AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

among

THE NASDAQ STOCK MARKET, INC.,

PINNACLE MERGER CORPORATION,

PHILADELPHIA STOCK EXCHANGE, INC.,

and

CITADEL DERIVATIVES GROUP LLC

Dated as of November 6, 2007

TABLE OF CONTENTS

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of November 6, 2007, among The Nasdaq Stock Market, Inc., a Delaware corporation (“ Parent ”), Pinnacle Merger Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“ Merger Sub ”), Philadelphia Stock Exchange, Inc., a Delaware corporation (the “ Company ”), and Citadel Derivatives Group LLC, as representative of the Company’s stockholders (the “ Stockholder Representative ”).

RECITALS

WHEREAS, the respective Boards of Directors of each of Parent and Merger Sub and Board of Governors of the Company have, by resolutions duly adopted, declared that the merger of Merger Sub with and into the Company (the “ Merger ”), upon the terms and subject to the conditions set forth in this Agreement, and the other transactions contemplated by this Agreement are advisable, and have approved and adopted this Agreement;

WHEREAS, as an essential condition and inducement to Parent to enter into this Agreement, certain stockholders of the Company are concurrently herewith entering into voting agreements in connection with the Merger in the form attached hereto as Exhibit A (the “ Voting Agreements ”), which Voting Agreements ensure the Company Requisite Vote (as defined below) shall be obtained in accordance with Section 5.3 hereof unless such Voting Agreements shall have terminated, which termination shall occur as a result of the termination of this Agreement in accordance with its terms; and

WHEREAS, Parent, the Company and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.

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

ARTICLE 1

THE MERGER

1.1. The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Delaware General Corporation Law (the “ DGCL ”), at the Effective Time, Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”), and the separate corporate existence of the Company, with all its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger in accordance with the DGCL.

1.2. Closing . The closing of the Merger (the “ Closing ”) shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY at 9:00 a.m., New York City time, on the fifth business day following the day on which the last to be satisfied or waived of the conditions set forth in Article 6 (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived in accordance with this Agreement or at such other place and time or on such other date as the Company and Parent may agree in writing (the “ Closing Date ”).

1.3. Effective Time . Subject to the provisions of this Agreement, as soon as practicable following the Closing, the Company and Parent will cause a Certificate of Merger (the “ Certificate of Merger ”) to be executed, acknowledged and delivered to the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The Merger shall become effective on the date and time on which the Certificate of Merger shall have been filed with the Secretary of State of the State of Delaware or at such later date and time as may be agreed by the parties in writing and specified in the Certificate of Merger (the “ Effective Time ”).

1.4. Effects of the Merger . The Merger shall have the effects set forth in Section 259 of the DGCL.

1.5. Certificate of Incorporation . At the Effective Time, the Certificate of Incorporation of the Company (the “ Charter ”) shall, subject to the approval of the Securities and Exchange Commission (the “ SEC ”), be amended (the “ Amended Charter ”) pursuant to the Certificate of Merger as set forth in Exhibit B hereto and such Amended Charter shall be the Certificate of Incorporation of the Surviving Corporation until thereafter duly amended as provided therein or by applicable Laws.

1.6. The By-Laws . Concurrently with the Effective Time, the by-laws of the Company (the “ By-Laws ”) shall, subject to the approval of the SEC, be amended and restated in the form attached hereto as Exhibit C (the “ Amended By-Laws ”), and such Amended By-Laws shall be the by-laws of the Surviving Corporation until thereafter duly amended as provided therein or by applicable Laws.

1.7. Directors . The directors of Merger Sub immediately prior to the Effective Time shall be the initial governors of the Surviving Corporation, each to hold office in accordance with the organizational documents of the Surviving Corporation and applicable Laws until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the provisions of the organizational documents of the Surviving Corporation and applicable Laws.

1.8. Officers . The officers of Merger Sub immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation.

ARTICLE 2

EFFECT OF THE MERGER ON CAPITAL STOCK

2.1. Effect on Capital Stock . At the Effective Time, as a result of the Merger and without any action on the part of the holder of any capital stock of the Company or Merger Sub:

(a) Merger Consideration . Each share of Class B common stock, par value $0.01 per share, of the Company (each, a “ Class B Share ”), issued and outstanding immediately prior to the Effective Time (other than (x) Dissenting Shares and (y) any Class B Shares held in treasury by the Company or held by any direct or indirect Subsidiary of the Company, Parent or 

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Merger Sub (each such Class B Share described in this clause (y), an “ Excluded Share ”) (each such Class B Share not constituting an Excluded Share or Dissenting Share, an “ Outstanding Share ”)) shall be converted into the right to receive an amount in cash, without interest, equal to the Merger Consideration. At the Effective Time, all of the Class B Shares converted into the right to receive the Merger Consideration shall cease to be outstanding, shall be automatically cancelled and retired and shall cease to exist, and each certificate (a “ Certificate ”) that immediately prior to the Effective Time represented any of the Class B Shares (other than Excluded Shares and Dissenting Shares) shall thereafter represent only the right to receive the Merger Consideration to be paid in consideration therefor upon surrender of such Certificate in accordance with this Article 2. For purposes of this Agreement, (i) “ Merger Consideration ” shall mean the quotient of (A) (1) $652,000,000, plus (2) the Working Capital Surplus, if any, minus (3) the Working Capital Shortfall, if any, divided by (B) (1) the number of outstanding Class B Shares as of immediately prior to the Effective Time (other than Excluded Shares, but including, for the avoidance of doubt, Dissenting Shares), plus (2) the number of RSUs as of immediately prior to the Effective Time; (ii) “ Working Capital Shortfall ” means the positive difference, if any, between (A) the Target Working Capital, minus (B) the Closing Date Working Capital Estimate; and (iii) “ Working Capital Surplus ” means the positive difference, if any, between (A) the Closing Date Working Capital Estimate, minus (B) the Target Working Capital.

(b) Cancellation of Shares . Each Excluded Share shall, by virtue of the Merger, and without any action on the part of the holder thereof, cease to be outstanding, shall be cancelled and retired without payment of any consideration therefor and shall cease to exist. The one outstanding share of Series A Preferred Stock shall remain issued and outstanding and unaffected by the Merger.

(c) Merger Sub . At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock, par value $0.01 per share, 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, par value $0.01 per share, of the Surviving Corporation.

2.2. Payment of Cash for Class B Shares and RSUs .

(a) Disbursing Agent . Prior to the Closing Date, Parent shall designate a bank or trust company that is reasonably satisfactory to the Company to serve as the disbursing agent for the Merger Consideration and payments in respect of the RSUs (the “ Disbursing Agent ”). Prior to the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, Parent will deposit, or will cause to be deposited, with the Disbursing Agent cash in the aggregate amount sufficient to pay (i) the Closing Merger Consideration in respect of all Class B Shares outstanding immediately prior to the Effective Time (except as provided in Section 2.4) and (ii) any cash necessary to pay the Closing Merger Consideration in respect of the RSUs outstanding immediately prior to the Effective Time (such cash referred to in subsections (a)(i) and (a)(ii) being hereinafter referred to as the “ Exchange Fund ”). Pending distribution of the cash deposited with the Disbursing Agent, such cash shall be held in trust for the benefit of the holders of Class B Shares and RSUs outstanding immediately prior to the Effective Time and shall not be used for any other purposes; provided, however, that Parent may direct the Disbursing Agent to invest such cash in (i) obligations of or guaranteed by the United

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States of America or any agency or instrumentality thereof, (ii) money market accounts, certificates of deposit, bank repurchase agreements or banker’s acceptances of, or demand deposits with, commercial banks having a combined capital and surplus of at least $500,000,000, or (iii) commercial paper obligations rated P-1 or A-1 or better by Standard & Poor’s Corporation or Moody’s Investor Services, Inc. Any profit or loss resulting from, or interest and other income produced by, such investments shall be for the account of Parent. For purposes of this Agreement, “ Closing Merger Consideration ” shall mean the quotient of (A) (i) $652,000,000, plus (ii) the Working Capital Surplus, if any, minus (iii) the Working Capital Shortfall, if any, minus (iv) the Reconciliation Deposit, divided by (B) (i) the number of outstanding Class B Shares as of immediately prior to the Effective Time (other than Excluded Shares, but including, for the avoidance of doubt, Dissenting Shares), plus (ii) the number of RSUs as of immediately prior to the Effective Time.

(b) Payment Procedures .

(i) As promptly as practicable after the Effective Time, the Surviving Corporation shall send, or cause the Disbursing Agent to send, to each record holder of Class B Shares as of immediately prior to the Effective Time a letter of transmittal and instructions for exchanging their Class B Shares for the Closing Merger Consideration payable therefor. The letter of transmittal will be in customary form and will specify that delivery of Certificates will be effected, and risk of loss and title will pass, only upon delivery of the Certificates to the Disbursing Agent. Upon surrender of such Certificate(s) to the Disbursing Agent together with a properly completed and duly executed letter of transmittal and any other documentation that the Disbursing Agent may reasonably require, the record holder thereof shall be entitled to receive the Merger Consideration payable in exchange therefor, without interest. Until so surrendered and exchanged, each such Certificate shall, after the Effective Time, be deemed to represent only the right to receive the Merger Consideration in respect of such Certificate, and until such surrender and exchange, no cash shall be paid to the holder of such outstanding Certificate in respect thereof.

(ii) If payment is to be made to any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature (a “ Person ”) other than the registered holder of the Class B Shares formerly represented by the Certificate(s) surrendered in exchange therefor, it shall be a condition to such payment that the Certificate(s) so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such payment shall pay to the Disbursing Agent any applicable stock transfer taxes required as a result of such payment to a Person other than the registered holder of such Class B Shares or establish to the satisfaction of the Disbursing Agent that such stock transfer taxes have been paid or are not payable.

(c) Stock Transfer Books . After the Effective Time, there shall be no further transfers on the stock transfer books of the Company of the Class B Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation, Parent or the Disbursing Agent, such shares shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Article 2.

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(d) Termination of the Exchange Fund . If any cash deposited with the Disbursing Agent remains unclaimed twelve months after the Effective Time, such cash shall be returned to Parent or the Surviving Corporation upon demand, and any holder who has not surrendered such holder’s Certificate(s) for the Closing Merger Consideration payable in respect thereof prior to that time shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration. Notwithstanding the foregoing, none of Parent, Merger Sub, the Company, the Surviving Corporation, the Disbursing Agent or any of their respective directors, officers, employees and agents shall be liable to any holder of Certificates for an amount paid to a public official pursuant to any applicable unclaimed property laws. Any amounts remaining unclaimed by holders of Certificates as of the date on which such amounts would otherwise escheat to or become property of any Governmental Entity shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation on such date, free and clear of any claims or interest of any Person previously entitled thereto.

(e) Lost, Stolen or Destroyed Certificates . In the event that any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, in addition to the posting by such holder of any bond in such reasonable amount as the Surviving Corporation or the Disbursing Agent may direct as indemnity against any claim that may be made against the Surviving Corporation or the Disbursing Agent with respect to such Certificate, the Disbursing Agent will issue in exchange for such lost, stolen or destroyed Certificate the Closing Merger Consideration in respect thereof entitled to be received pursuant to this Agreement.

(f) Withholding Rights . Parent, the Surviving Corporation and the Disbursing Agent shall be entitled to deduct and withhold from the consideration otherwise payable to a holder of Class B Shares or RSUs pursuant to this Agreement any amounts required to be deducted and withheld with respect to the making of such payment under any applicable Tax Law. To the extent any amounts are so deducted and withheld under the Internal Revenue Code of 1986, as amended (the “ Code ”), Treasury Regulations promulgated under the Code, or any provision of state, local or foreign tax law, any amounts so deducted and withheld will be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

2.3. Treatment of Restricted Stock Units . As of the Effective Time, each RSU granted by the Company that is outstanding immediately prior to the Effective Time will be cancelled and extinguished as of the Effective Time, and the holder thereof will be entitled to receive from Parent and Merger Sub an amount in cash equal to the Merger Consideration without interest in the manner and at the times contemplated by this Agreement.

2.4. Dissenting Shares .

(a) Notwithstanding anything herein to the contrary, Class B Shares held by a holder who has properly demanded in writing appraisal for such Class B Shares in accordance with Section 262 (or any successor provision) of the DGCL (any such shares being referred to as “ Dissenting Shares ” until such time as such holder fails to perfect or otherwise loses or withdraws such holder’s appraisal rights under the DGCL with respect to such shares) shall not be converted into or represent the right to receive the applicable Merger Consideration specified

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in Section 2.1(a) or cash in lieu of fractional shares thereof or any dividends or other distributions but shall be entitled only to such rights as are granted by the DGCL to a holder of Dissenting Shares unless and until such shares cease to be Dissenting Shares.

(b) If any Dissenting Shares shall lose their status as such (through failure to perfect or otherwise), then, as of the later of the Effective Time or the date of loss of such status, such shares shall be thereupon be treated as though such shares had been converted into the Merger Consideration pursuant to Section 2.1(a) as of the Closing Date.

(c) Prior to the Effective Time, the Company shall give Parent prompt notice (and a copy thereof) of any written demand for appraisal, for payment or of objection to the Merger received by the Company prior to the Effective Time pursuant to the DGCL, any written withdrawal of any such demand and any other written demand, notice or instrument delivered to the Company prior to the Effective Time that relates to such a demand. The Company shall keep Parent reasonably informed with respect to all negotiations and proceedings with respect to any such demand and shall give Parent the opportunity to participate in all negotiations and proceedings with respect to any such demands. The Company shall not make any payment with respect to, or settle, offer to settle or otherwise negotiate, any such demands, in each such case without the prior written consent of Parent (such consent not to be unreasonably withheld) or unless required by any Law.

2.5. Adjustments to Prevent Dilution . In the event that, as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Company changes the number of Class B Shares prior to the Effective Time, the Merger Consideration shall be equitably adjusted.

2.6. Net Working Capital; Tax Gross Up Payments .

(a) Closing Determination . (i) Not more than seven (7) Business Days nor less than three (3) Business Days before the Closing Date, the Company shall, in good faith using then available financial information for the Company, prepare and deliver to Parent a separate report (the “ Estimated Closing Balance Sheet ”) setting forth an estimate of the Adjusted Working Capital as of the Effective Time on the Closing Date (the “ Closing Date Working Capital Estimate ”) and the calculation thereof, which amount shall be based on the estimated Current Assets and the estimated Current Liabilities as set forth on the Estimated Closing Balance Sheet. The Estimated Closing Balance Sheet shall be prepared in accordance with GAAP, consistently applied, and in accordance with the definition of “ Adjusted Working Capital ” and the parameters set forth in Section 2.6(a) of the Company Disclosure Letter. If (A) the Closing Date Working Capital Estimate exceeds the Target Working Capital, the aggregate Merger Consideration shall be increased on a dollar-for-dollar basis at Closing by the amount of such excess and (B) the Closing Date Working Capital Estimate is less than the Target Working Capital, the aggregate Merger Consideration shall be reduced on a dollar-for-dollar basis at Closing by the amount of such deficiency, with such increase or reduction to be allocated to Holders in with such Holder’s Pro Rata Share.

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(ii) Not more than seven (7) Business Days nor less than three (3) Business Days before the Closing Date, the Company’s outside auditors shall calculate and determine the amount of Severance Benefits Gross-Up Payments, Designated Tax Gross Up Payments and Excess Tax Gross Up Payments (and shall perform all such calculations and make all such determinations required in order to calculate and determine the amounts of Severance Benefits Gross-Up Payments, Designated Tax Gross Up Payments and Excess Tax Gross-Up Payments) in consultation with the Company and Parent, and shall take into account such information and analysis as the Company and Parent may provide. The determination of the amounts of Severance Benefits Gross-Up Payments, Designated Tax Gross Up Payments and Excess Tax Gross-Up Payments shall be made in accordance with Section 280G of the Code and the regulations thereunder and all present value calculations shall be made using the discount rates and methodology used for calculating present values under Section 280G of the Code. For purposes of this Agreement: (A) “ Excess Tax Gross-Up Payments ” means (1) the total present value (as of the Effective Time) of all “Tax Gross-Up Payments” (within the meaning of the Employment Agreements) that will be paid or are reasonably expected to be paid pursuant to the terms of the Employment Agreements, minus (2) the sum of (i) the lesser of (aa) the sum of all Designated Tax Gross-Up Payments with respect to individuals receiving Designated CIC Payments or (bb) $8,000,000; and (ii) the sum of all Severance Benefit Gross-Up Payments; (B) “ Designated Tax Gross-Up Payments ” means, with respect to any individual receiving a Designated CIC Payment, the total amount of the Tax Gross-Up Payments (within the meaning of the Employment Agreements) to be paid or reasonably expected to be paid, that is allocable to the individual’s Designated CIC Payment, with such allocable amount being determined based on the ratio of such Designated CIC Payment to the total present value (as of the Effective Time) of all “parachute payments” (within the meaning of Section 280G of the Code) to be made, or reasonably expected to be made, with respect to such individual in connection with the transactions contemplated by this Agreement; (C) “ Severance Benefit Gross-Up Payments ” means, with respect to any individual receiving Severance Benefits, the total amount of the Tax Gross-Up Payments (within the meaning of the Employment Agreements) to be paid or reasonably expected to be paid, that is allocable to the individual’s Severance Benefits, with such allocable amount being determined based on the ratio of such Severance Benefits to the total present value (as of the Effective Time) of all “parachute payments” (within the meaning of Section 280G of the Code) to be made, or reasonably expected to be made, with respect to such individual in connection with the transactions contemplated by this Agreement; (D) “ Severance Benefits ” means, the payments provided by reason of a termination without Cause or a termination by the Executive for Good Reason (each within the meaning of the Employment Agreements) (other than a termination without Cause directed before the Effective Time by the Company or a termination by the Executive for Good Reason based on grounds created by the Company before the Effective Time) under the Employment Agreement Severance Provisions; (E) “ Employment Agreement Severance Provisions ” means, (1) in the case of Meyer S. Frucher, Norman Steisel and William N. Briggs Jr., Section 5(b) of the Employment Agreements and (2) in the case of William H. Morgan and Thomas Wittman, Sections 6(a) and 6(b) of the Employment Agreements; and (F) “ Employment Agreements ” means, those Amended and Restated Executive Employment Agreements referenced in Section 2.6(f)(ii) of the Company Disclosure Letter.

(b) At the Effective Time, Parent shall withhold, from the amounts otherwise payable pursuant to Section 2.1(a), and deposit into a reconciliation fund (the “ Reconciliation

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Fund ”) with an escrow agent mutually acceptable to Parent and the Company (the “ Escrow Agent ”) on behalf of the holders of Outstanding Shares and the holders of RSU’s (together, the “ Holders “), an amount equal to $15,000,000 (the “ Reconciliation Deposit ”). The Reconciliation Fund shall be governed by the terms set forth in a reconciliation agreement in substantially the form attached hereto as Exhibit D (the “ Reconciliation Agreement ”) and the disposition of the Reconciliation Fund will be governed by the terms of this Agreement and the Reconciliation Agreement. Each Holder will be entitled to receive such Holder’s Pro Rata Share of any amounts that are released from the Reconciliation Fund to the Holders in accordance with the terms of this Agreement and the Reconciliation Agreement. “ Pro Rata Share ” means, with respect to each Holder, a fraction the numerator of which is the Merger Consideration to which such Holder is entitled under Section 2.1(a) or Section 2.3, and the denominator of which is the aggregate Merger Consideration.

(c) Post-Closing Determination . Within sixty (60) calendar days after the Closing Date, the Company’s outside auditors as of the Closing Date and the Stockholder Representative shall prepare and deliver to Parent an audited combined consolidated statement of Adjusted Working Capital as of the Effective Time on the Closing Date (the “ Closing Balance Sheet ”). The Closing Balance Sheet shall be prepared in accordance with GAAP, consistently applied, and in accordance with the definition of “ Adjusted Working Capital ” and the parameters set forth in Section 2.6(a) of the Company Disclosure Letter. Parent shall provide the Company’s outside auditors, the Stockholder Representative and his representatives reasonable access to the books and records and employees of the Company to the extent necessary for the preparation of the Closing Balance Sheet and shall cause the employees of the Company to cooperate with the Company’s outside auditors, the Stockholder Representative and his representative in connection with his preparation of the Closing Balance Sheet. Not later than thirty (30) calendar days following the date of receipt of the Closing Balance Sheet, Parent shall provide the Stockholder Representative with a notice (a “ Dispute Notice ”) listing those items, if any, to which Parent takes exception, which notice shall also (i) specifically identify, and provide a reasonably detailed explanation of (1) any deviation that Parent believes to exist between the methodology used to calculate the Closing Date Working Capital Estimate and the methodology used to calculate the Adjusted Working Capital as set forth in the Closing Balance Sheet and (2) any other basis upon which Parent has delivered such list, (ii) set forth the amount of Adjusted Working Capital that Parent has calculated based on the information contained in the Closing Balance Sheet and (iii) specifically identify Parent’s proposed adjustment(s) (the “ Proposed Adjustments ”). If Parent fails to deliver to the Stockholder Representative the Dispute Notice within thirty (30) calendar days following the date of receipt of the Closing Balance Sheet, Parent shall be deemed to have accepted the Closing Balance Sheet for the purpose of any purchase price adjustment under Section 2.6(d) hereof. Any items not disputed in the Dispute Notice shall be deemed to be accepted and agreed to by the Parent. If the Stockholder Representative does not give Parent notice of objections within thirty (30) calendar days following the date of receipt of the Dispute Notice, the Stockholder Representative shall be deemed to have accepted on behalf of the Holders the Proposed Adjustments for the purpose of any purchase price adjustment under Section 2.6(d) hereof. Any items not disputed shall be deemed to be accepted and agreed by the Stockholder Representative. If Stockholder Representative gives Parent notice of objections to the Proposed Adjustments, and if Parent and the Stockholder Representative are unable, within fifteen (15) calendar days after the date of receipt by Parent of the notice by the Stockholder Representative of objections, to resolve the

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disputed exceptions, such disputed exceptions will be referred to an accounting firm jointly selected by Parent and the Stockholder Representative) (the “ Independent Accounting Firm ”). The Independent Accounting Firm shall, within thirty (30) calendar days following the date of its selection, deliver to Parent and the Stockholder Representative a written report determining such disputed exceptions, and its determinations will be final, conclusive and binding upon Parent and each of the Holders for the purposes of any purchase price adjustment under Section 2.6(d) hereof. The fees and disbursements of the Independent Accounting Firm shall be paid by Parent in the same proportion that the aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully disputed by Parent (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted, and the balance shall be allocated equally to the Holders.

(d) Post-Closing Adjustment . The aggregate Merger Consideration shall be increased or decreased, as the case may be, on a dollar-for-dollar basis by an amount equal to the difference between the Closing Date Working Capital Estimate and the Adjusted Working Capital as determined in accordance with Section 2.6(c) above. If the Adjusted Working Capital exceeds the Closing Date Working Capital Estimate, the aggregate Merger Consideration shall be increased on a dollar-for-dollar basis by the amount of such excess and Parent shall pay such excess to the Holders in accordance with the terms of Section 2.6(e) below. If the Adjusted Working Capital is less than the Closing Date Working Capital Estimate, the aggregate Merger Consideration shall be reduced on a dollar-for-dollar basis by the amount of such deficiency and such deficiency shall be paid to Parent from the Reconciliation Amount. Within five (5) business days of the completion of any adjustments to the Reconciliation Fund contemplated in this Section 2.6(d) , the Escrow Agent shall distribute to each Holder such Holder’s Pro Rata Share of any amounts that are remaining in the Reconciliation Fund in accordance with the terms of this Agreement and the Reconciliation Agreement. For the avoidance of doubt, Parent’s recoveries pursuant to this Section 2.6 shall be limited to the amount in the Reconciliation Fund.

(e) Payment to Holders . If the Adjusted Working Capital exceeds the Closing Date Working Capital Estimate, the aggregate Merger Consideration shall be increased on a dollar-for-dollar basis by the amount of such excess, and Parent shall, within five (5) calendar days following the date of delivery of the final Closing Balance Sheet to Parent and the Stockholder Representative as contemplated by Section 2.6(c) above, (i) deposit such excess into the Reconciliation Fund (with the Reconciliation Amount adjusted upward to reflect the amount deposited) and (ii) direct that the Escrow Agent promptly distribute to each Holder such Holder’s Pro Rata Share of the Reconciliation Amount (as adjusted for the amount deposited pursuant to clause (i) hereof and after providing for the payment of any expenses of the Stockholder Representative contemplated in Section 2.7) in accordance with the terms of the Reconciliation Agreement.

(f) For the purposes of this Agreement:

“ Adjusted Working Capital ” means the Current Assets less the Current Liabilities, determined in accordance with GAAP, consistently applied.

“ Current Assets ” means the sum of (i) cash and cash equivalents, including restricted cash, (ii) accounts receivable, (iii) current deferred income taxes, (iv) prepaid and other

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assets, (v) investments available for sale at market, (vi) investments held to maturity at amortized cost, (vii) investments held to maturity at amortized cost — restricted and (viii) advance to clearing accounts, in each case as reflected on the Estimated Closing Balance Sheet or Closing Balance Sheet, as the context requires, determined in accordance with GAAP; provided that an amount equal to the cost, if any, of the “tail” policy contemplated by Section 5.9(c) paid by the Company shall be added to “Current Assets.”

“ Current Liabilities ” means the sum of (i) accounts payable and other liabilities, (ii) payment for order flow due to specialists, (iii) covered sale fee payable, (iv) deferred revenue and (v) deferred credits, in each case as reflected on the Estimated Closing Balance Sheet or Closing Balance Sheet, as the context requires, determined in accordance with GAAP; provided, that, for the avoidance of doubt “Current Liabilities” shall include (A) any accrued but unpaid fees and expenses owed by the Company or any of its Subsidiaries to investment bankers, attorneys, accountants and consultants related to the Merger and (B) any Excess Tax Gross Up Payments (regardless of whether any such Excess Tax Gross Up Payment constitutes a “current liability” within the meaning of GAAP); and provided further, that “Current Liabilities” shall not include any of the following: (w) the amount of “Change of Control Payments” made or to be made to each “Designated Person” pursuant to written agreements between such “Designated Persons” and the Company up to the maximum amounts, all as set forth in Section 2.6(f) of the Company Disclosure Letter (the “ Designated CIC Payments ”), (x) any Designated Stay Bonus Amounts, in each case to the extent properly included on the Estimated Closing Balance Sheet or the Closing Balance Sheet, as the context requires, (y) the amount of Designated Tax Gross Up Payments and Severance Benefits Gross Up Payments, and (z) the amount of any Severance Benefits that would otherwise constitute a “current liability” as of the Effective Time under GAAP.

“ Designated Stay Bonus Amounts ” means the aggregate amount of stay bonus payments to be paid pursuant to Stay Bonus Agreements entered into between the Company and employees of the Company or any of its Subsidiaries after the date of this Agreement that are specifically approved by Parent.

“ Target Working Capital ” means $17,000,000.

2.7. Stockholder Representative . The Holders by virtue of the approval of this Agreement, (i) shall be deemed to have consented to the deposit of the Reconciliation Deposit into the Reconciliation Fund pursuant to the terms of the Reconciliation Agreement, (ii) shall be deemed to have agreed that the Reconciliation Fund will be subject to provisions of Section 2.6, and (iii) shall be deemed to have irrevocably constituted and appointed the Stockholder Representative (together with his or her permitted successors) as their true and lawful agent and attorney-in-fact to enter into the Reconciliation Agreement, to exercise all or any of the powers, authority and discretion conferred on the Stockholder Representative under this Agreement or the Reconciliation Agreement, to waive or amend any terms and conditions of the Reconciliation Agreement, to give and receive notices on their behalf and to be their exclusive representative to the extent of their respective interests in the Reconciliation Fund with respect to any matter, suit, claim, action or proceeding arising with respect to any transaction contemplated by the Reconciliation Agreement, and the Stockholder Representative agrees to act as, and to undertake the duties and responsibilities of, such agent and attorney-in-fact. This power of attorney is

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coupled with an interest and is irrevocable. The Stockholder Representative, in connection with its obligations under this Agreement, the Reconciliation Agreement or any other agreement made in connection with the transactions contemplated by this Agreement, shall not be liable for any action taken or not taken or suffered by it in reliance upon any notice, direction, instruction, consent, statement or other document believed by it to be genuine and duly authorized, nor for any other action or inaction in the absence of his or her own gross negligence or willful misconduct. In all questions arising under this Agreement, the Reconciliation Agreement or any other agreement made in connection with the transactions contemplated by this Agreement, the Stockholder Representative may rely on the advice or opinion of counsel and independent accountants satisfactory to it, and for anything done, omitted or suffered in good faith by the Stockholder Representative based on such advice, the Stockholder Representative shall not be liable to any Person, including, without limitation, any Holder in its capacity as such. The Stockholder Representative shall have no duties or responsibilities other than those expressly set forth in this Agreement or the Reconciliation Agreement. The Stockholder Representative, acting as such under this Agreement or the Reconciliation Agreement, is not charged with knowledge of or any duties or responsibilities under, and shall not be bound by, any other document or agreement. The Stockholder Representative shall be entitled to be reimbursed, from the amounts available in the Reconciliation Fund, for all reasonable out-of-pocket documented charges and expenses incurred in good faith by the Stockholder Representative in connection with the performance of its duties as Stockholder Representative under this Agreement, the Reconciliation Agreement or any other agreement made in connection with the transactions contemplated by this Agreement or the Reconciliation Agreement, including, without limitation, attorneys fees, accountants’ fees and any amounts arising in respect of its indemnification obligations pursuant to Section 7(a) of the Reconciliation Agreement. If the Stockholder Representative shall be unable or unwilling to serve in such capacity (i) prior to the Effective Time, his or her successor shall be named by the Board of Governors or (ii) after the Effective Time, his or her successor shall be named by those Persons who held a majority of the Class B Shares immediately prior to the Effective Time, and, in either case, such successor shall serve and exercise the powers of Stockholder Representative hereunder.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the disclosure letter (subject to Section 8.13(c) of this Agreement) delivered to Parent by the Company prior to entering into this Agreement (the “ Company Disclosure Letter ”), the Company hereby represents and warrants to Parent and Merger Sub that:

3.1. Organization, Good Standing and Qualification . Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of the Company and its Subsidiaries is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so organized, validly existing, qualified or in good standing would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. The Company has made available to Parent complete and correct copies of the

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Company’s, and each of its Subsidiaries’ certificate of incorporation and by-laws, each as amended to date, and each as so delivered is in full force and effect. Section 3.1 of the Company Disclosure Letter contains a correct and complete list of all Subsidiaries of the Company, and each jurisdiction where the Company and each Subsidiary is organized and qualified to do business. As used in this Agreement, the term (i) “ Subsidiary ” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is directly or indirectly owned or controlled by such Person or by one or more of its respective Subsidiaries or by such Person and any one or more of its respective Subsidiaries, and (ii) “ Company Material Adverse Effect ” means: (x) any event, occurrence, fact, condition, change, or effect that is materially adverse to the financial condition, business or results of operations of the Company and its Subsidiaries taken as a whole, excluding any such event, occurrence, fact, condition, change or effect arising out of or relating to (A) the announcement or consummation of the Merger or any other transactions contemplated by this Agreement; (B) (1) any change in economic, business, regulatory or securities markets conditions generally, to the extent it does not disproportionately affect the Company and its Subsidiaries, taken as a whole, relative to the effect on other securities exchanges or other participants in the securities industry having operations similar to the Company’s operations that may be so affected; (2) any changes in any Laws, to the extent that they are not directed primarily at the Company or any of its Subsidiaries or the securities industry; or (3) any outbreak or escalation of hostilities or war or any act of terrorism to the extent such outbreak or escalation does not disproportionately affect the Company and its Subsidiaries, taken as a whole, relative to the effect on other securities exchanges or other participants in the securities industry having operations similar to the Company’s operations that may be so affected; (C) any action or omission by the Company or any of its Subsidiaries that is required by this Agreement; or (D) (1) the expenses actually incurred by the Company or any of its Subsidiaries in connection with this Agreement or the transactions contemplated hereby (including, without limitation, legal, investment banking, audit, Board of Governors and consulting fees) and (2) the estimated legal, investment banking, audit, Board of Governors and consulting expenses not actually incurred but reasonably expected to be incurred by the Company or any of its Subsidiaries in connection with this Agreement or the transactions contemplated hereby; or (y) an effect (other than caused by an action taken in response to an Acquisition Proposal as permitted by Section 5.2) that would prevent, materially delay or materially impair the ability of the Company to consummate the Merger and the other transactions contemplated by this Agreement.

3.2. Capital Structure . The authorized capital of the Company consists of 1,100,000 shares, consisting of (i) 1,000,000 shares of common stock, par value $0.01 per share, of which 50,500 shares of such common stock are designated as “ Class A Shares ” and 949,500 shares of such common stock are designated as Class B Shares (such Class B Shares, together with the Class A Shares, the “ Shares ”) and (ii) 100,000 shares of preferred stock, par value $0.01 per share (the “ Company Preferred Shares ”), of which one (1) share of such preferred stock is designated as “ Series A Preferred Stock .” As of the date hereof, no Class A Shares are issued and outstanding, 441,504 Class B Shares are issued and outstanding and one share of Series A Preferred Stock is issued and outstanding. The Subsidiaries of the Company hold no shares of capital stock of the Company, or securities or obligations convertible or exchangeable into or exercisable for such capital stock. All of the outstanding Shares and the Company Preferred Shares have been duly authorized and validly issued and are fully paid and nonassessable. The

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one share of Series A Preferred Stock is legally held by the Wilmington Trust Company, free and clear of any Lien, subject to applicable Laws and that certain Third Amended and Restated Trust Agreement, dated as of February 22, 2007. The Company has no Shares or Company Preferred Shares reserved for issuance, except that, as of the date hereof, there were an aggregate of 17,773 Shares issuable pursuant to grants under the Company’s 2005 Stock Incentive Plan (the “ Company Stock Plan ”). Section 3.2 of the Company Disclosure Letter contains a correct and complete list as of the date hereof of the number of shares of Company Common Stock subject to outstanding awards under the Company Stock Plan. Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries has been duly authorized and validly issued and is fully paid and nonassessable and, to the extent owned by the Company or by a direct or indirect wholly-owned Subsidiary of the Company, is owned free and clear of any lien, charge, pledge, security interest, claim or other encumbrance (each, a “ Lien ”). Except as set forth above, as of the date of this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Company or any of its Subsidiaries to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Upon any issuance of any Shares in accordance with the terms of the Company Stock Plans, such Shares will be duly authorized, validly issued, fully paid and nonassessable and free and clear of any Lien. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which obligations are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. Section 3.2 of the Company Disclosure Letter sets forth, for each Subsidiary of the Company, (i) the authorized capital stock, (ii) the number of issued and outstanding shares of capital stock or other equity interests and (iii) the holders of such capital stock or equity interests and the amounts held by such holders. Section 3.2 of the Company Disclosure Letter sets forth any capital stock or other equity interests of any other Person owned by the Company or any Subsidiary (other than in connection with the ordinary course of operation of its brokerage business). Section 3.2 of the Company Disclosure Letter contains a true and complete list of each Person in which the Company owns, directly or indirectly, any voting interest that may require a filing by Parent or any “ Affiliate ” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (the “ Exchange Act ”) of Parent under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”).

3.3. Corporate Authority; Approval and Fairness .

(a) The Company has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement and to consummate the Merger, subject only to the adoption of this Agreement by the affirmative written consent of the holders of a majority of the outstanding Class B Shares entitled to vote thereon (the “ Company Requisite Vote ”). The Company Requisite Vote is the only vote of the holders of capital stock of the Company required by the DGCL, the Charter, the By-Laws, or otherwise to adopt this Agreement or approve the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and is a valid and binding agreement of the Company enforceable against the Company in accordance with its

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terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “ Enforceability Exception ”).

(b) The Board of Governors of the Company, at a meeting duly called and held, has unanimously (among those voting) (i) declared and determined that the Agreement and the Merger and the other transactions contemplated hereby are advisable and in the best interests of the stockholders of the Company; (ii) approved this Agreement and the Merger; (iii) resolved to recommend that the holders of Class B Shares approve and adopt this Agreement and the Merger (such recommendations being the “ Governors’ Recommendation ”); and (iv) directed that this Agreement be submitted to the holders of Class B Shares for their approval and adoption. As of the date of this Agreement, the foregoing resolutions have not been subsequently rescinded, modified or withdrawn in any way.

(c) The Board of Governors of the Company shall have received an opinion of Greenhill & Co., LLC stating the opinion of Greenhill & Co., LLC that the Merger Consideration to be received by the holders of Outstanding Shares pursuant to this Agreement is fair, from a financial point of view, to such holders.

3.4. Governmental Filings; No Violations; Certain Contracts .

(a) Other than (i) the notices and/or filings pursuant to Section 1.3; (ii) the notices and/or filings under the HSR Act, the Securities Act of 1933, as amended (the “ Securities Act ”) and the Exchange Act, and the rules and regulations promulgated thereunder; (iii) the consents and approvals to be obtained from the SEC; (iv) the notices, filings, consents and/or approvals to be obtained from all Self-Regulatory Organizations (if any) or the Options Price Reporting Authority (“ OPRA ”) (if any); and (v) foreign approvals, state securities and “blue sky” laws, no notices, filings, consents, registrations, approvals, permits or authorizations are required to be made by the Company with, or obtained by the Company or any of its Subsidiaries from, any domestic or foreign governmental or regulatory authority, agency, commission, body, other than the Company or its Subsidiaries (each a “ Governmental Entity ”), Self-Regulatory Organization or OPRA in connection with the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated hereby. For the purposes of this Agreement, “ Self Regulatory Organization ” shall mean the NASD, any other U.S. or foreign commission, board, agency or body that is not a Governmental Entity but is charged with the supervision or regulation of brokers, dealers, futures commission merchants, securities underwriting or securities or futures trading, stock or options exchanges, commodity futures exchanges, ECNs, clearing houses, clearing organizations, quotation or other data vendors, insurance companies or agents, investment companies, commodity pool operators, commodity trading advisers or investment advisers.

(b) The execution, delivery and performance of this Agreement by the Company do not, the consummation by the Company of the Merger and the other transactions contemplated hereby and the execution, delivery and performance of the Voting Agreements by the parties thereto will not, constitute or result in (i) subject to the approval of the Amended Charter and Amended By-Laws by the SEC, a breach or violation of, or a default under, the

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Charter or By-laws of the Company, or the comparable governing documents of any of its Subsidiaries; (ii) with or without notice, lapse of time or both, a material breach or material violation of, a termination (or right of termination) or a material default under, the creation or acceleration of any obligations under or the creation of a Lien on any of the material assets of the Company or any of its Subsidiaries pursuant to any agreement, lease, license, contract, note, mortgage, indenture or other legally binding obligation (a “ Contract ”) which constitutes a Company Material Contract, binding upon the Company or any of its Subsidiaries or, assuming (solely with respect to performance of this Agreement and consummation by the Company of the Merger and the other transactions contemplated hereby) compliance with the matters referred to in Section 3.4(a), any Law or governmental or non-governmental License to which the Company or any of its Subsidiaries is subject; or (iii) any change in the rights or obligations of any party under any Company Material Contract binding upon the Company or any of its Subsidiaries (including, without limitation, any change in pricing, put or call rights, rights of first offer, rights of first refusal, tag-along or drag-along rights or any similar rights or obligations which may be exercised in connection with the Merger and the other transactions contemplated hereby). Section 3.4(b) of the Company Disclosure Letter sets forth a correct and complete list of the Company Material Contracts of the Company or any of its Subsidiaries pursuant to which consents or waivers are or may be required prior to consummation of the transactions contemplated by this Agreement.

3.5. Financial Statements .

(a) The Company has previously delivered to Parent true, correct and complete copies of (x) the audited balance sheets as of December 31, 2006 and 2005 and the related audited statements of income and cash flows for the twelve month periods ended December 31, 2006, 2005 and 2004 (including footnotes thereto) and (y) the unaudited balance sheets as of September 30, 2007 and the related unaudited statements of income and cash flows for the nine month period ended September 30, 2007 (collectively the “ Financial Statements ”).

(b) Each of the Financial Statements (including the related notes and schedules) fairly presents the consolidated financial position and results of operations of the Company and any other entity included therein and their respective Subsidiaries as of its date and for the periods set forth therein, in each case in accordance with U.S. generally accepted accounting principles (“ GAAP ”) consistently applied during the periods involved, except as may be noted therein and except that Financial Statements that are not annual Financial Statements do not contain footnotes and are subject only to normal and recurring year-end adjustments that have not been and could not reasonably be expected to be material to the Company and its Subsidiaries taken as a whole.

(c) Since December 31, 2006 (the “ Audit Date ”), (i) none of the Company, any of its Subsidiaries or, to the Company’s Knowledge, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls relating to periods after the Audit Date, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable

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accounting or auditing practices (except for any of the foregoing which have no reasonable basis), and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar material violation of applicable Law, relating to periods after the Audit Date, by the Company or any of its officers, directors, employees or agents to the Board of Governors of the Company or any committee thereof or, to the Company’s Knowledge, to any director or officer of the Company. The “ Company’s Knowledge ” shall mean the actual knowledge of the officers of the Company set forth on Section 3.5(c) of the Company Disclosure Letter, after reasonable inquiry.

3.6. Absence of Certain Changes . Except as disclosed in the Financial Statements, since the Audit Date, the Company and its Subsidiaries have, in all material respects, conducted their respective businesses only in, and have not engaged in any material transaction other than in accordance with, the ordinary course of such businesses, except as otherwise contemplated or permitted by this Agreement. Since the Audit Date, there has not been any Company Material Adverse Effect or any event, occurrence, discovery or development which would, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.

3.7. Litigation and Liabilities .

(a) Except as disclosed in the Financial Statements, there are no (i) civil, criminal or administrative actions, suits, claims, hearings, arbitrations or proceedings, including before any Governmental Entity, or injunctions or final judgments relating thereto, pending or, to the Company’s Knowledge, threatened against the Company or any of its Subsidiaries or (ii) to the Company’s Knowledge, any investigations pending or threatened against the Company or any of its Subsidiaries, in each case that could reasonably be expected to result in a material loss to the Company and its Subsidiaries taken as a whole (each, a “ Legal Action ”). None of the Company or any of its Subsidiaries is a party to or subject to the provisions of any judgment, order, writ, injunction, decree or award of any Governmental Entity which would, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. Section 3.7(a) of the Company Disclosure Letter sets forth a list of all Legal Actions pending against the Company or any of its Subsidiaries as of the date of this Agreement.

(b) There are no liabilities or obligations of the Company or any Subsidiary of the Company, whether or not accrued, contingent or otherwise and whether or not required to be disclosed, or any other facts or circumstances that would reasonably be expected to result in any obligations or liabilities of, the Company or any of its Subsidiaries, other than:

(i) liabilities or obligations to the extent reflected on the Financial Statements (or disclosed in the notes thereto);

(ii) liabilities or obligations incurred in the ordinary course of business since the Audit Date;

(iii) performance obligations under Contracts required in accordance with their terms, or performance obligations, to the extent required under applicable Laws, in each case to the extent arising after the date hereof; or

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(iv) liabilities or obligations that would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.

3.8. Employee Benefits .

(a) Section 3.8(a) of the Company Disclosure Letter contains a true and complete list of each material Company Plan. For purposes of this Agreement, “ Company Plan ” means each bonus, employment, retention, change in control, consulting, deferred compensation, incentive compensation, stock purchase, stock option, severance pay, medical, life or other insurance, welfare benefit, fringe benefit, profit-sharing, or pension plan, program, agreement or arrangement, and each other employee benefit or compensation plan, program, agreement or arrangement, sponsored, maintained or contributed to or required to be contributed to by the Company or any of its Subsidiaries or as to which the Company or any Subsidiary has, or may have any liability or obligation, whether written or oral.

(b) With respect to each of the Company Plans, the Company has heretofore delivered or made available to Parent true and complete copies of each of the following documents: (i) the Company Plan and related documents (including trust agreements and insurance contracts) and all amendments thereto; (ii) the most recent annual reports, actuarial reports, and financial statements, if any; (iii) the most recent summary plan description, together with each summary of material modifications, required under the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) with respect to each Company Plan, if any; (iv) the most recent determination letter or opinion letter received from the Internal Revenue Service (the “ IRS ”) with respect to each Company Plan that is intended to be qualified under the Code; and (v) all material communications to or from the IRS or any other governmental or regulatory authority relating to each Company Plan.

(c) No liability under Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code has been incurred by the Company, any Subsidiary or any trade or business, whether or not incorporated, that together with the Company or any of its Subsidiaries would be deemed a “single employer” under Section 414 of the Code (a “ Company ERISA Affiliate ”) since the effective date of ERISA that has not been satisfied in full when due, and no condition exists that presents a material risk to the Company, any Subsidiary or any Company ERISA Affiliate of incurring a liability under such Title or such Sections other than liability for the payment of PBGC premiums, which have been or will be paid when due. No Company Plan subject to Section 412 of the Code or Section 302 of ERISA has incurred an accumulated funding deficiency, whether or not waived.

(d) Neither the Company nor any of its Subsidiaries, nor any Company ERISA Affiliate, or to Company’s Knowledge, any other “disqualified person” (within the meaning of Section 4975 of the Code) or “party in interest” (within the meaning of Section 3(14) of ERISA) has engaged in any “prohibited transaction” (within the meaning of Section 4975 of the Code or Section 406 of ERISA) with respect to any of the Company Plans.

(e) Neither the Company nor any Subsidiary has acted or failed to act in such a way as to cause the Company or any Subsidiary to be liable (either directly or pursuant to any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service

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provider with respect to any Company Plan), and no condition exists that presents a material risk to the Company or any Subsidiary of incurring any liability, directly or indirectly, for taxes imposed pursuant to Sections 4976, 4980B, 4980D, 4980E, or 4980F of the Code.

(f) All contributions required to have been made under the terms of any Company Plan, or pursuant to ERISA or the Code have been timely made, and all obligations in respect of each Company Plan have been properly accrued and reflected on the most recent Financial Statements of the Company to the extent required by GAAP.

(g) No reportable event under Section 4043 of ERISA has occurred or will occur with respect to any Company Plan on or before the date hereof and, no condition exists which is likely to cause any such event to occur prior to the Closing Date, other than any reportable event occurring by reason of the transactions contemplated by this Agreement.

(h) None of the Company Plans is and neither the Company, nor any Subsidiary, nor any ERISA Affiliate has any liability, or has no material risk of incurring any liability, in respect of, a “multiemployer plan,” as such term is defined in Section 3(37) of ERISA, a “multiple employer welfare arrangement,” as such term is defined in Section 3(40) of ERISA, or single employer plan that has two or more contributing sponsors, at least two of whom are not under common control, within the meaning of Section 4063(a) of ERISA.

(i) The IRS has issued a favorable determination letter, or the Company can rely on an opinion letter, in respect of each of the Company Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code and, nothing has occurred that could reasonably be expected to adversely affect the qualified status of any Company Plan under Section 401(a) of the Code, or require the Company to file a submission under the Internal Revenue Service’s employee plans compliance resolution system or take other corrective action pursuant to such system in order to maintain the qualified status of such Company Plan. Each of the Company Plans that is intended to satisfy the requirements of Section 125 or 501(c)(9) of the Code satisfies such requirements. Each of the Company Plans has been operated and administered in all material respects in accordance with its terms and applicable Laws, including but not limited to ERISA and the Code. Each Company Plan may be amended or terminated without liability to the Company or any of its Subsidiaries, other than liability for accrued benefits through the date of the amendment or termination and administrative costs of amending or terminating the Company Plan.

(j) There are no claims pending, or, to the Company’s Knowledge, threatened or anticipated (other than routine claims for benefits) against any Company Plan, the assets of any Company Plan or against the Company, any Subsidiary or any Company ERISA Affiliate with respect to any Company Plan.

(k) Except as identified in Section 3.8(k) of the Company Disclosure Letter, no Company Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees, directors or other service providers of or to the Company or any of its Subsidiaries after retirement or other termination of service (other than (i) coverage mandated by applicable law, (ii) death benefit or retirement benefits under any “employee pension benefit plan,” as that term is defined in Section 3(2) of

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ERISA, (iii) deferred compensation benefits accrued as liabilities on the books of the Company, or (iv) benefits, the full cost of which is borne by the current or former employee or director (or his/her beneficiary)). No Company Plan is funded through a “welfare benefit fund” as defined in Section 419 of the Code.

(l) Except as set forth in Section 3.8(l) of the Company Disclosure Letter, neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated hereby is a precondition to (either alone or together with any other event) (i) any current or former employee, director or other service provider of or to the Company or any of its Subsidiaries becoming entitled to severance pay or any similar payment, (ii) the acceleration of the time of payment, funding or vesting, or an increase in the amount of any compensation due to any current or former employee, director or other service provider of or to the Company or any of its Subsidiaries, or (iii) the renewal or extension of the term of any agreement regarding the compensation of any current or former employee, director or other service provider of or to the Company or any of its Subsidiaries.

(m) Each Company Plan that is a “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) has, since January 1, 2005, been operated and administered in good faith compliance with the requirements of Section 409A of the Code, as determined in accordance with applicable IRS guidance under Section 409A of the Code.

(n) No Company Plan subject to Title I of ERISA holds any “employer security” or “employer real property” (each as defined in Section 407(d) of ERISA).

(o) Except as set forth in Section 3.8(o) of the Company Disclosure Letter, no payment or benefit paid or provided, or to be paid or provided, to current or former employees, directors or other service providers of the Company or any of its Subsidiaries (including pursuant to this Agreement) will fail to be deductible for federal income tax purposes under Section 280G of the Code. Except as disclosed in Section 3.8(o) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a party to any plan, policy or agreement that provides for the payment of Severance Benefits Gross-Up Payments, Excess Tax Gross-Up Payments or Designated Tax Gross-Up Payments and neither the Company nor any Subsidiary has any obligation, whether fixed or contingent, to make any such payment.

(p) Each Person who performs services for the Company or any of its Subsidiaries has been, and is, properly classified by the Company or any of its Subsidiaries as an employee or independent contractor, except where the failure, individually or in the aggregate, to properly classify such Person(s) would not reasonably be expected to result in liability material to the Company or any of its Subsidiaries.

3.9. Compliance with Laws; Licenses; Regulatory Registrations and Memberships .

(a) Except as is not and would not be reasonably expected to be material to the Company and its Subsidiaries taken as a whole, since January 1, 2005, the businesses of each of the Company and its Subsidiaries have not been conducted in violation of any federal, state, local or foreign law, statute, ordinance, common law, or any rule, regulation, standard, judgment, order, writ, injunction, decree, arbitration award, agency requirement, License, or published

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policy or interpretation of any Governmental Entity that is presently in effect or has been approved, subject to a later effective date within 180 days of the date hereof (collectively, “ Laws ”). Except as set forth in notes to the Financial Statements, no material investigation or review by any Governmental Entity, any Self-Regulatory Organization or OPRA with respect to the Company or any of its Subsidiaries is pending or threatened, nor has any Governmental Entity, any Self-Regulatory Organization or OPRA indicated in writing an intention to conduct the same. Each of the Company and its Subsidiaries has obtained and is in substantial compliance with all material permits, licenses, certifications, franchises, variances, exemptions, orders, and other authorizations, consents and approvals (“ Licenses ”) of all Governmental Entities, Self-Regulatory Organizations and OPRA necessary to conduct its business in all material respects as presently conducted. Section 3.9(a) of the Company Disclosure Letter sets forth to the Company’s Knowledge (i) a list of all pending or threatened investigations by any Governmental Entity with respect to the Company or any of its Subsidiaries and (ii) a list of all investigations by any Governmental Entity with respect to the Company or any of its Subsidiaries that were completed during the one-year period prior to the date of this Agreement.

(b) Each of the Company and its Subsidiaries is in compliance in all material respects with (i) each License, (ii) its obligations under each of the Licenses and (iii) the rules, regulations, published policies and interpretations of, and no-action letters or exemptions obtained by the Company or any of its Subsidiaries issued by, the Governmental Entity issuing such Licenses, including, but not limited to, its responsibilities as a Self Regulatory Organization to surveil its marketplace and the conduct of its members, other users, and issuers of the instruments it lists or trades. There is not pending or, to the Company’s Knowledge, threatened before any Governmental Entity any material proceeding, notice of violation, order of forfeiture or complaint or, to the Company’s Knowledge, investigation against the Company or any of its Subsidiaries relating to any of the Licenses. Since January 1, 2005, the actions of the applicable Governmental Entities granting all Licenses have not been reversed, stayed, enjoined, annulled or suspended, or scheduled to terminate or lapse and there is not pending or, to the Company’s Knowledge, threatened, any material application, petition, objection or other pleading with any Governmental Entity which challenges or questions the validity of or any rights of the holder under any License.

(c) None of the Company, the Company Subsidiaries or, to the Company’s Knowledge, their respective directors, officers, managers or employees:

(i) since January 1, 2005, 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 clearing organization 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; or

(ii) since January 1, 2005, has been the subject of, or incurred, as applicable, any fines, penalties, judgments, awards, settlements, losses, damages or sanctions from, or as the result of any inquiry, audit, review, examination or investigation by, the SEC or the Commodity Futures Trading Commission (the “ CFTC ”).

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(d) 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 or as an investment adviser under Section 203(a) under the Investment Advisers Act of 1940.

(e) The Company is registered as a national securities exchange and as a self-regulatory organization under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act, and has in effect rules (i) in accordance with the provisions of the Exchange Act for the trading of securities listed or accepted for trading on the Company’s securities exchange and (ii) with respect to all other matters for which rules are required under the Exchange Act. All of the rules (as defined in Section 3(a)(27) of the Exchange Act) that the Company has adopted are in compliance with the Exchange Act and the applicable rules thereunder.

(f) The Company’s Subsidiary, the Philadelphia Board of Trade, has been designated by the CFTC as a “contract market” under the Commodity Exchange Act. Neither the Company, nor any Subsidiary of the Company, is required to be registered with the CFTC as a “derivatives clearing organization” or, other than the Philadelphia Board of Trade, to apply to the CFTC for designation as a “contract market”.

(g) The Company’s Subsidiary, Stock Clearing Corporation of Philadelphia, Inc., is registered as a clearing agency pursuant to Section 17A of the Exchange Act and Rule 17Ab2-1 thereunder.

(h) Each of the Company and its Subsidiaries is in compliance with all applicable regulatory capital (if any) and other regulatory financial requirements (if any) and no distribution of cash from the Company or any of its Subsidiaries after the date hereof, where such action occurs prior to the Closing, will result in such Company or Subsidiary not being in compliance with applicable regulatory capital requirements.

3.10. Material Contracts .

(a) Section 3.10(a) of the Company Disclosure Letter sets forth in subsections corresponding to this Section 3.10(a) a true and complete list of all of the following types of Contracts to which the Company or any of its Subsidiaries is a party or by which any of their respective properties, rights or assets are bound as of the date of this Agreement (collectively, the “ Company Material Contracts ”):

(i) real and personal property leases or subleases, product or service supply and purchase agreements, in each case, involving annual payments to or by the Company or any of its Subsidiaries in excess of $250,000;

(ii) other agreements, including any oral agreements, requiring annual payments by the Company or any of its Subsidiaries in excess of $250,000;

(iii) loan agreements, credit agreements, security agreements, guarantees, indentures, mortgages and notes or other debt instruments evidencing indebtedness

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of the Company or any of its Subsidiaries for borrowed money, extensions of credit to the Company or any of its Subsidiaries or the guaranty by the Company or any of its Subsidiaries of obligations in respect of the borrowings of moneys by or extensions of credit to any other Person;

(iv) partnership, joint venture or limited liability company agreements to which the Company or any of its Subsidiaries is a party or is otherwise bound;

(v) collective bargaining agreements with any union, works council or similar bodies to which the Company or any of its Subsidiaries is a party or is otherwise bound;

(vi) non-competition or non-solicitation agreements that materially restrict the ability of the Company or any of its Subsidiaries to conduct its business as currently conducted (or which purport to limit the freedom of Parent after the Effective Time);

(vii) all Contracts relating, directly or indirectly, to (A) any past (if any of the terms thereof remain in effect) or future disposition or acquisition of any material assets, rights or properties by or to the Company or any of its Subsidiaries, other than dispositions or acquisitions of inventory or equipment in the ordinary course of business or (B) other than this Agreement, any merger, consolidation or combination of, any sale, dividend, split or other disposition of any equity interests of, or any sale, dividend, distribution or other disposition of all or substantially all of the assets of any Person;

(viii) any other contract that reasonably would be viewed by management as material to the Company and its Subsidiaries, taken as a whole; and

(ix) all Contracts with Governmental Entities.

(b) A true and complete copy of each Company Material Contract has previously been delivered or made available to Parent (subject to applicable confidentiality restrictions), and each such Company Material Contract is a valid and binding agreement of the Company or one of its Subsidiaries, as the case may be, and is in full force and effect in accordance with its terms and conditions, subject to the Enforceability Exception, and none of the Company, any of its Subsidiaries or, to the Company’s Knowledge, any other party thereto is in material default or breach under the terms of any such Company Material Contract.

3.11. Real Property .

(a) Neither the Company nor any of its Subsidiaries owns any real property.

(b) With respect to the real property leased or subleased to the Company or its Subsidiaries that is material to the business of the Company (the “ Company Real Property ”), the lease or sublease for such property is valid, legally binding, enforceable and in full force and effect, and none of the Company or any of its Subsidiaries has received written notice from the applicable landlord or sublandlord that it is in breach of or default under such lease or sublease, which breach or default remains uncured, and to the Company’s and its Subsidiaries’ actual knowledge, no event has occurred which, with notice, lapse of time or both, would constitute a material breach or material default by any of the Company or its Subsidiaries pursuant to any

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such material lease or sublease or permit termination of such lease or sublease by the landlord thereunder (other than expiration of such lease or sublease by its terms on its scheduled expiration date, rather than an accelerated termination date) or acceleration of the rent obligations thereunder.

(c) Section 3.11(c) of the Company Disclosure Letter contains a true, correct and complete list of all material Company Real Property, including an accurate street address, a brief description of the use of such Company Real Property and the lease, sublease or other agreement for each such property.

(d) All material Licenses required to have been issued to the Company to enable any Company Real Property to be lawfully occupied and used by the Company or its Subsidiaries, as applicable, for all of the purposes for which they are currently occupied and used have been lawfully issued and are in full force and effect. The Company has not received any written notice, nor to the Company’s Knowledge is there any pending, threatened or contemplated condemnation proceeding affecting any Company Real Property or any part thereof, (including any such condemnation that would impair parking at any such Company Real Property) or of any sale or other disposition of any such Company Real Property or any part thereof in lieu of condemnation.

3.12. Takeover Statutes . None of the restrictions on business combinations imposed by DGCL Section 203, any Pennsylvania statute or, to the Company’s Knowledge, any other state takeover or similar statute or regulation (each a “ Takeover Statute ”) are applicable to the Shares, the Merger or the other transactions contemplated by this Agreement.

3.13. Environmental Matters . Except for such matters as would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect: (i) the Company and its Subsidiaries are in compliance with applicable Environmental Laws; (ii) to the Company’s actual Knowledge, no property currently leased or operated by the Company or any of its Subsidiaries (including soils, groundwater, surface water, buildings or other structures) is contaminated with any Hazardous Substance in a manner that is or could reasonably be required to be Remediated or Removed (as such terms are defined below), that is in violation of any Environmental Law, or that is reasonably likely to give rise to any Environmental Liability; (iii) none of the Company nor any of its Subsidiaries is subject to any Environmental Liabilities; (iv) neither the Company nor any of its Subsidiaries has received any written notice, demand, letter, claim or request for information alleging that the Company or any of its Subsidiaries may be in violation of or subject to liability under any applicable Environmental Law; and (v) neither the Company nor any of its Subsidiaries is subject to any order, decree, injunction or agreement with any Governmental Entity concerning liability or obligations relating to any applicable Environmental Law or otherwise relating to any Hazardous Substance.

As used herein, the term “ Environmental Laws ” means all applicable Laws (including any common law) relating to: (A) the protection, investigation or restoration of the environment, human health, safety (as it relates to the environment), or natural resources, (B) the handling, use, presence, disposal, Release or threatened Release of any Hazardous Substance or (C) indoor air, employee exposure, wetlands, pollution, contamination or any injury or threat of injury to persons or property relating to any Hazardous Substance. !

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As used herein, the term “ Environmental Liability ” means any obligations or liabilities (including any written notices, claims, complaints, suits or other formal assertions of obligations or liabilities) that are: (A) related to environmental or human health or safety (as it relates to the environment) issues (including on-site or off-site contamination by Hazardous Substances of surface or subsurface soil or water); and (B) based upon (I) any provision of applicable Environmental Laws or (II) any order, consent, decree, writ, injunction or judgment issued or otherwise imposed by any Governmental Entity.

As used herein, the term “ Hazardous Substance ” means any “hazardous substance” and any “ pollutant or contaminant ” as those terms are defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“ CERCLA ”); any “ hazardous waste ” as that term is defined in the Resource Conservation and Recovery Act (“ RCRA ”); and any “ hazardous material ” as that term is defined in the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq .), as amended; and including, without limitation, any petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, lead paint, polychlorinated biphenyls (or PCBs), dioxins, heavy metals, radon gas, toxic mold, mold spores and mycotoxins.

As used herein, the term “ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, placing, discarding, abandonment, or disposing into the environment (including the placing, discarding or abandonment of any barrel, container or other receptacle containing any Hazardous Substance or other material).

As used herein, the term “ Removal, Remedial or Response ” actions include the types of activities covered by CERCLA, RCRA, and other comparable applicable Environmental Laws, whether such activities are those which might be taken by a Governmental Entity or those which a Governmental Entity or any other person might seek to require of waste generators, handlers, distributors, processors, users, storers, treaters, owners, operators, transporters, recyclers, reusers, disposers, or other persons.

3.14. Taxes .

(a) Each of the Company and its Subsidiaries has duly filed (or caused to be filed) all material Tax Returns that it was required to file with any Governmental Entity on or before the Effective Time, in each case on or before the due date prescribed by law for the filing thereof (with due regard to extensions lawfully and timely obtained). All material Taxes of the Company and of each of its Subsidiaries have been duly and timely paid. Any liability of the Company or any of its Subsidiaries for material Taxes not yet due and payable, or which are being con