Document:

Exhibit
10.5

 

 

 

 

 

 

LIMITED LIABILITY COMPANY
AGREEMENT OF

IBG HOLDINGS LLC

 

 

Dated as of May [__],
2007

 

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I    ORGANIZATION

  	
  1

  
	
  Section 1.1.

  	
  Formation

  	
  1

  
	
  Section 1.2.

  	
  Company Name

  	
  1

  
	
  Section 1.3.

  	
  Purpose

  	
  1

  
	
  Section 1.4.

  	
  Principal Place
  of Business

  	
  1

  
	
  Section 1.5.

  	
  Term

  	
  1

  
	
  Section 1.6.

  	
  Filings; Agent
  for Service of Process

  	
  1

  
	
  Section 1.7.

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.    CAPITAL

  	
  6

  
	
  Section 2.1.

  	
  Initial Capital

  	
  6

  
	
  Section 2.2.

  	
  Classes and
  Series of Interests

  	
  6

  
	
  Section 2.3.

  	
  Interests Not
  Certificated

  	
  8

  
	
  Section 2.4.

  	
  Other Matters

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.    ALLOCATIONS

  	
  8

  
	
  Section 3.1.

  	
  Allocations of
  Profits and Losses

  	
  8

  
	
  Section 3.2.

  	
  Allocations of
  Taxable Income or Loss

  	
  8

  
	
  Section 3.3.

  	
  Allocations When
  Interests Change

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.    DISTRIBUTIONS

  	
  9

  
	
  Section 4.1.

  	
  Distributions of
  Net Cash Flow

  	
  9

  
	
  Section 4.2.

  	
  Distributions of
  Tax Benefit Payments

  	
  9

  
	
  Section 4.3.

  	
  Clawback of Tax
  Benefit Distributions

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.    MANAGEMENT

  	
  10

  
	
  Section 5.1.

  	
  Authority of the
  Managing Member

  	
  10

  
	
  Section 5.2.

  	
  Right to Rely
  upon Managing Member

  	
  12

  
	
  Section 5.3.

  	
  Restrictions on
  Authority of Managing Members

  	
  13

  
	
  Section 5.4.

  	
  Duties and
  Obligations of the Managing Member

  	
  13

  
	
  Section 5.5.

  	
  Compensation and
  Expenses

  	
  13

  
	
  Section 5.6.

  	
  Signatures;
  Power of Attorney

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.    RECORDS AND ACCOUNTING

  	
  14

  
	
  Section 6.1.

  	
  Records and
  Accounting

  	
  14

  

 

 

i

 

	
  Section 6.2.

  	
  Tax Information

  	
  14

  
	
  Section 6.3.

  	
  Tax Returns

  	
  14

  
	
  Section 6.4.

  	
  Accounting
  Decisions

  	
  14

  
	
  Section 6.5.

  	
  Tax Elections

  	
  14

  
	
  Section 6.6.

  	
  Fiscal Year

  	
  14

  
	
  Section 6.7.

  	
  Tax Matters

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.    AMENDMENTS; MEETINGS; VOTING

  	
  15

  
	
  Section 7.1.

  	
  Amendment

  	
  15

  
	
  Section 7.2.

  	
  Amendment to
  Certificate of Formation

  	
  15

  
	
  Section 7.3.

  	
  Meetings of
  Members

  	
  15

  
	
  Section 7.4.

  	
  Proxy of Member

  	
  15

  
	
  Section 7.5.

  	
  Consent or
  Voting

  	
  15

  
	
  Section 7.6.

  	
  Conversion of
  Series B Shares into Voting Shares

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.    PROVISIONS RELATING TO MEMBERS

  	
  16

  
	
  Section 8.1.

  	
  Investment
  Representation

  	
  16

  
	
  Section 8.2.

  	
  No Assurance of
  Employment

  	
  16

  
	
  Section 8.3.

  	
  Restrictions on
  Member’s Transfer of an Interest

  	
  16

  
	
  Section 8.4.

  	
  Member’s
  Elective Redemption

  	
  16

  
	
  Section 8.5.

  	
  Company’s
  Optional Redemption of Interests

  	
  17

  
	
  Section 8.6.

  	
  Documentation of
  Transfer of Interests

  	
  18

  
	
  Section 8.7.

  	
  Confidentiality;
  Non-Compete; Other Covenants

  	
  18

  
	
  Section 8.8.

  	
  Termination of
  Employment

  	
  20

  
	
  Section 8.9.

  	
  Modifications of
  Agreement

  	
  20

  
	
  Section 8.10.

  	
  Consent to
  Specific Performance and Injunctive Relief

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.    MANAGING MEMBER

  	
  20

  
	
  Section 9.1.

  	
  Appointment of
  Managing Member

  	
  20

  
	
  Section 9.2.

  	
  Permitted
  Transfers

  	
  21

  
	
  Section 9.3.

  	
  Resignation of
  Managing Member

  	
  21

  
	
  Section 9.4.

  	
  Removal of
  Managing Member

  	
  21

  
	
  Section 9.5.

  	
  Successor
  Managing Member

  	
  21

  

 

 

ii

 

 

	
  Section 9.6.

  	
  Rights of Former
  Managing Member

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.    ADMISSION AND WITHDRAWAL OF MEMBERS

  	
  21

  
	
  Section 10.1.

  	
  Admission

  	
  21

  
	
  Section 10.2.

  	
  Withdrawal and
  Dissociation

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI.    MERGER,
  CONSOLIDATION OR SALE; DISSOLUTION AND LIQUIDATION

  	
  22

  
	
  Section 11.1.

  	
  Merger,
  Consolidation or Sale

  	
  22

  
	
  Section 11.2.

  	
  Dissolution

  	
  22

  
	
  Section 11.3.

  	
  Winding Up of
  Affairs

  	
  22

  
	
  Section 11.4.

  	
  Liquidating
  Distributions

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII.    POWER OF ATTORNEY

  	
  23

  
	
  Section 12.1.

  	
  Managing Member
  as Attorney-In-Fact

  	
  23

  
	
  Section 12.2.

  	
  Nature as
  Special Power

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII.    MISCELLANEOUS

  	
  24

  
	
  Section 13.1.

  	
  Notices

  	
  24

  
	
  Section 13.2.

  	
  Binding Effect

  	
  24

  
	
  Section 13.3.

  	
  Incorporation by
  Reference

  	
  24

  
	
  Section 13.4.

  	
  Sole and
  Absolute Discretion

  	
  24

  
	
  Section 13.5.

  	
  Independent
  Activities

  	
  25

  
	
  Section 13.6.

  	
  Non-Arbitrability

  	
  25

  
	
  Section 13.7.

  	
  Further Action

  	
  25

  
	
  Section 13.8.

  	
  No Other
  Beneficiaries

  	
  25

  
	
  Section 13.9.

  	
  Governing Law

  	
  25

  
	
  Section 13.10.

  	
  Waiver of Action
  for Partition

  	
  25

  
	
  Section 13.11.

  	
  Construction

  	
  25

  
	
  Section 13.12.

  	
  Headings

  	
  25

  
	
  Section 13.13.

  	
  Severability

  	
  25

  
	
  Section 13.14.

  	
  Variation of
  Pronouns

  	
  25

  
	
  Section 13.15.

  	
  Counterpart
  Execution

  	
  26

  

 

 

iii

LIMITED LIABILITY COMPANY
AGREEMENT OF IBG HOLDINGS LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT OF IBG
HOLDINGS LLC is entered into and shall be effective as of the commencement of
business on the __ day of May, 2007, by and among the individuals and entities
executing this Agreement, pursuant to the provisions of the Delaware Limited
Liability Company Act, on the terms and conditions set forth hereinafter.

WHEREAS, the initial Members are former members of IBG
LLC, a Connecticut limited liability company (formerly known as Interactive
Brokers Group LLC) who have transferred their interests in IBG LLC to the
Company in anticipation of a sale of a portion of such interests by the Company
to Interactive Brokers Group, Inc., a Delaware corporation (“IBGI”), all as
integral steps in the reorganization of the ownership of IBG LLC incident to
the initial public offering of Class A common stock, par value $0.01 per share,
of IBGI; and

NOW, THEREFORE, the undersigned, as the holders of all
of the Interests in the Company, do hereby join in this Agreement with respect
to the ownership, management, operation and governance of the internal affairs
of the Company as follows:

ARTICLE I.

ORGANIZATION

Section 1.1.            Formation.  The parties hereto have formed a limited
liability company pursuant to the provisions of the Delaware Limited Liability
Company Act and upon the terms and conditions set forth in this Agreement.

Section 1.2.            Company Name.  The name of the Company shall be IBG Holdings
LLC, and all business of the Company shall be conducted in such name.

Section 1.3.            Purpose.  The purpose of the Company is any lawful act
or activity for which limited liability companies may be formed under the Act.

Section 1.4.            Principal Place of Business.  The principal place of business of the
Company shall be  at such place as the
Managing Member may designate.

Section 1.5.            Term.  The term of the Company shall commence upon
the effective date of formation of the Company as provided in the Act and shall
continue until the winding up and liquidation of the Company, and the
completion of its business following a dissolution event, as provided in
Article XII hereof.

Section 1.6.            Filings; Agent for Service of
Process.

(a)           On behalf of the Members, the
Managing Member has caused to be filed and recorded an appropriate Certificate
of Formation of the Company.  The
Managing Member 

 

 

1

 

shall further cause to be executed, filed and recorded
and shall cause to be published, if required by law, such other certificates or
other instruments as may be necessary or desirable under the laws of any state
in which the Company does business.

(b)           The address to which the Secretary of
State shall send service of process is c/o Corporation Service Company, 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808.  The Company may, upon compliance with the
applicable provisions of the Act, change its registered office or registered
agent from time to time in the discretion of the Managing Member.

(c)           Upon the dissolution of the Company
and following the wind-up and liquidation of the Company, the Managing Member
shall promptly execute and cause to be filed a Certificate of Cancellation in
accordance with the Act and the laws of any other states or jurisdictions in
which the Company may have filed its Certificate of Formation or other
certificates of qualification or existence.

Section 1.7.            Definitions.  Capitalized words and phrases used in this
Agreement have the following meanings:

“Act” means the
Delaware Limited Liability Company Act, as amended from time to time (or any
corresponding provisions of succeeding law).

“Affiliate”
means, with respect to the Company, any person or entity directly or indirectly
controlling, controlled by or under common control with the Company, or a
successor to the business of the Company (by way of purchase of assets, or
otherwise).  For purposes of this
definition, “control” means the direct or indirect ownership of at least fifty
percent (50%) of all outstanding Voting Shares or at least fifty percent (50%)
of the fair market value of all Interests.

“Agreement”
means this Limited Liability Company Agreement of IBG Holdings LLC, as amended
from time to time.  Words such as “herein,”
“hereinafter,” “hereof,” “hereto,” and “hereunder” refer to this Agreement as a
whole, unless the context otherwise requires.

“Base Rate”
means the prime rate as published in the Wall Street Journal on the date the
relevant obligation arises.

“Capital Contribution”
means, with respect to any Member, the amount of money and the initial Gross
Asset Value of any property (other than money) contributed to the Company with
respect to the Interest in the Company held by such Member pursuant to the
terms of this Agreement.

“Code” means the
Internal Revenue Code of 1986, as amended from time to time (or any
corresponding provisions of succeeding law).

“Common Shares”
means the units representing a class of Interests in the Company, exclusive of
the Tax Benefit Shares but including the Series A Shares, the Series B Shares
and the Series C Shares, having the rights specified in Section 2.2 and by
reference to which allocations of Profits and Losses (exclusive of Profits and
Losses derived from Tax Benefit Payments) and distributions of Net Cash Flow
are made.

 

2

“Company” means
IBG Holdings LLC, the limited liability company formed pursuant to this
Agreement.

“Depreciation”
means, for each fiscal year or other period, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Managing Member.

“Exchange Agreement”
means that certain Exchange Agreement, dated as of May [__], 2007, by and among
IBGI, the Company, IBG LLC and the initial Members, pursuant to which, among
other things provided therein, (i) the Members contribute their interests in
IBG LLC to the Company in exchange for Interests, (ii) the Company will sell,
and IBGI will purchase, a portion of the Company’s interests in IBG LLC, (iii)
the Members are granted certain rights to have their Interests redeemed by the
Company; (iv) the Company is granted certain rights to redeem the Interests of
the Members; and (v) IBGI agrees to undertake public offerings of IBGI Common
Stock and to purchase interests in IBG LLC from the Company from time to time
as specified therein.

“Fair Market Value”
shall be determined as follows:

(i)            Fair Market Value of a Common Share
of the Company, and of any IBG LLC interest held by the Company means, as of
the date of determination, the closing price per share of Common Stock on the
primary national securities exchange on which the Common Stock is traded, as
reported by Bloomberg L.P. or, if Bloomberg L.P. is not available, as
determined by another reputable third-party information source selected by
IBGI; and

(ii)           Fair Market Value of any other assets
(other than cash, which shall be the face amount thereof) shall be determined
by an independent appraiser selected by the Managing Member (or, in the context
of the winding up of the Company, such other Person as may be charged with
winding up the Company), with the approval of the holders of a majority of the
Voting Shares.

“General Redemption Date”
means any of the first and each subsequent anniversary date of the date of the
initial public offering of IBGI Common Stock, being May [__], 2007.

“Gross Asset Value”
means, with respect to any asset, the asset’s adjusted basis for federal income
tax purposes, except as follows:

(iii)          The initial Gross Asset Value of any
asset contributed by a Member to the Company shall be the gross fair market
value of such asset, as determined by the Company;

 

3

(iv)          The Gross Asset Values of all Company
assets shall be adjusted to equal their respective gross fair market values, as
determined by the Managing Member, as of the following times: (a) the issuance
of an additional Interest in the Company to any new or existing Member; (b) the
redemption of an Interest in the Company; (c) the liquidation of the Company
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (d) any
other circumstance when the Managing Member, in its discretion, determines that
a revaluation of the Property of the Company is necessary to properly reflect
the economic relationship of the Members to one another and the Company;

(v)           The Gross Asset Value of any Company
asset distributed or deemed distributed to any Member shall be the gross fair
market value of such asset on the date of distribution, which in the case of a
share of IBG LLC transferred to IBGI on behalf of a Member pursuant to the
Exchange Agreement shall equal the Fair Market Value of a share of IBGI Common
Stock; and

(vi)          The Gross Asset Values of Company
assets shall be increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into account
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the
extent the Managing Member determines that an adjustment pursuant to clause
(ii) above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this clause (iv).

If the Gross Asset Value of an asset has been
determined or adjusted pursuant to clause (i), clause (ii) or clause (iv) of
this definition, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses.

“IBGI” is
defined in the preamble to this Agreement.

“IBGI Common Stock”
means the Class A common stock , par value $0.01 per share, of IBGI.

“IBG LLC” means
the Connecticut limited liability company, formerly known as Interactive
Brokers Group LLC, referred to in the preamble to this Agreement.

“Interest” means
any ownership interest in the Company by a Member, including any and all
benefits to which the holder of such an Interest may be entitled as provided in
this Agreement, together with all obligations of such Member to comply with the
terms and provisions of this Agreement. 
The Members’ Interests in the Company are divided into units and
classified as either Common Shares or Tax Benefit Shares.

“Liquidator”
means the Managing Member or its successor or, if none, such other Person selected
by a vote of the Members to conduct the winding-up of the Company and
distribution of its assets following dissolution of the Company.

 

4

“Managing Member”
means any Member who has become a Managing Member in accordance with the terms
of this Agreement and who has not ceased to be a Managing Member pursuant
hereto.  “Managing Members” means all
such Members.

“Member” means
any Member (i) whose name is set forth as such on Schedule A attached hereto, or
who has become a Member pursuant to the terms of this Agreement, and (ii) who
has not ceased to be a Member.  “Members”
means all such Members.

“Net Cash Flow”
means the gross cash receipts of the Company received from IBG LLC and from any
other source, exclusive, however, of Tax Benefit Payments received from IBGI,
less the portion thereof used to pay Company expenses or establish reserves,
all as reasonably determined by the Managing Member.  Net Cash Flow shall not be reduced by
depreciation, amortization, cost recovery deductions or similar allowances, but
shall be increased by any reductions of reserves previously established.

“Person” means
any individual, partnership, corporation, trust, or other entity.

“Profits” and “Losses” means, for each fiscal year or other period, an
amount equal to the Company’s taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant
to Code Section 703(a)(1) shall be included in taxable income or loss), with
the following adjustments:

(i)            Any income of the Company that is
exempt from federal income tax and not otherwise taken into account in
computing Profits or Losses shall be added to such taxable income or loss;

(ii)           Any expenditures of the Company
described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses, shall be
subtracted from such taxable income or loss;

(iii)          In the event the Gross Asset Value of
any Company asset is adjusted, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses;

(iv)          Gain or loss resulting from any
disposition of Property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value; and

(v)           In lieu of the depreciation,
amortization, and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into account
Depreciation for such fiscal year or other period.

“Property” means
all real and personal property acquired by the Company and any improvements
thereto, and shall include both tangible and intangible property.

 

5

“Redemption Notice”
is defined in Section 8.5.

“Redemption Request”
is defined in Section 8.4.

“Regulations”
means the Income Tax Regulations promulgated under the Code, as such
Regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

“Series A Shares,”
“Series B Shares,” and “Series C Shares,” in each case means the units representing
Common Shares of the Company having the rights specified in Section 2.2.

“Tax Benefit Payments”
means payments received by the Company from IBGI pursuant to the Tax Receivable
Agreement.

“Tax Benefit Shares”
means the units representing a class of Interests in the Company that is
entitled to participate in allocations of Profits attributable to Tax Benefit
Payments and distributions of the proceeds thereof.

“Tax Receivable Agreement”
means that certain agreement dated May [__], 2007, by and between IBGI and the
Company providing for, among other things, the payment of amounts equal to 85%
of tax savings derived by IBGI from adjustments to the basis of the assets of
IBG LLC underlying the interests in IBG LLC acquired by IBGI from the Company.

“Transfer”
means, as a noun, any voluntary or involuntary transfer, sale, pledge,
hypothecation, or other disposition and, as a verb, voluntarily or
involuntarily to transfer, sell, assign, mortgage, give, create a security
interest in or lien on, encumber, place in trust (voting or otherwise), pledge,
hypothecate, or otherwise dispose of.

“Voting Shares”
means Series A Shares and, from and after the time specified in Section 7.6,
Series B Shares.

ARTICLE
II.

CAPITAL

Section 2.1.            Initial Capital.  Each of the Members has contributed to the
Company as his initial Capital Contribution such Member’s interest in IBG
LLC.  The names, addresses, IBG LLC
membership interests contributed to the Company and number, classes and series
of Shares of the Company received in exchange therefor of each of the Members
are as set forth in Schedule A hereto. 
In the event that the number of Shares held by any Member shall change
during the year, the foregoing shall be reflected on an amended or supplemental
Schedule A, to be prepared by the Managing Member.

Section 2.2.            Classes and Series of Interests.  The Interests in the Company shall initially
be divided into two classes:  the Common
Shares and the Tax Benefit Shares.  The
Common Shares shall be further divided into three Series:  the Series A Shares, the Series B Shares and
the Series C Shares.  Finally, the Series
C Shares shall be further divided into Series C 

 

6

Profits Shares and Series C Capital Shares.  The foregoing classes and series of Interests
shall have the following respective and relative rights:

(a)           Series A Shares shall initially be
the only Interests with the right to vote on any matter submitted for a vote,
or requiring the consent or approval, of the Members.  The holders of Series B Shares shall
initially have no voting rights, but Series B Shares may become Voting Shares
as provided in Section 7.6.  The holders
of Series C Shares shall have no voting rights.

(b)           As Common Shares, Series A Shares,
Series B Shares and Series C Shares (which consist of Series C Profits Shares
and Series C Capital Shares) shall represent an interest in both Profits and
capital of the Company, exclusive of Profits and capital attributable to Tax
Benefit Payments, each with equal rights to share therein.

(c)           Each Series C Capital Share shall
represent an interest in capital of the Company determined by reference to the
capital account corresponding to such Series C Capital Share at the date of its
original issuance; and each Series C Profits Share shall represent an interest
in profits of the Company allocated to a Series C Share from and after the date
of issuance of such Series C Profits Share. 
In the event a Series C Profits Share and a Series C Capital Share are
issued in conjunction with one another, on their date of issuance the Series C
Capital Share shall have a capital account balance equal to the capital account
of each outstanding Series A Share and each outstanding Series B Share as of
such date, and the Series C Profits Share shall have no balance in its capital
account at the date of issuance.

(d)           No Capital Contribution will be
required as consideration for the issuance of Series C Profits Shares (other
than future services to IBG LLC or the Company), provided that upon the date
hereof Series C Profits Shares shall be issued in exchange for Members’
contributions of corresponding profits interests in IBG LLC.

(e)           Tax Benefit Shares shall represent an
interest in Profits and capital of the Company attributable to Tax Benefit
Payments.  Tax Benefit Shares shall have
no voting rights.  Tax Benefit Shares
shall be owned by the Members in the same numbers and proportions as the
Members initially own the Series A Shares and Series B Shares; and, subject to
earlier cancellation as set forth in Sections 8.7 and 8.8 hereof, Tax Benefit
Shares of any Member shall expire and be cancelled by the Company when no
remaining Tax Benefit Payments are receivable by the Company.

(f)            Upon the date of this Agreement, the
number of outstanding Common Shares of the Company plus the number of
outstanding shares of IBGI Common Stock shall equal the number of outstanding
shares of IBG LLC.  It is the intent of
the Members that this relationship remain constant throughout the term of the
Company.  If any Series C Shares are
forfeited to the Company pursuant to Sections 8.7 or 8.8 hereof, a
corresponding number of shares of IBG LLC shall be surrendered to IBG LLC for
cancellation.  In addition, in the case
of any redemption of Common Shares by the Company as authorized by Section 8.4
and Section 8.5, it is intended that the redemption purchase price be provided
to the Company through the sale of a corresponding number of IBG LLC shares to
IBGI, which will fund its purchase of such IBG LLC shares through an offering
and sale of IBGI Common Stock, provided that, in the 

 

7

discretion of the Managing Member, IBG LLC may be
allowed to redeem IBG LLC shares held by the Company to fund any such
redemption of Common Shares.  These and
other adjustments to the number of Common Shares outstanding may be made from
time to time as necessary to properly reflect the relative Interests of the
Members.

Section 2.3.            Interests Not Certificated.  Unless otherwise determined by the Managing
Member, the Members’ Interests and the Shares representing the same shall be
documented and recorded solely by an entry on the Company’s books.

Section
2.4.            Other Matters.

(a)           Except as otherwise provided in this
Agreement, no Member shall demand or receive a return of his Capital
Contributions or his entitlements with respect to his Interest, at any time, or
withdraw from the Company without the consent of the Managing Member.

(b)           No Member shall be personally liable
for the debts, liabilities, contracts or any other obligations of the Company
by reason of this Agreement.  Except as
otherwise provided in Section 4.3 of this Agreement, any other agreements among
the Members or applicable state law, no Member shall be required to lend any
funds to the Company or, after his initial Capital Contributions have been
paid, to make any additional contributions to the Company, and no Member shall
have any personal liability for the repayment of any Capital Contributions of
any other Member.

ARTICLE III.

ALLOCATIONS

Section 3.1.            Allocations of Profits and Losses.

(a)           Except as otherwise provided in this
Article III, all Profits and Losses of the Company, and each item thereof,
exclusive of Profits derived from Tax Benefit Payments, shall be allocated
among the Members in accordance with the number of Common Shares held by each,
with the allocations of Profits to be made with respect to the Series C Shares
to be made to the holders of the Series C Profits Shares.

(b)           Profits derived from Tax Benefit
Payments shall be allocated among the holders of Tax Benefit Shares in
accordance with the number of Tax Benefit Shares held by each.  Losses derived from payments in satisfaction
of a Tax Benefit Clawback Obligation shall be allocated among the holders of
Tax Benefit Shares who bear such obligation as provided in Section 4.3.

Section 3.2.            Allocations of Taxable Income or
Loss.

(a)           Items of income, deduction, gain and
loss that are recognized by the Company for federal income tax purposes shall
be allocated among the Members consistent with the allocations of such items
under Sections 3.1 and 3.2.  To the
extent appreciation or depreciation in asset values is reflected in capital
accounts prior to recognition for tax purposes, 

 

 

8

allocations shall be made in accordance with the
principles and provisions of Section 704(c) of the Code.

(b)           All items of federal income tax
credit and items of tax credit recapture shall be allocated among the Members
in accordance with the Members’ interests in the Company as of the time the tax
credit or credit recapture arises, as provided in Regulation Section
1.704-1(b)(4)(ii).

(c)           The Managing Member may, in his
discretion, make a special allocation of net capital gain to a Member whose
Interest in the Company is redeemed during the fiscal year as appropriate to
reduce the amount of the difference, if any, between the purchase price payable
by the Company for such Member’s Interest and the federal income tax basis
thereof, determined as of the effective date of redemption.

Section 3.3.            Allocations When Interests Change.  In the event that the number of Shares held
by any Member shall change during the year, allocations made under this Article
III to each such Member shall be prorated according to the number of Shares
held by each Member for each portion of the year, on a daily, monthly or other
basis, as determined by the Managing Member using any permissible method under
Code Section 706 and the Regulations thereunder.

ARTICLE
IV.

DISTRIBUTIONS

Section
4.1.            Distributions of Net
Cash Flow.

(a)           Net Cash Flow, as determined by the
Managing Member, shall be distributed to the Members at least annually, and at
such other times as the Managing Member may decide, in its sole discretion.

(b)           Each distribution of Net Cash Flow
among the Members shall be made to the holders of the outstanding Series A,
Series B and Series C Shares, as reflected in registry of Common Shares of the
Company on the record date for the distribution, in proportion to the number of
Common Shares held by each Member, with the share distributable with respect to
the Series C Shares to be distributed to the holders of Series C Profits Shares
up to the amount of cumulative net Profits allocated thereto, and thereafter to
the holder of the Series C Capital Shares corresponding thereto.

Section
4.2.            Distributions of Tax
Benefit Payments.

(a)           Tax Benefit Payments received by the
Company shall be distributed by the Company within 90 days following the
receipt thereof.

(b)           Tax Benefit Payments shall be
allocated among and distributed to the holders of Tax Benefit Shares in
accordance with the number of Tax Benefit Shares held by each, subject to the
forfeiture provisions contained in Sections 8.7 and 8.8 hereof.

 

9

Section
4.3.            Clawback of Tax Benefit
Distributions.

(a)           If the Company is obligated under the
Tax Receivable Agreement to pay back to IBGI all or a portion of any Tax
Benefit Payment received by the Company from IBGI (a “Tax Benefit Clawback
Obligation”) and the Company has insufficient funds to pay such amount, the
Managing Member shall call for such additional amount as is necessary to
satisfy such obligations, in which case each Member shall contribute to the
Company, when and as called, such Person’s pro rata share of the amount called
by the Managing Member determined pursuant to Section 4.3(b); provided that, a
Member shall not be obligated to contribute to the Company pursuant to this
Section 4.3(a) an aggregate amount which exceeds the lesser of (i) the
aggregate amount of distributions with respect to Tax Benefit Payments received
by such Member from the Company pursuant to this Agreement, or (ii) such Person’s
pro rata share of the amounts called by the Managing Member as determined
pursuant to Section 4.3(b) hereof.

(b)           Any contribution required to fund a
Tax Benefit Clawback Obligation will be funded by the Members pro rata
according to the respective aggregate amounts of Tax Benefit distributions
received by or on behalf of such Members prior to the date of such
contribution.

(c)           In no event shall the Members be
obligated pursuant to this Section 4.3 to contribute to the Company an
aggregate amount with respect to the Tax Benefit Clawback Obligation in excess
of the aggregate amount the Company is obligated to pay to IBGI pursuant to
Section 3.04 of the Tax Receivable Agreement.

(d)           A Member’s obligation to make
contributions to the Company under this Section 4.3 shall survive the
termination, dissolution, liquidation and winding up of the Company, and for
purposes of this Section 4.3, the Company may pursue and enforce all rights and
remedies it may have against each Member under this Section, including
instituting a lawsuit to collect such contribution with interest from the date
such contribution was required to be paid under this Section calculated at a
rate equal to the Base Rate plus four percentage points per annum, compounded
annually (but not in excess of the highest rate per annum permitted by law).

(e)           The Members acknowledge that they are
severally obligated to fund their respective shares of any Tax Benefit Clawback
Obligation to IBGI, and that IBGI is a third party beneficiary of such several
obligations.

ARTICLE V.

MANAGEMENT

Section 5.1.            Authority of the Managing Member.  The Managing Member shall not permit the
Company to engage in any activity which substantially changes the nature of the
Company’s business as a holding company for interests in IBG LLC or enter in
any material agreement(s) on behalf of the Company, other than the Exchange
Agreement, which would in the aggregate, during any twelve (12) month period,
result in a transfer or commitment to transfer over twenty percent (20%) of the
interests in IBG LLC held by the Company, without the written consent of
holders of a majority of the Voting Shares. 
Subject to the foregoing and the provisions of Section 5.3, the Managing
Member shall manage the business of the Company and 

 

10

shall have all of the rights and powers which may be
possessed by a managing member under the Act including, without limitation, the
right and power to:

(a)           acquire by purchase, lease or
otherwise any real or personal property which may be necessary, convenient, or
incidental to the accomplishment of the purposes of the Company;

(b)           sell or exchange interests of the
Company in IBG LLC to IBGI in exchange for cash or IBGI Common Stock and deal
in any other Company assets whether real property or personal property;

(c)           operate, maintain, finance, improve,
construct, own, grant options with respect to, sell, convey, assign, mortgage
and lease any real estate and any personal property necessary, convenient, or
incidental to the accomplishment of the purposes of the Company;

(d)           execute any and all agreements,
contracts, documents, certifications, and instruments necessary or convenient
in connection with the management, maintenance and operation of Property or in
connection with managing the affairs of the Company, including executing
amendments to the Agreement and the Certificate of Formation in accordance with
the terms of the Agreement pursuant to any power of attorney granted by the
Members to the Managing Member;

(e)           borrow money and issue evidences of
indebtedness necessary, convenient or incidental to the accomplishment of the
purposes of the Company, and secure the same by mortgage, pledge, or other lien
on any Property;

(f)            execute, in furtherance of any or
all of the purposes of the Company, any deed, lease, mortgage, deed of trust,
mortgage note, promissory note, bill of sale, contract or other instrument
purporting to convey or encumber any or all of the Property;

(g)           prepay in whole or in part,
refinance, recast, increase, modify or extend any liabilities affecting the
Property and in connection therewith execute any extensions or renewals of
encumbrances on any or all of the Property;

(h)           care for and distribute funds to the
Members by way of cash, income, return of capital or otherwise, all in
accordance with the provisions of this Agreement, and perform all matters in
furtherance of the objectives of the Company or this Agreement;

(i)            appoint officers and agents of the
Company and delegate to such Persons authority granted to the Managing Member
hereunder;

(j)            contract on behalf of the Company
for the employment and services of employees and/or independent contractors,
such as lawyers, accountants, and Members, and delegate to such Persons the
duty to manage or supervise any of the assets or operations of the Company, and
enter into agreements with respect to their activities on behalf of the Company;

(k)           engage in any kind of activity and
perform and carry out contracts of any kind (including contracts of insurance
covering risks to Property and Managing Member’s 

 

11

liability) necessary or incidental to, or in
connection with, the accomplishment of the purposes of the Company, as may be
lawfully carried on or performed by a limited liability company under the laws
of each state in which the Company is then formed or qualified;

(l)            vote securities held by the Company;

(m)          make any and all elections for
federal, state and local tax purposes including, without limitation, any
election, if permitted by applicable law: (i) to adjust the basis of Property
pursuant to Code Sections 754, 734(b), and 743(b), or comparable provisions of
state or local law, in connection with transfers of Interests and Company
distributions (which election shall be made as provided in Section 6.5 of this
Agreement); (ii) to extend the statute of limitations for assessment of tax deficiencies
against the Members with respect to adjustments to the Company’s federal,
state, or local tax returns; and (iii) to represent the Company and the Members
before taxing authorities or courts of competent jurisdiction in tax matters
affecting the Company and the Members in their capacities as Members and to
execute any agreements or other documents relating to or affecting such tax
matters, including agreements or other documents that bind the Members with
respect to such tax matters or otherwise affect the rights of the Company or
the Members;

(n)           take, or refrain from taking, all
actions not expressly proscribed or limited by this Agreement as may be
necessary or appropriate to accomplish the purposes of the Company;

(o)           institute, prosecute, defend, settle,
compromise, and dismiss lawsuits or other judicial or administrative
proceedings brought on or in behalf of, or against, the Company or the Members
in connection with activities arising out of, connected with, or incidental to
this Agreement, and to engage counsel or others in connection therewith; and

(p)           acquire and enter into any contract
of insurance which the Managing Member reasonably deems necessary and proper
for the protection of the Company, for the conservation of any asset of the
Company, or for any purpose beneficial to the Company.

Section 5.2.            Right to Rely upon Managing
Member.  Any Person dealing with the
Company may rely (without duty of further inquiry) upon a certificate signed by
the Managing Member as to:

(a)           the identity of the Managing Member
or any other Member;

(b)           the existence or nonexistence of any
fact or facts which constitute a condition precedent to acts by the Managing
Member or which are in any other manner germane to the affairs of the Company;

(c)           the Members who are authorized to
execute and deliver any instrument or document of the Company; or

(d)           any act or failure to act by the
Company or any other matter whatsoever involving the Company or any Member.

 

12

Section 5.3.            Restrictions on Authority of
Managing Members.  Except with the
written consent of all of the Members, the Managing Member shall not have the
authority to:

(a)           do any act in contravention of this
Agreement; or

(b)           knowingly perform any act that would
subject any Member to personal liability for the obligations of the Company in
any jurisdiction.

Section
5.4.            Duties and Obligations
of the Managing Member.  The Managing
Member shall:

(a)           take all actions which may be
necessary or appropriate (i) for the continuation of the Company’s valid
existence as a limited liability company under the laws of the State of
Delaware (and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Members or to enable the Company to
conduct the business in which it is engaged) and (ii) for the accomplishment of
the Company’s purposes, including the acquisition, development, maintenance,
preservation and operation of Property in accordance with the provisions of
this Agreement and applicable laws and regulations;

(b)           devote to the Company such time as
may be necessary for the proper performance of all duties hereunder in the
discretion of the Managing Member;

(c)           be under a fiduciary duty to conduct
the affairs of the Company in the best interests of the Company and of the
Members, including the safekeeping and use of all of the Property and the use
thereof for the exclusive benefit of the Company;

(d)           use its reasonable efforts to cause
the Company to be formed, reformed, qualified or registered under assumed or
fictitious name statutes or similar laws in any state or country in which the
Company owns property or transacts business if such formation, reformation,
qualification or registration is necessary in order to protect the limited
liability of the Members or to permit the Company lawfully to own property or
transact business; and

(e)           manage and control the affairs of the
Company and in doing so use his reasonable efforts to carry out the purpose of
the Company for the benefit of all of the Members and in exercising his powers,
recognize his fiduciary responsibility to the Company.

Section 5.5.            Compensation and Expenses.

(a)           No Member shall receive any salary,
fee or draw for services rendered to or on behalf of the Company, except as the
Managing Member shall determine.

(b)           The Managing Member may charge the
Company for expenses reasonably incurred in connection with the Company’s
business.

Section 5.6.            Signatures; Power of Attorney.  Subject to the limitations imposed by Section
5.1, the signature of the Managing Member shall be necessary and sufficient to
convey title to any real property owned by the Company or to execute any
promissory notes, trust deeds, mortgages or other instruments of hypothecation.  All of the Members agree that a copy of 

 

13

appropriate provisions of this Agreement may be shown
to the appropriate parties in order to confirm the same, and further agree that
the signature of the Managing Member shall be sufficient to execute any
documents necessary to effectuate this or any other provision of this
Agreement.  All of the Members do hereby
appoint the Managing Member as their attorney-in-fact for the execution of any
or all of the documents described herein.

ARTICLE VI.

RECORDS AND ACCOUNTING

Section 6.1.            Records and Accounting.  Proper and complete records and books of
account of the business of the Company shall be maintained at the Company’s
principal place of business.  All books
and records of the Company shall be kept in accordance with Generally Accepted
Accounting Principles in the United States (U.S. “GAAP”).

Section 6.2.            Tax Information.  Prior to the day on which the Company’s tax
return for such fiscal year is filed, the Managing Member shall cause to be
delivered to each Person who was a Member at any time during such fiscal year
all information necessary for the preparation of such Member’s federal income
tax return, including a statement showing such Member’s distributive share of
the Company’s income, gains, losses, deductions, credits and tax preferences
for the taxable year of the Company ending within or with its taxable year for
federal income tax purposes, and the amount of any distribution made to or for
the account of such Member pursuant to this Agreement; provided, however, that
within ninety (90) days after the end of each fiscal year, the Managing Member
shall cause to be delivered to each such Person an estimate of all such
information.

Section 6.3.            Tax Returns.  The Managing Member shall cause all required
federal and state and local information returns for the Company to be prepared
and timely filed with the appropriate authorities.

Section 6.4.            Accounting Decisions.  All decisions as to accounting principles
used for financial reporting and tax accounting purposes shall be made by the
Managing Member on a basis that is acceptable to the Company’s accountants
notwithstanding any other provisions to the contrary contained in this
Agreement.

Section 6.5.            Tax Elections.  The Managing Member may, from time to time,
make the tax elections it deems necessary, in its sole discretion to carry out
the business of the Company or the purposes of this Agreement; provided that
the Company shall make the election authorized by Section 754 of the Code with
its initial federal income tax return.

Section 6.6.            Fiscal Year.  The fiscal year of the Company shall be the
calendar year.

Section 6.7.            Tax Matters.  The Managing Member shall act for the Company
as “tax matters partner” for purposes of Section 6231(a)(7) of the Code.

 

14

ARTICLE
VII.

AMENDMENTS;
MEETINGS; VOTING

Section 7.1.            Amendment.  Except as otherwise required by law or as
provided elsewhere in this Agreement, this Agreement may be amended in any respect
only with the vote of a two-thirds (2/3) majority of the holders of the Voting
Shares.

Section 7.2.            Amendment to Certificate of
Formation.  In the event this
Agreement shall be amended pursuant to this Article VII, the Managing Member
shall amend the Certificate of Formation to reflect such change if the Managing
Member deems such amendment to be necessary.

Section 7.3.            Meetings of Members.  Meetings for purposes of voting shall be
called by the Managing Member who shall be required to give written notice
thereof to all Members entitled to vote at such meeting no less than ten (10)
days and no more than thirty (30) days prior to the date of such meeting.  Any such notice shall state briefly the
purpose of the meeting, which shall be held at a reasonable time and at the
principal office of the Company or such other location as shall be stated in
the notice.

Section 7.4.            Proxy of Member.  Each Member may authorize any Person or
Persons to act for him by proxy on all matters in which a Member is entitled to
participate, including waiving notice of any meeting or voting or participating
at a meeting.  Every proxy must be signed
by the Member or his attorney-in-fact. 
Every proxy shall be revocable at the pleasure of the Member executing
it.

Section
7.5.            Consent or Voting.

(a)           All voting shall be based on the
aggregate number of Voting Shares outstanding and not the number of holders of
such Shares.

(b)           In the event that the consent or vote
of the holders of Voting Shares shall be required for any action hereunder and
no specific proportion is stated herein, the affirmative vote of holders of
more than fifty percent (50%) of the total Voting Shares outstanding shall be
required for such action.

Section 7.6.            Conversion of Series B Shares
into Voting Shares.  If at any time
Thomas Peterffy, his spouse, descendants, spouses of descendants, siblings,
ancestors and the spouses and descendants of his siblings, or one or more
trusts established for the benefit of any one or more of any of the foregoing,
in the aggregate own directly or through an entity (taking into account only
their proportionate share of the Shares owned by an entity based upon the
equity of any such entity owned by one or more of the foregoing) less than
fifty percent (50%) of the total outstanding Shares of the Company, then at
such time all Series B Shares shall automatically become Voting Shares.

 

15

ARTICLE
VIII.

PROVISIONS
RELATING TO MEMBERS

Section 8.1.            Investment Representation.  Each Member who is an employee of IBG LLC or
one of its Affiliates represents and warrants that (i) his Interest is acquired
for investment and not with a view to the resale or other distribution thereof,
(ii) he understands that none of the Interests have been registered under the
Securities Act of 1933 or any similar legislation in any other country or
jurisdiction, and that there may be no market for his Interest, and (iii) he is
acquiring his Interest without the benefit of any representation, warranty, or
other assurance from any other Member or representative of the Company with
respect to the financial condition or prospects of the Company.

Section 8.2.            No Assurance of Employment.  Each Member who is an employee of IBG LLC or
one of its Affiliates fully understands that nothing herein modifies the terms
of the Member’s employment with IBG LLC or the Company, including IBG LLC’s or
the Company’s right, which such Member hereby confirms, to terminate such
employment at will.

Section 8.3.            Restrictions on Member’s Transfer
of an Interest.

(a)           Except as otherwise provided in this
Section 8.3, in Section 8.4 and in Section 8.5, no Member may Transfer all or
any portion of or any rights or entitlements deriving from any Interest in the
Company at any time or howsoever acquired without (i) the written consent of
the Managing Member, which consent may be denied for any reason whatsoever, and
(ii) the approval of the holders of the Voting Shares.  Upon such consent and approval, any Voting
Shares owned by a Member shall upon Transfer inure to the benefit of the
transferee, who shall subsequently have the right to cast any votes with
respect to such Voting Shares.

(b)           Thomas Peterffy’s Voting Shares,
together with the rights associated therewith, shall inure to the benefit of those
to whom he has made a voluntary Transfer of such Voting Shares without the
necessity of the consent of the Managing Member or any vote or approval of the
holders of Voting Shares.

(c)           Each Member who has been granted
rights pursuant to the Exchange Agreement may exercise such rights in
accordance with its terms.

(d)           The forfeiture of Series C Shares and
Tax Benefit Shares to the Company upon the violation by the holder thereof of
the restrictions described in Sections 8.7 and 8.8 shall not constitute a Transfer
for purposes hereof.

Section
8.4.            Member’s Elective
Redemption.

(a)           Pursuant to the Exchange Agreement,
each Member has been granted the right to cause the Company to redeem such
Member’s Common Shares on the schedule and terms specified in such agreement
and otherwise in accordance with this Agreement.

(b)           Using the request form attached to
the Exchange Agreement and consistent with the schedule of eligibility for
redemption specified therein, each Member shall be 

 

16

entitled to require the redemption of the Series B
Shares or Series C Shares held by such Member by giving written notice to the
Company specifying the number of Shares eligible for redemption that are to be
redeemed (a “Redemption Request”).  Any
such Redemption Request shall be delivered to the Company no less than 60 days
nor more than 90 days before a General Redemption Date.  The redemption of the Shares subject of the
Redemption Request shall be at a purchase price equal to the proceeds of sale
of the shares of IBGI Common Stock sold by IBGI in order to fund the Company’s
redemption pursuant to this Section 8.4(b), less any applicable underwriting
discounts, in accordance with the procedures established in the Exchange
Agreement.  Such  purchase price shall be payable on such terms
and conditions as are set forth in paragraph (d) of this Section.

(c)           Any Person who becomes the holder of
or otherwise entitled under the terms of this Agreement to any Interest of a
Member, including by reason of death of the Member, shall succeed to the rights
granted the Members to require the redemption of their Shares described in
paragraph (b) of this Section 8.4.

(d)           The redemption of Shares subject to a
Redemption Request shall occur on a date specified by the Company with notice
to the applicable Member within the later of (i) 30 days following the
applicable General Redemption Date, or (ii) 10 business days after completion
of the public offering of IBGI Common Stock, the proceeds from which will fund
the redemption; provided that, if the redemption is to be funded by a
redemption by IBG LLC of a portion of its shares held by the Company, the date
specified by the Company for redemption of the Members Common Shares shall be
within the period described in clause (i). 
From and after the date of redemption specified by the Company, the
Member or other holder of the Shares subject thereof shall cease to be the
holder of such Shares and shall have rights that are limited to entitlement to
the payment(s) provided for in this paragraph. 
The purchase price of Shares redeemed pursuant to Section 8.4(b) shall
be paid, in cash and without interest, on the date of redemption.  The Shares so redeemed by and sold to the
Company shall be free and clear of all liens, charges and encumbrances, other
than those created by this Agreement.

Section
8.5.            Company’s Optional
Redemption of Interests.

(a)           The Company has the unilateral right
to redeem each Member’s Series B Shares and Series C Shares in accordance with
this Agreement.

(b)           The Company (with the prior approval
of the board of directors of IBGI) may at any time demand to buy any or all
Series B Shares or Series C Shares held by any Member by giving written notice
of such intent in accordance with the mandatory exchange provisions of the
Exchange Agreement (a “Redemption Notice”) to such Member, and the Member shall
sell, and shall be deemed to have sold, to the Company, the Shares so demanded
by the Company from the Member, on a date specified in the Redemption Notice.  The purchase price per Share
shall be equal to: (x) in the case of redemptions financed through public
offerings of shares of IBGI Common Stock, the Public Offering Redemption Price
(as defined in the Exchange Agreement), and (y) in the case of redemptions
financed using cash on hand at IBG LLC in accordance with Section 4.3(c) of the
Exchange Agreement, the Stock Price (as defined in the Exchange Agreement) of
the IBGI Common Stock as of the date of redemption.  Such 

 

17

purchase price shall be payable on such terms and
conditions as are set forth in paragraph (d) of this Section.

(c)           Any Person who becomes the holder of
or otherwise entitled under the terms of this Agreement to any Interest of a
Member, including by reason of death of the Member, shall be subject to the
rights granted the Company to purchase such Interest described in paragraph (b)
of this Section 8.5.

(d)           From and after the date of sale
specified in the Redemption Notice given by the Company under this Section 8.5,
the Member or other holder of the Shares subject thereof shall cease to be the
holder of such Shares and shall have rights that are limited to entitlement to
the payment(s) provided for in this paragraph. 
The purchase price of Shares redeemed pursuant to Section 8.5(b) shall
be paid, in cash and without interest, (x) in the case of
redemptions financed through public offerings of shares of IBGI Common Stock,
concurrently with the settlement date for such corresponding public offerings,
and (y) in the case of redemptions financed using cash on hand at IBG LLC in
accordance with Section 4.3(c) of the Exchange Agreement, no less than 15 nor more than 45 days
following the date of the Redemption Notice. 
The Shares so purchased by and sold to the Company shall be free and
clear of all liens, charges and encumbrances, other than those created by this
Agreement.

Section 8.6.            Documentation of Transfer of
Interests.  If any Transfer of a
Member’s Interest is required or permitted pursuant to the terms of this
Article, such Transfer shall, after receipt by the Managing Member of all
required documentation thereof, be made by a proper entry on the books of the
Company.  Any Transfer that is required
pursuant to the terms of this Agreement may be effected by the Managing Member
without further action by the transferring Member.

Section
8.7.            Confidentiality;
Non-Compete; Other Covenants.  Each
Member who is a current or former employee of IBG LLC or any of its Affiliates
acknowledges and agrees that a violation of any of the following agreements
will result in: (x) the forfeiture to the Company of any Series C Shares that
remain subject to restriction which are then held by such Member, (y) the
forfeiture to the Company of any Tax Benefit Shares, and all associated rights
to distributions, then held by such Member, and (z) the right to injunctive
relief in accordance with Section 8.10 below and/or the payment of damages by
such Member to IBG LLC in an amount reflecting the harm caused to IBG LLC and
its Affiliates, and the benefits that have been and may be received by the
Member, in connection with or as a result of any such breach. Each Member
acknowledges and agrees that the restrictions contained herein give rise to
important fiduciary obligations by the Member and are critical to the ongoing
business of IBG LLC and the livelihood of its employees, including
substantially all of the other Members, and that the broad nature of such
restrictions (both in time and geographic scope) are necessary and reasonable
in the circumstances.

(a)           The Member understands that as an
employee of IBG LLC or one of its Affiliates, the Member has and will have
access to IBG LLC’s or its Affiliates’ training with respect to their
proprietary data which is unique and has been developed at great cost, and
which includes, but is in no way limited to, trade secrets, business plans,
computer skills, algorithms, software, source codes, data files, programs and
know-how, financial information and customer 

 

18

information, and that such proprietary data continues
to be developed and may not become outdated. 
The Member agrees to maintain the confidentiality of such proprietary
data during and after termination of employment and not to reveal it to third
parties, nor shall the Member use such proprietary data for the Member’s own
benefit or the benefit of anyone other than IBG LLC or its Affiliates, and the
Member accepts such contractual obligations and all other fiduciary obligations
attendant with receipt of such proprietary data, even though these obligations
will fully restrict the Member’s ability upon leaving IBG LLC’s employ to enter
into competition or be employed or otherwise associated with one who is in
competition with IBG LLC or its Affiliates.

(b)           The Member further understands that,
as an employee of IBG LLC or its Affiliates, and as a consultant to the Company
or its Affiliates, he or she will make contributions to the value of IBG LLC
and its Affiliates.  Such contributions
include development and enhancement of processes, inventions, patents,
discoveries, copyrights, designs, programs, trade secrets and other intangible
rights developed, conceived or enhanced by the Member (whether or not
patentable or copyrightable), either solely or jointly with others, during the
course of employment, or with the use of the time, materials or facilities of
IBG LLC or its Affiliates or otherwise relating to IBG LLC’s or its Affiliates’
businesses or operations.  Such contributions
shall be solely the property of IBG LLC or its Affiliates and the Member shall
have no proprietary rights in such contributions, and shall be entitled to no
other compensation for them other than as provided herein and normal salary and
benefits.  The Member shall disclose such
contributions and related documentation promptly to IBG LLC or its Affiliates;
and shall not disclose them to third-parties. 
The Member assigns all right, title and interest in such contributions
to IBG LLC or its Affiliates; and agrees to assist IBG LLC or its Affiliates in
obtaining all patent, copyright or trade secret protection to the extent
available at the request of IBG LLC or its Affiliates.  Upon termination of employment, and otherwise
at the request of IBG LLC or its Affiliates, the Member shall promptly return
to IBG LLC or its Affiliates all property owned by IBG LLC or its Affiliates,
including, but not limited to, all equipment, keys, credit cards, building
passes, all copies of documents, data, papers, reports, manuals, computer
programs, software and other material and other physical embodiments of the
foregoing (regardless of form or medium) which is or may contain, relate to or
be derived from IBG LLC’s or its Affiliates’ property.

(c)           So that IBG LLC may avail itself of
the special skills and experience afforded to Member by IBG LLC, upon
termination of employment with IBG LLC or its Affiliates, the Member shall at
all times stand ready to, and will (if directed by the Company) personally
consult for the Company or its Affiliates as required by IBG LLC or its
Affiliates for a total of five (5) years: for one (1) year from the date of
such termination for a maximum of three (3) hours per week and for a maximum of
two (2) hours per week in each of the succeeding four (4) years.

(d)           The Member (a) understands that the
global business activities of IBG LLC and its Affiliates may be conducted from
any location in the world; and (b) further understands and agrees that, during
the Member’s employment with IBG LLC or its Affiliates and for a period of five
(5) years after any termination of such employment (during which five year
period the Member agrees to act as a consultant to IBG LLC or its Affiliates
pursuant to Section 8.7(c)), the Member shall not engage or assist others to
engage in competition with IBG LLC or its Affiliates; and (c) further
understands and agrees that the restrictions on competition contained herein
are reasonable in time and geographic scope; provided that, any Member whose
employment with IBG 

 

19

LLC or any of its Affiliates has been terminated
without cause (as determined by the Managing Member) shall not be subject to
the requirements of this Section 8.7(d). 
Competition for this purpose includes, without limitation, directly or
indirectly engaging anywhere in the world in one or more of, or being employed
by or associated in any capacity with any entity or person located anywhere in
the world that engages in, or otherwise provides brokerages services or
Facilities (as defined below) to engage in, any of the following
businesses:  (i) buying, selling,
investing in or otherwise trading, dealing in, or clearing stocks, bonds,
securities, financial instruments, options, derivative products, indices, commodities,
currencies and similar products that are traded either off-exchange or in any
pit, ring or other trading arena, or on any exchange, board of trade,
electronic communications network, alternative trading system or other trading
platform, or upon any electronic, computer or other device (“Facilities”) in or
on which these activities are conducted by IBG LLC or its Affiliates, or in or
on any Facilities through or upon which IBG LLC or its Affiliates plan to
commence these activities within six (6) months of termination of the Member’s
employment with IBG LLC or its Affiliates; or (ii) providing advice or services
of any nature, including, but not limited to hardware, software or programming
services of any kind, for use in any such business or businesses.

Section 8.8.            Termination of Employment.  If at any time a Member’s employment with the
Company or its Affiliates shall terminate for any reason (other than such
Member’s death, or as determined by the Managing Member, such Member’s
disability, retirement or termination without cause), (x) any Series C Shares
held by the Member on the date of such termination that remain subject to
restriction shall be forfeited to the Company, and (y) any Tax Benefit Shares
and all associated rights to distributions held by such Member on the date of
such termination shall be forfeited to the Company.

Section 8.9.            Modifications of Agreement.  Sections 8.7 and 8.8 hereof may be waived in
whole or in part, but only by written consent of the Managing Member, with the
approval of the holders of the Voting Shares. 
Each Member represents that the restrictions with respect to Series C
Shares and Tax Benefit Shares of the Company are fully understood.

Section 8.10.          Consent to Specific Performance and
Injunctive Relief.  The Members, in
addition to all of the remedies allowed by law for the enforcement of this
Agreement, expressly consent to an order for its specific performance in any
court having jurisdiction with respect to the Company’s rights contained in
this Article VIII, and in connection therewith, acknowledge that the Company
will be irreparably injured by a violation of this Article VIII and shall,
therefore, be entitled to permanent injunctive relief and preliminary
injunctive relief pending a final determination of any controversy arising
hereunder.

ARTICLE
IX.

MANAGING
MEMBER

Section 9.1.            Appointment of Managing Member.  By their execution of this Agreement, the
Members holding Voting Shares appoint Thomas Peterffy as Managing Member.

 

20

Section 9.2.            Permitted Transfers.  The Managing Member may transfer all or any
portion of his or its Interest to any Person only with the consent of the
holders of Voting Shares.

Section 9.3.            Resignation of Managing Member.  Upon ninety (90) days prior written notice, a
Managing Member may resign.  In the event
of the resignation of the Managing Member, a successor Managing Member shall be
appointed as provided in Section 9.5 below.

Section 9.4.            Removal of Managing Member.  The Managing Member may be removed, with or
without cause, by an affirmative vote for removal of the holders of a two
thirds majority of the Voting Shares.

Section 9.5.            Successor Managing Member.  If a Managing Member ceases to act as
Managing Member, a successor Managing Member shall be selected by the plurality
vote of the holders of Voting Shares. 
The successor Managing Member shall become a Managing Member upon his
written acceptance of the appointment and written agreement to be bound as a
Managing Member under the terms of this Agreement.  In the event a successor Managing Member is
designated and accepts the designation, the successor Managing Member shall
assume all the duties and obligations of the predecessor Managing Member set
forth in this Agreement.

Section
9.6.            Rights of Former
Managing Member.

(a)           The resignation or removal of a
Managing Member shall not affect such Managing Member’s right to reimbursement
for expenses incurred or repayment of loans made by such former Managing Member
to the Company in accordance with the provisions of this Agreement.

(b)           A resigned or removed Managing Member
(which term, for purposes of this section, shall include his or its successors
and assigns) shall continue to have the rights and obligations of a Member with
respect to his or its continuing Interest, if any.

ARTICLE
X.

ADMISSION
AND WITHDRAWAL OF MEMBERS

Section 10.1.          Admission.  Any Person who acquires an Interest by
Transfer from a Member shall be admitted as a Member of the Company upon the
consent of the Managing Member and the approval of the holders of the Voting
Shares.  Any person or entity to be
admitted as a Member shall execute such documents and instruments, including an
agreement to be bound by the terms of this Agreement, as the Managing Member
shall require.  No Person may acquire a
Voting Share except as provided in Section 8.2 hereof.

Section 10.2.          Withdrawal and Dissociation.  Except upon the Transfer of his entire
Interest in accordance with Article VIII, no Member shall be permitted to
withdraw or resign from the Company prior to the dissolution and winding up of
the Company without the consent of the Managing Member and approval of the
holders of the Voting Shares.

 

21

ARTICLE XI.

MERGER, CONSOLIDATION OR SALE;

DISSOLUTION AND LIQUIDATION

Section 11.1.          Merger, Consolidation or Sale.  The Company may enter into an agreement of
merger, consolidation, or sale or other transfer of substantially all the
assets of the Company upon the decision of the Managing Member, with the
approval of the holders of the Voting Shares.

Section 11.2.          Dissolution.  The Company shall continue until the
occurrence of any one or more of the following events:

(a)           such time that the holders of a
majority of the Voting Shares vote to dissolve the Company; or

(b)           upon the bankruptcy, death, insanity,
retirement, resignation, dissolution, expulsion, incapacity or withdrawal of
any Managing Member, or upon the occurrence of any event which, under the
provisions of the Act, would cause a dissolution; provided, however, that upon
such an occurrence, no dissolution shall occur if the holders of a majority of
the Voting Shares, at such time as they deem appropriate, vote to continue the
business of the Company and, if there is no Managing Member, appoint a
successor Managing Member in accordance with Section 9.5.

No Member has the right, on account of any dissolution
of the type described in this Section 11.2, to have the Company’s assets
applied to discharge its liabilities or to have the value of his or her
Interest ascertained or paid for.

Section 11.3.          Winding Up of Affairs.  Upon the dissolution of the Company in
accordance with the provisions of this Agreement, the Company shall immediately
commence winding up its affairs.  The
winding-up of the affairs of the Company and the distribution of its assets
shall be conducted exclusively by the Liquidator, and the Liquidator is hereby
authorized to do all acts authorized by law for these purposes.  Without limiting the generality of the foregoing,
the Liquidator, in carrying out such winding-up and distribution, shall have
full power and authority to sell all or any of the Company assets or to
distribute the same in kind to the Members. 
Any assets distributed in kind shall be subject to all operating
agreements or other agreements relating thereto which shall survive the
termination of the Company.

Section
11.4.          Liquidating
Distributions.

(a)           Following dissolution of the Company
and incident to the winding up of the Company’s affairs, all of the Company’s
debts and liabilities shall be discharged in the order of priority as provided
by law.  The Company’s entitlement under
the Tax Receivable Agreement to Tax Benefit Payments shall be allocated among
and assigned to the holders of the Tax Benefit Shares in complete cancellation
of such Shares.  The Fair Market Value of
the remaining assets of the Company shall then be determined.  Thereupon, the assets of the Company shall be
distributed to the Members in proportion to the number of Shares held by each
Member in relation to the aggregate number of outstanding Shares.  For purposes of such 

 

22

allocation only, it shall be assumed that the assets
of the Company other than cash had been sold for an amount equal to their Fair
Market Value as determined above, and that the income, gain or loss from such
sale had been allocated in accordance with Article III.  Each Member shall receive his share of the
assets in cash or in kind, and the proportion of such share that is received in
cash may vary from Member to Member, all as the Liquidator may decide.  Except as provided below, if such
distributions are insufficient to return to any Member the full amount of his
Capital Contributions, he shall have no recourse against the Company or any
other Member.

(b)           The proceeds of liquidation and any
unliquidated assets of the Company shall be distributed as provided in Section
11.4(a).  Any reserves established by the
Liquidator in the course of such distribution shall be held for so long as the
Liquidator shall deem necessary in a special account established for the
purpose of paying contingent or unforeseen liabilities or obligations.  At the time the Liquidator determines that
there is no longer a need for the reserve, such reserve shall be distributed in
the order of priority established in Section 11.4(a).  The distribution of the reserve shall
commence where the initial distribution of the assets of the Company ended.  For purposes of this Section 11.4, expenses of
dissolution and liquidation shall be treated as debts and obligations of the
Company.

ARTICLE XII.

POWER OF ATTORNEY

Section 12.1.          Managing Member as Attorney-In-Fact.  Each Member hereby makes, constitutes, and
appoints the Managing Member and each successor Managing Member, with full
power of substitution and resubstitution, his true and lawful attorney-in-fact
for him and in his name, place, and stead and for his use and benefit, to sign,
execute, certify, acknowledge, swear to, file, and record (a) this Agreement
and all agreements, certificates, instruments, and other documents amending or
changing this Agreement which have been adopted as provided herein and which
the Managing Member may deem necessary, desirable, or appropriate including,
without limitation, amendments or changes to reflect (i) the exercise by any
Managing Member of any power granted to him under this Agreement; and (ii) the
disposition by any Member of his Interest in the Company; and (b) any
certificates, instruments, and documents as may be required by, or may be
appropriate under, the laws of any state or jurisdiction in which the Company
is doing or intends to do business.  Each
Member authorizes each such attorney-in-fact to take any further action which
such attorney-in-fact shall consider necessary or advisable in connection with
any of the foregoing, hereby giving each such attorney-in-fact full power and
authority to do and perform each and every act or thing whatsoever requisite or
advisable to be done in connection with the foregoing as fully as such Member
might or could do personally, and hereby ratifying and confirming all that any
such attorney-in-fact shall lawfully do or cause to be done by virtue thereof
or hereof.

Section 12.2.          Nature as Special Power.  The power of attorney granted pursuant to
this Article XII:

(a)           is a special power of attorney
coupled with an Interest;

 

23

(b)           may be exercised by any such
attorney-in-fact by listing the Members executing any agreement, certificate,
instrument, or other document with the single signature of any such
attorney-in-fact acting as attorney-in-fact for such Members; and

(c)           shall survive the death, disability,
legal incapacity, bankruptcy, insolvency, dissolution, or cessation of
existence of a Member and shall survive the delivery of an assignment by a
Member of the whole or a portion of his Interest in the Company.

ARTICLE
XIII.

MISCELLANEOUS

Section 13.1.          Notices.  All notices, consents, approvals, requests,
demands or other communications (“notices”) which any of the parties to this
Agreement may desire to be required to give hereunder, shall be in writing and
shall be deemed properly given if (i) hand delivered, (ii) sent by private or
public mail carrier which provides evidence of delivery, (iii) sent by United
States, certified or registered mail, postage prepaid, return receipt
requested, (iv) sent by facsimile transmission, or (v) sent by electronic mail,
in each case addressed as follows:

(a)           to the Company, or the Managing
Member, at the principal place of business of the Company or to such other
addresses as may be designated by the Managing Member by notice to all Members
pursuant to the terms of this Section; and

(b)           to Members at the same address set
forth in Schedule A or to such other addresses as may be designated by the
respective Members by notice to the Company.

Any distribution made, or notice given, to a Member at
his last known address as shown on the records of the Company shall be
considered effective three (3) days after deposit in any post office or branch
post office, regularly maintained by the United States government and shall
completely satisfy the obligations of the Company hereunder in respect of such
distribution or notice.  Any notice to be
given by any Member may be given by counsel or attorney-in-fact for that
Member.

Section 13.2.          Binding Effect.  Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Members and their respective
heirs, legatees, legal representatives, successors, transferees, and assigns,
and shall inure to the benefit of the Company, its successors and assigns.

Section 13.3.          Incorporation by Reference.  Every exhibit, schedule, and other appendix
attached to this Agreement and referred to herein is hereby incorporated in
this Agreement by reference.

Section 13.4.          Sole and Absolute Discretion.  Except as otherwise provided in this
Agreement, all actions which the Managing Member may take and all
determinations which any Managing Member may make pursuant to this Agreement
may be taken and made at the sole and absolute discretion of such Managing
Member.  In the event there shall be more
than one Managing Member, all such actions and determinations shall be taken
and made by the unanimous vote of all Managing Members.

 

24

Section 13.5.          Independent Activities.  Thomas Peterffy may, notwithstanding this
Agreement, engage in whatever activities he chooses, whether the same are
competitive with the Company or otherwise, without having or incurring any
obligation to offer any interest in such activities to the Company or any
Member.  As a material part of the
consideration for the execution of this Agreement by each Member, each Member
hereby waives, relinquishes, and renounces any such right or claim of
participation.

Section 13.6.          Non-Arbitrability.  Notwithstanding any other provision of this
Agreement or any rules or regulations of any regulatory body, no controversy,
claim, or breach arising out of or relating to this Agreement shall be
submitted for settlement to a panel of arbitrators, and the Members agree that
any such disputes shall be determined only by a court having jurisdiction
thereof in accordance with this Agreement.

Section 13.7.          Further Action.  Each Member, upon the request of the Managing
Member, agrees to perform all further acts and execute, acknowledge, and
deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the provisions of this Agreement.

Section 13.8.          No Other Beneficiaries.  Except as provided in Section 4.3(e), the
rights and obligations of the Members under this Agreement are for the
exclusive benefit of the Members, and no creditor or other party having
dealings with the Company shall have any right or claim hereunder.

Section 13.9.          Governing Law.  The laws of the State of Delaware shall
govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the Members.  In the event this Agreement is in conflict
with any other agreement among any of the parties hereto, the provisions of
this Agreement shall prevail.

Section 13.10.        Waiver of Action for Partition.  Each of the Members irrevocably waives any
right that he may have to maintain any action for partition with respect to any
of the Property of the Company.

Section 13.11.        Construction.  Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against the Company or any Member.

Section 13.12.        Headings.  Section and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof.

Section 13.13.        Severability.  Every provision of this Agreement is intended
to be severable.  If any term or
provision hereof is illegal or invalid for any reason whatsoever, such legality
or invalidity shall not affect the validity or legality of the remainder of
this Agreement.

Section 13.14.        Variation of Pronouns.  All pronouns and any variations thereof shall
be deemed to refer to masculine, feminine, or neuter, singular or plural, as
the identity of Member or Members may require.

 

25

Section 13.15.        Counterpart Execution.  This Agreement may be executed in any number
of counterparts with the same effect as if all of the Members had signed the
same document.  All counterparts shall be
construed together and shall constitute one agreement.

 

26

IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date and year first above set forth.

[Signatures of the
Members of IBG Holdings LLC]Exhibit 10.6

 

EXCHANGE AGREEMENT

by and among

INTERACTIVE BROKERS GROUP, INC.,

IBG HOLDINGS LLC,

IBG LLC

and

MEMBERS OF IBG LLC

Dated as of May [  ], 2007

 

 

 

 

TABLE OF
CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  	
   

  
	
  SECTION 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  	
   

  
	
  SECTION 1.2.

  	
   

  	
  General

  	
   

  	
  4

  	
   

  
	
  SECTION 1.3.

  	
   

  	
  References to Time

  	
   

  	
  5

  	
   

  
	
  ARTICLE II

  	
   

  	
  REPRESENTATION AND WARRANTIES

  	
   

  	
  5

  	
   

  
	
  SECTION 2.1.

  	
   

  	
  Representations and Warranties of IBG LLC Members

  	
   

  	
  5

  	
   

  
	
  SECTION 2.2.

  	
   

  	
  Representations and Warranties of IBG LLC, IBGI and
  IBG Holdings

  	
   

  	
  6

  	
   

  
	
  ARTICLE III

  	
   

  	
  CONTRIBUTION AND INITIAL PURCHASE

  	
   

  	
  6

  	
   

  
	
  SECTION 3.1.

  	
   

  	
  Contribution

  	
   

  	
  6

  	
   

  
	
  SECTION 3.2.

  	
   

  	
  Initial Purchase

  	
   

  	
  6

  	
   

  
	
  SECTION 3.3.

  	
   

  	
  Effect of Contribution and Initial Purchase

  	
   

  	
  7

  	
   

  
	
  SECTION 3.4.

  	
   

  	
  Class B Common Stock

  	
   

  	
  7

  	
   

  
	
  ARTICLE IV

  	
   

  	
  PURCHASES AND REDEMPTIONS

  	
   

  	
  7

  	
   

  
	
  SECTION 4.1.

  	
   

  	
  Elective Redemptions

  	
   

  	
  7

  	
   

  
	
  SECTION 4.2.

  	
   

  	
  Mandatory Redemptions

  	
   

  	
  8

  	
   

  
	
  SECTION 4.3.

  	
   

  	
  Purchases and Redemptions Generally

  	
   

  	
  9

  	
   

  
	
  SECTION 4.4.

  	
   

  	
  IBG Holdings Shares

  	
   

  	
  10

  	
   

  
	
  ARTICLE V

  	
   

  	
  RELATIONSHIP AMONG THE PARTIES

  	
   

  	
  10

  	
   

  
	
  SECTION 5.1.

  	
   

  	
  Parity of IBG Holdings Shares and Shares of Common
  Stock

  	
   

  	
  10

  	
   

  
	
  SECTION 5.2.

  	
   

  	
  IBG LLC Further Assurances

  	
   

  	
  10

  	
   

  
	
  ARTICLE VI

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  11

  	
   

  
	
  SECTION 6.1.

  	
   

  	
  Entire Agreement

  	
   

  	
  11

  	
   

  
	
  SECTION 6.2.

  	
   

  	
  Expenses

  	
   

  	
  11

  	
   

  
	
  SECTION 6.3.

  	
   

  	
  Notices

  	
   

  	
  11

  	
   

  
	
  SECTION 6.4.

  	
   

  	
  Amendment, Modification or Waiver

  	
   

  	
  12

  	
   

  
	
  SECTION 6.5.

  	
   

  	
  Successors and Assigns; No Third Party Beneficiaries

  	
   

  	
  12

  	
   

  
	
  SECTION 6.6.

  	
   

  	
  Counterparts

  	
   

  	
  12

  	
   

  
	
  SECTION 6.7.

  	
   

  	
  Negotiation

  	
   

  	
  12

  	
   

  
	
  SECTION 6.8.

  	
   

  	
  Specific Performance

  	
   

  	
  13

  	
   

  
	
  SECTION 6.9.

  	
   

  	
  Governing Law

  	
   

  	
  13

  	
   

  
	
  SECTION 6.10.

  	
   

  	
  Jurisdiction

  	
   

  	
  13

  	
   

  
	
  SECTION 6.11.

  	
   

  	
  Interpretation

  	
   

  	
  13

  	
   

  
	
  SECTION 6.12.

  	
   

  	
  Severability

  	
   

  	
  13

  	
   

  

 

 

i

 

 

Exhibits to the Exchange Agreement

 

 

Exhibit A                Tax
Receivable Agreement

Exhibit B                Form of
Contribution Notice

Exhibit C                Form of
Redemption Request

 

 

ii

 

EXCHANGE AGREEMENT

This
EXCHANGE AGREEMENT (this “Agreement”), dated as of May [  ],
2007, by and among Interactive Brokers Group, Inc., a Delaware corporation (“IBGI”),
IBG Holdings LLC, a Delaware limited liability company (“IBG Holdings”),
IBG LLC, a Connecticut limited liability company (formerly known as Interactive
Brokers Group LLC, “IBG LLC”), and the members of IBG LLC party hereto
(the “IBG LLC Members,” and together with IBGI, IBG Holdings and IBG
LLC, the “Parties” and each a “Party”).

RECITALS

WHEREAS,
IBGI intends to consummate an initial public offering (the “IPO”) of
shares of its Class A common stock, par value $0.01 per share (the “Common
Stock”);

WHEREAS,
in connection with the IPO, the IBG LLC Members desire to contribute their
membership interests in IBG LLC to IBG Holdings in exchange for IBG Holdings
membership interests pursuant to the terms of this Agreement;

WHEREAS,
in connection with the IPO, IBG Holdings desires to sell certain of its
membership interests in IBG LLC to IBGI upon consummation of the IPO for an
aggregate consideration consisting of: (a) the net proceeds from the IPO, and
(b) an amount equal to certain tax benefits to be realized by IBGI over time,
in accordance with the Tax Receivable Agreement (as defined below);

WHEREAS,
IBGI believes that it is in its best interest to increase its ownership of
membership interests of IBG LLC over time and agrees to purchase from IBG
Holdings from time to time using the proceeds of periodic offerings of shares
of Common Stock, and IBG Holdings agrees to sell to IBGI, membership interests
in IBG LLC, commencing one year after consummation of the IPO; and

WHEREAS,
IBG LLC agrees to effect such transfers of its membership interests and to take
such actions as are otherwise necessary to facilitate the foregoing, including
when mutually agreed to redeem IBG LLC membership interests held by IBG
Holdings in lieu of a direct sale of such membership interests to IBGI.

NOW,
THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties hereby agree as follows:

ARTICLE
I

DEFINITIONS

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

 

1

 

“Agreement”
has the meaning assigned to such term in the preamble to this Agreement, and
includes any amendments or modifications to this Agreement after the date
hereof.

“Closing
Date” means the date hereof.

“Common
Stock” has the meaning set forth in the recitals.

“Contribution”
has the meaning set forth in Section 3.1.

“Electing
Member” has the meaning set forth in Section 4.1(b)(ii).

“Elective
Redemption” has the meaning set forth in Section 4.1(a).

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, together with
the rules and regulations promulgated thereunder.

“General
Redemption Date” has the meaning assigned to such term in Section 4.1(a).

“Governmental
Authority” means any national, local or foreign (including U.S. federal, state
or local) or supranational (including European Union) governmental, judicial,
administrative or regulatory (including self-regulatory) agency, commission,
department, board, bureau, entity or authority of competent jurisdiction.

“IBG
Holdings Members” has the meaning assigned to the term “Members” in the IBG
Holdings Operating Agreement.

“IBG
Holdings Operating Agreement” means the Limited Liability Company Agreement
of IBG Holdings LLC, dated as of May [  ], 2007, entered into
by and among the signatories thereto, as same may be amended from time to time.

“IBG
Holdings Series A Shares” has the meaning assigned to the term “Series A
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Series B Shares” has the meaning assigned to the term “Series B
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Series C Shares” has the meaning assigned to the term “Series C
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Shares” has the meaning assigned to the term “Common Shares” in
the IBG Holdings Operating Agreement.

“IBGI
Board” means the board of directors of IBGI.

“IBG
LLC Members” has the meaning set forth in the recitals.

“IBG
LLC Operating Agreement” means the Amended and Restated Operating Agreement
of IBG LLC, dated as of May [  ], 2007, entered into by and
between IBG Holdings LLC and Interactive Brokers Group, Inc., as same may be
amended from time to time.

 

2

 

“IBG
LLC Shares” has the meaning assigned to the term “Shares” in the IBG LLC
Operating Agreement.

“Incumbent
IBGI Board” means the members of the IBGI Board who were members of the
IBGI Board immediately after the consummation of the IPO; provided,
however,
that any individual becoming a director subsequent to the consummation of the
IPO whose election, or nomination for election by IBGI’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent IBGI Board shall be considered as though such individual were a
member of the Incumbent IBGI Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the IBGI Board.

“Initial
Purchase” has the meaning assigned to such term in Section 3.2.

“IPO”
has the meaning assigned to such term in the recitals.

“IPO
Date” means the date of the closing of the IPO.

“IPO
Effective Date” means the date of effectiveness of the Registration
Statement.

“Mandatory
Redemption” has the meaning assigned to such term in Section 4.2(a).

“Mandatory
Redemption Notice” has the meaning assigned to such term in Section
4.2(b)(ii).

“Party”
or “Parties” has the meaning assigned to such term in the preamble to
this Agreement.

“Public
Offering” means an underwritten or best efforts public offering pursuant to
an effective registration statement under the Securities Act, other than
pursuant to a registration statement on Forms S-4 or S-8 or any similar or
successor form.

“Public
Offering Redemption Price” has the meaning ascribed to such term in Section
4.1(b)(iii).

“Redemption
Request” has the meaning set forth in Section 4.1(b)(ii)(B).

“Registration
Statement” means, as applicable, the registration statement on Form S-1 of
IBGI under the Securities Act relating to the Common Stock to be issued in the
IPO, as amended or supplemented from time to time.

“SEC”
means the Securities and Exchange Commission.

“Securities
Act” means the Securities Act of 1933, as amended, together with the rules
and regulations promulgated thereunder.

 

3

 

“Stock
Price” means, as of any particular date, the volume weighted average
closing price of a share of Common Stock for the thirty (30) most recent
trading days on the primary national securities exchange on which the Common
Stock is traded, as reported by Bloomberg L.P. or, if Bloomberg L.P. is not
available, as determined by another reputable third-party information source
selected by IBGI.

“Tax
Receivable Agreement” means the Tax Receivable Agreement to be entered into
by and between IBGI and IBG Holdings, substantially in the form of Exhibit A
hereto, with such changes as may be determined by the parties thereto.

SECTION 1.2.  General.  Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the
masculine gender shall include the feminine and neuter genders and vice versa,
and references to any agreement, document or instrument shall be deemed to
refer to such agreement, document or instrument as amended, supplemented or
modified from time to time. When used herein:

(a)           the word “or” is not
exclusive;

(b)           the words “including,”
“includes,” “included” and “include” are deemed to be followed by the words “without
limitation”;

(c)           the terms “herein,” “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular section, paragraph or subdivision;

(d)           the word “person”
means any individual, corporation, limited liability company, trust, joint
venture, association, company, partnership or other legal entity or a
Governmental Authority; and

(e)           all section,
paragraph or clause references not attributed to a particular document shall be
references to such parts of this Agreement, and all exhibit, annex and schedule
references not attributed to a particular document shall be references to such
exhibits, annexes and schedules to this Agreement.

SECTION 1.3.  References to
Time.  All references in this
Agreement to times of day shall be to Greenwich, Connecticut time.

ARTICLE II

REPRESENTATION AND WARRANTIES

SECTION 2.1.  Representations
and Warranties of IBG LLC Members.

(a)           Each IBG LLC Member
severally represents and warrants to each of IBG LLC, IBG Holdings and IBGI, as
of the date hereof, that (i) this Agreement constitutes the legal, valid and
binding obligation of such IBG LLC Member, enforceable against such IBG LLC
Member in accordance with its terms (subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity principles);
(ii) neither the execution and delivery of this 

 

4

 

Agreement by such
IBG LLC Member nor the consummation of the transactions contemplated herein
conflicts with or results in a breach of any of the terms, conditions or
provisions of any agreement or instrument to which such IBG LLC Member is a
party or by which the material assets of such IBG LLC Member are bound, or
constitutes a default under any of the foregoing, or violates any law or regulation;
(iii) there are no actions, suits or proceedings pending, or, to the knowledge
of such IBG LLC Member, threatened against or affecting such IBG LLC Member or
such IBG LLC Member’s assets in any court or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality which, if adversely determined, would impair the ability of
such IBG LLC Member to perform this Agreement; (iv) the performance of this
Agreement will not violate any order, writ, injunction, decree or demand of any
court or federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality to which such IBG LLC
Member is subject; and (v) no statement, representation or warranty made by
such IBG LLC Member in this Agreement, nor any information provided by such IBG
LLC Member for inclusion in a registration statement filed by IBGI, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements,
representations or warranties contained herein or information provided therein
not misleading; and

(b)           Each IBG LLC Member
severally represents and warrants to each of IBG LLC, IBG Holdings and IBGI, as
of the date hereof, that such IBG LLC Member has good, valid and marketable
title to the IBG LLC membership interests to be contributed to IBG Holdings
pursuant to Section 3.1 hereof, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind, other than pursuant
to this Agreement, the IBG LLC Operating Agreement or the IBG Holdings
Operating Agreement.

Each
IBG LLC Member shall promptly notify IBG LLC, IBG Holdings and IBGI of any
breaches of such representations or covenants.

SECTION 2.2.  Representations
and Warranties of IBG LLC, IBGI and IBG Holdings.

(a)           Each of IBG LLC,
IBGI and IBG Holdings represents that it has the requisite corporate or other
power and authority and has taken all corporate or other action necessary in
order to execute, deliver and perform this Agreement and to consummate the
transactions contemplated by this Agreement; and

(b)           Each of IBG LLC,
IBGI and IBG Holdings represents that this Agreement has been duly executed and
delivered by it and constitutes a valid and binding agreement of it enforceable
in accordance with the terms thereof (assuming the due execution and delivery
thereof by the other Parties).

ARTICLE
III

CONTRIBUTION
AND INITIAL PURCHASE

SECTION 3.1.  Contribution.  On the IPO Effective Date, the IBG LLC
Members shall contribute their IBG LLC membership interests to IBG Holdings in
exchange for IBG Holdings 

 

5

 

Shares (the “Contribution”);
provided that the Contribution with respect to the IBG LLC membership interests
held by Thomas Peterffy individually shall not occur until immediately after
giving effect to the Initial Purchase described in Section 3.2 below.  Upon completion of the Contribution, IBG
Holdings shall issue to each IBG LLC Member IBG Holdings Shares in the series
and in the numbers set forth in such IBG LLC Member’s Contribution Notice and
admit such IBG LLC Member as an IBG Holdings Member pursuant to the IBG
Holdings Operating Agreement.  Upon the
completion of the Contribution, IBG LLC shall admit IBG Holdings as a member
pursuant to the IBG LLC Operating Agreement, and the books and records of IBG
LLC shall be updated to reflect the Contribution.

SECTION 3.2.  Initial Purchase.  On the IPO Effective Date, after giving
effect to the Contribution, IBG Holdings shall sell [_________] IBG LLC Shares
to IBGI (the “Initial Purchase”) for an aggregate consideration
consisting of: (a) the sum of $[________], such amount to be paid out of the
net proceeds of the IPO, and (b) an amount equal to the tax benefits to be
realized by IBGI over time, in accordance with the Tax Receivable Agreement, in
connection with the Initial Purchase. 
IBGI shall pay the cash consideration set forth in clause (a) above on
the IPO Date by wire transfer of immediately available funds to an account
designated in writing by IBG Holdings. 
Upon completion of the Initial Purchase, the Contribution with respect
to the IBG LLC membership interests held by Thomas Peterffy individually shall
be consummated, IBG LLC shall admit IBGI as its sole managing member pursuant
to the IBG LLC Operating Agreement, and the books and records of IBG LLC shall
be updated to reflect the Initial Purchase.

SECTION 3.3.  Effect of
Contribution and Initial Purchase. 
On the IPO Effective Date, in connection with the Contribution and the
Initial Purchase, (a) IBGI and IBG Holdings shall enter into the IBG LLC
Operating Agreement, (b) IBG LLC shall admit IBGI as its sole managing member
pursuant to the IBG LLC Operating Agreement, (c) IBG LLC shall admit IBG
Holdings as a member pursuant to the IBG LLC Operating Agreement, (d) IBG LLC
shall have only two members (IBGI, which will be its sole managing member, and
IBG Holdings), and (e) the books and records of IBG LLC shall be updated to
reflect the Contribution and the Initial Purchase.

SECTION 3.4.  Class B Common
Stock.  On the IPO Effective Date,
IBG LLC shall transfer to IBG Holdings the 100 shares of Class B Common Stock,
par value $0.01 per share, of IBGI then held by IBG LLC, which shares represent
all of the authorized, issued and outstanding shares of such Class B Common
Stock.

ARTICLE IV

PURCHASES AND REDEMPTIONS

SECTION 4.1.  Elective
Redemptions.

(a)           Elective
Redemptions. Each IBG Holdings Member shall be entitled to cause the redemption
of such IBG Holdings Member’s IBG Holdings Shares (or portion thereof) so
redeemable in accordance with the following schedule and the procedures set
forth in this Article IV: (i) 5% of such IBG Holdings Member’s IBG Holdings
Shares on the IPO Date, (ii) an 

 

6

 

additional 12.5%
of such IBG Holdings Member’s IBG Holdings Shares on each of the first seven
anniversaries of the IPO Date, and (iii) the remaining 7.5% of such IBG
Holdings Member’s IBG Holdings Shares on the eighth anniversary of the IPO
Date; provided that, a holder of IBG Holdings Series C Shares may cause the
redemption of its IBG Holdings Series C Shares (x) only subsequent to the
redemption of all of such holder’s IBG Holdings Series B Shares and (y) only if
such holder remains in compliance with the covenants set forth in Sections 8.7
and 8.8 of the IBG Holdings Operating Agreement.  Each redemption subsequent to the IPO Date
(an “Elective Redemption”) shall occur: (i) on or about the date that is the
first anniversary of the IPO Date and on or about each subsequent anniversary
date thereof (each such anniversary date, a “General Redemption Date”),
or (ii) if not on or about a General Redemption Date, with the prior written
consent of the managing member of IBG Holdings; provided that, an IBG
Holdings Member must be in compliance with all applicable covenants and
obligations under the IBG Holdings Operating Agreement in order to remain
entitled to cause an Elective Redemption.

(b)           Procedures.

(i)            Subject
to clause (ii) below, each Elective Redemption of IBG Holdings Shares shall be
effected in accordance with the IBG Holdings Operating Agreement.

(ii)           Except
as otherwise provided in this clause (ii), each IBG Holdings Member who shall
be entitled to cause the redemption of such IBG Holdings Member’s IBG Holdings
Shares (or portion thereof) so redeemable in accordance with Section 4.1(a)
hereto (an “Electing Member”) shall prepare and deliver to IBG Holdings
and IBGI, for IBG LLC as its managing member and for itself, a written request
in the form attached hereto as Exhibit C signed by such Electing Member
(A) stating the number of IBG Holdings Shares that such Electing Member desires
to have redeemed and (B) certifying that such Electing Member is entitled to
cause the redemption of the IBG Holdings Shares specified by such Electing
Member and that such Electing Member is the beneficial owner of such IBG
Holdings Shares (each such request, a “Redemption Request”).  A properly completed Redemption Request must
be delivered to IBG Holdings and IBGI not less than 60 days or more than 90
days prior to the General Redemption Date on which such Electing Member desires
to effect the Elective Redemptions in accordance with this Section 4.1.  Once delivered, a Redemption Request shall be
irrevocable.

(iii)          Upon
receipt of all Redemption Requests relating to a given General Redemption Date,
unless otherwise determined by IBGI, IBG LLC and IBG Holdings that the
redemption of IBG Holdings Shares will be funded as provided in Section 4.3(c),
IBGI shall use its commercially reasonable efforts to consummate a Public
Offering of a number of shares of Common Stock (adjusted per Section 5.1)
approximately equal to the aggregate number of IBG Holdings Shares specified in
such Redemption Requests.  Upon
consummation of such Public Offering, IBGI shall purchase from IBG Holdings and
IBG Holdings shall sell to IBGI that number of IBG LLC Shares equal to the
aggregate number of IBG Holdings Shares specified in such Redemption Requests
at a purchase price per share equal to the offering price per share of Common
Stock in such Public Offering minus any applicable underwriting discounts or
placement agency fees (the “Public Offering Redemption Price”).  IBG LLC shall bear the costs of the Public 

 

7

 

Offering other than (i) underwriting discounts or placement agency
fees, which effectively shall be borne by the IBG Holdings Members making such
Redemption Requests and (ii) legal fees and expenses of the selling IBG
Holdings Members.

SECTION 4.2.  Mandatory
Redemptions.

(a)           Mandatory
Redemptions. IBG Holdings (with the prior approval of the
IBGI Board) shall be entitled to cause one or more redemptions (each such redemption,
a “Mandatory Redemption”) with respect to all or some IBG Holdings Shares, in
IBG Holdings’ discretion, at any time following the first anniversary of the
IPO Date. A Mandatory Redemption shall occur with respect to IBG Holdings
Shares without any action required on the part of the IBG Holdings Member
holding such IBG Holdings Shares.

(b)           Procedures.

(i)            Each
Mandatory Redemption of IBG Holdings Shares shall be effected in accordance
with the IBG Holdings Operating Agreement.

(ii)           In
the event of a Mandatory Redemption pursuant to Section 4.2(a), IBG Holdings
shall provide written notice (each such notice, a “Mandatory Redemption
Notice”) to each of IBGI and IBG LLC of such election, which notice shall
state (A) whether the Mandatory Redemption shall apply to all or some of the
IBG Holdings Shares and, if it shall apply only to some thereof, to which IBG
Holdings Shares such Mandatory Redemption shall apply, and (B) the anticipated
date on which the Mandatory Redemption shall be consummated.

(iii)          Upon
receipt of a Mandatory Redemption Notice, unless otherwise determined by IBGI,
IBG LLC and IBG Holdings that the redemption of IBG Holdings Shares will be
funded as provided in Section 4.3(c), IBGI shall use its commercially
reasonable efforts to consummate a Public Offering of a number of shares of
Common Stock (adjusted per Section 5.1) approximately equal to the number of
IBG Holdings Shares specified in such Mandatory Redemption Notice.  Upon consummation of such Public Offering,
IBGI shall purchase from IBG Holdings and IBG Holdings shall sell to IBGI that
number of IBG LLC Shares equal to the aggregate number of IBG Holdings Shares
specified in such Mandatory Redemption Notice at a purchase price for share
equal to the Public Offering Redemption Price.

(iv)          In
the event of any Mandatory Redemption, IBG Holdings shall use its reasonable
best efforts to deliver notice thereof to the applicable IBG Holdings Members
not less than 20 days prior to the effective date of such Mandatory Redemption.

Notwithstanding
anything to the contrary set forth herein, any failure to provide such notice
for any reason shall not affect the validity or enforceability of any Mandatory
Redemption.

SECTION 4.3.  Purchases and
Redemptions Generally.

(a)           Public
Offerings of Shares of Common Stock. 
Notwithstanding anything to the contrary set forth herein, (i) IBGI
shall not be obligated to effect any purchase of IBG LLC 

 

8

 

Shares unless and until IBGI has consummated a Public Offering of a
number of shares of Common Stock (adjusted per Section 5.1) approximately equal
to the aggregate number of IBG Holdings Shares specified in Redemption Requests
or a Mandatory Redemption Notice, as applicable, and (ii) unless otherwise determined by IBGI, IBG
LLC and IBG Holdings that the redemption of IBG Holdings Shares will be funded
as provided in Section 4.3(c), IBG Holdings shall not be
obligated to effect any redemption of IBG Holdings Shares unless and until IBG
Holdings has received from IBGI the cash consideration for the purchase of the
applicable IBG LLC Shares.  IBGI’s
commercially reasonable efforts to consummate a Public Offering shall include
without limitation providing, and causing its subsidiaries to provide,
necessary and appropriate road show support for such Public Offering.

(b)           Restriction on
Participation in Public Offerings by IBG Holdings Members. Unless otherwise
permitted by the managing member of IBG Holdings and the IBGI Board, no IBG
Holdings Member may acquire shares of Common Stock in connection with any
Public Offering described in Section 4.3(a).

(c)           Alternative
Financing of Redemptions.

(i)            At the option of, and upon mutual
agreement of, IBGI, IBG Holdings and IBG LLC, in lieu of, or in addition to,
consummating one or more Public Offerings as set forth in this Article IV,
redemptions of IBG Holdings Shares may be effected using cash on hand at IBG
LLC and corresponding redemptions by IBG LLC of its interests held by IBG
Holdings.  In such cases, the redemption
price per IBG Holdings Share and IBG LLC Share shall be the Stock Price of the
Common Stock as of the date of redemption.

(ii)           In the event a redemption of IBG
Holdings Shares is financed using a combination of a Public Offering and cash
on hand at IBG LLC, (A) IBG Holdings shall apply the proceeds from sales of IBG
LLC Shares to IBGI in conjunction with a Public Offering as follows: (x) first,
to redeem any IBG Holdings Series A Shares scheduled for redemption, (y)
second, to the extent there are remaining proceeds, to redeem any IBG Holdings
Series B Shares scheduled for redemption, and (z) third, to the extent there
are remaining proceeds, to redeem any IBG Holdings Series C Shares scheduled
for redemption, and (B) IBG Holdings shall apply the proceeds from redemptions
of IBG LLC Shares by IBG LLC from cash on hand at IBG LLC as follows: (x)
first, to redeem any IBG Holdings Series C Shares scheduled for redemption, (y)
second, to the extent there are remaining proceeds, to redeem any IBG Holdings
Series B Shares scheduled for redemption, and (z) third, to the extent there
are remaining proceeds, to redeem any IBG Holdings Series A Shares scheduled
for redemption.

(d)           Set-Off.  In the event an IBG Holdings Member becomes
liable to IBGI or any of its Affiliates for any reason, IBGI (or its
Affiliates, as applicable) may set-off such liabilities against any Purchase
consideration otherwise payable to IBG Holdings under Article IV of this
Agreement.

SECTION 4.4.  IBG Holdings
Shares.  The IBG Holdings Shares, which
shall be issued by IBG Holdings on the IPO Effective Date pursuant to Section
3.1 hereof, are subject to certain 

 

9

 

restrictions and
other terms and conditions as set forth in the IBG Holdings Operating Agreement.

ARTICLE
V

RELATIONSHIP
AMONG THE PARTIES

SECTION 5.1.  Parity of IBG
Holdings Shares and Shares of Common Stock. 
It is the intention of each of IBGI, IBG Holdings and IBG LLC that,
unless otherwise determined by the IBGI Board, the number of IBG LLC Shares
outstanding shall at all times equal the number of outstanding shares of Common
Stock plus the number of IBG Holdings Shares outstanding (such that the number
of IBG LLC Shares and IBG Holdings Shares would be proportionately adjusted as
necessary in the event of any issuance or repurchase by IBGI of shares of
Common Stock), and each of IBGI, IBG Holdings and IBG LLC agrees to cooperate
to effect the intent of this sentence. 
In the event that IBGI shall: (i) subdivide the outstanding shares of
Common Stock into a greater number of shares; (ii) combine the outstanding
shares of Common Stock into a smaller number of shares; (iii) pay a dividend or
make a distribution on shares of Common Stock in the form of shares of Common
Stock; (iv) make a distribution on shares of Common Stock in shares of its
share capital other than Common Stock; or (v) issue by reclassification of the
outstanding shares of Common Stock any shares of its share capital, then the
number of IBG LLC Shares and IBG Holdings Shares would be proportionately
adjusted to the extent necessary to preserve the economic rights of IBGI and
IBG Holdings in IBG LLC, with such adjustment to be determined in good faith by
the IBGI Board in consultation with IBG Holdings.

SECTION 5.2.  IBG LLC Further
Assurances.  IBG LLC agrees to effect
transfers of its IBG LLC Shares and to take such actions as are otherwise
necessary to facilitate the transactions contemplated by this Agreement.

ARTICLE
VI

MISCELLANEOUS

SECTION 6.1.  Entire Agreement.  This Agreement and the Schedules hereto shall
constitute the entire agreement among the Parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.

SECTION 6.2.  Expenses.

(a)           Except as expressly
set forth in this Agreement, all third party fees, costs and expenses paid or
incurred in connection with the transactions contemplated by this Agreement
will be paid by the Party incurring such fees, costs or expenses.

(b)           With respect to the
IPO, IBG LLC shall pay all third party costs, fees and expenses relating to the
IPO, all of the reimbursable expenses of the placement agent pursuant to the
placement agency agreement, and all of the costs of producing and filing the applicable
Registration Statement and printing, mailing and otherwise distributing the
prospectus contained in such Registration Statement.

 

10

 

(c)           Subsequent to the
IPO, IBG LLC shall reimburse IBGI for all reasonable third party costs, fees
and expenses incurred by IBGI in the ordinary course of business, including all
costs associated with all reports and other filings with the SEC.

SECTION 6.3.  Notices.  All notices, consents, waivers and other
communications required or permitted by this Agreement shall be in writing and
shall be deemed given to a Party when (a) delivered to the appropriate address
by hand or by nationally recognized overnight courier service (costs prepaid);
(b) sent by facsimile with confirmation of transmission by the transmitting
equipment; or (c) received or rejected by the addressee, if sent by certified
mail, return receipt requested, in each case to the following addresses and
facsimile numbers and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number or person as a
Party may designate by notice to the other Parties):

If
to IBG LLC:

IBG LLC

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Managing Member

Fax: (203) 618-5934

If to IBGI:

Interactive Brokers Group, Inc.

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Chairman, Chief Executive Officer and
President

Fax: (203) 618-5934

If to IBG Holdings:

IBG Holdings LLC

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Managing Member

Fax: (203) 618-5934

If to Members of IBG LLC:

To the addresses set
forth on the books and records of IBG LLC.

SECTION 6.4.  Amendment,
Modification or Waiver.  This
Agreement may be amended, modified, waived or supplemented, in whole or in
part, only by a written agreement signed by IBGI, IBG LLC and IBG Holdings. No
failure or delay on the part of any Party in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right.  The 

 

11

 

waiver by such
Parties of any breach of this Agreement shall not be construed as a waiver of
any subsequent breach.

SECTION 6.5.  Successors and
Assigns; No Third Party Beneficiaries.

(a)           This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the Parties and their successors and permitted assigns, but neither this
Agreement nor any of the rights, interests and obligations hereunder shall be
assigned or otherwise transferred, in whole or in part, by any Party without
the prior written consent of each of the Parties.

(b)           This Agreement is
solely for the benefit of the Parties and is not intended to confer upon any
other persons any rights or remedies hereunder.

SECTION 6.6.  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

SECTION 6.7.  Negotiation.  In the event of any dispute or disagreement
between any of the Parties arising out of or in connection with this Agreement
(including with respect to the interpretation or performance of any provision
hereof), the dispute or disagreement, upon written request of a Party, as
applicable, shall be referred to representatives of the Parties involved in
such dispute for decision.  Such
applicable representatives of the Parties shall promptly meet in a good faith
effort to resolve the dispute or disagreement or determine a means to resolve
the dispute or disagreement. If such representatives do not agree upon a
decision within 30 days after reference of the matter to them, the Parties
shall be free to exercise all rights and remedies available to them under this
Agreement.

SECTION 6.8.  Specific Performance.  The Parties acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which they may be entitled by law
or equity.

SECTION 6.9.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than the
laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including
matters of validity, construction, effect, performance and remedies.

SECTION 6.10.  Jurisdiction.  Each of the Parties agrees that all actions
or proceedings arising out of or in connection with this Agreement, or for
recognition and enforcement of any judgment arising out of or in connection
with this Agreement, shall be tried and determined exclusively in the state or
federal courts in the State of Connecticut,  and each of the Parties hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
to its property, generally and unconditionally, to the exclusive jurisdiction
of the aforesaid courts. Each of the Parties hereby expressly waives any right
it may have to assert, and agrees 

 

12

 

not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any such action or
proceeding: (a) any claim that it is not subject to personal jurisdiction in
the aforesaid courts for any reason; (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts; and (c) that (i) any of the aforesaid courts is an inconvenient
or inappropriate forum for such action or proceeding, (ii) venue is not proper
in any of the aforesaid courts and (iii) this Agreement  or the subject matter hereof may not be
enforced in or by any of the aforesaid courts.

SECTION 6.11.  Interpretation.  The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement.

SECTION 6.12.  Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any applicable
rule of law or public policy, all other conditions 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 to the end that transactions contemplated
hereby are fulfilled to the extent possible.

 

13

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as
of the date first above written.

	
   

  	
  INTERACTIVE BROKERS
  GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas Peterffy

  
	
   

  	
   

  	
  Title:

  	
  Chairman, Chief
  Executive Officer and

  
	
   

  	
   

  	
   

  	
  President

  

 

	
   

  	
  IBG HOLDINGS LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas Peterffy

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
  IBG LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas Peterffy

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  

 

 

 

	
   

  	
  [Signatures of the
  Members of IBG LLC]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]