AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

Dated as of April 22, 2005

by and among

INSTINET GROUP INCORPORATED,

THE NASDAQ STOCK MARKET, INC.

AND

NORWAY ACQUISITION CORP.

TABLE OF CONTENTS

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THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of April 22, 2005 by and among The Nasdaq Stock Market, Inc., a Delaware corporation (“ Buyer ”), Norway Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Buyer (“ Merger Sub ”), and Instinet Group Incorporated, a Delaware corporation (the “ Company ”).

WHEREAS, Buyer and the Company desire that Buyer combine its businesses with the businesses operated by the Company through the merger of Merger Sub with and into the Company, with the Company as the surviving corporation (the “ Merger ”), pursuant to which each share of common stock of the Company, par value $0.01 per share (“ Company Common Stock ”), issued and outstanding at the Effective Time, other than the shares of Company Common Stock owned by Buyer, Merger Sub or the Company (or any of their respective direct or indirect wholly owned Subsidiaries) and other than the Appraisal Shares, will be converted into the right to receive the Merger Consideration, all as more fully provided in this Agreement; and

WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to Buyer’s willingness to enter into this Agreement, Buyer and a Company Stockholder are entering into a Support Agreement, of even date herewith, in respect of shares of Company Common Stock beneficially owned by such stockholder (the “ Support Agreement ”); and

WHEREAS, the board of directors (the “ Company Board ”) of the Company and the board of directors of each of Buyer and Merger Sub have determined that the Merger upon the terms and subject to the conditions set forth in this Agreement is advisable, fair to and in the best interests of their respective stockholders; and

WHEREAS, concurrently with the execution of this Agreement, Buyer is agreeing to sell and assign on the Closing Date certain assets and liabilities of the Company pursuant to a transaction agreement (the “ VAB Transaction Agreement ”), dated the date hereof, by and among Buyer, Merger Sub, and Iceland Acquisition Corp., a Delaware corporation (“ VAB Acquisition Sub ”), a copy of which is attached as Exhibit A hereto; and

WHEREAS, Buyer, Merger Sub and the Company desire to make those representations, warranties, covenants and agreements specified herein in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

Section 1.1 Capitalized terms not otherwise defined herein shall have the following meanings when used in this Agreement:

“ Accrued Commissions ” shall be as defined in Section 6.7(a)(v).

“ Acquisition Proposal ” shall be as defined in Section 6.11(g)(i).

“ Action ” shall be as defined in Section 6.9(a).

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

“ Agreement ” shall be as defined in the preamble of this Agreement.

“ Antitrust Law ” means any Applicable Law that is designed or intended to prohibit, restrict or regulate actions having the purpose or effect or monopolization or restraint of trade, or the lessening of competition through merger or acquisition, specifically including, but not limited to, the Sherman Antitrust Act of 1890, as amended, the Clayton Act of 1914, as amended, the HSR Act, and the Federal Trade Commission Act of 1914, as amended.

“ Applicable Authority ” shall mean the Persons set forth on Schedule 1.1 of the Company Disclosure Schedule.

“ Applicable Laws ” shall mean any and all applicable (a) federal, territorial, state, local and foreign laws, ordinances and regulations; (b) codes, standards, rules, requirements, orders and criteria issued under any federal, territorial, state, local or foreign laws, ordinances and regulations; (c) rules, guidelines or published interpretations of any Self-Regulatory Organization; and (d) Judgments.

“ Appraisal Shares ” shall be as defined in Section 3.1(d).

“ Assignee ” shall be as defined in Section 9.4.

“ Authority ” shall mean any court, arbitrator, administrative or other governmental department, agency, commission, tribunal, authority or instrumentality, domestic (including federal, state or local) or foreign or any Self-Regulatory Organization, which has authority or jurisdiction over the Company or any of the Company Subsidiaries or any of their respective properties or assets.

“ Benefit Plan ” shall mean any “employee benefit plan,” as defined in Section 3(3) of ERISA (including any “multiemployer plan” as defined in Section 3(37) of ERISA) and any profit-sharing, bonus, stock option, stock purchase, stock ownership, pension, retirement, severance, deferred compensation, excess benefit, supplemental unemployment, post-retirement medical or life insurance, welfare or incentive plan, or sick leave, long-term disability, medical, hospitalization, life insurance, other insurance plan, or other employee benefit plan, program or arrangement, whether written or unwritten, qualified or non-qualified, funded or unfunded.

“ Benefits Continuation Period ” shall be as defined in Section 6.7(a)(i).

“ Burdensome Condition ” shall be as defined in Section 6.4(h).

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“ Business ” shall mean the business of the ECN Entities as presently conducted.

“ Business Day ” shall mean any day except Saturday, Sunday or other day on which commercial banks in the City of New York, New York are authorized or required to close by law.

“ Buyer ” shall be as defined in the Preamble.

“ Buyer Benefit Plans ” shall be as defined in Section 6.7(b).

“ Buyer Disclosure Schedule ” shall mean the schedules of Buyer attached hereto. Disclosure of any matter, fact or circumstance in any Section of the Buyer Disclosure Schedule shall provide exceptions to or otherwise qualify the representations, warranties and covenants contained in the corresponding Sections of this Agreement and such other representations, warranties and covenants solely to the extent such matter, fact or circumstance is disclosed in a way as to make its relevance to the information called for by such other Section reasonably clear on its face.

“ Buyer Material Adverse Effect ” shall mean any event, occurrence, fact, condition, change, or effect that has a materially adverse effect on the ability of Buyer or Merger Sub to perform its obligations hereunder or consummate the Transactions or that would materially delay or prevent the Closing.

“ Certificate ” shall be as defined in Section 3.1(b).

“ Certificate of Merger ” shall be as defined in Section 2.2.

“ Change in the Company Board Recommendation ” shall be as defined in Section 6.11(d).

“ Closing ” shall be as defined in Section 2.2.

“ Closing Date ” shall be as defined in Section 2.2.

“ Closing Transaction Liabilities ” shall be as defined in Section 3.4(b).

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

“ Commission Employees ” shall be as defined in Section 6.7(a)(v).

“ Company ” shall be as defined in the Preamble.

“ Company Acquisition Agreement ” shall be as defined in Section 6.11(d).

“ Company ATS ” shall mean Inet ATS, Inc.

“ Company Benefit Plans ” shall mean any Benefit Plan maintained or contributed to by the Company or any Company Subsidiary, but excluding any Employment Agreements. For the avoidance of doubt, Company Benefit Plans do not include Reuters Plans.

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“ Company Board ” shall be as defined in the Recitals.

“ Company Board Recommendation ” shall be as defined in Section 4.20.

“ Company Broker-Dealer Subsidiaries ” shall mean the entities listed on Section 4.9(c) of the Company Disclosure Schedule.

“ Company Bylaws ” shall be as defined in Section 6.10(a).

“ Company Certificate ” shall be as defined in Section 6.10(a).

“ Company Common Stock ” shall be as defined in the Recitals.

“ Company Disclosure Schedule ” shall mean the schedules of the Company attached hereto. Disclosure of any matter, fact or circumstance in any Section of the Company Disclosure Schedule shall provide exceptions to or otherwise qualify the representations, warranties and covenants contained in the corresponding Sections of this Agreement and such other representations, warranties and covenants solely to the extent such matter, fact or circumstance is disclosed in a way as to make its relevance to the information called for by such other Section reasonably clear on its face.

“ Company Employee ” shall mean any individual employed by the Company or any Company Subsidiary as of the time in question, whether actively at work or on approved leave of absence.

“ Company Intellectual Property ” shall mean any Intellectual Property presently owned or held by the Company or any Company Subsidiary.

“ Company Material Adverse Effect ” shall mean any event, occurrence, fact, condition, change, or effect that is materially adverse to the business, results of operations, or financial condition of (a) the ECN Entities, taken as a whole, or (b) the VAB Subsidiaries, taken as a whole, other than, in the case of clauses (a) and (b), any event, occurrence, fact, condition, change, or effect arising out of or relating to (1) any changes in general economic or political conditions in the United States or any country or region in which the ECN Entities or the VAB Subsidiaries operate, as the case may be, provided that such changes do not have a materially disproportionate effect on, in the case of the ECN Entities, the Business relative to other entities operating businesses similar to the Business and, in the case of the VAB Subsidiaries, the VAB Business relative to other entities operating businesses similar to the VAB Business; (2) any events, circumstances, changes or effects that affect generally the industries in which the ECN Entities or the VAB Subsidiaries, as the case may be, operate provided that such events, circumstances, changes or effects do not have a materially disproportionate effect on, in the case of the ECN Entities, the Business relative to other entities operating businesses similar to the Business and, in the case of the VAB Subsidiaries, the VAB Business relative to other entities operating businesses similar to the VAB Business; (3) any changes in any Applicable Laws, provided that such changes do not have a materially disproportionate effect on, in the case of the ECN Entities, the Business relative to other entities operating businesses similar to the Business and, in the case of the VAB Subsidiaries, the VAB Business relative to other entities operating businesses similar to the VAB Business; (4) any outbreak or escalation of hostilities or war or

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any act of terrorism to the extent such outbreak or escalation does not have materially disproportionate effect on, in the case of the ECN Entities, the Business relative to other entities operating businesses similar to the Business and, in the case of the VAB Subsidiaries, the VAB Business relative to other entities operating businesses similar to the VAB Business; or (5) the announcement or consummation of this Agreement or the Transactions.

“ Company Option ” shall be as defined in Section 3.3(a).

“ Company Rights ” shall be as defined in Section 3.1(b).

“ Company Rights Plan ” shall be as defined in Section 3.1(b).

“ Company SEC Reports ” shall mean all of the reports (including reports on Forms 8-K, 10-Q and 10-K), statements (including proxy statements), schedules and registration statements of the Company filed with the SEC since December 31, 2002.

“ Company Stockholders ” shall be as defined in Section 6.10(a).

“ Company Stockholders Meeting ” shall be as defined in Section 6.10(a).

“ Company Subsidiary ” shall be as defined in Section 4.3.

“ Company’s Knowledge ” shall mean the actual knowledge of the individuals listed in Section 1 of the Company Disclosure Schedule, based on such reasonable inquiry as is consistent with their respective position (which inquiry shall include an inquiry of such individuals’ direct reports).

“ Compensation Committee ” shall be as defined in Section 6.7(a)(ii).

“ Confidentiality Agreement ” shall mean, in the case of Buyer, the Confidentiality Agreement, dated as of November 22, 2004, by and between the Company and Buyer and, in the case of SLP, the Confidentiality Agreement, dated as of December 8, 2004, by and among the Company, Buyer and SLP.

“ Contract ” shall mean any note, bond, indenture, mortgage, deed of trust, contract, instrument, license or other agreement.

“ Control ” shall mean the possession, directly or indirectly, of the affirmative power to direct or cause the direction of the management and policies of a Person (whether through ownership of securities, partnership interests or other ownership interests, by contract, by membership or involvement in the board of directors, management committee or management structure of such Person, or otherwise).

“ Covered Proposal ” shall be as defined in Section 8.6(a)(i).

“ Delaware Secretary of State ” shall be as defined in Section 2.2.

“ DGCL ” shall be as defined in Section 2.1.

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“ ECN Entities ” shall mean Inet Holding Company Inc., a Delaware corporation, and each of its Subsidiaries.

“ Effective Time ” shall be as defined in Section 2.2.

“ Eligible Company Employee ” shall be as defined in Section 6.7(a)(iii) and (iv), as applicable.

“ Employment Agreement ” shall mean a contract, offer letter, severance commitment letter or agreement of the Company or any Company Subsidiary with or addressed to any Company Employee or pursuant to which the Company or any Company Subsidiary has any actual or contingent liability or obligation to provide compensation and/or benefits in consideration for past, present or future services of a Company Employee.

“ Entity Financial Statement ” shall be as defined in Section 4.5(a).

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Exchange Fund ” shall be as defined in Section 3.2(a).

“ Financial Statements ” shall be as defined in Section 4.5(a).

“ GAAP ” shall mean United States generally accepted accounting principles.

“ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ Indebtedness ” shall mean with respect to any Person any indebtedness for borrowed money.

“ Indemnified Person ” shall be as defined in Section 6.9(b).

“ Intellectual Property ” shall mean (a) trademarks, service marks, trade names, designs, logos, slogans, Internet domain names, key words and other indicia of source or origin, and general intangibles of like nature, together with all goodwill, registrations and applications related to any of the foregoing; (b) patents (including any registrations, continuations, continuations in part, renewals and applications for any of the foregoing); (c) copyrights and other works of authorship (including any registrations and applications for any of the foregoing); (d) software; data, databases and other collections of data; technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies; and (e) other similar proprietary rights.

“ Judgments ” shall mean any and all judgments, orders, writs, directives, rulings, decisions, injunctions, decrees, assessments, settlement agreements (other than settlement agreements under which there are no continuing obligations) or awards of any Authority.

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“ Lien ” shall mean any lien, encumbrance, pledge, mortgage, security interest, claim under bailment, or storage contract.

“ LJR ” shall mean Lynch, Jones & Ryan, Inc., a Delaware corporation.

“ LJR Dividend ” shall be as defined in Section 6.2(d).

“ LJR Sale ” shall mean the disposition of LJR as contemplated in the LJR Sale Agreement.

“ LJR Sale Agreement ” shall mean either (a) the purchase and sale agreement, dated as of April 22, 2005, by and between the Company and The Bank of New York, or (b) another agreement for the sale or other disposition of the capital stock of LJR, whether by merger, spin-off, sale or other extraordinary transaction, at a no less favorable price and on no less favorable terms to the Company and the Company Subsidiaries with respect to the obligations of the Company after the closing thereunder than those provided for in such purchase and sale agreement described in clause (a) above.

“ Material Contracts ” shall be as defined in Section 4.13(a).

“ Merger ” shall be as defined in the Recitals.

“ Merger Consideration ” shall be as defined in Section 3.1(b).

“ Merger Sub ” shall be as defined in the Preamble.

“ Multiemployer Plan ” means any “multiemployer plan” within the meaning of Section 3(37) of ERISA that is subject to ERISA.

“ Multiple Employer Plan ” shall mean a pension plan subject to ERISA that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA.

“ NASD ” shall mean the National Association of Securities Dealers, Inc.

“ New Savings Plan ” shall be as defined in Section 6.7(c).

“ Paying Agent ” shall be as defined in Section 3.2(a).

“ Performance Plan ” shall be as defined in Section 6.7(e).

“ Permits ” shall mean any and all permits, authorizations, approvals, registrations, certificates, orders, waivers, variances or other approvals and licenses relating to compliance with any Applicable Law.

“ Permitted Liens ” shall mean (a) Liens for Taxes or governmental assessments, charges or claims the payment of which is not yet due, or for Taxes the validity of which are being contested in good faith; (b) Liens of carriers, warehousemen, mechanics, materialmen and other similar persons and other Liens imposed by Applicable Laws incurred in the ordinary

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course of business for sums not yet delinquent or being contested in good faith; (c) Liens disclosed on the consolidated balance sheet of the Company as of December 31, 2004 or notes thereto or securing liabilities reflected on the consolidated balance sheet of the Company as of December 31, 2004; and (d) other immaterial Liens incurred in the ordinary course of business which do not, individually or in the aggregate, materially impair use of the related asset as presently used in the business of the Company and the Company Subsidiaries.

“ Person ” shall mean an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity.

“ Proxy Statement ” shall be as defined in Section 6.10(b).

“ Required Buyer Regulatory Approvals ” shall be as defined in Section 5.3(b).

“ Required Company Regulatory Approvals ” shall be as defined in Section 4.6(b).

“ Required Regulatory Approvals ” shall be as defined in Section 5.3(b).

“ Reuters ” shall mean Reuters Group plc.

“ Reuters Plans ” shall be as defined in Section 4.12(b).

“ SEC ” shall mean the Securities and Exchange Commission.

“ Section 262 ” shall be as defined in Section 3.1(b).

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Self-Regulatory Organization ” shall mean the NASD, any domestic or foreign securities exchange, commodities exchange, registered securities association, the Municipal Securities Rulemaking Board, National Futures Association, and any other board or body, whether United States or foreign, that is charged with the supervision or regulation of brokers, dealers, commodity pool operators, commodity trading advisors or future commission merchants.

“ Severance Benefits ” shall mean any and all liabilities in respect of severance, redundancy and similar pay and benefits, salary continuation, and similar obligations, relating to the termination or alleged termination of employment, whether arising under an Employment Agreement, a Company Benefit Plan, Applicable Laws, or otherwise.

“ Shares ” shall be as defined in Section 3.1(b).

“ SLP ” shall mean Silver Lake Management Company, L.L.C.

“ Subsidiary ” of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person.

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“ Superior Proposal ” shall be as defined in Section 6.11(g)(ii).

“ Support Agreement ” shall be as defined in the Recitals.

“ Surviving Corporation ” shall be as defined in Section 2.1.

“ Systems ” shall mean all computer hardware, software and information systems used in or necessary for the operation of, in the case of the ECN Entities, the Business and, in the case of the VAB Subsidiaries, the VAB Business.

“ Tax ” shall mean all taxes imposed by or payable to any U.S. federal, state, local, foreign or other Tax Authority, including all income, gross receipts, gains, profits, windfall profits, gift, severance, ad valorem, capital, social security, unemployment disability, premium, recapture, credit, excise, property, sales, use, occupation, service, service use, leasing, leasing use, value added, transfer, payroll, employment, withholding, estimated, license, stamp, franchise or similar taxes of any kind whatsoever, including interest, penalties or additions thereto.

“ Tax Authority ” shall mean any Authority or quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax.

“ Tax Return ” shall mean any report, return, document, declaration or other information (and any supporting schedules or attachments thereto) required to be supplied to any Tax Authority or jurisdiction with respect to Taxes (including any returns or reports filed on a consolidated, unitary, or combined basis) (collectively, “returns”), amended returns and claims for refund.

“ Termination Date ” shall mean the date which is the first anniversary of the date of this Agreement.

“ Termination Fee ” shall be as defined in Section 8.6(a).

“ Transaction Liabilities ” shall mean the (a) liabilities, if any, of the Company and its controlled Affiliates for fees and expenses of investment bankers, attorneys, accountants and other consultants and advisors incurred in connection with the transactions contemplated by this Agreement or any transactions considered by the Company or any Company Subsidiary as alternatives to the Merger, including the LJR Sale, that arise from or relate to arrangements, agreements or commitments entered into or made by the Company or its controlled Affiliates prior to the Effective Time and (b) liabilities, if any, of the Company and its Subsidiaries arising from or relating to any Actions brought by any Person or Authority relating to the Transactions to which the Company is a party.

“ Transactions ” shall mean this Agreement, the transactions contemplated by this Agreement (including the Merger) and the VAB Purchase (assuming that the VAB Purchase is consummated immediately after the Merger), and the transactions contemplated by the VAB Transaction Agreement which are set forth on Section 1.3 of the Company Disclosure Schedule.

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“ 2005 Annual Bonus ” shall be as defined in Section 6.7(a)(ii).

“ 2005 Annual Bonus Amount ” shall be as defined in Section 6.7(a)(ii).

“ 2006 Annual Bonus ” shall be as defined in Section 6.7(a)(ii).

“ 2006 Annual Bonus Amount ” shall be as defined in Section 6.7(a)(ii).

“ VAB Acquisition Sub ” shall be as defined in the Recitals.

“ VAB Business ” shall mean the business of the VAB Subsidiaries as presently conducted.

“ VAB Corporate Subsidiaries ” shall be as defined in Section 4.11(f).

“ VAB Employee ” shall be as defined in Section 6.7(a)(iii).

“ VAB Purchase ” shall mean the purchase by SLP or one of its Affiliates from Buyer of all of the assets of the Company except for its equity interests in ECN Holdings.

“ VAB Subsidiaries ” shall mean each direct and indirect Subsidiary of the Company, other than the ECN Entities and LJR.

“ VAB Transaction Agreement ” shall be as defined in the Recitals.

“ Welfare Benefits ” shall be as defined in Section 6.7(b).

ARTICLE 2

THE MERGER

Section 2.1 The Merger . Upon the terms and subject to the conditions of this Agreement, and in accordance with the provisions of the Delaware General Corporation Law (the “ DGCL ”), Merger Sub shall be merged with and into the Company at the Effective Time. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall continue its existence as a wholly owned subsidiary of Buyer under the laws of the State of Delaware. The Company, in its capacity as the corporation surviving the Merger, is hereinafter sometimes referred to as the “ Surviving Corporation .”

Section 2.2 Closing; Effective Time . A closing (the “ Closing ”) shall be held at 9:00 a.m. at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52 ^nd Street, New York, N.Y. 10019, or such other place as the parties hereto may agree, on the first Business Day of the month following the month in which all conditions set forth in Article 7 (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or waived, or at such other date as Buyer and the Company may agree (such date, the “ Closing Date ”). As promptly as possible on the

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Closing Date, the parties hereto shall cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware (the “ Delaware Secretary of State ”) a certificate of merger (the “ Certificate of Merger ”) in such form as is required by and executed in accordance with Section 251 of the DGCL. The Merger shall become effective when the Certificate of Merger has been filed with the Delaware Secretary of State or at such later time as shall be agreed upon by Buyer and the Company and specified in the Certificate of Merger (the “ Effective Time ”).

Section 2.3 Effects of the Merger . From and after the Effective Time, the Merger shall have the effects set forth in Section 259 of the DGCL.

Section 2.4 Certificate of Incorporation and Bylaws . The Certificate of Merger shall provide that at the Effective Time, (a) the Company’s Certificate of Incorporation as in effect immediately prior to the Effective Time shall be the Surviving Corporation’s Certificate of Incorporation, and (b) Merger Sub’s Bylaws as in effect immediately prior to the Effective Time shall be the Surviving Corporation’s Bylaws; in each case, until amended in accordance with the DGCL.

Section 2.5 Directors and Officers of the Surviving Corporation . From and after the Effective Time, the officers of the Company shall be the officers of the Surviving Corporation and the directors of Merger Sub shall be the directors of the Surviving Corporation, in each case, until their respective successors are duly elected and qualified.

ARTICLE 3

CONVERSION OF SECURITIES

Section 3.1 Effect on Capital Stock . At the Effective Time, by virtue of the Merger and without any action on the part of Buyer, Merger Sub or the Company or their respective stockholders:

(a) Each share of common stock, $0.01 par value, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one fully paid and nonassessable share of common stock, $0.01 par value, of the Surviving Corporation. Such newly issued shares shall thereafter constitute all of the issued and outstanding Surviving Corporation capital stock.

(b) Subject to the other provisions of this Article 3, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (excluding any shares of Company Common Stock owned by Buyer, Merger Sub or the Company or any of their respective wholly owned Subsidiaries, which shares shall be cancelled and shall cease to exist with no payment being made with respect thereto and, subject to Section 3.1(d), any shares of Company Common Stock owned by stockholders properly exercising appraisal rights pursuant to Section 262 of the DGCL (“ Section 262 ”), as provided in Section 3.1(d)), together with the rights (the “ Company Rights ”) issued pursuant to the Rights Agreement, dated as of May 15, 2001, between the Company and Mellon Investor Services LLC, as rights agent, as amended (together, the “ Company Rights Plan ”) shall be converted into and represent the right to receive

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an amount in cash equal to the Merger Consideration, without interest. For purposes of this Agreement, “ Merger Consideration ” shall mean the quotient (to the nearest ten-thousandth) obtained by dividing (i) the sum of (u) $1,878,000,000 plus (v) the aggregate exercise price of all Company Options which both have an exercise price of less than the Merger Consideration (excluding from the calculation of Merger Consideration this clause (v) and clause (z) below for purposes of determining which Company Options have an exercise price that is less than the Merger Consideration) and are outstanding and vested immediately prior to the Effective Time, minus (w) 50% of the excess (such amount not to exceed $2,500,000), if any, of the Closing Transaction Liabilities over $19,400,000, minus (x) the LJR Dividend, if any, divided by (ii) the sum of (y) the number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (excluding any shares of Company Common Stock owned by Buyer, Merger Sub or the Company or any of their respective wholly owned Subsidiaries), plus (z) the number of shares of Company Common Stock issuable upon the exercise of Company Options which both have an exercise price of less than the Merger Consideration (excluding from the calculation of Merger Consideration clause (v) above and this clause (z) for purposes of determining which Company Options have an exercise price that is less than the Merger Consideration) and are outstanding and vested immediately prior to the Effective Time. At the Effective Time, all shares of Company Common Stock that have been converted into the right to receive the Merger Consideration as provided in this Section 3.1(b) (the “ Shares ”) shall no longer be outstanding and automatically shall be cancelled and shall cease to exist, and each holder of a certificate that immediately prior to the Effective Time represented such shares of Company Common Stock (a “ Certificate ”) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration.

(c) Each share of Company capital stock held in the treasury of the Company automatically shall be cancelled and retired and no payment shall be made in respect thereof.

(d) Notwithstanding anything in this Agreement to the contrary, the shares of Company Common Stock issued and outstanding immediately prior to the Effective Time that are held by any Company Stockholder that is entitled to demand and properly demands appraisal of shares of Company Common Stock pursuant to, and complies in all respects with, the provisions of Section 262 (the “ Appraisal Shares ”) shall not be converted into the right to receive the Merger Consideration as provided in Section 3.1(b), but, instead, such Company Stockholder shall be entitled to such rights (but only such rights) as are granted by Section 262. At the Effective Time, all Appraisal Shares shall no longer be outstanding and automatically shall be cancelled and shall cease to exist, and, except as otherwise provided by Applicable Laws, each holder of Appraisal Shares shall cease to have any rights with respect to the Appraisal Shares, other than such rights as are granted by Section 262. Notwithstanding the foregoing, if any such Company Stockholder shall fail to validly perfect or shall otherwise waive, withdraw or lose the right to appraisal under Section 262 or if a court of competent jurisdiction shall determine that such Company Stockholder is not entitled to the relief provided by Section 262, then the rights of such Company Stockholder under Section 262 shall cease, and such Appraisal Shares shall be deemed to have been converted at the Effective Time into, and shall have become, the right to receive the Merger Consideration as provided in Section 3.1(b) without interest. The Company shall give notice to Buyer as promptly as reasonably practicable of any demands for appraisal of any shares of Company Common Stock, and Buyer shall have the opportunity to participate in all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the

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Company shall not, without the prior written consent of Buyer and VAB Acquisition Sub, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. A portion of the funds delivered to the Paying Agent pursuant to Section 3.2(a) that are not distributed to holders of shares of Company Common Stock pursuant to this Article 3 because the holders thereof properly exercised and perfected their dissenters’ rights with respect thereto under the DGCL may be paid to the holders of Appraisal Shares upon written instruction from Buyer to the Paying Agent.

Section 3.2 Surrender and Payment . (a) Paying Agent; Exchange Fund . Prior to the Effective Time, for the benefit of the Company Stockholders, Buyer shall designate, or shall cause to be designated (pursuant to an agreement in form and substance reasonably acceptable to the Company), a bank or trust company that is reasonably satisfactory to the Company to act as agent for the payment of the Merger Consideration in respect of Certificates upon surrender of such Certificates in accordance with this Article 3 from time to time after the Effective Time (the “ Paying Agent ”). Promptly after the Effective Time, but in no event later than the next Business Day after the Closing Date, Buyer shall deposit, or cause Merger Sub to deposit, with the Paying Agent cash in an amount sufficient for the payment of the aggregate Merger Consideration pursuant to Section 3.1(b) (assuming no Appraisal Shares) upon surrender of such Certificates (such cash, the “ Exchange Fund ”). The Paying Agent shall invest any cash included in the Exchange Fund, as directed by Buyer, on a daily basis. Any interest and other income resulting from such investment shall be the property of, and shall be paid to, Buyer. Any portion of the Exchange Fund (including any interest and other income resulting from investments of the Exchange Fund) that remains undistributed to the Company Stockholders one year after the date of the mailing required by Section 3.2(b) shall be delivered to Buyer, upon demand by Buyer, and holders of Certificates that have not theretofore complied with this Section 3.2 shall thereafter look only to Buyer for payment of any claim to the Merger Consideration. If any Certificates shall not have been surrendered prior to such date on which any Merger Consideration would otherwise escheat to or become the property of any Authority, any such Merger Consideration, dividends or distributions in respect of such Certificate shall, to the extent permitted by Applicable Laws, become the property of Buyer, free and clear of all claims or interest of any person previously entitled thereto.

(b) Exchange Procedure . As promptly as reasonably practicable after the Effective Time, the Paying Agent shall and Buyer shall cause the Paying Agent to mail to each holder of record of a Certificate (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates held by such Company Stockholder shall pass, only upon proper delivery of the Certificates to the Paying Agent and shall be in such form and have such other customary provisions as Buyer may reasonably specify), and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Buyer, together with such letter of transmittal, duly completed and validly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be paid in exchange therefor the amount of cash into which the shares of Company Common Stock formerly represented by the Certificate shall have been converted pursuant to Section 3.1(b), and the Certificate so surrendered shall be cancelled. In the event of a transfer of ownership of Company Common Stock that is not registered in the stock transfer books of the Company, the proper amount of

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cash may be paid in exchange therefor to a person other than the person in whose name the Certificate so surrendered is registered if the Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other Taxes required by reason of the payment to a person other than the registered holder of the Certificate or establish to the satisfaction of Buyer that the Tax has been paid or is not applicable. No interest shall be paid or shall accrue on the Merger Consideration.

(c) Stock Transfer Books . After the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Paying Agent for transfer or any other reason, they shall be cancelled and exchanged as provided in this Article 3.

(d) No Liability . To the fullest extent permitted by law, none of Buyer, Merger Sub, the Company or the Paying Agent shall be liable to any Person in respect of any cash properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(e) Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming a Certificate to be lost, stolen or destroyed and, if required by Buyer or the Surviving Corporation, the posting by such Person of a bond in such reasonable amount as Buyer or the Surviving Corporation may reasonably direct as indemnity against any claim that may be made against it with respect to the Certificate, the Paying Agent shall pay in respect of the lost, stolen or destroyed Certificate the Merger Consideration.

(f) No Further Ownership Rights in Company Common Stock . The Merger Consideration paid in accordance with the terms of this Article 3 in respect of Certificates that have been surrendered in accordance with the terms of this Agreement shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock represented thereby.

(g) Withholding Rights . Each of the Surviving Corporation and Buyer shall be entitled to deduct and withhold, or cause the Paying Agent to deduct and withhold, from the consideration otherwise payable pursuant to this Agreement to any Company Stockholders such amounts as it may be required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax law. To the extent that amounts are so withheld by the Surviving Corporation, Buyer or the Paying Agent, as the case may be, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Company Stockholders in respect of which the deduction and withholding was made by the Surviving Corporation, Buyer or the Paying Agent, as the case may be.

Section 3.3 Treatment of Stock Options . (a) At the Effective Time, each option to purchase a share of Company Common Stock (a “ Company Option ”), granted under the Company stock option plans in effect on the date of this Agreement, or otherwise, that is outstanding immediately prior to the Effective Time shall become immediately vested, and shall

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be converted into the right to receive, from Buyer or the Surviving Corporation, as soon as practicable following the Effective Time (and in any event, no later than 10 days following the Effective Time), an amount in cash (less any applicable withholding Taxes) equal to the product of (i) the excess, if any, of (A) the Merger Consideration over (B) the per share exercise price of Company Common Stock subject to such Company Option and (ii) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time.

(b) Subject to Section 3.3(a), the Company shall take any actions reasonably requested by Buyer to effectuate the vesting and termination of the Company Options, it being understood that the intention of the parties is that following the Effective Time no holder of a Company Option or any participant in any Company Benefit Plan or other employee benefit arrangement of the Company shall have any right thereunder to acquire any capital stock (including any “phantom” stock or stock appreciation rights) of the Company, the Surviving Corporation or VAB Acquisition Sub. Prior to the Effective Time, the Company shall deliver to the holders of Company Options appropriate notices, in form and substance reasonably acceptable to Buyer, setting forth such holders’ rights pursuant to this Agreement.

Section 3.4 Determination of the Transaction Liabilities . The Company shall deliver to Buyer and VAB Acquisition Sub, within two Business Days prior to the Closing, a statement (the “ Transaction Liabilities Statement ”) setting forth its good faith estimate of (a) each unpaid Transaction Liability as of the Closing Date, and (b) each Transaction Liability that has been paid prior to the Closing Date (the Transaction Liabilities contemplated by clauses (a) and (b), collectively, the “ Closing Transaction Liabilities ”). The Company shall (a) provide Buyer and VAB Acquisition Sub with supporting documentation evidencing the payment of each Transaction Liability listed on the Transactions Liabilities Statement as being paid and (b) at Buyer’s request, use reasonable best efforts to obtain certificates from any such service providers verifying any outstanding amounts.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in the Company Disclosure Schedule and other than with respect to LJR or the LJR Sale or any matters relating thereto (except as provided for in Section 4.28), the Company hereby represents and warrants to Buyer and Merger Sub as follows:

Section 4.1 Organization and Qualification . The Company (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (b) has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. The Company is duly qualified or licensed to do business and in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.

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Section 4.2 Authorization and Validity of Agreement . The Company has all requisite power and authority to execute this Agreement, to carry out and perform its obligations under this Agreement and, subject to the approval of this Agreement by the Company Stockholders, to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement, and the consummation of the Transactions, have been duly and validly authorized by all necessary action of the Company, subject to the adoption of this Agreement by the Company Stockholders and no other action on the part of the Company is necessary for the authorization, execution, delivery or performance by the Company of this Agreement and the consummation of the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Buyer and Merger Sub, constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms (except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).

Section 4.3 Subsidiaries . Each Subsidiary of the Company is listed on Section 4.3 of the Company Disclosure Schedule (a “ Company Subsidiary ”). Each Company Subsidiary is duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization and has all requisite corporate or other power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, and each Company Subsidiary is duly qualified or licensed to do business and in good standing in each jurisdiction in which the nature of the business conducted by such Company Subsidiary makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The outstanding shares of capital stock or other equity interests of each Company Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding (i) securities of any Company Subsidiary convertible into or exchangeable for shares of capital stock or voting securities of any Company Subsidiary, or (ii) options or other rights to acquire from any Company Subsidiary, or other obligations of any Company Subsidiary to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any Company Subsidiary. The capital stock or equity interests of any Company Subsidiary are not subject to preemptive or similar rights. Section 4.3 of the Company Disclosure Schedule sets forth, for each Company Subsidiary, (A) the authorized capital stock, (B) the number of issued and outstanding shares of capital stock or other equity interests and (C) the holders of such capital stock or equity interests and the amounts held by such holders. Section 4.3 of the Company Disclosure Schedule sets forth any capital stock or other equity interests of any other Person owned by the Company or any Company Subsidiary (other than in connection with the ordinary course of operation of its brokerage business).

Section 4.4 Capitalization . (a) The authorized capital stock of the Company consists of (i) 950,000,000 shares of Company Common Stock, of which, as of March 31, 2005, 338,510,768 were issued and outstanding and 6,510,925 were performance shares, and (ii) 200,000 shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding or reserved for issuance under any agreement, arrangement or understanding.

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(b) Each outstanding share of Company capital stock is duly authorized and validly issued, fully paid and non-assessable and not subject to any preemptive or similar rights. Other than as set forth in Section 4.4(a) of this Agreement or in Section 4.4(b) of the Company Disclosure Schedule, and except for 31,767,033 Company Options and 6,510,925 performance shares as of March 31, 2005, there are no (i) outstanding shares of Company capital stock or Company voting securities, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or (iii) options or other rights to acquire from the Company, or other obligations of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company. There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any of the securities of the Company.

Section 4.5 Financial Statements . (a) The Company has delivered to Buyer the audited financial statements as set forth on Section 4.5(a) of the Company Disclosure Schedule (each, together with the notes thereto, an “ Entity Financial Statement ,” and, collectively, the “ Financial Statements ”).

(b) Each Entity Financial Statement is based on the books and records of the entity to which it relates, and fairly presents in all material respects the financial condition and results of operations and cash flows of the entity to which it relates, in accordance with GAAP, as of the respective dates and for the respective periods indicated therein.

Section 4.6 No Violation; Consents and Approvals . (a) The execution, delivery and performance of this Agreement and the VAB Transaction Agreement by the Company (and in the case of the VAB Transaction Agreement, as if the Company were Merger Sub thereunder) and, assuming termination or expiration of applicable waiting periods under the HSR Act and receipt of the Required Company Regulatory Approvals, the consummation of the Transactions do not and will not violate, conflict with or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in termination of, or accelerate the performance required by, or result in a right of consent, termination or acceleration under, or require any offer to purchase or any prepayment of any debt or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company or a Company Subsidiary under any of the terms, conditions or provisions of (i) the certificate of incorporation or by-laws or other similar organizational documents of the Company or any Company Subsidiary, (ii) any Applicable Laws, or (iii) any Material Contract, other than, in the case of clause (ii) above, such violations, conflicts, breaches, defaults, terminations, accelerations, offers, prepayments or creations of liens, security interests or encumbrances that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or would not prevent the consummation of the Transactions.

(b) Except for (i) filings by the Company required by the HSR Act and (ii) the filings with and receipt of approvals from the Authorities listed on Section 4.6(b) of the Company Disclosure Schedule (such filings and approvals, the “ Required Company Regulatory Approvals ”), no declaration, filing or registration with, or notice to, or authorization, consent or approval of, any Authority is necessary for the execution and delivery of this Agreement and the VAB Transaction Agreement by the Company (and in the case of the VAB Transaction

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Agreement, as if the Company were Merger Sub thereunder) or the consummation by the Company, the Surviving Corporation or any Company Subsidiary, as the case may be, of the Merger or the VAB Purchase, other than such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not made or obtained, as the case may be, would not prevent the Company from performing its obligations under this Agreement or the VAB Transaction Agreement or would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect and other than such declarations, filings, registrations, notices, authorizations, consents or approvals which are required or become applicable due to the nature or status of, or actions taken by, Buyer, Merger Sub, VAB Acquisition Sub or their respective Affiliates.

Section 4.7 Absence of Certain Changes or Events . Since December 31, 2004, (i) no event or change has occurred which, individually or in the aggregate, has had or is highly likely to have a Company Material Adverse Effect or which would materially delay or prevent the Company from consummating the Transactions, and (ii) the Company and each Company Subsidiary have, in all material respects, carried on their business in the ordinary course consistent with past practice, except as otherwise contemplated or permitted by this Agreement. From December 31, 2004 through the date hereof, the Company has not (a) declared, set aside or paid any dividends on or made any other distributions in respect of any of its capital stock, (b) purchased, redeemed or acquired any shares of its capital stock, except upon the exercise of Company Options or the vesting of performance share awards in accordance with their present terms, or (c) together with the Company Subsidiaries, made capital expenditures in excess of $10,000,000 in the aggregate.

Section 4.8 Legal Proceedings . There is no Action pending against or, to the Company’s Knowledge, threatened against or affecting, the Company or any Company Subsidiary or any of their respective properties before any Authority which is, individually or in the aggregate, material to either the Business (with respect to Actions relating to the Business) or the VAB Business (with respect to Actions relating to the VAB Business). There is no Judgment currently outstanding against the Company or any Company Subsidiary, or by which the property or business of the Company or any Company Subsidiary is or was involved or affected.

Section 4.9 Compliance with Applicable Laws and Permits; Regulatory Registrations and Memberships . (a) Except as is not and would not reasonably be expected to be, individually or in the aggregate, material to either the Business (with respect to such compliance, Permits and filings relating to the Business) or the VAB Business (with respect to such compliance, Permits and filings relating to the VAB Business), since January 1, 2002, (i) the Company and the Company Subsidiaries are in compliance with all Applicable Laws and material Permits, (ii) all Permits currently used by the Company or the Company Subsidiaries are in full force and effect, and (iii) the Company and the Company Subsidiaries have, to the extent required, made all filings necessary to request the timely renewal or issuance of all Permits prior to the Closing for the Company or the Company Subsidiaries to own, operate and maintain their assets and to conduct their businesses as they are currently being conducted. The Company and the Company Subsidiaries have, since January 1, 2002, filed all registrations, reports, notices, forms or other filings required by any Authority, except where failure to do is not, and would not reasonably be expected to be, individually or in the aggregate, material to either the Business (with respect to matters applicable thereto) or the VAB Business (with respect to matters applicable thereto). As of their respective dates, all such registrations, reports, notices, forms or other filings complied with all Applicable Laws in all material respects.

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(b) Except as is not and would not reasonably be expected to be, individually or in the aggregate, material to either the Business (with respect to matters applicable thereto) or the VAB Business (with respect to matters applicable thereto), none of the Company, the Company Subsidiaries or, to the Company’s Knowledge, their respective directors, officers, managers, employees or other agents or representatives:

(i) since January 1, 2002, has received any written notification or communication from any Authority (A) asserting that any such Person is not in compliance in all material respects with any material Applicable Law, or has otherwise engaged in any unlawful business practice, (B) threatening to suspend, modify the terms of or revoke any such Person’s material Permit, franchise, seat or membership in any securities exchange, commodities exchange or Self-Regulatory Organization, or governmental authorization, (C) requiring any such Person to enter into a cease and desist order, acceptance, waiver and consent agreement or memorandum of understanding (or requiring the managers thereof to adopt any resolution or policy), (D) restricting or disqualifying such Person’s activities (except for restrictions generally imposed by (1) any rule, regulation or administrative policy on brokers or dealers generally or (2) a Self-Regulatory Organization), or (E) that such Person is the subject of any Action;

(ii) is aware of any pending or threatened Action by any Authority against the Company, any Company Subsidiary, or, to the Company’s Knowledge, any manager, officer, director, employee, agent or representative thereof;

(iii) since January 1, 2002, has been nor currently is, nor is any Affiliate thereof, subject to a “statutory disqualification” as defined in Section 3(a)(39) of the Exchange Act or a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of any broker-dealer as a broker-dealer, “electronic communications network” (as defined under Rules 11Ac1-1 and 11Ac1-4 under the Exchange Act), “alternative trading system” (as defined in Rule 300 of Regulation ATS under the Exchange Act), municipal securities dealer, government securities broker or government securities dealer under Section 15, Section 15B or Section 15C of the Exchange Act, and, to the Company’s Knowledge, there is no reasonable basis for a proceeding or investigation, whether formal or informal, preliminary or otherwise, that is reasonably likely to result in any such censure, limitation, suspension or revocation;

(iv) since January 1, 2002, has been nor currently is required to be registered as a broker-dealer, investment company, investment adviser, securities exchange, electronic communications network, alternative trading system, commodity trading advisor, commodity pool operator, clearing agency, municipal securities dealer, government securities dealer, futures commission merchant or exchange or transfer agent under any Applicable Law and is not so registered;

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(v) since January 1, 2002, has failed to be registered, licensed or qualified where required to be registered, licensed or qualified as a broker-dealer with the SEC, the securities commission of any state or foreign jurisdiction or any Authority and is duly registered, licensed or qualified as such where required and such registrations are in full force and effect; or

(vi) since January 1, 2002, has been the subject of any written customer complaint involving an amount exceeding, individually, $500,000.

(c) The Company Broker-Dealer Subsidiaries are registered with the SEC as broker-dealers under Section 15(b) of the Exchange Act and in good standing with the NASD or other applicable Self-Regulatory Organization. Section 4.9(c) of the Company Disclosure Schedule sets forth the jurisdictions in which each Company Broker-Dealer Subsidiary is registered as a broker-dealer. Other than the Company Broker-Dealer Subsidiaries, neither the Company nor any Company Subsidiary is required to be registered with the SEC as a broker-dealer under Section 15(b) of the Exchange Act.

(d) Section 4.9(d) of the Company Disclosure Schedule lists all of the Self-Regulatory Organizations of which the Company or any Company Subsidiary is a member.

(e) Each of the Company Broker-Dealer Subsidiaries is in compliance in all material respects with Regulation T of the Board of Governors of the Federal Reserve System, NASD Rule 2520 and the margin rules or similar rules of any Self-Regulatory Organization of which it is a member, including rules governing the extension or arrangement of credit to customers. Other than the Company Broker-Dealer Subsidiaries, none of the Company or the Company Subsidiaries has or does extend or arrange credit for any customer within the meaning of Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

(f) Company ATS has received a “no action” letter from the Division of Market Regulation of the SEC confirming, based on the facts set forth in such letter, that the electronic communications network operated by Company ATS is an “electronic communications network” as defined under the Exchange Act and that the Division of Market Regulation will treat the participants in such electronic communications network as in compliance with paragraph (c)(5)(i)(A) of Rule 11Ac1-1 because such electronic communications network satisfies the requirement of paragraph (c)(5)(ii) of such Rule. The facts recited in such no-action letter relating to the electronic communications network of Company ATS have been at all times and currently are true and correct in all material respects. Neither the Company nor any Company Subsidiary is aware of any facts or circumstances that are reasonably likely to result in such no-action letter being revoked, withdrawn, superseded or suspended in whole or material part.

(g) Each of the Company Broker-Dealer Subsidiaries is in compliance with all applicable regulatory capital requirements and no distribution of cash from a Company Broker-Dealer Subsidiary after the date hereof, where such action occurs prior to the Closing, will result

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in such Company Broker-Dealer Subsidiary not being in compliance with applicable regulatory capital requirements. Section 4.9(g) of the Company Disclosure Schedule sets forth, with respect to each of the Company Broker-Dealer Subsidiaries, the required capital for such Company Broker-Dealer Subsidiary as of February 28, 2005 and the actual capital of such Company Broker-Dealer Subsidiary as of February 28, 2005.

Section 4.10 No Undisclosed Liabilities . Except for liabilities (a) set forth, accrued, reserved or otherwise reflected in the Financial Statements (or referred to in the notes thereto), (b) permitted or contemplated by this Agreement or set forth or referred to in the Company Disclosure Schedule or (c) incurred in the ordinary course of business consistent with past practice since December 31, 2004, neither the Company nor any Company Subsidiary has (i) any liabilities of a nature required to be set forth or reflected in a consolidated balance sheet of the Company prepared in accordance with GAAP or (ii) as of the date hereof, any other liabilities material to the Business (with respect to the liabilities relating to such business) or the VAB Business (with respect to the liabilities relating to such business), and as of the Closing, any other liabilities which are reasonably expected to be material to the Company and the Company Subsidiaries, taken as a whole.

Section 4.11 Taxes .

(a) The Company and each Company Subsidiary has duly and timely filed all material Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate in all material respects. The Company and each Company Subsidiary has paid all material Taxes required to be paid by it, and has withheld and paid all material Taxes that it was required to withhold and pay from amounts owing to any employee, creditor or third party. There are no pending or, to the Company’s Knowledge, threatened audits, examinations, investigations, deficiencies, claims or other proceedings in respect of Taxes relating to the Company or any Company Subsidiary, and no Closing Agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign law) has been entered into by or with respect to the Company or any of the Company Subsidiaries. There are no material Liens for Taxes upon the assets of the Company or any Company Subsidiary, other than Liens for current Taxes not yet due and Liens for Taxes that are being contested in good faith by appropriate proceedings.

(b) Neither the Company nor any Company Subsidiary has requested any extension of time within which to file any Tax Returns in respect of any taxable year that have not since been filed, nor made any request for waivers of the time to assess any Taxes that are pending or outstanding. The consolidated U.S. federal income Tax Returns of the Company have been examined, or the statute of limitations has closed, with respect to all taxable years through and including 1999.

(c) Neither the Company nor any Company Subsidiary has any liability for Taxes of any Person (other the Company or any Company Subsidiary) under Treasury Regulation Section 1.1502-6 (or any comparable provision of U.S. state or local or foreign law). Neither the Company nor any Company Subsidiary is a party to any agreement (with any Person other than the Company and/or any Company Subsidiary) relating to the allocation or sharing of Taxes. No jurisdiction where the Company and each of the Company Subsidiaries does not file a Tax Return has made a claim in writing that either the Company or any of the Company Subsidiaries is required to file a Tax Return in such jurisdiction.

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(d) Since December 31, 2004, other than in the ordinary course of business and consistent with past practice or as contemplated by this Agreement, neither the Company nor any of the Company Subsidiaries has (i) incurred any material liability for Taxes, (ii) made or changed any election or method of accounting concerning any material Taxes, (iii) filed any amended Tax Return, (iv) settled any material Tax claim or assessment or (v) surrendered any right to claim a refund of any material amount of Taxes.

(e) None of the Company or any of the Company Subsidiaries has agreed to make any adjustment under Section 481(a) of the Code (or any similar provision of state, local or foreign law) by reason of a change in accounting method or otherwise for any taxable year for which the statute of limitations has not yet expired. Neither the Company nor any of the Company Subsidiaries, as a result of any agreement with a Tax Authority, will be required to include any material item of income in, or exclude any material Tax credit or item of deduction from, any taxable period beginning on or after the Closing Date. Neither the Company nor any of the Company Subsidiaries has participated, within the meaning of Treasury regulation Section 1.6011-4(c) in (i) any “reportable transaction” within the meaning of Section 6011 of the Code and the Treasury regulations promulgated thereunder or comparable provisions of state law, (ii) any “confidential corporate tax shelter” within the meaning of Section 6111 of the Code and the Treasury regulations promulgated thereunder or comparable provisions of state law, or (iii) any “potentially abusive tax shelter” within the meaning of Section 6112 of the Code and the Treasury regulations promulgated thereunder or comparable provisions of state law.

(f) The sum of the adjusted tax basis of (i) the assets of Instinet LLC and Instinet Group LLC and (ii) the stock of the VAB Subsidiaries that are characterized as corporations for U.S. federal income tax purposes and LJR (the “ VAB Corporate Subsidiaries ”) is not less than the sum of $207,500,000 plus the gross proceeds received by the Company from the LJR Sale. The adjusted tax basis of the stock of each VAB Corporate Subsidiary is not materially greater than the adjusted tax basis of the assets of such VAB Corporate Subsidiary.

(g) Neither the Company nor any Company Subsidiary has constituted either a “distributing corporation” or a “controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code in a distribution qualifying (or intending to qualify) under Section 355 of the Code (or Section 356 to the extent Section 356 relates to Section 355) in the two years prior to the date of this Agreement.

Section 4.12 Employee Matters . (a) Section 4.12(a) of the Company Disclosure Schedule contains a true and complete list of all Company Benefit Plans and Employment Agreements and the Company has made available to Buyer and VAB Acquisition Sub true and complete copies of each material Company Benefit Plan and Employment Agreement.

(b) There does not exist, nor do any circumstances exist that would reasonably be expected to result in, any liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, or (iv) any Benefit Plan either currently or formerly

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maintained or contributed to by Reuters Group PLC or any Affiliate for the benefit of current or former Company Employees (collectively, the “ Reuters Plans ”), in each case, that could reasonably be expected to be a liability of the Company or any Company Subsidiary following the Closing.

(c) With respect to each Company Benefit Plan that is a pension plan that is maintained for the benefit of Company Employees who are located outside of the United States, the present value of accrued benefits under such plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such plan’s actuary with respect to such plan did not exceed, as of its latest valuation date, the then current value of the assets of such plan allocable to such accrued benefits.

(d) No Company Benefit Plan is subject to Title IV of ERISA or Section 412 of the Code.

(e) No Company Benefit Plan is a Multiemployer Plan or a Multiple Employer Plan.

(f) Neither the execution and delivery of this Agreement nor the consummation of the Transactions will (either alone or in conjunction with any other event such as termination of employment) (i) result in any material payment following the Closing becoming due to any Company Employee under any Company Benefit Plan or any Employment Agreement that could reasonably be expected to be a liability of the Company or any Company Subsidiary following the Closing, (ii) materially increase any benefits otherwise payable under any Company Benefit Plan or any Employment Agreement that could reasonably be expected to be a liability of the Company or any Company Subsidiary following the Closing or (iii) result in any acceleration of the time of payment, funding or vesting of any such benefits that could reasonably be expected to be a liability of the Company or any Company Subsidiary following the Closing.

(g) Each Company Benefit Plan has been materially (i) operated, (ii) established, (iii) administered, (iv) invested and (v) registered (where applicable) in accordance with its terms and Applicable Law, including but not limited to ERISA and the Code.

(h) Each Company Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified and the trusts maintained thereunder are exempt from taxation under Section 501(a) of the Code.

(i) There are no pending or, to the Company’s Knowledge, threatened claims by or on behalf of any Company Benefit Plan, by any employee or beneficiary covered under any such Company Benefit Plan, or otherwise involving any such Company Benefit Plan (other than routine claims for benefits). There are no material pending or, to the Company’s Knowledge, material threatened claim