NASDAQ OMX Group (NDAQ)

Nasdaq Insurance Agency

In December 2002, Nasdaq purchased NASD’s 50.0% interest in NASD Insurance Agency (subsequently renamed the Nasdaq Insurance Agency). Nasdaq’s consideration for NASD’s 50.0% interest consisted of an upfront payment of $0.5 million and up to $5.1 million based on Nasdaq Insurance Agency’s stream of contingent cash flow through 2016 (which reflects an agreement in 2004 between Nasdaq and NASD to extend the term from 2011 to 2016). Nasdaq agreed to pay NASD up to: (a) 20.0% of Nasdaq Insurance Agency’s cash

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The Nasdaq Stock Market, Inc.

Notes to Condensed Consolidated Financial Statements—(Continued)

flows until Nasdaq has paid NASD $2.3 million from cash flows; (b) 10.0% of Nasdaq Insurance Agency’s cash flows until Nasdaq has paid NASD a cumulative amount of $3.0 million from cash flows; (c) 5.0% of Nasdaq Insurance Agency’s cash flows until the earlier to occur of Nasdaq paying NASD the full cumulative amount of $5.1 million from cash flows or December 31, 2016. As of September 30, 2005, Nasdaq has recorded $0.5 million in dividends to NASD for Nasdaq Insurance Agency’s cash flows. The dividends were reflected as a reduction in additional paid-in capital in Nasdaq’s Condensed Consolidated Balance Sheets. In connection with Nasdaq’s acquisition of Carpenter Moore, Nasdaq will pay NASD approximately $1.5 million in the fourth quarter of 2005, as settlement of all of NASD’s claims on Nasdaq Insurance Agency’s future cash flows. See “Acquisition of Carpenter Moore,” of Note 3, “Significant and Related Party Transactions,” for further discussion.

Nasdaq Insurance Agency

In December 2002, Nasdaq purchased NASD’s 50.0% interest in NASD Insurance Agency (subsequently renamed the Nasdaq Insurance Agency). Nasdaq’s consideration for NASD’s 50.0% interest consisted of an upfront payment of $0.5 million and up to $5.1 million based on Nasdaq Insurance Agency’s stream of contingent cash flow through 2016 (which reflects an agreement in 2004 between Nasdaq and NASD to extend the term from 2011 to 2016). Nasdaq will pay NASD up to: (a) 20.0% of Nasdaq Insurance Agency’s cash flows until Nasdaq has paid NASD $2.3 million from cash flows; (b) 10.0% of Nasdaq Insurance Agency’s cash flows until Nasdaq has paid NASD a cumulative amount of $3.0 million from cash flows; (c) 5.0% of Nasdaq Insurance Agency’s cash flows until the earlier to occur of Nasdaq paying NASD the full cumulative amount of $5.1 million from cash flows or December 31, 2016. As of June 30, 2005, Nasdaq has recorded $0.5 million in dividends to NASD for Nasdaq Insurance Agency’s cash flows. The dividends were reflected as a reduction in additional paid-in capital on Nasdaq’s Condensed Consolidated Balance Sheets.

As previously discussed, on January 1, 2005, Nasdaq purchased the remaining 50.0% interest in Nasdaq Insurance Agency from AIG for nominal consideration. See “Business Developments and Combinations-Purchase of Nasdaq Insurance Agency,” of Note 3, “Significant Transactions,” for further discussion.

Nasdaq Insurance Agency

In December 2002, Nasdaq purchased NASD’s 50.0% interest in NASD Insurance Agency (subsequently renamed the Nasdaq Insurance Agency, LLC). Nasdaq’s consideration for NASD’s 50.0% interest consisted of an upfront payment of $0.5 million and up to $5.1 million based on NIA’s stream of contingent cash flow through 2016 (which reflects an agreement in 2004 between Nasdaq and NASD to extend the term from 2011 to 2016). Nasdaq will pay NASD up to: (a) 20% of NIA’s cash flows until Nasdaq has paid NASD $2.3 million from cash flows; (b) 10% of NIA’s cash flows until Nasdaq has paid NASD a cumulative amount of $3.0 million from cash flows; (c) 5% of NIA’s cash flows until the earlier to occur of Nasdaq paying NASD the full cumulative amount of $5.1 million from cash flows or December 31, 2016. As of March 31, 2005, Nasdaq has recorded $0.4 million in dividends to NASD for NIA’s cash flows. The dividend was reflected as a reduction in additional paid-in capital on Nasdaq’s Condensed Consolidated Balance Sheets.

As previously discussed, on January 1, 2005, Nasdaq purchased the remaining 50.0% interest in the NIA from AIG NJV, Inc. for nominal consideration. See “Purchase of NIA,” of Note 2, “Significant Transactions,” for further discussion.

Nasdaq Insurance Agency

In December 2002, Nasdaq purchased NASD’s 50.0% interest in NASD Insurance Agency (subsequently renamed the Nasdaq Insurance Agency, LLC). Nasdaq’s consideration for NASD’s 50.0% interest consisted of an upfront payment of $0.5 million and up to $5.1 million based on NIA’s stream of contingent cash flow through 2016 (which reflects an agreement in 2004 between Nasdaq and NASD to extend the term from 2011 to 2016). Nasdaq will pay NASD up to: (a) 20% of NIA’s cash flows until Nasdaq has paid NASD $2.3 million from cash flows; (b) 10% of NIA’s cash flows until Nasdaq has paid NASD a cumulative amount of $3.0 million from cash flows; (c) 5% of NIA’s cash flows until the earlier to occur of Nasdaq paying NASD the full cumulative amount of $5.1 million from cash flows or December 31, 2016. As of March 31, 2005, Nasdaq has recorded $0.4 million in dividends to NASD for NIA’s cash flows. The dividend was reflected as a reduction in additional paid-in capital on Nasdaq’s Condensed Consolidated Balance Sheets.

As previously discussed, on January 1, 2005, Nasdaq purchased the remaining 50.0% interest in the NIA from AIG NJV, Inc. for nominal consideration. See “Purchase of NIA,” of Note 2, “Significant Transactions,” for further discussion.

Nasdaq Insurance Agency

In December 2002, Nasdaq purchased NASD’s 50.0% interest in NASD Insurance Agency (subsequently renamed the Nasdaq Insurance Agency, LLC). Nasdaq’s consideration for NASD’s 50.0% interest consisted of an upfront payment of $0.5 million and up to $5.1 million based on NIA’s stream of contingent cash flow through 2016 (which reflects an agreement in 2004 between Nasdaq and NASD to extend the term from 2011 to 2016). Nasdaq will pay NASD up to: (a) 20% of NIA’s cash flows until Nasdaq has paid NASD $2.3 million from cash flows; (b) 10% of NIA’s cash flows until Nasdaq has paid NASD a cumulative amount of $3.0 million from cash flows; (c) 5% of NIA’s cash flows until the earlier to occur of Nasdaq paying NASD the full cumulative amount of $5.1 million from cash flows or December 31, 2016. As of December 31, 2004, Nasdaq recorded a $0.4 million dividend to NASD for the NIA’s cash flows. The dividend was reflected as a reduction in additional paid-in capital on Nasdaq’s Consolidated Balance Sheets.

On January 1, 2005, Nasdaq purchased the remaining 50.0% interest in the NIA from AIG NJV, Inc. for nominal consideration. On December 31, 2004, Nasdaq entered into a revolving promissory note with the NIA and loaned the agency $2.9 million, which is included in receivables from related parties on the Consolidated Balance Sheets. See Note 23, “Subsequent Events,” for further discussion.