Transaction Data, in each case solely to the extent necessary to
enable such person to perform the Delegated Functions provided that LCH shall require such
person/s to keep the Transaction Data confidential.
	 
	15.5  	ICE hereby permits LCH during the term of this Agreement to use Transaction Data for the
following purposes -
	 
	(a)  	as necessary to provide the Services or any part of them;
	 
	(b)  	compiling end of day market statistics for use by LCH, its employees, agents, contractors,
Directors, officers and advisers for the proper business purposes of LCH, provided that such
statistics shall not be made public.
	 
	(c)  	calculation of intra-day and end of day margining obligations and reporting to LCH Members of
the information relied upon in calculating such margin obligations or otherwise for risk
management purposes;
	 
	(d)  	performing its obligations in respect of LCH EnClear Contracts under the Regulations
(including transmitting such details to third parties during the course of performing its
obligations in accordance with the Regulations);
	 
	(e)  	complying with requests from the FSA, CFTC or any other relevant governmental body or other
authority, regulatory body or court of competent jurisdiction or for the purposes of
commencing, or defending, any arbitration or court proceedings; and
	 
	(f)  	providing to any LCH EnClear Clearing Member any information or details regarding any LCH
EnClear Transactions or LCH EnClear Contracts to which that LCH EnClear Clearing Member is
party
	 
	   	providing always that, in addition to the above, LCH may at any time compile and make
publicly available market statistics with the prior express consent in each instance of
ICE.

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	15.6  	ICE shall provide LCH with such data or other information which LCH may be required to
produce from time to time to the FSA, CFTC or any other authority, regulatory body or court
referred to in sub-paragraph 15.5 (e) above.
	 
	15.7  	Each party acknowledges and agrees that the other may disclose Transaction Data to its
employees, legal advisers, insurance brokers and underwriters, auditors and such other
professional advisers as the Parties may agree from time to time provided that such disclosure
is reasonably necessary for the proper performance of that person’s functions and that such
persons shall be required to keep the Transaction Data confidential.

Trade emergencies and market disorder

	16.1  	If at any time either Party suspects or anticipates the development of an excessive position
in respect of an Eligible Derivative Product owned or controlled by the same person, or under
the common control of a group of persons acting together or in concert, or any manipulation,
corner, squeeze or other undesirable situation or practice that might reasonably be expected
to affect or be capable of affecting the market for that product, the risk of LCH, LCH
Members, LCH EnClear Contracts, Participants or any of them, it shall immediately notify the
other Party. For the avoidance of doubt, neither Party shall have any liability to the other
for any omission or failure (other than willful failure or omission) to notify the other Party
pursuant to this sub-paragraph 16.1.
	 
	16.2  	If LCH reasonably determines that the circumstances contemplated by sub-paragraph 16.1 have
arisen, LCH may take such action as it deems reasonably necessary in accordance with the
Regulations in respect of LCH EnClear
Contracts, LCH EnClear Transactions and Designated Trades and the provision of the
Services. Wherever reasonably practicable, LCH shall consult with ICE prior to taking
such action.
	 
	16.3  	If at any time ICE reasonably determines that any of the circumstances referred to in
sub-paragraph 16.1 have arisen and it shall have notified LCH

Page 35

 

	   	accordingly, the Parties agree
that they shall monitor the development of such circumstances and share information about such
circumstances with each other to the extent that each is reasonably able so to do in the light
of its obligations of confidentiality to third parties and other obligations placed upon it by
law, contract or otherwise.

Period for acceptance of LCH EnClear Transactions arising in respect of Designated Trades

	17.1  	It is agreed that for the time being LCH will accept LCH EnClear Transactions arising in
respect of Designated Trades for registration by LCH during at least the same hours London
time in which LCH from time to time accepts eligible FE trades for registration.
	 
	17.2  	In the event that either party wishes to change the period during which LCH EnClear
Transactions arising in respect of Designated Trades will be accepted by LCH for registration,
then the Parties shall work together in good faith with a view to reaching agreement in
respect thereof.

Contract Terms

	18.1  	The contract terms of LCH EnClear Contracts arising from LCH EnClear Transactions in respect
of Designated Trades in ICE Products other than the Initial Products shall be agreed between
LCH and ICE from time to time and shall be set out in the Procedures.
	 
	18.2  	LCH may amend any such contract terms referred to in sub-paragraph 18.1 above, providing that
(with the exception of any such amendment introduced by LCH in any of the circumstances
contemplated by sub-paragraph 16.1 above or in any of the circumstances contemplated by
Regulation 26 of the Regulations, when, in
either such case LCH shall not be bound by the provisions of this sub-paragraph 18.2):
	 
	18.2.1  	LCH may not amend any material provision of those Standard Terms which are applicable to LCH
EnClear contracts arising in respect of Designated Trades executed through the Trading System
and which are set out in any of

Page 36

 

	   	the contract tables in Section 1 of paragraph 3 of Part A to
the Schedule to the LCH EnClear Regulations, or any material provision contained in the
Product Eligibility Criteria for LCH EnClear Eligible Derivative Products for the ICE Trading
System set out in sub-paragraph 1.2 of Part B to the Schedule to the LCH EnClear Regulations
without the prior agreement of ICE;

	18.2.2  	With regard to any other such contract terms, LCH shall firstly consult with ICE and give
due consideration to any views expressed by ICE during such consultation and shall give no
less than five (5) Business days prior notice to ICE of any such amendment.

Default Fund

	19.1  	With respect to the provision of the Services by LCH in respect of the Initial Products, LCH
Members who wish to be LCH EnClear Clearing Members will contribute to the Exchange Fund
Amount (“EFA”) of the Default Fund on terms identical to those on which other LCH Members
contribute to the EFA.
	 
	19.2  	LCH warrants and represents at the date of this Agreement that (i) the EFA is currently set
at three hundred and ten million pounds sterling (£310 million sterling) in aggregate; (ii)
LCH Members’ contributions are determined by their respective volume and initial margin
requirements (as defined by the Regulations) subject to a minimum contribution of one hundred
thousand pounds sterling (£100,000 sterling); and (iii) all contributions to the EFA take the
form of cash-backed indemnities given to LCH, whose current policy at the date of this
Agreement is, subject to the discretion of its board, to hold the cash and pay each LCH Member
interest thereon at a rate equivalent to three (3) month sterling LIBOR plus one percentage
point.

Assignment and delegation

	20.1  	Neither Party shall take any steps to assign, transfer, charge or otherwise encumber with all
or any of its rights or obligations under or pursuant to this Agreement without the prior
written approval of the other Party, such approval not to be unreasonably withheld or delayed
provided, however, that either Party may assign this Agreement to any entity (i) controlling,
controlled by, or

Page 37

 

	   	under common control with such party, or (ii) which succeeds to all or
substantially all of the assets and business of such Party, if:
	 
	20.1.1  	in the case of any such assignment by LCH, the assignee is a Recognised Clearing House under
the Financial Services and Markets Act 2000 or has substantially similar status under
legislation from time to time replacing those Acts, and a Derivatives Clearing Organization
registered with the CFTC.
	 
	20.1.2  	in the case of any such assignment by ICE, the assignee has the appropriate regulatory
authorisation within the United States from the CFTC or other appropriate regulatory body in
the United States or elsewhere in order lawfully to operate the Trading System in the manner
contemplated by this Agreement
	 
	  	and the assignee agrees in writing to assume the assignor’s obligations under, and to be
bound by the provisions of, this Agreement (as it may be amended from time to time).
This Agreement shall be binding upon and shall inure to the benefit of the Parties and
their respective successors and permitted assigns in accordance with its terms.
	 
	20.2  	If either Party proposes to delegate the performance of any of its obligations under or
pursuant to this Agreement it shall consult with the other Party before doing so.
	 
	20.3  	A delegation or sub-contracting by either Party under sub-paragraph 20.2 shall not affect the
obligations of that Party under this Agreement and that Party shall be liable for the acts and
omissions of its delegate as if they were its own but subject to the provisions of this
Agreement including without limitation paragraphs 26 and 27.

Termination

	21.1  	ICE or LCH may terminate this Agreement immediately by notice to the other Party (the
“Defaulting Party”) where:

Page 38

 

	21.1.1  	the Defaulting Party is unable, or admits in writing inability, to pay its debts as
they fall due, suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of its creditors
with a view to rescheduling any of its indebtedness;
	 
	21.1.2  	a moratorium is declared in respect of any of the Defaulting Party’s indebtedness;
	 
	21.1.3  	any corporate action, legal proceeding or other procedure or step is taken (or any analogous
procedure or step is taken in any jurisdiction) by or in respect of the Defaulting Party in
relation to:
	 
	(i)  	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution,
administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or
otherwise), other than a solvent liquidation or reorganisation, of any member of the
Defaulting Party’s Group of Companies;
	 
	(ii)  	a composition, assignment or arrangement with any creditor;
	 
	(iii)  	the appointment of a liquidator (other than in respect of a solvent liquidation of any of
the Defaulting Party’s Group of Companies), receiver, administrator, administrative receiver,
compulsory manager or other similar officer in respect of any of the Defaulting Party’s
assets; or
	 
	(iv)  	enforcement of any security over any of the Defaulting Party’s assets;

	 
	  	and such procedure: (i) if instituted against the Defaulting Party by a third party, is not discharged within 10 Business
Days; or (ii) if instituted by the Defaulting Party, then immediately;
	 
	21.1.4  	the Defaulting Party becomes unable to pay its debts as they fall due for the purposes of
Section 123(1) (but excluding sub-Section (1)(a) thereof) of the Insolvency Act 1986;

Page 39

 

	21.1.5  	the Defaulting Party makes any arrangement with or compounds with its creditors or calls a
meeting of its creditors for such purpose;
	 
	21.1.6  	the Defaulting Party enters into any liquidation (other than for the purposes of a voluntary
reconstruction or amalgamation for which the prior written consent of the other Party has been
obtained); or
	 
	21.1.7  	the Defaulting Party has an encumbrancer take possession or a receiver or administrative
receiver or administrator appointed (other than where such possession or appointment is
discharged within 10 Business Days of being effected) of all or any material part of its
assets.
	 
	21.2  	Either Party may terminate this Agreement immediately (or at its option upon such period of
notice as it may specify) by notice to the other Party if the other Party has received notice
that it will cease to be, in the case of LCH, a Derivatives Clearing Organization, or, in the
case of ICE, an Exempt Commercial Market or other market or exchange permitted under the
Commodity Exchange Act; or
	 
	21.3  	At any time after the Effective Date of this Agreement either Party may terminate this
Agreement by the giving to the other Party of 1 year’s written notice expiring at any time.
	 
	21.4  	Upon service of a notice to terminate this Agreement under sub-paragraph 21.3 above, the
Parties shall agree the date upon which LCH shall terminate provision of the Services,
provided that such date shall not be later than the date upon such notices expires, and
neither Party shall unreasonably withhold or delay its agreement to a date proposed by the
other Party. Failing agreement between the Parties, LCH shall terminate provision of the
Services on the date of termination of this Agreement.
	 
	21.5  	Termination of this Agreement shall not release either of the Parties from any other
liability which at the time of termination has already accrued to the other Party, nor affect
in any way the survival of any other right, duty or obligation

Page 40

 

	  	of the Parties which is expressly stated elsewhere in this Agreement to survive such termination.
	 
	21.6  	The provisions of paragraphs 13, 15, 20, 22, 25, 26, 27, 29, 30, 32, 33, 34, 35, 36, 38, and
39 shall survive termination of this Agreement.
	 
	21.7  	A Party shall notify the other in writing of the execution of any agreement for the change of
control of such party (“the Affected Party”). For the purposes of this paragraph a person
shall be taken to have control of the Affected Party if he exercises or is able to exercise or
is entitled to acquire, direct or indirect control over the Affected Party’s affairs and in
particular, but without prejudice to the generality of the foregoing, if he possesses or is
entitled to acquire –
	 
	21.7.1  	the greater part of the share capital or issued share capital of the Affected Party or of
the voting power in the Affected Party’s corporate structure;
	 
	21.7.2  	such part of the issued share capital of the Affected Party as would, if the whole of the
income of that Affected Party were in fact distributed among the participators (without regard
to any rights which he or any other person has as a loan creditor) entitle him to receive the
greater part of the amount so distributed; or
	 
	21.7.3  	such rights as would, in the event of the winding up of the Affected Party or in any other
circumstances, entitle him to receive the greater part of the assets of the Affected Party
which would then be available for distribution among the participators.
	 
	   	Where two or more persons together satisfy any of the conditions set out above in this
sub-paragraph 21.7, they shall be taken as having control of the Affected Party. For the
purposes of this paragraph there shall be attributed to any person any rights or powers
of a nominee for him. At any time within three (3) months from receipt of such a notice
from the Affected Party, the other Party may terminate the Agreement by giving notice in
writing to the Affected Party. The termination of this
Agreement in such circumstances shall be effective no sooner than three (3) months after
the service of such notice.

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	21.8  	Upon termination of this Agreement for any reason, LCH agrees it will use its reasonable
endeavours to co-operate with ICE and any third party who has agreed to provide services
comparable to the Services or any of them in place of LCH (a “Successor Provider”) to ensure a
smooth and orderly transition to the Successor Provider in order to minimise the disruption to
the Trading System and to Participants, and to assist and enable ICE to comply with such
regulatory obligations and duties as it may have. LCH further agrees that, following such
termination, upon written request of all LCH EnClear Clearing Members with open positions at
the date of termination of this Agreement, it will use all reasonable endeavours to co-operate
with ICE to introduce arrangements for the termination at a date to be agreed between those
LCH EnClear Clearing Members and LCH, of all such open LCH EnClear Contracts registered in the
names of those LCH EnClear Clearing Members, and to provide to the Successor Provider such
particulars of those LCH EnClear Contracts as those LCH EnClear Clearing Members may
reasonably request. ICE undertakes to reimburse LCH in respect of reasonable costs and
expenses (including legal costs) properly incurred by LCH in connection with such transition
and the provision of such particulars to a Successor Provider (other than, for the avoidance
of doubt, costs incurred by LCH in connection with ceasing to provide the Services to its
members) except where LCH has terminated this Agreement in breach of this paragraph 21 or
where the Agreement is terminated by ICE due to a fundamental breach of this Agreement by LCH.

Amendment

	22.1  	No variation of this Agreement shall be valid unless it is in writing and signed by or on
behalf of the Parties to it.
	 
	22.2  	Unless expressly agreed, no variation of any provision of this Agreement whether express or
otherwise shall constitute a general waiver of any other provision of this Agreement, nor
shall it affect any rights, obligations or liabilities under or pursuant to this Agreement
which have already accrued up to the date of variation, and the rights and obligations of the Parties under or

Page 42

 

	   	pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so varied.

Filings

	23.  	The Parties will each procure that any other registrations, filings and submissions required
under the laws of any jurisdiction are made to the extent that the provisions of such laws
apply to each of them. The Parties will co-ordinate and co-operate with one another in
providing such information and provide each to the other all reasonable assistance as may be
requested in connection with any such registrations, filings and submissions.

Additional assurance

	24.  	Each of the Parties agrees to perform (or procure the performance of) all further acts and
things, and execute and deliver (or procure the execution and delivery of) such further
documents, as may be required by law or as may be reasonably necessary to implement or give
effect to this Agreement and the provision of the Services hereunder.

Warranty of capacity and power

	25.  	Each Party represents and warrants to the other Party that the following statements are, at
the date of this Agreement, true and accurate -
	 
	(a)  	it is duly organised and validly existing under the laws of the jurisdiction of its
organisation, and has capacity and power to enter into and perform its obligations under this
Agreement;
	 
	(b)  	its Memorandum and Articles of Association, or similar corporate constitutional documents
required by law, incorporate provisions which authorise, and all necessary corporate action
has been taken to authorise, and all necessary authorisations of any governmental or other
authority including those of the CFTC and/or FSA, as the case may be, have been duly and
unconditionally obtained and are now in full force and effect which are required to authorise
it to execute and deliver, and perform the obligations contemplated by, this Agreement;

Page 43

 

	(c)  	neither the execution and delivery by it of this Agreement nor the performance by it of any
of the obligations contemplated by this Agreement will -

	 	(i)  	contravene or constitute a default under any provision contained in any
law, judgment, order (of any jurisdiction in which it carries on business) or
consent by which it is bound or affected or in any agreement or instrument to which
it is a party;
	 
	 	(ii)  	cause any limitation on it or the powers of its directors, whether
imposed by or contained in its Memorandum or Articles of Association or other
corporate constitutional document or any law, order, judgement (of any jurisdiction
in which it carries on business), consent, agreement, instrument, or otherwise, to
be exceeded;

	(d)  	it has obtained all authorisations, consents or approvals of any governmental or regulatory
body required in connection with this Agreement;
	 
	(e)  	its obligations under this Agreement constitute its legal, valid, binding and enforceable
obligations, subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement is sought in a
proceeding in equity or at law);
	 
	(f)  	no event has occurred which constitutes, or with the giving of notice or the lapse of time or
a relevant determination would constitute, a contravention of, or default under, any agreement
or instrument by which it or any of its assets is bound or affected, being a contravention or
default which might have a material adverse effect on its business and which might adversely
affect its ability to observe and perform its obligations under or pursuant to this Agreement;
	 
	(g)  	there is not current or pending or, to its best knowledge, threatened, any litigation,
arbitration or administrative action or proceeding before any court,

Page 44

 

	  	arbitrator, governmental, regulatory or administrative agency or authority which by itself or together with any other
such proceedings or claims, if determined adversely to it, will or might have a material
adverse effect on its financial condition, business,
assets or operations or its ability to perform its obligations under this Agreement; and  
	 
	(h)  	there are no other facts or matters to the best of its knowledge which might reasonably be
expected to have a material adverse effect on its business and its ability to perform its
obligations under this Agreement or on the willingness of the other Party to enter into this
Agreement.
	 
	(i)  	ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MECHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE ARE DISCLAIMED.

LIABILITY

	26.1  	SUBJECT TO SUB-PARAGRAPH 26.3, NEITHER PARTY NOR ANY OF THEIR RESPECTIVE AFFILIATES,
DIRECTORS, EMPLOYEES, AGENTS, LICENSORS AND/OR CONTRACTORS SHALL BE LIABLE TO THE OTHER WITH
RESPECT TO ANY CLAIMS WHATSOEVER ARISING OUT OF THIS AGREEMENT FOR INDIRECT, CONSEQUENTIAL,
SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION, CLAIMS FOR LOSS OF
PROFITS OR INCOME OR LOSS OF USE OF EITHER, LOSS OF BUSINESS EXPECTATIONS OR BUSINESS
INTERRUPTIONS. THIS PARAGRAPH SHALL APPLY REGARDLESS OF ANY ACTUAL KNOWLEDGE OR FORESEEABILITY
OF SUCH DAMAGES.
	 
	26.2  	SUBJECT TO SUB-PARAGRAPHS 26.1 AND 26.5, THE TOTAL AGGREGATE LIABILITY OF EACH PARTY TO THE
OTHER FOR ALL LOSSES, DAMAGES, COSTS, CLAIMS AND EXPENSES OF ANY KIND ARISING OUT OF OR IN ANY
WAY CONNECTED TO THIS AGREEMENT SHALL NOT EXCEED TEN MILLION POUNDS
STERLING (£10,000,000).
THE FOREGOING SHALL APPLY REGARDLESS OF WHETHER A CLAIM

Page 45

 

ARISES IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE.

	26.3  	THE PARTIES ACKNOWLEDGE THEY HAVE ENTERED INTO THIS AGREEMENT IN RELIANCE UPON THE
LIMITATIONS OF LIABILITY AND DISCLAIMERS OF WARRANTIES AND DAMAGES SET OUT HEREIN AND THAT THE SAME FORM AN ESSENTIAL
BASIS OF THE BARGAIN BETWEEN THE PARTIES. THE PARTIES AGREE THAT THE LIMITATIONS AND
EXCLUSIONS OF LIABILITY AND DISCLAIMERS OF WARRANTIES AND CONDITIONS SPECIFIED HEREIN
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
	 
	26.4  	ICE ACKNOWLEDGES, UNDERSTANDS AND ACCEPTS THAT LCH MAKES NO WARRANTY WHATSOEVER TO ICE AS TO
THE SERVICES, EXPRESS OR IMPLIED, AND THAT THE SERVICES ARE PROVIDED “AS IS” TO LCH ENCLEAR
CLEARING MEMBERS FOR THEIR BENEFIT (AND, WHERE APPLICABLE THE BENEFIT OF THEIR RESPECTIVE
THIRD PARTY CLEARING PARTICIPANTS AND THEIR CUSTOMERS) IN ACCORDANCE WITH THE PROVISIONS OF
THE REGULATIONS, RELEVANT LCH CLEARING APPROVALS, THE ICE THIRD PARTY CLEARING AGREEMENT
(WHERE APPLICABLE), AND THE RELEVANT CLEARING MEMBERSHIP AGREEMENT/S. LCH DISCLAIMS ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. NEITHER LCH NOR ITS
MANAGERS, MEMBERS, OFFICERS, EMPLOYEES OR AGENTS MAKE ANY WARRANTY WITH RESPECT TO, AND NO
SUCH PARTY SHALL HAVE ANY LIABILITY TO ICE FOR THE ACCURACY, TIMELINESS, COMPLETENESS,
RELIABILITY, PERFORMANCE OR CONTINUED AVAILABILITY OF THE SERVICES (INCLUDING BUT NOT LIMITED
TO THE OPERATION AND FUNCTIONALITY OF LCH OR OTHER SYSTEMS UTILISED, OR FOR DELAYS, OMISSIONS
OR INTERRUPTIONS THEREIN. LCH SHALL HAVE NO DUTY OR OBLIGATION TO VERIFY ANY INFORMATION
RECEIVED FROM ICE OR ANY LCH ENCLEAR CLEARING

Page 46

 

MEMBER OR THIRD PARTY CLEARING PARTICIPANT.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING LCH DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE REGARDING LCH OR OTHER SYSTEMS UTILISED AND
THE OPERATION AND FUNCTIONALITY THEREOF AND DISCLAIMS ALL LIABILITY WITH REGARD THERETO.

	26.5  	NOTHING CONTAINED IN THIS AGREEMENT SHALL RESTRICT EITHER PARTY’S LIABILITY FOR DEATH OR
PERSONAL INJURY RESULTING FROM ANY ACT, OMISSION OR NEGLIGENCE OF THAT PARTY OR ITS OFFICERS,
AGENTS, EMPLOYEES OR SUB-CONTRACTORS.
	 
	26.6  	WITHOUT PREJUDICE TO EACH PARTY’S OBLIGATIONS UNDER THIS AGREEMENT, EACH PARTY ACKNOWLEDGES
AND AGREES THAT IT DOES NOT OWE ANY DUTY OF CARE TO THE OTHER IN RELATION TO THE ADMISSION OF
ANY LCH ENCLEAR CLEARING MEMBER OR THIRD PARTY CLEARING PARTICIPANT (AS APPLICABLE) OR THE
EXERCISE OF ITS POWERS UNDER THE REGULATIONS OR ICE DOCUMENTATION, AS THE CASE MAY BE.

FORCE MAJEURE

	27.1.1  	SUBJECT TO SUB-CLAUSE 27.1.2 BELOW, NEITHER ICE NOR LCH SHALL BE LIABLE TO THE OTHER FOR ANY
FAILURE TO FULFIL ITS DUTIES HEREUNDER IF AND TO THE EXTENT THAT SUCH FAILURE RESULTS FROM AN
EVENT, CAUSE OR CIRCUMSTANCE WHICH IS BEYOND ITS REASONABLE CONTROL, AND WHICH IS AN ACT OF
GOD, WAR DAMAGE, ENEMY ACTION, THE ACT OF ANY GOVERNMENT OR OTHER COMPETENT AUTHORITY, RIOT,
CIVIL COMMOTION, REBELLION, PLAGUE, EPIDEMIC, TERRORISM, STORM, ACCIDENT, FIRE, FLOOD,
EXPLOSION, LOCK-OUT, FAILURE OF TELECOMMUNICATIONS SYSTEM OR POWER SUPPLY, POLITICAL UNREST,
INDUSTRIAL DISPUTE OR DISTURBANCE, STRIKE, BOYCOTT, EMBARGO, ADVERSE WEATHER OR ATMOSPHERIC
CONDITIONS, FRAUD OF ANY PERSON OTHER THAN AN EMPLOYEE, DIRECTOR OR

Page 47

 

AGENT OF THAT PARTY, UNFORESEEN SHORTAGE OF PERSONNEL FOR MEDICAL REASONS, SUSPENSION OF PAYMENTS BY OR INSOLVENCY,
RECEIVERSHIP, ADMINISTRATION, BANKRUPTCY OR LIQUIDATION OF ANY PERSON OR OTHER SIMILAR CAUSE
(“FORCE MAJEURE EVENT”) (WHICH FOR THE AVOIDANCE OF DOUBT SHALL NOT INCLUDE A FAILURE OF ANY
SUB-CONTRACTOR TO PERFORM ITS OBLIGATIONS UNDER A SUB-CONTRACT).

	27.1.2  	LCH SHALL NOT BE ABLE TO RELY ON SUB-CLAUSE 27.1.1 ABOVE TO THE EXTENT THAT ITS FAILURE TO
FULFIL ITS DUTIES IS DUE TO OR CONNECTED WITH A FAILURE BY LCH TO HAVE ADEQUATE BUSINESS
CONTINUITY ARRANGEMENTS EXCEPT WHERE SUCH FAILURE IS ITSELF THE RESULT OF A FORCE MAJEURE
EVENT.
	 
	27.2  	THE PARTY UNABLE TO FULFIL ITS DUTIES PURSUANT TO SUBPARAGRAPH 27.1 (THE “AFFECTED PARTY”)
SHALL:
	 
	27.2.1  	GIVE WRITTEN NOTICE TO THE OTHER PARTY (THE “OTHER PARTY”) AS SOON AS REASONABLY PRACTICABLE
AFTER IT BECOMES AWARE OF THE OCCURRENCE OR LIKELY POSSIBILITY OF A FORCE MAJEURE EVENT, SUCH
NOTICE TO CONTAIN THE FOLLOWING INFORMATION:

	 	(i)  	A DESCRIPTION OF THE FORCE MAJEURE EVENT THAT HAS OCCURRED OR IS LIKELY
TO OCCUR;
	 
	 	(ii)  	THE DATE FROM WHICH THE EVENT HAS PREVENTED OR HINDERED OR WILL PREVENT
OR HINDER THE AFFECTED PARTY IN THE PERFORMANCE OF ITS DUTIES HEREUNDER;
	 
	 	(iii)  	A DESCRIPTION OF THE DUTIES SO AFFECTED;
	 
	 	(iv)  	ITS BEST ESTIMATE OF THE DATE UPON WHICH IT WILL BE ABLE TO RESUME
PERFORMANCE OF THE AFFECTED DUTIES; AND

Page 48

 

	27.2.2  	AT ALL TIMES CONTINUE TO TAKE STEPS IN ACCORDANCE WITH GOOD INDUSTRY PRACTICE TO RESUME FULL
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT;
	 
	27.2.3  	AT ALL TIMES USE ALL REASONABLE ENDEAVOURS TO MITIGATE THE CONSEQUENCES OF THE FORCE MAJEURE EVENT; AND
	 
	27.2.4  	AT REASONABLE INTERVALS, OR UPON REQUEST BY THE OTHER PARTY, UPDATE SUCH OTHER PARTY AS TO
THE FORCE MAJEURE EVENT, ITS EFFECT, THE STEPS BEING TAKEN OR PLANNED TO REMEDY IT, AND
SUCH OTHER DETAILS AS THE OTHER PARTY MAY REASONABLY REQUEST.
	 
	   	THE RELIEF FROM LIABILITY UNDER SUB-PARAGRAPH 27.1 SHALL LAST FOR THE DURATION OF THE
FORCE MAJEURE EVENT IF AND SO LONG AS THE AFFECTED PARTY COMPLIES WITH THIS SUB-CLAUSE
27.2.

Instructions

	28.1  	For the purposes of this paragraph 28 any reference to “procedures” shall mean a reference to
such procedures as may be agreed between the Parties from time to time. A Party (the “first
Party”) shall be entitled without further enquiry to execute or act on any written information
or written instructions received from the other Party (the “other Party”) in accordance with
procedures whether from the other Party or any person reasonably believed by the first Party
to be a person notified to the first party as having authority to act on the other Party’s
behalf, and the first Party shall not be liable for any liability, claim, loss, damages and
expenses of any kind or nature suffered or incurred by the other party if it is subsequently
discovered that any such information is inaccurate, forged or unauthorised provided that the
first party has complied with the relevant procedures (if any) and acted reasonably.
	 
	28.2  	A Party (the “first Party”) shall be entitled without further enquiry to execute or act on
any information or instruction or purported information or instruction

Page 49

 

	   	received in electronic form via (or purportedly via) the first Party’s computer systems from the other Party (the
“other Party”) in accordance with procedures notwithstanding that it may afterwards be
discovered that any such information or instruction was not initiated by the other Party or
was not initiated through the computer systems operated by the other Party; such execution or
action shall, save in the case of willful default or reckless disregard of the first Party’s
obligations, constitute a good discharge to the first Party which shall not be liable for any
liability, claim, loss, damages and expenses of any kind or nature arising from such execution
or action provided that the first Party has complied with any applicable procedures.
	 
	28.3  	A Party (the “first Party”) shall be entitled without further enquiry to execute or act on
any oral information or oral instructions received from the other Party (the “other
Party”) whether from the other Party or any person reasonably believed by the first
Party to be a person notified to the first party as having authority to act on the other
Party’s behalf provided that the first Party shall have complied with the procedures
agreed between the Parties for authentication of oral instructions and the first Party
shall not be liable for any liability, claim, loss, damages and expenses of any kind or
nature suffered or incurred by the other Party if it is subsequently discovered that any
such information is inaccurate or unauthorised provided that the first Party has
complied with any applicable procedures.

Illegality

	29.1  	Neither Party shall be required to perform any obligation under this Agreement to the extent
that the performance of such obligation would cause that Party to breach any applicable law or
regulation to which it is subject.
	 
	29.2  	If either Party becomes aware that the performance of any obligation under this Agreement
would or could breach any applicable law or regulation to which it is subject, it shall notify
the other as soon as reasonably practicable.

Page 50

 

	29.3  	Each Party undertakes to comply with all applicable laws and regulations to which it is
subject in connection with performance of its obligations under this Agreement.

Severability

	30.  	If any provision of this Agreement is held to be invalid or unenforceable, then such
provision shall (so far as invalid or unenforceable) be given no effect and shall be deemed
not to be included in this Agreement but without invalidating any of the remaining provisions
of this Agreement. The Parties shall then use all reasonable endeavours to replace the invalid
or unenforceable provisions by a valid and enforceable substitute provision the effect of
which is as close as possible to the intended effect of the invalid or unenforceable
provision.

Notices

	31.1  	Any notice to be given by one Party to the other under this Agreement shall be given in
accordance with the provisions set out in Schedule 1 hereto.
	 
	31.2  	A Party may notify the other Party to this Agreement of a change to a name, relevant
addressee, address or facsimile address set out in Schedule 1 hereto, in accordance with the
provisions set out therein.

Waivers

	32.  	Any failure or delay by any Party in exercising any right or remedy provided by law or under
this Agreement shall not impair or affect such right or remedy or operate or be construed as a
waiver or variation of it or preclude its exercise at any subsequent time unless expressly
provided. No single or partial exercise of any such right or remedy shall preclude any
permitted other or further exercise of it or the exercise of any other right or remedy.

Remedies Cumulative

	33.1  	Subject to sub-paragraph 26.2, the rights and remedies of each of the Parties under or
pursuant to this Agreement are cumulative. They may each be

Page 51

 

exercised as often as such Party considers appropriate and are in addition to such rights and remedies under general law as
each Party may have.

	33.2  	The Parties acknowledge that damages may not be an adequate remedy for any breach of this
Agreement. Subject to paragraph 39 below, either Party shall be entitled to obtain any legal
and/or equitable relief, including specific performance or injunctive relief, in the event of
any breach of the provisions of this Agreement.

Entire Agreement

	34.  	This Agreement sets out the entire agreement and understanding between the Parties in respect
of the subject matter of this Agreement. It is agreed that-
	 
	(a)  	neither Party has entered into this Agreement in reliance upon any representation, warranty
or undertaking of the other Party which is not expressly set out or referred to in this
Agreement;
	 
	(b)  	neither Party shall have any remedy in respect of misrepresentation or untrue statement made
by the other Party which is not contained in this Agreement nor for any breach of warranty
which is not contained in this Agreement; and
	 
	(c)  	this paragraph shall not exclude any liability for fraudulent misrepresentation.

Legal Relationship

	35.  	Nothing in this Agreement is deemed to constitute a partnership between the Parties nor
constitute any Party the agent of the other or any other Party for any purpose.

No rights under Contracts (Rights of Third Parties) Act 1999

	36.  	A person who is not a Party to this Agreement shall have no right under the Contracts (Rights
of Third Parties) Act 1999 or otherwise to rely on or enforce any of its terms.

Page 52

 

Number of counterparts

	37.  	This Agreement may be executed by the Parties to it on separate counterparts, each of which
is an original but both of which together constitute one and the same instrument.

Governing law and iurisdiction

	38.1  	This Agreement and the relationship between the Parties shall be governed by, and interpreted
in accordance with, English law and the Parties irrevocably submit to the exclusive
jurisdiction of the English courts to support and assist the arbitration process (set out in
paragraph 39 below) including, if necessary, the grant of interlocutory relief pending the
outcome of that process.
	 
	38.2  	ICE hereby irrevocably appoints IntercontinentalExchange Services (UK) Limited whose
registered office is 3rd Floor 42 Moorgate London EC2 as its agent to accept service of
process in England in any legal action or proceedings arising out of or in connection with
this Agreement. If such process agent ceases to be able to act as such or to have an address
in England, ICE irrevocably agrees to appoint a new process agent in England reasonably
acceptable to LCH and to deliver to LCH within 14 days of such replacement appointment a copy
of a written acceptance of appointment by the replacement process agent. Nothing in this
Agreement shall affect the right to serve process in any other manner permitted by law.
	 
	39.  	Dispute Resolution
	 
	39.1  	Negotiation
	 
	39.1.1  	In the event that a dispute or difference (a “Dispute”) arises between the Parties out of or
in connection with this Agreement, the Parties shall seek to resolve the Dispute by
negotiation by referring the Dispute first to:
	 
	(i)  	in the case of LCH, any Managing Director; and

Page 53

 

	(ii)  	in the case of ICE, the Chief Operating Officer or his delegate in his absence or unavailability
	 
	   	(each a “Representative”).
	 
	39.1.2  	Such referral shall be initiated by one of the Parties notifying the other in writing that
the dispute resolution procedure set out in this sub-clause 39.1 shall apply and setting out
the nature of the Dispute. The Parties shall convene a meeting of the relevant
Representatives, and the relevant Representatives shall endeavour to resolve the Dispute,
within 5 Business Days of the date of the notice (the “Notice Date”). The joint written
decision (if any) of the relevant Representatives shall be binding on the Parties.
	 
	39.1.3  	In the event that the Dispute remains unresolved following that meeting, either Party may
refer the Dispute for further negotiation as between the Chief Executives of each of the
Parties, who (if either Party makes such election) shall meet and endeavour to resolve the
Dispute within 15 Business Days from the Notice Date. The joint written decision (if any) of
the Chief Executives shall be binding on the Parties.
	 
	39.2  	Mediation
	 
	   	In the event that the Parties are unable to resolve a matter in accordance with
sub-clause 39.1 above (and whether or not an election under sub-clause 39.1.3 above is
made), the following provisions shall apply:
	 
	39.2.1  	The Party seeking redress (the “Aggrieved Party”) shall give written notice to the other
Party setting out full particulars of the Dispute within 20 Business Days of the Notice Date.
	 
	39.2.2  	No later than 10 Business Days after service of such notice, the Aggrieved Party shall
organise a meeting (the “Dispute Resolution Meeting”) to be held at a mutually convenient
time, on a date no later than 20 Business Days from the date of service of the notice, at a
location in London. In the event that the Parties are unable to agree such a mutually
convenient time within

Page 54

 

	   	such 10 Business Day period, then the Aggrieved Party shall nominate 3
different appointment times between 8 am and 6 pm on 3 separate Business Days within the
remainder of the 20 Business Day period, and the other Party shall select one such
appointment. In default of such selection by the other Party within 2 Business Days of
notification by the Aggrieved Party of the 3 appointment times, then the Aggrieved Party shall
select one of the 3 appointment times, and notify the other Party of the date and time thereof
at least 2 Business Days in advance.
	 
	39.2.3  	Each of the Parties agrees that it shall be represented at such Dispute Resolution Meeting
by one or more of its Chief Executive, Chairman, Deputy Chief Executive, Chief Operating
Officer or (in the case of LCH) any Managing Director, and that each Party shall use its best
endeavours and negotiate in good faith with a view to resolving the Dispute with or without
financial recompense.
	 
	39.2.4  	In the event that the Parties are unable to reach a resolution of the Dispute, then they
shall adjourn the Dispute Resolution Meeting for a period of no longer than 10 Business Days
and they shall invite the services of a mutually agreed professional mediator to assist them
in achieving a resolution at the resumed meeting (the “Resumed Meeting”). The time and place
of the Resumed Meeting shall be agreed between the Parties; in default of agreement regarding
the time and place of the Resumed Meeting, the procedure set out in sub-clause 39.2.2 shall be
applied, the time periods referred to in sub-clause 39.2.2 running from the end of the 10
Business Day period referred to in this sub-clause 39.2.4. The fees of the professional
mediator shall be shared equally between the Parties and each Party shall bear its own costs
in connection with such mediation.
	 
	39.3  	Arbitration
	 
	   	If the Parties are unable to resolve the Dispute at such adjourned meeting, then such
Dispute shall be finally settled by arbitration in London pursuant to the LCIA Rules in
accordance with the Arbitration Act 1996. It is agreed that:

Page 55

 

	(i)  	the proceedings of the arbitration shall be confidential to the Parties;
	 
	(ii)  	the seat of arbitration shall be London and the place of arbitration shall be London;
	 
	(iii)  	the language of the arbitration shall be English;
	 
	(iv)  	the arbitration shall be conducted by a single arbitrator, having knowledge of or experience
in relation to international clearing systems and international financial or commodities
futures markets to be appointed by written agreement of the Parties or, failing such agreement
within 15 Business Days of one Party inviting the other to agree, by the LCIA;
	 
	(v)  	the fees of the arbitrator shall be shared equally between the Parties and, unless the
arbitrator orders otherwise, each Party shall bear its own costs in connection with the
arbitration;
	 
	(vi)  	the arbitrator shall have power to order any relief on a provisional basis which he would
have power to grant in a final award; and
	 
	(vii)  	the award of the arbitrator shall be final and binding on the Parties and, to the extent
permitted by the laws of England and Wales, the Parties hereby waive any right to any form of
appeal or to a court of law or other judicial authority.
	 
	39.4  	The Parties agree that any professional mediator involved in the mediation procedure
specified in sub-clause 39.2 above shall not take any part in any arbitration, whether as a
witness or otherwise, and any recommendations made by him in connection with such procedure
shall not be relied upon by either Party without the consent of the other Party and the
professional mediator.
	 
	39.5  	Neither Party shall, outside the negotiation and mediation procedure specified in sub-clauses
39.1 and 39.2 above, make use of, or rely upon, any “without prejudice statements” or
admissions made by the other Party in such procedures.

Page 56

 

	39.6  	Nothing in this Clause 39 shall prevent either Party from taking such action as it deems, in
its reasonable opinion, necessary in order to obtain interlocutory relief requiring compliance
with, or preventing breach of, a material term of this Agreement, including, without
limitation, initiating Court proceedings in the Courts of England and Wales. The taking of any
such action shall be without prejudice to the Parties’ obligation to negotiate and mediate
(or, as the case may be, to continue to negotiate and/or mediate) any Dispute in accordance
with sub-clauses 39.1 and 39.2 above.

Page 57

 

IN WITNESS whereof the Parties have caused this Agreement to be signed by their duly authorised
representatives on the day and year first before written.

	 	 	 	 	 
	SIGNED BY             /s/ S.Trabia	 	 
	

	 	 	 	 
	 
	 	 	 	 
	for INTERCONTINENTALEXCHANGE, INC.	 	 
	 
	 	 	 	 
	

	 	      /s/ Arun Aggarwal	 	 
	

	 	      MD — Business Management	 	 
	SIGNED BY       And Authorized signatory	 	 
	

	 	 	 	 
	

	 	     (Signatory 1)	 	 
	 
	 	 	 	 
	

	 	      /s/ Richard Heyman	 	 
	

	 	      Director	 	 
	

	 	 	 	 
	

	 	     (Signatory 2)	 	 
	 
	 	 	 	 
	for THE LONDON CLEARING HOUSE LIMITED	 	 

Page 58

 

SCHEDULE 1

NOTICES

	1.  	Notice of Termination (Paragraph 21 of the Agreement) or Notice of withdrawal of Eligible
Derivative Products in same Product Group (sub-paragraph 7.12.2) or System Issue Notice
(sub-paragraph 7.13.2)
	 
	1.1  	Any notice to be given pursuant to paragraph 21 or sub-paragraph 7.12.2 or sub-paragraph
7.13.2 of the Agreement shall be delivered by hand (including but not limited to courier) or
by pre-paid mail, marked to the attention of the person identified below, at the address set
out below in respect of that Party:

The London Clearing House Limited

Aldgate House

33 Aldgate High Street

London EC3N Lea

UK

Attention:       The Company Secretary

lntercontinentalExchange, Inc. (“ICE”)

2100 RiverEdge Parkway, Fifth Floor,

Atlanta, GA 30328, USA

Attention:       The Chief Operating Officer

(with a copy to the General Counsel although notice will be deemed to have been duly given if only
one copy of the notice is served addressed to the Chief Operating Officer)

	1.2  	Where a notice is delivered to a Party after 6 p.m. (local time) on a day which is not a
business day at the place of delivery, then the notice shall be deemed to be delivered at 9
a.m. on the next following business day at that place.

Page 59

 

	2.  	Notice relating to Default (Sub-paragraph 9.3 of the Agreement)

Any notice to be given by LCH to ICE pursuant to sub-paragraph 9.3 of the Agreement shall be given
by telephone to the Chief Operating Officer or his authorised delegate on any one of the following
the telephone numbers in the United States:

1 – 770 – 738 – 2129

1 – 770 – 933 – 9522

	3.  	Sending of a copy of a Default Notice (Sub-paragraph 9.5 of the Agreement)

A copy of a Default Notice sent by LCH to ICE pursuant to sub-paragraph 9.5 shall be sent by fax to
any one of the following fax numbers in the United States:

1 – 770 – 951 – 5481

	4.  	Sending a notice of intention to suspend or terminate contractual relationship with a
Participant (Sub-paragraph 9.6 of the Agreement)

Any notice to be given by ICE to LCH pursuant to sub-paragraph 9.6 of the Agreement shall be given
in the first instance by telephone to the Managing Director, Risk or his authorised delegate on any
one of the following telephone numbers in the United Kingdom:

+44 (0)20 7426 7000

+44 (0)20 7426 7055

followed thereafter by written notice sent by fax to any of the following fax numbers in the United
Kingdom:

+44 (0)20 7667 7351

+44 (0)20 7426 7001

	5.  	Other notices

Page 60

 

	5.1  	Any notice to be given by a Party to the other Party pursuant to any other paragraph of the
Agreement shall be given by fax to one of the fax numbers of the other Party as set out below:

LCH:

+44 (0)20 7667 7351

+44 (0)20 7426 7001

+44 (0)20 7426 7210

ICE:

1 – 770 – 951 – 5481

or delivered by hand or pre-paid mail, in all cases marked to the attention of the person
identified in section 1.1 above, to the address of the other Party as set out in section 1.1 above.

	5.2  	Where a notice is delivered by hand or pre-paid mail to a Party after 6 p.m. (local time) on
a day which is not a Business Day at the place of delivery, then the notice shall be deemed to
be delivered at 9 a.m. on the next following Business Day at that place.

	6.  	Notices sent by fax

Where any notice referred to in this Schedule is sent by fax, it shall be deemed to be delivered to
the receiving Party when receipt is confirmed telephonically between the sending Party and the
Party to whom it has been dispatched.

	7.  	Change of name, address etc

A Party shall notify the other Party to this Agreement of a change of name, relevant addressee,
address, telephone number or facsimile telephone number in writing (which notification may be sent
by fax, delivered by hand or by pre-paid mail or email to any email address which may be agreed
from time to time between the Parties provided that such notice shall only be effective on:–

(i) the date specified in the notice as the date on which the change is to take place; or

Page 61

 

(ii) if no date is specified or the date is less than two (2) Business Days (at the location of the
recipient) after the date on which such notice is received by the recipient, the day immediately
following the expiry of two (2) such Business Days after notice of any change has been received.
For the purposes of calculating such period of two Business Days, the day of receipt of the notice
shall not be included in the calculation.

Page 62

 

ANNEX 1

The Services

(Paragraph 3.1 of the Agreement)

	1.  	Terms used in this Annex shall have the same meaning as in the Agreement and in the
Regulations. In the event of any conflict, the meaning given in the Agreement shall prevail.
	 
	2.  	In accordance with the terms of this Agreement and subject to the Regulations (as defined in
sub-paragraph 1.2 of the Agreement), LCH shall provide the under mentioned central
counterparty services:-
	 
	2.1.1  	To receive matched trade particulars of Designated Trades (“the Trade Particulars”), which
are presented for registration in the names of relevant LCH EnClear Clearing Members by such
means as shall be agreed between the Parties from time to time;
	 
	2.2  	To assign the Trade Particulars to accounts opened in the names of LCH EnClear Clearing
Members;
	 
	2.3  	To allow LCH EnClear Members to designate Trade Particulars to house accounts or such other
accounts as may be agreed between the Parties from time to time;
	 
	2.4  	Subject to compliance with the Regulations by the LCH EnClear Clearing Members party to each
set of Trade Particulars (including but not limited to payment of any margin called by LCH),
to register such Trade Particulars as two LCH EnClear Contracts, as set out in the
Regulations;
	 
	2.5  	To deal with LCH EnClear Contracts in accordance with the Regulations;
	 
	2.6   	To provide to ICE and each LCH EnClear Clearing Member, a statement or summary giving details
of:-

Page 63

 

	(a)  	Designated Trades presented for registration by the LCH EnClear Clearing Members, identifying
which are to be assigned to house accounts and such other accounts as may be agreed between
the Parties from time to time;
	 
	(b)  	LCH EnClear Contracts which have been registered on the previous Clearing Day;
	 
	(c)  	LCH EnClear Contracts which have been settled from any account of the LCH EnClear Clearing
Member by virtue of daily settlement or other process;
	 
	(d)  	Amounts of money which are due to LCH from the LCH EnClear Clearing Member or vice versa and,
where applicable, details of the account/s in respect of which such amounts are due.
	 
	2.7  	Each Clearing Day, to determine the financial position of each LCH EnClear Clearing Member
with LCH, wherever reasonably possible, and to require or make such payments as are required
to discharge any resulting balance in accordance with the Regulations.
	 
	2.8  	To perform for LCH EnClear Clearing Members such other services as are assigned to LCH by the
Regulations, or as may be agreed from time to time between LCH and ICE.

Page 64

 

ANNEX 2

New Product Notice

	 	 	 	 	 	 
	 
	 	Name of New	 	 	 	 
	 	Product	 	 	 	 
	 	Intended Launch Date

	 	 	An estimate of the intended time to market for the new product.	 
	 	Description

	 	 	A brief overview of the new product. Where product may be
physically deliverable, details of proposed delivery
mechanism.	 
	 	Contract Size

	 	 	What is the intended standard contract size of the new
product; if bespoke please specify any relevant parameters.	 
	 	Contract Type

	 	 	Please provide details of the contract type, whether swap,
future, option, other derivative or cash instrument.	 
	 	Option Type

	 	 	If appropriate, please provide details of whether European,
American or Bermudan.	 
	 	Quotation Basis

	 	 	Basis upon which new product will be quoted.	 
	 	Currency

	 	 	Currency of the new product contract.	 
	 	Trading Hours

	 	 	Definition of standard trading day.	 
	 	Contract Series

	 	 	Number of months to be listed, details of whether the months
are consecutive, quarterly, other or bespoke. If bespoke
please specify any relevant parameters.	 
	 	Minimum Price

Fluctuation

	 	 	The minimum amount by which the new product contract will be
allowed to move, e.g. $0.01.	 
	 	Last Trading Day

	 	 	What will be the last trading day, when will trading cease on
the last trading day.	 
	 	Price Formation

	 	 	How will the price be formed during the day, including details
of any proposed auctions, breaks to trading.	 
	 	Contract Breaks

	 	 	Please provide details of any change to the price formation
mechanism and how the new product may be suspended from
listing for a temporary period.	 
	 	Daily Closing Price

	 	 	How will the daily closing price be determined and what will
the timing be in relation to the trading hours? Including
details of any relevant indices or industry benchmarks and
their formation. Please also advise of any models to be used
for the creation of fair values.	 
	 	Settlement Price

	 	 	Is/will the new product be physically delivered or cash
settled? If physically delivered, what delivery arrangements
are proposed including timings, delivery points, notice
periods and mechanism/s? How will the settlement price be
formed?	 
	 	Option Exercise

	 	 	If appropriate, please provide details of option exercise.	 
	 	Option Expiry

	 	 	If appropriate, please provide details of option expiry.	 
	 	Option Strike-prices

	 	 	Please provide details of option strike-prices to be listed
and criteria surrounding additional listings. Please add
details of increments to minimum increments to strike-prices.	 
	 	Option Quotation

	 	 	If appropriate, please provide details of settlement price
creation for option contracts and the option model utilised.	 
	 

 

 

	 	 	 	 	 	 
	 
	 	Name of New	 	 	 	 
	 	Product	 	 	 	 
	 	Option Volatilities

	 	 	If appropriate, please advise of the option model(s) to be
used and the method for creation of option volatilities.	 
	 	Volumes

	 	 	Estimates of likely product volumes at launch and estimated
growth in volumes.	 
	 	Price Histories

	 	 	Please provide a minimum of two years worth of price history
along with at-the-money option volatilities(if relevant).	 
	 	Margin Offsets

	 	 	Please provide details of all contracts cleared by LCH in
respect of which you wish LCH to investigate offering margin
offsets.	 
	 	Any other relevant

information
	 	 	 	 
	 

Signed for and on behalf of ICE:

Date
————————————

 

 

ANNEX 3

The Initial Products

Contract (LCH EnClear Eligible Derivative Product): WTI Bullet Swap

	 	 	 	 	 	 
	 
	 	DESCRIPTION

	 	 	Monthly cash settled, West Texas Intermediate Light
Sweet Crude Oil	 
	 	Contract Size

	 	 	1000 US Barrels (42,000 US gallons)	 
	 	Currency

	 	 	US Dollars and cents per barrel	 
	 	Minimum Price

Fluctuation

	 	 	One cent ($0.01) per US barrel	 
	 	Last Trading Day

	 	 	Close of business on the fourth day prior to the 25th
calendar day of the month preceding the contract
series. If the 25th calendar day of the month is not a
business day, close of business on the fourth business
day prior to the last business day preceding the 25th
calendar day of the month preceding the contract
series	 
	 	Fixed Price

	 	 	The traded price or the previous day’s settlement price	 
	 	Floating Price

	 	 	In respect of daily settlement, the Floating Price
will be determined by ICE (or otherwise in accordance
with the Procedures) using price data from a number of
sources including spot, forward and derivative markets
for both physical and financial products.
In respect of final settlement, the Floating Price
will be a price in US$  per barrel being the monthly
last settlement price for crude oil (light sweet)
published by the New York Mercantile Exchange NYMEX)
for the month of production as per ISDA commodity
definitions	 
	 	Contract series

	 	 	30 consecutive calendar months commencing with the
next calendar month	 
	 	Final Payment Dates

	 	 	The date which is two days (being Opening Days in
respect of the LCH EnClear Service for ICE originated
transactions) following the Last Trading Day	 
	 	Business day

Convention

	 	 	Preceding	 
	 	Business days

	 	 	US business days	 
	 

 

 

Contract (LCH EnClear
Eligible Derivative Product): Natural Gas Swap,

Fixed for NYMEX LD1

	 	 	 	 	 	 
	 
	 	DESCRIPTION

	 	 	Monthly cash settled, Natural Gas, Henry Hub.	 
	 	Contract Size

	 	 	2500 mm Btu’s	 
	 	Unit of trading

	 	 	Contract Size multiplied by the number of days in the
month traded. For example in a 30-day month, such as
November, the unit of trading will be 30 x 2500 or
75,000 mm Btu’s. This will be expressed as 30 “units”
or “lots” in TRS with 4 possible units of trading,
being 28, 29, 30 and 31 each multiplied by 2500mm
Btu’s	 
	 	Currency

	 	 	US Dollars and cents	 
	 	Minimum Price

Fluctuation

	 	 	One tenth of a cent ($0.001) per mm Btu	 
	 	Last Trading Day

	 	 	Close of business three business days prior to the
first calendar day of the contract series	 
	 	Fixed Price

	 	 	The traded price or the previous day’s settlement price	 
	 	Floating Price

	 	 	In respect of daily settlement, the Floating Price for
daily settlement will be determined by ICE (or
otherwise in accordance with the Procedures) using
price data from a number of sources including spot,
forward and derivative markets for both physical and
financial products.

In respect of final settlement the Floating Price will
be a price in US$  per mm Btu dry equal to the monthly
last settlement price for natural gas as published by
the New York Mercantile Exchange (NYMEX) for the month
of production per ISDA commodity definitions	 
	 	Contract series

	 	 	30 consecutive calendar months commencing with the
next calendar month	 
	 	Final Payment Dates

	 	 	The business day following the Last Trading Day	 
	 	Business day

Convention

	 	 	N/A	 
	 	Business days

	 	 	US business daysEX-10.13

 

Exhibit 10.13

Dated:           October 2003

THE INTERNATIONAL PETROLEUM EXCHANGE OF

LONDON LIMITED

and

THE LONDON CLEARING HOUSE LIMITED

Clearing Services Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain
information in this agreement has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Contents	 	Page
	1 Definitions and Interpretation
	 	 	1	 
	2 Term
	 	 	7	 
	3 Scope of this Agreement
	 	 	7	 
	4 Fair Treatment
	 	 	10	 
	5 Relationship Management
	 	 	13	 
	6 Change Control
	 	 	13	 
	7 Information Technology and Data Protection
	 	 	15	 
	8 Responsibility of LCH
	 	 	15	 
	9 Intellectual Property Rights
	 	 	15	 
	10 Representations, Warranties, Undertakings and Indemnities
	 	 	16	 
	11 Confidentiality
	 	 	17	 
	12 Limitation of Liability
	 	 	19	 
	13 Force Majeure
	 	 	20	 
	14 Termination Events
	 	 	22	 
	15 General
	 	 	23	 
	16 Dispute Resolution
	 	 	26	 
	17 Jurisdiction
	 	 	29	 
	Schedule 1: The Services
	 	 	31	 
	Schedule 2: Service Levels
	 	 	38	 
	Schedule 3: Business Continuity Arrangements
	 	 	39	 
	Schedule 4: Fees
	 	 	41	 
	Schedule 5: Change Control
	 	 	45	 
	Schedule 6: Relationship Management
	 	 	47	 

 

 

	 	 	 	 	 
	Contents	 	Page
	Schedule 7: Benchmarking Process
	 	 	49	 
	Schedule 8: Exit Management
	 	 	52	 
	Schedule 9: IPE Dependencies
	 	 	54	 
	Schedule 10: Information Technology and Data Protection
	 	 	56	 
	Schedule 11: IPE Regulations
	 	 	58	 

 

 

This Agreement is made on           October 2003 between:

	(1)  	The International Petroleum Exchange of London Limited whose registered office is at
International House, 1 St Katharine’s Way, London E1W 1 UY (“the IPE”); and

	(2)  	The London Clearing House Limited whose registered office is at Aldgate House, 33 Aldgate
High Street, London EC3N 1 EA (“LCH”) (each a “Party” and together the “Parties”).

Recitals:

	(A)  	The IPE carries on the business of operating an Exchange for the trading and execution of
Futures and Options.

	(B)  	LCH is a Recognised Clearing House and provides central counterparty and ancillary services
to the IPE in such capacity.

	(C)  	Under an agreement dated 28 May 1988, the IPE appointed LCH as the clearing house to provide
services in relation to certain contracts traded on the IPE. The IPE and LCH now wish to amend
the terms and conditions upon which LCH provides these services.

It is agreed as follows:

	1  	Definitions and Interpretation
	 
	1.1  	The following definitions shall apply unless the context requires otherwise:
	 
	   	“Agreed Period” means the period of five years from the Olympus Completion Date or, if
shorter, the Term.
	 
	   	“Board” means the board of directors of the relevant company.
	 
	   	“Business Continuity Arrangements” means the arrangements referred to in Schedule 3
(Business Continuity Arrangements).
	 
	   	“Business Day” means Monday to Friday inclusive except for days which are English bank or
public holidays.
	 
	   	“CFTC” means the Commodity Futures Trading Commission of the United States of America
and, where applicable, any successor thereto.
	 
	   	“Change” has the meaning ascribed to that term by sub-clause 6.2.
	 
	   	“Change Control Procedure” means the procedure for agreeing amendments to this Agreement
contained in Schedule 5 (Change Control).
	 
	   	“Clearing Member” means an IPE Member who is, at the relevant time, a member of LCH
authorised by LCH to clear eligible IPE Contracts.

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	   	“Clearing Membership Agreement” means the agreement by that name as prescribed from time
to time by LCH and any authorisation given by LCH to a member to clear IPE Contracts.
	 
	   	“Client Account” means an account of a Clearing Member maintained with LCH in respect of
the Clearing Member’s transactions for segregated customers, which is designated by LCH
as a client account.
	 
	   	“Contract Rules” has the meaning ascribed to that term in the IPE Regulations.
	 
	   	“Current Contract” means any of the following contracts: IPE Brent Futures and Options
Contracts, the IPE Gas Oil Futures and Options Contracts and the IPE Natural Gas Futures
Contract, traded as such on the IPE at the date of this Agreement.
	 
	   	“Default Notice” has the meaning ascribed to it in the LCH Regulations.
	 
	   	“Energy Product” means contracts, including Options and Futures, over or in respect of
oil and oil products, coal, natural gas, electricity or any other similar products.
	 
	   	“Exchange” means a Recognised Investment Exchange or a body providing similar functions
and which is subject to equivalent standards whether in the United Kingdom or elsewhere.
	 
	   	“Exit Management Plan” has the meaning ascribed to that term in Schedule 8 (Exit
Management).
	 
	   	“Exit Phase” means the period commencing on the date a notice to terminate this Agreement
is served pursuant to Clause 14 and ending on the completion of the replacement of
services by (a) Successor Operator(s).
	 
	   	“Fees” means the charges made by LCH to Clearing Members in respect of the Services, as
subject to Schedule 4 (Fees).
	 
	   	“Force Majeure Event” has the meaning ascribed to that term in sub-clause 13.1.
	 
	   	“FSA” means the Financial Services Authority and, where applicable, any successor
thereto.
	 
	   	“FSA Rules” means the relevant rules made by FSA from time to time.
	 
	   	“FSMA” means the Financial Services and Markets Act 2000.
	 
	   	“Futures” means any futures or contracts for differences etc. contract as defined by
Articles 84 and 85 of the Financial Services and Markets Act 2000 (Regulated Activities)
Order 2001 admitted for trading on the IPE.
	 
	   	“Good Industry Practice” means, in relation to any undertaking and any circumstances, the
exercise of the degree of skill, care, prudence and foresight and application of
standards which could then reasonably be expected of a skilled and

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	   	experienced person engaged in providing services of the nature of the relevant Services.
	 
	   	“Group” has the same meaning as in the Companies Act 1985 and “Group Companies” means
persons (whether or not companies) who are (or, if they were companies, would be) in the
same Group.
	 
	   	“Intellectual Property Rights” means trade marks, service marks, trade names, logos,
get-up, patents, inventions, registered and unregistered design rights, copyrights,
database rights, domain names and all other similar proprietary rights in the United
Kingdom (including know-how) including, where such rights are obtained or enhanced by
registration, any registration of such rights and applications and rights to apply for
such registrations.
	 
	   	“IPE Contract” means any and all types of Futures or Options on the terms of an Exchange
contract which may now, or at any future time, be tradable under the IPE Regulations and
which, under the IPE Regulations and the LCH Regulations, are permitted or required to be
presented for registration and clearing to LCH.
	 
	   	“IPE Contract Manager” means the person(s) nominated by the IPE to manage the
relationship between the Parties under this Agreement.
	 
	   	“IPE Dependency” means those activities and/or matters set out in Schedule 9 (IPE
Dependencies), being activities and/or matters upon which LCH’s ability to perform some
or all of the Services is dependent.
	 
	   	“IPE Market” means a market operating under the IPE Regulations.
	 
	   	“IPE Materials” means: (1) any Material (including, for the avoidance of doubt, the
Current Contracts and any New Contracts) provided or made available by or on behalf of
the IPE or any member of the IPE Group to LCH under this Agreement or relating to the
Services, whether or not developed by LCH; and (2) any Material developed by LCH or a
Group Company of LCH for the IPE where that development has been commissioned and paid
for by the IPE.
	 
	   	“IPE Member” means a member of the IPE as defined in the IPE Regulations.
	 
	   	“IPE Regulations” means the regulations, rules and Contract Rules of the IPE as from time
to time in force and/or any arrangements, directions and provisions made thereunder, as
the context may require.
	 
	   	“IPE Regulators” means FSA and any other relevant regulator in another jurisdiction.
	 
	   	“IPE System” means the IT System owned or used by the IPE in connection with the
Services.
	 
	   	“IT System” means:

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	 	(i)  	computer equipment (including, without limitation, computer processors,
computer terminals, printers, modems, input devices, output devices, other computer
peripherals, communications equipment and consumables); and
	 
	 	(ii)  	computer programs (including, without limitation, scripts, templates,
operating systems, application programs, macros, batch codes, databases, and
associated specifications, plans, methodologies, reports, processes, designs and
know-how).

	   	“Law” means relevant laws and licences, statutory instruments, rules and regulations
having the force of law imposed by a governmental or other regulatory authority from time
to time.
	 
	   	“LCH Contract Manager” means the person(s) nominated by LCH to manage the relationship
between the Parties created by this Agreement.
	 
	   	“LCH General Policy” means the general policy which LCH uses with regard to the markets
for which it provides central counterparty services, which is to treat all markets
substantially equally, except to the extent that LCH reasonably determines that the
requirements applicable to a market must be tailored to meet the characteristics and
needs of the particular market place, or to ensure and maintain standards that do not
adversely affect LCH’s risk, or to maintain the integrity and security appropriate to the
relevant market.
	 
	   	“LCH Materials” means any specifications, plans, methodologies, software, databases,
reports, processes, designs, documentation and know-how provided or made available by or
on behalf of LCH to the IPE for the proper purposes of this Agreement other than the IPE
Materials.
	 
	   	“LCH Procedures” means the procedures of LCH as from time to time in force, as published
from time to time by LCH.
	 
	   	“LCH Regulations” means the Regulations and Default Rules of LCH, as published from time
to time by LCH.
	 
	   	“London SPAN” means the margining system operated by LCH as at the date of this Agreement
and known as “London SPAN”.
	 
	   	“Material” means specifications, plans, methodologies, software, databases, reports,
processes, designs, documentation, information and/or know-how.
	 
	   	“New Contract” means, at the relevant time, any Futures or Options contract which is not
a Current Contract but which is introduced to trading by the IPE and accepted for
clearing by LCH pursuant to paragraph 6 of Schedule 1 (The Services).
	 
	   	“Olympus Completion Date” means the date upon which the proposed merger (as set out in
the Scheme Document) between LCH and Clearnet SA is completed. For this purpose, “Scheme
Document” means the document by that name which has been, or will be, sent to the
shareholders of LCH setting out details of a proposed

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	   	establishment of LCH Clearnet Group Limited as a holding company of LCH and Clearnet SA
and containing details of the Scheme of Arrangement to be made under section 425 of the
Companies Act 1985.
	 
	   	“Options” means any options contract as defined by Article 83 of the Financial Services
and Markets Act 2000 (Regulated Activities) Order 2001 admitted for trading on the IPE.
	 
	   	“Recognised Clearing House” or “RCH” means a clearing house recognised under FSMA.
	 
	   	“Recognised Investment Exchange” or “RIE” means an exchange recognised under FSMA.
	 
	   	“Recognition Requirements” means the threshold conditions for recognition of a Recognised
Investment Exchange or, as the case may be, a Recognised Clearing House for the purposes
of FSMA and the regulatory obligations of a Recognised Investment Exchange or, as the
case may be, a Recognised Clearing House, including the Financial Services and Markets
Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses)
Regulations 2001 and the provisions of REC in the FSA Rules, each as amended from time to
time.
	 
	   	“Registration System” means the trade registration system, including the relevant
hardware and software, from time to time used by the IPE to support the registration of
IPE Contracts, pre-trade administration and the routing of matched trades to LCH, being
at the date of this Agreement the system known as TRS.
	 
	   	“Registered Contract” means a contract arising between a Clearing Member and LCH upon the
registration of an IPE Contract pursuant to the LCH Regulations.
	 
	   	“Rules” means the IPE Regulations, the LCH Regulations and the LCH Procedures.
	 
	   	“Service Levels” means the measure(s) of the standard(s) to which the Services are to be
performed, as set out in Schedule 2 (Service Levels).
	 
	   	“Services” means the services provided by LCH pursuant to this Agreement, as defined in
paragraph 1 of Schedule 1, as amended from time to time in accordance with this Agreement
(The Services). References in this Agreement to the provision or receipt of the Services
to/by the IPE mean the provision or receipt of such of the Services to be provided to IPE
as described in Schedule 1 (The Services).
	 
	   	“Successor Operator(s)” means the entity or entities (which may include the IPE)
succeeding LCH in the provision or operation of services similar to and/or part of all of
the Services.
	 
	   	“Term” has the meaning ascribed to it in Clause 2.

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	1.2  	Interpretation Act 1978
	 
	   	The Interpretation Act 1978 shall apply to this Agreement in the same way as it applies
to an Act of Parliament.
	 
	1.3  	Subordinate legislation
	 
	   	References to a statutory provision include any subordinate legislation made from time to
time under that provision.
	 
	1.4  	Modification, etc. of statutes
	 
	   	References to a statute or statutory provision include that statute or provision as from
time to time modified or re-enacted or consolidated whether before or after the date of
this Agreement so far as such modification or re-enactment or consolidation applies or is
capable of applying to this Agreement and (so far as liability thereunder may exist or
can arise) shall include also any past statutory provision (as from time to time modified
or re-enacted or consolidated) which such provision has directly or indirectly replaced,
provided that nothing in this sub-clause 1.4 shall operate to increase the liability of
any Party beyond that which would have existed had this sub-clause 1.4 been omitted.
	 
	1.5  	Companies Act 1985
	 
	   	The expression “holding company” shall have the same meaning in this Agreement as its
definition in the Companies Act 1985.
	 
	1.6  	Clauses, Schedules, etc.
	 
	   	References to this Agreement include any Recitals and Schedules to it and this Agreement
as from time to time amended and references to Clauses, sub-clauses, paragraphs,
sub-paragraphs and Schedules are to Clauses, sub-clauses, paragraphs and sub-paragraphs
of, and Schedules to, this Agreement.
	 
	1.7  	Winding-up
	 
	   	References to the winding-up of a person include the amalgamation, reconstruction,
reorganisation, administration, dissolution, liquidation, merger or consolidation of such
person and any equivalent or analogous procedure under the law of any jurisdiction in
which that person is incorporated, domiciled or resident or carries on business or has
assets.
	 
	1.8  	Information
	 
	   	Any reference to books, records or other information means books, records or other
information in any form including paper, electronically stored data, magnetic media, film
and microfilm.

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	1.9  	Analogous terms, etc.
	 
	1.9.1  	Any reference to any English legal term or concept (including for any action, remedy, method
of judicial proceeding, document, legal status, statute, court, official governmental
authority or agency) shall, in respect of any jurisdiction other than England, be interpreted
to mean the nearest and most appropriate analogous term to the English term in the legal
language in that jurisdiction, as the context reasonably requires, so as to produce, as nearly
as possible, the same effect in relation to that jurisdiction as would be the case in relation
to England.
	 
	1.9.2  	The words “include”, “includes” and “including” and any words following them shall be
construed without limitation to the generality of any preceding words or concepts and vice
versa.
	 
	2  	Term
	 
	2.1  	This Agreement will come into effect on the date of this Agreement, except that the
provisions listed in sub-clause 2.2 below will come into effect on the Olympus Completion
Date. This Agreement shall continue in force until terminated in accordance with the terms of
this Agreement (the “Term”).
	 
	2.2  	The provisions referred to sub-clause 2.1 above are:

	 	(i)  	sub-clause 3.3 (Charges) and Schedule 4 (Fees);
	 
	 	(ii)  	sub-clause 4.1 (Provision of Trading Facilities);
	 
	 	(iii)  	sub-clause 4.2 (Exclusive Arrangements); and
	 
	 	(iv)  	sub-clause 15.2 (Whole Agreement) with respect to the matters referred to
in the other provisions listed in this sub-clause 2.2.

	2.3  	The Parties agree that with effect from the date of this Agreement, the agreement between
them entitled “Agreement as to Clearing” dated 27 May 1988, together with all amendments
thereto (including but not limited to the letter dated 1 July 1996 between the Parties in
respect of that agreement) shall terminate and cease to have any force and effect.
	 
	3  	Scope of this Agreement
	 
	3.1  	Appointment and Services
	 
	3.1.1  	LCH shall provide the Services during the Term in accordance with the terms of this
Agreement.
	 
	3.1.2  	In accordance with the terms of this Agreement, LCH shall be central counterparty to, and
clear, IPE Contracts submitted to it for clearing.
	 
	3.1.3  	The Parties acknowledge that some of the Services will be provided to Clearing Members and
some to the IPE. The provision of those Services to Clearing Members,

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	   	and the relationship between those Clearing
Members and LCH, shall be governed by and
subject to, inter alia, the Clearing
Membership Agreement and the LCH Regulations.
The Parties acknowledge and agree that neither
the Clearing Members nor the IPE Members nor
any other person (other than the Parties)
shall acquire any rights in respect of this
Agreement.
	 
	3.2  	Nature of Appointment
	 
	   	LCH is the IPE’s preferred supplier of the Services. LCH acknowledges that the IPE has
the right to obtain services (including any one or more of the Services), whether
generally or in relation to a particular type or types of IPE Contract, directly from
other persons (whether the IPE itself, any member of the IPE Group, or a third party).
	 
	3.3  	Charges
	 
	   	LCH shall be entitled to charge clearing fees to Clearing Members in accordance with
Schedule 4 (Fees) to this Agreement.
	 
	3.4  	Adoption of and Adherence to Service Levels
	 
	3.4.1  	The Parties agree from the date of this Agreement to negotiate in good faith with a view to
agreeing Service Levels in respect of the Services. The Parties shall arrange a meeting within
2 months of the date of this Agreement, at which meeting duly authorised representatives of
the Parties shall attend and seek to agree a process and timetable for achieving agreement to
Service Levels. That timetable shall provide for completion of the process within 9 months of
the date of this Agreement except as the Parties may otherwise agree. Completion of that
process will be achieved when the Parties each sign a copy of the agreed form document to
constitute Schedule 2 (Service Levels). For the avoidance of doubt, the Change Control
Procedure shall not apply to this process.
	 
	3.4.2  	Except in the instances where the Parties expressly agree otherwise, the Service Levels
shall include sanctions for material or persistent failure to meet the agreed Service Levels.
The Service Levels shall classify breaches as minor, material or very material and set out the
sanction in each case. Persistent minor failures shall be deemed material and persistent
material failures shall be deemed very material. One or more very material failures shall
constitute a material breach of this Agreement. Sanctions for material breaches may include an
adjustment to clearing fees.
	 
	3.4.3  	LCH shall provide the Services in accordance with:

	 	(i)  	The Service Levels, Good Industry Practice and the terms of this
Agreement (including, without limitation, Schedules 1 (The Services), 2 (Service
Levels) and 10 (Information Technology and Data Protection); and
	 
	 	(ii)  	English Law and/or the Law of domicile of Clearing Members, as
applicable.

	3.5  	Service Review

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	3.5.1  	The IPE and LCH shall conduct periodic reviews of the provision of the Services and the
terms upon which the Services are provided in order to assist the IPE in complying with FSA’s
principles on material outsourcing so as to ensure that the IPE complies with its obligations
as a Recognised Investment Exchange under FSMA and the Financial Services and Markets Act 2000
(Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001.
These reviews shall be on such terms and such frequency as may be agreed between LCH and the
IPE from time to time.
	 
	3.5.2  	Following any such review, either Party may request changes in the Services or Service
Levels to reflect the changed business requirements of either Party and/or advancements in
technology. All such requests shall be dealt with in accordance with the Change Control
Procedure.
	 
	3.6  	Problem Reporting
	 
	3.6.1  	LCH agrees to maintain appropriate records with regard to the provision of the Services.
	 
	3.6.2  	LCH shall promptly report in writing to the IPE Contract Manager any (actual or anticipated)
material failures, problems or developments which have had, or may have, an adverse effect on
the provision of the Services. Any relevant internal audit report concerning such failure
shall be provided promptly to the LCH Board.
	 
	3.7  	Insurance
	 
	   	LCH shall take out and maintain such insurance as shall, in accordance with good market
practice, be appropriate to the nature and scale of its operations, details of which
shall be provided to the LCH Board.
	 
	3.8  	Business Continuity
	 
	   	LCH shall take all reasonable steps to ensure business continuity, including (without
limitation) the steps set out in Schedule 3 (Business Continuity Arrangements).
	 
	3.9  	Benchmarking
	 
	   	The Services and Service Levels shall be subject to benchmarking, as provided in Schedule
7 (Benchmarking Process).
	 
	3.10  	Publicity and Public Announcements
	 
	3.10.1  	Approval
	 
	   	Neither Party shall make any public announcement relating to this Agreement or changes to
the Services, without the prior approval of the other Party. For the purposes of this
sub-clause 3.10, but without prejudice to Clause 11 (Confidentiality), “public
announcement” shall not include: (i) any communication in whatsoever form which does not
relate to communicating the terms of this Agreement and which relates to matters in the
ordinary course of business announced to any Clearing

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	   	Member or IPE Member; or (ii) any information which does not relate to communicating the
terms of this Agreement and which relates to matters in the ordinary course of business
and which is posted on any part of any private “member only” web site operated by either
LCH or the IPE.
	 
	3.10.2  	Oral Statements, etc.
	 
	   	Any oral statements made, or replies to questions given, by either Party relating to the
Services or this Agreement shall be consistent with any public announcements issued in
accordance with sub-clause 3.10.1 above.
	 
	4  	Fair Treatment
	 
	4.1  	Provision of Trading Facilities
	 
	   	LCH agrees that, for the Agreed Period, neither it nor any Group Company of LCH will
provide trading, matching or execution services as provided by an Exchange for any Energy
Product; provided that nothing in this sub-clause 4.1 or elsewhere in this Agreement
shall prevent it from providing central counterparty or other clearing services.
	 
	4.2  	Exclusive Arrangements
	 
	4.2.1  	Neither LCH nor any Group Company of LCH will enter into any arrangement which would (i)
prohibit LCH from providing the Services in relation to a Current Contract or any New
Contract; or (ii) otherwise prevent, penalise or discourage LCH from providing the Services.
	 
	4.2.2  	In the event that [***] in accordance with the LCH General Policy.
	 
	4.3  	Services to be competitive
	 
	   	LCH agrees that, unless more beneficial or favourable terms are offered to other persons
for objectively justifiable and non-discriminatory reasons (including material
differences in volume and material exchange subsidy of LCH development or operating costs
by another person), the terms upon which LCH provides the Services shall be no less
favourable than the terms offered to such other persons in accordance with the LCH
General Policy.
	 
	4.4  	Margin
	 
	   	With respect to the Services:
	 
	4.4.1  	LCH shall calculate initial margin requirements for Clearing Members by the use of London
SPAN or as otherwise set out in this sub-clause 4.4. This shall not prevent the IPE from
setting rates of initial margin in respect of IPE Contracts to be charged by IPE Members to
their clients; provided that, a rate of initial margin set by the IPE
	 
	

	***  	Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.

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	   	(or any alteration thereof) shall not be less than that required of Clearing Members by
LCH.
	 
	4.4.2  	LCH shall set and periodically review the margin rates and other parameters for Registered
Contracts used in London SPAN. The Parties shall consult on any proposed amendment thereto.
LCH may increase a margin rate or change a parameter having the effect of increasing the
amount of required margin following such consultation, but may only reduce a margin rate or
change a parameter having the effect of reducing the amount of required margin with the IPE’s
prior written consent.
	 
	4.4.3  	Subject to 4.4.4 below if either of the Parties proposes the adoption of another
scenario-based margining system that employs contract level margin rates and inter-contract
margin offsets to replace London SPAN the Parties shall consult on the proposal. Following
such consultation LCH may adopt such a replacement margining system.
	 
	4.4.4  	If either Party proposes, within the framework of London SPAN or of a replacement scenario
based margining system adopted pursuant to sub-clause 4.4.3 above, to permit margin offsets
between Registered Contracts whether individually or in aggregate and: (i) contracts in other
Energy Products cleared by LCH; or (ii) contracts in other Energy Products not cleared by LCH,
the Parties shall consult and the LCH may make the change in question only with the IPE’s
prior written consent.
	 
	4.5  	Fair allocation of resources
	 
	   	LCH shall apply the LCH General Policy to the allocation of LCH’s staff and resources in
the performance of the Services. For the purposes of this sub-clause 4.5, the IPE Group
shall be viewed as a single unit.
	 
	4.6  	Integrity of IPE Open Interest
	 
	   	LCH agrees that, without the prior written consent of the IPE, neither LCH nor any Group
Company of LCH shall:
	 
	4.6.1  	other than following the issue by LCH of a Default Notice in respect of any Clearing Member
or in respect of transfers of any Registered Contracts between Clearing Members, permit the
transfer or close-out of any Registered Contract by means of any transfer to, or transaction
executed on or through, any Exchange, market or system other than the IPE;
	 
	4.6.2  	permit any open interest in IPE Contracts to be represented as open interest on other
Exchanges, markets or systems;
	 
	4.6.3  	otherwise than in accordance with sub-clause 4.4 above, permit any inter-contract credit,
inter-commodity credit or other position offset for margin purposes between IPE Contracts and
any other contracts cleared by LCH;

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	4.6.4  	amalgamate the delivery process for any Registered Contract with the delivery process for
any other contract cleared by LCH, provided that, in the event that LCH makes a proposal to
the IPE regarding the amalgamation of any such delivery process, the IPE will give reasonable
consideration to such proposal; or
	 
	4.6.5  	permit the inclusion of any Registered Contracts, or open interest in any IPE Contracts, in
any mutual offset arrangements with another clearing house.
	 
	4.7  	Representation and Consultation
	 
	4.7.1  	LCH agrees that the IPE shall be entitled to appoint: (i) an IPE representative (being an
IPE member of staff with appropriate knowledge and expertise of risk issues) to the LCH Risk
Committee; and (ii) an IPE representative (being an IPE member of staff with appropriate
knowledge and expertise of the business of that committee) to any other committee set up or
organised by LCH, the members or attendees of which may include representatives of persons
other than LCH and whose decisions and/or issues which it considers may affect all or part of
the IPE’s business or any business similar to the IPE’s business.
	 
	4.7.2  	LCH agrees that the IPE may appoint a representative to the energy product advisory group
immediately upon its formation.
	 
	4.7.3  	Reference in this sub-clause 4.7 to any committee or group includes that committee or group
by whatever name called and whether of LCH and/or any parent company or any one or more
committees or groups which take on one or more of the functions of such group or committee and
any sub-committee or subgroup of such group or committee.
	 
	4.8  	Membership of LCH
	 
	4.8.1  	Any IPE Member which is not a Clearing Member will be eligible to become a Clearing Member,
subject to such entry and other requirements as may be set out in the LCH Regulations and
adopted by LCH in accordance with the LCH General Policy.
	 
	4.8.2  	LCH will (i) consult with the IPE with regard to any amendment to existing LCH membership
requirements which might have a disproportionate adverse effect on Clearing Members or IPE
Members or applicants to become Clearing Members; (ii) give due consideration to the views of
the IPE; and (iii) only make such amendments as are consistent with the LCH General Policy.
	 
	4.8.3  	LCH agrees to maintain, and make publicly available, criteria for membership of LCH and to
apply such criteria in respect of any application for membership by a member of the IPE in
accordance with applicable law.
	 
	4.9  	IPE Contracts to be cleared by IPE Members
	 
	   	LCH shall not permit any LCH member which is not also an IPE Member to be the Clearing
Member for any IPE Contract.

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	4.10  	Default
	 
	   	Before issuing a Default Notice pursuant to the LCH Regulations to a Clearing Member who,
at the relevant time, has open interest in relation to IPE Contracts, LCH shall take all
steps as are reasonably practicable in the circumstances to consult with the IPE and
shall notify the IPE at least 30 minutes prior to issuing such Default Notice.
	 
	4.11  	Communication with Regulators
	 
	4.11.1  	Each of the Parties agrees promptly to notify the other Party of any material regulatory
issues or problems relating to the Services. The Parties agree to use all reasonable
endeavours to address such issues or problems in order to enable the Parties to comply with
their respective regulatory obligations.
	 
	4.11.2  	Each Party shall immediately notify the other Party if it receives a notification that FSA
is: (i) considering withdrawal of its status as a Recognised Clearing House or Recognised
investment Exchange, as the case may be; (ii) exercising powers of direction in such a manner
that may impact on the Services; or (iii) considering exercising such powers.
	 
	4.12  	Co-operation with auditors
	 
	4.12.1  	Each Party shall, upon the other Party’s (the “Requesting Party”) reasonable request and at
the Requesting Party’s expense, provide reasonable co-operation to any person carrying out a
statutory or financial services regulatory audit, investigation, information gathering or
similar function on the Requesting Party’s business, provided that nothing in this sub-clause
4.12 shall require a Party to breach any obligation or duty of confidentiality.
	 
	4.12.2  	LCH shall notify the IPE of any issues identified by LCH’s internal or external auditors
which affect or may affect LCH’s ability to provide the Services in accordance with this
Agreement.
	 
	5  	Relationship Management
	 
	   	The IPE and LCH shall each appoint (a) person/s to be contract manager and nominate a
senior executive to manage their relationship pursuant to this Agreement, including the
provision of the Services, in accordance with the provisions of Schedule 6 (Relationship
Management).
	 
	6  	Change Control
	 
	6.1  	Amendment to the Rules
	 
	6.1.1  	Power to amend
	 
	6.1.1.1  	The IPE may at any time extend or amend the IPE Regulations and, without limitation,
Schedule 11 (IPE Regulations) shall apply.

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	6.1.1.2  	LCH may at any time extend or amend the LCH Regulations and/or the LCH Procedures.
	 
	6.1.2  	Obligation to consider amendments
	 
	6.1.2.1  	The IPE shall consider in good faith making such amendments to the IPE Regulations as LCH
may reasonably request.
	 
	6.1.2.2  	LCH shall consider in good faith making such amendments to the LCH Regulations and/or the
LCH Procedures as the IPE may reasonably request.
	 
	6.1.3  	Procedure for amendment
	 
	   	A Party preparing to make any extension or amendment of its Rules which may affect the
other Party shall, in so far as is practicable in the circumstances: (i) consult with the
other Party and give the other Party such prior written notice of the final form and
content of the extension or amendment as may be practicable in the circumstances; and
(ii) in the case of such an extension or amendment which may have a material adverse
effect on the other Party, or as the case may be, an IPE Member, give the other Party
(except in the case of exercise of emergency powers under the Rules) no less than 10
Business Days’ written notice of the final form and content of the extension or amendment
prior to its coming into effect.
	 
	6.1.4  	Regulatory Requirements
	 
	6.1.4.1  	Without the prior written consent of LCH, unless so directed by FSA or a court of competent
jurisdiction, the IPE shall not adopt any provision in the IPE Regulations which may have the
effect of imposing on either Party an obligation which is inconsistent with this Agreement or
FSMA and/or the Recognition Requirements.
	 
	6.1.4.2  	Without the prior written consent of the IPE, unless so directed by FSA or a court of
competent jurisdiction, LCH shall not adopt any provision in the LCH Regulations and/or LCH
Procedures which may have the effect of imposing on either Party an obligation which is
inconsistent with this Agreement or FSMA and/or the Recognition Requirements.
	 
	6.2  	Amendment to this Agreement
	 
	   	Where either Party wishes to make a change to this Agreement or any of the Schedules to
this Agreement, other than the initial agreement of Schedule 2 (Service Levels) pursuant
to sub-clause 3.4 above, or any document agreed pursuant to this Agreement (a “Change”),
including:

	 	(i)  	the addition of new services or modification of existing Services;
	 
	 	(ii)  	the addition of new service levels or modification of existing Service
Levels; and/or
	 
	 	(iii)  	the addition of a New Contract,

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	      then Schedule 5 (Change Control) shall apply in respect of the Change.

	7  	Information Technology and Data Protection
	 
	   	The Parties shall comply with the provisions of Schedule 10 (information Technology and
Data Protection), as applicable.
	 
	8  	Responsibility of LCH
	 
	   	Subject to clause 12, LCH shall be responsible for a failure to perform its obligations
under this Agreement, save to the extent that such failure arises solely or mainly as a
result of:

	 	(i)  	any relevant IPE Dependency not being delivered; or
	 
	 	(ii)  	a Force Majeure Event, which event shall be dealt with in accordance with
Clause 13.

	9  	Intellectual Property Rights
	 
	9.1  	Materials
	 
	9.1.1  	As between the IPE and LCH:

	 	(i)  	the IPE shall own all Intellectual Property Rights in the IPE Materials;
and
	 
	 	(ii)  	LCH shall own all Intellectual Property Rights in the LCH Materials.

	9.1.2  	Each Party agrees to do all things and to execute all deeds, instruments, transfers or other
documents as may be necessary or desirable in order to give effect to this sub-clause 9.1.
	 
	9.2  	Licences
	 
	   	Each Party agrees to grant to the other Party such non-transferable and royalty-free
licences as may be necessary for the purpose of enabling the proper performance of this
Agreement in accordance with its terms; provided that if, as a result of a material
change in the Services, due to a Change initiated by the IPE or otherwise agreed by the
IPE, a new licence is necessary for such proper performance, the Parties shall agree to
the terms, including any fees, on which such licence shall be granted.
	 
	9.3  	Intellectual Property Rights Infringements
	 
	9.3.1  	Subject to sub-clause 9.3.4 below, LCH shall indemnify and keep the IPE indemnified from and
against any and all actions, claims, proceedings, losses, damages, costs, expenses (including
court and legal costs) and other liabilities of whatever nature (“Claims”) suffered, incurred
or sustained by the IPE as a result of any action, claim or proceeding made or brought by any
person alleging that the provision of those of the Services which are provided by LCH to the
IPE and their receipt by the IPE or the IPE’s use or possession of the LCH Materials or the
Material referred to in paragraph

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	(2)  	of the definition of “IPE Materials” or any part of them infringes the rights
(including Intellectual Property Rights) of any such person.
	 
	9.3.2  	For the purposes of sub-clause 9.3.1 above, where any action, claim or proceeding causes the
IPE’s quiet enjoyment for the purposes of this Agreement of the Services and/or their method
of delivery as set out in Schedules 1 (The Services) and 10 (Information Technology and Data
Protection), LCH Materials and/or the Material referred to in paragraph (2) of the definition
of “IPE Materials” or any part thereof to be disrupted or impaired, LCH shall at its own
expense and at the IPE’s option:

	 	(i)  	procure for the benefit of the IPE the right to continue to use and
exploit the Services, the LCH Materials and/or the Material referred to in paragraph
(2) of the definition of “IPE Materials” (as the case may be) in accordance with
this Agreement; or
	 
	 	(ii)  	modify or replace the Services, LCH Materials and/or the Material
referred to in paragraph (2) of the definition of “IPE Materials” (as the case may
be) so that no further infringement will occur; provided that such modified or
replacement part of the Services, the LCH Materials and/or the Material referred to
in paragraph (2) of the definition of “IPE Materials” (as the case may be) will meet
the same functionality as the original referred to in or pursuant to this Agreement.

	9.3.3  	Subject to sub-clause 9.3.4 below, the IPE shall indemnify and keep LCH indemnified from and
against any and all Claims suffered, incurred or sustained by LCH as a result of any action,
claim or proceeding made or brought by any person alleging that the use or possession of IPE
Materials provided by the IPE to LCH under sub-clause 9.2 above infringes the Intellectual
Property Rights of any person.
	 
	9.3.4  	The Party so indemnified under this sub-clause 9.3 (the “Indemnified Party”) shall:

	 	(i)  	promptly notify the other Party (the “Indemnifier”) of any action or
claim brought against it and which may result in the Indemnified Party making a
claim on the Indemnifier under this sub-clause 9.3. Upon the Indemnifier accepting
in writing that the relevant action or claim is covered in its entirety by the
relevant indemnity and subject to the Indemnified Party being reasonably satisfied
at all times with the Indemnifier’s conduct of the defence to the action, claim or
proceeding, the Indemnified Party shall allow the Indemnifier to control that
defence exclusively; and
	 
	 	(ii)  	provide all reasonable assistance to the Indemnifier (subject to the
Indemnifier meeting the reasonable costs and expenses of the Indemnified Party).

	10  	Representations, Warranties, Undertakings and Indemnities
	 
	   	Each Party represents, warrants and undertakes to the other that, as at the date of this
Agreement and throughout the Term:

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	 	(i)  	it has full capacity and authority to enter into and to perform its
obligations under this Agreement;
	 
	 	(ii)  	it shall, for the Term, maintain all authorisations, licences and/or
exemptions required to provide or receive (as the case may be) the Services in
accordance with this Agreement;
	 
	 	(iii)  	this Agreement is executed by a duly authorised representative of that
Party;
	 
	 	(iv)  	there are no actions, suits or proceedings or regulatory investigations
pending or, to that Party’s knowledge, threatened against or affecting that Party
before any court or administrative body or arbitration tribunal that is reasonably
likely to affect the ability of that Party to meet and carry out its obligations
under this Agreement;
	 
	 	(v)  	once duly executed, this Agreement shall constitute its legal, valid and
binding obligations; and
	 
	 	(vi)  	it shall not, by any act or omission, breach any software licence granted
to it by the other Party which is relevant to the performance by it of its
obligations under this Agreement.

	11  	Confidentiality
	 
	11.1  	Subject to sub-clause 11.5 below, each of the Parties shall:

	 	(i)  	keep confidential the terms of this Agreement and all information,
whether in written or any other form, which has been disclosed (by whatever means,
directly or indirectly), to it by or on behalf of the other Party, whether before or
after the date of this Agreement, including any information relating to Intellectual
Property Rights, Current Contracts, New Contracts, IPE Materials, operations,
processes, plans, market opportunities or business affairs of the person making the
disclosure or which relates to the provision or use of the Services to or by the IPE
or Clearing Members, which has been disclosed in confidence or which by its nature
ought to be regarded as confidential;
	 
	 	(ii)  	procure that its officers, employees, agents and representatives keep
secret and treat as confidential all such documentation and information; and
	 
	 	(iii)  	not use such information other than for the purposes of this Agreement.

	   	For the avoidance of doubt, LCH shall not discuss, without the IPE’s prior consent, such
confidential information relating to the IPE at any of LCH’s or of any of LCH’s Group
Companies’ product advisory groups or any similar or equivalent groups.
	 
	11.2  	Sub-clause 11.1 above does not apply to information:

	 	(i)  	which at the date of this Agreement is in, or at any time after the date
of this Agreement comes into, the public domain, other than in consequence of a
breach of this Agreement;

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	 	(ii)  	to the extent made available to the recipient Party by a third party who
is entitled to divulge such information and who is not under any obligation of
confidentiality in respect of such information and who has disclosed that
information under an express statement that it is not confidential;
	 
	 	(iii)  	to the extent required to be disclosed by the Rules or any applicable
Law or by the FSA, CFTC or any other governmental, regulatory or supervisory body or
authority of competent jurisdiction to whose rules the Party making the disclosure
is subject, whether or not having the force of law; provided that, the Party
disclosing the information shall notify the other Party of the information to be
disclosed (and of the circumstances in which the disclosure is alleged to be
required) as early as reasonably possible before such disclosure must be made and
shall take all reasonable action to avoid and limit such disclosure to any extent
lawfully and reasonably practicable;
	 
	 	(iv)  	which either Party is required to disclose to a third party (including,
for the avoidance of doubt, Clearing Members) in order properly to perform its
obligations under or pursuant to this Agreement; or
	 
	 	(v)  	which either Party discloses to any applicable tax authority to the
extent reasonably required to assist a settlement of the disclosing Party’s tax
affairs or those of any Group Company.

	11.3  	A Party receiving information subject to this Clause 11 shall ensure that each person to whom
such information is properly disclosed is made aware of, and is contractually bound to comply
with and complies with, all of the receiving Party’s obligations of confidentiality under this
Agreement as if that person were a Party to this Agreement in place of the receiving Party.
	 
	11.4  	Without limiting sub-clause 11.1 above, LCH acknowledges and agrees that all trade data
relating to Registered Contracts (the “Transaction Data”) are the property of the IPE and
undertakes that it will use the Transaction Data only for the purposes set out in sub-clause
11.5 below. The IPE grants LCH a royalty-free non-transferable licence to use and copy
Transaction Data or any part of it for any and all of the purposes set out in sub-clause 11.5
below.
	 
	11.5  	The IPE hereby permits LCH during the Term to use Transaction Data for the following
purposes:

	 	(i)  	as necessary to provide the Services or any part of them;
	 
	 	(ii)  	compiling end of day market statistics for use in management information
by LCH, its employees, agents, contractors, directors, officers and advisers in the
provision of the Services and, for the avoidance of doubt, including for the purpose
of compiling aggregate statistics in connection with LCH’s business as a Recognised
Clearing House;
	 
	 	(iii)  	calculation of intra-day and end of day margining obligations of the
Clearing Members in relation to their Registered Contracts and reporting to IPE

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	 	   	Members of the information relied upon in calculating such margin obligations or
otherwise for risk management purposes;
	 
	 	(iv)  	performing its obligations in respect of the Services under the LCH
Regulations and the LCH Procedures;
	 
	 	(v)  	complying with requests from the FSA, CFTC or any other relevant
governmental body or other authority, regulatory body or court of competent
jurisdiction or for the purposes of commencing, or defending, any arbitration or
court proceedings; provided that, LCH shall notify the IPE of the information to be
disclosed (and of the circumstances in which the disclosure is alleged to be
required) as early as reasonably possible before such disclosure must be made and
shall take all reasonable action to avoid and limit such disclosure to any extent
lawfully and reasonably practicable; and
	 
	 	(vi)  	providing to any Clearing Member any information or details regarding any
Registered Contract to which that Clearing Member is a party (apart from the
identity of the counterparty to any such Registered Contract where such Registered
Contract arose from a trade originally conducted on an anonymous basis);

	   	Provided that, in addition to the above, LCH may at any time compile and make publicly
available market statistics. Any other information may be made publicly available by LCH
with the prior express consent in each instance of the IPE.
	 
	11.6  	The IPE shall, to the extent that it is able to do so, provide LCH with such data or other
information which LCH may be required to produce from time to time to the FSA, CFTC or any
other authority, regulatory body or court referred to in sub-clause 11.5(iv) above.
	 
	11.7  	Each Party acknowledges and agrees that the other Party may disclose Transaction Data to its
employees, legal advisers, insurance brokers and underwriters, auditors and such other
professional advisers as the Parties may agree from time to time; provided that, such
disclosure is reasonably necessary for the proper performance of any such person’s functions
and that such person shall be required to keep the Transaction Data confidential.
	 
	12  	Limitation of Liability
	 
	12.1  	Subject to sub-clause 12.3 below, neither Party nor any of their respective affiliates,
directors, employees, agents, licensors and/or contractors shall be liable to the other with
respect to any claims whatsoever arising out of this Agreement for indirect, consequential,
special, punitive or exemplary damages, including without limitation, claims for loss of
profits or income or loss of use of either, loss of business expectations or business
interruptions. This sub-clause 12.1 shall apply regardless of any actual knowledge or
foreseeability of such damages.
	 
	12.2  	Subject to sub-clause 12.5 below, the total aggregate liability of each Party to the other
Party for all losses, damages, costs, claims and expenses of any kind arising

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	  	out of or in any way connected to this Agreement shall not
exceed £10 million. The
foregoing shall apply regardless of whether a claim arises in contract, tort, negligence,
strict liability or otherwise.
	 
	12.3  	The Parties acknowledge they have entered into this Agreement in reliance upon the
limitations of liability and disclaimers of warranties and damages set out herein and that the
same form an essential basis of the bargain between the Parties. The Parties agree that the
limitations and exclusions of liability and disclaimers of warranties and conditions specified
herein shall survive the termination of this Agreement.
	 
	12.4  	The IPE acknowledges, understands and accepts that, save as is set out in clause above, LCH
makes no warranty whatsoever to the IPE as to the Services, express or implied, and further
that the Services provided to Clearing Members (as identified in Schedule 1 hereto) are
provided “as is” for their benefit in accordance with the provisions of the LCH Regulations,
relevant LCH Clearing Membership Agreement, and any relevant GCM/NCM agreement (where
applicable). LCH disclaims any implied warranties of merchantability or fitness for particular
purpose. Neither LCH nor its managers, members, officers, employees or agents make any
warranty with respect to, and no such person shall have any liability to the IPE for the
accuracy, timeliness, completeness, reliability, performance or continued availability of the
Services provided by LCH to Clearing Members as specified in Schedule I (including but not
limited to the operation and functionality of systems utilised in relation thereto) or for
delays, omissions or interruptions therein. LCH shall have no duty or obligation to verify any
information received from IPE or any Clearing Member or NCM. Without limiting the generality
of the foregoing LCH disclaims any implied warranties of merchantability or fitness for
particular purpose regarding LCH or other systems utilised and the operation and functionality
thereof and disclaims all liability with regard thereto.
	 
	12.5  	Nothing contained in this Agreement shall restrict either Party’s liability for death or
personal injury resulting from any act, omission, negligence or fraud of that Party or its
officers, agents, employees or sub-contractors.
	 
	12.6  	Without prejudice to each Party’s obligations under this Agreement, each Party acknowledges
and agrees that it does not owe any duty of care to the other Party in relation to the
admission of any member or the exercise of its powers under the LCH Regulations or the IPE
Regulations, as the case may be.
	 
	13  	Force Majeure
	 
	13.1  	Force Majeure Events
	 
	13.1.1  	Subject to sub-clause 13.2 below, neither the IPE nor LCH shall be liable to the other for
any failure to fulfil its duties hereunder if and to the extent that such failure results from
an event, cause or circumstance which is beyond its reasonable control, and which is an act of
God, war damage, enemy action, the act of any government or other competent authority, riot,
civil commotion, rebellion, plague, epidemic, terrorism, storm, accident, fire, flood,
explosion, lockout, failure of telecommunications system or power supply, political unrest,
industrial dispute or disturbance, strike, boycott,
	 

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	   	embargo, adverse weather or atmospheric conditions, fraud of any person other than an
employee, director or agent of that Party, unforeseen shortage of personnel for medical
reasons, suspension of payments by or insolvency, receivership, administration,
bankruptcy or liquidation of any person or other similar cause (“Force Majeure Event”)
(which for the avoidance of doubt shall not include a failure of any sub-contractor to
perform its obligations under a sub-contract).
	 
	13.1.2  	LCH shall not be able to rely on sub-clause 13.1.1 above, to the extent that its failure to
fulfil its duties is due to, or connected with, a failure by LCH to fulfil its obligations
under Schedule 3 (Business Continuity Arrangements), except where such failure is itself the
result of a Force Majeure Event.
	 
	13.2  	Procedure
	 
	   	The Party unable to fulfil its duties pursuant to sub-clause 13.1.1 above (the “Affected
Party”) shall:

	 	(i)  	give written notice to the other Party (the “Other Party”) as soon as
reasonably practicable after it becomes aware of the occurrence or likelihood of a
Force Majeure Event, such notice to contain the following information:

	 	(a)  	a description of the Force Majeure Event that has
occurred or is likely to occur;
	 
	 	(b)  	the date from which the event has prevented or hindered
or will prevent or hinder the Affected Party in the performance of its
duties hereunder;
	 
	 	(c)  	a description of the duties so affected; and
	 
	 	(d)  	its best estimate of the date upon which it will be able
to resume performance of the affected duties;
	 
	 	(e)  	at all times continue to take steps in accordance with
Good Industry Practice to resume full performance of its obligations under
this Agreement;

	 	(ii)  	at all times use all reasonable endeavours to mitigate the consequences
of the Force Majeure Event; and
	 
	 	(iii)  	at reasonable intervals, or upon request by the Other Party, update such
Other Party as to the Force Majeure Event, its effect, the steps being taken or
planned to remedy it, and such other details as the Other Party may reasonably
request.

	   	The relief from liability under sub-clause 13.1.1 above shall last for the duration of
the Force Majeure Event if and so long as the Affected Party complies with this
sub-clause 13.2.

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	14  	Termination Events
	 
	14.1  	Insolvency, etc.
	 
	   	The IPE or LCH may terminate this Agreement immediately by notice to the other Party (the
“Defaulting Party”) where:

	 	(i)  	the Defaulting Party is unable, or admits in writing inability, to pay
its debts as they fall due, suspends making payments on any of its debts or, by
reason of actual or anticipated financial difficulties, commences negotiations with
one or more of its creditors with a view to rescheduling any of its indebtedness;
	 
	 	(ii)  	a moratorium is declared in respect of any of the Defaulting Party’s
indebtedness;
	 
	 	(iii)  	any corporate action, legal proceeding or other procedure or step is
taken (or any analogous procedure or step is taken in any jurisdiction) by or in
respect of the Defaulting Party in relation to:

	 	(a)  	the suspension of payments, a moratorium of any
indebtedness, winding-up, dissolution, administration or reorganisation (by
way of voluntary arrangement, scheme of arrangement or otherwise), other
than a solvent liquidation or reorganisation, of any member of the
Defaulting Party’s Group;
	 
	 	(b)  	a composition, assignment or arrangement with any
creditor;
	 
	 	(c)  	the appointment of a liquidator (other than in respect of
a solvent liquidation of any of the Defaulting Party’s Group Companies),
receiver, administrator, administrative receiver, compulsory manager or
other similar officer in respect of any of the Defaulting Party’s assets; or
	 
	 	(d)  	enforcement of any security over any of the Defaulting
Party’s assets; and

	 	   	such procedure: (1) if instituted against the Defaulting Party by a third party,
is not discharged within 10 Business Days; or (2) if instituted by the Defaulting
Party, then immediately;
	 
	 	(iv)  	the Defaulting Party becomes unable to pay its debts as they fall due for
the purposes of Section 123(1) (but excluding sub-Section (1)(a) thereof) of the
Insolvency Act 1986;
	 
	 	(v)  	the Defaulting Party makes any arrangement with or compounds with its
creditors or calls a meeting of its creditors for such purpose;
	 
	 	(vi)  	the Defaulting Party enters into any liquidation (other than for the
purposes of a voluntary reconstruction or amalgamation for which the prior written
consent of the other Party has been obtained); or

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	 	(vii)  	the Defaulting Party has an encumbrancer take possession or a receiver
or administrative receiver or administrator appointed (other than where such
possession or appointment is discharged within 10 Business Days of being effected)
of all or any material part of its assets.

	14.2  	Other Termination Events
	 
	   	Either Party may terminate this Agreement immediately (or at its option upon such period
of notice as it may specify) by notice to the other Party if:

	 	(i)  	the other Party has received notice that it will cease to be a Recognised
Clearing House or Recognised Investment Exchange, as the case may be; or
	 
	 	(ii)  	the Services do not at any time meet the IPE’s obligations under or
pursuant to FSMA as a Recognised Investment Exchange in respect of arrangements for
the clearing of IPE Contracts.

	14.3  	Fixed Period of Notice
	 
	   	At any time after the date of this Agreement either Party may terminate this Agreement by
the giving of 1 year’s written notice to the other Party, expiring at any time.
	 
	14.4  	Consequences of Termination
	 
	   	In relation to termination of this Agreement, the provisions to Schedule 8 (Exit
Management) shall apply.
	 
	15  	General
	 
	15.1  	Notices
	 
	15.1.1  	Addresses
	 
	   	Any notice, claim or demand in connection with, or pursuant to, this Agreement shall be
in writing (each a “Notice”) and shall be sufficiently given if delivered or sent to the
recipient at its facsimile number, telex number or address set out below or any other
facsimile number, telex number or address notified to the sender by the recipient for the
purposes of this Agreement.
	 
	   	Notices to the IPE:
	 
	   	Address: international House, 1 St Katharine’s Way, London E1W 1 UY.
	 
	   	Facsimile Number: +44 20 7265 5705.
	 
	   	Marked for the attention of: The Company Secretary.

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	   	Notices to LCH:
	 
	   	Address: Aldgate House, 33 Aldgate High Street, London EC3N 1 EA.
	 
	   	Facsimile Number +44 20 7426 7210.
	 
	   	Marked for the attention of: The Company Secretary.
	 
	15.1.2  	Form
	 
	   	A Notice shall be in writing in English and may be sent by messenger, facsimile or first
class prepaid post. A Notice shall be deemed to have been received on the next Business
Day, if sent by facsimile, and on the second Business Day from the time of posting, if
sent by first class post.
	 
	15.2  	Whole Agreement
	 
	   	This Agreement contains the whole agreement between the Parties relating to the subject
matter of this Agreement and supersedes the 1988 agreement referred to in Recital (C)
above and any other previous written or oral agreement between the Parties in relation to
the matters dealt with in this Agreement; provided that neither Party is attempting to
exclude liability for any fraudulent statements.
	 
	15.3  	Remedies
	 
	15.3.1  	So far as permitted by law and except in the case of fraud, each Party agrees and
acknowledges that its only right and remedy in relation to any representation, warranty or
undertaking made or given in connection with this Agreement shall be for breach of the terms
of this Agreement to the exclusion of all other rights and remedies (including those in tort
or arising under statute and for rescission, other than for fraudulent misrepresentation).
	 
	15.3.2  	The Parties acknowledge that damages may not be an adequate remedy for any breach of this
Agreement Subject to Clause 16 below either Party shall be entitled to obtain any legal and/or
equitable relief, including specific performance or injunctive relief, in the event of any
breach of the provisions of this Agreement.
	 
	15.4  	Survival of rights, duties and obligations
	 
	   	Termination of this Agreement for any cause shall not release a Party from:

	 	(i)  	any liability which at the time of termination has already accrued or
which thereafter may accrue in respect of any act or omission prior to such
termination; or
	 
	 	(ii)  	any provision of this Agreement which expressly or by implication applies
for a period after any such termination,

	   	and, for the avoidance of doubt, any Services which are provided after termination of
this Agreement shall be provided in accordance with the terms of this Agreement.

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	15.5  	Waiver
	 
	   	No failure of either Party to exercise, and no delay by it in exercising, any right,
power or remedy in connection with this Agreement (each a “Right”) shall operate as a
waiver of that Right, nor shall any single or partial exercise of any Right preclude any
other or further exercise of that Right or the exercise of any other Right.
	 
	15.6  	Variation
	 
	   	No variation of this Agreement shall be effective unless in writing and signed by or on
behalf of each Party.
	 
	15.7  	Assignment
	 
	   	Neither Party shall assign, novate or otherwise transfer this Agreement, in whole or in
part, without the prior written consent of the other Party, such consent not to be
unreasonably withheld.
	 
	15.8  	Sub-contracting and Outsourcing
	 
	15.8.1  	Subject to sub-clause 15.8.3 below, neither Party shall, without the prior written consent
of the other Party (such consent not to be unreasonably withheld), subcontract any of its
obligations under this Agreement.
	 
	15.8.2  	Sub-contracting by either Party will not relieve that Party of its obligations under this
Agreement and the sub-contracting Party remains fully responsible for the acts and omissions
of its sub-contractors and their employees, directors and agents.
	 
	15.8.3  	The consent under sub-clause 15.8.1 above shall not be required in relation to any
sub-contracting which is in place as at the date of this Agreement or in relation to any
sub-contracting which is not material and occurs in the normal course of that Party’s
business.
	 
	15.8.4  	If a Party, at any time, reasonably considers that:

	 	(i)  	the performance by a sub-contractor of a sub-contracting Party of its
obligations is unsatisfactory; or
	 
	 	(ii)  	any other performance by the sub-contractor is adversely affecting the
relationship between the IPE and LCH,

	   	then that Party shall notify the sub-contracting Party and shall ensure that the
subcontracting party shall address such concerns.
	 
	15.9  	Relationship between the Parties
	 
	15.9.1  	This Agreement does not set up or create an employer/employee relationship, partnership of
any kind, or association between the Parties.

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	15.9.2  	Save to the extent to which a Party is specifically authorised in writing in advance by the
other Party, neither Party is authorised or empowered to act as agent for the other for any
purpose.
	 
	15.10  	Further assurance
	 
	   	Each of the Parties shall, and shall use all reasonable endeavours to procure that any
necessary third party shall, execute such documents and do such acts and things as the
other Party may reasonably require for the purpose of giving to the other Party the full
benefit of all of the provisions of this Agreement.
	 
	15.11  	Invalidity
	 
	   	If any provision of this Agreement shall be held to be illegal, invalid or unenforceable,
in whole or in part, under any enactment or rule of law, such provision or part shall to
that extent be deemed not to form part of this Agreement but the legality, validity and
enforceability of the remainder of this Agreement shall not be affected.
	 
	15.12  	Costs and Taxes
	 
	   	Each Party shall bear all costs incurred by it in connection with the preparation and
negotiation of, and entry into, this Agreement and any documents entered into pursuant to
it.
	 
	15.13  	Third Party Rights
	 
	   	LCH acknowledges that the IPE has entered into this Agreement for the benefit of the IPE
and that LCH’s obligations under this Agreement (including under any indemnity) are
obligations to the IPE only. Except to the extent expressly stated in this Agreement,
this Agreement does not create any rights in any other person(s) for the purposes of the
Contracts (Rights of Third Parties) Act 1999.
	 
	15.14  	Governing Law
	 
	   	This Agreement, and the documents to be entered into pursuant to it, shall be governed by
and construed in accordance with English law.
	 
	16  	Dispute Resolution
	 
	16.1  	Negotiation
	 
	16.1.1  	In the event that a dispute or difference (a “Dispute”) arises between the Parties out of or
in connection with this Agreement, the Parties shall seek to resolve the Dispute by
negotiation by referring the Dispute first to:

	 	(i)  	in the case of LCH, any Managing Director; and
	 
	 	(ii)  	in the case of IPE, any member of the executive or his delegate in his
absence or unavailability,

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	   	(each a “Representative”).
	 
	16.1.2  	Such referral shall be initiated by one of the Parties notifying the other in writing that
the dispute resolution procedure set out in this sub-clause 16.1 shall apply and setting out
the nature of the Dispute. The Parties shall convene a meeting of the relevant
Representatives, and the relevant Representatives shall endeavour to resolve the Dispute,
within 5 Business Days of the date of the notice (the “Notice Date”). The joint written
decision (if any) of the relevant Representatives shall be binding on the Parties.
	 
	16.1.3  	In the event that the Dispute remains unresolved following that meeting, either Party may
refer the Dispute for further negotiation as between the Chief Executives of each of the
Parties, who (if either Party makes such election) shall meet and endeavour to resolve the
Dispute within 15 Business Days from the Notice Date. The joint written decision (if any) of
the Chief Executives shall be binding on the Parties.
	 
	16.2  	Mediation
	 
	   	In the event that the Parties are unable to resolve a matter in accordance with
sub-clause 16.1 above (and whether or not an election under sub-clause 16.1.3 above is
made), the following provisions shall apply:
	 
	16.2.1  	The Party seeking redress (the “Aggrieved Party”) shall give written notice to the other
Party setting out full particulars of the Dispute within 20 Business Days of the Notice Date.
	 
	16.2.2  	No later than 10 Business Days after service of such notice, the Aggrieved Party shall
organise a meeting (the “Dispute Resolution Meeting”) to be held at a mutually convenient
time, on a date no later than 20 Business Days from the date of service of the notice, at a
location in London. In the event that the Parties are unable to agree such a mutually
convenient time within such 10 Business Day period, then the Aggrieved Party shall nominate 3
different appointment times between 8 am and 6 pm on 3 separate Business Days within the
remainder of the 20 Business Day period, and the other Party shall select one such
appointment. In default of such selection by the other Party within 2 Business Days of
notification by the Aggrieved Party of the 3 appointment times, then the Aggrieved Party shall
select one of the 3 appointment times, and notify the other Party of the date and time thereof
at least 2 Business Days in advance.
	 
	16.2.3  	Each of the Parties agrees that it shall be represented at such Dispute Resolution Meeting
by one or more of its Chief Executive, Chairman, Deputy Chief Executive, Chief Operating
Officer or (in the case of LCH) any Managing Director or (in the case of the IPE) any member
of the executive, and that each Party shall use its best endeavours and negotiate in good
faith with a view to resolving the Dispute with or without financial recompense.
	 
	16.2.4  	In the event that the Parties are unable to reach a resolution of the Dispute, then they
shall adjourn the Dispute Resolution Meeting for a period of no longer than 10 Business Days
and they shall invite the services of a mutually agreed professional

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	   	mediator to assist them in achieving
a resolution at the resumed meeting
(the “Resumed Meeting”). The time
and place of the Resumed Meeting
shall be agreed between the Parties;
in default of agreement regarding
the time and place of the Resumed
Meeting, the procedure set out in
sub-clause 16.2.2 shall be applied,
the time periods referred to in
sub-clause 16.2.2 running from the
end of the 10 Business Day period
referred to in this sub-clause
16.2.4. The fees of the professional
mediator shall be shared equally
between the Parties and each Party
shall bear its own costs in
connection with such mediation.
	 
	16.3  	Arbitration
	 
	   	If the Parties are unable to resolve the Dispute at such adjourned meeting, then such
Dispute shall be finally settled by arbitration in London pursuant to the LCIA Rules in
accordance with the Arbitration Act 1996. It is agreed that:

	 	(i)  	the proceedings of the arbitration shall be confidential to the Parties;
	 
	 	(ii)  	the seat of arbitration shall be London and the place of arbitration
shall be London;
	 
	 	(iii)  	the language of the arbitration shall be English;
	 
	 	(iv)  	the arbitration shall be conducted by a single arbitrator, having
knowledge of or experience in relation to international clearing systems and
international financial or commodities futures markets to be appointed by written
agreement of the Parties or, failing such agreement within 15 Business Days of one
Party inviting the other to agree, by the LCIA;
	 
	 	(v)  	the fees of the arbitrator shall be shared equally between the Parties
and, unless the arbitrator orders otherwise, each Party shall bear its own costs in
connection with the arbitration;
	 
	 	(vi)  	the arbitrator shall have power to order any relief on a provisional
basis which he would have power to grant in a final award; and
	 
	 	(vii)  	the award of the arbitrator shall be final and binding on the Parties
and, to the extent permitted by the laws of England and Wales, the Parties hereby
waive any right to any form of appeal or to a court of law or other judicial
authority.

	16.4  	The Parties agree that any professional mediator involved in the mediation procedure
specified in sub-clause 16.2 above shall not take any part in any arbitration, whether as a
witness or otherwise, and any recommendations made by him in connection with such procedure
shall not be relied upon by either Party without the consent of the other Party and the
professional mediator.
	 
	16.5  	Neither Party shall, outside the negotiation and mediation procedure specified in sub-clauses
16.1 and 16.2 above, make use of, or rely upon, any “without prejudice statements” or
admissions made by the other Party in such procedures.

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	16.6  	Nothing in this Clause 16 shall prevent either Party from taking such action as it deems, in
its reasonable opinion, necessary in order to obtain interlocutory relief requiring compliance
with, or preventing breach of, a material term of this Agreement, including, without
limitation, initiating Court proceedings. The taking of any such action shall be without
prejudice to the Parties’ obligation to negotiate and mediate (or, as the case may be, to
continue to negotiate and/or mediate) any Dispute in accordance with sub-clauses 16.1 and 16.2
above.
	 
	17  	Jurisdiction
	 
	   	The Parties irrevocably submit to the non-exclusive jurisdiction of the Courts of England
and Wales to support and assist the arbitration process including, if necessary, the
grant of interlocutory relief pending the outcome of that process.

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In witness whereof this Agreement has been executed the day and year first written above.

SIGNED for and on behalf of

THE INTERNATIONAL PETROLEUM EXCHANGE OF LONDON LIMITED by:

	 	 	 	 	 
	 

	 	/s/ Richard C. Ward
	 	(Signature)
	 	 	 
	

	 		 	
	 
	 	RICHARD C. WARD, CEO
	 	(Name and Title)
	 	 	 
	 
	 	 	 	 
	SIGNED for and on behalf of THE LONDON CLEARING HOUSE LIMITED by:
	 
	 	 	 	 
	

	 	/s/ Arun Aggarwal
	 	(Signature)
	 	 	 
	 
	 	 	 	 
	

	 	Arun Aggarwal	 	 
	

	 	MD — Business Management	 	 
	

	 	And Authorised Signatory
	 	(Name and Title)
	 	 	 
	 
	 	 	 	 
	

	 	/s/ Richard Heyman
	 	(Signature)
	 	 	 
	 
	 	 	 	 
	

	 	Richard Heyman

Director
	 	(Name and Title)
	 	 	 

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Schedule 1

The Services

	1  	General
	 
	1.1  	The Services shall be clearing and related services in respect of IPE Contracts as set out in
the LCH Regulations and as more particularly set out hereafter and in paragraph 5.1 of
Schedule 10.
	 
	1.2  	The Services and related obligations, as set out in this Schedule, shall be provided as
follows:
	 
	1.2.1  	Services and related obligations provided to Clearing Members:
	 
	   	Sub-paragraphs 2.1, 2.2, 2.3, 2.4, 2.5, 2.7, 2.8, 3.1, 3.2.1, 3.3.1, 4.2.1, 4.3, and
paragraph 7 (where provided to the Clearing Members), sub-paragraph 8.2
(where provided to the Clearing Members) and paragraph 9.
	 
	1.2.2  	Services and related obligations provided to the IPE:
	 
	   	Sub-paragraphs 2.6, 3.2.2, 3.3.2, 3.4, 4.1, 4.2.2, and paragraphs 5, 6, 7 (where provided
to the IPE), sub-paragraph 8.1 and sub-paragraph 8.2 (where provided to the IPE).
	 
	2  	Acceptance of IPE Contracts for Registration
	 
	2.1  	Receipt of contract information
	 
	   	Particulars of eligible IPE Contracts (“Trade Particulars”) shall be presented for
clearing and LCH shall receive such particulars of IPE Contracts traded by means of:

	 	(i)  	direct input into the Registration System by IPE Members and/or the IPE’s
staff;
	 
	 	(ii)  	the supply of matched electronic trade information to LCH by the IPE via
an interface between the Registration System and CPS,

	   	and, subject to registration by LCH, such Trade Particulars shall be assigned by LCH to
accounts opened in the names of relevant Clearing Members.

	2.2  	Presentation and confirmation
	 
	   	Unless otherwise expressly agreed between the Parties, Trade Particulars presented to LCH
shall be deemed to be presented by the Clearing Member in whose name they are presented
and, where the IPE Regulations so provide, to be confirmed by such Clearing Member in
accordance with the LCH Regulations and the LCH Procedures. The IPE shall ensure that,
unless otherwise agreed by LCH, the IPE Regulations shall at all times authorise the IPE
to present and confirm such particulars to LCH on a Clearing Member’s behalf.

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	2.3  	Rejection
	 
	   	Notwithstanding the provisions of paragraph 2.2 above, LCH may, after consulting the IPE
wherever practicable, at its discretion reject any Trade Particulars which it reasonably
believes to be defective, incomplete, or corrupted or constitute a trade which is not
eligible for registration and/or deal with such Trade Particulars, in all cases in
accordance with the LCH Regulations and/or the LCH Procedures, or on such conditions as
it may reasonably impose. LCH shall notify the IPE promptly after an exercise of its
discretion under this sub-paragraph 2.3.
	 
	2.4  	Position Keeping
	 
	   	LCH shall ensure that it allows Clearing Members to monitor their own positions and those
of any IPE Member for whom they clear transactions.
	 
	2.5  	Registration 
 
Subject to:

	 	(i)  	sub-paragraph 2.3 above;
	 
	 	(ii)  	confirmation in accordance with the LCH Regulations and the LCH
Procedures by or on behalf of a Clearing Member,
	 
	 	(iii)  	payment of such cash margin, or provision to LCH of such margin cover,
as LCH may require in accordance with the LCH Regulations; and
	 
	 	(iv)  	compliance with the LCH Regulations by the Clearing Members in whose
names Trade Particulars are presented,

	   	LCH shall accept for registration and register each IPE Contract duly presented for
registration in the name of the relevant Clearing Member. Such registration shall take
place in accordance with the LCH Regulations.

	2.6  	The Parties acknowledge that at the date of this Agreement the time for registration of IPE
Contracts is one hour after the Registration System’s end-of-day signal sent to LCH. LCH
agrees not to amend such time without the prior agreement of the IPE.
	 
	2.7  	Central counterparty
	 
	   	By registering Trade Particulars of an IPE Contract, LCH shall become central
counterparty in respect of each Registered Contract.
	 
	2.8  	Corrections, redesignations etc.
	 
	   	Subject to any necessary IPE Member and/or Clearing Members consents, LCH shall use its
reasonable commercial endeavours to process all necessary corrections and re-designations
agreed between the Parties of IPE Contracts permitted and notified in accordance with the
IPE Regulations and the LCH Regulations and the LCH Procedures.

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	3  	Margin
	 
	3.1  	Generally
	 
	   	Subject to sub-clauses 4.4 and 4.6 of this Agreement, LCH shall require the payment by
Clearing Members of initial, intra-day, variation and delivery margin in such amounts
calculated on such basis (including as to permitted offsets and netting) and at such
times as LCH may determine, and may accept in lieu of margin such other security as it
may from time to time determine and valued on such basis as LCH may determine.
	 
	3.2  	Security for margin
	 
	3.2.1  	The Parties acknowledge that LCH may, and currently does, make provision in the LCH
Regulations and/or the LCH Procedures for the acceptance of security in place of cash for any
Clearing Member’s obligations to LCH.
	 
	3.2.2  	LCH shall not unfairly discriminate against IPE Members in relation to any such security
including as to the type of asset accepted as security, the manner in which it is valued or
the terms on which it is held; provided that, nothing in this sub-paragraph 3.2.2 shall
prevent the LCH from restricting the acceptance of particular types of collateral to
particular markets, including the IPE Market.
	 
	3.3  	Marking or settlement to market
	 
	3.3.1  	The Parties acknowledge that LCH may, and currently does, require under the LCH Regulations
that Clearing Members’ accounts of any kind in its books be operated on a marked to market
basis or a settlement to market basis.
	 
	3.3.2  	LCH shall consult with the IPE and obtain the prior consent of the IPE before materially
altering the requirement referred to in sub-paragraph 3.3.1 above.
	 
	3.4  	Official quotations
	 
	   	LCH shall, except in the case of manifest error or in any other case in which LCH
reasonably believes such value or price does not reasonably reflect the value or price of
the commodity, adopt such value or price as shall be supplied by the IPE as the basis for
determining the official quotation for the Business Day concerned which will remain
effective until the IPE shall notify LCH of any other value or price for such commodity.
in the case of manifest error or in any other case in which LCH reasonably believes such
value or price does not reasonably reflect the value or price of the commodity, LCH shall
use all reasonable endeavours forthwith to consult with the IPE to agree a proper and
fair corrected price.
	 
	4  	Expiry
	 
	4.1  	Administration of Physical Delivery

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	   	LCH and the IPE shall agree from time to time procedures for the delivery of any
commodity. Neither Party shall amend its Rules in such a way as to result in any
inconsistency with such agreed procedures.
	 
	4.2  	Exercise of Options
	 
	4.2.1  	LCH shall:

	 	(i)  	process the exercise by Clearing Members of Options; and
	 
	 	(ii)  	process the exercise of Options against Clearing Members.

	4.2.2  	LCH shall allocate exercises in accordance with such procedures as shall be agreed from time
to time between the Parties; provided that IPE acknowledges and accepts that the ability of
LCH to allocate exercises to Clearing Members may be adversely affected by factors outwith the
reasonable control of LCH, including the exercise by other Clearing Members.
	 
	4.3  	Settlement
	 
	   	LCH shall make and accept settlement by payment, credit to accounts and/or delivery in
respect of IPE Contracts in accordance with the LCH Regulations and the LCH Procedures.
	 
	4.4  	Invoicing back
	 
	   	If, where an IPE Contract is to be invoiced back or closed out by resale under the Rules,
the IPE fails to fix an invoicing back price or premium (in the case of an Option) or
resale price within 24 hours of being requested to do so by LCH, or the IPE is by virtue
of its closure, insolvency or for any other reason manifestly incapable of doing so, LCH
may (subject to the LCH Regulations) fix an invoicing back price or premium or resale
price (as the case may be) of such amount as it may in its absolute discretion determine
and may (subject as aforesaid) invoice back or close out by resale any IPE Contract at
that price or premium.
	 
	5  	Handling of Trade Positions or Emergencies
	 
	5.1  	Notification
	 
	   	If at any time either the IPE or LCH suspects or anticipates the development of an
excessive position or unwarranted speculation or any other undesirable situation or
practice affecting or capable of affecting the IPE Markets, IPE Members and/or IPE
Contracts (including any action which may amount to market abuse under FSA’s Code of
Market Conduct, as from time to time in force), it shall forthwith notify the other Party
of the relevant circumstances.
	 
	5.2  	Monitoring
	 
	   	If the circumstances contemplated by sub-paragraph 5.1 above are found to have arisen,
LCH shall take all such action as the IPE may reasonably require to monitor

-34-

 

	   	the development of such circumstances and keep the IPE informed of such development.
	 
	5.3  	Market Abuse, etc.
	 
	   	If the IPE determines, in accordance with the IPE Regulations, that an excessive position
or unwarranted speculation or any other undesirable situation or practice is developing
or has developed which is affecting or capable of affecting the IPE Markets (including
any action which may amount to market abuse under FSA’s Code of Market Conduct, as from
time to time in force), LCH may, in accordance with the LCH Regulations and/or the LCH
Procedures, take such action in respect of Registered Contracts as may be agreed between
the IPE and LCH.
	 
	6  	New Contracts
	 
	6.1  	If the IPE wishes to introduce a New Contract, the IPE shall notify LCH of that fact and
provide adequate written details of the relevant New Contract and, the Change Control
Procedure shall apply.
	 
	6.2  	LCH shall endeavour to provide the Services in respect of all New Contracts submitted by the
IPE.
	 
	6.3  	Where LCH is unable to provide the Services in respect of New Contracts, it shall promptly
notify the IPE.
	 
	6.4  	Where LCH accepts a New Contract for clearing it shall assist with the design of the New
Contract particularly in respect of delivery and/or settlement mechanisms.
	 
	7  	Information, Documentation and Training
	 
	7.1  	Provision of information
	 
	   	LCH shall provide promptly such reports, with such contents and in such form, and deliver
or make available the same, in such manner as in each case is specified by the LCH
Regulations.
	 
	7.2  	Documentation
	 
	   	LCH shall provide to the IPE and Clearing Members, and update as necessary, such manuals,
documentation and other materials (which may be provided in electronic format) as may be
reasonably necessary to allow the IPE and IPE Members to receive the benefit of the
Services. Such material shall:

	 	(i)  	be of a reasonable standard of accuracy, presentation and scope;
	 
	 	(ii)  	be the most current version available; and
	 
	 	(iii)  	contain such information as would reasonably be required by any person
wishing to receive the benefit of the Services.

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	7.3  	Training
	 
	   	Where LCH carries out enhancements or upgrades to the Services or elements of it or the
IPE develops a New Contract pursuant to paragraph 6 above, LCH shall, at no additional
cost to the IPE or IPE Members, provide the IPE and Clearing Members with such training
as is reasonably required to enable the IPE and/or IPE Members to receive the benefit of
such enhancements, upgrades and/or New Contracts and (as may be necessary) to enable the
IPE to train IPE Members to receive the benefit of such enhancements, upgrades and/or New
Contracts.
	 
	8  	Reports and Records
	 
	8.1  	Reports
	 
	   	LCH shall provide, within 15 Business Days after the end of each month, reports
summarising, in respect of the Services, the actual performance achieved against the
Service Levels during that period.
	 
	8.2  	Records
	 
	   	LCH shall, and shall procure that its sub-contractors shall, produce and retain such
records as are reasonably necessary to enable the IPE and IPE Members to comply, in
respect, or as a result, of the Services, with their respective obligations under FSMA
and which are sufficient to enable the IPE to have a complete and accurate understanding
of LCH’s performance of its obligations under this Agreement. LCH shall ensure that:

	 	(i)  	the records are produced and retained in accordance with any reasonable
written directions made by the IPE’s external auditors; and
	 
	 	(ii)  	the records are retained for the minimum period required by applicable
Law, or 5 years, whichever is the greater.

	9  	Accounts
	 
	9.1  	Account mnemonics
	 
	   	LCH shall, in conjunction with the IPE, assign to each Clearing Member one or more unique
mnemonics (or other identifying codes).
	 
	9.2  	Accounts
	 
	9.2.1  	LCH shall open in the name of each Clearing Member (subject to the LCH Regulations and the
LCH Procedures) one or more accounts; provided that LCH shall not be under any obligation to
open more than one account in the name of a Clearing Member who is not an authorised person
under FSMA or more than two accounts in the name of a Clearing Member who is an authorised
person under FSMA.
	 
	9.2.2  	LCH shall allow Clearing Members to designate IPE Contracts into separate Client Accounts
opened in their names and to ensure that all relevant processes are

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	   	separately applied to any such separate Client Account opened in a
Clearing Member’s name and designated as such.
	 
	9.3  	Restriction of set-off of Client Accounts
	 
	   	In the case of any Clearing Member who is an authorised person under FSMA, LCH shall not
exercise any right of combination or set-off (whether permitted by the LCH Regulations or
the LCH Procedures, by agreement, by the general law or otherwise) between any account
opened in the name of that Clearing Member and designated a Client Account by that
Clearing Member and any account not so designated.
	 
	9.4  	Restriction on use of Client Accounts
	 
	   	An account designated a Client Account in the name of a Clearing Member who is an
authorised person under FSMA will be used by the Clearing Member for the purposes of
transactions registered in its name and executed (whether by that Clearing Member or by
an IPE Member and allocated to that Clearing Member) upon the instructions of clients and
for no other purpose notwithstanding that the Clearing Member shall be responsible for
all obligations to LCH in respect of such account.
	 
	9.5  	Payment of interest on accounts
	 
	   	Different rates of interest may be agreed for different purposes, including in particular
a higher rate in respect of default fund contributions. LCH shall pay to Clearing
Members, in respect of margins held by LCH from IPE Contracts, interest on such basis as
shall from time to time be agreed with the IPE. Rates payable on any such agreed basis
shall not, without reasonable cause, be worse than the rates offered to Clearing Members
in respect of other contracts cleared through LCH and shall be reasonable in comparison
with rates paid by other clearing houses which clear transactions competitive with lPE
Contracts.

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Schedule 2

Service Levels

To be completed in accordance with sub-clause 3.4

The Service Levels can be altered in accordance with the Change Control Procedure.

-38-

 

Schedule 3

Business Continuity Arrangements

	1  	Implementing Arrangements
	 
	1.1  	Maintenance of continuity arrangements
	 
	   	LCH shall ensure that it has in place at all times appropriate business continuity
arrangements, having regard to the nature of the Services and LCH’s role as a Recognised
Clearing House.
	 
	1.2  	Continuity facilities
	 
	1.2.1  	LCH’s business continuity arrangements shall include the provision of off-site continuity
facilities at (a) separate location(s) from its main facilities so as to allow the LCH to
continue to provide the Services, subject only, in the circumstances giving rise to their use,
to minor and reasonable interruptions which shall not exceed the time period referred to in
paragraph 3 below.
	 
	1.2.2  	LCH agrees that its business continuity arrangements might be enhanced if its alternative
facilities were to be located further from its main facilities. LCH agrees to use its
reasonable commercial endeavours to review whether locating such alternative facilities
further from its main facilities might provide a benefit.
	 
	2  	Maintenance
	 
	2.1  	LCH shall maintain the Business Continuity Arrangements in accordance with Good Industry
Practice.
	 
	2.2  	LCH shall advise the IPE of the ongoing development of the Business Continuity Arrangements
and shall have regard to the reasonable requests of the IPE in making amendments to such
arrangements.
	 
	3  	Continuation after disruption
	 
	   	Without prejudice to the terms of paragraph 1 above, LCH shall ensure that the Business
Continuity Arrangements will enable LCH to continue providing all of the Services within
24 hours after the provision of any of them is disrupted by any event which for any
reason wholly or partially interferes in a material way with LCH’s ability to provide the
Services.
	 
	4  	Testing
	 
	   	LCH shall perform a full test of the Business Continuity Arrangements as they affect the
provision of the Services at least 2 times per year to ensure their effectiveness. As
soon as practicable after carrying out every such test, LCH shall notify the results
thereof to the IPE.

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	5  	Force Majeure
	 
	   	For the avoidance of doubt, this Schedule 3 shall be subject to Clause 13 of this
Agreement.

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Schedule 4

Fees

	1  	Fee Levels
	 
	1.1  	Current Contracts
	 
	   	Subject to sub-paragraphs 1.4 and 1.5 below, all fees payable by Clearing Members
determined by or on behalf of LCH (or any Group Company of LCH) (the “Fees”) for Current
Contracts [***].
	 
	1.2  	Similar New Contracts
	 
	   	Subject to sub-paragraph 1.4 and 1.5 below, the Fees for Similar New Contracts [***]. For this purpose, and
the purposes of this Schedule, “Similar” is to be construed in accordance with the
following table, any contract appearing in the second column (2) being “Similar” to any
contract appearing opposite it in the first column (1):

	 	 	 	 	 	 	 	 
	 	 	 
	 	(1)	 	 	 	 	(2)	 
	 	 	 	 	 	 
	 	Brent Crude Futures

	 	 	 
	 	[***]	 
	 	 
	 	 	 	 	 	 
	 	

	 	 	 
	 	 	 
	 	 
	 	 	 	 	 	 
	 	

	 	 	 
	 	 	 
	 	 	 	 	 	 
	 	Gas Oil Futures

	 	 	 
	 	[***]	 
	 	 
	 	 	 	 	 	 
	 	

	 	 	 
	 	 	 
	 	 
	 	 	 	 	 	 
	 	

	 	 	 
	 	 	 
	 	 	 	 	 	 
	 	Natural Gas Futures

	 	 	 
	 	[***]	 
	 	 
	 	 	 	 	 	 
	 	

	 	 	 
	 	 	 
	 	 	 	 	 	 

	 
	 

	***	Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.

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	 	(1)	 	 	 	 	(2)	 
	 	 	 	 	 	 
	 	Electricity Futures

	 	 	[***]
	 	 	 
	 	 	 	 	 	 

	1.3  	Other New Contracts
	 
	1.3.1  	The Fees for New Contracts which are not Similar to Current Contracts in accordance with the
table in sub-paragraph 1.2.1 above shall be determined by LCH subject to the prior written
agreement of IPE.
	 
	1.3.2  	In determining the Fees payable by Clearing Members on any such New Contract the Parties
shall have regard to the level of marginal development and operating costs to be incurred by
LCH in respect of such New Contract.
	 
	1.3.3  	The parties agree that LCH Fees for any New Contract of the type referred to in this
sub-paragraph 1.3 shall provide a commercially reasonable return to LCH to reflect, inter
alia, the level of investment made and financial and business risk borne by LCH in offering
the Services in respect of such New Contract.
	 
	1.3.4  	Without prejudice to paragraph 6 of Schedule 1, in the event that IPE declines, fails or
omits to give its consent to any Fees proposed by LCH for any New Contract of the type
referred to in this sub-paragraph 1.3, within 15 Business Days of the making of such proposal
by LCH, LCH shall have the right to decline to provide the Services in respect of such New
Contract and shall have no liability in respect thereof.
	 
	1.4  	Unforeseen Circumstances
	 
	1.4.1  	With regard to any Current Contract and any New Contract which is Similar to a Current
Contract and in the event of unforeseen circumstances, LCH may propose to the IPE an increase
in the Fees which would make the Fees for that Current Contract or New Contract greater than
those set for Current Contracts in the period of LCH’s

	 
	 

***  Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect
to the omitted portions.

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	   	financial year ending in 2002, and IPE shall not unreasonably withhold its consent to
such increase.
	 
	1.4.2  	For the purposes of this sub-paragraph 1.4, it is agreed that, in the event of any such
unforeseen circumstance, it would be unreasonable for the IPE to withhold its consent to any
proposed fee increase if the result of withholding such consent would be that in respect of
any Current Contract or any New Contract which is Similar to a Current Contract the operating
cost to LCH in providing the Services in any financial year in respect of that Contract would
be more than the Fees charged by LCH of Clearing Members in respect of such Contract.
	 
	1.5  	Material change in the Services and/or Service Levels
	 
	   	In circumstances where either Party proposes a material change in the Services or Service
Levels, in such a way as to lead directly to material development costs or a material
increase in LCH’s operating costs, LCH may bring forward proposals for increases in the
Fees for Current Contracts and Contracts Similar to Current Contracts. The IPE shall give
reasonable consideration to such proposals. The proposals may be implemented subject to
the written consent of the IPE, such consent not to be unreasonably withheld.
	 
	1.6  	Delivery Fees
	 
	   	Notwithstanding sub-paragraph 1.2 above, the Parties agree that with regard to any New
Contract which is Similar to a Current Contract appearing in the table in sub paragraph
1.2, the IPE acknowledges that LCH may incur material marginal development costs in
respect of delivery processes and that LCH’s marginal operating costs in respect of
deliveries may be, or may reasonably be expected to be, materially greater than the
equivalent costs in relation to delivered Current Contracts. In such circumstances LCH
may bring forward proposals to set delivery fees charged to Clearing Members at a higher
level than the delivery fees for equivalent Current Contracts. LCH shall consult the IPE
on such proposals which shall be implemented subject to the IPE’s prior written consent,
such consent not to be unreasonably withheld.
	 
	2  	Fee Collections
	 
	   	At the request of the IPE and if permitted by the IPE Regulations, LCH shall collect from
Clearing Members and pay to the IPE such levies as may from time to time be payable by
such Clearing Members to the IPE, in which event:

	 	(i)  	LCH shall not be obliged to make such collection at times or in a manner
other than the times or manner at or in which LCH would normally collect from
Clearing Members money due to LCH;
	 
	 	(ii)  	LCH shall provide to the IPE within 5 Business Days of the end of each
month a statement showing the amount collected in such detail and on such terms as
may be agreed, together with payment of such amount to the IPE;

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	 	(iii)  	LCH shall not be obliged to make any rebate or repay any levy which may
be due from the IPE to Clearing Members; and
	 
	 	(iv)  	LCH shall not be obliged to pursue such collection where a Clearing
Member defaults in payment.

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Schedule 5

Change Control

	1  	Discussion of Changes
	 
	   	Within five Business Days after either Party (the “Proposing Party”) notifies the other
(the “Receiving Party”) of a proposal for a Change, the IPE and LCH shall discuss the
relevant Change to agree whether they can proceed further with the proposed Change or
wish to abandon the proposed Change.
	 
	2  	Progression of Changes
	 
	   	If the Parties agree to proceed further with a Change following discussions under
paragraph 1 above, then the Proposing Party will prepare and submit to the Receiving
Party a document (a “Change Control Notification”) which shall substantially reflect the
details of the Change and shall contain the matters to be agreed formally by the Parties
in respect of that Change.
	 
	3  	Contents of the Change Control Notification
	 
	   	Each Change Control Notification shall take the form as agreed from time to time between
the Parties and shall contain:

	 	(i)  	a serial number,
	 
	 	(ii)  	the originator and date of the request for the relevant Change;
	 
	 	(iii)  	the reason for the relevant Change;
	 
	 	(iv)  	full details of the relevant Change;
	 
	 	(v)  	details of any variations to this Agreement to be made as a result of the
relevant Change;
	 
	 	(vi)  	a proposed timetable for implementing the relevant Change;
	 
	 	(vii)  	the date of expiry of validity of the Change Control Notification as
agreed between the Parties; and
	 
	 	(viii)  	provision for signature by the IPE and LCH for acceptance or rejection of the
Change Control Notification.

	4  	Consideration of Change Control Notification
	 
	   	In respect of each Change Control Notification, the Receiving Party will, within the
period of its validity, evaluate the Change Control Notification and, as appropriate:

	 	(i)  	approve the Change; or
	 
	 	(ii)  	reject the Change; or

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	 	(iii)  	endeavour to reach agreement with the Proposing Party on any changes
needed to the Change Control Notification to make the Change acceptable to the
Proposing Party.

	5  	Notification
	 
	5.1  	If the Receiving Party accepts the Change Control Notification (either as submitted by the
Proposing Party or as amended by agreement between the Parties), then the IPE and LCH will
sign as agreed, as soon as possible thereafter, two copies of the Change Control Notification,
with each Party retaining one signed copy. Upon the Change Control Notification being signed
by both Parties, this Agreement shall, as appropriate, be taken to have been amended in
accordance with the Change Control Notification.
	 
	5.2  	Unless and until the Parties have agreed the contents of a Change Control Notification, the
Parties must continue to perform their respective obligations under this Agreement without
that variation.
	 
	6  	Change to Services
	 
	   	In relation to any proposed Change involving a Change to the Services, if the proposed
Change to the Services would result in the LCH providing a service which the Parties
agree was provided by LCH as at the date of this Agreement (but not specified in Schedule
1 for whatsoever reason), LCH shall approve the proposed Change, and the Parties shall
agree to whom that Service is provided, and shall agree to amend Schedule 1 (including
sub-paragraph 1.2 of Schedule 1) accordingly.

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Schedule 6

Relationship Management

	1  	The IPE Contract Manager and LCH Contract Manager
	 
	1.1  	The principal point of contact between the IPE and LCH in relation to issues arising out of
the performance of the Services will be the IPE Contract Manager and the LCH Contract Manager.
Either Party acting reasonably may change the identity of their respective representative at
any time by prior written notice to the other Party.
	 
	1.2  	Unless the IPE otherwise agrees, LCH shall ensure that the LCH Contract Manager does not
undertake any work for LCH or any Group Company of LCH on any Energy Products other than
provision of services to the IPE Group.
	 
	1.3  	Meetings between the IPE Contract Manager and the LCH Contract Manager will take place
regularly but no less than six times per calendar year. Such meetings will be held to discuss
the day-to-day operational issues arising out of the provision of the Services, and any issues
which may require escalation to the next meeting of the IPE/LCH Liaison Committee.
	 
	1.4  	In the event that an issue requires to be escalated to the IPE/LCH Liaison Committee, the IPE
Contract Manager and the LCH Contract Manager shall work together to prepare such reports as
may be appropriate for submission to the. IPE/LCH Liaison Committee.
	 
	2  	The IPE/LCH Liaison Committee
	 
	2.1  	The objective of the IPE/LCH Liaison Committee is to act as an escalation point for the IPE
Contract Manager and/or the LCH Contract Manager and to ensure that strategic as well as
operational issues are being raised and addressed as between the Parties. Strategic issues
affecting the Services should be presented to the IPE/LCH Liaison Committee by either Party as
soon as reasonably practicable to ensure appropriate prioritisation and assist decision
making.
	 
	2.2  	The membership of the IPE/LCH Liaison Committee shall, at a minimum, be as follows:

	 	 	 	 	 
	

	 	For the IPE:
	 	For LCH:
	

	 	A Director
	 	A Director
	

	 	IPE Contract Manager
	 	LCH Contract Manager

	2.3  	Meetings of the IPE/LCH Liaison Committee shall be held at least quarterly. Additional
meetings may be called upon reasonable notice given by either Party.
	 
	2.4  	The IPE Contract Manager and the LCH Contract Manager shall agree the time, location, agenda,
procedures and method of recording each meeting.

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	2.5  	Both the IPE and LCH will take all reasonable steps to ensure that their appropriate
representatives or suitable alternates attend all meetings.

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Schedule 7

Benchmarking Process

	1  	Benchmarking Notices
	 
	1.1  	The IPE may, by notice in writing to LCH (a “Benchmarking Notice”), subject:

	 	(i)  	any aspect of the Services (other than Fees and charges); and/or
	 
	 	(ii)  	the Service Levels,

	   	to formal benchmarking.

	1.2  	The IPE may withdraw any Benchmarking Notice, and cancel the appointment of the Benchmarking
Advisor (as defined in sub-paragraph 2.1 below), at any time before acceptance by the
Benchmarking Advisor of his or her appointment (or at any time with LCH’s written consent).
	 
	2  	Benchmarking Advisor
	 
	2.1  	The benchmarking process shall be undertaken by an organisation recognised as having
benchmarking capability nominated by the IPE and agreed by LCH (such agreement not to be
unreasonably withheld) (the “Benchmarking Advisor”). For the avoidance of doubt, the
Benchmarking Advisor shall not be an employee, director or other staff member of an RCH or
overseas equivalent. IPE shall provide to LCH evidence of the proposed Benchmarking Advisor’s
qualifications and experience.
	 
	2.2  	IPE shall bear the fees of the Benchmarking Advisor.
	 
	2.3  	The Benchmarking Advisor shall be required to submit to the Parties the name and curriculum
vitae of each of its proposed personnel to be deployed on the matter. Each Party shall have
the right to object to the deployment of proposed personnel and to require the Benchmarking
Advisor to propose (and submit particulars of) alternative personnel, provided that the
reasons for its objections are reasonable, and are supplied to the other Party and the
Benchmarking Advisor in writing within 10 Business Days of the Parties receiving the
particulars of the personnel.
	 
	2.4  	The Benchmarking Advisor shall be required to enter into an appropriate confidentiality
agreement on terms to be agreed between the Parties.
	 
	2.5  	The IPE shall not exercise its right to institute the benchmarking process more than once
every two calendar years, unless LCH agrees otherwise, except that the IPE may institute such
benchmarking process within six weeks of the occurrence of a material failure of a material
part of the Services.
	 
	3  	Benchmarking Terms of Reference
	 
	3.1  	In order that there are no ambiguities in relation to each Party’s understanding of how the
benchmarking activity is to be undertaken, its findings interpreted and any resulting actions
taken, the Benchmarking Advisor will be instructed to conduct the

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	   	benchmarking activity in accordance with a written set of instructions (the “Benchmarking
Terms of Reference”). The IPE shall prepare the first draft of the Benchmarking Terms of
Reference and deliver it to LCH. The IPE and LCH shall endeavour to agree the
Benchmarking Terms of Reference. If the IPE and LCH are unable to agree the Benchmarking
Terms of Reference within 20 Business Days of the date on which the first draft was
delivered to LCH, either Party may request the Benchmarking Advisor to prepare a draft
Benchmarking Terms of Reference. Neither Party shall unreasonably withhold its approval
of the draft Benchmarking Terms of Reference prepared by the Benchmarking Advisor.
Following agreement of the Benchmarking Terms of Reference, a representative of each
Party shall sign the Benchmarking Terms of Reference, which shall then be delivered by
either Party to the Benchmarking Advisor.
	 
	3.2  	As a minimum, the Benchmarking Terms of Reference will instruct the Benchmarking Advisor:

	 	(i)  	to compare, using generally accepted benchmarking processes, the
benchmarked matter at the start of the calendar year during which the Benchmarking
Notice is served (the “Benchmarking Time”) with service levels for equivalent
services, but taking into account any information provided and representations made
to the Benchmarking Advisor by the Parties;
	 
	 	(ii)  	as to the external party or parties providing services against which the
Services will be compared;
	 
	 	(iii)  	to assess objectively the suitability and competitiveness of the
benchmarked matter when considered against:

	 	(a)  	the service performance for the 12 month period prior to
the Benchmarking Time which shall cover scope, quantity, quality,
composition and complexity of the service requirements; and
	 
	 	(b)  	the current and expected service requirements for the 12
months after the Benchmarking Time, covering quantity, quality, composition
and complexity of the service requirements;

	3.2.1  	to present a written report summarising his findings and conclusions (the “Benchmarking
Report”) to the IPE and LCH, as soon as practicable and, in any event, no later than 8 weeks
after the date on which the Benchmarking Terms of Reference were settled in accordance with
sub-paragraph 3.1 above.
	 
	3.3  	For the avoidance of doubt, the Benchmarking Advisor may consider factors other than those
set out in the Benchmarking Terms of Reference (but he may not disregard factors which are set
out therein) where not to do so would result in the Benchmarking Report being materially
unfair to either Party.

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	4  	Further Obligations of the Parties
	 
	   	Each Party shall provide the Benchmarking Advisor with such information and assistance as
shall be agreed between the Parties. The Parties shall co-operate in good faith with the
Benchmarking Advisor. The Parties agree that they may disclose to the Benchmarking
Advisor the terms of this Agreement.
	 
	5  	Benchmarking Reports
	 
	5.1  	The IPE and LCH shall be given a period of 20 Business Days following receipt of the
Benchmarking Report to review and comment on the findings.
	 
	5.2  	The information in any and all Benchmarking Reports shall be treated in the same way as if it
were confidential information disclosed by a Party under this Agreement.
	 
	5.3  	Where the Benchmarking Report identifies that the Service Levels are lower than those
recommended by the Benchmarking Adviser, or identifies in some other respect that the Services
and/or Service Levels are inferior to those recommended by the Benchmarking Adviser, LCH shall
consider the relevant recommendation and make such adjustments to the Services as it considers
appropriate. LCH shall provide the IPE with an explanation should it consider the making of
such adjustment(s) inappropriate. Either Party may treat any such response as a Dispute to be
resolved in accordance with Clause 16 of this Agreement.

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Schedule 8

Exit Management

	1  	Development of Exit Management Plan
	 
	   	Following the date of this Agreement, the Parties shall prepare an exit management plan
to facilitate the provision of replacement Services to the IPE by (a) nominated Successor
Operator(s) including, for the avoidance of doubt, transfer of open interests to such
Successor Operator(s) (the “Exit Management Plan”). Each of the Parties, acting in good
faith, shall use their respective reasonable endeavours to agree the Exit Management Plan
no later than 9 months after the date of this Agreement. Once agreed, the Exit Management
Plan shall be signed by both Parties.
	 
	2  	The Exit Phase
	 
	   	During the Exit Phase:

	 	(i)  	LCH shall use all reasonable endeavours to ensure that the Services are
supplied in accordance with this Agreement and the Service Levels;
	 
	 	(ii)  	LCH and the IPE shall use all reasonable endeavours during the Exit Phase
to implement the Exit Management Plan successfully and in full;
	 
	 	(iii)  	where the Exit Management Plan so provides, LCH shall provide the IPE
and/or any nominated Successor Operator(s) with copies of all information identified
in such Exit Management Plan in such form as may be agreed between the Parties in a
timely fashion in accordance with the Exit Management Plan;
	 
	 	(iv)  	LCH shall return or procure the return to the IPE of all property of the
IPE relevant to the Services and which belongs to the IPE and which is in the
possession of LCH, its officers, employees, agents or contractors; and
	 
	 	(v)  	the IPE shall return or procure the return to LCH of all property of LCH
relevant to the Services and which belongs to LCH and which is in the possession of
the IPE, its officers, employees, agents or contractors;

	   	provided that, in the performance of the Exit Management Plan, LCH shall not be required
to breach any duty of confidentiality properly owed to any person nor to transfer or
otherwise deal with any Registered Contracts without such member consents as the Parties
deem appropriate.

	3  	Intellectual Property Rights
	 
	   	On termination of this Agreement, any licence to LCH of the IPE’s Intellectual Property
Rights, and any licence to the IPE of LCH’s Intellectual Property Rights, shall cease.

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	4  	IPE Materials and LCH Materials
	 
	   	Upon termination of this Agreement, LCH shall identify the IPE Materials by written
notice to the IPE and the IPE shall identify the LCH Materials by written notice to the
LCH and:

	 	(i)  	LCH shall return the IPE Materials to the IPE and the IPE shall return
the LCH Materials to LCH; and/or
	 
	 	(ii)  	if the IPE so elects by written notice, LCH shall delete the IPE
Materials from all information files, if any, maintained by LCH; and, if LCH so
elects by written notice, the IPE shall delete the LCH Materials from all
information files, if any, maintained by the IPE.

	5  	Payment
	 
	   	The Parties agree that the costs of implementing the Exit Management Plan shall be borne
as set out therein, as shall the basis for the recovery of any unrecovered development
costs.

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Schedule 9

IPE Dependencies

	1  	Records
	 
	   	Throughout the Business Day the IPE shall provide LCH with a full, complete and accurate
record of all IPE Contracts entered into on that Business Day in machine readable form in
accordance with the IPE’s procedures.
	 
	2  	Details of IPE Contracts
	 
	2.1  	The IPE shall ensure at all times that IPE Members are required to present to the IPE details
of all IPE Contracts entered into on the relevant day so far as is known to them and the IPE
shall take all reasonable steps to ensure that the IPE Regulations are enforced in that
regard.
	 
	2.2  	The IPE shall at all times maintain full, complete and accurate records of all IPE Contracts
presented for registration to LCH, except IPE Contracts arising from the exercise of
registered Options. Such records shall be in such form as may be agreed from time to time
between LCH and the IPE; provided that at least the following information shall be retained by
the IPE:

	 	(i)  	the date and time at which the IPE Contract was made or was notified to
the IPE;
	 
	 	(ii)  	the names of the IPE Members who entered the IPE Contract and the
Clearing Member(s) in whose names it was presented for registration; and
	 
	 	(iii)  	the commodity the quantity or number of lots, the delivery month or
prompt date and the price (or, in the case of an Option, the strike price and the
premium).

	2.3  	The IPE shall allow LCH access to the records referred to in sub-paragraph 2.2 above at all
reasonable times on reasonable notice and retain the records for a period of 3 years from the
date on which they were created.
	 
	3  	Information
	 
	3.1  	The IPE shall use its best endeavours to ensure that all information provided to LCH by the
IPE is accurate in all material respects.
	 
	3.2  	Subject to the express provisions of this Agreement, the IPE shall respond promptly to all
reasonable requests by LCH for information or decisions relating to this Agreement, to the
extent reasonably required by LCH for the purpose of performing its obligations under this
Agreement.

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	4  	Business Continuity
	 
	   	The IPE shall provide reasonable co-operation in the testing by LCH of the Business
Continuity Arrangements in accordance with paragraph 4 of Schedule 3 (Business Continuity
Arrangements).
	 
	5  	Official Quotations
	 
	   	The IPE shall calculate all official quotations required by the IPE Regulations. In
particular, the IPE shall each Business Day, at such times and in such manner as the
Parties may from time to time agree, notify LCH of the price or value which properly and
fairly represents the price or value of each commodity which is the subject of an IPE
Contract at the time as at which such price or value is given.
	 
	6  	Invoicing Back
	 
	   	Where an IPE Contract is to be invoiced back or closed out by resale under the IPE
Regulations or the LCH Regulations or the LCH Procedures, the IPE shall fix an invoicing
back price or premium (in the case of an Option) or resale price within 24 hours of being
requested in writing by LCH to do so.
	 
	7  	Personnel
	 
	   	The IPE shall provide appropriately qualified and experienced personnel for the purposes
of discussing matters which the IPE and LCH are from time to time required to discuss,
consult on and/or attempt to agree for the purposes of this Agreement.
	 
	8  	Assistance
	 
	   	The IPE shall provide LCH, on request, with reasonable assistance and cooperation to
assist LCH in understanding the requirements of the IPE Regulations and/or the IPE
System.

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Schedule 10

Information Technology and Data Protection

	1  	Euro
	 
	   	LCH will, to the extent to which it stores or processes monetary amounts or
currency-related data, conduct any relevant currency conversions in accordance with
applicable Law.
	 
	2  	IT Security Requirements
	 
	2.1  	Each Party shall be responsible for its own information technology security. LCH shall
maintain an appropriate information technology security policy approved by the LCH Board of
which all LCH staff shall be made aware. LCH’s staff shall be made aware of such aspects of
IPE’s technology security as necessary. LCH undertakes to disclose its information technology
security policy under terms of confidentiality to an appropriately qualified person nominated
by the IPE. Information technology risk assessments will be carried out in accordance with LCH
policy.
	 
	2.2  	Each Party will review on a regular basis its own access levels (including super user, system
administrator and similar rights) in relation to information technology security.
	 
	2.3  	Amendments to physical access rights to the LCH’s information technology locations will be
consistent with the LCH information technology policy.
	 
	3  	Technology Refresh
	 
	   	Without limiting any of its other obligations under this Agreement, LCH shall, and shall
procure that its sub-contractors shall, keep the resources (including the hardware and
software) used in providing the Services to the IPE (the “Technical Resources”) at a
technological level that is comparable with the level of technological advancement
generally being used by LCH in relation to other Exchanges or markets which are in the
nature of commodity and/or commodity derivative contracts and which, for the avoidance of
doubt, includes The London Metal Exchange Limited and the Euronext Group, except as
otherwise required by the IPE.
	 
	4  	Maintenance of CPS
	 
	4.1  	LCH shall procure that the CPS clearing processing system continues to be supported for a
period of 3 years from the date of this Agreement, unless otherwise agreed in writing by the
IPE.
	 
	4.2  	LCH agrees that:

	 	(i)  	It will consult with the IPE in the on-going development of its IT
strategy insofar as the same may affect the provision of the Services, including in
relation to any successor system to the CPS clearing processing system; and
	 
	 	(ii)  	It will, at the IPE’s election, make available to the IPE as part of the
Services such elements of its Clearing 21 system (or any other clearing processing

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	 	   	system which it may develop) as it may from time to time make available to other
Exchanges (including, for the avoidance of doubt, members of the Euronext Group).

	4.3  	LCH shall ensure that any successor system to the CPS clearing processing system achieves
levels of functionality, performance and reliability not materially lower than those provided
by CPS in the 12 month period prior to the date of this Agreement or, if higher, the 12 month
period prior to the adoption of such successor system.
	 
	5  	Provision of interface
	 
	   	LCH shall ensure that any successor, enhancement or replacement system for CPS shall
support an interface with the IPE System.
	 
	6  	Loss of Data
	 
	6.1  	In the event that any Transaction Data is either destroyed or lost or is sufficiently
degraded to be unusable solely by a breach of this Agreement by LCH, LCH shall be liable for
the cost, if any, of reconstitution of that data and/or the costs and expenses incurred by the
IPE in recreating any such data (which, for the avoidance of doubt, shall not be re-charged to
the IPE). Payment of such costs by LCH in accordance with this sub-paragraph 6.1 shall not
prejudice or affect any other right of action or remedy which shall have accrued, or shall
thereafter accrue, to the IPE.
	 
	6.2  	To the extent that data transmitted or processed in connection with the Services is either
destroyed or lost or is sufficiently degraded to be unusable solely by a breach of this
Agreement by the IPE (the “Corrupted Data”), the IPE shall be liable for the cost of
reconstruction of that data and/or the costs and expenses incurred by LCH in recreating such
data.
	 
	6.3  	Both Parties shall use their respective reasonable endeavours in accordance with Good
Industry Practice to prevent the introduction of any Virus to the IT System of the other Party
which shall include without limitation utilising commercially available anti-Virus detection
applications. In this sub-paragraph 6.3, “Virus” means any thing or device incorporated in, or
attached to, any software or data which may impair or otherwise adversely affect the operation
of any computer, prevent or hinder access to any program or data, impair the operation of any
program or the reliability of any data (whether by rearranging the same within the computer or
any storage medium or device or by altering or erasing the program or data in whole or in
part, or otherwise), including computer viruses and other similar things.
	 
	7  	Data Protection
	 
	   	In connection with the subject matter of this Agreement, both parties shall comply with
all applicable data protection Law and any notifications or registrations made by either
Party under such Law.

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Schedule 11

IPE Regulations

	1  	IPE Members
	 
	1.1  	In accordance with the IPE Regulations, the IPE may at any time introduce a new category or
class of IPE Member or alter or modify the rights, privileges and/or obligations of an
existing category or class of IPE Member; provided that where such introduction, alteration or
modification may affect the clearing of contracts by LCH, the IPE shall as soon as reasonably
practicable advise LCH of its proposal to make the introduction, alteration or modification
and shall thereafter consult with LCH.
	 
	1.2  	Without prejudice to the requirement to inform and consult in sub-paragraph 1.1 above, the
IPE shall give LCH not less than 14 days’ written notice of the date on which the IPE intends
to introduce a new category or class of IPE Member or to alter or modify the rights,
privileges or obligations of an existing category or class of IPE Member.
	 
	1.3  	LCH may, by written notice to the IPE (to be given no less than 7 days before the expiry of
the period specified in paragraph 1.2 above), decline to register any IPE Contract presented
by, or having any connection with, a new category or class of IPE Member if LCH reasonably
determines that the introduction of such new category or class of IPE Member will lead to any
change in the obligations of Clearing Members to any class or category of IPE Member or to
LCH, or that it will lead to an increase in the liabilities or obligations of LCH. This
paragraph is without prejudice to the rights of LCH under the LCH Regulations.
	 
	1.4  	If LCH declines pursuant to paragraph 1.3 above to register IPE Contracts presented by or
having any connection with a new category or class of IPE Member, the IPE shall be entitled to
make other arrangements for clearing in respect of such IPE Contracts.
	 
	1.5  	Neither LCH nor the IPE shall make any public announcement of the IPE’s intention to
introduce a new category or class of IPE Member or to alter or modify the rights, privileges
or obligations of an existing category or class of IPE Member until the period specified in
paragraph 1.2 above has elapsed unless such announcement or disclosure has been agreed to by
both LCH and the IPE.
	 
	1.6  	Paragraphs 1.1 to 1.5 above shall have effect without prejudice to sub-clause 6.1 of this
Agreement.
	 
	2  	Give-Ups
	 
	   	The IPE may, in accordance with the IPE Regulations, allow and require Clearing Members
to assume responsibility for IPE Contracts made by IPE Members who are not Clearing
Members. Such IPE Members shall be required to enter into a clearing agreement
substantially in the form (or one of the forms if more than one, as appropriate) in
current use at the date of this Agreement (copies of which have been signed by the
parties for the purposes of identification) or such other form proposed

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	   	by LCH and approved in writing by the IPE, and the IPE shall not (without the consent of
LCH) cause or permit any change in IPE Regulations which is inconsistent with the terms
of such clearing agreement. Where the IPE Regulations do not make any provision for
clearing agreements, the foregoing sentence shall be of no effect.
	 
	3  	Dealing as Principal
	 
	   	In all dealings with LCH, Clearing Members shall be required to act as principals and the
IPE shall make it a provision of the IPE Regulations that all IPE Contracts entered into
in accordance with the IPE Regulations shall be made by an IPE Member as a principal with
any other IPE Member, and not as agent.

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