EX-10.1






EXECUTION COPY




AGREEMENT AND PLAN OF MERGER




BY AND AMONG




TD AMERITRADE HOLDING CORPORATION




TANGO ACQUISITION CORPORATION ONE




TANGO ACQUISITION CORPORATION TWO




AND




THINKORSWIM GROUP INC.




Dated as of January 8, 2009




 









 





	 	 	 	 	 
	ARTICLE I DEFINITIONS & INTERPRETATIONS
	 	 	2	 
	 
	 	 	 	 
	1.1 Certain Definitions
	 	 	2	 
	1.2 Additional Definitions
	 	 	11	 
	1.3 Certain Interpretations
	 	 	14	 
	 
	 	 	 	 
	ARTICLE II THE MERGER
	 	 	14	 
	 
	 	 	 	 
	2.1 The Integrated Merger
	 	 	14	 
	2.2 The Closing
	 	 	15	 
	2.3 Effective Time of First Step Merger and Second Step Merger
	 	 	15	 
	2.4 Effect of the First Step Merger and Second Step Merger
	 	 	15	 
	2.5 Organizational Documents
	 	 	16	 
	2.6 Directors and Officers
	 	 	17	 
	2.7 Effect of First Step Merger on Capital Stock of
Constituent Corporations
	 	 	17	 
	2.8 Company Stock Awards
	 	 	20	 
	2.9 Exchange Fund; Exchange of Shares
	 	 	22	 
	2.10 No Further Ownership Rights in Company Common Stock
	 	 	25	 
	2.11 Lost, Stolen or Destroyed Certificates
	 	 	25	 
	2.12 Tax Treatment
	 	 	25	 
	2.13 Taking of Necessary Further Action
	 	 	25	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	26	 
	 
	3.1 Organization and Standing
	 	 	26	 
	3.2 Corporate Approvals
	 	 	26	 
	3.3 Noncontravention; Required Consents
	 	 	27	 
	3.4 Capitalization
	 	 	28	 
	3.5 Subsidiaries
	 	 	30	 
	3.6 SEC Reports; Other Reports
	 	 	31	 
	3.7 Financial Statements and Controls
	 	 	32	 
	3.8 No Undisclosed Liabilities
	 	 	34	 
	3.9 Absence of Certain Changes
	 	 	34	 
	3.10 Compliance with Laws and Orders
	 	 	35	 
	3.11 Permits
	 	 	35	 
	3.12 Litigation; Orders; Regulatory Agreements
	 	 	37	 
	3.13 Material Contracts
	 	 	38	 
	3.14 Taxes
	 	 	41	 
	3.15 Employee Benefits
	 	 	44	 
	3.16 Labor Matters
	 	 	47	 
	3.17 Real Property
	 	 	48	 
	3.18 Environmental Matters
	 	 	48	 
	3.19 Assets; Personal Property
	 	 	49	 
	3.20 Intellectual Property
	 	 	49	 
	3.21 Insurance
	 	 	51	 
	3.22 Related Party Transactions
	 	 	52	 
	3.23 State Anti-Takeover Statutes
	 	 	52	 






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	3.24 Brokers
	 	 	52	 
	3.25 Opinion of Financial Advisor
	 	 	52	 
	3.26 Canadian Assets and Revenues
	 	 	52	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE MERGER SUBS
	 	 	52	 
	 
	 	 	 	 
	4.1 Organization and Standing
	 	 	53	 
	4.2 Authorization; Board Approvals
	 	 	53	 
	4.3 Non-contravention; Required Consents
	 	 	54	 
	4.4 Capitalization
	 	 	55	 
	4.5 SEC Reports; Other Reports
	 	 	55	 
	4.6 Financial Statements and Controls
	 	 	56	 
	4.7 No Undisclosed Liabilities
	 	 	58	 
	4.8 Absence of Certain Changes
	 	 	58	 
	4.9 Compliance with Laws and Orders; Permits
	 	 	58	 
	4.10 Litigation; Orders
	 	 	58	 
	4.11 Taxes
	 	 	59	 
	4.12 Ownership of Company Capital Stock
	 	 	59	 
	4.13 No Contracts with Company Directors and Executive Officers
	 	 	59	 
	4.14 Brokers
	 	 	59	 
	 
	 	 	 	 
	ARTICLE V INTERIM CONDUCT OF BUSINESS
	 	 	59	 
	 
	 	 	 	 
	5.1 Affirmative Obligations of the Company
	 	 	59	 
	5.2 Negative Obligations of the Company
	 	 	60	 
	 
	 	 	 	 
	ARTICLE VI ADDITIONAL AGREEMENTS
	 	 	64	 
	 
	 	 	 	 
	6.1 No Solicitation
	 	 	64	 
	6.2 Reasonable Best Efforts to Complete
	 	 	66	 
	6.3 Regulatory Filings
	 	 	67	 
	6.4 Anti-Takeover Laws
	 	 	69	 
	6.5 Registration Statement; Proxy Statement/Prospectus
	 	 	69	 
	6.6 Company Stockholder Meeting
	 	 	71	 
	6.7 Company Board Recommendation
	 	 	72	 
	6.8 Access; Notice and Consultation
	 	 	75	 
	6.9 Confidentiality
	 	 	77	 
	6.10 Public Disclosure
	 	 	77	 
	6.11 Employee Matters
	 	 	77	 
	6.12 Directors’ and Officers’ Indemnification and Insurance
	 	 	79	 
	6.13 Resignation of Officers and Directors of Company Subsidiaries
	 	 	81	 
	6.14 Section 16 Resolutions
	 	 	81	 
	6.15 Nasdaq Listing
	 	 	81	 
	6.16 Registration Statements for Assumed Options and Other Awards
	 	 	81	 
	6.17 Obligations of the Merger Subs
	 	 	82	 
	6.18 Tax Matters
	 	 	82	 
	6.19 Funded Debt
	 	 	82	 
	 
	 	 	 	 
	ARTICLE VII CONDITIONS TO THE MERGER
	 	 	82	 






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	7.1 Conditions to Each Party’s Obligations to Effect the Merger
	 	 	82	 
	7.2 Additional Conditions to the Obligations of Parent and the Merger Subs
	 	 	84	 
	7.3 Additional Conditions to the Company’s Obligations to Effect the Merger
	 	 	86	 
	 
	 	 	 	 
	ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
	 	 	87	 
	 
	 	 	 	 
	8.1 Termination
	 	 	87	 
	8.2 Notice of Termination; Effect of Termination
	 	 	90	 
	8.3 Fees and Expenses
	 	 	90	 
	8.4 Amendment
	 	 	92	 
	8.5 Extension; Waiver
	 	 	92	 
	 
	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS
	 	 	92	 
	 
	 	 	 	 
	9.1 Survival of Representations, Warranties and Covenants
	 	 	92	 
	9.2 Notices
	 	 	92	 
	9.3 Assignment
	 	 	93	 
	9.4 Entire Agreement
	 	 	94	 
	9.5 Third Party Beneficiaries
	 	 	94	 
	9.6 Severability
	 	 	94	 
	9.7 Other Remedies
	 	 	94	 
	9.8 Governing Law
	 	 	94	 
	9.9 Specific Performance
	 	 	94	 
	9.10 Consent to Jurisdiction
	 	 	95	 
	9.11 WAIVER OF JURY TRIAL
	 	 	95	 
	9.12 Counterparts
	 	 	95	 







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AGREEMENT AND PLAN OF MERGER




     THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of
January 8, 2009 by and among TD AMERITRADE Holding Corporation, a Delaware corporation
(“Parent”), Tango Acquisition Corporation One, a Delaware corporation and a direct,
wholly-owned subsidiary of Parent (“Merger Sub One”), Tango Acquisition Corporation Two, a
Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub Two” and
together with Merger Sub One, the “Merger Subs”), and thinkorswim Group Inc., a Delaware
corporation (the “Company”). All capitalized terms that are used in this Agreement shall
have the respective meanings ascribed thereto in Article I.



W I T N E S S E T H:




     WHEREAS, each of the respective Board of Directors of Parent, the Merger Subs and the Company
has approved this Agreement and the transactions contemplated hereby, and deems it advisable and in
the best interest of its respective stockholder(s) to enter into this Agreement and consummate the
transactions contemplated hereby pursuant to which, among other things, and as a single integrated
transaction, Merger Sub One will be merged with and into the Company (the “First Step
Merger”) in accordance with the applicable provisions of the General Corporation Law of the
State of Delaware (the “DGCL”), the Company will continue as the surviving corporation of
the First Step Merger and each share of the Company Common Stock outstanding immediately prior to
the Effective Time will be cancelled and converted into the right to receive the consideration set
forth herein, all upon the terms and subject to the conditions set forth in this Agreement.



     WHEREAS, immediately following the First Step Merger, Parent will cause the Company to merge
with and into Merger Sub Two (the “Second Step Merger” and, taken together with the First
Step Merger, the “Integrated Merger” or the “Merger”).



     WHEREAS, for U.S. federal income tax purposes, it is intended that the Integrated Merger will
qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended, and that this Agreement will be, and is hereby, adopted as a plan of
reorganization within the meaning of Treasury Regulations Section 1.368-2(g).



     WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition
and inducement to the willingness of Parent and the Merger Subs to enter into this Agreement,
certain executive officers of the Company, in their respective capacities as stockholders of the
Company, are entering into Voting Agreements with Parent substantially in the form attached hereto
as Exhibit A (each, a “Voting Agreement” and collectively, the “Voting
Agreements”).



     WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition
and inducement to Parent’s willingness to enter into this Agreement, certain employees of the
Company are entering into employment agreements with Parent regarding
their continued employment with Parent or an Affiliate thereof on and after the



 









 







Closing Date,
each to be effective as of the Effective Time (each, a “Key Employee Employment Agreement”
and collectively, the “Key Employee Employment Agreements”).



     NOW, THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements set forth herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and
intending to be legally bound hereby, Parent, the Merger Subs and the Company hereby agree as
follows:



ARTICLE I

DEFINITIONS & INTERPRETATIONS




     1.1 Certain Definitions. For all purposes of and under this Agreement, the following
capitalized terms shall have the following respective meanings:



          (a) “Acquisition Proposal” shall mean any indication of interest, offer or proposal
relating to an Acquisition Transaction from any Person other than Parent or any of its Affiliates.




          (b) “Acquisition Transaction” shall mean any transaction or series of related
transactions (other than a transaction with Parent or any of its Affiliates) involving:




               (i) any direct or indirect purchase or other acquisition by any Person or “group” (as defined
in or under Section 13(d) of the Exchange Act) from the Company of fifteen percent (15%) or more of
the total outstanding equity interests in or voting securities of the Company, or any tender offer
or exchange offer that, if consummated, would result in any Person or “group” (as defined in or
under Section 13(d) of the Exchange Act) beneficially owning fifteen percent (15%) or more of the
total outstanding equity interests in or voting securities of the Company;



               (ii) any direct or indirect purchase or other acquisition of fifty percent (50%) or more of
any class of equity or other voting securities of one or more direct or indirect Subsidiaries of
the Company, the business(es) of which, individually or in the aggregate, generate or constitute
(as applicable) fifteen percent (15%) or more of the consolidated net revenues, net income or
assets (as of or for the twelve month period ending on the last day of the Company’s most recently
completed fiscal year) of the Company and its Subsidiaries, taken as a whole;



               (iii) any merger, consolidation, business combination or other similar transaction involving
the Company or one or more of its Subsidiaries, the business(es) of which, individually or in the
aggregate, generate or constitute fifteen percent (15%) or more of the consolidated net revenues,
net income or assets (as of or for the twelve month period ending on the last day of the applicable
party’s most recently completed fiscal year) of the Company and its Subsidiaries, taken as a whole,
pursuant to which the stockholders of the Company (as a group) or such Subsidiary or Subsidiaries,
as applicable, immediately preceding such transaction hold less than eighty five percent



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(85%) of
the equity interests in or voting securities of the surviving or resulting entity of such
transaction;



               (iv) any direct or indirect sale, lease (other than in the ordinary course of business),
exchange, transfer, license (other than in the ordinary course of business), acquisition or
disposition of assets of the Company or one or more of its Subsidiaries that generate or
constitute, individually or in the aggregate, fifteen percent (15%) or more of the consolidated net
revenues, net income or assets (as of or for the twelve month period ending on the last day of the
applicable party’s most recently completed fiscal year) of the Company and its Subsidiaries, taken
as a whole;



               (v) any liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company or one or more of its Subsidiaries, the business(es) of which,
individually or in the aggregate, generate or constitute fifteen percent (15%) or more of the
consolidated net revenues, net income or assets (as of or for the twelve month period ending on the
last day of the applicable party’s most recently completed fiscal year) of the Company and its
Subsidiaries, taken as a whole; or



               (vi) any combination of the foregoing transactions;


provided, however, that for the purposes of references to an “Acquisition Proposal” or an
“Acquisition Transaction” in Section 8.3, the references in this definition of Acquisition
Transaction to “fifteen percent (15%)” and “eighty-five percent (85%)” shall be replaced by “fifty
percent (50%)”.




          (c) “Advisers Act” shall mean the Investment Advisers Act of 1940, as amended, and the
rules and regulations promulgated thereunder, or any successor statute, rules and regulations.




          (d) “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control with such Person. For
purposes of the immediately preceding sentence, the term “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with
respect to any Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether through ownership of
voting securities, by contract or otherwise.




          (e) “Balance Sheet” shall mean the consolidated balance sheet of the Company and its
Subsidiaries as of September 30, 2008 included in the Company’s quarterly report on Form 10-Q as
filed with the SEC.




          (f) “Business Day” shall mean any day, other than a Saturday, Sunday or any day which
is a legal holiday under the laws of the State of New York or is a day on which banking
institutions located in the State of New York are authorized or required by Law or other
governmental action to close.




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          (g) “CEA” shall mean the Commodity Exchange Act, as amended, and the rules and
regulations promulgated thereunder, or any successor statute, rules and regulations thereto.




          (h) “CFTC” shall mean the United States Commodity Futures Trading Commission or any
successor thereto.




          (i) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor
statute.




          (j) “Company Board” shall mean the Board of Directors of the Company.




          (k) “Company Capital Stock” shall mean the Company Common Stock and the Company
Preferred Stock.




          (l) “Company Common Stock” shall mean the Common Stock, par value $0.01 per share, of
the Company.




          (m) “Company Intellectual Property” shall mean any and all Intellectual Property
Rights that are owned or purported to be owned by the Company or any of its Subsidiaries.




          (n) “Company Option” shall mean an option to purchase shares of Company Common Stock
outstanding under any of the Company Option Plans.




          (o) “Company Option Plans” shall mean (i) the thinkorswim Group Inc. Second Amended
and Restated 2001 Stock Option Plan, (ii) the Telescan, Inc. Amended and Restated 1995 Stock Option
Plan, (iii) the Telescan, Inc. 2000 Stock Option Plan, (iv) the Telescan, Inc. Amended and Restated
Stock Option Plan, and any other option plan of the Company or any of its Subsidiaries.




          (p) “Company Preferred Stock” shall mean the Series A Preferred Stock, par value $0.01
per share, of the Company.




          (q) “Company Product” shall mean all products, technologies and services developed
(including products, technologies and services under development), owned, made, provided,
distributed, imported, sold or licensed by or on behalf of the Company or any of its Subsidiaries.




          (r) “Company Regulatory Agreement” shall mean any cease-and-desist or other order or
enforcement action issued to or against the Company or any of its Subsidiaries by, any written
Contract, consent agreement or memorandum of understanding that the Company or any of its
Subsidiaries have with, any commitment letter or similar undertaking by the Company or any of its
Subsidiaries to, or any extraordinary supervisory letter to the Company or any of its Subsidiaries
from, any order




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or directive to the
Company or any of its Subsidiaries by, or any board resolutions adopted by the Company or any
of its Subsidiaries at the request of, any Governmental Authority.




          (s) “Company Restricted Stock Units” shall mean an award which promises to issue a
share of Company Common Stock in the future under any of the Company Option Plans, and shall
include the Restricted Stock Units to be granted pursuant to the Option Exchange Program.




          (t) “Company Stock Awards” shall mean Company Options, Company Restricted Stock and
Company Restricted Stock Units.




          (u) “Contract” shall mean any contract, subcontract, agreement, note, bond, mortgage,
indenture, lease, sublease, license, sublicense, or other legally binding instrument, commitment,
arrangement or understanding of any kind or character, whether oral or in writing.




          (v) “Credit Agreement” shall mean the Credit Agreement, dated as of February 13, 2007,
among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent.




          (w) “Delaware Law” shall mean the DGCL and any other applicable Law of the State of
Delaware.




          (x) “DOL” shall mean the United States Department of Labor or any successor thereto.




          (y) “Environmental Law” shall mean any and all Laws relating to the protection of the
environment (including ambient air, surface water, groundwater or land) or human health as affected
by the environment or Hazardous Substances or otherwise relating to the production, use, emission,
storage, treatment, transportation, recycling, disposal, discharge, release, labeling or other
handling of any Hazardous Substances or any products or wastes containing any Hazardous Substances
including any Laws related to product take-back or content requirements, or the investigation,
clean-up or other remediation or analysis of Hazardous Substances, including without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource
Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act,
the Hazardous Materials Transportation Act, the Clean Water Act, European Union Directive
2002/96/EC on waste electrical and electronic equipment (“WEEE Directive”) and European
Union Directive 2002/95/EC on the restriction on the use of hazardous substances (“RoHS
Directive”).




          (z) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder, or any successor statue, rules and
regulations thereto.




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          (aa) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, or any successor statute, rules and regulations
thereto.




          (bb) “FINRA” shall mean the Financial Industry Regulatory Authority or any successor
thereto.




          (cc) “GAAP” shall mean generally accepted accounting principles, as applied in the
United States.




          (dd) “Governmental Authority” shall mean any government, any governmental or
regulatory entity or body, department, commission, board, agency, instrumentality or
self-regulatory organization (including FINRA and IIROC), and any court, tribunal or judicial body,
in each case whether federal, state, county, provincial or local, and whether domestic or foreign.




          (ee) “Hazardous Substance” shall mean any substance, material or waste that is
characterized or regulated under any Environmental Law as “hazardous,” “pollutant,” “contaminant,”
“toxic” or words of similar meaning or effect, or is otherwise a danger to health, reproduction or
the environment, including petroleum and petroleum products, polychlorinated biphenyls and
asbestos.




          (ff) “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder, or any successor statute, rules and
regulations thereto.




          (gg) “IIROC” shall mean the Investment Industry Regulatory Association of Canada or
any successor thereto.




          (hh) “Intellectual Property Rights” shall mean common law and statutory rights
anywhere in the world associated with (i) patents, patent applications and inventors’ certificates,
(ii) copyrights, copyright registrations and copyright applications, and “moral” rights, (iii)
trade secrets (as defined in the Uniform Trade Secrets Act) or under applicable common Law,
proprietary know-how and confidential information (“Trade Secrets”), (iv) trademarks, trade
names and service marks (“Trademarks”), (v) Internet domain names, (vi) divisions,
continuations, renewals, reissuances and extensions of the foregoing (as applicable) and (vii) the
right to enforce and recover damages for the infringement or misappropriation of for any of the
foregoing.




          (ii) “IRS” shall mean the United States Internal Revenue Service or any successor
thereto.




          (jj) “Knowledge” of any Person, with respect to any matter in question, shall mean the
actual knowledge of any of the directors or executive officers of such Person.




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          (kk) “Law” shall mean any and all applicable federal, state, provincial, local,
municipal, foreign or other law, statute, treaty, constitution, principle of common law,
resolution, ordinance, code, edict, decree, directive, guidance, order, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Authority.




          (ll) “Legal Proceeding” shall mean any action, claim, suit, litigation, proceeding
(public or private), arbitration, criminal prosecution, examination or audit by any Person or
pending before any Governmental Authority.




          (mm) “Liabilities” shall mean any liability, indebtedness, obligation or commitment of
any kind, nature or character (whether accrued, absolute, contingent, matured, unmatured or
otherwise and whether or not required to be recorded or reflected on a balance sheet prepared under
GAAP).




          (nn) “Lien” shall mean any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, claim, option, right of first refusal, preemptive right, community property
interest or other legal restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any restriction on the
possession, exercise or transfer of any other attribute of ownership of any asset).




          (oo) “Loan” shall mean any extension of credit (including any commitment to extend
credit).




          (pp) “Material Adverse Effect” shall mean, with respect to any Person, any fact,
circumstance, change or effect that, individually or when taken together with all other such facts,
circumstances, changes or effects that exist at the date of determination of the occurrence of the
Material Adverse Effect, (x) has or would reasonably be expected to have a material adverse effect
on the assets (including intangible assets), liabilities (including contingent liabilities),
business, operations, financial condition or results of operations of such Person and its
Subsidiaries, taken as a whole, or (y) would materially impair such Person’s ability to consummate
the transactions contemplated by this Agreement in accordance with the terms hereof and applicable
Legal Requirements or (z) would materially delay the consummation of the Merger and the other
transactions contemplated by this Agreement; provided, however, that no facts, circumstances,
changes or effects (by themselves or when aggregated with any other facts, circumstances, changes
or effects) to the extent resulting from the following shall be deemed to be or constitute a
“Material Adverse Effect,” and no facts, circumstances, changes or effects to the extent resulting
from the following (by themselves or when aggregated with any other facts, circumstances, changes
or effects) shall be taken into account when determining whether a “Material Adverse Effect” has
occurred or may, would or could occur:




               (i) general market, economic or political conditions in the United States or any other
jurisdiction in which such Person or any of its Subsidiaries has substantial business or
operations, and any changes therein (including any condition or
changes arising out of acts of terrorism, war, weather conditions or other force majeure



-7-









 





events), except and only to the extent that such conditions have a disproportionate impact on such
Person and its Subsidiaries, taken as a whole, relative to other companies organized and based in
the U.S. and operating in the same industries in which such Person operates;



               (ii) general conditions in the financial services industry, and any changes therein (including
any condition or changes arising out of acts of terrorism, war, weather conditions or other force
majeure events), except and only to the extent that such conditions have a disproportionate impact
on such Person and its Subsidiaries, taken as a whole, relative to other companies organized and
based in the U.S. and operating in the same industries in which such Person operates;



               (iii) changes or proposed changes in GAAP or Law occurring after the date of this Agreement;



               (iv) the public announcement of this Agreement or pendency of the Merger, including any loss
of or adverse change in the relationship of such Person and its Subsidiaries with their respective
employees, customers, partners or suppliers related thereto to the extent resulting from the
announcement of this Agreement or the pendency of the Merger;



               (v) any action or omission by such Person or its Subsidiaries taken with the prior written
consent of the other parties hereto;



               (vi) any failure of such Person to meet internal or analysts’ estimates, projections or
forecasts of revenues, earnings or other financial or business metrics, in and of itself (it being
understood that, subject to the other exceptions set forth above, the underlying cause(s) of any
such failure, as well as the business and financial performance of such Person, may be taken into
consideration when determining whether a Material Adverse Effect has occurred or may, would or
could occur);



               (vii) any decline in the market price or change in the trading volume of such Person’s public
equity securities, in and of itself (it being understood that, subject to the other exceptions set
forth above, the underlying cause(s) of any such decline or change, as well as the business and
financial performance of such Person, may be taken into consideration when determining whether a
Material Adverse Effect has occurred or may, would or could occur); and



               (viii) with respect to the Company, any of the matters disclosed in the Company Disclosure
Schedule, and with respect to Parent, any of the matters disclosed in the Parent Disclosure
Schedule.



          (qq) “Nasdaq” shall mean the Nasdaq Global Select Market, any successor stock exchange
operated by The NASDAQ Stock Market LLC or any successor thereto.




          (rr) “Net Capital Rule” shall mean Rule 15c3-1 under the Exchange Act.




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          (ss) “NFA” shall mean the National Futures Association or any successor thereto.




          (tt) “Open Source License” shall mean any license, including, but not limited to, the
GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License
(MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source
License (SCSL,) the Sun Industry Standards License (SISL) and the Apache License, requiring
software to be disclosed or distributed as “free software”, “open source software” or in source
code form or redistributable at no charge.




          (uu) “Option Exchange Ratio” shall mean the sum of (x) the Stock Consideration plus
(y) the quotient obtained by dividing (1) the Cash Consideration, by (2) the volume-weighted
average price for a share of Parent Common Stock, rounded to the nearest one-tenth of a cent, as
reported on the Nasdaq Global Select Market for the trading day immediately prior to the day on
which the Effective Time occurs.




          (vv) “Order” shall mean any judgment, decision, decree, injunction, ruling, writ,
assessment or order of any Governmental Authority that is binding on any Person or its property
under applicable Laws.




          (ww) “OSC” shall mean the Ontario Securities Commission.


         
(xx) “Parent Board” shall mean the board of directors of Parent.




          (yy) “Parent Common Stock” shall mean the Common Stock, par value $0.01 per share, of
Parent.




          (zz) “Permitted Liens” shall mean any or all of the following: (i) Liens disclosed on
the consolidated balance sheet of such Person included in the most recent annual or quarterly
report filed by such Person with the SEC prior to the date of this Agreement, (ii) Liens for Taxes
and other similar governmental charges and assessments which are not yet due and payable or liens
for Taxes being contested in good faith by any appropriate proceedings for which adequate reserves
have been established; (iii) Liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like Liens arising in the ordinary course of business for sums not yet due
and payable; (iv) undetermined or inchoate Liens, charges and privileges and any statutory Liens,
licenses, charges, adverse claims, security interests or encumbrances of any nature whatsoever and
claimed or held by any Governmental Authority that are related to obligations that are not due or
delinquent; (v) security given in the ordinary course of business to any public utility,
Governmental Authority or other statutory or public authority; (vi) covenants, easements and
rights-of-way shown on public records, (vii) Liens imposed on the underlying fee interest in leased
property that are not caused by the Company or any of its Subsidiaries; (viii) Liens imposed under
applicable Law, including federal, state or foreign securities
Laws, and (ix) Liens that do not materially interfere with the value or the current use or
operation of the property subject thereto.




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          (aaa) “Person” shall mean any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or joint stock company),
firm or other enterprise, association, organization, entity or Governmental Authority.




          (bbb) “Registered Intellectual Property” shall mean applications, registrations and
filings for Intellectual Property Rights that have been registered or filed, with or by any
Government Authority.




          (ccc) “Sarbanes-Oxley Act” shall mean the Sarbanes-Oxley Act of 2002 or any successor
thereto.




          (ddd) “SEC” shall mean the United States Securities and Exchange Commission or any
successor thereto.




          (eee) “Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, or any successor statute, rules or regulations
thereto.




          (fff) “Source Code” shall mean software code, which may be printed out or displayed in
human readable form.




          (ggg) “Subsidiary” of any Person shall mean (i) a corporation more than fifty percent
(50%) of the combined voting power of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one of more other Subsidiaries of such Person or by such Person
and one or more other Subsidiaries thereof, (ii) a partnership of which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, is the general partner and has the power to direct the policies, management
and affairs of such partnership, (iii) a limited liability company of which such Person or one or
more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, is the managing member and has the power to direct the policies, management
and affairs of such company or (iv) any other Person (other than a corporation, partnership or
limited liability company) in which such Person, or one or more other Subsidiaries of such Person
or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and affairs thereof.




          (hhh) “Superior Proposal” shall mean any unsolicited, bona fide written offer or
proposal (that has not been withdrawn) for a transaction providing for the acquisition of all of
the outstanding voting securities of the Company which the Company Board shall have reasonably
determined in good faith (after consultation with Paragon or another financial advisor of
nationally recognized standing and the Company’s outside
legal counsel) (i) is more favorable, from a financial point of view, to the holders of
Company Common Stock than the transactions contemplated by this Agreement, (ii) is reasonably
likely to receive all requisite regulatory approvals, and (iii) is reasonably likely




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to be
consummated on the terms and conditions contemplated thereby, in each case taking into account, in
addition to any other factors determined by the Company Board to be relevant, (A) all financial
considerations relevant thereto, including conditions in the financial and credit markets, (B) the
identity of the Person(s) making such offer or proposal and the parties providing any of the
financing for the transaction contemplated thereby, and the prior history of such Person(s) and
sources of financing in connection with the consummation or failure to consummate similar
transactions, (C) the anticipated timing, conditions and prospects for completion of the
transaction contemplated by such offer or proposal, (D) the other terms and conditions of such
offer or proposal and the implications thereof on the Company, including relevant legal, regulatory
and other aspects of such offer or proposal deemed relevant by the Company Board, and (E) any offer
capable of acceptance made by Parent in connection therewith or response thereto.




          (iii) “Tax” shall mean (i) any and all U.S. federal, state, local and non-U.S. taxes,
including taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, escheat, excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and (ii) any liability for the payment of any amounts of the
type described in clause (i) as a result of being or ceasing to be a member of an affiliated,
consolidated, combined or unitary group for any period (including any liability under Treasury
Regulation Section 1.1502-6 or any comparable provision of foreign, state or local law, and
including any arrangement for group or consortium relief or similar arrangement).




          (jjj) “Tax Act” shall mean the Income Tax Act (Canada) and its regulations thereunder,
as amended.




          (kkk) “Tax Returns” shall mean all returns, declarations, reports, estimates,
statements and other documents filed or required to be filed in respect of any Taxes, including any
attachments, addenda or amendments thereto.




          (lll) “Underwater Option” shall mean each Company Option with a per share exercise
price equal to or greater than the sum of (i) the Cash Consideration plus (ii) the product of (1)
the Stock Consideration times (2) the volume-weighted average price for a share of Parent Common
Stock, rounded to the nearest one-tenth of a cent, as reported on the Nasdaq Global Select Market
for the trading day immediately prior to the day on which the Effective Time occurs.




     1.2 Additional Definitions. The following capitalized terms shall have the respective
meanings ascribed thereto in the respective sections of this Agreement set forth opposite each of
the capitalized terms below:



	 	 	 
	Term	 	Section Reference
	 	 	 
	401(k) Plan
	 	6.11(b)
	Adjusted Restricted Stock
	 	2.8(a)
	Agreement
	 	Preamble






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	Term	 	Section Reference
	 	 	 
	Antitrust Approval
	 	7.1
	Assumed Option
	 	2.8(e)
	Assumed Restricted Stock Unit
	 	2.8(f)
	Book-Entry Shares
	 	2.9(b)
	Cancelled Company Shares
	 	2.7(b)
	Capitalization Date
	 	3.4(a)
	Cash Consideration
	 	2.7(b)
	Certificate
	 	2.9(b)
	Certificate of Merger
	 	2.3(a)
	Closing
	 	2.2
	Closing Date
	 	2.2
	Collective Bargaining Agreements
	 	3.16(a)
	Company
	 	Preamble
	Company Board Recommendation
	 	6.7(a)
	Company Board Recommendation Change
	 	6.7(a)
	Company Disclosure Schedule
	 	Article III
	Company Insiders
	 	6.14
	Company Registered Intellectual Property
	 	3.20(a)
	Company Restricted Stock
	 	2.8(a)
	Company SEC Reports
	 	3.6(a)
	Company Securities
	 	3.4(c)
	Company Stockholder Meeting
	 	6.6(a)
	Confidentiality Agreement
	 	6.9
	Consent
	 	3.3(b)
	Continuing Employees
	 	6.11(d)
	D&O Insurance
	 	6.12(b)
	Delaware Secretary of State
	 	2.3(a)
	DGCL
	 	Recitals
	Dissenting Company Shares
	 	2.7(b)
	Effective Time
	 	2.3(a)
	Employee Plans
	 	3.15(a)
	ERISA Affiliate
	 	3.15(a)
	Exchange Agent
	 	2.9(a)
	Exchange Fund
	 	2.9(a)
	Final Surviving Corporation
	 	2.1(b)
	First Step Merger
	 	Recitals
	Foreign Employees
	 	3.15(j)
	In-Licenses
	 	3.20(g)
	Incentives
	 	3.14(o)
	Indemnified Parties
	 	6.12(a)
	Integrated Merger
	 	Recitals
	Interim Surviving Corporation
	 	2.1(a)
	International Employee Plans
	 	3.15(a)






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	Term	 	Section Reference
	 	 	 
	Intervening Event
	 	6.7(b)
	Investment Company Act
	 	3.11(e)
	IP Licenses
	 	3.20(h)
	Leased Real Property
	 	3.17
	Leases
	 	3.17
	Legal Proceeding Matters
	 	6.8(d)
	Material Contract
	 	3.13(a)
	Maximum Premium
	 	6.12(b)
	Merger
	 	Recitals
	Merger Consideration
	 	2.7(b)
	Merger Proposal
	 	6.6(a)
	Merger Sub One
	 	Preamble
	Merger Sub Two
	 	Preamble
	Option Exchange Program
	 	2.8(b)
	Option Exchange Proposal
	 	2.8(c)
	Out-Licenses
	 	3.20(h)
	Paragon
	 	3.24
	Parent
	 	Preamble
	Parent Disclosure Schedule
	 	Article IV
	Parent SEC Reports
	 	4.5(a)
	Permits
	 	3.11(a)
	Proxy Statement/Prospectus
	 	6.5(a)
	Qualifying Amendment
	 	6.5(c)
	Registration Statement
	 	6.5(a)
	Regulation M-A Filing
	 	6.5(d)
	Regulatory Filings
	 	3.11(c)
	Requisite Merger Approval
	 	3.2(c)
	Requisite Option Exchange Approval
	 	3.2(c)
	Restricted Stock Units
	 	2.8(b)
	Reviewable Transaction
	 	8.1(b)
	RoHS Directive
	 	1.1(y)
	Second Step Merger
	 	Recitals
	Specified Company Representations
	 	7.2(a)
	Specified Parent Representations
	 	7.3(a)
	Stock Consideration
	 	2.7(b)
	Subsidiary Securities
	 	3.5(d)
	Tax Opinions
	 	6.18
	Termination Date
	 	8.1(b)
	Termination Fee Amount
	 	8.3(b)
	Trade Secrets
	 	1.1(hh)
	Trademarks
	 	1.1(hh)
	Voting Agreement(s)
	 	Recitals
	WEEE Directive
	 	1.1(y)






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     1.3 Certain Interpretations.



          (a) Unless otherwise indicated, all references herein to Sections, Articles, Annexes, Exhibits
or Schedules, shall be deemed to refer to Sections, Articles, Annexes, Exhibits or Schedules of or
to this Agreement, as applicable.




          (b) Unless otherwise indicated, the words “include,” “includes” and “including,” when used
herein, shall be deemed in each case to be followed by the words “without limitation.”




          (c) As used in this Agreement, the word “extent” and the phrase “to the extent” shall mean the
degree to which a subject or other thing extends, and such word or phrase shall not mean simply
“if”.




          (d) As used in this Agreement, the singular or plural number shall be deemed to include the
other whenever the context so requires.




          (e) Unless otherwise indicated, all references herein to dollars or “$” shall mean and refer
to U.S. denominated dollars.




          (f) Unless otherwise indicated or the context otherwise requires, when reference is made
herein to a Person, such reference shall be deemed to include all direct and indirect Subsidiaries
of such Person.




          (g) Unless otherwise indicated or the context otherwise requires, all references herein to the
Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such
Person.




          (h) The table of contents and headings set forth in this Agreement are for convenience of
reference purposes only and shall not affect or be deemed to affect in any way the meaning or
interpretation of this Agreement or any term or provision hereof.




          (i) The parties hereto agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any Law, holding or rule
of construction providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.




ARTICLE II

THE MERGER




     2.1 The Integrated Merger.



          (a) Upon the terms and subject to the conditions set forth in this Agreement and the
applicable provisions of the DGCL, at the Effective Time, Merger Sub One shall be merged with and
into the Company in the First Step Merger, the separate corporate existence of Merger Sub One shall
thereupon cease and the Company shall




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continue as the surviving corporation of the First Step
Merger and as a wholly-owned Subsidiary of Parent. The Company, as the surviving corporation of
the First Step Merger, is referred to herein as the “Interim Surviving Corporation.”




          (b) As part of a single integrated plan, immediately following the Effective Time, upon the
terms and subject to the conditions set forth in this Agreement and the applicable provisions of
the DGCL, the Interim Surviving Corporation shall be merged with and into Merger Sub Two in the
Second Step Merger, the separate corporate existence of the Interim Surviving Corporation shall
thereupon cease and Merger Sub Two shall continue as the surviving corporation of the Second Step
Merger and as a wholly-owned Subsidiary of Parent. Merger Sub Two, as the surviving corporation of
the Second Step Merger, is referred to herein as the “Final Surviving Corporation.”




     2.2 The Closing. The consummation of the Integrated Merger shall take place at a closing
(the “Closing”) to occur at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 1301 Avenue of the Americas, 40th Floor, New York, New York, on a date and at a time
to be agreed upon by Parent, Merger Sub One, Merger Sub Two and the Company, which date shall be no
later than the second (2nd) Business Day after the satisfaction or waiver (to the extent
permitted hereunder) of the last to be satisfied or waived of the conditions set forth in
Article VII (other than those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such
conditions), or at such other location, date and time as Parent and the Company shall mutually
agree upon in writing (the date upon which the Closing shall actually occur pursuant hereto being
referred to herein as the “Closing Date”).



     2.3 Effective Time of First Step Merger and Second Step Merger.



          (a) Upon the terms and subject to the conditions set forth in this Agreement, promptly after
the Closing on the Closing Date, Parent, Merger Sub One and the Company shall cause the First Step
Merger to be consummated under Delaware Law by filing a certificate of merger in customary form and
substance (the “Certificate of Merger”) with the Secretary of State of the State of
Delaware (the “Delaware Secretary of State”) in accordance with the applicable provisions
of the DGCL (the time of such filing and acceptance by the Delaware Secretary of State, or such
later time as may be agreed in writing by Parent, Merger Sub One and the Company and specified in
the Certificate of Merger, being referred to herein as the “Effective Time”).




          (b) As soon as practicable after the Effective Time, Parent shall cause the Second Step Merger
to be consummated under Delaware Law by filing a certificate of merger in customary form and
substance with the Secretary of State of the State of Delaware in accordance with the applicable
provisions of the DGCL.




     2.4 Effect of the First Step Merger and Second Step Merger.



          (a) At the Effective Time, the effect of the First Step Merger shall be as provided in this
Agreement and the applicable provisions of the DGCL. Without limiting




-15-









 







the generality of the
foregoing (and subject thereto), at the Effective Time, all of the property, rights, privileges,
powers and franchises of the Company and Merger Sub One shall vest in the Interim Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub One shall become
the debts, liabilities and duties of the Interim Surviving Corporation.




          (b) At the effective time of the Second Step Merger, the effect of the Second Step Merger
shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of
the foregoing (and subject thereto), at the effective time of the Second Step Merger, except as
otherwise agreed to pursuant to the terms of this Agreement, all of the property, rights,
privileges, powers and franchises of the Interim Surviving Corporation shall vest in Merger Sub Two
as the surviving entity in the Second Step Merger, and all debts, liabilities and duties of the
Interim Surviving Corporation shall become the debts, liabilities and duties of Merger Sub Two as
the surviving entity in the Second Step Merger.




     2.5 Organizational Documents.



          (a) Interim Surviving Corporation.




               (i) At the Effective Time, subject to the provisions of Section 6.12, the Certificate
of Incorporation of the Company shall be amended and restated in its entirety to read identically
to the Certificate of Incorporation of Merger Sub One as in effect immediately prior to the
Effective Time, and such amended and restated Certificate of Incorporation shall become the
Certificate of Incorporation of the Interim Surviving Corporation until thereafter amended in
accordance with the applicable provisions of Delaware Law and such Certificate of Incorporation;
provided, however, that at the Effective Time the Certificate of Incorporation of the Interim
Surviving Corporation shall be amended so that the name of the Interim Surviving Corporation shall
be “thinkorswim Group Inc.”.



               (ii) At the Effective Time, subject to the provisions of Section 6.12, the Bylaws of
Merger Sub One as in effect immediately prior to the Effective Time shall become the Bylaws of the
Interim Surviving Corporation until thereafter amended in accordance with the applicable provisions
of Delaware Law, the Certificate of Incorporation of the Interim Surviving Corporation and such
Bylaws.



          (b) Final Surviving Corporation.




               (i) Unless otherwise determined by Parent prior to the Effective Time (but subject to
Section 6.12), the Certificate of Incorporation of Merger Sub Two as in effect immediately
prior to the effective time of the Second Step Merger shall be the
Certificate of Incorporation of the Final Surviving Corporation in the Second Step Merger
until thereafter amended in accordance with the applicable provisions of Delaware Law and such
Certificate of Incorporation; provided, however, that at the effective time of the Second Step
Merger, the Certificate of Incorporation of the Final Surviving Corporation



-16-









 







shall be amended so
that the name of the Final Surviving Corporation shall be “thinkorswim Group Inc.”.



               (ii) Unless otherwise determined by Parent prior to the Effective Time (but subject to
Section 6.12), the Bylaws of Merger Sub Two as in effect immediately prior to the effective
time of the Second Step Merger shall be the Bylaws of the Final Surviving Corporation until
thereafter amended in accordance with the applicable provisions of Delaware Law, the Certificate of
Incorporation of the Final Surviving Corporation and such Bylaws.



     2.6 Directors and Officers.



          (a) Interim Surviving Corporation. At the Effective Time, the directors of Merger Sub
One immediately prior to the Effective Time shall become the directors of the Interim Surviving
Corporation, each to hold office in accordance with the Certificate of Incorporation and Bylaws of
the Interim Surviving Corporation until their respective successors are duly elected or appointed
and qualified. At the Effective Time, the officers of Merger Sub One immediately prior to the
Effective Time shall become the officers of the Interim Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and Bylaws of the Interim Surviving Corporation
until their respective successors are duly appointed.




          (b) Final Surviving Corporation. At the effective time of the Second Step Merger, the
directors of the Interim Surviving Corporation shall become the directors of the Final Surviving
Corporation, each to hold the office in accordance with the Certificate of Incorporation and Bylaws
of the Final Surviving Corporation until their respective successors are duly elected and
qualified. At the effective time of the Second Step Merger, the officers of the Interim Surviving
Corporation immediately prior to the effective time of the Second Step Merger shall become the
officers of the Final Surviving Corporation, each to hold office in accordance with the Certificate
of Incorporation and Bylaws of the Final Surviving Corporation until their respective successors
are duly appointed.




     2.7 Effect of First Step Merger on Capital Stock of Constituent Corporations. Upon the
terms and subject to the conditions set forth in this Agreement, at the Effective Time, by virtue
of the First Step Merger and without any action on the part of Parent, Merger Sub One, the Company,
or the holders of any shares of Company Common Stock:



          (a) Merger Sub One Capital Stock. Each share of common stock, par value $0.01 per
share, of Merger Sub One issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of common stock of the
Interim Surviving Corporation, whereupon each certificate
evidencing ownership of such shares of common stock of Merger Sub One shall thereafter
evidence ownership of shares of common stock of the Interim Surviving Corporation.




          (b) Company Capital Stock.




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               (i) Each share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than any Cancelled Company Shares and any Dissenting Company Shares),
including any Company Restricted Stock that shall have ceased, as a result of or immediately prior
to the Effective Time, to be unvested or subject to a repurchase option, risk of forfeiture or
other condition pursuant to the terms of such Company Stock Award or other agreement governing such
Company Restricted Stock (which shall include any vesting as a result of any resignation delivered
pursuant to Section 6.13 hereof) shall be canceled and extinguished and automatically
converted into the right to receive a combination of (A) $3.34 in cash, without interest (such per
share cash amount being referred to herein as the “Cash Consideration”) plus (B) 0.3980
validly issued, fully paid and nonassessable shares of Parent Common Stock (such per share amount
being referred to herein as the “Stock Consideration”), upon the surrender of the
certificate representing such share of Company Common Stock (or the receipt of an agent’s message
in the case of Book-Entry Shares) in the manner set forth in Section 2.9 (or in the case of
a lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond, if required) in
the manner set forth in Section 2.11). For all purposes of and under this Agreement, the
term “Merger Consideration” shall mean the Cash Consideration plus the Stock Consideration,
together with any cash payable under Section 2.7(b)(iii) in lieu of fractional shares of
Parent Common Stock otherwise issuable pursuant hereto.



               (ii) Notwithstanding anything to the contrary set forth in this Agreement, (A) the Stock
Consideration shall be adjusted appropriately to reflect fully the effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of securities
convertible into shares of Parent Common Stock), reorganization, recapitalization, reclassification
or other like change with respect to Parent Common Stock having a record date on or after the date
hereof and prior to the Effective Time, and (B) the Cash Consideration and the Stock Consideration
shall be adjusted appropriately to reflect fully the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities convertible into shares
of Company Common Stock), reorganization, recapitalization, reclassification or other like change
with respect to Company Common Stock having a record date on or after the date hereof and prior to
the Effective Time (it being understood and agreed that the inclusion of this clause (B) shall not
be deemed to amend or modify in any respect the restrictions set forth in Article V).
Furthermore, notwithstanding anything to the contrary set forth in this Agreement, the Cash
Consideration shall be increased by an amount equal to the product of (x) the Stock Consideration
times (y) the per share amount of any cash dividend declared by Parent in respect of Parent Common
Stock having a record date on or after the date hereof and prior to the Effective Time.



               (iii) No fraction of a share of Parent Common Stock will be issued by virtue of the First Step
Merger or pursuant to this Agreement, and in lieu thereof
each holder of record of shares of Company Common Stock who would otherwise be entitled to a
fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock that otherwise would be received by such holder of record) shall be entitled to
receive from Parent, upon surrender of such holder’s



-18-









 







Certificate(s) in the manner set forth in
Section 2.9, an amount of cash (rounded to the nearest whole cent), without interest, equal
to the product of such fraction multiplied by the volume-weighted average price, rounded to the
nearest one-tenth of a cent, of Parent Common Stock as reported by Nasdaq for the five (5) trading
days immediately preceding the Closing Date.



               (iv) Notwithstanding anything to the contrary set forth in this Agreement, upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the
First Step Merger and without any action on the part of Parent, Merger Sub One, the Company, or the
holders of any shares of Company Common Stock, each share of Company Common Stock owned by Parent,
any Subsidiary of Parent or the Company (other than shares in trust accounts, managed accounts and
the like for the benefit of customers, or shares held in satisfaction of a debt previously
contracted) (collectively, “Cancelled Company Shares”), in each case as of immediately
prior to the Effective Time, shall be cancelled and extinguished without any conversion thereof or
consideration paid therefor.



               (v) Notwithstanding anything to the contrary set forth in this Agreement, all shares of
Company Common Stock issued and outstanding immediately prior to the Effective Time and held by a
stockholder who shall have neither voted in favor of the First Step Merger nor consented thereto in
writing and who shall have properly and validly exercised such stockholder’s statutory rights of
appraisal in respect of such shares of Company Common Stock in accordance with Section 262 of the
DGCL (“Dissenting Company Shares”) shall not be converted into, or represent the right to
receive, the Merger Consideration pursuant to this Section 2.7. Any such stockholder shall
be entitled to receive payment of the appraised value of such Dissenting Company Shares in
accordance with the provisions of Section 262 of the DGCL; provided, however, that notwithstanding
the foregoing, all Dissenting Company Shares held by a stockholder who shall have failed to perfect
or who shall have effectively withdrawn or lost such stockholder’s statutory right to appraisal of
such Dissenting Company Shares under such Section 262 of the DGCL shall thereupon be deemed to have
been converted into, and to have become exchangeable for, the right to receive the Merger
Consideration, without any interest thereon, upon surrender of the certificate or certificates that
formerly evidenced such shares of Company Common Stock in the manner set forth in Section
2.9. The Company shall give Parent (x) prompt notice of any demands for appraisal received by
the Company, withdrawals of such demands, and any other instruments served pursuant to Delaware Law
and received by the Company in respect of Dissenting Company Shares and (y) the opportunity to
direct and control all negotiations and proceedings with respect to demands for appraisal under
Delaware Law in respect of Dissenting Company Shares. The Company shall not, except with the prior
written consent of Parent, voluntarily make any payment with respect to any demands for appraisal
or settle or offer to settle any such demands for payment in respect of Dissenting Company Shares.



-19-









 





     2.8 Company Stock Awards.



          (a) With respect to any awards of shares of Company Common Stock that will be, immediately
prior to the Effective Time, unvested or subject to a repurchase option, risk of forfeiture or
other condition (including restrictions on transferability) under any applicable restricted stock
purchase agreement or other agreement or arrangement with the Company (“Company Restricted
Stock”) that does not by its terms provide that such repurchase option, risk of forfeiture or
other condition lapses upon consummation of the transactions contemplated hereby, such Company
Restricted Stock shall, notwithstanding any other provision of this Agreement, be converted into
restricted shares, on the same terms and conditions as applied to each such share of Company
Restricted Stock immediately prior to the Effective Time, with respect to the number of whole
shares of Parent Common Stock that is equal to the number of shares of Company Common Stock subject
to such Company Restricted Stock immediately prior to the Effective Time multiplied by the Option
Exchange Ratio (rounded down to the nearest whole share) (the “Adjusted Restricted Stock”).
The Adjusted Restricted Stock shall otherwise remain subject to the terms governing the applicable
Company Stock Award evidencing the award of such Adjusted Restricted Stock.




          (b) To the extent permitted by applicable Law and Governmental Authorities, the Company shall
make an offer to all holders of Underwater Options outstanding under the Company Option Plans
immediately prior to the Effective Time, pursuant to which the holder affirmatively would agree in
writing to the cancellation of all (but not less than all) of his or her Underwater Options in
exchange for the grant by the Company to such holder of an award of restricted stock units (the
“Option Exchange Program”). The Company and the Parent shall work together in good faith
to determine the terms and conditions of both the Option Exchange Program and the restricted stock
units to be granted thereunder (the “Restricted Stock Units”); provided, however, that the
Restricted Stock Units shall be exempt from Section 409A of the Code; and, under all circumstances,
the acceptance and completion by the Company of the Option Exchange Program shall occur immediately
prior to the Effective Time following the satisfaction or waiver of the conditions set forth in
Article VII.




          (c) The Company shall, subject to and in accordance with Section 6.6, seek stockholder
approval (if required by applicable Law) for (i) the Option Exchange Program, (ii) amendment(s) to
the applicable Company Option Plans or approval of a new plan to permit the grant of Restricted
Stock Units to be issued pursuant to the Option Exchange Program; and (iii) any increase in the
share reserves of the applicable Company Option Plans to ensure sufficient shares are available to
grant the Restricted Stock Units (collectively these stockholder proposals are referred to
hereinafter as the “Option Exchange Proposal”).




          (d) The Company shall perform its obligations under this Section 2.8 in compliance
with the applicable tender offer rules of the Securities Act and the Exchange Act. The terms and
conditions of such a tender offer shall be subject to the advance review and approval of Parent,
which approval shall not be unreasonably withheld or delayed.




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          (e) At the Effective Time, each Company Option (including any Underwater Option that is not
cancelled pursuant to the Option Exchange Program) that is outstanding immediately prior to the
Effective Time, whether or not then vested or exercisable (each, an “Assumed Option”),
shall be assumed by Parent. In accordance with its terms and subject to the requirements of
Section 422 of the Code, each Assumed Option shall (i) be converted into an option to acquire that
number of shares of Parent Common Stock equal to the product obtained by multiplying (x) the number
of shares of Company Common Stock subject to such Company Option, and (y) the Option Exchange
Ratio, rounded down to the nearest whole share of Parent Common Stock, and (ii) have an exercise
price per share equal to the quotient obtained by dividing (x) the per share exercise price of
Company Common Stock subject to such Assumed Option, by (y) the Option Exchange Ratio (which price
per share shall be rounded up to the nearest whole cent). Each Assumed Option shall otherwise be
subject to the same terms and conditions (including as to vesting and exercisability) as were
applicable under the respective Company Option immediately prior to the Effective Time. It is the
intention of the parties that each Assumed Option that qualified as an incentive stock option (as
defined in Section 422 of the Code) shall continue to so qualify, to the maximum extent
permissible, following the Effective Time.




          (f) At the Effective Time, each Company Restricted Stock Unit (which specifically shall
include each Restricted Stock Unit granted pursuant to the Option Exchange Program) that is
outstanding immediately prior to the Effective Time shall be assumed by Parent (each, an
“Assumed Restricted Stock Unit”). In accordance with its terms, each Assumed Restricted
Stock Unit shall be converted into a restricted stock unit to acquire that number of shares of
Parent Common Stock equal to the product obtained by multiplying (x) the number of shares of
Company Common Stock subject to such Company Restricted Stock Unit, and (y) the Option Exchange
Ratio, rounded down to the nearest whole share of Parent Common Stock. Each Assumed Restricted
Stock Unit shall otherwise be subject to the same terms and conditions (including as to vesting) as
were applicable under the respective Company Restricted Stock Unit immediately prior to the
Effective Time.




          (g) The Company shall take all actions necessary to implement a program for Persons holding
Company Options that are or will be vested at any time prior to the Effective Time to exercise such
Company Options contingent upon the Closing; provided, however, that in no event shall the Company
be obligated to recommend, request or require that any such Company Options be exercised prior to
the Effective Time.




          (h) Prior to the Closing, and subject to prior review and approval by Parent (which approval
shall not be unreasonably withheld or delayed), the Company shall take all actions necessary to
effect the transactions anticipated by this Section 2.8 under all Contracts relating to
Company Options, Restricted Stock Units and Company Restricted Stock including specifically
obtaining any required consents and delivering all required notices.




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          (i) Notwithstanding anything herein to the contrary, if consummation of the exchange offer in
connection with the Option Exchange Program contemplated by this Agreement requires information
regarding Parent that Parent does not provide to the Company, then the Company shall be released
from all representations, warranties, covenants and obligations under this Agreement expressly
relating to the Option Exchange Program or Option Exchange Proposal, including under this
Section 2.8, Article III and Section 6.6.




     2.9 Exchange Fund; Exchange of Shares.



          (a) Exchange Fund.




               (i) Parent shall appoint a bank or trust company reasonably acceptable to the Company to act
as the exchange agent for the Merger (the “Exchange Agent”) pursuant to an agreement
reasonably acceptable to the Company entered into prior to the date on which Parent and the Company
disseminate the Proxy Statement/Prospectus.



               (ii) At or prior to the Closing, Parent shall deposit (or cause to be deposited) with the
Exchange Agent, for the benefit of the holders of shares of Company Common Stock, for exchange in
accordance with the terms and conditions of this Article II, the following:



                    (A) a number of shares of Parent Common Stock sufficient to issue all Stock Consideration
issuable pursuant to Section 2.7(b)(i);



                    (B) cash in an amount sufficient to pay all Cash Consideration payable pursuant to Section
2.7(b)(i); and



                    (C) cash in an amount sufficient to make all requisite payments of cash in lieu of fractional
shares payable pursuant to Section 2.7(b)(iii) and any dividends or other distributions
which holders of shares of Company Common Stock may be entitled pursuant to Section 2.9(c).


All shares of Parent Common Stock and cash deposited with the Exchange Agent pursuant hereto shall
hereinafter be referred to as the “Exchange Fund.” Pursuant to irrevocable instructions,
the Exchange Agent shall promptly deliver the Merger Consideration from the Exchange Fund to the
former Company stockholders who are entitled thereto pursuant to Section 2.7.




          (b) Exchange Procedures.




               (i) Promptly following the Effective Time, Parent and Merger Sub One shall cause the Exchange
Agent to mail to each holder of record (as of immediately prior to the Effective Time) of a
certificate that represented outstanding shares of Company Common Stock as of immediately prior to
the Effective Time (a “Certificate”), and each holder of record of uncertificated shares of
Company Common Stock represented by book-entry shares (“Book-Entry Shares”) as of
immediately prior to



-22-









 







the Effective Time, (A) a letter of transmittal in customary form (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent), and (B) instructions for use in effecting the
surrender of Certificates (or Book-Entry Shares) in exchange for the Merger Consideration issuable
and payable in respect thereof (in accordance with Section 2.7(b)) and any dividends or
other distributions to which such holders is entitled to receive pursuant to Section
2.9(c).



               (ii) Upon surrender of Certificates for cancellation to the Exchange Agent (or upon receipt of
an appropriate agent’s message in the case of Book-Entry Shares), together with a letter of
transmittal, properly completed and validly executed in accordance with the instructions thereto,
the holders of such Certificates and Book-Entry Shares shall be entitled to receive in exchange
therefor (A) the number of whole shares of Parent Common Stock (after taking into account all
Certificates surrendered by such holder of record) to which such holder is entitled pursuant to
Section 2.7(b) (which, at the election of Parent, may be in uncertificated book entry form
unless a physical certificate is requested by the holder of record or is otherwise required by
applicable Law), (B) the cash amounts such holders are entitled to receive pursuant to Section
2.7(b), (C) the cash payable in lieu of fractional shares of Parent Common Stock such holder is
entitled to receive pursuant to Section 2.7(b)(iii), and (D) any dividends or distributions
to which such holders are entitled pursuant to Section 2.9(c), and any Certificates or
Book-Entry Shares so surrendered shall forthwith be canceled. The Exchange Agent shall accept such
Certificates and Book-Entry Shares upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance with normal exchange
practices. No interest shall be paid or accrued for the benefit of holders of the Certificates or
Book-Entry Shares on any cash amounts payable upon the surrender of such Certificates or Book-Entry
Shares pursuant to this Section 2.9. Until so surrendered, outstanding Certificates and
Book-Entry Shares shall be deemed, from and after the Effective Time, to evidence only the right to
receive the Merger Consideration issuable and payable in respect thereof and any dividends or
distributions payable or issuable in respect thereof pursuant to Section 2.9(c). Exchange
of Book-Entry Shares shall be effected in accordance with the customary procedures in respect of
shares represented by book entry on the stock ledger of the Company.



          (c) Dividends and Other Distributions. No dividends or other distributions declared
or made after the date hereof with respect to Parent Common Stock with a record date after the
Effective Time, and no payment in lieu of fractional shares pursuant to
Section 2.7(b)(iii), will be paid to the holders of any unsurrendered Certificates or
Book-Entry Shares with respect to the shares of Parent Common Stock represented thereby until the
holders of record of such Certificates or Book-Entry Shares shall surrender such Certificates or
Book-Entry Shares in accordance with the terms of Section 2.9(b). Subject to applicable
Law, promptly following the surrender of any such Certificates, the Exchange Agent shall deliver to
the record holders thereof, without interest, any dividends or other distributions with a record
date after the Effective Time and theretofore paid with respect to such whole shares of Parent
Common Stock and, at the




-23-









 







appropriate payment date, the amount of dividends or other distributions
with a record date
after the Effective Time and a payment date subsequent to such surrender payable with respect
to such whole shares of Parent Common Stock.




          (d) Transfers of Ownership. In the event that shares of Parent Common Stock are to be
issued in a name other than that in which the Certificates surrendered in exchange therefor are
registered (including as a result of a transfer of ownership of shares of Company Common Stock that
has not been registered in the stock transfer books or ledger of the Company), it will be a
condition of the issuance of such shares of Parent Common Stock that the Certificates so
surrendered are properly endorsed and otherwise in proper form for surrender and transfer and the
Person requesting such payment has paid to Parent (or any agent designated by Parent) any transfer
or other Taxes required by reason of the issuance of shares of Parent Common Stock in any name
other than that of the registered holder of the Certificates surrendered, or established to the
satisfaction of Parent (or any agent designated by Parent) that such transfer or other Taxes have
been paid or are otherwise not payable.




          (e) Required Withholding. Each of the Exchange Agent, Parent and the Final Surviving
Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise
deliverable pursuant to this Agreement to any holder or former holder of shares of Company Common
Stock such amounts as may be required to be deducted or withheld therefrom under United States
federal or state, local or foreign law. To the extent that such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as having been paid
to the Person to whom such amounts would otherwise have been paid.




          (f) No Liability. Notwithstanding anything to the contrary set forth in this
Agreement, none of the Exchange Agent, Parent, the Interim Surviving Corporation, the Final
Surviving Corporation or any other party hereto shall be liable to a holder of shares of Parent
Common Stock or Company Common Stock for any amount properly paid to a public official pursuant to
any applicable abandoned property, escheat or similar Laws.




          (g) Termination of Exchange Fund. At the request of Parent, any portion of the
Exchange Fund which remains undistributed or unclaimed on the date that is six (6) months
immediately following the Effective Time shall be delivered to Parent, and any holders of the
Certificates who have not theretofore surrendered Certificates in compliance with this
Section 2.9 shall thereafter look only to Parent for issuance or payment of the Merger
Consideration issuable and payable in respect thereto pursuant to Section 2.7(b) and
issuance and payment of any dividends or other distributions payable or issuable in respect thereof
pursuant to Section 2.9(c). Any portion of the Exchange Fund that remains undistributed or
unclaimed as of immediately prior to such time as such amounts would otherwise escheat to or become
property of any Governmental Authority shall, to the extent permitted by applicable Law, become the
property of Parent, free and clear of any claims or interest of any Person previously entitled
thereto.




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     2.10 No Further Ownership Rights in Company Common Stock. Subject to the provisions of
Section 2.7, from and after the Effective Time, all shares of Company
Common Stock shall no longer be outstanding and shall automatically be cancelled, retired and
cease to exist, and each holder of a Certificate theretofore representing any shares of Company
Common Stock shall cease to have any rights with respect thereto, except the right to receive the
Merger Consideration issuable and payable in respect thereof pursuant to Section 2.7(b) and
any dividends or other distributions issuable or payable in respect thereof pursuant to
Section 2.9(c) upon the surrender thereof in accordance with the provisions of
Section 2.9. The Merger Consideration issued upon the surrender for exchange of shares of
Company Common Stock in accordance with the terms hereof (including any cash paid in respect
thereof pursuant to Section 2.7(a) and Section 2.9(c)), or with respect to the
Assumed Restricted Stock, shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall be no further registration of
transfers on the records of the Interim Surviving Corporation of shares of Company Common Stock
which were outstanding immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Parent, the Interim Surviving Corporation or the Final Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in this
Article II.



     2.11 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have
been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the
Merger Consideration that is issuable and payable in respect thereof pursuant to Section
2.7(b) and any dividends or distributions issuable or payable in respect thereof pursuant to
Section 2.9(c); provided, however, that Parent and/or the Exchange Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the owners of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Parent, the Interim Surviving Corporation, the
Final Surviving Corporation or the Exchange Agent with respect to the Certificates alleged to have
been lost, stolen or destroyed.



     2.12 Tax Treatment. The Integrated Merger is intended to constitute a “reorganization”
within the meaning of Section 368(a) of the Code. Parent and the Company intend that the First
Step Merger and the Second Step Merger will constitute integrated steps in a single “plan of
reorganization” within the meaning of Treas. Reg. §1.368-2(g) and 1.368-3, which plan of
reorganization the parties adopt by executing this Agreement.



     2.13 Taking of Necessary Further Action. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this Agreement and to vest
the Interim Surviving Corporation or the Final Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of the Company and
Merger Sub One, the directors and officers of the Company and Merger Sub One shall take all such
lawful and necessary action. If, at any time after the effective time of the Second Step Merger,
any further action is necessary or desirable to carry out the purposes of this Agreement and to
vest the Final Surviving



-25-









 







Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of the Interim Surviving Corporation and Merger Sub Two,
the directors and officers of the Interim Surviving Corporation and Merger Sub Two shall take all such lawful and necessary
action.



ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY




     Except as set forth in the disclosure letter delivered by the Company to Parent dated as of
the date hereof (the “Company Disclosure Schedule”), which expressly identifies the Section
(and, if applicable, subsection) to which such exception relates (it being understood and hereby
agreed that any disclosure set forth in the Company Disclosure Schedule relating to one Section or
subsection of this Agreement shall also apply to any other Sections and subsections of this
Agreement if and solely to the extent that it is reasonably apparent on the face of such disclosure
(without reference to the underlying documents referenced therein) that such disclosure also
relates to such other Sections or subsections), the Company hereby represents and warrants to
Parent, Merger Sub One and Merger Sub Two as follows:



     3.1 Organization and Standing. The Company is a corporation duly organized, validly
existing and in good standing under Delaware Law. The Company has the requisite corporate power
and authority to carry on its respective business as it is presently being conducted and to own,
lease or operate its respective properties and assets. The Company is duly qualified to do
business and is in good standing in each jurisdiction where the character of its properties owned
or leased or the nature of its activities make such qualification necessary (to the extent the
“good standing” concept is applicable in the case of any jurisdiction outside the United States),
except where the failure to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The Company has delivered or made
available to Parent complete and correct copies of (a) the certificates of incorporation and bylaws
of the Company, in each case as in effect on the date hereof, and (b) all actions taken by written
consent and all minutes (or, in the case of draft minutes or written consents, the most recent
drafts thereof) of all meetings of the stockholders, the Company Board and each committee of the
Company Board since January 1, 2006. The Company is not in material violation of its certificate
of incorporation or bylaws, and the Company has not violated its certificate of incorporation or
bylaws in any material respect since January 1, 2006.



     3.2 Corporate Approvals.



          (a) The Company has all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder, and subject to obtaining the Requisite Merger
Approval, to consummate the transactions contemplated hereby. The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations hereunder, and the
consummation by the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company other than, in the case of the
consummation of the




-26-









 







Merger, obtaining the Requisite Merger Approval, and no additional corporate or
other actions or proceedings on the part of the Company are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and, assuming the due authorization, execution and
delivery by Parent, Merger Sub One and Merger Sub Two, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, except
that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting or relating to creditors’ rights generally and is
subject to general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).




          (b) At a meeting duly called and held on January 7, 2009, the Company Board unanimously (i)
determined that this Agreement is advisable, (ii) determined that this Agreement and the
transactions contemplated hereby are fair to, and in the best interests of, the Company
stockholders, (iii) approved this Agreement and the transactions contemplated hereby, and (iv)
resolved to recommend that the stockholders of the Company approve the Merger Proposal at the
Company Stockholder Meeting. As of the date hereof, the Company Board has not rescinded or
modified in any way the foregoing determinations and actions.




          (c) Assuming that the representations of Parent and the Merger Subs set forth in
Section 4.12 are accurate, the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock, voting together as a class, in favor of the Merger
Proposal (the “Requisite Merger Approval”) is the only vote of the holders of any class or
series of Company Capital Stock necessary (under applicable Laws or otherwise) to adopt this
Agreement and consummate the Merger. The affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock, voting together as a class, in favor of the Option
Exchange Proposal (the “Requisite Option Exchange Approval”) is the only vote of the
holders of any class or series of Company Capital Stock necessary (under applicable Laws or
otherwise) to consummate the Option Exchange Program.




     3.3 Non-contravention; Required Consents.



          (a) The execution, delivery or performance by the Company of this Agreement, the consummation
by the Company of the transactions contemplated hereby and the compliance by the Company with any
of the terms hereof do not and will not (i) violate or conflict with any provision of the
certificate of incorporation or bylaws or other equivalent constituent documents of the Company or
any of its Subsidiaries, (ii) subject to obtaining such Consents set forth in
Section 3.3(a)(ii) of the Company Disclosure Schedule, violate, conflict with, or result in
the breach of or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration under, any Contract to which the Company or
any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their




-27-









 







properties or assets may be bound, (iii) assuming compliance with the matters referred to in
Section 3.3(b) and, in the case of the consummation of the Merger, subject to obtaining the
Requisite Merger Approval, violate or conflict with any Law or Order applicable to the Company
or any of its Subsidiaries or by which any of their properties or assets are bound or (iv) result
in the creation of any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries, except, in the case of each of clauses (ii), (iii) and (iv) above, for such
violations, conflicts, breaches, defaults, terminations, accelerations or Liens which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.




          (b) No consent, approval, Order or authorization of, or filing or registration with, or
notification to (any of the foregoing being a “Consent”), any Governmental Authority is
required on the part of the Company or any of its Subsidiaries in connection with the execution,
delivery and performance by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby, except (i) the filing and recordation of the Certificate of
Merger with the Secretary of State of the State of Delaware, (ii) such filings and approvals as may
be required by any U.S. federal, state or non-U.S. securities laws or rules and regulations
promulgated thereunder, federal commodity futures laws, or rules of a self-regulatory organization,
including compliance with any applicable requirements of the Exchange Act, the Advisers Act, the
CEA, or the rules of FINRA or the NFA, (iii) such filings, notices and approvals as may be required
by any Canadian provincial or territorial securities laws or securities regulators or rules of
IIROC or other self-regulatory organizations, (iv) compliance with any applicable requirements of
the HSR Act and any applicable foreign antitrust, competition or merger control laws and (v) such
other Consents, the failure of which to obtain would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.




     3.4 Capitalization.



          (a) The authorized capital stock of the Company consists of (i) one hundred million
(100,000,000) shares of Company Common Stock, and (ii) one million (1,000,000) shares of Company
Preferred Stock. As of the close of business on January 6, 2009 (the “Capitalization
Date”): (A) 66,760,578 shares of Company Common Stock were issued and outstanding, of which
191,775 were unvested and subject to a right of repurchase as of such date, (B) no shares of
Company Preferred Stock were issued and outstanding and (C) there were no shares of Company Capital
Stock held by the Company as treasury shares. Since the close of business on the Capitalization
Date, the Company has not issued or authorized the issuance of any shares of Company Capital Stock
other than pursuant to the exercise of Company Options granted under a Company Option Plan in
compliance with the terms of this Agreement. All outstanding shares of Company Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and free of any
preemptive rights.




          (b) The Company has reserved 5,109,874 shares of Company Common Stock for issuance under the
thinkorswim Group Inc. Second Amended and Restated 2001




-28-









 







Stock Option Plan. As of the close of
business on the Capitalization Date, with respect to the Company Option Plans, there were
outstanding Company Options to purchase or
otherwise acquire 5,505,591 shares of Company Common Stock, of which 3,159,161 were
exercisable as of such date and, since such date, the Company has not granted, committed to grant
or otherwise created or assumed any obligation with respect to any Company Options or Company
Restricted Stock, other than as permitted by Section 5.1. The exercise price of each
Company Option is no less than the fair market value of a share of Company Common Stock on the date
of grant of such Company Option. All grants of Company Options and shares of Company Restricted
Stock were validly issued and properly approved by the Company Board in accordance with all
applicable Laws and the Employee Plans and no such grants involved any “backdating” or similar
practices with respect to the effective date of grant.




          (c) Except as set forth in this Section 3.4, there are (i) no outstanding shares of
capital stock of, or other equity or voting interest in, the Company, (ii) no outstanding
securities of the Company convertible into or exchangeable for shares of capital stock of, or other
equity or voting interest in, the Company, (iii) no outstanding options, warrants, rights or other
commitments or agreements to acquire from the Company, or that obligates the Company to issue, any
capital stock of, or other equity or voting interest in, or any securities convertible into or
exchangeable for shares of capital stock of, or other equity or voting interest in, the Company,
(iv) no obligations of the Company to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment relating to any
capital stock of, or other equity or voting interest (including any voting debt) in, the Company
(the items in clauses (i), (ii), (iii) and (iv), together with the capital stock of the Company,
being referred to collectively as “Company Securities”) and (v) no other obligations by the
Company or any of its Subsidiaries to make any payments based on the price or value of any Company
Securities. There are no outstanding agreements of any kind which obligate the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities. Section
3.4(c) Part 1 of the Company Disclosure Schedule sets forth, with respect to each outstanding
Company Option, the name of the holder of such option, the number of shares of Company Common Stock
issuable upon the exercise of such option, the exercise price of such option, the date on which
such option was granted, the vesting schedule for such option (including any acceleration
provisions with respect thereto), including the extent unvested and vested to date, and whether
such option is intended to qualify as an incentive stock option as defined in Section 422 of the
Code. Section 3.4(c) Part 2 of the Company Disclosure Schedule sets forth, with respect to
each holder of Company Restricted Stock, the name of the holder of such award, the number of shares
of Company Restricted Stock held by such holder, the repurchase price of such Company Restricted
Stock, the date on which such Company Restricted Stock was purchased or granted, the applicable
vesting schedule pursuant to which the Company’s right of repurchase or forfeiture lapses, and the
extent to which such Company right of repurchase or forfeiture has lapsed as of the date hereof.
There are no commitments or agreements of any character to which the Company is bound obligating
Company to waive its right of repurchase or forfeiture with respect to any Company Restricted Stock
as a




-29-









 







result of the Merger (whether alone or upon the occurrence of any additional or subsequent
events).




          (d) Neither the Company nor any of its Subsidiaries is a party to any agreement restricting
the transfer of, relating to the voting of, requiring registration of, or granting any preemptive
rights, anti-dilutive rights or rights of first refusal or similar rights with respect to any
securities of the Company.




     3.5 Subsidiaries.



          (a) Section 3.5(a) of the Company Disclosure Schedule sets forth a complete and
accurate list of the name and jurisdiction of organization of each Subsidiary of the Company and
includes details of their capitalization, shareholders and registrations with commercial registers.
Except for the Subsidiaries, securities and other interests held in a fiduciary capacity and
beneficially owned by third parties, the Company does not own, directly or indirectly, any capital
stock of, or other equity or voting interest in, any Person, other than capital stock of, or other
equity or voting interests in, any Person that represents less than one percent (1%) of the issued
and outstanding shares of capital stock of, or other equity or voting interests in, such Person.




          (b) Each of the Company’s Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its respective organization (to the extent the “good
standing” concept is applicable in the case of any jurisdiction outside the United States). Each
of the Company’s Subsidiaries has the requisite corporate or other applicable power and authority
to carry on its respective business as it is presently being conducted and to own, lease or operate
its respective properties and assets. Each of the Company’s Subsidiaries is duly qualified to do
business and is in good standing in each jurisdiction where the character of its properties owned
or leased or the nature of its activities make such qualification necessary (to the extent the
“good standing” concept is applicable in the case of any jurisdiction outside the United States),
except where the failure to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The Company has delivered or made
available to Parent complete and correct copies of the certificate of incorporation and bylaws or
other equivalent constituent documents, as amended to date, of each of the Company’s Subsidiaries.
None of the Company’s Subsidiaries is in violation of its certificate of incorporation, bylaws or
other applicable constituent governing documents, and none of the Company’s Subsidiaries has
violated its certificate of incorporation, bylaws or other applicable constituent governing
documents since January 1, 2006, in each case except such violations that would not have,
individually or in the aggregate, a Material Adverse Effect on the Company.




          (c) All of the outstanding capital stock of, or other equity or voting interest in, each
Subsidiary of the Company (i) have been duly authorized, validly issued and are fully paid and
nonassessable and (ii) are owned, directly or indirectly, by the Company, free and clear of all
Liens other than restrictions on transfer imposed by applicable Law.




-30-









 








          (d) There are no outstanding (i) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock of, or other equity
or voting interests in, any Subsidiary of the Company, (ii) options, warrants, rights or other
commitments or agreements to acquire from the Company or any of its Subsidiaries, or that obligate
the Company or any of its Subsidiaries to issue, any capital stock of, or other equity or voting
interest in, or any securities convertible into or exchangeable for shares of capital stock of, or
other equity or voting interest in, any Subsidiary of the Company, (iii) obligations of the Company
to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable
security or other similar agreement or commitment relating to any capital stock of, or other equity
or voting interest (including any voting debt) in, any Subsidiary of the Company (the items in
clauses (i), (ii) and (iii), together with the capital stock of the Subsidiaries of the Company,
being referred to collectively as “Subsidiary Securities”) or (iv) other obligations by the
Company or any of its Subsidiaries to make any payments based on the price or value of any
Subsidiary Securities. There are no outstanding agreements of any kind which obligate the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.




     3.6 SEC Reports; Other Reports.



          (a) The Company has filed all forms, reports and documents with the SEC that have been
required to be filed by it under applicable Laws since January 1, 2006 and prior to the date
hereof, and the Company will file prior to the Effective Time all forms, reports and documents with
the SEC that are required to be filed or furnished by it under applicable Laws prior to such time
(all such forms, reports and documents, together with any other forms, reports or other documents
filed or furnished by the Company with the SEC on or prior to the Effective Time that are not
required to be so filed, the “Company SEC Reports”). Each Company SEC Report complied, or
will comply, as the case may be, as of its filing date, in all material respects with the
applicable requirements of the Securities Act, the Exchange Act or the Advisers Act, as the case
may be, each as in effect on the date such Company SEC Report was, or will be, filed. True and
correct copies of all Company SEC Reports filed prior to the date hereof, whether or not required
under applicable Laws, have been furnished to Parent or are publicly available in the Electronic
Data Gathering, Analysis and Retrieval (EDGAR) and IARD databases of the SEC. As of its filing
date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of
such amended or superseding filing), each Company SEC Report did not and will not contain, as the
case may be, any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they
were made, not misleading. None of the Company’s Subsidiaries is required to file any forms,
reports or other documents with the SEC. No executive officer of the Company has failed to make
the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act with
respect to any Company SEC Report, except as disclosed in certifications filed with the Company SEC
Reports. Neither the Company nor any of its executive officers has received notice from any
Governmental Authority challenging or questioning the accuracy, completeness, form or manner of
filing of such certifications. There are no outstanding written comments from the SEC with respect
to any of the Company SEC Reports.




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          (b) The Company and each of its Subsidiaries have timely filed all material reports,
registrations and statements, together with any amendments required to be made with respect
thereto, that they were required to file since January 1, 2006, with any Governmental Authority
(other than the SEC) and have paid all material fees and assessments due and payable in connection
therewith.




     3.7 Financial Statements and Controls.



          (a) The consolidated financial statements of the Company and its Subsidiaries filed in or
furnished with the Company SEC Reports complied, and in the case of consolidated financial
statements to be filed in or furnished in Company SEC Reports after the date hereof, will comply,
in all material respects with the published rules and regulations of the SEC with respect thereto
and they have been or will be, as the case may be, prepared in accordance with GAAP consistently
applied during the periods and at the dates involved (except as may be indicated in the notes
thereto and, in the case of unaudited interim financial statements, as may be permitted by the SEC
for Quarterly Reports on Form 10-Q), and fairly present in all material respects, or will fairly
present in all material respects, as the case may be, the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof and the consolidated results of operations and
cash flows for the periods then ended, subject, in the case of unaudited interim financial
statements, to normal and year-end audit adjustments as permitted by GAAP and the applicable rules
and regulations of the SEC and any other adjustments expressly described therein, including the
notes thereto.




          (b) The Company has established, and maintains and enforces, a system of internal accounting
controls which are effective in providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance with GAAP, including
policies and procedures that (i) require the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of the Company and
its Subsidiaries, (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that receipts and
expenditures of the Company and its Subsidiaries are being made only in accordance with appropriate
authorizations of management and the Company Board and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the
Company and its Subsidiaries that could have a material effect on the Company’s financial
statements. Neither the Company nor any of its Subsidiaries nor the Company’s independent auditors
has identified or been made aware of (A) any significant deficiency or material weakness (as
defined in Rule 13a-15-15(f) promulgated under the Exchange Act) in the system of internal
accounting controls utilized by the Company and its Subsidiaries, (B) any fraud, whether or not
material, that involves the Company’s management or other employees who have a role in the
preparation of financial statements or the internal accounting controls utilized by the Company and
its Subsidiaries or (C) any claim or allegation regarding any of the foregoing.




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          (c) The Company has established and maintains disclosure controls and procedures (as such
terms are defined in Rule 13a-15(e) or Rule 15d-15(e) promulgated under the Exchange Act) to ensure
that information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s
management to allow timely decisions regarding required disclosure.




          (d) Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to
become a party to, any joint venture, partnership agreement or any similar Contract (including any
Contract relating to any transaction, arrangement or relationship between or among the Company or
any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose entity or Person, on the other hand (such as
any arrangement described in Section 303(a)(4) of Regulation S-K of the SEC)) where the purpose or
effect of such arrangement is to avoid disclosure of any material transaction involving the Company
or any its Subsidiaries in the Company’s consolidated financial statements.




          (e) Since January 1, 2006, neither the Company nor any of its Subsidiaries nor, to the
Company’s Knowledge, any director, officer, employee, auditor, accountant, consultant or
representative of the Company or any of its Subsidiaries has received or otherwise had or obtained
Knowledge of any substantive complaint, allegation, assertion or claim, whether written or oral,
that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing
practices. Since January 1, 2006, no current or former attorney representing the Company or any of
its Subsidiaries has reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by the Company or any of its officers, directors, employees or
agents to the Company Board or any committee thereof or to any director or executive officer of the
Company.




          (f) To the Company’s Knowledge, no employee of the Company or any of its Subsidiaries has
provided or is providing information to any law enforcement agency regarding the commission or
possible commission of any crime or the violation or possible violation of any applicable Laws of
the type described in Section 806 of the Sarbanes-Oxley Act by the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any director, officer, employee, contractor, subcontractor or agent of the Company or any
such Subsidiary has discharged, demoted, suspended, threatened, harassed or in any other manner
discriminated against an employee of the Company or any of its Subsidiaries in the terms and
conditions of employment because of any lawful act of such employee described in Section 806 of the
Sarbanes-Oxley Act.




          (g) The Company is in compliance in all material respects with all effective provisions of the
Sarbanes-Oxley Act and the applicable listing and corporate governance rules of Nasdaq.




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     3.8 No Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any
material Liabilities other than (a) Liabilities reflected or otherwise reserved against in the
Balance Sheet (including the notes thereto and the notes to the financial statements included in
the annual report on the Company’s Form 10-K for the year ended December 31, 2007, as filed with
the SEC) as filed with the SEC, (b) Liabilities incurred after the date of the Balance Sheet in the
ordinary course of business consistent with past practice, (c) Liabilities under this Agreement, or
(d) Liabilities that are executory obligations under Contracts to which the Company or any of its
Subsidiaries is or may hereafter become a party or is or may hereafter become bound (other than
Liabilities thereunder due to breaches by the Company or any of it Subsidiaries of the terms set
forth therein).



     3.9 Absence of Certain Changes.



          (a) Since the date of the Balance Sheet, there has not been or occurred any event,
development, change, circumstance or condition that would have, individually or in the aggregate, a
Material Adverse Effect on the Company.




          (b) Since the date of the Balance Sheet through the date of this Agreement, except for actions
expressly contemplated by this Agreement, the business of the Company and its Subsidiaries has been
conducted, in all material respects, in the ordinary course consistent with past practice, and
there has not been or occurred:




               (i) any split, combination or reclassification of any shares of capital stock, declaration,
setting aside or paying of any dividend or other distribution (whether in cash, shares or property
or any combination thereof) in respect of any shares of capital stock of the Company or any
Subsidiary other than cash dividends made by any wholly owned Subsidiary of the Company to the
Company or one of its Subsidiaries;



               (ii) any damage, destruction or other casualty loss (whether or not covered by insurance) with
respect to any assets that, individually or in the aggregate, are material to the Company and its
Subsidiaries, taken as a whole;



               (iii) any change in any method of accounting or accounting principles or practice, or Tax
election, by the Company or any of its Subsidiaries, except for any such change required by reason
of a change in GAAP or regulatory accounting principles;



               (iv) any amendment of the Company’s or any Subsidiary’s certificate of incorporation or bylaws
or other constituent documents;



               (v) any acquisition, redemption or amendment of any Company Securities or Subsidiary
Securities, other than any acquisition or redemption permitted by the terms of the Company Stock
Award;



               (vi) any incurrence or assumption of any long-term or short-term debt for borrowed money or
issuance of any debt securities by the Company or any of its



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Subsidiaries except for short-term
debt incurred to fund operations of the business or owed
to the Company or any of its wholly-owned Subsidiaries, in each case, in the ordinary course
of business consistent with past practice, (ii) any assumption, guarantee or endorsement of the
obligations of any other Person (except direct or indirect wholly-owned Subsidiaries of the
Company) by the Company or any of its Subsidiaries, (iii) any loan, advance or capital contribution
to, or other investment in, any other Person by the Company or any of its Subsidiaries (other than
loans or advances to employees or direct or indirect loans, advances or capital contributions to
indirect wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with
past practice) or (iv) any mortgage or pledge of the Company’s or any of its Subsidiaries’ assets,
tangible or intangible, or any creation of any Lien (other than a Permitted Lien) thereupon;



               (vii) any plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries
(other than among wholly-owned Subsidiaries of the Company and other than the Merger); or



               (viii) any granting by the Company or any of its Subsidiaries of any increase in compensation
or fringe benefits, except for normal increases of cash compensation in the ordinary course of
business consistent with past practice to any current or future employee whose base salary does not
exceed $150,000 per annum, or any payment by the Company or any of its Subsidiaries of any bonus,
except for bonuses made in the ordinary course of business consistent with past practice (other
than to directors or executive officers of the Company), or any granting by the Company or any of
its Subsidiaries of any increase in severance or termination pay or any entry by the Company or any
of its Subsidiaries into any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent or the terms of
which are materially altered upon the occurrence of a transaction involving the Company of the
nature contemplated hereby (other than offer letters and letter agreements entered into in the
ordinary course of business consistent with past practice with current or future employees who are
not officers and are terminable “at will” without the Company or its Subsidiaries incurring any
material liability or financial obligation).



     3.10 Compliance with Laws and Orders. The Company and each of its Subsidiaries are in
compliance in all material respects with all Laws and Orders applicable to the Company, its
Subsidiaries, or any of the Owned Real Property or Leased Real Property of the Company or any of
its Subsidiaries, or to the conduct of the business or operations of the Company or any of its
Subsidiaries.



     3.11 Permits.



          (a) The Company and its Subsidiaries have, and are in compliance with the terms of, all
permits, licenses, authorizations, consents, approvals and franchises from Governmental Authorities
required to conduct their businesses as currently conducted (“Permits”), and no suspension
or cancellation of any such Permits is pending or, to the Knowledge of the Company, threatened,
except for such noncompliance, suspensions or




-35-









 







cancellations that would not, individually or in the aggregate, have a Material Adverse Effect
on the Company.




          (b) The Company, each of its Subsidiaries and each of their respective directors, officers,
employees and other persons who are required to be registered, licensed or qualified as (x) a
broker-dealer, an investment adviser, or an introducing broker or (y) a registered principal,
registered representative, investment adviser representative, associated person, or salesperson
with the SEC, the CFTC or Canadian provincial or territorial securities regulators (or in
equivalent capacities with any other Governmental Authority) are duly registered, licensed or
qualified as such and such registrations, licenses or qualifications are in full force and effect,
or are in the process of being registered, licensed or qualified as such within the time periods
required by applicable Law, except for such failures to be so registered, licensed or qualified as
would not have, individually or in the aggregate, a Material Adverse Effect on the Company. The
Company and its Subsidiaries and each of their respective directors, officers, and employees, and
other persons are in compliance with all applicable federal, state, provincial and foreign laws
requiring any such registration, licensing or qualification, have filed all periodic reports
required to be filed with respect thereto (and all such reports are accurate and complete in all
material respects), and are not subject to any liability or disability by reason of the failure to
be so registered, licensed or qualified, except for such failures to be so registered, licensed or
qualified, failures with respect to such reports and such liabilities or disabilities as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.




          (c) The Company and its Subsidiaries have timely filed all material registrations,
declarations, reports, notices, forms and other filings required to be filed with the SEC, CFTC,
FINRA, NFA, IIROC, OSC, other applicable Canadian provincial and territorial securities regulators,
any clearing agency or other Governmental Authority, and all amendments or supplements to any of
the foregoing (the “Regulatory Filings”). The Regulatory Filings are in full force and
effect and were prepared in accordance with applicable Law, and all fees and assessments due and
payable in connection therewith have been paid in a timely manner. There is no material unresolved
criticism, violation or exception by any Governmental Authority with respect to any of the
Regulatory Filings.




          (d) The Company has delivered or made available to Parent a true, correct and complete copy of
(i) the currently effective Forms ADV, BD or 7-R as filed with or deemed filed with the SEC or the
NFA, as applicable, by each Subsidiary of the Company required to file such forms, (ii) all state,
provincial and other federal registration forms applicable to such Subsidiary as a registered
investment adviser, broker-dealer or introducing broker, and (iii) all reports and all material
correspondence filed by each Subsidiary with any Governmental Authority under the Exchange Act, the
Investment Company Act, the Advisers Act and under similar state or foreign Laws. The information
contained in such forms was complete and accurate as of the time of filing thereof, except where
any failure to be so complete and accurate would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.




-36-









 








          (e) Except as (x) would not, individually or in the aggregate, have a Material Adverse Effect
on the Company or (y) disclosed on the Forms ADV, BD or 7-R of the Company or its applicable
Subsidiary as in effect as of the date of this Agreement: (i) none of the Company, any of its
Subsidiaries or any of their directors, officers, employees, “associated persons” (as defined in
the Exchange Act), “persons associated with an investment adviser” (as defined in the Advisers
Act), or “affiliated persons” (as defined in the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder (the “Investment Company Act”)) has been
or is the subject of any disciplinary proceedings or orders of any Governmental Authority arising
under applicable Laws which would be required to be disclosed on Forms ADV or BD and no material
disciplinary proceeding or order is pending or threatened, (ii) none of the Company, any of its
Subsidiaries or any of their respective directors, officers, employees, associated persons or
affiliated persons, has been permanently enjoined by the order of any Governmental Authority from
engaging or continuing any conduct or practice in connection with any activity or in connection
with the purchase or sale of any security, and (iii) none of the Company, any of its Subsidiaries
or any of their respective directors, officers, employees, associated persons or affiliated persons
is or has been ineligible to serve as an investment adviser under the Advisers Act (including
pursuant to Section 203(e) or (f) thereof) or as a broker, a dealer or an associated person of a
broker or dealer under Section 15(b) of the Exchange Act (including being subject to any “statutory
disqualification” as defined in Section 3(a)(39) of the Exchange Act), or ineligible to serve in,
or subject to any disqualification which would be the basis for any limitation on serving in, any
of the capacities specified in Section 9(a) or 9(b) of the Investment Company Act or any
substantially equivalent foreign expulsion, suspension or disqualification.




          (f) The Company and its Subsidiaries have at all times since January 1, 2004, rendered
investment advisory services to investment advisory clients with whom such entity is or was a party
to an investment advisory agreement or similar arrangement in compliance with all applicable
requirements as to portfolio composition or portfolio management including, but not limited to, the
terms of such investment advisory agreements, written instructions from such investment advisory
clients, prospectuses or other offering materials, board or directors or trustee directives and
applicable Law. There are no disputes pending or threatened with any current or former investment
advisory clients under the terms of any investment advisory agreement or similar arrangement.




          (g) Section 3.11(g) of the Company Disclosure Schedule sets forth with respect to the
Company and its Subsidiaries a complete and accurate list of all (i) broker-dealer licenses or
registrations, (ii) all licenses and registrations as an investment adviser under the Advisers Act,
applicable Canadian provincial and territorial securities law or any similar state or foreign laws
and (iii) all licenses and registrations as an introducing broker under the CEA or any similar
state or foreign Laws. Neither the Company nor any of its Subsidiaries is, or is required to be,
registered as a futures commission merchant, commodities trading adviser or commodity pool operator
under the CEA or any similar state laws.




     3.12 Litigation; Orders; Regulatory Agreements.



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          (a) Except for any Legal Proceeding challenging or seeking to prohibit the execution, delivery
or performance of this Agreement or consummation of the transactions contemplated by this
Agreement, there is no Legal Proceeding pending or, to the Knowledge of the Company, threatened
(or, to the Knowledge of the Company, any pending or threatened investigation by any Governmental
Authority) (i) against the Company, any of its Subsidiaries or any of their respective properties
that (A) involves, or would be reasonably expected to involve, damages or settlement payments in
excess of $250,000 or any non-monetary settlement, (B) seeks material injunctive relief, or (C)
that would, individually or in the aggregate, have a Material Adverse Effect on the Company, or
(ii) to the Knowledge of the Company, against any current or former director or officer of the
Company or any of its Subsidiaries (in their respective capacities as such), whether or not naming
the Company or any of its Subsidiaries. As of the date hereof, there is no Legal Proceeding
pending or, to the Knowledge of the Company, threatened against the Company or any of its
Subsidiaries or, to the Knowledge of the Company, against any current or former director or officer
of the Company or any of its Subsidiaries (in their respective capacities as such) challenging or
seeking to prohibit the execution, delivery or performance of this Agreement or consummation of the
transactions contemplated by this Agreement.




          (b) Neither the Company nor any of its Subsidiaries is subject to any outstanding Order, other
than any Order that is generally applicable to Persons engaged in the businesses engaged in by the
Company or its Subsidiaries.




          (c) Neither the Company nor any of its Subsidiaries is subject to any Company Regulatory
Agreement that restricts, or by its terms will in the future restrict, the conduct of its business
in any material respect or that in any manner relates to its capital adequacy, its credit or risk
management policies, its dividend policies, its management, its business or its operations. To the
Knowledge of the Company, none of the Company or any of its Subsidiaries has been advised by any
Governmental Authority that it is considering issuing or requesting (or is considering the
appropriateness of issuing or requesting) any Company Regulatory Agreement.




     3.13 Material Contracts.



          (a) For purposes of this Agreement, a “Material Contract” shall mean all of the
following Contracts to and by which the Company or any of its Subsidiaries is a party or is bound:




               (i) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of
the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with
respect to the Company and its Subsidiaries;



               (ii) any employment, independent contractor or consulting Contract (in each case, under which
the Company has continuing obligations as of the date hereof) with any current or former executive
officer, independent contractor or employee of the Company or its Subsidiaries or member of the
Company Board providing for an



-38-









 







annual base compensation in excess of $250,000 other than Contracts with contractors that can be
terminated without penalty upon notice of ninety (90) days or less;



               (iii) any Contract or plan, including the Company Stock Plans or any stock purchase plan, any
of the benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the consummation of the transactions contemplated hereby or the value of any of the
benefits of which will be calculated on the basis of any of the transactions contemplated by this
Agreement;



               (iv) any material Contract for the performance of clearing, brokerage or execution services,
and any other Contract for the performance of clearing, brokerage or execution services that
differs in any material respect from the Company’s standard form contracts identified in
Section 3.13(a)(iv) of the Company Disclosure Schedule which have been made available to
Parent prior to the date of this Agreement;



               (v) any material Contract for the performance of investment advisory services, and any other
Contract for the performance of investment advisory services that differs in any material respect
from the Company’s standard form contracts identified in Section 3.13(a)(v) of the Company
Disclosure Schedule which have been made available to Parent prior to the date of this Agreement;



               (vi) any Contract providing for material indemnification or any guaranty of third party
obligations (in each case, under which the Company has continuing obligations as of the date
hereof), other than any guaranty by the Company of any of its Subsidiary’s obligations;



               (vii) any Contract containing any covenant (A) limiting the right of the Company or any of its
Subsidiaries to engage in any line of business or to compete with any Person in any line of
business, (B) granting any exclusive rights to a third party, (C) prohibiting the Company or any of
its Subsidiaries (or, after the Closing Date, Parent or the Final Surviving Corporation or any of
their respective Subsidiaries) from engaging in business with any Person or levying a fine, charge
or other payment for doing so or (D) otherwise prohibiting or limiting the right of the Company or
its Subsidiaries to distribute or offer any products or services, in each case other than any such
Contracts that may be cancelled without material liability to the Company or its Subsidiaries upon
notice of ninety (90) days or less;



               (viii) any Contract (A) relating to the disposition or acquisition by the Company or any of
its Subsidiaries after the date of this Agreement of a material amount of assets other than in the
ordinary course of business or (B) pursuant to which the Company or any of its Subsidiaries will
acquire any material ownership interest in any other Person or other business enterprise other than
the Company’s Subsidiaries;



               (ix) the top five (5) dealer, distributor, joint marketing or development Contracts (as
measured by continuing annual costs to be incurred by, and annual fees to be paid by, the Company
or any of its Subsidiaries) to develop or market



-39-









 







any product, technology or service, and which may not be canceled without material liability to
the Company or its Subsidiaries upon notice of ninety (90) days or less;



               (x) any IP License, development agreement or other Contract involving material Company
Intellectual Property;



               (xi) any Contract (A) containing any material financial penalty for the failure by the Company
or any of its Subsidiaries to comply with any support or maintenance obligation or (B) containing
any obligation to provide support or maintenance for the Company Products for any period in excess
of twelve (12) months, other than those obligations that are terminable by the Company or any of
its Subsidiaries on no more than ninety (90) days notice without material liability or financial
obligation to the Company or its Subsidiaries;



               (xii) any mortgages, indentures, guarantees, loans or credit agreements, security agreements
or other Contracts relating to the borrowing of money or extension of credit, other than accounts
receivables and payables in the ordinary course of business consistent with past practice;



               (xiii) any Contract entered into since January 1, 2006 to settle a Legal Proceeding, other
than (A) releases immaterial in nature or amount entered into with former employees or independent
contractors of the Company in the ordinary course of business or (B) settlement agreements for cash
only (which has been paid or is reserved for on the Balance Sheet) and does not exceed $250,000 as
to such settlement;



               (xiv) any Contract which grants any right of first refusal, right of first offer or similar
right with respect to any material assets, rights or properties of the Company or any of its
Subsidiaries;



               (xv) any Contract which limits the payment of dividends by the Company or any of its
Subsidiaries;



               (xvi) any Contract which relates to a joint venture, partnership, limited liability company
agreement, revenue sharing or other similar agreement or arrangement with third parties, or to the
formation, creation or operation, management or control of any partnership or joint venture with
any third parties;



               (xvii) any Contract which relates to an acquisition, divestiture, merger or similar
transaction and which contains any material obligations (including indemnification, “earn-out” or
other contingent obligations) that are still in effect; and



               (xviii) any other Contract that provides for payment obligations by the Company or any of its
Subsidiaries of $500,000 or more in any individual case that is not terminable by the Company or
its Subsidiaries upon notice of ninety (90) days or less without material liability to the Company
or its Subsidiary and is not disclosed pursuant to clauses (i) through (xvii) above.



-40-









 





          (b) Section 3.13 of the Company Disclosure Schedule contains a complete and accurate
list, as of the date hereof, of all Material Contracts.




          (c) Each Material Contract is valid and binding on the Company (and/or each such Subsidiary of
the Company party thereto) and is in full force and effect, and neither the Company nor any of its
Subsidiaries party thereto, nor, to the Knowledge of the Company, any other party thereto, is in
breach of, or default under, any such Material Contract, and no event has occurred that with notice
or lapse of time or both would constitute such a breach or default thereunder by the Company or any
of its Subsidiaries, or, to the Knowledge of the Company, any other party thereto, except for such
failures to be in full force and effect and such breaches and defaults that would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.




     3.14 Taxes.



          (a) Since January 1, 2004, all material Tax Returns required by applicable Laws to be filed by
or on behalf of the Company or any of its Subsidiaries have been filed in accordance with all
applicable laws, and all such Tax Returns are true, correct and complete in all material respects.




          (b) Since January 1, 2004, the Company and each of its Subsidiaries has paid (or has had paid
on its behalf) or has withheld and remitted to the appropriate Governmental Authority all material
Taxes (including income Taxes, withholding Taxes and estimated Taxes) due and payable without
regard to whether such Taxes have been assessed, or has established in accordance with GAAP an
adequate accrual for all Taxes (including Taxes that are not yet due or payable) through the end of
the last period for which the Company and its Subsidiaries ordinarily record items on their
respective books, and regardless of whether the liability for such Taxes is disputed. The Company
has identified all uncertain tax positions contained in all Tax Returns filed by the Company or any
of its Subsidiaries, and has established adequate reserves and made any appropriate disclosures in
the most recent consolidated financial statements of the Company and its Subsidiaries included in
the Company SEC Reports filed prior to the date of this Agreement in accordance with the
requirements of Financial Interpretation No. 48 of FASB Statement No. 109. The Company has made
available to Parent complete and accurate copies of all income, franchise, non-U.S. and other
material Tax Returns, and any amendments thereto, filed by or on behalf of the Company or any of
its Subsidiaries or any member of a group of corporations including the Company or any of its
Subsidiaries for any taxable years commencing after January 1, 2004.




          (c) There are no Liens on the assets of the Company or any of its Subsidiaries relating or
attributable to material Taxes, other than Permitted Liens.




          (d) There are no Legal Proceedings pending, or to the Knowledge of the Company, threatened
against or with respect to the Company or any of its Subsidiaries with respect to any material Tax,
and none of the Company or any of its Subsidiaries knows of any audit or investigation with respect
to any Liability of the Company or any of its
Subsidiaries for material Taxes, and there are no agreements, arrangements, waivers or




-41-









 







objections in effect to extend the period of limitations for the assessment or collection of any
material Tax for which the Company or any of its Subsidiaries may be liable.




          (e) Since January 1, 2004, the Company and its Subsidiaries have not executed any closing
agreement pursuant to Section 7121 of the Code or any predecessor provision thereof, or any similar
Laws.




          (f) Each of the Company and its Subsidiaries has disclosed on its Tax Returns for all taxable
years for which the applicable statute of limitations has not expired all positions taken therein
that could give rise to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code or any similar Laws.




          (g) Neither the Company nor any of its Subsidiaries have (i) ever been a party to a Contract
or inter-company account system in existence under which the Company or any of its Subsidiaries
has, or may at any time in the future have, an obligation to contribute to the payment of any
material portion of a Tax (or pay any material amount calculated with reference to any portion of a
Tax) of any group of corporations of which the Company or any of its Subsidiaries is or was a part
(other than a group the common parent of which is the Company) (other than pursuant to customary
commercial contracts not primarily related to Taxes) and (ii) any Liability for material Taxes of
any Person (other than the Company or any of its Subsidiaries) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local or non-U.S. law, including any
arrangement for group or consortium relief or similar arrangement) as a transferee or successor, by
operation of law, by contract or otherwise.




          (h) No written claim has been made during the past three (3) years by any appropriate
Governmental Authority in a jurisdiction where neither the Company nor any of its Subsidiaries
filed Tax Returns that it is or may be subject to any taxation by that jurisdiction.




          (i) Neither the Company nor any of its Subsidiaries has participated or engaged in
transactions that constitute “reportable transactions” as such term is defined in Treasury
Regulations Section 1.6011-4(b)(1) (other than such transactions that have been properly reported
or are not yet required to have been reported), including any “listed transactions” as such term is
defined in Treasury Regulations Section 1.6011-4(b)(2).




          (j) Neither the Company nor any of its Subsidiaries has agreed or is required to make any
material adjustments pursuant to Section 481(a) of the Code or any similar Laws by reason of a
change in accounting method initiated by it or any other relevant party and neither the Company nor
any of its Subsidiaries has any Knowledge that the appropriate Governmental Authority has proposed
any such adjustment or change in accounting method, nor is any application pending with any
appropriate Governmental Authority requesting permission for any changes in accounting methods that
relate to the business or assets of the Company or any of its Subsidiaries to the extent that any
such adjustments would be required to be made for any taxable period (or portion thereof) after the
Closing Date.




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          (k) The Company and its Subsidiaries will not be required to include any material item of
income in, or exclude any material item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of (i) any installment sale or open
transaction disposition made on or prior to the Closing Date, (ii) any prepaid amount received on
or prior to the Closing Date or (iii) deferred intercompany gain or excess loss account under
Treasury Regulations under Section 1502 of the Code (or any similar Laws) in connection with a
transaction consummated prior to the Closing.




          (l) The Company is not a United States Real Property Holding Corporations within the meaning
of Section 897 of the Code and was not a United States Real Property Holding Corporation on any
“determination date” (as defined in §1.897-2(c) of the United States Treasury Regulations
promulgated under the Code) that occurred in the five-year period preceding the Closing.




          (m) (i) There is no contract, agreement, plan or arrangement to which the Company or any of
its Subsidiaries is a party, including the provisions of this Agreement, covering any employee,
consultant or director of the Company or any of its Subsidiaries, which, individually or
collectively, could give rise to the payment of any material amount that would not be deductible
pursuant to Sections 404 or 162(m) of the Code; and (ii) each nonqualified deferred compensation
plan subject to Section 409A of the Code in all material respects has been operated since January
1, 2005 in good faith compliance with Section 409A of the Code and all applicable guidance issued
thereunder. Neither the Company nor any of its Subsidiaries is a party to any agreement which
would require the payment to any current or former employee, consultant or director of an amount
necessary to “gross-up” such individual for any penalty tax under Section 409A of the Code.




          (n) The Company and its Subsidiaries have delivered or made available to Parent complete and
accurate copies of all letter rulings, technical advice memoranda, and similar documents issued
since January 1, 2004, by a Governmental Authority relating to U.S. federal, state, local or
non-U.S. Taxes due from or with respect to the Company or any of its Subsidiaries. The Company
will deliver to Parent all materials with respect to the foregoing for all matters arising after
the date hereof through the Closing Date.




          (o) Section 3.14(o) of the Company Disclosure Schedule contains a complete and
accurate list of each jurisdiction in which the Company or any of its Subsidiaries benefits from
(i) any material exemptions from taxation, Tax holidays, reduction in Tax rate or similar Tax
relief and (ii) other material financial grants, subsidies or similar incentives granted by a
Governmental Authority, whether or not relating to Taxes (together with the Tax incentives
described in subclause (i), the “Incentives”) and describes the details of such Incentives.




          (p) Section 3.14(p) of the Company Disclosure Schedule contains a complete and
accurate list of each Subsidiary for which an election has been made pursuant
to Section 7701 of the Code and the Treasury regulations thereunder to be treated other than
its default classification for U.S. Federal income tax purposes. Except as





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disclosed on such Section, each Subsidiary will be classified for U.S. Federal income tax purposes according to its default
classification.




          (q) Neither the Company nor any of its Subsidiaries has been a distributing corporation or a
controlled corporation in a transaction intended to be governed by Section 355 of the Code in the
two (2) years prior to the date of this Agreement.




          (r) There are no circumstances existing which could result in the application of section 78,
section 79, or sections 80 to 80.04 of the Tax Act, or any equivalent provision under applicable
provincial law, to thinkorswim Canada, Inc. thinkorswim Canada, Inc. has not claimed any reserve
under any provision of the Tax Act or any equivalent provincial provision, if any amount could be
included in the income of thinkorswim Canada, Inc. for any period ending after the Closing Date.




          (s) For all transactions between thinkorswim Canada, Inc., on the one hand, and any
non-resident Person with whom thinkorswim Canada, Inc. was not dealing at arm’s length, for the
purposes of the Tax Act, on the other hand, during a taxation year commencing after 1998 and ending
on or before the Closing Date, thinkorswim Canada, Inc. has made or obtained records or documents
that satisfy the requirements of paragraphs 247(4)(a) to (c) of the Tax Act.




          (t) thinkorswim Canada, Inc. has not, and has not been deemed to have for purposes of the Tax
Act, acquired or had the use of property for proceeds greater than the fair market value thereof
from, or disposed of property for proceeds less than the fair market value thereof to, or received
or performed services for other than the fair market value from or to, or paid or received interest
or any other amount other than at a fair market value rate to or from, any Person, firm or company
with whom it does not deal at arm’s length within the meaning of the Tax Act.




     3.15 Employee Benefits.



          (a) Sections 3.15(a)(i) and Section 3.15(a)(ii) of the Company Disclosure
Schedule, respectively, set forth a complete and accurate list, as of the date hereof, of (i) all
material “employee benefit plans” (as defined in Section 3(3) of ERISA), whether or not subject to
ERISA and (ii) all other material employment, independent contractor and consulting agreements, as
well as all material bonus, stock option, stock purchase or other equity-based, benefit, incentive
compensation, profit sharing, savings, retirement (including early retirement and supplemental
retirement), disability, insurance, vacation, incentive, deferred compensation, termination,
retention, change of control and other similar fringe, welfare or other employee benefit plans,
programs, agreements, contracts, policies or arrangements (whether or not in writing) maintained or
contributed to for the benefit of any current or former employee, independent contractor,
consultant or director of the Company, any of its Subsidiaries or any other trade or business
(whether or not incorporated) which would be treated as a single employer with the Company or any
of its Subsidiaries under Section 414 of the Code (an “ERISA Affiliate”), or with respect
to which the Company or any of its Subsidiaries has any material Liability (together the



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“Employee Plans”). With respect to each Employee Plan other than any International
Employee Plan, the Company has made available to Parent complete and accurate copies of, to the
extent applicable, (A) the most recent annual report on Form 5500 required to have been filed for
each Employee Plan, including any required schedules thereto; (B) the most recent determination
letter, if any, from the IRS for any Employee Plan that is intended to qualify under Section 401(a)
of the Code; (C) the plan documents and summary plan descriptions, or a written description of the
terms of any Employee Plan that is not in writing; (D) any related trust agreements, insurance contracts, insurance policies or other
documents of any funding arrangements; (E) any notices to or from the IRS or any office or
representative of the DOL or any similar Governmental Authority relating to any compliance issues
in respect of any such Employee Plan since January 1, 2005; (F) with respect to each Employee Plan
that is maintained in any non-U.S. jurisdiction (the “International Employee Plans”), to
the extent applicable, (x) the most recent annual report or similar compliance documents required
to be filed with any Governmental Authority with respect to such plan and (y) any document
comparable to the determination letter referenced under clause (B) above, if any, issued by a
Governmental Authority relating to the satisfaction of Laws necessary to obtain the most favorable
tax treatment and (G) all material amendments, modifications or supplements to any such document.




          (b) Neither the Company, any of the Company’s Subsidiaries nor any of their respective ERISA
Affiliates has ever maintained, participated in or contributed to (or been obligated to contribute
to) (i) an Employee Plan which was ever subject to Section 412 of the Code or Title IV of ERISA,
(ii) a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (iii) a “multiple employer
plan” as defined in ERISA or the Code, or (iv) a “funded welfare plan” within the meaning of
Section 419 of the Code. No Employee Plan is funded by, associated with or related to a “voluntary
employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code. No
Employee Plan provides welfare benefits that are not fully insured through an insurance contract.




          (c) Each Employee Plan has been maintained, operated and administered in compliance in all
material respects with its terms and with all applicable Laws, including the applicable provisions
of ERISA, the Code and the codes of practice issued by the applicable Governmental Authority.
There are no International Employee Plans.




          (d) To the Knowledge of the Company, no event has occurred and there currently exists no
condition or set of circumstances in connection with which the Company or any of its Subsidiaries
would reasonably be expected to be subject to any material liability under the terms of any
Employee Plan or any applicable Law, including without limitation ERISA or the Code. Except as
required by Laws or the terms of any Employee Plans, neither the Company nor any of its
Subsidiaries has announced any intent (whether or not binding) to amend in any material respect or
establish any new Employee Plan or to increase materially any benefits under any Employee Plan.




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          (e) There are no Legal Proceedings pending or, to the Knowledge of the Company, threatened on
behalf of or against any Employee Plan, the assets of any trust under any Employee Plan, or the
plan sponsor, plan administrator or any fiduciary or any Employee Plan, other than routine claims
for benefits that have been or are being handled through an administrative claims procedure.




          (f) None of the Company, any of its Subsidiaries, or, to the Knowledge of the Company, any of
their respective directors, officers, employees or agents has, with respect to any Employee Plan,
engaged in or been a party to any non-exempt “prohibited transaction,” as such term is defined in Section 4975 of the Code or Section 406 of ERISA,
which could reasonably be expected to result in the imposition of a penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code.




          (g) No Employee Plan provides post-termination welfare benefits to former employees of the
Company or its ERISA Affiliates, other than pursuant to Section 4980B of the Code or any similar
Laws.




          (h) Each Employee Plan that is intended to be “qualified” under Section 401 of the Code has
received a favorable determination letter from the IRS to such effect and, to the Knowledge of the
Company, no fact, circumstance or event has occurred or exists since the date of such determination
letter that would reasonably be expected to materially and adversely affect the qualified status of
any such Employee Plan.




          (i) Neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will, either alone or in conjunction with any other
event, (i) result in any material payment or benefit becoming due or payable, or required to be
provided, to any director, employee or independent contractor of the Company or any of its
Subsidiaries, (ii) materially increase the amount or value of any benefit or compensation otherwise
payable or required to be provided to any such director, employee or independent contractor, or
(iii) result in the acceleration of the time of payment, vesting or funding of any such benefit or
compensation. Section 3.15(i) of the Company Disclosure Schedule lists each Company
“disqualified individual” (as defined in Section 280G of the Code), assuming for this purpose that
the date of the “change in ownership or control of the corporation” is the date hereof for purposes
of determining the “disqualified individual determination period” under Section 280G of the Code.
No payment or benefit which will or may be made by the Company or any of its Subsidiaries will
result in any amount failing to be deductible by reason of Section 280G of the Code. There is no
contract, agreement, plan or arrangement to which the Company or any of its Subsidiaries is a party
or by which it is bound to compensate any current or former employee or other disqualified
individual for excise taxes which may be required pursuant to Section 4999 of the Code.




          (j) All Contracts of employment or for services with any employee of the Company or any of it
Subsidiaries who provide services outside the United States (“Foreign Employees”), or with
any director, independent contractor or consultant of or to the Company or any of its Subsidiaries,
can be terminated by three (3) months’ notice or less given at any time without giving rise to any
material claim for damages, severance




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pay, or compensation (other than a statutory redundancy
payment required by applicable Laws).




     3.16 Labor Matters.



          (a) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or any labor union Contract or arrangement between or applying to, one or more employees
and a trade union, works council, group of employees or any other employee representative body, for
collective bargaining or other negotiating or consultation purposes or reflecting the outcome of such collective bargaining or negotiation
or consultation with respect to their respective employees with any labor organization, union,
group, association, works council or other employee representative body, or is bound by any
equivalent national or sectoral agreement (“Collective Bargaining Agreements”). To the
Knowledge of the Company, there are no activities or proceedings by any labor organization, union,
group or association or representative thereof to organize any employee of the Company or any of
its Subsidiaries. There are no currently existing lockouts, strikes, slowdowns, work stoppages or,
to the Knowledge of the Company, threats thereof by or with respect to any employees of the Company
or any of its Subsidiaries which would have a Material Adverse Effect on the Company nor have there
been any such lockouts, strikes, slowdowns or work stoppages since January 1, 2004. The Company
and its Subsidiaries are not, nor have they been since January 1, 2004, a party to any collective
redundancy agreements (including social plans or job protection plans).




          (b) The Company and its Subsidiaries have complied in all material respects with applicable
Laws and Orders relating to employment, employment practices, terms and conditions of employment,
worker classification, tax withholding, prohibited discrimination, equal employment, fair
employment practices, meal and rest periods, immigration status, secondment and expatriation,
employee safety and health, wages (including overtime wages), compensation, hours of work, and in
each case, with respect to employees: (i) has withheld and reported all amounts required by law or
by agreement to be withheld and reported with respect to wages, salaries and other payments to
employees, (ii) is not liable for any arrears of wages, severance pay or any taxes or any penalty
for failure to comply with any of the foregoing, and (iii) is not liable for any payment to any
trust or other fund governed by or maintained by or on behalf of any Governmental Authority, with
respect to unemployment compensation benefits, social security or other benefits or obligations for
employees (other than routine payments to be made in the normal course of business and consistent
with past practice). All employees of the Company and its Subsidiaries located in the United
States are terminable “at will”, which means for purposes of this Section 3.16(b) that the
employment of such employees are terminable by the Company or its subsidiaries without (i) cause or
(ii) notice, and without regard to any obligation to make any post-termination payments or provide
any post-termination benefits.




          (c) To the Knowledge of the Company, no trade union has applied to have the Company or its
Subsidiaries declared a common or related employer pursuant to




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the Labour Relations Act (Ontario)
or any similar legislation in any Canadian jurisdiction in which the Company or any of its
Subsidiaries carries on business.




     3.17 Real Property. The Company and its Subsidiaries do not own any real property.
Section 3.17(a) of the Company Disclosure Schedule contains a complete and accurate list,
as of the date hereof, of all of the existing material leases, subleases or other agreements
(collectively, the “Leases”) under which the Company or any of its Subsidiaries uses or
occupies or has the right to use or occupy, now or in the future, any real property (such property,
the “Leased Real Property”). The Company has heretofore made available to Parent true,
correct and complete copies of all Leases (including all material modifications and amendments
thereto). The Company and/or its Subsidiaries have and own valid leasehold estates in the Leased Real Property, free and clear of all Liens other
than Permitted Liens. Section 3.17(b) of the Company Disclosure Schedule contains a
complete and accurate list, as of the date hereof, of all of the existing Leases granting to any
Person, other than the Company or any of its Subsidiaries, any right to use or occupy, now or in
the future, any of the Leased Real Property. The Leases are each in full force and effect in
accordance with their respective terms (except as such enforceability may be subject to laws of
general application relating to bankruptcy, insolvency, reorganization, moratorium or other laws
relating to creditors’ rights generally, the relief of debtors and rules of law governing specific
performance, injunctive relief, or other equitable remedies) and neither the Company nor any of its
Subsidiaries is in material breach of or default under, or has received written notice of any
material breach of or default under, any material Lease, and, to the Knowledge of the Company, no
event has occurred that with notice or lapse of time or both would constitute a material breach or
default thereunder by the Company or any of its Subsidiaries or any other party thereto.



     3.18 Environmental Matters. Neither the Company nor any of its Subsidiaries: (i) has
received any written notice or other communication of any alleged material claim, material
violation of or material liability under any Environmental Law which has not heretofore been cured
or for which there is any remaining material liability; (ii) has disposed of, emitted, discharged,
handled, stored, transported, used or released any Hazardous Substances, distributed, sold or
otherwise placed on the market Hazardous Substances or any product containing Hazardous Substances,
arranged for the disposal, discharge, storage or release of any Hazardous Substances, or exposed
any employee or other individual to any Hazardous Substances so as to give rise to any material
liability or material corrective or remedial obligation under any Environmental Laws; (iii) has
entered into any agreement that may require it to guarantee, reimburse, pledge, defend, hold
harmless or indemnify any other party with respect to material liabilities arising out of
Environmental Laws or the Hazardous Substances related activities of the Company or its
Subsidiaries; or (iv) has any Knowledge of any fact or circumstance that would be reasonably likely
involve the Company or any of its Subsidiaries in any environmental litigation or impose upon the
Company or any of its Subsidiaries any material environmental liability. The Company and its
Subsidiaries have delivered to Parent or made available for inspection by Parent and its agents,
representatives and employees all material records in the Company’s and Subsidiaries’ possession
concerning the Hazardous Substances activities of the Company and all environmental audits and
environmental



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assessments of any facility owned, leased or used at any time by the Company or each
of its Subsidiaries. To the Company’s Knowledge, there are no Hazardous Substances in, on, or
under any properties owned, leased or used at any time by the Company or each of its Subsidiaries
such as could give rise to any material liability or material corrective or remedial obligation of
the Company or any of its Subsidiaries under any Environmental Laws.




     3.19 Assets; Personal Property. The Company and its Subsidiaries are in possession of
and have good title to, or valid leasehold interests in or valid rights under contract to use all
machinery, equipment, furniture, fixtures and other tangible personal property and assets owned,
leased or used by the Company or any of its Subsidiaries that are material to the Company and its
Subsidiaries, taken as a whole, free and clear of all Liens (other than Permitted Liens), except for defects in title that would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.



     3.20 Intellectual Property.



          (a) Section 3.20(a) of the Company Disclosure Schedule sets forth as of the date
hereof a true, complete and correct list of all Registered Intellectual Property owned by or filed
in the name of the Company or any of its Subsidiaries (collectively the “Company Registered
Intellectual Property”). To the Company’s Knowledge, the Company Registered Intellectual
Property is valid, enforceable and subsisting (except with respect to applications).




          (b) All Company Intellectual Property is free and clear of any Liens, except for Permitted
Liens. Since January 1, 2005, neither the Company nor any of its Subsidiaries has transferred
ownership of, in whole or in part, or granted an exclusive license to, any third party, of any
Intellectual Property Rights that are, or were, material Company Intellectual Property.




          (c) The Company and its Subsidiaries have taken all commercially reasonable steps to protect
both (i) their Trade Secrets that they wish to, or are required to, protect as confidential and
(ii) any Trade Secrets of any third parties provided to the Company or any of its Subsidiaries
under a condition of confidentiality. Without limiting the foregoing, the Company and its
Subsidiaries have, and make commercially reasonable efforts to enforce, a policy requiring each
employee and contractor to execute a proprietary information/confidentiality agreement.




          (d) There is no pending or, to the Company’s Knowledge, threatened Legal Proceeding before any
Governmental Authority in any jurisdiction alleging that (i) any activities, services or the
conduct of the Company or any of its Subsidiaries infringes, violates or constitutes the
unauthorized use or misappropriation of the Intellectual Property Rights of any third party, (ii)
challenging the ownership, validity or enforceability of any Company Intellectual Property, or
(iii) activities, services or the conduct of a third party infringes, violates or misappropriates
the Company Intellectual Property. The Company is not bound by any Orders naming the Company or
any of its Subsidiaries which (i) restricts the Company’s or any of its Subsidiaries’ right to use,
license or transfer any Company





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Intellectual Property, (ii) restrict any conduct of the business of
the Company or any of its Subsidiaries which may infringe any third party’s Intellectual Property
Rights, or (iii) compels or requires the Company or any of its Subsidiaries to license or transfer
any material Company Intellectual Property. Neither the Company nor any of its Subsidiaries has
received any written notice within the past two (2) years from any third party that the operation
of the business of the Company or any of its Subsidiaries, or any act, product or service of the
Company or any of its Subsidiaries, infringes or misappropriates the Intellectual Property Rights
of any third party or constitutes unfair competition or trade practices under the Laws of any
jurisdiction.




          (e) None of the services or operations of the Company or its Subsidiaries, including without
limitation development, manufacture, sale, licensing or distribution of Company Products, infringe
upon, violate or constitute the unauthorized use of any Intellectual Property Rights owned by any
third party or constitute unfair competition or trade practices under the Laws of any jurisdiction.
To the Knowledge of Company, within the past two (2) years no third party is or has infringed
upon, violated or misappropriated any material Company Intellectual Property.




          (f) Neither the Company nor any of its Subsidiaries has granted a license to any third party
to Source Code that is material to the business of the Company or any of its Subsidiaries without
such party being bound by confidentiality restrictions or (ii) has distributed or is required to
distribute any Source Code that is material to the business of the Company or any of its
Subsidiaries free of charge pursuant to an Open Source License.




          (g) Section 3.20(g) of the Company Disclosure Schedule lists all material Contracts,
as of the date hereof, pursuant to which a third party has licensed to the Company or any of its
Subsidiaries any Intellectual Property Right that is material to the operation of the business of
the Company or any of its Subsidiaries, other than licenses for “shrink wrap” or other commercially
available software or other technology (“In-Licenses”).




          (h) Section 3.20(h) of the Company Disclosure Schedule lists all Contracts, as of the
date hereof, pursuant to which the Company or any of its Subsidiaries has granted a third party any
rights or licenses to any material Company Intellectual Property other than non-exclusive licenses
granted in the ordinary course (“Out-Licenses”; together with the In-Licenses, the “IP
Licenses”).




          (i) Section 3.20(i) of the Company Disclosure Schedule lists all Contracts, as of the
date hereof, pursuant to which the Company or any of its Subsidiaries has engaged, or entered into
any agreement or arrangement with, a third party to develop or create any software or other
technology or Intellectual Property Rights for the Company or any of its Subsidiaries and that is
material to any of the Company’s or its Subsidiaries’ products, services or operations. The
Company and its Subsidiaries have a current policy to secure assignments from any third party who
has developed or created any software or Intellectual Property Rights for the Company or any of its
Subsidiaries of all Intellectual




-50-









 







Property Rights therein the that the Company or its Subsidiaries,
as applicable, do not already own by operation of law.




          (j) Neither this Agreement nor the transactions contemplated by this Agreement, including any
assignment to Parent by operation of law as a result of the Merger of any Contracts to which the
Company or any of its Subsidiaries is a party, will result in any of the following occurring, which
would not occur absent this Agreement or the transactions contemplated hereby: (i) Parent, any of
its Subsidiaries granting to any third party any right to or with respect to any Intellectual
Property Rights owned by, or licensed to, any of them prior to the Closing, (ii) Parent, any of its
Subsidiaries being bound by, or subject to, any non-compete or other material restriction on the
operation or scope of their respective businesses, (it being understood and agreed that restrictions on the use of the
licensed Intellectual Property Rights contained in the grant of any applicable In-Licenses are not
deemed a restriction on the operation of the scope of the business), or (iii) Parent, any of its
Subsidiaries being obligated to pay any royalties or other material amounts, or offer any
discounts, to any third party (x) other than those royalties or other material amounts payable by
the Company or its Subsidiaries pursuant to any current license agreements or discounts offered to
any third party by the Company or its Subsidiaries pursuant to any current license agreements or
(y) in excess of those payable by, or required to be offered by, any of them, respectively, in the
absence of this Agreement or the transactions contemplated hereby.




          (k) Any collection, acquisition, use, storage, transfer, distribution, or dissemination by the
Company or any of its Subsidiaries, of any personally identifiable information of any third parties
has been in compliance with all applicable Laws and the Company’s and each of its Subsidiary’s
privacy policies (including those privacy policies, if any, relating to (i) the privacy of users of
their products and services and all Internet websites owned, maintained or operated by the Company
or any of its Subsidiaries, and (ii) the collection, acquisition, use, storage, transfer,
distribution or dissemination of any personally identifiable information collected by the Company
or its Subsidiaries). To the Knowledge of the Company, no person had gained unauthorized access,
as a result of the Company’s or its Subsidiaries’ actions or failure to act, to any personally
identifiable information of a third party, collected or held by, the Company or its Subsidiaries.




     3.21 Insurance. Section 3.21 of the Company Disclosure Schedule contains a
complete and accurate list, as of the date hereof, of all policies of insurance maintained by or on
behalf of Company and its Subsidiaries with respect to their respective employees, properties and
assets. All of the insurance policies of the Company and its Subsidiaries are in full force and
effect, no notice of cancellation has been received with respect thereto, and there is no existing
default or event which, with the giving of notice or lapse of time or both, would constitute a
default, by any insured thereunder, except for such defaults that would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. There is no material claim pending under
any of such policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies other than denials and disputes in the ordinary course of business
consistent with past practice.



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     3.22 Related Party Transactions. Except as set forth in any Company SEC Report filed
prior to the date hereof, compensation or other employment arrangements in the ordinary course, and
Loans set forth in Section 3.22 of the Company Disclosure Schedule, there are no
transactions, agreements, arrangements or understandings that would be required to be disclosed by
the Company pursuant to Section 404 of Regulation S-K promulgated under the Exchange Act.



     3.23 State Anti-Takeover Statutes. Assuming that the representations of Parent and
the Merger Subs set forth in Section 4.12 are accurate, the Company Board has taken all
necessary actions so that the restrictions on business combinations set forth in Section 203 of the
DGCL and any other similar applicable Law are not applicable to this Agreement and the transactions contemplated hereby or the Voting Agreements and the
transactions contemplated thereby. To the Knowledge of the Company, no other state takeover
statute or similar statute or regulation applies to or purports to apply to the Merger, the Voting
Agreements or the transactions contemplated hereby or thereby.



     3.24 Brokers. Except for UBS Securities LLC and Paragon Capital Partners, LLC
(“Paragon”) (true and correct copies of whose engagement letters have been furnished to
Parent), there is no investment banker, broker, finder, agent or other Person that has been
retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who is
entitled to any financial advisor’s, brokerage, finder’s or similar fee or commission in connection
with the transactions contemplated by this Agreement.



     3.25 Opinion of Financial Advisor. The Company has received the opinion of UBS
Securities LLC to the effect that, as of the date of such opinion, and subject to the assumptions,
qualifications and limitations set forth therein, the Merger Consideration is fair, from a
financial point of view, to the holders of Company Common Stock (other than stockholders of the
Company entering into Voting Agreements and their respective Affiliates), and, as of the date of
this Agreement, such opinion has not been withdrawn, revoked or modified in any respect.



     3.26 Canadian Assets and Revenues. As of December 31, 2008 and as of December 31,
2007, each of (i) the book value of the assets of thinkorswim Canada, Inc. and (ii) the aggregate
book value of the assets in Canada of the Company and its Subsidiaries was less than CDN$50
million. The gross revenues from sales in or from Canada generated by the assets in Canada of the
Company and its Subsidiaries for each of the twelve-month periods ended December 31, 2008 and
December 31, 2007 were less than CDN$50 million.



ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF

PARENT AND THE MERGER SUBS




     Except as set forth in the disclosure letter delivered by Parent to the Company dated as of
the date hereof (the “Parent Disclosure Schedule”), which expressly identifies the Section
(and, if applicable, subsection) to which such exception relates (it being



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understood and hereby
agreed that any disclosure set forth in the Parent Disclosure Schedule relating to one Section or
subsection of this Agreement shall also apply to any other Sections and subsections of this
Agreement if and solely to the extent that it is reasonably apparent on the face of such disclosure
(without reference to the underlying documents referenced therein) that such disclosure also
relates to such other Sections or subsections), Parent, Merger Sub One and Merger Sub Two hereby
represent and warrant to the Company as follows:




     4.1 Organization and Standing. Each of Parent, Merger Sub One and Merger Sub Two is
duly organized, validly existing and in good standing under the laws of the State of Delaware and
has the requisite corporate or other power and authority to conduct its business as it is presently
being conducted and to own, lease or operate its respective properties and assets. Each of Parent, Merger Sub One and Merger Sub Two is duly qualified
to do business and is in good standing in each jurisdiction where the character of its properties
owned or leased or the nature of its activities make such qualification necessary, except where the
failure to be so qualified or in good standing would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. Parent has delivered or made available to the Company complete
and correct copies of the certificate of incorporation and bylaws (or other equivalent constituent
documents, as applicable) of Parent, Merger Sub One and Merger Sub Two.



     4.2 Authorization; Board Approvals.



          (a) Each of Parent, Merger Sub One and Merger Sub Two has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the transactions contemplated
hereby and to perform its obligations hereunder. The execution and delivery of this Agreement by
Parent, Merger Sub One and Merger Sub Two, the performance by Parent, Merger Sub One and Merger Sub
Two of their respective obligations hereunder, and the consummation by Parent, Merger Sub One and
Merger Sub Two of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent, Merger Sub One and Merger Sub Two and no additional
corporate or other actions or proceedings on the part of Parent, Merger Sub One or Merger Sub Two
are necessary to authorize this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of Parent, Merger Sub One and
Merger Sub Two and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent, Merger Sub One and Merger Sub
Two, enforceable against each of them in accordance with its terms, except that such enforceability
(i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting or relating to creditors’ rights generally, and (ii) is subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).




          (b) At a meeting duly called and held on January 6, 2009, the Parent Board unanimously (i)
determined that this Agreement is advisable, (ii) determined that this Agreement and the
transactions contemplated hereby are fair to and in the best




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interests of the stockholders of
Parent, and (iii) approved this Agreement and the transactions contemplated hereby. Pursuant to
action taken by written consent on January 7, 2009, the board of directors of Merger Sub One
unanimously (A) determined that this Agreement is advisable, (B) determined that the transactions
contemplated hereby are fair to and in the best interests of the sole stockholder of Merger Sub
One, and (C) approved this Agreement and the transactions contemplated hereby, all upon the terms
and subject to the conditions set forth herein. Pursuant to action taken by written consent on
January 7, 2009, the board of directors Merger Sub Two unanimously (x) determined that this
Agreement is advisable, (y) determined that the transactions contemplated hereby are fair to and in
the best interests of the stockholder of Merger Sub Two, and (z) approved this Agreement and the
transactions contemplated hereby, all upon the terms and subject to the conditions set forth
herein.




     4.3 Non-contravention; Required Consents.



          (a) The execution, delivery or performance by Parent, Merger Sub One and Merger Sub Two of
this Agreement, the consummation by Parent, Merger Sub One and Merger Sub Two of the transactions
contemplated hereby and the compliance by Parent, Merger Sub One and Merger Sub Two with any of the
terms hereof do not and will not (i) violate or conflict with any provision of the certificate of
incorporation, bylaws or other equivalent constituent documents (as applicable) of Parent, Merger
Sub One or Merger Sub Two, (ii) violate, conflict with, or result in the breach of or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or
result in the termination of, or accelerate the performance required by, or result in a right of
termination or acceleration under, any Contract to which Parent or any of its Subsidiaries is a
party or by which Parent, any of its Subsidiaries or any of their properties or assets are bound,
(iii) assuming compliance with the matters referred to in Section 4.3(b), violate or
conflict with any Law or Order applicable to Parent or any of its Subsidiaries or by which any of
their properties or assets are bound or (iv) result in the creation of any Lien upon any of the
properties or assets of Parent or any of its Subsidiaries, except, in the case of each of clauses
(ii), (iii) and (iv) above, for such violations, conflicts, breaches, defaults, terminations,
accelerations or Liens which would not, individually or in the aggregate, have a Material Adverse
Effect on Parent.




          (b) No Consent of any Governmental Authority is required on the part of Parent, Merger Sub
One, Merger Sub Two or any of their Affiliates in connection with the execution, delivery and
performance by Parent, Merger Sub One or Merger Sub Two of this Agreement and the consummation by
Parent, Merger Sub One or Merger Sub Two of the transactions contemplated hereby, except (i) the
filing and recordation of the Certificate of Merger with the Secretary of State of the State of
Delaware and the filing of the certificate of merger for the Second Step Merger with the Secretary
of State of the State of Delaware, (ii) such filings and approvals as may be required by any U.S.
federal, state or non-U.S. securities laws or rules and regulations promulgated thereunder, federal
commodity futures laws, or rules of a self-regulatory organization, including compliance with any
applicable requirements of the Exchange Act, the Advisers Act, the CEA, or the rules of FINRA or
the NFA, (iii) compliance with any applicable requirements of the HSR




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Act and any applicable
foreign antitrust, competition or merger control laws, (iv) the filing of a Notification of Listing
of Additional Shares (or such other form as may be required by Nasdaq) with Nasdaq with respect to
the shares of the Parent Common Stock to be issued in the Merger, and (v) such other Consents, the
failure of which to obtain would not, individually or in the aggregate, have a Material Adverse
Effect on Parent.




     4.4 Capitalization.



          (a) The authorized capital stock of Parent consists of (i) one billion (1,000,000,000) shares
of Parent Common Stock, and (ii) one hundred million (100,000,000) shares of Parent Preferred
Stock. As of the close of business on December 31, 2008: (i) 590,232,205 shares of Parent Common
Stock were issued and outstanding, (ii) no shares of Parent Preferred Stock were issued and
outstanding, and (iii) 41,149, 655 shares of Parent Common Stock held by Parent as treasury shares. All outstanding shares of
Parent Common Stock are, and all shares of capital stock of Parent which may be issued as
contemplated or permitted by this Agreement will be, when issued, duly authorized, validly issued,
fully paid, nonassessable and free of any preemptive rights.




          (b) Parent has reserved 78,065,816 shares of Parent Common Stock for issuance under its equity
plans. As of December 31, 2008, with respect to Parent’s stock option plans, there were
outstanding equity awards to purchase or otherwise acquire 19,299,473 shares of Parent Common
Stock.




          (c) Except as set forth in this Section 4.4, as of the close of business on December
31, 2008, there were (i) no outstanding shares of capital stock of, or other equity or voting
interest in, Parent, (ii) no outstanding securities of Parent convertible into or exchangeable for
shares of capital stock of, or other equity or voting interest in, Parent, (iii) no outstanding
options, warrants, rights or other commitments or agreements to acquire from Parent, or that
obligates Parent to issue, any capital stock of, or other equity or voting interest in, or any
securities convertible into or exchangeable for shares of capital stock of, or other equity or
voting interest in, Parent, (iv) no obligations of Parent to grant, extend or enter into any
subscription, warrant, right, convertible or exchangeable security or other similar agreement or
commitment relating to any capital stock of, or other equity or voting interest (including any
voting debt) in, Parent and (v) no other obligations by Parent or any of its Subsidiaries to make
any payments based on the price or value of any securities of Parent. There are no outstanding
agreements of any kind which obligate Parent or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any securities of Parent.




          (d) As of the date hereof, neither Parent nor any of its Subsidiaries is a party to any
agreement, other than the Stockholders Agreement among Parent, The Toronto-Dominion Bank and
certain other stockholders of Parent, dated June 22, 2005, restricting the transfer of, relating to
the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights
or rights of first refusal or similar rights with respect to any securities of Parent.




     4.5 SEC Reports; Other Reports.



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          (a) Parent has filed all forms, reports and documents with the SEC that have been required to
be filed by it under applicable Laws since January 1, 2006 and prior to the date hereof, and Parent
will file prior to the Effective Time all forms, reports and documents with the SEC that are
required to be filed or furnished by it under applicable Laws prior to such time (all such forms,
reports and documents, together with any other forms, reports or other documents filed or furnished
by Parent with the SEC on or prior to the Effective Time that are not required to be so filed, the
“Parent SEC Reports”). Each Parent SEC Report complied, or will comply, as the case may
be, as of its filing date, in all material respects with the applicable requirements of the
Securities Act, the Exchange Act or the Advisers Act, as the case may be, each as in effect on the
date such Parent SEC Report was, or will be, filed. True and correct copies of all Parent SEC
Reports filed prior to the date hereof, whether or not required under applicable Laws, have been
furnished to the Company or are publicly available in the Electronic Data Gathering, Analysis and Retrieval
(EDGAR) and IARD databases of the SEC. As of its filing date (or, if amended or superseded by a
filing prior to the date of this Agreement, on the date of such amended or superseding filing),
each Parent SEC Report did not and will not contain, as the case may be, any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. None of
Parent’s Subsidiaries is required to file any forms, reports or other documents with the SEC. No
executive officer of Parent has failed to make the certifications required of him or her under
Section 302 or 906 of the Sarbanes-Oxley Act with respect to any Parent SEC Report, except as
disclosed in certifications filed with the Parent SEC Reports. Neither Parent nor any of its
executive officers has received notice from any Governmental Authority challenging or questioning
the accuracy, completeness, form or manner of filing of such certifications. There are no
outstanding written comments from the SEC with respect to any of the Parent SEC Reports.




          (b) Parent and each of its Subsidiaries have timely filed all material reports, registrations
and statements, together with any amendments required to be made with respect thereto, that it was
required to file since January 1, 2006 with any Governmental Authority (other than the SEC) and
have paid all material fees and assessments due and payable in connection therewith.




     4.6 Financial Statements and Controls.



          (a) The consolidated financial statements of Parent and its Subsidiaries filed in or furnished
with the Parent SEC Reports complied, and in the case of consolidated financial statements to be
filed in or furnished in Parent SEC Reports after the date hereof, will comply, in all material
respects with the published rules and regulations of the SEC with respect thereto and they have
been or will be, as the case may be, prepared in accordance with GAAP consistently applied during
the periods and at the dates involved (except as may be indicated in the notes thereto and, in the
case of unaudited interim financial statements, as may be permitted by the SEC for Quarterly
Reports on Form 10-Q), and fairly present in all material respects, or will fairly present in all
material respects, as the case may be, the consolidated financial position of Parent and its
Subsidiaries as of the dates thereof and the consolidated results of operations and cash flows for
the periods



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then ended, subject, in the case of unaudited interim financial statements, to normal
and year-end audit adjustments as permitted by GAAP and the applicable rules and regulations of the
SEC and any other adjustments expressly described therein, including the notes thereto.




          (b) Parent has established, and maintains and enforces, a system of internal accounting
controls which are effective in providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance with GAAP, including
policies and procedures that (i) require the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of Parent and its
Subsidiaries, (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that receipts and
expenditures of Parent and its Subsidiaries are being made only in accordance with appropriate authorizations of management and the Parent Board and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the assets of Parent and its Subsidiaries that could have a
material effect on Parent’s financial statements. Neither Parent nor any of its Subsidiaries nor
Parent’s independent auditors has identified or been made aware of (A) any significant deficiency
or material weakness (as defined in Rule 13a-15(f) promulgated under the Exchange Act) in the
system of internal accounting controls utilized by Parent and its Subsidiaries, (B) any fraud,
whether or not material, that involves Parent’s management or other employees who have a role in
the preparation of financial statements or the internal accounting controls utilized by Parent and
its Subsidiaries or (C) any claim or allegation regarding any of the foregoing.




          (c) Parent has established and maintains disclosure controls and procedures (as such terms are
defined in Rule 13a-15(e) or Rule 15d-15(e) promulgated under the Exchange Act) to ensure that
information required to be disclosed by Parent in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the SEC’s rules and forms and is accumulated and communicated to Parent’s management to allow
timely decisions regarding required disclosure.




          (d) Since January 1, 2006, neither Parent nor any of its Subsidiaries nor, to Parent’s
Knowledge, any director, officer, employee, auditor, accountant, consultant or representative of
Parent or any of its Subsidiaries has received or otherwise had or obtained Knowledge of any
substantive complaint, allegation, assertion or claim, whether written or oral, that Parent or any
of its Subsidiaries has engaged in questionable accounting or auditing practices. Since January 1,
2006, no current or former attorney representing Parent or any of its Subsidiaries has reported
evidence of a material violation of securities laws, breach of fiduciary duty or similar violation
by Parent or any of its officers, directors, employees or agents to the Parent Board or any
committee thereof or to any director or executive officer of Parent.




          (e) To Parent’s Knowledge, no employee of Parent or any of its Subsidiaries has provided or is
providing information to any law enforcement agency




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regarding the commission or possible commission
of any crime or the violation or possible violation of any applicable Laws of the type described in
Section 806 of the Sarbanes-Oxley Act by Parent or any of its Subsidiaries. Neither Parent nor any
of its Subsidiaries nor, to the Knowledge of Parent, any director, officer, employee, contractor,
subcontractor or agent of Parent or any such Subsidiary has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of Parent or any of
its Subsidiaries in the terms and conditions of employment because of any lawful act of such
employee described in Section 806 of the Sarbanes-Oxley Act.




     4.7 No Undisclosed Liabilities. Neither Parent nor any of its Subsidiaries has any
material Liabilities other than (a) Liabilities reflected or otherwise reserved against on the
quarter consolidated balance sheet of Parent included in its Form 10-K for the fiscal year ended
September 30, 2008 (including the notes thereto) as filed with the SEC, (b) Liabilities incurred after September 30, 2008 in the ordinary course of business consistent
with past practice, (c) Liabilities under this Agreement, or (d) Liabilities that are executory
obligations under Contracts to which Parent or any of its Subsidiaries is or may hereafter become a
party or is or may hereafter become bound (other than Liabilities thereunder due to breaches by
Parent or any of the Merger Subs of the terms set forth therein).



     4.8 Absence of Certain Changes.



          (a) Since September 30, 2008, there has not been or occurred any event, development, change,
circumstance or condition that would have, individually or in the aggregate, a Material Adverse
Effect on Parent.




          (b) Since September 30, 2008 through the date of this Agreement, except for actions expressly
contemplated by this Agreement, Parent and each of its Subsidiaries have conducted their respective
businesses, in all material respects, in the ordinary course consistent with past practice.




     4.9 Compliance with Laws and Orders; Permits.



          (a) Parent and each of its Subsidiaries are in compliance in all material respects with all
Laws and Orders applicable to Parent, its Subsidiaries, or any of the owned or leased real property
of Parent or any of its Subsidiaries, or to the conduct of the business or operations of Parent or
any of its Subsidiaries.




          (b) Parent and its Subsidiaries have, and are in compliance with the terms of, all Permits,
and no suspension or cancellation of any such Permits is pending or, to the Knowledge of Parent,
threatened, except for such noncompliance, suspensions or cancellations that would not,
individually or in the aggregate, have a Material Adverse Effect on Parent.




     4.10 Litigation; Orders. Except for any Legal Proceeding challenging or seeking to
prohibit the execution, delivery or performance of this Agreement or consummation of the
transactions contemplated by this Agreement, there are no Legal Proceedings pending or, to the
Knowledge of Parent, threatened, against Parent, any of its Subsidiaries or any of



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their respective
properties that would, individually or in the aggregate, have a Material Adverse Effect on Parent.
Neither Parent nor any of its Subsidiaries is subject to any outstanding Order, except for Orders
that would not, individually or in the aggregate, have a Material Adverse Effect on Parent and
other Orders generally applicable to Persons engaged in the businesses engaged in by Parent or its
Subsidiaries. As of the date hereof, there is no Legal Proceeding pending or, to the Knowledge of
Parent, threatened against Parent or any of its Subsidiaries challenging or seeking to prohibit the
execution, delivery or performance of this Agreement or consummation of the transactions
contemplated by this Agreement.




     4.11 Taxes. Each of Parent and its Subsidiaries has duly and timely filed (including
all applicable extensions) all material Tax Returns required to be filed by it since January 1, 2004 (all such returns being true, correct and complete in all material respects),
has paid (including withheld and remitted) all material Taxes due whether or not shown on any Tax
Return or made provision for the payment of all material Taxes that have been incurred or are due
or claimed to be due from it by appropriate Governmental Authorities other than Taxes that are not
yet delinquent or are being contested in good faith, have not been finally determined and have been
adequately reserved against. There are no material disputes pending, or claims asserted, for Taxes
or assessments upon Parent or any of its Subsidiaries for which Parent does not have reserves that
are adequate under GAAP.



     4.12 Ownership of Company Capital Stock. Prior to the date hereof (and without giving
effect the execution and delivery of the Voting Agreements), neither Parent, Merger Sub One nor
Merger Sub Two, alone or together with any other Person, was at any time during the last three (3)
years an “interested shareholder” within the meaning of Section 203 of the DGCL.



     4.13 No Contracts with Company Directors and Executive Officers. As of the date
hereof, other than the Voting Agreements and the Key Employee Employment Agreements, there are no
Contracts between Parent, Merger Sub One or Merger Sub Two, on the one hand, and any of the
Company’s directors or executive officers, on the other hand, that relate to the transactions
contemplated by this Agreement.



     4.14 Brokers. Except for Merrill Lynch, Pierce, Fenner & Smith Incorporated (true and
correct copies of whose engagement letter has been furnished to the Company), there is no
investment banker, broker, finder, agent or other Person that has been retained by or is authorized
to act on behalf of Parent or any of its Subsidiaries who is entitled to any financial advisor’s,
brokerage, finder’s or other similar fee or commission in connection with the transactions
contemplated by this Agreement.



ARTICLE V

INTERIM CONDUCT OF BUSINESS




     5.1 Affirmative Obligations of the Company. Except (a) as expressly contemplated or
permitted by this Agreement, (b) as set forth in Section 5.1 or Section 5.2



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of the
Company Disclosure Schedule, (c) as required by applicable Law, or (d) as approved in advance by
Parent in writing (which approval shall not be unreasonably withheld or delayed), at all times
during the period commencing with the execution and delivery of this Agreement and continuing until
the earlier to occur of the termination of this Agreement pursuant to Article VIII and the
Effective Time, each of the Company and each of its Subsidiaries shall (i) carry on its business in
the ordinary course in substantially the same manner as heretofore conducted and in compliance with
all applicable Laws, (ii) take all steps necessary to cause thinkorswim, Inc. to maintain net
capital of at least the greater of (x) an amount equal to 8 1/3% of the “aggregate indebtedness”
(as defined in subparagraph (c)(i) of the Net Capital Rule) of thinkorswim, Inc., and (y) $2.5
million, (iii) take, or cause to be taken, the actions set forth in Section 5.1(iii) of the
Company Disclosure Schedule, and (iv) use commercially reasonable efforts, consistent with its past
practices and policies, to (A) preserve intact its present business organization, (B) keep
available the services of its present officers and employees and (C) preserve its relationships with customers, suppliers,
distributors, licensors, licensees and others with which it has significant business dealings.




     5.2 Negative Obligations of the Company. Except (i) as expressly contemplated or
permitted by this Agreement, (ii) as set forth in Section 5.1 or Section 5.2 of the
Company Disclosure Schedule, (iii) as required by applicable Law or the terms of any Employee Plan,
or (iv) as approved in advance by Parent in writing (which approval shall not be unreasonably
withheld or delayed), at all times during the period commencing with the execution and delivery of
this Agreement and continuing until the earlier to occur of the termination of this Agreement
pursuant to Article VIII and the Effective Time, the Company shall not do any of the
following and shall not permit its Subsidiaries to do any of the following:



          (a) amend, or propose to adopt any amendments to, its certificate of incorporation or bylaws
or comparable organizational documents;




          (b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments, subscriptions, rights
to purchase or otherwise) any Company Securities or any Subsidiary Securities, except for (i) the
issuance and sale of shares of Company Common Stock pursuant to Company Stock Awards outstanding
prior to the date hereof and (ii) grants to newly hired employees of Company Stock Awards issued in
the ordinary course of business consistent with past practice, with a per share exercise price (if
applicable) that is no less than the then-current fair market value of a share of Company Common
Stock and not subject to any accelerated vesting or other provision that would be triggered solely
as a result of the consummation of the transactions contemplated by this Agreement so long as the
aggregate number of shares of Company Common Stock subject to such additional Company Stock Awards
does not exceed the sum of (x) 50,000, plus (y) the number of shares of Company Common Stock
subject to any Company Stock Awards (or portion thereof) outstanding as of the date hereof that is
subsequently canceled, terminated or forfeited as the result of the voluntary or involuntary
termination of employment of any employee;




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          (c) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary
Securities, except to the extent that such acquisition or redemption is pursuant to the terms of
any Employee Plan (as in effect on the date hereof) or any agreement subject to any such Employee
Plan;




          (d) other than dividends or distributions made by any direct or indirect wholly-owned
Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment
dates for the payment of any dividends or distributions on capital stock, split, combine or
reclassify any shares of capital stock, declare, set aside or pay any dividend or other
distribution (whether in cash, shares or property or any combination thereof) in respect of any
shares of capital stock, or make any other actual, constructive or deemed distribution in respect
of the shares of capital stock;




          (e) propose or adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the Company or any of its
Subsidiaries;




          (f) (i) incur or assume any long-term or short-term indebtedness for borrowed money or issue
any debt securities, except for loans or advances to or from direct or indirect wholly-owned
Subsidiaries, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person except with respect to
obligations of direct or indirect wholly-owned Subsidiaries of the Company, (iii) except for
advances made in the ordinary course of business consistent with past practice, make any loans or
advances to employees of the Company or any of its Subsidiaries, (iv) acquire, or make any capital
contributions to or investments in any other Person (other than direct or indirect wholly-owned
Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests
(other than in a fiduciary capacity in the ordinary course of business consistent with past
practice), whether by merger, consolidation, asset purchase or other business combination, or by
formation of any joint venture or other business organization or by contributions to capital; or
(v) mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or
suffer to exist any Lien (other than Permitted Liens) thereupon;




          (g) except as may be required by applicable Law or the terms of any Employee Plan as in effect
on the date hereof, enter into, adopt, amend (including an amendment to provide for the
acceleration of vesting), modify or terminate any Employee Plan in any material respect, or
increase or decrease the compensation or fringe benefits of any director, executive officer or
employee (except for normal increases of cash compensation in the ordinary course of business
consistent with past practice to any current or future employee whose base salary does not exceed
$150,000 per annum), pay any bonus or special remuneration (whether in cash, equity or otherwise)
to any director, officer or employee (other than bonuses made in the ordinary course of business
consistent with past practice with respect to employees who are not executive officers or directors
of the Company), or pay any benefit not required by any Employee Plan as in effect as of the date
hereof;




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          (h) forgive any Loans to any employees, officers or directors of the Company or any of its
Subsidiaries, or any of their respective Affiliates;




          (i) make any deposits or contributions of cash or other property to, or take any other action
to fund, or in any other way secure the payment of compensation or benefits under the Employee
Plans or Contracts subject to the Employee Plans, other than deposits and contributions that are
required pursuant to the terms of the Employee Plans or any Contracts subject to the Employee Plans
in effect as of the date hereof;




          (j) enter into, amend, or extend any Collective Bargaining Agreement;




          (k) (1) acquire, lease (as lessee) or license (as licensee) any property or assets with a fair
market value in excess of $500,000 in the aggregate per fiscal quarter, except transactions required pursuant to existing Contracts as in effect on the date hereof;
or (2) sell, lease (as lessor), license (as licensor) or dispose of any property or assets with a
fair market value in excess of $500,000 in the aggregate per fiscal quarter, except (i)
transactions required pursuant to existing Contracts as in effect on the date hereof, (ii) sales of
Loans and sales of investment securities subject to repurchase, in each case in the ordinary course
of business consistent with past practice, or (iii) pledges of assets to secure public deposits
accepted in the ordinary course of business consistent with past practice;




          (l) except as may be required as a result of a change in applicable Laws or in GAAP, make any
change in any of the accounting principles or practices used by it;




          (m) (i) make or change any material Tax election, (ii) settle or compromise any material U.S.
federal, state, local or non-U.S. Tax liability or (iii) consent to any extension or waiver of any
limitation period with respect to any claim or assessment for material Taxes;




          (n) enter into any IP Licenses or amend any IP Licenses or grant any release or relinquishment
of any rights under any IP Licenses, except (i) to customers and (ii) non-exclusive in-bound
licenses for commercially available technology, in each case in the ordinary course of business
consistent with past practice;




          (o) grant any exclusive rights with respect to any Company Intellectual Property, divest any
Company Intellectual Property, except if such divestiture or divestures, individually or in the
aggregate, are not material to the Company, or materially modify the Company’s standard warranty
terms for Company Products or services or amend or modify any product or service warranty in any
manner that is likely to be materially adverse to the Company or any of its Subsidiaries;




          (p) authorize, incur or commit to incur any capital expenditure(s) which, individually or in
the aggregate, is or are material to the Company, other than pursuant to existing Contracts as in
effect on the date hereof;




          (q) at any time permit the net capital of thinkorswim, Inc. to be less than the greater of (x)
an amount equal to 8 1/3% of the “aggregate indebtedness” (as




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defined in subparagraph (c)(i) of the
Net Capital Rule) of thinkorswim, Inc., and (y) $2.5 million;




          (r) (1) settle or compromise any pending or threatened Legal Proceeding or pay, discharge or
satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or
accrued, asserted or unasserted, contingent or otherwise), other than the settlement, compromise,
payment, discharge or satisfaction of Legal Proceedings, claims and other Liabilities that (i) are
reflected or reserved against in full in the Balance Sheet or incurred since the date of the
Balance Sheet in the ordinary course of business consistent with past practice, (ii) are covered by
existing insurance policies, or (iii) otherwise do not involve the payment of money in excess of
$250,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction
of which does not include any obligation (other than the payment of money not in excess of $250,000
in the aggregate above the amounts reflected or reserved in the Balance Sheet in respect of such Legal
Proceeding) to be performed by the Company or its Subsidiaries following the Effective Time; or (2)
take any action described in Section 5.2(r)(2) of the Company Disclosure Schedule;




          (s) except as required by applicable Laws or GAAP, revalue in any material respect any of its
properties or assets including writing-off notes or accounts receivable;




          (t) except as required by applicable Laws, convene any regular or special meeting (or any
adjournment or postponement thereof) of the stockholders of the Company other than the Company
Stockholder Meeting;




          (u) other than in the ordinary course of business consistent with past practice, (i) enter
into, renew, extend or terminate any Material Contract (or any Contract that would have been a
Material Contract if it had been in effect on the date hereof); or (ii) make any material amendment
or change in any such Material Contract;




          (v) (i) enter into any lease or sublease of real property (whether as a lessor, sublessor,
lessee or sublessee); (ii) modify, amend or exercise any right to renew any lease or sublease of
real property; or (iii) make application for the opening, relocation or closing of any, or open,
relocate or close any, branch office or other real property;




          (w) enter into any new line of business or change its material operating policies in any
material respect, except as required by Law or by policies imposed by any Governmental Authority;




          (x) enter into any securitizations of any Loans or create any special purpose funding or
variable interest entity;




          (y) enter into a Contract to do any of the foregoing or make any formal or informal
arrangement or understanding, whether or not binding, with respect to any of the foregoing; or




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          (z) knowingly take any action which (i) results or is reasonably likely to result in any of
the conditions to the Merger set forth in Article VII not being satisfied, (ii) has or is
reasonably likely to have in a Material Adverse Effect on the Company, (iii) would materially
impair the Company’s ability to consummate the transactions contemplated by this Agreement in
accordance with the terms hereof and applicable Legal Requirements or (iv) would materially delay
the consummation of the Merger and the other transactions contemplated by this Agreement.




ARTICLE VI

ADDITIONAL AGREEMENTS




     6.1 No Solicitation.



          (a) The Company and its Subsidiaries shall, and shall use reasonable best efforts to cause
each of their officers, directors, agents, representatives and advisors to, immediately cease any
and all existing activities, discussions or negotiations with any Persons conducted heretofore with
respect to any Acquisition Proposal or Acquisition Transaction.




          (b) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, the Company shall not, the Company shall cause its
Subsidiaries not to, and the Company shall not authorize or permit any of its or its Subsidiaries’
directors, officers or other employees, controlled Affiliates, or any of its or its Subsidiaries’
investment bankers, attorneys or other advisors, representatives or agents to, directly or
indirectly:




               (i) solicit, initiate or knowingly encourage, facilitate or induce any inquiry with respect
to, or the making, submission or announcement of, an Acquisition Proposal or an Acquisition
Transaction;



               (ii) furnish to any Person (other than Parent, Merger Sub One, Merger Sub Two or any designees
of Parent or the Merger Subs) any non-public information relating to the Company or any of its
Subsidiaries, or afford access to the business, properties, assets, books or records of the Company
or any of its Subsidiaries to any Person (other than Parent, Merger Sub One, Merger Sub Two or any
designees of Parent or the Merger Subs), or take any other action, in each case in a manner that is
intended or would be reasonably expected to assist or facilitate any inquiries or the making of any
proposal that constitutes or could lead to an Acquisition Proposal or an Acquisition Transaction;



               (iii) participate or engage in discussions or negotiations with any Person with respect to an
Acquisition Proposal or an Acquisition Transaction;



               (iv) enter into any letter of intent, memorandum of understanding or other Contract
contemplating or otherwise relating to an Acquisition Proposal or an



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Acquisition Transaction (other
than a confidentiality and “standstill” agreement pursuant to and in accordance with Section
6.1(c)); or



               (v) take any action to exempt any Person, other than Parent and the Merger Subs, from DGCL
Section 203 or any other applicable anti-takeover Laws; or



               (vi) agree to do any of the foregoing, or propose to do any of the foregoing other than
pursuant to Section 6.1(c) or Section 6.7(b) in accordance with the terms thereof;



          (c) Notwithstanding the foregoing terms of Section 6.1(b), at any time prior to
obtaining the Requisite Merger Approval, the Company Board may, directly or indirectly through
advisors, agents or other intermediaries, (x) engage or participate in discussions or negotiations with any Person that has made (and not withdrawn) a bona fide,
unsolicited Acquisition Proposal in writing after the date hereof, other than as a result of a
breach or violation of the terms of this Section 6.1, and/or (y) furnish to any Person that
has made (and not withdrawn) a bona fide, unsolicited Acquisition Proposal in writing after the
date hereof, other than as a result of a breach or violation of the terms of this
Section 6.1, any non-public information relating to the Company or any of its Subsidiaries;
provided, however, the Company may take any action contemplated by the foregoing clauses (x) or (y)
if and only if all of the following conditions have been satisfied prior to taking such action (and
continue to be satisfied at all times during which any of the foregoing actions are being taken):




               (i) the Company Board shall have reasonably determined in good faith (after consultation with
Paragon or another financial advisor of nationally recognized standing and the Company’s outside
legal counsel) that such Acquisition Proposal either constitutes or is reasonably likely to lead to
a Superior Proposal and that the failure to take such action in response to such Acquisition
Proposal would reasonably be expected to result in a breach of its fiduciary duties under Delaware
Law;



               (ii) none of the Company, any of its Subsidiaries or any directors, officers or other
employees, controlled Affiliates, or any investment bankers, attorneys or other advisors,
representatives or agents of the Company or any of its Subsidiaries, shall have breached or
violated in any material respect the terms of this Section 6.1 in connection with such
Acquisition Proposal or in connection with any other Acquisition Proposal made by any Person (or
any Affiliate or agent thereof) making such Acquisition Proposal;



               (iii) the Company shall have entered into a confidentiality and “standstill” agreement, the
terms of which are no less favorable to the Company than those contained in the Confidentiality
Agreement;



               (iv) the Company shall have given Parent prior written notice of (x) its intent to take the
action permitted by this Section 6.1, (y) the identity of the Person(s) making the
Acquisition Proposal forming the basis for taking the action permitted by this Section 6.1,
and (z) all of the material terms and conditions of such



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Acquisition Proposal (and if such
Acquisition Proposal is in written form, prior to taking such any action, the Company shall have
given Parent a copy of such Acquisition Proposal and all related agreements, commitment letters and
other material documents constituting such Acquisition Proposal provided or otherwise furnished by
the Person(s) making such Acquisition Proposal in connection therewith); and



               (v) contemporaneously with furnishing any non-public information to such Person, the Company
shall have furnished or made available such non-public information to Parent (to the extent such
information has not been previously furnished by the Company to Parent).



          (d) Without limiting the generality of the foregoing, Parent, Merger Sub One, Merger Sub Two
and the Company acknowledge and hereby agree that any action taken by any directors, officers or other employees, controlled Affiliates, or any investment
banker, attorney or other advisor or representative retained by the Company or any of its
Subsidiaries that would be a breach of the restrictions set forth in this Section 6.1 if
taken by the Company shall be deemed to be a breach of this Section 6.1 by the Company for
all purposes of and under this Agreement.




          (e) In addition to the obligations of the Company set forth in Section 6.1(c), the
Company shall promptly, and in all cases within forty-eight (48) hours of its receipt, advise
Parent orally and in writing of the receipt of (i) any Acquisition Proposal, (ii) any request for
information that would reasonably be expected to lead to an Acquisition Proposal, or (iii) any
inquiry with respect to, or which would reasonably be expected to lead to, any Acquisition
Proposal, the material terms and conditions of such Acquisition Proposal, request or inquiry (and
all related agreements, commitment letters and other material documents constituting such
Acquisition Proposal), and the identity of the Person or group making any such Acquisition
Proposal, request or inquiry. At all times from and after the Company’s receipt thereof, the
Company shall keep Parent reasonably informed of the status and material terms and conditions
(including all amendments or proposed amendments) of any such Acquisition Proposal, request or
inquiry.




          (f) The Company shall provide Parent with at least forty-eight (48) hours prior written notice
(or any shorter period of advance notice provided to members of the Company Board) of a meeting of
the Company Board (or any committee thereof) at which the Company Board (or any committee thereof)
is reasonably expected to consider an Acquisition Proposal or Acquisition Transaction.




     6.2 Reasonable Best Efforts to Complete. Upon the terms and subject to the conditions
set forth in this Agreement, each of Parent, Merger Sub One, Merger Sub Two and the Company shall
use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other party or parties hereto in doing, all things
reasonably necessary, proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement, including by:



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          (a) using its reasonable best efforts to cause the conditions to the Merger set forth in
Article VII to be satisfied or fulfilled, including by filing as promptly as practicable
after the date hereof with the SEC all annual, quarterly and current reports required to be filed
by it under the Exchange Act for any and all periods ending prior to the Effective Time;




          (b) using its reasonable best efforts to obtain all necessary consents, waivers and approvals,
and to provide all necessary notices, under any material Contracts to which it or any of its
Subsidiaries is a party in connection with this Agreement and the consummation of the transactions
contemplated hereby so as to maintain and preserve the benefits under such Contracts following the
consummation of the transactions contemplated by this Agreement, provided that in the event that
the other parties to any such Contract, including any lessor or licensor of any Leased Real
Property, conditions its grant of a consent, waiver or approval (including by threatening to exercise a “recapture” or other
termination right) upon the payment of a consent fee, “profit sharing” payment or other
consideration, including increased rent payments or other payments under the Contract, the Company
shall not make or commit to make any such payment or provide any such consideration without
Parent’s prior written consent;




          (c) making all necessary registrations, declarations and filings with Governmental Authorities
in connection with this Agreement and the consummation of the transactions contemplated hereby, and
using its reasonable best efforts to obtain all necessary actions or non-actions, waivers,
clearances, consents, approvals, orders and authorizations from Governmental Authorities (including
all Antitrust Approvals) in connection with this Agreement and the consummation of the transactions
contemplated hereby;




          (d) executing and delivering any additional instruments reasonably necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this Agreement; and




          (e) assisting the other parties in (A) making all necessary registrations, declarations and
filings with Governmental Authorities in connection with this Agreement and the consummation of the
transactions contemplated hereby, including by providing such information regarding itself, its
Affiliates and their respective operations as may be requested in connection with a filing by it or
any of its Subsidiaries, (B) obtaining all necessary actions or non-actions, waivers, clearances,
consents, approvals, orders and authorizations from Governmental Authorities (including all
Antitrust Approvals) in connection with this Agreement and the consummation of the transactions
contemplated hereby, and (C) delivering any additional instruments required to be made, obtained or
delivered to consummate the transactions contemplated by this Agreement.




     6.3 Regulatory Filings.



          (a) Without limiting the generality of the provisions of Section 6.2 and to the extent
required by applicable Laws, as promptly as practicable following the execution and delivery of
this Agreement, each of Parent and the Company shall make or



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submit all applications, notices,
petitions and filings, file or submit all documentation, and use their respective reasonable best
efforts to obtain as promptly as practicable all clearances, permits, consents, approvals and
authorizations of all third parties and Governmental Authorities, in each case which are necessary
or advisable to consummate the transactions contemplated by this Agreement as promptly as
practicable and to comply with the terms and conditions of all such clearances, permits, consents,
approvals and authorizations of all such third parties and Governmental Authorities. The Company
and Parent shall have the right to review in advance, and to the extent practicable each will
consult the other on, in each case subject to applicable Laws and Orders, all the documentation and
information relating to the other party and any of its respective Subsidiaries, that appears in any
application, notice, petition, filing and documentation made with, or written materials submitted
to, any third party or any Governmental Authority in connection with the transactions contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto shall act reasonably and as promptly as practicable. Parent and
the Company shall promptly advise each other upon receiving any communication from any Governmental
Authority whose clearance, consent or approval is required to consummate the transactions
contemplated by this Agreement which causes such party to believe that there is a reasonable
likelihood that any clearance, consent or approval required in order to consummate the transactions
contemplated by this Agreement will not be obtained or that the receipt of any such clearance,
consent or approval will be materially delayed or conditioned.




          (b) Each of Parent and the Company shall promptly (i) cooperate and coordinate with the other
in the making and submitting the applications, notices, petitions and filings contemplated by this
Section 6.3, (ii) subject to applicable Laws and Orders, supply the other with any
information that may be required in order to effectuate such applications, notices, petitions and
filings, and (iii) supply any additional information that may be required or reasonably requested
by any Governmental Authority in connection with such applications, notices, petitions and
filings. Subject to applicable Laws and Orders, each party hereto shall (A) promptly inform the
other party hereto of any communication from any Governmental Authority regarding any of the
transactions contemplated by this Agreement, (B) permit the other party hereto the opportunity to
review in advance all the information relating to Parent and its Subsidiaries or the Company and
its Subsidiaries, as the case may be, that appears in any application, notice, petition or filing
made with, or written materials submitted to, any third party and/or any Governmental Authority in
connection with the transactions contemplated hereby, (C) not participate in any substantive
meeting or discussion with any Governmental Authority in respect of any filing, investigation, or
inquiry concerning the transactions contemplated hereby unless and until such party has consulted
with the other party, and, to the extent permitted by such Governmental Authority, gives the other
party the opportunity to attend such meeting or discussion, and (D) furnish the other party with
copies of all correspondences, filings, and written communications between them and their
Subsidiaries and representatives, on the one hand, and any Governmental Authority or its respective
staff, on the other hand, with respect to the transactions contemplated hereby. Each party hereto
shall promptly inform the other party or parties hereto, as the case may be, of any communication
from any Governmental Authority regarding any of the transactions



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contemplated by this Agreement.
If any party hereto or Affiliate thereof receives a request for additional information or
documentary material from any such Governmental Authority with respect to the transactions
contemplated by this Agreement, then such party shall use its reasonable best efforts to make, or
cause to be made, as soon as reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request.




     6.4 Anti-Takeover Laws. In the event that any state anti-takeover or other similar
statute or regulation is or becomes applicable to this Agreement or any of the transactions
contemplated by this Agreement, the Company, at the direction of the Company Board, shall use its
reasonable best efforts to ensure that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms and subject to the conditions set forth in this
Agreement, and otherwise to minimize the effect of such statute or regulation on this Agreement and the transactions contemplated
hereby.



     6.5 Registration Statement; Proxy Statement/Prospectus.




          (a) As promptly as practicable after the execution and delivery of this Agreement, Parent and
the Company shall prepare, and Parent shall file with the SEC, a Registration Statement on Form S-4
in connection with the issuance of shares of Parent Common Stock in the Merger (as may be amended
or supplemented from time to time, the “Registration Statement”). The Registration
Statement shall include (i) a prospectus for the issuance of shares of Parent Common Stock in the
Merger, and (ii) a proxy statement of the Company for use in connection with the solicitation of
proxies for the Merger Proposal to be considered at the Company Stockholder Meeting (as may be
amended or supplemented from time to time, the “Proxy Statement/Prospectus”). Each of
Parent and the Company shall use its reasonable best efforts to have the Registration Statement
declared effective by the SEC under the Securities Act as promptly as practicable after such filing
with the SEC. Without limiting the generality of the foregoing, each of the Company and Parent
shall, and shall cause its respective representatives to, fully cooperate with the other party
hereto and its respective representatives in the preparation of the Registration Statement and the
Proxy Statement/Prospectus, and shall furnish the other party hereto with all information
concerning it and its Affiliates as the other party hereto may deem reasonably necessary or
advisable in connection with the preparation of the Registration Statement and the Proxy
Statement/Prospectus, and any amendment or supplement thereto, and each of Parent and the Company
shall provide the other party hereto with a reasonable opportunity to review and comment thereon.
As promptly as practicable after the Registration Statement is declared effective by the SEC,
Parent and the Company shall cause the Proxy Statement/Prospectus to be disseminated to the
stockholders of the Company.




          (b) Unless the Company Board shall have effected a Company Board Recommendation Change in
compliance with the terms and conditions set forth in this Agreement, the Proxy
Statement/Prospectus shall include the Company Board Recommendation.




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          (c) Except as otherwise set forth in this Agreement or as may be required by applicable Law or
Order, neither Parent nor the Company shall effect any amendment or supplement (including by
incorporation by reference) to the Proxy Statement/Prospectus or the Registration Statement without
the prior consent of the other party (which consent shall not be unreasonably withheld, delayed or
conditioned); provided, however, that the Company, in connection with a Company Board
Recommendation Change, may amend or supplement the proxy statement for the Company pursuant to a
Qualifying Amendment to effect such change, and in such event, the right of approval set forth in
this Section 6.5(c) shall apply only with respect to such information relating to the other
party or its business, financial condition or results of operations, and shall be subject to the
Company’s right to have the deliberations and conclusions of the Company Board accurately
described. A “Qualifying Amendment” means an amendment or supplement to the proxy
statement for the Company if and solely to the extent that it contains (i) a Company Board Recommendation Change, (ii) a statement of the reasons of the Company Board for
making such Company Board Recommendation Change, and (iii) additional information reasonably
related to the foregoing.




          (d) The Registration Statement and the Proxy Statement/Prospectus shall comply in all material
respects as to form and substance with the requirements of the Securities Act and the Exchange Act.
Without limiting the generality of the foregoing, the information supplied or to be supplied by
any party hereto for inclusion or incorporation by reference in the Registration Statement shall
not, at the time the Registration Statement is filed with the SEC or declared effective by the SEC
or at the Effective Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The information
supplied or to be supplied by any party hereto for inclusion or incorporation by reference in the
Proxy Statement/Prospectus shall not, at the time the Registration Statement is declared effective,
on the date the Proxy Statement/Prospectus (or any amendment thereof or supplement thereto) is
first mailed to stockholders, or at the time of the Company Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The information supplied or to be supplied by or on behalf of
either party hereto for inclusion in any filing pursuant to Rule 165 and Rule 425 under the
Securities Act or Rule 14a-12 under the Exchange Act (each, a “Regulation M-A Filing”)
shall not, at the time any such Regulation M-A Filing is filed with the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Without limiting the generality of the foregoing, prior to the
Effective Time, Parent and the Company shall notify each other as promptly as practicable upon
becoming aware of any event or circumstance which should be described in an amendment of, or
supplement to, the Registration Statement, Proxy Statement/Prospectus or any Regulation M-A Filing
so that any such document would not include any misstatement of material fact or omit to state any
material fact necessary to make the statements therein, in light of the circumstances under which
they are made, not misleading, and as promptly as practicable



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thereafter, an appropriate amendment
or supplement describing such information shall be promptly filed with the SEC and, to the extent
required by applicable Law or the SEC, disseminated to the stockholders of Parent and/or the
Company. Parent and the Company shall each notify the other as promptly as practicable after the
receipt by it of any written or oral comments of the SEC or its staff on, or of any written or oral
request by the SEC or its staff for amendments or supplements to, the Registration Statement, the
Proxy Statement/Prospectus or any Regulation M-A Filing, and shall promptly supply the other with
copies of all correspondence between it or any of its representatives and the SEC or its staff with
respect to any of the foregoing filings. Prior to filing the Registration Statement or mailing the
Proxy Statement/Prospectus to stockholders (or filing or mailing any amendment thereof or
supplement thereto), each of Parent and the Company, as the case may be, (i) shall provide the
other party with a reasonable opportunity to review and comment on such document or response, (ii) shall include in such document or response all comments reasonably and timely
proposed by such other party and (iii) shall not file or mail such document or respond to the SEC
prior to receiving such other party’s approval, which approval shall not be unreasonably withheld,
conditioned or delayed.




          (e) Parent and the Company shall make any necessary filings with respect to the Merger under
the Securities Act, the Advisers Act and the Exchange Act. In addition, Parent shall use
reasonable best efforts to take all actions required under any applicable federal or state
securities or Blue Sky Laws in connection with the issuance of shares of Parent Common Stock in the
Merger.




     6.6 Company Stockholder Meeting.



          (a) The Company shall establish a record date for, call, give notice of, convene, hold, and
take a vote of stockholders on (i) the adoption of this Agreement in accordance with the DGCL (the
“Merger Proposal”) and (ii) the approval of the Option Exchange Proposal, at a meeting of
the Company stockholders (the “Company Stockholder Meeting”) as promptly as practicable
following the date hereof (which, if reasonably practicable, shall be within forty five (45) days
following the date on which the Proxy Statement/Prospectus is first disseminated to Company
stockholders).




          (b) The Company shall use its reasonable best efforts to solicit proxies from the Company
stockholders in connection with the Merger Proposal and the Option Exchange Proposal, and unless
the Company Board has effected a Company Board Recommendation Change pursuant to and in accordance
with the terms of Section 6.7, the Company Board shall use its reasonable best efforts to
obtain the Requisite Merger Approval and Requisite Option Exchange Approval at the Company
Stockholder Meeting or any postponement or adjournment thereof, including by soliciting proxies
from Company stockholders in favor of the Merger Proposal and the Option Exchange Proposal. At the
Company Stockholder Meeting, the Company shall submit to a vote of its stockholders the Merger
Proposal and the Option Exchange Proposal. Except as required by applicable Law, the Company shall
not propose for consideration or submit for a vote any matters at the Company Stockholder Meeting
other than the Merger Proposal and the Option Exchange Proposal (or an adjournment of the Company
Stockholder Meeting, if



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permitted hereunder) without the prior written consent of Parent. Except
as required by applicable Law, the Company shall not establish a record date for, call, give notice
of, convene or hold any meeting of the Company stockholders unless and until the Company
Stockholder Meeting has been held, a vote of the Company stockholders has been taken on the Merger
Proposal and the Option Exchange Proposal and the Company Stockholder Meeting has been adjourned.
Notwithstanding anything to the contrary set forth in this Agreement, the Company’s obligations
under this Section 6.6 shall not be terminated, superceded, limited, modified or otherwise
affected by the commencement, disclosure, announcement or submission to the Company of any
Acquisition Proposal or Acquisition Transaction, or by any Company Board Recommendation Change
(whether or not in compliance with the terms hereof). For the avoidance of doubt, the Company
shall not be required (i) to hold the Company Stockholder Meeting if this Agreement is validly
terminated in accordance with Section 8.1 or (ii) to make a formal recommendation to its stockholders on the
Option Exchange Proposal.




          (c) Notwithstanding anything to the contrary contained in this Agreement, the Company may
adjourn or postpone the Company Stockholder Meeting (i) to the extent necessary to ensure that any
required supplement or amendment to the Proxy Statement/Prospectus is filed and/or provided to the
Company’s stockholders, (ii) if as of the time for which the Company Stockholder Meeting is
originally scheduled (as set forth in the Proxy Statement/Prospectus) there are insufficient shares
of Company Common Stock represented (either in person or by proxy) to constitute a quorum necessary
to conduct the business of the Company Stockholder Meeting, (iii) on a single occasion, for a
period not to exceed thirty (30) days, for the purpose of soliciting additional proxies in favor of
the approval of the Merger Proposal, or (iv) with the prior written consent of Parent, which
consent will not be unreasonably withheld or delayed.




     6.7 Company Board Recommendation.



          (a) Subject to the terms of this Section 6.7, the Company Board shall recommend that
the Company stockholders adopt this Agreement in accordance with the applicable provisions of
Delaware Law (the “Company Board Recommendation”) at the Company Stockholder Meeting.
Neither the Company Board nor any committee thereof shall (x) withhold, withdraw, amend or modify,
or publicly propose to withhold, withdraw, amend or modify, in a manner adverse to Parent and/or
approval of the Merger Proposal, the Company Board Recommendation or (y) approve, endorse or
recommend, or publicly propose to approve, endorse or recommend any Acquisition Proposal or
Acquisition Agreement (any of the actions referred to in the preceding clauses (x) and (y) being a
“Company Board Recommendation Change”).




          (b) Notwithstanding the foregoing terms of this Section 6.7, at any time prior to
receipt of the Requisite Merger Approval, the Company Board may effect a Company Board
Recommendation Change and, in the case of Section 6.7(b)(ii), the Company may terminate
this Agreement in accordance with Section 8.1(f), if and only if either:




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               (i) a material fact, event, change, development or set of circumstances (other than an
Acquisition Proposal occurring or arising after the date of this Agreement, it being understood and
hereby agreed that the Company Board may only effect a Company Board Recommendation Change in
response to or in connection with an Acquisition Proposal pursuant to and in accordance with
Section 6.7(b)(ii) below) that was not known by the Company Board as of or at any time
prior to the date of this Agreement (and not relating in any way to any Acquisition Proposal) (such
material fact, event, change, development or set of circumstances, an “Intervening Event”)
shall have occurred and be continuing and prior to effecting such Company Board Recommendation
Change:




               (A) the Company Board shall have reasonably determined in good faith (after
consultation with the Company’s outside legal counsel) that, in light of such Intervening Event, the failure of the Company Board to effect such
Company Board Recommendation Change would reasonably be expected to result in a breach of
its fiduciary duties under Delaware Law;




               (B) the Company Board shall have given Parent at least five (5) Business Days prior
written notice that the Company Board intends to take such action and the opportunity to
meet with the Company Board and the Company’s financial advisors and outside legal counsel
at such times as Parent may reasonably request for the purpose of enabling Parent and the
Company to discuss in good faith (x) the Company Board’s basis and rationale for proposing
to effect such Company Board Recommendation Change, and/or (y) possible modifications of
the terms and conditions of this Agreement in such a manner that would obviate the need for
the Company Board to effect such Company Board Recommendation Change in response to the
Intervening Event; and




               (C) after the foregoing five (5) Business Day period and, if requested by Parent,
meetings with Parent and its financial advisors and legal counsel during such five (5)
Business Day period, the Company Board reasonably determines in good faith (after
consultation with the Company’s outside legal counsel), that, in light of such Intervening
Event and any modifications to the terms and conditions of this Agreement that Parent may
propose, the failure to effect such a Company Board Recommendation Change would reasonably
be expected to result in a breach of its fiduciary duties under Delaware Law; or



               (ii) the Company Board shall have received a bona fide, unsolicited Acquisition Proposal in
writing after the date hereof, other than as a result of a breach or violation of the terms of
Section 6.1, which has not been withdrawn, and prior to (and in connection with) effecting
such Company Board Recommendation Change or terminating this Agreement in accordance with
Section 8.1(f), as applicable:




               (A) none of the Company, any of its Subsidiaries or any directors, officers or other
employees, controlled Affiliates, or any investment bankers, attorneys or other advisors,
representatives or agents of the Company or any of its Subsidiaries, shall have breached or
violated in any material respect the terms of Section 6.1 in connection with such
Acquisition Proposal or in connection



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with any other Acquisition Proposal made or submitted
by any Person (or any Affiliate or agent thereof) making such Acquisition Proposal;




               (B) the Company Board shall have reasonably determined in good faith (after
consultation with Paragon or another financial advisor of nationally recognized standing
and the Company’s outside legal counsel) that such Acquisition Proposal constitutes a
Superior Proposal and shall have further reasonably determined in good faith (after
consultation with the Company’s outside legal counsel) that, in light of such Superior
Proposal, the failure to effect a Company Board Recommendation Change or to terminate this
Agreement in accordance with Section 8.1(f) in response to such Superior Proposal,
as applicable, would reasonably be expected to result in a breach of its fiduciary duties under
Delaware Law;




               (C) the Company Board shall have given Parent at least five (5) Business Days prior
written notice (1) of the identity of the Person(s) making such Superior Proposal and all
of the material terms and conditions of such Superior Proposal (and if such Superior
Proposal is in written form, a copy of such Superior Proposal and all related agreements,
commitment letters and other material documents provided or otherwise furnished by the
Person(s) making such Superior Proposal in connection therewith), and (2) that the Company
Board intends to effect a Company Board Recommendation Change or terminate this Agreement
in accordance with Section 8.1(f) in response to such Superior Proposal and the
opportunity to meet with the Company Board and the Company’s financial advisors and outside
legal counsel at such times as Parent may reasonably request for the purpose of enabling
Parent and the Company to discuss in good faith such Superior Proposal, this Agreement and
the terms and conditions hereof, and any modifications of the terms and conditions of this
Agreement that Parent may propose in response thereto; and




               (D) after the foregoing five (5) Business Day period and, if requested by Parent,
meetings with Parent and its financial advisors and legal counsel during such five (5)
Business Day period, the Company Board shall have reasonably determined in good faith
(after consultation with Paragon or another financial advisor of nationally recognized
standing and the Company’s outside legal counsel) that such Acquisition Proposal continues
to constitute a Superior Proposal, and shall have further reasonably determined in good
faith (after consultation with the Company’s outside legal counsel) that, in light of such
Superior Proposal and after good faith consideration of all proposals (whether or not
binding) by Parent, the failure to effect a Company Board Recommendation Change or to
terminate this Agreement in accordance with Section 8.1(f), as applicable, would
reasonably be expected to result in a breach of its fiduciary duties under Delaware Law.



          (c) Nothing in this Agreement shall prohibit the Company Board from taking and disclosing to
the Company stockholders a position contemplated by Rule 14e-



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2(a) under the Exchange Act or
complying with the provisions of Rule 14d-9 promulgated under the Exchange Act; provided, however,
that any statement or other disclosure made by the Company Board pursuant to Rule 14e-2(a) under
the Exchange Act or Rule 14d-9 under the Exchange Act shall be subject to the terms and conditions
of this Agreement, including the provisions of Article VIII; and provided further, that any
such statement or disclosure (other than a “stop, look and listen communication” of the type
contemplated by Rule 14d-9(f) under the Exchange Act, and within the time period contemplated by
Rule 14d-9(f)(3)) shall be deemed to be a Company Board Recommendation Change if the Company Board
does not expressly publicly reaffirm the Company Board Recommendation in connection with such
statement or disclosure.




          (d) Nothing set forth in this Section 6.7 shall (i) limit the obligation of the
Company to establish a record date for, call, give notice of, convene and hold the Company
Stockholder Meeting, (ii) relieve the Company of its obligation to solicit proxies for the Company
Stockholder Meeting and submit to a vote of its stockholders the Merger Proposal at the Company
Stockholder Meeting, or (iii) except as required by applicable Law, permit the Company to submit
for a vote of its stockholders at or prior to the Company Stockholder Meeting any matter other than
the Merger Proposal and the Option Exchange Proposal.




     6.8 Access; Notice and Consultation.



          (a) Subject to any restrictions imposed under applicable Laws, at all times during the period
commencing with the execution and delivery of this Agreement and continuing until the earlier to
occur of the termination of this Agreement pursuant to Article VIII and the Effective Time,
the Company shall afford Parent and its accountants, legal counsel and other representatives
reasonable access during normal business hours, upon reasonable notice, to any assets, properties,
contracts, books, records and personnel of the Company and its Subsidiaries as Parent may
reasonably request. Notwithstanding the foregoing, the Company and its Subsidiaries shall not be
required to provide access to or disclose information where such access or disclosure would
reasonably be likely to jeopardize the attorney-client privilege of the Company or any of its
Subsidiaries; provided, however, that in such circumstances the parties shall use reasonable best
efforts to make appropriate substitute disclosure arrangements that would not so jeopardize such
privilege. Subject to any restrictions imposed under applicable Laws, at all times during the
period commencing with the execution and delivery of this Agreement and continuing until the
earlier to occur of the termination of this Agreement pursuant to Article VIII and the
Effective Time, Parent shall afford the Company and its and its accountants, legal counsel and
other representatives reasonable access to Parent’s senior management to discuss Parent’s financial
performance and other material events and circumstances involving Parent as the Company may
reasonably request.




          (b) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, each of Parent and the Company shall promptly
notify the other upon obtaining Knowledge that any



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representation or warranty made by such party in
this Agreement has become untrue or inaccurate in any material respect or that such party has
breached or failed to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by such party under this Agreement.




          (c) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, (i) the Company shall promptly notify Parent upon
obtaining Knowledge of any written notice or other written communication (including e-mail)
received by the Company or any of its Subsidiaries from any third party, subsequent to the date of
this Agreement and prior to the Effective Time, alleging any material breach of or material default under any Material Contract to which the
Company or any of its Subsidiaries is a party, and (ii) each of the Company and Parent shall
promptly notify the other upon obtaining Knowledge of any written notice or other written
communication (including e-mail) received by it or any of its Subsidiaries from any third party,
subsequent to the date of this Agreement and prior to the Effective Time, alleging that any
material consent is or may be required in connection with the transactions contemplated by this
Agreement.




          (d) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, (i) each of Parent and the Company shall promptly
advise the other orally and in writing of any litigation commenced after the date hereof against it
or any of its directors or executive officers by any of its stockholders (on their own behalf or on
behalf of Parent or the Company, as the case may be) relating to this Agreement or the transactions
contemplated hereby and shall keep the other party reasonably informed regarding any such
litigation, and (ii) the Company shall keep Parent reasonably informed as to the matters set forth
in Section 6.8(d) of the Company Disclosure Schedule and (iii) the Company shall promptly
advise Parent of, and shall keep Parent reasonably informed regarding, any other litigation
commenced or, to the Knowledge of the Company, threatened after the date hereof against the Company
or any of its directors or executive officers where the amount claimed is or would reasonably be
expected to be in excess of $500,000 (the matters referenced in the foregoing clauses (i), (ii) and
(iii) being referred to herein as the “Legal Proceeding Matters”). The Company shall give
Parent the opportunity to consult with the Company regarding the defense or settlement of any such
Legal Proceeding Matter involving the Company and shall consider in good faith Parent’s views with
respect to such Legal Proceeding Matter involving the Company, and the Company shall not settle any
such Legal Proceeding Matter without the prior written consent of Parent (which consent shall not
be unreasonably withheld or delayed).




          (e) At all times during the period commencing with the execution and delivery of this
Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant
to Article VIII and the Effective Time, the Company shall, and shall cause its Subsidiaries
to, make available to Parent a copy of each annual and quarterly report on 10-K or 10-Q (as
applicable), and each registration statement, proposed



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to be filed by the Company with the SEC
during such period a reasonable period of time prior to the filing of such reports or registration
statements (and in any event, if reasonably practicable, at least two (2) Business Days prior to
the filing thereof with the SEC).




          (f) Notwithstanding anything to the contrary set forth in this Agreement, no information
obtained pursuant to the access granted or notification provided pursuant to this Section
6.8 shall be deemed to (i) amend or otherwise modify in any respect any representation or
warranty of the party hereto providing such access or notice, (ii) impair or otherwise prejudice in
any manner rights of the party receiving such access or notice to rely upon the conditions to the
obligations of such party to consummate the transactions contemplated by this Agreement, or (iii)
impair or otherwise limit the remedies available to the party receiving such access or notice. The terms and conditions of the Confidentiality
Agreement shall apply to any information acquired or provided pursuant to this Section 6.8.




     6.9 Confidentiality. Parent, Merger Sub One, Merger Sub Two and the Company hereby
acknowledge that Parent and the Company have previously executed a Reciprocal Non-Use and
Nondisclosure Agreement, dated September 17, 2007 (as amended, the “Confidentiality
Agreement”), which will continue in full force and effect in accordance with its terms, as it
may be amended from time to time.



     6.10 Public Disclosure. Except with regard to a Company Board Recommendation Change
permitted and effected pursuant to Section 6.7, each of Parent and the Company shall
consult with the other before issuing any press release or making any public announcement or
statement with respect to this Agreement or the transactions contemplated hereby, and shall not
issue any such press release or make any such public announcement or statement without the prior
written consent of the other party hereto, which consent shall not be unreasonably withheld or
delayed; provided, however, that either Parent or the Company may, without the prior consent of the
other party hereto, issue any such press release or make any such public announcement or statement
as may be required by Law or the rules and regulations of the Nasdaq if such party first notifies
and (if practicable) consults with the other regarding the timing and substance of such public
announcement or statement.



     6.11 Employee Matters.



          (a) Prior to the Effective Date, the Company shall, and shall cause its Subsidiaries to (and
from and after the Effective Date, Parent shall cause the Final Surviving Corporation to) honor in
accordance with their terms all existing employment, change of control and severance agreements
between the Company or any of its Subsidiaries, on the one hand, and any director, officer or other
employee of the Company or any of its Subsidiaries, on the other hand. Notwithstanding the
foregoing, Parent and the Final Surviving Corporation shall be permitted to amend such agreements
to the extent required by applicable Laws.




          (b) Effective as of the day immediately preceding the Closing Date, each of the Company and
any ERISA Affiliate shall terminate any and all Employee Plans



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intended to include a Code Section
401(k) arrangement (each, a “401(k) Plan”) (unless Parent provides written notice to the
Company that such 401(k) Plans shall not be terminated). Unless Parent provides such written
notice to the Company, no later than five (5) Business Days prior to the Closing Date, the Company
shall provide Parent with evidence that such Employee Plan(s) have been terminated (effective as of
the day immediately preceding the Closing Date) pursuant to resolutions of the Company Board or
such Affiliate, as the case may be. The form and substance of such resolutions shall be subject to
the reasonable review and approval of Parent. The Company also shall take such other actions in
furtherance of terminating such Employee Plan(s) as Parent may reasonably require. In the event
that termination of a 401(k) Plan would reasonably be anticipated to trigger liquidation charges,
surrender charges or other fees then the Company shall take such actions as are necessary to reasonably estimate the amount of such charges and/or fees
and provide such estimate in writing to Parent no later than fifteen (15) calendar days prior to
the Closing Date. If, in accordance with this Section 6.11(b), Parent requests in writing
that the Company not terminate any 401(k) Plan, the Company shall take such actions as Parent may
reasonably require in furtherance of the assumption of any such 401(k) Plan by Parent, including,
but not limited to, adopting such amendments as Parent may deem necessary or advisable in
connection with such assumption with or without cause or notice.




          (c) The Company shall consult with Parent (and consider in good faith the advice of Parent)
prior to sending any notices or other communication materials to Company employees and the Company
shall not send any material written notices or other material written communication materials
(including via electronic mail) to Company employees without the prior written consent of Parent
(which consent will not be unreasonably withheld or delayed).




          (d) Parent shall, or shall cause the Final Surviving Corporation, for the period commencing at
the Effective Time and ending on the second anniversary thereof, to maintain or provide for the
individuals employed by the Company and its Subsidiaries at the Effective Time (the “Continuing
Employees”) compensation and benefits (including without limitation severance benefits) under
Employee Plans that are (i) in the aggregate no less favorable than the compensation and benefits
maintained for and provided to Continuing Employees immediately prior to the Effective Time, (ii)
in the aggregate at least as favorable as the compensation and benefits provided to similarly
situated employees of Parent, or (iii) any combination of clauses (i) and (ii) above; provided,
however, subject to the foregoing, that nothing herein shall prevent the amendment or termination
of any Employee Plan or interfere with the Final Surviving Corporation’s right or obligation to
make such changes as are necessary to conform with applicable Law. Nothing in this Section
6.11(d) shall limit the right of Parent, the Final Surviving Corporation or any of their
subsidiaries to terminate the employment of any Continuing Employee at any time. The provisions of
this Section 6.11(d) are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder, and nothing herein shall be deemed to amend any Employee
Plan to reflect the terms of this Section 6.11(d).




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          (e) From and after the Effective Time, and to the extent permitted by applicable Law, Parent
shall, or shall cause the Final Surviving Corporation to, recognize the prior service with the
Company or its Subsidiaries of each Continuing Employee in connection with all employee benefit
plans, programs or policies of Parent or its Affiliates in which Continuing Employees are eligible
to participate following the Effective Time for purposes of eligibility and vesting and
determination of level of benefits (but not for purposes of benefit accruals under any defined
benefit pension plan or to the extent that such recognition would result in duplication of
benefits). From and after the Effective Time, Parent shall, or shall cause the Final Surviving
Corporation to, (i) cause any pre-existing conditions or limitations and eligibility waiting
periods under any group health plans of Parent or its Affiliates to be waived with respect to
Continuing Employees and their eligible dependents to the extent such Continuing Employees and
their eligible dependents were not subject to such preexisting conditions and limitations and
eligibility waiting periods under the comparable Employee Plans as of the time immediately preceding the Closing,
and (ii) provide each Continuing Employee with credit for any deductibles paid under any Employee
Plan that provides medical, dental or vision benefits in the plan year in effect as of the Closing
Date in satisfying any applicable deductible or out of pocket requirements under any medical,
dental or vision plans of Parent, the Final Surviving Corporation or its Subsidiaries that such
employees are eligible to participate in after the Effective Time to the same extent that such
expenses were recognized under the comparable Employee Plan. The provisions of this Section
6.11(e) are not intended to confer upon any person other than the parties hereto any rights or
remedies hereunder, and nothing herein shall be deemed to amend any Employee Plan to reflect the
terms of this Section 6.11(e).




     6.12 Directors’ and Officers’ Indemnification and Insurance.



          (a) The Final Surviving Corporation and its Subsidiaries shall (and Parent shall cause the
Final Surviving Corporation and its Subsidiaries to) honor and fulfill in all respects the
obligations of the Company and its Subsidiaries under the certificate of incorporation and bylaws
(or other similar organizational documents) of the Company and its Subsidiaries as in effect on the
date hereof and any and all agreements for indemnification, exculpation of liability and/or advance
of expenses in effect as of the date hereof between the Company or any of its Subsidiaries and any
of their respective current or former directors and officers and any person who becomes a director
or officer of the Company or any of its Subsidiaries prior to the Effective Time (the
“Indemnified Parties”). In addition, for a period of six (6) years following the Effective
Time, the Final Surviving Corporation and its Subsidiaries shall (and Parent shall cause the Final
Surviving Corporation and its Subsidiaries to) cause the certificate of formation (and other
similar organizational documents) of the Final Surviving Corporation and its Subsidiaries to
contain provisions with respect to indemnification, exculpation from liability and the advancement
of expenses that are at least as favorable as the indemnification, exculpation from liability and
advancement of expense provisions set forth in the certificate of incorporation and bylaws (or
other similar organizational documents) of the Company and its Subsidiaries as of the date hereof,
and during such six (6) year period, such provisions shall not be amended, repealed or otherwise
modified in any manner that would adversely




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affect the rights thereunder of individuals who were
covered by such provisions, except as required by applicable Law or Order.




          (b) Prior to or as of the Effective Time, Parent shall purchase a six-year “tail” prepaid
policy on the Company’s current directors’ and officers’ liability insurance (“D&O
Insurance”) in respect of acts or omissions occurring at or prior to the Effective Time,
covering each person covered by the D&O Insurance as of the date hereof, on terms and conditions no
less favorable to the beneficiaries thereof, in the aggregate, than the D&O Insurance. Parent and
the Final Surviving Corporation shall maintain such “tail” policy in full force and effect and
continue to honor their respective obligations thereunder; provided, however, that in satisfying
its obligations under this Section 6.12(b), Parent shall not be obligated to pay in excess
of the amount set forth in Section 6.12 of the Company Disclosure Schedule (such aggregate
amount, the “Maximum Premium”), provided that if the cost of such “tail” insurance coverage exceeds the Maximum Premium, Parent and the Final
Surviving Corporation shall be obligated to obtain a policy with the greatest coverage available
for a cost not exceeding the Maximum Premium.




          (c) If any Indemnified Person makes a claim to enforce the obligations set forth in this
Section 6.12 that is denied by the Final Surviving Corporation or any of its Subsidiaries
(or by Parent after a request that Parent fulfill its obligations hereunder), and a court of
competent jurisdiction determines that such Indemnified Person is entitled to the benefit of such
obligations hereunder, then the Final Surviving Corporation shall (and Parent shall cause the Final
Surviving Corporation to) pay all expenses, including reasonable fees and expenses of counsel, that
such Indemnified Person incurred to enforce the obligations set forth in this Section 6.12;
provided, however, that nothing in this Section 6.12(c) shall prejudice the right of any
Indemnified Person to any advancement of expenses provided under the certificate of incorporation
or bylaws of the Company or its Subsidiaries as in effect on the date hereof or any agreement with
the Company or any of its Subsidiaries.




          (d) If Parent, the Final Surviving Corporation, any Subsidiaries of the Final Surviving
Corporation or any of their respective successors or assigns shall (i) consolidate with or merge
into any other Person and shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfer all or substantially all of its properties and assets to
any Person, then, and in each such case, proper provisions shall be made so that the successors and
assigns of Parent, the Final Surviving Corporation and/or any such Subsidiaries, as applicable,
shall assume all of the obligations of Parent, the Final Surviving Corporation or its Subsidiaries,
as applicable, under this Section 6.12.




          (e) The obligations under this Section 6.12 shall not be terminated, amended or
otherwise modified in such a manner as to adversely affect any Indemnified Party (or any other
person who is a beneficiary under “tail” policy referred to in Section 6.12(b) (and their
heirs and representatives)) without the prior written consent of such affected Indemnified Party or
other person who is a beneficiary under the “tail” policy referred to in Section 6.12(b)
(and their heirs and representatives). Each of the



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Indemnified Parties or other persons who are
beneficiaries under the “tail” policy referred to in Section 6.12(b) (and their heirs and
representatives) are intended to be third party beneficiaries of this Section 6.12, with
full rights of enforcement as if a party thereto. The rights of the Indemnified Parties (and other
persons who are beneficiaries under the “tail” policy referred to in Section 6.12(b) (and
their heirs and representatives)) under this Section 6.12 shall be in addition to, and not
in substitution for, any other rights that such persons may have under the certificate or articles
of incorporation, bylaws or other equivalent organizational documents, any and all indemnification
agreements of or entered into by the Company or any of its Subsidiaries, or applicable Laws
(whether at law or in equity).




     6.13 Resignation of Officers and Directors of Company Subsidiaries. At or prior to
the Closing, upon the request of Parent, the Company shall use its reasonable best efforts to obtain the resignations of all directors and officers of its Subsidiaries, in each case to
be effective as of the Effective Time.



     6.14 Section 16 Resolutions. The Parent Board, or a committee thereof consisting of
non-employee directors (as such term is defined for purposes of Rule 16b 3(d) under the Exchange
Act), shall adopt a resolution prior to the Effective Time providing that the receipt by Company
Insiders of Parent Common Stock in exchange for shares of Company Common Stock, and of options to
purchase Parent Common Stock upon assumption and conversion of the Company Stock Awards, pursuant
to the transactions contemplated by this Agreement is intended to be exempt from Section 16(b) of
the Exchange Act pursuant to Rule 16b-3 promulgated thereunder. In addition, the Company Board, or
a committee thereof consisting of non-employee directors (as such term is defined for purposes of
Rule 16b-3(d) promulgated under the Exchange Act) shall adopt a resolution prior to the Effective
Time providing that the disposition by Company Insiders of Company Common Stock in exchange for
cash and shares of Parent Common Stock, and the disposition of their Company Stock Awards which
will be deemed to occur upon the assumption of those options and their resulting conversion into
options to purchase Parent Common Stock pursuant to the transactions contemplated hereby are also
intended to be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated
thereunder. For purposes of this Agreement, and the term “Company Insiders” shall mean
those directors and officers of the Company who are subject to the reporting requirements of
Section 16(a) of the Exchange Act.



     6.15 Nasdaq Listing. Prior to the Closing, Parent shall file a Notification of
Listing of Additional Shares (or such other form as may be required by Nasdaq) with Nasdaq with
respect to the shares of the Parent Common Stock to be issued in the Merger and shall use
reasonable best efforts to cause such shares to be approved for listing as promptly as practicable
and, in any event, before the Closing Date.



     6.16 Registration Statements for Assumed Options and Other Awards. As soon a
practicable following the Effective Time, but in no event later than ten (10) Business Days
following the Effective Time, Parent shall file a registration statement under the Securities Act
on Form S-8 (and use its reasonable best efforts to maintain the



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effectiveness thereof) relating to
shares of Parent Common Stock issuable with respect to the Assumed Options, in each case to the
extent eligible for registration on Form S-8, and shall use its reasonable best efforts to cause
such registration statement to remain in effect for so long as such Assumed Options shall remain
outstanding.



     6.17 Obligations of the Merger Subs. Parent shall cause Merger Sub One, Merger Sub
Two, the Interim Surviving Corporation and the Final Surviving Corporation to perform their
respective obligations under this Agreement and to consummate the transactions contemplated hereby
upon the terms and subject to the conditions set forth in this Agreement.



     6.18 Tax Matters. None of Parent, Merger Sub One, Merger Sub Two or the Company
shall, and they shall not permit any of their respective Subsidiaries to, take any action prior to or following the Effective Time that would reasonably be expected to cause the
Integrated Merger to fail to qualify as a “reorganization” within the meaning of Section 368(a) of
the Code. Each of Parent, Merger Sub One, Merger Sub Two and the Company shall use its reasonable
best efforts to obtain the Tax opinions described in Section 7.1(g) (collectively, the
“Tax Opinions”). Officers of Parent, Merger Sub One, Merger Sub Two and the Company shall
execute and deliver to Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to
Parent, and Cleary Gottlieb Steen & Hamilton LLP, counsel to the Company, certificates containing
customary representations at such time or times as may be reasonably requested by such law firms,
including the effective date of the Registration Statement and the Effective Time, in connection
with their respective deliveries of opinions with respect to the Tax treatment of the Integrated
Merger.



     6.19 Funded Debt. Prior to the Closing Date, the Company shall use its reasonable
best efforts to sell, and shall cause each of its Subsidiaries to sell, all marketable securities,
and to dividend the proceeds thereof to the Company, which shall invest such proceeds in cash or
cash equivalents (such cash equivalents to be AAA-rated government securities with maturities no
greater than 90 days). At Parent’s request, the Company shall use its reasonable best efforts to
(i) obtain a customary pay-off letter with respect to the Credit Agreement in advance of the
Closing Date and (ii) apply the available cash of the Company (to the extent permitted without
causing non-compliance with Section 5.2(q) of this Agreement) toward the repayment
effective on the Closing Date immediately after the Effective Time of outstanding indebtedness
under the Credit Agreement. For the avoidance of doubt, this covenant is not intended to assure a
minimum amount of cash or cash equivalents on the balance sheet of the Company and its Subsidiaries
as of the Closing Date.



ARTICLE VII

CONDITIONS TO THE MERGER




     7.1 Conditions to Each Party’s Obligations to Effect the Merger. The respective
obligations of Parent, Merger Sub One, Merger Sub Two and the Company to consummate the Merger
shall be subject to the satisfaction or waiver (where permissible under applicable Laws) prior to
the Closing, of each of the following conditions:



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          (a) Effectiveness of the Registration Statement. The Registration Statement shall
have been declared effective by the SEC under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Proxy Statement/Prospectus shall have
been initiated or threatened in writing by the SEC.




          (b) Requisite Merger Approval. The Requisite Merger Approval shall have been
obtained.




          (c) Antitrust Approvals. (i) The waiting period (and extensions thereof) applicable
to the transactions contemplated by this Agreement under the HSR Act shall have expired or been
terminated and (ii) any and all other waiting periods applicable to, and any and all clearances,
approvals and consents required to be obtained in connection with, the transactions contemplated by this Agreement under all Laws governing antitrust, unfair
competition or restraints on trade shall have expired, been terminated or obtained, other than
those waiting periods, clearances, approvals and consents the failure of which to be terminated or
obtained (x) would not have a material adverse effect on the Company and its Subsidiaries, taken as
a whole, (y) would not be material to the business or operations of Parent and its Subsidiaries,
and (z) would not materially impair the benefits expected to be derived by Parent from the
transactions contemplated by this Agreement (all of the waiting periods, clearances, approvals and
other consents referenced in the preceding clauses (i) and (ii) being collectively referred to
herein as the “Antitrust Approvals” and each individually as an “Antitrust
Approval”).




          (d) FINRA Approval. FINRA’s approval of the transactions contemplated by this
Agreement (including approval pursuant to FINRA Membership Rule 1017) shall have been obtained and
shall remain in full force and effect.




          (e) IIROC Approval. IIROC’s approval of the transactions contemplated by this
Agreement shall have been obtained and shall remain in full force and effect.




          (f) Nasdaq Listing. The shares of the Parent Common Stock issuable in the Merger
shall have been approved for listing on Nasdaq, subject to official notice of issuance.




          (g) Tax Opinions. Parent shall have received an opinion of Wilson Sonsini Goodrich &
Rosati, Professional Corporation, and the Company shall have received an opinion of Cleary Gottlieb
Steen & Hamilton LLP, each dated as of the Effective Time and each to the effect that the
Integrated Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the
Code. The issuance of such opinions shall be conditioned upon the receipt by such counsel of
customary representation letters from each of Parent, Merger Sub One, Merger Sub Two and the
Company, in each case, in form and substance reasonably satisfactory to such counsel. Each such
representation letter shall be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect.




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          (h) No Legal Prohibition. No Governmental Authority shall have enacted, issued,
granted, promulgated, entered, enforced or deemed applicable to the transactions contemplated by
this Agreement (other than the Option Exchange Program) any Law or Order (whether temporary,
preliminary or permanent) that is in effect and has the effect of (i) making any of the
transactions contemplated by this Agreement illegal in any jurisdiction, or (ii) prohibiting or
otherwise preventing the consummation of any of the transactions contemplated by this Agreement
(other than the Option Exchange Program) in any jurisdiction.




     7.2 Additional Conditions to the Obligations of Parent and the Merger Subs. The
obligations of Parent, Merger Sub One and Merger Sub Two to consummate the Merger shall be subject to the satisfaction or waiver prior to the Effective Time of each of
the following conditions, any of which may be waived exclusively by Parent:



          (a) Representations and Warranties.




               (i) The representations and warranties of the Company set forth in Section 3.1,
Section 3.2, Section 3.3(b), Section 3.4, Section 3.23 and
Section 3.24 (collectively, the “Specified Company Representations”), (A) shall
have been true and correct in all material respects as of the date of this Agreement, and (B) shall
be true and correct in all material respects on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date (other than those representations and warranties
which address matters only as of a particular date, which shall have been true and correct in all
material respects only as of such particular date), it being understood and hereby agreed that any
breach of or inaccuracy in the representations and warranties of the Company set forth in
Section 3.4(a) that would result in the issuance or payment of an aggregate value of Merger
Consideration in the Merger that equals or exceeds 101% of the aggregate value of Merger
Consideration otherwise issuable and payable in the Merger in the absence of such breach or
inaccuracy shall be deemed to be material for purposes of this Section 7.2(a)(i); provided,
however, that for purposes of determining the accuracy of the representations and warranties of the
Company set forth in this Agreement for purposes of this Section 7.2(a)(i), (1) all
“Material Adverse Effect” qualifications and other qualifications based on the word “material” or
similar phrases contained in such representations and warranties shall be disregarded, and (2) any
update of or modification to the Company Disclosure Schedule made or purported to have been made
after the date hereof shall be disregarded.



               (ii) All representations and warranties of the Company set forth in this Agreement other than
the Specified Company Representations (A) shall have been true and correct as of the date of this
Agreement, and (B) shall be true and correct on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date, except for any failure to be so true and correct
which has not had and would not have, individually or in



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the aggregate, a Material Adverse Effect
on the Company (other than those representations and warranties which address matters only as of a
particular date, which shall have been true and correct only as of such particular date, except for
any failure to be so true and correct which has not had and would not have, individually or in the
aggregate, a Material Adverse Effect on the Company); provided, however, that for purposes of
determining the accuracy of the representations and warranties of the Company set forth in this
Agreement for purposes of this Section 7.2(a)(ii), (1) all “Material Adverse Effect”
qualifications and other qualifications based on the word “material” or similar phrases contained
in such representations and warranties shall be disregarded (it being understood and agreed that
the representation and warranty set forth in Section 3.9(a) shall not be disregarded), and
(2) any update of or modification to the Company Disclosure Schedule made or purported to have been
made after the date hereof shall be disregarded.




          (b) Performance of Obligations of the Company. The Company shall have performed in
all material respects any obligations and complied in all material respects with any covenants or other agreements of the Company to be performed or complied with by it
under this Agreement at or prior to the Effective Time.




          (c) No Material Adverse Effect. No event, development, change, circumstance or
condition shall have occurred or exist that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company (whether or not any
events, developments, changes, circumstances or conditions occurring prior to the execution and
delivery of this Agreement caused or contributed to the occurrence of such Material Adverse Effect
on the Company).




          (d) Officer’s Certificate. Parent shall have received a certificate, validly executed
for and on behalf of the Company and in its name by the Chief Executive Officer and Chief Financial
Officer of the Company, certifying the satisfaction of the conditions set forth in Section
7.2(a), Section 7.2(b), and Section 7.2(c).




          (e) Governmental Actions. There shall not be pending any suit, action or other Legal
Proceeding by any U.S. federal or Canadian Governmental Authority (including FINRA and IIROC),
against Parent, Merger Sub One, Merger Sub Two, the Company or any of their respective Subsidiaries
seeking to restrain or prohibit the consummation of any of the transactions contemplated by this
Agreement in any jurisdiction or the performance of any of the transactions contemplated by this
Agreement or the Voting Agreements (other than the Option Exchange Program).




          (f) Provincial Securities Commission Approvals. The approval of the following
Canadian securities regulators of the transactions contemplated by this Agreement have been
obtained, or shall have been indicated by such regulators not to be required, and such approvals or
indications, as the case may be, shall remain in full force and effect: British Columbia Securities
Commission, Alberta Securities Commission, Ontario Securities Commission and Autorité des Marchés
Financiers du Québec.




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     7.3 Additional Conditions to the Company’s Obligations to Effect the Merger. The
obligations of the Company to consummate the Merger shall be subject to the satisfaction or waiver
prior to the Effective Time of each of the following conditions, any of which may be waived
exclusively by the Company:



          (a) Representations and Warranties.




               (i) The representations and warranties of Parent set forth in Section 4.1, Section
4.2, Section 4.3(b), Section 4.4 and Section 4.14 (the “Specified
Parent Representations”) (A) shall have been true and correct in all material respects as of
the date of this Agreement and (B) shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as if made on and as of the Closing Date (other
than those representations and warranties which address matters only as of a particular date, which
shall have been true and correct in all material respects only as of such particular date);
provided, however, that for purposes of determining the accuracy of the representations and
warranties of Parent set forth in this Agreement for purposes of this Section 7.3(a)(i), (1) all “Material Adverse Effect” qualifications and other
qualifications based on the word “material” or similar phrases contained in such representations
and warranties shall be disregarded (it being understood and agreed that the representation and
warranty set forth in Section 4.8(a) shall not be disregarded), and (2) any update of or
modification to the Parent Disclosure Schedule made or purported to have been made after the date
hereof shall be disregarded.



               (ii) All representations and warranties of Parent set forth in this Agreement other than the
Specified Parent Representations (A) shall have been true and correct as of the date of this
Agreement and (B) shall be true and correct on and as of the Closing Date with the same force and
effect as if made on and as of the Closing Date, except for any failure to be so true and correct
which has not had and would not have, individually or in the aggregate, a Material Adverse Effect
on Parent (other than those representations and warranties which address matters only as of a
particular date, which shall have been true and correct only as of such particular date, except for
any failure to be so true and correct which has not had and would not have, individually or in the
aggregate, a Material Adverse Effect on Parent); provided, however, that for purposes of
determining the accuracy of the representations and warranties of Parent set forth in this
Agreement for purposes of this Section 7.3(a)(ii), (1) all “Material Adverse Effect”
qualifications and other qualifications based on the word “material” or similar phrases contained
in such representations and warranties shall be disregarded (it being understood and agreed that
the representation and warranty set forth in Section 4.8(a) shall not be disregarded), and
(2) any update of or modification to the Parent Disclosure Schedule made or purported to have been
made after the date hereof shall be disregarded.



          (b) Performance of Obligations of Parent and the Merger Subs. Parent, Merger Sub One
and Merger Sub Two shall have performed in all material respects any obligations and complied in
all material respects with any covenants or other agreements of Parent and the Merger Subs to be
performed or complied with by them under this Agreement at or prior to the Effective Time.




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          (c) No Material Adverse Effect. No event, development, change, circumstance or
condition shall have occurred or exist that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent (whether or not any events,
developments, changes, circumstances or conditions occurring prior to the execution and delivery of
this Agreement caused or contributed to the occurrence of such Material Adverse Effect on Parent).




          (d) Officer’s Certificate. The Company shall have received a certificate, validly
executed for and on behalf of Parent and in its name by the Chief Executive Officer and Chief
Financial Officer of Parent, certifying the satisfaction of the conditions set forth in Section
7.3(a), Section 7.3(b) and Section 7.3(c).




ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER




     8.1 Termination. Notwithstanding the prior receipt of the Requisite Merger Approval,
this Agreement may be validly terminated and the transactions contemplated hereby may be abandoned
only as follows (it being agreed that the party hereto terminating this Agreement pursuant to this
Section 8.1 shall give prompt written notice of such termination to the other party or
parties hereto):



          (a) by mutual written agreement of Parent and the Company at any time prior to the Effective
Time (whether or not the Requisite Merger Approval has been obtained); or




          (b) by either Parent or the Company, at any time prior to the Effective Time (whether or not
the Requisite Merger Approval has been obtained), if the Effective Time has not occurred prior to
11:59 p.m. (New York City time) on October 7, 2009 (the “Termination Date”); provided,
however, that in the event Parent or any of Parent’s Subsidiaries announces, following the date
hereof and prior to the Termination Date, entry into a definitive agreement for a transaction that
is reportable under the HSR Act or subject to review by FINRA (a “Reviewable Transaction”),
the right of Parent to terminate this Agreement pursuant to this Section 8.1(b) shall not
be available until the later of (1) 11:59 p.m. (New York City time) on the Termination Date and (2)
11:59 p.m. (New York City time) on the thirtieth (30th) day immediately following the earlier to
occur of the consummation or termination of such Reviewable Transaction; and provided further, that
the right to terminate this Agreement pursuant to this Section 8.1(b) shall not be
available to any party hereto whose action or failure to take any action has been the cause of, or
resulted in, any of the conditions to the Merger set forth in Article VII having failed to
be satisfied on or before the Termination Date, as applicable, or in the Effective Time not
occurring prior to the Termination Date, as applicable, in either case if such action or failure to
take action constituted a material breach of this Agreement; or




          (c) by either Parent or the Company, at any time prior to the Effective Time (whether or not
the Requisite Merger Approval has been obtained), if any Governmental Authority (i) shall have
enacted, issued, granted, promulgated, entered,



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enforced or deemed applicable to any of the
transactions contemplated by this Agreement (other than the Option Exchange Program) any Law or any
final, non-appealable Order that is in effect and has the effect of making the consummation of any
of the transactions contemplated by this Agreement (other than the Option Exchange Program) illegal
in any jurisdiction or which has the effect of prohibiting or otherwise preventing the consummation
of any of the transactions contemplated by this Agreement (other than the Option Exchange Program)
in any jurisdiction, or (ii) from which an Antitrust Approval is required has denied such approval
and such denial has become final and non-appealable; or




          (d) by either Parent or the Company, at any time prior to the Effective Time, if the Company
shall have failed to obtain the Requisite Merger Approval at the Company Stockholder Meeting (or any postponement or adjournment thereof) at which a vote was
taken on the Merger Proposal; or




          (e) by the Company, at any time prior to the Effective Time (whether or not the Requisite
Merger Approval has been obtained), provided that the Company is not then in material breach of any
covenant or agreement of the Company set forth in this Agreement, in the event (i) of a breach of
any covenant or agreement on the part of Parent or the Merger Subs set forth in this Agreement or
(ii) that any of the representations and warranties of Parent and the Merger Subs set forth in this
Agreement shall have been inaccurate when made or shall have become inaccurate, in either case such
that the conditions to the Merger set forth in Section 7.3(a) or Section 7.3(b)
would not be satisfied as of the time of such breach or as of the time such representation and
warranty became inaccurate; provided, however, that notwithstanding the foregoing, in the event
that such breach by Parent, Merger Sub One or Merger Sub Two or such inaccuracies in the
representations and warranties of Parent, Merger Sub One or Merger Sub Two are curable by Parent,
Merger Sub One or Merger Sub Two through the exercise of commercially reasonable efforts, then the
Company shall not be permitted to terminate this Agreement pursuant to this Section 8.1(e)
until the earlier to occur of (A) the expiration of a thirty (30) calendar day period after
delivery of written notice from the Company to Parent of such breach or inaccuracy, as applicable,
or (B) Parent, Merger Sub One and/or Merger Sub Two (as applicable) ceasing to exercise
commercially reasonable efforts to cure such breach or inaccuracy, provided that Parent, Merger Sub
One and/or Merger Sub Two (as applicable) continues to exercise commercially reasonable efforts to
cure such breach or inaccuracy (it being understood that the Company may not terminate this
Agreement pursuant to this Section 8.1(e) if such breach or inaccuracy by Parent, Merger
Sub One or Merger Sub Two is cured within such thirty (30) calendar day period); or




          (f) by the Company, at any time prior to obtaining the Company Stockholder Approval, pursuant
to and in accordance with Section 6.7(b)(ii), provided that concurrently with such
termination (and as a condition to the effectiveness of such termination), (i) the Company shall
have entered into a definitive agreement for the Superior Proposal referenced in Section
6.7(b)(ii) and (ii) the Company shall have paid to Parent a fee equal to the Termination Fee
Amount pursuant to Section 8.3(b)(iii); or




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          (g) by Parent, at any time prior to the Effective Time (whether or not the Requisite Merger
Approval has been obtained), provided that Parent is not then in material breach of any covenant or
agreement of Parent set forth in this Agreement, in the event (i) of a breach of any covenant or
agreement on the part of the Company set forth in this Agreement or (ii) that any representation or
warranty of the Company set forth in this Agreement shall have been inaccurate when made or shall
have become inaccurate, in either case such that the conditions to the Merger set forth in
Section 7.2(a) or Section 7.2(b) would not be satisfied as of the time of such
breach or as of the time such representation and warranty became inaccurate; provided, however,
that notwithstanding the foregoing, in the event that such breach by the Company or such
inaccuracies in the representations and warranties of the Company are curable by the Company
through the exercise of commercially reasonable efforts, then Parent shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(g) until the earlier to occur of (A) the
expiration of a thirty (30) calendar day period after delivery of written notice from Parent to the
Company of such breach or inaccuracy, as applicable, or (B) the ceasing by the Company to exercise
commercially reasonable efforts to cure such breach or inaccuracy, provided that the Company
continues to exercise commercially reasonable efforts to cure such breach or inaccuracy (it being
understood that Parent may not terminate this Agreement pursuant to this Section 8.1(g) if
such breach or inaccuracy by the Company is cured within such thirty (30) calendar day period); or




          (h) by Parent, at any time prior to the Effective Time (whether or not the Requisite Merger
Approval has been obtained), in the event that:




               (i) either (A) any member of the Company Board or any executive officer of the Company shall
have breached or violated the terms of Section 6.1, Section 6.6 (with respect to
the Merger Proposal) or Section 6.7 in any material respect, or (B) any other employee,
controlled Affiliate, investment banker, attorney or other advisor or representative of the Company
acting at the express direction of (or with the express authorization of) any member of the Company
Board or any executive officer of the Company shall have breached or violated the terms of
Section 6.1, Section 6.6 (with respect to the Merger Proposal) or Section
6.7 in any material respect;



               (ii) the Company Board or any committee thereof shall have for any reason effected a Company
Board Recommendation Change (whether or not in compliance with the terms and conditions of this
Agreement);



               (iii) the Company shall have failed to include the Company Board Recommendation in the Proxy
Statement/Prospectus;



               (iv) a tender offer or exchange offer for Company Common Stock is commenced and (A) within the
ten (10) business-day period specified in Rule 14e-2 promulgated under the Exchange Act, the
Company shall have failed to issue a public statement (and filed a Schedule 14D-9 pursuant to Rule
14e-2 and Rule 14d-9 promulgated under the Exchange Act) reaffirming the Company Board
Recommendation and recommending that the Company stockholders reject such tender or exchange offer
and not tender any shares of Company Common Stock into such tender or exchange offer, or (B) at



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any
time after the foregoing 10 business-day period, the Company shall issue a press release or file a
Schedule 14D-9, in any such case relating to such tender or exchange offer that fails to reaffirm
the Company Board Recommendation and recommend that the Company stockholders reject such tender or
exchange offer and not tender any shares of Company Common Stock into such tender or exchange
offer; or



               (v) the Company Board shall fail to reaffirm (publicly, if requested by Parent) its
recommendation in favor of the adoption of this Agreement and the approval of the Merger (A) within
ten (10) Business Days following Parent’s request in writing that such recommendation be reaffirmed
after an Acquisition Proposal shall have been publicly announced or shall have become publicly
known, or (B) within ten (10) Business Days following Parent’s request in writing that such recommendation be reaffirmed if,
in Parent’s reasonable good faith judgment, there are circumstances that create uncertainty in the
public markets regarding the position of the Company Board regarding this Agreement and the Merger.



     8.2 Notice of Termination; Effect of Termination. Any proper termination of this
Agreement pursuant to Section 8.1 shall be effective immediately upon the delivery of
written notice of the terminating party to the other party or parties hereto, as applicable. In
the event of the termination of this Agreement pursuant to Section 8.1, this Agreement
shall be of no further force or effect without liability of any party or parties hereto, as
applicable (or any stockholder, director, officer, employee, agent, consultant or representative of
such party or parties) to the other party or parties hereto, as applicable, except (a) for the
terms of Section 6.9, this Section 8.2, Section 8.3 and Article IX,
each of which shall survive the termination of this Agreement, and (b) that nothing herein shall
relieve any party or parties hereto, as applicable, from liability for any willful breach of, or
fraud in connection with, this Agreement and the transactions contemplated hereby. In addition to
the foregoing, no termination of this Agreement shall affect the obligations of the parties hereto
set forth in the Confidentiality Agreement, all of which obligations shall survive termination of
this Agreement in accordance with their respective terms.



     8.3 Fees and Expenses.



          (a) General. All fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party or parties, as applicable, incurring
such expenses whether or not the Merger is consummated.




          (b) Company Payments.




               (i) The Company shall pay to Parent a fee equal to $20,000,000 (the “Termination Fee
Amount”), by wire transfer of immediately available funds to an account or accounts designated
in writing by Parent, in the event that (A) following the execution and delivery of this Agreement
and prior to the Company Stockholder Meeting, an Acquisition Proposal shall have been publicly
announced or shall have become publicly known, and (B) this Agreement is terminated pursuant to
Section 8.1(d) (or, after a vote on the Merger Proposal has been taken at the Company
Stockholder Meeting and the Requisite Merger Approval has not been obtained, the Company terminates
this



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Agreement for any other reason), and (C) within twelve (12) months following the termination
of this Agreement, either (1) any Acquisition Transaction is consummated or (2) the Company enters
into a letter of intent, memorandum of understanding or other Contract providing for any
Acquisition Transaction and such Acquisition Transaction or any other Acquisition Transaction is
subsequently consummated within twenty four (24) months after the date on which such letter of
intent, memorandum of understanding or other Contract is executed by the parties thereto. The fee
amount payable pursuant to this Section 8.3(b)(i) shall be paid on the date of, and as a
condition to, the consummation of the applicable Acquisition Transaction contemplated by the
foregoing clause (C).



               (ii) The Company shall pay to Parent a fee equal to the Termination Fee Amount by wire
transfer of immediately available funds to an account or accounts designated in writing by Parent,
in the event that (A) following the execution and delivery of this Agreement and prior to the
termination of this Agreement, an Acquisition Proposal shall have been publicly announced or shall
have become publicly known, or shall have been communicated or otherwise made known to the Company,
and (B) this Agreement is terminated pursuant to Section 8.1(b) or Section 8.1(g),
and (C) within twelve (12) months following the termination of this Agreement, either (1) any
Acquisition Transaction is consummated or (2) the Company enters into a letter of intent,
memorandum of understanding or other Contract providing for any Acquisition Transaction and such
Acquisition Transaction or any other Acquisition Transaction is subsequently consummated within
twenty four (24) months after the date on which such letter of intent, memorandum of understanding
or other Contract is executed by the parties thereto. The fee amount payable pursuant to this
Section 8.3(b)(ii) shall be paid on the date of, and as a condition to, the consummation of
the applicable Acquisition Transaction contemplated by the foregoing clause (C).



               (iii) The Company shall pay to Parent a fee equal to the Termination Fee Amount, by wire
transfer of immediately available funds to an account or accounts designated in writing by Parent,
in the event this Agreement is terminated pursuant to Section 8.1(f), concurrently with and
as a condition to the effectiveness of such termination.



               (iv) The Company shall pay to Parent a fee equal to the Termination Fee Amount, by wire
transfer of immediately available funds to an account or accounts designated in writing by Parent,
within one Business Day after demand by Parent, in the event that this Agreement is terminated
pursuant to Section 8.1(h).



          (c) Enforcement. Each of Parent and the Company acknowledges and hereby agrees that
the provisions of Section 8.3 are an integral part of the transactions contemplated by this
Agreement, and that, without such provisions, neither Parent nor the Company would have entered
into this Agreement. Accordingly, if the Company shall fail to pay in a timely manner any amounts
due and payable pursuant to Section 8.3, and, in order to obtain such payment, Parent shall
make a claim against the Company and such claim results in a judgment against the Company, the
Company shall pay to Parent an amount in cash equal to Parent’s costs and expenses (including its
attorneys’ fees and



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expenses) incurred in connection with such claim, together with interest at the
prime rate of Citibank N.A. in effect on the date such payment was required to be made. Payment of
the fees amounts contemplated by this Section 8.3 shall not be in lieu of, or replacement
or substitution for, any damages that may arise out of any breach of this Agreement, and are not
intended to (and shall not) be liquidated damages hereunder; provided, however, that any liability
of the Company hereunder shall be reduced by the amount of any Termination Fee Amount paid by the
Company except to the extent that the amount of the Termination Fee Amount shall have already been
explicitly taken into account by the court to reduce the amount otherwise payable as damages. The
parties acknowledge and agree that in no event shall the Company be obligated to pay the Termination Fee Amount on more than one occasion.




     8.4 Amendment. Subject to applicable Laws and subject to the other provisions of this
Agreement, this Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of Parent, Merger Sub One, Merger Sub Two and the
Company; provided, however, that in the event that this Agreement has been adopted by the Company
stockholders in accordance with Delaware Law, no amendment shall be made to this Agreement that
requires the approval of such Company stockholders without such approval.



     8.5 Extension; Waiver. At any time and from time to time prior to the Effective Time,
any party or parties hereto may, to the extent legally allowed and except as otherwise set forth
herein, (a) extend the time for the performance of any of the obligations or other acts of the
other party or parties hereto, as applicable, (b) waive any inaccuracies in the representations and
warranties made to such party or parties hereto contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or conditions for the benefit
of such party or parties hereto contained herein. Any agreement on the part of a party or parties
hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party or parties, as applicable. Any delay in exercising any right under
this Agreement shall not constitute a waiver of such right.



ARTICLE IX

GENERAL PROVISIONS




     9.1 Survival of Representations, Warranties and Covenants. The representations,
warranties and covenants of the Company, Parent and the Merger Subs set forth in this Agreement
shall terminate at the Effective Time, and only the covenants that by their terms survive the
Effective Time shall so survive the Effective Time in accordance with their respective terms.



     9.2 Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service, or sent via
telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at
such other address or telecopy numbers for a party as shall be specified by like notice):



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	 	(a)	 	if to Parent, Merger Sub One or Merger Sub Two, to:
	 
	 	 	 	TD AMERITRADE Holding Corporation

4211 South 102nd Street

Omaha, NE 68127

Attention: General Counsel

Telecopy No.: (443) 539-2009
	 
	 	 	 	with copies (which shall not constitute notice) to:
	 
	 	 	 	Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304-1050

Attention: Larry W. Sonsini, Martin W. Korman and Michael S. Ringler

Telecopy No.: (650) 493-6811
	 
	 	(b)	 	if to the Company (prior to the Effective Time), to:
	 
	 	 	 	thinkorswim, Inc.

600 W. Chicago Ave., Suite 100

Chicago, IL 60654-2597

Attention: Pete Santori

Telecopy No.: (773) 435-3232
	 
	 	 	 	and
	 
	 	 	 	thinkorswim Group Inc.

13947 S. Minuteman Dr.

Draper, UT 84020

Attention: Ida Kane

Telecopy No.: (801) 816-6010
	 
	 	 	 	with copies (which shall not constitute notice) to:
	 
	 	 	 	Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Ethan A. Klingsberg and Benet J. O’Reilly

Telecopy No.: (212) 225-3999





     9.3 Assignment. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the other parties.
Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted assigns.



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     9.4 Entire Agreement. This Agreement and the agreements, documents, instruments and
certificates among the parties hereto as contemplated by or referred to herein, including the
Company Disclosure Schedule, the Parent Disclosure Schedule and the Exhibits and Schedules hereto,
constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; provided, however, the Confidentiality Agreement shall not be
superseded, shall survive any termination of this Agreement and shall continue in full force and effect. No representation,
warranty, inducement, promise, understanding or condition not set forth in this Agreement, the
Confidentiality Agreement or the agreements, documents, instruments or certificates referred to in
the immediately preceding sentence has been made or relied upon by any of the parties to this
Agreement.



     9.5 Third Party Beneficiaries. Except as set forth in or contemplated by the
provisions of Section 6.12, this Agreement is not intended to, and shall not, confer upon
any other Person any rights or remedies hereunder, provided that from and after the Effective Time
the holders of Company Common Stock shall be beneficiaries of Section 2.7 and Section
2.9 and the holders of Company Restricted Stock, Company Options and Company Restricted Stock
Units shall be beneficiaries of Section 2.8.



     9.6 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction to be illegal,
void or unenforceable, the remainder of this Agreement will continue in full force and effect and
the application of such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of such void or
unenforceable provision.



     9.7 Other Remedies. Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not exclusive of any other
remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.



     9.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.



     9.9 Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that, in addition to
any other remedy to which they are entitled at law or in equity, the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States or any state having
jurisdiction.



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     9.10 Consent to Jurisdiction. Each of the parties hereto irrevocably consents to the
exclusive jurisdiction and venue in the Court of Chancery of the State of Delaware or, if under
applicable Law exclusive jurisdiction over such matter is vested in the federal courts, any court
of the United States located in the State of Delaware in connection with any matter based upon or
arising out of this Agreement or the transactions contemplated hereby, agrees that process may be
served upon them in any manner authorized by the laws of the State of Delaware for such persons and
waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and process. Each
party hereto hereby agrees not to commence any legal proceedings relating to or arising out of this
Agreement or the transactions contemplated hereby in any jurisdiction or courts other than as
provided herein.



     9.11 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY, MERGER SUB ONE AND MERGER SUB TWO
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF PARENT, COMPANY, MERGER SUB ONE OR MERGER SUB TWO IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.



     9.12 Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.



[Remainder of Page Intentionally Left Blank]





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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their
respective duly authorized officers to be effective as of the date first above written.



	 	 	 	 	 	 	 
	 	 	TD AMERITRADE HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Fredric J. Tomczyk	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Fredric J. Tomczyk	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	TANGO ACQUISITION CORPORATION ONE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William J. Gerber	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	William J. Gerber	 	 
	 

	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	TANGO ACQUISITION CORPORATION TWO	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William J. Gerber	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	William J. Gerber	 	 
	 

	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	THINKORSWIM GROUP INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lee K. Barba	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Lee K. Barba	 	 
	 

	 	Title:
	 	Chairman & CEO	 	 






AGREEMENT AND PLAN OF MERGER