10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2009

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 001-33220

BROADRIDGE FINANCIAL SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	33-1151291
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1981 Marcus Avenue Lake Success, NY	11042
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (516) 472-5400

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of January 29, 2010 was 134,772,327.

TABLE OF CONTENTS

ITEM		PAGE
PART I.	FINANCIAL INFORMATION	3
Item 1.	FINANCIAL STATEMENTS	3
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
Item 4.	CONTROLS AND PROCEDURES	25
PART II.	OTHER INFORMATION	26
Item 1.	LEGAL PROCEEDINGS	26
Item 1A.	RISK FACTORS	26
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
Item 3.	DEFAULTS UPON SENIOR SECURITIES	27
Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	27
Item 5.	OTHER INFORMATION	28
Item 6.	EXHIBITS	29

2

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Earnings

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Revenues	$	529.7		$	437.5		$	967.9		$	893.0
Cost of revenues		399.7			328.2			738.2			676.4
Selling, general and administrative expenses		58.4			62.0			111.8			115.7
Other (income) expenses, net		3.1			(1.4	)		6.9			(6.9	)
Total expenses		461.2			388.8			856.9			785.2
Earnings from continuing operations before income taxes		68.5			48.7			111.0			107.8
Provision for income taxes		17.0			18.7			32.9			41.7
Net earnings from continuing operations		51.5			30.0			78.1			66.1
Loss from discontinued operations, net of tax benefit		(17.9	)		(0.1	)		(18.1	)		(0.6	)
Net earnings	$	33.6		$	29.9		$	60.0		$	65.5
Earnings per share:
Basic earnings per share from continuing operations	$	0.38		$	0.21		$	0.57		$	0.47
Basic loss per share from discontinued operations		(0.13	)		—			(0.13	)		—
Basic earnings per share	$	0.25		$	0.21		$	0.44		$	0.47
Diluted earnings per share from continuing operations	$	0.37		$	0.21		$	0.56		$	0.47
Diluted loss per share from discontinued operations		(0.13	)		—			(0.13	)		(0.01	)
Diluted earnings per share	$	0.24		$	0.21		$	0.43		$	0.46
Weighted-average shares outstanding:
Basic		135.7			140.2			136.9			140.3
Diluted		139.5			141.3			140.0			141.7
Dividends declared per common share	$	0.14		$	0.07		$	0.28		$	0.14

See Notes to Condensed Consolidated Financial Statements.

3

Broadridge Financial Solutions, Inc.

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

	December 31, 2009			June 30, 2009
Assets
Current assets:
Cash and cash equivalents	$	147.1		$	173.4
Accounts receivable, net of allowance for doubtful accounts of $1.3 and $2.3, respectively		314.6			381.0
Other current assets		87.8			83.2
Assets of discontinued operations		1,430.5			1,414.2
Total current assets		1,980.0			2,051.8
Property, plant and equipment, net		75.6			75.4
Other non-current assets		126.0			136.3
Goodwill		486.4			481.8
Intangible assets, net		27.7			29.4
Total assets	$	2,695.7		$	2,774.7
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	70.2		$	72.0
Accrued expenses and other current liabilities		181.8			216.7
Deferred revenues		24.0			34.6
Liabilities of discontinued operations		1,144.4			1,106.6
Total current liabilities		1,420.4			1,429.9
Long-term debt		324.1			324.1
Other non-current liabilities		54.0			60.8
Deferred revenues		50.5			50.9
Total liabilities		1,849.0			1,865.7
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock: Authorized, 25.0 shares; issued and outstanding, none		—			—
Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 143.2 shares and 141.8 shares, respectively; outstanding, 134.6 shares and 139.3 shares, respectively		1.4			1.4
Additional paid-in capital		546.6			505.9
Retained earnings		454.4			432.3
Treasury stock—at cost, 8.6 shares and 2.5 shares, respectively		(169.4	)		(37.5	)
Accumulated other comprehensive income		13.7			6.9
Total stockholders’ equity		846.7			909.0
Total liabilities and stockholders’ equity	$	2,695.7		$	2,774.7

See Notes to Condensed Consolidated Financial Statements.

4

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Six Months Ended December 31,
	2009			2008
Cash Flows From Operating Activities
Net earnings	$	60.0		$	65.5
Adjustments to reconcile Net earnings to net cash flows provided by (used in) operating activities:
Loss from discontinued operations		18.1			0.6
Depreciation and amortization		20.0			19.6
Amortization of other assets		8.2			7.3
Deferred income taxes		(20.8	)		(3.8	)
Stock-based compensation expense		13.3			15.3
Excess tax benefits from the issuance of stock-based compensation awards		(0.7	)		(0.1	)
Gain on purchase of senior notes		—			(8.4	)
Other		2.8			(4.7	)
Changes in operating assets and liabilities:
Current assets and liabilities:
Decrease in Accounts receivable		65.9			129.1
Decrease (Increase) in Other current assets		9.6			(22.2	)
Decrease in Accounts payable		(5.7	)		(7.6	)
Decrease in Accrued expenses and other current liabilities		(46.3	)		(84.5	)
Decrease in Deferred revenues		(10.7	)		(9.4	)
Non-current assets and liabilities:
Increase in Other non-current assets		(2.1	)		(5.1	)
Increase in Other non-current liabilities		7.2			1.1
Net cash flows provided by operating activities of continuing operations		118.8			92.7
Cash Flows From Investing Activities
Capital expenditures		(13.0	)		(7.2	)
Purchases of intangibles		(1.2	)		(0.7	)
Acquisitions		(5.8	)		(14.7	)
Net cash flows used in investing activities of continuing operations		(20.0	)		(22.6	)
Cash Flows From Financing Activities
Net proceeds from Short-term borrowings		0.6			—
Payments on Long-term debt		—			(114.4	)
Dividends paid		(28.8	)		(18.3	)
Proceeds from exercise of stock options		27.9			2.3
Purchases of Treasury stock		(131.9	)		(11.7	)
Excess tax benefits from the issuance of stock-based compensation awards		0.7			0.1
Net cash flows used in financing activities of continuing operations		(131.5	)		(142.0	)
Cash flows from discontinued operations:
Cash flows provided by operating activities		272.3			184.2
Cash flows used in financing activities		(0.9	)		(8.7	)
Net cash provided by discontinued operations		271.4			175.5
Effect of exchange rate changes on Cash and cash equivalents		3.0			(2.8	)
Net change in Cash and cash equivalents		241.7			100.8
Cash and cash equivalents, beginning of period		173.4			54.7
Cash and cash equivalents of discontinued operations, beginning of period		107.5			143.6
Cash and cash equivalents, end of period		522.6			299.1
Less Cash and cash equivalents from discontinued operations, end of period		375.5			239.1
Cash and cash equivalents of continuing operations, end of period	$	147.1		$	60.0
Supplemental disclosure of cash flow information:
Cash payments made for interest	$	4.9		$	8.8
Cash payments made for income taxes	$	71.6		$	95.3

See Notes to Condensed Consolidated Financial Statements.

5

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements

(Tabular dollars in millions, except per share amounts)

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

A. Description of Business. Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) is a leading global provider of investor communication solutions, and securities processing and outsourcing solutions to the financial services industry. The Company previously classified its operations into three reportable segments, Investor Communications Solutions, Securities Processing Solutions and Clearing and Outsourcing Solutions. On November 2, 2009, Broadridge announced that it had entered into a definitive agreement to sell substantially all contracts of the securities clearing clients of the Clearing and Outsourcing Solutions business. Securities clearing services refers to the process of matching, recording and processing securities transaction instructions and exchanging payments between counterparties and providing financing for client inventory through margin lending. Operations outsourcing services allow broker-dealers to outsource certain administrative functions relating to the securities clearing and settlement process to Broadridge. Beginning in the second quarter of fiscal year 2010, the securities clearing activities are presented as a discontinued operation and the operations outsourcing solutions business retained by Broadridge is included within the Securities Processing Solutions business segment. Broadridge only delivers operations outsourcing solutions on our Securities Processing Solutions technology platforms. See Note 7, “Discontinued Operations” for detailed information on discontinued operations and Note 13, “Interim Financial Data by Segment” for restated segment information. The Company now classifies its operations into the following two reportable segments:

• Investor Communication Solutions—provides solutions for the processing and distribution of proxy materials to investors, including vote processing, and for the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions. Investor Communication Solutions also provides financial information distribution and transaction reporting services to both financial institutions and securities issuers. These services include the processing and distribution of account statements and trade confirmations, traditional and personalized document fulfillment and content management services, and imaging, archival and workflow solutions.

• Securities Processing Solutions—provides advanced, computerized real-time transaction processing services that automate the securities transaction lifecycle. Securities Processing Solutions’ products and services include desktop productivity tools and portfolio management, order capture and execution, trade confirmation, settlement and accounting services. Additionally, the Company’s operations outsourcing solutions allow broker-dealers to outsource certain administrative functions relating to securities clearing and settlement, from order entry to trade matching and settlement, while maintaining their ability to finance and capitalize their own business.

B. Basis of Presentation. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”). These financial statements present the consolidated position of the Company. These financial statements include the entities in which the Company directly or indirectly has a controlling financial interest and various entities in which the Company has investments recorded under both the cost and equity methods of accounting. Intercompany balances and transactions have been eliminated. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009 (the “2009 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”). These Condensed Consolidated Financial Statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position at December 31, 2009 and June 30, 2009, the results of its operations for the three and six months ended December 31, 2009 and 2008 and its cash flows for the six months ended December 31, 2009 and 2008.

C. Financial Instruments. Substantially all of the financial instruments of the Company other than Long-term debt are carried at fair values, or at carrying amounts that approximate fair values because of the short maturity of the instruments. The carrying value of the Company’s long-term variable-rate term loan facility approximates fair value because these instruments reflect market changes to interest rates. The carrying value of the Company’s long-term fixed-rate senior notes represents the face value of the long-term fixed-rate senior notes net of the unamortized discount. The fair value of the Company’s long-term fixed-rate senior notes is based on quoted market prices.

D. Subsequent Events. In preparing the accompanying Condensed Consolidated Financial Statements, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 855, “Subsequent Events,” the Company has reviewed events that have occurred after December 31, 2009, through the date of issuance of the financial statements on February 4, 2010. During this period, the Company did not have any material subsequent events.

6

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

On July 1, 2008, the Company adopted new accounting guidance on fair value measurements. This new guidance defines fair value, establishes a framework for measuring fair value based on generally accepted accounting principles and expands disclosures about fair value measurements. The new guidance was effective for the Company beginning July 1, 2008, for certain financial assets and liabilities. Refer to Note 5 for additional information regarding our fair value measurements for financial assets and liabilities. The new guidance became effective for non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis beginning July 1, 2009, and the application of this guidance did not have a material impact on the Company’s results of operations, cash flows or financial position.

In December 2007, the FASB issued new accounting guidance on business combinations and non-controlling interests in consolidated financial statements. The new guidance revises the method of accounting for a number of aspects of business combinations and non-controlling interests, including acquisition costs, contingencies (including contingent assets, contingent liabilities and contingent purchase price), the impacts of partial and step-acquisitions (including the valuation of net assets attributable to non-acquired minority interests), and post acquisition exit activities of acquired businesses. The new guidance became effective for the Company beginning July 1, 2009, and the application of this guidance did not have a material impact on the Company’s results of operations, cash flows or financial position.

No other new accounting pronouncement issued or effective during the six months ended December 31, 2009 has had or is expected to have a material impact on the Condensed Consolidated Financial Statements.

NOTE 3. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is calculated by dividing the Company’s Net earnings by the basic Weighted-average shares outstanding for the periods presented.

The computation of diluted EPS did not include 2.0 million and 17.5 million options to purchase Broadridge common stock for the three months ended December 31, 2009 and 2008, respectively, and 5.1 million and 16.5 million options to purchase Broadridge common stock for the six months ended December 31, 2009 and 2008, respectively, as the effect of their inclusion would have been anti-dilutive.

The following table sets forth the denominators of the basic and diluted EPS computations:

	Three Months Ended December 31,		Six Months Ended December 31,
	2009	2008	2009	2008
Weighted-average shares outstanding:
Basic	135.7	140.2	136.9	140.3
Common stock equivalents	3.8	1.1	3.1	1.4
Diluted	139.5	141.3	140.0	141.7

7

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

NOTE 4. OTHER (INCOME) EXPENSES, NET

Other (income) expenses, net consisted of the following:

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Interest expense on borrowings	$	2.4		$	3.2		$	5.0		$	8.6
Interest income		(0.1	)		—			(0.1	)		(0.5	)
Foreign currency exchange (gain) loss		0.5			(4.7	)		1.5			(6.7	)
Gain from purchase of senior notes		—			—			—			(8.4	)
Other, net		0.3			0.1			0.5			0.1
Other (income) expenses, net	$	3.1		$	(1.4	)	$	6.9		$	(6.9	)

NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1	Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2	Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly;
Level 3	Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of our Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and our counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

The following table sets forth the Company’s financial assets and liabilities as of December 31, 2009 that are measured at fair value on a recurring basis during the period, segregated by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
Assets of continuing operations:
Cash and cash equivalents:
Money market funds	$	96.6	$	—	$	—	$	96.6
Assets of discontinued operations:
Cash and securities segregated for regulatory purposes and securities deposited with clearing organizations:
U.S. government obligations		2.3		—		—		2.3
Total	$	98.9	$	—	$	—	$	98.9

The Company did not have any financial assets that met the classification of Level 3 assets during the quarter ended December 31, 2009.

See Note 7, “Discontinued Operations,” for the fair value of non-financial assets related to the impairment of assets of discontinued operations.

8

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

NOTE 6. ACQUISITIONS

Assets acquired and liabilities assumed in business combinations were recorded on the Company’s Condensed Consolidated Balance Sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company were included in the Company’s Condensed Consolidated Statements of Earnings since their respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed was allocated to Goodwill.

In November 2009, the Company acquired certain assets in the Investor Communication Solutions segment for $9.4 million. This acquisition of assets resulted in approximately $1.5 million of goodwill. Intangible assets acquired, which totaled approximately $5.0 million, consist of prepaid assets and customer relationships that are being amortized over a two-year and a seven-year life, respectively. Fixed assets acquired, which primarily included machinery and equipment, totaled approximately $2.9 million. In connection with this asset acquisition, the Company entered into an agreement with Morgan Stanley Smith Barney LLC to provide customer communications services, which includes the production and distribution of account statements, performance reports, tax reporting documents, and certain trade confirms, as well as the provision of prospectus fulfillment services. The length of the agreement is seven years.

NOTE 7. DISCONTINUED OPERATIONS

In November 2009, the Company and Ridge Clearing and Outsourcing Solutions, Inc. (“Ridge Clearing”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Penson Worldwide, Inc. (“PWI”) and Penson Financial Services, Inc., a wholly owned subsidiary of PWI (“PFSI”), to sell substantially all contracts of the securities clearing clients of Ridge Clearing to PFSI.

Under the terms of the Asset Purchase Agreement, Broadridge will receive between $60 million and $70 million in total consideration from PWI consisting of a five-year subordinated note from PWI and shares of PWI’s common stock in an amount calculated as the lesser of one-third of the total consideration and an amount not exceeding 9.9% of PWI’s outstanding common stock. The specific amount of such consideration will be determined immediately prior to closing pursuant to an agreed upon formula based on the revenues attributable to the contracts being purchased by PFSI. The purchase price will be subject to certain post-closing adjustments upon the occurrence of certain agreed upon events. It is anticipated that the transaction will close in the second half of fiscal year 2010, subject to the satisfaction of customary closing conditions, including regulatory approvals. As part of this transaction, the Company will discontinue its securities clearing services business but will continue to provide operations outsourcing solutions.

The results of the securities clearing business, which previously were included in the Clearing and Outsourcing Solutions segment, are included in Loss from discontinued operations, net of tax benefit, for all periods presented. The net assets associated with the securities clearing business, totaling approximately $286.1 million and $307.6 million, have been reclassified to Assets of discontinued operations as of December 31, 2009 and June 30, 2009, respectively.

For a period of time, the Company will continue to generate cash flows and to report income statement activity in loss from discontinued operations, net of tax benefit, associated with the securities clearing business. The activities that give rise to these cash flows and income statement activities are transitional in nature.

The following summarized financial information related to the securities clearing business has been segregated from continuing operations and reported as discontinued operations:

	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Revenues	$	19.3		$	21.7		$	39.0		$	38.6
Loss from discontinued operations, before tax benefit	$	—		$	(0.2	)	$	(0.2	)	$	(1.0	)
Income tax benefit		—			0.1			—			0.4
Net loss from discontinued operations, before impairment of assets		—			(0.1	)		(0.2	)		(0.6	)
Net loss on impairment of assets of discontinued operations, net of tax benefit of $11.2		(17.9	)		—			(17.9	)		—
Loss from discontinued operations, net of tax benefit	$	(17.9	)	$	(0.1	)	$	(18.1	)	$	(0.6	)

The net loss on impairment of assets represents the write-down of the value of the Assets of discontinued operations to the net realizable value of the assets that the Company believes is appropriate using valuations that require inputs that are both significant to the fair value measurement and unobservable as detailed under Level 3 fair value measurement guidelines for disclosure.

9

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

The following assets and liabilities have been segregated and classified as Assets of discontinued operations and Liabilities of discontinued operations, as appropriate, in the consolidated balance sheet as of December 31, 2009. These assets and liabilities relate to the securities clearing business described above, totaling $286.1 million. The amounts presented below were adjusted to exclude intercompany receivables and payables between the business held for sale and the Company, which are to be excluded from the divestiture.

	December 31, 2009		June 30, 2009
Assets
Cash and cash equivalents	$	375.5	$	107.5
Cash and securities segregated for regulatory purposes and securities deposited with clearing organizations		77.5		246.5
Securities clearing receivables, net of allowance for doubtful accounts of $2.0 and $2.0, respectively		956.0		1,011.3
Other assets		21.5		48.9
Total assets of discontinued operations		1,430.5		1,414.2
Liabilities
Accrued expenses and other current liabilities		8.3		18.5
Securities clearing payables		1,136.1		1,088.1
Total liabilities of discontinued operations		1,144.4		1,106.6
Net assets of discontinued operations	$	286.1	$	307.6

Securities clearing receivables/payables and segregated cash will be converted to cash shortly after the close of the transaction, with any excess cash remaining with the Company.

In addition, the Asset Purchase Agreement requires PWI to provide $50.0 million as additional regulatory capital with respect to its operations pertaining to the correspondent clearing contracts to be acquired. In the event PWI does not have other resources available to provide these funds, Broadridge has agreed to lend this amount to PWI pursuant to an eighteen-month subordinated note (the “Backstop Note”) payable by PWI and bearing interest at an annual rate equal to 90-day LIBOR plus 14%.

As a registered broker-dealer and member of the New York Stock Exchange (“NYSE”) and the Financial Industry Regulatory Authority (“FINRA”), Ridge Clearing is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (“Rule 15c3-1”). Ridge Clearing computes its net capital under the alternative method permitted by Rule 15c3-1, which requires Ridge Clearing to maintain minimum net capital equal to the greater of $1.5 million or 2% of aggregate debit items arising from customer transactions. The NYSE and FINRA may require a member firm to reduce its business if its net capital is less than 4% of aggregate debit items, or may prohibit a member firm from expanding its business or paying cash dividends if resulting net capital would be less than 5% of aggregate debit items. At December 31, 2009, Ridge Clearing had net capital of $206.1 million, which was approximately 27.9% of aggregate debit items and exceeded the minimum requirements by $191.3 million.

NOTE 8. BORROWINGS

The Company’s outstanding borrowings consisted of the following:

	Expiration Date	December 31, 2009		June 30, 2009
Long-term
Term loan facility	March 2012		200.0		200.0
Senior notes	June 2017		124.1		124.1
		$	324.1	$	324.1

In addition, the Company has a five-year revolving credit facility that expires in March 2012 that has an available capacity of $500.0 million, and a revolving credit facility under which Ridge Clearing is the borrower and the Company is the guarantor that expires in August 2010 (which may be extended to August 2011 subject to certain conditions) that has an available capacity of $75.0 million. No amounts were outstanding under these credit facilities at December 31, 2009.

10

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

At December 31, 2009 and June 30, 2009, the Company was not aware of any instances of non-compliance with the financial covenants of its borrowings’ obligations.

The fair value of the fixed-rate senior notes at December 31, 2009 was $128.0 million based on quoted market prices. The carrying value of the variable-rate term loan facility approximates fair value. Amounts are due on the expiration dates listed above.

NOTE 9. STOCK-BASED COMPENSATION

The activity related to the Company’s incentive equity awards for the three months ended December 31, 2009 consisted of the following:

	Stock Options				Time-based Restricted Stock				Performance-based Restricted Stock
	Number of Options (c)		Weighted- Average Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Grant Date Fair Value
Balances at September 30, 2009	17,893,135		$	18.91	1,921,656		$	16.37	589,522	$	15.80
Granted	—			—	962,779			18.59	339,971		18.89
Exercised (a)	(705,911	)		18.30	—			—	—		—
Vesting of restricted shares	—			—	—			—	—		—
Expired/forfeited	(30,955	)		18.96	(23,757	)		19.33	—		—
Balances at December 31, 2009 (b)	17,156,269		$	18.94	2,860,678		$	17.03	929,493	$	16.93

(a) Stock options exercised during the period of October 1, 2009 through December 31, 2009 had an intrinsic value of $2.5 million.

(b) As of December 31, 2009, the Company’s outstanding “in the money” stock options using the December 31, 2009 closing share price of $22.56 (approximately 15.2 million shares) had an aggregate intrinsic value of $64.7 million.

(c) Options outstanding as of December 31, 2009 have a weighted-average remaining contractual life of 4.8 years and 13.4 million options are exercisable.

The activity related to the Company’s incentive equity awards for the six months ended December 31, 2009 consisted of the following:

	Stock Options				Time-based Restricted Stock				Performance-based Restricted Stock
	Number of Options (d)		Weighted- Average Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value
Balances at June 30, 2009	18,659,152		$	18.86	1,958,112		$	16.35	533,400		$	15.72
Granted	—			—	971,867			18.38	396,093	(a)		18.56
Exercised (b)	(1,461,451	)		17.91	—			—	—			—
Vesting of restricted shares	—			—	(36,196	)		15.09	—			—
Expired/forfeited	(41,432	)		19.24	(33,105	)		18.61	—			—
Balances at December 31, 2009	17,156,269		$	18.94	2,860,678		$	17.03	929,493		$	16.93

(a) Includes 56,122 performance-based restricted stock units granted upon the approval of the achievement of pre-set financial performance goals as of June 30, 2009. The achievement of the pre-set performance goals allowed associates to earn from 0% to 150% of their stated restricted stock grant. These restricted stock units will vest on April 1, 2010.

(b) Stock options exercised during the period of July 1, 2009 through December 31, 2009 had an intrinsic value of $4.8 million.

11

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

The Company has stock-based compensation plans under which we annually grant stock option and restricted stock awards. Exercise prices on options granted have been and continue to be set equal to the market price of the underlying shares on the date of the grant (except special stock option grants which have a premium strike price), with the measurement of stock-based compensation expense recognized in net earnings based on the fair value of the award on the date of grant. Stock-based compensation expense of $7.4 million and $9.8 million, respectively, as well as related tax benefits of $2.7 million and $3.7 million, respectively, were recognized in earnings from continuing operations for the three months ended December 31, 2009 and 2008. Stock-based compensation expense of $13.3 million and $15.3 million, respectively, as well as related tax benefits of $4.9 million and $5.7 million, respectively, were recognized in earnings from continuing operations for the six months ended December 31, 2009 and 2008.

Stock-based compensation expense of $0.4 million and $0.3 million, respectively, as well as related tax benefits of $0.2 million and $0.1 million, respectively, were recognized in earnings from discontinued operations for the three months ended December 31, 2009 and 2008. Stock-based compensation expense of $0.5 million and $0.5 million, respectively, as well as related tax benefits of $0.2 million and $0.2 million, respectively, were recognized in earnings from discontinued operations for the six months ended December 31, 2009 and 2008.

As of December 31, 2009, the total remaining unrecognized compensation cost related to non-vested stock options and restricted stock awards amounted to $5.6 million and $32.6 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.4 years and 1.8 years, respectively.

For stock options issued, the fair value of each stock option was estimated on the date of grant using a binomial option pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical volatility of the Company’s stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

NOTE 10. INCOME TAXES

The Company’s effective tax rate from continuing operations for the three and six months ended December 31, 2009 and 2008 was 24.8% and 38.4%, and 29.6% and 38.7%, respectively. The decrease in the effective tax rates is primarily attributable to the release of a valuation allowance on a deferred tax asset relating to tax loss carryforwards, approved certification for a state tax credit program, and lower enacted tax rates in certain non-U.S. tax jurisdictions for the six months ended December 31, 2009.

NOTE 11. CONTRACTUAL COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

In the normal course of business, the Company is subject to various claims and litigation. While the outcome of any claim or litigation is inherently unpredictable, the Company believes that the ultimate resolution of these matters will not, individually or in the aggregate, result in a material adverse impact on its financial condition, results of operations or cash flows.

It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations, and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company uses derivative financial instruments as risk management tools and not for trading purposes. The Company was not a party to any derivative financial instruments at December 31, 2009 or at June 30, 2009. In the normal course of business, the Company also enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. The Company does not expect any material losses related to such representations and warranties, or collateral arrangements.

In the normal course of business, the securities activities of the Company’s securities clearing business primarily involve executions, settlement, and financing of various securities transactions for a nationwide retail and institutional, customer and non-customer client base, introduced by its correspondent broker-dealers. These activities may expose the Company to risk in the event customers, other broker-dealers, banks, clearing organizations, or depositories are unable to fulfill contractual obligations.

12

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

For transactions in which the Company’s securities clearing business extends credit to customers and non-customers, the Company seeks to control the risk associated with these activities by requiring customers and non-customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requests the deposit of additional collateral or reduces securities positions, when necessary. In addition, the Company’s correspondent broker-dealers may be required to maintain deposits relating to its securities clearance activities.

The Company may be exposed to a risk of loss not reflected in the Condensed Consolidated Balance Sheets for securities sold, not yet purchased, should the value of such securities rise. In addition, the securities lending activities of the Company’s securities clearing business requires the Company to pledge securities as collateral. In the event the counterparty is unable to meet its contractual obligation, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices. The Company monitors the credit standing of counterparties with whom it conducts business. Risk is further controlled by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral level in the event of excess market exposure or instituting securities buy-in procedures when required.

The Company also provides guarantees to securities clearinghouses and exchanges. Under the standard membership agreement, members are required to guarantee the performance of the other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearinghouse, the other members would be required to meet any shortfalls. The Company’s liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted as collateral. However, the potential for the Company to be required to make payments under these arrangements is remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for these transactions.

NOTE 12. COMPREHENSIVE INCOME

Comprehensive income consisted of the following:

	Three Months Ended December 31,					Six Months Ended December 31,
	2009		2008			2009		2008
Net earnings	$	33.6	$	29.9		$	60.0	$	65.5
Foreign currency translation adjustments		2.9		(23.8	)		6.8		(33.8	)
Comprehensive income	$	36.5	$	6.1		$	66.8	$	31.7

NOTE 13. INTERIM FINANCIAL DATA BY SEGMENT

As a result of Broadridge entering into the Asset Purchase Agreement to sell the securities clearing contracts of Ridge Clearing, Broadridge now has two reportable operating business segments: Investor Communication Solutions and Securities Processing Solutions. The securities clearing business is reflected in discontinued operations (see Note 1, “Basis of Presentation” and Note 7, “Discontinued Operations” for detailed information on discontinued operations), and the operations outsourcing solutions business retained by Broadridge is now reported as part of the Securities Processing Solutions business segment. This change is reflected in all prior periods presented in this report on Form 10-Q.

The primary components of “Other” are the elimination of intersegment revenues and profits as well as certain unallocated expenses. Foreign exchange is a reconciling item between the actual foreign exchange rates and fiscal year 2010 budgeted foreign exchange rates.

Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts. Because the Company compensates the management of its various businesses on, among other factors, segment earnings, the Company may elect to record certain segment-related expense items of an unusual or non-recurring nature in Other rather than reflect such items in segment profit.

13

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Tabular dollars in millions, except per share amounts)

(Unaudited)

Segment results:

	Revenues
	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Investor Communication Solutions	$	393.3		$	295.5		$	703.2		$	609.3
Securities Processing Solutions		133.8			146.5			263.9			285.9
Other		2.2			0.1			2.2			0.4
Foreign currency exchange		0.4			(4.6	)		(1.4	)		(2.6	)
Total	$	529.7		$	437.5		$	967.9		$	893.0
	Earnings from Continuing Operations before Income Taxes
	Three Months Ended December 31,						Six Months Ended December 31,
	2009			2008			2009			2008
Investor Communication Solutions	$	50.9		$	19.8		$	74.3		$	43.1
Securities Processing Solutions		23.4			38.1			49.0			73.4
Other		(6.8	)		(8.1	)		(13.4	)		(8.9	)
Foreign currency exchange		1.0			(1.1	)		1.1			0.2
Total	$	68.5		$	48.7		$	111.0		$	107.8

* * * * * * *

14

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements (the “Financial Statements”) and accompanying Notes thereto included elsewhere herein.

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. These risks and uncertainties include those risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2009 (the “2009 Annual Report”). Any forward-looking statements are qualified in their entirety by reference to the factors discussed in this Quarterly Report on Form 10-Q and our 2009 Annual Report. These risks include:

• the success of Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) in retaining and selling additional services to its existing clients and in obtaining new clients;

• the pricing of Broadridge’s products and services;

• changes in laws affecting the investor communication services provided by Broadridge;

• changes in laws regulating registered securities clearing firms and broker-dealers;

• declines in trading volume, market prices, or the liquidity of the securities markets;

• any material breach of Broadridge security affecting its clients’ customer information;

• Broadridge’s ability to continue to obtain data center services from its former parent company, Automatic Data Processing, Inc. (“ADP”);

• any significant slowdown or failure of Broadridge’s systems;

• Broadridge’s failure to keep pace with changes in technology and demands of its clients;

• availability of skilled technical employees;

• the impact of new acquisitions and divestitures;

• competitive conditions; and

• overall market and economic conditions

Broadridge disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

15

Overview

We are a leading global provider of technology-based solutions to the financial services industry. Our systems and services include investor communication solutions, and securities processing and operations outsourcing solutions.

In short, we provide the infrastructure that helps make the financial services industry work. With more than 40 years of experience, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated systems. Our systems help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities.

We serve a large and diverse client base in the financial services industry, including retail and institutional brokerage firms, global banks, mutual funds, annuity companies, institutional investors, specialty trading firms, and clearing firms. We also provide services to corporate issuers.

We deliver a broad range of solutions that help our clients better serve their retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing. Our securities processing systems enable our clients to process securities transactions in more than 50 countries. In fiscal year 2009, we: (i) distributed over one billion investor communications, including proxy materials, investor account statements, trade confirmations, tax statements and prospectuses; (ii) processed on average over 1.6 million equity trades and over $3 trillion in trades of United States (U.S.) fixed income securities per day; and (iii) served over 100 correspondents through our securities clearing services.

In November 2009, the Company and Ridge Clearing & Outsourcing Solutions, Inc. (“Ridge Clearing”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Penson Worldwide, Inc. (“PWI”) and Penson Financial Services, Inc., a wholly owned subsidiary of PWI (“PFSI”), to sell substantially all of the client contracts of the securities clearing business of Ridge Clearing to PFSI. As a result of Broadridge entering into the Asset Purchase Agreement, Broadridge now has two reportable operating business segments: Investor Communication Solutions and Securities Processing Solutions. The securities clearing business is reflected in discontinued operations and the operations outsourcing solutions business retained by Broadridge is now reported as part of the Securities Processing Solutions business segment. This change is reflected in all prior periods presented in this report on Form 10-Q.

Investor Communication Solutions

A large portion of our Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge ^®, our innovative electronic proxy delivery and voting solution for institutional investors, helps ensure the participation of the largest stockholders of many companies. We also provide the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help our clients meet their regulatory compliance needs. In addition, we provide financial information distribution and transaction reporting services to both financial institutions and securities issuers. These services include the processing and distribution of account statements and trade confirmations, traditional and personalized document fulfillment and content management services, marketing communications, and imaging, archival and workflow solutions that enable and enhance our clients’ communications with investors. All of these communications are delivered in paper or electronic form.

Broadridge introduced several investor communication solutions in fiscal year 2009. They are The Investor Network, our Shareholder Forum and Virtual Shareholder Meeting solutions, and our new data aggregation and data management solutions. These new offerings are described in Part 1, Item 1. “The Broadridge Business” in our 2009 Annual Report.

Securities Processing Solutions

We offer a suite of advanced computerized real-time transaction processing services that automate the securities transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, settlement, and accounting. In addition, our operations outsourcing solutions offer broker-dealers the ability to outsource their staff, systems and back-office securities processing functions while retaining their customer credit and financing activities. Our services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management, focus on their core businesses, and manage risk. With multi-currency capabilities, our Global Processing Solution supports real-time global trading of equity, option, mutual fund, and fixed income securities in established and emerging markets.

16

Basis of Presentation

The Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. These Financial Statements present the consolidated position of the Company. These Financial Statements include the entities in which the Company directly or indirectly has a controlling financial interest and various entities in which the Company has investments recorded under the cost and equity methods of accounting. Intercompany balances and transactions have been eliminated. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Financial Statements should be read in conjunction with the Company’s financial statements for the fiscal year ended June 30, 2009 in the Company’s 2009 Annual Report filed with the Securities and Exchange Commission (the “SEC”) on August 11, 2009.

As a result of Broadridge entering into the Asset Purchase Agreement to sell the securities clearing contracts of Ridge Clearing, the Company now has two reportable operating business segments: Investor Communication Solutions and Securities Processing Solutions. The securities clearing business is reflected in discontinued operations and the operations outsourcing solutions business retained by Broadridge is now reported as part of the Securities Processing Solutions business segment. This change is reflected in all prior periods presented in this report on Form 10-Q.

Critical Accounting Policies

In presenting the Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Management continually evaluates the accounting policies and estimates used to prepare the Financial Statements. The estimates, by their nature, are based on judgment, available information, and historical experience and are believed to be reasonable. However, actual amounts and results could differ from these estimates made by management. In management’s opinion, the Financial Statements contain all normal recurring adjustments necessary for a fair presentation of results reported. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in the “Critical Accounting Policies” section of Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” in our 2009 Annual Report.

Results of Continuing Operations

The following discussions of Analysis of Condensed Consolidated Continuing Operations and Analysis of Reportable Segments refer to the three and six months ended December 31, 2009 compared to the three and six months ended December 31, 2008. The following discussions of the Company’s results of continuing operations exclude the results related to the securities clearing business. This business is segregated from continuing operations and included in discontinued operations for all periods presented. The Analysis of Condensed Consolidated Continuing Operations should be read in conjunction with the Analysis of Reportable Segments, which provides more detailed discussions concerning certain components of the Condensed Consolidated Statements of Earnings from continuing operations.

17

Analysis of Condensed Consolidated Continuing Operations

	Three Months Ended December 31,
							Change
	2009			2008			$			%
				($ in millions)
Revenues	$	529.7		$	437.5		$	92.2		21
Cost of revenues		399.7			328.2			71.5		22
Selling, general and administrative expenses		58.4			62.0			(3.6	)	(6	)
Other (income) expenses, net		3.1			(1.4	)		4.5		NM	*
Total expenses		461.2			388.8			72.4		19
Earnings from continuing operations before income taxes		68.5			48.7			19.8		41
Margin		12.9	%		11.1	%				1.8	pts
Provision for income taxes		17.0			18.7			(1.7	)	(9	)
Effective tax rate		24.8	%		38.4	%				(13.6	) pts
Net earnings from continuing operations	$	51.5		$	30.0		$	21.5		72
Basic Earnings per share from continuing operations	$	0.38		$	0.21		$	0.17		81
Diluted Earnings per share from continuing operations	$	0.37		$	0.21		$	0.16		76

* Not Meaningful

	Six Months Ended December 31,
							Change
	2009			2008			$			%
				($ in millions)
Revenues	$	967.9		$	893.0		$	74.9		8
Cost of revenues		738.2			676.4			61.8		9
Selling, general and administrative expenses		111.8			115.7			(3.9	)	(3	)
Other (income) expenses, net		6.9			(6.9	)		13.8		NM	*
Total expenses		856.9			785.2			71.7		9
Earnings from continuing operations before income taxes		111.0			107.8			3.2		3
Margin		11.5	%		12.1	%				(0.6	) pts
Provision for income taxes		32.9			41.7			(8.8	)	(21	)
Effective tax rate		29.6	%		38.7	%				(9.1	) pts
Net earnings from continuing operations	$	78.1		$	66.1		$	12.0		18
Basic Earnings per share from continuing operations	$	0.57		$	0.47		$	0.10		21
Diluted Earnings per share from continuing operations	$	0.56		$	0.47		$	0.09		19

* Not Meaningful

18

Three Months Ended December 31, 2009 versus Three Months Ended December 31, 2008

Revenues. Revenues for the three months ended December 31, 2009 were $529.7 million, an increase of $92.2 million or 21%, compared to $437.5 million for the three months ended December 31, 2008. The increase reflects higher contributions from fee revenues of $59.7 million and higher distribution revenues of $32.5 million. Higher fee revenues of $59.7 million was driven by $59.8 million in event-driven mutual fund proxy revenues, the favorable impact of the actual versus budgeted foreign currency exchange rates, and gains from an acquisition. These gains were partially offset by negative recurring revenues driven by negative internal growth, partially offset by a positive contribution from sales less losses (referred to as “Net New Business”).

Six Months Ended December 31, 2009 versus Six Months Ended December 31, 2008

Revenues. Revenues for the six months ended December 31, 2009 were $967.9 million, an increase of $74.9 million or 8%, compared to $893.0 million for the six months ended December 31, 2008. The increase reflects higher contributions from fee revenues of $55.7 million and higher distribution revenues of $19.2 million. Higher fee revenues of $55.7 million was driven by $62.3 million in event-driven mutual fund proxy revenues, the favorable impact of the actual versus budgeted foreign currency exchange rates, and gains from an acquisition. These gains were partially offset by negative recurring revenues driven by negative internal growth, partially offset by a positive contribution from Net New Business.

Three Months Ended December 31, 2009 versus Three Months Ended December 31, 2008

Total Expenses. Total expenses for the three months ended December 31, 2009 were $461.2 million, an increase of $72.4 million, or 19%, compared to $388.8 million for the three months ended December 31, 2008. The increase reflects $71.5 million, or 22% increase in Cost of revenues, $3.6 million, or 6% decrease in Selling, general and administrative expenses, and $4.5 million higher Other (income) expenses, net.

Cost of revenues for the three months ended December 31, 2009 were $399.7 million, an increase of $71.5 million, or 22%, compared to $328.2 million for the three months ended December 31, 2008. The increase reflects higher expense relating to higher fee revenues driven by event-driven mutual fund proxy and the net impact of higher distribution costs related to higher distribution revenues. Distribution cost of revenues for the three months ended December 31, 2009 were $166.4 million, an increase of $30.1 million, or 22%, compared to $136.3 million for the three months ended December 31, 2008. Fluctuations in foreign currency exchange rates also increased Cost of revenues by $2.4 million.

Selling, general and administrative expenses for the three months ended December 31, 2009 were $58.4 million, a decrease of $3.6 million, or 6%, compared to $62.0 million for the three months ended December 31, 2008. The decrease reflects $2.2 million lower stock-based compensation expense related to special stock option grants to corporate officers during the three months ended December 31, 2008 which vested immediately, were expensed upon vest, and did not recur during the three months ended December 31, 2009.

Other (income) expenses, net for the three months ended December 31, 2009 were $3.1 million an increase in expenses of $4.5 million, compared to $(1.4) million Other (income) for the three months ended December 31, 2008. The increase reflects a foreign currency exchange loss of $5.2 million, offset by lower interest expense on our Long-term debt of $0.8 million related to the decline in the weighted-average interest rate on our five-year term loan facility.

Six Months Ended December 31, 2009 versus Six Months Ended December 31, 2008

Total Expenses. Total expenses for the six months ended December 31, 2009 were $856.9 million, an increase of $71.7 million, or 9%, compared to $785.2 million for the six months ended December 31, 2008. The increase reflects $61.8 million, or 9% increase in Cost of revenues, $3.9 million, or 3% decrease in Selling, general and administrative expenses, and higher Other (income) expenses, net of $13.8 million.

Cost of revenues for the six months ended December 31, 2009 were $738.2 million, an increase of $61.8 million, or 9%, compared to $676.4 million for the six months ended December 31, 2008. The increase reflects higher expense relating to higher fee revenues driven by event-driven mutual fund proxy and the net impact of higher distribution costs related to higher distribution revenues. Distribution cost of revenues for the six months ended December 31, 2009 were $302.4 million, an increase of $18.3 million, or 6%, compared to $284.1 million for the six months ended December 31, 2008. The impact of foreign currency exchange rates was unchanged.

Selling, general and administrative expenses for the six months ended December 31, 2009 were $111.8 million, a decrease of $3.9 million, or 3%, compared to $115.7 million for the six months ended December 31, 2008. The decrease reflects $2.2 million lower stock-based compensation expense related to special stock option grants to corporate officers during the six months ended December 31, 2008 which vested immediately, were expensed upon vest, and did not recur during the six months ended December 31, 2009.

19

Other (income) expenses, net for the six months ended December 31, 2009 were $6.9 million, an increase in expenses of $13.8 million, compared to $(6.9) million Other (income) for the six months ended December 31, 2008. The increase reflects the effect of the one-time gain from the purchase of the 6.125% Senior Notes due 2017 (the “Senior Notes”) of $8.4 million during the six months ended December 31, 2008, a foreign currency exchange loss of $8.2 million, net of a decrease in interest expense on our Long-term debt of $3.6 million related to a lower outstanding balance on the Senior Notes, and the decline in the weighted-average interest rate on our five-year term loan facility.

Earnings from continuing operations before Income Taxes. Earnings from continuing operations before income taxes for the three months ended December 31, 2009 were $68.5 million, an increase of $19.8 million, or 41%, compared to $48.7 million for the three months ended December 31, 2008. The increase reflects higher Revenues which more than offset the increase in Total expenses during the three months ended December 31, 2009, compared to the three months ended December 31, 2008, as discussed above. Overall margin increased from 11.1% to 12.9% for the three months ended December 31, 2008 compared to the three months ended December 31, 2009, respectively.

Earnings from continuing operations before income taxes for the six months ended December 31, 2009 were $111.0 million, an increase of $3.2 million, or 3%, compared to $107.8 million for the six months ended December 31, 2008. The increase reflects higher Revenues which more than offset the increase in Total expenses during the six months ended December 31, 2009, compared to the six months ended December 31, 2008, as discussed above. Overall margin decreased from 12.1% to 11.5% for the six months ended December 31, 2008 compared to the six months ended December 31, 2009, respectively.

Provision for Income Taxes from Continuing Operations. Our Provision for income taxes and effective tax rates from continuing operations for the three and six months ended December 31, 2009 were $17.0 million and 24.8%, and $32.9 million and 29.6%, respectively, compared to $18.7 million and 38.4%, and $41.7 million and 38.7%, for the three and six months ended December 31, 2008, respectively. The decreases in our Provision for income taxes and the effective tax rates are primarily attributable to the release of a valuation allowance on a deferred tax asset relating to tax loss carryforwards, approved certification for a state tax credit program, and lower enacted tax rates in certain non-U.S. tax jurisdictions for the six months ended December 31, 2009.

Net Earnings from Continuing Operations and Basic and Diluted Earnings per Share from Continuing Operations. Net earnings from continuing operations for the three months ended December 31, 2009 were $51.5 million, an increase of $21.5 million, or 72%, compared to $30.0 million for the three months ended December 31, 2008. The increase in Net earnings from continuing operations reflects increased Revenues and a lower effective tax rate, more than offset by the increase in Total expenses during the three months ended December 31, 2009 compared to the three months ended December 31, 2008, as discussed above.

Net earnings from continuing operations for the six months ended December 31, 2009 were $78.1 million, an increase of $12.0 million, or 18%, compared to $66.1 million for the six months ended December 31, 2008. The increase in Net earnings from continuing operations reflects increased Revenues and a lower effective tax rate, more than offset by the increase in Total expenses during the six months ended December 31, 2009 compared to the six months ended December 31, 2008, as discussed above.

Basic and diluted earnings per share from continuing operations for the three months ended December 31, 2009 were $0.38, an increase of $0.17, or 81%, and $0.37, an increase of $0.16, or 76%, respectively, compared to $0.21 for the three months ended December 31, 2008.

Basic and diluted earnings per share from continuing operations for the six months ended December 31, 2009 were $0.57, an increase of $0.10, or 21%, and $0.56, an increase of $0.09, or 19%, respectively, compared to $0.47 for the six months ended December 31, 2008.

Analysis of Reportable Segments

As a result of Broadridge entering into the Asset Purchase Agreement to sell the securities clearing contracts of Ridge Clearing, Broadridge now has two reportable operating business segments: Investor Communication Solutions and Securities Processing Solutions. The securities clearing business is reflected in discontinued operations and the operations outsourcing solutions business retained by Broadridge is now reported as part of the Securities Processing Solutions business segment. This change is reflected in all prior periods presented in this report on Form 10-Q.

The primary components of “Other” are the elimination of intersegment revenues and profits and certain unallocated expenses. Foreign currency exchange is a reconciling item between the actual foreign currency exchange rates and the fiscal year 2010 budgeted foreign currency exchange rates.

Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts in a reasonable manner. Because the Company compensates the management of its various businesses on, among other factors, segment profit, the Company may elect to record certain segment-related expense items of an unusual or non-recurring nature in consolidation rather than reflect such items in segment profit.

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Revenues

	Three Months Ended December 31,										Six Months Ended December 31,
						Change											Change
	2009		2008			$			%		2009			2008			$			%
			($ in millions)											($ in millions)
Investor Communication Solutions	$	393.3	$	295.5		$	97.8		33		$	703.2		$	609.3		$	93.9		15
Securities Processing Solutions		133.8		146.5			(12.7	)	(9	)		263.9			285.9			(22.0	)	(8	)
Other		2.2		0.1			2.1		NM	*		2.2			0.4			1.8		NM	*
Foreign currency exchange		0.4		(4.6	)		5.0		NM	*		(1.4	)		(2.6	)		1.2		46
Total	$	529.7	$	437.5		$	92.2		(21	)	$	967.9		$	893.0		$	74.9		8

* Not Meaningful

Earnings (Loss) from Continuing Operations Before Income Taxes

	Three Months Ended December 31,											Six Months Ended December 31,
							Change											Change
	2009			2008			$			%		2009			2008			$			%
				($ in millions)											($ in millions)
Investor Communication Solutions	$	50.9		$	19.8		$	31.1		NM	*	$	74.3		$	43.1		$	31.2		72
Securities Processing Solutions		23.4			38.1			(14.7	)	(39	)		49.0			73.4			(24.4	)	(33	)
Other		(6.8	)		(8.1	)		1.3		16			(13.4	)		(8.9	)		(4.5	)	(51	)
Foreign currency exchange		1.0			(1.1	)		2.1		NM	*		1.1			0.2			0.9		NM	*
Total	$	68.5		$	48.7		$	19.8		41		$	111.0		$	107.8		$	3.2		3

* Not Meaningful

Investor Communication Solutions

Revenues. Investor Communication Solutions’ segment Revenues for the three months ended December 31, 2009 were $393.3 million, an increase of $97.8 million, or 33%, compared to $295.5 million for the three months ended December 31, 2008. The 33% increase was primarily driven by higher event-driven fee revenues and higher distribution revenues related to mutual fund proxy. Distribution revenues for the three months ended December 31, 2009 were $184.3 million, an increase of $32.5 million, or 21%, compared to the three months ended December 31, 2008. Also contributing to the Revenue increase were higher recurring revenues driven by a positive contribution from Net New Business in Transaction reporting primarily as a result of the recently signed seven-year contract with Morgan Stanley Smith Barney LLC (“MSSB”) and revenue gains from an acquisition, partially offset by negative internal growth. Position growth, a key measure in the number of pieces processed, was negative 5% for annual equity proxies and positive 6% for mutual fund interim communications. Equity proxy position growth in the second fiscal quarter historically has not been indicative of the full-year trend due to the seasonality of our business. The number of pieces processed increased 36% from 225.4 million pieces to 305.7 million pieces driven primarily by event-driven mutual fund proxy activity.

For the six months ended December 31, 2009, Revenues were $703.2 million, an increase of $93.9 million, or 15%, compared to $609.3 million for the six months ended December 31, 2008. The 15% increase was primarily driven by higher event-driven fee revenue related to mutual fund proxy and higher distribution revenues driven by product mix. Distribution revenues for the six months ended December 31, 2009 were $336.6 million, an increase of $19.2 million, or 6% compared to $317.4 million for the six months

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ended December 31, 2008. Also contributing to the Revenue increase were higher recurring revenues driven by a positive contribution from Net New Business in Transaction reporting primarily as a result of the recently signed seven-year contract with MSSB, and revenue gains from an acquisition. Internal growth was unchanged. Position growth, a key measure in the number of pieces processed, was negative 5% for annual equity proxies and positive 3% for mutual fund interim communications. Equity proxy position growth during first fiscal six months historically has not been indicative of the full-year trend due to the seasonality of our business. The number of pieces processed increased 15% from 474.1 million pieces to 546.5 million pieces driven primarily by event-driven mutual fund proxy activity.

Earnings from Continuing Operations before Income Taxes. Earnings from continuing operations before income taxes for the three months ended December 31, 2009 were $50.9 million, an increase of $31.1 million, compared to $19.8 million for the three months ended December 31, 2008. Margin increased by 6.2 percentage points to 12.9% primarily due to higher event-driven activity.

Earnings from continuing operations before income taxes for the six months ended December 31, 2009 were $74.3 million, an increase of $31.2 million, or 72%, compared to $43.1 million for the six months ended December 31, 2008. Margin increased by 3.5 percentage points to 10.6% due to higher event-driven activity.

Securities Processing Solutions

Revenues. Securities Processing Solutions’ segment Revenues for the three months ended December 31, 2009 were $133.8 million, a decrease of $12.7 million, or 9%, compared to $146.5 million for the three months ended December 31, 2008. The 9% decline in Revenues was driven by the carryover impact of price concessions granted in the second half of the fiscal year ended June 30, 2009 and lower trade volumes in our equity and fixed income businesses, slightly offset by an increase in Net New Business. Non-trade revenues and operations outsourcing were essentially unchanged.

Securities Processing Solutions’ segment Revenues for the six months ended December 31, 2009 were $263.9 million, a decrease of $22.0 million, or 8%, compared to $285.9 million for the six months ended December 31, 2008. The 8% decline in Revenues was driven by the carryover impact of price concessions granted in the second half of the fiscal year ended June 30, 2009 and lower trade volumes in our equity and fixed income businesses, slightly offset by an increase in Net New Business. Non-trade revenues and operations outsourcing were essentially unchanged.

Earnings from Continuing Operations before Income Taxes. Earnings from continuing operations before income taxes for the three months ended December 31, 2009 were $23.4 million, a decrease of $14.7 million, or 39%, compared to $38.1 million for the three months ended December 31, 2008. Margin decreased by 8.5 percentage points to 17.5% for the three months ended December 31, 2009. The decrease is primarily due to the impact of lower Revenues.

Earnings from continuing operations before income taxes for the six months ended December 31, 2009 were $49.0 million, a decrease of $24.4 million, or 33%, compared to $73.4 million for the six months ended December 31, 2008. Margin decreased by 7.1 percentage points to 18.6% for the six months ended December 31, 2009. The decrease is primarily due to the impact of lower Revenues.

Other

Revenues. Other segment Revenues were $2.2 million, an increase of $2.1 million for the three months ended December 31, 2009, compared to $0.1 million for the three months ended December 31, 2008 reflecting primarily one-time termination fees during the three months ended December 31, 2009.

Other segment Revenues were $2.2 million, an increase of $1.8 million for the six months ended December 31, 2009, compared to $0.4 million for the six months ended December 31, 2008, reflecting primarily one-time termination fees during the six months ended December 31, 2009.

Loss from Continuing Operations before Income Taxes. The primary component of Other expenses are certain unallocated expenses. Loss from continuing operations before income taxes was $6.8 million for the three months ended December 31, 2009, an improvement of $1.3 million, compared to an $8.1 million loss from continuing operations before income taxes for the three months ended December 31, 2008. The improvement reflects $2.0 million one-time termination fees during the three months ended December 31, 2009. Stock-based compensation expense decreased by $2.2 million due to special stock option grants to corporate officers during the three months ended December 31, 2008 which vested immediately, were expensed upon vest, and did not recur during the three months ended December 31, 2009. Corporate investment spending decreased by $1.6 million. Interest expense on our Long-term debt decreased by $0.8 million due to a decline in the weighted-average interest rate on our five-year term loan facility. These improvements were offset negatively by a change in foreign currency exchange gains and losses of $5.2 million.

Loss from continuing operations before income taxes increased to $13.4 million for the six months ended December 31, 2009, a decline of $4.5 million, compared to an $8.9 million loss from continuing operations before income taxes for the six months ended

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December 31, 2008. The increased loss reflects an $8.4 million gain during the prior year from the purchase of $125.0 million principal amount of the Senior Notes and a change in foreign currency exchange gains and losses of $8.2 million. These losses were partially offset by a reduction in corporate investment spending of $3.8 million, lower interest expense on our Long-term debt of $3.6 million due to a lower outstanding balance and the decline in the weighted-average interest rate on our five-year term loan facility, a decrease of $2.2 million in stock-based compensation expense due to the aforementioned special stock option grants to corporate officers, and $2.0 million in one-time termination fees during the six months ended December 31, 2009.

Financial Condition, Liquidity and Capital Resources

At December 31, 2009, Cash and cash equivalents were $147.1 million and Total stockholders’ equity was $846.7 million. At December 31, 2009, working capital was $559.6 million, compared to $621.9 million at June 30, 2009.

At December 31, 2009, the Company had $324.1 million of outstanding Long-term debt, consisting of a $200.0 million five-year term loan facility and $124.1 million principal amount of the Senior Notes. The Senior Notes are unsecured obligations of Broadridge and rank equally in right of payment with other unsecured and unsubordinated obligations of Broadridge. Interest is payable semiannually on June 1^st and December 1^st each year based on a fixed per annum rate equal to 6.125%.

Borrowings under the term loan facility bear interest at LIBOR plus 40 to 90 basis points based on debt ratings at the time of borrowing. The term loan facility was subject to interest at LIBOR plus 50 basis points as of December 31, 2009. The weighted-average interest rate on the five-year term loan facility were 0.79% and 0.95% during the three and six months ended December 31, 2009, respectively.

Based upon current and anticipated levels of operation, management believes that the Company’s cash on hand and cash flows from operations, combined with borrowings available under credit facilities, will be sufficient to enable the Company to meet its current and anticipated cash operating requirements, capital expenditures and working capital needs. Please refer to the discussion of net cash flows used in financing activities in the following section for further discussion of the Company’s financing activities.

Cash Flows

Net cash flows provided by operating activities of continuing operations were $118.8 million for the six months ended December 31, 2009, an increase of $26.1 million, compared to $92.7 million net cash flows provided during the six months ended December 31, 2008. The increase is primarily due to lower taxes paid in the current year.

Net cash flows used in investing activities of continuing operations for the six months ended December 31, 2009 were $20.0 million, a decrease of $2.6 million, compared to $22.6 million net cash flows used during the six months ended December 31, 2008. The decrease reflects lower spending of $8.9 million on acquisitions during the six months ended December 31, 2009, compared to the six months ended December 31, 2008, offset by an increase in capital expenditures and purchases of software of $6.3 million.

Net cash flows used in financing activities of continuing operations for the six months ended December 31, 2009 were $131.5 million. This represents a decrease of $10.5 million, compared to $142.0 million in net cash flows used in financing activities of continuing operations during the six months ended December 31, 2008. The decreased usage reflects $114.4 million of purchases of the Senior Notes in the prior year that did not recur and $25.6 million in higher proceeds from the exercise of stock options, offset by $120.2 million in higher repurchases of the Company’s common stock, and an increase of $10.5 million in Dividends paid.

Liquidity Risk

Our liquidity position may be negatively affected by changes in general economic conditions, regulatory requirements and access to the capital markets, which may be limited if we were to fail to renew any of the credit facilities on their renewal dates or if we were to fail to meet certain ratios.

Based upon current and anticipated levels of operation, management believes that the Company’s cash on hand and cash flows from operations, combined with borrowings available under credit facilities, will be sufficient to enable the Company to meet its current and anticipated cash operating requirements, capital expenditures and working capital needs. Please refer to the discussion of net cash flows used in financing activities in the preceding section for further discussion of the Company’s financing activities.

Seasonality

Processing and distributing proxy materials and annual reports to investors in equity securities and mutual funds comprises a large portion of our Investor Communication Solutions business. We process and distribute the greatest number of proxy materials and annual reports during our fourth fiscal quarter (the second quarter of the calendar year). The recurring periodic activity of this business is linked to significant filing deadlines imposed by law on public reporting companies and mutual funds. Historically this has caused our revenues, operating income, net earnings, and cash flows from operating activities to be higher in our fourth fiscal quarter than in

23

any other fiscal quarter. The seasonality of our revenues makes it difficult to estimate future operating results based on the results of any specific fiscal quarter and could affect an investor’s ability to compare our financial condition, results of operations, and cash flows on a fiscal quarter-by-quarter basis.

Income Taxes

Our effective tax rates from continuing operations for the three and six months ended December 31, 2009 were 24.8% and 29.6%, respectively, compared to 38.4% and 38.7% for the three and six months ended December 31, 2008, respectively. The decrease in the effective tax rates is primarily attributable to the release of a valuation allowance on a deferred tax asset relating to tax loss carryforwards, approved certification for a state tax credit program, and lower enacted tax rates in certain non-U.S. tax jurisdictions for the six months ended December 31, 2009.

Contractual Obligations

The Company entered into a data center outsourcing services agreement with ADP before our spin-off from ADP in March 2007 under which ADP provides the Company with data center services consistent with the services provided to the Company immediately before the spin-off, provided that the operation of the data center is the sole responsibility of ADP. Among the principal services provided by the data center are information technology services and service delivery network services. The agreement with ADP provides for increasing volumes and the addition of new services over the term. Under the agreement, ADP is responsible for hosting the mainframe, midrange, open systems, and networks. Additionally, systems engineering, network engineering, hardware engineering, network operations, data center operations, application change management, and data center disaster recovery services are managed by ADP. The agreement will expire on June 30, 2012. For the three months ended December 31, 2009 and 2008, the Company recorded $26.1 million and $25.9 million, respectively, of expenses in the Condensed Consolidated Statements of Earnings related to these services. For the six months ended December 31, 2009 and 2008, the Company recorded $51.9 million and $51.3 million, respectively, of expenses in the Condensed Consolidated Statements of Earnings related to these services.

Other Commercial Agreements

The Company has a five-year revolving credit facility that expires in March 2012 that has an available capacity of $500.0 million and a revolving credit facility under which Ridge Clearing is the borrower and the Company is the guarantor that expires in August 2010 (which may be extended to August 2011 subject to certain conditions) that has an available capacity of $75.0 million. No amounts were outstanding under these credit facilities at December 31, 2009.

In addition, immediately prior to the separation from ADP, certain of the Company’s foreign subsidiaries established unsecured, uncommitted lines of credit with banks. These lines of credit bear interest at the rate of LIBOR plus 250 basis points. There were approximately $0.2 million of outstanding borrowings under these lines of credit at December 31, 2009.

Off-balance Sheet Arrangements

It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company uses derivative financial instruments as risk management tools and not for trading purposes. The Company was not a party to any derivative financial instruments at December 31, 2009 or at June 30, 2009. In the normal course of business, the Company also enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. The Company does not expect any material losses related to such representations and warranties or collateral arrangements.

Recently-issued Accounting Pronouncements

Please refer to Note 2 “New Accounting Pronouncements” to our Financial Statements under Item 1 of Part I of this Quarterly Report on Form 10-Q for a discussion on the impact of new accounting pronouncements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company provides guarantees to securities clearinghouses and exchanges. Under the standard membership agreement, members are required to guarantee the performance of the other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearinghouse, the other members would be required to meet any shortfalls. The Company’s liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted as collateral. However, the potential for the Company to be required to make payments under these arrangements is remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for these transactions.

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In the normal course of business, the securities activities of the clearing business primarily involve executions, settlement and financing of various securities transactions for a nationwide retail and institutional, customer and non-customer client base, introduced by its correspondent broker-dealers. These activities may expose the Company to financial risk in the event customers, other broker-dealers, banks, clearing organizations or depositories are unable to fulfill contractual obligations.

The Company may be exposed to a risk of loss not reflected in the Condensed Consolidated Balance Sheets for securities sold and not yet purchased, should the value of such securities rise. The securities lending activities of the Company’s clearing business require the Company to pledge securities as collateral. In the event a counterparty is unable to meet its contractual obligation, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices. The Company monitors the credit standing of counterparties with whom it conducts business. Financial risk is further controlled by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral level in the event of excess market exposure or instituting securities buy-in procedures when required.

At December 31, 2009, $200.0 million of our total $324.1 million outstanding Long-term debt is based on floating interest rates. Our term loan facility had $200.0 million outstanding at December 31, 2009. The interest rate is based on LIBOR plus 40 to 90 basis points based on our debt rating at the time of borrowing. The term loan facility was subject to interest at LIBOR plus 50 basis points at December 31, 2009. The weighted-average interest rates were 0.79% and 0.95% during the three and six months ended December 31, 2009, respectively.

Item 4. CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2009. The Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2009 were effective to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In the normal course of business, the Company is subject to claims and litigation. While the outcome of any claim or litigation is inherently unpredictable, the Company believes that the ultimate resolution of these matters will not, individually or in the aggregate, result in a material adverse impact on its financial condition, results of operations, or cash flows.

Item 1A. RISK FACTORS

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the “Risk Factors” disclosed under Item 1A to Part I in our 2009 Annual Report on Form 10-K filed on August 11, 2009. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. Other than as set forth below, there have been no material changes to the risk factors we have disclosed in the “Risk Factors” section of our 2009 Annual Report on Form 10-K.

The following risk factors disclosed in the “Risk Factors” section of our 2009 Annual Report on Form 10-K, are hereby deleted in their entirety:

We have agreed to certain restrictions to preserve the treatment of the Distribution as tax-free to ADP and its stockholders, which will reduce our strategic and operating flexibility.

The IRS ruling and opinion from tax counsel confirming the tax-free status of the Distribution relied on certain representations and undertakings from us, and the tax-free status of the Distribution could be affected if these representations and undertakings are not correct or are violated. If the Distribution fails to qualify for tax-free treatment, it will be treated as a taxable dividend to ADP stockholders in an amount equal to the fair market value of our stock issued to ADP stockholders. In that event, ADP would be required to recognize a gain equal to the excess of the sum of the fair market value of our stock on the Distribution date and the amount of cash received in the cash distribution over ADP’s tax basis in our stock.

In addition, current tax law generally creates a presumption that the Distribution would be taxable to ADP, but not to its stockholders, if we or our stockholders were to engage in a transaction that would result in a 50% or greater change by vote or by value in our stock ownership during the two-year period beginning on the Distribution date, unless it is established that the Distribution and the transaction are not part of a plan or series of related transactions to effect such a change in ownership. In the case of such a 50% or greater change in our stock ownership, tax imposed on ADP in respect of the Distribution would be based on the fair market value of our stock on the Distribution date over ADP’s tax basis in our stock.

Under the tax allocation agreement that we entered into with ADP, we are generally prohibited, with a number of specified exceptions, for specified periods of up to 30 months following the Distribution, from:

• issuing, redeeming, or being involved in other significant acquisitions of our equity securities;

• transferring significant amounts of our assets;

• amending our certificate of incorporation or by-laws;

• failing to engage in the active conduct of a trade or business; or

• engaging in certain other actions or transactions that could jeopardize the tax-free status of the Distribution.

We have agreed to indemnify ADP for taxes and related losses resulting from certain actions that may cause the Distribution to fail to qualify as a tax-free transaction.

Under the tax allocation agreement that we entered into with ADP, we agreed generally to indemnify ADP for taxes and related losses it suffers as a result of the Distribution failing to qualify as a tax-free transaction, if the taxes and related losses are attributable to:

• direct or indirect acquisitions of our stock or assets (regardless of whether we consent to such acquisitions);

• negotiations, understandings, agreements or arrangements in respect of such acquisitions; or

• our failure to comply with certain representations and undertakings from us, including the restrictions described in the preceding risk factor.

See Item 1 of Part I “The Separation of Broadridge from ADP—Tax Allocation Agreement” of this Annual Report on Form 10-K. Our indemnity covers both corporate level taxes and related losses imposed on ADP in the event of a 50% or greater change in our stock ownership described in the preceding risk factor, as well as taxes and related losses imposed on both ADP and its stockholders if, due to our representations or undertakings being incorrect or violated, the Distribution is determined to be taxable for other reasons.

26

The indemnification obligation to ADP for taxes due in the event of a 50% or greater change in our stock ownership could be substantial, and it is unlikely that we would have the resources to satisfy it.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table contains information about our purchases of our equity securities for each of the three months during our second fiscal quarter ended December 31, 2009:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan(1)	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans (1)
October 1, 2009 – October 31, 2009	—		—	—	—
November 1, 2009 – November 30, 2009	2,281,396	$	22.64	2,281,396	4,230,372
December 1, 2009 – December 31, 2009	371,550		22.49	371,550	3,858,822
Total	2,652,946	$	22.62	2,652,946	3,858,822

(1) On August 11, 2009, the Board of Directors authorized a stock repurchase plan for the repurchase of up to 10 million shares of the Company’s common stock to offset share dilution created by the Company’s equity compensation plans. During the fiscal quarter ended December 31, 2009, the Company purchased 2,652,946 shares of common stock under this plan at an average price per share of $22.62.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Company’s 2009 Annual Meeting of Stockholders held on November 18, 2009 (the “2009 Annual Meeting”), the following actions were taken:

Proposal 1: Election of Directors. The stockholders elected nine Directors, seven of whom were then serving as Directors of Broadridge, for terms of one year and until their successors are elected and qualified. The following table reflects the tabulation of the votes with respect to each Director who was elected at the 2009 Annual Meeting:

	Votes For	Votes Against	Abstentions
Leslie A. Brun	113,437,490	4,396,121	833,219
Richard J. Daly	117,186,031	650,689	830,110
Robert N. Duelks	117,111,764	702,207	852,859
Richard J. Haviland	116,307,155	1,523,733	835,942
Alexandra Lebenthal	117,289,033	528,560	849,237
Stuart R. Levine	116,255,838	1,457,626	953,366
Thomas J. Perna	117,110,210	707,317	849,303
Alan J. Weber	117,174,805	644,743	847,282
Arthur F. Weinbach	115,446,183	2,391,883	828,764

Proposal 2: Ratification of Appointment of Auditors. A proposal by the Board of Directors to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm to conduct the annual audit of the financial statements of the Company and its subsidiaries for the fiscal year ending June 30, 2010, was approved by the stockholders. The stockholders cast 118,228,026 votes in favor of this proposal and 311,047 votes against. There were 127,757 abstentions.

Proposal 3: Approval of the Amendment of our 2007 Omnibus Award Plan. A proposal by the Board of Directors to amend the Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan was approved by the stockholders. The stockholders cast 75,842,237 votes in favor of this proposal and 21,686,144 votes against. There were 247,107 abstentions.

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Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

2.1	Asset Purchase Agreement dated as of November 2, 2009, by and among Penson Worldwide, Inc., Penson Financial Services, Inc., Broadridge Financial Solutions, Inc. and Ridge Clearing & Outsourcing Solutions, Inc.12
10.1	Master Services Agreement dated as of November 2, 2009, by and between Penson Worldwide, Inc. and Broadridge Financial Solutions, Inc. 2
31.1	Certification of the Chief Executive Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 or Rule 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 or Rule 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

1. Schedules to the Asset Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish supplemental copies of any omitted schedules upon request by the Securities and Exchange Commission.

2. Certain Confidential Information contained in this Exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk. This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned hereunto duly authorized.

	BROADRIDGE FINANCIAL SOLUTIONS, INC.
Date: February 4, 2010	By:	/S/    DAN SHELDON
		Dan Sheldon
		Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)

30

EX-2.1

Exhibit 2.1

Execution Copy

NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED LANGUAGE.

ASSET PURCHASE AGREEMENT

dated as of NOVEMBER 2, 2009

among

PENSON WORLDWIDE, INC.,

PENSON FINANCIAL SERVICES, INC.,

BROADRIDGE FINANCIAL SOLUTIONS, INC.

and

RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.

ARTICLEI	DEFINITIONS	1
1.1	Definitions	1
1.2	Other Defined Terms	8
ARTICLE II	PURCHASE AND SALE	10
2.1	Purchase and Sale of the Purchased Assets	10
2.2	Excluded Assets	11
2.3	Assumed Liabilities	11
2.4	Excluded Liabilities	11
2.5	Purchase Price	12
2.6	Purchase Price Adjustments	12
2.7	Allocation	18
2.8	Consents	19
2.9	Closing Assigned Contracts	19
2.10	Closing Other Purchased Assets	20
ARTICLE III	CLOSING	20
3.1	Closing Date	20
3.2	Deliveries by Seller at the Closing	20
3.3	Deliveries by Buyer at the Closing	21
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER	22
4.1	Organization and Good Standing	22
4.2	Authority and Enforceability	22
4.3	No Conflicts; Consents	23
4.4	Taxes	23
4.5	Compliance with Law	24
4.6	Title to Personal Property	24
4.7	Absence of Certain Changes or Events	24
4.8	Contracts	24
4.9	Litigation	25
4.10	Customers	25
4.11	Broker-Dealer	25
4.12	Investment Representations	28
4.13	Sufficiency of Purchased Assets	29
ARTICLE V	REPRESENTATIONS AND WARRANTIES OF PW AND BUYER	29
5.1	Organization and Good Standing	29
5.2	Authority and Enforceability	29
5.3	Issuance of Shares	30
5.4	No Conflicts; Consents	30
5.5	Litigation	30
5.6	Financial Statements; No PW Material Adverse Effect	30
5.7	No Default	31
5.8	Insurance	31
5.9	Taxes	31

5.10	Capitalization	32
5.11	Disclosure	32
5.12	Compliance with Laws	33
5.13	Leverage Calculation Under Credit Agreement Amendment	33
ARTICLE VI	COVENANTS OF PARENT AND SELLER	33
6.1	Conduct of Business	33
6.2	Negative Covenants	34
6.3	Access to Information; Investigation	34
6.4	Confidentiality	35
6.5	Release of Liens	35
6.6	Consents	35
6.7	Notification of Certain Matters	35
6.8	Restrictive Covenant	35
6.9	No Negotiation	36
ARTICLE VII	COVENANTS OF THE PARTIES	36
7.1	Regulatory Approvals	36
7.2	Public Announcements	37
7.3	Customer Communications	37
7.4	Employees	37
7.5	Taxes	40
7.6	Bulk Sales Laws	41
7.7	Discharge of Business Obligations After Closing	41
7.8	Access to Books and Records	41
7.9	Financing	41
7.10	Cooperation with Preparation of PW Audited Financials	42
7.11	Further Assurances	42
7.12	Payment of Termination Fees	42
7.13	Vendor Contracts	42
ARTICLE VIII	CONDITIONS TO CLOSING	43
8.1	Conditions to Obligations of the Parties	43
8.2	Conditions to Obligation of PW and Buyer	43
8.3	Conditions to Obligation of Parent and Seller	45
ARTICLE IX	TERMINATION	45
9.1	Termination	45
9.2	Effect of Termination	47
9.3	Remedies	47
ARTICLE X	INDEMNIFICATION	47
10.1	Survival	47
10.2	Indemnification by Parent and Seller	48
10.3	Indemnification by PW and Buyer	49
10.4	Indemnification Procedures for Third Party Claims	50
10.5	Indemnification Procedures for Non-Third Party Claims	52

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10.6	Effect of Investigation; Waiver	52
10.7	Other Rights and Remedies	52
10.8	Tax Treatment of Indemnification Payments	53
ARTICLE XI	MISCELLANEOUS	53
11.1	Notices	53
11.2	Amendments and Waivers	54
11.3	Expenses	54
11.4	Successors and Assigns	55
11.5	Governing Law	55
11.6	Waiver of Jury Trial	55
11.7	Obligations of PW and Parent	55
11.8	Counterparts	55
11.9	Third Party Beneficiaries	55
11.10	Entire Agreement	55
11.11	Captions	56
11.12	Severability	56
11.13	Specific Performance	56
11.14	Interpretation	56
11.15	Independent Investigation	57

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EXHIBITS
Exhibit A	Outsourcing Agreement
Exhibit B	Form of Seller Note
Exhibit C	Bill of Sale and Assignment and Assumption Agreement
Exhibit D	Joint Selling Agreement
Exhibit E	Stockholder’s and Registration Rights Agreement
Exhibit F	Form of Backstop Note
SCHEDULES
Schedule 2.1(a)	Assigned Contracts
Schedule 2.1(e)	Other Purchased Assets
Schedule 7.4(a)	Business Employees For Which No Access Granted
Schedule 7.13	Vendor Contracts

Seller Disclosure Schedule
Section 4.1	Jurisdictions
Section 4.3(a)	Consents
Section 4.8	Contracts
Section 4.9	Litigation
Schedule 4.11(a)	Broker-Dealer
Buyer Disclosure Schedule
Section 5.4(b)	Authorization
Section 5.5	Litigation
Section 5.8	Insurance

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ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated as of November 2, 2009 (the “Agreement”), among Penson Worldwide, Inc., a Delaware corporation (“PW”), Penson Financial Services, Inc., a North Carolina corporation and an indirect subsidiary of PW (“Buyer”), Broadridge Financial Solutions, Inc., a Delaware corporation (“Parent”), and Ridge Clearing & Outsourcing Solutions, Inc., a New York corporation and a wholly owned subsidiary of Parent (“Seller”).

WHEREAS, Seller is engaged in the business of providing trade execution, clearing, custody, settlement and other products and services customarily provided in connection with clearing services to the global financial industry (excluding outsourcing services, which include, without limitation, services to be provided under the Outsourcing Agreement) (the “Business”);

WHEREAS, the parties will, contemporaneously with the execution of this Agreement, enter into a Master Services Agreement in the form of Exhibit A hereof (“Outsourcing Agreement”);

WHEREAS, the parties desire that Seller sell, assign, transfer, convey and deliver to Buyer, and that Buyer purchase and acquire from Seller, all of the right, title and interest of Seller in and to the Purchased Assets (as hereinafter defined), and that Buyer assume the Assumed Liabilities (as hereinafter defined), upon the terms and subject to the conditions of this Agreement; and

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

ARTICLE I

DEFINITIONS

1.1 Definitions. When used in this Agreement, the following terms shall have the meanings assigned to them in this Article I or in the applicable Section of this Agreement to which reference is made in this Article I.

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under common control with such specified Person.

“Aggregate Share Value” means an amount equal to the product of (i) the number of shares of PW Common Stock issued to Seller on the Closing Date multiplied by (ii) the Measurement Price.

“Ancillary Agreements” means the Bill of Sale and Assignment and Assumption Agreement, the Note, the Outsourcing Agreement, the Marketing Agreement, the Stockholder’s and Registration Rights Agreement, the Conversion Agreement, the Backstop Note and the other agreements, instruments and documents delivered at the Closing.

“Applicable Law” means any and all applicable laws (whether civil, criminal or administrative) including common law, statutes, subordinate legislation, treaties, regulations, rules, directives, decisions, by-laws, circulars, codes, orders, notices, demands, decrees, injunctions, guidance, judgments or resolutions of a parliamentary government, quasi-government, federal, state or local government, statutory, administrative or regulatory body, securities exchange, court or agency in any part of the world which is in force or enacted and legally binding and any and all rules of any applicable SRO, each as of the applicable time.

“Authorization” means any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Entity or pursuant to any Law.

“Benefit Plan” means (a) any “employee benefit plan” as defined in ERISA Section 3(3), including any (i) nonqualified deferred compensation or retirement plan or arrangement which is an Employee Pension Benefit Plan (as defined in ERISA Section 3(2)), (ii) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (iii) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan (as defined in ERISA Section 3(37)) and (iv) Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material fringe benefit plan or program, or (b) stock purchase, stock option, severance pay, employment, change-in-control, vacation pay, company awards, salary continuation, sick leave, excess benefit, bonus or other incentive compensation, life insurance, or other employee benefit plan, contract, program, policy or other arrangement, whether or not subject to ERISA.

“Binding Arbitrator” means one or more impartial persons to which a dispute is referred for final and binding determination.

“Books and Records” means all books of account and other financial Records, files, documents, instruments, books and Records relating principally to Seller or any Seller Correspondent, including the books and Records required under Rules 17a-3 and 17a-4 of the Exchange Act and other Applicable Law.

“Business Authorizations” means all authorizations which are necessary for Seller to conduct business relating to the Purchased Assets as currently conducted or as proposed to be conducted or for the ownership and use of the assets owned and used by Seller in the conduct of business relating to the Purchased Assets.

“Business Day” means a day other than a Saturday, Sunday or other day on which the New York Stock Exchange is authorized or required by Law to close.

“Business Employee” means any individual employed by Seller in connection with the Business as of the Closing.

“Capital Stock” means (a) in the case of a corporation, its shares of capital stock, (b) in the case of a partnership or limited liability company, its partnership or membership interests or units (whether general or limited), and (c) any other interest that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets, of the issuing entity.

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“Charter Documents” means, with respect to any entity, the certificate of incorporation, the articles of incorporation, by-laws, articles of organization, limited liability company agreement, partnership agreement, formation agreement, joint venture agreement or other similar organizational documents of such entity (in each case, as amended).

“Code” means the Internal Revenue Code of 1986, as amended, from time to time.

“Contract” means any agreement, contract, license, lease, commitment, arrangement or understanding, written or oral, including any sales order or purchase order.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, from time to time.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, from time to time.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Entity” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States or foreign federal, state, local, or municipal government, any supranational, international, multinational, national or other government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory, administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law, including, without limitation, FINRA and any other applicable SRO.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“Indebtedness” means any of the following: (a) any indebtedness for borrowed money, (b) any obligations evidenced by bonds, debentures, notes or other similar instruments, (c) any obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business and not delinquent, (d) any obligations as lessee under capitalized leases or operating leases functionally the equivalent of debt, (e) any indebtedness created or arising under any conditional sale or other title retention agreement with respect to acquired property, (f) any obligations, contingent or otherwise, under acceptance credit, letters of credit or similar facilities, (g) any obligations secured by any Purchased Assets, and (h) any guaranty of any of the foregoing.

“Indemnitee” means any Person that is seeking indemnification from an Indemnitor pursuant to the provisions of this Agreement.

“Indemnitor” means any party hereto from which any Indemnitee is seeking indemnification pursuant to the provisions of this Agreement.

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“Internal Control Event” means a material weakness in, or fraud, that involves management or other employees who have a significant role in, PW’s internal controls over financial reporting, in each case as described in the U.S. securities laws.

“IRS” means the United States Internal Revenue Service.

“Knowledge” of Seller or Buyer, as the case may be, or any similar phrase means, with respect to any fact or matter, the actual knowledge of the directors and executive officers of Parent and Seller, or PW and Buyer, as the case may be, and any other employee of Parent and Seller, or PW and Buyer, as the case may be, with a title of Executive Vice President or above, together with such knowledge that such directors, executive officers or other employees could reasonably be expected to discover after due investigation concerning the existence of the fact or matter in question.

“Law” means any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, directive, rule, regulation and any other decision, ruling, notification requirement or determination of any Governmental Entity (whether or not having the force of law).

“Liabilities” means any and all debts, losses, liabilities, offsets, claims, damages, fines, obligations, payments and accounts payable, whether accrued or fixed, absolute or contingent, liquidated or unliquidated, matured or unmatured or determinable, including, without limitation, those arising under any Applicable Law, action or governmental order (including, without limitation, those arising out of any award, demand, assessment, penalty, fine, settlement, judgment or compromise relating to any Applicable Law, action or governmental order and those arising under any contract, agreement, arrangement, commitment or undertaking), and accruals for out-of-pocket costs and expenses (including, without limitation, reasonable legal, accounting and other professional fees and expenses incurred in investigating, preparing or defending any action or governmental order).

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance in respect of such property or asset.

“Loss” or “Losses” means any and all losses, liabilities, costs, claims, damages, diminution in value based upon loss of revenue, penalties, interest, and expenses (including reasonable attorney’s fees and expenses and reasonable costs of investigation but excluding lost profits and consequential damages). In the event that any of the foregoing are indemnifiable hereunder, the terms “Loss” and “Losses” shall include any and all reasonable attorneys’ fees and expenses and reasonable costs of investigation incurred by the Indemnitee in enforcing such indemnity.

“Measurement Price” means the average of the daily volume weighted average price per share of the PW Common Stock quoted for trading on NASDAQ Stock Market or other national securities exchange as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) for the 10 consecutive trading days ended on the last day immediately preceding the Closing Date.

“Net Revenue” means, with respect to an Assigned Contract, the total contract revenue as set forth in Schedule 2.1(a), as the same may be modified and amended in accordance with the

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terms of this Agreement, including, among other things, net interest revenues (net also of any interest required to be shared with the Seller Correspondent), securities clearing and execution revenue (excluding amortization of client concessions granted), money market revenues (net of any money market revenues required to be shared with the Seller Correspondent), and other revenues earned for related activities (net of any revenues required to be shared with the Seller Correspondent), whether specifically identified with a Seller Correspondent or allocated to a Seller Correspondent consistent with past practice. “Net Revenues” include charges that are passed through to a Seller Correspondent or their customers for expenses on a marked up basis, but does not include charges that are passed through to a Seller Correspondent or their customers for expenses on an at-cost basis. “Net Revenues” excludes Non-Recurring Revenues and Termination Fees.

“Non-Recurring Revenues” means revenues earned on a non-recurring basis outside of the ordinary course of business and categorized in a manner consistent with “Non-Recurring Revenues” as reflected in Schedule 2.1(a).

“Notice of Objection” means a notice to Buyer which sets forth Seller’s objections to Buyer’s calculation of any component of any Purchase Price Adjustment pursuant to Section 2.6 hereof. Any Notice of Objection shall specify those items or amounts with which Seller disagrees, together with a detailed written explanation of the reasons for disagreement with each such item or amount, and shall set forth Seller’s calculation of the adjustment. To the extent not set forth in the Notice of Objection, Seller shall be deemed to have agreed with Buyer’s calculation of all other items and amounts contained in Buyer’s statement detailing the basis for the adjustment.

“Order” means any award, injunction, judgment, decree, order, ruling, subpoena or verdict or other decision issued, promulgated or entered by or with any Governmental Entity of competent jurisdiction or by a Binding Arbitrator.

“Other Antitrust Laws” means the antitrust and competition Laws of all jurisdictions other than those of the United States.

“Permitted Liens” means (a) Liens for current real or personal property Taxes not yet due and payable and with respect to which Seller maintains adequate reserves, (b) workers’, carriers’ and mechanics’ or other like Liens incurred in the ordinary course of business with respect to which payment is not due and that do not impair the conduct of business or the present or proposed use of the affected property and (c) Liens in favor of Buyer.

“Person” means an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, a Governmental Entity or any other entity or body.

“PW Financial Statements” means the audited consolidated balance sheet of PW and its Subsidiaries for the fiscal year ended December 31, 2008, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of PW and its subsidiaries, including the notes thereto.

“PW Material Adverse Effect” means any change, event, circumstances or effect that, individually or taken together with all other changes, events, circumstances or effects, has a material

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adverse effect on PW’s financial condition or in the earnings, business or operations of PW and its Subsidiaries, considered as one entity, or on the ability of PW or Buyer to perform its obligations hereunder, in each case, other than any effect arising or resulting from (a) a change in general economic conditions, (b) a change affecting the securities markets or the brokerage industries in the United States generally or (c) a change arising from the execution and delivery of this Agreement or the transactions contemplated hereby or any announcement hereof.

“Records” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“Reference Period” means, for each Seller Correspondent that has been a party to an Assigned Contract for at least six full calendar months prior to the Closing Date, the six full calendar month period ending on the date immediately prior to the Closing Date.

“Run-Rate Revenue” means, as applicable depending on the amount of time the Seller Correspondent has been a customer of Seller, (a) an amount equal to the product of the Net Revenue recognized from any Seller Correspondent during a Reference Period multiplied by two, or (b) an amount equal to the greater of (i) the Net Revenue recognized from any Seller Correspondent during a Stub Reference Period multiplied by a number that will annualize such revenue and (ii) the monthly minimum contractual Net Revenue for such Seller Correspondent during the Stub Reference Period multiplied by twelve each as set forth in Schedule 2.1(a), as the same may be modified and amended in accordance with the terms of this Agreement; provided, however, the Run Rate Revenue of each Seller Correspondent shall be adjusted (A) to include any Once Yearly Revenue not included in the calculations in clauses (a) or (b) above because of its recognition during the portion of the year outside the applicable Reference Period or Stub Reference Period , (B) to exclude any multiple-counting of Once Yearly Revenue included in the calculations in clauses (a) or (b) above because of its recognition during the applicable Reference Period and (C) to exclude any Run-Rate Revenue with respect to a Restricted Contract. For purposes herein, “Once Yearly Revenue” shall mean any type of revenue recognized once annually per contract and shall specifically include, but not be limited to, annual IRA fees, excess SIPC IRA account fees, excess SIPC fees with respect to all other accounts and annual inactive account fees. For the avoidance of doubt, the calculation of Run-Rate Revenue shall be calculated in good faith to avoid the multiple-counting of any Once Yearly Revenue, to exclude any Non-Recurring Revenues recognized within a Reference Period, to exclude Termination Fees and to exclude any Run-Rate Revenue with respect to Restricted Contracts.

“SEC” means the U.S. Securities and Exchange Commission.

“SEC Filings” means shall mean (i) PW’s annual report on Form 10-K for fiscal year ended December 31, 2008 filed on March 16, 2009 (the “2008 Form 10-K”) and (ii) any filing made by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act, including any amendment or supplement thereto, during the period between the filing of the 2008 Form 10-K and the Closing Date.

“Seller Benefit Plans” means all Benefit Plans maintained or contributed to by Seller for the benefit of any present or former directors, employees, contractors or consultants with respect to which Seller otherwise has any present or future Liability.

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“Seller Correspondent” means a correspondent clearing customer of Seller that is a party to an Assigned Contract.

“Seller Material Adverse Effect” means any change, event, circumstances or effect that, individually or taken together with all other changes, events, circumstances or effects, has a material adverse effect on the Purchased Assets or on the ability of the Seller or Parent to perform its obligations hereunder, in each case, other than any effect arising or resulting from (a) a change in general economic conditions, (b) a change affecting the securities markets or the brokerage industries in the United States generally or (c) a change arising from the execution and delivery of this Agreement or the transactions contemplated hereby or any announcement hereof.

“SRO” means any self-regulatory organization, including but not limited to FINRA.

“Stub Reference Period” means a period in which a Seller Correspondent has been a party to an Assigned Contract for at least one, but fewer than six, full calendar months as of the Closing Date.

“Subsidiary” or “Subsidiaries” means, with respect to any party, any Person, of which (i) such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the ordinary voting interest in such partnership) or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of directors or others performing similar functions with respect to such Person is directly or indirectly owned or controlled by such party and/or by any one or more of its Subsidiaries.

“Tax” or “Taxes” means any and all federal, state, local, or foreign net or gross income, gross receipts, sales, use, ad valorem, value added, franchise, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, profits, windfall profits, service, service use, occupation, severance, energy, unemployment, social security, capital, premium, and other taxes, assessments, customs, duties, levies, or other governmental charges of any nature whatever, whether disputed or not, whether computed on a separate or consolidated, unitary, combined or similar basis, together with any interest, penalties, or any other additions to Tax with respect thereto.

“Tax Returns” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxing Authority” means any Governmental Entity having jurisdiction with respect to any Tax.

“Termination Fee” means, with respect to any Assigned Contract, any amounts payable by the Seller Correspondent party thereto as a result of a termination, de-conversion or other similar extinguishment of the rights under an Assigned Contract, other than any amounts payable with respect to periods prior to any such termination, de-conversion or extinguishment or any other similar amount.

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“$” means United States dollars.

1.2 Other Defined Terms. The following terms have the meanings assigned to such terms in the Sections of the Agreement set forth below:

Action	4.9
Agreement	Preamble
Allocation Statement	2.7
Applicable Survival Period	10.1(d)
Assigned Contracts	2.1(a)
Assumed Liabilities	2.3
Backstop Note	3.2(g)
Backstop Note Notice	7.9
Base Run-Rate Revenue	2.6(d)(i)(A)
Bill of Sale and Assignment and Assumption Agreement	3.2(a)
Business	Preamble
Buyer	Preamble
Buyer Closing Certificate	8.3(c)
Buyer Disclosure Schedule	Article V
Buyer Indemnitees	10.2(a)
Buyer Plan	7.4(l)
Buyer Welfare Plan	7.4(m)
Buyer Warranty Losses	10.2(b)
Cash Payment	10.2(c)
Change In Circumstance	2.9
Closing	3.1
Closing Assigned Contracts Schedule	2.9
Closing Other Purchased Assets Schedule	2.10
Closing Date	3.1
Closing Run-Rate Revenue	2.6(d)(i)(B)
Closing Run-Rate Revenue Statement	2.6(d)(i)(C)
COBRA	7.4(i)
Confidentiality Agreement	6.3
Consents	4.3(a)
Conversion Agreement	3.2(h)
Credit Agreement	5.13
DOJ	7.1(a)
Early Termination Amount	2.6(g)
Excluded Assets	2.2
Excluded Contracts	2.9
Excluded Liabilities	2.4
Final Run-Rate Revenue	2.6(d)(i)(D)
FTC	7.1(a)
Independent Expert	2.6(l)
Investment Advisers Act	4.11(g)(i)
Live Date	2.6(d)(i)(E)
Marketing Agreement	3.2(e)

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New Contract	2.9
Non-Revenue Assigned Contract	2.6(e)(i)(A)
Non-Revenue Contract Adjustment Amount	2.6(e)(ii)
Note	2.5(b)
Note Principal True-Up Amount	2.6(j)
Notice of Claim	10.4(a)
Outsourcing Agreement	Preamble
Parent	Preamble
Personal Property	4.6
Plans	4.11(h)
Post-Closing Reference Period	2.6(e)(i)(B)
Post-Closing Run-Rate Revenue	2.6(e)(i)(C)
Post-Closing Run-Rate Revenue Statement	2.6(e)(i)(D)
Post-Closing Tax Period	7.5(b)
Pre-Closing Reduced Revenue Contract Adjustment Amount	2.6(h)
Pre-Closing Tax Period	7.5(b)
Purchase Price	2.5(a)
Purchase Price Adjustment	2.6(a)
Purchased Assets	2.1
PW	Preamble
PW Common Stock	5.10(b)
Reduced Revenue Contract Adjustment Amount	2.6(i)
Regulatory Agreement	4.11(d)
Representatives	6.3
Restricted Contract	2.8(a)
Restricted Contract Amount	2.6(k)
Review Period	2.6(d)(i)(F)
Section 1060 Forms	2.7
Securities Act	4.12(a)
Seller	Preamble
Seller Closing Certificate	8.2(c)
Seller Disclosure Schedule	Article IV
Seller Employees	7.4(f)
Seller Group	4.4(a)
Seller Indemnitees	10.3(a)
Seller Policies and Procedures	4.11(e)
Seller Warranty Losses	10.3(b)
Shares	2.5(b)
Special Seller Correspondent	2.6(f)
Special Seller Correspondent Early Termination Amount	2.6(f)
Stockholder’s and Registration Rights Agreement	3.2(f)
Stub Seller Correspondent	2.6(d)(i)(G)
Stub Seller Correspondent Adjustment Amount	2.6(d)(iv)
Third Amendment	5.13
Third Party Claim	10.4(a)
Third Party Defense	10.4(b)
Third Party Financing	7.9
Transferred Employees	7.4(b)
Transfer Tax	7.5
Working Capital Funding	7.9

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ARTICLE II

PURCHASE AND SALE

2.1 Purchase and Sale of the Purchased Assets. Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, free and clear of Liens except for Permitted Liens, the entire right, title and interest of Seller in only the following assets, properties and rights:

(a) subject to Section 2.8 hereof, all Contracts between Seller and another party (including any Affiliates of Parent other than Seller) for the provision by Seller of services related to the Business listed on Schedule 2.1(a), as such schedule may be updated pursuant to Section 2.9 hereof (the “Assigned Contracts”), and to the extent relating to the Assigned Contracts:

(i) all rights of the Seller in underlying agreements relating to the Assigned Contracts between Seller Correspondents and customers, including any rights of Seller as a third party beneficiary;

(ii) all account records of Seller Correspondents including all intangible rights relating to such account records, including telephone, telecopy and e-mail addresses and listings;

(iii) all data and Records of Seller and Seller Correspondents related to any accounts transferred, including client and customer lists and Records, referral sources, research and development reports and Records, financial and accounting Records, reports, correspondence and other similar documents;

(iv) all rights to security or other deposits from any Seller Correspondents and rights and Liens thereof;

(b) all data and Records related to the employee and personnel Records of any Transferred Employees;

(c) all balances and positions associated with any Assigned Contract other than such balances and positions not accepted by PW;

(d) all rights of Seller to indemnification with respect to the Purchased Assets to the extent permitted under the Contract or Contracts pursuant to which such indemnification rights arise; and

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(e) all other assets, properties and rights expressly listed on Schedule 2.1(e), as such schedule may be updated pursuant to Section 2.10 hereof (the assets described in Sections 2.1(a) through (e), collectively, the “Purchased Assets”).

2.2 Excluded Assets. For the avoidance of doubt, the Purchased Assets do not include, and Seller is not selling, assigning, transferring, conveying or delivering, and Buyer is not purchasing, acquiring or accepting from Seller, any assets, properties and rights not expressly set forth in Section 2.1 (collectively, the “Excluded Assets”).

2.3 Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, including without limitation Section 2.8 hereof, Buyer shall assume effective as of the Closing, and from and after the Closing, Buyer shall pay, discharge or perform when due, as appropriate, only the Liabilities in respect of the Assigned Contracts but only to the extent that such Liabilities thereunder are required to be performed after the Closing Date, were incurred in the ordinary course of the business relating to the Assigned Contracts and do not relate to any actual or alleged failure to perform, improper performance, warranty or other breach, default or violation by Seller on or prior to the Closing (the “Assumed Liabilities”), and no other Liabilities.

2.4 Excluded Liabilities. Neither Buyer nor any of its Affiliates shall assume any Liabilities of Seller (such unassumed Liabilities, the “Excluded Liabilities”) other than those specifically set forth in Section 2.3. Without limiting the generality of the foregoing, in no event shall Buyer or any of its Affiliates assume or incur any Liability in respect of, and Seller shall remain bound by and liable for, and shall pay, discharge or perform when due, the following Liabilities of Seller:

(a) all Liabilities under any Assigned Contract that arise after the Closing Date but that arise out of or relate to any failure to perform, improper performance, warranty or other breach, default or violation that occurred on or prior to the Closing Date, including any failure to comply with or any violation of any Law by Seller or its Affiliates;

(b) all Liabilities for Taxes of the Seller (including, for the avoidance of doubt, any Taxes of Affiliates of the Seller for which the Seller is liable pursuant to Treasury Regulation Section 1.1502-6 or any similar provision of state, local or non-U.S. Law) including (i) any Taxes of the Seller arising as a result of Seller’s operation of its business or ownership of the Purchased Assets on or prior to the Closing Date, (ii) any Taxes of the Seller that will arise as a result of the sale and transfer of the Purchased Assets pursuant to this Agreement (other than any such Taxes as Buyer has agreed to bear as provided in Section 7.5(a)), and (iii) any deferred Taxes of any nature;

(c) all Liabilities of Seller under the Seller Benefit Plans or relating to payroll, vacation, sick leave, workers’ compensation, unemployment benefits, pension benefits, employee stock option or profit-sharing plans, health care plans or benefits or any other employee plans or benefits of any kind for Seller’s employees or former employees or both; and

(d) all Liabilities of Seller under any employment, severance, retention or termination agreement with any employee of Seller or any of its Affiliates.

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2.5 Purchase Price.

(a) The consideration to be paid by Buyer to Seller or an Affiliate of Seller for the Purchased Assets shall be, (i) subject to adjustment as set forth in Sections 2.6 and Article X hereof, the product of nine-tenths (0.9) times the aggregate Run-Rate Revenues based upon the Assigned Contracts (other than Restricted Contracts) listed in the Closing Assigned Contracts Schedule (as estimated as of the Closing Date as provided in Section 2.9 and subject to adjustment as set forth in Section 2.6 to reflect actual Run-Rate Revenues as of the Closing and the Run-Rate Revenues of Restricted Contracts assigned after the Closing pursuant to Section 2.8), and (ii) the assumption of the Assumed Liabilities (the “Purchase Price”).

(b) The Purchase Price shall be paid to Seller or an Affiliate of Seller as follows:

(i) delivery to Seller or an Affiliate of Seller of an unsecured promissory note in the form attached hereto as Exhibit B (the “Note”), having a principal face amount equal to (x) the Purchase Price, less (y) the Aggregate Share Value; and

(ii) the lesser of (x) the number of shares of PW Common Stock equal to the quotient of one third of the Purchase Price (based upon the Closing Assigned Contracts Schedule delivered at the Closing) divided by the Measurement Price, (y) such number of shares of PW Common Stock as would constitute 9.9% of the issued and outstanding shares of PW as of the close of business on the Business Day immediately preceding the Closing Date, as adjusted to give effect to such issuance to Seller or an Affiliate of Seller and (z) 2,517,451 shares of PW Common Stock (the “Shares”).

2.6 Purchase Price Adjustments.

(a) The Purchase Price shall be adjusted by an amount equal to nine-tenths (0.9) times the amount (which may be negative) of each of the following amounts set forth in (i) – (viii) below. Each such adjustment shall be referred to as a “Purchase Price Adjustment.”

(i) The Non-Revenue Contract Adjustment Amount (as defined in Section 2.6(e) below).

(ii) the Stub Seller Correspondent Adjustment Amount (as defined in Section 2.6(d) below), whether the Stub Seller Correspondent Adjustment Amount is a positive or negative number;

(iii) any Special Seller Correspondent Early Termination Amount (as defined in Section 2.6(f) below);

(iv) any Early Termination Amount (as defined in Section 2.6(g) below);

(v) any Pre-Closing Reduced Revenue Contract Adjustment Amount (as defined in Section 2.6(h) below);

(vi) any Reduced Revenue Contract Adjustment Amount (as defined in Section 2.6(i) below);

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(vii) any Note Principal True-Up Amount (as defined in Section 2.6(j) below); and

(viii) any Restricted Contract Amount (as defined in Section 2.6(k) below).

(b) If the Purchase Price Adjustment is positive, the Purchase Price shall be increased by the absolute value of the Purchase Price Adjustment. If the Purchase Price Adjustment is negative, the Purchase Price shall be reduced by the absolute value of the Purchase Price Adjustment.

(c) Any Purchase Price Adjustment required to be made pursuant to Section 2.6(b) shall be recorded on the Note by Seller as an adjustment to the principal amount of the Note (i) promptly following the final determination of the Pre-Closing Reduced Revenue Contract Adjustment and the Note Principal True-Up Amount, (ii) on the date occurring 14 months after the Closing Date for any other adjustment that has been finally determined pursuant to this Section 2.6 by such date, (iii) on the date occurring 19 months after the Closing Date for any adjustment that has been finally determined pursuant to this Section 2.6 by such date and not previously reflected on the Note, (iv) promptly after the final determination of any Purchase Price Adjustments for which Notices of Objection were delivered and which were not previously reflected on the Note pursuant to clauses (i), (ii) or (iii) above; and (v) at such other times as may be mutually agreed by PW and Parent. A copy thereof reflecting the recording of any such adjustment will be promptly delivered to Buyer, provided, that the failure to do so will not affect the validity of any adjustment made in accordance with the provisions of this Agreement or the Note.

(d) The Stub Seller Correspondent Adjustment Amount shall be calculated as follows:

(i) For purposes of this Section 2.6, the following terms shall have the meanings assigned to them in this Section 2.6(d)(i):

(A) “Base Run-Rate Revenue” means the aggregate Run-Rate Revenue for all Stub Seller Correspondents as of the Closing Date.

(B) “Closing Run-Rate Revenue” means the annualized aggregate amount of Net Revenue for each Assigned Contract included in the Base Run-Rate Revenue during the six month period beginning on the later of the Live Date and the Closing Date;

(C) “Closing Run-Rate Revenue Statement” means an unaudited statement of Closing Run-Rate Revenue that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and containing reasonable detail showing how the amount or amounts set forth therein were calculated.

(D) “Final Run-Rate Revenue” means the Closing Run-Rate Revenue (x) as shown in the Closing Run-Rate Revenue Statement delivered by Buyer to Seller

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pursuant to Section 2.6(d)(ii), if no Notice of Objection with respect thereto is timely delivered by Seller to Buyer pursuant to Section 2.6(d)(iii); or (y) if a Notice of Objection is so delivered, (1) as agreed by Buyer and Seller pursuant to Section 2.6(m) or (2) in the absence of such agreement, as shown in the Independent Expert’s calculation delivered pursuant to Section 2.6(m).

(E) “Live Date” means, with respect to a Seller Correspondent, the first date, if any, on or within 6 months after the Closing Date on which live execution of trades occurs with Buyer being the clearing and settlement broker of record (excluding beta testing).

(F) “Review Period” means the period 30 days from receipt by Seller of, as applicable, the Closing Run-Rate Revenue Statement, the Post-Closing Run-Rate Revenue Statement, or statements setting forth any Special Seller Correspondent Early Termination Amount, Early Termination Amount, Reduced Revenue Contract Adjustment Amount, Note Principal True-Up Amount or Restricted Contract Amount, in each case, containing information with respect to all adjustments, in their entirety, to be considered, as required by Section 2.6.

(G) “Stub Seller Correspondent” means a Seller Correspondent that has been a party to an Assigned Contract and for which Seller has recognized Net Revenue for at least one, but fewer than six, full calendar months as of the Closing Date.

(ii) Within thirteen (13) months but no earlier than twelve (12) months after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller the Closing Run-Rate Revenue Statement which shall set forth in reasonable detail Buyer’s calculation of the Closing Run-Rate Revenue.

(iii) If Seller disagrees with Buyer’s computation of Closing Run-Rate Revenue, Seller may, on or prior to the last day of the Review Period with respect to the Closing Run-Rate Revenue Statement, deliver a Notice of Objection to Buyer.

(iv) The amount equal to the difference of the Final Run-Rate Revenue minus the Base Run-Rate Revenue shall be referred to as the “Stub Seller Correspondent Adjustment Amount.”

(e) The Non-Revenue Contract Adjustment Amount shall be calculated as follows:

(i) For purposes of this Section 2.6, the following terms shall have the meanings assigned to them in this Section 2.6(e)(i):

(A) “Non-Revenue Assigned Contract” means any Assigned Contract that was entered into on or prior to the Closing Date, but pursuant to which Seller had not recognized at least one full calendar month of Net Revenue related to a Seller Correspondent on or prior to the Closing Date.

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(B) “Post-Closing Reference Period” means a period of six (6) full calendar months beginning with the third full calendar month immediately after the later of the Live Date and the Closing Date.

(C) “Post-Closing Run-Rate Revenue” means the Net Revenue recognized from any Seller Correspondent with respect to a Non-Revenue Assigned Contract during the Post-Closing Reference Period multiplied by two (2).

(D) “Post-Closing Run-Rate Revenue Statement” means an unaudited statement of Post-Closing Run-Rate Revenue that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and containing reasonable detail showing how the amount or amounts set forth therein were calculated.

(ii) Within sixteen (16) months but no earlier than fifteen (15) months following the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller the Post-Closing Run-Rate Revenue Statement for all Non-Revenue Assigned Contracts if any Net Revenue was recognized from Seller Correspondents during the six-month period immediately after the Live Date. The Post-Closing Run-Rate Revenue Statement shall set forth in reasonable detail Buyer’s calculation of the Post-Closing Run-Rate Revenue for each such Non-Revenue Assigned Contract. The amount equal to the aggregate Post-Closing Run-Rate Revenue shall be referred to as “Non-Revenue Contract Adjustment Amount.”

(iii) If Seller disagrees with Buyer’s computation of Post-Closing Run-Rate Revenue, Seller may, on or prior to the last day of the Review Period with respect to the Post-Closing Run-Rate Revenue Statement, deliver a Notice of Objection to Buyer.

(f) If, at any time prior to the date occurring twelve (12) full calendar months following the later of the Live Date and the Closing Date, (i) any Assigned Contract with a Special Seller Correspondent is terminated by such Special Seller Correspondent earlier than the stated term contained in such Assigned Contract, (ii) any Assigned Contract with a Special Seller Correspondent is not renewed by such Special Seller Correspondent following the expiration of the term of such Assigned Contract or (iii) any Governmental Entity or SRO requires any Assigned Contract with a Special Seller Correspondent to be terminated, then the negative of the amount equal to the absolute value of the Run-Rate Revenue attributable to each such Assigned Contract shall collectively be referred to as the “Special Seller Correspondent Early Termination Amount.” For purposes of this Section 2.6(f), a “Special Seller Correspondent” means a Seller Correspondent that has been responsible for more than five percent (5%) of the aggregate Run-Rate Revenue recognized by the Seller, as reflected in the Closing Assigned Contracts Schedule. Within nineteen (19) months after the Closing Date but no earlier than eighteen (18) months, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and which shall set forth in reasonable detail any Special Seller Correspondent Early Termination Amount. If Seller disagrees with Buyer’s computation of the Special Seller Correspondent Early Termination Amount, Seller may, on or prior to the last day of the Review Period with respect to the statement setting forth the Special Seller Correspondent Early Termination Amount, deliver a Notice of Objection to Buyer.

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(g) If, at any time prior to the date occurring six (6) full calendar months following the later of the Live Date and the Closing Date, (i) any Assigned Contract is terminated earlier than the stated term contained in such Assigned Contract by a Seller Correspondent, (ii) any Assigned Contract is not renewed by a Seller Correspondent following the expiration of the term of such Assigned Contract or (iii) any Governmental Entity or SRO requires any Assigned Contract with a Seller Correspondent to be terminated, then the negative of the amount equal to the Run-Rate Revenue, the Final Run-Rate Revenue or the Post-Closing Run-Rate Revenue, as applicable, attributable to all such Assigned Contract shall collectively be referred to as the “Early Termination Amount.” Within thirteen (13) months but no earlier than twelve (12) months after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and which shall set forth in reasonable detail any Early Termination Amount. If Seller disagrees with Buyer’s computation of the Early Termination Amount, Seller may, on or prior to the last day of the Review Period with respect to the statement setting forth the Early Termination Amount, deliver a Notice of Objection to Buyer.

(h) If at any time on or following the date of this Agreement and prior to the Closing Date, Seller and any Seller Correspondent implement a reduction in the price of the securities clearing or execution services provided under an Assigned Contract, then the amount equal to the difference between the Run-Rate Revenue as of the date of this Agreement, adjusted to reflect the reduced pricing terms of each such Assigned Contracts and the Run-Rate Revenue as of the Closing Date attributable to each such Assigned Contract shall collectively and in the aggregate be referred to as the “Pre-Closing Reduced Revenue Contract Adjustment Amount.” Within 60 days following the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and setting forth in reasonable detail Buyer’s calculation of the Pre-Closing Reduced Revenue Contract Adjustment Amount. If Seller disagrees with Buyer’s computation of the Pre-Closing Reduced Revenue Contract Adjustment Amount, Seller may, on or prior to the last day of the Review Period with respect to a statement setting forth the Pre-Closing Reduced Revenue Contract Adjustment Amount, deliver a Notice of Objection to Buyer.

(i) If, at any time prior to twelve (12) months (in the case of any Special Seller Correspondent), or six (6) months (in the case of any other Seller Correspondent that is not a Special Seller Correspondent), following the later of the Live Date or the Closing Date, Buyer and any Seller Correspondent or Special Seller Correspondent, as applicable, implement a reduction in the price of the securities clearing and execution services provided under an Assigned Contract, then the amount equal to the difference between the Run-Rate Revenue, the Final Run-Rate Revenue or the Post-Closing Run-Rate Revenue, as applicable, adjusted to reflect the reduced pricing terms of each such Assigned Contracts and the Run-Rate Revenue, the Final Run-Rate Revenue or Post-Closing Run-Rate Revenue attributable to such Assigned Contract shall collectively and in the aggregate be referred to as the “Reduced Revenue Contract Adjustment Amount.” Within thirteen (13) months but no earlier than twelve (12) months after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and which shall set forth in reasonable detail any Reduced

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Revenue Contract Adjustment Amount with respect to Seller Correspondents that are not Special Seller Correspondents. Within nineteen (19) months after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP and which shall set forth in reasonable detail any Reduced Revenue Contract Adjustment Amount with respect to Special Seller Correspondents. If Seller disagrees with Buyer’s computation of the Reduced Revenue Contract Adjustment Amount, Seller may, on or prior to the last day of the Review Period with respect to a statement setting forth the Reduced Revenue Contract Adjustment Amount, deliver a Notice of Objection to Buyer.

(j) The Note Principal True-Up Amount shall be calculated as follows:

(i) Within 60 days following the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP setting forth in reasonable detail Buyer’s calculation of the aggregate Run-Rate Revenue for all Assigned Contracts as of the Closing. The difference between the actual Run-Rate Revenue as of the Closing and the estimated Run-Rate Revenue as set forth in Schedule 2.1(a) at the Closing shall be referred to as “Note Principal True-Up Amount.”

(ii) If Seller disagrees with Buyer’s computation of the Note Principal True-Up Amount, Seller may, on or prior to the last day of the Review Period with respect to the Note Principal True-Up Amount, deliver a Notice of Objection to Buyer.

(k) The Restricted Contract Amount shall be calculated as follows:

(i) Within 120 days following the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement that is prepared in a manner consistent with Seller’s past practice and based upon statements that were prepared in accordance with GAAP setting forth in reasonable detail Buyer’s calculation of the aggregate Run-Rate Revenues for all Restricted Contracts transferred to Buyer pursuant to Section 2.8 within ninety (90) days following the Closing Date. The aggregate Run-Rate Revenues for all such Restricted Contracts transferred to Buyer pursuant to Section 2.8 shall be referred to as the “Restricted Contract Amount.”

(ii) If Seller disagrees with Buyer’s computation of the Restricted Contract Amount, Seller may, on or prior to the last day of the Review Period with respect to the Restricted Contract Amount, deliver a Notice of Objection to Buyer.

(l) Any rights accruing to a party under this Section 2.6 shall be in addition to and independent of the rights to indemnification under Article X and any payments made to any party under this Section 2.6 shall not be subject to the terms of Article X.

(m) For all proposed adjustments to the Purchase Price under this Section 2.6, unless Seller delivers the Notice of Objection to Buyer within the Review Period for each such adjustment, Seller shall be deemed to have accepted Buyer’s calculation, and Buyer’s calculation shall be final, conclusive and binding. If Seller delivers the Notice of Objection to Buyer within the Review Period, Buyer and Seller shall, during the 30 days following such delivery or any

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mutually agreed extension thereof, use their commercially reasonable efforts to reach agreement on the disputed items and amounts in order to determine the amount in dispute. If, at the end of such period or any mutually agreed extension thereof, Buyer and Seller are unable to resolve their disagreements, they shall jointly retain and refer their disagreements to a nationally recognized independent accounting firm mutually acceptable to Buyer and Seller (an “Independent Expert”). The parties shall instruct the Independent Expert promptly to review this Agreement and to determine solely with respect to the disputed items and amounts so submitted whether and to what extent, if any, Buyer’s proposed adjustment should be changed or modified. The Independent Expert shall act as an expert and not an arbitrator or mediator and shall base its determination solely on written submissions by Buyer and Seller and not on an independent review. Buyer and Seller shall make available to the Independent Expert all relevant Books and Records and other items reasonably requested by the Independent Expert. The parties shall request that the Independent Expert deliver to Buyer and Seller, as promptly as practicable but in no event later than 45 days after its retention, a report which sets forth its resolution of the disputed items and amounts and its calculation of the relevant adjustment; provided that in no event shall the Independent Expert’s determination of the adjustment be more than Buyer’s calculation nor less than Seller’s calculation as set forth in the Notice of Objection. The decision of the Independent Expert shall be final, conclusive and binding on the parties. The costs and expenses of the Independent Expert shall be split equally between Buyer and Seller. Each party agrees to execute, if requested by the Independent Expert, a reasonable engagement letter, including a confidentiality provision and customary indemnities in favor of the Independent Expert.

2.7 Allocation.

(a) As soon as reasonably practicable, but in no event later than 120 days following the Closing, Buyer shall deliver to Seller a draft allocation statement setting forth Buyer’s proposed allocation of the Purchase Price for Tax purposes, which shall be subject to the consent of Seller (not to be unreasonably withheld) (such draft allocation statement, once agreed to by both parties or resolved by an Independent Expert (as described below), the “Allocation Statement”). If the parties are unable to resolve any disagreement regarding the draft allocation statement within forty-five (45) days of Seller’s receipt thereof, such dispute shall be resolved by an Independent Expert in the manner provided in Section 2.6(m).

(b) In the event that the Purchase Price is subsequently adjusted pursuant to Section 2.6, Buyer shall deliver to Seller a revised Allocation Statement (that is consistent with the agreed methodology reflected in the original allocation Statement) as soon as reasonably practicable following the date of such adjustment.

(c) Except as otherwise required by Law, Buyer and Seller shall, and shall cause each of their Affiliates to, file all Tax Returns (such as IRS Form 8594 or any other forms or reports required to be filed pursuant to Section 1060 of the Code or any comparable provisions of Law (“Section 1060 Forms”)) in a manner that is consistent with the Allocation Statement and refrain from taking any action inconsistent therewith. Buyer and Seller shall, and shall cause their respective Affiliates to, cooperate in the preparation of Section 1060 Forms and file such Section 1060 Forms timely and in the manner required by Applicable Law.

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2.8 Consents.

(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to sell, assign, transfer, convey or deliver any Purchased Asset or any benefit arising under or resulting from such Purchased Asset if the sale, assignment, transfer, conveyance or delivery thereof, without the Consent of a third party, (i) would constitute a breach or other contravention of the rights of such third party, (ii) would be ineffective with respect to any party to a Contract concerning such Purchased Asset, (iii) would breach any restriction imposed by any Governmental Entity on the assignment of the Purchased Asset in question, or (iv) would, upon transfer, in any way adversely affect the rights of Buyer under such Purchased Asset. If the sale, assignment, transfer, conveyance or delivery by Seller to, or any assumption by Buyer of, any interest in, or Liability under, any Purchased Asset requires the Consent of a third party, then such sale, assignment, transfer, conveyance, delivery or assumption shall be subject to such Consent being obtained. Without limiting Section 2.8(b), to the extent any Assigned Contract may not be assigned to Buyer by reason of the absence of any such Consent (“Restricted Contract”), Buyer shall not be required to assume any Assumed Liabilities arising under such Restricted Contract.

(b) To the extent that any Consent in respect of a Restricted Contract or any other Purchased Asset shall not have been obtained on or before the Closing Date, Seller shall continue to use commercially reasonable efforts to obtain any such Consent after the Closing Date until the expiration of the time period set forth in paragraph (c) below, provided that use of commercially reasonable efforts shall not require payment of any fee in connection therewith. Seller shall cooperate with Buyer in any economically feasible arrangement proposed by Buyer to provide that Buyer shall receive the interest of Seller in the benefits under such Restricted Contract or other Purchased Asset. Seller shall pay and discharge, and shall indemnify and hold harmless, Buyer and its Affiliates from and against any and all out-of-pocket costs of seeking to obtain or obtaining any such Consent whether before or after the Closing Date. As soon as a Consent for the sale, assignment, transfer, conveyance, delivery or assumption of a Restricted Contract or other Purchased Asset is obtained, Seller shall promptly assign, transfer, convey and deliver such Restricted Contract or Purchased Asset to Buyer, and Buyer shall, subject to agreement on the Run-Rate Revenues as set forth in the following sentence, assume the Assumed Liabilities under any such Restricted Contract from and after the date of assignment to Buyer pursuant to a special-purpose assignment and assumption agreement substantially similar in terms to those of the Bill of Sale and Assignment and Assumption Agreement. Buyer and Seller shall negotiate in good faith on similar terms as the Assigned Contracts to determine the Run-Rate Revenues for any Restricted Contract for which Seller has received consent pursuant to this Section 2.8.

(c) To the extent that any Consent in respect of a Restricted Contract or any other Purchased Asset shall not have been obtained within 90 days of the Closing Date despite the reasonable efforts of Seller, Seller shall as soon as reasonably practicable terminate such Restricted Contracts following the written request of Buyer.

2.9 Closing Assigned Contracts. Within ten (10) Business Days after the date hereof, Buyer shall prepare and deliver a list of Assigned Contracts included in Schedule 2.1(a) that shall be excluded from the Closing Assigned Contracts Schedule (as defined below) and not assigned to Buyer at the Closing (the “Excluded Contracts”). At least ten (10) Business Days prior to the Closing, Seller shall prepare, and deliver to Buyer, a proposed update to Schedule 2.1(a) as of

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the Closing Date (the “Closing Assigned Contracts Schedule”), which update shall include all Assigned Contracts included in Schedule 2.1(a) other than the Excluded Contracts and any and all Contracts between Seller and another party for the provision by Seller of services related to the Business entered into after the date hereof (each such Contract, a “New Contract”) and the Net Revenue and Run-Rate Revenue with respect to each listed Contract as of the last day of the month prior to the month of the Closing. Buyer, in its sole discretion, may prior to Closing cause to be excluded from the Closing Assigned Contracts Schedule (i) any New Contract and (ii) any Assigned Contract included by Seller in its proposed Schedule 2.1(a) with a third party that has, in Buyer’s reasonable judgment, suffered a Change In Circumstance. The Assigned Contracts listed in the Closing Assigned Contracts Schedule as determined pursuant to the preceding provisions shall constitute Schedule 2.1(a) as of the Closing. “Change In Circumstance” as used herein means the bankruptcy, insolvency or liquidation of such third party, or any material adverse change in the business of such third party or its relationship with Seller or Buyer.

2.10 Closing Other Purchased Assets. Buyer, in its sole discretion, may prior to Closing cause to be excluded from Schedule 2.1(e) any item set forth therein as of the date hereof. Schedule 2.1(e) as determined pursuant to the preceding provision shall be referred to as the “Closing Other Purchased Assets Schedule” and shall constitute Schedule 2.1(e) as of the Closing.

ARTICLE III

CLOSING

3.1 Closing Date. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Morgan, Lewis & Bockius LLP, on the earlier to occur of (i) the first Business Day of the week, and (ii) the last Business Day of the calendar month, that, in each case, occurs at least four (4) Business Days after satisfaction (or waiver as provided herein) of the conditions set forth in Article VIII (other than those conditions that by their nature will be satisfied at the Closing) has occurred, provided, that if the foregoing would cause the Closing to occur on the last day of a fiscal quarter of PW or Parent, the Closing shall occur on the first Business Day of the week following such quarter-end date, unless another time, date and/or place is agreed to in writing by the parties. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.”

3.2 Deliveries by Seller at the Closing. At the Closing, Seller shall deliver to Buyer the following:

(a) the Note duly executed by Seller or an Affiliate of Seller designated by Seller;

(b) a Bill of Sale and Assignment and Assumption Agreement in the form of Exhibit C hereto (the “Bill of Sale and Assignment and Assumption Agreement”) duly executed by Seller;

(c) a Joint Selling Agreement in the form of Exhibit D hereto (the “Selling Agreement”) duly executed by Parent;

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(d) a Stockholder’s and Registration Rights Agreement in the form of Exhibit E hereto (the “Stockholder’s and Registration Rights Agreement”) duly executed by Seller or an Affiliate of Seller;

(e) a Backstop Note in the form of Exhibit F hereto (the “Backstop Note”) duly executed by Seller, if a Backstop Note Notice has been delivered in accordance with Section 7.9;

(f) a Conversion Agreement in a form mutually agreed to by Buyer and Seller (the “Conversion Agreement”) duly executed by Seller at least 30 days prior to the anticipated Closing Date;

(g) the Closing Assigned Contracts Schedule with such modifications as permitted pursuant to Section 2.9;

(h) the Closing Other Purchased Assets Schedule with such modifications as permitted pursuant to Section 2.10;

(i) with respect to the Outsourcing Agreement, completed SOWs, SLAs, schedules, exhibits and annexes thereto relating to the Purchased Assets, each in a form satisfactory to Buyer and prepared in accordance with the Outsourcing Agreement; and

(j) the Seller Closing Certificate; and

(k) such other instruments of transfer as Buyer reasonably deems necessary and appropriate to transfer to Buyer the Purchased Assets.

3.3 Deliveries by Buyer at the Closing. At the Closing, Buyer shall deliver to Seller the following:

(a) a certificate representing the Shares in the name of Seller (or a designated Affiliate of Seller, provided that such Affiliate executes and delivers to Buyer a certificate in which it makes the representations set forth in Section 4.12 hereof);

(b) the Note duly executed by PW;

(c) the Bill of Sale and Assignment and Assumption Agreement duly executed by Buyer;

(d) the Selling Agreement duly executed by PW;

(e) the Stockholder’s and Registration Rights Agreement duly executed by PW;

(f) the Backstop Note duly executed by PW, if a Backstop Note Notice has been delivered in accordance with Section 7.9;

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(g) the Conversion Agreement duly executed by PW at least 30 days prior to the anticipated Closing Date; and

(h) the Buyer Closing Certificate.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER

Parent and Seller, jointly and severally, represent and warrant to Buyer as of the date hereof and as of the Closing Date that the statements contained in this Article IV are true and correct, except as set forth in the disclosure schedule dated and delivered as of the date hereof by Seller to Buyer (the “Seller Disclosure Schedule”), which is attached to this Agreement and is designated therein as being the Seller Disclosure Schedule; it being acknowledged and agreed by PW and Buyer that any matter set forth in any section or subsection of the Seller Disclosure Schedule shall be deemed to be a disclosure for all purposes of this Agreement and all other sections or subsections of the Seller Disclosure Schedule to which such matter could reasonably be expected to be relevant, but shall expressly not be deemed to constitute an admission by Parent or the Seller, or otherwise imply, that any such matter rises to the level of a Seller Material Adverse Effect or is otherwise material for purposes of this Agreement or the Seller Disclosure Schedule.

4.1 Organization and Good Standing. Each of Parent and Seller is a corporation validly existing and in good standing under the Laws of the jurisdiction of its incorporation or formation and in each jurisdiction where it is qualified to do business, has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted and as proposed to be conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property or conducts any business so as to require such qualification except for those jurisdictions where the failure to be so qualified and in good standing could not individually or in the aggregate have a Seller Material Adverse Effect. Seller is not in default under its Charter Documents. Schedule 4.1 of the Seller Disclosure Schedule sets forth each jurisdiction where Seller is qualified to do business or has a business operation.

4.2 Authority and Enforceability. Each of Parent and Seller has the requisite power and authority to enter into this Agreement and each Ancillary Agreement to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Parent and Seller. Each of Parent and Seller has duly executed and delivered this Agreement and the Outsourcing Agreement and will duly execute and deliver each other Ancillary Agreement to which it is a party. Assuming due authorization, execution and delivery by PW and Buyer, as applicable, this Agreement and the Outsourcing Agreement constitute, and each other Ancillary Agreement to which it is a party will constitute, the valid and binding obligation of Parent and Seller, enforceable against them in accordance with their respective terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (ii) the availability of injunctive relief and other equitable remedies. The Ancillary Agreements

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will effectively vest in Buyer good, valid and marketable title to all the Purchased Assets free and clear of all Liens other than Permitted Liens.

4.3 No Conflicts; Consents.

(a) The execution and delivery of this Agreement by each of Parent and Seller do not, and the execution and delivery of each Ancillary Agreement to which it is a party, the performance by Parent and Seller of its obligations hereunder and thereunder and the consummation by Parent and Seller of the transactions contemplated hereby and thereby (in each case, with or without the giving of notice or lapse of time, or both), will not, directly or indirectly, (i) violate the provisions of any of the Charter Documents of Parent or Seller, (ii) except as set forth in Section 4.3(a) of the Seller Disclosure Schedule, violate or constitute a default, an event of default or an event creating rights of acceleration, termination, cancellation, imposition of additional obligations or loss of rights under any Assigned Contract or other material Contract to which Parent, Seller or any of the Purchased Assets are bound and subject, in each case in any material respect, (iii) violate or conflict with any Law, Authorization or Order applicable to Parent or Seller, or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated by this Agreement or the Ancillary Agreements or to exercise any remedy, obtain any relief under or revoke or otherwise modify any rights held under, any such Law, Authorization or Order, in each case in any material respect, or (iv) result in the creation of any Liens upon any of the Purchased Assets. Section 4.3(a) of the Seller Disclosure Schedule sets forth all material consents, waivers, assignments and other approvals and actions that are required in connection with the transactions contemplated by this Agreement under any Assigned Contract (collectively, “Consents”).

(b) No Authorization or Order of, registration, declaration or filing with, or notice to, any Governmental Entity or other Person, is required by or with respect to Parent or Seller in connection with the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby, except for such Authorizations, Consents, registrations, declarations, filings and notices as may be required under the HSR Act and the Other Antitrust Laws or the rules of FINRA or the New York Stock Exchange.

4.4 Taxes.

(a) All material Tax Returns relating to the Business that were required to have been filed by or with respect to Seller or any affiliated, combined, consolidated, unitary or similar group of which Seller is or was a member (the “Seller Group”) have been duly and timely filed taking into account any extensions validly obtained (or, if due between the date hereof and the Closing Date, will be duly and timely filed. All material Taxes relating to the Business that are owed by Seller or any member of the Seller Group (whether or not shown on any Tax Return) have been paid (or, if due between the date hereof and the Closing Date, will be paid prior to the Closing). Seller has, in all material respects, adequately provided for, in its books of account and related Records, Liability for all unpaid Taxes relating to the Business that are not yet due and payable.

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(b) No Purchased Asset is subject to any Liens with respect to any Taxes (other than Permitted Liens).

(c) Seller has complied in all material respects with its Tax information reporting obligations with respect to the Seller Correspondents and each customer thereof.

(d) For the avoidance of doubt, no representation is being made under this Section 4.4 with respect to the tax treatment of the Business for any taxable period (or portion thereof) beginning after the Closing.

4.5 Compliance with Law. Seller has performed, and is performing, its obligations with respect to the Assigned Contracts in compliance in all material respects with all Applicable Laws. Seller has not received written notice regarding any violation of, conflict with, or failure to perform its obligations with respect to the Assigned Contracts in compliance with, any Applicable Law.

4.6 Title to Personal Property. Seller has good title to, or a valid lease, license or right to use, the personal properties and assets (“Personal Property”) included in the Purchased Assets. Such Personal Property owned by Seller is held free and clear of any Liens other than Permitted Liens.

4.7 Absence of Certain Changes or Events. Since June 30, 2009 to the date of this Agreement (with respect to the representation and warranty made as of the date of this Agreement) and to the Closing Date (with respect to the representation and warranty made as of the Closing Date):

(a) there has not been any Seller Material Adverse Effect;

(b) Seller has not mortgaged, pledged or subjected to Liens any of the Purchased Assets (other than in connection with hypothecations or stock loans entered in the ordinary course of the Business consistent with past practice) except for Permitted Liens;

(c) Seller has not entered into, amended, modified, canceled or waived any rights under, any Assigned Contract and no Assigned Contract has been terminated or cancelled;

(d) Except for the execution of this Agreement and any action specifically contemplated herein, Seller and its Affiliates have not taken any action with respect to the Business outside the ordinary course of business; and

(e) Seller has not agreed, whether in writing or otherwise, to do any of the foregoing.

4.8 Contracts. Each Assigned Contract is valid, in full force and effect and enforceable in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (ii) the availability of injunctive relief and other equitable remedies. Except as set forth in Section 4.8 of the Seller Disclosure Schedule, (x) Seller has not received any written notice of any default under any Assigned Contract and (y) to the Knowledge of Seller, no

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event has occurred or circumstance exists (with or without notice or lapse of time or both) that may contravene, conflict with or result in a violation or breach of, or give any Person other than Seller the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Assigned Contract. Section 4.8 of the Seller Disclosure Schedule sets forth all obligations of Seller to repay, refund or otherwise share any revenues under any Assigned Contract or to make any advance, loan or investment in any Seller Correspondent. Except as set forth in Section 4.8 of the Seller Disclosure Schedule, no Assigned Contract provides for any Liability of Seller or a Seller Affiliate outside the ordinary course of business or provides for any incentive or performance payments to be paid following the Closing Date. Seller has provided Buyer with a true, correct and complete copy of each Assigned Contract, and there is no side agreement or other understanding with any Seller Correspondent modifying the terms of such agreements.

4.9 Litigation. Except as set forth in Section 4.9 of the Seller Disclosure Schedule, there is no material action, suit or proceeding, claim, arbitration, litigation or investigation (each, an “Action”), in each case related to the Purchased Assets, (i) pending or, to Seller’s Knowledge, threatened against or affecting Seller or the Purchased Assets, or (ii) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement or the Ancillary Agreements.

4.10 Customers.

(a) Seller has provided to Buyer a list of all correspondents of Seller and provided true, correct and complete copies of all clearing agreements and other customer agreements between Seller and such persons. As of the date hereof, Seller has not received any notice nor has, to the Knowledge of Seller, any reason to believe that any Seller Correspondent has ceased, or will cease, to use the products or services of Seller, or has substantially reduced or will substantially reduce the use of such products or services at any time other than as a result of general market conditions. Seller has provided Buyer with a complete list of all loans, advances or other investments in any Seller Correspondent (including details of the date, amount, nature and principal terms thereof).

(b) Seller has in its possession or has rights of access to the valid, binding and enforceable documentation necessary to maintain each introducing firm account and to perform brokerage and related services for its customers, in a manner consistent with the activities of such customers and Applicable Law.

(c) Each transaction effected by Seller in an account on behalf of an introducing firm was performed in a manner not inconsistent with the terms of the customer agreement or other documentation and in accordance with Applicable Law.

4.11 Broker-Dealer.

(a) Seller is, and at all times since November 1, 2004 has been, duly and validly registered as a broker-dealer with the SEC. Seller is duly qualified and validly registered as a (i) member of FINRA and (ii) member or member organization of each other SRO of which it is required to be a member. Section 4.11(a) of the Seller Disclosure Schedule sets forth a complete

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list of each jurisdiction, exchange and SRO in which Seller is duly qualified or registered as a broker-dealer or of which it is a member. Except as set forth on Schedule 4.11(a) of the Seller Disclosure Schedule, Seller is not, and at no time since November 1, 2004 has it been, required to obtain any registration as a broker dealer, member or member organization of a registered clearing agency or other SRO that has not been properly and timely obtained that would have an adverse effect in any material respect.

(b) Seller has not exceeded in any material respect the business activities enumerated in any membership agreements or other limitations imposed in connection with its registrations, forms (including Form BDs) and reports filed with FINRA or any Governmental Entity. Seller has filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that it was required to file with any Governmental Entity in connection with the Purchased Assets and Seller has paid all fees and assessments due and payable in connection therewith. The information contained in such registrations, forms and reports was true and complete in all material respects as of the date of the filing thereof. Each such registration is in full force and effect on the date hereof. Except for normal examinations conducted by the SEC or an SRO in the regular course of the business of Seller, no SRO has initiated any proceeding or investigation into the business or operations of Seller or any of its employees, agents, brokers or representatives relating to the Purchased Assets. There is no unresolved violation or exception by any SRO with respect to any report or statement relating to any examination of Seller in connection with the Purchased Assets.

(c) To the Knowledge of Seller, each of Seller’s employees that is required to be registered or licensed as a registered principal, registered representative or a salesperson with the SEC, the securities commission of any state or foreign jurisdiction or any SRO is duly registered or licensed to act in their respective capacities, and all such registrations and licenses are in full force and effect. All federal, state and foreign registration requirements have been complied with in all respects and such registrations as currently filed, and all periodic reports required to be filed with respect thereto, are accurate and complete in all respects.

(d) Seller is not subject to any cease-and-desist or other order or enforcement action issued by, or a party to any written agreement, consent agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, any regulatory authority or other Governmental Entity that restricts the conduct of its business related to the Purchased Assets, except any proceeding or investigation that would not have a Seller Material Adverse Effect (each, a “Regulatory Agreement”), nor has Seller or any of its Affiliates, with respect to the Business, been advised in writing or otherwise by any regulatory authority or Governmental Entity that it is considering issuing or requesting any such Regulatory Agreement.

(e) Seller (i) has implemented policies and procedures that are reasonably designed to comply with the applicable federal and state securities Laws, including those relating to anti-money laundering, advertising, licensing, sales practices, market conduct, maintenance of net capital, risk assessment and continuing education and the rules of any SRO having jurisdiction (collectively, the “Seller Policies and Procedures”) and (ii) Seller has no Knowledge of any material noncompliance with the Seller Policies and Procedures.

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(f) None of the activities of Seller requires it to be registered as an exchange or transfer agent, a government securities dealer, a commodity trading advisor or commodity pool operator.

(g) To the Knowledge of Seller, no Transferred Employee is or has been (as applicable):

(i) subject to a statutory disqualification specified in Section 3(a)(39) of the Exchange Act, Sections 203(e) or (f) of the Investment Advisers Act of 1940, as amended, from time to time (the “Investment Advisers Act”), or any substantially equivalent foreign Law (i) expulsion or suspension from membership, (ii) bar or suspension from association, (iii) denial of trading privileges, (iv) order denying, suspending, or revoking registration or barring or suspending association or (v) finding with respect to causing any such effective foreign suspension, expulsion or order;

(ii) convicted of any foreign offense, enjoined from any foreign act, conduct or practice, or found to have committed any foreign act substantially equivalent to any of those listed in Sections 15(b)(4)(B), (C), (D) or (E) of the Exchange Act; and

(iii) found to have made or caused to be made any false foreign statement or omission substantially equivalent to any of those listed in Section 3(a)(39)(E) of the Exchange Act.

(h) Seller has made available to Buyer true, correct and complete copies of each form of retirement plan or account, including individual retirement accounts under Section 408 or 408A of the Code, education retirement accounts under Section 530 of the Code, custodial account agreements under Section 403(b) of the Code, simplified employee pension plans under Section 408(k) of the Code or plans intended to be qualified under Section 401(a) of the Code and forms of other related agreements or materials currently provided to or made available to customers (collectively, the “Plans”) that is an Assigned Contract with respect to which Seller act as a custodian, trustee and/or prototype sponsor. Seller has not entered into any transaction with regard to such Plans, or any other retirement account or plan for which Seller provides services, that could result in a non-exempt transaction prohibited under Section 406 of ERISA or on which an excise tax would be payable under Section 4975 of the Code which in either case would reasonably be expected to result in a material adverse effect.

(i) Seller does not serve and has never served as a custodian, trustee and/or prototype sponsor for any retirement plan or account, including individual retirement accounts under Section 408 or 408A of the Code, simplified employee pension plans under Section 408(k) of the Code, education retirement accounts under Section 530 of the Code, custodial account agreements under Section 403(b) of the Code or plans intended to be qualified under Section 401(a) of the Code.

(j) Except as would not reasonably be expected to result in a Seller Material Adverse Effect, with respect to each Assigned Contract that is a retirement account or plan (including individual retirement accounts, 403(b) custodial agreements, simplified employee pension plans under Section 408(k) of the Code and plans intended to be qualified under Section

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401(a) of the Code) as to which Seller acts as a custodian, trustee and/or prototype sponsor, the form of such retirement accounts and plans and the conduct of Seller and its Affiliates with respect to such retirement accounts and plans have been and are in compliance with all Laws, including ERISA and the Code, to the extent applicable, and Seller has not incurred and is not reasonably expected to incur any liability under either ERISA or the Code relating to such retirement accounts or with respect to any other retirement account or plan for which Seller provides services which would reasonably be expected to result in a Seller Material Adverse Effect.

(k) Except as disclosed in writing to Buyer, to the extent applicable, Seller and its Affiliates have obtained a favorable opinion letter from the IRS on changes to the Code and Treasury regulations, including those made by the Economic Growth and Tax Relief Reconciliation Act of 2001 (or filed by applicable deadlines imposed by the IRS and are awaiting receipt of such opinion letter) and all prior legislation with respect to each Assigned Contract that is a retirement account described in subsection (k) above for which Seller or any of its Affiliates serve as a prototype sponsor. No event has occurred that would be reasonably likely to negatively impact reliance on such opinion letter.

(l) There are no investigations by any Governmental Entity or other claims, suits or proceedings pending or, to the Knowledge of Seller, threatened against Seller or any of its Affiliates with respect to any retirement account or plan (including individual retirement accounts, 403(b) custodial agreements, simplified employee pension plans under Section 408(k) of the Code and plans intended to be qualified under Section 401(a) of the Code) as to which Seller provides services and/or which is an Assigned Contract with respect to which Seller or its Affiliates act as a custodian, trustee and/or prototype sponsor which would reasonably be expected to result in a material adverse effect.

4.12 Investment Representations.

(a) Seller is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Seller is purchasing the Shares for its own account, for investment purposes only and has no current arrangements or understandings for the resale or distribution to others in contravention of Applicable Law and will only resell such Shares or any part thereof pursuant to a registration or an available exemption under Applicable Law. Seller acknowledges that the offer and sale of the Shares have not been registered under the Securities Act or the securities Laws of any state or other jurisdiction, and that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act, and cannot be disposed of unless they are subsequently registered under the Securities Act and any applicable state laws or an exemption from such registration is available. Seller understands and agrees that the Shares will bear appropriate legends that may be required by Applicable Law.

(b) Seller has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the Shares.

(c) Seller acknowledges that the Shares must be held pursuant to the provisions of the Stockholder’s and Registration Rights Agreement.

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(d) Seller understands that the sale of the Shares has not been registered under the Securities Act in reliance upon an exemption therefrom. Seller was not offered or sold the Shares, directly or indirectly, by means of any form of general solicitation or general advertisement, including (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or (ii) any seminar or other meeting whose attendees had been invited by general solicitation or general advertising.

4.13 Sufficiency of Purchased Assets.

(a) To the extent services are to be provided by Seller pursuant to the Outsourcing Agreement, such services are consistent in all material respects with the services provided by Seller with respect to the Purchased Assets prior to the Closing.

(b) As of the Closing, the underlying positions and balances to be transferred to Buyer at the Closing reflect the underlying positions and balances of the Assigned Contracts immediately prior to the Closing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PW AND BUYER

PW and Buyer, jointly and severally, represents and warrants to Parent and Seller that each statement contained in this Article V is true and correct as of the date hereof, except as set forth in the disclosure schedule dated and delivered as of the date hereof by Buyer to Parent and Seller (the “Buyer Disclosure Schedule”), which is attached to this Agreement and is designated therein as being the Buyer Disclosure Schedule, it being acknowledged and agreed by Parent and Seller that any matter set forth in any section or subsection of the Buyer Disclosure Schedule shall be deemed to be a disclosure for all purposes of this Agreement and all other sections or subsections of the Buyer Disclosure Schedule to which such matter could reasonably be expected to be relevant, but shall expressly not be deemed to constitute an admission by PW or Buyer, or otherwise imply, that any such matter rises to the level of a PW Material Adverse Effect or is otherwise material for purposes of this Agreement or the Buyer Disclosure Schedule.

5.1 Organization and Good Standing. Each of PW and Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has the requisite corporate power to own, lease and operate its properties and to carry on its business as now being conducted.

5.2 Authority and Enforceability. Each of PW and Buyer has the requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of PW and Buyer. Each of PW and Buyer has duly executed and delivered this Agreement and the Outsourcing Agreement and will duly execute and deliver each other Ancillary Agreement to which it is a party. Assuming due authorization, execution and delivery by Parent and Seller, as applicable, this Agreement and the Outsourcing

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Agreement constitute, and each other Ancillary Agreement to which it is a party will constitute, the valid and binding obligations of PW and Buyer, enforceable against them in accordance with their respective terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (ii) the availability of injunctive relief and other equitable remedies.

5.3 Issuance of Shares. When issued in compliance with the provisions of this Agreement and the Charter Documents of PW, the Shares will be (i) validly issued, fully paid and nonassessable, (ii) assuming the accuracy of the representations and warranties of Seller (or an Affiliate of Seller if such Shares are issued in the name of such Affiliate pursuant to Section 3.3(a)) in Section 4.12, issued in compliance with applicable federal and state securities Laws, and (iii) except as set forth in the Stockholder’s and Registration Rights Agreement and under applicable federal and state securities Laws, will be free of any restriction on transfer.

5.4 No Conflicts; Consents.

(a) The execution and delivery of this Agreement by PW and Buyer do not, and the execution and delivery of the Ancillary Agreements to which they are a party and the consummation of the transactions contemplated hereby and thereby will not, (i) violate the provisions of any of the Charter Documents of PW or Buyer, (ii) violate any Contract to which PW or Buyer is a party, (iii) to the Knowledge of Buyer, violate any Law of any Governmental Entity applicable to PW or Buyer on the date hereof, or (iv) to the Knowledge of Buyer, result in the creation of any Liens upon any of the assets owned or used by PW or Buyer, except in each such case where such violation or Lien would not reasonably be expected materially to impair or delay the ability of PW or Buyer to perform its obligations under this Agreement or the Ancillary Agreements.

(b) Except as disclosed on Section 5.4(b) of the Buyer Disclosure Schedule, no Authorization or Order of, registration, declaration or filing with, or notice to any Governmental Entity is required by PW or Buyer in connection with the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, except for such Authorizations, Orders, registrations, declarations, filings and notices (i) as may be required under the HSR Act and the Other Antitrust Laws or the rules of FINRA or the New York Stock Exchange, or (ii) the failure to obtain which would not reasonably be expected to materially impair the ability of PW or Buyer to perform its obligations under this Agreement and the Ancillary Agreements to which it is a party.

5.5 Litigation. There is no Action pending or, to the Knowledge of PW and Buyer, threatened against, PW or Buyer which (a) challenges or seeks to enjoin, alter or materially delay the consummation of the transactions contemplated by this Agreement, or (b) except as disclosed on Section 5.5 of the Buyer Disclosure Schedule, would reasonably be expected to have a PW Material Adverse Effect.

5.6 Financial Statements; No PW Material Adverse Effect.

(a) The PW Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted

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therein; (ii) fairly present the financial condition of Buyer and its subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material Indebtedness and other Liabilities, direct or contingent, of PW and its Subsidiaries as of the date thereof, including liabilities for Taxes, material commitments and Indebtedness, in each case to the extent required by GAAP.

(b) The unaudited consolidated and consolidating balance sheet of PW and its Subsidiaries dated June 30, 2009, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of PW and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the PW Financial Statements, there has not been any PW Material Adverse Effect.

(d) To the Knowledge of PW, no Internal Control Event exists or has occurred since the date of the PW Financial Statements that has resulted in or would reasonably be expected to result in a misstatement in any material respect, of the assets, Liabilities, financial condition or results of operations of Buyer and its Subsidiaries on a consolidated basis.

5.7 No Default. Neither PW nor any Subsidiary thereof is in default under or with respect to any contractual obligation that would, either individually or in the aggregate, reasonably be expected to have a PW Material Adverse Effect.

5.8 Insurance. A list of the material policies of insurance held as of the date hereof by PW covering the properties and errors and omissions of PW and its Subsidiaries are set forth in Section 5.8 of the Buyer Disclosure Schedule.

5.9 Taxes. Except for those failures as would not, individually or in the aggregate, result in a PW Material Adverse Effect:

(a) each of PW and its Subsidiaries has prepared and timely filed with the appropriate governmental agencies all Tax Returns required to be filed by it, and each such Tax Return is complete and correct in all respects;

(b) each of PW and its Subsidiaries has timely paid all Taxes due and payable by it (whether or not shown on any Tax Return), including as a withholding agent, and has made adequate accruals in accordance with GAAP for all Taxes that are not yet due and payable;

(c) neither PW nor any of its Subsidiaries is presently under examination or audit by any Taxing Authority, neither PW nor any of its Subsidiaries has received written notice of any pending or threatened examination or audit by any Taxing Authority, and no issue previously raised in writing by any such Taxing Authority reasonably would be expected to result in a

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proposed deficiency, assessment, or other claim for any prior or subsequent period (including periods subsequent to the date hereof);

(d) neither PW nor any of its Subsidiaries is liable for the Taxes of any other Person, including under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or non-U.S. Law), or as a transferee or successor, by contract or otherwise;

(e) neither PW nor any of its Subsidiaries will be required to include any item of income in taxable income for any taxable period or portion thereof ending after the Closing Date as a result of any prepaid income, open transactions or adjustments pursuant to Section 481 of the Code (or any similar provision of state, local or non-U.S. law) received or occurring prior to the Closing Date; and

(f) neither PW nor any of its Subsidiaries has participated in any “listed transactions” within the meaning of Treasury Regulation Section 1.6011-4.

5.10 Capitalization.

(a) The authorized capital of PW consists of 100,000,000 shares of common stock. PW has previously delivered or made available to Parent a true and complete copy of the currently effective Certificate of Incorporation dated May 16, 2006 with the rights, restrictions, privileges and preferences of the PW Common Stock.

(b) As of September 30, 2009, (i) 25,428,798 shares of PW’s common stock (the “PW Common Stock”) are issued and outstanding, (ii) 945,706 shares of PW Common Stock are reserved for issuance pursuant to Buyer options issued and outstanding, (iii) a maximum of 19.99% of PW Common Stock are (subject to stockholder approval) reserved for issuance upon conversion of convertible notes or bonds and (iv) 3,448,568 shares of PW Common Stock are held in the treasury of PW. All of the issued and outstanding shares of PW Common Stock have been duly authorized and validly issued and are fully paid and nonassessable.

(c) None of the issued and outstanding shares of PW Common Stock was or, upon issuance in connection with the exercise of PW options or conversion of notes, bonds or preferred stock, will be, issued in violation of any preemptive rights. Except for PW options and the convertible notes and as set forth herein, as of the date hereof there are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the PW Common Stock or obligating PW to issue or sell any PW Common Stock, or any other interest in, PW. As of the date hereof there are no outstanding contractual obligations of PW to repurchase, redeem or otherwise acquire any PW Common Stock. The PW Common Stock described in Section (a) above constitute all of the issued and outstanding capital stock of PW. To Buyer’s Knowledge, there are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the issued and outstanding PW Common Stock.

5.11 Disclosure. As of their respective dates of filing, PW’s SEC Filings did not contain, and each such filing, as amended or supplemented, if applicable, will not contain as of the date of such amendment or supplement any untrue statement of a material fact or omit to state a

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material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading.

5.12 Compliance with Laws. PW and each of its Subsidiaries is in compliance in all material respects with the requirements of all laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, would not reasonably be expected to have a PW Material Adverse Effect.

5.13 Leverage Calculation Under Credit Agreement Amendment. The calculation of compliance with the Consolidated Leverage Ratio in section 7.16(c) of PW’s Amended and Restated Credit Agreement dated as of May 1, 2009 (as amended, the “Credit Agreement”) for the second quarter of 2009 and on a pro forma projected basis for the first and second quarter of 2010, provided by PW to Parent prior to the date of this Agreement, was prepared in a manner consistent with the requirements of Section 7.16(c) of the Credit Agreement and the manner in which PW has previously calculated compliance with such covenant. PW intends to adopt the same methodology for calculating the compliance by PW with Section 7.16(c) (as amended by the Third Amendment to Amended and Restated Credit Agreement dated on or about November 2, 2009 (the “Third Amendment”)) upon Closing, as required by the Third Amendment.

ARTICLE VI

COVENANTS OF PARENT AND SELLER

6.1 Conduct of Business. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing Date, except with the prior written consent of Buyer, Seller shall:

(a) (i) maintain its corporate existence, (ii) pay or perform the Liabilities of the Purchased Assets when due, and (iii) carry on the Purchased Assets in the usual, regular and ordinary course in a manner consistent with past practice and in accordance with the provisions of this Agreement (including, without limitation, performance under the Assigned Contracts) and in compliance with all Laws, Business Authorizations and Assigned Contracts;

(b) use its commercially reasonable efforts consistent with past practices and policies to preserve its relationships with customers, suppliers, distributors, licensors, licensees and others having dealings with the business relating to the Purchased Assets; provided that Seller is not authorized to, and shall not, make any commitments on behalf of Buyer;

(c) use its commercially reasonable efforts to maintain the assets, properties and rights included in the Purchased Assets in the same state of repair, order and conditions as they are on the date hereof, reasonable wear and tear excepted;

(d) maintain the Books and Records in accordance with past practice, and use its commercially reasonable efforts to maintain in full force and effect all Business Authorizations and Seller Policies and Procedures;

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(e) promptly notify Buyer of any event or occurrence not in the ordinary course of the Business, including, without limitation, any material default under any Assigned Contract to the extent not inconsistent with applicable antitrust or competition laws; and

(f) use its commercially reasonable efforts to (i) conduct the Business in such a manner that on the Closing Date the representations and warranties of Parent and Seller contained in this Agreement shall be true and correct, as though such representations and warranties were made on and as of such date, and (ii) cause all of the conditions to the obligations of Buyer under this Agreement to be satisfied as soon as practicable following the date hereof.

6.2 Negative Covenants. Except as expressly provided in this Agreement and to the extent not inconsistent with applicable antitrust or competition laws and during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing Date, Seller shall not do any of the following, in each case with respect to the Business, without the prior written consent of Buyer:

(a) sell, lease, transfer or assign any of the Purchased Assets;

(b) cancel any debts or waive any claims or rights with respect to any of the Purchased Assets that, individually, have a value in excess of $50,000 or, in the aggregate, have a value in excess of $100,000;

(c) mortgage, pledge or subject to consensual Liens any of the Purchased Assets;

(d) other than in the ordinary course of the business consistent with past practice, amend, modify, cancel or waive any rights under any Contract which is an Assigned Contract;

(e) be party to any merger, acquisition, consolidation, recapitalization, liquidation, dissolution or similar transaction involving the Business; or

(f) agree, whether in writing or otherwise, to do any of the foregoing.

6.3 Access to Information; Investigation. Subject to the terms of the Confidentiality Agreement by and between Buyer and Seller dated July 29, 2009 (the “Confidentiality Agreement”), Seller shall, and shall cause its Affiliates to, upon reasonable notice during normal business hours during the period prior to and after the Closing, afford to Buyer and its accountants, counsel and other representatives (“Representatives”) reasonable access to all of the personnel, properties, Contracts and Books and Records (including work papers, whether prepared by employees, consultants or independent auditors) of Seller, shall furnish promptly to Buyer any information concerning Seller as Buyer may reasonably request and shall assist Buyer in communicating with Persons having business relationships, agreements and arrangements with Seller regarding the transactions contemplated by this Agreement, including the auditors, consultants and other financial and legal advisors of Seller; provided that such access does not disrupt the normal operations of Seller or result in any violation of applicable antitrust Law.

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6.4 Confidentiality. Except as provided in Section 7.2 herein, from and after the Closing Date, Seller will, and will cause its Affiliates to, hold, and will use its commercially reasonable efforts to cause its and their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Purchased Assets, except to the extent that Seller can show that such information (a) is in the public domain through no fault of Seller or any of its Affiliates or their respective Representatives, (b) is lawfully acquired by Seller or any of its Affiliates after the Closing Date from sources that are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation or (c) is in connection with any regulatory investigation or proceeding. If Seller or any of its Affiliates or Representatives is compelled to disclose any such information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information that Seller is legally required to be disclosed; provided that Seller shall exercise its commercially reasonable efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information. Seller shall enforce for the benefit of Buyer all confidentiality, assignment of inventions, non-competition, non-solicitation and similar agreements between Seller and any other party relating to the Purchased Assets that are not Assigned Contracts.

6.5 Release of Liens. On or prior to the Closing Date, Seller shall cause to be released all Liens in and upon any of the Purchased Assets (all of such Liens are set forth in the Seller Disclosure Schedule) other than Permitted Liens.

6.6 Consents. Seller shall use reasonable best efforts to obtain all Consents that are required under the Assigned Contracts in connection with the consummation of the transactions contemplated by this Agreement so as to preserve all rights of, and benefits to, Buyer thereunder; provided that no Assigned Contract shall be amended, no right thereunder shall be waived and no payments need be made to obtain any such Consent. All of such Consents are set forth in the Section 4.3(a) of the Seller Disclosure Schedule.

6.7 Notification of Certain Matters. Seller shall give prompt notice to Buyer of (a) any fact, event or circumstance known to it that individually or taken together with all other facts, events and circumstances known to it, has had or could have, individually or in the aggregate, a Seller Material Adverse Effect, (b) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the consummation of the transactions contemplated by this Agreement, (c) any notice or other communication from any Governmental Entity in connection with the consummation of the transactions contemplated by this Agreement, or (d) the commencement of any Action that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.9; provided, however, (i) the delivery of any notice pursuant to this Section 6.7 shall not limit or otherwise affect any remedies available to Buyer, and (ii) disclosure by Parent and Seller shall not be deemed to amend or supplement the Seller Disclosure Schedule or prevent or cure any misrepresentation, breach of warranty or breach of covenant.

6.8 Restrictive Covenant.

(a) Parent covenants that for a period beginning on the Closing Date and ending on the date that is two (2) years after the date of any termination of the Outsourcing Agreement

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following the Closing, Parent shall not, and it shall cause its Affiliates not to, directly or indirectly, disparage Buyer or its Affiliates to any employee of Buyer, Parent or their respective Affiliates or any customer or client or prospective customer or client of Buyer, Parent or their respective Affiliates, or encourage any customer or client or prospective customer or client not to continue to retain the services of Buyer or its Affiliates.

(b) PW covenants that for a period beginning on the Closing Date and ending on the date that is two (2) years after the date of any termination of the Outsourcing Agreement following the Closing, PW shall not, and it shall cause its Affiliates not to, directly or indirectly, disparage Parent or its Affiliates to any employee of PW, Parent or their respective Affiliates or any customer or client or prospective customer or client of PW, Parent or their respective Affiliates, or encourage any customer or client or prospective customer or client not to continue to retain the services of Parent or its Affiliates.

6.9 No Negotiation. Until such time as this Agreement shall be terminated pursuant to Section 9.1, Seller shall not, and it shall cause its Affiliates not to, directly or indirectly, solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with or provide any nonpublic information to any Person (other than Buyer) relating to any sale of assets of Seller, any business combination transaction involving Seller or the merger or consolidation of Seller.

ARTICLE VII

COVENANTS OF THE PARTIES

7.1 Regulatory Approvals.

(a) Buyer and Seller shall each promptly apply for, and take all reasonably necessary actions to obtain or make, as applicable, all Orders and Authorizations of, and all filings with, any Governmental Entity or other Person required to be obtained or made by it for the consummation of the transactions contemplated by this Agreement. Each party shall cooperate with and promptly furnish information to the other party necessary in connection with any requirements imposed upon such other party in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements. Without limiting the generality of the foregoing, if necessary, Buyer and Seller shall, as promptly as practicable after any party hereto determines that such filing shall be made, file with (i) the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”), the notification and report form required for the transactions contemplated hereby and any supplemental information requested in connection therewith pursuant to the HSR Act, which forms shall specifically request early termination of the waiting period prescribed by the HSR Act and (ii) any other Governmental Entity, any other filings (or where appropriate, draft submissions), reports, information and documentation required for the transactions contemplated hereby pursuant to any Other Antitrust Laws. Each of Seller and Buyer shall furnish to each other’s counsel such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is necessary under the HSR Act and any Other Antitrust Laws. Buyer and Seller shall each be responsible for one half of all filing and other similar fees payable in connection with filings under the HSR Act. Buyer and Seller shall

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bear all other filing fees and local counsel fees related to Other Antitrust Laws at their own expense.

(b) Each of Buyer and Seller shall use its reasonable best efforts to promptly obtain any clearance required under the HSR Act and any Other Antitrust Laws for the consummation of the transactions contemplated by this Agreement. Each of Buyer and Seller shall keep the other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ and other Governmental Entities and shall comply promptly with any such inquiry or request.

(c) Buyer and Seller shall instruct their respective counsel to cooperate with each other and use reasonable best efforts to facilitate and expedite the identification and resolution of any issues arising under the HSR Act and Other Antitrust Laws at the earliest practicable dates. Such reasonable best efforts and cooperation include, but are not limited to, counsel’s undertaking (i) to keep each other appropriately informed of communications from and to personnel of any Governmental Entity, and (ii) to confer with each other regarding appropriate contacts with and response to personnel of such Governmental Entity.

7.2 Public Announcements. None of the parties hereto shall, and Parent will cause its Affiliates not to, issue any press releases or otherwise make any public statements with respect to the transactions contemplated by this Agreement without the approval of the other parties; provided, however, that any party may, without such approval, make disclosures in filings with the SEC, press releases or other public announcement as it believes are required pursuant to applicable securities Laws and any listing agreement with any national securities exchange or stock market; provided, further, that each of the parties will cooperate with and shall allow the other parties reasonable time to comment on any disclosure, release or announcement in advance of such filing with the SEC or issuance irrespective of whether approval is required with respect to such release or announcement and each of the parties may make internal announcements to their respective employees that are consistent with the parties’ proposed or issued public disclosures regarding the transactions contemplated by this Agreement.

7.3 Customer Communications. Immediately after the date of this Agreement, Seller and Buyer shall jointly prepare, and Seller shall promptly deliver, to each Seller Correspondent, a communication regarding the acquisition of the Purchased Assets by Buyer in accordance with the terms of this Agreement and the consequences of such transaction to such Seller Correspondent. Seller and Buyer shall cooperate, as and when Buyer may reasonably request, in Buyer’s initial contact and subsequent correspondence with each such Seller Correspondent. Except as may be otherwise required by Applicable Law, prior to the Closing, neither Seller nor Buyer shall, and shall permit any agent or Affiliate to, send any communication to any Seller Correspondent regarding this Agreement or the transactions contemplated hereby without the mutual consent of Buyer and Seller, not to be unreasonably withheld.

7.4 Employees.

(a) Seller represents and warrants that it has provided Buyer with a list (including title, position and location) of all Business Employees engaged in correspondent relationship management, clearing sales, risk management, compliance and legal, together with details

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of their base and incentive compensation and benefits. Promptly following the execution of this Agreement, Seller shall provide reasonable access to Buyer to the facilities and the personnel Records of Seller for the purpose of preparing for and conducting employment interviews with certain Business Employees engaged in correspondent relationship management, clearing sales, risk management, compliance and legal except those listed on Schedule 7.4(a). Buyer shall not be obligated to offer employment to any such Business Employee.

(b) Buyer may offer employment to any such Business Employee on such terms and conditions as it deems appropriate in its sole discretion, such employment to be contingent upon and effective immediately following the Closing (it being agreed that Seller may also offer to continue the employment of any such Business Employees). The Business Employees who accept Buyer’s offer of employment and commence employment with Buyer shall be referred to, collectively, as “Transferred Employees.” Seller shall terminate the employment of all Transferred Employees with Seller effective immediately prior to the Closing.

(c) Any and all Liabilities relating to or arising out of the employment, or cessation of employment, of any Business Employee (whether or not a Transferred Employee) on or prior to the close of business on the Closing Date shall be the sole responsibility of Seller, including wages and other remuneration due through the close of business on the Closing Date.

(d) From and after the Closing Date, Buyer shall offer to Transferred Employees such Benefit Plans and arrangements as it deems appropriate in its sole discretion. Buyer shall not assume any Liability under any of the Seller Benefit Plans.

(e) All Transferred Employees who are participants in a Seller Benefit Plan that is an employee pension benefit plan shall retain their accrued benefits under such plans as of the Closing Date, and Seller and/or Seller Benefit Plans shall retain Liability for the payment of benefits as and when such Transferred Employees become eligible therefor under such plans. All Transferred Employees shall become fully vested in their accrued benefits under Seller’s pension benefit plans as of the Closing Date.

(f) Seller shall be liable for any severance, separation, deferred compensation or similar benefits that are payable under Seller Benefit Plans or Applicable Law (i) to any Person who is or was an employee of Seller and who is not a Transferred Employee, including any Person whose employment with the Business was terminated prior to the Closing (“Seller Employees”), and (ii) to Transferred Employees, to the extent that such Transferred Employee’s right to severance, separation, deferred compensation or similar benefits arises as a result of the transactions contemplated by this Agreement and the Ancillary Agreements.

(g) Seller shall be liable for the administration and payment of all workers’ compensation Liabilities and benefits with respect to (i) Transferred Employees to the extent resulting from claims, events, circumstances, exposures, conditions or occurrences occurring on or prior to the Closing, and (ii) Seller Employees. Buyer shall be liable for the administration and payment of all workers’ compensation Liabilities and benefits with respect to Transferred Employees to the extent resulting from claims, events, circumstances, exposures, conditions or occurrences occurring after the Closing Date.

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(h) Seller shall be liable for the administration and payment of all health and welfare Liabilities and benefits under the Seller Benefit Plans with respect to (i) Transferred Employees to the extent resulting from claims, events, circumstances, exposures, conditions or occurrences occurring on or prior to the Closing, and (ii) Seller Employees. Buyer shall be liable for the administration and payment of all health and welfare Liabilities and benefits under Buyer’s Benefit Plans with respect to Transferred Employees participating therein to the extent resulting from claims, events, circumstances, exposures, conditions or occurrences occurring after the Closing Date.

(i) Seller shall retain and perform all Liabilities and maintain all insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) with respect to Seller Employees and their covered dependents; provided that Buyer shall perform all of its obligations under COBRA with respect to Transferred Employees that become covered by any group health insurance plan of Buyer.

(j) Except as expressly set forth in this Section 7.4 with respect to Transferred Employees, Buyer shall have no obligation with respect to any Business Employee or any other employee of Seller.

(k) Nothing in this Agreement confers upon any Business Employee or Transferred Employee any rights or remedies of any nature or kind whatsoever under or by reason of this Section 7.4. Nothing in this Agreement shall limit the right of Buyer to terminate or reassign any Transferred Employee after the Closing or to change the terms and conditions of his or employment in any manner.

(l) Effective as of the Closing Date, Buyer or its designated Affiliate shall use commercially reasonable efforts to cause each Transferred Employee who was covered under the Seller Benefit Plans immediately prior to such date to be covered under employee benefit plans, programs and arrangements maintained or established by Buyer (the “Buyer Plans”). Buyer shall use commercially reasonable efforts to recognize service under the Seller Benefit Plans (and prior service with Sellers’ predecessors and Affiliates to the extent such prior service is recognized under the Seller Benefit Plans) for eligibility and vesting purposes, but not benefit accrual purposes, under the Buyer Plans.

(m) Effective as of the Closing Date, each Transferred Employee shall cease to be covered by the Seller Benefit Plans. Sellers shall retain responsibility for all claims for welfare benefits incurred by Transferred Employees prior to the Closing Date. For purposes of this subsection, a claim shall be deemed to have been incurred on the date the medical, dental or vision service giving rise to the claim is performed. With respect to the Transferred Employees, effective as of the Closing Date, Buyer shall use commercially reasonable efforts to cause all applicable Buyer Plans that provide medical or dental coverage, life and accident insurance, and disability or similar coverage (collectively, the “Buyer Welfare Plans”) to waive pre-existing condition exclusions, evidence of insurability provisions, waiting period requirements or similar provisions to the extent such exclusions, requirements and provisions were waived or satisfied under the applicable Seller Benefit Plan as of the Closing Date. In addition, Buyer shall use commercially reasonable efforts to cause the applicable Buyer Welfare Plans to credit Buyer Employees with amounts credited by Seller under Seller’s health and dental plans toward the satisfaction

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of annual deductible and out-of-pocket maximums under such Buyer health and dental plans during the calendar year which includes the Closing Date, provided that the use of commercially reasonable efforts shall not require the payment of any additional fees under the Buyer Welfare Plans.

7.5 Taxes.

(a) Seller and Buyer shall each bear 50% of all sales, use, recording, stock transfer, documentary, real estate and other similar transfer Taxes imposed by federal, state or local law, if any, resulting from the sale of the Purchased Assets in accordance herewith, whether imposed by Law on Seller or Buyer (each a “Transfer Tax”), including any additional Transfer Tax resulting from a later adjustment or challenge. Seller and Buyer shall, and shall cause their respective Affiliates, to promptly notify the other party with respect to any determination of a Transfer Tax and to cooperate in the determination of any Transfer Tax and the preparation of any Tax Return for Transfer Taxes. If Seller and Buyer are unable to resolve any disagreement regarding a determination of a Transfer Tax within thirty (30) days of a party’s notification of its determination, such dispute shall be resolved by an Independent Expert in the manner provided in Section 2.6(l). Within five (5) Business Days after the filing of a Tax Return for Transfer Taxes reflecting a final resolution with respect to a Transfer Tax determined pursuant to the procedures above, the non-filing party shall pay the filing party an amount of cash equal to 50% of the Transfer Tax shown on the Tax Return.

(b) All real property Taxes, personal property Taxes and similar ad valorem obligations levied with respect to the Purchased Assets for a taxable period that includes (but does not end on) the Closing Date shall be apportioned between Seller and Buyer as of the Closing Date based on the number of days of such taxable period included in the period ending with and including the Closing Date (with respect to any such taxable period, the “Pre-Closing Tax Period”), and the number of days of such taxable period beginning after the Closing Date (with respect to any such taxable period, the “Post-Closing Tax Period”). Seller shall be liable for the proportionate amount of such Taxes that is attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount of such Taxes that is attributable to the Post-Closing Period. If bills for such Taxes have not been issued as of the Closing Date, and, if the amount of such Taxes for the period including the Closing Date is not then known, the apportionment of such Taxes shall be made at Closing on the basis of the prior period’s Taxes. After Closing, upon receipt of bills for the period including the Closing Date, adjustments to the apportionment shall be made by the parties, so that if either party paid more than its proper share at the Closing, the other party shall promptly reimburse such party for the excess amount paid by them.

(c) Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating to the Business, the Purchased Assets and Assumed Liabilities (including access to Books and Records) as is reasonably necessary for the filing of all Tax Returns, the making of any election relating to Taxes, the preparation for any audit by any Taxing Authority, the prosecution or defense of any Action relating to any Tax or other Tax matters related to this Agreement. Any expenses incurred in furnishing such information or assistance shall be borne by the party requesting it.

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7.6 Bulk Sales Laws. Buyer and Seller hereby waive compliance by Buyer and Seller with the bulk sales Law and any other similar Laws in any applicable jurisdiction in respect of the transactions contemplated by this Agreement and the Ancillary Agreements; provided, however, that Seller shall pay and discharge when due all claims of creditors asserted against Buyer or the Purchased Assets by reason of such noncompliance and shall take promptly all necessary actions required to remove any Lien which may be placed upon any of the Purchased Assets by reason of such noncompliance.

7.7 Discharge of Business Obligations After Closing.

(a) From and after the Closing, Seller shall pay and discharge on a timely basis all of the Excluded Liabilities.

(b) From and after the Closing, if Seller or any of its Affiliates receives or collects any funds relating to any Purchased Asset, Seller or its Affiliate shall remit such funds to Buyer within five Business Days after its receipt thereof. From and after the Closing, if Buyer receives or collects any funds relating to any Excluded Asset, Buyer shall remit any such funds to Seller within five Business Days after its receipt thereof.

7.8 Access to Books and Records. Each of Seller and Buyer shall preserve until the tenth anniversary of the Closing Date all Records (other than Tax records, Tax Returns and any other Tax related work papers) possessed or to be possessed by such party relating to any of the assets, Liabilities or the Business prior to the Closing. After the Closing Date, where there is a legitimate business purpose, such party shall provide the other party with access, upon prior reasonable written request specifying the need therefor, during regular business hours, to (i) the officers and employees of such party and (ii) the Books and Records (other than Tax records, Tax Returns and any other Tax related work papers) of such party, but, in each case, only to the extent relating to the assets, Liabilities or business of the Business prior to the Closing, and the other party and its representatives shall have the right to make copies of such Books and Records at their sole cost; provided, however, that the foregoing right of access shall not be exercisable in such a manner as to interfere unreasonably with the normal operations and business of such party. Subject to the requirements of Applicable Law, such Records may nevertheless be destroyed by a party if such party sends to the other party written notice of its intent to destroy Records, specifying with particularity the contents of the Records to be destroyed. Such Records may then be destroyed after the 90th day after such notice is given unless the other party objects to the destruction in which case the party seeking to destroy the Records shall deliver such Records to the objecting party at the objecting party’s cost.

7.9 Financing. PW and Buyer shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to obtain financing (“Third Party Financing”) the proceeds of which are at least $50 million which proceeds will be used by PW and Buyer to finance the operations of the Purchased Assets (“Working Capital Funding”) as promptly as reasonably practicable, including (i) using commercially reasonable efforts to negotiate and enter into definitive agreements with respect thereto, (ii) satisfy on a timely basis all conditions relating thereto and (iii) consummate such financing at or prior to Closing; provided, however, that Buyer shall be under no obligation to consummate any financing arrangement that is not satisfactory to PW. PW and Buyer shall inform

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Parent and Seller of all material developments with respect to such efforts to obtain Third Party Financing on a timely basis, including the provision of term sheets and proposals of material terms, to the extent permitted. No later than four (4) Business Days prior to the Closing Date and provided all conditions to Closing have been satisfied and/or waived, in the event PW and Buyer have been unable to obtain Third Party Financing to provide the Working Capital Funding under satisfactory financing arrangements as determined by PW in good faith, PW shall notify Seller of its desire to borrow from Parent up to $50 million pursuant to the Backstop Note (the “Backstop Note Notice”) to be used to provide Working Capital Funding in lieu of Third Party Financing; and the Backstop Note Notice shall state the amount of funds to be borrowed and a certification by the Chief Executive Officer and Chief Financial Officer of PW to the effect that PW and Buyer have been unable to secure Third Party Financing under financing arrangements satisfactory to PW.

7.10 Cooperation with Preparation of PW Audited Financials. Seller shall, and shall cause its Affiliates to, cooperate with PW to the extent necessary with respect to the preparation of financial statements required pursuant to applicable securities Laws with respect to the Purchased Assets or in connection with the purchase of the Purchased Assets.

7.11 Further Assurances. Buyer and Seller shall, and Seller shall cause its Affiliates to, execute such documents and other instruments and take such further actions as may be reasonably required or desirable to carry out the provisions of this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. Upon the terms and subject to the conditions hereof, Buyer and Seller shall each use its respective commercially reasonable efforts to (a) take or cause to be taken all actions and to do or cause to be done all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and the Ancillary Agreements and (b) obtain in a timely manner all Consents and Authorizations and effect all necessary registrations and filings. From time to time after the Closing, at Buyer’s request, Seller shall execute, acknowledge and deliver to Buyer such other instruments of conveyance and transfer and will take such other actions and execute and deliver such other documents, certifications and further assurances as Buyer may reasonably require in order to vest more effectively in Buyer, or to put Buyer more fully in possession of, any of the Purchased Assets.

7.12 Payment of Termination Fees. If at anytime prior to the date occurring on the last date of the applicable period during which adjustments may be made pursuant to Section 2.6 hereof with respect to a particular Assigned Contract, (i) Buyer gives or receives a notice to terminate an Assigned Contract under circumstances which require the payment by a Seller Correspondent of a Termination Fee, (x) Buyer shall promptly notify Seller in writing of such facts and circumstances, and (y) use commercially reasonable efforts to obtain payment of, or cooperate with Seller to facilitate payment of, such Termination Fee from the Seller Correspondent, provided that the use of commercially reasonable efforts shall not require the payment of any funds in connection therewith; and (ii) if Buyer receives payment of any such Termination Fee, (regardless of when received), Buyer shall thereafter promptly remit to Seller 50% of the Termination Fee received.

7.13 Vendor Contracts. To the extent that the rights or benefits of any Contract with a vendor of Seller listed in Schedule 7.13 hereof is required for Seller or Buyer to perform services

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under any Assigned Contract, Excluded Contract or Restricted Contract, Buyer and Seller shall cooperate with each other in a commercially reasonable arrangement to provide the other party the rights and benefits of such vendor Contract necessary to perform such services under an Assigned Contract, Excluded Contract or Restricted Contract to the extent permitted under such vendor Contract.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1 Conditions to Obligations of the Parties. The obligations of the parties hereto to consummate the transactions contemplated by this Agreement are subject to the satisfaction on or prior to the Closing Date of the following conditions:

(a) Any waiting period applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act and any applicable waiting periods under the Other Antitrust Laws shall have expired or been terminated and all other Authorizations and Orders of, declarations and filings with, and notices to any Governmental Entity, required to permit the consummation of the transactions contemplated by this Agreement shall have been obtained or made and shall be in full force and effect.

(b) No temporary restraining order, preliminary or permanent injunction or other Order preventing the consummation of the transactions contemplated by this Agreement shall be in effect. No Law shall have been enacted or shall be deemed applicable to the transactions contemplated by this Agreement which makes the consummation of such transactions illegal.

8.2 Conditions to Obligation of PW and Buyer. The obligation of PW and Buyer to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or waiver by Buyer in its sole discretion) of the following further conditions:

(a) The representations and warranties of Parent and Seller that are qualified by materiality or Seller Material Adverse Effect shall be true and correct when made and as of the Closing as if made at and as of the Closing and each such representation and warranty that is not so qualified shall be true and correct in all material respects when made and as of the Closing as if made at and as of the Closing, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date.

(b) Seller and Parent shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Seller at or prior to the Closing.

(c) Buyer shall have received a certificate dated the Closing Date signed on behalf of Seller and Parent by the President of Parent and Seller to the effect that the conditions set forth in Sections 8.2(a) and 8.2(b) have been satisfied (the “Seller Closing Certificate”).

(d) There shall have been no Seller Material Adverse Effect.

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(e) No Action shall be pending before any court, other Governmental Entity or Binding Arbitrator wherein an unfavorable Order would (i) prevent consummation of any of the transactions contemplated by this Agreement or the Ancillary Agreements or (ii) cause any of the transactions contemplated by this Agreement or the Ancillary Agreements to be rescinded following consummation. No such Order shall be in effect.

(f) Seller shall have assigned to Buyer the Assigned Contracts accounting for at least 80% of the Net Revenues attributable to the Assigned Contracts set forth on the Closing Assigned Contracts Schedule (provided that any Net Revenue attributable to an Assigned Contract which has been terminated or for which a notice of termination has been delivered to Seller shall be excluded from the numerator (but not the denominator) in such calculation).

(g) Buyer shall have received any Authorizations as may be required by FINRA and the New York Stock Exchange.

(h) Seller shall have delivered to Buyer all agreements and other documents required to be delivered by Parent and Seller to Buyer pursuant to Section 3.2 of this Agreement.

(i) Buyer shall have received a certificate of the Secretary of Parent and Seller dated the Closing Date and certifying: (A) that attached thereto are true and complete copies of all resolutions adopted by the Board of Directors of Parent and Seller in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and the Ancillary Agreements; and (B) to the incumbency and specimen signature of each officer of Parent and Seller executing this Agreement and/or the Ancillary Agreements, and a certification by another officer as to the incumbency and signature of the Secretary of Parent and Seller.

(j) Buyer shall have received evidence in form and substance satisfactory to Buyer that all Liens on the Purchased Assets, other than Permitted Liens, shall have been released.

(k) Buyer shall have received the Closing Assigned Contracts Schedule with such modifications as permitted pursuant to Section 2.9.

(l) If PW elects to obtain capital pursuant to the Backstop Note in accordance with Section 7.9, PW shall have received from Seller pursuant to the Backstop Note the amount set forth in the Backstop Note Notice.

(m) Seller shall have transferred to Buyer all balances and positions associated with any Assigned Contract as described in Section 2.1(c) pursuant to the terms of the Conversion Agreement.

8.3 Conditions to Obligation of Parent and Seller. The obligation of Parent and Seller to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or waiver by Seller in its sole discretion) of the following further conditions:

(a) The representations and warranties of PW and Buyer that are qualified by materiality or PW Material Adverse Effect, shall be correct when made and as of the Closing as if made at and as of the Closing and each such representation and warranty that is not so qualified shall be true and correct in all material respects when made and as of the Closing as if made at and as of the Closing, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date.

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(b) Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Buyer at or prior to the Closing.

(c) Seller shall have received a certificate dated the Closing Date signed on behalf of Buyer by the President of Buyer to the effect that the conditions set forth in Section 8.3(a) and 8.3(b) have been satisfied (the “Buyer Closing Certificate”).

(d) No Action shall be pending before any court, other Governmental Entity or a Binding Arbitrator wherein an unfavorable Order would (i) prevent consummation of any of the transactions contemplated by this Agreement and the Ancillary Agreements or (ii) cause any of the transactions contemplated by this Agreement and the Ancillary Agreements to be rescinded following consummation. No such Order shall be in effect.

(e) Buyer shall have delivered to Seller all agreements and other documents required to be delivered by Buyer to Seller pursuant to Section 3.3 of this Agreement.

(f) Seller shall have received a certificate of the Secretary of Buyer dated the Closing Date and certifying: (A) that attached thereto are true and complete copies of all resolutions adopted by the Board of Directors of Buyer in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and the Ancillary Agreements; and (B) to the incumbency and specimen signature of each officer of Buyer executing this Agreement and the Ancillary Agreements to which it is a party, and a certification by another officer of Buyer as to the incumbency and signature of the Secretary of Buyer.

ARTICLE IX

TERMINATION

9.1 Termination.

(a) This Agreement may be terminated at any time prior to the Closing:

(i) by mutual written consent of Buyer and Seller;

(ii) by Buyer or Seller if:

(A) the Closing does not occur on or before March 31, 2010; provided that, if satisfaction (or waiver as provided herein) of the conditions set forth in Article VIII (other than the condition set forth in Section 8.2(g) and those conditions that by their nature will be satisfied at the Closing) has occurred, such date shall be extended to the date six (6) months after the date of filing of the application required under FINRA Rule 1017 with respect to the transactions contemplated herein, provided that such application is pending at such time; provided further that the right to terminate this Agreement under this clause (ii)(A) shall not be available to any party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or

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(B) a Governmental Entity shall have issued an Order or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, which Order or other action is final and non-appealable;

(iii) by Buyer if:

(A) any condition to the obligations of Buyer hereunder becomes incapable of fulfillment other than as a result of a breach by Buyer of any covenant or agreement contained in this Agreement, and such condition is not waived by Buyer; or

(B) there has been a breach by Parent or Seller of any representation, warranty, covenant or agreement contained in this Agreement or the Seller Disclosure Schedule, or if any representation or warranty of Parent or Seller shall have become untrue, in either case such that the conditions set forth in Sections 8.2(a) or 8.2(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, is not cured within 30 days after written notice of such breach is given to Seller by Buyer; or

(C) if PW elects to obtain capital pursuant to the Backstop Note in accordance with Section 7.9, Seller has failed to deliver to Buyer the amount set forth in the Backstop Note Notice pursuant to the Backstop Note; or

(iv) by Seller if:

(A) any condition to the obligations of Seller hereunder becomes incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition is not waived by Seller; or

(B) there has been a breach by Buyer of any representation, warranty, covenant or agreement contained in this Agreement or the Buyer Disclosure Schedule, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in Sections 8.3(a) or 8.3(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, is not cured within 30 days after written notice of such breach is given to Buyer by Seller.

(b) The party desiring to terminate this Agreement pursuant to clause (ii), (iii) or (iv) shall give written notice of such termination to the other party hereto.

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9.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, this Agreement shall immediately become null and void and there shall be no Liability or obligation on the part of Seller or Buyer or their respective officers, directors, stockholders or Affiliates, except as set forth in Section 9.3; provided, however, the provisions of Section 7.2 (Public Announcements) and Section 9.3 (Remedies) and Article X of this Agreement shall remain in full force and effect and survive any termination of this Agreement.

9.3 Remedies. Any party terminating this Agreement pursuant to Section 9.1 shall have the right to recover damages sustained by such party as a result of any breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement or fraud or willful misrepresentation; provided, however, that the party seeking relief is not in breach of any representation, warranty, covenant or agreement contained in this Agreement under circumstances which would have permitted the other party to terminate the Agreement under Section 9.1.

ARTICLE X

INDEMNIFICATION

10.1 Survival.

(a) Except as set forth in Section 10.1(b), all representations and warranties contained in this Agreement, and any Schedule, certificate or other document delivered pursuant to this Agreement, shall survive the Closing for a period of two (2) years.

(b) The representations and warranties of Parent and Seller contained in Sections 4.1 (Organization and Good Standing), 4.2 (Authority and Enforceability) and the representations and warranties of Buyer contained in Sections 5.1 (Organization and Good Standing) and 5.2 (Authority and Enforceability) and claims based on fraudulent misrepresentation shall survive the Closing indefinitely. The representations and warranties of Parent and Seller contained in Sections 4.4 (Taxes) shall survive the Closing until 60 days after the expiration of the applicable statute of limitations period (after giving effect to any waivers and extensions thereof).

(c) The covenants and agreements which by their terms do not contemplate performance after the Closing shall survive the Closing in accordance with their terms. The covenants and agreements which by their terms contemplate performance after the Closing Date shall survive the Closing indefinitely.

(d) The period for which a representation or warranty, covenant or agreement survives the Closing is referred to herein as the “Applicable Survival Period.” In the event notice of claim for indemnification under Section 10.2 or 10.3 is given within the Applicable Survival Period, the representation or warranty, covenant or agreement that is the subject of such indemnification claim (whether or not formal legal action shall have been commenced based upon such claim) shall survive with respect to such claim until such claim is finally resolved. The Indemnitor shall indemnify the Indemnitee for all Losses (subject to the limitations set forth herein, if applicable) that the Indemnitee may incur in respect of such claim, regardless of when incurred.

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10.2 Indemnification by Parent and Seller.

(a) Parent and Seller shall, jointly and severally, indemnify and defend Buyer and its Affiliates and their respective stockholders, members, managers, officers, directors, employees, agents, successors and assigns (the “Buyer Indemnitees”) against, and shall hold them harmless from, any and all Losses resulting from, arising out of, or incurred by any Buyer Indemnitee in connection with, or otherwise with respect to:

(i) any breach of or any inaccuracy in any representation or warranty of Parent or Seller contained in any Schedule, certificate or other document delivered pursuant to this Agreement or any breach of or any inaccuracy in any representation or warranty of Parent or Seller contained in Article IV made as of the date hereof and as though restated on and as of the Closing Date, as may be qualified by the Schedules thereto and;

(ii) any breach of or failure by Parent or Seller to perform any agreement, covenant or obligation of Parent or Seller contained in this Agreement or any document delivered by Parent or Seller to Buyer at the Closing;

(iii) any Liability in any way related to, or arising out of or in connection with, any Subsidiary of Parent or Seller and/or the dissolution thereof;

(iv) any Excluded Liability, regardless of whether or not the Seller Disclosure Schedule discloses any such Excluded Liability;

(v) any fees, expenses or other payments incurred or owed by Parent or Seller to any agent, broker, investment banker or other firm or person retained or employed by it in connection with the transactions contemplated by this Agreement and the Ancillary Agreements; and

(vi) fraudulent transfer Laws or the failure to comply with any bulk sales Laws and similar Laws.

(b) Parent and Seller shall not be liable for any Loss or Losses pursuant to Section 10.2(a)(i) (“Buyer Warranty Losses”) (i) unless and until the aggregate amount of all Buyer Warranty Losses incurred by the Buyer Indemnitees exceeds $[****], in which event Seller shall be liable for all Buyer Warranty Losses from the first dollar, and (ii) to the extent that Buyer Warranty Losses exceed $[****] in the aggregate; provided, however, that the foregoing clauses (i) and (ii) shall not apply to any Loss or Losses resulting from, arising out of or incurred by any Buyer Indemnitee in connection with, or otherwise with respect to, any Excluded Liabilities; provided, further, nothing contained in this Section 10.2(b) shall be deemed to limit or restrict in any manner any rights or remedies which Buyer has, or might have, at Law, in equity or otherwise, based on fraud or a willful misrepresentation or willful breach of warranty hereunder.

(c) Parent and Seller hereby expressly acknowledge and agree that (i) in the case that Buyer is required to make an out-of-pocket cash payment with respect to any Buyer Warranty Losses (a “Cash Payment”), Buyer shall have the right to receive payment of any and all amounts owed to any Buyer Indemnity pursuant to this Article X (or any portion thereof) in

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cash from Parent or (ii) in the case that Buyer is not required to make a Cash Payment, Buyer shall have the right to be fully and completely offset against and recoup from any and all amounts owed to any Buyer Indemnity pursuant to this Article X (or any portion thereof); provided, however, that any such offset or recoupment shall be made by reducing the principal amount of the Note due to Seller; provided, further, that notwithstanding the foregoing, if such Buyer Warranty Losses exceed the principal amount of the Note, Buyer shall have the right to receive payment of the amount of such excess in cash.

10.3 Indemnification by PW and Buyer.

(a) PW and Buyer shall, jointly and severally, indemnify and defend Seller and its Affiliates and their respective stockholders, members, managers, officers, directors, employees, agents, successors and assigns (the “Seller Indemnitees”) against, and shall hold them harmless from, any and all Losses resulting from, arising out of, or incurred by any Seller Indemnitee in connection with, or otherwise with respect to:

(i) any breach of or any inaccuracy in any representation or warranty of PW or Buyer contained in any Schedule, certificate or other document delivered pursuant to this Agreement or any breach of or any inaccuracy in any representation or warranty of PW or Buyer contained in Article V made as of the date hereof and as though restated on and as of the Closing Date, as may be qualified by the Schedules thereto;

(ii) any breach of or failure by PW or Buyer to perform any agreement, covenant or obligation of PW or Buyer contained in this Agreement or any document delivered by PW or Buyer to Parent or Seller at the Closing; any Assumed Liability; and

(iii) any fees, expenses or other payments incurred or owed by PW or Buyer to any agent, broker, investment banker or other firm or person retained or employed by it in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.

(b) PW and Buyer shall not be liable for any Loss or Losses pursuant to 10.3(a)(i) (“Seller Warranty Losses”) (i) unless and until the aggregate amount of all Seller Warranty Losses incurred by the Seller Indemnitees exceeds $[****] in which event Buyer shall be liable for all Seller Warranty Losses from the first dollar, and (ii) to the extent that Seller Warranty Losses exceed $[****] in the aggregate.

(c) PW and Buyer hereby expressly acknowledge and agree that Parent or Seller shall have the right to at their election to receive payment of any and all amounts owed to any Seller Indemnified Party pursuant to this Article X (or any portion thereof) in cash from PW or Buyer or to be fully and completely offset against and recoup from any and all amounts owed to any Seller Indemnified Party pursuant to this Article X (or any portion thereof). Any offset or recoupment shall be made, at the Parent or Seller’s option, by increasing the principal amount of the Note due to Seller.

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10.4 Indemnification Procedures for Third Party Claims.

(a) In the event that an Indemnitee receives notice of the assertion of any claim or the commencement of any Action by a third party in respect of which indemnity may be sought under the provisions of this Article X (“Third Party Claim”), the Indemnitee shall promptly notify the Indemnitor in writing of such Third Party Claim (“Notice of Claim”). Failure or delay in notifying the Indemnitor will not relieve the Indemnitor of any Liability it may have to the Indemnitee, except and only to the extent that such failure or delay causes actual increased Liability to the Indemnitor with respect to such Third Party Claim. The Notice of Claim shall set forth the amount, if known, or, if not known, an estimate of the foreseeable maximum amount of claimed Losses (which estimate shall not be conclusive of the final amount of such Losses) and a description of the basis for such Third Party Claim.

(b) Subject to the further provisions of this Section 10.4, the Indemnitor will have 30 days (or less if the nature of the Third Party Claim requires) from the date on which the Indemnitor received the Notice of Claim to notify the Indemnitee that the Indemnitor will assume the defense or prosecution of such Third Party Claim and any litigation resulting therefrom with counsel of its choice and at its sole cost and expense (a “Third Party Defense”). If the Indemnitor assumes the Third Party Defense in accordance with the preceding sentence, the Indemnitor shall be conclusively deemed to have acknowledged that the Third Party Claim is within the scope of its indemnity obligation hereunder and shall hold the Indemnitee harmless from and against the full amount of any Losses resulting therefrom (subject to the terms and conditions of this Agreement). Any Indemnitee shall have the right to employ separate counsel in any such Third Party Defense and to participate therein, but the fees and expenses of such counsel shall not be at the expense of the Indemnitor unless (A) the Indemnitor shall have failed, within the time after having been notified by the Indemnitee of the existence of the Third Party Claim as provided in the first sentence of this paragraph (b), to assume the defense of such Third Party Claim, or (B) the employment of such counsel has been specifically authorized in writing by the Indemnitor.

(c) The Indemnitor will not be entitled to assume the Third Party Defense if:

(i) the Third Party Claim seeks, in addition to or in lieu of monetary damages, any injunctive or other equitable relief (except where non-monetary relief is merely incidental to a primary claim or claims for monetary damages);

(ii) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation or with respect to Buyer, a regulatory proceeding with any Governmental Entity;

(iii) under applicable standards of professional conduct, a conflict on any significant issue exists between the Indemnitee and the Indemnitor in respect of the Third Party Claim; or

(d) the Third Party Claim involves Purchased Assets, Transferred Employees or a party to an Assigned Contract (other than a third party claim relating to the transfer of the Purchased Assets pursuant to this Agreement). If by reason of the Third Party Claim a Lien, attachment, garnishment or execution is placed upon any of the property or assets of the Indemnitee, the Indemnitor, if it desires to exercise its right to assume such Third Party Defense, must

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furnish a satisfactory indemnity bond to obtain the prompt release of such Lien, attachment, garnishment or execution.

(e) If the Indemnitor assumes a Third Party Defense, it will take all steps necessary in the defense, prosecution, or settlement of such claim or litigation and will hold all Indemnitees harmless from and against all Losses caused by or arising out of such Third Party Claim (subject to the last sentence of Section 10.4(b)). The Indemnitor will not consent to the entry of any judgment or enter into any settlement except with the written consent of the Indemnitee to which the Indemnitor is obligated to furnish indemnification pursuant to this Agreement; provided that the consent of the Indemnitee shall not be required if all of the following conditions are met: (i) the Indemnitee has assumed the defense of the Third Party Claim in accordance with the terms of this Agreement, (ii) the terms of the judgment or proposed settlement include as an unconditional term thereof the giving to the Indemnitees by the third party of a release of the Indemnitees from all Liability in respect of such Third Party Claim, (iii) there is no finding or admission of (A) any violation of Law by the Indemnitees (or any Affiliate thereof) and (B) any effect on any other Action or claims of a similar nature that may be made against the Indemnitees (or any Affiliate thereof), and (iv) the sole form of relief is monetary damages which are paid in full by the Indemnitor. The Indemnitor shall conduct the defense of the Third Party Claim actively and diligently, and the Indemnitee will provide reasonable cooperation in the defense of the Third Party Claim. So long as the Indemnitor is reasonably conducting the Third Party Defense in good faith, the Indemnitee will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnitor (not to be unreasonably withheld or delayed). Notwithstanding the foregoing, the Indemnitee shall have the right to pay or settle any such Third Party Claim; provided that, in such event, subject to the following sentence, it shall waive any right to indemnity therefor by the Indemnitor for such claim unless the Indemnitor shall have consented to such payment or settlement (such consent not to be unreasonably withheld or delayed).

(f) In the event that (i) an Indemnitee gives Notice of Claim to the Indemnitor and the Indemnitor fails or elects not to assume a Third Party Defense which the Indemnitor had the right to assume under this Section 10.4 or (ii) the Indemnitor is not entitled to assume the Third Party Defense pursuant to this Section 10.4, the Indemnitee shall have the right, with counsel of its choice, to defend, conduct and control the Third Party Defense, at the sole cost and expense of the Indemnitor. In each case, the Indemnitee shall conduct the Third Party Defense actively and diligently, and the Indemnitor will provide reasonable cooperation in the Third Party Defense. The Indemnitee shall have the right to consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim on such terms as it may deem appropriate; provided, however, that (i) the Indemnitee shall not enter into any settlement, compromise, discharge of a Third Party Claim without the prior written consent of the Indemnitor (which shall not be unreasonably withheld, conditioned or delayed) and (ii) the amount of any settlement made or entry of any judgment consented to by the Indemnitee without the consent of the Indemnitor shall not be determinative of the validity of the claim, except with the consent of the Indemnitor (not to be unreasonably withheld or delayed). If the Indemnitor does not elect to assume a Third Party Defense which it has the right to assume hereunder, the Indemnitee shall have no obligation to do so.

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(g) Each party to this Agreement shall use its commercially reasonable efforts to cooperate and to cause its employees to cooperate with and assist the Indemnitee or the Indemnitor, as the case may be, in connection with any Third Party Defense, including attending conferences, discovery proceedings, hearings, trials and appeals and furnishing Records, information and testimony, as may reasonably be requested; provided that each party shall use its best efforts, in respect of any Third Party Claim of which it has assumed the defense, to preserve the confidentiality of all confidential information and the attorney-client and work-product privileges.

10.5 Indemnification Procedures for Non-Third Party Claims. In the event of a claim that does not involve a Third Party Claim being asserted against it, the Indemnitee shall send a Notice of Claim to the Indemnitor. The Notice of Claim shall set forth the amount, if known, or, if not known, an estimate of the foreseeable maximum amount of claimed Losses (which estimate shall not be conclusive of the final amount of such Losses) and a description of the basis for such claim, it being agreed by the parties that nothing herein shall be deemed to prevent an Indemnitee from making a claim hereunder for claims or demands that have not yet required the payment of money. The Indemnitor will have 30 days from receipt of such Notice of Claim to dispute the claim and will reasonably cooperate and assist the Indemnitee in determining the validity of the claim for indemnity. If the Indemnitor does not give notice to the Indemnitee that it disputes such claim within 30 days after its receipt of the Notice of Claim, the claim specified in such Notice of Claim will be conclusively deemed a Loss subject to indemnification hereunder.

10.6 Effect of Investigation; Waiver. An Indemnitee’s right to indemnification or other remedies based upon the representations and warranties and covenants and agreements of the Indemnitor will not be affected by any investigation or knowledge of the Indemnitee or any waiver by the Indemnitee of any condition based on the accuracy of any representation or warranty, or compliance with any covenant or agreement. Such representations and warranties and covenants and agreements shall not be affected or deemed waived by reason of the fact that the Indemnitee knew or should have known that any representation or warranty might be inaccurate or that the Indemnitor failed to comply with any agreement or covenant. Any investigation by such party shall be for its own protection only and shall not affect or impair any right or remedy hereunder.

10.7 Other Rights and Remedies.

(a) After the Closing, the indemnification rights of the parties under this Article X are the sole and exclusive rights and remedies the parties may have at Law or in equity for any misrepresentation or breach of warranty hereunder on the part of any party hereto; provided, however, that nothing contained in this Section 10.7(a) (i) shall limit the right to seek specific performance for any failure to perform any covenant or agreement, and (ii) shall be deemed to limit or restrict in any manner any rights or remedies which the parties have, or might have, at Law, in equity or otherwise, based on fraud or a willful misrepresentation or willful breach of warranty hereunder.

(b) Except with respect to Third Party Claims, no party hereto shall be liable for, and the parties acknowledge and agree that the term “Losses” expressly excludes, any consequential, treble, punitive or other damages not expressly provided for in this Article X.

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(c) The amount of any Losses incurred by PW and Buyer shall be reduced by the net amount PW or Buyer or any of their subsidiaries recovers (after deducting all attorneys’ fees, expenses and other costs of recovery) from any insurer or other party liable for such Losses. PW and Buyer and their subsidiaries shall use commercially reasonable efforts to effect any such recovery. The amount of any Losses incurred by Seller and Parent shall be reduced by the net amount Seller or Parent or any of their subsidiaries recovers (after deducting all attorneys’ fees, expenses and other costs of recovery) from any insurer or other party liable for such Losses. Seller and Parent and their subsidiaries shall use commercially reasonable efforts to effect any such recovery.

(d) If PW or Buyer or any of their Subsidiaries receives an amount under insurance coverage or from any Person with respect to Losses sustained at any time subsequent to any payment to PW pursuant to this Article X, then PW shall promptly reimburse Seller for any payment made up to such amount received by PW or Buyer, as applicable. If Seller or Parent or any of their Subsidiaries receives an amount under insurance coverage or from any Person with respect to Losses sustained at any time subsequent to any payment to Parent pursuant to this Article X, then Parent shall promptly reimburse Buyer for any payment made up to such amount received by Seller or Parent, as applicable.

10.8 Tax Treatment of Indemnification Payments. Except as otherwise required by Law, Buyer and Seller agree to treat any payments made pursuant to the indemnification provisions of this Agreement as an adjustment to the Purchase Price for Tax purposes.

ARTICLE XI

MISCELLANEOUS

11.1 Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given (a) on the date established by the sender as having been delivered personally, (b) on the date delivered by a private courier as established by the sender by evidence obtained from the courier, (c) on the date sent by e-mail following the recipients confirmation of receipt, if sent during normal business hours of the recipient, if not, then on the next business day following such confirmation of receipt, or (d) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must be addressed as follows:

If to PW or Buyer, to:

Penson Worldwide, Inc.

1700 Pacific Avenue, Suite 1400

Dallas, TX 75201

Attn: Andrew Koslow, Esq.

Facsimile: (214) 217-5096

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With a required copy to:

Morgan, Lewis & Bockius LLP

3000 El Camino Real

Two Palo Alto Square

Palo Alto, CA 94306

Attn: Tom Kellerman, Esq.

Facsimile: (650) 843-4001

If to Parent or Seller, to:

Broadridge Financial Solutions, Inc.

1981 Marcus Avenue

Lake Success, NY 11042

Attn: Adam D. Amsterdam, Esq.

E-mail: as delivered in writing to PW as provided above

or to such other address or to the attention of such Person or Persons as the recipient party has specified by prior written notice to the sending party (or in the case of counsel, to such other readily ascertainable business address as such counsel may hereafter maintain). If more than one method for sending notice as set forth above is used, the earliest notice date established as set forth above shall control.

11.2 Amendments and Waivers.

(a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.

(b) No failure or delay by any party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(c) To the maximum extent permitted by Law, (i) no waiver that may be given by a party shall be applicable except in the specific instance for which it was given and (ii) no notice to or demand on one party shall be deemed to be a waiver of any obligation of such party or the right of the party giving such notice or demand to take further action without notice or demand.

11.3 Expenses. Except as otherwise expressly provided herein, each party shall bear its own costs and expenses in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby, including all legal, accounting, financial advisory,

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consulting and all other fees and expenses of third parties, whether or not the transactions contemplated by this Agreement are consummated.

11.4 Successors and Assigns. This Agreement may not be assigned by either party hereto without the prior written consent of the other party. Subject to the foregoing, all of the terms and provisions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective executors, heirs, personal representatives, successors and assigns.

11.5 Governing Law. This Agreement and Schedules hereto shall be governed by and interpreted and enforced in accordance with the Laws of the State of New York, without giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of New York.

11.6 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

11.7 Obligations of PW and Parent. PW shall ensure that Buyer duly performs, satisfies and discharges on a timely basis each of the covenants, obligations and liabilities of Buyer under this Agreement, and PW shall be jointly and severally liable with Buyer for the performance of the covenants and obligations of Buyer under this Agreement. Parent shall ensure that Seller duly performs, satisfies and discharges on a timely basis each of the covenants, obligations and liabilities of Seller under this Agreement, and Parent shall be jointly and severally liable with Seller for the performance of the covenants and obligations of Seller under this Agreement.

11.8 Counterparts. This Agreement may be executed in any number of counterparts, and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. The parties agree that the delivery of this Agreement, and the delivery of the Ancillary Agreements and any other agreements and documents at the Closing, may be effected by means of an exchange of facsimile signatures with original copies to follow by mail or courier service.

11.9 Third Party Beneficiaries. No provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder; except that in the case of Article X hereof, the other Indemnitees and their respective heirs, executors, administrators, legal representatives, successors and assigns, are intended third party beneficiaries of such sections and shall have the right to enforce such sections in their own names.

11.10 Entire Agreement. This Agreement, the Ancillary Agreements, the Schedules and the other documents, instruments and agreements specifically referred to herein or therein or delivered pursuant hereto or thereto set forth the entire understanding of the parties hereto with respect to the transactions contemplated by this Agreement. All Schedules referred to herein are

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intended to be and hereby are specifically made a part of this Agreement. Any and all previous agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement, except for the Confidentiality Agreement which shall continue in full force and effect in accordance with its terms.

11.11 Captions. All captions contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.

11.12 Severability. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11.13 Specific Performance. Prior to Closing, and as set forth in Sections 6.4 and 10.8 hereof, the parties each agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof and that each party shall be entitled to specific performance of the terms hereof, in addition to any other remedy at Law or equity.

11.14 Interpretation.

(a) The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting either gender shall include both genders as the context requires. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

(b) The terms “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

(c) When a reference is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement unless otherwise specified.

(d) The word “include”, “includes”, and “including” when used in this Agreement shall be deemed to be followed by the words “without limitation”, unless otherwise specified.

(e) A reference to any party to this Agreement or any other agreement or document shall include such party’s predecessors, successors and permitted assigns.

(f) Reference to any Law means such Law as amended, modified, codified, replaced or reenacted, and all rules and regulations promulgated thereunder.

(g) A reference to any Governmental Entity shall include such entity’s predecessors and successors.

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(h) The parties have participated jointly in the negotiation and drafting of this Agreement and the Ancillary Agreements. Any rule of construction or interpretation otherwise requiring this Agreement or the Ancillary Agreements to be construed or interpreted against any party by virtue of the authorship of this Agreement or the Ancillary Agreements shall not apply to the construction and interpretation hereof and thereof.

(i) All accounting terms used and not defined herein shall have the respective meanings given to them under GAAP.

11.15 Independent Investigation.

(a) Each of PW and Buyer has conducted its own independent review and analysis of the business, operations, technology, assets, liabilities, results of operations, financial condition and prospects of the Purchased Assets and any financial statements relating thereto, and acknowledges that the Seller has provided PW and Buyer with access to the personnel, properties, premises and books and records of the Seller for this purpose. In entering into this Agreement, each of PW and Buyer has relied solely upon its own investigation and analysis, and each of PW and Buyer acknowledges and agrees that, except for the specific representations and warranties of the Parent and Seller contained in Article IV hereof, none of the Parent, Seller or their respective Affiliates nor any of their respective shareholders, controlling Persons or representatives makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information (including any statement, certificate, document or agreement delivered pursuant hereto and any financial statements and any projections, estimates or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, supplemental information or other materials or information with respect to any of the above) or otherwise made available to PW, Buyer or any of their Affiliates, shareholders, controlling Persons or representatives; provided, however, nothing contained in this Section 11.15(a) shall be deemed to limit or restrict in any manner any rights or remedies which PW or Buyer has, or might have, at Law, in equity or otherwise, based on fraud or a willful misrepresentation or willful breach of warranty hereunder or with respect to any Excluded Liabilities.

(b) Each of Parent and Seller has conducted its own independent review and analysis of the business, operations, technology, assets, liabilities, results of operations, financial condition and prospects of PW and its financial statements and acknowledges that PW and the Buyer have provided Parent and Seller with access to the personnel, properties, premises and books and records of PW and the Buyer for this purpose. In entering into this Agreement, each of Parent and Seller has relied solely upon its own investigation and analysis, and each of Parent and Seller acknowledges and agrees that, except for the specific representations and warranties of PW and the Buyer contained in Article V hereof, none of PW, the Buyer or their respective Affiliates nor any of their respective shareholders, controlling Persons or representatives makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information (including any statement, certificate, document or agreement delivered pursuant hereto and any financial statements and any projections, estimates or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, supplemental information or other materials or information with respect to any of the above) or otherwise made available to Parent, Seller or any of their Affiliates,

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shareholders, controlling Persons or representatives; provided, however, nothing contained in this Section 11.15(b) shall be deemed to limit or restrict in any manner any rights or remedies which Parent or Seller has, or might have, at Law, in equity or otherwise, based on fraud or a willful misrepresentation or willful breach of warranty hereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

PENSON WORLDWIDE, INC.
By: /s/ Daniel P. Son
Name:	Daniel P. Son
Title:	President
PENSON FINANCIAL SERVICES, INC.
By: /s/ Daniel P. Son
Name:	Daniel P. Son
Title:	President
BROADRIDGE FINANCIAL SOLUTIONS, INC.
By: /s/ John Hogan
Name:	John Hogan
Title:	President
RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.
By: /s/ Joseph Barra
Name:	Joseph Barra
Title:	President

Exhibit A

Reference is made to Exhibit 10.1 filed with this 10-Q which is incorporated herein by reference.

Exhibit B

CGR DRAFT 10-29-09

FORM OF SELLER NOTE

$                     ,         

1. FOR VALUE RECEIVED, the undersigned, PENSON WORLDWIDE, INC., a Delaware corporation (the “Company” or “Issuer”), hereby promises to pay to the order of [            ] (“Payee”) the principal amount of $[            ]¹ (the “Initial Amount”), subject to adjustment as provided in this Note (if adjusted, the “Adjusted Amount”) on the Maturity Date (or, if such day is not a Business Day, on the immediately succeeding Business Day), subject to the provisions herein. The Issuer further promises to pay interest on the unpaid principal amount of this Note from time to time at a rate per annum equal to the LIBOR Rate plus an amount (the “Spread”) equal to plus five and one-half percent (5.50%). Interest on this Note shall be due and payable quarterly in arrears in cash on each [December 31, March 31, June 30 and September 30] of each calendar year, provided that if any such day is not a Business Day, payment shall be made on the immediately succeeding Business Day. Notwithstanding the foregoing, while an Event of Default is continuing the Spread shall, to the extent permitted by applicable law, increase by 2.00%, and the Spread will be increased by an additional 2.00% each additional 90 days the Event of Default remains uncured or unwaived, subject to a maximum Spread of 12.0%. After the cure or waiver of any such Event of Default and provided no other Events of Default are then continuing, the Spread shall return to 5.50%.

Payments of principal hereof and interest hereon shall be made in Dollars in immediately available funds to such account of the Noteholder located in New York, New York, as the Noteholder may designate in writing to the Issuer.

2. Prepayments; Optional Prepayment. Subject to the provisions herein, the Issuer may, at any time and from time to time prior to the Maturity Date, prepay the principal amount of this Note, in whole or in part, without penalty or premium, on any Business Day. Prepayments of this Note must be accompanied by payment of accrued and unpaid interest on the principal amount prepaid to and including the date of payment.

3. Negative Covenants. So long as any principal of and interest on this Note or any other amount payable hereunder remains unpaid or unsatisfied:

(a) Mergers and Consolidations. The Issuer shall not merge or consolidate with or into any Person or sell all or substantially all of its assets, except that so long as both prior to and subsequent to such merger or consolidation, no Event of Default has occurred and is continuing, the Issuer may merge or consolidate with any Person, provided

¹ Note to be executed by Ridge Clearing & Outsourcing Solutions, Inc. (“Seller”), or an affiliate of Seller (as determined by Seller).

that (x) the Issuer shall be the continuing or surviving Person or (y) if the Issuer shall not be the surviving Person, such surviving Person shall have assumed the obligations of the Issuer hereunder pursuant to documentation in form and substance reasonably satisfactory to the Noteholder (each such merger or consolidation, a “Permitted Merger”).

(b) Liens. The Issuer shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired to secure Indebtedness without making, or causing such Subsidiary to make effective provision for securing this Note equally and ratably with such Indebtedness or in the event such Indebtedness is subordinate in right of payment to this Note, prior to such Indebtedness, as to such property or assets for so long as such Indebtedness shall be secured. The foregoing restrictions shall not apply to the following Liens:

(A) Liens existing on the date hereof;

(B) Liens securing the Credit Agreement (including any modification, replacement, renewal or extension of any such Lien in connection with the modification, renewal, replacements, extension, amendment or amendment and restatement of the Credit Agreement);

(C) Liens permitted by the Credit Agreement;

(D) Liens securing Cash Management Obligations, Hedging Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any guarantees thereof;

(E) Liens arising from judgments or orders for the payment of money;

(F) Liens (I) on cash advances in favor of the seller of any property to be acquired in an investment to be applied against the purchase price for such investment or (II) consisting of an agreement to dispose of any property;

(G) Liens existing on property at the time of its acquisition or existing on the property of any Person at the time such Person becomes a Subsidiary;

(H) Liens in connection with any sale-leasebacks;

(I) Liens in connection with any credit facility or other lending arrangement entered into by a Regulated Subsidiary to finance operations in the ordinary course of business;

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(J) Liens on assets of a Regulated Subsidiary resulting from the lending of securities and repurchase and reverse repurchase agreements;

(K) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings;

(L) Liens of materialmen, mechanics, warehousemen, carriers or employees or other similar Liens arising by operation of law in the ordinary course of business;

(M) Liens consisting of deposits or pledges to secure the performance of bids, trade contracts, leases, public or statutory obligations, or other obligations of a like nature incurred in the ordinary course of business;

(N) Liens upon or in any assets acquired or held to secure the purchase price of such assets or Indebtedness incurred for the purpose of financing the acquisition of such assets to secure Indebtedness not exceeding

(x) if the Credit Agreement (including any agreement that refinances or replaces the Credit Agreement) is in effect (regardless of whether any indebtedness is outstanding thereunder) $25,000,000 in the aggregate under this clause (N) without prejudice to any other clause hereof or

(y) if the Credit Agreement (including any agreement that refinances or replaces the Credit Agreement) is terminated or otherwise no longer in effect (and not replaced), an amount not to exceed 15% of the Company’s net revenues for the trailing twelve month period (based on the latest period for which internal financial statements are available),

in each case, provided that the Liens are restricted to such assets and the proceeds thereof; it being understood that any Lien that was permitted to be incurred as of the date of incurrence shall not violate subsection (y) solely as a result of a subsequent decline in the Issuer’s net revenues;

(O) restrictions and other minor encumbrances on real property which do not in the aggregate materially impair the use or value of such property;

(P) the rights of licensors or lessors of property under the license or lease agreements related thereto;

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(Q) Liens which constitute rights of set-off or bankers’ liens or securities intermediaries’ liens whether arising by operation of law or by contract; and

(R) the modification, replacement, renewal or extension of any Lien permitted under this Section 3(b) (other than Section 3(b)(B)).

(c) Convertible Notes. Borrower will not voluntarily redeem, purchase or otherwise voluntarily prepay its 8.00% Senior Convertible Notes due 2014 prior to maturity.

4. Events of Default. The following are “Events of Default”:

(a) The Issuer fails to pay any interest or principal of this Note as and on the date when due and such failure shall continue unremedied for more than 3 (three) Business Days; or

(b) (i) The Issuer fails to perform or observe any term, covenant or agreement contained in Section 3(a) hereof or (ii) the Issuer fails to perform or observe any other covenant or agreement (not specified in the preceding clause (b)(i)) contained in this Note on its part to be performed or observed and in the case of this clause (ii) such failure continues unremedied for 45 days; or

(c) The occurrence of a Change of Control; or

(d) An event of default has occurred and is continuing under any agreement in respect of Indebtedness with an outstanding principal amount in excess of $50,000,000 or under the Credit Agreement resulting in such Indebtedness or the Credit Agreement being or being declared due and payable (or such default is a failure to pay at maturity); provided, however, if any such acceleration of Indebtedness has been rescinded, there shall no longer be any Event of Default under this Section 4(d) with respect to such acceleration; or

(e) The Issuer or any Material Subsidiary institutes any proceeding under any Debtor Relief Law, or makes a general assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered, or consented to by such Person, in any such proceeding or an order for the liquidation of any such Person is entered in any such proceeding or any such Person admits in writing its inability to pay its debts generally as they become due (such proceedings collectively, the “Insolvency Proceedings”); or

(f) Any termination of the Outsourcing Agreement, as such term is defined in the Asset Purchase Agreement, (x) by the Noteholder, pursuant to the exercise of remedies

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for a material breach of the Outsourcing Agreement by the Issuer entitling such termination or (y) by the Issuer, for any reason (other than a termination by the Issuer for a material breach or material failure to perform by the Payee including the exercise of any termination right pursuant to any service level agreement).

Upon the occurrence and during the continuation of an Event of Default, the Noteholder may declare all sums outstanding hereunder, including all interest thereon, to be immediately due and payable, whereupon the same shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived; provided, however, that upon the occurrence of an actual entry of an order for relief with respect to the Issuer under the Bankruptcy Code, all sums outstanding hereunder including all interest thereon, shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived.

5. Guarantees. (i) The Issuer will not permit any of its subsidiaries to Guarantee any Indebtedness of the Issuer, other than the Credit Agreement and except as permitted by the Credit Agreement and except to the extent a Lien of such Indebtedness would be permitted under Section 3(b) above ,and (ii) the Issuer will not permit any of its subsidiaries to Guarantee any Indebtedness issued to a seller for the purposes of financing the acquisition of substantially all the assets of a business, unless in each case such subsidiary, concurrently with the incurrence of any such Guarantee, executes and delivers to the Noteholder a guarantee of the Issuer’s obligations under this Note, in the substantially the same form or otherwise in a form and substance reasonably satisfactory to the Noteholder.

6. Adjustment of Principal Amount in Certain Cases.

(a) This Note has been issued in connection with the Asset Purchase Agreement. In accordance with the Asset Purchase Agreement, the principal amount of this Note may, at the Issuer’s option, be reduced by the amount of any Claims of the Issuer or increased by the amount of any Claims of the Payee.

(b) For the purposes of this Note, “Claims” shall mean, as determined pursuant to the Asset Purchase Agreement, (i) any Purchase Price Adjustment and (ii) any and all Losses (as defined in the Asset Purchase Agreement) in respect of which Issuer or the Payee is entitled to indemnification pursuant to the Asset Purchase Agreement and in accordance with the Asset Purchase Agreement the principal amount of this Note may be adjusted. Payee is authorized to record any such adjustment on the grid attached to this Note in the columns provided therefor and after such record is made, Payee will promptly furnish to Issuer a copy of the Note reflecting such adjustment; provided that the failure to do so will not affect the validity of any adjustment made in accordance with the provisions of the Asset Purchase Agreement and this Note.

7. Successors and Assigns. The provisions of this Note shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Issuer nor any Guarantor may assign its rights and obligations under

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this Note other than pursuant to a Permitted Merger. The Noteholder may at any time assign its rights and obligations under this Note to any other Person.

8. Definitions. As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) 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 the ownership of voting securities, by contract or otherwise.

“Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of November 2, 2009, among the Company, Buyer, Parent and Seller.

“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, as codified as 11 U.S.C. Section 101 et seq.

“Business Day” means any day other than Saturday, Sunday or other day on which the New York Stock Exchange is authorized or required by Law to close.

“Capitalized Lease” means a lease under which the Issuer or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

“Cash Management Obligations” means any obligations of the Issuer or any Subsidiary in respect of overdrafts and related liabilities arising from treasury, depository or cash management services.

“CFTC” means the Commodity Futures Trading Corporation, or any successor thereto.

“Change of Control” means

(i) an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding the Company, its subsidiaries, any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) (any such person or group, an “Acquiror” ) files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that, or the Issuer otherwise becomes aware that, such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of 50% or more of the equity securities of the Issuer entitled to vote for members of the board of directors or equivalent governing body of the Issuer (“Issuer Voting Securities”) on a fully diluted basis (a “Control Interest”);

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(ii) all or substantially all of the assets of the Issuer (on a consolidated basis) are sold or otherwise transferred to any person in one transaction or a series of related transactions in which, immediately after the consummation thereof, the holders of the majority of the Issuer Voting Securities prior to such transaction to not represent a majority of the Issuer Voting Securities or of the equity interests of the surviving or transferee person; or

(iii) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the Issuer.

“Company” has the meaning set forth in Section 1.

“Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of May 1, 2009, with Regions Bank, as Administrative Agent, Swing Line Lender and Letter of Credit Issuer, the lenders party thereto and other parties thereto, as amended by that certain First Amendment dated as of May 27, 2009 and Second Amendment dated as of September 22, 2009 (together with all exhibits and schedules thereto, as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified in writing from time to time) and any extension, renewal, replacement or refinancing of such credit facility from time to time.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Dollar” means lawful money of the United States.

“Events of Default” has the meaning specified in Section 4.

“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successors thereto.

“FSA” means the Financial Services Authority, or any successor thereto.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

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“Guarantee” by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, and (g) all obligations under Capitalized Leases.

“Interest Period” means the period commencing on the date of the initial borrowing under the Note (or the continuation of any prior interest period) and ending on the date three months thereafter; provided that:

(i) any Interest Period that would otherwise end on a day that is not a business day shall be extended to the next succeeding business day unless such business day falls in another calendar month, in which case such Interest Period shall end on the next preceding business day;

(ii) any Interest Period that begins on the last business day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“Insolvency Proceedings” has the meaning specified in Section 4(e).

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“LIBOR Rate” means, for any Interest Period, an interest rate per annum equal to the 90-day rate per annum obtained by dividing (a) the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in Dollars at 11:00 A.M. (London time) two business days before the first day of such Interest Period for a period equal to such Interest Period (provided that, if for any reason such rate is not available, the term “LIBOR Rate” shall mean, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the LIBOR Rate Reserve Percentage for such Interest Period.

“LIBOR Rate Reserve Percentage” for any Interest Period means the reserve percentage applicable two business days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time) (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on LIBOR Rate Loans is determined) having a term equal to such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Loss” has the meaning ascribed to such term in the Asset Purchase Agreement.

“Material Subsidiary” means any Subsidiary of the Company which at the date of determination is a “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934 (as such Regulation is in effect on the date hereof).

“Maturity Date” means [INSERT DATE FIVE YEARS FROM DATE OF NOTE]²

“Note” means this Senior Note, as amended, restated, extended, supplemented or otherwise modified in writing from time to time.

² To be dated the 5th anniversary of the closing date.

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“Noteholder” means the Payee and its permitted successors and assigns.

“Payee” has the meaning set forth in Section 1.

“Permitted Merger” has the meaning specified in Section 3(a).

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Purchase Price Adjustment” has the meaning ascribed to such term in Section 2.6 of the Asset Purchase Agreement.

“Regulated Subsidiary” means any Subsidiary registered or regulated as a broker or dealer with or by the SEC, FINRA, FSA, CFTC or any other applicable governmental authority, whether domestic or foreign.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Issuer.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time.

9. Miscellaneous.

(a) This Note is subject to the terms and conditions of the Subordination Agreement dated as of [    ], 2010 among [Seller] and Regions Bank, as administrative agent on behalf of the Lenders party to the Credit Agreement (as amended, restated or otherwise modified from time to time, the “Subordination Agreement”). The Payee agrees that, upon the request of the Company and the agent or trustee (or other person performing a similar function) under the Credit Agreement, Payee will promptly execute and deliver a written subordination agreement substantially in the form of the Subordination Agreement.

(b) No amendment or waiver of any provision of this Note and no consent by the Noteholder to any departure therefrom by the Issuer shall be effective unless such amendment, waiver or consent shall be in writing and signed by the Noteholder, and any such amendment, waiver or consent shall then be effective only for the period and on the conditions and for the specific instance specified in such writing. No failure or delay by the Noteholder in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other rights, power or privilege.

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(c) Except as otherwise expressly provided herein, notices and other communications to each party provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed or sent by telecopy to the address provided from time to time by such party. All notices and other communications shall be effective upon receipt.

(d) If any provision of this Note is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Note shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(e) THIS NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE. THE ISSUER AND NOTEHOLDER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT AND EACH STATE COURT IN THE CITY OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. THE ISSUER AND NOTEHOLDER EACH IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE ISSUER OR NOTEHOLDER AT ITS ADDRESS SET FORTH BENEATH ITS SIGNATURE HERETO. THE ISSUER AND THE NOTEHOLDER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(f) THE ISSUER AND THE NOTEHOLDER EACH WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(g) THIS NOTE AND THE ASSET PURCHASE AGREEMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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PENSON WORLDWIDE, INC.
By:
	Name:
	Title:
[PAYEE]
By:
	Name:
	Title:

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Grid for Recording Adjusted Amount

Date Amount of Increase (Decrease) to   Principal Amount Adjusted Amount Entered By

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Exhibit C

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT

This BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), is executed as of [ • ] by and between Ridge Clearing & Outsourcing Solutions, Inc., a New York corporation (“Seller”), and Penson Financial Services, Inc., a North Carolina corporation (“Buyer”). Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Asset Purchase Agreement (as defined hereinafter).

WHEREAS, this Agreement is being entered into in connection with the transactions contemplated by that certain Asset Purchase Agreement dated as of [ • ] by and among Penson Worldwide, Inc., a Delaware corporation (“PW”), Buyer, Broadridge Financial Solutions, Inc., a Delaware corporation (“Parent”) and Seller (the “Asset Purchase Agreement”);

WHEREAS, pursuant to the terms of the Asset Purchase Agreement, Seller has agreed to sell, assign, transfer, convey and deliver to Buyer and Buyer has agreed to purchase and acquire from Seller, upon the terms and conditions set forth in the Asset Purchase Agreement, all of the right, title and interest of Seller in and to the Purchased Assets and the Buyer agreed to purchase, acquire and accept from the Seller, free and clear of all liabilities (other than Assumed Liabilities) and all Liens (other than Permitted Liens), all of the Seller’s right, title and interest as of the Closing Date in, to and under the Purchased Assets; and

NOW THEREFORE, in consideration of the representations, warranties, mutual covenants and agreements set forth in the Asset Purchase Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Sale and Transfer of Purchased Assets. Effective as of the Closing, Seller hereby sells, transfers, conveys, assigns, grants and delivers to Buyer, free and clear of all Liens, except Permitted Liens, all of its right, title and interest in and to the Purchased Assets, upon the terms and conditions set forth in the Asset Purchase Agreement.

2. Assignment of Assigned Contracts. Effective as of the Closing, Seller hereby sells, transfers, conveys, assigns, grants and delivers to Buyer, free and clear of all Liens, except Permitted Liens, all of its right, title and interest in and to the Assigned Contracts and Buyer hereby accepts the foregoing assignment of the Assigned Contracts, upon the terms and conditions set forth in the Asset Purchase Agreement.

3. Assumption of Liabilities. Effective as of the Closing, Buyer does hereby assume, and agrees to pay, defend, discharge and perform as and when due the Assumed Liabilities, upon the terms and conditions set forth in the Asset Purchase Agreement.

4. Construction. This Agreement is subject in all respects to, and shall be construed in accordance with, the terms of the Asset Purchase Agreement. Nothing in this Agreement shall be deemed to supersede, enlarge, restrict or otherwise modify any of the provisions of the Asset Purchase Agreement or constitute a waiver or release by any party to the Asset Purchase Agreement of any liabilities, duties or obligations imposed thereby, all of which shall survive the execution

and delivery of this Agreement as provided and subject to the limitations set forth in the Asset Purchase Agreement. If any conflict exists between the terms of this Agreement and the terms of the Asset Purchase Agreement, the terms of the Asset Purchase Agreement shall govern and control.

5. No Third Party Beneficiaries. Subject to the terms and conditions of the Asset Purchase Agreement, this Agreement shall be binding upon and inure solely to the benefit of Seller and Buyer and their respective executors, heirs, personal representatives, successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person, any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

6. Assignment. This Agreement may not be assigned by Seller without the prior written consent of the Buyer. Subject to the foregoing, all of the terms and provisions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective executors, heirs, personal representatives, successors and assigns.

7. Amendments and Waivers. This Agreement may be amended, and any provision hereof waived, but only in writing signed by the party against whom such amendment or waiver is sought to be enforced.

8. Incorporation by Reference. The provisions of Sections 11.1 (Notices), 11.5 (Governing Law), 11.12 (Severability) and 11.14 (Interpretation), of the Asset Purchase Agreement are herein incorporated by reference, mutatis mutandis, as though fully set forth herein.

9. Entire Agreement. This Agreement, the Asset Purchase Agreement, the Ancillary Agreements (as defined in the Asset Purchase Agreement) along with the Schedules and the Exhibits thereto, contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. None of the parties shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein, in the Asset Purchase Agreement or in the Ancillary Documents.

10. Counterparts. This Agreement may be executed in any number of counterparts, and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. The parties agree that the delivery of this Agreement may be effected by means of an exchange of facsimile or electronically transferred signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

SELLER
RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.
By:
	Name:
	Title:
BUYER
PENSON FINANCIAL SERVICES, INC.
By:
	Name:
	Title:

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Exhibit D

JOINT SELLING AGREEMENT

AGREEMENT made this [    ] day of [    ],                      (the “Effective Date”), is made by and between Penson Worldwide, Inc. a Delaware corporation (“Penson”), Broadridge Financial Solutions, Inc., a Delaware corporation (“Broadridge”), and Ridge Clearing & Outsourcing Solutions, Inc. a New York corporation (a subsidiary of Broadridge, “Ridge”) (each a “Party” and collectively, the “Parties”).

WHEREAS, pursuant to an Asset Purchase Agreement dated [            ], 2009 (the “Asset Purchase Agreement”), by and among Penson, Penson Financial Services, Inc., a North Carolina corporation (“Buyer”), Broadridge and Ridge, Buyer has purchased certain of the correspondent clearing contracts of Ridge.

WHEREAS, the Parties will contemporaneously with the execution of this Agreement, enter into a Master Services Agreement and related Services Schedules (“Outsourcing Agreement”).

WHEREAS, upon the closing of the transactions contemplated by the Asset Purchase Agreement and the Outsourcing Agreement (1) Penson and Buyer will continue to provide correspondent clearing services, including for former correspondents of Ridge, (2) Ridge will continue to provide outsourcing solutions for self-clearing broker dealers, including for Buyer, and, subsequent to a transition period, will permanently discontinue its correspondent clearing services (and will otherwise comply with its obligations set forth in Section 17 of the Outsourcing Agreement), and (3) Broadridge will continue providing back-office securities processing solutions for self-clearing broker dealers as permitted by Section 17 of the Outsourcing Agreement (collectively, the “Clearing and Outsourcing Services”).

WHEREAS, in connection with the foregoing, the Parties desire to enter into a strategic selling alliance regarding such Clearing and Outsourcing Services where Broadridge and Ridge desire to offer Penson’s and Buyer’s products and services to their current and prospective customers and clients and Penson desires to offer Broadridge and Ridge’s products and services to its current and prospective customers and clients.

NOW, THEREFORE, in consideration of the mutual premises and covenants herein set forth, the Parties agree as follows:

1. SERVICES. The Parties agree to use their reasonable efforts to cooperate in offering any services and making any proposals provided in accordance with this Agreement. Each Party may use its sales force to initiate and qualify sales leads for prospects for the Clearing and Outsourcing Services. In cases where a Party is not interested in a lead from the other Party, such other Party is free to pursue the opportunity alone (except as prohibited in the Asset Purchase Agreement) or in combination with others, without obligation to the uninterested Party. Broadridge and Ridge shall provide to Penson and Penson shall provide to Broadridge and Ridge the services described in Schedule A attached hereto (the “Services”). Neither party shall enter into or perform under a joint selling or other similar agreement with a correspondent clearing firm with respect to Clearing and Outsourcing Services substantially similar to this Agreement during the term of this Agreement.

2. SELLING PRACTICES.

(a) Neither Party shall make, publish or distribute or cooperate with any third party in making, publishing or distributing any public announcement, press releases, advertising, marketing, promotional or other materials (whether in print, on a website, electronically or otherwise) (“Materials”) that use the other Party’s name, logos, or trademarks with regard to the execution or performance of this Agreement or otherwise, without the prior written approval of such other Party. The Parties shall provide and designate such Materials that may be used in connection with this Agreement and the alliance contemplated hereby.

(b) Both Parties agree to (i) conduct business in a manner that reflects favorably on the good name, goodwill and reputation of the other Party, (ii) not engage in deceptive, misleading or unethical practices that are or might be detrimental to the other Party, (iii) not make any false or misleading representation with regard to the other Party or its products, (iv) not publish or utilize or cooperate in the publication or utilization of any misleading or deceptive advertising material that relates in any way to the other Party and its products, (v) not make any representation or warranty to anyone with respect to the specifications, features or capabilities of the other Party’s products that are inconsistent with the literature distributed by the other Party, including all disclaimers contained in such literature, (vi) not make any warranty or representation to anyone that would give the recipient any claim of action against the other Party, and (vii) not bind or attempt to bind the other Party, or create any obligation, express or implied, on behalf of the other Party and neither Party is authorized to do so under this Agreement.

3. RESERVATION OF RIGHTS. The Parties acknowledge and agree that each Party will retain all right, title and interest in and to its products, services, trademarks, logos, tradenames, and all content, information and other materials on its website(s), and nothing contained in this Agreement will be construed as conferring upon such Party, by implication, operation of law or otherwise, any other license or right, except as specifically provided in this Agreement.

4. CONFIDENTIAL INFORMATION. The disclosure and use of any confidential information exchanged by the Parties is governed by the terms of the Asset Purchase Agreement.

5. RELATION OF THE PARTIES. This Agreement and the relationships between the Parties established hereby does not constitute a partnership, joint venture, agency, or contract of employment between them.

6. FEES. The Fees for such Services are described in Schedule B attached hereto.

7. TERM. This Agreement shall commence on the Effective Date and shall continue on a term contemporaneously with the Outsourcing Agreement.

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8. HEADINGS. Paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement.

9. GOVERNING LAW. This Agreement shall be governed by, and provisions shall be construed in accordance with, the laws of the State of New York. Any disputes relating to or arising from this Agreement shall be subject to the dispute resolution procedures set forth in the Asset Purchase Agreement.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be fully executed as of the day and year first written above.

PENSON WORLDWIDE, INC.
By:
	Name:
	Title:
BROADRIDGE FINANCIAL SOLUTIONS, INC.
By:
	Name:
	Title:
RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.
By:
	Name:
	Title:

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SCHEDULE A

TO THE JOINT SELLING AGREEMENT

BETWEEN

PENSON WORLDWIDE, INC.

BROADRIDGE FINANCIAL SOLUTIONS, INC.

AND

RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.

SERVICES

1. Broadridge and Ridge Services. Subject to Section 1 of the Agreement, Broadridge and Ridge will take advantage of opportunities to:

(a) generate leads for Penson’s clearing offering among Broadridge prospects or existing clients that seek a correspondent clearing solution; and

(b) offer Penson’s Nexa products to its global customers and prospects.

2. Penson Services. Subject to Section 1 of the Agreement, Penson will take advantage of opportunities to:

(a) generate leads for (i) Ridge’s outsourcing solutions for self-clearing broker dealers and (ii) Broadridge’s securities processing solutions for self-clearing broker dealers, among Penson’s prospects or existing correspondent clearing clients that seek a self-clearing solution; and

(b) generate leads for Broadridge’s other processing and investor communications solutions.

A-1

SCHEDULE B

TO THE JOINT SELLING AGREEMENT

BETWEEN

PENSON WORLDWIDE, INC.

BROADRIDGE FINANCIAL SOLUTIONS, INC.

AND

RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.

FEES

1. Fees Paid by [Broadridge or Ridge]:

(a) If Penson refers an existing correspondent to [Broadridge or Ridge] and that correspondent elects to self clear, enabled by [Broadridge’s or Ridge’s] outsourcing or processing solutions, [Broadridge or Ridge] shall pay Penson a finder’s fee, the amount of which will be [    ].¹

(b) If Penson refers a prospect to [Broadridge or Ridge] that purchases any related processing or investor communications solutions from [Broadridge or Ridge], [Broadridge or Ridge] shall pay Penson a finder’s fee, the amount of which will be [    ].²

2. Fees Paid by Penson: If [Broadridge or Ridge] refers a current or prospective customer or client to Penson and that customer or client elects to purchase any Nexa products, then Penson shall pay [Broadridge or Ridge] a finder’s fee, the amount of which will be [    ]³

¹ Amount to be mutually agreed by the Partners.

² Amount to be mutually agreed by the Partners.

³ Amount to be mutually agreed by the Partners.

B-1

Exhibit E

PENSON WORLDWIDE, INC.

STOCKHOLDER’S AND REGISTRATION RIGHTS AGREEMENT

THIS STOCKHOLDER’S AND REGISTRATION RIGHTS AGREEMENT is made effective as of the      day of                     , 2010 (the “Effective Date”), between Penson Worldwide, Inc., a Delaware corporation (the “Company”), and [                    ]⁶ , Inc. (“Stockholder”). All capitalized terms used in this Agreement shall have the meaning assigned to them in this Agreement or in the attached Appendix.

AGREEMENT

In consideration of certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: A. TRANSFER AND REGISTRATION RIGHTS

1. Restriction on Transfer. The Stockholder agrees that it will not Transfer, other than a Permitted Transfer, the Shares prior to the first anniversary of the date of this Agreement, without the prior written consent of the Company. Each person to whom the Shares are transferred by means of a Permitted Transfer must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Company in form and substance satisfactory to the Company that such person is bound by the provisions of this Agreement and that the transferred shares remain subject to (i) the Market Stand-Off and (ii) Restrictions on Unsolicited Acquisition Activities, to the same extent such shares would be so subject if retained by the transferor. The Company shall not be required (i) to transfer on its books any Shares which have been sold or transferred in violation of the provisions of this Agreement, or (ii) to treat as the owner of the Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom the Shares have been transferred in contravention of this Agreement.

2. Registration Rights. The Stockholder shall have the right to have its Registrable Securities registered under the Securities Act and applicable state securities laws in accordance with the following provisions.

3. Demand Registration.

(i) Request for Registration. On or after the first anniversary of the date of this Agreement and subject to Section A(3)(ii) hereof and the other terms and conditions of this Agreement, upon the written request from the Stockholder that the Company effect any registration under the Securities Act (including a shelf registration) with respect to all or a part of the Registrable Securities of Stockholder, the Company shall as soon as practicable use its commercially reasonable best efforts to effect any such registration under the Securities Act in accordance with Section A(7) hereof with respect to that part

⁶ Insert Ridge Clearing & Outsourcing Solutions, Inc. or an Affiliate thereof.

of the Registrable Securities that the Company has been requested to register, including, but not limited to, through (1) a shelf registration, (2) a registration on Form S-1 or any similar long-form registration statement (a “Long-Form Registration”) or (3) a Form S-3 or any similar short-form registration statement (a “Short-Form Registration”) if the Company qualifies to effect a Short Form Registration.

Any registration statement filed pursuant to a request under this Section A(3)(i) may, subject to the provisions of Section A(3)(iii) below, include other securities of the Company which are held by Persons other than the Stockholder who, by virtue of agreements with the Company, are entitled to include their securities in such registration, but the right of such Persons to include any of their securities in any registration requested by the Stockholder pursuant to Section A(3)(i) hereof shall be subject to the limitations set forth in Section A(3)(iii) below.

(ii) Limitations on Demand Registrations. The Company shall not be obligated to effect more than one registration pursuant to this Section A(3).

(iii) Underwriting. The Stockholder may distribute the Registrable Securities covered by its request for a registration pursuant to Section A(3)(i) hereof by means of an underwriting managed by an underwriter which shall be selected by the Company and reasonably acceptable to the Stockholder.

If holders of Shares other than Registrable Securities who are entitled, by virtue of agreements with the Company, to have Shares included in such an underwritten registration (the “Other Shareholders”) request such inclusion, the securities of such Other Shareholders shall be included in the underwritten registration subject to the applicable provisions of this Section A. The Stockholder and the Company shall (together with all Other Shareholders proposing to distribute their securities through such registration) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to the Stockholder. Notwithstanding any other provision of this Section A(3), if the representative for the underwriters advises the Stockholder or the Company in writing that (i) in the representative’s best judgment, marketing factors require a limitation on the number of shares to be underwritten or (ii) the inclusion of shares held by Other Shareholders and, as the case may be, officers, other employees and/or directors of the Company in the offering could, in the representative’s best judgment, reduce the offering price per share or otherwise adversely affect the proposed public offering, then, in the case of the preceding clause (i), Shares held by Other Shareholders shall be excluded from such underwriting to the extent so required by such limitations and, in the case of the preceding clause (ii), Shares held by Other Shareholders and, as the case may be, officers, other employees and/or directors of the Company shall be excluded from such underwriting to the extent advised by the representative. If, after the exclusion of such shares, further reductions are required to meet the limitation on the number of shares to be underwritten as advised by the representative, the number of shares that may be included in the underwriting by the Stockholder shall be reduced by such minimum number of shares as is necessary to comply with such limitation. If any Other Shareholder who has requested inclusion in such registration as provided above disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Stockholders. If the underwriter has not limited the number of Registrable Securities or other securities to be underwritten, the Company may include its securities

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for its own account in such registration if the representative so agrees and if the number of Registrable Securities and other securities which would otherwise have been included in such registration and underwriting will not thereby be limited. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall not be included in such registration.

(iv) Notwithstanding the foregoing, if the Company shall furnish to the Stockholder a certificate signed by the President or Chief Executive Officer of the Company stating that, in the good faith judgment of the Board, it would be materially detrimental to the Company and its members for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request for such filing; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period.

4. Piggyback Registration.

(i) If at any time after the first anniversary of the date of this Agreement, the Company shall determine to register any of its Shares either for its own account or for the account of a holder or holders of Shares (other than a registration on Form S 8 (or similar or successor form) relating solely to share option, share purchase or other employee benefit plans, or a registration on Form S 4 (or similar or successor form) relating solely to a transaction under Rule 145 of the Securities Act, or a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities), the Company will:

A. promptly give to the Stockholder a written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and B. include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in the written request made by the Stockholder within twenty (20) days after the date written notice described in clause (i)(A) above is deemed given (as provided in Section C(2) herein) by the Company except as set forth in Section A(4)(ii) below. Such written request may specify all or a part of the Stockholder’s Registrable Securities.

(ii) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Stockholder as a part of the written notice given pursuant to Section A(4)(i). In such event, the right of the Stockholder to registration pursuant to this Section A(4) shall be conditioned upon Stockholder’s participation in such underwriting and the inclusion of Stockholder’s Registrable Securities in the underwriting to the extent provided herein. The Stockholder (together with the Company and Other Shareholders distributing their Shares through such underwriting) shall enter into an underwriting agreement in customary form with the representative(s) of the underwriter or underwriters selected for underwriting

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by the Company. Notwithstanding any other provision of this Section A(4), if the representative advises the Stockholder or the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, then Shares held by Stockholder, Other Shareholders and, as the case may be, officers, other employees and/or directors of the Company shall be excluded from such underwriting on a pro rata basis, by such minimum number of shares as is necessary to comply with such limitation (it is hereby understood that the foregoing shall not be a limitation on the number of Shares to be registered by the Company). If the Stockholder or any officer, director or Other Shareholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall not be included in such registration.

(iii) Number. The Stockholder shall be entitled to have its shares included in an unlimited number of registrations pursuant to this Section A(4).

5. Expenses of Registration. Upon the exercise of registration rights set forth in Section A(3) hereof, the Stockholder shall pay all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant thereto; provided that in the event Other Shareholders and/or the Company elect to include securities to be sold for their own respective accounts in a registration pursuant to Section A(3), such Other Shareholders and the Company shall pay a proportionate part of the Registration Expenses based upon the number of shares so included and shall be responsible for Selling Expenses applicable to the registration of their shares. Upon the exercise of registration rights set forth in Section A(4) hereof, the Company shall pay all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant thereto, provided that the Company shall in no event be responsible for Selling Expenses, which shall be borne by the holders of the securities so registered, pro rata on the basis of the number of their shares so registered.

6. Other Registration Requests. If at any time after the first anniversary of the date of this Agreement, the Stockholder requests that the Company register any of the Shares for sale in an underwritten public offering, the Company agrees to consider such request in good faith. If the Company agrees with the request, the Company will take the steps set forth in Section A(7) to effect the registration requested and to consummate the sale of the Shares as contemplated by any such registration. The cost of effecting any such registration will be borne by the Stockholder provided that only shares it requests to be registered are included in any such registration. If shares of Other Shareholders or the Company are included in any such registration, the sharing of the cost of such registration shall be on a basis consistent with Section 5 above. Other than considering such request in good faith, the Company shall have no obligation to effect a registration requested by the Stockholder pursuant to this Section.

7. Registration Procedures. In the case of each registration effected by the Company pursuant to Section A, the Company will promptly advise the Stockholder in writing as to the initiation of each registration and as to the completion thereof. In connection with any offering of Registrable Securities registered pursuant to subsection (3) of this Section A, and subject to the terms and conditions of Sections A(3) and A(4) hereof, the Company shall:

(i) prepare and file with the SEC a registration statement on any form for which the Company then qualifies, and which form shall be available for the sale of the Registrable Securities in accordance with the intended methods of distribution thereof, and use its commercially reasonable best efforts to cause such registration statement to become and remain effective as provided herein; provided that (A) at least five (5) Business Days before filing with the SEC a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish counsel selected by the Stockholder copies of all such documents proposed to be filed for said counsel’s review and comment and (B) the Company shall not file with the SEC a registration statement or prospectus or any amendments or supplements thereto to which the Stockholder or its counsel shall reasonably object on a timely basis provided that such written objection is based on information concerning Stockholder and sets forth in reasonable detail the basis for such objection;

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(ii) prepare and file with the SEC such amendments and supplements (provided that if any such amendment or supplement requested by Stockholder is required as a result of information concerning Stockholder not theretofore disclosed to the Company, Stockholder shall reimburse all reasonable costs and expenses of the Company incurred in connection with the filing of such amendment or supplement) to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration effective for a period of sixty (60) days or until the Stockholder has completed the distribution described in the registration statement relating thereto, whichever first occurs (but not before the time periods referred to in Section 4(3) of the Securities Act and Rule 174 promulgated thereunder, or any successor provisions, if applicable); cause the related prospectus to be amended or supplemented by any required prospectus supplement and to be filed as so amended or supplemented with the SEC pursuant to Rule 424; respond as promptly as practicable to any comments received from the SEC with respect to such registration statement or any amendment or supplement thereto and provide as promptly as practicable to the Stockholder, to the extent covered by such registration statement copies of all correspondence with the SEC relating to such registration statement or any amendment or supplement thereto; and comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of securities covered by such registration statement during such period in accordance with the intended method of disposition by sellers thereof set forth in such registration statement as amended or supplemented; provided, however, that (A) such 60 day period shall be extended for a period of time equal to the period, if any, during which the Stockholder refrains from selling any securities included in such registration in accordance with provisions of the last paragraph of this Section A(7), provided that such time period shall not be extended if the amendment or supplement filed is required as a result of information concerning Stockholder and (B) in the case of any registration of Registrable Securities pursuant to a Short Form Registration which are intended to be offered on a continuous or delayed basis, such 60 day period shall be extended until all such Registrable Securities are sold, provided that (x) Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis, and (y) the applicable rules under the Securities Act governing the obligation to file a post effective amendment permit, in lieu of filing a post effective amendment which (1) includes any prospectus required by Section 10(a)(3) of the Securities Act or (2) reflects facts or events representing a material

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or fundamental change in the information set forth in the registration statement, the incorporation in the registration statement by reference to periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act of the information specified in clauses (1) and (2) above, and (z) in no event shall the Company be required to maintain the effectiveness of such Registration Statement for a period exceeding 180 days;

(iii) furnish to each underwriter, if any, and covered by such registration statement such number of copies of such registration statement, and the prospectus included in such registration statement (including each preliminary prospectus), each amendment and supplement thereto (in each case including all exhibits thereto and any documents incorporated by reference therein), and such other documents incident thereto as the Stockholder from time to time may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Stockholder in accordance with the intended method of disposition (it being understood that, subject to the terms hereof relating to the obligations of the Stockholder, the Company consents to the use of such prospectus and each such amendment and supplement thereto by each underwriter, if any, and the Stockholder in connection with such disposition);

(iv) use its commercially reasonable best efforts to register or qualify such Registrable Securities under such other state securities or “blue sky” laws of such jurisdictions as the Stockholder, and underwriter, if any, of Registrable Securities covered by such registration statement reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable the Stockholder and each underwriter, if any, to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Stockholder; provided that the Company will not be required as a result thereof to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (iv), (B) subject itself to taxation or regulation of its business in any such jurisdiction or (C) consent to general service of process in any such jurisdiction;

(v) use its commercially reasonable best efforts to cause the Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Stockholder to consummate the disposition of such Registrable Securities in accordance with the intended method of disposition;

(vi) immediately notify each underwriter, if any, and the Stockholder at any time when a prospectus relating to its Registrable Securities is required to be delivered under the Securities Act of the happening of any event that comes to the Company’s attention if as a result of such event the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Company will promptly prepare and furnish to the Stockholder a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;

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(vii) use its commercially reasonable best efforts to cause all such Registrable Securities to be listed or quoted on (x) any national securities exchange or market in the United States on which Shares may then be listed or quoted and (y) each securities exchange or market on which similar securities issued by the Company may then be listed or quoted, and enter into such customary agreements including a listing application and indemnification agreement in customary form, in each case by the date of the first sale of such Registrable Securities, and to provide a transfer agent and registrar for such Registrable Securities covered by such registration statement no later than the effective date of such registration statement;

(viii) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(ix) make available for inspection, during business hours of the Company, by the Stockholder, to the extent covered by such registration statement, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by the Stockholder or any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, if any, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees, and those of the Company’s affiliates, if any, to supply all information and respond to all inquiries reasonably requested during the course of any such inspection conducted in connection with such registration statement;

(x) use its commercially reasonable best efforts to obtain a “cold comfort” letter from the Company’s appointed auditors in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the Stockholder or any underwriter retained by the Stockholder reasonably request;

(xi) (A) promptly notify the Stockholder of any stop order issued or threatened by the SEC and of the receipt by the Company of any notification with respect to the suspension of the qualification (or exemption from qualification) of any such Registrable Securities under the applicable securities or “blue sky” laws of any jurisdiction and (B) use its commercially reasonable best efforts to prevent the entry or issuance of, or if entered or issued, obtain the withdrawal of such stop order or such suspension at the earliest possible moment;

(xii) if requested by any underwriter or the Stockholder, promptly incorporate in a prospectus supplement or, subject to subsection (ii)(B)(y) of this Section A(7), post-effective amendment such information as such underwriter the Stockholder reasonably requests to be included therein, including, without limitation, with respect to the number of shares being sold by the Stockholder to such underwriter, the purchase price being paid therefor by such underwriter and with respect to any term of the underwritten offering of the securities to be sold in such offering; and make all required filings of such prospectus supplement or, subject to subsection (ii)(B)(y) of this Section A(7), post-effective

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amendment as soon as practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(xiii) as promptly as practical after filing with the SEC any document which is incorporated by reference into such registration statement, deliver a copy of such document to each underwriter, if any, and the Stockholder;

(xiv) cooperate with each underwriter, if any, and the Stockholder to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under such registration statement, and enable such securities to be in such denominations and registered in such names as such underwriter, if any, or the Stockholder reasonably requests; and

(xv) otherwise comply with all applicable rules and regulations of the SEC and make available to the Stockholder, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months beginning after the effective date of the registration statement (as the term “effective date” is defined in Rule 158(c) under the Securities Act) which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

It shall be a condition precedent to the obligation of the Company to take any action with respect to any Registrable Securities that the Stockholder thereof shall furnish to the Company in writing such information regarding the Stockholder and the Registrable Securities and any other Shares held by the Stockholder and the intended method of disposition of the Registrable Securities held by the Stockholder as the Company shall reasonably request and as shall be required in connection with the action taken by the Company and the Stockholder shall enter into such customary agreements (including, without limitation, custody agreements) and cause to be delivered on its behalf such customary certificates and legal opinions as the Company may reasonably request.

The Stockholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section A(7)(vi) hereof, it will forthwith discontinue disposition of Registrable Securities and shall not deliver to any person any copies of the registration statement or prospectus relating to such disposition until the Stockholder is in receipt of the copies of the supplemented or amended prospectus contemplated by Section A(7)(vi) hereof, and, if so directed by the Company (at the Company’s expense, unless the event described in Section A(7)(vi) is the result of information concerning Stockholder), the Stockholder will deliver to the Company all copies (including, without limitation, any and all drafts), other than permanent file copies, then in the Stockholder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

8. Indemnification.

(i) In the event of any registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless the Stockholder, its respective directors, officers, managers and general partners, limited partners, members, and managing directors and each other Person, if any, who controls, is

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controlled by or is under common control with the Stockholder within the meaning of the Securities Act (and directors, officers, managers and partners, members, and managing directors and controlling Persons of any of the foregoing) against any and all losses, claims, damages and liabilities (or actions or proceedings in respect thereto), joint or several, and costs and expenses (including any amounts paid in any settlement effected with the Company’s consent, which consent will not be unreasonably withheld, delayed or conditioned) to which the Stockholder, any such director, officer, or general or limited partner, member or managing director or any such controlling Person may become subject under the Securities Act, state securities or “blue sky” laws, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) or costs or expenses arise out of or are based upon (A) any untrue statement (or alleged untrue statement) of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or (B) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. The Company will reimburse each such director, officer, general partner, limited partner, member, managing director or controlling Person (and directors, officers, managers, partners, members, and managing directors and controlling Persons of any of the foregoing) for any legal and any other expenses reasonably incurred in connection with investigating or defending such claim, loss, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such claim, loss, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based on any untrue statement (or alleged untrue statement) or omission (or alleged omission) made in such registration statement or amendment or supplement thereto or in any such preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Stockholder or any such director, officer, manager, general or limited partner, member, managing director, or controlling Person specifically stating that it is for use therein.

The indemnity provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of the Stockholder or any such director, officer, manager, general partner, limited partner, member, managing director, or controlling Person and shall survive the transfer of such securities by the Stockholder.

(ii) The Stockholder will, if Registrable Securities held by it are included in any registration statement filed in accordance with the provisions hereof, (x) indemnify the Company and its directors, officers, controlling Persons and all other prospective sellers and their respective directors, officers, general and limited partners, managing directors, and their respective controlling Persons against all claims, losses, damages and liabilities (or actions in respect thereof) and expenses to which any such Person may become subject under the Securities Act, state securities “blue sky” laws, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) or expenses arise out of or are based upon (A) any untrue statement (or alleged untrue statement) of a material fact with respect to the Stockholder contained in any such registration statement, preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or (B) any omission (or alleged omission)

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to state therein a material fact with respect to the Stockholder required to be stated therein or necessary to make the statements made by the Stockholder therein not misleading and (y) reimburse the Company and its directors, officers, controlling Persons and all other prospective sellers and their respective directors, officers, general and limited partners, managing directors, and their respective controlling Persons for any actual legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in the case of both clause (x) and clause (y), to the extent, and only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by the Stockholder with respect to the Stockholder and stated to be specifically for use therein; provided, however, that the obligations of the Stockholder hereunder shall be limited to an amount equal to the net proceeds received by the Stockholder from securities sold by the Stockholder pursuant to such registration statement or prospectus.

The indemnity provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or the Stockholder, underwriters or any of their respective directors, officers, general or limited partners, managing directors or controlling Persons and shall survive the transfer of such securities by the Stockholder.

(iii) Each party entitled to indemnification under this Section A(8) (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld, delayed or conditioned) and the Indemnified Party may participate in such defense at such party’s expense (unless the Indemnified Party shall have reasonably concluded that (A) the Indemnifying Party has failed to promptly assume such defense or vigorously defend such claim or litigation or (B) there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the reasonable fees and expenses of the Indemnified Party’s counsel, which counsel shall have been reasonably agreed to by the Indemnifying Party) shall be at the expense of the Indemnifying Party and shall be reimbursed as they are incurred); and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section A except to the extent the Indemnifying Party is actually materially prejudiced thereby. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the written consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as a term thereof the giving by the claimant or plaintiff to such Indemnified Party of an unconditional release from all liability with respect to such claim or litigation or which includes any statement as to an admission of fault, culpability or failure to act by or on behalf of the Indemnified Party. Each Indemnified Party shall promptly furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall

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be reasonably required in connection with the defense of such claim and litigation resulting therefrom.

(iv) In order to provide for a just and equitable contribution in circumstances in which any of the foregoing indemnity agreements provided for in this Section A(8) is for any reason held to be unavailable to an Indemnified Party, the Company and the Stockholder, as the case may be, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement in such proportion as shall be appropriate to reflect (A) the relative benefits received by the Company, on the one hand, and the Stockholder on the other hand, and (B) the relative fault of the Company, on the one hand, and the Stockholder, on the other, with respect to the statements or omissions that resulted in such loss, liability, claim, damage or expense, or action in respect thereof, as well as any other relevant equitable considerations; provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to a contribution from any Person who was not guilty of such fraudulent misrepresentation. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Stockholder, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Stockholder agree that it would not be just and equitable if a contribution pursuant to this Section A(8) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. Notwithstanding anything to the contrary contained herein, the Company and the Stockholder s agree that any contribution required to be made by the Stockholder pursuant to this Section A(8) shall not exceed the net proceeds from the offering of securities received by the Stockholder with respect to such offering. For purposes of this Section A(8), each Person, if any, who controls the Stockholder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Stockholder, and each director of the Company, each officer of the Company who signed the registration statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company.

9. Information by the Stockholders. The Stockholder shall furnish to the Company such information regarding and the distribution proposed by the Stockholder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Section A.

10. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC which may permit the sale of restricted securities to the public without registration, the Company agrees to:

(i) make and keep public information available as those terms are understood and defined in Rule 144 under the Securities Act;

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(ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and(iii) so long as the Stockholder owns any Shares, furnish to the Stockholder, upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements).

11. “Market Stand off” Agreement. In addition to the transfer restriction set forth in Section A(1), if any registration of Shares (or other securities) of the Company shall be in connection with an underwritten public offering, the Stockholder agrees not to effect any sale or distribution, including any private placement or any sale pursuant to Rule 144A under the Securities Act (or any successor provision) or otherwise or any sale pursuant to Rule 144 under the Securities Act (or any successor provision) of any Shares, other than (x) to one or more of its transferees who agree to be bound by this Section A(11) or (y) by pro rata distribution to its shareholders, partners or other beneficial holders who agree to be bound by this Section A(11), and not to effect any such sale or distribution of any other equity security of the Company or of any security convertible into or exchangeable or exercisable for any equity security of the Company (in each case, other than as part of such underwritten public offering) during the ten calendar days prior to, and during the ninety (90) calendar day period (or such other shorter period as may be agreed upon between the Stockholder and the representative of the underwriters of such offering) that begins on the effective date of such registration statement (except as part of such registration), without the consent of the representative of the underwriters of such offerings; provided, that (A) written notice of such registration has been deemed given (as provided in Section C(2) herein) to the Stockholder at least two (2) Business Days prior to the anticipated beginning of the ten calendar day period referred to above and (B) all directors and executive officers of the Company also agree not to effect any such sale or distribution (other than as part of such underwritten offering) during such period. If requested by the representative of the underwriters, the Stockholder shall execute a separate agreement to the foregoing effect. The Company may impose stop transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of said 90 day period (or such other shorter period as may be agreed upon between the Company and the representative of the underwriters of such offering in the case of a registration pursuant to Section A(4), or as may be agreed upon between the Company, the representative of the underwriters of such offering and the Stockholder in the case a registration pursuant to Section A(3)). The provisions of this Section A(11) shall be binding upon any subsequent transferee who acquires Shares in a Permitted Transfer, including, without limitation, any of the Stockholder’s shareholders, partners or other beneficial holders. The obligations described in this Section A(11) shall not apply to a registration relating solely to employee benefit plans on Form S-1 or S-8, or to a registration relating solely to a transaction on Form S-4.

12. Assignability. The registration rights set forth in this Section A shall be assignable by the Stockholder, in whole or in part, to any transferee of Registrable Securities receiving such transferred Registrable Securities in a Permitted Transfer.

13. Restrictions on Unsolicited Acquisition Activities. Stockholder agrees that, for a period of two years from the date of this Agreement, without the prior written consent of the Board or pursuant to a transaction otherwise approved by the Board, neither the Stockholder nor

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its directors or executive officers or its or their affiliates (including any person or entity directly or indirectly, through one or more intermediaries, controlling it or controlled by it or under common control with it) will:

(i) purchase, offer or agree to purchase, or announce an intention to purchase, directly or indirectly, any voting securities or assets of the Company or its subsidiaries, provided, however, that no acquisition described in this clause (i) shall be deemed to occur solely due to (a) a stock split, reverse stock split, reclassification, reorganization or other transaction by the Company affecting the Common Stock generally, (b) a stock dividend or other pro rata distribution by the Company to holders of the outstanding Common Stock; or (c) any other change in the outstanding number of Common Stock; or

(ii) enter into any agreement, arrangement, or understanding, the effect or intent of which is to mitigate loss, to manage risk or to benefit from changes in the share price of any of the Company’s securities, or increase or decrease the voting power with respect to any of the Company’s securities (including, without limitation, any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares); or

(iii) make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote or “consents” (as such terms are used in the rules and regulations of the SEC) or seek to advise or influence any Person with respect to the voting of any voting securities of the Company or its subsidiaries; or

(iv) initiate or support, directly or indirectly, any stockholder proposal with respect to the Company; or

(v) directly or indirectly make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving the Company or its subsidiaries, or their respective securities or assets, or of any successor to or person in control of the Company or any of its businesses, or any assets of the Company or any subsidiary or division thereof or of any such successor or controlling person; or

(vi) seek or propose to influence or control the Company’s management or policies; or

(vii) seek to negotiate or influence the terms and conditions of employment of employees of the Company or its subsidiaries or any agreement of collective bargaining with employees of the Company or its subsidiaries; or

(viii) form, join, or in any way participate in a “group” as defined in Section 13(d)(3) of the Exchange Act in connection with any of the foregoing.

This Section 12 does not prohibit, limit or restrict (i) Stockholder from exercising its respective rights, performing its respective obligations or otherwise consummating the transactions contemplated by this Agreement or (ii) Stockholder from voting its Shares in connection with any matter submitted to the shareholders of the Company, or selling its Shares pursuant to any

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business combination tender or exchange offer or other extraordinary transaction with respect to the Company, in each case, commenced by any Person (including by Stockholder, so long as such business combination tender or exchange offer or other extraordinary transaction by the Stockholder would not otherwise result in a violation of this Section 12 at such time).

14. Right to Redemption. If any such transaction would result in Stockholder owning more than 9.9% of the issued and outstanding shares of Common Stock, then concurrently with any purchase, redemption, exchange or other acquisition of shares of its Common Stock, the Company agrees to make an offer to purchase from Stockholder a pro rata portion of the shares held by Stockholder such that Stockholder’s ownership does not exceed 9.9% of the issued and outstanding shares of Common Stock, such offer to be made on same terms and conditions as any such other purchase, redemption, exchange or other acquisition, as the case may be.

B. LEGEND REQUIREMENTS

1. Restrictive Legends. The stock certificates for the Shares shall be endorsed with the following restrictive legends:

(i) “The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or any state’s securities laws and may not be offered, sold or otherwise transferred, pledged or hypothecated unless and until such shares are registered under such laws or an opinion of counsel reasonably satisfactory to the Company is obtained to the effect that such registration is not required.”

(ii) “The securities represented by this certificate are subject to certain restrictions and agreements contained in a Stockholders’ Agreement with the Company dated effective as of                     , 2010. A copy of the Stockholders’ Agreement and all applicable amendments thereto will be furnished by the Company to the record holder of this certificate without charge upon written request to the Company at its principal place of business or registered office.”

2. Following the sale of any Shares in accordance with Section A of this Agreement or pursuant to Rule 144 and, in the case of a sale pursuant to Rule 144, accompanied by an opinion of counsel reasonably satisfactory to the Company, the Company shall use its best efforts to cause the removal from the certificate(s) representing such Shares the legends described in clause (1) above.

C. GENERAL PROVISIONS

1. Assignment. The Stockholder may not assign any of its rights or obligations hereunder except as expressly permitted by this Agreement.

2. Notice. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested):

(i) If to the Company:

Penson Worldwide, Inc.

1700 Pacific Avenue, Suite 1400

Dallas, Texas 75201

Attn: Chief Executive Officer

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With a copy to:

Penson Worldwide, Inc.

1700 Pacific Avenue, Suite 1400

Dallas, Texas 75201

Attn: General Counsel

(ii) If to Stockholder, at the address for Stockholder set forth below its signature hereto.

Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address.

3. No Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

4. Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without resort to that state’s conflict-of-laws rules. To the fullest extent permitted by applicable law, each party hereto (i) agrees that any claim, action or proceeding by such party seeking any relief whatsoever arising out of, or in connection with, this Agreement shall be brought in any state or federal court of competent jurisdiction sitting in New York County in the State of New York and not in any other state or federal court in the United States of America or any court in any other country, (ii) agrees to submit to the exclusive jurisdiction of such courts described in clause (i) for purposes of all legal proceedings arising out of, or in connection with, this Agreement, (iii) waives and agrees not to assert any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court or any claim that any such proceeding brought in such a court has been brought in an inconvenient forum, and (iv) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

5. Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Stockholder’s successors and assigns, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms hereof.

6. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Stockholder. Any amendment or waiver effected in accordance with this Section C(6) shall be binding upon the Stockholder, each future holder of the Shares and the Company.

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7. Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed and interpreted in such manner as to be effective and valid under applicable law.

IN WITNESS WHEREOF, the parties have executed this Stockholder’s Agreement on the day and year first indicated above.

PENSON WORLDWIDE, INC.
By:
	Name:	Philip A. Pendergraft
	Title:	Chief Executive Officer
[                                         ]7
By:
	Name:
	Title:

Address:

⁷ Insert Ridge Clearing & Outsourcing Solutions, Inc. or an Affiliate thereof.

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Exhibit E

APPENDIX

The following definitions shall be in effect under the Agreement:

A. “Affiliate” shall mean, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under common control with such specified Person.

B. “Agreement” shall mean this Stockholder’s and Registration Rights Agreement.

C. “Board” shall mean the Company’s Board of Directors.

D. “Business Day” shall mean a day other than a Saturday, Sunday or other day on which the New York Stock Exchange is authorized or required by Law to close.

E. “Common Stock” shall mean the Company’s common stock, $0.01 par value per share.

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

G. “Governmental Entity” shall mean any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States or foreign federal, state, local, or municipal government, any supranational, international, multinational, national or other government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory, administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law, including, without limitation, FINRA and any other applicable self regulatory organization.

H. “Law” shall mean any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, directive, rule, regulation and any other decision, ruling, notification requirement or determination of any Governmental Entity (whether or not having the force of law).

I. “Permitted Transfer” shall mean a Transfer to an Affiliate of the Stockholder.

J. “Person” shall mean an individual, partnership, joint stock company, joint venture, corporation, trust or unincorporated organization, limited liability company, or a government or agency or political subdivision thereof or any other entity.

K. “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement with the SEC in compliance with the Securities Act (and any pre and post effective amendments filed or required to be filed) and the declaration or ordering of effectiveness of such registration statement by the SEC.

L. “Registrable Securities” shall mean all Shares held by the Stockholder, whether now owned or hereafter acquired.

M. “Registration Expenses” shall mean all expenses incident to a registration effected pursuant to Section A(3) and/or (4) hereof, including, without limitation, all SEC, Financial Industry Regulatory Authority, Inc. (“FINRA”) and stock exchange registration and filing fees and expenses, fees and expenses of compliance with applicable state securities or “blue sky” laws (including, without limitation, reasonable fees and disbursements of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities), printing expenses, messenger and delivery expenses, the fees and expenses incurred in connection with the listing of such securities to be registered on each securities exchange or national market system on which such securities are listed, fees and disbursements of counsel for the Company and all independent certified public accountants (including the expenses of any annual audit and “cold comfort” letters required by or incident to such performance and compliance), the fees and disbursements of underwriters customarily paid by issuers or sellers of securities (including the fees and expenses of any “qualified independent underwriter” required by FINRA) other than Selling Expenses, the reasonable fees and expenses of any special experts retained by the Company in connection with such registration, and reasonable fees and expenses of other Persons retained by the Company (but not including any underwriting discounts or commission or transfer taxes, if any, attributable to the sale of Registrable Securities by holders of such Registrable Securities other than the Company).

N. “SEC” shall mean the Securities and Exchange Commission.

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

P. “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities.

Q. “Shares” shall mean (a) all Common Stock issued to the Stockholder pursuant to the terms of the Asset Purchase Agreement dated as of the date hereof between the Company, Penson Financial Services, Inc., Stockholder and Broadridge Financial Solutions, Inc.; and (b) all shares of Common Stock and other capital stock, equity security or debt security exercisable or convertible into capital stock of the Company hereafter issued by the Company to the Stockholder, whether in connection with a issuance, grant, stock split, stock dividend, reorganization, warrant, option, convertible security, right to acquire or otherwise. All references herein to Shares owned by the Stockholder shall include: (i) the community interest or similar marital property interest, if any, of the spouse of the Stockholder in such Shares; and (ii) all of the equity interests and voting rights in the Company which are reflected by Share ownership. For purposes of clarification, the term “Shares” shall expressly exclude shares of capital stock of the Company owned or acquired by the Stockholder other than directly from the Company.

R. “Stockholder” shall mean the Stockholder and all subsequent holders of Shares who derive their ownership of Shares through a Permitted Transfer from the Stockholder.

S. “Transfer” shall mean any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation, encumbrance or other disposition of Shares (or any interest therein) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Shares (or any interest therein) whatsoever, or any other transfer of beneficial ownership of Shares, whether voluntary or involuntary, including, without limitation, any such disposition or

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transfer as a part of any liquidation of the Stockholder’s assets or any reorganization of the Stockholder pursuant to the United States or any other bankruptcy law or other similar debtor relief laws.

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Exhibit F

CGR Draft 11/2/09

FORM OF BACKSTOP SELLER NOTE

$                     ,     

1. FOR VALUE RECEIVED, the undersigned, PENSON WORLDWIDE, INC., a Delaware corporation (the “Company” or “Issuer”), hereby promises to pay to the order of BROADRIDGE FINANCIAL SOLUTIONS, INC. (“Payee”) the principal amount of $[    ] (the “Initial Amount”), subject to adjustment as provided in this Note (if adjusted, the “Adjusted Amount”) on the Maturity Date (or, if such day is not a Business Day, on the immediately succeeding Business Day), subject to the provisions herein. The Issuer further promises to pay interest on the unpaid principal amount of this Note from time to time at a rate per annum equal to the LIBOR Rate plus an amount (the “Spread”) equal to plus fourteen percent (14.0%). Interest on this Note shall be due and payable quarterly in arrears in cash on each [December 31, March 31, June 30 and September 30] of each calendar year, provided that if any such day is not a Business Day, payment shall be made on the immediately succeeding Business Day.

Payments of principal hereof and interest hereon shall be made in Dollars in immediately available funds to such account of the Noteholder located in New York, New York, as the Noteholder may designate in writing to the Issuer.

2. Prepayments; Optional Prepayment. Subject to the provisions herein, the Issuer may, at any time and from time to time prior to the Maturity Date, prepay the principal amount of this Note, in whole or in part, without penalty or premium, on any Business Day. Prepayments of this Note must be accompanied by payment of accrued and unpaid interest on the principal amount prepaid to and including the date of payment.

3. Negative Covenants. So long as any principal of and interest on this Note or any other amount payable hereunder remains unpaid or unsatisfied:

(a) Mergers and Consolidations. The Issuer shall not merge or consolidate with or into any Person or sell all or substantially all of its assets, except that so long as both prior to and subsequent to such merger or consolidation, no Event of Default has occurred and is continuing, the Issuer may merge or consolidate with any Person, provided that (x) the Issuer shall be the continuing or surviving Person or (y) if the Issuer shall not be the surviving Person, such surviving Person shall have assumed the obligations of the Issuer hereunder pursuant to documentation in form and substance reasonably satisfactory to the Noteholder (each such merger or consolidation, a “Permitted Merger”).

(b) Liens. The Issuer shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired to secure Indebtedness without making, or causing such Subsidiary to make effective provision for securing this Note equally and ratably with such Indebtedness or in the event such Indebtedness is subordinate in right of payment to this Note, prior to such Indebtedness, as to such property or assets for so long as such Indebtedness shall be secured. The foregoing restrictions shall not apply to the following Liens:

(A) Liens existing on the date hereof;

(B) Liens securing the Credit Agreement (including any modification, replacement, renewal or extension of any such Lien in connection with the modification, renewal, replacements, extension, amendment or amendment and restatement of the Credit Agreement);

(C) Liens to the extent such Liens would be permitted by the Credit Agreement (as the Credit Agreement is in effect on the date of the Asset Purchase Agreement);

(D) Liens securing Cash Management Obligations, Hedging Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any guarantees thereof;

(E) Liens arising from judgments or orders for the payment of money;

(F) Liens (I) on cash advances in favor of the seller of any property to be acquired in an investment to be applied against the purchase price for such investment or (II) consisting of an agreement to dispose of any property;

(G) Liens existing on property at the time of its acquisition or existing on the property of any Person at the time such Person becomes a Subsidiary;

(H) Liens in connection with any sale-leasebacks;

(I) Liens in connection with any credit facility or other lending arrangement entered into by a Regulated Subsidiary to finance operations in the ordinary course of business;

(J) Liens on assets of a Regulated Subsidiary resulting from the lending of securities and repurchase and reverse repurchase agreements;

(K) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings;

(L) Liens of materialmen, mechanics, warehousemen, carriers or employees or other similar Liens arising by operation of law in the ordinary course of business;

(M) Liens consisting of deposits or pledges to secure the performance of bids, trade contracts, leases, public or statutory obligations, or other obligations of a like nature incurred in the ordinary course of business;

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(N) Liens upon or in any assets acquired or held to secure the purchase price of such assets or Indebtedness incurred for the purpose of financing the acquisition of such assets to secure Indebtedness not exceeding

(x) if the Credit Agreement (including any agreement that refinances or replaces the Credit Agreement) is in effect (regardless of whether any indebtedness is outstanding thereunder) $25,000,000 in the aggregate under this clause (N) without prejudice to any other clause hereof or

(y) if the Credit Agreement (including any agreement that refinances or replaces the Credit Agreement) is terminated or otherwise no longer in effect (and not replaced), an amount not to exceed 15% of the Company’s net revenues for the trailing twelve month period (based on the latest period for which internal financial statements are available),

in each case, provided that the Liens are restricted to such assets and the proceeds thereof; it being understood that any Lien that was permitted to be incurred as of the date of incurrence shall not violate subsection (y) solely as a result of a subsequent decline in the Issuer’s net revenues;

(O) restrictions and other minor encumbrances on real property which do not in the aggregate materially impair the use or value of such property;

(P) the rights of licensors or lessors of property under the license or lease agreements related thereto;

(Q) Liens which constitute rights of set-off or bankers’ liens or securities intermediaries’ liens whether arising by operation of law or by contract; and

(R) the modification, replacement, renewal or extension of any Lien permitted under this Section 3(b) (other than Section 3(b)(B)).

(c) Convertible Notes. Borrower will not voluntarily redeem, purchase or otherwise voluntarily prepay its 8.00% Senior Convertible Notes due 2014 prior to maturity.

4. Events of Default. The following are “Events of Default”:

(a) The Issuer fails to pay any interest or principal of this Note as and on the date when due and such failure shall continue unremedied for more than 3 (three) Business Days; or

(b) (i) The Issuer fails to perform or observe any term, covenant or agreement contained in Section 3(a) hereof or (ii) the Issuer fails to perform or observe any other covenant or agreement (not specified in the preceding clause (b)(i)) contained in this

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Note on its part to be performed or observed and in the case of this clause (ii) such failure continues unremedied for 45 days; or

(c) The occurrence of a Change of Control; or

(d) An event of default has occurred and is continuing under any agreement in respect of Indebtedness with an outstanding principal amount in excess of $50,000,000 or under the Credit Agreement resulting in such Indebtedness or the Credit Agreement being or being declared due and payable (or such default is a failure to pay at maturity); provided, however, if any such acceleration of Indebtedness has been rescinded, there shall no longer be any Event of Default under this Section 4(d) with respect to such acceleration; or

(e) The Issuer or any Material Subsidiary institutes any proceeding under any Debtor Relief Law, or makes a general assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered, or consented to by such Person, in any such proceeding or an order for the liquidation of any such Person is entered in any such proceeding or any such Person admits in writing its inability to pay its debts generally as they become due (such proceedings collectively, the “Insolvency Proceedings”); or

(f) Any termination of the Outsourcing Agreement, as such term is defined in the Asset Purchase Agreement, (x) by the Noteholder, pursuant to the exercise of remedies for a material breach of the Outsourcing Agreement by the Issuer entitling such termination or (y) by the Issuer, for any reason (other than a termination by the Issuer for a material breach or material failure to perform by the Payee including the exercise of any termination right pursuant to any service level agreement).

Upon the occurrence and during the continuation of an Event of Default, the Noteholder may declare all sums outstanding hereunder, including all interest thereon, to be immediately due and payable, whereupon the same shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived; provided, however, that upon the occurrence of an actual entry of an order for relief with respect to the Issuer under the Bankruptcy Code, all sums outstanding hereunder including all interest thereon, shall become and be immediately due and payable, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character, all of which are hereby expressly waived.

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5. Guarantees. (i) The Issuer will not permit any of its subsidiaries to Guarantee any Indebtedness of the Issuer, other than the Credit Agreement and except as permitted by the Credit Agreement as in effect on the date of the Asset Purchase Agreement and except to the extent a Lien of such Indebtedness would be permitted under Section 3(b) above, and (ii) the Issuer will not permit any of its subsidiaries to Guarantee any Indebtedness issued to a seller for the purposes of financing the acquisition of substantially all the assets of a business, unless in each case such subsidiary, concurrently with the incurrence of any such Guarantee, executes and delivers to the Noteholder a guarantee of the Issuer’s obligations under this Note, in the substantially the same form or otherwise in a form and substance reasonably satisfactory to the Noteholder.

6. Successors and Assigns. The provisions of this Note shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Issuer nor any Guarantor may assign its rights and obligations under this Note other than pursuant to a Permitted Merger. The Noteholder may at any time assign its rights and obligations under this Note to any other Person.

7. Prepayments; Optional Prepayment, Mandatory Prepayment. Subject to the provisions herein, the Issuer may, at any time and from time to time prior to the Maturity Date, prepay the principal amount of this Note, in whole or in part, without penalty or premium, on any Business Day. Subject to the terms of the Subordination Agreement (as amended, restated, modified or replaced from time to time) and any obligations to prepay the Credit Agreement, the Issuer will prepay the principal amount of this Note to the extent of the Net Cash Proceeds within 5 business days of when received by the Issuer from a Capital Market Transaction completed after the date hereof, provided that payments shall not be required to be made more frequently than once a month. Prepayments of this Note must be accompanied by payment of accrued and unpaid interest on the principal amount prepaid to and including the date of payment.

8. Definitions. As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) 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 the ownership of voting securities, by contract or otherwise.

“Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of November 2, 2009, among the Company, Buyer, Parent and Seller.

“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, as codified as 11 U.S.C. Section 101 et seq.

“Business Day” means any day other than Saturday, Sunday or other day on which the New York Stock Exchange is authorized or required by Law to close.

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“Capitalized Lease” means a lease under which the Issuer or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

For the purposes of this Note: (a) “Capital Market Transaction”, means the issuance by the Issuer in a registered public offering, Rule 144A offering or other capital market offering to institutional investors of common stock, preferred stock or Subordinated Debt or securities convertible or exchangeable for any of the aforementioned securities (or any combination thereof) in an offering generating proceeds in excess of $10,000,000; (b) “Net Cash Proceeds” means the excess of (i) the sum of the cash and cash equivalents received by the Issuer in connection with a Capital Market Transaction over (ii) the underwriting discounts and commissions, commitment fees, arrangement fees and other out-of-pocket fees, costs and expenses, incurred in connection with such Capital Market Transaction; and (c) “Subordinated Debt” means debt securities of the Issuer expressly subordinated in right of payment to the Credit Agreement or the Issuer’s 8.00% Senior Convertible Notes due 2014.

For the avoidance of doubt, a Capital Market Transaction shall not include (1) any issuances of securities registered on Form S-8 or other issuance to employees of stock, options or restricted stock units, or (2) the issuance of any JBO or similar stock to correspondent and/or customers, or (3) issuances in connection with the acquisition of a business or purchase of assets (including as an earn out, deferred purchase price or similar arrangement), or (4) issuances of securities in respect of the conversion of convertible securities, or (5) incurrence of indebtedness to the extent such indebtedness would have been permitted by the Credit Agreement as of the date of the Asset Purchase Agreement.

“Cash Management Obligations” means any obligations of the Issuer or any Subsidiary in respect of overdrafts and related liabilities arising from treasury, depository or cash management services.

“CFTC” means the Commodity Futures Trading Corporation, or any successor thereto.

“Change of Control” means

(i) an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding the Company, its subsidiaries, any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) (any such person or group, an “Acquiror”) files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that, or the Issuer otherwise becomes aware that, such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of 50% or more of the equity securities of the Issuer entitled to vote for members of the board of directors

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or equivalent governing body of the Issuer (“Issuer Voting Securities”) on a fully diluted basis (a “Control Interest”);

(ii) all or substantially all of the assets of the Issuer (on a consolidated basis) are sold or otherwise transferred to any person in one transaction or a series of related transactions in which, immediately after the consummation thereof, the holders of the majority of the Issuer Voting Securities prior to such transaction to not represent a majority of the Issuer Voting Securities or of the equity interests of the surviving or transferee person; or

(iii) the Issuer shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the Issuer.

“Company” has the meaning set forth in Section 1.

“Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of May 1, 2009, with Regions Bank, as Administrative Agent, Swing Line Lender and Letter of Credit Issuer, the lenders party thereto and other parties thereto, as amended by that certain First Amendment dated as of May 27, 2009 and Second Amendment dated as of September 22, 2009 (together with all exhibits and schedules thereto, as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified in writing from time to time) and any extension, renewal, replacement or refinancing of such credit facility from time to time.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Dollar” means lawful money of the United States.

“Events of Default” has the meaning specified in Section 4.

“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successors thereto.

“FSA” means the Financial Services Authority, or any successor thereto.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved

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by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, and (g) all obligations under Capitalized Leases.

“Interest Period” means the period commencing on the date of the initial borrowing under the Note (or the continuation of any prior interest period) and ending on the date three months thereafter; provided that:

(i) any Interest Period that would otherwise end on a day that is not a business day shall be extended to the next succeeding business day unless such business day falls in another calendar month, in which case such Interest Period shall end on the next preceding business day;

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(ii) any Interest Period that begins on the last business day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“Insolvency Proceedings” has the meaning specified in Section 4(e).

“LIBOR Rate” means, for any Interest Period, an interest rate per annum equal to the 90-day rate per annum obtained by dividing (a) the rate per annum (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in Dollars at 11:00 A.M. (London time) two business days before the first day of such Interest Period for a period equal to such Interest Period (provided that, if for any reason such rate is not available, the term “LIBOR Rate” shall mean, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest  ¹/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the LIBOR Rate Reserve Percentage for such Interest Period.

“LIBOR Rate Reserve Percentage” for any Interest Period means the reserve percentage applicable two business days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time) (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on LIBOR Rate Loans is determined) having a term equal to such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Loss” has the meaning ascribed to such term in the Asset Purchase Agreement.

“Material Subsidiary” means any Subsidiary of the Company which at the date of determination is a “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X

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under the Securities Exchange Act of 1934 (as such Regulation is in effect on the date hereof).

“Maturity Date” means [INSERT DATE EIGHTEEN MONTHS FROM DATE OF NOTE]⁸

“Note” means this Senior Note, as amended, restated, extended, supplemented or otherwise modified in writing from time to time.

“Noteholder” means the Payee and its permitted successors and assigns.

“Payee” has the meaning set forth in Section 1.

“Permitted Merger” has the meaning specified in Section 3(a).

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Purchase Price Adjustment” has the meaning ascribed to such term in Section 2.6 of the Asset Purchase Agreement.

“Regulated Subsidiary” means any Subsidiary registered or regulated as a broker or dealer with or by the SEC, FINRA, FSA, CFTC or any other applicable governmental authority, whether domestic or foreign.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Issuer.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time.

10. Miscellaneous.

(a) This Note is subject to the terms and conditions of the Subordination Agreement dated as of [                    ], 2010 among [Seller] and Regions Bank, as administrative agent on behalf of the Lenders party to the Credit Agreement (as amended, restated or otherwise modified from time to time, the “Subordination Agreement”). The Payee agrees that, upon the request of the Company

⁸ To have a maturity of 18 months.

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and the agent or trustee (or other person performing a similar function) under the Credit Agreement, Payee will promptly execute and deliver a written subordination agreement substantially in the form of the Subordination Agreement.

(b) No amendment or waiver of any provision of this Note and no consent by the Noteholder to any departure therefrom by the Issuer shall be effective unless such amendment, waiver or consent shall be in writing and signed by the Noteholder, and any such amendment, waiver or consent shall then be effective only for the period and on the conditions and for the specific instance specified in such writing. No failure or delay by the Noteholder in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other rights, power or privilege.

(c) Except as otherwise expressly provided herein, notices and other communications to each party provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed or sent by telecopy to the address provided from time to time by such party. All notices and other communications shall be effective upon receipt.

(d) If any provision of this Note is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Note shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(e) THIS NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE. THE ISSUER AND NOTEHOLDER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT AND EACH STATE COURT IN THE CITY OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. THE ISSUER AND NOTEHOLDER EACH IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE ISSUER OR NOTEHOLDER AT ITS ADDRESS SET FORTH BENEATH ITS SIGNATURE HERETO. THE ISSUER AND THE NOTEHOLDER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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(f) THE ISSUER AND THE NOTEHOLDER EACH WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(g) THIS NOTE AND THE ASSET PURCHASE AGREEMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

PENSON WORLDWIDE, INC.
By:
	Name:
	Title:
BROADRIDGE FINANCIAL SOLUTIONS, INC.
By:
	Name:
	Title:

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Grid for Recording Adjusted Amount

Date Amount of Increase (Decrease) to Principal Amount Adjusted Amount Entered By

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EX-10.1

Exhibit 10.1

NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED LANGUAGE.

Broadridge Financial Solutions, Inc.

1981 Marcus Avenue	TO BE PREPARED AND
Lake Success, New York 11042	SIGNED IN DUPLICATE

MASTER SERVICES AGREEMENT

Client:	Penson Worldwide, Inc.
Address:	1700 Pacific Avenue, Suite 1400
City:	Dallas, Texas, 75201

This Master Services Agreement (this “Master Services Agreement”), dated as of November 2, 2009 (the “Effective Date”), is made and entered into by and between Penson Worldwide, Inc. (“Penson”) and Broadridge Financial Solutions, Inc. (“Broadridge”).

WHEREAS, in connection with that certain Asset Purchase Agreement, dated November 2, 2009, (as amended, the “Asset Purchase Agreement”) among Broadridge, Ridge Clearing & Outsourcing Solutions, Inc., Penson and Penson Financial Services, Inc., Client (as defined in Section 1.B below) will acquire certain correspondent clearing contracts and other assets relating to the clearing business of Ridge (as defined in Section 1.B below) (the “Acquisition”); and

WHEREAS, in connection with the Acquisition, Ridge desires to perform, and Client desires to have performed by Ridge, the Services (as defined herein) in connection with the servicing of Client’s and its Affiliates newly acquired, existing and future business in accordance with the terms and conditions set forth in this Master Services Agreement and the Schedules (as defined in Section 1.A below).

NOW THEREFORE, in consideration of the terms and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

1. SCOPE OF AGREEMENT.

A. Services Schedules.

(i) Broadridge and Penson shall cause their respective Affiliates to enter into schedules (including, without limitation, any and all Attachments thereto, each a “Schedule” and collectively, the “Schedules”) in Canada, the United States and the United Kingdom. The Broadridge Affiliate that is a party to a Schedule is referred to in this Agreement (as defined in Section 1.A (iii) below) as the “Ridge Local Affiliate” and the Client Affiliate that is a party to a Schedule is referred to in this Agreement as the “Client Local Affiliate”. The Client Local Affiliate for the United States Schedule shall be Penson Financial Services, Inc., the Client Local Affiliate for the Canadian Schedule shall be Penson Financial Services Canada, Inc. and the Client Local Affiliate for the United Kingdom Schedule shall be Penson Financial Services Ltd. Each Schedule shall be governed by the terms and conditions of this Master Services Agreement as may be amended in accordance with its terms.

(ii) Notwithstanding the fact that a Schedule is implemented,

Broadridge/Penson Proprietary and Confidential

MASTER SERVICES AGREEMENT

(a) Broadridge shall (x) be responsible for the performance of all of the Services, and the performance of all obligations of Ridge under this Agreement, (y) be responsible for the compliance with any provisions of this Agreement applicable to Ridge and (z) if Ridge fails, neglects or refuses to perform any such Services or obligation under or otherwise breaches this Agreement, perform, or cause to be performed, any such Services or obligation or cure, or cause to be cured, such breach and bear joint and several liability with Ridge; provided, however, that in no event shall Broadridge or any other entity that is not properly registered or licensed to perform any such Services or obligation be required to perform such Services or obligation; and

(b) Penson shall (x) be responsible for the performance of all obligations of Client under this Agreement, (y) be responsible for the compliance with any provisions of this Agreement applicable to Client and (z) if Client fails, neglects or refuses to perform any obligation under or otherwise breaches this Agreement, perform, or cause to be performed, any such obligation or cure, or cause to be cured, such breach, or bear joint and several liability with Client; provided, however, that in no event shall Penson or any other entity that is not properly registered or licensed to perform any such obligation be required to perform of such obligation.

(iii) From time to time during the Term (as defined in Section 2 (Term) below), Broadridge and Penson (or their Affiliates) may elect to enter into additional written schedules in Canada, the United States, the United Kingdom and such other countries for which Broadridge and Penson may agree from time to time (each, a “Territory” and collectively the “Territories”). Each such additional schedule shall set forth:

(a) the Services (defined below) that Ridge shall perform under such schedule;

(b) specific Software (defined below) that Ridge licenses to Client in connection with Client’s receipt of the Services to be performed by Ridge under the schedule; and

(c) other terms and conditions as the parties may agree.

Each such schedule (when signed by authorized officers of both parties) shall be governed by the terms and conditions of this Master Services Agreement and deemed a Schedule hereunder. This Master Services Agreement, together with all Exhibits hereto and the Schedules, together with all Attachments thereto, shall be referred to, collectively, as the or this “Agreement.”

(iv) In the event of a conflict between the terms and conditions of any Schedule (including, without limitation, any Attachment or Appendix) and the terms and conditions of this Master Services Agreement, the terms and conditions of the Schedule shall control for the purpose of the relevant Schedule. Except where otherwise indicated, all references in this Master Services Agreement to Sections or Exhibits are to Sections to, and Exhibits of, this Master Services Agreement.

B. Certain Defined Terms.

The term “Affiliate” as used throughout this Agreement means as to any entity, any other entity that, directly or indirectly, Controls, is Controlled by or is under common Control with such entity.

The term “Client” as used throughout this Agreement means the applicable Client Local Affiliate receiving the Services under the applicable Schedule. For purposes of this Master Services Agreement, the use of the term “Client” shall mean “Penson” when Penson is obligated to perform on behalf of Client under Section 1.A(ii)(b).

The term “Control” (and derivatives thereof) as used throughout this Agreement means, with respect to any entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities (or other ownership interest), by contract or otherwise.

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The term “Governmental Authority” as used throughout this Agreement means any governmental, regulatory or administrative body, agency or authority, any court of judicial authority, any arbitrator or any public, private or industry regulatory authority (including, without limitation, any SRO as defined in the Exchange Act), whether foreign, federal, state or local.

The term “Laws” as used throughout this Agreement means all laws, rules and regulations, including, without limitation, all privacy and data protection laws, rules and regulations, all as enacted, promulgated and amended from time to time by any Governmental Authority. “Laws” shall also include contractual restrictions or obligations imposed upon a party by a Governmental Authority of which the affected party shall have given notice to the other party.

The term “Ridge” as used throughout this Agreement means the applicable Ridge Local Affiliate and permitted subcontractors of the applicable Ridge Local Affiliate performing the Services under the applicable Schedule. For purposes of this Master Services Agreement, the use of the term “Ridge” shall mean “Broadridge” when Broadridge is obligated to perform on behalf of Ridge under to Section 1.A(ii)(a).

The term “Services” as used throughout this Agreement means the services, products, functions and responsibilities of Ridge that are specified in the Schedules, together with the services, products, functions and responsibilities that are an inherent or customary part of such specified services, products, functions and responsibilities, even if such inherent or customary services, products, functions and responsibilities are not specifically described in this Agreement.

The term “Software” as used throughout this Agreement means all of the software and other technology necessary for Client to access and use the Services, whether owned by Broadridge or Ridge or licensed by Broadridge or Ridge from third parties and including, without limitation, all improvements enhancements, modifications, updates, releases and revisions provided in connection therewith.

C. Service Levels. Ridge shall provide the Services and, as applicable, the Software so that they meet or exceed the service levels set forth in each Schedule, any applicable service level agreement (each a “Service Level Agreement”), or as otherwise agreed to by the parties in writing (the “Service Levels”). Ridge will in the regular course of its business monitor its performance with respect to such Service Levels and report such performance to Client in writing on a monthly basis or as otherwise required by each Schedule.

In the event of a Service Level failure by Ridge that is not insignificant, Ridge shall take the following actions, each as soon as practicable under the circumstances: (a) investigate and report in writing on the root cause of the problem, (b) advise Client in writing of the remedial efforts being undertaken with respect to this failure to meet the Service Level and provide Client with and implement an improvement plan, (c) execute such remedial efforts, correct the problem and begin meeting the Service Level, (d) advise Client in writing from time to time on the status of Ridge’s remedial efforts and (e) provide reasonable evidence to Client that the problem has been corrected.

Upon a failure by Ridge to meet a Service Level, Client shall have the right either (a) to receive, subject to the terms and conditions of Attachment C (Service Levels) to the applicable Schedule, a credit in connection with such failure (each, a “Service Level Credit”) against fees owing by Client under this Agreement, (b) if the acts or omissions or performance that relate to or underlie such failure to meet a Service Level also constitute a breach by Broadridge or Ridge of any of its obligations under this Agreement, to forgo such Service Level Credit and seek monetary damages, subject to the provisions of Section 15 (Limitation on Liability) below or (c) to pursue any termination or other remedy available to Penson or Client under this Agreement.

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Throughout the Term (defined below), Ridge shall seek to improve the quality, efficiency and effectiveness of the Services to keep pace with technological and operational advances. Ridge shall do this, among other things, by identifying and assessing the implementation of industry practices, ‘best practice’ techniques and methods in providing the Services. In addition, Ridge shall provide the Services in a manner consistent with Ridge’s operation of its business generally, including, without limitation, training Ridge personnel in techniques and technologies used generally within the Ridge’s industry and making investments to maintain the currency of the tools, infrastructure and other resources Ridge uses to provide the Services.

2. TERM.

A. Term. The term of this Master Services Agreement shall begin on the Effective Date and shall continue until the later to occur of (i) all Schedules hereunder expiring or being terminated and (ii) the end of any applicable Transition Period (as defined below) (the “Term”).

B. Transition Services. At Client’s request upon termination or expiration of any Schedule for any reason, Ridge shall extend the provision of the Services and the term of any licenses relating to Software for a period not to exceed twenty-four (24) months (“Transition Period”) beyond the effective date of expiry or termination of such Schedule and in good faith and commercially reasonable manner agree to provide transition services to Client as requested by Client in writing for an orderly de-conversion of Client from Ridge’s platform (the “Transition Services”). In addition, during the Transition Period, unless otherwise agreed to by the parties in writing, Ridge shall continue to provide the Services and any Software as they had been provided prior to the termination or expiration of the applicable Schedule in accordance with the terms and conditions set forth in this Agreement. Any Transition Services to be provided by Ridge as requested in writing by Client during the Transition Period shall be provided to Client in accordance with the then-applicable rates for the relevant services (unless the applicable Schedule is terminated pursuant to Section 18.A (Ridge’s Material Breach) in which case Transition Services shall be provided at Ridge’s cost) or as otherwise agreed to by the parties in writing. In the event a Schedule is terminated by Ridge in connection with Client’s failure to pay any fees due under such Schedule (except for payment failures that are subject to a bona fide dispute between the parties), Ridge shall not be required to provide Transition Services or Services during the Transition Period until Client has cured any payment failures that are not subject to a bona fide dispute between the parties and unless Client pays for such Transitions Services and Services monthly in advance.

3. CHARGES.

A. Fees. The fees for the Services and Software provided to Client under any Schedule shall be set forth in such Schedule. Except as expressly set forth in this Agreement, there shall be no fees payable by Penson or Client in respect of Broadridge’s and Ridge’s performance of its obligations pursuant to this Agreement. Without limiting the generality of the foregoing, except as may be otherwise provided in this Agreement, expenses incurred by Ridge in performing the Services and providing the Software shall not be separately reimbursable by Client.

B. Fee Increases and Adjustments. Subject to the terms and conditions of any Schedule, Ridge may only increase the charges payable by Client under a Schedule as set forth in the applicable Schedule. Except as set forth in a Schedule, in no event shall the charges be increased at anytime during the Schedule Term (as such term is defined in the applicable Schedule).

C. Communications and Third-Party Charges. The communication and other non-Affiliated third-party charges set forth in the Schedules, if any, are based on current costs that Ridge pays to common carriers and other third parties. Ridge reserves the right to pass on any increase, and shall pass on any decrease, in the charges of third parties not Affiliated with Ridge to Client provided any such increases shall be passed through only to the extent they are passed through in the applicable Territory to all Ridge customers generally receiving the services of such common carriers and other third parties. Ridge shall use reasonable commercial efforts to provide Client not less than thirty (30) days prior notice thereof. For clarity, Ridge shall not pass through communication or other charges of any Affiliates of Ridge.

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MASTER SERVICES AGREEMENT

D. Taxes. There shall be added to all charges invoiced to Client pursuant to this Agreement amounts equal to any applicable taxes, duties, charges and other levies of any kind (other than taxes based on Ridge’s income or franchise taxes) applicable in the applicable Territory to the purchase or consumption of the Services, including, without limitation, provincial and local taxes, (exclusive of taxes based on Ridge’s income and franchise taxes), payable in respect of the Services received by Client. Ridge agrees to reasonably cooperate with Client to enable Client to more accurately determine its tax liability and to minimize such liability to the extent legally permissible and administratively reasonable. Ridge shall provide and make reasonably available to Client any exemption certificates, resale certificates, information regarding out-of-state or out-of-country sales or use of equipment, materials or Services and other information reasonably requested by Client and reasonably available to Ridge.

E. Payment. Client shall pay each invoice that Ridge provides to Client thirty (30) days after the date Client receives such invoice, subject to any bona fide dispute. If Client fails to pay any undisputed amounts under this Agreement when due, Client shall, upon written demand from Ridge, pay interest on such undisputed amounts at the rate of one percent (1%) per month (but in no event more than the highest interest rate allowable by Law) from the due date until the date of payment.

F. Rights of Offset. Without prejudice or limitation to any other rights or remedies of Penson or Client, if Penson or Client becomes entitled to receive any payment, or receive any credit, under or in connection with this Agreement, including, but not limited to, in connection with Service Level Credits, indemnification claims and claims by Penson or Client for breach of this Agreement, Penson or Client may, in its sole discretion, elect to reduce the principal amount of any note, or multiple notes, issued in connection with the Asset Purchase Agreement by an amount or amounts equal to all or part of such payment or credit in lieu of collection payment or receiving credit.

4. RIDGE RESPONSIBILITIES. Without limitation or prejudice to the provisions of this Master Services Agreement, any Schedule or any Service Level Agreement, in the performance of any Services under the provisions of a Schedule, Ridge agrees and undertakes to:

A. perform the Services professionally in accordance with any applicable Service Levels and the applicable provisions of this Agreement;

B. liaise and communicate in a timely manner with Client through Client’s designated representative or such representative’s designee on matters related to the Services and assign a qualified Ridge representative with whom Client will communicate. Ridge and Client may change their respective representatives from time to time by giving notice to the other. Ridge shall ensure that the representatives servicing Client’s account are fully informed about the Services and Client’s business requirements;

C. in a timely manner, provide Client with its standard user documentation relating to (i) the Services and/or Software, including, without limitation, any changes thereto and (ii) Ridge’s procedures relating to the Services and use thereof;

D. to the extent permitted by this Agreement or any applicable user documentation or procedures provided to Client, provide user access to the Services to persons authorized by Client, such access being governed by Ridge’s reasonable security procedures;

E. notify Client, and secure Client’s prior approval, if expenses beyond the defined charges within a Schedule or any Statement of Work (as defined below) may be incurred or expected, unless otherwise specified in this Agreement;

F. proceed according to Client’s reasonable written instructions for the disposition or delivery to Client of Client Information (as defined herein) or any data relating to Customers (as defined herein);

G. provide Penson and Client and their respective employees or authorized contractors with reasonable access to any facilities, machines, supplies or equipment which are owned, operated or leased by Penson or Client in connection with the Services and which are located on the premises of Broadridge, Ridge or their agents subject to compliance by Penson and Client and their respective employees and authorized contactors, with Broadridge’s and Ridge’s reasonable security, data center procedures and confidentiality requirements. Broadridge and Ridge will advise Penson and Client in advance of the applicable procedures and requirements;

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MASTER SERVICES AGREEMENT

H. from time to time, at Client’s request, perform professional services that will be described in a written statement of work executed by both Ridge and Client (“Statement-of-Work”). Upon the request of Client, Ridge and Client will in good faith, and without undue delay by Ridge, agree to the terms and conditions of a Statement-of-Work that will include, to the extent applicable and without limitation, the information specified below:

(i) Project identification, approach and objectives and the agreed-upon scope of the services;

(ii) The deliverables, including, without limitation, reports, software, services, specifications, lists, plans, manuals, diagrams, flow charts, data and other documents reports and recommendations, whether in written or electronic form (“Deliverables”) to be developed, delivered, prepared or required specifically for Client under such Statement of Work;

(iii) Specifications in respect of each Deliverable;

(iv) Acceptance tests or means proposed for testing Deliverables (“Acceptance Test”);

(v) If applicable, the fees for the services under such Statement of Work and the applicable payment terms;

(vi) Identification of project managers and other staffing by the parties, including, without limitation, names and position titles of key Ridge personnel who will be providing the services (which personnel may be substituted by Ridge);

(vii) Key project assumptions and responsibilities;

(viii) Project schedule showing the time frame for all stages of implementation of the services and milestones of the Statement of Work along with all associated milestone dates and production date, and other remedies for non-performance by Ridge;

(ix) Description of the hardware and software that may have to be procured by Client or any of Customers (as defined herein) for the provision of the services pursuant to the Statement of Work, as applicable;

(x) Maintenance and support services to be provided by Ridge in connection with the Deliverables, if applicable;

(xi) Applicable Service Levels, if applicable;

(xi) Training services and training materials to be provided by Ridge under the Statement of Work, if applicable;

(xii) Any Client resource commitments and responsibilities in addition to those set forth in this Agreement; and

(xiii) Any other information or agreements deemed relevant by Ridge and Client;

I. except as otherwise expressly provided in this Agreement and subject to Client providing the resources and materials required for it to receive the Services, provide at Ridge’s expense, all software, hardware, communication lines and services, equipment, systems and other technology, resources and materials necessary for Ridge to provide the Services to Client in accordance with the provisions of this Agreement;

J. subject to Section XIV (Acquisition of or by Another Ridge Local Affiliate Client) and Attachment B (Service Bureau and Operations Support Services Price Schedule) of the applicable Schedule, increase or decrease the volume of the Services upon Client’s request;

K. subject to Section XIV (Acquisition of or by Another Ridge Local Affiliate Client) and Attachment B (Service Bureau and Operations Support Services Price Schedule) of the applicable Schedule, under an existing Schedule provide the Services, in the applicable Territory, to such additional Affiliates of Penson or Client, as may be identified by Penson or Client from time to time to receive the Services at the rates and in accordance with the terms and conditions set forth in this Agreement (however, in no event shall any Affiliate of Penson or Client be obligated or required to receive Services from Ridge); provided, however, that any conversion services required for any such Affiliate shall be implemented pursuant to the Change Control Procedures applicable to Mandatory Changes and the Affiliate shall agree to be bound by the terms and conditions of the applicable Schedule;

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L. notify Client of any proposed change of the locations from which Ridge provides the Services under a Schedule and obtain Client’s prior consent (which consent shall not be unreasonably withheld) with respect to any such change in location only if such consent is required by Law;

M. use commercially reasonable efforts to obtain the approval of each relevant regulatory or self-regulatory agency or entity, if any, which regulates Ridge’s performance of the Services and whose approval is necessary for Ridge to perform and deliver the Services in the applicable Territory (including, without limitation, securities and commodities exchanges, associations of securities and/or commodities dealers, federal, provincial and local Governmental Authorities);

N. as required by all applicable Laws and Ridge policies in effect from time to time, conduct, in compliance with such Laws and policies, a criminal background check and drug-screening on, and provide bonding for, each individual who provides Services, at Ridge’s cost and expense, and not allow anyone to perform Services or assign anyone to the account of Penson or Client who has (i) a felony conviction or (ii) failed a drug test administered by Ridge; and

O. provide an adequate number of qualified individuals with suitable training, education, experience and skill to perform the Services.

5. COMMUNICATIONS LINES AND EQUIPMENT. Subject to receiving Client’s approval, Ridge may procure appropriate communications lines and equipment to enable Client to access the Services. Where Ridge procures such communication lines or equipment for Client, Ridge shall procure such services from reputable vendors but shall not be responsible for the reliability or continued availability of the communications lines and equipment used by Client in accessing the Services. Ridge shall replace any such third party vendors in the event that (a) reliability or continued availability is a significant issue or (b) at least fifty percent (50%) of Ridge’s clients utilizing such services in the applicable Territory request such replacement.

6. GOVERNANCE. Broadridge and Penson shall each appoint at least two senior level managers to a joint committee that shall meet no less than monthly to address issues that may arise in connection with the performance of the Services. In addition to the foregoing, the parties have agreed to the detailed governance provisions set forth in Exhibit C (Governance Structure).

7. USE OF THE SERVICES AND TRAINING.

A. Use of Services. Client shall use the Services in accordance with such rules as may be generally established and communicated by Ridge as applied to all of Ridge’s customers in the applicable Territory generally and set forth in materials promptly furnished by Ridge to Client in writing, provided, however, that Ridge shall not change the Services or any such rules in a manner that significantly interferes or significantly negatively impacts Client’s use of the Services or that results in any breach or violation in connection with the Assigned Contracts (as defined in the Asset Purchase Agreement) or establish rules that are inconsistent with or violate the provisions of this Agreement. Ridge agrees to use commercially reasonable efforts to provide Client with no less than thirty (30) days’ notice of any change to the rules relating to the use of the Services.

Except with respect to those Model A Clearing services provided by Client to its clients in the U.K., Client (and Affiliates of Client who have agreed to be bound by the terms and conditions of the applicable Schedule) shall use the Services only for its own business purposes in support of the brokerage or financial services and/or products it provides to its customers, correspondents and the clients and customers of such correspondents (including, without limitation, the brokerage customers introduced to Client by its correspondents (i.e., broker-dealers or other registered persons clearing or receiving services through Client) (collectively “Customers”)). For the avoidance of doubt, the foregoing prohibits Client (and Affiliates of Clients who have agreed to be bound by the terms and conditions of the applicable Schedule), except as expressly permitted by Ridge in writing, or other than as permitted herein, from selling, leasing, licensing, providing as a service bureau or otherwise providing, directly or indirectly, any of the Services or any portion thereof to any third-party exclusively as a technology services reseller or provider or outsourcer (e.g., acting in the same capacity as Ridge with respect to such third-party) without providing to such third-party Client’s normal course securities or financial services.

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B. Approvals. Client will use commercially reasonable efforts to obtain the approval of each relevant regulatory or self-regulatory agency or entity, if any, which regulates Client and whose approval is necessary for Client to receive the Services in the applicable Territory (including, without limitation, securities and commodities exchanges, associations of securities and/or commodities dealers, federal, provincial and local Governmental Authorities).

C. Training. Ridge, at its expense, shall provide Client with training in the use of the Services as reasonably requested by Client.

8. SOFTWARE.

A. License Grant. Broadridge and Ridge hereby grant to Client in each Territory during the applicable Schedule Term a limited, non-exclusive, non-transferable (other than as permitted herein including, without limitation, a permitted assignment), royalty-free license and/or sublicense, as the case may be, to use, and as applicable for Customers to use, the Software and related documentation in connection with their receipt and use of the Services. The Software and documentation may only be used by Client and its Customers in connection with the Services as permitted in Section 7.A (Use of Services). above except as otherwise permitted by Broadridge and Ridge. The license of Software shall be to the object code only unless specifically stated otherwise in the Schedule related thereto. Client accepts such license and/or sublicense, as the case may be, from Broadridge and Ridge for the Software upon the terms and conditions set forth in this Master Services Agreement. Broadridge and Ridge will be responsible for obtaining and maintaining all required consents with respect to the license for the Software in this Section 8.A (License Grant), including, without limitation, responsibility for the financial costs of obtaining such consents (e.g., for third party access, use, update or relocation consents).

B. Updates. Broadridge and Ridge agree and undertake to provide the Client with, as and when released and at no additional charges, any and all improvements, enhancements, modifications, updates, releases and revisions to the Ridge Products (as defined below), including, without limitation, customizations generally made available to Ridge’s other clients, delivered or made available by Broadridge and Ridge to Ridge’s clients generally using the Services (or applicable portion thereof) or substantially similar services. Client shall use commercially reasonable efforts to implement all improvements, enhancements, modifications, updates, releases and revisions to the Ridge Products delivered by Broadridge or Ridge to Client within forty-five (45) days after Client’s receipt thereof; provided, however, that the implementation of any such change required by the foregoing will not significantly impair use of the Services by Client or its Customers as contemplated by this Agreement. Broadridge and Ridge undertake not to modify the Ridge Products in a manner which negatively impacts use of the Ridge Products by Client or its Customers or receipt of the Services by Client or its Customers as set forth in this Agreement. Client shall not, without the prior consent of Broadridge or Ridge, which shall not be unreasonably withheld or delayed, change or otherwise modify any Software, except for Client Software (as defined below).

C. Client Software. Upon Client’s request, Ridge shall use its commercially reasonable efforts to provide Client with custom modification to the Services, custom software programming with respect to the Software (the “Client Software”) or custom program maintenance, in which case, the terms and conditions governing such custom modification to the Services, Client Software or custom program maintenance will be set forth in the applicable Schedule or Statement-of-Work (including, without limitation, the ownership thereof and any changes therefor). Any Client Software, custom modification to the Services, custom software programming, custom program maintenance or other professional services associated with the Client Software shall be provided in a timely manner and on terms and conditions at least no less favorable then those offered to any other customer of Ridge (including, without limitation, as to priority and resource allocation).

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9. OWNERSHIP AND USE OF RIDGE PRODUCTS.

A. Ownership. Client acknowledges that, as between Client, Broadridge and Ridge, the Ridge Products are and shall remain the exclusive and confidential property of Broadridge and Ridge. For purposes of this Agreement: “Ridge Products” means the Software and systems provided and owned by Broadridge or Ridge and used to provide the Services, the Ridge websites used to host and provide Services through the Internet and the Broadridge or Ridge processes and materials and documentation relating to such Software, Services, systems and websites, including, without limitation, (i) any modifications or enhancements made to the Software, databases that are a part of the Services, or systems used to provide the Services, (ii) any plans contemplating further development of the foregoing and (iii) all copyrights, patents, trade secrets and other intellectual and proprietary rights relating to all of the foregoing. Broadridge and Ridge acknowledge that, as between Client, Broadridge and Ridge, the intellectual property owned or provided by Penson or Client is and shall remain the exclusive and confidential property of Client. For the avoidance of doubt, nothing in this Agreement shall transfer, grant or provide Broadridge or Ridge or any other person with any rights in intellectual property or confidential information or proprietary rights or data or information of, or provided by, Penson or Client or any of their Affiliates or any Customers, correspondents or customers and none of such intellectual property or confidential information or proprietary rights or data or information shall be considered Ridge Products or Ridge Information.

B. Use. Client may use the Ridge Products only in conjunction with the Services and Software. Client shall not copy, in whole or in part, the Ridge Products or related documentation, whether in the form of computer media, printed or in any other form; provided, however, that Client may make an appropriate number of copies of the Ridge Products for back-up, quality assurance, testing, archive and disaster recovery purposes only or to comply with the requirements of Governmental Authorities. Client shall not make any alteration, change or modification to any of the Ridge Products without Broadridge’s or Ridge’s prior consent in each instance, which consent shall not be unreasonably withheld or delayed. CLIENT MAY NOT RECOMPILE, DECOMPILE, DISASSEMBLE, OR REVERSE ENGINEER THE RIDGE PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE SOFTWARE).

C. Return or Destroy. Upon the later of the (a) completion of Transition Services and (b) expiration or termination of a Schedule for any reason, and subject to the terms and conditions hereof, Client shall return to Ridge or, upon Ridge’s request, use reasonable commercial efforts to destroy, all copies of the Ridge Products that are in its possession that do not relate to any other existing Schedules, except as otherwise required by applicable Law. Nothing is this Agreement will require the destruction of copies of any records or files containing information that has been created pursuant to any automated archiving or back up procedure that cannot be reasonably deleted, which records and files will continue to be subject to the confidentiality provisions herein.

10. CONFIDENTIALITY.

A. Definitions. In connection with this Agreement, including, without limitation, the evaluation of new services contemplated by the parties to be provided by Ridge under this Agreement, information will be exchanged between and among Broadridge, Ridge, Penson and Client. Broadridge and Ridge shall provide information that may include, without limitation, confidential information relating to the Ridge Products, trade secrets, strategic information, information about systems and procedures, confidential reports, Ridge customer information, vendor and other third party information, financial information including, without limitation, cost and pricing, sales strategies, computer software and tapes, programs, source and object codes, and other information that is provided under circumstances reasonably indicating it is confidential (collectively, the “Ridge Information”), and Penson and Client shall provide information that may include, without limitation, confidential information relating to Penson, Client or any of their Affiliates, customer information, which may include Personal Information (defined below), to be processed by the Services, and other information, including, without limitation, trade secrets, strategic information, information about systems and procedures, confidential reports, customer information, vendor and other third party information, financial information including, without limitation, cost and pricing, descriptions of Penson’s or Client’s business (including, without limitation, features of any product or service and details of implementation of any such business), sales strategies, computer software and tapes, programs, source and object codes, and other information that is provided under circumstances reasonably indicating it is confidential (“Client Information”) (the Ridge Information and the Client Information collectively referred to herein as the “Information”). Subject to the terms and conditions hereof, Personal Information that is exchanged shall also be deemed Information hereunder. “Personal Information” means personal information about an identifiable individual including, without limitation, name, address, contact

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information, age, gender, income, marital status, finances, health, employment, social insurance number and trading activity or history. Subject to applicable legal and regulatory requirements, Personal Information shall not include the name, title or business address or business telephone number of an employee of an organization in relation to such individual’s capacity as an employee of an organization. As between the parties hereto, the Information of each party shall remain the exclusive property of such party. Notwithstanding anything to the contrary, (i) Ridge Information shall not include or contain any Client Information, including, without limitation, Personal Information provided by Penson or Client, which shall remain the exclusive property of Penson or Client and (ii) Client Information shall not include or contain any Ridge Information, including, without limitation, Personal Information provided by Ridge.

B. Obligations. Subject to the terms and conditions hereof, the receiver of Information (the “Receiver”) shall keep any Information provided by the other party (the “Provider”) strictly confidential and shall not, without the Provider’s prior consent, disclose such Information in any manner whatsoever, in whole or in part, and shall not duplicate, copy or reproduce such Information, including, without limitation, by means of photocopying or transcribing of voice recording, except in accordance with the terms and conditions of this Agreement or in connection with its receipt or provision of Services hereunder. The Receiver shall only use, copy or duplicate the Information as reasonably required to carry out the purposes of this Agreement.

C. Disclosure Generally. Broadridge and Ridge and Penson and Client agree that the Information shall be disclosed by the Receiver only to: (i) the employees, agents and consultants of the Receiver and its Affiliates who have a “need to know” such Information in connection with Receiver’s performance or use of the Services, as applicable, and (ii) auditors, counsel, and other representatives of the Receiver and its Affiliates for the purpose of providing assistance to the Receiver in the ordinary course of Receiver’s performance or use of the Services, as applicable; in each case, who have been informed of the confidential nature of the Information and agreed to maintain the confidentiality of such Information and who have entered into a written confidentiality agreement with the Receiver on terms and conditions no less restrictive than the confidentiality terms and conditions set forth in this Agreement. The Receiver will take reasonable steps to prevent a breach of its obligations by any employee or third party. The Receiver shall be liable for any violation of this Section 10 (Confidentiality) by its employees, or any third party to whom Receiver discloses Information of the Provider.

D. Compelled Disclosure. If the Receiver or anyone to whom the Receiver transmits the Information pursuant to this Agreement becomes compelled, in accordance with any legal or regulatory requirement, including, without limitation, the requirements of any self-regulatory organization or agency having jurisdiction over such persons or any regulations or requirements relating to fair disclosure pertaining to a party or its Affiliates, to disclose any of the Information, then the Receiver will provide the Provider with prompt notice before such Information is disclosed (or, in the case of a disclosure by someone to whom the Receiver transmitted the Information, as soon as the Receiver becomes aware of the compelled disclosure), if not legally prohibited from doing so, so that the Provider may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If such protective order or other remedy is not obtained, then the Receiver will furnish only that portion of the Information which the Receiver is advised by reasonable written opinion of counsel is legally required and will exercise its reasonable efforts to assist the Provider (at Provider’s sole expense) in obtaining a protective order or other reliable assurance that confidential treatment will be accorded to the Information that is disclosed.

E. Exceptions. Except with respect to Personal Information, nothing contained herein shall in any way restrict or impair the right of the Receiver to use, disclose or otherwise deal with:

(i) Information which at the time of its disclosure is publicly available, by publication or otherwise, or which the Provider publicly discloses either prior to or subsequent to its disclosure to the Receiver or which is or becomes part of the public domain without breach of this Agreement by Receiver;

(ii) Information which the Receiver can show was in the possession of the Receiver, or its parent, subsidiary or Affiliated company, at the time of disclosure and which was not acquired, directly or indirectly, under any obligation of confidentiality to the Provider;

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(iii) Information which is independently acquired or developed by the Receiver without violation of its obligations hereunder, including, without limitation, Information obtained from a third party, not known by the Receiver to have an obligation to maintain the confidentiality of such information; or

(iv) Information relating to this Agreement in the Receivers’ or its Affiliates’ public securities filings if the Receiver or its Affiliates shall determine that this Agreement is required to be so disclosed in accordance with applicable securities Laws or any other applicable legal or regulatory requirements.

In addition, each employee of the Receiver shall be free to use for any purpose, after termination of this Master Services Agreement, any general knowledge, skill or expertise (but which shall specifically exclude any Information) that (i) is acquired by such employee in performance of a parties obligations hereunder, (ii) remains part of the general knowledge of such employee after access to the tangible embodiment of the Provider’s Information, (iii) does not contain or include any such Information and (iv) is not otherwise specific to the Provider.

F. Return or Destroy. Upon the later to occur of the termination of a Schedule for any reason or the completion of the applicable Transition Services, the Receiver shall return to the Provider, or use reasonable commercial efforts to destroy, any and all copies of Information of the other that are in its possession relating to such terminated Schedule, except for any copies reasonably required to maintain the Receiver’s customary archives or computer back-up procedures, and as otherwise required by applicable Law. Notwithstanding anything to the contrary, Broadridge and Ridge shall comply with Penson’s instruction relating to return or disposition of any Client Information in Broadridge’s or Ridge’s possession; provided, however, that, Ridge shall have the right to keep one (1) copy of such Information as may be reasonably required to evidence the fact that it has provided the Services to Client which records and files will continue to be subject to the confidentiality provisions herein. Client shall pay Ridge (at the rates set forth in the applicable Schedule, or, if no such rates are set forth, at Ridge’s then current charges) for Ridge’s actual time spent and incidental expenses actually incurred in connection with such return. Additionally, upon termination or expiration of a Schedule, Ridge agrees to store Client Information and other Client property for a period not to exceed twelve (12) months in a reasonable format required by Client and at Client’s reasonable cost and expense, and Ridge will continue to observe the confidentiality provisions of this Agreement with respect thereto.

11. PERSONAL INFORMATION.

A. Obligations. Neither Broadridge nor Ridge shall use any Personal Information of Customers or such Customer’s clients except to the extent reasonably required to carry out its obligations under this Agreement and shall only disclose Personal Information to persons who have been informed of the confidential nature of the Personal Information. Broadridge and Ridge shall have such persons sign agreements whereby they agree to keep such information strictly confidential and limit any use made of such Personal Information by such persons to those reasons for which it was explicitly disclosed. In connection with Ridge’s provision of the Services, Ridge shall comply with all privacy and data protection Laws applicable to Ridge or its performance and delivery of the Services, including, without limitation, if applicable, the EU Data Protection Directive and EU Member State implementing laws, including, without limitation, EU laws that apply to cross-border data transfers and corresponding Laws in the Territories. Broadridge and Penson agree that where, in order to receive Services under this Agreement, a Client Local Affiliate in the European Economic Area (“EEA”) or Canada will need to transfer data to Ridge in a country not ensuring an adequate level of data protection, in accordance with EU Laws or Canadian Laws, the applicable Client Local Affiliate and Ridge Local Affiliate will enter into the European Commission’s approved data export clauses for data controller/data processor exports (version 2001) as soon as practicable (and in any event within thirty (30) days) after the date that the need for such transfer of data is first identified by the parties. For avoidance of doubt, Broadridge and Penson understand and acknowledge that these obligations are in addition to the privacy and security obligations specified in this Agreement.

In addition, Ridge shall have obligations with respect to Compliance Directives that relate to privacy and data protection Laws as set forth in Section 16.C (Compliance Directives) below. Broadridge and Ridge agree to (and as long as legally permitted) comply with Penson’s commercially reasonable requests in connection with the treatment, handling and disclosure of Personal Information made available to Ridge by Client, including, without limitation, any information relating to Customers.

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In addition and notwithstanding anything to the contrary herein or otherwise, with respect to Personal Information provided or otherwise made available to Broadridge or Ridge by Penson, Client or Client’s Affiliates and Customers, Broadridge and Ridge agree:

(i) not to use the Personal Information for any purposes other than those related to the performance of Broadridge’s or Ridge’s obligations under this Agreement;

(ii) to promptly forward any individual’s request for access to Personal Information to Penson and Client, and to reasonably co-operate with Penson or Client (at Penson’s or Client’s expense) in responding to such access request, including, without limitation, providing information regarding the use and disclosure of such Personal Information by Broadridge or Ridge;

(iii) to promptly notify Penson and Client of any complaints received or any notices of investigation or non-compliance from any Governmental Authority related to the collection, use or disclosure of Personal Information, and to reasonably co-operate with Penson and Client and reasonably assist in any such investigation, all at Penson’s and Client’s expense;

(iv) that as between Penson and Client and Broadridge and Ridge, Penson and Client are and remain the exclusive owners of all right and title in and to the Personal Information and shall be and remain in complete control of the collection, use and disclosure of the Personal Information. No access to or custody over Personal Information by Broadridge or Ridge or other persons as permitted in this Agreement shall be construed in any manner as providing control, power, authority or any other rights with respect to such Personal Information. Control of all Personal Information is vested solely in Penson and Client and their permitted assigns and nothing in this Agreement shall in any way be construed to grant control of the Personal Information to Broadridge and Ridge, or any subsidiary, Affiliate, subcontractor or third party except to the extent expressly permitted by this Agreement. Broadridge and Ridge shall at all times adhere to the written directions of Client (and its assignees) with respect to the Personal Information, so long as such written directions are lawful. Under no circumstances shall Broadridge or Ridge enter into any relationship, contractual or otherwise, with another person (other than regulatory authorities, or as required by applicable Law or the order of any court) involving sharing or access to the Personal Information, except as set out in this Agreement or approved by Penson or Client in advance; and

(v) upon the expiration or termination of a Schedule or upon Penson’s or Client’s request, to cease any and all use of the Personal Information and other data of Customers or any Affiliates’ customers and their respective clients disclosed under such Schedule and all copies thereof, and return same to Penson or Client or destroy same in a manner designated by Penson or Client or otherwise agreed by the parties, except that Ridge may retain one (1) copy for legal and audit purposes provided such copy is protected as Personal Information and confidential information in accordance with this Agreement.

B. Security Measures. In connection with providing the Services, Broadridge and Ridge shall (i) establish, implement and maintain commercially reasonable measures to protect the security, confidentiality and integrity of Personal Information of Penson’s or Client’s customers against anticipated threats, unauthorized access, disclosure or use, and improper disposal and (ii) provide Penson or Client with information regarding such security measures upon the reasonable request of Penson or Client.

C. Security Breaches. Each party shall promptly provide the other party with notice of (i) any disclosure, access to or use of any Personal Information relating to such other party’s customers or employees in breach of this Master Services Agreement and (ii) any unauthorized intrusion into systems containing such other party’s Personal Information. The party who had possession or control of the applicable Personal Information at the time of the breach or intrusion shall at its cost and expense (1) investigate and respond to, and remediate the effects of, the breach or intrusion in accordance with applicable Laws and such party’s own policies and procedures, and using commercially reasonable efforts and (2) provide the other party with assurance reasonably satisfactory to such other party that such breach or intrusion shall not recur. The

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response and remediation required under the preceding sentence may include, to the extent applicable, (A) developing and delivering legal notices required by any applicable Laws, (B) making available a toll free telephone number or numbers (or where not available, a dedicated telephone number or numbers) where affected individuals may receive individual specific assistance and information relating to the breach or intrusion and (C) providing free credit reports, and/or credit monitoring/repair services for affected individuals for the longer of one (1) year or the period required by applicable Laws following the announcement or disclosure of the breach or intrusion or notice to the affected individuals. Client shall have the right to participate in any security investigation relating to the Personal Information of any customer of Penson or Client. Notwithstanding the foregoing or anything in this Agreement to the contrary, neither party shall be precluded from immediately pursuing any rights or remedies it may have under or relating to privacy, security or confidentiality.

12. DATA SECURITY AND ACCESS.

A. Data Security Measures. Broadridge and Ridge will maintain commercially reasonable security measures, including, without limitation, without limitation those described in Exhibit B (Ridge Data Security Measures) attached hereto, designed to ensure that access to the Penson or Client files is available only to Penson or Client and those entities that process information contained in the Penson or Client files in order for Ridge to execute the Services (e.g., Canadian stock exchanges, clearing agencies, NYSE and DTC). Subject to the foregoing and Section 16 (Laws and Governmental Regulations), Broadridge and Ridge reserve the right to issue and change procedures from time to time to improve file security. Broadridge or Ridge, as applicable, will notify Penson or Client, as applicable, prior to making any such changes and obtain Penson’s or Client’s prior consent (which consent shall not be unreasonably withheld) with respect to the change only if such consent is required by Law.

B. Loss or Alteration. Broadridge and Ridge will take commercially reasonable precautions to prevent the loss of or alteration of the Penson and Client files retained by Broadridge and Ridge which shall include commercially reasonable data back-up procedures. Penson and Client will keep copies of the source documents of the Penson and Client files delivered to Broadridge or Ridge and will maintain procedures external to the Broadridge and Ridge systems for the identification of such losses and for the reconstruction of lost or altered Penson and Client files, to the extent deemed necessary by Penson and Client.

C. Audits. Ridge’s practices relating to audits of the Services shall be set forth in the Schedule relating to such Services. Except as otherwise provided in the applicable Schedule relating to specific Services, Ridge shall have an independent third party audit performed annually describing Ridge’s security and control policies and procedures with respect to the Services consistent with past practices.

D. Personnel. Ridge personnel and contactors performing services at any Client location will observe and comply with Client’s security procedures, rules, regulations, policies, working hours and holiday schedules of which they have actual notice and Ridge will use its commercially reasonable efforts to minimize any disruption to Client’s normal business operations while performing services at any Client location.

E. Security Breaches. Broadridge and Ridge shall promptly provide Penson or Client, as applicable, with notice of any breach of data security involving Penson or Client files or Information, as applicable, in the possession of Broadridge or Ridge or any of their Affiliates or subcontractors and shall at its cost and expense (1) investigate and respond to, and remediate the effects of, the security breach in accordance with applicable Laws and Broadridge’s and Ridge’s policies and procedures, and using commercially reasonable efforts, (2) provide Penson and Client with assurance reasonably satisfactory to such other party that such breach or intrusion shall not recur, (3) promptly furnish to Penson and Client full details that Broadridge or Ridge has or may obtain regarding such unauthorized access and use reasonable efforts to assist Penson and Client in investigating or preventing the reoccurrence of any such access and (4) cooperate with Penson and Client in any litigation and investigation against third parties deemed reasonably necessary by Penson and Client to protect its rights.

F. Ownership and Access to Client Data. As between Penson and Client and Broadridge and Ridge, Penson and Client shall own all right, title and interest in and to all Client Information, files and data, including, without limitation, any and all Client Information, files or data resulting from the performance of the

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Services. Penson and Client shall at all times have the right to access and use the Client Information, files and data. Broadridge and Ridge shall deliver Client Information, files and data, or cause the same to be delivered to Penson and Client, upon demand in accordance with Attachment B (Service Bureau and Operations Support Services Price Schedule) to the applicable Schedule or as otherwise agreed by the parties, and upon the later of the expiration or termination of the applicable Schedule or the completion of the Transition Services (at Ridge’s cost). Broadridge and Ridge shall deliver such Information, files and data in the format and on the media in use as of the date of the demand or time of required delivery, as applicable.

13. WARRANTY.

A. Conformance with Specifications. Broadridge and Ridge warrant to Penson and Client that the Services, the Software and the Client Software, if any, will conform to their respective functional and technical specifications. Such specifications are subject to amendment by mutual agreement, from time to time, in which case the Services, Software and Client Software will conform to their respective modified functional and technical specifications; provided, however, that any such amendment shall not significantly impair or reduce the functionality of the Services or Client’s use of such Services. This warranty shall not extend to Software or Client Software to the extent that the failure to perform is caused by an alteration or modification by anyone other than Broadridge or Ridge or their agents or otherwise authorized by Broadridge or Ridge or their agents.

B. Right to Furnish. Penson and Client represent and warrant to Broadridge and Ridge that they have the right to furnish the Client Information and any other materials provided to Broadridge and Ridge in connection with Broadridge and Ridge performing their obligations as contemplated herein and in the Schedules (neither Penson nor Client shall be deemed to have furnished to Broadridge or Ridge any Client Information relating to any of the Assigned Contracts (as defined in the Asset Purchase Agreement) as of the Effective Date). Broadridge and Ridge represent and warrant to Client that they have the right (including, without limitation, under the Assigned Contracts) to provide the Services, Software, Ridge Information and any other services provided to Penson and Client under this Agreement in connection with Broadridge and Ridge performing its obligations as contemplated herein and in the Schedules.

C. Professional Performance. Ridge warrants to Client that the Services shall be performed in a diligent, professional and workmanlike manner and by competent and skilled personnel duly qualified to carry out their responsibilities required for the applicable service.

D. Viruses. Broadridge and Ridge represent, warrant, and covenant to Penson and Client that they shall use their commercially reasonable efforts to ensure that the Software does not include, and it shall use commercially available virus scanning software to detect the inclusion of, any computer code, program, or programming device designed to disrupt, modify, delete, damage, deactivate, disable, harm, or otherwise impede the operation of the Software, or any other associated programs, firmware, hardware, computer system, or network (sometimes referred to as “Trojan horses,” “viruses,” or “worms”), or any other similar harmful, malicious, or hidden procedures, routines, or mechanisms that would intentionally cause such Software to cease functioning or to damage or corrupt data, storage media, programs, equipment, or communications, or otherwise interfere with Penson’s or Client’s operations (collectively, “Destructive Elements”). If Broadridge or Ridge detect any such Destructive Elements in the Software, Broadridge or Ridge agree to eliminate such Destructive Elements as promptly as reasonably practicable and shall notify Penson and Client thereof as soon as possible.

E. No Conflict with Assigned Contracts. Broadridge and Ridge represent and warrant to Penson and Client that the transactions contemplated by this Agreement (including, without limitation, the performance of the Services by Ridge in accordance with the provisions of this Agreement), do not conflict with or violate, or otherwise result in a breach of, the provisions of any of the Assigned Contracts. Broadridge and Ridge represent, warrant and covenant to Penson and Client that they shall not implement any changes to the Services that will, or will be likely to, result in a breach under any of the Assigned Contracts.

F. Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS MASTER SERVICES AGREEMENT OR ANY SCHEDULE, THERE ARE NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

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14. INDEMNITY.

A. Broadridge Indemnity. Broadridge shall indemnify, defend and hold harmless Penson and its Affiliates and its and their respective directors, officers, employees, agents, successors and permitted assigns (“Client Indemnitees”) from and against any and all losses, damages, liabilities, demands, claims, actions, proceedings and related expenses (including, without limitation, reasonable attorneys’ fees and expenses) (referred to collectively hereinafter as “Losses”) incurred by Client Indemnitees arising out of or resulting from third-party claims related to:

(i) any infringement by the Services or the Software of any patent, copyright, trademark, service mark, trade secret or other intellectual property rights in the Territories (“Intellectual Property Right”) of any third party. With respect to claims under this Subsection (i), if Client is enjoined or otherwise prohibited from using the Services or such Software, Broadridge or Ridge shall, at their sole expense and at their option, (a) procure for Client the right to continue using the Services or such Software, or (b) substitute a non-infringing version of the services or such Software so that the Services or such Software becomes non-infringing and still conforms in all material respects to its applicable functional and technical specifications or any documentation provided hereunder, or, if neither of the foregoing options is available in a commercially reasonable solution, then Ridge may terminate the infringing Services and/or Software and eliminate the charges for the terminated Services and/or Software and if Ridge elects to terminate such Services or Software, and as a result of such termination, the Services and/or Software under the applicable Schedule are adversely affected in a material manner, then Client may terminate the applicable Schedule. Notwithstanding the foregoing, Broadridge or Ridge shall have no liability for any claims of infringement of any Intellectual Property Right to the extent such infringement is caused by (x) Client’s use of the Software in combination with software, data or services not supplied by Broadridge or Ridge as part of this Agreement or otherwise authorized by Broadridge or Ridge, or (y) any modification or attempted modification of such Software made by anyone other than Broadridge or Ridge or its agents or without Ridge’s or its agents’ authorization;

(ii) Broadridge or Ridge’s failure to comply with any Ridge Laws;

(iii) any fines or penalties assessed by any Governmental Authority resulting from the implementation of any change by Ridge or the establishment of any new or modified rule by Ridge for which Ridge is responsible under Section 16.F (Implementation of Changes in Laws) below;

(iv) physical injury to persons or tangible personal property caused by the fault or negligence of Broadridge’s or Ridge’s officers, employees, agents, or representatives;

(v) any claim or assertion by any of the individuals performing the Services including, without limitation, any claim or assertion that Client Indemnitees should be deemed the “employer” or “joint employer” of any of the individuals performing Services under this Agreement, but excluding any claim or assertion that is the subject of Penson’s indemnification obligation under Section 14.B(ii) or Section 14.B(iii) below; or

(vi) any claims brought against Penson or Client by Ridge’s suppliers arising from or related to Ridge’s provision of providing the Services hereunder, but excluding any claim or assertion that is the subject of Penson’s indemnification obligation under Section 14.B(iii) below.

B. Penson Indemnity. Penson shall indemnify, defend and hold harmless Broadridge and its Affiliates and its and their respective directors, officers, employees, agents, successors and permitted assigns (“Ridge Indemnitees”) from and against any and all Losses incurred by Ridge Indemnitees arising out of or resulting from any third-party claims related to:

(i) Data or information provided by Penson or Client so long as such claims relate to the data or information at the time they were initially provided to Broadridge or Ridge by Penson or Client and in the form they were initially provided to Broadridge or Ridge by Penson or Client;

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(ii) Penson or Client’s failure to comply with any Client Laws;

(iii) physical injury to persons or tangible personal property caused by the fault or negligence of Penson’s or Client’s officers, employees, agents or representatives;

(iv) any Customer Dispute (as defined below) with respect to the Services, except to the extent that such Customer Dispute arise from (a) Broadridge or Ridge’s gross negligence, willful misconduct or fraud; (b) a Ridge operational error for which Ridge is responsible under Section 15.B (Historical Losses) (below); (c) a claim for which Penson or Client is indemnified under Section 14.A (Ridge Indemnity); or (d) a matter that would give rise to an indemnification obligation of Broadridge or Ridge under the Asset Purchase Agreement. For purposes of the forgoing, a “Customer Dispute” shall mean any error, controversy, dispute or discrepancy between Penson or Client and any of its Customers, any Customers’ accounts, any counterparty to a transaction by Penson or Client, and any of its correspondents or any of their Customers or related to the Customers or any Customers accounts or clearing broker proprietary accounts;

(v) any claims brought against Broadridge or Ridge by Client’s suppliers arising from or related to Ridge’s provision of the Services hereunder, but excluding any claim or assertion that is the subject of Broadridge’s indemnification obligation under Section 14.A(iv) above; or

(vi) Penson or Client exercising its right to directly, or through an agent, take control of a Service pursuant to Section 19.O (Step In Rights) below.

C. Indemnity Procedures. A party seeking indemnity under this Section 14 (Indemnity) shall: (i) promptly after receiving notice of the commencement of a claim or litigation for which indemnity may be sought under this Section 14 (Indemnity), give the indemnifying party prompt notice thereof, together with any and all documentation received related to such claim or litigation; (ii) give the indemnifying party full control over the defense and settlement of any claim or litigation for which indemnification is sought under this Section 14 (Indemnity), except to extent such claim involves a proceeding with any Governmental Authority or action by or against any customer of Penson or Client; and (iii) reasonably cooperate with the indemnifying party, at the indemnifying party’s expense, to facilitate the defense or settlement of any such claim or litigation; provided, however, that a failure to comply with the foregoing procedures shall relieve the indemnifying party from its obligation to indemnify solely to the extent that such failure results in prejudice to the indemnifying party. The party seeking indemnification may participate in the defense or negotiations at its own expense to protect its interests, except to extent such claim involves a proceeding with any Governmental Authority or action by or against any customer of Penson or Client. The indemnifying party shall not enter into any settlement agreement that impairs the rights or expands the obligations or admits wrongdoing of the party seeking indemnification without the prior consent of such party; provided, however, that the indemnifying party may settle any claim or cause of action to the extent such claim seeks monetary damages if the indemnifying party agrees to pay such monetary damages and that the other party to this Agreement is not required to admit wrongdoing or is not otherwise negatively impacted by the settlement of such claim or cause of action.

15. LIMITATION OF LIABILITY.

[****].

16. LAWS AND GOVERNMENTAL REGULATIONS.

A. Client Laws. As used in this Agreement, “Client Laws” means (a) SARBOX (defined below) and other similar Laws that govern the maintenance and assessment of a company’s internal financial auditing controls, in each case as applicable to Penson or Client, (b) Laws specifically promulgated for

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implementation by companies in the business of providing correspondent clearing services to brokers, dealers or other financial intermediaries, whether on a fully-disclosed or omnibus basis, including, without limitation, services subject to FINRA Rule 3230, NYSE Rule 382 or comparable rules or laws of any other Governmental Authority, (c) Laws that pertain to the operation of the business of Penson or Client, (d) privacy and data protection Laws that are applicable to Penson or Client or Client’s receipt or use of the Services or the performance of its obligations under this Agreement and (e) Laws that are specifically applicable to the receipt and use of the Services by Client. Penson and Client shall comply with all Client Laws in connection with Client’s receipt and use of the Services and the performance of their obligations under this Agreement; provided, however, that nothing herein shall excuse or otherwise limit the responsibilities of Broadridge or Ridge pursuant to this Agreement. As used herein, the term “SARBOX” means the Sarbanes-Oxley Act of 2002 and any rules and regulations promulgated thereunder (as enacted, promulgated and amended from time to time).

B. Ridge Laws. As used in this Agreement, “Ridge Laws” means (a) Laws that pertain to the operation of Broadridge’s or Ridge’s business by Broadridge or Ridge; (b) Laws that regulate Broadridge or Ridge in their capacity as a provider of the Services; or (c) privacy and data protection Laws applicable to Broadridge or Ridge or their performance and delivery of the Services or the performance of their obligations under this Agreement. In connection with their performance and delivery of the Services and their performance of their obligations under this Agreement, Broadridge and Ridge shall comply with all applicable Ridge Laws. If Broadridge or Ridge becomes aware of its non-compliance with any Ridge Law, to the extent such non-compliance impacts the Services or the Agreement, Broadridge and Ridge shall promptly notify Penson and Client. Unless such non-compliance is caused by Penson or Client, Broadridge or Ridge shall promptly implement such changes as may be necessary to correct such non-compliance at Broadridge’s or Ridge’s sole cost and expense.

C. Compliance Directives. From time to time Penson or Client may request Ridge as to the manner in which Ridge should implement compliance with any Client Laws and as to any changes in Ridge’s rules, policies, procedures or processes relating to such compliance that Penson or Client instructs Ridge to make (each, a “Compliance Directive”). Ridge is authorized to act and rely on, and shall promptly implement, each Compliance Directive in the performance and delivery of the Services including, without limitation, required changes to the Software and Ridge Products, in accordance with the Change Control Procedures applicable to Mandatory Changes.

D. Changes in Laws. Each party shall identify and notify the other party of any change in any Ridge Law or Client Law, as applicable, that affect the delivery, receipt or use of Services of which it may become aware.

E. Financial Responsibility for Changes to the Services. To the extent that at least fifty percent (50%) of the Ridge clients in the applicable Territory receiving the Services request that Ridge make a change to the Services as a result of a new or modified Law or a change in Law that affect Ridge’s clients or Penson’s clients, Ridge shall make such change to the Services to ensure compliance with such new Law or such change in Law at no additional charge to Client. In the event that (a) Penson or Client requests that Ridge make such a change and (b) the Steering Committee does not agree that such change is required for regulatory compliance purposes, then Ridge shall make such change, at Penson’s or Client’s cost and expense as determined pursuant to the Change Control Procedures set forth in Section IV (Change Control) of Exhibit C (Governance Structure); provided, however, that in the event (i) the Steering Committee subsequently requests that Ridge make such change or (ii) at least fifty percent (50%) of the Ridge clients in the applicable Territory receiving the Services request such change, in each case, within twelve (12) months after Penson’s or Client’s request for such change, Ridge shall credit Penson or Client such costs and expenses paid to Ridge by Penson or Client for such change.

F. Implementation of Changes in Laws. Notwithstanding anything to the contrary in this Agreement,

(i) if Ridge implements a change to the Services pursuant to Section 16.C (Compliance Directives) or Section 16.E (Financial Responsibility for Changes to the Services) and Ridge fails to implement such change in accordance with the written instructions of Penson or Client or the Steering Committee (as applicable) for such change or implements such change in the production environment prior to

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Penson’s, Client’s or the Steering Committee’s (as applicable) written acceptance of the implementation of the change, then in accordance with Section 14.A(iii) Ridge shall be liable for any fines or penalties assessed against Penson, Client or any of its Affiliates by a Governmental Authority to the extent resulting from Ridge’s implementation of the change;

(ii) if Ridge implements a change to the Services and Ridge implements such change in the production environment without Penson’s, Client’s or the Steering Committee’s (as applicable) written acceptance of the implementation of the change, then in accordance with Section 14.A(iii) Ridge shall be liable for any fines or penalties assessed against Client or any of its Affiliates by a Governmental Authority to the extent resulting from Ridge’s implementation of the change; or

(iii) if Ridge establishes a new or modified rule relating to the use of the Services that is inconsistent with or violates any applicable Law, then in accordance with Section 14.A(iii) Ridge shall be liable for any fines or penalties assessed against Penson, Client or any of their Affiliates by a Governmental Authority to the extent resulting from Ridge’s establishment of such new or modified rule.

G. Services in Violation of Laws. Subject to the provisions hereof, if providing any of the Services to Client hereunder is determined or adjudicated, by any court or Governmental Authority having jurisdiction (by a binding final ruling or order), to constitute a violation of any material Laws or governmental regulations, Ridge shall use commercially reasonable efforts to modify the relevant Services in order to make such Services compliant with the relevant Laws or regulations without material loss of functionality or performance. Where making such Services compliant with such Laws or regulations is not possible, Ridge or Client may, upon reasonable notice to the other party, terminate the provision of such Services, and in any such case, Ridge agrees to provide a refund to Client of any fees paid in advance by Client for such Services, and the applicable Schedule shall be deemed terminated or amended to eliminate such Services and the fees adjusted accordingly.

Client shall have the right to terminate the applicable Schedule if Client’s primary regulators in the applicable Territory prohibit or deny approval, in a final written ruling or order, for Client to receive the Services from Ridge. Any such termination shall be on a “no fault” basis and for greater certainty, Client will have no obligation to pay any termination charges, liquidated damages or other damages or sums set forth hereunder as a result of such termination. For the avoidance of doubt, Client shall be responsible for any use it may make of the Services to assist it in complying with Client Laws, provided, however, that Broadridge and Ridge shall remain responsible for the performance of their obligations under this Agreement, including, without limitation as provided in Section 16.F (Implementation of Changes in Laws).

17. NON-COMPETITION AND NON-SOLICITATION.

A. Non-Competition.

(i) During the Term and for one (1) year following the expiration or termination thereof (including, without limitation, any Transition Period), unless terminated by Broadridge for Penson’s or Client’s breach of this Agreement, neither Broadridge nor any of its Affiliates shall, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an advisor, partner, agent, representative, consultant or otherwise with or use or permit its name, trade name, service name or service mark to be used in connection with, any Restricted Client Business (defined below).

As used herein, the term “Restricted Client Business” means correspondent clearing services including, without limitation, with respect to (a) correspondent clearing services subject to FINRA Rule 3230, NYSE Rule 382 or comparable rules of any other Governmental Authority or (b) any business or enterprise involving or engaged in the business as a broker or dealer or future commissions merchant in providing securities, futures, commodities or foreign exchange transaction execution, clearance, settlement or financing (including, without limitation, margin and portfolio margining) to brokers, dealers, other professional traders or financial intermediaries, or customers.

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(ii) It is recognized by Broadridge that the Restricted Client Business as engaged in by Penson, Client and their Affiliates is and will continue to be international in scope, and that geographical limitations on this non-competition covenant (and the non-solicitation covenant set forth in Section 17.B (No Solicitation) below) are therefore not appropriate.

(iii) The restriction in Section 17.A(i), however, shall not be construed to prohibit Broadridge or any of its Affiliates from:

(a) conducting or engaging in Model A Clearing services in the U.K., where Broadridge or any of its Affiliates provides, or will provide simultaneously therewith, processing services to the same client or its affiliates in at least one (1) other country;

(b) maintaining a broker-dealer for purposes other than to provide Restricted Client Business; and

(c) owning not more than 5% of any class of securities of any corporation which is engaged in the Restricted Client Business having a class of securities registered pursuant to the Securities Exchange Act of 1934 as amended from time to time (the “Exchange Act”); provided, however, that such ownership represents a passive investment and that neither Ridge nor any of its Affiliates nor any group of persons including, without limitation, Ridge or any of its Affiliates in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business other than exercising its rights as a shareholder, or seeks to do any of the foregoing.

(iv) The parties acknowledge and agree that the agreements and covenants set forth in this Section 17.A (Non-Competition) are: (a) necessary to protect the legitimate business interests of Penson, Client, Broadridge and Ridge, (b) reasonable as to time, geographic area and scope of activity and do not impose a greater restraint on the activities of either party than is reasonably necessary to protect such legitimate business interests of Penson, Client, Broadridge and Ridge and (c) reasonable in light of the consideration and other value provided under the Asset Purchase Agreement and this Agreement.

(v) The parties acknowledge that (a) the foregoing agreements and covenants are an essential element of this Agreement between the parties, (b) that the foregoing agreements and covenants are a key part of the overall consideration in connection with this Agreement and (c) that in the absence of such limitations the terms and conditions set forth in this Agreement would be substantially different.

(vi) The parties hereby waive any and all right to, contest the validity of any agreement or covenant in Section 17.A(i) above, including, without limitation, the breadth of its geographic or business coverage or the length of its term, without first procuring an unqualified opinion from a law firm with attorneys licensed to practice in the applicable geographic area stating that such agreement or covenant is unenforceable in such geographic area.

(vii) If, notwithstanding the foregoing, any of the above agreements and covenants in Section 17.A(i) (or any items or elements thereof) are held to be unreasonable, invalid, or otherwise unenforceable, in whole or in part, Penson, Client, Broadridge and Ridge each agree that any court or authority so finding will have the authority to reform, redraft, blue pencil or otherwise modify any and all portions ruled to be unreasonable, invalid or unenforceable, whether as to time, scope, geography or otherwise, so that the covenant or covenants, as so reformed, will be applicable and enforceable to the fullest extent allowed by Law. The agreements and covenants contained in Section 17.A(i) and each provision thereof are severable and distinct agreements, covenants and provisions. The invalidity or unenforceability of any such agreement, covenant or provision as written shall not invalidate or render unenforceable the remaining agreements, covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such agreement, covenant or provision in any other jurisdiction. The existence of any claim or cause of action by a party against another (or any of its respective Affiliates) will not constitute a defense to the enforcement by a party of such agreements, covenants or provisions.

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B. No Solicitation.

(i) During the Term, neither Broadridge nor any of its Affiliates shall, either directly or indirectly, (a) call on or solicit or entice, or attempt to solicit or entice, any person, firm, corporation or other entity who or which at any time during the Term is a customer or client, or potential customer or client, of Penson or any of its Affiliates with respect to the provision of the Restricted Client Business, (b) influence, or attempt to influence, any person, firm, corporation or other entity who or which at any time during the Term was or is a customer or client of Penson or any of its Affiliates to stop doing business with Penson or any of its Affiliates in connection with the Restricted Client Business (except that Broadridge may take such actions with respect to clients or customers of Penson or any of its Affiliates who have initiated contact with Broadridge or one of its Affiliates for business other than the Restricted Client Business) or (c) influence, or attempt to influence, any person, firm, corporation or other entity who or which at any time during the Term was or is a customer or client, or potential customer or client, of Penson or any of its Affiliates to do business with a competing entity to provide the Restricted Client Business. The restriction in this Section 17.B(i) shall not be construed to prohibit Broadridge or any of its Affiliates from continuing to call on solicit any person, firm, corporation or other entity who or which was the subject of active calls or solicitation by Broadridge or one of its Affiliates during the six (6) month period immediately prior to the Effective Date.

(ii) During the Term, neither Penson nor any of its Affiliates shall, either directly or indirectly, (a) call on or solicit or entice, or attempt to solicit or entice, any person, firm, corporation or other entity who or which at any time during the Term is a customer or client, or potential customer or client, of Broadridge or any of its Affiliates with respect to the provision of transaction processing or outsourcing business by Broadridge or its Affiliates, (b) influence, or attempt to influence, any person, firm, corporation or other entity who or which at any time during the Term was or is a customer or client of Broadridge or any of its Affiliates to stop doing business with Broadridge in connection with the transaction procession or outsourcing business by Broadridge or its Affiliates or (c) influence, or attempt to influence, any person, firm, corporation or other entity who or which at any time during the Term was or is a customer or client, or potential customer or client, of Broadridge or any of its Affiliates to do business with a competing entity to provide the transaction processing or outsourcing business by Broadridge or its Affiliates. The restriction in this Section 17.B(ii) shall not be construed to prohibit Penson or any of its Affiliates from continuing to call on solicit any person, firm, corporation or other entity who or which was the subject of active calls or solicitation by Penson or one of its Affiliates during the six (6) month period immediately prior to the Effective Date.

C. Equitable Remedies. In the event of a breach or a threatened breach by either party of any of the provisions of Section 17.A (Non-Competition) or Section 17.B (No Solicitation), each party acknowledges that the other party will suffer irreparable damage or injury not fully compensable by money damages, or the exact amount of which may be impossible to obtain, and, therefore, will not have an adequate remedy available at law. Accordingly, the non-breaching party will be entitled to obtain such injunctive relief or other equitable remedy, without the necessity of posting bond therefor, from any court of competent jurisdiction as may be necessary or appropriate to prevent or curtail any such breach, threatened or actual. The foregoing will be in addition to any other rights the non-breaching party may have at law or in equity, including, without limitation, the right to sue for damages.

18. TERMINATION.

A. [****]

B. [****]

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C. Insolvency. This Master Services Agreement or the applicable Schedule shall terminate immediately upon the occurrence of any of the following events:

(i) (a) a party applies for or consents to the appointment of a receiver, trustee or liquidator for substantially all of its assets, or such a receiver, trustee or liquidator is appointed for the other party; (b) a party has filed against it an involuntary petition for bankruptcy that has not been dismissed within sixty (60) days thereof, or files a voluntary petition for bankruptcy or a petition or answer seeking reorganization; (c) a party admits in writing its inability to pay its debts as they mature; or (d) a party makes an assignment for the benefit of creditors; or

(ii) a party becomes subject to a consent decree, settlement agreement, enforcement decision, stipulation, letter of acceptance, waiver and consent, or other order from a governmental regulatory body, self-regulatory organization, exchange, or other financial services regulatory or self-regulatory authority that makes it impossible or impractical for Broadridge or Ridge to perform or Penson or Client to receive the Services.

D. Force Majeure Event. Penson may terminate a Schedule upon notice to Broadridge in the event a Force Majeure Event (as defined below) continues to prevent the performance of the Services under such Schedule for more than a period of thirty (30) days.

E. [****].

F. [****].

G. Termination Relating to Service Levels. Notwithstanding anything to the contrary, the Service Level Agreement shall specify mutually agreed-to termination rights with respect to Service Level failures.

H. Additional Termination Rights. Penson’s termination rights described herein are in addition to, and shall not limit, the termination rights of the applicable Client Local Affiliate in the applicable Schedule.

I. [****].

J. Termination Fees. Except as set forth in Sections IV.B (Client Local Affiliate’s Termination) of any Schedule, no termination fees or termination charges of any type shall be payable by Penson or Client to Broadridge or Ridge in connection with the expiration or any termination of this Master Services Agreement or Schedule in whole or by service.

K. Survival. Upon expiration or termination of this Master Services Agreement, the following sections shall survive: 1.A (ii) (Services Schedules), 1.B (Certain Defined Terms)), 2.B (Transition Services), 3 (Charges) (with respect to periods to and including the effective date of expiration or termination), 5 (Communications Lines and Equipment), 9.A (Ownership), 9.C (Return or Destroy), 10 (Confidentiality), 11 (Personal Information), 12 (Data Security and Access), 14 (Indemnity), 15 (Limitation of Liability), 16 (Laws and Governmental Regulation), 17.A (Non-Competition), the last sentence of Section 18.B (Client’s Material Breach), 18.K (Survival), 18J (Termination Fees), 19 (General) and any additional provisions of this Master Services Agreement and a Schedule that by their nature continue to survive any expiration or termination of this Master Services Agreement or such Schedule.

L. Failure to Close Asset Purchase Agreement. The Agreement shall terminate automatically without payment of any termination fees or termination charges by either party pursuant to this Agreement in the event the Asset Purchase Agreement is terminated in accordance with its terms.

19. GENERAL.

A. No Inducements. Each party acknowledges that it has not been induced to enter into this Master Services Agreement or any of the Schedules by any representation or warranty not set forth in this Master Services Agreement or the Schedules.

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B. Assignment. Neither this Master Services Agreement or any Schedule, nor any of the rights, duties or obligations hereunder, may be delegated or assigned by a party hereto or thereto without the prior consent of the other party hereto except to an Affiliate or as part of any corporate reorganization, including, without limitation, any merger, consolidation acquisition or amalgamation in which all or substantially all of its assets or equity ownership are transferred or as part of any sale of all or substantially all of the capital stock or assets.

This Master Services Agreement and each Schedule shall be binding upon and shall inure to the benefit of the parties hereto and thereto and their respective successors and permitted assigns.

C. Severability. If any provision of this Agreement (or any portion hereof) is held to be invalid, illegal or unenforceable, then the validity, legality or enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby.

D. Notices. All notices, consents, approvals, agreements, authorizations, acceptances, rejections, requests and waivers under this Agreement must be in writing and shall be forwarded by registered or certified mail or nationally recognized overnight courier and sent to Broadridge, Ridge, Penson and Client at the addresses set forth on the first page of this Master Services Agreement or to any other address designated in writing hereafter. In the case of notices to Penson or Client, Attention: President, with a copy to Penson Financial Services, Inc, 1700 Pacific Ave., Ste. 1400 Dallas, TX 75201, Attention: General Counsel. Any notice to Broadridge or Ridge shall be sent Attention: President, with a copy to Ridge Clearing & Outsourcing, Inc., 1981 Marcus Avenue, Lake Success, New York 11042, Attention: General Counsel.

E. Headings. The headings in this Master Services Agreement and the Schedules are intended for convenience of reference and shall not affect their interpretation.

F. Counterparts. This Master Services Agreement and any Schedule may be executed in counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument. This Master Services Agreement and any Schedule may be executed by facsimile signature.

G. Equitable Relief. In the event of a breach or a threatened breach by either party or any of its Affiliates of any of the provisions of Section 7.A (Use of the Service), Sections 9 (Ownership and Use of Ridge Products), 10 (Confidentiality), 11 (Personal Information) or 17 (Non-Competition and Non-Solicitation), each party acknowledges that the other party may suffer irreparable damage or injury not fully compensable by money damages, or the exact amount of which may be impossible to obtain, and, therefore, may not have an adequate remedy available at law. Accordingly, the non-breaching party will be entitled to seek to obtain such injunctive relief or other equitable remedy, without the necessity of posting bond therefor, from any court of competent jurisdiction as may be necessary or appropriate to prevent or curtail any such breach, threatened or actual. The foregoing right will apply without having to follow any dispute resolution process or procedure set forth elsewhere in this Agreement. The foregoing will be in addition to any other rights the non-breaching party may have under this Agreement, at Law or in equity, including, without limitation, the right to sue for damages or terminate this Agreement.

H. Governing Law. This Master Services Agreement and the Schedules shall be governed by, and construed and enforced in accordance with, the Laws of New York applicable to agreements wholly to be executed and to be performed therein.

I. Independent Contractor. Broadridge and Ridge are independent contractors and their personnel are not Penson’s or Client’s agents or employees for federal, provincial, or local tax purposes or any other purposes. Broadridge and Ridge, and not Penson or Client, are solely responsible for the compensation of personnel assigned to perform Services hereunder, and payment of worker’s compensation, disability, and other similar benefits, unemployment and other similar insurance, for withholding income and payroll taxes and for verifying the work eligibility of each person performing services hereunder.

J. Relationship of Parties. Nothing contained in this Master Services Agreement or any Schedule, nor shall any activity hereunder, create a general or limited partnership, association, joint venture or agency relationship between Penson and Broadridge or the applicable Client Local Affiliate and Ridge Local Affiliate.

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K. Cumulative Remedies; Waiver. The enumeration herein of specific remedies shall not be exclusive of any other remedies. Subject to Section 18.I (Timely Exercise of Termination Rights), the waiver by either party of a breach of or a default under any provision of this Agreement shall not be effective unless in writing and shall not be construed as a waiver of any subsequent breach of or default under the same or any other provision of this Agreement.

L. Third-Party Beneficiaries. This Master Services Agreement is by and between Broadridge and Penson only (and the Schedules are by and between the applicable Ridge Local Affiliate and the applicable Client Local Affiliate only) and, except as otherwise provided in Sections 14 (Indemnity) and 15 (Limitation of Liability), above, is not intended to confer and shall not confer any benefits or rights upon any other persons not expressly made parties hereto, including, without limitation, customers of Penson or service providers of Broadridge.

M. Force Majeure. In no event shall either party be liable or deemed to be in default for any delay or failure to perform under this Agreement resulting directly or indirectly from any cause beyond its reasonable control, including, without limitation, acts of God, acts of the public enemy, acts of the governments, fires, floods, epidemics, quarantine restrictions, acts of terrorism, riots and freight embargoes (“Force Majeure Event”); provided that (1) the non-performing party (and the suppliers and contractors of such party) are without material fault in causing the default or delay and (2) the default or delay cannot be reasonably circumvented by the non-performing party through the use of commercially reasonable alternative sources, workarounds, plans or other means (including, without limitation, with respect to Ridge, by Ridge meeting its obligations to provide disaster recovery and business continuity services, except to the extent that provision of such services is itself prevented by a Force Majeure Event). Notwithstanding the foregoing, in every case the party claiming excusable delay shall use its commercially reasonable efforts to prevent and mitigate the effect and length of such Force Majeure Event. Performance times under this Agreement shall be considered extended for a period of time equivalent to the time lost because of any delay which is excusable under this Section 19.M (Force Majeure). If Ridge fails to provide the Services due to a Force Majeure Event for more than five (5) days, the fees under this Agreement shall be adjusted in a manner such that Penson and Client are not responsible for the payment of any fees (or other charges) for Services that Ridge fails to provide.

N. Disaster Recovery and Business Continuity. Ridge shall maintain the disaster recovery and business continuity services as set forth in Attachment E (Disaster Recovery; Business Continuity) to the applicable Schedule. Ridge shall implement its disaster recovery and business continuity plans as required, including, without limitation, in the event of a Force Majeure Event (except to the extent that provision of such services is itself prevented by a Force Majeure Event, in accordance therewith).

O. Step In Rights. If Ridge fails to provide any Services and such failure would give rise to a right for Penson to terminate this Master Services Agreement or a Schedule pursuant to Section 18.A (Ridge’s Material Breach), Penson or Client may, subject to following, take control of the part of the Services that is impacted and, in doing so, may take such other action as is reasonably necessary to restore the Services. In no event may Penson or Client, or its agents, take control of any of the Services pursuant to this Section 19.O (Step In Rights) to the extent doing so would cause Broadridge or Ridge to be in breach of any agreement it has with any third party. If Penson or Client’s election to take control of the part of the Services that is impacted will require Penson or Client to enter Ridge locations, the provisions of Exhibit D (Step In Rights) shall apply. Ridge shall cooperate fully with Penson or Client and its agents and provide all reasonable assistance at no charge to Penson or Client to restore such Services as soon as possible, including, without limitation, giving Penson or Client and its agents all requested access to Ridge’s premises, equipment, software (including, without limitation, third-party software) and materials. Penson or Client shall disrupt Ridge’s operations or compromise the confidentiality of any other clients of Ridge.

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P. Integration; No Modification. This Master Services Agreement, the Schedules and the agreements, instruments and documents referred to in this Master Services Agreement and the Schedules contain the entire agreement of the parties with respect to its subject matter and supersede all existing agreements and all other oral, written or other communications between them concerning their subject matter. This Master Services Agreement and the Schedules shall not be modified in any way except by a writing signed by both parties.

Q. Use of Name; Press. Each party agrees that neither it nor any of its Affiliates will display or use any of the other party’s or such party’s Affiliates’ trade-marks, trade names, logos or any other intellectual property or issue any press release or other public statement or notice identifying the other party or its Affiliates or any Customers as customers or otherwise relating to this Agreement or the relationship between Broadridge and Ridge and Penson and Client and/or their Affiliates without the prior consent of the other party, which consent shall not be unreasonably withheld. In the event that a party is required to disclose this Agreement or its existence by Law or to one of its regulators (e.g., publicly filing this Agreement with the United States Securities and Exchange Commission) the parties shall inform each other in writing of such requirement and cooperate in good faith in order for this Agreement to be redacted and afforded as much confidential treatment as is feasible. Any consent of by either party required by this Section 19.P (Integration; No Modification) shall be obtained from an officer holding a title of Executive Vice President or higher.

R. Claims. Any claims by Broadridge or a Ridge Local Affiliate under this Master Services Agreement or a Schedule shall be brought by Broadridge and Broadridge shall enforce the applicable provisions of this Master Services Agreement or a Schedule to the same extent as a Ridge Local Affiliate as if such Ridge Local Affiliate was a party to this Master Services Agreement. As such, in no event shall a Ridge Local Affiliate be entitled to bring any claim against Penson, or the applicable Client Local Affiliate, under this Master Services Agreement or a Schedule. Notwithstanding the foregoing provisions of this paragraph, a Ridge Local Affiliate may bring a claim against the Client Local Affiliate that is party to such Schedule in the applicable Territory only to the extent such claim is required by Law to be brought in such Territory. Broadridge shall in such instance remain responsible for and shall oversee such claim and such claim shall be subject to the limitations on liability in this Master Services Agreement.

Any claims by Penson or a Client Local Affiliate under this Master Services Agreement or a Schedule shall be brought by Penson and Penson shall enforce the applicable provisions of this Master Services Agreement or a Schedule to the same extent as a Client Local Affiliate as if such Client Local Affiliate was a party to this Master Services Agreement. As such, in no event shall a Client Local Affiliate be entitled to bring any claim against Broadridge, or the applicable Ridge Local Affiliate, under this Master Services Agreement or a Schedule. Notwithstanding the foregoing provisions of this paragraph, a Client Local Affiliate may bring a claim against the Ridge Local Affiliate that is party to such Schedule in the applicable Territory only to the extent such claim is required by Law to be brought in such Territory. Penson shall in such instance remain responsible for and shall oversee such claim and such claim shall be subject to the limitations on liability in this Master Services Agreement.

For clarity, Broadridge and Penson shall be entitled to the benefit of all rights, defenses, counterclaims and other protections to which the Ridge Local Affiliate or Client Local Affiliate, as applicable, may be entitled with respect to any such cause of action under this Master Services Agreement or a Schedule.

S. Audit. Broadridge and Ridge shall maintain such books and records as are (a) necessary to demonstrate Broadridge’s and Ridge’s compliance with its obligations under this Agreement, (b) necessary to verify Service volumes and fees and (c) necessary to comply with all applicable Ridge Laws and (d) necessary to document any Compliance Directives implemented pursuant to the provisions of Section 16.C (Compliance Directives) above. Broadridge and Ridge shall provide to Penson, Client and their auditors access at all reasonable times and after reasonable notice (not to exceed thirty (30) days unless a shorter period is required by a Governmental Authority) to any Ridge service location, to Ridge personnel providing the Services, and to data and records relating to the Services and Broadridge’s or Ridge’s performance under this Agreement, for the purposes of performing audits and inspections of (i) Broadridge’s or Ridge’s compliance with the provisions of this Agreement, including, without limitation, the fees charged to Client and (ii) Penson, Client and their businesses to verify the integrity of Client Information and to examine the Software and Ridge Products and systems that process, store, support and transmit that Information. Additionally, during the Term, Broadridge and Ridge shall obtain and have performed and provide

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Penson’s and Client’s internal and external auditors and regulators with attested locally applicable audit reports (e.g., Model A / Model B Assurance Report on Internal Controls (AAF), Canadian Institute of Chartered Accountants Section 5970 and SAS-70 Type II audit reports) (the “Audit Reports”) on an annual basis each for a period to end on September 30^th of each calendar year and delivered no later than November 15 ^th of each calendar year. Broadridge and Ridge shall additionally provide Penson’s and Client’s internal and external auditors, at Penson’s and Client’s request with any reasonable additional information and assistance as may be reasonably requested by Penson and Client (including, without limitation, with requests, reports and information relating to compliance with SARBOX or equivalent regulatory requirements).

T. Insurance. Ridge shall, throughout the Term and the Transition Period, directly or through the insurance programs of Broadridge, maintain in full force and effect from a third party that is rated “A-” or better in Best’s Insurance Guide at a minimum the following insurance coverage for its operations worldwide:

(i) A policy of workers’ compensation insurance (as required by the applicable Law) on its employees. Such policy shall provide statutory limits and contain employer’s liability coverage in an amount not less than U.S. $1,000,000.

(ii) Commercial general liability insuring against bodily injury, property damage, contractors’ completed operations and contractual liability with a combined single limit of not less than U.S. $1,000,000 per claim.

(iii) Professional liability and errors and omissions insurance in an amount not less than U.S. $25,000,000 per claim.

(iv) Comprehensive crime insurance, including, without limitation, employee dishonesty and computer fraud, with coverage limits of at least U.S. $10,000,000 in the annual aggregate. The policy shall provide coverage for fraud or dishonesty by Ridge personnel whether acting alone or in collusion with others, and whether acting from Ridge service locations or remote locations.

(v) Umbrella/Excess liability coverage of not less than U.S. $25,000,000 over the coverages shown above.

Penson and Client shall be named as additional insureds under the policies described in Section 19.T(ii) under which the aforesaid insurance is provided. Insurance carried on a claims made basis shall be maintained for two (2) years after the expiration or termination of the Term. For the avoidance of doubt, any policy amounts or limitations shall not in any event be construed as limitations on Ridge’s liability under this Agreement, nor shall they be construed as expanding Broadridge’s or Ridge’s liability under this Agreement. Ridge shall furnish Penson and Client with certificates of insurance evidencing the above coverages and providing for at least thirty (30) days prior notice to Penson and Client of cancellation or non-renewal; provided, however, that Ridge shall not be obligated to provide such notice if, concurrently with such cancellation or non-renewal, Ridge provides self insurance as described below or obtains coverage from another insurer meeting the requirements described above. Notwithstanding the foregoing, so long as Ridge maintains a credit rating that is not significantly worse than its credit rating as of the Effective Date, Ridge reserves the right to self insure coverage, in whole or in part, in the amounts and categories designated above, in lieu of Ridge’s obligations to maintain insurance as set forth above, at any time.

*                        *                         *                        *

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BROADRIDGE FINANCIAL SOLUTIONS, INC.		PENSON WORLDWIDE, INC.
Approved by:	/s/    John Hogan	Approved by:	/s/    Daniel P. Son
	(signature – Authorized Officer)		(signature – Authorized Officer)
Name:	John Hogan	Name:	Daniel P. Son
	(type or print)		(type or print)
Title:	President	Title:	President
	(type or print)		(type or print)
Dated as of:	November 2, 2009	Dated as of:	November 2, 2009

THIS AGREEMENT SHALL BECOME EFFECTIVE UPON BEING SIGNED BY AN AUTHORIZED OFFICER OF BOTH BROADRIDGE AND PENSON.

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Exhibit A

Intentionally left blank.

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Exhibit B

Ridge Data Security Measures

Broadridge and Ridge will carry out the following procedures to protect Client Information:

1.	Maintain a Corporate Security Policy reviewed regularly and approved by Broadridge Executive Management and Ridge Executive Management.
2.	Protect against threats or hazards to confidentiality, availability, and integrity of data and systems through the use of static and or dynamic vulnerability assessment tools.
3.	Employ public or financial industry standards of encryption, when communicating Client Information over untrusted networks, or when transporting confidential information on mobile devices, USB media, and backup media.
4.	Prohibit unauthorized physical access to systems as well as employ facilities protection measures to deter, prevent and track unauthorized access.
5.	Develop operational processes to ensure segregation of duties and maintain access controls to critical resources.
6.	Develop internal processes to limit and track all administrative functions.
7.	Develop documented procedures for system configuration to eliminate potential for unauthorized access.
8.	Employ firewall security and prohibit system administrative functions through remote internet access to the firewall.
9.	Employ a documented process and application development standards based upon reasonable security development practices.
10.	Perform backups of system, application, and data with reasonable procedures and frequency. Maintain backup information in secure off-site storage.
11.	Employ industry reasonable best practices procedures to ensure personnel security and ensure personnel understanding of security processes and procedures.
12.	Develop documented procedures for the retention and destruction of computer media and documents in electronic or paper form.
13.	Perform background checks on all of its new hires who are involved in performing the Services under this Agreement in accordance with Broadridge’s and Ridge’s policies.
14.	Implement and maintain an information security program with a dedicated program manager.
15.	The program shall have the stated objective of continuously improving and monitoring performance of current and future security initiatives.
16.	Comply with legislative and regulatory requirements based on the jurisdiction of the information.
17.	Monitor and log all access to data center facilities.
18.	Implement and maintain adequate system logging to monitor and control changes to the production environment.
19.	Implement and maintain adequate application logging to monitor and control all changes to the production data and operational environment.
20.	Implement data destruction procedures to eliminate the risk of data compromise on decommissioned systems and media. (similar to 12 – but it sounds like they are aiming for e-discovery).
21.	Implement and maintain a training program for developers, administrators, and IT staff which covers topics specific to their duties and expertise (secure development, server hardening, etc.).

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Exhibit C

Governance Structure

I. INTRODUCTION

This Exhibit provides the Governance Structure, which details: (i) those roles and responsibilities of both parties that are required to maintain an effective working relationship and (ii) reporting mechanisms to be established and implemented by the parties to enable Penson and Client to review and evaluate the performance of the Services by Ridge as part of Penson’s and Client’s ongoing duties to supervise and control their business activities as a clearing broker and to conduct continuing due diligence with respect to Ridge’s ability to provide the Services.

The Governance Structure is intended to:

¨ Set forth the procedure for reporting by Ridge, and the related monitoring of the performance of the Services.

¨ Maintain current knowledge of business direction and strategy.

¨ Maintain control of all Changes, and changes that are made to business processes or any of the Services and manage associated financial, technical and operational risks.

¨ Maintain disciplined management regarding cost, quality and each party’s compliance with its contractual commitments and the Laws and Rules.

¨ Provide general oversight and consolidated performance reporting.

¨ Provide a clear route for program reporting; issue escalation and resolution and risk management.

II. GOVERNANCE BODIES AND RESPONSIBILITIES

Governance Structure

The following joint governance bodies (“Governance Bodies”) will be established no later than ninety (90) days after the Effective Date:

• Executive Governance Committee

• Business Governance Committees

2.1.1 Meetings: The parties agree that meetings within and among the various Governance Bodies shall be part of the normal operations and are necessary (i) to provide the most effective level for the performance of duties under the Schedule and (ii) as part of Penson’s and Client’s ongoing duties to supervise and control its business activities as a clearing broker and to conduct continuing due diligence with respect to Ridge’s ability to provide the Services. Meetings of the various Governance Bodies may be held either in person or telephonically. As a general rule, meetings shall be held in person, with telephone meetings being the exception and only as mutually agreed to by the parties. The venue for meetings shall take into account both parties’ mutual interest in minimizing costs, and each party shall be responsible for its own costs and expenses with regard to attendance at meetings. The frequency of meetings for each Governance Body is set forth below.

2.1.2 Members: The members of each Governance Body are set forth below. If a party’s representative in a Governance Body ceases to be a member of such Governance Body, that party shall, within thirty (30) days, notify the other party of the replacement who shall be an individual of equivalent standing and expertise. The other party’s consent to such proposal may not unreasonably be withheld or delayed.

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Executive Governance Committee

The Executive Governance Committee (“EGC”) shall not be involved in day-to-day management of this Master Services Agreement or a Schedule, but shall retain overall accountability for this Agreement in addition to the business relationship.

2.2.1 Key Responsibilities: The following key responsibilities shall be subject to and in accordance with the terms and conditions of this Agreement:

¨ To monitor and direct the strategic relationship between Penson and Client and Broadridge and Ridge.

¨ To provide an “interface” to the executive teams of the parties by providing regular feedback on progress and achievements to executive meetings.

¨ To review long term plans, business trends and directions.

¨ To oversee compliance with terms and conditions of this Agreement and monitor that regulatory developments are addressed.

¨ To consult on specified material industrial or public relations matters in connection with the Services.

¨ To review overall performance of the Services including, without limitation, financial performance investments and the effectiveness of gain/risk share arrangements.

¨ To resolve issues and/or disagreements escalated by the Business Governance Committees.

¨ To examine and authorize Changes.

¨ To examine and authorize proposals for amendments to the Schedules.

¨ To review new policies or changes to existing policies.

2.2.2 Specific Functions

¨ Review of select reports that are reflective of the performance of Ridge in fulfilling the agreed upon Service Levels, in maintaining accurate books and records, and adherence to various polices, procedures and regulations.

¨ Review of the results of select, completed SRO examinations and audit reports of Broadridge and Ridge and Penson and Client business units.

¨ Review of the feedback provided by key business stakeholders within Penson and Client and Penson’s and Client’s introducing brokers.

¨ The EGC will also address:

• The Service Levels being provided by Ridge

• Broadridge’s and Ridge’s and Penson’s and Client’s adherence to existing polices, procedures and the Laws and Rules

• The resolution of any unresolved disputes and controversies between the parties

• The results of all audits conducted by Penson and Client as well as all SRO examinations

• Broadridge’s, Ridge’s and Penson’s and Client’s readiness in preparing for new regulations and/or industry mandates

• Any changes in the strategic direction of Broadridge or Ridge

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2.2.3 Meetings: Meetings shall take place quarterly, until otherwise agreed by the parties. Each meeting of the EGC shall be attended by at least two members from each of Broadridge and Ridge and Penson and Client.

2.2.4 Unresolved Disputes: In the event that the EGC cannot arrive at a mutually agreeable solution to any dispute or disagreement that is escalated to it, the dispute or disagreement shall be submitted to non-binding mediation prior to and as a condition precedent to the commencement of litigation under the Schedule. Said mediation shall be conducted by and in accordance with the mediation procedures of FINRA. The costs of the mediation shall be borne equally by the parties. All statements of any nature made in connection with this mediation shall be privileged and shall be inadmissible in any subsequent arbitral proceeding involving or relating to the claims at issue in the mediation.

2.2.5 Members of the EGC:

The members of the EGC shall include an equal number of executive officers from both parties.

Business Governance Committees

2.3.1 Structure:

¨ The parties to each Schedule shall establish a Business Governance Committee.

2.3.2 Purpose:

¨ Provide operational leadership for the Services, including, without limitation, the delivery of the Services and initial strategic initiatives.

2.3.3 Key Responsibilities: The following key responsibilities shall be subject to and in accordance with the terms and conditions of the applicable Schedule:

¨ Regularly establish audit and review responsibilities of Broadridge and Ridge, in accordance with the applicable Schedule.

¨ Draft and update template Certification Reports, and Corrective Action Certifications.

¨ Approve Services plans and guide overall activities.

¨ Review and approve business and technical proposals that impact the business case for the Services.

¨ Review select reports to monitor performance of the Services, including, without limitation, adherence to Service Level Agreements, the agreed-upon code of conduct and to all laws.

¨ Review dependencies between Service areas.

¨ Assess operational and financial risk.

¨ Identify certain material current or future events that may affect Services.

¨ Resolve conflicts relating to Services where these are escalated by management of the parties.

¨ Discuss and implement Changes, projects or new services that should be agreed at a level above the day-to-day management team; part of this role shall be to coordinate the scope of “Change” in the context of its impact on units in the field and on central functions.

¨ Prepare and implement any necessary amendments to the applicable Schedule within the authority of the team (which shall not include any authority to agree to any new Services).

¨ Monitor compliance with the Laws and Rules and address routine compliance issues.

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2.3.4 Members of the Business Governance Committee:

The members of the Business Governance Committee (“BGC”) shall include an equal number of senior officers from both parties to the applicable Schedule.

2.3.5 Meeting

The BGC meetings shall be held monthly or as either party to the applicable Schedule may reasonably request. Relevant Penson and Client representatives and Broadridge and Ridge representatives shall also participate and provide input as required.

III. REPORTS

To facilitate Penson’s and Client’s ongoing duties to supervise and control its business activities as a clearing broker and to conduct continuing due diligence with respect to Ridge’s ability to provide the Services, Broadridge and Ridge shall provide or cause to be provided to Penson and Client copies of mutually agreed-upon reports. All reports are run daily, except where noted.

The parties agree to update the list of reports from time to time as the parties deem necessary to effect the purposes described above, in each case as mutually agreed by the parties in writing.

IV. CHANGE CONTROL

Changes

The parties recognize that during the Term there may be changes to the Services (as agreed upon by Ridge and Client) or the terms and conditions of this Agreement (as agreed upon by Broadridge and Penson) either on a temporary or permanent basis (each, a “Change”). Any such Changes shall be addressed and processed through the “Change Control Procedure” set forth below. Except as set forth in this Section IV regarding Mandatory Changes or as otherwise expressly agreed between the parties in writing, until any Change is agreed between Ridge and Client or Broadridge and Penson, as applicable, in accordance with the Change Control Procedure, Ridge shall continue to perform the Services and be paid the amounts set forth under this Agreement as if the Change had not been requested. Notwithstanding the preceding sentences of this Section IV or any provision of the Schedule (including, without limitation, the Attachments) to the contrary, the parties shall consider all proposed Change Requests in good faith through the Governance Structure, but shall not be required to agree to the terms and conditions of any proposed Change.

Change Control Procedure

4.1 All Change Requests (defined below) and Changes shall be dealt with in accordance with the procedure set forth below. Changes shall be effective only if made in writing and signed by an officer of the parties who is authorized to execute such documents under the terms and conditions of the Schedule and in accordance with this Exhibit.

4.2 At any time and for any reason, either party may request a Change (each, a “Change Request”). Each Change Request shall be submitted in writing to the other party, and shall specify in reasonable detail:

(a) any proposed Change;

(b) the impact of the proposed Change on the existing Services;

(c) any amendment to this Schedule required by the proposed Change;

(d) other details which the other party might reasonably agree to include in the Change Request; and

(e) any other details set forth in the Change Request and Approval Form (defined below).

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4.3 If Broadridge or Ridge submits the Change Request, it must set forth, if appropriate, in reasonable detail any proposed adjustments to the fees and/or any other pricing mechanisms to be charged or used under the applicable Schedule, including, without limitation, any additional costs or expenses which shall be incurred by Penson or Client if and to the extent that the Change Request is approved.

4.4 If Penson or Client submits a Change Request, Broadridge and Ridge shall evaluate the Change Request and, within ten (10) business days, submit a response setting forth in reasonable detail:

(a) with respect to Changes other than Mandatory Changes, whether or not Broadridge and Ridge are prepared in principle to agree to the proposed Changes;

(b) any adjustments to the fees and/or other pricing mechanisms to be charged or used under the applicable Schedule that Broadridge and Ridge may propose, including, without limitation, any additional costs or expenses that shall be incurred by Penson or Client in the event the Change Request is approved; and

(c) a good faith estimate of the effective date for the Change.

4.5 If Broadridge or Ridge requires more time to respond, due to the nature or complexity of Penson’s or Client’s proposed Change Request or otherwise, Broadridge or Ridge shall so inform Penson or Client and Broadridge or Ridge shall have a reasonable amount of additional time to respond.

4.6 If Broadridge or Ridge submits a Change Request, Penson and Client shall evaluate the Change Request and, within ten (10) business days, submit a response setting out in reasonable detail:

(a) whether or not Client are prepared in principle to agree to the proposed Changes; and

(b) Penson’s and Client’s response to Broadridge’s or Ridge’s proposed Changes, including, without limitation, any proposed Changes to the Service Charges and/or other pricing mechanisms provided in the applicable Schedule.

4.7 If Penson or Client requires more time to respond because of the size or complexity of Broadridge’s or Ridge’s proposed Change Request or otherwise, Penson or Client shall so inform Broadridge or Ridge and Penson or Client shall have a reasonable amount of additional time to respond.

4.8 Once a response to the Change Request has been submitted, the parties shall discuss the proposed Change and any related matters.

4.9 Changes shall become effective upon execution and delivery by both parties of an amendment to this Master Services Agreement or the applicable Schedule affecting such Change, which amendment shall be executed promptly and shall include all relevant changes to this Master Services Agreement or the applicable Schedule.

4.9 Each party shall bear its respective costs associated with proposing, considering, responding to or otherwise dealing with Change Requests and responses in accordance with this Exhibit, unless the parties otherwise agree in writing.

Mandatory Changes

Notwithstanding any provision to the contrary in this Section IV or elsewhere in this Agreement, any of the following Changes shall be considered a “Mandatory Change”: Changes that (a) involves a request by Penson or Client for the provision of Services to a new Affiliate of Penson, (b) are necessary to implement new or modified Penson or Client policies, which will in any event be processed as a Change, (c) are necessary to effect compliance with a new or modified Client Law, Compliance Directive or Ridge Law or (d) are identified in this Agreement as a Mandatory Change or a Change that is to be implemented in accordance with the Change Control Procedures applicable to Mandatory Changes. Upon receipt of a request for a Mandatory Change, and subject to the “Development Scheduling” Service Level, Broadridge or Ridge shall provide a fee estimate for each Mandatory Change and provide the schedule when such change will be implemented. If such schedule is not acceptable to Penson or Client, Broadridge or Ridge and Penson and Client shall negotiate in good faith an accelerated schedule for the implementation of such change. Notwithstanding any provision to the contrary in this Section IV, all Mandatory Changes shall be implemented (i.e., neither party shall have the right to refuse to approve or implement such Change) in accordance with the Change Control Procedures. Any dispute or disagreement regarding any Mandatory Change (including, without limitation, issues regarding fees, Service Levels, specifications for

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deliverables and the implementation of the Mandatory Change) shall not delay the implementation of the Mandatory Change. For the avoidance of doubt, the Change Control Procedures applicable to Mandatory Changes shall not apply to, and shall not relieve Broadridge or Ridge from, changes Broadridge or Ridge is otherwise required to make pursuant to this Agreement.

V. FEE DISPUTES

In accordance with Section 3.E (Payment) of this Master Services Agreement, Client may withhold the portion of an invoice for particular fees, subject to a bona fide dispute. Upon receipt of a Dispute Notice, the parties shall immediately meet (including, without limitation, by telephone conference) to attempt to resolve the dispute. If the parties are unable to resolve the dispute at such meeting (a “Payment Dispute”) then either party may implement the following expedited payment dispute escalation procedures:

5.1 Either party may initiate the expedited process by an arbitrator by sending notice of such request to the other party and describing the dispute or referencing this Section 5.1 (a “Dispute Notice”).

5.2 For five (5) business days after delivery of the Dispute Notice, the parties each shall use good faith efforts to mutually agree upon an arbitrator. If the parties are not able to agree upon an arbitrator within such period of time, such arbitrator shall be selected in accordance with the International Institute for Conflict Prevention and Resolution for Non-Administered Arbitration, or its successor.

5.3 The arbitrator shall possess at least fifteen (15) years of relevant experience in a law firm or corporate law department of over twenty-five (25) lawyers or a judge of a court of general jurisdiction. The arbitrator shall not have represented or acted on behalf of either party, or be otherwise affiliated with or interested in either party.

5.4 Upon selection of the arbitrator, the parties shall agree on a schedule to present the dispute to the arbitrator and obtain a decision as described herein, during a time frame of no more than twenty (20) days. In the event the parties cannot agree upon a schedule, the arbitrator shall provide a schedule. Each party shall simultaneously submit a memorandum to the arbitrator that is not more than ten (10) pages in length, accompanied by relevant documents and not more than three (3) affidavits. After receiving and reviewing the memoranda and supporting information, the arbitrator shall conduct a hearing of no more than four (4) hours, that shall include not more than two representatives of each party, at which the parties may present their case and shall submit to questioning by the arbitrator. The arbitrator shall render his or her decision within seventy-two (72) hours of the hearing.

5.5 The standard under which the arbitrator shall render his or her decision shall be whether there exists a good faith basis for Client to withhold the disputed charges under the terms and conditions of this Master Services Agreement and the applicable Schedule. The arbitrator shall issue his or her decision in the form of a ruling on that single issue, and shall not provide any written basis or support for his or her opinion. If the arbitrator determines that Client had a good faith basis for withholding the disputed fees, then such sums shall remain in Client’s possession. If the arbitrator determines that Client did not have a good faith basis for withholding the disputed charges, then Client shall pay such disputed fees to Broadridge or Ridge, under reservation of rights, within ten (10) days after the date of the arbitrator’s decision. After the arbitrator renders such decision, each party may pursue any and all rights associated with the Payment Dispute through the dispute escalation procedures set forth in this Exhibit. The decision of the arbitrator shall have no force or effect other than for the limited purposes stated in this Section 5.

5.6 The decision of the arbitrator and all communications, memoranda and supporting documentation exchanged in connection with the procedures set forth in this Section 5 shall be exchanged on a without prejudice basis and the decision of the arbitrator and briefs of the parties shall be inadmissible in any respect in any subsequent proceeding. All communications, memoranda, supporting documentation, and the arbitrator’s decision shall be deemed Information under this Agreement.

5.7 The arbitrator shall be compensated at his or her applicable billing rate, which shall be split equally between the parties. Any costs incurred by either party shall be borne by that party.

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5.8 A party’s failure to commence or pursue the expedited procedures set forth in this Section 5 shall not constitute, operate or be construed as a waiver of any right the party may have under this Agreement.

VI. ACCEPTANCE

Without prejudice or limitation to any other rights or remedies of Client, new Ridge Products shall be subject to acceptance testing by Client to verify that such Ridge Products conform to the specifications provided in connection with such Ridge Products (the “Acceptance Criteria”). When Ridge notifies Client that a Ridge Product is ready for testing for conformance with the Acceptance Criteria, Client may elect to test the Ridge Product to determine whether they comply in all material respects with the Acceptance Criteria. Client shall have thirty (30) business days to complete such testing. Upon completion of such testing, Client shall promptly notify Ridge whether it has accepted such Ridge Product (“Accept”), or whether it has identified discrepancies with the Acceptance Criteria (“Reject”). If Client Accepts the Ridge Product it shall issue a notice thereof. If Client Rejects the Ridge Product, Client shall provide notice setting forth a list of items that Client claims must be corrected and Ridge shall use commercially reasonable efforts to correct such Ridge Product and the testing process shall resume as set forth above. If Client does not provide notice to Ridge after such thirty (30) day period, then the Ridge Products shall be deemed to be accepted.

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Exhibit D

Step In Rights

1.1 If Penson or Client wishes to take action, either itself, through an Affiliate or using a third party acting on its behalf, and such action involves onsite access at a Ridge location, Penson or Client shall notify Broadridge or Ridge of the following:

(a) the action it wishes to be taken;

(b) the reason for such action together with supporting evidence;

(c) the date it wishes to commence such action; and

(d) the estimated time period which it believes will be necessary for such action.

1.2 Following service of such notice and subject to compliance with the other terms and conditions of this Exhibit and the Agreement, Penson or Client shall take such action as notified under Section 1.1 above and any consequential additional action as it reasonably believes is necessary (together, the “Required Action”) and Broadridge and Ridge shall give all reasonable assistance to Penson or Client while it is taking the Required Action. Penson or Client shall exercise its rights under this Exhibit reasonably and in a manner that complies with applicable standard policies and procedures applicable to onsite access at the Ridge locations (including, without limitation, policies relating to access to other customers’ data).

1.3 Before ceasing the Required Action, if Penson or Client intends to hand the Services back to Ridge, Penson or Client shall deliver notice to Broadridge, specifying in reasonable detail (to the extent that it is reasonably practicable in the circumstances):

(a) the action it has taken; and

(b) the date it plans to conclude such action

(the “Step Out Notice”).

1.4 Unless otherwise agreed by Broadridge or Ridge, Penson’s or Client’s right to have onsite access to the Ridge locations for the purpose of exercising step in rights under this Exhibit shall expire six (6) months after the date that Client first has taken any Required Action onsite at a Ridge location, but only if Penson or Client has not delivered a Step Out Notice prior to the date of such expiration.

1.5 To the extent Penson or Client takes over responsibility for any of the Services while onsite at a Ridge location during the exercise of its step in rights, then Ridge shall not be responsible for meeting the Service Levels that are associated with such Services, to the extent that Penson’s or Client’s actions result in a failure to achieve Service Levels. Penson’s or Client’s exercise of its step in rights shall not constitute a waiver by Penson or Client of any termination rights or rights to pursue a claim for damages arising out of the failure that led to the step in rights being exercised.

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NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED

LANGUAGE.

Schedule A (United States)

SERVICE BUREAU AND OPERATIONS SUPPORT SERVICES SCHEDULE

To The Master Services Agreement

between

BROADRIDGE FINANCIAL SOLUTIONS, INC.

and

PENSON WORLDWIDE, INC.

This schedule (the “Schedule”), dated as of November 2, 2009 (the “Schedule Effective Date”), between Ridge Clearing & Outsourcing Solutions, Inc. (“Ridge Local Affiliate”) and Penson Financial Services, Inc. (“Client Local Affiliate”), to the Master Services Agreement, dated as of the date hereof, between Broadridge Financial Solutions, Inc. and Penson Worldwide, Inc., sets forth the terms and conditions, in addition to the terms and conditions in the Master Services Agreement, under which Ridge Local Affiliate will provide service bureau and operations support services to Client Local Affiliate to assist and support Client Local Affiliate in functioning as a clearing firm. Each of Client Local Affiliate and Ridge Local Affiliate agrees to comply with and fulfill all terms and conditions applicable to it under the Master Services Agreement.

Unless otherwise defined herein, all capitalized terms shall have the meanings given to them in the Master Services Agreement. In the event of a conflict between the terms and conditions of this Schedule and the terms and conditions of the Master Services Agreement, the terms and conditions of this Schedule shall govern. The term “Client Local Affiliate” as used in this Schedule includes all Affiliates, divisions and subsidiaries of Client Local Affiliate. Except where otherwise indicated, all references in this Schedule to Sections or Attachments are to Sections to, and Attachments of, this Schedule. The term “party” as used in this Schedule means Ridge Local Affiliate or Client Local Affiliate, as applicable. The term “parties” as used in this Schedule means Ridge Local Affiliate and Client Local Affiliate.

I. SUBMISSION OF SCHEDULE

A. During the Schedule Term, Client Local Affiliate and Ridge Local Affiliate shall each be subject, to the extent applicable to such party, to the provisions of federal, state and local laws, rules and regulations and the constitution, by-laws, rules, regulations and stated policies of the Securities and Exchange Commission (“SEC”), the Financial Regulatory Authority (“FINRA”),

Ridge Clearing & Outsourcing Solutions, Inc. 1

UNITED STATES

the New York Stock Exchange, Inc. (“NYSE”), and any other securities exchange, commission, association, regulatory or self-regulatory organization (“SRO”) vested with authority over Client Local Affiliate or Ridge Local Affiliate (to the extent applicable to a party, the “Laws and Rules”). Each party shall perform its obligations under this Schedule in accordance with the Laws and Rules.

B. Client Local Affiliate shall submit this Schedule to FINRA, or any other SRO, as required, on behalf of itself and Ridge Local Affiliate for review and, if necessary, approval. This Schedule shall not become effective until the date upon which all necessary SRO approvals as to both parties are received (the “Approval Date”); provided, however, that if no SRO approvals are required for this Schedule to become effective, this Schedule shall become effective as of the Schedule Effective Date. In the event that any such approval is required and this Schedule is not so approved, the parties shall negotiate in good faith to amend this Schedule as may be needed to obtain such approval. This Schedule will be effective in connection with the Acquired Correspondents (“correspondents receiving services under the Assigned Contracts (as such term is defined in the Asset Purchase Agreement)”) upon the later of the Approval Date and the Closing Date (as defined in the Asset Purchase Agreement.)

C. Ridge Local Affiliate acknowledges that Client Local Affiliate has regulatory responsibilities as a clearing firm, including, among other things, a duty to supervise the types of business in which it engages. To assist Client Local Affiliate in satisfying such obligations, Ridge Local Affiliate agrees to provide, at the reasonable request of Client Local Affiliate, performance reports with respect to the Services and full access to relevant books and records, information and Ridge Local Affiliate personnel engaged in providing the Services. Ridge Local Affiliate acknowledges that Client Local Affiliate is required, from time to time, to prepare and file reports with the SEC, FINRA, NYSE and other SROs or Governmental Authorities. To assist Client Local Affiliate in satisfying such requirements, Ridge Local Affiliate agrees to provide Client Local Affiliate with information in its possession that is necessary for Client Local Affiliate to prepare and file any such reports.

D. This Schedule is not intended, and shall not be construed, to limit, reduce, or otherwise change any regulatory, contractual or other obligation that Client Local Affiliate owes to a correspondent or to its customers.

II. SERVICES TO BE PERFORMED BY RIDGE LOCAL AFFILIATE

A. Subject to the second paragraph of Section 16.G of the Master Services Agreement and Section I.B, Ridge Local Affiliate will perform the services, functions and responsibilities described in Attachment A in accordance with the terms and conditions of this Schedule and the Master Services Agreement. Attachment A is hereby incorporated in and made an integral part of this Schedule. Any additional services to be performed by Ridge Local Affiliate shall be subject to the written agreement of the parties.

B. Ridge Local Affiliate represents and warrants that, in providing the Services, the Transferred Operations Support Services (as defined in Attachment A) and the Additional Technology Services (as defined in Attachment A) to the Acquired Correspondents, Ridge Local Affiliate will be providing to the Acquired Correspondents services, products and systems of an identical or higher quality to the services, products and systems provided by Ridge Local Affiliate to such Acquired Correspondents immediately prior to the Schedule Effective Date.

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C. This Schedule and the Master Services Agreement are intended to create an exclusive arrangement between Client Local Affiliate and Ridge Local Affiliate with respect to the Services utilized by Client Local Affiliate as of the applicable Live Date in the Territory for which a pricing schedule is included in this Schedule except (A) as otherwise set forth in this Schedule and the Master Services Agreement and (B) in the event that (i) Client Local Affiliate or a Customer of Client Local Affiliate is prohibited by Law from receiving Services from Ridge Local Affiliate in the Territory, (ii) Client Local Affiliate obtains a business and in connection therewith is contractually required to use an alternative system (and not the Services) as a condition of obtaining such business or (iii) during any time period that Ridge Local Affiliate is in material breach of this Schedule and has failed to cure such breach within thirty (30) days following notice from Client Local Affiliate specifying the nature of such breach in reasonable detail.

III. CONVERSION

A. Conversion of Client Correspondents. In connection with the conversion of the correspondents of Client Local Affiliate, other than the Acquired Correspondents, (“Client Correspondents”) to Ridge Local Affiliate, the parties agree to the following:

(i) Client Local Affiliate shall provide Ridge Local Affiliate with Client Local Affiliate’s requirements with respect to the Client Local Affiliate files and Service Levels applicable to the Client Correspondents (the “Client Requirements”) after the Schedule Effective Date. The parties shall enter into a statement of work (the “Conversion SOW”) that will describe Client Local Affiliate’s migration to Ridge Local Affiliate’s service delivery and technology platform [****]. The Conversion SOW will define the Target Live Date and describe specific implementation activities and procedures required to migrate Client Correspondents to the Ridge Local Affiliate, including, without limitation, development, implementation and integration of Software and other software and development and integration of correspondent clearing functionalities, reporting and monitoring systems and such other services as may be set forth in the Conversion SOW (the “Conversion Services”). Without limiting the generality of the foregoing, the Conversion SOW shall (1) specify that Ridge Local Affiliate will convert the applicable Client Local Affiliate files to make them compatible with the Services and the other services, as may be required in respect of the migration of Client Local Affiliate’s Customers to the Services and (2) describe the development and integration of correspondent clearing functionalities by Ridge Local Affiliate. The Conversion Services shall be provided at no charge to Client Local Affiliate by Ridge Local Affiliate.

(ii) The parties shall cooperate and provide each other with all information and assistance reasonably required in connection with the Conversion Services. Each party will assign a liaison person to assist and cooperate with the other party in connection with the Conversion Services (which person may be replaced by a party at its sole discretion from time to time by way of notice to the other party).

IV. TERM OF SCHEDULE

A. Schedule Term. The term of this Schedule (the “Schedule Term”) shall begin on the Schedule Effective Date and shall continue for a period of ten (10) years after the last Live Date with respect to the Schedules under the Master Services Agreement for the U.S., U.K. or Canada

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(for clarity, the Schedule Term of the Schedules under the Master Services Agreement for the U.S., U.K. and Canada shall be coterminous with each other); provided, however, that this Schedule’s effective date is subject to its review and approval by the applicable regulatory agency as described in Section I.A. The “First Billable Date” for the Services shall mean: (i) for the Services provided in connection with the Acquired Correspondents, the later of the Approval Date and the Closing Date (as such term is defined in the Asset Purchase Agreement); and (ii) for the Services provided in connection with the Client Correspondents, the Live Date. The “Live Date” is defined as the first date upon which Ridge Local Affiliate processes trades on behalf of Client Correspondents in accordance with the provisions and requirements of this Schedule and the Master Services Agreement (excluding any beta testing or similar testing of the system). The Schedule Term shall automatically extend following its scheduled expiration date unless (1) either party gives notice of termination at least one hundred eighty (180) days prior to the scheduled expiration date, in which case the Schedule Term shall expire on the scheduled expiration date or (2) either party gives notice of termination at any time after the date that is one hundred eighty (180) days prior to the scheduled expiration date of the Schedule Term (including any time beyond the scheduled expiration date), in which case the Schedule Term shall expire on the date specified in such notice of termination, which date must be at least one hundred eighty (180) days after the date of such notice.

B. [****].

C. [****].

D. [****].

E. [****].

V. CHARGES

A. The fees for the Services are set forth in Attachment B hereto. Attachment B is hereby incorporated in and made an integral part of this Schedule. All fees and charges set forth in Attachment B are in U.S. dollars.

B. [****].

C. [****].

VI. NO PARTNERSHIP OR AGENCY; NO SPECIAL TREATMENT

Neither this Schedule nor any activity hereunder shall create a general or limited partnership, association, joint venture, branch or agency relationship between Client Local Affiliate and Ridge Local Affiliate. Client Local Affiliate shall not hold itself out as an agent of Ridge Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Ridge Local Affiliate, nor shall it employ Ridge Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider and clearing broker. Except as reasonably necessary to provide the Services, Ridge Local Affiliate shall not hold itself out as an agent of Client Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Client Local Affiliate, nor shall it employ Client Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider

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and clearing broker. Neither party shall, without the prior approval of the other party, place any advertisement in any newspaper, publication, periodical or any other media if such advertisement in any manner makes reference to the other party or to the arrangements contemplated by this Schedule. Neither party shall, without the prior approval of the other party (which approval shall not be unreasonably withheld), furnish any link to the website(s) of the other party or its Affiliates. For the avoidance of doubt, nothing herein shall prevent the disclosure of (i) Ridge Local Affiliate’s name or the Services to be performed under the Master Services Agreement or this Schedule to any of Client Local Affiliate’s regulators or customers or (ii) a party’s name or the services it offers to the extent necessary to carry out each party’s obligations under the Master Services Agreement, this Schedule or Marketing Agreement.

Nothing herein shall cause Ridge Local Affiliate to be construed as or deemed to be a fiduciary with respect to Client Local Affiliate, any correspondent of Client Local Affiliate, or any customer of Client Local Affiliate or its correspondents.

This Schedule is not intended, nor shall it be construed, to bestow upon either party any special treatment regarding any other arrangements, agreements or understandings that exist or may hereafter exist between the parties or their affiliates. Neither party shall have any obligation to deal with the other in any capacity other than as set forth in this Schedule.

VII. SERVICE LEVELS

Ridge Local Affiliate shall provide the Services in accordance with the terms and conditions set forth in Section 1.C of the Master Services Agreement and with respect to Service Levels set forth in Attachment C hereto and any other Service Level agreement that may be agreed between the parties from time to time with respect to the Territory. Attachment C is hereby incorporated in and made an integral part of this Schedule. Ridge Local Affiliate agrees that the Service Levels set forth in Attachment C shall be at least as stringent as any service levels provided by Ridge Local Affiliate to its other clients in the U.S.

VIII. EXCHANGE OF INFORMATION

Throughout the Schedule Term, each party shall promptly supply the other with information in its possession necessary or appropriate to enable the other party properly to perform its obligations under this Schedule and as a registered broker-dealer.

IX. RECORDS RETENTION

The information that Ridge Local Affiliate generates on behalf of Client Local Affiliate are the books and records of Client Local Affiliate. Notwithstanding anything to the contrary in the Master Services Agreement, Ridge Local Affiliate will maintain and preserve such information in accordance with the agreed-upon record retention policy set forth in Attachment G and the Laws and Rules. Any additional retention period(s) shall be directed by Client Local Affiliate and shall be subject to the mutual written agreement of the parties. Attachment G is hereby incorporated in and made an integral part of this Schedule.

X. GOVERNANCE

Ridge Local Affiliate and Client Local Affiliate shall each appoint at least two (2) senior level managers to a joint committee that shall meet no less than monthly to address issues that may arise in connection with the performance of the Services. In addition to the foregoing but without prejudice to the obligations of the parties under this Schedule or the Master Services Agreement, the parties have agreed to the detailed governance provisions set forth in Exhibit C to the Master Services Agreement.

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Ridge Local Affiliate shall provide to Client Local Affiliate the reports set forth in Attachment F. Attachment F is hereby incorporated in and made an integral part of this Schedule.

XI. TAPE RECORDING

Unless otherwise prohibited by applicable Law, the parties shall have the right to record telephone conversations between themselves, and waive any right to further notice of any such recording. The parties agree to make such recordings available to each other upon reasonable notice.

XII. THIRD PARTY VENDOR SERVICES

Client Local Affiliate may contract directly with and in such case will be responsible for (i) complying with the terms and conditions of use relating to additional third party products or services not affiliated with Ridge Local Affiliate set forth in Attachment A that it elects to receive or access through Ridge Local Affiliate from time to time and (ii) the costs relating thereto as applicable, other than those third party products or services integrated into the Services or provided as part of the Services. If third party products or services, including, without limitation, data, are provided by or through Ridge Local Affiliate to Client Local Affiliate or integrated into the Services or provided as part of the Services, Ridge Local Affiliate shall obtain and warrants and represents that it has the full right, title or license required to provide such product or service to Client Local Affiliate. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate and customers of Client Local Affiliate the right to use such product or service during, and for the purposes of, and in accordance with, the Master Services Agreement and this Schedule.

Client Local Affiliate shall be responsible for complying with the terms and conditions of use (to the extent such terms and conditions of use are provided by Ridge Local Affiliate to Client Local Affiliate) relating to the third party products or services that it receives or accesses through Ridge Local Affiliate and the costs relating thereto. If (i) any third party products or services, or Ridge-owned products or services, provided by Ridge Local Affiliate become unavailable and require replacement, (ii) Ridge Local Affiliate, upon notice to Client Local Affiliate (and upon Client Local Affiliate’s consent, if and to the extent such consent is required by Law), elects to replace any third party products or services or Ridge-owned products or services provided by Ridge Local Affiliate with new or different third party products or services or Ridge-owned products or services or (iii) at least fifty percent (50%) of Ridge Local Affiliate’s clients utilizing such products or services in the Territory request such replacement, in each case, Ridge Local Affiliate shall replace such products or services with equivalent or enhanced products or services without increased cost.

Client Local Affiliate may contract directly with any vendor or subcontractor of Ridge Local Affiliate for the services provided by such vendor or subcontractor through Ridge Local Affiliate; provided, however, that (a) such contract does not violate Ridge Local Affiliate’s obligations to such vendor or subcontractor and (b) Client Local Affiliate shall be responsible for the cost of any transition services (including, without limitation, any incremental costs resulting from the transition) in connection therewith.

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XIII. OBLIGATIONS FOR RECEIPT OF DATA

Client Local Affiliate may be using data set forth in Attachment D hereto provided by FT Interactive Data Corporation (“FT Interactive”). In such case, Client Local Affiliate agrees to the provisions attached hereto as Attachment D relating to its use of FT Interactive Data Corporation data in respect of the Services. Attachment D is hereby incorporated in and made an integral part of this Schedule. Client Local Affiliate shall be under no obligation to receive FT Interactive Data Corporation data through Ridge Local Affiliate and to such extent, the previous sentence shall not apply and Ridge Local Affiliate shall not be responsible for the provision of such services to Client Local Affiliate in such case or have any liability for such non-Ridge Local Affiliate FT Interactive Data Corporation services that Client Local Affiliate decides to receive. Ridge Local Affiliate warrants and represents that it has full right, title or license required to provide such data to Client Local Affiliate for use in the Services. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate the right to use and store such data pursuant to the terms and conditions of Attachment D, for the purposes of Client Local Affiliate providing services to its customers in the course of Client Local Affiliate’s standard commercial operations.

XIV. ACQUISITION OF OR BY ANOTHER RIDGE LOCAL AFFILIATE CLIENT

In the event that Client Local Affiliate acquires, or is acquired by, by stock, acquisition of substantially all the assets of, merger, or consolidation (a “Business Combination”), a Client Local Affiliate of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing services substantially similar to the Services provided under this Schedule (the “Other Entity”), and Client Local Affiliate and the Other Entity, or the resulting entity as the case may be, consolidate the trade processing carried out under this Schedule with the trade processing carried out by the Other Entity prior to the termination or expiration of the Client Local Affiliate’s or the Other Entity’s schedule relating to trade processing services substantially similar to the Services provided under this Schedule so that it is processed by Ridge Local Affiliate as one entity, all service charges, including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services provided by Ridge Local Affiliate shall be renegotiated in good faith between Ridge Local Affiliate and Client Local Affiliate. Otherwise, the Ridge Local Affiliate agreements with Client Local Affiliate and the Other Entity agreements in place prior to the Business Combination shall remain in effect for the respective services provided by Ridge Local Affiliate or any other Ridge Local Affiliate’s Brokerage Services Group entity until the termination or expiration of such agreements. For clarity and notwithstanding anything to the contrary, Client Local Affiliate and the Other Entity shall be free to consolidate their trade processing after the termination or expiration of either of their agreements or relevant Schedule with Ridge Local Affiliate or any entity of the Ridge Local Affiliate Brokerage Services Group without restriction and without any obligation to renegotiate any fees relating to trade processing or otherwise. In the event Client Local Affiliate participates in a Business Combination with an entity that is not a client of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing and/or operations support services substantially similar to the Services provided under this Schedule, all rates in Attachment B (including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services) provided by Ridge Local Affiliate shall remain as set forth in Attachment B, subject to the adjustments described therein.

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XV. CLIENT LOCAL AFFILIATE RESPONSIBILITIES

Client Local Affiliate shall be responsible, to the extent necessary for the Services it is receiving, in connection with the use of the Services for the following:

A. User security administration for the Services in accordance with, and as set forth in, the relevant product specifications and user documentation.

B. Forms and supplies required by Ridge Local Affiliate in connection with the performance of the Services, which are agreed to by the parties in writing. Ridge Local Affiliate shall provide Client Local Affiliate with reasonable advance notice of any such requirements.

C. Equipment, other than equipment provided by Ridge Local Affiliate, at Client Local Affiliate’s location required in use of the Services (e.g., printers, terminals) as identified by Ridge Local Affiliate in writing.

D. Dial backup ISDN circuits or other equivalent backup solution selected by Client Local Affiliate.

E. Third party telecommunications services not otherwise set forth in Attachment B.

F. Hardware, software, and telecommunications products required to interface to the Services (e.g., terminal emulation software), other than any such hardware, software, and telecommunications products provided by Ridge Local Affiliate.

G. Special equipment, which Client Local Affiliate may elect to place at Ridge Local Affiliate locations, if required by Client Local Affiliate, specific to Client Local Affiliate’s use of the Services as agreed to by the parties in writing.

H. Use commercially reasonable efforts to obtain the approval of each relevant regulatory or self-regulatory agency or entity, if any, with regulates Client Local Affiliate’s receipt of the Services (including, without limitation, securities and commodities exchanges, associations of securities and/or commodities dealers, federal, provincial and local Governmental Authorities).

For the avoidance of doubt, Ridge Local Affiliate shall not be responsible for its failure to provide Services solely to the extent caused by the failure of Client Local Affiliate to perform the above listed requirements. Ridge Local Affiliate shall (i) provide Client Local Affiliate with reasonable notice of Client Local Affiliate’s failure to perform any of its responsibilities set forth in this Schedule and (ii) use commercially reasonable efforts to perform notwithstanding Client Local Affiliate’s failure to perform, subject to Client Local Affiliate reimbursing Ridge Local Affiliate for any reasonable incremental cost to Ridge Local Affiliate in connection with such efforts.

XVI. REQUIRED PROVISION OF SYBASE, INC.

Client Local Affiliate acknowledges and agrees that the Sybase SQL Server Program and the Sybase Replication Server Program (the “Programs”) to the extent incorporated into the Services and used in connection with Ridge Local Affiliate’s BPS Advantage product, if selected and received by Client Local Affiliate, shall only be used by the Client Local Affiliate as set forth below to read, in a view-only format, the Services, and the Programs shall not be downloaded or used to create or alter tables, schemas or databases or otherwise develop or modify in any way the applications or performance of other programming tasks. Notwithstanding the foregoing, Client Local Affiliate may access the Programs through Ridge Local Affiliate tools or third party tools; provided, however, that any access shall be restricted to the following: Client Local Affiliate may access the Services embedding a copy of the Programs which are deployed on Ridge Local Affiliate’s premises or Client Local Affiliate’s site, provided, however, that in either instance, Client Local Affiliate shall not (i) copy the application(s) embedding the Programs, (ii) use the Programs other than to process Client Local Affiliate’s own transactions, transactions for entities that are correspondents or customers of the Client Local Affiliate and transactions for entities that operate on a fully disclosed basis through Client Local Affiliate as correspondents, or (iii) access the Programs for general development. Client Local Affiliate may also develop applications against the BPS Advantage database using tools supplied by Ridge Local Affiliate, Sybase or other third parties.

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XVII. SEVERABILITY

If any provision of this Schedule should be held invalid or unenforceable in a court of law in any jurisdiction, such invalidity or unenforceability shall not affect the enforceability of this Schedule or any other provision thereof. In addition, the parties agree that it is their intention that such provision shall be construed in a manner designed to effectuate the purposes of this Schedule to the fullest extent enforceable under applicable Law. The parties further agree that such ruling shall not affect the construction of that provision or any other of the provisions in any other jurisdiction.

XVIII. DISASTER RECOVERY; BUSINESS CONTINUITY

Ridge Local Affiliate shall maintain the disaster recovery and business continuity services as set forth in Attachment E. Attachment E is hereby incorporated in and made an integral part of this Schedule.

XIX. [****].

XX. ACQUIRED CORRESPONDENTS

In addition, except for services for finance, conversions, legal/compliance, sales/relationship management and risk management (which services shall be provided by Client Local Affiliate), following the Schedule Effective Date and until such time that Client Local Affiliate is completely converted to the Broadridge platform, Ridge Local Affiliate shall provide all Services to Client Local Affiliate hereunder in a substantially similar manner and in accordance with the Service Levels that Ridge Local Affiliate provided with respect to the Acquired Correspondents prior to the Schedule Effective Date.

XXI. CHANGES TO THE MASTER SERVICES AGREEMENT

The following general changes shall be made to the Master Services Agreement when incorporating the terms and conditions of the Master Services Agreement into this Schedule: NONE.

*            *            *            *

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IN WITNESS WHEREOF the parties have executed this Schedule as of the date first written above.

RIDGE CLEARING & OUTSOURCING SOLUTIONS, INC.
By:	/s/    Joseph Barra
Name:	Joseph Barra
Title:	President
PENSON FINANCIAL SERVICES, INC.
By:	/s/    Daniel P. Son
Name:	Daniel P. Son
Title:	Vice Chairman

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ATTACHMENT A

DESCRIPTION OF OUTSOURCED SERVICES

[****].

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Appendix 1 to Attachment A

Transferred Operations Support Services

[****].

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Appendix 1-A to Attachment A

Transitional Transferred Operations Support Services

[****].

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Appendix 2 to Attachment A

Transferred Technology Services

[****].

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Appendix 3 to Attachment A

Existing Operations Support Services – U.S.

[****].

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Appendix 4 to Attachment A

Existing Technology Services – U.S.

[****].

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Appendix 5 to Attachment A

Additional Technology Services

[****].

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ATTACHMENT B

Service Bureau and Operations Support Services Price Schedule

1. Charges for the Services. The charges for the Services are set forth in Attachment B-1.

2. Changes to Schedule B. The parties agree, subject to the Change Control Procedures set forth in Exhibit C to the Master Services Agreement, that any changes that the Client Local Affiliate makes from time to time that result in the addition or removal of specific Service functions (including, without limitation, material changes required by Applicable Law or by a regulatory body) may require changes to the charges payable by Client Local Affiliate.

3. Postage. Notwithstanding anything herein to the contrary, postage shall be billed to Client Local Affiliate on a pass-through basis.

4. Customization. Any customization work shall be provided pursuant to a rate schedule to be agreed upon by the parties no later than the Closing Date.

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Attachment B-1

Base Fee and Tiered Fees

[****].

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Attachment B-2

Third Party Providers

[****].

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ATTACHMENT C

SERVICE LEVELS

I. INTRODUCTION

In order to maintain the specified Service Levels for the Services set forth in Attachment C-1, the parties have agreed that certain defined Service Levels (the “SLAs”) are to be established and measured as set forth below. SLAs related to the Services shall be established by the parties no later than [****] after the Schedule Effective Date. New Service Levels may be added during the Schedule Term, and existing Service Levels may be modified or eliminated, by the mutual agreement of the parties from time to time.

II. OPERATIONS

A. General

Commencing on the Live Date and subject to this Section II, Ridge Local Affiliate’s provision of the Services shall be in accordance with the Service Levels identified in Attachment C-1.

The Service Levels set forth in Attachment C-1 shall (i) meet or exceed in all material respects the service levels required under the Acquired Correspondents’ agreements transferred to Client Local Affiliate under the Asset Purchase Agreement and (ii) be at least at levels that will enable Client Local Affiliate to avoid breaches of any agreements with the Client Correspondents existing as of the date hereof.

B. Reports; Performance Review; Corrective Action

(a) Ridge Local Affiliate shall, wherever the parties agree to use objective data, utilize continuous measurement and data capture and shall prepare a reasonably detailed report with respect to the Service Levels) (each, a “Service Level Report”). Service Level Reports shall be provided to Client Local Affiliate on a monthly basis.

(b) Ridge Local Affiliate and Client Local Affiliate shall meet at least quarterly to review Ridge Local Affiliate’s performance with respect to the Services during the immediately preceding quarterly period and the Service Level Reports connected therewith, and, with respect to Ridge Local Affiliate’s failure to achieve any Service Levels, the parties shall (1) jointly formulate a formal action plan for corrective action, as applicable, and (2) agree upon the appropriate consequences if such action plan does not prevent subsequent instances of the same Service Level failures.

(c) The specific criteria for each Service Level shall be detailed in the applicable SLA set forth in Attachment C-1. Prior to Live Date, the parties shall modify such Service Levels, create such additional Service Levels, or modify the method used to measure performance (including, without limitation, appropriate objective data, quality control process or other methods) as the parties mutually agree in writing.

(d) [****], the parties shall measure actual Ridge Local Affiliate performance levels in the manner previously agreed to by the parties, and review the method used to measure performance and such performance. The parties shall discuss in good faith any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review and shall, at least once annually during the Schedule Term, engage in such good faith discussions to determine any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review.

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C. Changes to the Service Levels

(a) The parties acknowledge that the Service Levels shall be subject to continuous improvement and that changing circumstances may necessitate modifications to service, expectations and responsibilities. Accordingly, the parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if (i) any modifications to the existing Service Levels are necessary or advisable, (ii) any existing Service Levels should be deleted and (iii) any new Service Levels should be added.

(b) For all new Service Levels, the parties shall mutually agree upon the Service Level targets and the methodology and tools used to measure performance. The parties shall mutually agree on any Service Level target based on [****] of measurements of the applicable Service Level utilizing the agreed upon methodology and tools. Any dispute regarding the establishment of such Service Level targets or the methodology and tools used to measure performance shall be resolved by the Executive Governance Committee. In addition, the Executive Governance Committee shall review Service Level targets and performance and shall give weight to Client Local Affiliate’s recommendations for continuous improvement of Service Level targets, based on, among other things, advances in technology.

D Service Level Credits

The amount of Service Level Credits credited to Client Local Affiliate with respect to all Category 1 service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – Category 1”). The amount of Service Level Credits credited to Client Local Affiliate with respect to all other service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – All Other Categories”, and together with the Services Level Credit Pool – Category 1, the “Service Level Credit Pools”). The Service Level Credit Pools shall be allocated to various Service Levels as set forth in Attachment C-1. The parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if any modification to the allocation of the Service Level Credit Pools set forth in Attachment C-1 are necessary or advisable.

E. Root-Cause Analysis

In the event Ridge Local Affiliate has a Service Level failure that is not insignificant, Ridge Local Affiliate shall perform a root-cause analysis as described in Section 1.C of the Master Services Agreement.

F. Excuse

Ridge Local Affiliate shall be excused from performing any Service or obligation hereunder, including, without limitation, the attainment of any Service Level, if and to the extent Ridge Local Affiliate’s failure to perform such Service or obligation is caused by Client Local Affiliate’s or its agents’ act or omission, including, without limitation, (a) Client Local Affiliate providing incomplete or inaccurate data, specifications or requirements; and (b) failures, errors or defects in facilities, equipment, materials or other resources provided by Client Local Affiliate, including, without limitation, telecommunications, hardware, infrastructure and network connectivity.

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Attachment C-1

SLAs

The parties shall include a Service Level for development work no later than [****] after the Schedule Effective Date.

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ATTACHMENT D

No Warranty and Limitation on Liability Provisions

Required by Users of Third Party Data

No Warranties

EXCEPT IN CONNECTION WITH CONTRACTS OF THIRD PARTY DATA SUPPLIERS WITHOUT CONTRACTUAL RESTRICTIONS SIMILAR TO THOSE BELOW, NO THIRD PARTY DATA SUPPLIERS MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS OR ANY OTHER MATTER.

Limitation on Liability

(a) No third party data supplier shall have any liability to Client Local Affiliate, or any other third party, for errors, omissions or malfunctions in the services provided by such third party data supplier, other than the obligation to endeavor, upon receipt of notice from Client Local Affiliate, to correct a malfunction, error, or omission in any such services.

(b) Client Local Affiliate acknowledges that the services provided by any third party data supplier are intended for use as an aid to institutional investors, registered brokers or professionals of similar sophistication in making informed judgments concerning securities.

Client Local Affiliate accepts responsibility for, and acknowledges it exercises its own independent judgment in, its selection of any of the services provided by any third party data supplier, its selection of the use or intended use of such, and any results obtained. Nothing contained herein shall be deemed to be a waiver of any rights existing under applicable law for the protection of investors.

(c) Client Local Affiliate shall indemnify Ridge Local Affiliate’s third party data suppliers (including, without limitation, FT Interactive) against and hold such third party data suppliers harmless from any and all losses, damages, liability, costs, including, without limitation, attorney’s fees, resulting directly or indirectly from any claim or demand against such third party data suppliers by a third party arising out of or related to the accuracy or completeness of any services received by Client Local Affiliate, or any data, information, service, report, analysis or publication derived therefrom. No third party data supplier shall be liable for any claim or demand against Client Local Affiliate by a third party.

(d) As between a third party data supplier and Client Local Affiliate, neither party shall be liable for (i) any special, indirect or consequential damages (even if advised of the possibility of such), (ii) any delay by reason of circumstances beyond its control, including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure beyond its control of transportation or power supply, or (iii) any claim that arose more than one (1) year prior to the institution of suit therefor.

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ATTACHMENT E

DISASTER RECOVERY; BUSINESS CONTINUITY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

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ATTACHMENT F

REPORTS

To be agreed upon by the parties within [****] after the Schedule Effective Date.

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ATTACHMENT G

RECORD RETENTION POLICY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

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NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED

LANGUAGE.

Schedule A (Canada)

SERVICE BUREAU AND OPERATIONS SUPPORT SERVICES SCHEDULE

To The Master Services Agreement

between

BROADRIDGE FINANCIAL SOLUTIONS, INC.

and

PENSON WORLDWIDE, INC.

This schedule (the “Schedule”), dated as of November 2, 2009 (the “Schedule Effective Date”), between Broadridge Financial Solutions (Canada) Inc. (“Ridge Local Affiliate”) and Penson Financial Services Canada Inc. (“Client Local Affiliate”), to the Master Services Agreement, dated as of the date hereof, between Broadridge Financial Solutions, Inc. and Penson Worldwide, Inc., sets forth the terms and conditions, in addition to the terms and conditions in the Master Services Agreement, under which Ridge Local Affiliate will provide service bureau and operations support services to Client Local Affiliate to assist and support Client Local Affiliate in functioning as a clearing firm. Each of Client Local Affiliate and Ridge Local Affiliate agrees to comply with and fulfill all terms and conditions applicable to it under the Master Services Agreement. Simultaneously with the execution of this Schedule, this Schedule supersedes and replaces the Master Services Agreement, dated June 30, 2009, between Penson Financial Services Canada Inc. and Broadridge Financial Services (Canada) Inc. and the BPS Canadian Services Bureau Schedule, dated June 30, 2009, between Penson Financial Services Canada Inc. and Broadridge Financial Services (Canada) Inc. (the “Existing Canadian Agreement”).

Unless otherwise defined herein, all capitalized terms shall have the meanings given to them in the Master Services Agreement. In the event of a conflict between the terms and conditions of this Schedule and the terms and conditions of the Master Services Agreement, the terms and conditions of this Schedule shall govern. The term “Client Local Affiliate” as used in this Schedule includes all Affiliates, divisions and subsidiaries of Client Local Affiliate. Except where otherwise indicated, all references in this Schedule to Sections or Attachments are to Sections to, and Attachments of, this Schedule. The term “party” as used in this Schedule means Ridge Local Affiliate or Client Local Affiliate, as applicable. The term “parties” as used in this Schedule means Ridge Local Affiliate and Client Local Affiliate.

I. SUBMISSION OF SCHEDULE

A. During the Schedule Term, Client Local Affiliate and Ridge Local Affiliate shall each be subject, to the extent applicable to such party, to the provisions of federal, state and local laws, rules and regulations and the constitution, by-laws, rules, regulations and stated policies of the

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Investment Industry Regulatory Organization of Canada (“IIROC”), the Canadian Investors Protection Fund (“CIPF”), the Ontario Securities Commission (“OSC”), the Autorité des Marchés Financiers (“AMF”), the Montréal Exchange (“ME”) and any other securities exchange, commission, association, regulatory or self-regulatory organization (“SRO”) vested with authority over Client Local Affiliate or Ridge Local Affiliate (to the extent applicable to a party, the “Laws and Rules”). Each party shall perform its obligations under this Schedule in accordance with the Laws and Rules.

B. Client Local Affiliate shall submit this Schedule to the IIROC, or any other SRO, as required, on behalf of itself and Ridge Local Affiliate for review and, if necessary, approval. This Schedule shall not become effective until the date upon which all necessary SRO approvals as to both parties are received (the “Approval Date”); provided, however, that if no SRO approvals are required for this Schedule to become effective, this Schedule shall become effective as of the Schedule Effective Date. In the event that any such approval is required and this Schedule is not so approved, the parties shall negotiate in good faith to amend this Schedule as may be needed to obtain such approval.

C. Ridge Local Affiliate acknowledges that Client Local Affiliate has regulatory responsibilities as a clearing firm, including, among other things, a duty to supervise the types of business in which it engages. To assist Client Local Affiliate in satisfying such obligations, Ridge Local Affiliate agrees to provide, at the reasonable request of Client Local Affiliate, performance reports with respect to the Services and full access to relevant books and records, information and Ridge Local Affiliate personnel engaged in providing the Services. Ridge Local Affiliate acknowledges that Client Local Affiliate is required, from time to time, to prepare and file reports with the IIROC, CIPF and other SROs or Governmental Authorities. To assist Client Local Affiliate in satisfying such requirements, Ridge Local Affiliate agrees to provide Client Local Affiliate with information in its possession that is necessary for Client Local Affiliate to prepare and file any such reports.

D. This Schedule is not intended, and shall not be construed, to limit, reduce, or otherwise change any regulatory, contractual or other obligation that Client Local Affiliate owes to a correspondent or to its customers.

II. SERVICES TO BE PERFORMED BY RIDGE LOCAL AFFILIATE

A. Subject to the second paragraph of Section 16.G of the Master Services Agreement and Section I.B, Ridge Local Affiliate will perform the services, functions and responsibilities described in Attachment A in accordance with the terms and conditions of this Schedule and the Master Services Agreement. Attachment A is hereby incorporated in and made an integral part of this Schedule. Any additional services to be performed by Ridge Local Affiliate shall be subject to the written agreement of the parties.

B. Intentionally left blank.

C. This Schedule and the Master Services Agreement are intended to create an exclusive arrangement between Client Local Affiliate and Ridge Local Affiliate with respect to the Services utilized by Client Local Affiliate as of the applicable Live Date in the Territory for which a pricing schedule is included in this Schedule except (A) as otherwise set forth in this Schedule and the Master Services Agreement and (B) in the event that (i) Client Local Affiliate or a Customer of Client Local Affiliate is prohibited by Law from receiving Services from Ridge Local Affiliate in the Territory, (ii) Client Local Affiliate obtains a business and in connection

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therewith is contractually required to use an alternative system (and not the Services) as a condition of obtaining such business or (iii) during any time period that Ridge Local Affiliate is in material breach of this Schedule and has failed to cure such breach within thirty (30) days following notice from Client Local Affiliate specifying the nature of such breach in reasonable detail.

III. CONVERSION

A. Conversion of Client Correspondents. In connection with the conversion of the correspondents of Client Local Affiliate (“Client Correspondents”) to Ridge Local Affiliate, the parties agree to the following:

(i) Client Local Affiliate shall provide Ridge Local Affiliate with Client Local Affiliate’s requirements with respect to the Client Local Affiliate files and Service Levels applicable to the Client Correspondents (the “Client Requirements”) after the Schedule Effective Date. The parties shall enter into a statement of work (the “Conversion SOW”) that will describe Client Local Affiliate’s migration to Ridge Local Affiliate’s service delivery and technology platform [****]. The Conversion SOW will define the Target Live Date for each Service and describe specific implementation activities and procedures required to migrate Client Correspondents to the Ridge Local Affiliate, including, without limitation, development, implementation and integration of Software and other software and development and integration of correspondent clearing functionalities, reporting and monitoring systems and such other services as may be set forth in the Conversion SOW (the “Conversion Services”). Without limiting the generality of the foregoing, the Conversion SOW shall (1) specify that Ridge Local Affiliate will convert the applicable Client Local Affiliate files to make them compatible with the Services and the other services, as may be required in respect of the migration of Client Local Affiliate’s Customers to the Services and (2) describe the development and integration of correspondent clearing functionalities by Ridge Local Affiliate. The Conversion Services shall be provided at no charge to Client Local Affiliate by Ridge Local Affiliate.

(ii) The parties shall cooperate and provide each other with all information and assistance reasonably required in connection with the Conversion Services. Each party will assign a liaison person to assist and cooperate with the other party in connection with the Conversion Services (which person may be replaced by a party at its sole discretion from time to time by way of notice to the other party).

IV. TERM OF SCHEDULE

A. Schedule Term. The term of this Schedule (the “Schedule Term”) shall begin on the Schedule Effective Date and shall continue for a period of ten (10) years after the last Live Date with respect to the Schedules under the Master Services Agreement for the U.S., U.K. or Canada (for clarity, the Schedule Term of the Schedules under the Master Services Agreement for the U.S., U.K. and Canada shall be coterminous with each other); provided, however, that this Schedule’s effective date is subject to its review and approval by the applicable regulatory agency as described in Section I.A. The “Live Date” for a Service is defined as the first date upon which Ridge Local Affiliate processes trades utilizing the applicable Service on behalf of Client Correspondents in accordance with the provisions and requirements of this Schedule and the Master Services Agreement (excluding any beta testing or similar testing of the system). The Schedule Term shall automatically extend following its scheduled expiration date unless (1) either party gives notice of termination at least one hundred eighty (180) days prior to the scheduled

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expiration date, in which case the Schedule Term shall expire on the scheduled expiration date or (2) either party gives notice of termination at any time after the date that is one hundred eighty (180) days prior to the scheduled expiration date of the Schedule Term (including any time beyond the scheduled expiration date), in which case the Schedule Term shall expire on the date specified in such notice of termination, which date must be at least one hundred eighty (180) days after the date of such notice.

B. [****].

C. [****].

D. [****].

E. [****].

V. CHARGES

A. The fees for the Services are set forth in Attachment B hereto. Attachment B is hereby incorporated in and made an integral part of this Schedule. Unless otherwise indicated, all fees and charges set forth in Attachment B are in Canadian dollars. Notwithstanding the immediately preceding sentence, for purposes of calculating the aggregate amounts in connection with the last paragraph in Attachment A and paragraph six of Section III to Attachment B-1, such calculation shall be in U.S. dollars using the exchange rate published in the Wall Street Journal on the Schedule Effective Date.

B. [****].

C. [****].

VI. NO PARTNERSHIP OR AGENCY; NO SPECIAL TREATMENT

Neither this Schedule nor any activity hereunder shall create a general or limited partnership, association, joint venture, branch or agency relationship between Client Local Affiliate and Ridge Local Affiliate. Client Local Affiliate shall not hold itself out as an agent of Ridge Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Ridge Local Affiliate, nor shall it employ Ridge Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider and clearing broker. Except as reasonably necessary to provide the Services, Ridge Local Affiliate shall not hold itself out as an agent of Client Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Client Local Affiliate, nor shall it employ Client Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider and clearing broker. Neither party shall, without the prior approval of the other party, place any advertisement in any newspaper, publication, periodical or any other media if such advertisement in any manner makes reference to the other party or to the arrangements contemplated by this Schedule. Neither party shall, without the prior approval of the other party (which approval shall not be unreasonably withheld), furnish any link to the website(s) of the other party or its Affiliates. For the avoidance of doubt, nothing herein shall prevent the disclosure of (i) Ridge Local Affiliate’s name or the Services to be performed under the Master Services Agreement or this Schedule to any of Client Local Affiliate’s regulators or customers or (ii) a party’s name or the services it offers to the extent necessary to carry out each party’s obligations under the Master Services Agreement, this Schedule or Marketing Agreement.

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Nothing herein shall cause Ridge Local Affiliate to be construed as or deemed to be a fiduciary with respect to Client Local Affiliate, any correspondent of Client Local Affiliate, or any customer of Client Local Affiliate or its correspondents.

This Schedule is not intended, nor shall it be construed, to bestow upon either party any special treatment regarding any other arrangements, agreements or understandings that exist or may hereafter exist between the parties or their affiliates. Neither party shall have any obligation to deal with the other in any capacity other than as set forth in this Schedule.

VII. SERVICE LEVELS

Ridge Local Affiliate shall provide the Services in accordance with the terms and conditions set forth in Section 1.C of the Master Services Agreement and with respect to Service Levels set forth in Attachment C hereto and any other Service Level agreement that may be agreed between the parties from time to time with respect to the Territory. Attachment C is hereby incorporated in and made an integral part of this Schedule. Ridge Local Affiliate agrees that the Service Levels set forth in Attachment C shall be at least as stringent as any service levels provided by Ridge Local Affiliate to its other clients in Canada.

VIII. EXCHANGE OF INFORMATION

Throughout the Schedule Term, each party shall promptly supply the other with information in its possession necessary or appropriate to enable the other party properly to perform its obligations under this Schedule and as a registered broker-dealer.

IX. RECORDS RETENTION

The information that Ridge Local Affiliate generates on behalf of Client Local Affiliate are the books and records of Client Local Affiliate. Notwithstanding anything to the contrary in the Master Services Agreement, Ridge Local Affiliate will maintain and preserve such information in accordance with the agreed-upon record retention policy set forth in Attachment G and the Laws and Rules. Any additional retention period(s) shall be directed by Client Local Affiliate and shall be subject to the mutual written agreement of the parties. Attachment G is hereby incorporated in and made an integral part of this Schedule.

X. GOVERNANCE

Ridge Local Affiliate and Client Local Affiliate shall each appoint at least two (2) senior level managers to a joint committee that shall meet no less than monthly to address issues that may arise in connection with the performance of the Services. In addition to the foregoing but without prejudice to the obligations of the parties under this Schedule or the Master Services Agreement, the parties have agreed to the detailed governance provisions set forth in Exhibit C to the Master Services Agreement.

Ridge Local Affiliate shall provide to Client Local Affiliate the reports set forth in Attachment F. Attachment F is hereby incorporated in and made an integral part of this Schedule.

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XI. TAPE RECORDING

Unless otherwise prohibited by applicable Law, the parties shall have the right to record telephone conversations between themselves, and waive any right to further notice of any such recording. The parties agree to make such recordings available to each other upon reasonable notice.

XII. THIRD PARTY VENDOR SERVICES

Client Local Affiliate may contract directly with and in such case will be responsible for (i) complying with the terms and conditions of use relating to additional third party products or services not affiliated with Ridge Local Affiliate set forth in Attachment A that it elects to receive or access through Ridge Local Affiliate from time to time and (ii) the costs relating thereto as applicable, other than those third party products or services integrated into the Services or provided as part of the Services. If third party products or services, including, without limitation, data, are provided by or through Ridge Local Affiliate to Client Local Affiliate or integrated into the Services or provided as part of the Services, Ridge Local Affiliate shall obtain and warrants and represents that it has the full right, title or license required to provide such product or service to Client Local Affiliate. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate and customers of Client Local Affiliate the right to use such product or service during, and for the purposes of, and in accordance with, the Master Services Agreement and this Schedule.

Client Local Affiliate shall be responsible for complying with the terms and conditions of use (to the extent such terms and conditions of use are provided by Ridge Local Affiliate to Client Local Affiliate) relating to the third party products or services that it receives or accesses through Ridge Local Affiliate and the costs relating thereto. If (i) any third party products or services, or Ridge-owned products or services, provided by Ridge Local Affiliate become unavailable and require replacement, (ii) Ridge Local Affiliate, upon notice to Client Local Affiliate (and upon Client Local Affiliate’s consent, if and to the extent such consent is required by Law), elects to replace any third party products or services or Ridge-owned products or services provided by Ridge Local Affiliate with new or different third party products or services or Ridge-owned products or services or (iii) at least fifty percent (50%) of Ridge Local Affiliate’s clients utilizing such products or services in the Territory request such replacement, in each case, Ridge Local Affiliate shall replace such products or services with equivalent or enhanced products or services without increased cost.

Client Local Affiliate may contract directly with any vendor or subcontractor of Ridge Local Affiliate for the services provided by such vendor or subcontractor through Ridge Local Affiliate; provided, however, that (a) such contract does not violate Ridge Local Affiliate’s obligations to such vendor or subcontractor and (b) Client Local Affiliate shall be responsible for the cost of any transition services (including, without limitation, any incremental costs resulting from the transition) in connection therewith.

XIII. OBLIGATIONS FOR RECEIPT OF DATA

Client Local Affiliate may be using data set forth in Attachment D hereto provided by FT Interactive Data Corporation (“FT Interactive”). In such case, Client Local Affiliate agrees to the provisions attached hereto as Attachment D relating to its use of FT Interactive Data Corporation data in respect of the Services. Attachment D is hereby incorporated in and made an integral part of this Schedule. Client Local Affiliate shall be under no obligation to receive FT Interactive Data Corporation data through Ridge Local Affiliate and to such extent, the previous sentence shall not apply and Ridge Local Affiliate shall not be responsible for the provision of such

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services to Client Local Affiliate in such case or have any liability for such non-Ridge Local Affiliate FT Interactive Data Corporation services that Client Local Affiliate decides to receive. Ridge Local Affiliate warrants and represents that it has full right, title or license required to provide such data to Client Local Affiliate for use in the Services. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate the right to use and store such data pursuant to the terms and conditions of Attachment D, for the purposes of Client Local Affiliate providing services to its customers in the course of Client Local Affiliate’s standard commercial operations.

XIV. ACQUISITION OF OR BY ANOTHER RIDGE LOCAL AFFILIATE CLIENT

In the event that Client Local Affiliate acquires, or is acquired by, by stock, acquisition of substantially all the assets of, merger, or consolidation (a “Business Combination”), a Client Local Affiliate of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing services substantially similar to the Services provided under this Schedule (the “Other Entity”), and Client Local Affiliate and the Other Entity, or the resulting entity as the case may be, consolidate the trade processing carried out under this Schedule with the trade processing carried out by the Other Entity prior to the termination or expiration of the Client Local Affiliate’s or the Other Entity’s schedule relating to trade processing services substantially similar to the Services provided under this Schedule so that it is processed by Ridge Local Affiliate as one entity, all service charges, including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services provided by Ridge Local Affiliate shall be renegotiated in good faith between Ridge Local Affiliate and Client Local Affiliate. Otherwise, the Ridge Local Affiliate agreements with Client Local Affiliate and the Other Entity agreements in place prior to the Business Combination shall remain in effect for the respective services provided by Ridge Local Affiliate or any other Ridge Local Affiliate’s Brokerage Services Group entity until the termination or expiration of such agreements. For clarity and notwithstanding anything to the contrary, Client Local Affiliate and the Other Entity shall be free to consolidate their trade processing after the termination or expiration of either of their agreements or relevant Schedule with Ridge Local Affiliate or any entity of the Ridge Local Affiliate Brokerage Services Group without restriction and without any obligation to renegotiate any fees relating to trade processing or otherwise. In the event Client Local Affiliate participates in a Business Combination with an entity that is not a client of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing and/or operations support services substantially similar to the Services provided under this Schedule, all rates in Attachment B (including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services) provided by Ridge Local Affiliate shall remain as set forth in Attachment B, subject to the adjustments described therein.

XV. CLIENT LOCAL AFFILIATE RESPONSIBILITIES

Client Local Affiliate shall be responsible, to the extent necessary for the Services it is receiving, in connection with the use of the Services for the following:

A. User security administration for the Services in accordance with, and as set forth in, the relevant product specifications and user documentation.

B. Forms and supplies required by Ridge Local Affiliate in connection with the performance of the Services, which are agreed to by the parties in writing. Ridge Local Affiliate shall provide Client Local Affiliate with reasonable advance notice of any such requirements.

C. Equipment, other than equipment provided by Ridge Local Affiliate, at Client Local Affiliate’s location required in use of the Services (e.g., printers, terminals) as identified by Ridge Local Affiliate in writing.

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D. Dial backup ISDN circuits or other equivalent backup solution selected by Client Local Affiliate.

E. Third party telecommunications services not otherwise set forth in Attachment B.

F. Hardware, software, and telecommunications products required to interface to the Services (e.g., terminal emulation software), other than any such hardware, software, and telecommunications products provided by Ridge Local Affiliate.

G. Special equipment, which Client Local Affiliate may elect to place at Ridge Local Affiliate locations, if required by Client Local Affiliate, specific to Client Local Affiliate’s use of the Services as agreed to by the parties in writing.

H. Use commercially reasonable efforts to obtain the approval of each relevant regulatory or self-regulatory agency or entity, if any, with regulates Client Local Affiliate’s receipt of the Services (including, without limitation, securities and commodities exchanges, associations of securities and/or commodities dealers, federal, provincial and local Governmental Authorities).

For the avoidance of doubt, Ridge Local Affiliate shall not be responsible for its failure to provide Services solely to the extent caused by the failure of Client Local Affiliate to perform the above listed requirements. Ridge Local Affiliate shall (i) provide Client Local Affiliate with reasonable notice of Client Local Affiliate’s failure to perform any of its responsibilities set forth in this Schedule and (ii) use commercially reasonable efforts to perform notwithstanding Client Local Affiliate’s failure to perform, subject to Client Local Affiliate reimbursing Ridge Local Affiliate for any reasonable incremental cost to Ridge Local Affiliate in connection with such efforts.

XVI. REQUIRED PROVISION OF SYBASE, INC.

Client Local Affiliate acknowledges and agrees that the Sybase SQL Server Program and the Sybase Replication Server Program (the “Programs”) to the extent incorporated into the Services and used in connection with Ridge Local Affiliate’s BPS Advantage product, if selected and received by Client Local Affiliate, shall only be used by the Client Local Affiliate as set forth below to read, in a view-only format, the Services, and the Programs shall not be downloaded or used to create or alter tables, schemas or databases or otherwise develop or modify in any way the applications or performance of other programming tasks. Notwithstanding the foregoing, Client Local Affiliate may access the Programs through Ridge Local Affiliate tools or third party tools; provided, however, that any access shall be restricted to the following: Client Local Affiliate may access the Services embedding a copy of the Programs which are deployed on Ridge Local Affiliate’s premises or Client Local Affiliate’s site, provided, however, that in either instance, Client Local Affiliate shall not (i) copy the application(s) embedding the Programs, (ii) use the Programs other than to process Client Local Affiliate’s own transactions, transactions for entities that are correspondents or customers of the Client Local Affiliate and transactions for entities that operate on a fully disclosed basis through Client Local Affiliate as correspondents, or (iii) access the Programs for general development. Client Local Affiliate may also develop applications against the BPS Advantage database using tools supplied by Ridge Local Affiliate, Sybase or other third parties.

XVII. SEVERABILITY

If any provision of this Schedule should be held invalid or unenforceable in a court of law in any jurisdiction, such invalidity or unenforceability shall not affect the enforceability of this Schedule or any other provision thereof. In addition, the parties agree that it is their intention that such provision shall be construed in a manner designed to effectuate the purposes of this Schedule to the fullest extent enforceable under applicable Law. The parties further agree that such ruling shall not affect the construction of that provision or any other of the provisions in any other jurisdiction.

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XVIII.   DISASTER RECOVERY; BUSINESS CONTINUITY

Ridge Local Affiliate shall maintain the disaster recovery and business continuity services as set forth in Attachment E. Attachment E is hereby incorporated in and made an integral part of this Schedule.

XIX. [****].

XX. INTENTIONALLY LEFT BLANK

XXI. CHANGES TO THE MASTER SERVICES AGREEMENT

The following general changes shall be made to the Master Services Agreement when incorporating the terms and conditions of the Master Services Agreement into this Schedule: NONE.

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IN WITNESS WHEREOF the parties have executed this Schedule as of the date first written above.

BROADRIDGE FINANCIAL SOLUTIONS (CANADA) INC.
By:	/s/ Michael Dignam
Name:	Michael Dignam
Title:	President
PENSON FINANCIAL SERVICES CANADA INC.
By:	/s/ Philip A. Pendergraft
Name:	Philip A. Pendergraft
Title:	Director

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ATTACHMENT A

DESCRIPTION OF OUTSOURCED SERVICES

[****].

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Appendix 1 to Attachment A

Intentionally left blank.

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Appendix 2 to Attachment A

Intentionally left blank.

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Appendix 3 to Attachment A

Existing Operations Support Services - Canada

[****].

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Appendix 4 to Attachment A

Existing Technology Services - Canada

[****].

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Appendix 5 to Attachment A

Intentionally left blank.

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ATTACHMENT B

Service Bureau and Operations Support Services Price Schedule

1. Charges for the Services. The charges for the Services are set forth in Attachment B-1.

2. Changes to Schedule B. The parties agree, subject to the Change Control Procedures set forth in Exhibit C to the Master Services Agreement, that any changes that the Client Local Affiliate makes from time to time that result in the addition or removal of specific Service functions (including, without limitation, material changes required by Applicable Law or by a regulatory body) may require changes to the charges payable by Client Local Affiliate.

3. Postage. Notwithstanding anything herein to the contrary, postage shall be billed to Client Local Affiliate on a pass-through basis.

4. Customization. Any customization work shall be provided pursuant to a rate schedule to be agreed upon by the parties no later than the Closing Date.

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Attachment B-1

Base Fee and Tiered Fees

[****].

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ATTACHMENT C

SERVICE LEVELS

SERVICE LEVELS

I. INTRODUCTION

In order to maintain the specified Service Levels for the Services set forth in Attachment C-1, the parties have agreed that certain defined Service Levels (the “SLAs”) are to be established and measured as set forth below. SLAs related to the Services shall be established by the parties no later than [****] after the Schedule Effective Date. New Service Levels may be added during the Schedule Term, and existing Service Levels may be modified or eliminated, by the mutual agreement of the parties from time to time.

II. OPERATIONS

A. General

Commencing on the Live Date and subject to this Section II, Ridge Local Affiliate’s provision of the Services shall be in accordance with the Service Levels identified in Attachment C-1.

B. Reports; Performance Review; Corrective Action

(a) Ridge Local Affiliate shall, wherever the parties agree to use objective data, utilize continuous measurement and data capture and shall prepare a reasonably detailed report with respect to the Service Levels) (each, a “Service Level Report”). Service Level Reports shall be provided to Client Local Affiliate on a monthly basis.

(b) Ridge Local Affiliate and Client Local Affiliate shall meet at least quarterly to review Ridge Local Affiliate’s performance with respect to the Services during the immediately preceding quarterly period and the Service Level Reports connected therewith, and, with respect to Ridge Local Affiliate’s failure to achieve any Service Levels, the parties shall (1) jointly formulate a formal action plan for corrective action, as applicable, and (2) agree upon the appropriate consequences if such action plan does not prevent subsequent instances of the same Service Level failures.

(c) The specific criteria for each Service Level shall be detailed in the applicable SLA set forth in Attachment C-1. Prior to Live Date, the parties shall modify such Service Levels, create such additional Service Levels, or modify the method used to measure performance (including, without limitation, appropriate objective data, quality control process or other methods) as the parties mutually agree in writing.

(d) [****], the parties shall measure actual Ridge Local Affiliate performance levels in the manner previously agreed to by the parties, and review the method used to measure performance and such performance. The parties shall discuss in good faith any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review and shall, at least once annually during the Schedule Term, engage in such good faith discussions to determine any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review.

C. Changes to the Service Levels

(a) The parties acknowledge that the Service Levels shall be subject to continuous improvement and that changing circumstances may necessitate modifications to service, expectations and responsibilities. Accordingly, the parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if (i) any modifications to the existing Service Levels are necessary or advisable, (ii) any existing Service Levels should be deleted and (iii) any new Service Levels should be added.

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(b) For all new Service Levels, the parties shall mutually agree upon the Service Level targets and the methodology and tools used to measure performance. The parties shall mutually agree on any Service Level target based on [****] of measurements of the applicable Service Level utilizing the agreed upon methodology and tools. Any dispute regarding the establishment of such Service Level targets or the methodology and tools used to measure performance shall be resolved by the Executive Governance Committee. In addition, the Executive Governance Committee shall review Service Level targets and performance and shall give weight to Client Local Affiliate’s recommendations for continuous improvement of Service Level targets, based on, among other things, advances in technology.

D Service Level Credits

The amount of Service Level Credits credited to Client Local Affiliate with respect to all Category 1 service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – Category 1”). The amount of Service Level Credits credited to Client Local Affiliate with respect to all other service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – All Other Categories”, and together with the Services Level Credit Pool – Category 1, the “Service Level Credit Pools”). The Service Level Credit Pools shall be allocated to various Service Levels as set forth in Attachment C-1. The parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if any modification to the allocation of the Service Level Credit Pools set forth in Attachment C-1 are necessary or advisable.

E. Root-Cause Analysis

In the event Ridge Local Affiliate has a Service Level failure that is not insignificant, Ridge Local Affiliate shall perform a root-cause analysis as described in Section 1.C of the Master Services Agreement.

F. Excuse

Ridge Local Affiliate shall be excused from performing any Service or obligation hereunder, including, without limitation, the attainment of any Service Level, if and to the extent Ridge Local Affiliate’s failure to perform such Service or obligation is caused by Client Local Affiliate’s or its agents’ act or omission, including, without limitation, (a) Client Local Affiliate providing incomplete or inaccurate data, specifications or requirements; and (b) failures, errors or defects in facilities, equipment, materials or other resources provided by Client Local Affiliate, including, without limitation, telecommunications, hardware, infrastructure and network connectivity.

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Attachment C-1

SLAs

The parties shall include a Service Level for development work no later than [****] after the Schedule Effective Date.

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ATTACHMENT D

No Warranty and Limitation on Liability Provisions

Required by Users of Third Party Data

No Warranties

EXCEPT IN CONNECTION WITH CONTRACTS OF THIRD PARTY DATA SUPPLIERS WITHOUT CONTRACTUAL RESTRICTIONS SIMILAR TO THOSE BELOW, NO THIRD PARTY DATA SUPPLIERS MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS OR ANY OTHER MATTER.

Limitation on Liability

(a) No third party data supplier shall have any liability to Client Local Affiliate, or any other third party, for errors, omissions or malfunctions in the services provided by such third party data supplier, other than the obligation to endeavor, upon receipt of notice from Client Local Affiliate, to correct a malfunction, error, or omission in any such services.

(b) Client Local Affiliate acknowledges that the services provided by any third party data supplier are intended for use as an aid to institutional investors, registered brokers or professionals of similar sophistication in making informed judgments concerning securities.

Client Local Affiliate accepts responsibility for, and acknowledges it exercises its own independent judgment in, its selection of any of the services provided by any third party data supplier, its selection of the use or intended use of such, and any results obtained. Nothing contained herein shall be deemed to be a waiver of any rights existing under applicable law for the protection of investors.

(c) Client Local Affiliate shall indemnify Ridge Local Affiliate’s third party data suppliers (including, without limitation, FT Interactive) against and hold such third party data suppliers harmless from any and all losses, damages, liability, costs, including, without limitation, attorney’s fees, resulting directly or indirectly from any claim or demand against such third party data suppliers by a third party arising out of or related to the accuracy or completeness of any services received by Client Local Affiliate, or any data, information, service, report, analysis or publication derived therefrom. No third party data supplier shall be liable for any claim or demand against Client Local Affiliate by a third party.

(d) As between a third party data supplier and Client Local Affiliate, neither party shall be liable for (i) any special, indirect or consequential damages (even if advised of the possibility of such), (ii) any delay by reason of circumstances beyond its control, including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure beyond its control of transportation or power supply, or (iii) any claim that arose more than one (1) year prior to the institution of suit therefor.

Broadridge Financial Solutions (Canada) Inc. 22

CANADA

ATTACHMENT E

DISASTER RECOVERY; BUSINESS CONTINUITY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

Broadridge Financial Solutions (Canada) Inc. 23

CANADA

ATTACHMENT F

REPORTS

To be agreed upon by the parties within [****] after the Schedule Effective Date.

Broadridge Financial Solutions (Canada) Inc. 24

CANADA

ATTACHMENT G

RECORD RETENTION POLICY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

Broadridge Financial Solutions (Canada) Inc. 25

NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED LANGUAGE.

Schedule A (United Kingdom)

SERVICE BUREAU AND OPERATIONS SUPPORT SERVICES SCHEDULE

To The Master Services Agreement

between

BROADRIDGE FINANCIAL SOLUTIONS, INC.

and

PENSON WORLDWIDE, INC.

This schedule (the “Schedule”), dated as of November 2, 2009 (the “Schedule Effective Date”), between Ridge Clearing & Outsourcing Solutions Limited (“Ridge Local Affiliate”) and Penson Financial Services Ltd. (“Client Local Affiliate”), to the Master Services Agreement, dated as of the date hereof, between Broadridge Financial Solutions, Inc. and Penson Worldwide, Inc., sets forth the terms and conditions, in addition to the terms and conditions in the Master Services Agreement, under which Ridge Local Affiliate will provide service bureau and operations support services to Client Local Affiliate to assist and support Client Local Affiliate in functioning as a clearing firm. Each of Client Local Affiliate and Ridge Local Affiliate agrees to comply with and fulfill all terms and conditions applicable to it under the Master Services Agreement.

Unless otherwise defined herein, all capitalized terms shall have the meanings given to them in the Master Services Agreement. In the event of a conflict between the terms and conditions of this Schedule and the terms and conditions of the Master Services Agreement, the terms and conditions of this Schedule shall govern. The term “Client Local Affiliate” as used in this Schedule includes all Affiliates, divisions and subsidiaries of Client Local Affiliate. Except where otherwise indicated, all references in this Schedule to Sections or Attachments are to Sections to, and Attachments of, this Schedule. The term “party” as used in this Schedule means Ridge Local Affiliate or Client Local Affiliate, as applicable. The term “parties” as used in this Schedule means Ridge Local Affiliate and Client Local Affiliate.

I. SUBMISSION OF SCHEDULE

A. During the Schedule Term, Client Local Affiliate and Ridge Local Affiliate shall each be subject, to the extent applicable to such party, to the provisions of federal, state and local laws, rules and regulations and the constitution, by-laws, rules, regulations and stated policies of the Financial Services Authority (“FSA”), the London Stock Exchange Group plc (“LSE”) and any other securities exchange, commission, association, regulatory or self-regulatory organization (“SRO”) vested with authority over Client Local Affiliate or Ridge Local Affiliate (to the extent applicable to a party, the “Laws and Rules”). Each party shall perform its obligations under this Schedule in accordance with the Laws and Rules.

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B. This Schedule shall not become effective until the date upon which all necessary SRO approvals as to both parties are received (the “Approval Date”); provided, however, that if no SRO approvals are required for this Schedule to become effective, this Schedule shall become effective as of the Schedule Effective Date. In the event that any such approval is required and this Schedule is not so approved, the parties shall negotiate in good faith to amend this Schedule as may be needed to obtain such approval.

C. Ridge Local Affiliate acknowledges that Client Local Affiliate has regulatory responsibilities as a clearing firm, including, among other things, a duty to supervise the types of business in which it engages. To assist Client Local Affiliate in satisfying such obligations, Ridge Local Affiliate agrees to provide, at the reasonable request of Client Local Affiliate, performance reports with respect to the Services and full access to relevant books and records, information and Ridge Local Affiliate personnel engaged in providing the Services. Ridge Local Affiliate acknowledges that Client Local Affiliate is required, from time to time, to prepare and file reports with the FSA, LSE and other SROs or Governmental Authorities. To assist Client Local Affiliate in satisfying such requirements, Ridge Local Affiliate agrees to provide Client Local Affiliate with information in its possession that is necessary for Client Local Affiliate to prepare and file any such reports.

D. This Schedule is not intended, and shall not be construed, to limit, reduce, or otherwise change any regulatory, contractual or other obligation that Client Local Affiliate owes to a correspondent or to its customers.

II. SERVICES TO BE PERFORMED BY RIDGE LOCAL AFFILIATE

A. Subject to the second paragraph of Section 16.G of the Master Services Agreement and Section I.B, Ridge Local Affiliate will perform the services, functions and responsibilities described in Attachment A in accordance with the terms and conditions of this Schedule and the Master Services Agreement. Attachment A is hereby incorporated in and made an integral part of this Schedule. Any additional services to be performed by Ridge Local Affiliate shall be subject to the written agreement of the parties.

B. Intentionally left blank.

C. This Schedule and the Master Services Agreement are intended to create an exclusive arrangement between Client Local Affiliate and Ridge Local Affiliate with respect to the Services utilized by Client Local Affiliate as of the applicable Live Date in the Territory for which a pricing schedule is included in this Schedule except (A) as otherwise set forth in this Schedule and the Master Services Agreement and (B) in the event that (i) Client Local Affiliate or a Customer of Client Local Affiliate is prohibited by Law from receiving Services from Ridge Local Affiliate in the Territory, (ii) Client Local Affiliate obtains a business and in connection therewith is contractually required to use an alternative system (and not the Services) as a condition of obtaining such business or (iii) during any time period that Ridge Local Affiliate is in material breach of this Schedule and has failed to cure such breach within thirty (30) days following notice from Client Local Affiliate specifying the nature of such breach in reasonable detail.

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III. CONVERSION

A. Conversion of Client Correspondents. In connection with the conversion of the correspondents of Client Local Affiliate (“Client Correspondents”) to Ridge Local Affiliate, the parties agree to the following:

(i) Client Local Affiliate shall provide Ridge Local Affiliate with Client Local Affiliate’s requirements with respect to the Client Local Affiliate files and Service Levels applicable to the Client Correspondents (the “Client Requirements”) after the Schedule Effective Date. The parties shall enter into a statement of work (the “Conversion SOW”) that will describe Client Local Affiliate’s migration to Ridge Local Affiliate’s service delivery and technology platform [****]. The Conversion SOW will define the Target Live Date for each Service and describe specific implementation activities and procedures required to migrate Client Correspondents to the Ridge Local Affiliate, including, without limitation, development, implementation and integration of Software and other software and development and integration of correspondent clearing functionalities, reporting and monitoring systems and such other services as may be set forth in the Conversion SOW (the “Conversion Services”). Without limiting the generality of the foregoing, the Conversion SOW shall (1) specify that Ridge Local Affiliate will convert the applicable Client Local Affiliate files to make them compatible with the Services and the other services, as may be required in respect of the migration of Client Local Affiliate’s Customers to the Services and (2) describe the development and integration of correspondent clearing functionalities by Ridge Local Affiliate. The Conversion Services shall be provided at no charge to Client Local Affiliate by Ridge Local Affiliate.

(ii) The parties shall cooperate and provide each other with all information and assistance reasonably required in connection with the Conversion Services. Each party will assign a liaison person to assist and cooperate with the other party in connection with the Conversion Services (which person may be replaced by a party at its sole discretion from time to time by way of notice to the other party).

IV. TERM OF SCHEDULE

A. Schedule Term. The term of this Schedule (the “Schedule Term”) shall begin on the Schedule Effective Date and shall continue for a period of ten (10) years after the last Live Date with respect to the Schedules under the Master Services Agreement for the U.S., U.K. or Canada (for clarity, the Schedule Term of the Schedules under the Master Services Agreement for the U.S., U.K. and Canada shall be coterminous with each other); provided, however, that this Schedule’s effective date is subject to its review and approval by the applicable regulatory agency as described in Section I.A. The “Live Date” for a Service is defined as the first date upon which Ridge Local Affiliate processes trades utilizing the applicable Service on behalf of Client Correspondents in accordance with the provisions and requirements of this Schedule and the Master Services Agreement (excluding any beta testing or similar testing of the system). The Schedule Term shall automatically extend following its scheduled expiration date unless (1) either party gives notice of termination at least one hundred eighty (180) days prior to the scheduled expiration date, in which case the Schedule Term shall expire on the scheduled expiration date or (2) either party gives notice of termination at any time after the date that is one hundred eighty (180) days prior to the scheduled expiration date of the Schedule Term (including any time beyond the scheduled expiration date), in which case the Schedule Term shall expire on the date specified in such notice of termination, which date must be at least one hundred eighty (180) days after the date of such notice.

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B. [****].

C. [****].

D. [****].

E. [****].

V. CHARGES

A. The fees for the Services are set forth in Attachment B hereto. Attachment B is hereby incorporated in and made an integral part of this Schedule. Unless otherwise indicated, all fees and charges set forth in Attachment B are in British pounds sterling. Notwithstanding the immediately preceding sentence, for purposes of calculating the aggregate amounts in connection with the last paragraph in Attachment A and paragraph four of Section III to Attachment B-1, such calculation shall be in U.S. dollars using the exchange rate published in the Wall Street Journal on the Schedule Effective Date.

B. [****].

C. [****].

VI. NO PARTNERSHIP OR AGENCY; NO SPECIAL TREATMENT

Neither this Schedule nor any activity hereunder shall create a general or limited partnership, association, joint venture, branch or agency relationship between Client Local Affiliate and Ridge Local Affiliate. Client Local Affiliate shall not hold itself out as an agent of Ridge Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Ridge Local Affiliate, nor shall it employ Ridge Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider and clearing broker. Except as reasonably necessary to provide the Services, Ridge Local Affiliate shall not hold itself out as an agent of Client Local Affiliate or of any subsidiary or company controlled directly or indirectly by or affiliated with Client Local Affiliate, nor shall it employ Client Local Affiliate’s name in any manner that creates the impression that the relationship created or intended between them is anything other than that of service provider and clearing broker. Neither party shall, without the prior approval of the other party, place any advertisement in any newspaper, publication, periodical or any other media if such advertisement in any manner makes reference to the other party or to the arrangements contemplated by this Schedule. Neither party shall, without the prior approval of the other party (which approval shall not be unreasonably withheld), furnish any link to the website(s) of the other party or its Affiliates. For the avoidance of doubt, nothing herein shall prevent the disclosure of (i) Ridge Local Affiliate’s name or the Services to be performed under the Master Services Agreement or this Schedule to any of Client Local Affiliate’s regulators or customers or (ii) a party’s name or the services it offers to the extent necessary to carry out each party’s obligations under the Master Services Agreement, this Schedule or Marketing Agreement.

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Nothing herein shall cause Ridge Local Affiliate to be construed as or deemed to be a fiduciary with respect to Client Local Affiliate, any correspondent of Client Local Affiliate, or any customer of Client Local Affiliate or its correspondents.

This Schedule is not intended, nor shall it be construed, to bestow upon either party any special treatment regarding any other arrangements, agreements or understandings that exist or may hereafter exist between the parties or their affiliates. Neither party shall have any obligation to deal with the other in any capacity other than as set forth in this Schedule.

VII. SERVICE LEVELS

Ridge Local Affiliate shall provide the Services in accordance with the terms and conditions set forth in Section 1.C of the Master Services Agreement and with respect to Service Levels set forth in Attachment C hereto and any other Service Level agreement that may be agreed between the parties from time to time with respect to the Territory. Attachment C is hereby incorporated in and made an integral part of this Schedule. Ridge Local Affiliate agrees that the Service Levels set forth in Attachment C shall be at least as stringent as any service levels provided by Ridge Local Affiliate to its other clients in the United Kingdom.

VIII. EXCHANGE OF INFORMATION

Throughout the Schedule Term, each party shall promptly supply the other with information in its possession necessary or appropriate to enable the other party properly to perform its obligations under this Schedule and as a registered broker-dealer.

IX. RECORDS RETENTION

The information that Ridge Local Affiliate generates on behalf of Client Local Affiliate are the books and records of Client Local Affiliate. Notwithstanding anything to the contrary in the Master Services Agreement, Ridge Local Affiliate will maintain and preserve such information in accordance with the agreed-upon record retention policy set forth in Attachment G and the Laws and Rules. Any additional retention period(s) shall be directed by Client Local Affiliate and shall be subject to the mutual written agreement of the parties. Attachment G is hereby incorporated in and made an integral part of this Schedule.

X. GOVERNANCE

Ridge Local Affiliate and Client Local Affiliate shall each appoint at least two (2) senior level managers to a joint committee that shall meet no less than monthly to address issues that may arise in connection with the performance of the Services. In addition to the foregoing but without prejudice to the obligations of the parties under this Schedule or the Master Services Agreement, the parties have agreed to the detailed governance provisions set forth in Exhibit C to the Master Services Agreement.

Ridge Local Affiliate shall provide to Client Local Affiliate the reports set forth in Attachment F. Attachment F is hereby incorporated in and made an integral part of this Schedule.

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XI. TAPE RECORDING

Unless otherwise prohibited by applicable Law, the parties shall have the right to record telephone conversations between themselves, and waive any right to further notice of any such recording. The parties agree to make such recordings available to each other upon reasonable notice.

XII. THIRD PARTY VENDOR SERVICES

Client Local Affiliate may contract directly with and in such case will be responsible for (i) complying with the terms and conditions of use relating to additional third party products or services not affiliated with Ridge Local Affiliate set forth in Attachment A that it elects to receive or access through Ridge Local Affiliate from time to time and (ii) the costs relating thereto as applicable, other than those third party products or services integrated into the Services or provided as part of the Services. If third party products or services, including, without limitation, data, are provided by or through Ridge Local Affiliate to Client Local Affiliate or integrated into the Services or provided as part of the Services, Ridge Local Affiliate shall obtain and warrants and represents that it has the full right, title or license required to provide such product or service to Client Local Affiliate. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate and customers of Client Local Affiliate the right to use such product or service during, and for the purposes of, and in accordance with, the Master Services Agreement and this Schedule.

Client Local Affiliate shall be responsible for complying with the terms and conditions of use (to the extent such terms and conditions of use are provided by Ridge Local Affiliate to Client Local Affiliate) relating to the third party products or services that it receives or accesses through Ridge Local Affiliate and the costs relating thereto. If (i) any third party products or services, or Ridge-owned products or services, provided by Ridge Local Affiliate become unavailable and require replacement, (ii) Ridge Local Affiliate, upon notice to Client Local Affiliate (and upon Client Local Affiliate’s consent, if and to the extent such consent is required by Law), elects to replace any third party products or services or Ridge-owned products or services provided by Ridge Local Affiliate with new or different third party products or services or Ridge-owned products or services or (iii) at least fifty percent (50%) of Ridge Local Affiliate’s clients utilizing such products or services in the Territory request such replacement, in each case, Ridge Local Affiliate shall replace such products or services with equivalent or enhanced products or services without increased cost.

Client Local Affiliate may contract directly with any vendor or subcontractor of Ridge Local Affiliate for the services provided by such vendor or subcontractor through Ridge Local Affiliate; provided, however, that (a) such contract does not violate Ridge Local Affiliate’s obligations to such vendor or subcontractor and (b) Client Local Affiliate shall be responsible for the cost of any transition services (including, without limitation, any incremental costs resulting from the transition) in connection therewith.

XIII. OBLIGATIONS FOR RECEIPT OF DATA

Client Local Affiliate may be using data set forth in Attachment D hereto provided by FT Interactive Data Corporation (“FT Interactive”). In such case, Client Local Affiliate agrees to the provisions attached hereto as Attachment D relating to its use of FT Interactive Data Corporation data in respect of the Services. Attachment D is hereby incorporated in and made an integral part of this Schedule. Client Local Affiliate shall be under no obligation to receive FT Interactive Data Corporation data through Ridge Local Affiliate and to such extent, the previous sentence shall not apply and Ridge Local Affiliate shall not be responsible for the provision of such

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services to Client Local Affiliate in such case or have any liability for such non-Ridge Local Affiliate FT Interactive Data Corporation services that Client Local Affiliate decides to receive. Ridge Local Affiliate warrants and represents that it has full right, title or license required to provide such data to Client Local Affiliate for use in the Services. Additionally, Ridge Local Affiliate hereby grants to Client Local Affiliate the right to use and store such data pursuant to the terms and conditions of Attachment D, for the purposes of Client Local Affiliate providing services to its customers in the course of Client Local Affiliate’s standard commercial operations.

XIV. ACQUISITION OF OR BY ANOTHER RIDGE LOCAL AFFILIATE CLIENT

In the event that Client Local Affiliate acquires, or is acquired by, by stock, acquisition of substantially all the assets of, merger, or consolidation (a “Business Combination”), a Client Local Affiliate of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing services substantially similar to the Services provided under this Schedule (the “Other Entity”), and Client Local Affiliate and the Other Entity, or the resulting entity as the case may be, consolidate the trade processing carried out under this Schedule with the trade processing carried out by the Other Entity prior to the termination or expiration of the Client Local Affiliate’s or the Other Entity’s schedule relating to trade processing services substantially similar to the Services provided under this Schedule so that it is processed by Ridge Local Affiliate as one entity, all service charges, including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services provided by Ridge Local Affiliate shall be renegotiated in good faith between Ridge Local Affiliate and Client Local Affiliate. Otherwise, the Ridge Local Affiliate agreements with Client Local Affiliate and the Other Entity agreements in place prior to the Business Combination shall remain in effect for the respective services provided by Ridge Local Affiliate or any other Ridge Local Affiliate’s Brokerage Services Group entity until the termination or expiration of such agreements. For clarity and notwithstanding anything to the contrary, Client Local Affiliate and the Other Entity shall be free to consolidate their trade processing after the termination or expiration of either of their agreements or relevant Schedule with Ridge Local Affiliate or any entity of the Ridge Local Affiliate Brokerage Services Group without restriction and without any obligation to renegotiate any fees relating to trade processing or otherwise. In the event Client Local Affiliate participates in a Business Combination with an entity that is not a client of Ridge Local Affiliate’s Brokerage Services Group that receives trade processing and/or operations support services substantially similar to the Services provided under this Schedule, all rates in Attachment B (including, without limitation, the Base Fee and any other applicable tiered fees applicable for the brokerage processing services) provided by Ridge Local Affiliate shall remain as set forth in Attachment B, subject to the adjustments described therein.

XV. CLIENT LOCAL AFFILIATE RESPONSIBILITIES

Client Local Affiliate shall be responsible, to the extent necessary for the Services it is receiving, in connection with the use of the Services for the following:

A. User security administration for the Services in accordance with, and as set forth in, the relevant product specifications and user documentation.

B. Forms and supplies required by Ridge Local Affiliate in connection with the performance of the Services, which are agreed to by the parties in writing. Ridge Local Affiliate shall provide Client Local Affiliate with reasonable advance notice of any such requirements.

C. Equipment, other than equipment provided by Ridge Local Affiliate, at Client Local Affiliate’s location required in use of the Services (e.g., printers, terminals) as identified by Ridge Local Affiliate in writing.

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D. Dial backup ISDN circuits or other equivalent backup solution selected by Client Local Affiliate.

E. Third party telecommunications services not otherwise set forth in Attachment B.

F. Hardware, software, and telecommunications products required to interface to the Services (e.g., terminal emulation software), other than any such hardware, software, and telecommunications products provided by Ridge Local Affiliate.

G. Special equipment, which Client Local Affiliate may elect to place at Ridge Local Affiliate locations, if required by Client Local Affiliate, specific to Client Local Affiliate’s use of the Services as agreed to by the parties in writing.

H. Use commercially reasonable efforts to obtain the approval of each relevant regulatory or self-regulatory agency or entity, if any, with regulates Client Local Affiliate’s receipt of the Services (including, without limitation, securities and commodities exchanges, associations of securities and/or commodities dealers, federal, provincial and local Governmental Authorities).

For the avoidance of doubt, Ridge Local Affiliate shall not be responsible for its failure to provide Services solely to the extent caused by the failure of Client Local Affiliate to perform the above listed requirements. Ridge Local Affiliate shall (i) provide Client Local Affiliate with reasonable notice of Client Local Affiliate’s failure to perform any of its responsibilities set forth in this Schedule and (ii) use commercially reasonable efforts to perform notwithstanding Client Local Affiliate’s failure to perform, subject to Client Local Affiliate reimbursing Ridge Local Affiliate for any reasonable incremental cost to Ridge Local Affiliate in connection with such efforts.

XVI. REQUIRED PROVISION OF SYBASE, INC.

Client Local Affiliate acknowledges and agrees that the Sybase SQL Server Program and the Sybase Replication Server Program (the “Programs”) to the extent incorporated into the Services and used in connection with Ridge Local Affiliate’s BPS Advantage product, if selected and received by Client Local Affiliate, shall only be used by the Client Local Affiliate as set forth below to read, in a view-only format, the Services, and the Programs shall not be downloaded or used to create or alter tables, schemas or databases or otherwise develop or modify in any way the applications or performance of other programming tasks. Notwithstanding the foregoing, Client Local Affiliate may access the Programs through Ridge Local Affiliate tools or third party tools; provided, however, that any access shall be restricted to the following: Client Local Affiliate may access the Services embedding a copy of the Programs which are deployed on Ridge Local Affiliate’s premises or Client Local Affiliate’s site, provided, however, that in either instance, Client Local Affiliate shall not (i) copy the application(s) embedding the Programs, (ii) use the Programs other than to process Client Local Affiliate’s own transactions, transactions for entities that are correspondents or customers of the Client Local Affiliate and transactions for entities that operate on a fully disclosed basis through Client Local Affiliate as correspondents, or (iii) access the Programs for general development. Client Local Affiliate may also develop applications against the BPS Advantage database using tools supplied by Ridge Local Affiliate, Sybase or other third parties.

XVII. SEVERABILITY

If any provision of this Schedule should be held invalid or unenforceable in a court of law in any jurisdiction, such invalidity or unenforceability shall not affect the enforceability of this Schedule or any other provision thereof. In addition, the parties agree that it is their intention that such provision shall be construed in a manner designed to effectuate the purposes of this Schedule to the fullest extent enforceable under applicable Law. The parties further agree that such ruling shall not affect the construction of that provision or any other of the provisions in any other jurisdiction.

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XVIII.  DISASTER RECOVERY; BUSINESS CONTINUITY

 Ridge Local Affiliate shall maintain the disaster recovery and business continuity services as set forth in Attachment E.  Attachment E is hereby incorporated in and made an integral part of this Schedule.

XIX.  [****].

XX.  INTENTIONALLY LEFT BLANK

XXI.  CHANGES TO THE MASTER SERVICES AGREEMENT

 The following general changes shall be made to the Master Services Agreement when incorporating the terms and conditions  of the Master Services Agreement into this Schedule: NONE.

*                        *                         *                        *

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IN WITNESS WHEREOF the parties have executed this Schedule as of the date first written above.

RIDGE CLEARING & OUTSOURCING SOLUTIONS LIMITED
By:	/s/ Joseph Barra
Name:	Joseph Barra
Title:	Director
PENSON FINANCIAL SERVICES LTD.
By:	/s/ Philip A. Pendergraft
Name:	Philip A. Pendergraft
Title:	Director

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ATTACHMENT A

DESCRIPTION OF OUTSOURCED SERVICES

[****].

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Appendix 1 to Attachment A

Intentionally left blank.

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Appendix 2 to Attachment A

Intentionally left blank.

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Appendix 3 to Attachment A

Existing Operations Support Services – U.K.

[****].

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Appendix 4 to Attachment A

Existing Technology Services – U.K.

[****].

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Appendix 5 to Attachment A

Intentionally left blank.

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ATTACHMENT B

Service Bureau and Operations Support Services Price Schedule

Service Bureau and Operations Support Services Price Schedule

1. Charges for the Services. The charges for the Services are set forth in Attachment B-1.

2. Changes to Schedule B. The parties agree, subject to the Change Control Procedures set forth in Exhibit C to the Master Services Agreement, that any changes that the Client Local Affiliate makes from time to time that result in the addition or removal of specific Service functions (including, without limitation, material changes required by Applicable Law or by a regulatory body) may require changes to the charges payable by Client Local Affiliate.

3. Postage. Notwithstanding anything herein to the contrary, postage shall be billed to Client Local Affiliate on a pass-through basis.

4. Customization. Any customization work shall be provided pursuant to a rate schedule to be agreed upon by the parties no later than the Closing Date.

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Attachment B-1

Base Fee and Tiered Fees

[****].

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ATTACHMENT C

SERVICE LEVELS

I. INTRODUCTION

In order to maintain the specified Service Levels for the Services set forth in Attachment C-1, the parties have agreed that certain defined Service Levels (the “SLAs”) are to be established and measured as set forth below. SLAs related to the Services shall be established by the parties no later than [****] after the Schedule Effective Date. New Service Levels may be added during the Schedule Term, and existing Service Levels may be modified or eliminated, by the mutual agreement of the parties from time to time.

II. OPERATIONS

A. General

Commencing on the Live Date and subject to this Section II, Ridge Local Affiliate’s provision of the Services shall be in accordance with the Service Levels identified in Attachment C-1.

B. Reports; Performance Review; Corrective Action

(a) Ridge Local Affiliate shall, wherever the parties agree to use objective data, utilize continuous measurement and data capture and shall prepare a reasonably detailed report with respect to the Service Levels) (each, a “Service Level Report”). Service Level Reports shall be provided to Client Local Affiliate on a monthly basis.

(b) Ridge Local Affiliate and Client Local Affiliate shall meet at least quarterly to review Ridge Local Affiliate’s performance with respect to the Services during the immediately preceding quarterly period and the Service Level Reports connected therewith, and, with respect to Ridge Local Affiliate’s failure to achieve any Service Levels, the parties shall (1) jointly formulate a formal action plan for corrective action, as applicable, and (2) agree upon the appropriate consequences if such action plan does not prevent subsequent instances of the same Service Level failures.

(c) The specific criteria for each Service Level shall be detailed in the applicable SLA set forth in Attachment C-1. Prior to Live Date, the parties shall modify such Service Levels, create such additional Service Levels, or modify the method used to measure performance (including, without limitation, appropriate objective data, quality control process or other methods) as the parties mutually agree in writing.

(d) [****], the parties shall measure actual Ridge Local Affiliate performance levels in the manner previously agreed to by the parties, and review the method used to measure performance and such performance. The parties shall discuss in good faith any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review and shall, at least once annually during the Schedule Term, engage in such good faith discussions to determine any appropriate modifications to the method used to measure performance, the Service Levels or any remedial steps required to be taken by Ridge Local Affiliate in light of such review.

C. Changes to the Service Levels

(a) The parties acknowledge that the Service Levels shall be subject to continuous improvement and that changing circumstances may necessitate modifications to service, expectations and

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responsibilities. Accordingly, the parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if (i) any modifications to the existing Service Levels are necessary or advisable, (ii) any existing Service Levels should be deleted and (iii) any new Service Levels should be added.

(b) For all new Service Levels, the parties shall mutually agree upon the Service Level targets and the methodology and tools used to measure performance. The parties shall mutually agree on any Service Level target based on [****] of measurements of the applicable Service Level utilizing the agreed upon methodology and tools. Any dispute regarding the establishment of such Service Level targets or the methodology and tools used to measure performance shall be resolved by the Executive Governance Committee. In addition, the Executive Governance Committee shall review Service Level targets and performance and shall give weight to Client Local Affiliate’s recommendations for continuous improvement of Service Level targets, based on, among other things, advances in technology.

D Service Level Credits

The amount of Service Level Credits credited to Client Local Affiliate with respect to all Category 1 service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – Category 1”). The amount of Service Level Credits credited to Client Local Affiliate with respect to all other service level failures occurring in a single month shall not exceed, in total, [****] of the monthly charges payable in connection with the Schedule for that month (the “Service Level Credit Pool – All Other Categories”, and together with the Services Level Credit Pool – Category 1, the “Service Level Credit Pools”). The Service Level Credit Pools shall be allocated to various Service Levels as set forth in Attachment C-1. The parties shall, at least once annually during the Schedule Term, engage in good faith discussions to determine if any modification to the allocation of the Service Level Credit Pools set forth in Attachment C-1 are necessary or advisable.

E. Root-Cause Analysis

In the event Ridge Local Affiliate has a Service Level failure that is not insignificant, Ridge Local Affiliate shall perform a root-cause analysis as described in Section 1.C of the Master Services Agreement.

F. Excuse

Ridge Local Affiliate shall be excused from performing any Service or obligation hereunder, including, without limitation, the attainment of any Service Level, if and to the extent Ridge Local Affiliate’s failure to perform such Service or obligation is caused by Client Local Affiliate’s or its agents’ act or omission, including, without limitation, (a) Client Local Affiliate providing incomplete or inaccurate data, specifications or requirements; and (b) failures, errors or defects in facilities, equipment, materials or other resources provided by Client Local Affiliate, including, without limitation, telecommunications, hardware, infrastructure and network connectivity.

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Attachment C-1

SLAs

The parties shall include a Service Level for development work no later than [****] after the Schedule Effective Date.

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ATTACHMENT D

No Warranty and Limitation on Liability Provisions

Required by Users of Third Party Data

No Warranties

EXCEPT IN CONNECTION WITH CONTRACTS OF THIRD PARTY DATA SUPPLIERS WITHOUT CONTRACTUAL RESTRICTIONS SIMILAR TO THOSE BELOW, NO THIRD PARTY DATA SUPPLIERS MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS OR ANY OTHER MATTER.

Limitation on Liability

(a) No third party data supplier shall have any liability to Client Local Affiliate, or any other third party, for errors, omissions or malfunctions in the services provided by such third party data supplier, other than the obligation to endeavor, upon receipt of notice from Client Local Affiliate, to correct a malfunction, error, or omission in any such services.

(b) Client Local Affiliate acknowledges that the services provided by any third party data supplier are intended for use as an aid to institutional investors, registered brokers or professionals of similar sophistication in making informed judgments concerning securities.

Client Local Affiliate accepts responsibility for, and acknowledges it exercises its own independent judgment in, its selection of any of the services provided by any third party data supplier, its selection of the use or intended use of such, and any results obtained. Nothing contained herein shall be deemed to be a waiver of any rights existing under applicable law for the protection of investors.

(c) Client Local Affiliate shall indemnify Ridge Local Affiliate’s third party data suppliers (including, without limitation, FT Interactive) against and hold such third party data suppliers harmless from any and all losses, damages, liability, costs, including, without limitation, attorney’s fees, resulting directly or indirectly from any claim or demand against such third party data suppliers by a third party arising out of or related to the accuracy or completeness of any services received by Client Local Affiliate, or any data, information, service, report, analysis or publication derived therefrom. No third party data supplier shall be liable for any claim or demand against Client Local Affiliate by a third party.

(d) As between a third party data supplier and Client Local Affiliate, neither party shall be liable for (i) any special, indirect or consequential damages (even if advised of the possibility of such), (ii) any delay by reason of circumstances beyond its control, including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure beyond its control of transportation or power supply, or (iii) any claim that arose more than one (1) year prior to the institution of suit therefor.

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ATTACHMENT E

DISASTER RECOVERY; BUSINESS CONTINUITY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

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ATTACHMENT F

REPORTS

To be agreed upon by the parties within [****] after the Schedule Effective Date.

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ATTACHMENT G

RECORD RETENTION POLICY

To be agreed upon by the parties within [****] after the Schedule Effective Date.

Ridge Clearing & Outsourcing Solutions Limited 25

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Richard J. Daly, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Broadridge Financial Solutions, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 4, 2010

/s/ Richard J. Daly

Richard J. Daly

Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Dan Sheldon, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Broadridge Financial Solutions, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 4, 2010

/s/ Dan Sheldon

Dan Sheldon

Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Broadridge Financial Solutions, Inc. (the “Company”) on Form 10-Q for the three months ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Daly, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard J. Daly

Richard J. Daly

Chief Executive Officer

February 4, 2010

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Broadridge Financial Solutions, Inc. (the “Company”) on Form 10-Q for the three months ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dan Sheldon, Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Dan Sheldon

Dan Sheldon

Vice President, Chief Financial Officer

February 4, 2010

Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.