IntercontinentalExchange has signed a long-term license agreement for eSpeed’s Wagner Patent (United States Patent No. 4,903,201), which deals with automated futures trading systems in which transactions are completed by a computerized matching of bids and offers of futures contracts on an electronic platform. According to the deal, ICE will pay eSpeed $2 million per year as well as at least 10 cents per contract per side or at least 20 cents per contract traded per round trip, whichever is higher.

The licensing agreement follows ICE’s purchase last year of London-based International Petroleum Exchange (IPE), Europe’s largest energy futures exchange. At the time of the purchase, ICE announced its intent to expand its electronic trading platform for energy and metals-based OTC trading to encompass IPE’s roster of floor-traded energy futures and options contracts. ICE said the license of the Wagner Patent will provide legal certainty to traders, clearing banks and brokers wishing to utilize the ICE platform for trading IPE futures contracts from within the United States. It covers ICE’s use in certain markets including energy, certain metals, weather, sulfur and nitrogen pollution allowances and financial products (e.g. cash settled energy futures).

“eSpeed owns a valuable intellectual property asset that we at Intercontinental appreciate having access to,” said ICE CEO and Founder Jeffrey Sprecher. “We are grateful to eSpeed’s CEO Howard Lutnick, and General Counsel Stephen Merkel, for their willingness to work with us in putting together an agreement that serves the long-term interests of eSpeed’s shareholders, as well as the approximately 10,000 registered users of ICE who are now assured of digital access to the benchmark futures contracts of the IPE when they become available on ICE’s platform.”

eSpeed expects the agreement with ICE to be one of many with other third parties for licensing of the Wagner Patent. eSpeed, which has owned the patent since 2001, is confident that the method of electronic trading described in the Wagner Patent, specifically the automated trading and matching of bids and offers, will be the cornerstone for the development of any electronic futures markets in the U.S. and a magnet for partnerships and software solutions opportunities in the futures industry.

Lutnick said the agreement “illustrates our steps toward unlocking the potential value of the Wagner Patent for eSpeed. This is the first of many opportunities to use eSpeed’s leadership and expertise in the field of trading technology and its intellectual property to work together with highly regarded exchanges and consortia in the futures industry.”

The agreement is currently in effect and will continue through Feb. 7, 2007. Pursuant to eSpeed’s agreement with the ETS Group, the former owner of the Wagner Patent, eSpeed will pay ETS a small percentage of the revenue from the ICE agreement.

eSpeed is a subsidiary of Cantor Fitzgerald. It is a leading developer of business-to-business electronic marketplaces solutions and related trading technology solutions and operates multiple buyer/multiple seller real-time electronic marketplaces, including ICE competitor TradeSpark.

The ICE electronic trading system provides trading of 600 listed commodity and derivative contract types around the world. These include crude oil and refined products, natural gas, power, precious metals, weather derivatives and emissions allowances.

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