Software License Agreement Dated 10/01/99

Exhibit 10.18


Confidential Materials omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment. Asterisks denote omissions.


SOFTWARE LICENSE AGREEMENT
--------------------------


THIS SOFTWARE LICENSE AGREEMENT (this "Agreement") is made and entered into on this 1st day of October, 1999, by and between Deutsche Borse AG, a German Aktiengesellschaft with its registered office in Frankfurt am Main, Federal Republic of Germany ("DBAG"), the Swiss Stock Exchange, a Swiss association with its registered office in Zurich, Switzerland ("SWX" and, together with DBAG, "Licensors") and Ceres Trading Limited Partnership, a Delaware limited partnership having its principal offices in Chicago, Illinois, U.S.A. ("Ceres" or "Licensee"), and the Board of Trade of the City of Chicago ("CBOT"), an association created by special act of the Illinois legislature, and the managing general partner of Ceres.


PREAMBLE
--------


WHEREAS, the parties and certain of their affiliates are engaged in a joint undertaking to provide electronic trading facilities more efficiently by sharing technology and resources and to facilitate global trading by the members of the derivatives exchanges owned by them or their affiliates; and


WHEREAS, Licensors have developed, at substantial expense, software for trading financial derivative products; and


WHEREAS, as part of such undertaking, the parties deem it to be mutually advantageous to undertake to use, to the extent possible, the same software for trading on such derivatives exchanges; and


WHEREAS, in order to achieve this goal, Licensors have agreed to license software they have developed for use in electronic trading to Licensee on the terms herein provided; and


WHEREAS, the parties agree that the agreements between them should be structured so that, in the event their efforts at joint development and utilization of technology are not realized or are terminated for any reason, both parties should continue to be able individually to provide and support electronic trading facilities to their members and customers.


NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by both parties hereto, the parties agree as follows:


1 Definitions
-----------


Unless otherwise specified in the body of this Agreement, each term set forth below when used anywhere in this Agreement or its exhibits and attachments shall have the respective meaning ascribed to it below:


1.1 "Affiliate" means, with respect to any person, any person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person in question. For purposes of this definition, "control" means the


2


possession, directly or indirectly, of more than 50% of the equity interests of a person and the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. In addition, for purposes of this Agreement, CBOT and its Affiliates are deemed to be Affiliates of Ceres.


1.2 "Alliance Agreement" means the Alliance Agreement dated as of the date hereof and among SWX, DBAG, Eurex Deutschland, Eurex Zurich AG, Eurex Frankfurt AG, CBOT, Ceres and Ceres Alliance LLC, as amended, restated or replaced by such parties from time to time, to set forth certain of their understandings regarding their joint undertaking to develop and manage technology resources and operate a common network for electronic trading.


1.3 "CBOT Commercial Start" means the date on which Licensee first uses the Programs for the actual trading (as opposed to testing or simulation) of products.


1.4 "CBOT Competitor" means as of any date, (a) any entity providing facilities and services for the trading of derivative products which is located in Canada, Mexico or the United States or (b) any entity that provides or plans to provide facilities and services for the trading of derivative products substantially identical to any derivative product traded on the CBOT as of the date of the grant or proposed grant of any sublicense pursuant to Section 2.3. Notwithstanding the foregoing, the Joint Venture Entity and its Affiliates will not be deemed to be CBOT Competitors during the term of the Alliance Agreement, and, for the avoidance of doubt, any entity providing or planning to provide facilities or services for the trading of Cash Market Products (as that term is defined in the Alliance Agreement) will not deemed to be a CBOT Competitor with respect to such Cash Market Products.


1.5 "Effective Date" means the effective date of the Alliance Agreement.


1.6 "Eurex 2.0 Date" means September 28, 1998, the date on which the Eurex Exchanges implemented the software known as Eurex Release 2.0 on such Exchanges.


1.7 "Eurex Competitor" means, as of any date, (a) any entity providing facilities and services for the trading of derivative products which is located in any of the European countries listed in Schedule E of the Alliance Agreement (the "European Countries") or (b) any entity that provides or plans to provide facilities and services for the trading of derivative products substantially identical to any derivative product traded on either Eurex Exchange as of the date of the grant or proposed grant of any license pursuant to Section 2.3. Solely for purposes of this Agreement, the Euro and the Ecu shall be deemed to be currencies of the European Countries. Notwithstanding the foregoing, the Joint Venture Entity and its Affiliates will not be deemed to be Eurex Competitors during the term of the Alliance Agreement.


1.8 "Eurex Exchanges" means Eurex Deutschland and Eurex Zurich.


1.9 "Joint Venture Entity" means the joint venture entity defined in Section 3.1 of the Alliance Agreement.


1.10 "Licensee" means Ceres and any entity into which it may be merged or which acquires all or substantially all of its assets.


1.11 "Licensors" means the Licensors identified above and any entities into which


3


either of them may be merged or which acquires all or substantially all of the assets of either of them.


1.12 "Programs" means all of the software, in all formats (including, without limitation, source code, object code and executable code formats and interfaces such as look and feel, screen layouts, databases and database works, as well as all preparatory materials) which were used as of the Eurex 2.0 Date by the Licensors and the Eurex Exchanges in providing and supporting electronic trading facilities and services for the members of Eurex Exchanges, and other materials that Licensors agree to license to Licensee, the Program Documentation and any portions of any of the foregoing that form the basis of, are contained or reflected in, form a portion of or are incorporated in derivative works prepared pursuant to this Agreement; provided, however, that the term "Programs" does not include the commercially available third party software identified in Exhibit A hereto which Licensors and the Eurex Exchanges currently use in providing such electronic trading facilities and services.


1.13 "Program Documentation" means all design documentation, technical specifications and user manuals, in both human readable and machine readable form, flow charts and narratives, as well as all other materials used as of the Eurex 2.0 Date by Licensors and the Eurex Exchanges in providing and supporting electronic trading facilities and services for the members of the Eurex Exchanges and all other tangible materials provided by Licensors to Licensee pursuant to the terms of this Agreement which represent, describe or specify the Programs or their uses, operations or applications.


1.14 "Proprietary Rights" means, with respect to any item, all trade secret, copyright, patent, trademark, service mark, certification mark, trade dress or other intellectual property or proprietary rights in all countries related to such item or any part thereof, any extensions and renewals of the foregoing, and any registrations, patents or applications with respect to the foregoing, including any Licensors Confidential Information (as defined in Section 7.3 below) included therein or related thereto.


1.15 "Release 3.0 Modifications" means all Modifications (as defined in Section 7.1 below) made to the Programs before the Effective Date.


2 Grant of License
----------------


2.1 Subject to the terms and conditions of this Agreement, Licensors hereby grant to Licensee a non-exclusive, non-transferable, irrevocable and perpetual license, royalty-free except as provided in Section 6 and non- terminable for any reason except by Licensee as provided in Section 8, to use, for itself and, by way of sublicenses granted pursuant to Section 2.2, its Affiliates, the Programs to provide and support electronic trading facilities and services for the trading of products of any kind on the CBOT and to distribute the same as herein provided. Licensee shall have the right to make sufficient copies of the Programs to support its use thereof as authorized hereunder. Licensee shall also have the right, itself or through independent contractors, to modify the Programs and make derivative works thereof and/or to merge the same into other programs and materials, subject to the provisions of the Alliance Agreement relating to maintenance of a common source code (as described in the Alliance Agreement). Licensee may use the Programs for such purposes at any number of locations anywhere in the world, and may permit the Programs to be used for such purposes by any employee or agent of Licensee or its permitted sublicensees. Further, Licensee may provide to CBOT users those components of the Programs, if any, as are necessary for such users to participate in the electronic trading facilities


4


described above. Licensee shall have no other rights with respect to the Programs other than as provided in this Agreement.


2.2 Licensee may sublicense the Programs to third parties, provided, however, that, prior to the expiration of five years after the Effective Date, any such sublicense shall require the consent of Licensors, which consent shall not be unreasonably withheld. No such consent shall be required for any such sublicense granted to (a) any entity performing clearing functions with respect to the electronic trading facilities described in Section 2.1 solely for purposes of performing such functions: (b) CBOT and others of its Affiliates to provide and support electronic trading facilities and services for CBOT users for the trading of products on the CBOT as contemplated in Section 2.1; and (c) during the term of the Alliance Agreement, the Joint Venture Entity and its Affiliates. Any such sublicense shall contain terms for the benefit of the Licensors which are comparable to the restrictions contained herein with respect to (i) protecting the confidentiality and proprietary nature of the Programs, the Licensors' Confidential Information and the Licensors' Proprietary Rights with respect thereto, (ii) limitations on use, (iii) disclaimers of warranties, (iv) limitations on liability and (v) limitations on transfers, assignments and sublicensings. Except for the sublicenses described in (a), (b) and (c) of this Section 2.2, Licensors and Licensee agree that they shall each have the right to one-half of the revenues received from any such sublicensee of the Programs (without material Modifications, as defined in Section 7.1 below) to which a sublicense is granted during the term of the Alliance Agreement. Revenue sharing with respect to distributions of the Programs (together with material Modifications) will be addressed in the Alliance Agreement or in a separate written agreement.


2.3 Notwithstanding the foregoing, Licensee shall at no time during the period from the date hereof through the fourth anniversary of the termination of the Alliance Agreement grant or permit to continue to exist, either directly or indirectly through one or more Affiliates or intermediaries, any sublicense of any portion of the Programs to any entity that is or becomes a Eurex Competitor at any such time. In partial consideration of this undertaking, the Licensors agree not to grant or permit to continue to exist, either directly or indirectly through one or more Affiliates or intermediaries, any license of any portion of the Programs to any entity that is or becomes a CBOT Competitor at any time during the period from the date hereof through the fourth anniversary of the termination of the Alliance Agreement.


2.4 All full and partial copies of any source code of the Programs and Program Documentation which contains or describes such source code, which Licensee acknowledges contains confidential and extremely valuable trade secrets of Licensors, shall not be disclosed other than as necessary (including to appropriate third party service providers) in connection with Licensee's business as described above and shall be stored and used only at sites within the United States or, subject to Licensors' consent, which may not be unreasonably withheld, in other countries, at which stringent security precautions are employed that reflect the confidential nature and extreme value of such source code and Program Documentation. Such consent is hereby granted by Licensors to the possession and use of the Programs, source code and related Program Documentation in Germany in connection with the Project described in the Alliance Agreement, subject to appropriate confidentiality arrangements and limitations on use.


2.5 Except as provided in Section 2.3 above, all of the restrictions, limitations and conditions contained in this Agreement on the use and disclosure of the Programs and the Confidential Information shall, except as may from time to time be otherwise agreed by the parties, terminate on the earlier to occur of (i) the date on which the portions of the Programs


5


remaining in the derivative works prepared pursuant to this Agreement, taken in the aggregate, comprise a de minimus portion of the value of such derivative works to Licensors or (ii) the ninth anniversary of the Effective Date.


3 Term of License
---------------


This Agreement shall be effective upon the Effective Date and shall continue in perpetuity unless terminated by Licensee pursuant to Section 8.


4 Delivery
--------


Licensor shall deliver the Programs to Licensee as soon as practicable after the Effective Date. Licensee shall be responsible for the installation of the Programs.


5 Warranties; Disclaimer of Warranties
------------------------------------


5.1 Licensors warrant that:


5.1.1 The Programs are listed and accurately described in the Specifications attached hereto as Exhibit B and include all of the software used on the Eurex 2.0 Date by Licensors and the Eurex Exchanges in providing and supporting electronic trading facilities and services for the members of the Eurex Exchanges except for the third party software identified in Exhibit A hereto which Licensors warrant is available from third party vendors.


5.1.2 To Licensors' knowledge as of the date hereof, (i) Licensors, taken together, and their respective licensors are the lawful owners of all intellectual property rights in the Programs with full rights to grant the license granted herein and (ii) as delivered to Licensee, the Programs do not infringe upon the intellectual property rights of any third party and are not subject to any claim of infringement by any third party. However, Licensors are aware of the claims based on U.S. Patent No. 4,903,201 (the "Patent") asserted in the case captioned Electronic Trading Systems Corporation v. Board of Trade, et al., Civil Action No. 3-99CV1016-X, pending in the United States District Court for the Northern District of Texas (the "Texas Case"). While none of the parties to this Agreement have any reason to believe that, when used in the manner contemplated in this Agreement, the Programs do or will infringe any valid patent rights of the plaintiff in the Texas Case, notwithstanding any other provision of this Agreement, no party shall have any liability (including, without limitation, under Section 5.2) to another party under this Agreement arising out of or in connection with the Patent or any claims asserted with respect thereto, in the Texas Case or otherwise, based upon the Patent.


5.1.3 To Licensors' knowledge as of the date hereof, the Programs do not contain any timer, clock, counter or other limiting design or routine which causes the Programs to become erased, inoperable or otherwise incapable of being used in the full manner for which they are designed and licensed pursuant to this Agreement after being used or copied a certain number of times, or after the lapse of a certain period of time, after the occurrence or lapse of any similar triggering factor or event, or because they have been installed on or moved to a central processing unit or system which has a different serial number, model number or other identification different from the system on which they were originally installed.


6


5.1.4 Licensors are adapting the Programs to enable them to accommodate the millennium date change for the functions for which they are intended to be used. Licensors are aware of no inability of the Programs to be so able to accommodate such date change and have no reason to believe that, after the implementation of such adaptations, such inabilities will occur. If such inabilities nevertheless become apparent, any adaptations Licensors make to eliminate such inabilities will be delivered to Licensee and shall be deemed to constitute a portion of the Programs.


5.1.5 Neither of Licensors is a party to any agreement that impairs its rights to grant the license herein or perform its obligations hereunder.


5.1.6 On the date hereof, Licensors use their electronic trading facilities to operate the Eurex Exchanges and, in the opinion of Licensors, such facilities, including the software used therein, function on such date satisfactorily in all material respects for such purposes.


5.2 Licensee's sole remedies with respect to breaches by Licensors of their warranties under Section 5.1 shall be the commercially reasonable efforts of the Licensors to correct such breaches or cause such breaches to be corrected.


5.3 Licensee recognizes that, in licensing the Programs from Licensors it is relying upon its own investigation of the Programs and its judgments on the suitability of the Programs for its purposes and acknowledges that Licensors can and do not make any representation or warranty that the Programs do or will (i) meet the requirements of Licensee or operate in configurations selected by Licensee, (ii) operate in the environment of Licensee in an uninterrupted or error-free manner or (iii) conform to any performance specifications.


5.4 EXCEPT AS SET FORTH IN SECTION 5.1, THE PROGRAMS ARE BEING PROVIDED TO LICENSEE AS IS, AND LICENSORS DO NOT MAKE, AND HEREBY DISCLAIM, ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND SHALL HAVE NO LIABILITY IN CONNECTION WITH OR ARISING OUT OF ANY FAILURE OF THE PROGRAMS (i) TO MEET LICENSEE'S REQUIREMENTS OR OPERATE IN CONFIGURATIONS SELECTED BY LICENSEE, (ii) TO OPERATE IN LICENSEE'S ENVIRONMENT IN AN UNINTERRUPTED OR ERROR-FREE MANNER OR (iii) TO CONFORM TO ANY PERFORMANCE SPECIFICATIONS, OR IN CONNECTION WITH OR ARISING OUT OF ANY ABILITY OR INABILITY TO USE THE PROGRAMS IN CONNECTION WITH ANY OF THE FINANCIAL PRODUCTS OR CONTRACTS TRADED (OR FAILED TO BE TRADED) ON ANY EXCHANGE OR BY ANY MEMBERS THEREOF. LICENSORS SHALL HAV ...