|
Exhibit 10.5
EXECUTION VERSION
ADMINISTRATIVE SERVICES
AGREEMENT
This ADMINISTRATIVE SERVICES
AGREEMENT is made and entered into as of March 6, 2008, among
CANTOR FITZGERALD, L.P., a Delaware limited partnership (
“CFLP” ), on behalf of itself and its direct and
indirect, current and future, subsidiaries and affiliates, other
than BGC Partners, Inc. and its direct and indirect, current and
future subsidiaries and eSpeed, Inc. and its direct and indirect,
current and future subsidiaries ( “Cantor” ) and
BGC Partners, Inc., a Delaware corporation (
“BGCP” ), on behalf of itself and its direct and
indirect, current and future, subsidiaries ( “BGC
Partners” ).
W I T
N E S S E T H
:
WHEREAS, Cantor has the
resources and capacity to provide certain services, including
office space, personnel and corporate services, such as cash
management, internal audit, information technology, facilities
management, promotional sales and marketing, legal, payroll,
benefits administration and other administrative services and
insurance services (collectively, “Administrative
Services” );
WHEREAS, Cantor is willing to
provide or arrange for the provision of Administrative Services to
BGCP, all upon the terms and conditions set forth
herein;
WHEREAS, in the absence of
obtaining such services from Cantor, BGCP would require additional
staff and would need to enhance its existing administrative
infrastructure;
WHEREAS, BGCP may develop the
resources and capacity to provide certain Administrative Services
to Cantor, and is willing to provide or arrange for the provision
of such services to Cantor, all upon the terms and conditions set
forth herein; and
WHEREAS, each of the parties
hereto acknowledges that greater efficiencies and reduced costs are
expected to be achieved from the economies of scale associated with
the provision of such services by Cantor to BGCP and by BGCP to
Cantor in the manner provided herein during the term
hereof;
NOW, THEREFORE, in
consideration of the premises contained herein, it is agreed as
follows:
1. Term.
(a) The term of this
Agreement shall commence at the Closing (as such term is defined in
the Separation Agreement (the “Separation
Agreement” ),
by and among CFLP, BGCP, BGC Partners,
L.P., BGC Global Holdings, L.P. and BGC Holdings, L.P.) and shall
remain in effect for a three-year period (the “Initial
Term” ). Thereafter, this Agreement shall be renewed
automatically for successive one-year terms (each, an
“Extended Term” ), unless any party shall give
written notice to the other parties at least 120 days before the
end of the Initial Term or the then current Extended Term, as the
case may be, of its desire to terminate this Agreement, in which
event this Agreement shall end with respect to the terminating
party on the last day of the Initial Term or the then current
Extended Term, as the case may be, provided , however
, that in the event BGC Partners terminates this Agreement, Cantor
shall be entitled to continued use of any hardware and equipment
that it used prior to the date of this Agreement upon the terms and
conditions set forth herein (including the payment terms in
Section 5), and provided , further , that the
Providing Party shall not be required to repair or replace any such
hardware or equipment.
(b) This Agreement may be
terminated by a party as provided herein or, as provided in
Section 12, with respect to a particular service or group of
services only, in which case it shall remain in full force and
effect with respect to the other services described herein. The
terminating party shall pay to the other party an amount equal to
the costs incurred by the party providing services as a result of
such termination, including, without limitation, any severance or
cancellation fees. The Initial Term and the Extended Term are
referred to herein as the “Term” .
2.
Services.
(a) During the Term hereof
and upon the terms and conditions set forth herein, Cantor shall
provide to BGC Partners the following services as reasonably
requested by BGC Partners from time to time:
(i) administration and benefits services, (ii) employee
benefits, human resources and payroll services,
(iii) financial and operations services, (iv) internal
auditing services, (v) legal related services, (vi) risk
management services, (vii) accounting services,
(viii) general tax services, (ix) communications
facilities and services, including e-mail, (x) network and
data center facilities, (xi) hardware and equipment,
(xii) facilities management services, (xiii) promotional,
sales and marketing services, (xiv) procuring of insurance
coverage, (xv) office space and (xvi) such other
miscellaneous services as the parties may reasonably agree, it
being the intention of the parties that Cantor will continue to
provide to BGC Partners all services provided by Cantor to BGC
Partners prior to the Closing.
(b) During the Term hereof
and upon the terms and conditions set forth herein, BGC Partners
shall provide to Cantor the services set forth in Sections 2(a)(i)
– (xvi) as Cantor may reasonably request from time to
time, it being the intention of the parties that after the
consummation of the transactions contemplated under the Merger
Agreement, BGC Partners will continue to provide to Cantor all
services provided by BGC Partners or eSpeed, Inc. prior to that
date.
2
(c) As used in this
Agreement, the party providing any particular Administrative
Services under this Section 2 is sometimes referred to as the
“Providing Party” and the party receiving any
particular Administrative Service is sometimes referred to as the
“Receiving Party.”
(d) Each Providing Party
shall use that degree of skill, care and diligence in the
performance of services hereunder that (i) a reasonable Person
would use acting in like circumstances in accordance with financial
services industry standards and all applicable laws and regulations
and (ii) is no less than that exercised by such Providing
Party with respect to comparable services that it performs on its
own behalf.
(e) The applicable Providing
Party and Receiving Party shall cooperate with each other in all
reasonable respects in matters relating to the provision and
receipt of the Administrative Services. Such cooperation shall
include obtaining all consents, licenses or approvals necessary to
permit each party to perform its obligations hereunder.
3. Intellectual
Property.
(a) Other than Intellectual
Property (as such term is defined in the Separation Agreement)
transferred to BGC Partners as of the Closing pursuant to the
Separation Agreement, any Intellectual Property owned by Cantor or
third-party licensors or service providers that may be operated or
used by Cantor in connection with the provision of the
Administrative Services hereunder will remain the property of
Cantor or third-party licensors or service providers, and BGC
Partners shall have no rights or interests therein, except as may
otherwise be expressly provided herein, or in the Separation
Agreement or the Agreement and Plan of Merger (the “Merger
Agreement” ), dated the date hereof, by and among, BGCP,
CFLP, eSpeed, Inc., BGC Partners L.P., BGC Global Holdings, L.P.
and BGC Holdings, L.P.
(b) Any Intellectual Property
owned by BGC Partners or third-party licensors or service providers
that may be operated or used by BGC Partners in connection with the
provision of the Administrative Services hereunder will remain the
property of BGC Partners or third-party licensors or service
providers, and Cantor shall have no rights or interests therein,
except as may otherwise be expressly provided herein or in the
Separation Agreement or the Merger Agreement.
4. Authority.
Notwithstanding anything to the contrary contained in
Section 2 hereof, the parties hereto acknowledge and agree
that each party shall provide the services set forth in
Section 2 of this Agreement subject to the ultimate authority
of BGC Partners to control its own business and affairs. Each party
acknowledges that the services provided hereunder by any Providing
Party are intended to be administrative, technical and ministerial
and are not intended to set policy for the Receiving
Party.
3
5. Charges for
Services.
(a) In consideration for
providing the Administrative Services provided for in
Section 2 hereof (other than insurance services and real
estate), each Receiving Party shall pay to the Providing Party the
actual costs of such services, determined as follows:
Each Providing Party shall
charge the Receiving Party such Receiving Party’s appropriate
share of the aggregate cost actually incurred in connection with
the provision of such services in an amount equal to (i) the
direct cost that the Providing Party incurs in performing those
services plus (ii) a reasonable allocation of other allocated
costs, including, without limitation, depreciation and amortization
determined in a consistent and fair manner so as to cover such
Providing Party’s appropriate costs or in such other manner
the parties shall agree. The Providing Party shall not charge the
Receiving Party any portion of any tax for which the Providing
Party receives a rebate or credit, or to which the Providing Party
is entitled to a rebate or credit.
(b) To the extent that Cantor
provides insurance services hereunder, such insurance shall be
invoiced to and paid by BGC Partners as follows:
The premiums for each of the
insurance policies described in Section 2(a)(xii) shall be
allocated to BGC Partners by Cantor and shall be determined by
multiplying Cantor’s total actual insurance premiums for each
such coverage by a fraction, (i) in the case of general
liability or business interruption insurance, the numerator of
which is the aggregate consolidated net revenues (determined in
accordance with Generally Accepted Accounting Principles of the
United States of America) of BGC Partners and the denominator of
which is the aggregate consolidated net revenues of Cantor plus any
consolidated BGC Partners net revenues not included in
Cantor’s consolidated net revenues, excluding the revenues
from any division or subsidiary which does not benefit from or
which is not covered by the insurance to which these premiums
relate, (ii) in the case of property and casualty insurance,
the numerator of which is the number of employees of BGC Partners
and the denominator of which is the number of employees of BGC
Partners and Cantor’s affiliates, and (iii) in the case
of all others as mutually agreed to by BGC Partners and
Cantor.
(c) To the extent that Cantor
provides office space hereunder, such office space shall be
invoiced to and paid by BGC Partners as
|
