10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                to

Commission File Number 001-32722

INVESTMENT TECHNOLOGY GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE (State of incorporation)	95-2848406 (IRS Employer Identification No.)
380 Madison Avenue, New York, New York (Address of principal executive offices)	10017 (Zip Code)
(212) 588-4000 (Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Common Stock, $0.01 par value (Title of class)	New York Stock Exchange (Name of exchange on which registered)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this form 10-K Yes o    No ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act)

 Yes o    No ý

Aggregate market value of the voting stock
held by non-affiliates of the
Registrant at June 30, 2007:
$1,922,914,512 Number of shares outstanding of the
Registrant's Class of common stock
at February 15, 2008:
43,664,717

DOCUMENTS INCORPORATED BY REFERENCE:

         Proxy Statement relating to the 2008 Annual Meeting of Stockholders (incorporated, in part, in Form 10-K Part III)

2007 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	22
Item 4.	Submission of Matters to a Vote of Security Holders	22
PART II
Item 5.	Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	25
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 8.	Financial Statements and Supplementary Data	46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	84
Item 9A.	Controls and Procedures	84
Item 9B.	Other Information	86
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	86
Item 11.	Executive Compensation	86
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86
Item 13.	Certain Relationships and Related Transactions, and Director Independence	86
Item 14.	Principal Accounting Fees and Services	86
PART IV
Item 15.	Exhibits, Financial Statement Schedules	87

Investment Technology Group, ITG, ITG Dark Algorithm, ITG Logic, ITG Opt, ITG Web Access, Macgregor, POSIT, Quantex, RouteNet, Triton and AlterNet are registered trademarks or service marks of the Investment Technology Group, Inc. companies. End-to-End Trading Solutions, ITG Algorithms, ITG Channel, ITG Compliance, ITG Data Analytics, ITG Derivatives, ITG Fair Value, ITG List-Based Algorithms, ITG Matrix, ITG Net, ITG Routers, ITG Single-Stock Algorithms, ITG Single Ticket Clearing, ITG TCA, ITG Trade Ops, ITG Triton X, ITG Wealth Management, Match Now, Macgregor Electronic Trading, Macgregor XIP, Plexus Plan Sponsor Group, Alpha Capture Service, BrokerEDGE, PAEG/L, Plexus Sponsor Monitor, POSIT Match, POSIT Now, POSIT VWAP, Powered by POSIT, Predator and Radical are trademarks or service marks of the Investment Technology Group, Inc. companies. BLOCKalert is a service mark of the Block Alert LLC joint venture.

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FORWARD-LOOKING STATEMENTS

        In addition to the historical information contained throughout this Annual Report on Form 10-K, there are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, dividends, financing plans, business strategies, competitive positions, plans and objectives of management for future operations, and concerning securities markets and economic trends are forward-looking statements. Although we believe our expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements herein include, among others, the actions of both current and potential new competitors, rapid changes in technology, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, risk of errors or malfunctions in our systems or technology, cash flows into or redemptions from equity funds, effects of inflation, customer trading patterns, the success of our new products and services offerings, our ability to successfully integrate companies we have acquired, as well as general economic and business conditions, internationally or nationally, securities, credit and financial market conditions, and adverse changes or volatility in interest rates. Certain of these factors, and other factors, are more fully discussed in Item 1A "Risk Factors", and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K, which you are encouraged to read.

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PART I

Item 1.    Business

        Investment Technology Group, Inc. ("ITG" or the "Company") was formed as a Delaware corporation on July 22, 1983. Its principal subsidiaries and affiliates include: (1) ITG Inc., AlterNet Securities, Inc. ("AlterNet") and ITG Derivatives LLC ("ITG Derivatives"), following its acquisition on July 31, 2007, United States ("U.S.") broker-dealers, (2) Investment Technology Group Limited ("ITG Europe"), an institutional broker-dealer in Europe, (3) ITG Australia Limited ("ITG Australia"), an institutional broker-dealer in Australia, (4) ITG Canada Corp. ("ITG Canada"), an institutional broker-dealer in Canada, (5) ITG Hong Kong Limited ("ITG Hong Kong"), an institutional broker dealer in Hong Kong, (6) ITG Japan Ltd. ("ITG Japan"), an institutional broker-dealer in Japan, (7) ITG Software Solutions, Inc., our intangible property, software development and maintenance subsidiary in the U.S., (8) ITG Solutions Network, Inc., ("ITG Solutions Network") a holding company for ITG Analytics, Inc. ("ITG Analytics"), a provider of pre- and post- trade analysis, fair value and trade optimization services, The Macgregor Group, Inc. ("Macgregor"), a leading provider of trade order management technology for the financial community and Plexus Plan Sponsor Group, Inc. ("Plexus"), a provider of transaction cost analysis and transition consulting and related services to the plan sponsor community, and (9) Block Alert LLC ("BLOCKalert"), a 50% owned joint venture (see Note 4, "Affiliate Equity Transactions", to the consolidated financial statements).

        Investment Technology Group, Inc. (NYSE: ITG), is a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. A pioneer in electronic trading, ITG has a unique approach that combines pre-trade, order management, trade execution, and post-trade tools to provide clients with continuous improvements in trading and cost efficiency. The firm is headquartered in New York with offices in North America, Europe and the Asia Pacific region.

        The Company has three reportable operating segments: U.S. Operations, Canadian Operations and International Operations, following changes the Company made to its management hierarchy to synchronize with its strategy of managing business operations, planning and resource allocation as three separate and distinct businesses. The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers in the U.S. The Canadian Operations segment provides trading, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as "Asia Pacific"), as well as a research and development facility in Israel.

        The following is a brief overview of ITG's product line. The entire product line is detailed in the Product Detail section following the Product Overview.

Product Overview

        ITG offers a wide range of end-to-end trading solutions:

PRE-TRADE OFFERINGS

Portfolio Management, Optimization, & Compliance

•

ITG Opt—strategic portfolio construction and complex optimization tool



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ITG Compliance—daily and real-time pre-trade portfolio compliance monitoring system

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Pre-Trade Analytics

•

ITG Logic—risk management and trading cost reduction tool

TRADE OFFERINGS

Execution, Management, & Connectivity

•

Triton—global equity execution management system for lists and single stocks



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Radical—active single-stock and options execution management system



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ITG Matrix—low latency multi-asset execution management system



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ITG Channel—sweeping utility providing access to ITG liquidity from order management system blotters



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ITG Triton X—currently deploying version 1.0 of a multi-year project to create a comprehensive enterprise investment management platform



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Macgregor XIP—multi-asset order management system



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ITG Net—global, broker- and platform-neutral financial communications network



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Trading Services—global agency trading services for portfolio and hedge fund trading; commission sharing and broker payment services; hedge fund start up services

Algorithmic Trading

•

ITG Algorithms—Dark, List and Single Stock algorithms to automate liquidity access across numerous liquidity pools

POSIT® Crossing

•

POSIT Match—scheduled daytime equity securities matches



•

POSIT Now—continuous equity securities matching



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BLOCKalert—alerting service which uncovers equity crossing opportunities in the U.S. for participating clients



•

POSIT Alert—service which uncovers and notifies participants of equity crossing opportunities in Australia and Europe

POST-TRADE OFFERINGS

Measurement & Analytics

•

ITG TCA—consulting, analytics and tools for cost assessment and peer comparison to optimize trading performance



•

ITG Fair Value—independent fair value securities pricing model for mutual funds



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Plexus Plan Sponsor Group Services—trading process analysis services, pre- and post-transition analysis services and transition consulting

Post-Trade Processing

•

ITG Trade Ops—automated post-trade matching and settlement notification services

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Product Detail

Pre-Trade

Portfolio Optimization

ITG Opt

        ITG Opt is a computer-based equity portfolio optimizer, employing advanced techniques to help portfolio managers construct portfolios that meet their investment objectives. Special features of the system make it particularly useful to long/short and taxable investors, as well as any investor seeking to control transaction costs.

        With ITG Opt users can construct portfolios that meet a wide range of objectives: managing risk, tracking a benchmark, adjusting portfolio tilt to improve returns and tax lot accounting. It also manages execution costs with the help of ITG's agency cost estimator model.

        ITG Opt provides tax-code modeling, including Highest In, First Out ("HIFO"), Last In, First Out ("LIFO"), or First In, First Out ("FIFO") accounting methods, and has the ability to constrain gross and net capital gains and losses in each holding period. ITG Opt also offers wash sale handling and loss harvesting.

        ITG Opt is designed to handle long/short settings, including dollar-neutral, long-biased, short-biased and variable leverage. Position and trade-size constraints can be set for the long/side, short/side and net portfolio values, as can exposure to characteristics such as sector, growth/value and beta. ITG Opt offers extensive back testing, including corporate actions and transaction costs. ITG Opt can conduct sensitivity analysis to assess trade-offs such as transaction costs versus alpha and risk versus tax loss harvesting.

Portfolio Compliance

ITG Compliance

        ITG Compliance, formerly Macgregor Enterprise Compliance, is a comprehensive web-based monitoring, control and reporting solution that provides the ability to centrally manage global portfolio compliance activity across all phases of the investment process, security types and compliance mandates. Pre-trade monitoring helps asset managers avoid potential violations while end-of-day capabilities automate the process of determining daily compliance status across a wide range of investments, funds and mandates. ITG Compliance is available as a standalone offering. ITG charges license fees for the use of ITG Compliance.

Pre-Trade Analytics

ITG Logic

        ITG Logic is a pre-trade analysis tool for traders and portfolio managers that enables them to enhance portfolio returns by helping identify outliers, for example, equities likely to deviate the most from the benchmarks on any given day. Once outliers are identified, ITG Logic analyzes the implication of different execution strategies and suggests a spectrum of efficient strategies. It is offered through an integrated platform, to portfolio managers, traders and transition managers. ITG Logic incorporates a robust cost estimate model, ITG's agency cost estimator, which determines the implicit costs of trading, spread and price impact. Users can input parameters into the model to estimate how much each execution strategy will cost. Trade list optimization capabilities allow users to assess and control portfolio risk, and powerful equity risk models help assess the tradeoff between cost and risk. ITG Logic is designed to give traders and portfolio managers the means to analyze trade lists and

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liquidity, and to provide strategies to achieve low market impact and low cost trading. ITG Logic also helps predict price movement and stock inter-relationships in order to measure impact and assess risk.

        ITG Logic permits consolidated reporting and various delivery mechanisms. ITG Logic offers web-based browser delivery and the system includes web-services functionality, allowing swift integration with proprietary client and third-party OMSs and execution management systems ("EMSs"). Data input and reporting are facilitated through web browsers, real-time dynamic Microsoft Excel spreadsheet applications, and integration into order management systems. The ITG Logic tool is offered on a standalone basis, through Triton, Macgregor XIP and certain third-party OMSs and EMSs.

Trade

Execution Management

Triton

        Triton is ITG's list-trading front-end, bringing a complete set of integrated execution and analytical tools to the user's desktop. Triton was built using a Windows-based architecture for ease of use, customization and tight integration with the user's desktop environment.

        Fully customizable, multi-asset and broker neutral, Triton provides an array of execution venues and automated strategies, including access to ITG pre- and post-trade analytical tools, crossing venues, ITG Algorithms and third-party algorithms. Triton integrates every step of the trading process and works seamlessly with several OMSs. With a single interface, Triton gives traders the flexibility to navigate the markets' complexities in real time and provides broker-neutral connectivity to more than 80 destinations, giving traders pricing power and choice. From the Triton desktop, users can perform trade management functions, make order execution decisions, monitor trading results, access real-time and historical market data, and utilize trading analytics. Triton supports sophisticated portfolio aggregation and allocation functions. Finally, Triton is a multi-user system, allowing work groups to share access to portfolios and track trading results.

        Revenues are generated through commissions and transaction fees charged for trades electronically routed through Triton and executed on one of the many destinations available from the application. ITG does not derive royalties from the sale or licensing of the Triton software.

        ITG is undertaking a multi-year initiative to deliver Triton's execution management capabilities fully integrated with enhanced order management capabilities; the combined solution will be a new platform, ITG Triton X (as discussed further below).

Radical

        Radical is a broker-neutral trading system that brings all the major markets directly to a trader's desktop. Radical offers the reliability, speed and anonymity traders need to make the most effective trades at a low cost. With Radical, traders have instant direct access to exchanges, Electronic Communication Networks ("ECNs"), major broker-dealers and ITG destinations such as POSIT and ITG Algorithms.

        Radical offers access to various markets, allowing users to work efficiently, with the goal of cost efficiency. Order generation tools help traders quickly access liquidity, streamlining workflow and increasing productivity. With direct access to POSIT and various market destinations, Radical users mitigate the risk of information leakage. Radical's flexibility offers clients the ability to easily handle multi-account, multi-trader setups. Users can view and act on other traders' orders, trade for multiple accounts in the same window, and track positions by trader or in the aggregate.

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        ITG does not derive royalties from the sale or licensing of the Radical software. ITG receives commissions and transaction fees for each trade electronically routed through the application and executed on one of the many destinations available from the application.

ITG Matrix

        ITG Matrix is a direct access method that provides traders with access to consistently reliable, scalable, low-latency, multi-asset trading opportunities. Through one provider, traders can efficiently execute and manage trades across multiple asset classes with the confidence and anonymity that innovative technology, experience and broker-neutrality provide. ITG Matrix offers sophisticated tools for electronic execution and risk management, allowing traders to access individual markets or trade multiple asset classes side by side. Alternatively, the ITG Matrix market data and order entry Application Programming Interfaces ("APIs") enable low-latency direct market access from black-box or automated trading strategies.

        Revenues are generated by ITG Matrix through commissions and transaction fees charged for trades electronically routed through ITG Matrix and executed on one of the many destinations available from the application.

ITG Channel

        ITG Channel provides an integrated link to the trade blotter of most third-party OMSs. ITG Channel is a tool that lets users automatically sweep unplaced shares from an OMS to multiple ITG liquidity sources, including the POSIT suite. ITG Channel allows the user to set sweep criteria, controlling which unplaced shares are available for sweeping. The user may then review and adjust uncommitted entries in ITG Channel prior to sending them to an ITG destination. As trades are executed, the positions in the user's trade blotter are updated in real time. ITG Channel also issues reminders of upcoming POSIT Match crosses. ITG does not derive royalties from the sale or licensing of the ITG Channel software. ITG receives commissions and transaction fees for trades electronically routed and executed on one of the many destinations available from the application.

Trading Services

        ITG offers clients a full range of portfolio, single-stock, international and hedge fund trading services as part of its consultative approach. ITG's specialists help customers gain access to the unique liquidity of POSIT, as well as major global markets, ECNs, brokers and third party Alternative Trading Systems ("ATSs"). When a client trade is sent to ITG's desk, it is evaluated through pre-trade analysis to determine aggregate portfolio characteristics, estimate market impact, and to quantify risk. The group implements a number of sophisticated trading strategies using Triton and ITG Algorithms, and then uses Triton to route orders to multiple market destinations, including primary exchanges, regional exchanges, ATSs, ECNs and market makers. After a portfolio execution is complete, clients are provided with comprehensive reports analyzing execution results utilizing ITG's post-trade tools.

        ITG also offers specialized services to hedge funds to help them consolidate trading relationships, streamline their workload, improve efficiency and reduce operational challenges. In addition, ITG understands the legal and regulatory issues facing hedge funds, and can structure and monitor directed brokerage activities and commission arrangements under Section 28(e) of the Securities Exchange Act of 1934.

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Order Management

Macgregor XIP

        Macgregor XIP is a broker-neutral, multi-asset OMS that combines portfolio management, compliance, trading and post-trade applications with a fully integrated and supported financial services IP network. Macgregor XIP enables buy-side firms to execute their investment decisions with speed, control and efficiency. It optimizes the execution process from initial portfolio decision to final settlement by connecting all internal and external parties. Macgregor XIP includes access to numerous brokers, ECNs, algorithmic trading solutions, direct market access providers and post-trade service bureaus.

        Revenues are generated through license fees which are based on the number of users for portfolio management and trading capabilities. Fees for use of ITG Compliance, ITG Trade Ops and ITG Net services are additional. Revenues can also be generated through commissions and transaction fees charged to clients for each trade electronically routed to ITG and fees charged to third party brokers and ATSs to which certain trades are routed from the application.

ITG Triton X

        ITG Triton X is ITG's multi-year initiative to innovate and evolve the concept of enterprise investment management platforms. By combining proven execution management capabilities, market-leading pre- and post-trade analytics, a global routing network, extensive intellectual capital, a history of innovative technology, and true neutrality across brokers, liquidity destinations and vendors, ITG Triton X will offer investment management firms true flexibility for the way they do business. ITG Triton X will bring together all of the pieces of the EMS and the OMS in a cohesive fashion that goes beyond traditional capabilities to deliver a unified platform designed to optimize the trading experience.

        ITG Triton X version 1.0 is currently available and provides integration between ITG's existing Triton and Macgregor XIP applications. Future releases will introduce integrated execution and order management functionality on ITG's next generation technology platform for a unified equity trading experience. The offering will evolve into a comprehensive multi-asset system complete with portfolio management capabilities.

Connectivity

ITG Net

        In 2007, ITG merged the former Macgregor Financial Network ("MFN") with ITG's internal routing network, formerly RouteNet, into one as ITG Net. ITG Net is a global financial communications network that provides secure, reliable and fully supported connectivity between buy-side and sell-side clients. In addition to facilitating the communication of FIX-based indications of interest ("IOIs"), orders, executions and allocations, ITG Net provides connectivity to over 380 brokers and access to many third party algorithmic trading tools, direct market access solutions and ATSs. ITG Net is a broker-neutral, platform-neutral service available to users of any trading application with a FIX engine. Revenues are generated through fixed price connectivity fees and commission-based fees on a segment of the trades electronically routed through the network.

Algorithmic Trading

ITG Algorithms

        ITG's full suite of automated strategies offer portfolio managers and traders a streamlined way to trade orders more quickly, comprehensively and cost-efficiently. The algorithms tap into liquidity, while remaining anonymous, thereby lowering market impact costs and improving overall performance. ITG

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Dark Algorithms can access hidden liquidity. ITG Algorithms also integrate with ITG pre-trade analysis and post-trade evaluation tools to create a feedback mechanism for greater execution consistency. ITG Algorithms can be customized so that they easily fit into the user's workflow and current processes.

        All ITG Algorithms are accessed electronically by clients via Macgregor XIP, Triton, Radical, direct connections, ITG's Trading Desk Services and certain third party trading platforms. Each ITG Algorithm is an automated trading strategy with a particular trading style. By using these algorithms, traders can focus their attention on a subset of their orders, letting the ITG Algorithms trade the rest of the orders on the list.

        ITG Algorithms help users pursue best execution through the following suites:

ITG Dark Algorithms—Seek hidden liquidity among all visible, hidden, reserve and discretionary quantities.

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ATS—Splits orders among ATS destinations, including POSIT Match, POSIT Now and other ATSs.



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Opportunistic—Uses immediate or cancel orders to search for hidden liquidity in ECNs and to take liquidity when spreads, prices and liquidity are attractive.



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Float—Uses a passive algorithm to earn the spread in the open market resulting in higher fill rates than ATS or Opportunistic.

ITG Single Stock Algorithms—Seamlessly accesses ATS liquidity while simultaneously using scheduled or opportunistic strategies

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Active—Provides liquidity to the markets and opportunistically accesses liquidity while maximizing ATS usage.



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Volume Participation—Participates at a specified percentage of printed volume.



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Time-Weighted Average Price ("TWAP")—Executes orders over a requested time horizon, spreading trades along a linear volume distribution.



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Volume-Weighted Average Price ("VWAP")—Executes orders over specified time horizon, spreading trades along a historical volume distribution.



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Market Order Close ("MOC") Algorithm—Estimates price movement and controls market impact into the close.



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Best Market Algorithm—Automatically finds the best price in North America for orders in inter-listed securities. Designed for the trading of Canadian-US interlisted securities.



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Foreign Exchange ("FX") Server—This algorithm provides U.S. dollar trading of Canadian securities and Canadian dollar trading of U.S. securities. It works seamlessly and eliminates the inefficiencies of time consuming FX-conversion. It is available in the U.S. and Canada.

ITG List-Based Algorithms—Manages dollar or sector imbalance, total trading risk or tracking error using automated portfolio trading with integrated ATS access.

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Dynamic Implementation Shortfall—Minimizes implementation shortfall over time and controls dollar and sector imbalances, liquidity exposure and risk levels, while accessing ATS liquidity for trade lists from transitions, portfolio rebalances and cash flows.



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Dark List—Uses proven statistical model to slice orders to ATSs while keeping the list sector and dollar neutral.

        As part of the ITG Algorithm suite, ITG Routers offer an alternative to routing trades that can help capture blocks of liquidity with a combination of speed and confidentiality. Block Routers

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continuously scan markets for liquidity with an emphasis on capturing the quote without posting the trade. Smart Routers use a proprietary algorithm to quickly and directly exhaust all available quantities at the best available price level in all destinations before moving on to the next level.

POSIT Crossing

POSIT

        ITG's POSIT suite of crossing destinations, including POSIT Match, POSIT Now, POSIT Alert and BLOCKalert, give buyers and sellers opportunities to match equity orders with complete confidentiality, no market impact and the cost savings of midpoint pricing. POSIT offers unique value for traders with active, quantitative, and passive trading styles. POSIT provides access to rich, diverse liquidity, is useful for all trading styles and is especially valuable for trading large blocks and small, illiquid names. All POSIT products cross at the midpoint of the National Best Bid or Offer ("NBBO").

POSIT Match

        POSIT Match is an ATS and operates under Regulation ATS. It was introduced in 1987 in the U.S. as a technology-based solution to the trade execution needs of quantitative and passive investment managers. It has since grown to serve the active trading and broker-dealer communities including corporate and government pension plans, insurance companies, bank trust departments, investment advisors, broker-dealers and mutual funds. POSIT Match is also available in Europe and the Asia Pacific region.

        With scheduled matches throughout the trading day and after-hours crossing, POSIT Match offers concentrated liquidity across a broad range of securities, including small, medium and large cap stocks. POSIT Match anonymously compares buy and sell orders and crosses them, with no market impact, resulting in improved execution prices. The after-hours crosses run after the close of the intraday trading session and all trades are priced at the day's closing price. Immediately after each match, clients receive electronic reports showing match results for their orders.

        POSIT Match also offers controls to help manage risk, allowing traders to improve sector balancing and the liquidity profile of a portfolio. Users can also specify tracking error constraints and set dollar or share constraints on an entire portfolio. POSIT Match offers order enhancements such as minimum share execution and price constraints and control. POSIT Match can monitor price fluctuations due to news and volatility. The POSIT Match after-hours crosses share the same features as the intraday matches, plus protection of orders through filtering for news and price movements after the market close.

        Orders may be submitted to POSIT Match directly via ITG execution management systems or other computer-to-computer links, or indirectly through POSIT Now, ITG Algorithms or ITG trading personnel. ITG works in partnership with vendors of other popular trading systems, allowing users the flexibility to route orders directly to POSIT Match from trading products distributed by certain third-party trading systems.

        Clients can also access POSIT Match through ITG's brokerage subsidiary, AlterNet. AlterNet enables clients to execute trades in POSIT Match on a net basis, with the commission payable to ITG for the POSIT Match trade included in the price at which the client executes their POSIT Match trade. This feature is particularly attractive to our broker-dealer customers and AlterNet was created in response to broker-dealers' desires to facilitate net pricing in POSIT Match.

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POSIT Now

        POSIT Now is an ATS, operating under Regulation ATS, that offers continuous intraday crossing with complete anonymity. POSIT Now's liquidity sources include an ongoing flow of market bound orders from ITG's trading systems and services, orders from other liquidity suppliers and participation in POSIT Match's intraday crosses. It also attracts liquidity that is not currently available in the market through BLOCKalert and POSIT Alert. Traders can expose single stocks or list orders to POSIT Now's continuous trading opportunities over a user-specified time horizon.

        POSIT Now is also available through AlterNet. This allows brokers to participate in POSIT Now and have seamless access to POSIT Match, while receiving the net pricing they require in both trade execution venues.

        In 2007, as part of its continuous crossing suite, ITG launched POSIT VWAP. POSIT VWAP is a continuous volume weighted average price cross which will allow buyers and sellers to pair off anonymously at the day's closing VWAP price before the market open. The cross minimizes market impact and guarantees the VWAP price on all paired orders. The VWAP cross runs continuously between 8:00 AM Eastern Standard Time and 9:27 AM Eastern Standard Time.

BLOCKalert/POSIT Alert

        BLOCKalert was initially launched as POSIT Alert in the U.S. in 2005. In 2006, ITG formed a joint venture with Merrill Lynch for this block order crossing service in the U.S., BLOCKalert. In March 2007, BLOCKalert became a registered broker-dealer with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority. Separately, POSIT Alert was launched in Australia in 2007 and in Europe in 2008 and continues to be operated solely by ITG outside of the U.S. BLOCKalert in the U.S. and POSIT Alert outside the U.S., each powered by POSIT, leverages crossing opportunities in the trade systems of participating clients and has the ability to tap into trading opportunities before they enter the market. Each provides the convenience of negotiated crossing systems, along with broader liquidity and no information leakage.

        BLOCKalert and POSIT Alert scan uncommitted positions on client trading systems. When a crossing opportunity is detected, users of systems like Triton and ITG Channel are notified that an opportunity exists. If they elect to participate, their order is sent to POSIT Now for execution at the midpoint of the NBBO. BLOCKalert and POSIT Alert offer a way to tap into a vast reserve of hidden liquidity with no information leakage.

Post-Trade

Measurement & Analytics

ITG TCA

        ITG TCA (Transaction Cost Analysis) identifies, measures and analyzes trading costs and delivers daily results, thereby offering a window into the entire investment process and helping clients address best execution practices. ITG TCA assesses trading performance and implicit costs under various market conditions, so users can adjust trading strategies, reduce trading costs and boost fund performance. ITG TCA allows users to compare actual executed prices to user-selected benchmark prices in order to help assess trade execution quality. Over 30 benchmarks are available as part of the core product, including the VWAP, closing price, pre-trade midquote and last trade, as well as a number of standard reports. In addition, clients can work with ITG's consultants to customize analysis to their investment process, generate feedback, assess trading tactics and reduce slippage.

        In addition to the core ITG TCA web-based transaction cost tool, ITG TCA users can, for an additional fee, receive ITG's Peer Group Reports and Analysis, custom reports and consulting services.

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ITG TCA is available on a stand alone basis, as well as through Macgregor XIP, Triton and certain third party execution and order management systems. ITG TCA reports are available throughout the day from Triton. Transaction cost measurement is critical to controlling trading costs and has become a focus of the U.S. and international trading communities. ITG TCA also helps the investment process adhere to compliance standards. To accomplish this, ITG TCA aids in evaluating trading performance, as well as broker selection and oversight. It helps users identify and monitor implicit costs of trading, along with spread and price impact, through ITG's agency cost estimator model. Users can analyze relative trading performance against an extensive database of trades and a wide variety of reference prices.

ITG Fair Value

        ITG Fair Value is a service that helps mutual fund managers meet obligations to investors and regulators to fairly price their funds, and reduce the occurrence and costs of market timing. Over 70 money managers and fund administrators, covering approximately 600 mutual funds, use ITG Fair Value. ITG Fair Value provides adjustment coefficients for more than 49,000 securities across more than 50 markets globally. ITG Fair Value was developed to help our clients meet regulatory requirements and achieve greater control over volatile pricing and helps clients improve the ongoing fair value process. Covering all major global equity markets, ITG Fair Value supplies a monitoring report for each country, with information on universe coverage and historic performance. The information is updated daily and made available for client download shortly after the market closes.

Plexus Plan Sponsor Group Services

        ITG's Plexus Plan Sponsor Group offers plan sponsors, mutual funds, insurance companies and fund-of-fund managers an objective way to examine the trading process, from stock selection through implementation. By using a client's complete trade data set, the Plexus Sponsor Monitor and Fund Monitor services create an assessment of a manager's transaction costs. Quarterly or annual reports, supplemented by an on-line drill-down application, detail each manager's total execution costs, broker usage, relative trade performance and execution quality.

        Plexus Plan Sponsor Group also offers pre- and post-transition analytics, transition consulting and fiduciary support, providing a trusted, independent relationship to assist plan sponsors in meeting their fiduciary obligations. Directed brokerage, commission recapture and soft dollar reviews are additional services that assist clients in monitoring compliance and evaluating programs and policies. Plexus Plan Sponsor Group is a registered investment advisor.

Post-Trade Processing

ITG Trade Ops

        ITG Trade Ops is a consolidated, outsourced service for global trade matching and settlement notification that is automated, integrated, scalable and exceptions-oriented. With plug-and-play connectivity to the industry's post-trade utilities, as well as support for multiple, flexible settlement communications methods and a real-time process monitor, ITG Trade Ops can significantly increase the efficiency of a back-office.

        ITG Trade Ops helps investment managers reduce the time they spend checking trades and managing complex utility systems and interfaces so they can put more focus on growing their business. ITG Trade Ops is currently available on a standalone basis and will be an integrated component of ITG Triton X. Revenues are generated from licensing and message-based fees.

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Non-U.S. Operations

        ITG has established a strong and growing presence in key financial centers around the world to serve the needs of global institutional investors. In addition to its New York headquarters and its Boston, Chicago and Los Angeles offices in the U.S., ITG has an additional North American office in Toronto, Canada. In Europe, ITG has offices in London and Dublin, and supports European business through a development office in Tel Aviv. In the Asia Pacific region, ITG has a presence in Sydney, Melbourne, Hong Kong and Tokyo. Local representation in regional markets provides an important competitive advantage for ITG.

Canadian Operations

        ITG Canada was founded in 2000 and functions as an institutional broker-dealer focusing on Canadian equities. ITG Canada is a leading provider of best execution tools and expertise throughout the investment cycle from portfolio creation, pre-trade cost and risk estimation, to trade execution, and post-trade analysis. In Canada, ITG provides agency/portfolio trading services, ITG Algorithms, Triton and ITG Channel, ITG Opt, ITG Logic, ITG Fair Value, risk modeling, ITG TCA and AX, a spread-based trading application. ITG Canada also operates an interlisted securities arbitrage trading desk. ITG Canada customers include asset/investment managers, broker-dealers and hedge funds. Connectivity is available through ITG Net.

        ITG Canada launched MATCH Now in July 2007 as a marketplace for Registered Canadian Investment Dealers and their clients to trade Canadian listed equities. MATCH Now combines frequent call matches and continuous execution opportunities within a fully confidential dark book to offer better execution to institutional, proprietary and retail order flow. Orders can match passively or sweep through MATCH Now on route to any public marketplace, with automatic trade price improvement over the Canadian NBBO.

International Operations

Australia

        In 1997, ITG launched ITG Australia, an institutional brokerage firm specializing in execution and analytics for Australian equities. ITG provides institutional investors in Australia with a range of ITG's products and services including: trade execution through POSIT Match, POSIT Alert and ITG Algorithms; execution management through Triton, portfolio attribution through market data and customized benchmarking; and pre-and post trade analysis through ITG Opt, ITG TCA and ITG Logic.

Europe

        Established in 1998, ITG Europe was founded to provide institutional investors in European equities with a complete set of tools and services to improve investment transaction costs, risk management, access to liquidity and optimization of portfolio construction. ITG Europe operates POSIT Match, POSIT Now and POSIT Alert, which currently offer the opportunity to trade in Austrian, Belgian, Danish, Dutch, Finnish, French, German, Irish, Italian, Norwegian, Portuguese, Spanish, Swedish, Swiss, and UK equities. Other execution systems and services available in Europe include ITG Algorithms, Triton, ITG Channel, Macgregor XIP, ITG Compliance, ITG Trade Ops and ITG's trading desk services. ITG's suite of analytical products and services, with a focus primarily on ITG TCA, Plexus Alpha Capture, ITG Fair Value and ITG Logic, are also available in Europe. Electronic connectivity options include ITG Net, FIX-protocol and other customized solutions.

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Hong Kong

        In 2001, ITG formed ITG Hong Kong, an institutional broker-dealer focused on developing and applying ITG's cost-saving technologies across the Asian markets. ITG Hong Kong manages global trading into 10 markets across the region (Hong Kong, Japan, Singapore, Taiwan, Korea, Thailand, Malaysia, the Philippines, Indonesia and China). Execution services are provided via an experienced trading services team and also through ITG Algorithms and Triton. POSIT Match is run for Hong Kong and offshore Japan trades. Pre- and post-trade analysis tools, including ITG TCA and ITG Logic are also available for trade-cost measurement across all Asian markets.

Japan

        In early 2005, ITG Japan, a Bermuda-registered company, established a branch office in Tokyo. Following the issuance of a dealer's license from the Japanese Financial Services Agency ("FSA"), ITG initiated limited trading operations in September 2005. ITG executes offshore Japanese trades via its Hong Kong office. Domestic Japanese trades were not being undertaken in 2007, pending the development of an integrated trading solution for the onshore Japanese market.

Regulation

        Certain of our U.S. and non-U.S. subsidiaries are subject to various securities regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. In the U.S., the Securities and Exchange Commission ("SEC") is the federal agency responsible for the administration of the federal securities laws, with the regulation of broker-dealers primarily delegated to self-regulatory organizations ("SROs"), principally the Financial Industry Regulatory Authority ("FINRA") (f/k/a National Association of Securities Dealers, Inc., the New York Stock Exchange and other national securities exchanges). In addition to Federal and SRO oversight, securities firms are also subject to regulation by state securities administrators in those states in which they conduct business. Furthermore, our non-U.S. subsidiaries are subject to regulation by central banks and regulatory bodies in those jurisdictions where each subsidiary is authorized to do business, as further discussed below. The SROs, central banks and regulatory bodies conduct periodic examinations of our broker-dealer subsidiaries in accordance with the rules they have adopted and amended from time to time.

        ITG's principal regulated subsidiaries and BLOCKalert, a 50% owned joint venture, are discussed below. The principal self-regulator of all our U.S. broker-dealers and our joint venture is FINRA.

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ITG Inc. is a U.S. broker-dealer registered with the SEC, FINRA, National Futures Association ("NFA"), NYSE Arca, Inc., ("ARCA") (f/k/a) Pacific Stock Exchange, International Stock Exchange ("ISE"), CBOE Stock Exchange Inc. ("CBSX"), Ontario Securities Commission ("OSC"), all 50 states, Puerto Rico and the District of Columbia.



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ITG Derivatives (f/k/a) RedSky Financial, LLC is a U.S. broker-dealer registered with the SEC, CFTC, NFA, FINRA, ISE, ARCA and 20 states.



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AlterNet is a U.S. broker-dealer registered with the SEC, FINRA and 12 states.



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BLOCKalert is a U.S. broker-dealer registered with the SEC, FINRA and New York State.



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Blackwatch Brokerage, Inc. ("Blackwatch") is a U.S. broker-dealer registered with the SEC, FINRA and five states.



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Plexus Plan Sponsor Group, Inc. is registered with the SEC as an investment adviser.



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ITG Canada refers to ITG Canada Corp. ITG Canada is a Canadian broker-dealer registered as an investment dealer with the Investment Dealers' Association ("IDA"), the OSC and five other

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Provincial securities authorities (Alberta Securities Commission, British Columbia Securities Commission, Manitoba Securities Commission, New Brunswick Securities Commission, and Saskatchewan Financial Services Commission). ITG Canada is a member of the Toronto Stock Exchange ("TSX"), TSX Venture Exchange, Pure Trading and the Canadian Trading and Quotation System Inc. ("CNQ").

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ITG Australia, an Australian broker-dealer, is a participating organization of the Australian Securities Exchange Limited ("ASX") and a holder of an Australian Financial Services License issued by the Australian Securities and Investment Commission. ITG Australia's principal regulators are the ASX and the Australian Securities & Investments Commission.



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ITG Europe refers to Investment Technology Group Limited ("ITGL") and/or its wholly owned subsidiary Investment Technology Group Europe Limited ("ITGEL"). ITGL and ITGEL are authorized by the Irish Financial Services Regulatory Authority ("IFSRA") under the European Communities (Markets in Financial Instruments) Regulations 2007. ITGL is a member of the London Stock Exchange ("LSE"), Deutsche Boerse and Euronext and operates POSIT crossing systems in Europe as MiFID compliant multilateral trading facilities. ITGEL's London Branch is regulated by the Financial Services Authority for the conduct of investment business in the United Kingdom.



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ITG Hong Kong refers to ITG Hong Kong Limited and/or its affiliates ITG Securities (Asia) Limited ("ITG Asia") and Hoenig (Far East) Limited ("HFE"). ITG Hong Kong is a participating organization of the Hong Kong Stock Exchange and a holder of a dealer's license issued by the Securities and Futures Commission of Hong Kong ("SFC"), with the SFC acting as its principal regulator.



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ITG Japan, refers to ITG Japan Ltd., an institutional broker-dealer operation in Japan. ITG Japan is regulated by the Financial Services Agency of Japan.

        Broker-dealers are subject to regulations covering all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of clients' funds and securities, capital structure of securities firms, record-keeping and conduct of directors, officers and employees. Additional legislation, changes in the interpretation or enforcement of existing laws and rules may directly affect the mode of operation and profitability of broker-dealers. The SEC, SROs, state securities commissions and foreign regulatory authorities may conduct administrative proceedings, which can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, its officers or employees. The principal purpose of regulation and discipline of broker-dealers is the protection of clients and the securities markets, rather than the protection of creditors and stockholders of broker-dealers.

        ITG Inc., AlterNet, Blackwatch and ITG Derivatives are required by law to belong to the Securities Investor Protection Corporation ("SIPC"). In the event of a U.S. broker-dealer's insolvency, the SIPC fund provides protection for client accounts up to $500,000 per customer, with a limitation of $100,000 on claims for cash balances. ITG Canada is required by Canadian law to belong to the Canadian Investors Protection Fund ("CIPF"). In the event of a Canadian broker-dealer's insolvency, CIPF provides protection for client accounts up to CAD$1 million per customer. Investment Technology Group Limited and Investment Technology Group Europe Limited are regulated by the Irish Financial Services Authority and are required to be members of the Investor Compensation Protection Schemes which provides compensation to retail investors in the event of certain stated default by an investment firm. As ITG Europe does not have any retail investors, we pay only the minimum mandatory membership fee that applies to all firms regardless of whether they have retail investors. ITG Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission ("SFC"). The SFC operates the Investor Compensation Fund ("ICF") which provides compensation to retail investors. The source of the funds for the ICF is an Investor Compensation Levy on exchange-

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traded product transactions which is payable by buyers and sellers of securities. As ITG Hong Kong does not have any retail investors, it is not required by law to contribute to the ICF or to hold any insurance coverage for its clients. ITG Australia Limited is regulated by the Australian Securities & Investments Commission ("ASIC").

Regulation ATS

        From the formation of the POSIT Joint Venture until the adoption of Regulation ATS, POSIT operated under a "no-action" letter from the SEC staff which indicated that it would not commence an enforcement action if POSIT were operated without registering as an exchange. We are currently operating POSIT as part of our broker-dealer operations in accordance with Regulation ATS. Accordingly, POSIT is not registered with the SEC as an exchange.

Net Capital Requirement

        ITG Inc., AlterNet, Blackwatch and ITG Derivatives are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital.

        ITG Inc. has elected to use the alternative method permitted by Rule 15c3-1, which requires that ITG Inc. maintain minimum net capital equal to the greater of $1.0 million or 2% of aggregate debit balances arising from customer transactions. AlterNet, ITG Derivatives and Blackwatch have elected to use the basic method permitted by Rule 15c3-1, which requires that they maintain minimum net capital equal to the greater of $100,000 for AlterNet and ITG Derivatives and $5,000 for Blackwatch, or 6²/3% of aggregate indebtedness.

        As of May 1, 2007, ITG Inc. migrated from a fully disclosed introducing broker-dealer to a self-clearing broker-dealer and its minimum net capital requirement as defined under Rule 15c3-1 increased to $1.0 million from $250,000.

        For further information on our net capital position, see Note 18, "Net Capital Requirement", to the consolidated financial statements.

Research and Product Development

        We devote a significant portion of our resources to the development and improvement of technology-based services. Important aspects of our research and development effort include enhancements of existing software, the ongoing development of new software and services and investment in technology to enhance our efficiency. In our consolidated statements of income, we expensed research and development costs amounting to $34.3 million, $29.9 million and $26.1 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Employees

        As of December 31, 2007, we employed 1,218 personnel globally, of which our U.S. Operations, our Canadian Operations and our International Operations employed 919, 67 and 232 personnel, respectively.

Availability of Public Reports

        Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available without charge on our web site at http://investor.itg.com. You may also obtain copies of our reports without charge by writing to: Investment Technology Group, Inc., 380 Madison Avenue, New York, NY 10017, Attn: Investor Relations.

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Item 1A.    Risk Factors

Certain Factors That May Affect Our Results of Operations

        While our management's long-term expectations are optimistic, we face risks or uncertainties that may affect our results of operations. The following conditions, among others, should be considered in evaluating our business and growth outlook.

Decreases in Trading Volumes, Securities Prices and Commission Rates

        Declines in the volume of securities trading, market liquidity or commission rates generally result in lower revenues from our commission generating products. In addition, our trading commissions outside the U.S. and Canada are based on the value of transactions (rather than volume based), which would be adversely affected by securities' price declines. Our profitability would be adversely affected by a decline in trading revenues because a significant portion of our costs are fixed. For these reasons, decreases in trading volume or securities prices could have a material adverse effect on our operating results. Over the last year, the institutional equities market in the U.S. has also experienced continued pricing pressure on commission revenues. We anticipate a continuation of the weak commission pricing environment in the immediate future.

Financial Market Conditions and General Economic and Political Conditions

        The demand for our securities brokerage and related services is directly affected by factors such as economic and political conditions that may lead to decreased trading activity and prices in the securities markets generally. The future economic environment may be subject to periodic economic downturns, due to recessions, natural disasters, pandemics, geopolitical unrest, war, acts of terrorism or a combination of these or other factors in regions where we do business or otherwise, which could result in reduced trading volumes and prices and materially harm our business, financial condition and operating results. Our business is materially affected by conditions in both domestic and foreign financial markets.

Regulation

General

        The securities markets and the brokerage industry in which we operate are subject to extensive, evolving regulation in the U.S. and other jurisdictions in which we conduct business. We face the risk of significant intervention by regulatory authorities in all jurisdictions in which we conduct business. In our case, the impact of regulation extends beyond "traditional" areas of securities regulation, such as disclosure and prohibitions on fraud and manipulation by market participants, to the regulation of the structure of markets.

        In the future, we may become subject to new regulations or changes in the interpretation or enforcement of existing regulations, which may adversely affect our business. We cannot predict the extent to which any future regulatory changes can affect our business.

Regulation ATS

        Before Regulation ATS went into effect on April 21, 1999, we operated POSIT pursuant to a "no-action" letter from the SEC staff which stated that it would not commence an enforcement action if POSIT were operated without registering as an exchange. We are currently operating POSIT Match and POSIT Now as part of our broker-dealer operations in accordance with Regulation ATS. Accordingly, neither POSIT Match nor POSIT Now is registered with the SEC as an exchange. There can be no assurance that the SEC will not in the future seek to impose more stringent regulatory requirements on the operation of ATSs such as POSIT Match and POSIT Now. There can be no

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assurance that Congress will not enact additional legislation applicable to alternative trading systems. In addition, certain of the securities exchanges have actively sought to have more stringent regulatory requirements imposed upon ATSs. Similarly, our non-U.S. POSIT systems are subject to various regulations in the jurisdictions in which they operate, changes to which can have a negative impact on each POSIT system's ability to operate.

MiFID

        Prior to November 1, 2007, ITG operated POSIT as part of its broker operations in accordance with Standards for Alternative Trading Systems issued by the Committee of European Securities Regulators as adopted by the Irish Financial Regulator. On November 1, 2007, the Markets in Financial Instruments Directive ("MiFID") came into effect in Ireland, the United Kingdom and a number of other European Union member states. POSIT is now authorized by the Irish Financial Regulator as a multilateral trading facility pursuant to MiFID.

        In addition, ITG's brokerage operations in Europe must now be conducted in accordance with MiFID, which introduces new or amended rules in relation to trade reporting, transaction reporting, order execution, order handling, record keeping, client classification, client communication, conflict of interest management, use of dealing commission, inducements, outsourcing, risk management and marketing. The Committee of European Securities Regulators may continue to increase MiFID's scope and coverage. Failure to comply with MiFID and any amendments thereto can result in regulatory penalties and the loss of clients, which could have a material adverse effect on our performance.

Net Capital Requirement

        Each of our broker-dealer subsidiaries is subject to regulatory capital requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. The failure by any of these subsidiaries to maintain its required regulatory capital may lead to suspension or revocation of its broker-dealer registration and its suspension or expulsion by U.S. or international regulatory bodies, and ultimately could require its liquidation. Historically, all regulatory capital needs of our U.S. and International broker-dealers have been provided by cash from operations. While we believe that cash flows from operations will continue to provide our broker-dealers with sufficient regulatory capital, we have a $25 million credit facility which can be accessed to supplement our existing regulatory capital, as needed.

Soft Dollars

        Increased scrutiny placed upon soft dollar practices in light of the recent SEC and UK Financial Services Authority attention to this area, may cause certain clients to further restrict their use of soft dollars, which could, in the aggregate, materially impact our business.

        In the U.S., the provision of research to investment managers in consideration of commissions is conducted in conjunction with the investment manager's reliance upon the safe harbor provided under Section 28(e) of the Exchange Act. The safe harbor protections of Section 28(e) apply equally to the provision of independent third-party research, as well as proprietary research.

        The SEC from time to time has been urged by our competitors and others to seek Congressional reconsideration of Section 28(e) or alter its scope, including modifying the nature of Section 28(e) from a safe harbor to a mandatory regime for the use of soft dollars applicable to all investment advisors (including those not registered with the SEC). On July 24, 2006, the SEC issued an interpretive release modifying the scope of brokerage and research services and client commission arrangements under Section 28(e) (the "SEC Interpretive Release"), which became effective on January 24, 2007.

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        In the UK, the use of soft dollars (known as "soft commissions") has been restricted via regulations and guidance issued by the national financial regulator, the Financial Services Authority ("UK FSA Regulations"). The UK FSA Regulations, effective as of January 1, 2006, restrict investment managers' use of directing commissions to the purchase of execution and research services, and further limit the type of services that may be the subject of a soft dollar arrangement. Further, investment managers in the UK, like managers in the U.S., must now give customers periodic disclosures setting out how commissions have been spent, and what services have been obtained.

        From time to time, other regulatory or governmental entities, as well as industry groups, have issued statements, reports and best practices regarding soft dollars. Any regulatory changes or industry best practices that narrow the definition of research or services provided in Section 28(e) and UK FSA Regulations, respectively, limit the scope, or modify the nature, of the Section 28(e) safe harbor, further restrict investment managers' use of directing commissions to the purchase of services under UK FSA Regulations or impose onerous record-keeping, reporting or other obligations regarding soft dollar and directed brokerage arrangements could have a material adverse effect on our operations.

Competition

        The financial services industry generally, and the securities brokerage business in which we engage in particular, is extremely competitive, and we expect it to remain so. The automated trade execution and analysis services offered by us compete with services provided by leading brokerage firms, transaction processing firms, providers of electronic trading and trade order management systems, and financial information services. Our extensive suite of products does not directly compete with a particular firm, however, each of our products competes with various firms. On the pre- and post-trade side, our products compete with several broker dealer-affiliated and independent companies. On the execution side, our POSIT suite competes with various national and regional securities exchanges and execution facilities, ATSs and ECNs for trade execution services. There has been a recent proliferation of ATSs in the U.S. market. These include traditional ATSs, as well as sell side consortiums and exchange-sponsored crossing systems. In addition, the number of direct market access and algorithmic trading products that compete with our suite of products offered as ITG Algorithms, continues to increase. Lastly, our front-end trading systems, XIP, Triton, Radical and ITG Matrix compete with an array of order and execution management vendors, most of which are not affiliated with broker-dealers, which may be a factor for customers when choosing order and execution management systems. Many of our competitors have substantially greater financial, technical, marketing and other resources which, among other things, enable them to compete with the services we provide on the basis of price, and a willingness to commit their firms' capital to service a client's trading needs on a principal, rather than on an agency, basis. Many of them offer a wider range of services, have broader name recognition and have larger customer bases than we do. Outside the U.S., some of our competitors have long-standing, well-established relationships with their clients, and also hold dominant positions in their trading markets. We believe that our services compete on the basis of access to liquidity, transaction cost and market impact cost reduction, timeliness of execution and probability of trade completion. Although we believe that our products and services have established certain competitive advantages, our ability to maintain these advantages will require continued enhancements to our products, investment in the development of our services, additional marketing activities and customer support services. There can be no assurance that we will have sufficient resources to continue to make this investment, that our competitors will not devote significantly more resources to competing services or that we will otherwise be successful in maintaining our market position.

Clearance and Settlement Risk

        In May 2007, our U.S. brokerage operations became a self-clearing broker-dealer. As a clearing member firm in the U.S., Hong Kong and Australia, we have to finance our clients' unsettled positions

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from time to time and we could be held responsible for the defaults of our clients. Although we regularly review credit exposure, default risk may arise from events or circumstances that may be difficult to detect or foresee. In addition, concerns about, or a default by, one institution could lead to significant liquidity problems, losses or defaults by other institutions, which in turn could adversely affect ITG.

Credit Risk

        We are exposed to credit risk from third parties that owe us money, securities, or other obligations, including our customers and trading counterparties. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Substantially all of the clearing and depository operations for our broker-dealer subsidiaries are performed pursuant to clearing agreements with their clearing brokers, who review the credit risk of trading counterparties, as deemed necessary. Volatile securities markets, credit markets and regulatory changes increase our exposure to our customer's credit profiles, which could adversely affect our financial condition and operating results.

Interlisted Arbitrage Trading

        A portion of our Canadian revenues is derived from U.S.- Canada interlisted arbitrage trading in which we act as principal. As a result of this trading, we may incur losses relating to the purchase or sale of interlisted securities for our own account. Although we attempt to close out all of our arbitrage positions immediately, if for any reason we are unable to do so, we bear the risk of market fluctuations and may incur losses due to changes in the prices of such securities.

Rapid Changes in Technology

        Due to the high demand for technology-based services in the securities industry, we are subject to rapid technological change and evolving industry standards. Also, customer demands become greater and more sophisticated as the dissemination of information to customers increases. If we are unable to anticipate and respond to the demand for new services, products and technologies in a timely and cost-effective manner and to adapt to the technological advancements and changing standards, we will be less able to compete effectively, which could have a material adverse effect on our business. Moreover, the development of technology-based services is a complex and time-consuming process. New products and enhancements to existing products can require long development and testing periods. Significant delays in new product releases or significant problems in creating new products could negatively impact our revenues.

Insufficient System Capacity or System Failures

        Our business relies heavily on the computer and communications systems supporting our operations. Moreover, our corporate headquarters and largest concentration of employees and technology is in the New York metropolitan area. If a business system disruption were to occur, especially in New York, or we were unable to execute our contingency plans, it could have a material effect on our business. Peak trading times and times of unusual market volatility could cause our systems to operate slowly or even fail for periods of time, as could general power or telecommunications failures, natural disasters or other business disruptions, despite the contingency plans we have in place. Moreover, we have varying levels of contingency plan coverage among our non-U.S. subsidiaries. The presence of computer viruses can also cause failure of our systems. As our business expands, we will need to expand our systems to accommodate an increasing volume of transactions across a larger client base and more geographical locations. If any of our systems do not operate properly or are disabled, we could incur financial loss, liability to clients, regulatory intervention or reputational damage. System failure or degradation could lead our customers to file

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formal complaints with industry regulatory organizations, initiate regulatory inquiries or proceedings, file lawsuits against us, trade less frequently through us or cease doing business with us.

Investment in Infrastructure and Research

        In connection with our research and product development activities, as well as capital expenditures to improve other aspects of our business, we incur substantial expenses that do not vary directly, at least in the short term, with fluctuations in securities transaction volumes and revenues. To ensure that we have the capacity to process projected increases in transaction volumes, we have historically made substantial capital, operating and research expenditures in advance of such projected increases, including during periods of low transaction volumes. In the event of a material reduction in trading volumes and/or revenues, we may not be able to reduce such expenses quickly and, as a result, we could experience reduced profitability or losses. In the event that such predicted growth in transaction volumes does not occur or we are not able to successfully implement and monetize our capital and research projects, including by failing to accurately forecast the demand for new products, the expenses related to such investments could cause reduced profitability or losses.

Dependence on Major Customers

        Our customers may discontinue use of our trading services at any time. The loss of any significant customers could have a material adverse effect on our results of operations.

        The chart below sets forth our dependence on our three largest clients individually, as well as on our ten largest clients in the aggregate, expressed as a percentage of total revenues:

	% of Total Consolidated Revenue
	2007		2006		2005
Largest customer	6.1	%	3.2	%	6.6	%
Second largest customer	3.6	%	2.0	%	2.7	%
Third largest customer	2.3	%	1.9	%	2.6	%
Ten largest customers	24.5	%	16.9	%	25.2	%

Employee Misconduct or Errors

        Employee misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of customers or improper use of confidential information. Such misconduct could result in losses, litigation or other material adverse effects on the Company.

        Similarly, employee errors in recording or executing transactions for customers can cause us to enter into transactions that customers may disavow and refuse to settle. These transactions expose us to risk of loss, which can be material, until we detect the errors in question and unwind or reverse the transactions. As with any unsettled transaction, adverse movements in the prices of the securities involved in these transactions before we unwind or reverse them can increase this risk.

Dependence on Third Party Suppliers for Key Services

        We depend on a number of third parties to supply elements of our trading systems, computers, market data, communication infrastructure, other equipment and related support and maintenance. We cannot be certain that any of these providers will be able to continue to provide these services in an efficient and cost-effective manner or that they will be able to meet our expanding needs. If our suppliers fail to meet their obligations and we are unable to make alternative arrangements for the

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supply of these services, we may fail, in turn, to meet our obligations to our customers and our business, financial condition and operating results could be materially harmed.

Dependence on Proprietary Intellectual Property

        Our success is dependent, in part, upon our proprietary intellectual property. We generally rely upon patents, copyrights, trademarks and trade secrets to establish and protect our rights in our proprietary technology, methods, products and services. We cannot assure that any of the rights granted under any patent, copyright or trademark that we may obtain will protect our competitive advantages. A third party may still try to challenge, invalidate or circumvent the protective mechanisms that we select. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the U.S.

        There can be no assurance that we will be able to ensure our proprietary intellectual property from improper disclosure or that others will not develop technologies that are similar or superior to our technology. Violations of our intellectual property by third parties could have an adverse effect on our competitiveness,

Risks of Infringement

        In the past several years, there has been a proliferation of patents applicable to the computer and financial services industries. Under current law, U.S. patent applications remain secret for 18 months and may, depending upon where else such applications are filed, remain secret until issuance of a patent. In light of these factors, it is not always possible to determine in advance whether any of our products or services may infringe the present or future patent rights of others. We believe that factors such as technological and creative skills of our personnel, new product developments, frequent product enhancements, name recognition and reliable product maintenance are essential to establishing and maintaining a state-of-the-art technological system. It is likely that from time to time, we will receive notices from others of claims or potential claims of intellectual property infringement or we may be called upon to defend a joint venture partner, customer, vendee or licensee against such third party claims. Responding to these kinds of claims, regardless of merit, could consume valuable time, result in costly litigation or cause delays, all of which could have a material adverse effect on us. Responding to these claims could also require us to enter into royalty or licensing agreements with the third parties claiming infringement on terms that could have a material impact on our profitability.

Acquisitions and Strategic Relationships

        Over the last several years, we have undertaken several strategic acquisitions, including the acquisitions of Macgregor, Plexus and RedSky, as well as various strategic relationships. We intend to continue to pursue strategic acquisitions and strategic relationships. Acquisitions entail numerous risks, including but not limited to difficulties in valuing the acquired businesses, difficulties in integrating acquired products and services, operations and personnel, potential assumption of unknown material liabilities of acquired companies and potential loss of clients or key employees of acquired companies. Strategic relationships may be important to our business prospects and we may not be able to successfully develop or maintain such relationships. If we are unable to successfully complete acquisitions and integrate the acquired businesses, suffer a material loss due to an acquired business or fail to develop or maintain strategic relationships, it may have a material effect on our operating results.

20

Item 1B.    Unresolved Staff Comments

        None

Item 2.    Properties

U.S. Operations

        Our principal offices are located at 380 Madison Avenue in New York, New York. We currently lease approximately 101,000 square feet of office space on several floors pursuant to coterminous leases expiring in January 2014.

        We also have an office at 44 Wall Street in New York, New York, where we occupy approximately 15,800 square feet pursuant to a lease expiring in April 2012.

        We maintain a research, development, sales and technical support services facility in Culver City, California where we occupy approximately 78,000 square feet of office space. Approximately 24,000 square feet of office space is located at 600 Corporate Pointe. An additional 54,000 square feet of office space is located at 400 Corporate Pointe. Both leases expire in December 2016.

        We have regional offices in Boston, Massachusetts where we occupy approximately 58,800 square feet of office space pursuant to two leases expiring in April 2010 and May 2011, respectively.

        We have an additional regional office in Chicago, Illinois where we occupy approximately 10,300 square feet. The lease expires in October 2012.

        We maintain an office in Rye Brook, New York where we occupy nearly 20,600 square feet of office space. The lease agreement expires in December 2010.

        We have a research facility in Madrid, Spain, where we occupy nearly 4,100 square feet of office space. We lease the space pursuant to a five-year lease agreement that expires in May 2009. This research facility serves our U.S Operations.

Canadian Operations

        ITG Canada has offices in Toronto where we occupy approximately 15,100 square feet of office space pursuant to a lease expiring in December 2016. In addition, pursuant an amendment to our master lease agreement, commencing in December 2008, ITG Canada will be expanding its office space in Toronto by approximately 4,500 square feet.

International Operations

        ITG Europe has offices in Dublin, Ireland and London, England where we occupy approximately 4,000 and 7,000 square feet of office space, respectively. We lease the Dublin space pursuant to a lease agreement that expires in July 2018, and we lease the London space pursuant to a lease that expires in September 2013.

        ITG Australia has trading facilities in Melbourne and Sydney, where we occupy approximately 7,300 and 4,200 square feet of office space, respectively. We lease the Sydney space pursuant to a lease agreement that expires in February 2010 and are currently leasing the Melbourne space on a month to month basis while we finalize the terms of a lease extension for a lease that expired in November 2007.

        Our Hong Kong operations occupy approximately 7,200 square feet of office space in Hong Kong pursuant to a lease that expires September 2009.

        ITG Japan occupies approximately 3,100 square feet of office space. The lease agreement expires in March 2009.

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        We have a research facility in Herzelya Pituach, Israel where we occupy approximately 13,500 square feet of office space. We lease the Israel space pursuant to a one-year lease agreement that expires in December 2008.

Item 3.    Legal Proceedings

        On November 21, 2006, Liquidnet, Inc. ("Liquidnet") filed a lawsuit in the United States District Court for the District of Delaware (Liquidnet, Inc. v. ITG Inc. et al., 06-CV-703 (D.Del)) alleging that ITG Inc. and The Macgregor Group, Inc. (collectively, "ITG") infringe one or more claims of U.S. Patent No. 7,136,834 (the "'834 Patent") through its "Channel ITG" and the "Macgregor XIP" products. That patent had been issued on November 14, 2006. On January 8, 2007, Liquidnet filed a First Amended Complaint in the District of Delaware naming Investment Technology Group, Inc., ITG Solutions Network, Inc. and The Macgregor Group, Inc. as defendants. After determining that Liquidnet did not own the '834 Patent (the patent was owned by Liquidnet's corporate parent Liquidnet Holdings, Inc.), on January 23, 2007, Investment Technology Group, Inc., ITG Inc., ITG Solutions Network, Inc. and The Macgregor Group, Inc. sued Liquidnet Holdings, Inc. in the United States District Court for the Southern District of New York seeking a declaratory judgment that the '834 Patent was not infringed, was invalid and was unenforceable. On January 24, 2007, ITG advised Liquidnet that if Liquidnet did not withdraw its Delaware lawsuit against ITG, ITG would move to dismiss that lawsuit for lack of standing. On January 26, 2007, Liquidnet dismissed its Delaware lawsuit. On February 13, 2007, Liquidnet Holdings Inc. filed its answer, affirmative defense and counterclaims, alleging infringement of the '834 Patent. ITG's declaratory judgment action will now proceed in the Southern District of New York. On October 12, 2007, the parties appeared before the court for a pretrial scheduling conference at which an initial plan for discovery was reached. On January 10, 2008, ITG filed a motion for permission to file an amended complaint. The amended complaint alleges that Liquidnet committed fraud against the U.S. Patent and Trademark Office by, among other things, failing to disclose that Liquidnet derived its patent from work done in 1997-1998 by third parties. The amended complaint also contains an additional cause of action against Liquidnet for tortious interference with prospective business relations. On February 13, 2008, ITG's motion was granted.

        It is our position that ITG is not infringing any valid patent claim of the '834 Patent and that Liquidnet's claims are without merit. We plan to vigorously pursue our declaratory judgment action and claim for tortious interference. However, intellectual property disputes are subject to inherent uncertainties and there can be no assurance that this lawsuit will be resolved favorably to us or that the lawsuit will not have a material adverse effect on us.

Item 4.    Submission of Matters to a Vote of Security Holders

        There were no matters submitted to a vote of security holders during the fourth quarter ended December 31, 2007.

22

PART II

Item 5.    Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Stock Data

        Our common stock trades on the NYSE under the symbol "ITG".

        The following table sets forth, for the periods indicated, the range of the high and low closing sales prices per share of our common stock as reported on the NYSE.

	High	Low
2006:
First Quarter	51.20	34.97
Second Quarter	58.01	44.11
Third Quarter	52.59	42.91
Fourth Quarter	50.02	36.91
2007:
First Quarter	47.86	37.83
Second Quarter	44.02	36.74
Third Quarter	45.30	36.58
Fourth Quarter	48.51	39.44

        On February 15, 2008, the closing sales price per share for our common stock as reported on the NYSE was $46.26. On February 15, 2008, we believe that our common stock was held by approximately 19,076 stockholders of record or through nominees in street name accounts with brokers.

        On July 22, 2004, our Board of Directors authorized the repurchase of up to 2.0 million shares of our common stock. The authorization, which had no expiration date, was publicly announced as part of our 2004 Annual Report on Form 10-K filed on March 15, 2005. The July 22, 2004 authorization was reaffirmed by our Board of Directors on August 6, 2007.

        During 2007, we repurchased approximately 1.3 million shares of our common stock at a cost of approximately $50.3 million, which was funded from our available cash resources. These shares were purchased under the above authorization whereby our Board of Directors authorized management to use its discretion to purchase an agreed-upon maximum number of shares of common stock in the open market or in privately negotiated transactions.

        The following table sets forth our share repurchase activity during 2007, including the total number of shares purchased, the average price paid per share, the number of shares repurchased as part of a publicly announced plan or program, and the number of shares yet to be purchased under the plan or program.

23

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
From: January 1, 2007
To: July 31, 2007	—		—	—	2,000,000
From: August 1, 2007
To: August 31, 2007	669,510		38.34	669,510	1,330,490
From: September 1, 2007
To: September 30, 2007	93,800		41.11	93,800	1,236,690
From: October 1, 2007
To: October 31, 2007	4,563		41.90	4,563	1,232,127
From: November 1, 2007
To: November 30, 2007	285,700		40.37	285,700	946,427
From: December 1, 2007
To: December 31, 2007	199,022		45.61	199,022	747,405
Total	1,252,595	$	40.18	1,252,595

        Our dividend policy is to retain earnings to finance the operations and expansion of our businesses. We do not anticipate paying any cash dividends on our common stock at this time.

Performance Graph

        The following line graph compares the total cumulative stockholder return on our common stock against the cumulative total return of the Russell 2000 index and the mean of the NASDAQ Other Finance Index and the AMEX Securities Broker/Dealer Index, for the five-year period ended December 31, 2007.

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Item 6.    Selected Financial Data

        The selected consolidated statements of income data and the consolidated statements of financial condition data presented below as of and for each of the years in the five-year period ended December 31, 2007, are derived from our consolidated financial statements. Such selected financial data should be read in connection with the consolidated financial statements contained in this report.

	Year Ended December 31,
	2007			2006			2005			2004			2003
Consolidated Statements of Income Data: ($ in thousands, except per share amounts)
Total revenues	$	730,999		$	599,484		$	408,161		$	334,486		$	333,992
Total expenses		542,131			437,520			299,065			267,894			264,291
Income before income tax expense		188,868			161,964			109,096			66,592			69,701
Income tax expense		77,761			64,041			41,410			25,609			27,748
Net income	$	111,107		$	97,923		$	67,686		$	40,983		$	41,953
Basic earnings per share	$	2.52		$	2.26		$	1.61		$	0.96		$	0.89
Diluted earnings per share	$	2.48		$	2.21		$	1.60		$	0.96		$	0.89
Basic weighted average number of common shares outstanding (in millions)		44.0			43.4			42.2			42.8			47.0
Diluted weighted average number of common shares outstanding (in millions)		44.8			44.3			42.4			42.8			47.0
Consolidated Statements of Financial Condition Data: ($ in thousands, except per share amounts)
Total assets	$	2,100,887		$	1,462,312		$	1,016,334		$	612,458		$	649,848
Total stockholders' equity	$	704,295		$	608,034		$	462,306		$	370,501		$	361,303
Other Selected Financial Data:(1)
Revenues per trading day by U.S. Operations (in thousands)	$	2,175		$	1,896		$	1,255		$	1,031		$	1,086
Revenues per trading day by Canadian Operations (in thousands)	$	296		$	219		$	135		$	113		$	90
Revenues per trading day by International Operations (in thousands)	$	441		$	273		$	230		$	183		$	149
Shares executed per trading day by U.S. Operations (in millions)	$	195		$	153		$	105		$	82		$	81
Average number of employees		1,131			1,000			673			627			617
Return on average stockholders' equity		16.7	%		17.2	%		16.6	%		11.5	%		11.5	%
Book value per share	$	16.20		$	13.88		$	10.81		$	8.83		$	8.08
Tangible book value per share	$	5.76		$	3.95		$	6.39		$	6.71		$	6.25
Price to earnings ratio using diluted earnings per share		19.2			19.4			22.2			20.9			18.1

(1)

Certain other selected financial data has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP"). Management uses this data in its analysis of the Company's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the Company, its business and performance trends and facilitates comparisons with the performance of its peers.

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto.

Overview

        We are a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. We have three reportable segments: U.S. Operations, Canadian Operations and International Operations. The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers in the U.S. The Canadian Operations segment provides trading as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as "Asia Pacific"), as well as a research and development facility in Israel.

        Our revenues principally consist of commissions from customers' use of our trade execution services. Because commissions are earned on a per-transaction basis, such revenues fluctuate from period to period depending on (i) the volume of securities traded through our services in the U.S. and Canada, (ii) the contract value of securities traded in Europe and Asia Pacific, and (iii) our commission rates. Commission revenues are generated by orders delivered to us from our order and execution management products, as well as other vendors' products, direct computer-to-computer links to customers through our proprietary and third party networks and phone orders from our customers. In Canada, we also generate revenue from interlisted arbitrage trading where we profit from small price differences by simultaneously purchasing and selling the same equity security in the Canadian and U.S. markets. We also generate recurring revenues, which are largely fee or subscription-based rather than transaction-based, and are therefore significantly less sensitive to fluctuations in the level of trading activity. Our subscription-based revenues principally consist of revenues from sales of analytical products, network connectivity and order management network services, as well as professional services.

        We provide a comprehensive suite of products that span the trading continuum. In 2007, we focused on certain strategic objectives, including product globalization, asset class diversification, the initial phase of ITG Triton X development and expansion of the ITG Net offering.

        Our international strategy gained strategic and financial momentum this year, with International and Canadian Operations (collectively) comprising 25% of revenues in 2007 versus 21% in 2006. In Canada, we focused on selling Triton and added new trading algorithms. In addition, we launched Match Now, an alternative market for continuous Canadian equity securities matching. In Europe, ITG launched POSIT Now, added cross border trading capabilities to Triton and introduced new trading algorithms, while focusing on cross selling analytics and ITG Algorithms with Triton and growing liquidity in the POSIT crossing suite. Lastly, in Asia Pacific, we launched Asia/Pacific Triton and POSIT Alert in Australia.

        We acquired RedSky Financial, LLC (now ITG Derivatives) in July of 2007, to bring enhanced equity options and futures capabilities to our U.S. client base. Its principal product, ITG Matrix will be rolled out to ITG's client base, and options capabilities were added to Radical.

        We moved forward with the development of ITG Triton X, the integration of our Triton and Macgregor XIP systems. We defined our vision for the OMS/EMS convergence, created a dedicated development team, communicated our migration strategy away from Macgregor XIP and began testing a prototype of the first version of ITG Triton X.

26

        We completed the merger of the Macgregor Financial Network with our RouteNet network to create ITG Net. ITG Net is now sold both as part of the ITG product suite and as a stand alone product.

Clearance and Settlement

        ITG Inc., our primary U.S. broker-dealer, commenced self-clearing operations for equities in May 2007. Clearing operations include the confirmation, receipt, settlement, custody and delivery functions related to securities transactions. ITG Inc. is utilizing SunGard Data Systems' Phase 3 product under a three year agreement to provide clearing, settlement and record keeping services. Prior to its conversion to self-clearing, ITG Inc., as an introducing broker, cleared all of its customer equity transactions through Jefferies and Company, Inc. We believe that our strategy of becoming self-clearing in the U.S. will allow the Company to realize future savings via lower equity clearing and settlement costs.

Acquisition of RedSky Financial, LLC

        On July 31, 2007, we completed the acquisition of RedSky Financial, LLC (now ITG Derivatives). ITG Derivatives specializes in multi-asset class electronic trading with an emphasis on exchange-traded equity derivative products, as well as routing for foreign exchange and fixed income trading. ITG Derivatives' advanced trading platform, now re-branded as ITG Matrix, further diversifies our asset class capabilities. This multi-asset trading platform facilitates high frequency trading for professional and institutional traders. Our plan is to integrate this functionality into our existing execution systems, which will provide our customers with full access to equity options and futures trading in addition to our current equity trading capabilities.

        ITG Matrix also offers direct access to multiple destinations and market data through an Application Programming Interface ("API"), which gives high-frequency traders the lowest possible latency when submitting and processing orders. Our API allows traders using their own proprietary systems to connect directly to the markets via ITG Derivatives' routing infrastructure.

        Our purchase of RedSky may cost up to $38.0 million, including acquisition costs, of which $21.2 million was recorded as the initial purchase price. We paid $15.6 million in cash at closing, including acquisition costs and $5.6 million of contingent payments were recognized and are payable in 2011. Additional contingent payments of $2.5 million and $14.3 million are payable in 2009 and 2011, respectively. A portion of the contingent payments (approximately $9.5 million) would be recognized as expense in the appropriate periods as this portion of the contingent consideration is considered to be compensatory.

        The results of ITG Derivatives' operations have been included in the consolidated financial statements since July 31, 2007.

Other Acquisitions

        The consolidated financial statements include the results of operations of the following businesses from their dates of acquisition (See Note 3, "Acquisitions", to the consolidated financial statements):

•

Macgregor—acquired January 3, 2006;



•

Plexus—acquired January 3, 2006; and



•

POSIT Joint Venture—remaining 50% interest acquired on February 1, 2005

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Executive Summary

        In 2007, our consolidated revenues increased 22% to $731.0 million, while our operating expenses grew 24% to $542.1 million as compared to 2006. Our reported net income for 2007 was $111.1 million, or $2.48 per diluted share, as compared to $97.9 million, or $2.21 per diluted share, in 2006. Pre-tax margins were 25.8% in 2007 as compared with 27.0% (or 25.6% excluding the non-operating items noted below) in 2006.

        Our 2007 results do not include any non-operating items while our 2006 results reflect the following non-operating items:

•

A gain of $6.9 million and dividend income of $1.0 million related to our ownership of two exchange memberships on the NYSE, hereafter referred to as the "NYSE Transaction" and further described in Results of Operations.



•

A gain of $5.4 million related to the sale of our 50% interest in our Canadian joint venture to IRESS Market Technology Limited ("IRESS"), hereafter referred to as "the IRESS Sale" and further described in Results of Operations.



•

$1.4 million in management reorganization costs associated with the Asia Pacific region.

        The impact of the 2006 non-operating items was an $11.8 million increase in pre-tax income and a $7.1 million increase in after-tax net income. Reported earnings per share for the year increased by $0.16 as a result of these non-recurring items.

        Our U.S. commission revenue grew $60.4 million, or 15%, as strong volume growth more than offset the impact of price competition for trade executions which continues to exert downward pressure on the revenues earned per share for shares traded in the U.S. equity markets. Overall, 2007 market volumes increased 34% on the NYSE and 7% on NASDAQ, while ITG U.S. daily volumes were up 28%. In 2007, ITG's volume as a percentage of the combined reported NYSE and NASDAQ volumes was 3.51% compared to 3.37% in 2006.

        Market volatility, as measured by the CBOE Volatility Index (VIX), rose significantly in the second half of 2007. In this environment, strong performances from our diverse product suite drove our 15% overall revenue growth in the U.S.

        Canadian commission revenues grew 59%, as shares executed increased 63% to 8.2 billion. There was a notable shift towards our direct market access products and an increase in the use of our algorithmic products. Total Canadian revenues increased $19.3 million, or 35% with pre-tax profitability of $20.5 million increasing 18% from the prior year. The favorable exchange rate impact from a weakened U.S. Dollar added $4.2 million to total revenues and $1.1 million to pre-tax income.

        International Operations revenues for 2007 increased $42.1 million, or 61%, versus 2006 to $110.7 million, reflecting a substantial increase in volume and the market value of executions. The increase included $8.5 million from exchange rate fluctuations primarily as a result of the stronger Pound Sterling (relative to the U.S. Dollar), with a favorable impact on pre-tax earnings of approximately $0.8 million.

        International Operations posted a pre-tax profit of $2.4 million on strong commission revenue growth. This is an increase of $6.0 million over 2006, when we recorded a pre-tax loss of $3.6 million. We see potential for further growth in our International Operations as we expand and globalize our product line.

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Results of Operations

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

U.S. Operations

		Year Ended December 31,
$ in thousands											% Change
		2007			2006			Change
Revenues:
	Commission	$	451,866		$	391,419		$	60,447		15
	Recurring		78,418			70,398			8,020		11
	Other		15,752			14,146			1,606		11
Total revenues			546,036			475,963			70,073		15
Expenses:
	Compensation and employee benefits		180,526			162,969			17,557		11
	Transaction processing		56,087			48,172			7,915		16
	Other expenses		133,027			104,490			28,537		27
	Interest expense		10,443			12,220			(1,777	)	(15	)
Total expenses			380,083			327,851			52,232		16
Income before income tax expense		$	165,953		$	148,112		$	17,841		12
Pre-tax margin			30.4	%		31.1	%		(0.7	)%

        Commission revenues included strong performances from our direct market access and algorithmic products. We benefited from strong growth in average daily share volumes of 28%, which was partially offset by a reduction in average revenue per share, as shown in the Key Indicators table below. There was a marginal increase in total transaction processing costs as a percentage of commissions during 2007, as our newly acquired ITG Derivatives business incurred significantly higher costs per dollar of revenue than our equity executions business, where savings has been achieved through our transition to being a self-clearing broker-dealer in May 2007, as well as the processing of a larger portion of executions through less expensive venues. ITG Derivatives contributed $8.1 million to total revenues.

	Year Ended December 31,
U.S. Operations: Key Indicators								% Change
	2007		2006		Change
Total trading volume (in billions of shares)		49.0		38.4		10.6		28
Trading volume per day (in millions of shares)		195.0		152.9		42.1		28
Average revenue per share ($)	$	0.0088	$	0.0101	$	(0.0013	)	(13	)
U.S. market trading days		251		251		—		—

        In addition to the commission revenues above, which reflect our agency trading activities, we earned commission revenues of $11.6 million as a result of revenue sharing arrangements with ATSs and other broker-dealers that are executing with our customers through our products.

        Recurring revenues increased 11%, reflecting an increase in the pricing of our network connectivity services, as well as growth in the number of customer network connections and additional analytical product sales.

        Other revenues include investment income, market gains/losses resulting from temporary positions in securities assumed in the normal course of our agency trading business, as well as technology and support fees charged to the BLOCKalert joint venture. In 2006, other revenues included a gain of $6.9 million and dividend income of $1.0 million on the NYSE Transaction where we received compensation consisting of cash and restricted shares of NYSE Group, Inc. common stock in respect of each of our two NYSE membership seats.

29

        U.S. compensation and employee benefits expense increased by $17.6 million, reflecting a 12% increase in average headcount associated with business growth, as well as the RedSky acquisition, performance based compensation increases and the associated increase in benefit and payroll tax costs. Compensation costs related to product development were partially offset by higher capitalizable salaries from product development efforts.

        Other expenses increased $28.5 million due to (i) amortization expense related to new product releases, (ii) consulting fees related to systems and new business development activities, such as product globalization, (iii) market data fees related to increased business and the conversion to a unified global real time equity market data infrastructure to support our products and services, (iv) depreciation expense, (v) higher legal fees, (vi) increased losses from the BLOCKalert joint venture and (vii) increased infrastructure needs. Our increased infrastructure needs included expanded office space in both our California and New York offices, as well as expansion of our telecommunications and data processing infrastructure.

        Interest expense declined 15% in line with the lower outstanding balance on our borrowings used to finance the 2006 acquisitions of Macgregor and Plexus.

Canadian Operations

		Year Ended December 31,
$ in thousands											% Change
		2007			2006			Change
Revenues:
	Commission	$	60,091		$	37,790		$	22,301		59
	Recurring		3,093			2,460			633		26
	Other		11,042			14,653			(3,611	)	(25	)
Total revenues			74,226			54,903			19,323		35
Expenses:
	Compensation and employee benefits		22,637			16,792			5,845		35
	Transaction processing		15,242			11,750			3,492		30
	Other expenses		15,835			8,919			6,916		78
Total expenses			53,714			37,461			16,253		43
Income before income tax expense		$	20,512		$	17,442		$	3,070		18
Pre-tax margin			27.6	%		31.8	%		(4.2	)%

        2007 was a record year for trading activity on the Toronto Stock Exchange ("TSX"). Our TSX market share increased to 3.25% from 2.68% in 2006. Our commission revenues increased, albeit at a slightly lower rate, than our 63% growth in share volumes, which was primarily on the TSX but also included U.S. executions for Canadian customers.

        Along with the heightened activity in Canadian equities, our Canadian revenues and market share benefited from a sustained sales effort, the success of Triton and continued expansion in the use of algorithmic trading. In 2007, a total of 4.5 billion shares were executed through various ITG algorithms, approximately double the 2006 share level.

        Total revenues increased $19.3 million, including a $4.2 million favorable exchange rate impact from the appreciation of the Canadian dollar. 2006 revenues included a one time gain of $5.4 million on the IRESS Sale, which is included in other revenues. Excluding the impact of the 2006 IRESS Sale, the growth in other revenues, total revenues and pre-tax margin was 19%, 50% and 3.3 percentage points, respectively. Other revenues included $10.9 million from our interlisted arbitrage activities

30

versus $8.8 million in 2006. On a pre-tax basis, there was a favorable exchange rate benefit of approximately $1.1 million.

        Total expenses increased $16.3 million including a $3.1 million unfavorable exchange rate impact. The growth in expenses was driven by higher levels of business activity and increased infrastructure needs to support this growth.

        Compensation and employee benefits expense reflects higher performance based compensation from the growth in revenues and profitability, and increased headcount to support the overall expansion of the Canadian Operations.

        Transaction processing costs grew with increased trading volumes but at a lower rate than revenue growth due to savings from a new TSX pricing model and lower clearing/settlement fees. There continues to be downward pressure on exchange fees in Canada due to the recent launches of alternative trading systems in the Canadian equities marketplace.

        Other expenses reflect growth in business development, consulting, technology related and facilities costs, as well as connectivity and market data fees related to significantly increased levels of business.

International Operations

		Year Ended December 31,
$ in thousands											% Change
		2007			2006			Change
Commission Revenues:
	Europe	$	79,470		$	45,982		$	33,488		73
	Asia Pacific		28,840			19,498			9,342		48
Total commission revenues			108,310			65,480			42,830		65
Recurring revenues			1,580			802			778		97
Other revenues			847			2,336			(1,489	)	(64	)
Total revenues			110,737			68,618			42,119		61
Expenses:
	Compensation and employee benefits		40,306			31,659			8,647		27
	Transaction processing		40,674			20,782			19,892		96
	Other expenses		27,354			19,767			7,587		38
Total expenses			108,334			72,208			36,126		50
Income before income tax expense		$	2,403		$	(3,590	)	$	5,993		—
Pre-tax margin			2.2	%		(5.2	)%		7.4	%

        International commission revenues increased 65% to $108.3 million, including a favorable exchange rate impact of $7.3 million. Excluding the foreign currency impact, commission revenues grew 54%.

        Total European commission revenues increased $33.5 million, reflecting substantial volume and market value increases from our portfolio trading desk and our direct access trading products. Much of the volume increase was driven by winning additional portfolio business, the successful expansion of Triton and ITG Channel to both new and existing clients, and our improved direct market access and algorithmic trading offering. However, transaction processing costs increased at a rate greater than the related trading growth. In additional to volume and market value growth, the increase is attributable to a change in our geographical mix, with a higher concentration of our trades executed in continental European markets, where we incur significantly higher clearing and execution costs than we do in the UK market, and the greater proportion of trades executed directly on the more costly exchanges than through POSIT.

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        Commission revenues in Asia Pacific increased $9.3 million, primarily reflecting strong market conditions and volume growth from new and existing clients. Transaction processing costs grew at a lower rate than revenues due to the increased proportion of trades executed in Hong Kong, where we self-clear equity transactions, as well as lower execution rates charged by overseas brokers.

        Total International revenues includes a $8.5 million favorable exchange rate impact resulting primarily from the stronger Pound Sterling. On a pre-tax basis the favorable exchange rate impact was approximately $0.8 million.

        Compensation and employee benefits expense reflects higher performance related compensation related to the growth in revenues, increased headcount to support the general expansion of business activity, and an unfavorable exchange rate impact of $2.7 million.

        Other expenses reflect higher technology, connectivity and market data fees related to increased business levels together with business development, consulting, legal and occupancy charges, and an unfavorable exchange rate impact.

Income tax expense

        The effective tax rate was 41.2% in 2007 compared to 39.5% in 2006. 2006 was favorably impacted by the satisfactory settlement of certain federal and state tax matters. Our 2007 rate was negatively impacted by higher state taxes due to our expansion into additional jurisdictions and lower foreign tax credits. Our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

U.S. Operations

		Year Ended December 31,
Dollars in thousands											% Change
		2006			2005			Change
Revenues:
	Commission	$	391,419		$	307,224		$	84,195		27
	Recurring		70,398			9,745			60,653		622
	Other		14,146			(787	)		14,933		NA
Total revenues			475,963			316,182			159,781		51
Expenses:
	Compensation and employee benefits		162,969			112,017			50,952		45
	Transaction processing		48,172			32,072			16,100		50
	Other expenses		104,490			68,136			36,354		53
	Interest expense		12,220			—			12,220		NA
Total expenses			327,851			212,225			115,626		54
Income before income tax expense		$	148,112		$	103,957		$	44,155		42
Pre-tax margin			31.1	%		32.9	%		(1.8	)%

        Commission revenue growth reflects a strong performance across our entire product spectrum, particularly from POSIT, Triton and Radical. As noted in the table below, we benefited from strong growth in average daily share volumes (45%); however, average revenue per share declined due to a

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change in product mix (as a greater percentage of executions occurred in our direct market access products, as opposed to our other products), and general market pricing pressure.

	Year Ended December 31,
U.S. Operations: Key Indicators								% Change
	2006		2005		Change
Total trading volume (in billions of shares)		38.4		26.6		11.8		44
Trading volume per day (in millions of shares)		152.9		105.4		47.5		45
Average revenue per share ($)	$	0.0101	$	0.0116	$	(0.0015	)	(13	)
U.S. market trading days		251		252		(1	)	—

        In addition to the commission revenues above, which reflect our agency trading activities, we earned commission revenues of $5.0 million as a result of revenue sharing arrangements with ATSs and other broker-dealers that are executing with our customers through our products.

        On a pre-tax basis, the margin benefit from higher commission revenues was partially offset by the growth in transaction processing costs, which outpaced commission revenue growth. As our direct access clients utilized algorithmic strategies to a much larger extent, we experienced a shift in the mix of execution venues towards costlier providers. In concert with certain clients, adjustments to execution and routing strategies have been implemented.

        Recurring revenues, which include subscription-based sales of analytical products such as ITG TCA, ITG Opt, ITG Logic, ITG Fair Value, Macgregor XIP and Plexus Plan Sponsorship Group products, have become a significantly larger portion of our U.S. business following the Macgregor and Plexus acquisitions. Excluding these acquisitions, recurring revenues increased 18% or $1.7 million.

        Other revenues increased $14.9 million reflecting (i) a gain of $6.9 million and dividend income of $1.0 million related to our ownership of two exchange memberships on the NYSE resulting from the NYSE Transaction, as discussed in Note 6, "Securities Owned and Sold, Not Yet Purchased", to the consolidated financial statements and (ii) increased investment income (driven by a greater level of invested funds as well as higher yields).

        Total expenses increased $115.6 million or 54%. Excluding the expenses of Macgregor and Plexus (collectively $64.5 million) expenses from U.S Operations grew 24%.

        U.S. compensation and employee benefits expense increased by $51.0 million, reflecting the inclusion of Macgregor and Plexus (collectively $29.5 million), higher headcount associated with the expansion of our business, higher performance based compensation and employee benefits including bonuses, profit share plans and stock-based compensation. These expenses also include the cost of both our Chief Executive Officer and Chairman as full time employees in the fourth quarter of 2006, which added $1.0 million to costs. Compensation costs related to product development were partially offset by increases in capitalizable salaries as new product development efforts increased.

        Other expenses increased $36.4 million, of which $22.5 million relates to Macgregor and Plexus.

        Other expense growth was driven by (i) business development expenses, (ii) consulting fees, primarily related to systems and new business development activities, (iii) recruiting costs, (iv) professional services fees including legal and accounting fees and (v) amortization expenses related to new product releases and acquired intangible assets which were partially offset by the change in our estimate of the useful life of capitalized software, which resulted in a lower software amortization expense than that which would have resulted under the prior estimated useful life (see Note 1, "Organization and Basis of Presentation", to the consolidated financial statements and "Critical Accounting Estimates").

        Additionally, our increased infrastructure needs, which included (i) expanded office space in both our California and New York offices, (ii) additional data storage, (iii) non-capital hardware and

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software purchases and (iv) maintenance on new software and hardware purchases, further contributed to expense growth.

        Interest expense reflects the cost of our borrowings to finance the Macgregor and Plexus acquisitions, as discussed in Note 13, "Long Term Debt" and in "Liquidity and Capital Resources".

Canadian Operations

		Year Ended December 31,
$ in thousands											% Change
		2006			2005			Change
Revenues:
	Commission	$	37,790		$	24,384		$	13,406		55
	Recurring		2,460			479			1,981		414
	Other		14,653			9,189			5,464		59
Total revenues			54,903			34,052			20,851		61
Expenses:
	Compensation and employee benefits		16,792			11,960			4,832		40
	Transaction processing		11,750			10,291			1,459		14
	Other expenses		8,919			6,286			2,633		42
Total expenses			37,461			28,537			8,924		31
Income before income tax expense		$	17,442		$	5,515		$	11,927		216
Pre-tax margin			31.8	%		16.2	%		15.6	%

        In Canada, total revenues increased $20.9 million, or 61%, including a $3.6 million favorable exchange rate impact from the appreciating Canadian dollar. Excluding the foreign currency impact, revenues grew $17.2 million or 51%. Other revenues include a gain of $5.4 million related the IRESS Sale, as described in Note 4, "Affiliate Equity Transactions", to the consolidated financial statements as well as interlisted arbitrage revenues of $8.8 million (versus $9.1 million in 2005).

        2006 was a very active year on the TSX as new records were established for shares traded. Total shares traded increased 27.9% to 82 billion (up from 64 billion in 2005).

        ITG Canada results reflected the new benchmarks achieved on the TSX as revenues reached record levels while market share continued a strong upward trend. For 2006, total revenues from our Canadian business grew $15.5 million or 45% to $49.6 million, excluding the gain of $5.4 million related to the IRESS Sale, and included a foreign exchange rate benefit of $3.5 million. This result was also driven by an expansion in our algorithmic trading product offering which led to continued growth in direct market access trading. Our pre-tax margins in Canada benefited from reductions in TSX exchange fees and lower clearing cost charges.

        Total expenses increased 31% including a $2.4 million unfavorable exchange rate impact. On a pre-tax basis, there was a favorable exchange rate benefit of approximately $1.2 million.

        Compensation and employee benefits expense reflects higher performance compensation from the growth in revenues, and increased headcount to support the overall expansion of the Canadian Operations.

        Transaction processing costs grew with increased trading volumes but at a lower rate than revenue growth due to savings from a new TSX pricing model and lower clearing/settlement fees.

        Other expenses reflect growth in business development and consulting expenses, as well as connectivity and market data fees related to increased levels of business.

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International Operations

		Year Ended December 31,
$ in thousands											% Change
		2006			2005			Change
Commission Revenues:
	Europe	$	45,982		$	37,957		$	8,025		21
	Asia Pacific		19,498			16,766			2,732		16
Total commission revenues			65,480			54,723			10,757		20
Recurring revenues			802			485			317		65
Other revenues			2,336			2,719			(383	)	(14	)
Total revenues			68,618			57,927			10,691		18
Expenses:
	Compensation and employee benefits		31,659			27,248			4,411		16
	Transaction processing		20,782			15,479			5,303		34
	Other expenses		19,767			15,576			4,191		27
Total expenses			72,208			58,303			13,905		24
Income before income tax expense		$	(3,590	)	$	(376	)	$	(3,214	)	(855	)
Pre-tax margin			(5.2	)%		(0.6	)%		(4.6	)%

        International commission revenues increased 20% to $10.8 million, including a favorable exchange rate impact of $0.5 million primarily resulting from the stronger Pound Sterling (relative to the U.S. Dollar). Excluding the foreign currency impact, commission revenues grew $10.3 million or 19%.

        In Europe, we achieved record revenues, which increased 19% or $7.6 million compared to 2005. The driving factors were strong growth in portfolio trading desk products and the rollout of our direct market access products, specifically Triton and algorithmic products. Geographically, the higher growth in continental European equity executions resulted in lower trading margin compared with UK equity executions.

        Total revenues in our Asia Pacific region increased $3.0 million, with growth in our Hong Kong operation more than offsetting the decline in Australian revenues. Revenues were driven by increased activity in the Asian markets. As the proportion of business executed in Hong Kong increased, our pre-tax margins benefited from the decrease in variable transaction processing charges relative to revenue growth, since we self-clear equity executions in Hong Kong.

        We implemented a management reorganization in our Asia Pacific region during the second half of 2006 to facilitate the execution of our long-term growth plans, which include the deployment of more products and services into the marketplace. We incurred $1.4 million of related expenses that are included in compensation and employee benefits costs.

        Compensation and benefits costs reflect higher performance related compensation, increased headcount, particularly in Europe, to support the general expansion of business activity, as well as restructuring costs in Asia. This was partially offset by an increase in capitalized salaries primarily from our development projects in Europe relating to Triton and Algorithmic trading.

        Transaction processing costs grew at a lower rate than revenue in Asia, but outpaced revenue growth in Europe. Our European transaction cost growth was driven by the higher level of business growth in continental Europe, which has higher transaction processing costs, compared to our UK business.

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        Other expenses reflect higher business development, consulting and telecommunications, data processing costs and increase in office space in Hong Kong.

Income tax expense

        The effective tax rate was 39.5% in 2006 compared to 38.0% in 2005. The 2005 amount included a 2.4% reduction in the effective tax rate from a reversal of a valuation allowance relating to the utilization of capital loss carry-forwards as a result of the sale of long-term investment securities, which was partially offset by higher levels of non-deductible costs in certain foreign jurisdictions. 2006 was favorably impacted the satisfactory settlement of certain Federal and state tax matters. Our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Critical Accounting Estimates

        Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the U.S. In many instances, the application of such principles requires management to make estimates or to apply subjective principles to particular facts and circumstances. A change in the estimates or a variance in the application, or interpretation of accounting principles generally accepted in the U.S. could yield a materially different accounting result. Below is a summary of our critical accounting estimates where we believe that the estimations, judgments or interpretations that we made, if different, would have yielded the most significant differences in our consolidated financial statements. In addition, for a summary of all of our significant accounting policies, see Note 2, "Summary of Significant Accounting Policies", in the notes to the consolidated financial statements.

Accounting for Business Combinations, Goodwill and Other Intangibles

        We account for acquisitions using the purchase method of accounting, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations", which requires the determination of the fair values of assets and liabilities acquired. Determining the fair value of certain assets and liabilities acquired in a business combination is judgmental in nature and often involves the use of significant estimates and assumptions. For initial valuations, we retain valuation experts to provide us with independent fair value determinations of goodwill and other intangibles. In addition, we perform valuations based on internally developed models. Specifically, a number of different methods are used in estimating the fair value of acquired intangibles as well as the subsequent testing of goodwill and other intangibles for impairment. Such methods include the income approach and the market approach. Significant estimates and assumptions applied in these approaches include, but are not limited to, projection of future cash flows, the applicable discount rate, perpetual growth rates, and adjustments made to assess the characteristics and relative performance of similar assets.

        SFAS No. 142, "Goodwill and Other Intangible Assets", requires goodwill to be assessed no less than annually for impairment. As of the most recent impairment test on October 1, 2007, we determined that the carrying value of goodwill for each reporting unit was not impaired. Other intangibles with definite lives will continue to be amortized over their useful lives and are assessed for impairment when events or circumstances indicate a possible impairment, pursuant to the provisions of SFAS No. 144, "Accounting for Long Lived Assets and for Long Lived Assets to be Disposed Of". Significant changes in the estimates and assumptions used in purchase accounting and goodwill impairment testing can have a material effect on the consolidated financial statements.

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        Amortization expense related to other intangibles for the years ended December 31, 2007, 2006, and 2005 was as follows (dollars in millions):

	Amortization Expense
	2007		2006		2005
Other intangibles	$	2.5	$	2.3	$	1.1

        The following table indicates our sensitivity to potential future impairment charges from potential declines in the fair value of our goodwill (dollars in millions):

		Potential Future Impairment
		10%		25%		50%
Goodwill:
	U.S. Operations	$	38.8	$	97.0	$	194.0
	International Operations	$	3.5	$	8.7	$	17.3

Stock Based Compensation

        On January 1, 2006 we adopted SFAS No. 123R, "Share-Based Payment," a revision to SFAS No. 123, which clarifies and expands the guidance in SFAS No. 123 in several areas, including measuring fair values and attributing compensation cost to reporting periods. Share-based payment transactions require the application of a fair value methodology that involves various assumptions. The fair value of our options awarded to employees is estimated on the date of grant using the Black-Scholes option valuation model that uses the following assumptions: expected life of the option, risk-free interest rate, expected volatility of our common stock price and expected dividend yield. We estimate the expected life of the options using historical data and the volatility of our common stock is estimated based on a combination of the historical volatility and the implied volatility from traded options.

        SFAS No. 123R requires us to estimate forfeitures at grant date (rather than recognizing forfeitures as incurred). For the year ended December 31, 2007, a 10% change in estimated forfeitures would change our pre-tax income by approximately $20,000.

Fair Value

        Securities owned, at fair value, securities sold, not yet purchased, at fair value, and investments in limited partnerships (which is included in other assets) in the consolidated statements of financial condition are carried at fair value or amounts that approximate fair value, with the related unrealized gains or losses recognized in our results of operations. The fair value of these instruments is the amount at which these instruments could be exchanged in a current transaction between willing parties, other than in a forced liquidation. Where available, we use the prices from independent sources such as listed market prices, or broker or dealer quotations. For investments in illiquid and privately held securities that do not have readily determinable fair values, we use estimated fair values as determined by management.

        Prior to March 2006 and as was the normal practice in our industry, the values we reported for the exchange seats were valued at cost or a lesser amount if there was an "other-than-temporary" impairment in value. We determined the fair value of these seats by referencing actual NYSE seat sales. Our assessment of the nature and extent of impairment of the NYSE seats required considerable judgment by management with respect to evaluating external factors. In March 2006, we received common stock in the NYSE Group, Inc. and dividends from the distribution of consideration in connection with the merger between the NYSE and Archipelago Holdings, Inc. in exchange for the two

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exchange membership seats that were owned by our broker-dealer subsidiary. (See Note 6, "Securities Owned and Sold, Not Yet Purchased", to the consolidated financial statements for further information).

        During 2006, we entered into interest rate swaps to hedge the variability of forecasted interest payments that we believe are probable to occur over the next three years. The interest rate swaps were designated as the hedging instruments in a cash flow hedge. In accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", we are required to estimate the fair value of certain financial instruments to determine the effectiveness of the hedge. We used the following methods and assumptions to estimate the fair values of certain financial instruments:

•

Long-term debt—the carrying amount of our floating rate debt approximates fair value.



•

Interest rate swaps—fair value is estimated based upon forward interest rate settings and approximates the discounted net cash flow which would have been realized if the contracts had been closed at the balance sheet date.

Income Taxes and Uncertain Tax Positions

        SFAS No. 109, "Accounting for Income Taxes", establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity's financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Fluctuations in the actual outcome of these future tax consequences could materially impact our financial position or results of operations.

        Effective January 1, 2007, we adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"), which addressed the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, a company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. We consider many factors when evaluating and estimating our tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. Our estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. The impact of our reassessment of uncertain tax positions in accordance with FIN 48 did not have a material impact on the results of operations, financial condition or liquidity.

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Liquidity and Capital Resources

Liquidity

        Our primary source of liquidity is cash provided by operations. Our liquidity requirements result from our working capital needs, which now include clearing and settlement activities, as well as our regulatory capital needs. A substantial portion of our assets are liquid, consisting of cash and cash equivalents or assets readily convertible into cash. We generally invest our excess cash in money market funds and other short-term investments that mature within 90 days or less. At December 31, 2007, cash and cash equivalents and securities owned, at fair value amounted to $191.8 million.

        Since becoming a self-clearing broker-dealer in the U.S. on May 1, 2007, we are subject to cash deposit requirements with clearing organizations that may be large in relation to our total liquid assets, and that may fluctuate significantly from time to time based upon the nature and size of our customers' trading activity. As of December 31, 2007, we had interest-bearing security deposits totaling $43.3 million with clearing organizations and clearing agents for the settlement of equity trades. In the normal course of business we may also need to borrow stock when a security is needed to deliver against a settling transaction, such as a short settlement or a fail to deliver, generally to another broker-dealer or to a customer. Securities borrowed transactions require that we provide the counterparty with collateral in the form of cash. Our cash deposits may be funded from existing cash balances or from short-term bank loans.

        When funding our U.S. securities clearance and settlement transactions with short-term bank loans, we utilize pledge facilities with two banks which have no specific limitations on our additional borrowing capacities (see "Loan Facilities" below). In Asia, where we also self-clear equity trades, we maintain working capital facilities with a bank for our clearing and settlement activities. These facilities are in the form of overdraft protection totaling approximately $147.5 million and are supported by $26.0 million in restricted cash deposits.

Capital Resources

        Our capital resource requirements relate to capital expenditures, as well as business investments and are generally funded from operations. When required, as in the case of a major acquisition, our strong cash generating ability helps us to access capital markets.

Operating Activities

        Cash flows used in operating activities were $109.4 million in 2007 as compared to the $147.5 million provided by operating activities in 2006. The decrease relates to our U.S. broker-dealer, ITG Inc., becoming a self clearing broker-dealer as cash was used to fund securities borrowed, deposits held by clearing organizations, restricted cash for the benefit of customers under Rule 15c3-3 and net broker and customer fails to deliver as well as short settlement activities and the significant growth of our international businesses. The changes in these balances are typically temporary over the normal trading settlement period and are based on customer trading patterns. Additionally, our customers may wish to settle their transaction on a non-standard basis, such as on trade date plus one day instead of the usual trade date plus three days. In those instances, we fund the transaction until settlement date and will either use cash or short-term bank loans until the standard settlement date of the transaction. At December 31, 2007, we borrowed $101.4 million for such activity on a short term basis and it is included in financing activities on the consolidated statement of cash flows. In the normal course of our clearing operations worldwide, cash is typically used to fund restricted or segregated cash accounts under regulations or other, broker and customer fails to deliver/receive, securities borrowed, deposits with clearing organizations and net activity related to receivables/payables from/to customers and brokers. The cash requirements vary from day to day depending on volume transacted and customer trading patterns.

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Investing Activities

        Net cash used in investing activities of $73.7 million includes our acquisition of RedSky and our increased spending in premises and equipment and capitalizable software development projects, as we continue to invest in both our infrastructure and our product portfolio.

Financing Activities

        Net cash provided by financing activities of $43.2 million reflects net short-term bank borrowings from our pledge facilities, as well as cash provided by common stock issued in connection with our equity based compensation plans and their related excess tax benefit of $6.2 million, which was partially offset by principal repayments on our Term Loan and funds used to repurchase ITG common stock.

        When funding our securities borrowing activities with short-term bank loans, we have pledge facilities with two banks, JPMorgan Chase Bank, N.A. and The Bank of New York Mellon, which have no specific limitations on our additional borrowing capacities. Borrowings under these arrangements bear interest at federal funds rate plus 50 basis points, and are repayable on demand. The short-term bank loans are collateralized by the securities underlying the transactions equal to 125% of the borrowings. We also have a $15 million unsecured line of credit with The Bank of New York Mellon bearing interest at a negotiated rate. Each advance under the line of credit is due at a specified maturity date with no prepayment option. At December 31, 2007, we had $101.4 million in short-term bank loans under pledge facilities and no borrowings under the unsecured line of credit (see Note 12, "Short-Term Bank Loans", to the consolidated financial statements).

        During 2007, we used $28.4 million for principal repayments on the Term Loan financing under our credit agreement (see Note 13, "Long Term Debt", to the consolidated financial statements). During 2006, we repaid $39.1 million of Term Loan principal as the 2006 period included mandatory prepayments triggered by the sale of our Canadian joint venture, the sale of a portion of our NYX shares and the cash received in connection with the NYSE Merger. Excluding any mandatory prepayments which may arise, our scheduled debt principal payments in 2008 will be $38.0 million.

        The credit agreement also provides an available $25 million revolving credit facility that can be drawn upon to meet working capital needs should they arise. As of the filing date of this Annual Report on Form 10-K, we have no outstanding borrowings under the revolving credit facility. During August 2007, we borrowed $25 million under this facility for a period of two days in order to facilitate working capital requirements at one of our international affiliates.

        During 2007, we repurchased approximately 1.3 million shares of our common stock at a cost of approximately $50.3 million, which was funded from our available cash resources. These shares were purchased under a 2004 authorization whereby our Board of Directors authorized management to use its discretion to purchase an agreed-upon maximum number of shares of common stock in the open market or in privately negotiated transactions. The 2004 authorization was reaffirmed by the Board of Directors on August 6, 2007.

Regulatory Capital

        Under the SEC's Uniform Net Capital Rule, our broker-dealer subsidiaries are required to maintain at all times at least the minimum level of net capital required under Rule 15c3-1.

        Our net capital balances and the amounts in excess of required net capital at December 31, 2007, for our U.S. Operations are as follows (dollars in millions):

U.S. Operations	Net Capital		Excess Net Capital
ITG Inc.	$	114.0	$	111.0
AlterNet		2.8		2.7
Blackwatch		6.5		6.3
ITG Derivatives		1.2		1.0

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        As of May 1, 2007, ITG Inc. migrated from a fully disclosed introducing broker-dealer to a self-clearing broker-dealer and its minimum net capital requirement as defined under Rule 15c3-1 increased to $1.0 million from $250,000.

        In addition, our Canadian Operations and International Operations had regulatory capital in excess of the minimum requirements applicable to each business as of December 31, 2007, as summarized in the following table (dollars in millions):

Canadian Operations	Excess Net Capital
Canada	$	26.9
International Operations
Australia	$	5.7
Europe		22.3
Hong Kong		27.5
Japan		2.2

Liquidity and Capital Resource Outlook

        Historically, our working capital, share repurchase and investment activity requirements have been funded from cash from operations and short-term loans, with the exception of our Macgregor and Plexus acquisitions, which required long term financing as described above. We believe that our cash flow from operations, existing cash balances and the available loan facilities will be sufficient to meet our ongoing operating cash and regulatory capital needs, while also complying with the terms of the credit agreement.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Off-Balance Sheet Arrangements

        In the normal course of business, we are involved in the execution of various customer securities transactions. Securities transactions are subject to the credit risk of counterparties or customer non-performance. In connection with the settlement of non-U.S. securities transactions, ITG has provided third party financial institutions with guarantees in amounts up to a maximum of $129.1 million. In the event that a customer of ITG's subsidiaries fails to settle a securities transaction, or if the related ITG subsidiaries were unable to honor trades with a customer, ITG would be required to perform for the amount of such securities up to the $129.1 million cap. However, transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through settlement date. Therefore, the settlement of these transactions is not expected to have a material effect upon our financial statements. It is also our policy to review, as necessary, the credit worthiness of each counterparty and customer.

41

Aggregate Contractual Obligations

        As of December 31, 2007, our contractual obligations and other commercial commitments amounted to $244.1 million in the aggregate and consisted of the following (dollars in millions):

	Payments due by period
Contractual obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Purchase of goods and services	$	26.5	$	16.8	$	9.5	$	0.2	$	—
Long term debt (including interest)		144.3		44.7		99.6		—		—
Operating lease obligations		69.5		13.3		23.5		18.1		14.6
Minimum payments under certain employment arrangements		3.8		2.9		0.9		—		—
Total	$	244.1	$	77.7	$	133.5	$	18.3	$	14.6

        The above information excludes $15.3 million of unrecognized tax benefits discussed in Note 11, "Income Taxes", to our consolidated financial statements because it is not possible to estimate the time period that it might potentially be paid to tax authorities.

Recent Accounting Pronouncements, Not Yet Adopted

        On September 15, 2006, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 157, "Fair Value Measurement" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Under the standard, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The standard clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, the standard establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, for example, the reporting entity's own data. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. The Statement does not expand the use of fair value in any new circumstances. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. We do not expect the adoption of FAS 157 to have a material impact on our consolidated results of operations and financial condition.

        In February 2007, the FASB issued SFAS No. 159 "Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159") which permits entities to measure many financial instruments and certain other items at fair value. Companies are required to adopt the new standard for fiscal years beginning after November 15, 2007. We do not expect the adoption of SFAS 159 to have a significant impact on our consolidated results of operations and financial condition.

        In December 2007, the FASB issued FASB Statement No. 141(R), "Business Combinations", ("FAS 141R") and FASB Statement No. 160, "Accounting and Reporting of Noncontrolling Interest in Consolidated Statements, an amendment of ARB No. 51", ("FAS 160"). These new standards will significantly change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests in consolidated financial statements. In addition to expanding the scope of acquisition accounting to all transactions and circumstances under which control of a business is obtained, significant changes in the accounting for business combination transactions resulting from the issuance of FAS 141R include: (i) recognition, with certain exceptions, of 100 percent of the fair value of assets acquired, liabilities assumed, and noncontrolling interests of acquired businesses, (ii) measurement of all acquirer shares issued in consideration for a business combination at fair value on the acquisition date (nullification of EITF Issue 99-12), (iii) recognition of contingent consideration

42

arrangements at their acquisition-date fair values, with subsequent changes in fair value generally reflected in earnings, (iv) with limited exception, the recognition of preacquisition gain and loss contingencies at their acquisition-date fair values, (v) capitalization of in-process research and development assets acquired at acquisition date fair value, (vi) recognition of acquisition-related transaction costs as expense when incurred, (vii) recognition of acquisition-related restructuring cost accruals in acquisition accounting only if the criteria in FASB Statement 146 are met as of the acquisition date, and (viii) recognition of changes in the acquirer's income tax valuation allowance resulting from the business combination separately from the business combination as adjustments to income tax expense.

        Significant changes in the accounting for noncontrolling (minority) interests resulting from the issuance of FAS 160 include: (i) classification of noncontrolling interests as a component of consolidated shareholders' equity, (ii) earnings attributable to noncontrolling interests are reported as part of consolidated earnings and not as a separate component of income or expense with earnings attributable to noncontrolling interest disclosed on the face of the income statement (the elimination of "minority interest" accounting in results of operations), (iii) attribution of losses to the noncontrolling interest is required, even when those losses exceed the noncontrolling interest in the equity of the subsidiary, (iv) accounting for both increases and decreases in a parent's controlling ownership interest that do not result in a loss of control of the subsidiary as transactions in the equity of the consolidated entity, and (v) accounting for changes in a parent's ownership interest that result in the loss of control of the subsidiary as a new basis recognition event that results in a gain or loss recognition on both the transaction in which control is ceded and on the revaluation to fair value of any retained ownership interest in the henceforth unconsolidated entity. In consolidated financial statements issued after the effectiveness of FAS 160, retroactive restatement of prior periods is required for the effectives described in points (i) and (ii), above.

        FAS 141R and FAS 160 are required to be adopted simultaneously and are effective for the first annual reporting period beginning on or after December 15, 2008. Earlier adoption is prohibited. We do not expect the adoption of FAS 141R and FAS 160 to have a material impact on our consolidated results of operations and financial condition.

Forward Looking Statements

        In addition to the historical information contained throughout this Annual Report on Form 10-K, there are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, dividends, financing plans, business strategies, competitive positions, plans and objectives of management for future operations, and concerning securities markets and economic trends are forward-looking statements. Although we believe our expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements herein include, among others, the actions of both current and potential new competitors, rapid changes in technology, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, errors or malfunctions in our systems or technology, cash flows into or redemptions from equity funds, effects of inflation, customer trading patterns, the success of our new products and services offerings, our ability to successfully integrate companies we have acquired, as well as general economic and business conditions, internationally or nationally, securities, credit and financial market conditions, and adverse changes or volatility in interest rates. Certain of these factors and other factors, are more fully discussed in Item 1A "Risk Factors", and this Item 7 in this Annual Report on Form 10-K, which you are encouraged to read.

43

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        Market risk refers to the potential for adverse changes in the value of a company's financial instruments as a result of changes in market conditions. We are exposed to market risk associated with changes in interest rates, foreign currency exchange rates and equity prices to the extent we own such instruments in our portfolio. We do not engage in speculative or leveraged transactions, nor do we hold or issue financial instruments for trading purposes. We continually evaluate our exposure to market risk and oversee the establishment of policies, procedures and controls to ensure that market risks are identified and analyzed on an ongoing basis.

        We have performed sensitivity analyses on different tests of market risk as described in the following sections to estimate the impacts of a hypothetical change in market conditions on the fair value of securities owned and the U.S. dollar value of non-U.S. dollar-based revenues associated with our Canadian Operations and International Operations. Estimated potential losses assume the occurrence of certain adverse market conditions. Such estimates do not consider the potential effect of favorable changes in market factors and also do not represent management's expectations of projected losses in fair value. We do not foresee any significant changes in the strategies used to manage interest rate risk, foreign currency risk or equity price risk in the near future.

Interest Rate Risk

        Our exposure to interest rate risk relates primarily to interest-sensitive financial instruments in our investment portfolio and to interest on our Term Loan and Revolving Loan.

        Interest-sensitive financial instruments in our investment portfolio will decline in value if interest rates increase. Our interest-bearing investment portfolio primarily consists of short-term, high-credit quality money market funds. The aggregate fair market value of our portfolio was $240.9 million and $318.2 million as of December 31, 2007 and 2006, respectively. Our interest-bearing investments are not insured and because of the short-term high quality nature of the investments are not likely to fluctuate significantly in market value.

        In connection with our acquisitions of Macgregor and Plexus, we borrowed $200 million, pursuant to our Credit Agreement, on January 3, 2006. The Credit Agreement also provides an available $25 million Revolving Loan that can be drawn upon to meet working capital needs should they arise. As of the filing date of this Annual Report on Form 10-K, we do not have an outstanding balance under the Revolving Loan. The current borrowings under the Term Loan will bear interest based on the Three-Month LIBOR plus a margin of 1.25%. Additionally, under certain circumstances specifically related to our financial ratios under the Credit Agreement, this margin could increase to 1.50%.

        As discussed above, our interest rate risk on debt will be affected by changes in LIBOR and maintenance of financial ratios, as well as our interest rate hedging activities. We are required by the terms of the Credit Agreement to maintain swap agreements that seek to provide that at least 50% of the Term Loan will have an interest rate that is effectively fixed for at least three years. In March 2006, we entered into interest rate swap agreements which effectively fix our interest rate on one-half of the outstanding Term Loan principal at 5.064% (plus a margin of 1.25%) for a period of three years. We estimate that a hypothetical 100 basis point increase in weighted average interest rates for 2008 would result in an approximately $0.6 million increase in interest expense on the unhedged principal of the Term Loan.

Foreign Currency Risk

        We currently operate and continue to expand globally in a variety of ways, principally through our operations in Canada, Australia, Europe, Hong Kong and Japan, as well as through the development of specially tailored versions of our services to meet the needs of our international clients. Additionally, we maintain development facilities in Israel and Spain. Our investments and development activities in these countries expose us to currency exchange rate fluctuations primarily between the U.S. Dollar and

44

the British Pound Sterling, Euro, Australian Dollar, Canadian Dollar, Hong Kong Dollar, Japanese Yen and Israeli New Shekel. When the U.S. Dollar strengthens against these currencies, the U.S. Dollar value of non-U.S. Dollar-based revenue decreases. To the extent that our international activities recorded in local currencies increase in the future, our exposure to fluctuations in currency exchange rates will correspondingly increase. We have not engaged in derivative financial instruments as a means of hedging this risk. Non-U.S. Dollar cash balances held overseas are generally kept at levels necessary to meet current operating and capitalization needs.

        Approximately 25% and 21% of our revenues for the years ended December 31, 2007 and 2006, respectively, were denominated in non-U.S. Dollar currencies. For the years ended December 31, 2007 and 2006, respectively we estimated that a hypothetical 10% adverse change in foreign exchange rates would have resulted in a decrease in net income of $2.6 million and $1.9 million, respectively.

Equity Price Risk

        Equity price risk results from exposure to changes in the prices of equity securities. At times, we do hold positions overnight due to client or Company errors. Equity price risk can arise from liquidating such positions. Accordingly, we maintain policies and procedures regarding the management of our errors and accommodations proprietary trading accounts. It is our policy to attempt to trade out of all positions arising from errors and accommodations immediately while balancing our exposure to market risk. Certain positions may therefore be liquidated over a period of time in an effort to minimize market impact.

        We manage equity price risk associated with open positions through the establishment and monitoring of trading policies and through controls and review procedures that ensure communication and timely resolution of trading issues. Our operations and trading departments review all open trades daily. We have also established approval policies that include review by a Supervisory Principal of any proprietary trading activity, which may arise from time to time as a result of trading errors.

        Our cash management strategy seeks to optimize excess liquid assets by preserving principal, maintaining liquidity to satisfy capital requirements, minimizing risk and maximizing our after-tax rate of return. Our policy is to invest in high quality credit issuers, limit the amount of credit exposure to any one issuer and invest in tax efficient strategies. Our first priority is to reduce the risk of principal loss. We seek to preserve our invested funds by limiting default risk, market risk, and re-investment risk. We attempt to mitigate default risk by investing in high quality credit securities that we believe to be low risk and by positioning our portfolio to respond appropriately to reductions in the credit rating of any investment issuer or guarantor that we believe is adverse to our investment strategy.

        For working capital purposes, we invest only in money market instruments. Cash balances that are not needed for normal operations may be invested in a tax efficient manner in instruments with appropriate maturities and levels of risk to correspond to expected liquidity needs. To the extent that we invest in marketable equity securities, we ensure portfolio liquidity by investing in marketable securities with active secondary or resale markets. We do not use derivative financial instruments in our investment portfolio. At December 31, 2007, and 2006, our cash and cash equivalents and securities owned were approximately $191.8 million and $327.8 million, respectively.

        Our investments in limited partnership funds require approval of executive management and/or the Board of Directors. As of December 31, 2007, we had investments in limited partnerships totaling $3.0 million, all of which were invested in marketable securities. The limited partnerships employ either a hedged convertible strategy or a long/short strategy to capitalize on short term price movements.

45

Item 8.    Financial Statements and Supplementary Data

	Pages
Independent Auditors' Report	47
Consolidated Statements of Financial Condition	48
Consolidated Statements of Income	49
Consolidated Statements of Changes in Stockholders' Equity	50
Consolidated Statements of Cash Flows	51
Notes to Consolidated Financial Statements	52

46

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Investment Technology Group, Inc.:

        We have audited the accompanying consolidated statements of financial condition of Investment Technology Group, Inc. and subsidiaries, (the Company) as of December 31, 2007 and 2006, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Investment Technology Group, Inc. and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Investment Technology Group, Inc.'s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 29, 2008, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/  KPMG LLP

New York, New York
February 29, 2008

47

INVESTMENT TECHNOLOGY GROUP, INC.

Consolidated Statements of Financial Condition

(In thousands, except par value and share amounts)

		December 31,
		2007			2006
Assets
Cash and cash equivalents		$	183,757		$	321,298
Cash restricted or segregated under regulations and other			71,300			13,610
Deposits with clearing organizations			43,284			—
Securities owned, at fair value			8,022			6,540
Receivables from brokers, dealers and clearing organizations			551,059			216,340
Receivables from customers			676,522			373,720
Premises and equipment, net			45,886			34,740
Capitalized software, net			50,892			32,203
Goodwill			422,774			405,754
Other intangibles, net			31,318			29,366
Deferred taxes			2,282			7,426
Other assets			13,791			21,315
Total assets		$	2,100,887		$	1,462,312
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses		$	186,463		$	152,049
Short-term bank loans			101,400			—
Payables to brokers, dealers and clearing organizations			497,124			147,825
Payables to customers			457,105			385,220
Securities sold, not yet purchased, at fair value			859			137
Income taxes payable			18,320			8,147
Deferred taxes			2,821			—
Long term debt			132,500			160,900
	Total liabilities		1,396,592			854,278
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding			—			—
Common stock, $0.01 par value; 100,000,000 shares authorized; 51,503,221 and 51,443,560 shares issued at December 31, 2007 and 2006, respectively and 43,462,885 and 43,809,993 shares outstanding at December 31, 2007 and 2006, respectively			515			514
Additional paid-in capital			210,071			198,419
Retained earnings			651,677			540,570
Common stock held in treasury, at cost; 8,040,336 and 7,633,567 shares at December 31, 2007 and 2006, respectively			(177,928	)		(144,173	)
Accumulated other comprehensive income (net of tax)			19,960			12,704
	Total stockholders' equity		704,295			608,034
Total liabilities and stockholders' equity		$	2,100,887		$	1,462,312

See accompanying Notes to the Consolidated Financial Statements.

48

INVESTMENT TECHNOLOGY GROUP, INC.

Consolidated Statements of Income

(In thousands, except per share amounts)

			Year Ended December 31,
			2007		2006		2005
Revenues:
	Commissions		$	620,267	$	494,689	$	386,331
	Recurring			83,091		73,660		10,709
	Other			27,641		31,135		11,121
		Total revenues		730,999		599,484		408,161
Expenses:
	Compensation and employee benefits			243,469		211,420		151,225
	Transaction processing			112,003		80,704		57,842
	Occupancy and equipment			47,344		38,296		28,862
	Telecommunications and data processing services			41,136		30,409		20,134
	Other general and administrative			87,736		64,471		41,002
	Interest expense			10,443		12,220		—
		Total expenses		542,131		437,520		299,065
Income before income tax expense				188,868		161,964		109,096
Income tax expense				77,761		64,041		41,410
Net income			$	111,107	$	97,923	$	67,686
Earnings per share:
	Basic		$	2.52	$	2.26	$	1.61
	Diluted		$	2.48	$	2.21	$	1.60
Basic weighted average number of common shares outstanding				44,042		43,350		42,152
Diluted weighted average number of common shares outstanding				44,784		44,289		42,391

See accompanying Notes to the Consolidated Financial Statements.

49

INVESTMENT TECHNOLOGY GROUP, INC.
Consolidated Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 2007, 2006 and 2005
(In thousands, except share amounts)

		Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held in Treasury			Accumulated Other Comprehensive Income			Total Stockholders' Equity
Balance at December 31, 2004		$	—	$	513	$	161,169	$	374,961	$	(177,095	)	$	10,953		$	370,501
Net income			—		—		—		67,686		—			—			67,686
Other comprehensive income:
	Currency translation adjustment		—		—		—		—		—			(4,673	)		(4,673	)
Comprehensive income																$	63,013
Issuance of common stock for employee stock options (649,237 shares), employee stock unit awards (110,464 shares), and directors' retainer fees (641 shares)			—		—		10,337		—		14,360			—			24,697
Issuance of common stock for the employee stock purchase plan (62,638 shares)			—		1		851		—		—			—			852
Share-based compensation			—		—		3,243		—		—			—			3,243
Balance at December 31, 2005		$	—	$	514	$	175,600	$	442,647	$	(162,735	)	$	6,280		$	462,306
Net income			—		—		—		97,923		—			—			97,923
Other comprehensive income:
	Currency translation adjustment		—		—		—		—		—			6,419			6,419
	Unrealized gain on hedging instruments (net of tax)													5			5
Comprehensive income																$	104,347
Issuance of common stock for employee stock options (839,927 shares), restricted share awards (4,227 shares), and employee stock unit awards (138,655 shares), including excess tax benefit of $3.1 million			—		—		13,884		—		18,562			—			32,446
Issuance of common stock for the employee stock purchase plan (53,533 shares)			—		—		1,599		—		—			—			1,599
Share-based compensation			—		—		7,336		—		—			—			7,336
Balance at December 31, 2006		$	—	$	514	$	198,419	$	540,570	$	(144,173	)	$	12,704		$	608,034
Net income			—		—		—		111,107		—			—			111,107
Other comprehensive income:
	Currency translation adjustment		—		—		—		—		—			7,686			7,686
	Unrealized holding gain on securities available-for- sale (net of tax)		—		—		—		—		—			54			54
	Unrealized loss on hedging instruments (net of tax)		—		—		—		—		—			(484	)		(484	)
Comprehensive income																$	118,363
Issuance of common stock for employee stock options (654,549 shares), restricted share awards (84,304 shares) and employee stock unit awards (106,973 shares), including excess tax benefit of $6.2 million			—		—		1,796		—		16,575			—			18,371
Issuance of common stock for the employee stock purchase plan (59,661 shares)			—		1		2,126		—		—			—			2,127
Purchase of common stock for treasury (1,252,595 shares)			—		—		—		—		(50,330	)		—			(50,330	)
Share-based compensation			—		—		7,730		—		—			—			7,730
Balance at December 31, 2007		$	—	$	515	$	210,071	$	651,677	$	(177,928	)	$	19,960		$	704,295

See accompanying Notes to the Consolidated Financial Statements.

50

INVESTMENT TECHNOLOGY GROUP, INC.
Consolidated Statements of Cash Flows
(In thousands)

		Year ended December 31,
		2007			2006			2005
Cash flows from Operating Activities:
Net income		$	111,107		$	97,923		$	67,686
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		36,017			22,499			20,020
	Deferred income tax expense		7,305			2,483			2,200
	Gain on IRESS/KTG sales		—			(3,188	)		—
	Gain on securities owned		—			(6,908	)		(2,462	)
	Provision for doubtful accounts		1,122			1,281			(542	)
	Stock-based compensation		7,730			7,336			3,243
Changes in operating assets and liabilities:
	Cash, restricted or segregated under regulations and other		(57,597	)		(5,927	)		200
	Deposits with clearing organizations		(43,284	)		—			—
	Securities owned, at fair value		(1,186	)		(523	)		(509	)
	Receivables from brokers, dealers and clearing organizations		(314,314	)		(137,726	)		(11,425	)
	Receivables from customers		(281,456	)		75,463			(301,726	)
	Accounts payable and accrued expenses		25,605			58,870			26,903
	Payables to brokers, dealers and clearing organizations		337,310			(31,168	)		112,842
	Payables to customers		46,292			67,711			203,393
	Securities sold, not yet purchased, at fair value		606			46			62
	Income taxes payable		16,085			(435	)		(3,973	)
	Excess tax benefit from share based payment arrangements		(6,176	)		(3,053	)		—
	Other, net		5,408			2,783			(1,794	)
	Net cash (used in) provided by operating activities		(109,426	)		147,467			114,118
Cash flows from Investing Activities:
Acquisition of subsidiaries, net of cash acquired			(14,503	)		(254,259	)		(100,480	)
Capital purchases			(27,668	)		(22,719	)		(10,052	)
Capitalization of software development costs			(34,951	)		(27,165	)		(11,173	)
Proceeds from sale of 50% interest in IRESS/KTG			—			8,308			—
Proceeds from sale of investments			3,416			11,134			38,142
	Net cash used in investing activities		(73,706	)		(284,701	)		(83,563	)
Cash flows from Financing Activities:
Proceeds from debt incurred			—			200,000			—
Short-term bank loans			101,400			—			—
Payments on debt			(28,400	)		(39,100	)		—
Excess tax benefit from employee stock options			6,176			3,053			1,568
Debt issuance costs			—			(1,940	)		(356	)
Common stock issued			14,322			30,992			23,981
Common stock repurchased			(50,330	)		—			—
	Net cash provided by financing activities		43,168			193,005			25,193
Effect of exchange rate changes on cash and cash equivalents			2,423			4,483			(1,169	)
	Net (decrease) increase in cash and cash equivalents		(137,541	)		60,254			54,579
Cash and cash equivalents—beginning of year			321,298			261,044			206,465
Cash and cash equivalents—end of year		$	183,757		$	321,298		$	261,044
Supplemental cash flow information:
	Interest paid	$	13,530		$	16,471		$	4,448
	Income taxes paid	$	53,488		$	53,577		$	40,204
Non cash investing activities:
	Acquisition payment obligation	$	5,606			—			—

See accompanying Notes to the Consolidated Financial Statements.

51

INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)    Organization and Basis of Presentation

        Investment Technology Group, Inc. ("ITG" or the "Company") was formed as a Delaware corporation on July 22, 1983. Its principal subsidiaries and affiliates include: (1) ITG Inc., AlterNet Securities, Inc. ("AlterNet") and ITG Derivatives LLC ("ITG Derivatives"), United States ("U.S.") broker-dealers, (2) Investment Technology Group Limited ("ITG Europe"), an institutional broker-dealer in Europe, (3) ITG Australia Limited ("ITG Australia"), an institutional broker-dealer in Australia, (4) ITG Canada Corp. ("ITG Canada"), an institutional broker-dealer in Canada, (5) ITG Hong Kong Limited ("ITG Hong Kong"), an institutional broker dealer in Hong Kong, (6) ITG Japan Ltd. ("ITG Japan"), an institutional broker-dealer in Japan, (7) ITG Software Solutions, Inc., our intangible property, software development and maintenance subsidiary in the U.S., (8) ITG Solutions Network, Inc., ("ITG Solutions Network") a holding company for ITG Analytics, Inc. ("ITG Analytics"), a provider of pre- and post- trade analysis, fair value and trade optimization services, The Macgregor Group, Inc. ("Macgregor"), a leading provider of trade order management technology for the financial community and Plexus Plan Sponsor Group, Inc. ("Plexus"), a provider of transaction cost analysis and transition consulting and related services to the plan sponsor community, and (9) Block Alert LLC ("BLOCKalert"), a 50% owned joint venture (see Note 4, "Affiliate Equity Transactions", to the consolidated financial statements).

        Investment Technology Group, Inc. (NYSE: ITG), is a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. A pioneer in electronic trading, ITG has a unique approach that combines pre-trade, order management, trade execution, and post-trade tools to provide clients with continuous improvements in trading and cost efficiency. The firm is headquartered in New York with offices in North America, Europe and the Asia Pacific region.

        The Company has three reportable operating segments: U.S. Operations, Canadian Operations and International Operations, following changes the Company made to its management hierarchy to synchronize with its strategy of managing business operations, planning and resource allocation as three separate and distinct businesses.

        The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers in the U.S. The Canadian Operations segment provides trading, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as "Asia Pacific"), as well as a research and development facility in Israel.

        With the acquisitions of Macgregor and Plexus (then incorporated as Plexus Group, Inc.) in January 2006, we began to generate significant recurring revenues related to subscriptions. The subscription-based revenues principally consist of revenues from our connectivity services, order management system and our analytical products. These revenues are reported in our consolidated statements of income as recurring revenue and certain reclassifications have been made to prior period amounts to conform to current period presentation.

        Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation as a result of ITG Inc. commencing self-clearing of equity trades in May 2007. Receivables previously included in receivables from brokers, dealers and others are now divided among the following accounts: (i) receivables from brokers, dealers and clearing organizations, (ii) receivables from customers, and (iii) deposits with clearing organizations. Payables previously

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included in payables to brokers, dealers and others are now divided among the following two accounts: (i) payables to brokers, dealers and clearing organizations and (ii) payables to customers. Additionally, certain payables to brokers for clearance and execution costs previously included in accounts payable and accrued expenses were reclassified to payables to brokers, dealers and clearing organizations in the consolidated statements of financial condition.

        The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). The consolidated financial statements reflect all adjustments, which are in the opinion of management, necessary for the fair presentation of results.

(2)    Summary of Significant Accounting Policies

Principles of Consolidation

        The consolidated financial statements represent the consolidation of the accounts of ITG and its subsidiaries that are consolidated in conformity with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. We account for investments in unconsolidated companies (generally 20 to 50 percent ownership), in which we have the ability to exercise significant influence but have neither a controlling interest nor are the primary beneficiary, under the equity method. Investments in entities in which we do not have the ability to exercise significant influence are accounted for under the cost method. Under certain criteria indicated in FASB Interpretation No. 46R ("FIN 46R"), "Consolidation of Variable Interest Entities," we would consolidate a partially-owned affiliate when it has less than a 50% ownership if we were the primary beneficiary of that entity. At the present time, we have no interests in variable interest entities.

Use of Estimates

        The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets, liabilities, revenues and expenses. Actual results could differ from those estimates. Effective January 1, 2006, we changed our estimate of the useful life of our capitalized software (which is amortized on a straight-line basis) from two years to three years. This change in estimate resulted from our evaluation of the life cycles of our developed software and our conclusion that our software products consistently have a longer life than previously estimated. We believe that this change in estimate more accurately reflects the productive life of these assets. In accordance with SFAS No. 154, "Accounting Changes and Error Corrections," the change in useful life has been accounted for as a change in accounting estimate on a prospective basis from January 1, 2006. For the year ended December 31, 2006, this change in accounting estimate increased pre-tax income by $4.4 million, net income by $2.6 million, and diluted earnings per share by $0.06.

Revenue Recognition

        Transactions in securities, commission revenues and related expenses are recorded on a trade date basis. Our commission revenues are derived primarily from customer use of our trade execution services.

        Our recurring revenues are derived from the following primary sources: (1) subscription revenue generated from usage of software and our analytical products, (2) maintenance and customer technical support on our order management system, and (3) connectivity fees generated from providing a private

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value-added FIX electronic communications network. Software related professional services, such as implementation and customer training related activities, are reported in other revenues.

        Substantially all of our recurring revenue arrangements do not require significant modification or customization of the underlying software. Accordingly, we recognize the vast majority of software revenue pursuant to the requirements of Statement of Position ("SOP") 97-2, "Software Revenue Recognition," as amended by SOP 98-9 "Modification of SOP 970-2, Software Revenue Recognition, With Respect to Certain Transactions." In accordance with SOP 97-2, we begin to recognize revenue from subscriptions, maintenance, customer technical support and professional services when all of the following criteria are met: (1) we have persuasive evidence of a legally binding arrangement with a customer, (2) delivery has occurred, (3) the fee is deemed fixed or determinable and free of contingencies or significant uncertainties, and (4) collection is probable. Where we provide software under a hosting arrangement, as is the case with our ITG Trade Ops (formerly Macgregor Post Trade) product, revenue is accounted for as a service arrangement under Staff Accounting Bulletin ("SAB") No. 104, since the customer does not have the contractual right to take possession of the software at any time during the hosting period without significant penalty (or it is not feasible for the customer to run the software on either its own hardware or a third party's hardware).

        For arrangements with multiple elements, revenue is allocated among the elements based upon vendor specific objective evidence of fair value ("VSOE"). Amounts billed or payments received in advance of revenue recognition are recorded as deferred revenue. If the VSOE of any undelivered element included in a multiple-element arrangement cannot be determined, revenue is deferred until all elements are delivered or services have been performed. Under our present business model, substantially all of our multiple-element arrangements require deferral until all elements are delivered or services have been performed.

        Our subscription agreements for software products generally include provisions that, among other things, allow customers to receive unspecified future software upgrades for no additional fee as well as the right to use the software products with maintenance for the term of the agreement, typically one to three years. Under these agreements, once all four of the above noted revenue recognition criteria are met, we recognize revenue ratably over the term of the license agreement.

        Many of our software arrangements include consulting implementation services which are sold on a time and materials ("T&M") basis or as a fixed fee. Professional services sold as a multiple-element arrangement with the implementation of software are deferred until go-live (or acceptance, if applicable) of the software and recognized in the same manner as the subscription over the remaining term of the initial contract. Professional services not connected with the implementation of software are recognized on a T&M basis as incurred (billed).

        Our newer software license arrangements generally do not include acceptance provisions. Such provisions generally allow a customer to test the software for a defined period of time before committing to license the software. If a license agreement includes an acceptance provision, we do not record subscription revenue until the earlier of the receipt of a written customer acceptance or, if not notified by the customer to cancel the license agreement, the expiration of the acceptance period.

        Other revenues include (a) interest income, (b) market gains/losses resulting from temporary positions in securities assumed in the normal course of our agency trading business and financing costs from our customers' short settlement activities, (c) realized gains and losses in connection with our cash management and strategic investment activities, (d) non-recurring professional services, such as one-time implementation and customer training related activities, (e) option execution fees and (f) income from same day interlisted arbitrage trading.

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Cash and Cash Equivalents

        We have defined cash and cash equivalents as highly liquid investments, with original maturities of less than ninety days, which are part of our cash management activities.

Fair Value of Financial Instruments

        Substantially all of our financial instruments are carried at fair value or amounts approximating fair value. Cash and cash equivalents, securities owned and securities sold, not yet purchased, investments in limited partnerships and certain receivables are carried at market value, estimated fair value or contracted amounts that approximate fair value due to the short period to maturity and repricing characteristics.

Securities Transactions

        Revenues primarily consist of commissions from customers' use of our trade execution and analytical services, as well as recurring revenues from our connectivity services and order management systems ("OMSs"). Because commissions are paid on a per-transaction basis, revenues fluctuate from period to period depending on (i) the volume of securities traded through our services in the U.S. and Canada, (ii) the contract value of securities traded in Europe and the Asia Pacific region and (iii) our commission rates. For a more detailed discussion of revenues, see the "Revenue Recognition" section above.

        Receivables from brokers, dealers and clearing organizations include amounts receivable for fails to deliver, cash deposits for securities borrowed, amounts receivable from clearing organizations and commissions receivable. Payables to brokers, dealers and clearing organizations include amounts payable for fails to receive, amounts payable to clearing organizations on open transactions and execution cost payables. In addition, the net receivable or payable arising from unsettled trades is reflected in the appropriate category. Receivables from customers consist of customer fails to deliver, commissions earned and receivables arising from the Company's pre-payment of soft dollar research, net of an allowance for doubtful accounts. Payables to customers primarily consist of customer fails to receive. Commission revenues and related expenses for all securities transactions are recorded on a trade date basis. In May 2007, ITG Inc., our primary U.S. broker-dealer, commenced self-clearing of equities trades. Clearing operations include the confirmation, settlement, delivery and receipt of securities and funds, as well as the record-keeping functions involved in the processing of securities transactions.

        Transactions for securities done on an agency basis through our non-U.S. operations are recorded on the accompanying consolidated statements of financial condition on the trade date as such securities transactions generally clear through other broker-dealers but we generally assume the market and credit risk of the transaction on the trade date.

        Securities owned, at fair value consist of common stock and mutual funds. Securities sold, not yet purchased, at fair value consist of common stock. Marketable securities owned are valued using market quotes from third parties. Unrealized gains and losses are included in other revenues in the consolidated statements of income.

Interest Income and Expense on Securities Transactions

        The income statement classification of interest, dividends and rebate income and expense varies because certain transactions are entered into as financings while others are entered into as part of

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trading strategies. As such, interest earned on securities borrowed transactions consisting of interest earned on deposits with lending brokers (commonly known as a rebate), is recorded in other revenues. Interest expense on securities transactions consisting of the interest on cash borrowings to finance securities purchased or held, typically due to a failed transaction, is recorded in transaction processing expenses.

Securities Borrowed

        Securities borrowed transactions generally occur when securities are needed to deliver against a settling transaction, such as non-standard settlements (equity settlements occurring other than trade date plus three days), as requested by our customers or a fail to deliver. Securities borrowed transactions are recorded at the amount of cash collateral advanced to the lender. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. We monitor the market value of securities borrowed on a daily basis and the collateral is adjusted as necessary based upon market prices. As of December 31, 2007, the value of securities borrowed is included in receivables from brokers, dealers and clearing organizations.

Soft Dollar Programs

        We permit institutional customers to allocate a portion of their gross commissions to pay for research products and other services provided by third parties. The amounts allocated for those purposes are commonly referred to as soft dollar arrangements. We are accounting for the cost of independent research and directed brokerage arrangements on an accrual basis. Commission revenue is recorded when earned on a trade date basis. Our accounting for commission revenues includes the guidance contained in EITF Issue No. 99-19, "Reporting Revenues Gross versus Net", and accordingly, payments relating to soft dollars are netted against the commission revenues. Prepaid soft dollar research, net of allowance is included in receivables from customers and other and accrued soft dollar research payable is classified as accounts payable and accrued expenses in our consolidated statements of financial condition.

        Soft dollar revenues and related prepaid and accrued soft dollar research balances for the years ended December 31, 2007, 2006, and 2005 were as follows (dollars in millions):

	2007			2006			2005
Net soft dollar commissions	$	92.2		$	71.4		$	56.4
Prepaid soft dollar research, gross	$	6.4		$	8.8		$	7.1
Allowance for prepaid soft dollar research		(1.4	)		(1.5	)		(1.3	)
Prepaid soft dollar research, net of allowance	$	5.0		$	7.3		$	5.8
Accrued soft dollar research payable	$	39.7		$	29.1		$	23.4

Capitalized Software

        Pursuant to the provisions of SFAS No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed", we capitalize software development costs when technological feasibility of a product has been established. Technological feasibility is established when we have completed all planning, designing, coding and testing activities that are necessary to establish that the product can be produced to meet design specifications. All costs incurred to establish technological feasibility are expensed as incurred as required by SFAS No. 2, "Accounting for Research and

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Development Costs". The assessment of recoverability of capitalized software development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, anticipated future gross revenues, estimated economic life and changes in software and hardware technologies. We are amortizing capitalized software costs using the straight-line method over the estimated economic useful life. Effective January 1, 2006, we changed our estimate of the useful life of our capitalized software from two years to three years. This change in estimate resulted from our evaluation of the life cycles of our developed software and our conclusion that our software products consistently have a longer life than previously estimated. We believe that this change in estimate more accurately reflects the productive life of these assets. Amortization begins when the product is available for general release to customers. Amortization of software development costs is included in other general and administrative expenses in the consolidated statements of income.

Research and Development

        All research and development costs are expensed as incurred. Research and development costs were $34.3 million, $29.9 million and $26.1 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Goodwill and Other Intangibles

        SFAS No. 142, "Goodwill and Other Intangible Assets", requires goodwill to be assessed no less than annually for impairment. An impairment loss is indicated if the estimated fair value of a reporting unit is less than its net book value. In such a case, the impairment loss is calculated as the amount by which the carrying value of goodwill exceeds the implied fair value of goodwill.

        Other intangibles with definite lives will continue to be amortized over their useful lives and are assessed annually for impairment pursuant to the provisions of SFAS No. 142 and SFAS No. 144, "Accounting for Long Lived Assets and for Long Lived Assets to be Disposed Of." An impairment loss is calculated as the amount by which the carrying value of the of the intangible asset exceeds its estimated fair value. Such a loss is recognized if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than its carrying value.

Premises and Equipment

        Premises and equipment are carried at cost and are depreciated using the straight-line method over the estimated useful lives of the assets (generally three to seven years). Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the related assets or the non-cancelable lease term.

Impairment of Long-Lived Assets

        Long-lived assets, including premises and equipment, are periodically reviewed for impairment by comparing undiscounted future cash flows expected to result from use of the assets with recorded balances. If the sum of the expected undiscounted future cash flows were less than the carrying amount of the assets, an impairment loss would be recognized. The impairment loss, if determined to be necessary, would be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

        As is the normal practice in our industry, the values we report for certain long-lived assets, specifically exchange seats and stock exchange trading rights, are valued at cost or a lesser amount (fair market value) if there is an "other than temporary" impairment in value.

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Income Taxes

        Income taxes are accounted for on the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded against deferred tax assets if it is more likely than not that such assets will not be realized. Contingent income tax liabilities are recorded when the criteria for loss recognition under FASB Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109", ("FIN 48"), which became effective for us on January 1, 2007, have been met. Specifically, FIN 48 requires that we determine whether or not a tax position is more likely than not to be sustained upon examination based upon the technical merits of the position. If this recognition threshold is met, the tax benefit is then measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

Taxes Collected from Customers and Remitted to Governmental Authorities

        Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between ITG and our customers, including but not limited to sales, use, value added and some excise taxes are presented in our financial statements on a net basis (excluded from revenues).

Earnings per Share

        Basic earnings per share is determined by dividing earnings by the average number of shares of common stock outstanding, while diluted earnings per share is determined by dividing earnings by the average number of shares of common stock adjusted for the dilutive effect of common stock equivalents by application of the treasury stock method.

Stock-Based Compensation

        Effective January 1, 2006, we adopted SFAS No. 123R using the modified prospective transition method. SFAS No. 123R requires measurement of compensation cost for equity-based awards at fair value and recognition of compensation cost over the vesting period, net of estimated forfeitures. The Company recognizes compensation cost evenly over the vesting period using the straight-line attribution method for awards that have graded vesting schedules. Since we had previously accounted for stock-based compensation plans under SFAS 123, adoption did not have a significant impact on our financial position or results of operations. Under the modified prospective transition method of adoption, compensation expense recognized during 2006 included: (i) compensation cost for all share based awards granted prior to, but not vested as of January 1, 2003 based on the grant date fair value and (ii) an estimate of forfeitures at grant date (rather than recognizing forfeitures as incurred). The impact of adopting SFAS No. 123R in 2006 was a $0.9 million decrease in pre-tax income (including the benefit related to estimated forfeitures), a $0.6 million decrease in after-tax net income and a $0.01 decrease in diluted earnings per share.

        Under SFAS No. 123R cash flows related to income tax deductions in excess of the compensation cost recognized on stock based awards exercised during the period presented ("excess tax benefit") are classified in operating cash flows in the consolidated statements of cash flows. In 2007, we reclassified

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an excess tax benefit of $6.2 million related to exercise of employee stock options or issuance of employee restricted share awards to cash flows from financing activities.

        Had compensation cost for our stock option plan been determined consistent with SFAS No. 123 for 2005 presented below, our net income and earnings per share would have been changed to the pro forma amounts indicated below (dollars in thousands, except per share data):

		2005
Net income, as reported		$	67,686
Add: Stock-based compensation expense included in reported net income, net of taxes ($1,232)			2,011
Deduct: Total stock-based compensation expense determined under fair value based method(a)			(2,754	)
Pro forma net income		$	66,943
Earnings per share:
	Basic—as reported	$	1.61
	Basic—pro forma	$	1.59
	Diluted—as reported	$	1.60
	Diluted—pro forma	$	1.58
Basic shares			42,152
Diluted shares			42,391

Note:

(a)

determined under fair value based method for all awards, net of tax of $1,688.

        The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model with the following weighted average assumptions used for grants in 2007, 2006 and 2005:

	2007		2006		2005
Dividend yield	0.0	%	0.0	%	0.0	%
Risk free interest rate	5.0	%	4.7	%	3.8	%
Expected volatility	35	%	40	%	40	%
Expected life (years)	4.00		4.00		4.00

        The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected option life is based on our historical experience of employee exercise behavior. Expected volatility is based on historical volatility, implied volatility, price observations taken at regular intervals and other factors deemed appropriate. Expected dividend is based upon our current dividend rate.

        The fair value of restricted share awards is based on the grant date fair value of the Company's common stock.

Foreign Currency Translation

        Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the date of the statement of financial condition, and revenues and expenses are translated

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at average rates of exchange during the fiscal year. Gains or losses on translation of the financial statements of a foreign operation, where the functional currency is other than the U.S. Dollar, are reflected as a component of accumulated other comprehensive income in our stockholders' equity. Gains or losses on foreign currency transactions are included in other general and administrative expenses in the consolidated statements of income.

Derivative Financial Instruments

        We use derivative financial instruments, primarily swaps, to hedge certain interest rate exposure. We do not use derivative financial instruments for speculative purposes. See Note 14, "Derivative Financial Instruments", for a full description of our derivative financial instrument activities and related accounting policies.

(3)    Acquisitions

RedSky

        On July 31, 2007, we acquired 100% of RedSky Financial, LLC (now ITG Derivatives). Our purchase of RedSky may cost up to $38.0 million, including acquisition costs, of which $21.2 million was recorded as the initial purchase price. We paid $15.6 million in cash at closing, including acquisition costs and $5.6 million of contingent payments were recognized and are payable in 2011. Additional contingent payments of $2.5 million and $14.3 million are payable in 2009 and 2011, respectively. A portion of the contingent payments (approximately $9.5 million) would be recognized as expense in the appropriate periods as this portion of the contingent consideration is considered to be compensatory.

        ITG Derivatives will augment our product offerings, providing our clients with multi-asset execution management systems. The results of ITG Derivatives' operations have been included in the consolidated financial statements since July 31, 2007.

        The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition (dollars in thousands):

Purchase price		$	20,810
Acquisition costs			421
	Total purchase price	$	21,231
Cash		$	1,122
Receivables from brokers, dealers and clearing organizations			1,782
Accounts payable and accrued expenses			(2,143	)
Other intangibles			4,400
Other, net			129
Goodwill			15,941
	Total purchase price	$	21,231

        The goodwill and intangible assets were assigned to our U.S. Operations segment and are deductible for tax purposes. Of the $4.4 million of acquired intangible assets, $3.6 million was assigned to internally developed computer software with a useful life of 10 years. The remaining $0.8 million was assigned to a customer related intangible with a useful life of 17 years. The intangible assets have a weighted average useful life of approximately 11.27 years.

        The acquisition, accounted for under the purchase method, was recorded using management's estimates derived from preliminary evaluations. The final purchase price accounting adjustments to reflect the fair value of net assets will be based on management's final evaluation and are therefore, subject to change.

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Macgregor

        On January 3, 2006, we acquired 100% of Macgregor for approximately $238.0 million, including acquisition costs. The results of Macgregor's operations have been included in the consolidated financial statements since that date. The integration of the Macgregor OMS with ITG's existing execution management system and analytical products is a fundamental part of ITG's strategy of expanding our partnership with our clients by providing them with comprehensive solutions across the trading spectrum. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition (dollars in thousands):

Purchase price		$	231,066
Acquisition costs			6,946
	Total purchase price	$	238,012
Cash		$	6,918
Receivables from brokers, dealers and customers, net			8,813
Other intangibles			16,900
Deferred taxes			4,326
Accounts payable and accrued expenses			(7,823	)
Income taxes receivable			4,043
Other current liabilities			(4,045	)
Other, net			5,061
Goodwill			203,819
	Total purchase price	$	238,012

        The goodwill and intangible assets were assigned to our U.S. Operations segment. The goodwill is not deductible for tax purposes. Of the $16.9 million of acquired intangible assets, $2.0 million was assigned to the Macgregor trade name and $8.6 million was assigned to internally developed computer software, both of which have 12 year useful lives. The remaining $6.3 million was assigned to a customer related intangible which has a useful life of 18 years. The intangible assets have a weighted average useful life of approximately 14.24 years.

        The following represents the summary unaudited pro forma condensed results of operations for the twelve months ended December 31, 2005 as if the Macgregor acquisition had occurred at the beginning of the period presented (dollars in thousands, except per share data):

	Year Ended December 31, 2005
Total revenues	$	460,644
Net income	$	67,679
Basic earnings per share	$	1.61
Diluted earnings per share	$	1.60

        The pro forma results are not necessarily indicative of what would have occurred if the Macgregor acquisition had been in effect for the periods presented, nor are they indicative of the results that will occur in the future.

Plexus

        On January 3, 2006, we acquired 100% of Plexus for approximately $12.3 million, including acquisition costs. The results of Plexus' operations have been included in the consolidated financial

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statements since that date. The combined offering of ITG's transaction cost analysis services with Plexus' offerings provides clients with the most comprehensive set of customized transaction cost reports for the measurement and analysis of the various stages of the investment process. The acquisition allows for the expansion of ITG's related investment process consulting capabilities. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition (dollars in thousands):

Purchase price		$	12,000
Acquisition costs			321
	Total purchase price	$	12,321
Cash		$	1,824
Other intangibles			2,636
Other, net			(978	)
Goodwill			8,839
	Total purchase price	$	12,321

        The goodwill and intangible assets were assigned to our U.S. Operations segment. The goodwill is not deductible for tax purposes. Of the $2.6 million of acquired intangible assets, $1.1 million was assigned to the Plexus trade name and the intellectual property associated with the PAEG/L algorithm, which have indefinite useful lives. The remaining $1.5 million was assigned to a customer related intangible which has a useful life of 15 years.

POSIT Joint Venture

        On February 1, 2005 we acquired MSCI and Barra's 50% ownership interest in the POSIT Joint Venture (the "POSIT Transaction") for an initial payment of $90.1 million plus a contingent component payable over 10 years (equal to 1.25% of the revenues from the business of the POSIT Joint Venture). The total contingent component of the purchase price approximated $14.3 million, which included an accelerated one-time final payment of $11.7 million in September 2006, as was permissible under the terms of the agreement, to satisfy the future contingent obligation. The total $104.4 million purchase price was allocated to intangible assets ($10.5 million) and goodwill ($93.9 million). Goodwill was assigned to the U.S. Operations and International Operations segments in the amounts of $83.7 million and $10.2 million, respectively, of which $83.7 million is expected to be deductible for U.S. tax purposes over 15 years.

        As a result of the POSIT Transaction we became the owner of all right, title and interest, including all proprietary software of the POSIT Joint Venture. Prior to the closing of the POSIT Transaction, pursuant to license agreements with the POSIT Joint Venture, we paid quarterly royalties to the POSIT Joint Venture equal to specified percentages of the transaction fees we charge on each share crossed through POSIT. In 2005, we incurred royalties to the POSIT Joint Venture of $1.1 million.

(4)    Affiliate Equity Transactions

BLOCKalert Joint Venture

        On August 16, 2006, we entered into a joint venture with Merrill Lynch ("Merrill") to form BLOCKalert, a global block order crossing service by partnering Merrill's global distribution with our technology-enabled trading. On March 26, 2007, BLOCKalert became a registered broker-dealer with the SEC and is a member of FINRA. This service provides an expanded, singular liquidity pool for

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

block orders utilizing our POSIT crossing network in the U.S. As with all of our POSIT crossing systems, it is independent and anonymous.

        Our 50% interest in the joint venture is being accounted for under the equity method.

Canadian Joint Venture

        In April 2006, we sold our 50% interest in a Canadian joint venture with IRESS, a developer of financial market systems in Australia for CAD$9.5 million (approximately US$8.3 million) resulting in pre-tax and after-tax gains of approximately US$5.4 million and US$3.2 million, respectively.

        Our 50% interest in the Canadian joint venture was previously accounted for under the equity method.

(5)    Goodwill and Other Intangibles

        The following is a summary of goodwill and other intangibles at December 31 (dollars in thousands):

		Goodwill				Other Intangibles
Business Segments:
		2007		2006		2007		2006
U.S. Operations		$	388,105	$	371,159	$	29,887	$	27,943
International Operations			34,669		34,595		1,431		1,423
	Total	$	422,774	$	405,754	$	31,318	$	29,366

        In accordance with SFAS No. 142, goodwill is required to be assessed no less than annually for impairment. Other intangibles with definite lives, continue to be amortized over their useful lives and are assessed annually for impairment pursuant to the provisions of SFAS No. 142 and SFAS No. 144, "Accounting for Long Lived Assets and for Long Lived Assets to be Disposed Of."

        In 2007, we recorded approximately $15.9 million and $4.4 million of goodwill and other intangibles, respectively, related to the acquisition of RedSky (See Note 3, "Acquisitions").

        As of December 31, 2007, other intangibles, net included (i) the Macgregor trade name, software and customer relationships ($14.4 million), (ii) the POSIT trade name and proprietary software acquired in the POSIT transaction ($9.3 million), (iii) the internally developed software and customer relationships acquired in the RedSky acquisition ($4.2 million), (iv) the Plexus trade name, software and customer relationships ($2.4 million), (v) the software license acquired in 2004 from Radical ($0.7 million) and (vi) trading rights in Hong Kong ($0.2 million). The increase from 2006 is due to the software and customer relationships acquired in the RedSky acquisitions. Amortizable other intangibles are amortized over their respective estimated useful lives, which range from 3 to 18 years, with the remaining weighted average amortization period approximating 11.3 years. At December 31, 2007, other intangible assets not subject to amortization amounted to $9.7 million, of which $9.2 million related to POSIT and certain other trade names.

        We recorded amortization expense in relation to other intangibles of approximately $2.5 million and $2.3 million for the years ended December 31, 2007 and December 31, 2006 respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Estimated amortization expense for existing other intangibles is approximately $10.3 million in total for the five-year period ending December 31, 2012 as follows (dollars in millions):

Estimated Amortization
2008		2009		2010		2011		2012
$	2.8	$	2.3	$	1.8	$	1.7	$	1.7

(6)    Securities Owned and Sold, Not Yet Purchased

        The following is a summary of securities owned and sold, not yet purchased at December 31 (dollars in thousands):

		Securities Owned				Securities Sold, Not Yet Purchased
		2007		2006		2007		2006
Corporate stocks—trading securities		$	1,337	$	388	$	859	$	137
Corporate stocks—available-for-sale			267		—		—		—
Mutual funds			6,418		6,152		—		—
	Total	$	8,022	$	6,540	$	859	$	137

        Securities owned primarily consists of securities positions held by the Company resulting primarily from temporary positions in securities in the normal course of our agency trading business. Securities owned also includes mutual fund positions, as well as 3,040 shares of common stock in the NYSE Group, Inc. ("NYX Shares") we received in March 2006 as consideration in connection with the merger between the NYSE and Archipelago Holdings, Inc. ("the "NYSE Merger"). In March 2007, these 3,040 shares were reclassified from investments at cost to securities available-for-sale, as the restriction on their sale was less than one year. Since then, the restriction has been lifted and we are free to sell these shares. At December 31, 2006, there were no securities classified as available-for-sale and 55,440 NYX Shares were classified as investments at cost (of which 3,040 shares and 52,400 shares are restricted for sale until March 7, 2008 and 2009, respectively), which is included in other assets.

        Securities sold not yet purchased consist of short positions in securities resulting from temporary positions in securities in the normal course of our agency trading business.

        Unrealized holding gains and losses for available-for-sale securities are reported in other comprehensive income until realized.

(7)    Receivables and Payables

Receivables From and Payables To Brokers, Dealers and Clearing Organizations

        The following is a summary of receivables from and payables to brokers, dealers and clearing organizations at December 31 (dollars in thousands):

		Receivables From						Payables To
		2007			2006			2007		2006
Broker-dealers		$	437,877		$	216,873		$	478,295	$	147,741
Clearing organizations			1,044			—			18,829		84
Deposits for securities borrowed			113,601			—			—		—
Allowance for doubtful accounts			(1,463	)		(533	)		—		—
	Total	$	551,059		$	216,340		$	497,124	$	147,825

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Receivables From and Payables To Customers

        The following is a summary of receivables from and payables to customers at December 31 (dollars in thousands):

		Receivables From						Payables To
		2007			2006			2007		2006
Customers		$	678,875		$	376,126		$	457,105	$	385,220
Allowance for doubtful accounts			(2,353	)		(2,406	)		—		—
	Total	$	676,522		$	373,720		$	457,105	$	385,220

        We maintain an allowance for doubtful accounts based upon estimated collectibility of receivables. We recorded total increases of $1.1 million and $1.3 million to the allowance in 2007 and 2006, respectively. Total write-offs against the allowance of $0.3 million and $0.1 million were recorded during 2007 and 2006, respectively.

(8)    Premises and Equipment

        The following is a summary of premises and equipment at December 31 (dollars in thousands):

		2007		2006
Furniture, fixtures and equipment		$	117,889	$	96,081
Leasehold improvements			29,624		24,396
			147,513		120,477
Less: accumulated depreciation and amortization			101,627		85,737
	Total	$	45,886	$	34,740

        Depreciation and amortization expense relating to premises and equipment amounted to $17.0 million, $12.3 million and $11.6 million during the years ended December 31, 2007, 2006 and 2005, respectively, and is included in occupancy and equipment expense in our consolidated statements of income.

(9)    Capitalized Software

        The following is a summary of capitalized software costs at December 31 (dollars in thousands):

		2007		2006
Capitalized software costs		$	77,145	$	47,705
Less: accumulated amortization			26,253		15,502
	Total	$	50,892	$	32,203

        Software costs totaling $35.0 million and $27.2 million were capitalized in 2007 and 2006, respectively, primarily for the globalization of existing products for our International Operations, including Triton, ITG Triton X and ITG Algorithms, development of new versions of existing products, and the further development of Macgregor products. Also during 2007, capitalized software costs and related accumulated amortization were each reduced by $5.9 million for fully amortized costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Capitalized software costs of $7.1 million and $2.1 million were not subject to amortization as of December 31, 2007 and 2006, respectively, as the underlying products were not yet available for release. In 2007, 2006 and 2005, other general and administrative expenses in our consolidated statements of income included $16.5 million, $7.9 million and $7.3 million, respectively, in relation to the amortization of capitalized software costs.

(10)    Accounts Payable and Accrued Expenses

        The following is a summary of accounts payable and accrued expenses at December 31 (dollars in thousands):

		2007		2006
Accrued compensation and benefits		$	46,356	$	43,784
Accrued soft dollar research payables			39,696		29,066
Deferred compensation			29,223		24,390
Trade payables			27,440		23,513
Deferred revenue			13,580		13,407
Acquisition payment obligation			5,606		—
Accrued transaction processing			2,382		3,051
Other accrued expenses			22,180		14,838
	Total	$	186,463	$	152,049

(11)    Income Taxes

        Income tax expense (benefit) consisted of the following components (dollars in thousands):

		2007			2006			2005
Current:
	Federal	$	45,934		$	41,659		$	26,317
	State		14,656			13,561			10,228
	Foreign		9,866			6,338			2,611
			70,456			61,558			39,156
Deferred:
	Federal		6,099			2,704			2,949
	State		1,945			318			(266	)
	Foreign		(739	)		(539	)		(429	)
			7,305			2,483			2,254
Total		$	77,761		$	64,041		$	41,410

        Income before income taxes consisted of the following (dollars in thousands):

	2007		2006		2005
U.S.	$	165,953	$	148,112	$	103,957
Foreign		22,915		13,852		5,139
Total	$	188,868	$	161,964	$	109,096

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Deferred income taxes are provided for temporary differences in reporting certain items. The tax effects of temporary differences that gave rise to the net deferred tax (liability) asset at December 31 were as follows (dollars in thousands):

		2007			2006
Deferred tax assets:
	Deferred compensation	$	13,612		$	10,330
	Net operating loss and capital investment loss carry forward		9,322			11,288
	Allowance for doubtful accounts		1,857			740
	Stock based compensation		5,035			4,133
	Depreciation		3,781			4,849
	Tax credit carryovers		1,569			995
	Other, net		3,212			2,292
Total deferred tax assets			38,388			34,627
	Less: valuation allowance		4,746			3,123
Total deferred tax assets, net of valuation allowance			33,642			31,504
Deferred tax liabilities:
	Goodwill and other intangibles		(15,492	)		(12,045	)
	Capitalized software		(17,524	)		(10,912	)
	Other		(1,165	)		(1,121	)
Total deferred tax liabilities			(34,181	)		(24,078	)
Net deferred tax (liabilities)/assets		$	(539	)	$	7,426

        At December 31, 2007, we believe that it is more likely than not that future reversals of existing taxable temporary differences and the results of future operations will generate sufficient taxable income to realize the deferred tax asset, net of valuation allowance.

        Our net operating loss and capital loss carry forwards expire as follows (dollars in thousands):

		Amount		Years remaining
Macgregor, option cancellation		$	7,056	18
Hong Kong and Australia, operating losses			14,905	Indefinite
Japan, operating loss			5,424	5 to 7
	Total	$	27,385

        The effective tax rate varied from the U.S. Federal statutory income tax rate due to the following:

		2007		2006		2005
U.S. Federal statutory income tax rate		35.0	%	35.0	%	35.0	%
	State and local income taxes, net of Federal income tax effect	5.6		5.2		5.3
	Change in valuation allowance	—		—		(2.4	)
	Foreign tax impact, net	0.5		1.0		0.6
	Other, net	0.1		(1.7	)	(0.5	)
Effective income tax rate		41.2	%	39.5	%	38.0	%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Current taxes payable has been reduced by $6.2 million, 3.1 million, and $1.6 million at December 31, 2007, 2006, and 2005, respectively, relating to the exercise of employee stock options or the issuance of employee restricted share awards. For further discussion, see Note 20, "Employee and Non Employee Director Stock and Benefit Plans".

Tax Uncertainties

        On January 1, 2007, we adopted the provisions of FIN 48, which addressed the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, a company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The cumulative impact of our reassessment of uncertain tax positions in accordance with FIN 48 did not have any impact on the statement of changes in stockholders' equity.

        A reconciliation of the total amount of unrecognized tax benefits at the beginning and end of 2007 is as follows (dollars in thousands):

	Uncertain Tax Benefits
Balance, January 1, 2007	$	15,527
Additions based on tax positions related to the current year		903
Additions based on tax positions of prior years		1,547
Reductions for tax positions of prior years		(1,240	)
Reductions due to settlements with taxing authorities		(569	)
Reductions due to expiration of statute of limitations		(897	)
Balance, December 31, 2007	$	15,271

        Included in the balance at December 31, 2007 and 2006, are $10.4 million and $10.1 million, respectively, of unrecognized tax benefits which, if recognized, would affect the effective tax rate.

        As of December 31, 2007, we do not expect that unrecognized tax benefits for tax positions taken with respect to 2007 and prior years will significantly change within the next twelve months.

        With limited exception, we are no longer subject to U.S. federal, state, local or foreign tax audits by taxing authorities for years preceding 2001. The Internal Revenue Service ("IRS") is currently examining the Company's U.S. federal income tax returns for 2002 through 2005. The IRS is also auditing certain subsidiary returns for pre-acquisition fiscal years 2004-2005. Certain state and local returns are also currently under various stages of audit. The Company does not anticipate a significant change to the total of unrecognized tax benefits within the next twelve months.

        At December 31, 2007, we had accrued interest expense of $6.4 million, gross of related tax effects of $2.6 million, related to the unrecognized tax benefits. As a continuing policy, we recognize interest accrued related to unrecognized tax benefits as income tax expense. During 2007, we recognized $1.1 million of interest expense, net of related tax benefits of $0.7 million. Penalties, if incurred, would also be recognized as a component of income tax expense.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(12)    Short-Term Bank Loans

        We fund our U.S. securities settlement operations with operating cash or with short-term bank loans. We have established pledge facilities with two banks, JPMorgan Chase Bank, N.A. and The Bank of New York Mellon, for this purpose. Borrowings under these arrangements bear interest at federal funds rate plus 50 basis points and are repayable on demand (generally the next business day). The short-term bank loans are collateralized by the securities underlying the transactions, which equal up to 125% of the borrowings. At December 31, 2007, we had $101.4 million in short-term bank loans under these pledge facilities at a weighted average interest rate of 4.5%.

        We also have a $15 million unsecured line of credit with The Bank of New York Mellon bearing interest at a negotiated rate. Each advance under the line of credit is due at a specified maturity date with no prepayment option. At December 31, 2007, we had no borrowings outstanding under this facility.

        During August 2007, we borrowed $25 million under our Revolving Credit Facility (as defined in Note 13, "Long Term Debt", below) for a period of two days in order to facilitate working capital requirements at one of our international affiliates.

(13)    Long Term Debt

        On January 3, 2006, we entered into a $225 million credit agreement fully underwritten by a syndicate of banks and other financial institutions. The credit agreement consists of a five-year term loan in the amount of $200 million ("Term Loan") and a five-year revolving facility in the amount of $25 million ("Revolving Credit Facility"). The Term Loan and Revolving Credit Facility are secured by substantially all of the Company's assets. We utilized the $200 million Term Loan on January 3, 2006, to partially finance the Macgregor and Plexus acquisitions. The Revolving Credit Facility is available for future working capital purposes and is not drawn upon as of the filing date of this annual report. Commitment fees are payable on the Revolving Credit Facility at a 0.30% rate per year. The current borrowings under the Term Loan bear interest based upon the Three-Month London Interbank Offered Rate ("LIBOR") plus a margin of 1.25%. We incurred $2.3 million of debt issuance costs, primarily underwriting fees, related to the creation of the facility. The debt issuance costs are included in other assets on the accompanying consolidated statement of financial condition and will be amortized to interest expense over the life of the loan.

        At December 31, 2007, we had $132.5 million in outstanding debt under the Term Loan following scheduled principal payments of $28.4 million in 2007. During 2006 scheduled principal payments were $28.8 million in addition to required prepayments of $10.3 million. The prepayments relate to the terms of our credit facility, which include certain restrictions on the cash proceeds of any sale or issuance of equity, the incurrence of certain further indebtedness, and the sale or other disposition of any of our subsidiaries or assets.

        Principal and interest payments on the Term Loan are due on a quarterly basis. The remaining scheduled principal repayments are as follows (dollars in millions):

Year	Aggregate Amount
2008	$	38.0
2009		47.6
2010		46.9
	$	132.5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Interest expense on the credit facility, including amortization of debt issuance costs and net settlement payments on interest rate swaps, totaled $10.4 and $12.2 million in 2007 and 2006, respectively.

        Pursuant to the terms of the credit agreement, we are required to maintain certain financial ratios and operating statistics, and we will also be subject to certain operational limitations, including limitations on our ability to incur additional indebtedness, to make certain fundamental company changes (such as mergers, acquisitions and dispositions of assets), to make dividends and distributions on our capital stock and to undertake certain capital expenditures. Also pursuant to the terms of the credit agreement, in March 2006 we entered into interest rate swap agreements which effectively fixed our interest rate on a portion of the outstanding Term Loan amount at 5.064% (plus a 1.25% margin) for a period of three years. As a result of mandatory principal prepayments, approximately 53% of our Term Loan was hedged by interest rate swap agreements at December 31, 2007.

(14)    Derivative Financial Instruments

Derivative Financial Instruments

        All derivative instruments are recorded on the consolidated statements of financial condition at fair value in other assets or accounts payable and accrued expenses. Recognition of the gain or loss that results from recording and adjusting a derivative to fair value depends on the intended purpose for entering into the derivative contract. Gains and losses from derivatives that are not accounted for as hedges under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities", are recognized immediately in earnings. For derivative instruments that are designated and qualify as a fair value hedge, the gains or losses from adjusting the derivative to its fair value will be immediately recognized in earnings and, to the extent the hedge is effective, offset the concurrent recognition of changes in the fair value of the hedged item. Gains or losses from derivative instruments that are designated and qualify as a cash flow hedge will be recorded on the consolidated statements of financial condition in accumulated other comprehensive income until the hedged transaction is recognized in earnings; however, to the extent the hedge is deemed ineffective, the ineffective portion of the change in fair value of the derivative will be recognized immediately in earnings. For discontinued cash flow hedges, prospective changes in the fair value of the derivative are recognized in income. Any gain or loss in accumulated other comprehensive income at the time the hedge is discontinued continues to be deferred until the original forecasted transaction occurs. However, if it is determined that the likelihood of the original forecasted transaction is no longer probable, the entire related gain or loss in accumulated other comprehensive income is immediately reclassified into income.

Cash Flow Hedges

        During the first quarter of 2006, we entered into interest rate swaps to hedge the variability of our LIBOR-based interest payments that we believed were probable to occur over the next three years. The interest rate swaps were designated as the hedging instruments in a cash flow hedge. For interest rate swaps designated as cash flow hedges, we measure effectiveness using the Hypothetical Derivative Method, which compares the change in fair value of the actual swap designated as the hedging instrument and the change in the fair value of the hypothetical swap, which has terms that identically match the critical terms of the floating rate liabilities. We also monitor the abilities of counterparties to fully satisfy their obligations under the swap agreements. During 2007, the quarterly net settlements from these swaps increased interest expense by approximately $0.4 million. Based on the current

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

interest rate environment, approximately $0.3 million of the after-tax realized loss within accumulated other comprehensive income is expected to be reclassified in the next twelve months.

        The following table summarizes our derivative and debt related financial instruments at December 31 (dollars in thousands):

	Asset / (Liability)
	Carrying Value						Fair Value
	2007			2006			2007			2006
Long term debt	$	(132,500	)	$	(160,900	)	$	(132,500	)	$	(160,900	)
Interest rate swap		(807	)		9			(807	)		9

(15)    Other Comprehensive Income

        The components and allocated tax effects of other comprehensive income for the year ended December 31, 2007 are as follows (dollars in thousands):

		Before Tax Effects			Tax Effects			After Tax Effects
Currency translation adjustment		$	20,385		$	—		$	20,385
Unrealized holding gain on securities, available-for-sale			91			(37	)		54
Unrealized loss on hedging activities			(807	)		328			(479	)
	Total	$	19,669		$	291		$	19,960

        Unrealized holding gains on securities, available-for-sale relates to the NYX Shares we received as part of the NYSE Merger on March 9, 2006.

        Deferred taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries or the cumulative translation adjustment related to those investments since such amounts are expected to be reinvested indefinitely.

(16)    Related Party Transactions

        Prior to the IRESS Sale in 2006, we contracted with KTG Technologies Corp. to provide both ITG Canada and ITG Inc. with equity trading systems, market data, and destination/market connectivity. In 2006, ITG Canada paid approximately $0.2 million for these services. ITG Canada and ITG Inc. paid approximately $0.8 million and $0.1 million, respectively for the same services in 2005. Additionally, ITG Canada charged the Canadian joint venture with IRESS approximately $0.2 million in 2005 for facilities and managed services. ITG Canada did not provide the Canadian joint venture with either of these services during 2006, the year which our ownership interest in the joint venture was sold.

        In conjunction with the joint venture agreement with Merrill, we contracted with BLOCKalert to provide it with the use of our technology and other services. ITG earned approximately $3.0 million and $0.8 million for these services provided to BLOCKalert during 2007 and 2006, respectively. Additionally, ITG paid BLOCKalert approximately $0.1 million for the use of the software.

(17)    Off-Balance Sheet Risk and Concentration of Credit Risk

        In the normal course of business, we are involved in the execution of various customer securities transactions. Securities transactions are subject to the credit risk of counterparties or customer

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

non-performance. In connection with the settlement of non-U.S. securities transactions, we have provided third party financial institutions with guarantees in amounts up to a maximum of $129.1 million. In the event that a customer of one of our subsidiaries fails to settle a securities transaction, or if the related subsidiaries were unable to honor trades with a customer, we would be required to perform for the amount of such securities up to the $129.1 million cap. However, transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through settlement date. Therefore, the settlement of these transactions is not expected to have a material effect upon our financial statements. It is also our policy to review, as necessary, the credit worthiness of each counterparty and customer.

        The Company's customer financing and securities settlement activities may require the Company to pledge customer securities as collateral in support of various secured financing transactions such as bank loans. In the event the counterparty is unable to meet its contractual obligation to return customer securities pledged as collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its customer obligations. The Company controls this risk by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral levels in the event of excess market exposure.

        Financial instruments that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, securities owned, at fair value, receivables from brokers, dealers and clearing organizations and receivables from customers. Cash and cash equivalents and securities owned, at fair value are deposited with high credit quality financial institutions.

(18)    Net Capital Requirement

        ITG Inc., AlterNet, Blackwatch and ITG Derivatives are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. ITG Inc. has elected to use the alternative method permitted by Rule 15c3-1, which requires that ITG Inc. maintain minimum net capital equal to the greater of $1.0 million or 2% of aggregate debit balances arising from customer transactions. AlterNet, ITG Execution Services, ITG Derivatives and Blackwatch have elected to use the basic method permitted by Rule 15c3-1, which requires that they maintain minimum net capital equal to the greater of $100,000 for AlterNet and ITG Derivatives and $5,000 for each of ITG Execution Services and Blackwatch, or 6²/3% of aggregate indebtedness.

        Our net capital balances and the amounts in excess of required net capital at December 31, 2007 for our U.S. Operations are as follows (dollars in millions):

U.S. Operations	Net Capital		Excess Net Capital
ITG Inc.	$	114.0	$	111.0
AlterNet		2.8		2.7
Blackwatch		6.5		6.3
ITG Derivatives		1.2		1.0

        Dividends or withdrawals of capital cannot be made to the Company from these entities if they are needed to comply with regulatory requirements.

        As of May 1, 2007, ITG Inc. changed its business model from a fully disclosed introducing broker-dealer to a self-clearing broker-dealer and its minimum net capital requirement as defined under Rule 15c3-1 increased to $1.0 million from $250,000.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        As of December 31, 2007, ITG Inc. had a $30.7 million cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule pursuant to Securities and Exchange Commission Rule 15c3-3, "Computation for Determination of Reserve Requirements".

        In addition, our Canadian and International Operations had regulatory capital in excess of the minimum requirements applicable to each business as of December 31, 2007 as summarized in the following table (dollars in millions):

	Excess Net Capital
Canadian Operations
Canada	$	26.9
International Operations
Australia	$	5.7
Europe		22.3
Hong Kong		27.5
Japan		2.2

(19)    Stockholders' Equity

        Our dividend policy is to retain earnings to finance the operations and expansion of our businesses. As a result, we do not anticipate paying cash dividends on our common stock at this time.

        As part of our share repurchase program, our Board of Directors authorized management to use its discretion to purchase an agreed-upon maximum number of shares of common stock in the open market or in negotiated transactions. On July 22, 2004, our Board of Directors authorized the repurchase of up to 2.0 million shares of our common stock. The authorization, which had no expiration date, was publicly announced as part of our 2004 Annual Report on Form 10-K filed on March 15, 2005. The July 22, 2004 authorization was reaffirmed by our Board of Directors on August 6, 2007. During 2007, we repurchased approximately 1.3 million shares of our common stock at a cost of approximately $50.3 million, which was funded from our available cash resources.

(20)    Employee and Non Employee Director Stock and Benefit Plans

        At December 31, 2007, we had an equity plan for our employees. The 2007 Omnibus Equity Compensation Plan (the "2007 Plan") was approved by our stockholders, and became effective, on May 8, 2007 (the "Effective Date"). As of the Effective Date, the Investment Technology Group, Inc. Non-Employee Directors' Stock Option Plan (the "Non-Employee Directors' Stock Option Plan"), the Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the "1994 Plan"), our prior equity plan for our employees, the Stock Unit Award Program Subplan, as amended and restated (the "SUA"), the Amended and Restated Investment Technology Group, Inc. Directors' Retainer Fee Subplan (the "Directors' Retainer Fee Subplan"), and the Amended and Restated Investment Technology Group, Inc. Directors' Equity Subplan (the "Directors' Equity Subplan", and collectively with the SUA and the Directors' Retainer Fee Subplan, the "Subplans") were merged with and into the 2007 Plan. No additional grants have been, or will be, made after the Effective Date under the Non-Employee Directors' Stock Option Plan or the 1994 Plan. Outstanding grants under the Non-Employee Directors' Stock Option Plan, the 1994 Plan and the Subplans as of the Effective Date will continue in effect according to their terms as in effect on the Effective Date (subject to such amendments as the compensation committee determines appropriate, consistent with the terms of the Non-Employee Directors' Stock Option Plan, the 1994 Plan or the Subplans, as applicable), and the shares with respect to such outstanding grants will be issued or transferred under the 2007 Plan. After

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the Effective Date, the Subplans shall continue in effect as subplans of the 2007 Plan and grants and/or deferrals may continue to be made under the Subplans.

        Under the 2007 Plan, awards of 5,186,208 shares of our common stock are reserved for issuance under the plan. Shares of common stock which are attributable to awards which have expired, terminated or been canceled or forfeited during any calendar year are generally available for issuance or use in connection with future awards. Options that have been granted under the 2007 Plan are exercisable on dates ranging through June 2012. The 2007 Plan will remain in effect until May 7, 2017, unless sooner terminated, or extended, by the Board of Directors with the approval of our stockholders. After this date, no further awards shall be granted pursuant to the 2007 Plan, but previously granted awards shall remain outstanding in accordance with their applicable terms and conditions, as stated in the 2007 Plan.

        In June 1995, the Board of Directors adopted, subject to stockholder approval, the Non-Employee Directors' Stock Option Plan, which was amended and restated in May 2002, and merged into the 2007 Plan as referenced above. Through 2005, the Non-Employee Directors' Stock Option Plan generally provided for an annual grant to each non-employee director of an option to purchase 6,141 shares of common stock. In addition, the Non-Employee Directors' Stock Option Plan provided for the automatic grant to a non-employee director, at the time he or she is initially elected, of a stock option to purchase 24,564 shares of common stock. Stock options granted under the Non-Employee Directors' Stock Option Plan are non-qualified stock options having an exercise price equal to the fair market value of the common stock at the date of grant. All stock options granted pursuant to the Non-Employee Directors' Stock Option Plan through January 21, 2003 became exercisable three months after the date of grant. All options granted subsequent to January 21, 2003 vest and become exercisable in equal installments on or about the first, second, and third anniversaries of the grant date. Stock options granted under the Non-Employee Directors' Stock Option Plan expire five years after the date of grant. A total of 557,050 shares of common stock have been reserved for issuance under the Non-Employee Directors' Stock Option Plan. No additional grants will be made under the Non-Employee Directors' Stock Option Plan.

        In January 2006, the Board of Directors adopted the Directors' Equity Subplan which became effective January 1, 2006 and merged into the 2007 Plan as referenced above. The Directors' Equity Subplan was amended and restated on February 7, 2008 to reflect certain modifications necessary to comply with the requirements of section 409A of the Internal Revenue Code. The Directors' Equity Subplan provides for the grant of options and restricted share awards to non-employee directors of the Company. Under the Director's Equity Subplan, a newly appointed non-employee director will be granted (A) stock options valued at $100,000 and (B) restricted share awards valued at $100,000 at, or shortly after, the time of appointment to the Board of Directors. In addition, non-employee directors will be granted (A) stock options valued at $36,000 and (B) restricted share awards valued at $36,000 annually, on the forty fifth (45th) day following each of the Company's annual meetings of stockholders. All stock options are non-qualified options, will expire five years after the date of grant and will have an exercise price equal to the fair market value of the Company's stock at the time of grant. All stock options and restricted share awards will vest in three equal annual installments, beginning on the first anniversary of the date of grant.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Under the 1994 Plan, the Company was, and under the 2007 Plan the Company is, permitted to grant performance-based stock options, in addition to time-based option awards. In 2007 and 2006, the Company did not grant any such awards under the 2007 Plan or the 1994 Plan, while 35,000 were granted in 2005 under the 1994 Plan. Such awards were granted to select employees that vest, in whole or in part, on the third anniversary of the grant only if consolidated cumulative three year pre-tax operating income of the Company reaches certain levels. The Company recognizes stock-based compensation expense (see Note 2, "Summary of Significant Accounting Policies") for both time-based and performance-based awards over the vesting period. The performance-based options vest at the end of the three year period and could result in no options actually being granted as a result of not meeting the three-year performance metric. The option summary tables below include 100% of the options issued regardless of management's estimate of the likelihood of achieving the performance metric.

        A summary of the status of our stock option plans as of December 31, 2007, 2006 and 2005 and changes during the years ended on those dates is presented below:

Options Outstanding		Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2004		4,223,077		$	23.44
	Granted	365,910			23.87
	Exercised	(649,237	)		27.98
	Forfeited	(1,440,094	)		19.70
Outstanding at December 31, 2005		2,499,656			24.97
	Granted	190,030			44.98
	Exercised	(839,927	)		34.02
	Forfeited	(278,009	)		27.80
Outstanding at December 31, 2006		1,571,750			22.05
	Granted	23,318			43.09
	Exercised	(654,549	)		18.54
	Forfeited	(18,326	)		33.10
Outstanding at December 31, 2007		922,193		$	24.86
Amount exercisable at December 31,
	2007	441,716		$	16.87
	2006	399,453			24.23
	2005	1,166,485			33.31

        Our net income for 2007, 2006, and 2005 includes approximately $2.1 million, $4.1 million and $1.5 million, respectively, of compensation costs and income tax benefits of $0.9 million, $1.6 million and $0.6 million, respectively, related to our stock option plans.

        The weighted average remaining contractual term of stock options currently exercisable is 1.70 years.

        The provision for income taxes excludes current tax benefits related to the exercise of stock options. For the years ended December 31, 2007, 2006 and 2005, those benefits totaled $6.3 million, $3.2 million, and $1.6 million, respectively. Such benefits are reflected as increases in stockholders' equity.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        The following table summarizes information about stock options outstanding at December 31, 2007:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$12.50 - 12.59	243,896	1.32	$	12.50	243,896	$	12.50
12.60 - 18.94	160,521	1.82		16.47	117,333		15.58
18.95 - 25.37	44,304	2.37		20.55	32,022		20.38
25.38 - 32.88	239,000	2.58		25.38	—		—
32.89 - 46.49	234,472	3.68		43.75	48,465		39.69
$12.50 - 46.49	922,193	2.38	$	24.86	441,716	$	16.87

        The following table summarizes information about stock options outstanding at December 31, 2007, 2006 and 2005:

($ in thousands, except per share amounts)	2007		2006		2005
Total intrinsic value of stock options exercised	$	16,619	$	9,879	$	5,017
Weighted average grant date fair value of stock options granted during period, per share		15.07		16.89		8.65

        As of December 31, 2007, there was $2.7 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized ratably over a weighted average period of approximately 1.53 years.

        Cash received from stock option exercises during 2007, 2006 and 2005 were approximately $12.3 million, $28.6 million and $18.2 million, respectively. Stock option exercises are settled from issuance of common shares held in treasury, to the extent available.

        Under the 2007 Plan, the Company was, and under the 2007 Plan the Company is permitted to grant restricted share awards. In 2007, 2006 and 2005, 33,451, 219,678, and 162,873 restricted shares, with weighted fair values of $39.15, $43.76, and $25.34, respectively, were granted to certain employees that generally either vest solely contingent upon continued employment through the third anniversary of the grant or cliff vest after three years in whole or in part only if the consolidated cumulative pre-tax operating income of the Company reaches certain levels (i.e., performance restricted stock). Accordingly, not all restricted shares awarded will vest and be delivered. The Company recognizes stock based compensation expense (see Note 2 "Summary of Significant Accounting Policies") over this three-year period. For the years ended December 31, 2007, 2006 and 2005, the Company recorded stock-based compensation expense of $4.9 million, $2.7 million, and $1.5 million, respectively related to restricted share awards which is included in compensation and employee benefits in the consolidated statements of income, as well as, tax benefits of $2.0 million, $1.1 million and $0.6 million, respectively.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        A summary of the status of our restricted share awards as of December 31, 2007, 2006 and 2005 and changes during the years ended on those dates are presented below:

		Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2004		80,908		$	15.33
	Granted	162,873			25.34
	Vested	—			—
	Forfeited	(12,524	)		20.15
Outstanding at December 31, 2005		231,257			22.12
	Granted	219,678			43.76
	Vested	(4,227	)		36.01
	Forfeited	(19,031	)		22.69
Outstanding at December 31, 2006		427,677			33.07
	Granted	33,451			39.15
	Vested	(84,304	)		20.77
	Forfeited	(17,994	)		36.00
Outstanding at December 31, 2007		358,830		$	36.38

        As of December 31, 2007, there was $6.5 million of total unrecognized compensation cost related to grants of restricted share awards. These costs are expected to be recognized over a weighted average period of approximately 1.30 years. During 2007, restricted shares with a grant date fair value of approximately $1.8 million vested.

        The provision for income taxes excludes current tax benefits related to the vesting of restricted share awards. For the year ended December 31, 2007, those benefits totaled approximately $1.5 million. Such benefit is reflected as an increase in stockholders' equity.

ITG Stock Unit Award Program

        Effective January 1, 1998, selected members of senior management and other key employees participated in the SUA, a mandatory tax-deferred compensation program established under the 1994 Plan and which was later merged into the 2007 Plan as referenced above. Under the SUA, selected participants of the Company were required to defer receipt of (and thus defer taxation on) a graduated portion of their total cash compensation for units representing common stock equal in value to 115% of the compensation deferred. The units were to be settled on or after the third anniversary of the date of grant.

        Effective June 30, 2003, the SUA was amended prospectively to include mandatory participation for all employees earning total cash compensation per annum of $200,000 and greater. The amended plan also deferred receipt of (and thus taxation on) a graduated portion of their total cash compensation for units representing the Company's common stock equal in value to 130% of the compensation deferred. The units representing 100% of the total compensation deferred are at all times fully vested and non-forfeitable; however the units are restricted to settlement to common shares half of which are to be distributed on the third anniversary of the deferral and the remaining half on the sixth anniversary of the deferral. The match representing 30% of the compensation deferred is contingent only on employment with the Company and vests 50% on the third anniversary of the deferral and the remaining 50% on the sixth year of the deferral.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Effective January 1, 2006, the SUA was amended to make participation in the plan among eligible participants (employees earning total cash compensation per annum of $200,000 and greater) elective, rather than mandatory. In addition, beginning January 1, 2006, the plan deferred receipt of (and thus taxation on) a graduated portion of their total cash compensation for units representing the Company's common stock equal in value to 120% of the compensation deferred. The units representing 100% of the total compensation deferred are at all times fully vested and non-forfeitable; however the units are restricted to settlement to common shares distributed in whole on the third anniversary of the deferral. The match representing 20% of the compensation deferred is contingent only on employment with the Company and vests 100% on the third anniversary of the deferral.

        Our net income for 2007, 2006, and 2005 includes $1.1 million, $0.8 million and $0.4 million, respectively of additional compensation costs (relating to a pro rata portion of all unvested excess SUA employer matches), as well as related income tax benefits of approximately $0.5 million, $0.3 million, and $0.2 million, respectively.

        During 2007, 2006, and 2005, we granted 197,428, 189,781 and 320,140 units, respectively, to the employees in the SUA. During 2007, 2006, and 2005, we issued 106,973, 138,655 and 110,464 shares, respectively, of our common stock in connection with the SUA that have vested. A summary of activity under the SUA is as follows:

		Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2004		758,024		$	20.96
	Granted	320,140			20.73
	Vested	(166,229	)		36.15
	Forfeited	(9,424	)		18.38
Outstanding at December 31, 2005		902,511			18.11
	Granted	189,781			39.79
	Vested	(206,830	)		18.49
	Forfeited	(4,556	)		25.28
Outstanding at December 31, 2006		880,906			22.65
	Granted	197,428			42.69
	Vested	(163,724	)		15.18
	Forfeited	(4,239	)		19.95
Outstanding at December 31, 2007		910,371		$	28.35

        As of December 31, 2007, there was $3.0 million of total unrecognized compensation cost related to grants under the SUA. These costs are expected to be recognized over a weighted average period of approximately 1.2 years. The total fair value of shares vested under the SUA during the twelve months ended December 31, 2007 was approximately $7.0 million. Shares issued under the SUA are from common shares held in treasury, to the extent available.

ITG Employee and Non Employee Director Benefit Plans

        All U.S. employees are eligible to participate in the Investment Technology Group, Inc. Retirement Savings Plan ("RSP") and the Investment Technology Group, Inc. Money Purchase Pension Plan ("MPP"). On January 16, 2007, the MPP merged into the RSP. This merger had no effect upon the benefits conferred by these plans. These plans include all eligible compensation (base salary, bonus, commissions, options and overtime) up to the Internal Revenue Service annual maximum, or $225,000 for 2007. The plans' features include a guaranteed Company contribution of 3% of eligible pay to be

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

made to all eligible employees regardless of participation in the RSP, a discretionary Company contribution based on total consolidated Company profits between 0% and 8% of eligible compensation regardless of participation in the RSP and a Company matching contribution of 66²/3% of voluntary employee contributions up to a maximum of 6% of eligible compensation per year. Most of our international employees have similar defined contribution plans. The costs for these benefits were approximately $15.4 million, $14.3 million and $10.0 million in 2007, 2006 and 2005, respectively, and are included in compensation and employee benefits in the consolidated statements of income.

        Commencing in 2006, directors who were not our employees received an annual retainer fee of $60,000, with the exception of the external lead Director and chairman who received $90,000, under the Directors' Retainer Fee Subplan, which was adopted in 2002. Prior to 2006, directors who were not our employees received an annual retainer fee of $50,000, with the exception of the external lead Director who received $75,000. This retainer fee is payable, at the election of each director, either in (i) cash, (ii) ITG common stock with a value equal to the retainer fee on the grant date or (iii) under a deferred compensation plan which provides deferred share units with a value equal to the retainer fee on the grant date which convert to freely sellable shares when the director retires from our Board of Directors. Directors who chose deferred share units received 6,335 units, 4,688 units, and 1,977 units in 2007, 2006 and 2005, respectively. The cost of the Directors' Retainer Fee Subplan was approximately $681,200, $619,500 and $317,000 in 2007, 2006, and 2005, respectively, and is included in other general and administrative expenses in the consolidated statements of income.

        In November 1997, our Board of Directors approved the ITG Employee Stock Purchase Plan ("ESPP"), an employee stock purchase plan qualified under Section 423 of the Internal Revenue Code. The ESPP became effective February 1, 1998 and allows all full-time employees to purchase shares of our common stock at a 15% discount through automatic payroll deductions. In accordance with the provisions of FAS 123R, the ESPP is compensatory. For the years ended December 31, 2007, 2006 and 2005, the Company recorded stock based compensation expense of approximately $740,000, $576,000 and $251,000, respectively. Shares distributed under the ESPP are newly issued shares.

(21)    Earnings Per Share

        The weighted average number of outstanding shares for the years ended December 31, 2007, 2006 and 2005 were 44.0 million, 43.4 million and 42.2 million, respectively.

        The following is a reconciliation of the basic and diluted earnings per share computations for the years ended December 31 (dollars in thousands, except per share amounts):

		2007		2006		2005
Net income for basic and diluted earnings per share		$	111,107	$	97,923	$	67,686
Shares of common stock and common stock equivalents:
	Weighted average number of common shares		44,042		43,350		42,152
	Weighted average shares used in basic computation		44,042		43,350		42,152
	Effect of dilutive securities		742		939		239
	Weighted average shares used in diluted computation		44,784		44,289		42,391
Earnings per share:
	Basic	$	2.52	$	2.26	$	1.61
	Diluted	$	2.48	$	2.21	$	1.60

        At December 31, 2007, 2006 and 2005, approximately 207,000, 64,000 and 1,988,000, respectively, were not included in the computation of diluted earnings per share because their effects would have been anti-dilutive.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(22)    Commitments and Contingencies

Legal Matters

        We are periodically involved in litigation and various legal matters that arise in the normal course of business, including proceedings relating to regulatory matters. Such matters are subject to many uncertainties and outcomes are not predictable. At the current time, we do not believe any of these matters will have a material adverse effect on our financial position or future results of operations.

Lease commitments

        We have entered into lease and sublease agreements with third parties for certain offices and equipment, which expire at various dates through 2018. Rent expense for the years ended December 31, 2007, 2006 and 2005 was $14.1 million, $12.4 million and $8.0 million, respectively, and is recorded in occupancy and equipment expense in the consolidated statements of income. We recognize rent expense for escalation clauses, rent holidays, leasehold improvement incentives and other concessions using the straight-line method over the minimum lease term. Minimum future rental commitments under non-cancelable operating leases follow (dollars in thousands):

Year Ending December 31,
2008		$	13,347
2009			12,506
2010			11,017
2011			10,408
2012			7,757
2013 and thereafter			14,451
	Total	$	69,486

Other commitments

        On January 3, 2006, we entered into a $225 million credit agreement fully underwritten by a syndicate of banks and other financial institutions. The credit agreement consists of a five-year Term Loan in the amount of $200 million and a five-year revolving facility in the amount of $25 million, as described more fully in Note 13, "Long Term Debt". The current borrowings under the Term Loan bear interest based upon the Three-Month LIBOR plus a margin of 1.25%. Principal and interest payments on the term loan are due on a quarterly basis. The remaining scheduled principal repayments and estimated interest payments total $144.3 million.

        Pursuant to employment arrangements expiring in 2009, we are obligated to pay certain employees aggregate minimum compensation of $2.9 million and $0.9 million in the years ending December 31, 2008 and 2009, respectively. In the event of termination of employment without cause prior to their respective expiration, these agreements provide for aggregate severance payments totaling the lower of $3.8 million or the remaining minimum compensation due, net of payments made through the termination date.

        Pursuant to contracts expiring through 2012, we are obligated to purchase market data, maintenance and other services totaling $26.5 million.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(23)    Segment Reporting

        Segment information is presented in accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information".

        The Company realigned its management hierarchy in conformity with its strategy of managing business operations, planning and resource allocation as three separate and distinct businesses. Effective January 1, 2007, the Company has three operating segments: U.S. Operations, Canadian Operations and International Operations.

        The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers executing in U.S. markets. The Canadian Operations segment provides trading, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as "Asia Pacific"), as well as a research and development facility in Israel.

        The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company allocates resources to, and evaluates performance of, its reportable segments based on income before income tax expense. Consistent with the Company's allocation and evaluation methodology, the effects of inter-segment activities are eliminated and revenues are attributed to each segment based upon the location of execution of the related transaction in the information presented below.

        A summary of the segment financial information is as follows (dollars in thousands):

	U.S. Operations		Canadian Operations		International Operations			Consolidated
2007
Total revenues	$	546,036	$	74,226	$	110,737		$	730,999
Income before income tax expense		165,953		20,512		2,403			188,868
Identifiable assets		1,021,907		245,116		833,864			2,100,887
Capital purchases		18,786		5,254		3,628			27,668
2006
Total revenues	$	475,963	$	54,903	$	68,618		$	599,484
Income before income tax expense		148,112		17,442		(3,590	)		161,964
Identifiable assets		782,700		197,549		482,063			1,462,312
Capital purchases		19,043		774		2,902			22,719
2005
Total revenues	$	316,182	$	34,052	$	57,927		$	408,161
Income before income tax expense		103,957		5,515		(376	)		109,096
Identifiable assets		460,515		106,860		448,959			1,016,334
Capital purchases		8,027		465		1,560			10,052

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Revenue and long-lived assets, classified by the geographic region in which the Company operates, are as follows (dollars in thousands):

		2007		2006		2005
Revenues: Year Ended December 31,
United States		$	546,036	$	475,963	$	316,182
Canada			74,226		54,903		34,052
Europe			80,233		48,147		40,516
All other			30,504		20,471		17,411
	Total	$	730,999	$	599,484	$	408,161
Long-lived Assets at December 31,
United States		$	500,136	$	458,557	$	188,255
Canada			5,646		1,497		4,214
Europe			38,064		38,175		33,834
All other			6,677		6,207		4,353
	Total	$	550,523	$	504,436	$	230,656

        The Company's long-lived assets primarily consist of premises and equipment, capitalized software, goodwill, intangibles, debt issuance costs and investments in unconsolidated affiliates.

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INVESTMENT TECHNOLOGY GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(24)    Supplementary Financial Information (unaudited)

        The following tables set forth certain unaudited financial data for our quarterly operations in 2007 and 2006. The following information has been prepared on the same basis as the annual information presented elsewhere in this report and, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for the quarterly periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

		(Unaudited) December 31, 2007								(Unaudited) December 31, 2006
$ in thousands, expect per share amounts		Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Total revenues		$	196,585	$	189,835	$	175,651	$	168,928	$	153,117	$	146,566	$	153,559	$	146,242
Expenses:
	Compensation and employee benefits		62,518		62,806		59,630		58,515		55,689		53,005		50,749		51,977
	Transaction processing		33,159		29,188		24,330		25,326		22,732		20,391		19,738		17,843
	Occupancy and equipment		12,991		11,913		11,220		11,220		10,572		9,655		9,586		8,483
	Telecommunications and data processing services		11,165		10,937		9,900		9,134		7,806		8,006		7,702		6,895
	Other general and administrative		23,724		23,053		21,353		19,606		18,419		16,797		15,347		13,908
	Interest expense		2,415		2,579		2,664		2,785		2,942		3,098		3,157		3,023
Total expenses			145,972		140,476		129,097		126,586		118,160		110,952		106,279		102,129
Income before income tax expense			50,613		49,359		46,554		42,342		34,957		35,614		47,280		44,113
Income tax expense			20,607		20,179		19,343		17,632		12,902		14,005		19,428		17,706
Net income		$	30,006	$	29,180	$	27,211	$	24,710	$	22,055	$	21,609	$	27,852	$	26,407
Basic earnings per share		$	0.69	$	0.66	$	0.61	$	0.56	$	0.51	$	0.50	$	0.64	$	0.61
Diluted earnings per share		$	0.68	$	0.65	$	0.60	$	0.55	$	0.49	$	0.49	$	0.63	$	0.60
Basic weighed average number of common shares outstanding			43,659		44,100		44,338		44,074		43,649		43,436		43,304		43,001
Diluted weighted average number of common shares outstanding			44,351		44,813		45,047		44,838		44,554		44,397		44,265		43,733

        Earnings per share for quarterly periods are based on the weighted average common shares outstanding in individual quarters; thus, the sum of earnings per share of the quarters may not equal the amounts reported for the full year.

		(Unaudited) December 31, 2007								(Unaudited) December 31, 2006
As a percentage of Total Revenues		Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Total revenues		100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Expenses:
Compensation and employee benefits		31.8		33.1		33.9		34.6		36.4		36.2		33.0		35.5
Transaction processing		16.9		15.4		13.9		15.0		14.8		13.9		12.9		12.2
Occupancy and equipment		6.6		6.3		6.4		6.6		6.9		6.6		6.2		5.8
Telecommunications and data processing services		5.7		5.8		5.6		5.4		5.1		5.5		5.0		4.7
Other general and administrative		12.1		12.1		12.2		11.6		12.0		11.5		10.0		9.5
	Interest expense	1.2		1.4		1.5		1.6		1.9		2.1		2.1		2.1
Total expenses		74.3		74.1		73.5		74.8		77.1		75.8		69.2		69.8
Income before income tax expense		25.7		25.9		26.5		25.2		22.9		24.2		30.8		30.2
Income tax expense		10.5		10.6		11.0		10.4		8.4		9.6		12.7		12.1
Net income		15.2	%	15.3	%	15.5	%	14.8	%	14.5	%	14.6	%	18.1	%	18.1	%

83

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        There were no changes in, or disagreements with, accountants reportable herein.

Item 9A.    Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

        Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Changes in Internal Control over Financial Reporting

        There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management's Report on Internal Control Over Financial Reporting

        The management of Investment Technology Group, Inc. ("ITG") is responsible for establishing and maintaining adequate internal control over financial reporting. ITG's internal control over financial reporting is a process designed under the supervision of ITG's chief executive and chief financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of ITG's financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

        Management assessed the effectiveness of ITG's internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment and those criteria, management believes that ITG maintained effective internal control over financial reporting as of December 31, 2007.

        ITG acquired RedSky Financial, LLC (now ITG Derivatives) during 2007. Internal control over financial reporting for ITG Derivatives, which is associated with total assets of $27 million and total revenues of $8 million included in the consolidated financial statements of ITG as of and for the year ended December 31, 2007, have been excluded from management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2007.

84

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Investment Technology Group, Inc.:

        We have audited Investment Technology Group, Inc.'s internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material risk exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, Investment Technology Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

        The Company acquired RedSky Financial, LLC (now ITG Derivatives) during 2007, and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2007, ITG Derivatives's internal control over financial reporting associated with total assets of $27 million and total revenues of $8 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2007. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of ITG Derivatives.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition of Investment Technology Group, Inc., as of December 31, 2007 and 2006, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated February 29, 2008, expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

New York, New York

February 29, 2008

85

Item 9B.    Other Information

        None

PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        Information with respect to this item is contained in the Proxy Statement for the 2008 Annual Meeting of Stockholders, which is incorporated herein by reference.

Item 11.    Executive Compensation

        Information with respect to this item is contained in the Proxy Statement for the 2008 Annual Meeting of Stockholders, which is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
                  Matters

        Information with respect to this item is contained in the Proxy Statement for the 2008 Annual Meeting of Stockholders, which is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

        Information with respect to this item is contained in the Proxy Statement for the 2008 Annual Meeting of Stockholders, which is incorporated herein by reference.

Item 14.    Principal Accounting Fees and Services

        Information with respect to this item is contained in the Proxy Statement for the 2008 Annual Meeting of Stockholders, which is incorporated herein by reference.

86

PART IV

Item 15.    Exhibits, Financial Statement Schedules

(a)(1)    Financial Statements

        Included in Part II of this report:

	Page
Independent Auditors' Report	47
Consolidated Statements of Financial Condition	48
Consolidated Statements of Income	49
Consolidated Statements of Changes in Stockholders' Equity	50
Consolidated Statements of Cash Flows	51
Notes to Consolidated Financial Statements	52

(a)(2)    Schedules

        Schedules are omitted because the required information either is not applicable or is included in the financial statements or the notes thereto.

(a)(3)    Exhibits

Exhibits Number	Description
2.1	Agreement and Plan of Merger, dated July 12, 2005 by and among the Company, Macgregor, and Hedgehog Acquisition Inc., a wholly owned subsidiary of ITG, and Steven D. Levy, as representative of the security holders of MacGregor (incorporated by reference as Exhibit 2.1 to Form 8-K dated July 18, 2005).
3.1	Certificate of Incorporation of the Company (incorporated by reference as Exhibit 3.1 to the Annual Report on Form 10-K for the year ended December 31, 1999).
3.2	Amended and Restated By-laws of the Company (incorporated by reference as Exhibit 3 to the Form 8-K dated February 15, 2007).
4.1	Form of Certificate for Common Stock of the Company (incorporated by reference as Exhibit 4.1 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.1	Joint Venture Interest Purchase Agreement, between Morgan Stanley Capital International, Inc., Barra Posit Inc., Investment Technology Group, Inc., ITG Capital, Inc. and ITG Software Solutions, Inc., dated December 15, 2004 (incorporated by reference as Exhibit 99.1 to Form 8-K dated December 17, 2004).
10.2	Fully Disclosed Clearing Agreement, dated as of January 1, 1999, by and between Jefferies & Company, Inc. and ITG Inc. (incorporated by reference as Exhibit 10.2.3 to the Annual Report on Form 10-K for the year ended December 31, 1998).
10.3	Amended and Restated 1994 Stock Option and Long-Term Incentive Plan (incorporated by reference as Exhibit A to the 1997 Proxy Statement on Form DEF 14A).
10.3.1	Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-Term Incentive Plan effective May 8, 2007 (incorporated by reference as Exhibit 10.2 to Form 10-Q dated November 8, 2007).

87

10.4		Non-Employee Directors' Stock Option Plan (incorporated by reference as Appendix A to the 1996 Proxy Statement on Form DEF 14A).
10.4.1		Amended and Restated Non-Employee Directors' Stock Option Plan (incorporated by reference as Exhibit 10.3.2 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.4.2		Amendment to Amended and Restated Non-Employee Directors Stock Option Plan (incorporated by reference as Exhibit 10.1 to Form 8-K dated August 11, 2006).
10.5		Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 1.1 to Form 8-K dated January 25, 2006).
10.5.1		Amendment to Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 10.3 to Form 8-K dated August 11, 2006).
10.5.2		Amended and Restated Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 10.5 to Form 10-Q dated November 11, 2007).
10.5.3	*	Amended and Restated Investment Technology Group, Inc. Directors' Equity Subplan (effective February 8, 2008).
10.6		Form of Stock Option Agreement between the Company and Non Employee Directors of the Company (2004) (incorporated by reference as Exhibit 10.3.7 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.6.1		Form of Stock Option Agreement between the Company and Non Employee Directors of the Company (2006) (incorporated by reference as Exhibit 10.4 to Form 8-K dated August 11, 2006).
10.6.2		Form of Amendment to Non-Employee Directors' Stock Option Agreements (incorporated by reference as Exhibit 10.2 to Form 8-K dated August 11, 2006).
10.7		Form of Restricted Share Unit Agreement between Investment Technology Group, Inc. and Non-Employee Directors of the Company (2006) (incorporated by reference as Exhibit 10.3 to Form 10-Q dated November 9, 2006).
10.8		Form of Stock Option Agreement between the Company and certain employees of the Company (incorporated by reference as Exhibit 10.4.3 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.8.1		Amended Form of Stock Option Agreement between the Company and certain employees of the Company (2003), (incorporated by reference as Exhibit 10.3.3 to Annual Report on Form 10-K for the year ended December 31, 2003).
10.8.2		Form of Stock Option Agreement between the Company and certain employees of the Company (2005) (incorporated by reference as Exhibit 10.3.5 to Annual report on Form 10-K for the year ended December 31, 2005).
10.9		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2004) (incorporated by reference as Exhibit 10.3.13 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.9.1		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2005, Performance Vesting) (incorporated by reference as Exhibit 10.3.6 to Annual report on Form 10-K for the year ended December 31, 2005).

88

10.9.2		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2005) (incorporated by reference as Exhibit 10.3.7 to Annual report on Form 10-K for the year ended December 31, 2005).
10.9.3		Form of Restricted Share Agreement between the Company and certain employees of the Company (2006) (incorporated by reference as Exhibit 10.3.16 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.10		Form of Change in Control Agreement (incorporated by reference as Exhibit 10.1 to Form 8-K dated May 15, 2006).
10.10.1	*	Form of Change of Control Agreement (2007).
10.10.2	*	Form of Amendment to Change of Control Agreement (2007).
10.11		Stock Option Agreement between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.1 to Form 10-Q dated November 9, 2006).
10.12		Restricted Share Agreement between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.2 to Form 10-Q dated November 9, 2006).
10.13		Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (incorporated by reference as Exhibit B to the 1997 Proxy Statement on Form DEF 14A).
10.13.1		Amended and Restated Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (incorporated by reference as Exhibit A to the 2003 Proxy Statement on Form DEF 14A).
10.13.2	*	Amended and Restated Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (effective February 7, 2008).
10.14		Sixth Amended and Restated Stock Unit Award Program (incorporated by reference as Exhibit 10.3.21 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.14.1		Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program (incorporated by reference as Exhibit 10.3 to Form 10-Q dated November 8, 2007).
10.14.2	*	Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program (effective January 1, 2008).
10.15		Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.3.1A to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.15.1		First Amendment to Investment Technology Group, Inc. Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.3.6 to the Annual Report on Form 10-K for the year ended December 31, 2004).
10.15.2		Second Amendment to Investment Technology Group, Inc. Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.8 to Form 10-Q dated November 8, 2007).
10.16		Investment Technology Group, Inc. Deferred Compensation Plan, dated as of January 1, 1999 (incorporated by reference as Exhibit 10.4.7 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.17		Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr., dated December 16, 2004 (incorporated by reference as Exhibit 99.1 to Form 8-K/A dated December 20, 2004).

89

10.17.1		Amendment dated September 15, 2006 to Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr. dated October 1, 2004 (incorporated by reference as Exhibit 10.2 to Form 8-K dated September 20, 2006).
10.17.2		Amendment dated December 19, 2006 to Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr. dated October 1, 2004 (incorporated by reference as Exhibit 10.1 to Form 8-K filed December 21, 2006).
10.17.3		Employee Advisor Agreement dated February 27, 2007 between Investment Technology Group, Inc. and Raymond L. Killian, Jr. (incorporated by reference as Exhibit 10.3.28 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.18		Employment Agreement dated September 15, 2006, between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.1 to Form 8-K dated September 20, 2006).
10.19		Investment Technology Group, Inc. Directors' Retainer Fee Subplan (incorporated by reference as Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended September 27, 2002).
10.19.1		Amended and Restated Investment Technology Group, Inc. Directors' Retainer Fee Subplan (incorporated by reference as Exhibit 10.5 to Form 10-Q dated November 11, 2007).
10.19.2	*	Amended and Restated Investment Technology Group, Inc. Directors' Retainer Fee Subplan (effective February 7, 2008).
10.20		Lease, dated July 11, 1990, between AEW/LBA Acquisition Co. LLC (as successor to 400 Corporate Pointe, Ltd.) and Integrated Analytics Corporation, as assigned by Integrated Analytics Corporation to the Company (incorporated by reference as Exhibit 10.3.3 to Registration Statement).
10.20.1		First Amendment to Lease, dated as of June 1, 1995, between AEW/LBA Acquisition Co. LLC (as successor to 400 Corporate Pointe, Ltd.) and the Company (incorporated by reference as Exhibit 10.5.7 to Annual Report of Form 10-K for the year ended December 31, 1996).
10.20.2		Second Amendment to Lease, dated as of December 5, 1996, between Arden Realty Limited Partnership and the Company (incorporated by reference as Exhibit 10.5.2 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.20.3		Third Amendment to Lease, dated as of March 13, 1998 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.5.3 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.20.4		Fourth Amendment to Lease, dated as of February 29, 2000 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.5.4 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.20.5		Fifth Amendment to Lease, dated June 29, 2000 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.5 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.20.6		Sixth Amendment to Lease, dated August 28, 2001 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.6 to the Annual Report on Form 10-K for the year ended December 31, 2006).

90

10.20.7		Seventh Amendment to Lease, dated December 15, 2004 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.7 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.20.8		Eighth Amendment to Lease, dated November 29, 2005 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.8 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.21		Lease, dated as of February 29, 2000 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.5.5 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.21.1		First Amendment to Lease, dated as of April 1, 2000, between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.5.6 to the Annual Report on Form 10-K for the year ended December 31, 2001).
10.21.2		Second Amendment to Lease, dated December 15, 2004 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.4.11 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.21.3		Third Amendment to Lease, dated November 29, 2005 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.4.12 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.22		Lease, dated October 4, 1996, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.3 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.1		First Supplemental Agreement, dated as of January 29, 1997, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.4 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.2		Second Supplemental Agreement, dated as of November 25, 1997, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.5 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.3		Third Supplemental Agreement dated as of September 29, 1999 between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.9 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.22.4		Fourth Supplemental Agreement dated as of February 21, 2006 between TAG 380, LLC and the Company (incorporated by reference as Exhibit 10.4.17 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.23		Credit Agreement, dated January 3, 2006, by and among the Company, Bank of America, N.A., as syndication agent, U.S. Bank, National Association, as documentation agent, JPMorgan Chase Bank, N.A., as administrative agent, and the several banks and other financial institutions who become parties thereto as lenders (incorporated by reference as Exhibit 1.1 to Form 8-K dated January 9, 2006).
10.24	*	Form of Investment Technology Group, Inc. Nonqualified Stock Option Agreement for Employees (2007).
10.25	*	Form of Investment Technology Group, Inc. Stock Unit Grant Agreement for Employees (2007).
10.26	*	Form of Investment Technology Group, Inc. Performance Stock Unit Grant Agreement for Employees (2007).

91

10.27		Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (incorporated by reference as Exhibit 10.1 to Form 10-Q dated November 8, 2007).
10.27.1	*	Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (effective February 7, 2008).
10.28		Form of Investment Technology Group, Inc. Stock Unit Grant Agreement for Non-Employee Directors (incorporated by reference as Exhibit 10.4 to Form 10-Q dated November 8, 2007).
10.29		Form of Investment Technology Group, Inc. Non-Qualified Stock Option Grant Agreement for Non-Employee Directors (incorporated by reference as Exhibit 10.7 to Form 10-Q dated November 8, 2007).
10.30	*	Lease, dated as of August 15, 2000 between Boston Wharf Co. and The Macgregor Group, Inc.
10.30.1	*	Consent to Assignment of Lease, dated as of March 31, 2006, between W2005 BWH III Realty, L.L.C., The Macgregor Group, Inc. and Investment Technology Group, Inc.
10.31	*	Lease, dated as of March 10, 1995, between Boston Wharf Co. and Investment Technology Group, Inc.
10.31.1	*	Assignment of Lease, dated as of April 27, 1999, between Boston Wharf Co. and Investment Technology Group, Inc.
10.31.2	*	Amendment to Lease, dated as of July 23, 2003, between Boston Wharf Co. and Investment Technology Group, Inc.
10.32	*	Lease, dated February 7, 2007 and effective January 8, 2007, between Mizuho Corporate Bank Ltd and Investment Technology Group Europe Limited.
10.33	*	Lease, dated August 17, 1998, between Industrial Development Agency (Ireland)(with assignment to Joseph Cosgrave, Peter Cosgrave and Michael Cosgrave) and Investment Technology Group Limited.
10.33.1	*	License, dated January 10, 2007, between Joseph Cosgrave, Peter Cosgrave and Michael Cosgrave and Investment Technology Group Limited.
10.34	*	Agreement relating to the provision of Back Office Services, dated July 3, 1998, between Pershing Limited and Investment Technology Group Limited.
10.35	*	Employment Agreement, dated as of November 17, 1998, between Investment Technology Group Europe Limited and Alasdair Haynes.
10.36	*	Form of Non-Qualified Stock Option Grant Agreement between Investment Technology Group, Inc and Robert C. Gasser.
14	*	Investment Technology Group, Inc. Code Of Ethics
21	*	Subsidiaries of Company.
23	*	Consent of KPMG LLP.
31.1	*	Rule 13a-14(a) Certification
31.2	*	Rule 13a-14(a) Certification
32.1	*	Section 1350 Certification

*

Filed herewith

92

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INVESTMENT TECHNOLOGY GROUP, INC.
By:	/s/  HOWARD C. NAPHTALI Howard C. Naphtali Chief Financial Officer and Duly Authorized Signatory of Registrant

Dated: February 29, 2008

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons and on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/  MAUREEN O'HARA Maureen O'Hara	Chairman of Board of Directors	February 29, 2008
/s/  ROBERT C. GASSER Robert C. Gasser	Chief Executive Officer, President and Director	February 29, 2008
/s/  HOWARD C. NAPHTALI Howard C. Naphtali	Managing Director and Chief Financial Officer (Principal Financial Officer)	February 29, 2008
/s/  ANGELO BULONE Angelo Bulone	Managing Director and Controller (Principal Accounting Officer)	February 29, 2008
/s/  J. WILLIAM BURDETT J. William Burdett	Director	February 29, 2008
/s/  WILLIAM I JACOBS William I Jacobs	Director	February 29, 2008
/s/  TIMOTHY L. JONES Timothy L. Jones	Director	February 29, 2008
/s/  ROBERT L. KING Robert L. King	Director	February 29, 2008
/s/  KEVIN J.P. O'HARA Kevin J.P. O'Hara	Director	February 29, 2008
/s/  BRIAN STECK Brian Steck	Director	February 29, 2008

94

(b)

Index to Exhibits

Exhibits Number		Description
2.1		Agreement and Plan of Merger, dated July 12, 2005 by and among the Company, Macgregor, and Hedgehog Acquisition Inc., a wholly owned subsidiary of ITG, and Steven D. Levy, as representative of the security holders of MacGregor (incorporated by reference as Exhibit 2.1 to Form 8-K dated July 18, 2005).
3.1		Certificate of Incorporation of the Company (incorporated by reference as Exhibit 3.1 to the Annual Report on Form 10-K for the year ended December 31, 1999).
3.2		Amended and Restated By-laws of the Company (incorporated by reference as Exhibit 3 to the Form 8-K dated February 15, 2007).
4.1		Form of Certificate for Common Stock of the Company (incorporated by reference as Exhibit 4.1 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.1		Joint Venture Interest Purchase Agreement, between Morgan Stanley Capital International, Inc., Barra Posit Inc., Investment Technology Group, Inc. ITG Capital, Inc. and ITG Software Solutions, Inc., dated December 15, 2004 (incorporated by reference as Exhibit 99.1 to Form 8-K dated December 17, 2004).
10.2		Fully Disclosed Clearing Agreement, dated as of January 1, 1999, by and between Jefferies & Company, Inc. and ITG Inc. (incorporated by reference as Exhibit 10.2.3 to the Annual Report on Form 10-K for the year ended December 31, 1998).
10.3		Amended and Restated 1994 Stock Option and Long-Term Incentive Plan (incorporated by reference as Exhibit A to the 1997 Proxy Statement on Form DEF 14A).
10.3.1		Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-Term Incentive Plan effective May 8, 2007 (incorporated by reference as Exhibit 10.2 to Form 10-Q dated November 8, 2007).
10.4		Non-Employee Directors' Stock Option Plan (incorporated by reference as Appendix A to the 1996 Proxy Statement on Form DEF 14A).
10.4.1		Amended and Restated Non-Employee Directors' Stock Option Plan (incorporated by reference as Exhibit 10.3.2 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.4.2		Amendment to Amended and Restated Non-Employee Directors Stock Option Plan (incorporated by reference as Exhibit 10.1 to Form 8-K dated August 11, 2006).
10.5		Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 1.1 to Form 8-K dated January 25, 2006).
10.5.1		Amendment to Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 10.3 to Form 8-K dated August 11, 2006).
10.5.2		Amended and Restated Investment Technology Group, Inc. Directors' Equity Subplan (incorporated by reference as Exhibit 10.5 to Form 10-Q dated November 11, 2007).
10.5.3	*	Amended and Restated Investment Technology Group, Inc. Directors' Equity Subplan (effective February 8, 2008).

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10.6		Form of Stock Option Agreement between the Company and Non Employee Directors of the Company (2004) (incorporated by reference as Exhibit 10.3.7 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.6.1		Form of Stock Option Agreement between the Company and Non Employee Directors of the Company (2006) (incorporated by reference as Exhibit 10.4 to Form 8-K dated August 11, 2006).
10.6.2		Form of Amendment to Non-Employee Directors' Stock Option Agreements (incorporated by reference as Exhibit 10.2 to Form 8-K dated August 11, 2006).
10.7		Form of Restricted Share Unit Agreement between Investment Technology Group, Inc. and Non-Employee Directors of the Company (2006) (incorporated by reference as Exhibit 10.3 to Form 10-Q dated November 9, 2006).
10.8		Form of Stock Option Agreement between the Company and certain employees of the Company (incorporated by reference as Exhibit 10.4.3 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.8.1		Amended Form of Stock Option Agreement between the Company and certain employees of the Company (2003), (incorporated by reference as Exhibit 10.3.3 to Annual Report on Form 10-K for the year ended December 31, 2003).
10.8.2		Form of Stock Option Agreement between the Company and certain employees of the Company (2005) (incorporated by reference as Exhibit 10.3.5 to Annual report on Form 10-K for the year ended December 31, 2005).
10.9		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2004) (incorporated by reference as Exhibit 10.3.13 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.9.1		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2005, Performance Vesting) (incorporated by reference as Exhibit 10.3.6 to Annual report on Form 10-K for the year ended December 31, 2005).
10.9.2		Form of Restricted Stock Agreement between the Company and certain employees of the Company (2005) (incorporated by reference as Exhibit 10.3.7 to Annual report on Form 10-K for the year ended December 31, 2005).
10.9.3		Form of Restricted Share Agreement between the Company and certain employees of the Company (2006) (incorporated by reference as Exhibit 10.3.16 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.10		Form of Change in Control Agreement (incorporated by reference as Exhibit 10.1 to Form 8-K dated May 15, 2006).
10.10.1	*	Form of Change of Control Agreement (2007).
10.10.2	*	Form of Amendment to Change of Control Agreement (2007).
10.11		Stock Option Agreement between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.1 to Form 10-Q dated November 9, 2006).
10.12		Restricted Share Agreement between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.2 to Form 10-Q dated November 9, 2006).

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10.13		Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (incorporated by reference as Exhibit B to the 1997 Proxy Statement on Form DEF 14A).
10.13.1		Amended and Restated Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (incorporated by reference as Exhibit A to the 2003 Proxy Statement on Form DEF 14A).
10.13.2	*	Amended and Restated Investment Technology Group, Inc. Pay-For-Performance Incentive Plan (effective February 7, 2008).
10.14		Sixth Amended and Restated Stock Unit Award Program (incorporated by reference as Exhibit 10.3.21 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.14.1		Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program (incorporated by reference as Exhibit 10.3 to Form 10-Q dated November 8, 2007).
10.14.2	*	Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program (effective January 1, 2008).
10.15		Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.3.1A to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.15.1		First Amendment to Investment Technology Group, Inc. Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.3.6 to the Annual Report on Form 10-K for the year ended December 31, 2004).
10.15.2		Second Amendment to Investment Technology Group, Inc. Employee Stock Purchase Plan (incorporated by reference as Exhibit 10.8 to Form 10-Q dated November 8, 2007).
10.16		Investment Technology Group, Inc. Deferred Compensation Plan, dated as of January 1, 1999 (incorporated by reference as Exhibit 10.4.7 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.17		Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr., dated December 16, 2004 (incorporated by reference as Exhibit 99.1 to Form 8-K/A dated December 20, 2004).
10.17.1		Amendment dated September 15, 2006 to Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr. dated October 1, 2004 (incorporated by reference as Exhibit 10.2 to Form 8-K dated September 20, 2006).
10.17.2		Amendment dated December 19, 2006 to Employment Agreement between Investment Technology Group, Inc. and Raymond L. Killian, Jr. dated October 1, 2004 (incorporated by reference as Exhibit 10.1 to Form 8-K filed December 21, 2006).
10.17.3		Employee Advisor Agreement dated February 27, 2007 between Investment Technology Group, Inc. and Raymond L. Killian, Jr. (incorporated by reference as Exhibit 10.3.28 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.18		Employment Agreement dated September 15, 2006, between Investment Technology Group, Inc. and Robert C. Gasser (incorporated by reference as Exhibit 10.1 to Form 8-K dated September 20, 2006).
10.19		Investment Technology Group, Inc. Directors' Retainer Fee Subplan (incorporated by reference as Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended September 27, 2002).

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10.19.1		Amended and Restated Investment Technology Group, Inc. Directors' Retainer Fee Subplan (incorporated by reference as Exhibit 10.5 to Form 10-Q dated November 11, 2007).
10.19.2	*	Amended and Restated Investment Technology Group, Inc. Directors' Retainer Fee Subplan (effective February 7, 2008).
10.20		Lease, dated July 11, 1990, between AEW/LBA Acquisition Co. LLC (as successor to 400 Corporate Pointe, Ltd.) and Integrated Analytics Corporation, as assigned by Integrated Analytics Corporation to the Company (incorporated by reference as Exhibit 10.3.3 to Registration Statement).
10.20.1		First Amendment to Lease, dated as of June 1, 1995, between AEW/LBA Acquisition Co. LLC (as successor to 400 Corporate Pointe, Ltd.) and the Company (incorporated by reference as Exhibit 10.5.7 to Annual Report of Form 10-K for the year ended December 31, 1996).
10.20.2		Second Amendment to Lease, dated as of December 5, 1996, between Arden Realty Limited Partnership and the Company (incorporated by reference as Exhibit 10.5.2 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.20.3		Third Amendment to Lease, dated as of March 13, 1998 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.5.3 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.20.4		Fourth Amendment to Lease, dated as of February 29, 2000 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.5.4 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.20.5		Fifth Amendment to Lease, dated June 29, 2000 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.5 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.20.6		Sixth Amendment to Lease, dated August 28, 2001 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.6 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.20.7		Seventh Amendment to Lease, dated December 15, 2004 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.7 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.20.8		Eighth Amendment to Lease, dated November 29, 2005 between Arden Realty Finance Partnership, L.P. and the Company (incorporated by reference as Exhibit 10.4.8 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.21		Lease, dated as of February 29, 2000 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.5.5 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.21.1		First Amendment to Lease, dated as of April 1, 2000, between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.5.6 to the Annual Report on Form 10-K for the year ended December 31, 2001).
10.21.2		Second Amendment to Lease, dated December 15, 2004 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.4.11 to the Annual Report on Form 10-K for the year ended December 31, 2006).

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10.21.3		Third Amendment to Lease, dated November 29, 2005 between Arden Realty Finance IV, L.L.C. and the Company (incorporated by reference as Exhibit 10.4.12 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.22		Lease, dated October 4, 1996, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.3 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.1		First Supplemental Agreement, dated as of January 29, 1997, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.4 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.2		Second Supplemental Agreement, dated as of November 25, 1997, between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.5 to the Annual Report on Form 10-K for the year ended December 31, 1997).
10.22.3		Third Supplemental Agreement dated as of September 29, 1999 between Spartan Madison Corp. and the Company (incorporated by reference as Exhibit 10.5.9 to the Annual Report on Form 10-K for the year ended December 31, 1999).
10.22.4		Fourth Supplemental Agreement dated as of February 21, 2006 between TAG 380, LLC and the Company (incorporated by reference as Exhibit 10.4.17 to the Annual Report on Form 10-K for the year ended December 31, 2006).
10.23		Credit Agreement, dated January 3, 2006, by and among the Company, Bank of America, N.A., as syndication agent, U.S. Bank, National Association, as documentation agent, JPMorgan Chase Bank, N.A., as administrative agent, and the several banks and other financial institutions who become parties thereto as lenders (incorporated by reference as Exhibit 1.1 to Form 8-K dated January 9, 2006).
10.24	*	Form of Investment Technology Group, Inc. Nonqualified Stock Option Agreement for Employees (2007).
10.25	*	Form of Investment Technology Group, Inc. Stock Unit Grant Agreement for Employees (2007).
10.26	*	Form of Investment Technology Group, Inc. Performance Stock Unit Grant Agreement for Employees (2007).
10.27		Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (incorporated by reference as Exhibit 10.1 to Form 10-Q dated November 8, 2007).
10.27.1	*	Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (effective February 7, 2008).
10.28		Form of Investment Technology Group, Inc. Stock Unit Grant Agreement for Non-Employee Directors (incorporated by reference as Exhibit 10.4 to Form 10-Q dated November 8, 2007).
10.29		Form of Investment Technology Group, Inc. Non-Qualified Stock Option Grant Agreement for Non-Employee Directors (incorporated by reference as Exhibit 10.7 to Form 10-Q dated November 8, 2007).
10.30	*	Lease, dated as of August 15, 2000 between Boston Wharf Co. and The Macgregor Group, Inc.
10.30.1	*	Consent to Assignment of Lease, dated as of March 31, 2006, between W2005 BWH III Realty, L.L.C., The Macgregor Group, Inc. and Investment Technology Group, Inc.

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10.31	*	Lease, dated as of March 10, 1995, between Boston Wharf Co. and Investment Technology Group, Inc.
10.31.1	*	Assignment of Lease, dated as of April 27, 1999, between Boston Wharf Co. and Investment Technology Group, Inc.
10.31.2	*	Amendment to Lease, dated as of July 23, 2003, between Boston Wharf Co. and Investment Technology Group, Inc.
10.32	*	Lease, dated February 7, 2007 and effective January 8, 2007, between Mizuho Corporate Bank Ltd and Investment Technology Group Europe Limited.
10.33	*	Lease, dated August 17, 1998, between Industrial Development Agency (Ireland)(with assignment to Joseph Cosgrave, Peter Cosgrave and Michael Cosgrave) and Investment Technology Group Limited.
10.33.1	*	License, dated January 10, 2007, between Joseph Cosgrave, Peter Cosgrave and Michael Cosgrave and Investment Technology Group Limited.
10.34	*	Agreement relating to the provision of Back Office Services, dated July 3, 1998, between Pershing Limited and Investment Technology Group Limited.
10.35	*	Employment Agreement, dated as of November 17, 1998, between Investment Technology Group Europe Limited and Alasdair Haynes.
10.36	*	Form of Non-Qualified Stock Option Grant Agreement between Investment Technology Group, Inc and Robert C. Gasser.
14	*	Investment Technology Group, Inc. Code Of Ethics
21	*	Subsidiaries of Company.
23	*	Consent of KPMG LLP.
31.1	*	Rule 13a-14(a) Certification
31.2	*	Rule 13a-14(a) Certification
32.1	*	Section 1350 Certification

*

Filed herewith

See list of exhibits at Item 15(a)(3) above and exhibits following.

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QuickLinks

DOCUMENTS INCORPORATED BY REFERENCE
2007 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS
FORWARD-LOOKING STATEMENTS
PART I

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders

PART II

Item 5. Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities

ISSUER PURCHASES OF EQUITY SECURITIES

Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm
INVESTMENT TECHNOLOGY GROUP, INC. Consolidated Statements of Financial Condition (In thousands, except par value and share amounts)
INVESTMENT TECHNOLOGY GROUP, INC. Consolidated Statements of Income (In thousands, except per share amounts)
INVESTMENT TECHNOLOGY GROUP, INC. Consolidated Statements of Changes in Stockholders' Equity For the Years Ended December 31, 2007, 2006 and 2005 (In thousands, except share amounts)
INVESTMENT TECHNOLOGY GROUP, INC. Consolidated Statements of Cash Flows (In thousands)
INVESTMENT TECHNOLOGY GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INVESTMENT TECHNOLOGY GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures

Report of Independent Registered Public Accounting Firm

Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules

SIGNATURES

EX-10.5.3

Exhibit 10.5.3

AMENDED AND RESTATED
INVESTMENT TECHNOLOGY GROUP, INC.
DIRECTORS’ EQUITY SUBPLAN

1.           Introduction.

The Investment Technology Group, Inc. Directors’ Equity Subplan (the “Subplan”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”) and was merged with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8, 2007, the terms of which are incorporated herein by reference, and is now amended and restated as set forth herein, effective February 7, 2008 (the “Effective Date”).  Effective as of May 8, 2007, the Subplan continued in effect according to the terms set forth herein as a subplan under the 2007 Plan.  The purpose of the Subplan is to promote ownership by non-employee directors of a greater proprietary interest in the Company, thereby aligning such non-employee directors’ interests more closely with the interests of stockholders of the Company, and to assist the Company in attracting and retaining highly qualified persons to serve as non-employee directors.  The Subplan is amended and restated herein, effective for Options or Stock Units granted on or after the Effective Date.  Options or Stock Units granted prior to the Effective Date shall be governed by the Subplan as in effect prior to this amendment and restatement.

2.           Definitions.

Capitalized terms used in the Subplan but not defined herein shall have the same meanings as defined in the 2007 Plan.  In addition to such terms and the terms defined in Section 1 hereof, the following terms used in the Subplan shall have the meaning set forth below.

(a)          “Director” means a member of the Board who is not employed by the Company or any of its subsidiaries.

(b)         “Disability” shall have the meaning ascribed to such term in section 22(e)(3) of the Code.

(c)          “Effective Date” means the date this Subplan, as amended and restated herein, is approved by the Company’s stockholders.

3.           Administration.

The Subplan shall be administered by the Committee.  The Committee shall have full authority to construe and interpret the Subplan, and any action of the Committee with respect to the Subplan shall be final, conclusive, and binding on all persons.

4.           Options.

(a)          Initial Options.  An Option to purchase a number of shares of Company Stock having a Fair Market Value on the date of grant, based on the Black-Scholes option pricing model (or such other model utilized by the Company in valuing Company equity awards in accordance with U.S. Generally Accepted Accounting Principles), equal to $100,000 will be granted under the Subplan to each person who is first elected or appointed to serve as a Director of the Company after the Effective Date, such grants to be effective on the date of such first election or appointment.  For purposes of this Subplan, all determinations of Fair Market Value of Options using the Black-Scholes option pricing model will be based on the full five year Option term, the volatility assumption for the Company Stock used in the Company’s annual report on Form 10-K for the prior year, and the grant date risk-free interest rate.

(b)         Annual Options.  An Option to purchase a number of shares of Company Stock having a Fair Market Value on the date of grant, based on the Black-Scholes option pricing model (or such other model utilized by the Company in valuing Company equity awards in accordance with U.S. Generally Accepted Accounting Principles), equal to $36,000 will be granted, on the forty fifth (45th) day following each of the Company’s annual meetings of stockholders at which Directors (or a class of Directors if the Company then has a classified Board of Directors) are elected or reelected by the Company’s stockholders, to each Director in office on the date of grant; provided, however, that no such grant will be made to a person first elected or appointed to serve as a Director of the Company at such annual meeting of stockholders.

(c)          Exercise Price.  The exercise price per share of Company Stock purchasable under an Option will be equal to 100% of the Fair Market Value of a share of Company Stock on the date of grant of the Option.

(d)         Option Term.  Each Option will expire five years after the date of grant; provided, however, that if the Participant ceases to serve as a Director of the Company prior to five years after the date of grant, the Option will expire as follows (except as otherwise provided in Section 4(f)): (i) if the Participant ceases to serve as a Director of the Company due to the Participant’s death, Disability, or retirement at or after age 65, twelve months after such cessation of service, but in no event later than five years after the date of grant; and (ii) if the Participant ceases to serve as a Director of the Company for any reason other than due to the Participant’s death, Disability, or retirement at or after age 65, at the date sixty (60) days after such cessation of service, but in no event later than five years after the date of grant.

(e)          Exercisability.  Each Option will vest and become exercisable in three equal annual installments, beginning on the first anniversary of the date of grant and continuing on the following two anniversaries and will thereafter remain exercisable until the Option expires; provided, however, that each Option will vest and become immediately exercisable in full upon a Change in Control.  In the event the Participant ceases to serve as a Director of the Company by reason of the Participant’s death or Disability, the Option shall become vested and exercisable in full at the time of such termination.  In the event the Participant ceases to serve as a Director of the Company for any other reason (except as otherwise provided in Section 4(f) below) any portion of the Option that has not yet vested shall be forfeited.

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(f)          Continued Service as an Employee.  If a Participant ceases serving as a Director and, immediately thereafter, he or she is employed by the Company or any subsidiary, then, solely for purposes of Sections 4(d) and (e) and Sections 5(d) and (e) of the Subplan, such Participant will not be deemed to have ceased service as a Director at that time, and his or her continued employment by the Company or any subsidiary will be deemed to be continued service as a Director; provided, however, that such former Director will not be eligible for additional grants of Options or Stock Units under the Subplan.

(g)         Method of Exercise. A Participant (or other person entitled to exercise an Option) may exercise an Option, in whole or in part, at such time as it is exercisable and prior to its expiration by giving written notice of exercise to the Company specifying the Option to be exercised and the number of shares of Company Stock to be purchased, and paying in full the exercise price as provided in the 2007 Plan.

(h)         Nontransferability.  Options shall not be assignable or transferable by a Participant except by will or the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee), and during the Participant’s lifetime, such Options and rights shall be exercisable only by such the Participant or the Participant’s duly appointed guardian or legal representative.  The foregoing notwithstanding, the Committee may provide that Options (or rights or interests therein), may be transferable, including permitting transfers to a Participant’s immediate family members (i.e., spouse, children, grandchildren, or siblings as well as the Participant), to a trust for the benefits of such immediate family members, and to the partnerships in which such family members are the only parties, or other transfers deemed by the Committee to be not inconsistent with the purposes of the 2007 Plan.

5.           Stock Units.

(a)          Initial Stock Units.  A number of Stock Units having a value, as determined below on the date of grant, equal to $100,000 will be granted under the Subplan to each person who is first elected or appointed to serve as a Director of the Company after the Effective Date, such grants to be effective not later than the thirtieth day following the date of such first election or appointment.  For purposes of this Subplan, all determinations of value of Stock Units shall be made by treating the value of a Stock Unit as equal to the Fair Market Value of a share of Company Stock on the date of grant.

(b)         Annual Stock Units.  A number of Stock Units having a value, as determined above on the date of grant, equal to $36,000 will be granted on the forty fifth (45th) day following each of the Company’s annual meetings of stockholders at which Directors (or a class of Directors if the Company then has a classified Board of Directors) are elected or reelected by the Company’s stockholders, to each Director in office on the date of grant; provided, however, that no such grant will be made to a person first elected or appointed to serve as a Director of the Company at such annual meeting of stockholders.

(c)          Vesting of Award.  The Stock Units will become vested in three equal annual installments, commencing on the first anniversary of the date of grant and continuing thereafter on the second and third anniversaries thereof; provided, however, that the Stock Units will become immediately vested in full upon a Change in Control.  Unless otherwise provided

3

by the Committee, all amounts receivable in connection with any adjustments to the Stock Units under Section 5(d) of the 2007 Plan shall be subject to the vesting schedule in this Section 5(c).

(d)         Termination of Service; Forfeiture of Unvested Share Units.  In the event the Participant ceases to serve as a Director of the Company by reason of the Participant’s death or Disability, the Stock Units shall become vested in full at the time of such termination.  In the event the Participant ceases to serve as a Director of the Company for any other reason (except as otherwise provided in Section 4(f) above) any portion of the Stock Units that have not yet vested shall be forfeited.

(e)          Distribution of Shares.  The Company shall distribute to the Participant (or his or her heirs in the event of the Participant’s death) at the time of vesting of the Stock Units, a number of shares of Company Stock equal to the number of Stock Units then held by the Participant that became vested at such time; provided, however, that the Participant may elect that the distribution of the shares of Company Stock subject to a Stock Unit be deferred until the time the Participant ceases to be a Director of the Company for any reason (except as otherwise provided in Section 4(f)), such election to be made in writing prior to January 1 of the calendar year in which the Stock Units are granted to the Participant.  Notwithstanding the immediately preceding sentence, in the case of Stock Units granted under Section 5(a) hereof, a deferral election may be made within 30 days of the date the Director is first elected or appointed to serve as a Director of the Company.  The deferred Stock Units shall be distributed in shares of Company Stock within 30 days of the date of termination of the Director’s service on the Board.  In the case of the death of a Director, the Director’s deferred Stock Units shall be distributed in shares of Company Stock within 60 days after the date of the Director’s death to the Director’s estate as beneficiary, unless the Director has requested a different distribution by written notice to the Committee.

(f)          Rights and Restrictions.  The Stock Units shall not be transferable, other than pursuant to will or the laws of descent and distribution.  Prior to vesting of the Stock Units and delivery of the shares of Company Stock to the Participant, the Participant shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Units.  Specifically, the Participant shall not have the right to receive dividends or the right to vote such shares of Company Stock prior to vesting of the Stock Units and delivery of the shares of Company Stock.

6.           General.

(a)          Compliance with Legal and Trading Requirements.  The Subplan shall be subject to all applicable laws, rules and regulations, including, but not limited to, federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.

(b)         Amendment.  The Board may amend, alter, suspend, discontinue, or terminate the Subplan without the consent of stockholders of the Company or individual Directors; provided, however, that, without the consent of an affected Director, no amendment, alteration, suspension, discontinuation, or termination of the Subplan may impair or, in any

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other manner, adversely affect the rights of such Director to outstanding Options or Stock Units granted hereunder.

(c)          Unfunded Status of Awards.  Section 5 of this Subplan is intended to constitute an “unfunded” plan of deferred compensation.  With respect to any payments not yet made to a Director, nothing contained in the Subplan shall give any such Director any rights that are greater than those of a general creditor of the Company; provided, however, that the Company may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Subplan to deliver cash, or other property pursuant to any award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Subplan unless the Company otherwise determines with the consent of each affected Director.

(d)         Nonexclusivity of the Subplan.  The adoption of the Subplan by the Board shall not be construed as creating any limitations on the power of the Board to adopt such other compensation arrangements as it may deem desirable, including, without limitation, the granting of Options and other awards otherwise than under the Subplan, and such arrangements may be either applicable generally or only in specific cases.

(e)          Adjustments.  The adjustment provisions in Section 5(d) of the 2007 Plan are incorporated herein by reference and shall apply in the case of Options and Stock Units granted hereunder; provided, however, that no adjustment shall be made pursuant thereto that causes any Option to be treated as deferred compensation pursuant to section 409A of the Code.

(f)          No Right to Remain on the Board.  Neither the Subplan nor the crediting of awards under the Subplan shall be deemed to give any individual a right to remain a director of the Company or create any obligation on the part of the Board to nominate any Director for reelection by the stockholders of the Company.

(g)         Application of Section 409A of the Code.  It is intended that this Subplan and awards issued hereunder will comply with section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the awards are subject thereto, and this Subplan and such awards shall be interpreted on a basis consistent with such intent.  In no event shall a Participant, directly or indirectly, designate the calendar year of payment.  This Subplan and any award agreements issued thereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with section 409A of the Code.

(h)         Governing Law.  The validity, construction, and effect of the Subplan shall be determined in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

(i)           Titles and Headings.  The titles and headings of the Sections in the Subplan are for convenience of reference only.  In the event of any conflict, the text of the Subplan, rather than such titles or headings, shall control.

(j)           Effective Date.  This Subplan, as amended and restated herein shall become effective as of the Effective Date.

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Amended and restated by the Committee effective:	May 8, 2007
Amended and restated by the Committee effective:	February 7, 2008

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EX-10.10.1

Exhibit 10.10.1

CHANGE IN CONTROL AGREEMENT

Agreement, made this        day of                       , 2007, by and between Investment Technology Group, Inc., a Delaware corporation (the “Company”), and                          (the “Executive”).

WHEREAS, the Executive is a key employee of the Company; and

WHEREAS, the Board of Directors of the Company (the “Board”) considers the maintenance of a sound management to be essential to protecting and enhancing the best interests of the Company and its stockholders and recognizes that the possibility of a change in control raises uncertainty and questions among key employees and may result in the departure or distraction of such key employees to the detriment of the Company and its stockholders; and

WHEREAS, the Board wishes to assure that it will have the continued dedication of the Executive and the availability of his or her advice and counsel, notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce the Executive to remain in the employ of the Company; and

WHEREAS, the Executive is willing to continue to serve the Company taking into account the provisions of this Agreement;

NOW, THEREFORE, in consideration of the foregoing, and the respective covenants and agreements of the parties herein contained, the parties agree as follows:

1.          Operation and Term of Agreement.  This Agreement shall commence on the date set forth above and shall terminate on the second anniversary of such date unless this Agreement is extended, as set forth below; provided, however, that after a Change in Control of the Company during the term of this Agreement, this Agreement shall remain in effect until all of the obligations of the parties hereunder are satisfied and the Protection Period has expired.  The term of this Agreement shall be extended automatically at the end of the initial term and the end of any extended term for an additional period of two years unless either party shall provide written notice to the other of its intention not to so extend, such notice to be given not less than one year prior to the end of the initial term or any extension thereof, as the case may be.  Notwithstanding the foregoing, prior to a Change in Control this Agreement shall immediately terminate upon termination of the Executive’s employment, except in the case of such termination under circumstances set forth in the last paragraph of Section 3 below.

2.          Definitions.  For purposes of this Agreement, the following terms have the meanings set forth below:

“Cause” shall mean the occurrence of any one or more of the following: (i) the Executive’s willful failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed his duties, and the Executive has failed to remedy the situation within fifteen (15) business days of such written notice from the Company; (ii) gross negligence in the performance of the Executive’s duties which results in material financial harm to the Company; (iii) the Executive’s conviction of, or plea of guilty or nolo contendere, to any felony or any other crime involving the personal enrichment of the Executive at the expense of the Company; (iv) the Executive’s willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise; or (v) the Executive’s willful material violation of any provision of the Company’s code of conduct.

“Change in Control” means and shall be deemed to have occurred:

(i)      if any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Company or a Related Party, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 35% percent or more of the total voting power of all the then-outstanding Voting Securities; or

(ii)     if the individuals who, as of the date hereof, constitute the Board, together with those who first become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of the date hereof or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(iii)    upon consummation of a merger, consolidation, recapitalization or reorganization of the Company, reverse split of any class of Voting Securities, or an acquisition of securities or assets by the Company other than (i) any such transaction in which the holders of outstanding Voting Securities immediately prior to the transaction receive (or retain), with respect to such Voting Securities, voting securities of the surviving or transferee entity representing more than 50 percent of the total voting power outstanding immediately after such transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction, or (ii) any such transaction which would result in a Related Party beneficially owning more than 50 percent of the voting securities of the surviving or transferee entity outstanding immediately after such transaction; or

(iv)    upon consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets, other than any such transaction which would

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result in a Related Party owning or acquiring more than 50 percent of the assets owned by the Company immediately prior to the transaction; or

(v)     if the stockholders of the Company approve a plan of complete liquidation of the Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Disability” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

“Good Reason” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one or more of the following:

(i)a material reduction of the Executive’s primary functional authorities, duties, or responsibilities as an executive and/or officer of the Company from those in effect immediately prior to the Change in Control or the assignment of duties to the Executive inconsistent with those of an executive of the Company, other than an insubstantial and inadvertent reduction or assignment that is remedied by the Company promptly after receipt of notice thereof given by the Executive; provided, however, that any reduction in authorities, duties or responsibilities resulting merely from the acquisition of the Company and its existence as a subsidiary or division of another entity shall not be sufficient to constitute Good Reason;

(ii)the Company’s requiring the Executive to be based at a location in excess of thirty five (35) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control;

(iii)a material reduction by the Company of the Executive’s base salary in effect on the date hereof, or as the same shall be increased from time to time, unless such reduction applies on substantially the same percentage basis to all employees of the Company generally;

(iv)a material reduction in the Executive’s participation in any of the Company’s annual incentive compensation plans in which the Executive participates prior to the Change in Control, unless such failure applies to all plan participants generally;

(v)the failure of the Company to obtain the assumption of the obligations contained in this Agreement by any successor as contemplated in Section 9(c) hereof; and

(vi)a material breach of this Agreement by the Company.

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provided, however, that for any of the foregoing to constitute Good Reason, the Executive must provide written notification of his intention to resign within 30 days after the Executive knows or has reason to know of the occurrence of any such event, and the Company shall have 30 business days from the date of receipt of such notice to effect a cure of the condition constituting Good Reason, and, upon cure thereof by the Company, such event shall no longer constitute Good Reason.  A termination of employment by the Executive within a Protection Period shall be for Good Reason if one of the occurrences specified above shall have occurred, notwithstanding that the Executive may have other reasons for terminating employment, including employment by another employer which the Executive desires to accept.

For purposes of this Agreement, it shall be a material breach of this Agreement by the Company if the Company decreases the Executive’s Target Annual Compensation by more than ten percent (10%).

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

“Protection Period” shall be the period beginning on the date of a Change in Control and ending on the date that is eighteen (18) months after the date on which the Change in Control occurs.

“Related Party” means (a) a Subsidiary of the Company; (b) an employee or group of employees of the Company or any Subsidiary of the Company; (c) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned Subsidiary of the Company; or (d) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of Voting Securities.

“Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (a) if a corporation, fifty (50) percent or more of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or combination thereof; or (b) if a partnership, limited liability company, association or other business entity, fifty (50) percent or more of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes of this definition, a Person or Persons will be deemed to have a fifty (50) percent or more ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons are allocated fifty (50) percent or more of partnership, limited liability company, association or other business entity gains or losses or control the managing

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director or member or general partner of such partnership, limited liability company, association or other business entity.

“Target Annual Compensation” shall mean the sum of the Executive’s base salary and target annual cash incentives as in effect immediately prior to the Change in Control.

“Voting Securities or Security” means any securities of the Company which carry the right to vote generally in the election of directors.

3.          Benefits Upon Termination Within Protection Period.  If, within a Protection Period, the Executive’s employment by the Company shall be terminated (a) by the Company not for Cause and not due to the Executive’s death or Disability, or (b) by the Executive for Good Reason, the Executive shall be entitled to the benefits provided for below:

(i)      the Company shall pay to the Executive, through the date of the Executive’s termination of employment, base salary at the rate then in effect, together with base salary in lieu of vacation accrued to the date on which his employment terminates, in accordance with the standard payroll practices of the Company;

(ii)     the Company shall pay to the Executive an amount in cash equal to the Executive’s target annual bonus for the year that includes the date of the Executive’s termination of employment, pro rated for the number of full and partial months during the bonus year prior to such termination of employment, and such payment shall be made in a lump sum within 10 business days after the date of such termination of employment;

(iii)    the Company shall pay to the Executive an amount in cash equal to          times the sum of (A) the Executive’s annual base salary in effect immediately prior to the date of the Executive’s termination of employment or the date of the Change in Control (whichever is higher), and (B) the average of the Executive’s annual bonuses for the three years immediately preceding the Executive’s termination of employment (or such shorter period during which the Executive has been employed by the Company and eligible to receive annual bonuses, or if the Executive was not employed by the Company and eligible to receive an annual bonus in any prior year, the Executive’s target annual bonus for the year including the date of Executive’s termination of employment); and such payment shall be made in a lump sum within 10 business days after the date of such termination of employment;

(iv)    the Company shall continue to cover the Executive and his or her dependents under, or provide the Executive and his or her dependents with insurance coverage no less favorable than, the Company’s health, dental and vision plans or programs (as in effect on the day immediately preceding the Protection Period or, at the option of the Executive, on the date of termination of his or her employment) for a period equal to the

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lesser of (x)          years following the date of termination or (y) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plans or programs.  The Executive shall promptly inform the Company in writing when he or she obtains other employment and shall provide a written description to the Company of the health, dental and vision plans and programs provided to the Executive by such employer; and

(v)     the Company shall pay to the Executive an amount in cash equal to the premium cost that the Company would have paid to maintain disability and life insurance coverage for the Executive and his or her dependents, as applicable, under the Company’s disability and life insurance plans or programs (in each case, as in effect on the day immediately preceding the Protection Period or, at the option of the Executive, on the date of termination of his or her employment) had the Executive remained employed by the Company for a period equal to the lesser of (x)          years following the date of termination or (y) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such disability and/or life insurance plans or programs; and such payments shall be made on the first payroll date of each month commencing with the first month following the Executive’s termination of employment and each month thereafter until fully paid in accordance with this subparagraph (v).  The Executive shall promptly inform the Company in writing when he or she obtains other employment and shall provide a written description to the Company of the disability and life insurance plans and programs provided to the Executive by such employer.

Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled to the benefits described in this Section 3, if the Executive’s employment with the Company is terminated by the Company (other than for Cause) within six months prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control.  In such event, amounts will be payable hereunder only following the Change in Control.  For the avoidance of doubt, the Executive shall not be entitled to the benefits provided in Section 3 hereof upon any termination of his or her employment with the Company (a) because of his or her death, (b) because of his or her Disability, (c) by the Company for Cause, or (d) by the Executive other than for Good Reason.

4.          Notice of Termination.  Any termination of the Executive’s employment by the Company for Cause or by the Executive for Good Reason shall be communicated by written notice of termination to the other party.  Such notice of termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment for Cause or Good Reason, as the case may be.

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5.          Nonexclusivity of Rights.  Except as expressly set forth herein, this Agreement shall not prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plans, practices, policies or programs provided by the Company or any of its subsidiaries and for which the Executive may qualify, nor shall it limit or otherwise affect such rights as the Executive may have under any stock option, other equity-based compensation or other agreements with the Company or any of its subsidiaries; provided, however, that, in the event benefits are paid to the Executive under Section 3 hereof, the Executive shall not also be entitled to severance benefits otherwise payable under any other severance plan or policy of the Company or a Subsidiary, or under any employment agreement or employment letter agreement between Executive and the Company or a Subsidiary.  Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, practice, policy or program (other than severance benefits) of the Company or any of its subsidiaries at or subsequent to the date of termination of the Executive’s employment shall be payable in accordance with such plan, practice, policy or program.

6.          Full-Settlement; Legal Expenses.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and no amount payable hereunder shall be subject to reduction or offset on account of any subsequent compensation, other than as provided in Sections 3(iv) and 3(v).  The Company agrees to pay, upon written demand therefore by the Executive, all legal fees and expenses which the Executive may reasonably incur as a result of any dispute or contest by or with the Company or others regarding the validity or enforceability of, or liability under, any provision of this Agreement (including as a result of any contest by the Executive about the amount of any payment hereunder) if the Executive prevails on any material claim or defense in the dispute or contest.  The Company will provide such payment or reimbursement, as applicable, within 60 days of the Company’s receipt of the Executive’s demand, but not later than December 31 of the year in which the Executive is determined to have prevailed on any material claim or defense in the dispute or contest.  In any such action brought by the Executive for damages or to enforce any provisions of this Agreement, the Executive shall be entitled to seek both legal and equitable relief and remedies, including, without limitation, specific performance of the Company’s obligations hereunder, in his or her sole discretion.

7.          Excise Tax.

(a)           Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment, distribution or benefit provided (including, without limitation, the acceleration of any payment, distribution or benefit and the acceleration of vesting of any equity-based or other compensation) to the Executive or for his or her benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) would be

7

subject, in whole or in part, to the excise tax imposed by Section 4999 of  the Code (the “Excise Tax”), then the amounts payable to the Executive under this Agreement shall be reduced (by the minimum possible amount) until no amount payable to the Executive is subject to the Excise Tax; provided, however, that no such reduction shall be made if the net after-tax benefit (after taking into account federal, state, local or other income, employment, self-employment and excise taxes) to which the Executive would otherwise be entitled without such reduction would be greater than the net after-tax benefit (after taking into account federal, state, local or other income, employment, self-employment and excise taxes) to the Executive resulting from the receipt of such payments with such reduction.  If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required under this Section 7, then an additional payment shall be made to the Executive in an amount equal to the excess reduction within 60 days of the date on which the amount of the excess reduction is determined but not later than December 31 of the year in which the excess reduction is determined.

(b)           All determinations required to be made under this Section 7, including whether a payment would result in an Excise Tax, shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive as requested by the Company or the Executive.  All fees and expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by the Company.  Except as set forth in the last sentence of Section 7(a) hereof, all determinations made by the Accounting Firm under this Section 7 shall be final and binding upon the Company and the Executive.

8.          Confidential Information.  The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company or any of its Subsidiaries and which has not become public knowledge (other than by acts of the Executive or his or her representatives in violation of this Agreement).  After the date of termination of the Executive’s employment with the Company, the Executive shall not, except as required to be disclosed by court or administrative order or with the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it.  In no event shall an asserted violation of the provisions of this Section 8 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

9.          Successors.

(a)           This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable

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by the Executive’s heirs, executors, administrators, legal representatives or successor(s) in interest.

(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

10.        Miscellaneous.

(a)           This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws thereof.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b)           All notices and other communications hereunder shall be in writing and shall be deemed to have been given when delivered personally to the recipient, two business days after the date when sent to the recipient by reputable express courier service (charges prepaid) or four business days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid.  Such notices and other communications will be sent to the Executive and to the Company at the addresses set forth below.

If to the Executive:

[Name]

[Address]

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention:  General Counsel

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or to such other address as either party shall have furnished to the other in writing in accordance herewith.

(c)           The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d)           The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)           The Executive’s failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f)            This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof but, except as specifically provided in Section 5 hereof does not supersede or override the provisions of any stock option, employee benefit or other plan, program, policy or practice in which Executive is a participant or under which the Executive is a beneficiary.

(g)           This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

11.        Section 409A.

(a)           This Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions on Executive under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  For purposes of section 409A of the Code, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.  In no event shall Executive, directly or indirectly, designate the calendar year of payment.  All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year

10

following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(b)           Notwithstanding any provision of this Agreement to the contrary, if, at the time of Executive’s termination of employment with the Company, the Company has securities which are publicly traded on an established securities market and Executive is a “specified employee” (as defined in section 409A of the Code) and it is necessary to postpone the commencement of any severance payments otherwise payable pursuant to this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under section 409A of the Code, then the Company will postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) that are not otherwise paid within the short-term deferral exception under section 409A of the Code and are in excess of the lesser of (i) two times Executive’s then annual compensation or (ii) two times the limit on compensation then set forth in section 401(a)(17) of the Code, until the first payroll date that occurs after the date that is six months following Executive’s “separation of service” with the Company (as defined under code Section 409A of the Code).  If any payments are postponed due to such requirements, such postponed amounts will be paid in a lump sum to the Executive on the first payroll date that occurs after the date that is six months following the Executive’s “separation of service” with the Company.  If the Executive dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of Executive’s estate within 60 days after the date of Executive’s death.  The Company shall consult with the Executive in good faith regarding the implementation of the provisions of this paragraph.

[Next Page is Signature Page]

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IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board, the Company has caused these presents to be executed as of the day and year first above written.

Name:
INVESTMENT TECHNOLOGY GROUP, INC.
By:
	Name: Robert C. Gasser
	Title: Chief Executive Officer

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EX-10.10.2

Exhibit 10.10.2

AMENDMENT TO

CHANGE IN CONTROL AGREEMENT

This AMENDMENT is made and entered into as of           , 2007, by and between Investment Technology Group, Inc. (the “Company”) and              (the “Executive”).

WHEREAS, the Company and the Executive previously entered into that certain Change in Control Agreement, dated as of                        (the “CIC Agreement”); and

WHEREAS, the parties now wish to amend the CIC Agreement to provide that payments due to the Executive under the CIC Agreement upon the Executive’s termination of employment in connection with a Change in Control (as defined in the CIC Agreement) will be compliant with the applicable requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder.

NOW, THEREFORE, the parties mutually acknowledge and agree that, effective as of the date hereof, the CIC Agreement is hereby amended as follows:

1.The definition of “Good Reason” in Section 2 is hereby deleted and replaced in its entirety with the following:

“Good Reason” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one or more of the following:

(i)a material reduction of the Executive’s primary functional authorities, duties, or responsibilities as an executive and/or officer of the Company from those in effect immediately prior to the Change in Control or the assignment of duties to the Executive inconsistent with those of an executive of the Company, other than an insubstantial and inadvertent reduction or assignment that is remedied by the Company promptly after receipt of notice thereof given by the Executive; provided, however, that any reduction in authorities, duties or responsibilities resulting merely from the acquisition of the Company and its existence as a subsidiary or division of another entity shall not be sufficient to constitute Good Reason;

(ii)the Company’s requiring the Executive to be based at a location in excess of thirty five (35) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control;

(iii)a material reduction by the Company of the Executive’s base salary in effect on the date hereof, or as the same shall be increased from time to time, unless such reduction applies on substantially the same percentage basis to all employees of the Company generally;

(iv)a material reduction in the Executive’s participation in any of the Company’s annual incentive compensation plans in which the Executive participates prior to the Change in Control, unless such failure applies to all plan participants generally;

(v)the failure of the Company to obtain the assumption of the obligations contained in this Agreement by any successor as contemplated in Section 9(c) hereof; and

(vi)a material breach of this Agreement by the Company.

provided, however, that for any of the foregoing to constitute Good Reason, the Executive must provide written notification of his intention to resign within 30 days after the Executive knows or has reason to know of the occurrence of any such event, and the Company shall have 30 business days from the date of receipt of such notice to effect a cure of the condition constituting Good Reason, and, upon cure thereof by the Company, such event shall no longer constitute Good Reason.  A termination of employment by the Executive within a Protection Period shall be for Good Reason if one of the occurrences specified above shall have occurred, notwithstanding that the Executive may have other reasons for terminating employment, including employment by another employer which the Executive desires to accept.

For purposes of this Agreement, it shall be a material breach of this Agreement by the Company if the Company decreases the Executive’s Target Annual Compensation by more than ten percent (10%).

2.Section 3 is hereby deleted and replaced in its entirety with the following:

3.Benefits Upon Termination Within Protection Period.  If, within a Protection Period, the Executive’s employment by the Company shall be terminated (a) by the Company not for Cause and not due to the Executive’s death or Disability, or (b) by the Executive for Good Reason, the Executive shall be entitled to the benefits provided for below:

(i)the Company shall pay to the Executive, through the date of the Executive’s termination of employment, base salary at the rate then in effect, together with base salary in lieu of vacation accrued to the date on which his employment terminates, in accordance with the standard payroll practices of the Company;

(ii)the Company shall pay to the Executive an amount in cash equal to the Executive’s target annual bonus for the year that includes the date of the Executive’s termination of employment, pro rated for the number of full and partial months during the bonus year prior to such termination of employment, and such payment shall be made in a lump sum within 10 business days after the date of such termination of employment;

(iii)the Company shall pay to the Executive an amount in cash equal to            times the sum of (A) the Executive’s annual base salary in effect immediately prior to the date of the Executive’s termination of employment or the date of the Change in Control (whichever is higher), and (B) the average of the Executive’s annual bonuses for the three years immediately preceding the Executive’s termination of employment (or such shorter period during which the Executive has been employed by the Company and eligible to

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receive annual bonuses, or if the Executive was not employed by the Company and eligible to receive an annual bonus in any prior year, the Executive’s target annual bonus for the year including the date of Executive’s termination of employment); and such payment shall be made in a lump sum within 10 business days after the date of such termination of employment;

(iv)the Company shall continue to cover the Executive and his or her dependents under, or provide the Executive and his or her dependents with insurance coverage no less favorable than, the Company’s health, dental and vision plans or programs (as in effect on the day immediately preceding the Protection Period or, at the option of the Executive, on the date of termination of his or her employment) for a period equal to the lesser of (x)          year following the date of termination or (y) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plans or programs.  The Executive shall promptly inform the Company in writing when he or she obtains other employment and shall provide a written description to the Company of the health, dental and vision plans and programs provided to the Executive by such employer; and

(v)the Company shall pay to the Executive an amount in cash equal to the premium cost that the Company would have paid to maintain disability and life insurance coverage for the Executive and his or her dependents, as applicable, under the Company’s disability and life insurance plans or programs (in each case, as in effect on the day immediately preceding the Protection Period or, at the option of the Executive, on the date of termination of his or her employment) had the Executive remained employed by the Company for a period equal to the lesser of (x)        year following the date of termination or (y) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such disability and/or life insurance plans or programs; and such payments shall be made on the first payroll date of each month commencing with the first month following the Executive’s termination of employment and each month thereafter until fully paid in accordance with this subparagraph (v).  The Executive shall promptly inform the Company in writing when he or she obtains other employment and shall provide a written description to the Company of the disability and life insurance plans and programs provided to the Executive by such employer.

Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled to the benefits described in this Section 3, if the Executive’s employment with the Company is terminated by the Company (other than for Cause) within six months prior to the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control.  In such event, amounts will be payable hereunder only following the Change in Control.  For the avoidance of doubt, the Executive shall not be entitled to the benefits provided in Section 3 hereof upon any termination of his or her employment with the Company (a) because of his or her death, (b) because of his or her Disability, (c) by the Company for Cause, or (d) by the Executive other than for Good Reason.

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3.Section 6 is hereby deleted and replaced in its entirety with the following:

6.Full-Settlement; Legal Expenses.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and no amount payable hereunder shall be subject to reduction or offset on account of any subsequent compensation, other than as provided in Sections 3(iv) and 3(v).  The Company agrees to pay, upon written demand therefore by the Executive, all legal fees and expenses which the Executive may reasonably incur as a result of any dispute or contest by or with the Company or others regarding the validity or enforceability of, or liability under, any provision of this Agreement (including as a result of any contest by the Executive about the amount of any payment hereunder) if the Executive prevails on any material claim or defense in the dispute or contest.  The Company will provide such payment or reimbursement, as applicable, within 60 days of the Company’s receipt of the Executive’s demand, but not later than December 31 of the year in which the Executive is determined to have prevailed on any material claim or defense in the dispute or contest.  In any such action brought by the Executive for damages or to enforce any provisions of this Agreement, the Executive shall be entitled to seek both legal and equitable relief and remedies, including, without limitation, specific performance of the Company’s obligations hereunder, in his or her sole discretion.

4.Section 7(a) is hereby deleted and replaced in its entirety with the following:

7.Excise Tax.

(a)Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment, distribution or benefit provided (including, without limitation, the acceleration of any payment, distribution or benefit and the acceleration of vesting of any equity-based or other compensation) to the Executive or for his or her benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) would be subject, in whole or in part, to the excise tax imposed by Section 4999 of  the Code (the “Excise Tax”), then the amounts payable to the Executive under this Agreement shall be reduced (by the minimum possible amount) until no amount payable to the Executive is subject to the Excise Tax; provided, however, that no such reduction shall be made if the net after-tax benefit (after taking into account federal, state, local or other income, employment, self-employment and excise taxes) to which the Executive would otherwise be entitled without such reduction would be greater than the net after-tax benefit (after taking into account federal, state, local or other income, employment, self-employment and excise taxes) to the Executive resulting from the receipt of such payments with such reduction.  If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required under this Section 7, then an additional payment shall be made to the Executive in an amount equal to the excess reduction within 60 days of the date on which the amount of the excess reduction is determined but not later than December 31 of the year in which the excess reduction is determined.

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5.Effective as of the date hereof, a new Section 11 is added to the CIC Agreement to read as follows:

11.Section 409A.

(a)This Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions on Executive under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code.  All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(b)Notwithstanding any provision of this Agreement to the contrary, if, at the time of Executive’s termination of employment with the Company, the Executive has securities which are publicly traded on an established securities market and Executive is a “specified employee” (as defined in section 409A of the Code) and the deferral of the commencement of any severance payments otherwise payable pursuant to this Agreement as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) that are not otherwise paid within the short-term deferral exception under section 409A of the Code and are in excess of the lesser of (i) two times Executive’s then annual compensation or (ii) two times the limit on compensation then set forth in section 401(a)(17) of the Code, until the first payroll date that occurs after the date that is six months following Executive’s “separation of service” with the Company (as defined under code Section 409A of the Code).  If any payments are deferred due to such requirements, such amounts will be paid in a lump sum to the Executive on the first payroll date that occurs after the date that is six months following the Executive’s “separation of service” with the Company.  If the Executive dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of Executive’s estate within 60 days after the date of Executive’s death.  The Company shall consult with the Executive in good faith regarding the implementation of the provisions of this paragraph.

6.In all respects not amended, the CIC Agreement is hereby ratified and confirmed.

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7.For convenience, this Amendment may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

8.This Amendment shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws thereof.

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.

By:

Name: Robert C. Gasser

Title: CEO and President

EXECUTIVE

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EX-10.13.2

Exhibit 10.13.2

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.

PAY-FOR-PERFORMANCE INCENTIVE PLAN

1. PURPOSE

The purpose of this Pay-For-Performance Incentive Plan (the “Plan”) is to assist Investment Technology Group, Inc. (the “Company”) and its subsidiaries in attracting, retaining, and rewarding, by payment of competitive levels of compensation, employees who occupy key positions relating to the Company and specified business units, and motivating such employees to expend greater efforts in promoting the growth and annual profitability of the Company and its subsidiaries, through the award of annual incentives.

2. DEFINITIONS

In addition to the terms defined in Section 1 hereof, the following terms used in the Plan shall have the meanings set forth below:

(a) “Award” means the amount potentially payable to a Participant upon achievement of specified Performance Objectives for a Performance Period, as provided in Section 4, subject to possible forfeiture and other terms and conditions of the Plan.

(b) “Business Unit” means the Company or any department, division, subsidiary, or other business unit or function of the Company for which separate operational financial results are available to the Committee, as designated by the Committee from time to time.

(c) “Business Unit Income” means the pre-tax net income of a specified Business Unit for the Performance Period, subject to the provisions of Section 4(b).

(d) “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation thereunder shall be deemed to include successor provisions or regulations.

(e) “Committee” means the Compensation Committee of the Board of Directors, or such subcommittee thereof as may be designated by the Board of Directors or the Compensation Committee to administer the Plan. In appointing members of the Committee, the Board shall consider whether each member qualifies as an “outside director” for purposes of section 162(m) of the Code and regulations thereunder.

(f)  “Disability” shall have the meaning ascribed to such term in section 22(e)(3) of the Code.

(g) “Eligible Employee” means each executive officer or key employee who is in charge of a Business Unit or whose performance can be expected to have a substantial effect on the results of a Business Unit, as determined by the Committee.

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(h) “Participant” means an Eligible Employee granted an Award by the Committee for a designated Performance Period.

(i) “Performance Objectives” means the measures of performance pre-established by the Committee in accordance with Section 4, the achievement of which, in a given Performance Period, is a condition of payment of final Awards.

(j) “Performance Period” means the fiscal year (or such other period established by the Committee) to which an Award relates; provided, however, that, with respect to any Participant, the Committee may determine to grant an Award after the start of a Performance Period, and for any such Participant, the Performance Period shall be the portion of the fiscal year (or such other period established by the Committee) subsequent to such grant, as determined by the Committee, in each case, in compliance with section 162(m) of the Code.

(k) “Revenues” means all revenues generated by a specified Business Unit for the Performance Period.

(l) “EVA” (economic value added) means the amount by which a Business Unit’s after-tax income exceeds the cost of the capital used by the Business Unit during the Performance Period. To determine such cost of the capital used, the Committee will, when it establishes a Performance Objective based on EVA, determine the average cost of capital for the Company (stated as a percentage) for the Performance Period, which cost of capital will be multiplied by the amount of capital actually used by the Business Unit during the Performance Period.

3. ADMINISTRATION

(a) Generally. The Committee shall administer the Plan in accordance with its terms, and shall have all powers necessary to accomplish such purpose. The Committee shall have the power and authority to construe and interpret the Plan, to define the terms used herein, to prescribe, amend, and rescind rules and regulations as well as forms and notices relating to the administration of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Any action or determination of the Committee with respect to the Plan shall be conclusive and binding upon all persons, including the Company, Participants, and stockholders.

(b) Limitation of Liability. Each member of the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him by any officer or other employee of the Company or any subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant, legal counsel, or other professional retained by the Company to assist in the administration of the Plan. Neither a member of the Committee nor any officer or employee of the Company or a subsidiary acting on behalf of the Committee shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and such persons shall, to the extent permitted by law, be fully indemnified, reimbursed, and protected by the Company, as provided in the

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Company’s Certificate of Incorporation and By-Laws, with respect to any such action, determination, or interpretation.

4. AWARDS

(a) Granting of Awards. Prior to the date on which Performance Objectives must be established in order to comply with section 162(m) of the Code with respect to each Performance Period, the Committee, in its sole discretion, shall select the Eligible Employees to whom Awards will be granted for such Performance Period and will establish the amount of each Award or the formula by which such amount may be determined, the Performance Objectives relating to such Award, and other terms of such Award. An Eligible Employee may be granted an Award for more than one Business Unit.

(b) Performance Objectives. The Performance Objectives for an Award shall consist of a specified percentage or percentages of the Business Unit Income, Revenues and/or EVA of a Business Unit, the results of which the Committee believes will be substantially affected by the performance of the Participant. The Committee may specify that the final Award shall be a payment of such specified percentage or percentages to the Participant, or shall be a payment of an amount specified or determined by formula in some other manner but conditioned upon achievement of such specified percentage or percentages (in each case subject to the terms of the Plan). The Committee may specify in the Performance Objectives a target amount of Business Unit Income, Revenues, or EVA of such Business Unit required before any or specified parts of the Award will become payable, and may express the Performance Objectives by way of a comparison with like measures of Business Unit performance in one or more prior periods or similar measures of performance of other companies or businesses; provided, however, that the Committee shall include such terms in the case of a Performance Objective based on Revenues as may be necessary so that achievement of the Performance Objective is substantially uncertain. The Committee shall, in its sole discretion, establish Awards and Performance Objectives, subject to Section 4(c). Performance Objectives shall be objective and shall otherwise meet the requirements of section 162(m)(4)(C) of the Code and regulations thereunder (including Treasury Regulation 1.162-27(e)(2)). Performance Objectives may differ for Awards to different Participants. Only the business criteria specified in this Section 4(b) may be used in establishing Performance Objectives upon which the maximum amount of final payment of an Award is conditioned, although the Committee may consider other measures of performance as a basis for reducing such amount (including under Section 4(d)). To the extent consistent with section 162(m)(4)(C) of the Code and regulations thereunder (including Treasury Regulation 1.162-27(e)(2)), the Committee may do the following:

(i) provide that the Business Unit Income, Revenues, or EVA of the Business Unit considered as the Performance Objective shall be adjusted downward to reflect specified charges, expenses, and other amounts (including amounts that would otherwise constitute bonuses (under the Plan or otherwise), capital charges, general and administrative expenses, or taxes);

(ii) adjust or modify Awards or terms of Awards and Performance Objectives (x) in recognition of unusual or nonrecurring events affecting the Company or any Business Unit, or the

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financial statements or results thereof, or in response to changes in applicable laws (including tax, disclosure, and other laws), regulations, accounting principles, or other circumstances deemed relevant by the Committee, (y) with respect to any Participant whose position or duties with the Company or any subsidiary changes during a Performance Period, or (z) with respect to any person who first becomes a Participant after the first day of the Performance Period, in each case subject to Section 4(h);

(iii) defer all or any part of any interim payments until certification of the final Award for the Performance Period;

(iv) defer all or any part of final Award payments, including until the earliest time such payments may be made without causing them to fail to be deductible by the Company under section 162(m) of the Code; such deferrals may include deferrals in the form of units valued by reference to the value of Company stock, settleable in cash or by issuance of shares drawn from any other plan of the Company under which issuance of such shares to a Participant is authorized; and

(v) consider other performance criteria in exercising discretion under Section 4(d) hereof.

(c) Maximum Award. The maximum percentage of Business Unit Income, Revenues and EVA of a Business Unit that may be specified as the Performance Objectives and therefore potentially payable under an Award to any Participant for any Performance Period shall be 30%, 10%, and 25%, respectively. In addition, the maximum combined percentage of the Business Unit Income, Revenues and EVA of a Business Unit that may be specified as the Performance Objectives for Awards to all Participants with respect to any one Business Unit shall be 30%, 10% and 25%, respectively.

(d) Determination of Amounts Payable; Limits on Discretion. As promptly as practicable following the end of each Performance Period, the Committee shall determine whether and the extent to which the terms of Awards have been satisfied, including the extent to which Performance Objectives have been achieved and other material terms of Awards have been satisfied, and the amounts payable to each Participant with respect to his or her Award. Such determinations shall be set forth in a written certification (including for this purpose approved minutes of the meeting at which such determinations were made). The Committee may, in its sole discretion, in view of its assessment of the business strategy of the Company and Business Units thereof, performance of comparable organizations, economic and business conditions, personal performance of the Participant, and any other circumstances deemed relevant, decrease the amount determined to be payable as a final Award or cancel such Award. Other provisions of the Plan notwithstanding, the Committee shall have no discretion to increase the amounts payable with respect to an Award.

(e) Termination. If a Participant ceases to be employed by the Company or a participating subsidiary prior to the end of a Performance Period for any reason other than death, Disability, normal retirement, or early retirement with the approval of the Committee, no final Award for such Performance Period shall be payable to such Participant. If such cessation of employment

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results from such Participant’s death, Disability, normal retirement, or early retirement with the approval of the Committee, the Committee shall determine, in its sole discretion and in such manner as it may deem reasonable (subject to Section 4(h)), the amount payable as a final Award under Section 4(d) achieved or resulting from the portion of such Performance Period completed at the date of cessation of employment, and the amount of the final Award payable based on such determinations. The Committee may base such determination on the performance achieved for the full year, in which case its determination shall be made as promptly as practicable following the Performance Period. Such determinations shall be set forth in a written certification, as specified in Section 4(d). Such Participant or his or her beneficiary shall be entitled to receive payment of such final Award, reduced by any payments previously received, on or after January 1 but before March 15 of the year following the year in which the relevant Performance Period ends; provided that such payment may only be made at the earliest time such payment may be made without causing the payment to fail to be deductible by the Company under Code section 162(m). In the event the final Award is less than the payments previously made to the Participant, the Participant shall repay such amounts to the Company forthwith. The foregoing notwithstanding, no payment shall be made hereunder if such payment shall be duplicative of severance amounts paid to the participant or his or her beneficiary.

(f) Payment of Awards. Except as provided in Section 4(e) and this Section 4(f) and subject to the other provisions of Section 4, each Participant may receive interim payments as frequently as semimonthly, at the Committee’s discretion, provided, however, that any such payments made exceeding the final Award as certified by the Committee shall be repaid to the Company forthwith. If and to the extent specified by the Committee, each Participant shall have the right to defer his or her receipt of part or all of any payment due with respect to an Award under and in accordance with the terms and conditions of any deferred compensation plan then available to Participant as an employee of the Company. If a Participant dies prior to payment (including deferred payment) of a final Award hereunder, any payments due to such Participant shall be paid to the Participant’s estate, unless the Participant designated a certain person(s) as beneficiary(ies) in an election form filed with the Committee and specifically applicable to amounts payable under the Plan at the same time such payments would have otherwise been payable to the Participant in accordance with Section 4(e) and without regard to any deferral election.

(g) Tax Withholding. The Company and any participating subsidiary shall have the right to deduct from any amount payable hereunder any amounts that federal, state, local, and foreign tax laws require to be withheld with respect to such payment.

(h) Conformity of Plan to Code section 162(m). It is the intent of the Company that compensation under the Plan (other than post-termination compensation) shall constitute “performance-based compensation” within the meaning of Code section 162(m)(4)(C) and regulations thereunder (including Treasury Regulation 1.162-27(e)). Accordingly, terms used in the Plan shall be interpreted in a manner consistent with section 162(m) of the Code and regulations thereunder (including Treasury Regulation 1.162-27). If any provision of the Plan or any agreement evidencing an Award hereunder does not comply or is inconsistent with the provisions of section 162(m)(4)(C) of the Code or regulations thereunder (including Treasury

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Regulation 1.162-27(e)) required to be met in order that compensation (other than post-termination compensation) shall constitute “performance-based compensation,” such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no adjustment to an Award or its related Performance Objectives shall be authorized or made, and no post-termination payment shall be authorized or made under Section 4(e), if and to the extent that such authorization or the making of such adjustment or payment would contravene such requirements.

5. GENERAL PROVISIONS

(a) No Rights to Final Award or Rights to Participate. Until the Committee has determined to make a final Award to a Participant under Section 4(d) or (e), a Participant’s selection to participate, grant of an Award, and other events under the Plan shall not be construed as a commitment that any Award shall become a final Award or that payment will be made with respect to an Award under the Plan. Nothing in the Plan shall be deemed to give any Eligible Employee any right to participate in the Plan except upon determination of the Committee under Section 4. The foregoing and Section 5(b) notwithstanding, the Committee may authorize legal commitments with respect to Awards under the terms of an employment agreement or other agreement with a Participant, to the extent of the Committee’s authority under the Plan, including commitments that limit the Committee’s future discretion under the Plan, but in all cases subject to Section 4(h).

(b) No Rights to Employment. Nothing contained in the Plan or in any documents evidencing an Award shall confer upon any Eligible Employee or Participant any right to continue as an Eligible Employee or in the employ of the Company or a subsidiary or constitute any contract or agreement of employment, or interfere in any way with the right of the Company or a subsidiary to reduce such person’s compensation, to change the position held by such person, or to terminate the employment of such person, with or without cause.

(c) Non-Transferability. No benefit payable under, or interest in, this Plan shall be transferable by a Participant except upon a Participant’s death by will or the laws of descent and distribution or to a designated beneficiary, or otherwise be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any such attempted action shall be void.

(d) Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any amounts payable to a Participant pursuant to an Award, nothing contained in the Plan (or in any documents related thereto), nor the creation or adoption of the Plan, the grant of any Award, or the taking of any other action pursuant to the provisions of the Plan shall give any such Participant any rights that are greater than those of a general creditor of the Company.

(e) Participation in Other Compensation or Benefit Plans. Nothing in the Plan shall preclude any Participant from participation in any other compensation or benefit plan of the Company.

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(f) Governing Law. The Plan and all related documents shall be governed by, and construed in accordance with, the laws of the State of New York (except to the extent the Delaware General Corporation Law and provisions of federal law may be applicable), without reference to principles of conflict of laws. If any provision hereof shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of the Plan shall continue to be fully effective.

(g)  Section 409A.  The Plan is intended to comply with the short-term deferral rule set forth in the regulations under section 409A of the Code, in order to avoid application of section 409A to the Plan.  If and to the extent that any payment under this Plan is deemed to be deferred compensation subject to the requirements of section 409A, this Plan shall be administered so that such payments are made in accordance with the requirements of section 409A.  In no event shall a Participant, directly or indirectly, designate the calendar year of payment.

(h) Amendment and Termination of Plan and Awards. The Board of Directors may, at any time, terminate or, from time to time, amend, modify, or suspend the Plan, provided that any such action shall be subject to stockholder approval if and to the extent required by law, regulation, or the rules of any stock exchange or automated quotation system upon which the Company’s Common Stock may be listed or quoted, or to comply with Code section 162(m). Except as provided in Section 4 (including the limitation under Section 4(h)) and under Section 5(a), the Committee may modify the terms and provisions of any Awards theretofore awarded to any Participants which have not become final Awards and been settled by payment (or would have been settled by payment but for an election to defer payment pursuant to Section 4(f)).

(i) Effective Date. The Plan was originally effective as of January 1, 1997, for Performance Periods beginning on or after such date, and shall remain in effect until such time as it may be terminated pursuant to Section 5(h).  The effective date of the Plan as amended and restated herein is February 7, 2008.

(j) Stockholder Approval. Prior to completion of the initial Performance Period under the Plan, the Plan shall be submitted to, and must be approved in a separate vote by, the affirmative votes of the holders of a majority of voting securities present in person or represented by proxy and entitled to vote on the subject matter, at a meeting of Company stockholders duly held in accordance with the Delaware General Corporation Law, or any adjournment thereof, or by the written consent of the holders of a majority of voting securities entitled to vote, in accordance with applicable provisions of the Delaware General Corporation Law and section 162(m) of the Code. Any Awards granted under the Plan prior to such approval of stockholders shall be effective when granted, but if stockholders fail to approve the Plan as specified hereunder, any previously granted Award shall be forfeited and cancelled and any payments previously made with respect to such Awards shall be repaid to the Company forthwith, and no Awards shall be thereafter granted under the Plan. In addition, the Committee may determine to submit the Plan to stockholders for reapproval at such times, if any, required in order that compensation under the Plan shall qualify as “performance-based compensation” under Code section 162(m) and the regulations thereunder.

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As approved by the Compensation Committee and adopted by the Board of Directors on March 26, 1997.

Amended by the Board of Directors on June 30, 2000.

Amended and Restated by the Board of Directors on March 19, 2003.

Amended and Restated by the Board of Directors effective February 7, 2008.

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EX-10.14.2

Exhibit 10.14.2

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.
STOCK UNIT AWARD PROGRAM SUBPLAN

1.Purpose

This Investment Technology Group, Inc. Stock Unit Award Program Subplan, as amended and restated herein (the “Program”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”).  The Program was merged as a subplan with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”) effective as of May 8, 2007, and is now amended and restated as set forth herein, effective January 1, 2008 (the “Effective Date”).

The purpose of the Program is to provide an additional incentive to selected members of senior management and key employees to increase the success of the Company, by substituting stock units for a portion of the cash compensation payable to such persons, which stock units represent an equity interest in the Company to be acquired and held under the Program on a long-term, tax-deferred basis, and otherwise to promote the purposes of the Plan.  The Program is amended and restated herein, effective for deferrals made from compensation earned for periods on or after the Effective Date.  Deferrals made from compensation earned for periods prior to the Effective Date shall be governed by the Program as in effect prior to the Effective Date.  Shares with respect to deferrals prior to May 8, 2007 were issued under the 1994 Plan.  Persons selected to be eligible to participate in the Program will participate only if they elect to participate for a calendar year.

2.Definitions

Capitalized terms used in the Program but not defined herein shall have the same meanings as defined in the Plan.  In addition to such terms and the terms defined in this Program, the following terms used in the Program shall have the meanings set forth below:

2.1“Account” means the account established for each Participant pursuant to Section 7(g) hereof.

2.2“Actual Reduction Amount” means the amount by which a given semi-annual or year-end bonus payment to a Participant is in fact reduced under Section 6.

2.3“Administrator” shall be the person or committee appointed by the Committee to perform ministerial functions under the Program and to exercise other authority delegated by the Committee.

2.4“Assigned Reduction Amount” means an amount determined by the Administrator in accordance with Section 6(b), in the case of an individual Current Participant, which shall be used under Section 7(a) to determine the number of Stock Units to be credited to the Current Participant’s Account semi-annually.  The Assigned Reduction Amount does not accumulate.

2.5“Basic Stock Unit” means a Stock Unit granted pursuant to the first sentence of Section 7(a).

2.6“Cause” shall be deemed to exist where a Participant: (i) commits any act of fraud, willful misconduct or dishonesty in connection with their employment; (ii) fails, refuses or neglects to timely perform any material duty or job responsibility and such failure, refusal or neglect is not cured after appropriate warning; (iii) commits a material violation of any law, rule, regulation or by-law of any governmental authority (state, federal or foreign), any securities exchange or association or other regulatory or self-regulatory body or agency applicable to Company or any of its subsidiaries or affiliates or any general written policy or directive of Company or any of its subsidiaries or affiliates; (v) commits a crime involving dishonesty, fraud or unethical business conduct, or a felony; or (vii) is expelled or suspended, or is subject to an order temporarily or permanently enjoining Participant from an area of activity which constitutes a significant portion of Participant’s activities by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, any national securities exchange or any self-regulatory agency or governmental authority, state, foreign or federal.

2.7“Current Participant” means a Participant who, for the calendar year, has elected, in accordance with Section 5 below, to participate in the Program and is, therefore, subject to mandatory payment of a portion of his or her compensation for the calendar year by grant of Stock Units under the Program.

2.8“Disability” shall have the meaning ascribed to such term in section 22(e)(3) of the Code.

2.9“Matching Stock Unit” means a Stock Unit granted pursuant to Section 7(a).

2.10“Participant” means an eligible person who is granted Stock Units under the Program, which Stock Units have not yet been settled.

2.11“Related Party” means (a) a majority-owned subsidiary of the Company; (b) an employee or group of employees of the Company or any majority-owned subsidiary of the Company; (c) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (d) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of Voting Securities.

2.12“Retirement” means Termination of Employment (other than a termination for Cause) after the Participant has reached age 65 or after the Participant has reached age 55 and has at least 10 years of service with the Company and its subsidiaries.

2.13“Stock Unit” means an award, granted pursuant to Section 8 of the Plan, representing a generally nontransferable right to receive one share of Company Stock at a specified future date together with a right to Dividend Equivalents as specified in Section 7(d) hereof and subject to the terms and conditions of the Plan and the Program.  Notwithstanding anything to the contrary, in the case of Stock Units granted to employees of ITG Canada Corp., the Committee may, in its discretion, settle such Stock Units by delivery of cash equal to the Fair

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Market Value on the settlement date of the number of shares of Company Stock equal to the number of such Stock Units.  Stock Units are bookkeeping units, and do not represent ownership of Company Stock or any other equity security.

2.14“Termination of Employment” means termination of a Participant’s employment by the Company or a subsidiary for any reason, including due to death or Disability, immediately after which event the Participant is not employed by the Company or any subsidiary.

2.15“Voting Securities or Security” means any securities of the Company which carry the right to vote generally in the election of directors.

3.Administration

(a)Authority.  The Program shall be established and administered by the Committee, which shall have all authority under the Program as it has under the Plan; provided, however, that terms of the grant of Stock Units hereunder may not be inconsistent with the express terms set forth in the Program.  Ministerial functions under the Program and other authority specifically delegated by the Committee shall be performed or exercised by and at the direction of the Administrator.

(b)Manner of Exercise of Authority.  Any action of the Committee or its delegatee with respect to the Program shall be final, conclusive, and binding on all persons, including the Company, subsidiaries, participants granted Stock Units which have not yet been settled, and any person claiming any rights under the Program from or through any Participant, except that the Committee may take action within a reasonable time after any such action superseding or overruling a prior action.

(c)Limitation of Liability.  Each member of the Committee or delegatee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or other employee of the Company or any subsidiary or any agent or professional assisting in the administration of the Program, such member or person shall not be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Program, and such member or person shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation.

(d)Status as Subplan Under the Plan.  The Program constitutes a subplan implemented under the Plan, to be administered in accordance with the terms of the Plan.  Accordingly, all of the terms and conditions of the Plan are hereby incorporated by reference, and, if any provision of the Program or a statement or document relating to Stock Units granted hereunder conflicts with a provision of the Plan, the provision of the Plan shall govern.

4.Stock Subject to the Program

Shares of Company Stock delivered upon settlement of Stock Units under the Program shall be shares reserved and available under the Plan.  Accordingly, Stock Units may be granted under the Program if sufficient shares are then reserved and available under the Plan, and the

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number of shares delivered in settlement of Stock Units hereunder shall be counted against the shares reserved and available under the Plan.  Awards may be granted under the Plan even though the effect of such grants will be to reduce the number of shares remaining available for grants hereunder.  Stock Units granted under the Program in place of compensation under the Plan resulting from an award intended to comply with the applicable requirements of section 162(m) of the Code shall be subject to the annual per-person limitations under the Plan.  Stock Units granted under the Program in place of compensation under the Company’s Pay-for-Performance Incentive Plan shall be subject to annual per-person limitations under the Pay-for-Performance Plan.

5.Eligibility and Election

The Committee may select any person who is eligible to be granted an Award under the Plan to be eligible to be granted Stock Units under the Program in lieu of compensation otherwise payable to the person (such persons are referred to herein as “Eligible SUA Participants”).  A Participant who is selected to be an Eligible SUA Participant in one year will not necessarily be selected to be an Eligible SUA Participant in a subsequent year.  An Eligible SUA Participant may elect to participate in the Program and, therefore, be a Current Participant for a calendar year by filing a written irrevocable election with the Company prior to the beginning of that calendar year.  Participation elections (for persons who continue to be Eligible SUA Participants) will automatically carry forward for subsequent calendar years unless the Participant irrevocably elects in writing, by no later than the last day of the immediately preceding calendar year, not to participate in the Program for a calendar year.  Notwithstanding the foregoing, an Eligible SUA Participant may make an election to participate in the Program within 30 days after first becoming an Eligible SUA Participant, but, notwithstanding any provision of this Program to the contrary, only with respect to compensation earned for services provided after the effective date of the election, which, in the case of bonus payable for a period beginning prior to and ending after the effective date of the election, shall be prorated for the portion of the period beginning after the effective date of the election.

6.Mandatory Reduction of Bonus Compensation

(a)(i)  Amount of Mandatory Reduction.  A Current Participant’s cash compensation earned for the calendar year of participation shall be automatically reduced by an amount determined in accordance with the following schedule:

0% of the first $200,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of $300,000.

The foregoing notwithstanding, the Committee may adjust the schedule applicable to an individual Current Participant and in no event will the amount by which cash compensation is reduced exceed the amount of bonus payable to the Participant for the calendar year.  For purposes of the Program, the amount by which cash compensation is reduced hereunder shall be calculated without regard to any reductions in compensation resulting from Participant’s contributions under any section 401(k), section 125, pension plan, or other plan of the Company or a subsidiary, and

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such amount shall not be deemed a reduction in the Participant’s compensation for purposes of any such section 401(k), section 125, pension plan, or other plan of the Company or a subsidiary.

(ii)  In lieu of the schedule set forth in Section 6(a)(i) above, each Current Participant who participated in the Program for the portion of calendar year 2003 prior to June 30 and who made a one-time written election (in the form specified by the Committee) on or prior to June 30, 2003 to have any and all mandatory reductions under the Program based on the following schedule shall have all reductions hereunder based on such following schedule:

5% of the first $100,000 of annual compensation;
10% of the next $100,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of  $300,000.

(b)Manner of Reduction of Compensation.  Amounts by which compensation is reduced under Section 6(a)(i) or (ii) will be subtracted from bonus amounts in respect of services during the year otherwise payable to the Current Participant at or following the end of the first half of such year and at or following the end of the year.  The amount by which the bonus amount payable will be reduced following the end of the first half of the year will be calculated based on a reasonable estimate of total compensation for the year (i.e., in the case of a Current Participant employed since the beginning of the year by calculating an estimated aggregate amount by which compensation will be reduced for the year and reducing the semi-annual bonus payment by one-half of such amount), and will be calculated at the time the year-end bonus amount otherwise becomes payable based on actual compensation for the year, taking into account the amount by which compensation previously has been reduced for the year (i.e., by calculating the actual amount by which compensation will be reduced for the year and reducing the year-end bonus payment by that amount less the amount by which the compensation was reduced previously in such year).  The foregoing notwithstanding, the Administrator may determine in the case of any individual Participant, including a Participant who is not paid a bonus on a semi-annual basis, the extent (if any) to which any bonus amounts other than the Participant’s year-end bonus amount shall be reduced taking into account the terms of the Participant’s compensation arrangement and the Participant’s individual circumstances.  In such cases, the Administrator may assign to the Participant an Assigned Reduction Amount for each semi-annual period, so that Stock Units will be automatically granted to such Participant under Section 7(a) at times and in amounts comparable to grants to other Participants, such that, on a full-year basis, the aggregate of the Participant’s Assigned Reduction Amounts and any Actual Reduction Amounts used to determine the number of Stock Units credited to the Participant’s Account under Section 7(a) for such year will equal the aggregate amount by which the Participant’s full-year’s compensation is to be reduced (after giving effect to adjustments under Section 7(b)).

7.Grant of Stock Units

(a)Automatic Grant of Stock Units.  Except as set forth below, each Participant shall be automatically granted Basic Stock Units as of the date the Participant’s bonus would have otherwise been paid, in a number equal to the Participant’s Actual Reduction Amount or Assigned Reduction Amount (as applicable) divided by the Fair Market Value of a

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share of Company Stock on such date. In addition, each Participant shall be automatically granted Matching Stock Units as of the date the Participant’s bonus would have otherwise been paid, in a number equal to 20% of the number of Basic Stock Units granted under this Section 7(a) at that date. Stock Units shall be credited to the Participant’s Account as of the date of grant.  Other provisions of the Program notwithstanding, no grant of Stock Units shall be effective until the date of grant specified in this Section 7(a).

(b)Risk of Forfeiture; Cancellation of Certain Stock Units.  The Basic Stock Units, together with any Dividend Equivalents credited thereon, shall at all times be fully vested and non-forfeitable.  Matching Stock Units (together with any Dividend Equivalents credited thereon) will vest 100% on the third anniversary of the date of grant, if the Participant remains continuously employed by the Company through such vesting date; provided that (i) all Matching Stock Units (together with Dividend Equivalents credited thereon) will vest in full at the time of Retirement of the Participant or upon the occurrence of a Change in Control, but in either such event the Matching Stock Units shall continue to be settled on the schedule set forth in Section 8(a) below; and (ii) all Matching Stock Units (together with Dividend Equivalents credited thereon) will vest in full at the time a Participant’s employment terminates due to his or her death or Disability, and all Stock Units held by such Participant shall be settled within 60 days thereafter.

If the Participant’s employment by the Company terminates for any reason other than Retirement, death or Disability prior to a vesting date, unless the Committee provides otherwise, all unvested Matching Stock Units, together with any Dividend Equivalents credited thereon, shall be forfeited to the Company.  The foregoing notwithstanding, if, at the end of a given year (upon calculation of year-end bonuses), the aggregate of the Participant’s Actual Reduction Amounts and any Assigned Reduction Amounts used to determine the number of Stock Units credited under Section 7(a) for such year exceeds the amount by which the full-year’s compensation should have been reduced under Section 6(a) (the “corrected full-year amount”), the Participant shall be paid, prior to March 15 of the following year, in cash, without interest, the amount (if any) by which such Actual Reduction Amounts and Assigned Reduction Amounts exceeded such corrected full-year amount, and any Stock Units (including Basic Stock Units and Matching Stock Units relating thereto) credited to the Participant under Section 7 as a result of such excess Actual Reduction Amounts and Assigned Reduction Amounts shall be cancelled.  Unless otherwise determined by the Administrator, the Stock Units to be cancelled shall be cancelled from each of the semi-annual grants in the proportion the Actual Reduction Amounts and Assigned Reduction Amounts used in determining such semi-annual grant bore to the aggregate of the Actual Reduction Amounts and Assigned Reduction Amounts used in determining all grants of Stock Units over the full year.

(c)Nontransferability.  Stock Units and all rights relating thereto shall not be transferable or assignable by a Participant, other than by will or the laws of descent and distribution, and shall not be pledged, hypothecated, or otherwise encumbered in any way or subject to execution, attachment, or similar process.

(d)Dividend Equivalents on Stock Units.  Dividend Equivalents shall be credited on Stock Units as follows:

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(i)Cash and Non-Company Stock Dividends.  If the Company declares and pays a dividend or distribution on Company Stock in the form of cash or property other than shares of Company Stock, then a number of additional Stock Units shall be credited to a Participant’s Account as of the payment date for such dividend or distribution equal to (i) the number of Stock Units credited to the Account as of the record date for such dividend or distribution multiplied by (ii) the amount of cash plus the fair market value of any property other than shares actually paid as a dividend or distribution on each outstanding share of Company Stock at such payment date, divided by (iii) the Fair Market Value of a share of Company Stock at such payment date.

(ii)Company Stock Dividends and Splits.  If the Company declares and pays a dividend or distribution on Company Stock in the form of additional shares of Company Stock, or there occurs a forward split of Company Stock, then a number of additional Stock Units shall be credited to the Participant’s Account as of the payment date for such dividend or distribution or forward split equal to (i) the number of Stock Units credited to the Account as of the record date for such dividend or distribution or split multiplied by (ii) the number of additional shares of Company Stock actually paid as a dividend or distribution or issued in such split in respect of each outstanding share of Company Stock.

(e)Adjustments to Stock Units.  The number of Stock Units credited to each Participant’s Account shall be appropriately adjusted, in order to prevent dilution or enlargement of Participants’ rights with respect to such Stock Units, to reflect any changes in the number of outstanding shares of Company Stock resulting from any event referred to in Section 5.5 of the Plan, taking into account any Stock Units credited to the Participant in connection with such event under Section 7(d).

(f)Fractional Shares.  The number of Stock Units credited to a Participant’s Account shall include fractional shares calculated to at least three decimal places, unless otherwise determined by the Committee.

(g)Accounts and Statements. The Administrator shall establish, or cause to be established, an Account for each Participant.  An individual statement of each Participant’s Account will be issued to each Participant not less frequently than annually.  Such statements shall reflect the Stock Units credited to the Participant’s Account, transactions therein during the period covered by the statement, and other information deemed relevant by the Administrator.  Such statement may include information regarding other plans and compensatory arrangements for Directors.

(h)Consideration for Stock Units.  Stock Units shall be granted for the general purposes set forth in Section 1 of the Program. Except as specified in Section 6 and 7 of the Program, a Participant shall not be required to pay any cash consideration or other tangible or definable consideration for Stock Units.  No negotiation shall take place between the Company and any Participant as to the amount, timing, or other terms of an award of Stock Units.

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8.Settlement

(a)Issuance and Delivery of Shares in Settlement.  Except as otherwise provided in Section 7(b) above in the case of a Participant’s death or Disability, Stock Units (together with any Dividend Equivalents credited thereon) shall be settled by issuance and delivery to the Participant (or following his or her death, to the Participant’s designated beneficiary) of a number of shares of Company Stock equal to the number of such Stock Units within 30 days of the third anniversary of the date of grant of the Stock Units.  Notwithstanding anything in this Section 8 to the contrary, if a Participant incurs a “separation from service” and the third anniversary of the date of grant of Basic Stock Units occurs within six months following the date of the Participant’s separation from service and the Participant is a “specified employee,” the settlement date with respect to the Participant’s Basic Stock Units shall be postponed to the first day that is six months following the date of the Participant’s separation from service.  For purposes of this Section 8, the terms “separation from service” and “specified employee” shall have the meanings ascribed to them in section 409A of the Code.  The determination of specified employees, including the number and identity of persons considered specified employees and the identification date, shall be made by the Committee or its designee in accordance with the provisions of sections 416(i) and 409A of the Code and the regulations issued thereunder.

The Committee may, in its discretion, make delivery of shares hereunder by depositing such shares into an account maintained for the Participant (or of which the Participant is a joint owner, with the consent of the Participant) established in connection with the Company’s Employee Stock Purchase Plan or another plan or arrangement providing for investment in Company Stock and under which the Participant’s rights are similar in nature to those under a stock brokerage account.  If the Committee determines to settle Stock Units by making a deposit of shares into such an account, the Company may settle any fractional share by means of such deposit.  In other circumstances or if so determined by the Committee, the Company shall instead pay cash in lieu of fractional shares, on such basis as the Committee may determine.  In no event will the Company in fact issue fractional shares.  Notwithstanding any provision of the Program to the contrary, in the case of Stock Units granted to employees of ITG Canada Corp., the Committee may, in its discretion, settle such Stock Units by delivery of cash equal to the Fair Market Value on the settlement date of the number of shares of Company Stock equal to the number of such Stock Units.  Upon settlement of Stock Units, all obligations of the Company in respect of such Stock Units shall be terminated, and the shares so distributed shall no longer be subject to any restriction or other provision of the Program.

(b)Tax Withholding.  The Company and any subsidiary may deduct from any payment to be made to a Participant any amount that federal, state, local, or foreign tax law requires to be withheld with respect to the settlement of Stock Units.  At the election of the Committee, the Company may withhold from the shares of Company Stock to be distributed in settlement of Stock Units that number of shares having a Fair Market Value, at the settlement date, equal to the amount of such withholding taxes.

(c)No Elective Deferral.  Participants may not elect to further defer settlement of Stock Units or otherwise to change the applicable settlement date under the Program.

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9.General Provisions

(a)No Right to Continued Employment.  Neither the Program nor any action taken hereunder, including the grant of Stock Units, will be construed as giving any employee the right to be retained in the employ of the Company or any of its subsidiaries, nor will it interfere in any way with the right of the Company or any of its subsidiaries to terminate such employee’s employment at any time.

(b)No Rights to Participate; No Stockholder Rights.  No Participant or employee will have any claim to participate in the Program, and the Company will have no obligation to continue the Program.  A grant of Stock Units will confer on the Participant none of the rights of a stockholder of the Company (including no rights to vote or receive dividends or distributions) until settlement by delivery of Company Stock, and then only to the extent that such Stock Unit has not otherwise been forfeited by the Participant.

(c)Changes to the Program.  The Committee may amend, alter, suspend, discontinue, or terminate the Program without the consent of Participants; provided, however, that, without the consent of an affected Participant, no such action shall materially and adversely affect the rights of such Participant with respect to outstanding Stock Units.

(d)Section 409A.  It is intended that the Program and Stock Units issued hereunder comply with section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Program and Stock Units are subject thereto, and the Program and such Stock Units shall be interpreted on a basis consistent with such intent.  If any award or benefit hereunder cannot be provided or made at the time specified herein without incurring sanctions on the Participant under section 409A of the Code, then such award or benefit shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.  In no event shall a Participant, directly or indirectly, designate the calendar year of payment. The Program may be amended in any respect deemed by the Committee to be necessary in order to preserve compliance with section 409A of the Code.

10.Effective Date and Termination of Program

The Program as set forth herein shall become effective as of the Effective Date, and shall apply to deferrals from compensation earned for periods on or after the Effective Date.  Unless earlier terminated under Section 9(c), the Program shall terminate at such time after 2007 as no Stock Units previously granted under the Program remain outstanding.

Adopted by the Committee:	June 4, 1998
Amended and restated by the Committee:	February 25, 1999
Amended and restated by the Committee:	March 20, 2002
Amended and restated by the Committee:	September 3, 2002
Amended and restated by the Committee:	June 30, 2003
Amended and restated by the Board:	November 17, 2005
Amended and restated by the Committee:	March 20, 2006
Amended and restated by the Committee:	March 15, 2007
Amended and restated by the Committee:	November 26, 2007

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EX-10.19.2

Exhibit 10.19.2

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.

DIRECTORS’ RETAINER FEE SUBPLAN

SECTION 1.           Introduction.

This Amended and Restated Investment Technology Group, Inc. Directors’ Retainer Fee Subplan (the “Subplan”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan and was merged with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8, 2007, and is now amended and restated as set forth herein, effective February 7, 2008 (the “Effective Date”).  Effective as of May 8, 2007, the Subplan continued in effect according to the terms set forth herein as a subplan under the 2007 Plan.  The purpose of the Subplan is to provide non-employee directors with an election to receive payment of their annual retainer fees in the form of shares of Company Stock or cash or to defer payment of their annual retainer fees in the form of Deferred Share Units.  The Subplan is intended to encourage qualified individuals to accept nominations as directors of the Company and to strengthen the mutuality of interest between the nonemployee directors and the Company’s other stockholders.  The Subplan is amended and restated herein, effective for deferrals made from annual retainer fees earned for periods on or after the Effective Date.  Deferrals made from annual retainer fees earned prior to the Effective Date shall be governed by the Subplan as in effect prior to this amendment and restatement.

SECTION 2.           Definitions.

Capitalized terms used in the Subplan but not defined herein shall have the same meanings as defined in the 2007 Plan.  In addition to such terms and the terms defined in Section 1 hereof, the following terms used in the Subplan shall have the meaning set forth below.

(a)           “Deferred Share Unit” means a fully vested Stock Unit entitling the holder to receive one share of Company Stock per Stock Unit in accordance with the terms of the Subplan.

(b)           “Director” means a member of the Board who is not, and has not been during the preceding three months, (i) an employee of the Company or any parent or subsidiary of the Company or (ii) a consultant who has received, during the preceding 12-month period, payments in excess of $150,000 from the Company and its subsidiaries for consulting services.

(c)           “Subplan Benefits” means the benefits described in Sections 5 and 6 hereof.

SECTION 3.           Administration.

The Subplan shall be administered by the Committee.  The Committee shall have full authority to construe and interpret the Subplan, and any action of the Committee with respect to the Subplan shall be final, conclusive, and binding on all persons.

SECTION 4.           Cash or Stock Election.

Each Director may elect to receive his or her annual retainer fee in the form of cash or fully vested shares of Company Stock.  In addition, each Director may elect to defer receipt of his or her annual retainer fee in the form of Deferred Share Units as provided in Section 5 below.  If a Director elects to receive his or her annual retainer fee in the form of vested shares of Company Stock, the shares will be distributed on the date the annual retainer fee is otherwise payable in accordance with the Company’s regular retainer fee payment practices, and the amount of Company Stock distributed shall be the number of shares of Company Stock having an aggregate Fair Market Value on the payment date equal to the amount of the Director’s annual retainer fee that is otherwise payable on that date.  Fractional shares will be rounded up to the nearest whole share.  A Director’s election to receive his or her annual retainer fee in the form of cash or vested shares of Company Stock shall continue in effect until the Director notifies the Company in writing, in a manner consistent with Section 5 below, that the Director wishes to prospectively change his or her election.  If a Director fails to make any election under the Subplan, the Director’s annual retainer fee shall be paid in cash.

SECTION 5.           Deferred Share Unit Accounts.

The Company shall maintain a Deferred Share Unit account (an “Account”) for each Director who has elected to defer his or her annual retainer.  Deferred Share Units will be credited to each such Account as follows:

(a)           Each Director may make an irrevocable election on or before December 31 by written notice to the Company, to defer payment of all of the compensation otherwise payable as his or her annual retainer fee for service as a Director for the following calendar year.  Notwithstanding the foregoing, a Director may make such an election within 30 days after first becoming eligible to participate in the Subplan, with respect to compensation payable after the effective date of the election.  All compensation which a Director elects to defer pursuant to this Section 5(a) shall be credited in the form of Deferred Share Units to the Director’s Account.  The number of Deferred Share Units so credited will be equal to the number of shares of Company Stock having an aggregate Fair Market Value (on the date the compensation would otherwise have been paid) equal to the amount by which the Director’s compensation was reduced pursuant to the deferral election.  Deferrals of compensation hereunder shall continue until the Director notifies the Company in writing that the Director wishes his or her compensation for the following calendar year, and succeeding periods to be paid on a current basis either in the form of cash or Company Stock.

(b)           As of each date on which a cash dividend is paid on Company Stock, there shall be credited to each Account that number of Deferred Share Units (including

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fractional units) determined by (i) multiplying the amount of such dividend (per share) by the number of Deferred Share Units in such Account; and (ii) dividing the total so determined by the Fair Market Value of a share of Company Stock on the date of payment of such cash dividend.  The additions to a Director’s Account pursuant to this Section 5(b) shall continue until the Director’s Subplan Benefit is fully paid in accordance with Section 6 below.

SECTION 6.           Subplan Benefits.

(a)           Form.  The Subplan Benefit of a Director shall consist of shares of Company Stock equal in number to the Deferred Share Units in the Director’s Account.  Any fractional Deferred Share Units shall be rounded up to the nearest whole Deferred Share Unit.

(b)           Distribution.

(i)      The Subplan Benefit of a Director shall be distributed within 30 days after the date of termination of the Director’s service on the Board.

(ii)     In the case of the death of a Director, the Director’s Subplan Benefit shall be distributed within 60 days after the date of the Director’s death to the Director’s estate as beneficiary, unless the Director has requested a different distribution by written notice to the Committee.

SECTION 7.           General.

(a)           Nontransferabilily.  Except as provided in Section 6(b)(ii), no payment of any Subplan Benefit of a Director shall be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law.  Any act in violation of this subsection shall be void.

(b)           Compliance with Legal and Trading Requirements.  The Subplan shall be subject to all applicable laws, rules and regulations, including, but not limited to, federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.

(c)           Amendment.  The Committee may amend, alter, suspend, discontinue, or terminate the Subplan without the consent of stockholders of the Company or individual Directors, except that any such action will be subject to the approval of the Company’s stockholders at the next annual meeting of the stockholders having a record date after the date such action was taken if such stockholder approval is required by any federal or state law or regulation or the rules of any automated quotation system or securities exchange on which the Company Stock may be quoted or listed, or if the Committee determines in its discretion to seek such stockholder approval; provided, however, that, without the consent of an affected Director, no amendment, alteration, suspension, discontinuation, or termination

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of the Subplan may impair or, in any other manner, adversely affect the rights of such Director to accrued Subplan Benefits hereunder.

(d)           Unfunded Status of Awards.  The Subplan (other than Section 4 hereof) is intended to constitute an “unfunded” plan of deferred compensation.  With respect to any payments not yet made to a Director, nothing contained in the Subplan shall give any such Director any rights that are greater than those of a general creditor of the Company; provided, however, that the Company may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Subplan to deliver cash, or other property pursuant to any award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Subplan unless the Company otherwise determines with the consent of each affected Director.

(e)           Nonexclusivity of the Subplan.  The adoption of the Subplan shall not be construed as creating any limitations on the power of the Board or the Committee to adopt such other compensation arrangements as it may deem desirable, including, without limitation, the granting of Options and other awards otherwise than under the Subplan, and such arrangements may be either applicable generally or only in specific cases.

(f)            Adjustments.  The adjustment provisions in Section 5(d) of the 2007 Plan are incorporated herein by reference and shall apply in the case of Company Stock and Deferred Share Units granted hereunder.

(g)           No Right to Remain on the Board.  Neither the Subplan nor the crediting of Deferred Share Units under the Subplan shall be deemed to give any individual a right to remain a director of the Company or create any obligation on the part of the Board to nominate any Director for reelection by the stockholders of the Company.

(h)           Section 409A ..  It is intended that this Subplan and awards issued hereunder will comply with Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the awards are subject thereto, and this Subplan and such awards shall be interpreted on a basis consistent with such intent.  All payments to be made upon a termination of service under this Subplan may only be made upon a “separation from service” under Section 409A of the Code.  In no event shall a Director, directly or indirectly, designate the calendar year of payment.  This Subplan and any award agreements issued thereunder may be amended in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.

(i)            Governing Law.  The validity, construction, and effect of the Subplan shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflict of laws.

(j)            Titles and Headings.  The titles and headings of the Sections in the Subplan are for convenience of reference only.  In the event of any conflict, the text of the Subplan, rather than such titles or headings, shall control.

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(k)           Effective Date.  This Subplan, as amended and restated herein shall become effective as of the Effective Date.

Amended and restated by the Committee effective:	May 8, 2007
Amended and restated by the Committee effective:	February 7, 2008

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EX-10.24

Exhibit 10.24

INVESTMENT TECHNOLOGY GROUP, INC.

NONQUALIFIED STOCK OPTION GRANT AGREEMENT

FOR EMPLOYEES

THIS GRANT AGREEMENT, dated as of                    (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and              , an employee of the Company (the “Employee”).

WHEREAS, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”).  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1.             Grant of the Option.  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded a nonqualified stock option to purchase            shares of Company Stock for an Exercise Price of  $           per share (the “Option”).  This Option is intended to be a nonqualified stock option and shall not be treated as an incentive stock option under the provisions of the Code.

2.             Grant Subject to Plan Provisions.  This Option is awarded pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047794.pdf and http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047867.pdf, respectively; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  This Option is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.

3.             Vesting of the Option.

(a)           Subject to Section 4 below and the other terms and conditions of this Grant Agreement and the Plan, this Option shall vest and become exercisable in full on the third anniversary of the Date of Grant if the Employee has remained continuously employed by the Employer from the Date of Grant through the vesting date; provided, however, that the Option shall vest and become immediately exercisable in full (i) immediately prior to the effectiveness of a Change in Control if the Employee is employed by the Employer as of such date or (ii) upon

1

the Employee’s Termination of Service (as defined below) due to the Employee’s death or Disability (as defined in below).

“Disability” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

(b)           Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the 2007 Plan shall be subject to the vesting schedule in this Section 3.

4.             Termination of Service; Forfeiture of Unvested Option.  In the event of the Employee’s Termination of Service for any reason other than due to the Employee’s death or Disability prior to the date the Option otherwise becomes vested in accordance with Section 3 above, the Option shall immediately be forfeited by the Employee.

“Termination of Service” means the Employee ceases to be employed by the Employer.  An Employee employed by a Subsidiary of the Company shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and such Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.

5.             Term.  The Option (to the extent not earlier exercised or forfeited in accordance with Section 4 above) shall expire at 5:00 p.m., Eastern time, on the earliest of (a) the fifth anniversary of the Date of Grant, (b) the date that is one year following the date of the Employee’s Termination of Service due to the Employee’s death or Disability or (c) the date that is sixty (60) days after the date of the Employee’s Termination of Service for any other reason.  Notwithstanding any other provision of this Grant Agreement to the contrary, in the event of a Change in Control at a time when the Employee is employed by the Employer, the Option shall be exercisable until 5:00 p.m., Eastern time, on the fifth anniversary of the Date of Grant, without regard to whether the Employee continues to be employed by the Employer after the Change in Control.

6.             Method of Exercise.  To the extent the Option is exercisable under the provisions of Sections 3 and 4 hereof, the Employee may exercise the Option, in whole or in part, at such time as the Option is exercisable and prior to its expiration by giving written notice of exercise of the Option in accordance with the Investment Technology Group, Inc. Stock Option Overview (the “Exercise Overview”).  Such Exercise Overview is available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/045582.pdf, or upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  .

7.             Payment of Exercise Price.  The Exercise Price of the shares of Company Stock purchased by the Employee upon exercise of the Option (the “Option Shares”) shall be paid in full to the Company at the time of such exercise in accordance with the procedures set forth in the Exercise Overview, or by such other method as the Committee may approve; pro-

2

vided, however, that Company Stock held for less than six months may be surrendered in payment or partial payment of the Exercise Price only with the approval of the Committee.

8.             Nontransferability.  Neither the Employee nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey the Option, which Option is, and all rights under this Grant Agreement are, expressly declared to be unassignable and nontransferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).

9.             No Right to Employer Assets.  Neither the Employee nor any other person shall acquire by reason of the Option or the Option Shares any right in or title to any assets, funds or property of the Employer whatsoever including, without limiting the generality of the foregoing, any specific funds or assets which the Employer, in its sole discretion, may set aside in anticipation of a liability.  No trust shall be created in connection with or by the granting of the Option or the purchase of any Option Shares, and any benefits which become payable hereunder shall be paid from the general assets of the Employer.  The Employee shall have only a contractual right to the amounts, if any, payable pursuant to this Grant Agreement, unsecured by any asset of the Company or any of its affiliates.

10.           Limitations.  Nothing herein shall limit the Company’s right to issue Company Stock, or stock options or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates.  Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

11.           Withholding.  The Employee shall pay to the Employer or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the issuance of Option Shares or the payment of money pursuant to the exercise of the Option, and the Employer shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.  To the extent permitted by the Committee, the Employee may elect to have the Employer withhold Company Stock to pay any applicable withholding taxes resulting from the exercise of the Option and the issuance of Option Shares, in accordance with any rules or regulations of the Committee then in effect.

12.           Expenses of Issuance of Option Shares.  The issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the Option Shares.

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13.           Terms are Binding.  The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Employee and the Company.

14.           Compliance with Law.  The exercise of the Option and the obligations of the Company to issue or transfer Option Shares hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required.  In no event shall Employee be permitted to exercise the Option if the issuance of Option Shares at that time would violate any law or regulation.  By signing this Grant Agreement, the Employee agrees not to sell any Option Shares at a time when applicable laws or the Company policies prohibit a sale.

15.           References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

16.           Notices.  Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Employer’s corporate records, or at any other address at which the Employee may specify in a notice delivered to the Company in the manner set forth herein.

17.           No Right to Continued Employment.  This Option shall not confer upon the Employee any right to continue in the employ of the Employer nor shall this Option interfere with the right of the Employer to terminate the Employee’s employment at any time.

18.           Costs.  In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by the successful party

4

or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys’ fees shall be included as part of the judgment.

19.           Further Assurances.  The Employee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

20.           Counterparts.  For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

21.           Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.

22.           Entire Agreement.  This Grant Agreement, together with the Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Option other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

23.           Amendment; Waiver.  This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved by the Committee to be effective as against the Company.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

24.           Severability.  Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.

By:

Name: Robert C. Gasser

Title: CEO and President

I hereby accept the Option described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

[Insert Name of the Employee]

EX-10.25

Exhibit 10.25

INVESTMENT TECHNOLOGY GROUP, INC.

STOCK UNIT GRANT AGREEMENT

FOR EMPLOYEES

THIS GRANT AGREEMENT, dated as of                   (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and                , an employee of the Company (the “Employee”).

WHEREAS, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”).  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1.             Grant of Stock Units.  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded             Stock Units that represent hypothetical shares of Company Stock on a one-for-one basis (the “Stock Unit Grant”).

2.             Grant Subject to Plan Provisions.  This Stock Unit Grant is granted pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047794.pdf and http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047867.pdf, respectively; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.

3.             Stock Unit Account.  The Company shall establish and maintain a Stock Unit bookkeeping account (the “Account”) on its records for the Employee and shall record in the Account the number of Stock Units awarded to the Employee.  No shares of stock shall be issued to the Employee at the time the Stock Unit Grant is made.

4.             Vesting of the Stock Unit Grant.

(a)     Subject to Section 5 below and the other terms and conditions of this Grant Agreement and the Plan, this Stock Unit Grant shall become vested in full and all restrictions on the Stock Unit Grant shall lapse on the third anniversary of the Date of Grant if the Employee has remained continuously employed by the Employer from the Date of Grant through the vesting date; provided, however, that the Stock Unit Grant shall become immediately

vested in full (i) upon a Change in Control if the Employee is employed by the Employer as of the date of the Change in Control or (ii) upon the Employee’s Termination of Service (as defined below) due to the Employee’s death or Disability (as defined below).

“Disability” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

(b)     Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the Plan shall be subject to the vesting schedule in this Section 4.

5.             Termination of Service; Forfeiture of Unvested Stock Unit Grant.  In the event of the Employee’s Termination of Service for any reason other than due to the Employee’s death or Disability prior to the date the Stock Unit Grant otherwise becomes vested in accordance with Section 4 above, the Stock Unit Grant shall immediately be forfeited by the Employee.

“Termination of Service” means the Employee ceases to be employed by the Employer.  An Employee employed by a Subsidiary of the Company shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and such Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.

6.             Distribution of Shares.  The Company shall distribute to the Employee (or the Employee’s heirs in the event of the Employee’s death) at the time of vesting of the Stock Unit Grant in accordance with Section 4 above (but not later than March 15 of the calendar year following the calendar year in which the Stock Units vest), a number of shares of Company Stock equal to the number of Stock Units then held by the Employee that became vested at such time, subject to reduction for withholding of shares pursuant to Section 9 below.

7.             Rights and Restrictions.  The Stock Unit Grant shall not be transferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).  Prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock to the Employee, the Employee shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Unit Grant.  Specifically, the Employee shall not have the right to receive dividends or the right to vote such shares of Company Stock, nor shall the Employee have the right to sell, assign, pledge, hypothecate, encumber, transfer or otherwise dispose of, in whole or in part, the Stock Unit Grant, prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock.  The Employee shall not have any interest in any fund or specific assets of the Employer by reason of this Stock Unit Grant or the Account established for the Employee.

8.             Limitations.  Nothing herein shall limit the Company’s right to issue Company Stock, or Stock Units or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates.  Nothing expressed or implied herein is intended or shall be construed to confer upon or give to

2

any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

9.             Withholding.  The Employee shall pay to the Employer or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the Stock Unit Grant and the Employer shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.  To the extent permitted by the Committee, the Employee may elect to have the Employer withhold Company Stock to pay any applicable withholding taxes resulting from the Stock Unit Grant, in accordance with any rules or regulations of the Committee then in effect.

10.           Expenses of Issuance of Company Stock.  The issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of Company Stock.

11.           Terms are Binding.  The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Employee and the Company.

12.           Compliance with Law.  The transfer of Company Stock hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required.  By signing this Grant Agreement, the Employee agrees not to sell any Company Stock at a time when applicable laws or the Company policies prohibit a sale.

13.           References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

14.           Notices.  Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

3

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Employer’s corporate records, or at any other address at which the Employee may specify in a notice delivered to the Company in the manner set forth herein.

15.           No Right to Continued Employment.  This Stock Unit Grant shall not confer upon the Employee any right to continue in the employ of the Employer nor shall this Stock Unit Grant interfere with the right of the Employer to terminate the Employee’s employment at any time.

16.           Section 409A.  It is intended that the Stock Unit Grant issued hereunder shall comply with Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Stock Unit Grant is subject thereto, and the Stock Unit Grant shall be interpreted on a basis consistent with such intent.  In no event shall the Employee, directly or indirectly, designate the calendar year in which the shares underlying the Stock Unit Grant will be distributed.  This Grant Agreement may be amended without the consent of the Employee in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.

17.           Costs.  In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys’ fees shall be included as part of the judgment.

18.           Further Assurances.  The Employee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

19.           Counterparts.  For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

20.           Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.

21.           Entire Agreement.  This Grant Agreement, together with the Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or

4

implied, between them with respect to the Stock Unit Grant other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

22.           Amendment; Waiver.  This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved by the Committee to be effective as against the Company.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

23.           Severability.  Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.

By:

Name: Robert C. Gasser

Title: CEO and President

I hereby accept the Stock Unit Grant described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

[Insert Name of the Employee]

6

EX-10.26

Exhibit 10.26

INVESTMENT TECHNOLOGY GROUP, INC.

PERFORMANCE STOCK UNIT GRANT AGREEMENT

FOR EMPLOYEES

THIS GRANT AGREEMENT, dated as of                             (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and                         , an employee of the Company (the “Employee”).

WHEREAS, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”).  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1.          Grant of Stock Units.  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded            Stock Units that represent hypothetical shares of Company Stock on a one-for-one basis (the “Stock Unit Grant”).

2.          Grant Subject to Plan Provisions.  This Stock Unit Grant is granted pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047794.pdf and http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047867.pdf, respectively; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.

3.          Stock Unit Account.  The Company shall establish and maintain a Stock Unit bookkeeping account (the “Account”) on its records for the Employee and shall record in the Account the number of Stock Units awarded to the Employee.  No shares of stock shall be issued to the Employee at the time the Stock Unit Grant is made.

4.          Vesting of the Stock Unit Grant.

(a)        Except as otherwise provided herein, a percentage between 0% and 100% of the Stock Units underlying this Stock Unit Grant shall vest on [insert third anniversary of the Date of Grant], provided that the Employee has remained continuously

1

employed by the Employer from the Date of Grant through the vesting date, based on the amount of the Employer’s “Cumulative Three Year Pre-Tax Operating Income” (as defined below) determined in accordance with the following schedule:

Vesting Thresholds - Cumulative Three Year Pre-Tax Operating Income	Percentage of Stock Unit Grant that Vests
Less than $     million	0	%
$     million	25	%
$     million	50	%
$     million	75	%
$     million or more	100	%

In the event the amount of Cumulative Three Year Pre-Tax Operating Income is between two of the thresholds set forth in the schedule above, the percentage of the Stock Units underlying the Stock Unit Grant that shall vest shall be determined by multiplying (A) 25% by (B) a fraction, the numerator of which is the excess of the actual Cumulative Three Year Pre-Tax Operating Income over the next lowest vesting threshold and the denominator of which is the excess of the next higher vesting threshold over the next lower vesting threshold and adding the product to the percentage corresponding to the next lowest vesting threshold.

For example, if Cumulative Three Year Pre-Tax Operating Income is $      million, the vesting percentage would be 86.5% = [[(     -     )/(     - -       )] x 25%] + 75%.

For purposes hereof, (i) “Cumulative Three Year Pre-Tax Operating Income” shall mean the Employer’s “Pre-Tax Operating Income” for the period beginning              through             , and (ii) “Pre-Tax Operating Income” means the consolidated pre-tax income of the Employer, computed in accordance with generally accepted accounting principles, (A) prior to reduction for income taxes and (B) excluding one time gains, nonrecurring restructuring charges and non-cash charges (including impairment of good will).  The determination of “Cumulative Three Year Pre-Tax Operating Income” shall be made by the Committee in good faith, which determination shall be binding on the Employee.

(b)        To the extent the Stock Unit Grant does not vest on           , the Stock Unit Grant shall be forfeited.  In the event of the Employee’s Termination of Service (as defined below) for any reason prior to           , all Stock Units underlying the Stock Unit Grant that are not then vested shall be forfeited.

(c)        Notwithstanding any other provision of this Grant Agreement to the contrary, upon the occurrence of a Change in Control prior to             , 100% of the Stock Unit Grant shall become vested as of the date of the Change in Control, provided that the Employee has remained continuously employed by the Employer from the Date of Grant through the date of such Change in Control.

(d)        Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the Plan shall be subject to the vesting schedule in this Section 4.

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5.             Termination of Service; Forfeiture of Unvested Stock Unit Grant.  In the event of the Employee’s Termination of Service prior to the date the Stock Unit Grant otherwise becomes vested in accordance with the provisions of Section 4 above, the Stock Unit Grant shall immediately be forfeited by the Employee.

“Termination of Service” means the Employee ceases to be employed by the Employer.  An Employee employed by a Subsidiary of the Company shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and such Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.

6.             Distribution of Shares.  The Company shall distribute to the Employee (or the Employee’s heirs in the event of the Employee’s death) at the time of vesting of the Stock Unit Grant in accordance with Section 4 above (but not later than March 15 of the calendar year following the calendar year in which the Stock Units vest), a number of shares of Company Stock equal to the number of Stock Units then held by the Employee that became vested at such time, subject to reduction for withholding of shares pursuant to Section 9 below.

7.             Rights and Restrictions.  The Stock Unit Grant shall not be transferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).  Prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock to the Employee, the Employee shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Unit Grant.  Specifically, the Employee shall not have the right to receive dividends or the right to vote such shares of Company Stock, nor shall the Employee have the right to sell, assign, pledge, hypothecate, encumber, transfer or otherwise dispose of, in whole or in part, the Stock Unit Grant, prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock.  The Employee shall not have any interest in any fund or specific assets of the Employer by reason of this Stock Unit Grant or the Account established for the Employee.

8.             Limitations.  Nothing herein shall limit the Company’s right to issue Company Stock, Stock Units or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates.  Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

9.             Withholding.  The Employee shall pay to the Employer or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the Stock Unit Grant and the Employer shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.  To the extent permitted by the Committee, the Employee may elect to have the Employer withhold Company Stock to pay any applicable withholding taxes

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resulting from the Stock Unit Grant, in accordance with any rules or regulations of the Committee then in effect.

10.           Expenses of Issuance of Company Stock.  The issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of Company Stock.

11.           Terms are Binding.  The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Employee and the Company.

12.           Compliance with Law.  The transfer of Company Stock hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required.  By signing this Grant Agreement, the Employee agrees not to sell any Company Stock at a time when applicable laws or the Company policies prohibit a sale.

13.           References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

14.           Notices.  Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Employer’s corporate records, or at any other address at which the Employee may specify in a notice delivered to the Company in the manner set forth herein.

15.           No Right to Continued Employment.  This Stock Unit Grant shall not confer upon the Employee any right to continue in the employ of the Employer nor shall this Stock Unit Grant interfere with the right of the Employer to terminate the Employee’s employment at any time.

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16.           Section 409A.  It is intended that the Stock Unit Grant issued hereunder shall comply with Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Stock Unit Grant is subject thereto, and the Stock Unit Grant shall be interpreted on a basis consistent with such intent.  In no event shall the Employee, directly or indirectly, designate the calendar year in which the shares underlying the Stock Unit Grant will be distributed.  This Grant Agreement may be amended without the consent of the Employee in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.

17.           Costs.  In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys’ fees shall be included as part of the judgment.

18.           Further Assurances.  The Employee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

19.           Counterparts.  For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

20.           Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.

21.           Entire Agreement.  This Grant Agreement, together with the Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Stock Unit Grant other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

22.           Amendment; Waiver.  This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved by the Committee to be effective as against the Company.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

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23.           Severability.  Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.

By:

Name: Robert C. Gasser

Title: CEO and President

I hereby accept the Stock Unit Grant described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

[Insert Name of the Employee]

EX-10.27.1

Exhibit 10.27.1

INVESTMENT TECHNOLOGY GROUP, INC.

2007 OMNIBUS EQUITY COMPENSATION PLAN

Amended and Restated Effective February 7, 2008

INVESTMENT TECHNOLOGY GROUP, INC.

2007 OMNIBUS EQUITY COMPENSATION PLAN

1.Purpose

The purpose of the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”) is to provide (i) designated employees of Investment Technology Group, Inc. (the “Company”) and its subsidiaries, and (ii) non-employee members of the board of directors of the Company with the opportunity to receive grants of stock options, stock units, stock awards, dividend equivalents and other stock-based awards.  The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefiting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders.  The Plan was originally effective on May 8, 2007 upon approval by the stockholders of the Company.  The effective date of this amendment and restatement is February 7, 2008.

The Investment Technology Group, Inc. Non-Employee Directors Stock Option Plan (the “Director Plan”), the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”), the Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program Subplan (the “SUA Subplan”), the Amended and Restated Investment Technology Group, Inc. Directors’ Retainer Fee Subplan (the “Directors’ Retainer Fee Subplan”), and the Amended and Restated Investment Technology Group, Inc. Directors’ Equity Subplan (the “Directors’ Equity Subplan”, and collectively with the SUA Subplan and the Directors’ Retainer Fee Subplan, the “Subplans”) were merged with and into this Plan as of May 8, 2007.  No additional grants will be made thereafter under the Director Plan and the 1994 Plan.  Outstanding grants under the Director Plan, the 1994 Plan and the Subplans as of May 8, 2007 will continue in effect according to their terms as in effect on May 8, 2007 (subject to such amendments as the Committee (as defined below) determines appropriate, consistent with the terms of the Director Plan, the 1994 Plan or the Subplans, as applicable), and the shares with respect to such outstanding grants will be issued or transferred under this Plan.  After May 8, 2007, the Subplans shall continue in effect as subplans of the Plan and grants and/or deferrals may continue to be made under the Subplans with shares associated with such grants and/or deferrals being issued under this Plan.

2.Definitions

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

(a)           “Board” means the Company’s Board of Directors.

(b)           “Change in Control” means and shall be deemed to have occurred:

(i)            if any person (within the meaning of the Exchange Act), other than the Company or a Related Party, is or becomes the “beneficial owner” (as defined in Rule 13d-3

under the Exchange Act), directly or indirectly, of Voting Securities representing 35% percent or more of the total voting power of all the then-outstanding Voting Securities; or

(ii)           if the individuals who, as of the date hereof, constitute the Board, together with those who first become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of the date hereof or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(iii)          upon consummation of a merger, consolidation, recapitalization or reorganization of the Company, reverse split of any class of Voting Securities, or an acquisition of securities or assets by the Company other than (i) any such transaction in which the holders of outstanding Voting Securities immediately prior to the transaction receive (or retain), with respect to such Voting Securities, voting securities of the surviving or transferee entity representing more than 50 percent of the total voting power outstanding immediately after such transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction, or (ii) any such transaction which would result in a Related Party beneficially owning more than 50 percent of the voting securities of the surviving or transferee entity outstanding immediately after such transaction; or

(iv)          upon consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets, other than any such transaction which would result in a Related Party owning or acquiring more than 50 percent of the assets owned by the Company immediately prior to the transaction; or

(v)           if the stockholders of the Company approve a plan of complete liquidation of the Company.

(c)“Code” means the Internal Revenue Code of 1986, as amended.

(d)“Committee” means (i) with respect to Grants to Employees, the Compensation Committee of the Board or another committee appointed by the Board to administer the Plan, (ii) with respect to Grants made to Non-Employee Directors, the Board, and (iii) with respects to Grants that are intended to be “qualified performance-based compensation” under section 162(m) of the Code, a committee that consists of two or more persons appointed by the Board, all of whom shall be “outside directors” as defined under section 162(m) of the Code and related Treasury regulations.

(e)“Company” means Investment Technology Group, Inc. and any successor corporation.

(f)“Company Stock” means the common stock of the Company.

(g)“Dividend Equivalent” means an amount determined by multiplying the number of shares of Company Stock subject to a Grant by the per-share cash dividend, or the per-share

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fair market value (as determined by the Committee) of any dividend in consideration other than cash, paid by the Company on its Company Stock.

(h)           “Employee” means an employee of the Employer (including an officer or director who is also an employee).

(i)            “Employer” means the Company and its subsidiaries.

(j)            “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(k)           “Exercise Price” means the per share price at which shares of Company Stock may be purchased under an Option, as designated by the Committee.

(l)            “Fair Market Value,” unless otherwise required by an applicable provision of the Code, as of any date, means the closing sales price of the Common Stock as reported on the New York Stock Exchange on the date of grant; provided, however, that at any time that the Common Stock is not quoted on the New York Stock Exchange on such trading days, Fair Market Value shall be determined by the Committee in its discretion.

(m)          “Grant” means an Option, Stock Unit, Stock Award, SAR, Dividend Equivalent or Other Stock-Based Award granted under the Plan.

(n)           “Grant Agreement” means the written instrument that sets forth the terms and conditions of a Grant, including all amendments thereto.

(o)           “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under section 422 of the Code.

(p)           “Non-Employee Director” means a member of the Board who is not an employee of the Employer.

(q)           “Nonqualified Stock Option” means an Option that is not intended to be taxed as an incentive stock option under section 422 of the Code.

(r)            “Option” means an option to purchase shares of Company Stock, as described in Section 7.

(s)           “Other Stock-Based Award” means any Grant based on, measured by or payable in, Company Stock (other than a Grant described in Sections 7, 8, 9 or 10(a) of the Plan), as described in Section 10(b).

(t)            “Participant” means an Employee or Non-Employee Director designated by the Committee to participate in the Plan.

(u)           “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an

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unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

(v)           “Plan” means this Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan, as in effect from time to time.

(w)          “Related Party” means (a) a Subsidiary of the Company; (b) an employee or group of employees of the Company or any Subsidiary of the Company; (c) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned Subsidiary of the Company; or (d) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of Voting Securities.

(x)            “SAR” means a stock appreciation right as described in Section 10(a).

(y)           “Stock Award” means an award of Company Stock as described in Section 9.

(z)            “Stock Unit” means an award of a phantom unit representing a share of Company Stock, as described in Section 8.

(aa)         “Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (a) if a corporation, fifty (50) percent or more of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or combination thereof; or (b) if a partnership, limited liability company, association or other business entity, fifty (50) percent or more of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes of this definition, a Person or Persons will be deemed to have a fifty (50) percent or more ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons are allocated fifty (50) percent or more of partnership, limited liability company, association or other business entity gains or losses or control the managing director or member or general partner of such partnership, limited liability company, association or other business entity.

(bb)         “Voting Securities or Security” means any securities of the Company which carry the right to vote generally in the election of directors.

3.Administration

(a)           Committee.  The Plan shall be administered and interpreted by the Compensation Committee of the Board or another committee appointed by the Board to administer the Plan with respect to grants to Employees.  The Plan shall be administered and interpreted by the Board with respect to grants to Non-Employee Directors.  The Board or committee, as applicable, that has authority with respect to a specific Grant shall be referred to as the

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“Committee” with respect to that Grant.  Ministerial functions may be performed by an administrative committee comprised of Company employees appointed by the Committee.

(b)           Committee Authority.  The Committee shall have the sole authority to (i) determine the Participants to whom Grants shall be made under the Plan, (ii) determine the type, size and terms and conditions of the Grants to be made to each such Participant, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms and conditions of any previously issued Grant, subject to the provisions of Section 18 below, and (v) deal with any other matters arising under the Plan.

(c)           Committee Determinations.  The Committee shall have full power and express discretionary authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion.  The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder.  All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated Participants.

4.Grants

(a)           Grants under the Plan may consist of Options as described in Section 7, Stock Units as described in Section 8, Stock Awards as described in Section 9, and SARs or Other Stock-Based Awards as described in Section 10.  All Grants shall be subject to such terms and conditions as the Committee deems appropriate and as are specified in writing by the Committee to the Participant in the Grant Agreement.

(b)           All Grants shall be made conditional upon the Participant’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and determinations of the Committee shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under such Grant.  Grants under a particular Section of the Plan need not be uniform as among the Participants.

5.Shares Subject to the Plan

(a)           Shares Authorized.  The total aggregate number of shares of Company Stock that may be issued under the Plan shall equal that number of shares of Company Stock subject to outstanding grants under the Director Plan and the 1994 Plan as of May 8, 2007 as well as shares remaining available for issuance under the Director Plan and the 1994 Plan but not subject to previously exercised, vested or paid grants as of May 8, 2007.

(b)           Source of Shares; Share Counting.  Shares issued under the Plan may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of the Plan.  If and

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to the extent Options or SARs granted under the Plan (including options granted under the Director Plan, the 1994 Plan and the Subplans) terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised, and if and to the extent that any Stock Awards, Stock Units, or Other Stock-Based Awards (including any stock awards, stock units or other-stock based awards granted under the Director Plan, the 1994 Plan and the Subplans) are forfeited or terminated, or otherwise are not paid in full, the shares reserved for such Grants shall again be available for purposes of the Plan.  Shares of Company Stock surrendered in payment of the Exercise Price of an Option shall again be available for purposes of the Plan.  To the extent any Grants are paid in cash, and not in shares of Company Stock, any shares previously subject to such Grants shall again be available for issuance or transfer under the Plan.

(c)           Individual Limits.  All Grants under the Plan shall be expressed in shares of Company Stock.  The maximum aggregate number of shares of Company Stock with respect to which all Grants may be made under the Plan to any individual during any calendar year shall be 1,000,000 shares, subject to adjustment as described in subsection (d) below.  A Participant may not accrue Dividend Equivalents during any calendar year in excess of $1,000,000.  The individual limits of this subsection (c) shall apply without regard to whether the Grants are to be paid in Company Stock or cash.  All cash payments (other than with respect to Dividend Equivalents) shall equal the Fair Market Value of the shares of Company Stock to which the cash payments relate.

(d)           Adjustments.  If there is any change in the number or kind of shares of Company Stock outstanding by reason of a stock dividend, spinoff, stock split or reverse stock split, or by reason of a combination, reorganization, recapitalization or reclassification affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, the maximum number of shares of Company Stock available for Grants, the maximum number of shares of Company Stock that any individual participating in the Plan may be granted in any year, the number of shares covered by outstanding Grants, the kind of shares issued under the Plan and outstanding Grants, and the price per share of outstanding Grants shall be equitably adjusted by the Committee, as the Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.  In addition, the Committee shall have discretion to make the foregoing equitable adjustments in any circumstances in which an adjustment is not mandated by this subsection (d) or applicable law, including in the event of a Change in Control.  Any adjustments to outstanding Grants shall be consistent with section 409A or 422 of the Code, to the extent applicable.  Any adjustments determined by the Committee shall be final, binding and conclusive.

6.Eligibility for Participation

(a)           Eligible Persons.  All Employees, including Employees who are officers or members of the Board, and all Non-Employee Directors shall be eligible to participate in the Plan.

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(b)           Selection of Participants.  The Committee shall select the Employees and Non-Employee Directors to receive Grants and shall determine the number of shares of Company Stock subject to each Grant.

7.Options

(a)           General Requirements. The Committee may grant Options to an Employee or Non-Employee Director upon such terms and conditions as the Committee deems appropriate under this Section 7.  The Committee shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees and Non-Employee Directors.

(b)           Type of Option, Price and Term.

(i)            The Committee may grant Incentive Stock Options or Nonqualified Stock Options or any combination of the two, all in accordance with the terms and conditions set forth herein.  Incentive Stock Options may be granted only to Employees of the Company or its parents or subsidiaries, as defined in section 424 of the Code.  Nonqualified Stock Options may be granted to Employees or Non-Employee Directors.

(ii)           The Exercise Price of Company Stock subject to an Option shall be determined by the Committee and may be equal to or greater than the Fair Market Value of a share of Company Stock on the date the Option is granted.  However, an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary, as defined in section 424 of the Code, unless the Exercise Price per share is not less than 110% of the Fair Market Value of the Company Stock on the date of grant.

(iii)          The Committee shall determine the term of each Option, which shall not exceed ten years from the date of grant.  However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary, as defined in section 424 of the Code, may not have a term that exceeds five years from the date of grant.

(c)           Exercisability of Options.

(i)            Options shall become exercisable in accordance with such terms and conditions as may be determined by the Committee and specified in the Grant Agreement.  The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.

(ii)           The Committee may provide in a Grant Agreement that the Participant may elect to exercise part or all of an Option before it otherwise has become exercisable.  Any shares so purchased shall be restricted shares and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time of repurchase, or such other restrictions as the Committee deems appropriate.

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(iii)          Options granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations).

(d)           Termination of Employment or Service.  Except as provided in the Grant Agreement, an Option may only be exercised while the Participant is employed by the Employer, or providing service as a Non-Employee Director.  The Committee shall determine in the Grant Agreement under what circumstances and during what time periods a Participant may exercise an Option after termination of employment or service.

(e)           Exercise of Options.  A Participant may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company.  The Participant shall pay the Exercise Price for the Option (i) in cash, (ii) if permitted by the Committee, by delivering shares of Company Stock owned by the Participant and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation to ownership of shares of Company Stock having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (iv) by such other method as the Committee may approve.  Shares of Company Stock used to exercise an Option shall have been held by the Participant for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option.  Payment for the shares pursuant to the Option, and any required withholding taxes, must be received by the time specified by the Committee depending on the type of payment being made, but in all cases prior to the issuance of the Company Stock.

(f)            Limits on Incentive Stock Options.  Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option.  An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary, as defined in section 424 of the Code.

8.Stock Units

(a)General Requirements.  The Committee may grant Stock Units to an Employee or Non-Employee Director, upon such terms and conditions as the Committee deems appropriate under this Section 8.  Each Stock Unit shall represent the right of the Participant to receive a share of Company Stock or an amount based on the value of a share of Company Stock.  All Stock Units shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan.

(b)Terms of Stock Units.  The Committee may grant Stock Units that are payable on terms and conditions determined by the Committee, which may include payment based on

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achievement of performance goals.  Stock Units may be paid at the end of a specified vesting or performance period, or payment may be deferred to a date authorized by the Committee.  The Committee shall determine the number of Stock Units to be granted and the requirements applicable to such Stock Units.

(c)           Payment With Respect to Stock Units.  Payment with respect to Stock Units shall be made in cash, in Company Stock, or in a combination of the two, as determined by the Committee.  The Grant Agreement shall specify the maximum number of shares that can be issued under the Stock Units.

(d)           Requirement of Employment or Service.  The Committee shall determine in the Grant Agreement under what circumstances a Participant may retain Stock Units after termination of the Participant’s employment or service, and the circumstances under which Stock Units may be forfeited.

9.Stock Awards

(a)General Requirements. The Committee may issue shares of Company Stock to an Employee or Non-Employee Director under a Stock Award, upon such terms and conditions as the Committee deems appropriate under this Section 9.  Shares of Company Stock issued pursuant to Stock Awards may be issued for cash consideration or for no cash consideration, and subject to restrictions or no restrictions, as determined by the Committee.  The Committee may establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Committee deems appropriate, including restrictions based upon the achievement of specific performance goals.  The Committee shall determine the number of shares of Company Stock to be issued pursuant to a Stock Award.

(b)           Requirement of Employment or Service.  The Committee shall determine in the Grant Agreement under what circumstances a Participant may retain Stock Awards after termination of the Participant’s employment or service, and the circumstances under which Stock Awards may be forfeited.

(c)           Restrictions on Transfer.  While Stock Awards are subject to restrictions, a Participant may not sell, assign, transfer, pledge or otherwise dispose of the shares of a Stock Award except upon death as described in Section 15(a).  Each certificate for a share of a Stock Award shall contain a legend giving appropriate notice of the restrictions in the Grant.  The Participant shall be entitled to have the legend removed when all restrictions on such shares have lapsed.  The Company may retain possession of any certificates for Stock Awards until all restrictions on such shares have lapsed.

(d)           Right to Vote and to Receive Dividends.  The Committee shall determine to what extent, and under what conditions, the Participant shall have the right to vote shares of Stock Awards and to receive any dividends or other distributions paid on such shares during the restriction period.

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10.Stock Appreciation Rights and Other Stock-Based Awards

(a)SARs.  The Committee may grant SARs to an Employee or Non-Employee Director separately or in tandem with an Option.  The following provisions are applicable to SARs:

(i)            Base Amount.  The Committee shall establish the base amount of the SAR at the time the SAR is granted.  The base amount of each SAR shall be equal to the per share Exercise Price of the related Option or, if there is no related Option, an amount that is at least equal to the Fair Market Value of a share of Company Stock as of the date of Grant of the SAR.

(ii)           Tandem SARs.  The Committee may grant tandem SARs either at the time the Option is granted or at any time thereafter while the Option remains outstanding; provided, however, that, in the case of an Incentive Stock Option, SARs may be granted only at the date of the grant of the Incentive Stock Option.  In the case of tandem SARs, the number of SARs granted to a Participant that shall be exercisable during a specified period shall not exceed the number of shares of Company Stock that the Participant may purchase upon the exercise of the related Option during such period.  Upon the exercise of an Option, the SARs relating to the Company Stock covered by such Option shall terminate.  Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of shares of Company Stock.

(iii)          Exercisability.  An SAR shall be exercisable during the period specified by the Committee in the Grant Agreement and shall be subject to such vesting and other restrictions as may be specified in the Grant Agreement.  The Committee may grant SARs the exercise of which is subject to achievement of performance goals or other conditions.  The Committee may accelerate the exercisability of any or all outstanding SARs at any time for any reason.  The Committee shall determine in the Grant Agreement under what circumstances and during what periods a Participant may exercise an SAR after termination of employment or service.  A tandem SAR shall be exercisable only while the Option to which it is related is exercisable.

(iv)          Grants to Non-Exempt Employees.  SARs granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations).

(v)           Value of SARs.  When a Participant exercises SARs, the Participant shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the number of SARs exercised.  The stock appreciation for an SAR is the amount by which the Fair Market Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR as described in subsection (i).

(vi)          Form of Payment.  The Committee shall determine whether the stock appreciation for an SAR shall be paid in the form of shares of Company Stock, cash or a

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combination of the two.  For purposes of calculating the number of shares of Company Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on the date of exercise of the SAR.  If shares of Company Stock are to be received upon exercise of an SAR, cash shall be delivered in lieu of any fractional share.

(b)           Other Stock-Based Awards.  The Committee may grant other awards not specified in Sections 7, 8 or 9 or subsection (a) above that are based on or measured by Company Stock to Employees and Non-Employee Directors, on such terms and conditions as the Committee deems appropriate.  Other Stock-Based Awards may be granted subject to achievement of performance goals or other conditions and may be payable in Company Stock or cash, or in a combination of the two, as determined by the Committee in the Grant Agreement.

11.          Dividend Equivalents.

(a)           General Requirements.  When the Committee makes a Grant under the Plan, the Committee may grant Dividend Equivalents in connection with the Grant, under such terms and conditions as the Committee deems appropriate under this Section 11.  Dividend Equivalents may be paid to Participants currently or may be deferred, as determined by the Committee.  All Dividend Equivalents that are not paid currently shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan.  Dividend Equivalents may be accrued as a cash obligation, or may be converted to Stock Units for the Participant, and deferred Dividend Equivalents may accrue interest, all as determined by the Committee.  The Committee may provide that Dividend Equivalents shall be payable based on the achievement of specific performance goals.

(b)           Payment with Respect to Dividend Equivalents.  Dividend Equivalents may be payable in cash or shares of Company Stock or in a combination of the two, as determined by the Committee.

12.Qualified Performance-Based Compensation

(a)Designation as Qualified Performance-Based Compensation.  The Committee may determine that Stock Units, Stock Awards, Dividend Equivalents or Other Stock-Based Awards granted to an Employee shall be considered “qualified performance-based compensation” under section 162(m) of the Code, in which case the provisions of this Section 12 shall apply.  The Committee may also grant Options or SARs under which the exercisability of the Options is subject to achievement of performance goals as described in this Section 12 or otherwise.

(b)Performance Goals.  When Grants are made under this Section 12, the Committee shall establish in writing (i) the objective performance goals that must be met, (ii) the period during which performance will be measured, (iii) the maximum amounts that may be paid if the performance goals are met, and (iv) any other conditions that the Committee deems appropriate and consistent with the requirements of section 162(m) of the Code for “qualified performance-based compensation.”  The performance goals shall satisfy the requirements for “qualified performance-based compensation,” including the requirement that the achievement of the goals

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be substantially uncertain at the time they are established and that the performance goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to what extent the performance goals have been met.  The Committee shall not have discretion to increase the amount of compensation that is payable, but may reduce the amount of compensation that is payable, pursuant to Grants identified by the Committee as “qualified performance-based compensation.”

(c)           Criteria Used for Objective Performance Goals.  The Committee shall use objectively determinable performance goals based on one or more of the following criteria:  stock price, earnings per share, price-earnings multiples, net earnings, operating earnings, revenue, number of days sales outstanding in accounts receivable, productivity, margin, EBITDA (earnings before interest, taxes, depreciation and amortization), net capital employed, return on assets, shareholder return, return on equity, return on capital employed, growth in assets, unit volume, sales, cash flow, market share, relative performance to a comparison group designated by the Committee, or strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, customer growth, geographic business expansion goals, cost targets or goals relating to acquisitions or divestitures.  The performance goals may relate to one or more business units or the performance of the Company as a whole, or any combination of the foregoing.  Performance goals need not be uniform as among Participants.

(d)           Timing of Establishment of Goals. The Committee shall establish the performance goals in writing either before the beginning of the performance period or during a period ending no later than the earlier of (i) 90 days after the beginning of the performance period or (ii) the date on which 25% of the performance period has been completed, or such other date as may be required or permitted under applicable regulations under section 162(m) of the Code.

(e)           Certification of Results.  The Committee shall certify the performance results for the performance period specified in the Grant Agreement after the performance period ends.  The Committee shall determine the amount, if any, to be paid pursuant to each Grant based on the achievement of the performance goals and the satisfaction of all other terms of the Grant Agreement.

(f)            Death, Disability or Other Circumstances.  The Committee may provide in the Grant Agreement that Grants under this Section 12 shall be payable, in whole or in part, in the event of the Participant’s death or disability, a Change in Control or under other circumstances consistent with the Treasury regulations and rulings under section 162(m) of the Code.

13.          Deferrals

The Committee may permit or require a Participant to defer receipt of the payment of cash (including dividend equivalents) or the delivery of shares that would otherwise be due to the Participant in connection with any Grant.  The Committee shall establish rules and procedures for any such deferrals, consistent with applicable requirements of section 409A of the Code.

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14.Withholding of Taxes

(a)           Required Withholding.  All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements.  The Company may require that the Participant or other person receiving or exercising Grants pay to the Company the amount of any federal, state or local taxes that the Company is required to withhold with respect to such Grants, or the Company may deduct from other wages paid by the Company the amount of any withholding taxes due with respect to such Grants.

(b)           Election to Withhold Shares.  If the Committee so permits, a Participant may elect to satisfy the Company’s tax withholding obligation with respect to Grants paid in Company Stock by having shares withheld, at the time such Grants become taxable, up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  The election must be in a form and manner prescribed by the Committee.

15.Transferability of Grants

(a)Restrictions on Transfer.  Except as described in subsection (b) below, only the Participant may exercise rights under a Grant during the Participant’s lifetime, and a Participant may not transfer those rights except by will or by the laws of descent and distribution.  When a Participant dies, the personal representative or other person entitled to succeed to the rights of the Participant may exercise such rights.  Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Participant’s will or under the applicable laws of descent and distribution.

(b)Transfer of Nonqualified Stock Options to or for Family Members.  Notwithstanding subsection (a) above, the Committee may provide, in a Grant Agreement, that a Participant may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with the applicable securities laws, according to such terms as the Committee may determine; provided that the Participant receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

16.Consequences of a Change in Control

(a)In the event of a Change in Control, the Committee may take any one or more of the following actions with respect to some or all outstanding Grants, without the consent of any Participant: (i) the Committee may determine that outstanding Options and SARs shall be fully exercisable, and restrictions on outstanding Stock Awards and Stock Units shall lapse, as of the date of the Change in Control or at such other time as the Committee determines, (ii) the Committee may require that Participants surrender their outstanding Options and SARs in exchange for one or more payments by the Company, in cash or Company Stock as determined by the Committee, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Participant’s unexercised Options and SARs exceeds the

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Exercise Price, or Base Amount, as applicable, if any, and on such terms as the Committee determines, (iii) after giving Participants an opportunity to exercise their outstanding Options and SARs, the Committee may terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate, (iv) with respect to Participants holding Stock Units, Other Stock-Based Awards or Dividend Equivalents, the Committee may determine that such Participants shall receive one or more payments in settlement of such Stock Units, Other Stock-Based Awards or Dividend Equivalents, in such amount and form and on such terms as may be determined by the Committee, (v) if the Company is the surviving corporation, the Committee may determine that Grants will remain outstanding after the Change in Control, or (vi) if the Company is not the surviving corporation, the Committee may determine that Grants that remain outstanding after the Change in Control shall be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation).  Such acceleration, surrender, termination, settlement or conversion shall take place as of the date of the Change in Control or such other date as the Committee may specify.

(b)Other Transactions.  The Committee may provide in a Grant Agreement that a sale or other transaction involving a subsidiary or other business unit of the Company shall be considered a Change in Control for purposes of a Grant, or the Committee may establish other provisions that shall be applicable in the event of a specified transaction.

17.Requirements for Issuance of Shares

No Company Stock shall be issued in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance of such Company Stock have been complied with to the satisfaction of the Committee.  The Committee shall have the right to condition any Grant made to any Participant hereunder on such Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions.  Certificates representing shares of Company Stock issued under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.  Except as determined under Section 9(a), no Participant shall have any right as a shareholder with respect to Company Stock covered by a Grant until shares have been issued to the Participant.

18.Amendment and Termination of the Plan

(a)Amendment.  The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without approval of the stockholders of the Company if such approval is required in order to comply with the Code or applicable laws, or to comply with applicable stock exchange requirements.  No amendment or termination of this Plan shall, without the consent of the Participant, materially impair any rights or obligations under any Grant previously made to the Participant under the Plan, unless such right has been reserved in the Plan or the Grant Agreement, or except as provided in Section 19(b) below.  Notwithstanding anything in the Plan to the contrary, the Board may amend the Plan in such manner as it deems appropriate in the event of a change in applicable law or regulations.

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(b)           No Repricing Without Stockholder Approval.  Notwithstanding anything in the Plan to the contrary, the Committee may not reprice Options, nor may the Board amend the Plan to permit repricing of Options, unless the stockholders of the Company provide prior approval for such repricing.  The term “repricing” shall have the meaning given that term in Section 303A(8) of the New York Stock Exchange Listed Company Manual, as in effect from time to time.

(c)           Stockholder Approval for “Qualified Performance-Based Compensation.”  If Grants are made under Section 12 above, the Plan must be reapproved by the Company’s stockholders no later than the first stockholders meeting that occurs in the fifth year following the year in which the stockholders previously approved the provisions of Section 12, if additional Grants are to be made under Section 12 and if required by section 162(m) of the Code or the regulations thereunder.

(d)           Termination of Plan.  The Plan shall terminate on May 7, 2017, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders.  The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant.

19.Miscellaneous

(a)Grants in Connection with Corporate Transactions and Otherwise.  Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other stock-based awards outside of this Plan.  Without limiting the foregoing, the Committee may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company in substitution for a grant made by such corporation.  The terms and conditions of the Grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives, as determined by the Committee

(b)Compliance with Law.  The Plan, the exercise of Options and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required.  With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable provisions of section 422 of the Code, that Grants of “qualified performance-based compensation” comply with the applicable provisions of section 162(m) of the Code and that, to the extent applicable, Grants are either exempt from, or comply with, the requirements of section 409A of the Code.  To the extent that any legal requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Act or section 422,

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162(m) or 409A of the Code, that Plan provision shall cease to apply.  The Committee may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation.  The Committee may also adopt rules regarding the withholding of taxes on payments to Participants.

(c)           Enforceability.  The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

(d)           Funding of the Plan; Limitation on Rights.  This Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under this Plan.  Nothing contained in the Plan and no action taken pursuant hereto shall create or be construed to create a fiduciary relationship between the Company and any Participant or any other person.  No Participant or any other person shall under any circumstances acquire any property interest in any specific assets of the Company.  To the extent that any person acquires a right to receive payment from the Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.

(e)           Rights of Participants.  Nothing in this Plan shall entitle any Employee, Non-Employee Director or other person to any claim or right to receive a Grant under this Plan.  Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employment or service of the Employer.

(f)            No Fractional Shares.  No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Grant.  The Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(g)           Employees Subject to Taxation Outside the United States.  With respect to Participants who are subject to taxation in countries other than the United States, the Committee may make Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of the applicable countries, and the Committee may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws.

(h)           Governing Law.  The validity, construction, interpretation and effect of the Plan and Grant Agreements issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of New York, without giving effect to the conflict of laws provisions thereof.

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EX-10.30

Exhibit 10.30

LEASE

BETWEEN

BOSTON WHARF CO.

Landlord

AND

THE MacGREGOR GROUP, INC.

Tenant

321 Summer Street

Boston, Massachusetts

AGREEMENT OF LEASE

AGREEMENT OF LEASE made as of the 15th day of August, 2000, by and between BOSTON WHARF CO., a Massachusetts general partnership (hereinafter referred to as “Landlord”) and THE MacGREGOR GROUP, INC., a Delaware corporation (hereinafter referred to as “Tenant”).

WITNESSETH:

Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the entire first (1st), second (2nd) and third (3rd) floors and a portion of the so-called second basement level, all as shown on Exhibit A attached hereto and made a part hereof (hereinafter referred to as the “Premises” or the “Demised Premises”) contained in the building known and numbered as 321 Summer Street, Boston, Suffolk County, Massachusetts (hereinafter referred to as the “Building”).

1.REFERENCE DATA

Each reference in this Lease to any of the terms and titles contained in this Article shall be deemed and construed to incorporate the data stated following that term or title in this Article.

1)	Additional Rent:	Sums or other charges payable by Tenant to Landlord under this Lease, other than Yearly Fixed Rent.
2)	Brokers:	Cushman & Wakefield of Massachusetts, Inc.
3)	Business Day:	All days except Saturdays, Sundays, days defined as “legal holidays” for the entire state under the laws of the Commonwealth of Massachusetts, and such other days as Tenant presently or in the future recognizes as holidays for Tenant’s general staff.
4)	Final Plans Date:	August 1,2000.
5)	Land:	The parcel of land on which the Building is situated.
6)	Landlord’s Address:	253 Summer Street Boston, Massachusetts 02210
7)	Landlord’s Architect:	Any licensed architect designated by Landlord.
8)	Lease Year:	A twelve (12) month period beginning on the Term Commencement Date and each succeeding twelve (12) month period during the Term of this Lease, except that if the Term Commencement Date shall be other than the first day of a calendar month, the first Lease Year shall include the partial calendar month in which the Term

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		Commencement Date occurs as well as the succeeding twelve (12) full calendar months.
9)	Mortgage:	A mortgage, deed of trust, trust indenture, or other security instrument of record creating an interest in or affecting title to the Property or any part thereof or interest therein, and any and all renewals, modifications, consolidations or extensions of any such instrument.
10)	Mortgagee:	The holder of any Mortgage.
11)	Property:	The Land and Building.
12)	Rent:	Yearly Fixed Rent and Additional Rent.
13)	Rentable Area:	37,551 square feet.
14)	Tenant’s Address:	Until the Term Commencement Date, 316 Summer Street, Boston, Massachusetts 02210, and thereafter, the Demised Premises.
15)	Term Commencement
	Date:	As defined in Section 3.2.
16)	Term of this Lease:	As defined in Section 3.1.
17)	Termination Date:	As defined in Section 3.1.
18)	Use of Demised Premises:	General office purposes.
19)	Yearly Fixed Rent:	$1,192,244.28 through the end of the fifth Lease Year, and $1,380,000 thereafter.

2.DESCRIPTION OF DEMISED PREMISES

2.1Demised Premises. The Demised Premises are that portion of the Building as described above (as the same may from time to time be constituted after changes therein, additions thereto and eliminations therefrom pursuant to rights of Landlord hereinafter reserved).

2.2Appurtenant Rights. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reasonable rules from time to time made by Landlord of which Tenant is given notice, those common roadways, walkways, elevators, hallways and stairways necessary for access to that portion of the Building occupied by the Demised Premises. Subject to Landlord’s reasonable security requirements, Tenant shall have access to the Demised Premises at all times, utilizing keys or such other devices as Landlord may supply to regulate entry by means of the main entrance of the Building.

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2.3Reservations. All the perimeter walls of the Demised Premises except the inner surfaces thereof, any space in or adjacent to the Demised Premises used for servicing other portions of the Building exclusively or in common with the Demised Premises, including without limitation (where applicable) shafts, stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, and the use thereof, as well as the right of access through the Demised Premises for the purpose of operation, maintenance, decoration and repair, are expressly reserved to Landlord.

3.TERM OF LEASE

3.1Term. The Term of this Lease is ten (10) years (or until such Term shall sooner cease or expire) commencing on the Term Commencement Date and ending on the day immediately prior to the tenth (10th) anniversary thereof, except that if the Term Commencement Date is other than the first day of a calendar month, the Term of this Lease shall end on the last day of the calendar month in which said tenth (10th) anniversary occurs. The date on which the Term of this Lease is scheduled to expire is hereinafter referred to as the “Termination Date”.

3.2Term Commencement Date. The Term Commencement Date shall be the earlier of (a) the date on which, pursuant to permission therefor duly given by Landlord, Tenant undertakes Use of the Demised Premises for general office purposes, or (b) the date on which the Demised Premises are ready for Tenant’s occupancy in accordance with the provisions of Section 4.2.

3.3Option to Extend. So long as this Lease remains in full force and effect, Tenant may extend the Term of this Lease for five (5) years by giving notice of such election to Landlord at least twelve (12) months prior to the originally-scheduled Termination Date. Such extension shall be on the same terms and conditions set forth herein, subject to the provisions of Section 6.1, except that Tenant shall have no further option to extend said Term.

4.WORK BY LANDLORD; TENANT’S ACCESS

4.1Completion Date - Delays. Subject to delay by causes beyond the reasonable control of Landlord or caused by the action or inaction of Tenant, Landlord shall use reasonable diligence in order to have the Demised Premises ready for occupancy by Tenant as soon as practicable. The failure to have the Demised Premises so ready by a particular date shall in no way affect the validity of this Lease or the obligations of Tenant hereunder, provided however that Tenant may terminate this Lease by notice given to Landlord at any time after May 31, 2001 if the Demised Premises are not ready for Tenant’s occupancy within fifteen (15) days following receipt of such notice.

4.2When Premises Deemed Ready. The Demised Premises shall be conclusively deemed ready for Tenant’s occupancy after Landlord gives notice to Tenant, together with a certificate from Landlord’s Architect, that the installations to be done by Landlord in the Demised Premises (as hereinafter set forth in this Article) have been substantially completed by Landlord insofar as is practicable in view of delays or defaults, if any, of Tenant. Such work shall not be deemed incomplete if only minor or insubstantial details of construction or

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mechanical adjustments remain to be done, or if a delay is caused in whole or in part by Tenant through the delay of Tenant in submitting any plans and/or specifications, supplying information, approving plans, specifications or estimates, giving authorization or otherwise. Landlord’s Architect’s certificate of substantial completion, as hereinabove stated, given in good faith, or of any other facts pertinent to this Article, shall be deemed conclusive of the statements therein contained and binding upon Tenant.   Following the completion of the work to be performed by Landlord pursuant to this Article, Landlord shall obtain from the Boston Inspectional Services Department a certificate authorizing the use and occupancy of the Demised Premises pursuant to the applicable provisions of the Massachusetts State Building Code. Landlord will save Tenant harmless, and will exonerate and indemnify Tenant from and against, any claims, liabilities, penalties, damages, losses, costs and expenses (including without limitation reasonable attorneys’ fees) resulting from Landlord’s failure to obtain such certificate.

4.3Landlord’s Work. Landlord shall, at Landlord’s expense, perform the work described in Exhibit B attached hereto and made a part hereof in order to make certain improvements to the so-called shell and core of the Building (hereinafter referred to as the “Base Building Work”). In addition, Landlord shall perform such further work as may be necessary to lay out the Demised Premises for Tenant’s occupancy (hereinafter referred to as the “Premises Work”). Tenant shall furnish final architectural, electrical and mechanical construction drawings and specifications describing the Premises Work (hereinafter referred to as the “Plans”). The Plans shall be subject to approval by Landlord and Landlord’s Architect (which approval shall not be unreasonably withheld or delayed in the case of any proposed Premises Work of an interior, non-structural nature) and shall be prepared so as to comply with their requirements in order to avoid conflict with the design and function of the Building. It shall be Tenant’s responsibility to assure that the Plans have been delivered to Landlord and approved as aforesaid on or before the Final Plans Date. Tenant has assured itself by direct communication with architects and engineers that the final, approved Plans can be delivered to Landlord on or before the Final Plans Date, provided that Tenant promptly furnishes complete information concerning its requirements to said architects and engineers as and when requested by them; and Tenant covenants and agrees to cause said final, approved Plans to be delivered to Landlord on or before said Final Plans Date and to devote such time as may be necessary in consultation with said architects and engineers to enable them to complete and submit all Plans within the required time limit. Following the presentation to Landlord of invoices and receipts evidencing to Landlord’s reasonable satisfaction the architectural and engineering costs incurred by Tenant with respect to the Plans, Landlord shall pay to Tenant an amount equal to such costs (hereafter referred to as the “Design Allowance”). Landlord shall solicit bids from the contractors identified on Exhibit B-1 attached hereto and made a part hereof for the performance of the Premises Work subject to such terms and conditions as Landlord may customarily prescribe for projects of such type. Landlord shall provide copies of such bids to Tenant and Tenant shall, within seven (7) days thereafter, select a contractor from among the bidders to perform the Premises Work.

4.4Conclusiveness of Landlord’s Performance. Tenant shall be conclusively deemed to have agreed that Landlord has performed all of its obligations under this Article 4 unless not later than the end of the ninth calendar month next beginning after Landlord’s notice of substantial completion under Section 4.2 Tenant shall give Landlord written notice specifying the respects in which Landlord has not performed such obligations. Landlord shall promptly correct any defective or incomplete items of work specified in any such notice. Landlord shall in

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all events be responsible throughout the Term of this Lease for performance of the repairs described in Section 7.4, and shall further use reasonable efforts to enforce on Tenant’s behalf any warranties received by Landlord in connection with the work described in the Plans.

4.5Entry by Tenant; Interference With Construction. In the event that Tenant is permitted by Landlord to enter the Demised Premises prior to the Term Commencement Date to undertake such work as is to be performed by Tenant pursuant to this Lease in order to prepare the Demised Premises for Tenant’s occupancy, such entry shall be deemed to be pursuant to a license from Landlord to Tenant and shall be at the risk of Tenant. In no event shall Tenant interfere with any construction work being performed by or on behalf of Landlord in or around the Building; without limiting the generality of the foregoing, Tenant shall comply with all instructions issued by Landlord’s contractors relative to the moving of Tenant’s equipment and other property into the Demised Premises and shall pay any fees or costs imposed in connection therewith.

4.6Tenant’s Cost. Tenant shall bear all costs incurred by Landlord in order to perform the Premises Work to the extent that such costs exceed Landlord’s Contribution (as such term is hereinafter defined). Payment of such excess costs shall be made prorata as the Premises Work progresses, and within ten (10) days next following periodic billings by Landlord to Tenant. For purposes hereof, “Landlord’s Contribution” shall mean the sum of $938,775 less the Design Allowance.

4.7Change Orders. Tenant may from time to time propose revisions to the Plans. Landlord shall not unreasonably withhold its consent to any such revisions of a non-structural nature which will not tend to delay completion of Landlord’s work hereunder and do not affect the common areas or facilities of the Property. To the extent that the Plans are revised hereunder so as to result in any increase or decrease in the cost of such work, the amount of such increase shall be added to and the amount of such decrease shall subtracted from the amount which Tenant is obligated to pay pursuant to Section 4.6.

5.USE OF PREMISES

5.1Permitted Use. Tenant may during the Term of this Lease occupy and use the Demised Premises for the permitted Use set forth in Article 1 and for no other purpose. Service and utility areas (whether or not a part of the Demised Premises) shall be used only for the particular purpose for which they are designated.

5.2Prohibited Uses. Tenant shall not use, or suffer or permit the use of, or suffer or permit anything to be done in or anything to be brought into or kept in, the Demised Premises or any part thereof (i) which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease, (ii) for any unlawful purposes or in any unlawful manner, or (iii) which, in the reasonable judgment of Landlord shall in any way (a) impair or tend to impair the appearance or reputation of the Building, (b) impair or interfere with or tend to impair or interfere with any of the Building services or the proper and economic heating, cleaning, air conditioning or other servicing of the Building or with the use of any of the other areas of the Building, or (c) occasion discomfort, inconvenience or annoyance to any of the other tenants or occupants of the Building, whether through the transmission of noise or odors or otherwise.

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Without limiting the generality of the foregoing, no food shall be prepared or served for consumption by the general public on or about the Demised Premises; no intoxicating liquors or alcoholic beverages shall be sold or otherwise permitted on or about the Demised Premises; no lottery tickets (even where the sale of such tickets is not illegal) shall be sold and no gambling, betting or wagering shall otherwise be permitted on or about the Demised Premises; no machinery shall be operated in the Demised Premises if such operation involves vibratory motion of any kind; no loitering shall be permitted on or about the Demised Premises; and no loading or unloading of supplies or other material to or from the Demised Premises shall be permitted on the Land except at times and in locations to be designated by Landlord. The Demised Premises shall be maintained in a sanitary condition, and kept free of rodents and vermin. All trash and rubbish shall be suitably stored in the Demised Premises or other locations designated by Landlord from time to time.

5.3Licenses and Permits. If any governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business, and if the failure to secure such license or permit would in any way affect Landlord, Tenant, at Tenant’s expense, shall (subject to Landlord’s obligations set forth in Article 4) duly procure and thereafter maintain such license or permit and submit the same to inspection by Landlord. Tenant, at Tenant’s expense, shall at all times comply with the terms and conditions of each such license or permit.

6.RENT

6.1Yearly Fixed Rent. Tenant shall pay to Landlord, without any set-off or deduction, at Landlord’s office, or to such other person or at such other place as Landlord may designate by notice to Tenant, the Yearly Fixed Rent set forth in Article 1, provided however that, if Tenant duly exercises its option pursuant to Section 3.3 to extend the Term hereof, the Yearly Fixed Rent shall be increased effective as of the commencement of such extension period to reflect the fair market rental value of the Demised Premises for the balance of the Term of this Lease, taking into account Tenant’s obligations to pay Additional Rent and all other provisions of this Lease. If Tenant so requests in writing, Landlord shall, within ten (10) days following receipt of such request (but no sooner than fifteen (15) months prior to the originally-scheduled Termination Date) notify Tenant of Landlord’s opinion as to said fair market rental value. If no such request has been received by Landlord, Landlord shall render such opinion following Tenant’s exercise of its option to extend the Term of the Lease as aforesaid, and if Landlord and Tenant have not in any event mutually agreed upon the same as of the thirtieth (30th) day following Landlord’s receipt of Tenant’s notice of such exercise, then in such event said fair market rental value shall be determined by appraisers, one to be chosen by Landlord, one to be chosen by Tenant, and a third to be selected by the two first chosen. All appraisers chosen or selected hereunder shall be independent of the parties, shall have received the M.A.I. (Member, Appraisal Institute) designation from the American Institute of Real Estate Appraisers and shall have had at least ten (10) years of experience in appraising office space in the downtown or Fort Point Channel sections of the City of Boston. The unanimous written decision of the first two chosen, without selection and participation of a third appraiser, or otherwise the written decision of a majority of three appraisers chosen and selected as aforesaid, shall be conclusive and binding upon Landlord and Tenant. Landlord and Tenant shall each notify the other of its chosen appraiser within ten (10) days following expiration of the aforesaid thirty (30) day period and, unless such two appraisers shall have reached a unanimous decision within thirty (30) days

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after having been chosen, they shall within a further ten (10) days elect a third appraiser and notify Landlord and Tenant thereof. Each party shall bear the expense of the appraiser chosen by such party pursuant to this Section, and the parties shall equally share the expense of the third appraiser (if any). If the Yearly Fixed Rent for such extension period shall not have been “ determined prior to the commencement thereof, Tenant shall continue to pay Yearly Fixed Rent at the rate most recently in effect, subject to retroactive adjustment once the Yearly Fixed Rent for such period has in fact been determined. In no event shall the foregoing provisions be construed so as to result in any reduction in the Rent payable by Tenant or in any increase in Yearly Fixed Rent so as to exceed the value set forth in the opinion rendered by Landlord as aforesaid. Yearly Fixed Rent shall be paid in equal monthly installments in advance on or before the first Business Day of each calendar month during the Term of this Lease and shall be apportioned for any fraction of a month in which Yearly Fixed Rent first becomes payable or in which the last day of the Term of this Lease may fall.

6.2Taxes. Tenant shall pay to Landlord as Additional Rent a proportionate share (as defined in Section 6.4) of all real estate taxes (including without limitation all betterment assessments, all fire service availability fees and similar charges for customary governmental services, all other charges in lieu of such taxes and any tax on any fixture installed in the Building, even if taxed as personal property) imposed against the Building and the Land, in excess of $222,732.50, pro-rated with respect to any portion of a fiscal year in which the Term of this Lease begins or ends. Such payments shall be due and payable in installments corresponding to those in which such taxes are payable by Landlord, and within fifteen (15) days after Tenant shall have received a copy of the relevant tax bills. If Landlord shall receive any refund of real estate taxes of which Tenant has paid a portion pursuant to this Section, then, out of any balance remaining after deducting Landlord’s expenses incurred in obtaining such refund, Landlord shall pay to Tenant the same proportionate share of said balance, prorated as set forth above. Tenant shall, if as and when demanded by Landlord and with each monthly installment of Yearly Fixed Rent, make tax fund payments to Landlord. “Tax fund payments” refer to such payments as Landlord shall reasonably determine to be sufficient to provide in the aggregate a fund adequate to pay, when they become due and payable, all payments required from Tenant under this Section. In the event that said tax fund payments are so demanded, and if the aggregate of said tax fund payments is not adequate to pay Tenant’s share of such taxes, Tenant shall pay to Landlord the amount by which such aggregate is less than the amount of said share such payment to be due and payable at the time set forth above. Any surplus tax fund payments shall be accounted for to Tenant after payment by Landlord of the taxes on account of which they were made, and shall be credited by Landlord against future tax fund payments or refunded to Tenant at Tenant’s option.

6.3Operating Expenses. Tenant shall pay to Landlord as Additional Rent a proportionate share (as defined in Section 6.4) of all annual costs and expenses incurred by Landlord in the operation and maintenance of the Building and the Land in excess of $445,465, including, without limiting the generality of the foregoing, all such costs and expenses in connection with (1) insurance, sprinkler service, license fees, security, trash and rubbish removal, janitorial service, landscaping, and snow removal, (2) wages, salaries, management fees (not exceeding 5% of rents and other Building revenue), employee benefits, payroll taxes, administrative and auditing expenses, and equipment and materials for the operation, management and maintenance of the Property, (3) any capital expenditure (amortized, with

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interest, on such reasonable basis as Landlord shall determine) made by Landlord for the purpose of achieving a reasonably-corresponding reduction of other operating expenses or complying with any governmental requirement imposed after the date of this Lease, (4) the furnishing of heat, air conditioning, water and other utilities, (5) the operation and servicing of any computer system installed to regulate Building equipment, (6) the furnishing of the repairs and services referred to in Section 7.4 and (7) unless such costs and expenses for a particular year include management fees, a supervisory and overhead fee which shall be in an amount equal to ten percent (10%) of all other such costs and expenses (the foregoing being hereinafter referred to as “operating expenses”). If, during any portion of a fiscal year for which operating expenses are being computed pursuant to this Section, less than the entire rentable area of the Building is occupied or Landlord is not supplying all occupants with the same services being supplied hereunder, such costs and expenses shall be reasonably extrapolated in order to take into account the costs and expenses which would have been incurred had the entire rentable area of the Building been occupied and had such services been supplied to all occupants. As soon as Tenant’s share of operating expenses with respect to any fiscal year established from time to time by Landlord can be determined, the same will be certified by Landlord to Tenant and will become payable to Landlord within thirty (30) days following such certification, subject to proration with respect to any portion of a fiscal year in which the Term of this Lease begins or ends or in the event that Landlord designates a different fiscal year. Tenant shall, if as and when demanded by Landlord and with each monthly installment of Yearly Fixed Rent, make operating fund payments to Landlord. “Operating fund payments” refer to such payments as Landlord shall reasonably determine to be sufficient to provide in the aggregate a fund adequate to pay, when they become due and payable, all payments required from Tenant under this Section. In the event that operating fund payments are so demanded, and if the aggregate of said operating fund payments is not adequate to pay Tenant’s share of operating expenses, Tenant shall pay to Landlord the amount by which such aggregate is less than the amount of said share, such payment to be due and payable at the time set forth above. Any surplus operating fund payments shall be accounted for to Tenant after such surplus has been determined, and shall be credited by Landlord against future operating fund payments or refunded to Tenant at Tenant’s option.

6.4Tenant’s Proportionate Share. Tenant’s proportionate share of taxes and operating expenses pursuant to Sections 6.2 and 6.3 shall be computed according to the ratio (initially 42.14%, but subject to adjustment as of the last day of the relevant fiscal year in the event of any reconfiguration of the Demised Premises or structural expansion of the Building) between the Rentable Area of the Demised Premises (as defined in Article 1) and the total rentable area of all space in the Building. Computations of rentable area other than in the Demised Premises shall be made by Landlord’s Architect, whose good faith determination shall be conclusive and binding on Tenant.

6.5Payment to Mortgagee. Landlord reserves the right to provide in any Mortgage given by it of the Property that some or all rents, issues, and profits and all other amounts of every kind payable to the Landlord under this Lease shall be paid directly to the Mortgagee for Landlord’s account and Tenant covenants and agrees that it will, after receipt by it of notice from Landlord designating such Mortgagee to whom payments are to be made by Tenant, pay such amounts thereafter becoming due directly to such Mortgagee until excused therefrom by notice from such Mortgagee.

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7.UTILITIES AND LANDLORD’S SERVICES

7.1Electricity. Tenant shall purchase the electrical energy that Tenant requires for operation of the lighting fixtures, appliances and equipment (including without limitation all air conditioning equipment) servicing the Demised Premises. The costs of initially installing any required meter shall be paid by Landlord, but Tenant shall keep said meter and installation equipment in good working order and repair. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electrical energy furnished to the Demised Premises by reason of any requirement, act or omission of the public utility serving the Building with electricity unless due to the act or omission of Landlord. Tenant’s use of electrical energy in the Demised Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Demised Premises. In order to insure that such capacity is not exceeded and to avert possible adverse effect upon the Building electrical services Tenant shall give notice to Landlord and obtain Landlord’s prior written consent whenever Tenant shall connect to the Building electrical distribution system any fixtures, appliances or equipment other than lamps, typewriters and similar small machines. Any additional feeders or risers to supply Tenant’s electrical requirements in addition to those originally installed and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by Tenant at the sole cost and expense of Tenant, provided that such additional feeders and risers are permissible under applicable laws and insurance regulations and the installation of such feeders or risers has been approved in writing by Landlord in advance thereof and will not cause permanent damage or injury to the Building or cause or create a dangerous condition or unreasonably interfere with other tenants of the Building. Tenant agrees that it will not make any alteration or material addition to the electrical equipment and/or appliances in the Demised Premises without the prior written consent of Landlord in each instance first obtained, which consent will not be unreasonably withheld, and will promptly advise Landlord of any alteration or addition to such electrical equipment and/or appliances. Landlord, at Tenant’s expense, shall install and replace all light fixtures, bulbs, tubes, lamps, lenses, globes, ballasts and switches used in the Demised Premises.

7.2Water Charges. Landlord shall furnish hot and cold water for ordinary cleaning, toilet, lavatory and drinking purposes to the extent required to service facilities installed in the Demised Premises pursuant to the provisions of this Lease. If Tenant requires, uses or consumes water for any purpose other than for such purposes, Landlord may (i) assess a reasonable charge for the additional water so used or consumed by Tenant or (ii) install a water meter and thereby measure Tenant’s water consumption for all purposes. In the latter event, Tenant shall pay the cost of the meter and the cost of installing any equipment required in connection therewith, and shall keep said meter and installation equipment in good working order and repair, and shall pay for water consumed, as shown on said meter, together with the sewer charge based on said meter charges, as and when bills are rendered.

7.3Heat and Air Conditioning.

(a)Landlord shall, through the equipment of the Building, furnish to and distribute in the Demised Premises heat as normal seasonal changes may require on Business Days from 8:00 a.m. to 6:00 p.m. when reasonably required for the comfortable occupancy of the Demised Premises by Tenant. Tenant agrees to lower and close the blinds or drapes when

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necessary because of the sun’s position whenever the air conditioning system is in operation, and to cooperate fully with Landlord with regard to and abide by all regulations and requirements which Landlord may prescribe for the proper functioning and protection of the heating and air conditioning system.

(b)Landlord’s only obligation under this Lease with respect to the air conditioning of the Demised Premises is to maintain the Building equipment servicing the Demised Premises and to furnish chilled water therefor. The distribution of air conditioning within the Demised Premises utilizes, as part of said equipment, handlers which are operated electrically at Tenant’s expense pursuant to Section 7.1.

(c)Landlord will endeavor, upon reasonable advance written notice from Tenant of its requirements, to furnish additional heat or air conditioning service to the Demised Premises on days and at times other than as provided in this Article. Tenant will pay to Landlord a reasonable charge (which shall be standard for all Building tenants) for any such additional heat or air conditioning service required by Tenant.

7.4Repairs and Other Services. Except as otherwise provided in Articles 16 and 18, and subject to Tenant’s obligations in Article 12 and elsewhere in this Lease, Landlord shall (a) keep and maintain the roof, exterior walls, structural floor slabs and columns of the Building in as good condition and repair as they are in on the Term Commencement Date, reasonable use and wear excepted, and maintain in workable condition the common sanitary, electrical, heating, air conditioning and other systems of the Building, (b) provide cleaning services on Business Days according to the cleaning standards set forth in Exhibit C attached hereto and made a part hereof, (c) keep all roadways, walkways and parking areas on the Property clean and remove all snow and ice therefrom, (d) replace windows whenever broken other than as a result of the act, omission, fault, negligence or misconduct of Tenant or Tenant’s agents, contractors, employees or invitees and (e) employ a guard to be stationed at the main entrance of the Building from 4:30 p.m. until Midnight on Business Days.

7.5Interruption or Curtailment of Services. Landlord reserves the right to interrupt, curtail, stop or suspend the furnishing of services and the operation of any Building system, when necessary by reason of accident or emergency, or of repairs, alterations, replacements or improvements in the reasonable judgment of Landlord desirable or necessary to be made, or of difficulty or inability in securing supplies or labor, or of strikes, or of any other cause beyond the reasonable control of Landlord, whether such other cause be similar or dissimilar to those hereinabove specifically mentioned, until said cause has been removed. Landlord shall have no responsibility or liability for any such interruption, curtailment, stoppage, or suspension of services or systems, except that Landlord shall exercise reasonable diligence to eliminate the cause of same.

8.CHANGES OR ALTERATIONS BY LANDLORD

Landlord reserves the right, exercisable by itself or its nominee, at any time and from time to time without the same constituting an actual or constructive eviction and without incurring any liability to Tenant therefor or otherwise affecting Tenant’s obligations under this Lease, to make such changes, alterations, additions, improvements, repairs or replacements in or

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to the Building (including the Demised Premises) and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, elevators, and stairways thereof, as it may deem necessary or desirable, and to change the arrangement and/or location of entrances or passageways, doors and doorways, and corridors, elevators, stairs, toilets, or other public parts of the Building, provided, however, that there be no unreasonable obstruction of the right of access to, or unreasonable interference with the use and enjoyment of, the Demised Premises by Tenant, except that Landlord shall not be obligated to employ labor at so-called “over-time” or other premium pay rates. Nothing contained in this Article shall be deemed to relieve Tenant of any duty, obligation or liability of Tenant with respect to making or causing to be made any repair, replacement or improvement or complying with any law, order or requirement of any governmental or other authority. Landlord reserves the right to from time to time change the address of the Building.

9.FIXTURES, EQUIPMENT AND IMPROVEMENTS - REMOVAL BY TENANT

All fixtures, equipment, improvements and appurtenances attached to or built into the Demised Premises prior to or during the Term, whether by Landlord at its expense or at the expense of Tenant (either or both) or by Tenant shall be and remain part of the Demised Premises and shall not be removed by Tenant at the end of the Term unless otherwise expressly provided in this Lease. If furnished and installed by and at the sole expense of Tenant, all removable electric fixtures, air conditioning, carpets, drinking or tap water facilities, furniture, trade fixtures or business equipment shall not be deemed to be included in such fixtures, equipment, improvements and appurtenances and may be, and upon the request of Landlord will be, removed by Tenant upon the condition that such removal shall not materially damage the Demised Premises or the Building and that the cost of repairing any damage to the Demised Premises or the Building arising from such removal shall be paid by Tenant, provided, however, that any of such items toward which Landlord shall have granted any allowance or credit to Tenant shall be deemed not to have been furnished and installed in the Demised Premises by or at the sole expense of Tenant.

10.ALTERATIONS AND IMPROVEMENTS BY TENANT

Tenant shall make no alterations, decorations, installations, removals, additions or improvements in or to the Demised Premises without Landlord’s prior written consent and then only by contractors or mechanics approved by Landlord. No installations or other such work shall be undertaken or begun by Tenant until Landlord has approved written plans and specifications therefor; and no amendments or additions to such plans and specifications shall be made without prior written consent of Landlord. Any such alterations, decorations, installations, removals, additions and improvements shall be done at the sole expense of Tenant and at such times and in such manner as Landlord may from time to time designate. Any consent or approval required under this Article shall not be unreasonably withheld or delayed in the case of any proposed work of a non-structural nature which does not affect the common areas or facilities of the Property. If Tenant shall make any alterations, decorations, installations, removals, additions or improvements, then Landlord may elect, at the time of consenting thereto, to require Tenant at the expiration of this Lease to restore the Demised Premises to substantially’ the same condition as existed at the Term Commencement Date.

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11.TENANT’S CONTRACTORS – MECHANICS’ AND OTHER LIENS – STANDARD OF TENANT’S PERFORMANCE - COMPLIANCE WITH LAWS

Whenever Tenant shall make any alterations, decorations, installations, removals, additions or improvements or do any other work in or to the Demised Premises, Tenant will strictly observe the following covenants and agreements:

(a)In no event shall any material or equipment be incorporated in or added to the Demised Premises in connection with any such alteration, decoration, installation, addition or improvement which is subject to any lien, charge, mortgage or other encumbrance of any kind whatsoever or is subject to any security interest or any form of title retention agreement. Any mechanic’s lien filed against the Demised Premises or the Building for work claimed to have been done for, or materials claimed to have been furnished to Tenant shall be discharged by Tenant within ten (10) days thereafter, at the expense of Tenant, by filing the bond required by law or otherwise. If Tenant fails so to discharge any lien, Landlord may do so at Tenant’s expense and Tenant shall reimburse Landlord for any expense or cost incurred by Landlord in so doing within fifteen (15) days after rendition of a bill therefor.

(b)All installations or work done by Tenant under this or any other Article of this Lease shall be at its own expense (unless expressly otherwise provided) and shall at all times comply with (i) laws, rules, orders and regulations of governmental authorities having jurisdiction thereof; (ii) orders, rules and regulations of any Board of Fire Underwriters, or any other body hereafter constituted exercising similar functions, and governing insurance rating bureaus; and (iii) plans and specifications prepared by and at the expense of Tenant theretofore submitted to Landlord for its prior written approval.

(c)Tenant shall procure all necessary permits before undertaking any work in the Demised Premises; do all such work in a good and workmanlike manner, employing materials of good quality and complying with all governmental requirements, and defend, save harmless, exonerate and indemnify Landlord from all injury, loss or damage to any person or property occasioned by or growing out of such work.

12.REPAIRS AND SECURITY BY TENANT

Tenant shall keep or cause to be kept all and singular the Demised Premises in good repair, order and condition, damage by fire or by unavoidable casualty excepted. Without limiting the generality of the foregoing, Tenant shall replace all windows and other glass, whenever broken as a result of the act, omission, fault, negligence or misconduct of Tenant or Tenant’s agents, contractors, employees or invitees, with glass of the same quality.

Tenant shall make, as and when needed as a result of misuse by, or neglect or improper conduct (including without limitation the placement of any equipment exceeding the floor load or causing vibrations) of Tenant or Tenant’s servants, employees, agents, invitees or licensees or otherwise, all repairs in and about the Demised Premises necessary to preserve them in such repair, order and condition.

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13.INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION

13.1Insurance. Tenant shall procure, keep in force and pay for (a) Commercial General Liability Insurance indemnifying Landlord, any managing agent designated by Landlord, Tenant and (whenever Landlord shall so request) any Mortgagee against all claims and demands for injury to or death of persons or damage to property which may be claimed to have occurred upon the Demised Premises in the amounts which shall at the time Tenant and/or its contractors enter the Demised Premises in accordance with Article 4 of this Lease be not less than One Hundred Thousand Dollars ($100,000) for property damage and Two Million Dollars ($2,000,000) for injury or death of one person or more than one person in a single accident, and from time to time thereafter shall be not less than such higher amounts, if procurable, as may be reasonably required by Landlord and are customarily carried by responsible office tenants in the Greater Boston area, (b) insurance covering any damage to the plate glass windows in or immediately about the Demised Premises, in reasonable amounts to be established from time to time by Landlord, and (c) so-called contents and improvements insurance adequately insuring all property belonging to or removable by Tenant and situated in the Demised Premises.

13.2Certificates of Insurance. Such insurance shall be effected with insurers authorized to do business in Massachusetts under valid and enforceable policies, and such policies shall name Landlord and Tenant and any additional parties designated by Landlord pursuant to Section 13.1 as the insureds, as their respective interests appear. Such insurance shall provide that it shall not be cancelled without at least ten (10) days’ prior written notice to each insured named therein. Prior to entry by Tenant and/or its contractors into the Demised Premises in accordance with Article 4 of this Lease, and thereafter not less than fifteen (15) days prior to the expiration date of each expiring policy, original copies of the policies provided for in Section 13.1 issued by the respective insurers, or certificates of such policies setting forth in full the provisions thereof and issued by such insurers together with evidence satisfactory to Landlord of the payment of all premiums for such policies, shall be delivered by Tenant to Landlord and certificates as aforesaid of such policies shall upon request of Landlord be delivered by Tenant to any additional parties designated by Landlord pursuant to Section 13.1 as the insureds.

13.3General. Tenant will save Landlord harmless, and will exonerate and indemnify Landlord, from and against any and all claims, liabilities or penalties asserted by or on behalf of any person, firm, corporation or public authority:

(a)On account of or based upon any injury to person, or loss of or damage to property sustained or occurring on the Demised Premises on account of or based upon the act, omission, fault, negligence or misconduct of any person whomsoever (other than Landlord or its agents, contractors or employees);

(b)On account of or based upon any injury to person or loss of or damage to property, sustained or occurring elsewhere (other than on the Demised Premises) in or about the Building (and, in particular, without limiting the generality of the foregoing on or about the elevators, stairways, public corridors, sidewalks or other appurtenances and facilities used in connection with the Building or Demised Premises) arising out of the use or occupancy of the Building or Demised Premises by Tenant, or any person claiming by, through or under Tenant;

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(c)On account of or based upon (including moneys due on account of) any work or thing whatsoever done (other than by Landlord or its contractors, or agents or employees of either) in the Demised Premises; and

(d)On account of or resulting from the failure of Tenant to perform and discharge any of its covenants and obligations under this Lease;

and, in respect of any of the foregoing items (a)-(d), from and against all costs, expenses (including without limitation reasonable attorneys’ fees), and liabilities incurred in or in connection with any such claim, or any action or proceeding brought thereon; and in case any action or proceeding be brought against Landlord by reason of any such claim, Tenant upon notice from Landlord shall at Tenant’s expense resist or defend such action or proceeding and employ counsel therefor reasonably satisfactory to Landlord, it being agreed that such counsel as may act for insurance underwriters of Tenant engaged in such defense shall be deemed satisfactory.

Landlord will save Tenant harmless, and will exonerate and indemnify Tenant from and against, any and all claims, liabilities, penalties, damages, losses, costs and expenses (including reasonable attorneys’ fees) asserted against or incurred by Tenant on account of or based upon the act, omission, fault, negligence or misconduct of Landlord or its agents, contractors or employees; and, in case any action or proceeding be brought against Tenant by reason of any of the foregoing, Landlord upon notice from Tenant shall at Landlord’s expense resist or defend such action or proceeding and employ counsel therefor reasonably satisfactory to Tenant, it being agreed that such counsel as may act for insurance underwriters of Landlord engaged in such defense shall be deemed satisfactory.

Each party, upon receiving notice of any claim against which the other party has agreed to provide indemnification pursuant to this Section or elsewhere in this Lease, shall promptly so notify the other party.

13.4Property of Tenant. In addition to and not in limitation of the foregoing, and subject only to the provisions of applicable law, Tenant covenants and agrees that all merchandise, furniture, fixtures and property of every kind, nature and description which may be in or upon the Demised Premises or the Building or the Land during the Term of this Lease shall be at the sole risk and hazard of Tenant, and that if the whole or any part thereof shall be damaged, destroyed, stolen or removed from any cause or reason whatsoever no part of said damage or loss shall be charged to, or borne by Landlord.

13.5Bursting of Pipes, etc. Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, electrical disturbance, water, rain or snow or leaks from any part of the Building or from the pipes, appliances or plumbing works or from the roof, street or sub-surface or from any other place or caused by any other cause of whatever nature, unless caused by or due to the negligence of Landlord, its agents, servants or employees, and then only after (i) notice to Landlord of the condition claimed to constitute negligence and (ii) the expiration of a reasonable time after such notice has been received by Landlord without such condition having been cured or corrected; nor shall Landlord or its agents be liable for any such damage caused by other tenants or persons in

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the Building or caused by operations in construction of any private, public or quasi-public work; nor shall Landlord be liable (subject only to its repair obligations hereunder) for any latent defect in the Demised Premises or in the Building.

14.ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.

Tenant covenants and agrees that neither this Lease nor the term and estate hereby granted nor any interest herein or therein, will be assigned, mortgaged, pledged, encumbered or otherwise transferred (whether voluntarily or by operation of law), and that neither the Demised Premises, nor any part thereof, will be encumbered in any manner by reason of any act or omission on the part of Tenant, or used or occupied, or permitted to be used or occupied, or utilized for any reason whatsoever, by anyone other than Tenant, or for any use or purpose other than as stated in Article 1, or be sublet, or offered or advertised for subletting, without the prior written consent of Landlord in every case. Such consent shall not, in the case of a proposed subletting, be unreasonably withheld or delayed.

In connection with any request by Tenant for such consent, Tenant shall submit to Landlord, in writing, a statement containing all of the terms and provisions upon which the proposed transaction is to occur. If the rent received by Tenant on account of a proposed assignment or sublease exceeds the Yearly Fixed Rent and Additional Rent, allocated to the space subject to the assignment or sublease in the proportion of the area of such space to the area of the entire Demised Premises, plus actual out-of-pocket expenses incurred by Tenant in connection therewith, including brokerage commissions and the cost of preparing such space for occupancy, Tenant shall pay to Landlord fifty (50) percent of such excess, as received by Tenant.  Notwithstanding the foregoing provisions of this paragraph, (1) in the event Tenant proposes to assign this Lease or enter into a sublease such that all or substantially all of the Demised Premises will have been sublet, Landlord, at Landlord’s option, may give to Tenant, within thirty (30) days after the submission by Tenant to Landlord of such proposal, a notice terminating this Lease on the date (referred to as the “Earlier Termination Date”) immediately prior to the effective date of the proposed assignment or the proposed commencement date of the term of the proposed subletting, as set forth in such proposal, and, in the event such notice is given, this Lease and the Term shall come to an end and expire on the Earlier Termination Date with the same effect as if it were the date originally fixed in this Lease for the end of the Term of this Lease, and the Rent shall be apportioned as of said Earlier Termination Date and any prepaid portion of Rent for any period after such date shall be refunded by Landlord to Tenant, or (2) in the event Tenant proposes to sublet any portion of the Demised Premises such that more than 40% of the floor area of the Demised Premises will have been sublet, Landlord, at Landlord’s option, may give to Tenant, within thirty (30) days after the submission by Tenant to Landlord of the statement required to be submitted in connection with such proposed subletting, a notice electing to eliminate such portion of the Demised Premises (said portion is referred to as the “Eliminated Space”) from the Demised Premises during the period (referred to as the “Elimination Period”) commencing on the date (referred to as the “Elimination Date”) immediately prior to the proposed commencement date of the term of the proposed subletting, as set forth in such statement, and ending on the proposed expiration date of the term of the proposed subletting, as set forth in such statement, and in the event such notice is given (i) the Eliminated Space shall be eliminated from the Demised Premises during the Elimination Period; (ii) Tenant shall surrender the Eliminated Space to Landlord on or prior to the Elimination Date

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in the same manner as if said Date were the date originally fixed in this Lease for the end of the Term of this Lease; (iii) if the Eliminated Space shall constitute less than an entire floor, Landlord, at Landlord’s expense, shall have the right to make any alterations and installations in the Demised Premises required, in Landlord’s judgment, reasonably exercised, to make the Eliminated Space a self-contained rental unit with access through corridors to the elevators and core toilets serving the Eliminated Space, and if the Demised Premises shall contain any core toilets or any corridors (including any corridors proposed to be constructed by Landlord pursuant to this subdivision (iii) providing access from the Eliminated Space to the core area), Landlord and any tenant or other occupant of the Eliminated Space shall have the right to use such toilets and corridors in common with Tenant and any other permitted occupants of the Demised Premises, and the right to install signs and directional indicators in or about such corridors indicating the name and location of such tenant or other occupant; (iv) during the Elimination Period, the Yearly Fixed Rent shall be reduced in the proportion which the area of the Eliminated Space bears to the total area of the Demised Premises immediately prior to the Elimination Date (including an equitable portion of the area of any corridors referred to in subdivision (iii) of this sentence as part of the area of the Eliminated Space for the purpose of computing such reduction), and any prepaid Rent for any period after the Elimination Date allocable to the Eliminated Space shall be refunded by Landlord to Tenant; (v) there shall be an equitable apportionment of any Additional Rent payable pursuant to Article 6 for the relevant fiscal and calendar years in which said Elimination Date shall occur; and (vi) if the Elimination Period shall end prior to the date originally fixed in this Lease for the end of the Term of this Lease, the Eliminated Space, in its then existing condition, shall be deemed restored to and once again a part of the Demised Premises subject to the provisions of this Lease as if said elimination had not occurred during the period (referred to as the “Restoration Period”) commencing on the date next following the expiration of the Elimination Period and ending on the date originally fixed in this Lease for the end of the Term of this Lease, except in the event that Landlord is unable to give Tenant possession of the Eliminated Space at the expiration of the Elimination Period by reason of the holding over or retention of possession of any tenant or other occupant, in which event (x) the Restoration Period shall not commence, and the Eliminated Space shall not be deemed restored to or a part of the Demised Premises, until the date upon which Landlord shall give Tenant possession of such Space free of occupancies, (y) neither the date fixed in this Lease for the end of the Term of the Lease, nor the validity of this Lease shall be affected, and (z) Tenant waives any right to recover any damages which may result from the failure of Landlord (despite the exercise of diligent efforts) to deliver possession of the Eliminated Space at the end of the Elimination Period. At the request of Landlord, Tenant shall execute and deliver an instrument or instruments, in form satisfactory to Landlord, setting forth any modifications to this Lease contemplated in or resulting from the operation of the foregoing provisions of this paragraph; however, neither Landlord’s failure to request any such instrument nor Tenant’s failure to execute or deliver any such instrument shall vitiate the effect of the foregoing provisions of this paragraph.

The failure by Landlord to exercise its option under this Article with respect to any assignment or subletting shall not be deemed a waiver of such option with respect to any extension of such sublease or any subsequent assignment or subletting. Tenant shall reimburse Landlord promptly, as Additional Rent, for reasonable legal and other expense incurred by

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Landlord in connection with any request by Tenant for any consent required under the provisions of this Article.

Notwithstanding the foregoing, Tenant may, following notice to Landlord but without the requirement of obtaining Landlord’s consent or affording Landlord an opportunity to terminate this Lease or eliminate any portion of the Demised Premises therefrom or share any excess rent, all as hereinabove set forth, and so long as Tenant is not in default hereunder beyond the applicable grace period, assign this Lease or sublease all or any portion of the Demised Premises to any entity which is controlled by, or which controls, or which is under common control with, Tenant, or assign this Lease to any entity with which Tenant may merge or consolidate or to which Tenant may sell all or substantially all of its assets as a going concern or to which a controlling interest in the corporation or other entity constituting Tenant may be transferred (such entity with which Tenant may merge or consolidate or to which Tenant may sell all or substantially all of its assets or to which a controlling interest in the corporation or other entity constituting Tenant may be transferred as aforesaid being hereinafter referred to as a “Successor”), provided however that, forthwith upon any assignment allowed pursuant to this paragraph, Tenant shall deliver to Landlord an agreement in form and substance reasonably satisfactory to Landlord which contains an appropriate covenant of assumption by such assignee, and provided further that in the case of any such assignment to a Successor, such Successor shall have financial resources and a general business reputation comparable to those of Tenant as of the time of such assignment.

The listing of any name other than that of Tenant, whether on the doors of the Demised Premises or on the Building directory, or otherwise, shall not operate to vest any right or interest in this Lease or in the Demised Premises or be deemed to be the written consent of Landlord mentioned in this Article, it being expressly understood that any such listing is a privilege extended by Landlord revocable at will by written notice to Tenant.

If this Lease be assigned, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may at any time and from time to time, collect rent and other charges from the assignee, subtenant or occupant, and apply the net amount collected to the Rent and other charges herein reserved, but no such collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as a tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. The consent by Landlord to an assignment or subletting or occupancy shall not in any way be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment or subletting or occupancy.

15.MISCELLANEOUS COVENANTS

15.1Rules and Regulations. Tenant and Tenant’s servants, employees, agents, visitors and licensees will faithfully observe such Rules and Regulations as are attached hereto as Exhibit D and made a part hereof or as Landlord hereafter at any time or from time to time may make and may communicate in writing to Tenant and which in the reasonable judgment of Landlord shall be necessary for the reputation, safety, care or appearance of the Property, or the preservation of good order therein, or the operation or maintenance of the Property, or the equipment thereof, or the comfort of tenants or others in the Building, provided however that in

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the case of any conflict between the provisions of this Lease and any such Rules and Regulations, the provisions of this Lease shall control. Such Rules and Regulations shall be applied in a non-discriminatory manner so as to be generally applicable to other tenants of the Building whose permitted business activities are comparable to those of Tenant hereunder, provided however that nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce such Rules and Regulations or the terms, covenants or conditions in any other lease as against any other tenant and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors, invitees or licensees.

15.2Access to Premises - Shoring. Tenant shall: (i) permit Landlord to erect, use and maintain pipes, ducts and conduits in and through the Demised Premises, provided the same do not materially reduce the floor area or materially adversely affect the appearance thereof; (ii) permit Landlord and any Mortgagee to have free and unrestricted access to and to enter upon the Demised Premises at all reasonable hours for the purposes of inspection or of making repairs, replacements or improvements in or to the Demised Premises or the Building or equipment (including, without limitation, sanitary, electrical, heating, air conditioning or other systems) or of complying with all laws, orders and requirements of governmental or other authority or of exercising any right reserved to Landlord by this Lease (including the right during the progress of any such repairs, replacements or improvements or while performing work and furnishing materials in connection with compliance with any such laws, orders or requirements to take upon or through, or to keep and store within, the Demised Premises all necessary materials, tools and equipment); and (iii) permit Landlord, at reasonable times, to show the Demised Premises during ordinary business hours to any Mortgagee, prospective purchaser of any interest of Landlord in the Property, prospective Mortgagee, or prospective assignee of any Mortgage, and during the period of twelve months next preceding the Termination Date to any person contemplating the leasing of the Demised Premises or any part thereof. If during the last month of the Term, Tenant shall have removed all of Tenant’s property therefrom, Landlord may immediately enter and alter, renovate and redecorate the Demised Premises, without elimination or abatement of Rent, or incurring liability to Tenant for any compensation, and such acts shall have no effect upon this Lease. If Tenant shall not be personally present to open and permit any entry into the Demised Premises at any time when for any reason an entry therein shall be necessary or permissible, Landlord or Landlord’s agents must nevertheless be able to gain such entry by contacting a responsible representative of Tenant, whose name, address and telephone number shall be furnished by Tenant, or (at Landlord’s election) by using keys to the Demised Premises in Landlord’s possession. Locks serving the Demised Premises shall not be altered or replaced, nor shall new locks be added by Tenant without the prior written consent of Landlord in every case. Provided that Landlord shall incur no additional expense thereby, Landlord shall exercise its rights of access to the Demised Premises permitted under any of the terms and provisions of this Lease in such manner as to minimize to the extent practicable interference with Tenant’s use and occupation of the Demised Premises. If an excavation shall be made upon land adjacent to the Demised Premises or shall be authorized to be made, Tenant shall afford, to the person causing or authorized to cause such excavation, license to enter upon the Demised Premises for the purpose of doing such work as said person shall deem necessary to preserve the Building from injury or damage and to support the same by proper foundations without any claim for damage or indemnity against Landlord, or diminution or abatement of Rent.

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15.3Accidents to Sanitary and other Systems. Tenant shall give to Landlord prompt notice of any fire or accident in the Demised Premises or in the Building and of any damage to, or defective condition in, any part or appurtenance of the Building’s systems located in, or passing through, the Demised Premises.

15.4Signs, Blinds and Drapes. Tenant shall not place any signs on the exterior of the Building or on or in any window, public corridor or door visible from the exterior of the Demised Premises without the prior written consent of Landlord in every case. Landlord shall include Tenant’s name in any standard Building directory maintained by Landlord. No blinds may be put on or in any window nor may any Building drapes or blinds be removed by Tenant. Tenant may hang its own drapes, provided that they shall not, without the prior written approval of Landlord, in any way interfere with any Building drapery or blinds or be visible from the exterior of the Building.

15.5Estoppel Certificate. Tenant shall at any time and from time to time upon not less than ten (10) days’ prior notice by Landlord to Tenant, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), and the dates to which Rent has been paid in advance, if any, and stating whether or not to the best knowledge of the signer of such certificate Landlord is in default in performance of any covenant, agreement, term, provision or condition contained in this Lease and, if so, specifying each such default of which the signer may have knowledge, it being intended that any such statement delivered pursuant hereto may be relied upon by any prospective purchaser of any interest of Landlord in the Property, any Mortgagee or prospective Mortgagee, any lessee or prospective lessee thereof, any prospective assignee of any Mortgage, or any other party designated by Landlord.

15.6Prohibited Items. Tenant shall not bring or permit to be brought or kept in or on the Demised Premises or elsewhere in the Building any hazardous, inflammable, combustible or explosive fluid, material, chemical or substance (except such as are related to Tenant’s use of the Demised Premises, provided that the same are stored and handled in a proper fashion consistent with applicable legal standards).

15.7Requirements of Law - Fines and Penalties. Tenant at its sole expense shall comply with all laws, rules, orders and regulations of Federal, State, County and Municipal authorities and with any direction of any public officer or officers, pursuant to law, which shall impose any duty upon Landlord or Tenant with respect to and arising out of Tenant’s use or occupancy of the Demised Premises, provided however that Landlord shall be responsible for compliance therewith to the extent necessary to allow the continued use of the Demised Premises for general office purposes. In particular, Tenant shall be responsible for compliance with requirements imposed by the Americans with Disabilities Act relative to the layout of the Demised Premises or any work performed by Tenant therein, including without limitation all such requirements applicable to removing barriers, furnishing auxiliary aids and insuring that, whenever alterations are made, the affected portions of the Demised Premises are readily accessible to and usable by individuals with disabilities. Landlord shall be responsible for compliance with requirements imposed by said Act relative to the common areas of the Property and the work to be performed by Landlord pursuant to Article 4. If Tenant receives notice of any

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violation of law, ordinance, order or regulation applicable to the Demised Premises, it shall give prompt notice thereof to Landlord.

15.8Tenant’s Acts - Effect on Insurance. Tenant shall not do or permit to be done any act or thing upon the Demised Premises or elsewhere in the Building which will invalidate or be in conflict with any insurance policies covering the Building and the fixtures and property therein and shall not do, or permit to be done, any act or thing upon the Demised Premises which shall subject Landlord to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation being conducted on the Demised Premises or for any other reason. Tenant at its own expense shall comply with all rules, orders, regulations or requirements of the Board of Fire Underwriters or any other similar body having jurisdiction, and shall not (i) do, or permit anything to be done, in or upon the Demised Premises, or bring or keep anything therein, except as now or hereafter permitted by the Fire Department, Board of Underwriters, Fire Insurance Rating Organization, or other authority having jurisdiction, and then only in such quantity and manner of storage as will not increase the rate for any insurance applicable to the Building, or (ii) use the Demised Premises in a manner which shall increase such insurance rates on the Building or on property located therein, over that applicable when Tenant first took occupancy of the Demised Premises hereunder. If by reason of failure of Tenant to comply with the provisions hereof the insurance rate applicable to any policy of insurance shall at any time thereafter be higher than it otherwise would be, then Tenant shall reimburse Landlord for that part of any insurance premiums thereafter paid by Landlord, which shall have been charged because of such failure by Tenant.

15.9Miscellaneous. Tenant shall not suffer or permit the Demised Premises or any fixtures, equipment or utilities therein or serving the same, to be overloaded, damaged or defaced, nor permit any hole to be drilled or made in any part thereof. For purposes hereof, the capacity of the floors in the Demised Premises is agreed to be 250 pounds dead load per square foot.

16.DAMAGE BY FIRE, ETC.

Landlord shall keep in force casualty insurance with respect to the Building (including for purposes hereof all improvements of a permanent nature made thereto) in an amount no less than the full replacement cost thereof. Such insurance shall afford protection against fire and the other perils customarily covered by a so-called “all risk” policy.

In the event of loss of, or damage to, the Demised Premises or the Building by fire or other casualty, the rights and obligations of the parties hereto shall be as follows:

(a)If the Demised Premises, or any part thereof, shall be damaged by fire or other casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving such notice, shall proceed promptly and with due diligence, subject to unavoidable delays, to repair, or cause to be repaired, such damage. If the Demised Premises or any part thereof shall be rendered untenantable by reason of such damage, whether to the Demised Premises or to the Building, Yearly Fixed Rent shall proportionately abate for the period from the date of such damage to the date when such damage shall have been repaired.

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(b)If, as a result of fire or other casualty, the whole or a substantial portion of the Building or the Demised Premises is rendered untenantable, Landlord, within ninety (90) days from the date of such fire or casualty, may terminate this Lease by notice to Tenant, specifying a date not less than twenty (20) nor more than forty (40) days after the giving of such notice on which the Term of this Lease shall terminate. If Landlord does not so elect to terminate this Lease, then Landlord shall proceed with diligence to repair the damage to the Demised Premises and all facilities serving the same, if any, which shall have occurred, and the Yearly Fixed Rent shall meanwhile proportionately abate, all as provided in Paragraph (a) of this Section. However, if such damage is not repaired and the Demised Premises restored to substantially the same condition as they were prior to such damage within six (6) months from the date of such damage, Tenant within fifteen (15) days from the expiration of such six (6) month period or from the expiration of any extension thereof by reason of unavoidable delays as hereinafter provided, may terminate this Lease by notice to Landlord, specifying a date not more than sixty (60) days after the giving of such notice on which the Term of this Lease shall terminate. The period within which the required repairs may be accomplished shall be extended by the number of days, not to exceed ninety (90) days, lost as a result of unavoidable delays, which term shall be defined to include all delays referred to in Article 24.

(c)If the Demised Premises shall be rendered untenantable by fire or other casualty during the last year of the Term of this Lease, either party may terminate this Lease effective as of the date of such fire or other casualty upon notice to the other given within thirty (30) days after such fire or other casualty.

(d)Landlord shall not be required to repair or replace any of Tenant’s business machinery, equipment, cabinet work, furniture, personal property or other installations (all of which shall, however, be restored by Tenant as soon as practicable after Landlord shall have completed any repair or restoration required under the terms of this Article), and no damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the Demised Premises or of the Building. Any insurance proceeds received by Tenant in connection with such loss or damage shall be applied by Tenant to such repair or restoration to the extent reasonably necessary to accomplish the same.

(e)The provisions of this Article shall be considered an express agreement governing any instance of damage or destruction of the Building or the Demised Premises by fire or other casualty, and any law now or hereafter in force providing for such a contingency in the absence of express agreement shall have no application.

(f)In the event of any termination of this Lease pursuant to this Article, the Term of this Lease shall expire as of the effective termination date as fully and completely as if such date were the date herein originally scheduled as the Termination Date.

(g)Landlord’s Architect’s certificate, given in good faith, shall be deemed conclusive of the statements therein contained and binding upon Tenant with respect to the performance and completion of any repair or restoration work undertaken by Landlord pursuant to this Article or Article 18.

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17.WAIVER OF SUBROGATION

In any case in which Tenant shall be obligated under any provision of this Lease to pay to Landlord any loss, cost, damage, liability, or expense suffered or incurred by Landlord, Landlord shall allow to Tenant as an offset against the amount thereof the net proceeds of any insurance collected by Landlord for or on account of such loss, cost, damage, liability or expense, provided that the allowance of such offset does not invalidate or prejudice the policy or policies under which such proceeds were payable.

In any case in which Landlord shall be obligated under any provision of this Lease to pay to Tenant any loss, cost, damage, liability or expense suffered or incurred by Tenant, Tenant shall allow to Landlord as an offset against the amount thereof (i) the net proceeds of any insurance collected by Tenant for or on account of such loss, cost, damage, liability, or expense, provided that the allowance of such offset does not invalidate the policy or policies under which such proceeds were payable and (ii) if such loss, cost, damage, liability or expense shall have been caused by a peril against which Tenant has agreed to procure insurance coverage under the terms of this Lease, the amount of such insurance coverage, whether or not actually procured by Tenant.

The parties hereto shall each endeavor to procure an appropriate clause in, or endorsement on, any fire or extended coverage insurance policy covering the Demised Premises and the Building and personal property, fixtures and equipment located thereon or therein, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery, and having obtained such clauses and/or endorsements of waiver of subrogation or consent to a waiver of right of recovery each party hereby agrees that it will not make any claim against or seek to recover from the other for any loss or damage to its property or the property of others resulting from fire or other perils covered by such fire and extended coverage insurance; provided, however, that the release, discharge, exoneration and covenant not to sue herein contained shall be limited by the terms and provisions of the waiver of subrogation clauses and/or endorsements or clauses and/or endorsements consenting to a waiver of right of recovery and shall be co-extensive therewith. If either party may obtain such clause or endorsement only upon payment of an additional premium, such party shall promptly so advise the other party and shall be under no obligation to obtain such clause or endorsement unless such other party pays the premium.

18.CONDEMNATION - EMINENT DOMAIN

In the event that the whole or any part of the Building shall be taken or appropriated by eminent domain or shall be condemned for any public or quasi-public use, or (by virtue of any such taking, appropriation or condemnation) shall suffer any damage (direct, indirect or consequential) for which Landlord or Tenant shall be entitled to compensation then (and in any such event) this Lease and the Term hereof may be terminated at the election of Landlord by a notice in writing of its election so to terminate which shall be given by Landlord to Tenant within sixty (60) days following the date on which Landlord shall have received notice of such taking, appropriation or condemnation. In the event that a substantial part of the Demised Premises or of the means of access thereto within the perimeter of the Property shall be so taken, appropriated or condemned, then (and in any such event) this Lease and the Term hereof may be

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terminated at the election of Tenant by a notice in writing of its election so to terminate which shall be given by Tenant to Landlord within sixty (60) days following the date on which Tenant shall have received notice of such taking, appropriation or condemnation.

Upon the giving of any such notice of termination (either by Landlord or Tenant) this Lease and the Term hereof shall terminate on or retroactively as of the date on which Tenant shall be required to vacate any part of the Demised Premises or shall be deprived of a substantial part of the means of access thereto, provided, however, that Landlord may in Landlord’s notice elect to terminate this Lease and the Term hereof retroactively as of the date on which such taking, appropriation or condemnation became legally effective. In the event of any such termination, this Lease and the Term hereof shall expire as of the effective termination date as fully and completely as if such date were the date herein originally scheduled as the Termination Date. If neither party (having the right so to do) elects to terminate this Lease, Landlord will, with reasonable diligence and at Landlord’s expense, restore the remainder of the Demised Premises, or the remainder of the means of access thereto, as nearly as practicably may be to the same condition as obtained prior to such taking, appropriation or condemnation in which event (i) a just proportion of the Yearly Fixed Rent, according to the nature and extent of the taking, appropriation or condemnation and the resulting permanent injury to the Demised Premises and the means of access thereto, shall be permanently abated, and (ii) a just proportion of the remainder of the Yearly Fixed Rent, according to the nature and extent of the taking, appropriation or condemnation and the resultant injury sustained by the Demised Premises and the means of access thereto, shall be abated until what remains of the Demised Premises and the means of access thereto shall have been restored as fully as may be for permanent use and occupation by Tenant hereunder. Except for any award specifically reimbursing Tenant for moving or relocation expenses, there are expressly reserved to Landlord all rights to compensation and damages created, accrued or accruing by reason of any such taking, appropriation or condemnation, in implementation and in confirmation of which Tenant does hereby acknowledge that Landlord shall be entitled to receive and retain all such compensation and damages, grants to Landlord all and whatever rights (if any) Tenant may have to such compensation and damages, and agrees to execute and deliver all and whatever further instruments of assignment as Landlord may from time to time request. In the event of any taking of the Demised Premises or any part thereof for temporary use, so long as the period thereof is not more than twelve (12) consecutive months and will not extend beyond the Termination Date, (i) this Lease shall be and remain unaffected thereby, and (ii) Tenant shall be entitled to receive for itself any award made for such use, provided, that if any taking is for a period extending beyond the Term of this Lease, such award shall be apportioned between Landlord and Tenant as of the Termination Date.

19.DEFAULT

19.1Conditions of Limitation - Re-entry - Termination. This Lease and the herein term and estate are upon the condition that if (a) Tenant shall neglect or fail to perform or observe any of the Tenant’s covenants herein, including (without limitation) the covenants with regard to the payment when due of Rent; or (b) Tenant shall be involved in financial difficulties as evidenced by an admission in writing by Tenant of Tenant’s inability to pay its debts generally as they become due, or by the making or offering to make a composition of its debts with its creditors; or (c) Tenant shall make an assignment or trust mortgage, or other conveyance or

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transfer of like nature, of all or a substantial part of its property for the benefit of its creditors; or (d) the leasehold hereby created shall be taken on execution or by other process of law and shall not be revested in Tenant within sixty (60) days thereafter; or (e) a receiver, sequester, trustee or similar officer shall be appointed by a court of competent jurisdiction to take charge of all or a substantial part of Tenant’s property and such appointment shall not be vacated within sixty (60) days; or (f) any proceeding shall be instituted by or against Tenant pursuant to any of the provisions of any Act of Congress or State law relating to bankruptcy, reorganization, arrangements, compositions or other relief from creditors, and, in the case of any such proceeding instituted against it, if Tenant shall fail to have such proceeding dismissed within sixty (60) days or if Tenant is adjudged bankrupt or insolvent as a result of any such proceeding; or (g) any event shall occur or any contingency shall arise whereby this Lease, or the term and estate thereby created, would (by operation of law or otherwise) devolve upon or pass to any person, firm or corporation other than Tenant, except as expressly permitted under Article 14 hereof - then, and in any such event (except as hereinafter in Article 19.2 otherwise provided) Landlord may, in a manner consistent with applicable law, immediately or at any time thereafter declare this Lease terminated by notice to Tenant or, without further demand or notice, enter into and upon the Demised Premises (or any part thereof in the name of the whole), and in either such case (and without prejudice to any remedies which might otherwise be available for arrears of Rent or preceding breach of covenant and without prejudice to Tenant’s liability for damages as hereinafter stated), this Lease shall terminate.  The words “re-entry” and “re-enter” as used in this Lease are not restricted to their technical legal meaning. As used in items (b), (c), (e) and (f) of this Section, the term “Tenant” shall also be deemed to refer to any guarantor of Tenant’s obligations hereunder.

19.2Damages - Assignment for Benefit of Creditors. For the more effectual securing by Landlord of the rent and other charges and payments reserved hereunder, it is agreed as a further condition of this Lease that if at any time Tenant shall make an assignment of its property for the benefit of its creditors under the terms of which the debts provable by its creditors shall be debts provable against the estate of insolvent debtors either under the laws of the Commonwealth of Massachusetts or under some law or laws other than the Bankruptcy Act as now or hereafter enacted, then and in any such case the same shall constitute a breach of this Lease, and the term and estate hereby created shall terminate ipso facto, without entry or other action by Landlord; and notwithstanding any other provisions of this Lease, Landlord shall forthwith upon such termination, without prejudice to any remedies which might otherwise be available for arrears of rent or other charges due hereunder or preceding breach of this Lease, be ipso facto entitled to recover as liquidated damages the sum of (a) the amount (reasonably discounted to present value) by which, at the time of such termination of this Lease, (i) the aggregate of the Rent projected over the period commencing with such termination and ending with the Termination Date stated in Article 1 exceeds (ii) the aggregate projected rental value of the Demised Premises for such period and (b) (in view of the uncertainty of prompt re-letting and the expense entailed in re-letting the Demised Premises) an amount equal to the Rent payable for and in respect of the calendar year next preceding the date of termination, as aforesaid. Upon such termination Landlord, may immediately or at any time thereafter, without demand or notice, enter into or upon the Demised Premises (or any part thereof in the name of the whole), and (without being taken or deemed to be guilty of any manner of trespass or conversion, and without being liable to indictment, prosecution or damages thereof) may, forcibly if necessary,

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expel Tenant and those claiming under Tenant from the Demised Premises and remove therefrom the effects of Tenant and those claiming under Tenant.

19.3Damages - Termination. Upon the termination of this Lease under the provisions of this Article, then except as hereinabove in Section 19.2 otherwise provided, Tenant shall pay to Landlord the Rent payable by Tenant to Landlord up to the time of such termination, shall continue to be liable for any preceding breach of covenant, and in addition, shall pay to Landlord as damages, at the election of Landlord

either:

(x)the amount by which, at the time of the termination of this Lease (or at any time thereafter if Landlord shall have initially elected damages under Subparagraph (y), below), (i) the aggregate of the Rent projected over the period commencing with such time and ending on the originally-scheduled Termination Date as stated in Article 1 exceeds (ii) the aggregate projected rental value of the Demised Premises for such period, reasonably discounted in each case to present value,

or,

(y)amounts equal to the Rent which would have been payable by Tenant had this Lease not been so terminated, payable upon the due dates therefor specified herein following such termination and until the originally-scheduled Termination Date as specified in Article 1, provided, however, if Landlord shall re-let the Demised Premises during such period, that Landlord shall credit Tenant with the net rents received by Landlord from such re-letting, such net rents to be determined by first deducting from the gross rents as and when received by Landlord from such re-letting the expenses incurred or paid by Landlord in terminating this Lease, as well as the expenses of re-letting, including altering and preparing the Demised Premises for new tenants, brokers’ commissions, and all other similar and dissimilar expenses properly chargeable against the Demised Premises and the rental therefrom, it being understood that any such re-letting may be for a period equal to or shorter or longer than the remaining term of this Lease; and provided, further, that (i) in no event shall Tenant be entitled to receive any excess of such net rents over the sums payable by Tenant to Landlord hereunder and (ii) in no event shall Tenant be entitled in any suit for the collection of damages pursuant to this Subparagraph (y) to a credit in respect of any net rents from a re-letting except to the extent that such net rents are actually received by Landlord prior to the commencement of such suit. If the Demised Premises or any part thereof should be re-let in combination with other space, then proper apportionment on a square foot area basis shall be made of the rent received from such re-letting and of the expenses of re-letting. Landlord shall endeavor in good faith to mitigate damages payable pursuant to the provisions of this subparagraph.

Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the term of this Lease would have expired if it had not been terminated hereunder.

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Nothing herein contained shall be construed as limiting or precluding the recovery by Landlord against Tenant of any sums or damages to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any default hereunder on the part of Tenant.

19.4Fees and Expenses.  If Tenant shall default in the performance of any covenant on Tenant’s part to be performed as in this Lease contained, Landlord may immediately, or at any time thereafter, subject (except in case of emergency) to expiration of the applicable grace period, perform the same for the account of Tenant. If Landlord at any time is compelled to pay or elects to pay any sum of money, or do any act which will require the payment of any sum of money, by reason of the failure of Tenant to comply with any provision hereof, or if Landlord is compelled to or does incur any expense, including without limitation reasonable attorneys’ fees, in instituting, prosecuting and/or defending any action or proceeding arising by reason of any default of Tenant hereunder, Tenant shall on demand pay to Landlord by way of reimbursement the sum or sums so paid by Landlord with all interest, costs and damages. Without limiting the generality of the foregoing, in the event that any Rent is more than ten (10) days in arrears, Tenant shall pay, as Additional Rent, a delinquency charge equal to two and one-half percent (2-1/2%) of the arrearage for each calendar month (or fraction thereof) during which it remains unpaid.

19.5Landlord’s Remedies Not Exclusive.  The specified remedies to which Landlord may resort hereunder are cumulative and are not intended to be exclusive of any remedies or means of redress to which Landlord may at any time be lawfully entitled, and Landlord may invoke any remedy (including without limitation the remedy of specific performance) allowed at law or in equity as if specific remedies were not herein provided for.

19.6Grace Period.  Notwithstanding anything to the contrary in this Article contained, Landlord agrees not to take any action to terminate this Lease (a) for default by Tenant in the payment when due of Rent, if Tenant shall cure such default within ten (10) days after written notice thereof given by Landlord to Tenant, or (b) for default by Tenant in the performance of any other covenant, if Tenant shall cure such default within a period of thirty (30) days after written notice thereof given by Landlord to Tenant, or with respect to covenants other than to pay a sum of money within such additional period as may reasonably be required to cure such default if (because of governmental restrictions or any other cause beyond the reasonable control of Tenant) the default is of such a nature that it cannot be cured within such thirty (30)-day period, provided, however, (1) that there shall be no extension of time beyond such thirty (30)-day period for the curing of any such default unless, not more than twenty (20) days after the receipt of the notice of default, Tenant in writing (i) shall specify the cause on account of which the default cannot be cured during such period and shall advise Landlord of its intention duly to institute all steps necessary to cure the default and (ii) shall as soon as may be reasonable duly institute and thereafter diligently prosecute to completion all steps necessary to cure such default and, (2) that no notice of the opportunity to cure a default need be given, and no grace period whatsoever shall be allowed to Tenant, if the default is incurable or if the covenant or condition the breach of which gave rise to the default had, by reason of a breach on two (2) prior occasions during the preceding twelve (12) month period, been the subject of a notice hereunder to cure such default.

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20.END OF TERM - ABANDONED PROPERTY

Upon the expiration or other termination of the Term of this Lease, Tenant shall peaceably quit and surrender to Landlord the Demised Premises and all alterations and additions thereto which Tenant is not entitled or required to remove under the provisions of this Lease, broom clean in good order, repair and condition excepting only reasonable use and wear and damage by fire or other casualty for which, under other provisions of this Lease, Tenant has no responsibility of repair or restoration. Tenant’s obligation to observe or perform this covenant shall survive the expiration or other termination of the Term of this Lease. If the last day of the Term of this Lease or any renewal thereof falls on a day other than a Business Day, this Lease shall expire on the Business Day immediately preceding.

Any personal property in which Tenant has an interest which shall remain in the Building or on the Demised Premises after the expiration or termination of the Term of this Lease shall be conclusively deemed to have been abandoned, and may be disposed of in such manner as Landlord may see fit; provided, however, notwithstanding the foregoing, that Tenant will, upon request of Landlord made not later than thirty (30) days after the expiration or termination of the Term hereof, promptly remove from the Building any such personal property or, if any part thereof shall be sold, that Landlord may receive and retain the proceeds of such sale and apply the same, at its option, against the expenses of the sale, the cost of moving and storage, any arrears of Rent payable hereunder by Tenant to Landlord and any damages to which Landlord may be entitled under Article 19 hereof or pursuant to law, with the balance if any, to be paid to Tenant.

21.RIGHTS OF MORTGAGEES

21.1Superiority of Lease. Except to the extent that it may be provided otherwise by written agreement between Tenant and a Mortgagee, this Lease shall be superior, and shall not be subordinated, to a Mortgage or to any other voluntary lien or encumbrance affecting the Land or Building or any part thereof and hereafter granted by Landlord. Any Mortgagee shall have the right, at its option, to subordinate its Mortgage to this Lease, in whole or in part, by recording a unilateral declaration to such effect.

21.2Entry and Possession. Upon entry and taking possession of the Property by a Mortgagee, for the purpose of foreclosure or otherwise, such Mortgagee shall have all the rights of Landlord, and shall be liable to perform all the obligations of Landlord arising during the period of such possession, provided, however, that upon the return of possession to Landlord by such Mortgagee, such rights and obligations of Mortgagee shall cease until a subsequent entry.

21.3Right to Cure. No act or failure to act on the part of Landlord which would entitle Tenant under the terms of this Lease, or by law, to be relieved of Tenant’s obligations hereunder or to terminate this Lease, shall result in a release or termination of such obligations or a termination of this Lease unless (i) Tenant shall have first given written notice of Landlord’s act or failure to act to first Mortgagees of record, if any, and to any other Mortgagees of whom Tenant has been given written notice, specifying the act or failure to act on the part of Landlord which could or would give basis to Tenant’s rights; and (ii) such Mortgagees, after receipt of such notice, have failed or refused to correct or cure the condition complained of within a

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reasonable time thereafter, but nothing contained in this paragraph shall be deemed to impose any obligation on any such Mortgagees to correct or cure any such condition. “Reasonable time” as used above means and includes a reasonable time to obtain possession of the Land and Building if any such Mortgagee elects to do so and a reasonable time to correct or cure the condition if such condition is determined to exist.

21.4Prepaid Rent. No Rent shall be paid more than thirty (30) days prior to the due dates thereof and, as to a first Mortgagee of record and any other Mortgagees of whom Tenant has been given written notice, payments made in violation of this provision shall (except to the extent that such Rent is actually received by such Mortgagee) be a nullity as against such Mortgagee and Tenant shall be liable for the amount of such payments to such Mortgagee.

21.5Continuing Offer. The covenants and agreements contained in this Lease with respect to the rights, powers and benefits of a Mortgagee (particularly, without limitation thereby, the covenants and agreements contained in this Article) constitute a continuing offer to any person, corporation or other entity, which by accepting or requiring an assignment of this Lease or by entry or foreclosure assumes the obligations herein set forth with respect to such Mortgagee; every such Mortgagee is hereby constituted a party to this Lease as an obligee hereunder to the same extent as though its name was written hereon as such; and such Mortgagee shall be entitled to enforce such provisions in its own name.

21.6Subordination. Notwithstanding the foregoing provisions of this Article, Tenant agrees, at Landlord’s request, to execute and deliver promptly any certificate or other instrument which Landlord may request subordinating this Lease and all rights of Tenant hereunder to any Mortgage, and to all advances made under such Mortgage and/or agreeing to attorn to such Mortgagee in the event that it succeeds to Landlord’s interest in the Property, provided that the holder of any such Mortgage shall execute and deliver to Tenant a non-disturbance agreement to the effect that, in the event of any foreclosure of such Mortgage, such holder will not name Tenant as a party defendant to such foreclosure nor disturb its possession under the Lease and will otherwise recognize Tenant’s rights hereunder. Landlord warrants and represents that the Property is not presently subject to any Mortgage.

21.7Limitations on Liability. Nothing contained in the foregoing Section 21.6 or in any such non-disturbance agreement or non-disturbance provision shall however, affect the prior rights of the holder of any Mortgage with respect to the proceeds of any award in condemnation or of any fire insurance policies affecting the Building, or impose upon any such holder any liability (i) for the erection or completion of the Building, or (ii) in the event of damage or destruction to the Building or the Demised Premises by fire or other casualty, for any repairs, replacements, rebuilding or restoration except such repairs, replacements, rebuilding or restoration as can reasonably be accomplished from the net proceeds of insurance actually received by, or made available to, such holder, or (iii) for any default by Landlord under the Lease occurring prior to any date upon which such holder shall become Tenant’s landlord, or (iv) for any credits, offsets or claims against the Rent as a result of any acts or omissions of Landlord committed or omitted prior to such date, or (v) for return of any security deposit or other funds unless the same shall have been received by such holder, and any such agreement or provision may so state.

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22.QUIET ENJOYMENT

Landlord covenants that if, and so long as, Tenant keeps and performs each and every covenant, agreement, term, provision and condition herein contained on the part and on behalf of Tenant to be kept and performed, Tenant shall quietly enjoy the Demised Premises from and against the claims of all persons claiming by, through or under Landlord subject, nevertheless, to the covenants, agreements, terms, provisions and conditions of this Lease and to all Mortgages to which this Lease is subject and subordinate.

Without incurring any liability to Tenant, Landlord may permit access to the Demised Premises and open the same, whether or not Tenant shall be present, upon any demand of any receiver, trustee, assignee for the benefit of creditors, sheriff, marshall or court officer entitled to, or reasonably purporting to be entitled to, such access for the purpose of taking possession of, or removing Tenant’s property or for any other lawful purpose (but this provision and any action by Landlord hereunder shall not be deemed a recognition by Landlord that the person or official making such demand has any right or interest in or to this Lease, or in or to the Demised Premises), or upon demand of any representative of the fire, police, building, sanitation or other department of the city, county, state or federal governments.

23.ENTIRE AGREEMENT - WAIVER - SURRENDER

23.1Entire Agreement. This Lease and the Exhibits made a part hereof contain the entire and only agreement between the parties and any and all statements and representations, written and oral, including previous correspondence and agreements between the parties hereto, are merged herein. Tenant acknowledges that all representations and statements upon which it relied in executing this Lease are contained herein and that Tenant in no way relied upon any other statements or representations, written or oral. Any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of this Lease in whole or in part unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought. Nothing herein shall prevent the parties from agreeing to amend this Lease and the Exhibits made a part hereof as long as such amendment shall be in writing and shall be duly signed by both parties.

23.2Waiver by Landlord. The failure of Landlord to seek redress for violation, or to insist upon the strict performance, of any covenant or condition of this Lease, or any of the Rules and Regulations promulgated hereunder, shall not prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of an original violation. The receipt by Landlord of Rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. The failure of Landlord to enforce any of such Rules and Regulations against Tenant and/or any other tenant or subtenant in the Building shall not be deemed a waiver of any such Rules and Regulations. No provisions of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein stipulated shall be deemed to be other than on account of the stipulated Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to

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Landlord’s right to recover the balance of such Rent or pursue any other remedy in this Lease provided.

23.3Surrender. No act or thing done by Landlord during the term hereby demised shall be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept such surrender shall be valid, unless in writing signed by Landlord. No employee of Landlord or of Landlord’s agents shall have any power to accept the keys of the Demised Premises prior to the termination of this Lease. The delivery of keys to any employee of Landlord or of Landlord’s agents shall not operate as a termination of the Lease or a surrender of the Demised Premises.

24.INABILITY TO PERFORM - EXCULPATORY CLAUSE

Except as otherwise expressly provided in this Lease, this Lease and the obligations of Tenant to pay Rent hereunder and perform all other covenants, agreements, terms, provisions and conditions hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease or is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make or is delayed in making any repairs, replacements, additions, alterations, improvements or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from doing so by reason of strikes or labor troubles or any other similar or dissimilar cause whatsoever beyond Landlord’s reasonable control, including but not limited to, governmental preemption in connection with a national emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any governmental agency or by reason of the conditions of supply and demand which have been or are affected by war, hostilities or other similar or dissimilar emergency. In each such instance of inability of Landlord to perform, Landlord shall exercise reasonable diligence to eliminate the cause of such inability to perform.

Tenant shall neither assert nor seek to enforce any claim for breach of this Lease against any of Landlord’s assets other than Landlord’s interest in the Property and in the rents, issues and profits thereof, and Tenant agrees to look solely to such interest for the satisfaction of any liability of Landlord under this Lease, it being specifically agreed that in no event shall Landlord (which term shall include, without limitation any of the officers, trustees, directors, partners, beneficiaries, joint venturers, members, stockholders or other principals or representatives, disclosed or undisclosed, of Landlord or any managing agent) ever be personally liable for any such liability. This paragraph shall not limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord or to take any other action which shall not involve the personal liability of Landlord to respond in monetary damages from Landlord’s assets other than the Landlord’s interest in said real estate, as aforesaid. In no event shall Landlord ever be liable for consequential damages. In no event shall Tenant be liable for consequential damages not expressly provided for in this Lease unless such damages are a reasonably foreseeable result of Tenant’s failure to fulfill its obligations hereunder.

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25.BILLS AND NOTICES

Any notice, consent, request, bill, demand or statement hereunder by either party to the other party shall be in writing and shall be either delivered or served personally or sent by certified mail, return receipt requested, in a postpaid envelope, deposited in the United States mails addressed to the respective party at its Address as stated in Article 1, or if any Address for notices shall have been duly changed as hereinafter provided, at such changed Address. Either party may at any time change the Address for such notices, consents, requests, bills, demands or statements by delivering or mailing, as aforesaid, to the other party a notice stating the change and setting forth the changed Address, provided such changed address is within the United States. Any such notice, consent, request, bill, demand or statement shall be effective when received or refused.

All bills and statements for reimbursement or other payments or charges due from Tenant to Landlord hereunder shall be due and payable in full thirty (30) days, unless herein otherwise provided, after submission thereof by Landlord to Tenant. Tenant’s failure to make timely payment of any amounts indicated by such bills and statements, whether for work done by Landlord at Tenant’s request, reimbursement provided for by this Lease or for any other sums properly owing by Tenant to Landlord, shall be treated as a default in the payment of Rent, in which event Landlord shall have all rights and remedies provided in this Lease for the nonpayment of Rent.

26.PARTIES BOUND - SEIZIN OF TITLE

The covenants, agreements, terms, provisions and conditions of this Lease shall bind and benefit the successors and assigns of the parties hereto with the same effect as if mentioned in each instance where a party hereto is named or referred to, except that no violation of the provisions of Article 14 hereof shall operate to vest any rights in any successor or assignee of Tenant and that the provisions of this Article shall not be construed as modifying the conditions of limitation contained in Article 19 hereof.

If in connection with or as a consequence of the sale, transfer or other disposition of the real estate (Land and/or Building, either or both, as the case may be) of which the Demised Premises are a part Landlord ceases to be the owner of the reversionary interest in the Demised Premises, Landlord shall be entirely freed and relieved from the performance and observance thereafter of all covenants and obligations hereunder accruing thereafter on the part of Landlord to be performed and observed (other than the duty to properly account for any security deposit held by Landlord pursuant to Section 27.7 until said deposit, or any balance thereof, is transferred to Landlord’s successor), it being understood and agreed in such event (and it shall be deemed and construed as a covenant running with the land) that the person succeeding to Landlord’s ownership of said reversionary interest shall thereupon and thereafter assume, and perform and observe, any and all of such covenants and obligations of Landlord.

27.MISCELLANEOUS

27.1Separability. If any provision of this Lease or portion of such provision or the application thereof to any person or circumstance is for any reason held invalid or unenforceable,

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the remainder of the Lease (or the remainder of such provision) and the application thereof to other persons or circumstances shall not be affected thereby.

27.2Captions. The captions are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Lease nor the intent of any provisions thereof.

27.3Brokers. Each party represents and warrants that it has not directly or indirectly dealt, with respect to the leasing of space in the Building, with any broker or had its attention called to the Demised Premises or other space to let in the Building, by any broker other than the Brokers listed in Article 1, whose commission shall be the responsibility of Landlord. Each party agrees to exonerate and save harmless and indemnify the other against any claims for a commission by any other broker, person or firm, with whom such party has dealt in connection with the execution and delivery of this Lease or out of negotiations between Landlord and Tenant with respect to the leasing of other space in the Building.

27.4Governing Law. This Lease is made pursuant to, and shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.

27.5Assignment of Lease and/or Rent. With reference to any assignment by Landlord of its interest in this Lease and/or the Rent payable hereunder, conditional in nature or otherwise, which assignment is made to or held by a bank, trust company, insurance company or other institutional lender holding a Mortgage on the Building, Landlord and Tenant agree:

(a)that the execution thereof by Landlord and acceptance thereof by such Mortgagee shall never be deemed an assumption by such Mortgagee of any of the obligations of Landlord hereunder, unless such Mortgagee shall, by written notice sent to the Tenant, specifically otherwise elect; and

(b)that, except as aforesaid, such Mortgagee shall be treated as having assumed the Landlord’s obligations hereunder only upon foreclosure of such Mortgagee’s Mortgage and the taking of possession of the Demised Premises after having given notice of its intention to succeed to the interest of Landlord under this Lease.

27.6Notice of Lease. Neither party shall record this Lease in any Registry of Deeds or Registry District, provided however that either party shall at the request of the other, execute and deliver a recordable Notice of this Lease in the form prescribed by Chapter 183, Section 4 of the Massachusetts General Laws.

27.7Security Deposit. A deposit in the amount of $596,122 shall be paid by Tenant upon execution hereof and held by Landlord as security for the full, faithful and punctual performance by Tenant of all the covenants of this Lease on Tenant’s part to be performed, it being understood that said deposit is not to be considered prepaid rent, nor shall damages be limited to the amount of said deposit, nor shall Landlord be required, because of said deposit, to waive its right under Article 19 to terminate this Lease in the event of default. In no event shall Landlord be obligated to pay interest on said deposit. Said deposit, or any balance thereof, shall be refunded to Tenant, subject to Tenant’s satisfactory compliance with its covenants hereunder,

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within thirty (30) days following the end of the Term of this Lease. Tenant shall be entitled to pay said deposit, either initially or to replace a previous cash payment (it being understood that no further substitutions in the form of said deposit shall be allowed), by furnishing an irrevocable letter of credit subject to the following terms and conditions. Said letter of credit shall be issued by a commercial bank approved by Landlord and shall be in form and content satisfactory in all respects to Landlord. In the event of any default by Tenant, Landlord shall be entitled to receive from the issuer of such letter of credit upon demand so much of the amount which may be drawn therefrom as shall be necessary to cure such default and compensate Landlord for all losses, liabilities, damages and other expenses, including without limitation reasonable attorneys’ fees, which may be imposed upon, incurred by or asserted against Landlord by reason of such default, and Tenant shall thereafter promptly restore such letter of credit to its original amount. If Tenant fails to restore such letter of credit to its original amount as hereinabove required, or if such letter of credit is about to expire and shall not have been renewed as herein required within thirty (30) days preceding such expiration, or if Landlord otherwise reasonably deems itself insecure with regard to the performance by Tenant of its covenants hereunder, then in any such event Landlord may upon demand withdraw all remaining available funds under such letter of credit and hold the same as a cash security deposit pursuant to the preceding provisions of this Section.

27.8Parking. So long as this Lease remains in full force and effect, Landlord shall allocate to Tenant nine (9) unreserved spaces in the parking area to be contained in the Building.  Tenant shall comply with all regulations of general applicability imposed by Landlord with respect to the use of such spaces by Tenant hereunder, including without limitation payment of such fees as may be generally applicable from time to time, calculated at the same monthly rate applicable from time to time to spaces located in the garage at 10 Necco Street, Boston, Massachusetts (or, if Landlord no longer owns or operates said garage, at the same monthly rate applicable from time to time to spaces located in any comparable garage facility designated by Landlord). To the fullest extent permitted by law, Landlord shall have no responsibility for securing such parking area, nor shall Landlord be liable for any theft, injury or damage occurring therein.

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IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be executed under seal, all as of the day and year first above written.

LANDLORD:
BOSTON WHARF CO.
By	[ILLEGIBLE]
On behalf of P & 0 Properties Boston Inc. and Summer St. Properties Inc., its sole General Partners
TENANT:
THE MacGREGOR GROUP, INC.
By	/s/ Thomas F. Sheehan
Its	Chief Financial Officer
	(duly-authorized) title

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EXHIBIT A
PLAN OF DEMISED PREMISES

321 Summer Street Building Improvements
Scope of Construction Work	EXHIBIT B
SHELL AND CORE IMPROVEMENTS
November 10, 1999	BASE BUILDING WORK

The following is an outline of the work required for the proposed building shell and core improvements to 321 Summer Street in preparation for tenant occupancy. The scope of work outlined herein does not include tenant improvements.

0.0Contracts and Conditions

0.1Form of Contract: AIA A111, Owner/Contractor Agreement, Cost of the Work Plus a Fee, 1987 edition.

0.2Conditions of the Contract:

a.AIA A201, General Conditions of the Contract for Construction, 1987 edition.

b.Boston Wharf Company, Supplementary General Conditions.

0.3Insurance Requirements: Per requirements of Boston Wharf Company.

1.0General Requirements

1.1General Requirements customarily applicable to Boston Wharf projects shall be applicable to this project. Copy available on request.

1.2Do not interrupt services, utilities, or facilities except when having given prior written permission by the Boston Wharf Co.

1.3Take special care and make every reasonable effort to protect the exterior and building system upgrades in progress or completed.

1.4Prevent the entry of rain water, snow, ice from entering the building while construction operations are underway.

1.5Perform torch cutting operations in accordance with requirements of the Boston Wharf Co. and the local fire department.

2.0Project Site Preparation

2.1Selective Demolition:

a.Demolish the following items:

i.Miscellaneous non-masonry partitions.

ii.Existing toilet fixtures and fittings.

iii.Existing windows, sash only.

iv.Existing fire stair doors, fire escape doors and overhead doors and miscellaneous interior doors.

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v.Existing interior finishes at exterior walls.

viExisting roofing gravel and flashings. Remove loose roofing plies, cutout blisters.

vii.Land and remove all existing passenger and freight elevators and related equipment including rails and supports.

viii.Existing finishes from ceilings.

ix.Concrete loading docks on back of building.

x.Existing mechanical systems.

b.Preparation of the construction for installation of new building components and systems:

i.Core holes in existing floors to receive new piping and conduit.

ii.Cut new openings at floors/slabs for new elevators, stairs, duct shafts and new main entry lobby.

c.Remove and legally dispose of demolished materials off-site.

3.0Concrete

3.1Miscellaneous patching as required.

3.2New slab at main entry lobby, slab infills at existing brick masonry stair and elevator shafts.

3.2Concrete pads for new emergency generator, fire pump, boilers, air handling units, booster pumps, switch gear and transformer.

3.3Concrete foundations and slabs at elevator pit.

4.0Masonry

4.1Setting of relieving angles and structural steel elements and patching at new piping, ductwork, conduit and other new openings, doorways and penetrations in masonry walls. Patch with matching masonry materials.

4.2Cut and point 50% of exterior brick walls.

4.3Epoxy inject broken stone lintels if necessary.

4.4Clean Summer Street elevation and east and west facades with restoration cleaner at brick and high pressure water on limestone.

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4.5Cut and retooth in new window openings in east and west facades at floors 6,7 and 8.

5.0Metals

5.1Provide loose lintels and structural steel elements for penetrations in masonry walls.

5.2Provide metal deck and support angles at new slab infills at existing brick masonry stair and elevator shafts.

5.3Provide new steel stair system with concrete infill @ treads and landings including treads, stringers, risers, landing and rails, shop primed and related items for new egress stair, all floors including roof.

5.4Provide structural steel framing at new main entry lobby, stairs, ductwork shafts, elevator hoistway and elevator override.

5.5Provide steel to support roof top cooling tower, galvanized.

5.6Provide miscellaneous elevator steel items including pit ladder, sills and angles.

5.7Heavy gage structural steel stud framing at elevator override and stair roof access.

6.0Wood

6.1Rough Carpentry:

a.Provide blocking where required.

b.Prepare window openings for installation of new windows.

b.Provide plywood backing panels in the electrical closet.

c.Remove and replace pieces of existing buckled and deteriorated flooring, fill in gaps and low spots, in preparation for carpet installation by Tenant.

6.2Finish Carpentry:

a.Steamed beach veneer window sills with solid beach edge band, clear finish.

b.Main lobby millwork and trim.

c.Steamed beach wall base at typical floor elevator lobbies.

7.0Thermal and Moisture Protection

7.1Insulation:

a.Min. 3” foil faced fiberglass blankett at exterior walls.

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b.Min. 2” polyisocyanurate at roof, tapered to roof drains, mechanically fastened.

c.2 1/2” sound attenuation blanket at toilet room walls.

7.2Firestopping: Mineral wool or 3M Fire-Barrier Caulk or Bio Fireshield Firestop Collars, at floor and wall penetrations as appropriate.

7.3EPDM Membrane Roofing: .060, Fully adhered.

7.4Flashing and Sheet Metal: Copper flashing and counter flashings, 16 oz, where required. .060” cap flashing at building perimiter where missing.

7.5Roof Specialties and Accessories: Provide new roof access hatch and elevator shaft vents.

7.6Preformed Siding:

a.Provide .060”aluminum siding, pre-finished AAMA 2605 70% kynar paint, with related accessories for cladding of elevator override and stair penthouse.

7.7Joint Sealers and Fillers:

a.Multi-component polyurethane, ASTM C920 Type M, Grade NS, Class 25, FS TT-S-00227E Class A at all exterior building joints and windows.

b.Single component urethane, ASTM C920, Type S, ASTM C719, FS TT-00230C, Type II, Class A and FS TT-S-001543A, Class A for all interior joints except at toilet rooms.

c.Silicone, sanitary type, ASTM D2240, ASTM C719, FS TT-00230C, Type II, Class A and FS TT-S-001543A, Class A, at toilet rooms.

d.Miscellaneous materials as required.

8.0Doors and Windows

8.1Provide Hollow Metal Doors and Frames in the following locations:

a.All door openings - hollow metal frames; welded at exterior openings, knock-down at interior openings .

b.All doors, steamed beach veneer, solid core, natural finish.

8.2Aluminum Windows:

a.High performance heavy duty commercial replacement windows, fixed.

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b.1” insulating glass, clear glass, thermal break.

c.Interior and exterior panning, including radiused head breaks.

d.Kynar finish.

8.3Building Entrances and Store Front:

a.Building entrances: medium style stainless steel clad aluminum doors with manufacturer standard hardware, Kynar finish, thermal breaks.

b.Storefront: 1” insulating glass, thermal breaks and Kynar finish.

8.4Finish Hardware:

a.Finish - Brushed stainless steel.

b.Sets:

i.Door at Electrical/Telephone Rooms and Other Miscellaneous Doors:

Butts

Lock Set

Strike

Silencers

ii.Doors at Toilet Rooms:

Butts

Closer

Push/Pulls

Strike

Silencers

8.5Mirrors: Unframed full width mirrors at lavatories.

9.0Finishes

9.1Drywall partitions:

a.3-5/8” stud partitions.

b.2-1/2” stud furring at building perimeter and along party walls (if scheduled to receive drywall).

c.5/8” drywall, X-type where fire rated, MR-type at toilet room fixture walls, vapor barrier type at building perimeter. Three layers of drywall at toilet room walls.

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d.Shaftwall at new building shafts.

e.Metal trim accessories.

f.Fire ratings:

i.2-hour at stairs, elevator shaft and ductwork shafts.

ii.1-hour at mechanical room

9.2Ceramic Tile:

a.8” x 8” porcelain ceramic tile on floor.

b.4”x 8” porcelain ceramic tile base with bull nose top.

c.Marble threshold.

9.3Acoustical Ceilings: 2’ x 2’ lay-in, with 9/16” exposed gird, at toilet rooms.

9.4Interior Stone: Polished granite lavatory tops at toilet rooms.

9.4Painting:

a.Wood work: natural finish, AWI System TR4.

b.Painted Drywall:

i.Walls in tenant areas and electrical/telephone room - primer only.

iii.Walls in toilet rooms - 1 coat primer, 2 coats eggshell, polomyx at wet walls.

c.Painted Metal: 1 coat primer, 2 coats, semi-gloss.

10.0Specialties

10.1Fire Extinguisher and Cabinets:

a.2 fully recessed cabinets per floor.

b.ABC type extinguisher.

10.2Toilet Partitions

a.Floor mounted, factory painted enamel finish.

10.3Toilet Accessories:

a.Fully recessed paper towel dispenser with waste receptacle.

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b.Toilet tissue dispensers.

c.Sanitary napkin dispenser (women only).

d.Sanitary napkin disposer (women only).

e.Grab bars.

11.0Equipment: None.

12.0Furnishings: None.

13.0Special Construction: None.

14.0Conveying Systems:.

14.1Elevators

a.Provide two traction elevators.

b.Microprocessor based control system.

c.Cab: Manufacturer’s standard plastic laminate walls, egg crate ceiling.

15.0Mechanical

15.1Fire Protection: Provide new sprinkler branch lines heads and drops in new spaces as required to maintain full sprinkler coverage on the floor based on tenant layout.

15.2Plumbing:

a.Provide water and sanitary distribution for toilet rooms as required, to tie into
new building system.

b.Fixtures:

iWater closets, wall mounted, elongated bowl.

ii.Urinals, wall hung.

iii.Lavatories, self-rimming, oval for surface mount in countertop.

iv.Electric water coolers.

v.Mop receptors.

vi.Electric waterheaters, 30 gallon, 1 every other floor.

15.3HVAC

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a.Heating: Hot water boiler with fin tube radiation and supplemental heating coils in ductwork.

b.Roof top exhaust fans.

c.Ductwork

i.Vertical supply and return distribution stubbed into tenant spaces.

ii.Toilet exhaust system.

iii.Horizontal distribution at common lobbies, corridors and spaces.

d.Main entrance and ground floor egress cabinet heaters.

e.Automatic temperature controls coordinated with Boston Wharf Co. system.

16.0Electrical

16.1Service and Distribution:

a.Provide new service and distribution system throughout building including
service distribution to tenant meters and panels on each floor.

b.Provide power and lighting wiring to house and common areas on each floor.

16.2Lighting:

a.4 foot 2 lamp strip fluorescents, chain hung tenant electric/telephone closets, penthouses, and basement.

b.Decorative lighting in main lobby.

c.Decorative exterior lighting at front building entrance.

d.Temporary fluorescent lighting in tenant spaces.

e.Recessed fluorescent cove lighting with recessed fluorescent down lighting in toilet rooms.

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16.3Fire Alarm System:

a.Provide in tenant areas, tied into central fire alarm system.

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EXHIBIT B-1

APPROVED CONTRACTORS

Turner Construction Co.

Payton Construction Corp.

T.R. White Co., Inc.

EXHIBIT C

SCHEDULE OF CLEANING SERVICES

NIGHTLY

Empty wastebaskets and replace plastic liners as needed (liners to be paid for by tenant).

Dust furniture and fixtures, office equipment, ledges, windowsills, telephones and bookshelves.

Spot clean walls around door frames and light switches. Clean and sanitize drinking fountains. Damp wipe desk and table tops.

Vacuum carpeting.

Spot clean carpeting.

Dry mop composition floors using chemically treated dry mops.

Spot mop composition floors.

Vacuum and/or sweep and dust stairways.

LOBBY AND ELEVATORS

Damp wipe elevator doors inside and out and elevator walls and button panels.

Dust elevator doors and walls.

Clean elevator tracks.

Vacuum elevator rugs.

Wash entrance door glass.

TENANT’S KITCHEN

Wash table tops in kitchen.

Wipe down chairs, refrigerator, sink, microwave and dishwasher in kitchen.

COMPUTER ROOM. COMPUTERS AND OTHER EQUIPMENT

Special care in cleaning of these items.

LAVATORIES

Wash and disinfect sinks, commodes and urinals. Wash and polish mirrors and bright work. Empty receptacles and remove trash. Dust partitions, dispensers and receptacles.

Replenish toilet tissue, paper towel and hand soap dispensers (supplies to be furnished by Landlord).

Sweep, wash and disinfect floors.

Wash and polish all marble.

WEEKLY

Dust bottoms of chairs, typewriter tables, baseboards, open shelves, etc.

Remove fingerprints and smudges from doors, door frames, walls, switchplates and partitions.

Wash composition floors.

Spray buff composition floors.

Wash chairs.

MONTHLY

Dust walls and venetian blinds.

Wash and redress composition floors and baseboards.

QUARTERLY

Dust ceiling diffusers.

Machine strip and refinish composition floors.

WINDOW CLEANING

Wash and clean interior and exterior windows including all metal mullions and sashes, which shall be wiped clean during the window cleaning operation once every three (3) months.

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EXHIBIT D

RULES AND REGULATIONS

1.The sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors or halls of the Building shall not be obstructed or encumbered or used for any purpose other than ingress and egress to and from the premises demised to any tenant or occupant.

2.No awnings or other projections shall be attached to the outside walls or windows of the Building without the prior consent of Landlord. No curtains, blinds, shades, or screens shall be attached or hung in, or used in connection with, any window or door of the premises demised to any tenant or occupant, without the prior consent of Landlord. Such awnings, projections, curtains, blinds, shades, screens, or other fixtures must be of a quality type, design and color, and attached in a manner, approved by Landlord.

3.No sign, advertisement, object, notice or other lettering shall be exhibited, inscribed, painted or affixed on any part of the outside or inside of the premises demised to any tenant or occupant or of the Building without the prior consent of Landlord. Interior signs on doors and directory tables, if any, shall be of a size, color and style approved by Landlord.

4.The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed, nor shall any bottles, parcels, or other articles be placed on any window sills.

5.No show cases or other articles shall be put in front of or affixed to any part of the exterior of the Building, nor placed in the halls, corridors, vestibules or other parts of the Building.

6.The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances shall be thrown therein.

7.No tenant or occupant shall mark, paint, drill into, or in any way deface any part of the Building or the premises demised to such tenant or occupant. No boring, cutting or stringing of wires shall be permitted, except with the prior consent of the Landlord, and as Landlord may direct. No tenant or occupant shall install any carpeting in the premises demised to such tenant or occupant except in manner approved by Landlord and in accordance with the following minimum specifications:

Padding - 40 ounces in weight per square yard

Carpeting - 25 ounces in face weight per square yard

8.No bicycles, vehicles or animals of any kind shall be brought into or kept in or about the premises demised to any tenant. Bicycles may be stored in racks, if any, furnished for such purpose by Landlord in a common area of the Property. No cooking shall be done or permitted in the Building by any tenant without the approval of Landlord. No tenant shall cause

or permit any unusual or objectionable odors to emanate from the premises demised to such tenant.

9.Without the prior consent of Landlord, no space in the Building shall be used for manufacturing, or for the sale of merchandise, goods or property of any kind at auction.

10.No tenant shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with other tenants or occupants of the Building or neighboring buildings or premises whether by the use of any musical instrument, radio, television set or other audio device, unmusical noise, whistling, singing, or in any other way. Nothing shall be thrown out of any doors or windows.

11.Each tenant must, upon the termination of its tenancy, restore to Landlord all keys of stores, storage areas, offices and toilet rooms, either furnished to, or otherwise procured by, such tenant.

12.All removals from the Building, or the carrying in or out of the Building or the premises demised to any tenant, of any safes, freight, furniture, or bulky matter of any description must take place at such time and in such manner as Landlord or its agents may determine, from time to time. Landlord reserves the right to inspect all freight to be brought into the Building and to exclude from the Building all freight which violates any of the Building Rules or the provisions of such tenant’s lease.

13.No tenant shall use or occupy, or permit any portion of the premises demised to such tenant to be used or occupied, as an office for a public stenographer or typist, or as a barber or manicure shop, or as an employment bureau. No tenant or occupant shall engage or pay any employees in the Building, except those actually working for such tenant or occupant in the Building, nor advertise for laborers giving an address at the Building.

14.No tenant or occupant shall purchase spring water, ice, food, beverage, lighting maintenance, cleaning towels or other like service, from any company or person not approved by Landlord, such approval not unreasonably to be withheld.

15.Landlord shall have the right to prohibit any advertising by any tenant or occupant which, in Landlord’s opinion, tends to impair the reputation of the Building or its desirability as a building for offices, and upon notice from Landlord, such tenant or occupant shall refrain from or discontinue such advertising.

16.Landlord reserves the right to exclude from the Building, between the hours of 6:00 p.m. and 8:00 a.m. on Business Days and otherwise at all hours, all unauthorized persons.

17.Each tenant, before closing and leaving the premises demised to such tenant at any time, shall see that all entrance doors are locked and windows closed.

18.No premises shall be used, or permitted to be used, for lodging or sleeping, or for any immoral or illegal purpose.

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19.There shall not be used in the Building, either by any tenant or occupant or by their agents or contractors, in the delivery or receipt of merchandise, freight or other matter, any hand trucks or other means of conveyance except those equipped with rubber tires, rubber side guards and such other safeguards as Landlord may require.

20.Canvassing, soliciting and peddling in the Building are prohibited and each tenant and occupant shall cooperate in seeking their prevention.

21.If the premises demised to any tenant become infested with vermin, such tenant, at its sole cost and expense, shall cause its premises to be exterminated from time to time, to the satisfaction of Landlord, and shall employ such exterminators therefor as shall be approved by Landlord.

22.No tenant shall move, or permit to be moved, into or out of the Building or the premises demised to such tenant, any heavy or bulky matter, without the specific approval of Landlord. If any such matter requires special handling, only a person holding a Master Rigger’s license shall be employed to perform such special handling. No tenant shall place, or permit to be placed, on any part of the floor or floors of the premises demised to such tenant, a load exceeding the floor load per square foot which such floor was designed to carry and which is allowed by law. Landlord reserves the right to prescribe the weight and position of safes and other heavy matter, which must be placed so as to distribute the weight. Whenever any passenger elevator is used for the transport of freight, protective padding furnished by Landlord shall be attached to the side and rear walls of said elevator during such use.

23.The requirements of tenants will be attended to only upon application at the office of the building. Building employees shall not be required to perform, and shall not be requested by any tenant or occupant to perform, any work outside of their regular duties, unless under specific instructions from the office of the managing agent of the building.

24.The possession of any lighted cigarette, cigar, pipe or other smoking articles shall be prohibited throughout the Building and the sidewalks adjoining the Building.

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EX-10.30.1

EXHIBIT 10.30.1

CONSENT TO ASSIGNMENT

This Consent to Assignment (this “Agreement”) is dated as of March 31, 2006, among W2005 BWH III Realty, L.L.C., a Delaware limited liability company (“Landlord”), The MacGregor Group, Inc., a Delaware corporation (“Assignor”), and Investment Technology Group, Inc., a Delaware corporation (“Assignee”).

RECITALS:

A.Assignor and Boston Wharf Co., a Massachusetts general partnership (the “Original Landlord”), entered into that certain Lease dated as of August 15, 2000 (the “Lease”), under which Landlord is leasing to Assignor approximately 37,551 rentable square feet of floor area in the building located at 321 Summer Street, Boston, Massachusetts.  (the “Building”). Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease.

B.Assignor desires to assign the Lease to Assignee, and Assignee desires to assume all of Assignor’s obligations under the Lease, subject to the terms and conditions contained herein.

C.Landlord has succeeded to the interest of Original Landlord as owner of the Building and as landlord under the Lease.

AGREEMENTS:

For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Consent. Subject to the terms and conditions contained in this Agreement, Landlord hereby consents to the assignment of the Lease by Assignor to Assignee pursuant to the Lease Assignment and Assumption Agreement between Assignor and Assignee, a true copy of which is attached hereto as Exhibit A (the “Assignment”). Landlord’s consent contained herein shall not waive its rights as to any subsequent assignment, sublease or other transfer and shall not be construed as a consent to any modifications of the terms of the Lease contained in the Assignment (if any) unless such modifications are expressly set forth in this Agreement.

2.Assumption of Liabilities. Assignor and Assignee shall be jointly and severally liable to Landlord for all of the obligations of the “Tenant” under the Lease (whether arising or accruing before or after the effective date of the Assignment), including, without limitation, the indemnification obligations, and Landlord may enforce the same directly against Assignee or Assignor or both.

3.No Obligations Created. Each of the parties to this Agreement agree and acknowledge that Landlord shall have no obligation or liability under the terms of the Assignment. Without limiting the generality of the foregoing, Landlord shall have no liability for (and shall not be bound by) any modifications, deletions or waivers of any provision of the Lease which Landlord has not agreed to specifically in writing. Additionally, Landlord shall have no obligation to give notice of any default under the Lease except to Assignee (and only

1

to the extent required under the Lease) and shall have no obligation to deal with any party other than Assignee with respect to the Lease or the Premises. Assignee hereby releases, acquits and forever discharges Landlord and its agents, employees, officers, directors, partners and affiliates from any and all claims, liabilities and obligations arising out of or in any way related to the Assignment which Assignee or any party claiming by, through or under Assignee now has or may ever have in the future against Landlord or any of such other parties. Assignee acknowledges that Landlord would not have entered this Agreement without such release.

4.[Intentionally Omitted.]

5.Condition of Premises. Landlord makes no representations or warranties, express or implied, concerning the condition of the Premises, and Assignee accepts the Premises in their “as-is” condition as of the date hereof, subject to Landlord’s ongoing obligations under the Lease.

6.Subordination. Assignor hereby subordinates to the interest of Landlord any statutory lien, contractual lien, security interest or other rights which Assignor may claim with respect to any property of Assignee.

7.Security Deposit. Pursuant to Section 27.7 of the Lease, Assignor has delivered to Landlord a letter of credit in the amount of $596,122 (the “Letter of Credit”). Within thirty (30) days of the date of this Agreement, Landlord shall return to Assignor the Letter of Credit. From and after the date of this Agreement, Section 27.7 shall be deleted from the Lease and Assignee shall have no obligation to provide a security deposit under the Lease.

8.Conditions Precedent. The delivery to Landlord of the following items no later than 3:00 p.m. Boston, Massachusetts, time on April 28, 2006, shall be conditions precedent to Landlord’s consent as provided in Section 1 above:

(a)$1,000.00 from Assignor, representing Landlord’s attorneys’ fees incurred in connection with this Agreement;

(b)$750 from Assignor, representing Landlord’s administrative fee payable in connection with this Agreement;

(c)certificate(s) of insurance from Assignee satisfying all the requirements of the Lease; and

(d)a photocopy of the original executed Assignment.

9.Limitation of Liability. In addition to any other limitations of Landlord’s liability as contained in the Lease, as amended to date, the liability of Landlord (and its partners, shareholders or members) to either Assignor or Assignee (or any person or entity claiming by, through or under Assignor or Assignee) for any default by Landlord under the terms of the Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Building shall be limited to such party’s actual direct, but not consequential, damages therefor and shall be recoverable only from the interest of

2

Landlord in the Property and Landlord (and its partners, shareholders or members) shall not be personally liable for any deficiency.

10.Brokerage. Neither Assignor nor Assignee has dealt with any broker or agent in connection with the negotiation or execution of the Assignment or this Agreement. In no event shall Landlord be liable for any leasing or brokerage commission with respect to the negotiation and execution of the Assignment or this Agreement. Assignor and Assignee shall each jointly and severally indemnify, defend and hold Landlord harmless from and against all costs, expenses, attorneys’ fees and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through or under the indemnifying party with respect to the Assignment or this Agreement.

11.Notices; No Electronic Records. All notices and other communications given pursuant to the Lease and this Agreement shall be in writing and shall be (a) mailed by first class, United States mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address(es) listed below, (b) hand delivered to the intended addressee, (c) sent by a nationally-recognized overnight courier (e.g., Federal Express), or (d) sent by facsimile transmission followed by a confirmatory letter. Notice sent by certified mail, postage prepaid, shall be effective three business days after being deposited in the United States mail; all other notices shall be effective upon delivery to the address of the addressee (even if such addressee refuses delivery thereof). Landlord, Assignor and Assignee hereby agree not to conduct the transactions or communications contemplated by this Agreement, by electronic means, except by facsimile transmission as specifically set forth in this Section 11; nor shall the use of the phrase “in writing” or the word “written” be construed to include electronic communications except by facsimile transmissions as specifically set forth in this Section 11. The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision. Without limiting the provisions of Section 3 hereof, the addresses for notice set forth below shall supersede and replace any addresses for notice set forth in the Lease.

Landlord:	W2005 BWH III Realty, L.L.C.
	c/o Spaulding and Slye
	263 Summer Street
	Boston, Massachusetts 02210
	Attention: Property Manager
	Telecopy No.: 617-439-0557
with a copy to:	W2005 BWH III Realty, L.L.C.
	c/o Archon Group, L.P.
	99 High Street
	Boston, Massachusetts 02110
	Attention: Regional Marketing Officer
	Telecopy No.: 617-854-5540

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with a copy to:	W2005 BWH III Realty, L.L.C.
	c/o Archon Group, L.P.
	600 East Las Colinas Boulevard, Suite 400
	Irving, Texas 75039
	Attention: General Counsel — 321 Summer Street, Boston,
	Massachusetts
	Telecopy No.: 972-368-3199
Assignor:	The MacGregor Group, Inc.
	c/o Investment Technology Group, Inc.
	380 Madison Avenue
	New York, New York 10017
	Attention: General Counsel
	Telecopy No.: 212-444-6494
Assignee:	Investment Technology Group, Inc.
	380 Madison Avenue
	New York, New York 10017
	Attention: General Counsel
	Telecopy No.: 212-444-6494

12.Ratification. Assignor and Assignee hereby ratify and confirm their respective obligations under the Lease, and represent and warrant to Landlord that, as of the date hereof, they have no defenses thereto. Additionally, Assignor, and Assignee further confirm and ratify that, as of the date hereof, (a) the Lease is and remains in full force and effect, (b) to each party’s knowledge, neither of such parties has any claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord, Assignor or Assignee, and (c) except as expressly provided for in this Agreement, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.

Landlord confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in full force and effect, and (b) to Landlord’s knowledge, Landlord has no claims, counterclaims, set-offs or defenses against Assignee or Assignor arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord, Assignor or Assignee.

13.Binding Effect; Governing Law. Except as modified hereby, the Lease shall remain in full effect and this Agreement shall be binding upon Landlord, Assignor, and Assignee and their respective successors and assigns. If any inconsistency exists or arises between the terms of this Agreement and the terms of the Lease, the terms of this Agreement shall prevail. This Agreement shall be governed by the laws of the state in which the Premises are located.

14.Amendment; Entire Agreement. This Agreement shall not be amended or modified except by an instrument in writing signed by all the parties hereto and this

4

Agreement contains all of the agreements, understandings, representations and warranties of the parties with respect to the subject matter hereof.

15.Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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EXECUTED as a sealed instrument as of the date first written above.

LANDLORD:	W2005 BWH III REALTY, L.L.C., a Delaware
	limited liability company
	By:	/s/ John M. Matteson
	Name:		John M. Matteson
	Title:			AVP
ASSIGNOR:	THE MACGREGOR GROUP, INC., a
	Delaware corporation
	By:	/s/ P. Mats Goebels
	Name:		P. Mats Goebels
	Title:		Director & Secretary
ASSIGNEE:	INVESTMENT TECHNOLOGY GROUP,
	INC., a Delaware corporation
	By:	/s/ P. Mats Goebels
	Name:		P. Mats Goebels
	Title:		Managing Director, General Counsel & Secretary

6

EXHIBIT A

Copy of the Assignment

A-1

LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT

This Lease Assignment and Assumption Agreement (this “Agreement”) is hereby entered into as of the 2^nd day of January, 2006 by and between The MacGregor Group, Inc., a Delaware corporation (“Assignor”), and Investment Technology Group, Inc., a Delaware corporation (“Assignee”).

WHEREAS, Boston Wharf Co., a Massachusetts general partnership, and Assignor entered into that certain Lease (the “Lease”) dated as of August 15, 2000 with respect to a portion of the building located at and known as 321 Summer Street, Boston, Massachusetts.

WHEREAS, Assignor has agreed to assign to Assignee all of its right, title and interest in and to the Lease and the leasehold estate created thereby for the remaining term thereof and Assignee has agreed to accept such assignment and assume all of the obligations of the tenant under the Lease.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties hereto hereby agree as follows:

1.  As of January 3, 2006 (the “Effective Date”), Assignor hereby assigns to Assignee all of Assignor’s right, title and interest as tenant in and to the Lease and the leasehold estate created thereby for the remaining term thereof on and after the Effective Date.

2.  Assignee hereby accepts the within assignment effective as of the Effective Date and agrees to assume, be bound by and perform all of the obligations of the tenant under and pursuant to the terms and provisions of the Lease arising prior to, on or after the Effective Date.

IN WITNESS WHEREOF, Assignor and Assignee have executed this Lease Assignment and Assumption Agreement as a sealed instrument as of the date first above written.

ASSIGNOR: THE MACGREGOR GROUP, INC., a Delaware
corporation

By:	/s/ P. Mats Goebels
	Name: P. Mats Goebels
	Title: Director and Secretary

ASSIGNEE: INVESTMENT TECHNOLOGY GROUP, INC.,
a Delaware corporation

By:	/s/ P. Mats Goebels
	Name: P. Mats Goebels
	Title: Managing Director and Secretary

2

EX-10.31

Exhibit 10.31

LEASE

BETWEEN

BOSTON WHARF CO.

Landlord

AND

INVESTMENT TECHNOLOGY GROUP, INC.

Tenant

44 Farnsworth Street

Boston, Massachusetts

AGREEMENT OF LEASE

AGREEMENT OF LEASE made as of the 10 day of March, 1995, by and between BOSTON WHARF CO., a Massachusetts general partnership (hereinafter referred to as “Landlord”) and INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation (hereinafter referred to as “Tenant”).

WITNESSETH:

Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the entire ninth (9th) floor, as shown on Exhibit A attached hereto and made a part hereof (hereinafter referred to as the “Premises” or the “Demised Premises”) contained in the building known and numbered as 44 Farnsworth Street, Boston, Suffolk County, Massachusetts (hereinafter referred to as the “Building”).

1.REFERENCE DATA

Each reference in this Lease to any of the terms and titles contained in this Article shall be deemed and construed to incorporate the data stated following that term or title in this Article.

1)	Additional Rent:	Sums or other charges payable by Tenant to Landlord under this Lease, other than Yearly Fixed Rent.
2)	Broker:	Thompson, Doyle & Company, Inc. and The Codman Company, Inc.
3)	Business Day:	All days except Saturdays, Sundays, days defined as “legal holidays” for the entire state under the laws of the Commonwealth of Massachusetts, and such other days as Tenant presently or in the future recognizes as holidays for Tenant’s general staff.
4)	Land:	The parcel of land on which the Building is situated.
5)	Landlord’s Address:	253 Summer Street Boston, Massachusetts  02210
6)	Landlord’s Architect:	Any licensed architect designated by Landlord.
7)	Landlord’s Construction Contribution:	As defined in Secton 4.1.

8)	Landlord’s Additional Allowance:	As defined in Section 4.1.
9)	Lease Year:	A twelve (12) month period beginning on the Term Commencement Date and each succeeding twelve (12) month period during the Term of this Lease, except that if the Term Commencement Date shall be other than the first day of a calendar month, the first Lease Year shall include the partial calendar month in which the Term Commencement Date occurs as well as the succeeding twelve (12) full calendar months.
10)	Mortgage:	A mortgage, deed of trust, trust indenture, or other security instrument of record creating an interest in or affecting title to the Property or any part thereof or interest therein, and any and all renewals, modifications, consolidations or extensions of any such instrument.
11)	Mortgagee:	The holder of any Mortgage.
12)	Property:	The Land and Building.
13)	Rent:	Yearly Fixed Rent and Additional Rent.
14)	Rentable Area:	10,588 square feet.
15)	Tenant’s Address:	900 Third Avenue, New York, New York 10022
16)	Term Commencement Date:	As defined in Section 3.2.
17)	Term of this Lease:	As defined in Section 3.1.
18)	Termination Date:	As defined in Section 3.1.
19)	Use of Demised Premises:	General office purposes

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20)Yearly Fixed Rent:

With respect to the
following Lease Years:	Yearly Fixed Rent shall be:
First through Third	$	201,172.08
Fourth and Fifth	$	227,642.04
Sixth through Tenth	$	248,818.08

2.DESCRIPTION OF DEMISED PREMISES

2.1Demised Premises.  The Demised Premises are that portion of the Building as described above (as the same may from time to time be constituted after changes therein, additions thereto and eliminations therefrom pursuant to rights of Landlord hereinafter expressly reserved in Articles 8 and 18 and Section 15.2).

2.2Appurtenant Rights.  Tenant shall have, as appurtenant to the Demised Premises, rights to use in common with others entitled thereto, those common roadways, walkways, elevators, hallways and stairways necessary for access to that portion of the Building occupied by the Demised Premises.

2.3Reservations.  All the perimeter walls of the Demised Premises except the inner surfaces thereof, any space in or adjacent to the Demised Premises used for servicing other portions of the Building exclusively or in common with the Demised Premises, including without limitation (where applicable) shafts, stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, and the use thereof, as well as the right of access through the Demised Premises for the purpose of operation, maintenance, decoration and repair, are expressly reserved to Landlord.

3.TERM OF LEASE

3.1Term.  The Term of this Lease is ten (10) years (or until such Term shall sooner cease or expire) commencing on the Term Commencement Date and ending on the day immediately prior to the tenth (10th) anniversary thereof, except that if the Term Commencement Date is other than the first day of a calendar month, the Term of this Lease shall end on the last day of the calendar month in which said tenth (10th) anniversary occurs. The date on which the Term of this Lease is scheduled to expire is hereinafter referred to as the “Termination Date”.

3.2Term Commencement Date.  The Term Commencement Date shall be the earlier of (a) the date on which Tenant undertakes Use of the Demised Premises or any part thereof for the purpose set forth in Article 1, or (b) April 15, 1995.

3.3Option to Extend.  So long as this Lease remains in full force and effect without any default by Tenant beyond the

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applicable grace period, Tenant may extend the Term of this Lease for five (5) years by giving notice of such election to Landlord at least twelve (12) months prior to the originally-scheduled Termination Date.  Such extension shall be on the same terms and conditions set forth herein, subject to the provisions of Section 6.1, except that Tenant shall have no further option to extend said Term.

4.CONDITION OF DEMISED PREMISES

4.1Tenant’s Work.  Tenant shall accept the Demised Premises “as is” on the date hereof and Landlord shall have no obligation whatsoever to prepare the Demised Premises for occupancy by Tenant.  Any such work performed by Tenant shall be subject to the provisions of this Lease, including without limitation Articles 10 and 11.  Landlord shall pay to Tenant, upon written request from time to time (but not more frequently than monthly) and pro rata as such work progresses, an amount equal to the cost thereof not in excess of $317,640 (hereinafter referred to as “Landlord’s Construction Contribution”).  Any unused balance of Landlord’s Contribution plus an additional allowance in the amount of $21,176 (hereinafter referred to as “Landlord’s Additional Allowance”) may be applied to any other costs (including without limitation architectural, engineering, space planning and moving expenses) incurred by Tenant in relocating its business operations to the Demised Premises.  The disbursement of any portion of Landlord’s Construction Contribution or Landlord’s Additional Allowance shall be made within fifteen (15) days following the receipt by Landlord of invoices, receipts and other documentation evidencing to Landlord’s reasonable satisfaction the costs on account of which such disbursement has been requested, as well as releases and waivers of any mechanic’s and other liens for any labor or materials furnished as part of such work.  Any portion of Landlord’s Construction Contribution or Landlord’s Additional Allowance not paid within fifteen (15) days from the date when due in accordance with the foregoing provisions shall bear interest thereafter at a rate equal to one percent in excess of the so-called “prime rate” charged from time to time by the First National Bank of Boston, and may be deducted from installments of Yearly Fixed Rent next becoming due hereunder.

4.2Entry by Tenant; Interference With Construction. Tenant may enter the Demised Premises prior to the Term Commencement Date to undertake such work as is to be performed by Tenant pursuant to this Lease in order to prepare the Demised Premises for Tenant’s occupancy.  Such entry shall be deemed to be pursuant to a license from Landlord to Tenant and shall be at the risk of Tenant.  In no event shall Tenant interfere with any construction work being performed by or on behalf of Landlord in or around the Building; without limiting the generality of the foregoing, Tenant shall comply with all instructions issued by Landlord’s contractors relative to the moving of Tenant’s equipment and other property into the Demised Premises and shall pay any fees or costs imposed in connection therewith.

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5.USE OF PREMISES

5.1Permitted Use.  Tenant shall during the Term of this Lease occupy and use the Demised Premises for the permitted Use set forth in Article 1 and for no other purpose.  Service and utility areas (whether or not a part of the Demised Premises) shall be used only for the particular purpose for which they are designated.

5.2Prohibited Uses.  Tenant shall not use, or suffer or permit the use of, or suffer or permit anything to be done in or anything to be brought into or kept in, the Demised Premises or any part thereof (i) which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease, (ii) for any unlawful purposes or in any unlawful manner, or (iii) which, in the reasonable judgment of Landlord shall in any way (a) impair or tend to impair the appearance or reputation of the Building, (b) impair or interfere with or tend to impair or interfere with any of the Building services or the proper and economic heating, cleaning, air conditioning or other servicing of the Building or with the use of any of the other areas of the Building, or (c) occasion discomfort, inconvenience or annoyance to any of the other tenants or occupants of the Building, whether through the transmission of noise or odors or otherwise.  Without limiting the generality of the foregoing, no food shall be prepared or served for consumption by the general public on or about the Demised Premises; no intoxicating liquors or alcoholic beverages shall be sold or otherwise served for consumption by the general public on or about the Demised Premises; no lottery tickets (even where the sale of such tickets is not illegal) shall be sold and no gambling, betting or wagering shall otherwise be permitted on or about the Demised Premises; no machinery shall be operated in the Demised Premises if such operation involves vibratory motion of any kind perceptible outside the Demised Premises; no loitering shall be permitted on or about the Demised Premises; and no loading or unloading of supplies or other material to or from the Demised Premises shall be permitted on the Land except at times and in locations to be designated by Landlord.  The Demised Premises shall be maintained in a sanitary condition, and kept free of rodents and vermin. All trash and rubbish shall be suitably stored in the Demised Premises or other locations designated by Landlord from time to time.

5.3Licenses and Permits.  If any governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business, and if the failure to secure such license or permit would in any way affect Landlord, Tenant, at Tenant’s expense, shall duly procure and thereafter maintain such license or permit and submit the same to inspection by Landlord.  Tenant, at Tenant’s expense, shall at all times comply with the terms and conditions of each such license or permit.

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6.RENT

6.1Yearly Fixed Rent.  Tenant shall pay to Landlord, without any set-off or deduction (except as otherwise expressly provided herein), at Landlord’s office, or to such other person or at such other place as Landlord may designate by notice to Tenant, the Yearly Fixed Rent set forth in Article 1, provided however that, if Tenant duly exercises its option pursuant to Section 3.3 to extend the Term hereof, the Yearly Fixed Rent shall be increased effective as of the commencement of such extension period to reflect 95% of the fair market rental value of the Demised Premises for the balance of the Term of this Lease, taking into account (among other relevant criteria) rents charged for comparable office building space and Tenant’s obligations to pay Additional Rent and all other provisions of this Lease.  In no event shall said fair market rental value take into account any improvements made by Tenant to the Demised Premises (except to the extent funded by Landlord’s Construction Contribution), nor the fact that Landlord has no obligation to refurbish or renovate the Demised Premises at any time prior to or during such extension period.  Said fair market rental value shall be as determined in a notice given by Landlord to Tenant at least six (6) months prior to the commencement of such extension period, provided however that if Tenant notifies Landlord of its objection to said determination within ten (10) days after the giving of such notice by Landlord, and if Landlord and Tenant cannot mutually agree upon the same within seventy-five (75) days following receipt of Tenant’s objection, then in such event said fair market rental value shall be determined by appraisers, one to be chosen by Landlord, one to be chosen by Tenant, and a third to be selected by the two first chosen.  All appraisers chosen or selected hereunder shall be independent of the parties, shall have received the M.A.I. (Member, Appraisal Institute) designation from the American Institute of Real Estate Appraisers and shall have had at least five (5) years of experience in appraising office space in the downtown section of the City of Boston.  The unanimous written decision of the first two chosen, without selection and participation of a third appraiser, or otherwise the written decision of a majority of three appraisers chosen and selected as aforesaid, shall be conclusive and binding upon Landlord and Tenant.  Landlord and Tenant shall each notify the other of its chosen appraiser within ten (10) days following expiration of the aforesaid seventy-five (75) day period and, unless such two appraisers shall have reached a unanimous decision within thirty (30) days after having been chosen, they shall within a further ten (10) days elect a third appraiser and notify Landlord and Tenant thereof.  Each party shall bear the expense of the appraiser chosen by such party pursuant to this Section, and the parties shall equally share the expense of the third appraiser (if any).  If either party fails to notify the other of its chosen appraiser within thirty (30) days following expiration of the aforesaid seventy-five (75) day period, the other party’s determination of the Yearly Fixed Rent for such extension period shall be binding and conclusive for purposes hereof, and no further appraisal proceedings shall be required.

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If the Yearly Fixed Rent for such extension period shall not have been determined prior to the commencement thereof, Tenant shall continue to pay Yearly Fixed Rent at the rate most recently in effect, subject to retroactive adjustment once the Yearly Fixed Rent for such period has in fact been determined.  In no event shall the foregoing provision be construed so as to result in any reduction in the Yearly Fixed Rent payable by Tenant below $248,818.08.  Yearly Fixed Rent shall be paid in equal monthly installments in advance on or before the first Business Day of each calendar month during the Term of this Lease and shall be apportioned for any fraction of a month in which Yearly Fixed Rent first becomes payable or in which the last day of the Term of this Lease may fall.

6.2Taxes.  Tenant shall pay to Landlord as Additional Rent a proportionate share (as defined in Section 6.4) of all real estate taxes (including without limitation all betterment assessments, all fire service availability fees and similar charges for customary governmental services, all other charges in lieu of such taxes and any tax on any fixture installed in the Building, even if taxed as personal property) imposed against the Building and the Land, in excess of $230,685 (or, if higher, the amount of such taxes payable with respect to the calendar year ending December 31, 1995), pro-rated with respect to any portion of a fiscal year in which the Term of this Lease begins or ends. Such payments shall be due and payable in installments corresponding to those in which such taxes are payable by Landlord, and within twenty (20) days after Tenant shall have received a copy of the relevant tax bills.  If Landlord shall receive any refund of real estate taxes of which Tenant has paid a portion pursuant to this Section, then, out of any balance remaining after deducting Landlord’s reasonable expenses incurred in obtaining such refund, Landlord shall pay to Tenant the same proportionate share of said balance, prorated as set forth above. Tenant shall, if as and when demanded by Landlord and with each monthly installment of Yearly Fixed Rent, make tax fund payments to Landlord.  “Tax fund payments” refer to such payments as Landlord shall determine to be sufficient to provide in the aggregate a fund adequate to pay, when they become due and payable, all payments required from Tenant under this Section. In the event that said tax fund payments are so demanded, and if the aggregate of said tax fund payments is not adequate to pay Tenant’s share of such taxes, Tenant shall pay to Landlord the amount by which such aggregate is less than the amount of said share, such payment to be due and payable at the time set forth above.  Any surplus tax fund payments shall be accounted for to Tenant after payment by Landlord of the taxes on account of which they were made, and may be credited by Landlord against future Rent payments or promptly refunded to Tenant at Landlord’s option.

6.3Operating Expenses.  Tenant shall pay to Landlord as Additional Rent a proportionate share (as defined in Section 6.4) of all annual costs and expenses incurred by Landlord in the operation and maintenance of the Building and the Land in excess

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of $369,096 (or, if higher, the amount of such costs and expenses incurred with respect to the calendar year ending December 31, 1995), including, without limiting the generality of the foregoing, all such costs and expenses in connection with (1) insurance, sprinkler service, license fees, security, trash and rubbish removal, janitorial service, landscaping, and snow removal, (2) wages, salaries, management fees not in excess of those generally paid by the owners of comparable properties to unaffiliated third parties, employee benefits, payroll taxes, administrative and auditing expenses, and equipment and materials for the operation, management and maintenance of the Property, (3)any capital expenditure (amortized, with interest, in accordance with generally-accepted accounting principles on a so-called “useful life” basis) made by Landlord for the purpose of reducing other operating expenses or complying with any governmental requirement imposed after the date of this Lease, (4) the furnishing of heat, air conditioning, water and other utilities, (5) the operation and servicing of any computer system installed to regulate Building equipment, (6) the furnishing of the repairs and services referred to in Section 7.4, excluding expenditures incurred prior to the first anniversary of the Term Commencement Date on account of any such repair to the roof (including the existing skylight), structural components or common systems of the Building, (7) a reasonable reserve account and (8) unless operating expenses for a particular year include management fees, a supervisory and overhead fee which shall be in an amount equal to ten percent (10%) of all other such costs and expenses (the foregoing being hereinafter referred to as “operating expenses”).  Notwithstanding the foregoing, operating expenses shall not include the cost of any special work or service (including without limitation the furnishing of electricity for the operation of air conditioning equipment) provided to a particular tenant, unless likewise provided to Tenant hereunder.  If, during any portion of a fiscal year for which operating expenses are being computed pursuant to this Section, less than the entire rentable area of the Building is occupied or Landlord is not supplying all occupants with the same services being supplied hereunder, such costs and expenses shall be reasonably extrapolated in order to take into account the costs and expenses which would have been incurred had the entire rentable area of the Building been occupied and had such services been supplied to all occupants.  As soon as Tenant’s share of operating expenses with respect to any fiscal year established from time to time by Landlord can be determined, the same will be certified by Landlord to Tenant and will become payable to Landlord within thirty (30) days following such certification, subject to proration with respect to any portion of a fiscal year in which the Term of this Lease begins or ends or in the event that Landlord designates a different fiscal year.  Tenant shall, if as and when demanded by Landlord and with each monthly installment of Yearly Fixed Rent, make operating fund payments to Landlord.  “Operating fund payments” refer to such payments as Landlord shall determine to be sufficient to provide in the aggregate a fund adequate to pay, when they become due and payable, all payments required from Tenant under this Section.

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In the event that operating fund payments are so demanded, and if the aggregate of said operating fund payments is not adequate to pay Tenant’s share of operating expenses, Tenant shall pay to Landlord the amount by which such aggregate is less than the amount of said share, such payment to be due and payable at the time set forth above.  Any surplus operating fund payments shall be accounted for to Tenant after such surplus has been determined, and may be credited by Landlord against future Rent payments or promptly refunded to Tenant at Landlord’s option. Tenant may, at its expense and following reasonable advance notice to Landlord, inspect Landlord’s books and records relative to the computation of operating expenses and operating fund payments hereunder.  In the event that Current Operating Expenses exceed Prior Operating Expenses by more than the Threshold Amount, Tenant may, by notice given to Landlord no later than sixty (60) days following Landlord’s certification of such Current Operating Expenses pursuant to this Section, request a reduction of Tenant’s proportionate share thereof.  If Landlord does not allow such reduction in an amount satisfactory to Tenant within sixty (60) days following such notice, either party may, within thirty (30) days following said sixty (60) day period, refer the matter to arbitration in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association by a single arbitrator in Boston, Massachusetts, who shall, within thirty (30) days after his or her appointment, determine whether such Current Operating Expenses are unreasonable, taking into account costs and expenditures incurred for operating comparable office buildings.  A judgment upon the award rendered by such arbitrator may be entered in any court of competent jurisdiction.  All direct and reasonable costs of such arbitration, including the expense of the arbitrator but excluding any compensation paid to attorneys, agents, employees or witnesses of either party, shall be shared equally by Landlord and Tenant.  Any award to Tenant as a result of such arbitration shall be no greater than Tenant’s proportionate share of the amount by which Current Operating Expenses exceed the sum of Prior Operating Expenses and the Threshold Amount.  Landlord shall pay interest to Tenant on such award, at a rate equal to two percent (2%) in excess of the prime commercial lending rate from time to time established by The First National Bank of Boston, for the period from the date when Tenant paid the amount in question to Landlord until the date when said amount was refunded by Landlord in accordance with such award.  As used herein, the following terms shall be defined as hereinafter set forth:

(a)“Current Operating Expenses” shall mean operating expenses incurred with respect to 1996 or any subsequent calendar year (hereinafter referred to as the “Current Year”);

(b)“Prior Operating Expenses” shall mean operating expenses incurred with respect to the calendar year immediately preceding the

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Current Year, provided however that Prior Operating Expenses shall in no event be less than $369,096;

(c)“Threshold Amount” shall mean the amount calculated by multiplying Prior Operating Expenses times a percentage equal to two percent (2%) plus the percentage increase in the Price Index during the course of the Current Year; and

(d)“Price Index” shall mean the Consumer Price Index for All Urban Consumers, Boston, Mass., All Items (1982-84 = 100), as published by the Bureau of Labor Statistics of the United States Department of Labor or, if the publication of said Index shall be discontinued, any similar statistical index which is designated by Landlord and may be used for the purpose of measuring the cost of living in the Boston urban area.

6.4Tenant’s Proportionate Share.  Tenant’s proportionate share of taxes and operating expenses pursuant to Sections 6.2 and 6.3 shall be computed according to the ratio (i.e., 11.475%) between the Rentable Area of the Demised Premises (as defined in Article 1) and the total rentable area of all space in the Building (agreed to be 92,274 square feet).  Computations of rentable area other than in the Demised Premises shall be made by Landlord’s Architect, whose good faith determination shall be conclusive and binding on Tenant.

6.5Payment to Mortgagee.  Landlord reserves the right to provide in any Mortgage given by it of the Property that some or all rents, issues, and profits and all other amounts of every kind payable to the Landlord under this Lease shall be paid directly to the Mortgagee for Landlord’s account and Tenant covenants and agrees that it will, after receipt by it of notice from Landlord designating such Mortgagee to whom payments are to be made by Tenant, pay such amounts thereafter becoming due directly to such Mortgagee until excused therefrom by notice from such Mortgagee.

7.UTILITIES AND LANDLORD’S SERVICES

7.1Electricity.  Tenant shall purchase the electrical energy that Tenant requires for operation of the lighting fixtures, appliances and equipment (including without limitation all air conditioning equipment) servicing the Demised Premises. The costs of initially installing any required meter shall be paid by Landlord, but Tenant shall keep said meter and installation equipment in good working order and repair. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electrical energy furnished to the Demised Premises by reason of any requirement,

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act or omission of the public utility serving the Building with electricity unless due to the act or omission of Landlord. Tenant’s use of electrical energy in the Demised Premises shall not at any time exceed the capacity (agreed to be 16.5 watts per square foot) of any of the electrical conductors and equipment in or otherwise serving the Demised Premises.  In order to insure that such capacity is not exceeded and to avert possible adverse effect upon the Building electrical services Tenant shall give notice to Landlord and obtain Landlord’s prior written consent whenever Tenant shall connect to the Building electrical distribution system any fixtures, appliances or equipment other than lamps, typewriters and similar small machines.  Any additional feeders or risers to supply Tenant’s electrical requirements in addition to those originally installed and all other equipment proper and necessary in connection with such feeders or risers, shall be installed by Tenant at the sole cost and expense of Tenant, provided that such additional feeders and risers are permissible under applicable laws and insurance regulations and the installation of such feeders or risers has been approved in writing by Landlord in advance thereof and will not cause permanent damage or injury to the Building or cause or create a dangerous condition or unreasonably interfere with other tenants of the Building.  Tenant agrees that it will not make any alteration or material addition to the electrical equipment and/or appliances in the Demised Premises without the prior written consent of Landlord in each instance first obtained, which consent will not be unreasonably withheld and will promptly advise Landlord of any alteration or addition to such electrical equipment and/or appliances.  Tenant, at Tenant’s expense, shall purchase, install and replace all light fixtures, bulbs, tubes, lamps, lenses, globes, ballasts and switches used in the Demised Premises.

7.2Water Charges.  Landlord shall furnish hot and cold water for ordinary cleaning, toilet, kitchen, lavatory and drinking purposes to the extent required to service facilities approved by Landlord pursuant to Article 10.  If Tenant requires, uses or consumes water for any purpose other than for such purposes, Landlord may (i) assess a reasonable charge for the additional water so used or consumed by Tenant or (ii) install a water meter and thereby measure Tenant’s water consumption for all purposes.  In the latter event, Tenant shall pay the cost of the meter and the cost of installing any equipment required in connection therewith, and shall keep said meter and installation equipment in good working order and repair, and shall pay for water consumed, as shown on said meter, together with the sewer charge based on said meter charges, as and when bills are rendered.

7.3Heat and Air Conditioning.

(a)Landlord shall, through the equipment of the Building, furnish to and distribute in the Demised Premises heat as normal seasonal changes may require on Business Days from 8:00 a.m. to 6:00 p.m. and on Saturdays (excluding holidays) from 8:00

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a.m. until Noon when reasonably required for the comfortable occupancy of all portions of the Demised Premises by Tenant. Tenant agrees to cooperate fully with Landlord with regard to and abide by all regulations and requirements which Landlord may prescribe for the proper functioning and protection of the heating system.

(b)Landlord’s only obligation under this Lease with respect to the air conditioning of the Demised Premises is to maintain, repair and (when necessary) replace the Building equipment servicing the Demised Premises and to furnish chilled water therefor.  The distribution of air conditioning within the Demised Premises utilizes, as part of said equipment, handlers which are operated electrically at Tenant’s expense pursuant to Section 7.1.

(c)Landlord will, upon reasonable advance written notice from Tenant of its requirements, furnish additional heat or air conditioning service to the Demised Premises on days and at times other than as provided in this Article.  Tenant will pay to Landlord a reasonable charge (which shall be standard for all Building tenants and is currently calculated at an hourly rate per floor of $25.00 in the case of heat and $30.00 in the case of air conditioning) for any such additional heat or air conditioning service required by Tenant.

7.4Repairs and Other Services.  Except as otherwise provided in Articles 16 and 18, and subject to Tenant’s obligations in Article 12 and elsewhere in this Lease, Landlord shall (a) keep and maintain the roof (including the existing skylight), exterior walls, structural floor slabs and columns of the Building in good condition and repair, reasonable use and wear excepted, and maintain in good and workable condition the vertical buss ducts referenced in Section 27.9 as well as the common sanitary, electrical, heating, air conditioning and other systems of the Building, (b) provide cleaning services according to the cleaning standards set forth in Exhibit B attached hereto and made a part hereof, (c) keep all roadways, walkways and parking areas on the Property clean and remove all snow and ice therefrom, (d) replace windows whenever broken other than as a result of the act, omission, fault, negligence or misconduct of Tenant or Tenant’s agents, contractors, employees or invitees, (e) employ a guard to be stationed at the main entrance of the Building from 4:30 p.m. until Midnight on Business Days and (f) arrange for the extermination of vermin in the common areas of the Building.  In addition, Landlord shall complete the ongoing installation of a card system to regulate access to the main entrance and elevators of the Building no later than April 15, 1995 (in the case of said main entrance) and February 28, 1995 (in the case of said elevators).

7.5Interruption or Curtailment of Services.  Landlord reserves the right temporarily to interrupt, curtail, stop or suspend the furnishing of services and the operation of any Building system, when necessary by reason of accident or

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emergency, or of repairs, alterations, replacements or improvements in the reasonable judgment of Landlord desirable or necessary to be made, or of difficulty or inability in securing supplies or labor, or of strikes, or of any other cause beyond the reasonable control of Landlord, whether such other cause be similar or dissimilar to those hereinabove specifically mentioned, until said cause has been removed.  Landlord shall have no responsibility or liability for any such interruption, curtailment, stoppage, or suspension of services or systems, except that Landlord shall exercise reasonable diligence to eliminate the cause of same.

8.CHANGES OR ALTERATIONS BY LANDLORD

Landlord reserves the right, exercisable by itself or its nominee, at any time and from time to time without the same constituting an actual or constructive eviction and without incurring any liability to Tenant therefor or otherwise affecting Tenant’s obligations under this Lease, but subject to the applicable provisions of Section 15.2, to make such changes, alterations, additions, improvements, repairs or replacements in or to the Building (provided however that Landlord may not materially alter the approved layout of the Demised Premises) and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, elevators, and stairways thereof, as it may deem necessary or desirable, and to change the arrangement and/or location of entrances or passageways, doors and doorways, and corridors, elevators, stairs, toilets, or other public parts of the Building, provided, however, that there be no unreasonable obstruction of the right of access to, or unreasonable interference with the use and enjoyment of, the Demised Premises by Tenant, except that Landlord shall not (except in case of emergency) be obligated to employ labor at so-called “over-time” or other premium pay rates.  Nothing contained in this Article shall be deemed to relieve Tenant of any duty, obligation or liability which Tenant may have with respect to making or causing to be made any repair, replacement or improvement or complying with any law, order or requirement of any governmental or other authority.  Landlord reserves the right to from time to time change the address of the Building,  in which case Landlord shall reimburse all reasonable costs incurred by Tenant as a result of such change in order to replace stationery, business cards and the like and to notify clients of such change.

9.FIXTURES, EQUIPMENT AND IMPROVEMENTS - REMOVAL BY TENANT

All fixtures, equipment, improvements and appurtenances attached to or built into the Demised Premises prior to or during the Term, whether by Landlord at its expense or at the expense of Tenant (either or both) or by Tenant shall be and remain part of the Demised Premises and shall not be removed by Tenant at the end of the Term unless otherwise expressly provided in this Lease.  Where not built into the Demised Premises, and if furnished and installed by and at the sole expense of Tenant, all

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removable electric fixtures, air conditioning, drinking or tap water facilities, furniture, filing cabinets or trade fixtures or business equipment (hereinafter referred to as “Tenant’s Removable Property”) shall not be deemed to be included in such fixtures, equipment, improvements and appurtenances and may be, and upon the request of Landlord will be, removed by Tenant upon the condition that such removal shall not materially damage the Demised Premises or the Building and that the cost of repairing any damage to the Demised Premises or the Building arising from such removal shall be paid by Tenant, provided, however, that any of such items toward which Landlord shall have granted any allowance or credit to Tenant shall be deemed not to have been furnished and installed in the Demised Premises by or at the sole expense of Tenant.

10.ALTERATIONS AND IMPROVEMENTS BY TENANT

Tenant shall make no alterations, decorations, installations, removals, additions or improvements in or to the Demised Premises without Landlord’s prior written consent and then only by contractors approved by Landlord (including without limitation those contractors identified in Exhibit D attached hereto and made a part hereof).  No installations or other such work shall be undertaken or begun by Tenant until Landlord has approved written plans and specifications therefor; and no amendments or additions to such plans and specifications shall be made without prior written consent of Landlord.  Any such alterations, decorations, installations, removals, additions and improvements shall be done at the sole expense of Tenant and at such times and in such manner as Landlord may from time to time reasonably designate.  Any consent or approval required under this Article shall not be unreasonably withheld or delayed in the case of any proposed work of a non-structural nature which does not affect the common areas or facilities of the Property. Pursuant to the foregoing provisions, but subject to the receipt of reasonably acceptable engineering data, Landlord hereby consents to the work described in the plans and specifications referenced in Exhibit E attached hereto and made a part hereof (hereinafter referred to as “Tenant’s Initial Work”).  If Tenant shall make any alterations, decorations, installations, removals, additions or improvements, then Landlord may elect, at the time of consenting thereto, to require Tenant at the expiration of this Lease to restore the Demised Premises to substantially the same condition as existed at the Term Commencement Date. Landlord acknowledges that Landlord has not made such election with respect to any portion of Tenant’s Initial Work other than Tenant’s Removable Property.

11.TENANT’S CONTRACTORS – MECHANICS’ AND OTHER LIENS – STANDARD OF TENANT’S PERFORMANCE – COMPLIANCE WITH LAWS

Whenever Tenant shall make any alterations, decorations, installations, removals, additions or improvements or do any other work in or to the Demised Premises, Tenant will strictly observe the following covenants and agreements:

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(a)In no event shall any material or equipment be incorporated in or added to the Demised Premises in connection with any such alteration, decoration, installation, addition or improvement which is subject to any lien, charge, mortgage or other encumbrance of any kind whatsoever or is subject to any security interest or any form of title retention agreement.  Any mechanic’s lien filed against the Demised Premises or the Building for work claimed to have been done for, or materials claimed to have been furnished to Tenant shall be discharged by Tenant within ten (10) days after notice thereof, at the expense of Tenant, by filing the bond required by law or otherwise.  If Tenant fails so to discharge any lien, Landlord may do so at Tenant’s expense and Tenant shall reimburse Landlord for any expense or cost incurred by Landlord in so doing within fifteen (15) days after rendition of a bill therefor.

(b)All installations or work done by Tenant under this or any other Article of this Lease shall be at its own expense (unless expressly otherwise provided) and shall at all times comply with (i) laws, rules, orders and regulations of governmental authorities having jurisdiction thereof; (ii) orders, rules and regulations of any Board of Fire Underwriters, or any other body hereafter constituted exercising similar functions, and governing insurance rating bureaus; and (iii) plans and specifications prepared by and at the expense of Tenant theretofore submitted to Landlord for its prior written approval in accordance with the provisions of Article 10.

(c)Tenant shall procure all necessary permits before undertaking any work in the Demised Premises; do all such work in a good and workmanlike manner, employing materials of good quality and complying with all governmental requirements, and defend, save harmless, exonerate and indemnify Landlord from all injury, loss or damage to any person or property occasioned by or growing out of such work.

12.REPAIRS AND SECURITY BY TENANT

Subject to Landlord’s repair obligations hereunder, Tenant shall keep or cause to be kept all and singular the Demised Premises in good repair, order and condition, damage by fire or other casualty excepted.  Without limiting the generality of the foregoing, Tenant shall replace all windows and other glass, whenever broken as a result of the act, omission, fault, negligence or misconduct of Tenant or Tenant’s agents, contractors, employees or invitees, with glass of the same quality.

Tenant shall make, as and when needed as a result of misuse by, or neglect or improper conduct (including without limitation the placement of any equipment exceeding the floor load or causing vibrations perceptible outside the Demised Premises) of Tenant or Tenant’s servants, employees, agents, invitees or licensees or otherwise, all repairs in and about the Demised Premises necessary to preserve them in such repair, order and

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condition.

13.INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION

13.1Insurance.  Tenant shall procure, keep in force and pay for (a) Comprehensive Public Liability Insurance indemnifying Landlord, any managing agent designated by Landlord, Tenant and (whenever Landlord shall so request) any Mortgagee against all claims and demands for injury to or death of persons or damage to property which may be claimed to have occurred upon the Demised Premises in the amounts which shall at the time Tenant and/or its contractors enter the Demised Premises in accordance with Article 4 of this Lease be not less than One Hundred Thousand Dollars ($100,000) for property damage and Two Million Dollars ($2,000,000) for injury or death of one person or more than one person in a single accident, and from time to time thereafter shall be not less than such higher amounts, if procurable, as may be reasonably required by Landlord and are customarily carried by responsible office tenants in the Greater Boston area (provided however that Landlord may not require any such increase more than once during any thirty-six (36) month period) and (b) so-called contents and improvements insurance adequately insuring all property belonging to or removable by Tenant and situated in the Demised Premises.

13.2Certificates of Insurance.  Such insurance shall be effected with insurers authorized to do business in Massachusetts under valid and enforceable policies, and such policies shall name Landlord and Tenant and any additional parties designated by Landlord pursuant to Section 13.1 as the insureds, as their respective interests appear.  Such insurance shall provide that it shall not be cancelled without at least ten (10) days’ prior written notice to each insured named therein.  Prior to entry by Tenant and/or its contractors into the Demised Premises in accordance with Article 4 of this Lease, and thereafter not less than fifteen (15) days prior to the expiration date of each expiring policy, original copies of the policies provided for in Section 13.1 issued by the respective insurers, or certificates of such policies setting forth in full the provisions thereof and issued by such insurers together with evidence satisfactory to Landlord of the payment of all premiums for such policies, shall be delivered by Tenant to Landlord and certificates as aforesaid of such policies shall upon request of Landlord be delivered by Tenant to any additional parties designated by Landlord pursuant to Section 13.1 as the insureds.

13.3General.  Tenant will save Landlord harmless, and will exonerate and indemnify Landlord, from and against any and all claims, liabilities or penalties asserted by or on behalf of any person, firm, corporation or public authority:

(a)On account of or based upon any injury to person, or loss of or damage to property sustained or occurring on the Demised Premises on account of or based upon the act, omission, fault, negligence or misconduct of any person whomsoever (other

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than Landlord or its agents, contractors or employees);

(b)On account of or based upon any injury to person or loss of or damage to property, sustained or occurring elsewhere (other than on the Demised Premises) in or about the Building (and, in particular, without limiting the generality of. the foregoing on or about the elevators, stairways, public corridors, sidewalks or other appurtenances and facilities used in connection with the Building or Demised Premises) arising out of the use or occupancy of the Building or Demised Premises by Tenant, or any person claiming by, through or under Tenant;

(c)On account of or based upon (including moneys due on account of) any work or thing whatsoever done (other than by Landlord or its contractors, or agents or employees of either) in the Demised Premises; and

(d)On account of or resulting from the failure of Tenant to perform and discharge any of its covenants and obligations under this Lease;

and, in respect of any of the foregoing items (a) - (d), from and against all costs, expenses (including without limitation reasonable attorneys’ fees), and liabilities incurred in or in connection with any such claim, or any action or proceeding brought thereon; and in case any action or proceeding be brought against Landlord by reason of any such claim, Tenant upon notice from Landlord shall at Tenant’s expense resist or defend such action or proceeding and employ counsel therefor reasonably satisfactory to Landlord, it being agreed that such counsel as may act for insurance underwriters of Tenant engaged in such defense shall be deemed satisfactory.

13.4Property of Tenant.  In addition to and not in limitation of the foregoing, and subject only to the provisions of applicable law, Tenant covenants and agrees that all merchandise, furniture, fixtures and property of every kind, nature and description which may be in or upon the Demised Premises or the Building or the Land during the Term of this Lease shall be at the sole risk and hazard of Tenant, and that if the whole or any part thereof shall be damaged, destroyed, stolen or removed from any cause or reason whatsoever other than the negligence or misconduct of Landlord or its agents, contractors or employees, no part of said damage or loss shall be charged to, or borne by Landlord.

13.5Bursting of Pipes, etc.  Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, electrical disturbance, water, rain or snow or leaks from any part of the Building or from the pipes, appliances or plumbing works or from the roof, street or sub-surface or from any other place or caused by any other cause of whatever nature, unless caused by or due to the negligence of Landlord, its agents, contractors or employees, and then only after (i) notice to

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Landlord of the condition claimed to constitute negligence and (ii) the expiration of a reasonable time after such notice has been received by Landlord without such condition having been cured or corrected; nor shall Landlord or its agents be liable for any such damage caused by other tenants or persons in the Building or caused by operations in construction of any private, public or quasi-public work; nor shall Landlord be liable (subject only to its repair obligations hereunder) for any latent defect in the Demised Premises or in the Building.

13.6Landlord’s Liability Insurance.  Landlord shall keep in force liability insurance for its own benefit without any obligation to include Tenant as a named or additional insured party and without in any way limiting Tenant’s obligations pursuant to Section 13.1.  Any insurance maintained by Tenant pursuant to said Section shall be primary and non-contributing with respect to any policies carried by Landlord.

14.ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.

Tenant covenants and agrees that neither this Lease nor the term and estate hereby granted nor any interest herein or therein, will be assigned, mortgaged, pledged, encumbered or otherwise transferred (whether voluntarily or by operation of law), and that neither the Demised Premises, nor any part thereof, will be encumbered in any manner by reason of any act or omission on the part of Tenant, or used or occupied, or permitted to be used or occupied, or utilized for any reason whatsoever, by anyone other than Tenant, or for any use or purpose other than as stated in Article 1, or be sublet, without the prior written consent of Landlord in every case.  Such consent shall not, in the case of a proposed subletting, be unreasonably withheld or delayed.

In connection with any request by Tenant for such consent, Tenant shall submit to Landlord, in writing, a statement containing all of the terms and provisions upon which the proposed transaction is to occur.  If the rent received by Tenant on account of a proposed assignment or sublease requiring such consent exceeds the Yearly Fixed Rent and Additional Rent, allocated to the space subject to the assignment or sublease in the proportion of the area of such space to the area of the entire Demised Premises, plus actual out-of-pocket expenses incurred by Tenant in connection therewith, including brokerage commissions, marketing expenses and the cost of preparing such space for occupancy, Tenant shall pay to Landlord one hundred (100) percent of such excess, as received by Tenant. Notwithstanding the foregoing provisions of this paragraph and except as otherwise hereinafter set forth, in the event Tenant proposes to assign this Lease or enter into a sublease such that all or substantially all of the Demised Premises will have been sublet, Landlord, at Landlord’s option, may give to Tenant, within thirty (30) days after the submission by Tenant to Landlord of such proposal, a notice terminating this Lease on the date (referred to as the “Earlier Termination Date”) immediately

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prior to the effective date of the proposed assignment or the proposed commencement date of the term of the proposed subletting, as set forth in such proposal, and, in the event such notice is given, this Lease and the Term shall come to an end and expire on the Earlier Termination Date with the same effect as if it were the date originally fixed in this Lease for the end of the Term of this Lease, and the Rent shall be apportioned as of said Earlier Termination Date and any prepaid portion of Rent for any period after such date shall be refunded by Landlord to Tenant.

The failure by Landlord to exercise its option under this Article with respect to any assignment or subletting shall not be deemed a waiver of such option with respect to any extension of such sublease or any subsequent assignment or subletting.  Tenant shall reimburse Landlord promptly, as Additional Rent, for reasonable legal and other expense incurred by Landlord in connection with any request by Tenant for any consent required under the provisions of this Article.

Notwithstanding the foregoing, Tenant may, following notice to Landlord but without the requirement of obtaining Landlord’s consent or affording Landlord an opportunity to terminate this Lease, and so long as Tenant is not in default beyond the applicable grace or cure period at the time of such notice or at any time thereafter until the effective date of the assignment or the commencement date of the term of the subletting (as the case may be), assign this Lease or sublease all or any portion of the Demised Premises to any entity which is a parent, subsidiary or affiliate of Tenant or assign this Lease to any entity with which Tenant may merge or consolidate or which results from any such merger or consolidation or to which Tenant may sell all or substantially all of its assets as a going concern (such entity with which Tenant may merge or consolidate or which results from any such merger or consolidation or to which Tenant may sell all or substantially all of its assets as aforesaid being hereinafter referred to as a “Successor”), provided however that, forthwith upon any assignment allowed pursuant to this paragraph, Tenant shall deliver to Landlord an agreement in form and substance reasonably satisfactory to Landlord which contains an appropriate covenant of assumption by such assignee, and provided further that in the case of any such assignment to a Successor, such Successor shall have financial resources and a general business reputation comparable to those of Tenant as of the time of such assignment.

The listing of any name other than that of Tenant, whether on the doors of the Demised Premises or on the Building directory, or otherwise, shall not operate to vest any right or interest in this Lease or in the Demised Premises or be deemed to be the written consent of Landlord mentioned in this Article, it being expressly understood that any such listing is a privilege extended by Landlord revocable at will by written notice to Tenant.

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If this Lease be assigned, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may at any time and from time to time following any default by Tenant hereunder beyond the applicable grace period, collect rent and other charges from the assignee, subtenant or occupant, and apply the net amount collected to the Rent and other charges herein reserved, but no such collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as a tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained.  The consent by Landlord to an assignment or subletting or occupancy shall not in any way be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment or subletting or occupancy.

15.MISCELLANEOUS COVENANTS

15.1Rules and Regulations.  Tenant and Tenant’s servants, employees, agents, visitors and licensees will faithfully observe such Rules and Regulations as are attached hereto as Exhibit C and made a part hereof or as Landlord hereafter at any time or from time to time may make and may communicate in writing to Tenant and which in the reasonable judgment of Landlord shall be necessary for the reputation, safety, care or appearance of the Property, or the preservation of good order therein, or the operation or maintenance of the Property, or the equipment thereof, or the comfort of tenants or others in the Building, provided, however, that in the case of any conflict between the provisions of this Lease and any such Rules and Regulations, the provisions of this Lease shall control.  Such Rules and Regulations shall be applied in a non-discriminatory manner so as to be generally applicable to other tenants of the Building whose permitted business activities are comparable to those of Tenant hereunder, provided however that nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce such Rules and Regulations or the terms, covenants or conditions in any other lease as against any other tenant and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, visitors, invitees or licensees.  Notwithstanding any conflicting provisions of Exhibit C or any other Rules and Regulations, Tenant be entitled within the Demised Premises to make use of microwave ovens and other food preparation equipment not requiring exterior venting.

15.2Access to Premises – Shoring.  Tenant shall: (i) permit Landlord to erect, use and maintain pipes, ducts and conduits in and through the Demised Premises, provided the same do not materially reduce the floor area or materially adversely affect the appearance thereof and are concealed wherever practicable below floors, above finished ceilings or beyond finished walls; (ii) permit the Landlord and any Mortgagee to have free and unrestricted access to and to enter upon the Demised Premises at all reasonable hours upon prior oral or

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written notice (except in case of emergency) for the purposes of inspection or of making repairs, replacements or improvements in or to the Demised Premises or the Building or equipment (including, without limitation, sanitary, electrical, heating, air conditioning or other systems) or of complying with all laws, orders and requirements of governmental or other authority or of exercising any right reserved to Landlord by this Lease (including the right during the progress of any such repairs, replacements or improvements or while performing work and furnishing materials in connection with compliance with any such laws, orders or requirements to take upon or through, or to keep and store within, the Demised Premises all necessary materials, tools and equipment); and (iii) permit Landlord, at reasonable times upon prior oral or written notice, to show the Demised Premises during ordinary business hours to any Mortgagee, prospective purchaser of any interest of Landlord in the Property, prospective Mortgagee, or prospective assignee of any Mortgage, and during the period of twelve months next preceding the Termination Date to any person contemplating the leasing of the Demised Premises or any part thereof.  If Tenant shall not be personally present to open and permit any entry into the Demised Premises at any time when for any reason an entry therein shall be necessary or permissible following notice (to the extent hereinabove required), Landlord or Landlord’s agents must nevertheless be able to gain such entry by contacting a responsible representative of Tenant, whose name, address and telephone number shall be furnished by Tenant, or (at Landlord’s election) by using keys to the Demised Premises in Landlord’s possession.  Locks serving the Demised Premises shall not be altered or replaced, nor shall new locks be added by Tenant without the prior written consent of Landlord in every case (which consent shall not be unreasonably withheld or delayed). Provided that Landlord shall (except in case of emergency) incur no additional expense thereby, Landlord shall exercise its rights of access to the Demised Premises permitted under any of the terms and provisions of this Lease (including Landlord’s right to keep and store materials, tools and equipment therein as hereinabove set forth) in such manner as to minimize to the extent practicable interference with Tenant’s use and occupation of the Demised Premises.  If an excavation shall be made upon land adjacent to the Demised Premises or shall be authorized to be made, Tenant shall afford, to the person causing or authorized to cause such excavation (subject to the same provisions applicable hereunder in the case of work to be performed by Landlord), license to enter upon the Demised Premises for the purpose of doing such work as said person shall deem necessary to preserve the Building from injury or damage and to support the same by proper foundations without any claim for damage or indemnity against Landlord, or diminution or abatement of Rent.

15.3Accidents to Sanitary and other Systems.  Tenant shall give to Landlord prompt notice of any fire or accident in the Demised Premises or in the Building and of any damage to, or defective condition in, any part or appurtenance of the Building’s systems located in, or passing through, the Demised

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Premises.

15.4Signs, Blinds and Drapes.  Tenant shall not place any signs on the exterior of the Building or on or in any window, public corridor or door visible from the exterior of the Demised Premises.  Landlord shall include Tenant’s name (together with the names of up to seven (7) authorized subtenants and/or individuals having offices in the Demised Premises) in any standard Building directory maintained by Landlord and shall affix, or permit Tenant to affix, signage outside the main entryway of the Demised Premises identifying Tenant as an occupant thereof, provided however that the exact size, design and location of any such sign shall be subject to Landlord’s prior approval.  No blinds may be put on or in any window nor may any Building drapes or blinds be removed by Tenant.  Tenant may hang its own drapes, provided that they shall not, without the prior written approval of Landlord, in any way interfere with any Building drapery or blinds or be visible from the exterior of the Building.

15.5Estoppel Certificate.  Tenant shall at any time and from time to time upon not less than ten (10) days’ prior notice by Landlord to Tenant, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), and the dates to which Rent has been paid in advance, if any, and stating whether or not to the best knowledge of the signer of such certificate Landlord is in default in performance of any covenant, agreement, term, provisions or condition contained in this Lease and, if so, specifying each such default of which the signer may have knowledge, it being intended that any such statement delivered pursuant hereto may be relied upon by any prospective purchaser of any interest of Landlord in the Property, any Mortgagee or prospective Mortgagee, any prospective assignee of any Mortgage, or any other party reasonably designated by Landlord.

15.6Prohibited Items.  Tenant shall not bring or permit to be brought or kept in or on the Demised Premises or elsewhere in the Building any hazardous, inflammable, combustible or explosive fluid, material, chemical or substance (except such as are related to Tenant’s use of the Demised Premises, provided that the same are stored and handled in a proper fashion consistent with applicable legal standards).

15.7Requirements of Law – Fines and Penalties.  Tenant at its sole expense shall comply with all laws, rules, orders and regulations of Federal, State, County and Municipal Authorities and with any direction of any public officer or officers, pursuant to law, which shall impose any duty upon Landlord or Tenant with respect to and arising out of Tenant’s use or occupancy of the Demised Premises, provided however that Landlord shall be responsible for compliance therewith to the extent necessary to allow the continued use of the Demised Premises for

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general office purposes.  In particular, Tenant shall be responsible for compliance with requirements imposed by the Americans with Disabilities Act relative to the layout of the Demised Premises and any work performed by Tenant therein, including without limitation all such requirements applicable to removing barriers, furnishing auxiliary aids and insuring that, whenever alterations are made, the affected portions of the Demised Premises are readily accessible to and usable by individuals with disabilities.  Notwithstanding the foregoing, Landlord shall be responsible for compliance with any requirements imposed by said Act relative to the entryways, elevators and other common areas of the Property.  If Tenant receives notice of any violation of law, ordinance, order or regulation applicable to the Demised Premises, it shall give prompt notice thereof to Landlord.

15.8Tenant’s Acts – Effect on Insurance.  Tenant shall not do or permit to be done any act or thing upon the Demised Premises or elsewhere in the Building which will invalidate or be in conflict with any insurance policies covering the Building and the fixtures and property therein and shall not do, or permit to be done, any act or thing upon the Demised Premises which shall subject Landlord to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation being conducted on the Demised Premises or for any other reason.  Tenant at its own expense shall comply with all rules, orders, regulations or requirements of the Board of Fire Underwriters or any other similar body having jurisdiction, and shall not (i) do, or permit anything to be done, in or upon the Demised Premises, or bring or keep anything therein, except as now or hereafter permitted by the Fire Department, Board of Underwriters, Fire Insurance Rating Organization, or other authority having jurisdiction, and then only in such quantity and manner of storage as will not increase the rate for any insurance applicable to the Building, or (ii) use the Demised Premises in a manner which shall increase such insurance rates on the Building or on property located therein, over that applicable when Tenant first took occupancy of the Demised Premises hereunder (unless Tenant pays such increase).  If by reason of failure of Tenant to comply with the provisions hereof the insurance rate applicable to any policy of insurance shall at any time thereafter be higher than it otherwise would be, then Tenant shall reimburse Landlord for that part of any insurance premiums thereafter paid by Landlord, which shall have been charged because of such failure by Tenant.  Landlord acknowledges that the installation and use of a generator in accordance with Section 27.9 will not violate the provisions of this Section or require Tenant to pay any increased insurance premiums hereunder.

15.9Miscellaneous.  Tenant shall not suffer or permit the Demised Premises or any fixtures, equipment or utilities therein or serving the same, to be overloaded, damaged or defaced.

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16.DAMAGE BY FIRE, ETC.

Landlord shall keep in force casualty insurance with respect to the Building in an amount approximately equal to the full replacement cost thereof.  Such insurance shall afford protection against fire and the other perils customarily covered by a so-called “all risk” policy.

In the event of loss of, or damage to, the Demised Premises or the Building by fire or other casualty, the rights and obligations of the parties hereto shall be as follows:

(a)If the Demised Premises, or any part thereof, shall be damaged by fire or other casualty, Tenant shall give prompt notice thereof to Landlord, and Landlord, upon receiving such notice, shall proceed promptly and with due diligence, subject to unavoidable delays, to repair, or cause to be repaired, such damage.  If the Demised Premises or any part thereof shall be rendered untenantable by reason of such damage, whether to the Demised Premises or to the Building, Yearly Fixed Rent and Additional Rent payable pursuant to Sections 6.2 and 6.3 shall proportionately abate for the period from the date of such damage to the date when such damage shall have been repaired.

(b)If, as a result of fire or other casualty, the whole or a substantial portion of the Building or the Demised Premises is rendered untenantable, Landlord, within ninety (90) days from the date of such fire or casualty, may terminate this Lease by notice to Tenant, specifying a date not less than twenty (20) nor more than forty (40) days after the giving of such notice on which the Term of this Lease shall terminate.  If Landlord does not so elect to terminate this Lease, then Landlord shall proceed with diligence to repair the damage to the Demised Premises and all facilities serving the same, if any, which shall have occurred, and the Yearly Fixed Rent and Additional Rent payable pursuant to Sections 6.2 and 6.3 shall meanwhile proportionately abate, all as provided in Paragraph (a) of this Section.  However, if such damage is not repaired and the Demised Premises restored to substantially the same condition as they were prior to such damage within six (6) months from the date of such damage, Tenant within thirty (30) days from the expiration of such six (6) month period or from the expiration of any extension thereof by reason of unavoidable delays as hereinafter provided, may terminate this Lease by notice to Landlord, specifying a date not more than sixty (60) days after the giving of such notice on which the Term of this Lease shall terminate. The period within which the required repairs may be accomplished shall be extended by the number of days, not to exceed ninety (90) days, lost as a result of unavoidable delays, which term shall be defined to include all delays referred to in Article 24.

(c)If the Demised Premises shall be rendered untenantable by fire or other casualty during the last year of the Term of this Lease, either party may terminate this Lease effective as of the date of such fire or other casualty upon

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notice to the other given within thirty (30) days after such fire or other casualty.

(d)Landlord shall not be required to repair or replace any of Tenant’s business machinery, equipment, cabinet work, furniture, personal property or other installations made by Tenant (all of which shall, however, be restored by Tenant within a reasonable time after Landlord shall have completed any repair or restoration required under the terms of this Article), and no damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the Demised Premises or of the Building.  Any insurance proceeds received by Tenant in connection with such loss or damage shall be applied by Tenant to such repair or restoration to the extent reasonably necessary to accomplish the same.

(e)The provisions of this Article shall be considered an express agreement governing any instance of damage or destruction of the Building or the Demised Premises by fire or other casualty, and any law now or hereafter in force providing for such a contingency in the absence of express agreement shall have no application.

(f)In the event of any termination of this Lease pursuant to this Article, the Term of this Lease shall expire as of the effective termination date as fully and completely as if such date were the date herein originally scheduled as the Termination Date.

(g)Landlord’s Architect’s certificate, given in good faith, shall be deemed conclusive of the statements therein contained and binding upon Tenant with respect to the performance and completion of any repair or restoration work undertaken by Landlord pursuant to this Article or Article 18.

17.WAIVER OF SUBROGATION

In any case in which Tenant shall be obligated under any provision of this Lease to pay to Landlord any loss, cost, damage, liability, or expense suffered or incurred by Landlord, Landlord shall allow to Tenant as an offset against the amount thereof (i) the net proceeds of any insurance collected by Landlord for or on account of such loss, cost, damage, liability or expense, provided that the allowance of such offset does not invalidate or prejudice the policy or policies under which such proceeds were payable and (ii) if such loss, cost, damage, liability or expense shall have been caused by a peril against which Landlord has agreed to procure insurance coverage under the terms of this Lease, the amount of such insurance coverage, if not actually procured by Landlord.

In any case in which Landlord shall be obligated under any provision of this Lease to pay to Tenant any loss, cost, damage, liability or expense suffered or incurred by Tenant, Tenant shall

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allow to Landlord as an offset against the amount thereof (i) the net proceeds of any insurance collected by Tenant for or on account of such loss, cost, damage, liability, or expense, provided that the allowance of such offset does not invalidate the policy or policies under which such proceeds were payable and (ii) if such loss, cost, damage, liability or expense shall have been caused by a peril against which Tenant has agreed to procure insurance coverage under the terms of this Lease, the amount of such insurance coverage, if not actually procured by Tenant.

The parties hereto shall each endeavor to procure an appropriate clause in, or endorsement on, any fire or extended coverage insurance policy covering the Demised Premises and the Building and personal property, fixtures and equipment located thereon or therein, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery, and having obtained such clauses and/or endorsements of waiver of subrogation or consent to a waiver of right of recovery each party hereby agrees that it will not make any claim against or seek to recover from the other for any loss or damage to its property or the property of others resulting from fire or other perils covered by such fire and extended coverage insurance; provided, however, that the release, discharge, exoneration and covenant not to sue herein contained shall be limited by the terms and provisions of the waiver of subrogation clauses and/or endorsements or clauses and/or endorsements consenting to a waiver of right of recovery and shall be co-extensive therewith. If either party may obtain such clause or endorsement only upon payment of an additional premium, such party shall promptly so advise the other party and shall be under no obligation to obtain such clause or endorsement unless such other party pays the premium.

18.CONDEMNATION – EMINENT DOMAIN

In the event that the whole or any part of the Building shall be taken or appropriated by eminent domain or shall be condemned for any public or quasi-public use, or (by virtue of any such taking, appropriation or condemnation) shall suffer any damage (direct, indirect or consequential) for which Landlord or Tenant shall be entitled to compensation then (and in any such event) this Lease and the Term hereof may be terminated at the election of Landlord by a notice in writing of its election so to terminate which shall be given by the Landlord to Tenant within sixty (60) days following the date on which Landlord shall have received notice of such taking, appropriation or condemnation. In the event that a substantial part of the Demised Premises or of the means of access thereto within the perimeter of the Property shall be so taken, appropriated or condemned, then (and in any such event) this Lease and the Term hereof may be terminated at the election of Tenant by a notice in writing of its election so to terminate which shall be given by Tenant to Landlord within sixty (60) days following the date on which Tenant shall have received notice of such taking, appropriation or condemnation.

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Upon the giving of any such notice of termination (either by Landlord or Tenant) this Lease and the Term hereof shall terminate on or retroactively as of the date on which Tenant shall be required to vacate any part of the Demised Premises or shall be deprived of a substantial part of the means of access thereto, provided, however, that Landlord may in Landlord’s notice elect to terminate this Lease and the Term hereof retroactively as of the date on which such taking, appropriation or condemnation became legally effective.  In the event of any such termination, this Lease and the Term hereof shall expire as of the effective termination date as fully and completely as if such date were the date herein originally scheduled as the Termination Date.  If neither party (having the right so to do) elects to terminate Landlord will, with reasonable diligence and at Landlord’s expense, restore the remainder of the Demised Premises, or the remainder of the means of access, as nearly as practicably may be to the same condition as obtained prior to such taking, appropriation or condemnation in which event (i) a just proportion of the Yearly Fixed Rent and Additional Rent payable pursuant to Sections 6.2 and 6.3, according to the nature and extent of the taking, appropriation or condemnation and the resulting permanent injury to the Demised Premises and the means of access thereto, shall be permanently abated, and (ii) a just proportion of the remainder of the Yearly Fixed Rent and Additional Rent payable pursuant to Sections 6.2 and 6.3, according to the nature and extent of the taking, appropriation or condemnation and the resultant injury sustained by the Demised Premises and the means of access thereto, shall be abated until what remains of the Demised Premises and the means of access thereto shall have been restored as fully as may be for permanent use and occupation by Tenant hereunder.  Except for any award specifically reimbursing Tenant for moving or relocation expenses, there are expressly reserved to Landlord all rights to compensation and damages created, accrued or accruing by reason of any such taking, appropriation or condemnation, in implementation and in confirmation of which Tenant does hereby acknowledge that Landlord shall be entitled to receive and retain all such compensation and damages, grants to Landlord all and whatever rights (if any) Tenant may have to such compensation and damages, and agrees to execute and deliver all and whatever further instruments of assignment as Landlord may from time to time request.  In the event of any taking of the Demised Premises or any part thereof for temporary use, (i) this Lease shall be and remain unaffected thereby, and (ii) Tenant shall be entitled to receive for itself any award made for such use, provided, that if any taking is for a period extending beyond the Term of this Lease, such award shall be apportioned between Landlord and Tenant as of the Termination Date.

19.DEFAULT

19.1Conditions of Limitation – Re-entry – Termination. This Lease and the herein term and estate are upon the condition that if (a) Tenant shall neglect or fail to perform or observe any of the Tenant’s covenants herein, including (without

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limitation) the covenants with regard to the payment when due of Rent; or (b) Tenant shall be involved in financial difficulties as evidenced by an admission in writing by Tenant of Tenant’s inability to pay its debts generally as they become due, or by the making or offering to make a composition of its debts with its creditors; or (c) Tenant shall make an assignment or trust mortgage, or other conveyance or transfer of like nature, of all or a substantial part of its property for the benefit of its creditors; or (d) the leasehold hereby created shall be taken on execution or by other process of law and shall not be revested in Tenant within sixty (60) days thereafter; or (e) a receiver, sequester, trustee or similar officer shall be appointed by a court of competent jurisdiction to take charge of all or a substantial part of Tenant’s property and such appointment shall not be vacated within sixty (60) days; or (f) any proceeding shall be instituted by or against Tenant pursuant to any of the provisions of any Act of Congress or State law relating to bankruptcy, reorganization, arrangements, compositions or other relief from creditors, and, in the case of any such proceeding instituted against it, if Tenant shall fail to have such proceeding dismissed within thirty (30) days or if Tenant is adjudged bankrupt or insolvent as a result of any such proceeding; or (g) any event shall occur or any contingency shall arise whereby this Lease, or the term and estate thereby created, would (by operation of law or otherwise) devolve upon or pass to any person, firm or corporation other than Tenant, except as expressly permitted under Article 14 hereof - then, and in any such event (except as hereinafter in Article 19.2 otherwise provided) Landlord may, in a manner consistent with applicable law, immediately or at any time thereafter declare this Lease terminated by notice to Tenant, in which case (and without prejudice to any remedies which might otherwise be available for arrears of Rent or preceding breach of covenant and without prejudice to Tenant’s liability for damages as hereinafter stated), this Lease shall terminate.  As used in items (b), (c), (e) and (f) of this Section, the term “Tenant” shall also be deemed to refer to any guarantor of Tenant’s obligations hereunder.

19.2Damages – Assignment for Benefit of Creditors.

[Intentionally Omitted]

19.3Damages – Termination.  Upon the termination of this Lease under the provisions of this Article, then except as hereinabove in Section 19.2 otherwise provided, Tenant shall pay to Landlord the Rent payable by Tenant to Landlord up to the time of such termination, shall continue to be liable for any preceding breach of covenant, and in addition, shall pay to Landlord as damages, at the election of Landlord

either:

(x)  the amount by which, at the time of the termination of this Lease (or at any time thereafter if Landlord shall have initially elected damages under Subparagraph (y), below), (i) the aggregate of the Rent projected over the period

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commencing with such time and ending on the originally-scheduled Termination Date as stated in Article 1 exceeds (ii) the aggregate projected rental value of the Demised Premises for such period,

or,

(y)  amounts equal to the Rent which would have been payable by Tenant had this Lease not been so terminated, payable upon the due dates therefor specified herein following such termination and until the originally-scheduled Termination Date as specified in Article 1, provided, however, if Landlord shall re-let the Demised Premises during such period, that Landlord shall credit Tenant with the net rents received by Landlord from such re-letting, such net rents to be determined by first deducting from the gross rents as and when received by Landlord from such re-letting the expenses incurred or paid by Landlord in terminating this Lease, as well as the expenses of re-letting, including altering and preparing the Demised Premises for new tenants, brokers’ commissions, and all other similar and dissimilar expenses properly chargeable against the Demised Premises and the rental therefrom, it being understood that any such re-letting may be for a period equal to or shorter or longer than the remaining term of this Lease; and provided, further, that (i) in no event shall Tenant be entitled to receive any excess of such net rents over the sums payable by Tenant to Landlord hereunder and (ii) in no event shall Tenant be entitled in any suit for the collection of damages pursuant to this Subparagraph (y) to a credit in respect of any net rents from a re-letting except to the extent that such net rents are actually received by Landlord.  If the Demised Premises or any part thereof should be re-let in combination with other space, then proper apportionment on a square foot area basis shall be made of the rent received from such re-letting and of the expenses of re-letting.  Landlord shall endeavor in good faith to mitigate damages payable pursuant to the provisions of this subparagraph.

Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the term of this Lease would have expired if it had not been terminated hereunder.

Nothing herein contained shall be construed as limiting or precluding the recovery by Landlord against Tenant of any sums or damages to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any default hereunder on the part of Tenant.

19.4Fees and Expenses. If Tenant shall default in the performance of any covenant on Tenant’s part to be performed as in this Lease contained, Landlord may immediately, or at any time thereafter, subject (except in case of emergency) to notice and expiration of the applicable grace period, perform the same for the account of Tenant. If Landlord at any time is compelled to pay or elects to pay any sum of money, or do any act which will

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require the payment of any sum of money, by reason of the failure of Tenant to comply with any provision hereof, or if Landlord is compelled to or does incur any expense, including without limitation reasonable attorneys’ fees, in instituting, prosecuting and/or defending any action or proceeding arising by reason of any default of Tenant hereunder, Tenant shall on demand pay to Landlord by way of reimbursement the sum or sums so paid by Landlord.  Without limiting the generality of the foregoing, in the event that any Rent is more than ten (10) days in arrears, Tenant shall pay, as Additional Rent, a delinquency charge equal to two and one-half percent (2-1/2%) of the arrearage for each calendar month (or fraction thereof) during which it remains unpaid.

19.5Landlord’s Remedies Not Exclusive.  The specified remedies to which Landlord may resort hereunder are cumulative and are not intended to be exclusive of any remedies or means of redress to which Landlord may at any time be lawfully entitled, and Landlord may invoke any remedy (including without limitation the remedy of specific performance) allowed at law or in equity as if specific remedies were not herein provided for.

19.6Grace Period.  Notwithstanding anything to the contrary in this Article contained, Landlord agrees that this Lease will not terminate and that Landlord will not take any action to terminate this Lease (a) for default by Tenant in the payment when due of Rent, if Tenant shall cure such default within ten (10) days after written notice thereof given by Landlord to Tenant, or (b) for default by Tenant in the performance of any other covenant, if Tenant shall cure such default within a period of thirty (30) days after written notice thereof given by Landlord to Tenant (except where the nature of the default is such that remedial action should appropriately take place sooner, as indicated in such written notice), or with respect to covenants other than to pay a sum of money within such additional period as may reasonably be required to cure such default if (because of governmental restrictions or any other cause beyond the reasonable control of Tenant) the default is of such a nature that it cannot be cured within such thirty (30)-day period, provided, however, (1) that there shall be no extension of time beyond such thirty (30)-day period for the curing of any such default unless, not more than twenty-five (25) days after the receipt of the notice of default, Tenant in writing (i) shall specify the cause on account of which the default cannot be cured during such period and shall advise Landlord of its intention duly to institute all steps necessary to cure the default and (ii) shall as soon as may be reasonable duly institute and thereafter diligently prosecute to completion all steps necessary to cure such default and, (2) that no notice of the opportunity to cure a default need be given, and no grace period whatsoever shall be allowed to Tenant, if the covenant or condition the breach of which gave rise to the default had, by reason of a breach on a prior occasion during the preceding twelve (12) month period, been the subject of a notice hereunder to cure such default.

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20.END OF TERM - ABANDONED PROPERTY

Upon the expiration or other termination of the Term of this Lease, Tenant shall peaceably quit and surrender to Landlord the Demised Premises and all alterations and additions thereto which Tenant is not entitled or required to remove under the provisions of this Lease, broom clean in good order, repair and condition excepting only reasonable use and wear and damage by fire or other casualty for which, under other provisions of this Lease, Tenant has no responsibility of repair or restoration.  Tenant’s obligation to observe or perform this covenant shall survive the expiration or other termination of the Term of this Lease.  If the last day of the Term of this Lease or any renewal thereof falls on a day other than a Business Day, this Lease shall expire on the Business Day immediately preceding.

Any personal property in which Tenant has an interest which shall remain in the Building or on the Demised Premises after the expiration or termination of the Term of this Lease shall be conclusively deemed to have been abandoned, and may be disposed of in such manner as Landlord may see fit; provided, however, notwithstanding the foregoing, that Tenant will, upon request of Landlord made not later than thirty (30) days after the expiration or termination of the Term hereof, promptly remove from the Building any such personal property or, if any part thereof shall be sold, that Landlord may receive and retain the proceeds of such sale and apply the same, at its option, against the expenses of the sale, the cost of moving and storage, any arrears of Rent payable hereunder by Tenant to Landlord and any damages to which Landlord may be entitled under Article 19 hereof or pursuant to law, with the balance if any, to be paid to Tenant.

21.RIGHTS OF MORTGAGEES

21.1Superiority of Lease.  Except to the extent that it may be provided otherwise by written agreement between Tenant and a Mortgagee, this Lease shall be superior, and shall not be subordinated, to a Mortgage or to any other voluntary lien or encumbrance affecting the Land or Building or any part thereof and hereafter granted by Landlord.  Any Mortgagee shall have the right, at its option, to subordinate its Mortgage to this Lease, in whole or in part, by recording a unilateral declaration to such effect.

21.2Entry and Possession.  Upon entry and taking possession of the Property by a Mortgagee, for the purpose of foreclosure or otherwise, such Mortgagee shall have all the rights of Landlord, and shall be liable to perform all the obligations of Landlord arising during the period of such possession, provided, however, that upon the return of possession to Landlord by such Mortgagee, such rights and obligations of Mortgagee shall cease until a subsequent entry.

21.3Right to Cure.  No act or failure to act on the part of

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Landlord which would entitle Tenant under the terms of this Lease, or by law, to be relieved of Tenant’s obligations hereunder or to terminate this Lease, shall result in a release or termination of such obligations or a termination of this Lease unless (i) Tenant shall have first given written notice of Landlord’s act or failure to act to first Mortgagees of record, if any, and to any other Mortgagees of whom Tenant has been given written notice, specifying the act or failure to act on the part of Landlord which could or would give basis to Tenant’s rights; and (ii) such Mortgagees, after receipt of such notice, have failed or refused to correct or cure the condition complained of within a reasonable time thereafter, but nothing contained in this paragraph shall be deemed to impose any obligation on any such Mortgagees to correct or cure any such condition. “Reasonable time” as used above means and includes a reasonable time to obtain possession of the Land and Building if any such Mortgagee elects to do so and a reasonable time to correct or cure the condition if such condition is determined to exist, provided that such Mortgagee shall investigate the condition complained of within thirty (30) days after notice thereof and thereafter pursue any required corrective action with all due diligence.

21.4Prepaid Rent.  No Rent shall be paid more than thirty (30) days prior to the due dates thereof and, as to a first Mortgagee of record and any other Mortgagees of whom Tenant has been given written notice, payments made in violation of this provision shall (except to the extent that such rents are actually received by such Mortgagee) be a nullity as against such Mortgagee and Tenant shall be liable for the amount of such payments to such Mortgagee.

21.5Continuing Offer.  The covenants and agreements contained in this Lease with respect to the rights, powers and benefits of a Mortgagee (particularly, without limitation thereby, the covenants and agreements contained in this Article) constitute a continuing offer to any person, corporation or other entity, which by accepting or requiring an assignment of this Lease or by entry or foreclosure assumes the obligations herein set forth with respect to such Mortgagee; every such Mortgagee is hereby constituted a party to this Lease as an obligee hereunder to the same extent as though its name was written hereon as such; and such Mortgagee shall be entitled to enforce such provisions in its own name.

21.6Subordination.  Notwithstanding the foregoing provisions of this Article, Tenant agrees, at Landlord’s request, to execute and deliver promptly any certificate or other instrument which Landlord may request subordinating this Lease and all rights of Tenant hereunder to any Mortgage, and to all advances made under such Mortgage and/or agreeing to attorn to such Mortgagee in the event that it succeeds to Landlord’s interest in the Property, provided that (i) the holder of any such Mortgage shall execute and deliver to Tenant a non-disturbance agreement to the effect that, in the event of any

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foreclosure of such Mortgage, such holder will not name Tenant as a party defendant to such foreclosure nor disturb its possession under the Lease and will otherwise recognize Tenant’s rights hereunder, or (ii) any such Mortgage shall contain provisions substantially to the same effect as those contained in such a non-disturbance agreement.  Landlord warrants and represents that the Property is not presently subject to any Mortgage

21.7         Limitations on Liability.  Nothing contained in the foregoing Section 21.6 or in any such non-disturbance agreement or non-disturbance provision shall however, affect the prior rights of the holder of any Mortgage with respect to the proceeds of any award in condemnation or of any fire insurance policies affecting the Building, or impose upon any such holder any liability (i) for the erection or completion of the Building, or (ii) in the event of damage or destruction to the Building or the Demised Premises by fire or other casualty, for any repairs, replacements, rebuilding or restoration except such repairs, replacements, rebuilding or restoration as can reasonably be accomplished from the net proceeds of insurance actually received by, or made available to, such holder, or (iii) for any default by Landlord under the Lease occurring prior to any date upon which such holder shall become Tenant’s landlord, or (iv) for any credits, offsets or claims against the Rent as a result of any acts or omissions of Landlord committed or omitted prior to such date, or (v) for return of any security deposit or other funds unless the same shall have been received by such holder, and any such agreement or provision may so state.

22.QUIET ENJOYMENT

Landlord covenants that if, and so long as, Tenant keeps and performs each and every covenant, agreement, term, provision and condition herein contained on the part and on behalf of Tenant to be kept and performed, Tenant shall quietly enjoy the Demised Premises from and against the claims of all persons claiming by, through or under Landlord subject, nevertheless, to the covenants, agreements, terms, provisions and conditions of this Lease and to all Mortgages to which this Lease is subject and subordinate.

Without incurring any liability to Tenant, Landlord may permit access to the Demised Premises and open the same, whether or not Tenant shall be present, upon any demand of any sheriff, marshall or court officer entitled to, or reasonably purporting to be entitled to, such access for any lawful purpose (but this provision and any action by Landlord hereunder shall not be deemed a recognition by Landlord that the person or official making such demand has any right or interest in or to this Lease, or in or to the Demised Premises), or upon demand of any representative of the fire, police, building, sanitation or other department of the city, county, state or federal governments. Landlord shall endeavor to give Tenant prior oral or written notice of any access to the Demised Premises hereunder unless prohibited from doing so by the person making such demand.

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23.ENTIRE AGREEMENT - WAIVER - SURRENDER

23.1Entire Agreement.  This Lease and the Exhibits made a part hereof contain the entire and only agreement between the parties and any and all statements and representations, written and oral, including previous correspondence and agreements between the parties hereto, are merged herein.  Tenant acknowledges that all representations and statements upon which it relied in executing this Lease are contained herein and that Tenant in no way relied upon any other statements or representations, written or oral.  Any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of this Lease in whole or in part unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought.  Nothing herein shall prevent the parties from agreeing to amend this Lease and the Exhibits made a part hereof as long as such amendment shall be in writing and shall be duly signed by both parties.

23.2Waiver.  The failure of either party to seek redress for violation, or to insist upon the strict performance, of any covenant or condition of this Lease, or (in the case of Landlord) any of the Rules and Regulations promulgated hereunder, shall not prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of an original violation.  The receipt by Landlord of Rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach.  The failure of Landlord to enforce any of such Rules and Regulations against Tenant and/or any other tenant or subtenant in the Building shall not be deemed a waiver of any such Rules and Regulations.  No provisions of this Lease shall be deemed to have been waived by either party unless such waiver be in writing signed by such party.  No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed to be other than on account of the stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this Lease provided.

23.3Surrender.  No act or thing done by Landlord during the term hereby demised shall be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept such surrender shall be valid, unless in writing signed by Landlord. No employee of Landlord or of Landlord’s agents shall have any power to accept the keys of the Demised Premises prior to the termination of this Lease.  The delivery of keys to any employee of Landlord or of Landlord’s agents shall not operate as a termination of the Lease or a surrender of the Demised Premises.

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24.INABILITY TO PERFORM - EXCULPATORY CLAUSE

Except as otherwise expressly provided in this Lease, this Lease and the obligations of Tenant to pay Rent hereunder and perform all other covenants, agreements, terms, provisions and conditions hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease or is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make or is delayed in making any repairs, replacements, additions, alterations, improvements or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from doing so by reason of strikes or labor troubles or any other similar or dissimilar cause whatsoever beyond Landlord’s reasonable control, including but not limited to, governmental preemption in connection with a national emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any governmental agency or by reason of the conditions of supply and demand which have been or are affected by war, hostilities or other similar or dissimilar emergency.  In each such instance of inability of Landlord to perform, Landlord shall exercise reasonable diligence to eliminate the cause of such inability to perform.

Tenant shall neither assert nor seek to enforce any claim for breach of this Lease against any of Landlord’s assets other than Landlord’s interest in the Property and in the rents, issues and profits thereof, and Tenant agrees to look solely to such interest for the satisfaction of any liability of Landlord under this Lease, it being specifically agreed that in no event shall Landlord (which term shall include, without limitation any of the officers, trustees, directors, partners, beneficiaries, joint venturers, members, stockholders or other principals or representatives, disclosed or undisclosed, of Landlord or any managing agent) ever be personally liable for any such liability. This paragraph shall not limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord or to take any other action which shall not involve the personal liability of Landlord to respond in monetary damages from Landlord’s assets other than the Landlord’s interest in said real estate, as aforesaid.  In no event shall Landlord ever be liable for consequential damages.

25.BILLS AND NOTICES

Any notice, consent, request, bill, demand or statement hereunder by either party to the other party shall (except as otherwise herein specified) be in writing and either delivered or served personally or sent by certified or registered mail, return receipt requested, in a postpaid envelope, deposited in the United States mails addressed to the respective party at its Address as stated in Article 1, or if any Address for notices shall have been duly changed as hereinafter provided, if mailed as aforesaid to the party at such changed Address.  Either party

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may at any time change the Address for such notices, consents, requests, bills, demands or statements by delivering or mailing, as aforesaid, to the other party a notice stating the change and setting forth the changed Address, provided such changed address is within the United States. Any such notice, consent, request, bill, demand or statement shall be effective when received or refused.

All bills and statements for reimbursement or other payments or charges due from Tenant to Landlord hereunder shall be due and payable in full thirty (30) days, unless herein otherwise provided, after submission thereof by Landlord to Tenant. Tenant’s failure to make timely payment of any amounts indicated by such bills and statements, whether for work done by Landlord at Tenant’s request, reimbursement provided for by this Lease or for any other sums properly owing by Tenant to Landlord, shall be treated as a default in the payment of Rent, in which event Landlord shall have all rights and remedies provided in this Lease for the nonpayment of Rent.

26.PARTIES BOUND - SEIZIN OF TITLE

The covenants, agreements, terms, provisions and conditions of this Lease shall bind and benefit the successors and assigns of the parties hereto with the same effect as if mentioned in each instance where a party hereto is named or referred to, except that no violation of the provisions of Article 14 hereof shall operate to vest any rights in any successor or assignee of Tenant and that the provisions of this Article shall not be construed as modifying the conditions of limitation contained in Article 19 hereof.

If in connection with or as a consequence of the sale, transfer or other disposition of the real estate (Land and/or Building, either or both, as the case may be) of which the Demised Premises are a part Landlord ceases to be the owner of the reversionary interest in the Demised Premises, Landlord shall be entirely freed and relieved from the performance and observance thereafter of all covenants and obligations hereunder accruing thereafter on the part of Landlord to be performed and observed, it being understood and agreed in such event (and it shall be deemed and construed as a covenant running with the land) that the person succeeding to Landlord’s ownership of said reversionary interest shall thereupon and thereafter assume, and perform and observe, any and all of such covenants and obligations of Landlord.  Landlord shall, upon any such sale, transfer or other disposition, remit to Landlord’s successor the security deposit referenced in Section 27.7.

27.MISCELLANEOUS

27.1         Separability.  If any provision of this Lease or portion of such provision or the application thereof to any person or circumstance is for any reason held invalid or unenforceable, the remainder of the Lease (or the remainder of

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such provision) and the application thereof to other persons or circumstances shall not be affected thereby.

27.2Captions.  The captions are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Lease nor the intent of any provisions thereof.

27.3Broker.  Each party represents and warrants that it has not directly or indirectly dealt, with respect to the leasing of space in the Building, with any broker or had its attention called to the Demised Premises or other space to let in the Building, by any broker other than the Broker listed in Article 1 whose commission shall be the responsibility of Landlord.  Each party agrees to exonerate and save harmless and indemnify the other against any claims for a commission by any other broker, person or firm, with whom such party has dealt in connection with the execution and delivery of this Lease or out of negotiations between Landlord and Tenant with respect to the leasing of other space in the Building.

27.4Governing Law.  This Lease is made pursuant to, and shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts.

27.5Assignment of Lease and/or Rent.  With reference to any assignment by Landlord of its interest in this Lease and/or the Rent payable hereunder, conditional in nature or otherwise, which assignment is made to or held by a bank, trust company, insurance company or other institutional lender holding a Mortgage on the Building, Landlord and Tenant agree:

(a)that the execution thereof by Landlord and acceptance thereof by such Mortgagee shall never be deemed an assumption by such Mortgagee of any of the obligations of the Landlord hereunder, unless such Mortgagee shall, by written notice sent to the Tenant, specifically otherwise elect; and

(b)that, except as aforesaid, such Mortgagee shall be treated as having assumed the Landlord’s obligations hereunder only upon foreclosure of such Mortgagee’s Mortgage and the taking of possession of the Demised Premises after having given notice of its intention to succeed to the interest of the Landlord under this Lease.

27.6Notice of Lease.  Neither party shall record this Lease in any Registry of Deeds or Registry District, provided however that either party shall at the request of the other, execute and deliver a recordable Notice of this Lease in the form prescribed by Chapter 183, Section 4 of the Massachusetts General Laws.

27.7Security Deposit.  Landlord acknowledges receipt from Tenant of a deposit in the amount of $16,764.34 to be held by Landlord during the Term of this Lease as security for the full, faithful and punctual performance by Tenant of all the covenants

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damage to the Property arising from such removal; and (e) Tenant shall purchase the energy required for operation of the Facilities.

IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be executed under seal, all as of the day and year first above written.

LANDLORD:
BOSTON WHARF CO.
By	[ILLEGIBLE]
On behalf of P & 0 Properties Boston Inc. and Summer St. Properties Inc., its sole General Partners
TENANT:
INVESTMENT TECHNOLOGY GROUP,  INC.
By	[ILLEGIBLE]
Its	PRESIDENT
	(duly-authorized) title

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44 FARNSWORTH 9TH FLOOR EXHIBIT “A”

EXHIBIT B

SCHEDULE OF CLEANING SERVICES

NIGHTLY

Empty wastebaskets and replace plastic liners as needed (liners to be paid for by tenant).

Empty and damp wipe ashtrays.

Dust furniture and fixtures, office equipment, ledges, windowsills, telephones and bookshelves.

Spot clean walls around door frames and light switches.  Clean and sanitize drinking fountains.  Damp wipe desk and table tops.

Vacuum carpeting.

Spot clean carpeting.

Dry mop composition floors using chemically treated dry mops.

Spot mop composition floors.

Vacuum and/or sweep and dust stairways.

LOBBY

Damp wipe elevator doors and walls.

Dust elevator doors and walls.

Clean elevator tracks.

Vacuum elevator rugs.

Wash entrance door glass.

CAFETERIA

Wash table tops in cafeteria.

Wipe down chairs in cafeteria.

COMPUTER ROOM

Special care in cleaning of computer room.

LAVATORIES

Wash and disinfect sinks, commodes and urinals.  Wash and polish mirrors and bright work.  Empty receptacles and remove to central area.  Dust partitions, dispensers and receptacles.

Replenish toilet tissue, paper towel and hand soap dispensers (supplies to be furnished by Landlord).

Sweep, wash and disinfect floors.

Wash and polish all marble.

WEEKLY

Dust bottoms of chairs, typewriter tables, etc.

Remove fingerprints and smudges from doors, door frames, and partitions.

Wash composition floors.

Spray buff composition floors.

Wash stairs.

MONTHLY

Dust Venetian blinds.

Wash and redress composition floors.

QUARTERLY

Dust ceiling diffusers.

Machine strip and refinish composition floors.

WINDOW CLEANING

Wash and clean interior and exterior windows including all metal mullions and sashes, which shall be wiped clean during the window cleaning operation once every three (3) months.

EXHIBIT C

RULES AND REGULATIONS

1.The sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors or halls of the Building shall not be obstructed or encumbered or used for any purpose other than ingress and egress to and from the premises demised to any tenant or occupant.

2.No awnings or other projections shall be attached to the outside walls or windows of the Building without the prior consent of Landlord.  No curtains, blinds, shades, or screens shall be attached or hung in, or used in connection with, any window or door of the premises demised to any tenant or occupant, without the prior consent of Landlord.  Such awnings, projections, curtains, blinds, shades, screens, or other fixtures must be of a quality type, design and color, and attached in a manner, approved by Landlord.

3.No sign, advertisement, object, notice or other lettering shall be exhibited, inscribed, painted or affixed on any part of the outside or inside of the premises demised to any tenant or occupant or of the Building without the prior consent of Landlord.  Interior signs on doors and directory tables, if any, shall be of a size, color and style approved by Landlord.

4.The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed, nor shall any bottles, parcels, or other articles be placed on any window sills.

5.No show cases or other articles shall be put in front of or affixed to any part of the exterior of the Building, nor placed in the halls, corridors, vestibules or other parts of the Building.

6.The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances shall be thrown therein.

7.No tenant or occupant shall mark, paint, drill into, or in any way deface any part of the Building or the premises demised to such tenant or occupant.  No boring, cutting or stringing of wires shall be permitted, except with the prior consent of the Landlord, and as Landlord may direct.  No tenant or occupant shall install any carpeting in the premises demised to such tenant or occupant except in manner approved by Landlord and in accordance with the following minimum specifications:

Padding – 40 ounces in weight per square yard

Carpeting – 25 ounces in face weight per square yard

8.No bicycles, vehicles or animals of any kind shall be brought into or kept in or about the premises demised to any tenant.  Bicycles may be stored in racks, if any, furnished for such purpose by Landlord in a common area of the Property.  No cooking shall be done or permitted in the Building by any tenant without the approval of Landlord.  No tenant shall cause or permit any unusual or objectionable odors to emanate from the premises demised to such tenant.

9.Without the prior consent of Landlord, no space in the Building shall be used for manufacturing, or for the sale of merchandise, goods or property of any kind at auction.

10.No tenant shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with other tenants or occupants of the Building or neighboring buildings or premises whether by the use of any musical instrument, radio, television set or other audio device, unmusical noise, whistling, singing, or in any other way.  Nothing shall be thrown out of any doors or windows.

11.Each tenant must, upon the termination of its tenancy, restore to Landlord all keys of stores, storage areas, offices and toilet rooms, either furnished to, or otherwise procured by, such tenant.

12.All removals from the Building, or the carrying in or out of the Building or the premises demised to any tenant, of any safes, freight, furniture, or bulky matter of any description must take place at such time and in such manner as Landlord or its agents may determine, from time to time.  Landlord reserves the right to inspect all freight to be brought into the Building and to exclude from the Building all freight which violates any of the Building Rules or the provisions of such tenant’s lease.

13.No tenant shall use or occupy, or permit any portion of the premises demised to such tenant to be used or occupied, as an office for a public stenographer or typist, or as a barber or manicure shop, or as an employment bureau. No tenant or occupant shall engage or pay any employees in the Building, except those actually working for such tenant or occupant in the Building, nor advertise for laborers giving an address at the Building.

14.No tenant or occupant shall purchase spring water, ice, food, beverage, lighting maintenance, cleaning towels or other like service, from any company or person not approved by Landlord, such approval not unreasonably to be withheld.

15.Landlord shall have the right to prohibit any advertising by any tenant or occupant which, in Landlord’s opinion, tends to impair the reputation of the Building or its desirability as a building for offices, and upon notice from Landlord, such tenant or occupant shall refrain from or discontinue such advertising.

16.Landlord reservesthe right to exclude from the Building, between the hours of 6:00 p.m. and 8:00 a.m. on Business Days and otherwise at all hours, all unauthorized persons.

17.Each tenant, before closing and leaving the premises demised to such tenant at any time, shall see that all entrance doors are locked and windows closed.

18.No premises shall be used, or permitted to be used, for lodging or sleeping, or for any immoral or illegal purpose.

19.There shall not be used in the Building, either by any tenant or occupant or by their agents or contractors, in the delivery or receipt of merchandise, freight or other matter, any hand trucks or other means of conveyance except those equipped with rubber tires, rubber side guards and such other safeguards as Landlord may require.

20.Canvassing, soliciting and peddling in the Building are prohibited and each tenant and occupant shall cooperate in seeking their prevention.

21.If the premises demised to any tenant become infested with vermin, such tenant, at its sole cost and expense, shall cause its premises to be exterminated from time to time, to the satisfaction of Landlord, and shall employ such exterminators therefor as shall be approved by Landlord.

22.No tenant shall move, or permit to be moved, into or out of the Building or the premises demised to such tenant, any heavy or bulky matter, without the specific approval of Landlord. If any such matter requires special handling, only a person holding a Master Rigger’s license shall be employed to perform such special handling.  No tenant shall place, or permit to be placed, on any part of the floor or floors of the premises demised to such tenant, a load exceeding the floor load per square foot which such floor was designed to carry and which is allowed by law.  Landlord reserves the right to prescribe the weight and position of safes and other heavy matter,’ which must be placed so as to distribute the weight.  Whenever any passenger elevator is used for the transport of freight, protective padding furnished by Landlord shall be attached to the side and rear walls of said elevator during such use.

23.The requirements of tenants will be attended to only upon application at the office of the building.  Building employees shall not be required to perform, and shall not be requested by any tenant or occupant to perform, any work outside of their regular duties, unless under specific instructions from the office of the managing agent of the building.

24.The possession of any lighted cigarette, cigar, pipe or other smoking articles shall be prohibited throughout the Building and the sidewalks adjoining the Building.

EXHIBIT  D

APPROVED CONTRACTORS

LEE KENNEDY CO., INC.

EXHIBIT “E”

PLANS AND SPECIFICATIONS FOR TENANT’S INITIAL WORK

Plans prepared by

Montroy Andersen Design Group Inc.

432 Park Avenue

New York, New York

Dated:  March 3, 1995

Titled: I.T.G. 44 Farnsworth Street, Boston, MA

TITLE	DRAWING NUMBER
General Notes		GN–1
Demolition		9–A1
Construction Plan		9–A2
Reflected Ceiling Plan		9–A3
Telephone & Electric Plan		9–A4
Furniture & Equipment Plan		9–A5
Finish Plan		9–A6
Roof Plan		9–A7
Door Schedule		9–A8
Elevations & Details		9–A9
Elevations & Details		9–A10
Elevations & Details		9–Al1
Reception Floor Details		9–A12

EXHIBIT F PLAN SHOWING GENERATOR LOCATION

EX-10.31.1

Exhibit 10.31.1

ASSIGNMENT OF LEASE

THIS AGREEMENT, made as of the 27th day of April, 1999 by and among BOSTON WHARF CO., a Massachusetts general partnership (hereinafter referred to as “Landlord”), INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation (hereinafter referred to as “Assignor”), and INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation, formerly known as Jefferies Group, Inc. (hereinafter referred to as “Assignee”)

WITNESSETH   THAT:

WHEREAS, Landlord has leased to Assignor certain premises contained in the building known and numbered as 44 Farnsworth Street, Boston, Massachusetts, as more particularly set forth in an agreement of lease between Landlord and Assignor dated March 10, 1995 (hereinafter referred to as the “Lease”); and

WHEREAS, Assignee is a successor to Assignor by way of merger; and

WHEREAS, in connection with said merger, Assignor wishes to assign the Lease to Assignee; and

WHEREAS, such assignment is subject to certain restrictions and other provisions contained in the Lease;

NOW THEREFORE, for good and valuable consideration by each party paid to the other parties and in further consideration of the foregoing recitals and the obligations of the parties herein assumed:

1.             Assignor assigns, transfers, and sets over unto Assignee all its right, title and interest as the tenant under the Lease from and after the date hereof (hereinafter referred to as the “Effective Date”).

2.             Landlord consents to the foregoing assignment.

3.             Assignee assumes all obligations of the tenant under the Lease to be performed before, on or after the Effective Date and covenants and agrees:

A.that Assignee shall be and remain primarily liable to Landlord jointly and severally with Assignor for the payment of all rent and for the due performance of all of the other obligations, terms, covenants, conditions and agreements contained in the Lease on the tenant’s part to be performed before, on or after the Effective Date; and

B.that Assignee’s obligations hereunder shall run to all persons claiming by, through or under Landlord by virtue of any existing or future instrument.

4.             Without limiting the generality of the foregoing Paragraph 3, Assignee covenants and agrees that any assignment, mortgage, pledge or other transfer of Assignee’s rights under the Lease shall be governed by the applicable provisions of the Lease.

5.             Assignor covenants and agrees that Assignor’s obligations under the Lease shall continue in full force and effect as the obligations of a principal and not as a guarantor or surety, and that Assignor will defend, indemnify and save Assignee harmless from all claims for payment of rent or for Assignor’s failure to perform any of the other obligations, terms, covenants, conditions, and agreements contained in the Lease to be performed with respect to the period up to the Effective Date.

6.             Assignor and Assignee covenant and agree that any assignment of the Lease by virtue of any mortgage presently existing or hereinafter executed or by virtue of a separate assignment shall constitute an assignment of Landlord’s rights hereunder. Any such mortgagee or assignee may enforce the obligations of Assignor and Assignee under the Lease and this Agreement in its own name and on its own behalf.

2

7              This Agreement represents the entire agreement of the parties with respect to the subject matter hereof, and may not be modified or changed in any way except by a writing signed by the parties.

IN WITNESS WHEREOF, the parties have caused this instrument to be signed, sealed and delivered in triplicate all as of the day and year first above written.

	BOSTON WHARF CO. (Landlord)
By	P & O Properties Boston Inc. and Summer St. Properties Inc., its sole general partners
	By	/s/ Robert N. Kenney
		Robert N. Kenney, Vice President
INVESTMENT TECHNOLOGY GROUP, INC. (Assignor)
By	[ILLEGIBLE]
Its	Secretary
	title (duly-authorized)
INVESTMENT TECHNOLOGY GROUP, INC. (Assignee)
By	[ILLEGIBLE]
Its	Secretary
	title (duly-authorized)

3

EX-10.31.2

Exhibit 10.31.2

AMENDMENT OF LEASE

THIS AGREEMENT, made as of the 23 day of July, 2003, by and between BOSTON WHARF CO., a Massachusetts general partnership (hereinafter referred to as “Landlord”) and INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation, formerly known as Jefferies Group, Inc. (hereinafter referred to as “Tenant”)

WITNESSETH   THAT:

WHEREAS, Landlord has leased to Tenant and Tenant has hired from Landlord certain Demised Premises contained in the Building known and numbered as 44 Farnsworth Street, Boston, Massachusetts, all as more particularly described and set forth in a certain leased dated March 10, 1995, as the same may from time to time have been amended (hereinafter referred to as the “Lease”); and

WHEREAS, the Termination Date on which the term of the Lease is scheduled to expire is April 30,2005; and

WHEREAS, the parties wish to amend the Lease by expanding the Demised Premises, subject to the provisions hereof;

NOW THEREFORE, for good and valuable consideration by each party paid to the other, and in further consideration of the foregoing recitals and the mutual obligations set forth herein, the parties hereby agree as follows:

1.            The entire third (3^rd) floor of the Building (hereinafter referred to as the “Expansion Area”) shall be added to and included in the Demised Premises and shall become subject to all the terms and conditions of the Lease as fully as if the Expansion Area had originally been a part of the Demised Premises, except as otherwise hereinafter set forth.

2.             As used with respect to the Expansion Area, the following Lease terms shall be defined as hereinafter set forth:

Broker:	GVA Thomson Doyle
	Hennessey & Stevens, Inc.
Rentable Area:	10,663 square feet
Term Commencement Date:	February 1, 2004
Termination Date:	April 30, 2005
Yearly Fixed Rent:	$263,909.28

3.             Tenant shall accept occupancy of the Expansion Area “as is”, in its existing condition as of the Term Commencement Date applicable thereto. All work necessary to prepare the Expansion Area for occupancy by Tenant shall be performed by Tenant at its own expense pursuant to Article 10 and the other applicable provisions of the Lease, and Landlord shall have no responsibility therefor, nor shall Landlord be obligated to grant any allowance or other credit on account of the cost thereof.

4.             Tenant’s proportionate share of taxes and operating expenses pursuant to Sections 6.2 and 6.3 of the Lease (subject to adjustment in accordance with Section 6.4 thereof) shall be 11.56% with respect to the Expansion Area.

5.             The base amount for purposes of computing real estate tax escalation pursuant to Section 6.2 of the Lease with respect to the Expansion Area shall be the amount of all real estate taxes (as defined in said Section) imposed with respect to the fiscal year ending June 30, 2005.

6.             The base amount for purposes of computing operating expense escalation pursuant to Section 6.3 of the Lease with respect to the Expansion Area shall be the amount of operating expenses (as defined in said Section) incurred with respect to the calendar year ending December 31, 2005.

2

7.             Notwithstanding any other provision of the Lease as herein modified to the contrary, Tenant shall have no obligation to pay Additional Rent under Sections 6.2 and 6.3 of the Lease with respect to the period through and including April 30, 2005.

8.             Effective as of the Term Commencement Date applicable to the Expansion Area, the number of unreserved parking spaces to be allocated by Landlord to Tenant pursuant to the provisions of Section 27.8 of the Lease in the garage owned by Landlord at 17 Farnsworth Street, Boston, Massachusetts, shall be increased by two (2), which additional spaces shall be the same as those presently available to Tenant as a subtenant of the Expansion Area.

9.             It is expressly understood and agreed that Tenant’s option to extend the term of the Lease for five (5) years shall apply to the Expansion Area together with the remainder of the Demised Premises, provided however that Yearly Fixed Rent payable by Tenant during such extension period with respect to the Demised Premises in their entirety shall in no event be less than $512,727.36.

10.           Landlord warrants and represents that the Property is not subject to any Mortgage as of the date hereof.

11.           The parties acknowledge that Tenant’s Address is currently 380 Madison Avenue, 4^th Floor, New York, New York 10017, Attention: General Counsel.

12.           Except as modified by this instrument, the Lease remains in full force and effect in accordance with its provisions. Unless the context requires otherwise, all terms used herein shall be construed in conformity with the applicable provisions of the Lease.

3

IN WITNESS WHEREOF, Landlord and Tenant have executed this instrument under seal as of the day and year first above written.

BOSTON WHARF CO.
By		P & O Properties Boston LLC and
		Summer St. Properties LLC, its sole
		general partners
		By.	[ILLEGIBLE]
			PRESIDENT
INVESTMENT TECHNOLOGY GROUP, INC.
By	P. Mats Goebels
Its
title (duly-authorized)
P.MATS GOEBELS
MANAGING DIRECTOR
GENERAL COUNSEL AND SECRETARY

4

EX-10.32

Exhibit 10.32

C L I F F O R D	LIMITED LIABILITY PARTNERSHIP
C H A N C E

DATED 7 February 2007

(1)	LANDLORD:	MIZUHO CORPORATE BANK, LTD.
(2)	TENANT:	INVESTMENT TECHNOLOGY GROUP EUROPE LIMITED

OCCUPATIONAL LEASE

-OF-

PART 6^TH FLOOR, RIVER PLATE HOUSE,
7/11 FINSBURY CIRCUS, LONDON EC2

1

CONTENTS

Clause				Page
Section 1 - Definitions And Interpretation				3
1.	Definitions			3
2.	Interpretation			8
Section 2 - Grant Of Lease				9
3.	Grant, Rights And Other Matters			9
	3.1		Demise And Term	9
	3.2		Rights And Easements	9
	3.3		Exceptions And Reservations	9
	3.4		Third Party Rights	9
	3.5		No Implied Easements	10
	3.6		Covenants Affecting Reversion	10
	3.7		Encroachments And Easements	10
	3.8		Covenants Relating To Other Property	10
	3.9		Landlord’s Covenants	10
	3.10		Rights Of Entry By Landlord	10
	3.11		Terms Of Entry By Landlord	11
Section 3 - Financial Provisions				11
4.	Rents			11
	4.1		Tenant’s Obligation To Pay	11
	4.2		Dates Of Payment Of Principal Rent	12
	4.3		Method Of Payment Of Principal Rent	12
	4.4		Dates Of Payment Of Insurance Rent And Additional Rent	12
	4.5		Dates Of Payment Of Service Charge	12
	4.6		No Right Of Set-Off	12
5.	Rent Review			12
	5.1	Definitions		12
	5.2	Rent Reviews		14
	5.3	Agreement Or Determination Of The Reviewed Rent		14
	5.4	Appointment Of Review Surveyor		14
	5.5	Functions Of Review Surveyor		14
	5.6	Fees Of Review Surveyor		15
	5.7	Appointment Of New Review Surveyor		15
	5.8	Interim Payments Pending Determination		15
	5.9	Rent Restrictions		15
	5.10	Memoranda Of Reviewed Rent		16
	5.11	Time Not Of The Essence		16
6.	Interest			16
	6.1	Interest On Late Payments		16
	6.2	Interest On Refused Payments		16
7.	Outgoings			17
	7.1	Tenant’s Obligation To Pay		17
	7.2	Indemnity Against Void Rating Relief		17

	7.3	Costs Of Utilities Etc.	17
8.	Value Added Tax		17
	8.1	Sums Exclusive Of Vat	17
	8.2	Tenant To Pay Vat	17
	8.3	Vat Incurred By Landlord	18
9.	Taxation		18
10.	Landlord’s Costs		18
Section 4 - Repairs, Alterations And Signs			19
11.	Repairs, Decoration Etc.		19
	11.1	Repairs	19
	11.2	Damage By The Insured Risks	19
	11.3	Decorations	19
	11.4	Cleaning	19
	11.5	Carpeting	20
12.	Yield Up		20
	12.1	Reinstatement Of Premises	20
	12.2	Yielding Up In Good Repair	20
	12.3	Notice Of Selling Or Re-Letting	21
13.	Compliance With Notices		21
	13.1	Tenant To Remedy Breaches Of Covenant	21
	13.2	Failure Of Tenant To Repair	21
14.	Alterations		21
	14.1	No Structural Alterations Or New Building	21
	14.2	Non-Structural Alterations	21
	14.3	Covenants By Tenant And Security Deposit	22
15.	Signs And Advertisements		22
Section 5 - Use			22
16.	Use Of Premises		22
	16.1	Permitted Use	22
	16.2	Tenant Not To Leave Premises Unoccupied	22
	16.3	Details Of Keyholders	22
	16.4	Keys To Be Given To Landlord	22
17.	Use Restrictions		22
18.	Landlord’s Regulations		23
19.	Use Of Premises Outside Business Hours		23
20.	Exclusion Of Warranty As To User		23
	20.1	No Warranty By Landlord	23
	20.2	Tenant’s Acknowledgement	23
	20.3	Tenant To Remain Bound	23
Section 6 - Disposals			23
21.	General Restrictions		23
	21.1	Alienation Generally	23
	21.2	Sharing With A Group Company	24

22.	Assignment		24
	22.1	No Assignment Of Part	24
	22.2	Circumstances In Which Consent To Assignment May Be Withheld	24
	22.3	Conditions For Landlord’s Consent	24
	22.4	Assignment Of The Whole	25
	22.5	S.144 Lpa l925	25
23.	Underletting		26
	23.1	Underletting Of Part	26
	23.2	Underletting Of The Whole	26
	23.3	Underletting Rent	27
	23.4	Direct Covenants From Undertenant	27
	23.5	Contents Of Underlease	28
	23.6	Tenant To Obtain Landlord’s Consent	28
	23.7	Tenant To Enforce Obligations	28
	23.8	Review Of Underlease Rent	28
	23.9	No Variation Of Terms	28
	23.10	No Reduction In Rent	29
24.	Registration Of Dispositions		29
Section 7 - Legal Requirements			29
25.	Statutory Requirements		29
	25.1	Tenant To Comply With Statutes	29
	25.2	Tenant To Execute Necessary Works	29
	25.3	Tenant To Refrain From Certain Acts	29
26.	Planning Acts		30
	26.1	Tenant’s Obligation To Comply	30
	26.2	No Application For Planning Permission Without Consent	30
	26.3	Tenant To Obtain All Permissions	30
	26.4	Tenant To Pay Planning Charges	30
	26.5	No Implementation Of Permission Without Approval	30
	26.6	Tenant To Carry Out Works Before End Of Term	30
	26.7	Plans Etc. To Be Produced	31
	26.8	Planning Conditions	31
	26.9	Planning Refusal	31
27.	Statutory Notices		31
	27.1	Notices Generally	31
	27.2	Party Wall Etc. Act 1996	31
28.	Fire Precautions And Equipment		32
	28.1	Compliance With Requirements	32
	28.2	Fire Fighting Appliances To Be Supplied	32
	28.3	Access To Be Kept Clear	32
29.	Defective Premises		32
Section 8 - Insurance			32
30.	Insurance Provisions		32
	30.1	Buildings Insurance	32
	30.2	Noting Of Interest	33
	30.3	Option To Determine	33

	30.4	Payment Of Insurance Money Refused	33
	30.5	Suspension Of Rent Payments	33
	30.6	Benefit Of Other Insurances	33
	30.7	Insurance Becoming Void	34
	30.8	Requirements Of Insurers	34
	30.9	Notice By Tenant	34
Section 9 - Default Of Tenant And Rights Of Re-Entry			34
31.	Default Of Tenant		34
	31.1	Re-Entry	34
	31.2	Events Of Default	34
Section 10 - Landlord’s Services And Service Charge			36
32.	Landlord’s Services		36
	32.1	Provision Of Services	36
	32.2	Appointment Of Agents	37
	32.3	Variation Of Services	37
	32.4	Failure By Landlord To Provide Services	37
	32.5	Exclusion Of Landlord’s Liability	37
33.	Service Charge		37
	33.1	Definitions	37
	33.2	Account Of Expenditure	39
	33.3	Advance Payment	39
	33.4	Balancing Payment	39
	33.5	Omissions	39
	33.6	Continuing Application Of Provisions	39
Section 11 - Superior Lease			40
34.	Obligations And Consents Under Superior Lease		40
	34.1	Obligations By Tenant	40
	34.2	Obligations By Landlord	40
	34.3	Consents Under Superior Lease	40
Section 12 - Miscellaneous			40
35.	Quiet Enjoyment		40
36.	Exclusion Of Implied Covenants By Landlord		40
37.	Disclosure Of Information		40
38.	Indemnity		41
39.	Representations		41
40.	Effect Of Waiver		41
41.	Notices		41
	41.1	Notices To Tenant Or Guarantor	41
	41.2	Notices To Landlord	41
42.	Exclusion Of Statutory Compensation		41
43.	Exclusion Of Sections 24 To 28 (Inclusive) Of The 1954 Act		42
	43.1	Tenant’s Confirmation	42
	43.2	Tenant’s Authorisation Of Person Making Declaration	42

	43.3	Exclusion Of Sections 24 To 28		42
44.	New Tenancy			42
45.	Invalidity Of Certain Provisions			42
46.	Third Party Rights			42
	46.1	Exclusion Of Rights		42
47.	Closure Of Title At The Land Registry			42
	47.1	Applications To Close Title And Cancel Notice		42
Schedule 1			RIGHTS AND EASEMENTS GRANTED	43
Schedule 2			EXCEPTIONS AND RESERVATIONS	44
Schedule 3			USE RESTRICTIONS	45
Schedule 4			COVENANTS BY GUARANTOR	47
Schedule 5			ITEMS OF EXPENDITURE AS REFERRED TO IN CLAUSE 33	50
Schedule 6			DEEDS AND DOCUMENTS CONTAINING MATTERS TO WHICH THE PREMISES ARE SUBJECT	54
Schedule 7			AUTHORISED GUARANTEE AGREEMENT TO BE GIVEN BY TENANT PURSUANT TO CLAUSE 22.3.2	55

PRESCRIBED CLAUSES

LR1.Date of lease 7 February 2007

LR2.Title number

LR2.1Landlord’s title number          NGL632309

LR2.2Other title numbers

LR3.Parties to this lease

LandlordMIZUHO CORPORATE BANK, LTD. Incorporated in Japan whose registered office is at Bracken House, One Friday Street, London EC4M 9JA (Foreign Company Registration No. FC004234)

TenantINVESTMENT TECHNOLOGY GROUP EUROPE LIMITED, incorporated in Ireland whose registered office is at Dublin Exchange Facility, Second Floor, Mayor Street, International Financial Services Centre, Dublin 1, Ireland (Company Registration No.283939)

LR4.Property

In the case of a conflict between this clause and the remainder of this lease then, for the purposes of registration, this clause shall prevail.

Defined in clause 1.35 of this lease.

LR5.Prescribed statements etc.

LR5.1  Statements prescribed under rules 179 (dispositions in favour of a charity), 180 (dispositions by a charity) or 196 (leases under the Leasehold Reform, Housing and Urban Development Act 1993) of the Land Registration Rules 2003.

-

LR5.2  This lease is made under, or by reference to, provisions of:

-

LR6.Term for which the Property is leased

The term is as follows:   from 8 January 2007 up to and including 27 September 2013.

LR7.Premium

-

1

LR8.Prohibitions or restrictions on disposing of this lease

This lease contains a provision that prohibits or restricts dispositions.

LR9.Rights of acquisition etc

LR9.1 Tenant’s contractual rights to renew this lease, to acquire the reversion or another lease of the Property, or to acquire an interest in other land

-

LR9.2 Tenant’s covenant to (or offer to) surrender the lease

-

LR9.3 Landlord’s contractual rights to acquire this lease

-

LR10.Restrictive covenants given in this lease by the Landlord in respect of land other than the Property

-

LR11.Easements

LR11.1 Easements granted by this lease for the benefit of the Property

See clause 3.2 of this lease.

LR11.2 Easements granted or reserved by this lease over the Property for the benefit of other property

See clause 3.3 of this lease.

LR12.Estate rentcharge burdening the Property

-

LR13.Application for standard form of restriction

-

LR14.Declaration of trust where there is more than one person comprising the Tenant.

-

2

THIS UNDERLEASE is made on the 7^th day of February 2007

BETWEEN:-

(1)MIZUHO CORPORATE BANK, LTD. (Foreign Company Registration No. FC004234) whose registered office is at Bracken House, One Friday Street, London EC4M 9JA (the “Landlord”); and

(2)INVESTMENT TECHNOLOGY GROUP EUROPE LIMITED (Company Registration No. 283939) whose registered office is at Dublin Exchange Facility, Second Floor, Mayor Street, International Financial Services Centre, Dublin 1, Ireland (the “Tenant”).

NOW THIS DEED WITNESSES as follows:-

SECTION 1
DEFINITIONS AND INTERPRETATION

1.DEFINITIONS

In this Lease, unless the context requires otherwise, the following expressions shall have the following meanings:-

1.1“1954 Act” means the Landlord and Tenant Act 1954;

1.2“1954 Act Notice” means a notice in a form complying with the requirements of section 38A(3)(a) of the 1954 Act;

1.3“1954 Act Statutory Declaration” means a statutory declaration in a form complying with the requirements of section 38A(3)(b) of the 1954 Act;

1.4“Additional Rent” means all sums referred to in clause 6, and all sums which are recoverable as rent in arrear or stated in this Lease to be due to the Landlord;

1.5“Adjoining Property” means any land and/or buildings adjoining or neighbouring the Premises;

1.6“Base Rate” means the base rate for the time being of Barclays Bank plc or some other London clearing bank nominated from time to time by the Landlord or, in the event of base rate being abolished, such other comparable rate of interest as the Landlord shall reasonably specify;

1.7“Building” means the land situated at 7-11 Finsbury Circus, London EC2M 7DH together with the building erected on it or on part of it and known as River Plate House and for the purpose of identification only shown edged red on Plan No. 1 as the same are registered at the Land Registry under title number NGL632309 and each and every part of the land and building, including:-

1.7.1all landlord’s fixtures, fittings, plant, machinery, apparatus and equipment now or after the date of this Lease in or upon the same; and

1.7.2any additions, alterations and improvements;

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1.8“Business Hours” means the usual business or working hours of the Building which shall be 7.00 a.m. to 7.00 p.m. on Mondays to Fridays (inclusive) (excluding usual bank or public holidays);

1.9“Code of Measuring Practice” means the current RICS Code of Measuring Practice, 5^th edition published on behalf of the Royal Institution of Chartered Surveyors;

1.10“Common Parts” means any entrance halls, corridors, passages, lobbies, landings, staircases, lifts, pedestrian ways, courtyards, forecourts, and any other amenities in, or forming part of, the Building which are or may from time to time be provided or designated by the Landlord for common use by the tenants and occupiers of the Building and all persons expressly or by implication authorised by them but excluding the Lettable Areas;

1.11“Conduits” means all drains, pipes, gullies, gutters, sewers, ducts, mains, channels, subways, wires, cables, conduits, flues and any other conducting media of whatsoever nature;

1.12“Decoration Year” means the year ending on the date five (5) years after the date hereof;

1.13“Demise 1” means the part of the Premises edged and hatched blue and as identified as “Demise 1” on Plan No. 2;

1.14“Demise 2” means the part of the Premises edged and hatched blue and as identified as “Demise 2” on Plan No. 2;

1.15“Demise 1 Initial Rent” means two hundred and fifty three thousand five hundred and forty eight pounds (£253,548) per annum;

1.16“Demise 2 Initial Rent” means seventy-seven thousand, two hundred and forty pounds (£77,240) per annum;

1.17“Demise 1 Rent Commencement Date” means 24 October, 2007

1.18“Demise 2 Rent Commencement Date” means 8 October, 2007

1.19“Demise 2 Schedule of Condition” means the schedule of condition in relation to Demise 2 annexed hereto;

1.20“Development” means development as defined in section 55 of the Town and Country Planning Act 1990;

1.21“Former Premises” means the premises described in the Surrendered Lease (being part of Demise 1);

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1.22“Group Company” means any company which is, for the time being a member of the same group as defined in Section 42 of the Landlord and Tenant Act 1954;

1.23“Guarantor” means the party (if any) named as ‘Guarantor’ in this Lease and includes the person from time to time guaranteeing the obligations of the Tenant under this Lease and, in the case of an individual, includes his personal representatives;

1.24“Initial Rent” means the total of the Demise 1 Initial Rent and the Demise 2 Initial Rent;

1.25“Insurance Charge” means the cost to the Superior Landlord of effecting and maintaining insurance against the Insured Risks in respect of the Building or any part thereof including any plant and machinery therein and the Conduits and all fees and expenses paid or payable to professionals or other advisers or consultants in connection with effecting and maintaining the same and claims arising thereunder together with the amount expended by the Superior Landlord in effecting and maintaining insurance against loss of rent in accordance with its covenants in the Superior Lease;

1.26“Insurance Rent” means a due proportion (to be fairly and properly determined by the Landlord or the Surveyor) of the Insurance Charge which the Landlord shall from time to time pay to the Superior Landlord, a proportion of such sums in respect of the period from the Term Commencement Date to the end of the period covered by such insurance to be paid on the date hereof;

1.27“Insured Risks” means (to the extent that any of the same are insurable in the London insurance market at reasonable cost and on reasonable terms) fire, storm, tempest, flood, lightning, explosion, aircraft and articles dropped from them, riot, civil commotion, and such other risks as the Superior Landlord may from time to time in accordance with the provisions of the Superior Lease, determine or which the Landlord (in its reasonable discretion) shall request the Superior Landlord to insure against subject to such exclusions, excesses and limitations as are from time to time imposed by or agreed by the Superior Landlord with the insurers or underwriters;

1.28“Landlord” means the person for the time being entitled to the reversion immediately expectant on the determination of the Term;

1.29“this Lease” means this Underlease and any document which is supplemental to it, whether or not it is expressly stated to be so;

1.30“Lettable Areas” means those parts of the Building leased or intended to be leased to occupational tenants;

1.31“Net Internal Area” means the total floor area (expressed in Units of Measurement) measured in accordance with the Code of Measuring Practice;

1.32“Permitted Use” means good class offices within Class Bl (Business) of the Town and Country Planning (Use Classes) Order 1987 only and not any amendment or re-enactment of such Order made after the date of this Lease and purposes ancillary to such use (but excluding offices for a turf accountancy, pools promoter, estate agency, travel agency, staff agency, employment agency, job centre, government department,

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diplomatic or embassy purposes and any other use to which the Landlord may reasonably object on the grounds of good estate management);

1.33“Plan No. 1” and “Plan No. 2” mean respectively the plans or drawings numbered 1 and 2 annexed to this Lease;

1.34“Planning Acts” means the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning (Consequential Provisions) Act 1990, and the Planning and Compensation Act 1991, the Planning and Compulsory Purchase Act 2004 and any other town and country planning or related legislation;

1.35“Premises” means those parts of the sixth floor of the Building shown edged hatched blue on Plan No. 2 including:-

1.35.1the internal plaster surfaces and finishes of any structural or load bearing walls and columns in or which enclose them, but not any other part of such walls and columns;

1.35.2the entirety of any non-structural or non-load bearing walls and columns in them;

1.35.3the inner half (severed medially) of any internal non-load bearing walls which divide them from any other part of the Building;

1.35.4the floor finishes of them and all carpets but the lower limit of the Premises shall not extend to anything below the floor finishes other than raised floors and the cavity below them which shall be included;

1.35.5the ceiling finishes of them, including suspended ceilings (if any) and light fittings but the upper limit of the Premises shall not extend to anything above the ceiling finishes other than the cavity above any suspended ceilings which shall be included;

1.35.6all internal window frames and window furniture and all glass in the windows and all doors, door furniture and door frames;

1.35.7all sanitary and hot and cold water apparatus and equipment and any radiators in them and all fire fighting equipment and hoses in them;

1.35.8all Conduits in them and exclusively serving the same, except those of any utility company;

1.35.9all landlord’s fixtures, fittings, plant, machinery, apparatus and equipment at any time in or on them (but not any air conditioning units, sprinklers and ducting and ancillary plant, machinery, apparatus or equipment);

1.35.10any additions, alterations and improvements;

1.36“Prescribed Rate” means four per cent (4%) per annum above the Base Rate;

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1.37“Present Tenant” means (in Schedule 4) the Tenant at the time the covenants on the part of the Guarantor are entered into and (in Schedule 7) the Tenant at the time the covenants on the part of the Present Tenant therein referred to are entered into;

1.38“President” means the President for the time being of the Royal Institution of Chartered Surveyors (or in the event that such Institution ceases to exist such other independent body as the Landlord may reasonably nominate) and includes the duly appointed deputy of the President or any person authorised by the President or by the Institution or nominated body to make appointments on his or its behalf;

1.39“Principal Rent” means the rent payable under clause 4.1.1;

1.40“Rents” means the sums payable by the Tenant under clause 4;

1.41“Retained Parts” means all parts of the Building which do not comprise Lettable Areas, including:-

1.41.1the Common Parts;

1.41.2office and residential or other accommodation which may, from time to time, be reserved in the Building for staff;

1.41.3any parts of the Building reserved by the Landlord for the housing of plant, machinery or equipment, or otherwise in connection with, or required for, the provision of services;

1.41.4all Conduits in, on, over or under, or exclusively serving the Building, except any that form part of the Lettable Areas;

1.41.5the main structure of the Building, including the roof and its structural parts, the foundations, all external walls, any internal structural or load bearing walls and columns, the structural slabs of the ceilings and floors, any party structures, boundary walls, railings and fences, and all exterior parts of the Building and any pavements, pavement lights, roads and car parking areas (if any) which form part of the Building;

1.42“Review Date” means 29 September 2008;

1.43“Schedule of Condition” means the schedule of condition annexed hereto;

1.44“Service Charge” has the meaning given to that expression in clause 33;

1.45“Superior Landlord” means the person for the time being entitled to any estate in the Building which is reversionary (whether immediate or mediate) upon the Landlord’s estate;

1.46“Superior Lease” means the lease of the Building dated 20 December 1988 and made between Hammerson (Amethyst) Properties Limited and Taisei Europe Limited (1) and the Landlord (then known as The Fuji Bank Limited) (2) for the term of 25 years from 29 September 1988 and any other lease of the Building which is reversionary (whether immediate or mediate) upon this Lease;

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1.47“Surrendered Lease” means the lease dated 25 July 1995 made between the Landlord (1) TMG Financial Products (Europe) Limited (2) and The Mutual Life Assurance Company of Canada (3) which was assigned to the Tenant by an assignment dated 1 July 1998 and which the Tenant surrendered on 30 November 2004;

1.48“Surveyor” means any person appointed by the Landlord to perform the function of a surveyor or an accountant for any purpose of this Lease and includes any employee of the Landlord or of a Group Company of the Landlord appointed for that purpose and any person appointed by the Landlord to collect the rents or to manage the Building but does not include the Review Surveyor as defined in clause 5;

1.49“Tenant” means the party named as ‘Tenant’ in this Lease and includes the Tenant’s successors in title and assigns and, in the case of an individual, his personal representatives;

1.50“Term” means the term of years specified in clause 3.1;

1.51“Term Commencement Date” means 8 January, 2007;

1.52“Unit/s of Measurement” means the unit/s of square measurement determined in accordance with the Code of Measuring Practice;

1.53“Utilities” means water, soil, steam, air, gas, electricity, radio, television, telegraphic, telephone, telecommunications and other services and supplies of whatsoever nature;

1.54“Utilities Charges” means those utilities described in clause 7.3.1 which the Landlord incurs the cost of;

1.55“Value Added Tax” means value added tax as defined in the Value Added Tax Act 1994 and any tax of a similar nature substituted for, or levied in addition to, such value added tax;

1.56“Working Day” means any day, other than a Saturday or Sunday, on which clearing banks in the United Kingdom are open to the public for the transaction of business.

2.INTERPRETATION

Unless there is something in the subject or context inconsistent with the same:-

2.1every covenant by a party comprising more than one person shall be deemed to be made by such party jointly and severally;

2.2words importing persons shall include firms, companies and corporations and vice versa;

2.3any covenant by the Tenant not to do any act or thing shall include an obligation not to permit or suffer such act or thing to be done;

2.4any reference to the right of the Landlord to have access to, or to enter, the Premises shall be construed as extending to the Superior Landlord and to any mortgagee of the Landlord or the Superior Landlord and to all persons authorised by them, including agents, professional advisers, contractors, workmen and others;

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2.5any requirement that the Tenant must obtain the approval or consent of the Landlord in respect of any matter mentioned in this Lease includes a requirement that, where necessary under the Superior Lease, the approval or consent of the Superior Landlord must also be obtained in respect of that matter;

2.6any reference to a statute (whether specifically named or not) shall include any amendment or re-enactment of it for the time being in force, and all instruments, orders, notices, regulations, directions, bye-laws, permissions and plans for the time being made, issued or given under it, or deriving validity from it;

2.7all agreements and obligations by any party contained in this Lease (whether or not expressed to be covenants) shall be deemed to be, and shall be construed as, covenants by such party;

2.8the word “assignment” includes equitable assignment and the words “assign” and “assignee” shall be construed accordingly;

2.9the words “including” and “include” shall be deemed to be followed by the words “without limitation”;

2.10the titles or headings appearing in this Lease are for reference only and shall not affect its construction;

2.11any reference to a clause or schedule shall mean a clause or schedule of this Lease.

SECTION 2
GRANT OF LEASE

3.GRANT, RIGHTS AND OTHER MATTERS

3.1Demise and Term

In consideration of the rents, covenants and agreements reserved by, and contained in, this Lease to be paid and performed by the Tenant, the Landlord leases the Premises to the Tenant from and including the Term Commencement Date for the term expiring on 27 September 2013 paying the Rents to the Landlord in accordance with clause 4.

3.2Rights and Easements

There are granted the rights and easements set out in Schedule 1.

3.3Exceptions and reservations

There are excepted and reserved out of this Lease the rights and easements set out in Schedule 2.

3.4Third party rights

This Lease is granted subject to any rights, easements, reservations, privileges, covenants, restrictions, stipulations and other matters of whatever nature affecting the Premises including any exceptions or reservations and other matters contained or referred to in the Superior Lease and any matters contained or referred to in the deeds and documents listed in Schedule 6 so far as any of them relate to the Premises and are still subsisting and capable of taking effect.

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3.5No implied easements

Nothing contained in this Lease shall confer on, or grant to, the Tenant any easement, right or privilege, other than those expressly granted by this Lease.

3.6Covenants affecting reversion

The Tenant shall perform and observe the agreements, covenants, restrictions and stipulations contained or referred to in the deeds and documents listed in Schedule 6 so far as any of them relate to the Premises and are still subsisting and capable of taking effect.

3.7Encroachments and easements

The Tenant shall not stop up or obstruct any of the windows, lights, doorways, passages, openings, gratings or drains belonging to the Premises and shall not do or allow to be done anything which may interfere with the access of light or air to any part of the Premises or any Adjoining Property and shall not permit any new window, light, opening, doorway, passage, grating, drain, Conduit or other encroachment or easement to be made or acquired into, on or over the Premises or any part of them. If any person shall attempt to make or acquire any encroachment or easement whatsoever, the Tenant shall give written notice of that fact to the Landlord immediately it shall come to the notice of the Tenant and, at the request of the Landlord and at the cost of the Landlord, adopt such means as may be reasonably required by the Landlord for preventing any encroachment or the acquisition of any easement.

3.8Covenants relating to other property

Nothing contained in, or implied by, this Lease shall give the Tenant the benefit of, or the right to enforce or prevent the release or modification of, any covenant or agreement entered into by any tenant of the Landlord in respect of any property not comprised in this Lease.

3.9Landlord’s Covenants

Covenants on the part of the Landlord are covenants to do or not to do that which is covenanted for so long only as the Landlord remains entitled to the reversion immediately expectant on the determination of the Term.

3.10Rights of entry by Landlord

The Tenant shall permit the Landlord with all necessary materials and appliances to enter and remain on the Premises:-

3.10.1to examine the condition of the Premises and to take details of the landlord’s fixtures in them;

3.10.2to exercise reasonably any of the rights excepted and reserved by this Lease;

3.10.3for any purpose that, in the reasonable opinion of the Landlord, is necessary to enable it to comply with any covenant on its part contained in the Superior Lease even though the obligation to comply with such covenant may be imposed on the Tenant by this Lease;

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3.10.4inspecting, constructing, laying down, altering, repairing, cleansing, maintaining, replacing, removing or making connections to any Conduits used or to be used in connection with Adjoining Property;

3.10.5for any other reasonable purpose connected with the interest of the Landlord in the Premises or the Building, including valuing or disposing of the Landlord’s interest in them and taking any measurements, plans and sections of the Premises.

3.11Terms of entry by Landlord

In exercising any of the rights mentioned in clause 3.10, the Landlord or the person exercising the right shall:-

3.11.1only exercise it at reasonable times on prior notice (except in an emergency, when no notice need be given and when it can be exercised at any time);

3.11.2cause as little inconvenience as practicable to the Tenant or any other permitted occupier of any part of the Premises; and

3.11.3make good, as soon as practicable and to the reasonable satisfaction of the Tenant, any damage caused to the Premises,

but, in the case of the Superior Landlord exercising such right, without any obligation to pay any compensation for any damage, nuisance, annoyance or inconvenience thereby caused other than in circumstances of breach of the obligations in clauses 3.11.1, 3.11.2 and 3.11.3.

SECTION 3
FINANCIAL PROVISIONS

4.RENTS

4.1Tenant’s obligation to pay

The Tenant covenants to pay to the Landlord at all times during the Term:-

4.1.1yearly, and proportionately for any fraction of a year, the Initial Rent and from and including the Review Date, such yearly rent as shall become payable under clause 5;

4.1.2the Insurance Rent;

4.1.3the Service Charge;

4.1.4the Additional Rent;

4.1.5the Utilities Charges; and

4.1.6any Value Added Tax which may be chargeable in respect of the Principal Rent, the Insurance Rent, the Service Charge, the Additional Rent and the Utilities Charges.

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4.2Dates of payment of Principal Rent

The Principal Rent and any Value Added Tax chargeable on it shall be paid in 4 equal instalments in advance on each 25th March, 24th June, 29th September and 25th December in every year, provided that:

4.2.1the first payment of the Demise 1 Initial Rent, being a proportionate sum in respect of the period from and including the Demise 1 Rent Commencement Date to the day before the quarter day following the Demise 1 Rent Commencement Date, to be made on the Demise 1 Rent Commencement Date; and

4.2.2the first payment of the Demise 2 Initial Rent, being a proportionate sum in respect of the period from and including the Demise 2 Rent Commencement Date to the day before the quarter day following the Demise 2 Rent Commencement Date, to be made on the Demise 2 Rent Commencement Date.

4.3Method of payment of Principal Rent

The Principal Rent and any Value Added Tax chargeable on it shall be paid in such manner as the Landlord may, from time to time, determine so that the Landlord shall receive full value in cleared funds on the date when payment is due.

4.4Dates of payment of Insurance Rent and Additional Rent

The Insurance Rent and the Additional Rent and any Value Added Tax chargeable on either of them shall be paid on demand, the first payment of the Insurance Rent to be made on the date hereof.

4.5Dates of payment of Service Charge

The Service Charge and any Value Added Tax chargeable on it shall be paid on demand in accordance with clause 33.

4.6No right of set-off

Subject to any contrary statutory right, the Tenant shall not exercise any legal or equitable rights of set-off, deduction, abatement or counterclaim which it may have to reduce its liability for Rents.

5.RENT REVIEW

5.1Definitions

In this clause the following expressions shall have the following meanings:-

5.1.1“Open Market Rent” means the yearly rent which might reasonably be expected to become payable in respect of the Relevant Premises upon a letting of the Relevant Premises for office purposes in the open market with vacant possession at the Review Date by a willing landlord to a willing tenant as a whole (or, where the Relevant Premises comprise the whole of the Premises, in two parts) and without a premium being paid by either party for the grant of the lease for a term of 15 years with 5 yearly rent reviews commencing on the Review Date and otherwise on the terms and conditions and subject to the covenants and provisions contained in this Lease (other than the amount of the rent payable under this Lease and any rent free period allowed to the Tenant at

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the commencement of the term of this Lease and making the Assumptions but disregarding the Disregarded Matters;

5.1.2“Assumptions” means the following assumptions (if not facts) at the Review Date:-

(a)that the Relevant Premises are fit for immediate occupation and use and that all services required for occupation and use are connected to the Relevant Premises;

(b)that (save for any work carried out by the Landlord after the date hereof) no work has been carried out to the Relevant Premises which has diminished the rental value of the Relevant Premises;

(c)that if the Relevant Premises have been destroyed or damaged, they have been fully restored;

(d)that all the covenants on the part of the Tenant and the Landlord contained in this Lease have been fully performed and observed;

(e)that there are no statutory rent restrictions; and

(f)that, where appropriate, the Net Internal Area of the Premises is 8,974 square feet, of Demise 1 is 7,043 square feet and Demise 2 is 1,931 square feet;

5.1.3“Disregarded Matters” means:-

(a)any effect on rent of the fact that the Tenant or any permitted undertenant has been in occupation of the Relevant Premises;

(b)any goodwill attached to the Relevant Premises by reason of carrying on there of the business of the Tenant or any permitted undertenant;

(c)any effect on the rental value of the Relevant Premises attributable to the existence, at the Review Date, of any improvement to the Relevant Premises carried out by the Tenant or any permitted undertenant during the Term or during the term of the Surrendered Lease otherwise than in pursuance of any obligation to the Landlord (unless such obligation is imposed under a licence consenting to the making of such improvement or by a statute or regulation) and thereafter with the written consent of the Landlord where required and without any liability on the part of the Landlord to reimburse the cost of such improvement or any part thereof;

(d)any discount or abatement of the rent to allow for any concessionary rent or rent free period which a willing landlord would grant to a willing tenant on the hypothetical letting hereinbefore mentioned in respect of the willing tenant’s fitting out works.

5.1.4“Relevant Premises” means the Premises, Demise 1 or Demise 2, as the case may be;

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5.1.5“Review Surveyor” means an independent chartered surveyor of not less than 10 years standing, who is experienced in valuing and leasing property similar to the Premises and is acquainted with the market in the area in which the Premises are located appointed from time to time under this clause to determine the Open Market Rent.

5.2Rent reviews

The Principal Rent shall be reviewed at the Review Date in accordance with the provisions of this clause and from and including the Review Date the Principal Rent shall equal the highest of:-

5.2.1the Principal Rent contractually payable immediately before the Review Date (or which would be payable but for any suspension of rent (in whole or in part) under this Lease); and

5.2.2the Open Market Rent of the Premises on the Review Date as agreed or determined pursuant to this clause; and

5.2.3the aggregate of:-

(a)the higher of the Demise 1 Initial Rent and the Open Market Rent of Demise 1 on the Review Date as agreed or determined pursuant to this clause; and

(b)the higher of the Demise 2 Initial Rent and the Open Market Rent of Demise 2 on the Review Date as agreed or determined pursuant to this clause.

5.3Agreement or determination of the reviewed rent

The Open Market Rent at the Review Date may be agreed in writing at any time between the Landlord and the Tenant but if, for any reason, they have not so agreed, either party may (whether before or after the Review Date) by notice in writing to the other require the Open Market Rent to be determined by the Review Surveyor.

5.4Appointment of Review Surveyor

In default of agreement between the Landlord and the Tenant on the appointment of the Review Surveyor, the Review Surveyor shall be appointed by the President on the written application of either party, such application to be made not earlier than 3 months before the Review Date.

5.5Functions of Review Surveyor

The Review Surveyor shall:-

5.5.1act as an arbitrator in accordance with the Arbitration Act 1996;

5.5.2have power to order on a provisional basis any relief which he would have power to grant in a final award;

5.5.3within 60 days of the later of his appointment and the Review Date, or within such extended period as the Landlord and the Tenant may jointly agree in

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writing, give to each of them written notice of the amount of the Open Market Rent as determined by him.

5.6Fees of Review Surveyor

5.6.1The fees and expenses of the Review Surveyor, including the fee payable for his nomination, shall be in the award of the Review Surveyor but, failing such award, the same shall be payable by the Landlord and the Tenant in equal shares who shall each bear their own costs, fees and expenses.

5.6.2If either party fails to pay that party’s share of the fees and expenses of the Review Surveyor, including the fee payable for his nomination, within 5 Working Days after being required in writing to do so, the other party may pay such fees and expenses, and the share of the defaulting party shall become a debt payable to the other party on written demand (and, if the defaulting party is the Tenant, recoverable by the Landlord as rent in arrear) with interest on such share at the Prescribed Rate from and including the date of payment by the other party to the date of reimbursement by the defaulting party.

5.7Appointment of new Review Surveyor

If the Review Surveyor fails to give notice of his determination within the allotted time, or if he dies, is unwilling to act, or becomes incapable of acting, or if, for any other reason, he is unable to act, the Landlord or the Tenant may request the President to discharge the Review Surveyor and appoint another Review Surveyor in his place to act in the same capacity, which procedure may be repeated as many times as necessary.

5.8Interim payments pending determination

If the amount of the reviewed rent has not been agreed or determined by the Review Date (the date of agreement or determination being called the “Determination Date”), then:-

5.8.1in respect of the period (the “Interim Period”) beginning with the Review Date and ending on the day before the quarter day following the Determination Date, the Tenant shall pay to the Landlord the Principal Rent at the yearly rate payable immediately before the Review Date together with such further amounts (if any) as may be awarded by the Review Surveyor; and

5.8.2within 14 days after the Determination Date, the Tenant shall pay to the Landlord as arrears of rent the amount by which the reviewed rent exceeds the rent actually paid during the Interim Period (apportioned on a daily basis) together with interest on such amount at the Base Rate, such interest to be calculated on the amount of each quarterly shortfall on a day-to-day basis from the date on which it would have been payable if the reviewed rent had then been agreed or determined to the Determination Date.

5.9Rent Restrictions

If, at any time during the Term, restrictions are imposed by any statute for the control of rent which prevent or prohibit wholly or partly the operation of the rent review provisions contained in this clause or which operate to impose any limitation, whether in

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time or amount, on the collection and retention of any increase in the Principal Rent or any part then and in each case respectively:-

5.9.1the operation of the rent review provisions contained in this clause shall be postponed to take effect on the first date on which such operation (whether wholly or partially and with or without limited effect) may occur and in the case of restrictions which partially prevent or prohibit such operation and/or limit its effect on each such date;

5.9.2the collection of any increase in the rent shall be postponed to take effect on the first date on which such increase may be collected and/or retained in whole or in part and on as many occasions as shall be required to ensure the collection of the whole increase

and, until such restrictions shall be relaxed either wholly or partially, the Principal Rent shall be the maximum sum from time to time permitted by such restrictions.

5.10Memoranda of reviewed rent

Within 10 Working Days after the amount of any reviewed rent has been agreed or determined, memoranda recording that fact shall be prepared by the Landlord or its solicitors and shall be signed by or on behalf of the Landlord and the Tenant and any Guarantor and annexed to this Lease and its counterpart. The parties shall each bear their own costs in relation to the preparation and signing of such memoranda.

5.11Time not of the essence

For the purpose of this clause, time shall not be of the essence.

6.INTEREST

6.1Interest on late payments

Without prejudice to any other right, remedy or power contained in this Lease or otherwise available to the Landlord, if any of the Rents (whether formally demanded or not) or any other sum of money payable to the Landlord by the Tenant under this Lease shall not be paid so that the Landlord receives full value in cleared funds:-

6.1.1in the case of the Principal Rent and any Value Added Tax chargeable on it, on the date when payment is due (or, if the due date is not a Working Day, the next Working Day after the due date); or

6.1.2in the case of any other Rents or sums, within 10 Working Days of the date when payment is due

the Tenant shall pay interest on such Rents and/or sums at the Prescribed Rate from but excluding the date when payment was due to the date of payment to the Landlord (both before and after any judgment).

6.2Interest on refused payments

Without prejudice to any other right, remedy or power contained in this Lease or otherwise available to the Landlord, if the Landlord shall decline to accept any of the Rents so as not to waive any existing breach or alleged breach of covenant, the Tenant shall pay interest on such Rent at the Base Rate from and including the date when

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payment was due (or, where applicable, would have been due if demanded on the earliest date on which it could have been demanded) to the date when payment is accepted by the Landlord.

7.OUTGOINGS

7.1Tenant’s obligation to pay

The Tenant shall pay, or indemnify the Landlord against, all existing and future rates, taxes, duties, charges, assessments, impositions and other outgoings whatsoever (whether parliamentary, parochial, local or of any other description and whether or not of a capital or non-recurring nature or of a wholly novel character) which are now or may at any time during the Term be charged, levied, assessed or imposed upon, or payable in respect of, the Premises or upon the owner or occupier of them (excluding any tax payable by the Landlord occasioned by any disposition of, or dealing with, the reversion of this Lease) and, in the absence of a direct assessment on the Premises, shall pay to the Landlord a fair proportion (to be reasonably determined by the Landlord) of any such outgoings.

7.2Indemnity against void rating relief

The Tenant shall indemnify the Landlord against any loss to the Landlord of void rating relief which might have been applicable to the Premises by reason of the Premises being vacant after the end of the Term (or any earlier termination of it) on the ground that such relief has already been allowed to the Tenant.

7.3Costs of utilities etc.

The Tenant shall:-

7.3.1pay all charges for electricity, gas and water consumed in the Premises, including any connection and hiring charges and meter rents; and

7.3.2perform and observe all present and future regulations and requirements of the electricity, gas and water supply companies or boards in respect of the supply and consumption of electricity, gas and water on the Premises provided always that the Tenant shall not hereby be liable for any failure by the Landlord prior to the date of the Surrendered Lease to comply with any such regulations and requirements.

8.VALUE ADDED TAX

8.1Sums exclusive of VAT

All sums payable under this Lease by the Tenant to the Landlord (with the exception of the rent reserved in clause 4.1.6) shall be deemed to be exclusive of Value Added Tax.

8.2Tenant to pay VAT

Where pursuant to the terms of this Lease the Landlord makes a supply to the Tenant (other than a supply made in consideration for the payment of the Rents) and Value Added Tax is payable in respect of such supply, the Tenant shall pay to the Landlord on the date that payment in relation to such sum is due a sum equal to the amount of Value Added Tax so payable subject to the Landlord providing a valid VAT invoice and any

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penalty or interest incurred by the Landlord for any late payment of such Value Added Tax.

8.3VAT incurred by Landlord

Where the Tenant is required by the terms of this Lease to reimburse the Landlord for the costs or expenses of any supplies made to the Landlord, the Tenant shall also at the same time pay or, as the case may be, indemnify the Landlord against all Value Added Tax input tax incurred by the Landlord in respect of those supplies save to the extent that the Landlord is entitled to repayment or credit in respect of such Value Added Tax input tax.

9.TAXATION

Notwithstanding anything contained in this Lease, the Tenant shall:-

9.1not do on, or in relation to, the Premises or any part of them, or in relation to any interest of the Tenant in the Premises, any act or thing (other than the payment of the Rents) which shall render the Landlord liable for any tax, levy, charge or other fiscal imposition of whatsoever nature; and

9.2not dispose of, or deal with, this Lease in such a way that the Landlord shall be or become liable for any such tax, levy, charge or fiscal imposition provided that in the event the Landlord consents to a change of use of the Premises the Tenant shall not be liable for any such tax, levy, charge or fiscal imposition payable as a consequence of such consent.

10.LANDLORD’S COSTS

Within 10 Working Days of written demand, the Tenant shall pay, or indemnify the Landlord, the Superior Landlord and any mortgagee against, all reasonable costs, fees, charges, disbursements and expenses properly incurred by them, including those payable to solicitors, counsel, surveyors, architects and bailiffs:-

10.1in relation to, or in contemplation of, the preparation and service of a notice under section 146 of the Law of Property Act 1925 or any proceedings under section 146 or section 147 of that Act (whether or not any right of re-entry or forfeiture has been waived by the Landlord or a notice served under section 146 is complied with by the Tenant or the Tenant has been relieved under the provisions of that Act and even though forfeiture may be avoided otherwise than by relief granted by the court);

10.2in relation to, or in contemplation of, the preparation and service of all notices and schedules relating to any wants of repair, whether served during or after the expiration of the Term (but relating in all cases only to such wants of repair which accrued not later than the expiration or earlier determination of the Term);

10.3in connection with the recovery or attempted recovery of arrears of rent or other sums due from the Tenant, or in procuring the remedying of the breach of any covenant by the Tenant;

10.4in relation to any application for consent required or made necessary by this Lease (such costs to include reasonable management fees and expenses) whether or not it is granted (except in cases where the Landlord is obliged not to withhold its consent unreasonably

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and the withholding of its consent is held to be unreasonable), or the application is withdrawn provided that all costs incurred in relation to obtaining the Superior Landlord’s consent to this Lease shall be paid by the Landlord;

10.5in responding to any request made by the Tenant.

SECTION 4
REPAIRS, ALTERATIONS AND SIGNS

11.REPAIRS, DECORATION ETC.

11.1Repairs

Subject to clause 11.2, the Tenant shall:-

11.1.1keep Former Premises in no worse state of repair and condition than that detailed in the Schedule of Condition and otherwise keep in good repair and condition the remainder of Demise 1, and keep Demise 2 in no worse state of repair and condition than that specified in the Demise 2 Schedule of Condition and, as often as may be necessary, reinstate, rebuild or renew each part of them; and

11.1.2as and when necessary, replace any of the landlord’s fixtures and fittings which may be or become beyond repair with new ones which are similar in type and quality.

11.2Damage by the Insured Risks

There shall be excepted from the obligations contained in clause 11.1 any damage caused by the Insured Risks save to the extent that payment of the insurance monies shall be withheld by reason of any act, neglect or default of the Tenant, any undertenant or occupier or any of their respective agents, licensees, visitors or contractors or any person under the control of any of them.

11.3Decorations

The Tenant shall:-

11.3.1whenever requisite, but in any event not less frequently than in the Decoration Year and also in the last 3 months of the Term (whether determined by passage of time or otherwise), in a good and workmanlike manner prepare and decorate with at least two coats of good quality paint or otherwise treat, as appropriate, all parts of the Premises, such decorations and treatment in the last 3 months of the Term to be executed in such colours and materials as the Landlord may reasonably require;

11.3.2as often as may be reasonably necessary, wash down all tiles, glazed bricks and similar washable surfaces.

11.4Cleaning

The Tenant shall:-

11.4.1keep the Premises in a clean and tidy condition and employ only competent and respectable persons as cleaners;

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11.4.2 at least once in every month properly clean both sides of the windows or window frames and all other glass in the Premises.

11.5Carpeting

The Tenant shall maintain the carpets now, or from time to time, laid in the Premises and, when necessary, replace them with new carpets of equivalent quality and value.

12.YIELD UP

12.1Reinstatement of Premises

Immediately prior to the expiration or earlier determination of the Term, the Tenant shall at its cost:-

12.1.1replace any of the landlord’s fixtures and fittings which shall be missing, damaged or destroyed (damage by the Insured Risks excepted save to the extent that payment of the insurance money shall be withheld by reason of any act, neglect or default of the Tenant or any person under its control), with new ones of similar kind and quality or (at the option of the Landlord) pay to the Landlord (acting reasonably) the cost of replacing any of them;

12.1.2remove from the Premises any sign, writing or painting of the name or business of the Tenant or any occupier of them and all tenant’s fixtures, fittings, furniture and effects and make good, to the reasonable satisfaction of the Landlord, all damage caused by such removal;

12.1.3if so required by the Landlord, but not otherwise, remove and make good any alterations or additions made to the Premises during the Term (or made by the Tenant during any period of occupation prior to the commencement of the Term whether pursuant to a previous lease or otherwise), and well and substantially reinstate the Premises in such manner as the Landlord (acting reasonably) shall direct and to the Landlord’s reasonable satisfaction.

12.2Yielding up in good repair

At the expiration or earlier determination of the Term, the Tenant shall quietly yield up the Premises to the Landlord:

12.2.1in respect of the Former Premises in no worse state of repair and condition than that detailed in the Schedule of Condition;

12.2.2in respect of the remainder of Demise 1, in good and substantial repair and condition in accordance with its covenants in this Lease. For the avoidance of doubt this obligation shall include, but is not limited to, the following:-

(a)all internal walls shall be painted white;

(b)there shall be timber skirting around the perimeter;

(c)there shall be blinds at all windows (south elevation);

(d)there shall be net curtains to the atrium;

(e)the carpet shall be left in situ;

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(f)any internal partitioning or refurbishment  specific to  ITG shall be reinstated;

(g)any dividing walls between the Former Premises and the remainder of the Premises shall be reinstated complete with white paint and skirting; and

(h)all IT and communication cabling shall be removed from within the floor and associated floor trunkings; and

12.2.3in respect of Demise 2 in no worse state of repair and condition than that specified in the Demise 2 Schedule of Condition.

12.3Notice of selling or re-letting

To allow the Landlord at any time during the last 6 months of the Term (howsoever determined) to enter the Premises to fix and retain without interference upon any part of the Premises (but not so as to obscure the windows of the Premises) a notice for selling or re-letting and to allow persons with written authority from the Landlord or Superior Landlord at reasonable times of the day and after reasonable notice at all times during the Term to view the Premises.

13.COMPLIANCE WITH NOTICES

13.1Tenant to remedy breaches of covenant

Whenever the Landlord shall give written notice to the Tenant of any defects, wants of repair or breaches of covenant, the Tenant shall, within 30 Working Days of such notice, or sooner if reasonably requisite, make good such defects or wants of repair and remedy the breach of covenant to the reasonable satisfaction of the Landlord and in accordance with its obligations under this Lease.

13.2Failure of Tenant to repair

If the Tenant shall fail within 20 Working days of such notice, or as soon as reasonably possible in the case of emergency, to commence and then diligently and expeditiously to continue to comply with such notice, the Landlord may enter the Premises and carry out, or cause to be carried out, any of the works referred to in such notice and all costs and expenses incurred as a result shall be paid by the Tenant to the Landlord on demand and, in default of payment, shall be recoverable as rent in arrear.

14.ALTERATIONS

14.1No structural alterations or new building

The Tenant shall not erect or allow to be erected on the Premises any new or additional building nor make any external alteration or addition to the Premises nor make any structural alteration or addition to the Premises nor alter, cut into or remove any of the principal or load-bearing walls, floors, beams or columns in or enclosing the Premises.

14.2Non-structural alterations

The Tenant shall not make any alteration or addition of a non-structural nature to the Premises or any of the Landlord’s fixtures or to the internal design or construction thereof or to the electrical wiring, installation, heating plant and equipment or Conduits without the prior written consent of the Landlord (such consent (in the case of the

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Landlord only) not to be unreasonably withheld or delayed), but may install, alter or remove demountable partitioning in the Premises without the prior written consent of the Landlord.

14.3Covenants by Tenant and Security Deposit

The Tenant shall enter into such covenants as the Landlord may reasonably require regarding the execution of any works to which the Landlord consents under this clause and the reinstatement of the Premises at the end or earlier determination of the Term and, if reasonably required by the Landlord or Superior Landlord, the Tenant shall provide adequate security in the form of a deposit of money as assurance that the works shall be properly completed.

15.SIGNS AND ADVERTISEMENTS

The Tenant shall not erect or display on the exterior of the Premises or in the windows of them so as to be visible from the exterior, any figure, letter, bill, advertisement, poster, notice, pole, flag, aerial, satellite dish, placard, signboard or any other sign or thing but the Tenant may display on the entrance door to the Premises a sign stating the Tenant’s name and business or profession on obtaining the prior written approval of the Landlord to the size, style and position and the materials to be used, such approval not to be unreasonably withheld or delayed.

SECTION 5

USE

16.USE OF PREMISES

16.1Permitted use

The Tenant shall not use the Premises or any part of them except for the Permitted Use.

16.2Tenant not to leave Premises unoccupied

The Tenant shall not leave the Premises continuously unoccupied for more than 30 days without notifying the Landlord and providing, or paying for, such caretaking or security arrangements as the Landlord shall reasonably require in order to protect the Premises from vandalism, theft or unlawful occupation.

16.3Details of keyholders

The Tenant shall ensure that, at all times, the Landlord has particulars of the name, home address and home telephone number of at least two keyholders of the Premises.

16.4Keys to be given to Landlord

The Tenant shall provide the Landlord with a set of keys to the Premises to enable the Landlord or its agents and others authorised by the Landlord to enter the Premises for security purposes or in cases of emergency.

17.USE RESTRICTIONS

The Tenant shall perform and observe the obligations set out in Schedule 3.

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18.LANDLORD’S REGULATIONS

The Tenant shall comply with all reasonable regulations made by the Landlord from time to time and notified to the Tenant in writing for the general management and security of the Building, the Common Parts and other areas used or to be used in common with others.

19.USE OF PREMISES OUTSIDE BUSINESS HOURS

If from time to time the Tenant wants to use the Premises outside Business Hours, then the Tenant shall be entitled to use the Premises and to have access to them on the following terms:-

19.1the Tenant shall pay to the Landlord on written demand the whole of the expenses attributable to the provision of any such staff, services and security to the Premises outside Business Hours; and

19.2the Landlord shall not be obliged to provide any services to the Building in general or to the Premises in particular if the Landlord, having used its reasonable endeavours, is unable to do so.

20.EXCLUSION OF WARRANTY AS TO USER

20.1No warranty by Landlord

Nothing contained in this Lease, or in any consent or approval granted by the Landlord under this Lease, shall imply or warrant that the Premises may be used under the Planning Acts for the purpose permitted by this Lease or any purpose subsequently permitted.

20.2Tenant’s acknowledgement

The Tenant acknowledges that neither the Landlord nor any person acting on behalf of the Landlord has at any time made any representation or given any warranty that any use permitted by this Lease is, will be, or will remain, a use authorised under the Planning Acts.

20.3Tenant to remain bound

Even though any such use may not be a use authorised under the Planning Acts, the Tenant shall remain fully liable to the Landlord in respect of the obligations undertaken by the Tenant in this Lease without being entitled to any compensation, recompense or relief of any kind.

SECTION 6

DISPOSALS

21.GENERAL RESTRICTIONS

21.1Alienation generally

The Tenant shall not assign, charge, underlet or part with possession or share the occupation of, or permit any person to occupy, or create any trust in respect of the Tenant’s interest in, the whole or any part of the Premises, except as may be expressly permitted by this clause and clauses 22 and 23.

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21.2Sharing with a Group Company

Nothing in this clause or clauses 22 and 23 shall prevent the Tenant from sharing occupation of the whole or any part of the Premises with any company which is, for the time being, a Group Company of the Tenant subject to (a) the Tenant giving to the Landlord written notice of the sharing of occupation and the name of the Group Company concerned within 5 Working Days after the sharing begins (b) the Tenant and that Group Company remaining in the same relationship whilst the sharing lasts and (c) the sharing not creating the relationship of landlord and tenant between the Tenant and that Group Company.

22.ASSIGNMENT

22.1No Assignment of Part

The Tenant shall not assign any part or parts (as distinct from the whole) of the Premises.

22.2Circumstances in which consent to Assignment may be withheld

For the purposes of Section 19(1A) of the Landlord and Tenant Act 1927 it is agreed that the Landlord may withhold its consent to an assignment of the whole of the Premises in the following circumstances:-

22.2.1Where the proposed assignee is not resident in, or in the case of a body corporate, is not incorporated in the United Kingdom.

22.2.2Where the proposed assignee is a Group Company of the Tenant save where the Landlord (acting reasonably) is satisfied of the financial standing of the proposed assignee considered independently of the Tenant.

22.2.3Where the proposed assignee is any person or entity who has the right to claim sovereign or diplomatic immunity or exemption from liability from the covenants on the part of the Tenant contained in this Lease.

22.2.4Where the proposed assignee is any person or entity in relation to whom any of the events mentioned in Clause 31.2 of this Lease would have occurred if that person or entity were the Tenant under this Lease.

22.2.5Where any Rents or other payment due under this Lease has not been paid prior to completion of the assignment.

22.3Conditions for Landlord’s Consent

For the purposes of Section 19(1A) of the Landlord and Tenant Act 1927 it is further agreed that any consent of the Landlord to an assignment of the whole of the Premises may where reasonable be subject to:-

22.3.1a condition requiring the proposed assignee upon completion of the proposed assignment either:-

(a)to deposit in such account as may be specified by the Landlord a sum equivalent to the Rents reasonably estimated by the Landlord to be prospectively payable for a period of 2 years from the date of completion of the proposed assignment and to deliver to the Landlord a duly executed Deed of Deposit in such form as the Landlord may reasonably require; or

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(b)to deliver to the Landlord a guarantee in favour of the Landlord by one of the English London Clearing Banks in a form first approved in writing by the Landlord (such approval not to be unreasonably withheld) covering the Rents reasonably estimated by the Landlord to be prospectively payable for a period of 2 years from the date of completion of the proposed assignment.

22.3.2a condition that the Tenant shall, prior to the proposed assignment being completed, execute and deliver to the Landlord a deed which shall be prepared by the Landlord’s solicitors containing covenants on the part of the Tenant in the form of those contained in Schedule 7 (therein defined as the “Present Tenant”).

22.3.3a condition that the Guarantor shall, prior to the proposed assignment being completed, execute and deliver to the Landlord a deed which shall be prepared by the Landlord’s solicitors containing covenants on the part of the Guarantor in the form of those contained in Schedule 7.

22.3.4a condition that the Tenant (having received a 1954 Act Notice from the Landlord) shall make a 1954 Act Statutory Declaration in relation to the new lease of the Premises referred to in paragraph 4 of Schedule 7;

22.3.5a condition that the Guarantor (having received a 1954 Act Notice from the Landlord) shall make a 1954 Act Statutory Declaration in relation to the new lease of the Premises referred to in paragraph 8 of Schedule 7;

22.3.6a condition that any guarantor of the assignee (having received a 1954 Act Notice from the Landlord) shall make a 1954 Act Statutory Declaration in relation to the new lease of the Premises referred to in paragraph 7 of Schedule 4.

22.4Assignment of the whole

Without prejudice to the provisions of clauses 21 to 22.3 inclusive the Tenant shall not assign the whole of the Premises without the prior written consent of the Landlord any Superior Landlord and any mortgagee whose consent to an assignment of the Premises may be required and except in relation to the circumstances mentioned in clause 22.2 and the conditions mentioned in clause 22.3 such consent (by the Landlord only) shall not be unreasonably withheld. The parties agree that in considering whether or not the Landlord is reasonably withholding such consent due and proper regard shall be had to the provisions and effect of the Landlord and Tenant (Covenants) Act 1995.

22.5S.144 LPA 1925

To the extent (if any) necessary to make the foregoing provisions of this Lease effective but not further or otherwise) Section 144 of the Law of Property Act 1925 shall not apply.

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23.UNDERLETTING

23.1Underletting of part

23.1.1For the purpose of this clause, “Subletting Unit” means a part of the Premises which is capable of being occupied and used as a separate and self-contained unit with all necessary and proper services.

23.1.2The Tenant shall not underlet any part of the Premises other than on condition that:-

(a)the Premises shall not at any time be in the occupation of more than two persons, the Tenant together with any Group Company which is permitted to share occupation under clause 21.2 counting as one;

(b)the part of the premises to be underlet shall comprise a Subletting Unit only;

(c)if the Landlord shall reasonably so require, the Tenant shall obtain an acceptable guarantor for any proposed undertenant and such guarantor shall execute and deliver to the Landlord a deed containing covenants by that guarantor (or, if more than one, joint and several covenants) with the Landlord, as a primary obligation, in the terms contained in Schedule 4 (with any necessary changes reasonably required by the Landlord) or in such other terms as the Landlord may reasonably require;

(d)before the underlease is completed, or, if earlier, before the undertenant becomes contractually bound to enter the lease and, if appropriate, any guarantor becomes contractually bound to enter into a new lease of the underlet premises pursuant to the terms set out in the guarantee, the underlease and the guarantee are validly excluded from the operation of sections 24 to 28 (inclusive) of the 1954 Act, in accordance with the provisions of section 38A of the 1954 Act and the Tenant provides to the Landlord such written evidence as shall be reasonably satisfactory to the Landlord of such valid exclusions;

(e)the underlease incorporates the agreement or a reference to the agreement between the parties under section 38A(1) of the 1954 Act for the exclusion of sections 24 to 28 of the 1954 Act in relation to such underlease and any guarantor who may be required to take a lease, and the form of the 1954 Act Notice served by the Tenant on the undertenant and any guarantor of the undertenant (who may be required to take a lease) and the 1954 Act Statutory Declaration made by the undertenant and any guarantor of the undertenant (who may be required to take a lease).

23.2Underletting of the whole

The Tenant shall not underlet the whole of the Premises other than on condition that:-

23.2.1if the Landlord shall reasonably so require, the Tenant obtains an acceptable guarantor for any proposed undertenant and such guarantor shall execute and deliver to the Landlord a deed containing covenants by that guarantor (or, if

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more than one, joint and several covenants) with the Landlord, as a primary obligation, in the terms contained in Schedule 4 (with any necessary changes) or in such other terms as the Landlord may reasonably require; and

23.2.2before the underlease is completed, or, if earlier, before the undertenant becomes contractually bound to enter the lease and any guarantor (who may be required to take a lease) becomes contractually bound to enter into a new lease of the underlet premises pursuant to the terms set out in the guarantee, the underlease and the guarantee are validly excluded from the operation of sections 24 to 28 (inclusive) of the 1954 Act, in accordance with the provisions of section 38A of the 1954 Act and the Tenant provides to the Landlord such written evidence as shall be reasonably satisfactory to the Landlord of such valid exclusions; and

23.2.3the underlease incorporates the agreement or a reference to the agreement between the parties under section 38A(1) of the 1954 Act for the exclusion of Sections 24 to 28 of the 1954 Act in relation to such underlease and any guarantor (who may be required to take a lease), and a reference to the 1954 Act Notice served by the Tenant on the undertenant and any guarantor of the undertenant (who may be required to take a lease) and to the 1954 Act Statutory Declaration made by the undertenant and any guarantor of the undertenant (who may be required to take a lease).

23.3Underletting rent

The Tenant shall not underlet the whole of the Premises or a Subletting Unit at a fine or premium or at a rent less than the higher of the rent payable under this Lease or, in the case of a Subletting Unit, pro rata on an area basis and the open market rent of the Premises or, in the case of a Subletting Unit, of the Subletting Unit in question, in each case, at the time of such underlease.

23.4Direct covenants from undertenant

Prior to any permitted underlease, the Tenant shall procure that the undertenant enters into the following direct covenants with the Landlord:-

23.4.1an unqualified covenant by the undertenant not to assign or charge any part (as distinct from the whole) of the premises to be underlet;

23.4.2an unqualified covenant by the undertenant not to underlet the whole or any part of the premises to be underlet nor (save by way of an assignment of the whole of the premises to be underlet) part with possession or share the occupation of the whole or any part of the premises to be underlet or permit any person to occupy them;

23.4.3a covenant by the undertenant not to assign, or charge the whole of the premises to be underlet without the prior written consent of the Landlord, such consent (in the case of the Landlord only) not to be unreasonably withheld (or delayed);

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23.4.4a covenant by the undertenant to perform and observe all the tenant’s covenants contained in (a) this Lease (other than the payment of the Rents) insofar as they relate to the Premises to be underlet and (b) the permitted underlease.

23.5Contents of underlease

Every permitted underlease (a final copy of which shall be supplied to, and approved by, the Landlord prior to its grant, such approval not to be unreasonably withheld) shall contain: -

23.5.1provisions for the review of the rent payable under it on an upwards only basis corresponding both as to terms and dates with the rent review provisions in this Lease;

23.5.2a covenant by the undertenant (which the Tenant covenants to enforce) prohibiting the undertenant from doing or suffering any act or thing on, or in relation to, the premises underlet inconsistent with, or in breach of, this Lease;

23.5.3a condition for re-entry on breach of any covenant by the undertenant;

23.5.4the same restrictions as to assignment, underletting, charging and parting with or sharing the possession or occupation of the premises underlet, and the same provisions for direct covenants and registration, as are in this Lease (with any necessary changes).

23.6Tenant to obtain Landlord’s consent

Without prejudice to the other provisions of this clause, the Tenant shall not underlet the whole of the Premises or underlet a Subletting Unit without the prior written consent of the Landlord, such consent (in the case of the Landlord only), not to be unreasonably withheld or delayed.

23.7Tenant to enforce obligations

The Tenant shall enforce the performance and observance of the covenants by the undertenant contained in any permitted underlease and shall not, at any time, either expressly or by implication, waive any breach of them.

23.8Review of underlease rent

The Tenant shall:-

23.8.1procure that the rent under any permitted underlease is reviewed in accordance with its terms but shall not agree any reviewed rent with the undertenant nor any rent payable on any renewal of it without the prior written consent of the Landlord (such consent not to be unreasonably withheld); and

23.8.2procure that the Landlord’s representations as to the rent payable under that underlease are made to the independent person appointed to determine the rent under the underlease to the reasonable satisfaction of the Landlord.

23.9No variation of terms

The Tenant shall not vary the terms of any permitted underlease, without the prior written consent of the Landlord, such consent not to be unreasonably withheld.

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23.10No reduction in rent

The Tenant shall procure that the rent payable under any permitted underlease is not commuted or made payable more than one quarter in advance, and shall not permit any reduction of that rent.

24.REGISTRATION OF DISPOSITIONS

Within 10 Working Days of every assignment, transfer, assent, underlease, assignment of underlease, mortgage, charge or any other disposition, whether mediate or immediate, of or relating to the Premises, the Tenant shall provide the Landlord or its solicitors with 2 copies (certified as true) of the deed, instrument or other document evidencing or effecting such disposition and, on each occasion, shall pay to the Landlord or its solicitors a fee of £25.00 or such larger sum as may be reasonable.

SECTION 7

LEGAL REQUIREMENTS

25.STATUTORY REQUIREMENTS

25.1Tenant to comply with statutes

The Tenant shall, at its expense, comply in all respects with every statute now in force or which may, after the date of this Lease, be in force and any other obligation imposed by law and all regulations laws or directives made or issued by or with the authority of The European Commission and/or The Council of Ministers relating to the Premises or their use by the Tenant, including (but without limitation) the Offices, Shops and Railway Premises Act 1963, the Fire Precautions Act 1971, the Defective Premises Act 1972, the Health and Safety at Work etc. Act 1974, the Environmental Protection Act 1990, the Water Resources Act 1991, the Environment Act 1995 and the Disability Discrimination Act 1995.

25.2Tenant to execute necessary works

The Tenant shall execute all works and provide and maintain all arrangements on or in respect of the Premises which are directed or required as a result of the Tenant’s use of the Premises and which are required by any statute now in force or which may after the date of this Lease be in force or by any government department, local, public or other competent authority or court of competent jurisdiction acting under or in pursuance of any statute, whether any of the same are required to be carried out by the landlord, tenant or occupier, and shall indemnify the Landlord against all reasonable costs, charges, fees and expenses of, or incidental to, the execution of any works or the provision or maintenance of any arrangements so required.

25.3Tenant to refrain from certain acts

The Tenant shall not do, or omit to be done, in or near the Premises, any act or thing by reason of which the Landlord may, under any statute, incur or have imposed upon it, or become liable to pay, any damages, compensation, costs, charges, expenses or penalty provided always that the Tenant shall not hereby be liable for any failure by the Landlord prior to the date of the Surrendered Lease to comply with any statute now in force relating to the Building or Premises.

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26.           PLANNING ACTS

26.1Tenant’s obligation to comply

The Tenant shall comply with provisions and requirements of the Planning Acts which arise as a result of the Tenant’s occupation and use of the Premises and with any planning permission relating to, or affecting, the Premises, and indemnify the Landlord against all actions, proceedings, claims, demands, losses, costs, expenses, damages and liability whatsoever in respect of any non-compliance provided that the Tenant shall not be liable hereby for any failure by the Landlord prior to the date of the Surrendered Lease to comply with such planning permission or the Planning Acts.

26.2No application for planning permission without consent

The Tenant shall not make any application for planning permission or for other consents required under the Planning Acts in respect of the Premises without the prior written consent of the Landlord, such consent (in the case of the Landlord only) not to be unreasonably withheld or delayed where the application does not include a change of use.

26.3Tenant to obtain all permissions

The Tenant shall, at its expense, obtain and, if appropriate, renew any planning permission and any other consent and serve all necessary notices required for the carrying out by the Tenant of any operations or the commencement or continuance of any use on the Premises.

26.4Tenant to pay planning charges

The Tenant shall pay and satisfy any charge or levy imposed under the Planning Acts in respect of any Development by the Tenant on the Premises.

26.5No implementation of permission without approval

The Tenant shall not implement any planning permission or consent required under the Planning Acts before it has been produced to, and approved in writing by, the Landlord, such approval (in the case of the Landlord only) not to be unreasonably withheld but the Landlord may refuse to approve such planning permission or consent on the grounds that any condition contained in it, or anything omitted from it, or the period referred to in it, would, in the reasonable opinion of the Landlord, be or be likely to be prejudicial to the Landlord’s interest in the Premises or the Building or in any Adjoining Property, whether during or following the expiration or earlier determination of the Term.

26.6Tenant to carry out works before end of Term

Unless the Landlord shall otherwise direct in writing, the Tenant shall carry out and complete before the expiration or earlier determination of the Term:-

26.6.1any works required to be carried out to the Premises as a condition of any planning permission granted during the Term and implemented by the Tenant whether or not the date by which the planning permission requires such works to be carried out is within the Term; and

26.6.2any Development begun upon the Premises in respect of which the Landlord may be or become liable for any charge or levy under the Planning Acts.

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26.7Plans etc. to be produced

The Tenant shall produce to the Landlord on demand all plans, documents and other evidence as the Landlord may reasonably require in order to satisfy itself that this clause 26 has been complied with.

26.8Planning conditions

Where a planning permission has been granted subject to conditions, the Landlord shall be entitled, where it is reasonable to do so, to require the Tenant to provide security for compliance with such conditions, and the Tenant shall not implement the planning permission until security shall have been provided to the reasonable satisfaction of the Landlord.

26.9Planning refusal

If reasonably required by the Landlord but at the cost of the Tenant, the Tenant shall appeal against any refusal of planning permission or the imposition of any condition in a planning permission relating to the Premises following an application made by the Tenant.

27. STATUTORY NOTICES

27.1Notices Generally

The Tenant shall:-

27.1.1within 5 days (or sooner if necessary having regard to the requirements of the notice or order in question or the time limits stated in it) of receipt of any notice or order or proposal for a notice or order given to the Tenant and relevant to the Premises or any occupier of them by any government department, local, public or other competent authority or court of competent jurisdiction, provide the Landlord with a true copy of it and any further particulars required by the Landlord;

27.1.2without delay, and at the Tenant’s cost, take all necessary steps to comply with the notice or order; and

27.1.3at the request of the Landlord and cost of the Landlord, make or join with the Landlord in making such objection, complaint, representation or appeal against or in respect of any such notice, order or proposal as the Landlord shall deem expedient.

27.2Party Wall etc. Act 1996

The Tenant shall:-

27.2.1Forthwith after receipt by the Tenant of any notice served on the Tenant under the Party Wall etc. Act 1996 provide the Landlord with a true copy of it and of any further particulars required by the Landlord;

27.2.2At the request of the Landlord and at the cost of the Landlord make or join with the Landlord in making such objection complaint representation and in serving such counter notice against or in respect of any such notice as the Landlord shall deem expedient;

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27.2.3At the request of the Landlord and at the cost of the Landlord make or join with the Landlord in serving any such notice on any adjoining owner under the Party Wall etc. Act 1996 as the Landlord may from time to time require.

28.FIRE PRECAUTIONS AND EQUIPMENT

28.1Compliance with requirements

The Tenant shall comply with the requirements and recommendations of the fire authority and the insurers of the Building and the reasonable requirements of the Landlord in relation to fire precautions affecting the Premises provided that the Tenant shall not be liable hereby for any failure by the Landlord prior to the date of the Surrendered Lease to comply with such requirements and recommendations.

28.2Fire fighting appliances to be supplied

The Tenant shall keep the Premises equipped with such fire fighting appliances as shall be required by any statute, the fire authority or the insurers of the Building, or as shall be reasonably required by the Landlord or the Superior Landlord (or, at the Landlord’s option, the Tenant shall pay to the Landlord on demand the cost of providing and installing any such appliances) and the Tenant shall keep such appliances open to inspection and maintained to the reasonable satisfaction of the Landlord and cause any sprinkler system and other fire fighting equipment to be inspected at reasonable intervals by a competent person.

28.3Access to be kept clear

The Tenant shall not obstruct the access to, or means of working, any fire fighting appliances or the means of escape from the Premises or the Building in case of fire or other emergency.

29.DEFECTIVE PREMISES

Immediately upon becoming aware of the same, the Tenant shall give written notice to the Landlord of any defect in the Premises which might give rise to an obligation on the Landlord to do, or refrain from doing, any act or thing so as to comply with any duty of care imposed on the Landlord under the Defective Premises Act 1972, and shall display and maintain in the Premises all notices which the Landlord may, from time to time, reasonably require to be displayed in relation to any such matters.

SECTION 8

INSURANCE

30.INSURANCE PROVISIONS

30.1Buildings insurance

The Landlord shall use reasonable endeavours to procure that the Building is insured and kept insured by the Superior Landlord against loss or damage by the Insured Risks in accordance with the Superior Landlord’s covenants in that behalf contained in the Superior Lease.

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30.2Noting of Interest

The Landlord shall use its reasonable endeavours to secure the noting of the Tenant’s interest upon the policy or policies of insurance and to ensure the insurers waive any rights of subrogation which they may have against the Tenant.

30.3Option to determine

If the Premises or the Building shall be so damaged or destroyed by any of the Insured Risks as to render them substantially unfit for use and occupation or inaccessible and if the Superior Landlord does not reinstate or rebuild them at the end of 4 years and 11 months from the date of damage or destruction, then the Landlord or the Tenant may at any time thereafter determine this Lease by giving to the other not less than 1 month’s written notice to be given at any time but such determination shall be without prejudice to any claim which the Landlord may have against the Tenant or any Guarantor or which the Tenant may have against the Landlord for any previous breach of covenant or sum previously accrued due.

30.4Payment of insurance money refused

If payment of any insurance money is refused as a result of some act or default of the Tenant, any undertenant or occupier of any part of the Premises or any of their respective agents, licensees, visitors or contractors or any person under the control of any of them, the Tenant shall pay to the Landlord, on written demand, the amount so refused with interest on that amount at the Prescribed Rate from and including the date of such refusal to the date of payment by the Tenant.

30.5Suspension of rent payments

If the Premises or the Building or any part of them shall be damaged or destroyed by any of the Insured Risks so as to render the Premises unfit for use and occupation or inaccessible, the Principal Rent, or a fair proportion of it according to the nature and extent of the damage sustained, shall not be payable until the Premises or the part damaged or destroyed shall be again rendered fit for use and occupation and accessible or for a period equal to the number of years for which insurance against loss of rent has been effected pursuant to the Superior Lease (whichever is the earlier). Such suspension of rent shall be conditional upon the insurance not having been vitiated or payment of the policy monies refused wholly or partly as a result of some act or default of the Tenant, any undertenant or occupier of any part of the Premises or any of their respective agents, licensees, visitors or contractors or any person under the control of any of them. Any dispute regarding the suspension of payment of the Principal Rent shall be referred to a single arbitrator to be appointed, in default of agreement, upon the application of either party, by the President in accordance with the Arbitration Act 1996 PROVIDED that if the circumstances envisaged by Clause 30.5 occur before the Rent Commencement Date the period during which the Principal Rent ceases to be payable pursuant to Clause 30.5 shall be extended by the number of days from and including the date of damage or destruction to and including the day before the Rent Commencement Date.

30.6Benefit of other insurances

If the Tenant shall become entitled to the benefit of any insurance covering any part of the Premises which is not effected or maintained in pursuance of the obligations contained in this Lease, the Tenant shall apply any money received from such insurance

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(in so far as it extends) in making good the loss or damage in respect of which it shall have been received.

30.7Insurance becoming void

The Tenant shall not do, or omit to do:-

30.7.1anything which could cause any policy of insurance covering the Premises or the Building or any Adjoining Property owned by the Landlord or the Superior Landlord to become wholly or partly void or voidable; or

30.7.2anything whereby any abnormal or loaded premium may become payable in respect of the policy,

and, in any event, the Tenant shall pay to the Landlord on written demand all expenses incurred by the Superior Landlord in renewing any such policy.

30.8Requirements of insurers

The Tenant shall, at all times, comply with any known requirements and recommendations of the insurers of the Building so far as such requirements relate to the Premises and the use thereof by the Tenant.

30.9Notice by Tenant

The Tenant shall give notice to the Landlord immediately on the happening of any event or thing which might affect any insurance policy relating to the Premises or the Building.

SECTION 9
DEFAULT OF TENANT AND RIGHTS OF RE-ENTRY

31.DEFAULT OF TENANT

31.1Re-entry

Without prejudice to any other right, remedy or power contained in this Lease or otherwise available to the Landlord, on or at any time after the happening of any of the events mentioned in clause 31.2, the Landlord may re-enter the Premises or any part of them in the name of the whole, and the Term shall then end, but without prejudice to any claim which the Landlord may have against the Tenant or any Guarantor for any previous breach of covenant or sum previously accrued due.

31.2Events of default

The events referred to in clause 31.1 are the following:-

31.2.1if the Rents or any part of them shall be unpaid for 10 Working Days after becoming payable (whether formally demanded or not); or

31.2.2if any of the covenants by the Tenant contained in this Lease shall not be performed and observed; or

31.2.3if the Tenant, for the time being, and/or the Guarantor (if any) (being a body corporate or a partnership):-

(a)calls, or a nominee on its behalf calls, a meeting of any of its creditors; or makes an application to the Court under Section 425 of the Companies

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Act 1985; or submits to any of its creditors a proposal under Part I of the Insolvency Act 1986; or enters into any arrangement, scheme, compromise, moratorium or composition with any of its creditors (whether under Part I of the Insolvency Act 1986 or otherwise); or

(b)has an administrative receiver or a receiver or a receiver and manager appointed in respect of the Tenant’s or the Guarantor’s property or assets or any part; or

(c)resolves or any person resolves to present a petition or application for the making of an administration order or to appoint an administrator in respect of the Tenant or the Guarantor (as the case may be) or a person (who is entitled to do so) gives notice of its intention to appoint an administrator to it or files such a notice with the court; or

(d)has an administrator appointed in respect of it; or

(e)has a winding-up petition or petition or application for the making of an administration order presented against it; or passes a winding-up resolution (other than a voluntary winding-up whilst solvent for the purposes of an amalgamation or reconstruction which has the prior written approval of the Landlord); or calls a meeting of its creditors for the purposes of considering a resolution that it be wound-up voluntarily; or resolves to present its own winding-up petition; or is wound-up (whether in England or elsewhere); or has a liquidator or provisional liquidator appointed; or

(f)shall cease for any reason to maintain its corporate existence; or is struck off the register of companies; or otherwise ceases to exist; or

31.2.4if any person gives notice of that person’s intention to appoint an administrator to the Tenant and/or Guarantor (if any) (the Tenant, for the time being, and/or the Guarantor (if any) being a body corporate or a partnership);or

31.2.5if the Tenant, for the time being, and/or the Guarantor (if any) (being an individual, or if more than one individual, then any one of them) makes an application to the Court for an interim order under Part VIII of the Insolvency
Act 1986; or convenes a meeting of, or enters into any arrangement, scheme, compromise, moratorium or composition with, any of his creditors (whether under Part VIII of the Insolvency Act 1986 or otherwise); or has a bankruptcy petition presented against him or is adjudged bankrupt (whether in England or elsewhere); or has a receiver appointed in respect of the Tenant’s or the Guarantor’s property or assets or any part; or

31.2.6if analogous proceedings or events to those referred to in this clause shall be instituted or occur in relation to the Tenant, for the time being, and/or the Guarantor (if any) elsewhere than in the United Kingdom; or

31.2.7if the Tenant, for the time being, and/or the Guarantor (if any) suffers any distress or execution to be levied on the Premises which is not discharged in full

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within 21 days after the levy has been made; or becomes unable to pay its debts as and when they fall due.

SECTION 10
LANDLORD’S SERVICES AND SERVICE CHARGE

32.LANDLORD’S SERVICES

32.1Provision of Services

Subject to the Tenant paying the Service Charge, the Landlord covenants with the Tenant that it shall use reasonable endeavours to provide the following services in accordance with the principles of good estate management:-

32.1.1Repairs

So far as may be necessary for the reasonable use and enjoyment by the Tenant of the Premises and the Building, to keep the Retained Parts in good repair and condition;

32.1.2Common Parts

To keep clean and maintained in a proper manner the Common Parts, including their windows, and any lavatory or kitchen of which the Tenant has the use, and, where appropriate, to keep them adequately lighted during Business Hours;

32.1.3Lift(s)

During Business Hours, to provide a lift service by the operation of the lifts now installed in the Building or by such substituted lifts as the Landlord may, in its discretion, from time to time install and to keep such lifts in working order and to carry out any repairs to the lifts as soon as reasonably practicable;

32.1.4Hot and cold water

During Business Hours, to provide an adequate supply of hot water and cold water to the wash basins in any lavatory or kitchen in Demise 1 of which the Tenant has the use;

32.1.5Heating

During Business Hours, to provide to the Premises and the Common Parts heating to such temperature as the Landlord may from time to time consider adequate and for such periods of the year as the Landlord may consider desirable;

32.1.6Air Conditioning

During Business Hours, to provide air conditioning to the Premises to such standard as the air conditioning system was designed to achieve;

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32.1.7Staff

To employ such staff as the Landlord may, in its discretion, deem desirable or necessary to enable it to provide any of the services in the Building and for its general management and security;

32.1.8Name Boards

To provide name boards of such size and design as the Landlord may, in its discretion, determine in the main entrance to the Building and at such other locations as the Landlord may consider desirable;

32.2Appointment of agents

In performing its obligations under this clause, the Landlord shall be entitled to employ such agents, contractors or other persons as it may think fit, and to delegate its duties and powers to them and their fees and expenses shall form part of the Expenditure (as defined in clause 33).

32.3Variation of services

The Landlord may, at its discretion, add to, extend, vary or withhold from time to time any of the services referred to in this clause if the Landlord shall reasonably consider it desirable to do so for the more efficient management, operation or security of the Building, or for the comfort of the tenants in the Building but so that the quality of the services in Clause 32 above shall not be materially diminished.

32.4Failure by Landlord to provide services

The Landlord shall not be liable to the Tenant in respect of any failure by the Landlord to perform any of the services referred to in this clause unless the Tenant has given to the Landlord written notice of the failure in question and the Landlord has failed within a reasonable time to remedy it, and then the Landlord shall be liable to compensate the Tenant only for any loss or damage sustained by the Tenant after that reasonable time has elapsed.

32.5Exclusion of Landlord’s liability

The Landlord shall not incur any liability for any failure or interruption in any of the services to be provided by the Landlord or for any inconvenience or injury to person or property arising from that failure or interruption, in either case due to any maintenance, servicing, repair, replacement, mechanical breakdown, failure, malfunction, shortages, labour disputes or any cause or circumstance beyond the control of the Landlord, but the Landlord shall use reasonable endeavours to cause the service in question to be reinstated with the minimum of delay.

33.SERVICE CHARGE

33.1Definitions

In this Lease:-

33.1.1“Accountant” means any person appointed by the Landlord (including any employee of the Landlord or of a Group Company of the Landlord) to perform the function of an accountant in relation to the Expenditure;

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33.1.2“Advance Payment” means the Service Charge Percentage of the Estimated Expenditure;

33.1.3“Estimated Expenditure” means, for any Financial Year during the Term, such sum as the Landlord may, from time to time, specify as being a fair and reasonable estimate of the Expenditure for the current Financial Year based on a budget prepared by the Landlord and submitted to the Tenant, and includes, for the Financial Year in question, any revised budget of the Landlord’s estimate of the Expenditure for that Financial Year;

33.1.4“Expenditure” means:-

(a)the aggregate of all costs, expenses and outgoings whatsoever incurred by the Landlord in complying with its covenants under clause 32 and in respect of the items set out in Schedule 5, whether the Landlord is obliged by this Lease to incur them or not; and

(b)such sums or provision as the Landlord may, in its discretion, consider fair and reasonable in the circumstances to set aside from time to time for the purpose of providing for periodically recurring items of expenditure, whether recurring at regular or irregular intervals or for anticipated expenditure in respect of any of the services to be provided by the Landlord or any of the items set out in Schedule 5;

33.1.5“Financial Year” means the period from 29 September in every year to 28 September of the following year, or such other period as the Landlord may, in its discretion, from time to time determine;

33.1.6“Retail Price Index” means the all items index number published by the office of National Statistics (or any successor ministry or department) or in the event that such index ceases to exist or there is a change to the basis on which the index is calculated such other index as the parties may agree such index to be determined in the absence of agreement between the parties by the president for the time being of the Royal Institute of Chartered Surveyors on the application of either party;

33.1.7“Service Charge” means the Service Charge Percentage of the Expenditure;

33.1.8“Service Charge Percentage” means that proportion of the Expenditure which the Net Internal Area of the Premises bears to the aggregate of the Net Internal Area of the Lettable Area;

33.1.9“Service Charge Commencement Date” means the Term Commencement Date;

33.1.10“Provisional Quarterly Service Charge Payment” twenty thousand, one hundred and ninety-one pounds and fifty pence (£20,191.50) exclusive of VAT.

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33.2Account of Expenditure

The Landlord shall, as soon as practical after the end of each Financial Year, prepare an account showing the Expenditure for that Financial Year and containing a fair summary of the various items comprising the Expenditure, and on such account being certified by the Accountant and a copy of it supplied to the Tenant, such supply to be no later than three months after the end of the relevant Financial Year, it shall be conclusive evidence, for the purposes of this Lease, of all matters of fact referred to in the account (save in the case of manifest error).

33.3Advance Payment

The Tenant shall pay to the Landlord on account of the Service Charge:-

33.3.1for the period beginning on the Service Charge Commencement Date to the end of the Financial Year current at the date of this Lease the Advance Payment for that Financial Year; and

33.3.2for each Financial Year following that current at the date of this Lease the Advance Payment,

all such payments to be made by equal quarterly payments in advance on the same dates as the Principal Rent is payable and to be subject to adjustment if the Estimated Expenditure is revised as contemplated by its definition, the first instalment, being a proportion of the Provisional Quarterly Service Charge Payment for the period beginning on the Service Charge Commencement Date and ending on the day before the quarter day following the Service Charge Commencement Date, to be made on the date of this Lease.

33.4Balancing payment

If the Service Charge for any Financial Yean:-

33.4.1shall exceed the Advance Payment for that Financial Year then the excess shall be paid by the Tenant to the Landlord on written demand; or

33.4.2shall be less than the Advance Payment for that Financial Year, the overpayment shall be credited to the Tenant against the next quarterly payment of the Service Charge, or, if there is none, refunded to the Tenant without delay.

33.5Omissions

Any omission by the Landlord to include in the account of the Expenditure in any Financial Year a sum expended or a liability incurred in that Financial Year shall not preclude the Landlord from including that sum or the amount of that liability in any subsequent Financial Year as the Landlord shall determine.

33.6Continuing application of provisions

This clause shall continue to apply notwithstanding the expiration or earlier determination of the Term but only in respect of the period down to such expiration or earlier determination, the Service Charge for that Financial Year for that period being apportioned on a daily basis.

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SECTION 11

SUPERIOR LEASE

34.OBLIGATIONS AND CONSENTS UNDER SUPERIOR LEASE

34.1Obligations by Tenant

The Tenant shall perform and observe the tenant’s covenants in the Superior Lease (other than the covenant to pay rents) so far as any of them relate to the Premises but not any tenant’s covenant which is expressly assumed by the Landlord under this Lease.

34.2Obligations by Landlord

The Landlord shall pay the rents reserved by the Superior Lease and, by way of indemnity only, perform and observe the tenant’s covenants contained in the Superior Lease to the extent that the Superior Landlord requires any such covenant to be performed but excluding any tenant’s covenants which are to be performed and observed by the Tenant under this Lease.

34.3Consents under Superior Lease

Where the Tenant applies to the Landlord for any consent in respect of any matter mentioned in this Lease and, under the Superior Lease, the consent of the Superior Landlord is also required in respect of that matter then, at the written request and at the cost of the Tenant, the Landlord shall use reasonable endeavours to obtain that consent of the Superior Landlord but only in those cases where the Landlord is willing to give its consent or where the Landlord’s consent is not to be unreasonably withheld.

SECTION 12

MISCELLANEOUS

35.QUIET ENJOYMENT

The Landlord covenants with the Tenant that the Tenant, paying the Rents and performing and observing the covenants on the part of the Tenant contained in this Lease, shall and may peaceably hold and enjoy the Premises during the Term without any interruption by the Landlord or any person lawfully claiming through, under, or in trust for it.

36.EXCLUSION OF IMPLIED COVENANTS BY LANDLORD

Any covenants on the part of the Landlord which would otherwise be implied by law are hereby expressly excluded.

37.DISCLOSURE OF INFORMATION

Upon making any application or request in connection with the Premises or this Lease, or upon written request by the Landlord from time to time, the Tenant shall disclose to the Landlord such information as the Landlord may reasonably require and, whenever the Landlord shall reasonably request, the Tenant shall supply full particulars of all occupations and derivative interests in the Premises, however remote or inferior.

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38.INDEMNITY

The Tenant shall keep the Landlord fully indemnified from and against all actions, proceedings, claims, demands, losses, costs, expenses, damages and liability arising in any way out of:-

38.1any act, omission, neglect or default of the Tenant or any persons in the Premises expressly or impliedly with the Tenant’s authority; or

38.2any breach of any covenant by the Tenant contained in this Lease.

39.REPRESENTATIONS

The Tenant acknowledges that this Lease has not been entered into in reliance, wholly or partly, on any statement or representation made by, or on behalf of, the Landlord, except any such statement or representation that is expressly set out in this Lease.

40.EFFECT OF WAIVER

Each covenant by the Tenant shall remain in full force even though the Landlord may have waived or released it temporarily or waived or released (temporarily or permanently, revocably or irrevocably) a similar covenant affecting other property belonging to the Landlord.

41.NOTICES

41.1Notices to Tenant or Guarantor

Any demand or notice required to be made, given to, or served on, the Tenant or the Guarantor (if any) under this Lease shall be duly and validly made, given or served if addressed to the Tenant or the Guarantor respectively (and, if there shall be more than one of them, then any one of them) and delivered personally, or sent by pre-paid registered or recorded delivery mail, or sent by fax addressed (in the case of a company) to its registered office, or (whether a company or individual) its last known address, or (in the case of a notice to the Tenant) the Premises.

41.2Notices to Landlord

Any notice required to be given to, or served on, the Landlord shall be duly and validly given or served if sent by pre-paid registered or recorded delivery mail, or sent by fax addressed to the Landlord at its registered office.

42.EXCLUSION OF STATUTORY COMPENSATION

Except where any statute prohibits or modifies the right of the Tenant to compensation being reduced or excluded by agreement, neither the Tenant nor any undertenant (whether immediate or not) shall be entitled, on quitting the Premises or any part of them, to claim any compensation from the Landlord under the Landlord and Tenant Act 1954.

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43.EXCLUSION OF SECTIONS 24 TO 28 (INCLUSIVE) OF THE 1954 ACT

43.1Tenant’s confirmation

The Tenant confirms that before it became contractually bound to enter into the tenancy created by this Lease the Landlord served on the Tenant a 1954 Act Notice dated                                2006 in relation to such tenancy and the Tenant, or a person duly authorised by the Tenant, made a 1954 Act Statutory Declaration dated                                2006 in response to such 1954 Act Notice.

43.2Tenant’s authorisation of person making declaration

The Tenant further confirms that, where the above 1954 Act Statutory Declaration was made by a person other than the Tenant, the declarant was duly authorised by the Tenant to make this 1954 Act Statutory Declaration on behalf of the Tenant.

43.3Exclusion of Sections 24 to 28

The Landlord and the Tenant agree that the provisions of sections 24 to 28 of the 1954 Act shall be excluded in relation to the tenancy created by this Lease.

44.NEW TENANCY

This Lease constitutes a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995.

45.INVALIDITY OF CERTAIN PROVISIONS

If any term of this Lease or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable the same shall be severable and the remainder of this Lease or the application of such term to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

46.THIRD PARTY RIGHTS

46.1Exclusion of rights

Subject to any provisions of this Lease under which rights are granted to third parties by express reference to the Contracts (Rights of Third Parties) Act 1999, a person who is not a party to this Lease (in this clause a “third party”) has no right under that Act to enforce any term of this Lease but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

47.CLOSURE OF TITLE AT THE LAND REGISTRY

47.1Applications to close title and cancel notice

The Tenant covenants with the Landlord that immediately upon expiry or sooner determination of the Term, the Tenant shall use its reasonable endeavours to assist the Landlord with any application by the Landlord to determine the registration of the Lease at the Land Registry.

IN WITNESS whereof this Deed has been executed by the parties and is intended to be and is hereby delivered on the date first written above.

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SCHEDULE 1

RIGHTS AND EASEMENTS GRANTED

1.Subject to any existing or future regulations made by the Landlord and to any temporary interruption for repairs, alterations or replacements, the right for the Tenant and all persons expressly or by implication authorised by the Tenant (in common with the Landlord and all persons having a similar right):-

1.1to use such of the Common Parts as shall be designated from time to time for use by the Tenant for all proper purposes in connection with the use and enjoyment of the Premises;

1.2to use the passenger lifts in the Building for the purpose only of obtaining access to and egress from the Premises;

1.3to use such of the lavatories and the kitchens in the Building as shall be designated from time to time for use by the Tenant;

2.Subject to any temporary interruption for repairs, alterations or replacements, the right to the passage of any of the Utilities to and from the Premises through any relevant Conduits which are now or (within a period of 80 years after the date of this Lease) may be in, under, or over any other part of the Building, in each case so far as any of the same are necessary for the reasonable use and enjoyment of the Premises;

3.The right of support and protection from all other parts of the Building as is now enjoyed by the Premises;

4.The right for the Tenant to have displayed on any name board provided by the Landlord in the main entrance to the Building the name and location within the Building of the offices of the Tenant (in a style previously approved by the Landlord);

5.The right, in emergencies or during fire drills, to enter and use other parts of the Building designated by the Landlord as a means of escape

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SCHEDULE 2

EXCEPTIONS AND RESERVATIONS

1.There are excepted and reserved to the Landlord the Superior Landlord and the tenants and occupiers of the Building and any Adjoining Property and all other persons authorised by the Landlord or having similar rights:-

1.1the right to the passage and running of the Utilities through any relevant Conduits which are now, or may at any time be in, under, or over the Premises;

1.2the right at all reasonable times and upon prior notice, except in the cases of emergency, to enter the Premises in order to:-

1.2.1inspect, clean, maintain, repair, connect, remove, lay, renew, relay, replace, alter or execute any works whatsoever to, or in connection with, any of the Conduits or any other services;

1.2.2execute repairs, decorations, alterations or any other works, and to make installations to, the Premises, the Building or to any Adjoining Property; or

1.2.3do anything which the Landlord may do under this Lease;

1.3the right to erect scaffolding for the purpose of repairing or cleaning the Building or any building now, or after the date of this Lease, erected on any Adjoining Property, or in connection with the exercise of any of the rights mentioned in this Schedule even though such scaffolding may temporarily restrict the access to, or enjoyment or use of, the Premises;

1.4any rights of light, air, support, protection and shelter or other easements and rights now, or after the date of this Lease, belonging to, or enjoyed by, other parts of the Building or any Adjoining Property;

1.5full right and liberty at any time after the date of this Lease to raise the height of, or make any alterations or additions or execute any other works to, the Building or any buildings on any Adjoining Property, or to erect any new buildings of any height on any Adjoining Property in such manner as the Landlord or the person exercising the right shall think fit and even though they may obstruct, affect or interfere with the amenity of, or access to, the Premises or the passage of light and air to the Premises, but not so that the Tenant’s use and occupation of them is materially affected;

1.6the right, in emergencies or during fire drills, to enter the Premises and use any designated escape route;

2.Any rights or easements excepted and reserved in paragraph 1 over anything which is not in being at the date of this Lease shall be effective only in relation to any such thing which comes into being before the expiry of 80 years from today, which shall be the perpetuity period applicable to this Lease.

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SCHEDULE 3

USE RESTRICTIONS

1.Dangerous materials and use of machinery

The Tenant shall not:-

1.1bring into the Building or keep in the Premises any article or thing which is or may become combustible, dangerous, explosive, inflammable, offensive or radio-active, or which might increase the risk of fire or explosion;

1.2keep or operate in the Premises any machinery which is unduly noisy or causes vibration, or which is likely to annoy or disturb any other tenant or occupier of the Building.

2.Overloading floors and services

The Tenant shall not:-

2.1overload the floors of the Premises or the Building nor suspend any excessive weight from any ceiling, roof, stanchion, structure or wall of the Building nor overload any Utility in or serving it;

2.2do anything which may subject the Premises or the Building to any strain beyond that which they are designed to bear (with due margin for safety), and shall pay to the Landlord, on written demand, any expense reasonably incurred by the Landlord in obtaining the opinion of a qualified structural engineer as to whether the structure of the Premises or the Building is being, or is about to be, overloaded;

2.3exceed the weight limits prescribed for any lift in the Building.

3.Discharges into Conduits

The Tenant shall not discharge into any Conduit any oil or grease or any noxious or deleterious effluent or substance which may cause an obstruction or might be or become a source of danger, or which might damage any Conduit or the drainage system of the Building or any Adjoining Property.

4.Disposal of refuse

The Tenant shall not deposit in the Common Parts any refuse, rubbish or trade empties of any kind other than in proper receptacles and as may be designated by the Landlord, and shall not burn any refuse or rubbish on the Premises.

5.Obstruction of Common Parts

The Tenant shall not do anything as a result of which the Common Parts or other area over which the Tenant may have rights of access or use may be damaged, or their fair use by others may be obstructed in any way and shall not park any vehicle on any road or open area forming part of the Building.

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6.Prohibited uses

The Tenant shall not use the Premises for any public or political meeting, or public exhibition or public entertainment, show or spectacle; or for any dangerous, noisy, noxious or offensive business, occupation or trade; or for any illegal or immoral purpose; or for residential or sleeping purposes; or for betting, gambling, gaming or wagering; or as a betting office; or as a club; or for the sale of any beer, wines or spirits; or for any auction.

7.Nuisance

The Tenant shall not:-

7.1do anything in the Premises or the Building which may be or become a nuisance, or which may cause annoyance, damage, disturbance or inconvenience to, the Landlord or any other tenant or occupier in the Building or any owner or occupier of any Adjoining Property, or which may be injurious to the amenity, character, tone or value of the Building or prejudicially affect or depreciate the Premises or any Adjoining Property or damage any Conduits on or near the Premises nor do anything which may be or become dangerous, noxious or offensive nor suffer or permit any waste, spoil or destruction;

7.2play any musical instrument, or use any loudspeaker, radio, tape recorder, record or compact disc player or similar apparatus in such a manner as to be audible outside the Premises;

7.3place outside the Premises or in the Common Parts or expose from any window of the Premises any articles, goods or things of any kind.

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SCHEDULE 4

COVENANTS BY GUARANTOR

1.Covenant and indemnity by Guarantor

The Guarantor:-

1.1covenants with the Landlord, as a primary obligation, that the Present Tenant or the Guarantor shall, at all times during the Term (including any continuation or renewal of this Lease), duly perform and observe all the covenants on the part of the Tenant contained in this Lease, including the payment of the Rents and all other sums payable under this Lease in the manner and at the times specified in this Lease;

1.2indemnifies, as a primary obligation, the Landlord against all claims, demands, losses, damages, liability, costs, fees and expenses whatsoever sustained by the Landlord by reason of or arising in any way directly or indirectly out of any default by the Present Tenant in the performance and observance of any of its obligations or the payment of any rent and other sums; and

1.3indemnifies, as a primary obligation, the Landlord against any loss sustained by the Landlord as a result of any of the obligations of the Present Tenant contained in this Lease being or becoming void, voidable, unenforceable or ineffective for any reason whatsoever and whether or not known to the Landlord, the amount of such loss being the amount which the Landlord would otherwise have been able to recover from the Present Tenant.

2.Guarantor’s liability

The Guarantor further covenants with the Landlord, as a primary obligation, that the Guarantor shall be liable (whether before or after any disclaimer by a liquidator or trustee in bankruptcy) for the fulfilment of all the obligations of the Present Tenant under this Lease and agrees that the Landlord, in the enforcement of its rights under this Lease, may proceed against the Guarantor as if the Guarantor was named as the Tenant in this Lease.

3.Waiver by Guarantor

The Guarantor waives any right to require the Landlord to proceed against the Present Tenant or to pursue any other remedy whatsoever which may be available to the Landlord before proceeding against the Guarantor.

4.Postponement of claims by Guarantor against Tenant

The Guarantor further covenants with the Landlord that the Guarantor shall:-

4.1not claim in any liquidation, bankruptcy, composition or arrangement of the Present Tenant in competition with the Landlord and shall remit to the Landlord the proceeds of all judgments and all distributions it may receive from any liquidator, trustee in bankruptcy or supervisor of the Present Tenant;

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4.2hold for the benefit of the Landlord all security and rights the Guarantor may have over assets of the Present Tenant whilst any liabilities of the Present Tenant or the Guarantor to the Landlord remain outstanding; and

4.3not exercise any right or remedy in respect of any amount paid or any liability incurred by the Guarantor in performing or discharging its obligations contained in this Schedule, or claim any contribution from any other guarantor.

5.Postponement of participation by Guarantor in security

The Guarantor shall not be entitled to participate in any security held by the Landlord in respect of the Tenant’s obligations to the Landlord under this Lease or to stand in the place of the Landlord in respect of any such security until all the obligations of the Present Tenant or the Guarantor to the Landlord under this Lease have been performed or discharged.

6.No release of Guarantor

None of the following, or any combination of them, shall release, determine, discharge or in any way lessen or affect the liability of the Guarantor as principal obligor under this Lease or otherwise prejudice or affect the right of the Landlord to recover from the Guarantor to the full extent of this guarantee:-

6.1any neglect, delay or forbearance of the Landlord in endeavouring to obtain payment of the Rents or the amounts required to be paid by the Tenant or in enforcing the performance or observance of any of the obligations of the Tenant under this Lease;

6.2any refusal by the Landlord to accept rent tendered by or on behalf of the Tenant at a time when the Landlord was entitled (or would after the service of a notice under Section 146 of the Law of Property Act 1925 have been entitled) to re-enter the Premises;

6.3any extension of time given by the Landlord to the Tenant;

6.4any variation of the terms of this Lease (including any reviews of the rent payable under this Lease) or the transfer of the Landlord’s reversion or the assignment of this Lease;

6.5any change in the constitution, structure or powers of either the Tenant, the Guarantor or the Landlord or the liquidation, administration or bankruptcy (as the case may be) of either the Tenant or the Guarantor;

6.6any legal limitation, or any immunity, disability or incapacity of the Tenant (whether or not known to the Landlord) or the fact that any dealings with the Landlord by the Tenant may be outside, or in excess of, the powers of the Tenant;

6.7any other act, omission, matter or thing whatsoever as a result of which, but for this provision, the Guarantor would be exonerated either wholly or partly (other than a release executed and delivered as a deed by the Landlord).

7.Disclaimer or forfeiture of Lease

The Guarantor further covenants with the Landlord that:-

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7.1if a liquidator or trustee in bankruptcy shall disclaim or surrender this Lease; or

7.2if this Lease shall be forfeited; or

7.3if the Present Tenant shall cease to exist

the Guarantor shall, if the Landlord by notice in writing given to the Guarantor within six (6) months after such disclaimer or other event so requires accept from, and execute and deliver to, the Landlord a counterpart of a new lease of the Premises for a term commencing on the date of the disclaimer or other event and continuing for the residue then remaining unexpired of the Term, such new lease to be at the cost of the Guarantor and to be at the same Rents and subject to the same covenants and provisions as are contained in this Lease.

8.Guarantor to pay sum equal to rents

If the Landlord shall not require the Guarantor to take a new lease pursuant to paragraph 7, the Guarantor shall nevertheless upon demand pay to the Landlord a sum equal to the Rents and other sums that would have been payable under this Lease but for the disclaimer or other event in respect of the period from and including the date of such disclaimer or other event until the expiration of six (6) months from such date or until the Landlord shall have granted a lease of the Premises to a third party (whichever shall occur first).

9.Benefit of guarantee

This guarantee shall ensure for the benefit of the successors and assigns of the Landlord under this Lease without the necessity for any assignment.

10.Guarantor to join in Authorised Guarantee Agreement

The Guarantor covenants with the Landlord, and as a separate covenant with the Present Tenant, that the Guarantor will join in, and execute and deliver to the Landlord, any deed which the Present Tenant is required to execute and deliver to the Landlord pursuant to clause 22.3.2, so as to give the covenants on the part of the Guarantor contained in that deed.

11.Invalidity of certain provisions

If any term of this guarantee or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable the same shall be severable and the remainder of this guarantee or the application of such term to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this guarantee shall be valid and be enforced to the fullest extent permitted by law.

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SCHEDULE 5

ITEMS OF EXPENDITURE AS REFERRED TO IN CLAUSE 33

1.Repairs and maintenance

1.1Repairing, maintaining, decorating and (where appropriate) cleaning, lighting, heating, servicing and (as and when necessary) altering, reinstating, renewing or rebuilding each part of the Retained Parts;

1.2Carpeting, furnishing and equipping the Retained Parts as the Landlord may determine, including providing floral decorations, desks, tables, chairs and other fixtures and fittings in the main entrance halls and lift lobby areas.

2.Plant and machinery

Providing, maintaining, repairing, operating, inspecting, servicing, cleaning, lighting and (as and when necessary) renewing or replacing any plant, machinery, apparatus and equipment in the Retained Parts, including any boiler and items relating to the ventilation, heating, air conditioning and hot and cold water systems, any lift, lift shaft and lift motor room, any fuel and electricity for them and any necessary maintenance contracts and insurance in respect of them.

3.Security and emergency systems

Providing, maintaining, repairing, operating, inspecting, servicing, cleaning and (as and when necessary) renewing or replacing any security or emergency systems for the Building, including alarm systems, internal telephone systems, closed circuit television systems, generators, emergency lighting, fire detection or prevention systems, sprinkler systems, any fire escapes for the Building and fire fighting and fire prevention equipment and appliances (other than those for which a tenant is responsible) and any traffic barriers, car park and traffic control and security systems.

4.Staff

Providing staff (including such direct or indirect labour as the Landlord considers appropriate) for the day-to-day running of the installations and plant in, and the provision of other services to, the Building and for its general management, operation and security and all other incidental expenditure, including:-

4.1insurance, health, pension, welfare, severance and other payments, contributions and premiums;

4.2providing uniforms, working clothes, tools, appliances, materials and equipment (including telephones) for the proper performance of the duties of any such staff;

4.3providing, maintaining, repairing, decorating and lighting any accommodation and facilities for staff, including any residential accommodation for staff employed in the Building, and any rates, gas or electricity charges in respect of it, and any actual or notional rent for such accommodation.

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5.Signs etc.

Providing, maintaining and renewing name boards and signs in the main entrance halls, lift lobby areas and any other parts of the Building, and any directional signs and fire regulation notices and any flags, flag poles, television and radio aerials and satellite dishes.

6.Refuse

Providing and (when necessary) renewing or replacing any palladins, compactors or other receptacles for refuse for the Building and the cost of collecting, storing and disposing of refuse.

7.Landscaping

Providing and maintaining floodlighting and any plants, shrubs, trees or garden or grassed areas in the Retained Parts.

8.Miscellaneous items

8.1Leasing or hiring any of the items referred to in this Schedule.

8.2Interest, commission and fees in respect of any monies borrowed to finance the provision of services and any of the items referred to in this Schedule.

8.3Enforcing for the general benefit of the tenants of the Building (as determined by the Landlord) the covenants in any of the other leases of the Building.

9.Insurance

9.1Periodic valuations of the Building for insurance purposes.

9.2Works required to the Building in order to satisfy the requirements of any insurer of the Building.

9.3Property owner’s liability, third party liability and employer’s liability and such other insurances as the Landlord may, from time to time, determine.

9.4Any amount which may be deducted or disallowed by any insurer of the Building under any excess provision in the insurance policy on settlement of any claim by the Landlord.

10.Common facilities

Making, laying, repairing, maintaining, rebuilding, decorating, cleaning and lighting (as the case may require), any roads, ways, forecourts, passages, pavements, party walls or fences, party structures, Conduits or other conveniences and easements whatsoever which may belong to, or be capable of being used or enjoyed by, the Building in common with any Adjoining Property.

11.Outgoings

All existing or future rates (including water rates) taxes, duties, charges, assessments, impositions and outgoings whatsoever (whether parliamentary, parochial, local or of

51

any other description and whether or not of a capital or non-recurring nature or of a wholly novel character) payable by the Landlord in respect of the Retained Parts or any part of them.

12.Statutory requirements

Carrying out any works to the Building required to comply with any statute (other than works for which any tenant or occupier is responsible).

13.Representations

Taking any steps considered desirable or expedient by the Landlord for complying with, making representations against, or otherwise contesting liability under, any statute concerning town planning, public health, highways, streets, drainage and any other matters relating or alleged to relate to the Building or any part of it for which any tenant is not directly responsible.

14.Management

14.1The proper and reasonable fees, costs, expenses and disbursements of the Accountant or any other person employed or retained by the Landlord for, or in connection with, surveying and accounting functions, the collection of rents, the performance of the services and any other duties in and about the Building or any part of it, and relating to the general management, administration, security, maintenance, protection and cleanliness of the Building.

14.2The proper and reasonable fees and expenses of the Landlord or a Group Company of the Landlord in connection with the management of the Building and any of the functions and duties referred to in paragraph 14.1 that may be undertaken by the Landlord or that Group Company, such fees and expenses to include overheads and profits commensurate with current market practice of property companies providing management services.

15.Adjoining/Neighbouring Property

Any payments made by the Landlord as tenant under the Superior Landlord pursuant to clause 7(5) of the Superior Lease.

16.Reserve Fund

Such annual provision as the Landlord may, in its discretion, determine as being proper and reasonable and in the interest of good estate management for the establishment and maintenance of a reserve fund for the replacement of any boilers, plant, machinery, apparatus and equipment in the Retained Parts.

17.Generally

Any other costs and expenses which the Landlord incurs in providing such other services and in carrying out such other works as the Landlord may, in its discretion, consider desirable or necessary for the benefit of the Building or any part of it or the tenants or occupiers of it, or for securing or enhancing any amenity of, or within, the Building, or in the interest of good estate management.

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18.Value Added Tax

Value Added Tax in respect of any item of expenditure referred to in this Schedule to the extent that it is not otherwise recoverable by the Landlord.

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SCHEDULE 6

DEEDS AND DOCUMENTS CONTAINING MATTERS TO WHICH THE PREMISES ARE SUBJECT

1.Property and Charges Register of Title No. NGL66474 and Title Number NGL632309

2.Lease dated 18 October 1988 made between Hammerson (Amethyst) Properties Limited and Taisei Europe Limited (1) and the London Electricity Board (2)

3.Superior Lease

4.Party Wall Award dated 20 March 1989

5.Party Wall Award dated 22 June 1989

6.Deed dated 12 November 1992 between Yasuda Properties (UK) Limited (1) The Fuji Bank Limited (2) and MEPC plc (3)

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SCHEDULE 7

AUTHORISED GUARANTEE AGREEMENT TO BE GIVEN BY TENANT PURSUANT TO CLAUSE 22.3.2

THIS DEED is made the [             ] day of [              ]

BETWEEN:-

1.[                                                                     ] whose registered office is at [              ] (registered number: [                                             ]) (the “Present Tenant”) [and]

2.[                                                                 ] whose registered office is at [        ] (registered number: [                                       ]) (the “Landlord”) [and]

3-[[                                                                          ] whose registered office is at [                   ] (registered number: [                                 ]) (the “Guarantor”)]

WHERE AS:-

(A)This Agreement is made pursuant to the lease dated [                          ] and made between Mizuho Corporate Bank, Ltd. (1) and ITG Europe (2) (the “Lease”) which expression shall include (where the context so admits) all deeds and documents supplemental to it (whether expressed to be so or not) relating to the premises at part of the 6^th Floor, River Plate House, 7/11 Finsbury Circus, London EC2M 7DH (the “Premises”).

(B)The Present Tenant holds the Premises under the Lease and wishes to assign the Lease to [                         ] (the “Assignee”), and pursuant to the Lease the Landlord’s consent is required to such assignment (the “Assignment”) and such consent is given subject to a condition that the Present Tenant [and the Guarantor] [is/are] to enter into a deed in the form of this Deed .

NOW THIS DEED WITNESSES as follows:-

1.Definitions

In this Deed the following expressions shall have the following meanings:

“1954 Act” means the Landlord and Tenant Act 1954.

“1954 Act Notice” means a notice in a form complying with the requirements of section 38A(3)(a) of the 1954 Act.

“1954 Act Statutory Declaration” means a statutory declaration in a form complying with the requirements of section 38A(3)(b) of the 1954 Act.

“Tenancy” means in relation to the Present Tenant, the tenancy to be created pursuant to paragraph 4 and in relation to the Guarantor, the tenancy to be created pursuant to paragraph 8.

2.Authorised Guarantee

Pursuant to the condition referred to above, the Present Tenant covenants with the Landlord, as a primary obligation, that the Assignee or the Present Tenant shall, at all

55

times during the period (the “Guarantee Period”) from the completion of the Assignment until the Assignee shall have ceased to be bound by the tenant covenants (which in this Deed shall have the meaning attributed by section 28(1) of the Landlord and Tenant (Covenants) Act 1995 (the “1995 Act”)) contained in the Lease (including the payment of the rents and all other sums payable under the Lease in the manner and at the times specified in the Lease), duly perform and observe the tenant covenants.

3.Present Tenant’s liability

3.1The Present Tenant agrees that the Landlord, in the enforcement of its rights under this Deed, may proceed against the Present Tenant as if the Present Tenant were the sole or principal debtor in respect of the tenant covenant in question.

3.2For the avoidance of doubt, notwithstanding the termination of the Guarantee Period the Present Tenant shall remain liable under this Deed in respect of any liabilities which may have accrued prior to such termination.

3.3For the avoidance of doubt the Present Tenant shall be liable under this Deed for any costs and expenses incurred by the Landlord in enforcing the Present Tenant’s obligations under this Deed.

4.Disclaimer of Lease

The Present Tenant further covenants with the Landlord that if the Crown or a liquidator or trustee in bankruptcy shall disclaim the Lease during the Guarantee Period the Present Tenant shall, if the Landlord by notice in writing given to the Present Tenant within 6 months after such disclaimer so requires, accept from and execute and deliver to, the Landlord a counterpart of a new lease of the Premises for a term commencing on the date of the disclaimer and continuing for the residue then remaining unexpired of the term of the Lease, such new lease to be at the same rents and subject to the same covenants and provisions as are contained in the Lease.

5.Exclusion of sections 24 to 28 (inclusive) of the 1954 Act

5.1The present Tenant confirms that before it became contractually bound to enter into the Tenancy, the Landlord served on the Present Tenant a 1954 Act Notice dated [ ] in relation to the Tenancy and the Present Tenant, or a person duly authorised by the Present Tenant, in relation to the 1954 Act Notice made a 1954 Act Statutory Declaration dated [   ].

5.2The Present Tenant further confirms that, where the above 1954 Act Statutory Declaration was made by a person other than the Present Tenant, the declarant was duly authorised by the Present Tenant to make this 1954 Act Statutory Declaration on behalf of the Present Tenant.

5.3The Present Tenant was not prior to the date of this Deed contractually bound to enter into the Tenancy.

5.4The Landlord and the Present Tenant agree that the provisions of Sections 24 to 28 of the Landlord and Tenant Act 1954 shall be excluded in relation to the Tenancy.

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6.             Supplementary provisions

By way of provision incidental or supplementary to clauses 2, 3 and 4 of this Deed:-

6.1Postponement of claims by Present Tenant

The Present Tenant further covenants with the Landlord that the Present Tenant shall:-

6.1.1not claim in any liquidation, bankruptcy, composition or arrangement of the Assignee in competition with the Landlord and shall remit to the Landlord the proceeds of all judgments and all distributions it may receive from any liquidator, trustee in bankruptcy or supervisor of the Assignee;

6.1.2hold for the benefit of the Landlord all security and rights the Present Tenant may have over assets of the Assignee whilst any liabilities of the Present Tenant or the Assignee to the Landlord remain outstanding; and

6.1.3not exercise any right or remedy in respect of any amount paid or any liability incurred by the Present Tenant in performing or discharging its obligations contained in this Deed, or claim any contribution from any other guarantor.

6.2Postponement of participation by Present Tenant in security

The Present Tenant shall not be entitled to participate in any security held by the Landlord in respect of the Assignee’s obligations to the Landlord under the Lease or to stand in the place of the Landlord in respect of any such security until all the obligations of the Present Tenant or the Assignee to the Landlord under the Lease have been performed or discharged.

6.3No release of Present Tenant

None of the following, or any combination of them, shall release, determine, discharge or in any way lessen or affect the liability of the Present Tenant as principal obligor under this Deed or otherwise prejudice or affect the right of the Landlord to recover from the Present Tenant to the full extent of this guarantee:-

6.3.1any neglect, delay or forbearance of the Landlord in endeavouring to obtain payment of any rents or other amounts required to be paid by the Assignee or in enforcing the performance or observance of any of the obligations of the Assignee under the Lease;

6.3.2any refusal by the Landlord to accept rent tendered by or on behalf of the Assignee at a time when the Landlord was entitled (or would after the service of a notice under Section 146 of the Law of Property Act 1925 have been entitled) to re-enter the Premises;

6.3.3any extension of time given by the Landlord to the Assignee;

6.3.4any reviews of the rent payable under the Lease and (subject to Section 18 of the 1995 Act) any variation of the terms of the Lease or the transfer of the Landlord’s reversion;

57

6.3.5any change in the constitution, structure or powers of either the Present Tenant, the Assignee or the Landlord or the liquidation, administration or bankruptcy (as the case may be) of either the Present Tenant or the Assignee;

6.3.6any legal limitation, or any immunity, disability or incapacity of the Assignee (whether or not known to the Landlord) or the fact that any dealings with the Landlord by the Assignee may be outside, or in excess of, the powers of the Assignee;

6.3.7any other deed, act, omission, failure, matter or thing whatsoever as a result of which, but for this provision, the Present Tenant would be exonerated either wholly or partly (other than a release executed and delivered as a deed by the Landlord or a release effected by virtue of the 1995 Act).

6.4           Costs of new lease

The Landlord’s reasonable costs in connection with any new lease granted pursuant to clause 3 of this Deed shall be borne by the Present Tenant and paid to the Landlord (together with Value Added Tax) upon completion of such new lease.

7.[Guarantee

[If there is a guarantor, repeat the provisions set out in paragraphs 1 to 9 (inclusive) of Schedule 4].

8.Guarantor to join in new lease

If the Present Tenant shall be required to take up a new lease pursuant to clause 3 of this Deed, the Guarantor shall join in, and execute and deliver to the Landlord a counterpart of, such new lease in order to guarantee the obligations of the Present Tenant under it in the terms of Schedule 4 to the Lease.]

9.Invalidity of certain provisions

If any term of this Deed or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable the same shall be severable and the remainder of this Deed or the application of such term to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this Deed shall be valid and be enforced to the fullest extent permitted by law.

IN WITNESS whereof this deed has been executed by the Present Tenant and is intended to be and is hereby delivered on the date first above written.

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Executed as a Deed	)
by MIZUHO CORPORATE BANK, LTD	)
in the presence of:	)

Director

Director/Secretary

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PRESENT when the Common Seal	)
of INVESTMENT TECHNOLOGY	)
GROUP EUROPE LIMITED	)
was affixed hereto:	)

Director	/s/ [ILLEGIBLE]
Director/Secretary	/s/ [ILLEGIBLE]

60

EX-10.33

Exhibit 10.33

Dated 17 August 1998

PART OF STACK L

CUSTOM HOUSE DOCK, DUBLIN 1

(1)           INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)

(2)           INVESTMENT TECHNOLOGY GROUP LIMITED

SUB-LEASE

Office Unit Nos 7, 7a & 7b

Part of Stack L, Custom House Dock, Dublin 1

McCann FitzGerald

Solicitors

2 Harbourmaster Place

Custom House Dock

Dublin 1

I:\DOR\IDAITG.GO1

INDEX TO LEASE

		PAGE NOS
SECTION 1.00 - COMMENCEMENT
1.01	Date	1
1.02	Parties	1
1.03	Testatum	1
1 04	Definitions	1 - 8
1.05	Interpretation	8 - 9
1.06	Captions	9
SECTION 2.00 - DEMISE, RENT, COVENANTS, etc.
2.01	Demise, Rent and Covenants	9
2.02	Certificate	10
2 03	Finance Act Certificate	10
THE FIRST SCHEDULE
Part 1	- The Landlord’s Building	11
Part 2	- The Demised Premises	11
Part 3	- Stack L	12
Part 4	- The Term and the Rent	12
Part 5	- The Offices Portion of the Landlord’s Building	12
Part 6	- The Dublin Exchange Facility	12
THE SECOND SCHEDULE
Part 1	- Rights Granted to the Tenant
1.	Right to pass and repass over the Public Areas	13

2.	Right to pass through Common Parts	13
3.	Right to passage of Utilities	13 - 14
4.	Right of support	14
5.	Right of escape in event of fire	14
Part 2	- Rights Excepted and Reserved to the Landlord, the Superior Landlord and others
1.	Right to passage of Utilities	14
2.	Right of support	14
3.	Right to enter	14
4.	Right to rebuild adjoining buildings	15
5.	Right to close temporarily the Public Areas	15
6.	Right to make rules and regulations	15
THE THIRD SCHEDULE - Covenants by the Tenant
1.00	Payments by the Tenant
1 01	To pay Rent	16
1.02	To pay legal and other charges	16
1.03	To pay stamp duty	16 - 17
1.04	To pay V.A.T.	17
1.05	To pay for telecommunications lines and services	17
1.06	To pay interest	17
1.07	To pay costs of abating a nuisance	17
1.08	To pay costs of licences and certificates	17
2.00	Repair and Maintenance
2.01	To keep clean, tidy and repair the Demised Premises	18

2.02	To clean windows and doors	18
2.03	To install curtains and blinds	18
2.04	Not to substitute blinds etc, or display any unsightly object on the Demised Premises	18
2.05	Paint inside	18 - 19
2.06	To do work as directed by a Statutory Authority	19
2.07	To comply with statutory notices	19
2.08	To permit the Landlord and the Superior Landlord to enter to view	19
2.09	To permit the Landlord and others to exercise rights	19 - 20
2.10	To protect the Conducting Media	20
2.11	Not to damage the Demised Premises or the Development Area	20
3.00	Use of the Demised Premises
3.01	User	20
3.02	Not to overload	21
3.03	Not to suspend objects from the ceiling	21
3.04	Not to permit nuisance or annoyance	21
3.05	Not to instal machinery	21
3.06	Not to allow easements to be acquired	21
3.07	Not to obstruct the Conducting Media	22
3.08	Not to obstruct any windows or other lights	22
3.09	Not to leave impediments in the Public Areas	22
3.10	Not to display advertisements and signs	22
3.11	Not to allow loud music	22

3.12	Not to hold “fire sale” or “bankruptcy sale”	22
3.13	Not to sell Intoxicating Liquor	23
3.14	Not to place or deposit outside any vehicle or article	23
3.15	Not to hold sales by auction	23
3.16	Not to allow infestation	23
3.17	Nuisance use restriction	23
3.18	Safety use restriction	23
3.19	Storage use restriction	24
3.20	To comply with all statutory requirements	24
3.21	To comply with regulations	24
3.22	Reletting sign	24
3.23	Additions and alterations	25
3.24	Not to make any claim or objection	25
3.25	Planning Acts	25 - 26
3.26	To comply with Local Authority requirements	26
3.27	Fire requirements	26
3.28	Not to use the Public Areas unless Formally Opened	26
4.00	Alienation
4.01	No assignment or underletting of the Demised Premises or any part thereof without consent	26
4.02	Alienation conditions	26 - 27
4.03	Application for consent to alienate	27 - 28
4.04	To register assignments	28
4.05	To notify of assignments	29

5.00	Insurance
5.01	Not to avoid insurance	29 - 30
6.00	Miscellaneous
6.01	Accidents on the Demised Premises	30
6.02	To yield up	30
6.03	Not to vitiate Insurance	30
6.04	Notice	30
6.05	Indemnity	30 - 31
6.06	Landlord’s agent	31
6.07	Keyholders	31
6.08	Blinds	32
6.09	Covenants in Superior Lease	32
THE FOURTH SCHEDULE - Covenants by the Landlord
1.	To insure	32
2.	Damage to the Demised Premises by Insured Risks	32 - 33
3.	Covenants in the Superior Lease	33
4.	Services	33
5.	The Museum Rent	34
6.	The Public Area Service Charge	34
THE FIFTH SCHEDULE - Provisos, Matters and Things Agreed and Declared by and Between the Parties
1.	Forfeiture	34
2.	Arbitration	34 - 35

3.	Consents of Landlord to be in writing	35
4.	Planning permission, etc.	35
5.	Covenants relating to other property	35
6.	Payments to be treated as Rent	35
7.	Break Option	35 - 36
8.	Notice	36
9.	Boundary walls and columns	36
10.	Rights in respect of adjoining land	36
11.	Waiver	36 - 37
12.	Restrictions on adjoining land	37
13.	Right of entry to remedy breaches of covenant	37
14.	Entitlement to alter or vary or extend the Public Areas	37
15.	Removal of property after determination of the Term	37 - 38
16.	Section 40 Deasy’s Act, 1860	38
17.	Suspension of Rent	38
18.	Jurisdiction	38 - 39
THE SIXTH SCHEDULE
Part 1	- The Landlord’s Offices Services	39 - 41
Part 2	- Services Ascertainment and Payment	41 - 43
THE SEVENTH SCHEDULE - Rent Review		43
Landlord & Tenant Act - Renunciation		47

1.01Date
THIS LEASE is made on 17th August 1998
1.02Parties

BETWEEN

(1)INDUSTRIAL DEVELOPMENT AGENCY (IRELAND) having its registered office at Wilton Park House, Wilton Place, Dublin 2; and

(2)INVESTMENT TECHNOLOGY GROUP LIMITED having its registered office at

1.03Testatum

NOW THIS INDENTURE WITNESSES as follows:

SECTION 1.00 - - INTERPRETATION

1.04Definitions

For the purposes of this Lease the following words and expressions shall have the following meanings and interpretations:

“Act of the Oireachtas”	any act of Parliament or act of the Oireachtas or law of the European Community now in force in the State and any such act or law which may hereinafter be passed which has force in the State including (without prejudice to the generality of the foregoing) any instrument, directive, regulation, or bye-law made thereunder;
“the Amiens Street Right of Way”	the roadway coloured yellow but unhatched on the map attached to a Licence to pass over said roadway dated 19 day of May 1994 (“the Amiens Street/Mayor Street Licence”) made between (1) the Superior Landlord and (2) the Landlord.
“the Common Parts of the Offices Portion of the Landlord’s Building”	the entrance hall, landings, lift shafts, toilets, staircases, passages and other areas which form part of the offices portion of the Landlord’s Building (as

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	hereafter defined) and which are from time to time during the Perpetuity Period provided by the Landlord for common use and enjoyment by the tenants and occupiers of the Landlord’s Building and all persons expressly or by implication authorised by them and including all structural and external parts of the Landlord’s Building (excluding the Lettable Premises as hereafter defined and the Dublin Exchange Facility as hereafter defined);
“Conducting Media”	wires, cables, pipes, sewers, drains, gutters, ducts, flues, conduits, meters, traps, valves and other media, plant, equipment or apparatus for the conducting, controlling or measuring of electricity, gas, power, water, foul drainage, surface water, drainage, telephone, telex and other electrical impulses, air, smoke, fumes and other matter or things or forms of energy and other things of a like nature;
“the Demised Premises”	that part of the Offices Portion of the Landlord’s Building described in Part 2 of the First Schedule hereto;
“Determination of the Term”	the determination of the Term whether by effluxion of time, re-entry under the provisions hereof, duly accepted surrender or any other means or cause whatsoever;
“Development Area”	the area shown outlined in red on Map F annexed hereto or any part or parts thereof excluding the quay walls of the Custom House Quay and the Custom House Quay Bridge (but not any bridge erected in replacement thereof);
“the Dublin Exchange Facility”	the part of the Landlord’s Building described in Part 6 of the First Schedule hereto;
“Due Proportion”	means in relation to
	(a)“the due proportion” of the Public Area Service Charge for which the Landlord is liable under the Superior Lease with respect to the Offices Portion of the Landlord’s Building calculated in accordance with the provisions of paragraph 1 of part 2 of the Fifth Schedule to the Superior

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	Lease for the Accounting Period as defined in the Sixth Schedule to this Lease and for each such Accounting Period; and
	(b)   The Landlord’s Offices Service Charge for the said Accounting Period and for each such Accounting Period;
	the due proportion of such Total Service Charges shall be that which shall be calculated as a percentage of the total cost of the Total Service Charges equal to the percentage which the gross floor area of the Demised Premises bears to the aggregate of the gross floor areas of the Lettable Premises in the Offices Portion of the Landlord’s Building and which have been certified by the Landlord to be available for letting.
“Formally Opened”	in relation to any portion of the Development Area means declared open to the public and completed by the Superior Landlord on the application of the Management Company (as defined herein and by the Superior Lease) or declared open to the public and completed by the Superior Landlord;
“Improvement and Improvement Consent”	shall have the meanings assigned to them by the Landlord and Tenant (Amendment) Act, 1980;
“Intoxicating Liquor”	shall have the meaning assigned to it by the Intoxicating Liquor Acts 1902 - 1962;
“Instalment Days”	First day of each January, April, July and October of the Term;
“Insured Risks”	fire, lightning, impact, earthquake, flood, storm, tempest, explosion, aircraft and other aerial devices (including articles dropped from aircraft) riot, civil commotion and malicious damage, bursting or overflowing of water pipes and tanks, apparatus, drains or sewers and impact by road vehicles, public liability and insurance liability of the Landlord for three years loss of rent and Due Proportion of the Total Service Charges and any other risks, perils, expenses, losses as the Landlord from time to time in its reasonable discretion may decide to insure the Landlord’s Building and the Landlord’s Building Plant

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		and Machinery against for the following sums:
	(A)	such sum as the Landlord shall from time to time be advised as being the full cost of rebuilding and reinstatement including architects, surveyors and other professional fees and any fees payable upon any applications for planning permissions or other permits or consents that may be required in relation to the rebuilding or reinstatement of the Offices Portion of the Landlord’s Building; and
	(B)	the cost of debris removal, demolition, site clearance, any works that may be required by statute and incidental expenses against damage or destruction by such insured risks to the extent that such insurance may ordinarily be arranged for properties such as the Offices Portion of the Landlord’s Building and the Landlord’s Building Plant and Machinery with an insurer of repute and subject to such excesses, exclusions or limitations as the insurer may require;
“the Landlord”		the party hereto of the one part, and its successors and assigns being the person which is the owner for the time being of the reversion immediately expectant on the Determination of the Term;
“the Landlord’s Building”		the property described in Part 1 of the First Schedule hereto and refers to each and every part of the building or buildings, additions or improvements erected thereon;
“the Landlord’s Building Plant and Machinery”		all pumps, heating apparatus and equipment, water tanks, meters of every description, transformers, distribution boards, lighting equipment, internal telephone and other communication systems, public address systems, television ducts, fire prevention systems and equipment generators, intruder systems, and all other plant, machinery, apparatus, equipment situate in the Landlord’s Building (but excluding plant and equipment provided by the Tenant);
“the Landlord’s Offices Services”		the services specified in Part 1 of the Sixth Schedule hereto or any of them;
“the Landlord’s Offices Service Charge”		the aggregate costs expenses and outgoings

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	paid, payable incurred or borne from time to time by the Landlord in providing the Landlord’s Offices Services;
“Landlord’s Insurance Premiums”	sums equivalent to the premiums incurred by the Landlord from time to time for keeping the Offices Portion of the Landlord’s Building and the Landlord’s Building Plant and Machinery insured against the Insured Risks pursuant to the Landlord’s obligation under Paragraph 1 of the Fourth Schedule hereto;
“Landscaped Areas”	those parts of the Public Areas which are landscaped or intended to be landscaped from time to time and maintained as such;
“Lettable Premises”	those parts of the Offices Portion of the Landlord’s Building which have been constructed for or will during the Perpetuity Period be constructed for and are intended for letting and have been or will be let (including the Demised Premises).
“Management Company”	Custom House Docks Management Limited or such other body or person appointed under the terms of the Superior Lease to carry out the functions of the management company under the Superior Lease in providing the Public Area Services;
“Map A” “Map B” “Map C” “Map D” “Map E” “Map F”	the maps annexed hereto and respectively so marked and “Maps” shall be construed accordingly;
“the Museum”	the museum which may be constructed or any buildings adapted as such within the Development Area having a maximum gross floor area not exceeding 130,000 square feet;
“the Museum Rent”	the rent of IR£12,098.50 per annum for which the Landlord is or will be liable to pay to the Superior Landlord under the Superior Lease with respect to the Museum;
“the Nearby Premises”	all other parts of the Landlord’s Building not hereby demised and all buildings and lands adjoining or

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	neighbouring the Demised Premises and any buildings now or hereafter to be erected thereon or on some part or parts thereof (but excluding the Common Parts of the Offices Portion of the Landlord’s Building and the entire of the Dublin Exchange Facility as herein defined);
“the Offices Portion of the Landlord’s Building”	that part of the Landlord’s Building described in Part 5 of the First Schedule hereto;
“the Perpetuity Period”	the period of the lives of all the lineal descendants of his Britannic Majesty George V living at the date hereof and twenty one years after the death of the survivor of such descendants;
“Planning Acts”	the Local Government (Planning and Development) Acts, 1963 to 1993 and the Urban Renewal Act 1986, and any statutory modification or re-enactment of those Acts for the time being in force and any regulations or orders made thereunder;
“the Prescribed Rate”	on each occasion when the same falls to be calculated hereunder a rate of interest equal to two per centum per annum above the rate from time to time certified by Allied Irish Banks, Plc on each 1 January, 1 April, 1 July and 1 October immediately preceding each such occasion as being the rate offered to it on such day in the Dublin Interbank Market for amounts in excess of One Hundred Thousand Irish Pounds (IR£100,000) for three month periods (and if during any period when the same falls to be calculated hereunder the rate shall be varied from time to time then the rate so varied shall apply) or (in the event that such rate is no longer published and used) such other comparable rate of interest as (in default of agreement) may be certified by a leading independent firm of Chartered Accountants in Ireland appointed by the Landlord compounded quarterly on 1 January, 1 April, 1 July and 1 October in every year;
“Public Areas”	all Formally Opened areas from time to time within the Development Area (excluding the Units as that term is defined by the Superior Lease save any part thereof which is agreed to be a Public Area) and further including without prejudice to the generality of

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	the foregoing the public walks, malls, roads, bridges, decks, lifts, stairs, staircases and other similar features Provided Always that if the Superior Landlord shall cause or permit any alterations in the Development Area which shall in any way reduce, alter or extend the area or location of the Public Areas or any part thereof then the definition of Public Areas shall as and where necessary be modified accordingly.
“the Public Area Services”	the services specified in Part 1 of the Fifth Schedule to the Superior Lease or any of them;
“the Public Area Service Charge”	the public area service charge as defined by the Superior Lease in so far as it relates to the Offices Portion of the Landlord’s Building;
“Rent”	the Rent from time to time hereby reserved;
“the Society of Chartered Surveyors In the Republic of Ireland” and Incorporated Law Society”	the bodies so named at the date of this Lease and shall include any other bodies established from time to time in succession or in substitution for each of the said bodies or carrying out the functions currently carried out by the same;
“the Superior Landlord”	the Dublin Docklands Development Authority;
“the Superior Lease”	Lease dated 19 May 1994 between (1) the Superior Landlord and (2) the Landlord with respect to the Landlord’s Building;
“Stack L”	the property described in the Third Part of the First Schedule hereto of which the Landlord’s Building forms part and refers to each and every part of the building or buildings, additions or improvements erected thereon;
“Supervening Events”	means:
	(a)the Landlord has failed despite using its reasonable endeavours to obtain the permissions; or
	(b)any of the permissions have been granted subject to a lawful condition with which it

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	would be unreasonable to expect the Landlord to comply; or
	(c)some defect or deficiency in the land upon which the rebuilding or reinstatement is to take place would mean that the same could only be undertaken at a cost that would be unreasonable in all the circumstances; or
	(d)the Landlord is unable to obtain access to the site for the purposes of rebuilding or reinstating; or
	(e)the rebuilding or reinstating is prevented by war, act of God, government action, civil commotion, strike, lock-out; labour dispute, shortage of labour and/or materials; or
	(f)any other circumstances beyond the control of the Landlord;
“the Tenant”	the party hereto of the other part and its successors and permitted assigns;
“the Term”	the term of years created by this Lease;
“Total Service Charges’	where used means collectively “the due proportion” as defined by the Superior Lease of the Public Area Service Charge and the Landlord’s Offices Service Charge;
“the Utilities”	water, gas, telephone, television, oil, soil, sewage, waste of all kinds, electricity, electric impulses, air, smoke, fumes of all kinds and other matters and forms of energy and other things of a like nature;

1.05Interpretation

(a)References in this Lease to a statute or section of a statute shall include references to any statutory consolidation, amendment, modification or re-enactment thereof for the time being in force and all regulations, statutory instruments, rules, notices, directions, consents, orders and other provisions made thereunder and any conditions attaching thereto.

(b)Any covenant in this Lease by the Landlord or the Tenant not to do

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any act or thing shall extend to its not suffering or permitting the doing of that act or thing.

(c)Any reference in this Lease to the doing or permitting of any act or thing by the Landlord or Tenant shall be deemed to include the doing or permitting of that act or thing by the workmen servants or other employees or duly authorised agent of the Landlord or of the Tenant.

(d)All rights of entry exercisable hereunder by the Landlord shall extend to and include the Superior Landlord and their respective Architects, Engineers, Surveyors, Servants, Contractors, Agents, Licensees and Employees.

(e)The masculine gender shall include the feminine and neuter and vice versa and words importing persons shall include firms or companies and corporations and vice versa and obligations undertaken by two or more parties shall be joint and several obligations.

(f)Words such as “hereunder” “hereto” “hereof” and “herein” and other words commencing with “here” shall unless the context clearly indicates to the contrary refer to the whole of this Lease and not to any particular section paragraph or sub-paragraph thereof.

(g)Any reference to a section, clause, paragraph or sub-paragraph shall be a reference to the section, clause, paragraph or sub-paragraph of the provision in which the reference occurs unless from the context it is clear that some other provision is intended.

(h)Any interest due hereunder by the Tenant to the Landlord or vice versa shall accrue from day to day as well after as before any judgment.

(i)Words importing the singular number only shall include the plural and vice versa and where there are two or more persons included in the expression “the Tenant” then the covenants herein expressed to be made by the Tenant shall be covenants by such persons jointly and severally.

(j)In the above definitions unless there is something in the subject or context inconsistent therewith any references to leases and expressions applicable to leases shall include references to licences and other interests and similar expressions insofar as applicable and appropriate to licences and other interests.

(k)Any reference to a matter requiring the consent of the Landlord shall

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where the context requires also require the consent of the Superior Landlord.

1.06Captions

The section headings and captions to the clauses and the index in this Lease are for convenience of reference only and shall not be considered a part of or affect the construction or interpretation of this Lease.

SECTION 2.00 - - DEMISE RENT AND COVENANTS

2.01 Demise, Rent and Covenants

(a)The Landlord hereby demises unto the Tenant the Demised Premises to be held by the Tenant for the term and at the rent set out at Part Four of the First Schedule hereto.

(b)The Demised Premises are demised together with the rights, easements and privileges set out in Part One of the Second Schedule hereto but excepting and reserving as set out in Part Two of the Second Schedule hereto.

(c)The Tenant covenants with the Landlord in the manner set out in the Third Schedule hereto.

(d)The Landlord covenants with the Tenant in the manner set out in the Fourth Schedule hereto.

(e)The demise made is subject to the provisions matters and things set out in the Fifth Schedule hereto which are hereby agreed and declared by and between the Landlord and the Tenant.

2.02Certificate

It is hereby certified that the Demised Premises is situate in the County Borough of Dublin.

2.03Finance Act Certificate

It is hereby certified for the purposes of the stamping of this instrument, that this is an instrument to which the provisions of Section 112 of the Finance Act, 1990 do not apply in that it is a lease of part of a refurbished building containing no residential element in which no consideration is payable other than rent.

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FIRST SCHEDULE

Part 1 - the Landlord’s Building

ALL THAT AND THOSE the property shown outlined in red on Map A situate at Custom House Docks in the City of Dublin being part of the lands and building known as Stack L and described in Folio 60033F of the Register County of Dublin known or to be known as the Dublin Exchange Facility, Custom House Dock, Dublin.

Part 2 - the Demised Premises

ALL THAT AND THOSE parts of the floor of the Landlord’s Building known or to be known as Office Units 7,7a & 7b shown at Second floor level outlined in blue on Map B1 annexed hereto including comprising of 4,025 square feet (approximately):

(a)the internal plaster surfaces and finishes of all external structures or load bearing walls and columns which abut on the Demised Premises but not any other part of such walls and columns;

(b)the floor finishes so that the lower limit of the Demised Premises shall include such finishes but shall not extend to anything below them save that any raised or access floors and the cavity below them shall be included;

(c)the ceiling finishes so that the upper limit of the Demised Premises shall include such finishes (including suspended ceilings (if any) and light fittings) but shall not extend to anything above them;

(d)the entirety of any non-loadbearing internal walls within the Demised Premises;

(e)the inner half severed medially of the internal non-loadbearing walls dividing the Demised Premises from other parts of the Landlord’s Building or the remainder of the building known as Stack L;

(f)all additions and improvements to the Demised Premises;

(g)all the Landlord’s fixtures and fittings of every kind which shall from time to time be in or upon the Demised Premises whether originally affixed or fastened to or upon the same or otherwise except any such fixture installed by the Tenant and that can be removed from the Demised Premises without defacing the same; and

(h)any Conducting Media that exclusively serve the Demised Premises.

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Part 3 - Stack L

ALL THAT AND THOSE the lands with the building thereon known as Stack L shown on Map E and thereon edged green situate at Custom House Dock in the City of Dublin being part of the lands in Folio 60033F of the Register County Dublin.

Part 4 - The Term and the Rent

THE TERM

20 years commencing on 1 August 1998 and terminating on 31 July 2018.

THE RENT

The Tenant shall pay the Landlord during each year of the Term the yearly rent of £88,550 subject to review at the times and in the manner set forth in the Seventh Schedule hereto.

The Rent in respect of each year of the Term is to be paid in advance on the Instalment Days.

In addition the Tenant shall pay to the Landlord as additional Rent the Due Proportion of the Total Service Charges payable in the manner and at the times specified in Part 3 of the Sixth Schedule hereto;

Part 5 - The Offices Portion of the Landlord’s Building

ALL THAT AND THOSE the Property shown outlined in brown on Map C situate at Custom House Docks in the City of Dublin being part of the lands and buildings known as Stack L and described in Folio 60033F of the Register County Dublin being the offices constructed or to be constructed to serve the Dublin Exchange Facility.

Part 6 - The Dublin Exchange Facility

ALL THAT AND THOSE that part of the Landlord’s Building shown on Map D annexed hereto and outlined in brown.

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SECOND SCHEDULE

Part 1 - Rights granted to the Tenant

THERE ARE GRANTED to the Tenant the following rights (as rights appurtenant to the Demised Premises and each and every part thereof):

1.Right to pass and repass over the Public Areas.

Subject to same being Formally Opened, full free right and liberty (in common with the Landlord and all others authorised by the Landlord from time to time and all others similarly entitled from time to time) for the Tenant, its undertenants, servants, agents and visitors to pass and repass at all times and for all purposes:

(a)with or without vehicles over all the road’s now or hereafter within the Perpetuity Period forming part of the Public Areas; and

(b)by foot over all the walkways, malls, squares and other pedestrian areas now or hereafter within the Perpetuity Period forming part of the Public Areas;

(c)with or without vehicles over the roadway shown coloured yellow and hatched on the map F annexed hereto until such roadway is Formally Opened and over the Amiens Street Right of Way for so long as the Amiens Street/Mayor Street Licence subsists;

subject to the right of the Landlord and the Superior Landlord to alter or vary such rights but not in a manner that prevents or materially interferes with access to or egress from the Demised Premises.

2.Right to pass through the Common Parts of the Offices Portion of the Landlord’s Building. The right (in common with the Landlord and all others authorised from time to time by the Landlord) to pass on foot only over and along the Common Parts of the Offices Portion of the Landlord’s Building in order to gain access to or regress from the Demised Premises.

3.Right to passage of Utilities. The right (in common with the Landlord and all others authorised by the Landlord from time to time and all others similarly entitled) of free and uninterrupted passage of and running of the Utilities and other services to and from the Demised Premises, from and to the Nearby Premises, the Dublin Exchange Facility and the Development Area, in and through the appropriate Conducting Media whether installed now or within the Perpetuity Period to be laid, in or under such land or buildings to the extent that the same are laid or formed or will be laid or formed to serve and are capable of serving the Demised Premises and the right to maintain connections with the Conducting Media within the Demised Premises to the extent aforesaid for the purpose of exercising the said rights of passage or any of them SUBJECT to:

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(a)the Tenant causing as little damage and inconvenience as possible in the exercise of such rights and as soon as practicable making good any damage thereby caused to such land and buildings; and

(b)there being no use or attempt to use the Conducting Media to an extent which is in excess of the capacity which the same or any part of the same is designed to bear or for a purpose for which same is not provided.

4.Right of support. The full and free right of support and protection to the extent now enjoyed or to be acquired during the Perpetuity Period by the Demised Premises from the Dublin Exchange Facility and the Nearby Premises.

5.Right of escape in the event of fire. The right of escape in the event of fire or other emergency through fire doors and fire escapes laid out for that purpose in or over the Nearby Premises and the Development Area.

Part 2

Rights Excepted and Reserved
to the Landlord, the Superior Landlord and Others

THESE ARE EXCEPTED AND RESERVED to the Landlord, the Superior Landlord and others;

1.Right to passage of Utilities. The right (in common with the Tenant and the tenants and the owners and occupiers from time to time of Stack L and all others similarly entitled from time to time) of free and uninterrupted passage of and running of the Utilities and other services to and from the Nearby Premises, the Dublin Exchange Facility and the Development Area, from and to the Demised Premises, in and through the appropriate Conducting Media (whether installed now or within the Perpetuity Period) to be laid in, on or under the Demised Premises to the extent that the same are laid or formed or will be laid or formed to serve and are capable of serving the Nearby Premises, the Dublin Exchange Facility and the Development Area and the right to make and maintain connections with and to lay, repair, renew and replace such Conducting Media or any of them to the extent aforesaid (to be exclusive to the Landlord and all others authorised by it with respect to the Dublin Exchange Facility) for the purpose of exercising the said rights or any of them SUBJECT TO:-

(a)the person exercising such rights causing as little damage and inconvenience as possible in the exercise of such rights and as soon as practicable making good any damage to the Demised Premises thereby caused; and

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(b)          there being no use or attempt to use the Conducting Media to an extent which is in excess of the capacity which the same or any part of the same is designed to bear or for a purpose for which same is not provided.

2.Right of support. The full and free right of support, shelter and protection to the extent now enjoyed or to be acquired during the Perpetuity Period by the Dublin Exchange Facility, the Nearby Premises from the Demised Premises.

3.Right to enter. The right for the Landlord, the Superior Landlord and the tenants or other owners for the time being of Stack L and their authorised agents and other authorised in writing by the Landlord or the Superior Landlord on reasonable written notice at all reasonable times and from time to time (except in case of emergency when written notice shall be given as soon as practicable) and (without prejudice to the rights of the Superior Landlord under the Superior Lease) to enter upon the Demised Premises or such part thereof as is reasonably necessary for the purpose of exercising the rights set out in sub-clause 1 above and for the purpose of performing the Landlord’s Offices Services, the person or persons exercising such rights doing as little damage and causing as little inconvenience as possible during the exercise of such rights and forthwith making good any damage thereby occasioned to the Demised Premises.

4.Right to rebuild adjoining buildings. The right to rebuild or alter any of the buildings now or hereafter adjoining or near the Demised Premises and to build upon, use, add to or extend or develop any land now or hereafter belonging to the Landlord and the Superior Landlord (other than the Demised Premises) at any time or times and for any purpose whatsoever causing as little inconvenience, interference or damage as possible to the Demised Premises and forthwith making good any damage thereby occasioned to the Demised Premises and without prejudice to the rights of the Superior Landlord under the Superior Lease making as little noise as is reasonably possible having regard to the nature of the works.

5.Right to close temporarily the Public Areas. The right to close temporarily and for such time as is reasonably necessary at any time any part or parts of the Public Areas for the purpose of repairing, renovating, replacing, cleaning and maintaining the same Provided Always that the Tenant shall have access to the Demised Premises.

6.Right to make rules and regulations. The right from time to time to make reasonable rules and regulations and to make additional amendments or revisions thereof for the orderly, convenient and proper operation, management and maintenance of the Development Area as a whole or any part thereof and in particular the Public Areas and the Common Parts of the

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Offices Portion of the Landlord’s Building.

THIRD SCHEDULE

Covenants by the Tenant

1.00Payments by the Tenant

1.01To pay the Rent

To pay to the Landlord the Rent and additional rents hereby reserved at all times and in the manner at and in which the same is herein reserved and made payable without, save as may be required by law, any deduction or set off whether legal, equitable or otherwise and if so required by the Landlord to make any such payments by Banker’s Order to any bank account or other accounts that the Landlord may from time to time nominate and on the signing hereof to complete the Banker’s Order attached hereto.

1.02To Pay Outgoings

To pay all existing and future rates, taxes, duties, charges, levies, assessments, impositions and outgoings whatsoever (whether parliamentary, parochial or otherwise and whether of a capital or revenue nature) which are now or hereafter imposed or charged or assessed upon or payable in respect of the Demised Premises or any part or parts thereof or on the owner or occupier in respect thereof or anything done thereon respectively (Landlord’s property, capital and income taxes excepted) and pending a separate valuation of the Demised Premises to pay to the Landlord on demand a contribution to the Landlord’s liability to rates on the Landlord’s Building on a current valuation to be specified by the Landlord to the Tenant at the time of demand at the poundage from time to time current.

1.03To pay Legal and Other Charges

To pay on demand to the Landlord from time to time all proper and reasonable solicitors, surveyors and other charges incurred by the Landlord in or in contemplation of any application to the Landlord for any consent pursuant to the covenants herein or in the Superior Lease and of any notice or proceedings under Section 14 of the Conveyancing and Law of Property Act, 1881 by the Landlord notwithstanding that forfeiture shall be avoided otherwise than by relief granted by the Court and of the preparation and service of any schedule of dilapidations served during or after the

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Determination of the Term and to keep the Landlord fully indemnified in respect thereof.

1.04To pay stamp duty and VAT

To pay to the Landlord’s solicitors on the execution hereof the stamp duty on the original and on the counterpart of this Lease and to pay to the Landlord the Value Added Tax exigible on the grant of this Lease and on demand the amount of Value Added Tax (if any) from time to time payable upon the Total Service Charges reserved as additional rent hereunder;

1.05To pay for telecommunications lines and services

To pay duly and punctually for all telecommunications lines and services including, in particular but not exclusively telephones and services, used or consumed respectively on the Demised Premises.

1.06To pay interest

To pay interest (as well after as before any judgement) on any Rents or other monies (of whatever nature) from time to time payable by the Tenant to the Landlord which are unpaid for 21 days or more after the date on which the same have been demanded at the Prescribed Rate from the date on which the same becomes payable to the date of actual payment Provided That nothing in this Clause shall entitle the Tenant to withhold or delay payment of rents or any other monies after the date upon which they first fall due.

1.07To pay costs of abating a nuisance

To pay all reasonable and proper costs incurred by the Landlord in abating a nuisance created by or directly attributable to the Tenant’s use of the Demised Premises and executing all such works as may be necessary for abating such a nuisance or for remedying any other matter in connection with the Demised Premises in obedience to a notice served by any local or statutory or other competent authority.

1.08To pay costs of licences and certificates

To pay to the Landlord all reasonable and proper costs incurred by the Landlord attendant upon and incidental to every application made by the Tenant for a consent, licence or certificate herein required or made necessary or for a decision as to whether or not a consent or licence is required whether any such decision is that no consent, licence or certificate is required or whether any such consent, licence or certificate be granted or refused or granted subject to any condition or qualification or whether the application be withdrawn.

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2.00Repair and Maintenance

2.01To keep clean and tidy and to repair and to put and keep in repair during the term hereby created the Demised Premises and every part thereof, and any additions alterations and extensions thereto and every part thereof and without derogating from the generality of the foregoing the internal surfaces of the floors ceilings and structural walls and surfaces of any structural part of the demised premises and the entire of the walls included in the demise, the doors, locks, plate glass and other glass in windows, fixtures, fittings, fastenings, conduits and utilities but excluding the machinery therein (damage by any of the Insured Risks as hereinafter defined in Clause 1 hereof excepted if and so long only as the policy or policies of insurance shall not have been vitiated or payment of the policy monies withheld or refused in whole or in part by reason of any act neglect or default of the Tenant or the servants agents licensees or invitees of the Tenant).

2.02To properly clean the inside of the windows of and all glass doors in the demised premises at least once every two months throughout the term of this Lease.

2.03To install such curtains and blinds in or on the windows of the demised premises or otherwise serving the same as the Landlord may from time to time reasonably require in that behalf.

2.04Not to substitute any blinds shutters or curtains in or on the windows of the demised premises in place of those now hanging without first obtaining the consent in writing of the Landlord nor to put or display on or in the demised premises any unsightly object which shall be visible from the exterior thereof.

2.05Paint inside

In the year 1999 if the tenancy hereby created should still exist and thereafter in every fifth year and in the last year of the said term (whether determined by effluxion of time or otherwise) to prepare and paint in a proper and workmanlike manner all the inside wood metal and other works of the demised premises usually or requiring to be painted with two coats at least of good oil paint or good synthetic paint AND ALSO with such internal painting to white-wash colour-wash distemper grain varnish french or wax polish paper and otherwise decorate in a proper and workmanlike manner and with good quality materials all such internal parts of the demised premises as have been or ought properly to be so treated AND as often as may be necessary to clean and treat in a suitable manner for its maintenance in good condition all the inside wood metal work and stone work (whether polished or not) not required to be painted or french

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polished or distempered and to clean all tiles glazed bricks aluminium windows and doors and similar washable surfaces.

2.06To do work as directed by a Statutory Authority

To do all such works as may be directed or required by any statutory authority or by any public or other authority to be done during the Term in respect of the Demised Premises whether by the owner or occupier or the Landlord or the Tenant arising only out of the Tenant’s use and occupation of the Demised Premises and to indemnify and keep indemnified the Landlord against all claims and liabilities in respect thereof excepting those claims liabilities or works resulting from the Landlord’s negligence, wilful misconduct or omission.

2.07To comply with statutory notices

To comply, at the Tenant’s own expense, with any statutory notice lawfully served by any local or public authority upon the Tenant concerning the Demised Premises.

2.08To permit the Landlord and the Superior Landlord to enter to view

To permit (after receiving reasonable notice in writing) the Landlord and the Superior Landlord with or without their agents, surveyors, workmen and others as the case may be to enter and view the condition of the Demised Premises and of any defects, decays and wants of reparation to the same, or any works or acts to be done there and for which the Tenant shall be liable hereunder, to give notice to the Tenant or leave on the Demised Premises notice thereof in writing together with such notice of the hours within which such repairs may be executed.

2.09To permit the Landlord and others to exercise rights

To permit the Landlord, the Superior Landlord the Management Company and (if authorised in writing by the Landlord) the owners, lessees or occupiers of Nearby Premises and the Dublin Exchange Facility and their respective agents, officers, servants, contractors, licensees and workmen with all necessary appliances, at all reasonable times during the Term and after giving reasonable notice in writing (except in the case of emergency) to enter the Demised Premises to execute repairs to the Nearby Premises, the Dublin Exchange Facility or to other premises belonging to the Landlord, or to secure or exercise any of the rights excepted and reserved in Part Two of the Second Schedule hereto or for or in connection with the provisions of the maintenance and services to be provided as set out in the Sixth Schedule hereto, the person or persons so entering causing as little damage to the Demised Premises and making good all damage thereto occasioned

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by such entry without unreasonable delay but without payment or compensation for any unavoidable or necessary annoyance, nuisance, noise, vibration or inconvenience caused to the Tenant.

2.10To protect the Conducting Media

To keep all the Conducting Media in the interior of the Demised Premises reasonably protected from frost and to be responsible for all damage (except damage arising from the occurrence of any of the Insured Risks and the policy of insurance shall not have been vitiated by any act or omission of the Tenant their servants agents invitees or licensees) occasioned through the bursting, overflow or stopping up of pipes, fixtures and fittings occasioned by the negligence of the Tenant, or by its servants and others and not to permit the waste of any water.

2.11Not to damage the Demised Premises or the Development Area

Not to cause or permit any damage to be done to any part of the Demised Premises or the Development Area or the Nearby Premises or the Dublin Exchange Facility and if any damage is so caused or permitted in contravention of this Clause to pay to the Landlord on demand all costs and expenses incurred by the Landlord or the Management Company in repairing such damage and in reinstating the damaged portion of the Demised Premises or the Development Area or the Nearby Premises or the Dublin Exchange Facility to its former state and all loss and expense sustained by the Landlord or the Management Company by reason of such damage.

3.00Use of the Premises

3.01User

Throughout the Term and Subject Always to the other provisions of this Lease to use the Demised Premises as offices in connection with the activities of the Dublin Exchange Facility in the Landlord’s Building for the purposes of stockbroking and/or dealing in equities, currencies, financial futures, derivatives products, commodities and commodity futures and derivatives thereof but not further or otherwise and the Demised Premises are hereby expressly authorised to be used wholly or partly for the purpose of carrying on an activity consisting of or including a relevant trading operation within the meaning of Section 39B (inserted by Section 30 of the Finance Act 1987 as amended by Section 36 of the Finance Act 1988) of the Finance Act, 1980.

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3.02Not to overload

Not to overload or permit to be overloaded in any way whatsoever the floors and other structural parts of the Demised Premises or the supplies and services thereto so as to exceed the load which it shall have been designed to bear and to take reasonable steps to acquaint occupiers of the Demised Premises with particulars of maximum permitted floor loadings for the floor of the respective parts of the Demised Premises which such occupiers shall be entitled to use.

3.03Not to suspend objects from the ceiling

Not without the consent of the Landlord, to suspend anything from any ceiling of the Demised Premises. On any application by the Tenant for the Landlord’s consent the Landlord may consult and obtain the advice of an engineer or other person in relation to the loading proposed by the Tenant and the Tenant shall repay to the Landlord on demand the fees of any such engineer or other person.

3.04Not to permit nuisance or annoyance

Not to permit or suffer to be done in or upon the Demised Premises or any part thereof anything which in the Landlord’s opinion may be or become a nuisance, damage, disturbance, danger, annoyance or inconvenience to the Landlord, or the owners or lessees or occupiers of the Nearby Premises and not at any time during the Term to use the Demised Premises as a residence or to carry on there any noisy, noxious, dangerous or offensive trade or business or to use the same for any illegal or immoral purpose, pursuit or occupation, or as a betting office.

3.05Not to instal machinery

Not to instal or suffer to be installed any machinery on the Demised Premises which may be noisy or cause undue vibration or which shall be either dangerous or a nuisance to the Landlord or the owners, licensees or occupiers of Nearby Premises or the Dublin Exchange Facility.

3.06Not to allow easements to be acquired

Not to permit or suffer any encroachment upon the Demised Premises or the acquisition of any right to light, passage, drainage or other easement on, over or under the Demised Premises, and if any such encroachment or easement shall be made or acquired or threatened to be acquired, forthwith to give notice to the Landlord and at the cost of the Tenant to do all such things as may be proper and necessary for the purpose of preventing the making of such encroachment or the acquisition of such easement or right.

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3.07Not to obstruct the Conducting Media

Not to stop up, obstruct, permit or suffer to be stopped up or obstrusted or to suffer oil, grease or other deleterious matter or substances to enter the Conducting Media of or serving the Demised Premises.

3.08Not to obstruct any windows or other lights

Not to stop up, darken or obstruct any windows or other lights belonging to the Demised Premises or permit any new window light, opening doorway, paths, passages, drains or other encroachment or easement to be made or acquired in, against, out of or Upon the Demised Premises, which may be or grow to the damage, annoyance or inconvenience of the Landlord or any of its tenants.

3.09Not to leave impediments in the Public Areas

Not at any time to leave or allow to be left any goods, packing esses, parcels, bicycles or impediments of any sort whatsoever in the Common Parts of the Offices Portion of the Landlord’s Building or in the Public Areas.

3.10Not to display advertisements and signs

Not to place or display on the exterior of the Demised Premises or on the windows or inside the Demised Premises so as to be visible from the exterior of the Demised Premises any name, writing, notice, sign, illuminated sign, display of lights, placard, poster sticker or advertisement and forthwith upon the receipt of written notice to that effect from the Landlord to remove any notice, sign, poster, advertisement, label, showcase, stall, goods or machinery of any description on the external parts or visible from the exterior of the Demised Premises to which the Landlord reasonably objects.

3.11Not to allow loud music

Not to play or use in theDemised Premises any musical instrument, loudspeaker, tape recorder, gramophone, radio or other equipment or apparatus that produces sound that may be heard in the Nearby Premises, the Dublin Exchange Facility or outside the Demised Premises.

3.12Not to hold “fire sale” or “bankruptcy sale”

Not to hold within the Demised Premises a “fire sale” or a “bankruptcy sale” or to advertise the holding of such a sale in the Demised Premises.

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3.13Not to sell Intoxicating Liquor

Not to use, permit or suffer the Demised Premises to be used in any way whatsoever for the sale of beer, wine, spirituous or other intoxicating Liquor to the public whether the same are sold for consumption on or off the Demised Premises.

3.14Not to place or deposit outside any vehicle or article

Not without the consent in writing of the Landlord to stand or place of permit or suffer to be placed or deposited outside any part of the Demised Premises or on any part of the Common Parts of the Offices Portion of the Landlord’s Building, the Development Area or the Public Areas any automatic machine, display case, board, vehicle (other than while loading or unloading) or article of any description whatsoever or to solicit the customers or to transact business upon the same or to obstruct the same in any way whatsoever but at all times to co-operate in keeping all such areas free and unobstructed.

3.15Not to hold sales by auction

Not to allow any auction other than in accordance with the permitted use of the Demised Premises to be held on the Demised Premises or to solicit or tout for customers or to transact business on the footway or Pavements outside the Demised Premises or anywhere within the Development Area

3.16Not to allow infestation

Not to bring any furniture, shelving or other wood into the Demised Premises which has or is infected by woodworm or other pests.

3.17Nuisance use restriction

Not to do about the Demised Premises anything which may be immoral or illegal.

3.18Safety use restriction

Not to do or permit any act to be done upon the Demised Premises which may endanger the safety or stability or security of the Demised Premises, the Development Area, the Dublin Exchange Facility or the Nearby Premises or which obstructs the access to any fire equipment or the means of escape from the Demised Premises, the Dublin Exchange Facility or the Nearby Premises and not to lock any fire door while the Demised Premises are occupied.

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3.19Storage use restriction

Not to store or place any inflammable, dangerous or explosive substance, liquid or gas upon the Demised Premises other than in a container or building properly constructed for the purpose and having obtained the prior written consent of the Landlord and the approval of the Local Authority.

3.20To comply with all statutory requirements

At all times during the said Term to observe and comply in all respects with all and any provision, requirement and direction of the Acts of the Oireachtas, the Dublin Corporation or the relevant Local Authority or any regulations or orders made under the said Acts or by Dublin Corporation or the relevant Local Authority so far as they relate to or affect the Demised Premises or the user thereof and to execute all works and provide and maintain all arrangements which are or may be so directed or required to be executed, provided or maintained whether by the Landlord or the Tenant upon or in respect of the Demised Premises.

3.21To comply with regulations

To perform, observe and be bound by such regulations as may be reasonably made by the Landlord from time to time regarding the Landlord’s Building or the Management Company from time to time regarding the use of the Public Areas including but not so as to limit the foregoing the regulation of the removal of garbage from the Demised Premises, the Landlord’s Building, the Nearby Premises or any of them, and for preserving the amenities or otherwise in connection with the management, use or enjoyment of the Common Parts of the Offices Portion of the Landlord’s Building or the Development Area which may be made known to the Tenant by the Landlord.

3.22Reletting sign

To permit the Landlord and its agents at any time within six calendar months next before the expiration or sooner determination of the Term to enter upon the Demised Premises and to fix and retain without interference upon any suitable part or parts of the Demised Premises (but not in any position likely to interfere with the user of the Demised Premises) a notice board for reletting or disposing of the same and not to remove or obscure the same and to permit all persons authorised by the Landlord or its agents to view the Demised Premises at all reasonable times in the day time without interruption having first made appointments to do so after reasonable notice has been given to the Tenant.

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3.23Additions and alterations

(a)Not to make or carry out or suffer or permit any material internal or external alteration or addition to the Demised Premises or any part thereof except:-

(i)with the prior written consent of the Landlord (whose consent shall not be unreasonably withheld or delayed); and

(ii)subject to such terms and conditions as the Landlord may reasonably require; and

(iii)in accordance with drawings and specifications previously approved in writing by the Landlord (such approval not to be unreasonably withheld or delayed); and

(iv)after having obtained and supplied the Landlord with copies of all requisite consents, licences and permissions for the carrying out of such works from any local or public or other statutory or other competent authority or body.

3.24Not to make any claim or objection

Not to make or permit to be made any claim or objection against the Landlord, the Superior Landlord or the Management Company in respect of any works of construction, building, installation, alteration, addition or repair carried out to the Landlord’s Building, Stack L or within the Development Area or upon any land or property of the Landlord or the Superior Landlord adjoining or near thereto by the Landlord, or the Superior Landlord or by any persons authorised by the Landlord, or the Superior Landlord Provided Always that any such works shall be carried out with as little inconvenience to the Tenant as is reasonably practicable and no damage is caused to the Demised Premised Provided Always that nothing herein shall detract from or be deemed to be a waiver by the Tenant of any of its rights created or preserved by Statute.

3.25Planning Acts

(a)Not at any time during the Term to do or omit or suffer to be done or omitted any act, matter or thing in, on or respecting the Demised Premises required to be omitted or done by or under the Planning Acts for the time being in force or which shall contravene the Planning Acts.

(b)As soon as practicable to give to the Landlord notice of any order, direction, proposal or notice under the Planning Acts which is served

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upon or received by or comes to the notice of the Tenant in connection with the Demised Premises and to produce to the Landlord if so required any such order, direction, proposal or notice as aforesaid as is in the possession of the Tenant and in relation to any such order, direction, proposal or notice as aforesaid and to comply with the terms and provisions thereof as soon as possible.

3.26To comply with Local Authority requirements

At all times throughout the Term to comply with all legally binding requirements of Dublin Corporation or the relevant Local Authority in connection with the use or uses of the Demised Premises from time to time.

3.27Fire requirements

At all times throughout the Term to comply with all legally binding requirements of the appropriate authority notified to the Tenant together with all the recommendations of such authority notified to the Tenant which any insurers of the Demised Premises may from time to time require to be complied with in respect of the Demised Premises arising only out of the Tenant’s use and occupation of the Demised Premises whether notified or directed to the Landlord or the Tenant in relation to fire precautions;

3.28Not to use the Public Areas until Formally Opened

Not to use any part of the Public Areas until such part thereof is Formally Opened;

4.00Alienation

4.01No assignment or underletting of the Demised Premises or any part thereof without consent

Not without the prior consent of the Landlord (such consent not to be unreasonably withheld but which may be subject to reasonable conditions) to assign, underlet, charge, sublet or part with or share possession or occupation of the whole or any part of the Demised Premises;

4.02Alienation conditions

All assignments or sub-lettings shall be of the entire of the Demised Premises and the Landlord may in addition to such other conditions which the Landlord consider appropriate as the conditions of giving consent require:

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(a)an express covenant by the sub-lessee with the Tenant as intermediate landlord to observe and perform the covenants herein contained including a covenant not to further assign, sublet or part with the possession of the whole or any part of the Demised Premises without such consent as aforesaid; and

(b)in the case of an assignment to a limited liability company which is not an institutionally acceptable tenant on its own, not less than two directors thereof shall join in the assignment as sureties for the company in such form as the Landlord shall require and who shall covenant with the Landlord to make good to the Landlord all losses, costs and expenses sustained by the Landlord through the default of the company and to observe and perform the Tenant’s covenants and conditions contained herein; and

(c)in the case of an assignment to a subsidiary body corporate which is not an institutionally acceptable tenant on its own, its holding body corporate shall join in the assignment as surety for the subsidiary body corporate and shall covenant with the Landlord that in the event of the subsidiary body corporate going into liquidation and the liquidator disclaiming this Lease the holding body corporate shall itself accept a new lease of the Demised Premises in the terms hereof for the then unexpired balance of the Term; and

(d)in the case of an assignment to an individual or group of individuals who are not institutionally acceptable tenants on their own, that an independent surety shall be procured by the proposed assignee to guarantee the payment of the Rent and the due performance of the covenants and conditions herein contained by the Tenant; and

(e)that (if necessary) adequate security for the payment of the Rent and the due performance and observance of the covenants on the Tenant’s part (whether with or without surety) in a form suitable to the Landlord shall be provided by the proposed assignee; and

(g)an express covenant, condition or proviso in every sub-lease that the rent from time to time payable under such sub-lease shall not be less at any time than the rent per square foot from time to time payable hereunder.

4.03Applications for consent to alienate

Each application for consent to assign or sub-let the Demised Premises shall be in a form and content satisfactory to the Landlord and be accompanied, if required by the Landlord, by the following (if it is reasonable to require all or any of the same):

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In the case of a proposed assignee company by:

(a)the memorandum and articles of association of the company; and

(b)a banker’s reference for such company; and

(c)at least two trade references for such company by parties acceptable to the Landlord; and

(d)three years audited accounts of such company for the most recent period; and

(e)full particulars of the proposed use of the Demised Premises; and

(f)an acceptable undertaking to pay Landlord’s reasonable legal (on a solicitor and own client basis) and other costs of the application whether consent is granted or not;

and in the case of a proposed individual assignee by:-

(a)a bank reference for such individual; and

(b)at least two trade references for such individual by parties acceptable to the Landlord; and

(c)the names and full particulars of two acceptable sureties with bank references; and

(d)a description of the nature of the business of the individual; and

(e)full particulars of the proposed use of the Premises; and

(f)an acceptable undertaking to pay the Landlord’s reasonable legal (on a solicitor and own client basis) and other costs of the application whether consent is granted or not.

4.04To register assignments

Within 28 days of the execution of any disposition of this Lease or the Demised Premises whether by assignment, underlease, charge, transfer, or upon any transmission by death or otherwise affecting the Demised Premises, to register every such assignment, underlease or other devolution of the Tenant’s interest in the Demised Premises by producing to the Landlord’s solicitors a certified copy of the instrument affecting or evidencing the same.

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4.05To notify of assignments

Not at any time during the Term to assign, transfer or charge the Demised Premises without giving to the Landlord formal written notice of such assignment and reasonable information in respect of the assignee or assignees.

5.00Insurance

5.01Not to Avoid Insurance

(a)To comply with all the requirements of the insurers of the Landlord’s Building.

(b)Not to knowingly do or omit anything that could cause any policy of insurance on or in relation to the Landlord’s Building to become void or voidable wholly or in part nor (unless the Tenant shall have previously notified the Landlord and shall have agreed to pay the increased premium) anything by which additional insurance premiums may become payable.

(c)To keep the Demised Premises supplied with such fire fighting equipment as the insurers and the Fire Authority may require or as the Landlord may reasonably require and to maintain such equipment in a satisfactory and efficient working order and at least once every six months to cause any sprinkler system and other fire fighting equipment to be inspected by a competent person.

(d)To give notice to the Landlord immediately upon the happening of any event which might affect any insurance policy on or relating to the Landlord’s Building or upon the happening of any event against which the Landlord may have insured under this Lease and of which the Tenant is aware.

(e)Immediately to inform the Landlord in writing of any convictions, judgments or findings of any Court or Tribunal relating to the Tenant (or any director, other officer or major shareholder of the Tenant) of such a nature as to be likely to affect the decision of any insurer or underwriter to grant or to continue any such insurance.

(f)If and whenever during the Term the Landlord’s Building or any part thereof are damaged or destroyed by an Insured Risk and the insurance money under the policy of insurance effected by the Landlord pursuant to its obligations contained in this Lease is by reason of any act or default of the Tenant or anyone at the Demised Premises expressly with the Tenant’s authority wholly or partially

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irrecoverable immediately in every case to pay to the Landlord on demand with interest at the Prescribed Rate from the date of such damage or destruction up to the date of such payment the amount of such insurance money so irrecoverable.

6.00Miscellaneous

6.01Accidents on the Demised Premises, etc.

To indemnify the Landlord against all actions, claims, costs, damages and expenses arising out of any accident, happening or injury suffered by the Tenant, its invitees, licensees, servants, agents, officials or any other person or persons on, at or in the Demised Premises arising through the neglect, omission or default of the Tenant.

6.02To yield up

At the expiration or sooner determination of this Lease peaceably and quietly to yield up to the Landlord all of the Demised Premises in such repair, condition, decoration and otherwise as provided by the Tenant’s covenants herein contained together with all fixtures and Landlord’s plant and machinery and fittings which are at the commencement of this Lease or shall be at any time during the Term fixed into or about the Demised Premises except the Tenant’s own fixtures and trade fixtures which the Tenant shall be at liberty to remove before the expiration or Determination of the Term and to make good all damage to the Demised Premises caused by the removal of the Tenant’s fixtures and trade fixtures as aforesaid.

6.03Not to Vitiate Insurance

Not to knowingly do or permit or suffer to be done any act or thing whereby any policy or policies of insurance in respect of the Landlord’s Building may be or become void, voidable, invalidated, cancelled or altered and to comply with any requirements of the insurers.

6.04Notice

To give immediate notice to the Landlord of any notices or claims affecting the Demised Premises or any part thereof.

6.05Indemnity

Excepting that which may be due to the Landlord’s negligence, wilful misconduct or omission to indemnify and keep indemnified the Landlord against all and any expenses, costs, claims, demands, damages and other liabilities whatsoever in respect of the injury or death of any person or

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damage to any property howsoever arising directly or indirectly out of:

(a)the state of repair or condition of the Demised Premises; or

(b)the existence of any alteration thereto or the state of repair or condition of such alteration; or

(c)the user of the Demised Premises; or

(d)any work carried out or in the course of being carried out by the Tenant their servants agents invitees or licensees (including permitted licensees of bases for booths) and permitted undertenants; or

(e)anything now or hereafter attached to or projecting therefrom; or

(f)any other cause save the Insured Risks.

AND fully and effectually to indemnify the Landlord against the breach, non observance or non performance by the Tenant of any of the covenants or conditions on the part of the Tenant herein contained or of the provisos or stipulations herein contained and intended to be performed and observed by the Tenant and against any actions, costs, claims, expenses and demands whatsoever or howsoever arising in respect of or as a consequence (whether direct or indirect) of any such breach, non performance or non observance.

6.06Landlord’s agent

To admit the right of the Landlord’s agents for the time being to sign on behalf of the Landlord, notice to quit or other documents connected with the tenancy held under this agreement.

6.07Keyholders

To ensure that at all times the Landlord and the local police have written notice of the name, home address and home telephone number of at least two keyholders of the Demised Premises.

6.08Blinds

Not to install any blinds in the Demised Premises without the prior approval in writing of the Landlord who may require that such blinds be of a similar type to those used in the remainder of the Landlord’s Building.

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6.09Covenants in Superior Lease

To perform and observe the covenants on the part of the Tenant contained in the Superior Lease insofar as they do not fall to be performed by the Landlord under the terms of this Lease.

FOURTH SCHEDULE

(Covenants by the Landlord)

1.To insure

To insure the Landlord’s Building against the Insured Risks in accordance with the terms of the Superior Lease together with the Landlord’s Building Plant and Machinery and to the extent and for the sums specified in the definition of Insured Risks unless such insurance shall be vitiated by any act of the Tenant or by anyone on the Demised Premises expressly or by implication with the Tenant’s authority;

Damage to Demised Premises by Insured Risks

(a)if and whenever during the Term the Demised Premises or any part thereof is damaged or destroyed by any of the Insured Risks and the payment of the insurance money is not refused in whole or in part by reason of any act or default of the Tenant or any one on the Demised Premises expressly or by implication with the Tenant’s authority the Landlord shall use its reasonable endeavours in accordance with the terms of the Superior Lease to obtain all planning permissions or other permits and consents that may be required under the Planning Acts or other statutes (if any) to enable the Landlord to rebuild and reinstate (hereinafter called “the permissions”);

(b)subject to the provisions of Sub-clause (e) below the Landlord shall as soon as the permissions have been obtained or immediately where no permissions are required apply all monies received in respect of such insurance (except sums in respect of loss of rent) in rebuilding or reinstating the Demised Premises so destroyed or damaged;

(c)the Landlord shall not be liable to rebuild or reinstate the Demised Premises if and so long as such rebuilding or reinstating is prevented by Supervening Events;

(d)if two years after the destruction or damage of the Demised Premises it appears to the Landlord that it will not be practical to rebuild or reinstate the Demised Premises due to a Supervening Event or

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Supervening Events the Landlord may by notice in writing served at any time on the Tenant invoke the provisions of sub-clause (e) below;

(e)on service of a notice in accordance with sub-clause (d) above the Term will absolutely cease but without prejudice to any rights or remedies that may have accrued to either party against the other including (without prejudice to the generality of the above) any right that the Tenant might have against the Landlord. All money received in respect of the insurance effected by the Landlord shall be the property of the Landlord. The Tenant shall at the expiration of not less than 28 days prior written notice given by the Landlord in the circumstances outlined above at any time surrender to the Landlord all rights and interests of the Tenant in these presents to the Landlord free of all charges sub-leases and incumbrances of any nature and without any cost to the Landlord;

3.Covenants in Superior Lease

To perform and observe the covenants and conditions on the Tenant’s part contained in the Superior Lease and to use its best endeavours to procure that the Superior Landlord or the Management Company provides the Public Area Services;

4.Services

Subject to the Tenant complying with all the other covenants and conditions in this Lease the Landlord will use its reasonable endeavours to perform the Landlord’s Offices Services throughout the Term provided that the Landlord shall not be liable to the Tenant in respect of:

(i)any failure or interruption in any of the Landlord’s Offices Services by reason of necessary repair, replacements, maintenance of any Equipment or its damage or destruction or by reason of mechanical or other defect or breakdown or frost or other inclement conditions or shortage of fuel, materials, water or labour or any other cause beyond the Landlord’s control.

(ii)any act omission or negligence of any person undertaking the Landlord’s Offices Services or any of them on behalf of the Landlord.

PROVIDED ALWAYS that the Landlord may withhold, add to, extend, vary or make any alteration in the rendering of the Landlord’s Offices Services or any of them.

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5.The Museum Rent

To pay the Museum Rent as and when demanded by the Superior Landlord in accordance with the provisions of the Superior Lease.

6.The Public Area Service Charge

To pay the “due proportion” as defined by the Superior Lease of the Public Area Service Charge to the Superior Landlord in accordance with the provisions of the Superior Lease.

FIFTH SCHEDULE

(Provisos matters and things agreed and
declared by and between the parties)

1.Forfeiture

If the Rent or any part thereof shall remain unpaid for twenty-one days after demand therefor or if any of the covenants on the part of the Tenant or conditions or agreements herein contained shall not be performed or observed or if the Tenant being a company shall enter into liquidation (whether compulsory or voluntary) save for the purpose of amalgamation or reconstruction or if the Tenant being an individual shall enter into a composition with his creditors or commit any act of bankruptcy or have a receiving or adjudication order made against him or if the Tenant shall suffer any execution or attempted execution to be made against any of the Tenant’s effects then and in any of the said cases it shall be lawful for the Landlord at any time thereafter to re-enter the Demised Premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine but without prejudice to the right of action of the Landlord in respect of any arrears of Rent or any antecedent breach of covenant. Without prejudice to the generality of the foregoing the Landlord shall give 28 days written notice of its intention to forfeit this Lease to the Tenant and to any mortgagee of the Tenant from whom the Landlord has received prior written notice of such mortgage.

2.Arbitration

(a)All disputes or differences which may arise touching the provisions of this Lease or the operation or construction hereof or the rights or liabilities of the parties hereto shall be referred to arbitration by a single arbitrator to be appointed by agreement between the parties or in default of agreement to be appointed on the application of either

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party by the President for the time being of the Incorporated Law Society of Ireland Provided That in making such appointment the teid President shall be obliged to have regard to the nature of the dispute or difference in question and shall appoint a professional from a discipline appropriate in all the circumstances of the dispute.

3.Consents of Landlord to be in writing

Any approval, licence, consent, notice or request by the Landlord for any of the purposes of this Lease shall be in writing and shall be sufficient as regards the Landlord if it purports to be signed by a duly authorised officer and the giving of the same shall be at the expense of the Tenant.

4.Planning permission, etc.

No warranty is given or implied by the Lease or by the Landlord or otherwise that the use to which the Tenant proposes now or hereafter to put the Demised Premises or any alterations or additions which the Tenant may now or hereafter desire to carry out will not require planning permission under the Planning Acts and the Tenant will indemnify and keep indemnified the Landlord against all costs, claims, actions, proceedings, compensation, demands or charges which may arise directly or indirectly under the said acts in respect of the Demised Premises.

5.Covenants relating to other property

Nothing herein contained shall confer on the Tenant any right to the benefit or to enforce any covenant or agreement contained in any lease or underlease or other instrument relating to any other property belonging to the Landlord.

6.Payments to be treated as Rent

All payments due hereunder by the Tenant to the Landlord shall for the purpose of recovery thereof be deemed to be Rent and recoverable as such.

7.Break Option

The Tenant shall have the option of terminating this Lease on the 1 day of August 2008 (“the Termination Date”) by serving not less than six months notice in writing on the Landlord of its intention to so terminate (time being of the essence in this regard) and PROVIDED THAT full vacant possession of the Demised Premises is delivered up and all covenants and conditions on the Tenant’s part contained in this Lease have been performed and observed (including without prejudice to the generality of

35

the foregoing, the payment of all sums due) this Lease will absolutely determine and it shall be lawful at any time on or after the Termination Date for the Landlord or any other person or persons authorised by the Landlord to enter upon the Demised Premises in whole or part in the name of the Landlord and to repossess the same and enjoy the same as if this Lease had not been granted but without prejudice to any right of action or remedy of the Landlord in respect of any antecedent breach of any of the covenants or other conditions contained in this Lease.

8.Notice

Any document or notice requiring to be served on the Landlord or on the Tenant may be served on the Landlord by delivering it or by sending it by pre-paid registered post addressed to the Landlord at the Landlord’s registered office or such other address as the Landlord shall notify the Tenant in writing and may be served on the Tenant by delivering it at or by sending it by pre-paid registered post to the Demised Premises and any documents so posted shall be deemed to have reached the party to whom it was addressed in the usual course of the post.

9.Boundary walls and columns

Any boundary walls and columns of the Demised Premises which have been or are to be erected and are to afford support or shelter or use for or with the buildings structures and erections for the time being and from time to time on or within and forming part of the Demised Premises or any part thereof in common with other structures shall be party walls or party structures as the case may be.

10.Rights in respect of adjoining land

Notwithstanding any provision to the contrary in this Lease the Landlord shall have power at all times without obtaining any consent from or making compensation to the Tenant to deal with and use any other part of the Landlord’s Building or any property for the time being belonging to the Landlord or the Superior Landlord which adjoins or is opposite or near to the Demised Premises as it may think fit and to erect or suffer to be erected on such other part of the Landlord’s Building or on such adjoining opposite or neighbouring property any building or erection whatsoever.

11.Waiver

That no acceptance of or a demand for a receipt of Rent nor grant of any licence, consent or approval and no acceptance of any document for registration hereunder by the Landlord or its agent with notice of a breach of any covenant on the part of the Tenant shall be or be deemed to be a

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waiver wholly or partially of any such breach but any such breach shall be deemed to be a continuing breach of covenant and the Tenant shall not be entitled to set up any such demand, receipt, grant or acceptance in any action arising from the same.

12.Restrictions on adjoining land

Nothing herein contained or implied shall impose or be deemed to impose any restriction on the use of any other part of the Landlord’s Building or of any land or buildings of the Landlord or the Superior Landlord and not comprised in this Lease nor shall it operate to prevent or restrict in any way the development of any land not comprised in this Lease.

13.Right of entry to remedy breaches of covenant

If the Tenant shall not within two months after any notice (or forthwith in the case of emergency) commence and proceed diligently with the remedying of any breach of covenant on the Tenants part it shall be lawful for the Landlord and its contractors, agents and workmen (but without prejudice to the right of re-entry hereinafter contained) to enter the Demised Premises and to execute all repairs and works and to do such acts as may be necessary to comply with the said notice and the cost thereof shall be a debt due from the Tenant to the Landlord and shall be forthwith recoverable by action or by distress as rent in arrear, or to enter the Demised Premises for the purpose of taking schedules or inventories of fixtures, fittings and things in the Demised Premises to be yielded up at the expiration or sooner determination of this demise.

14.Entitlement to alter or vary or extend the Public Areas

The Superior Landlord shall be entitled in its absolute discretion from time to time and at any time to alter, reduce, extend, vary or abolish the Public Areas (other than the portion thereof within or giving direct access to the Demised Premises). The Landlord shall use reasonable endeavours to notify such alterations, reductions, extensions, variations or abolitions to the Tenant but any failure to notify shall not prejudice or affect the rights of the Superior Landlord, or the Landlord against the Tenant hereunder.

15.Removal of property after determination of Term

(a)If at such time as the Tenant has vacated the Demised Premises after the determination of this Lease any property of the Tenant shall remain in or on the Demised Premises and the Tenant shall fail to remove the same within 28 days after being requested by the Landlord so to do by a notice to that effect then the Landlord may as the agent of the Tenant sell such property and shall then hold the

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proceeds of sale after deducting the costs and expenses of removal, storage and sale reasonably and properly incurred by it to the order of the Tenant.

(b)The Tenant shall indemnify the Landlord against any liability incurred by it to any third party whose property shall have been sold by the Landlord in the bona fide mistaken belief (which shall be presumed unless the contrary be proved) that such property belonged to the Tenant and was liable to be dealt with as such pursuant to this Clause.

16.Section 40 Deasy’s Act, 1860

In case the Demised Premises or any part thereof shall be destroyed or become ruinous or uninhabitable or incapable of beneficial occupation or enjoyment by or from any of the Insured Risks the Tenant hereby absolutely waives and abandons its rights, (if any) to surrender this Lease under the provisions of Section 40 of the Landlord and Tenant Law Amendment Act (Ireland), 1860 or otherwise.

17.Suspension of Rent

If the Demised Premises or any part thereof shall at any time be destroyed or damaged by any of the Insured Risks so as to render the Demised Premises or any part thereof unfit for occupation or use and the relative policy or policies of insurance effected by the Landlord shall not have been vitiated or payment of the policy monies refused in whole or in part in consequence of any act, neglect or default on the part of or suffered by the Tenant then the Rent or a fair and just proportion thereof according to the nature and extent of the damage sustained shall be suspended and cease to be payable until such time as appropriate reinstatement shall have taken place or three years (whichever period is the shorter) and in case of dispute as to the proportion or period of such abatement the same shall be referred to arbitration by a surveyor to be appointed in accordance with Clause 2 of the Fifth Schedule.

18.JURISDICTION

18.1This Lease shall be governed by and construed according to the laws of Ireland applicable to contracts made wholly to be performed in Ireland.

18.2The Tenant submits to the jurisdiction of the Courts of Ireland for all the purposes of this Lease and the Tenant acknowledges that this agreement as to jurisdiction is incorporated at the request of the Landlord and for the benefit only of the Landlord.

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18.3The Tenant consents to the service of any legal proceedings on it or them at the Demised Premises.

19.It is hereby agreed and acknowledged by the parties that the Tenant is expressly authorised and required by this Lease to use or cause the Demised Premises to be used, wholly or partly for the purpose of carrying on an activity consisting of or including a relevant trading operation within the meaning of Section 39B (inserted by Section 30 of the Finance Act, 1987, as amended by Section 36 of the Finance Act, 1988) of the Finance Act, 1980, or bona fide used for preparing for the carrying on of such an activity for the purposes of Section 13(3) of the Landlord and Tenant (Amendment) Act, 1980 (inserted by Section 1 of the Landlord and Tenant (Amendment) Act, 1989).

SIXTH SCHEDULE

Part 1

(The Landlord’s Offices Services)

1.Repairing replacing renewing and maintaining (including painting and/or other decorative treatment and periodic cleaning and washing) of the Common Parts of the Offices Portion of the Landlord’s Building including (without prejudice to the generality of the foregoing) the Landlord’s Building Plant and Machinery and the primary PSTN telephone cabling system serving the Landlord’s Building.

2.In the event of any damage caused to the Landlord’s Offices Portion of the Building by the Insured Risks to discharge the amount of any Insurance Excess or the part thereof which covers the costs of such damage (as the case may be).

3.The provision of electricity to and the cleaning and lighting of the Common Parts of the Offices Portion of the Landlord’s Building and such heating and ventilation of the Offices Portion of the Landlord’s Building as the Landlord may decide to provide from time to time.

4.The providing of such amenities and services as the Landlord is by law or by contract required to provide and/or shall be reasonable and proper to provide taking into account principles of good estate management including (where appropriate) landscaped areas, seating ornamental features and information signs.

5.The replanting and maintenance of landscape features and grassed areas (if any) and the maintenance and repairing and replacement (when

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necessary) of any statuary or other decorative items and decorative lighting and flood-lighting in the Common Parts of the Offices Portion of the Landlord’s Building.

6.Installing maintaining repairing and replacing intruder security and/or fire fighting equipment alarm systems closed circuit television escape routes or other matters and things associated therewith in the Common Parts of the Offices Portion of the Landlord’s Building.

7.The engagement or provision of management staff and such advisers and contractors as may be reasonably necessary for the efficient provision of the Landlord’s Offices Services including a caretaker, superintending staff, maintenance, cleaning and security staff.

8.In respect of all persons employed for the purposes of carrying out the Landlord’s Offices Services the paying of all wages and PRSI Social Welfare and Insurance contributions and other payments required to be made by employers under any statute or other authority pensions or other payments and benefits (whether or not ex gratia) uniforms and other necessary clothing equipment and materials and payments for accommodation including a notional rent (not exceeding current market rent) for any premises in the Landlord’s Building or elsewhere provided rent free for the residence of any such person or persons.

10.The collecting storing and disposing of refuse including the maintaining repairing and replacing of refuse incinerators and/or compactors and suitable containers and other receptacles from the Common Areas of the Offices Portion of the Landlord’s Building.

11.Complying in respect of the Common Parts of the Offices Portion of the Landlord’s Building with:

11.1Any notice regulation or order of any competent authority and

11.2Any requirement of any present or future act of Parliament Order Bye-Law or regulation except where the same is the responsibility of a Tenant or occupier of part of the Offices Portion of the Landlord’s Building.

12.The making and publishing of any regulations for or in connection with the proper use of the Offices Portion of the Landlord’s Building and enforcement thereof.

13.The carrying out of any reasonable and proper work for the improvement or maintenance of the Common Parts of the Offices Portion of the Landlord’s Building and for the providing of services to the Common Parts of the Offices Portion of the Landlord’s Building.

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14.The management of the Offices Portion of the Landlord’s Building including the engagement of managing agents and the management fees thereof or (in the event that the Landlord’s employees manage the Offices Portion of the Landlord’s Building) the Landlord’s management fees therefor and including for the avoidance of doubt the cost of managing and arranging all of the services.

15.Insurance against public liability in relation to use and occupation of the Common Areas.

16.Any other service or undertakings which in the reasonable opinion of the Landlord or the Landlord’s Managing Agents are desirable for the comfort and convenience of the tenants of the Landlord’s Building generally.

17.The provision of a receptionist if required by the Landlord at the ground floor entrance and security for the Offices Portion of the Landlord’s Building.

18.Payment of the Museum Rent;

19.Payment of the Landlord’s Insurance Premiums;

20.Payment of the due proportion of the Public Area Service Charge under the provisions of the Superior Lease.

Part 2

Services Ascertainment and Payment

1.In this Schedule and in this Lease (unless otherwise stated):

1.1“the Services” means the Landlord’s Offices Services and the Public Area Services.

1.2“Service Costs” mean the costs and expenditure properly incurred by the Landlord in relation to the Services and may (in the discretion of the Landlord) include a reasonable sum by way of provision for future expenditure on any of the Services which the Landlord’s Managing Agents reasonably estimate will be expended within the following four years after the end of the particular Accounting Period (whether such expenditure is likely to be incurred during or after the end of the tenancy created by this Lease)

1.3“The Accounting Period” means the period of twelve calendar months ending on 31 December in each year or such other period of twelve months as the Landlord may from time to time decide to use for the purposes of

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calculating service charge.

1.4           “The Initial Date” means 1 August 1998.

2.The Tenant shall pay:

2.1For any period prior to the Initial Date for which the Tenant shall be liable such proportion of the Service Costs as the Landlord’s Managing Agents shall certify as being fairly and reasonably attributable to the Demised Premises any such payments to be made on demand and

2.2The Tenant shall pay from and after the Initial Date the Due Proportion of the Total Service Charges on the days and in the manner and otherwise in accordance with the provisions hereinafter contained.

3.The Landlord shall on or before the commencement of each Accounting Period (or as soon thereafter as circumstances shall require or permit) supply the Tenant with a written statement specifying:

3.1The Landlord’s estimate of the likely amount of the Total Service Charges in respect of such Accounting Period and

3.2The amount of the estimated Due Proportion of the Total Service Charges payable by the Tenant divided by the number of instalments equivalent to the number of the Instalment Days for the relevant Accounting Period (such instalments being wherever practicable in equal amounts).

4.1On each Instalment Day the Tenant shall pay the amount as detailed in sub-clause 3.2. above as specified in the aforesaid statement.

4.2PROVIDED THAT if the Landlord has not supplied the relevant statement under Clause 3 of this schedule then the Tenant will pending receipt of the same pay on each Instalment day the amount payable hereunder in the previous Accounting Period on each Payment Date. On such Statement being issued the Tenant will on the next Payment Date pay or be allowed (as the case may be) the difference between the total of any such payments which should have been made if the Statement had been issued before the commencement of the Accounting Period.

5.1The Landlord shall cause proper Books of Account to be kept in respect of the Service Costs for each Accounting Period.

5.2The Landlord shall cause an account of the Service Costs to be taken as soon as practicable after the completion of each Accounting Period prepared and audited by a Chartered Accountant who shall certify the actual Service Costs for the relevant Accounting Period and a copy of the

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audited account shall be served on the Tenant as soon as practicable with a statement from the Landlord or the Landlord’s Managing Agents as to the balance (if any) due to or from the Tenant having regard to the payments already made on account.

5.3.Any balance due from the Tenant to the Landlord in respect of the relevant Accounting Period shall be paid within fourteen days of the service of the copy account and statement and any balance due from the Landlord to the Tenant shall be allowed from the instalment of the Due Proportion of the Total Service Charges next due or shall be forthwith paid to the Tenant if the term has come to an end.

6.If during any Accounting Period it shall reasonably appear to the Landlord that by reason of unexpected expenses or liabilities its previous estimate of Service Costs is likely to be exceeded then the Landlords may in their absolute discretion serve on the Tenant a statement of such expenses and liabilities and the proportion thereof due as the Due Proportion of the Total Service Charges in consequence thereof and any such sums so required shall be paid by the Tenant within fourteen days of the demand therefor and such demand and payment shall be taken into account under 5.2 and 5.3 of this Schedule.

7.A duly certified copy of any statement or Certificate provided for by this Schedule shall be evidence for the purposes of this Lease of the matters covered by such statement or Certificate.

8.The Total Service Charges and any payments on account thereof under Clause 4 above shall be deemed to accrue from day to day.

SEVENTH SCHEDULE

(Rent Review)

1.In this Schedule the following expressions shall have the following meanings respectively:-

1.1.“Review Date” shall mean the last day of the fifth year and the last day of each subsequent fifth year of the term hereby granted;

1.2.“Current Market Rent” shall mean the gross full market rent without any deduction whatsoever at which the demised premises might reasonably be expected to be let at the nearest Review Date in the open market without fine or premium as between a willing Lessor and a willing Lessee and with vacant possession for a term (commencing on the review date) equal to the

43

greater of fifteen years or the residue then unexpired of the term hereby granted and on the same terms and conditions in all other respects as this present Lease (other than the amount of rent hereby reserved but including the provision for five yearly rent reviews) and upon the supposition (if not a fact) that the covenants on the part of the Lessee herein have been fully performed and observed and that in the event of the demised premises having being destroyed or damaged by any of the insured risks the same shall then have been fully rebuilt, repaired or reinstated (as the case may be) in a good and substantial manner there being disregarded:

1.2.1any effect on rent of the fact the Lessee has been in occupation of the demised premises and any goodwill attached to the demised premises by reason of the carrying on therein of the business of the Lessee;

1.2.2any effect on rent of any improvement (within the meaning of the Landlord and Tenant Acts, 1931 to 1980 or any Acts amending or extending or re-enacting the same) of the demised premises or any part thereof carried out by the Lessee with the licence of the Lessor at the Lessee’s own expense (otherwise than in pursuance of any obligation to the Lessor whether pursuant to the provisions of this Lease or otherwise) and carried out prior to or during the currency of this Lease;

1.2.3any diminution of the rental value of the demised premises caused by works carried out thereon by the Lessee its sub-tenants or predecessors in title during the term of this Lease;

2.The Rent for the time being payable by the Lessee hereunder shall be subject to increase in accordance with the following provisions of this Clause.

3.The Lessor its servants or agents shall be entitled by notice in writing given to the Lessee its servants or agents not earlier than twelve months before and not more than twelve months after a Review Date to call for review of the rent payable by the Lessee to the Lessor at the Review Date specified in the notice and if upon any such review it shall be ascertained or determined that the Current Market Rent of the demised premises at the Review Date is greater than the rent payable hereunder immediately prior to such Review Date then as from that Review Date the yearly rent payable hereunder shall be increased to the Current Market Rent so ascertained PROVIDED ALWAYS that if the Lessor shall not serve such notice as aforesaid for the review of rent prior to or within twelve months after any Review Date it shall nevertheless be entitled to do so at any time prior to the following Review Date upon the same terms and conditions as are hereinbefore provided for save that the expression “Current Market Rent”

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shall be deemed to be the Current Market Rent on the immediately preceding Review Date and in such event such reviewed rent shall be payable by the Lessee from the gale day preceding the date of the said notice up to the following Review Date or until it is further reviewed in accordance with the foregoing provisions PROVIDED FURTHER that in no circumstances shall the rent payable hereunder following such review be less than the rent payable by the Lessee immediately prior to the Review Date.

4.Every such review as aforesaid shall in the first instance be made by the Lessor and Lessee or their respective surveyors in collaboration but if no agreement as to the amount of the Current Market Rent at the Review Date shall have been reached between the parties hereto or their surveyors within three months or such extended period as may be agreed by the Lessor and the Lessee after the date of the Lessor’s notice calling for such review then the question of the amount of the Current Market Rent of the demised premises at the Review Date shall be referred to the decision of a single Chartered Surveyor who shall act as an independent Valuer (acting as an expert) such Chartered Surveyor to be nominated by the Lessor by notice in writing to the Lessee and if the Lessee shall reject such nomination or fail or neglect to agree within one month of the Lessor’s notice such Chartered Surveyor shall be appointed on the application of the Lessor by the Chairman or acting Chairman for the time being of The Society of Chartered Surveyors in the Republic of Ireland which term shall include any other body established from time to time in succession or substitution or carrying on the function currently carried out by the same and in default of any such appointment for any reason within one month of such application by a Chartered Surveyor to be nominated by the Lessor.

5.If the Chartered Surveyor shall fail to determine the new rent within three months of his appointment or if he shall relinquish his appointment or die or if it shall become apparent that for any reason he will be unable to complete his duties hereunder a new Chartered Surveyor shall be appointed in his place in accordance with sub-clause 1.5 above.

6.If upon any such review the amount of any increased rent shall not be ascertained or determined prior to the Review Date the Lessee shall continue to pay rent at the yearly rate payable immediately prior to the Review Date until the gale day next following the ascertainment or determination of any increased rent whereupon subject to the first proviso to Clause 1.4 hereof there shall be due as a debt payable by the Lessee to the Lessor on demand a sum equal to the amount by which the rent for the period since the Review Date calculated at the increased rate exceeds the rent for that period calculated at the previous rate and in addition the Lessee shall pay interest on the said sum from the Review Date until the date of actual payment at the 3 month Dublin inter-bank offer rate at the Review

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Date or if there shall be no 3 month Dublin inter-bank offer rate the corresponding or nearest appropriate rate thereto or if there shall be no such rate twelve per centum.

7.If upon such review as aforesaid it shall be agreed or determined that the rent previously payable hereunder shall be increased the Lessor and the Lessee shall (if required by the Lessor) forthwith complete and sign a written memorandum or if the Lessor shall so elect execute a deed of record recording the increased rent thenceforth payable and the Lessee shall pay the Stamp Duty (if any) payable on such memorandum or deed of record.

8.In the event of the Lessor being prevented or prohibited in whole or in part from exercising its rights under this Clause and/or obtaining an increase in the rent on any of the Review Dates by reason of any legislation Government Order or decree or Notice (increase in this context meaning such increase as would be obtainable disregarding the provisions of any such legislation and otherwise as aforesaid) then the date at which the review would otherwise have taken effect shall be deemed to be extended to permit and require such review to take place on the first date thereafter upon which such right or increase may be exercised and/or obtained in whole or in part and when in part on so many occasions as shall be necessary to obtain the whole increase (meaning the whole of the increase which the Lessor would have obtained if not prevented or prohibited as aforesaid) and if there shall be a partial prevention only there shall be a further review on the first date or dates as aforesaid notwithstanding the rent may have been increased in part on or since the date of review but in no instance shall the increase in rent be dated back to exceed the statutory controls on increases of rent laid down by law.

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PRESENT when the Common Seal of
INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)
was affixed hereto:

/s/ [ILLEGIBLE]

/s/ [ILLEGIBLE]

PRESENT when the Common Seal of
INVESTMENT TECHNOLOGY GROUP
was affixed hereto:

Witness:	Nicola Rooney		/s/ [ILLEGIBLE]
			Director
Address:	30 Herbert Street		/s/ [ILLEGIBLE]
	Dublin 2		Director
Occupation:		Solicitor

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PRIOR RENUNCIATION OF RIGHTS

RE OFFICE AT UNIT NO. GO1 PART OF STACK L,
CUSTOM HOUSE DOCK, DUBLIN 1

IN consideration of the within named Landlord agreeing to grant this within Lease of the Demised Premises as therein defined and prior to commencement of the Tenancy the within named Tenant hereby renounces any entitlement to a new tenancy in the Demised Premises under the Landlord and Tenant (Amendment) Act 1980 (as amended).

The within named Tenant confirms that it has received independent legal advice from its Solicitors prior to signing this renunciation pursuant to the provisions of Section 17(1)(a)(iii) of the Landlord and Tenant (Amendment) Act 1980 as inserted by Section 4 Landlord and Tenant (Amendment) Act 1994.

Dated                14 August           1998

PRESENT WHEN THE COMMON SEAL
ofINVESTMENT TECHNOLOGY GROUP
Limited was affixed hereto:

Witness:		Nicola Rooney		/s/ [ILLEGIBLE]
				Director
Name:	NICOLA ROONEY
Occupation:			Solicitor
Address:		30 Herbert Street		/s/ [ILLEGIBLE]
		Dublin 2		Director

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EX-10.33.1

Exhibit 10.33.1

Dated this 10 day of January 2007

JOSEPH COSGRAVE, PETER COSGRAVE AND MICHAEL COSGRAVE

Licensor

AND

INVESTMENT TECHNOLOGY GROUP LIMITED

Licensee

LICENCE AGREEMENT

Premises at Dublin Exchange Facility, IFSC, Dublin 1

Licence Agreement

1.DATE:  10 January 2007

2.PARTIES

2.1.JOSEPH COSGRAVE, PETER COSGRAVE AND MICHAEL COSGRAVE all of 15 Hogan Place, Lower Grand Canal Street, Dublin 2 (hereinafter called “the Licensor” which expression shall include their executors, administrators, successors and assigns) of the one part.

2.2.INVESTMENT TECHNOLOGY GROUP LIMITED having its registered office at 2nd Floor, Dublin Exchange Facility, IFSC, Dublin 1 (hereinafter called “the Licensee” which expression shall where the context so admits or requires include its nominees, employees, servants or agents) of the other part.

3.DEFINITIONS

“the Fee”	shall mean the sum of €1,000 per month plus any value added tax arising thereon.
“Insured Risks”	shall mean public and property owners liability and such other risks as the Licensor shall consider prudent or desirable.
“Permitted Use”	shall mean the use of the Premises as a conference room only.
“Premises”	shall mean ALL THAT the premises within Dublin Exchange Facility, IFSC, Dublin 1 formerly known as MTH Communications Room and lately in use by the Licensee as a conference room.
“the Term”	shall mean the period from 1st September 2006 to 28th February 2007 subject to termination in accordance with Clause 9.

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4.RECITALS

4.1.The Licensor is the owner of the building of which the Premises forms part and which was developed for commercial purposes.

4.2.The Licensor has agreed to grant a licence to the Licensee in relation to the Premises for the temporary convenience of both parties on the terms and conditions hereinafter contained.

5.THE LICENCE

In consideration of the Fee the Licensor hereby grants to the Licensee the exclusive right to use the Premises for the Permitted Use for the Term.

6.COVENANTS BY THE LICENSEE

The Licensee hereby covenants with the Licensor as follows :

6.1.To pay the Fee, together with any Value Added Tax that may arise thereon, monthly in advance by way of cheque made payable to the Licensor or by direct debit to the Licensor’s bank account, whichever is required from time to time by the Licensor.

6.2.To pay on demand all commercial rates, assessments, duties or impositions that may arise as a consequence of the Licensee’s use of the Premises.

6.3.To pay on demand all premiums payable by the Licensor for the purposes of effecting or maintaining policies of insurance in respect of the Insured Risks.

6.4.Not to use the Premises for any purpose other than the Permitted Use.

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6.5.Not to allow any third party (save an employee or agent of the Licensee) to operate the Premises for the Permitted Use save with the prior written consent of the Licensor.

6.6.To indemnify the Licensor against the breach, non-performance or non-observance by the Licensee of any of the covenants and conditions contained herein and against all actions, costs, claims, expenses and demands whatsoever or howsoever arising in respect of or in consequence (whether direct or indirect) of any such breach, non-performance or non-observance as aforesaid and in particular but without prejudice to the generality of the foregoing arising directly or indirectly out of:

6.6.1.the user of the Premises;

6.6.2.any work carried out or in the course of being carried out by the Licensee on the Premises.

6.7To maintain full and proper employers and public liability insurance to an appropriate level with the interest of the Licensor noted thereon and to indemnify and keep indemnified the Licensor from and against all claims, charges, losses, demands, proceedings, costs or expenses whatsoever or howsoever arising due to any damage, injury, loss or expense incurred by any person using the Premises or otherwise in connection with this Licence.

6.8Not to carry out any alterations of any kind to the Premises without the Licensor’s prior written consent.

6.9To notify the Licensor of any notices or correspondence received by the Licensee in respect of the Premises or the use of the Premises.

6.10Upon termination of this licence to deliver up the Premises to the Licensor in the same condition as it now is.

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6.11To permit the Licensor or any persons authorised by the Licensor at all reasonable times to enter the Premises or any part thereof to examine the state and condition thereof and to ascertain whether the Licensee’s covenants are being duly observed and performed.

6.12To keep the Premises in a clean, tidy and secure condition at all times and in particular to ensure that there is no noise or disturbance arising from the user of the Premises.

6.13Not to assign or transfer the Licencee’s interest in this agreement to any third party.

7         STAMP DUTY

Any stamp duty which may be payable in respect of this Agreement shall be paid by the Licensee.

8         NO WARRANTY

It is hereby acknowledged by the Licensee that the Licensor does not give any warranty or confirmation that the Permitted User is a user which is permitted to be carried on in the Premises or any part thereof by any of the Planning Acts or under any other statutory or local authority requirements.

9         TERMINATION

This Licence may be terminated by the Licensor:

9.1After the first month of the Term by the Licensor giving to the Licensee one month’s notice in writing to that effect.

9.2Immediately upon service by the Local Authority of any notice requesting or directing that the Permitted Use must cease.

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9.3On 7 days notice in the event of there being any material breach or non-observance by the Licensee of any of the terms or conditions herein contained.

10  AGREEMENT

It is hereby expressly agreed between the parties that this Licence Agreement constitutes a bare licence only, is for the temporary convenience of both parties and confers no tenancy upon the Licensee.

SIGNED on behalf of the said
JOSEPH COSGRAVE, PETER COSGRAVE			/s/ Peter Cosgrave
AND MICHAEL COSGRAVE			/s/ Joseph Cosgrave
In the presence of:-			/s/ Michael Cosgrave
	MEL FERGUSON
	SOLICITOR
	SHEEHAN & CO
	1 CLARE STREET
	DUBLIN 2
/s/ [ILLEGIBLE]
SIGNED on behalf of the said
INVESTMENT TECHNOLOGY GROUP LIMITED
In the presence of:-
		/s/ [ILLEGBILE]

DATED THEDAY OF           2006

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[DTZ]

Sherry FitzGerald

15 JAN 2007

Limited

LICENCE AGREEMENT

Sheehan & Company

Solicitors

1 Clare Street

Dublin 2

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EX-10.34

Exhibit 10.34

Pershing Limited

and

Investment Technology Group Limited

Agreement
relating to the provision of
Back Office Services

3 July, 1998

CONTENTS

Clause
		Parties
		Recitals
1.		Definitions
2.		Information
3.		Services by PL
4.		Fees
5.		Clearing Agency Bank Account
6.		Maintenance of Records by PL
7.		Liaison
8.		Customers
9.		Duration and Termination
10.		Liability and indemnity
11.		Covenant
12.		Employees
13.		Confidentiality
14.		Construction of Agreement
15.		Force Majeure
16.		Notices
17.		Assignment
18.		Modification
19.		Governing Law
20.		Arbitration
21.		Miscellaneous
Schedule Part I - Included Services
	Part II - Schedule of Settlement and Handling Fees

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THIS AGREEMENT is made
BETWEEN:-
(1)		PERSHING LIMITED (“PL”) of 3 Harbour Exchange,
		London E14 9GD and
		INVESTMENT TECHNOLOGY GROUP LIMITED (the “Correspondent”) of 20 Clanwilliam Terrace, Dublin 2, Ireland
WHEREAS
(A)		PL is a member of the Stock Exchange and the SFA able to do business as a provider of “back office” clearing agency facilities for members of the Stock Exchange and The SFA.
(B)		The Correspondent is a member of the Stock Exchange and is regulated by the Central Bank of Ireland and for the purposes of conduct of business in the UK accepts the authority of the SFA under the Investment Services Directive issued by the European Commission.
1.	Definitions
	1.1	In this Agreement (except where the context otherwise requires) the following words and expressions shall have the following meanings respectively:-
		“Business Day”	a day when the Stock Exchange is open for dealings
		“the Commencement Date”
		“Customer”	any person by whom the Correspondent is instructed in connection with dealings in securities and other connected matters relevant to this Agreement
		“the Included Services”	shall have the meaning ascribed to that expression by Clause 3.1
		“Relevant Quarter”	A period of three calendar months ending on 31st March, 30th June, 30th September and 31st December in each year during the continuance of this Agreement
		“the Rules”	the Rules and Regulations for the time being of the Stock Exchange, the Rules of The SFA, the Rules and Regulations of the Securities and Investments Board, and/or such other rules, regulations or laws of any regulatory body including the Rules of The Central Bank of Ireland or jurisdiction as may have application to the provision of the Included Services and the terms of this Agreement.
		“the Stock Exchange”	The London Stock Exchange
		“SFA”	The Securities & Futures Authority Limited, or any body which succeeds or replaces the same

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		“Retail Price Index”	The commonly recognised index number of a series of Prices paid by consumers for the cost to households of the goods they normally buy.
		“Review Date”	means the first anniversary of the Commencement Date and each subsequent anniversary thereof
		“Prior Transaction”	means any transaction the subject of this Agreement and effected by or on behalf of the Correspondent prior to the termination of this Agreement
	1.2	The headings in this Agreement are inserted for convenience only and shall be ignored in construing the provisions hereof. References herein to Clauses are to Clauses of this Agreement and, unless the context otherwise requires, in this Agreement the singular shall include the plural and vice versa and words importing the masculine gender shall be deemed to include the neuter and feminine gender and vice versa and the word “person” shall include any body corporate or otherwise.
2.	Information
	2.1	Prior to the Commencement Date the Correspondent will provide PL with all such information, co-operation, assistance, basic data and documents as PL shall reasonably request in order to enable PL to be ready to commence the provision of the Included Services on the Commencement Date and such request must be made in a timely manner.
	2.2	During the continuance of this Agreement and in consultation with PL, the Correspondent will provide PL with all such information, co-operation, assistance, basic data and documents, including (without limitation) all appropriate details of Customers’ funds and securities received directly by the Correspondent as (in each case) PL shall reasonably request in order to permit PL to discharge the Included Services efficiently, and shall use all reasonable endeavours to ensure that all terminals or other computer hardware situated at the Correspondent’s premises and connected to the PL computer system shall be maintained in a proper working order.

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	2.3	Such information, data and documents must be compatible with the reasonable requirements of PL’s computerised book-keeping system, and PL shall be entitled to rely on such information and shall not be responsible for the consequences of any failure by the Correspondent to supply such information accurately, and in the required format, unless any such failure is caused by PL’s fraudulent, negligent or wilful acts or omissions. PL may from time to time notify the Correspondent of changes to the requirements of its computerised book-keeping system in order to enable PL to perform more effectively the provision of the Included Services. Any such changes shall take effect after the receipt by the Correspondent of the relevant notification (or such other time as PL and the Correspondent shall agree in writing) from PL, which notification shall be given sufficiently in advance to allow the Correspondent to make such modifications to said information, data, and documents as are necessary to ensure continued compatibility with the requirements of PL’s computerised book-keeping system.
3.	Services by PL
	3.1	With effect from the Commencement Date and subject to the terms and conditions of this Agreement, PL will provide, acting solely as agent for the Correspondent, computer and back-office facilities to settle agency and principal accounts with respect to UK equity securities transactions executed by the Correspondent (as well as any other investment transaction agreed to by the parties hereto); and PL shall also provide associated administrative functions related thereto as agreed by the parties, including those services itemised in the Schedule.
	3.2	Without prejudice to Clause 4.1.2 and for the avoidance of doubt, unless otherwise expressly agreed in writing, PL shall not be responsible for providing any of the following services or the costs and expenses related thereto (and the Correspondent undertakes to reimburse PL on demand if PL shall properly incur any such costs or expenses in the performance of any of said services at the Correspondent’s request):-
		3.2.1	payment of CREST and CREST network charges;
		3.2.2	payment of charges (if any) by the Stock Exchange for general services (known as Exchange Charges);
		3.2.3	preparation of the Correspondent’s financial statements or any analysis thereof;
		3.2.4	preparation and/or issue of cheques or other remittances in payment of the Correspondent’s expenses, other than expenses incurred by PL on behalf of the Correspondent in connection with the provision of the Included Services;
		3.2.5	payment of commissions to the Correspondent’s salesmen or agents;
		3.2.6	verification of address changes to Customers;
		3.2.7	the cost of insurances effected by the Correspondent;

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		3.2.8			preparation of the Correspondent’s payroll records and administration of personnel;
		3.2.9			cost of stamp duty;
		3.2.10			other duties, obligations and responsibilities of the Correspondent or the Customer.
	3.3	So long as this Agreement has not been terminated and PL is capable of providing the Included Services which for the avoidance of doubt relate only to UK equity securities transactions effected by the Correspondent, the Correspondent shall not accept services similar to any of the Included Services from any other person with respect to securities transactions itemised in the Schedule, except as may be agreed between the parties.
	3.4	PL’s services hereunder shall not be exclusive to the Correspondent and it shall be free to provide services similar to the Included Services or such other services as it shall from time to time think fit to any other person and (without prejudice to Clause 13) nothing herein shall be deemed to restrict in any way the right of PL to compete with the Correspondent in any or all aspects of the Correspondent’s business. PL will not use under any circumstances the customer lists of the Correspondent other than as shall be necessary to carry out its business under this Agreement.
	3.5	PL shall be entitled from time to time at its discretion to sub-contract to any responsible provider of data processing services or other relevant services the provision to the Correspondent of all or any part of the Included Services. In such case PL shall continue to be responsible to the Correspondent for such sub-contracted services. PL shall correct any failure of such service provided in the same manner and the same time as if the service had been performed (or should have been performed) by PL hereunder. [PL will make best efforts to inform the Correspondent concerning the sub-contracting of any services at the time such sub-contracting occurs].
4.	Fees
	4.1	Subject to Clause 4.4, PL shall be entitled to invoice the Correspondent and the Correspondent shall pay to PL twice a month on PL’s accounting dates:-
		4.1.1		the amount due for fees in respect of the Included Services carried out during such period and fees otherwise incurred during such period, such fees being calculated in accordance with Clause 4.3;
		4.1.2		the amount of any of the following items reasonably and properly incurred by PL during such period on behalf of or for the benefit of, or which are otherwise reasonably attributable to, the Correspondent in the provision by PL of the Included Services:-
			4.1.2.1			charges for bank and overseas handling services incurred by PL in connection with the provision of services hereunder;

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		4.1.2.2	out of pocket costs necessarily incurred by PL and relevant charges attributable to the provision by PL at the request of the Correspondent of computer facilities additional to the provision of the Included Services (such charges to be agreed in between PL and the Correspondent prior to such additional computer facilities being provided);
		4.1.2.3	any charges imposed by the Stock Exchange not invoiced directly to the Correspondent and not arising as a result of PL’s membership of the Stock Exchange
		4.1.2.4	reasonable costs of printing contract notes and statements using the Correspondent’s logostyle or format and any other personalised stationery or any other reasonably associated printing costs
		4.1.2.5	any expenses necessarily borne by PL in discharging reasonable liabilities or obligations attributed to the Correspondent pursuant to Clause 3.2
		4.1.2.6	costs of international telephone calls, telex and facsimile transmissions on behalf of the Correspondent not falling within the Included Services.
		4.1.2 7	Cost of microfiche and other third party fees.
		4.1.2.8	the installation, purchase or rental, and the maintenance of any communication devices and/or printer at the premises of the Correspondent or its agents in respect of the Included Services connected to PL’s computer system and any other relevant hardware at said premises in respect of the Included Services,.
		4.1.2.9	the cost of Pricing Service Provider fees attributable to the Correspondent
4.2	The fees and charges payable under the terms of Clauses 4.1.1 and 4.1.2 hereof shall be payable in accordance with our invoice accounting dates.
4.3	The fees payable pursuant to Clause 4.1 shall be fixed according to the scale set out in Part II of the Schedule provided that the fees shall be subject to review and amendment by the parties on each Review Date and remain effective until the next Review Date. For this purpose PL shall give notice of proposed modification to the fee structure.
4.4	All amounts referred to in this Clause 4 shall be deemed to be exclusive of Value Added Tax (if any) chargeable thereon.
4.5	The Correspondent may request PL to carry out additional services not mentioned in the Included Services. Any cost charged by PL to the Correspondent for PL carrying out those services will be mutually agreed between PL and the Correspondent prior to PL providing the additional services.

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	4.6	In the event that the fees paid or payable by the Correspondent pursuant to Clause 4.2 in respect of each calendar month is less than £6000.00 then the Correspondent shall pay to PL an additional fee equal to the difference between the amount of fees paid or payable as aforesaid and the sum of £6000.00. This fee may be increased at each Review Date. For this purpose PL shall give written notice to the Correspondent, of any increase, prior to the Review Date. For the first six months of the contract this monthly minimum fee will be replaced by a minimum composite charge of £36,000.00 which will be invoiced in arrears.
	4.7	The fees payable under Clause 4.6 in respect of each calendar month shall be paid as per Clause 4.2.
5.	Clearing Agency Bank Account
	As soon as practicable after the date thereof, the Correspondent shall open or will have opened bank accounts at such bank or banks as shall be approved by PL, designated in the Correspondent’s name, and shall appoint such personnel of PL as PL shall nominate as authorised signatories to such bank accounts. PL shall in all financial transactions relating to the provision of the included Services use such bank accounts. Subject as hereinafter provided, the Correspondent shall be responsible for ensuring that such bank accounts are sufficiently funded and that these accounts are correctly given trust status if so required under the Rules. PL shall not be liable for any loss or damage suffered by the Correspondent by virtue of any such bank accounts being overdrawn by reason of the provision of the Included Services, except as such overdrafts are caused by any dishonest, fraudulent or criminal acts on the part of PL, its employees, or its agents. PL shall indemnify the Correspondent for any losses, liabilities, damages, costs, and expenses resulting from the dishonest, fraudulent or criminal acts of PL, its employees, or its agents relating to the use of such bank accounts. PL shall keep the Correspondent informed of the balances and overdrafts (if any) of cash bank accounts and shall promptly notify the Correspondent if it becomes aware that any such bank account is, or is likely to become, overdrawn, irrespective of any overdraft facilities available in respect thereof.
6.	Maintenance of Records by PL and Compliance
	6.1		PL will provide to the Correspondent all such information as the Correspondent may reasonably require to enable it to maintain records in accordance with the Rules which information will include a full record of all transactions executed or cleared through it under the terms hereof and shall provide the Correspondent with access to such information at all reasonable times and, where required, reasonable extracts from its records. Any added cost incurred by PL associated with these extracts will be paid by the Correspondent subject to prior agreement between PL and the Correspondent.
	6.2		Unless required by the Stock Exchange or The SFA to do so, or unless the Correspondent undertakes to pay reasonable charges for PL’s doing so, PL shall not be bound to make any investigation into the facts surrounding any dealings which the Correspondent may have with its Customers or other persons, nor shall PL be under any responsibility for compliance by the Correspondent with any laws or regulations which may be applicable to the Correspondent other than the Rules insofar as they relate to the provision of the Included Services and the records to be created by PL hereunder. In the event said investigation is necessitated by the proven negligent or wilful acts or omissions or fraudulent acts on the part of PL, its employees, or its agents, the Correspondent shall not be responsible for paying for the costs of the investigation.

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7.Liaison

7.1Throughout the period of this Agreement, the Correspondent will make available such suitable personnel during normal business hours (including upon the reasonable request of PL, a senior officer of the Correspondent) as shall be reasonably necessary to perform the obligations of the Correspondent under Clause 2 and to monitor and make available information relevant to all documentation prepared by PL for purposes of processing relevant transactions hereunder and dealing with any queries arising therefrom, and shall also make available such other facilities of liaison, co-ordination and co-operation as shall reasonably be necessary to facilitate the efficient carrying out of PL’s obligations hereunder.

7.2PL shall procure that one or more of its senior officers is available upon reasonable request of the Correspondent for purposes of discussing with the Correspondent any aspect of the day-to-day operation of this Agreement or resolving any queries arising thereunder, and in particular shall provide such suitable personnel (i) during normal business hours and (ii) outside normal business hours in case of urgency, as shall be reasonably necessary to provide the liaison necessary for the Correspondent to perform its obligations under Clause 7.1

7.3The Correspondent and PL each agree to notify the other of any written complaint received from a customer which relates to any function that the other has undertaken to perform and the parties mutually undertake to investigate such complaint and, if reasonably possible, to amend their respective procedures to avoid the future occurrence of similar complaints.

8.Customers

Every customer shall remain the Customer of the Correspondent, and the Correspondent shall be responsible for obtaining and conveying to PL all of the essential facts relevant to every Customer for the purposes of this Agreement, every transaction effected on behalf of a Customer or otherwise relevant for the purposes of this Agreement, and every person holding power-of-attorney on behalf of a Customer and entitled to conduct business relevant to this Agreement in the name of the Customer. Without prejudice to the obligations of PL in the performance of the Included Services, the Correspondent shall also be responsible for the conduct of its business with the Customer and the supervision thereof, including but not limited to, assessing the suitability of a transaction for a Customer when required under the Rules, the authenticity of all orders, signatures and endorsements, the frequency of trading by a Customer and the genuineness of all signatures, certificates and papers, and reviewing the accounts of Customers for, among other things, manipulative practice and insider trading, and compliance with the Rules and such other laws, rules and regulations to which the Correspondent and the Customer are subject and furthermore, the Correspondent undertakes to diligently supervise compliance through the use of a compliance manual or other recognised procedures.

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9.Duration and Termination

9.1This Agreement shall continue for one year until terminated (by written notice) as hereinafter provided

9.2This Agreement may be terminated by PL without cause upon not less than One Hundred and Twenty (120) days written notice to the Correspondent.

9.3This agreement may be terminated by the Correspondent without cause by not less than One Hundred and Twenty (120) days written notice to PL.

9.4Either party may terminate this Agreement forthwith by notice in writing to the other:-

9.4.1 in the event that the other shall cease to be a member of the Stock Exchange or regulated by the appropriate regulator for the purpose of this agreement, The SFA, or it PL is suspended or terminated as a CREST(or its successor) user;

9.4.2 in the event that such other party shall have committed a material breach of this Agreement which in the case of a breach capable of remedy shall not have been remedied within ten business days of the breaching party being given notice by the innocent party identifying the breach and requiring its remedy;

9.4.3 in the event that such other party enters into liquidation (other than for the purposes of effecting a financial restructuring or amalgamation) whether compulsorily or voluntarily, or compounds with or convenes a meeting of its creditors or becomes subject to a voluntary arrangement under Part 1 of the Insolvency Act 1986, or has an administrator, a receiver or administrative receiver appointed over all or any part of its assets, or takes or suffers any similar action in consequence of debt, or in the event that a petition is presented for an administrative order in respect of such other party, or such other party ceases for any reason to carry on business.

9.5Termination of this Agreement however caused shall be without prejudice to any accrued rights, liabilities, or responsibilities of the parties hereto with respect to any Prior Transactions, whether or not claims relating to such Prior Transactions shall have been made before or after such termination

9.6The Correspondent will pay to PL all reasonable costs incurred by PL on transferring all account, securities and client history to another provider of these services as designated by the Correspondent.

9.7In the event of the termination of this Agreement for any reason, PL will settle, in accordance with the Rules and otherwise in accordance with the terms of this Agreement, any Prior Transactions, and will otherwise continue to perform its obligations under this Agreement in respect of all and any Prior Transactions as if this Agreement continued in full force and effect in relation to such Prior Transactions. The Correspondent will continue to perform the obligations imposed upon it under the terms of this Agreement in respect of all and any Prior Transactions.

9.8Subject to Clause 9.7, from notice of termination of this Agreement PL shall at the request of the Correspondent deliver up to the Correspondent in a format

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reasonably acceptable to the Correspondent all accounts, records, documents, data, customer lists and other information maintained by PL on behalf of the Correspondent pursuant to this Agreement but excluding for avoidance of doubt all computer programs used by PL to process data; and PL shall forthwith provide all necessary or pertinent details to the Correspondent concerning any pending or partly completed transactions, including Prior Transactions.

9.9 Subject to Clause 9.7 and the proviso to this Clause, upon termination of this Agreement, PL shall immediately cease to operate the bank account(s) referred to in Clause 5 and shall forthwith account to the Correspondent for any funds held by it on behalf of the Correspondent or its Customers, whether or not such funds are at that time located in the bank account and notwithstanding any disputed balances; provided that PL shall be entitled to operate the bank account to the extent necessary to satisfy all of the Correspondent’s outstanding settlement obligations.

10.Liability and Indemnity

10.1Subject to Clause 10.2, the Correspondent hereby agrees to indemnify, defend and hold harmless PL from and against all claims, demands, proceedings, suits and actions made or brought against PL and all liabilities, losses, damages, expenses, legal fees and costs suffered by PL and arising out of one or more of the following, except to the extent that such claims, demands, proceedings, suits, actions, liabilities, losses, damages, expenses, legal fees, and costs are due to the dishonest, fraudulent, negligent or criminal acts of PL or its officers, partners, employees and agents:-

10.1.1all claims or disputes between the Correspondent and its Customers with respect to any matters referred to herein, it being understood that the Correspondent warrants the validity of Customers’ orders in the form that such orders are transmitted to PL by the Correspondent;

10.1.2failure of the Correspondent or any Customer to make payment when due for securities purchased or to deliver when due for securities sold for the account of the Correspondent or a Customer;

10.1.3the breach by the Correspondent of any warranty given by it under this Agreement or the failure by it to properly perform its duties, obligations, and responsibilities hereunder;

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10.1.4the failure of any Customer to fulfil his obligations to the Correspondent
(whether or not such failure is in the Correspondent’s control); or

10.1.5any dishonest, fraudulent, negligent or criminal act or omission on the part of the Correspondent’s officers, partners, employees, agents or Customers.

10.2Save as hereinafter provided, PL hereby agrees to indemnify, defend, and hold harmless the Correspondent from and against all claims, demands, proceedings, suits and actions made or brought against the Correspondent and any liability, loss, damage, claims, costs, interest, or expenses of whatsoever nature suffered or incurred by the Correspondent arising out of:-

10.2.1any dishonest, fraudulent, or criminal act on the part of PL, its officers, partners, employees, agents, other Correspondents or any subcontractors; or

10.2.2any breach by PL of any warranty, covenant or undertaking given by it under this Agreement:-

(a)PL’s liability to the Correspondent hereunder shall only be to the extent expressly set forth herein and (for the avoidance of doubt) under no circumstances shall PL be responsible for indirect or consequential loss or damage by the Correspondent or any Customer.

11.Representations & Warranties

PL hereby represents, warrants, and covenants that it is, and will remain, duly and validly incorporated, validly existing, and in good standing as a limited corporation under the laws of the United Kingdom, with full and proper power and authority to enter into and perform this Agreement. PL further covenants that the officer signing this Agreement on its behalf is properly authorised to execute this Agreement, and that this Agreement constitutes a valid and binding contract between PL and Correspondent enforceable in accordance with its terms.

11.1PL hereby covenants and undertakes that it will provide the Included Services pursuant to this Agreement in compliance with the Rules and all other applicable laws and regulations.

11.2PL hereby warrants that it is properly registered under the Data Protection Act 1984 and shall maintain such registration throughout the terms of this Agreement, and that it is thereby authorised to provide all services contemplated by this Agreement and will operate in accordance with the requirements of the Data Protection Act 1984 and within the terms of the registered entries.

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12.Employees

Without the prior written consent of the other party, neither party will during the period of this Agreement employ or attempt to employ any person who is then employed by the other party. Nor shall either party after the termination of this Agreement employ or attempt to employ, for a period of one year following termination of this Agreement, any person who was employed by the other party at any time during the twelve-month period immediately preceding the termination of this Agreement.

13.Confidentiality

13.1PL and the Correspondent hereby agree that they will not and they will procure, that their employees and agents will not disclose to any person or otherwise use for advantage any of the financial or trading or other confidential information (including customer lists) received or otherwise made known to it regarding the Correspondent, Customers or PL (as the case may be) or either of their operations as a result, directly or indirectly, of this Agreement. Nothing herein contained, however, shall prevent the Correspondent from disclosing to any Customer any financial or trading or other confidential information relating to such Customer’s account or any transaction effected on behalf of such Customer.

13.2The parties mutually agree not to disclose the terms of this Agreement to any outside parties other than governmental regulatory bodies with appropriate jurisdiction, except that disclosure may be made as required to authorised employees or, professional advisers of such party on a need-to-know basis only. Any other publication or disclosure of the terms of this agreement may be made only with the prior written consent of the other party.

13.3Except for advertising published in any newspaper, magazine, or similar media, or broadcast over television or radio, PL agrees that neither it nor any Associate nor any affiliate will knowingly solicit business from any Customers who have not heretofore been customers of PL.

14.Construction of Agreement

Neither this Agreement nor the performance of the services hereunder shall be considered to create a joint venture or partnership between PL and the Correspondent or between the Correspondent and other persons for whom PL may perform the same or similar service. Neither PL nor the Correspondent will utilise the name of the other in any way without the other’s consent, and under no circumstances shall either party employ the other’s name in such a manner as to create the impression that the relationship created or intended between them is anything other than that of Correspondent and clearing agent.

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15.Force Majeure

15.1Save as expressly provided herein, neither party shall be liable to the other for any default where said default is due to (i) the outbreak of war or hostilities or any other international calamity or political crisis, or (ii) earthquake, hurricane, typhoon, flood or other natural disaster, or (iii) the suspension of trading on a securities or investment exchange, or the fixing of minimum or maximum prices for trading on a securities or investment exchange, regulatory ban on the core activities of either party (unless either party has caused that ban) or (iv) a banking moratorium having been declared by appropriate regulatory authorities, and the effect of such event(s) as mentioned above are such that the defaulting party is not in a position to take any reasonable action to cure the default; provided, however, that the party seeking to rely on this provision shall promptly give written notice to the other party containing full particulars of the event(s) which the defaulting party claims has put the due performance of its obligations under this Agreement beyond its control. The provisions of this Clause 15.1 shall no longer be applicable when the event(s) causing the aforementioned default has ceased to have effect upon the performance of this Agreement.

15.2If any act or matter relied upon by either party for the purpose of Clause 15.1 shall continue for more than ten business days, the other party shall be entitled to terminate this Agreement by not less than thirty days’ notice in writing expiring at the close of business on the last day of a Dealing Period (provided that no such notice may be given after the relevant act or matter relied upon has ceased to have effect on the performance of this Agreement) and upon termination hereunder the provisions of Clauses 9.7 to 9.9 (inclusive) shall apply.

16.Notices

16.1Any notice or invoice required to be given under this Agreement shall be in writing and may be served personally, by registered mail, or by sending the same through the post by first class prepaid post.

16.2Any such notice or invoice shall be addressed to the registered office of such party or its principal place of business, or such other address as the party shall have given for service of notices or invoices upon it.

16.3Any such notice or invoice sent by registered mail, messenger or first class prepaid post shall be deemed served on the second business day following its posting.

17.Successors Assignments

This Agreement shall be binding upon and inure to the benefit of the respective successors of the parties. Except as otherwise provided herein, neither party may assign any of its rights and obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld.

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18.Modification

Any modification, amendment, or alteration of this Agreement shall take effect upon (and only upon) being agreed to in writing by both parties.

19.Governing Law

This Agreement shall be governed by and construed in accordance with English Law and for the purposes hereof each of the parties hereto hereby submits to the exclusive jurisdiction of the English Courts.

20.Arbitration

Any dispute between the parties hereto which cannot be settled to the mutual satisfaction of the parties will be referred to arbitration in accordance with the Rules of the Stock Exchange.

21.Miscellaneous

21.1The parties shall supply each other with copies of their respective audited financial statements on an annual basis within one month of the same being approved and signed.

21.2If the Correspondent or any of its directors or employees are the subject of or become the subject of any disciplinary proceeding or action of The SFA or the Stock Exchange, the Correspondent must inform PL of such action or proceeding and must keep PL informed of any disciplinary measures taken against the Correspondent or its directors or employees.

Likewise, if PL, any of its directors, or any of its officers or employees or agents performing services for the Correspondent pursuant to this Agreement are the subject of or become the subject of any disciplinary action of The SFA or the Stock Exchange, PL must inform the Correspondent of such action or proceeding and must keep the Correspondent informed of any disciplinary measures taken against PL or its directors, officers, employees or agents.

21.3The Correspondent must inform PL if it’s capital falls below the capital requirement as required by the Rules and continue to inform PL of any proceeding with the SFA or The Central Bank of Ireland.

21.4Each provision and agreement herein or in the Schedules attached hereto shall be treated as separate and independent from any other provision or agreement herein or in the Schedules attached hereto and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

21.5The parties acknowledge that they are subject to the Rules, and if any conflict should arise between the Rules and the provisions of this Agreement then the Rules shall prevail.

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IN WITNESS whereof this Agreement has been entered into the day and year first before written.

For and on behalf of Investment Technology Group Limited

Alasdair Haynes	6th July’ 98
Authorised Signature	Date
For and on behalf of Pershing Limited
Trevor Jones	7th July 1998
Authorised Signature	Date

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THE SCHEDULE

PART 1

(included Services)

(i)	the processing of bargains transmitted to PL by the Correspondent;
(ii)	the clearance and settlement of sales or purchases of securities by causing securities delivered to or held by or (where permitted by the Rules) on behalf of PL pursuant to a sale to be delivered to or at the direction of the purchaser thereof against payment of the purchase price and receiving securities purchased from the vendor thereof and, if and to the extent that funds are on hand for a Customer, paying the purchase price of those securities;
(iii)	the holding of cheques, drafts, negotiable instruments and sums collected or received for a Customer for payment subject to the terms of this Agreement;
(iv)	in the case of transactions affected on behalf of a Customer the collection for the Correspondent of fees, commissions and charges as set by the Correspondent and which are payable by the Customer;
(v)	the issue of confirmations and contract notes in the Correspondent’s name in respect of orders for the purchase and sale of securities settled by PL for the Correspondent and the production thereof within one business day of the relevant transaction or (at the Correspondent’s option) the transmission from PL’s premises of relevant information to facilitate the mailing thereof by the Correspondent within one business day of the relevant transaction;
(vi)	the preparation of summary statements of account in the Correspondent’s name in respect of all accounts maintained by PL for the Correspondent and any Customers in respect of each Dealing Period and the mailing or delivery thereof on the next business day following the end of the relevant Dealing Period or (at the Correspondent’s option) the transmission from PL’s computer facilities to a terminal situated at the Correspondent’s premises of relevant information to facilitate the mailing thereof by the Correspondent on the next business day following the end of the Dealing Period;
(vii)	the receipt and delivery of securities (responsibility therefore becoming PL’s at such a time as the securities have been physically received by PL or its agents or representative authorised for this purpose);
(viii)	nominee and safe custody facilities;
(ix)	notification of entitlements in relation to the acceptance, rejection, renunciation splitting or other dealing with offers to purchase, subscribe, exchange, sell, convert or redeem securities and the exercise of rights to vote or any other rights incidental to the ownership of securities and following such notification to act in accordance with the instructions of the Correspondent in respect of such matters;
(x)	on the instructions of the Correspondent, the release and delivery to Customers, at the relevant address contained in PL’s records, of securities in respect of orders to purchase executed or settled by PL;
(xi)	the delivery of returns relating to transactions to The Stock Exchange or any other regulatory body established by or by virtue of statute;

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(xii)	the production of the necessary records required to meet the settlement obligations imposed by the Rules;
(xiii)	the maintenance in easily retrievable form or such other form (including machine readable form) as permitted by the Rules of all records required by the Rules and the creation of the records under the Included Services to permit the Correspondent to maintain all required records.
(xiv)	the handling of transactions in all currencies identified by the Correspondent and if agreed between PL and the Correspondent the dealing in forward currency contracts for the Correspondent;
(xv)	the provision to the Correspondent of all necessary information from time to time required by it to make reports required by The Stock Exchange;
(xvi)	the investment of funds belonging to the Correspondent and under the control of PL and not required to meet the obligations of the Correspondent or PL on behalf of the Correspondent (sometimes called “Free Funds’) on a daily basis at the direction of the Correspondent in a security of the Correspondent’s choice or in the alternative, transmission of such funds to an account designated by the Correspondent;
(xvii)	the training of the Correspondent’s personnel (at the Correspondent’s premises or PL’s premises as PL shall deem appropriate) to enable the Correspondent’s personnel to carry out relevant transactions using PL’s computer system and procedures for the conduct of business pursuant to this Agreement such training to be provided at such times and from time to time as shall be necessary having regard to the value of business conducted by PL on behalf of the Correspondent; and
(xviii)	(for the avoidance of doubt) the employment of such staff as shall be reasonably necessary for the purposes of (i) to (xvi) above);
(xix)	prompt notification of any irregularities or failure in performance on the part of PL, any Customer, the Correspondent, any counterparty or other person.

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EX-10.35

Exhibit 10.35

INDEX

CLAUSE		PAGE
1	Interpretation	2
2	Appointment	3
3	Retirement	3
4	Duties	4
5	Exclusivity of Service	5
6	Place of Work	5
7	No obligation to provide work	5
8	Salary	6
9	Expenses	6
10	Pension, Health Insurance and other benefits	6
11	Annual Leave	7
12	Incapacity	7
13	Discipline	8
14	Termination	8
15	Reconstruction or Amalgamation	9
16	Executives Obligations on Termination	10
17	Protective Covenants	10
18	Binding on Successors	12
19	Waiver, Release and Remedies	12
20	Counterparts	13
21	Notices	13
22	Variation	13
23	Severability	13
24	Governing Law	13
25	Independent Legal Advice	13

1

THIS AGREEMENT, is made as of 17 November 1998 BETWEEN

(1)INVESTMENT TECHNOLOGY GROUP EUROPE LIMITED a company incorporated under the laws of lreland having its registered office at Dublin Exchange Facility, IFSC, 2nd Floor, Custom House Docks, Dublin 1, Ireland (the “Company”)

AND

(2)Alasdair Haynes of 2 Old Palace Terrace, The Green, Richmond, Surrey TW9 1NB (the “Executive”)

WITNESSETH as follows:

1.Interpretation

1.1Definitions

In this Agreement unless the context otherwise requires or unless otherwise specified:

“Associated Company” means any company which from time to time is a subsidiary company of the Company the immediate parent company of the Company, Investment Technology Group Limited (“ITG”), the immediate parent company of ITG, Investment Technology Group SG Limited, or a subsidiary company of any such parent company and for the purposes of this definition “subsidiary company” and “parent company” shall have the meanings respectively given to them by Section 736 of the Companies Act, 1985;

“Board” means the board of directors from time to time of the Company;

“Business Day” means a day (other than a Saturday or Sunday) on which clearing banks are generally open for business in England;

“Commencement Date” means 17 November 1998 or the date on which the Executive actually commences employment with the Company, whichever is the later;

“Group” means the Company and all Associated Companies;

“Ireland” means the Republic of lreland;

“Relevant Business” means the securities electronic matching business or businesses from time to time carried on by the Company and/or any Associated Company;

“Termination Date” means the date on which the employment of the Executive under this Agreement shall terminate irrespective of the cause or manner; and

“Territory” means any country in which the Company does business generally or actively markets its products during the Executive’s employment.

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1.2Interpretation

In this Agreement unless the context otherwise requires or unless otherwise specified;

1.2.1any reference to any statutory provision, or to any order or regulation shall be construed as a reference to that provision, order or regulation as extended, modified, replaced or re-enacted from time to time (whether before or after the date of this Agreement) and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom (whether before or after the date of this Agreement);

1.2.2words denoting any gender include all genders and words denoting the singular include the plural and vice versa;

1.2.3headings are for convenience only and shall not affect the construction or interpretation of this Agreement; and

1.2.4if any action or duty to be taken or performed under any of the provisions of this Agreement would fall to be taken or performed on a day which is not a Business Day such action or duty shall be taken or performed on the Business Day next following such day.

2.Appointment

Subject to the provisions of clause 14 of this Agreement, the Company shall employ the Executive and the Executive shall serve the Company as Chief Executive from the Commencement Date on the terms and subject to the conditions contained in this Agreement, for an initial period of five years provided however that during that initial period the Executive may terminate this Agreement by giving twelve months written notice to the Company and the Company may terminate this Agreement by giving written notice to the Executive as follows:

2.1if notice is given at any time between the Commencement Date and the second anniversary of the Commencement Date (“the First Period”), two years;

2.2if notice is given at any time between the second anniversary of the Commencement Date and the fourth anniversary of the Commencement Date (“the Second Period”) eighteen months;

and after the initial period of five years, this Agreement will continue until either party gives the other not less than twelve months written notice of termination.

3.Retirement

If not previously terminated, this Agreement will be terminated by reason of retirement of the Executive at the end of the month in which the Executive’s 65th birthday occurs without compensation.

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4.Duties

4.1The Executive shall during his employment hereunder:

4.1.1faithfully and diligently undertake and perform such duties and exercise such powers authorities and discretions in relation to and commensurate with his position as Chief Executive of the Company and its business as the Board may from time to time at its sole discretion assign or delegate to or vest in him on such terms and subject to such conditions and restrictions as the Board may from time to time at its sole discretion determine or impose; and

4.1.2(unless prevented by ill health or accident and except during holidays permitted by this Agreement or with the consent of the Company) devote the whole of his working time, attention, abilities, expertise, skills and ingenuity to carrying out his duties hereunder during normal working hours and at such other times as may be required by the needs of the Company or the nature of the Executive’s duties. The Executive shall not be entitled to receive any additional remuneration for work outside normal working hours; and

4.1.3carry out his duties in a proper and efficient manner and use his best endeavours to maintain, protect, promote and extend the business, interests, reputation and welfare of the Company and of any Associated Company; and

4.1.4comply with all lawful resolutions, regulations and directions from time to time given to him by the Company and with all rules and regulations from time to time laid down by the Company concerning its executives which are not inconsistent with this Agreement; and

4.1.5report to the Board and at all times keep the Board promptly and fully informed (in writing if so requested) of his conduct of the business and affairs of the Company and provide such explanations as the Board may require in connection therewith; and

4.1.6subject to clause 6, in pursuance of his duties hereunder (without further remuneration unless otherwise agreed in writing with the Board) perform such duties or services for any Associated Company and accept and hold such offices or appointments in any Associated Company for such period as the Board may from time to time require provided that such duties or services, offices, or appointments are commensurate with his status as Chief Executive of the Company, and in all cases carry out such duties and the duties attendant on any such office or appointment as if they were duties to be performed by the Executive on behalf of the Company.

4.2In the event of either party serving notice of termination in accordance with clause 2.1, or the Executive being unable through illness or injury to carry out his duties hereunder for a consecutive period of 20 Business Days, the Board may from time to time and at any time appoint any other person or persons to act jointly or in conjunction with the Executive in the performance of his duties and powers hereunder and assign to any such person or persons duties and powers identical or similar to those undertaken or performed by the Executive hereunder save that when the Executive returns to work after a period of incapacity such persons or person will stand down with immediate effect.

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5.Exclusivity of Service

5.1Unless the Company shall at its absolute discretion so agree in writing, the Executive shall not during the course of his employment (except as a representative of the Company) and subject to clause 5.2, undertake nor, directly or indirectly be engaged, concerned or interested in any other business, firm, company, concern, enterprise or society (whether incorporated or otherwise) or become an employee, officer, servant or agent of or consultant to any other business, firm, company, concern, enterprise or society (whether incorporated or otherwise).

5.2Nothing in this clause shall preclude the Executive from holding being interested in or acquiring (beneficially or otherwise), when aggregated with any such holding of his spouse and his children under the age of 18 of which, the Executive is aware, not more than 3% per cent in nominal value of the issued share capital of any class of shares or securities of any other company listed or dealt in on any recognised stock exchange by way of bona fide investment unless the Board shall require him not to do so in any particular case on the ground that such other company is or may be carrying on a business conflicting, competing or tending to conflict or compete with the business of the Company or any Associated Company. The Executive shall comply with the provisions of the Company’s Compliance Manual.

6.Place of Work

The Executive’s normal place of work shall be at the Company’s business premises in London or at such other place of business of the Company or any member of the Group as the Company shall reasonably require provided that such other place of business shall be within reasonable daily commuting distance from the Executive’s home and the Executive himself does not move outside the daily commuting distance. In addition, the Executive shall travel as necessary or required to Dublin and to such places whether inside or outside Ireland or the United Kingdom and in such manner and on such occasions as the Company may from time to time require in pursuance of his duties hereunder.

7.No Obligation to provide work

For a maximum of six months after notice of termination has been served by either party, there shall be no obligation on the Company to require the Executive to work or perform any duties and if the Company gives written notice to the Executive that it requires the Executive not to work or perform any duties for up to six months, then during such period the Executive:

7.1shall not, without written permission of the Company, be entitled to access to any premises of the Company or any Associated Company; and

7.2shall continue to receive his full remuneration and other benefits hereunder including any bonus or incentive arrangement for which the Executive may be eligible as if the Executive had remained at work and had fulfilled his duties.

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8.Salary

8.1During the continuance of his employment under this Agreement, the Executive shall be paid a salary at the rate of Stg, 120,000 per annum. Such salary (and any revised salary pursuant to clause 8.2) shall accrue from day to day but shall be paid by equal monthly instalments in arrears on or before the last working day of each month into the Executive’s nominated bank account, subject to the deduction of such income tax (PAYE), and national insurance contributions and such other deductions which the Company is obliged by law or requested by the Executive or entitled under this Agreement to make.

8.2The Executive’s salary provided for in clause 8.1 shall be subject to an upwards only annual review by the Board commencing on and with effect from 1 January 2000 and thereafter on each subsequent 1 January and an increase (if any) in salary shall have effect as if specifically provided for as a term of this Agreement.

8.3The Executive’s salary provided for in this clause 8 shall be deemed to include any fee receivable by the Executive as a director of the Company or any Associated Company or of any other company or unincorporated body in which he holds office as nominee or representative of the Company or any Associated Company.

8.4The Company may, at its absolute discretion, pay the Executive an annual performance related bonus of an amount to be determined by the Board. The total bonus pool available to employees of the Company will be set by the Board as a percentage of the Company’s revenues.

8.5The Company shall to the extent permitted by law be entitled to deduct from the Executive’s salary or bonus all sums from time to time owed by the Executive to the Company or any Associated Company, and by his execution hereof, the Executive hereby consents to the deduction of such sums, provided that he has been given reasonable prior notice of the intended deduction.

9.Expenses

9.1The Company shall reimburse to the Executive all reasonable travelling, hotel, entertainment and other out of pocket expenses properly incurred by him in the proper performance of his duties up to such annual limit as may be determined by the Board, subject to the production of evidence of expenditure satisfactory to the Company.

9.2Where the Company issues a Company sponsored credit or charge card to the Executive he shall use such card only for expenses reimbursable under clause 9.1 above or shall promptly repay to the Company any other expenses or sums incurred on such credit or charge card.

10.Pension, Health Insurance and Other Benefits

The Executive will be entitled to participate in whatever pension and employee benefits plan that may be adopted or provided by the Company from time to time.

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11.Annual Leave

11.1The Executive shall be entitled to 30 days annual leave (in addition to statutory public holidays) in each calendar year to be taken at such time or times as agreed with the Board.

11.2Annual leave entitlement shall be deemed to accrue at the rate of 2.5 days per month and on the termination of this Agreement howsoever arising the Executive shall be entitled to pay in lieu of all accrued annual leave entitlement from the start of the then current leave year up to and including the Termination Date only. The basis of payment shall be at the rate of 1/261 basic annual salary for each day in excess of / less than the accrued entitlement.

11.3The Company’s leave year commences on 1 January and ends on 31 December. Annual leave cannot be carried forward from one year to the next without the consent of the Board. Salary in lieu of annual leave will not be paid by the Company.

12.Incapacity

12.1If the Executive is absent from work due to illness or accident he shall notify the Board as soon as possible. If this incapacity continues for five or more consecutive Business Days he shall submit a doctor’s certificate in a form satisfactory to the Company confirming his inability to attend work.

12.2If the Executive is absent from work due to illness or accident duly notified and certified in accordance with clause 12.1, the Company shall pay the Executive his remuneration, subject to clause 12.3, for a maximum aggregate period of twenty six weeks absence in any period of twelve months.

12.3The remuneration paid under clause 12.2 shall include any sick pay to which the Executive is entitled by law and shall be reduced by the amount of any social welfare or other benefits recovered by the Executive .

12.4The Company may (at its expense) at any time upon reasonable notice, whether or not the Executive is then incapacitated, require the Executive to submit to such medical examinations and tests by medical practitioners nominated by the Company at the expense of the Company and the Executive hereby agrees to submit to such medical examination and tests and hereby authorises such medical practitioners to disclose to, and discuss with, the Company and its medical advisers the results of such examinations and tests provided that the Executive is given copies of all such results and tests.

12.5In the event that the Executive is incapable of performing his duties by reason of injuries sustained wholly or partly as a result of actionable negligence nuisance or breach of any statutory duty on the part of any third party all payments made to the Executive by the Company under this clause 12 shall to the extent that compensation is recoverable from that third party constitute loans by the Company to the Executive (notwithstanding that as an interim measure income tax has been deducted from payments as if they were emoluments of employment) and shall be repaid when and to the extent that the Executive recovers compensation for loss of earnings from that third party by action or otherwise.

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13.Discipline

In the event of perceived gross misconduct, the Board or in exceptional circumstances the co-chairmen of the Board will be entitled to suspend the Executive forthwith where it is necessary to do so in order to consider and investigate the allegation and decide what action or procedure it would be appropriate to adopt. Such suspension will be for no longer than is necessary to investigate the allegation. Full remuneration and all benefits shall be paid to the Executive during any such suspension. In all disciplinary matters, the Executive will be presented in writing with the totality of the allegations outstanding against him, will be given the right to respond, will have the opportunity to be represented at any disciplinary hearing by a colleague and will have the opportunity to call witnesses to support his case.

14.Termination

14.1Notwithstanding the provisions of clause 2 above, this Agreement may be terminated forthwith by the Company by written notice to the Executive if at any time:

14.1.1he commits any serious or material breach or repeated breaches of his obligations under this Agreement and (if capable of remedy) fails to remedy the same within 14 days of receiving a written notification from the Board identifying such breaches and calling upon him to remedy them; or

14.1.2he is guilty of dishonesty or gross misconduct or wilful neglect in the discharge of his duties or the performance of his powers hereunder, such that the Board can no longer have trust and confidence in him; or

14.1.3he is adjudicated bankrupt or commits any act of bankruptcy or makes any formal arrangement or composition with his creditors; or

14.1.4he is convicted of any criminal offence (other than a road traffic offence which does not result in a custodial sentence) which in the reasonable opinion of the Board seriously and detrimentally affects his position in or the reputation of the Company; or

14.1.5he is guilty of any conduct tending to bring himself the Company or any Associated Company into disrepute; or

14.1.6he ceases by any act or default of his own to be a director of the Company or is prohibited or disqualified by law from holding any office in the Company, any Associated Company or any other company; or

14.1.7if the Executive is absent or unable through illness or injury to discharge in full his duties hereunder for a consecutive period of 26 weeks in any period of 12 consecutive months, or if the Executive becomes of unsound mind or shall be or become a patient for the purposes of any Mental Health Act so that he is unable to perform his duties, provided that no action will be taken to terminate his employment that would prejudice the Executive’s rights to benefit under the Company’s PHI scheme.

8

14.2.In the event of the Company terminating this Agreement except where the provisions of clause 14.1 apply, the Company will pay to the Executive by way of termination payment a gross sum calculated as follows:

14.2.1if the Agreement is terminated during the First Period, the amount of salary plus the cost to the Company of providing any benefits (including any bonus) which the Executive would have received had he remained employed through the full period of two years from the date of notice being given, or if no notice was given, from the Termination Date;

14.2.2if the Agreement is terminated during the Second Period, the amount of salary plus the cost to the Company of providing any benefits (including any bonus) which the Executive would have received had he remained employed through the full period of eighteen months from the date of notice being given or if no notice was given, from the Termination Date);

14.2.3if the Agreement is terminated on or after the fourth anniversary of the Commencement Date the amount of salary plus the cost to the Company of providing any benefits (including any bonus) which the Executive would have received had he remained employed through the full period of twelve months from the date of notice being given or if no notice was given, from the Termination Date;

in each case, subject to normal deduction of tax and national insurance contributions. Such termination payment shall be reduced by the amount of any payments made to or on behalf of the Executive; during any notice period worked by the Executive, or by the amount of any payments which would have been made to or on behalf of the Executive during any notice period which the Executive does not work at his own request and with the agreement of the Company. It is hereby agreed by the Executive that this payment by the Company will be in full and final settlement of all claims, causes of action or complaints whatsoever arising out of the employment or termination of employment of the Executive which he has or may have against the Company or any Associated Company and whether arising under statute, common law, equity or otherwise. This clause is without prejudice to any claim that the Executive may have for personal injury arising out of his employment and, for the avoidance of doubt, this paragraph shall not prejudice the Executive’s accrued rights under the Company Pension Scheme or his rights under the Share Option Agreement dated as of 17 November 1998.

15.Reconstruction or Amalgamation

If before the termination of this Agreement the employment of the Executive under this Agreement is terminated by reason of liquidation of the Company for the purpose of reconstruction or amalgamation and the Executive is offered employment with any concern or company resulting from such reconstruction or amalgamation or with any Associated Company, in the capacity of Chief Executive on terms and conditions not less favourable than the terms of this Agreement, then the Executive shall have no claim against the Company in respect of the termination of his employment under this Agreement.

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16.Executive’s Obligations on Termination

16.1Upon the termination of this Agreement howsoever arising, the Executive hereby agrees that he shall immediately at the request of the Company:

16.1.1resign from all offices held by him in the Company and any Associated Company and from all other appointments or offices which he holds as nominee or representative of the Company or of any Associated Company and do all such acts and things (if any) as may be necessary to make: any such resignations effective and in default the Company is hereby irrevocably authorised to appoint some person as his attorney in his name and on his behalf to execute any documents and do all things requisite to give effect thereto; and

16.1.2deliver up to the Company all Company property which may be in his possession or under his control including but not limited to, computer, all correspondence, documents, memoranda, papers, writings, keys, credit cards, business cards and all other property of or relating to the Company or any Associated Company except for any documents which the Executive may reasonably require to bring a claim against the Company in respect of, any accrued salary he may have or for compensation in respect of the termination of this Agreement provided always that the Executive notifies the Company of all such claims within 14 days of the Termination Date and immediately furnishes copies and a full list of all such documents retained and on conclusion of such claim(s) such documents are returned forthwith to the Company.

16.2The Company shall forthwith upon termination pay to the Executive all accrued and unpaid remuneration, fees and expenses due under the terms of this Agreement, less any amounts owing by the Executive to the Company or to any Associated Company, provided advance notice of any such amounts owing is given to the Executive.

16.3The termination of this Agreement shall not affect such of the provisions of this Agreement as are expressed to operate or have effect thereafter and shall be without prejudice to any right of action already accrued to either party in respect of any breach of this Agreement by the other party.

17.Protective Covenants

17.1Acknowledgements by the Executive

The Executive acknowledges:-

(a)that the Group is in a unique and highly specialised business involving products/services which are highly sophisticated and technical in nature;

(b)that the Group’s market is national and international in scope with a limited number of competitors;

(c)that the Group possess a valuable body of confidential information;

(d)that the Company will give him access to confidential information in order to carry out his duties;

10

(e)that the Executive’s duties include, without limitation, a duty of trust and confidence and a duty to act at all times in the best interests of the Company;

(f)that the Executive’s knowledge of confidential information directly benefits him by enabling him to perform his duties;

(g)that unless required for the performance of his duties the disclosure of any confidential information to any customer or actual or potential competitor of the Company may place the Company at a serious competitive disadvantage and may cause immeasurable (financial and other) damage to the Relevant Business;

(h)that if, on leaving the employment of the Company, he was to hold any position in any actual or potential competitor to the Relevant Business, it may place the Company at a serious competitive disadvantage and would cause immeasurable (financial and other) damage to the Relevant Business; and

(i)that the success of the Relevant Business depends in part on the Executive’s successor and /or fellow employees establishing business relationships with the customers and suppliers of the Relevant Business which are similar to those established and maintained by the Executive in the course of his employment by the Company.

17.2Competition

During the continuance of this Agreement and, subject to clause 17.4 for a period of 12 months after the Termination Date the Executive shall not within the Territory, without the prior written consent of the Company:

17.2.1be engaged, concerned or interested either directly or indirectly in any capacity either on his own behalf of in conjunction with or on behalf of any person, firm, company, business, concern or enterprise whatsoever in the Relevant Business or in any business wholly or partly in competition with the Relevant Business; or

17.2.2directly or indirectly in any capacity either on his own behalf or in conjunction with or on behalf of any other person, firm, company, business, concern or enterprise whatsoever;

(a)solicit or entice or endeavour to solicit or entice away from the Company or any Associated Company any person employed by the Company or any Associated Company in any capacity whatsoever whether or not such person would commit a breach of his contract of employment by reason of leaving such service;

(b)canvass, solicit or approach or cause to be canvassed or solicited or approached for orders in respect of any services provided or any goods dealt in by the Company or any Associated Company any person, firm, company, business, concern or enterprise whatsoever who is or was at any time during the period of 12 months immediately preceding the termination of a customer of or supplier to or in the habit of dealing with the Company or any Associated Company or who is or had been during the said 12 month period negotiating with the Company for the supply of such services or goods; or

11

(c)interfere or seek to interfere to take steps as may interfere with the continuance of supplies to the Company or any Associated Company (or the terms relating to such supplies) from any persons who are or who have been supplying components, materials, goods or services to the Company or to any Associated Company at any time during the 12 month period immediately preceding termination of this agreement.

17.3Nothing contained in this clause shall act to prevent the Executive from using generic skills learnt while employed by the Company in any business or activity which is not in competition with the Company.

17.4The period of the restriction in clause 17.2 shall be reduced by the period of time for which the Company exercises its rights under clause 7 to require the Executive not to work or perform any or all of his duties.

17.5The Executive acknowledges and agrees that each clause of this section 17 constitutes an entirely separate and independent restriction and that the duration, extent and application of each restriction are no greater than is reasonable and necessary for the protection of the interests on the Company but that, if any such restriction shall be adjudged by any court or authority of competent jurisdiction to be void or unenforceable but would be valid if the period thereof and/or the area dealt with thereby were to be reduced, the said restriction shall apply within the jurisdiction of that court or competent authority with such modifications as are necessary to make it valid and effective.

18.Binding on Successors

To the extent permitted by law, this Agreement shall be binding upon and enure to the benefit of the respective parties hereto and their respective personal representatives, successors and permitted assigns.

19.Waiver, Release and Remedies

19.1A waiver by either party of any breach by the other of any of the terms, provisions or conditions of this Agreement or the acquiescence by either party in any act (whether of commission or omission) which but for such acquiescence would be a breach as aforesaid shall not constitute a general waiver of such term, provision or condition or an acquiescence to any subsequent act contrary thereto.

19.2Any remedy or right conferred upon either party for breach of this Agreement shall be in addition to and without prejudice to all other rights and remedies available to such party whether pursuant to this Agreement or otherwise provided for by law.

19.3No failure or delay by either party in exercising any claim, remedy, right, power or privilege under this Agreement shall operate as a waiver nor shall a single or partial exercise of any claim, remedy, right, power or privilege preclude any further exercise thereof or exercise of any other claim, remedy, right, power or privilege.

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20.Counterparts

This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which when executed and delivered shall constitute an original and all such counterparts together constituting one and the same instrument.

21.Notices

Any notice or other communication whether required or permitted to be given hereunder shall be given in writing and shall be deemed to have been duly given if delivered by hand against receipt of the addressee or if transmitted by fax or sent by prepaid registered post addressed to the party to whom such notice is to be given at the address set out for such party herein (or such other address as such party may from time to time designate in writing to the other party hereto in accordance with the provisions of this clause). Any such notice shall be deemed to have been duly given if delivered at the time of delivery, if transmitted by fax at the time of termination of the transmission and if sent by prepaid registered post as aforesaid forty eight house after the same shall have been posted provided that in the case of notice to the Executive, any fax transmission or postal delivery shall not be validly given, if the Executive shall, to the knowledge of the Company, be away or travelling in which event notice will only be effectively given when the Executive returns to the relevant address.

22.Variation

No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each of the parties hereto.

23.Severability

Each of the provisions of this Agreement, or any part thereof, is separate and severable and enforceable accordingly and if at any time any provision, or any part thereof, is adjudged by any court of competent jurisdiction to be void or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and of that provision, or any part thereof, in any other jurisdiction shall not in any way be affected or impaired thereby.

24.Governing Law

This Agreement shall be governed by and construed in accordance with the laws of England and Wales and the courts of England and Wales shall have exclusive jurisdiction to deal with all disputes arising from on touching upon this Agreement.

25.Independent Legal Advice

The Executive acknowledges that he has been afforded the opportunity of obtaining independent legal advice on the terms of this Agreement and understands the effect and implications of this Agreement and every part thereof. The Executive further acknowledges that he has entered into this Agreement without any coercion of any description.

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IN WITNESS whereof this Agreement has been duly executed on the date shown at the beginning of this Agreement.

Signed for and on behalf of
the Company by:

/s/ Raymond L. Killian, Jr.

Raymond L. Killian, Jr.

Director

Signed by the Executive:

/s/ Alasdair Haynes

Alasdair Haynes

in the presence of:

[ILLEGIBLE]

Witness

Address

[ILLEGIBLE]

[ILLEGIBLE]

Occupation

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EX-10.36

Exhibit 10.36

INVESTMENT TECHNOLOGY GROUP, INC.

FORM OF NONQUALIFIED STOCK OPTION GRANT AGREEMENT

THIS GRANT AGREEMENT, dated as of                   (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and Robert C. Gasser, an employee of the Company (the “Employee”).

WHEREAS, the parties entered into an Employment Agreement on                   (the “Employment Agreement”).

WHEREAS, pursuant to Section 4.03(c) of the Employment Agreement, the Employee is entitled to receive a non-qualified stock option to purchase shares of the Company’s common stock (the “Common Stock”).

WHEREAS, the Company desires to grant the Employee this option under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”), in order to satisfy its obligation under the Employment Agreement.  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

WHEREAS, the Employee agrees that this option grant satisfies the Company’s obligation under the Employment Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1.             Grant of the Option.  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded a nonqualified stock option to purchase                 shares of Company Stock for an Exercise Price of $            per share (the “Option”).  This Option is intended to be a nonqualified stock option and shall not be treated as an incentive stock option under the provisions of the Code.

2.             Grant Subject to Plan Provisions.  This Option is awarded pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047794.pdf and http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047867.pdf, respectively; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  This Option is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement

pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.

3.             Vesting of the Option.

(a)           Subject to Section 4 below and the other terms and conditions of this Grant Agreement and the Plan, this Option shall vest and become exercisable on the following dates, if the Employee has remained continuously employed by the Employer from the Date of Grant through the vesting date; provided, however, that the Option shall vest and become immediately exercisable in full (i) immediately prior to the effectiveness of a Change in Control if the Employee is employed by the Employer as of such date or (ii) upon the Employee’s Termination of Service (as defined below) due to the Employee’s death or Permanent Disability (as defined in the Employment Agreement):

Date	Shares for Which the Option is Exercisable
First Anniversary of Date of Grant	33 1/3	%
Second Anniversary of Date of Grant	33 1/3	%
Third Anniversary of Date of Grant	33 1/3	%

The exercisability of the Option is cumulative, but shall not exceed 100% of the shares subject to the Option.  If the foregoing schedule would produce fractional shares, the number of shares for which the Option becomes exercisable shall be rounded down to the nearest whole share.

(b)           In the event of the Employee’s Termination of Service for Good Reason (as defined in the Employment Agreement) or not for Cause (as defined in the Employment Agreement) prior to a Change in Control (as defined in the Employment Agreement) and Employee executes (and does not revoke) a Release (as defined in the Employment Agreement), (i) the vested portion of the Option as of the termination date shall remain exercisable until the earlier of the first anniversary of the termination date or the expiration of the Option term and (ii) the unvested portion of the Option as of the termination date shall continue to vest as if Employee had remained employed by the Employer through the first anniversary of the termination date and any portion of the Option that vests during the one-year period following the termination date shall remain exercisable until the earlier of the one-year period following the applicable vesting date or the expiration of the Option term.

(d)           Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the 2007 Plan shall be subject to the vesting schedule in this Section 3.

4.             Termination of Service; Forfeiture of Unvested Option.  In the event of the Employee’s Termination of Service for any reason other than those outlined in Section 3 above

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prior to the date the Option otherwise becomes vested in accordance with Section 3 above, the Option shall immediately be forfeited by the Employee.

“Termination of Service” means the Employee ceases to be employed by the Employer.  If the Employee is employed by a Subsidiary of the Company, the Employee shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and the Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.

5.             Term.  The Option (to the extent not earlier exercised or forfeited in accordance with Section 4 above) shall expire at 5:00 p.m., Eastern time, on the earliest of (a) the fifth anniversary of the Date of Grant, (b) the date that is one year following the date of the Employee’s Termination of Service due to the Employee’s death or Permanent Disability (as defined in the Employment Agreement), (c) the dates set forth in Section 3(b) above due to the Employee’s Termination of Service for Good Reason (as defined in the Employment Agreement) or not for Cause (as defined in the Employment Agreement) prior to a Change in Control (as defined in the Employment Agreement) in accordance with Section 3(b) above or (d) the date that is sixty (60) days after the date of the Employee’s Termination of Service for any other reason. Notwithstanding any other provision of this Grant Agreement to the contrary, in the event of a Change in Control at a time when the Employee is employed by the Employer, the Option shall be exercisable until 5:00 p.m., Eastern time, on the fifth anniversary of the Date of Grant, without regard to whether the Employee continues to be employed by the Employer after the Change in Control.

6.             Method of Exercise.  To the extent the Option is exercisable under the provisions of Sections 3 and 4 hereof, the Employee may exercise the Option, in whole or in part, at such time as the Option is exercisable and prior to its expiration by giving written notice of exercise of the Option in accordance with the Investment Technology Group, Inc. Stock Option Overview (the “Exercise Overview”).  Such Exercise Overview is available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/045582.pdf, or upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.

7.             Payment of Exercise Price.  The Exercise Price of the shares of Company Stock purchased by the Employee upon exercise of the Option (the “Option Shares”) shall be paid in full to the Company at the time of such exercise in accordance with the procedures set forth in the Exercise Overview, or by such other method as the Committee may approve; provided, however, that Company Stock held for less than six months may be surrendered in payment or partial payment of the Exercise Price only with the approval of the Committee.

8.             Nontransferability.  Neither the Employee nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey the Option, which Option is, and all rights under this Grant Agreement are, expressly declared to be unassignable and nontransferable, other than by will or under the

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laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).

9.             No Right to Employer Assets.  Neither the Employee nor any other person shall acquire by reason of the Option or the Option Shares any right in or title to any assets, funds or property of the Employer whatsoever including, without limiting the generality of the foregoing, any specific funds or assets which the Employer, in its sole discretion, may set aside in anticipation of a liability.  No trust shall be created in connection with or by the granting of the Option or the purchase of any Option Shares, and any benefits which become payable hereunder shall be paid from the general assets of the Employer.  The Employee shall have only a contractual right to the amounts, if any, payable pursuant to this Grant Agreement, unsecured by any asset of the Company or any of its affiliates.

10.           Limitations.  Nothing herein shall limit the Company’s right to issue Company Stock, or stock options or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates.  Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

11.           Withholding.  The Employee shall pay to the Employer or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the issuance of Option Shares or the payment of money pursuant to the exercise of the Option, and the Employer shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.  To the extent permitted by the Committee, the Employee may elect to have the Employer withhold Company Stock to pay any applicable withholding taxes resulting from the exercise of the Option and the issuance of Option Shares, in accordance with any rules or regulations of the Committee then in effect.

12.           Expenses of Issuance of Option Shares.  The issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the Option Shares.

13.           Terms are Binding.  The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Employee and the Company.

14.           Compliance with Law.  The exercise of the Option and the obligations of the Company to issue or transfer Option Shares hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and

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approvals by any governmental or regulatory agency as may be required.  In no event shall Employee be permitted to exercise the Option if the issuance of Option Shares at that time would violate any law or regulation.  By signing this Grant Agreement, the Employee agrees not to sell any Option Shares at a time when applicable laws or the Company policies prohibit a sale.

15.           References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

16.           Notices.  Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Employer’s corporate records, or at any other address at which the Employee may specify in a notice delivered to the Company in the manner set forth herein.

17.           No Right to Continued Employment.  This Option shall not confer upon the Employee any right to continue in the employ of the Employer nor shall this Option interfere with the right of the Employer to terminate the Employee’s employment at any time.

18.           Costs.  In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys’ fees shall be included as part of the judgment.

19.           Further Assurances.  The Employee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this

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Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

20.           Counterparts.  For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

21.           Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.

22.           Entire Agreement.  This Grant Agreement, together with the Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Option other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

23.           Amendment; Waiver.  This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  Any such written instrument must be approved by the Committee to be effective as against the Company.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

24.           Severability.  Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

INVESTMENT TECHNOLOGY GROUP, INC.
By:
Name:	Maureen O’Hara
Title:	Chairman of the Board of Directors

I hereby accept the Option described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

Robert C. Gasser

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EX-14

Exhibit 14

INVESTMENT TECHNOLOGY GROUP, INC.
CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic policies to guide all directors, officers and employees of the Company and its subsidiaries.  In particular, this Code covers policies designed to deter wrongdoing and to promote (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interests, (2) full, fair, accurate, timely, and understandable disclosure, and (3) compliance with applicable governmental laws, rules and regulations.  All directors, officers and employees must conduct themselves in accordance with these policies and seek to avoid even the appearance of improper behavior.  The Company’s directors, officers and employees should also direct themselves to the Company’s human resources materials, including the employee manuals of our various subsidiaries, and the compliance manuals and/or written supervisory procedures of our broker-dealer subsidiaries for further guidance and discussion of many of the topics addressed herein.  The Company’s agents and representatives, including consultants, should also be directed to this Code at the Company’s website address: www.itg.com.

The Company seeks to comply with all applicable laws.  In the event, however, that a law conflicts with a policy in this Code, you must comply with the law.  If you have any questions about a potential conflict or about this Code generally, please consult with your supervisor, department head, the Legal Department, or Human Resources on how to handle the situation.

Each director, officer and employee will be held accountable for his/her adherence to this Code.  Those who violate the policies in this Code will be subject to disciplinary action, up to and including discharge from the Company and, where appropriate, civil liability and criminal prosecution.  If you are in a situation that you believe may violate or lead to a violation of this Code, you must report the situation as described in Sections 15 and 16 of this Code.

1.             Compliance with Laws, Rules and Regulations

Obeying the law, both in letter and in spirit, is one of the foundations on which this Company’s ethical policies are built. All directors, officers and employees must respect and obey the governmental laws, rules and regulations (including insider trading laws) of the cities, states and countries in which we operate. Although not all directors, officers and employees are expected to know the details of these laws, rules and regulations, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

The Company holds information and training sessions to promote compliance with laws, rules and regulations, including insider trading laws and the rules and regulations applicable to employees of our broker-dealer subsidiaries.

2.             Honest and Ethical Conduct

Each director, officer and employee must always conduct him/herself in an honest and ethical manner.  Each director, officer and employee must act with the highest standards of personal and professional integrity and not tolerate others who attempt to deceive or evade responsibility for actions.  All actual or apparent conflicts of interest between personal and professional relationships must be handled honestly, ethically and in accordance with the policies specified in this Code.

3.             Conflicts of Interest

A “conflict of interest” occurs when a person’s private interest interferes in any way (or even appears to interfere) with the interests of the Company as a whole.  A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or a member of his or her family(1), receives improper personal benefits as a result of his or her position in the Company.  Loans to, or guarantees of obligations of, employees, officers, or directors or their family members can create conflicts of interest and in some circumstances, be unlawful. As a result, no loan or guarantee should be granted without authorization from the Legal Department or the Chief Financial Officer.  In addition, no loans are permitted to senior executives of the Company, as provided by law.

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for a competitor, customer or supplier as a consultant or board member. The best policy is to avoid any direct or indirect business connection with our customers, suppliers and competitors, except on behalf of the Company.

Conflicts of interest are prohibited as a matter of Company policy, except as specifically approved by senior management. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with a supervisor, manager or other appropriate personnel or the Company’s Legal Department. Any employee, officer or director who becomes aware of a conflict or potential conflict, or knows of any material transaction or relationship that reasonably could be expected to give rise to such a conflict, should promptly bring it to the attention of a supervisor, manager or other appropriate personnel referenced previously who is not involved in the matter giving rise to such a conflict or potential conflict or consult the procedures described in Sections 15 and 16 of this Code.

In addition, the Company has a policy that sets forth the Company’s policies and procedures with respect to Related Person Transactions (as defined in Regulation S-K Item

(1) Family members include such person’s spouse, child, stepchild, grandchild, parent, stepparent, grandparent, sibling, in-laws and anyone living in such person’s household and/or economically dependent upon such person, including all adoptive relationships.

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404(a)) and the approval thereof.  See the Company’s Procedures for the Review of Related Person Transactions.

4.             Insider Trading

Employees, officers and directors who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company’s business.  All non-public information about the Company should be considered confidential information.  To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal.  A more detailed discussion of the insider trading laws can also be found in the compliance manuals and/or written supervisory procedures of each of our broker-dealer subsidiaries as well as the employee handbook.  If you have any questions, please consult the Company’s Legal Department.

5.             Corporate Opportunities

Employees, officers and directors are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or position.  No employee, officer or director may use corporate property, information, or position for personal gain, and no employee, officer or director may compete with the Company directly or indirectly.  Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

6.             Competition and Fair Dealing

We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. Misappropriating proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited.  Each employee, officer and director should endeavor to respect the rights of and to deal fairly with the Company’s customers, suppliers, competitors and employees.  No employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair dealing practice.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships.  No gift or entertainment should ever be offered, given, provided or accepted by any Company director, officer or employee, family member of a director, officer or employee or agent unless it:  (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations.  There are also special rules relating to gifts applicable to certain employees of our broker-dealer subsidiaries, which are discussed in detail in the compliance manuals and/or written supervisory procedures of each such subsidiary.  Please discuss with your supervisor any gifts or proposed gifts which you are not certain are appropriate.

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7.             Discrimination and Harassment

The diversity of the Company’s employees is a tremendous asset.  We are firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind.  The Company’s Equal Opportunity Employment Policy and Policy Prohibiting Harassment is set forth in detail (in the Employee Handbook/Intranet).  Please take note that no employee will be retaliated against for reporting in good faith a violation of these policies, or assisting in any activities related to such policies.

8.             Health and Safety

The Company strives to provide each employee with a safe and healthful work environment.  Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs or alcohol in the workplace will not be tolerated.

9.             Record-Keeping

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or your controller. Rules and guidelines are available from the Finance Department.

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal and regulatory requirements and to the Company’s system of internal controls.  All employees are responsible to report to the Company any questionable accounting or auditing matters that may come to their attention.

Business records, such as internal memoranda, e-mails, reports and other documents should be written in a professional, well-considered manner.  Due care should be taken to avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies.  In the event of litigation or governmental investigation, please consult the Company’s Legal Department.  Certain document retention rules apply in the context of litigation and/or governmental investigations that supercede normal document retention practices.

For more information on how to report such matters to the Company’s Board of Directors, see the Company’s Whistleblower Policy located on the Intranet.

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10.          Confidentiality

Employees, officers and directors must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is authorized by the Legal Department or required by law.  Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed.  It also includes information that suppliers and customers have entrusted to us.  The obligation to preserve confidential information continues even after employment with the Company or its subsidiaries ends.

Employees should take steps to safeguard confidential information by keeping such information secure, limiting access to such information to those employees who have a “need to know” in order to do their job, and avoiding discussion of confidential information in public areas, for example, in elevators, on planes, and on mobile phones.

11.          Protection and Proper Use of Company Assets

All employees, officers and directors should protect the Company’s assets and ensure their efficient use.  Theft, carelessness, and waste have a direct impact on the Company’s profitability.  Any suspected incident of fraud or theft should be immediately reported for investigation.  All Company assets should be used for legitimate business purposes and should not be used for non-Company business, though incidental personal use may be permitted.

The obligation of employees, officers and directors to protect the Company’s assets includes its proprietary information.  Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and product ideas, designs, databases, records, customer lists, customer trade data, salary information and any unpublished financial data and reports.  Unless protected by law, unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

12.          Payments to Government Personnel

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business.  It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U.S. government has a number of laws and regulations regarding business gratuities which may be accepted by U.S. government personnel.  The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as non-U.S. governments, may have similar rules. The Company’s Legal Department can provide guidance to you in this area.

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13.          Rules for Principal Executive Officer and Senior Financial Officers

In addition to complying with all other parts of this Code, if you are the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or any person performing similar functions (each referred to in this Code as a “Senior Officer”), you must take the following steps to ensure full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company:

(a)           Carefully review drafts of reports and documents the Company is required to file with the SEC before they are filed and Company press releases or other public communications before they are released to the public, with particular focus on disclosures each Senior Officer does not understand or agree with and on information known to the Senior Officer that is not reflected in the report, document, press release or public communication.

(b)           Meet with members of senior management and others involved in the disclosure process to discuss their comments on the draft report, document, press release or public communication.

(c)           Establish and maintain disclosure controls and procedures that ensure that material information is included in each report, document, press release or public communication in a timely fashion.

(d)           Consult with the Audit Committee on a regular basis to determine whether you or they have identified any weaknesses or concerns with respect to internal controls.

(e)           When relevant, confirm that neither the Company’s internal auditors nor its outside accountants are aware of any material misstatements or omissions in the draft report or document, or have any concerns about the “Management’s Discussion and Analysis of Financial Condition” section of a report or document.

(f)            Bring to the attention of the Audit Committee matters that you feel could compromise the integrity of the Company’s financial reports, including disagreements on accounting matters.

14.          Waivers of or Changes in the Code of Business Conduct and Ethics

Any waiver (including any “implicit waiver”) of this Code or changes to this Code that apply exclusively to executive officers, including Senior Officers, or directors may be made only by the Board or a Board committee and  (other than technical, administrative or other non-substantive amendments to this Code) will be promptly disclosed to the Company’s shareholders and otherwise as required by law, regulation of the SEC and stock exchange regulation.  “Implicit waiver” means the Company’s failure to take action within a reasonable period regarding a material departure from a provision of this Code that has been made known to an executive officer of the Company.

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15.          Reporting any Illegal or Unethical Behavior

Employees are encouraged to talk promptly to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and any violations of law, rules, regulations or this Code, or otherwise, when in doubt about the best course of action in a particular situation.  The supervisor, manager or other appropriate personnel to whom such matters are reported should not be involved in the reported illegal or unethical behavior or violation of law, rules, regulations or this Code.  Any supervisor or manager who receives a report of violation or potential violation of this Code is responsible for initiating an investigation into the matter and, if necessary, reporting the conduct or activities to senior management, the Compliance or Legal Departments.

Employees are expected to cooperate in internal investigations of misconduct.  Any person involved in an investigation of possible misconduct in any capacity must not discuss or disclose any information to anyone outside of the investigation unless protected by law or when seeking his or her own legal advice.

The Company expressly prohibits any form of retaliation against employees who, in good faith and for lawful purposes report or assist in an investigation of suspected improper, unethical or illegal conduct, whether through an internal investigation or government inquiry.  If an employee has a concern about retaliation, the employee should report it to his/her manager or appropriate personnel discussed previously.

Employees should know that it is unlawful to retaliate against a person, including with respect to their employment, for providing truthful information to a law enforcement officer relating to the possible commission of any federal offense.  Employees who allege that they have been retaliated against for providing information to a federal agency, Congress or a person with supervisory authority over the employee about suspected fraud may file a complaint with the Department of Labor, or in federal court if the Department of Labor does not take action.

16.          Compliance Standards and Procedures

We must all work to ensure prompt and consistent action against violations of this Code.  However, in some situations it is difficult to know right from wrong.  Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem.  These are some steps to keep in mind:

·Make sure you have all the facts.  In order to reach the right solutions, we must be as fully informed as possible.

·Ask yourself:  What specifically am I being asked to do?  Does it seem unethical or improper?  This will enable you to focus on the specific question you are faced with, and the alternatives you have.  Use your judgment and common sense; if something seems unethical or improper, it probably is.

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·Clarify your responsibility and role.  In most situations, there is shared responsibility.  Are your colleagues informed?  It may help to get others involved and discuss the problem.

·Discuss the problem with your supervisor.  This is the basic guidance for all situations.  In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process.  Remember that it is your supervisor’s responsibility to help solve problems.

·Seek help from Company resources.  In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it with the Company’s Human Resources Director, General Counsel, the CEO, or, if necessary, any member of the Board of Directors.

·Your report of violations of this Code may be made in confidence and without fear of retaliation.  If your situation requires that your identity be kept secret, your anonymity will be protected.  The Company does not permit retaliation of any kind against employees for good faith reports of violations of this Code or questionable accounting or auditing matters.

·Always ask first, act later:  If you are unsure of what to do in any situation, seek guidance before you act.

17.          Administration

Board of Directors. The Board of Directors, through the Nominating and Corporate Governance Committee and its delegees, will help ensure that this Code is properly administered.

Officers and Managers. Officers and managers are also responsible for the diligent review of practices and procedures in place to help ensure compliance with this Code.

Adopted by the Board of Directors on February 7, 2008.

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EX-21

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Exhibit 21

SUBSIDIARIES OF THE COMPANY

Name	Jurisdiction of Incorporation/Organization
ITG Inc.	Delaware
ITG Capital, Inc.	Delaware
AlterNet Securities, Inc.	Delaware
ITG Ventures Inc.	Delaware
ITG Software Solutions, Inc.	Delaware
ITG Global Production, Inc.	Delaware
ITG Global Trading Incorporated	Delaware
ITG Execution Services, Inc.	Delaware
ITG Solutions Network, Inc.	Delaware
ITG Analytics, Inc.	Delaware
Hoenig Group Inc.	Delaware
The Macgregor Group, Inc	Delaware
Blackwatch Brokerage, Inc.	Delaware
Radical Corporation	Delaware
Block Alert LLC	Delaware
Plexus Plan Sponsor Group, Inc.	California
ITG Derivatives LLC	Illinois
Investment Technology Group International Limited	Ireland
ITG Ventures Ltd.	Ireland
Investment Technology Group Limited	Ireland
Investment Technology Group Europe Limited	Ireland
ITG Investment Technology Group (Israel) Ltd.	Israel
ITG Australia Holdings PTY Ltd.	Australia
ITG Pacific Holdings PTY Limited	Australia
ITG Australia Ltd.	Australia
Vitic Nominees PTY Ltd	Australia
Veran Nominees PTY Ltd.	Australia
Australian POSIT PTY Ltd.	Australia
ITG Canada Corp.	Nova Scotia
TCM Corp	Nova Scotia
TriAct Canada Marketplace LP	Ontario
ITG Solutions Network UK, Ltd.	United Kingdom
ITG Asia Holdings Ltd.	Bermuda
ITG Japan Ltd.	Bermuda
ITG Hong Kong Limited.	Hong Kong
ITG Securities (Asia) Limited.	Hong Kong
Hoenig (Far East) Limited	Hong Kong
Arrino Holdings Limited.	Hong Kong
Macgregor Solutions S.L	Spain

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Exhibit 21

EX-23

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Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Investment Technology Group, Inc.:

        We consent to the incorporation by reference in the registration statements (No. 333-78309, No. 333-42725, No. 333-50804, No. 333-89290, No. 333-99087 and No. 333-26309) on Form S-8 of Investment Technology Group, Inc. and subsidiaries of our reports dated February 29, 2008, with respect to the consolidated statements of financial condition of Investment Technology Group, Inc. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2007, and the effectiveness of internal control over financial reporting as of December 31, 2007, which reports appear in the December 31, 2007 Annual Report on Form 10-K of Investment Technology Group, Inc.

/s/ KPMG LLP

New York, New York
February 29, 2008

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Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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Exhibit 31.1

CERTIFICATION

I, Robert C. Gasser, certify that:

1.

I have reviewed this annual report on Form 10-K of Investment Technology Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 29, 2008
	/s/  ROBERT C. GASSER Robert C. Gasser Chief Executive Officer

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Exhibit 31.1

CERTIFICATION

EX-31.2

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Exhibit 31.2

CERTIFICATION

I, Howard C. Naphtali, certify that:

1.

I have reviewed this annual report on Form 10-K of Investment Technology Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 29, 2008
	/s/  HOWARD C. NAPHTALI Howard C. Naphtali Chief Financial Officer

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Exhibit 31.2

CERTIFICATION

EX-32.1

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Exhibit 32.1

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002
(United States Code, Title 18, Chapter 63, Section 1350)
Accompanying Annual Report on Form 10-K of
Investment Technology Group, Inc. for the Year Ended December 31, 2007

        In connection with the Annual Report on Form 10-K of Investment Technology Group, Inc. (the "Company") for the year ended December 31, 2007, as filed with the SEC on the date hereof (the "Report"), Robert C. Gasser, as Chief Executive Officer of the Company, and Howard C. Naphtali, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. (§)1350, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  ROBERT C. GASSER Robert C. Gasser
Chief Executive Officer
February 29, 2008
/s/  HOWARD C. NAPHTALI Howard C. Naphtali
Chief Financial Officer
February 29, 2008

        The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

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Exhibit 32.1

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002 (United States Code, Title 18, Chapter 63, Section 1350) Accompanying Annual Report on Form 10-K of Investment Technology Group, Inc. for the Year Ended December 31, 2007