exv10w3





Exhibit 10.3




 




TAX RECEIVABLE AGREEMENT




among



FXCM INC.



and



THE PERSONS NAMED HEREIN



DATED AS OF December 1, 2010



 




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	Section 1.1 Definitions
	 	 	1	 
	 
	ARTICLE II DETERMINATION OF CERTAIN REALIZED TAX BENEFIT
	 	 	8	 
	 
	Section 2.1 Exchange Basis Adjustments
	 	 	8	 
	Section 2.2 Tax Benefit Schedule
	 	 	9	 
	Section 2.3 Procedures, Amendments
	 	 	9	 
	 
	ARTICLE III TAX BENEFIT PAYMENTS
	 	 	10	 
	 
	Section 3.1 Payments
	 	 	10	 
	Section 3.2 No Duplicative Payments
	 	 	11	 
	Section 3.3 Pro Rata Payments; Coordination of Benefits
	 	 	11	 
	 
	ARTICLE IV TERMINATION
	 	 	12	 
	 
	Section 4.1 Early Termination and Breach of Agreement
	 	 	12	 
	Section 4.2 Early Termination Notice
	 	 	13	 
	Section 4.3 Payment upon Early Termination
	 	 	13	 
	 
	ARTICLE V SUBORDINATION AND LATE PAYMENTS
	 	 	13	 
	 
	Section 5.1 Subordination
	 	 	13	 
	Section 5.2 Late Payments by the Corporate Taxpayer
	 	 	14	 
	 
	ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION
	 	 	14	 
	 
	Section 6.1 Participation in the Corporate Taxpayer’s and Holdings’ Tax Matters
	 	 	14	 
	Section 6.2 Consistency
	 	 	14	 
	Section 6.3 Cooperation
	 	 	14	 
	 
	ARTICLE VII MISCELLANEOUS
	 	 	15	 
	 
	Section 7.1 Notices
	 	 	15	 
	Section 7.2 Counterparts
	 	 	15	 
	Section 7.3 Entire Agreement; No Third Party Beneficiaries
	 	 	16	 
	Section 7.4 Governing Law
	 	 	16	 
	Section 7.5 Severability
	 	 	16	 
	Section 7.6 Successors; Assignment; Amendments; Waivers
	 	 	16	 
	Section 7.7 Titles and Subtitles
	 	 	17	 
	Section 7.8 Resolution of Disputes
	 	 	17	 
	Section 7.9 Reconciliation
	 	 	18	 
	Section 7.10 Withholding
	 	 	18	 






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	 	 	 	Page	 
	Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets
	 	 	19	 
	Section 7.12 Confidentiality
	 	 	19	 
	Section 7.13 Change in Law
	 	 	20	 
	Section 7.14 LLC Agreement
	 	 	20	 
	Section 7.15 Independent Nature of TRA Parties’ Rights and Obligations
	 	 	20	 
	Section 7.16 Headings
	 	 	20	 






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TAX RECEIVABLE AGREEMENT




          This TAX RECEIVABLE AGREEMENT (this “Agreement”), dated as of December 1, 2010, is
hereby entered into by and among FXCM Inc., a Delaware corporation (the “Corporate
Taxpayer”) and each of the other persons from time to time a party hereto (the “TRA
Parties”) and each of the successors and assigns thereto.



RECITALS




          WHEREAS, the TRA Parties hold limited liability company interests (the “Units”) in
FXCM Holdings, LLC, a Delaware limited liability company (“Holdings”), which is classified
as a partnership for United States federal income tax purposes;



          WHEREAS, the Corporate Taxpayer holds and will hold, directly and/or indirectly, Units;



          WHEREAS, the Units that are held by the TRA Parties (as defined below) may be exchanged for
cash or Class A common stock (the “Class A Shares”) of the Corporate Taxpayer, subject to
the provisions of the Exchange Agreement (as defined below);



          WHEREAS, Holdings and each of its direct and indirect subsidiaries treated as a partnership
for United States federal income tax purposes currently have and will have in effect an election
under Section 754 of the United States Internal Revenue Code of 1986, as amended (the
“Code”), for each Taxable Year (as defined below) in which a taxable acquisition of Units
by the Corporate Taxpayer from the TRA Parties for cash or Class A Shares (an “Exchange”)
occurs;



          WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the
effect of the Exchange Basis Adjustments and Imputed Interest on the liability for Taxes (each as
defined below) of the Corporate Taxpayer;



          NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements
set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:



ARTICLE I




DEFINITIONS



          Section 1.1 Definitions. As used in this Agreement, the terms set forth in this
Article I shall have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined).



          “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common
Control with, such first Person.



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          “Agreed Rate” means LIBOR plus 100 basis points.



          “Agreement” is defined in the Recitals of this Agreement.



          “Amended Schedule” is defined in Section 2.3(b) of this Agreement.



          A “Beneficial Owner” of a security is a Person who directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power,
which includes the power to vote, or to direct the voting of, such security and/or (ii) investment
power, which includes the power to dispose of, or to direct the disposition of, such security. The
terms “Beneficially Own” and “Beneficial Ownership” shall have correlative
meanings.



          “Board” means the Board of Directors of the Corporate Taxpayer.



          “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the State of New York shall
not be regarded as a Business Day.



          “Change in Tax Law” is defined in Section 7.13 of this Agreement.



          “Change of Control” means the occurrence of any of the following events:




	 	(i)	 	any Person or any group of Persons acting together which would
constitute a “group” for purposes of Section 13(d) of the Securities and
Exchange Act of 1934, or any successor provisions thereto (excluding (a) a
corporation or other entity owned, directly or indirectly, by the stockholders
of the Corporate Taxpayer in substantially the same proportions as their
ownership of stock of the Corporate Taxpayer or (b) Dror Niv, any “group” for
purposes of Section 13(d) of the Securities Act of 1934 or any successor
provisions thereto that includes Dror Niv or any Person more than 50% of the
combined voting power of the then outstanding voting securities of which are
owned by Dror Niv or any such “group”) is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Corporate Taxpayer representing
more than 50% of the combined voting power of the Corporate Taxpayer’s then
outstanding voting securities; or






	 	(ii)	 	the following individuals cease for any reason to
constitute a majority of the number of directors of the Corporate Taxpayer then
serving: individuals who, on the IPO Date, constitute the Board and any new
director whose appointment or election by the Board or nomination for election
by the Corporate Taxpayer’s shareholders was approved or recommended by a vote
of at least two-thirds (2/3) of the directors then still in office who either
were directors on the IPO Date or whose appointment, election or nomination for
election was previously so approved or recommended by the directors referred to
in this clause (ii); or




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	 	(iii)	 	there is consummated a merger or consolidation of the
Corporate Taxpayer with any other corporation or other entity, and, immediately
after the consummation of such merger or consolidation, either (x) the Board
immediately prior to the merger or consolidation does not constitute at least a
majority of the board of directors of the company surviving the merger or, if
the surviving company is a Subsidiary, the ultimate parent thereof, or (y) the
voting securities of the Corporate Taxpayer immediately prior to such merger or
consolidation do not continue to represent or are not converted into more than
50% of the combined voting power of the then outstanding voting securities of
the Person resulting from such merger or consolidation or, if the surviving
company is a Subsidiary, the ultimate parent thereof; or






	 	(iv)	 	the shareholders of the Corporate Taxpayer approve a plan
of complete liquidation or dissolution of the Corporate Taxpayer or there is
consummated an agreement or series of related agreements for the sale or other
disposition, directly or indirectly, by the Corporate Taxpayer of all or
substantially all of the Corporate Taxpayer’s assets, other than such sale or
other disposition by the Corporate Taxpayer of all or substantially all of the
Corporate Taxpayer’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by shareholders of the
Corporate Taxpayer in substantially the same proportions as their ownership of
the Corporate Taxpayer immediately prior to such sale.




Notwithstanding the foregoing, except with respect to clause (ii) and clause (iii)(x) above, a
“Change of Control” shall not be deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following which the record holders of
the shares of the Corporate Taxpayer immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in, and own
substantially all of the shares of, an entity which owns all or substantially all of the assets of
the Corporate Taxpayer immediately following such transaction or series of transactions.




          “Class A Shares” is defined in the Recitals of this Agreement.



          “Code” is defined in the Recitals of this Agreement.



          “Consolidated Group” means any group of corporations filing consolidated, combined or
unitary tax returns of which the Corporate Taxpayer is a member.



          “Control” means the possession, direct or indirect, of 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.



          “Corporate Taxpayer” is defined in the Recitals of this Agreement.



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          “Corporate Taxpayer Return” means the federal and/or state and/or local Tax Return, as
applicable, of the Corporate Taxpayer or any Consolidated Group filed with respect to Taxes of any
Taxable Year.



          “Cumulative Net Realized Tax Benefit” in respect of a TRA Party for a Taxable Year
means the cumulative amount of Realized Tax Benefits in respect of such TRA Party for all Taxable
Years of the Corporate Taxpayer, up to and including such Taxable Year, net of the cumulative
amount of Realized Tax Detriments in respect of such TRA Party for the same period. The Realized
Tax Benefit and Realized Tax Detriment in respect of each TRA Party for each Taxable Year shall be
determined based on the most recent Tax Benefit Schedule or Amended Schedule in respect of such TRA
Party, if any, in existence at the time of such determination.



          “Default Rate” means LIBOR plus 500 basis points.



          “Determination” shall have the meaning ascribed to such term in Section 1313(a) of the
Code or similar provision of state, foreign or local tax law, as applicable, or any other event
(including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount
of any liability for Tax.



          “Dispute” has the meaning set forth in Section 7.8(a) of this Agreement.



          “Early Termination Date” means the date of an Early Termination Notice for purposes of
determining the Early Termination Payment.



          “Early Termination Effective Date” is defined in Section 4.2 of this Agreement.



          “Early Termination Notice” is defined in Section 4.2 of this Agreement.



          “Early Termination Schedule” is defined in Section 4.2 of this Agreement.



          “Early Termination Payment” is defined in Section 4.3(b) of this Agreement.



          “Early Termination Rate” means LIBOR plus 100 basis points.



          “Exchange” is defined in the Recitals of this Agreement.



          “Exchange Agreement” means the Exchange Agreement among the Corporate Taxpayer,
Holdings and the TRA Parties dated as of the date hereof.



          “Exchange Basis Adjustment” in respect of a TRA Party means the adjustment to the tax
basis of an Exchange Reference Asset in respect of such TRA Party under Sections 732, 734(b) and
1012 of the Code (in situations where, as a result of one or more Exchanges by such Exchange TRA
Party, Holdings becomes an entity that is disregarded as separate from its owner for tax purposes)
or under Sections 734(b), 743(b) and 754 of the Code (in situations where, following an Exchange by
such TRA Party, Holdings remains in existence as an entity for U.S. federal income tax purposes)
and, in each case, comparable sections of state and local tax laws, as a result of an Exchange by
such TRA Party and the payments made by the Corporate



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Taxpayer in respect of such TRA Party
pursuant to this Agreement. For the avoidance of doubt, the amount of any Exchange Basis
Adjustment resulting from an Exchange of one or more Units shall be determined without regard to
any Pre-Exchange Transfer of such Units and as if any such Pre-Exchange Transfer had not occurred.




          “Exchange Basis Schedule” is defined in Section 2.1 of this Agreement.



          “Exchange Date” means the date of any Exchange.



          “Exchange Reference Asset” in respect of a TRA Party means an asset that is held by
Holdings, or by any of its direct or indirect subsidiaries treated as a partnership or disregarded
entity for purposes of the applicable Tax, at the time of an Exchange by such TRA Party. An
Exchange Reference Asset also includes any asset that is “substituted basis property” under Section
7701(a)(42) of the Code with respect to an Exchange Reference Asset.



          “Expert” is defined in Section 7.9 of this Agreement.



          “Hypothetical Tax Liability” in respect of a TRA Party means, with respect to any
Taxable Year, the liability for Taxes of, without duplication, (i) any Consolidated Group and the
Corporate Taxpayer and (ii) Holdings, but only with respect to the Corporate Taxpayer’s and any
other Consolidated Group members’ proportionate share of the Taxes imposed on Holdings, in each
case using the same methods, elections, conventions and similar practices used on the relevant
Corporate Taxpayer Return, but (i) using the Non-Stepped Up Tax Basis in respect of such TRA Party
(as reflected on the applicable Exchange Basis Schedule including amendments thereto for the
Taxable Year) and (ii) excluding any deduction attributable to Imputed Interest in respect of such
TRA Party for the Taxable Year. For the avoidance of doubt, Hypothetical Tax Liability shall be
determined without taking into account the carryover or carryback of any Tax item (or portions
thereof) that is attributable to the Exchange Basis Adjustment or Imputed Interest, as applicable.



          “Imputed Interest” in respect of a TRA Party shall mean any interest imputed under
Section 1272, 1274 or 483 or other provision of the Code and any similar provision of state and
local tax law with respect to the Corporate Taxpayer’s payment obligations in respect of such TRA
Party under this Agreement.



          “IPO” means the initial public offering of Class A Shares by the Corporate Taxpayer.



          “IPO Date” means the date of the IPO.



          “IRS” means the United States Internal Revenue Service.



          “LIBOR” means during any period, an interest rate per annum equal to the one-year
LIBOR reported, on the date two days prior to the first day of such period, on the Telerate Page
3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page
“LIBOR01” or by any other publicly available source of such market rate) for London interbank
offered rates for United States dollar deposits for such period.



5









 





          “LLC Agreement” means, with respect to Holdings, the Third Amended and Restated
Limited Liability Company Agreement of Holdings, dated on or about the date hereof, as amended from
time to time.



          “Market Value” shall mean the closing price of the Class A Shares on the applicable
Exchange Date on the national securities exchange or interdealer quotation system on which such
Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided,
that if the closing price is not reported by the Wall Street Journal for the applicable Exchange
Date, then the Market Value shall mean the closing price of the Class A Shares on the Business Day
immediately preceding such Exchange Date on the national securities exchange or interdealer
quotation system on which such Class A Shares are then traded or listed, as reported by the Wall
Street Journal; provided, further, that if the Class A Shares are not then listed
on a national securities exchange or interdealer quotation system, “Market Value” shall mean the
cash consideration paid for Class A Shares, or the fair market value of the other property
delivered for Class A Shares, as determined by the Board in good faith.



          “Material Objection Notice” has the meaning set forth in Section 4.2 of this
Agreement.



          “Non-Stepped Up Tax Basis” in respect of any TRA Party means, with respect to any
Exchange Reference Asset in respect of such TRA Party at any time, the Tax basis that such asset
would have had at such time if no Exchange Basis Adjustments in respect of such TRA Party had been
made.



          “Objection Notice” has the meaning set forth in Section 2.3(a) of this Agreement.



          “Payment Date” means any date on which a payment is required to be made pursuant to
this Agreement.



          “Person” means any individual, corporation, firm, partnership, joint venture, limited
liability company, estate, trust, business association, organization, governmental entity or other
entity.



          “Pre-Exchange Transfer” means any transfer (including upon the death of a Member) or
distribution in respect of one or more Units (i) that occurs prior to an Exchange of such Units,
and (ii) to which Section 743(b) of the Code applies.



          “Realized Tax Benefit” in respect of a TRA Party means, for a Taxable Year, the
excess, if any, of the Hypothetical Tax Liability in respect of such TRA Party over the actual
liability for Taxes of, without duplication, (i) any Consolidated Group and the Corporate Taxpayer
and (ii) Holdings, but only with respect to the Corporate Taxpayer’s and any other Consolidated
Group members’ proportionate share of the Taxes imposed on Holdings. If all or a portion of the
actual liability for such Taxes for the Taxable Year arises as a result of an audit by a Taxing
Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax
Benefit unless and until there has been a Determination.



          “Realized Tax Detriment” in respect of a TRA Party means, for a Taxable Year, the
excess, if any, of the actual liability for Taxes of, without duplication, (i) any Consolidated



6









 




Group and the Corporate Taxpayer and (ii) Holdings, but only with respect to the Corporate
Taxpayer’s and any other Consolidated Group members’ proportionate share of the Taxes imposed on
Holdings, over the Hypothetical Tax Liability in respect of such TRA Party for such Taxable Year.
If all or a portion of the actual liability for such Taxes for the Taxable Year arises as a result
of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in
determining the Realized Tax Detriment unless and until there has been a Determination.




          “Reconciliation Dispute” has the meaning set forth in Section 7.9 of this Agreement.



          “Reconciliation Procedures” has the meaning set forth in Section 2.3(a) of this
Agreement.



          “Schedule” means any of the following: (i) an Exchange Basis Schedule, (ii) a Tax
Benefit Schedule, or (iii) the Early Termination Schedule.



          “Senior Obligations” is defined in Section 5.1 of this Agreement.



          “Subsidiaries” means, with respect to any Person, as of any date of determination, any
other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than
50% of the voting power or other similar interests or the sole general partner interest or managing
member or similar interest of such Person.



          “Tax Benefit Payment” is defined in Section 3.1(b) of this Agreement.



          “Tax Benefit Schedule” is defined in Section 2.2 of this Agreement.



          “Tax Return” means any return, declaration, report or similar statement required to be
filed with respect to Taxes (including any attached schedules), including, without limitation, any
information return, claim for refund, amended return and declaration of estimated Tax.



          “Taxable Year” means a taxable year of the Corporate Taxpayer as defined in Section
441(b) of the Code or comparable section of state or local tax law, as applicable (and, therefore,
for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is
made), ending on or after the IPO Date.



          “Taxes” means any and all United States federal, state, local and foreign taxes,
assessments or similar charges that are based on or measured with respect to net income or profits,
and any interest related to such Tax.



          “Taxing Authority” shall mean any domestic, federal, national, state, county or
municipal or other local government, any subdivision, agency, commission or authority thereof, or
any quasi-governmental body exercising any taxing authority or any other authority exercising Tax
regulatory authority.



7









 





          “Treasury Regulations” means the final, temporary and proposed regulations under the
Code promulgated from time to time (including corresponding provisions and succeeding provisions)
as in effect for the relevant taxable period.



          “Units” is defined in the Recitals of this Agreement.



          “Valuation Assumptions” in respect of a TRA Party shall mean, as of an Early
Termination Date, the assumptions that: (1) in each Taxable Year ending on or after such Early
Termination Date, each Consolidated Group and the Corporate Taxpayer will have taxable income
sufficient to fully utilize the deductions arising from the Exchange Basis Adjustments and the
Imputed Interest in respect of such TRA Party during such Taxable Year or future Taxable Years
(including, as applicable and for the avoidance of doubt, Exchange Basis Adjustments and Imputed
Interest that would result from future Tax Benefit Payments that would be paid in accordance with
the Valuation Assumptions) in which such deductions would become available; (2) the United States
federal income tax rates and state and local income tax rates that will be in effect for each such
Taxable Year will be those specified for each such Taxable Year by the Code and other law as in
effect on the Early Termination Date; (3) any loss carryovers generated by any Exchange Basis
Adjustments or Imputed Interest in respect of such TRA Party and available as of the date of the
Early Termination Schedule will be utilized by the Corporate Taxpayer on a pro rata basis from the
date of the Early Termination Schedule through the scheduled expiration date of such loss
carryovers; (4) any non-amortizable assets will be disposed of (A) with respect to short-term
investments, after 12 months and (B) with respect to all other non-amortizable assets, on the
fifteenth anniversary of the relevant Exchange Basis Adjustment, provided, that in the
event of a Change of Control, such non-amortizable assets shall be deemed disposed of at the
earlier of (i) the time of sale of the relevant asset or (ii) as generally provided in this
Valuation Assumption (4); and (5) if, at the Early Termination Date, there are Units held by such
TRA Party that have not been Exchanged, then each such Unit shall be deemed to be Exchanged for the
Market Value of the Class A Shares and the amount of cash that would be transferred if the Exchange
occurred on the Early Termination Date.



ARTICLE II




DETERMINATION OF CERTAIN REALIZED TAX BENEFIT



          Section 2.1 Exchange Basis Adjustments. Within 120 calendar days after the filing of
the United States federal income tax return of the Corporate Taxpayer or the United States federal
Consolidated Group, as the case may be, for each Taxable Year in which any Exchange has been
effected by any TRA Party, the Corporate Taxpayer shall deliver to the TRA Party a schedule (the
“Exchange Basis Schedule”) that shows, in reasonable detail necessary to perform the
calculations required by this Agreement (i) the Non-Stepped Up Tax Basis in respect of such TRA
Party of the Exchange Reference Assets in respect of such TRA Party as of each applicable Exchange
Date, (ii) the Exchange Basis Adjustment in respect of such TRA Party with respect to the Exchange
Reference Assets in respect of such TRA Party as a result of the Exchanges effected in such Taxable
Year by such TRA Party, calculated in the aggregate, (iii) the period (or periods) over which the
Exchange Reference Assets in respect of such TRA Party



8









 




are amortizable and/or depreciable and (iv)
the period (or periods) over which each Exchange Basis Adjustment in respect of such TRA Party is
amortizable and/or depreciable.




          Section 2.2 Tax Benefit Schedule.



          (a) Tax Benefit Schedule. In respect of each TRA Party, within 120 calendar days
after the filing of the United States federal income tax return of the Corporate Taxpayer or the
United States federal Consolidated Group, as the case may be, for any Taxable Year in which there
is a Realized Tax Benefit or Realized Tax Detriment in respect of such TRA Party, the Corporate
Taxpayer shall provide to such TRA Party a schedule showing, in reasonable detail the calculation
of the Realized Tax Benefit or Realized Tax Detriment in respect of such TRA Party for such Taxable
Year (a “Tax Benefit Schedule”). Each Tax Benefit Schedule will become final as provided
in Section 2.3(a) and may be amended as provided in Section 2.3(b) (subject to the procedures set
forth in Section 2.3(b)).



          (b) Applicable Principles. Subject to Section 3.3(a), the Realized Tax Benefit or
Realized Tax Detriment in respect of each TRA Party for each Taxable Year is intended to measure
the decrease or increase in the actual liability for Taxes of, without duplication, each of the
Consolidated Group and the Corporate Taxpayer, as the case may be, for such Taxable Year
attributable to the Exchange Basis Adjustments and Imputed Interest, as applicable, determined
using a “with and without” methodology. For the avoidance of doubt, the actual liability for Taxes
will take into account the deduction of the portion of the Tax Benefit Payment that must be
accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as
additional consideration payable by the Corporate Taxpayer for the Units acquired in an Exchange or
for the Units or other assets acquired in connection with the IPO Transactions, as the case may be.
Carryovers or carrybacks of any Tax item attributable to the Exchange Basis Adjustments and
Imputed Interest, as applicable, shall be considered to be subject to the rules of the Code and the
Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax
law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the
relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable
to the Exchange Basis Adjustments or Imputed Interest, as applicable, and another portion that is
not, such portions shall be considered to be used in accordance with the “with and without”
methodology. The parties agree that (i) all Tax Benefit Payments in respect of a TRA Party
attributable to the Exchange Basis Adjustments in respect of such TRA Party (other than amounts
accounted for as interest under the Code) will (A) be treated as subsequent upward purchase price
adjustments and (B) have the effect of creating additional Exchange Basis Adjustments in respect of
such TRA Party to Exchange Reference Assets in respect of such TRA Party in the year of payment,
and (ii) as a result, such additional Exchange Basis Adjustments in respect of such TRA Party will
be incorporated into the current year calculation and into future year calculations, as
appropriate.



          Section 2.3 Procedures, Amendments.



          (a) Procedure. Every time the Corporate Taxpayer delivers to a TRA Party an
applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to
Section 2.3(b), but excluding any Early Termination Schedule or amended Early Termination Schedule,
the Corporate Taxpayer shall also (i) deliver to such TRA Party schedules



9









 




and work papers, as
determined by the Corporate Taxpayer or requested by such TRA Party, providing reasonable detail
regarding the preparation of the Schedule and (ii) allow such TRA Party reasonable access at no
cost to the appropriate representatives at the Corporate Taxpayer, as determined by the Corporate
Taxpayer or requested by such TRA Party, in connection with a review of such Schedule. Without
limiting the application of the preceding sentence, each time the Corporate Taxpayer delivers to a
TRA Party a Tax Benefit Schedule, in addition to the Tax Benefit Schedule duly completed, the
Corporate Taxpayer shall deliver to such TRA Party the Corporate Taxpayer Return, the reasonably
detailed calculation by the Corporate Taxpayer of the applicable Hypothetical Tax Liability in
respect of such TRA Party, the reasonably detailed calculation by the Corporate Taxpayer of the
actual Tax liability, as well as any other work papers as determined by the Corporate Taxpayer or
requested by such TRA Party. An applicable Schedule or amendment thereto shall become final and
binding on all parties 30 calendar days from the first date on which the TRA Party has received the
applicable Schedule or amendment thereto unless such TRA Party (A) within 30 calendar days after
receiving an applicable Schedule or amendment thereto, provides the Corporate Taxpayer with notice
of a material objection to such Schedule (“Objection Notice”) made in good faith or (B)
provides a written waiver of such right of any Objection Notice within the period described in
clause (A) above, in which case such Schedule or amendment thereto becomes binding on the date the
waiver is received by the Corporate Taxpayer. If the Corporate Taxpayer and any objecting TRA
Party, for any reason, are unable to successfully resolve the issues raised in the Objection Notice
within 30 calendar days after receipt by the Corporate Taxpayer of an Objection Notice, the
Corporate Taxpayer and such TRA Party shall employ the reconciliation procedures as described in
Section 7.9 of this Agreement (the “Reconciliation Procedures”).




          (b) Amended Schedule. In respect of each TRA Party, the applicable Schedule for any
Taxable Year may be amended from time to time by the Corporate Taxpayer (i) in connection with a
Determination affecting such Schedule, (ii) to correct inaccuracies in the Schedule identified as a
result of the receipt of additional factual information relating to a Taxable Year after the date
the Schedule was provided to such TRA Party, (iii) to comply with the Expert’s determination under
the Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax
Detriment in respect of such TRA Party for such Taxable Year attributable to a carryback or
carryforward of a loss or other tax item to such Taxable Year, (v) to reflect a change in the
Realized Tax Benefit or Realized Tax Detriment in respect of such TRA Party for such Taxable Year
attributable to an amended Tax Return filed for such Taxable Year, or (vi) to adjust an applicable
Exchange Basis Schedule to take into account payments made pursuant to this Agreement (any such
Schedule, an “Amended Schedule”).



ARTICLE III




TAX BENEFIT PAYMENTS



          Section 3.1 Payments.



          (a) Payments. In respect of each TRA Party, within five (5) calendar days after a Tax
Benefit Schedule delivered to such TRA Party becomes final in accordance with Section 2.3(a), the
Corporate Taxpayer shall pay to such TRA Party for such Taxable Year the Tax Benefit Payment in
respect of such TRA Party determined pursuant to Section 3.1(b). Each



10









 




such Tax Benefit Payment
shall be made by wire transfer of immediately available funds to the bank account previously
designated by such TRA Party to the Corporate Taxpayer or as otherwise agreed by the Corporate
Taxpayer and such TRA Party. For the avoidance of doubt, no Tax Benefit Payment shall be made in
respect of estimated tax payments, including, without limitation, federal estimated income tax
payments. Notwithstanding anything herein to the contrary, in no event shall the aggregate Tax
Benefit Payments (other than amounts accounted for as interest under the Code) in respect of any
Exchange exceed 50% of the purchase price for the Units exchanged.




          (b) A “Tax Benefit Payment” in respect of a TRA Party means an amount, not less than
zero, equal to the sum of the Net Tax Benefit attributable to such TRA Party and the Interest
Amount. For the avoidance of doubt, for Tax purposes, the Interest Amount shall not be treated as
interest but instead shall be treated as additional consideration for the acquisition of Units or
other assets in Exchanges unless otherwise required by law. Subject to Section 3.3(a), the
“Net Tax Benefit” attributable to a TRA Party for a Taxable Year shall be an amount equal
to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit in respect of such TRA
Party as of the end of such Taxable Year over the total amount of payments previously made under
this Section 3.1 in respect of such TRA Party (excluding payments attributable to Interest
Amounts); provided, for the avoidance of doubt, that no such recipient shall be required to
return any portion of any previously made Tax Benefit Payment. The “Interest Amount” shall
equal the interest on the Net Tax Benefit calculated at the Agreed Rate from the due date (without
extensions) for filing the Corporate Taxpayer Return with respect to Taxes for such Taxable Year
until the Payment Date. Notwithstanding the foregoing, for each Taxable Year ending on or after
the date of a Change of Control, all Tax Benefit Payments in respect of a TRA Party (whether paid
with respect to Units that were Exchanged (i) prior to the date of such Change of Control or (ii)
on or after the date of such Change of Control) shall be calculated by utilizing Valuation
Assumptions (1), (3), and (4) in respect of such TRA Party, substituting in each case the terms
“the closing date of a Change of Control” for an “Early Termination Date.”



          Section 3.2 No Duplicative Payments. It is intended that the provisions of this
Agreement will not result in duplicative payment of any amount (including interest) required under
this Agreement. The provisions of this Agreement shall be construed in the appropriate manner to
ensure such intentions are realized.



          Section 3.3 Pro Rata Payments; Coordination of Benefits.



          (a) Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate
tax benefit of the Corporate Taxpayer or any Consolidated Group’s deduction with respect to the
Exchange Basis Adjustments or Imputed Interest in respect of all TRA Parties under this Agreement
is limited in a particular Taxable Year because the Corporate Taxpayer or applicable Consolidated
Group does not have sufficient taxable income, the limitation on the tax benefit for the Corporate
Taxpayer or the applicable Consolidated Group shall be allocated among the TRA Parties in
proportion to the respective amounts of Realized Tax Benefits that would have been determined under
this Agreement in respect of each TRA Party if the Corporate Taxpayer or applicable Consolidated
Group had sufficient taxable income so that there were no such limitation.



11









 





          (b) If for any reason the Corporate Taxpayer does not fully satisfy its payment obligations to
make all Tax Benefit Payments due under this Agreement in respect of a particular Taxable Year,
then the Corporate Taxpayer and the TRA Parties agree that (i) the Corporate Taxpayer shall pay the
same proportion of each Tax Benefit Payment due under this Agreement in respect of such Taxable
Year, without favoring one obligation over the other, and (ii) no Tax Benefit Payment shall be made
in respect of any Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years
have been made in full.



ARTICLE IV




TERMINATION



          Section 4.1 Early Termination and Breach of Agreement.



          (a) The Corporate Taxpayer may terminate this Agreement with respect to all amounts payable to
the TRA Parties and with respect to all of the Units held by TRA Parties at any time by paying to
each TRA Party the Early Termination Payment in respect of such TRA Party; provided,
however, that this Agreement shall only terminate upon the receipt of the Early Termination
Payment by the TRA Parties, and provided, further, that the Corporate Taxpayer may
withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time
at which any Early Termination Payment has been paid. Upon payment of the Early Termination
Payments by the Corporate Taxpayer, none of the TRA Parties or the Corporate Taxpayer shall have
any further payment obligations under this Agreement, other than for any (i) Tax Benefit Payment
agreed to by the Corporate Taxpayer, on the one hand, and the TRA Party, on the other, as due and
payable but unpaid as of the Early Termination Notice and (ii) Tax Benefit Payment due for the
Taxable Year ending with or including the date of the Early Termination Notice (except to the
extent that the amount described in clause (ii) is included in the Early Termination Payment). If
an Exchange occurs after the Corporate Taxpayer exercises its termination rights under this Section
4.1(a), the Corporate Taxpayer shall have no obligations under this Agreement with respect to such
Exchange.



          (b) In the event that the Corporate Taxpayer breaches any of its material obligations under
this Agreement, whether as a result of failure to make any payment when due, failure to honor any
other material obligation required hereunder or by operation of law as a result of the rejection of
this Agreement in a case commenced under the Bankruptcy Code or otherwise, then all obligations
hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination
Notice had been delivered on the date of such breach and shall include, but not be limited to, (i)
Early Termination Payments calculated as if an Early Termination Notice had been delivered on the
date of a breach, (ii) any Tax Benefit Payment in respect of a TRA Party agreed to by the Corporate
Taxpayer and such TRA Party as due and payable but unpaid as of the date of a breach, and (iii) any
Tax Benefit Payment in respect of any TRA Party due for the Taxable Year ending with or including
the date of a breach. Notwithstanding the foregoing, in the event that the Corporate Taxpayer
breaches this Agreement, each TRA Party shall be entitled to elect to receive the amounts set forth
in clauses (i), (ii) and (iii) above or to seek specific performance of the terms hereof. The
parties agree that the failure to make any payment due pursuant to this Agreement within three
months of the date such payment is due shall be deemed to be a breach of a material obligation
under this



12









 




Agreement for all purposes of this Agreement, and that it will not be considered to be a
breach of a material obligation under this Agreement to make a payment due pursuant to this
Agreement within three months of the date such payment is due.




          Section 4.2 Early Termination Notice. If the Corporate Taxpayer chooses to exercise
its right of early termination under Section 4.1 above, the Corporate Taxpayer shall deliver to
each TRA Party notice of such intention to exercise such right (“Early Termination Notice”)
and a schedule (the “Early Termination Schedule”) showing in reasonable detail the
calculation of the Early Termination Payment(s) due such TRA Party. Each Early Termination Schedule
shall become final and binding on all parties 30 calendar days from the first date on which the TRA
Party has received such Schedule or amendment thereto unless the TRA Party (i) within 30 calendar
days after receiving the Early Termination Schedule, provides the Corporate Taxpayer with notice of
a material objection to such Schedule made in good faith (“Material Objection Notice”) or
(ii) provides a written waiver of such right of a Material Objection Notice within the period
described in clause (i) above, in which case such Schedule becomes binding on the date the waiver
is received by the Corporate Taxpayer (the “Early Termination Effective Date”). If the
Corporate Taxpayer and the TRA Party are, for any reason, unable to successfully resolve the issues
raised in such notice within 30 calendar days after receipt by the Corporate Taxpayer of the
Material Objection Notice, the Corporate Taxpayer and the objecting TRA Party shall employ the
Reconciliation Procedures. All Early Termination Schedules affected by any changes resulting from
a Material Objection Notice shall be updated and the Early Termination Payment(s) due in respect
thereof shall be recalculated by the Corporate Taxpayer to take into account such changes.



          Section 4.3 Payment upon Early Termination.



          (a) Within three calendar days after an Early Termination Effective Date, the Corporate
Taxpayer shall pay to each TRA Party an amount equal to the Early Termination Payment in respect of
such TRA Party. Such payment shall be made by wire transfer of immediately available funds to a
bank account or accounts designated by the TRA Party or as otherwise agreed by the Corporate
Taxpayer and such TRA Party.



          (b) “Early Termination Payment” in respect of a TRA Party shall equal the present
value, discounted at the Early Termination Rate as of the applicable Early Termination Effective
Date, of all Tax Benefit Payments in respect of such TRA Party that would be required to be paid by
the Corporate Taxpayer beginning from the Early Termination Date and assuming that the Valuation
Assumptions in respect of such TRA Party are applied.



ARTICLE V




SUBORDINATION AND LATE PAYMENTS



          Section 5.1 Subordination. Notwithstanding any other provision of this Agreement to
the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the
Corporate Taxpayer to the TRA Parties under this Agreement shall rank



13









 




subordinate and junior in
right of payment to any principal, interest or other amounts due and payable in respect of any
obligations in respect of indebtedness for borrowed money of the Corporate Taxpayer and its
Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current or future
unsecured obligations of the Corporate Taxpayer that are not Senior Obligations.




          Section 5.2 Late Payments by the Corporate Taxpayer. The amount of all or any
portion of any Tax Benefit Payment or Early Termination Payment not made to the TRA Parties when
due under the terms of this Agreement shall be payable together with any interest thereon, computed
at the Default Rate and commencing from the date on which such Tax Benefit Payment or Early
Termination Payment was due and payable.



ARTICLE VI




NO DISPUTES; CONSISTENCY; COOPERATION



          Section 6.1 Participation in the Corporate Taxpayer’s and Holdings’ Tax Matters.
Except as otherwise provided herein, the Corporate Taxpayer shall have full responsibility for, and
sole discretion over, all Tax matters concerning each Consolidated Group, the Corporate Taxpayer
and Holdings, including without limitation the preparation, filing or amending of any Tax Return
and defending, contesting or settling any issue pertaining to Taxes. Notwithstanding the
foregoing, the Corporate Taxpayer shall notify a TRA Party of, and keep the TRA Party reasonably
informed with respect to, the portion of any audit of any Consolidated Group, the Corporate
Taxpayer or Holdings by a Taxing Authority the outcome of which is reasonably expected to affect
the rights and obligations of such TRA Party under this Agreement, and shall provide to each such
TRA Party reasonable opportunity to provide information and other input to the Corporate Taxpayer,
Holdings and their respective advisors concerning the conduct of any such portion of such audit;
provided, however, that the Corporate Taxpayer and Holdings shall not be required
to take any action that is inconsistent with any provision of the LLC Agreement.



          Section 6.2 Consistency. the Corporate Taxpayer and the TRA Parties agree to report
and cause to be reported for all purposes, including federal, state and local Tax purposes and
financial reporting purposes, all Tax-related items (including, without limitation, the Exchange
Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that specified by the
Corporate Taxpayer in any Schedule required to be provided by or on behalf of the Corporate
Taxpayer under this Agreement unless otherwise required by law.



          Section 6.3 Cooperation. Each of the TRA Parties shall (a) furnish to the Corporate
Taxpayer in a timely manner such information, documents and other materials as the Corporate
Taxpayer may reasonably request for purposes of making any determination or computation necessary
or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit,
examination or controversy with any Taxing Authority, (b) make itself available to the Corporate
Taxpayer and its representatives to provide explanations of documents and materials and such other
information as the Corporate Taxpayer or its representatives may reasonably request in connection
with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection
with any such matter, and the Corporate



14









 




Taxpayer shall reimburse each such TRA Party for any
reasonable third-party costs and expenses incurred pursuant to this Section.




ARTICLE VII




MISCELLANEOUS



          Section 7.1 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed duly given and received (a) on the date of
delivery if delivered personally, or by facsimile upon confirmation of transmission by the sender’s
fax machine if sent on a Business Day (or otherwise on the next Business Day) or (b) on the first
Business Day following the date of dispatch if delivered by a recognized next-day courier service.
All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions
as may be designated in writing by the party to receive such notice:


If to the Corporate Taxpayer, to:


FXCM Inc.

32 Old Slip

New York, New York 10005

Attention: Chief Financial Officer

Facsimile: (212) 897-7662



with
a copy (which shall not constitute notice to the Corporate Taxpayer) to:


Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Joshua Ford Bonnie

Facsimile: (212) 455-2502



If to the TRA Parties, to:



The address and facsimile number set forth in the records of Holdings.



Any party may change its address or fax number by giving the other party written notice of its new
address or fax number in the manner set forth above.




          Section 7.2 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.



15









 





          Section 7.3 Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto and their respective
successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.



          Section 7.4 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to the conflicts of laws
principles thereof that would mandate the application of the laws of another jurisdiction.



          Section 7.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as closely as possible
in an acceptable manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.



          Section 7.6 Successors; Assignment; Amendments; Waivers.



          (a) Each TRA Party may assign any of its rights under this Agreement to any Person in
accordance with applicable law as long as such transferee has executed and delivered, or, in
connection with such transfer, executes and delivers, a joinder to this Agreement, in form and
substance reasonably satisfactory to the Corporate Taxpayer, agreeing to become a TRA Party, as
applicable, for all purposes of this Agreement, except as otherwise provided in such joinder.



          (b) No provision of this Agreement may be amended unless such amendment is approved in writing
by each of the Corporate Taxpayer and by the TRA Parties who would be entitled to receive at least
two-thirds of the Early Termination Payments payable to all TRA Parties hereunder if the Corporate
Taxpayer had exercised its right of early termination on the date of the most recent Exchange prior
to such amendment (excluding, for purposes of this sentence, all payments made to any TRA Party
pursuant to this Agreement since the date of such most recent Exchange); provided, that no such
amendment shall be effective if such amendment will have a disproportionate effect on the payments
certain TRA Parties will or may receive under this Agreement unless two-thirds of such TRA Parties
so disproportionately affected consent in writing to such amendment. No provision of this Agreement
may be waived unless such waiver is in writing and signed by the party against whom the waiver is
to be effective.



          (c) All of the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the parties hereto and their respective successors,
assigns, heirs, executors, administrators and legal representatives. The Corporate Taxpayer shall
require and cause any direct or indirect successor (whether by purchase, merger,



16









 




consolidation or
otherwise) to all or substantially all of the business or assets of the Corporate Taxpayer, by
written agreement, expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporate Taxpayer would be required to perform if no such succession
had taken place.




          Section 7.7 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in construing this
Agreement.



          Section 7.8 Resolution of Disputes.



          (a) Any and all disputes which are not governed by Section 7.9 and which cannot be settled
amicably, including any ancillary claims of any party, arising out of, relating to or in connection
with the validity, negotiation, execution, interpretation, performance or non-performance of this
Agreement (including the validity, scope and enforceability of this arbitration provision) (each a
“Dispute”) shall be finally settled by arbitration conducted by a single arbitrator in New
York in accordance with the then-existing Rules of Arbitration of the International Chamber of
Commerce. If the parties to the Dispute fail to agree on the selection of an arbitrator within ten
(10) days of the receipt of the request for arbitration, the International Chamber of Commerce
shall make the appointment. The arbitrator shall be a lawyer admitted to the practice of law in
the State of New York and shall conduct the proceedings in the English language. Performance under
this Agreement shall continue if reasonably possible during any arbitration proceedings.



          (b) Notwithstanding the provisions of paragraph (a), the Corporate Taxpayer may bring an
action or special proceeding in any court of competent jurisdiction for the purpose of compelling a
party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder,
and/or enforcing an arbitration award and, for the purposes of this paragraph (b), the TRA Party
(i) expressly consents to the application of paragraph (c) of this Section 7.8 to any such action
or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the
provisions of this Agreement would be difficult to calculate and that remedies at law would be
inadequate, and (iii) irrevocably appoints the Corporate Taxpayer as agent of the TRA Party for
service of process in connection with any such action or proceeding and agrees that service of
process upon such agent, who shall promptly advise the TRA Party, as applicable, of any such
service of process, shall be deemed in every respect effective service of process upon the TRA
Party in any such action or proceeding.



          (c) (i) EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW
YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS
OF THIS SECTION 7.8, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED
ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial
proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or
preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties
acknowledge that the fora designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another; and



17









 





               (ii) The parties hereby waive, to the fullest extent permitted by applicable law, any
objection which they now or hereafter may have to personal jurisdiction or to the laying of venue
of any such ancillary suit, action or proceeding brought in any court referred to in the preceding
paragraph of this Section 7.8 and such parties agree not to plead or claim the same.



          Section 7.9 Reconciliation. In the event that the Corporate Taxpayer and a TRA Party
are unable to resolve a disagreement with respect to the matters governed by Sections 2.3, 4.2 and
6.2 within the relevant period designated in this Agreement (“Reconciliation Dispute”), the
Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the
“Expert”) in the particular area of disagreement mutually acceptable to both parties. The
Expert shall be a partner or principal in a nationally recognized accounting or law firm, and
unless the TRA Party agrees otherwise, the Expert shall not, and the firm that employs the Expert
shall not, have any material relationship with the Corporate Taxpayer or the TRA Party or other
actual or potential conflict of interest. If the Corporate Taxpayer and TRA Party are unable to
agree on an Expert within fifteen (15) days of receipt by the respondent(s) of written notice of a
Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce
Centre for Expertise. The Expert shall resolve any matter relating to the Exchange Basis Schedule
or an amendment thereto or the Early Termination Schedule or an amendment thereto within 30
calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment
thereto within 15 calendar days or as soon thereafter as is reasonably practicable, in each case
after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding
sentence, if the matter is not resolved before any payment that is the subject of a disagreement
would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a
disagreement is due, the undisputed amount shall be paid on the date prescribed by this Agreement
and such Tax Return may be filed as prepared by the Corporate Taxpayer, subject to adjustment or
amendment upon resolution. The costs and expenses relating to the engagement of such Expert or
amending any Tax Return shall be borne by the Corporate Taxpayer except as provided in the next
sentence. The Corporate Taxpayer and the TRA Party shall bear their own costs and expenses of such
proceeding, unless (i) the Expert adopts the TRA Party’s position, in which case the Corporate
Taxpayer shall reimburse the TRA Party for any reasonable out-of-pocket costs and expenses in such
proceeding, or (ii) the Expert adopts the Corporate Taxpayer’s position, in which case the TRA
Party shall reimburse the Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in
such proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the
meaning of this Section 7.9 shall be decided by the Expert. The Expert shall finally determine any
Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.9 shall be
binding on the Corporate Taxpayer and the TRA Party and may be entered and enforced in any court
having jurisdiction.



          Section 7.10 Withholding. The Corporate Taxpayer shall be entitled to deduct and
withhold from any payment payable pursuant to this Agreement such amounts as the Corporate Taxpayer
is required to deduct and withhold with respect to the making of such payment under the Code or any
provision of state, local or foreign tax law. To the extent that amounts are so withheld and paid
over to the appropriate Taxing Authority by the Corporate Taxpayer, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the Person in respect of whom
such withholding was made.



18









 





          Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of
Corporate Assets.



          (a) If the Corporate Taxpayer is or becomes a member of an affiliated or consolidated group of
corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the
Code or any corresponding provisions of state or local law, then: (i) the provisions of this
Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments,
Early Termination Payments and other applicable items hereunder shall be computed with reference to
the consolidated taxable income of the group as a whole.



          (b) If any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment
hereunder transfers one or more assets to a corporation (or a Person classified as a corporation
for U.S. income tax purposes) with which such entity does not file a consolidated tax return
pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any
Tax Benefit Payment or Early Termination Payment (e.g., calculating the gross income of the entity
and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having
disposed of such asset in a fully taxable transaction on the date of such contribution. The
consideration deemed to be received by such entity shall be equal to the fair market value of the
contributed asset. For purposes of this Section 7.11, a transfer of a partnership interest shall
be treated as a transfer of the transferring partner’s share of each of the assets and liabilities
of that partnership.



          Section 7.12 Confidentiality.



          (a) Each TRA Party and each of their assignees acknowledge and agree that the information of
the Corporate Taxpayer is confidential and, except in the course of performing any duties as
necessary for the Corporate Taxpayer and its Affiliates, as required by law or legal process or to
enforce the terms of this Agreement, such person shall keep and retain in the strictest confidence
and not disclose to any Person any confidential matters, acquired pursuant to this Agreement, of
the Corporate Taxpayer and its Affiliates and successors, concerning Holdings and its Affiliates
and successors or the Members, learned by the TRA Party heretofore or hereafter. This Section 7.12
shall not apply to (i) any information that has been made publicly available by the Corporate
Taxpayer or any of its Affiliates, becomes public knowledge (except as a result of an act of the
TRA Party in violation of this Agreement) or is generally known to the business community and
(ii) the disclosure of information to the extent necessary for the TRA Party to prepare and file
its Tax Returns, to respond to any inquiries regarding the same from any taxing authority or to
prosecute or defend any action, proceeding or audit by any taxing authority with respect to such
returns. Notwithstanding anything to the contrary herein, each TRA Party and each of their
assignees (and each employee, representative or other agent of the TRA Party or its assignees, as
applicable) may disclose to any and all Persons, without limitation of any kind, the tax treatment
and tax structure of the Corporate Taxpayer, Holdings and their Affiliates, and any of their
transactions, and all materials of any kind (including opinions or other tax analyses) that are
provided to the TRA Party relating to such tax treatment and tax structure.



          (b) If a TRA Party or an assignee thereof commits a breach, or threatens to commit a breach,
of any of the provisions of this Section 7.12, the Corporate Taxpayer shall have the right and
remedy to have the provisions of this Section 7.12 specifically enforced by



19









 




injunctive relief or
otherwise by any court of competent jurisdiction without the need to post any bond or other
security, it being acknowledged and agreed that any such breach or threatened breach shall cause
irreparable injury to the Corporate Taxpayer or any of its Subsidiaries or the TRA Parties and the
accounts and funds managed by the Corporate Taxpayer and that money damages alone shall not provide
an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in
lieu of, any other rights and remedies available at law or in equity.




          Section 7.13 Change in Law. Notwithstanding anything herein to the contrary, if, in
connection with an actual or proposed change in law, a TRA Party reasonably believes that the
existence of this Agreement could cause income (other than income arising from receipt of a payment
under this Agreement) recognized by the TRA Party upon any Exchange to be treated as ordinary
income rather than capital gain (or otherwise taxed at ordinary income rates) for United States
federal income tax purposes or would have other material adverse tax consequences to the TRA Party
(a “Change in Tax Law”), then at the election of the TRA Party, and to the extent specified
by the TRA Party, this Agreement (i) shall cease to have further effect with respect to the TRA
Party, (ii) shall not apply to an Exchange by the TRA Party occurring after a date specified by the
TRA Party, or (iii) shall otherwise be amended (with respect to the TRA Party only) in a manner
determined by the TRA Party provided that such amendment shall not result in an increase in
payments under this Agreement at any time as compared to the amounts and times of payments that
would have been due in the absence of such amendment.



          Section 7.14 LLC Agreement. This Agreement shall be treated as part of the partnership
agreement of Holdings as described in Section 761(c) of the Internal Revenue Code of 1986, as
amended, and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.



          Section 7.15 Independent Nature of TRA Parties’ Rights and Obligations. The
obligations of each TRA Party hereunder are several and not joint with the obligations of any other
TRA Party, and no TRA Party shall be responsible in any way for the performance of the obligations
of any other TRA Party under hereunder. The decision of each TRA Party to enter into to this
Agreement has been made by such TRA Party independently of any other TRA Party. Nothing contained
herein, and no action taken by any TRA Party pursuant hereto, shall be deemed to constitute the TRA
Parties as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the TRA Parties are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated hereby and the Corporate Taxpayer acknowledges
that the TRA Parties are not acting in concert or as a group, and the Corporate Taxpayer will not
assert any such claim, with respect to such obligations or the transactions contemplated hereby.



          Section 7.16 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.



20









 





          IN WITNESS WHEREOF, the Corporate Taxpayer and each TRA Party have duly executed this
Agreement as of the date first written above.



	 	 	 	 	 
	 	FXCM INC.

 	 
	 	By:  	/s/ David S. Sassoon
 	 
	 	 	Name:  	David S. Sassoon 	 
	 	 	Title:  	Secretary and General Counsel 	 
	 
	 	TRA PARTIES



Each TRA Party set forth on Annex A hereto

 	 
	 	By:  	/s/ David S. Sassoon
 	 
	 	 	Name:  	David S. Sassoon 	 
	 	 	Title:  	Attorney-in-fact 	 
	 



[Signature Page — Tax Receivable Agreement]