10-K

_________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

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

(Mark One)

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

For the fiscal year ended December 31, 2007

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   1-12043

OPPENHEIMER HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Canada

98-0080034

  (State or other jurisdiction of

(I.R.S. Employer

  incorporation or organization)

Identification No.)

  P.O. Box 2015, Suite 1110

  20 Eglinton Avenue West

  Toronto, Ontario, Canada

M4R 1K8

  (Address of principal executive offices)

(Zip Code)

  Registrant’s Telephone number, including area code: (416) 322-1515

  Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange

  Title of each class

on which registered          

  Class A non-voting shares

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

Title of class

Not Applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes [ ]  No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes [ ]  No [X]

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in  Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ] Accelerated filer [X] Non-accelerated filer [  ]

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 aggregate market value of the voting stock of the Company held by non-affiliates of the Company cannot be calculated in a meaningful way because there is only limited trading in the class of voting stock of the Company. The aggregate market value of the Class A non-voting shares held by non-affiliates of the Company at June 30, 2007 was $676,398,000 based on the closing price of the Class A non-voting shares on the New York Stock Exchange as at June 29, 2007 of $51.50.

The number of shares of the Company’s Class A non-voting shares and Class B voting shares (being the only classes of common stock of the Company) outstanding on February 28, 2008 was 13,490,008 and 99,680 shares, respectively.

DOCUMENTS INCORPORATED BY REFERENCE

The Company’s definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders (to be held on May 5, 2008) to be filed by the Company pursuant to Regulation 14A is incorporated into Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K.

TABLE OF CONTENTS      

Item Number		Page
PART 1
1.	Business	2
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	22
2.	Properties	22
3.	Legal Proceedings	23
4.	Submission of Matters to a Vote of Security Holders	23
PART II
5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
6.	Selected Financial Data	28
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
7A.	Quantitative and Qualitative Disclosures About Market Risk	45
8.	Financial Statements and Supplementary Data	48
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89
9A.	Controls and Procedures	89
9B.	Other Information	90
PART III
10.	Directors and Executive Officers of the Registrant	91
11.	Executive Compensation	91
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	91
13.	Certain Relationships and Related Transactions	91
14.	Principal Accountant Fees and Services	92
PART IV
15.	Exhibits and Financial Statement Schedules	93
	Signatures	94
	Certifications	99

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PART I

Item 1.  BUSINESS

OVERVIEW

Oppenheimer Holdings Inc. (the “Company”), through its operating subsidiaries, is a leading middle-market investment bank and full service investment dealer.  With roots tracing back to 1881, the Company is engaged in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), research, market-making, and investment advisory and asset management services.  The Company owns, directly or through subsidiaries, Oppenheimer & Co., a New York-based securities broker-dealer (“Oppenheimer”), Oppenheimer Asset Management (“OAM”), a New York-based investment advisor, Freedom Investments Inc.  (“Freedom”), a discount securities broker-dealer based in New Jersey, Oppenheimer Trust Company (“Oppenheimer Trust”), a New Jersey limited purpose ban k, and Evanston Financial Inc. (“Evanston”), an Federal Housing Administration (“FHA”) approved mortgage company based in Pennsylvania (collectively referred to as the “Operating Subsidiaries”).  

On January 14, 2008, the Company acquired CIBC World Markets’ U.S. Investment Banking, Corporate Syndicate, Institutional Sales and Trading, Equity Research, Options Trading and a portion of the Debt Capital Markets business which includes Convertible Bond Trading, Loan Syndication and Trading, High Yield Origination and Trading as well as CIBC Israel Ltd. (the “New Capital Markets Business”). The New Capital Markets Business employs over 600 people and, based on Canadian Imperial Bank of Canada’s  (“CIBC”) most recently published results, produced over $400 million in revenue for the year ended October 31, 2007. The acquisition of related operations in Asia and the UK is expected to close at a later time, subject to regulatory approval. The acquisition significantly increases the Company’s penetration in capital markets activities.

The purchase price for the transaction is comprised of (1) an earn-out based on the annual performance of the combined Capital Markets Division of Oppenheimer  and the acquired businesses for the calendar years 2008 through 2012,(in no case to be less than $5 million per year) to be paid in the first quarter of 2013 (the “Earn-Out Date”). On the Earn-Out Date, 25% of the earn-out will be paid in cash and the balance may be paid, at the Company’s option, in any combination of cash, the Company’s Class A Shares (at the then prevailing market price) and/or debentures to be issued by the Company payable in two equal tranches – 50% one year after the Earn-Out Date and the balance two years after the Earn-Out Date, (2) warrants to purchase 1,000,000 Class A non-voting shares of the Company at $48.62 per share exercisable five years from the January 2008 closing, 3) cash consideration at closing eq ual to the fair market value of certain inventories in the amount of $48.2 million, and (4) a payment at closing in the amount of $2.5 million for office facilities. The acquisition will be accounted for using the purchase method. For more information on the acquisition, see (416) 643-5570 20 to the Company’s consolidated financial statements for the year ended December 31, 2007 included in Item 8.

The Company’s principal place of business is at 20 Eglinton Avenue West, Suite 1110, Toronto, Ontario, Canada M4R 1K8 and its telephone number is (416) 322-1515. The Company’s Internet address is www.opco.com. The Company makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other Securities Exchange Commission (“SEC”) filings

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and all amendments to those reports within 24 hours of such material being electronically filed with or furnished to the SEC.

PRIVATE CLIENT

Through its Private Client Division, Oppenheimer provides a comprehensive array of financial services through a network of 1,243 financial advisors in 81 offices located throughout the United States and 2 offices in Latin America through local broker-dealers. Clients include high-net-worth individuals and families, corporate executives, and small and mid-sized businesses. As of December 31, 2007, the Company held client assets of approximately $62.3 billion.

Full-Service Brokerage – Oppenheimer offers full-service brokerage covering a broad array of investment alternatives including exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange-traded options and futures contracts, municipal bonds, mutual funds, and unit investment trusts.  A substantial portion of Oppenheimer's revenue is derived from commissions from retail customers through accounts with transaction-based pricing.  Brokerage commissions are charged on investment products in accordance with a schedule, which Oppenheimer has formulated. Discounts are available to customers based on transaction size and volume.

Wealth Planning – Oppenheimer also offers financial and wealth planning services which include individual and corporate retirement solutions, including insurance and annuities products, IRAs and 401(k) plans, U.S. stock plan services to corporate executives and businesses, education saving programs, and trust and fiduciary services to individual and corporate clients.

Margin Lending – Oppenheimer extends credit to its customers, collateralized by securities and cash in the customer’s account, for a portion of the purchase price, and receives income from interest charged on such extensions of credit.  The customer is charged for such margin financing at interest rates derived from Oppenheimer’s “base” rate as defined, as well as the brokers’ loan rate, and LIBOR.

Securities Lending – In connection with both its trading and brokerage activities, Oppenheimer borrows securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date and lends securities to other brokers and dealers for similar purposes.  Oppenheimer earns interest on its cash collateral provided and pays interest on the cash collateral received less a rebate earned for lending securities.

Discount Brokerage – Through Freedom, Oppenheimer offers online equity investing and discount brokerage services to individual investors.    

ASSET MANAGEMENT

Oppenheimer offers a wide range of investment advisory services to its retail and institutional clients through proprietary and third party distribution channels.  Clients include high-net-worth individuals and families, foundations and endowments, and trust and pension funds.  Asset management capabilities include equity, fixed income, large-cap balanced and alternative investments, which are offered through vehicles such as privately managed accounts, and retail and institutional separate accounts.  At December 31, 2007, Oppenheimer and OAM had approximately $17.5 billion of client assets under management.

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Separate Managed Accounts – Through its Consulting Group, Oppenheimer provides clients with objective, third-party managed wrap fee-based programs, including two separate account programs: Investment Advisory Services (IAS) and Strategic Asset Review (STAR) and a long-term strategic asset allocation program, Portfolio Advisory Services (“PAS”), that utilizes mutual funds as the investment vehicle.

Investment Advisory Services – Oppenheimer Investment Advisors (OIA) offers internal portfolio managers servicing high-net-worth individuals, retirement plans, endowments, foundations and trusts using equity and fixed income strategies.

Discretionary Portfolio Management – Through its Omega, Fahnestock Asset Management, and Alpha programs, Oppenheimer offers discretionary investment management wrap programs with a client-focused approach to money management servicing high-net-worth individuals and families, endowments and foundations and institutions.

Fee-Based Non-Discretionary Accounts – Oppenheimer’s Preference Program allows clients to pay an advisory fee on a quarterly basis with no commissions or additional charges for transactions. The program includes features like initial portfolio consultation, quarterly performance reporting and periodic consultation.

Institutional Investment Management – Oppenheimer Investment Management (OIM) provides solutions to institutional investors including: Taft-Hartley Funds, Public Pension Funds, Corporate Pension Funds, and Foundations and Endowments.

Alternative Investments – Oppenheimer offers high-net-worth and institutional investors the opportunity to participate in a wide range of non-traditional investment strategies. Strategies include single manager, fund of funds and private equity vehicles. The Company, as general partner in these investments, typically earns 1% to 2% in management fees and 20% performance (or incentive) fees from these funds.

CAPITAL MARKETS

Investment Banking

Oppenheimer employs over 200 investment banking professionals throughout the United States, and through arrangements with CIBC, in Europe and Asia, who are organized into industry, product and geographic coverage groups in order to maximize their extensive network of relationships and extensive product and industry knowledge. Industry coverage groups include Aerospace and Defense, CleanTech,  Energy, Financial & Business Services, Healthcare, Industrial, Media & Communications, Private Equity and Venture Capital Sponsors, Retail & Consumer, Technology, and Oil Service & Infrastructure. The January 2008 acquisition of the New Capital Markets Business brings extensive investment banking expertise from CIBC.

Financial Advisory – Oppenheimer advises buyers and sellers on sales, divestitures, mergers, acquisitions, tender offers, privatizations, restructurings, spin-offs and joint ventures. With experience facilitating and financing acquisitions and recapitalizations, Oppenheimer executes both buy-side and sell-side mandates. Oppenheimer provides dedicated senior banker focus to clients throughout the financial advisory process, which leverages its industry knowledge, extensive relationships, and capital markets expertise.

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Equities Underwriting – Oppenheimer provides capital raising solutions for corporate clients through initial public offerings, follow-on offerings, equity-linked offerings, private investments in public entities, and private placements with a focus on emerging companies in growth industries, including technology, telecommunications, financial institutions, consumer products, restaurants, energy, healthcare, and biotechnology.

Debt Underwriting – Oppenheimer offers a full range of debt financing for growing and middle market companies and financial sponsors. Oppenheimer focuses on structuring and distributing public and private debt in leveraged finance transactions, including leveraged buy-outs, acquisitions, growth capital financings, recapitalizations, and Chapter 11 exit financings. Oppenheimer specializes in high yield debt and fixed and floating-rate senior and subordinated debt. Its loan finance company, OPY Credit Corp., in its joint venture with CIBC, has the ability to commit capital for the syndication of transactions that range up to $500 million.

Equities Capital Markets

Institutional Equity Sales and Trading – Oppenheimer provides listed block trades, NASDAQ market making, bulletin board trading, capital markets/origination, risk arbitrage, statistical arbitrage, special situations, pair trades, relative value, and portfolio and electronic trading. In addition, Oppenheimer offers a suite of quantitative and algorithmic trading solutions as well as access to liquidity in order to access the global markets.  Oppenheimer’s clients include domestic and international investors such as investment advisors, banks, mutual funds, insurance companies, hedge funds, and pension and profit sharing plans. These investors normally purchase and sell securities in block transactions, the execution of which requires focused marketing and trading expertise. Oppenheimer is one of the leading firms in the execution of equity block transactions and believes that its institutional customers are attracted by the quality of its execution (measured by volume, timing and price) and its competitive commission rates, which are negotiated on the basis of market conditions, the size of the particular transaction and other factors.

Equity Research – Oppenheimer has built and expanded its research platform through its January 2008 acquisition of the New Capital Markets Business and now employs over 50 senior analysts and over 150 equity and convertible research professionals covering over 750 companies worldwide, and over 60 dedicated equity research sales professionals. Oppenheimer provides regular research reports, notes, earnings updates as well as numerous research conferences where the management of covered companies can meet with investors in a group format as well as in one-on-one meetings. Oppenheimer’s analysts use a variety of quantitative and qualitative tools, integrating field analysis, proprietary channel checks and ongoing dialogue with the managements of the companies they cover.

Equity Options & Derivatives – Oppenheimer offers extensive equity and index options for investors seeking to manage risk and optimize returns within the equities market. Oppenheimer’s experienced professionals have extensive expertise in listed and over-the-counter transactions and products. In addition, the Company focuses on serving the diverse needs of its institutional, corporate and private client base across multiple product lines, offering listed options, and OTC options.

Convertible Bonds – Oppenheimer commits dedicated personnel to serve the convertible markets, offering expertise in the sales, trading and analysis of U.S. domestic and international convertible bonds, convertible preferred shares, warrants and

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structured products, with a focus on minimizing transaction costs and maximizing liquidity. In addition Oppenheimer offers hedged (typically long convertible bonds and short equities) positions to its clients on an integrated trade basis. In addition, Oppenheimer trades such positions for its own account as well as to accommodate client transactions.

Debt Capital Markets

Fixed Income High Yield – Oppenheimer also trades and positions non-investment grade public and private debt securities, as well as distressed securities both for its own account as well as for institutional clients qualified to sustain the risks associated with such securities.  Oppenheimer also publishes research with respect to a number of such securities. Risk of loss upon default by the borrower is significantly greater with respect to unrated or less than investment grade corporate debt securities than with other corporate debt securities. These securities are generally unsecured and are often subordinated to other creditors of the issuer. These issuers usually have high levels of indebtedness and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than are investment grade issuers. There is a limited market for some of these securities and mark et quotes are available only from a small number of dealers.

Fixed Income Research – Oppenheimer has expanded its research platform with its January 2008 acquisition of the New Capital Markets Business and currently has seven fixed income research professionals covering over 150 companies and eight dedicated fixed income sales professionals. Oppenheimer’s fixed income research supports its investment banking and sales and trading activities. Its research is designed to identify high yield issues that provide a combination of high internal returns plus capital appreciation over the short to medium term.

Public Finance – Oppenheimer’s Public Finance Department advises and raises capital for state and local governments, public agencies, private developers and other borrowers.  The success of this group has been built by developing and executing capital financing plans that meet our clients’ objectives and by maintaining strong national institutional and retail securities distribution capabilities.  Public Finance bankers have expertise in specific areas, including local governments and municipalities, primary and secondary schools, post secondary and private schools, state and local transportation entities, health care institutions, senior-living facilities, public utility providers, and project financing.

Municipal Trading – Oppenheimer has municipal trading desks located throughout the country that serve retail financial advisors within their regions as well as mid-tier institutional accounts.  These desks serve Oppenheimer’s financial advisors in supporting their high net worth clients’ needs for taxable and non-taxable municipal securities.

OPPENHEIMER TRUST COMPANY

Oppenheimer Trust offers a wide variety of trust services to the clients of Oppenheimer. This includes custody services, advisory services and specialized servicing options for clients.  At December 31, 2007, Oppenheimer Trust held assets of approximately $1.4 billion.

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EVANSTON FINANCIAL INC.

Evanston is an FHA approved mortgage originator and servicing company offering a variety of mortgage services to developers of commercial properties including apartments offering FHA approved rentals, elderly housing and nursing homes. Evanston also maintains a mortgage servicing portfolio in which it collects mortgage payments from mortgagees and passes these payments on to mortgage holders, charging a fee for its services.

ADMINISTRATION AND OPERATIONS

Administration and operations personnel are responsible for the processing of securities transactions; the receipt, identification and delivery of funds and securities; the maintenance of internal financial controls; accounting functions; custody of customers' securities; the handling of margin accounts for Oppenheimer and its correspondents; and general office services.             

Oppenheimer executes its own and certain of its correspondents' securities transactions on all United States exchanges of which it is a member and in the over-the-counter market. Oppenheimer clears all of its securities transactions (i.e., it delivers securities that it has sold, receives securities that it has purchased and transfers related funds) through its own facilities and through memberships in various clearing corporations and custodian banks.  Oppenheimer is also a futures commission merchant and clears commodities transactions on a number of commodities exchanges for its clients that trade commodities through a correspondent firm on an omnibus basis.

Subsequent to its acquisition of the New Capital Markets Business, Oppenheimer has contracted with CIBC to clear certain institutional and proprietary transactions through CIBC until Oppenheimer is prepared to assume this transaction processing and related technology platforms from CIBC.

EMPLOYEES

At December 31, 2007, the Company employed 2,928 employees of which 1,665 were registered personnel, including approximately 1,243 financial advisers. These numbers changed effective January 14, 2008 with the acquisition of the New Capital Markets Business described under Item 1, Business.

COMPETITION

Oppenheimer encounters intense competition in all aspects of the securities business and competes directly with other securities firms, a significant number of which have substantially greater resources and offer a wider range of financial services. In addition, there has recently been increasing competition from other sources, such as commercial banks, insurance companies and certain major corporations that have entered the securities industry through acquisition, and from other entities. Additionally, foreign-based securities firms and commercial banks regularly offer their services in performing a variety of investment banking functions including: merger and acquisition advice, leveraged buy-out financing, merchant banking, and bridge financing, all in direct competition with U.S. broker-dealers. These developments have led to the creation of a greater number of

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integrated financial services firms that may be able to compete more effectively than Oppenheimer for investment funds by offering a greater range of financial services.

Oppenheimer believes that the principal factors affecting competition in the securities industry are the quality and ability of professional personnel and relative prices of services and products offered. Oppenheimer and its competitors employ advertising and direct solicitation of potential customers in order to increase business and furnish investment research publications in an effort to retain existing, and attract potential, clients. Many of Oppenheimer's competitors engage in these programs more extensively than does Oppenheimer.

BUSINESS CONTINUITY PLAN

The Company has a business continuity plan in place which is designed to enable it to continue to operate and provide services to its clients under a variety of circumstances in which one or more events may make one or more firm operating locations unavailable due to a local, regional or national emergency, or due to the failure of one or more systems that the Company relies upon to provide the services that it routinely provides to its clients, employees and various business partners and counterparties. The plan covers all business areas of the Company and provides contingency plans for technology, staffing, equipment, and communication to employees, clients and counter-parties. While the plan is intended to cover many types of business continuity issues, there could be certain occurrences, which by their very nature are unpredictable, and can occur in a manner that is outside of our planning guidelines and could render the Company’s estimates of timing for recovery inaccurate. Under all circumstances it is the Company’s intention to remain in business and to provide ongoing investment services, as if no disruption had occurred.

Oppenheimer maintains its headquarters and principal operating locations in New York City. In order to provide continuity for these facilities, the Company maintains back-up facilities (information technology, operations and data processing) in another state. These facilities are maintained in multiple locations and, in addition, the Company occupies significant office facilities in locations around the United States, which could in an emergency, house dislocated staff members for a short or intermediate time frame. Oppenheimer relies on public utilities for power and phone services, industry specific utilities for ultimate custody of client securities and market operations, and various industry vendors for services that are significant and important to our business for the execution, clearance and custody of client holdings, for the pricing and valuing of client holdings, and for permitting our Company’s employees to communicate on an efficient basis. All of these service providers have assured the Company that they have made plans for providing continued service in the case of an unexpected event that might disrupt their services.

REGULATION

Oppenheimer is a member firm of the New York Stock Exchange, Inc. ("NYSE"), the Financial Industry Regulatory Authority (“FINRA”), the American Stock Exchange, Inc. ("AMEX"), the Chicago Stock Exchange Incorporated ("CSE"), the Chicago Board Options Exchange, Inc. ("CBOE"), the New York Futures Exchange, Inc. ("NYFE"), the National Futures Association ("NFA") and the Securities Industry and Financial Markets Association ("SIFMA"). In addition, Oppenheimer has satisfied the requirements of the Municipal Securities Rulemaking Board ("MSRB") for effecting customer transactions in municipal

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securities. Freedom is a member of FINRA. Oppenheimer is registered in Ontario, Canada as an International Dealer.

The securities industry in the United States is subject to extensive regulation under both federal and state laws. The SEC is the federal agency charged with administration of the federal securities laws. Much of the regulation of broker-dealers has been delegated to self-regulatory organizations (“SROs”) such as the Financial Industry Regulatory Authority (“FINRA”) (resulting from the merger in 2007 of the Oversight and Enforcement Divisions of the NYSE and the National Association of Securities Dealers, Inc. (“NASD”)) and the National Futures Association. FINRA has been designated Oppenheimer and Freedom’s primary regulator with respect to securities and option trading activities and the National Futures Association has been designated Oppenheimer’s primary regulator with respect to commodities activities. Self-regulatory organizations adopt rules (subject to approval by the SEC or the Commodities Futures Trading Commission ("CFTC"), as the case may be) governing the industry and conduct periodic examinations of Oppenheimer and Freedom's operations. Securities firms are also subject to regulation by state securities commissions in the states in which they do business. Oppenheimer and Freedom are each registered as a broker-dealer in the 50 states and Puerto Rico. Oppenheimer is also registered as an International Dealer in Canada.

The regulations to which broker-dealers are subject cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, the use and safekeeping of customers' funds and securities, capital structure of securities firms, record keeping and the conduct of directors, officers and employees. The SEC has adopted rules requiring underwriters to ensure that municipal securities issuers provide current financial information and imposes limitations on political contributions to municipal issuers by brokers, dealers and other municipal finance professionals. Additional legislation, changes in rules promulgated by the SEC, the CFTC and by self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of broker-dealers. The SEC, self-regulatory organizations (including FINRA) and state secu rities commissions may conduct administrative proceedings which can result in censure, fine, issuance of cease and desist orders or suspension or expulsion of a broker-dealer, its officers, or employees. These administrative proceedings, whether or not resulting in adverse findings, can require substantial expenditures and can have an adverse impact on the reputation of a broker-dealer. The principal purpose of regulating and disciplining broker-dealers is to protect customers and the securities markets rather than to protect creditors and shareholders of broker-dealers. Effective April 1, 2006, rules adopted by the NYSE (Rule 342) and NASD (Rules 3012 and 3013) (now FINRA) require that the CEO certify annually that there is a process in place to monitor the effectiveness of the Company’s adherence to rules and procedures related to the operation of its business.

Regulation NMS and Regulation SHO, passed in recent years, by the SEC have substantially affected the trading of equity securities and may impact the Company’s business. These regulations are intended to increase transparency in the markets and have acted to further reduce spreads and with competition from electronic marketplaces to reduce commission rates paid by institutional investors.

The SEC has implemented rules designed to strengthen existing prohibitions relating to late trading of mutual funds and to enhance required disclosure of market timing and pricing policies with respect to mutual fund practices. The SEC also adopted and proposed additional rules requiring corporate governance changes including the

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adoption of compliance policies and the requirement that funds and investment advisors designate a chief compliance officer.

Oppenheimer is also subject to regulation by the SEC and under certain state laws in connection with its business as an investment advisor and in connection with its research department activities.

Margin lending by Oppenheimer is subject to the margin rules of the Board of Governors of the Federal Reserve System and FINRA. Under such rules, Oppenheimer is limited in the amount it may lend in connection with certain purchases of securities and is also required to impose certain maintenance requirements on the amount of securities and cash held in margin accounts. In addition, Oppenheimer may (and currently does) impose more restrictive margin requirements than required by such rules.

The Sarbanes-Oxley Act of 2002 effected significant changes to corporate governance, auditing requirements and corporate reporting. This law generally applies to all companies, including the Company, with equity or debt securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has taken numerous actions, and incurred substantial expenses, in recent years to comply with the Sarbanes-Oxley Act, related regulations promulgated by the SEC and other corporate governance requirements of the NYSE. Management has determined that the Company’s internal control over financial reporting as of December 31, 2007 was effective. See Item 8 under the caption “Management’s Report on Internal Control over Financial Reporting”.

NET CAPITAL REQUIREMENTS

As registered broker-dealers and member firms regulated by FINRA, Oppenheimer and Freedom are subject to certain net capital requirements pursuant to Rule 15c3-1 (the "Net Capital Rule") promulgated under the Exchange Act. The Net Capital Rule, which specifies minimum net capital requirements for registered brokers and dealers, is designed to measure the general financial integrity and liquidity of a broker-dealer and requires that at least a minimum part of its assets be kept in relatively liquid form.

Oppenheimer elects to compute net capital under an alternative method of calculation permitted by the Net Capital Rule. (Freedom computes net capital under the basic formula as provided by the Net Capital Rule.)  Under this alternative method, Oppenheimer is required to maintain a minimum "net capital", as defined in the Net Capital Rule, at least equal to 2% of the amount of its "aggregate debit items" computed in accordance with the Formula for Determination of Reserve Requirements for Brokers and Dealers (Exhibit A to Rule 15c3-3 under the Exchange Act) or $250 thousand, whichever is greater. "Aggregate debit items" are assets that have as their source transactions with customers, primarily margin loans. Failure to maintain the required net capital may subject a firm to suspension or expulsion by FINRA, the SEC and other regulatory bodies and ultimately may require its liquidation. T he Net Capital Rule also prohibits payments of dividends, redemption of stock and the prepayment of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate debit items (or 7% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater) and payments in respect of principal of subordinated indebtedness if net capital thereafter would be less than 5% of aggregate debit items (or 6% of the funds required to be segregated pursuant to the Commodity Exchange Act and the regulations thereunder, if greater). The Net Capital Rule also provides that the total outstanding principal amounts of a broker-dealer's indebtedness under certain subordination agreements (the proceeds of which are included in its net

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capital) may not exceed 70% of the sum of the outstanding principal amounts of all subordinated indebtedness included in net capital, par or stated value of capital stock, paid

in capital in excess of par, retained earnings and other capital accounts for a period in excess of 90 days.

Net capital is essentially defined in the Net Capital Rule as net worth (assets minus liabilities), plus qualifying subordinated borrowings minus certain mandatory deductions that result from excluding assets that are not readily convertible into cash and deductions for certain operating charges. The Net Capital Rule values certain other assets, such as a firm's positions in securities, conservatively. Among these deductions are adjustments (called "haircuts") in the market value of securities to reflect the possibility of a market decline prior to disposition.

Compliance with the Net Capital Rule could limit those operations of the brokerage subsidiaries of the Company that require the intensive use of capital, such as underwriting and trading activities and the financing of customer account balances, and also could restrict the Company's ability to withdraw capital from its brokerage subsidiaries, which in turn could limit the Company's ability to pay dividends, repay debt and redeem or purchase shares of its outstanding capital stock. Under the Net Capital Rule, broker-dealers are required to maintain certain records and provide the SEC with quarterly reports with respect to, among other things, significant movements of capital, including transfers to a holding company parent or other affiliate. The SEC and/or SROs may in certain circumstances restrict the Company's brokerage subsidiaries' ability to withdraw excess net capital and transfer it to the Company or to other of t he Operating Subsidiaries or to expand the Company’s business.

OTHER REQUIREMENTS

On July 31, 2006, the Company issued a Senior Secured Credit Note in the amount of $125.0 million at a variable interest rate based on the London Interbank Offering Rate (LIBOR) with a seven-year term to a syndicate led by Morgan Stanley Senior Funding Inc., as agent. Minimum principal repayments equal to 0.25% per quarter are required plus prepayments of principal based on a portion of the Company’s excess cash flow, the net cash proceeds of asset sales, tax refunds over certain limits, awards over certain limits in connection with legal actions or ‘takings’, and debt issuances or other liability financings. In accordance with the Senior Secured Credit Note, the Company has provided certain covenants to the lenders with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio driven from EBITDA and minimum net capital requirements with respect to Oppenheimer. On December 12, 2007, in contemplation of the acquisition of the New Capital Markets Business, certain terms of the Senior Secured Credit Note were amended. In the Company’s view, the most restrictive of the covenants requires that the Company maintain a maximum leverage ratio of 2.0 (total long-term debt divided by EBITDA). At December 31, 2007, the Company was in compliance with the covenants. The effective interest rate on the Senior Secured Credit Note for the year ended December 31, 2007 was 7.84%. The outstanding balance payable under the Senior Secured Credit Note at December 31, 2007 was $83.3 million.

In accordance with the Senior Secured Credit Note, the Company and virtually all of its non-broker-dealer subsidiaries have provided guarantees to the lending group. These guarantees are supported by liens on substantially all of the assets of these non-broker-dealer subsidiaries.

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On January 14, 2008, the Company issued a Subordinated Note in the amount of $100 million in connection with its purchase of the New Capital Markets Business, to support the newly acquired businesses. The Subordinated Note is due in a single lump-sum payment after five years and is structurally subordinated in right of payment to the Senior Secured Credit Note. The Subordinated Note has a second lien interest in the collateral held by the Senior Secured Credit Note group and has default provisions similar to the Senior Secured Credit Note. The interest rate on the Subordinated Note is tied to a variable interest rate based on LIBOR.

In addition, CIBC is providing a warehouse facility, initially up to $1.5 billion, to a newly formed U.S. entity to finance loans of middle market companies that will be syndicated and distributed by the Loan Syndication and Loan Trading Groups being acquired. Underwriting of loans pursuant to the warehouse facility will be subject to joint credit approval of Oppenheimer and CIBC.

Oppenheimer is a member of the Securities Investor Protection Corporation ("SIPC"), which provides, in the event of the liquidation of a broker-dealer, protection for customers' accounts (including the customer accounts of other securities firms when it acts on their behalf as a clearing broker) held by the firm of up to $500 thousand for each customer, subject to a limitation of $100 thousand for claims for cash balances. SIPC is funded through assessments on registered broker-dealers. In addition, Oppenheimer has purchased additional “excess SIPC” policy protection from Lloyds of London of an additional $99.5 million (and $1 million for claims for cash balances) per customer.  The “excess SIPC” policy has an aggregate limit of liability of $400.0 million.  The Company has entered into an indemnity agreement with Lloyds of London pursuant to which the Company has agreed to indemni fy Lloyds of London for losses incurred by Lloyds under the policy.

Item 1A. RISK FACTORS

The Company’s business and operations are subject to numerous risks. The material risks and uncertainties that management believes affect the Company are described below. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s business operations. If any of the following risks actually occur, the Company’s financial condition and results of operations could be materially and adversely affected.

Developments in market and economic conditions have in the past adversely affected, and may in the future adversely affect, the Company’s business and profitability.

Performance in the financial services industry is heavily influenced by the overall strength of economic conditions and financial market activity, which generally have a direct and material impact on the Company’s results of operations and financial condition. These conditions are a product of many factors, which are mostly unpredictable and beyond the Company’s control, and may affect the decisions made by financial market participants. Uncertain or unfavorable market or economic conditions could result in reduced transaction volumes, reduced revenue and reduced profitability in any or all of the Company’s principal businesses. For example:

·

The Company’s investment banking revenue, in the form of underwriting, placement and financial advisory fees, is directly related to the volume and value of the transactions as well as the Company’s role in these

12

transactions. In an environment of uncertain or unfavorable market or economic conditions, the volume and size of capital-raising transactions and acquisitions and dispositions typically decrease, thereby reducing the demand for the Company’s investment banking services and increasing price competition among financial services companies seeking such engagements, which may reduce the amount of business the Company does, the size of underwriting, placement and advisory fees the Company receives and its role in the transactions generating these fees.

·

A downturn in the financial markets may result in a decline in the volume and value of trading transactions and, therefore, may lead to a decline in the revenue the Company generates from commissions on the execution of trading transactions and, in respect of its market-making activities, a reduction in the value of its trading positions and commissions and spreads.

·

Financial markets are susceptible to severe events such as dislocations which may lead to reduced liquidity.  Under these extreme conditions, the Company’s risk management strategies may not be as effective as they might otherwise be under normal market conditions.  In February 2008, the market for auction rate securities began experiencing disruptions by the failure of auctions for preferred stocks issued to leverage closed end funds, municipals backed by tax exempt issuers, and student loans backed by pools of student loans guaranteed by U.S. government agencies.  These auction failures have developed as a result of auction managers or dealers, typically large commercial or investment banks, deciding not to commit their own capital when there is insufficient demand from bidders to meet the supply of sales from sellers.  The Company operates in an agency c apacity in this market and may from time to time hold auction rate securities and therefore be exposed to these liquidity issues.  Additionally, the Company’s customers may be adversely affected by recent developments in this market through the inability to liquidate holdings in these positions or to post these securities as collateral for loans.  These events will likely continue until either the auction managers intervene and provide the requisite liquidity or a secondary market develops for these securities.

·

Changes in interest rates, especially if such changes are rapid, high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company’s businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenues.

·

The Company expects to increasingly commit its own capital to engage in proprietary trading, investing and similar activities, and uncertain or unfavorable market or economic conditions may reduce the value of its positions, resulting in reduced revenues.

The cyclical nature of the economy and this industry also leads to volatility in the Company’s operating margins, due to the fixed nature of a portion of compensation expenses and many non-compensation expenses, as well as the possibility that the Company will be unable to scale back other costs in a timeframe to match any decreases in revenue relating to changes in market and economic conditions. As a result, the Company’s financial performance may vary significantly from quarter to quarter and year to year.

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The Company has experienced significant pricing pressure in areas of its business, which may impair its revenues and profitability.

In recent years the Company has experienced significant pricing pressures on trading margins and commissions in debt and equity trading. In the fixed income market, regulatory requirements have resulted in greater price transparency, leading to increased price competition and decreased trading margins. In the equity market, the Company has experienced increased pricing pressure from institutional clients to reduce commissions, and this pressure has been augmented by the increased use of electronic and direct market access trading, which has created additional competitive downward pressure on trading margins. The trend toward using alternative trading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce the Company’s participation in the trading markets and its ability to access market information, and lead to the creation of new and stronger com petitors. Institutional clients also have pressured financial services firms to alter “soft dollar” practices under which brokerage firms bundle the cost of trade execution with research products and services. Some institutions are entering into arrangements that separate (or “unbundle”) payments for research products or services from sales commissions. These arrangements have increased the competitive pressures on sales commissions and have affected the value the Company’s clients place on high-quality research. Additional pressure on sales and trading revenue may impair the profitability of the Company’s business. Moreover, the Company’s inability to reach agreement regarding the terms of unbundling arrangements with institutional clients who are actively seeking such arrangements could result in the loss of those clients, which would likely reduce the level of institutional commissions. The Company believes that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts they are willing to pay, including by reducing the number of brokerage firms they use, and some of our competitors seek to obtain market share by reducing fees, commissions or margins.

The volume of anticipated investment banking transactions may differ from actual results.

The completion of anticipated investment banking transactions in the Company’s pipeline is uncertain and beyond its control, and its investment banking revenue is typically earned upon the successful completion of a transaction. In most cases the Company receives little or no payment for investment banking engagements that do not result in the successful completion of a transaction. For example, a client’s acquisition transaction may be delayed or terminated because of a failure to agree upon final terms with the counterparty, failure to obtain necessary regulatory consents or board or stockholder approvals, failure to secure necessary financing, adverse market conditions or unexpected financial or other problems in the client’s or counterparty’s business. If the parties fail to complete a transaction on which the Company is advising or an offering in which it is participating , the Company will earn little or no revenue from the transaction. Accordingly, the Company’s business is highly dependent on market conditions as well as the decisions and actions of our clients and interested third parties, and the number of engagements the Company has at any given time is subject to change and may not necessarily result in future revenues.

The ability to attract, develop and retain highly skilled and productive employees is critical to the success of the Company’s business.

The Company faces intense competition for qualified employees from other businesses in the financial services industry, and the performance of its business may suffer to the extent it is unable to attract and retain employees effectively, particularly given the

14

relatively small size of the Company and its employee base compared to some of its competitors. The primary sources of revenue in each of the Company’s business lines are commissions and fees earned on advisory and underwriting transactions and customer accounts managed by its employees, who are regularly recruited by other firms and in certain cases are able to take their client relationships with them when they change firms. Some specialized areas of the Company’s business are operated by a relatively small number of employees, the loss of any of whom could jeopardize the continuation of that business following the employee’s departure.

The Company depends on its senior employees and the loss of their services could harm its business.

The Company’s success is dependent in large part upon the services of its senior executives and employees.  Any loss of service of the CEO may adversely affect the business and operations of the Company. The Company maintains key man insurance on the life of its CEO. If the Company’s senior executives or employees terminate their employment with it and the Company is unable to find suitable replacements in relatively short periods of time, its operations may be materially and adversely affected.

Underwriting and market-making activities may place capital at risk.

The Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell securities it purchased as an underwriter at the anticipated price levels. As an underwriter, the Company is subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings it underwrites. As a market maker, the Company may own large positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may result in greater losses than would be the case if its holdings were more diversified.

Increases in capital commitments in our proprietary trading, investing and similar activities increase the potential for significant losses.

The trend in capital markets is toward larger and more frequent commitments of capital by financial services firms in many of their activities. The acquisition of the New Capital Markets Business in January 2008 is expected to result in an increased commitment of the Company’s own capital to engage in proprietary trading, principal investing and similar activities. The Company’s results of operations for a given period may be affected by the nature and scope of these activities, and such activities will subject the Company to market fluctuations and volatility that may adversely affect the value of its positions, which could result in significant losses and reduce its revenues and profits. In addition, increased commitment of capital will expose the Company to the risk that a counterparty will be unable to meet its obligations, which could lead to financial losses that could adversely a ffect the Company’s results of operations. These activities may lead to a greater concentration of risk, which may cause the Company to suffer losses even when business conditions are generally favorable for others in the industry.

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The Company may make strategic acquisitions of businesses, engage in joint ventures or divest or exit existing businesses, which could cause it to incur unforeseen expense and have disruptive effects on its business but may not yield the benefits it expects.

From time to time, the Company may consider acquisitions of other businesses or joint ventures with other businesses. For example, on January 14, 2008, the Company acquired the New Capital Markets Business. For information on the acquisition, see Note 20 to the Company’s consolidated financial statements for the year ended December 31, 2007 included in Item 8. Any acquisition or joint venture that the Company determines to pursue will be accompanied by a number of risks. After the announcement or completion of an acquisition or joint venture, the Company’s share price could decline if investors view the transaction as too costly or unlikely to improve its competitive position. Costs or difficulties relating to such a transaction, including integration of products, employees, technology systems, accounting systems and management controls, may be difficult to predict accurately and be greater than expected causin g the Company’s estimates to differ from actual results. The Company may be unable to retain key personnel after the transaction, and the transaction may impair relationships with customers and business partners. These difficulties could disrupt the Company’s ongoing business, increase its expenses and adversely affect its operating results and financial condition. In addition, the Company may be unable to achieve anticipated benefits and synergies from the transaction as fully as expected or within the expected time frame. Divestitures or elimination of existing businesses or products could have similar effects.

If the Company is unable to repay its outstanding indebtedness obligations when due, its operations may be materially adversely affected.

At December 31, 2007, the Company had an aggregate indebtedness of approximately $1.7 billion. The Company cannot assure that its operations will generate funds sufficient to repay its existing debt obligations as they come due. The Company’s failure to repay its indebtedness and make interest payments as required by its debt obligations could have a material adverse affect on its operations and financial condition.

The Company is subject to extensive securities regulation and the failure to comply with these regulations could subject it to penalties or sanctions.

The securities industry and the Company’s business are subject to extensive regulation by the SEC, state securities regulators and other governmental regulatory authorities. The Company is also regulated by industry self-regulatory organizations, including the FINRA and the MSRB. The regulatory environment is also subject to change and the Company may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other federal or state governmental regulatory authorities, or self-regulatory organizations. The Company also may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.

Oppenheimer is a registered broker-dealer with the SEC and is primarily regulated by FINRA. Broker-dealers are subject to regulations which cover all aspects of the securities business, including:

·

sales methods and supervision;

·

trading practices among broker-dealers;

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·

use and safekeeping of customers’ funds and securities;

·

anti-money laundering and Patriot Act compliance;

·

capital structure of securities firms;

·

compliance with lending practices (Regulation T);

·

record keeping; and

·

the conduct of directors, officers and employees.

Compliance with many of the regulations applicable to the Company involves a number of risks, particularly in areas where applicable regulations may be subject to varying interpretation. The requirements imposed by these regulators are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with the Company. Consequently, these regulations often serve to limit the Company’s activities, including through net capital, customer protection and market conduct requirements. Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally FINRA, which is the Company’s primary regulatory agency. FINRA adopts rules, subject to approval by the SEC, which govern their members and conduct periodic examinations of member firms’ operations.

If the Company is found to have violated any applicable regulation, formal administrative or judicial proceedings may be initiated against it that may result in:

·

censure;

·

fine;

·

civil penalties, including treble damages in the case of insider trading violations;

·

the issuance of cease-and-desist orders;

·

the deregistration or suspension of our broker-dealer activities;

·

the suspension or disqualification of our officers or employees; or

·

other adverse consequences.

The imposition of any of these or other penalties could have a material adverse effect on our operating results and financial condition. See Item 1 under the caption “Regulation” and Item 7, “Managements’ Discussion and Analysis of Financial Condition and Results of Operations - Regulation”.

Failure to comply with net capital requirements could subject the Company to suspension or revocation by the SEC or suspension or expulsion by FINRA and the NYSE.

Oppenheimer and Freedom are subject to the SEC’s Net Capital Rule which requires the maintenance of minimum net capital. See Item 1 under the caption “Net Capital Requirements”.

Risk of losses associated with securities laws violations and litigation.

Many aspects of the Company’s business involve substantial risks of liability. An underwriter is exposed to substantial liability under federal and state securities laws, other federal and state laws, and court decisions, including decisions with respect to underwriters’ liability and limitations on indemnification of underwriters by issuers. For example, a firm that acts as an underwriter may be held liable for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered or for statements made by its securities analysts or other personnel. In recent years, there has been an increasing incidence of litigation involving the securities industry, including class actions that seek substantial damages. The Company’s underwriting activities will usually involve offerings of the securities of smaller companies, which often

17

involve a higher degree of risk and are more volatile than the securities of more established companies. In comparison with more established companies, smaller companies are also more likely to be the subject of securities class actions, to carry directors and officers liability insurance policies with lower limits or not at all, and to become insolvent. Each of these factors increases the likelihood that an underwriter may be required to contribute to an adverse judgment or settlement of a securities lawsuit.

In the normal course of business, the Operating Subsidiaries have been and continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints relating to our activities as a broker-dealer, as an employer and as a result of other business activities. In general, cases may involve various allegations that employees mishandled customer accounts. The Company believes that, based on our historical experience and the reserves established by the Company, the resolution of the claims presently pending will not have a material adverse effect on the Company’s financial condition. If the Company misjudged the amount of damages that may be assessed against it from pending or threatened claims, or if the Company is unable to adequately estimate the amount of damages that will be assessed against it from claims that arise in the future and reserve accordingly, its financial condition and resu lts of operations may be materially adversely affected.

The value of the Company’s goodwill and intangible assets may become impaired.

A substantial portion of the Company’s assets arise from goodwill and intangibles recorded as a result of business acquisitions it has made. The Company is required to perform a test for impairment of such goodwill and intangible assets, at least annually. If the test resulted in a write-down of goodwill and/or intangible assets, the Company would incur a significant loss.

Severe weather, natural disasters, acts of war or terrorism and other external events could significantly impact the Company’s business.

Severe weather, natural disasters, acts of war or terrorism and other adverse external events could have a significant impact on the Company’s ability to conduct business. Although management has established disaster recovery policies and procedures, the occurrence of any such event could have a material adverse effect on the Company’s business, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations. The Company maintains a disaster recovery site to aid it in reacting to circumstances such as those described above. The plans and preparations for such eventualities including the site itself may not be adequate or effective for their intended purpose.

The Company’s risk management policies and procedures may leave it exposed to unidentified risks or an unanticipated level of risk.

The policies and procedures the Company employs to identify, monitor and manage risks may not be fully effective. Some methods of risk management are based on the use of observed historical market behavior. As a result, these methods may not predict future risk exposures, which could be significantly greater than the historical measures indicate. Other risk management methods depend on evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by the Company. This information may not be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risk requires, among other

18

things, policies and procedures to properly record and verify a large number of transactions and events. The Company cannot give assurances that its policies and procedures will effectively and accurately record and verify this information. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”.

The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational and legal reporting systems. The Company believes that it effectively evaluates and manages the market, credit and other risks to which it is exposed. Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted or fully assured. For example, unexpectedly large or rapid movements or disruptions in one or more markets or other unforeseen developments can have a material adverse effect on the Company’s financial condition and results of operations. The consequences of these developments can include losses due to adverse changes in securities values, decreases in the liquidity of trading positions, higher volatility in earnings, increases in the Company’s credit risk to customers a s well as to third parties and increases in general systemic risk.

Credit risk exposes the Company to losses caused by financial or other problems experienced by third parties.

The Company is exposed to the risk that third parties that owe it money, securities or other assets will not perform their obligations. These parties include:

·

trading counterparties;

·

customers;

·

clearing agents;

·

exchanges;

·

clearing houses; and

·

other financial intermediaries as well as issuers whose securities we hold.

These parties may default on their obligations owed to the Company due to bankruptcy, lack of liquidity, operational failure or other reasons. This risk may arise, for example, from:

·

holding securities of third parties;

·

executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and

·

extending credit to clients through bridge or margin loans or other arrangements.

Significant failures by third parties to perform their obligations owed to the Company could adversely affect its revenue and perhaps its ability to borrow in the credit markets.

The precautions the Company takes to prevent and detect employee misconduct may not be effective and it could be exposed to unknown and unmanaged risks or losses.

The Company runs the risk that employee misconduct could occur. Misconduct by employees could include:

·

employees binding the Company to transactions that exceed authorized limits or present unacceptable risks to the Company;

·

employee theft and improper use of Company property;

·

employees hiding unauthorized or unsuccessful activities from the Company; or

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·

the improper use of confidential information.

These types of misconduct could result in unknown and unmanaged risks or losses to the Company including regulatory sanctions and serious harm to its reputation. The precautions the Company takes to prevent and detect these activities may not be effective. If employee misconduct does occur, the Company’s business operations could be materially adversely affected.

The Company’s information systems may experience an interruption or breach in security.

The Company relies heavily on communications and information systems to conduct its business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in the Company’s customer relationship management, general ledger, and other systems. While the Company has policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage the Company’s reputation, result in a loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations.

The Company continually encounters technological change.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. The Company’s future success depends, in part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Company’s operations. Many of the Company’s competitors have substantially greater resources to invest in technological improvements. The Company may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfull y keep pace with technological change affecting the financial services industry could have a material adverse impact on the Company’s business and, in turn, the Company’s financial condition and results of operations.

Risks associated with the Company’s stock.   

The Company’s stock price can be volatile.

Stock price volatility may make it difficult for an investor to resell the Company’s Class A non-voting shares (the “Class A Shares”) when wanted and at prices deemed attractive. The Company’s stock price can fluctuate significantly in response to a variety of factors including, among other things:

·

actual or anticipated variations in quarterly results of operations;

·

recommendations by securities analysts;

·

operating and stock price performance of other companies that investors deem comparable to the Company;

·

news reports relating to trends, concerns and other issues in the financial services industry;

·

perceptions in the marketplace regarding the Company and/or its competitors;

·

new technology used, or services offered, by competitors;

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·

significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors;

·

failure to integrate acquisitions or realize anticipated benefits from acquisitions; and

·

the occurrence of any of the other events described in these Risk Factors.

General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause the Company’s stock price to decrease regardless of operating results.

The trading volume in the Company’s Class A Shares is less than that of larger financial services companies.

Although the Company’s Class A Shares are listed for trading on the NYSE, the trading volume in its Class A Shares is less than that of larger financial services companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of the Company’s Class A Shares at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which the Company has no control. Given the lower trading volume of the Company’s Class A Shares, significant sales of the Company’s Class A Shares, or the expectation of these sales, could cause the Company’s stock price to fall.

The Company issues two classes of stock.

The Company issues two classes of shares, Class A Shares and Class B voting shares (“Class B Shares”). At December 31, 2007, there were 99,680 Class B voting shares outstanding compared to 13,266,596 Class A Shares. The voting power associated with the Class B voting shares will be effectively able to exercise control over all matters requiring shareholder approval, including the election of all directors and approval of significant corporate transactions, and other matters affecting the Company. This voting power may have the effect of delaying or preventing a change in control of the Company. The controlling shareholder(s) may have potential conflicts of interest with other shareholders. See Item 4, “Submission of Matters to a Vote of Security Holders”.

Possible additional issuances of the Company’s stock will cause dilution.

At December 31, 2007, the Company had 13,266,596 Class A Shares outstanding, outstanding employee stock options to purchase a total of 979,475 Class A Shares, as well as outstanding unvested stock awards granted for 143,167 Class A Shares. The Company is further authorized to issue up to 1,251,765 Class A Shares under share-based compensation plans, for which shareholder approval has already been obtained. If the Company issues additional shares, its other shareholders may find their holdings drastically diluted, which if it occurs, means that they will own a smaller percentage of the Company.

As part of the consideration for the New Capital Markets Business acquired on January 14, 2008, the Company issued warrants to purchase 1,000,000 Class A Shares at an exercise price of $48.62 per share on January 14, 2013. The Company may also issue Class A Shares in an uncertain amount as payment for CIBC’s earn-out in the New Capital Markets Business for the five year period ending in 2013.

The business operations that are conducted outside of the United States subject the Company to unique risks.

To the extent the Company conducts business outside the United States, it is subject to risks including, without limitation, the risk that it will be unable to provide effective

21

operational support to these business activities, the risk of non-compliance with foreign laws and regulations, the general economic and political conditions in countries where it conducts business and currency fluctuations. As a result of the acquisition of the New Capital Markets Business on January 14, 2008, the Company has operations in Israel and expects to acquire operations in Asia and the U.K. later this year. If the Company is unable to manage these risks effectively, its reputation and results of operations could be harmed.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

The Company maintains offices at 20 Eglinton Avenue West, Toronto, Ontario, Canada for general administrative activities. Most day-to-day management functions are conducted at the executive offices of Oppenheimer at 125 Broad Street, New York, New York. Through its new office at 300 Madison Ave. (obtained in connection with the acquisition of the New Capital Markets Business), the Company acquired space that serves as the base for most of Oppenheimer's research, trading and investment banking activities, although other offices also have employees who work in these areas. Investment advisory services are offered from the Company’s office at 200 Park Avenue, New York, New York, although other offices also have employees who work in this area. Generally, the offices outside of 125 Broad Street, New York serve as bases for sales representatives who process trades and provide other brokerage services in co-operation with Oppenheimer 's New York office using the data processing facilities located there. The Company maintains an office in Troy, Michigan, which among other things, houses its human resources department. Freedom conducts its business from its offices located in Edison, N.J. Management believes that its present facilities are adequate for the purposes for which they are used and have adequate capacity to provide for presently contemplated future uses.  

The Company and its subsidiaries own no real property, but at December 31, 2007, occupied office space totaling approximately 941.6 thousand square feet in 81 locations under standard commercial terms expiring between 2008 and 2019. If any leases are not renewed, the Company believes it could obtain comparable space elsewhere on commercially reasonable rental terms.

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Item 3.  LEGAL PROCEEDINGS

Many aspects of the Company’s business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in lawsuits creating substantial exposure. The Company is also involved from time to time in governmental and self-regulatory agency investigations and proceedings. There has been an increased incidence of regulatory investigations in the financial services industry in recent years, including customer claims seeking, in total, substantial damages. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Regulatory Environment".

The Company is the subject of customer complaints, has been named as defendant or codefendant in various lawsuits seeking, in total, substantial damages and is involved in certain governmental and self-regulatory agency investigations and proceedings. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. While the ultimate resolution of pending litigation and other matters cannot be currently determined, in the opinion of management, after consultation with legal counsel, the Company has no reason to believe that the resolution of these matters will have a material adverse effect on its financial condition. However, the Company’s results of operations could be materially affected during any period if liabilities in that period differ from prior estimates. The materiality of legal matters to the Company’s future operating results depends on the level of future results of operations as well as the timing and ultimate outcome of such legal matters.

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

The Class B Shares, the Company's only class of voting securities, are not registered under the Exchange Act and are not required to be registered. The Class B Shares are owned by fewer than 500 shareholders of record. Consequently, the Company is not required under Section 14 of the Exchange Act to furnish proxy soliciting material or an information statement to holders of the Class B Shares. However, the Company is required under applicable Canadian securities laws to provide proxy soliciting material, including a management proxy circular, to the holders of its Class B Shares.

Pursuant to the Company's Articles of Incorporation, holders of Class A Shares, although not entitled to vote thereat, are entitled to receive notices of shareholders' meetings and to receive all informational documents required by law or otherwise to be provided to holders of Class B Shares. In addition, holders of Class A Shares are entitled to attend and speak at all meetings of shareholders, except class meetings not including the Class A Shares.

In the event of either a "take-over bid" or an "issuer bid" (as those terms are defined in the Securities Act (Ontario)) being made for the Class B Shares and no corresponding offer being made to purchase Class A Shares, the holders of Class A Shares would have no right under the Articles of Incorporation of the Company or under any applicable statute to require that a similar offer be made to them to purchase their Class A Shares.

No matters were submitted to the Company's shareholders during the fourth quarter of the Company's 2007 fiscal year.

The Company’s next Annual and Special Meeting of Shareholders is scheduled to be held on Monday, May 5, 2008 in Toronto, Ontario, Canada.

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PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY                             SECURITIES

(a) The Company's Class A Shares are listed and traded on the NYSE (trading symbol “OPY”) and were listed on the Toronto Stock Exchange (“TSX”) until August 31, 2007 when the Company voluntarily chose to de-list them. The Class B Shares are not traded on any stock exchange in Canada or the United States and, as a consequence, there is only limited trading in the Class B Shares. The Company does not presently contemplate listing the Class B Shares in the United States on any national or regional stock exchange or on NASDAQ.

The following tables set forth the high and low sales prices of the Class A Shares on the TSX and on the NYSE. Prices provided are in Canadian dollars or U.S. dollars as indicated and are based on data provided by the TSX and the NYSE.

Class A Shares:		TSX		NYSE
		HIGH	LOW	HIGH	LOW
		(Cdn. Dollars)		(U.S. dollars)
2007	1st Quarter	$44.25	$37.00	$37.66	$31.80
	2nd Quarter	$54.92	$38.05	$51.50	$32.53
	3rd Quarter	$61.00	$41.19	$57.50	$36.75
	4th Quarter (1)	-	-	$48.18	$37.05
2006	1st Quarter	$25.25	$22.75	$21.70	$19.71
	2nd Quarter	$33.91	$24.15	$30.50	$20.74
	3rd Quarter	$36.00	$26.92	$31.50	$23.61
	4th Quarter	$40.50	$30.27	$36.24	$26.99

As at December 31, 2007, there were 1,272,656 Class A Shares underlying outstanding options and restricted share awards. Class A Shares underlying all vested options and restricted shares could be sold pursuant to Rule 144 or effective registration statements on Form S-8.

(1) On August 31, 2007, the Company voluntarily de-listed from the TSX.

(b) The following table sets forth information about the shareholders of the Company as at December 31, 2007 as set forth in the records of the Company's transfer agent and registrar:

Class A Shares:

Shareholders of record having addresses in:	Number of shares	Percentage	Number of shareholders of record (1)
Canada	4,220,254	32%	149
United States	9,045,728	68%	174
Other	614	-	6
Total issued and outstanding	13,266,596	100%	329

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 (1) The majority of Class A Shares are held by depositories and intermediaries.

Class B Shares

Shareholders of record having addresses in:	Number of shares	Percentage	Number of shareholders of record (1)
Canada  (1)	97,823	98%	112
United States	1,729	2%	62
Other	128	-	3
Total issued and outstanding	99,680	100%	177

(1) The Company has been informed that 50,975 Class B Shares held by Phase II Financial Limited, an Ontario corporation, are beneficially owned by A.G. Lowenthal, Chairman, CEO and a Director of the Company, a U.S. citizen and resident. See Item 12, "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters".

(c) Dividends

The following table sets forth the frequency and amount of any cash dividends declared on the Company’s Class A and Class B Shares for the fiscal years ended December 31, 2006 and 2007 and the first quarter of 2008.

Type	Declaration date	Record date	Payment date	Amount per share
Quarterly	January 26, 2006	February 10, 2006	February 24, 2006	$0.10
Quarterly	April 27, 2006	May 5, 2006	May 19, 2006	$0.10
Quarterly	July 27, 2006	August 4, 2006	August 18, 2006	$0.10
Quarterly	October 31, 2006	November 10, 2006	November 24, 2006	$0.10
Quarterly	January 25, 2007	February 9, 2007	February 23, 2007	$0.10
Quarterly	April 27, 2007	May 4, 2006	May 18, 2006	$0.10
Quarterly	July 27, 2007	August 10, 2007	August 24, 2007	$0.11
Quarterly	October 25, 2007	November 9, 2007	November 23, 2007	$0.11
Quarterly	January 29, 2008	February 15, 2008	February 29 2008	$0.11

Future dividend policy will depend upon the earnings and financial condition of the Operating Subsidiaries, the Company's need for funds and other factors. Dividends may be paid to holders of Class A Shares and Class B Shares (pari passu), as and when declared by the Company's Board of Directors, from funds legally available therefore.

(d) Share-Based Compensation Plans

The Company has a 2006 Equity Incentive Plan, adopted December 11, 2006 and had a 1996 Equity Incentive Plan, as amended March 10, 2005, which expired on April 18, 2006 (together “EIP”), under which the compensation and stock option committee of the board of directors of the Company has and may grant options to purchase Class A Shares to officers and key employees of the Company and its subsidiaries. Grants of options are made to the Company’s non-employee directors on a formula basis.

Oppenheimer has an Employee Share Plan (“ESP”), under which the compensation and stock option committee of the board of directors of the Company may grant stock awards and restricted stock awards to key management employees of the Company and its subsidiaries.

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The Company’s share-based compensation plans are described in Note 12 to the Company’s consolidated financial statements appearing in Item 8.

(e) Share Performance Graph

   The following graph shows changes over the past five year period of U.S.$100

invested in (1) the Corporation's Class A Shares, (2) the Standard & Poor's 500

Index (S&P 500) and (3) the Standard & Poor’s 500 Diversified Financial Index (S5DIVFI)

GRAPH APPEARS HERE

	2002	2003	2004	2005	2006	2007
Oppenheimer	100	136	103	81	134	169
S&P 500	100	126	138	142	161	167
S5DIVFI	100	126	127	132	145	139

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CERTAIN TAX MATTERS

The following paragraphs summarize certain United States and Canadian federal income tax considerations in connection with the receipt of dividends paid on the Class A and Class B Shares of the Company. These tax considerations are stated in brief and general terms and are based on United States and Canadian law currently in effect. There are other potentially significant United States and Canadian federal income tax considerations and state, provincial or local income tax considerations with respect to ownership and disposition of the Class A and Class B Shares which are not discussed herein. The tax considerations relative to ownership and disposition of the Class A and Class B Shares may vary from taxpayer to taxpayer depending on the taxpayer's particular status. Accordingly, prospective purchasers should consult with their tax advisors regarding tax considerations, which may apply to the particular situation.

United States Federal Income Tax Considerations

Dividends on Class A and Class B Shares paid to citizens or residents of the U.S. or to U.S. corporations (including any Canadian federal income tax withheld) will be subject to U.S. federal income taxation as eligible dividends to the extent paid out of the Company’s earnings and profits, determined under U.S. tax principles, subject to tax at 15%. Such dividends will not be eligible for the deduction for dividends received by corporations (unless such corporation owns by vote and value at least 10% of the stock of the Company, in which case a portion of such dividend may be eligible for such exclusion).

U.S. corporations, U.S. citizens and U.S. residents will generally be entitled, subject to certain limitations, to a credit against their U.S. federal income tax for Canadian federal income taxes withheld from such dividends. Taxpayers may claim a deduction for such taxes if they do not elect to claim such tax credit. No deduction for foreign taxes may be claimed by an individual taxpayer who does not itemize deductions. Because the application of the foreign tax credit depends upon the particular circumstances of each shareholder, shareholders are urged to consult their own tax advisors in this regard.

Canadian Federal Income Tax Considerations

Dividends paid on Class A and Class B Shares held by non-residents of Canada will generally be subject to Canadian withholding tax. This withholding tax is levied at the basic rate of 25%, although this rate may be reduced by the terms of any applicable tax treaty. The Canada - U.S. tax treaty provides that the withholding rate on dividends paid to U.S. residents on Class A and Class B Shares is generally 15%. Dividends paid on Class A and Class B Shares are eligible dividends for Canadian income tax purposes.

Normal Course Issuer Bid

On August 10, 2007, the Company announced that during the year commencing August 14, 2007 it intends to purchase up to 650,000 of its Class A Shares by way of a Normal Course Issuer Bid through the facilities of the NYSE, representing approximately 5% of the outstanding Class A Shares. During the fourth quarter of 2007, the Company did not purchase any shares. The Company did not purchase any Class A Shares in fiscal 2007 pursuant to a Normal Course Issuer Bid. All shares purchased by the Company pursuant to Normal Course Issuer Bids are cancelled.

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Item 6. SELECTED FINANCIAL DATA

The following table presents selected financial information derived from the audited consolidated financial statements of the Company for the five years ended December 31, 2007. The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial statements and notes thereto included elsewhere in this annual report. In 2003, the Company purchased the Oppenheimer Divisions. The 2003 amounts include the assets and liabilities and operating results of the Private Client Division for the entire year and the assets and liabilities and operating results of the Asset Management Division as of and subsequent to June 4, 2003. See also Item 1, “BUSINESS” and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations".

Amounts are expressed in thousands of dollars, except share and per share amounts.

	2007	2006	2005	2004	2003
Revenue	$914,397	$800,823	$679,746	$655,140	$689,993
Net profit	$75,367	$44,577	$22,916	$21,077	$28,696
Net profit per share (1)
- basic	$5.70	$3.50	$1.76	$1.58	$2.26
- diluted	$5.57	$2.76	$1.36	$1.24	$1.65
Total assets	$2,138,241	$2,160,090	$2,184,467	$1,806,199	$1,701,213
Total liabilities	$1,694,261	$1,801,049	$1,876,344	$1,499,316	$1,421,377
Cash dividends per Class A
Share and Class B share	$0.42	$0.40	$0.36	$0.36	$0.36
Shareholders' equity	$443,980	$359,041	$308,123	$306,883	$279,836
Book value per share (1)	$33.22	$27.76	$24.46	$22.91	$21.66
Number of shares of capital stock outstanding	13,366,276	12,934,362	12,595,821	13,396,556	12,919,200

(1)                                                                                                                        

The Class A Shares and Class B Shares are combined because they are of equal rank for purposes of dividends and in the event of a distribution of assets upon liquidation, dissolution or winding up.    

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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto which appear elsewhere in this annual report.  

The Company engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), research, market-making, and investment advisory and asset management services. Its principal subsidiaries are Oppenheimer and OAM. As at December 31, 2007, the Company provided its services from 81 offices in 21 states located throughout the United States and conducted business in 2 offices in Latin America through local broker-dealers. Client assets entrusted to the Company as at December 31, 2007 totaled approximately $62.3 billion. The Company provides investment advisory services through OAM and OIM and Oppenheimer’s Fahnestock Asset Management and OMEGA Group divisions. The Company provides trust services and products through Oppenheimer Trust Company. The Company provides discoun t brokerage services through Freedom and through BUYandHOLD, a division of Freedom. Evanston is engaged in mortgage brokerage and servicing.  At December 31, 2007, client assets under management by the asset management groups totaled $17.5 billion, which includes approximately $14.1 million under the Company’s fee-based programs. At December 31, 2007, the Company employed approximately 2,928 people full time, of whom approximately 1,665 were registered personnel, including approximately 1,243 financial advisors. These numbers changed effective January 14, 2008 with the acquisition of the New Capital Markets Business described under Item 1, Business.

Critical Accounting Estimates

The Company’s accounting policies are essential to understanding and interpreting the financial results reported in the consolidated financial statements. The significant accounting policies used in the preparation of the Company’s consolidated financial statements are summarized in note 1 to those statements. Certain of those policies are considered to be particularly important to the presentation of the Company’s financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain. The following is a discussion of these policies.

 
Financial Instruments

The Company's financial instruments are generally short-term in nature or have variable interest rates and as such their carrying values approximate fair value, with the exception of notes receivable from employees, which are carried at cost.  Where available, the Company uses prices from independent sources such as listed market prices, or broker or dealer price quotations. In addition, even where the value of a security is derived from an independent market price or broker or dealer quote, certain assumptions may be required to determine the fair value. For instance, the Company generally assumes that the size of positions in securities that the Company holds would not be large enough to affect the quoted price of the securities if the Company were to sell them, and that any such sale would happen in an or derly manner. However, these assumptions may be incorrect and the actual value realized upon disposition could be different from the current carrying value.  

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Securities owned, including those pledged and securities sold, but not yet purchased are recorded at estimated fair value on the consolidated balance sheet using quoted market or dealer prices, where available. Gains and losses are recorded in principal transactions on the consolidated statements of income.

Investments, included in securities owned, which have a ready market are valued using quoted market or dealer prices. Investments with no ready market value are stated at estimated fair value as determined in good faith by management. Factors considered in valuing individual investments include available market prices, type of security, purchase price, purchases of the same or similar securities by other investors, marketability, restrictions on disposition, current financial position and operating results of the issuer, and other pertinent information. Management uses its best judgment in estimating the fair value of these investments. There are inherent limitations in any estimation technique. The fair value estimates presented herein are not necessarily indicative of an amount that the Company could realize in a current transaction. Because of inherent uncertainty of valuation, these estimated fair values do not necessarily represent amounts that might be ultimately realized, since such amounts depend on future circumstances and the differences could be material.

Financial instruments used for asset and liability management are recorded on the consolidated balance sheets at fair value based upon dealer quotes and third-party pricing services. The Company utilizes interest rate swap agreements to manage interest rate risk of its variable-rate Senior Secured Credit Note. These swaps have been designated as cash flow hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”.  Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR.

Loans and Allowances for Doubtful Accounts

Customer receivables, primarily consisting of margin loans collateralized by customer-owned securities, are charged interest at rates similar to other such loans made throughout the industry. Customer receivables are stated net of allowance for doubtful accounts (unsecured or partially secured receivables) from customers.

The Company also makes loans or pays advances to financial advisors as part of its hiring process. Reserves are established on these receivables if the financial advisor is no longer associated with the Company and the receivable has not been promptly repaid or if it is determined that it is probable the amount will not be collected.

Legal and Regulatory Reserves

The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. Management considers many factors including, but not limited to: the amount of the claim; specifically in the case of client litigation, the amount of the loss in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and legal precedents and case law as well as the timing of the resolution of such matters. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount i s recorded in the results of that period. The assumptions of management in determining the estimates of reserves may be incorrect and the actual disposition of a legal or regulatory

proceeding could be greater or less than the reserve amount.

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Intangible Assets

Intangible assets arose upon the acquisition, in January 2003, of the U.S. Private Client and Asset Management Divisions of CIBC World Markets Inc. (the “Oppenheimer Divisions”) and are comprised of customer relationships and trademarks and trade names. Customer relationships are carried at $1.2 million (which is net of accumulated amortization of $3.7 million) and are being amortized on a straight-line basis over 80 months commencing in January 2003. Trademarks and trade names, carried at $31.7 million, which are not amortized, are subject to at least an annual test for impairment to determine if the fair value is less than their carrying amount. Trademarks and trade names recorded as at December 31, 2007 have been tested for impairment and it has been determined that no impairment has occurred.

Goodwill  

Goodwill arose upon the acquisitions of Oppenheimer, Old Michigan Corp., Josephthal & Co. Inc., Grand Charter Group Incorporated and the Oppenheimer Divisions. Goodwill is subject to at least an annual test for impairment to determine if the fair value of goodwill of a reporting unit is less than its carrying amount. Goodwill recorded as at December 31, 2007 has been tested for impairment and it has been determined that no impairment has occurred.

Share-Based Compensation Plans

The Company estimates the fair value of share-based awards using the Black-Scholes option-pricing model and applies to it a forfeiture rate based on historical experience. Key input assumptions used to estimate the fair value of share-based awards include the expected term and the expected volatility of the Company’s Class A Shares over the term of the award, the risk-free interest rate over the expected term, and the Company’s expected annual dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive share-based awards.

Income Taxes

The Company estimates taxes payable and records income tax reserves. These reserves are based on historic experience and may not reflect the ultimate liability. The Company monitors and adjusts these reserves as necessary.

Uncertain Tax Positions

In June 2006, the FASB issued Interpretation 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. (“FIN 48”). This interpretation requires that a tax position be recognized only if it is “more likely than not” to be sustained upon examination, including resolution of related appeals or litigation processes, based solely on its technical merits, as of the reporting date. A tax position that meets the “more likely than not” criterion shall be measured at the largest amount of benefit that is more than fifty percent likely of being realized upon ultimate settlement.

The Company adopted the provisions of FIN 48 on January 1, 2007 which resulted in a cumulative adjustment to opening retained earnings in the amount of $823 thousand and a reclassification of deferred tax liabilities in the amount of $6.1 million to liability for unrecognized tax benefits which was included in accounts payable and other liabilities on the consolidated balance sheet. The Company’s uncertain tax positions primarily consisted of an election made under the Internal Revenue Code of 1986, as amended, to limit current recognition of property that was involuntarily converted to money as a result of monetary damages received.  The Company recognizes interest accrued on

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underpayments of income taxes as interest expense and any related statutory penalties as other expenses in its condensed consolidated statement of income. During the year ended December 31, 2007, the Company recorded approximately $676 thousand in interest related to the involuntary conversion of assets.

In the fourth quarter of 2007, the Company effectively settled with the Internal Revenue Service (“IRS”) related to the involuntary conversion of assets as part of the IRS’s limited scope examination of the 2003 – 2005 tax period without a material impact to the Company’s effective income tax rate. As such, the tax position is no longer uncertain at December 31, 2007.

Due to its retail branch network, the Company is subject to tax examinations in many state and local jurisdictions.  Tax years under examination vary by jurisdiction and it is not uncommon to have many examinations open at any given time.  Currently, tax examinations are ongoing in New York City (1998 – 2000), New Jersey (2002 – 2005), Florida (2004 – 2006) and Michigan (2002 – 2005).  The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions resulting from these and subsequent years’ examinations.  The Company has established tax reserves that it believes are sufficient in relation to possible additional assessments.  The Company continuously assesses the adequacy of these reserves and believes that the resolution of such matters will not have a material effect on the consolidated balance sheet, although a resolution coul d have a material effect on the Company’s consolidated statement of income for a particular period and on the Company’s effective income tax rate for any period in which resolution occurs. The decrease in the effective tax rate for the year ended December 31, 2007 was a result of favorable resolutions of tax matters during the period.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Amounts are expressed in thousands of dollars.

Balance at January 1, 2007	$ 823
Tax positions taken related to the current year	0
Tax positions taken related to prior years	676
Settlements with taxing authorities	(1,499)
Lapse of applicable statute of limitations	0
Balance at December 31, 2007	$0

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New Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), Fair Value Measurements, which provides expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. In addition, SFAS 157 prohibits recognition of “block discounts” for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years with early adoption permitted. T he Company has determined that adoption of SFAS 157 will not have a material impact on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115, which permits entities to choose to measure many financial instruments and certain other items at fair value.  SFAS 159 provides entities with the option to mitigate volatility in reported earnings by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  In addition, SFAS 159 allows entities to measure eligible items at fair value at specified election dates and to report unrealized gains and losses on items for which the fair value option has been elected in earnings.  SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years with early adoption permitted provided that the entity also elects to apply the provisions of SFAS 157. The Company has determined that adoption of SFAS 159 will not have a material impact on its consolidated financial statements.

Business Environment

The securities industry is directly affected by general economic and market conditions, including fluctuations in volume and price levels of securities and changes in interest rates, inflation, political events, investor participation levels, legal and regulatory, accounting, tax and compliance requirements and competition, all of which have an impact on commissions, firm trading, fees from accounts under investment management, and investment income as well as on liquidity. Substantial fluctuations can occur in revenues and net income due to these and other factors.

Against a background of a deteriorating U.S. dollar, oil prices reaching $100 per barrel, and an unparalleled debt crisis based on record defaults in sub-prime mortgages, the U.S. economy and the stock market held up remarkably well during most of the fourth quarter of 2007. Popular averages reached new all-time highs in October 2007 and steadily eroded to leave them up modestly for the full year of 2007. While U.S Treasuries rallied against an uncertain credit market, most corporate and structured issuer’s prices deteriorated significantly as their spreads off of treasuries widened substantially.  Volatility increased in the fourth quarter of 2007 but volumes remained high and certain sectors such as technology, oil and gas and consumer durables remained at their highest levels of the year. The impact of defaults and foreclosures in the sub-prime mortgage market and the inability of the credit markets to asses s the creditworthiness of various issuers of commercial paper and asset-backed securities are likely to lead to

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continued turmoil in capital markets and with home prices declining amid rising unemployment, the probabilities of a recession have dramatically increased.

Oppenheimer’s business continued to thrive despite this economic backdrop with increases in commissions, fee-based revenues, income derived from investment activity and a record level of incentive fees from general partner participations in alternative investments owned by clients. At December 31, 2007, shareholders’ equity was approximately $444 million and book value per share was $33.19 compared to shareholders’ equity of approximately $359 million and book value per share of $27.76 at December 31, 2006, an increase of 20%. Assets under fee-based management increased by 13% to $17.5 billion at December 31, 2007 compared to $15.5 billion at December 31, 2006, reflecting organic growth and increased market value.

The Company is not involved in the sub-prime mortgage business, and does not have any exposure to that business as a result of its acquisition of the New Capital Markets Business or by virtue of the mortgage brokerage and servicing business of Evanston.

Interest rate changes impact the Company’s costs associated with carrying proprietary fixed income and equity inventories as well as its cost of borrowed funds. Interest rates were lower in the year ended December 31, 2007 compared to 2006. Investor interest in fixed income securities is driven by attractiveness of published rates, the direction of rates and economic expectations. Volatility in bond prices also impacts opportunities for profits in fixed income proprietary trading. Management monitors its exposure to interest rate fluctuations to mitigate risk of loss in volatile environments.

The Company’s focus continues to be the expansion and building of its business, through the attraction of new clients, investment in experienced professionals throughout the Company and continued improvement in its technology platform.

Regulatory Environment  

The brokerage business is subject to regulation by the SEC, FINRA (formerly the NYSE and NASD) and various state securities regulators. Events in recent years surrounding corporate accounting and other activities leading to investor losses resulted in the enactment of the Sarbanes-Oxley Act and have caused increased regulation of public companies. New regulations and new interpretations and enforcement of existing regulations are creating increased costs of compliance and increased investment in systems and procedures to comply with these more complex and onerous requirements. Increasingly, the various states are imposing their own regulations that make the uniformity of regulation a thing of the past, and make compliance more difficult and more expensive to monitor. This regulatory environment has resulted in increased costs of compliance with rules and regulations, in particular , the impact of the rules and requirements that were created by the passage of the Patriot Act, and the anti-money laundering regulations (AML) that are related thereto. The expectation is that the increased costs of compliance in today’s regulatory environment are not temporary.

New rules relating to supervisory control processes (NASD (Rule 3013) and NYSE (Rule 342)) became effective during 2006. On March 31, 2007, the chief executive officers (“CEOs”) of regulated broker-dealers (including the CEO of Oppenheimer) were required to certify that their companies have processes to establish and test policies and procedures reasonably designed to achieve compliance with federal securities laws and regulations, including applicable regulations of self-regulatory organizations. The CEO of the Company is required to make such a certification on an annual basis.

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Mutual Fund Inquiry  

On December 27, 2007, the Company reported that the Company’s main operating subsidiary, Oppenheimer, submitted an Acceptance, Waiver & Consent (“AWC”) to  FINRA to settle any charges that may have been brought by FINRA in connection with the previously reported investigation into certain market timing activities conducted by several former Oppenheimer employees working out of a single branch office.  On December 21, 2007, the AWC was accepted by FINRA.  Pursuant to the AWC, Oppenheimer agreed to accept a censure, to pay a fine of $250,000 and to make a compensatory payment in an aggregate amount of $4,250,000 to certain mutual funds identified and set forth in a schedule to the AWC within thirty days. As previously reported, the Company had set aside sufficient amounts to fully reserve for this matter.

Other Regulatory Matters

On October 30, 2007, FINRA issued an order (the “Settlement Order”) accepting a settlement of the previously reported disciplinary proceeding brought against Oppenheimer and Oppenheimer’s Chairman and CEO Albert G. Lowenthal.  The disciplinary proceeding related to issues associated with Oppenheimer’s response to an industry-wide mutual fund breakpoint survey.  Pursuant to the Settlement Order, all charges brought against Mr. Lowenthal were dismissed in their entirety.

In addition, pursuant to the Settlement Order, Oppenheimer, without admitting or denying the allegations of the Complaint, agreed to a censure, the payment of a fine in the amount of  $1 million  and agreed to undertake (i) to engage an independent consultant to evaluate its policies, systems and procedures for responding to information requests from regulators and  (ii) to conduct and report the results of internal audits of its processes for intake, assignment and responses to regulatory inquiries to FINRA quarterly for the next six quarters.  

As previously reported, the Company had set aside sufficient amounts to fully reserve for this matter and further, the Company has returned to customers approximately $800,000 in breakpoint credits and revised and enhanced procedures for determining applicable breakpoints. All amounts due to customers have been refunded.

On April 16, 2007, Oppenheimer received an invitation from the NYSE to make a “Wells Submission” with respect to its activities as a broker-dealer and as a clearing firm in connection with Oppenheimer’s supervision of its securities lending activities including, but not limited to, failing to detect and prevent stock loan personnel from engaging in business dealings with finders in violation of Oppenheimer policy.  The Company believes that this matter has no effect on any client of Oppenheimer and that at all times Oppenheimer’s supervision of its securities lending activities was reasonable and in accordance with industry standards. Any disciplinary proceedings brought against Oppenheimer in relation to the foregoing could result in, among other things, a censure, a fine and/or the imposition of an undertaking against Oppenheimer.

Other Matters

A subsidiary of the Company was the administrative agent for two closed-end funds until December 5, 2005. The Company has been advised by the current administrative agent for these two funds that the Internal Revenue Service may file a claim for interest and penalties for one of these funds with respect to the 2004 tax year as a result of an alleged failure of such subsidiary to take certain actions. The Company will continue to monitor developments on this matter.

As part of its ongoing business, the Company records reserves for legal expenses, judgments, fines and/or awards attributable to litigation and regulatory matters. In

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connection therewith, the Company has maintained its legal reserves at levels it believes will resolve outstanding matters, but may increase or decrease such reserves as matters warrant.

Business Continuity

The Company is committed to an on-going investment in its technology and communications infrastructure including extensive business continuity planning and investment. These costs are on-going and the Company believes that current and future costs will exceed historic levels due to business and regulatory requirements. The Company believes that internally-generated funds from operations are sufficient to finance its expenditure program.

Outlook

The Company's long-term plan is to continue to expand existing offices by hiring experienced professionals as well as through the purchase of operating branch offices from other broker dealers, thus maximizing the potential of each office and the development of existing trading, investment banking, investment advisory and other activities. Equally important is the search for viable acquisition candidates. As opportunities are presented, it is the long-term intention of the Company to pursue growth by acquisition where a comfortable match can be found in terms of corporate goals and personnel and at a price that would provide the Company's shareholders with incremental value. To point, the Company has acquired on January 14, 2008, the New Capital Markets Business described under Item 1, Business. The Company may review additional acquisitions, and will continue to focus its attention on the management of its existing busi ness. In addition, the Company is committed to improving its technology capabilities to support client service and the expansion of its capital markets capabilities.

Results of Operations

The year ended December 31, 2007 was the most successful year in the Company’s history measured by revenue, net profit, earnings per share and book value.   Markets were strong throughout the year, producing record revenues from transactional business from both private client and capital markets and increased fees from fee-based programs. Interest income for 2007 was impacted by lower rates on customer debit balances and increased activity in the securities lending business. In addition, the Company’s performance was positively impacted by its participation as general partner in various alternative investments that had significantly better performance in 2007 compared to 2006.

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The following table sets forth the amount and percentage of the Company's revenue from each principal source for each of the following years ended December 31. Amounts are expressed in thousands of dollars.

	2007	%	2006	%	2005	%
Commissions	$366,437	40%	$355,459	44%	$322,120	47%
Principal transactions, net	41,441	5%	42,834	5%	36,242	6%
Interest	110,114	12%	108,025	14%	76,649	11%
Investment banking	119,350	13%	67,528	8%	67,413	10%
Advisory fees	249,358	27%	180,602	23%	158,957	23%
Other	27,697	3%	46,375	6%	18,365	3%
Total revenue	$914,397	100%	$800,823	100%	$679,746	100%

The Company derives most of its revenue from the operations of its principal subsidiaries, Oppenheimer and OAM. Although maintained as separate entities, the operations of the Company's brokerage subsidiaries are closely related because Oppenheimer acts as clearing broker and omnibus clearing agent in transactions initiated by Freedom. Except as expressly otherwise stated, the discussion below pertains to the operations of Oppenheimer.

The following table and discussion summarizes the changes in the major revenue and expense categories for the past two years. Amounts are expressed in thousands of dollars.

	Period to Period Change
	Increase (Decrease)
	2007 versus 2006		2006 versus 2005
	Amount	Percentage	Amount	Percentage
Revenue -
Commissions	$10,978	+3%	$33,339	+10%
Principal transactions, net	(1,393)	-3%	6,592	+18%
Interest	2,089	+2%	31,376	+41%
Investment banking	51,822	+77%	115	-%
Advisory fees	68,756	+38%	21,645	+14%
Other	(18,678)	-40%	28,010	+153%
Total revenue	113,574	+14%	121,077	+18%

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Period to Period Change
Increase (Decrease)
2007 versus 2006		2006 versus 2005
Amount	Percentage	Amount	Percentage

Expenses -
Compensation and related expenses	$71,591	+15%	$49,875	+12%
Clearing and exchange fees	4,286	+35%	(1,278)	-10%
Communications and technology	4,814	+10%	3,250	+7%
Occupancy and equipment costs	(1,721)	-3%	1,927	+4%
Interest	(6,224)	-10%	23,131	+58%
Other	(6,116)	-8%	5,411	+7%
Total expenses	66,630	+9%	82,316	+13%
Profit before taxes	46,944	+58%	38,761	+93%
Income taxes	16,154	+45%	17,100	+91%
Net profit	$30,790	+69%	$21,661	+95%

Fiscal 2007 compared to Fiscal 2006

Revenue, other than interest

Commission income and, to a large extent, income from principal transactions depend on investor participation in the markets. In the year ended December 31, 2007, commission revenue increased by 3% compared to fiscal 2006 derived primarily from stronger investor interest in the OTC markets in 2007 compared to 2006. Commission revenue has been impacted by a general compression in rates charged to clients for transactions as well as clients’ changing their accounts to fee-based arrangements. Net revenue from principal transactions decreased by 3% in the year ended December 31, 2007 compared to fiscal 2006. With increased market volatility in 2007, the Company has scaled back its exposure to proprietary trading activities. Investment banking revenues increased 77% in the year ended December 31, 2007 compared with fiscal 2006.  Approximately 41% of this increase was generated by new issue and secondary issuance and 26% of this increase was generated by corporate finance advisory and placement fees. Advisory fees increased by 38% for the year ended December 31, 2007 compared to fiscal 2006. Assets under management by the asset management groups were $17.5 billion at December 31, 2007, compared to $15.5 billion at December 31, 2006.  Performance fees earned by OAM and Oppenheimer as a result of participation as general partner in various alternative investments produced revenue of $44.8 million in 2007 compared to $14.7 million in 2006, representing 44% of the increase in 2007 compared to 2006.  Other revenue decreased by 40% in the year ended December 31, 2007 compared to fiscal 2006. Fiscal 2006 included $13.7 million relating to the NYSE Group transactions and $4.1 million relating to the gain on extinguishment of the Debentures, while fiscal 2007 included a $2.5 million gain from the extinguishment of the zero coupon notes. These transactions are described in notes 4 and 7, respectively, to the Company 6;s consolidated financial statements, included in Item 8.

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Interest

Net interest revenue (interest revenue less interest expense) increased 18% in the year ended December 31, 2007 compared to fiscal 2006. Interest revenue (which primarily relates to revenue from customer margin balances and securities lending activities) increased 2% in fiscal 2007 compared to fiscal 2006. Average stock borrow balances increased by approximately 9%, offset by lower average customer debit balances and lower interest rates. Interest expense in fiscal 2007 decreased by 10% compared to fiscal 2006. The decrease was primarily due to lower interest expense related to the Company’s Debentures (repaid in full on October 23, 2006) and Senior Secured Credit Note (originally issued on July 31, 2006 in the amount of $125 million and with an outstanding balance of $83.3 million at December 31, 2007). See the discussion under Business – Other Requirements and note 7 to the Company’s consolidated financi al statements, included in Item 8. The other significant reason for the decrease in interest expense arose because of lower average bank call loan balances in fiscal 2007 compared to fiscal 2006 as a result of stronger business and cash flows in fiscal 2007 compared to fiscal 2006.

Expenses, other than interest

Compensation and related expense increased by 15% in the year ended December 31, 2007 compared to fiscal 2006. Compensation expense, including the Company’s accrual for year-end bonuses, has volume-related components and, therefore, will increase with the increased level of underlying business conducted in the year ended December 31, 2007, compared to fiscal 2006. The amortization of forgivable loans to financial advisors is included in compensation expense. This expense is relatively fixed and is not influenced by increases or decreases in revenue levels, but rather by the net number of financial advisors hired in one period compared to another. Note amortization expense in fiscal 2007 was approximately $19.4 million compared to approximately $21.0 million in fiscal 2006. As of January 1, 2006, the Company adopted SFAS 123 (R), resulting in approximately $8.9 million of compensation expense in fiscal 2007 compared to approximately $3.3 million in fiscal 2006 relating to the expensing of share-based awards. The Company’s stock appreciation rights which, under accounting guidelines, are re-measured at fair value at each period end based on the closing price of the Company’s Class A Shares are the largest component of share-based compensation expense. The cost of clearing and exchange fees increased by 35% in the year ended December 31, 2007 compared to fiscal 2006 due to higher transactional volume in 2007. The cost of communications and technology increased 10% in the year ended December 31, 2007 compared to fiscal 2006. The increase is driven largely by the increased costs of external data services employed to support the increased requirements of the business in 2007 compared to 2006. Occupancy and equipment costs decreased 3% in fiscal 2007 compared to fiscal 2006 due primarily to reduced equipment costs.  Other expenses decreased by 8% for the year ended December 31, 2007 compared to fiscal 2006. In fiscal 2007 increased third party finders fees were offset by decreased costs for legal and regulatory settlement costs. The cost of professional fees decreased by 19% and represented 37% of the decrease in other expenses in fiscal 2007 compared to 2006 as the Company resolved matters previously reserved. Other expenses will continue to be impacted by litigation and regulatory settlement costs. The Company may face additional legal costs and settlement expenses in future quarters.

The decrease in the effective tax rate (40.8% for the year ended December 31, 2007 compared to 44.6% for the year ended December 31, 2006) was the result of favorable resolutions of tax matters in 2007.

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Fiscal 2006 compared to Fiscal 2005

Revenue, other than interest

Commission income and, to a large extent, income from principal transactions depend on investor participation in the markets. In the year ended December 31, 2006, commission revenue increased by 10% compared to fiscal 2005 primarily as a result of strong investor activity in the markets throughout 2006. Included in commission income is that portion of fee-based revenue and performance fees generated within OAM that is allocated to Oppenheimer’s private client division to reflect that the Oppenheimer financial advisors provided the point of sale. Net revenue from principal transactions increased by 18% in the year ended December 31, 2006 compared to fiscal 2005 due to higher trading volumes in 2006 compared to 2005. Investment banking revenues were flat in the year ended December 31, 2006. Advisory fees increased by 14% for the year ended December 31, 2006 compared to fiscal 2005. Assets under management by the asset management group were $15.5 billion at December 31, 2006, compared to $11.0 billion at December 31, 2005, net of the December 5, 2005 expiration of the advisory contracts for the Asia Tigers Fund and India Fund. These two advisory contracts represented approximately $1.2 billion of assets managed at December 5, 2005. Performance fees earned by OAM and Oppenheimer as a result of participation as general partner in various alternative investments produced revenue of $14.7 million in 2006 compared to $4.5 million in 2005. Other revenue increased by 153% in the year ended December 31, 2006 compared to fiscal 2005 and includes $13.7 million relating to the NYSE Group transactions and $4.1 million relating to the gain on extinguishment of the Debentures. These transactions are described in notes 4 and 7, respectively, to the Company’s consolidated financial statements, included in Item 8.

Interest

Net interest revenue (interest revenue less interest expense) increased 24% in the year ended December 31, 2006 compared to fiscal 2005. Interest expense tracks the increase in interest revenue and is the result of higher interest rates, increased stock loan activity and higher debt carrying costs in 2006 compared to 2005. In order to retire the Debentures, the Company issued a Senior Secured Credit Note in the amount of $125.0 million at a variable interest rate based on the London Interbank Offering Rate (LIBOR) with a seven-year term to a syndicate led by Morgan Stanley Senior Funding Inc., as agent. The Company utilizes interest rate swap agreements to manage interest rate risk of its variable-rate Senior Secured Credit Note. These swaps have been designated as cash flow hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”. & nbsp;Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR. For the five months ended December 31, 2006, the effective interest rate on the Senior Secured Credit Note was 8.15% (compared to 4.5% on the retired Debentures).

Expenses, other than interest

Compensation and related expense increased by 12% in the year ended December 31, 2006 compared to fiscal 2005. Compensation expense has volume-related components and, therefore, will increase with the increased level of underlying business conducted in the year ended December 31, 2006, compared to fiscal 2005. The amortization of forgivable loans to financial advisors is included in compensation expense. This expense is relatively fixed and is not influenced by increases or decreases in revenue levels. The Company’s notes receivable balance peaked in July 2003 as a result of the acquisition of the Oppenheimer Divisions. As a result of attrition, the amortization expense in fiscal 2006

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was approximately $21.0 million compared to approximately $23.0 million in fiscal 2005. As of January 1, 2006, the Company adopted SFAS 123 (R), resulting in approximately $3.3 million of compensation expense for the year ended December 31, 2006 relating to the expensing of employee stock options. In prior periods, the Company provided pro forma disclosure of the impact of employee stock options in the notes to the consolidated financial statements. The cost of clearing and exchange fees decreased by 10% in the year ended December 31, 2006 compared to fiscal 2005. Part of the decrease can be attributed to the NYSE lowering its rates in August 2006. The cost of communications and technology increased 7% in the year ended December 31, 2006 compared to fiscal 2005. The increase is driven largely by the increased costs of external data services employed to support the increased level of business in 2006 compared to 2005. Occ upancy and equipment costs increased 4% in fiscal 2006 compared to fiscal 2005. During 2006, the Company acquired new space and closed several branch locations. The rising costs of heat, light and power and maintenance were a factor in the comparative increase year over year.  Other expenses increased by 7% for the year ended December 31, 2006 compared to fiscal 2005. Included in other expense is approximately $5.0 million of solicitor fee expense paid to third parties by Oppenheimer for introduced business ($4.0 million in 2005). General expenses, such as insurance costs, postage and out-of-town travel costs, increased in 2006 compared to 2005. Bad debt expense was unchanged in 2006 from the prior year.  Legal and settlement costs decreased by approximately $2.6 million (16%) in the year ended December 31, 2006 compared to 2005 reflecting a general reduction in legal and regulatory matters facing the Company and the level of reserves set up in prior years. The Company may incur additional such exp enses in future quarters. The Company has used its best estimate to provide adequate reserves to cover potential regulatory and litigation costs.

Liquidity and Capital Resources

Total assets at December 31, 2007 decreased by 1% from December 31, 2006 levels. The Company satisfies its need for funds from its own cash resources, internally generated funds, collateralized and uncollateralized borrowings, consisting primarily of bank loans, and uncommitted lines of credit. The amount of Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in stock loan balances and changes in notes receivable from employees. Oppenheimer has arrangements with banks for borrowings on an unsecured and on a fully collateralized basis. At December 31, 2007, $29.0 million of such borrowings were outstanding compared to outstanding borrowings of $79.5 million at

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December 31, 2006. At December 31, 2007, the Company had available collateralized and uncollateralized letters of credit of $260.2 million.

In connection with the acquisition of the Oppenheimer Divisions from CIBC World Markets in January 2003, the Company issued a zero coupon promissory note in the amount of approximately $65.5 million. Note 7 to the consolidated financial statements, included in Item 8, contains a description of these instruments. On December 14, 2007, the Company prepaid the remaining outstanding balance of $9.3 million for cash consideration of $6.8 million out of internally-generated funds, generating a gain on extinguishment of indebtedness of $2.5 million which is included in other income in the consolidated statement of income for the year ended December 31, 2007.

In connection with the acquisition of the Oppenheimer Divisions from CIBC World Markets in January 2003, the Company issued Debentures in the amount of approximately $160.8 million. Note 7 to the consolidated financial statements, included in Item 8, contains a description of these instruments. The Debentures were retired

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($140.8 million on July 31, 2006 and the remaining $20.0 million on October 23, 2006).  In order to finance the retirement of the Debentures, the Company issued a Senior Secured Credit Note to a syndicate led by Morgan Stanley Senior Funding Inc., as agent, in the amount of $125.0 million, employed internally available funds and increased bank call loans. The Senior Secured Credit Note has a term of seven years with minimum principal repayments of 0.25% per quarter and required prepayments based on a portion of the Company’s excess cash flow, the net cash proceeds of asset sales, tax refunds over certain limits, awards over certain limits in connection with legal actions or ‘takings’, and debt issuances or other liability financings, and pays interest at a variable rate based on LIBOR (London Interbank Offering Rate). The Company utilizes interest rate swap agreements to manage interest rate risk of i ts variable-rate Senior Secured Credit Note. These swaps have been designated as cash flow hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”.  Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR. The Company estimates that, in April 2008, it will pay down principal of approximately $16.3 million pursuant to the excess cash flow computation.  In accordance with the Senior Secured Credit Note, the Company has provided certain covenants to the lenders with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio driven from EBITDA and minimum net capital requirements with respect to Oppenheimer. In the Company’s view, the most restrictive of the covenants requires that the Company maintain a maximum leverage ratio of 2.0 (total long-term debt divided by EBITDA). At December 31, 2007, the Company was in compliance with the covenants.

The obligations under the Senior Secured Credit Note are guaranteed by certain of the Company’s subsidiaries, other than broker-dealer subsidiaries, with certain exceptions, and are secured by a lien on substantially all of the assets of each guarantor, including a pledge of the ownership interests in each first-tier broker-dealer subsidiary held by a guarantor, with certain exceptions.

On January 14, 2008, in connection with the acquisition of the New Capital Markets Business, the Company issued a subordinated note in the amount of $100 million which is due and payable on January 31, 2014 with interest payable on a quarterly basis. The purpose of this note is to provide regulatory capital to support the operations of the New Capital Markets Business.

In addition, CIBC is providing a warehouse facility, initially up to $1.5 billion, to a newly formed U.S. entity to finance loans of middle market companies that will be syndicated and distributed by the Loan Syndication and Loan Trading Groups being acquired. Underwriting of loans pursuant to the warehouse facility will be subject to joint credit approval of Oppenheimer and CIBC.

Funding Risk

Amounts are expressed in thousands of dollars.

	Year ended December 31,
	2007	2006
Cash provided by operations	$113,667	$114,303
Cash used in investing activities	(11,553)	(7,272)
Cash used in financing activities	(97,954)	(115,502)
Net increase (decrease) in cash and cash equivalents	$4,160	$(8,471)

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Management believes that funds from operations, combined with the Company's capital base and available credit facilities, are sufficient for the Company's liquidity needs in the foreseeable future. (See Factors Affecting “Forward-Looking Statements”).

Other Matters

During the fourth quarter of 2007, the Company did not purchase any Class A Shares pursuant to the Normal Course Issuer Bid.

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During the fourth quarter of 2007, the Company issued 91,896 Class A Shares for a total consideration of $2.2 million related to employee exercises of options under the Company’s equity incentive plan.

On November 23, 2007, the Company paid cash dividends of U.S. $0.11 per Class A and Class B Share totaling $1.5 million from available cash on hand.

On January 29, 2008, the Board of Directors declared a regular quarterly cash dividend of U.S. $0.11 per Class A and Class B Share payable on February 22, 2008 to shareholders of record on February 8, 2008.

The book value of the Company’s Class A and Class B Shares was $33.22 at December 31, 2007 compared to $27.76 at December 31, 2006, an increase of approximately 20%, based on total outstanding shares of 13,366,276 and 12,934,362, respectively.

The diluted weighted average number of Class A and Class B Shares outstanding for the year ended December, 2007 was 13,532,287 compared to 17,039,842 outstanding for the year ended December 31, 2006, a net decrease of 20% primarily due to the redemption, on July 31, 2006, of $140.8 million and on October 23, 2006, of the remaining $20.0 million, of the Company’s Debentures. The Debentures were exchangeable into approximately 6.9 million Class A Shares. The fourth quarter of 2006 represents the last quarterly period in which the Debentures had a dilutive impact on earnings per share.

Off-Balance Sheet Arrangements

Information concerning the Company’s off-balance sheet arrangements is included in note 16 of the notes to the consolidated financial statements, appearing in Item 8. Such information is hereby incorporated by reference.

Contractual and Contingent Obligations

The Company has contractual obligations to make future payments in connection with non-cancelable lease obligations, as well as debt assumed in 2006 to refinance the Debentures which were issued in 2003.

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46

The following table sets forth these contractual and contingent commitments as at December 31, 2007. Amounts are expressed in millions of dollars.

	Total	Less than 1 Year	1-3 Years	3-5 Years	More than 5 Years
Minimum rentals	$147	$28	$50	$35	$34
Committed capital	3	3	-	-	-
Senior Secured Credit Note	83	17	27	30	9
Total	$233	$48	$77	$65	$43

Inflation

Because the assets of the Company's brokerage subsidiaries are highly liquid, and because securities inventories are carried at current market values, the impact of inflation generally is reflected in the financial statements. However, the rate of inflation affects the Company's costs relating to employee compensation, rent, communications and certain other operating costs, and such costs may not be recoverable in the level of commissions or fees charged. To the extent inflation results in rising interest rates and has other adverse effects upon the securities markets, it may adversely affect the Company's financial position and results of operations.

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Factors Affecting “Forward-Looking Statements”

From time to time, the Company may publish “Forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. These risks and uncertainties, many of which are beyond the Co mpany’s control, include, but are not limited to: (i) transaction volume in the securities markets, (ii) the volatility of the securities markets, (iii) fluctuations in interest rates, (iv) changes in regulatory requirements which could affect the cost of doing business, (v) fluctuations in currency rates, (vi) general economic conditions, both domestic and international, (vii) changes in the rate of inflation and the related impact on the securities markets, (viii) competition from existing financial institutions and other new participants in the securities markets, (ix) legal developments affecting the litigation experience of the securities industry, (x) changes in federal and state tax laws which could affect the popularity of products sold by the Company, (xi) the effectiveness of efforts to reduce costs and eliminate overlap, (xii) war and nuclear confrontation, (xiii) the Company’s ability to achieve its business plan, and (xiv) corporate governance issues. There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company’s business. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. See Item 1A – Risk Factors.

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Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management

The Company’s principal business activities by their nature involve significant market, credit and other risks. The Company’s effectiveness in managing these risks is critical to its success and stability.

As part of its normal business operations, the Company engages in the trading of both fixed income and equity securities in both a proprietary and market-making capacity. The Company makes markets in over-the-counter equities in order to facilitate order flow and accommodate its institutional and retail customers. The Company also makes markets in municipal bonds, mortgage-backed securities, government bonds and high yield bonds and short term fixed income securities and loans issued by various corporations.

Market Risk. Market risk generally means the risk of loss that may result from the potential change in the value of a financial instrument as a result of fluctuations in interest and currency exchange rates and in equity and commodity prices. Market risk is inherent in all types of financial instruments, including both derivatives and non-derivatives. The Company’s exposure to market risk arises from its role as a financial intermediary for its customers’ transactions and from its proprietary trading and arbitrage activities.

Oppenheimer monitors market risks through daily profit and loss statements and position reports. Each trading department adheres to internal position limits determined by senior management and regularly reviews the age and composition of its proprietary accounts. Positions and profits and losses for each trading department are reported to senior management on a daily basis.

In its market-making activities, Oppenheimer must provide liquidity in the equities for which it makes markets. As a result of this, Oppenheimer has risk containment policies in place, which limit position size and monitor transactions on a minute-to-minute basis.

Credit Risk. Credit risk represents the loss that the Company would incur if a client, counterparty or issuer of securities or other instruments held by the Company fails to perform its contractual obligations. The Company follows industry practice to reduce credit risk related to various investing and financing activities by obtaining and maintaining collateral. The Company adjusts margin requirements if it believes the risk exposure is not appropriate based on market conditions. When Oppenheimer advances funds or securities to a counterparty in a principal transaction or to a customer in a brokered transaction, it is subject to the risk that the counterparty or customer will not repay such advances. If the market price of the securities purchased or loaned has declined or increased, respectively, Oppenheimer may be unable to recover some or all of the value of the amount advanced. A similar risk is also present where a customer is unable to respond to a margin call and the market price of the collateral has dropped. In addition, Oppenheimer's securities positions are subject to fluctuations in market value and liquidity.

In addition to monitoring the credit-worthiness of its customers, Oppenheimer imposes more conservative margin requirements than those of the NYSE. Generally, Oppenheimer limits customer loans to an amount not greater than 65% of the value of the securities (or 50% if the securities in the account are concentrated in a limited number of issues). Particular attention and more restrictive requirements are placed on more highly volatile securities traded in the NASDAQ market. In comparison, the NYSE permits loans of up to 75% of the value of the equity securities in a customer's account.  Further discussion of

49

credit risk appears in note 16 to the Company’s consolidated financial statements, included in Item 8.

Operational Risk. Operational risk generally refers to the risk of loss resulting from the Company’s operations, including, but not limited to, improper or unauthorized execution and processing of transactions, deficiencies in its operating systems, business disruptions and inadequacies or breaches in its internal control processes. The Company operates in diverse markets and it is reliant on the ability of its employees and systems to process high numbers of transactions often within short time frames. In the event of a breakdown or improper operation of systems, human error or improper action by employees, the Company could suffer financial loss, regulatory sanctions or damage to its reputation. In order to mitigate and control operational risk, the Company has developed and continues to enhance policies and procedures (including the maintenance of disaster recovery facilities and procedures related thereto) that are designed to identify and manage operational risk at appropriate levels. With respect to its trading activities, the Company has procedures designed to ensure that all transactions are accurately recorded and properly reflected on the Company’s books on a timely basis. With respect to client activities, the Company operates a system of internal controls designed to ensure that transactions and other account activity (new account solicitation, transaction authorization, transaction processing, billing and collection) are properly approved, processed, recorded and reconciled. The Company has procedures designed to assess and monitor counterparty risk. For details of funding risk, see Item 7, under the caption “Liquidity and Capital Resources”.

Legal and Regulatory Risk. Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements, client claims and the possibility of sizeable adverse legal judgments. The Company is subject to extensive regulation in the different jurisdictions in which it conducts its activities. Regulatory oversight of the securities industry has become increasingly intense over the past few years and the Company, as well as others in the industry, has been directly affected by this increased regulatory scrutiny. Timely and accurate compliance with regulatory requests has become increasingly problematic, and regulators have tended to bring enforcement proceedings in relation to such matters. See further discussion in Item 7, under the caption “Regulatory Environment”.

The Company has comprehensive procedures for addressing issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds and securities, granting of credit, collection activities, money laundering, and record keeping. The Company has designated Anti-Money Laundering Compliance Officers who monitor compliance with regulations under the U.S. Patriot Act. See further discussion on the Company’s reserve policy in Item 7, under the caption “Critical Accounting Estimates”, Item 3, “Legal Proceedings” and Item 1, “Regulation”.

Off-Balance Sheet Arrangements. The Company does not rely on off-balance sheet arrangements or transactions with unconsolidated, special purpose or limited purpose entities to manage risk.

Value-at-Risk

Value-at-risk is a statistical measure of the potential loss in the fair value of a portfolio due to adverse movements in underlying risk factors. In response to the SEC’s market risk disclosure requirements, the Company has performed a value-at-risk analysis of its trading of financial instruments and derivatives. The value-at-risk calculation uses standard statistical techniques to measure the potential loss in fair value based upon a one-day holding period and a 95% confidence level. The calculation is based upon a variance-

50

covariance methodology, which assumes a normal distribution of changes in portfolio value. The forecasts of variances and co-variances used to construct the model, for the market factors relevant to the portfolio, were generated from historical data. Although value-at-risk models are sophisticated tools, their use can be limited as historical data is not always an accurate predictor of future conditions. The Company attempts to manage its market exposure using other methods, including trading authorization limits and concentration limits.

At December 31, 2007 and 2006, the Company’s value-at-risk for each component of market risk was as follows (in thousands of dollars):

	-------------Fiscal 2007-------------			As at December 31,
	High	Low	Average	2007	2006
Equity price risk	$437	$123	$286	$437	$308
Interest rate risk	648	409	544	648	392
Commodity price risk	119	128	143	119	133
Diversification benefit	(695)	(332)	(556)	(695)	(502)
Total	$509	$328	$417	$509	$331

The potential future loss presented by the total value-at-risk generally falls within predetermined levels of loss that should not be material to the Company’s results of operations, financial condition or cash flows. The changes in the value-at-risk amounts reported in 2007 from those reported in 2006 reflect changes in the size and composition of the Company’s trading portfolio at December 31, 2007 compared to December 31, 2006. The Company’s portfolio as at December 31, 2007 includes approximately $15.4 million ($14.9 million in 2006) in corporate equities, which are related to deferred compensation liabilities and which do not bear any value-at-risk to the Company. The Company used derivative financial instruments to hedge market risk in fiscal 2007 and 2006, including in connection with the Senior Secured Credit Note, which is described in Note 16 of the Notes to the Consoli dated Financial Statements, appearing in Item 8. Such information is hereby incorporated by reference.  Further discussion of risk management appears in Item 7, “Management’s Discussion and Analysis of the Results of Operations” and Item 1A, “Risk Factors”.

The value-at-risk estimate has limitations that should be considered in evaluating the Company’s potential future losses based on the year-end portfolio positions. Recent market conditions including increased volatility, may result in statistical relationships that result in higher value-at-risk than would be estimated from the same portfolio under different market conditions. Likewise, the converse may be true. Critical risk management strategy involves the active management of portfolio levels to reduce market risk. The Company’s market risk exposure is continuously monitored as the portfolio risks and market conditions change.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Management’s Report on Internal Control over Financial Reporting	49
Report of Independent Registered Public Accounting Firm	50
Consolidated Balance Sheets as at December 31, 2007 and 2006	52
Consolidated Statements of Income for the three years ended December 31, 2007, 2006 and 2005	54
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2007, 2006 and 2005	55
Consolidated Statements of Changes in Shareholders’ Equity for the three years ended December 31, 2007, 2006 and 2005	56
Consolidated Statements of Cash Flows for the three years ended December 31, 2007, 2006 and 2005	57
Notes to Consolidated Financial Statements	59

52

Management’s Report on Internal Control over Financial Reporting

Management of Oppenheimer Holdings Inc. is responsible for establishing and maintaining adequate control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

As of December 31, 2007, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2007 was effective.

The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

The Company’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included herein, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Oppenheimer Holdings Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Oppenheimer Holdings Inc. and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effect iveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.  Our responsibility is to express opinions on these financial statements, and on the Company's internal control over financial reporting based on our integrated audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement pre sentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Notes 1 and 12 to the consolidated financial statements, the Company changed the manner in which it accounts for share-based compensation in 2006.

A company’s internal control over financial reporting is a process designed 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.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance reg arding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

54

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

March 7, 2008

55

OPPENHEIMER HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31,
		2007	2006
	(Expressed in thousands of dollars)
ASSETS
Cash and cash equivalents		$27,702	$23,542
Cash and securities segregated for regulatory and
other purposes		67,562	45,035
Deposits with clearing organizations		16,402	11,355
Receivable from brokers and clearing organizations		672,282	643,914
Receivable from customers, net of allowance for
doubtful accounts of $628 thousand ($665 thousand
in 2006)		879,732	979,350
Securities owned, at market value		128,495	137,092
Notes receivable, net		44,923	52,340
Office facilities, net		18,340	16,478
Intangible assets, net of amortization		32,925	33,660
Goodwill		132,472	132,472
Other		117,406	84,852
		$2,138,241	$2,160,090

The accompanying notes are an integral part of these consolidated financial statements.

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OPPENHEIMER HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (continued)
AS AT DECEMBER 31,
		2007	2006
	(Expressed in thousands of dollars)
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Drafts payable		$56,925	$57,641
Bank call loans		29,000	79,500
Payable to brokers and clearing organizations		809,025	923,556
Payable to customers		446,299	384,881
Securities sold, but not yet purchased, at market value		9,413	7,315
Accrued compensation		153,786	116,235
Accounts payable and other liabilities		82,912	74,806
Income taxes payable		11,020	13,229
Zero coupon promissory note		-	14,576
Senior secured credit note		83,325	124,375
Deferred income tax, net		12,556	4,935
		1,694,261	1,801,049
Commitments and contingencies (note 13)
Shareholders' equity
Share capital
Class A non-voting shares         (2007 – 13,266,596 shares issued and outstanding          2006 – 12,834,682 shares issued and outstanding)		52,921	41,093
99,680 Class B voting shares issued and outstanding		133	133
		53,054	41,226
Contributed capital		16,760	11,662
Retained earnings		375,137	306,153
Accumulated other comprehensive loss		(971)	-
		443,980	359,041
		$2,138,241	$2,160,090
The accompanying notes are an integral part of these consolidated financial statements.

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OPPENHEIMER HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31,
		2007			2006		2005
	(Expressed in thousands of dollars, except per share amounts)
REVENUE:
Commissions			$366,437	$355,459		$322,120
Principal transactions, net			41,441	42,834		36,242
Interest			110,114	108,025		76,649
Investment banking			119,350	67,528		67,413
Advisory fees			249,358	180,602		158,957
Other			27,697	46,375		18,365
			914,397	800,823		679,746
EXPENSES:
Compensation and related expenses			540,200	468,609		418,734
Clearing and exchange fees			16,388	12,102		13,380
Communications and technology			52,288	47,474		44,224
Occupancy and equipment costs			48,607	50,328		48,401
Interest			56,643	62,867		39,736
Other			72,877	78,993		73,582
			787,003	720,373		638,057
Profit before income taxes			127,394	80,450		41,689
Income tax provision			52,027	35,873		18,773
NET PROFIT FOR YEAR			$75,367	$44,577		$22,916
Earnings per share
Basic			$5.70	$3.50		$1.76
Diluted			$5.57	$2.76		$1.36
The accompanying notes are an integral part of these consolidated financial statements.

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OPPENHEIMER HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31,
		2007	2006	2005
	(Expressed in thousands of dollars, except per share amounts)

Net profit for year	$75,367	$44,577	$22,916
Other Comprehensive income (loss), net of tax
Change in cash flow hedges (net of tax
benefit of $703 thousand)	(971)	-	-
COMPREHENSIVE INCOME FOR YEAR	$74,396	$44,577	$22,916

The accompanying notes are an integral part of these consolidated financial statements.

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OPPENHEIMER HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED DECEMBER 31,
	2007	2006	2005
	(Expressed in thousands of dollars)
SHARE CAPITAL
Balance at beginning of year	$41,226	$32,631	$49,637
Issuance of Class A Shares	11,828	10,850	2,629
Repurchase of Class A Shares for
cancellation	-	(2,255)	(19,635)
Balance at end of year	$53,054	$41,226	$32,631
CONTRIBUTED CAPITAL
Balance at beginning of year	$11,662	$8,810	$8,780
Tax benefit from share-based awards	915	315	30
Share-based expense	4,183	2,537	-
Balance at end of year	$16,760	$11,662	$8,810
RETAINED EARNINGS
Balance at beginning of year	$306,153	$266,682	$248,466
Cumulative effect of an accounting change	(823)	-	-
Net profit for year	75,367	44,577	22,916
Dividends paid ($0.42 per share in 2007; $0.40 per share in 2006; and $0.36 per share in 2005)	(5,560)	(5,106)	(4,700)
Balance at end of year	$375,137	$306,153	$266,682
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of year	-	-	-
Change in cash flow hedges, net of tax	$(971)	-	-
Balance at end of year	$(971)	-	-
Total Shareholders’ Equity	$443,980	$359,041	$308,123

The accompanying notes are an integral part of these consolidated financial statements.

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	OPPENHEIMER HOLDINGS INC.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	FOR THE YEAR ENDED DECEMBER 31,
					2007	2006	2005
(Expressed in thousands of dollars)
Cash flows from operating activities:
Net profit for year					$75,367	$44,577	$22,916
Adjustments to reconcile net profit to net cash   provided by (used in) operating activities:
		Non-cash items included in net profit:
			Depreciation and amortization of office facilities and leasehold improvements		9,691	9,583	9,347
			Deferred income tax		7,621	382	(3,975)
			Amortization of notes receivable		19,419	20,676	23,141
			Amortization of debt issuance costs		1,218	352	-
			Amortization of intangible assets		735	735	735
			Provision for doubtful accounts		(37)	(200)	(2,035)
			Share-based compensation		9,657	5,000	-
			Gain on extinguishment of zero coupon note		(2,455)	-	-
			Gain on extinguishment of Debentures		-	(4,146)	-
		Decrease (increase) in operating assets:
			Cash and securities segregated for
			regulatory and other purposes		(22,527)	(13,708)	(16,036)
			Deposits with clearing organizations		(5,047)	2,885	2,766
			Receivable from brokers and clearing
			organizations		(28,368)	(116,424)	(52,967)
			Receivable from customers		99,655	138,064	(248,841)
			Securities owned		8,597	9,553	(68,200)
			Notes receivable		(12,002)	(13,142)	(12,945)
			Other assets		(33,164)	(16,578)	(10,022)
		Increase (decrease) in operating liabilities:
			Drafts payable		(716)	11,629	(13,227)
			Payable to brokers and clearing
			organizations		(115,502)	93,078	158,525
			Payable to customers		61,418	(88,331)	89,512
			Securities sold, but not yet purchased		2,098	(2,471)	(750)
			Accrued compensation		32,935	26,732	13,954
			Accounts payable and other liabilities		7,283	(6,005)	14,153
			Income taxes payable		(2,209)	12,062	4,185
				Cash provided by (used in) operating activities	113,667	114,303	(89,764)

(Continued on next page)

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	OPPENHEIMER HOLDINGS INC.
	CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
	FOR THE YEAR ENDED DECEMBER 31,
				2007	2006	2005
(Expressed in thousands of dollars)
Cash flows from investing activities:
		Purchase of office facilities		(11,553)	(7,272)	(4,589)
			Cash used in investing activities	(11,553)	(7,272)	(4,589)
Cash flows from financing activities:
		Cash dividends paid on Class A and
		Class B Shares		(5,560)	(5,106)	(4,700)
		Issuance of Class A Shares		10,970	10,850	2,629
		Tax benefit from share-based awards		915	315	30
		Repurchase of Class A Shares for cancellation		-	(2,255)	(19,635)
		Repayments of zero coupon promissory notes		(12,121)	(8,246)	(12,556)
		Redemption of Debentures		-	(156,676)	-
		Issuance of senior secured credit note		-	125,000	-
		Repayments of senior secured credit note		(41,050)	(625)	-
		Debt issuance costs		(608)	(4,035)	-
		Bank loan repayments		-	(14,524)	(10,119)
		Increase (decrease) in bank call loans, net		(50,500)	(60,200)	137,327
			Cash provided by (used in) financing activities	(97,954)	(115,502)	92,976
Net increase (decrease) in cash and cash
equivalents				4,160	(8,471)	(1,377)
Cash and cash equivalents, beginning of year				23,542	32,013	33,390
Cash and cash equivalents, end of year				$27,702	$23,542	$32,013
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest				$57,429	$61,258	$36,635
Cash paid during the year for income taxes				$45,900	$23,400	$14,400
The accompanying notes are an integral part of these consolidated financial statements

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OPPENHEIMER HOLDINGS INC.

Notes to Consolidated Financial Statements

(Expressed in U.S. dollars)

December 31, 2007

1. Summary of Significant Accounting Policies

Basis of Presentation

Oppenheimer Holdings Inc. (”OPY") is incorporated under the laws of Canada. The consolidated financial statements include the accounts of OPY and its subsidiaries (together, the “Company”). The principal subsidiaries of OPY are Oppenheimer & Co. Inc. ("Oppenheimer"), a registered broker dealer in securities, Oppenheimer Asset Management Inc. (“OAM”) and its wholly owned subsidiary, Oppenheimer Investment Management Inc. (“OIM”), both registered investment advisors under the Investment Advisors Act of 1940, Oppenheimer Trust Company, a limited purpose trust company chartered by the State of New Jersey to provide fiduciary services such as trust and estate administration and investment management, and Evanston Financial Corporation (“Evanston”), which is engaged in mortgage brokerage and servicing.  Oppenheimer operates as Fahnestock & Co. Inc. in Lat in America. Oppenheimer owns Freedom Investments, Inc. (“Freedom”), a registered broker dealer in securities, which also operates as the BUYandHOLD division of Freedom, offering on-line discount brokerage and dollar-based investing services. Oppenheimer is a member of the New York Stock Exchange, the American Stock Exchange and several other regional exchanges in the United States.

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for purpose of inclusion in the Company’s annual report on Form 10-K and in its annual report to shareholders. All material intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements.  Since operations are predominantly based in the United States of America, these consolidated financial statements are presented in U.S. dollars.

Certain prior period amounts in the consolidated statements of income have been reclassified to conform with current presentation. Total revenue, total expenses, profit before income taxes, income tax provision and net profit for the years were not affected. See note 17.

Description of Business

The Company engages in a broad range of activities in the securities industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), research, market-making, securities lending activities, trust services, and investment advisory and asset management services.

Use of Estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.

In presenting the consolidated financial statements, management makes estimates regarding valuations of financial instruments, loans and allowances for doubtful accounts,

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the outcome of legal and regulatory matters, the carrying amount of goodwill and other intangible assets, valuation of stock-based compensation plans, and income taxes.Estimates, by their nature, are based on judgment and available information. Therefore, actual results could be materially different from these estimates. A discussion of certain areas in which estimates are a significant component of the amounts reported in the consolidated financial statements follows:

Financial Instruments

The Company's financial instruments are generally short-term in nature or have variable interest rates and as such their carrying values approximate fair value, with the exception of notes receivable from employees, which are carried at cost.  Where available, the Company uses prices from independent sources such as listed market prices, or broker or dealer price quotations. In addition, even where the value of a security is derived from an independent market price or broker or dealer quote, certain assumptions may be required to determine the fair value. For instance, the Company generally assumes that the size of positions in securities that the Company holds would not be large enough to affect the quoted price of the securities if the Company were to sell them, and that any such sale would happen in an or derly manner. However, these assumptions may be incorrect and the actual value realized upon disposition could be different from the current carrying value.

Securities owned, including those pledged and securities sold, but not yet purchased are recorded at estimated fair value on the consolidated balance sheet using quoted market or dealer prices, where available. Gains and losses are recorded in principal transactions on the consolidated statements of income.

Investments, included in securities owned, which have a ready market are valued using quoted market or dealer prices. Investments with no ready market value are stated at estimated fair value as determined in good faith by management. Factors considered in valuing individual investments include available market prices, type of security, purchase price, purchases of the same or similar securities by other investors, marketability, restrictions on disposition, current financial position and operating results of the issuer, and other pertinent information.  Management uses its best judgment in estimating the fair value of these investments. There are inherent limitations in any estimation technique. The fair value estimates presented herein are not necessarily indicative of an amount that the Company could realize in a current transaction. Because of inherent uncertainty of valuation, these est imated fair values do not necessarily represent amounts that might be ultimately realized, since such amounts depend on future circumstances and the differences could be material.

Financial instruments used for asset and liability management are recorded on the consolidated balance sheets at fair value based upon dealer quotes and third-party pricing services. The Company utilizes interest rate swap agreements to manage interest rate risk of its variable rate Senior Secured Credit Note. These swaps have been designated as cash flow hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”.  Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month London Interbank Offering Rate (“LIBOR”).

Loans and Allowances for Doubtful Accounts

Customer receivables, primarily consisting of margin loans collateralized by customer-owned securities, are charged interest at rates similar to other such loans made throughout the industry. Customer receivables are stated net of allowance for doubtful accounts (unsecured or partially secured receivables from customers.)

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The Company also makes loans or pays advances to financial advisors as part of its hiring process. Reserves are established on these receivables if the financial advisor is no longer associated with the Company and the receivable has not been promptly repaid or if it is determined that it is probable the amount will not be collected.

Legal and Regulatory Reserves

The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. Management considers many factors including, but not limited to: the amount of the claim; specifically in the case of client litigation, the amount of the loss in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and legal precedents and case law as well as the timing of the resolution of such matters. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount i s recorded in the results of that period. The assumptions of management in determining the estimates of reserves may be incorrect and the actual disposition of a legal or regulatory

proceeding could be greater or less than the reserve amount.

Intangible Assets

Intangible assets arose upon the acquisition, in January 2003, of the U.S. Private Client and Asset Management Divisions of CIBC World Markets Inc. (the “Oppenheimer Divisions”) and are comprised of customer relationships and trademarks and trade names. Customer relationships are carried at $1.2 million (which is net of accumulated amortization of $3.7 million) and are being amortized on a straight-line basis over 80 months commencing in January 2003. Trademarks and trade names, carried at $31.7 million, which are not amortized, are subject to at least an annual test for impairment to determine if the fair value is less than their carrying amount. Trademarks and trade names recorded as at December 31, 2007 have been tested for impairment and it has been determined that no impairment has occurred.

Goodwill  

Goodwill arose upon the acquisitions of Oppenheimer, Old Michigan Corp., Josephthal & Co. Inc., Grand Charter Group Incorporated and the Oppenheimer Divisions. Goodwill is subject to at least an annual test for impairment to determine if the fair value of goodwill of a reporting unit is less than its carrying amount. Goodwill recorded as at December 31, 2007 has been tested for impairment and it has been determined that no impairment has occurred.

Share-Based Compensation Plans

The Company estimates the fair value of share-based awards using the Black-Scholes option-pricing model and applies to it a forfeiture rate based on historical experience. Key input assumptions used to estimate the fair value of share-based awards include the expected term and the expected volatility of the Company’s Class A Shares over the term of the award, the risk-free interest rate over the expected term, and the Company’s expected annual dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive share-based awards.

Income Taxes

The Company estimates taxes payable and records income tax reserves. These reserves are based on historic experience and may not reflect the ultimate liability. The Company monitors and adjusts these reserves as necessary.

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Revenue Recognition

Brokerage

Customers’ securities and commodities transactions are reported on a settlement date basis, which is generally three business days after trade date for securities transactions and one day for commodities transactions. Related commission income and expense is recorded on a trade date basis.

Principal transactions

Transactions in proprietary securities and related revenue and expenses are recorded on a trade date basis. Securities owned and securities sold, but not yet purchased, are reported at market value generally based upon quoted prices. Realized and unrealized changes in market value are recognized in principal transactions, net in the period in which the change occurs.

Fees

Investment banking fees are recorded on offering date, sales concessions on trade date and other underwriting fees at the time the transaction is substantially completed and income is reasonably determinable.

Asset Management

Asset management fees are generally recognized over the period the related service is provided based on the account value at the valuation date per the respective asset management agreements. In certain circumstances, OAM is entitled to receive performance fees when the return on assets under management exceeds certain benchmark returns or other performance targets. Performance fees are generally based on investment performance over a 12-month period and are not subject to adjustment once the measurement period ends. Such fees are computed as at the fund’s year-end when the measurement period ends and generally are recorded as earned in the fourth quarter of the Company’s fiscal year.  Asset management fees and performance fees are included in advisory fees in the consolidated statements of income. Assets under management are not included as assets of the Company.

Balance Sheet Items

Cash and Cash Equivalents

The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business.

Receivables From/Payables To Brokers and Clearing Organizations

Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. The Company receives cash or collateral in an amount generally in excess of the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis and may require counterparties to deposit additional collateral or return collateral pledged, when appropriate.  

Securities failed to deliver and receive represent the contract value of securities which have not been received or delivered by settlement date.

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Notes Receivable

The Company had notes receivable, net from employees of approximately $44.9 million at December 31, 2007. The notes are recorded in the consolidated balance sheet at face value of approximately $84.7 million less accumulated amortization and reserves of $33.5 million and $6.3 million, respectively, at December 31, 2007. These amounts represent recruiting and retention payments generally in the form of upfront loans to financial advisors and key revenue producers as part of the Company’s overall growth strategy. These loans are generally forgiven over a service period of 3-5 years from the initial date of the loan or based on productivity levels of employees and all such notes are contingent on their continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the employee departs during the service period. Management monitors and compares indi vidual financial advisor production to each loan issued to ensure future recoverability.  Amortization of notes receivable is included in the statements of income in compensation and related expenses.

Office Facilities

Office facilities are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of furniture, fixtures, and equipment is provided on a straight-line basis generally over 3-7 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. Leases with escalating rents are expensed on a straight-line basis over the life of the lease. Landlord incentives are recorded as deferred rent and amortized, as reductions to lease expense, on a straight-line basis over the life of the applicable lease.

Debt Issuance Costs

Debt issuance costs, included in other assets, from the issuance of the Senior Secured Credit Note are reported in the consolidated balance sheet as deferred charges and amortized using the interest method.  Debt issuance costs include underwriting and legal fees as well as other incremental expenses directly attributable to realizing the proceeds of the Senior Secured Credit Note.

Drafts Payable

Drafts payable represent amounts drawn by the Company against a bank.

Foreign Currency Translations

Canadian currency balances have been translated into U.S. dollars as follows: monetary assets and liabilities at exchange rates prevailing at period end; revenue and expenses at average rates for the period; and non-monetary assets and shareholders’ equity at historical rates. Cumulative translation adjustments are immaterial.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”. Deferred income tax assets and liabilities arise from temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements.  Deferred tax balances are determined by applying the enacted tax rates applicable to the periods in which items will reverse.

In June 2006, the FASB issued Interpretation 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and

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measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  

The Company adopted the provisions of FIN 48 on January 1, 2007 which resulted in a cumulative adjustment to opening retained earnings in the amount of $823 thousand and a reclassification of deferred tax liabilities in the amount of $6.1 million to liability for unrecognized tax benefits which was included in accounts payable and other liabilities on the consolidated balance sheet.  See note 10. Management has evaluated its tax positions for the year ended December 31, 2007 and determined that it has no uncertain tax positions requiring financial statement recognition as of December 31, 2007.

Share-Based Payments

The Company has share-based compensation plans. In December 2004, the Financial Accounting Standards Board issued a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”, SFAS No. 123(R), “Share-Based Payment”.  SFAS No. 123(R) requires that share-based payments be accounted for at fair value. The Company commenced expensing share-based compensation awards on January 1, 2006 using the ‘modified prospective method’.  Under that method, the provisions of SFAS No. 123(R) are applied to remaining unvested share-based awards outstanding at December 31, 2005 as well as to share-based awards granted subsequent to adoption. The consolidated financial statements for periods prior to adoption are not restated for the effects of adopting SFAS No. 123(R).

For share-based awards issued prior to the adoption of SFAS No. 123(R), the Company applied Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations in accounting for its stock compensation plans.  Under APB 25, compensation expense was not required to be recognized in the consolidated statement of income so long as the strike price of the options granted was equal to the market value on grant date. Accordingly, the Company did not recognize compensation expense for outstanding stock options. See note 12 for the pro-forma and earnings per share impact, using a fair-value-based calculation for awards issued prior to adoption of SFAS No. 123(R).

Interest Expense

Interest expense is primarily comprised of interest on bank call loans, the Senior Secured Credit Note, the Variable Rate Exchangeable Debentures (“Debentures”), securities loaned, and customer credits.

New Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS 157”), Fair Value Measurements, which provides expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. In addition, SFAS 157 prohibits recognition of “block discounts” for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years with early adoption permitted. T he Company has determined that

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adoption of SFAS 157 will not have a material impact on its consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115, which permits entities to choose to measure many financial instruments and certain other items at fair value.  SFAS 159 provides entities with the option to mitigate volatility in reported earnings by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  In addition, SFAS 159 allows entities to measure eligible items at fair value at specified election dates and to report unrealized gains and losses on items for which the fair value option has been elected in earnings.  SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years with early adoption permitted provided that the entity also elects to apply the provisions of SFAS 157. The Company has determined that adoption of SFAS 159 will not have a material impact on its consolidated financial statements.

2. Cash and Securities Segregated For Regulatory and Other Purposes

Deposits of $39.8 million (2006 - $27.2 million) were held at year-end in special reserve bank accounts for the exclusive benefit of customers in accordance with regulatory requirements. To the extent permitted, these deposits are invested in interest bearing accounts collateralized by qualified securities.

Evanston had client funds held in escrow totaling $27.8 million at December 31, 2007 (2006 -$17.8 million).

3. Receivable from and Payable to Brokers and Clearing Organizations

Amounts are expressed in thousands of dollars.

	As at December 31,
	2007	2006
Receivable from brokers and clearing organizations consist of:
Deposits paid for securities borrowed	$511,978	$529,854
Receivable from brokers	78,125	45,027
Securities failed to deliver	38,626	33,759
Clearing organizations	13,176	4,896
Omnibus accounts	17,672	18,490
Other	12,705	11,888
	$672,282	$643,914

	As at December 31,
	2007	2006
Payable to brokers and clearing organizations consist of:
Deposits received for securities loaned	$759,368	$885,655
Securities failed to receive	49,504	36,810
Clearing organizations and other	153	1,091
	$809,025	$923,556

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4. Securities Owned and Securities Sold, but not yet Purchased (at Market Value)

Amounts are expressed in thousands of dollars.

	As at December 31,
	2007	2006
Securities owned consist of:
Corporate equities and warrants	$48,181	$42,508
Corporate and sovereign obligations	28,329	41,747
U.S. government and agency and state and    municipal government obligations	49,351	49,974
Money market funds	1,564	1,969
Other	1,070	894
	$128,495	$137,092

	As at December 31,
	2007	2006
Securities sold, but not yet purchased consist of:
Corporate equities and warrants	$5,147	$3,609
Corporate obligations	1,051	2,336
U.S. government and agency and state and    municipal government obligations and other	3,215	1,370
	$9,413	$7,315

Securities owned and Securities sold, but not yet purchased, consist of trading and investment securities at market and fair values. Included in securities owned at December 31, 2007 are corporate equities with estimated  fair values of approximately $15.4 million ($14.9 million in 2006), which are related to deferred compensation liabilities to certain employees included in accrued compensation on the consolidated balance sheet. See note 12 for further discussion. Also included in corporate equities in securities owned are investments with estimated fair values of approximately $5.7 million and $6.0 million, respectively, at December 31, 2007 and 2006, which relate to restricted shares of NYSE Group Inc. The Company’s pre-tax profit for the year ended December 31, 2006 reflects a net gain of $13.7 million included in other revenue on the consolidated statements of income, arising from th e exchange of NYSE seats for cash and NYSE Group common shares and the subsequent sale of a portion of such NYSE Group common shares. At December 31, 2007, the Company had pledged securities owned of approximately $1.3 million ($979.0 thousand in 2006) as collateral to counterparties for securities loan transactions which can be sold or repledged.

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5. Office Facilities

Amounts are expressed in thousands of dollars.

			December 31, 2007	December 31, 2006
	Cost	Accumulated depreciation/ amortization	Net book value	Net book value
Furniture, fixtures and equipment	$57,245	$47,035	$10,210	$7,834
Leasehold improvements	26,904	18,774	8,130	8,644
	$84,149	$65,809	$18,340	$16,478

Depreciation and amortization expense, included in occupancy and equipment costs, was $9.7 million, $9.6 million and $9.3 million in the years ended December 31, 2007, 2006 and 2005, respectively.

6. Bank Call Loans

Bank call loans, primarily payable on demand, bear interest at various rates but not exceeding the broker call rate, which was 6% at December 31, 2007. These loans, collateralized by firm and customer securities (with market values of approximately $21.9 million and $38.0 million, respectively, at December 31, 2007) are primarily with two U.S. money center banks. Details of the bank call loans are as follows.

 Amounts are expressed in thousands of dollars, except percentages.

	Year ended December 31,
	2007	2006	2005
Year-end balance	$29,000	$79,500	$139,700
Weighted interest rate (at end of year)	4.631%	5.703%	4.622%
Maximum balance (at any month end)	$102,700	$238,500	$275,200
Average amount outstanding (during the year)  (1)	$42,019	$131,050	$164,733
Average interest rate (during the year)	4.44%	5.33%	3.88%

(1)

The average amount outstanding during the year was computed by adding amounts outstanding at the end of each month and dividing by twelve.

Interest expense for the year ended December 31, 2007 on bank call loans was $1.9 million ($7.5 million in 2006 and $9.3 million in 2005) .

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7. Long-Term Liabilities

Amounts are expressed in thousands of dollars.

Issued	Maturity Date	Interest Rate	December 31, 2007
Senior Secured Credit Note	7/31/2013	7.84%	$83,325

On July 31, 2006, the Company issued a Senior Secured Credit Note in the amount of $125.0 million at a variable interest rate based on LIBOR with a seven-year term to a syndicate led by Morgan Stanley Senior Funding Inc., as agent. Minimum principal repayments equal to 0.25% per quarter are required plus prepayments of principal based on a portion of the Company’s excess cash flow, the net cash proceeds of asset sales, tax refunds over certain limits, awards over certain limits in connection with legal actions or ‘takings’, and debt issuances or other liability financings. The Company estimates that, in April 2008, it will pay down principal of approximately $16.3 million pursuant to the excess cash flow computation as of December 31, 2007. In accordance with the Senior Secured Credit Note, the Company has provided certain covenants to the lenders with respect to the maintenance of a minimum fixed charge ratio and maximum leverage ratio driven from EBITDA and minimum net capital requirements with respect to Oppenheimer. On December 12, 2007, in contemplation of the acquisition described in note 20, certain terms of the Senior Secured Credit Note were amended. In the Company’s view, the most restrictive of the covenants requires that the Company maintain a maximum leverage ratio of 2.0 (total long-term debt divided by EBITDA). At December 31, 2007, the Company was in compliance with the covenants. The interest rate on the Senior Secured Credit Note for the year ended December 31, 2007 was 7.84%. Interest expense, as well as interest paid on a cash basis for the year ended December 31, 2007 on the Senior Secured Credit Note was $8.0 million ($4.3 million for the year ended December 31, 2006). Of the $83.3 million due as at December 31, 2007, $17.0 million is expected to be paid within 12 months.

The obligations under the Senior Secured Credit Note are guaranteed by certain of the Company’s subsidiaries, other than broker-dealer subsidiaries, with certain exceptions, and are collateralized by a lien on substantially all of the assets of each guarantor, including a pledge of the ownership interests in each first-tier broker-dealer subsidiary held by a guarantor, with certain exceptions.

Other

Bank Loans

Subject to a credit arrangement with Canadian Imperial Bank of Commerce (“CIBC”) dated January 2, 2003, the Company had borrowed $50.0 million dollars primarily to finance certain employee retention notes issued during 2003 in connection with the acquisition of the Oppenheimer Divisions. This debt was repaid in full in January 2006.

Variable Rate Exchangeable Debentures (the “Debentures”)

As partial payment for the Oppenheimer Divisions, on January 6, 2003, the Company issued Debentures in the aggregate amount of $160.8 million. The Debentures were exchangeable for approximately 6.9 million Class A Shares of the Company at the rate of $23.20 per share and expired on January 2, 2013. On July 31, 2006 and October 23, 2006, the Company retired $140.8 million and $20.0 million, respectively, of the

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Debentures. During the year ended December 31, 2006, the Company recorded a gain on extinguishment of the Debentures of approximately $4.1 million, which is included in other revenue in the consolidated statement of income.

In connection with the retirement of the Debentures, the Company agreed to make a contingent payment to CIBC if, prior to December 31, 2007, the Company entered into an agreement for the sale of the majority of the Company’s Class A and Class B Shares. The amount of the contingent payment would have been based on the price per share realized by the Company’s shareholders in any such transaction.

Zero Coupon Promissory Note  

On January 2, 2003, in connection with the acquisition of the Oppenheimer Divisions, the Company issued a zero coupon promissory note in the amount of $65.5 million. On December 14, 2007, the Company prepaid the remaining outstanding balance of $9.3 million for cash consideration of $6.8 million, generating a gain on extinguishment of indebtedness of $2.5 million which is included in other income in the consolidated statement of income for the year ended December 31, 2007.

Subordinated Loan

On January 14, 2008, in connection with the acquisition of the New Capital Markets Business (see note 20 for further discussion), the Company issued a subordinated note to CIBC in the amount of $100 million which is due and payable on January 31, 2014 with interest payable on a quarterly basis.  The purpose of this note is to provide regulatory capital to support the operations of the New Capital Markets Business.

8. Share Capital

The Company's authorized share capital, all of which is without par value, consists of (a) an unlimited number of first preference shares issuable in series; (b) an unlimited number of Class A non-voting shares (“Class A Shares”); and (c) 99,680 Class B voting shares (“Class B Shares”). No first preference shares have been issued.

The Class A and the Class B Shares are equal in all respects except that the Class A Shares are non-voting.

The following table reflects changes in the number of Class A Shares outstanding for the years indicated.

	2007	2006	2005
Class A Shares outstanding, beginning of year	12,834,682	12,496,141	13,296,876
Issued to Oppenheimer & Co. Inc. 401(k) Plan	95,425	104,725	64,176
Issued pursuant to share-based compensation plans	336,489	344,516	51,357
Repurchased and cancelled pursuant to the issuer bid	-	(110,700)	(916,268)
Class A Shares outstanding, end of year	13,266,596	12,834,682	12,496,141

Share-based compensation plans are described in note 12.

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Issuer Bid

During the 12-month period that commenced on August 14, 2007, the Company may purchase up to 650,000 Class A Shares by way of a Normal Course Issuer Bid (“Issuer Bid”) through the facilities of the New York Stock Exchange. In the year ended December 31, 2007, the Company did not purchase any Class A Shares under the current Issuer Bid. All shares purchased pursuant to Issuer Bids are cancelled.

Amounts are expressed in thousands of dollars, except per share amounts.

	2007	2006	2005
Class A Shares purchased and cancelled pursuant to an Issuer Bid	-	110,700	916,268
Total consideration	-	$2,255	$19,635
Average price per share	-	$20.37	$21.43

Dividends

In 2007, the Company paid cash dividends to holders of Class A and Class B Shares as follows ($0.40 in 2006 and $0.36 in 2005):

Dividend per share

Record Date

Payment Date

$0.10

February 9, 2007

February 23, 2007

$0.10

May 4, 2007

May 18, 2007

$0.11

August 10, 2007

August 24, 2007

$0.11

November 9, 2007

November 23, 2007

9. Contributed Capital

Contributed capital represents the tax benefit on the difference between market price and exercise price on employee stock options exercised, and since January 1, 2006, includes the impact of expensing stock options in accordance with SFAS 123(R). See note 12 for further discussion.

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10. Income Taxes

The income tax provision shown in the consolidated statements of income is reconciled to amounts of tax that would have been payable (recoverable) from the application of the federal tax rate to pre-tax profit as follows:

	Year ended December 31,
	2007	2006	2005
U.S. federal statutory income tax rate	35%	35%	35%
U.S. state and local income taxes, net of U.S. federal
income tax benefits	6.7%	8.1%	5.6%
Tax exempt income, including dividends	-0.4%	-0.6%	-1.3%
Business promotion and other non-deductible expenses	-	-	3.1%
Other (1)	-0.5%	2.1%	2.6%
Effective income tax rate	40.8%	44.6%	45.0%
(1) In 2005, 2006 and 2007, other primarily includes the effect of tax authority audits.

Income taxes included in the consolidated statements of income represent the following:

Amounts are expressed in thousands of dollars.

	Year ended December 31,
	2007	2006	2005
Current:
U.S. federal tax	$35,241	$25,852	$12,005
State and local tax	9,165	9,047	2,793
	44,406	34,899	14,798
Deferred:
U.S. federal tax	5,700	919	3,312
State and local tax	1,921	55	663
	7,621	974	3,975
	$52,027	$35,873	$18,773

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2007 and 2006 were as follows:

Amounts are expressed in thousands of dollars.

	December 31,
	2007	2006
Deferred tax assets:
Employee deferred compensation plans	$17,844	$9,443
Allowance for doubtful accounts	296	234
Reserve for litigation and legal fees	2,033	5,567
Difference between book and tax depreciation	-	858
Other	2,206	4,911
Total deferred tax assets	22,379	21,013

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	December 31,
	2007	2006
Deferred tax liabilities:
Section 197 amortization of goodwill	22,693	16,916
Involuntary conversion	3,016	6,891
Investment in partnerships	7,283	569
Gain on NYSE Group shares	1,943	1,572
Total deferred tax liabilities	34,935	25,948
Deferred income tax, net	$12,556	$4,935

Goodwill arising from the acquisitions of Josephthal Group Inc. and the Oppenheimer Divisions is being amortized for tax purposes on a straight-line basis over 15 years. The difference between book and tax is recorded as a deferred tax liability.

In the year ended December 31, 2006, an immaterial adjustment was recorded to recognize a deferred tax asset related to the CIBC Deferred Compensation Plan that was purchased as part of the 2003 acquisition of the Oppenheimer Divisions.  The adjustment impacted the balance sheet only as a reduction to goodwill and income taxes payable in the amount of $5.4 million.

On a cash basis, the Company paid income taxes for the years ended December 31, 2007, 2006 and 2005 in the amounts of $45.9 million, $23.4 million and $14.4 million, respectively.

In June 2006, the FASB issued Interpretation 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. (“FIN 48”). This interpretation requires that a tax position be recognized only if it is “more likely than not” to be sustained upon examination, including resolution of related appeals or litigation processes, based solely on its technical merits, as of the reporting date. A tax position that meets the “more likely than not” criterion shall be measured at the largest amount of benefit that is more than fifty percent likely of being realized upon ultimate settlement.

The Company adopted the provisions of FIN 48 on January 1, 2007 which resulted in a cumulative adjustment to opening retained earnings in the amount of $823 thousand and a reclassification of deferred tax liabilities in the amount of $6.1 million to liability for unrecognized tax benefits which was included in accounts payable and other liabilities on the consolidated balance sheet.  The Company’s uncertain tax positions primarily consisted of an election made under the Internal Revenue Code to limit current recognition of property that was involuntarily converted to money as a result of monetary damages received.  The Company recognizes interest accrued on underpayments of income taxes as interest expense and any related statutory penalties as other expenses in its condensed consolidated statement of income. During the year ended December 31, 2007, the Company recorded approximately $676 thousand in inter est related to the involuntary conversion of assets.

In the fourth quarter of 2007, the Company effectively settled with the Internal Revenue Service (“IRS”) related to the involuntary conversion of assets as part of the IRS’s limited scope examination of the 2003 – 2005 tax period without a material impact to the Company’s effective income tax rate. As such, the tax position is no longer uncertain at December 31, 2007.

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Due to its retail branch network, the Company is subject to tax examinations in many state and local jurisdictions.  Tax years under examination vary by jurisdiction and it is not uncommon to have many examinations open at any given time.  Currently, tax examinations are ongoing in New York City (1998 – 2000), New Jersey (2002 – 2005), Florida (2004 – 2006) and Michigan (2002 – 2005).  The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions resulting from these and subsequent years’ examinations.  The Company has established tax reserves that it believes are sufficient in relation to possible additional assessments.  The Company continuously assesses the adequacy of these reserves and believes that the resolution of such matters will not have a material effect on the consolidated balance sheet, although a resolution coul d have a material effect on the Company’s consolidated statement of income for a particular period and on the Company’s effective income tax rate for any period in which resolution occurs. The decrease in the effective tax rate for the year ended December 31, 2007 was a result of favorable resolutions of tax matters during the period.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Amounts are expressed in thousands of dollars.

Balance at January 1, 2007	$ 823
Tax positions taken related to the current year	0
Tax positions taken related to prior years	676
Settlements with taxing authorities	(1,499)
Lapse of applicable statute of limitations	0
Balance at December 31, 2007	$0

11. Earnings Per Share

Basic earnings per share was computed by dividing net profit by the weighted average number of Class A and Class B Shares outstanding. Diluted earnings per share includes the weighted average Class A and Class B Shares outstanding and the effects of Debentures using the if converted method and Class A Share options using the treasury stock method.

Earnings per share has been calculated as follows:

Amounts are expressed in thousands of dollars, except share and per share amounts.

	2007	2006	2005
Basic weighted average number of shares outstanding	13,223,442	12,749,712	13,020,341
Net effect, if converted method	-	4,224,651	6,932,000
Net effect, treasury method	308,845	65,479	-
Diluted common shares (1)	13,532,287	17,039,842	19,952,341

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	2007	2006	2005
Net profit, as reported	$75,367	$44,577	$22,916
Effect of dilutive exchangeable debentures	-	2,454	4,256
Net profit available to shareholders and assumed conversions	$75,367	$47,031	$27,172
Basic earnings per share	$5.70	$3.50	$1.76
Diluted earnings per share	$5.57	$2.76	$1.36

(1) The diluted earnings per share computations do not include the antidilutive effect of the following options:
	2007	2006	2005
Number of antidilutive options and restricted shares, for the period	84,103	1,024,414	1,746,475

As part of the consideration for the 2003 acquisition of the U.S. private client and asset management divisions from CIBC World Markets, the Company issued First and Second Variable Rate Exchangeable Debentures which were exchangeable for approximately 6.9 million Class A Shares of the Company at the rate of $23.20 per share (approximately 35% of the outstanding Class A Shares, if exchanged). On July 31, 2006 and October 23, 2006, the Company redeemed $140.8 million and the remaining $20 million, respectively, of such Debentures thereby extinguishing all such Debentures outstanding.

12. Employee Compensation Plans

Share-based Compensation

Effective January 1, 2006, the Company adopted SFAS No. 123(R), “Share-Based Payment”, which is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”. SFAS No. 123(R) requires share-based payment awards to be accounted for at fair value. Under SFAS No. 123(R), share-based compensation awards that require future service (i.e., are subject to a vesting schedule) are amortized over the relevant service period. The Company adopted SFAS No. 123(R) under the ‘modified prospective method’. Under that method, the provisions of SFAS No. 123(R) are applied to remaining unvested share-based awards outstanding at December 31, 2005 as well as to share-based awards granted subsequent to adoption. The consolidated financial statements for periods prior to adoption are not restated for the effects of adopting SFAS No. 123(R).

The Company estimates the fair value of share-based awards using the Black-Scholes option-pricing model and applies to it a forfeiture rate based on historical experience. The accuracy of this forfeiture rate is reviewed at least annually for reasonableness. Key input assumptions used to estimate the fair value of share-based awards include the expected term and the expected volatility of the Company’s Class A Shares over the term of the award, the risk-free interest rate over the expected term, and the Company’s expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating fair values of the Company’s outstanding unvested share-based awards as of January 1, 2006

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as well as awards granted thereafter. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive share-based awards.

The fair value of each award grant was estimated on the grant date using the Black-Scholes option- pricing model with the following assumptions:

	Grant date assumptions
	2007	2006	2005	2004	2003	2002
Expected term (1)	5 years	5 years	5 years	5 years	5 years	5 years
Expected volatility factor (2)	39.67%	26.57%	23.50%	21.08%	22.61%	27.49%
Risk-free interest rate (3)	4.54%	4.51%	3.89%	3.01%	2.92%	4.10%
Actual dividends (4)	$0.40	$0.38	$0.36	$0.36	$0.36	$0.36
(1)  The expected term was determined based on actual awards, typically five years.
(2) The volatility factor was measured using the weighted average of historical daily price changes of the Company’s Class A Shares over a historical period commensurate to the expected term of the awards.
(3) The risk-free interest rate was based on periods equal to the expected term of the awards based on the U.S. Treasury yield curve in effect at the time of grant.
(4)  Actual dividends were used to compute the expected annual dividend yield.

The Company did not recognize compensation expense for outstanding stock options during the year ended December 31, 2005. Under APB 25, compensation expense was not required to be recognized in the consolidated statement of income so long as the strike price of the options granted was equal to the market value on grant date. The following presents the pro forma income and earnings per share impact, using a fair-value-based calculation, of the Company’s stock-based compensation under SFAS No. 123 with respect to stock options granted prior to January 1, 2006. Amounts are expressed in thousands of dollars except per share amounts.

	Year ended December 31, 2005
Net profit, as reported	$22,916
Stock-based compensation expense that would have been reported in net profit if the fair value provisions of SFAS No. 123 had been applied to all awards	1,526
Pro forma net profit	$21,390
Basic profit per share, as reported	$1.76
Diluted profit per share, as reported	$1.36
Pro forma basic profit per share	$1.64
Pro forma diluted profit per share	$1.29

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Equity Incentive Plan

Under the Company’s 2006 Equity Incentive Plan, adopted December 11, 2006 and its 1996 Equity Incentive Plan, as amended March 10, 2005 (together “EIP”), the Compensation and Stock Option Committee of the board of directors of the Company may grant options to purchase Class A Shares to officers and key employees of the Company and its subsidiaries. Grants of options are made to the Company’s non-employee directors on a formula basis. Options are generally granted for a five-year term and generally vest at the rate of 25% of the amount granted on the second anniversary of the grant, 25% on the third anniversary of the grant, 25% on the fourth anniversary of the grant and 25% six months before expiration. At December 31, 2007, the number of Class A Shares available under the EIP, but not yet awarded, was 715,897.

Stock option activity under the EIP since January 1, 2006 is summarized as follows:

	Year ended December 31, 2007		Year ended December 31, 2006
	Number of shares	Weighted average exercise price	Number of shares	Weighted average exercise price
Options outstanding, beginning of period	1,168,392	$27.93	1,775,641	$27.04
Options granted	79,103	$34.99	43,632	$23.04
Options exercised	(257,491)	$24.96	(284,075)	$26.36
Options forfeited or expired	(10,529)	$24.79	(366,806)	$24.27
Options outstanding, end of period	979,475	$29.32	1,168,392	$27.93
Options vested, end of period	445,964	$28.96	368,967	$27.99
Weighted average fair value of options granted	$13.45	-	$6.26	-

The aggregate intrinsic value of options outstanding as of December 31, 2007 was approximately $12.8 million. The aggregate intrinsic value of options vested as of December 31, 2007 was approximately $6.0 million. The aggregate intrinsic value of options that are expected to vest is $5.9 million as of December 31, 2007.

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The following table summarizes stock options outstanding and exercisable as at December 31, 2007

Range of exercise prices	Number outstanding	Weighted average remaining contractual life	Weighted average exercise price of outstanding options	Number exercisable (vested)	Weighted average exercise price of vested options
$19.99 - $25.00	364,766	1.3 years	$23.45	191,161	$24.08
$25.01 - $36.13	614,709	1.6 years	$32.80	254,803	$32.63
$19.99 - $36.13	979,475	1.5 years	$29.32	445,964	$28.96

The following table summarizes the status of the Company’s non-vested options since December 31, 2006.

	Year ended December 31, 2007
	Number of Options	Weighted average fair value
Non-vested beginning of period	799,425	$6.21
Granted	79,103	$13.45
Vested	(335,138)	$5.91
Forfeited or expired	(9,879)	$5.71
Non-vested end of period	533,511	$7.48

In the year ended December 31, 2007, the Company has included approximately $2.3 million ($3.3 million in 2006 and nil in 2005) of compensation expense in its consolidated statement of income relating to the expensing of stock options.

As of December 31, 2007, there was approximately $2.2 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the EIP. The cost is expected to be recognized over a weighted average period of 1.5 years.

On January 29, 2008, options on 225,136 Class A Shares were awarded to new Oppenheimer employees and options on 3,125 Class A Shares were awarded to current Oppenheimer employees These options will be expensed over 2.5 years and 4.5 years, respectively (the vesting periods).

Stock Appreciation Rights

The Company has awarded Oppenheimer stock appreciation rights (“OARs”) to certain employees as part of their compensation package based on a formula reflecting gross production and length of service. These awards are granted once per year in January with respect to the prior year’s production. The OARs vest five years from grant date and will be settled in cash at vesting. Effective January 1, 2006, with the adoption of SFAS 123(R), OARs are being accounted for as liability awards and are being revalued on a monthly basis. The adjusted liability is being amortized on a straight-line basis over the vesting period.

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The fair value of each OARs award was estimated as at December 31, 2007 using the Black-Scholes option-pricing model.

Grant date	Number of OARs outstanding	Strike price	Remaining contractual life	Fair value as at December 31, 2007
January 10, 2003	93,920	$24.94	9 days	$17.43
January 13, 2004	150,940	$32.78	1 years	$12.47
January 13, 2005	249,030	$24.53	2 years	$19.20
January 13, 2006	268,450	$20.53	3 years	$22.76
January 12, 2007	384,290	$35.44	4 years	$13.99
Total	1,146,630
Total weighted average values		$28.37	2.6 years	$17.26

At December 31, 2007, all outstanding OARs were unvested. The aggregate intrinsic value of OARs outstanding as of December 31, 2007 was approximately $16.0 million. The aggregate intrinsic value of OARs that are expected to vest is $15.1 million as of December 31, 2007. In the year ended December 31, 2007, the Company included approximately $5.5 million ($2.5 million in 2006 and $617 thousand in 2005) of compensation expense in its consolidated statement of income relating to OARs awards. The cumulative liability related to the OARs was approximately $9.1 million as of December 31, 2007.

As of December 31, 2007, there was approximately $9.4 million of total unrecognized compensation cost related to unvested OARs. The cost is expected to be recognized over a weighted average period of 2.6 years.

On January 10, 2008, 512,825 OARs were awarded to Oppenheimer employees related to fiscal 2007 performance. These OARs will be expensed over 5 years (the vesting period).

Employee Share Plan

On March 10, 2005, the Company approved the Oppenheimer & Co. Inc. Employee Share Plan (“ESP”) for employees of the Company and its subsidiaries resident in the U.S. to attract, retain and provide incentives to key management employees. The compensation and stock option committee of the board of directors of the Company may grant stock awards and restricted stock awards pursuant to the ESP. Effective January 1, 2006, with the adoption of SFAS 123(R), ESP awards are being accounted for as equity awards and are valued at grant date fair value.

The Company has awarded restricted Class A Shares to certain employees as part of their compensation package pursuant to the ESP. These awards are granted from time to time throughout the year based upon the recommendation of the compensation and stock option committee of the board of directors of the Company. These ESP awards are priced at fair value on the date of grant and typically require the completion of a service period (determined by the Compensation Committee). Dividends may or may not accrue during the service period, depending on the terms of individual ESP awards. At December 31, 2007, the number of Class A Shares available under the ESP, but not yet awarded, was 535,868.

The following table summarizes the status of the Company’s non-vested ESP awards since December 31, 2006.

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	Number of Class A Shares subject to ESP awards	Weighted average fair value	Remaining contractual life
Non-vested beginning of period	104,264	$23.36	2.3 years
Granted	46,855	$34.14	2.0 years
Vested	(32,362)	$26.11	-
Forfeited or expired	(7,952)	$34.49	-
Non-vested end of period	110,805	$26.32	2.2 years

At December 31, 2007, all outstanding ESP awards were unvested. The aggregate intrinsic value of ESP awards outstanding as of December 31, 2007 was approximately $4.7 million. The aggregate intrinsic value of ESP awards that are expected to vest is $4.5 million as of December 31, 2007. In the year ended December 31, 2007, the Company included approximately $1.1 million ($957 thousand in 2006 and $38 thousand in 2005) of compensation expense in its consolidated statement of income relating to ESP awards.

As of December 31, 2007, there was approximately $1.6 million of total unrecognized compensation cost related to unvested ESP awards. The cost is expected to be recognized over a weighted average period of 2.2 years.

In January 2008, 417,363 restricted Class A Shares were awarded to Oppenheimer employees under the ESP. These restricted shares will be expensed over the vesting period (three years).

In January 2008, the Company issued 41,211 Class A Shares to certain Oppenheimer employees who had elected to take a portion of their year-end bonus in Class A Shares in lieu of cash under the ESP. The cost of these shares (priced at market on January 4, 2008) is included in compensation and related expenses in the consolidated statement of income for the year ended December 31, 2007.

Defined Contribution Plan

The Company, through its subsidiaries, maintains a defined contribution plan covering substantially all full-time U.S. employees. The Oppenheimer & Co. Inc. 401(k) Plan provides that Oppenheimer may make discretionary contributions. Eligible Oppenheimer employees may make voluntary contributions which may not exceed $15,500, $15,000 and $14,000 per annum in 2007, 2006 and 2005, respectively. The Company made contributions to the 401(k) Plan of $5.5 million, $4.5 million and $4.0 million in 2007, 2006 and 2005, respectively.

Supplemental Executive Retirement Program

Old Michigan Corp. sponsors an unfunded Supplemental Executive Retirement Program (“SERP”), which is a non-qualified plan that provides certain former officers additional retirement benefits. Payments under the SERP were $267 thousand in 2007, 2006 and 2005, respectively. At December 31, 2007, benefits payable under the SERP were approximately $266 thousand.

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Deferred Compensation Plans

The Company maintains an Executive Deferred Compensation Plan (“EDCP”) and a Deferred Incentive Plan (“DIP”) in order to offer certain qualified high-performing financial advisors a bonus based upon a formula reflecting years of service, production, net commissions and a valuation of their clients’ assets. The bonus amounts resulted in deferrals in fiscal 2007 of approximately $8.7 million ($6.8 million in 2006 and $5.1 million in 2005). These deferrals normally vest after five years. The liability is being recognized on a straight-line basis over the vesting period. The EDCP also includes voluntary deferrals by senior executives that are not subject to vesting. The Company maintains a company-owned life insurance policy, which is designed to offset approximately 60% of the EDCP liability. The EDCP liability is being tracked against the value of a phantom investment portf olio held for this purpose.  At December 31, 2007, the Company’s liability with respect to the EDCP and DIP totaled $21.8 million and is included in accrued compensation on the consolidated balance sheet as at December 31, 2007.

In addition, the Company is maintaining a deferred compensation plan on behalf of certain employees who were formerly employed by CIBC World Markets. The liability is being tracked against the value of an investment portfolio held by the Company for this purpose. At December 31, 2007, the Company’s liability with respect to this plan totaled $15.4 million. See further discussion in note 4.

The total amount expensed in 2007 for the Company’s deferred compensation plans was $7.1 million ($6.1 million in 2006 and $2.7 million in 2005).

13. Commitments and Contingencies

The Company and its subsidiaries have operating leases for office space, equipment and furniture and fixtures expiring at various dates through 2019. Future minimum rental commitments under such office and equipment leases as at December 31, 2007 are as follows:

Amounts are expressed in thousands of dollars.

2008	$28,237
2009	26,040
2010	24,067
2011	21,094
2012	13,657
2013 and thereafter	33,769
Total	$146,864

Certain of the leases contain provisions for rent increases based on changes in costs incurred by the lessor.

The Company's rent expense for the years ended December 31, 2007, 2006 and 2005 was $33.1 million, $33.3 million and $33.3 million, respectively.

At December 31, 2007, the Company had capital commitments of approximately $2.5 million with respect to its obligations in its role as sponsor for certain private equity funds.

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At December 31, 2007, the Company had collateralized and uncollateralized letters of credit for $260.2 million in favor of Options Clearing Corporation. Collateral for these letters of credit include customer securities with a market value of approximately $353.7 million pledged to two financial institutions.

Many aspects of the Company’s business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in lawsuits creating substantial exposure. The Company is the subject of customer complaints, has been named as defendant or codefendant in various lawsuits seeking, in total, substantial damages and is involved in certain governmental and self-regulatory agency investigations and proceedings. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. The Company is also involved from time to time in governmental and self-regulatory agency investigations and proceedings.  In accordance with SFAS No. 5 "Accounting for Contingencies," the Company has established provisions for estimated losses from pending complaints, legal actions, regulatory investigations and proceedings. While the ultimate resolution of pending litigation and other matters cannot be currently determined, in the opinion of management, after consultation with legal counsel, the Company has no reason to believe that the resolution of these matters will have a material adverse effect on its financial statements. However, the Company’s financial statements could be materially affected during any period if liabilities in that period differ from prior estimates. The materiality of legal matters to the Company’s future operating results depends on the level of future results of operations as well as the timing and ultimate outcome of such legal matters.

14.  Regulatory Requirements

The Company's major subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the Securities and Exchange Commission ("SEC") under Rule 15c3-1 (the “Rule”). Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate customer related debit items, as defined in SEC Rule 15c3-3. At December 31, 2007, Oppenheimer had net capital of $190.6 million which exceeded required net capital by $167.4 million. Freedom computes its net capital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $250 thousand or 6 2/3% of aggregate indebtedness, as defined. At December 31, 2007, Freedom had net capital of $7.5 million, which was $7.2 million in excess of the $250 thousand required to be maintained at that date.

At December 31, 2007, Oppenheimer and Freedom had $26.4 million and $13.4 million, respectively, in cash and U.S. Treasury securities segregated under Federal and other regulations. Oppenheimer Trust Company is subject to regulation by the New Jersey Department of Banking.

In accordance with the SEC’s No-Action Letter dated November 3, 1998, the Company has computed a reserve requirement for the proprietary accounts of introducing firms as of December 31, 2007. The Company had no deposit requirements as of December 31, 2007.

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15. Collateralized Transactions

The Company’s customer financing and securities lending activities require the Company to pledge firm and customer securities as collateral for various financing sources.

The Company monitors the market value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices.

Securities lending

The Company has received securities of approximately $492.8 million under securities borrow agreements of which the Company has repledged approximately $327.2 million under securities loans agreements at December 31, 2007. Included in receivable from brokers and clearing organizations are receivables from four major U.S. broker-dealers totaling approximately $311.5 million at December 31, 2007.

Bank call loans

The Company obtains short-term borrowing through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates but not exceeding the broker call rate. See note 6.

Margin lending

The Company provides margin loans to its clients, which are collateralized by securities in their brokerage accounts.  The Company monitors required margin levels and clients are required to deposit additional collateral, or reduce positions, when necessary.

At December 31, 2007, the Company had approximately $1.4 billionof customer securities under customer margin loans that are available to be pledged, of which the Company has repledged approximately $394.0 million under securities loan agreements, of which approximately $353.7 million is collateral for letters of credit, and approximately $38.0 million with respect to bank call loans.

Securities owned

The Company pledges its securities owned for securities lending and to collateralize bank call loan transactions.  The carrying value of pledged securities that can be sold or repledged by the counterparty was $1.3 million as at December 31, 2007 ($1.0 million as at December 31, 2006). The carrying value of securities owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or repledge the collateral was $21.9 million as at December 31, 2007 ($36.4 million as at December 31, 2006). 

16. Financial Instruments with Off-Balance Sheet Risk and Concentration of Credit Risk

In the normal course of business, the Company's securities activities involve execution, settlement and financing of various securities transactions for customers. These activities may expose the Company to risk in the event customers, other brokers and dealers,

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banks, depositories or clearing organizations are unable to fulfill their contractual obligations.

The Company is exposed to off-balance sheet risk of loss on unsettled transactions in the event customers and other counterparties are unable to fulfill their contractual obligations. It is the Company's policy to periodically review, as necessary, the credit standing of each counterparty with which it conducts business.

Securities sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to repurchase the security in the market at prevailing prices. Accordingly, these transactions result in off-balance-sheet risk, as the Company's ultimate obligation to satisfy the sale of securities sold, but not yet purchased may exceed the amount recognized on the balance sheet. Securities positions are monitored on a daily basis.

The Company's customer financing and securities lending activities require the Company to pledge customer securities as collateral for various financing sources such as bank call loans and securities lending.

Interest Rate Swaps

On September 29, 2006, the Company entered into interest rate swap transactions to hedge the interest payments associated with the floating rate Senior Secured Credit Note, which is subject to change due to changes in 3-Month LIBOR.  These swaps have been designated as cash flow hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”.  Changes in the fair value of the swap hedges are expected to be highly effective in offsetting changes in the interest payments due to changes in 3-Month LIBOR.  The effective portion of the loss on the interest rate swaps was approximately $971 thousand as of December 31, 2007. There was no ineffective portion as at December 31, 2007.

Information on these swaps is summarized in the following table:

Amounts are expressed in thousands of dollars.

	December 31,
	2007	2006
Notional principal amount	$77,000	$99,000
Weighted-average variable interest rate	-	-
Weighted-average fixed interest rate	5.45%	5.45%
Weighted-average maturity	1.1 years	1.4 years

Mortgage-Backed Securities TBAs

The Company has some limited trading activities in pass-through mortgage-backed securities eligible to be sold in the "to-be-announced" or TBA market. TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. Unrealized gains and losses on TBAs are recorded in the consolidated balance sheets in securities owned and securities sold, but not yet purchased, respectively, and in the consolidated statement of income as principal transactions revenue. The credit risk for TBAs is limited to the unrealized market

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valuation gains recorded in the consolidated balance sheets. Market risk is substantially dependent upon the value of the underlying financial instruments and is affected by market forces such as volatility and changes in interest rates.

Futures Contracts

Futures contracts represent commitments to purchase or sell securities at a future date and at a specified price. Credit risk and market risk exist with respect to these instruments. Credit risk associated with the contracts is limited to amounts recorded in the balance sheet. Notional or contractual amounts are used to express the volume of these transactions, and do not represent the amounts potentially subject to market risk.

Unrealized gains and losses on futures contracts are recorded in the consolidated balance sheets in receivable from brokers and clearing organizations and payable to brokers and clearing organizations.

Amounts are expressed in thousands of dollars.

	December 31, 2007			December 31, 2006
	Notional	Assets	Liabilities	Notional	Assets	Liabilities
Interest rate swaps	$77,000	$ -	$1,674	$ 99,000	$  -	$  758
U.S. Treasury futures	$29,600	-	$152	$42,800	$614	-
Purchase of TBAs	$17,262	$232	-	$65,876	$463	-
Sale of TBAs	$17,222	-	$324	$66,989	-	$78

Clearing Arrangements

The Company has a clearing arrangement with Pershing LLC to clear certain transactions in foreign securities. The clearing broker has the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. The Company has a relationship with R.J. O’Brien & Associates which maintains an omnibus account on behalf of Oppenheimer and executes commodities transactions on all exchanges. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can rehypothecate the securities held on behalf of the Company. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no maximum amount assignable to this right. At December 31, 2007, the Company had recorded no liabilities with regard to this right. The Company's policy is to monitor the cre dit standing of these clearing brokers, all counterparties and all clients with which it conducts business.

Variable Interest Entities (“VIE”)

In January 2003, the FASB issued FIN 46, which provides additional guidance on the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, for enterprises that have interests in entities that meet the definition of a VIE, and on December 24, 2003, the FASB issued FIN 46R. FIN 46R requires that an entity shall consolidate a VIE if that enterprise has a variable interest that will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.  The Company is involved with VIEs in its role as sponsor of certain alternative investment funds in which it is neither the primary beneficiary nor a significant variable interest holder

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as its variable interests in these VIEs does not absorb a majority of the VIEs expected losses or receive a majority of the VIEs expected returns.  The Company monitors these variable interests on a periodic basis.

17.  Reclassification of prior period revenue

Certain prior period amounts in the consolidated statement of income have been reclassified to conform with current presentation.

The following table identifies the revenue amounts as reported originally and as reclassified.

	Year ended December 31, 2006		Year ended December 31, 2005
	As reported	Reclassified	As reported	Reclassified
Expressed in thousands of dollars
REVENUE:
Commissions	$370,866	$355,459	$324,227	$322,120
Principal transactions, net	$114,192	$42,834	$101,016	$36,242
Advisory fees	$113,316	$180,602	$111,946	$158,957

The most significant changes are the reclassification from principal transactions, net, to commissions of the portion of the mark-up that gets credited to the financial advisor for over-the-counter transactions where the Company operates in either a riskless principal or market making capacity; and the reclassification from commissions to advisory fees for the Private Client Division's share of fee-based revenue.

18. Segment  Information

The Company has determined its reportable segments based on the Company’s method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company’s segments are: Private Client which includes all business generated by the Company’s 81 branches in 21 U.S. states and 2 offices in Latin America through local broker dealers and Freedom, including commission and fee income earned on client transactions, net interest earnings on client margin loans and cash balances, stock loan activities and financing activities; Capital Markets which includes market-making activities in over-the-counter equities, institutional trading in both fixed income and equities, structured assets transactions, bond trading, trading in mortgage-backed securities, corporate underwriting activities, public finance activities, and syndicate participation; and Asset Management which includes fees from money market funds and the investment management services of Oppenheimer Asset Management Inc. and Oppenheimer’s asset management divisions employing various programs to professionally manage client assets either in individual accounts or in funds. The Company evaluates the performance of its segments and allocates resources to them based upon profitability.

The table below presents information about the reported revenue and profit before income taxes of the Company for the years ended December 31, 2007, 2006 and 2005. The Company’s business is predominantly in the U.S.  Asset information by reportable segment is not reported, since the Company does not produce such information for internal use.

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Amounts are expressed in thousands of dollars.

	Year ended December 31,
	2007	2006	2005
Revenue:
Private Client **	$662,486	$593,896	$511,784
Capital Markets	156,477	124,375	101,237
Asset Management **	87,051	59,237	61,468
Other *	8,383	23,315	5,257
Total	$914,397	$800,823	$679,746
Profit before income taxes:
Private Client **	$84,207	$52,146	$26,884
Capital Markets	27,155	11,547	11,167
Asset Management **	16,944	3,832	4,629
Other *	(912)	12,925	(991)
Total	$127,394	$80,450	$41,689

*For the year ended December 31, 2007, other revenue and profit before income taxes include approximately $2.5 million relating to a gain on extinguishment of the Company’s zero coupon promissory notes. For the year ended December 31, 2006, other revenue and profit before income taxes include approximately $13.7 million relating to the NYSE Group transactions and a gain upon extinguishment of the Company’s Debentures of approximately $4.1 million.

** OAM and the Private Client segment earned performance fees of approximately $21.3 million and $22.0 million, respectively, in 2007 ($7.3 million and $7.4 million, respectively, in 2006 and $2.2 million and $2.3 million, respectively, in 2005). These fees are based on participation as general partner in various alternative investments.

19. Related-Party Transactions

The Company does not make loans to its officers and directors except under normal commercial terms pursuant to client margin account agreements. These loans are fully collateralized by such employee-owned securities.

20. Subsequent Events

Acquisition

On January 14, 2008, the Company acquired CIBC World Markets’ U.S. Investment Banking, Corporate Syndicate, Institutional Sales and Trading, Equity Research, Options Trading and a portion of the Debt Capital Markets business which includes Convertible Bond Trading, Loan Syndication and Trading, High Yield Origination and Trading as well as CIBC Israel Ltd. (the “New Capital Markets Business”). The New Capital Markets Business employs over 600 people and, based on CIBC’s most recently published results, produced over $400 million in revenue for the year ended October 31, 2007. The acquisition of related operations in Asia and the UK is expected to close at a later time, subject to regulatory approval. The acquisition significantly increases the Company’s penetration in capital markets activities.

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The purchase price for the transaction is comprised of (1) an earn-out based on the annual performance of the combined Capital Markets Division of Oppenheimer  and the acquired businesses for the calendar years 2008 through 2012 (in no case to be less than $5 million per year) to be paid in the first quarter of 2013 (the “Earn-Out Date”). On the Earn-Out Date, 25% of the earn-out will be paid in cash and the balance may be paid, at the Company’s option, in any combination of cash, the Company’s Class A Shares (at the then prevailing market price) and/or debentures to be issued by the Company payable in two equal tranches – 50% one year after the Earn-Out Date and the balance two years after the Earn-Out Date, (2) warrants to purchase 1,000,000 Class A non-voting shares of the Company at $48.62 per share exercisable five years from the January 2008 closing, 3) cash consideration at closing eq ual to the fair market value of certain inventories in the amount of $48.2 million, and (4) a payment at closing in the amount of $2.5 million for office facilities. The acquisition will be accounted for using the purchase method.

As part of the transaction, the Company borrowed $100 million from CIBC in the form of a five-year subordinated loan, to support the newly acquired businesses. In addition, CIBC is providing a warehouse facility, initially up to $1.5 billion, to a newly formed U.S. entity to finance loans of middle market companies that will be syndicated and distributed by the Loan Syndication and Loan Trading Groups being acquired. Underwriting of loans pursuant to the warehouse facility will be subject to joint credit approval by Oppenheimer and CIBC.

Dividend

On January 29, 2008, a cash dividend of U.S. $0.11 per share (totaling $1.5 million) was declared payable on February 29, 2008 to Class A and Class B shareholders of record on February 15, 2008.

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21. Quarterly Information (unaudited)

Amounts are expressed in thousands of dollars, except per share amounts.

	Fiscal Quarters
Year ended December 31, 2007	Fourth	Third	Second	First	Year
Revenue	$258,358	$215,173	$226,750	$214,116	$914,397
Profit before income  taxes	$44,305	$27,021	$27,886	$28,182	$127,394
Net profit	$26,537	$16,274	$15,766	$16,790	$75,367
Earnings per share:
Basic	$2.00	$1.23	$1.19	$1.28	$5.70
Diluted	$1.94	$1.19	$1.16	$1.26	$5.57
Dividends per share	$0.11	$0.11	$0.10	$0.10	$0.42
Market price of Class A Shares:
High	$48.18	$57.50	$51.50	$37.66	$57.50
Low	$37.05	$36.75	$32.53	$31.80	$31.80

	Fiscal Quarters
Year ended December 31, 2006	Fourth	Third	Second	First	Year
Revenue	$218,286	$188,463	$193,024	$201,050	$800,823
Profit before income taxes	$21,970	$13,274	$15,795	$29,411	$80,450
Net profit	$10,550	$7,673	$9,137	$17,217	$44,577
Earnings per share:
Basic	$0.82	$0.60	$0.72	$1.36	$3.50
Diluted	$0.80	$0.51	$0.52	$0.93	$2.76
Dividends per share	$0.10	$0.10	$0.10	$0.10	$0.40
Market price of Class A Shares:
High	$36.24	$31.50	$30.50	$21.70	$36.24
Low	$26.99	$23.61	$20.74	$19.71	$19.71
The price quotations above were obtained from the New York Stock Exchange web site.

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.  CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a–15(e) of the Exchange Act. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or its internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision–making can be faulty and that break-downs can occur because of a simple error or omission. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.

The Company confirms that its management, including its Chief Executive Officer and its Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in its reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Changes in Internal Control over Financial Reporting

No changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting, occurred during the quarter ended December 31, 2007.

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Management’s Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth in Part II, Item 8 of this Annual Report on Form 10-K.

Section 303A.12(a) CEO Certification

The Company submitted a Section 12(a) CEO Certification to the New York Stock Exchange on May 16, 2007 with respect to fiscal 2006.

Sarbanes-Oxley Act Section 302 CEO and CFO Certifications

The Company submitted the CEO and CFO Certifications required under Section 302 of the Sarbanes-Oxley Act as exhibits to its Annual Report on Form 10-K for the year ended December 31, 2006.

Item 9B. OTHER INFORMATION

None.

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PART III   

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item will be contained under the caption “Election of Directors” in our definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders to be held May 5, 2008. Information about compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this form will be contained under the caption “Compliance with Section 16(a) Beneficial Ownership Reporting Compliance” in that proxy circular. That information is incorporated herein by reference to the Management Proxy Circular.

STATEMENT OF CORPORATE GOVERNACE PRACTICES, WHISTLEBLOWER POLICY AND COMMITTEE CHARTERS

A copy of the Company’s Statement of Corporate Governance Practices and its Whistleblower Policy, as well as copies of the Charters of the Audit Committee, Compensation and Stock Option Committee and Nominating/Corporate Governance Committee, are posted on the Company’s website at www.opco.com. These documents are available at no charge and can be requested by writing to the Company at its head office or by making an email request to investorrelations@opy.ca.

CODE OF ETHICS

The Company has adopted a Code of Conduct and Business Ethics for Directors, Officers and Employees, which can be found on its website at www.opco.com. This document is available at no charge and can be requested by writing to the Company at its head office or by making an email request to investorrelations@opy.ca.

Item 11. EXECUTIVE COMPENSATION

The information required by this item will be contained under the caption “Compensation and Other Matters” in our definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be contained under the caption “Security Ownership of Beneficial Owners and Management” in our definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders and is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be contained under the caption “Certain Relationships and Related Transactions” under the sub-heading “Indebtedness of Directors and Executive Officers under (1) Securities Purchase and (2) Other Programs” in our definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders and is incorporated herein by reference.

95

Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be contained under the caption “Appointment of Auditors” in our definitive Management Proxy Circular for the 2008 Annual and Special Meeting of Shareholders and is incorporated herein by reference.

96

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	(i)	Financial Statements
		See Item 8 (pages 48-88)
	(ii)	Financial Statement Schedules
		Not Applicable.
	(iii)	Listing of Exhibits
		The exhibits which are filed with this Form 10-K or are incorporated herein by reference are set forth in the Exhibit Index (pages 95-98)
(b)		Exhibits
		See the Exhibit Index included hereinafter on pages 95-98
(c)		Financial Statement Schedules excluded from the annual report to shareholders
		None

97

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 7th day of March, 2008.

OPPENHEIMER HOLDINGS INC.

BY: /s/ E.K. Roberts

E.K. Roberts, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates below indicated.

Signature	Title	Date
/s/ J.L. Bitove	Director	March 7, 2008
J.L. Bitove
/s/ R. Crystal	Director	March 7, 2008
R. Crystal
/s/ A.G. Lowenthal	Chairman, Chief Executive	March 7, 2008
A.G. Lowenthal	Officer (Principal Executive Officer), Director
/s/ K.W. McArthur	Director	March 7, 2008
K.W. McArthur
/s/ A.W. Oughtred	Secretary, Director	March 7, 2008
A.W. Oughtred
/s/ E.K. Roberts	President & Treasurer,	March 7, 2008
E.K. Roberts	(Principal Financial and Accounting Officer), Director
/s/ B. Winberg	Director	March 7, 2008
B. Winberg

98

EXHIBIT INDEX

Unless designated by an asterisk indicating that such document has been filed herewith, the Exhibits listed below have been heretofore filed by the Company pursuant to Section 13 or 15(d) of the Exchange Act and are hereby incorporated herein by reference to the pertinent prior filing.  

Number	Description	Page
2.1	Asset Purchase Agreement dated as of December 9, 2002 and Amendment No. 1 to the Asset Purchase Agreement dated as of January 2, 2003, by and among Fahnestock Viner Holdings Inc., Viner Finance Inc., Canadian Imperial Bank of Commerce and CIBC World Markets Corp. (previously filed as an exhibit to Form 8-K dated January 17, 2003).
2.2	Asset Management Acquisition Agreement dated as of January 2, 2003, by and among Fahnestock Viner Holdings Inc., Fahnestock & Co. Inc., Canadian Imperial Bank of Commerce and CIBC World Markets Corp. (previously filed as an exhibit to Form 8-K dated January 17, 2003).
2.3	Amended and Restated Asset Purchase Agreement dated as of January 14, 2008, by and among Oppenheimer Holdings Inc., Oppenheimer & Co. Inc., Canadian Imperial Bank of Commerce, CIBC World Markets Corp. and Certain Other Affiliates of Canadian Imperial Bank of Commerce and Oppenheimer Holdings Inc. (filed herewith)*
3 (a)	Certificate of  Continuance of Oppenheimer Holdings Inc. dated May 11, 2005 (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2005).
3(b)	By-Laws of Oppenheimer Holdings Inc. (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2005).
4.1	Exchangeable Debenture dated January 6, 2003, issued by E. A. Viner International Co. to Canadian Imperial Bank of Commerce (previously filed as an exhibit to Form 8-K dated January 17, 2003).
4.2	Interim Exchangeable Debenture dated January 6, 2003, issued by E. A. Viner International Co. to Canadian Imperial Bank of Commerce (previously filed as an exhibit to Form 8-K dated January 17, 2003).
4.3	Exchangeable Debenture dated May 17, 2003, issued by E. A. Viner International Co. to Canadian Imperial Bank of Commerce (previously filed as an exhibit to Form 10-K for the year ended December 31, 2003 dated March 11, 2004).
4.4	Variable Rate Exchangeable Debenture, dated July 31, 2006, issued by E. A. Viner International Co. to the Canadian Imperial Bank of Commerce. (previously filed as an Exhibit to Form 8-K dated August 3, 2006).
4.5	Amended and Restated Promissory Note dated January 15, 2003, made by Viner Finance Inc. for the benefit of CIBC World Markets Corp (previously filed as an exhibit to Form 8-K dated January 17, 2003).
4.6	Warrant dated January 14, 2008 No. W-A1 (filed herewith)*

99

4.7 Registration Rights Agreement dated as of January 14, 2008, between Oppenheimer Holdings Inc. and Canadian Imperial Bank of Commerce (filed herewith)*

10.1 Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan, Amended and Restated as at May 17, 1999 (previously filed as an exhibit to Form S-8 dated May 15, 2000).

10.2	Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan Amendment No. 1 dated February 29, 2000 (previously filed as an exhibit to Form 10-K for the year ended December 31, 1999).
10.3	Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan Amendment No. 2 dated May 19, 2001 (previously filed as an exhibit to Form 10-K for the year ended December 31, 2001).
10.4	Fahnestock Viner Holdings Inc. 1996 Equity Incentive Plan Amendment No. 3 dated February 28, 2002 (previously filed as an exhibit to Form S-8 dated December 17, 2002).
10.5	Oppenheimer Holdings Inc. 1996 Equity Incentive Plan Amendment No. 4 dated February 26, 2004 (previously filed as an exhibit to Form S-8 dated July 28, 2004).
10.6	Oppenheimer Holdings Inc. 1996 Equity Incentive Plan Amendment No. 5 dated March 10, 2005 (previously filed as an exhibit to Form 10-Q for the quarterly period ended June 30, 2005).
10.7	Employee Share Plan dated January 1, 2005 (previously filed as an exhibit filed to Form 10-Q for the quarterly period ended June 30, 2005).
10.8	Performance-Based Compensation Agreement between Oppenheimer Holdings Inc. and Albert G. Lowenthal dated March 15, 2005 (previously filed as an exhibit filed to Form 10-Q for the quarterly period ended June 30, 2005).
10.9	Oppenheimer Holdings Inc. 2006 Equity Incentive Plan effective December 11, 2006 (previously filed as an exhibit to Form S-8 dated October 29, 2007).
10.10	Clearing Agreement dated January 14, 2008 between CIBC World Markets Corp. and Oppenheimer & Co. Inc. (filed herewith)*
10.11	Secured Credit Arrangement (Loan Trading Platform) dated as of January 14, 2008 by and among OPY Credit Corp., CIBC Inc., and Canadian Imperial Bank of Commerce  (filed herewith)*
10.12	Subordinated Credit Agreement dated as of January 14, 2008 by and among E.A. Viner International Co., Canadian Imperial Bank  of Commerce and CIBC World Markets Corp. (filed herewith)*
10.13	Warehouse Facility Agreement dated as of January 14, 2008 by and among OPY Credit Corp. and Canadian Imperial Bank of Commerce  (filed herewith)*

10.14 Service Agreement dated as of January 14, 2008, by and between CIBC Delaware Holdings Inc., and Oppenheimer & Co. Inc.  together with Relocation from 300 Madison Avenue letter dated January 14, 2008 (filed herewith)*

100

10.15	Securities Purchase Agreement, dated as of July 31, 2006, by and among Oppenheimer Holdings Inc., E. A. Viner International Co. and the Canadian Imperial Bank of Commerce.  (previously filed as an Exhibit to Form 8-K dated August 3, 2006).
10.16	Senior Secured Credit Agreement, dated as of July 31, 2006, by and among E. A. Viner International Co., as borrower, and the other credit parties thereto from time to time, as guarantors, and the lenders party thereto from time to time, and Morgan Stanley Senior Funding, Inc., as administrative agent and syndication agent, and Morgan Stanley & Co. Incorporated, as collateral agent.  (previously filed as an Exhibit to Form 8-K dated August 3, 2006).
10.17	Amendment No. 1 to Senior Secured Credit Agreement dated as of July 24, 2006 by and among E.A. Viner International Co., Oppenheimer Holdings Inc.,Viner Finance Inc., and Morgan Stanley Senior Funding, Inc.. (filed herewith)*
10.18	Amendment No. 2 to Senior Secured Credit Agreement dated as of December 12, 2007, by and among E.A. Viner International Co., Oppenheimer Holdings Inc.,Viner Finance Inc., and Morgan Stanley Senior Funding, Inc... (filed herewith)*
10.19	Pledge and Security Agreement, dated as of July 31, 2006, by and among E. A. Viner International Co., as borrower, and the other credit parties thereto from time to time, as guarantors, and Morgan Stanley & Co. Incorporated, as collateral agent. (previously filed as an Exhibit to Form 8-K dated August 3, 2006).
23	Consent of independent accountants (filed herewith) *
31.1	Rule 13a – 14(a) 15d – 14(a) Certification signed by A.G. Lowenthal (filed herewith)  *
31.2	Rule 13a – 14(a) 15d – 14(a) Certification signed by E.K. Roberts (filed herewith)  *
32.1	Certification pursuant to 18 U.S.C. Section 1350 signed by A.G. Lowenthal (filed herewith) *
32.2	Certification pursuant to 18 U.S.C. Section 1350 signed by E.K. Roberts (filed herewith) *

101

EX-4

EXECUTION COPY

EXHIBIT 4.6

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE “U.S. SECURITIES ACT”), AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO OPPENHEIMER HOLDINGS INC. (THE “CORPORATION”), (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE CORPORATION (WHICH MAY BE CONDITIONED ON DELIVERY OF A LEGAL OPINION IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION), PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT GOOD DELIVERY OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.  A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT IN CONNECTION WITH A SALE OF THE SECURITIES REPRESENTED HEREBY AT A TIME WHEN THE CORPORATION IS A “FOREIGN ISSUER” AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT UPON DELIVERY OF THIS CERTIFICATE AND AN EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT AND THE CORPORATION, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF THE REGULATION S UNDER THE U.S. SECURITIES ACT.

UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED HEREBY SHALL NOT TRADE SUCH SECURITIES BEFORE MAY 15, 2008. RIGHTS TO TRANSFER AND ASSIGN THE SECURITIES REPRESENTED HEREBY ARE FURTHER RESTRICTED BY THE TERMS HEREOF.

THIS CERTIFICATE, AND THE CLASS A NON-VOTING SHARE PURCHASE WARRANTS EVIDENCED HEREBY, WILL BE VOID AND OF NO VALUE UNLESS EXERCISED BY 5:00 P.M. (TORONTO TIME) 90 DAYS AFTER THE FIFTH ANNIVERSARY OF ISSUANCE.

JANUARY 14, 2008

OPPENHEIMER HOLDINGS INC.

a corporation incorporated under the laws of Canada
and having its principal office at
Suite 1110, P.O. Box 2015
20 Eglinton Avenue West
Toronto, ON
M4R 1K8

NO.  W-A1	1,000,000 WARRANTS
	Each whole warrant entitling the holder to acquire one Class A non-voting share of Oppenheimer Holdings Inc., subject to adjustment as provided herein.

CLASS A NON-VOTING SHARE PURCHASE WARRANTS

THIS IS TO CERTIFY THAT for value received Canadian Imperial Bank of Commerce., having a registered address at 199 Bay Street, 11^th Floor, Commerce Court West, Toronto, Ontario M5L 1A2, (the “Holder”) is the registered holder of the number of Warrants stated above and is entitled, for each whole Warrant represented hereby, to purchase one fully paid and non-assessable Class A non-voting share  (“Shares”) in the capital of Oppenheimer Holdings Inc. (the “Corporation”) commencing at 5:00 p.m. (Toronto Time) on the fifth anniversary of the issuance (the "Initial Exercise Time") and ending at 5:00 p.m. (Toronto Time) on the date which is 90 (ninety) days after the Initial Exercise Time (the “Expiry Time”) at a price per Share of $48.62, subject to adjustment as hereinafter provided (the “Exercise Price”), upon and subject to the following terms and c onditions.

1.

The Warrants represented by this Warrant Certificate have not been registered under the United States Securities Act of 1933 as amended (the “U.S. Securities Act”), and may be offered, sold or otherwise transferred only (A) to the Corporation, (B) outside the United States in compliance with Rule 904 of Regulation S under the U.S. Securities Act, (C) in compliance with the exemption from registration under the U.S. Securities Act provided by Rule 144 or 144A thereunder, if available, and in compliance with any applicable state securities laws, or (D) with the prior written consent of the Corporation (which may be conditioned on delivery of a legal opinion in form and substance satisfactory to the Corporation), pursuant to another exemption from registration under the U.S. Securities Act and any applicable state securities laws.

The presence of legends on this Warrant Certificate may impair the ability of the Holder hereof to effect good delivery of the securities represented hereby on a Canadian stock exchange.  A Warrant Certificate without a legend may be obtained from the registrar and transfer agent in connection with a sale of the securities represented hereby at a time when the Corporation is a “foreign issuer” as defined in Regulation S under the U.S. Securities Act upon delivery of this Warrant Certificate and an executed declaration in a form satisfactory to the registrar and transfer agent and the Corporation, to the effect that such sale is being made in accordance with Rule 904 of Regulation S under the U.S. Securities Act; provided, that if the securities are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act at a time when the Corporat ion is a “foreign issuer” as defined in Regulation S, the legends may be removed by providing a declaration to Mellon Investor Services, LLC, the registrar and transfer agent of the Corporation, as set forth in Schedule “A” hereto (or as the Corporation may prescribe from time to time).

The Warrants may not be exercised in the United States or by or on behalf of a U.S. person (as defined in Regulation S under the U.S. Securities Act) unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and the Corporation receives an opinion of counsel to such effect in form and substance satisfactory to it, provided that an Accredited Investor as defined in Rule 501(a) under the U.S. Securities Act may exercise Warrants that it purchased directly from the Corporation and any Shares issued upon exercise of such Warrants without delivering an opinion of counsel.

The Warrants represented by this Warrant Certificate and the Shares issuable upon exercise of these Warrants are subject to certain resale restrictions under applicable Canadian provincial securities legislation.  In particular, unless permitted under applicable Canadian provincial securities legislation and subject to Section 16 hereof, the Warrants may not be traded before May 15, 2008.  The Holder is advised to seek professional advice as to applicable resale restrictions.

2.

The Holder may exercise all or any number of whole Warrants represented hereby, upon delivering after the Initial Exercise Time and prior to the Expiry Time, to the Corporation at its principal office noted above this Warrant Certificate, together with a duly completed and executed subscription notice in the form attached hereto (the “Subscription Notice”) evidencing the election (which on delivery to the Corporation shall be irrevocable) of the Holder to exercise the number of Warrants set forth in the Subscription Notice (which shall not be greater than the number of Warrants represented by this Warrant Certificate as adjusted from time to time pursuant to Sections 6 and 7 of this Warrant Certificate) and a certified cheque or bank draft payable to the Corporation for the aggregate Exercise Price of all Warrants being exercised. If the Holder is not exercising all Warrants represented by th is Warrant Certificate, the balance of the Warrants shall expire and may not subsequently be exercised.

3.

In lieu of exercising Warrants for cash, the Holder may elect to convert the Warrants (the “Conversion Right”) into that number of Shares determined by multiplying the number of Shares purchasable under this Warrant by the difference between the Current Market Price (as defined in Section 7) and the Exercise Price (as adjusted to the date of such calculations) and dividing the product by such Current Market Price. The Conversion Right may be exercised by the Holder by surrender of this Warrant Certificate at the principal office of the Corporation together with a duly executed Subscription Notice in the form attached hereto indicating the Holder’s intention to exercise the Conversion Right.

4.

The Holder shall be deemed to have become the holder of record of such Shares as of the date on which the duly completed and executed Subscription Notice, this Warrant Certificate and payment for such Shares shall have been received by the Corporation in accordance herewith (the “Exercise Date”); provided, however, that if such date is not a business day in the City of Toronto, Ontario (a “Business Day”) then the Shares shall be deemed to have been issued and the Holder shall be deemed to have become the holder of record of the Shares on the next following Business Day. Within 15 Business Days of the Exercise Date, the Corporation shall issue and deliver (or cause to be delivered) to the Holder, by registered mail or pre-paid courier to his, her or its address specified in the register of the Corporation, one or more certificates for the appropriate number of issued and outstanding Shares.

5.

The Corporation covenants and agrees that, until the Expiry Time, while any of the Warrants represented by this Warrant Certificate shall be outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Shares to satisfy the right of purchase herein provided, as such right of purchase may be adjusted pursuant to Sections 6 and 7 of this Warrant Certificate. All Shares which shall be issued upon the exercise of the right to purchase herein provided for, upon payment therefor of the amount at which such Shares may at the time be purchased pursuant to the provisions hereof, shall be issued as fully paid and non-assessable shares and the holders thereof shall not be liable to the Corporation or its creditors in respect thereof.

6.

The Exercise Price and/or the number of Shares purchasable upon exercise of the Warrants shall be subject to adjustment from time to time in the events and in the manner provided as follows:

(a)

Share Reorganization. If and whenever prior to the Expiry Time the Corporation shall:

(i)

issue Shares or securities exchangeable for or convertible into Shares to holders of all or substantially all of its then outstanding Shares by way of stock dividend or other distribution, or

(ii)

subdivide, redivide or change its outstanding Shares into a greater number of Shares, or

(iii)

consolidate, reduce or combine its outstanding Shares into a lesser number of Shares,

(any of such events in these paragraphs (i), (ii) and (iii) being a “Share Reorganization”), then the Exercise Price shall be adjusted as of the effective date or record date, as the case may be, at which the holders of Shares are determined for the purpose of the Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Shares outstanding on such effective date or record date before giving effect to such Share Reorganization and the denominator of which shall be the number of Shares outstanding as of the effective date or record date after giving effect to such Share Reorganization (including, in the case where securities exchangeable for or convertible into Shares are distributed, the number of Shares that would have been outstanding had such securities been fully exch anged for or converted into Shares on such record date or effective date). From and after any adjustment of the Exercise Price pursuant to this Section 6(a), the number of Shares purchasable pursuant to this Warrant Certificate shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

(b)

Rights Offering. If and whenever prior to the Expiry Time the Corporation shall fix a record date for the issue of rights, options or warrants to all or substantially all of the holders of Shares under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (“Rights Period”), to subscribe for or purchase Shares or securities exchangeable for or convertible into Shares at a price per share to the holder (or having a conversion price or exchange price per Share) of less than 95% of the Current Market Price (as defined in Section 7 hereof) for the Shares on such record date (any of such events being called a “Rights Offering”), then the Exercise Price shall be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Exercise Price in effect immediately p rior to the end of the Rights Period by a fraction:

(i)

the numerator of which shall be the aggregate of:

(A)

the number of Shares outstanding as of the record date for the Rights Offering, and

(B)

a number determined by dividing either

I.

the product of the number of Shares issued or subscribed for during the Rights Period and the price at which such Shares are offered,

or, as the case may be,

II.

the product of the exchange or conversion price per share of such securities offered and the number of Shares for or into which the securities so offered pursuant to the Rights Offering have been exchanged or converted during the Rights Period,

by the Current Market Price of the Shares as of the record date for the Rights Offering; and

(ii)

the denominator of which shall be the number of Shares outstanding after giving effect to the Rights Offering and including the number of Shares actually issued or subscribed for during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering or upon the exercise of the exchange or conversion rights contained in such exchangeable or convertible securities under the Rights Offering.

If the Expiry Time occurs during the period beginning immediately after the record date for a Rights Offering and ending on the last day of the Rights Period, the Holder shall, in addition to the Shares to which the Holder is otherwise entitled upon such exercise in accordance with Section 2 hereof, be entitled to that number of additional Shares equal to the result obtained when the difference, if any, resulting from the subtraction of the Exercise Price as adjusted for such Rights Offering pursuant to this Section 6(b) from the Exercise Price in effect immediately prior to the end of such Rights Offering is multiplied by the number of Shares purchased upon exercise of the Warrants held by such Holder during such period, and the resulting product is divided by the Exercise Price as adjusted for such Rights Offering pursuant to this Section 6(b); provided that the provisions of Section 12 shall be appl icable to any fractional interest in a Share to which such Holder might otherwise be entitled under the foregoing provisions of this Section 6(b). Such additional Shares shall be deemed to have been issued to the Holder immediately following the end of the Rights Period and a certificate for such additional Shares shall be delivered to such Holder within ten Business Days following the end of the Rights Period.

(c)

Special Distribution. If and whenever prior to the Expiry Time the Corporation shall issue or distribute to all or to substantially all the holders of the Shares:

(i)

securities of the Corporation including shares, rights, options or warrants to acquire shares of any class or securities exchangeable for or convertible into or exchangeable into any such shares or cash, property or assets and including evidences of its indebtedness, or

(ii)

any cash, property or other assets,

and if such issuance or distribution does not constitute Dividends Paid in the Ordinary Course (as defined in Section 7), a Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise Price shall be adjusted immediately after the record date for the Special Distribution so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction:

(i)

the numerator of which shall be the amount by which

(A)

the amount obtained by multiplying the number of shares outstanding on such record date by the Current Market Value of the Shares on such record date;

exceeds

(B)

the fair market value (as determined by the directors of the Corporation) of such Special Distribution; and

(i)

the denominator of which shall be the amount in clause (i)(A) above.

(a)

Capital Reorganization. If and whenever prior to the Expiry Time there shall be a reclassification of Shares at any time outstanding or a change of the Shares into other shares or into other securities (other than a Share Reorganization), or a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other corporation or other entity (other than a consolidation, amalgamation, arrangement or merger which does not result in any reclassification of the outstanding Shares or a change of the Shares into other securities), or a transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or other entity (any of such events being herein called a “Capital Reorganization”), the Holder shall be entitled to receive, and shall accept upon the exercise of the right of purchase or conversio n for the same aggregate consideration, in lieu of the number of Shares to which such holder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property which such holder would have been entitled to receive as a result of such Capital Reorganization if, on the record date or effective date thereof, as the case may be, it had been the registered holder of the number of Shares to which such holder was theretofore entitled to subscribe for and purchase; provided however, that no such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken to so entitle the Holder. If determined appropriate by the board of directors of the Corporation, acting reasonably and in good faith, and subject to the prior written approval of the principal stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading to the extent applicable, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Section 6 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Section 6 shall thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares, other securities or other property thereafter deliverable upon the exercise of any Warrant. Any such adjustments shall be made by and set forth in terms and conditions supplemental hereto approved by the board of directors of the Corporation, acting reasonably and in good faith.

(b)

If and whenever at any time prior to the Expiry Time, the Corporation takes any action affecting its Shares to which the foregoing provisions of this Section 6, in the opinion of the board of directors of the Corporation, acting reasonably and in good faith, are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes thereof, or would otherwise materially affect the rights of the Holder hereunder, then the Corporation shall execute and deliver to the Holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid in such a manner as the board of directors of the Corporation may determine to be equitable in the circumstances, acting reasonably and in good faith. The failure of the taking of action by the board of directors of the Corporation to so provide for any adjustment on or prior to the effective date of any action or occurrence giving rise to such state of facts will be conclusive evidence that the board of directors has determined that it is equitable to make no adjustment in the circumstances.

1.

The following rules and procedures shall be applicable to the adjustments made pursuant to Section 6:

(a)

The adjustments provided for in Section 6 are cumulative, and shall, in the case of adjustments to the Exercise Price be computed to the nearest one-tenth of one cent and shall be made successively whenever an event referred to therein shall occur, subject to the following paragraphs of this Section 7.

(b)

No adjustment in the Exercise Price or in the number of Shares purchasable upon exercise of Warrants shall be made in respect of any event described in Section 6, other than the events referred to in Sections 6(a)(ii) and (iii), if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if it had exercised its Warrants prior to or on the effective date or record date of such event. The terms of the participation of the Holder in such event shall be subject to the prior written approval of the principal stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading to the extent applicable.

(c)

No adjustment in the Exercise Price shall be made pursuant to Section 6 in respect of the issue from time to time:

(i)

of Shares purchasable on exercise of the Warrants represented by or issued concurrently with this Warrant Certificate;

(ii)

of Shares issuable pursuant to Section 3.04 of the Amended and Restated Asset Purchase Agreement, dated as of January 14, 2008, by and among, among others, the Corporation, Oppenheimer & Co. Inc., Canadian Imperial Bank of Commerce, CIBC World Markets Corp., and CIBC World Markets plc;

(iii)

in respect of the issue from time to time as Dividends Paid in the Ordinary Course of Shares to holders of Shares who exercise an option or election to receive substantially equivalent dividends in Shares in lieu of receiving a cash dividend pursuant to a dividend reinvestment plan or similar plan adopted by the Corporation in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading and applicable securities laws; or

(iv)

of Shares pursuant to any stock option, stock option plan, stock purchase plan or benefit plan in force at the date hereof for directors, officers, employees, advisers or consultants of the Corporation, as such option or plan is amended or superseded from time to time in accordance with the requirements of the principal stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading and applicable securities laws, and such other stock option, stock option plan, stock purchase plan or benefit plan as may be adopted by the Corporation in accordance with the requirements of the principal stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading and applicable securities laws;

and any such issue shall be deemed not to be a Share Reorganization or Capital Reorganization.

(d)

If the Corporation shall set a record date to determine the holders of the Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and shall, thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or purchase rights, legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of Shares purchasable upon exercise of any Warrant shall be required by reason of the setting of such record date.

(e)

As a condition precedent to the taking of any action which would require any adjustment in any of the subscription rights pursuant to this Warrant Certificate, including the Exercise Price and the number or class of shares or other securities which are to be received upon the exercise thereof, the Corporation shall take any corporate action which may be necessary in order that the Corporation have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the shares or other securities which the holder of such Warrant Certificate is entitled to receive on the full exercise thereof in accordance with the provisions hereof.

(f)

For the purposes of this Warrant Certificate, “Current Market Price” of a Share at any date shall be calculated as the price per Share equal to the weighted average price at which the Shares have traded in the principal stock exchange or, if the Shares are not listed, the over-the-counter market, on which the Shares are then listed or posted for trading during the 20 consecutive trading days (on each of which at least 500 Shares are traded in board lots) ending on the fifth trading day immediately prior to such date as reported by such market or exchange in which the Shares are then trading or quoted. If the Shares are not then traded in the over-the-counter market or on a recognized stock exchange, the Current Market Price of the Shares shall be the fair market value of the Shares as determined in good faith by the board of directors of the Corporation after consultation with a nationally or internationally recognized investment dealer or investment banker.

(g)

For the purposes of this Warrant Certificate, “Dividends Paid in the Ordinary Course” means dividends paid on the outstanding Shares in any financial year of the Corporation, whether in cash or in shares of the Corporation, to the extent that the amount or value of such dividends in the aggregate does not exceed the greater of:

(i)

100% of the aggregate amount or value of dividends paid by the Corporation on the Shares in its immediately preceding financial year; or

(ii)

5% of the consolidated net income (before extraordinary items but after dividends payable on all shares ranking senior to or on a parity with the Shares with respect to the payment of dividends) of the Corporation for its immediately preceding financial year.

For the purposes of the foregoing definition any Shares paid as a dividend shall be valued at their Current Market Price at the record date for such dividend and any other shares of the Corporation shall be valued in like manner.

(h)

In the absence of a resolution of the board of directors of the Corporation fixing a record date for any dividend or distribution referred to in Section 6(a)(i) or any Rights Offering or Special Distribution, the Corporation shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected.

(i)

Any question that at any time or from time to time arises with respect to the amount of any adjustment to the Exercise Price or other adjustments pursuant to Section 6 shall be conclusively determined by a firm of independent chartered accountants (who may be the Corporation’s auditors) and shall be binding upon the Corporation and the Holder. Notwithstanding the foregoing, such determination shall be subject to the prior written approval of the principal stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading, to the extent applicable. If any such determination is made, the Corporation shall notify the Holder in the manner contemplated in Section 19 describing such determination.

2.

On the happening of each and every such event set out in Section 6, the applicable provisions of this Warrant Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Corporation shall take all necessary action so as to comply with such provisions as so amended.

3.

If Section 6 would require that an adjustment shall be effective immediately after a record date for an event referred to herein, the Corporation may defer, until the occurrence of such an event:

(a)

issuing to the holder of any Warrant exercised after such record date and before the occurrence of such event, the additional Shares issuable upon such exercise by reason of the adjustment required by such event, and

(b)

delivering to such holder any distributions declared with respect to such additional Shares after such Exercise Date and before such event;

provided, however, that the Corporation shall deliver or cause to be delivered to such holder, an appropriate instrument evidencing such holder’s right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Shares purchasable on the exercise of any Warrant and to such distributions declared with respect to any additional Shares issuable on the exercise of any Warrant.

4.

At least 10 Business Days prior to the effective date or record date, as the case may be, of (i) any event which requires or might require adjustment in any of the subscription rights pursuant to this Warrant Certificate, including the Exercise Price and the number of Shares which are purchasable upon the exercise thereof, or (ii) any event contemplated by Section 7(b) with respect to which no adjustment in the Exercise Price shall be required as a result of the Holder's eligibility to participate in such event, or, in either case, such longer period of notice as the Corporation shall be required to provide holders of Shares in respect of any such event, the Corporation shall notify the Holder of the particulars of such event and, if applicable and determinable, the required adjustment and the computation of such adjustment. If any applicable adjustment for which such notice has been given is not then determinable, the Corporation shall promptly after such adjustment is determinable notify the Holder of the adjustment and the computation of such adjustment.

5.

The Corporation shall maintain at its principal office a register of holders in which shall be entered the names and addresses of the holders of the Warrants and of the number of Warrants held by them.  Such register shall be open at all reasonable times for inspection by the Holder.  The Corporation shall notify the Holder forthwith of any change of address of the principal office of the Corporation.

6.

The Corporation shall not be required to issue fractional Shares in satisfaction of its obligations hereunder. If any fractional interest in a Share would, except for the provisions of this Section 12, be deliverable upon the exercise of a Warrant, the Corporation shall in lieu of delivering the fractional Shares therefor satisfy the right to receive such fractional interest by payment to the holder of such Warrant of an amount in cash equal (computed in the case of a fraction of a cent to the next lower cent) to the value of the right to acquire such fractional interest on the basis of the Current Market Price at the Exercise Date.

7.

Subject as herein provided, all or any of the rights conferred upon the Holder by the terms hereof may be enforced by the Holder by appropriate legal proceedings.

8.

The registered Holder of this Warrant Certificate may at any time up to and including the Expiry Time, upon the surrender hereof to the Corporation at its principal office, exchange this Warrant Certificate for one or more Warrant Certificates entitling the Holder to subscribe in the aggregate for the same number of Shares as is expressed in this Warrant Certificate. Any Warrant Certificate tendered for exchange shall be surrendered to the Corporation and cancelled.

9.

If this Warrant Certificate becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion acting reasonably impose, issue and deliver to the Holder a new Warrant Certificate of like denomination, tenor and date as the Warrant Certificate so stolen, lost, mutilated or destroyed.

10.

This Warrant Certificate and the Warrants represented hereby are not transferable and are not assignable except with the prior consent of the Corporation and subject to compliance with all applicable laws.  Notwithstanding the foregoing, the Holder may transfer the Warrants represented hereby to a wholly-owned direct or indirect subsidiary of the Holder without the prior written consent of the Corporation, subject to compliance with all applicable laws and the other provisions hereof.

11.

Nothing contained herein shall confer any right upon the registered holder hereof or any other person to subscribe for or purchase any shares of the Corporation at any time subsequent to the Expiry Time. After the Expiry Time this Warrant Certificate and all rights hereunder shall be void and of no value.

12.

Except as expressly set out herein, the holding of this Warrant Certificate or the Warrants represented hereby shall not constitute a Holder hereof a holder of Shares nor entitle it to any right of interest in respect thereof.

13.

Unless herein otherwise expressly provided, any notice to be given hereunder to the Holder shall be deemed to be validly given if such notice is given by personal delivery or registered mail to the attention of the Holder at its registered address recorded in the registers maintained by the Corporation. Any notice so given shall be deemed to be validly given, if delivered personally, on the day of delivery and if sent by post or other means, on the fifth Business Day next following the sending thereof. In determining under any provision hereof the date when notice of any event must be given, the date of giving notice shall be included and the date of the event shall be excluded. All costs in connection with the giving of notices contemplated by this Warrant Certificate shall be borne by the Corporation.

14.

This Warrant Certificate is binding upon the Corporation and its successors and assigns.

15.

This Warrant Certificate and the Warrants represented hereby shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

16.

Concurrently with the execution and delivery of this Warrant Certificate, the Corporation and the Holder have entered into a Registration Rights Agreement, dated as of               , 200_, pursuant to which the Holder has certain rights with respect to the registration of Shares purchasable upon exercise of Warrants under applicable securities laws.

IN WITNESS WHEREOF this Warrant Certificate has been executed on behalf of Oppenheimer Holdings Inc. as of the 14th day of January, 2008.

OPPENHEIMER HOLDINGS INC.
By:
	Authorized Signing Officer

- 2 -

SUBSCRIPTION NOTICE

TO:

OPPENHEIMER HOLDINGS INC.

Suite 1110, P.O Box 2015
20 Eglinton Avenue West
Toronto, ON, M4R 1K8

(a)

The undersigned registered Holder of the attached Warrant Certificate, hereby irrevocably elects (please check the correct box):

œ

to subscribe for ________________ Class A non-voting shares (“Shares”) (or such number of Shares or other securities or property to which such subscription entitles the undersigned in lieu thereof or in addition thereto under the Warrant Certificate) of Oppenheimer Holdings Inc. at the price per Share in United States funds of $48.62 (or such adjusted price which may be in effect under the provisions of the Warrant Certificate) and in payment of the exercise price encloses a certified cheque, bank draft or money order in lawful money of Canada payable to the order of Oppenheimer Holdings Inc. or its successor corporation; or

œ

to convert the Warrants represented by the attached Warrant Certificate into that number of Shares in accordance with Section 3 of the Warrant Certificate.

(b)

The Subscriber delivers herewith the above-mentioned Warrant Certificate entitling the undersigned to subscribe for the above-mentioned number of Shares.

The undersigned hereby directs that the said Shares be registered as follows:

Name(s) in full	Address(es) (including Postal Code)	Number of Shares
		Total:________

(Please print full name in which share certificates are to be issued.  If any of the Shares are to be issued to a person or persons other than the Holder, the Holder must pay to the Corporation all requisite taxes or other governmental charges.)

The Subscriber hereby certifies that the undersigned is not a U.S. Person or a person in the United States, and is not acquiring any of the Shares hereby subscribed for the account or benefit of a U.S. Person or a person in the United States, and none of the persons listed in paragraph (b) above is a U.S. Person or a person in the United States, other than an Accredited Investor as defined in Rule 501(a) under the U.S. Securities Act of 1933, as amended.  For purposes hereof the terms “United States” and “U.S. Person” shall have the meanings ascribed to them in Regulation S under the U.S. Securities Act of 1933, as amended.

DATED this                      day of                              , 20__.

(Signature of Subscriber)

(Print Name of Subscriber)

(Address of Subscriber in full)

The certificates will be mailed by registered mail to the address appearing in this Subscription Notice.

- 3 -

SCHEDULE “A”

FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:

Oppenheimer Holdings Inc.

AND TO:

[______________________________]

as the registrar and transfer agent

for the Class A non-voting Shares of

Oppenheimer Holdings Inc.

Toronto, Ontario

The undersigned (A) acknowledges that the sale of the securities of Oppenheimer Holdings Inc. (the “Corporation”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and (B) certifies that (1) the undersigned is not an “affiliate” of the Corporation as that term is defined in Rule 405 under the U.S. Securities Act, a “distributor” or an affiliate of a “distributor”, (2) the offer of such securities was not made to a person in the United States and at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer was outside the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any “directed selling efforts” in the United S tates in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing-off” the resale restrictions imposed because the securities are “restricted securities” as that term is described in Rule 144(a)(3) under the U.S. Securities Act, (5) the seller does not intend to replace such securities with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act.  Unless otherwise specified, terms set forth above in quotation marks have the meanings given to them by Regulation S.

DATED:  

By:

Name:

EX-2

EXECUTION COPY

EXHIBIT 2.3

AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT

BY AND AMONG

OPPENHEIMER HOLDINGS INC.

OPPENHEIMER & CO. INC.

CANADIAN IMPERIAL BANK OF COMMERCE

CIBC WORLD MARKETS CORP.

AND

CERTAIN OTHER AFFILIATES OF CANADIAN IMPERIAL BANK OF COMMERCE AND OPPENHEIMER HOLDINGS INC. IDENTIFIED HEREIN




DATED AS OF JANUARY 14, 2008

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

Section 1.01

Certain Definitions

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

Section 2.01

Purchase and Sale of the Purchased Assets

Section 2.02

Real Property Leases

Section 2.03

Excluded Assets

Section 2.04

Assumption of Liabilities

Section 2.05

Assigned Engagements; Pending Syndications

Section 2.06

Prorations

Section 2.07

Consent of Third Parties

Section 2.08

Designated Buyer Affiliates

Section 2.09

Initial Closing

Section 2.10

Subsequent Closings

Section 2.11

Schedules

Section 2.12

Impact of Failure to Obtain Permits.

ARTICLE III

CONSIDERATION

Section 3.01

Closing Date Consideration

Section 3.02

Post-Closing Adjustments for Initial Closing Payments

Section 3.03

Deferred Purchase Price

Section 3.04

Payment of Deferred Purchase Price

Section 3.05

Reporting Covenants Relating to Deferred Purchase Price

Section 3.06

Review of Allocation Amounts

Section 3.07

Covenants for the Protection of the Deferred Purchase Price

Section 3.08

C Israel Indebtedness

Section 3.09

Allocation of Consideration

Section 3.10

Interim Results

ARTICLE IV
LABOR, EMPLOYMENT, BENEFITS AND RETENTION

Section 4.01

C Front Office Employees

Section 4.02

C Infrastructure Employees

Section 4.03

On-Campus Interview Offerees.

Section 4.04

Transferred Employees.

Section 4.05

Employment-Related Liabilities for Transferred C Employees

Section 4.06

Transferred C Employees

Section 4.07

Credit for Service

Section 4.08

401(k) Plan

Section 4.09

Pre-Closing Commissions

Section 4.10

Certain Plans

Section 4.11

[Intentionally Omitted]

Section 4.12

WARN Act.

Section 4.13

C Bonuses

Section 4.14

COBRA

Section 4.15

No Third-Party Beneficiaries

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLERS

Section 5.01

Organization; Authority

Section 5.02

No Violation; Consents and Approvals

Section 5.03

Absence of Undisclosed Liabilities; Financial Information

Section 5.04

Absence of Certain Changes or Events

Section 5.05

Title to Assets; Sufficiency

Section 5.06

Intellectual Property

Section 5.07

Legal Proceedings

Section 5.08

ERISA

Section 5.09

Labor Matters

Section 5.10

Certain Contracts and Arrangements

Section 5.11

Compliance with Laws; Licenses

Section 5.12

Brokers

Section 5.13

Taxes

Section 5.14

Broker-Dealer Matters

Section 5.15

Investment Purpose

Section 5.16

C Israel

Section 5.17

Insurance

Section 5.18

Disclosure

Section 5.19

No Other Representations or Warranties

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER PARENT AND BUYER

Section 6.01

Organization; Authority

Section 6.02

No Violation; Consents and Approvals

Section 6.03

Legal Proceedings

Section 6.04

Brokers

Section 6.05

Commission Filings

Section 6.06

Financial Statements

Section 6.07

Absence of Undisclosed Liabilities

Section 6.08

Capitalization

Section 6.09

Sufficient Funds

Section 6.10

Buyer Parent Shares

Section 6.11

Transferred O Businesses

Section 6.12

Broker-Dealer Matters

Section 6.13

Tax Status of Viner

Section 6.14

Disclosure

Section 6.15

No Other Representations or Warranties

ARTICLE VII

COVENANTS OF THE PARTIES

Section 7.01

Conduct of the Transferred C Businesses

Section 7.02

Conduct of the Transferred O Businesses

Section 7.03

Access; Confidentiality; Non-Disparagement, Etc.

Section 7.04

Best Efforts

Section 7.05

Consents

Section 7.06

HSR Act

Section 7.07

Regulatory Matters

Section 7.08

Public Announcements

Section 7.09

Tax Matters

Section 7.10

Reservation of Stock

Section 7.11

Cooperation

Section 7.12

No Solicitation

Section 7.13

Absence of Other Restrictive Covenants

Section 7.14

Use of Name

Section 7.15

Account Conversion and Technology Migration

Section 7.16

[Intentionally Omitted]

Section 7.17

Financing Transactions

Section 7.18

Transfer of Employee Permits

ARTICLE VIII

CONDITIONS TO OBLIGATIONS OF SELLER

Section 8.01

Conditions

ARTICLE IX

CONDITIONS TO OBLIGATIONS OF BUYER

Section 9.01

Conditions.

ARTICLE X

CONDITIONS TO SUBSEQUENT CLOSINGS

Section 10.01

Buyer and Buyer Parent Conditions

Section 10.02

Seller Conditions

ARTICLE XI

TERMINATION, AMENDMENT AND WAIVER

Section 11.01

Termination Prior to Initial Closing

Section 11.02

Procedure and Effect of Termination Prior to Initial Closing

Section 11.03

Partial Termination after Initial Closing

Section 11.04

Procedure and Effect of Partial Termination after Initial Closing

Section 11.05

Other Remedies

ARTICLE XII

FEES AND EXPENSES: SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

Section 12.01

Fees and Expenses

Section 12.02

Survival of Representations

Section 12.03

Sellers' Agreement to Indemnify

Section 12.04

Sellers' Limitation of Liability

Section 12.05

Buyer Parent's and Buyer's Agreement to Indemnify

Section 12.06

Buyer Parent's and Buyer's Limitation of Liability

Section 12.07

Third Party Claims

Section 12.08

Other Claims

Section 12.09

Other Indemnification Provisions

ARTICLE XIII

MISCELLANEOUS

Section 13.01

Further Assurances

Section 13.02

Notices

Section 13.03

Bulk Sales Laws

Section 13.04

Mail Received After Closing

Section 13.05

Entire Agreement

Section 13.06

Severability

Section 13.07

Binding Effect; Assignment

Section 13.08

No Third-Party Beneficiaries

Section 13.09

Counterparts

Section 13.10

Headings

Section 13.11

Governing Law; Jurisdiction

Section 13.12

WAIVER OF JURY TRIAL

Section 13.13

Specific Performance

Section 13.14

Amendment, Modification and Waiver

Section 13.15

No Setoff

SCHEDULES

Schedule A   

-

C Israel Indebtedness
Schedule B   

-

Credit Review Personnel

Schedule C

-

Loan Portfolio Management Group

Schedule D   

-

Excluded Accounts

Schedule 2.01(a)

-

Purchased FFE

Schedule 2.01(b)

-

Personal Property Leases

Schedule 2.01(d)

-

Assigned Engagements and Assigned Engagement Receivables

Schedule 2.01(e)

-

Certain Assigned C Contracts

Schedule 2.01(h)

-

Assigned Permits

Schedule 2.01(i)

-

Transferred Accounts

Schedule 2.02(b)

-

Assumed Leases

Schedule 2.04(b)

-

Certain Excluded C Liabilities

Schedule 3.01(a)

-

Principles for Calculation of FFE Purchase Price

Schedule 3.01(b)

-

TS Purchase Price Illustration

Schedule 3.03(a)

-

Allocated Amount Formula

Schedule 3.03(b)

-

Calculation of Operating Income

Schedule 3.03(b)(iv)

-

Operating Income Reporting Illustration

Schedule 3.03(b)(vi)

-

Interest Rate Matters and Adjustment to Interest Rate on MS

Facility

Schedule 3.03(c)

-

Allocated Amount Illustration

Schedule 4.01

-

Transferred C Front Office Employees

Schedule 4.01(a)

-

Legal and Compliance Employees

Schedule 4.01(i)

-

UK Employees

SELLER DISCLOSURE SCHEDULE

Section 5.02(b)

-

Consents and Approvals

Section 5.03

-

Undisclosed Liabilities

Section 5.05(a)

-

Liens

Section 5.06(a)

-

Transferred C Business Applications and Intellectual Property

Rights

Section 5.06(b)

-

Agreements Pertaining to Intellectual Property

Section 5.06(c)

-

Intellectual Property Matters

Section 5.06(d)

-

Intellectual Property Conflicts

Section 5.07

-

Legal Proceedings

Section 5.08(a)

-

Benefit Plans

Section 5.08(c)

-

Severance; Vesting

Section 5.08(d)

-

Employee Matters

Section 5.09(a)

-

Labor Matters

Section 5.09(b)

-

WARN Act Issues

Section 5.10(a)

-

Contracts

Section 5.10(b)

-

Contract Disclosures

Section 5.10(c)

-

Certain Consents

Section 5.10(e)

-

Non-Cash Assigned Engagement Receivables

Section 5.11(a)

-

Permits

Section 5.11(b)

-

Seller Registered Representatives

Section 5.11(c)

-

Compliance

Section 5.13

-

Tax Matters

Section 15.14(c)

-

Broker Dealer Matters – Statutory Disqualifications

Section 15.14(e)

-

Broker Dealer Matters – Compliance

Section 15.14(f)

-

Broker Dealer Matters – Registrations

Section 15.14(g)

-

Broker Dealer Matters – SRO Memberships

Section 5.16(b)

-

C Israel Permits

Section 5.16(c)

-

C Israel Financial Statements

Section 5.16(d)

-

C Israel Undisclosed Liabilities

Section 5.16(e)

-

C Israel Support Agreements

Section 7.01

-

Conduct of the Transferred C Businesses

BUYER DISCLOSURE SCHEDULE

Section 6.02(b)

-

Consents and Approvals

Section 6.03

-

Litigation

Section 6.11(a)(i)

-

Permits

Section 6.11(a)(ii)

-

Employee Proceedings

Section 6.12(d)

-

Broker – Dealer Matters – General

Section 6.12(e)

-

Broker – Dealer Matters – Registrations

Section 6.12(f)

-

Broker – Dealer Matters – SRO Memberships

Section 7.02

-

Conduct of the Transferred O Businesses

EXHIBITS

Form of Warrant

A

Form of Viner Debenture

B

Form of Registration Rights Agreement

C

Terms of Service Agreement

D

Form of Clearing Agreement

E

Form of Research Agreement

F

Form of Electronic Trading Agreement

G

Terms of Loan Trading Facility Agreement

H

Form of Subordinated Term Loan Facility Agreement

I

Terms of Warehouse Facility Agreement

J

-i-

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT, dated as of January 14, 2008 (the "Agreement"), by and among Oppenheimer Holdings Inc., a Canadian corporation ("Buyer Parent"), Oppenheimer & Co. Inc., a New York corporation and a wholly-owned indirect broker/dealer subsidiary of Buyer Parent ("Buyer"), Canadian Imperial Bank of Commerce, a Canadian chartered bank ("Seller Parent"), CIBC World Markets Corp., a Delaware corporation and a wholly-owned indirect broker/dealer subsidiary of Seller Parent (the "Company"), and CIBC World Markets plc, a public limited company organized under the laws of England and a wholly-owned direct broker/dealer subsidiary of Seller Parent ("UK Seller").  Each of Seller Parent, the Company and UK Seller is referred to herein individually as a &qu ot;Seller" and collectively as "Sellers."  Capitalized terms used herein have the meanings set forth in Article I.

W I T N E S S E T H:

WHEREAS, the parties entered into an Asset Purchase Agreement, dated as of November 2, 2007, and desire to amend and restate such agreement to read as set forth herein;

WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire to sell to Buyer, certain assets of Sellers constituting the Transferred C Businesses, as currently conducted by Sellers, upon the terms and subject to the conditions hereinafter set forth;

WHEREAS, upon the terms and subject to the conditions hereinafter set forth, at or following the Initial Closing, certain employees of Sellers will be offered employment with Buyer or a Designated Buyer Affiliate;

WHEREAS, in accordance with the O Transfer and Support Agreement, at or prior to the Initial Closing, Buyer will establish the OIB Division as a new division of Buyer;

WHEREAS, at the Initial Closing, the parties hereto and certain of their Affiliates, as applicable, will enter into certain other Ancillary Agreements in order to consummate and implement the transactions contemplated hereby;

WHEREAS, concurrently herewith, (i) C Bank and Viner have entered into a commitment letter providing for C Bank's commitment, subject to the terms thereof, to provide a senior credit facility to Viner upon the terms as provided in the Senior Credit Commitment Letter (the "Senior Credit Commitment Letter"), (ii) the Company, Seller Parent and Buyer have entered into a transition services agreement, effective as of the Initial Closing Date, with respect to certain services to be provided to the OIB Division following the Initial Closing (the "Transition Services Agreement"); (iii) the Company, Seller Parent and Buyer have entered into a transition services agreement, effective as of the Initial Closing Date, with respect to certain technology matters relating the Transferred C Businesses (the "Software License and IT Services Agreement" ;), and (iv) the Company, Buyer Parent and Buyer have entered into a transfer and support agreement, effective as of the Initial Closing Date, with respect to certain services to be provided to the OIB Division following the Initial Closing (the "O Transfer and Support Agreement"); and

WHEREAS, at the Initial Closing, Seller Parent and certain of its Affiliates will enter into certain financing arrangements to support the operations of the OIB Division following the Initial Closing.

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants, agreements and conditions contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1

Certain Definitions

.  The following terms shall have the following meanings when used in this Agreement:

"10% Cap" shall have the meaning which shall be ascribed to it in the Warehouse Facility Agreement.

"300 Madison Lease" means the lease between BFP 300 Madison II LLC as landlord and CIBC Delaware Holdings Inc. as tenant dated March 30, 2001 and as amended and restated on April 24, 2002 for the premises located at 300 Madison Avenue, New York, New York.

"300 Madison Liabilities" means (i) any actual or alleged breach of the 300 Madison Lease by Seller or any of its Affiliates; (ii) any failure of the Service Agreement to be valid (other than due to the fault of Buyer or its Affiliates); and (iii) any inability of Buyer or its Affiliates (including any employees of the Transferred O Businesses) to occupy the portion of the premises demised by the 300 Madison Lease contemplated by the Service Agreement, including any and all costs associated with the identification and procurement of additional space as contemplated by the Service Agreement, the preparation and build-out of any such replacement space, and the movement of Buyer's assets and personnel into such replacement space.

"2008 Bonus" has the meaning set forth in Section 4.13(b).

"AA Disputed Items" has the meaning set forth in Section 3.06(c).

"AA Referral Firm" has the meaning set forth in Section 3.06(c).

"AA Resolution Period" has the meaning set forth in Section 3.06(c).

"Accelerated Shares" has the meaning set forth in Section 4.10(a).

"Account Conversion MOU" has the meaning set forth in Section 7.15(c).

"Affiliate" means, with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with, the Person specified.

"Agreement" has the meaning set forth in the Preamble.

"Allocated Amount" has the meaning set forth in Section 3.03(a).

"Alternate Space" has the meaning set forth in Section 2.07(b).

"Ancillary Agreements" means the agreements set forth in Section 2.09(a), including the Loan Trading Facility Agreement, the Subordinated Term Loan Facility Agreement, the Warehouse Facility Agreement, the O Transfer and Support Agreement, the Transition Services Agreement and the Software License and IT Services Agreement.

"Annual Statement" has the meaning set forth in Section 3.05(iii).

"Applicable Client" has the meaning set forth in Section 7.12(b).

"Applicable Transaction" has the meaning set forth in Section 7.12(b).

"Asia Seller" means Seller Parent, solely in relation to (i) the unincorporated branches of Seller Parent located in Hong Kong and Singapore and (ii) the representative office of Seller Parent located in Beijing, which branches and representative office Seller Parent operates partially in respect the aspects of the Transferred C Businesses conducted in such jurisdictions.

"Assigned C Contracts" has the meaning set forth in Section 2.01(e).

"Assigned Engagements" means (i) all Engagements which, as of the Initial Closing Date or the applicable Subsequent Closing Date, as the case may be, have not been fully and finally performed by the applicable Seller, and (ii) all Completed Assigned Engagements, in each case, together with, subject to Section 2.05, all benefits and obligations thereunder, including all Assigned Engagement Receivables owing or accruing thereunder as of or after the applicable Closing Date and all of Sellers' indemnities, contributions, claims and other rights thereunder.

"Assigned Engagement Receivables" means, collectively, Expense Income and Fee Income.

"Assigned Permits" has the meaning set forth in Section 2.01(h).

"Assumed C Liabilities" has the meaning set forth in Section 2.04.

"Assumed Facilities Contracts" has the meaning set forth in Section 2.02(b).

"Assumed Leases" means those certain leases, or subleases, as applicable, for the branch locations of Seller located in San Francisco, California, Menlo Park, California, Denver, Colorado and Baltimore, Maryland or otherwise listed on Schedule 2.02(b).

"Books and Records" means, to the extent related to the Transferred C Businesses: all books and records and files; all client files and client records; promotional data; customer lists; data; records and files (personal and otherwise) related to the Transferred C Employees; business plans; reference catalogs; Tax records; and Tax Returns and any other similar records and data (including all computerized records and other computerized storage media) of Seller or its Affiliates, including the Retained Books and Records.

"Business Applications" means, collectively, the Transferred C Business Applications, the Transition Software, the Shared Applications and the Third Party Software.

"Business Applications Servers" means the computer hardware that is used to host, operate and/or support any of the Business Applications.

"Business License Agreement" has the meaning set forth in Section 5.06(b).

"Business Management Employee" has the meaning set forth in Section 4.01(e).

"Buyer" has the meaning set forth in the Preamble.

"Buyer Claims" has the meaning set forth in Section 12.03.

"Buyer COBRA Costs" has the meaning set forth in Section 4.14.

"Buyer Confidential Information" has the meaning set forth in Section 7.03(b).

"Buyer Disclosure Schedule" means the document delivered by Buyer to Seller simultaneously with the execution hereof containing the information required to be included therein pursuant to this Agreement.

"Buyer Indemnitees" has the meaning set forth in Section 12.03.

"Buyer Parent" has the meaning set forth in the Preamble.

"Buyer Parent Commission Documents" means (i) its annual statements on Form 10-K for its fiscal years ended December 31, 2004, 2005 and 2006, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended March 31, June 30 and September 30, 2007, (iii) any Form 8-Ks filed in the past fiscal year and (iv) Buyer Parent's proxy or information statements relating to meetings of, or actions taken without a meeting by, the shareholders of Buyer Parent held since December 31, 2004.

"Buyer Parent Financial Statements" has the meaning set forth in Section 6.06.

"Buyer Parent Shares" means shares of Buyer Parent's Class A Common Stock or such other comparable capital stock of Buyer Parent as is listed for trading on the NYSE as of the Deferred Payment Date.

"Buyer Registered Representatives" has the meaning set forth in Section 6.11(a)(iii).

"Buyer Related Instruments" has the meaning set forth in Section 6.01(b).

"C Bank" means CIBC Inc., a Delaware corporation.

"C Delaware Holdings" means CIBC Delaware Holdings, Inc., a Delaware corporation.

"C Front Office Employees" has the meaning set forth in Section 4.01(a).

"C Infrastructure Employees" has the meaning set forth in Section 4.02.

"C Israel" means CIBC Israel Ltd., an Israeli corporation.

"C Israel Cash" has the meaning set forth in Section 3.08(a).

"C Israel Financial Statements" has the meaning set forth in Section 5.16(c)(i).

"C Israel Indebtedness" means intercompany indebtedness, receivables and delegations owed by C Israel to Seller and/or its Affiliates as set forth on Schedule A hereto.

"C Israel Loan Repayment" has the meaning set forth in Section 3.08(a).

"C Israel Shares" means all of the outstanding shares of C Israel.

"C Israel Support Arrangements" means any and all guarantees, letters of credit and other similar agreements or arrangements provided by Seller Parent or any of its Subsidiaries for the benefit of C Israel for regulatory or other purposes.

"CIBC Severance Plans" has the meaning set forth in Section 4.05(b).

"Claims" has the meaning set forth in Section 12.07.

"Clearing Agreement" means the clearing agreement between the Company and Buyer to be dated as of the Initial Closing Date relating to certain clearing services to be provided by Company to the OIB Division after the Initial Closing, substantially in the form attached as Exhibit E.

“Clearing-Dependent IT Migration” means any IT Migration that involves software or systems that support any clearing activities related to the Transferred C Businesses (other than the execution and clearing of Canadian trades).

"Clearing Costs" has the meaning set forth in Schedule 3.03(b).

"Closing" means, as applicable, the Initial Closing or a Subsequent Closing.

"Closing Date" means, as applicable, the Initial Closing Date or a Subsequent Closing Date.

"COBRA Requirements" has the meaning set forth in Section 4.14.

"Code" means the United States Internal Revenue Code of 1986, as amended, and the Treasury rules and regulations thereunder.

"Commission" means the United States Securities and Exchange Commission.

"Company" has the meaning set forth in the Preamble.

"Comparable Offer" has the meaning set forth in Section 4.01(a).

"Compensation Cost" has the meaning set forth in Schedule 3.03(b).

"Completed Assigned Engagements" means all Engagements with respect to which all services to be rendered by the applicable Seller have been fully performed as of the Initial Closing or the applicable Subsequent Closing, whether or not the customer or client has been invoiced in respect of such services, but with respect to which Assigned Engagements Receivables remain outstanding or with respect to which the applicable engagement, retention, underwriting placement agency or similar agreement contains rights of Sellers and their Affiliates to payments or other compensation or consideration with respect to future events.

"Confidentiality Agreement" has the meaning set forth in Section 7.03(e).

"Consent" has the meaning set forth in Section 2.07(b).

"Contract" or "Contracts" means any contract, agreement, lease, indenture, mortgage, deed of trust, evidence of indebtedness, or binding commitment, written or oral.

"Credit Facility" has the meaning set forth in the Senior Credit Commitment Letter.

"Credit Review Personnel" means those individuals identified on Schedule B hereto.

"C UK Employees" has the meaning set forth in Section 4.01(h).

"C UK Front Office Employees" means those C UK Employees employed primarily as a banker or other front office employee.

"Damages" has the meaning set forth in Section 12.03.

"Debenture Amount" hast he meaning set forth in Section 3.04(b).

"Deferred Payment Notice" has the meaning set forth in Section 3.04(b).

"Deferred Payment Date" has the meaning set forth in Section 3.03.

"Deferred Purchase Price Payment" has the meaning set forth in Section 3.03.

"Designated Account" has the meaning set forth in Section 3.04(a).

"Designated Buyer Affiliate" has the meaning set forth in Section 2.08.

"Electronic Trading Agreement" means an Electronic Trading Agreement, to be entered into as of the Initial Closing Date by Buyer and the Company or its applicable Affiliate, substantially in the form of Exhibit G.

"Engagement" means any engagement or retention accepted or undertaken as part of the Transferred C Businesses by or on behalf of a third party, in respect of any financial advisory, investment banking, underwriting, loan syndication, private placement agency, trading, or other services performed by the Transferred C Businesses, whether or not the subject of any written Contract or otherwise documented.

"Engagement Contracts" has the meaning set forth in Section 2.01(e).

"Environmental Laws" means any applicable Law relating to the pollution or protection of the environment.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder.

"Estimated FFE Purchase Price" has the meaning set forth in Section 3.01(a)(ii).

"Estimated TS Purchase Price" has the meaning set forth in Section 3.01(b)(ii).

"Excepted Ancillary Agreements" means the Warehouse Facility Agreement, the Loan Trading Facility Agreement, the Subordinated Term Loan Facility Agreement, or if applicable, the Credit Facility, the Clearing Agreement, the Registration Rights Agreement, the Transition Services Agreement, the Software License and IT Services Agreement and any ancillary agreement, instrument or document with respect to any of the foregoing.

"Excess Retention Losses" has the meaning set forth in Schedule 3.03(b).

"Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"Exchange Shares" means any shares, rights, seats or other benefits held or received by Sellers in respect of or in exchange for membership in any securities exchange or SRO.

"Excluded Accounts" means certain employee and special purpose accounts that are not material to the Transferred C Businesses, which accounts are listed on Schedule D.  Schedule D is subject to Section 2.11.

"Excluded C Assets" has the meaning set forth in Section 2.03.

"Excluded C Liabilities" has the meaning set forth in Section 2.04(b).

"Excluded Engagement Liabilities" has the meaning set forth in Section 2.04(b)(vii).

"Excluded Permits" means, collectively, (i) all Permits which may not be legally assigned or transferred to Buyer or the applicable Designated Buyer Affiliate, (ii) the Company's broker-dealer registration with the Commission and the Company's and its Affiliates' registrations under state, provincial or foreign "blue sky" or similar Laws, (iii) the Company's and its Affiliates' memberships with the NYSE and all other securities exchanges and markets, (iv) the Company's and its Affiliates' memberships with FINRA and each other SRO, (v) the Company's and its Affiliates' qualifications to do business as a foreign entity in any state, province or other jurisdiction, and (vi) the Company's futures commission merchant license.

"Expense Income" means amounts received by Buyer or its Affiliates from third parties constituting reimbursements of expenses incurred in performing services pursuant to Assigned Engagements or in the form of indemnification, contribution or similar recoveries from third parties in respect of services performed pursuant to Assigned Engagements.

"Failed Subsequent Closing" has the meaning set forth in Section 11.03.

"Fair Market Value" means, with reference to the Buyer Parent Shares, the average closing prices on the New York Stock Exchange of the Buyer Parent Shares over the fifteen (15) trading days ending five (5) trading days prior to applicable date.

"Fee Income" means all amounts received by Buyer or its Affiliates from third parties constituting compensation for services performed pursuant to Assigned Engagements, including fees and commissions, but excluding amounts constituting Expense Income.

"FFE Purchase Price" has the meaning set forth in Section 3.01(a)(i).

"Final Allocation" has the meaning set forth in Section 3.09(b).

"Final FFE Purchase Price" has the meaning set forth in Section 3.02(d).

"Final Initial Closing Date Statement" has the meaning set forth in Section 3.02(d).

"Final Initial Purchase Price Allocation" has the meaning set forth in Section 3.09(a).

"Final TS Purchase Price" has the meaning set forth in Section 3.02(d).

"FINRA" means the Financial Industry Regulatory Authority.

"FIRPTA Certificate" has the meaning set forth in Section 2.09(b)(ii)(B).

"Function" has the meaning set forth in Section 7.15(a).

"GAAP" means generally accepted accounting principles in the United States, consistently applied.

"Governmental Entity" means any court, administrative agency or commission, government, SRO, federal, state, provincial, municipal, local or other governmental entity, authority or instrumentality, whether domestic or foreign, or any court, tribunal or arbitrator.

"Gross Revenues" has the meaning set forth in Schedule 3.03(b).

"HSR Act" means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

"Identified Proprietary Trading Personnel" has the meaning set forth in Section 4.01(f).

"Inactive Employee" has the meaning set forth in Section 4.01(b).

"Incentive Shares" has the meaning set forth in Schedule 4.10(c).

"Initial Bill of Sale" has the meaning set forth in Section 2.09(b)(ii)(A).

"Initial Closing" has the meaning set forth in Section 2.09.

"Initial Closing Date" has the meaning set forth in Section 2.09.

"Initial Closing Date Statement" has the meaning set forth in Section 3.02(b).

"Intellectual Property Rights" means, collectively: Internet domain names; patents and rights to industrial designs (including any continuations, divisionals, continuations-in-part, renewals, reissues, and applications for any of the foregoing); Trademarks; copyrights (including any registrations and applications for any of the foregoing); and rights to Trade Secrets.

"Interest Incurred" has the meaning set forth in Schedule 3.03(b).

"Interim Results Statement" has the meaning set forth in Section 3.10(a).

"Israeli Tax Code" has the meaning set forth in Section 5.13(i)(xii).

"IT Migration" has the meaning set forth in Section 7.15(a).

"IT Migration Notice" has the meaning set forth in Section 7.15(d).

"Labor Laws" means any applicable Laws relating to employment and employment practices.

"Landlord Consent Date" means, with respect to each Assumed Lease, if and to the extent required, the date, if later than the Initial Closing Date, which the landlord with respect to such lease consents to the sublease or assignment contemplated hereby, as applicable.

"Law" or "Laws" means any and all federal, state, local, municipal, territorial and foreign laws, statutes, ordinances, codes, standards, requirements, criteria, rules, regulations, Orders, judgments and decrees of any and all Governmental Entities, including rules, guidelines and published interpretations of SROs.

"Legal and Compliance Employees" has the meaning set forth in Section 4.01(e).

"Legal Proceeding" means any action, lawsuit, litigation, demand, suit, hearing, investigation, indictment, notice of a violation, arbitration, appeal or other legal proceeding, whether civil, criminal, administrative or otherwise.

"Liabilities" means liabilities, responsibilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, whether due or to become due and whether or not required to be reflected or reserved against on a balance sheet under GAAP.

"Liens" means any and all liens, encumbrances, security interests, mortgages, pledges, claims, options, charges, easements, limitations, commitments, encroachments, option agreements, voting trusts or restrictions of any kind whatsoever.

"Loan Entity" means one or more Affiliates of Buyer Parent to be formed for the purposes of the Loan Trading Facility Agreement and the Warehouse Facility Agreement.

"Loan Portfolio Management Group" means those individuals identified on Schedule C hereto.

"Loan Trading Facility Agreement" has the meaning set forth in Section 7.17(a).

"Material Adverse Effect" means any condition, event, circumstance, change or effect that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on the business, assets, properties, results of operation, condition (financial or otherwise) or prospects of the Transferred C Businesses or the Purchased C Assets.

"Merger Control Laws" means any applicable U.S. and non-U.S. competition, antitrust or investment Laws, including, as relevant, the HSR Act.

"MS Facility, as amended" has the meaning set forth in the Senior Credit Commitment Letter.

"MS Facility" means, collectively, (i) that certain Senior Secured Credit Agreement, dated as of July 31, 2006 among E.A. Viner International Co., as Borrower, certain other parties defined therein, as Credit Parties, Morgan Stanley Senior Funding, Inc., as Administrative Agent and Syndication Agent, Morgan Stanley & Co. Incorporated, as Collateral Agent, and a syndicate of lenders and (ii) each of the security agreements and other documents and agreements contemplated thereby to which Buyer or any Affiliate of Buyer is a party or is bound, in each case, as amended from time to time.

"Non-Clearing IT Migration" means any IT Migration that involves software or systems that do not support any clearing activities related to the Transferred C Business.

"Northbound Business" means that portion of Seller's business consisting of executing trades in securities listed on Canadian stock exchanges for the accounts of United States broker-dealer clients of the Transferred C Businesses, which accounts, following the Initial Closing, will be supported by Seller pursuant and subject to the Clearing Agreement.

"NYSE" means the New York Stock Exchange, Inc.

"O Transfer and Support Agreement" has the meaning set forth in the Recitals.

"OIB Deferral has the meaning set forth in Section 4.10(b)(vi).

"OIB Division" means the assets, Liabilities, personnel and activities of Buyer and its Affiliates comprising the Transferred O Businesses and, following the Initial Closing, including the Purchased C Assets, the Transferred C Employees and the Transferred C Businesses.

"OIB Incentive Plan" has the meaning set forth in Schedule 4.10.

"On-Campus Interview Employee" has the meaning set forth in Section 4.03.

"On-Campus Interview Offers" has the meaning set forth in Section 4.03.

"Operating Costs" has the meaning set forth in Schedule 3.03(b).

"Operating Income" has the meaning set forth in Schedule 3.03(b).

"Operating Margin" means Operating Income divided by Gross Revenues.

"Operating Services Management Fee" has the meaning set forth in the O Transfer and Support Agreement.

"Order" means any order, writ, judgment, arbitration or other award, injunction, decree, directive, decision, assessment, settlement or ruling of or by a Governmental Entity.

"Origination Fees" shall have the meaning which shall be ascribed to it in the Warehouse Facility Agreement.

"PC Disputed Items" has the meaning set forth in Section 3.02(d).

"PC Referral Firm" has the meaning set forth in Section 3.02(d).

"PC Resolution Period" has the meaning set forth on Section 3.02(d).

"Pending Loan Syndications" means commitments to provide financing or agreements to exercise best efforts to arrange financing which Sellers and their Affiliates have entered into in their conduct of the Transferred C Businesses, which subject financings have not closed as of the Initial Closing Date.

"Permit" means any consent, declaration, franchise, license, ratification, membership, registration, order, waiver, variance, certificate, approval or other authorization made available by or under the authority of any Governmental Entity or pursuant to any Law of any Governmental Entity.

"Permitted Liens" has the meaning set forth in Section 5.05.

"Person" means an individual, corporation, partnership, association, trust, limited liability company or other entity or organization, including a Governmental Entity.

"Personal Property Leases" has the meaning set forth in Section 2.01(b).

"Plans" has the meaning set forth in Section 5.08(a).  

"Post-Closing Tax Period" with respect to the C Israel Shares, means any Tax period beginning after the Subsequent Closing Date applicable to the C Israel Shares and the portion of any Straddle Period beginning after the Subsequent Closing Date applicable to the C Israel Shares.

"Pre-Announcement Price" has the meaning set forth in Section 4.10(c).

"Pre-Closing Tax Period" with respect to the C Israel Shares, means any Tax period ending on or before the Subsequent Closing Date applicable to the C Israel Shares and the portion of any Straddle Period through the end of the Subsequent Closing Date applicable to the C Israel Shares.

"Premises" means (i) the premises subject to the Service Agreement and (ii) the premises subject to the Assumed Leases.

"Program" has the meaning set forth in Section 4.10(b)(vi).

"Promotional Materials" has the meaning set forth in Section 2.01(l).

"Proposed Final Allocation" has the meaning set forth in Section 3.09(b).

"Proposed Initial Purchase Price Allocation" has the meaning set forth in Section 3.09(a).

"Proprietary Software Application" means a software application that has been developed by or on behalf of Seller prior to the Initial Closing Date and in which Seller owns the copyrights to such software application as of the Initial Closing Date.

"Purchased C Assets" has the meaning set forth in Section 2.01.

"Purchased FFE" has the meaning set forth in Section 2.01(a).

"Reference Date" has the meaning set forth in Section 3.03(a).

"Reference Year" has the meaning set forth in Section 3.03(a).

"Registration Rights Agreement" means the registration rights agreement to be dated as of the Initial Closing Date between Seller Parent and Buyer Parent, substantially in the form attached as Exhibit C in relation to both the Warrant and the Buyer Parent Shares.

"Regulatory and Legal Costs" hast he meaning set forth in Schedule 3.03(b).

"Regulatory Filings" has the meaning set forth in Section 5.14(a).

"Rejection Deadline" has the meaning set forth in Section 4.01(i).

"Release" has the meaning set forth in Section 4.05(b).

"Relevant Entities" means the OIB Division, any other Person to whom Purchased C Assets are transferred or by which Transferred C Employees are hired and C Israel, in each case, together with such entities' respective successors or assigns.

"Remaining Amount" has the meaning set forth in Section 3.04(b).

"Required Approvals" means (i) necessary approvals from FINRA, and (ii) the expiration or termination of any applicable waiting periods (or extensions thereof) under the HSR Act, for the consummation of the transactions contemplated by this Agreement.

"Research Agreement" means the research agreement to be dated as of the Initial Closing Date between Buyer Parent, Buyer, Seller Parent and the Company relating to certain research services to be provided by Seller Parent to Buyer and by Buyer to Seller Parent and Seller after the Initial Closing, substantially in the form attached as Exhibit F.

"Retained Books and Records" means (i) all Books and Records that Sellers or their Affiliates are legally obligated to retain or are not legally permitted to transfer, (ii) all Tax Books and Records, (iii) all Books and Records in respect of Legal Proceedings, (iv) all Books and Records relating to Retained Employees or former employees, (v) all Books and Records pertaining solely or primarily to the Retained C Businesses, the Excluded C Assets, or the Excluded C Liabilities and (vi) all employee medical information and all Books and Records relating to employees' original hiring and all employee Books and Records with respect to which the applicable employee has not consented to transfer, to the extent such is required by applicable Law.

"Retained C Businesses" means (i) all of the businesses of Seller Parent and its Subsidiaries other than the Transferred C Businesses, (ii) the Company's and its Affiliates' U.S. real estate finance business, the Company's and its Affiliates' U.S. equity commodity structured products and finance businesses, the Company's stock lending business, the Company's and its Affiliates' U.S. proprietary trading business, the Company's and its Affiliates' merchant banking business, the Company's oil, gas and minerals and mining advisory and capital markets business conducted in its Houston, Texas office, and the Company's and its Affiliates' U.S. debt capital markets business to the extent not associated with or related to loan origination, trading and syndication and leveraged capital origination, trading and distribution, high-yield trading and sales and high-yield research and convertible bond sales and trading businesses or ICB distribution, including money market sales, auction rate securities sales, structured credit/marketing, fixed income trading and sales, municipal and government finance and debt syndication and foreign exchange, (iii) the activities performed by the Credit Review Personnel and the Loan Portfolio Management Group in connection with Seller Parent's retained Canadian loan syndication activities, and any commitments to extend credit, related loans, loan syndication, trading or related activities that the Company or its Affiliates may be involved in relating to the transactions contemplated by the Warehouse Facility Agreement, including activities as an agent or similar functions with respect to such transactions, (iv) the Company's and its Affiliates' existing loan portfolio, and (v) any activities of the Company and its Affiliates under the Research Agreement or the Clearing Agreement.

"Retained Employee" has the meaning set forth in Section 4.05(a).

"Retained Employee Liabilities" has the meaning set forth in Section 4.05(a).

"Retained Fee Income" means all Fee Income received by Buyer or its Affiliates from third parties in respect of services performed pursuant to Completed Assigned Engagements which was permitted to be invoiced to the applicable client on or prior to the Initial Closing Date or applicable subsequent Closing Date pursuant to the terms applicable to the Engagement, but excluding Fee Income paid pursuant to "tail" provisions to the extent that collection of Fee Income relating to such provisions requires the performance of any additional services or similar actions whatsoever.

"Retention Pool" has the meaning set forth in Section 4.10(b)(ii).

"RSA Plan" has the meaning set forth in Schedule 4.10(a).

"Securities Act" means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"Seller" has the meaning set forth in the Preamble.

"Seller 401(k) Plan" has the meaning set forth in Section 4.08.

"Seller Claims" has the meaning set forth in Section 12.05.

"Seller COBRA Costs" has the meaning set forth in Section 4.14.

"Seller Confidential Information" has the meaning set forth in Section 7.03(c).

"Senior Credit Commitment Letter" has the meaning set forth in Section 3.04(b).

"Seller Disclosure Schedule" means the document delivered by Sellers to Buyer simultaneously with the execution hereof containing the information required to be included therein pursuant to this Agreement.

"Seller Indemnitees" has the meaning set forth in Section 12.05.

"Seller Parent" has the meaning set forth in the Preamble.

"Seller Registered Representatives" has the meaning set forth in Section 5.11(b).

"Seller Related Instruments" has the meaning set forth in Section 5.01(b).

"Senior Credit Commitment Letter" has the meaning set forth in the Recitals.

"Service Agreement" means a Service Agreement in respect of Buyer's sharing of a portion of the Premises subject to the 300 Madison Lease with Buyer in connection with the sale of the Transferred C Businesses pursuant to this Agreement, which Service Agreement shall relate to the spaces and provide for the economic and other terms described in the term sheet attached hereto as Exhibit D.

"Service Provider" has the meaning set forth in Section 2.07(b).

"Severance Cap" has the meaning set forth in Section 4.05(b)(ii).

"Share Amount" has the meaning set forth in Section 3.04(b).

"Shared Application" means a Proprietary Software Application that is used for purposes of the Transferred C Businesses and one or more of the Retained C Businesses as of the Initial Closing Date, but excluding the Transition Software.

"Shared Third Party Software" means Third Party Software that is used for purposes of the Transferred C Businesses and one or more of the Retained C Businesses as of the Initial Closing Date, but excluding the Transition Software.

"Software License and IT Services Agreement" has the meaning set forth in the recitals.

"Space" has the meaning set forth in Section 2.07(b).

"Specified C Infrastructure Employee" has the meaning set forth in Section 4.02.

"Specified Condition" has the meaning set forth in Section 10.01(b).

"SRO" means a Self Regulatory Organization registered under the Exchange Act, including FINRA.

"Straddle Period" with respect to the C Israel Shares, means any Tax period that includes, but does not end on, the Subsequent Closing Date applicable to the C Israel Shares.

"Subordinated Term Loan Facility Agreement" means the Subordinated Term Loan Facility Agreement and related documentation among the Company, C Bank and Viner providing for a subordinated term loan facility provided by the Company or C Bank to Viner to fund capital and liquidity requirements substantially in the form set forth on Exhibit I hereto.

"Subsequent Bill of Sale" has the meaning set forth in Section 2.10(d).

"Subsequent Closing Assets and Liabilities" has the meaning set forth in Section 2.10(a).

"Subsequent Closing Date" has the meaning set forth in Section 2.10(b).

"Subsequent Closing Outside Date" has the meaning set forth in Section 2.10(f).

"Subsequent Closings" means the closings provided for in Section 2.10(b).

"Subsequent Undertaking" has the meaning set forth in Section 2.10(d).

"Subsidiary" means any corporation, limited liability company, partnership, association, joint venture or other entity of which any Person (either alone or through or together with any other Person pursuant to any agreement, arrangement, contract or other commitment) owns, directly or indirectly, 50% or more of the capital stock or other equity interests the holders of which generally are entitled to vote for the election of the board of directors or other governing body of such entity.

"Syndication Losses" has the meaning set forth in Schedule 3.03(b).

"Tax" means (i) any and all taxes, fees, levies, assessments, deficiencies, duties, tariffs, imposts and other charges or impositions of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including taxes or other charges on or with respect to income, gross receipts, property, sales, transfer, recordation, bulk transfer, real property transfer and gains, use, license, excise, franchise, employment, social security, national health insurance, unemployment compensation, payroll, premium, withholding, alternative or added minimum, ad valorem, value added tax or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever; (ii) any Liability for the payment of any amounts described in (i) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group or as a result of transferor or successor liability; and (iii) any Liability for the payment of any amounts as a result of being a party to any tax sharing agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (i) or (ii).

"Tax Allocation Referral Firm" has the meaning set forth in Section 3.09(a).

"Tax Proceeding" has the meaning set forth in Section 7.09(c)(iii).

"Tax Return" means any return, declaration, report, claim for refund, information return or statement or similar statement that is filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

"Third Party Software" means software owned by a third party that is used for purposes of the Transferred C Businesses as of the Initial Closing Date

"Third Party Technology Services" means information technology related services provided by a third party service provider to the Transferred C Businesses as of the Initial Closing date, including hardware and software maintenance and support services.

"Title IV Plan" has the meaning set forth in Section 5.08(a).

"Trade Secrets" means, collectively, technology, trade secrets and other confidential information, know-how, proprietary processes, formulae, algorithms, models, and methodologies.

"Trademarks" means, collectively, all trademarks, service marks, trade names, Internet domain names, designs, logos, slogans, and general intangibles of like nature, together with all goodwill, registrations and applications related to the foregoing.

"Tranche 1 awards" has the meaning set forth in Section 4.10(b)(i).

"Tranche 2 awards" has the meaning set forth in Section 4.10(b)(ii).

"Transfer Tax Returns" has the meaning set forth in Section 7.09(a).

"Transfer Taxes" means federal, state, local, county, foreign or other conveyance, sales, use, excise, value, value added, registration, stamp, franchise, property, transfer, real property transfer, gains, recording, registration and similar Taxes, levies, charges, fees, together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto.

"Transferred Accounts" has the meaning set forth in Section 2.01(h).

"Transferred C Business Application" means a Proprietary Software Application that is used for purposes of or in connection with the Transferred C Business as of the Initial Closing Date and is not used by any of the Retained C Businesses and for which there is no plan as of the Initial Closing Date for any of the Retained C Businesses to use such Proprietary Software Application, and excluding the Transition Software.

"Transferred C Businesses" means (i) the Company's and its Affiliates' U.S. equity capital markets business performed currently and from time to time prior to the Initial Closing Date by the C Front Office Employees, including investment banking, equity sales and trading (excluding the Northbound Business) and research, (ii) the Company's and its Affiliates' U.S. debt capital markets business performed currently and from time to time prior to the Initial Closing Date by the C Front Office Employees, as it pertains to loan origination, trading and syndication and leveraged capital origination, trading and distribution, high-yield trading and sales and high-yield research (other than the Retained C Businesses), (iii) the Company's and its Affiliates' U.S. convertible bond and equity options sales and trading businesses performed currently and from time to time prior to the Initial Closing Date by the C Front Office Employees, (iv) the Company's and its Affiliates' U.S. investment banking business, including mergers and acquisitions and restructuring, (v) the business activities of the Transferred C Front Office Employees located in the United Kingdom, China (including Hong Kong) and Singapore and (vi) the entire business of the C Israel.

"Transferred C Employee" has the meaning set forth in Section 4.04.

"Transferred C Front Office Employees" means C Front Office Employees who accept offers of employment with Buyer or a Designated Buyer Affiliate.

"Transferred C HK/Asia Assets and Liabilities" means such Purchased C Assets currently owned by Asia Seller to be agreed upon by the Company and Buyer not later than ten (10) business days prior to each applicable Subsequent Closing in relation thereto together with any corresponding Assumed C Liabilities.

"Transferred C Infrastructure Employees" means C Infrastructure Employees who accept offers of employment with Buyer or a Designated Buyer Affiliate.

"Transferred C Securities" has the meaning set forth in Section 2.01(c).

"Transferred C UK Assets and Liabilities" means such Purchased C Assets currently owned by UK Seller to be agreed upon by the Company and Buyer not later than ten (10) business days prior to the applicable Subsequent Closing in relation thereto together with any corresponding Assumed C Liabilities.

"Transferred O Businesses" means all property, assets and rights in Buyer's investment banking, equity sales and trading and research business, including (i) Permits, contracts, intellectual property, books and records, customer lists, equipment, furniture, fixtures, improvements and other tangible and intangible assets primarily used in such businesses, and (ii) all Liabilities of such businesses for periods after the Initial Closing, but, for the avoidance of doubt, excluding Buyer's and its Affiliates' syndication business with respect to closed-end funds, investment products and other retail businesses and the foregoing items related thereto.

"Transition Period" has the meaning set forth in Section 4.14.

"Transition Services Agreement" has the meaning set forth in the Recitals.

"Transition Software" means the software set forth in the Software and IT Services Agreement.

"Treasury Regulations" means regulations issued under the Code, as amended.

"TS Purchase Price" has the meaning set forth in Section 3.01(b)(i).

"TUPE" has the meaning set forth in Section 4.01(h).

"UK Employees" has the meaning set forth in Section 4.01(h).

"UK Seller" has the meaning set forth in the Preamble.

"US Affiliate" means, with respect to a specified Person, a Person that is organized under the Laws of the United States or any state thereof, and is an Affiliate of the Person specified.

"Viner" means E.A. Viner International Co., a Delaware corporation.

"Viner Debentures" means debentures substantially in the form attached as Exhibit B issued by Viner.

"Warehouse Facility Agreement" has the meaning set forth in Section 7.17(a).

"WARN Act" means the Worker Adjustment and Retraining Notification Act.

"WARN Obligations" has the meaning set forth in Section 4.12(a).

"Warrant" means a warrant exercisable for shares of Buyer Parent Shares, substantially in the form attached hereto as Exhibit A.

"Wealth Accumulation Plan" has the meaning set forth in Section 4.11(d).

Section 1.02

Certain Terms

.

(a)

The term "business day" means any day other than a Saturday, Sunday or other day on which the NYSE is not open for trading.

(b)

When used in this Agreement, the word "including" shall be deemed to mean "including, without limitation."

(c)

Unless otherwise provided in this Agreement, all references to "dollars" or "$" shall be to U.S. dollars.

(d)

Unless otherwise provided, all references to Sections, Articles, Schedules and Exhibits shall be deemed to mean such Sections, Articles, Schedules or Exhibits "of this Agreement."

(e)

The terms defined in this Agreement have the meanings assigned to them and include the plural as well as the singular and the pronouns of either gender or neuter, shall include, as appropriate, the other pronoun forms.

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

Section 2.1

Purchase and Sale of the Purchased Assets

.  Upon the terms and subject to the conditions contained herein, Buyer agrees to purchase, or, subject to Section 2.08, cause a Designated Buyer Affiliate to purchase, from Sellers at the Initial Closing or, subject to Section 2.10, the applicable Subsequent Closing, and the applicable Sellers agree to, and agree to cause their respective Affiliates to, sell, grant, convey, assign, transfer and deliver to Buyer or such Designated Buyer Affiliate at the Initial Closing or the applicable Subsequent Closing, all of such Seller's or Affiliate's right, title and interest in and to the Purchased C Assets, free and clear of all Liens, other than Permitted Liens.  "Purchased C Assets" means, as applicable, the Company's, UK Seller's and Asia Seller's, or their respective Affiliates', entire right, title and interest in and to all assets, other than Excluded Assets, used solely or p rimarily in, the Transferred C Businesses, including (i) the Assumed Leases and the Assumed Facilities Contracts and (ii) all of the following assets, properties and rights:

(a)

Furniture, Fixtures and Equipment.  All furniture, fixtures, leasehold improvements (other than leasehold improvements in respect of the Premises subject to the 300 Madison Lease), equipment, computer equipment (other than the Business Applications and the Business Applications Servers) and peripherals, telephone equipment and other personal property that are (i) listed on Schedule 2.01(a) (which Schedule is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) between the date of this Agreement and the Initial Closing Date and/or the applicable Subsequent Closing Date, as necessary, to reflect any items or changes that have arisen in the ordinary course of business), (ii) (A) used solely or primarily in the Transferred C Businesses, (B) located at the Premises, and (C) owned by any Seller or its Affiliates, in each case, together with all assignable warranties and similar rights with respect to those items, or (iii) otherwise agreed upon between Buyer and the Company (the "Purchased FFE").

(b)

Personal Property Leases.  Subject to Sections 2.06 and 2.07, all leases and other possession or usage rights for all leased or otherwise unowned furniture, equipment, computer equipment and peripherals, telephone equipment and other personal property that are (i) listed in Schedule 2.01(b) (which Schedule is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) between the date of this Agreement and the Initial Closing Date and/or the applicable Subsequent Closing Date, as necessary, to reflect any items or changes that have arisen in the ordinary course of business), (ii) (A) used solely or primarily in the operation of the Transferred C Businesses, (B) located at the Premises and (C) leased, possessed or otherwise use d by any Seller or its Affiliates, together with any security or similar deposits given or made by Seller held by the applicable lessor or owner relating to those leases or similar rights, or (iii) otherwise agreed upon between Buyer and the Company (the "Personal Property Leases").

(c)

Transferred Securities.  Certain marketable securities, investments, positions, tradable interests, instruments and other financial assets, in each case, prices or values for which may be readily obtained from customary third party pricing or quotation services, relating to the capital markets business which Buyer and the Company mutually agree in good faith are included among the Transferred C Businesses prior to the Initial Closing Date (the "Transferred C Securities").  Anything to the contrary notwithstanding, the Transferred C Securities shall not include any Exchange Shares.

(d)

Assigned Engagements.  Subject to Sections 2.05, 2.06 and 2.07, the Assigned Engagements, including those identified on Schedule 2.01(d); and subject to Section 2.05, all Assigned Engagement Receivables outstanding as of or arising following the Initial Closing Date or the applicable Subsequent Closing Date, including those identified as such on Schedule 2.01(d).  Schedule 2.01(d) is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) between the date of this Agreement and the Initial Closing Date and/or the applicable Subsequent Closing Date, as necessary, to reflect any items or changes that have arisen in the ordinary course of business.

(e)

Certain Contracts.  Subject to Sections 2.05, 2.06 and 2.07, all of the Company's rights, title and interest in and to all engagement letters, retention letters, underwriting agreements, placement agency agreements or other Contracts in respect of the Assigned Engagements (collectively, "Engagement Contracts"), including those set forth on Schedule 2.01(e), Contracts governing or establishing the Transferred Accounts, including those set forth on Schedule 2.01(e), and any other Contracts relating solely or primarily to the Transferred C Businesses, including those identified on Schedule 2.01(e), but excluding Contracts covered by the Software License and IT Services Agreement and any Plans relating to the Transferred C Businesses (together with the Personal Property Leases, the Assumed Leases and the Assumed Facilities Contracts, the "Assigned C Contracts").  Schedule 2.01(e) is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) between the date of this Agreement and the Initial Closing Date and/or the applicable Subsequent Closing Date to reflect any items or changes that have arisen in the ordinary course of business.

(f)

Books and Records.  All Books and Records other than the Retained Books and Records.

(g)

C Israel.  All of the C Israel Shares.

(h)

Certain Permits.  All of the Company's right, title and interest in and to those Permits relating solely or primarily to the Transferred C Businesses to the extent transferable under applicable Law, including the Permits identified on Schedule 2.01(h) (which Schedule is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) between the date of this Agreement and the Initial Closing Date and/or the applicable Subsequent Closing Date, as necessary, to reflect any additions or deletions thereto in the ordinary course of business), but excluding the Excluded Permits (the "Assigned Permits").

(i)

Certain Accounts.  All of the Company's right, title and interest in and to all accounts maintained by the Company and its U.S. Affiliates that comprise the Transferred C Businesses, including all brokerage and other accounts of C Israel, all of which are maintained by the Company, all DVP/RVP accounts maintained by the Company and its U.S. Affiliates and comprising the Transferred C Businesses and such other customer accounts maintained by the Company or its U.S. Affiliates and comprising the Transferred C Businesses, including those identified on Schedule 2.01(i), but excluding the Excluded Accounts (the "Transferred Accounts").  Schedule 2.01(i) is subject to Section 2.11 and may be further updated by the Company in good faith and with the prior written consent of Buyer (not to be unreasonably withheld) b etween the date of this Agreement and the Initial Closing Date to reflect any items that have arisen in the ordinary course of business.

(j)

Claims.  All claims, causes of action, defenses and rights of offset or counterclaim at any time or in any manner arising or existing, whether choate or inchoate, known or unknown, contingent or noncontingent, to the extent relating solely or primarily to the Assumed C Liabilities or the Purchased C Assets; provided that the foregoing shall not include any claims, causes of action, defenses and rights of offset or counterclaim relating to the Excluded Liabilities and, provided, further, that Buyer shall indemnify, defend and hold harmless Sellers from and against any counterclaims asserted against Sellers in respect of any of the foregoing transferred to Buyer except to the extent that any such counterclaims relate to Retained C Liabilities.

(k)

Goodwill.  The goodwill of the Transferred C Businesses.

(l)

Promotional Materials.  Subject to Section 7.14, advertising, marketing, sales and promotional materials used solely or primarily in or in respect of the Transferred C Businesses, including all research reports previously published by the Transferred C Businesses (collectively, "Promotional Materials").

Section 2.2

Real Property Leases

.  

i)  Service Agreement.  Upon the terms and subject to the conditions contained herein, including Section 2.07, at the Initial Closing Date, Buyer shall, and Seller Parent shall cause C Delaware Holdings to, execute and deliver to one another the Service Agreement.

(b)

Assumed Leases.  Upon the terms and subject to the conditions contained herein, including Sections 2.06 and 2.07, and subject to any agreements relating to the sharing of facilities pursuant to the Transition Services Agreement, Buyer agrees to assume from the Company at the applicable Landlord Consent Date, and the Company agrees to assign to Buyer at such Landlord Consent Date, all of the Company's right, title and interest in, to and under (i) the Assumed Leases and (ii) all Contracts to which the Company is a party relating to the provision of services to the Premises subject to the Assumed Leases, including, e.g., janitorial, electric and water Contracts, but excluding Contracts relating to services to be provided by the Company or its Affiliate pursuant to the Software License and IT Services Agreement or the Transition Services A greement (the "Assumed Facilities Contracts").

(c)

All lease assignments and landlord consents necessary to effect the transactions contemplated by this Section 2.02 shall be in form and substance reasonably satisfactory to Buyer.

Section 0.2

Excluded Assets

.  Anything to the contrary notwithstanding, the following shall not constitute Purchased C Assets and shall not be sold, assigned or transferred by Sellers or their Affiliates to Buyer or any Designated Buyer Affiliate (collectively, the "Excluded C Assets"):

(a)

all properties, assets and rights not solely or primarily related to or used in the Transferred C Businesses, other than as may be expressly provided in this Agreement;

(b)

all intellectual property, including all rights in names, trademarks and service marks, patents, copyrights, trade secrets, know-how, Sellers' Trademarks, the Business Applications and the Intellectual Property Rights that claim or otherwise pertain to the Business Applications;

(c)

except for the Transferred C Securities, all cash, cash equivalents, securities, positions, tradeable interests, instruments and other financial assets of the Transferred C Businesses and all hedges and swaps and other derivatives related thereto;

(d)

all receivables other than the Assigned Engagement Receivables;

(e)

subject to Section 7.03(d), all Retained Books and Records;

(f)

all leasehold interests other than the leasehold interests arising pursuant to the Assumed Leases and the Personal Property Leases;

(g)

all Contracts other than the Assigned C Contracts;

(h)

except as otherwise provided in the Software License and IT Services Agreement, the Business Applications Servers;

(i)

the Excluded Accounts;

(j)

the Excluded Permits; and

(k)

the C Israel Cash.

Section 0.3

Assumption of Liabilities

.  

(a)

Upon the terms and subject to the conditions of this Agreement, on the Initial Closing Date or applicable Subsequent Closing Date, Buyer agrees to, or, subject to Section 2.08, to cause a Designated Buyer Affiliate to, irrevocably assume and become exclusively responsible for the following, and only the following, Liabilities of Sellers, in each case, except to the extent such Liabilities constitute Excluded C Liabilities (collectively, the "Assumed C Liabilities"):

(i)

subject to Section 2.05, all Liabilities arising under the Assigned Engagements, except for the Excluded Engagement Liabilities;

(ii)

in addition to and without limiting the Liabilities to be assumed pursuant to Section 2.04(a)(i) and subject to Sections 2.05, 2.06 and 2.07, all Liabilities arising under or relating to the Assigned C Contracts other than Engagement Contracts solely to the extent arising following the effective time of the Initial Closing or the applicable Subsequent Closing;

(iii)

except as contemplated by the Transition Services Agreement or the Software License and IT Services Agreement, all other Liabilities arising out of or relating to the operation of the Transferred C Businesses, or the ownership of the Purchased C Assets (including those Purchased C Assets included among the Subsequent Closing Assets and Liabilities) or the use of the Business Applications or Third Party Technology Services, solely to the extent arising after the effective time of the Initial Closing;

(iv)

those Liabilities relating to Transferred C Employees  to be assumed by Buyer pursuant to the applicable provisions of Article IV; and

(v)

except as otherwise provided in this Agreement, all Liabilities arising out of or relating to the operation of the Transferred C Businesses or the business of the OIB Division by the Buyer and its Affiliates following the Initial Closing Date.

(b)

All Liabilities of Sellers or the Transferred C Businesses or relating to the Purchased C Assets other than the Assumed C Liabilities (the "Excluded C Liabilities") are expressly not assumed by Buyer pursuant to this Agreement.  Excluded C Liabilities shall include (but shall not be limited to):

(i)

all Liabilities that are attributable to the 300 Madison Lease (except as contemplated by the Service Agreement), any Excluded C Asset or the Retained C Businesses;

(ii)

other than as contemplated by Section 2.04(a)(i) and subject to Section 2.05, all Liabilities relating to the Purchased C Assets, the Transferred C Businesses and the Assigned C Contracts (other than the Engagement Contracts) to the extent arising out of or relating to any event, circumstance or condition occurring or existing prior to the Initial Closing Date;

(iii)

other than as contemplated by Section 2.04(a)(i) and subject to Section 2.05, all Liabilities arising out of or relating to (A) any Legal Proceeding pending or threatened prior to or as of, or to the extent arising out of or relating to any event, conduct, omission, circumstance or condition occurring or existing prior to or as of the Initial Closing Date or (B) any actual or alleged violation of Law to the extent arising prior to or existing prior to or as of the Initial Closing Date;

(iv)

any Retained Employee Liability;

(v)

all Liabilities arising out of or relating to the operation or maintenance of any employment or benefit plan, program or agreement or arrangement provided by Sellers or any related entity;

(vi)

except as expressly provided elsewhere in this Agreement (A) all Taxes of Sellers or any of their Affiliates or for any period; (B) all Taxes of Sellers or any of their Affiliates attributable to the Excluded C Assets or Excluded C Liabilities for any period; (C) Taxes attributable to the Purchased C Assets or the Transferred C Businesses relating to any period or any portion of any period ending on or prior to the Initial Closing Date; (D) Taxes attributable to the Purchased C Assets described in Section 5.13(h); and (E) all Transfer Taxes for which Seller or any of its Affiliates are liable;

(vii)

all Liabilities set forth on Schedule 2.04(b);

(viii)

all Liabilities arising out of or relating to (x) Engagements other than Assigned Engagements and (y) Completed Assigned Engagements in respect of which the Company or any of its Affiliates is entitled pursuant to this Agreement to receive Retained Fee Income following the Initial Closing Date (collectively, the "Excluded Engagement Liabilities"); and

(ix)

without limiting any other provisions hereof and except as otherwise provided in the Warehouse Facility Agreement, (A) any all credit losses and any other Liabilities relating to or arising out of any extensions of credit, or commitments or engagement to extend or arrange credit, by Sellers and their Affiliates in their capacity as lenders under loan agreements or associated agreements (including without limitation liability in respect of information provided, ERISA, environmental matters, additional costs and expenses relating to capital, and Tax matters), and (B) any Liabilities relating to or arising out of the lending or loan administration activities of Sellers and their Affiliates, including any lender liability claims.    

(c)

Notwithstanding any other provisions hereof, subject to Section 2.06, each Seller hereby agrees, joint and severally, to pay, perform and discharge when due, any and all of the Excluded C Liabilities.  For the avoidance of doubt, Sellers shall retain and have the sole right to initiate, defend, conduct, settle and compromise any Legal Proceedings in relation to the Retained C Businesses, the Excluded C Liabilities or the Excluded C Assets.  

Section 0.4

Assigned Engagements; Pending Syndications

.

(a)

The parties agree as follows with respect to the Engagements and the Assigned Engagements:

(i)

With respect to all Assigned Engagements, all Expense Income received at any time by Buyer or its Affiliates pursuant thereto or in respect thereof that is attributable to expenses or other amounts incurred or suffered by Sellers or their Affiliates shall be received for the benefit of Sellers and Buyer shall pay such amounts to the Company or its designee in cash (or in such other consideration received by Buyer with respect thereto) promptly upon Buyer's or its Affiliate's receipt thereof.

(ii)

With respect to all Completed Assigned Engagements, all Retained Fee Income received at any time by Buyer or its Affiliates pursuant thereto or in respect thereof shall be deemed to be received for the benefit of Sellers and Buyer shall pay such amounts to the Company or its designee in cash (or in such other consideration received by Buyer with respect thereto) promptly upon Buyer's or its Affiliate's receipt of such Retained Fee Income.

(iii)

Buyer shall, and shall cause its applicable Affiliates to, use commercially reasonable efforts in accordance with the terms of the Completed Assigned Engagements and the past practices of the Transferred C Businesses, to collect all Expense Income and Fee Income that, upon receipt, would be subject to Section 2.05(a)(i) or Section 2.05(a)(ii).  

(iv)

With respect to any Damages incurred by Buyer or its Affiliates arising out of any actual or alleged breach of, or misconduct in relation to, any Completed Assigned Engagement to the extent that such Damages arise out of any conduct, act or omission prior to the Initial Closing or the applicable Subsequent Closing, Sellers shall indemnify Buyer or its applicable Affiliates in respect thereof in accordance with Article XII hereof.

(v)

Without Seller Parent's prior written consent, in no event shall Buyer, and Buyer shall ensure that its Affiliates do not, terminate, amend, or modify, or waive any right or claim under or in respect of, any Completed Engagement if doing so would reasonably be expected to materially diminish or reduce any Expense Income or Retained Fee Income to which Sellers or their Affiliates would have been entitled absent such termination, amendment, modification or waiver.

(vi)

For the avoidance of doubt and anything to the contrary notwithstanding, all benefits, burdens, receivables, obligations, claims, indemnities, contributions and other rights and Liabilities arising in respect of Engagements not constituting Assigned Engagements shall remain with and inure to Sellers.

(b)

The parties further agree as follows with respect to the Assigned Engagements that are Pending Loan Syndications:

(i)

For the avoidance of doubt, the parties hereby acknowledge with respect to Assigned Engagements that are Pending Loan Syndications that (i) the Assumed C Liabilities with respect thereto will be limited to obligations in respect of best efforts undertakings to arrange credit with respect to such Assigned Engagements, (ii) any obligations or commitments to extend (rather than arrange) credit or administer any credit facility shall constitute Excluded C Liabilities (and shall in no event constitute Assumed C Liabilities) and (iii) except in the cases described in Section 2.05(b)(ii), the credit extended by Sellers and their Affiliates shall not be taken into account for determining compliance with any utilization limits, restrictions or tests under the Warehouse Facility Agreement.

(ii)

Neither Buyer nor any of its Affiliates shall be responsible for any Syndication Losses in connection with the syndication of any Pending Loan Syndication, unless the applicable Designated Buyer Affiliate agrees in its sole discretion to be responsible for Syndication Losses, determined on the basis and subject to the 10% Cap, in which case, the Pending Loan Syndication shall be subject to the Warehouse Facility Agreement in all respects, including for purposes of determining compliance with any utilization limits, restrictions or tests thereunder.

(iii)

With respect to Pending Loan Syndications, the Company agrees that, from and after the Initial Closing Date, it shall, and shall cause its Affiliates to, continue to honor the related loan commitments, where applicable, and perform its other applicable obligations thereunder in the ordinary course of business consistent with past practice.

(iv)

In addition, the parties agree as follows with respect to fees in respect of Pending Loan Syndications:  (A) in the case of Pending Loan Syndications involving commitments to extend credit made by the Company or its Affiliates, Buyer or the applicable Designated Buyer Affiliate shall not be entitled to a fee in connection with its syndication activities unless it undertakes, at its sole option, to assume responsibility for Syndication Losses subject to the 10% Cap, as described under clause (i) of this Section 2.05(b), in which case it shall be entitled to receive such portion of the fees or other compensation, however designated, to which the Company or its Affiliates would have been entitled pursuant to the relevant engagement letter or other applicable agreement with the respective borrower, as the Designated Buyer Affiliate and the Company or its applicable Affiliates shall agree, and (B), in the case of Pending Loan Syndications involving undertakings by the Company or its Affiliates to arrange credit on a best efforts basis, Buyer or the applicable Designated Buyer Affiliate shall be entitled to receive any fees or other compensation, however designated, to which the Company or its Affiliates would have been entitled in respect of such activities pursuant to the relevant engagement letter or other applicable agreement with the respective borrower.

(v)

With respect to each Pending Loan Syndication, whether or not an Affiliate of Buyer has accepted responsibility for such Pending Loan Syndication in accordance with clause (ii) of this Section 2.05(b), a Designated Buyer Affiliate shall use commercially reasonable efforts to syndicate such Pending Loan Syndication after the Initial Closing Date.

(vi)

For the avoidance of doubt, the Parties acknowledge that, to the extent any responsibility for Pending Loan Syndication is accepted in accordance with clause (ii) of this Section 2.05(b), such responsibility shall be accepted by a Designated Buyer Affiliate and not by Buyer or any Affiliate of Buyer that is a broker dealer

Section 0.5

Prorations

.  Sellers and Buyer agree that all of the items listed below relating to the business and operation of the Transferred C Businesses and the Purchased C Assets and Assumed C Liabilities, except to the extent any such items constitute Excluded C Liabilities, will be prorated as of the Initial Closing Date, with the applicable Seller liable to the extent such items relate to any time period up to and including the Initial Closing Date (or Landlord Consent Date with respect to each Assumed Lease), and Buyer liable to the extent such items relate to periods subsequent to the Initial Closing Date (or Landlord Consent Date with respect to each Assumed Lease):  (a) all Taxes imposed on a periodic basis, if any, payable by the lessee under the leases for the Premises subject to the Assumed Leases, or payable in respect of the Purchased C Assets; and (b) rents, fees, utility charges and other items p ayable by Seller under any Assumed Lease, or any other Assigned C Contract.  Sellers agree to furnish Buyer with such documents and other records as Buyer reasonably requests in order to confirm all adjustment and proration calculations made pursuant to this Section 2.06.  Sellers and Buyer further agree that if any information is not available as of the Initial Closing Date (or Landlord Consent Date with respect to each Assumed Lease) to determine all adjustment and proration calculations, such calculations shall be made using the most recently available information and when such information becomes available, the proration amount shall be adjusted in connection with the Final Initial Closing Date Statement.

Section 0.6

Consent of Third Parties

.  

(a)

Third Party Consents.  Anything to the contrary in this Agreement notwithstanding, to the extent that the sale, assignment, conveyance or transfer of any Purchased C Asset, Assigned Engagement or Assigned C Contract, or the transactions contemplated by the Service Agreement, requires the consent of a third party, this Agreement shall not constitute an agreement to effect such sale, conveyance, transfer or assignment, or sublease, if such action would constitute a breach or violation thereof or adversely affect Buyer's rights thereunder.  Sellers agree to use commercially reasonable efforts (with no obligation to pay any fee to any third party for the purpose of obtaining any consent or approval or any costs and expenses of any third party resulting from the process of obtaining such consent or approval) to obtain such consents (which shall be in form and substance reasonably satisfactory to Buyer) prior to the Initial Closing Date or the applicable Subsequent Closing Date in accordance with this Agreement.  To the extent that any such consent is not obtained prior to the Initial Closing Date or the applicable Subsequent Closing Date, Sellers shall use commercially reasonable efforts (with no obligation to pay any fee to any third party for the purpose of obtaining any consent or approval or any costs and expenses of any third party resulting from the process of obtaining such consent or approval) to (A) obtain any such consent after the Initial Closing Date or such Subsequent Closing Date, (B) to the extent reasonably practicable, enter into or facilitate lawful arrangements reasonably acceptable to Buyer and Sellers such Purchased C Asset, Assigned Engagement or Assigned C Contract for which with respect to such consent or waiver has not been obtained to provide or cause to be provided to Buyer the benefits of and to allocate the Liabilities for, such Purchased C Asset, Assigned Engagement or Assigned C Contract, as though the requisite consent or waiver had been obtained as of the Initial Closing Date or such Subsequent Closing Date, and (C) pay, defend, indemnify and hold Buyer harmless from any Liability suffered by Buyer as a result of any failure of Sellers to obtain such consent whether before or after the Initial Closing Date or any assertion by a third party that any arrangement contemplated by clause (B) constitutes a breach or violation of such third party's rights.  Notwithstanding anything to the contrary contained herein, the Company shall be obligated to pay to the applicable landlord under the Service Agreement or any Assumed Lease any amounts specified in such lease as due and owing in connection with the consents necessary in connection with such assignment or the use of space as contemplated by the Service Agreement, as applicable.

(b)

Consents Regarding 300 Madison Space Sharing Agreement. The parties acknowledge that the consent of BFP 300 Madison II LLC, as landlord under the 300 Madison Lease (the "Consent")  are required in connection with the transactions contemplated by the Service Agreement.  Upon the execution of this Agreement, Seller shall cause CIBC Delaware Holdings Inc., as tenant under the 300 Madison Lease (the "Service Provider"), to use commercially reasonable efforts to obtain the Consent, in writing and in form and substance reasonably acceptable to Buyer.  The Service Provider shall be obligated to pay to the landlord under the 300 Madison Lease any amounts specified in such lease as due and owing in connection with the consents necessary in connection with such use of space.  In the event the Consent is not obta ined on or prior to the Initial Closing Date, the Service Provider shall permit Buyer (or its designated Affiliate) to occupy the space that was intended to be demised by the Service Agreement (the "Space") and the Company shall indemnify Buyer and its Affiliates for any and all costs, expenses and damages (including, without limitation, the 300 Madison Liabilities) that may be incurred by Buyer and its Affiliates as the result of their occupancy of the Space without such Consent.  In the event that the Service Provider is required to relocate Buyer and/or its Affiliates from the Space or if Buyer and its Affiliates (including employees of the Transferred C Business or Transferred O Businesses) are unable to occupy the portion of the demised premises contemplated by the Services Agreement, Seller Parent and the Company shall be required to provide Buyer and its Affiliates with alternative office and trading floor space within Manhattan ("Alternate Space") in accordance with the relocation provisions contemplated by the Services Agreement.  Sellers will give Buyer prompt written notice of any notice or the filing of any Legal Proceeding challenging Buyer's or Buyer's Affiliates' right to occupy the Space.

Section 0.7

Designated Buyer Affiliates

.  Prior to the Initial Closing Date or any Subsequent Closing Date, as applicable, Buyer may designate one or more of its Affiliates not party to this Agreement (each, a "Designated Buyer Affiliate") to participate in the purchase and assumption of any portion or all of the Purchased C Assets and Assumed C Liabilities, as designated by Buyer, to be conveyed at the Initial Closing Date or the applicable Subsequent Closing Date, provided that no such designation shall relieve Buyer or Buyer Parent of their obligations under this Agreement and all such Designated Buyer Affiliates shall agree in writing to be bound by this Agreement in relation to the specific Purchased C Assets and Assumed C Liabilities so conveyed to such Designated Buyer Affiliate as if they were parties hereto, and all such Designated Buyer Affiliates (other than any Loan Entity) shall be jointly and seve rally liable with Buyer for all of Buyer's obligations hereunder in relation to the specific Purchased C Assets and Assumed C Liabilities so conveyed to such Designated Buyer Affiliate.

Section 0.8

Initial Closing

.  The consummation of the transactions provided for in this Section 2.09 (the "Initial Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York  10036, at 10:00 a.m., Eastern time, on the date on or after January 2, 2008 that is three (3) business days after the fulfillment or waiver (where relevant) of the conditions set forth in Article VIII and Article IX (other than those conditions which by their nature are to be satisfied on the Initial Closing Date), or on such other date and time as shall be agreed upon in writing by Buyer and Seller Parent.  The date on which the Initial Closing actually occurs is referred to herein as the "Initial Closing Date."  The Purchased C Assets and Assumed C Liabilities to be conveyed at the Initial Closing shall include all of the Purchased C Assets and Assumed C Liabilities other than those expressly contemplated as being transferred at a Subsequent Closing, as provided in Section 2.10 and the parties hereby acknowledge and agree that no conveyance of Purchased C Assets or Assumed C Liabilities shall occur prior to the Initial Closing.  Notwithstanding anything herein to the contrary, in the event the Initial Closing occurs on or prior to January 15, 2008, the Parties shall for all purposes hereof, to the extent permitted by applicable Law, deem the Initial Closing to have occurred on, and be effective as of, January 2, 2008, and in connection therewith, the Parties shall (x) use their commercially reasonable efforts to cause all other Persons, to the extent permitted by applicable Law to similarly deem the Initial Closing to have occurred on, and be effective as of, such date and (y) pursuant to and in accordance with Section 3.10, make such payments and reimbursements between them as are necessary to refl ect that all benefits, revenues, expenses, costs, risks and other results in respect of the Purchased C Assets and Assumed C Liabilities subject to the Initial Closing Date (including compensation and benefits) are transferred and assumed as of the Initial Closing Date (the results of the Transferred C Businesses relating to the Purchased C Assets and Assumed C Liabilities transferred and assumed at the Initial Closing for a period from January 2, 2008 through the Initial Closing Date are referred to as the "Interim Results").

(a)

Agreements to be Entered into at the Initial Closing.  At the Initial Closing, the parties shall, and shall cause their respective Affiliates to, as applicable, execute and deliver or cause to be executed and delivered (unless delivered previously or waived) the following Ancillary Agreements:

(i)

duly executed counterparts of the Clearing Agreement;

(ii)

duly executed counterparts of the Research Agreement;

(iii)

duly executed counterparts of the Registration Rights Agreement;

(iv)

duly executed counterparts of the Service Agreement;

(v)

duly executed counterparts of the Warehouse Facility Agreement;

(vi)

duly executed counterparts of the Loan Trading Facility Agreement;

(vii)

duly executed counterparts of the Subordinated Term Loan Facility Agreement;

(viii)

duly executed counterparts of the Electronic Trading Agreement; and

(ix)

duly executed counterparts of the Account Conversion MOU.

(b)

Deliveries by the Parties.  At the Initial Closing, the parties shall deliver or cause to be delivered (unless delivered previously) to one another the following:

(i)

Deliveries by Buyer and Buyer Parent to Sellers:  

(A)

Buyer Parent shall deliver the Warrant to Seller Parent;

(B)

Buyer shall pay the Company an amount in cash equal to the sum of the Estimated FFE Purchase Price and the Estimated TS Purchase Price applicable to the Purchased FFE and Transferred C Securities conveyed pursuant to the Initial Bill of Sale;

(C)

Buyer shall deliver to the Company a customary undertaking by Buyer relating to the Assumed C Liabilities assumed at the Initial Closing in a form to be mutually agreed;

(D)

Buyer and Buyer Parent shall deliver the certificate contemplated by Section 8.01(a); and

(E)

Buyer and Buyer Parent shall deliver to the Company and Seller Parent all other documents, certificates, instruments or writings required to be delivered by Buyer Parent or Buyer at or prior to the Initial Closing pursuant to this Agreement or otherwise required in connection herewith.

(ii)

Deliveries by Sellers to Buyer:

(A)

Sellers shall deliver to Buyer a bill of sale relating to the Purchased C Assets purchased and sold at the Initial Closing in a form to be mutually agreed (the "Initial Bill of Sale");

(B)

Sellers shall deliver to Buyer a certification of non-foreign status from Sellers in the form and manner that complies with the requirements of Section 1445 of the Code and the regulations promulgated thereunder (a "FIRPTA Certificate");

(C)

subject to Sections 2.06 and 2.07, Sellers shall deliver to Buyer assignments of the Assigned C Contracts;

(D)

the Company and Seller Parent shall deliver the certificate contemplated by Section 9.01(a); and

(E)

Sellers shall deliver to Buyer all other documents, certificates, instruments or writings required to be delivered by Sellers at or prior to the Initial Closing pursuant to this Agreement or otherwise required in connection herewith.

Section 0.9

Subsequent Closings

.  

(a)

Assets Subject to Subsequent Closings.  The parties agree that (i) the C Israel Shares, (ii) the Transferred C UK Assets and Liabilities, and (iii) the Transferred C HK/Asia Assets and Liabilities (collectively, the "Subsequent Closing Assets and Liabilities") may not be conveyed to Buyer or the applicable Designated Buyer Affiliates until, in each case, the applicable Specified Conditions have been satisfied following the Initial Closing.

(b)

Subsequent Closing Dates and Location.  In relation to any Subsequent Closing Assets and Liabilities, the consummation of the conveyance in respect thereof (each, a "Subsequent Closing") shall take place on such date as may be agreed between Buyer and Seller following notification by Buyer of the fulfillment or waiver (where relevant) of all the outstanding Specified Conditions insofar as they relate to the relevant Subsequent Closing Assets and Liabilities (and, in any event, within ten (10) business days after such fulfillment or waiver); provided, however, Buyer may, in its sole discretion, delay the Subsequent Closing with respect to the transfer of the C Israel Shares for up to ninety (90) days (but not beyond the Subsequent Closing Outside Date).  The date on which a Subsequent Closing actually occurs is refe rred to herein as the "Subsequent Closing Date" with respect thereto, it being understood that, to the extent necessary, there shall be a separate Subsequent Closing for the portion of the Transferred HK/Asia Assets and Liabilities located in each of Beijing, Hong Kong and Singapore.  The parties hereby acknowledge and agree that no conveyance of Purchased C Assets or Assumed C Liabilities subject to any Subsequent Closing shall occur prior to the applicable Subsequent Closing  Each Subsequent Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York 10036, at 10:00 a.m., Eastern time, on the applicable Subsequent Closing Date.

(c)

Transfer of C Israel Shares.  On the Subsequent Closing Date applicable to the Israel Shares (or on the Initial Closing Date, if applicable) and for no additional consideration, the Company shall effect the transfer of the C Israel Shares to Buyer by delivering to Buyer the original certificate(s) accompanied by a duly executed share transfer instrument in customary form.  Anything to the contrary herein notwithstanding, the parties agree that, to the extent permissible under the applicable C Israel Support Arrangement, at the Subsequent Closing in respect of the C Israel Shares, the C Israel Support Arrangements shall be fully and unconditionally terminated and released in accordance with documentation satisfactory to Seller Parent.

(d)

Transfer of Transferred C UK and Transferred HK/Asia Assets and Liabilities.  On the Subsequent Closing Dates applicable to the Transferred C UK Assets and Liabilities and the Transferred C HK/Asia Assets and Liabilities and for no additional consideration other than the applicable FFE Purchase Price as provided in the immediately following sentence, the conveyance of such Transferred C UK Assets and Liabilities or Transferred C HK Assets and Liabilities, as applicable, shall be effected by, as applicable, UK Seller's or Asia Seller's execution and delivery of (i) a bill of sale relating to the applicable Purchased C Assets purchased and sold at such Subsequent Closing in a form to be mutually agreed (a "Subsequent Bill of Sale") and (ii) a customary undertaking by the applicable Designated Buyer Affiliate relating to the Assumed C L iabilities assumed at such Subsequent Closing in a form to be mutually agreed (a "Subsequent Undertaking").  At the applicable Subsequent Closing, Buyer or the applicable Designated Buyer Affiliate shall pay UK Seller or Asia Seller, as applicable, the FFE Purchase Price applicable to the purchase FFE conveyed pursuant to such Subsequent Bill of Sale.  In the event of any such payment of the FFE Purchase Price, such payment shall be subject to adjustment in accordance with the applicable provisions of Sections 3.01 and 3.02 payable at such Closing.

(e)

Conduct of Certain Non-U.S. Businesses Pending Subsequent Closings.

(i)

With respect to equity sales transactions originated by UK Seller or C Israel employees among the Transferred C Businesses that have traditionally been booked by the Company, if at all, the Parties shall negotiate in good faith agreements providing for such transactions, following the Initial Closing and until the applicable Subsequent Closing or the date on which this Agreement is terminated in respect of the applicable assets, whichever is earlier, to be introduced by UK Seller or C Israel, as applicable, to Buyer and which provide for fees or other compensation payable by Buyer to UK Seller or C Israel, as applicable, that replicate as nearly as reasonably practicable Sellers’ customary allocation of revenues in respect of such transactions between UK Seller or C Israel, as applicable, and the Company prior to the date hereof.

(ii)

With respect to investment banking engagements originated by Asia Seller or C Israel employees among the Transferred C Businesses that have traditionally been introduced by Asia Seller or C Israel to the Company, if at all, the Parties shall negotiate in good faith agreements providing for such transactions, following the Initial Closing and until the applicable Subsequent Closing or the date on which this Agreement is terminated in respect of the applicable assets, whichever is earlier, to be introduced by Asia Seller or C Israel, as applicable, to Buyer and which provide for fees or other compensation payable by Buyer to Asia Seller or C Israel, as applicable, or if applicable, by Asian Seller to Buyer, that replicate as nearly as reasonably practicable Sellers’ customary allocation of revenues in respect of such transactions between Asia Seller or C Israel, as applicable, and the Company prior to the date hereof.

(iii)

Subject to the agreements contemplated by the foregoing clauses (a) and (b), all Liabilities, Damages and benefits of the Transferred C Businesses subject to the Subsequent Closings shall be for the account of Sellers until the applicable Subsequent Closing is consummated in accordance with this Agreement.

(f)

Subsequent Closing Outside Date.  If any Subsequent Closing has not taken place in accordance with this Section 2.10 before the date that is one hundred eighty (180) days after the Initial Closing Date as agreed by the Parties, (the "Subsequent Closing Outside Date"), then Sellers shall have the right (but not the obligation) to terminate their obligations relating to the sale and transfer of the applicable Subsequent Closing Assets and Liabilities in accordance with Section 11.04 and retain such Subsequent Closing Assets and Liabilities for Sellers' account.  From and after the date which is ninety (90) days after the Initial Closing, appropriate representatives of the parties shall meet on a regular basis to discuss the status of items necessary for the satisfaction of any Specified Condition not then satisfied.  If at any time after the date which is ninety (90) days following the Initial Closing Date, it becomes reasonably apparent that any Specified Condition will not be satisfied by the Subsequent Closing Outside Date, the parties will enter into good faith discussions regarding a partial termination of this Agreement in accordance with the provisions of Section 11.04 with respect to the applicable Subsequent Closing Outside Date.

Section 0.10

Schedules

.  The Parties agree that certain of the Schedules hereto, and certain Sections of the Seller Disclosure Schedule, in each case which are qualified by reference to this Section 2.11, could not be completed prior to the date of this Agreement due to constraints imposed by the parties' mutual desire to maintain the confidentiality of the transactions contemplated by this Agreement within their respective companies.  Accordingly, the Company shall complete such Schedules and Sections of the Seller Disclosure Schedule and deliver to Buyer such completed Schedules and an updated Seller Disclosure Schedule, reflecting the completion of the applicable Sections thereof contemplated by this Section 2.11, within fifteen (15) business days after the date hereof such Schedules and updated sections of the Seller Disclosure Schedule shall be prepared by the Company in good fait h and in a manner consistent with the provisions of this Agreement, and the matters to be set forth on each Schedule and each Section of the Seller Disclosure Schedule subject to this Section 2.11 shall be generally consistent with the information previously provided to Buyer with respect to the Transferred C Businesses and the assets, liabilities and personnel thereof.  Such Schedules and updated Sections of the Seller Disclosure Schedule shall in all regards be subject to the written consent of Buyer (not to be unreasonably withheld) and Buyer and its representative shall be provided appropriate opportunity to review and comment on such items.  Such Schedules and updated Seller Disclosure Schedule shall, following such consent of Buyer, be binding for all purposes under this Agreement and subject to further adjustment solely in accordance with the express terms of this Agreement.  Notwithstanding anything to the contrary herein, any disclosure or item which become s part of any Schedule hereto pursuant to this Section 2.11 that (i) are outside the ordinary course of business of the Transferred C Businesses and would reasonably be expected to have an adverse impact on the Transferred C Businesses in an amount reasonably expected to exceed $250,000 on an individual basis, or (ii) that are Contracts for services the purpose of which is to support the businesses of Seller and its Affiliates but will not be used to support the Transferred C Businesses, with respect to which the adverse impact on Buyer with respect thereto exceeds $250,000, in each case, such disclosure or item shall constitute, as applicable, an Excluded C Asset or Excluded C Liability solely for purposes of Article XII hereof.

Section 0.11

Impact of Failure to Obtain Permits.

Notwithstanding anything herein or in any Ancillary Agreement to the contrary, nothing in this Agreement shall obligate Buyer or any of its Affiliates to accept any asset or assume any Liability or undertake any obligation hereunder or under any Ancillary Agreement in any jurisdiction in which doing so would be prohibited by applicable Law, including as a result of the failure for any reason of Buyer or any of its Affiliates to have Permits necessary to conduct the Transferred C Business in any jurisdiction.  Without limiting the generality of the foregoing, Buyers and Sellers agree and acknowledge that a Loan Entity shall not be obligated to conduct any activities in any jurisdiction, including pursuant to Section 2.05(b) hereof in the event that such Loan Entity fails to obtain any Permit necessary to perform any activities in connection with a Pending Loan Syndication.  The parties furthe r agree to consider and cooperate in good faith with respect to appropriate actions in respect of any regulatory considerations or issues with respect to such Permits.

ARTICLE I

CONSIDERATION

Section 1.1

Closing Date Consideration

.

(a)

Furniture, Fixtures and Equipment.

(i)

Upon the terms and subject to the conditions contained in this Agreement, at the Initial Closing or any other applicable Closing, Buyer will pay to the applicable Seller the depreciated book value as of the applicable Closing Date, determined in accordance with GAAP, of all Purchased FFE purchased at such Closing less $2,000,000 (in each case, the "FFE Purchase Price").  Schedule 3.01(a) describes the manner in which such depreciated book value of the Purchased FFE shall be determined.

(ii)

At least three (3) business days prior to the Initial Closing Date, the Company will provide Buyer with its reasonable, good faith estimate of the FFE Purchase Price payable at the Initial Closing, together with such supporting lists of Purchased FFE and data as are considered reasonably necessary by either the Company or Buyer, and the Company will in good faith consider any comments or views of Buyer thereon.  The FFE Purchase Price in respect of the Initial Closing, as so estimated by the Company, after taking account of the views of Buyer, is referred to as the "Estimated FFE Purchase Price."

(iii)

At the Initial Closing, Buyer will pay to the Company the Estimated FFE Purchase Price in cash in immediately available U.S. funds by wire transfer to such accounts as shall be specified by the Company to Buyer at least three (3) business days prior to the Initial Closing.

(b)

Transferred C Securities.

(i)

Upon the terms and subject to the conditions contained in this Agreement, at the Initial Closing, Buyer will pay to the Company the market value as of the day immediately preceding as of the Initial Closing Date of all Transferred C Securities (the "TS Purchase Price"), which market value shall be determined using the closing market price as of such date, however, if no such price is available, the market value shall be the average of the last three (3) most recent trades as made available on Bloomberg (or, if not so available, another authoritative source reasonably acceptable to Buyer and the Company).  For the convenience of the parties hereto, subject to applicable Law, Seller may, in its discretion, sell and Buyer shall buy such securities in the ordinary course via "tickets" with trade date as of the close of business prior to Initial Closing Dat e and settlement date as of the Initial Closing Date, so as to correctly calculate principal amount, accrued interest and other such terms of each security transferred.  For purposes of illustration only, Schedule 3.01(b) hereto sets forth a good faith illustration of the calculation of a possible TS Purchase Price as of September 28, 2007 of the Transferred C Securities of the Company set forth in Schedule 3.01(b).

(ii)

At least three (3) business days prior to the Initial Closing, the Company will provide Buyer with its reasonable, good faith estimate of the TS Purchase Price, together with such schedules and data as are considered reasonably necessary by either the Company or Buyer, and the Company will in good faith consider any comments or views of Buyer thereon which estimate shall be updated by the Company as of the close of business on the day immediately preceding the Initial Closing Date.  The TS Purchase Price, as so estimated and updated by the Company, after taking account of the views of Buyer, is referred to as the "Estimated TS Purchase Price."

(iii)

At the Initial Closing, Buyer will pay to the Company the Estimated TS Purchase Price in cash in immediately available U.S. funds by wire transfer to such accounts as shall be specified by the Company to Buyer at least three (3) business days prior to the Initial Closing or by settlement through NSCC/DTC as agreed by the parties in the ordinary course.

(c)

Warrant.  At the Initial Closing, Buyer Parent will deliver the Warrant to Seller Parent.

Section 1.2

Post-Closing Adjustments for Initial Closing Payments

.

(a)

The Estimated FFE Purchase Price and the Estimated TS Purchase Price will be subject to review and adjustment following the Initial Closing Date in accordance with this Section 3.02.

(b)

As soon as reasonably practicable, but not later than ninety (90) calendar days after the Initial Closing Date, the Company shall (i) prepare a statement of the calculation of the FFE Purchase Price payable on the Initial Closing Date and the TS Purchase Price, in each case, as of the close of business on the Initial Closing Date (the "Initial Closing Date Statement"), and (ii) deliver such Initial Closing Date Statement to Buyer.

(c)

In connection with the review of the Initial Closing Date Statement, the Company shall permit Buyer and its representatives reasonable access to books and records, personnel and facilities of the Company to aid in its review of the Initial Closing Date Statement; provided that such access shall be on prior written notice and during normal business hours and shall not unreasonably interfere with the normal business operations of the Company.  Without limiting the foregoing, Buyer shall have the right to review the work papers of the Company and its representatives underlying or utilized in preparing the Initial Closing Date Statement, or any component thereof, to the extent reasonably necessary to verify the accuracy and fairness of the presentation of the Initial Closing Date Statement, or any component thereof, in conformity with this Agreement; provided that access to the work papers of any outside accountants shall require the execution of customary indemnity and confidentiality agreements by the Person seeking such access.

(d)

Within twenty (20) calendar days after its receipt of the Initial Closing Date Statement, Buyer shall either inform the Company in writing that the Initial Closing Date Statement is acceptable or object thereto in writing, setting forth a specific description of each of his objections.  If Buyer notifies the Company of its objections to the Initial Closing Date Statement within such twenty (20) calendar-day period, the Company and Buyer shall, within twenty (20) calendar days following the receipt of such notice by the Company (the "PC Resolution Period"), attempt in good faith to resolve their differences with respect to the disputed items specified in the notice (the "PC Disputed Items"), and all other items (and all calculations relating thereto) in the Initial Closing Date Statement will be final, binding and conclusive .  Any resolution by Buyer and the Company during the PC Resolution Period as to any PC Disputed Item shall be set forth in writing and will be final, binding and conclusive.  If the parties do not resolve such PC Disputed Items on a mutually agreeable basis within the PC Resolution Period, then the remaining PC Disputed Items shall be resolved by a mutually-agreed independent accounting firm (the "PC Referral Firm") within an additional twenty (20) calendar days (or such other period of time requested by the PC Referral Firm) in accordance with Section 3.02(e).  Buyer shall make available to the Company (upon request following the giving of any objection to the Initial Closing Date Statement) the work papers generated in connection with Buyer's review of the Initial Closing Date Statement.  The decision of the PC Referral Firm with respect to the PC Disputed Items submitted to the PC Referral Firm will be final, binding and conclusive.  The final, binding and conclusive Initial Closing Date Statement based either upon agreement or deemed agreement by Buyer and the Company or the determination of the PC Referral Firm in accordance with this Section 3.02(d), shall be the "Final Initial Closing Date Statement."  The statements of FFE Purchase Price  and TS Purchase Price set forth on the Final Closing Statement shall be the "Final FFE Purchase Price" and "Final TS Purchase Price" for purposes of this Agreement.

(e)

In resolving any PC Disputed Item, the PC Referral Firm (i) shall be bound by the provisions of this Section 3.02(e), the definitions in this Agreement and the other relevant provisions of this Agreement, (ii) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value claimed for such item, by either the Company or Buyer and (iii) shall limit its decision to the PC Disputed Items.  The fees, costs and expenses of the PC Referral Firm shall be borne by Buyer and the Company equally.

(f)

Promptly after receipt of the Final Initial Closing Date Statement, the Company will compute the difference, if any, of (i) the Estimated FFE Purchase Price minus the Final FFE Purchase Price and (ii) the Estimated TS Purchase Price minus the Final TS Purchase Price, such that, if such aggregate results are greater than zero (0), then the Company will pay Buyer such excess, and if such aggregate results are less than zero (0), then Buyer will pay the Company such excess.  The amount of any payment to be made pursuant to this Section 3.02(f) shall bear simple interest from and including the Initial Closing Date to but excluding the date of payment at a rate per annum equal to the rate of interest published by the Wall Street Journal (Eastern edition) on the third business day immediately preceding the Initial Closing Date as the "prime rat e" at large U.S. money center banks.  Such interest shall be payable at the same time as the payment to which it relates.

Section 1.3

Deferred Purchase Price

.  Buyer Parent will cause the Company to be paid a deferred purchase price (the "Deferred Purchase Price Payment") on the 90th day following the fifth anniversary of the Initial Closing Date (the "Deferred Payment Date") in an amount determined in accordance with this Section 3.03.

(a)

Within ninety (90) days after each of the first through fifth anniversaries of the Initial Closing (if the Initial Closing occurs on or prior to January 15, 2008, for purposes of this Section 3.03, each such anniversary date shall be deemed to occur on December 31 of each applicable year, each, a "Reference Date"), Buyer shall calculate Operating Income for the twelve (12)-month period (or portion thereof, if applicable, in the case of the first anniversary) ended on such Reference Date (each such period, a "Reference Year").  On the basis of the Operating Income for a given Reference Year, an "Allocated Amount" shall be determined for such Reference Year (none of which Allocated Amounts for any given Reference Year shall be less than zero (0)) equal to the greater of (i) either (A) in the event that the Operating Margin for the relevant Reference Year is less than or equal to 8%, the corresponding Allocated Amount would be equal to 50% of Operating Income for such Reference Year or (B) in the event that Operating Margin is greater than 8%, the Allocated Amount for such Reference Year would be equal to a percentage of the Operating Income determined in accordance with Schedule 3.03(a) or (ii) $5 million (as such amount may be reduced pursuant to Schedule 3.03(b)(vi) (which Schedule was delivered and agreed to by Buyer and the Company prior to the execution and delivery of this Agreement)).  The Deferred Purchase Price Payment shall equal the sum of the Allocated Amounts for each of the five (5) Reference Years.  For the sake of clarity, Operating Income shall be calculated separately for each Reference Year and no component of the calculation thereof shall be carried forward to any subsequent Reference Year or otherwise be cumulative in any way.

(b)

"Operating Income" for each Reference Year shall be calculated in accordance with the provisions of Schedule 3.03(b).

(c)

For purposes of illustration, Schedule 3.03(c) sets forth various examples of Allocated Amount, measured against differing Operating Incomes and Operating Margins.

Section 1.4

Payment of Deferred Purchase Price

.  The Deferred Purchase Price Payment shall be paid on the Deferred Payment Date, as follows:

(a)

Buyer Parent shall cause Viner to pay to the Company, at least 25% of the Deferred Purchase Price Payment in cash in immediately available U.S. funds by wire transfer to an account designated by the Company in writing at least three (3) business days prior to the Deferred Payment Date (the "Designated Account").  The remaining balance of the Deferred Purchase Price Payment not so paid in cash in accordance with this Section 3.04(a) may be paid, at the discretion of Buyer Parent, in accordance with Section 3.04(b).

(b)

Any portion of the Deferred Purchase Price Payment not paid in cash (such portion, the "Remaining Amount") shall be paid by effecting the transactions specified in clauses (i) through (iv), below, in the order specified below, in immediate succession.  Unless the entire Deferred Purchase Price Payment is paid in cash, not later than five (5) business days prior to the Deferred Payment Date, Buyer Parent shall deliver a written notice (the "Deferred Payment Notice") to Seller Parent specifying (1) the portion of the Deferred Purchase Price Payment to be paid in cash in accordance with Section 3.04(a), (2) the aggregate amount in dollars of Buyer Parent Shares, if any, that Buyer Parent elects to sell to Seller Parent pursuant to clause (i) below (the "Share Amount"), (3) the aggregate principal amount of Viner Debentures, if any, that Viner elects to sell to the Company or, at the Company's election, a U.S. Affiliate of the Company, pursuant to clause (ii) below (the "Debenture Amount"), (4) the account to which Seller Parent is directed to wire the purchase price payable to Buyer Parent pursuant to clause (i), if applicable, and (5) the account to which the Company or, at the Company's election, its applicable U.S. Affiliate is directed to wire the purchase price payable to Viner pursuant to clause (ii), if applicable.  Anything to the contrary notwithstanding, the value of the Buyer Parent Shares, if any, to be purchased by Seller Parent pursuant to clause (i) below, determined in accordance with clause (i), together with the aggregate principal amount of the Viner Debentures to be purchased by the Company or, at the Company's election, its applicable U.S. Affiliate pursuant to clause (ii) below, shall equal the Remaining Amount.

(i)

To the extent specified in the Deferred Payment Notice, Seller Parent shall pay Buyer Parent an amount in cash in immediately available U.S. funds equal to the portion of the Remaining Amount corresponding to the Buyer Parent Shares, as specified in the Deferred Payment Notice, by wire transfer of immediately available funds to the account designated in the Deferred Payment Notice to fund Seller Parent's purchase of a number of Buyer Parent Shares having an aggregate Fair Market Value as of the Deferred Payment Date equal to the Share Amount, which Buyer Parent Shares Buyer Parent shall deliver to Seller Parent against receipt of such cash payment;

(ii)

To the extent specified in the Deferred Payment Notice, the Company or, at the Company's election, a U.S. Affiliate of the Company shall pay Viner an amount in cash in immediately available U.S. funds equal to the portion of the Remaining Amount corresponding to Viner Debentures, as specified in the Deferred Payment Notice, by wire transfer of immediately available funds to the account designated in the Deferred Payment Notice to fund the Company's or, at the Company's election, its U.S. Affiliate's purchase of a number of Viner Debentures having an aggregate principal amount equal to the Debenture Amount, which Viner Debentures Buyer Parent shall cause Viner to deliver to the Company or, at the Company's election, its designated U.S. Affiliate against receipt of such cash payment;

(iii)

Buyer Parent shall, and shall cause Viner to, contribute to Buyer an amount in cash equal to the Remaining Amount; and

(iv)

Buyer shall pay the Company an amount in cash in immediately available U.S. funds equal to the Remaining Amount by wire transfer to the Designated Account.

(c)

To the extent that Sellers have any obligations to indemnify Buyer Indemnitees pursuant to Article XII which are unsatisfied as of the Deferred Payment Date, Buyer may, in its sole discretion, offset the amount of any such unsatisfied obligations against the deferred Purchase Price Payment.

Section 1.5

Reporting Covenants Relating to Deferred Purchase Price

.  From and after the Initial Closing Date until the payment of the Deferred Purchase Price, Buyer shall deliver the following to the Company:

(i)

As soon as reasonably practicable after the end of each of the first three quarters of each Reference Year, a pro forma statement of income of the OIB Division as a stand alone division for the period then ended, together with a calculation of Operating Income for such period, along with supporting schedules relating to such calculation and relevant supporting information for all related balance sheet items;

(ii)

As soon as reasonably practicable after the end of each Reference Year, a pro forma statement of income of the OIB Division as a stand alone division for the year then ended, together with a calculation of Operating Income for such period , along with supporting schedules relating to such calculation and relevant supporting information for all related balance sheet items; and

(iii)

As soon as reasonably practicable after the end of each Reference Year, and not later than forty-five days (45) days thereafter, a statement (each, an "Annual Statement") setting forth in reasonable detail Buyer's calculation of the Allocation Amount in respect of such Reference Year and each component thereof.

Section 1.6

Review of Allocation Amounts

.

(a)

The Allocated Amount for each Reference Year shall be subject to review and adjustment in accordance with this Section 3.06.

(b)

Upon the written request of the Company, Buyer shall permit the Company and the Company's representatives to have access during normal business hours (which access shall not unreasonably interfere with the normal business operations of Buyer) to such of the records of Buyer and the other Relevant Entities as may be reasonably necessary to verify the accuracy of Buyer's Annual Statement for any Reference Year; provided, however, that Seller and its representatives have entered into a confidentiality agreement in customary form and substance; and provided, further, that no more than one such audit may be performed in any twelve (12)-month period.  The Company and its representatives shall have access to such records for a period reasonably sufficient to complete their investigation.  

(c)

If the Company disagrees with the calculation of any Allocated Amount, the Company shall so notify Buyer in writing, setting forth its objections in reasonable detail.  In such event, the Company and Buyer shall, within twenty (20) calendar days following the receipt of such notice by the Company (the "AA Resolution Period"), attempt in good faith to resolve their differences with respect to the disputed items specified in the notice (the "AA Disputed Items").  Any resolution by Buyer and the Company during the AA Resolution Period as to any AA Disputed Item shall be set forth in writing and will be final, binding and conclusive.  If the parties do not resolve such AA Disputed Items on a mutually agreeable basis within the AA Resolution Period, then the remaining AA Disputed Items shall be resolved by a mutually a greed independent accounting firm (the "AA Referral Firm") within an additional forty-five (45) calendar days (or such other period of time requested by the AA Referral Firm) in accordance with Section 3.06(d).  The Company shall make available to Buyer (upon request following the giving of any objection to any Annual Statement) the work papers generated in connection with the Company's review of such Annual Statement.  The decision of the AA Referral Firm with respect to the AA Disputed Items submitted to the AA Referral Firm will be final, binding and conclusive and utilized for purposes of calculating the Deferred Purchase Price Payment.

(d)

In resolving any AA Disputed Item, the AA Referral Firm (i) shall be bound by the provisions of this Section 3.06(d), the definitions in this Agreement, Section 3.03 of this Agreement and the other relevant provisions of this Agreement, (ii) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either the Company or Buyer and (iii) shall limit its decision to the AA Disputed Items.  The fees, costs and expenses of the AA Referral Firm shall be borne by Buyer and the Company equally.

(e)

Anything to the contrary notwithstanding, in the event that any review of, or dispute resolution process with respect to, any Allocation Amount(s) pursuant to this Section 3.06 is ongoing as of the Deferred Payment Date, then the Deferred Purchase Price Payment shall be paid, in accordance with Section 3.04, based upon the undisputed Allocation Amounts and elements of Allocation Amounts and accepting Buyer's position with respect to any disputed amount solely for the purpose of such determination.  Once any such disputed amounts or items are resolved in accordance with this Section 3.04, the underpaying or overpaying party shall pay the other party the amount of such overpayment or underpayment, together with simple interest thereon from and including the Deferred Payment Date to but excluding the date of payment at a rate per annum equ al to the rate of interest published by the Wall Street Journal (Eastern edition) on the business day immediately preceding the Deferred Payment Date as the "prime rate" at large U.S. money center banks, in cash in immediately available funds U.S. funds by wire transfer to an account specified by such party.

Section 1.7

Covenants for the Protection of the Deferred Purchase Price

.

(a)

Buyer and Buyer Parent agree during each Reference Year to use their commercially reasonable efforts to operate the OIB Division in a commercially reasonable manner consistent with its operation of their other businesses. Without expanding the foregoing, Buyer and Buyer Parent will use their commercially reasonable efforts, consistent with market and prudent business practices to (i) ensure that the business, activities, personnel, contacts, engagements, and Liabilities of the OIB Division will be structured, conducted and transacted in good faith and in a manner that, in Buyer's reasonable judgment, promotes the best interests of the OIB Division and its clients and the other divisions of Buyer and their clients (ii) manage, maintain and continue Transferred C Businesses and the Transferred O Businesses within the OIB Division and generally maintain the OIB Div ision as division within Buyer, in each case, during each Reference Year.

(b)

Without limiting the foregoing, Buyer and Buyer Parent shall fully comply with the terms of, and implement the transactions contemplated by, the O Transfer and Support Agreement in accordance with the terms and conditions thereof.

(c)

Notwithstanding anything to the contrary contained herein, nothing contained in this Agreement or the Ancillary Agreements, including the O Transfer and Support Agreement, shall prohibit a change in control of, or merger, consolidation, reorganization or sale or transfer of substantially all the assets of, or other similar business combination transaction or other extraordinary corporate transaction involving Buyer Parent or any Subsidiary or division thereof, including the OIB Division; provided, however, in the event of a sale to a third party that is not an affiliate of the Buyer Parent of C Israel or substantially all of the business and assets thereof, in either case, prior to the fifth anniversary of the Initial Closing Date, the Company shall be entitled to one-half (½) the net proceeds of such sale, payable promptly after receipt of su ch consideration.  For the avoidance of doubt, except as provided in the proviso of the immediately preceding sentence, no change of control, merger, consolidation or reorganization shall terminate or modify the obligations of Buyer and Buyer Parent hereunder.  In the event that Buyer Parent or any of its Affiliates sells, assigns, transfers or disposes all or any material portion of the capital stock of the entities comprising the OIB Division or all or any material portion of the operating assets of the OIB Division, Buyer Parent shall cause the acquiror to assume Buyer's and Buyer Parent's obligations under this Agreement.

Section 1.8

C Israel Indebtedness

.

(a)

Prior to or at the Initial Closing, at the discretion of the Company, the Company will direct and cause C Israel to repay (the "C Israel Loan Repayment") the C Israel Indebtedness owed by C Israel to the Company as of the applicable Subsequent Closing Date out of the following: (i) any and all cash, cash equivalents, securities, investments, positions, tradeable interests, instruments and other liquid financial assets held by C Israel immediately prior to the Subsequent Closing Date at which the C Israel Shares are transferred, less (ii) the minimum amount of cash or other capital that C Israel is required to maintain pursuant to applicable Law in respect of its capital requirements (such net amount, the "C Israel Cash").

(b)

If, following the C Israel Loan Repayment, the remaining amount of Closing C Israel Indebtedness (i) is less than $1,500,000, Buyer shall repay the remaining amount of such Closing C Israel Indebtedness to the Company at the Subsequent Closing at which the C Israel shares are transferred on behalf of C Israel or (ii) is $1,500,000 or greater, C Israel shall repay the remaining amount of such Closing C Israel Indebtedness in equal annual installments over a three (3)-year period on each anniversary of the Subsequent Closing at which the C Israel Shares are transferred, which obligation shall be an unsecured obligation of C Israel and shall not be guarantied by, or otherwise constitute an obligation of, any other Person, including Buyer and its Affiliates.  In the event such amount is to be repaid in three (3) annual installments pursuant to the foregoing cla use (ii), (x) the amount payable thereunder shall bear interest at LIBOR (as determined at such Subsequent Closing and each of the first two payment dates) from the Subsequent Closing at which the C Israel Shares are transferred and (y) at the Subsequent Closing at which the C Israel Shares are transferred, the parties shall cause C Israel to deliver to the Company a written acknowledgement of its obligations under this Section 3.08(b).

(c)

Notwithstanding anything to the contrary herein, if the Subsequent Closing with respect to the purchase by Buyer (or a Designated Buyer Affiliate) of the C Israel Shares fails to occur, neither Buyer Parent, Buyer or any of their Affiliates shall have any Liability or obligation in respect of repayment of the C Israel Indebtedness.

Section 1.9

Allocation of Consideration

.  

(a)

For purposes of this Section 3.09, "consideration" means the sum of (1) the sum of the FFE Purchase Price and the TS Purchase Price, after any adjustments effected in accordance with this Article III or elsewhere in this Agreement, (2) the Warrant and (3) the value of the Assumed C Liabilities recognized as liabilities for United States federal income tax purposes.  The consideration shall be allocated in conformity with Section 1060 of the Code.  Such allocation shall be set forth in a schedule (the "Proposed Initial Purchase Price Allocation").  Buyer shall prepare a draft of the Proposed Initial Purchase Price Allocation and deliver it, together with supporting schedules and information, to the Company within ninety (90) days after the Initial Closing Date (or such longer set period as Buyer may reasonab ly require).  If within thirty (30) days after Buyer has provided the Proposed Initial Purchase Price Allocation to Seller, Seller has not objected in writing to the Proposed Initial Purchase Price Allocation, the Proposed Initial Purchase Price Allocation shall become the Final Initial Purchase Price Allocation of the consideration (the "Final Initial Purchase Price Allocation").  Otherwise, the Company shall deliver a written statement of its differences with Buyer's Proposed Initial Purchase Price Allocation.  The Company and Buyer shall negotiate in good faith to agree upon the Final Initial Purchase Price Allocation.  If the Company and Buyer are unable to agree on the Final Initial Purchase Price Allocation within a sixty (60)-day period from receipt of notice from the Company objecting to the Proposed Initial Purchase Price Allocation, then all remaining disputed items shall be submitted to a nationally recognized independent accounting firm mutually chosen by the parties (the "Tax Allocation Referral Firm") for a decision that shall be rendered in a timely manner in order to permit the timely filing of all applicable forms with the IRS and other Tax authorities.  The Tax Allocation Referral Firm's review shall be final and binding on all parties.  The fees and expenses of the Tax Allocation Referral Firm shall be borne equally by Sellers and Buyer.

(b)

As soon as practicable after the Deferred Purchase Price Payment has been determined pursuant to Section 3.03, Buyer shall deliver the Company a statement (the "Proposed Final Allocation"), allocating the Deferred Purchase Price Payment to the Purchased C Assets.  The Proposed Final Allocation shall satisfy Section 1060 of the Code and the Treasury Regulations promulgated thereunder.  If within ninety (90) days (or such longer set period as Buyer may reasonably require) after Buyer has provided the Proposed Final Allocation to the Company, the Company has not objected in writing to the Proposed Final Allocation, the Proposed Final Allocation shall become the final allocation (the "Final Allocation").  Otherwise, the Company and Buyer shall negotiate in good faith to agree upon the Final Allocation.  If the Company and Buyer are unable to agree on the Final Allocation within a sixty (60)-day period from the receipt of notice from Seller objecting to the Proposed Allocation, then all remaining disputed items shall be submitted to the Tax Allocation Referral Firm.  The Tax Allocation Referral Firm's review shall be final and binding on all parties.  The fees and expenses of the Tax Allocation Referral Firm shall be borne equally by Seller and Buyer.

(c)

Each Seller and Buyer shall (i) timely file all forms (including IRS Form 8594) and Tax Returns required to be filed in connection with the Final Initial Purchase Price Allocation and the Final Allocation, (ii) be bound by such allocation for purposes of determining Taxes, (iii) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with such allocation and (iv) take no position, and cause its Affiliates to take no position, inconsistent with such allocation on any applicable Tax Return.  Sellers, on the one hand, and Buyer, on the other hand, will provide each other with copies of IRS Form(s) 8594 and any required exhibits thereto, consistent with the allocation determined pursuant to this Section 3.09 upon request.  In the event that an allocation set forth on the Final Initial Purchase Pri ce Allocation or the Final Allocation is disputed by any taxing authority, the party receiving notice of such dispute shall promptly notify the other party hereto concerning the existence of, material developments regarding, and resolution of such dispute.

Section 1.10

Interim Results

.  In the event that the Initial Closing occurs after January 2, 2007 and on or prior to January 15, 2008, Buyer and the Company shall effect the allocation of Interim Results contemplated by clause (y) of Section 2.09 as follows:

(a)

The Company shall calculate the Interim Results in good faith and in accordance with past practices and shall, within thirty (30) business days after the date on which the Initial Closing occurs, deliver to Buyer (i) a statement setting forth in reasonable detail the Company’s calculation of the Interim Results (the "Interim Results Statement"), and (ii) reasonable supporting documentation therefor.

(b)

Upon the reasonable written request of Buyer, the Company shall permit Buyer to have access during normal business hours (which access shall not unreasonably interfere with the normal business operations of Seller) to Seller’s books and records which may be reasonably necessary to verify the accuracy of the Interim Results.

(c)

Except as set forth in Section 3.10(d), (i) to the extent that the net Interim Results constitute a net loss, Buyer Parent shall cause Viner to pay the Company the amount of such loss within five (5) business days after the date of the Company’s Interim Results Statement or (ii) to the extent that the net Interim Results constitute a net gain, the Company shall pay Buyer the amount of such gain within five (5) business days after the date of the Company’s Interim Results Statement.  The paying party shall pay the applicable amount to the receiving party in cash in immediately available U.S. funds by wire transfer of immediately available funds to the account designated by the other party in writing.

(d)

If Buyer disagrees with the calculation of the Interim Results, Buyer shall so notify the Company in writing within twenty (20) business days after the date of the Interim Results Statement, setting forth its objections in reasonable detail.  In such event, Buyer and the Company shall resolve their dispute in accordance with the dispute resolutions procedures set forth in Section 3.06(c) through 3.06(e) (assuming applicable conforming changes).

ARTICLE II
LABOR, EMPLOYMENT, BENEFITS AND RETENTION

Section 2.1

C Front Office Employees

.

(a)

General Offers of Employment.  Except as set forth in Sections 4.01(b) through (h) below, Buyer shall extend offers of employment to each employee of the Company and their respective Affiliates employed primarily as a banker or other front office employee in the Transferred C Businesses whose name is set forth in Schedule 4.01 (the " C Front Office Employees") and, within ten (10) business days from the public announcement of the transactions contemplated by this Agreement and, to the extent applicable, such offer may be made contingent on satisfaction of the applicable Specified Conditions.  Schedule 4.01 shall separately identify each C Front Office Employee who is (1) is an Inactive Employee (as defined below) as of the date hereof, (2) is an employee of the Loan Portfolio Management Group or const itutes Credit Review Personnel, (3)  is a Business Management Employee (as defined below), (4) constitutes Proprietary Trading Personnel, (5) is an Asia Employee (as defined below), (6) is in the “Asia Pacific Invest and Corp Banking” line of business, (7) is in the “UK Invest and Corp Banking” line of business, (8) is a UK Employee (as defined below) and/or (9) is a Legal and Compliance Employee.  Schedule 4.01 shall not include any employees of the Company or its respective affiliates on long term disability on the date hereof.  The terms of each offer shall specify that employment with the OIB Division shall commence as of the Initial Closing Date, or, in the case of any C Front Office Employee located in a jurisdiction subject to a Subsequent Closing Date, on the applicable Subsequent Closing Date, and provide employment (i) in substantially the same position, (ii) in the same city, (iii) with the same vacation policy, and (iv) with terms and conditions including total compensation opportunity comparable to that provided by applicable Seller to such C Front Office Employee as of the date immediately preceding the Initial Closing Date or, the Subsequent Closing Date, as applicable (a "Comparable Offer").  Buyer will assume the employment agreement of each C Front Office Employee who is party to an employment agreement with an applicable Seller provided that such employment agreement is set forth under item 3 of Section 5.08(a) of the Seller Disclosure Schedule.

(b)

Employees on Short-Term Disability or Approved Leave of Absence.  Buyer's offer to any C Front Office Employee who is on short-term disability or any approved leave of absence (each an "Inactive Employee") on the Initial Closing Date or, in the case of an Inactive Employee located in a jurisdiction subject to a Subsequent Closing Date, on the applicable Subsequent Closing Date, shall be conditioned on such Inactive Employee's being ready and able to return to work within six months following the Initial Closing Date or the Subsequent Closing Date, as applicable, and such Inactive Employee shall not become an employee of Buyer or an Affiliate of Buyer unless and until such individual is ready and able to work as of the date within six months of the Initial Closing Date or the Subsequent Closing Date, as applicable.  

(c)

Employees on Long Term Disability.  Buyer shall not be required to extend offers of employment to any employee of the Company or its Affiliates who is on long-term disability as of the date hereof.

(d)

Loan Portfolio Management Group; Credit Review Personnel.  Buyer shall not be permitted to extend offers of employment to any employee in the Loan Portfolio Management Group or to any Credit Review Personnel.

(e)

Business Management Employees and Legal and Compliance Employees.  Buyer shall not be required to extend offers to C Front Office Employees identified as "Business Management Employees" in Schedule 4.01 ("Business Management Employees") or as “Legal and Compliance Employees” in Schedule 4.01(a) (“Legal and Compliance Employees”); provided that in the event that Buyer elects to make offers to one or more Business Management Employees or Legal and Compliance Employees, each such offer must be delivered within 30 days from the public announcement of the transactions contemplated by this Agreement, and such offer shall provide employment effective upon the Initial Closing Date (or a Subsequent Closing Date, as applicable) and such offer shall be a Comparable Offer.  

(f)

Proprietary Trading Personnel.  Buyer shall notify Seller in writing within five (5) business days after the date hereof which of the Proprietary Trading Personnel it does not intend to retain following the Closing Date (the "Identified Proprietary Trading Personnel").  At the Seller's request (such request to be given within five (5) days following receipt of such notification), the Buyer will not make offers of employment to any of the Identified Proprietary Trading Personnel that the Seller identifies as employees that it wishes to retain.  

(g)

Asia Employees. Asia Employees are employees of the Company and the Asia Seller and their respective Affiliates who work primarily in or for C Transferred Businesses located in Asia.  Buyer and Seller acknowledge and agree that they will give each other such assistance as either may reasonably require to comply with their respective obligations under the Laws of the applicable jurisdiction concerning the transfer of Asia Employees to Buyer.  Such assistance shall include without limitation Buyer providing offers to Asia Employees located in Hong Kong no later than seven (7) days before the respective employees’ date of employment termination.  

(h)

UK Employees.  (i)

Subject to the satisfaction of the Specified Conditions, Buyer and Sellers acknowledge and agree that the Transfer of Undertakings (Protection of Employment) Regulations of 2006 ("TUPE") will apply to the sale and purchase of the Transferred C Businesses located in the United Kingdom and to each employee of the Company and the UK Seller and their respective Affiliates who works primarily in or for such Transferred C Businesses set forth in Schedule 4.01(i) (the "UK Employees").  The employment of each UK Employee shall transfer automatically to Buyer on the applicable Subsequent Closing Date on terms and conditions of employment (including bonus and incentive compensation opportunities) that are no less favorable than those which applied immediately before the applicable Subsequent Closing Date.  

(ii)

Buyer and Sellers will give each other such assistance as either may reasonably require to comply with their respective obligations under TUPE in relation to the UK Employees and in contesting any claim by any person employed or engaged in the Transferred C Businesses at or before the applicable Subsequent Closing Date resulting from or in connection with this Agreement.  In particular, Seller will as soon as reasonably practicable and no later than seven to fourteen days after the signing of this Agreement provide to Buyer such information as Buyer requires to comply with its duty to inform and consult appropriate representative of the UK Employees pursuant to Regulation 13 of TUPE.  Not later than three days before the applicable Subsequent Closing Date, Buyer and Seller will send to each of the UK Employees a joint letter in terms to be agreed by Buyer and Sellers, conf irming the transfer of their employment to Buyer and details of their terms of employment and/or working conditions to the extent they will be different from those applicable at the time of the joint letter.

(iii)

Except as provided below, Buyer and Sellers agree that Buyer shall provide pension and retirement benefits for and in respect of each  UK Employee which are no less favorable than those which were provided by the Sellers immediately before the Subsequent Closing Date (notwithstanding that the provisions of TUPE may not apply to transfer those benefits). Where, immediately before the Subsequent Closing Date, a UK Employee was accruing defined benefits (as defined in section 152(7) of the UK Finance Act 2004), including for the avoidance of doubt where the UK Employee had a right to benefits calculated by reference to past service and salary at future retirement.

(i)

Deemed Acceptance.  The terms of each Comparable Offer shall further specify that, to the extent permitted by applicable Law, the offer will be deemed accepted unless the C Front Office Employee delivers a written rejection of the offer to Buyer no later than ten (10) calendar days following the date of the offer (the "Rejection Deadline").  As soon as reasonably possible after the Rejection Deadline, but in no event later than three (3) business days after any Rejection Deadline, the OIB Division shall provide Seller with a complete list of C Front Office Employees who have rejected Buyer's Offer of Employment.  Except as otherwise provided or except as prohibited by applicable Law, C Front Office Employees who do not timely reject an offer of employment from the OIB Division shall be deemed to have accepted the offer of e mployment and to have voluntarily resigned as employees of Seller and shall become employees of the OIB Division, in each case, effective on the Initial Closing Date or the applicable Subsequent Closing Date, as the case may be.  Except as prohibited by applicable Law, C Front Office Employees who reject an offer of employment from the OIB Division shall be deemed to have voluntarily resigned their employment with the applicable Seller as of the Initial Closing Date, unless Seller and Buyer have agreed that such C Front Office Employee may remain employed with Seller.  C Front Office Employees who become employees of the OIB Division shall transfer their licenses and registrations to the OIB Division-to the extent permitted by applicable Law.  

Section 2.2

C Infrastructure Employees

.  Except as provided herein, each employee of the Company and their respective Affiliates utilized primarily by the Transferred C Businesses who is not a C Front Office Employee (the "C Infrastructure Employees") shall remain an employee of the applicable Seller.  The Seller shall use commercially reasonable efforts to retain each such C Infrastructure Employee as would be necessary to perform transition services for the OIB Division during the Transition Period pursuant to the Transition Services Agreement or the Software License and IT Services Agreement.  Seller will provide Buyer with a list (15 business days after signing of this Agreement) of staff who are C Infrastructure Employees whom Seller has identified as staff that Buyer may need at the Initial Closing Date (or Subsequent Closing Date, as applicable) and may make offers to ("Specified C Infrastruc ture Employees").  Buyer will have until the conclusion of the Transition Period to make offers to such individuals and such offers must be Comparable Offers.  Buyer may not, without Seller consent, make offers of employment to any C Infrastructure Employee who is not a Specified C Infrastructure Employee.

Section 2.3

On-Campus Interview Offerees.

With respect to employment offers outstanding on the Initial Closing Date that were made by Sellers in the normal course of their on-campus interview process for employment commencing on or after the Initial Closing Date (“On-Campus Interview Offers”), Buyer shall honor the terms of such On-Campus Interview Offers as if such On-Campus Interview Offers were made by Buyer.  Buyer shall be liable for all salary, bonus, commission, costs, benefits and other employment-related Liabilities accrued or arising as a result of employment relating to the acceptance of any On-Campus Interview Offers, and Sellers shall have no liability to any party for any salary, bonus, commission, costs, benefits and other employment-related Liabilities accrued or arising as a result of employment relating to the acceptance of any On-Campus Interview Offers.  Any employ ee who accepts an On-Campus Interview Offer is hereinafter referred to as an "On-Campus Interview Employee."

Section 2.4

Transferred Employees.  

Sellers shall not take, and shall cause each of their Affiliates not to take, any action that would impede, hinder, interfere or otherwise compete with the OIB Division's effort to hire or retain any C Front Office Employee and any Specified C Infrastructure Employee.  Each C Front Office Employee and C Infrastructure Employee who accepts Buyer's offer of employment or is deemed to accept Buyer's offer of employment and each UK Employee, Asia Employee, On-Campus Interview Employee, and employee of C Israel is hereinafter referred to as a "Transferred C Employee").  

Section 2.5

Employment-Related Liabilities for Transferred C Employees

(a)

General Employment-Related Liability Provisions.  Subject to the other provisions the Article IV (including but not limited to the provisions of Section 4.05(b) and Section 4.10), with respect to all Transferred C Employees, (A) the applicable Seller shall remain liable for all salary, bonus, commission, costs, benefits and other employment-related Liabilities accrued or arising from events or conditions that occurred prior to the Initial Closing or the date a Transferred C Employee becomes employed with the OIB Division, whichever is later; and (B) the OIB Division shall assume Liability for all salary, bonus, commission costs, benefits and other employment related Liabilities accrued or arising  from events or conditions that occur on or after the Initial Closing or the date a Transferred C Employee becomes employed with the OIB Division, whichever is later; provided that nothing herein shall alter the rights and obligations of the parties outlined in Article XII of this Agreement.  Subject to the other provisions of this Article IV, with respect to any employee of any Seller who does not become a Transferred C Employee (the "Retained Employees"), the applicable Seller shall retain all Liabilities of whatsoever kind related to such Person's employment (the "Retained Employee Liabilities"), and the OIB Division shall not assume responsibility for any cost or liability with respect to the employment of any such Person; provided that nothing herein shall alter the rights and obligations of the parties outlined in Article XII of this Agreement.  Notwithstanding the above, or anything in this Agreement to the contrary, Buyer shall be solely liable for any liabilities accrued or arising under the RSA Plans (as defined below) as a result of any C Front Office Employee to whom Buyer is obligated t o make an offer pursuant to Section 4.01 (or of any C Infrastructure Employee to whom Buyer makes an offer) claiming entitlement to such benefits by reason of not receiving an offer of comparable employment.  Buyer's obligation under the preceding sentence shall not applyunless a court or other judicial body, government agency or arbitration tribunal makes a determination that such C Front Office Employee or C Infrastructure Employee is entitled to such benefits by reason of not receiving a comparable offer of employment.

(b)

Severance.

(i)

Transferred C Employees who are terminated by the OIB Division within twelve months following the Initial Closing Date shall be entitled to severance benefits that are equal in amount to the severance benefits, if any, to which such employees would have been entitled under the "CIBC USA Severance Pay Plan for Employees Earning an Annual Based Salary of US $50,000.00 or More," the "CIBC USA Severance Pay Plan for Employees Earning an Annual  Based Salary Below US $50,000.00", and the European Restructuring and Support Program (and each other severance program or arrangement maintained by Sellers in each other country in which Transferred C Employees are employed as set forth on Section 5.08(a) of the Seller Disclosure Schedule) (collectively, the "CIBC Severance Plans") had such individuals terminated employment with Sellers under the s ame circumstances as their termination from employment with the OIB Division.  As a condition of receiving separation benefits, any Transferred C Employee will be required to provide Buyer with a fully executed  release of any and all claims against Buyer and Sellers, and each of their affiliates and related individual and corporate parties, in a form satisfactory to Buyer and Seller and in compliance with applicable Laws (the “Release”).  Transferred C Employees who are employed by the OIB Division on or after the Initial Closing Date shall not be eligible to participate in, or receive benefits under, any severance plans of Sellers.  

(ii)

Seller shall reimburse Buyer for severance benefits paid to Transferred C Employees who are terminated by Buyer within 12 months of the Initial Closing Date, provided that, except as otherwise set forth in Section 4.05(b)(v), the aggregate amount reimbursed by Seller pursuant to this Section 4.05(b)(ii), when taken together with all Seller COBRA Costs incurred by Seller and Buyer COBRA Costs (each as defined in Section 4.14 reimbursed by Seller in accordance with the provisions of Section 4.14 shall not exceed $25 million (the “Severance Cap”).  Buyer shall be solely liable for any additional severance amounts paid to the Transferred C Employees to the extent that Sellers' previous reimbursements of Buyer under Section 4.05(b) taken together with any Seller COBRA Costs incurred by Sellers and Buyer COBRA Costs reimbursed by Sellers pursuant to Section 4.14 equal $25 million, and, further, Buyer shall pay directly or reimburse Sellers for any Seller COBRA costs incurred under Section 4.14 to the extent that such costs would cause Sellers' aggregate cost under Sections 4.05 and 4.14 to exceed $25 million.  To the extent permissible by applicable Law, tax deductions associated with such terminations shall be recognized by the applicable Seller up to $25 million.  Transferred C Employees who are employed by the OIB Division on or after the Initial Closing Date shall not be eligible to participate in, or receive benefits under, any severance plans of Sellers.  

(iii)

Buyer shall provide monthly reports to the Sellers setting forth each employee termination occurring at the OIB Division during the twelve months following the Initial Closing Date (including the termination of Transferred C Employees and former employees of the OIB Division).  Such report shall include both voluntary and involuntary terminations and shall include the following information:  the name of the employee, the date of termination, the salary of such terminated employee, the reason for termination, and any severance payment made by the OIB Division.  Buyer shall also supply Seller with a copy of the fully executed release (in the form of the Release described in Section 4.05(b)(i)) to be obtained from each such employee in accordance with Section 4.05(b)(i).  Whether or not to terminate the employment of any Transferred C Employee shall be a decision in the sole discretion of the OIB Division.

(iv)

With respect to Transferred C Employees whose employment is terminated by the OIB Division more than twelve months after the Initial Closing Date, such Transferred C Employee shall be eligible to receive benefits under a severance plan, if any, to be maintained by the OIB Division for the benefit of similarly situated employees of the OIB Division.  

(v)

Any severance costs incurred by Buyer and reimbursed by Seller in connection with the termination of employment of any Asia Employee listed in "Asia Pacific Invest and Corp Banking" line of business on Schedule 4.01, and any UK Employee who is listed in "UK Invest and Corp Banking" line of business on Schedule 4.01, who is terminated by the Buyer within thirty (30) days following the applicable Subsequent Closing Date, shall not be subject to the Severance Cap nor shall it included in calculating the amounts paid toward the Severance Cap.

(vi)

In the case of any C Front Office Employee described in Section 4.01(f) to whom Buyer declines to make an offer, any severance payable by Seller under the CIBC Severance Plans to such individual and any Seller COBRA costs (as defined in Section 4.14) incurred with respect to such individual shall be paid by Seller, and shall be treated as paid by Seller pursuant to Sections 4.05 and 4.14, respectively, and thus shall be taken into account in applying the Severance Cap described in Section 4.05(b)(ii).  

(c)

Additional Employment-Related Liability Provisions Relating to UK Employees.  With respect to the UK Employees, the OIB Division shall also be liable for any Liabilities arising from (i) any act or omission of the Buyer or Affiliate of the Buyer before or after the applicable Subsequent Closing Date relating to the employment or termination of employment of any of the UK Employees after the applicable Subsequent Closing Date; provided however that any amounts paid by Buyer or Affiliates of Buyer in respect of the termination of any of the Asia Employees shall reimbursed by Seller in accordance with the provisions of Section 4.05(b), (ii) any substantial changes to the working conditions of any of the UK Employees to their material detriment which are made, proposed or anticipated to take effect after the applicable Subsequent Closing Date and any right of any UK Employee to terminate his contract of employment without notice in acceptance of a repudiatory breach of his contract by the Buyer or Affiliate of the Buyer, (iii) any breach by the Buyer or an Affiliate of the Buyer of Regulation 13(4) of TUPE, and (iv) any claim in respect of a failure by the Buyer or Affiliate of the Buyer to provide retirement or death-in-service benefits for or in respect of any UK Employee of the same or equivalent level as those persons would have been entitled to from the Sellers immediately before the applicable Subsequent Closing Date.  

(d)

Additional Employment-Related Liability Provisions Relating to Asia Employees.  With respect to the Asia Employees, the OIB Division shall be liable for any Liabilities arising from (i) any act or omission of the Buyer or Affiliate of the Buyer before or after the applicable Subsequent Closing Date relating to the employment or termination of employment of any of the Asia after the applicable Subsequent Closing Date; provided however that any amounts paid by Buyer or Affiliates of Buyer in respect of the termination of any of the Asia Employees shall reimbursed by Seller in accordance with the provisions of Section 4.05(b), (ii) any substantial changes to the working conditions of any of the Asia Employees to their material detriment which are made, proposed or anticipated to take effect after the applicable Subsequent Closing Date and the rig ht of any Asia Employee under applicable Law due to such changes, (iii) any failure of the Buyer or an Affiliate of the Buyer to comply with its obligations under applicable Law and (iv) any failure of Buyer or an Affiliate of the Buyer which cause Sellers or any Affiliate of Sellers to fail to comply with their obligations under applicable Law.  

(e)

Additional Provisions Relating to Inactive Employees.  Each Inactive Employee prior to the date such Inactive Employee is hired by Buyer or an Affiliate of Buyer shall be retained as employees of Seller, but only for such period as an individual on long-term, short-term or approved leave of absence, respectively, would normally remain an employee in the absence of this transaction, and Seller shall continue to provide such Inactive Employees for the period that they remain employees of the Seller with such benefits as Seller or an Affiliate of Seller was providing on the Initial Closing Date or Subsequent Closing Date, as applicable, to employees on long-term disability leave, short-term disability leave or approved leave of absence, respectively.  

Section 2.6

Transferred C Employees

. Effective as of the Initial Closing Date or the date on which a Transferred C Employee becomes employed by the OIB Division, whichever is later, except as otherwise expressly provided herein, the OIB Division shall cause each Transferred C Employee to be provided with a compensation and benefits structure that shall, in the aggregate, in the OIB Division's reasonable judgment, be substantially comparable to the compensation and benefits provided by the OIB Division to its similarly situated employees; provided, however, that for a period of one year following the Initial Closing Date, each Transferred C Employee shall be entitled to, at a minimum, the compensation, benefits and terms of employment under the Comparable Offer that Section 4.01(a) requires be offered to such Transferred C Employee, provided that such Transferred C Employee remains employed by the OIB Divisio n.  Nothing herein shall be construed as guaranteeing employment for any specific period of time or altering the at-will employment status of any employee.  

Section 2.7

Credit for Service

.  The OIB Division shall permit Transferred C Employees to participate in all the OIB Division plans in which participation is open to similarly situated employees of the OIB Division at comparable levels for such similarly situated employees, except where such participation in the OIB Division plans would result in a duplication of benefits for such Transferred C Employee, and the OIB Division shall cause the Transferred C Employees to be given full credit for all service with the applicable Seller or an Affiliate of the applicable Seller prior to the Initial Closing Date for purposes of eligibility, vesting and determination of the level of benefits under any employee benefit plans or arrangements of the OIB Division or an Affiliate of Buyer or any plans of Sellers that are assumed by or maintained by the OIB Division in which such Transferred C Employees participate, or are eligible to partic ipate, after the Initial Closing Date, to the same extent such service was recognized by the applicable Seller or an Affiliate of Seller immediately prior to the Initial Closing Date; provided, however, that such service need not be recognized for purposes of benefit accruals under any defined benefit plan maintained by the OIB Division, nor shall such service be recognized to the extent it would result in duplication of benefits.  The OIB Division shall (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to Transferred C Employees under any welfare plan in which such employees may be eligible to participate after the Initial Closing Date, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Initial Closing Date under the corresponding welfare plan of the applicable Seller or an Affiliate of such Sell er in which such Transferred C Employees participate, or are eligible to participate, immediately prior to the Initial Closing Date, and (ii) for the Plan year in which the Initial Closing Date occurs, provide each Transferred C Employee with credit for any co-payments and deductibles paid prior to the Initial Closing Date in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans in which such employees are eligible to participate after the Initial Closing Date, as if those deductibles or co payments had been paid under the welfare plans in which such employees are eligible to participate after the Initial Closing Date.

Section 2.8

401(k) Plan

.  Seller shall take such actions as may be necessary to ensure that all Transferred C Employees are, as of the Initial Closing Date, 100% vested in their account balances under the Seller 401(k) Savings Plan (the "Seller 401(k) Plan") and shall contribute to the Seller 401(k) Plan, within two weeks of the date on which each applicable Transferred C Employee becomes an employee of the OIB Division, such additional matching contributions, if any, required for such Transferred C Employee in accordance with the terms and conditions of the Seller 401(k) Plan for the portion of the Plan year during which such Transferred C Employee was employed by the Seller.  Commencing on the date on which each applicable Transferred C Employee becomes an employee of the OIB Division, such Transferred C Employees shall be eligible to participate in Buyer's 401(k) plan, Buyer shall make any prof it sharing contributions to such plan, on the same terms and conditions as for comparable employees of Buyer, recognizing the Transferred C Employees' prior service to Seller and compensation from Seller, as service and compensation with Buyer.  The Buyer shall use best efforts to permit each Transferred C Employee to roll over his account balances, including any notes representing any loans to such Transferred C Employee, under the Seller 401(k) Plans into Buyer's 401(k) Plan at or immediately following the Initial Closing Date or the date the employee transfers to employment with the OIB Division, whichever is later."

Section 2.9

Pre-Closing Commissions

.  Any commissions or similar amounts earned prior to the Initial Closing Date by employees of Sellers in respect of transactions consummated by the Transferred C Businesses shall be held by the applicable Seller for the benefit of such employees and paid to such employees in the ordinary course of business and in accordance with any applicable agreements entered into prior to the Initial Closing Date.

Section 2.10

Certain Plans

(a)

Seller RSA Plan Awards for Fiscal Years ending on or prior to October 31, 2006.  Seller, under its Restricted Share Award Plan (the "RSA Plan"), shall provide that Transferred C Employees may retain awards granted under the RSA Plan for fiscal years ending on or prior to October 31, 2006, and off-cycle awards granted under the RSA Plan during the fiscal-year ending October 31, 2007, and that such awards shall continue to vest on and after the Initial Closing Date in accordance with the terms of the RSA Plan based on treating employment with OIB Division as employment with Seller and its Affiliates.  The OIB Division shall reimburse the Company for the value of the shares (based on the “Average Cost” of each award as defined in the RSA Plan) comprising Transferred C Employees' RSA Plan awards described in this subsectio n (a) and outstanding as of the Initial Closing Date, to the extent such awards are not vested on the date immediately prior to the Initial Closing Date, with such reimbursement to be provided from time to time as such awards vest and are paid or delivered to the Transferred C Employees or their beneficiaries.  Notwithstanding the foregoing, in the event that a Transferred C Employee's employment with the OIB Division is terminated without cause by OIB during the first twelve (12) months following the Initial Closing Date, thereby causing an acceleration in the vesting of such Transferred C Employee's RSA Plan awards described in this subsection (a) (the shares comprising such awards so accelerated referred to as the "Accelerated Shares"), Buyer's obligation to reimburse Seller for the value of the Accelerated Shares shall be pro rated based upon the number of months that have elapsed since the Initial Closing Date until the effective date of  termination of such Transferred C Empl oyee's employment, as follows:  Buyer's reimbursement obligation in respect of each such Accelerated Share shall equal the value of such Accelerated Share, determined in accordance with the foregoing, multiplied by a fraction, the numerator of which is the number of months having elapsed since the Initial Closing Date until the effective date of termination of such Transferred C Employee's employment, and the denominator of which shall be the number of full months between the Closing Date to the date the Accelerated Share would have become vested under the terms of the RSA Plan in the absence of any acceleration of vesting.  Any forfeitures of RSA Plan awards shall revert to Seller in accordance with the RSA Plan.

(b)

Seller RSA Plan Awards for Fiscal year ending October  31, 2007 and periods thereafter.

(i)

Prior to the Closing Date, Seller shall for the fiscal year ending Ocotber 31, 2007, in accordance with the terms of the applicable bonus plan and Seller past practice and policies, determine the portion of each Transferred C Employee’s annual bonus payment to be paid in the form of RSA Plan awards under the RSA Plan (referred to herein as “Tranche 1 awards”) and shall grant such Tranche 1 awards to the Transferred C Employees prior to the Initial Closing Date.  

(ii)

In addition to the Tranche 1 awards, Seller shall set aside an amount not to exceed $20,000,000 to be used as retention bonuses (the "Retention Pool"), to be paid, in the form of RSA Awards (referred to as "Tranche 2 awards") and shall grant such Tranche 2 awards to the Transferred C Employees prior to the Initial Closing Date.

(iii)

 Tranche 1 awards shall vest as to one-third of the total award on each of the first three anniversaries of the date of grant, subject to and in accordance with the vesting provisions of the RSA Plan.  Seller shall provide that Transferred C Employees may retain the Tranche 1 awards granted under the RSA Plan following the Initial Closing Date and that Tranche 1 awards shall continue to vest in accordance with the terms of the RSA Plan based on treating employment with OIB Division as employment with Seller and its Affiliates.  

(iv)

Seller Parent shall provide that Tranche 2 awards shall become 100% vested on the third anniversary of the grant date, provided that the individual remains employed by OIB Division or an Affiliate from the Closing Date to such third anniversary, but shall otherwise be subject to the vesting provisions of the RSA Plan (treating employment with OIB Division as employment with Seller and its Affiliates).  

(v)

The OIB Division shall reimburse the Company for the value of the shares (based on the “Average Cost” of each award as defined in the RSA Plan) comprising Transferred C Employees' awards under the RSA Plan described in this subsection (b) and outstanding as of the Initial Closing Date, to the extent such awards are not vested as of the Initial Closing Date, with such reimbursement to be provided from time to time as such awards vest and are paid or delivered to the Transferred C Employees or their beneficiaries.  Notwithstanding the foregoing, in the event that a Transferred C Employee's employment with the OIB Division is terminated without cause by OIB during the first twelve (12) months following the Initial Closing, thereby causing, an acceleration in the vesting of such Transferred C Employee's RSA awards described in this subsection (b) (the shares comprising suc h awards so accelerated referred to as the "Accelerated Shares"), Buyer's obligation to reimburse Seller for value of the such Accelerated Shares shall be pro rated based upon the number of months that have elapsed since the Initial Closing Date until the effective date of  termination of such Transferred  C Employee's employment, as follows:  Buyer's reimbursement obligation in respect of such Accelerated Shares shall equal the value of such Accelerated Shares, determined in accordance with the foregoing, multiplied by a fraction, the numerator of which is the number of months having elapsed since the Initial Closing Date until the effective date of termination of such Transferred C Employee's employment and the denominator of which shall be twelve (12) for Tranche 1 awards scheduled to vest in 2008, eighteen (18) for Tranche 1 awards scheduled to vest in 2009, and thirty-six (36) for Tranche 1 awards scheduled to vest in 2010 and for Tranche 2 awards.  Any forfeitures o f RSA Plan awards shall revert to Seller in accordance with the RSA Plan.

(vi)

Subsequent to Closing, Buyer may, subject to the conditions described herein, implement a program (the "Program") pursuant to which Transferred C Employees may elect to participate in the OIB Incentive Plan (subject to the limits set forth in Section 4.10(c)) or the Wealth Accumulation Plan (each as defined below) in lieu of retaining some or all of their Tranche 2 awards.  To the extent a Transferred C Employee elects to invest some or all of the value of his Tranche 2 award (value determined based on the “Average Cost” of each award as defined in the RSA Plan) in the OIB Incentive Plan or the Wealth Accumulation Plan, (1) the Transferred Employee's Tranche 2 award under the RSA Plan shall be correspondingly forfeited, and (2) the Seller shall pay to Buyer, within ten (10) days following the deadline for making such election or notice fr om Buyer, whichever is later, an amount equal to that which the Transferred C Employees elect to invest in the OIB Incentive Plan or the Wealth Accumulation Plan (referred to as the "OIB Deferral"); provided, however, (1) to the extent the Transferred Employee becomes vested in all or a portion of such OIB Deferral, Buyer shall reimburse Seller for the value of such vested amount (based on the Average Cost of the RSA award to which the OIB Deferral is attributable), within thirty (30) days of the date of such vesting; and (2) to the extent that the Transferred Employee subsequently forfeits all or a portion of such OIB Deferral, the Buyer shall reimburse the Seller for the forfeited amount (based on the Average Cost of the RSA award to which the OIB Deferral is attributable)within thirty (30) days following such forfeiture.  

(vii)

In order to implement such Program, Buyer must deliver to the Seller in advance of implementation, all relevant plan documents and election and employee communication materials embodying the Program, and thereafter all completed employee elections relating to the Program.  Prior to implementing the Program, the Buyer and Seller shall use reasonable best efforts to ensure that the Program does not have an adverse tax effect on any Transferred C Employee who elects to participate in the Program.

(viii)

Transferred C Employees shall not be eligible for new awards under the RSA Plan after the Initial Closing Date, and the Company shall not make any such awards.

(c)

Incentive Shares.  Pursuant to its implementation of the Program, on or prior to the Initial Closing, Buyer shall adopt an equity incentive plan (including forms of award agreements) for the benefit of Transferred C Employees (the "OIB Incentive Plan").  Certain Transferred C Employees, identified in the sole discretion of the Buyer, shall receive notification that they are eligible to receive a grant on the Initial Closing Date (or at such time as they become employees of OIB Division or its applicable Affiliates, whichever is later) of restricted Buyer Shares with a specified value (the "Incentive Shares") in exchange for forfeiting Tranche 2 awards with an equivalent value.  The available pool of Buyer Shares available for issuance as Incentive Shares pursuant to the Program to Transferred C Employees an d Buyer employees transferred to the OIB Division shall have an aggregate value not to exceed $15 million, determined on the basis of the average trading price of the Buyer Parent stock over the fifteen trading days ending five business days ending five business days prior to the announcement of the transactions contemplated by this Agreement (the "Pre-Announcement Price").  The recipients of Incentive Shares and respective amounts of Incentive Shares shall be determined by Buyer, in consultation with the Company.  The Incentive Shares shall be subject to the following terms and conditions: (i) all Incentive Shares shall vest 25% on the third anniversary of the Initial Closing Date; 25% on the fourth anniversary of the Initial Closing Date, and 50% on the fifth anniversary of the Initial Closing Date; and (ii) Incentive Shares shall be forfeited in the event of an employee's termination of employment with the OIB Division.  Any dollar amount of forfeitures on Incentive Shares shall be credited back to the OIB Division, provided however that to the extent that any Incentive Shares are attributable to RSA awards that an employee elected, in accordance with Section 4.10(b)(vi), not to receive, the Buyer will reimburse Seller for any Incentive Shares forfeited, or in which the Transferred Employee becomes vested, in accordance with the last sentence of Section 4.10(b)(vi).

(d)

Wealth Accumulation Plan.  Amounts allocated to the "Wealth Accumulation Plan" (a deferred compensation plan for benefit of certain of its employees) shall vest on the fifth anniversary of the date that such amounts are allocated to the plan.  To the extent that any amounts under the Wealth Accumulation Plan are attributable to RSA awards that an employee elected, in accordance with Section 4.10(b)(vi), not to receive, the Buyer will reimburse Seller for any Wealth Accumulation Plan amount forfeited, or in which the Transferred Employee becomes vested, in accordance with the last sentence of Section 4.10(b)(vi).

(e)

Non-Cancellation of RSA Awards.  Notwithstanding anything to the contrary set forth in Sections 4.10(a) or 4.10(b), upon voluntary termination of employment, a Transferred C Employee may at any time petition the Seller in accordance with the terms of the RSA Plan for accelerated vesting and non-cancellation of outstanding and unvested RSA Awards.  Seller shall have the sole discretion in determining whether to grant such employee's request and the cost of any shares that accelerate as a result of granting such request shall be the sole liability of Seller and shall not be reimbursed by Buyer, the OIB Division, or any of its Affiliates.

Section 2.11

[Intentionally Omitted]

Section 2.12

WARN Act.

(a)

To the extent that any obligations might arise under the WARN Act or under any similar provision of any Law (hereinafter referred to collectively as "WARN Obligations") as a consequence of the transactions contemplated by this Agreement, Sellers shall be responsible for any WARN Obligations arising as a result of any employment losses with respect to Transferred C Employees occurring on or prior to the Initial Closing Date except to the extent such losses are attributable to the OIB Division's failure to perform any of the covenants described herein, and the OIB Division shall be responsible for any WARN Obligations arising as a result of any employment losses with respect to Transferred C Employees and occurring after the Initial Closing Date.

(b)

On or before the Closing Date, the Sellers shall provide a list of the name and site of employment of any and all Transferred C Employees who have experienced, or will experience, an employment loss or layoff – as defined by the WARN Obligations – within ninety (90) days prior to the Closing Date.  Sellers shall update this list up to and including the Closing Date.

Section 2.13

C Bonuses

.

(a)

2007 Bonus.  Subject to the Buyer's obligation as set forth in Section 4.10 to reimburse the Seller in respect of Tranche 1 awards, the applicable Sellers shall remain liable and responsible for payments to Transferred C Employees of any annual incentive compensation bonuses for the Company's year ended October 31, 2007 as determined in accordance with the applicable bonus plans maintained by Sellers in which the Transferred C Employees participate as of the Initial Closing Date, provided, however, that the failure of any Transferred C Employee (who is employed by the OIB Division on the Initial Closing Date) to be employed by the applicable Seller on the bonus payment date shall not disqualify such employee from receiving a bonus.

(b)

2008 Bonus.  Transferred C Employees who become employed by the OIB Division shall be eligible for a bonus from the OIB Division for the OIB Division's year ended December 31, 2008 (referred to as the "2008 Bonus").  The amount of each such 2008 Bonus shall be determined by the OIB Division in a manner consistent with its past practices but taking into account the fact that the 2008 Bonus Period is longer than a 12 month period.  Each such 2008 Bonus paid to a Transferred C Employee remaining employed by the OIB Division shall be paid at such time following the OIB Division's fiscal year, and upon such other terms and conditions, as Buyer shall determine, taking into account the financial results of the OIB Division in good business practices and with regard individual contribution, seniority and similar factors.  Sell ers shall have no liability, whatsoever, to any party with respect to any 2008 Bonus.  

Section 2.14

COBRA

.  To the extent that a C Front Office Employee or C Infrastructure Employee participates prior to the Closing Date in a "group health plan" (within the meaning of Section 5000(b)(1) of the Code) maintained by Seller and such employee incurs a qualifying event under Section 4980B of the Code on the Closing Date on account of his or her termination of employment with Seller, as determined in accordance with applicable Treasury Regulations, Seller shall comply with all notice and continuation coverage requirements applicable to the Group Health Plans under Section 4980B of the Code known as COBRA ("COBRA Requirements") with respect to such Transferred C Employees and any "qualified beneficiaries" (as defined in Section 4980B of the Code)) under the group health plan in accordance with Section 4980B of the Code and the regulations thereunder.  For purposes o f calculating amounts applying to the Severance Cap, any administrative costs incurred by Seller in respect of the provision of COBRA benefits to any C Front Office Employee or C Infrastructure Employee in excess of the premiums paid by such employee shall constitute the "Seller COBRA Costs."  For a transition period of sixty (60) days (subject to possible extension (or earlier termination) in accordance with the provisions of the Transition Services Agreement) commencing on the Closing Date (the "Transition Period") subject to limitations in and requirements of Applicable Laws and applicable plans and contracts, Seller or an Affiliate of Seller shall use its reasonable best efforts to cause C Transferred Employees to continue to be provided with the health and welfare benefits specified in the Transition Services Agreement in accordance with the terms thereof, and Buyer shall pay Seller or an Affiliate of Seller in respect thereof as detailed in the Transition Services Agreement.  Subject to the limitations of Section 4.05, Seller shall be solely responsible for the provision of COBRA benefits to any Transferred C Employee who is terminated by OIB Division during the Transition Period.  OIB Division shall be solely responsible for the provision of COBRA benefits to any Transferred C Employee who is terminated by OIB Division after the Transition Period.  Subject to the limitations of Section 4.05, Seller shall reimburse OIB Division for any administrative costs incurred by OIB Division in respect of the provision of COBRA benefits to any Transferred C Employee in excess of the premiums paid by such Transferred C Employee ("Buyer COBRA Costs") terminated after the Transition Period and during the 12 months following the Initial Closing Date.  Notwithstanding anything herein to the contrary, provided that if for any reason Buyer has not established a health plan that covers the Transferred C Employees prior to the expiration of the Transition Period, and any such Transferred C Employee elects COBRA coverage under Seller's health plans, Buyer shall pay the full COBRA premium on behalf of such Transferred C Employee (except for the amount such Transferred C Employee would have been required to pay as an active employee of Seller).

Section 2.15

No Third-Party Beneficiaries

.  This Agreement is not intended and shall not be deemed to confer upon or give any Person except the parties hereto and their respective successors and permitted assigns any remedy, claim, Liability, reimbursement, cause of action or other right under or by reason of this Agreement.  No employee or beneficiary, heir, successor, delegate or representative of an employee of any Seller shall have any rights under this Agreement, whether as a third-party beneficiary or otherwise.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS

Seller Parent and the Company represent and warrant to Buyer as of the date hereof and as of the Initial Closing Date as follows:

Section 3.1

Organization; Authority

.  

(a)

Seller Parent is a bank duly organized, validly existing and in good standing under the Bank Act of Canada.  The Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware.  Each other Seller and C Israel is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization.  Each Seller and C Israel has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  Each Seller and C Israel is qualified or licensed to do business as a foreign corporation and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, excep t where the failure to be so qualified or licensed or in good standing would not have a Material Adverse Effect.

(b)

Each Seller has all requisite corporate power and authority to enter into this Agreement, the Ancillary Agreements and any instruments and agreements contemplated herein required to be executed and delivered by it pursuant to this Agreement (including the Ancillary Agreements, collectively referred to herein as the "Seller Related Instruments") and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and the Seller Related Instruments to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of Seller and no other corporate proceedings on its part are necessary to authorize such execution, delivery and performance.  This Agreement has been, and each of the Seller Relat ed Instruments to which it is a party shall be, duly executed and delivered by the applicable Seller and constitutes a valid and binding obligation of the applicable Seller, enforceable against such party in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditors' rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

Section 3.2

No Violation; Consents and Approvals

.

(a)

The execution and delivery of this Agreement and the Seller Related Instruments does not, and the consummation of the transactions contemplated hereby or thereby and compliance with the terms hereof or thereof will not (i) violate or be in conflict with (A) any provision of the certificate of incorporation of any Seller or C Israel (or equivalent documents) or by-laws of any Seller or C Israel (or equivalent documents) or (B) any Law applicable to Sellers, C Israel, the Transferred C Businesses or the Purchased C Assets or (ii) conflict in any material respect with, or result in any material violation of or constitute a material default (or an event or condition which, with notice or lapse of time or both, would constitute a material default) under, or result in the termination of, or accelerate the performance required by, or cause the acceleration of the matur ity of any Liability pursuant to, or result in the creation or imposition of any Lien under, any Contract or other instrument or obligation, commitment, undertaking, arrangement or restriction of any kind or character to which any Seller or C Israel is a party or by which any Seller or C Israel may be bound or affected or to which any of the Purchased C Assets or the Transferred C Businesses may be subject.

(b)

Except (i) for the Required Approvals, (ii) as set forth in Section 5.02(b) of the Seller Disclosure Schedule and (iii) the requirements of the Merger Control Laws, and (iv) except for consents, approvals, orders or authorizations of, or notices to third parties which, if not obtained or made, would be material and adverse to the Transferred C Businesses taken as a whole, no material consent, approval, order or authorization of, or notice to, or registration, declaration or filing with, any Governmental Entity or any third party is required to be obtained or made by or with respect to Seller in connection with the execution and delivery of this Agreement or the Seller Related Instruments or the consummation by any Seller of the transactions contemplated hereby or thereby or to enable Buyer after the Initial Closing to conduct the Transferred C Businesses in substantially the same manner in which it currently is operated by the Company, the absence of which, notwithstanding the services provided by Sellers and their Affiliates pursuant to the Ancillary Agreements and notwithstanding Section 2.07, would in any material respect, impede, restrict or prevent Buyer from obtaining the benefits of the Transferred C Businesses after the Initial Closing.

Section 3.3

Absence of Undisclosed Liabilities; Financial Information

.  

(a)

Except for the Excluded C Liabilities and Liabilities (i) set forth in Section 5.03 of the Seller Disclosure Schedule, or (ii) incurred in the ordinary course of business consistent with past practice, since October 31, 2006, the Transferred C Businesses have not incurred any Liabilities of whatsoever nature, direct or indirect, whether accrued, fixed, contingent or otherwise which could reasonably be expected to be material to the Transferred C Businesses.

(b)

Financial information provided by the Company and its representatives to Buyer and its representatives in connection with Buyer's evaluation of the Transferred C Businesses was taken or prepared, as applicable, from, and are in accordance with, the management accounting records of the Company and its Affiliates with respect thereto, which books and records have been regularly kept and maintained in accordance with the Company's normal management reporting policies and procedures; provided, however, that such results may not reflect the results of the Transferred C Businesses when considered on a stand-alone basis separate from Sellers, and may not be in accordance with GAAP, except in specific instances where extracts have been provided from FOCUS reports which are prepared in accordance with GAAP.

Section 3.4

Absence of Certain Changes or Events

.  Since August 31, 2007, (i) the Transferred C Businesses have been operated only in the ordinary course consistent with past practice, (ii) through the date of this Agreement, there has been no event, change or development which, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect, and (iii) Seller has not taken any action which, if taken without the consent of Buyer after the execution and delivery of this Agreement, would constitute a breach or violation of Section 7.01.

Section 3.5

Title to Assets; Sufficiency

.

(a)

Each Seller has good and valid title to all of the Purchased C Assets owned by it and valid leasehold interests in, or other rights to use, all of the Purchased C Assets of such Seller subject to the Personal Property Leases.  Except as set forth on Section 5.05(a) of the Seller Disclosure Schedule, the tangible Purchased C Assets are owned by Sellers free and clear of all Liens, other than (i) Liens for Taxes which are not due and payable at the time of the Initial Closing or which are being contested in good faith by appropriate proceedings, and, in each case, for which the Company maintained adequate reserves in accordance with GAAP, (ii) workmen's or mechanic's Liens and other similar Liens and securing sums which are not past due, or deposits or pledges to obtain the release of any such Lien, (iii) statutory landlords' Liens under the Assumed Le ases, (iv) other Liens or imperfections of title arising in the ordinary course of business, if any, which do not materially impair the use of the Purchased C Assets or the operation of the Transferred C Businesses as currently conducted, and (v) any Lien constituting a renewal, extension or replacement of a Lien described in the foregoing subclauses (the mortgages, liens, security interests and encumbrances described in clauses (i) through (v) above are collectively referred to herein as "Permitted Liens").

(b)

The Purchased C Assets (assuming for the purposes of this Section 5.05(b), that all Purchased C Assets subject to a Subsequent Closing are conveyed as of the Initial Closing), together with Buyer's rights under the Software License and IT Services Agreement and the Transition Services Agreement, constitute all of the assets, properties, licenses and agreements used by Sellers to operate the Transferred C Businesses as of the Initial Closing, other than the Excluded Permits.

Section 3.6

Intellectual Property

.

(a)

Section 5.06(a) of the Seller Disclosure Schedule sets forth a listing of the Transferred C Business Applications and a complete and accurate list of all U.S. and foreign Intellectual Property Rights that are owned by Seller or any of Seller's Subsidiaries and that claim or pertain to the Transferred C Business Applications.

(b)

Section 5.06(b) of the Seller Disclosure Schedule sets forth with respect to the Transferred C Business Applications a complete and accurate list of all agreements (whether oral or written, and whether between Seller, Seller's Subsidiaries and third parties or inter-corporate) to which Seller or one of its Subsidiaries is a party or otherwise bound, (i) granting or obtaining any right to use the Transferred C Business Applications or practice any Intellectual Property Rights that claim or otherwise pertain to the Transferred C Business Applications (other than licenses for readily available software programs having an acquisition price of less than $5,000), or (ii) to the knowledge of Seller, restricting Seller's or any of its Subsidiaries' rights to use any Intellectual Property Rights that claim or otherwise pertain to the Transferred C Business Applica tions, including license agreements, development agreements, distribution agreements, settlement agreements, consent to use agreements, and covenants not to sue (collectively, the "Business License Agreements").  The Business License Agreements are valid and binding obligations of all parties thereto, enforceable in accordance with their terms, and there exists no event or condition which will result in a violation or breach of, or constitute (with or without due notice of lapse of time or both) a default by any party under any such Business License Agreement.  As of the Initial Closing Date, neither Seller nor any of its Subsidiaries have licensed or sublicensed its rights in the Transferred C Business Applications to any third party other than pursuant to the Business License Agreements.  No royalties, honoraria or other fees are payable by Seller or any of its Subsidiaries to any third parties for the use of or right to use the Transferred C Business Applications except pur suant to the Business License Agreements.

(c)

Except as set forth on Section 5.06(c) of the Seller Disclosure Schedule:

(i)

Seller or one of its Subsidiaries owns, or has a valid right to use, free and clear of all Liens, all of the Business Applications.

(ii)

There is no pending or, to the best of Seller's knowledge, threatened claim, suit, arbitration or other adversarial proceeding before any court, agency, arbitral tribunal, or registration authority in any jurisdiction involving the Business Applications owned by Seller or any of its Subsidiaries, or, to the best of Seller's knowledge, the Business Applications licensed to Seller or any of its Subsidiaries, alleging that the activities or the conduct of the Transferred C Businesses prior to the Initial Closing Date infringe upon, violate or constitute the unauthorized use of the Intellectual Property Rights of any third party or challenging Seller's or any of its Subsidiaries' ownership or use of the Business Applications.  There are no settlements, forbearances to sue, consents, judgments, or orders or similar obligations other than the Business License Agreements which (1) rest rict Seller's or any of its Subsidiaries' right to use any Transferred C Business Applications, or (2) restrict the Transferred C Businesses in order to accommodate a third party's Intellectual Property Rights.

(iii)

To the best of Seller's knowledge, the conduct of the Transferred C Businesses prior to the Initial Closing Date has not infringed upon (either directly or indirectly such as through contributory infringement or inducement to infringe) any Intellectual Property Rights owned or controlled by any third party.  To the best of Seller's knowledge, no third party is misappropriating, infringing, diluting or violating any Intellectual Property Rights that are owned by Seller or any of its Subsidiaries and used in the Transferred C Businesses and no such claims, suits, arbitrations or other adversarial proceedings have been brought or threatened against any third party by Seller or any of its Subsidiaries.

(iv)

Seller has taken reasonable measures to protect the confidentiality of the Transferred C Business Applications.  To the best of Seller's knowledge, no Trade Secrets embodied in the Transferred C Business Applications have been disclosed or authorized to be disclosed to any third party other than pursuant to a written non-disclosure agreement.  To the best of Seller's knowledge, no party to any such non-disclosure agreement relating to Trade Secrets embodied in the Transferred C Business Applications is in breach or default thereof.

(d)

Except as set forth in Section 5.06(d) of the Seller Disclosure Schedule, the consummation of the transaction contemplated hereby shall not result in the loss or impairment of Seller's or any of its Subsidiaries' ownership or right to license or use any of the Transferred C Business Applications or Shared Applications, nor shall it require the consent of any governmental authority or third party in respect of any such Transferred C Business Applications or Shared Applications.

Section 3.7

Legal Proceedings

.  There are no Legal Proceedings relating to the Transferred C Businesses pending or, to Sellers' knowledge, threatened, that are reasonably likely to (i) result in material Liability to Seller, materially interfere with or inhibit the operation of the Transferred C Businesses or materially impair the value of the Purchased C Assets, (ii) have the effect of delaying, preventing, or making illegal the consummation of the transactions contemplated hereby or (iii) materially interfering with the ability of Buyer to operate the Transferred C Businesses after the Initial Closing as it is currently operated by the Company.  Section 5.07 of the Seller Disclosure Schedule sets forth a complete and correct list of all material Legal Proceedings with respect to the Transferred C Business since January 1, 2006 to the date hereof, together with an accurate summary of the claims underlying such L egal Proceeding and the status thereof.  

Section 3.8

ERISA

.

(a)

Schedule 5.08(a) of the Seller Disclosure Schedule contains a true and complete list of each material deferred compensation, incentive compensation, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement; each severance or termination pay, medical, surgical, hospitalization, life insurance and other "welfare" plan, fund or program (within the meaning of section 3(1) of ERISA); each profit-sharing, stock bonus or other "pension" plan, fund or program (within the meaning of section 3(2) of ERISA); each employment, termination or severance agreement; and each other material employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by Sellers for the benefit of any Transferred C Front Office Emplo yee or Transferred C Infrastructure Employee (the "Plans").  Each of the Plans that is subject to section 302 or Title IV of ERISA or section 412 of the Code is hereinafter referred to in this Section 5 as a "Title IV Plan."

(b)

To Sellers' knowledge, there are no material pending claims by or on behalf of any Plan, by any employee or beneficiary covered under any such Plan, or otherwise involving any such Plan (other than routine claims for benefits).

(c)

Except as set forth on Section 5.08(c) of the Seller Disclosure Schedule, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any Transferred C Front Office Employee or Transferred C Infrastructure Employee to severance pay, unemployment compensation or any other similar payment, or (ii) accelerate the time of payment or vesting, or increase the amount of or otherwise enhance any benefit due any Transferred C Front Office Employee or Transferred C Infrastructure Employee.

(d)

Except as set forth in Section 5.08(d) of the Seller Disclosure Schedule, as of the date hereof, Seller has received no notice or indication from, and has no reason to believe that, any of the Transferred C Front Office Employees or Transferred C Infrastructure Employees set forth on Schedules 4.01 and 4.02 shall (i) cease to be employees of the applicable Seller at any point prior to the Initial Closing Date; or (ii) be unwilling or unable to become or otherwise restricted or prohibited from becoming a Transferred C Employee as of the Initial Closing Date.

Section 3.9

Labor Matters

.

(a)

(i) Except as set forth in Section 5.09(a) of the Seller Disclosure Schedule, no labor strike, dispute, slowdown, stoppage, material grievance, material arbitration or lockout is pending with respect to the Transferred C Businesses or involving any Transferred C Employees, or to the knowledge of Seller, threatened against or affecting Seller with respect to the Transferred C Businesses and during the past five (5) years there has not been any such action with respect to the Transferred C Businesses or involving any Transferred C Employees, (ii) Seller is not party to or bound by any collective bargaining or similar agreement with any labor organization or works council, or work rules or practices agreed to with any labor organization, works council or employee association applicable to the Transferred C Employees, (iii) no Transferred C Employees are repr esented by any labor organization or works council and Seller has no knowledge of any union organizing activities among the Transferred C Employees within the past five (5) years, (iv) Seller is in compliance, in all material respects, with all requirements of the Labor Laws with respect to the Transferred C Employees, and, to the knowledge of Seller, Seller is not engaged in any unfair labor practices as defined in the National Labor Relations Act or other Labor Laws with respect to the Transferred C Employees, (vi) no unfair labor practice charge or complaint is pending against Seller with respect to the Transferred C Employees, nor, to the knowledge of Seller, is any such charge or complaint threatened before the National Labor Relations Board or any similar agency, (vii) no charge or complaint with respect to or relating to the Transferred C Employees is pending before, and Seller has not received any notice of intent to conduct an investigation from, the Equal Employment Opportunity Commission or any ot her agency responsible for the prevention of unlawful employment practices with respect to the Transferred C Employees, (viii) Seller has not received notice of the intent of any federal, state, local or foreign agency responsible for the enforcement of labor or employment Laws to conduct an investigation with respect to or relating to the Transferred C Employees and no such investigation is in progress and Seller has no knowledge of any other Person investigating any such allegation that could reasonably be anticipated to result in significant Liability, and (ix) no complaints, lawsuits or other proceedings are pending or, to the knowledge of Seller, threatened in any forum by or on behalf of any Transferred C Employee or any applicant for employment with respect to the Transferred C Businesses alleging breach of any express or implied Contract or employment, any Laws governing employment or the termination thereof or other discriminatory, wrongful or tortuous conduct in connection with the employment relat ionship.  To the knowledge of the applicable Seller, no Transferred C Employee is in material violation of any term of any employment agreement, nondisclosure agreement, common law nondisclosure obligation, noncompetition agreement, restrictive covenant or other obligation to a former employer of any such employee relating (i) to the right of any such employee to be employed in the Transferred C Businesses or (ii) to the knowledge or use of trade secrets or proprietary information.

(b)

Except as set forth in Section 5.09(b) of the Seller Disclosure Schedule, which shall be provided to the OIB Division on the Initial Closing Date, none of the Transferred C Employees suffered an employment loss or layoff under the WARN Obligations during the six (6)-month period preceding the Initial Closing Date.

Section 3.10

Certain Contracts and Arrangements

.

(a)

Section 5.10(a) of the Seller Disclosure Schedule sets forth a complete and accurate list of all material Contracts to which Sellers or any Affiliate of Sellers is a party as of the date hereof relating primarily to, or necessary for the conduct of, the Transferred C Businesses or the Purchased C Assets or by which the Transferred C Businesses or the Purchased C Assets are bound or materially affected, including all of the following to the extent material to the Transferred C Businesses, the Purchased C Assets or the Assumed C Liabilities:

(i)

employment agreements or severance agreements;

(ii)

agreements with Transferred C Employees and the transactions contemplated herein;

(iii)

real estate leases and related sub-leases and service agreements including the Assumed Leases and the 300 Madison Lease;

(iv)

each Assigned C Contract;

(v)

any Contract prohibiting, limiting or restricting (A) the conduct of any portion of the Transferred C Businesses anywhere in the world or the provision of any products or services of the Transferred C Businesses to any Person anywhere in the world, (B) the competition by the Transferred C Businesses with any Person or (C) the soliciting or hiring of employees or consultants or the entry into a business relationship with any prospective client, customer or other Person anywhere in the world;

(vi)

any Contract requiring (A) Seller or C Israel to deal exclusively with any Person or (B) any Person to deal exclusively with Seller or C Israel;

(vii)

any material finders or referral Contract;

(viii)

any material securities lending or repurchase agreement or master agreement;

(ix)

any Contract providing for future payments or the acceleration or vesting of payments in excess of $1 million that are conditioned in whole or in part, on a change in control of the Transferred C Businesses;

(x)

any Contract, other than Contracts (A) entered into in the ordinary course of business consistent in nature and amount with past practice and (B) not terminable on notice of ninety (90) days or less without the payment of any material premium, penalty or fee, pursuant to which the Company or C Israel will receive, or is reasonably expected to receive, payments, or will make, or is reasonably expected to make, payments of more than $250,000 in the aggregate per annum or $1,000,000 over the life of such Contract;

(xi)

any distribution, selling, selected dealer or shareholder servicing Contract relating to the distribution of shares of any registered investment company sponsored by Seller or C Israel;

(xii)

any Contract with any securities exchanges, commodities exchanges, boards of trade, clearing corporations and similar organizations in which Seller or C Israel holds memberships or has been granted trading privileges;

(xiii)

any material introducing broker, marketing or similar Contract for the servicing of accounts utilized in the Transferred C Businesses;

(xiv)

any material Contract related to the rendering of securities execution, prime broker, clearance, settlement, safekeeping, record keeping or related services to any customer of the Transferred C Businesses;

(xv)

any Contract between Seller or C Israel, on the one hand, and any officer, director or employee of Seller or C Israel (other than compensation or benefit agreements or arrangements), on the other hand; and

(xvi)

other material Contracts to which Seller or any of its Affiliates is a party, relating primarily to, or necessary for the conduct of the Transferred C Businesses including to the Assumed Facilities Contracts.

(b)

Each Assigned Contract is a legal, valid and binding obligation of the applicable Seller and, to the knowledge of the Company, the other parties thereto, in full force and effect, enforceable against Seller and, to the knowledge of the Company, such other parties, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditors' rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and are validly assignable to Buyer without the consent of any other party, except as stated in Section 5.10(b) of the Seller Disclosure Schedule.  None of Sellers nor any of their Affiliates is, and to the Company's knowledge, no other party thereto is, in breach of or default under any Assigned Contract, nor does there exist, to the Company's knowledge, any basis for the assertion of any such breach or default by or against the Company or any of its Affiliates.  As of the date of this Agreement, there have been no written threatened cancellations of, and there is no material pending dispute under, any Assigned Contract.  Subject to Section 2.07, the terms and enforceability of the Assigned Contracts shall not be affected in any manner by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

(c)

Except for the Required Approvals and as set forth on Section 5.10(c) of the Seller Disclosure Schedule, none of Sellers is subject to any obligations, agreements, Contracts, arrangements or covenants that would, or required to obtain any consent, authorization, permit or waiver from any Governmental Entity or third party, the absence of which, notwithstanding the services to be provided by sellers and their Affiliates pursuant to the Ancillary Agreements and notwithstanding Section 2.07 would, in any material respect, impede, restrict or prevent Buyer from operating the Transferred C Businesses after the Initial Closing as they are currently operated by Sellers.

(d)

A true and complete copy of the 300 Madison Lease and each Assumed Lease has heretofore been delivered to Buyer.  The 300 Madison Lease and each Assumed Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect.  The leasehold estate created by the 300 Madison Lease and each Assumed Lease is free and clear of all Liens other than Permitted Liens.  There are no existing defaults by any Seller or any other party under the 300 Madison Lease or any Assumed Lease.  No event has occurred that (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a default under any 300 Madison Lease or any Assumed Lease.  The properties subject to the Service Agreement and the Assumed Leases constitute all of the real property material to the Transferred C B usinesses.

(e)

Except as set forth in Section 5.10(e) of the Seller Disclosure Schedule, none of the Engagement Contracts provides for the payment of all Assigned Engagement Receivables in any form other than cash.

Section 3.11

Compliance with Laws; Licenses

.

(a)

Except for Sections 5.11(b)-(c) of the Seller Disclosure Schedule, the Transferred C Businesses have been at all times, and is being, operated by Sellers in compliance in all respects with all applicable Laws, including Environmental Laws and Labor Laws.  Section 5.11(a) of the Seller Disclosure Schedule sets forth a list of all material Permits required in connection with the operation of the Transferred C Businesses and ownership of the Purchased C Assets under such applicable Laws.  Sellers possess all such Permits required for the conduct of the Transferred C Businesses and have at all times been in compliance in all material respects with, all such Permits.

(b)

All of the Transferred C Employees who are required to be licensed or registered for the activities conducted by them are and at all times have been duly licensed or registered in each state or jurisdiction in which and with each Governmental Entity with whom such licensing or regulation is so required (such officers and employees are collectively, the "Seller Registered Representatives").  Except as set forth in Section 5.11(b) of the Seller Disclosure Schedule, to the knowledge of the Company, none of the Seller Registered Representatives is or has been subject to any Legal Proceeding or complaint by a regulator or customer or by the Company or any of its Affiliates.

(c)

Except as set forth in Section 5.11(c) of the Seller Disclosure Schedule, the Company and none of its Affiliates or their respective officers and employees has received any notification or communication from any Governmental Entity relating to, involving or applying to the Transferred C Businesses or the Purchased C Assets (i) asserting that any of them is not in compliance with any of the statutes, rules, regulations, or ordinances which such Governmental Entity enforces, or has otherwise engaged in any unlawful business practice, (ii) threatening to revoke any license, franchise, permit, seat on any stock or commodities exchange or Permit, (iii) requiring any of them (including any of the Company's directors or controlling Persons) to enter into a cease and desist order, agreement, or memorandum of understanding (or requiring the board of directors of t he Company to adopt any resolution or policy), or (iv) restricting or disqualifying the activities of the Company (except for restrictions generally imposed by rule, regulation or administrative policy on brokers or dealers generally), and to the knowledge of the Company, no such actions have been threatened.

Section 3.12

Brokers

.  No broker, finder or financial advisor or other Person is entitled to any brokerage fees, commissions, finders' fees or financial advisory fees in connection with the transactions contemplated hereby by reason of any action taken by Seller or any of its respective directors, officers, employees, representatives or agents.

Section 3.13

Taxes

.  Except as set forth in Section 5.13 of the Seller Disclosure Schedule:

(a)

All Tax Returns with respect to the Transferred C Businesses or the Purchased C Assets or income attributable therefrom that are required to be filed by Sellers on or before the Initial Closing Date have been or will be timely filed, and, to the extent such Tax Returns reflect the Transferred C Businesses or the Purchased C Assets, all such Tax Returns are, or in the case of such Tax Returns not yet filed will be true, complete and correct in all material respects, and all Taxes shown to be due on such Tax Returns with respect to the Transferred C Businesses or Purchased C Assets have been or will be timely paid in full.

(b)

All Taxes payable by Sellers have been paid, the non-payment of which would result in a Lien on the Purchased C Assets or the Transferred C Businesses global or would result in Buyer becoming liable or responsible therefor.

(c)

With respect to Tax Returns for non-income Taxes, (i) no such Tax Return of the Company, UK Seller and Asia Seller or any of their Affiliates is currently under audit or examination by any taxing authority and (ii) no notice of such an audit or examination has been received by the Company, UK Seller or Asia Seller.

(d)

None of the Purchased C Assets (i) is "tax exempt use property" within the meaning of Section 168(h) of the Code, (ii) is subject to a least under Section 7701(h) of the Code or under any predecessor section thereof, (iii) is property which is required to be treated as being owned by any other Person pursuant to the so-called "safe harbor lease" provisions of former Section 168(1)(8) of the Code or (iv) directly or indirectly secures any indebtedness of the interest on which is exempt under Section 103(a) of the Code.

(e)

With respect to the Transferred C Business or the Purchased C Assets, Sellers have not participated in, or is not currently participating in, a "reportable transaction" within the meaning of Treas. Reg. §§1.6011-4(b) or any transaction requiring disclosure under a corresponding or similar provision of state or local Law.

(f)

No taxing authority in a jurisdiction in which Sellers or any of their Subsidiaries does not file Tax Returns has notified any Seller or any of their Subsidiaries in writing that Sellers or any of its Subsidiaries is or may be required to file tax Returns in, or is or may be subject to Tax by, that jurisdiction.

(g)

None of the Purchased C Assets that is transferred by UK Seller or Asia Seller qualify as "United States real property interest" within the meaning of Section 897(c) of the Code and the Treasury Regulations promulgated thereunder.

(h)

None of the Purchased C Assets is partnership interests with respect to which (i) there is a negative balance in the capital account attributable to such partnership interests as of the Initial Closing Date or the Subsequent Closing Date, as applicable, or (ii) would result in income recognition by Buyer that will be attributable to periods prior to the Initial Closing Date or the Subsequent Closing Date, as applicable.

(i)

Tax Representations of C Israel.

(i)

Each of C Israel and its Subsidiaries has: (A) timely filed, or has caused to be timely filed on its behalf (taking into account any extension of time in which to file), all Tax Returns required to be filed by it, and all such Tax Returns are complete, true and accurate in all respects; (B) timely paid all Taxes due and payable (regardless of whether shown on any of such Tax Returns); and (C) complied with all applicable Laws relating to the withholding of Taxes from amounts owing to any Person.

(ii)

No deficiency with respect to Taxes has been proposed, asserted or assessed against C Israel or any of its Subsidiaries, which has not been fully paid, finally resolved or adequately reserved for in its financial statements in accordance with GAAP, and no issue has been raised in any examination by any taxing authority, which, by application of similar principles, could reasonably be expected to result in the proposal or assertion of a Tax deficiency for another year not so examined.

(iii)

There are no outstanding waivers or comparable consents given by C Israel or any of its Subsidiaries regarding the application of the statute of limitations with respect to any Taxes or Tax Returns.

(iv)

No Tax authority of a jurisdiction in which C Israel or any of its Subsidiaries does not file Tax Returns has asserted that C Israel or any of its Subsidiaries may be obligated to file Tax Returns in that jurisdiction.

(v)

There are no Liens for Taxes upon any property or assets of C Israel or any of its Subsidiaries, except for Permitted Liens.

(vi)

There are no audits, Legal Proceedings, claims, examinations, deficiencies, assessments or proceedings before any taxing authority currently pending with regard to any Taxes, Tax matters or Tax Returns against C Israel or any of its Subsidiaries, and neither C Israel nor any of its Subsidiaries has received any notice of any such audits, Legal Proceedings, claims, examinations, deficiencies, assessments or proceedings.

(vii)

Neither C Israel nor any of its Subsidiaries has engaged in or been a party to any "reportable transaction" as defined in the Treasury Regulations Section 1.6011-4 or any corresponding provision of state, local or foreign Tax law.

(viii)

Neither C Israel nor any of its Subsidiaries has been a member of an affiliated (within the meaning of Section 1504 of the Code or any corresponding provision of state, local or foreign Tax law), combined or unitary group of corporations filing a consolidated, combined or unitary Tax Return (other than any such group the common parent of which was the Company or C Israel) and neither C Israel nor any of its Subsidiaries has any liability for the Taxes of any other Person (other than C Israel or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any comparable provision of applicable state, local, or foreign Law), as a transferee or successor, by Contract, or otherwise.

(ix)

Neither C Israel nor any of its Subsidiaries will be required to include any adjustment in Taxable income for any Post-Closing Tax Period under Section 481(c) of the Code (or any comparable provision of applicable state, local, or foreign Law) as a result of a change in method of accounting for a Pre-Closing Tax Period.

(x)

In each of the past six (6) taxable years and for the current taxable year, neither C Israel nor any of its Subsidiaries has held an "investment in United States property" as defined in Section 956 of the Code.

(xi)

There are no tax rulings, requests for rulings or closing agreements relating to C Israel or any of its Subsidiaries that could affect their liability for Taxes for any period after the Subsequent Closing Date.

(xii)

C Israel and its shareholders are not subject to any restrictions or limitations pursuant to Part E2 of the Israeli Income Tax Ordinance [New Version, 1961] (the "Israeli Tax Code") or pursuant to any tax ruling made with reference to the provision of Part E2.

(xiii)

Neither C Israel nor any of its Subsidiaries has undertaken since January 1, 2007 any transaction that will require special reporting in accordance with the Israeli Income Tax Regulations (Tax Planning Requiring Reporting)(Temporary Provisions), 2006, regarding reportable tax planning.

(xiv)

C Israel and its Subsidiaries are in compliance with all material transfer pricing requirements in all jurisdictions in which they do business.

(xv)

None of C Israel's Subsidiaries is a Controlled Foreign Corporation under Section 75B of the Israeli Tax Code.

(xvi)

C Israel and each of its Subsidiaries are in compliance in all material respects with all terms and conditions of any Tax exemptions, Tax holiday or other Tax reduction agreement, approval or order of any Tax authority.

Section 3.14

Broker-Dealer Matters

.  

(a)

The Company is registered with the Commission as a broker-dealer under Section 15(b) of the Exchange Act, and is a member in good standing of FINRA and all applicable SROs.  The Company or another Seller has made available to Buyer true, complete and correct copies of Seller's regulatory filings as may be required by any Governmental Entity, including its Form BD and any filings required on behalf of the business of the Company (the "Regulatory Filings").  As of its respective filing date, each Regulatory Filing complied as to form and substance in all material respects with the applicable Law requiring such Regulatory Filing to be filed and each Regulatory Filing complied in all material respects with applicable regulatory requirements and accounting principles applicable to such Regulatory Filing.  Each such Regulatory Filing co ntained all material information required to be included therein and did not omit any material information so required in order that such Regulatory Filing be true, complete and correct in all material respects.

(b)

The Company or another Seller has made available to Buyer (i) copies of all Regulatory Filings related to the business of the Company made since January 1, 2007, (ii) copies of all inspection reports related to the business of the Company provided to the Company by the Commission, SRO and any other Governmental Entities and all written responses thereto since January 1, 2007, (iii) all correspondence, memoranda or other documentation related to the business of the Company and received by the Company from the Commission, SRO and any other Governmental Entities since January 1, 2007, and (iv) copies of all correspondence relating to any inquiry or investigation by any Governmental Entity or to any customer complaint related to the business of the Company provided to the Company since January 1, 2007.

(c)

Except as set forth in Section 5.14(c) of the Seller Disclosure Schedule, neither the Company in respect of the Transferred C Businesses nor any of its Seller Registered Representatives is subject to a "statutory disqualification" (as defined in Section 3(a)(39) of the Exchange Act) or to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of, Seller as a broker-dealer, municipal securities dealer, government securities broker or government securities dealer under Section 15, Section 15B or Section 15C of the Exchange Act other than, in the case of the Company only, any disqualification that has been waived or relieved by the appropriate Governmental Entity.

(d)

The Company has made all filings necessary to request the timely renewal or issuance of all Permits prior to the Closing Date that are required for the Company to own, operate and maintain the assets of the business of the Company and to conduct the business of the Company as it is currently being conducted.  The Company has since January 1, 2007 filed all registration, reports, notices, forms, or other filings required by any Governmental Entity.  As of their respective dates, all such registrations, reports, notices, forms or other filings complied with all Laws in all material respects.

(e)

Except as set forth on Section 5.14(e) of the Seller Disclosure Schedule, neither the Company nor the Transferred C Businesses:

(i)

has received, since January 1, 2007, any notification or communication from any Governmental Entity (1) asserting that the business of the Company is not in compliance in all material respects with any Laws, or has otherwise engaged in any unlawful business practice, (2) threatening to suspend, modify the terms of, revoke any Permit, franchise, seat or membership, in any securities exchange, commodities exchange or Governmental Entity, (3) requiring the business of the Company to enter into a cease and desist order, acceptance, waiver and consent agreement or memorandum of understanding (or requiring the managers thereof to adopt any resolution or policy), (4) restricting or disqualifying the activities of the business of the Company (except for restrictions generally imposed by (A) rule, regulation or administrative policy on brokers or dealers generally, or (B) an SRO, including wi thout limitation pursuant to the Company's membership agreement with FINRA), or (5) that the business of the Company is the subject of any Legal Proceeding;

(ii)

is aware of any pending or, to the knowledge of the Company, threatened material Legal Proceeding by any Governmental Entity against the Company or the business of the Company;

(iii)

since January 1, 2007 has been, or currently is, subject to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of any broker-dealer as a broker-dealer, "electronic communications network" (as defined under Rules 11Ac1-1 and 11Ac1-4 under the Exchange Act or "alternative trading system" (as defined in Rule 300 of Regulation ATS under the Exchange Act) and, to the knowledge of the Company, there is no reasonable basis for a proceeding or investigation, whether formal or informal, preliminary or otherwise, that is reasonably likely to result in, any such censure, limitation, suspension or revocation;

(iv)

since January 1, 2007 has been, or currently is, required to be registered as a broker-dealer, securities exchange, electronic communications network or alternative trading system under any Law and is not so registered;

(v)

since January 1, 2007 has been, or currently has, failed to be registered, licensed or qualified where required to be registered, licensed or qualified as a broker-dealer with the Commission, the securities commission of any state or foreign jurisdiction or any SRO, and each is duly registered, licensed or qualified as such and such registrations are in full force and effect; or

(vi)

since January 1, 2007, with respect to the Transferred C Businesses, has been the subject of any customer complaint involving an amount exceeding, individually or in the aggregate, $100,000.

(f)

Section 5.14(f) of the Seller Disclosure Schedule sets forth the jurisdictions in which any of the Company, UK Seller, Asia Seller and C Israel is registered as a broker-dealer.

(g)

Section 5.14(g) of the Seller Disclosure Schedule sets forth all of the SROs of which any of the Company, UK Seller, Asia Seller and C Israel is a member.

Section 3.15

Investment Purpose

.  Seller Parent (or its designee as the case may be) is acquiring, as principal for its own account, the Warrant and will acquire on the Deferred Payment Date the Viner Debentures (if applicable) and the Buyer Parent Shares (if applicable), for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof.

Section 3.16

C Israel

.  

(a)

Capitalization.  The Company holds of record and owns beneficially the C Israel Shares free and clear of any Liens, other than Permitted Liens, or restrictions on transfer (other than restrictions under the Securities Act and state securities Laws).  The C Israel Shares, all of which are owned beneficially and of record by the Company, constitute the entire authorized and outstanding capital stock of C Israel.  All of the issued and outstanding C Israel Shares have been duly authorized, validly issued, fully paid, non-assessable.  There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other Contracts and commitments that could require C Israel to issue, sell, or otherwise cause to become outstanding any of its capital stock.  There are no outstanding o r authorized stock appreciation, phantom stock, profit participation, or similar with respect to C Israel.

(b)

Compliance with Laws.  C Israel has been, and is being, operated by the Company in compliance in all respects with all Applicable Laws, including Environmental Laws and Labor Laws.  Section 5.16(b) of the Seller Disclosure Schedule sets forth a list of all material Permits required in connection with the operation of C Israel under Applicable Laws.  Seller possesses all such Permits, and is in compliance in all material respects with, all such Permits.  To the knowledge of Seller, C Israel and none of its Affiliates nor their respective officers and employees has received any notification or communication from any Governmental Entity relating to, involving or applying to C Israel (i) asserting that C Israel is not in compliance with any of the statutes, rules, regulations, or ordinances which such Governmental Entity enforces, o r has otherwise engaged in any unlawful business practice, (ii) threatening to revoke any license, franchise, permit, seat on any stock or commodities exchange or Permit, (iii) requiring C Israel (including any of C Israel's directors or controlling Persons) to enter into a cease and desist order, agreement, or memorandum of understanding (or requiring the board of directors of C Israel to adopt any resolution or policy), or (iv) restricting or disqualifying the activities of C Israel (except for restrictions generally imposed by rule, regulation or administrative policy on brokers or dealers generally).

(c)

Financial Statements.

(i)

Section 5.16(c) of the Seller Disclosure Schedule includes audited balance sheets and Statements of Operations, changes in shareholders’ equity and cash flows for the year ended December 31, 2006 (the "C Israel Financial Statements").

(ii)

Except as set forth on Section 5.16(c) of the Seller Disclosure Schedule, each of the C Israel Financial Statements are based on the accounting books and records of C Israel have been prepared in conformity with generally accepted accounting standards in Israel (subject to normal year end adjustments) applied on a consistent basis throughout the periods indicated, and fairly and accurately presents the financial condition of C Israel as of the dates thereof and the results of operations and cash flows of C Israel for the periods then ended.

(d)

Absence of Undisclosed Liabilities.  Except for the Excluded C Liabilities and Liabilities (i) reflected in the C Israel Financial Statements, (ii) set forth in Section 5.16(d), or any other Section, of the Seller Disclosure Schedule, or (iii) incurred in the ordinary course of business consistent with past practice since the date of the most recent C Israel Financial Statements, C Israel has not incurred any Liabilities of whatsoever nature, direct or indirect, whether accrued, fixed, contingent or otherwise that would be required to be reflected or reserved against on a balance sheet of C Israel prepared in accordance with GAAP.

(e)

C Israel Support Agreements.  Section 5.16(e) of the Seller Disclosure Schedules sets for a true and complete list of all C Israel Support Agreements, true, correct and complete copies of which have been made available to Buyer.

Section 3.17

Insurance

.  Sellers and their respective Affiliates maintain insurance of the type and amount customarily maintained by Persons conducting businesses similar to the Transferred C Businesses.  The Company has not received any notice of cancellation or intent to cancel or increase premiums, other than annual or other periodic increases in the ordinary course of business, with respect to such insurance and no insurer has threatened to cancel any such policies.  

Section 3.18

Disclosure

.  No representation or warranty by Sellers contained in this Agreement, and no statement contained in this Agreement, the Seller Related Instruments or the Seller Disclosure Schedule, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading, or necessary in order to fully and fairly provide the information required to be provided in any such document.

Section 3.19

No Other Representations or Warranties

.  Except for the representations and warranties contained in this Article V, none of Sellers nor any other Person on behalf of Sellers makes any express or implied representation or warranty with respect to the Transferred C Businesses, Purchased C Assets, the Assumed C Liabilities, C Israel or with respect to any other information provided to Buyer Parent or Buyer in connection with the transactions contemplated hereby.  In particular, Buyer and Buyer Parent acknowledge that Sellers have not made and do not make any representation or warranty to Buyer and Buyer Parent with respect to any financial projection or forecast, written or oral, relating to the Transferred C Businesses.  

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER PARENT AND BUYER

Buyer Parent and Buyer hereby represent and warrant to Sellers as of the date hereof and as of the Initial Closing Date as follows:

Section 4.1

Organization; Authority

.  

(a)

Each of Buyer Parent and Buyer is a duly organized, validly existing and in good standing under the Laws of Canada and New York, respectively, and have all requisite corporate power and authority to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  Each of Buyer Parent and Buyer is qualified or licensed to do business as a foreign corporation and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or licensed or in good standing would not have a material adverse effect on Buyer or Buyer Parent.

(b)

Buyer has all requisite corporate power and authority to enter into this Agreement and any instruments and agreements contemplated herein required to be executed and delivered pursuant to this Agreement to which it is a party (including the Ancillary Agreements, which are collectively referred to herein as the "Buyer Related Instruments") and to consummate the transactions contemplated hereby and thereby.  Buyer Parent has all requisite power and authority to enter into this Agreement, the Buyer Related Instruments, as applicable, and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and Buyer Related Instruments and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of each of Buyer Parent and Buyer.  This Agreement has been, and each of Buyer Related Instruments shall be, duly executed and delivered by each of Buyer Parent and Buyer, as applicable, and constitutes a valid and binding obligation of each of Buyer Parent and Buyer, enforceable against Buyer Parent and Buyer, as the case may be, in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditors' rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c)

In addition, the Warrant and the Viner Debentures (if applicable) when issued at the Initial Closing Date or the Deferred Payment Date, as applicable, will have been duly executed by Buyer Parent and, when issued and delivered as provided in this Agreement, will constitute valid and binding obligations of Buyer Parent, enforceable against Buyer Parent in accordance with their terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditors' rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

Section 4.2

No Violation; Consents and Approvals

.  

(a)

The execution and delivery of this Agreement and the Buyer Related Instruments do not, and the consummation of the transactions contemplated hereby or thereby and compliance with the terms hereof or thereof will not violate or be in conflict with, (a) any provision of the charter or by-laws of Buyer Parent or Buyer (or equivalent documents), (b) any material Law applicable to Buyer Parent or Buyer or the property or assets of Buyer Parent or Buyer or (c) assuming the MS Facility, as amended, shall be in effect or the obligations under the MS Facility are repaid prior to or concurrently with the Initial Closing, in any material respect, any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Buyer Parent or Buyer is a party or by which Buyer Parent or Buyer may be bound or affected or to which any of their respect ive assets may be subject.

(b)

Except (i) for the Required Approvals, (ii) as set forth in Section 6.02(b) of the Buyer Disclosure Schedule, (iii) the requirements of (A) the Merger Control Laws, (B) the Securities Act, (C) the Exchange Act, and (D) state or provincial securities or blue sky law requirements in connection with the Warrant, the Viner Debentures (if applicable) and the Buyer Parent Shares (if applicable), and (iv) as would not have a material adverse effect on Buyer or Buyer Parent or materially impair or delay Buyer's or Buyer Parent's ability to consummate the transactions contemplated by this Agreement or any Buyer Related Instrument, no consent, approval, order or authorization of, or notice to, or registration, declaration or filing with, any Governmental Entity or any third party is required to be obtained or made by or with respect to Buyer Parent or Buyer in conn ection with the execution and delivery of this Agreement or Buyer Related Instruments or the consummation by Buyer Parent or Buyer, as the case may be, of the transactions contemplated hereby or thereby.

Section 4.3

Legal Proceedings

.  There are no Legal Proceedings pending or, to Buyer's knowledge, threatened, in each case, against or involving Buyer or the Transferred O Business, that are reasonably likely to (i) result in material Liability to Buyer or materially interfere with or inhibit the operation of the OIB Division, (ii) have the effect of delaying, preventing, or making illegal the consummation of the transactions contemplated hereby or (iii) materially interfering with the ability of Buyer to operate the OIB Division after the Initial Closing.  Section 6.03 of the Buyer Disclosure Schedule sets forth a complete and correct list of all material Legal Proceedings with respect to the Transferred O Business since January 1, 2006 to the date hereof, together with an accurate summary of the claims underlying such Legal Proceeding and the status thereof.

Section 4.4

Brokers

.  No broker, finder or financial advisor or other Person is entitled to any brokerage fees, commissions, finders' fees or financial advisory fees in connection with the transactions contemplated hereby by reason of any action taken by Buyer Parent or Buyer or any of their respective directors, officers, employees, representatives or agents.

Section 4.5

Commission Filings

.  As of its filing date, each Buyer Parent Commission Document complied as to form in all material respects with the applicable requirements of the Exchange Act.  As of its filing date, each Buyer Parent Commission Document filed pursuant to the Exchange Act did not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not false or misleading.

Section 4.6

Financial Statements

.  The audited consolidated financial statements and unaudited consolidated interim financial statements of Buyer Parent (including any related notes and schedules) included in its annual reports on Form 10-K and the quarterly reports on Form 10-Q referred to in this Section 6.06 (collectively, the "Buyer Parent Financial Statements") present fairly the financial position of Buyer Parent and its Subsidiaries as of the dates thereof and their results of operations and cash flows for the periods then ended (subject to normal year-end adjustments and the absence of notes in the case of any unaudited interim financial statements), in each case in conformity with GAAP applied on a consistent basis (except as may be indicated in the notes thereto).

Section 4.7

Absence of Undisclosed Liabilities

.  Except for Liabilities (i) reflected on the Buyer Parent Financial Statements or (ii) incurred in the ordinary course of business consistent with past practice since the date of the most recent Buyer Parent Financial Statements, neither Buyer nor Buyer Parent has incurred any Liabilities of whatever nature, direct or indirect, whether accrued, fixed, contingent or otherwise that would be required to be reflected or reserved against on a consolidated balance sheet of Buyer Parent prepared in accordance with GAAP.  

Section 4.8

Capitalization

.  As of the date of this Agreement, Buyer Parent's  outstanding capital stock consists of 13,178,879 Class A Shares and 99,680 Class B Shares.  All such issued and outstanding shares or Buyer Parent's capital stock are duly authorized and validly issued, fully paid and nonassessable.

Section 4.9

Sufficient Funds

.  Subject to consummation of the transactions contemplated by the Subordinated Term Loan Facility, Buyer will have at the Initial Closing, sufficient funds, capital and financial resources to (i) satisfy its obligations under this Agreement and the Ancillary Agreements and consummate the transactions contemplated hereby and satisfy its obligations hereunder and thereunder and (ii) operate the Transferred O Businesses and the Transferred C Businesses in a manner consistent with past practices and in accordance with the terms of this Agreement and the O Transfer and Support Agreement.

Section 4.10

Buyer Parent Shares

.  Upon execution and delivery of the Warrant at the Initial Closing, all Buyer Parent Shares that are issuable upon exercise thereof shall be duly authorized and reserved for issuance.

Section 4.11

Transferred O Businesses

.

(a)

Compliance with Laws; Licenses.

(i)

The Transferred O Businesses have been, and are being, operated by Buyer in compliance in all respects with all applicable Laws, including Environmental Laws and Labor Laws.  Section 6.11(a)(i) of the Buyer Disclosure Schedule sets forth a list of all material Permits required in connection with the operation of the Transferred O Businesses under such applicable Laws.  Buyer possesses all such Permits, and is in compliance in all material respects with, all such Permits.

(ii)

Except as listed in Section 6.11(a)(ii) of the Buyer Disclosure Schedule, no complaints, lawsuits or other proceedings are pending or, to the knowledge of Buyer, threatened in any forum by or on behalf of any present or former employee of the Transferred O Businesses or any applicant for employment with respect to the Transferred O Businesses alleging breach of any express or implied Contract or employment, any Laws governing employment or the termination thereof or other discriminatory, wrongful or tortuous conduct in connection with the employment relationship.

(iii)

All of Buyer's officers and employees working in the Transferred O Businesses who are required to be licensed or registered for the activities conducted by them are and at all times have been duly licensed or registered in each state or jurisdiction in which and with each Governmental Entity with whom such licensing or regulation is so required (such officers and employees are collectively, the "Buyer Registered Representatives").  To the knowledge of Buyer, none of the Buyer Registered Representatives is or has been subject to any Legal Proceeding or complaint by a regulator or customer.

(iv)

To the knowledge of Buyer, neither Buyer nor any of its Affiliates or their respective officers and employees has received any notification or communication from any Governmental Entity relating to, involving or applying to the Transferred O Businesses (i) asserting that any of them is not in compliance with any of the statutes, rules, regulations, or ordinances which such Governmental Entity enforces, or has otherwise engaged in any unlawful business practice, (ii) threatening to revoke any license, franchise, permit, seat on any stock or commodities exchange or Permit, (iii) requiring any of them (including any of Buyer's directors or controlling Persons) to enter into a cease and desist order, agreement, or memorandum of understanding (or requiring the board of directors of Buyer to adopt any resolution or policy), or (iv) restricting or disqualifying the activities of Buyer (exce pt for restrictions generally imposed by rule, regulation or administrative policy on brokers or dealers generally).

Section 4.12

Broker-Dealer Matters

.

(a)

Buyer is registered with the Commission as a broker-dealer under Section 15(b) of the Exchange Act, and is a member in good standing of FINRA and all other applicable SROs.  As of its respective filing date, each Regulatory Filing of Buyer complied as to form and substance in all material respects with the applicable Law requiring such Regulatory Filing to be filed and each such Regulatory Filing complied in all material respects with applicable regulatory requirements and accounting principles applicable to such Regulatory Filing.  Each such Regulatory Filing contained all material information required to be included therein and did not omit any material information so required in order that such Regulatory Filing be true, complete and correct in all material respects.

(b)

Neither Buyer nor any of Buyer's Buyer Registered Representatives is subject to a "statutory disqualification" (as defined in Section 3(a)(39) of the Exchange Act) or to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of, Buyer as a broker-dealer, municipal securities dealer, government securities broker or government securities dealer under Section 15, Section 15B or Section 15C of the Exchange Act other than, in the case of Buyer only, any disqualification that has been waived or relieved by the appropriate Governmental Entity.

(c)

Buyer has since January 1, 2007 filed all registration, reports, notices, forms, or other filings required by any Governmental Entity with respect to Transferred O Businesses.  As of their respective dates, all such registrations, reports, notices, forms or other filings complied with all Laws in all material respects.

(d)

Except as set forth on Section 6.12(d) of the Buyer Disclosure Schedule, neither Buyer nor the Transferred O Businesses:

(i)

has received, since January 1, 2007, any notification or communication from any Governmental Entity (1) asserting that any of the Transferred O Businesses is not in compliance in all material respects with any Laws, or has otherwise engaged in any unlawful business practice, (2) threatening to suspend, modify the terms of, revoke any Permit, franchise, seat or membership, in any securities exchange, commodities exchange or Governmental Entity, (3) requiring any of the Transferred O Businesses to enter into a cease and desist order, acceptance, waiver and consent agreement or memorandum of understanding (or requiring the managers thereof to adopt any resolution or policy), (4) restricting or disqualifying the activities of the business of Buyer (except for restrictions generally imposed by (A) rule, regulation or administrative policy on brokers or dealers generally, or (B) an SRO, in cluding without limitation pursuant to the Company's membership agreement with FINRA), or (5) that any of the Transferred O Businesses is the subject of any Legal Proceeding;

(ii)

is aware of any pending or, to the knowledge of the applicable Buyer, threatened material Legal Proceeding by any Governmental Entity against Buyer or any of the Transferred O Businesses;

(iii)

since January 1, 2007 has been, or currently is, subject to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or suspension or revocation of the registration of any broker-dealer as a broker-dealer, "electronic communications network" (as defined under Rules 11Ac1-1 and 11Ac1-4 under the Exchange Act or "alternative trading system" (as defined in Rule 300 of Regulation ATS under the Exchange Act) and, to the knowledge of Buyer, there is no reasonable basis for a proceeding or investigation, whether formal or informal, preliminary or otherwise, that is reasonably likely to result in, any such censure, limitation, suspension or revocation;

(iv)

since January 1, 2007 has been, or currently is, required to be registered as a broker-dealer, securities exchange, electronic communications network or alternative trading system under any Law and is not so registered;

(v)

since January 1, 2007 has been, or currently has, failed to be registered, licensed or qualified where required to be registered, licensed or qualified as a broker-dealer with the Commission, the securities commission of any state or foreign jurisdiction or any SRO, and each is duly registered, licensed or qualified as such and such registrations are in full force and effect; or

(vi)

since January 1, 2007 with respect to Transferred O Businesses, has been the subject of any customer complaint involving an amount exceeding, individually or in the aggregate, $100,000.

(e)

Section 6.12(e) of the Buyer Disclosure Schedule sets forth the jurisdictions in which Buyer is registered as a broker-dealer.

(f)

Section 6.12(f) of the Buyer Disclosure Schedule sets forth all of the SROs of which Buyer is a member.

Section 4.13

Tax Status of Viner

.  Viner is a "United States Person" within the meaning of Section 7701(a)(30) of the Code.

Section 4.14

Disclosure

.  No representation or warranty by Buyer or Buyer Parent contained in this Agreement, and no statement contained in this Agreement, the Buyer Related Instruments, the Buyer Parent Financial Statements or the Buyer Disclosure Schedule, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading, or necessary in order to fully and fairly provide the information required to be provided in any such document.

Section 4.15

No Other Representations or Warranties

.  Except the representations and warranties contained in this Article VI, neither Buyer or Buyer Parent nor any other Person on behalf of Buyer or Buyer Parent makes any express or implied representation or warranty with respect to Buyer or Buyer Parent or with respect to any other information provided to Seller in connection with the transactions contemplated hereby.  In particular, Sellers acknowledge that Buyer and Buyer Parent have not made and do not make any representation or warranty to Sellers with respect to any financial projection or forecast, written or oral, relating to either of them or the Transferred O Businesses.  

ARTICLE V

COVENANTS OF THE PARTIES

Section 5.1

Conduct of the Transferred C Businesses

.  Except as and to the extent expressly permitted by this Agreement during the period from the date of this Agreement up to the Initial Closing Date, and, as applicable, up to any Subsequent Closing Date, each Seller, to the extent applicable, shall (and the Company shall cause C Israel to) (i) conduct the Transferred C Businesses in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve its current relationships with its, clients, customers and others having business dealings with it and (iii) pay Taxes related to the Transferred C Businesses or the Purchased C Assets as they become due and payable.  Without limiting the generality of the foregoing, except as and to the extent set forth in Section 7.01 of the Seller Disclosure Schedule, during the period from the date of this Agreement through the Initial Closing Date, and, as applicable, up to any Subsequent Closing, without the prior written consent of Buyer, with respect to the Transferred C Businesses or any of the Purchased C Assets, each Seller, to the extent applicable, shall not:

(a)

other than (A) in the ordinary course of business consistent with past practice, or (B) as required by Law, or in accordance with any applicable plans, programs, arrangements, policies or agreements, or (C) as contemplated by this Agreement, (i) increase, decrease or otherwise modify the compensation of, or (ii) pay or agree to pay, or withdraw or reduce, any benefit to any C Front Office Employee or C Infrastructure Employee;

(b)

other than (A) in the ordinary course of business consistent with past practice, or (B) as required by Law or in accordance with any applicable plans, programs, arrangements, policies or agreements, or (C) as contemplated by this Agreement, modify, amend, renew or terminate any employment provisions of any C Front Office Employee or C Infrastructure Employee or the terms of any Plan

(c)

other than (A) in the ordinary course of business consistent with past practice, or (B) as required by Law or in accordance with any applicable plans, programs, arrangements, policies or agreements, or (C) as contemplated by this Agreement, (i) grant or increase any severance, change in control, termination or similar compensation or benefits payable to any C Front Office Employee or C Infrastructure Employee, or (ii) adopt, enter into, terminate or amend any Plan (or any plan that would constitute a Plan if in effect on the date hereof);

(d)

enter into any collective bargaining agreement or other labor agreement in relation to any Transferred C Employee;

(e)

sell, lease, transfer or otherwise dispose of any Purchased C Asset or Proprietary Software Application required for the operation of the Transferred C Businesses, subject any such asset to any Lien or purchase or acquire any Purchased C Asset material to the Transferred C Businesses, in each case, other than in the ordinary course of business consistent with past practice;

(f)

modify, amend, renew or terminate the 300 Madison Lease, or any of the Assigned C Contracts, or, except for Engagements entered into in the ordinary course of business consistent with past practice, enter into any new Assigned C Contract material to the Transferred C Businesses;

(g)

fail to maintain the Books and Records in the usual, regular and ordinary manner on a basis consistently applied;

(h)

cancel any debt or waive any claim or right of substantial value included among the Purchased C Assets or the Assumed C Liabilities;

(i)

make any material change in any method of accounting or accounting practice policy applicable to the Transferred C Businesses other than in accordance with GAAP (including with respect to C Israel);

(j)

authorize or effect any change in the organizational documents of C Israel in any manner, or effect any recapitalization, reclassification, equity dividend, equity split or like change in its capitalization;

(k)

acquire, redeem, issue, sell or otherwise dispose of, or, except as expressly contemplated by this Agreement, declare any dividends on or make any distributions with respect to, any of the capital stock or any securities of C Israel or any options or warrants with respect thereto;

(l)

with respect to C Israel, not change any Tax accounting method or financial accounting principle, method or practice, other than changes required by GAAP or applicable Law to be implemented during such period, and with respect to the Purchased C Assets and the Assumed C Liabilities, not change any Tax accounting method or financial accounting principle, method or practice, other than (1) changes required by GAAP or applicable Law to be implemented during such period or (2) changes made periodically in the ordinary course of business consistent with past practice;

(m)

with respect to C Israel, not make, change or revoke any Tax election, not incur any liability for Taxes other than in the ordinary course of business, not enter into Tax sharing agreement, Tax indemnity obligation or similar agreement, and not file any amended Tax Return or any claim for refund of Taxes with respect to its income, operations or property.  With respect to the Purchased C Assets and the Assumed C Liabilities, not make, change or revoke any Tax election, not incur any liability for Taxes, not enter into Tax sharing agreement, Tax indemnity obligation or similar agreement, and not file any amended Tax Return or any claim for refund of Taxes with respect to its income, operations or property, other than changes made periodically in the ordinary course of business consistent with past practice;

(n)

take any action that would, or could reasonably be expected to, cause Sellers to be in breach of any representation, warranty, covenant or agreement contained in this Agreement or in any of the Ancillary Agreements; and

(o)

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

Section 5.2

Conduct of the Transferred O Businesses

.  Except as and to the extent expressly permitted by this Agreement during the period from the date of this Agreement until the Initial Closing Date, Buyer shall (i) conduct the Transferred O Businesses in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve its current relationships with its clients, customers and others having business dealings with it and (iii) pay Taxes related to the Transferred O Businesses as they become due and payable.  Without limiting the generality of the foregoing, except as and to the extent set forth in Section 7.02 of the Buyer Disclosure Schedule, during the period from the date of this Agreement through the Initial Closing Date, without the prior written consent of Sellers, with respect to the Transferred O Businesses, Buyer shall not take any action that would, or could reasonably b e expected to, cause Buyer to be in breach of any representation, warranty, covenant or agreement contained in this Agreement or in any of the Ancillary Agreements; or agree, whether in writing or otherwise, to do any of the foregoing.

Section 5.3

Access; Confidentiality; Non-Disparagement, Etc.

(a)

During the period from the date of this Agreement up to the Initial Closing Date, (i) each of Sellers and Buyer shall give the other and its authorized representatives reasonable access, during regular business hours and upon reasonable notice, to examine and make copies of, all books and records (including Retained Books and Records) relating to the Transferred C Businesses) as they may reasonably request and (ii) the Company shall grant Buyer and its representatives access, upon reasonable notice to such employees, personnel, representatives, premises, facilities, properties and customers of the Transferred C Businesses as Buyer may reasonably request; provided, however, that either party may restrict the foregoing access to the extent that such Books and Records are required to be kept confidential in accordance with any contractual obligation o r the order of a relevant Government Entity or any applicable Law prohibits such access, provided, further, that the party in possession of such books and records will use commercially reasonable efforts to limit the effect and application of such restrictions (including by seeking consents and waivers where required) and shall furnish information to the extent not so restricted.

(b)

Following the Initial Closing, Sellers shall, and shall cause their respective officers, directors, employees, agents and Affiliates to, treat and hold as confidential any information concerning the Transferred C Businesses, including any notes, analyses, compilations, studies, forecasts, interpretations or other documents that are derived from, contain, reflect or are based upon any such information (the "Buyer Confidential Information"), refrain from using any of the Buyer Confidential Information except as reasonably necessary to comply with applicable Law or Tax or regulatory requirements (subject to compliance with the last sentence of this Section 7.03(b)) and as otherwise contemplated by this Agreement.  Notwithstanding the foregoing, Buyer Confidential Information shall not include information that is generally available to t he public as of the Initial Closing Date or becomes available to the public after the Initial Closing Date other than as a result of a breach of this Section 7.03(b) by Sellers or any of their respective Affiliates.  In the event that Sellers are required by Law to produce information or documents in any Legal Proceeding, interrogatory, subpoena, civil investigative demand, or similar process that would disclose any Buyer Confidential Information, such Person shall notify, to the extent permitted by Law, Buyer promptly of the request or requirement so that Buyer may seek, at Buyer's expense, an appropriate protective order.  If any Seller is required to disclose any Confidential Information to comply with applicable Law or Tax or regulatory requirements, such Person may disclose the Buyer Confidential Information; provided that such disclosing Person shall use its reasonable efforts to obtain, at the request and expense of Buyer, an order or other assurance that confidential treatment shall be accorded to such portion of the Buyer Confidential Information required to be disclosed as Buyer shall reasonably designate.

(c)

Following the Initial Closing, Buyer shall, and shall cause their respective officers, directors, employees, agents and Affiliates to, treat and hold as confidential any information concerning the Retained C Business, including any notes, analyses, compilations, studies, forecasts, interpretations or other documents that are derived from, contain, reflect or are based upon any such information (the "Seller Confidential Information"), refrain from using any of the Seller Confidential Information except as reasonably necessary to comply with applicable Law or Tax or regulatory requirements (subject to compliance with the last sentence of this Section 7.03(c)) and as otherwise contemplated by this Agreement (including the operation of the Transferred C Businesses).  Notwithstanding the foregoing, Seller Confidential Information shall no t include information that is generally available to the public as of the Initial Closing Date or becomes available to the public after the Initial Closing Date other than as a result of a breach of this Section 7.03(c) by Buyer or any of its Affiliates.  In the event that Buyer is required by Law to produce information or documents in any Legal Proceeding, interrogatory, subpoena, civil investigative demand, or similar process that would disclose any Seller Confidential Information, such Person shall notify, to the extent permitted by Law, the Company promptly of the request or requirement so that the Company may seek, at the Company's expense, an appropriate protective order.  If Buyer or any of its Affiliates is legally required to disclose any Seller Confidential Information to comply with applicable Law or Tax or regulatory requirements, such Person may disclose the Seller Confidential Information; provided that such disclosing Person shall use its reasonable efforts to obtain, a t the request and expense of the Company, an order or other assurance that confidential treatment shall be accorded to such portion of the Seller Confidential Information required to be disclosed as the Company shall reasonably designate.

(d)

Following the Initial Closing, Buyer shall permit Seller and its authorized representatives, and Seller shall permit Buyer and its authorized representatives, during regular business hours and upon reasonable notice, to have reasonable access to, and examine and make copies of, the Books and Records which relate, to (i) transactions or events occurring prior to the Initial Closing or any Subsequent Closing, as applicable, (ii) events occurring subsequent to the Initial Closing which are related to or arise out of transactions or events occurring prior to the Initial Closing or (iii) any obligation or potential obligation of Buyer, Buyer Parent, Seller Parent or the Company to provide indemnification pursuant to Article XII.

(e)

Prior to the Initial Closing, any information received by either Buyer or Seller pursuant to this Agreement shall be held in confidence in accordance with and subject to the terms of the Confidentiality Agreement dated as of August 27, 2007 (the "Confidentiality Agreement").

(f)

Sellers agree not to, and to cause their respective Affiliates not to, make any communications to any third party (including, by way of example and not of limitation, any client of the Transferred C Businesses) that disparages, creates a negative impression of, or is in any way harmful to the Transferred C Businesses or the Transferred C Employees.  Nothing in this Agreement shall prohibit truthful statements in connection with any Legal Proceeding to enforce its rights, or defend itself against claims, under this Agreement, any Ancillary Agreement or any document or instrument delivered thereunder or in connection therewith, or when required by order of a court or other body having jurisdiction, or as otherwise may be required by Law.

(g)

Buyer and Buyer Parent agree not to, and to cause their respective Affiliates not to, make any communications to any third party (including, by way of example and not of limitation, any client of the Retained C Business) that disparages, creates a negative impression of, or is in any way harmful to the Retained C Businesses or the Retained Employees.  Nothing in this Agreement shall prohibit truthful statements in connection with any Legal Proceeding to enforce its rights, or defend itself against claims, under this Agreement, any Ancillary Agreement or any document or instrument delivered thereunder or in connection therewith, or when required by order of a court or other body having jurisdiction, or as otherwise may be required by Law.

Section 5.4

Best Efforts

.

(a)

Subject to the terms and conditions of this Agreement, each of the parties hereto shall use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement on the terms and subject to the conditions hereof as of the earliest practicable date, but not earlier than January 2, 2008.

(b)

Without limiting the generality of Section 7.04(a), each of the parties hereto, as relevant, shall use its best efforts to promptly negotiate (if applicable), finalize and enter into, as of the Initial Closing Date, definitive agreements with respect to each Ancillary Agreement not executed concurrently herewith, all such agreements substantially in accordance with the terms and conditions generally set forth in the respective forms and agreement or term sheets attached as exhibits or schedules, if applicable, to this Agreement and, in the case of term sheets, on such other commercially reasonable terms and conditions mutually acceptable to the parties thereto, in each case, taking into applicable account regulatory comments and considerations with respect thereto.  Furthermore the parties agree to promptly negotiate (if applicable) in good faith any amendments required by Governmental Entities.

(c)

Without limiting the foregoing, Buyer and Buyer Parent shall use their best efforts to take such other actions as are necessary to satisfy the Specified Conditions in respect of each of the Subsequent Closings and Sellers will use their commercially reasonable efforts to assist Buyer in satisfying the Specified Conditions.

Section 5.5

Consents

.  Without limiting the generality of Section 7.04, and subject to Section 2.07, each of the parties hereto shall use its best efforts to obtain all licenses, Permits, authorizations, consents and approvals of all third parties and Governmental Entities necessary in connection with the consummation of the transactions contemplated by this Agreement prior to the Initial Closing Date and, with respect to Buyer and Buyer Parent, all Permits necessary in order to carry on the Transferred C Businesses immediately following the Initial Closing Date.  Each of the parties hereto shall make or cause to be made all filings and submissions under Laws applicable to it (and subject to Section 7.06, pay any related requisite filing fees) as may be required for the consummation of the transactions contemplated by this Agreement and, with respect to Buyer and Buyer Parent, necessary in order to carry on the Transferred C Businesses immediately following the Initial Closing Date.  Buyer and Sellers shall coordinate and cooperate with each other in exchanging such information and assistance as any of the parties hereto may reasonably request in connection with the foregoing.  Without limiting the generality of the foregoing, Sellers shall use commercially reasonable efforts to obtain all necessary estoppels, in form and substance reasonably satisfactory to the Buyer necessary from the applicable landlord under the Assumed Leases.  Notwithstanding anything in the contrary set forth in this Agreement, any Ancillary Agreement or any Buyer Related Instrument, provided that Buyer and Buyer Parent shall have complied with their obligations under this Section 7.05 with respect to Permits necessary in order to carry on the Transferred C Businesses immediately following the Initial Closing Date, neither Buyer nor Buyer Parent shall be liable to Sellers or any of their Aff iliates as a result of, or with respect to, the failure to obtain any such Permits.

Section 5.6

HSR Act

.  Sellers and Buyer agree to submit all filings and notifications required by the HSR Act and any other applicable Merger Control Laws with respect to the transactions contemplated hereby with respect thereto.  Without limiting the foregoing, Sellers and Buyer each agree to make, or to cause to be made, an appropriate filing of a notification and report form pursuant to the HSR Act with respect to the transfer by Sellers to Buyer of the Purchased C Assets within five (5) business days after the date of this Agreement, including therein a request for early termination of the applicable waiting periods under the HSR Act, and to supply promptly any additional information and documentary material that may be requested pursuant to the HSR Act or any other applicable Merger Control Law.  Each party to this Agreement shall coordinate and cooperate fully with the other parties in exchanging su ch information and providing such assistance as such other party may reasonably request in connection with the foregoing.  All filing fees associated with filings under the HSR Act or other applicable Merger Control Laws shall be shared equally by Buyer and Sellers.

Section 5.7

Regulatory Matters

.

(a)

Without limiting Section 7.06, Seller and Buyer agree to use reasonable best efforts to (i) assist the other parties in the preparation and filing of all forms, notifications, reports and information, if any, required or reasonably deemed advisable pursuant to any Law including Merger Control Laws, FINRA, NYSE and other stock exchange rules, (ii) to obtain all licenses, Permits, consents, approvals, authorizations, qualifications and orders of any Governmental Entity or other Persons as are necessary for the consummation of the transactions contemplated hereby, and (iii) make on a prompt and timely basis all governmental or regulatory notifications and filings required to be made by it for the consummation of the transactions contemplated hereby.  Each party shall promptly advise the other party of any developments with respect to the foregoing matters.

(b)

Each party to this Agreement shall, upon request, furnish each other party with all information concerning themselves, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of Buyer or Seller to any Governmental Entity in connection with the transactions contemplated by this Agreement (except to the extent that such information would be, or relates to information that would be, filed under a claim of confidentiality).

(c)

The parties to this Agreement shall promptly advise each other upon receiving any communication from any Governmental Entity whose consent or approval is required for consummation of the transactions contemplated by this Agreement which causes such party to believe that there is a reasonable likelihood that any requisite regulatory approval will not be obtained or that the receipt of any such approval will be materially delayed or that the transactions contemplated hereby will become subject to additional conditions imposed by such Governmental Entity.

(d)

Each party to this Agreement shall provide to the other party, as promptly as practicable after the filing or receipt thereof (unless a different time period shall otherwise be specified herein), a copy of all applications, notices, petitions, filings documents and notices referred to in this Section 7.07.

Section 5.8

Public Announcements

.  Seller and Buyer shall not (i) issue any report, statement or press release or otherwise make any public statement with respect to this Agreement and the transactions contemplated hereby or, (ii) issue any report, statement or otherwise inform any business or managers of Seller, without prior consultation with and approval of the other party, except as may be required by Law or may be necessary in order to discharge its disclosure obligations, in which case such party nevertheless shall advise the other party and discuss the contents of the disclosure before issuing any such report, statement or press release; provided that the foregoing shall not prohibit any party from making such announcements or statements regarding its businesses or the conduct thereof which do not reference this Agreement or the transactions contemplated hereby in a material manner.

Section 5.9

Tax Matters

.

(a)

Transfer Taxes.  Sellers, jointly and severally, and Buyer, shall each be responsible for one-half (½) of any and all Transfer Taxes which become payable in connection with the transactions contemplated by this Agreement.  The party that is primarily responsible under law for the filing of any Tax Returns or other documents in connection with such Transfer Taxes shall prepare the appropriate Tax Return or other document ("Transfer Tax Returns") and provide a copy to the other party for its review and consent prior to the filing thereof. The party that is primarily responsible under law for the payment of any such Transfer Tax shall pay such Transfer Tax to the appropriate taxing authority, and shall be promptly reimbursed for one-half (½) of the amount of such Transfer Tax by the other party.  Notwithstanding anyt hing to the contrary contained in this Agreement, if Seller shall fail to pay its share of the Transfer Taxes as of the Initial Closing, Buyer shall be entitled to withhold from the sum of the Estimated FFE Purchase Price and the TS Purchase Price an amount equal to the Transfer Taxes shown as due on such Transfer Tax Returns.  Seller and Buyer agree to use its reasonable efforts to obtain any Tax exemption where available and otherwise to minimize the amount of Transfer Taxes payable in connection with the transactions contemplated by this Agreement and only where available Buyer shall provide a resale certificate at Closing or such other documents as may be reasonably requested by Company for the purpose of reducing any such Transfer Taxes.

(b)

Tax Returns and Filings; Payment of Taxes.  Other than as set forth on Section 7.09(c), (i) the Company shall prepare all Tax Returns of Company and all Tax Returns attributable to the Purchased C Assets and the Transferred C Businesses relating to any period ending on or prior to the Initial Closing Date or the Subsequent Closing Date, as applicable to each of the Purchased C Assets, (ii) the Company shall be responsible for paying all Taxes of the Company, and all Taxes attributable to the Purchased C Assets and the Transferred C Businesses relating to any period or portion of any period ending on or prior to the Initial Closing Date or the Subsequent Closing Date, as applicable to each of the Purchased C Assets, (iii) Buyer shall prepare all Tax Returns attributable to the Purchased C Assets and the Transferred C Businesses relating to any period beginning after the Initial Closing Date or the Subsequent Closing Date, as applicable to each of the Purchased C Assets, and (iv) Buyer shall be responsible for paying all Taxes attributable to the Purchased C Assets relating to any period or portion of any period beginning after the Initial Closing Date or the Subsequent Closing Date, as applicable to each of the Purchased C Assets.

(c)

Tax Matters Pertaining to C Israel.

(i)

Preparation of Tax Returns and Payment of Taxes.  (I) Seller shall prepare and file all Tax Returns of C Israel for all and any period ending on or prior to the Subsequent Closing Date applicable to the C Israel Shares, and shall be responsible for paying all Taxes shown on such Tax Returns, (II) Seller shall be responsible for the payment of all the Taxes of C Israel for any Pre-Closing Tax Period (including Taxes for any Straddle Period as far as such Taxes relate to any period or portion of any period ending on or prior to the Subsequent Closing Date applicable to the C Israel Shares as provided in Section 7.09(c)(ii)(B)), (III) Buyer shall be responsible for the preparation of all other Tax Returns of C Israel (including Tax Returns for Straddle Periods) and for the payment of the Taxes shown on such other Tax Returns.  Seller shall pay Buyer, or on Buyer' s behalf, at Buyer's election, its allocable share, as provided in Section 7.09(c)(ii)(B), of Taxes shown on any Tax Return for any Straddle Period within ten (10) days after proof of filing such Tax Return is provided.  With respect to any Tax Return for a Straddle Period, such Tax Return shall be provided to Seller at least thirty (30) days prior to the filling date of such Tax Return.  Buyer shall permit Sellers to review and comment on each such Tax Return prior to filing and shall make such revisions to such Tax Return as are reasonably acceptable by Buyer.  Sellers shall be entitled to any refund of Taxes due with respect to any Pre-Closing Tax Period, and the Buyer shall pay over to Sellers any such refund within ten (10) days after receipt thereof

(ii)

Tax Indemnification.

(A)

Notwithstanding anything to the contrary in this Agreement, after the Subsequent Closing Date applicable to C Israel Shares, Sellers shall indemnify C Israel or Buyer and hold them harmless from and against any loss, claim, liability, expense or other damage attributable to all (I) Taxes (or the non-payment thereof) of C Israel or any of its Subsidiaries (1) for any Pre-Closing Tax Period (determined in accordance with Section 7.09(c)(ii)(B) hereof), (2) arising from the breach or inaccuracy of any representation or warranty set forth in Section 5.13(i) hereof (it being agreed that for purposes of this Section 7.09(c)(ii)(A) the representations and warranties set forth in Section 5.13(i) shall not be deemed to be qualified by any references therein to "materiality"), or (3) the breach or nonperformance of any covenant or agreement on the part of Sellers or the Company set forth in Sections 7.01(l) and 7.01(m); (II) any liability for the payment of any amount of a type described in clause (I) arising as a result of being or having been a member of any consolidated, combined, unitary or other group or being or having been included or required to be included in any Tax Return related thereto; (III) any liability for the payment of any amount of a type described in clause (I) or clause (II) as a result of any obligation to which C Israel or any of its Subsidiaries was or is a party on or prior to the Subsequent Closing Date applicable to the C Israel Shares to indemnify or otherwise assume or succeed to the liability of any other Person; and (IV) Taxes with respect to a reassessment by a taxing authority of Taxes attributable to a Post-Closing Tax Period to the extent that Sellers or their Subsidiaries or Affiliates becomes entitled to any corresponding deduction, loss, relief, allowance, exemption, set-off, right to repayment or credit i n relation to Taxes attributable to a Pre-Closing Tax Period.

(B)

For purposes of this Agreement, in the case of any Straddle Period:

(I)

the Taxes of C Israel and its Subsidiaries that are imposed on a periodic basis and not based on income or receipts (e.g., property taxes) attributable to the Pre-Closing Tax Period shall be equal to the product of such Taxes attributable to the entire Tax period and a fraction, the numerator of which is the number of days in such period that elapsed through the Subsequent Closing Date applicable to the C Israel Shares and the denominator of which is the number of days in such Tax period; provided, however, that, if the amount of periodic Taxes imposed for such Tax period reflects different rates of Tax imposed for different periods within such Tax period, the formula described in the preceding clause shall be applied separately with respect to each such period within the Tax period; and

(II)

the Taxes of C Israel and its Subsidiaries (other than those described in clause (I)) attributable to the Pre-Closing Tax Period shall be equal to the amount computed as if such Tax period ended as of the close of the Subsequent Closing Date applicable to the C Israel Shares.

(C)

Limitations on Liability.  Seller shall have no obligation to indemnify the Buyer under this Section 7.09(c)(ii) for any Taxes of C Israel arising as a result of:

(I)

a reassessment by a taxing authority of Taxes attributable to a Pre-Closing Tax Period to the extent that Buyer or C Israel or any of their Subsidiaries, as a consequence of such reassessment, becomes entitled to any corresponding deduction, loss, relief, allowance, exemption, set-off, right to repayment or credit in relation to Taxes attributable to a Post-Closing Tax Period;

(II)

the execution or delivery by the Buyer or C Israel or any of their Subsidiaries of a waiver or extension of the statutory limitations period with respect to Tax Returns for which the Seller is responsible pursuant to Section 7.09(c)(i), unless the Seller consents to such waiver or extension, such consent not to be unreasonably withheld;

(III)

an amendment or re-filing of any Tax Returns for which the Seller is responsible pursuant to Section 7.09(c)(i) by the Buyer or C Israel or any of their Subsidiaries, taken by the Buyer or C Israel or any of their Subsidiaries for which has the effect of shifting income, deductions, credits, exemptions or set-offs from a Pre-Closing Tax Period to a Post-Closing Tax Period, unless the Seller consents to such amendment or re-filing, such consent not to be unreasonably withheld;

(IV)

material failure by the Buyer or C Israel or any of their Subsidiaries to reasonably comply with Section 7.09(c)(iii) to the extent Seller is materially damaged or prejudiced in respect of the Tax Proceeding as a result of such failure; or

(V)

Taxes imposed on Buyer as a result of a receipt of payment of any amount payable under this Section 7.09(c)(ii).

(iii)

Tax Proceedings.  After the Closing Date, in the case of any audit, examination, claim or other proceeding ("Tax Proceeding") with respect to Taxes of C Israel attributable to a Pre-Closing Tax Period, Buyer shall promptly inform Sellers of such Tax Proceeding, and shall afford Sellers, at Sellers' expense, the opportunity to control the conduct of such Tax Proceedings and initiate any objection, appeal or any claim for refund, file any amended return or take any other action which Sellers deems appropriate with respect to such Taxes.  Upon Seller’s request, at Sellers' expense, Buyer, C Israel and their Subsidiaries (1) will fully cooperate with Sellers in connection with any Tax Proceeding; (2) furnish the Sellers with copies of the correspondence received from any Taxing authority in connection with such Tax Proceeding; (3) provide Seller cop ies of C Israel's Tax Returns or C Israel's Tax related records, books, contracts, accounts, supporting working papers, memoranda, correspondence, supporting schedules, forms, assessments, reassessments or any other similar document, whether in written or electronic form, that Seller considers relevant to the Tax Proceeding (the "Tax Records"), provided, however, that Buyer shall not be obligated to provide any Tax Records or Tax Returns relating to income Taxes of Buyers, income Taxes of C Israel for Post-Closing Tax Periods or that are subject to attorney-client privilege, and in the case of any other Tax Returns or Tax Records not related solely to the Tax Proceedings, only those portions of such Tax Returns or Tax Records related, as determined in the sole discretion of Buyer, to the Tax Proceedings, where any portion of such Tax Return or Tax Records not so related, as determined in the sole discretion of the Buyer, shall be redacted by the Buyer before access is provided.  Seller, at Seller's expense, (or its authorized representatives) may reasonably visit, during normal business hours, Buyer’s or C Israel’s or their Subsidiaries’ offices (or any place where the Tax Records are kept) to review or copy the Tax Records, provided that Seller notifies Buyer of its intention to do so ten (10) days’ prior to such visit.  Buyer and C Israel and their Subsidiaries shall reasonably cooperate with Seller and its authorized representatives, at Seller's expense, for Seller’s review of the Tax Records (provided such cooperation does not disrupt the conduct of Buyer’s or C Israel’s or their Subsidiaries’ business).  Buyer shall execute or cause to be executed powers of attorney or other documents necessary to enable Sellers to control such Tax Proceeding.  Buyer shall be entitled to attend the Tax Proceeding and shall be entitled to take part in all discussions and meetings with relevant governmental authority and shall be entitled to participate in any such Tax Proceeding which Seller has elected to control and shall be kept fully and timely informed by Sellers of all developments and communications.  Seller shall not dispose of such Tax Proceeding without obtaining the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. Any Tax Proceeding with respect to Taxes of C Israel for a Straddle Period shall be controlled by Buyer.

(d)

Tax Records.  Buyer shall, at its own expense, preserve and keep the records in its possession or the possession of any Affiliate of Buyer relating to the preparation of any Tax Return including the Purchased C Assets or the Transferred C Businesses for any period ending on or prior to the Initial Closing Date and such records as Company may reasonably require for the defense of any audit, examination, administrative appeal or litigation of any such Tax Return for a period of six (6) years from the Initial Closing Date and shall make such records available to Company as may be reasonably required by Company.  In the event Buyer wishes to destroy such records after that time, Buyer shall first give thirty (30) days prior written notice to Company and Company shall have the right at its option and expense, upon prior written notice given to Buyer within that thirty (30)-day period, to take possession of the records within twenty (20) days after the date of such notice.  Company shall, at its own expense, preserve and keep the records in its possession or the possession of an Affiliate of Company relating to the preparation of any Tax Return including the Purchased C Assets or the Transferred C Businesses for any period commencing after the Initial Closing Date and such records as Buyer may reasonably require for the defense of any audit, examination, administrative appeal or litigation of any such Tax Return for a period of six (6) years from the Initial Closing Date and shall make such records available to Buyer as may be reasonably required by Buyer.  In the event Company wishes to destroy such records after that time, Company shall first give thirty (30)-days prior written notice to Buyer and Buyer shall have the right at its option and expense, upon prior written notice given to Company within that ninety (90)-day period, to take posses sion of the records within twenty (20) days after the date of such notice.  Company and Buyer shall make available to each other such records that are in their possession or in the possession of their Affiliates as the other may require for the preparation of any Tax Returns or other similar reports or forms required to be filed by such Person and such records as such Person may require for the defense of any audit, examination, administrative appeal or litigation of any such Tax Return or other similar report or form.

(e)

Notwithstanding anything to the contrary contained in this Agreement, if Company fails to provide Buyer with the FIRPTA Certificate and Buyer elects to proceed with the Initial Closing, Buyer shall be entitled to withhold from the amount realized by Seller the amount required to be withheld pursuant to Section 1445 of the Code.

(f)

Treatment of Payments Pursuant to this Agreement.  The parties agree that any adjustment to the Initial Purchase Price and any indemnity payment made pursuant to this Agreement, will be treated for Tax purposes as an adjustment to the purchase price of the Purchased C Assets and the Transferred C Businesses, unless otherwise prohibited by applicable Law.

(g)

Proper Withholding.  

(i)

General.  Company and Buyer will, and company shall force C Israel to, comply with all applicable Laws relating to the payment and withholding of all Taxes, including Taxes imposed in respect of payments made pursuant to this Agreement.

(ii)

C Israel Shares.  Buyer shall be entitled, with respect to payments made by Buyer to Seller for the C Israel Shares, to deduct and withhold from any such payment pursuant to this Agreement such amounts as Buyer reasonably determines it may be required to deduct and withhold with respect to the making of any payment pursuant to this Agreement under the Israeli Tax Code, as amended, and by rules and regulations promulgated thereunder, provided, however, that in the event the Seller provides the Buyer with a valid approval or ruling issued by the applicable Tax authority regarding the withholding (or exemption from withholding) of Israeli Tax from such payment in a form reasonably satisfactory to Buyer, then the deduction and withholding of any amounts shall be made only in accordance with the provisions of such approval. To the extent that amounts are so withh eld by Buyer such withheld amounts (i) shall be remitted by Buyer or C Israel to the applicable Tax authority, and (ii) shall be treated for all purposes of this Agreement as having been paid to Seller.

Section 5.10

Reservation of Stock

.  Buyer Parent shall at all times reserve and keep available, solely for issuance and delivery upon exercise of the Warrant, the number of Buyer Parent Shares from time to time issuable upon exercise of the Warrant.

Section 5.11

Cooperation

.

(a)

Legal Proceedings.  Buyer and Sellers agree to use commercially reasonable efforts to assist one another in connection with defending all Legal Proceedings (i) challenging this Agreement or the consummation of the transactions contemplated hereby or (ii) relating to the conduct of the Transferred C Businesses prior to the Initial Closing Date, including any Legal Proceedings comprising or arising from known Excluded C Liabilities.  Without limiting the foregoing, Buyer and Sellers shall use their best efforts to cause to be lifted or rescinded any injunction or restraining Order or other Order adversely affecting the ability of the parties to consummate the transactions contemplated hereby.  In connection with the foregoing, Buyer and Sellers shall make available any personnel and Books and Records that the defending party may reasonably re quest.  The party rendering such assistance shall be reimbursed for its out-of-pocket costs and expenses in connection with such assistance by the party requesting such assistance.

(b)

Accounting.  Buyer and Sellers agree to use commercially reasonable efforts, including making available any applicable personnel and Books and Records, to assist each other in connection with applicable financial, accounting and Tax reporting requirements with respect to the conduct of the Transferred C Businesses prior to the Initial Closing Date.  

(c)

Regulatory.  Subject to the terms of the Transition Services Agreement, Buyer and Sellers agree to use commercially reasonable efforts, including making available any applicable personnel and Books and Records, to assist one another in connection with complying with applicable regulatory reporting, filing and other requirements with respect to the conduct of the Transferred C Businesses prior to the Initial Closing Date.

(d)

Employee Cooperation.  In furtherance of the foregoing provisions of this Section 7.11, Buyer agrees that it will use commercially reasonable efforts to cause all Transferred C Employees to reasonably cooperate with the efforts contemplated by such provisions.  Without limiting the foregoing, Buyer shall use commercially reasonable efforts to cause all Transferred C Employees to enter into separation agreements upon termination of their employment which require such employee to cooperate with the Buyer in connection with any of the matters provided for in this Section 7.11.

(e)

Preservation of Privilege.  Anything to the contrary notwithstanding, as a precondition to the provision of access to any Books and Records as contemplated by this Section 7.11, the parties shall, and shall cause their applicable Affiliates to, take such reasonable actions as may be necessary to preserve any claim of attorney-client or similar privilege applicable to such Books and Records, including entering into customary joint defense agreements where appropriate.  A party's obligation to make available Books and Records hereunder shall be limited to the extent that any such privilege can not be protected to such party's reasonable satisfaction.

Section 5.12

No Solicitation

.

(a)

Each Seller agrees that from the Initial Closing Date and for a period of three (3) years after the Initial Closing Date, without the prior written consent of Buyer, it shall not, and shall cause its Affiliates not to, directly or indirectly or through any Subsidiary or intermediary, solicit, induce or encourage any Transferred C Employees who accept employment with Buyer or any Buyer employee transferred to the OIB Division, to terminate such Person's employment relationship with Buyer; provided that the foregoing shall not apply to (i) general solicitations through general advertising, general internet postings or other similar non-targeted advertising by Sellers or their Affiliates or (ii) solicitations conducted by an entity that is acquired by or merged with any Seller or any of their Affiliates so long as such solicitations were conducted prior to t he date of such acquisition or merger.

(b)

With respect to any potential or actual customer or client of the Transferred C Businesses (each, an "Applicable Client") to whom Transferred C Front Office Employee(s) have, prior to the Initial Closing Date or the applicable Subsequent Closing Date, affirmatively offered (e.g., "pitched") investment banking or M&A advisory services in respect of a particular transaction or contemplated transaction (each, an "Applicable Transaction") each Seller agrees that after the Initial Closing Date or the applicable Subsequent Closing Date, as the case may be, without the prior written consent of Buyer, it shall not, and shall cause its Affiliates not to, solicit, induce or encourage any such Applicable Client to engage Sellers or any of their Affiliates with respect to such services offered to such Applicable Client by the Transferred C Businesses in respect of the Applicable Transaction; provided that the foregoing shall not apply to (i) any Applicable Transaction for which, within the ninety (90) days following the date of the relevant pitch, the Transferred C Front Office Employee(s) have yet to be engaged, (ii) general, non-targeted advertising by Buyer Parent or Buyer or their Affiliates or (iii) solicitations conducted by an entity that is acquired by or merged with Buyer Parent, Buyer or its Affiliates so long as such solicitations were conducted prior to the date of such acquisition or merger, or (iv) any services from information derived from Buyer's equity research other than M&A advisory or investment banking services.

Section 5.13

Absence of Other Restrictive Covenants

.  The parties hereto agree that other than as expressly stated in Section 7.12, nothing contained herein or in any of the Ancillary Agreements shall constitute or be construed to imply any restriction or limitation on the parties or their Affiliates' business activities.

Section 5.14

Use of Name

.  Buyer agrees that it shall as soon as practicable after the Initial Closing Date and in any event within six (6) months following the Initial Closing Date, cease all use of Sellers' names, service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related there to or containing or comprising the foregoing, including any name or mark confusingly similar thereto, including any name incorporating "CIBC," "Canadian Imperial Bank of Commerce" or "World Markets" (collectively, the "Seller Marks") in connection with any goods or services.  In furtherance thereof, as promptly as practicable but in no event later than six (6) months following the Initial Closing Date, Buyer shall remove, strike over or otherwise obliterate all Seller Marks from all materials owned by Buyer, including, without limitation, business ca rds, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, computer software and other materials, or, to the extent such actions are not reasonably practicable, cease the public use of such materials.  Notwithstanding anything herein to the contrary, Buyer and its Affiliates shall not transmit to any third party any Promotional Materials unless it removes, redacts or otherwise obscures the Seller Marks appearing upon such material.  As soon as practicable after the Subsequent Closing applicable to the C Israel Shares, Buyer Parent shall cause the name of C Israel to be changed, legally and in all other respects, to a name that does not incorporate any of the Seller Marks.

Section 5.15

Account Conversion and Technology Migration

.

(a)

Subject to the terms of the Software License and IT Services Agreement and the Clearing Agreement, each of the trading, clearing and other technical functions (each, a "Function") of the Transferred C Businesses (other than the execution and clearing of Canadian trades) will be transitioned from the Company's network and platform to the OIB Division's network and platform in stages (each such stage, an "IT Migration").  IT Migration has two sub-categories, namely: Clearing-Dependent IT Migration and Non-Clearing IT Migration.  After the Initial Closing Date, Buyer shall use commercially reasonable efforts to prepare for and facilitate the IT Migration of each Function as soon as practicable and in accordance with the procedures set forth in this Section, and in any event, all IT Migrations must be completed before the end of the IT Services Period.

(b)

Subject to Section 2.07, all DVP/RVP Transferred Accounts shall be transferred to the OIB Division at the same time as the completion of all Clearing-Dependent IT Migrations for such DVP/RVP Transferred Accounts.  Upon completion of such Clearing-Dependent IT Migrations the OIB Division shall accept and perform applicable trading services in respect of such DVP/RVP Transferred Accounts and Sellers shall have no further clearing responsibilities for such DVP/RVP Transferred Accounts.  For the avoidance of doubt, there are no Clearing-Dependent IT Migrations related to execution and clearing of Canadian trades.

(c)

Subject to Section 2.07, all Transferred Accounts comprising the Transferred Business of C Israel, and all other Transferred Accounts other than the DVP/RVP Transferred Accounts contemplated by Section 7.15(b) shall be transferred to the OIB Division in accordance with the procedures to be set forth in an Account Conversion Memorandum of Understanding (the "Account Conversion MOU") to be agreed upon in good faith by Buyer and the Company as soon as practicable after the date hereof and in any event prior to the Initial Closing Date.  Such Account Conversion MOU shall provide for the conversion and transfer to Buyer of the accounts covered thereby and all related Clearing-Dependent IT Migrations by no later than May 20, 2008.  Each of the Company and Buyer shall act in good faith to ensure that the conversion and transfer of the accounts subject to the Account Convers ion MOU and all related Clearing-Dependent IT Migrations occur pursuant to the terms set forth in the Account Conversion MOU and in a manner consistent with this Agreement, subject to any modification of such procedures as may be mutually agreed from time to time by Buyer and the Company.

(d)

Non-Clearing IT Migrations shall be completed by the dates mutually agreed upon by the Parties.  From time to time Buyer shall notify the Company in writing (a "IT Migration Notice") that it desires to effect the Non-Clearing IT Migration of one or more Functions following such IT Migration Notice.  After receipt of a IT Migration Notice from Buyer, the Company shall use commercially reasonable efforts to effect the IT Migration(s) specified in such IT Migration Notice within thirty (30) days following the date of the IT Migration Notice or as soon as practicable following the date specified in such IT Migration Notice, whichever is later.  All IT Migrations shall be completed prior to the end of the IT Services Period as defined by the Software License and IT Services Agreement.  Anything to the contrary notwithstanding, Buyer shall take all such actions as may be required of Buyer to facilitate all necessary Non-Clearing IT Migrations on or before the one (1)-year anniversary of the Initial Closing Date and shall deliver IT Migration Notices in respect of all such IT Migrations to the Company not later than the date that is thirty (30) days prior to the one (1)-year anniversary of the Initial Closing Date.

Section 5.16

[Intentionally Omitted]

Section 5.17

Financing Transactions

.  

(a)

As promptly as practicable following the date of this Agreement, the parties shall, and shall cause their applicable Affiliates, to negotiate in good faith to reach agreement on mutually agreed final forms of: (i) a Loan Trading Facility Agreement and related documentation between, among others, the Company and the applicable Loan Entity to provide funding support for loan trading activities (such agreement and related documentation, the "Loan Trading Facility Agreement"), which Loan Trading Facility Agreement shall be in accordance with the terms set forth on Exhibit H hereto and otherwise consistent with market terms and practices (taking into consideration, in each case, the nature of the transactions contemplated thereby); and (ii) a Warehouse Facility Agreement and related documentation between, among others, the Company and the appl icable Loan Entity for a warehouse loan facility provided by the Company or C Bank to the applicable Loan Entity (such agreement and related documentation, the "Warehouse Facility Agreement"), which Warehouse Facility Agreement shall be in accordance with the terms set forth on Exhibit J hereto and otherwise consistent with market terms and practices (taking into consideration in each case, the nature of the transactions contemplated thereby).

(b)

Seller Parent shall, and shall cause its applicable Affiliates to, use commercially reasonable efforts to negotiate and implement the MS Facility, as amended, as promptly as practicable following the date of this Agreement.  Seller Parent shall consult with Buyer Parent with respect to, and keep Buyer Parent apprised of the status of, such efforts, shall share with Buyer Parent successive drafts of such MS Facility, as amended, and shall consider in good faith any comments or views with respect to any proposed terms of the MS Facility, as amended, and Buyer Parent shall provide such cooperation with respect thereto as may be reasonably requested by Buyer Parent.  Buyer Parent shall furnish final versions of such MS Facility, as amended, promptly upon completion thereof.

Section 5.18

Transfer of Employee Permits

.  As soon as practicable after the date hereof the Initial Closing Date, Buyer and the Company shall use their respective reasonable best efforts to prepare and file a requisite application and other applicable documentation with the Central Registration Depository of FINRA for the purpose of transferring, as of January 2, 2008 (or such later date, as applicable, pursuant to the provisions of Section 2.09) and subject to the Initial Closing, those registrations of the Transferred C Front Office Employees that are within the purview of the CRD from the Company to Buyer.

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF SELLER

Section 6.1

Conditions

.  The obligations of Sellers to consummate the Initial Closing are subject to the fulfillment at or prior to the Initial Closing Date of each of the following conditions (any or all of which may be waived in whole or in part by Seller Parent):

(a)

Performance.  Buyer and Buyer Parent shall have performed and complied, in all material respects, with all agreements, obligations and covenants under Sections 7.02, 7.03, 7.04, 7.05, 7.06, 7.07, 7.11 and 7.17 required by this Agreement to be so performed or complied with by Buyer and Buyer Parent at or prior to the Initial Closing and the Company shall have received a certificate signed by an authorized officer of Buyer and Buyer Parent to such effect.

(b)

No Violation of Orders, Injunctions, Etc.  No preliminary or permanent injunction or other order issued by any Governmental Entity, no statute, rule or regulation, promulgated or enacted by any Governmental Entity and no judgment, order, injunction or decree issued by a court of competent jurisdiction that prevents, restrains or prohibits the consummation of the transactions contemplated by this Agreement in any material respect shall be in effect.

(c)

Required Approvals.  The parties hereto shall have received the Required Approvals.

ARTICLE VII

CONDITIONS TO OBLIGATIONS OF BUYER

Section 7.1

Conditions.  

The obligations of Buyer and Buyer Parent to consummate the Initial Closing are subject to the fulfillment at or prior to the Initial Closing of each of the following conditions (any or all of which may be waived in whole or in part by Buyer or Buyer Parent):

(a)

Performance.  Sellers shall have performed and complied, in all material respects, with all of Seller’s agreements, obligations and covenants under Sections 7.01, 7.03, 7.04, 7.05, 7.06, 7.07, 7.11 and 7.17 required by this Agreement to be so performed or complied with by Sellers at or prior to the Initial Closing and Buyer shall have received a certificated signed by an authorized officer of the company and Seller Parent to such effect.

(b)

No Violation of Orders, Injunctions, Etc.  No preliminary or permanent injunction or other order issued by any Governmental Entity, no statute, rule or regulation, promulgated or enacted by any Governmental Entity and no judgment, order, injunction or decree issued by a court of competent jurisdiction that prevents, restrains or prohibits the material consummation of the transactions contemplated by this Agreement shall be in effect.

(c)

Required Approvals.  The parties hereto shall have received the Required Approvals.

(d)

Financing.  

(i)

Seller will have executed and delivered the Subordinated Term Loan Facility Agreement and will fund thereunder, subject only to Buyer’s execution and delivery of the Subordinated Term Loan Facility Agreement substantially in the form set forth on Exhibit H hereto, and Buyer's performance of its obligations, agreements and conditions described therein, in each case, that relate to actions, conditions or circumstances that (x) are solely within Buyer's or Buyer Parent's control and (y) are not subject to the satisfaction of any other Person.

(ii)

 Either (A) the MS Facility shall have been amended so as to permit this Agreement and the agreements, financings and transactions contemplated hereby in accordance with Section 7.17 or (B) Seller will have executed and delivered the definitive credit facilities described in the Senior Credit Commitment Letter and will fund thereunder, subject only to Buyer’s execution and delivery of such credit facilities, and Buyer's performance of its obligations, agreements and conditions described in the Senior Credit Commitment Letter, in each case, that relate to actions, conditions or circumstances that (x) are solely within Buyer's or Buyer Parent's control and (y) are not subject to the satisfaction of any other Person.

ARTICLE VIII

CONDITIONS TO SUBSEQUENT CLOSINGS

Section 8.1

Buyer and Buyer Parent Conditions

.  The obligations of Buyer and the applicable Designated Buyer Affiliates to consummate the Subsequent Closings are subject to the fulfillment at or prior to the Subsequent Closing of each of the following conditions (any or all of which may be waived in whole or in part by Buyer or Buyer Parent):

(a)

The Initial Closing shall have occurred.

(b)

As applicable, the following shall have occurred (in each case, the "Specified Condition"):

(i)

In the case of the Subsequent Closing pertaining to the transfer of the C Israel Shares, Buyer or its applicable Buyer Designated Affiliate shall have received any and all Authorizations necessary for Buyer or such Designated Buyer Affiliate to own the C Israel Shares and conduct the business thereof, or in connection with the change of control of C Israel resulting from Buyer's or such Designated Buyer Affiliate's acquisition of the C Israel Shares;

(ii)

In the case of the Subsequent Closing pertaining to the transfer of the Transferred C UK Assets and Liabilities, Buyer or its applicable Designated Buyer Affiliate shall have received any and all Authorizations necessary for Buyer or such Designated Buyer Affiliate to conduct the elements of the Transferred C Businesses carried out by the Transferred C Front Office Employees based in the United Kingdom in substantially the same manner as such activities are currently conducted; and

(iii)

In the case of each Subsequent Closing pertaining to the transfer of the Transferred C HK/Asia Assets and Liabilities, Buyer or its applicable Designated Buyer Affiliate shall have received any and all Authorizations necessary for Buyer or such Designated Buyer Affiliate to conduct the elements of the Transferred C Businesses carried out by the Transferred C Front Office Employees based in each of Beijing, Hong Kong and Singapore, respectively, in substantially the same manner as such activities are currently conducted.

Section 8.2

Seller Conditions

.  The obligations of Sellers to consummate the Subsequent Closings are subject only to the condition that the Initial Closing shall have occurred.

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER

Section 9.1

Termination Prior to Initial Closing

.  Subject to Section 7.04, this Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Initial Closing solely:

(a)

by mutual written agreement of Buyer and Seller Parent; and

(b)

at any time after March 31, 2008 by either Buyer or Seller Parent, if the Initial Closing shall not have occurred; provided, however, that the right to terminate this Agreement under this Section 11.01 shall not be available to any party whose failure to fulfill (or whose affiliates failure to fulfill) any obligation under this Agreement shall have been the cause of, or shall have resulted in, in whole or in part, the failure of the Initial Closing to occur on or prior to such date.

Section 9.2

Procedure and Effect of Termination Prior to Initial Closing

.  In the event of the termination of this Agreement and the abandonment of the transactions contemplated hereby pursuant to Section 11.01(b), written notice thereof shall forthwith be given by the party so terminating to the other parties, and this Agreement shall terminate, and the transactions contemplated hereby shall be abandoned, without further action by Seller or Buyer.  The obligations provided for in this Section 11.02 and Section 12.01 and the confidentiality provision contained in Section 7.03 and the provisions of Article XIII shall survive any termination of this Agreement.

Section 9.3

Partial Termination after Initial Closing

.  If any of the Subsequent Closing contemplated by Section 2.09 has not been completed prior to the Subsequent Closing Outside Date (a "Failed Subsequent Closing"), Seller Parent in its sole discretion may elect to terminate this Agreement solely insofar as it pertains to such Failed Subsequent Closing and the Subsequent Closing Assets and Liabilities, subject to such Failed Subsequent Closing and release the parties from their respective obligations to complete such Failed Subsequent Closing, and abandon the transactions contemplated with respect thereto.

Section 9.4

Procedure and Effect of Partial Termination after Initial Closing

.  In the event Seller Parent makes an election pursuant to Section 11.03, written notice thereof shall forthwith be given by Seller Parent to Buyer, and the obligations of the parties in relation to the applicable Failed Subsequent Closing hereunder shall terminate and the transactions contemplated hereby shall be abandoned, without further action by the parties.  For the avoidance of doubt Seller's termination right under Section 11.03 is strictly limited to the transactions contemplated in Section 2.09 and shall in no way affect the terms and conditions of this Agreement insofar as to pertain to any matter other than the Subsequent Closing Assets and Liabilities subject to the Failed Subsequent Closing.  The obligations provided for in this Section 11.04 and Section 12.01, the confidentiality provision contained in Section 7.03 and the provisions of Article XIII shall survive any partial termination of this Agreement.

Section 9.5

Other Remedies

.  In no event shall termination of this Agreement limit or restrict the rights and remedies of any party hereto against any other party which has breached the terms of this Agreement prior to termination hereof.

ARTICLE X

FEES AND EXPENSES: SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

Section 10.1

Fees and Expenses

.  Except as otherwise provided in this Agreement, whether or not the transactions contemplated hereby are consummated pursuant hereto, Sellers, on the one hand, and Buyer on the other hand, shall pay all fees and expenses incurred by such Person or on such Person's behalf in connection with or in anticipation of this Agreement and the consummation of the transactions contemplated hereby.

Section 10.2

Survival of Representations

.  The representations and warranties in this Agreement and in any other document delivered in connection herewith shall survive the Initial Closing for three (3) years regardless of any investigation made by or on behalf of any party hereto; provided that (i) the representations made in Sections 5.01 (Organization; Authority), 5.02 (No Violation; Consents and Approvals), 5.05 (Title to Assets), 6.01 (Organization; Authority) and 6.02 (No Violation; Consents and Approvals) shall survive indefinitely and (ii) the representations made in Section 5.13 (Taxes) shall survive for ninety (90) days following the applicable statute of limitations.

Section 10.3

Sellers' Agreement to Indemnify

.  Upon the terms and subject to the conditions of this Article XII, Seller Parent and Company agree, jointly and severally, to indemnify, defend and hold harmless Buyer Parent, Buyer, their Affiliates and their respective directors, officers, employees and representatives (collectively, "Buyer Indemnitees"), at any time and from time to time after the Initial Closing, from and against all demands, claims, actions or causes of action, assessments, losses, damages, Liabilities, costs and expenses, including interest, penalties and reasonable attorneys' fees and expenses (collectively, "Damages"), asserted against, resulting to, imposed upon or incurred by Buyer Indemnitees, directly or indirectly, by reason of, resulting from, arising out of or relating to: (a) any of the Excluded C Liabilities; (b) any breach of any representation or warranty of Seller or the Company contained in or made pursuant to this Agreement or any Seller Related Instrument (which for purposes of this Article XII shall not include the Excepted Ancillary Agreements, it being the intent of the parties that the representations, warranties, covenants and other agreements contained in such Excepted Ancillary Agreements be independent of this Agreement for purposes of this Article XII) or any facts or circumstances constituting such a breach (disregarding for the purpose of quantifying any such Damages, all qualifications therein with respect to materiality or Material Adverse Effect, except for Section 5.04); (c) any breach of any covenant or agreement of Sellers or Company contained in or made pursuant to this Agreement or any Seller Related Instrument or any facts or circumstances constituting such breach; (d) any of the Excluded C Assets; (e) any failure by Seller to comply with any "bulk sales" laws applicable to the transactions contemplated hereby; (f) th e business of C Israel, to the extent arising out of any event, circumstance or condition occurring or existing prior to the Initial Closing Date, including any violation of applicable Law resulting from the C Israel Loan Repayment; or (g) any of the 300 Madison Liabilities (the items referred to in clauses (a) through (f) being collectively referred to herein as the "Buyer Claims").  No indemnification payment required to be made pursuant to this Section 12.03 shall be subject to any right of setoff, counterclaim, defense, abatement, suspension, deferment or reduction on an unrelated claim.

Section 10.4

Sellers' Limitation of Liability

.  

(a)

Sellers shall have no obligation to indemnify the Buyer Indemnitees for any Buyer Claims pursuant to Section 12.03(b) until the Buyer Indemnitees have suffered Damages in excess of $500,000 in the aggregate with all other Buyer Claims pursuant to Section 12.03(b) at which point Sellers and the Company shall be obligated to indemnify the Buyer Indemnitees for all Damages which exceed $500,000; provided, however, that such limitation shall not apply to the penultimate sentence of Section 5.10(d), Section 5.12 and Sections 5.16(a) and (e).

(b)

Anything in this Agreement to the contrary notwithstanding, the liability of Seller Parent and the Company to indemnify Buyer Indemnitees pursuant to Section 12.03(b) against any Damages sustained by reason of any breach of any representation or warranty of Seller Parent or Company shall be limited to Buyer Claims as to which any of the Buyer Indemnitees has given Seller written notice thereof on or prior to the date, if any, on which survival of such representation or warranty terminates pursuant to Section 12.02, whether or not any Damages have then actually been sustained.

(c)

Anything to the contrary in this Agreement notwithstanding, the liability of Seller Parent and the Company to indemnify Buyer Indemnitees pursuant to Section 12.03(b) shall not exceed $150,000,000.

(d)

For the avoidance of doubt, the foregoing provisions of this Section 12.04 shall not limit or restrict any claim or right of the Buyer Indemnities to indemnification by Sellers Parent and the Company pursuant to any section or provision of this Agreement other than Section 12.03(b), even if the facts or circumstances underlying such claim or right also constitute a breach of a representation or warranty of Sellers hereunder.

Section 10.5

Buyer Parent's and Buyer's Agreement to Indemnify

.  Upon the terms and subject to the conditions of this Article XII, Buyer Parent and Buyer agree, jointly and severally, to indemnify, defend and hold harmless Sellers, their Affiliates and their directors, officers, employees and representatives (collectively, the "Seller Indemnitees") at any time and from time to time after the Initial Closing, from and against all Damages asserted against, resulting to, imposed upon or incurred by Seller Indemnitees, directly or indirectly, by reason of, resulting from, arising out of or relating to: (a) the Assumed C Liabilities; (b) breach of any representation or warranty of Buyer or Buyer Parent contained in or made pursuant to this Agreement or any Buyer Related Instrument (which for purposes of this Article XII shall not include the Excepted Ancillary Agreements, it being the intent of the parties that the representations, warranties, covenants and other agreements contained in such Excepted Ancillary Agreements be independent of this Agreement for purposes of this Article XII) or any facts or circumstances constituting such a breach (disregarding for the purpose of quantifying any such Damages, all qualifications therein with respect to materiality or material adverse effect); (c) breach of any covenant or agreement of Buyer or Buyer Parent contained in or made pursuant to this Agreement or any Buyer Related Instrument or any facts or circumstances constituting such a breach; or (d) the C Israel Support Arrangements (the items referred to in clauses (a) through (d) being collectively referred to herein as the "Seller Claims").  No indemnification payment required to be made pursuant to this Section 12.05 shall be subject to any right of setoff, counterclaim, defense, abatement, suspension, deferment or reduction on an unrelated claim.

Section 10.6

Buyer Parent's and Buyer's Limitation of Liability

.  

(a)

Buyer and Buyer Parent shall have no obligation to indemnify the Seller Indemnitees for any Seller Claims in respect of Section 12.05(b) until the Seller Indemnitees have suffered Damages in excess of $500,000 in the aggregate with all other Seller Claims pursuant to Section 12.05(b) at which point Buyer and Buyer Parent shall be obligated to indemnify the Seller Indemnitees for all Damages which exceed $500,000; provided, however, that such limitation shall not apply to Section 6.04.

(b)

Anything in this Agreement to the contrary notwithstanding, the liability of Buyer Parent and Buyer to indemnify Seller Indemnitees pursuant to Section 12.05(b) against any Damages sustained by reason of any Buyer Claim thereunder for a breach of any representation or warranty of Buyer Parent or Buyer shall be limited to Buyer Claims as to which any of Seller Indemnitees has given Buyer Parent or Buyer written notice thereof on or prior to the date, if any, on which survival of such representation or warranty terminates pursuant to Section 12.02, whether or not any Damages have then actually been sustained.

(c)

Anything to the contrary in this Agreement notwithstanding, the liability of Buyer Parent and Buyer to indemnify Seller Indemnitees pursuant to clauses Section 12.05(b) shall not exceed $150,000,000.

(d)

For the avoidance of doubt, the foregoing provisions of this Section 12.06 shall not limit or restrict any claim or right of the Seller Indemnities to indemnification by Buyer and Buyer Parent pursuant to any section or provision of this Agreement other than Section 12.05(b), even if the facts or circumstances underlying such claim or right also constitute a breach of a representation or warranty of Buyer Parent and Buyer hereunder.

Section 10.7

Third Party Claims

.  The obligations and liabilities of Sellers, Buyer Parent and Buyer with respect to Buyer Claims or Seller Claims (collectively, "Claims") involving Liabilities asserted by third parties shall be subject to the following terms and conditions and procedures:

(a)

The indemnified party shall give the indemnifying party prompt notice of any such Claim, including reasonable details of all facts, circumstances and amounts pertaining thereto known to the indemnified party, and the indemnifying party shall have the right to undertake the defense thereof by representatives chosen by it.

(b)

If the indemnifying party, within a reasonable time after notice of any such Claim, fails to assume the defense of such Claim, the indemnified party shall (upon further notice to the indemnifying party) have the right to undertake the defense, compromise or settlement of such Claim on behalf of and for the account and risk of the indemnifying party subject to the right of the indemnifying party to assume the defense of such Claim at any time prior to settlement, compromise or final determination thereof.

(c)

Anything in this Article XII to the contrary notwithstanding, (i) if there is a reasonable probability that a Claim may materially and adversely affect the indemnified party other than as a result of money damages or other money payments, the indemnified party shall have the right, at its own cost and expense, to defend, compromise or settle such Claim, and (ii) the indemnifying party shall not, without the written consent of the indemnified party, settle or compromise any Claim or consent to the entry of any judgment in any manner that admits wrongdoing or any violation of Law or which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party a release from all liability in respect to such Claim.

(d)

Cooperation.  If requested by the indemnifying party, the indemnified Person shall cooperate with the indemnifying party and its counsel in contesting any Claim which the indemnifying party elects to contest or, if appropriate, in making any counterclaim against the Person asserting the Claim or any cross-complaint against any Person and further agrees to take such other action as reasonably may be requested by an indemnifying party to reduce or eliminate any loss or expense for which the indemnifying party would have responsibility, but the indemnifying party shall reimburse the indemnified Person for any expenses incurred by it in so cooperating or acting at the request of the indemnifying party.

Section 10.8

Other Claims

.  The obligations and liabilities of Sellers, Buyer Parent and Buyer with respect to Claims not involving Liabilities asserted by a third party shall be subject to the following terms and conditions and procedures:

(a)

The indemnified party shall give the indemnifying party prompt notice of any such Claim, including a reasonably detailed description of the facts, circumstances and amounts pertaining thereto, and shall provide all supporting documentation relation thereto as the indemnifying party shall reasonably request in relation to such Claim.

(b)

Any dispute as to the amount existence of any such Claim, the amount thereof, or the indemnified party's right to indemnification with respect thereto pursuant to this Article XII shall be determined and settled by arbitration in New York, New York, pursuant to the Commercial Rules of Arbitration then in effect of the American Arbitration Association.  Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in a court having competent jurisdiction.  The parties' respective costs and expenses, including attorney's fees incurred in any dispute which is determined and/or settled by arbitration pursuant to this Section 12.08(b) shall be borne by the parties in inverse proportion to their success in such proceeding, as determined and awarded by the arbitrator(s).

Section 10.9

Other Indemnification Provisions

.  

(a)

The amount of Damages incurred by any indemnified party shall be reduced by and to the extent that such indemnified party shall have actually received proceeds under insurance policies, risk sharing pools, or similar arrangements specifically as a result of, and in compensation for, the subject matter of the Claim in respect of such Damages, net of any increased premiums resulting from or similar costs arising out of the making of such claims against such insurance or other arrangements.

(b)

For the avoidance of doubt, the determination of the amount of Damages sustained by any indemnified party in respect of any Claim shall not be reduced by Tax benefits, if any, resulting from or relating to such Claim.

(c)

The indemnification provided for in this Article XII shall be the sole and exclusive remedy for the breach of any representation, warranty, covenant or agreement contained in this Agreement or in respect of any Liabilities or Damages of the nature contemplated by Sections 12.03 or 12.05, as applicable, other than with respect to fraud.

(d)

In no event shall any amount paid or incurred by Buyer or Buyer Parent in respect of any indemnification obligation hereunder be deducted in any way from Gross Revenues, as an element of Operating Cost, or otherwise, for purposes of Section 3.03.

ARTICLE XI

MISCELLANEOUS

Section 11.1

Further Assurances

.  From time to time after the Initial Closing Date, at the request of the other party hereto and at the expense of the party so requesting, Seller and Buyer shall execute and deliver to such requesting party such documents and take such other action as such requesting party may reasonably request in order to consummate more effectively the transactions contemplated hereby.

Section 11.2

Notices

.  All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, by mail (certified or registered mail, return receipt requested) or by facsimile transmission (receipt of which is confirmed):

(a)

If to Buyer Parent or Buyer, to:

Oppenheimer Holdings Inc.
125 Broad Street
New York, New York  10004
Attention:  Dennis McNamara, Esq.
Telephone:  (212) 668-5771
Facsimile:  (212) 668-8081
Email:  dennis.mcnamara@opco.com

With a copy to:

Borden Ladner Gervais LLP
Scotia Plaza, Suite 4400
40 King Street West
Toronto, Ontario M5H 3Y4
CANADA
Attention:  A. Winn Oughtred, Esq.
Telephone:  (416) 367-6247
Facsimile:  (416) 361-7076
Email:  woughtred@blgcanada.com

and

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York  10036
Attention:  Patricia Moran, Esq.
Telephone:  (212) 735-3130
Facsimile:   (917) 777-3130
Email:  pmoran@skadden.com

(b)

If to any Seller, to:

Canadian Imperial Bank of Commerce
199 Bay Street, 11th Floor                                                                Commerce Court West
Toronto, Ontario M5L 1A2
CANADA
Attention:  Robert J. Richardson, Esq.
Telephone:  (416) 304-2788
Facsimile:  (416) 304-4573
Email:  robert.richardson@cibc.com

With a copy to:

Mayer Brown LLP
1675 Broadway
New York, New York  10019-5820
Attention:  James B. Carlson, Esq.
Telephone:  (212) 506-2515
Facsimile:   (212) 849-5515
Email:  jcarlson@mayerbrown.com

and

CIBC World Markets Corp.
425 Lexington Ave
3rd Floor
New York, New York  10017
Attention:  Michael Capatides, Esq.
Telephone:  (212) 667-8301
Facsimile:   (212) 667-8361
Email:  michael.capatides@us.cibc.com

or to such other Person or address as any party shall specify by notice in writing to the other party.  All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which so hand-delivered, on the third business day following the date on which so mailed and on the date on which faxed and confirmed, except for a notice of change of address, which shall be effective only upon receipt thereof.

Section 11.3

Bulk Sales Laws

.  Each party hereto hereby waives compliance by Buyer and Seller with the provisions of the "bulk sales," "bulk transfer" and similar Laws of any state.  Seller shall indemnify Buyer against all losses incurred by Buyer or any of its officers, directors or Affiliates as a result of such failure to comply.

Section 11.4

Mail Received After Closing

.  On and after the Initial Closing Date, Buyer may receive and open all mail addressed to Seller or its Subsidiaries and deal with the contents thereof in its discretion to the extent that such mail and the contents thereof relate to the Transferred C Businesses, the Purchased C Assets or any of the Assumed C Liabilities.

Section 11.5

Entire Agreement

.  This Agreement, the Buyer Disclosure Schedule, the Seller Disclosure Schedule, the Confidentiality Agreement, the Ancillary Agreements and the exhibits, schedules and other documents referred to herein which form a part hereof contain the entire understanding of the parties hereto with respect to their subject matter.  This Agreement supersedes all prior agreements and understandings, oral and written, with respect to its subject matter.

Section 11.6

Severability

.  Should any provision of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Agreement, which other provisions shall remain in full force and effect and the application of such invalid or unenforceable provision to Persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and be enforced to the fullest extent permitted by Law.

Section 11.7

Binding Effect; Assignment

.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, successors and permitted assigns.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, directly or indirectly but subject to Section 3.07(c), by (i) Buyer or Buyer Parent without the consent of the Company, except in accordance with Section 2.08 and (ii) Sellers, without the prior written consent of Buyer Parent, except that without the written consent of Buyer or Buyer Parent, any Seller may assign its rights, interests and obligations hereunder to any wholly-owned subsidiary of Seller Parent; provided that no assignment shall limit or affect the assignor's obligations hereunder.

Section 11.8

No Third-Party Beneficiaries

.  This Agreement is not intended and shall not be deemed to confer upon or give any Person except the parties hereto and their respective successors and permitted assigns any remedy, claim, liability, reimbursement, cause of action or other right under or by reason of this Agreement.

Section 11.9

Counterparts

.  This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 11.10

Headings

.  The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

Section 11.11

Governing Law; Jurisdiction

.  

(a)

This Agreement shall be construed, performed and enforced in accordance with, and governed by, the Laws of the State of New York, without giving effect to the principles of conflicts of laws thereof.

(b)

Except as provided in Section 12.08, each party irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County, and (ii) the United States District Court for the Southern District of New York, for the purposes of any Legal Proceeding arising out of this Agreement or any transaction contemplated hereby.  Each party agrees to commence any Legal Proceeding relating hereto either in the United States District Court for the Southern District of New York or if such Legal Proceeding may not be brought in such court for reasons of subject matter jurisdiction, in the Supreme Court of the State of New York, New York County.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any Legal Proceeding arising out of this Agreement or the transactions contemplated hereby in (A) the Supreme Court of the State of New York, New York County, or (B) the United Sates District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Legal Proceeding brought in any such court has been brought in an inconvenient forum.

Section 11.12

WAIVER OF JURY TRIAL

.  EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THE PARTIES ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH PARTY FURTHER WARRANTS AND REPRESENTS I T HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 11.13

Specific Performance

.  Each of the parties hereto acknowledges and agrees that in the event of any breach of this Agreement, each non-breaching party would be irreparably and immediately harmed and could not be made whole by monetary damages.  It is accordingly agreed that the parties hereto (a) will waive, in any Legal Proceeding for specific performance, the defense of adequacy of a remedy at law and (b) shall be entitled, in addition to any other remedy to which they may be entitled at Law or in equity, to compel specific performance of this Agreement in any Legal Proceeding instituted hereunder.

Section 11.14

Amendment, Modification and Waiver

.  This Agreement may be amended, modified or supplemented at any time by written agreement of the parties hereto.  Any failure of a party to comply with any term or provision of this Agreement may be waived by the other parties at any time by an instrument in writing signed by or on behalf of such other parties, but such waiver or failure to insist upon strict compliance with such term or provision shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure to comply.

Section 11.15

No Setoff

.  Notwithstanding anything to the contrary set forth in the Warehouse Facility Agreement, the Loan Trading Facility Agreement, the Subordinated Term Loan Facility Agreement or, if applicable, the Credit Facility, or any ancillary agreement, instrument or document with respect to any of the foregoing, no payments or other obligations owed to Buyer Parent, Buyer or any of their Affiliates under this Agreement shall be subject to any right of setoff, counterclaim, defense, abatement, suspension, deferment or reduction on an unrelated claim.

[SIGNATURE PAGE FOLLOWS]

-1-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

OPPENHEIMER HOLDINGS INC.


By:  
 Name: ______________________
Title: ______________________


OPPENHEIMER & CO. INC.


By:  
 Name: ______________________
Title: ______________________


CANADIAN IMPERIAL BANK OF COMMERCE


By:  
 Name: ______________________
Title: ______________________


CIBC WORLD MARKETS CORP.


By:  
 Name: _____________________
Title: _____________________


CIBC WORLD MARKETS PLC

By:  
 Name: _____________________
Title: _____________________

-2-

EX-10

EXHIBIT 10.10

EXECUTION COPY

Date:  January 14, 2008


Oppenheimer & Co. Inc.
125 Broad Street

New York, NY 10004

Gentlemen:

This will confirm our agreement (“Agreement”) under which we (“we”, “us”, “our” or “Clearing Firm”) shall act as clearing broker for the Accounts (defined below) introduced to us by you (“you”, “your” or “Introducing Firm”) on a fully disclosed basis as introducing broker during the transition period.  Accounts shall mean (a) Transferred Accounts and (b) any customer and proprietary accounts opened by or within the Transferred C Businesses during the term of this Agreement after the Closing Date for which you desire our clearing services (“New Accounts”).

For the purpose of the Securities Investors Protection Act (“SIPA”), and the financial responsibility rules of the Securities and Exchange Commission (“SEC”), any of your customers who own the Accounts (the “Customers”) shall be treated as customers of Clearing Firm and not of Introducing Firm and your Accounts shall be treated as proprietary accounts of an introducing broker (each, a “PAIB”).  Capitalized terms not defined herein shall have the meanings given to them in the Asset Purchase Agreement dated November 2, 2007, as amended and restated on January 14, 2008 (“Asset Purchase Agreement”), between the parties.  You and we further agree:

1.

Clearing Firm shall:

(a)

execute and/or clear and/or settle (hereafter referred to as “clear”, “clearing”, or other forms of the word “clear” as the context requires) transactions in securities on a fully disclosed basis for your PAIBs, if any, and the other Accounts, according to orders given to us by you;

(b)

monitor and request of Accounts (directly or through you as necessary) the following:

(i)

timely payment of obligations for purchases, interest and other charges,

(ii)

timely delivery of securities sold, and

(iii)

the maintenance of sufficient money and securities in Accounts required by Federal Reserve Board Regulation T and all other applicable laws, rules and regulations and additional requirements imposed by us, and buy-in or sell-out positions in Accounts who fail to comply with the foregoing;

(c)

extend credit for margin purchases in Accounts in accordance with applicable laws, rules and regulations and the Clearing Firm’s own credit policies and additional requirements;

(d)

be responsible for calculating margin requirements and initiating margin calls and shall be responsible for the administration of the rehypothecation and lending of securities in Accounts;

(e)

be responsible for handling and maintenance of funds and securities at any time that such funds and securities are in its possession as required under Rule 15c3-3 under the Securities Exchange Act of 1934 (“Exchange Act”);

(f)

be responsible for making inquiry, when applicable, as to the status of securities certificates in accordance with Exchange Act Rule 17f-1;

(g)

transfer securities to and from Accounts, provide for the custody, safeguarding and segregation of Customers’ money and securities left with us, including, without limitation, receipt and payment of dividends on securities, and arrange for the receipt and delivery of securities for exchange/tender offers, rights and warrants offerings, redemptions and other similar transactions according to your instructions;

(h)

maintain books and records required by applicable laws, rules and regulations regarding Accounts for brokers having custody of customer money and securities;

(i)

issue required confirmations, statements and notices (“Notices”) directly to Customers:

(i)

on forms, as may be modified, unless you reasonably object, to meet our operational, formatting and production requirements, which contain an appropriate legend reflecting our agreement with our service provider, Broadridge, with duplicates thereof to you; or

(ii)

at our option, we will prepare and send to Customers daily purchase and sale confirmations and monthly statements of accounts, which shall meet our requirements as to format and quality, and will send duplicates to you. Such confirmations and statements will indicate that the account was introduced by you.  Furthermore, all statements shall state that all customer funds and securities are located at Clearing Firm and shall furnish the name of a contact person or department at Clearing Firm with whom the customer may address inquiries;

(j)

secure and maintain licenses, registrations, permits, approvals and agreements required under applicable laws, rules and regulations for us to clear securities transactions or engage in any other transaction or business which is to be performed hereunder;

(k)

provide Introducing Firm such forms and documents as are necessary for Introducing Firm to open and maintain Accounts in such quantities as necessary;

(l)

remit to you on a weekly basis an amount equal to the fees earned on Customer Accounts less all accrued compensation due to us under Section 4(a) of this Agreement, with the balance due remitted to you by the 15th of the following calendar month net of other adjustments and offsets provided hereunder;

(m)

in order for Introducing Firm to treat PAIB assets as allowable assets in calculating its net capital, establish a separate reserve account and perform the PAIB calculation in accordance with the provisions, procedures and interpretations set forth in that certain no-action letter dated November 3, 1998 from the SEC Division of Market Regulation (as such letter may be modified, amended or supplanted by subsequent SEC guidance and/or rulemaking efforts related to Exchange Act Rules 15c3-1 and 15c3-3);

(n)

forward promptly any written Customer complaint received by us regarding you or your associated persons relating to functions and responsibilities allocated to you under this Agreement directly to you and to your designated examining authority under Section 17 of the Exchange Act, and, in such event, we will also notify the Customer in writing that we received such Customer’s complaint and forwarded it to you and the appropriate designated examining authority;

(o)

provide you the reports specified on Exhibit A to this Agreement, as the same may be amended from time to time, and will notify you annually of all such reports supplied in accordance with New York Stock Exchange (“NYSE”) Rule 382 and NASD Rule 3230;  

(p)

assist you in resolving any discrepancies or errors that may occur in the processing of transactions for Accounts; and

(q)

negotiate with you a separate agreement for the provision of reporting and related services with respect to the parties’ respective obligations under the Order Audit Trail System of the Financial Industry Regulatory Authority (“FINRA” f/k/a NASD).

2.

Limitations on Clearing Firm Responsibilities.

Our obligations under this Agreement, including Section 1 hereof, shall be conditioned on our receipt of proper documentation necessary under applicable laws and regulations to support the opening of accounts, including Accounts, on our books. You agree that we are not required to clear any transaction or otherwise perform any services (i) for the accounts of persons other than you and Customers, (ii) with respect to instruments, products and services not offered to Customers by us as of the effective date of the Asset Purchase Agreement, or (iii) related to any transaction or class of transaction not specifically referred to in this Agreement, without our consent and unless and until the terms and compensation for such accounts or transactions have been agreed upon in writing between you and us.

3.

Introducing Firm shall:

(a)

at or before the opening of New Accounts, at our request, provide us with your completed new account form and any other information or documentation that we may request related to the opening of such account, and inform us of any changes regarding such information;

(b)

to the extent not previously obtained by us with respect to any particular Transferred Account, secure from Customers all agreements, papers and documents reasonably required or requested by us to carry out any of our clearing functions, extend credit to Customers or engage in the borrowing or lending of Customers’ securities or other transactions which we may effect, on forms provided by us.  We may, without relieving you of your duties hereunder, secure such agreements and documents from Customers directly;

(c)

pay then-applicable exchange fees and clearing charges for securities transactions we clear hereunder;

(d)

with respect to New Accounts, be solely and exclusively responsible for compliance with all applicable Customer suitability, “know your customer” and similar requirements created or imposed under NYSE Rule 405 and other applicable laws, rules and regulations; establish, review, approve and maintain New Account files of Customers; establish procedures to supervise your representatives, agents and employees to effect the foregoing; and maintain books and records reasonably reflecting your activities and required under applicable regulatory and self-regulatory laws, rules and regulations as they pertain to you and your activities;

(e)

agree that additional rules and regulations that pertain to broker-dealers may apply to this Agreement, and, upon our request, adhere to such applicable rules and regulations;

(f)

notify Customers in writing of our respective Customer-related responsibilities as required by NASD Rule 3230 and other applicable laws, rules and regulations;

(g)

secure and maintain licenses, registrations, permits, approvals and agreements required under applicable laws, rules and regulations for you or your representatives, agents, and employees to effect any transactions for, or render services to, or for Customers or for Introducing Firm’s proprietary Accounts;

(h)

secure from your representatives, agents and employees their agreement, in accordance with your policies and procedures, to comply in all respects with your “insider trading,” anti-manipulation and employee securities transactions policies, procedures and rules that are established and maintained by you;

(i)

obtain and provide to Clearing Firm all necessary authorizations to permit you and us to act as brokers or dealers, exercise and perform our respective rights, duties and obligations hereunder and retain commissions for effecting brokerage transactions;

(j)

be solely and exclusively responsible for any investment advice given by you to Customers, for securing all authorizations and agreements necessary to render investment advice or exercise discretionary authority, and supervising any such discretionary Accounts;

(k)

make, or direct Customers to make, payments of money and deliver securities to us and, if such payments or deliveries are made to you to promptly pay such money or deliver such securities to us within the meaning of the SEC financial responsibility rules;

(l)

accept or reject orders from Customers sent to us through whatever means (including, without limitation, direct market access orders submitted pursuant to a separately executed Electronic Trading Agreement between you and us); provided, however, that we may in our sole and absolute discretion, refuse to execute and clear any transaction introduced by you to us in accordance with our reasonable criteria either (i) established prior to the Closing Date or (ii) agreed to by you thereafter;

(m)

accurately transmit orders to us within a time period to be mutually determined by the parties;

(n)

negotiate commission charges with Customers; provided, however, in no event shall we be entitled to less than amounts to be paid to us hereunder;

(o)

respond to Customer inquiries or complaints and promptly notify us of inquiries or complaints directed to or made against you or us;

(p)

be solely and exclusively responsible for payment and or delivery of “when issued” transactions in Customers Accounts;

(q)

be solely and exclusively responsible for resolving any discrepancies or errors that may occur in the processing of transactions for Accounts;

(r)

obtain advance written approval from us as to an account for a Customer who comes under any prohibition contained in NYSE Rule 407;

(s)

furnish us copies of FOCUS Reports, financial statements for the current fiscal year, the executed Forms X-17A-5 (Parts I and IIA) filed with the SEC, any amendments to your SEC Form BD, and any other regulatory or financial reports Clearing Firm may from time to time require, such reports to be provided to us at the time you file such reports with your primary examining authority; and notify us at least ten (10) days in advance of withdrawals that will reduce your net capital below 150% of your regulatory requirement;

(t)

prepare, submit, and maintain copies of all reports, records and regulatory filings required of you by any entity that regulates you including, but not limited to, copies of all account agreements and similar documentation obtained pursuant to paragraph 3(b) of this Agreement; to the extent that we are required to prepare or submit any reports or records by any entity that regulates us, you shall cooperate in providing us with any information needed in order to prepare such reports or records;

(u)

promptly advise us after discovery by you of any alleged errors contained in any Notice sent by us to you or Customers;

(v)

be solely and exclusively responsible for assuring that cash and securities received by us under this Agreement are genuine and not lost, stolen, forged or counterfeit, and that securities ordered by you to be sold or transferred may be sold or transferred without restriction or that all restrictions on sale or transfer have been complied with;

(w)

be solely and exclusively responsible for determining whether any securities held or delivered in connection with Accounts are restricted or control securities as defined by applicable laws, rules, or regulations, and assuring that orders executed for such securities comply with such laws, rules and regulations;  

(x)

maintain a Brokers Blanket Bond with at least the minimum coverage required by FINRA; and

(y)

give required notice and obtain required approvals of employers in each case in which a customer is an employee of a broker-dealer, a self-regulatory organization, or a financial institution, including but not limited to any accounts that are subject to NYSE Rule 407A.

4.

Compensation for Services.

(a)

For our services provided pursuant to this Agreement you shall pay us the amounts described in the fee schedule attached as Exhibit B to this Agreement, paid in the manner provided in section 1(l) of this Agreement.  

(b)

For the financing of open positions in each PAIB, we will charge, on a daily basis, LIBOR plus 100 basis points.  This funding charge will be net of any deposit you make towards the funding of the PAIBs.  In regard to the credit balances generated by short positions in PAIBs, we will credit you either (i) the actual securities borrowed rebate minus 12.5 basis points for equities and 20 basis points for fixed income securities or (ii) where there is not a securities borrow contract, we will credit you 80% of LIBOR.

(c)

In addition, we will retain (i) 50% of the spread over LIBOR charged on Customer account margin loans and (ii) 50% of the spread on interest paid customers on credit balances as compared to a base rate of 80% of LIBOR.  All other compensation earned by, or paid or allocated to, any third party with respect to any Account shall continue to be earned by, or paid or allocated to, such third parties.

(d)

For the sake of clarity, in connection with transactions in Canadian securities, you agree to pay rates to be mutually agreed upon and consistent with our rates for comparable transactions charged to other customers.

5.

Representations and Warranties.

Each party represents and warrants to the other party that: (i) it, and each of its officers, directors, and employees engaged in the securities or investment business, is duly registered, qualified, licensed and/or a member in good standing with or of the SEC, FINRA and each state and/or self-regulatory organization where or on which it conducts business; (ii) it is, and at all times during the term of this Agreement will be, in compliance with applicable net capital, financial responsibility and customer protections rules of the SEC, FINRA and each state and/or self-regulatory organization where or on which it conducts business; (iii) it has all the requisite authority in conformity with all applicable laws and regulations to enter into this Agreement and to engage in the activities and transactions contemplated hereby directly or through one or more service prov iders; and (iv) it shall keep confidential, except as may be required by law, any nonpublic information it may acquire as a result of this Agreement regarding the business, affairs and customers of the other party, which representation and warranty shall survive the life of this Agreement.

6.

Termination; Events of Default; Continuity for Canadian Execution Services.

(a)

This Agreement shall terminate, on an Account-by-Account basis, upon the earlier of (i) the date on which such Account is transferred to you in accordance with the Asset Purchase Agreement (which, with respect to any New Account, shall be the earlier of the one year anniversary of the Initial Closing Date or such earlier date as you notify us of in writing), or (ii) such other time agreed to by mutual written consent of the parties.

(b)

Notwithstanding any provision in this Agreement, the following events or occurrences shall constitute an Event of Default under this Agreement:

(i)

either the Clearing Firm or the Introducing Firm shall fail to perform or observe any term, covenant or condition to be performed or observed by it hereunder and such failure shall continue to be unremedied for a period of 30 days (10 days in the case of a failure of either the Clearing Firm or the Introducing Firm to maintain net capital ratios as required by applicable rules and regulations) after written notice from the non-defaulting party to the defaulting party specifying the failure and demanding that the same be remedied; or

(ii)

any representation or warranty made by either the Clearing Firm or the Introducing Firm herein shall prove to be incorrect at any time in any material respect; or

(iii)

a receiver, liquidator or trustee of either the Clearing Firm or the Introducing Firm, or of its property, held by either party is appointed by court order and such order remains in effect for more than 30 days; or either the Clearing Firm or the Introducing Firm is adjudicated bankrupt or insolvent; or any of its property is sequestered by court order and such order remains in effect for more than 30 days; or a petition is filed against either the Clearing Firm or the Introducing Firm under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and is not dismissed within 30 days after such filing; or

(iv)

either the Clearing Firm or the Introducing Firm files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any petition against it under any such law; or

(v)

either the Clearing Firm or the Introducing Firm makes an assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, trustee or liquidator of either the Clearing Firm or the Introducing Firm, or of any property held by either party.

(c)

Upon the occurrence of any such Event of Default, the non-defaulting party may, at its option, by notice to the defaulting party declare that this Agreement shall be thereby terminated and such termination shall be effective as of the date such notice has been sent or communicated to the defaulting party.

(d)

At or before the Account Conversion Date, if you so request, we shall cause our Affiliate, CIBC World Markets Inc. (“CWMI”), to negotiate with you a separate agreement for the provision of execution and related services with respect to Canadian securities at rates to be mutually agreed upon and consistent with CWMI’s rates for comparable services provided to other customers.

7.

Indemnification; Other Terms.

(a)

If any claim, action or proceeding (“action”) is made by us or brought against us arising out of or related to any transaction we have cleared hereunder or any other action taken or not taken by us under this Agreement, then, except for our willful misconduct, fraud, or gross negligence, you shall indemnify and hold us fully harmless from any and all liabilities, loss, damage and expenses, including reasonable attorneys’ fees (collectively “Costs”), incurred or sustained by us resulting from or arising out of any action.  If you incur any Costs resulting from or arising out of any action, then, except for our willful misconduct, fraud, or gross negligence, you hereby waive any right to contribution or indemnification from us.  Without limiting the foregoing, you agree that you shall hold us fully harmless for any Costs incurred by us a rising out of: (i) your violation of any law, rule or regulation of any federal, state or foreign regulatory or self-regulatory authority, including but not limited to the SEC and FINRA; (ii) your failure to comply with any suitability requirement, “know your customer” requirement with respect to New Accounts, identity verification requirement with respect to New Accounts, or customer protection requirement to which you are subject, or your obligations as set forth in Section 3 of this Agreement; (iii) the failure of any introduced account to make timely payment for the securities purchased by it or timely and good delivery of securities sold for it, or timely compliance by it with margin or margin maintenance calls, whether or not any margin extensions have been granted by us pursuant to your request; (iv) the nonpayment or return to us unpaid of any check or draft given to us by any introduced accounts; (v) the payment and delivery of all “when issued” or “when distributed” tr ansactions which we may accept, forward or execute for introduced accounts; and (vi) any transaction or action taken or refrained from being taken by us based on instructions or Notices given to us that were fraudulent or not properly authorized.

(b)

For extensions of credit by us to Customers in margin accounts or otherwise, we shall charge interest based upon the average broker’s call money rate of a group of banks selected by us (our “broker’s call rate” calculated with respect to Customer accounts in a manner substantially similar to that in effect as of December 31, 2007 increased pursuant to our normal rate chart.

(c)

If a Customer fails to make full and timely payment or delivery for securities purchased or sold, respectively, you shall pay to us the amount of any charges sustained or incurred by us.  If use of our funds is involved with respect to computing part of all of such Cost, such use of funds shall be calculated at our broker’s call rate for each day or part thereof of such late payment or delivery.

(d)

We may, in our sole and absolute discretion, reject any proposed Customer or transaction and terminate any New Account.

(e)

ANY DISPUTE OR CLAIM ARISING OUT OF THIS AGREEMENT SHALL BE SUBMITTED TO ARBITRATION UNDER THE RULES OF THE ARBITRATION COMMITTEE OF FINRA, UNLESS THE TRANSACTION WHICH GAVE RISE TO SUCH DISPUTE OR CONTROVERSY WAS EFFECTED ON AN EXCHANGE OR MARKET WHICH PROVIDES ARBITRATION FACILITIES, IN WHICH CASE IT SHALL BE SETTLED BY ARBITRATION UNDER THE ARBITRATION RULES OF SUCH FACILITIES.  THE DECISION OF THE ARBITRATORS SHALL BE BINDING ON THE PARTIES AND ANY JUDGMENT UPON ANY AWARD RENDERED MAY BE ENTERED, AND NEITHER PARTY SHALL OPPOSE SUCH ENTRY, IN A COURT HAVING JURISDICTION HEREOF THAT IS LOCATED IN THE STATE OF NEW YORK. For these purposes and all other purposes under this Agreement, you hereby consent to the jurisdiction of the courts of the State of New York, the federal courts sitting in the State of New York, and FINRA.

(f)

This Agreement shall be governed and construed in accordance with the laws of the State of New York.

(g)

Upon your giving an order to us, you shall be deemed to warrant and represent that:

(i)

such order is lawful, in compliance with all applicable laws, rules and regulations and within the scope of the authority given to you by your Customer,

(ii)

no restrictions or impediments exist with respect to such order, and

(iii)

sale orders are for fully registered securities that can be sold without restriction.  If the securities subject to an order are restricted under SEC Rule 144 or any other restriction, you shall advise us in advance and be deemed to warrant, represent and agree when placing such order that all necessary agreements, documents and papers have been or will be duly secured and filed by you as required by applicable law to permit such transaction.

(h)

Each of us shall make available to the other all appropriate data in its possession necessary for the performance of our respective duties hereunder.  All such data shall be kept confidential and shall not be disclosed in any way to any person not employed by us or not an officer, director or member of either of us.

(i)

Each of us respectively warrants and represents to the other that there is no contract, agreement or understanding which would prevent such party from entering into or performing and observing the terms of this Agreement, and each party further warrants and represents that it is duly registered, licensed or otherwise permitted under the law to enter into and perform all the terms and conditions of this Agreement.  Unless approved in writing by us, you warrant and agree that we are your sole clearing agent with respect to the Accounts and that you will maintain no other clearing arrangements for the Accounts during the term of this Agreement.  Each party agrees to immediately notify the other of any change in the foregoing.

(j)

In the event of a conflict in regulatory requirements, the rules of the NYSE or NASD (or successor rules later promulgated by FINRA) shall take precedence.

(k)

The indemnification provisions in this Agreement shall remain operative and in full force and effect, regardless of the termination of this Agreement, and shall survive any such termination.

(l)

Any amounts to be paid to either party under this Agreement shall be in U.S. dollars.

(m)

We shall not be liable for any loss caused, directly or indirectly, by government restrictions, exchange or market ruling, suspension of trading, war, acts of terrorism, strikes or other conditions beyond our control.  In the event that any communications network or computer system used by us, whether or not owned by us, is rendered inoperable, we shall not be liable to you or your Customers for any loss, liability, claim, damage or expense resulting, either directly or indirectly, therefrom; provided, however, that we shall use all commercially reasonable efforts to provide such services as reconstituted as quickly as reasonably possible thereafter.

(n)

We agree that we will reasonably cooperate with each other to identify and resolve in a timely manner any operational, systems or regulatory issues or problems that we may encounter in the course of our providing the services specified in this Agreement, and as necessary agree to any changes or modifications in those services as may reasonably be required by us.

(o)

Any modification or termination of any terms of this Agreement must be in writing signed by the parties hereto.  If the foregoing correctly sets forth our agreement, kindly sign this Agreement where provided and return it to us.  We will thereupon forward one original thereof to FINRA for its approval.

This Agreement shall take effect upon approval by FINRA pursuant to NASD Rule 3230.

CIBC WORLD MARKETS CORP.
300 Madison Avenue
New York, NY 10017

By:  
      [Name]

Title:  

AGREED AND ACCEPTED:

Oppenheimer & Co. Inc.

125 Broad Street

New York, NY 10004

By:

 
       [Name]

Title:

Date:

Exhibit A

TTS0050 -Firm’s Books and records- various reviews.

TTS0051 -Supervision of registered rep’s transactions.

TTS0003 -Supervision of registered rep’s transactions.

TTS0165 -Order and execution trade run- various reviews.

TTS0070_Detail -Order Details – various reviews

TTS0202 -Marking the close review.

TTS0148 -Various trade reporting reviews.

SIA009   -Various trade reporting reviews.

SIA012   -Various trade reporting reviews.

TTS8888 -Review of .T trades – Best Ex, trade reporting, etc.   

SIA001   -Manning.

SIA002   -Manning.

SIA001A –Manning.

SIA001B -Auto- crossing.

SIA005A -Reg NMS.

SIA005B -Reg NMS.

SIA005C -Reg NMS.

SIA005D -Reg NMS.

SIA005E -Reg NMS.

SIA005F -Reg NMS.

SIA010   -ACT Comparison.

TTS0230 -Best Ex.

TTS0068 -Best Ex.

SIA003_New –LOD.

Maker Quotes report for CIBC (2 reports) -Marking of Customer tickets (3 quotes).

Non_Maker_Quotes  -Marking of Customer tickets (3 quotes).

TTS7777_Manual -Trade Reporting.

Unallocated Positions Report -Best Ex.

Manual_Allocations Report –Best Ex.

Exec_Prior_Receipt_AG –Best Ex.

Exec_Alloc_AG_Cross –Best Ex.

TTS0134  -Reg SHO.

TTS0002 -Trader P&L.

Exec_Alloc Report

SIA005G  -Reg NMS.

SIA005H  -Reg NMS.

SIA005I  -Reg NMS.

SIA005J  -Reg NMS.

Latency Report  -Reg NMS.

BRASS to BOFA Differences File (daily email) – Comparison of BRASS data vs. BOFA algo.

Reg NMS CBS Reports (daily email)(2 reports- “upstairs” and “exempt”)

Reg NMS CPT Reports (daily email) (2 reports- “upstairs” and “exempt”)

CBS Trading Logs (Compliance and Compliance Order) (daily email)

TTS0018  Reg NMS form T.

SIA 007  Customer Short Sales.

SIA008  Prop Short Sales.

MannPrinExec  Riskless Reporting.

TTS0134_Short –Short Sales.

SHO Threshold

ACT Daily List

Eq Arb (2 Kosmos files-email) -Various reviews.

Tel AvivAD report -Various reviews.

1	Block Trading Batch Report	+ Based upon prop-acct ranges, or branch-acct combinations. + Require definition of Oppenheimer branch range.
	Cancel, Rebill, As Of Trade Distribution	+ Require definition of Oppenheimer branch range.
2	Cancel, Rebill, As Of Trade -  Convertible Bonds Batch Report
3	Cancel, Rebill, As Of Trade -  Customer Program Trading Batch Report
4	Cancel, Rebill, As Of Trade -  High Yield Batch Report
5	Cancel, Rebill, As Of Trade -  Institutional Options Batch Report
6	Cancel, Rebill, As Of Trade -  London Batch Report
7	Cancel, Rebill, As Of Trade -  Tel-Aviv Batch Report
8	Cancel, Rebill, As Of Trade -  US Equities Batch Report
9	Error Accounts Batch Report	+ Based upon prop-acct ranges, or branch-acct combinations. + Require definition of Oppenheimer branch range.
	Fixed Income Distribution	+ Require definition of Oppenheimer branch range.
10	Fixed Income - Convertible Bonds Batch Report
11	Fixed Income - Fixed Income batchHigh Yield Batch Report
	Mark Up/Mark Down Commissions Report	+ Require definition of Oppenheimer branch range.
12	Mark Up/Mark Down - Convertible Bonds Batch Report
13	Mark Up/Mark Down - EQUITY AGENCY Batch Report
14	Mark Up/Mark Down - Equity Principal Batch Report
15	Mark Up/Mark Down - Fixed Income Principal Batch Report	+ Segregate High Yield from High Grade
16	Mark Up/Mark Down - Options Batch Report
17	Money Transfer Batch Report	+ Require definition of Oppenheimer branch range.
	Options Trading Report	+ Exclude CIHI activity. + Requires further review of criteria.
18	Options Trading - CROP-SROP Batch Report
19	Options Trading - Tel-Aviv  Batch Report
20	Options Trading - World Market Batch Report
21	Rule 144A REG S Batch Report	+ Require definition of Oppenheimer branch range.
	Short Sales Report	'+ Require definition of Oppenheimer branch range.
22	Short Sales - Equities Batch Report
23	Short Sales - Tel Aviv Batch Report
	Short Sales Aggregation Units Report	+ Require definition of Oppenheimer branch range. + Needs further review of reporting logic to determine segregation rules.
24	Short Sales Aggregation Units Report - CIBC
25	Short Sales Aggregation Units Report - Convertible Bonds
26	Short Sales Aggregation Units Report - Customer Program Trading
27	Short Sales Aggregation Units Report - High Yield
28	Short Sales Aggregation Units Report - Institutional Options
29	Syndicate Trading Batch Report	+ Require definition of Oppenheimer branch range. + Needs further review of reporting logic to determine segregation rules.

2

EXHIBIT B

FEE SCHEDULE

You agree to pay  $568,000 per month (“Monthly Fee”) plus $1.04 per trade (“Trade Fee”) plus all other actual fees, costs and expenses associated with the clearance of each transaction (or any other fees imposed by law or otherwise agreed to by you and us).

The parties agree that both the Monthly Fee and the Trade Fee shall be adjusted each year on January 1 to reflect the increase, if any, by which the New York consumer price index (“CPI”) for the most recent year exceeds the New York CPI for the year in which this Agreement is executed.  The amount of the change in the respective fees shall be determined by multiplying the existing fees by the change in the New York CPI.

3

EX-10

robertse"> 03/06/2008">

EXECUTION COPY

EXHIBIT 10.11

SECURED CREDIT AGREEMENT
(LOAN TRADING PLATFORM)

by and among

OPY CREDIT CORP.,
as Borrower,

and

CIBC INC.,
as Lender,

and

CANADIAN IMPERIAL BANK OF COMMERCE,

as Collateral Agent.

Dated as of January 14, 2008

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS; CERTAIN TERMS

1

SECTION 1.01.

Definitions

1

SECTION 1.02.

Terms Generally

14

SECTION 1.03.

Accounting and Other Terms

14

SECTION 1.04.

Time References

14

ARTICLE II

THE FACILITY

14

SECTION 2.01.

Loans

14

SECTION 2.02.

Use of Proceeds

15

SECTION 2.03.

Promise to Pay

15

SECTION 2.04.

Note

16

SECTION 2.05.

Allocation of Proceeds of Collateral

16

SECTION 2.06.

Termination or Reduction of Commitments

17

ARTICLE III

PAYMENTS AND OTHER COMPENSATION

17

SECTION 3.01.

Voluntary Prepayments

17

SECTION 3.02.

[RESERVED]

17

SECTION 3.03.

Payments

17

SECTION 3.04.

Taxes

18

ARTICLE IV

INTEREST

20

SECTION 4.01.

Interest on the Loans and Other Obligations

20

SECTION 4.02.

[RESERVED]

21

SECTION 4.03.

Break Funding Payments

21

SECTION 4.04.

Change in Law; Illegality

21

ARTICLE V

CONDITIONS TO LOANS

22

SECTION 5.01.

Conditions Precedent to the Initial Loans

22

SECTION 5.02.

Conditions Precedent to all Loans

24

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

25

SECTION 6.01.

Representations and Warranties

25

ARTICLE VII

REPORTING COVENANTS

26

SECTION 7.01.

Financial Statements, Collateral Reporting

26

SECTION 7.02.

Other Information and Event Reporting

27

SECTION 7.03.

Defaults, Events of Default, Collateral Deficiencies

28

ARTICLE VIII

AFFIRMATIVE COVENANTS

28

SECTION 8.01.

Compliance with Laws

28

SECTION 8.02.

Payment of Taxes and Claims

28

SECTION 8.03.

Conduct of Business and Preservation of Corporate Existence

28

SECTION 8.04.

Further Assurances

29

SECTION 8.05.

Conduct of Business

29

SECTION 8.06.

Use of Proceeds

29

SECTION 8.07.

Formation of Subsidiaries

29

SECTION 8.08.

Collateral Calculations and Maintenance

29

ARTICLE IX

NEGATIVE COVENANTS

29

SECTION 9.01.

Liens

29

SECTION 9.02.

Indebtedness

30

SECTION 9.03.

Consolidation, Merger, Subsidiaries, Etc

30

SECTION 9.04.

Collateral Dispositions, Etc

30

SECTION 9.05.

Negative Pledges

30

SECTION 9.06.

Federal Reserve Regulations

30

SECTION 9.07.

Investment Company Act of 1940

30

SECTION 9.08.

Impairment of Security Interests

30

SECTION 9.09.

Restricted Payments

30

ARTICLE X

[RESERVED]

31

ARTICLE XI

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

31

SECTION 11.01.

Events of Default

31

SECTION 11.02.

Remedies

33

SECTION 11.03.

Waivers by the Borrower

33

ARTICLE XII

[RESERVED]

33

ARTICLE XIII

THE COLLATERAL AGENT

33

SECTION 13.01.

Appointment Powers and Immunities; Delegation of Duties, Liability of Collateral Agent, Rights of Collateral Agent  33

SECTION 13.02.

Reliance by Collateral Agent

35

SECTION 13.03.

Defaults

35

SECTION 13.04.

Costs and Expenses; Indemnification

35

SECTION 13.05.

Non-Reliance on Collateral Agent

36

SECTION 13.06.

Failure to Act

36

SECTION 13.07.

Resignation of Collateral Agent

36

SECTION 13.08.

Collateral Matters

37

SECTION 13.09.

Restrictions on Actions by the Collateral Agent and the Lender

37

ARTICLE XIV

MISCELLANEOUS

38

SECTION 14.01.

Notices, Etc

38

SECTION 14.02.

Amendments, Etc

39

SECTION 14.03.

[RESERVED]

39

SECTION 14.04.

No Waiver; Remedies, Etc

39

SECTION 14.05.

Expenses; Taxes; Attorneys’ Fees

40

SECTION 14.06.

Right of Set-Off

40

SECTION 14.07.

Severability

41

SECTION 14.08.

[RESERVED]

41

SECTION 14.09.

Complete Agreement; Sale of Interest

41

SECTION 14.10.

Participations

41

SECTION 14.11.

Counterparts

42

SECTION 14.12.

GOVERNING LAW

42

SECTION 14.13.

CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE

42

SECTION 14.14.

WAIVER OF JURY TRIAL, ETC

43

SECTION 14.15.

Consent

43

SECTION 14.16.

Interpretation

43

SECTION 14.17.

Reinstatement; Certain Payments

43

SECTION 14.18.

Indemnification

44

SECTION 14.19.

Interest

44

SECTION 14.20.

Records

45

SECTION 14.21.

Binding Effect

45

SECTION 14.22.

Confidentiality

45

SECTION 14.23.

Lender Advertising

46

SECTION 14.24.

USA PATRIOT ACT

46

i

SCHEDULES

Schedule A

—

Eligible Collateral

Schedule 2.01(a)

—

Loans

EXHIBITS

Exhibit A

—

Daily Funds Movement Report

Exhibit B

—

Form of Note

Exhibit C-1

—

Form of Opinion of Counsel to the Borrower

Exhibit C-2

—

Form of Opinion of General Counsel of Borrower

Exhibit D

—

Form of Officer’s Certificate

Exhibit E

Form of Required Collateral Surplus Deficiency Notice

-v-

SECURED CREDIT AGREEMENT

This Secured Credit Agreement, dated as of January 14, 2008 (the “Agreement”), by and among OPY CREDIT CORP., a corporation formed under the laws of the State of New York (the “Borrower”), CIBC INC., as lender (the “Lender”), and CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent for the Secured Creditors (in such capacity, together with its successors and assigns, if any, the “Collateral Agent”).

RECITALS

WHEREAS, the Borrower has requested that the Lender make available to it the Commitment, on the terms and conditions set forth herein, to fund its senior debt trading platform, and to provide the working capital requirements of the Borrower in relation to such senior debt trading platform; and

WHEREAS, the Lender is willing to make Loans to the Borrower upon the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS; CERTAIN TERMS

SECTION 1.1.

Definitions.  As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

“Action” has the meaning ascribed to such term in Section 14.15.

“Adjusted Market Value” means, with respect to the Eligible Collateral, as of any date of determination, the product of the Market Value of the Eligible Collateral multiplied by the Advance Rate.

“Advance Rate” means 85%, or such other rate as may be agreed in writing from time to time by the Lender and the Borrower with respect to any Name, provided that if any variation in Advance Rate from 85% is agreed at any time, then solely for purposes of calculating the “Adjusted Market Value”, the “Advance Rate” shall be the weighted average advance rate on all the assets forming the Eligible Collateral (weighted by PAR Value of each item of Eligible Collateral).

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied 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 specified Person, whether through the ownership of voting Securities or by contract or otherwise.

“Agent-Related Persons” means each of the Collateral Agent and its Affiliates, and the officers, directors, employees, counsel, agents, and attorneys-in-fact of the Collateral Agent and its Affiliates.

“Agreement” means this Secured Credit Agreement, together with all Exhibits and Schedules hereto, as such agreement may be amended, supplemented or otherwise modified from time to time.

“Alternate Base Rate” at any time means the higher of (a) the rate which is 0.50% in excess of the Federal Funds Rate and (b) the Prime Rate.  Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the opening of business on the date of such change.

“Alternate Base Rate Loans” means Loans that bear interest at an interest rate based on the Alternate Base Rate.

“Applicable Law” means, in respect of any Person, all provisions of constitutions, laws, statutes, rules, regulations, treaties, directives, guidelines and orders of Governmental Authorities applicable to such Person, including zoning ordinances and all orders, decisions, judgments and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.

“Applicable Margin” means, at any time with respect to a LIBOR Loan, 1.00%.

“Assignment and Acceptance” means an Assignment and Acceptance Agreement in the Lender’s customary form.

“Assignment Fees” means each of the assignment fees payable to Canadian Imperial Bank of Commerce or its affiliates in their respective capacities as administrative agents under the syndicated loan agreements, in the amount set forth in the relevant syndicated loan agreement.

“Availability Period” means the period from the Closing Date to the Maturity Date.

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time, and any successor statute.

“Benefit Plan” means an employee pension benefit plan, excluding any Multiemployer Plan, which is subject to Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“Borrower” has the meaning ascribed to such term in the introductory paragraph hereto.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of LIBOR Rate Loans, having the same Interest Accrual Period made by the Lender pursuant to Section 2.01(b).

“Business Day” means any day that is not a Saturday, a Sunday or a day on which commercial banks are required or permitted to be closed in the State of New York; provided that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in U.S. Dollar deposits in the London interbank market.

“Capitalized Lease” means, with respect to any Person, any lease of real or personal property by such Person as lessee which is required under GAAP to be capitalized on the balance sheet of such Person.  

“Capitalized Lease Obligations” means, with respect to any Person, obligations of such Person and its Subsidiaries as lessee under Capitalized Leases as determined in accordance with GAAP.

“Capital Stock” means (a) with respect to any Person that is a corporation, any and all shares, options, warrants, interests, participations or other equivalents (however designated and whether or not voting) of or in a Person, including common stock, preferred stock or any other “equity security” and (b) with respect to any Person that is not a corporation, any and all partnership, limited liability company interests or other equity interests of such Person excluding, in the case of clauses (a) and (b) above, any debt security that is exchangeable for or convertible into such capital stock.

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by an agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year after the date of acquisition thereof; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one (1) year after the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then from such other nationally recognized rating services reasonably acceptable to the Lender) and not listed in Credit Watch published by S&P; (c) commercial paper, other than commercial paper issued by the Borrower, maturing no more than two hundred seventy (270) days after the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-1 or P-1, respectively, from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then the comparable rating from such other nationally recognized rating services reasonably acceptable to the Lender); (d) domestic and Eurodollar certificates of deposit or time deposits or bankers’ acceptances maturing within one (1) year after the date of acquisition thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or Canada having combined capital and surplus of not less than $500,000,000 or by the Lender; (e) shares of money market or mutual funds that are required to have a net asset value of $1.00 per share with assets in excess of $250,000,000 and that invest exclusively in assets satisfying the requirements of clauses (a) through (e) of this definition; and (f) marketable direct debt issued or guaranteed by any corporation (other than debt issued by the Borrower), which at the time of acquisition, has one of the three highest ratings obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then from such other nationally recognized rating services acceptable to the Lender) maturing within one (1) year after the date of acquisition thereof; provided however, that to the extent that any of the foregoing is “margin stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System of the United States, as in effect from time to time, each such item shall be excluded from the definition of “Cash Equivalent.”  

A “Change of Control” shall be deemed to occur if, collectively, the Permitted Holders fail to retain beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act), directly or indirectly, of a majority of the Voting Stock (as defined below) of the Borrower.  As used in this definition, “Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right to so vote has been suspended by the happening of such a contingency.

“Closing Date” means the Business Day, on or before January 14, 2008, on which all of the conditions precedent set forth in Section 5.01 have been satisfied (or waived in accordance with the terms of this Agreement).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of the Code shall be construed also to refer to any successor sections.

“Collateral” has the meaning ascribed to such term in the Security Agreement, provided, that, notwithstanding anything herein or in the Security Agreement to the contrary, each party hereto agrees that no U.S. Broker Dealer Subsidiary as that term is used in that certain Subordinated Credit Agreement, dated as of January 14, 2008, by and among E.A. Viner International Co., as borrower, the other Persons parties thereto from time to time, the lenders party thereto from time to time, Canadian Imperial Bank of Commerce, as administrative agent, and CIBC World Markets Corp., as lead arranger, as amended from time to time, will be required to pledge any collateral or provide a  guaranty of any obligation of the Borrower hereunder.

“Collateral Agent” has the meaning ascribed to such term in the introductory paragraph hereto.

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

“Commitment” means the obligation of the Lender to make a Loan pursuant to the terms and conditions of this Agreement, and which shall not exceed the principal amount set forth on Schedule 2.01(a) under the heading “Commitment”.

“Contingent Obligation” means, with respect to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness (“Primary Obligations”) of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, or (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constitut ing direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof, provided, however, that the term “Contingent Obligation” shall not include any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is m ade (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Control Agreement” means, with respect to the Pledged Account, an agreement, in form and substance reasonably satisfactory to the Collateral Agent, which effectively gives “control” (as defined in the UCC) to the Collateral Agent in such Pledged Account and all investment property or funds contained therein, as the case may be.

“Cure Time” means the time set forth in the following table:

If a Required Collateral Surplus Deficiency Notice shall have been given to the Borrower at any time prior to 12:00 noon Eastern Time on any Business Day:
and the amount of the Required Collateral Surplus Deficiency is an amount equal to or greater than (a) $2,000,000, or (b) 5% of the aggregate Market Value of the Eligible Collateral, then 12:00 noon Eastern Time on the next succeeding Business Day.	and the amount of the Required Collateral Surplus Deficiency is an amount less than (a) $2,000,000, and (b) 5% of the aggregate Market Value of the Eligible Collateral, then 12:00 noon Eastern Time on the third succeeding Business Day.
If Required Collateral Surplus Deficiency Notice shall have been given to the Borrower at any time after 12:00 noon Eastern Time on any Business Day:
and the amount of the Required Collateral Surplus Deficiency is an amount equal to or greater than (a) $2,000,000, or (b) 5% of the aggregate Market Value of the Eligible Collateral, then 12:00 noon Eastern Time on the second succeeding Business Day.	and the amount of the Required Collateral Surplus Deficiency is an amount less than (a) $2,000,000, and (b) 5% of the aggregate Market Value of the Eligible Collateral, then 12:00 noon Eastern Time on the fourth succeeding Business Day.

“Current Business” means, with respect the Borrower, the originating, arranging, syndicating and trading of commercial loans.

“Daily Funds Movement Report” means a report and certificate, signed by a Responsible Officer of the Borrower, and substantially in the form of Exhibit A.

“Default” means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Dollar”, “Dollars” and the symbol “$” each means lawful money of the United States of America.

“Eligibility Criteria” shall have the meaning set forth on Schedule A.

“Eligibility Parameters” shall have the meaning set forth on Schedule A.

“Eligible Assignee” means (a) an Affiliate of the Lender domiciled in the United States of America, or (b) any other Person nominated by the Lender and, if no Event of Default has occurred and is continuing, consented to in writing by the Borrower (such consent not to be unreasonably withheld or delayed); provided, that, in the case of clauses (a) and (b) above, such Person is a “qualified purchaser” under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder.

“Eligible Collateral” means, on any date of determination, any obligation owned by the Borrower which meets the Eligibility Criteria, and, together with all other Eligible Collateral, meets the Eligibility Parameters.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of ERISA shall be construed also to refer to any successor sections.  

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” within the meaning of Sections 414(b), (c), (m) and (o) of the Code.

“ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan, (b) the filing of a notice of intent to terminate a Benefit Plan in a distress termination (as described in Section 4041(c) of ERISA), (c) the institution by the Pension Benefit Guaranty Corporation of proceedings to terminate a Benefit Plan or Multiemployer Plan, (d) the appointment of a trustee to administer any Benefit Plan under Section 4042 of ERISA, or (e) any event requiring the Borrower or any ERISA Affiliate to provide security to a Benefit Plan under Section 401(a)(29) of the Code.  

“Eurodollar Reserve Percentage” means, for any day, the percentage, expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100^th of 1%, that is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in The City of New York.

“Event of Default” has the meaning ascribed to such term in Section 11.01.

“Federal Funds Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Lender from three Federal Funds brokers of recognized standing selected by the Lender in the exercise of its reasonable discretion.

“Federal Reserve Board” means the Board of the Federal Reserve System or any Governmental Authority succeeding to its functions.

“Fiscal Month” means each fiscal month of the Borrower consisting of a four (4) or five (5) week period.

“Fiscal Quarter” means the fiscal quarter of the Borrower ending on the last day of the Fiscal Month falling three (3), six (6), nine (9) and twelve (12) months after the end of the Fiscal Year.

“Fiscal Year” means the fiscal year of the Borrower ending on the last day of the last Fiscal Month of the Parent.

“GAAP” means generally accepted accounting principles in effect from time to time in the United States, provided that, for the purpose of the financial amounts and the definitions used herein, “GAAP” shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the financial statements required to be delivered pursuant to Section 7.01 hereof.

“Governing Documents” means, (a) with respect to any corporation, (i) the articles/certificate of incorporation (or the equivalent organizational documents) of such corporation, (ii) the by-laws (or the equivalent governing documents) of the corporation and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such corporation’s capital stock; and (b) with respect to any general partnership, (i) the partnership agreement (or the equivalent organizational documents) of such partnership and (ii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (c) with respect to any limited partnership, (i) the partnership agreement (or the equivalent o rganizational documents) of such partnership, (ii) a certificate of limited partnership (or the equivalent organizational documents) and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (d) with respect to any limited liability company, (i) the certificate of limited liability (or equivalent filings) of such limited liability company, (ii) the operating agreement (or the equivalent organizational documents) of such limited liability company, and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of such company’s membership interests; and (e) with respect to any unlimited liability company, (i) the certificate of incorporation (or the equivalent organizational documents) of such unlimited liability company, (ii) the memorandum and articles of association (or the equivalent governing documents) of suc h unlimited liability company and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such unlimited liability company’s Capital Stock.

“Governmental Authority” means any nation or government, any federal, state, provincial, city, town, municipal, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Highest Lawful Rate” has the meaning ascribed to such term in Section 4.01(c).

“Indebtedness” means, without duplication, with respect to any Person, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business irrespective of when paid); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (d) all obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder are limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabi lities of such Person as an account party, in respect of letters of credit, bankers’ acceptances and similar facilities; (g) all the aggregate mark-to-market exposure of such Person under hedging agreements; (h) all Contingent Obligations; and (i) all obligations referred to in clauses (a) through (h) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, provided that the amount of Indebtedness of others that constitutes Indebtedness solely by reason of this clause (i) shall not for purposes of this Agreement exceed the fair market value of the properties or assets subject to such Lien.  The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer that is required to be consolidated under GAAP to the extent such Person would be liable therefor under applicable law or any agreement or instrument by virtue of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person shall not be liable therefor.  

“Indemnified Matters” has the meaning ascribed to such term in Section 14.18.

“Indemnitees” has the meaning ascribed to such term in Section 14.18.

“Interest Accrual Period” means, with respect to any LIBOR Rate Loan, the period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending one, two, three, six, or, if consented to by the Lender, nine months thereafter; and provided that the foregoing provisions are subject to the following:

(a)

if any Interest Accrual Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Accrual Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Accrual Period into another calendar month, in which event such Interest Accrual Period shall end on the immediately preceding Business Day;

(b)

any Interest Accrual Period pertaining to a LIBOR Rate Loan 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 Accrual Period) shall end on the last Business Day of the relevant calendar month;

(c)

any Interest Accrual Period in respect of any Loan that would otherwise extend beyond the Maturity Date shall end on the Maturity Date; and

(d)

no more than twelve (12) LIBOR Rate Loans may be in effect at any time.  For purposes hereof, LIBOR Rate Loans with different LIBOR Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing LIBOR Periods to constitute a new LIBOR Rate Loan with a single LIBOR period.

“Interest Payment Date” means (a) with respect to (i) any Base Rate Loan, the last Business Day of each calendar month, commencing on the first such date to occur after the Closing Date; and (ii) any LIBOR Rate Loan, the last day of each Interest Accrual Period applicable to such Loan; provided, in the case of each Interest Accrual Period of longer than three months, “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Accrual Period, and (b) with respect to all Loans, the Maturity Date.

“Interest Rate” means interest at a rate equal to either, at the Borrower’s option, (a) LIBOR plus the Applicable Margin or (b) the Alternate Base Rate.

“Interest Rate Determination Date” means, for each Interest Accrual Period, the second Business Day immediately preceding the first day of such Interest Accrual Period.

“IRS” means the Internal Revenue Service or any successor federal tax Governmental Authority.

“Lender-Related Persons” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, and the officers, directors, employees, counsel, agents, and attorneys-in-fact of such Lender and such Lender’s Affiliates.

“Lender’s Payment Office” means the office of the Lender located at 300 Madison Avenue, 6^th Floor, New York, New York  10017, or such other office as may be designated by the Lender from time to time.

“LIBOR” means, with respect to each Interest Accrual Period in respect of any LIBOR Rate Loan, the rate per annum determined by the Lender to be the offered rate for deposits in U.S. dollars for a period equal to the LIBOR Period for such Interest Accrual Period therefore appearing on the Reuters Screen LIBOR01 as of 11:00 a.m., London time, on the relevant Interest Rate Determination Date with respect to such Interest Accrual Period.  If for any reason, such rate is not available, then the LIBOR Rate for the relevant LIBOR Period for the purposes of this definition shall mean the rate per annum at which, as determined by Canadian Imperial Bank of Commerce and advised to the Lender, U.S. Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 a.m., London time, on the relevant Interest R ate Determination Date for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the relevant LIBOR Period.

“LIBOR Period” means with respect to each Loan, the period of one, two, three, six or, if available, nine months, as specified by the Borrower in the applicable Daily Funds Movement Report.

“LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next higher 1/100^th of 1%) determined by the Lender pursuant to the following formula:  LIBOR/(1.00 – Eurodollar Reserve Percentage).

“LIBOR Rate Loans” means Loans which bear interest at a rate determined by reference to the LIBOR Rate.

“Lien” means any lien, security interest or other charge of any kind, or any other type of preferential arrangement intended to have the effect of a lien or security interest, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“Loan Documents” means this Agreement, the Note, the Security Documents and all other agreements, instruments, and other documents executed and delivered by the Borrower hereto or thereto or otherwise evidencing or securing any Loan.

“Loan Exposure” means, with respect to the Lender, as of any date of determination, the outstanding principal amount of all Loans made by the Lender as of such date.

“Loans” has the meaning ascribed to such term in Section 2.01(a).

“LSTA Data Service” means the loan pricing service provided by the Loan Syndications and Trading Association.

“Market Price” means, with respect to any item of Eligible Collateral at any time, the price for such Eligible Collateral exclusive of accrued interest (expressed as a percentage, or the decimal equivalent thereof, and representing the premium over, or discount under, the PAR Value of such Eligible Collateral on such date) most recently assigned by the Lender in accordance with Section 8.08(b).

“Market Value” means on any date of determination with respect to any item of Eligible Collateral, the product of (a) the Market Price of such Eligible Collateral on such date, times (b) the PAR Value of such Eligible Collateral on such date.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, properties, assets or condition (financial or otherwise) of the Borrower taken as a whole, (b) the ability of the Borrower to perform its obligations hereunder or under any of the other Loan Documents or (c) the rights and remedies of the Collateral Agent or the Lender hereunder or under any other Loan Document.

“Maturity Date” means January 14, 2013.

“Moody’s” means Moody’s Investors Service and any successor thereto.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or its Subsidiaries or any of their ERISA Affiliates has contributed, or has been obligated to contribute, at any time during the preceding six years, or has liability.

“Name” means the borrower or other obligor on any senior loan which forms, or is proposed to form, part of the Eligible Collateral.

“Note” has the meaning ascribed to such term in Section 2.04(a).

“Obligations” means all Loans, advances, debts, liabilities, obligations, covenants and duties, owing by the Borrower to the Collateral Agent, the Lender, any Affiliate of the Lender, or any Person entitled to indemnification pursuant to Section 14.18 of this Agreement, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, interest rate contract, foreign exchange contract or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, but in all such circumstances only to the extent now existing or hereafter arising or however acquired, in each case arising under or in connection with thi s Agreement, the Note or any other Loan Document.  The term includes all interest (including any interest that, but for the provisions of the Bankruptcy Code, would have accrued), charges, expenses, fees, attorneys’ fees and disbursements and any other sum chargeable to the Borrower under this Agreement, the Note or any other Loan Document.

“Officer’s Certificate” has the meaning ascribed to such term in Section 7.01(d).

“Other Taxes” has the meaning ascribed to such term in Section 3.04(b).

“PAR Value” with respect to any item of Collateral on any date means, the original par value or face amount of such Collateral, minus the aggregate amount of all payments made in reduction of the principal amount of such Collateral pursuant to the governing terms thereof or otherwise, minus the amount of any principal declared to be payable on a fixed date for such Collateral which has not yet been paid.

“Parent” means Oppenheimer Holdings Inc., a corporation formed under the laws of Canada.

“Participant” has the meaning ascribed to such term in Section 14.10(e).

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. No. 107-56 (signed into law October 26, 2001).

“Permitted Encumbrances” means:

(a)

Liens imposed by law for unpaid utilities and taxes, assessments or governmental charges or levies that are not yet due or are being contested in a Permitted Protest; and

(b)

Liens securing the Obligations and/or created or permitted by the Security Documents or the Warehouse Agreement.

“Permitted Holder” means any member of the Lowenthal family or any entity directly or indirectly owned by any member of the Lowenthal family. “Permitted Indebtedness” means:

(a)

Indebtedness of the Borrower under this Agreement (and any facility entered into in replacement hereof, in whole or in part, following exercise by the Lender of its rights under Section 2.06(b) hereof and while Obligations and/or the Commitment remains outstanding) and the Warehouse Agreement, and the other Loan Documents;

(b)

purchase money indebtedness and Capitalized Lease Obligations incurred after the Closing Date to acquire equipment or real property in the ordinary course of business; provided that (A) the aggregate amount of all such Indebtedness does not exceed $250,000 at any time outstanding, (B) the Indebtedness when incurred shall not be more than 100% of the lesser of the cost or fair market value as of the time of acquisition of the asset financed, (C) such Indebtedness is issued and any Liens securing such Indebtedness are created within 270 days after the acquisition of the asset financed and (D) no Lien securing such Indebtedness shall extend to or cover any property or asset other than the asset so financed;

(c)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument of the Borrower drawn against insufficient funds in the ordinary course of business, provided that the aggregate amount of all such Indebtedness does not exceed $250,000 at any time outstanding;

(d)

Indebtedness with respect to leases in respect of real property entered into by the Borrower in the ordinary course of business;

(e)

Indebtedness under performance bonds, surety bonds and letter of credit obligations to provide security for worker’s compensation claims, in each case, incurred in the ordinary course of business;

(f)

Contingent Obligations of the Borrower arising in the ordinary course of its Current Business pursuant to normal business practice, contract or applicable law, rule or regulation;

(g)

Contingent Obligations with respect to endorsements of checks and other negotiable instruments for deposit or collection;

(h)

to the extent constituting Contingent Obligations, indemnification obligations and other similar obligations of the Borrower in favor of directors, officers, employees, consultants or agents of the Borrower extended in the ordinary course of business; and

(i)

Indebtedness owed by the Borrower to the Parent or to Viner Finance Inc., to the extent the same is fully subordinated to the Obligations.

“Permitted Protest” means the right of a Person to protest any Lien (other than any such Lien that secures all or any portion of the Obligations) or taxes, provided that (a) a reserve with respect to such obligation is established, if required, by such Person in such amount as is required under GAAP and (b) any such protest is instituted promptly and prosecuted diligently and in good faith by such Person.

“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or Governmental Authority.

“Plan” means any “employee benefit plan”, as defined in Section 3(3) of ERISA.

“Pledged Account” shall have the meaning set forth in the Security Agreement.

“Posted Cash” means, at any time, the amount of cash and Cash Equivalents on deposit in the Pledged Account at such time.

“Prime Rate” means the rate of interest per annum that Canadian Imperial Bank of Commerce announces from time to time as its prime lending rate, as in effect from time to time.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  Canadian Imperial Bank of Commerce or the Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Register” has the meaning ascribed to such term in Section 14.10(d).

“Regulation T”, “Regulation U”, and “Regulation X” mean, respectively, Regulations T, U, and X of the Federal Reserve Board or any successor, as the same may be amended or supplemented from time to time.

“Reportable Event” means any of the events described in Section 4043(c) of ERISA or the regulations thereunder other than a Reportable Event as to which the provision of 30 days’ notice to the PBGC is waived under applicable regulations.

“Required Collateral Surplus Deficiency” means, at any time, the aggregate Adjusted Market Value of the Eligible Collateral, plus the aggregate amount of Posted Cash is less than the aggregate Loan Exposure on such day.

“Required Collateral Surplus Deficiency Notice” means a notice substantially in the form of Exhibit E hereto.

“Requirements of Law” means, as to any Person, the charter and by-laws or other organizational or Governing Documents of such Person, and any law, ordinance, rule, regulation, requirement, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, without limitation, the Patriot Act, the Securities Act, the Securities Exchange Act, Regulations T, U and X, ERISA, the Internal Revenue Code, the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or Permit or environmental, labor, employment, occupational safety or health law, rule or regulation.

“Responsible Officer” means, the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of the Borrower, or, solely with respect to the Daily Funds Movement Report, any duly authorized officer of the Borrower.  Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

“Restricted Payments” means, with respect to any Person, (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of, partnership interest of or other equity interest of, such Person, now or hereafter outstanding, except a dividend or distribution payable solely in shares of that class of stock or in any junior class of stock to the holders of that class, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of, partnership interest of or other equity interest of, such Person now or hereafter outstanding, (c) any prepayment of principal of, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect t o any Indebtedness of the Borrower (other than Indebtedness hereunder), (d) any payment of funds out of the Pledged Account, or (e) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of, partnership interest of or other equity interest of, such Person now or hereafter outstanding.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

“Secured Creditors” has the meaning ascribed to such term in the Security Agreement.

“Securities” means any Capital Stock, shares, voting trust certificates, bonds, debentures, notes, loans or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire any of the foregoing, but shall not include the Obligations.

“Securities Account” shall have the meaning provided in Section 8-501(a) of the UCC.

“Securities Act” means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Securitization” means a public or private offering by a Lender or any of its Affiliates or their respective successors and assigns of Securities which represent an interest in, or which are collateralized in whole or in part by, the Loans.

“Security Agreement” means the Pledge and Security Agreement, to be executed and delivered pursuant to this Agreement, between the Borrower and the Collateral Agent, as such agreement may be amended, supplemented or otherwise modified from time to time in accordance therewith and herewith.

“Security Documents” means the Security Agreement, the UCC financing statements, the Control Agreement, and any other documents granting a Lien upon the Collateral as security for all or any part of the Obligations.

“Senior Officer” means, with respect to the Borrower, the Borrower’s president, chief executive officer, chief administrative officer, chief financial officer or chief accounting officer.

“Solvent” or “Solvency” any person means (i) the fair value of the property of such person exceeds its total liabilities (including, without limitation, contingent liabilities), (ii) the present fair saleable value of the assets of such person is not less than the amount that will be required to pay its probable liability on its existing debts as they become absolute and matured, (iii) such person does not intend to incur debts or liabilities beyond its ability to pay, as such debts and liabilities mature, and (iv) such person is not engaged, and is not about to engage, in business or a transaction for which its property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing a t such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Subsidiary” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, association or other entity (a) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP or (b) of which more than 50% of (i) the outstanding Capital Stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors of such corporation, (ii) the interest in the capital or profits of such partnership or limited liability company or (iii) the beneficial interest in such trust or estate is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Pers on.

“Taxes” has the meaning ascribed to such term in Section 3.04(a).

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a LIBOR Rate Loan.

“UCC” means the Uniform Commercial Code enacted in the State of New York, as amended from time to time; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or priority is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Warehouse Agreement” means the Warehouse Facility Agreement, dated as of January 14, 2008, by and between the Borrower and Canadian Imperial Bank of Commerce, as amended from time to time.

SECTION 0.1.

Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplement s or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

SECTION 0.2.

Accounting and Other Terms.  Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given to it under GAAP.  All terms used in this Agreement which are defined in Article 8 or Article 9 of the UCC and which are not otherwise defined herein shall have the same meanings herein as set forth therein.

SECTION 0.3.

Time References.  Unless otherwise indicated herein, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in New York, New York on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; provided, however, that with respect to a computation of fees or interest payable to the Lender, such period shall in any event consist of at least one full day.

ARTICLE I
THE FACILITY

SECTION 1.1.

Loans.

(a)

Loan Commitment.  Subject to the terms and conditions set forth herein, the Lender agrees to make loans (each such loan, a “Loan”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time, the amount of its Commitment.  Within the limits of the Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01(a), prepay under Section 3.01, and reborrow under this Section 2.01(a).  Loans may be Base Rate Loans or LIBOR Rate Loans, as further provided herein.

(b)

Borrowings, Conversions and Continuations of Loans.  (1)  Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of LIBOR Rate Loans shall be made upon the Borrower’s irrevocable notice to the Lender, which shall be given in writing as provided herein.  Each such notice must be received by the Lender not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of LIBOR Rate Loans or of any conversion of LIBOR Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans; provided, however, that if the Borrower wishes to request LIBOR Rate Loans having an Interest Accrual Period of nine months in duration as provided in the definition of “Interest Accrual Period,” the applicable notice must be received by the Lender not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Lender shall determine whether the requested Interest Accrual Period is acceptable to it.  Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Lender shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Accrual Period has been agreed to by it.  Each notice by the Borrower pursuant to this Section 2.02(b)(i) must be given by delivery to the Lender of the Daily Funds Movement Report, appropriately completed and signed by a Responsible Officer of the Borrower.  Each Daily Funds Movement Report that contemplates a Borrowing, conversion or continuation of one or more Loans, shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, (v) wiring instructions for any funds to be credited to the Borrower, and (vi) if applicable, the duration of the Interest Accrual Period with respect thereto.  If the Borrower fails to specify a Type of Loan in a Daily Funds Movement Report that contemplates a Borrowing, conversion or continuation of one or more Loans, or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Accrual Period then in effect with respect to the applicable LIBOR Rate Loans .  If the Borrower requests a Borrowing of, conversion to, or continuation of LIBOR Rate Loans in any such Daily Funds Movement Report that contemplates a Borrowing, conversion or continuation of one or more Loans, but fails to specify an Interest Accrual Period, then the applicable Loans shall be made as, or converted to, Base Rate Loans.

(b)

Making the Loans.  Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Loan, Section 5.01), the Lender shall make such funds available to the Borrower either by wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Lender by the Borrower.

(c)

Continuations/Conversions Generally.  Except as otherwise provided herein, a LIBOR Rate Loan may be continued or converted only on the last day of an Interest Accrual Period for such LIBOR Rate Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued as LIBOR Rate Loans without the consent of the Required Lenders.

(d)

Notification of Interest Rates.  The Lender shall promptly notify the Borrower of the interest rate applicable to any Interest Accrual Period for LIBOR Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Lender shall notify the Borrower of any change in the prime rate used in determining the Base Rate promptly following the public announcement of such change.

SECTION 0.1.

Use of Proceeds.  Proceeds of the Loans may be utilized to (a) prepay or repay maturing Loans, and (b) to acquire or maintain Eligible Collateral.  Proceeds of Loans may not be utilized for any other purpose, including, without limitation, to acquire Cash Equivalents for use as Posted Cash.

SECTION 0.2.

Promise to Pay.  The Borrower agrees to pay the principal amount of the Loans on the dates and in the amounts set forth in Section 3.02 and further agrees to pay all unpaid interest accrued thereon, in accordance with the terms of this Agreement and the Note.

SECTION 0.3.

Note.

(a)

The Borrower’s obligation to pay the principal of, and interest on, the Loans made to the Borrower by the Lender shall be set forth on the Register maintained by the Lender and, subject to the provisions of Section 2.04(c), shall be evidenced by a promissory note substantially in the form of Exhibit B with blanks appropriately completed in conformity herewith (as the same may be amended, supplemented or otherwise modified from time to time, a “Note”).

(b)

The Note issued to the Lender shall (i) be executed by the Borrower, (ii) be payable to the Lender or its registered assigns and be dated the Closing Date, (iii) be in a stated maximum principal amount equal to the Commitment of the Lender on the date of the issuance thereof and be payable in the principal amount of the Loans evidenced thereby from time to time, (iv) mature on the Maturity Date, (v) bear interest as provided for herein and (vi) be entitled to the benefits of this Agreement and the other Loan Documents.

(c)

Notwithstanding anything to the contrary contained above or elsewhere in this Agreement, the Note shall only be delivered to the Lender if it at any time specifically requests the delivery of a Note.  No failure of the Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security therefor provided pursuant to the Loan Documents.  At any time when the Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to the Lender the requested Note in the appropriate amount or amounts to evidence such Loans.

SECTION 0.4.

Allocation of Proceeds of Collateral.  Notwithstanding any other provisions of this Agreement to the contrary, after the exercise of remedies by the Lender, the Collateral Agent or the Lender pursuant to Article XI (or after the Commitment shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Loan Documents shall automatically become due and payable in accordance with the terms hereof), all proceeds of Collateral shall be paid over or delivered to the Lender for distribution as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Collateral Agent in connection with enforcing the rights of the Collateral Agent under the Loan Documents, and to the payment of any fees owed to the Collateral Agent, in its capacity as such;

SECOND, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Lender in connection with enforcing its rights under the Loan Documents with respect to the Borrower’s Obligations owing to the Lender;

THIRD, to the payment of all of the Borrower’s Obligations to the Lender consisting of accrued fees and interest;

FOURTH, to the payment of the outstanding principal amount of the Borrower’s Obligations under this Agreement and the other Loan Documents not repaid pursuant to clause “SECOND” above;

FIFTH, to all other of the Borrower’s Obligations under this Agreement and the other Loan Documents and other obligations to the Lender which shall have become due and payable under the Loans; and

SIXTH, to the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

SECTION 0.5.

Termination or Reduction of Commitments.  ii)  Optional by Borrower.  The Borrower may, upon notice to the Lender, terminate the Commitment, or from time to time permanently reduce the Commitment; provided that (i) any such notice shall be received by the Lender not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $2,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not terminate or reduce Commitment if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate Loan Exposure would exceed the Commitment.

(c)

Optional by Lender.  The Lender may, upon notice to the Borrower, terminate the Commitment, or from time to time permanently reduce the Commitment; provided that any such notice shall be received by the Borrower not later than 4:00 p.m. the Business Day prior to the date of termination or reduction, provided further that the Lender shall, notwithstanding any such termination or reduction, but subject to the other terms of this Agreement, honor the financing of any trades that were (i) entered into accordance with the Loan Documents prior to the date of such termination or reduction, and (ii) which are due to be settled within the next three (3) Business Days.  The Borrower agrees to provide to the Lender upon request documentation reasonably satisfactory to the Lender to establish that one or more trades meets the conditions in (i) and (ii) of the preceding sentence.

ARTICLE I
PAYMENTS AND OTHER COMPENSATION

SECTION 1.1.

Voluntary Prepayments.  The Borrower may, as part of the delivery of a Daily Funds Movement Report to the Lender, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that such Daily Funds Movement Report that contemplates a prepayment of one or more Loans must be received by the Lender not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of LIBOR Rate Loans and (2) on the date of prepayment of Base Rate Loans.  Each such Daily Funds Movement Report that contemplates a prepayment of one or more Loans shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if LIBOR Rate Loans are to be prepaid, the Interest Accrual Period(s) of such Loans.  The Borrower shall make such prepayment and the payment amount specified in such Daily Funds Movement Report shall be due and payable on the date specified in accordance with Section 3.03.  Any prepayment of a LIBOR Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 4.03.  

SECTION 1.2.

[RESERVED]

SECTION 1.3.

Payments.

(a)

General Provisions.  All payments to be made by the Borrower shall be made without set-off, counterclaim or other defense.  Except as otherwise expressly provided herein, all payments by the Borrower shall be made to the Lender at the Lender’s Payment Office, and shall be made in and in immediately available funds, no later than 2:00 p.m. (New York City time), on the dates specified herein.  Any payment received by the Lender later than 2:00 p.m. (New York City time) on any Business Day shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(b)

Payments on Non-Business Days.  Whenever any payment to be made by the Borrower hereunder or under the Notes is stated to be due on a day which is not a Business Day, the payment shall instead be due on the next succeeding Business Day (unless such succeeding Business Day would be in the subsequent calendar month, in which case such payment shall be made on the immediately preceding Business Day).

SECTION 1.4.

Taxes.

(a)

Payment of Taxes.  Except as set forth below, any and all payments by the Borrower hereunder, under the Note or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings imposed by any Governmental Authority, excluding, in the case of the Collateral Agent, each Participant and each Lender, respectively, any taxes imposed by (i) the United States except United States federal gross income withholding taxes imposed as a result of a change in applicable law occurring after the date that such Collateral Agent, Participant and each Lender became party to this Agreement, or (ii) a Governmental Authority as a result of a connection or former connection (other than merely being a party to any Loan Documents, participati ng in the transactions contemplated therein, or enforcing rights thereunder) between a Collateral Agent, such Participant or such Lender and the jurisdiction imposing such tax, including any connection arising from a Collateral Agent, such Participant or such Lender being a citizen, domiciliary, or resident of such jurisdiction, being organized in such jurisdiction, or having a permanent establishment or fixed place of business therein (all such non-excluded taxes, levies, imposts, deductions, charges and withholdings being hereinafter referred to as “Taxes”).  If the Borrower shall be required by law to withhold or deduct any Taxes from or in respect of any sum payable hereunder, under the Note or under any other Loan Document to any Lender or Collateral Agent, (x) such sum payable shall be increased by an additional amount so that after making all required withholdings or deductions (including withholdings or deductions applicable to additional amounts payable under this Secti on 3.04(a)) such Lender or Collateral Agent receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (y) the Borrower shall make such withholdings or deductions, and (z) the Borrower shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with applicable law.  Notwithstanding the foregoing, the Borrower shall not be required to pay any such additional amounts to a Collateral Agent or any Lender with respect to any Taxes or Other Taxes to the extent such Taxes or Other Taxes (i) are attributable to the Lender’s failure to comply with the requirements of Section 3.04(e) or Section 3.04(f), or (ii) in the case of an assignment (including under Section 14.10), participation, acquisition or designation of a new applicable lending officer by a Lender or a Collateral Agent, are United States federal withholding taxes imposed on amounts payable to such Lender or Collateral Agent at the time such Lender or Collateral Agent becomes a party to this Agreement, except to the extent that such Lender’s or Collateral Agent’s assignor was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such Tax pursuant to paragraph, or (iii) result from a change affecting the Lender or Collateral Agent at a time after the Lender or Collateral Agent has become a Lender or Collateral Agent, respectively, other than a change in applicable law or regulation or the introduction of any law or regulation or a change in interpretation or administration of any law.

(b)

Other Taxes.  In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from and which relate directly to the execution, delivery or registration of, or otherwise with respect to, this Agreement, the Note or any other Loan Document and all interest and penalties related thereto other than excluded from Taxes pursuant to Section 3.04(a) (hereinafter referred to as “Other Taxes”).

(c)

Indemnification.  The Borrower will indemnify the Lender if it has complied with the requirements of Section 3.04(e) or Section 3.04(f), against, and reimburse, within twenty (20) days of a receipt of written demand therefor, for the full amount of all Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any Governmental Authority on amounts payable to the Lender under this Section 3.04(c)) incurred or paid by the Lender, or any Affiliate of the Lender on or with respect to any payment by or on account of any obligation of the Borrower hereunder, and any penalties, interest, and reasonable out-of-pocket expenses paid to third parties arising therefrom or with respect thereto.  For the avoidance of doubt, the Borrower shall not be required to indemnify a Lender or Collateral Agent pursuant to this Section 3.04(c) with respect to any Taxes in respect of which the Borrower would not be required to pay any additional amount pursuant to Section 3.04(a) if such Taxes were withheld or deducted by the Borrower.  A certificate as to any amount payable to any Person under this Section 3.04 submitted by such Person to the Borrower shall, absent manifest error, be final, conclusive and binding upon all parties hereto.

(d)

Receipts.  Within thirty (30) days after a request from the Lender (or the Collateral Agent on behalf of such Lender), the Borrower will furnish to the Lender (or the Collateral Agent on behalf of such Lender)the original or a certified copy of a receipt, if available, or other reasonably available documentation reasonably satisfactory to the Lender (or the Collateral Agent on behalf of such Lender) evidencing payment of such Taxes or Other Taxes (including in respect of payments of additional amounts) required to be paid by the Borrower pursuant to this Section 3.04.  The Borrower will furnish to the Lender (or the Collateral Agent on behalf of such Lender) upon the Lender’s request an Officer’s Certificate stating that all Taxes and Other Taxes of which it is aware that are due have been paid and that no addit ional Taxes or Other Taxes of which it is aware are due.

(e)

Nonresident Certifications.  (2) If a Lender or Collateral Agent is not a United States Person (as defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) it shall deliver to the Borrower on or prior to the Closing Date, or, in the case of a Person that becomes a Lender (including pursuant to Section 14.10 hereof), on or prior to the date on which such Person becomes a Lender (including pursuant to Section 14.10 hereof) a true and accurate IRS Form W-8BEN, W-8IMY (with the necessary attachments), W-8EXP, W-8ECI or any subsequent version thereof or successors thereto and such other documentation prescribed by applicable law executed in duplicate by a duly authorized officer of such Lender to the effect that such Lender is eligible as of such date to receive payments hereunder and under the Note free and clear or at a reduced rate of United States federal withholding tax or, in the case of a Person that becomes a Lender (including pursuant to Section 14.10 hereof), that such Lender is subject to United States federal withholding tax at a rate not in excess of the rate to which the assignor was subject as a result of a change in law, as described in Section 3.04(e)(ii)(B).  A Non-U.S. Lender shall not be required to deliver any form pursuant to this Section 3.04(e) that it is not legally able to deliver.

(iii)

Each Non-U.S. Lender further agrees to deliver to the Borrower (or the Collateral Agent on behalf of the Borrower) from time to time a true and accurate certificate executed in duplicate by a duly authorized officer of such Lender before or promptly upon the occurrence of any event requiring a change in the most recent certificate previously delivered by it to the Borrower pursuant to this Section 3.04(e) (including upon the expiration, obsolescence or invalidity of such form, upon the designation of a new lending office and at such other times as may be necessary in the determination of the Borrower (each in the reasonable exercise of its discretion)).  Each certificate required to be delivered pursuant to this Section 3.04(e)(ii) shall certify as to one of the following:

(A)

that such Lender can receive payments hereunder and under the Note free and clear or at a reduced rate of United States federal withholding tax (in which case the certificate shall be accompanied by two duly completed copies of IRS Form W-8BEN, W-8IMY (with the necessary attachments), W-8EXP or W-8ECI, as applicable (or any successor form));

(B)

that such Lender is no longer capable of receiving payments hereunder or under the Note free and clear or at a reduced rate of United States federal withholding tax by reason of a change in law (including the Code or any applicable tax treaty) after the Closing Date, or, in the case of a Person that becomes a Lender (including pursuant to Section 14.10 hereof) after the date on which such Lender became a Lender (including pursuant to Section 14.10 hereof); or

(C)

that the Lender is not capable of receiving payments hereunder free and clear or at a reduced rate of United States federal withholding tax other than by reason of a change in law (including the Code or applicable tax treaty) after the Closing Date, or, in the case of a Person that becomes a Lender (including pursuant to Section 14.10 hereof) after the date on which such Lender became a Lender (including pursuant to Section 14.10 hereof).

(c)

Resident Certifications.  If a Lender or Collateral Agent is a United States Person (as defined in Section 7701(a)(30) of the Code) it shall deliver to the Borrower on or prior to the Closing Date, or, in the case of a Lender (or Collateral Agent) that becomes a Lender (or Collateral Agent) (including pursuant to Section 14.10 hereof) on or prior to the date on which such Lender (or Collateral Agent) became a Lender (or Collateral Agent) (including pursuant to Section 14.10 hereof) two original copies of IRS Form W-9 (or any successor forms), properly completed and duly executed by such Lender (or Collateral Agent), and such other documentation reasonably requested by the Borrower.

(d)

Refunds and Tax Benefits.  If a Lender (or Collateral Agent) becomes aware that it is entitled to claim a refund from a Governmental Authority in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 3.04(a), it shall make reasonable efforts to timely claim to such Governmental Authority for such refund at the Borrower’s expense.  If a Lender (or Collateral Agent) actually receives a payment of a refund (including pursuant to a claim for refund made pursuant to the preceding sentence) in respect of any Tax or Other Tax as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 3.04(a), it shall within 30 days from the date of such receipt pay over the amount of such refund to the Borrower, net of all reasonable out-of-pocket expenses of such Lender (or Collateral Agent) and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of such Lender (or Collateral Agent), agrees to repay the amount paid over to the Borrower (plus penalties, interest or other reasonable charges) to such Lender or Collateral Agent in the event the Lender is required to repay such refund to such Governmental Authority.

ARTICLE I
INTEREST

SECTION 1.1.

Interest on the Loans and Other Obligations.

(a)

Interest on Loans.  The Borrower agrees to pay interest on the unpaid principal amount of each Loan on each Interest Payment Date from the date of such Loan until such Loan is repaid in full at a rate equal to the Interest Rate for such Loan.  The Borrower shall pay accrued interest on the Loans in cash on each Interest Payment Date.  All computations of interest hereunder shall be made on the actual number of days elapsed over a year of, with respect to LIBOR Rate Loans, 360 days or, with respect to Alternate Base Rate Loans only, 365/366 days.

(b)

Default Interest.  So long as any Event of Default shall be continuing, the rate of interest applicable to the Loans then outstanding or due and owing and any other amount bearing interest hereunder shall each be increased by 2% per annum above the Interest Rate otherwise applicable to the applicable Loans.

(c)

Maximum Interest.  Notwithstanding anything to the contrary set forth in this Section 4.01(c), if at any time until payment in full of the Loans, the interest rate payable on any Loans exceeds the highest rate of interest permissible under any law which a court of competent jurisdiction shall deem applicable hereto (the “Highest Lawful Rate”), then in such event and so long as the Highest Lawful Rate would be so exceeded, the rate of interest payable on such Loans shall be equal to the Highest Lawful Rate.  Thereafter, the interest rate payable on such Loans shall be the applicable interest rate pursuant to paragraphs (a) and (b) above unless and until such rate again exceeds the Highest Lawful Rate, in which event this paragraph shall again apply.  In no event shall the total interest received by the Lender for any Loans pursuant to the terms hereof exceed the amount which it could lawfully have received for such Loans had the interest due hereunder for such Loans been calculated for the full term thereof at the Highest Lawful Rate.  Interest on the Highest Lawful Rate shall be calculated at a daily rate equal to the Highest Lawful Rate divided by the number of days in the year in which such calculation is made.  In the event that a court of competent jurisdiction, notwithstanding the provisions of this Section 4.01(c), shall make a determination that the Lender has received interest hereunder or under any of the Loan Documents in excess of the Highest Lawful Rate, the Lender shall, to the extent permitted by Applicable Law, promptly apply such excess first to any interest due or accrued and not yet paid under the Loans, then to the outstanding principal of the Loans, then to other unpaid Obligations and thereafter shall refund any excess to the Borrower or as a cour t of competent jurisdiction may otherwise order.

SECTION 1.2.

[RESERVED]

SECTION 1.3.

Break Funding Payments.  In the event of the payment of any principal of any LIBOR Rate Loan other than on the last day of the Interest Accrual Period applicable thereto (including as a result of an Event of Default), or the failure to borrow or prepay any Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate the Lender for the loss, cost and expense (excluding in any event any Applicable Margin or other lost profit) attributable to such event.  A certificate of the Lender setting forth any amount or amounts that the Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay the Lender the amount shown as due on any such certificate within five (5) days after receipt thereof.

SECTION 1.4.

Change in Law; Illegality.

(a)

If the adoption or implementation of, or any change in (or the interpretation, administration or application of) any Applicable Law shall, in each case after the date hereof, (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Lender (except any such reserve requirement reflected in the LIBOR Rate) or (ii) impose on the Lender or the London interbank market any other condition affecting this Agreement or LIBOR Rate Loans made by the Lender; the result of any of the foregoing shall be to increase the cost to the Lender of maintaining any LIBOR Rate Loan or to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to the Lender su ch additional amount or amounts as will compensate the Lender for such additional costs incurred to the extent that the Lender reasonably determines that such increase in cost be allocable to the existence of the Lender’s LIBOR Rate Loans.

(b)

If the Lender reasonably determines that the introduction of or any change in any Applicable Law regarding capital requirements, in each case after the date hereof, has or would have the effect of reducing the rate of return on the Lender’s capital as a consequence of this Agreement or the Loans made by the Lender to a level below that which the Lender could have achieved but for such change in the Applicable Law (taking into consideration the Lender’s policies with respect to capital adequacy), then from time to time the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for any such reduction suffered to the extent that the Lender reasonably determines that such additional amounts are allocable to the existence of the Lender’s Loans.

(c)

A certificate of the Lender setting forth in reasonable detail the amount or amounts necessary to compensate the Lender as specified in paragraph (a) or (b) of this Section 4.04 shall be delivered to the Borrower and shall be binding and conclusive for all purposes, so long as it reflects the basis for the calculation of the amounts set forth therein and does not contain any manifest error.  The Borrower shall pay the Lender the amount shown as due on any such certificate within ten days after receipt thereof.  Notwithstanding the foregoing, (i) the Lender shall take such actions (including changing the office of location of the funding of the Loans) that the Borrower may reasonably request in order to reduce the amounts payable under Sections 4.04(a) or (b), provided that the Bo rrower shall reimburse the Lender for any costs incurred by the Lender in doing so to the extent that the Lender reasonably determines that such costs are allocable to the Borrower with respect to the existent of the Lender’s Loans or commitment to lend hereunder and provided further that the Lender shall only be required to take such actions if it determines in good faith that such actions would not be disadvantageous to it, and (ii) the Borrower shall not be required to compensate the Lender under Sections 4.04(a) and (b) for any costs or additional amounts arising more than 180 days prior to the date that the Lender notifies the Borrower of the event giving rise to such costs and amounts of the Lender’s intention to claim compensation therefor and, if the event giving rise to such increased costs and amounts is retroactive, then the 180-day period referred to in this clause (ii) shall be extended to include the period of retroactive effect therefor.

(d)

Notwithstanding anything to the contrary contained herein, if the adoption or implementation of, or any change in, any Applicable Law shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for the Lender to agree to make or to continue to fund or maintain any LIBOR Rate Loan, then, unless the Lender is able to make or to continue to fund or to maintain such LIBOR Rate Loan at another branch or office of the Lender without, in the Lender’s opinion, adversely affecting it or its LIBOR Rate Loans or the income obtained therefrom, on notice thereof and demand therefor by the Lender to the Borrower, (i) the obligation of the Lender to make, to continue to fund or maintain LIBOR Rate Loans shall terminate and (ii) the Borrower shall, on the next Daily Funds Movement Report, request that all outstanding LIBOR Rate Loans owing by the Borrower to the Lender be converted to Base Rate Loans.  Interest accrued thereon shall be paid on the date of conversion, together with any amounts due pursuant to Section 4.03, but no premium or penalty shall be payable.

ARTICLE II
CONDITIONS TO LOANS

SECTION 2.1.

Conditions Precedent to the Initial Loans.  The obligation of the Lender to make the initial Loans requested to be made by it on or after the Closing Date, shall be subject to the satisfaction, or waiver by the Lender, of all of the following conditions precedent:

(a)

Authority.  The Lender shall have received certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the authorization for the execution, delivery and performance of each Loan Document by the Borrower and for the consummation of the transactions contemplated thereby.  All certificates shall state that the resolutions or other information referred to in such certificates have not been amended, modified, revoked or rescinded as of the Closing Date.

(b)

Loan Documents.  The Lender shall have received, on the Closing Date, counterparts of each of the following documents duly executed and delivered by each party thereto, and in full force and effect and reasonably satisfactory to the Lender:

(i)

this Agreement;

(ii)

the Note;

(iii)

the Security Documents;

(iv)

such corporate resolutions, certificates and other documents as the Lender reasonably requests; and

(v)

each other Loan Document, in each case duly executed and delivered by the parties thereto and dated no later than the Closing Date, except for those Loan Documents that are dated prior to the Closing Date and have been delivered prior to the Closing Date to the Lender by the Borrower.

(c)

Capital Stock; Perfection of Liens.  All of the Capital Stock of the Borrower shall be indirectly wholly owned by the Parent.  The Collateral Agent, on behalf of the Secured Creditors, shall have a perfected first priority lien and security interest in the Collateral subject to any Permitted Encumbrances; all filings, recordations and searches necessary or desirable in connection with such liens and security interests shall have been duly made or arranged for; and all filing and recording fees and taxes shall have been duly paid.

(d)

No Material Adverse Effect.  There shall not have occurred any event, circumstance, change or condition which could reasonably be expected to have a Material Adverse Effect.

(e)

Consents, Etc.  The Borrower shall have received all material consents and authorizations required to be obtained, and shall have obtained all material Permits of, or approvals from, and effected all notices to and filings with, any Governmental Authority as may be necessary to allow the Borrower lawfully (A) to execute, deliver and perform, in all material respects, its obligations under the Loan Documents and each other agreement or instrument to be executed and delivered by it pursuant thereto or in connection therewith, (B) consummate the transactions contemplated hereunder and under the other Loan Documents and (C) create and perfect the Liens on the Collateral to be owned by it to the extent, in the manner and for the purpose contemplated by the Loan Documents.  The Borrower shall have received all shareholder, G overnmental and material third-party consents and approvals necessary in connection with the transactions contemplated by the Loan Documents, and any applicable waiting period shall have expired without any action being taken by any Governmental Authority that could restrain, prevent or impose any material adverse conditions on the Borrower or such transactions or that could seek to restrain or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Lender could have such effect.  

(f)

Solvency.  Immediately prior to the incurrence of the initial Loans on or after the Closing Date, and after giving effect to such Loans, and use of the proceeds of the Loans, the Borrower shall be Solvent and the Lender shall have received a solvency certificate from the chief financial officer of the Borrower, on behalf of the Borrower (and not in such officer’s individual capacity), dated the Closing Date, in a form reasonably satisfactory to the Lender.

(g)

Opinions of Borrower’s Counsel.  The Lender shall have received (i) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Borrower, in substantially the form of Exhibit C-1, and (ii) the opinion of Dennis McNamara, General Counsel of the Borrower, in substantially the form of Exhibit C-2.

(h)

Good Standing Certificates.  The Lender shall have received, on the Closing Date, governmental certificates, dated the most recent practicable date prior to the Closing Date, showing that the Borrower is organized and in good standing in the jurisdiction of its organization, and is qualified as a foreign corporation and in good standing in all other jurisdictions in which it is qualified to transact business except where the failure to so qualify could not reasonably be expected to have Material Adverse Effect.

(i)

Organizational Documents.  The Lender shall have received, on the Closing Date, a copy of the certificate of incorporation or certificate of formation, as applicable, and all amendments thereto of the Borrower, certified as of a recent date by the appropriate government official of the jurisdiction of its organization, and copies of the Borrower’s by-laws or limited liability company agreement, as applicable, certified by the Secretary, Assistant Secretary or managing member, as applicable, of the Borrower as true and correct as of the Closing Date.

(j)

Certificates.  The Lender shall have received, on the Closing Date:

(i)

certificates of the Secretary, Assistant Secretary or managing member of the Borrower, dated the Closing Date, as to the incumbency and signatures of its officers executing this Agreement and each other Loan Document and any other certificate or other document to be delivered pursuant hereto or thereto, together with evidence of the incumbency of such Secretary, Assistant Secretary or managing member.

(ii)

The Lender shall have received, on the Closing Date, the certificate of a Senior Officer of the Borrower, dated the Closing Date, stating that to the knowledge of such officer and on behalf of the Borrower (not in such officer’s individual capacity) all of the representations and warranties of the Borrower contained herein or in any of the other Loan Documents are true and correct in all material respects on and as of the Closing Date as if made on such date, that no breach of any covenant contained in Articles VIII or IX has occurred or would result from the Closing hereunder and that all of the conditions set forth in this Section 5.01(j)(ii) have been satisfied on such date (or shall, to the extent permitted therein, be satisfied substantially simultaneously with the incurrence of the initial Loans on or after t he Closing Date).

(k)

Representations and Warranties.  As of the Closing Date, all of the representations and warranties of the Borrower contained in Article VI and in the other Loan Documents shall be true and correct in all material respects (except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(l)

No Defaults.  As of the Closing Date, no Event of Default or Default shall have occurred and be continuing or would result from the execution and delivery of, or the performance under, the Loan Documents, or making the requested Loan or the application of the proceeds therefrom.

SECTION 2.2.

Conditions Precedent to all Loans.  The obligation of the Lender to honor any Daily Funds Movement Report that contemplates a Borrowing is subject to the following conditions precedent:

(a)

All of the representations and warranties of the Borrower contained in Article VI and in the other Loan Documents, shall be true and correct on in all material respects and as of the date of such Loan, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date,

(b)

No Default or Event of Default shall have occurred or be continuing, or would occur or continue as a result from such proposed Loan or from the application of the proceeds thereof,

(c)

No Required Collateral Surplus Deficiency shall have occurred and be continuing, or would occur or continue as a result from such proposed Loan or from the application of the proceeds thereof, and

(d)

The Lender shall have received a Daily Funds Movement Report in accordance with the requirements hereof.

Each Daily Funds Movement Report that contemplates a Borrowing submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a) through (c) have been satisfied on and as of the date of the applicable Loan.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

SECTION 3.1.

Representations and Warranties.  In order to induce the Lender to enter into this Agreement and to make the Loans, the Borrower hereby represents and warrants as follows:

(a)

Organization, Good Standing, Etc.  The Borrower (i) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated, to make the borrowings hereunder, to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification ne cessary for its business as currently conducted.

(b)

Authorization, Etc.  The execution, delivery and performance by the Borrower of each Loan Document and the transactions contemplated thereunder, (i) have been duly authorized by all necessary corporate, limited liability company or partnership action, as applicable, (ii) do not and will not contravene its Governing Documents, (iii) do not and will not violate any Requirements of Law or any Material Contract of the Borrower binding on or otherwise affecting it or any of its properties except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and (iv) do not and will not result in or require the creation of any Lien (other than Permitted Encumbrances or pursuant to any Loan Document) upon or with respect to any of its properties.  The Borrowe r has the requisite corporate, limited liability company or partnership power and authority, as applicable, to execute, deliver and perform each of the Loan Documents to which it is a party.

(c)

Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority that has not been obtained is required in connection with the due execution, delivery and performance by the Borrower of each Loan Document.

(d)

Enforceability of Loan Documents.  Each of the Loan Documents has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, or by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(e)

Subsidiaries.  The Borrower has no Subsidiaries.

(f)

ERISA.  Neither the Borrower nor any ERISA Affiliate has (i) any “accumulated funding deficiency” (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, with respect to any Benefit Plan, (ii) failed to make any contribution or payment to any Benefit Plan which has resulted, or could reasonably be expected to result, in the imposition of a Lien or the posting of a bond or other security under Section 302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred, or is reasonably likely to incur, any material liability under Title IV of ERISA (other than a liability to the PBGC for premiums under Section 4007 of ERISA) or (iv) violated any provision of ERISA that individually or in the aggregate can reasonably by expected to result in a material liability to the Bor rower and its Subsidiaries taken as a whole.  Neither the Borrower nor any ERISA Affiliate is obligated to contribute to a Multiemployer Plan.

(g)

Taxes, Etc.  All Federal, state, provincial and material local tax returns and other material reports required by Applicable Law to be filed by the Borrower have been filed, or extensions have been obtained, except to the extent subject to a Permitted Protest, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon the Borrower and upon its properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable; provided, however, that such taxes, assessments or governmental charges referred to above need not be paid to the extent such taxes, assessments or governmental charges are being contested pursuant to a Permitted Protest or, in the aggregate, do not exceed $250,000 at any time.

(h)

Margin Regulations.  No proceeds of any Loan will be used for any purpose that violates, or which is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System of the United States, as in effect from time to time.  None of the Collateral is “margin stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System of the United States, as in effect from time to time.

(i)

Solvency.  The Borrower is and, after giving effect to each of the transactions contemplated by the Loan Documents, the Borrower will be, solvent.

(j)

Investment Company Act.  The Borrower is not subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.

(k)

Security Interests.  Each Security Document creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral purported to be secured thereby.  Upon the filing of the UCC-1 financing statements, such security interests in and Liens on the Collateral granted thereby shall be perfected security interests, in each case to the extent a Lien thereon can be perfected by filing pursuant to the UCC, and no further recordings or filings are or will be required in connection with the creation, perfection or enforcement of such security interests and Liens, other than (i) the filing of continuation statements or financing change statements in accordance with Applicable Law, and (ii) additional filings if the Borrower changes its name, identity or organizational structure or the jurisdiction in which the Borrower is organized.

ARTICLE IV
REPORTING COVENANTS

The Borrower covenants and agrees that, from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) until all amounts owing hereunder or under any Security Document or in connection herewith or therewith have been paid in full, that:

SECTION 4.1.

Financial Statements, Collateral Reporting.  The Borrower (i) shall keep proper books of record and account, in which true and correct entries shall be made of all material financial transactions and the assets and business of the Borrower, and (ii) shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP, and each of the financial statements described below shall be prepared from such system and records.  The Borrower shall deliver or cause to be delivered to the Lender:

(a)

Quarterly Reports, Form 8-Ks.  As soon as available, but in any event within forty-five (45) days after the end of each Fiscal Quarter in each Fiscal Year (excluding the last Fiscal Quarter of each Fiscal Year), (i) the unaudited balance sheet of the Borrower as at the end of such period (together with, if compiled in the ordinary course of business, the related unaudited income statement and statement of cash flows), (ii) a certificate of a Responsible Officer of the Borrower stating that such unaudited financial information fairly presents, in all material respects, the balance sheet position (or financial position, if the income statement and statement of cash flows are provided) of the Borrower as at the dates indicated, such financial statement(s) in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes and (iii) a copy of each Form 10-Q (together with all exhibits) filed by the Parent with the SEC.  Promptly following the filing thereof with the SEC, the Borrower shall provide to the Lender a copy of each Form 8-K (together with all exhibits) filed by the Parent with the SEC.

(b)

Annual Report.  As soon as available, but in any event within one hundred twenty (120) days after the end of each Fiscal Year, (i) the unaudited consolidating balance sheet of the Borrower as of the end of such Fiscal Year as used in the Parent’s consolidated balance sheet as of the end of such Fiscal Year (together with, if compiled in the ordinary course of business, the related unaudited consolidating income statement and consolidating statement of cash flows as used in the Parent’s consolidated income statement and consolidated statement of cash flows as of the end of such Fiscal Year), and (ii) a copy of each Form 10-K, and each Proxy Statement (together with all exhibits) filed by the Parent with the SEC.

(c)

Officer’s Certificate; Etc.  Together with each delivery of any financial statement pursuant to subsections (a) and (b) of this Section 7.01 (other than those of the Parent), an Officer’s Certificate substantially in the form of Exhibit D attached hereto and made a part hereof, stating that a Responsible Officer signatory thereto has reviewed the terms of the Loan Documents, and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and financial condition of the Borrower during the accounting period covered by such financial statements, that such review has not disclosed the existence during or at the end of such accounting period, and that such officer does not have knowledge of the existence as at the date of such Officer’s Certificate, of any con dition or event which constitutes an Event of Default or a continuing Default, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken, is taking and propose to take with respect thereto (the “Officer’s Certificate”).

(d)

Daily Funds Movement Reports.  By no later than 10:30 a.m. Eastern Time on each Business Day, the Borrower shall deliver to the Lender a Daily Funds Movement Report substantially in the form of Exhibit A attached hereto and made a part hereof, signed by the Borrower’s chief financial officer or controller, setting forth (i) the Borrower’s estimate of the Market Value of the Eligible Collateral using the LSTA Data Service, (ii) the amount of Posted Collateral, and (iii) the aggregate Loan Exposure, in each case as of the close of business on the preceding Business Day, together with calculations (with such specificity as the Lender may reasonably request) demonstrating that as of the close of business on the preceding Business Day of (after giving effect to all acquisitions and dispositions of Collateral permitted under th e Loan Documents, and the making, prepayment or repayment of Loans made hereunder on such Business Day), no Required Collateral Surplus Deficiency existed.

SECTION 4.2.

Other Information and Event Reporting.  

(a)

Underlying Collateral Reporting.  Not later than five Business Days after receipt thereof by the Borrower, it shall provide to the Lender copies of all notices, requests and other documents (including amendments, waivers and other modifications) so received under or pursuant to any document relating to the Collateral or any instrument, indenture, loan or credit or similar agreement relating to the Collateral, and, from time to time upon request by the Lender, such information and reports regarding any document relating to the Collateral or any instrument, indenture, loan or credit or similar agreement relating to the Collateral as the Lender may reasonably request.

(b)

ERISA.  Promptly upon becoming aware thereof, it shall provide to the Lender written notice of the occurrence of any ERISA Event.

SECTION 4.3.

Defaults, Events of Default, Collateral Deficiencies.  

(a)

Promptly upon any Responsible Officer obtaining knowledge (i) of any condition or event which constitutes an Event of Default or Default, the Borrower shall deliver to the Lender an Officer’s Certificate specifying (A) the nature and period of existence of any such claimed default, Event of Default, Default, condition or event, (B) the notice given or action taken by such Person in connection therewith and (C) what action the Borrower has taken, is and proposes to take with respect thereto.

(b)

Promptly (and in any event by 10:30 am Eastern Time on the next Business Day) upon any Responsible Officer obtaining knowledge of any Required Collateral Surplus Deficiency, the Borrower shall deliver to the Lender an Officer’s Certificate specifying (A) the nature and period of existence of such deficiency, (B) the action taken by the Borrower in connection therewith and (C) what further action the Borrower is taking or proposes to take with respect thereto.

ARTICLE V
AFFIRMATIVE COVENANTS

The Borrower covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) until all amounts owing hereunder or under any Security Document or in connection herewith or therewith have been paid in full, that:

SECTION 5.1.

Compliance with Laws.  The Borrower shall comply with all Requirements of Law (including with respect to the licenses, approvals, certificates, permits, franchises, notices, registrations and other governmental authorizations necessary to the ownership of its respective properties or to the conduct of its respective business, antitrust laws or laws with respect to social security and pension funds obligations) except, in each case, where the failures to do so, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.2.

Payment of Taxes and Claims.  The Borrower shall pay (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property, and (b) all claims (including claims for labor, services, materials and supplies) for sums material in the aggregate to the Borrower which have become due and payable and which by law have or may become a Lien upon any of the Borrower’s properties or assets, in each case prior to the time when any penalty or fine will be incurred by the Borrower with respect thereto, except for (i) such taxes, assessments, other governmental charges and claims that are being contested in a Permitted Protest or (ii) to the extent that the failure to do so could not, individually or in the aggregate, reasonably be expect ed to result in a Material Adverse Effect.

SECTION 5.3.

Conduct of Business and Preservation of Corporate Existence.  The Borrower shall (a) continue to engage in its Current Business, and (b) preserve and maintain its corporate existence, rights (charter and statutory), licenses, consents, permits, notices or approvals and franchises deemed material to its business; provided that the Borrower shall not be required to preserve any right or franchise if (i) the Borrower shall determine in good faith that the preservation thereof is no longer necessary, and (ii) that the loss thereof could not reasonably be expected to have a Material Adverse Effect, and provided further that this Section 8.03 shall not prohibit any merger, consolidation, liquidation or dissolution otherwise permitted by Section 9.03 or any sale, transfer or other Disposition permitted under < U>Section 9.04.

SECTION 5.4.

Further Assurances.  The Borrower shall take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as the Collateral Agent may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected first priority Liens (except for Permitted Encumbrances) on any of the Collateral or any other property of the Borrower acquired after the Closing Date and required to be so perfected pursuant to any Loan Document, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby (except for Permitted Encumbrances), and (iv) to better assure, convey, gra nt, assign, transfer and confirm unto the Collateral Agent for the benefit of the Lender the rights now or hereafter intended to be granted to the Collateral Agent for the benefit of the Lender under this Agreement or any other Loan Document.

SECTION 5.5.

Conduct of Business.  The Borrower shall qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified except for those jurisdictions where failure to so qualify does not have or could not reasonably be expected to have a Material Adverse Effect.

SECTION 5.6.

Use of Proceeds.  Proceeds of the Loans shall be used in accordance with Section 2.02 hereof.

SECTION 5.7.

Formation of Subsidiaries.  The Borrower shall have no Subsidiaries.

SECTION 5.8.

Collateral Calculations and Maintenance.

(a)

Collateral Maintenance.  The Borrower shall ensure that, on each Business Day (after giving effect to all acquisitions and dispositions of Collateral permitted under the Loan Documents, and the making, prepayment or repayment of Loans made hereunder on each applicable Business Day), no Required Collateral Surplus Deficiency shall exist.

(b)

Determination of Market Price.  The “Market Price” for any Eligible Collateral shall be the price assigned thereto by the Lender from time to time in its sole discretion, as advised to the Borrower by written notice and in a manner consistent with the Lender’s current and past practices.  If the result of such notice is that a Required Collateral Surplus Deficiency shall then exist, such notice shall also constitute notice of such Required Collateral Surplus Deficiency for purposes of the definition of “Cure Time.”  

SECTION 5.9.

Assignment Fees.  

(a)

If the terms of any applicable underlying credit agreement in respect of which the Borrower is involved in a trade do not require payment of any Assignment Fee, no fee hereunder is chargeable to, or owed by, the Borrower in respect of such trade.

(b)

Canadian Imperial Bank of Commerce (or its affiliate, as appropriate) shall waive any Assignment Fee that would otherwise be due and payable under the terms of any applicable underlying credit agreement in respect of any trade in which the Borrower is either buyer or seller, and the Borrower shall not be liable hereunder or thereunder to make any payment on account of an Assignment Fee in respect of such trade.  

(c)

If the Borrower requests Canadian Imperial Bank of Commerce (or its affiliate, as appropriate) to waive collection of any Assignment Fee that would otherwise be due and payable under the terms of any applicable underlying credit agreement in respect of any trade in which the Borrower is not buyer or seller, the Borrower shall pay to the Lender on the last Business Day of each month, an amount equal to all such Assignment Fees waived during such month.  All amounts paid on account of such waived Assignment Fees shall be non-refundable.  

ARTICLE VI
NEGATIVE COVENANTS

The Borrower covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) so long as the Lender shall have its Commitment hereunder and until all amounts owing hereunder or under any other Loan Document or in connection herewith or therewith have been paid in full that:

SECTION 6.1.

Liens.  It shall not create, incur, assume or suffer to exist any Lien upon or with respect to any of the Collateral, whether now owned or hereafter acquired, other than Permitted Encumbrances.

SECTION 6.2.

Indebtedness.  It shall not create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to any Indebtedness, including, without limitation, Indebtedness of E.A. Viner International Co, other than Permitted Indebtedness.

SECTION 6.3.

Consolidation, Merger, Subsidiaries, Etc.  It shall not (a) liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or (b) purchase or otherwise acquire all or substantially all of the Capital Stock or assets of any Person (or of any division or business unit thereof).

SECTION 6.4.

Collateral Dispositions, Etc.  It shall not sell, transfer, lease or otherwise dispose of, or grant options, warrants or other rights with respect to, any of the property from time to time constituting Collateral, except:

(a)

sales, transfers, leases or other dispositions of Collateral or rights to Collateral in the ordinary course of business and where such transactions are conducted in compliance with the Security Documents; and

(b)

otherwise in the ordinary course of business following its release from the lien of the Security Documents in accordance with the terms thereof.

SECTION 6.5.

Negative Pledges.  It shall not enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, except (i) pursuant to this Agreement and the Security Documents, or the Warehouse Agreement, (ii) pursuant to any document or instrument governing Capital Lease Obligations or purchase money debt incurred pursuant to Section 9.02 if any such restriction contained therein relates only to the asset or assets acquired in connection therewith or in connection with any Lien permitted by Section 9.01 or any Disposition permitted by Section 9.04; (iii) prohibitions or conditions under applicable law, rule or regulation; (iv) customary provisions restricting subletting or assignment of any lease governing any leasehold intere st of the Borrower the Borrower; (vi) customary provisions restricting assignment of any licensing agreement or other contract entered into by the Borrower in the ordinary course of business; or (vii) restrictions on the transfer of any asset pending the close of the sale of such asset.

SECTION 6.6.

Federal Reserve Regulations.  It shall not use any Loan or the proceeds of any Loan for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X.

SECTION 6.7.

Investment Company Act of 1940.  It shall not engage in any business, enter into any transaction, use any Securities or take any other action that would cause it to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.

SECTION 6.8.

Impairment of Security Interests.  Except as otherwise permitted pursuant to any of the Loan Documents, it shall not, directly or indirectly, take any action or do anything that would have the effect of terminating, limiting or impairing the perfection or priority of any Lien securing the Obligations except as expressly permitted under any Loan Document.

SECTION 6.9.

Restricted Payments.  It shall not make any Restricted Payment, if, at the time of declaration and payment thereof, a Default, Event of Default or Required Collateral Surplus Deficiency shall exist or would result from such declaration and payment.

ARTICLE VII
[RESERVED]

ARTICLE VIII
EVENTS OF DEFAULT, RIGHTS AND REMEDIES

SECTION 8.1.

Events of Default.  Each of the following occurrences shall constitute an event of default (an “Event of Default”) under this Agreement.

(a)

Failure to Make Payments When Due.  The Borrower shall fail to pay (i) any principal or reimbursement obligations when due or (ii) any interest, fees, or any other monetary Obligation, and such failure shall continue for a period of three (3) Business Days after such amount was due (in each case, whether by scheduled maturity, required prepayment, acceleration, demand or otherwise).

(b)

Breach of Certain Covenants.  The Borrower shall fail to perform or comply with any covenant or agreement contained in Sections 8.03, 8.05, 8.06, 8.07 or Article IX under this Agreement.

(c)

Required Collateral Surplus.  A Required Collateral Surplus Deficiency shall not have been remedied by the Cure Time.

(d)

Breach of Representation or Warranty. Any representation, warranty or statement made or deemed made by or on behalf of the Borrower or by any officer of the Borrower under any Loan Document or in any report, certificate, or other document delivered to the Lender pursuant to any Loan Document, shall prove to be incorrect or misleading in any material respect when made or deemed made for a period of thirty (30) days after learning of such failure or receiving written notice thereof from the Lender.

(e)

Other Defaults (Thirty (30) Day Cure).  The Borrower shall fail to perform or comply with any other covenant or agreement and such failure continues for a period of thirty (30) days after learning of such failure or receiving written notice thereof from the Lender.

(f)

Termination Under Warehouse Facility.  A Termination Event shall have occurred and be continuing under the Warehouse Agreement.

(g)

Voluntary Bankruptcy Proceeding.  The Borrower (i) shall institute any proceeding or voluntary case seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, receiver and manager, interim receiver, sequestration, administrator, monitor, custodian or other similar official for the Borrower or for any substantial part of its property, (ii) shall consent to the entry of an order for relief in an involuntary bankruptcy case or to the conversion of an involuntary case to a voluntary case under bankruptcy, insolvency or reorganiza tion law, (iii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iv) shall make a general assignment for the benefit of creditors or (v) shall take any action to authorize or effect any of the actions set forth above in this Section 11.01(g).

(h)

Involuntary Bankruptcy Proceeding.

(i)

An involuntary case shall be commenced against the Borrower and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Borrower in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect; or any other similar relief shall be granted under any applicable federal, state, provincial, local or foreign law; or the board of directors of the Borrower (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(ii)

A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, receiver and manager, administrator, monitor, custodian or other officer having similar powers over the Borrower or over all or a substantial part of its assets shall be entered; or an interim receiver, trustee or other custodian of the Borrower or of all or a substantial part of its assets shall be appointed or a warrant of attachment, execution or similar process against any substantial part of its assets shall be issued and any such event shall not be stayed, dismissed, bonded or discharged; or the board of directors of the Borrower (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(i)

Invalidity of Documents.  A court of competent jurisdiction shall declare that any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the Borrower intended to be a party thereto; or the validity or enforceability thereof shall be contested by the Borrower; or a proceeding shall be commenced by the Borrower or any Governmental Authority having jurisdiction over the Borrower, seeking to establish the invalidity or unenforceability thereof; or the Borrower shall deny in writing that it has any liability or obligation purported to be created under any Loan Document.

(j)

Loan Documents; Impairment.  At any time, for any reason, (i) any Loan Document shall for any reason (other than pursuant to the express terms hereof or thereof) fail or cease to create a valid and perfected Lien on any Collateral or the Liens intended to be created or perfected thereby are, or the Borrower seeks to render such Liens, invalid or unperfected with respect to any Collateral except as otherwise contemplated hereby or thereby, or (ii) Liens with respect to any Collateral in favor of the Collateral Agent contemplated by the Loan Documents shall be invalidated or otherwise cease to be in full force and effect, or such Liens shall be subordinated or shall not have the priority contemplated hereby or by the other Loan Documents (subject to Permitted Encumbrances and to the exceptions set forth in the applicable Security Documents).

(k)

Change of Control.  A Change of Control shall have occurred.

(l)

ERISA.  With respect to any Plan or Benefit Plan, as applicable, (i) a prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA occurs which could reasonably be expected to result in material liability to the Borrower, (ii) any accumulated funding deficiency (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, shall exist with respect to any Benefit Plan, or (iii) the occurrence of any ERISA Event; provided, however, that the events listed in clauses (i) through (iii) shall constitute Events of Default only if the liability or deficiency of the Borrower or any ERISA Affiliate, would reasonably be expected to exceed $5,000,000 in the aggregate for all such events.  

SECTION 8.2.

Remedies.  If any Event of Default specified in Section 11.01 shall have occurred and be continuing, the Lender may, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Lender to enforce its claims against the Borrower:  (i) terminate or reduce its Commitment, whereupon the Commitment shall immediately be terminated or reduced, (ii) declare all or a portion of the Loans then outstanding to be due and payable, whereupon all or such portion of the aggregate principal of such Loans, all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and all other Obligations shall become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower and (iii) exercise any and all of its other rights and remedies hereunder, under the other Loan Documents, under applicable law and otherwise; provided, however, that upon the occurrence of any Event of Default described in subsection (f) or (g) of Section 11.01, the Commitment shall automatically terminate and the Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other amounts due under this Agreement shall become immediately due and payable automatically, without presentment, demand, protest or notice of any kind, all of which are expressly waived by the Borrower.

SECTION 8.3.

Waivers by the Borrower.  Except as otherwise provided for in this Agreement and Applicable Law, the Borrower waives (i) presentment, demand, protest, notice of presentment or dishonor, notice of intent to accelerate and notice of acceleration, (ii) all rights to notice and a hearing prior to the Lender’s taking possession or control of, or to the Lender’s replevin, attachment or levy upon, any collateral securing the Obligations or any bond or Security which might be required by any court prior to allowing the Lender to exercise any of its remedies, (iii) the benefit of all valuation, appraisal and exemption laws and (iv) all rights of set-off against the Lender as it applies to the payment of the Obligations.  The Borrower acknowledges that it has been advised by counsel of its choice with respect to this Agreement, the other Loan Documents and the transactions evidenced by this Agreement and the other Loan Documents.

ARTICLE IX
[RESERVED]

ARTICLE X
THE COLLATERAL AGENT

SECTION 10.1.

Appointment Powers and Immunities; Delegation of Duties, Liability of Collateral Agent, Rights of Collateral Agent.

(a)

The Lender hereby irrevocably designates and appoints Canadian Imperial Bank of Commerce as its Collateral Agent under this Agreement and the other Loan Documents.  The Lender hereby irrevocably authorizes the Collateral Agent to take such action on such Lender’s behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  The Collateral Agent agrees to act as such on the express conditions contained in this Article XIII.  The provisions of this Article XIII are solely for the benefit of the Collateral Agent and the Lender.  Neither the Borrower nor any other Persons shall have any r ights as third-party beneficiaries of any of the provisions contained herein; provided, however, that the right to consent to a successor Collateral Agent as provided under Section 13.07 also shall be for the benefit of the Borrower.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Collateral Agent have or be deemed to have any fiduciary relationship with the Lender and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Collateral Agent; it being expressly understood and agreed that the use of the word “Agent” is for convenience only and that the Collateral Agent is merely the representative of the Lender, and has only the contractual duties set forth in th is Agreement and the other Loan Documents.  Except as expressly otherwise provided in this Agreement, the Collateral Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions which the Collateral Agent is expressly entitled to take or assert under or pursuant to this Agreement and the other Loan Documents.  The Lender shall have no right of action whatsoever against the Collateral Agent as a result of the Collateral Agent acting or refraining from acting hereunder pursuant to such discretion and any action taken or failure to act pursuant to such discretion shall be binding on the Lender.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to the Collateral Agent, the Lender agrees that, as long as this Agreement remains in effect:  (i) the Collateral Agent shall have the right to maintai n, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (ii) the Collateral Agent shall have the right to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents; (iii) the Collateral Agent shall have the right to open and maintain such bank accounts and lock boxes as the Collateral Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral; (iv) the Collateral Agent shall have the right to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Borrower, the Obligations, the Collateral, or otherwise related to any of the same as provided in the Loan Documents and (v) the Collateral Agent shall have the right to incur and pay s uch fees, charges, and expenses under the Loan Documents as the Collateral Agent reasonably may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.  The Lender further consents to (x) the execution, delivery, and performance by the Collateral Agent of each Loan Document entered into by the Collateral Agent on behalf of the Lender as contemplated by this Agreement, and (y) the terms of such Loan Documents.

(b)

Except as otherwise provided in this Section 13.01, the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was made in compliance with this section and without gross negligence or willful misconduct.

(c)

None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct) or (ii) be responsible in any manner to the Lender for any recital, statement, representation or warranty made by the Borrower or Affiliate of the Borrower, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Documen t, or for any failure of the Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to the Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Borrower.

(d)

If the Collateral Agent is also the Lender hereunder, with respect to its Commitment and the Loans made by it, the Collateral Agent (and any successor acting as Collateral Agent, if any, as permitted by Section 13.07) in its capacity as a Lender under the Loan Documents shall have the all the rights, privileges and powers under the Loan Documents accruing to the Lender as such and may exercise the same as though it were not acting as Collateral Agent, and the term “Lender” shall, unless the context otherwise indicates, include the Collateral Agent in its individual capacity.  The Collateral Agent (and any successor acting as Collateral Agent) and its Affiliates may accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with the Borrower (and any o f its Affiliates) as if it were not acting as Collateral Agent.

SECTION 10.2.

Reliance by Collateral Agent.  The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person, and upon advice and statements of legal counsel (including counsel to the Borrower or counsel to the Lender), independent accountants and other experts selected by the Collateral Agent.  The Collateral Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it first shall receive such advice or concurrence of the Lender as it deems appropriate and until such instructions are received, the Collat eral Agent shall act, or refrain from acting, as it deems advisable.  If the Collateral Agent so requests, it first shall be indemnified to its reasonable satisfaction by the Lender against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.  The Collateral Agent in all cases shall be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Lender and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lender.

SECTION 10.3.

Defaults.  The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to the Collateral Agent for the account of the Lender, except with respect to Events of Default of which the Collateral Agent has actual knowledge, and unless the Collateral Agent shall have received written notice from the Lender or the Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “Notice of Default”.  The Collateral Agent promptly will notify the Lender of its receipt of any such notice or of any Event of Default of which the Collateral Agent has actual knowledge.  The Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Sections 13.02 and 13.07, the Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Lender in accordance with Article XI; provided, however, that unless and until the Collateral Agent has received any such request, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

SECTION 10.4.

Costs and Expenses; Indemnification.  The Collateral Agent may incur and pay fees, costs, and expenses under the Loan Documents to the extent the Collateral Agent deems reasonably necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including without limiting the generality of the foregoing, court costs, reasonable attorneys fees and expenses, costs of collection by outside collection agencies and auctioneer fees and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not the Borrower is obligated to reimburse the Lender for such expenses pursuant to the Loan Agreement or otherwise (to the extent the Borrower has not done so and without limiting its obligation to do so).  The Lender hereby agrees that it is and shall be obligated to pay to or reimburse the Collateral Agent for the amount thereof.  Whether or not the transactions contemplated hereby are consummated, the Lender shall indemnify upon demand the Agent-Related Persons (to the extent the Borrower has not done so and without limiting the obligation of the Borrower to do so), from and against any and all Indemnified Matters; provided, however, that the Lender shall be liable for the payment to the  Agent-Related Persons of any portion of such Indemnified Matters resulting solely from such Person’s gross negligence or willful misconduct as determined in a final order by a court of competent jurisdiction.  Without limitation of the foregoing, the Lender shall reimburse the Collateral Agent upon demand for any costs or out of pocket expenses (including reasonable attorneys fees and expenses) incurred by the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether thro ugh negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein.  The undertaking in this Section 13.04 shall survive the payment of all Obligations hereunder and the resignation or replacement of any Agent.

SECTION 10.5.

Non-Reliance on Collateral Agent.  The Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by the Collateral Agent hereinafter taken, including any review of the affairs or Property of the Borrower, shall be deemed to constitute any representation or warranty by any Agent-Related Person to the Lender.  The Lender represents to the Collateral Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower.  The Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and any other Person party to a Loan Document.  Except for notices, reports and other documents expressly herein required to be furnished to the Lender by the Collateral Agent, the Collateral Agent shall have no duty or responsibility to provide the Lender with any credit or other information concerning the business, prospects, operations, Property, financial and other conditi on or creditworthiness of Borrower and any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.

SECTION 10.6.

Failure to Act.  Except for action expressly required of the Collateral Agent under the Loan Documents, the Collateral Agent shall in all cases be fully justified in failing or refusing to act under any Loan Document unless it shall receive further assurances to its satisfaction from the Lender of their indemnification obligations under Section 13.04 against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

SECTION 10.7.

Resignation of Collateral Agent.

Subject to the appointment and acceptance of a successor Collateral Agent as provided below, the Collateral Agent may resign upon 30 days prior written notice to the Lender and the Borrower.  Upon any such resignation, the Lender with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed) shall have the right to appoint a successor Collateral Agent.  If no successor Collateral Agent shall have been appointed by the Lender and consented to by the Borrower and no successor Collateral Agent shall have accepted such appointment within 30 days after the retiring Collateral Agent’s giving of notice of resignation, then the retiring Collateral Agent may, on behalf of the Lender, appoint a successor Collateral Agent; provided, however, if the failure to do so was not a result of the unreasonable failure by the Borr ower to consent to any appointment, the Borrower shall retain the right to consent.  Upon the acceptance of any appointment as Collateral Agent by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, remedies, powers, privileges, duties and obligations of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its duties and obligations, under the Loan Documents.  After any retiring Collateral Agent’s resignation as Collateral Agent, the provisions of this Article XIII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Collateral Agent.

SECTION 10.8.

Collateral Matters.

(a)

The Lender hereby irrevocably authorizes the Collateral Agent, at its option and in its sole discretion, to release any Lien on any Collateral (i) upon the termination of the Commitment and payment and satisfaction in full of all Obligations; or (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if the Borrower certifies in writing to the Collateral Agent that the sale or disposition is permitted under this Agreement or the other Loan Documents (and the Collateral Agent may rely conclusively on any such certificate, without further inquiry).  Upon request by the Collateral Agent or the Borrower at any time, the Lender will confirm in writing the Collateral Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Se ction 13.08; provided, however, that (1) the Collateral Agent shall not be required to execute any document necessary to evidence such release on terms that, in the Collateral Agent’s opinion, would expose the Collateral Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrower in respect of) all interests retained by the Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

(b)

Subject to Section 13.01(c)(i), the Collateral Agent shall have no obligation whatsoever to the Lender to assure that the Collateral exists or is owned by the Borrower or is cared for, protected, or insured or has been encumbered, or that the Lender’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the terms and conditions contained herein, the Collateral Agent may act in any m anner it may deem appropriate, in its sole discretion given the Collateral Agent’s own interest in the Collateral in its capacity as the Lender and that the Collateral Agent shall have no other duty or liability whatsoever to any other Lender as to any of the foregoing, except as otherwise provided herein.

SECTION 10.9.

Restrictions on Actions by the Collateral Agent and the Lender.

The Lender agrees that it shall, to the extent it is lawfully entitled to do so, upon the request of the Collateral Agent, set off against the Obligations, any amounts owing by the Lender to the Borrower or any accounts of the Borrower now or hereafter maintained with the Lender.

ARTICLE XI
MISCELLANEOUS

SECTION 11.1.

Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied, emailed or delivered:

if to Borrower, at the following address:

OPY CREDIT CORP.

125 Broad Street, 16th Floor

New York, NY 10004

Telephone:  (212) 668-8000

Facsimile:  (212) 668-8081

Email:  albert.lowenthal@opco.com

Attention: Albert G. Lowenthal

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY  10036

Telephone:  (212) 735-2444

Facsimile:  (917) 777-2444

Email:  tgowan@skadden.com

Attention: Thomas W. Gowan

if to the Lender, at the following address:

For operational notices

CIBC Credit Processing Services

40 Dundas Street West, 5^th Floor

Toronto, ON Canada M5G 2C2

Telephone:

(416) 542-4502

Facsimile:

(416) 542-4558

Email:  blair.kissack@cibc.ca

Attn:  Blair Kissack

For all other notices

CIBC Inc.

300 Madison Avenue

New York, NY  10017

Telephone:

(212) 856-3649

Facsimile:

(212) 856-3612

Email:  gerald.girardi@us.cibc.com

Attn:  Gerald Girardi

with a copy to:

Mayer Brown LLP

1675 Broadway

New York, NY 10019

Telephone:  (212) 506-2555

Facsimile:  (212) 849-5555

Email:  pjorissen@mayerbrown.com

Attn:  Paul A. Jorissen

if to the Collateral Agent, at the following address:

CANADIAN IMPERIAL BANK OF COMMERCE

300 Madison Avenue

New York, NY  10017

Telephone:

(212) 856-3649

Facsimile:

(212) 856-3612

Email:  gerald.girardi@us.cibc.com

Attn:  Gerald Girardi

with a copy to:

Mayer Brown LLP

1675 Broadway

New York, NY 10019

Telephone:  (212) 506-2555

Facsimile:  (212) 849-5555

Email:  pjorissen@mayerbrown.com

Attn:  Paul A. Jorissen

or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 14.01.  All such notices and other communications shall be effective, (i) if mailed, when received or five (5) days after deposited in the mails as registered or certified (in each case with return receipt requested) with postage pre-paid and properly addressed, whichever occurs first, (ii) if telecopied, when transmitted and confirmation received, (iii) if emailed, when transmitted and confirmation acknowledged by recipient or (iv) if delivered, upon delivery, except that notices to the Lender pursuant to Article II shall not be effective until received by the Lender.

SECTION 11.2.

Amendments, Etc.  No amendment or waiver of any provision of this Agreement, any Loan or any other Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  

SECTION 11.3.

FINRA Approval for Certain Amendments.  Notwithstanding anything herein to the contrary, the consent of the Financial Industry Regulatory Authority is required for any amendment to this Agreement that would (i) result in a Lien on the assets of any U.S. Broker-Dealer Subsidiary; (ii) require any U.S. Broker-Dealer Subsidiary to become a Guarantor or Credit Party under this Agreement; or (iii) otherwise cause the Obligations under the Loan Documents to be included in the net capital computation of any U.S. Broker-Dealer Subsidiary.  Terms used in this Section 14.03 shall have the meaning ascribed thereto in that certain Subordinated Credit Agreement, dated as of January 14, 2008, by and among E.A. Viner International Co., as borrower, the other Persons parties thereto from time to time, the lenders party thereto from time to time, Canadian Imperi al Bank of Commerce, as administrative agent, and CIBC World Markets Corp., as lead arranger, as amended from time to time.

SECTION 11.4.

No Waiver; Remedies, Etc.  No failure on the part of the Lender or the Collateral Agent to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of the Lender and the Collateral Agent provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights of the Lender and the Collateral Agent under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Lender and the Collateral Agent to exercise any of their rights under any other Loan Document against such part y or against any other Person.  

SECTION 11.5.

Expenses; Taxes; Attorneys’ Fees.  The Borrower will pay promptly following demand therefor, all reasonable fees, costs and expenses incurred by or on behalf of the Lender, including, without limitation, reasonable out-of-pocket fees, costs and expenses of counsel for the Lender, accounting, due diligence, investigations, miscellaneous disbursements, examination, travel, lodging and meals arising from or relating to:  (a) any requested amendments (other than amendments requested solely by the Lender), waivers or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given, (b) the preservation and protection of any of the Lender’s rights under this Agreement or the other Loan Documents, (b) the filing of any petition, complaint, answer, motion or other pleading by the Lender, or the taking of any action in respect of the Collateral or other Security, in connection with this Agreement or any other Loan Document, (b) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other Security in connection with this Agreement or any other Loan Document, (b) any attempt to enforce any Lien or security interest in any Collateral or other Security in connection with this Agreement or any other Loan Document, (f) any attempt to collect from the Borrower, or (g) during the continuance of an Event of Default, the receipt by the Lender of any advice from its professionals (including without limitation, the reasonable fees of its outside attorneys and consultants) with respect to any of the foregoing (to the extent that such fees, costs and expenses are not otherwise recoverable pursuant to any other provision of this Agreement or any other Loan Document).  Without limitation of the foregoing or any other provision of any Loan Docu ment:  (x) the Borrower agrees to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions now or hereafter determined by the Lender to be payable in connection with this Agreement or any other Loan Document (other than such amounts to the extent they arise on the execution hereof), and the Borrower agrees to hold the Lender harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions, (y) the Borrower agrees to pay all broker fees with respect to any broker retained by the Borrower that may become due in connection with the transactions contemplated by this Agreement and (z) during the continuance of a Default or an Event of Default, if the Borrower (A) fails to make any payments or deposits with respect to any taxes of any kind or nature to the extent that such payments or deposits are due and payable prior to deli nquency, (B) fails to make any payments or deposits with respect to any other governmental assessment prior to the time that any Lien may inure against any property of the Borrower, or (C) fails to make any payments or deposits with respect to any insurance premiums then due and payable, then the Lender, in its sole discretion and without prior notice to the Borrower, may do any or all of the following, without duplication:  (X) make payment of the same or any part thereof, (Y) in the case of any failure described in Section 14.05(z)(C), obtain and maintain insurance policies and take actions with respect to such policies.  Any payment described above in clause (z) shall not constitute an agreement by the Lender to make similar payments in the future or a waiver by the Lenders of any Event of Default under this Agreement.  The Lender need not inquire as to, or contest the validity of, any such obligation.  The Lender agrees to provide to the Bor rower an invoice with respect to each cost or expense incurred in connection with the Loan Documents by it, and agrees, upon the reasonable request of the Borrower, to provide reasonable backup information with respect to such costs or expenses (subject to the right of the Lender to take whatever steps are reasonably necessary to protect any confidential or privileged information which may be contained therein).

SECTION 11.6.

Right of Set-Off.

(a)

Upon the occurrence and during the continuance of any Event of Default, and in addition to (and without limitation of) any right of set-off, banker’s lien or counterclaim the Lender may otherwise have, the Lender may, and is hereby authorized by the Borrower to, at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any and all Obligations now or hereafter existing under any Loan Document, irrespective of whether or not the Lender shall have made any demand hereunder or thereunder and although such obligations ma y be contingent or unmatured.  During the continuance of any Event of Default, the Lender may, and is hereby authorized to, at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of the Borrower against any and all Obligations now or hereafter existing under any Loan Document, irrespective of whether or not the Lender shall have made any demand hereunder or thereunder.  The Lender agrees to notify the Borrower and the Collateral Agent promptly after any such set-off and application made by the Lender, provided that the failure to give such notice to the Borrower shall not affect the validity of such set-off and application.  The rights of the Lender under this Section 1 4.06 are in addition to other rights and remedies which the Lender may have.

(b)

Nothing contained in this Section 14.06 shall require the Lender to exercise any such right or shall affect the right of the Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or Obligation of the Borrower.

SECTION 11.7.

Severability.  Any provision of this Agreement, which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.8.

Initial Lender.  CIBC Inc. as the initial Lender hereunder represents and warrants to the Borrower that it is a “qualified purchaser” under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder.

SECTION 11.9.

Complete Agreement; Sale of Interest.  The Loan Documents constitute the complete agreement between the parties with respect to the subject matter hereof and thereof, supersede any previous agreement or understanding between them relating hereto or thereto and may not be modified, altered or amended except by an agreement in writing signed by the Borrower and the Lender in accordance with Section 14.02.  The Borrower may not sell, assign or transfer any of the Loan Documents or any portion thereof, including its rights, title, interests, remedies, powers and duties hereunder or thereunder.  The Borrower hereby consents to the Lender’s sale of participations, assignment, transfer or other disposition, at any time or times, of any of the Loan Documents or of any portion thereof or interest therein, including the Lender’s rights , title, interests, remedies, powers or duties thereunder, subject, in the case of a participation, assignment, transfer or other disposition, to the provisions of Section 14.10.

SECTION 11.10.

Assignment; Participations.

(a)

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)

The Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Loans at the time owing to it); provided that the parties to each assignment shall execute and deliver an Assignment and Acceptance, provided further that if written consent of the Borrower is required by the definition of “Eligible Assignee”, such written consent shall have been obtained.  From and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of the Lender under this Agreement, and the assignor hereunder shall, to the extent of the interest assigned by such Assignment and Acc eptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assignor’s rights and obligations under this Agreement, such assignor shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.04, 4.03, 4.04 and 14.17 to the extent any claim thereunder relates to an event arising or such assignor’s status or activity as Lender prior to such assignment.

(c)

Any assignment or transfer by the Lender of rights or obligations under this Agreement that does not comply with this Section 14.10 shall be treated for purposes of this Agreement as a sale by the Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.  

(d)

The Collateral Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Collateral Agent’s Office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Collateral Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.  The Borrower may request in writing a copy of the Register from time to time and the Collateral Agent will promptly deliver a copy of such Register to the Borrower promptly thereafter.

(e)

The Lender may, without the consent of, or notice to, the Borrower sell participations to one or more banks or other entities (a “Participant”) in all or a portion of the Lender’s rights and/or obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (i) the Lender’s obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which the Lender sells such a participation shall provide that the Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that the agreement or instrument may provide that the Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clauses (a)(ii) or (a)(iii) of the proviso to Section 14.02 that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.04, 4.03 and 4.04 to the same extent as if it were the Lender.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 14.06 as though it were the Lender, provided such Participant agrees to be subject to Section 3.03 as though it were the Lender.

(f)

A Participant shall not be entitled to receive any greater payment under Section 3.04 or Article IV than the Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lender if it were Lender shall not be entitled to the benefits of Section 3.04 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.04 as though it were Lender.

(g)

The Lender may, without the consent of the Borrower at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of the Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.

SECTION 11.11.

Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Agreement or any of the other Loan Documents by telecopy shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Loan Documents.  Any party delivering an executed counterpart of any such agreement by telecopy shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

SECTION 11.12.

GOVERNING LAW.  THIS AGREEMENT, THE NOTE AND, EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 11.13.

CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS FOR NOTICES SET FORTH IN SECTION 14.01, SUCH SERVICE TO BECOME EFFECTIVE FIV E (5) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDERS OR THE AGENTS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.  THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

SECTION 11.14.

WAIVER OF JURY TRIAL, ETC.  THE BORROWER, THE LENDER AND THE AGENT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE BORROWER CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  THE BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER AND THE AGENT ENTERING INTO THIS AGREEMENT.

SECTION 11.15.

Consent.  Except as otherwise expressly set forth herein or in any other Loan Document to the contrary, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of the Lender or the Collateral Agent, shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which the Borrower are parties and to which the Lender or the Collateral Agent have succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by the Lender or the Collateral Agent with or without any reason in their reasonable discretion.

SECTION 11.16.

Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the Lender, the Collateral Agent or the Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

SECTION 11.17.

Reinstatement; Certain Payments.  If any claim is ever made upon the Lender or the Collateral Agent for repayment or recovery of any amount or amounts received by the Lender or the Collateral Agent in payment or received on account of any of the Obligations, the Lender or the Collateral Agent shall give prompt notice of such claim to the Borrower, and if the Lender or the Collateral Agent repay all or part of such amount by reason of (i) any judgment, decree or order of any court of competent jurisdiction or administrative body having jurisdiction over the Lender or the Collateral Agent or any of their respective property, or (ii) compliance by the Lender or the Collateral Agent with any requirement of a Governmental Authority having jurisdiction over the Lender or the Collateral Agent, then and in such event the Borrower agrees that (A) any such judgment, decree or order shall be binding upon it notwithstanding the cancellation of any instrument evidencing the Obligations or the other Loan Documents or the termination of this Agreement or the other Loan Documents and (B) it shall be and remain liable to the Lender or the Collateral Agent hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Lender or the Collateral Agent.

SECTION 11.18.

Indemnification.  In addition to the Borrower’s other Obligations under this Agreement, the Borrower agrees to defend, protect, indemnify and hold harmless the Lender and its respective Affiliates and their officers, directors, trustees, employees, agents and advisors, the Collateral Agent, the  Agent-Related Persons and the Lender-Related Persons (collectively called the “Indemnitees”) from and against any and all claims, losses, demands, settlements, damages, liabilities, obligations, penalties, fines, fees, reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses, but excluding income, franchise and similar taxes of an Indemnitee) incurred by such Indemnitees (but not taxes, which shall be governed by Section 3.04), whether prior to or from and after the Closi ng Date, as a result of or arising from or relating to or in connection with any of the following:  (i) the Collateral Agent or the Lender furnishing of funds to the Borrower under this Agreement, including, without limitation, the management of any such Loans, (ii) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents or by any document executed in connection with the transactions contemplated by this Agreement or the other Loan Documents, or (iii) any claim, litigation, investigation or administrative or judicial proceeding in connection with any transaction contemplated in, or consummated under, the Loan Documents (collectively, the “Indemnified Matters”); provided, however, that the Borrower shall not have any obligation to any Indemnitee under this Section 14.18 for any Indemnified Matter to the extent resulting from the bad faith, gross negligence or willful misconduct of such Indemnite e; provided, however, that the Borrower shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to up to one local counsel in each applicable local jurisdiction) for all Indemnitees under this Section 14.18 unless on advice of outside counsel, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest.  Such indemnification for all of the foregoing losses, damages, fees, costs and expenses of the Indemnitees shall be due and payable promptly after demand therefor.  To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 14.18 may be unenforceable because it is violative of any law or public policy, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees. &nb sp;This Indemnity shall survive the repayment of the Obligations and the discharge of the Liens granted under the Loan Documents.

SECTION 11.19.

Interest.  It is the intention of the parties hereto that the Collateral Agent and each Lender shall conform strictly to usury laws applicable to it.  Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to the Collateral Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows:  (i) the aggregate of all consideration which constitutes interest under law applicabl e to the Collateral Agent or the Lender that is contracted for, taken, reserved, charged or received by the Collateral Agent or the Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by the Collateral Agent or the Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by the Collateral Agent or the Lender, as applicable, to the Borrower); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to the Collateral Agent or the Lender may never in clude more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by the Collateral Agent or the Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by the Collateral Agent or the Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by the Collateral Agent or the Lender to the Borrower).  All sums paid or agreed to be paid to any Agent or the Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to the Collateral Agent or the Lender, be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amoun t allowed by such applicable law.  If at any time and from time to time, (x) the amount of interest payable to any Agent or the Lender on any date shall be computed at the Highest Lawful Rate applicable to the Collateral Agent or the Lender pursuant to this Section 14.19 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to the Collateral Agent or the Lender would be less than the amount of interest payable to the Collateral Agent or the Lender computed at the Highest Lawful Rate applicable to the Collateral Agent or the Lender, then the amount of interest payable to the Collateral Agent or the Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to the Collateral Agent or the Lender until the total amount of interest payable to the Collateral Agent or the Lender shall equal the total amount of interest which would have been payable to the Collatera l Agent or the Lender if the total amount of interest had been computed without giving effect to this Section 14.19.

For purposes of this Section 14.19, the term “applicable law” shall mean that law in effect from time to time and applicable to the loan transaction between the Borrower, on the one hand, and the Collateral Agent and the Lender, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.

SECTION 11.20.

Records.  The unpaid principal of, and interest on, the Obligations, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability, the Commitment, and the accrued and unpaid fees payable pursuant to Section 4.05, including without limitation fees set forth in the Fee Letter, shall at all times be ascertained from the records of the Lender and Agent, which shall be conclusive and binding absent manifest or demonstrable error.

SECTION 11.21.

Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders and the Collateral Agents, and their respective successors and assigns, subject to Section 14.10.

SECTION 11.22.

Confidentiality.  The Lender and the Collateral Agent each agree (on behalf of itself and each of its Affiliates, directors, officers, employees and representatives) (each, a “Recipient”) to hold in complete confidence and not disclose, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Borrower pursuant to this Agreement or the other Loan Documents (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information, provided that nothing herein shall limit the disclosure of any such information (a) to the extent required by statute, rule, regulation or judicial process, (b) to the Lender, Collateral Agent, to counsel, accountants, auditors and other advisors for such member of the Lender (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential pursuant to the terms hereof), (c) to examiners, auditors or accountants to the extent required by any court, governmental or administrative agency, pursuant to any subpoena or other legal process, or by any law, statute, regulation or court order, or in connection with any litigation to which any of the Collateral Agent or the Lender are Party, (d) to any assignee or participant (or prospective assignee or participant) so long as such assignee or part icipant (or prospective assignee or participant) first agrees in writing to the confidentiality provisions of this Section 14.22, (e) to any Person that is an investor or prospective investor in a Securitization that agrees that its access to information regarding the Borrower and the Loans is solely for purposes of evaluating an investment in such Securitization and agrees in writing to maintain the confidentiality of such information in accordance herewith or (f) to a Person that is a trustee, collateral manager, servicer, noteholder, rating agency or secured party in a Securitization in connection with the administration, servicing and reporting on the assets serving as collateral for such Securitization, so long as such person agrees in writing to maintain the confidentiality of such information.

Upon the request of the Borrower to a Recipient on or after the Maturity Date, and subject to applicable law, rule or policy, such Recipient shall destroy any Borrower-related confidential information to the extent consistent with such Recipient’s document retention policies

SECTION 11.23.

Lender Advertising.  The Collateral Agent and the Lender shall be entitled to advertise the closing of the transactions contemplated by this Agreement in such trade publications, business journals, newspapers of general circulation and otherwise, as the Collateral Agent and the Lender shall deem appropriate, including, without limitation, the publication of a tombstone announcing the closing of this transaction; provided that the Collateral Agent and the Lender shall obtain written consent of the Borrower prior to disseminating any advertisement described in this Section 14.23 which consent shall not be reasonably withheld.

SECTION 11.24.

USA PATRIOT ACT.  The Lender hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance with the Act.

(signature pages follow)

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

BORROWER:

OPY CREDIT CORP.

By:

Name:

Title:

COLLATERAL AGENT:

CANADIAN IMPERIAL BANK OF COMMERCE

By:

Name:

Title:

LENDER:

CIBC INC.

By:

Name:

Title:

2

Schedule A

Eligible Collateral

“Eligibility Criteria” means, with respect to any obligation owned as a trading asset of the Borrower, (a) the related Name shall have been submitted to the Lender in advance and, in its sole discretion, the Lender shall have advised the Borrower in writing that such Name is approved; provided, however, that such approval process is conducted in a manner consistent with the Lender’s current and past practice; (b) such obligation shall have been purchased by the Borrower consistent with the trading authority for such Name as advised by the Lender to the Borrower, (c) such obligation shall not have been owned by the Borrower for any one or more periods in excess of 90 days in the aggregate, (d) such obligation is the form of a secured or unsecured loan, and not a Security, (e) the representations and warranties with respect to the obligation set forth in the Pledge and Security Agreem ent shall be true and correct in all material respects as of the date of the related Borrowing, (f) the obligation, and all instruments, documents, notes or chattel paper evidencing the same, and all rights and proceeds related thereto, shall be in the possession or under the “control” (as defined in the Uniform Commercial Code) of the Collateral Agent, (g) the Borrower has good and marketable title to such Collateral, free and clear of all Liens except for the Lien of the Pledge and Security Agreement.

“Eligibility Parameters” means the single Name limits and trading authorities, whole portfolio concentration limits and diversification requirements, all as advised by the Lender to the Borrower from time to time.

3

Schedule 2.01(a)
Commitment

Lender	Commitment
CIBC INC.	$75,000,000

4

EXHIBIT A
TO SECURED CREDIT AGREEMENT

DAILY FUNDS MOVEMENT REPORT

Reference is made to the Secured Credit Agreement, dated as of January 14, 2008 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among OPY CREDIT CORP., (the “Borrower”), CIBC INC. (the “Lender”), and CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent for the Secured Creditors (in such capacity, together with its successors and assigns, if any, the “Collateral Agent”).  

PART I – Collateral Calculations.  The undersigned hereby certifies:

1.

I am the [title] of the Borrower.

2.

I have reviewed the terms of the Credit Agreement, and the other Loan Documents thereunder, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions of the Borrower for the Business Day indicated on Exhibit I hereto.

3.

Based on the examination described in paragraph 2 above, I am able to, and do, certify as to the accuracy of the amounts, values and calculations set forth on Exhibit  I hereto, including without limitation, to certify that, as of the date indicated (after giving effect to all acquisitions and dispositions of Collateral permitted under the Loan Documents, and the making, prepayment or repayment of Loans made hereunder on such Business Day, and assuming that the Market Value of the Collateral is equal to the attached estimate thereof), [no Required Collateral Surplus Deficiency existed][a Required Collateral Surplus Deficiency, in an amount equal to $[___________] existed].

4.

Attached as Schedule A to Exhibit I hereto is a spreadsheet showing all the Collateral and the fields of information therefor, and I certify that such spreadsheet is true and complete with respect to the Collateral as of the Business Day indicated on Exhibit I hereto.

5.

Attached as Schedule B to Exhibit I hereto is a printout of the LSTA Data Service pricing information used to support Borrower’s estimate of the aggregate loan collateral market value as of the date and time indicated on Exhibit I hereto, and I certify that such Schedule B is a true and complete printout thereof.

PART II – Proposed Borrowings.  Pursuant to Sections 2.01 and 2.02 of the Credit Agreement, Borrower desires that Lender make the following Loans to Borrower in accordance with the applicable terms and conditions of the Credit Agreement on [mm/dd/yy], (the “Funding Date”):

LIBOR Rate Loans, with a LIBOR Period of ________ Month(s):	$[___,___,___]
Alternate Base Rate Loans:	$[___,___,___]

The undersigned, on behalf of Borrower, hereby certifies that:

1.

as of the Funding Date, the representations and warranties contained in each of the Loan Documents are true and complete in all material respects on and as of such Funding Date to the same extent as though made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties are true and complete in all material respects on and as of such earlier date;

2.

as of the Funding Date, no event has occurred and is continuing or would result from the consummation of the borrowing contemplated hereby that would constitute an Event of Default or a Default; and;

3.

the proceeds of each Loan shall be used only as permitted under the Credit Agreement.

Attached hereto as Exhibit II hereto is a copy of the trade confirmation and fully-executed assignment agreement relating to the acquisition of Collateral with the proceeds of the Loan.  

Borrower hereby instructs the Lender to apply the proceeds of Loans available to the Borrower on the Funding Date to make transfers in the amounts and to the accounts specified in Schedule A to Exhibit II hereto, and agrees that (i) such Loans will be fully disbursed and borrowed for purposes of the Credit Agreement as of the Funding Date upon the initiation of such transfers by the Lender (whether or not such transfers are completed or value is received therefor by Borrower), (ii) such transfers are being made at the instruction and risk of the Borrower, (iii) the amount of such Loan(s)does not in the aggregate exceed 85% of the Market Value of the Eligible Collateral acquired with the proceeds thereof, and (iv) the provisions of this Daily Funds Movement Report and Schedule A hereto may be changed only by a written agreement signed by Borrowe r and the Lender.  

PART III – Proposed Conversions/Continuations.  Pursuant to Section 2.01 of the Credit Agreement, Borrower desires to convert or to continue the following Loans, each such conversion and/or continuation to be effective as of [mm/dd/yy]:

$[___,___,___]	LIBOR Rate Loans to be continued with LIBOR of ____ month(s)
$[___,___,___]	Alternate Base Rate Loans to be converted to LIBOR Rate Loans with LIBOR of ____ month(s)
$[___,___,___]	LIBOR Rate Loans to be converted to Alternate Base Rate Loans

The undersigned, on behalf of Borrower, hereby certifies that as of the date hereof, no event has occurred and is continuing that would constitute an Event of Default or a Default.

PART IV – Proposed Prepayments.  Pursuant to Section 3.01 of the Credit Agreement, Borrower hereby notifies you that it will make prepayments of the following Loans, each such prepayment to be effective as of [mm/dd/yy]:

$[___,___,___]	LIBOR Rate Loans
$[___,___,___]	Alternate Base Rate Loans

The undersigned, on behalf of Borrower, hereby certifies that as of the date hereof, no event has occurred and is continuing that would constitute an Event of Default or a Default.

PART V – Net Funds Movements and Position.  Assuming no Default or Event of Default shall exist, the undersigned certifies that the net funds movements will be as follows:

1.

After adding to the Loan Exposure the amounts proposed to be borrowed pursuant to Part II above and subtracting the amounts proposed to be prepaid pursuant to Part IV above, [on [mm/dd/yy], Borrower shall wire to Lender an aggregate amount of $[___,___,___] to the Lender’s Payment Office.] or [on [mm/dd/yy], [after the Required Collateral Surplus Deficiency set forth in Paragraph 3 of Part I shall have been cured,] Lender shall wire to Borrower an aggregate amount of $[___,___,___] per the wire instructions set forth on Schedule A to Exhibit II hereto.]

2.

On [mm/dd/yy], after giving effect to the payment referred to in the preceding paragraph, and all conversions/continuations and prepayments referred to in Parts III and IV hereof, the Loans shall be as follows:

(a)

LIBOR Rate Loans in an aggregate amount of $[___,___,___]; and

(b)

Base Rate Loans in an aggregate amount of $[___,___,___].

This Daily Funds Movement Report is executed as of the date indicated below.

Date:  [mm/dd/yy] [___________________]

By:
Title:

A-1

EXHIBIT I
To Daily Funds Movement Report

REQUIRED COLLATERAL SURPLUS CALCULATIONS

* [items in brackets and italics are samples only]

Reported as of close of business on (date):			[January 11, 2008]
This report delivered on (date):			[January 12, 2008]
Aggregate loan collateral (number of loans):			[3]
Aggregate loan collateral outstanding principal balance:			$[71,000,000]
A.	Borrower’s estimate of aggregate loan collateral market value:		$[71,000,000]
B.	Advance Rate (as a decimal)		[0.85]
C.		Subtotal:  A x B	$[60,350,000]
D.	Aggregate cash balance in Pledged Account:		$[0]
E.		Subtotal:  C + D	$[60,350,000]
F.	Aggregate Loan Exposure:		$[60,000,000]
G.		TOTAL:  E – F	$[350,000.00]
H.	If G is a negative number, also calculate the deficit as a percentage of aggregate Market Value, using the absolute value of G:
		(G / A) x 100	[__]%
		* if the Lender specifies a value for aggregate Market Value different from A, use the Lender’s value rather than A.
Certification:  [Because E is not less than F, no Required Collateral Surplus Deficiency existed][Because E is less than F by an amount equal to $[___________], a Required Collateral Surplus Deficiency exists equal to such amount].

A-2

SCHEDULE A
to Exhibit I to Daily Funds Movement Report

COLLATERAL INFORMATION

(attached hereto)

A-3

SCHEDULE B
to Exhibit I to Daily Funds Movement Report

LSTA PRICING DATA

(attached hereto)

A-4

EXHIBIT II
To Daily Funds Movement Report

TRADE CONFIRMATIONS
AND ASSIGNMENT AGREEMENTS
FOR PURCHASED COLLATERAL

(attached hereto)

A-5

SCHEDULE A
to Exhibit II to Daily Funds Movement Report

WIRING INSTRUCTIONS

Please wire funds as follows:

Account Name:	$[___,___,___]
Bank/Institution:
ABA Number:
Account Number:
Attention:
Reference:

A-6

EXHIBIT B
TO SECURED CREDIT AGREEMENT

NOTE

$75,000,000

[mm/dd/yy]

New York, New York

FOR VALUE RECEIVED, [___________________], a [corporation] formed under the laws of the State of [New York] (“Borrower”), promises to pay CIBC INC. (“Payee”) or its registered assigns the principal amount of the Loans outstanding from time to time under the Credit Agreement (as defined below) in an amount up to SEVENTY-FIVE MILLION DOLLARS ($75,000,000) as provided for in the Credit Agreement.

Borrower also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Secured Credit Agreement, dated as of January 14, 2008 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Borrower, Payee, and Canadian Imperial Bank of Commerce, as Collateral Agent.

All payments of principal and interest in respect of this Note shall be made in lawful money of the United States of America in same day funds at the Lender’s Payment Office or at such other place as shall be designated in writing for such purpose in accordance with the terms of the Credit Agreement.  Unless and until an Assignment and Acceptance effecting the assignment or transfer of the obligations evidenced hereby shall have been executed, Borrower shall be entitled to deem and treat Payee as the owner and holder of this Note and the obligations evidenced hereby.  Payee hereby agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will make a notation hereon of all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, the failure to make a notation of any paym ent made on this Note shall not limit or otherwise affect the obligations of Borrower hereunder with respect to payments of principal of or interest on this Note.

This Note is subject to prepayment at the option of Borrower, each as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement.

Borrower promises to pay all costs and expenses, including reasonable attorneys’ fees, all as provided in the Credit Agreement, incurred in the collection and enforcement of this Note.  

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above.

[___________________]

By: ______________________________

Title:

B-1

EXHIBIT C-1
TO SECURED CREDIT AGREEMENT

FORM OF OPINION OF COUNSEL TO THE BORROWER

C-1-1

January 14, 2008

To the parties listed on Schedule I hereto

Re: OPY Credit Corp. Secured Credit Facility

Ladies and Gentlemen:

We have acted as special counsel to OPY Credit Corp., a  New York corporation (the "Company"), in connection with the preparation, execution and delivery of the Secured Credit Agreement, dated as of the date hereof (the "Credit Agreement"), among the Company, CIBC Inc., as the lender thereunder (the "Lender") and Canadian Imperial Bank of Commerce, as collateral agent (the "Collateral Agent").  This opinion is being delivered pursuant to Section 5.01(g) of the Credit Agreement.

In our examination we have assumed the genuineness of all signatures including endorsements, the legal capacity and competency of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies.  As to any facts relevant to this opinion which we did not independently establish or verify, we have relied upon statements and representations of the Company and of E. A. Viner International Co., a Delaware corporation (the "Parent") and their respective officers and other representatives and of public officials, including the facts and conclusions set forth therein.  

In rendering the opinions set forth herein, we have examined and relied on originals or copies of the following:

(a)   the Credit Agreement;

(b)   the Note, dated as of the hereof, executed pursuant to the Credit Agreement;

(c)   the certificate of Dennis P. McNamara, the General Counsel and Secretary of the Company and the General Counsel and Secretary of the Parent, dated the date hereof, a copy of which is attached as Exhibit A hereto; and

(d)   such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth below.

We express no opinion as to the laws of any jurisdiction other than (i) the Applicable Laws (as hereinafter defined) of the State of New York and (ii) the Applicable Laws of the United States of America.

Capitalized terms used herein and not otherwise defined herein shall have the same meanings herein as set forth in the Credit Agreement.  As used herein:

"Applicable Laws" means those laws, rules and regulations which, in our experience, are normally applicable to transactions of the type contemplated by the Transaction Agreements, without our having made any special investigation as to the applicability of any specific law, rule or regulation, and which are not the subject of a specific opinion herein referring expressly to a particular law or laws.  For the avoidance of doubt, Applicable Laws do not include laws, rules and regulations pertaining specifically to any broker and/or dealer organizations or to the licensing of organizations that engage in lending and/or related activities.

"Transaction Agreements" means, collectively, the Credit Agreement and the Note.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:

1)Each of the Transaction Agreements constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms under the Applicable Laws of the State of New York.

2.   Neither the execution, delivery or performance by the Company of the Transaction Agreements nor the compliance by the Company with the terms and provisions thereof will contravene any provisions of any Applicable Law of the State of New York or any Applicable Law of the United States of America.

3.   The Company is not and, solely after giving effect to the loans made pursuant to the Credit Agreement and the application of the proceeds thereof as described in the Credit Agreement, will not be an "investment company" as such term is defined in the Investment Company Act of 1940, as amended.

Our opinions are subject to the following assumptions and qualifications:

(a)   enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in equity or at law);

(b)   we have assumed that each of the Transaction Agreements constitutes the valid and binding obligation of each party to such Transaction Agreement (other than the Company to the extent expressly set forth herein) enforceable against such other party in accordance with its terms;

(c)   we express no opinion as to the effect on the opinions expressed herein of (i) the compliance or non-compliance of any party (other than the Company to the extent expressly set forth herein) to the Transaction Agreements with any state, federal or other laws or regulations (including without limitation, any rules or regulations of a self-regulatory body) applicable to them or (ii) the legal or regulatory status or the nature of the business of any party;

(d)   we express no opinion as to the enforceability of any rights to contribution or indemnification provided for in the Transaction Agreements which are violative of the public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation);

(e)   we express no opinion as to the applicability or effect of any fraudulent transfer, preference or similar law on the Transaction Agreements or any transactions contemplated thereby;

(f)   we express no opinion on the enforceability of any provision in a Transaction Agreement purporting to prohibit, restrict or condition the assignment of rights under such Transaction Agreement to the extent such restriction on assignability is governed by the Uniform Commercial Code;

(g)   we express no opinion as to the enforceability of any section of the Credit Agreement to the extent it purports to waive any objection a person may have that a suit, action or proceeding has been brought in an inconvenient forum or a forum lacking subject matter jurisdiction;

(h)   we have assumed that all conditions precedent contained in Section 5.01 of the Credit Agreement, which conditions require the delivery of documents, evidence or other items satisfactory in form, scope and/or substance to the Lender or the satisfaction of which is otherwise in the discretion or control of the Lender have been, or contemporaneously with the delivery hereof will be, fully satisfied;

(i)   to the extent that any opinion relates to the enforceability of the choice of New York law and choice of New York forum provisions of the Transaction Agreements, our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR 327(b) (McKinney 2001) and is subject to the qualifications that such enforceability may be limited by public policy considerations of any jurisdiction, other than the courts of the State of New York, in which enforcement of such provisions, or of a judgment upon an agreement containing such provisions, is sought;

(j)   our opinion is subject to possible judicial action giving effect to governmental actions affecting creditors' rights;

(k)   in rendering the opinions expressed below we have also assumed, without independent investigation or verification of any kind, that the choice of New York law to govern the Transaction Agreements, which are stated therein to be governed thereby, is legal and valid under the laws of other applicable jurisdictions; and

(l)   we express no opinion with respect to any provision of the Credit Agreement to the extent it authorizes or permits any purchaser of a participation interest to set-off or apply any deposit, property or indebtedness or the effect thereof on the opinions contained herein.

In rendering the foregoing opinions, we have assumed, with your consent, that:

a)the Company is validly existing and in good standing as a corporation under the laws of the State of New York;

(b)   the Company has the power and authority to execute, deliver and perform all of its obligations under each of the Transaction Agreements and the execution and delivery of each of the Transaction Agreements and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all requisite action on the part of the Company; and each of the Transaction Agreements has been duly authorized, executed and delivered by the Company;

(c)   the execution, delivery and performance of any of the obligations under the Transaction Agreements does not and will not conflict with, contravene, violate or constitute a default under (i) the certificate of incorporation or the by-laws of the Company, (ii) any lease, indenture, instrument or other agreement to which the Company or its property is subject, (iii) any rule, law or regulation to which the Company is subject or (iv) any judicial or administrative order or decree of any governmental authority; and

(d)   except for the consent of FINRA, which the Company has informed us it has obtained, no authorization, consent or other approval of, notice to or filing with any court, governmental authority or regulatory body is required to authorize or is required in connection with the execution, delivery or performance by the Company of any Transaction Agreement or the transactions contemplated thereby.

We understand that you are separately receiving opinions, with respect to certain of the foregoing assumptions from Dennis P. McNamara, General Counsel of the Company, and we are advised that such opinions contain qualifications.  Our opinions herein stated are based on the assumptions specified above and we express no opinion as to the effect on the opinions herein stated of the qualifications contained in such other opinions.

This opinion is being furnished only to you in connection with the Transaction Agreements and is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon by any other person or entity for any purpose without our prior written consent; provided that each assignee of the Lender or other person that hereafter becomes a "Lender" under the Credit Agreement pursuant to the assignment provisions incorporated by reference in Section 14.10 thereof may rely on this Opinion with the same effect as if it was originally addressed to such assignee as of the date hereof.

Very truly yours,

C-1-2

Schedule I – Addressees

CIBC Inc., as Lender

Canadian Imperial Bank of Commerce, as Collateral Agent

C-1-3

January [___], 2008

To the parties listed on Schedule I hereto

Re: OPY Credit Corp. Secured Credit Facility

Ladies and Gentlemen:

We have acted as special counsel to OPY Credit Corp., a  New York corporation (the "Company"), in connection with the preparation, execution and delivery of the Secured Credit Agreement, dated as of January 14, 2008 (the "Credit Agreement"), among the Company, CIBC Inc., as the lender thereunder (the "Lender") and Canadian Imperial Bank of Commerce, as collateral agent (the "Collateral Agent") and certain other agreements, instruments and documents related to the Credit Agreement.  This opinion is being delivered pursuant to Section 5.01(g) of the Credit Agreement.

In our examination we have assumed the genuineness of all signatures including endorsements, the legal capacity and competency of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies.  As to any facts relevant to this opinion which we did not independently establish or verify, we have relied upon statements and representations of the Company and of E. A. Viner International Co., a Delaware corporation (the "Parent") and their respective officers and other representatives and of public officials, including the facts and conclusions set forth therein.  

In rendering the opinions set forth herein, we have examined and relied on originals or copies of the following:

(e)   the Credit Agreement;

(f)   the Pledge and Security Agreement, dated as of the date hereof, between the Company and the Collateral Agent (the "Security Agreement");

(g)   the deposit account control agreement dated as of January [__], 2008 among the Company as grantor, the Collateral Agent and [______________] as the Financial Institution thereunder, with respect to account number ______ established at the Financial Institution and identified by the name of _____________ (the "Deposit Account Control Agreement" and the "Deposit Account", respectively);

(h)   the securities account control agreement dated as of  January [___], 2008 among the Company as grantor, the Collateral Agent and [______________] as the Securities Intermediary thereunder, with respect to account number ______ established at the Securities Intermediary and identified by the name of _____________ (the "Securities Account Control Agreement" and the "Securities Account", respectively);

(i)   the certificate of Dennis P. McNamara, the General Counsel and Secretary of the Company and the General Counsel and Secretary of the Parent, dated the date hereof, a copy of which is attached as Exhibit A hereto;

(j)   an unfiled copy of a financing statement identifying "OPY Credit Corp." as debtor and "Canadian Imperial Bank of Commerce, as Collateral Agent" as secured party, which we understand will be filed in the office of the Secretary of State of the State of New York (such filing office, the "Filing Office" and such financing statement, the "Financing Statement"); and

(k)   such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth below.

We express no opinion as to the laws of any jurisdiction other than (i) the Applicable Laws (as hereinafter defined) of the State of New York, (ii) the Applicable Laws of the United States of America, (iii) the UCC (as hereinafter defined), and (iv) the Federal Book-Entry Regulations.

Capitalized terms used herein and not otherwise defined herein shall have the same meanings herein as set forth in the Credit Agreement or the Security Agreement, as applicable.  As used herein:

"Applicable Laws" means those laws, rules and regulations which, in our experience, are normally applicable to transactions of the type contemplated by the Collateral Documents, without our having made any special investigation as to the applicability of any specific law, rule or regulation, and which are not the subject of a specific opinion herein referring expressly to a particular law or laws.  For the avoidance of doubt, Applicable Laws do not include laws, rules and regulations pertaining specifically to any broker and/or dealer organizations or to the licensing of organizations that engage in lending and/or related activities.

"Collateral Documents" means, collectively, the Security Agreement, the Deposit Account Control Agreement and the Securities Account Control Agreement.

"Federal Book-Entry Regulations" means the United States Department of the Treasury's regulations governing the transfer and pledge of marketable securities issued by the U.S. Treasury and maintained in the form of entries in the Trades book-entry system in the records of the federal reserve banks and set forth in 61 Fed. Reg. 43626 (1996) (codified at 31 C.F.R. Part 357) and the United States Department of Housing and Urban Development's regulations governing the transfer and pledge of securities issued by the Federal National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC") in each case maintained in the form of entries in the records of federal reserve banks and set forth in 62 Fed. Reg. 28975 (1997) (codified at 24 C.F.R. Part 81).

"UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of New York (without regard to laws referenced in Section 9-201 thereof).  

"UCC Collateral" means the Collateral (as such term is defined in the Security Agreement), to the extent the UCC governs a security interest in such collateral.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:

2)Each of the Collateral Documents constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms under the Applicable Laws of the State of New York.

3.   Neither the execution, delivery or performance by the Company of the Collateral Documents nor the compliance by the Company with the terms and provisions thereof will contravene any provisions of any Applicable Law of the State of New York or any Applicable Law of the United States of America.

4.   Under the UCC, the provisions of the Security Agreement are effective to create a valid security interest in the Company's rights in the UCC Collateral in favor of the Collateral Agent to secure the Secured Obligations (as such term is defined in the Security Agreement).

5.   To the extent the UCC is applicable to the authorization of the Financing Statement, pursuant to the provisions of the Security Agreement the Company has authorized the filing of the Financing Statement for purposes of Section 9-509 of the UCC.

6.   To the extent the UCC is applicable, the Financing Statement includes not only all of the types of information required by Section 9-502(a) of the UCC but also the types of information without which the Filing Office may refuse to accept the Financing Statement pursuant to Section 9-516 of the UCC.

7.   To the extent the UCC is applicable, the security interest of the Collateral Agent will be perfected in the Company's rights in all UCC Collateral upon the later of the attachment of the security interest and the filing of the Financing Statement in the Filing Office; provided, that we express no opinion with respect to (i) money, (ii) deposit accounts, (iii) letter of credit rights, (iv) goods covered by a certificate of title statute, (v) as-extracted collateral, timber to be cut, or  (vi) any property subject to a statute, regulation or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt Section 9-310(a) of the UCC.

8.

Under the UCC, the provisions of the Deposit Account Control Agreement are effective to perfect the security interest of the Collateral Agent in the Company's rights in the Deposit Account.

9.

Under the UCC and the Federal Book-Entry Regulations, the provisions of the Securities Account Control Agreement are effective to perfect the security interest of the Collateral Agent in the Company's rights in the Securities Account.

Our opinions are subject to the following assumptions and qualifications:

(a)   enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in equity or at law);

(b)   we have assumed that each of the Collateral Documents constitutes the valid and binding obligation of each party to such Collateral Document (other than the Company to the extent expressly set forth herein) enforceable against such other party in accordance with its terms;

(c)   we express no opinion as to the effect on the opinions expressed herein of (i) the compliance or non-compliance of any party (other than the Company to the extent expressly set forth herein) to the Collateral Documents with any state, federal or other laws or regulations (including without limitation, any rules or regulations of a self-regulatory body) applicable to them or (ii) the legal or regulatory status or the nature of the business of any party;

(d)   we express no opinion as to the enforceability of any rights to contribution or indemnification provided for in the Collateral Documents which are violative of the public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation);

(e)   we express no opinion as to the applicability or effect of any fraudulent transfer, preference or similar law on the Collateral Documents or any transactions contemplated thereby;

(f)   we express no opinion on the enforceability of any provision in a Collateral Document purporting to prohibit, restrict or condition the assignment of rights under such Collateral Document to the extent such restriction on assignability is governed by the Uniform Commercial Code;

(g)   we express no opinion as to the enforceability of any section of any Collateral Document to the extent it purports to waive any objection a person may have that a suit, action or proceeding has been brought in an inconvenient forum or a forum lacking subject matter jurisdiction;

(h)   we have assumed that all conditions precedent contained in Section 5.01 of the Credit Agreement, which conditions require the delivery of documents, evidence or other items satisfactory in form, scope and/or substance to the Lender or the satisfaction of which is otherwise in the discretion or control of the Lender have been, or contemporaneously with the delivery hereof will be, fully satisfied;

(i)   to the extent that any opinion relates to the enforceability of the choice of New York law and choice of New York forum provisions of the Collateral Documents, our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney 2001) and N.Y. CPLR 327(b) (McKinney 2001) and is subject to the qualifications that such enforceability may be limited by public policy considerations of any jurisdiction, other than the courts of the State of New York, in which enforcement of such provisions, or of a judgment upon an agreement containing such provisions, is sought;

(j)   certain of the remedial provisions with respect to the security contained in the Security Agreement may be unenforceable in whole or in part, but the inclusion of such provisions does not affect the validity of the Security Agreement taken as a whole, and the Security Agreement taken as a whole, together with applicable law, contains adequate provisions for the practical realization of the benefits of the collateral;

(k)    our opinion is subject to possible judicial action giving effect to governmental actions affecting creditors' rights;

(l)   in rendering the opinions expressed below we have also assumed, without independent investigation or verification of any kind, that the choice of New York law to govern the Collateral Documents, which are stated therein to be governed thereby, is legal and valid under the laws of other applicable jurisdictions;

(m)   we have assumed that the Company owns, or with respect to after-acquired property will own, the collateral, and we express no opinion as to the nature or extent of the Company's rights in any of the collateral and we note that with respect to any after-acquired property, the security interest will not attach until the Company acquires ownership thereof;

(n)   our opinion with respect to proceeds is subject to the limitations set forth in Sections 9-315 of the UCC and, in addition, we call to your attention that in the case of certain types of proceeds, other parties such as holders in due course, protected purchasers of securities, persons who obtain control over securities entitlements and buyers in the ordinary course of business may acquire a superior interest or may take their interest free of the security interest of a secured party;

(o)   we have assumed that (A) the Deposit Account is a "deposit account" and the Financial Institution is an organization that is engaged in the business of banking, and (B) the Securities Account is a "securities account" and the Securities Intermediary in the ordinary course of its business maintains securities accounts for customers and is acting in that capacity ("deposit account" and "securities account" being used as defined in the UCC);

(p)   we express no opinion with respect to any property or assets now or hereafter credited to a securities account except to the extent that (i) a "securities entitlement" (as such term is defined in Section 8-102(a)(17) of the UCC) has been created and (ii) such asset is a "financial asset" (as such term is defined in Section 8-102(a)(9) of the UCC).  Furthermore, we express no opinion with respect to the nature or extent of the securities intermediary's rights in, or title to, the securities or other financial assets underlying any "security entitlement" now or hereafter credited to a securities account.  We note that to the extent the securities intermediary maintains any financial asset in a "clearing corporation" (as defined in Section 8-102(5) of the UCC), pursuant to Section 8-111 of the UCC, the rules of such clearing corporation ma y affect the rights of the securities intermediary;

(q)   we call to your attention that pursuant to Section 9-340 of the UCC, a bank with which a deposit account is maintained may continue to exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account;

(r)   insofar as our opinions relate to the Federal Book-Entry Regulations, such opinions are limited to regulations published in the Code of Federal Regulations or the Federal Register, without regard to any interpretations, operating circulars or other communications from the Department of the Treasury, the Board of Governors of the Federal Reserve System, any Federal Reserve Bank, the Department of Housing and Urban Development or any other federal agency or instrumentality.  Further, to the extent any of the financial assets are issued by the U.S. Treasury or certain other federally sponsored issuers, certain federal officials, including the Secretary of the Treasury and the Secretary of the Department of Housing and Urban Development, may waive the Federal Book-Entry Regulations and we express no opinion with respect to the effect of any such waiver on the opinions express herein;

(s)   we express no opinion with respect to the choice of law governing (A) authorization for filing financing statements and (B) perfection, the effect of perfection and non-perfection or priority of the security interest;

(t)   we call to your attention that the choice of law governing perfection of the security interest of the Collateral Agent may change to the extent the Company changes its location for purposes of Section 9-307 of the UCC;  

(u)   we call to your attention that the perfection of the security interest will be terminated as to any of the UCC Collateral acquired by the Company more than four months after the Company changes its name, identity or corporate structure so as to make the Financing Statement seriously misleading, unless new appropriate financing statements indicating the new name, identity or corporate structure of the Company are properly filed before the expiration of such four months; and

(v)   we call to your attention that the UCC requires the filing of continuation statements in order to maintain the effectiveness of the original Financing Statement.   

In rendering the foregoing opinions, we have assumed, with your consent, that:

a)the Company is validly existing and in good standing as a corporation under the laws of the State of New York;

(b)   the Company has the power and authority to execute, deliver and perform all of its obligations under each of the Collateral Documents and the execution and delivery of each of the Collateral Documents and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all requisite action on the part of the Company; and each of the Collateral Documents has been duly authorized, executed and delivered by the Company;

(c)   the execution, delivery and performance of any of the obligations under the Collateral Documents does not and will not conflict with, contravene, violate or constitute a default under (i) the certificate of incorporation or the by-laws of the Company, (ii) any lease, indenture, instrument or other agreement to which the Company or its property is subject, (iii) any rule, law or regulation to which the Company is subject or (iv) any judicial or administrative order or decree of any governmental authority; and

(d)   except for the consent of FINRA, which the Company has informed us it has obtained, no authorization, consent or other approval of, notice to or filing with any court, governmental authority or regulatory body is required to authorize or is required in connection with the execution, delivery or performance by the Company of any Collateral Document or the transactions contemplated thereby.

We understand that you are separately receiving opinions, with respect to certain of the foregoing assumptions from Dennis P. McNamara, General Counsel of the Company, and we are advised that such opinions contain qualifications.  Our opinions herein stated are based on the assumptions specified above and we express no opinion as to the effect on the opinions herein stated of the qualifications contained in such other opinions.

This opinion is being furnished only to you in connection with the Collateral Documents and is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon by any other person or entity for any purpose without our prior written consent; provided that each assignee of the Lender or any other person that hereafter becomes a "Lender" under the Credit Agreement pursuant to the assignment provisions incorporated by reference in Section 14.10 thereof may rely on this Opinion with the same effect as if it was originally addressed to such assignee as of the date hereof.

Very truly yours,

C-1-4

Schedule I – Addressees

CIBC Inc., as Lender

Canadian Imperial Bank of Commerce, as Collateral Agent

C-1-5

EXHIBIT C-2
TO SECURED CREDIT AGREEMENT

FORM OF OPINION OF GENERAL COUNSEL OF BORROWER

C-2-1

January 14, 2008

To the parties listed on Schedule I hereto

Re: OPY Credit Corp. Secured Credit Facility

Ladies and Gentlemen:

I am General Counsel of OPY Credit Corp., a New York corporation (the "Company"), and have acted as such in connection with the preparation, execution and delivery of the Secured Credit Agreement, dated as of the date hereof (the "Credit Agreement"), among the Company, CIBC Inc., as the lender thereunder (the "Lender") and Canadian Imperial Bank of Commerce, as collateral agent (the "Collateral Agent") and certain other agreements, instruments and documents related to the Credit Agreement.  This opinion is being delivered pursuant to Section 5.01(g) of the Credit Agreement.

In my examination I have assumed the genuineness of all signatures including endorsements, the legal capacity and competency of natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies.  As to any facts relevant to this opinion which I did not independently establish or verify, I have relied upon statements and representations of the Company and of E. A. Viner International Co., a Delaware corporation (the "Parent") and their respective officers and other representatives and of public officials, including the facts and conclusions set forth therein.

In rendering the opinions set forth herein, I have examined and relied on originals or copies of the following:

(i)

the Credit Agreement;

(ii)

the Note, dated as of the hereof, executed pursuant to the Credit Agreement;

(iii)

a certified copy of the certificate of incorporation and a copy of the by-laws of the Company;

(iv)

a copy of certain resolutions of the board of directors of the Company adopted on January 11, 2008;

(v)

a copy of certain resolutions of the board of directors of the Parent adopted on January 11, 2008;

(vi)

a certificate, dated January 10, 2008; and a facsimile bringdown thereof, dated as of the date hereof from the Secretary of State of the State of New York as to the Company's existence and good standing in the State of New York; and

(xi)

such other documents as I have deemed necessary or appropriate as a basis for the opinions set forth below.

I express no opinion as to the laws of any jurisdiction other than (i) the Applicable Laws of the State of New York, and (ii) the Applicable Laws of the United States of America.

The Credit Agreement and the Note are hereinafter referred to collectively as the "Transaction Agreements." "Applicable Contracts" means those agreements or instruments to which the Company is subject that are material to the business or financial condition of the Company.  "Applicable Laws" means those laws, rules and regulations which, in my experience, are normally applicable to transactions of the type contemplated by the Transaction Agreements, without my having made any special investigation as to the applicability of any specific law, rule or regulation, and which are not the subject of a specific opinion herein referring expressly to a particular law or laws (including any laws, rules and regulations pertaining specifically to any broker and/or dealer organizations).  "Governmental Approval" means a ny consent, approval, license, authorization or validation of, or filing, recording or registration with, any governmental authority pursuant to the Applicable Laws of the State of New York.  "Applicable Orders" means those orders or decrees of governmental authorities by which the Company is bound that are material to the business or financial condition of the Company.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, I am of the opinion that:

1.

The Company is validly existing and in good standing under the law of the State of New York.

2.

The Company has the corporate power and authority to execute, deliver and perform all of its obligations under each of the Transaction Agreements.  The execution and delivery of each of the Transaction Agreements and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of the Company under the law of the State of New York.   Each of the Transaction Agreements has been duly executed and delivered by the Company under the law of the State of New York.

3.

The execution and delivery by the Company of each of the Transaction Agreements and the performance by the Company of its obligations under each of the Transaction Agreements, each in accordance with its terms, do not conflict with the certificate of incorporation or bylaws of the Company.

4.

The execution and delivery by the Company of each of the Transaction Agreements and the performance by the Company of its obligations under each of the Transaction Agreements, each in accordance with its terms, do not (i) constitute a violation of, or a default under, any Applicable Contracts or (ii) cause the creation of any security interest or lien upon any property of the Company.

5.

Neither the execution, delivery or performance by the Company of the Transaction Agreements to which it is a party nor the compliance by the Company with the terms and provisions thereof will contravene any provision of any Applicable Law of the State of New York or any Applicable Law of the United States of America.

6.

No Governmental Approval, which has not been obtained or taken and is not in full force and effect, is required to authorize, or is required in connection with, the execution or delivery of any of the Transaction Agreements by the Company or the enforceability of any of the Transaction Agreements against the Company.

7.

Neither the execution, delivery or performance by the Company of its obligations under the Transaction Agreements nor compliance by the Company with the terms thereof will contravene any Applicable Order to which the Company is subject.

In rendering the foregoing opinions, I have assumed that all conditions precedent contained in Section 5.01 of the Credit Agreement, which conditions require the delivery of documents, evidence or other items satisfactory in form, scope and/or substance to the Lender or the satisfaction of which is otherwise in the discretion or control of the Lender have been, or contemporaneously with the delivery hereof will be, fully satisfied or waived.

C-2-2

This opinion is being furnished only to you in connection with the Transaction Agreements and is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon by any other person or entity for any purpose without my prior written consent; provided that each assignee of the Lender or other person that hereafter becomes a "Lender" under the Credit Agreement pursuant to the assignment provisions incorporated by reference in Section 14.10 thereof may rely on this Opinion with the same effect as if it was originally addressed to such assignee as of the date hereof.

Very truly yours,



Dennis P. McNamara
General Counsel

C-2-3

Schedule I — Addressees

Canadian Imperial Bank of Commerce, as Collateral Agent

CIBC Inc., as Lender

C-2-4

[_________], 2008

To the parties listed on Schedule I hereto

Re: OPY Credit Corp. Secured Credit Facility

Ladies and Gentlemen:

I am General Counsel of OPY Credit Corp., a New York corporation (the "Company"), and have acted as such in connection with the preparation, execution and delivery of the Secured Credit Agreement, dated as of January 14, 2008 (the "Credit Agreement"), among the Company, CIBC Inc., as the lender thereunder (the "Lender") and Canadian Imperial Bank of Commerce, as collateral agent (the "Collateral Agent") and certain other agreements, instruments and documents related to the Credit Agreement.  This opinion is being delivered pursuant to Section 5.01(g) of the Credit Agreement.

In my examination I have assumed the genuineness of all signatures including endorsements, the legal capacity and competency of natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies.  As to any facts relevant to this opinion which I did not independently establish or verify, I have relied upon statements and representations of the Company and of E. A. Viner International Co., a Delaware corporation (the "Parent") and their respective officers and other representatives and of public officials, including the facts and conclusions set forth therein.

In rendering the opinions set forth herein, I have examined and relied on originals or copies of the following:

(i)

the Credit Agreement;

(ii)

the Pledge and Security Agreement, dated as of the date hereof, between the Company and the Collateral Agent (the "Security Agreement");

(iii)

the deposit account control agreement dated as of [__________], 2008 among the Company as grantor, the Collateral Agent and [______________] as the Financial Institution thereunder, with respect to account number ______ established at the Financial Institution and identified by the name of _____________ (the "Deposit Account Control Agreement");

(iv)

the securities account control agreement dated as of [__________], 2008 among the Company as grantor, the Collateral Agent and [______________] as the Securities Intermediary thereunder, with respect to account number ______ established at the Securities Intermediary and identified by the name of _____________. (the "Securities Account Control Agreement");

(v) a certified copy of the certificate of incorporation and a copy of the by-laws of the Company;

(vi)

a copy of certain resolutions of the board of directors of the Company adopted on January 11, 2008;

(vii)

a copy of certain resolutions of the board of directors of the Parent adopted on January 11, 2008;

(viii)

a certificate, dated January [__], 2008; and a facsimile bringdown thereof, dated as of the date hereof from the Secretary of State of the State of New York as to the Company's existence and good standing in the State of New York; and

(ix)

such other documents as I have deemed necessary or appropriate as a basis for the opinions set forth below.

I express no opinion as to the laws of any jurisdiction other than (i) the Applicable Laws of the State of New York, and (ii) the Applicable Laws of the United States of America.

The Security Agreement, the Deposit Account Control Agreement and the Securities Account Control Agreement are hereinafter referred to collectively as the "Collateral Documents." "Applicable Contracts" means those agreements or instruments to which the Company is subject that are material to the business or financial condition of the Company.  "Applicable Laws" means those laws, rules and regulations which, in my experience, are normally applicable to transactions of the type contemplated by the Collateral Documents, without my having made any special investigation as to the applicability of any specific law, rule or regulation, and which are not the subject of a specific opinion herein referring expressly to a particular law or laws (including any laws, rules and regulations pertaining specifically to any broker and/or dealer o rganizations).  "Governmental Approval" means any consent, approval, license, authorization or validation of, or filing, recording or registration with, any governmental authority pursuant to the Applicable Laws of the State of New York.  "Applicable Orders" means those orders or decrees of governmental authorities by which the Company is bound that are material to the business or financial condition of the Company.

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, I am of the opinion that:

1.

The Company is validly existing and in good standing under the law of the State of New York.

2.

The Company has the corporate power and authority to execute, deliver and perform all of its obligations under each of the Collateral Documents.  The execution and delivery of each of the Collateral Documents and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of the Company under the law of the State of New York.   Each of the Collateral Documents has been duly executed and delivered by the Company under the law of the State of New York.

3.

The execution and delivery by the Company of each of the Collateral Documents and the performance by the Company of its obligations under each of the Collateral Documents, each in accordance with its terms, do not conflict with the certificate of incorporation or bylaws of the Company.

4.

The execution and delivery by the Company of each of the Collateral Documents and the performance by the Company of its obligations under each of the Collateral Documents, each in accordance with its terms, do not (i) constitute a violation of, or a default under, any Applicable Contracts or (ii) cause the creation of any security interest or lien upon any property of the Company (other than the security interest created under the Security Agreement).

5.

Neither the execution, delivery or performance by the Company of the Collateral Documents nor the compliance by the Company with the terms and provisions thereof will contravene any provision of any Applicable Law of the State of New York or any Applicable Law of the United States of America.

6.

No Governmental Approval, which has not been obtained or taken and is not in full force and effect, is required to authorize, or is required in connection with, the execution or delivery of any of the Collateral Documents by the Company or the enforceability of any of the Collateral Documents against the Company.

7.

Neither the execution, delivery or performance by the Company of its obligations under the Collateral Documents nor compliance by the Company with the terms thereof will contravene any Applicable Order to which the Company is subject.

In rendering the foregoing opinions, I have assumed that all conditions precedent contained in Section 5.01 of the Credit Agreement, which conditions require the delivery of documents, evidence or other items satisfactory in form, scope and/or substance to the Lender or the satisfaction of which is otherwise in the discretion or control of the Lender have been, or contemporaneously with the delivery hereof will be, fully satisfied or waived.

C-2-5

This opinion is being furnished only to you in connection with the Collateral Documents and is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon by any other person or entity for any purpose without my prior written consent; provided that each assignee of the Lender or other person that hereafter becomes a "Lender" under the Credit Agreement pursuant to the assignment provisions incorporated by reference in Section 14.10 thereof may rely on this Opinion with the same effect as if it was originally addressed to such assignee as of the date hereof.

Very truly yours,



Dennis P. McNamara
General Counsel

C-2-6

Schedule I — Addressees

Canadian Imperial Bank of Commerce, as Collateral Agent

CIBC Inc., as Lender

C-2-7

EXHIBIT D
TO SECURED CREDIT AGREEMENT

OFFICER’S CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES SOLELY IN HIS CAPACITY AS AN AUTHORIZED OFFICER OF [________________] AS FOLLOWS:

1.

I am the [Chief Financial Officer]/[Treasurer] of [______________].

2.

I have reviewed the terms of that certain Secured Credit Agreement, dated as of January 14, 2008 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among [___________________], (the “Borrower”), CIBC INC. (the “Lender”), and CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent for the Secured Creditors (in such capacity, together with its successors and assigns, if any, the “Collateral Agent”) and the other Loan Documents thereunder, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and financial condition of the Borrower during the accounting period covered by the attached financial statements.

3.

The examination described in paragraph 2 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, an Event of Default or Default as of the date of such Certificate, except as set forth in a separate attachment, if any, to this Certificate, describing in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, and proposes to take with respect to each such condition or event.

The foregoing certifications, together with the financial statements delivered with this Certificate in support hereof, are made and delivered [mm/dd/yy] pursuant to Section 7.01(c) of the Credit Agreement.

[______________]


By:

Title:  

D-1

EXHIBIT E
TO SECURED CREDIT AGREEMENT

FORM OF NOTICE OF REQUIRED COLLATERAL SURPLUS DEFICIENCY

[ON LENDER’S LETTERHEAD]

[date]

[Borrower]
[Address]
[Address]
Attn: [_______]

Notice of Required Collateral Surplus Deficiency

Reference is made to the Secured Credit Agreement, dated as of January 14, 2008 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among [___________________], (the “Borrower”), CIBC INC. (the “Lender”), and CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent for the Secured Creditors (in such capacity, together with its successors and assigns, if any, the “Collateral Agent”).  

We hereby give you written notice that a Required Collateral Surplus Deficiency is in existence.

We reserve all our rights under the Credit Agreement with respect to such Required Collateral Surplus Deficiency.

Sincerely,

CIBC Inc.

By:_____________________
Name:
Title

E-1

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Forms S-8 (No. 333-129387, 333-129389, 333-129390, 333-146989 and 333-146990) of Oppenheimer Holdings Inc. of our report dated March 7, 2008 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

PricewaterhouseCoopers LLP

New York, NY

March 7, 2008

EX-31

CERTIFICATION EXHIBIT 31.1

I, Albert G. Lowenthal, certify that:

1.

I have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.;

2.

Based on my knowledge, this annual 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 annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4.

The registrant’s other certifying officers 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)) for the registrant and we 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the annual report based on such evaluation;

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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5.

The registrant’s other certifying officers 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 registrant’s board of directors (or persons performing the equivalent function):

(a) significant deficiencies 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 data; 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.

Name: Albert G. Lowenthal

Title: Chief Executive Officer

March 7, 2008

EX-31

CERTIFICATION EXHIBIT 31.2

I, Elaine K. Roberts

1.  have reviewed this annual report on Form 10-K of Oppenheimer Holdings Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4. The registrant’s other certifying officers 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)) for the registrant and we 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the annual report based on such evaluation;

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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

5. The registrant’s other certifying officers 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 registrant’s board of directors (or persons performing the equivalent function):

(a) significant deficiencies 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 data; 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.

Name: Elaine K. Roberts

Title: Chief Financial Officer

March 7, 2008

EX-32

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

         The undersigned, Albert G. Lowenthal, Chairman and Chief Executive Officer of Oppenheimer Holdings Inc. (the "Company"), hereby certifies that to his knowledge the Annual Report on Form 10-K for the period ended December 31, 2007 of the Company filed with the Securities and Exchange Commission on the date hereof  (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period specified.

Signed at the New York, New York, this 7th day of March 2008.

Albert G. Lowenthal

Chairman and Chief Executive Officer

EX-32

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

         The undersigned, Elaine K. Roberts, President and Chief Financial Officer of Oppenheimer Holdings Inc. (the "Company"), hereby certifies that to her knowledge the Annual Report on Form 10-K for the period ended December 31, 2007 of the Company filed with the Securities and Exchange Commission on the date hereof  (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period specified.

Signed at the City of Toronto, Ontario, Canada, this 7th day of March 2008.

Elaine K. Roberts

President and Chief Financial Officer

EX-10

EXHIBIT 10.14

SERVICE AGREEMENT

SERVICE AGREEMENT (this “Service Agreement”), dated as of January 14, 2008, by and between CIBC DELAWARE HOLDINGS INC., a Delaware corporation, having offices at 300 Madison Avenue, New York, NY 10017 (“Provider”) and OPPENHEIMER & CO. INC., a New York corporation, having offices at 300 Madison Avenue, New York, NY 10017 (“Occupant”).

W I T N E S S E T H:

WHEREAS, pursuant to the terms of that certain Amended and Restated Lease, dated as of April 24, 2002 (as the same may be amended, restated or otherwise modified from time to time, the “Lease”), BFP 300 Madison II LLC, a Delaware limited liability company (the “Landlord”) leased to Provider certain premises, a portion of which consists of approximately 1,307 square feet of space on the sub cellar level, approximately 47,476 square feet of space comprising the entire 3^rd floor, approximately 47,619 square feet of space comprising the entire 4^th floor, approximately 29,159 square feet of space on the 5^th floor, approximately 1,577 square feet of space on the 6^th floor and approximately 34,596 square feet of space on the 7^th floor (collectively, the “Space”), as shown on Exhibit A attached hereto and made a part hereof, located in the building located at 300 Madison Avenue, New York, New York (the “Building”); and

WHEREAS, Provider desires to permit Occupant to occupy the Space and provide certain services to Occupant upon the terms and conditions set forth herein; and

WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement, dated as of November 2, 2007 (the “Asset Purchase Agreement”) by and among Oppenheimer Holdings Inc., a Canadian corporation (“Buyer Parent”), Oppenheimer & Co. Inc., a New York corporation and a wholly-owned indirect broker/dealer subsidiary of Buyer Parent (“Buyer”), Canadian Imperial Bank of Commerce, a Canadian chartered bank (“Seller Parent”), CIBC World Markets Corp., a Delaware corporation and a wholly-owned indirect broker/dealer subsidiary of Seller Parent (the “Company”), and CIBC World Markets plc, a public limited company organized under the laws of England and a wholly-owned direct broker/dealer subsidiary of Seller Parent (“UK Seller”), Seller Parent agreed to cause Provider, and Buyer agreed t o cause Occupant, to enter into this Service Agreement.

NOW, THEREFORE, in consideration of the fees to be paid hereunder by Occupant to Provider and the mutual terms, covenants and conditions hereinafter set forth, Provider does hereby permit Occupant to occupy the Space upon the terms and conditions of this Service Agreement.  

1.

Definitions.  The terms defined in this Section 1 shall, for the purposes of this Service Agreement, have the following meanings:

“Affiliate” means, with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with, the Person specified.  

“Approved Plans and Specifications” has the meaning set forth in Section 6(c).

“Asset Purchase Agreement” has the meaning set forth in the recitals.

“Building” has the meaning set forth in the recitals.

“Business Day” means any day other than a Saturday or Sunday or other day on which banks in New York, New York, are closed or are authorized to be closed.

“Buyer” has the meaning set forth in the recitals.

“Buyer Parent” has the meaning set forth in the recitals.

“Certificate of Occupancy” means a certificate of occupancy (temporary or permanent) issued by the Department of Buildings of New York City pursuant to Section 645 of the New York City Charter or any successor statute of similar import, or other similar certificate issued by a department or agency of New York City in lieu thereof.

“Company” has the meaning set forth in the recitals.

“Data Center” has the meaning set forth in Section 9.

“Default” means any condition or event which constitutes or, after notice or lapse of time, or both, would constitute an Event of Default.

“Environmental Claim” means any claim, action, investigation or written notice by any Person alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (A) the presence, release or threatened release into the environment, of any Hazardous Substance or (B) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“Environmental Laws” means all federal, state, local and foreign laws, statutes, regulations or ordinances, governmental guidelines, contractual obligations, judicial or administrative orders, decrees, directives, judgments and opinions, pertaining to health, industrial hygiene, pollution, Hazardous Substances or the environment, including, but not limited to, each of the following, as enacted as of the date hereof or as hereafter amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (also known as CERCLA), 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.; the Toxic Substance Control Act, 15 U.S.C. §§ 2601 et seq.; the Water Pollution Control Act (also known as the Clean Water Act), 33 U.S.C. §§ 1251 et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; and the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.

“Environmental Permits” means all permits, licenses, authorizations, registrations and other governmental consents required by applicable Environmental Laws.

“Environmental Violation” has the meaning set forth in Section 41(c)(iii).

“Event of Default” has the meaning set forth in Section 17.

“Expiration Date” means the date of the expiration of the Occupancy Period as set forth in Section 2(a).

“Governmental Authority” means any of the United States of America, the State of New York, New York City and any agency, department, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having jurisdiction over the Space or any portion thereof.

“Hazardous Substance” means any material, waste or substance which is (1) included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic or hazardous pollutants,” “toxic materials,” “toxic substances,” or “solid waste” in or pursuant to any Environmental Law, or subject to regulation under any Environmental Law; (2) listed in the United States Department of Transportation Optional Hazardous Materials Table, 49 C.F.R. § 172.101, as enacted as of the date hereof or as hereafter amended, or in the United States Environmental Protection Agency List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as enacted as of the date hereof or as hereafter amended; or (3) an explosive, radioactive material, waste or substance, asbestos in any form, a polychlorinated biphenyl, petroleum or a petroleum product or waste oil, natural gas and urea formaldehyde foam insulation.

“Impositions” shall mean the following items imposed by any Governmental Authority: (a) Taxes, (b) personal property taxes, (c) occupancy and rent taxes, (d) water, water meter and sewer rents, rates and charges, (e) excises, (f) levies, (g) license and permit fees, (h) any amounts levied, in whole or in part, for public benefits to the Building, including, without limitation, Business Improvement District and similar charges, and (i) fines, penalties and other similar or like governmental charges applicable to the foregoing and any interest or costs with respect thereto.  

“Landlord” has the meaning set forth in the recitals.

“Landlord’s Consent” means the written consent of Landlord to this Service Agreement on its standard form of consent or the Landlord being deemed to consent to this Service Agreement pursuant to Section 10.07(b) of the Lease.

“Late Charge” means a charge computed on the amount in question at a per annum interest rate equal to the Prime Rate plus 3%; provided, that in no event shall such rate exceed the maximum rate permitted by law.

“Lease” has the meaning set forth in the recitals.

“Occupancy Period” has the meaning set forth in Section 2(a).

“Occupant” has the meaning set forth in the preamble.

“Occupant’s Property” has the meaning set forth in Section 14(a).

“Occupant’s Proportionate Share” has the meaning set forth in Section 3(a).

“Other Charges” shall mean all of the costs, expenses, charges and other amounts (including, without limitation, all Impositions and utility and service costs paid by Provider) of every kind and nature, which relate to the Space and the operation, management, maintenance and repair thereof, and which in each case arise or become due or payable during the Occupancy Period or, to the extent attributable to a period falling within the Occupancy Period, after the Occupancy Period, provided, however, “Other Charges” shall exclude:  (1) interest on and amortization of mortgages encumbering the Building and/or the land underlying same; (2) the cost of tenant improvements made for tenant(s) of the Building (including Provider); (3) leasing or brokerage commissions; (4) the cost of any electricity consumed in space in the Building for occupants other than Occupant (including Provider); (5) salaries and fringe benefits for Building management employees above the grade of senior building manager; (6) costs otherwise includible in Other Charges for which Provider has received reimbursement from insurance (but excluding any deductible amount); (7) costs of repair or replacements incurred by reason of insured fire or other casualty or condemnation, except to the extent of the deductible under any policies of insurance; (8) advertising and promotional expenditures in connection with the leasing of rentable areas of the Building; (9) depreciation of the Building and equipment in the Building; (10) “Rentals” (as defined in the Lease) under the Lease; (11) attorneys’ and other professional and brokerage fees incurred in connection with leasing space to tenants, exercising consent and review rights regarding a particular tenant, tenant disputes (including, disputes with Provider) and/or attorneys’ fees incurred in connection with the enforcement of any parti cular tenant's lease against such tenant; (12) the costs of the acquisition or leasing of any works of fine art or other movable decorative Building enhancements not constituting fixtures; (13) costs for which Provider is actually reimbursed under warranties; (14) costs incurred due to the violation by Provider (excluding Occupant) or any tenant of the Building of any laws, rules, regulations or ordinances applicable to the Building; (15) financing and refinancing costs in respect of any mortgages encumbering the Building; (16) capital expenditures and capitalized lease obligations; (17) any costs relating to any portions of the Building that are not “Office Premises” as defined in the Lease and (18) legal costs and expenses directly incurred by Provider in connection with the sale or transfer of all or any portion of the Building.

“person” means a natural person or persons, a partnership, a corporation, a limited liability company or any other form of business or legal association or entity.  

“Person” means an individual, corporation, partnership, joint venture, estate, trust, unincorporated association or other entity, any federal, state, county or municipal government or any bureau, department, authority or agency thereof.

“Prime Rate” means the rate published from time to time by The Wall Street Journal as the “Prime Rate” or “Base Rate”, and if such prime rate shall cease to be so published, then the term “Prime Rate” shall mean the commercially recognized equivalent.  Any interest payable with reference to the Prime Rate shall be adjusted on a daily basis, based upon the Prime Rate in effect at the time in question, and shall be calculated with respect to the actual number of days elapsed on the basis of a 360-day year with 12 months of 30 days each.

“Provider” has the meaning set forth in the preamble.

“Provider Party” means Provider or any of its respective partners, members, shareholders, principals, officers, directors, agents, employees, consultants, contractors, predecessors, successors or Affiliates.

“Provider’s Last Month Rent” has the meaning set forth in Section 19(b).

“Regulated Activity” means the generation, manufacture, storage, handling, use, transfer, treatment, recycling, transportation, processing, production, refinement or disposal of any Hazardous Substances.

“Requirements” has the meaning set forth in Section 13.

“Seller Parent” has the meaning set forth in the recitals.

“Service Agreement” has the meaning set forth in the preamble.

“Service Fee” has the meaning set forth in Section 3(a).

“Space” has the meaning set forth in the recitals.

“Start Date” has the meaning set forth in Section 2(a).

“Substantially Complete” or “Substantial Completion” shall mean, with respect to any space, when such space is complete subject only to minor punchlist items that do not interfere with the use and occupancy of the space for its intended purpose more than to a de minimis extent; provided, that Provider shall promptly and diligently complete such punchlist items; and provided, further, that “Substantial Completion” shall require that any trading floor in such space is fully wired and operational for Occupant’s business purposes.

“Taxes” shall mean (i) the real property taxes, assessments and special assessments that are assessed and levied against the Space or any part thereof pursuant to the provisions of Chapter 58 of the Charter of New York City and Chapter 17, Title E, of the Administrative Code of The City of New York, as the same may now or hereafter be amended, or any statute or ordinance in lieu thereof in whole or in part, and (ii) fines, penalties and other similar or like governmental charges applicable to the foregoing taxes, assessments or charges and any interest or costs with respect thereto.  “Taxes” shall expressly exclude any municipal, state or federal income, inheritance, estate, excise, succession, real property transfer, recording, mortgage, transfer or gift taxes of Provider or Landlord, or any corporate franchise tax imposed upon Provider or Landlord or any gro ss income or gross receipts taxes to the extent the same are imposed on Provider or Landlord in lieu of net income taxes or corporate franchise taxes.

“Termination Portion” has the meaning set forth in Section 8.

“UK Seller” has the meaning set forth in the recitals.

2.

Start Date; Occupancy Period.  i)  The occupancy period of this Service Agreement (the “Occupancy Period”) shall begin (the “Start Date”) on the Closing Date (as defined in the Asset Purchase Agreement) and shall continue for eighteen (18) months after the Start Date, which period shall be automatically extended for continuous periods of six (6) months unless Occupant delivers written notice to Provider not less than sixty (60) days prior to the end of the then current Occupancy Period or until such earlier date upon which the term of this Service Agreement shall expire or be cancelled or terminated pursuant to any of the covenants or conditions of this Service Agreement or pursuant to law (the “Expiration Date”).  In no event shall the Expiration Date be later than the fifth (5^th) anniversary of the Start Date.  

(b)

The parties conclusively agree that the square footage of the Space is 161,734 square feet.

(c)

Provider has commenced the planning and work to separately demise the Space in a layout that is mutually satisfactory to Provider and Occupant in their reasonable discretion promptly upon the signing of the Asset Purchase Agreement, which work shall be Substantially Complete within thirty (30) days following the commencement of the Occupancy Period, subject to a reasonable extension for strikes, labor and material shortages and acts of war.  Subject to such demising, the Space shall be delivered simultaneously to Occupant, free and clear of all occupants/tenancies of Provider or any other Person (other than Occupant).

(d)

Subject to the terms and provisions of the Asset Purchase Agreement and Section 2(c) hereof, Provider shall deliver the Space with all leasehold improvements, interior offices and partitions for the duration of Occupant’s occupancy in the same location and condition as of the date of the Asset Purchase Agreement, subject to ordinary wear and tear and the demising of the Space as provided herein.  All such leasehold improvements, interior offices and partitions shall remain the property of Provider at the end of the Occupancy Period.  Subject to the terms of the Asset Purchase Agreement, all furniture, office equipment, trade fixtures, computers, peripherals and telephones (and similar equipment) shall remain in the Space as property of Occupant.

2.

Service Fee.  ii) Occupant shall pay to Provider, during the Occupancy Period of this Service Agreement, a service fee (the “Service Fee”) of Sixty-Eight and 00/100 Dollars ($68.00) per square foot, which amount it is agreed by the parties equals $10,997,912 per annum, in equal monthly installments of $916,492.67, plus Occupant’s Proportionate Share (as hereinafter defined) of Provider’s actual costs for (i) Taxes (other than interest, fines, or penalties due by reason of the late payment of any taxes or other charges), (ii) all Other Charges with respect to the Space and (iii) other services requested by Occupant from Provider such as food and beverage services, security (beyond the level provided to tenants in the Building) and normal repair and maintenance of the Space or maintenance not included under clause (ii) above, in each case, at Provider’s actual cost for such services and payable by Occupant within thirty (30) days after receipt by Occupant of an invoice from Provider therefor.  For purposes hereof, “Occupant’s Proportionate Share” shall mean 15.0%.

(c)

The Service Fee shall be payable in advance by Occupant on or before the first day of every calendar month during the Occupancy Period but not more than one (1) month in advance of the due date for any portion of the Service Fee under this Service Agreement.  Occupant on the Closing Date shall deliver to Provider a check for the first monthly installment of the Service Fee.  Provider shall deliver an estimate of the monthly Service Fee to Occupant prior to the commencement of the Occupancy Period and Occupant shall make the monthly payments required above pursuant to such estimate.  Provider shall provide Occupant with a reconciliation of the actual amount of the Service Fee within ninety (90) days following the end of the first calendar year of the Occupancy Period and each year thereafter or within ninety (90) days following the end of the Occupancy Period for any pa rtial year.  Any difference between the estimated and the actual Service Fee shall be paid by the party owing such amount within ten (10) Business Days after such determination unless disputed by Occupant, which obligation by the applicable party to pay the difference shall survive the Expiration Date.  In the event Occupant disputes any determination of the actual Service Fee amount, Occupant shall have reasonable access to the operating books and records of the Building to confirm such determination or any inconsistency.  The parties shall resolve any such dispute within thirty (30) days with a mutually satisfactory determination in their reasonable discretion or, if the parties cannot resolve such dispute within such period, then such dispute shall be determined by arbitration in the manner as provided in Section 42 herein, and the results of such arbitration shall be conclusive and binding on the parties.  

(d)

The Service Fee, and other sums and charges due to Provider under this Service Agreement shall be paid by Occupant at the office of Provider set forth above, or at such other place as Provider may designate in writing to Occupant, without any counterclaim, setoff or deduction whatsoever, and without demand therefor.  Payment of the Service Fee hereunder shall be by Occupant’s unendorsed check (subject to collection) drawn on a New York City bank which clears funds through the New York Clearing House Association (or any successor body of similar function) or by wire transfer of immediately available funds to an account designated by Provider.  If the Start Date is not the first day of a calendar month or the Expiration Date of this Service Agreement is not the last day of a calendar month, the Service Fee for the month in which the Start Date or the Expiration Date occu rs shall be pro-rated on a per diem basis based on the actual number of days in such month.  Occupant’s obligations under the provisions of this Section 3 shall be apportioned for any period at the beginning or end of the Occupancy Period that is less than a full calendar year.  Provider shall have the right to demand payment during or within ninety (90) days after the expiration or earlier termination of this Service Agreement for payments due from Occupant under this Service Agreement which are attributable to the Occupancy Period.

(e)

Occupant’s obligation to pay the Service Fee hereunder shall commence from and after the Start Date for the remainder of the Occupancy Period and shall survive the expiration or earlier termination of this Service Agreement for payments due from Occupant under this Service Agreement which are attributable to the Occupancy Period; provided that Provider shall have made demand therefor within ninety (90) days after the expiration or earlier termination of this Service Agreement.

(f)

No payment by Occupant or receipt or acceptance by Provider of a lesser amount than the correct amount of any Service Fee shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and Provider may accept such check or payment without prejudice to Provider’s right to recover the balance or pursue any other remedy in this Service Agreement or at law provided.

(g)

If any amount of the Service Fee payable under the terms and provisions of this Service Agreement shall be or become uncollectible, reduced or required to be refunded because of any law enacted by a governmental authority, Occupant shall enter into such agreement(s) and take such other steps (without additional expense or liability to Occupant) as Provider may reasonably request and as may be legally permissible to permit Provider to collect the maximum fees and other charges which from time to time during the continuance of such legal restriction may be legally permissible (and not in excess of the amounts reserved therefor under this Service Agreement).  Upon the termination of such legal restriction, (a) the Service Fee in question shall become and thereafter be payable in accordance with the amounts reserved herein for the periods following such termination, and (b)&nbs p;Occupant shall pay to Provider, to the maximum extent legally permissible, an amount equal to (i) the amount of Service Fees in question which would have been paid pursuant to this Service Agreement but for such legal restriction less (ii) the amounts with respect to such Service Fee paid by Occupant during the period such legal restriction was in effect.

2.

Use.  (a)  Occupant shall use the Space for trading operations, general, executive and administrative offices and for uses incidental and ancillary thereto and for no other purpose, and shall use and occupy the Space in full compliance with the terms of this Service Agreement.

(a)

Occupant shall not use or occupy the Space or any part thereof, or permit or suffer the Space or any part thereof to be used or occupied for any unlawful business, use or purpose, or in an unlawful manner or such manner as to constitute in law or in equity a nuisance of any kind (public or private), or for any purpose or in any way in violation of the Certificate of Occupancy for the Space in effect from time to time during the Occupancy Period (so long as such Certificate of Occupancy permits the use of the Space for office purposes) or of any Requirements, or which may make void or voidable any insurance then in force on the Space.  Occupant shall take, immediately upon the discovery of any such prohibited use, all necessary steps, legal and equitable, to compel the discontinuance of such use and Occupant shall exercise all of its rights and remedies against any occupants resp onsible for such use.

(b)

Occupant shall not suffer or permit the Space or any portion thereof to be used by the public without restriction or in such manner as might impair title to the Space or any portion thereof, or of implied dedication of the Space or any portion thereof, and in furtherance thereof, Occupant shall have the right to close any or all of the public areas of the Space to the public for one day in each calendar year, such day to be a holiday observed by both the State of New York and the federal government.

(c)

If any licenses, permits and/or authorizations of any Governmental Authorities required with respect to the Space pursuant to Section 13, shall be required for the proper and lawful conduct in the Space or any part thereof of the business of Occupant (or any Person claiming by, through or under Occupant), then Occupant, at Occupant’s expense, shall duly procure and thereafter maintain such licenses, permits and authorizations and submit the same to Provider for inspection.  Occupant shall at all times comply with the terms and conditions of each such license, permit and authorization.

(d)

Occupant shall not at any time use or occupy the Space, or suffer or permit anyone to use or occupy, the Space, or do anything in the Space, or permit anything to be done in the Space, in any manner (i) which violates any restrictions as to use and occupancy set forth in this Section or (ii) which violates any of Occupant’s other obligations under this Service Agreement.

3.

Services.  Subject to the payment by Occupant of any service fees related thereto, Provider shall provide or cause to be provided to Occupant all utilities and other services in the manner as previously supplied to Provider for its use of the Space, including, without limitation, electricity, condenser water, air conditioning, elevator, cleaning, mailroom and delivery/messenger center, and a lobby desk reception area shared with Provider, in each case, in a manner and in such quantities as shall be sufficient for Occupant to operate the business in the Space as operated by Provider prior to the commencement of the Occupancy Period.  

4.

Condition of the Space; Alterations, etc.  iii)  Subject to the provisions of Section 2(c) hereof, Occupant shall accept the Space on the Start Date in its “as is” condition as of the date of the Asset Purchase Agreement, subject to normal wear and tear, damage by fire and other casualty and condemnation event.  Notwithstanding anything to the contrary in the Lease, except as specifically set forth herein, Provider makes no representations or warranties whatsoever with respect to the condition of the Space or the Building. In making and executing this Service Agreement, Occupant has relied solely on such investigations, examinations and inspections as Occupant has chosen to make.  Occupant acknowledges that Provider has afforded Occupant the opportunity for full and complete investigations, examinations, and inspections o f the Space.

(d)

Provider shall have no obligation to make or pay for any alterations, additions, installations, substitutions, improvements, decorations or costs of restoration, removal or repair of any kind or nature whatsoever relating to the Space, except as set forth in Section 2(c) herein.

(e)

Occupant shall have the right to perform cosmetic upgrades to the Space from time to time with reasonable prior notice to Provider and subject to the requirements of the Lease and to reasonable standards otherwise imposed by Provider in connection with the performance of such upgrades.  Occupant shall not, without the prior written consent of Provider, which consent shall not be unreasonably withheld, conditioned or delayed, perform any alterations (other than as set forth in the previous sentence) to the Space.  The refusal of Landlord to consent to any such alteration if Landlord’s consent to such alteration is required pursuant to the Lease (which the parties agree is only required under the Lease for a “Material Alteration”, as defined in the Lease), shall constitute a reasonable determination by Provider to withhold consent to such alteration.  Othe r than for cosmetic upgrades, Occupant shall submit to Provider the plans and specifications depicting any proposed alterations (which shall be in form reasonably acceptable to Provider and, in any event, in the form required by the Lease) and which shall be promptly reviewed by Provider and, with respect to a Material Alteration, promptly after receipt by Provider, forwarded to Landlord for review, in each case, with Occupant being responsible for the actual reasonable out-of-pocket costs and expenses of Provider and Landlord (including, without limitation, all charges due under the Lease with respect thereto) reviewing the plans and specifications (provided, however, in the case of Landlord, only for Landlord reviewing plans and specifications for a Material Alteration).  In no event shall Occupant be responsible for any fee in addition to such costs and expenses for reviewing Occupant’s plans and specifications or for supervising the performance of any alteration except to the extent Provider is required to pay same under the Lease.  Occupant agrees that upon receiving Landlord’s (to the extent required pursuant to the Lease) and Provider’s consent to such plans and specifications pursuant to Article 13 of the Lease (as consented to, the “Approved Plans and Specifications”), Occupant shall cause such alterations to be constructed pursuant to the Approved Plans and Specifications and in compliance with the requirements of Article 13 of the Lease.  With respect to a Material Alteration, if Landlord shall fail to grant its approval or disapproval of such Material Alteration within the time period set forth in Section 13.01(f) of the Lease, then, at Occupant's request, Provider shall give Landlord the reminder notice provided in the next to last sentence of said Section 13.01(f).  If Provider fails to disapprove the plans and specifications for such Material Alteration within five (5) days after Landlord approves or is deemed to approve such plans and specifications, Provider shall be deemed to have approved same.

(f)

On the termination of the Lease pursuant to Article 24 therein, upon Landlord’s request the Occupant will promptly deliver to Landlord “as built” drawings, if any, of any construction, alteration, renovation and/or restoration work Occupant performed or caused to be performed in the Space, and (i) if any construction, alteration, renovation and/or restoration work with respect to such space is then proposed or in progress, Occupant’s drawings and specifications, if any, for such work, and (ii) if any construction, alteration, renovation and/or restoration work by Provider for the Occupant with respect to the Space was performed or is then proposed or in progress, the “as-built” drawings, if any, or the drawings and specifications, if any, as the case may be, for such work in Occupant’s possession.

2.

Signage.  Occupant shall have the right to erect such signage reasonably approved by Provider indicating the location of (i) Occupant’s reception area in the lobby of the Building (which area shall be shared with Provider) and (ii) Occupant’s Space on any partial floors.

3.

Reduction of Space; Termination.  (a)  Occupant shall have the option, once during the Occupancy Period, to terminate a portion of the Space which shall be mutually agreed upon with Provider (a “Termination Portion”) upon not less than twelve (12) months’ prior written notice to Provider.  Such Termination Portion shall consist of at least 10,000 rentable square feet, and be accessible by a public corridor.  Notwithstanding the foregoing, Occupant shall have the option, after March 13, 2008, to terminate (i) approximately 14,696 square feet of executive and conference center space on the 3^rd floor, (ii)  approximately 5,635 square feet of conference center space on the 4^th floor and/or (iii) approximately 8,000 square feet of office and trading space on the 4^th floor; provided , that, such option to terminate is exercised no later than March 27, 2008.  Should any demising of a Termination Portion be necessary in connection with the termination thereof, Occupant agrees to pay for all such demising work and costs.  Upon the termination of a Termination Portion, the portion of the Service Fee set forth in Section 3(a) shall be reduced in the proportion that the square footage of the Termination Portion bears to the square footage of the Space immediately prior to the termination of such Termination Portion.  Similarly, Occupant's Proportionate Share shall be decreased proportionately.

(b)

Occupant shall have the option to terminate all of the Space within the period that is twelve (12) months prior to the fifth (5^th) anniversary of the Start Date, upon not less than four (4) months’ prior written notice to Provider.  Upon such termination of the Space, Occupant shall vacate the Space and the Service Fee and all other charges under this Service Agreement shall be apportioned as of the date Occupant actually vacates the Space in the manner required under this Service Agreement.  Upon such surrender, this Service Agreement shall terminate other than with respect to those terms that shall expressly survive the termination or expiration of this Service Agreement.

4.

Access to Data Center.  Occupant shall have reasonable supervised access to the data center shown by the cross-hatching on Exhibit B (the “Data Center”) and use of a reasonable amount of space in the data center on such other terms as the parties shall agree.  In addition, Occupant shall have use of the telephone and utility closets located in a reasonably convenient location in relation to the portion of the Space in question.  Use of the telephone and utility closets shall be exclusive for a number of closets as shall be reasonably agreed between Provider and Occupant.  All use of telephone and utility closets in the data center shall be shared and subject to the general controls on use of the data center.  All changes and installations in the data center shall be subject to Provider’s approval, but not to be unreasonably withheld.

5.

Performance By Provider.  iv) So long as Occupant is not in default of any of its obligations hereunder beyond the expiration of any applicable notice and grace period, Provider shall not do, suffer or permit anything to be done on Provider’s behalf (including, without limitation, to fail to make any rental payments due under the Lease) which will result in a default under, or cause the termination of, the Lease with respect to the Space.  Provider shall indemnify and hold Occupant harmless from and against any and all losses, damages, liabilities, claims, penalties, interest, fees, costs and expenses, including without limitation reasonable attorneys’ fees and disbursements, which may be sustained or incurred by, or alleged against, Occupant (in each case, other than consequential, speculative or punitive damages) by reason of Provider&# 146;s breach of the covenant set forth in the immediately preceding sentence, except to the extent due to the negligence or willful misconduct of Occupant

(e)

Provider agrees to promptly send to Occupant copies of all notices of default pertaining to the Lease which Provider receives during the Occupancy Period of this Service Agreement with respect to the Space.  Provider shall have no liability or responsibility whatsoever for Landlord’s failure or refusal to perform under the Lease, except to the extent such failure or refusal to perform is due to the default of Provider under the Lease.  

(f)

So long as Occupant is not in default of any of its obligations hereunder beyond the expiration of any applicable notice and grace period, upon Provider’s receipt of a written notice from Occupant that the Landlord has failed to perform an obligation under the Lease, Provider may, at its sole and exclusive option (which election shall be promptly made by Provider and notice thereof given to Occupant promptly thereafter) use diligent efforts to cause Landlord to observe and perform the same, but such efforts shall be at the sole reasonable cost and expense of Occupant (as opposed to of Provider) only if the obligation is that of Landlord and not of Provider (including, without limitation, reasonable attorneys’ fees and expenses), provided, however, that Provider does not guarantee Landlord’s compliance with the Lease, nor shall Provider be required to institute proceedi ngs against Landlord to cause such performance.  Occupant shall not in any event have any rights in respect of the Space greater than Provider’s rights under the Lease with respect to the Space.  

(g)

Notwithstanding anything herein or in the Lease to the contrary, Provider shall not be responsible for any failure or refusal to perform (or the interruption of services), for any reason whatsoever (except to the extent such failure or refusal to perform (or the interruption of services) is due to the default of Provider under the Lease or is otherwise due to the negligence or willful misconduct of Provider) of the services or facilities that may be appurtenant to or supplied at the Building, by the Landlord or otherwise, including, without limitation, heat, air conditioning, water, elevator service, security and cleaning service, if any; and no failure to furnish, or interruption of, any such services or facilities shall give rise to any: (i) abatement, diminution or reduction of Occupant’s obligations under this Service Agreement (unless Provider receives a corresponding abate ment, diminution or reduction under the Lease) or (ii) liability on the part of Provider, except to the extent such failure or refusal to perform (or the interruption of services) is due to the default of Provider under the Lease or is otherwise due to the negligence or willful misconduct of Provider.

2.

No Breach Of Lease Documents.  Occupant shall not do, suffer or permit any act or thing to be done in the Space or in the Building which may constitute a breach or violation of, or a default under, the Lease with respect to the Space.  Occupant shall indemnify and hold Provider harmless from and against any and all losses, damages, liabilities, claims, penalties, interest, fees, costs and expenses, including without limitation reasonable attorneys’ fees and disbursements, which may be sustained or incurred by, or alleged against, Provider by reason of Occupant’s breach of the covenant set forth in the immediately preceding sentence, except to the extent due to the default of Provider under the Lease or otherwise due to the negligence or willful misconduct of Provider.

3.

Maintenance and Repair.  Occupant shall take good care of the Space and shall assume the responsibility for interior repairs to the Space which may be necessary during the Occupancy Period of this Service Agreement, excepting only those repairs, if any, which (i) Landlord may be obligated to provide and to make under the terms and provisions of the Lease, (ii) Provider may be obligated to provide and to make under the terms and provisions of this Service Agreement, (iii) are due to the negligence or willful misconduct of Provider, (iv) consist of reasonable wear, tear or obsolescence, or (v) result from fire or other casualty.  In no event shall Occupant be required to make any extraordinary or structural repairs expect to the extent such repairs are necessitated by reason of Occupant's particular manner of use of the Space (as opposed to the use p ermitted under Section 4(a) of this Service Agreement) or the negligence or willful misconduct of Occupant.  Provider shall perform or shall use commercially reasonable efforts to cause Landlord to perform (to the extent such repair is an obligation of Landlord under the Lease) all repairs and maintenance to (i) all structural and non-structural portions of the Building, (ii) all exterior portions of the Building, (iii) any portion of the Space to the extent necessitated by Provider's negligence or willful misconduct, and (iv) all Building systems, pipes, conduits, utility lines and the like which run inside of the Space unless such systems, pipes, conduits, utility lines and the like only serve the Space and all Building systems, pipes, conduits, utility lines and the like outside of the Space.

4.

Requirements of Public Authorities and of Insurance Underwriters and Policies.  Throughout the Occupancy Period, Occupant, at Occupant’s expense, shall (a) timely obtain and thereafter keep in full force and effect all permits, authorizations and approvals of Governmental Authorities required for the use, occupancy, operation, maintenance, repair and insurability of the Space, and (b) promptly comply with and discharge of record any violations of any and all applicable present and future laws, rules, orders, ordinances, regulations, statutes, requirements, codes, resolutions and executive orders of federal, state, city, county or other Governmental Authorities now existing or hereafter created, and of any and all of their departments and bureaus, and of any applicable Fire Rating Bureau or other body exercising similar functions (collectively, “Requirements”) affecting the Space or affecting the maintenance, use or occupation of the Space; provided, however, notwithstanding anything to the contrary herein, Occupant shall have no obligation to comply with any Requirement except to the extent such Requirement relates to Occupant's particular manner of use of the Space (as opposed to the use permitted under Section 4(a) of this Service Agreement) or is due to the negligence or willful misconduct of Occupant.  Occupant also shall comply with any and all provisions and requirements of any casualty, liability or other insurance policy required to be carried by Occupant under the provisions of this Service Agreement.

5.

Occupant’s Property.

(a)

All movable partitions, business and trade fixtures, machinery and equipment, communications equipment and office equipment and other fixtures and personal property, whether or not attached to or built into the Space, which are installed in the Space by or for the account of Occupant and can be removed without structural damage to the Building, provided the same are owned or leased by Occupant, and all furniture, furnishings and other articles of movable personal property owned or leased by Occupant and located in the Space (herein collectively called “Occupant’s Property”) shall be and shall remain the property of Occupant and may be removed by Occupant at any time during the Occupancy Period; provided, that if any of Occupant’s Property is removed, Occupant shall repair or pay the cost of repairing any damage to the Space resulting from the install ation and/or removal thereof.

(b)

At or before the expiration of the Occupancy Period, or the date of any earlier termination of this Service Agreement with respect to all or part of the Space, or within 30 days after such an earlier termination date, Occupant may, at its option and at its expense, remove from the Space or the portions thereof as to which such expiration has occurred, as the case may be, all of Occupant’s Property and Occupant shall repair any damage to the Space resulting from the removal by Occupant of Occupant’s Property.

(c)

After the expiration of the Occupancy Period, or after a period of 30 days following an earlier termination date, any items of Occupant’s Property which shall remain in the Space or the portions thereof as to which such expiration has occurred, as the case may be, shall be deemed to have been abandoned, and in such case such items shall be retained by Provider as its property or removed and disposed of by Provider, without accountability, in such manner as Provider shall determine, at Occupant’s reasonable expense.  Provider shall have no obligation to Occupant with respect to any items of Occupant’s Property remaining in the Space after the Expiration Date or thirty (30) days after any earlier termination date.

6.

Assignment.  Occupant shall not assign, sell, mortgage, pledge or in any manner transfer this Service Agreement or any interest therein, or grant any concession or license or otherwise permit occupancy of all or any part of the Space by any person, without the prior written consent of Provider, in its sole discretion.  Notwithstanding the foregoing contained herein, Occupant may assign this Service Agreement in whole and in connection with the merger, consolidation, or sale of substantially all of the assets of the parent of Occupant consistent with the terms and provisions of the Asset Purchase Agreement and so long as such Person shall assume the obligations of Occupant hereunder in writing.  

7.

Late Charges.  If any payment of the Service Fee is not paid within ten (10) Business Days after its due date, Occupant shall pay a late charge on the sums so overdue equal to the Late Charge, for the period from such date to the date of actual payment, to compensate Provider for its administrative costs and expenses incurred by reason of Occupant’s failure to make prompt payment and the Late Charges shall be payable by Occupant, on demand.  No failure by Provider to insist upon the strict performance by Occupant of its obligations to pay late charges shall constitute a waiver by Provider of its right to enforce the provisions of this Section in any instance thereafter occurring.  The provisions of this Section shall not be construed in any way to extend the grace periods or notice periods provided for in Section 17 or to limit Pro vider’s remedies thereunder or under any other provision of this Service Agreement.

8.

Event of Default.  (a)

From and after the date hereof, the occurrence of each of the following events shall be an “Event of Default” hereunder:

(i)

if Occupant shall fail to make any payment of any Service Fee or any part thereof (including Occupant's Proportionate Share of Taxes, Other Charges and other services as provided in Section 3(a)(i), (ii) and (iii)), when the same shall become due and payable, and such failure shall continue unremedied for a period of 10 Business Days after notice from Provider to Occupant to cure such Default;

(ii)

if Occupant shall fail to observe or perform one or more of the other terms, conditions, covenants or agreements of this Service Agreement and such failure shall continue for a period of thirty (30) days after notice thereof by Provider to Occupant specifying such failure (unless such failure cannot be cured by payment of money and requires work to be performed, acts to be done, or conditions to be removed which cannot by their nature reasonably be performed, done or removed, as the case may be, within such thirty (30) day period, in which case no Event of Default shall be deemed to exist under this Section as long as Occupant shall have commenced curing the same within such thirty (30) day period and Occupant shall prosecute the same to completion with reasonable diligence;

(b)

If any Event of Default shall occur, then to the extent permitted by law, this Service Agreement and the Occupancy Period and all rights of Occupant under this Service Agreement shall expire and terminate on the date on which such Event of Default occurs, as if such date were the date herein definitely fixed for the expiration of the Occupancy Period.  If any Event of Default shall occur and Provider, at any time thereafter during the continuance of such Event of Default, at its option, gives written notice to Occupant stating that this Service Agreement and the Occupancy Period shall expire and terminate on the date specified in such notice, which date shall be not less than 10 days after the giving of such notice, then this Service Agreement and the Occupancy Period and all rights of Occupant under this Service Agreement shall expire and terminate on the date specified in such notice as if such date were the date herein definitely fixed for the expiration of the Occupancy Period.  Upon such termination pursuant to this Section, Occupant immediately shall quit and surrender the Space.  

1.

Remedies.  In the event Occupant defaults in the performance of any of the terms, covenants or conditions of this Service Agreement beyond all applicable notice and cure periods, Provider shall be entitled to exercise any and all of the rights and remedies to which it is entitled by law or in equity, and also any and all of the rights and remedies specifically provided for in the Lease, which are hereby incorporated herein and made part hereof with the same force and effect as if herein specifically set forth in full, and wherever in the Lease rights and remedies are given to Landlord, the same shall be deemed to refer to Provider.  Notwithstanding the foregoing, Provider hereby affirmatively waives any summary proceedings afforded to a party under New York law for the ejectment of an occupant from any real property.

2.

End of Occupancy Period; Holdover.  v) On the date upon which the Occupancy Period shall expire and come to an end, whether on expiration, surrender, by lapse of time, termination, re-entry by Landlord pursuant to Article 24 of the Lease or otherwise, Occupant, at Occupant’s sole cost and expense, shall quit and surrender the Space to Provider in the same good order and condition as Provider delivers to Occupant and otherwise as required by this Service Agreement, (i) ordinary wear, tear and obsolescence, (ii) repairs which are the responsibility of Provider hereunder, and (iii) damage by fire or other casualty excepted.  Occupant shall remove any alterations made by Occupant and may remove all of Occupant’s Property.

(f)

The parties recognize and agree that the damage to Provider resulting from any failure by Occupant to timely surrender possession of the Space as aforesaid will be substantial, will exceed the amount of the monthly installments of Service Fees theretofore payable hereunder, and will be impossible to accurately measure.  Occupant therefore agrees that if occupancy of the Space is not surrendered to Provider within twenty-four (24) hours of the Expiration Date or sooner termination of the Occupancy Period, in addition to any other rights or remedy Provider may have hereunder, at law or in equity, and in addition to all Service Fees due or accruing during any holdover period, Occupant shall pay to Provider for each month and for each portion of any month hereunder during which Occupant holds over in the Space after the Expiration Date or sooner termination of the this Service Agree ment, a sum equal to one and one-half (1.5) times the fixed monthly rent that a willing lessee would pay and a willing lessor would accept for the Space under then-current market conditions as reasonably determined by Licensor based on at least two independent assessments of licensed commercial real estate brokers for each month or portion thereof that Occupant holds over, following the Expiration Date or sooner termination of this Service Agreement.  Nothing herein contained shall be deemed to permit Occupant to retain possession of the Space after the Expiration Date or sooner termination of this Service Agreement and no acceptance by Provider of payments from Occupant after the Expiration Date or sooner termination of the Occupancy Period shall be deemed to be other than on account of the amount to be paid by Occupant in accordance with the provisions of this Section, which provisions shall survive the Expiration Date or sooner termination of this Service Agreement unless and until Licensee shall sur render the Space to Licensor and pay all amounts due and owing hereunder to Licensor.  

(g)

If Occupant shall remain in occupancy of any portion of the Space beyond the Expiration Date or earlier termination of this Service Agreement, notwithstanding the acceptance of any Service Fees paid by Occupant pursuant to the preceding provisions, Provider shall be entitled to invoke any right allowed by law or equity; provided, however, that Occupant shall not be subject to any consequential damages arising out of such holdover.

2.

Discharge of Liens; Bonds.  Occupant shall not create or cause, or permit or suffer to be created any lien, encumbrance or charge upon Occupant’s occupancy of the Space or any part thereof.

3.

Right of Inspection.

(a)

Occupant shall permit Provider and Landlord and their respective agents, representatives, consultants, lenders and contractors to enter the Space at all reasonable times on reasonable notice (except in the case of an emergency), but subject to the reasonable requirements of Occupant for the purpose of (a) inspecting the Space, (b) determining whether or not Occupant is in compliance with its obligations hereunder, (c) making any restoration which Provider or Landlord is required or permitted to perform pursuant to the terms of the Lease, (d) to exercise any of Landlord’s rights under Article 21 of the Lease and/or (e) in the case of an emergency (i.e., a condition presenting imminent danger to the health or safety of persons or to property), or during the continuation of an Event of Default, making any necessary repairs or alterations to the Space an d/or performing any work therein, whether necessitated by a Requirement or otherwise, provided that in the case of an emergency, Provider or Landlord shall make a reasonable attempt to communicate with Occupant to alert Occupant to the necessary repair and shall use commercially reasonable efforts to minimize any disruption to Occupant’s business.  After all of Provider’s transitional and clearing services (including, but not limited to, mail delivery and operational and technical support) have ended, Provider shall not enter Occupant’s trading floors until after trading hours unless there is an emergency situation.  Occupant shall have the right to have a representative of Occupant accompany Provider and/or Landlord and their respective representatives, consultants, lenders and contractors during any entry.

(b)

Provider, Landlord and Persons authorized by each shall have the right to enter and pass through the Space at any reasonable time upon reasonable notice to Occupant to show the Space to prospective purchasers and lenders, subject to the right of Occupant to have a representative present as provided in Section 21(a) hereof.

4.

Subordination; Attornment.  This Service Agreement shall be expressly subject and subordinate to (i) all of the terms, covenants and conditions contained in the Lease, except such as are irrelevant or inapplicable or otherwise addressed in this Service Agreement, and (ii) all other matters to which the Lease is subordinate.  In the event of termination of the Lease, and re-entry and dispossession of the Provider by Landlord, Landlord, may, at its option, take over all right, title and interest of Provider under this Service Agreement and Occupant shall, at Landlord’s option, attorn to Landlord, as the case may be, pursuant to the terms of this Service Agreement, except that Landlord shall not be (i) bound, liable or obligated (as appropriate) for or with respect to the matters set forth in Section 24 of the Lease, (ii) liable for a ny previous act or omission of Provider under this Service Agreement, (iii) subject to any offset which theretofore accrued to Occupant against Provider, (iv) liable for any security deposited by Occupant which has not been transferred to Landlord, (v) bound by any previous modification of this Service Agreement or by any previous prepayment of more than one month’s Service Fees, (vi) bound by any covenant to undertake or complete any construction of the premises or any portion thereof demised by this Service Agreement, and (vii) bound by any obligation to make any payment to or on behalf of the Occupant, except for services, repairs, maintenance and restoration provided for under the Service Agreement to be performed after the date of such termination, re-entry or dispossess by Landlord under the Lease and which landlords of like properties ordinarily perform at the landlord’s expense, it being expressly understood, however, that Landlord shall not be bound by any obligation to make payment to or on behalf of Occupant with respect to construction performed by or on behalf of Occupant at the Space.

5.

Damage, Destruction and Other Casualty.  Notwithstanding anything to the contrary set forth in this Service Agreement, if the Space or any portion thereof shall be damaged by fire or other casualty or be condemned or taken in any manner for a public or quasi-public use, Occupant agrees that it shall be the obligation of Provider to repair, restore and rebuild the Space pursuant to Section 8.01 of the Lease.  In the event of such casualty or condemnation, this Service Agreement shall continue in full force and effect, unless in connection therewith Landlord or Provider terminates the Lease pursuant to the provisions thereof.  Pending restoration of any damage caused by such casualty or taking, to the extent Provider, as tenant under the Lease, actually receives an abatement of rent payable pursuant to the Lease, the Service Fee payable p ursuant to this Service Agreement shall be apportioned (in proportion to the portion of the Space as is useable) during the period of any such abatement in the same proportion as the abatement provided to Provider as tenant under the Lease.  The parties agree that this Section constitutes “an express agreement to the contrary” governing any case of damage or destruction of the Space or the Building by fire or other casualty under Section 227 of the New York Real Property Law, and such law or any other law of like import providing to the contrary now or hereafter in force shall have no application.

6.

Insurance.  Occupant shall maintain, at its own expense, the following insurance throughout the term of this Service Agreement with insurance carriers rated at least A-, VII by AM Best.  All insurance will be with insurers reasonably acceptable to Provider.  Occupant will provide Provider with certificates or renewal certificates of such insurance, including confirmation that Provider will be provided at least 30 days prior written notice of cancellation or material change:

*

Workers’ Compensation insurance in such form, and in such amounts, as required by law including Employers’ Liability insurance in an amount of at least $1,000,000 per occurrence.

*

Commercial General Liability, on an occurrence form, including completed operations, contractual liability and a broad form property damage endorsement with combined single limit of not less than $5,000,000 per occurrence for bodily injury, including death, and property damage.  

*

If applicable, Commercial Automobile Liability covering all owned, non-owned and/or hired motor vehicles with a limit of at least $1,000,000 combined single limit per person/accident.  

*

All-Risk property insurance valued on replacement cost basis.  

In addition, the following entities must be added as “Additional Insureds” to the liability policies of Occupant:

300 Madison

*

The Canadian Imperial Bank of Commerce and each of its subsidiaries and affiliates, including Provider, as now exist or may hereinafter be constituted;

*

Brookfield Properties Corporation and each of its subsidiaries and affiliates, including without limitation, Brookfield Financial Properties, L.P., BFP 300 Madison II LLC, BFP 300 Madison A LLC, BFP 300 Madison B LLC, BFP 300 Madison I LLC, and BFP 300 Madison M LLC;

*

Deutsche Bank Trust Company Americas, as Indenture Trustee.

1.

Right to Cure Defaults and Damages.  If Occupant shall at any time fail to make any payment or perform any other obligation of Occupant hereunder within the applicable cure and grace period, if any, then Provider shall have the right, but not the obligation, after ten (10) days’ notice to Occupant, or without notice to Occupant in the case of any emergency, and without waiving or releasing Occupant from any obligations of Occupant hereunder, to make such payment or perform such other obligation of Occupant in such manner and to such extent as Provider shall reasonably deem necessary, and in exercising any such right, to pay any incidental costs and expenses, employ attorneys, and incur and pay reasonable attorneys’ fees and disbursements.  Occupant shall pay to Provider within thirty (30) days after demand all reasonable sums so paid by P rovider and all reasonable incidental costs and expenses of Provider in connection therewith, together with the charges and interest thereon in the amounts and at the rates set forth in Section 16 in the event such payment is paid later than thirty (30) days after demand.

2.

Brokerage.  Each party represents and warrants to the other that it has not dealt with any broker or person in connection with this Service Agreement.  The execution and delivery of this Service Agreement by each party shall be conclusive evidence that such party has relied upon the foregoing representation and warranty.  Provider shall indemnify and hold Occupant harmless from and against any and all claims for commission, fee or other compensation by any person who shall claim to be entitled to a brokerage commission pursuant to the Lease or to have dealt with Provider in connection with this Service Agreement and for any and all costs incurred by Occupant in connection with such claims, including, without limitation, reasonable attorneys’ fees and disbursements.  This provision shall survive the expiration or earlier termination o f this Service Agreement.

3.

Representations.  (a)  Provider covenants, represents and warrants as follows:

(i)

The Lease is in full force and effect, and to Provider’s knowledge, Provider is not in breach or default of any of its obligations under the Lease, nor to Provider’s knowledge is there any state of facts which, with notice and/or the passage of time would constitute a breach or default by Provider under the Lease;

(ii)

Provider has not received any notice from Landlord asserting that Provider has breached or is in default under the Lease;

(iii)

Provider has not received any notice of violation of any laws, ordinances, codes, rules, regulations or requirements (including, without limitation, from any insurer) affecting the Space or Building;

(iv)

To Provider's knowledge, Landlord is not in default of any of its obligations under the Lease and there are no disputes or litigations pending between Provider and Landlord;

(v)

Provider, subject to the receipt of written approval by Landlord, is authorized and empowered to enter into this Service Agreement, and that the signing person is fully authorized to sign this Service Agreement; and

(vi)

The same method used to calculate the square footage of the Space under the Lease was used to calculate the square footage of the Space in this Service Agreement.

(b)

Occupant covenants, represents and warrants to Provider that Occupant is authorized and empowered to enter into this Service Agreement, and that the signing person is fully authorized to sign this Service Agreement.

4.

Liability.  Notwithstanding any other provision contained in this Service Agreement to the contrary, each party shall look only to the assets of the other party for the satisfaction of any liability of the other party under this Service Agreement, it being expressly understood and agreed that any partner, member, officer, director, employee or agent of Provider or Occupant as an individual shall not be held personally liable for such obligations and neither party shall pursue satisfaction of any judgment against the other against assets of any individual partner, member, officer, director, employee or agent of such other party.

5.

Indemnity.  (a)  Occupant hereby agrees to indemnify, defend and hold harmless Provider, its subsidiaries and affiliates, and their respective partners, members, officers, directors, employees and agents from and against all claims, losses, damages, liabilities, costs and expenses arising out of, relating to or resulting from, (i) any breach by Occupant of any of the representations, warranties, covenants or agreements of Occupant under this Service Agreement and any breach or default by Occupant or any sublessees or assignees of Occupant in the compliance with those terms, covenants and conditions of the Lease to which this Service Agreement is subject and subordinate, (ii) the conduct of business in or management of the Space during the Occupancy Period or while Occupant is in possession of, or otherwise occupies all or any part of, the Space, (i ii) any work or thing whatsoever done or any condition created in or about the Space during the Occupancy Period or while Occupant is in possession of or otherwise occupies all or any part of the Space or (iv) any act or omission of Occupant or of any licensee, invitee or other occupant of, or person present at, the Space (including those of any assignee or sublessee of Occupant) or of any employee, agent or contractor of any of the foregoing during the Occupancy Period or while Occupant is in possession of, or otherwise occupies, all or any part of the Space (including, without limitation, workers’ compensation payments/benefits for officers, agents and employees of Occupant), in each case, only to the extent not due to the negligence or willful misconduct of Provider or other sublessees or assignees of Provider (other than Occupant).  Occupant shall have no liability for any indirect or consequential damages (including, but not limited to, lost revenue, loss of profits and failure to realize expe cted savings) suffered either by Provider or by any party claiming through Provider.

(a)

Provider hereby agrees to indemnify, defend and hold harmless Occupant, its partners, members, officers, directors, employees and agents from and against any and all claims, losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and disbursements) arising out of, relating to or resulting from (i) any litigation relating to any competing claims of occupancy rights to the Space, (ii) any breach by Provider of any of the representations, warranties, covenants or agreements of Provider under this Service Agreement and any actual or alleged breach of the Lease by Provider or any of its Affiliates, (iii) any failure of the Service Agreement to be valid (other than due to the fault of Occupant or its Affiliates), and (iv) any inability of Occupant or its Affiliates to occupy the Space.  Provider shall have no liability for any indirect or consequential damages (including, but not limited to, lost revenue, loss of profits and failure to realize expected savings) suffered either by Occupant or by any party claiming through Occupant.

(b)

Provider and Occupant hereby mutually agree to indemnify, defend and hold harmless the other party with respect to third party losses, except in cases where the injury or damage is a result of the negligence of the other party or the negligence or willful misconduct relating to Occupant’s actual occupancy of the Space or Occupant’s business operations.  The indemnification provisions of this Section 29(a), (b) and (c) shall survive the Expiration Date or sooner termination of this Service Agreement.

6.

Authority.  The person signing this Service Agreement on behalf of Occupant represents that he or she has full right and authority to execute this Service Agreement on behalf of Occupant, and that this Service Agreement constitutes a valid and binding obligation of Occupant enforceable against Occupant in accordance with its terms.

7.

Confidentiality.  Occupant shall treat the terms of the Lease with confidentiality and agrees not to disclose the terms thereof to any person or entity, other than (i) its legal counsel, (ii) its auditors or lenders, (iii) as required in order to enforce its rights under this Service Agreement, or (iv) as otherwise required by any Requirements. Each of Occupant and Provider shall treat the terms of this Service Agreement with confidentiality and agrees not to disclose the terms thereof to any person or entity other than in accordance with clauses (i) through (iv) above, without the consent of the other, which consent shall not be unreasonably withheld or delayed.

8.

Consents and Approvals.  Except as otherwise provided specifically herein, whenever it is provided in the Lease that the prior written consent or approval or other act of the Landlord is required for or as a condition to any act on the part of Provider, then for the purpose of this Service Agreement the prior written consent or approval or other act of Provider and Landlord shall be required for or as a condition to any corresponding act on the part of Occupant.  Provider shall cooperate with Occupant in obtaining the consent or approval of Landlord, and shall upon request of Occupant, promptly make any such request and submit any necessary information (after Provider’s receipt of such information from Occupant) for the consent or approval of Landlord.  Whenever the consent or approval of Landlord is required under the Lease, if Landlord shall withhold its consent or approval for any reason, or delay the giving of such consent or approval, Provider shall be deemed to be acting reasonably if it shall also withhold or delay its consent or approval.

9.

Notices.  All notices, consents, approvals, demands and requests which are required or desired to be given by either party to the other hereunder shall be in writing and shall be personally delivered, sent by reputable overnight courier delivery service or sent by United States registered or certified mail and deposited in a United States post office, return receipt requested and postage prepaid.  Notices, consents, approvals, demands and requests which are served upon Provider or Occupant in the manner provided herein shall be deemed to have been given or served for all purposes hereunder on the day personally delivered or refused, the next business day after sending by overnight courier as aforesaid or on the third (3^rd) business day after mailing as aforesaid.  All notices, consents, approvals, demands, and requests given to Prov ider or Occupant shall be addressed to the address set forth at the beginning of this Service Agreement (except that any notice to be delivered to Occupant hereunder after the Start Date shall be delivered to Occupant at the Space) with a copy at the same time and in the same manner, in the case of notices to Provider, to James B. Carlson, Esq., Mayer Brown LLP, 1675 Broadway, New York, New York 10019, and in the case of notices to Occupant, to Patricia Moran, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York  10036.  Either party may from time to time change the names and/or addresses to which notices, consents, approvals, demands and requests shall be addressed by a notice given in accordance with the provisions of this Section. Notices hereunder from either party may be given by such party’s attorney.  

10.

Termination of Lease.  If for any reason the term of the Lease with respect to the Space shall terminate prior to the Expiration Date, this Service Agreement shall thereupon be terminated and Provider shall not be liable to Occupant by reason thereof unless both: (a) Occupant shall not then be in default of any of its obligations under this Service Agreement beyond all applicable notice and grace periods, and (b) said termination shall have been effected because of the breach or default of Provider under the Lease.

11.

Service Agreement and Not a Lease.  This Service Agreement is not to be construed as in any way granting to Occupant any real property interest in the Space; it being intended, that this Service Agreement merely permits Occupant to enter upon and use the Space in accordance with the terms hereof and shall not be deemed to grant to Occupant a leasehold or other real property interest in the Space.

12.

No Waiver.  The failure of either party to insist in any one or more cases upon the strict performance or observance of any obligation hereunder or to exercise any right or option contained herein shall not be construed as a waiver or relinquishment for the future of any such obligation, right or option.  Provider’s receipt and acceptance of the Service Fee, or either party’s acceptance of performance of any other obligation by the other party, with or without knowledge of such other party’s breach of any provision of this Service Agreement, shall not be deemed a waiver of such breach.  No waiver by either party of any term, covenant or condition of this Service Agreement shall be deemed to have been made unless expressed in writing and signed by that party.

13.

Complete Agreement.  There are no representations or prior or contemporaneous oral or prior written agreements, arrangements or understandings, between the parties relating to the subject matter of this Service Agreement which are not fully expressed in this Service Agreement.  This Service Agreement cannot be changed or terminated other than by a written agreement executed by both parties.

14.

Successors and Assigns.  The provisions of this Service Agreement, except as herein otherwise specifically provided, shall extend to, bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  In the event of any assignment or transfer of Provider’s interest in the Lease, the transferor or assignor, as the case may be, shall be and hereby is entirely relieved and freed of all obligations under this Service Agreement arising from and after the date of any such assignment or transfer provided that the transferee or assignee, as the case may be, assumes in writing all of the obligations and liabilities of Provider hereunder.

15.

Interpretation.  Irrespective of the place of execution or performance, this Service Agreement shall be governed by and construed in accordance with the laws of the State of New York.  If any provision of this Service Agreement or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Service Agreement and the application of that provision to other persons or circumstances shall not be affected but rather shall be enforced to the extent permitted by law.  The captions, headings and titles, if any, in this Service Agreement are solely for convenience of reference and shall not affect its interpretation.  This Service Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing this Serv ice Agreement to be drafted.  Each covenant, agreement, obligation or other provision of this Service Agreement shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making same, not dependent on any other provision of this Service Agreement unless otherwise expressly provided.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the parties may require.  This Service Agreement may be executed in counterparts or with counterpart signature pages, which together shall be deemed one and the same instrument.

16.

Consent of Landlord.  Provider shall use good faith efforts to obtain the Landlord’s Consent and Occupant shall cooperate with Provider in this regard and use good faith efforts to obtain such consent.    

17.

Environmental Provisions.  Occupant covenants and agrees that:

(a)

During the Occupancy Period Occupant shall (i) not take any action which will cause the Space to fail to comply with any Environmental Laws applicable thereto, (ii) not use and shall prohibit the use of the Space for Regulated Activities (other than in connection with the customary operation and maintenance of the Space and in commercially reasonable quantities as a consumer thereof, subject to, in any event, compliance with Environmental Laws) and (iii) cause any alterations to be done in a way so as to not expose the persons working on or visiting the Space to Hazardous Substances and in connection with any such alterations shall not introduce any Hazardous Substances to the Space which are not in compliance with Environmental Laws or which present a danger to the health of persons working on or visiting the Space.

(b)

Upon reasonable prior notice, Provider, Landlord and its lender and their respective agents, representatives and employees shall have the right at all reasonable times and during normal business hours, except to the extent such access is limited by applicable law, and subject to the reasonable security requirements of Occupant, to enter upon and inspect all or any portion of the Space.  Provider, Landlord or its lender, at their sole expense (except as provided below in this Section, may retain an environmental consultant to conduct and prepare reports of such inspections, and Occupant shall be given a reasonable opportunity to review any and all reports, data and other documents or materials reviewed or prepared by the consultant, and to submit comments and suggested revisions or rebuttals to same.  The inspection rights granted to Provider, Landlord and its lender in this Section shall expressly include the right to conduct soil borings and other customary environmental tests, assessments and audits in compliance with applicable Requirements.  Occupant agrees to bear and shall pay or reimburse Provider within thirty (30) days after demand for all reasonable out-of-pocket expenses (including reasonable attorneys, fees and disbursements and administrative and similar costs of Provider, but excluding internal overhead) reasonably relating to, or incurred by Provider or Landlord in connection with the inspections, tests and reports described in this Section only in the following situations:

(i)

If solely and directly due to the actions or inaction of Occupant, (1) there exists an Environmental Violation (as hereinafter defined) or (2) a Hazardous Substance is present on, at, under, within or emanating to or from the Space, or is migrating to or from adjoining property, except under conditions permitted by applicable Environmental Laws and not prohibited by this Service Agreement; or

(ii)

If any such inspection reveals an Environmental Violation or that a Hazardous Substance is present on, to, under, within or emanating to or from the Space or is migrating to or from adjoining property, except under conditions permitted by applicable Environmental Laws and not prohibited by this Service Agreement, and any of such items revealed by such inspection arises solely and directly by reason of the negligence or willful misconduct of Occupant; or

(c)

To the extent that Occupant has actual knowledge thereof, Occupant shall promptly provide notice to Provider of:

(i)

any proceeding or investigation commenced or threatened by any Governmental Authority with respect to the presence, release or threatened release of any Hazardous Substance on, at, under, within or emanating to or from the Space;

(ii)

all claims made or any lawsuit or other legal action or proceeding brought by any Person against (A) Occupant, Provider or Landlord or the Space or any portion thereof, or (B) any other party occupying the Space or any portion thereof, in either such case relating to any loss or injury allegedly resulting from any Hazardous Substance or relating to any violation or alleged violation of Environmental Law; and

(iii)

the discovery of any occurrence or condition on the Space or on any real property adjoining or in the vicinity of the Space, which reasonably could be expected to lead to the Space or any portion thereof being in violation of any Environmental Law or subject to any restriction on ownership, occupancy, transferability or use under any Environmental Law (collectively, an “Environmental Violation”) or which might subject Provider, Landlord or Occupant to an Environmental Claim.

18.

Arbitration.  (a)  Either party may request arbitration in such cases where this Service Agreement expressly provides for the settlement of a dispute or question by arbitration, and only in any of such cases, the same shall be settled by arbitration in the Borough of Manhattan, City, County and State of New York, conducted to the extent consistent with this Section 42 in accordance with the rules then obtaining of the American Arbitration Association, or any successor body of similar function, governing commercial landlord/tenant arbitration, except that the foregoing shall not be deemed or construed to require that such arbitration actually be conducted by or before the American Arbitration Association or any successor body of similar function.  The arbitration shall be conducted before arbitrators selected as follows:  The party desiring arbitration shall appoint a disinterested person as arbitrator on its behalf and give notice thereof to the other who shall, within twenty (20) days thereafter, appoint a second disinterested person as arbitrator on its behalf and give written notice thereof to the first party.  The arbitrators thus appointed shall, within twenty (20) days after the date of the appointment of the second arbitrator, appoint a third disinterested person, who shall be a person licensed by the State of New York (if such license is required by law) or otherwise qualified and having the necessary expertise, including at least ten (10) year’s experience, in the matter or discipline which is the primary subject or is primarily involved in such arbitration.  If the arbitrators thus appointed shall fail to appoint such third disinterested person with said twenty (20) day period, then either party may, by State of New York for the First Judicial Department, which application shall be made within fifteen (15) day s after the end of said twenty (20) day period, seek to appoint such third disinterested person, such appointment being made not later than thirty (30) days after the date of said application.  Upon such appointment, such person shall be the third arbitrator as if appointed by the original two arbitrators.  The decision of the majority of the arbitrators shall be final, non-appealable, conclusive and binding on all parties and judgment upon the award may be entered in any court having jurisdiction.  If a party who shall have the right pursuant to the foregoing, to appoint an arbitrator, fails or neglects to do so, then and in such event the other party shall select the arbitrator not so selected by the first party, and upon such selections, such arbitrator shall be shared equally by Provider and Occupant, unless this Service Agreement expressly provides otherwise, but each party shall pay and be separately responsible for its own counsel and witness fees and disbursements, unless this Service Agreement expressly provides otherwise.  Provider and Occupant agree to sign all documents and to do all other things reasonably necessary to submit any such matter to arbitration and further agree to, and hereby do, waive any and all rights they or either of them may at any time have to revoke their agreement hereunder to submit to arbitration and to abide by the decision rendered thereunder and agree that a judgment or order may be entered in any court of competent jurisdiction based on an arbitration award (including the granting of injunctive relief).

(b)

The arbitrators shall be disinterested persons having at least ten (10) years’ experience in the County of New York in a calling connected with the dispute, and shall have the right to retain and consult experts and competent authorities skilled in the matters under arbitration, but any such consultation shall be made in the presence of both parties, with full right on their part to cross-examine such experts and authorities.  The arbitrators shall render their decision and award upon the concurrence of at least two (2) of their number, not later than thirty (30) days after appointment of the third arbitrator.  Their decision and award shall be in writing and counterpart copies thereof shall be delivered to each of the parties.  In rendering their decision and award, the arbitrators shall have no power to modify or in any manner alter or reform any of the provisio ns of this Service Agreement, and the jurisdiction of the arbitrators is limited accordingly.

19.

Release.  Occupant hereby releases Provider and each of its subsidiaries and affiliates and agrees to obtain a waiver of its insurer’s right of subrogation against Provider, with respect to any claim (including a claim for negligence) which it might otherwise have against Provider and each of its subsidiaries and affiliates for loss (including insurance deductibles and retentions), damage or destruction with respect to its property, whether owned or leased, occurring during the term of this Service Agreement.

 [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Service Agreement as of the day and year first above written.

CIBC DELAWARE HOLDINGS INC.,
a Delaware corporation

By:__________________________

Name:

Title:

OPPENHEIMER & CO. INC., a New York corporation

By:__________________________

Name:

Title:

EXHIBIT A

Floor Plan

(see attached)

EXHIBIT B

Floor Plan of Data Center


(see attached)

EX-4

EXECUTION COPY

EXHIBIT 4.7

REGISTRATION RIGHTS AGREEMENT

between

OPPENHEIMER HOLDINGS INC.

and

CANADIAN IMPERIAL BANK OF COMMERCE

Dated as of January 14, 2008

TABLE OF CONTENTS

Page

Section 1. Definitions.

Section 2. Demand Registration

Section 3. Piggyback Registration

Section 4. "Market Stand-Off" Agreement

Section 5. Expenses

Section 6. Procedure

Section 7. Indemnification

Section 8. Underwriting Agreement

Section 9. Information by Holders

Section 10. Exchange Act Compliance

Section 11. No Conflict of Rights

Section 12. Termination

Section 13. Transfer of Registration Rights

Section 14. Miscellaneous

i

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of January 14, 2008, between Oppenheimer Holdings Inc., a Canadian corporation (the "Company"), and Canadian Imperial Bank of Commerce, a bank under the laws of Canada (the "Investor").

RECITALS

WHEREAS, pursuant to the Asset Purchase Agreement, (as defined below) the Company (i) has issued to the Investor a Warrant, dated as of the date hereof, to acquire 1,000,000 Class A Shares (as defined below) for an exercise price of $48.63 per share, subject to adjustment (the "Warrant"), and (ii) may pay a portion of the Deferred Purchase Price Payment (as defined in the Asset Purchase Agreement) in Class A Shares (the "Share Payment Option"); and

WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the Asset Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained in this Agreement, the Company and the Investor, intending to be legally bound hereby, agree as follows:

Section 1.

Definitions.

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

"Agreement" shall have the meaning ascribed to such term in the preamble hereto.

"Asset Purchase Agreement" means the Amended and Restated Asset Purchase Agreement, dated as of January 14, 2008, by and among the Company, the Investor and certain of their Affiliates.

"Business Day" means any day except a Saturday, Sunday or other day on which the NYSE is not open for the transaction of business.

"Class A Shares" shall mean the Class A non-voting shares of the Company.

"Commissions" means (i) the securities commissions or other securities authorities in each of the provinces and territories of Canada and (ii) the SEC.

"Company" shall have the meaning ascribed to such term in the preamble hereto.

"Demand Registration" shall have the meaning ascribed to such term in Section 2(a) hereof.

"Demand Securities" shall have the meaning ascribed to such term in Section 2(a) hereof.

"Effective Date" means, (i) with respect to a Registration of securities in one or more provinces and territories of Canada, the date that the applicable Commissions issue a receipt for the final prospectus in respect thereof or, (ii) with respect to a Registration of securities in the United States, the date that the Registration Statement in respect thereof becomes effective.

"Exchange Act" means the United States Securities Exchange Act of 1934, as amended.

"Filing Date" means, (i) with respect to a Registration of securities in one or more provinces and territories of Canada, the date a preliminary prospectus is filed with the applicable Commissions or, (ii) with respect to a Registration of securities in the United States, the date a registration statement is filed with the SEC.

"Holder" shall mean any holder of record of Registrable Securities.

"Information" shall have the meaning ascribed to such term in Section 6(a)(viii) hereof.

"Inspectors" shall have the meaning ascribed to such term in Section 6(a)(viii) hereof.

"Investor" shall have the meaning ascribed to such term in the preamble hereto.

"Lock-Up Period" shall have the meaning ascribed to such term in Section 4 hereof.

"Losses" shall have the meaning ascribed to such term in Section 7(a) hereof.

"NYSE" shall mean the New York Stock Exchange.

"Other Shares" shall mean the shares of capital stock of the Company that are not Registrable Securities.

"Permitted Transferee" shall mean any subsidiary of the Investor in which the Investor owns, directly or indirectly, 80% of the outstanding securities entitled to vote for the election of the directors.

"Person" means any individual, sole proprietorship, limited liability company, joint venture, corporation, partnership, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"Piggyback Registration" shall have the meaning ascribed to such term in Section 3(a) hereof.

"Records" shall have the meaning ascribed to such term in Section 6(a)(viii) hereof.

"Register" and "Registration" shall mean the act of qualifying securities for distribution in the provinces and territories of Canada and the United States of America (or any of them) by filing with the applicable Commissions a Registration Statement relating to the proposed distribution and such other documents as may be necessary or appropriate in connection therewith.

"Registrable Securities" shall mean (i) the Class A Shares issued or issuable to the Investor or any Permitted Transferee thereof upon the exercise of the Warrant, (ii) the Class A Shares issued to the Investor or any Permitted Transferee thereof pursuant to the Share Payment Option, if any, and (iii) any Class A Shares or other securities of the Company issued in connection with a stock split, stock dividend, recapitalization or similar event relating to clauses (i) and (ii) above; except, in each case, for Class A Shares (i) the sale of which is covered by a Registration Statement that has been declared effective under the Securities Acts or (ii) which shall have been transferred pursuant to Rule 144 or (iii) which are eligible to be resold pursuant to Rule 144(k).

"Registration Statement" means, (i) with respect to a Registration of securities in one or more provinces and territories of Canada, a preliminary prospectus, final prospectus or similar document, as appropriate, prepared in accordance with the applicable Securities Acts or, (ii) with respect to a Registration of securities in the United States, a registration statement prepared in accordance with the U.S. Securities Act.

"Registration Rights" shall mean the rights of an Investor to request a Registration pursuant to the terms of this Agreement.

"Requesting Holders" shall have the meaning ascribed to such term in Section 2(a) hereof.

"Rule 144" shall mean Rule 144 promulgated under the U.S. Securities Act or any successor rule thereto or any complementary rule thereto.

"SEC" means the United States Securities and Exchange Commission.

"Securities Acts" means the securities legislation of each of the provinces and territories of Canada, the U.S. Securities Act, the Exchange Act and all regulations, policy statements, orders, rulings, communiques and interpretation notes issued thereunder or in relation thereto or promulgated by the NYSE or other relevant securities exchange, as the same may hereafter be amended or replaced from time to time.

"Selling Holder" shall mean, with respect to any Registration Statement which Registers the offer and sale of Registrable Securities pursuant to this Agreement, each holder of Registrable Securities covered by such Registration Statement.

"Selling Holders' Counsel" shall mean counsel selected by Selling Holders that hold a majority of the Registrable Securities covered by a Registration Statement.

"Share Payment Option" has the meaning ascribed to such term in the Recitals.

"underwritten registration" or "underwritten offering" shall mean a Registration in which securities of the Company are sold to or through one or more underwriters for reoffering or sale to the public.

"U.S. Securities Act" shall mean the United State Securities Act of 1933, as amended.

"Warrant" shall have the meaning ascribed to such term in the recitals.

Section 2.

Demand Registration

.

(a)

Subject to Section 4 and subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of this Section 2(a) and at any time beginning at the earlier of (x) the exercise of the Warrant or (y) the delivery of Class A Shares pursuant to the Share Payment Option, holders of record of at least a majority of the total number of outstanding Registrable Securities (the "Requesting Holders") shall have the right to request that the Company effect a Registration under the Securities Acts with respect to all or a portion of the Registrable Securities held by such Requesting Holders by delivering a written notice executed by each Requesting Holder to the principal business office of the Company in accordance with this Section 2 (a "Demand Registration").  The request shall identify each such Requesting Holder, specify the number of Registrable Securities each Requ esting Holder proposes to be included in such Demand Registration, the intended method of distribution and the jurisdictions where Registration is to be effected, provided that the Company shall not be required to effect a Registration in any jurisdiction where it has not previously made a Registration of Class A Shares.  The Company shall (x) promptly give notice of such request for a Demand Registration to each holder of record of Registrable Securities that is not a Requesting Holder and (y) use its commercially reasonable efforts to effect a Demand Registration on an appropriate form under the appropriate Securities Acts for the Registrable Securities which the Company has been so requested to Register by the Requesting Holders, and by each other holder of record of Registrable Securities that shall have made a written request to the Company for inclusion in the Demand Registration within 30 Business Days after the giving of such written notice by the Company, which request shall specify the number and intended method of disposition (including the relevant jurisdictions of sale) of Registrable Securities (collectively, the "Demand Securities"); provided, however, that the Company shall not be obligated to effect any Demand Registration except in accordance with the following provisions:

(i)

the Company shall not be obligated to file more than two Registration Statements in total pursuant to this Section 2, subject to paragraph (d) below;

(ii)

the Company shall not be obligated to file any Registration Statement pursuant to this Section 2 unless the request from the applicable holder(s) for such Registration cover Registrable Securities whose aggregate net proceeds of the Registrable Securities proposed to be sold is not less than $10,000,000;

(iii)

the Company shall (A) not be obligated to file any Registration Statement during any period in which any other Registration Statement (other than on Form S-4 or Form S-8 promulgated under the U.S. Securities Act or any successor forms thereto) pursuant to which Registrable Securities are to be or were sold has been filed and not withdrawn or has been declared effective within the prior 30 days and (B) promptly give written notice to the Requesting Holders of a delay in filing a Registration Statement to effect a Demand Registration pursuant to clause (A) of this Section 2(a)(iii);

(iv)

the Company shall not be obligated to file any Registration Statement if the Company has determined in good faith that such filing of a Registration Statement would require the disclosure of material information that the Company has a reasonable justification for keeping confidential, such filing to be delayed until the date which is not more than 60 days after such request for Registration pursuant to this Section 2(a), provided, that the Company may only so delay the filing or effectiveness of a Registration Statement pursuant to this Section 2(a)(iv) on one occasion during any twelve-month period;

(v)

the Company shall not be required to file any Registration Statement if the written request therefor is not received by the Company prior to the tenth anniversary of the Closing Date; and

(vi)

the Company may, on its own behalf and on the behalf of its security holders, include Other Shares in such Demand Registration.  If such Demand Registration is an underwritten offering and the managing underwriter advises the Company that the inclusion of all Demand Securities and all Other Shares, if any, proposed to be included in such Demand Registration would interfere with the successful marketing (including pricing) of all such securities, then the Company shall include in such Demand Registration, to the extent of the number which the Company is so advised can be sold in such offering:

(A)

first, Demand Securities; and

(B)

second, all Other Shares the Company proposes to sell or other holders propose to sell pursuant to their contractual or incidental piggyback rights, subject to the priority structure set forth in the applicable agreements establishing such rights.

(b)

The Requesting Holders may, in the notice delivered pursuant to paragraph 2(a) above, elect that such Demand Registration be an underwritten offering.  Upon such election by the Requesting Holders (or, in the event the Requesting Holders do not so elect, if the Company elects an underwritten offering), the Company shall have the right to select the managing underwriter(s) subject to the consent of the Requesting Holders (which consent shall not be unreasonably withheld) and, in such case, the Company shall not be required to include the Registrable Securities of a Selling Holder in the underwritten offering unless such Selling Holder (and, if requested by the Company, the applicable beneficial holder if different than the Selling Holder) accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company.

(c)

A request for a Demand Registration may be withdrawn by written notice to the Company by the holders of a majority of the Registrable Securities to be included in such Registration with the following consequences:

(i)

if such request for a Demand Registration is withdrawn prior to the filing date of the Registration Statement, such withdrawn Registration shall count as a Demand Registration for purposes of Section 2(a) unless the participating holders have promptly reimbursed the Company for any and all reasonable and documented out-of-pocket fees and expenses incurred by the Company in connection with the preparation of such Registration Statement for filing; or

(ii)

if such request for a Demand Registration is withdrawn after the Filing Date of the Registration Statement but prior to its Effective Date, subject to Section 2(d), such withdrawn Demand Registration shall count as a Demand Registration for purposes of Section 2(a).

(d)

Except as provided in Section 2(c), any Demand Registration pursuant to Section 2(a) shall not count as a Demand Registration for purposes of Section 2(a) unless it has become effective, provided that:

(i)

a Registration Statement which does not become effective after it has been filed by the Company solely by reason of the refusal to proceed by a Selling Holder shall be deemed to have been effected by the Company at the request of such Selling Holders; or

(ii)

if after such Registration Statement has become effective it is interfered with by any stop order, injunction or other order or requirement of any of the Commissions for any reason other than a misrepresentation or an omission by a Selling Holder and, as a result thereof, the Demand Securities cannot be completely distributed in accordance with the plan of distribution set forth in the related Registration Statement, such Registration Statement shall not be deemed to have been effected and shall not count as a Demand Registration for purposes of Section 2(a).

Any Registration requested pursuant to Section 3 shall be deemed not to have been requested pursuant to Section 2(a).

Section 3.

Piggyback Registration

.

(a)

If at any time beginning at the earlier of (x) the exercise of the Warrant or (y) the delivery of Class A Shares pursuant to the Share Payment Option, the Company proposes for any reason to Register Other Shares under any of the Securities Acts (other than on Form S-4 or Form S-8 promulgated under the U.S. Securities Act or any successor forms thereto), it shall promptly give written notice to the record holders of Registrable Securities of its intention to do so and, upon the written request, given within 10 Business Days after delivery of any such notice by the Company, of any holders of Registrable Securities to include in such Registration Registrable Securities held by such holders (which request shall specify the number of Registrable Securities proposed to be included in such Registration) (a "Piggyback Registration"), the Company shall use its commerciall y reasonable efforts to cause all such Registrable Securities to be included in such Piggyback Registration on the same terms and conditions as the Other Shares (or similar type as the Registrable Securities) otherwise being sold in such Piggyback Registration; provided, however, that if the Company is advised by the managing underwriters in writing that the inclusion of all Registrable Securities and Other Shares proposed to be included in such Piggyback Registration would interfere with the successful marketing (including pricing) of the Other Shares proposed to be Registered by the Company, then the Company shall include in such Piggyback Registration, to the extent of the number which the Company is so advised can be sold in such offering:

(i)

first, the Other Shares to be sold or issued and sold by the Company;

(ii)

second, Registrable Securities, pro rata among the respective holders of Registrable Securities sought to be included in the Registration on the basis of the number of such shares requested to be included in the offering by each Selling Holder; and

(iii)

third, Other Shares (not included in clause (i) above) having contractual or incidental piggyback rights, subject to the priority structure among such shares set forth in the applicable agreements establishing such rights.

(b)

In connection with any offering under this Section 3 involving an underwriting, the Company shall not be required to include the Registrable Securities of a Selling Holder in any Registration Statement for any such Piggyback Registration unless such Selling Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company.

(c)

The Company shall have the absolute right to withdraw or abandon or cease to prepare or determine not to file any Registration Statement for any Piggyback Registration at any time prior to the effective date thereof without any obligation or liability.

Section 4.

"Market Stand-Off" Agreement

.  If requested by the Company and an underwriter of any capital stock or other securities of the Company, a Holder shall not sell or otherwise transfer or dispose of any Registrable Securities or any other shares of capital stock of the Company held by such Holder (other than those included in the Registration) during the 180-day period following the pricing of an underwritten offering of the Company, or for such shorter period as is requested by the Company and such underwriter (the "Lock-Up Period"); provided that each officer, director and holder of 5% or more of the equity securities of the Company also agrees to such restrictions and remains bound.  The obligations described in this Section 4 shall not apply to a Registration relating solely to employee benefit plans on Form S-8 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions with respect to the Class A Shares (or other securities) subject to the foregoing restriction until the end of such Lock-Up Period.

Section 5.

Expenses

.  The Company shall bear the expense of any Registrations effected pursuant to Sections 2 and 3, including, all Registration and filing fees (including all expenses incident to filing with the NYSE or any other securities exchange where the Registrable Securities are listed or accepted for trading), fees and expenses of complying with securities and blue sky laws, printing expenses, fees and expenses of the Company's counsel and accountants and the fees and expenses of the Selling Holders' Counsel, if there be one, of up to $70,000 for all such Registrations in the aggregate, but excluding any underwriters' or brokers' discounts or commissions, transfer taxes and the fees of any counsel, accountants or advisors to any Selling Holder, other than up to $70,000 of fees and expenses of the Selling Holders' Counsel in the aggregate for all such Registrations; provided that, w ith respect to any Registration effected in Canada, the Selling Holders shall bear their proportionate share of the costs of issue to the extent required by the applicable Commissions.

Section 6.

Procedure

.  

(a)

If and whenever the Company is under an obligation pursuant to the provisions of this Agreement to effect the Registration of any Registrable Securities, the Company shall, in accordance with the intended method of distribution thereof and the requirements of the jurisdictions in which the Registration is to be effected, use its commercially reasonable efforts to:

(i)

with respect to a Registration under Sections 2 and 3, cause a Registration Statement that proposes to Register such Registrable Securities to become and remain effective for a period of 90 days or until all of such Registrable Securities have been disposed of in accordance with the intended method of distribution (if earlier);

(ii)

furnish, as appropriate, a Registration Statement that proposes to Register such Registrable Securities, a prospectus relating thereto and any amendments or supplements relating to such Registration Statement or prospectus, to each Selling Holder and to the Selling Holders' Counsel, if there be one, copies of all such documents proposed to be filed;

(iii)

prepare and file with the applicable Commissions such amendments and supplements to such Registration Statement and the prospectus related thereto, if any, as may be necessary to keep such Registration Statement effective for at least the period set forth in Section 6(a)(i) and to comply with the provisions of the Securities Acts with respect to the sale or other disposition of such Registrable Securities;

(iv)

notify any counsel to any Selling Holder and the Selling Holders' Counsel, if there be one, promptly (w) of the receipt by Company of any notification with respect to any comments by any Commission with respect to such Registration Statement or prospectus or any amendment or supplement thereto or any request by any Commission for the amending or supplementing thereof or for additional information with respect thereto, (x) of the receipt by the Company of any notification with respect to the issuance by any Commission of any stop order suspending the effectiveness of such Registration Statement or prospectus or any amendment or supplement thereto or the initiation or threatening of any proceeding for that purpose, which the Company shall use its best efforts to prevent any such stop order or delay, (y) of the effective date of any such Registrat ion Statement or post-effective amendment and (z) of the receipt by the Company of any notification with respect to the suspension of the qualification of such Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes;

(v)

register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions in the United States as any Selling Holder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Selling Holder; provided, however, that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction, subject itself to taxation or take any action that would subject it to consent to general or unlimited service of process in any jurisdiction not then so subject;

(vi)

furnish to each Selling Holder such number of copies of a summary prospectus or other prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Acts, in order to facilitate the public sale or other disposition of such Registrable Securities;

(vii)

notify on a timely basis each Selling Holder at any time when a prospectus relating to such Registrable Securities is required to be delivered under the Securities Acts within the period set forth in Section 6(a)(i), of the happening of any event as a result of which the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing and, at the request of such Selling Holder, prepare and furnish to such Selling Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the offerees of such shares, such prospectus shall not include an untru e statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(viii)

make available for inspection by any counsel to any Selling Holder and the Selling Holders' Counsel, if there be one, or any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such underwriter (collectively, the "Inspectors"), all relevant financial records, corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement (together with the Records, the "Information").  Any of the Information which the Company determ ines to be confidential, and of which determination the Inspectors are so notified, shall not be disclosed by the Inspectors to a third party unless (x) the release of such Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or (y) such Information has been made generally available to the public.  The Selling Holder agrees that it will, upon learning that disclosure of such Information is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Information deemed confidential;

(ix)

if the offering is to be underwritten, enter into any necessary agreement in connection therewith (including an underwriting agreement containing customary representations, warranties, agreements and indemnifications);

(x)

in the case of an underwritten offering, obtain from its auditors "comfort" letters in customary form and at customary times and covering matters of the type customarily covered by comfort letters;

(xi)

in the case of an underwritten offering in the United States, obtain a certificate of counsel for the Company to the effect that the Registration Statement including Registrable Securities was declared effective under the U.S. Securities Act at a specific time and on a specific date and that such counsel has been orally advised by the SEC that no stop order suspending the effectiveness of such Registration has been issued and, to the knowledge of such counsel, no proceedings for that purpose have been instituted or are pending or threatened by the SEC;

(xii)

provide a transfer agent and registrar (which may be the same entity and which may not be the Company) for such Registrable Securities;

(xiii)

issue to any underwriter to which any Selling Holder may sell shares in such offering certificates evidencing such Registrable Securities without restrictive legends;

(xiv)

list such Registrable Securities on the NYSE or any securities exchange on which any Class A Shares are listed if such Registrable Securities are not already so listed and if such listing is then permitted under the rules of such exchange, or qualify such Registrable Securities for inclusion in the National Association of Securities Dealers Automated Quotation System; and

(xv)

provide a CUSIP number.

(b)

Each Selling Holder shall, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6(a)(vii), forthwith discontinue disposition of the Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Selling Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 6(a)(vii), and, if so directed by the Company, such Selling Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Selling Holder's possession, of the prospectus covering such Registrable Securities at the time of receipt of such notice.

Section 7.

Indemnification

.  

(a)

To the extent permitted by law, in connection with any Registration of any Registrable Securities under the Securities Acts pursuant to this Agreement, the Company shall indemnify and hold harmless each Selling Holder, its officers and directors, each underwriter and each other Person, if any, who controls, is controlled by or under common control with any of the foregoing within the meaning of the Securities Acts against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which any such indemnified party under this Section 7(a) may become subject under the Securities Acts or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) ("Losses") arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statem ent under which such Registrable Securities were Registered under the Securities Acts, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commissions, any amendment or supplement thereto or any document incident to Registration or qualification of any Registrable Securities or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such indemnified party for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any Losses; provided, however, that the Company shall not be liable in any such case to the extent that any Losses arise out of or are based upon (i) a breach of Section 6(b) by a Selling Holder or (ii) an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, amendment, supplement or document incidental to Registration or qualification of any Registrable Securities in reliance upon and in conformity with written information furnished to the Company by such Selling Holder or underwriter specifically for use in connection with the preparation of such Registration Statement, preliminary prospectus, final prospectus, amendment, supplement or document; provided, further, that with respect to any preliminary prospectus, the foregoing indemnity shall not inure to the benefit of (i) any underwriter or, in the case of a Registration Statement filed with respect to an offering which is not an underwritten offering, any Selling Holder, from whom the Person asserting any Losses purchased Registrable Securities or (ii) any Person controlling such underwriter or Selling Holder, if (A) a copy of the prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was required by law to have been delivered by such underwr iter or Selling Holder (as applicable), (B) the prospectus had not been sent or given by or on behalf of such underwriter or Selling Holder (as applicable) to such Person with or prior to a written confirmation of the sale of the Registrable Securities to such Person, (C) the prospectus (as so amended and supplemented) would have cured the defect giving rise to the Losses and (D) such failure to deliver the prospectus (as so amended and supplemented) was not the result of noncompliance by the Company with Section 6(a)(vi).

(b)

To the extent permitted by law, in connection with any Registration of Registrable Securities under the Securities Acts pursuant to this Agreement, each Selling Holder shall indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 7(a)) the Company, its officers and directors, each underwriter, each other Selling Holder, and each other Person, if any, who controls, is controlled by or under common control with any of the foregoing within the meaning of the Securities Acts with respect to (i) any breach by such Selling Holder of Section 6(b) or (ii) any statement or omission from such Registration Statement, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commissions, any amendment or supplement thereto or any document incident to Registration of any Registrable Securities, if such statement or omis sion was made in reliance upon and in conformity with written information furnished to the Company or such underwriter by such Selling Holder specifically for use in connection with the preparation of such Registration Statement, preliminary prospectus, final prospectus, amendment, supplement or document; provided, however, that the obligation to indemnify will be several, not joint and several, among such Selling Holders.  Notwithstanding the foregoing, in no event shall the amount contributed by a Selling Holder exceed the aggregate net offering proceeds received by such Selling Holder from the sale of its Registrable Securities.

(c)

Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action involving a claim referred to in the preceding paragraphs of this Section 7, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action (it being understood that no delay in delivering or failure to deliver such notice shall relieve the indemnifying party from any liability or obligation hereunder unless (and then solely to the extent that) the indemnifying party is materially and adversely prejudiced by such delay and/or failure).  In case any such action is brought against an indemnified party under this Section 7, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof; provided, however, that if any indemnified party under this Section 7 shall have reasonably concluded that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 7, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party and such indemnifying party shall reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity agreement provided in this Section 7.

(d)

The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party under this Section 7 or any officer, director or controlling Person of such indemnified party and will survive the transfer of securities.

(e)

If the indemnification provided for in this Section 7 is finally held by a court of competent jurisdiction to be unavailable to an indemnified party under this Section 7 with respect to any Losses then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or a lleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Selling Holders agree that it would not be just and equitable if contributions pursuant to this Section 7(e) were determined by pro rata allocation or by any other method of allocation which did not take into account the equitable considerations referred to herein.  The amount paid or payable to an indemnified party under this Section 7 as a result of the Losses referred to above shall be deemed to include any legal or other expenses reasonably incurred in connection with investigating or defending the same.  Notwithstanding the foregoing, in no event shall the amount contributed by a Selling Holder exceed the aggregate net offering proceeds received by such Selling Holder from the sale of its Registrable Secur ities.

Section 8.

Underwriting Agreement

.  Notwithstanding the provisions of Sections 6 and 7, to the extent that the Company and the Selling Holders shall enter into an underwriting or similar agreement, which agreement contains provisions covering one or more issues addressed in such sections, the provisions contained in such sections addressing such issue or issues shall be superseded with respect to such Registration by such other agreement.

Section 9.

Information by Holders

.  The Selling Holders shall furnish promptly to the Company such written information regarding such Selling Holder and the distribution proposed by such Selling Holder 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 Agreement.

Section 10.

Exchange Act Compliance

.  The Company shall comply with all of the reporting requirements of the Exchange Act and with all other public information reporting requirements of the SEC which are conditions to the availability of Rule 144 for the sale of the Registrable Securities.  The Company shall cooperate with the Investor in supplying such information as may be necessary for the Investor to complete and file any information reporting forms presently or hereafter required by the SEC as a condition to the availability of Rule 144.

Section 11.

No Conflict of Rights

.  The Company represents and warrants to the Investor that the Registration Rights granted to the Investor hereby do not conflict with any other Registration Rights granted by the Company and all such other rights are subordinate to the Registration Rights granted hereunder.  The Company may grant, after the date hereof, Registration Rights to holders of capital stock of the Company to the extent that such Registration Rights do not conflict with the Registration Rights granted hereby.

Section 12.

Termination

.  The Registration Rights granted pursuant to Sections 2 and 3 will terminate and be of no further force or effect on the earlier of (i) the seventh anniversary of the date hereof or (ii) the date following which none of Investor or any of its Permitted Transferees holds any Registrable Securities, except for any Demand Registration or Piggy Back Registration which has already been requested prior to such date.

Section 13.

Transfer of Registration Rights

.  The rights hereunder may be transferred or assigned in connection with any transfer of Registrable Securities by the Investor or any Permitted Transferee.  Notwithstanding the foregoing, such rights may only be transferred or assigned provided that all of the following additional conditions are satisfied: (a) such transfer or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement; and (c) the Company is given written notice of such transfer or assignment, stating the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned.  

Section 14.

Miscellaneous

(a)

Entire Agreement. This Agreement and the exhibits, schedules and other documents referred to herein which form a part hereof, contain the entire understanding of the parties hereto with respect to their subject matter.  This Agreement supersedes all prior agreements and understandings, oral and written, with respect to its subject matter.

(b)

Severability.  Should any provision of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Agreement, which other provisions shall remain in full force and effect and the application of such invalid or unenforceable provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and be enforced to the fullest extent permitted by law.

(c)

Notices.  All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, by mail (certified or registered mail, return receipt requested), by recognized overnight courier or by facsimile transmission (receipt of which is confirmed):

(i)

if to the Company, to:

Oppenheimer Holdings Inc.
125 Broad Street
New York, NY 10004
Fax:  (212) 668-8081
Attention:  Dennis McNamera, Esq.

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Attention: Patricia Moran, Esq.
Facsimile:  (212) 735-2000
Email: pmoran@skadden.com

and

Borden Ladner Gervais LLP
Scotia Plaza, Suite 4400
40 King Street West
Toronto, Ontario M5H 3Y4
CANADA
Attention:  A. Winn Oughtred, Esq.
Telephone:  (416) 367-6247
Facsimile:   (416) 361-7076
Email:  woughtred@blgcanada.com

(ii)

if to the Investor, to:

Canadian Imperial Bank of Commerce
Commerce Court West
Toronto, Ontario M5L 1A2
Canada
Fax: (917) 332-4320
Attention: Gerry McCaughey

with a copy to:

Canadian Imperial Bank of Commerce
245 Park Avenue
42^nd Floor
New York, NY 10167
Fax: (917) 332-4320
Attention: General Counsel

with a copy to:

Mayer Brown LLP
1675 Broadway
New York, NY 10019-5820
Attention:  James B. Carlson, Esq.
Telephone:  (212) 506-2515
Facsimile:   (212) 849-5515
Email:  jcarlson@mayerbrown.com

or to such other person or address as any party shall specify by notice in writing to the other party.  All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which so hand-delivered, on the third Business Day following the date on which so mailed, on the Business Day following the date on which delivered to the overnight courier service and on the date on which faxed and confirmed, except for a notice of change of address, which shall be effective only upon receipt thereof.

(d)

Successors and Assigns.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, successors and permitted assigns.  Except for a transfer of Registration Rights as contemplated in Section 13, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, directly or indirectly, by (i) the Investor without the consent of the Company, or (ii) the Company without the consent of the Investor.

(e)

Third-Party Beneficiaries.  This Agreement shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns.  Except as contemplated by Section 7 with respect to Persons entitled to indemnification under Section 7, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or Persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

(f)

Recapitalization, Etc.  In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Class A Shares by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the Class A Shares or any other change in capital structure of the Company, appropriate adjustments shall be made with respect to the relevant provisions of this Agreement so as to fairly and equitably preserve, the original rights and obligations of the parties hereto under this Agreement.

(g)

Amendments and Waivers.  This Agreement may not be modified or amended except by an instrument or instruments in writing signed by an authorized officer of each party.  Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by an authorized officer of the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

(h)

Fees and Expenses.  Except as otherwise contemplated in this Agreement, whether or not this Agreement and the transactions contemplated hereby are consummated, all costs and expenses (including legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, or in enforcement of, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.

(i)

Headings.  The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

(j)

Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

(k)

Governing Law.  THIS AGREEMENT, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS OR ANY OTHER LAW THAT WOULD MAKE THE LAWS OF ANY OTHER JURISDICTION OTHER THAN THE PROVINCE OF ONTARIO APPLICABLE HERETO.

(l)

Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(m)

Consent to Jurisdiction.  Each of the parties hereto expressly and irrevocably (a) consents to submit itself to the exclusive jurisdiction of the Ontario Superior Court of Justice in Toronto in the event any dispute arises out of or relates to this Agreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request or leave from such court, including, without limitation, a motion to dismiss on the grounds of forum non conveniens, (c) agrees that it will not bring any action arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than such court, and (d) waives any right to a trial by jury with respect to any claim, counterclaim or action arising out of or in connection with this Agreement or the transactions contemplated hereby.

(n)

Specific Performance.  The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms hereof and immediate injunctive relief, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or equity.

(o)

Subsidiaries.  The parties agree that obligations pursuant to this Agreement with respect to their respective Subsidiaries and Affiliates are limited to their rights and powers with respect to such Persons.

(p)

Counterparts.  This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(q)

Construction.  

(i)

(A) For the purposes hereof, (x) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires, (B) the words "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, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, and exhibits and schedules of this Agreement unless otherwise specified, (C) the words "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless otherwise specified, (D) the word "or" shall not be exclusive and (E) the Company and the Investor (and any other Person who becomes party hereto as permitted hereby) will be referred to herein individually as a "party" and collectively as "parties."

(ii)

The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring either party by virtue of the authorship of any provisions of this Agreement.

(iii)

Any reference to any federal, provincial, state, local statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires.

(r)

No Right of Setoff.   No party may deduct from, set off, holdback or otherwise reduce in any manner whatsoever against any amounts such party may owe to another party any amounts owed by such other party to the first party.

(s)

Currency.  All monetary amounts mentioned or referred to herein are in United States dollars unless otherwise indicated.

1

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

OPPENHEIMER HOLDINGS INC.


BY:

Name:  

Title:  

CANADIAN IMPERIAL BANK OF COMMERCE


BY:

Name:  
  Title:  

EX-10

EXECUTION COPY

EXHIBIT 10.17

E.A. VINER INTERNATIONAL CO.

FIRST AMENDMENT TO

SENIOR SECURED CREDIT AGREEMENT

This FIRST AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT, dated as of July 24, 2007 (this “Amendment”), by and among E.A. VINER INTERNATIONAL CO., a corporation formed under the laws of the State of Delaware (the “Borrower”), OPPENHEIMER HOLDINGS INC., a corporation formed under the laws of Canada (the “Parent”), VINER FINANCE INC., a corporation formed under the laws of the State of Delaware (together with the Parent, the “Guarantors”), each of the lenders party to the Existing Credit Agreement (as defined below) (the “Lenders”) and MORGAN STANLEY SENIOR FUNDING, INC., a Delaware corporation, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used herein without definition shall have the same meanings herein a s set forth in the Existing Credit Agreement.

RECITALS

WHEREAS, the parties hereto are party to the Existing Senior Secured Credit Agreement, dated as of July 31, 2006 (the “Existing Credit Agreement” and as amended by this Amendment, the “Amended Credit Agreement”);

WHEREAS, the Borrower has requested an amendment to the Existing Credit Agreement in order to increase the maximum amount of cash dividends permitted to be made by Parent on its Capital Stock;

WHEREAS, the Administrative Agent and the Required Lenders are willing to amend the Existing Credit Agreement to provide for such increase;

WHEREAS, Section 14.02 permits amendments to the Existing Credit Agreement by an amendment in writing signed by the Borrower and the Required Lenders and the undersigned Lenders constitute Required Lenders; and

WHEREAS, the Borrower, Guarantors, Administrative Agent and Required Lenders executing this Amendment desire to amend certain of the terms and provisions of the Existing Agreement as set forth below effective as of the Effective Date (as defined below);

NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.

AMENDMENTS.  The parties hereby agree to amend the Existing Credit Agreement as of the Effective Date (as defined below) as follows:  

1.1

Amendments to Section 9.17: Restricted Payments.  

Section 9.17 is hereby amended by deleting clause (d) and substituting therefor the following:

“(d)

so long as no Default or Event of Default has occurred and is continuing, (i) at the time of declaration thereof, cash dividends by Parent on any series of Capital Stock of Parent, provided that the aggregate amount of dividends does not exceed:  $2,500,000 during the last two Fiscal Quarters of Fiscal Year 2006 (taken as one period); $7,500,000 during Fiscal Year 2007; $8,000,000 during Fiscal Year 2008; $8,500,000 during Fiscal Year 2009; $9,000,000 during Fiscal Year 2010; $9,500,000 during Fiscal Year 2011; $10,000,000 during Fiscal Year 2012; and $7,500,000 during the first three Fiscal Quarters of Fiscal Year 2013 (taken as one period); and (ii) at the time of payment, cash payments by Parent to repurchase the Class A Shares of the Parent listed on the Toronto Stock Exchange, provided that the aggregate number of Class A Sha res so repurchased does not exceed: 325,000 during the last two Fiscal Quarters of Fiscal Year 2006 (taken as one period); 650,000 during any Fiscal Year beginning with Fiscal Year 2007 and ending with Fiscal Year 2012; and 487,500 during the first three Fiscal Quarters of Fiscal Year 2013 (taken as one period); and”

SECTION 2.

BORROWER’S REPRESENTATIONS AND WARRANTIES

In order to induce the Required Lenders to enter into this Amendment and to amend the Existing Credit Agreement in the manner provided herein, the Borrower represents and warrants to each Lender under the Existing Credit Agreement that the following statements are true, correct and complete:

2.1

Incorporation of Representations and Warranties from Credit Agreement.

On and as of the date hereof and the Effective Date (as defined below), the representations and warranties contained in Article VI of the Existing Credit Agreement are and will be true, correct and complete with respect to this Amendment and the Amended Credit Agreement as if this Amendment and the Amended Credit Agreement were “Loan Documents” referred to in such representations and warranties, and with the foregoing modifications such representations and warranties are incorporated herein by this reference; and the representations and warranties contained in Article VI of the Existing Credit Agreement are and will be true, correct and complete in all material respects on and as of the Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in whi ch case they were true, correct and complete in all material respects on and as of such earlier date.

2.2

Absence of Default.

On and as of the date hereof and the Effective Date (as defined below), no event has occurred and is continuing that would constitute a Default or an Event of Default under the Existing Credit Agreement.

SECTION 3.

BORROWER ACKNOWLEDGEMENT

Each of the Borrower and each Guarantor on the signature pages hereto hereby acknowledges and agrees that each Loan Document to which it is a party is in full force and effect and shall not be limited or impaired in any manner by the effectiveness of this Amendment.

SECTION 4.

MISCELLANEOUS

4.1

Reference to and Effect on the Existing Credit Agreement and the Other Loan Documents.

(a)

On and after the Effective Date (as defined below), each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof’“, “herein” or words of like import referring to the Existing Credit Agreement, and each reference in the other applicable Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Existing Credit Agreement shall mean and be a reference to the Amended Credit Agreement.

(b)

Except as specifically amended by this Amendment, the Existing Credit Agreement and the other Loan Documents relating thereto shall remain in full force and effect and are hereby ratified and confirmed.

(c)

The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or any Lender under, the Existing Credit Agreement or any of the other Loan Documents relating thereto.

4.2

Counterparts.

This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by telecopy shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telecopy or by email PDF shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

4.3

GOVERNING LAW.  

THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

4.4

Effectiveness.

This Amendment shall become effective with respect to the Existing Credit Agreement upon (a) the execution of counterparts hereof by (i) the Required Lenders, (ii) the Borrower, (iii) each Guarantor and (iv) the Administrative Agent; (b) receipt by the Administrative Agent for the benefit of each Lender that executes and delivers a counterpart of this amendment on or prior to 12:00 P.M. EDT on July 24, 2007, of a fee equal to 0.05% of the sum of such Lender’s aggregate Commitments and the aggregate principal amount of the Loans owing to such Lender and (c) receipt by Borrower and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof (the date of satisfaction of such conditions being referred to herein as the “Effective Date”).

(signature pages follow)

­NY12534:181153.6

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

BORROWER:

E.A. VINER INTERNATIONAL CO.


By:

  
  Name:
 Title:

GUARANTORS:

OPPENHEIMER HOLDINGS INC.


By:

  
  Name:
 Title:

VINER FINANCE INC.


By:

Name:
 Title:

ADMINISTRATIVE AGENT:

MORGAN STANLEY SENIOR FUNDING, INC.


By:    
  Name:
 Title:

LENDERS:

[LENDER]


By:

Name:
 Title:

-2-

­NY12534:181153.6

EX-10

EXECUTION COPY

EXHIBIT 10.18

E.A. VINER INTERNATIONAL CO.
SECOND AMENDMENT TO
SENIOR SECURED CREDIT AGREEMENT

This SECOND AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT, dated as of December 12, 2007 (this “Amendment”), by and among E.A. VINER INTERNATIONAL CO., a corporation formed under the laws of the State of Delaware (the “Borrower”), OPPENHEIMER HOLDINGS INC., a corporation formed under the laws of Canada (the “Parent”), VINER FINANCE INC., a corporation formed under the laws of the State of Delaware (“Viner Finance” and, together with the Parent, the “Guarantors”), each of the lenders party to the Existing Credit Agreement (as defined below) (the “Lenders”) and MORGAN STANLEY SENIOR FUNDING, INC., a Delaware corporation, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used herein without defin ition shall have the same meanings herein as set forth in the Existing Credit Agreement.

RECITALS

WHEREAS, the parties hereto are party to the Existing Senior Secured Credit Agreement, dated as of July 31, 2006, as amended by the First Amendment thereto, dated as of July 24, 2007 (as so amended, the “Existing Credit Agreement” and as amended by this Amendment, the “Amended Credit Agreement”);

WHEREAS, the Borrower has requested that the Lenders agree to amend to the Existing Credit Agreement in order to permit the transactions contemplated by the Asset Purchase Agreement (as defined herein) and the instruments governing the Permitted Loan Trading Platform Facility, the Permitted Subordinated Loans and the Permitted Warehouse Facility (each as defined herein) and related documentation;

WHEREAS, Required Lenders are willing to amend the Existing Credit Agreement to permit such transactions;

WHEREAS, Section 14.02 permits amendments to the Existing Credit Agreement by an amendment in writing signed by the Borrower and the Required Lenders and the undersigned Lenders constitute Required Lenders; and

WHEREAS, the Borrower, Guarantors, Administrative Agent and Required Lenders executing this Amendment desire to amend certain of the terms and provisions of the Existing Agreement as set forth below effective as of the Effective Date (as defined below);

NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.1.

Amendments. The parties hereby agree to amend the Existing Credit Agreement as of the Effective Date (as defined below) as follows:  

(a)

The following definitions are hereby added to the Agreement:

“Asset Purchase Agreement” means that certain Asset Purchase Agreement, dated as of November 2, 2007, among the Parent, Oppenheimer & Co. Inc., Canadian Imperial Bank of Commerce, CIBC World Markets Corp. and certain other affiliates of Canadian Imperial Bank of Commerce and the Parent identified therein.

“Intercreditor Agreement” means the intercreditor agreement to be entered into between Morgan Stanley & Co. Incorporated, as Collateral Agent under the Amended Credit Agreement, and the agent under the credit agreement for the Permitted Subordinated Loans.

“LoanCo” means an indirectly wholly-owned subsidiary of the Parent, newly formed to engage in the business of originating, arranging, syndicating and trading commercial loans, and related activities.

“Permitted Loan Trading Platform Facility” means such credit facilities as LoanCo may enter into, refinance, amend and replace from time to time, and which credit facilities may be secured by such assets and property of LoanCo as LoanCo may determine, for the purpose of funding the acquisition and trading of syndicated loans so long as such facilities satisfy each of the following requirements:  (i) the use of proceeds of such facilities are limited to funding the acquisition and trading of syndicated loans, (ii) the aggregate amount of the available commitments and outstanding principal amount of advances under all such facilities does not exceed $75,000,000 at any time, and (iii) any creditor, agent or other party to the facilities has recourse only to LoanCo, its assets and property for the repayment of advances or other amoun ts due, and (except to the extent otherwise permitted hereunder) not to any asset or property of any Affiliate of LoanCo.

“Permitted Subordinated Loans” means such loans as the Borrower may borrow, refinance, amend and replace from time to time for the purpose of funding the acquisition of new capital markets businesses (including the acquisition contemplated by the Asset Purchase Agreement) so long as such loans satisfy each of the following requirements:  (i) the use of proceeds is limited to funding capital and liquidity requirements and general corporate purposes of the Borrower’s U.S. Broker-Dealer Subsidiary, (ii) the aggregate outstanding amount of such loans does not exceed $100,000,000 at any time outstanding, (iii) the creditors, agents and other parties involved in such loan have recourse only to the Borrower and its Subsidiaries that are Guarantors under this Amended Credit Agreement and their respective assets and properties, (iv) such loans are subordinate in right of payment, collateral and upon liquidation to the prior payment in full of all Indebtedness owed to the Lenders under this Amended Credit Agreement on terms and conditions satisfactory to the Administrative Agent or Required Lenders and (v) no principal payments are due (whether as a result of amortization or mandatory prepayments) until at least 180 days after the Maturity Date.

“Permitted Warehouse Facility” means such facilities as LoanCo may enter into, amend and replace from time to time, and the obligations of LoanCo which may be secured by such assets and property of LoanCo as LoanCo may determine, for the purpose of obtaining underwriting commitments extended to third party borrowers and related credit support and loan administration services with respect to the revolving loans, term loans, bridge loans and letters of credit to be originated or arranged by LoanCo, so long as such facilities entered into by LoanCo satisfy each of the following requirements:  (i) such facilities are limited to obtaining underwriting commitments extended to third party borrowers and related credit support and loan administration services with respect to the revolving loans, term loans, bridge loans and letters of cre dit originated or arranged in the ordinary course of LoanCo’s business (or, if applicable, any pending loan transaction agreed by LoanCo to be subject to such a facility in connection with a closing under the Asset Purchase Agreement), (ii) the maximum aggregate amount (in each case taking into account available amounts and outstanding commitments from time to time, and the reinstatement of available amounts in accordance with the terms of the respective facilities) of such facilities entered into by LoanCo does not exceed $2,000,000,000 at any time, and (iii) any party to such facilities has recourse only to LoanCo, its assets and property for the obligations of LoanCo thereunder and (except to the extent otherwise permitted hereunder) not to any asset or property of any Affiliate of LoanCo.

(b)

The definition of “Applicable Margin” is hereby amended by deleting it in its entirety and substituting therefor the following:

“Applicable Margin” means, in the case of Alternate Base Rate Loans, 2.00% per annum, and in the case of LIBOR Rate Loans, 3.00% per annum.”

(c)

The definition of “Loan Documents” is hereby amended by deleting it in its entirety and substituting therefor the following:

““Loan Documents” means this Agreement, the Notes, the Security Documents, the Intercreditor Agreement and all other agreements, instruments, and other documents executed and delivered by any Credit Party pursuant hereto or thereto or otherwise evidencing or securing any Loan, in each case, excluding any Hedging Agreements.”

(d)

The definition of “Permitted Acquisition” is hereby amended by deleting the first paragraph thereof and clause (d) thereof and substituting therefor the following:

““Permitted Acquisition” means:  (i) an acquisition expressly contemplated by the Asset Purchase Agreement; and (ii) an acquisition by a Credit Party or any of its Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Capital Stock of, or a business line, unit, office or a division of, any Person, provided that no acquisition shall constitute a Permitted Acquisition under clause (ii) above unless it satisfies each of the following conditions:”

. . .

“(d)

(i) the aggregate amount of Permitted Acquisition Costs in connection with such acquisition, together with all other Permitted Acquisition Costs incurred since the date hereof, shall not exceed $35,000,000; and (ii) solely in the case of an acquisition after giving effect to which the Borrower or any of its Subsidiaries (including any Subsidiary being acquired) will assume or retain any liability with respect to any non-compliance with laws or regulations by the acquired business or its directors, officers or employees prior to the date of consummation of such acquisition (a “Legacy Liability Acquisition”), the aggregate amount of Permitted Acquisition Costs in connection with such Legacy Liability Acquisition, together with all other Permitted Acquisition Costs incurred since the date hereof with respect to Legacy Liabilit y Acquisitions, shall not exceed $15,000,000;”

(e)

The definition of “Permitted Encumbrances” is hereby amended by deleting clauses (k) and (l) thereof and substituting therefor the following:

“(k)

Liens securing Indebtedness described in clauses (c), (h), (r), (s), and (t) of the definition of “Permitted Indebtedness”, provided that no Lien securing refinanced Indebtedness described in clause (r) of such definition shall constitute a Permitted Encumbrance under this clause (k) to the extent it encumbers any asset or property not similarly encumbered by a Lien securing the Obligations; and

(l)

Liens not otherwise permitted hereunder to the extent attaching to properties and assets with an aggregate fair market value not in excess of, and securing liabilities not in excess of, $5,000,000, in the aggregate at any one time outstanding.”

(f)

The definition of “Permitted Indebtedness” is hereby amended by deleting clauses (c), (g), (h) thereof and substituting therefor the following:

“(c)

purchase money indebtedness and Capitalized Lease Obligations incurred after the Closing Date to acquire equipment or real property in the ordinary course of business; provided that (A) the aggregate amount of all such Indebtedness does not exceed $25,000,000 at any time outstanding, (B) the Indebtedness when incurred shall not be more than 100% of the lesser of the cost or fair market value as of the time of acquisition of the asset financed, (C) such Indebtedness is issued and any Liens securing such Indebtedness are created within 270 days after the acquisition of the asset financed and (D) no Lien securing such Indebtedness shall extend to or cover any property or asset other than the asset so financed;”

. . .

“(g)

(i) Indebtedness of a Subsidiary of the Parent acquired in a Permitted Acquisition, provided that (A) such Indebtedness is existing upon consummation of the Permitted Acquisition and was not entered into in contemplation or furtherance thereof, (B) any Liens securing such Indebtedness relate only to assets and property of such Subsidiary and (C) the aggregate amount of all such Indebtedness (and commitments to advance Indebtedness in the case of any revolving loan or similar facility) does not exceed $30,000,000 at any time outstanding and (ii) any Permitted Refinancing thereof; and

(h)

Indebtedness incurred by Broker-Dealer Subsidiaries for operational liquidity needs pursuant to uncommitted lines of credit (including, without limitation, the facilities described on Part Two of Schedule B and similar replacement facilities from time to time) in an aggregate outstanding principal amount not to exceed $1,250,000,000 at the close of business on any day;”

(g)

The definition of “Permitted Indebtedness” is hereby further amended by deleting the word “and” at the end of clause (q) and adding the following clauses (r), (s) and (t) (with the current clause (r) becoming clause (v)) as follows:

“(r)

Indebtedness under the Permitted Subordinated Loans of the Borrower and its Subsidiaries that are Guarantors under the Amended Credit Agreement;

(s)

Indebtedness of LoanCo under the Permitted Warehouse Facility;

(t)

Indebtedness of LoanCo under the Permitted Loan Trading Platform Facility;

(u)

Indebtedness of the Borrower under the Viner Debentures (as defined in the Asset Purchase Agreement); and”

(h)

Amendments to Section 7.01.  Financial Statements

Section 7.01 is hereby amended by deleting clause (a) in its entirety and substituting therefor the following:

“(a)

Monthly Reports.  Within thirty (30) days after the end of each Fiscal Month, the Borrower shall deliver to the Administrative Agent:

(i) the following information from its Financial and Operational Combined Uniform Single Report (the “FOCUS Report”) on Form X-17A-5 filed with the SEC pursuant to Rule 15c3-1 of the SEC under the Securities Exchange Act for such month: (A) Minimum Net Capital (line 3760 on the FOCUS Report), (B) Excess Net Capital (line 3910 on the FOCUS Report) and (C) Monthly Profitability (line 4211 on the FOCUS Report); and

(ii) with respect to LoanCo, (A) a summary as of the end of such month of (x) the loan commitments outstanding under the Permitted Warehouse Facility and (y) amounts outstanding under the Permitted Loan Trading Platform Facility and (B) such other information as may be reasonably requested by the Administrative Agent.”

(i)

Amendments to Section 8.10.  Additional Security; Additional Guaranties; Further Assurances.

Section 8.10 is hereby amended by deleting clause (c) in its entirety and substituting therefor the following:

“(c)

After the date hereof, each Credit Party shall (i) cause each Person that becomes a Domestic Subsidiary of such Credit Party (other than Domestic Subsidiaries described in clauses (ii), (iii), (iv) and (v) of Section 8.18(a)) promptly to guarantee the Obligations and to grant to the Collateral Agent, for the benefit of the Secured Creditors, a security interest in the real, personal and mixed property of such Subsidiary to secure the Obligations, and (ii) pledge, or cause to be pledged, to the Collateral Agent, for the benefit of the Collateral Agent and Lenders, all of the Capital Stock owned by a Credit Party of each Person that becomes a direct Domestic Subsidiary of such Credit Party (other than a Broker-Dealer Subsidiary), and 65% of the Capital Stock of each Person that becomes a Foreign Subsidiary of such Credit Party. The documentation for such guaranty, securi ty and pledge shall be in form and substance reasonably satisfactory to the Administrative Agent or the Collateral Agent and shall be substantially similar to the Loan Documents executed concurrently herewith with such modifications as are reasonably requested by the Collateral Agent.”

(j)

Amendments to Section 8.18.  Formation of Subsidiaries.

Section 8.18 is hereby amended by deleting it in its entirety and substituting therefor the following:

“(a)

The Parent shall have no Subsidiary other than the Borrower and Subsidiaries of the Borrower.  The Borrower shall have no Subsidiaries other than (i) Credit Parties (including any Persons that become Credit Parties after the date hereof pursuant to Section 8.18(b)), (ii) Wholly-Owned Domestic Subsidiaries that are (A) U.S. Broker-Dealer Subsidiaries, (B) registered investment companies under the Investment Company Act, or (C) registered investment advisors under the Investment Advisors Act or (D) prohibited by Applicable Law from becoming a Guarantor hereunder, (iii) one or more other Wholly-Owned Domestic Subsidiaries that are not Credit Parties so long as the assets of all such Wholly-Owned Domestic Subsidiaries do not exceed $2,000,000 million in aggregate book value as of the last day of any Fiscal Quarter, (iv) one or more Subsidiaries that (A) are not Wholly - -Owned Domestic Subsidiaries or (B) the Borrower has notified the Administrative Agent that such Subsidiaries are expected to become not Wholly-Owned Subsidiaries and, in each case of this clause (iv), are subject to the restrictions on Investments provided in Section 9.07 and (v) LoanCo.

(b)

At the time that any Credit Party forms any Domestic Subsidiary or acquires any Domestic Subsidiary after the Closing Date (in each case, other than a Subsidiary described in clauses (ii), (iii), (iv) and (v) of Section 8.18(a) above), such Credit Party shall promptly (i) cause such Subsidiary to execute and deliver to the Administrative Agent and the Collateral Agent a Counterpart Agreement, the Security Agreement, and such security documents, as well as appropriate financing statements, all in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent (including being sufficient to grant the Collateral Agent, on behalf of the Secured Creditors, a first priority Lien (subject to Permitted Encumbrances) in and to the assets of such newly formed or acquired Subsidiary) and (ii) provide to the Administrative Agent and the Collateral A gent all other documentation, including, at the Collateral Agent’s request, one or more opinions of counsel reasonably satisfactory to the Administrative Agent and Collateral Agent, which in the opinion of each of them is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including the grant and perfection of any Lien contemplated thereby).  Any document, agreement, or instrument executed or issued pursuant to this Section 8.18 shall be a Loan Document.”

(k)

Amendments to Section 9.04:  Asset Dispositions, Etc.

Section 9.04 is hereby amended by deleting clause (j) in its entirety and substituting therefor the following:

“(j)

sales, transfers or other dispositions of assets by any Broker-Dealer Subsidiary, any Investment Advisor Subsidiary or LoanCo in the ordinary course of business.”

(l)

 Amendments to Section 9.05:  Limitations on Dividends and Distributions and Other Payment Restrictions Affecting Subsidiaries.

Section 9.05 is hereby amended by deleting it in its entirety and substituting therefor the following:

“Limitations on Dividends and Distributions and Other Payment Restrictions Affecting Subsidiaries.  It shall not, and it shall not permit any of its Subsidiaries to, create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on its ability (i) to pay dividends or to make any other distribution on any shares of its Capital Stock, (ii) to subordinate or to pay, prepay, redeem or repurchase any Indebtedness owed to any Credit Party or Subsidiary of a Credit Party, (iii) to make loans or advances to any Credit Party or Subsidiary of a Credit Party or (iv) to transfer any of its property or assets to any Credit Party or Subsidiary of a Credit Party; provided, however, that nothing in clauses (i) through (iv) of this Section 9.05 shall prohibit or restrict:  (A) this Agreement and the other Loan Documents; (B) any applicable law, rule or regulation (including applicable currency control laws and applicable state or provincial corporate statutes restricting the payment of dividends or any other distributions in certain circumstances); (C) any restriction set forth in any document or agreement governing or securing any Existing Debt and any Permitted Refinancing thereof; (D) in the case of clause (iv) any restrictions on the subletting, assignment or transfer of any property or asset included in a lease, license, sale conveyance or similar agreement with respect to such property or asset; (E) in the case of clause (iv) any holder of a Permitted Encumbrance from restricting on customary terms the transfer of any property or assets subject to such Permitted Encumbrance; (F) any agreement or instrument in effect at the time a Person first became a Su bsidiary of the Borrower or the date such agreement or instrument is otherwise assumed by the Borrower or any of its Subsidiaries, so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower or such assumption; (G) customary provisions restricting assignment of any licensing agreement or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; (H) restrictions on the transfer of any asset pending the close of the sale of such asset; (I) customary provisions with respect to the payment of dividends or other distributions by any Subsidiary that is not a Credit Party set forth in the organizational documents for such Subsidiary so long as such provisions were not entered into in connection with any other agreement or arrangement not otherwise permitted under this Section 9.05; or (J) any restrictions in the Permitted Subordinated Loans, the Permitted Loan Trading Platform Facili ty, the Permitted Warehouse Facility, the Viner Debentures  (as defined in the Asset Purchase Agreement) or the C Israel Indebtedness (as defined in the Asset Purchase Agreement).  The Lenders and the Administrative Agent acknowledge that any payments to be made by a Broker-Dealer Subsidiary to a Credit Party shall be subject to any required prior approval from an applicable SRO, including without limitation the NYSE, and that a failure to obtain such approval shall not constitute a violation of this Section 9.05.”

(m)

Amendments to Section 9.07:  Investments.  

Section 9.07 is hereby amended by deleting clause (h) in its entirety and substituting therefor the following:

“(h)

Investments in the Borrower and its Wholly-Owned Domestic Subsidiaries (other than LoanCo);”

Section 9.07 is hereby further amended by deleting the word “and” at the end of clause (k) and deleting clause (l) in its entirety and substituting therefor the following:

“(l)

Investments by LoanCo in the ordinary course of its business;

(m)

Investments in LoanCo; provided that an additional Investment in LoanCo shall not be permitted if (i) after giving effect to such Investment, the Borrower’s aggregate outstanding Investment in LoanCo (net of any cash distributions received from LoanCo) exceeds $30,000,000, unless no Event of Default or Default shall have occurred and be continuing and the Borrower shall have delivered a certificate to that effect, signed by a Senior Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent or (ii) at the time of such Investment, the aggregate amount of cumulative net operating losses (net of the aggregate amount of any cumulative net operating profits or gains) generated by LoanCo since the Effective Date (as defined in the Second Amendment to this Agreement) exceeds $20,000,000; and

(n)

other Investments by the Borrower and its Subsidiaries not otherwise permitted by this Section 9.07; provided that, at the time the Investment is made, the aggregate amount contributed, advanced or otherwise invested pursuant hereto since the date hereof (net of any return or repayment thereof) does not exceed $25,000,000.”

Amendments to Section 9.09:  Negative Pledges.  

Section 9.09 is hereby amended by deleting it in its entirety and substituting therefor the following:

“Negative Pledges.  It shall not, and it shall not permit any of its Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, except (i) pursuant to this Agreement and the Security Documents, (ii) pursuant to any document or instrument governing Existing Debt (and any Permitted Refinancing thereof) or governing Capital Lease Obligations or purchase money debt incurred pursuant to Section 9.02 if any such restriction contained therein relates only to the asset or assets acquired in connection therewith or in connection with any Lien permitted by Section 9.01 or any Disposition permitted by Section 9.04; (iii) pursuant to the Permitted Subordinated Loans, the Permitted Loan Trad ing Platform Facility, the Permitted Warehouse Facility, the Viner Debentures (as defined in the Asset Purchase Agreement) and the C Israel Indebtedness (as defined in the Asset Purchase Agreement) as and to the extent consistent with the definitions of those instruments; (iv) prohibitions or conditions under applicable law, rule or regulation; (v) any agreement or instrument to which any Person is a party existing on the date such Person first becomes a Subsidiary of the Borrower or the date such agreement or instrument is otherwise assumed by the Borrower or any of its Subsidiaries (so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower or such assumption and such prohibitions or conditions do not affect any other Subsidiary of the Borrower (other than Subsidiaries of such Person having primary obligation for repayment of such Indebtedness)); (vi) customary provisions restricting subletting or assignment of any lea se governing any leasehold interest of the Borrower or any of its Subsidiaries; (vii) customary provisions restricting assignment of any licensing agreement or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; or (viii) restrictions on the transfer of any asset pending the close of the sale of such asset.”

(n)

Amendments to Section 9.11:  Capital Expenditures.  

Section 9.11 is hereby amended by deleting it in its entirety and substituting therefor the following:

“Capital Expenditures.  It shall not, and shall not permit any of its Subsidiaries to, make any Capital Expenditures that would cause the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries in any Fiscal Year to exceed the sum of (a) $20,000,000 plus (b) if the aggregate amount of Capital Expenditures made by the Borrower and its Subsidiaries during the immediately preceding Fiscal Year is less than $20,000,000, the difference between (x) $20,000,000 minus (y) the aggregate amount of Capital Expenditures made by the Borrower and its Subsidiaries during such immediately preceding Fiscal Year.”

(o)

Amendments to Section 10.01:  Total Leverage Ratio.  

The lead-in to Section 10.01 is hereby amended by deleting it in its entirety and substituting therefor the following:

“Total Leverage Ratio.  Total Leverage Ratio, as of each date set forth below, for the Parent and its Subsidiaries (other than LoanCo) on a consolidated basis, shall not be greater than the ratio set forth opposite such date below:”

(p)

Amendments to Section 10.03:  Fixed Charge Coverage Ratio.  

The lead-in to Section 10.03 is hereby amended by deleting it in its entirety and substituting therefor the following:

“Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio, as of any date set forth below, for the Parent and its Subsidiaries (other than LoanCo) on a consolidated basis, shall not be less than the ratio set forth opposite such date below:”

SECTION 1.2.

Borrower’s Representations and Warranties.  In order to induce the Required Lenders to enter into this Amendment and to amend the Existing Credit Agreement in the manner provided herein, the Borrower represents and warrants to each Lender under the Existing Credit Agreement that the following statements are true, correct and complete:

(a)

Incorporation of Representations and Warranties from Credit Agreement.  On and as of the date hereof and the Effective Date (as defined below), the representations and warranties contained in Article VI of the Existing Credit Agreement are and will be true, correct and complete with respect to this Amendment and the Amended Credit Agreement as if this Amendment and the Amended Credit Agreement were “Loan Documents” referred to in such representations and warranties, and with the foregoing modifications such representations and warranties are incorporated herein by this reference; and the representations and warranties contained in Article VI of the Existing Credit Agreement are and will be true, correct and complete in all material respects on and as of the Effective Date to the same extent as though made on and as of that date, except to the exte nt such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

(b)

Absence of Default.  On and as of the date hereof and the Effective Date (as defined below), no event has occurred and is continuing that would constitute a Default or an Event of Default under the Existing Credit Agreement.

SECTION 1.3.

Borrower Acknowledgement.  Each of the Borrower and each Guarantor on the signature pages hereto hereby acknowledges and agrees that each Loan Document to which it is a party is in full force and effect and shall not be limited or impaired in any manner by the effectiveness of this Amendment.

SECTION 1.4.

Miscellaneous.

(a)

Reference to and Effect on the Existing Credit Agreement and the Other Loan Documents.

(i)

On and after the Effective Date (as defined below), each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Existing Credit Agreement, and each reference in the other applicable Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Existing Credit Agreement shall mean and be a reference to the Amended Credit Agreement.

(ii)

Except as specifically amended by this Amendment, the Existing Credit Agreement and the other Loan Documents relating thereto shall remain in full force and effect and are hereby ratified and confirmed.

(iii)

The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or any Lender under, the Existing Credit Agreement or any of the other Loan Documents relating thereto.

(b)

Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by telecopy shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telecopy or by email PDF shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

(c)

GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(d)

Effectiveness.  This Amendment shall become effective on and as of the first date (the “Effective Date”) on which the following conditions precedent have been satisfied with respect to the Existing Credit Agreement: (i) the execution of counterparts hereof by (A) the Required Lenders, (B) the Borrower, (C) each Guarantor and (D) the Administrative Agent; (ii) the execution of an intercreditor agreement between the Administrative Agent and the administrative agent under the credit agreement for the Permitted Subordinated Loans, which shall be on terms satisfactory to such parties; (iii) receipt by the Administrative Agent, on or prior to December 13, 2007, for the benefit of each Lender that executes and delivers a counterpart of this amendment on or prior to 12:00 P.M. EDT on December 12, 2007, of a fee equal to 0.50% of the sum of such Lender 6;s aggregate Commitments and the aggregate principal amount of the Loans owing to such Lender as of the date of delivery of such counterpart; (iv) receipt by Borrower and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof; (v) receipt by the Administrative Agent, on the Effective Date, of a certificate signed by a Senior Officer of the Borrower, dated the Effective Date, stating that to the knowledge of such officer and on behalf of the Borrower (not in such officer’s individual capacity), (A) all of the representations and warranties of the Borrower under the Existing Credit Agreement are true and correct in all material respects on and as of the Effective Date as if made on such date and (B) no Event of Default or Default shall have occurred and be continuing or would result from the execution and delivery of this Amended Credit Agreement or the performance by any Credit Party of its obligations hereunder; (vi) confirmation that LoanCo h as become a Subsidiary of the Parent; (vii) confirmation that the Parent has caused the equity interests of LoanCo to be pledged in favor of the Collateral Agent on terms reasonably satisfactory to the Administrative Agent; (vii) consummation of the proposed acquisition in accordance with the Asset Purchase Agreement; (ix) confirmation that no waiver was made to any covenant or representation in the Asset Purchase Agreement that is materially adverse to the Lenders; (x) receipt hereunder by the Administrative Agent of an information packet containing final forms of the agreements governing the terms of the (A) Permitted Loan Trading Platform Facility, (B) Permitted Subordinated Loans and (C) Permitted Warehouse Facility; and (xi) receipt by the Administrative Agent, on or prior to the Effective Date, of counterparts of the agreements referred to in clause (x) above, duly executed and delivered by each party thereto and in full force and effect and reasonably satisfactory to the Administrative Agent.

­NY12534:186159.8

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

BORROWER:

E.A. VINER INTERNATIONAL CO.


By:

  
  Name:
 Title:

GUARANTORS:

OPPENHEIMER HOLDINGS INC.


By:

  
  Name:
 Title:

VINER FINANCE INC.


By:

Name:
 Title:

ADMINISTRATIVE AGENT:

MORGAN STANLEY SENIOR FUNDING, INC.


By:    
  Name:
 Title:

LENDERS:

[LENDER]


By:

Name:
 Title:

-2-

­NY12534:186159.8

EX-10

robertse"> 03/06/2008">

EXHIBIT 10.12

SUBORDINATED CREDIT AGREEMENT

by and among

E.A. VINER INTERNATIONAL CO.,
as Borrower,

and

the other parties hereto from time to time,

and

the LENDERS party hereto from time to time,

and

CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent

and

CIBC WORLD MARKETS CORP.,
as Lead Arranger

Dated as of January 14, 2008

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS; CERTAIN TERMS

1

SECTION 1.01.

Definitions

1

SECTION 1.02.

Terms Generally

30

SECTION 1.03.

Accounting and Other Terms

30

SECTION 1.04.

Time References

30

ARTICLE II

THE FACILITY

31

SECTION 2.01.

Loans

31

SECTION 2.02.

Use of Proceeds

32

SECTION 2.03.

Promise to Pay

32

SECTION 2.04.

Notes

32

SECTION 2.05.

Allocation of Proceeds of Collateral

33

ARTICLE III

PAYMENTS AND OTHER COMPENSATION

34

SECTION 3.01.

Voluntary Prepayments

34

SECTION 3.02.

Mandatory Prepayments

34

SECTION 3.03.

Payments

35

SECTION 3.04.

Taxes.

36

ARTICLE IV

INTEREST

39

SECTION 4.01.

Interest on the Loans and Other Obligations

39

SECTION 4.02.

Intentionally Omitted

40

SECTION 4.03.

Break Funding Payments

40

SECTION 4.04.

Change in Law; Illegality

40

ARTICLE V

CONDITIONS TO LOANS

42

SECTION 5.01.

Conditions Precedent to the Loans

42

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

45

SECTION 6.01.

Representations and Warranties

45

ARTICLE VII

REPORTING COVENANTS

51

SECTION 7.01.

Financial Statements

51

SECTION 7.02.

Other Financial Information

53

SECTION 7.03.

Defaults, Events of Default

53

SECTION 7.04.

Lawsuits

53

SECTION 7.05.

Insurance

53

SECTION 7.06.

Environmental Notices

54

SECTION 7.07.

Labor Matters

54

SECTION 7.08.

Other Information

54

ARTICLE VIII

AFFIRMATIVE COVENANTS

55

SECTION 8.01.

Compliance with Laws and Contractual Obligations

55

SECTION 8.02.

Payment of Taxes and Claims

55

SECTION 8.03.

Maintenance of Insurance

55

SECTION 8.04.

Conduct of Business and Preservation of Corporate Existence

55

SECTION 8.05.

Inspection of Property; Books and Records; Discussions

56

SECTION 8.06.

Intentionally Omitted

56

SECTION 8.07.

Maintenance of Properties

56

SECTION 8.08.

Transactions with Related Parties

57

SECTION 8.09.

Further Assurances

57

SECTION 8.10.

Additional Security; Additional Guaranties; Further Assurances

57

SECTION 8.11.

Powers; Conduct of Business

59

SECTION 8.12.

Use of Proceeds

59

SECTION 8.13.

Obtaining of Permits, Etc

59

SECTION 8.14.

Environmental

59

SECTION 8.15.

Fiscal Year

60

SECTION 8.16.

Payment of Contractual Obligations

60

SECTION 8.17.

[Intentionally Omitted]

60

SECTION 8.18.

Formation of Subsidiaries

60

SECTION 8.19.

Cash Management

61

ARTICLE IX

NEGATIVE COVENANTS

61

SECTION 9.01.

Liens

61

SECTION 9.02.

Indebtedness

61

SECTION 9.03.

Consolidation, Merger, Subsidiaries, Etc

61

SECTION 9.04.

Asset Dispositions, Etc

62

SECTION 9.05.

Limitations on Dividends and Distributions and Other Payment Restrictions Affecting Subsidiaries  63

SECTION 9.06.

Limitation on Issuance of Capital Stock

63

SECTION 9.07.

Investments

64

SECTION 9.08.

Sale and Leaseback

65

SECTION 9.09.

Negative Pledges

65

SECTION 9.10.

Change in Nature of Business

66

SECTION 9.11.

Capital Expenditures

66

SECTION 9.12.

Modifications of Organizational Documents and Certain Other Agreements

66

SECTION 9.13.

Federal Reserve Regulations

66

SECTION 9.14.

Investment Company Act of 1940

66

SECTION 9.15.

Securities Accounts

67

SECTION 9.16.

Impairment of Security Interests

67

SECTION 9.17.

Restricted Payments

67

ARTICLE X

FINANCIAL COVENANTS

68

SECTION 10.01.

Total Leverage Ratio

68

SECTION 10.02.

Regulatory Net Capital

69

SECTION 10.03.

Fixed Charge Coverage Ratio

69

ARTICLE XI

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

70

SECTION 11.01.

Events of Default

70

SECTION 11.02.

Remedies

72

SECTION 11.03.

Waivers by the Credit Parties

73

ARTICLE XII

GUARANTY OF OBLIGATIONS OF BORROWER

73

SECTION 12.01.

Guaranty

73

SECTION 12.02.

Nature of Liability

73

SECTION 12.03.

Independent Obligation

75

SECTION 12.04.

Demand by the Administrative Agent or the Lenders

75

SECTION 12.05.

Enforcement of Guaranty

75

SECTION 12.06.

Waiver

75

SECTION 12.07.

Benefit of Guaranty

76

SECTION 12.08.

Modification of Guaranteed Obligations, Etc

76

SECTION 12.09.

Reinstatement

77

SECTION 12.10.

Waiver of Subrogation, Etc

77

SECTION 12.11.

Election of Remedies

78

SECTION 12.12.

Funds Transfers

78

SECTION 12.13.

Further Assurances

79

SECTION 12.14.

Payments Free and Clear of Taxes

79

SECTION 12.15.

Limitation on Amount Guarantied; Contribution by Guarantors

79

ARTICLE XIII

THE ADMINISTRATIVE AGENT

80

SECTION 13.01.

Appointment Powers and Immunities; Delegation of Duties, Liability of Administrative Agent  80

SECTION 13.02.

Reliance by Administrative Agent

82

SECTION 13.03.

Defaults

82

SECTION 13.04.

Rights as a Lender

82

SECTION 13.05.

Costs and Expenses; Indemnification

83

SECTION 13.06.

Non-Reliance on Administrative Agent and Other Lenders

83

SECTION 13.07.

Failure to Act

84

SECTION 13.08.

Resignation of Administrative Agent

84

SECTION 13.09.

Sub-Agents

84

SECTION 13.10.

Communications by Borrower

84

SECTION 13.11.

Collateral Matters

85

SECTION 13.12.

Restrictions on Actions by the Administrative Agent and the Lenders; Sharing Payments  86

SECTION 13.13.

Several Obligations; No Liability

86

ARTICLE XIV

MISCELLANEOUS

87

SECTION 14.01.

Notices, Etc

87

SECTION 14.02.

Amendments, Etc

88

SECTION 14.03.

Non-Consenting Lenders

89

SECTION 14.04.

No Waiver; Remedies, Etc

89

SECTION 14.05.

Expenses; Taxes; Attorneys’ Fees

90

SECTION 14.06.

Right of Set-Off, Sharing of Payments, Etc

91

SECTION 14.07.

Severability

92

SECTION 14.08.

Replacement of Lenders

92

SECTION 14.09.

Complete Agreement; Sale of Interest

92

SECTION 14.10.

Assignment; Register

92

SECTION 14.11.

Counterparts

94

SECTION 14.12.

GOVERNING LAW

95

SECTION 14.13.

CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE

95

SECTION 14.14.

WAIVER OF JURY TRIAL, ETC

95

SECTION 14.15.

Consent

96

SECTION 14.16.

Interpretation

96

SECTION 14.17.

Reinstatement; Certain Payments

96

SECTION 14.18.

Indemnification

96

SECTION 14.19.

Interest

97

SECTION 14.20.

Records

99

SECTION 14.21.

Binding Effect

99

SECTION 14.22.

Confidentiality

99

SECTION 14.23.

Lender Advertising

100

SECTION 14.24.

Common Enterprise

100

SECTION 14.25.

USA PATRIOT ACT

100

SECTION 14.26.

Amendments to the Existing Credit Agreement

100

SECTION 14.27.

Schedules

101

ARTICLE XV

SUBORDINATION

101

SECTION 15.01.

Agreement to Subordinate

101

SECTION 15.02.

Liquidation; Dissolution; Bankruptcy

101

SECTION 15.03.

Payment Default on Senior Debt

101

SECTION 15.04.

Acceleration of Notes

102

SECTION 15.05.

When Distribution Must Be Paid Over

102

SECTION 15.06.

Notice by Borrower

103

SECTION 15.07.

Subrogation

103

SECTION 15.08.

Relative Rights

103

SECTION 15.09.

Subordination May Not Be Impaired by Borrower

103

SECTION 15.10.

Distribution or Notice

104

SECTION 15.11.

Rights of Administrative Agent

104

SECTION 15.12.

Authorization to Effect Subordination

104

SECTION 15.13.

No Modification

104

SECTION 15.14.

Reinstatement

104

SECTION 15.15.

Proofs of Claim

104

SECTION 15.16.

Enforcement of Rights

105

SECTION 15.17.

Subordination of Guarantees

105

i

SCHEDULES

Schedule A

—

Liens

Schedule B

—

Indebtedness

Schedule 2.01(a)

—

Loans

Schedule 6.01(e)

—

Subsidiaries

Schedule 6.01(f)

—

Litigation

Schedule 6.01(m)

—

Owned Real Property

Schedule 6.01(n)

—

Real Estate Assets

Schedule 6.01(p)

—

Environmental Matters

Schedule 6.01(q)

—

Insurance

Schedule 6.01(s)

—

Deposit Accounts and Securities Accounts of the Credit Parties

Schedule 6.01(t)

—

Registered Intellectual Property

Schedule 6.01(u)

—

Material Contracts

Schedule 8.14

—

Remedial Action

Schedule 9.07

—

Investments

EXHIBITS

Exhibit B-1

—

Form of Notice of Borrowing

Exhibit B-2

—

Form of Notice of Conversion/Continuation

Exhibit C

—

Form of Note

Exhibit E-1

—

Form of Opinion of Counsel to the Borrower and the Guarantors

Exhibit E-2

—

Form of Opinion of Counsel to the Parent

Exhibit E-3

—

Form of Opinion of General Counsel of Borrower

Exhibit F

—

Form of Officer’s Certificate

Exhibit G

—

Form of Compliance Certificate

Exhibit H

—

Form of Assignment and Acceptance

Exhibit I

—

Form of Counterpart Agreement

Exhibit J

__

Form of Prepayment Notice

ii

SUBORDINATED CREDIT AGREEMENT

This Subordinated Credit Agreement, dated as of January 14, 2008 (the “Agreement”), by and among E.A. VINER INTERNATIONAL CO., a corporation formed under the laws of the State of Delaware (the “Borrower”), the other parties hereto from time to time, the lenders party hereto from time to time (the “Lenders”), CANADIAN IMPERIAL BANK OF COMMERCE, as administrative agent for itself and the Lenders (in such capacity, together with its successors and assigns, if any, the “Administrative Agent”), and CIBC WORLD MARKETS CORP., as lead arranger.

RECITALS

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders make available to it the Commitments, on the terms and conditions set forth herein; and

WHEREAS, the Administrative Agent and the Lenders are willing to make the Loans to the Borrower upon the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS; CERTAIN TERMS

SECTION 1.1.  Definitions.  As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

“2003 CIBC Acquisition” means the acquisition by Parent (known at the time as Fahnestock Viner Holdings Inc.) of the U.S. Oppenheimer Private Client Division and the U.S. Oppenheimer Asset Management Division of CIBC World Markets Corp, consummated in January, 2003.

“2006 Financial Statements” means the audited consolidated balance sheet of Parent for the Fiscal Year ended December 31, 2006 and the related consolidated statement of operations, shareholders’ equity and cash flows for the Fiscal Year then ended.

“Account” means an “account” as that term is defined in the UCC.

“Account Debtor” has the meaning ascribed to such term in the Security Agreement.

“Action” has the meaning ascribed to such term in Section 14.15.

“Additional Security Documents” means any Security Documents entered into pursuant to Section 8.10 hereof.

“Administrative Agent” has the meaning ascribed to such term in the introductory paragraph hereto.

“Administrative Agent’s Office” means the office of the Administrative Agent located at 300 Madison Avenue, 6th floor, New York, New York 10017, or such other office as may be designated pursuant to the provisions of Section 14.01.

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied 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 specified Person, whether through the ownership of voting Securities or by contract or otherwise.

“Agent-Related Persons” means Administrative Agent and its Affiliates, and the officers, directors, employees, counsel, agents, and attorneys-in-fact of Administrative Agent and its Affiliates.

“Agreement” means this Subordinated Credit Agreement, together with all Exhibits and Schedules hereto, as such agreement may be amended, supplemented or otherwise modified from time to time.

“Agreement Value” means, for each Hedging Agreement, on any date of determination, the amount, if any, that would be payable by any Credit Party or any of its Subsidiaries to its counterparty to such Hedging Agreement in accordance with its terms as if (a) such Hedging Agreement was being terminated early on such date of determination, (b) such Credit Party or Subsidiary was the sole “Affected Party” and (c) the Credit Party was the sole party determining such payment amount pursuant to the provisions of the ISDA Master Agreement.

“Alternate Base Rate” at any time means the higher of (a) the rate which is 0.50% in excess of the Federal Funds Rate and (b) the Base Rate.  Any change in the Alternate Base Rate due to a change in the Base Rate or the Federal Funds Rate shall be effective on the opening of business on the date of such change.

“Alternate Base Rate Loans” means Loans that bear interest at an interest rate based on the Alternate Base Rate.

“Applicable Law” means, in respect of any Person, all provisions of constitutions, laws, statutes, rules, regulations, treaties, directives, guidelines and orders of Governmental Authorities applicable to such Person, including zoning ordinances, all Environmental Laws, and all orders, decisions, judgments and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.

“Applicable Margin” means, in the case of Alternate Base Rate Loans, 2.75% per annum, and in the case of LIBOR Rate Loans, 3.75% per annum.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of November 2, 2007 among the Parent, Oppenheimer & Co. Inc., Canadian Imperial Bank of Commerce, CIBC World Markets Corp. and certain other Affiliates of Canadian Imperial Bank of Commerce and Oppenheimer Holdings Co. identified therein, as the same may be amended, amended and restated or otherwise modified from time to time.

“Assignment and Acceptance” means an Assignment and Acceptance substantially in the form of Exhibit H attached hereto and made a part hereof (with blanks appropriately completed) delivered to the Administrative Agent in connection with an assignment of a Lender’s interest under this Agreement in accordance with Section 14.10(b).

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time, and any successor statute.

“Base Rate” means, on any date and relative to all Alternate Base Rate Loans, a fluctuating rate of interest per annum equal to the rate of interest most recently announced by the Administrative Agent in New York, New York as its reference rate.  The Base Rate is not necessarily intended to be the lowest rate of interest determined by the Administrative Agent or any other Lender.  Changes in the rate of interest on that portion of any Loans maintained as Alternate Base Rate Loans will take effect simultaneously with each change in the Base Rate.  The Administrative Agent will give notice promptly to the Borrower and the Lenders of changes in the Base Rate.

“Benefit Plan” means an employee pension benefit plan, excluding any Multiemployer Plan, which is subject to Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“Borrower” has the meaning ascribed to such term in the introductory paragraph hereto.

“Broker-Dealer Subsidiary” means a U.S. Broker-Dealer Subsidiary or a Foreign Broker-Dealer Subsidiary.

“Business Day” means any day that is not a Saturday, a Sunday or a day on which commercial banks are required or permitted to be closed in the State of New York; provided that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in U.S. Dollar deposits in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period, the sum of the aggregate of all expenditures by such Person and its Subsidiaries arising during such period that, in accordance with GAAP, are or should be included in the “property, plant and equipment” account on its consolidated balance sheet, including all applicable Capitalized Lease Obligations with respect to “property, plant and equipment”, paid or payable during such period, excluding in each case, (a) any such expenditures made for the repair, replacement or restoration of assets to the extent paid or reimbursed by any insurance policy or condemnation award to the extent such expenditures are permitted under the Loan Documents, (b) any leasehold improvement expenditures to the extent paid or reimbursed by the applicable lessor, sublessor or s ublessee and (c) any acquisition of all or substantially all of the assets of, all of the Capital Stock of, or a business line, unit, office or division of, any Person.  

“Capitalized Lease” means, with respect to any Person, any lease of real or personal property by such Person as lessee which is required under GAAP to be capitalized on the balance sheet of such Person.  

“Capitalized Lease Obligations” means, with respect to any Person, obligations of such Person and its Subsidiaries as lessee under Capitalized Leases as determined in accordance with GAAP.

“Capital Stock” means (a) with respect to any Person that is a corporation, any and all shares, options, warrants, interests, participations or other equivalents (however designated and whether or not voting) of or in a Person, including common stock, preferred stock or any other “equity security” and (b) with respect to any Person that is not a corporation, any and all partnership, limited liability company interests or other equity interests of such Person excluding, in the case of clauses (a) and (b) above, any debt security that is exchangeable for or convertible into such capital stock.

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by an agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year after the date of acquisition thereof; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one (1) year after the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then from such other nationally recognized rating services reasonably acceptable to the Administrative Agent) and not listed in Credit Watch published by S&P; (c) commercial paper, other than commercial paper issued by the Borrower or any of its Subsidiaries, maturing no more than two hundred seventy (270) days after the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-1 or P-1, respectively, from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then the comparable rating from such other nationally recognized rating services reasonably acceptable to the Administrative Agent); (d) domestic and Eurodollar certificates of deposit or time deposits or bankers’ acceptances maturing within one (1) year after the date of acquisition thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia or Canada having combined capital and surplus of not less than $500,000,000 or by any Lender; (e) shares of money marke t or mutual funds that are required to have a net asset value of $1.00 per share with assets in excess of $250,000,000 and that invest exclusively in assets satisfying the requirements of clauses (a) through (e) of this definition; and (f) marketable direct debt issued or guaranteed by any corporation (other than debt issued by the Borrower or any of its Subsidiaries), which at the time of acquisition, has one of the three highest ratings obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, then from such other nationally recognized rating services acceptable to the Administrative Agent) maturing within one (1) year after the date of acquisition thereof.  

“Casualty” means any casualty, loss, damage, destruction or other similar loss with respect to real or personal property or improvements.

A “Change of Control” shall be deemed to occur if, collectively, the Permitted Holders fail to retain beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act), directly or indirectly, of a majority of the Voting Stock (as defined below) of the Borrower.  As used in this definition, “Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right to so vote has been suspended by the happening of such a contingency.

“Closing Date” means the Business Day, on or before January 14, 2008, on which all of the conditions precedent set forth in Section 5.01 have been satisfied (or waived in accordance with the terms of this Agreement).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of the Code shall be construed also to refer to any successor sections.

“Collateral” has the meaning ascribed to such term in the Security Agreement.

“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance and condemnation proceeds, cash proceeds of sales and other voluntary or involuntary dispositions of property, rental proceeds, and tax refunds).

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

“Committed Loan Notice” means a Notice of Borrowing, or a Notice of Conversion/Continuation, as the context may require.

“Committed Prepayment Notice” has the meaning ascribed to such term in Section 3.01.

“Commitments” means, with respect to any Lender, the obligation of such Lender to make a Loan pursuant to the terms and conditions of this Agreement, and which shall not exceed the principal amount set forth opposite such Lender’s name on Schedule 2.01(a) under the heading “Commitment”, and “Commitments” means the aggregate principal amount of the Commitments of all the Lenders (it being understood and agreed that the maximum aggregate principal amount of the Commitments shall be $100,000,000).

“Compliance Certificate” has the meaning ascribed to such term in Section 7.01(d).

“Condemnation” means any taking by a Governmental Authority of property or assets, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation or in any other manner.

“Consolidated EBITDA” means, with respect to any Person for any period, the consolidated Net Income of such Person for such period plus, without duplication, the sum of the following amounts of such Person for such period to the extent deducted in determining consolidated Net Income of such Person for such period:  (a) Net Interest Expense, (b) provisions for federal, state, local, and foreign income, value added and similar Taxes, (c) depreciation expense, (d) amortization expense (including amortization of goodwill and other intangible assets and the amortization expense related to broker notes acquired and retention notes issued in the 2003 CIBC Acquisition), (e) impairment of goodwill and other non-cash charges or expenses, (f) non-cash extraordinary (on an after tax basis), unusual or non-recurring losses a nd losses from discontinued operations, (g) net losses attributable to Dispositions, (h) the amount of (x) any expense to the extent that a corresponding amount is received in cash by such Person from a Person under any agreement providing for reimbursement of expense, provided that such reimbursement is received not later than the last day of the first Fiscal Quarter commencing after the incurrence of the related expense, or (y) any expense with respect to liability or casualty events, business interruptions or product recalls, to the extent covered by insurance, and (i) all other non-cash items (including the cumulative effect from changes in accounting principles (on an after tax basis)), minus, without duplication, the sum of the following amounts of such Person for such period and to the extent included in determining Net Income of such Person for such period:  (i) extraordinary (on an after tax basis) unusual or non-recurring gains, (ii) the amount of any cash received by such Person as reimbursement for any expense included as an adjustment to Consolidated EBITDA pursuant to clause (h) above for any prior period, (iii) net gains attributable to Dispositions and (iv) all other non-cash items (including the cumulative effect from changes in accounting principals (on an after-tax basis)).  

“Consolidated Fixed Charges” means, for any period, the sum (without duplication) of the amounts for such period, as determined on a consolidated basis for Parent and its Subsidiaries in conformity with GAAP, of (a) Consolidated Interest Expense and (b) scheduled principal payments in respect of Consolidated Total Debt.

“Consolidated Interest Expense” means, for any period, the interest expense of Parent and its consolidated Subsidiaries payable on Consolidated Total Debt and allocable to such period in accordance with GAAP.

“Consolidated Total Debt” means, as of any particular time and after eliminating inter-company items, all Debt for Borrowed Money of the Parent and its Subsidiaries, as the same would be set forth in a consolidated balance sheet of the Parent and its Subsidiaries for such period.

“Contingent Obligation” means, with respect to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness (“Primary Obligations”) of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, or (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constitut ing direct or indirect Security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, Securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof, provided, however, that the term “Contingent Obligation” shall not include any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is m ade (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Control Agreement” means, with respect to a Securities Account or a Deposit Account, an agreement, in form and substance reasonably satisfactory to the Administrative Agent, which effectively gives “control” (as defined in the UCC) to the Administrative Agent in such Securities Account and all investment property contained therein or Deposit Account and all funds contained therein, as the case may be.

“Counterpart Agreement” means a counterpart agreement substantially in the form of Exhibit I, with such changes thereon as the Administrative Agent may agree.

“Credit Parties” means, collectively, Parent, the Borrower and the Guarantors.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with the Parent’s and its Subsidiaries’ operations and not for speculative purposes.

“Debt for Borrowed Money” of any Person means, at any date of determination, without duplication, the sum of (a) all items that, in accordance with GAAP, would be classified as debt on a consolidated balance sheet of such Person at such date and (b) all Obligations of such Person under acceptance, letter of credit or similar facilities at such date; provided that, with respect to the Borrower and its Subsidiaries, Debt for Borrowed Money shall exclude, to the extent otherwise included in the items in clause (a) or (b) above, (i) liabilities payable to brokers, dealers, clearing organizations, clients and correspondents, liabilities with respect to broker call loans and liabilities in respect of securities sold but not yet purchased, in each case incurred in the ordinary course of the “broker-dealer” business of the B roker-Dealer Subsidiaries, (ii) accounts payable and accrued liabilities in the ordinary course of business of the Borrower and its Subsidiaries, and (iii) notes, bills and checks presented in the ordinary course of business by such Person to banks for collection or deposit; provided further that, with respect to Hedging Agreements, Debt for Borrowed Money shall include only net payment Obligations of such Person in respect of Hedging Agreements valued at the Agreement Value.

“Default” means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Deposit Account” means a “deposit account” as that term is defined in the UCC.

“Disposition” means any transaction, or series of related transactions, pursuant to which any Credit Party conveys, sells, leases or subleases, assigns, transfers or otherwise disposes of any part of its business, property or assets (whether now owned or hereafter acquired) to any other Person, in each case whether or not the consideration therefor consists of cash, Securities or other assets, excluding any sales of Inventory in the ordinary course of business.

“Dollar”, “Dollars” and the symbol “$” each means lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia, other than any such Subsidiary that has no material assets other than Capital Stock of or other Investments in one or more Foreign Subsidiaries.

“Eligible Assignee” means (a) a Lender; (b) Affiliate of a Lender; (c) an Approved Fund; or (d) any other Person approved by the Administrative Agent and, if no Event of Default has occurred and is continuing, the Borrower (such approval not to be unreasonably withheld or delayed).

“Environmental Actions” means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication from any Governmental Authority or other Person alleging violations of, or liability under, any Environmental Law or Releases of Hazardous Materials on, in, at, to, from or under (i) any assets, properties or businesses of the Borrower or any of its Subsidiaries or any of their respective predecessors in interest and (ii) any facilities which received Hazardous Materials generated by the Borrower or any of its Subsidiaries or any of their respective predecessors in interest.

“Environmental Laws” means any federal, state, local or foreign law or regulation relating to the protection of the environment or health and safety including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Federal Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) and any other law, includ ing common law, relating to the environment or health and safety (including, without limitation, laws relating to the storage, generation, use, handling, manufacture, processing, labeling, advertising, sale, display, transportation, treatment, reuse, recycling, release and disposal of Hazardous Materials), as such laws may be amended or otherwise modified from time to time, and any other present or future federal, state, provincial, local or foreign statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding determination (including the common law) of any Governmental Authority imposing liability or establishing standards of conduct for protection of the environment.

“Environmental Liabilities and Costs” means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any environmental condition or a Release of Hazardous Materials from or onto (a) any property presently or formerly owned by the Borrower or any of its Subsidiaries or (b) any facility which received Hazardous Materials or wastes generated by the Borrower or any of its Subsidiaries.

“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs or otherwise relating to any Environmental Law.

“Equipment” means, with respect to any Person, all of such Person’s now owned or hereafter acquired right, title, and interest with respect to equipment (including, without limitation, “equipment” as such term is defined in Article 9 of the UCC), machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), tools, parts, goods (other than consumer goods, farm products, or Inventory), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of ERISA shall be construed also to refer to any successor sections.  

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” within the meaning of Sections 414(b), (c), (m) and (o) of the Code.

“ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan, (b) the filing of a notice of intent to terminate a Benefit Plan in a distress termination (as described in Section 4041(c) of ERISA), (c) the institution by the Pension Benefit Guaranty Corporation of proceedings to terminate a Benefit Plan or Multiemployer Plan, (d) the appointment of a trustee to administer any Benefit Plan under Section 4042 of ERISA, or (e) any event requiring the Borrower or any ERISA Affiliate to provide security to a Benefit Plan under Section 401(a)(29) of the Code.  

“Eurodollar Reserve Percentage” means, for any day, the percentage, expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100^th of 1%, that is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in The City of New York.

“Event of Default” has the meaning ascribed to such term in Section 11.01.

“Existing Debt” means Indebtedness of the Borrower and its Subsidiaries existing on the Closing Date.

“Existing Credit Agreement” means that certain Senior Secured Credit Agreement, dated as of July 31, 2006 among E.A. Viner International Co. as Borrower, certain other parties defined therein as Credit Parties, Morgan Stanley Senior Funding, Inc. as Administrative Agent and Syndication Agent, Morgan Stanley & Co Incorporated, as Collateral Agent, and a syndicate of lenders.

“Existing Facility Loans” means loans made and outstanding under the Existing Credit Agreement.

“Extraordinary Receipts” means any cash received by any of the Credit Parties from proceeds of key man life insurance in excess of $5,000,000 (to the extent not required to be paid by any Credit Party to any third party).

“Federal Funds Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent in the exercise of its reasonable discretion.

“Federal Reserve Board” means the Board of the Federal Reserve System or any Governmental Authority succeeding to its functions.

“FINRA” means the Financial Industry Regulatory Authority.

“Fiscal Month” means each fiscal month of the Parent consisting of a four (4) or five (5) week period.

“Fiscal Quarter” means the fiscal quarter of the Parent ending on each March 31, June 30, September 30 and December 31 of any Fiscal Year.

“Fiscal Year” means the fiscal year of the Parent ending on the last day of the last Fiscal Month of the Parent.

“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) the Parent’s Consolidated EBITDA for the four consecutive Fiscal Quarters most recently ended minus Capital Expenditures of the Parent and its Subsidiaries for such period minus provision for Federal, state, local and foreign taxes for such period to (b) the Parent’s Consolidated Fixed Charges for such period.

“FOCUS Report” has the meaning ascribed to such term in Section 7.01(a).

“Foreign Broker-Dealer Subsidiary” means any Foreign Subsidiary of any Credit Party that is registered as a broker and/or dealer in securities under any foreign law or regulatory regime established for the registration of brokers and/or dealers of securities.

“Foreign Subsidiary” means a Subsidiary other than a Domestic Subsidiary.  

“Forfeiture Proceeding” means any action, proceeding or investigation affecting the Borrower or any of the Guarantors before any court, governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or the receipt of notice by any such party that any of them is a suspect in or a target of any governmental inquiry or investigation which may result in an indictment of any of them or the seizure or forfeiture of any of their respective properties.

“Fraudulent Transfer Laws” has the meaning ascribed to such term in Section 12.15.

“Fund” means any Person that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit.

“Funding Date” means, with respect to any Loan, the date of the funding of a Loan.

“GAAP” means generally accepted accounting principles in effect from time to time in the United States, provided that, for the purpose of the financial amounts and the definitions used herein, “GAAP” shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the financial statements, and provided further that, if there occurs after the date of this Agreement any change in GAAP that affects in any material respect the calculation of any financial covenant contained in Article X, the Administrative Agent and the Borrower shall negotiate in good faith an amendment to such financial covenant and any other provision of this Agreement that relates to the calculation of such financial covenant with the intent of having the respective pos itions of the Lenders and the Borrower after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, after the execution of any such amendment or consent by the Required Lenders in connection with any such change in GAAP, “GAAP” shall mean generally accepted accounting principles in effect on the effective date of such amendment or consent.  Until any such amendments have been agreed upon, the covenants in Article X shall be calculated as if no such change in GAAP has occurred.

“Governing Documents” means, (a) with respect to any corporation, (i) the articles/certificate of incorporation (or the equivalent organizational documents) of such corporation, (ii) the by-laws (or the equivalent governing documents) of the corporation and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such corporation’s capital stock; and (b) with respect to any general partnership, (i) the partnership agreement (or the equivalent organizational documents) of such partnership and (ii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (c) with respect to any limited partnership, (i) the partnership agreement (or the equivalent o rganizational documents) of such partnership, (ii) a certificate of limited partnership (or the equivalent organizational documents) and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (d) with respect to any limited liability company, (i) the certificate of limited liability (or equivalent filings) of such limited liability company, (ii) the operating agreement (or the equivalent organizational documents) of such limited liability company, and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of such company’s membership interests; and (e) with respect to any unlimited liability company, (i) the certificate of incorporation (or the equivalent organizational documents) of such unlimited liability company, (ii) the memorandum and articles of association (or the equivalent governing documents) of suc h unlimited liability company and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such unlimited liability company’s Capital Stock.

“Governmental Authority” means any nation or government, any federal, state, provincial, city, town, municipal, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guaranteed Obligations” has the meaning ascribed to such term in Section 12.01.

“Guarantors” means Viner Finance Inc., a Delaware corporation, and each of the other Persons that are required to become a Guarantor under Section 8.18(b) from time to time.  Notwithstanding anything herein to the contrary, however, no U.S. Broker-Dealer Subsidiary shall be a Guarantor hereunder.

“Guaranty” means the guaranty of each of the Guarantors pursuant to Article XII.

“Hazardous Materials” means (a) any element, compound or chemical that is regulated under any Environmental Law including any substance that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste, special waste, or solid waste under Environmental Laws; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d) any waste exhibiting a hazardous characteristic, including, but not limited to, corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive materials; and (e) friable asbestos-containing materials.

“Hedging Agreement” means an Interest Rate Agreement or a Currency Agreement entered into by a Credit Party or any of its Subsidiaries in order to satisfy the requirements of the Existing Credit Agreement or otherwise in the ordinary course of such Credit Party’s or any of its Subsidiaries’ businesses.

“Highest Lawful Rate” has the meaning ascribed to such term in Section 4.01(c).

“Indebtedness” means, without duplication, with respect to any Person, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business irrespective of when paid); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (d) all obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder are limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabi lities of such Person as an account party, in respect of letters of credit, bankers’ acceptances and similar facilities; (g) all the aggregate mark-to-market exposure of such Person under Hedging Agreements; (h) all Contingent Obligations; and (i) all obligations referred to in clauses (a) through (h) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person (other than property held by a Broker-Dealer Subsidiary for the account of customers or others), even though such Person has not assumed or become liable for the payment of such Indebtedness, provided that the amount of Indebtedness of others that constitutes Indebtedness solely by reason of this clause (i) shall not for purposes of this Agreement exceed the fair market value of the properties or assets subject to such Lien.  The Indebtedness of any P erson shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer that is required to be consolidated under GAAP to the extent such Person would be liable therefor under applicable law or any agreement or instrument by virtue of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person shall not be liable therefor.  

“Indemnified Matters” has the meaning ascribed to such term in Section 14.18.

“Indemnitees” has the meaning ascribed to such term in Section 14.18.

“Intellectual Property” means all (a) Trademarks; (b) inventions and discoveries, whether patentable or not, and all patents, registrations, invention disclosures and applications therefor, including divisions, continuations, continuations-in-part and renewal applications, and including renewals, extensions and reissues; (c) Trade Secrets; (d) published and unpublished works of authorship, whether copyrightable or not (including without limitation databases and other compilations of information), copyrights therein and thereto, and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof; and (e) all other intellectual property or proprietary rights.

“Intercreditor Agreement” means an intercreditor agreement between the Administrative Agent and the agent under the Existing Credit Agreement, which shall be on terms satisfactory to such parties and the Borrower.

“Interest Accrual Period” means, with respect to any LIBOR Rate Loan, the period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of an Alternate Base Rate Loan to a LIBOR Rate Loan) and ending one, two, three, six, or, if consented to by all applicable Lenders, nine months thereafter; and provided that the foregoing provisions are subject to the following:

(a)

if any Interest Accrual Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Accrual Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Accrual Period into another calendar month, in which event such Interest Accrual Period shall end on the immediately preceding Business Day;

(b)

any Interest Accrual Period pertaining to a LIBOR Rate Loan 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 Accrual Period) shall end on the last Business Day of the relevant calendar month;

(c)

any Interest Accrual Period in respect of any Loan that would otherwise extend beyond the Maturity Date shall end on the Maturity Date;

(d)

no more than twelve (12) LIBOR Rate Loans may be in effect at any time.  For purposes hereof, LIBOR Rate Loans with different LIBOR Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing LIBOR Periods to constitute a new LIBOR Rate Loan with a single LIBOR period; and

(e)

the Borrower may exercise the LIBOR option for LIBOR Rate Loans of at least $1,000,000 and integral multiples of $500,000 in excess thereof.

“Interest Payment Date” means (a) with respect to (i) any Alternate Base Rate Loan, the last Business Day of each calendar quarter, commencing on the first such date to occur after the Closing Date; and (ii) any LIBOR Rate Loan, the last day of each Interest Accrual Period applicable to such Loan; provided, in the case of each Interest Accrual Period of longer than three months, “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Accrual Period, and (b) with respect to all Loans, the Maturity Date.

“Interest Rate” means interest at a rate equal to either, at the Borrower’s option, (a) LIBOR plus the Applicable Margin or (b) the Alternate Base Rate, plus the Applicable Margin.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement each of which is for the purpose of hedging the interest rate exposure associated with the Parent’s and its Subsidiaries’ operations and not for speculative purposes.

“Interest Rate Determination Date” means, for each Interest Accrual Period, the second Business Day immediately preceding the first day of such Interest Accrual Period.

“Inventory” means all Credit Parties’ now owned or hereafter acquired right, title, and interest with respect to (a) all “inventory” as defined in Article 9 of the UCC and (b) all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Credit Party’s business; all goods which are returned to or repossessed by any Credit Party; and all computer programs embedded in any of the foregoing and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

“Investment” means, with respect to any Person, (a) any purchase or other acquisition by that Person of Securities, or of a beneficial interest in Securities, issued by any other Person, (b) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, (c) any joint venture (other than short-term trading accounts with other broker-dealers in the ordinary course of business) and (d) any direct or indirect loan, advance (other than prepaid expenses, accounts receivable, advances and other loans to employees including, without limitation, employee forgivable loans and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness owing to such Person arising from a sale of any property or assets b y such Person other than in the ordinary course of its business; provided that, for the avoidance of doubt, transactions in funds, securities or other property held or carried by any Broker-Dealer Subsidiary in the ordinary course of business for the account of any client or others shall not constitute “Investments.”

“IRS” means the Internal Revenue Service or any successor federal tax Governmental Authority.

“Leasehold Property” means any leasehold interest of the Borrower or any Guarantor as lessee under any lease of real property, other than any such leasehold interest designated from time to time by Administrative Agent in its sole discretion as not being required to be included in the Collateral.

“Lender Group” means, individually and collectively, Administrative Agent and the Lenders.

“Lenders” means, collectively, the lenders identified on the signature pages hereof, together with their respective successors and permitted assigns, each a “Lender”.

“Lender-Related Persons” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, and the officers, directors, employees, counsel, agents, and attorneys-in-fact of such Lender and such Lender’s Affiliates.

“LIBOR” means, with respect to each Interest Accrual Period in respect of any LIBOR Rate Loan, the rate per annum as calculated by the British Bankers’ Association and obtained by the Administrative Agent through a nationally recognized service such as the Dow Jones Market Service (Telerate) or Reuters (the “Service”) (or on any successor or substitute page of such Service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of Service, as determined by CIBC from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (b) in the event the rates referenced in the preceding clause (a) is not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in the London interbank market) by CIBC for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of Lender, for which the LIBOR Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date.

“LIBOR Period” means with respect to each Loan, the period of one, two, three, six or, if available, nine months, as specified by the Borrower in the applicable Notice of Borrowing or in a Notice of Conversion/Continuation.

“LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next higher 1/100^th of 1%) determined by the Administrative Agent pursuant to the following formula:  LIBOR/(1.00 – Eurodollar Reserve Percentage).

“LIBOR Rate Loans” means Loans which bear interest at a rate determined by reference to the LIBOR Rate.

“Lien” means any lien, security interest or other charge of any kind, or any other type of preferential arrangement intended to have the effect of a lien or security interest, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“LoanCo” means an indirectly wholly-owned subsidiary of the Parent, newly formed to engage in the business of originating, arranging, syndicating and trading commercial loans, and related activities.

“Loan Documents” means this Agreement, the Notes, the Security Documents, the Intercreditor Agreement, and all other agreements, instruments, and other documents executed and delivered by any Credit Party pursuant hereto or thereto or otherwise evidencing or securing any Loan.

“Loan Exposure” means, with respect to any Lender, as of any date of determination (a) prior to the funding of the Loans, such Lender’s Commitment, and (b) after the funding of the Loans, the outstanding principal amount of all Loans made by such Lender as of such date.

“Loans” has the meaning ascribed to such term in Section 2.01(a).

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Credit Parties taken as a whole, (b) the ability of the Credit Parties to perform their obligations hereunder or under any of the other Loan Documents or (c) the rights and remedies of the Administrative Agent or any Lender hereunder or under any other Loan Document.

“Material Contract” means (a) each “material definitive agreement” (as such term is defined in Item 1.01 of Form 8-K under the Securities Exchange Act) not made in the ordinary course of business to which the Borrower or any of its Subsidiaries is a party, (b) any employment, stock option, defined compensation or similar agreement with Jeffrey Alfano, A.G. Lowenthal, Dennis McNamara, E.K. Roberts, Robert Neuhoff, Robert Okin, Thomas Robinson and Lawrence Spaulding, or (c) any agreement pursuant to which any Credit Party is or may be obligated to pay or entitled to receive more than $12,000,000 per annum.

“Maturity Date” means with respect to the Loans, January 31, 2014.

“Moody’s” means Moody’s Investors Service and any successor thereto.

“Mortgages” means the mortgages and deeds of trust executed and delivered by certain of the Credit Parties (other than Parent) in favor of the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, as the same may be amended, modified and otherwise supplemented from time to time.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or its Subsidiaries or any of their ERISA Affiliates has contributed, or has been obligated to contribute, at any time during the preceding six years, or has liability.

“Net Cash Proceeds” means cash or cash equivalents received by a Credit Party or any Subsidiary from time to time in connection with a Disposition (whether as initial consideration or through the payment of deferred consideration) other than any Disposition pursuant to clauses (a) through (j) of Section 9.04 after deducting therefrom only (a) the principal amount of any Indebtedness of such Credit Party secured by any Permitted Encumbrance on any asset that is the subject of the Disposition (other than Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such Disposition (other than Indebtedness under this Agreement), (b) reasonable fees and expenses related thereto reasonably incurred by such Credit Party in connection therewith and (c) a provision for any Taxes to be paid or r easonably estimated to be payable, in connection with such Disposition (after taking into account any tax credits or deductions and any tax sharing arrangements); provided, however, in the event that a Credit Party or any Subsidiary is required to take a reserve in accordance with GAAP against any contingent liabilities associated with such Disposition, such Credit Party or Subsidiary may deduct from the Net Cash Proceeds received from such Disposition an amount equal to such reserve.

“Net Casualty/Condemnation Proceeds” means, with respect to any Casualty or Condemnation, the amount of any insurance proceeds or condemnation awards received by a Credit Party from time to time in connection with such Casualty or Condemnation (net of all reasonable fees and expenses related thereto reasonably incurred by such Credit Party in connection therewith), but excluding any proceeds or awards required to be paid to a creditor (other than the Lenders) which holds a Lien permitted pursuant to this Agreement on the property which is subject of such Casualty or Condemnation after deducting therefrom only (a) a reserve for any Taxes to be paid or estimated by the Borrower to be paid as a result of such Casualty or Condemnation and (b) to the extent not excluded above, payments to retire Indebtedness where payment of such Indebtedness is required in connection with such Casualty or Condemnation; provided, however, in the event that a Credit Party or any Subsidiary is required to take a reserve in accordance with GAAP against any contingent liabilities associated with such Casualty or Condemnation, such Credit Party or Subsidiary may deduct from the Net Cash Proceeds received from such Casualty or Condemnation an amount equal to such reserve.

“Net Income” means, with respect to any Person for any period, the net income (loss) of such Person and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Net Interest Expense” means, with respect to any Person for any period, (a) interest expense of such Person and its consolidated Subsidiaries for such period (other than Broker-Dealer Subsidiaries and after the elimination of intercompany items) determined on a consolidated basis in conformity with GAAP less (b) the sum of (i) interest income for such period and (ii) realized gains for such period on Hedging Agreements (to the extent not included in interest income above and to the extent not deducted in the calculation of such interest expense), plus (c) the sum of (i) losses for such period on Hedging Agreements (to the extent not included in such gross interest expense) and (ii) the upfront costs or fees for such period associated with Hedging Agreements (to the extent not included in interest expense ), each determined on a consolidated basis in accordance with GAAP for such Person and its consolidated Subsidiaries.

“Non-Consenting Lender” has the meaning ascribed to such term in Section 14.03.

“Non-U.S. Lender” has the meaning ascribed to such term in Section 3.04(e)(i).

“Note” has the meaning ascribed to such term in Section 2.04(a).

“Notice of Borrowing” means a notice substantially in the form of Exhibit B-1 attached hereto and made a part hereof.

“Notice of Conversion/Continuation” means a notice substantially in the form of Exhibit B-2 attached hereto and made a part hereof.

“NYSE” means the NYSE Regulation, Inc.

“Obligations” means all Loans, advances, debts, liabilities, obligations, covenants and duties, owing by any Credit Party to the Administrative Agent, any Lender, any Affiliate of any Lender or any Person entitled to indemnification pursuant to Section 14.18 of this Agreement, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, interest rate contract, foreign exchange contract or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, but in all such circumstances only to the extent now existing or hereafter arising or however acquired, arising under or in connection with this Agre ement, the Notes or any other Loan Document.  The term includes all interest (including any interest that, but for the provisions of the Bankruptcy Code, would have accrued), charges, expenses, fees, attorneys’ fees and disbursements and any other sum chargeable to the Borrower or any Guarantor under this Agreement, the Notes or any other Loan Document.

“Officer’s Certificate” has the meaning ascribed to such term in Section 7.01(d).

“Operating Lease” means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capitalized Lease other than any such lease under which that Person is the lessor.

“Other Taxes” has the meaning ascribed to such term in Section 3.04(b).

“Parent” means Oppenheimer Holdings Inc., a corporation formed under the laws of Canada.

“Participant” has the meaning ascribed to such term in Section 14.10(e).

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. No. 107-56 (signed into law October 26, 2001).

“Permits” has the meaning ascribed to such term in Section 6.01(l).

“Permitted Acquisition” means: (i) an acquisition expressly contemplated by the Asset Purchase Agreement; and (ii) an acquisition by a Credit Party or any of its Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Capital Stock of, or a business line, unit, office or a division of, any Person, provided that no acquisition shall constitute a Permitted Acquisition under clause (ii) above unless it satisfies each of the following conditions:

(a)

immediately prior to such acquisition, and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (ii) no events or circumstances shall have occurred that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;

(b)

with respect to any acquisition in which the Permitted Acquisition Costs exceed $6,000,000, the Borrower shall have submitted to the Administrative Agent at least 15 days prior to the consummation of such acquisition, a business description of the business or assets being acquired and an executive overview outlining the rationale for such acquisition and a summary of the terms of the acquisition and all undertakings and commitments of the Credit Parties and their Affiliates in connection therewith;

(c)

the representations and warranties set forth in Article VI shall be true and correct in all material respects, immediately before and after such acquisition, with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);

(d)

(i) the aggregate amount of Permitted Acquisition Costs in connection with such acquisition, together with all other Permitted Acquisition Costs incurred since the date hereof, shall not exceed $42,000,000; and (ii) solely in the case of an acquisition after giving effect to which the Borrower or any of its Subsidiaries (including any Subsidiary being acquired) will assume or retain any liability with respect to any non-compliance with laws or regulations by the acquired business or its directors, officers or employees prior to the date of consummation of such acquisition (a “Legacy Liability Acquisition”), the aggregate amount of Permitted Acquisition Costs in connection with such Legacy Liability Acquisition, together with all other Permitted Acquisition Costs incurred since the date hereof with respect to Legacy Liability Acquisitions, shall not exceed $18,000,000;

(e)

all acquired assets shall, after giving effect to such acquisition, be owned by a Credit Party or a Subsidiary of a Credit Party, and Borrower shall have taken, or caused to be taken, as of the date of such acquisition, each of the actions set forth in Section 8.10, as applicable;

(f)

the Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in Article X on a pro forma basis (after giving effect to such acquisition and the financing thereof) as of the last day of the Fiscal Quarter most recently ended;

(g)

with respect to any acquisition in which the Permitted Acquisition Costs exceed $6,000,000, a Senior Officer of the Parent shall have delivered to the Administrative Agent a written certificate, in form and substance reasonably satisfactory to the Administrative Agent, as to the satisfaction of the applicable conditions set forth in clauses (a) through (f) above; and

(h)

all Collateral being acquired is, or will become promptly after the acquisition, subject to perfected liens and security interests in favor of the Secured Creditors, subject only to Permitted Encumbrances and otherwise on substantially the same terms as all other Collateral to the extent required by Section 8.10 and in accordance with the applicable provisions of the Loan Documents.

“Permitted Acquisition Costs” means all payments made, transaction costs and expenses incurred, liabilities accrued and Indebtedness paid or assumed by any Credit Party in connection with a Permitted Acquisition (including without limitation any Indebtedness of a Person that becomes a Subsidiary of Parent as a result of a Permitted Acquisition (other than ordinary course working capital Indebtedness) to the extent such Indebtedness is not being repaid or defeased on the date such Permitted Acquisition is consummated).

“Permitted Encumbrances” means:

(f)

Liens imposed by law for unpaid utilities and taxes, assessments or governmental charges or levies that are not yet due or are being contested in a Permitted Protest;

(g)

landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in a Permitted Protest;

(h)

pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security or employment laws or regulations or similar legislation or to secure public, statutory or regulatory obligations;

(i)

deposits to secure the performance of bids, trade contracts, government contracts, leases, statutory or regulatory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(j)

easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and which individually or in the aggregate do not have a Material Adverse Effect;

(k)

Liens existing on the Closing Date and listed on Schedule A hereto and, if the Indebtedness secured by such Lien is refinanced pursuant to a Permitted Refinancing, any Lien securing the Permitted Refinancing of such Indebtedness, provided that such Lien securing Indebtedness under a Permitted Refinancing does not extend to or cover any property or asset of any Credit Party not subject to the Lien on the Closing Date and listed on Schedule A;

(l)

Liens securing the Obligations and/or created by the Security Documents;

(m)

Liens securing judgments for the payment of money not constituting a Default under Section 11.01(k) or securing appeal or other surety bonds relating to such judgments;

(n)

any interest or title of a lessor, sublessor, licensee or licensor under any operating lease or license agreement entered into in the ordinary course of business and not interfering in any material respect with the business of the Borrower and its Subsidiaries, take as a whole;

(o)

Liens on assets of Broker-Dealer Subsidiaries securing “broker-dealer” financing of any Broker-Dealer Subsidiary entered into in the ordinary course of business including, without limitation, borrowings collateralized by client assets in the ordinary course of business (it being acknowledged by the Lenders and the Administrative Agent that the margin loans to Capital & Credit Merchant Bank Ltd. and its related entities is in the ordinary course of business);

(p)

Liens securing Indebtedness described in clauses (b), (d), (i), (s), and (t) of the definition of “Permitted Indebtedness”; provided that no Lien securing refinanced Indebtedness described in clause (b) of such definition shall constitute a Permitted Encumbrance under this clause (k) to the extent it encumbers any asset or property not similarly encumbered by a Lien securing the Obligations; and

(q)

Liens not otherwise permitted hereunder to the extent attaching to properties and assets with an aggregate fair market value not in excess of, and securing liabilities not in excess of, $6,000,000, in the aggregate at any one time outstanding.

“Permitted Holder” means any member of the Lowenthal family or any entity directly or indirectly owned by any member of the Lowenthal family. “Permitted Indebtedness” means:

(a)

Intentionally Omitted;

(b)

the Existing Facility Loans, any Hedging Agreements, and any Permitted Refinancing of such Indebtedness;

(c)

Indebtedness of the Credit Parties under this Agreement and the other Loan Documents;

(d)

purchase money indebtedness and Capitalized Lease Obligations incurred after the Closing Date to acquire equipment or real property in the ordinary course of business; provided that (A) the aggregate amount of all such Indebtedness does not exceed $30,000,000 at any time outstanding, (B) the Indebtedness when incurred shall not be more than 100% of the lesser of the cost or fair market value as of the time of acquisition of the asset financed, (C) such Indebtedness is issued and any Liens securing such Indebtedness are created within 270 days after the acquisition of the asset financed and (D) no Lien securing such Indebtedness shall extend to or cover any property or asset other than the asset so financed;

(e)

contingent liabilities in respect of any indemnification, adjustment of purchase price, non-compete, consulting, deferred compensation and similar obligations incurred in connection with any Disposition permitted hereunder;

(f)

Indebtedness owed to the Borrower or a Wholly-Owned Subsidiary of the Borrower, which Indebtedness shall (i) in the case of Indebtedness owed to a Guarantor, constitute Pledged Debt and (ii) be otherwise permitted under the provisions of Section 9.07;

(g)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument of any Credit Party or any Subsidiary of a Credit Party drawn against insufficient funds in the ordinary course of business, provided that the aggregate amount of all such Indebtedness does not exceed $120,000,000 at any time outstanding;

(h)

(i) Indebtedness of a Subsidiary of the Parent acquired in a Permitted Acquisition, provided that (A) such Indebtedness is existing upon consummation of the Permitted Acquisition and was not entered into in contemplation or furtherance thereof, (B) any Liens securing such Indebtedness relate only to assets and property of such Subsidiary and (C) the aggregate amount of all such Indebtedness (and commitments to advance Indebtedness in the case of any revolving loan or similar facility) does not exceed $36,000,000 at any time outstanding and (ii) any Permitted Refinancing thereof; and

(i)

Indebtedness incurred by Broker-Dealer Subsidiaries for operational liquidity needs pursuant to uncommitted lines of credit (including, without limitation, the facilities described on Schedule B and similar replacement facilities from time to time) in an aggregate outstanding principal amount not to exceed $1,500,000,000 at the close of business on any day;

(j)

Indebtedness in respect of any security lending contracts entered into by Broker-Dealer Subsidiaries in the ordinary course of the “broker-dealer” business;

(k)

Indebtedness with respect to leases in respect of real property entered into by any Broker-Dealer Subsidiary in the ordinary course of business;

(l)

Indebtedness under performance bonds, surety bonds and letter of credit obligations to provide security for worker’s compensation claims, in each case, incurred in the ordinary course of business;

(m)

to the extent the same constitutes Indebtedness, obligations in respect of net capital adjustments and/or earn-out arrangements permitted pursuant to a Permitted Acquisition;

(n)

Contingent Obligations of Broker-Dealer Subsidiaries arising in the ordinary course of the broker-dealer business pursuant to normal business practice, contract or applicable law, rule or regulation;

(o)

Contingent Obligations with respect to endorsements of checks and other negotiable instruments for deposit or collection;

(p)

Guarantees by a Credit Party of Indebtedness of another Credit Party or any Wholly-Owned Subsidiary;

(q)

to the extent constituting Contingent Obligations, indemnification obligations and other similar obligations of the Borrower and its Subsidiaries in favor of directors, officers, employees, consultants or agents of the Borrower or any of its Subsidiaries extended in the ordinary course of business;

(r)

Contingent Obligations with respect to payment obligations of the Borrower or any Subsidiary; provided, that the underlying obligation related to such Contingent Obligations is not otherwise prohibited under this Agreement;

(s)

Indebtedness of LoanCo under the Permitted Warehouse Facility;

(t)

Indebtedness of LoanCo under the Permitted Loan Trading Platform Facility;

(u)

Indebtedness of the Borrower under the Viner Debentures (as defined in the Asset Purchase Agreement); and

(v)

other Indebtedness in an aggregate amount for all such Credit Parties and their Subsidiaries taken as a whole not to exceed an amount equal to $36,000,000; provided that such Indebtedness is either unsecured or secured only by Liens permitted by clause (l) of the definition of “Permitted Encumbrances”.

“Permitted Loan Trading Platform Facility” means such credit facilities as LoanCo may enter into, refinance, amend and replace from time to time, and which credit facilities may be secured by such assets and property of LoanCo as LoanCo may determine, for the purpose of funding the acquisition and trading of syndicated loans so long as such facilities satisfy each of the following requirements:  (i) the use of proceeds of such facilities are limited to funding the acquisition and trading of syndicated loans, (ii) the aggregate amount of the available commitments and outstanding principal amount of advances under all such facilities does not exceed $75,000,000 at any time, and (iii) any creditor, agent or other party to the facilities has recourse only to LoanCo, its assets and property for the repayment of advances or other amounts due, and (except to the extent otherwise permitted hereunder) not to any asset or property of any Affiliate of LoanCo.

“Permitted Protest” means the right of a Person to protest any Lien (other than any such Lien that secures all or any portion of the Obligations) or taxes, provided that (a) a reserve with respect to such obligation is established, if required, by such Person in such amount as is required under GAAP and (b) any such protest is instituted promptly and prosecuted diligently and in good faith by such Person.

“Permitted Refinancing” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended at the time of such Permitted Refinancing except by an amount equal to any premium or other similar amount paid, and fees and expenses incurred, in connection with such modification, refinancing, refunding, renewal or extension, (b) such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of the Indebtedness being modified, refinanced, refunded, renewed or extended (except that this claus e (b) shall not apply to any modification, refinancing, refunding, renewal or extension of the Existing Credit Agreement, the Permitted Loan Trading Platform Facility and the Permitted Warehouse Facility), (c) none of the Borrower and its Subsidiaries not previously directly or contingently obligated on the applicable Indebtedness becomes directly or contingently obligated thereunder as a result of such Permitted Refinancing (except that this clause (c) shall not apply to any modification, refinancing, refunding, renewal or extension of the Existing Credit Agreement, the Permitted Loan Trading Platform Facility and the Permitted Warehouse Facility), and (d) if the Indebtedness being modified, refinanced, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on subordination terms at least as favorable to the Lenders, taken as a whole, as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended, as determined by the board of directors of such Person.

“Permitted Warehouse Facility” means such facilities as LoanCo may enter into, amend and replace from time to time, and the obligations of LoanCo which may be secured by such assets and property of LoanCo as LoanCo may determine, for the purpose of obtaining underwriting commitments extended to third party borrowers and related credit support and loan administration services with respect to the revolving loans, term loans, bridge loans and letters of credit to be originated or arranged by LoanCo, so long as such facilities entered into by LoanCo satisfy each of the following requirements: (i) such facilities are limited to obtaining underwriting commitments extended to third party borrowers and related credit support and loan administration services with respect to the revolving loans, term loans, bridge loans and letters of credit originated or arrange d in the ordinary course of LoanCo’s business (or, if applicable, any pending loan transaction agreed by LoanCo to be subject to such a facility in connection with a closing under the Asset Purchase Agreement), (ii) the maximum aggregate amount (in each case taking into account available amounts and outstanding commitments from time to time, and the reinstatement of available amounts in accordance with the terms of the respective facilities) of such facilities entered into by LoanCo does not exceed $2,000,000,000 at any time, and (iii) any party to such facilities has recourse only to LoanCo, its assets and property for the obligations of LoanCo thereunder and (except to the extent otherwise permitted hereunder) not to any asset or property of any Affiliate of LoanCo.

“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or Governmental Authority.

“Plan” means any “employee benefit plan”, as defined in Section 3(3) of ERISA.

“Pledged Debt” shall have the meaning ascribed to such term in the Security Agreement.

“Pledged Equity Interests” shall have the meaning ascribed to such term in the Security Agreement.

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Pro Rata Share” means, with respect to any Lender, the percentage obtained by dividing such a Lender’s Loan Exposure by the aggregate Loan Exposure of all Lenders.

“Rating Agencies” means Moody’s and S&P, or if either of such Persons cease to perform credit ratings or other applicable services, such nationally recognized statistical rating organization the Administrative Agent may select.

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any real property.

“Record Document” means, with respect to any Leasehold Property, (a) the lease evidencing such Leasehold Property or a memorandum thereof, executed and acknowledged by the owner of the affected real property, as lessor, or (b) if such Leasehold Property was acquired or subleased from the holder of a Recorded Leasehold Interest, the applicable assignment or sublease document, executed and acknowledged by such holder, in each case in form sufficient to give such constructive notice upon recordation and otherwise in form reasonably satisfactory to Administrative Agent.

“Recorded Leasehold Interest” means a Leasehold Property with respect to which a Record Document has been recorded in all places necessary or desirable, in the Administrative Agent’s reasonable judgment, to give constructive notice of such Leasehold Property to third party purchasers and encumbrancers of the affected real property.

“Register” has the meaning ascribed to such term in Section 14.10(d).

“Registered” means issued by, registered with, renewed by or the subject of a pending application before any Governmental Authority or Internet domain name registrar.

“Registered Intellectual Property” means all Intellectual Property that has been registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office or such other similar filing offices, domestic or foreign, as applicable.

“Regulation T”, “Regulation U”, and “Regulation X” mean, respectively, Regulations T, U, and X of the Federal Reserve Board or any successor, as the same may be amended or supplemented from time to time.

“Regulatory Net Capital” means for any Person the amount of net capital held by such Person as a broker-dealer under Section 15(c)(3) of the Securities Exchange Act, Rule 15c3-1 and the other applicable regulations promulgated thereunder.

“Related Party”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to vote ten percent (10%) or more of the Securities having voting power for the election of directors of such specified Person or otherwise to direct or cause the direction of the management and policies of such specified Person, whether through the ownership of voting Securities or by contract or otherwise.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including ambient air, soil, surface or ground water.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment; (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (c) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (d) any other actions authorized by 42 U.S.C. § 9601.

“Reportable Event” means any of the events described in Section 4043(c) of ERISA or the regulations thereunder other than a Reportable Event as to which the provision of 30 days’ notice to the PBGC is waived under applicable regulations.

“Required Lenders” means Unaffiliated Lenders holding more than 50% of the aggregate Loan Exposure of all Lenders who are Unaffiliated Lenders.

“Requirements of Law” means, as to any Person, the charter and by-laws or other organizational or Governing Documents of such Person, and any law, ordinance, rule, regulation, requirement, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, without limitation, the Patriot Act, the Securities Act, the Securities Exchange Act, Regulations T, U and X, ERISA, the Internal Revenue Code, the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or Permit or environmental, labor, employment, occupational safety or health law, rule or regulation.

“Responsible Officer” means the chief financial officer or treasurer of the Parent or the Borrower.

“Restricted Payments” means, with respect to any Person, (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of, partnership interest of or other equity interest of, such Person, now or hereafter outstanding, except a dividend or distribution payable solely in shares of that class of stock or in any junior class of stock to the holders of that class, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of, partnership interest of or other equity interest of, such Person now or hereafter outstanding, (c) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, d efeasance, sinking fund or similar payment and any claim for rescission with respect to any Indebtedness which is subordinated to the Obligations and (d) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of, partnership interest of or other equity interest of, such Person now or hereafter outstanding.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

“Secured Creditors” has the meaning ascribed to such term in the Security Agreement.

“Securities” means any Capital Stock, shares, voting trust certificates, bonds, debentures, notes, loans or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire any of the foregoing, but shall not include the Obligations.

“Securities Account” shall have the meaning provided in Section 8-501(a) of the UCC.

“Securities Act” means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Securitization” means a public or private offering by a Lender or any of its Affiliates or their respective successors and assigns of Securities which represent an interest in, or which are collateralized in whole or in part by, the Loans.

“Security Agreement” means the Pledge and Security Agreement, dated as of the date hereof, among the Borrower, the other Assignors identified therein and the Administrative Agent, as such agreement may be amended, supplemented or otherwise modified from time to time in accordance therewith and herewith.

“Security Documents” means the Security Agreement, the UCC financing statements, the Mortgages, the Control Agreements, and any other documents granting a Lien upon the Collateral as security for all or any part of the Obligations.

“Senior Debt” means principal, interest, fees, premium, expense reimbursement, indemnities and all other amounts payable under or with respect to the Existing Credit Agreement, or any renewal, extension, amendment, reinstatement, refinancing or refunding thereof.

“Senior Officer” means, with respect to any Credit Party, such Credit Party’s president, chief executive officer, chief administrative officer, chief financial officer or chief accounting officer.

“Solvent” or “Solvency” any person means (i) the fair value of the property of such person exceeds its total liabilities (including, without limitation, contingent liabilities), (ii) the present fair saleable value of the assets of such person is not less than the amount that will be required to pay its probable liability on its existing debts as they become absolute and matured, (iii) such person does not intend to incur debts or liabilities beyond its ability to pay, as such debts and liabilities mature, and (iv) such person is not engaged, and is not about to engage, in business or a transaction for which its property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing a t such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“SRO” means a self-regulatory organization registered under the Securities Exchange Act, including the NYSE.

“Subsidiary” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, association or other entity (a) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP or (b) of which more than 50% of (i) the outstanding Capital Stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors of such corporation, (ii) the interest in the capital or profits of such partnership or limited liability company or (iii) the beneficial interest in such trust or estate is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Pers on.

“Taxes” has the meaning ascribed to such term in Section 3.04(a).

“Total Leverage Ratio” means on any date the ratio of (a) Consolidated Total Debt on such date to (b) the Parent’s Consolidated EBITDA for the four (4) Fiscal Quarters most recently ended on such date.

“Trademarks” means all United States, state and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names, internet domain names, trade dress, service marks, certification marks, collective marks, logos, all indicators of the source of goods or services, designs and general intangibles of a like nature, all registrations and applications for any of the foregoing including, but not limited to the registrations and applications referred to in Schedule 6.01(t) (as such schedule may be amended or supplemented from time to time), but excluding in all cases all intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in confo rmance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office, all extensions or renewals of any of the foregoing, all of the goodwill of the business connected with the use of and symbolized by the foregoing, the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds of suit, which are owned or licensed by a Credit Party.

“Trade Secrets” means all trade secrets and all other confidential or proprietary information and know-how including drawings, formulae, schematics, designs, plans, processes, supplier lists, business plans, business methods and prototypes now or hereafter owned or used in the business of such Credit Party throughout the world (all of the foregoing being collectively called a “Trade Secret”), whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret, the right to sue for past, present and future infringement of any Trade Secret, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds of suit.

“Type” means, with respect to a Loan, its character as an Alternate Base Rate Loan or a LIBOR Rate Loan.

“UCC” means the Uniform Commercial Code enacted in the State of New York, as amended from time to time; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or priority is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unaffiliated Lenders” means any Lender who is not an Affiliate of Parent.

“U.S. Broker-Dealer Subsidiary” means any Domestic Subsidiary of any Credit Party that is a “registered broker and/or dealer” under the Securities Exchange Act.

“Wholly-Owned” means, when used to describe any Subsidiary of a Credit Party, that all of the Capital Stock (other than directors’ qualifying shares) of such Subsidiary is owned by one or more Credit Parties or Wholly-Owned Subsidiaries of the Credit Parties.

SECTION 0.1.  Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to a ny restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

SECTION 0.2.  Accounting and Other Terms.  Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given to it under GAAP.  All terms used in this Agreement which are defined in Article 8 or Article 9 of the UCC and which are not otherwise defined herein shall have the same meanings herein as set forth therein.

SECTION 0.3.  Time References.  Unless otherwise indicated herein, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in New York, New York on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; provided, however, that with respect to a computation of fees or interest payable to the Administrative Agent or the Lenders, such period shall in any event consist of at least one full day.

ARTICLE I
THE FACILITY

SECTION 1.1.  Loans.  

(a)

Loan Commitment.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make a term loan (each, a “Loan”) to the Borrower on the Closing Date in the principal amount set forth opposite each such Lender’s name on Schedule 2.01(a) hereto, in accordance with this Section 2.01.  The aggregate principal amount of the Loans to be advanced shall not exceed $100,000,000.  Amounts repaid or prepaid may not be reborrowed.  Loans may be Alternate Base Rate Loans or LIBOR Rate Loans, as further provided herein.  It is understood and agreed that the only Lender as of the Closing Date shall be Canadian Imperial Bank of Commerce and/or one or more of its Affiliates.

(b)

Notice of Borrowing.  The Loans to be made on the Closing Date, each conversion of Loans from one Type to the other, and each continuation of LIBOR Rate Loans shall be made upon the Borrower’s delivery to the Administrative Agent of an irrevocable written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  Each such Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of the making of the Loans to the extent such Loans will be LIBOR Rate Loans, conversion to or continuation of LIBOR Rate Loans or of any conversion of LIBOR Rate Loans to Alternate Base Rate Loans, and (ii) on the requested date of the making of the Loans to the extent such Loans will be Alternate Base Rate Loans.  Not later than 11:00 a.m ., three Business Days before the requested date of the making of such Loans, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Accrual Period has been consented to by all the Lenders.  Each making of Libor Rate Loans, conversion to or continuation of LIBOR Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Each making of Alternate Base Rate Loans or conversion to Alternate Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice shall specify (i) whether the Borrower is requesting the making of Loans, a conversion of Loans from one Type to the other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the making of Loans, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be b orrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Accrual Period with respect thereto.  So long as no Default or Event of Default exists, if the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to at the end of each Interest Accrual Period applicable thereto, a LIBOR Rate Loan (with an Interest Accrual Period of one month), until the Borrower selects an alternate Interest Accrual Period or converts such Loans to Alternate Base Loans in accordance with the  terms of this Agreement.  In the event that any LIBOR Rate Loans are not permitted to be converted into another LIBOR Rate Loan hereunder, such LIBOR Rate Loans shall be automatically be converted to Alternative Base Rate Loans at the end of the applicable Int erest Accrual Period with respect thereto.  Any such automatic conversion to Alternate Base Rate Loans shall be effective as of the last day of the Interest Accrual Period then in effect with respect to the applicable LIBOR Rate Loans.  If the Borrower requests Libor Rate Loans, conversion to, or continuation of LIBOR Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Accrual Period, it will be deemed to have specified a LIBOR Rate Loan with an Interest Accrual Period of one month.

(c)

Making the Loans.  Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share under the Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to a LIBOR Rate Loan with an Interest Accrual Period of one month or an Alternate Base Rate Loan, as applicable, described in Section 2.02(b).  With respect to the Loans to be made on the Closing Date, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 5.01, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent by wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower on the Committed Loan Notice.

(d)

Continuations/Conversions Generally.  Except as otherwise provided herein, a LIBOR Rate Loan may be continued or converted only on the last day of an Interest Accrual Period for such LIBOR Rate Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued as LIBOR Rate Loans without the consent of the Required Lenders.

(e)

Notification of Interest Rates.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Accrual Period for LIBOR Rate Loans upon determination of such interest rate.  At any time that Alternate Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Federal Funds Rate or the Base Rate used in determining the Alternate Base Rate promptly following the public announcement of such change.

(f)

Repayment of Loans.  The aggregate outstanding principal amount of the Loans shall be due and payable in Dollars on the Maturity Date.

SECTION 1.2.  Use of Proceeds.  Proceeds of the Loans shall be utilized solely to fund capital and liquidity requirements and general corporate purposes of the Borrower’s Broker-Dealer Subsidiary.  

SECTION 1.3.  Promise to Pay.  The Borrower agrees to pay the principal amount of the Loans as set forth in Section 2.01(f) and further agrees to pay all unpaid interest accrued thereon, in accordance with the terms of this Agreement and any applicable Note.

SECTION 1.4.  Notes.

(a)

The Borrower’s obligation to pay the principal of, and interest on, the Loans made to the Borrower by each Lender shall be set forth on the Register maintained by the Administrative Agent pursuant to Section 14.10(d) and, subject to the provisions of Section 2.04(c), shall be evidenced by a promissory note substantially in the form of Exhibit C with blanks appropriately completed in conformity herewith (each, as the same may be amended, supplemented or otherwise modified from time to time, a “Note”).

(b)

The Note issued to each Lender shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Closing Date (or, in the case of any Note issued after the Closing Date, the date of issuance thereof), (iii) be in a stated principal amount equal to the principal amount of the Loan of such Lender on the date of the issuance thereof and be payable in the principal amount of the Loans evidenced thereby from time to time, (iv) mature on the Maturity Date, (v) bear interest as provided for herein and (vi) be entitled to the benefits of this Agreement and the other Loan Documents.

(c)

Notwithstanding anything to the contrary contained above or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes.  No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or Guaranties therefor provided pursuant to the Loan Documents.  At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to that Lender the requested Note in the appropriate amount or amounts to evidence such Loans.

SECTION 1.5.  Allocation of Proceeds of Collateral.  Subject to Article XV, after the exercise of remedies by the Administrative Agent or the Lenders pursuant to Article XI (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Loan Documents shall automatically become due and payable in accordance with the terms hereof), all proceeds of Collateral shall be paid over or delivered to the Administrative Agent for distribution as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Administrative Agent under the Loan Documents, and to the payment of any fees owed to the Administrative Agent, each in its capacity as such;

SECOND, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Lenders in connection with enforcing its rights under the Loan Documents with respect to the Borrower’s Obligations owing to such Lender;

THIRD, to the payment of all of the Borrower’s Obligations to the Lenders consisting of accrued fees and interest;

FOURTH, to the payment of the outstanding principal amount of the Borrower’s Obligations under this Agreement and the other Loan Documents;

FIFTH, to all other of the Borrower’s Obligations under this Agreement and the other Loan Documents and other obligations to Lenders which shall have become due and payable under the Loan; and

SIXTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied equally and ratably in the numerical order provided until exhausted prior to the application to the next succeeding category; (ii) each of the Lenders shall receive an amount equal to its Pro Rata Share (based on the proportion that the then outstanding Loans held by such Lender bears to the aggregate then outstanding Loans) of amounts available to be applied pursuant to clauses “THIRD” and “FOURTH” above.

ARTICLE II
PAYMENTS AND OTHER COMPENSATION

SECTION 2.1.  Voluntary Prepayments.  Subject to the terms and conditions of Article XV, the Borrower shall have the right, upon sending written notice to the Administrative Agent in the form of Exhibit J hereto (a “Committed Prepayment Notice”), to voluntarily prepay all or any portion (in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof in the case of LIBOR Rate Loans, in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof in the case of Alternate Base Rate Loans or, in either case, such lesser amount as may then be outstanding) of the Loans on any Business Day.  Each such Committed Prepayment Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the date of prepayment o f the Loans to the extent such Loans are LIBOR Rate Loans, and (ii) on the date of prepayment of the Loans to the extent such Loans are Alternate Base Rate Loans.  Any prepayment of any Loans shall be applied to the remaining installments of the Loans on a pro rata basis until all Loans are repaid in full.

SECTION 2.2.  Mandatory Prepayments.

(a)

Prepayments from Asset Dispositions.  Subject to paragraph (e) of this Section 3.02, within thirty (30) Business Days after the receipt by a Credit Party or any Subsidiary of a Credit Party of any Net Cash Proceeds or Net Casualty/Condemnation Proceeds in excess of $2,000,000 in the aggregate during any Fiscal Year, the Borrower shall cause 100% of the Net Cash Proceeds or Net Casualty/Condemnation Proceeds received during such Fiscal Year to be applied to prepay the Loans; provided, however, that if the Borrower notifies the Administrative Agent in writing within such thirty (30) Business Day period that it or the applicable Subsidiary has applied or intends to apply such Net Cash Proceeds to acquire, maintain, develop, construct, improve, upgrade, repair or invest in assets used or useful in the business of the Borrower and its Subsid iaries, then the Borrower or the applicable Subsidiary, as applicable, shall, so long as no Event of Default shall have occurred and be continuing, be permitted to use such proceeds as notified to the Administration Agent within two hundred seventy (270) days of the receipt thereof; provided further that, to the extent such proceeds have not been so invested or contracted to be so invested as of the end of such period or if any Event of Default shall occur at any time during such period, all such Net Cash Proceeds or Net Casualty/Condemnation Proceeds shall be applied within three (3) Business Days to prepay the Loans.

(b)

Prepayments from Incurrence of Indebtedness.  Subject to paragraph (e) of this Section 3.02, immediately upon the receipt by any Credit Party or any Subsidiary of a Credit Party of cash proceeds from the issuance or incurrence of any Indebtedness (other than Permitted Indebtedness), the Borrower shall prepay the Loans in an amount equal to 100% of the proceeds from such issuance or incurrence upon the receipt by any Credit Party or any Subsidiary of a Credit Party of the proceeds, net of taxes, underwriting discounts and commissions and other reasonable, out-of-pocket costs and expenses associated therewith.

(c)

Cash Proceeds of Extraordinary Receipts.  Subject to paragraph (e) of this Section 3.02, promptly but in any event within three (3) Business Days following the receipt by any Credit Party or any Subsidiary of a Credit Party of any Extraordinary Receipts, the Borrower shall prepay the Loans in an amount equal to 100% of such Extraordinary Receipts, net of any reasonable costs, fees and expenses incurred in collecting such Extraordinary Receipts and a reserve for any Taxes expected to be paid in connection therewith.

(d)

Conflicts with Senior Debt.  Notwithstanding anything in this Section 3.02 to the contrary, until all obligations under the Senior Debt shall have been paid in full and all commitments thereunder shall have been terminated, no mandatory prepayments of outstanding Loans, that would otherwise be required under this Section 3.02 shall be required to be made.

SECTION 2.3.  Payments.

(a)

General Provisions.  All payments to be made by Borrower or any Guarantor shall be made without set-off, counterclaim or other defense.  Except as otherwise expressly provided herein, all payments by Borrower or any Guarantor shall be made to the Administrative Agent for the ratable account of Administrative Agent or the relevant Lender, as the case may be, at the Administrative Agent’s Office, and shall be made in and in immediately available funds, no later than 2:00 p.m. (New York City time), on the dates specified herein, as the case may be, to be reimbursed.  The Administrative Agent will promptly distribute to the relevant Lender (or itself, if applicable) its Pro Rata Share or other applicable share as expressly provided herein, of each such payment in like funds as received.  Any payment received by the Administrative Agent later than 2:00 p.m. (New York City time) on any Business Day shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(b)

Sharing of Payments.  Except as otherwise provided herein, if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in such similar obligations held by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each other Lender shall be rescinded and such other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together wit h an amount equal to such other Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender of any interest or other amount paid by the purchasing Lender in respect of the total amount so recovered).  Each Credit Party agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 3.03(b) may, to the fullest extent permitted by law, exercise all of its rights (including the Lender’s right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of such Credit Party in the amount of such participation.

(c)

Apportionment of Payments.  Subject to the provisions of Section 3.01 and this Section 3.03(c), all payments of principal and interest in respect of outstanding Loans, and all payments of fees and all other payments in respect of any other Obligation, shall be allocated among the Lenders in proportion to their respective Pro Rata Shares of such Obligations owing to them or otherwise as provided herein or, in respect of payments not made on account of Loans, as designated by the Person making payment at the time when such payment is made.

(d)

Payments on Non-Business Days.  Whenever any payment to be made by the Borrower hereunder or under the Notes is stated to be due on a day which is not a Business Day, the payment shall instead be due on the next succeeding Business Day (unless such succeeding Business Day would be in the subsequent calendar month, in which case such payment shall be made on the immediately preceding Business Day).

SECTION 2.4.  Taxes.

(a)

Payment of Taxes.  Except as set forth below, any and all payments by the Borrower or any Guarantor hereunder, under the Notes or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings imposed by any Governmental Authority, excluding, in the case of Administrative Agent, each Participant and each Lender, respectively, any taxes imposed by (i) the United States except United States federal gross income withholding taxes imposed as a result of a change in applicable law occurring after the date that such Administrative Agent, Participant and each Lender became a party to this Agreement or (ii) a Governmental Authority as a result of a connection or former connection (other than merely being a party to any Loan Documents, partici pating in the transactions contemplated therein, or enforcing rights thereunder) between Administrative Agent, such Participant, or such Lender and the jurisdiction imposing such tax, including any connection arising from Administrative Agent, such Participant, or such Lender being a citizen, domiciliary, or resident of such jurisdiction, being organized in such jurisdiction, or having a permanent establishment or fixed place of business therein (all such non-excluded taxes, levies, imposts, deductions, charges and withholdings being hereinafter referred to as “Taxes”).  If the Borrower or any Guarantor shall be required by law to withhold or deduct any Taxes from or in respect of any sum payable hereunder, under the Notes or under any other Loan Document to any Lender or Administrative Agent, (x) such sum payable shall be increased by an additional amount so that after making all required withholdings or deductions (including withholdings or deductions applicable to additional amo unts payable under this Section 3.04(a)) such Lender or Administrative Agent receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (y) such Borrower or any Guarantor shall make such withholdings or deductions, and (z) such Borrower or any Guarantor shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with applicable law.  Notwithstanding the foregoing, the Borrower or any Guarantor shall not be required to pay any such additional amounts to Administrative Agent or any Lender with respect to any Taxes or Other Taxes to the extent such Taxes or Other Taxes (i) are attributable to Administrative Agent’s or such Lender’s failure to comply with the requirements of Section 3.04(e) or Section 3.04(f) or (ii) in the case of an assignment (including under Section 14.08 and Section 14.10), participation, acqui sition or designation of a new applicable lending office by a Lender or an Administrative Agent, are United States federal withholding taxes imposed on amounts payable to such Lender or Administrative Agent at the time such Lender or Administrative Agent becomes a party to this Agreement, except to the extent that such Lender’s or Administrative Agent’s assignor was entitled, at the time of assignment, to receive additional amounts from the Borrower or any Guarantor with respect to such Tax pursuant to this paragraph or (iii) result from a change affecting the Administrative Agent or Lender at a time after the Administrative Agent or Lender has become the Administrative Agent or a Lender, respectively, other than a change in applicable law or regulation or the introduction of any law or regulation or a change in interpretation or administration of any law.

(b)

Other Taxes.  In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from and which relate directly to the execution, delivery or registration of, or otherwise with respect to, this Agreement, the Notes or any other Loan Document and all interest and penalties related thereto other than excluded from Taxes pursuant to Section 3.04(a)(i) and (ii) (hereinafter referred to as “Other Taxes”).

(c)

Indemnification.  The Borrower will indemnify Administrative Agent and each Lender that has complied with the requirements of Section 3.04(e) or Section 3.04(f), as the case may be, against, and reimburse each, within twenty (20) days of a receipt of written demand therefor, for the full amount of all Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any Governmental Authority on amounts payable to Administrative Agent or such Lender under this Section 3.04(c)) incurred or paid by such Lender or Administrative Agent (as the case may be), or any Affiliate of such Lender or Administrative Agent on or with respect to any payment by or on account of any obligation of the Borrower hereunder, and any penalties, interest, and reasonable out-of-pocket expenses paid to third parties arising therefrom or with res pect thereto.  For the avoidance of doubt, the Borrower shall not be required to indemnify a Lender or Administrative Agent pursuant to this Section 3.04(c) with respect to any Taxes in respect of which the Borrower would not be required to pay any additional amount pursuant to Section 3.04(a) if such Taxes were withheld or deducted by the Borrower.  A certificate as to any amount payable to any Person under this Section 3.04 submitted by such Person to the Borrower shall, absent manifest error, be final, conclusive and binding upon all parties hereto.

(d)

Receipts.  Within thirty (30) days after a request from the Administrative Agent, each Borrower or any Guarantor will furnish to the Administrative Agent the original or a certified copy of a receipt, if available, or other reasonably available documentation reasonably satisfactory to the Administrative Agent evidencing payment of such Taxes or Other Taxes (including in respect of payments of additional amounts) required to be paid by such Borrower or any Guarantor, as applicable, pursuant to this Section 3.04.  The Borrower will furnish to the Administrative Agent upon the Administrative Agent’s request an Officer’s Certificate stating that all Taxes and Other Taxes of which it is aware that are due have been paid and that no additional Taxes or Other Taxes of which it is aware are due.

(e)

Nonresident Certifications.  (1) Each Lender or Administrative Agent that is not a United States Person (as defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) shall deliver to the applicable Borrower or any Guarantor and the Administrative Agent on or prior to the Closing Date, or, in the case of a Person that becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof), on or prior to the date on which such Person becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof), a true and accurate IRS Form W-8BEN, W-8IMY (with the necessary attachments), W-8EXP, W-8ECI or any subsequent version thereof or successors thereto and such other documentation prescribed by applicable law executed in duplicate by a duly authorized officer of such Lender to the effect that such Lender is eligible as of such date to receive payments hereunder and under the Notes free and clear or at a reduced rate of United States federal withholding tax or, in the case of a Person that becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof), that such Lender is subject to United States federal withholding tax at a rate not in excess of the rate to which the assignor was subject as a result of a change in law, as described in Section 3.04(e)(ii)(B).  A Non-U.S. Lender shall not be required to deliver any form pursuant to this Section 3.04(e) that it is not legally able to deliver.

(ii)

Each Non-U.S. Lender further agrees to deliver to the Borrower or any Guarantor and the Administrative Agent from time to time a true and accurate certificate executed in duplicate by a duly authorized officer of such Lender before or promptly upon the occurrence of any event requiring a change in the most recent certificate previously delivered by it to the Borrower or any Guarantor and the Administrative Agent pursuant to this Section 3.04(e) (including upon the expiration, obsolescence or invalidity of such form, upon the designation of a new lending office and at such other times as may be necessary in the determination of the Borrower or any Guarantor and the Administrative Agent (each in the reasonable exercise of its discretion)).  Each certificate required to be delivered pursuant to this Section 3.04(e)(ii) shall certify as to one of the following:

(A)

that such Lender can receive payments hereunder and under the Notes free and clear or at a reduced rate of United States federal withholding tax (in which case the certificate shall be accompanied by two duly completed copies of IRS Form W-8BEN, W-8IMY (with the necessary attachments), W-8EXP or W-8ECI, as applicable (or any successor form));

(B)

that such Lender is no longer capable of receiving payments hereunder or under the Notes free and clear or at a reduced rate of United States federal withholding tax by reason of a change in law (including the Code or any applicable tax treaty) after the later of the Closing Date, or in the case of a Lender that becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof) after the date on which the Lender became a Lender (including pursuant to Section 14.08 and Section 14.10 hereof); or

(C)

that such Lender is not capable of receiving payments hereunder free and clear or at a reduced rate of United States federal withholding tax other than by reason of a change in law (including the Code or applicable tax treaty) after the later of the Closing Date, or in the case of a Lender that becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof) after the date on which the Lender became a Lender (including pursuant to Section 14.08 and Section 14.10 hereof).

(b)

Resident Certifications.  Each Lender or Administrative Agent that is a United States Person (as defined in Section 7701(a)(30) of the Code) and is not an “exempt recipient” (as such term is defined in Section 1.6049-4(c)(1)(ii) of the United States Treasury Regulations) shall deliver to the Borrower or any Guarantor and the Administrative Agent on or prior to the Closing Date, or, in the case of a Lender that becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof), on or prior to the date on which such Lender becomes a Lender (including pursuant to Section 14.08 and Section 14.10 hereof), two original copies of IRS Form W-8 or W-9 (or any successor forms), properly completed and duly executed by such Lender, and such other documentation reasonably requested by the B orrower, any Guarantor or the Administrative Agent.

(c)

Refunds and Tax Benefits.  If a Lender or Administrative Agent becomes aware that it is entitled to claim a refund from a Governmental Authority in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower or any Guarantor or with respect to which the Borrower or any Guarantor has paid additional amounts pursuant to Section 3.04(a), it shall make reasonable efforts to timely claim to such Governmental Authority for such refund at the Borrower’s or any Guarantor’s expense.  If a Lender or Administrative Agent actually receives a payment of a refund (including pursuant to a claim for refund made pursuant to the preceding sentence) in respect of any Tax or Other Tax as to which it has been indemnified by the Borrower or any Guarantor or with respect to the Borrower or any Guarantor has paid additional amount s pursuant to Section 3.04(a), it shall within 30 days from the date of such receipt pay over the amount of such refund to the Borrower or any Guarantor, net of all reasonable out-of-pocket expenses of such Lender or Administrative Agent and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower or any Guarantor, upon the request of such Lender or Administrative Agent, agrees to repay the amount paid over to the Borrower or any Guarantor (plus penalties, interest or other reasonable charges) to such Lender or Administrative Agent in the event such Lender or Administrative Agent is required to repay such refund to such Governmental Authority.

ARTICLE I
INTEREST

SECTION 1.1.  Interest on the Loans and Other Obligations.

(a)

Interest on Loans.  The Borrower agrees to pay interest on the unpaid principal amount of each Loan on each Interest Payment Date from the date of such Loan until such Loan is repaid in full at a rate equal to the Interest Rate for such Loan.  The Borrower shall pay accrued interest on the Loans in cash on each Interest Payment Date.  All computations of interest hereunder shall be made on the actual number of days elapsed over a year of, with respect to LIBOR Rate Loans, 360 days or, with respect to Alternate Base Rate Loans only, 365/366 days.

(b)

Default Interest.  So long as any Event of Default under Section 11.01(a) shall be continuing, the rate of interest applicable to the Loans then outstanding or due and owing and any other amount bearing interest hereunder shall each be increased by 2% per annum above the Interest Rate otherwise applicable to the applicable Loans.

(c)

Maximum Interest.  Notwithstanding anything to the contrary set forth in this Section 4.01(c), if at any time until payment in full of the Loans, the interest rate payable on any Loans exceeds the highest rate of interest permissible under any law which a court of competent jurisdiction shall deem applicable hereto (the “Highest Lawful Rate”), then in such event and so long as the Highest Lawful Rate would be so exceeded, the rate of interest payable on such Loans shall be equal to the Highest Lawful Rate.  Thereafter, the interest rate payable on such Loans shall be the applicable interest rate pursuant to paragraphs (a) and (b) above unless and until such rate again exceeds the Highest Lawful Rate, in which event this paragraph shall again apply.  In no event shall the total interest received by any Len der for any Loans pursuant to the terms hereof exceed the amount which it could lawfully have received for such Loans had the interest due hereunder for such Loans been calculated for the full term thereof at the Highest Lawful Rate.  Interest on the Highest Lawful Rate shall be calculated at a daily rate equal to the Highest Lawful Rate divided by the number of days in the year in which such calculation is made.  In the event that a court of competent jurisdiction, notwithstanding the provisions of this Section 4.01(c), shall make a determination that a Lender has received interest hereunder or under any of the Loan Documents in excess of the Highest Lawful Rate, such Lender shall, to the extent permitted by Applicable Law, promptly apply such excess first to any interest due or accrued and not yet paid under the Loans, then to the outstanding principal of the Loans, then to other unpaid Obligations and thereafter shall refund any excess to the Borrower or as a court of competent juris diction may otherwise order.

SECTION 1.2.  Intentionally Omitted.  

SECTION 1.3.  Break Funding Payments.  In the event of the payment of any principal of any LIBOR Rate Loan other than on the last day of the Interest Accrual Period applicable thereto (including as a result of an Event of Default), or the failure to borrow or prepay any Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate each applicable Lender for the loss, cost and expense (excluding in any event any Applicable Margin or other lost profit) attributable to such event.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 1.4.  Change in Law; Illegality.

(a)

If the adoption or implementation of, or any change in (or the interpretation, administration or application of) any Applicable Law shall, in each case after the date hereof, (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBOR Rate) or (ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or LIBOR Rate Loans made by such Lender; the result of any of the foregoing shall be to increase the cost to such Lender of maintaining any LIBOR Rate Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional a mount or amounts as will compensate such Lender for such additional costs incurred to the extent that such Lender reasonably determines that such increase in cost be allocable to the existence of such Lender’s LIBOR Rate Loans.

(b)

If any Lender reasonably determines that the introduction of or any change in any Applicable Law regarding capital requirements, in each case after the date hereof, has or would have the effect of reducing the rate of return on such Lender’s capital as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender could have achieved but for such change in the Applicable Law (taking into consideration such Lender’s policies with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for any such reduction suffered to the extent that such Lender reasonably determines that such additional amounts are allocable to the existence of such Lender’s Loans.

(c)

A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender as specified in paragraph (a) or (b) of this Section 4.04 shall be delivered to the Borrower and shall be binding and conclusive for all purposes, so long as it reflects the basis for the calculation of the amounts set forth therein and does not contain any manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten days after receipt thereof.  Notwithstanding the foregoing, (i) the applicable Lender shall take such actions (including changing the office of location of the funding of the Loans) that the Borrower may reasonably request in order to reduce the amounts payable under Sections 4.04(a) or (b), provided that the Borrower s hall reimburse such Lender for any costs incurred by such Lender in doing so to the extent that such Lender reasonably determines that such costs are allocable to the Borrower with respect to the existent of such Lender’s Loans or commitment to lend hereunder and provided further that such Lender shall only be required to take such actions if it determines in good faith that such actions would not be disadvantageous to it, and (ii) the Borrower shall not be required to compensate a Lender under Sections 4.04(a) and (b) for any costs or additional amounts arising more than 180 days prior to the date that such Lender notifies the Borrower of the event giving rise to such costs and amounts of such Lender’s intention to claim compensation therefor and, if the event giving rise to such increased costs and amounts is retroactive, then the 180-day period referred to in this clause (ii) shall be extended to include the period of retroactive effect therefor.

(d)

Notwithstanding anything to the contrary contained herein, if the adoption or implementation of, or any change in, any Applicable Law shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to agree to make or to continue to fund or maintain any LIBOR Rate Loan, then, unless that Lender is able to make or to continue to fund or to maintain such  LIBOR Rate Loan at another branch or office of that Lender without, in that Lender’s opinion, adversely affecting it or its LIBOR Rate Loans or the income obtained therefrom, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) the obligation of such Lender to make, to continue to fund or maintain LIBOR Rate Loans shall terminate and (ii) the Borrower shall forthwith prepay in full, with out any premium or penalty, all outstanding LIBOR Rate Loans owing by the Borrower to such Lender, together with interest accrued thereon and any amounts due pursuant to Section 4.03.

ARTICLE II
CONDITIONS TO LOANS

SECTION 2.1.  Conditions Precedent to the Loans.  The obligation of each Lender to make the Loans requested to be made by it on the Closing Date, shall be subject to the satisfaction, or waiver by the Administrative Agent, of all of the following conditions precedent:

(a)

Authority.  The Administrative Agent shall have received certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the authorization for the execution, delivery and performance of each Loan Document by a Credit Party and for the consummation of the transactions contemplated thereby.  All certificates shall state that the resolutions or other information referred to in such certificates have not been amended, modified, revoked or rescinded as of the Closing Date.

(b)

Loan Documents.  The Administrative Agent shall have received, on the Closing Date, counterparts of each of the following documents duly executed and delivered by each party thereto, and in full force and effect and reasonably satisfactory to the Administrative Agent:

(i)

this Agreement;

(ii)

the Notes, if any;

(iii)

the Security Documents;

(iv)

the Intercreditor Agreement;

(v)

such corporate resolutions, certificates and other documents as the Administrative Agent reasonably requests; and

(vi)

each other Loan Document, in each case duly executed and delivered by the parties thereto and dated no later than the Closing Date, except for those Loan Documents that are dated prior to the Closing Date and have been delivered prior to the Closing Date to the Administrative Agent by the Credit Parties.

(c)

Capital Stock; Perfection of Liens.  All of the Capital Stock of the Borrower shall be owned by the Parent, and all Capital Stock of the Borrower’s Subsidiaries shall be owned by the Borrower as described on Schedule 6.01(e), in each case free and clear of any Lien other than Permitted Encumbrances.  The Administrative Agent, on behalf of the Secured Creditors, shall have a perfected lien and security interest in the Collateral (subject only to Permitted Encumbrances); all filings, recordations and searches necessary or desirable in connection with such liens and security interests shall have been duly made or arranged for; and all filing and recording fees and taxes shall have been duly paid.

(d)

No Material Adverse Effect.  There shall not have occurred any event, circumstance, change or condition since December 31, 2006, which could reasonably be expected to have a Material Adverse Effect.

(e)

Consents, Etc.  Each Credit Party shall have received all material consents and authorizations required pursuant to any Material Contract with any other Person and shall have obtained all material Permits of, or approvals from, and effected all notices to and filings with, any Governmental Authority or SRO as may be necessary to allow such Credit Party lawfully (A) to execute, deliver and perform, in all material respects, their respective obligations under the Loan Documents to which each of them is, or shall be, a party and each other agreement or instrument to be executed and delivered by each of them pursuant thereto or in connection therewith, (B) consummate the transactions contemplated hereunder and under the other Loan Documents and (C) create and perfect the Liens on the Collateral to be owned by each of them to the extent, in the manner and f or the purpose contemplated by the Loan Documents.  Each Credit Party shall have received all shareholder, Governmental and material third-party consents and approvals necessary in connection with the transactions contemplated by the Loan Documents, and any applicable waiting period shall have expired without any action being taken by any Governmental Authority or SRO that could restrain, prevent or impose any material adverse conditions on such Credit Party or such transactions or that could seek to restrain or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could have such effect.  The Credit Parties shall have received the approval of the NYSE, as applicable, to each of the transactions contemplated herein.

(f)

Solvency.  Immediately prior to the incurrence of the Loans on the Closing Date, and after giving effect to such Loans, and use of the proceeds of the Loans, the Credit Parties, taken as a whole, shall be Solvent and the Administrative Agent shall have received a solvency certificate from the chief financial officer of the Borrower, on behalf of the Credit Parties (and not in such officer’s individual capacity), dated the Closing Date, in a form reasonably satisfactory to the Administrative Agent.

(g)

Opinions of Borrower’s Counsel.  The Lenders shall have received (i) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Borrower and the Guarantors, in substantially the form of Exhibit E-1, (ii) the opinion of Borden Ladner Gervais LLP, special counsel to the Parent, in substantially the form of Exhibit E-2 and (iii) the opinion of  Dennis McNamara, General Counsel of the Borrower, in substantially the form of Exhibit E-3.

(h)

Collateral Information.  The Administrative Agent shall have received complete and accurate information from each Credit Party granting a security interest to Administrative Agent or any Lender with respect to the name and the location of the principal place of business and chief executive office for such Credit Party;

(i)

Good Standing Certificates.  The Administrative Agent shall have received, on the Closing Date, governmental certificates, dated the most recent practicable date prior to the Closing Date, showing that each Credit Party is organized and in good standing in the jurisdiction of its organization, and is qualified as a foreign corporation and in good standing in all other jurisdictions in which it is qualified to transact business except where the failure to so qualify could not reasonably be expected to have Material Adverse Effect.

(j)

Organizational Documents.  The Administrative Agent shall have received, on the Closing Date, a copy of the certificate of incorporation or certificate of formation, as applicable, and all amendments thereto of each Credit Party, certified as of a recent date by the appropriate government official of the jurisdiction of its organization, and copies of each Credit Party’s by-laws or limited liability company agreement, as applicable, certified by the Secretary, Assistant Secretary or managing member, as applicable, of such Credit Party as true and correct as of the Closing Date.

(k)

Financial Statements.  The Administrative Agent shall have received the 2006 Financial Statements, all financial statements and projections described in Section 6.01(g)(ii) and Section 7.01(c) and previously provided to the administrative agent under the terms of the Existing Credit Agreement, in form and substance reasonably satisfactory to the Administrative Agent.

(l)

Certificates.  (2) The Administrative Agent shall have received, on the Closing Date, certificates of the Secretary, Assistant Secretary or managing member of each Credit Party, dated the Closing Date, as to the incumbency and signatures of its officers executing this Agreement and each other Loan Document to which such Credit Party is a party and any other certificate or other document to be delivered pursuant hereto or thereto, together with evidence of the incumbency of such Secretary, Assistant Secretary or managing member.

(iii)

The Administrative Agent shall have received, on the Closing Date, the certificate of a Senior Officer of each Credit Party, dated the Closing Date, stating that to the knowledge of such officer and on behalf of such Credit Party (not in such officer’s individual capacity) all of the representations and warranties of such Credit Party contained herein or in any of the other Loan Documents are true and correct in all material respects on and as of the Closing Date as if made on such date, that no breach of any covenant contained in Articles VIII, IX or X has occurred or would result from the closing of the transaction contemplated hereunder and that all of the conditions set forth in this Section 5.01(l)(ii) have been satisfied on such date (or shall, to the extent permitted therein, be satisfied substantiall y simultaneously with the incurrence of the Loans on the Closing Date).

(b)

Representations and Warranties.  As of the Closing Date, all of the representations and warranties of any Credit Party contained in Article VI and in the other Loan Documents shall be true and correct in all material respects (except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(c)

No Defaults.  As of the Closing Date, no Event of Default or Default shall have occurred and be continuing or would result from the execution and delivery of, or the performance under, the Loan Documents, or making the requested Loan or the application of the proceeds therefrom.

ARTICLE I
REPRESENTATIONS AND WARRANTIES

SECTION 1.1.  Representations and Warranties.  In order to induce the Lenders to enter into this Agreement and to make the Loans, each Credit Party hereby represents and warrants as follows:

(a)

Organization, Good Standing, Etc.  Each Credit Party (i) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated, to make the borrowings hereunder (in the case of the Borrower), to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary for its business as currently conducted.

(b)

Authorization, Etc.  The execution, delivery and performance by each Credit Party of each Loan Document to which it is or will be a party and the transactions contemplated thereunder, (i) have been or, with respect to such Credit Parties formed or acquired hereafter, will be, duly authorized by all necessary corporate, limited liability company or partnership action, as applicable, (ii) do not and will not contravene its Governing Documents, (iii) do not and will not violate any Requirements of Law or any Material Contract of such Credit Party binding on or otherwise affecting it, any of its Subsidiaries or any of its properties or its Subsidiaries’ properties except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and (iv) do not and will not result in or require the creation of any Lien (other than Permitted Encumbrances) upon or with respect to any of its properties or its Subsidiaries’ properties.  Each Credit Party has the requisite corporate, limited liability company or partnership power and authority, as applicable, to execute, deliver and perform each of the Loan Documents to which it is a party.

(c)

Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority that has not been obtained is required in connection with the due execution, delivery and performance by each Credit Party of each Loan Document to which it is a party.

(d)

Enforceability of Loan Documents.  Each of the Loan Documents to which a Credit Party is a party has been duly executed and delivered by such Credit Party and constitutes the legal, valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, or by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(e)

Subsidiaries.  Schedule 6.01(e) is a complete and correct description of the name, jurisdiction of organization and ownership of the outstanding Capital Stock of each Subsidiary of the Borrower in existence on the date hereof.  All of the issued and outstanding shares or units of Capital Stock of such Subsidiaries have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights.  Except as indicated on such Schedule, all such Capital Stock is owned by the Borrower or one or more of its Wholly-Owned Subsidiaries.

(f)

Litigation.  Except as set forth in Schedule 6.01(f), there is no pending or, to the knowledge of such Credit Party, threatened action, suit or proceeding affecting any Credit Party, its Subsidiaries or any of their respective properties or assets before any court or other Governmental Authority or any arbitrator that, individually or in the aggregate, (i) could reasonably be expected to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Loans evidenced hereby and by the other Loan Documents.

(g)

Financial Condition; Material Adverse Effect.

(i)

The 2006 Financial Statements, copies of which have been delivered to the Administrative Agent, and any financial statements delivered pursuant to Section 7.01, fairly present, in all material respects, the consolidated financial condition of the Parent as at the respective dates thereof and the consolidated results of operations of the Parent and the Borrower and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP (subject to normal year-end adjustments and absence of footnotes in the case of any quarterly statement).

(ii)

The Borrower has heretofore furnished to the Administrative Agent under this Agreement (A) projected balance sheets, income statements and statements of cash flows of the Parent, for the period from January 1, 2007 through December 31, 2007, and (B) projected annual balance sheets, income statements and statements of cash flows of the Parent for each subsequent Fiscal Year ending on or prior to December 31, 2011.  Such projections are based upon assumptions that are reasonably believed by the Parent to have been reasonable at the time made (it being understood that any such forecasts or projections are subject to significant uncertainties and contingencies, many of which are beyond the Credit Parties’ control, that no assurance can be given that any such forecasts or projections will be realized and that actual resu lts may differ from any such forecasts or projections and such differences may be material) and have been prepared in good faith by the Parent.

(iii)

Since December 31, 2006, no event or development has occurred and is continuing that has had or could reasonably be expected to have a Material Adverse Effect.

(h)

Compliance with Law, Etc.  No Credit Party or any Subsidiary of any Credit Party is in violation of its Governing Documents, any Requirements of Law, any judgment or order of any Governmental Authority applicable to it or any of its property or assets, or any material term of any Material Contract binding on it or any of its properties except for any such violations which, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect.

(i)

ERISA.  Neither the Borrower nor any ERISA Affiliate has (i) any “accumulated funding deficiency” (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, with respect to any Benefit Plan, (ii) failed to make any contribution or payment to any Benefit Plan which has resulted, or could reasonably be expected to result, in the imposition of a Lien or the posting of a bond or other security under Section 302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred, or is reasonably likely to incur, any material liability under Title IV of ERISA (other than a liability to the PBGC for premiums under Section 4007 of ERISA) or (iv) violated any provision of ERISA that individually or in the aggregate can reasonably by expected to result in a material liability to the Borrower and its Subsi diaries taken as a whole.  Neither the Borrower nor any ERISA Affiliate is obligated to contribute to a Multiemployer Plan.

(j)

Taxes, Etc.  All Federal, state, provincial and material local tax returns and other material reports required by Applicable Law to be filed by any Credit Party or any Subsidiary of a Credit Party have been filed, or extensions have been obtained, except to the extent subject to a Permitted Protest, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon such Credit Party and any Subsidiary of a Credit Party and upon its properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable; provided, however, that such taxes, assessments or governmental charges referred to above need not be paid to the extent such taxes, assessments or governmental charges are being contested pursuant to a Permitted Protest or, in the aggregate, do not exceed $300,000 at any time.

(k)

Margin Regulations.  No proceeds of any Loan will be used for any purpose that violates, or which is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System of the United States, as in effect from time to time.  

(l)

Permits, Etc.  Such Credit Party and any Subsidiary of a Credit Party has, and is in compliance with, all material permits, licenses, authorizations, approvals, entitlements and accreditations (collectively, the “Permits”) required for such Person lawfully to own, lease, manage or operate each business currently owned, leased, managed or operated by such Person, except where the failure to have or to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any Permit, and there is no claim that any thereof is not in full force and effect, except, in each case, with respect to any Perm its the loss of which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(m)

Properties.  Such Credit Party and any Subsidiary of a Credit Party has good and marketable title to, or valid leasehold interests (in the case of leasehold interests in real or personal property) in, all property and assets (other than intellectual property) material to its business, free and clear of all Liens except Permitted Encumbrances.  Such properties are in good working order and condition, ordinary wear and tear excepted, except to the extent that the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Such Credit Party owns no real property other than the properties listed on Schedule 6.01(m).

(n)

Real Estate.  As of the Closing Date, Schedule 6.01(n) contains a true, accurate and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) affecting each Real Estate Asset of any Credit Party, regardless of whether such Credit Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment.  Each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect and no Credit Party has any knowledge of any default that has occurred and is continuing thereunder, and each such agreement constitutes the legally valid and binding obligation of each applicable Credit Party, enforce able against such Credit Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.

(o)

Full Disclosure.  None of the reports, financial statements, certificates or other written information furnished by or on behalf of a Credit Party to the Administrative Agent under this Agreement or any other Loan Document in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in the light of the circumstances under which it was made, not materially misleading; provided that to the extent any such reports, financial statements, certificates or other written information therein was based upon or constitutes a forecast or projection, such Credit Party represents only that the relevant Credit Party acted in good faith and utilized assumptions believed by it to be reasonable at the time made (it being understood that any such forecasts or projections are subject to significant uncertainties and contingencies, many of which are beyond the Credit Parties’ control, that no assurance can be given that any such forecasts or projections will be realized and that actual results may differ from any such forecasts or projections and such differences may be material).  As of the Closing Date, there are no contingent liabilities or obligations that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(p)

Environmental Matters.  Except as set forth on Schedule 6.01(p) and except for such events that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect:  (i) the operations of each Credit Party and any Subsidiary of a Credit Party have at all times been in compliance with applicable Environmental Laws, (ii) there has been no Release on, in, at, to, from or under any of the properties currently or formerly owned or operated by any Credit Party or any Subsidiary of a Credit Party or a predecessor in interest that could reasonably be expected to result in any Environmental Liabilities and Costs to any Credit Party or any Subsidiary of a Credit Party, (iii) no Environmental Action has been asserted against any Credit Party or any Subsidiary of a Credit Party or any predecessor in inte rest which is unresolved, nor are there any threatened or pending Environmental Action against a Credit Party or any Subsidiary of a Credit Party or any predecessor in interest, (iv) no Environmental Action has been asserted against any facilities that may have received Hazardous Materials generated by a Credit Party or any Subsidiary of a Credit Party or any predecessor in interest, (v) none of the Credit Parties or any Subsidiary of a Credit Party is subject to any order, decree, injunction or other arrangement with any Governmental Authority or any indemnity or other agreement with any third party relating to any Environmental Law; (vi) there are no other circumstances or conditions involving any Credit Party or any Subsidiary of a Credit Party that could reasonably be expected to result in any Environmental Actions or Environmental Liabilities and Costs including any restriction on the ownership, use, or transfer of any property in connection with any Environmental Law; and (vii) the Credit Parties and any Subsidiary of a Credit Party have delivered to the Administrative Agent copies of all environmental reports, studies, assessments, sampling data and other environmental information in its possession relating to the Credit Parties and any Subsidiary of a Credit Party and their current and former properties and operations.

(q)

Insurance.  Each Credit Party and any Subsidiary of a Credit Party keeps its property adequately insured and maintains (i) insurance to such extent and against such risks, including fire, as is customary with companies in the same or similar businesses, (ii) workmen’s compensation insurance in the amount required by applicable law, (iii) public liability insurance, which shall include product liability insurance, but only to the extent and in the amount customary with companies in the same or similar business against claims for personal injury or death on properties owned, occupied or controlled by it and (iv) such other insurance as may be required by law (including against larceny, embezzlement or other criminal misappropriation).  Schedule 6.01(q) sets forth a list of all insurance maintained by such Credit Party or any Subsidiary of a Credit Party on the Closing Date.

(r)

Solvency.  Each Credit Party and any Subsidiary of a Credit Party, taken as a whole, is and, after giving effect to each of the transactions contemplated by the Loan Documents, each of the Credit Parties or any Subsidiary of a Credit Party, taken as a whole, will be, Solvent.

(s)

Location of Bank Accounts.  Schedule 6.01(s) sets forth a complete and accurate list as of the Closing Date of all Deposit Accounts and Securities Accounts of the Credit Parties, together with a description thereof (i.e., the bank or broker dealer at which such Deposit Account or Securities Account is maintained and the account number and the purpose thereof).

(t)

Intellectual Property.  Schedule 6.01(t) sets forth a true and complete list of all Registered Intellectual Property owned by the Credit Parties and their Subsidiaries, indicating for each registered item the registration or application number and the applicable filing jurisdiction.  The Credit Parties exclusively own (beneficially and of record, where applicable) all right, title and interest in and to all material Registered Intellectual Property set forth on Schedule 6.01(t) free and clear of all Liens other than Permitted Encumbrances, exclusive licenses and non-exclusive licenses granted in the ordinary course of business.  Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Registered Intellectual Property set forth on Schedule 6.01(t) is not subject to any outstanding order, judgment or decree adversely affecting the Credit Parties’ use thereof or their rights thereto and, is valid, subsisting and, to the knowledge of the Credit Parties, enforceable; (ii) to the knowledge of the Credit Parties, the conduct of the Credit Parties does not infringe or otherwise violate the Intellectual Property rights of any third party in any material respect; (iii) the Credit Parties have sufficient rights to use all material Intellectual Property used in their business as presently conducted; and (iv) there is no litigation, opposition, cancellation, proceeding, objection or claim pending, or, to the knowledge of the Credit Parties, asserted or threatened against the Credit Parties concerning the ownership, validity, registerability, enforceability, infringement or use of, or licensed right to use, any material Intellectual Property.

(u)

Material Contracts.  Set forth in on Schedule 6.01(u) is a complete and accurate list as of the Closing Date of all Material Contracts to which any Credit Party or any Subsidiary of a Credit Party is a party showing the parties and subject matter thereof and amendments and modifications thereto.

(v)

Investment Company Acts.  Each Credit Party either: (i) is not, or is not controlled by, an “investment company”, or (ii) is not required to register as an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended.

(w)

Employee and Labor Matters.  As of the Closing Date there is (i) no unfair labor practice complaint pending or, to the best of any Credit Party’s or any Subsidiary of a Credit Party’s knowledge, threatened against any Credit Party or any Subsidiary of a Credit Party before any Governmental Authority and no grievance or arbitration proceeding pending or, to the best of such Credit Party’s or any Subsidiary of such Credit Party’s knowledge, threatened against any Credit Party or any Subsidiary of a Credit Party which arises out of or under any collective bargaining agreement, and (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or, to the best of such Credit Party’s or any Subsidiary of a Credit Party’s knowledge, threatened against any Credit Party or any Subsidiary of a Credit P arty that, in the case of (i) or (ii) could reasonably be expected to have a Material Adverse Effect.

(x)

Security Interests.  Each Security Document creates in favor of the Administrative Agent a legal, valid and enforceable security interest in the Collateral purported to be secured thereby.  Upon the filing of the UCC-1 financing statements and the recording of the Collateral Assignments for security referred to in the Security Agreements in the United States Patent and Trademark Office and the United States Copyright Office, such security interests in and Liens on the Collateral granted thereby shall be perfected security interests, in each case to the extent a Lien thereon can be perfected by filing pursuant to the UCC or by the recording of such Collateral Assignments in the United States Patent and Trademark Office or the United States Copyright Office, and no further recordings or filings are or will be required in connection with the creation, per fection or enforcement of such security interests and Liens, other than (i) the filing of continuation statements or financing change statements in accordance with Applicable Law, (ii) the recording of the Collateral Assignments for security pursuant to the Security Agreement in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, with respect to after-acquired United States patent and trademark applications and registrations and United States copyrights and additional filings and/or other actions as may be required to perfect the Administrative Agent’s lien in Registered Intellectual Property under the laws of a jurisdiction outside the United States and (iii) additional filings if the Borrower or any Guarantor changes its name, identity or organizational structure or the jurisdiction in which the Borrower or any Guarantor is organized.

(y)

Foreign Assets Control Regulations, Etc.  Neither the execution and delivery of, nor the borrowing under any Loan Document, nor the use of proceeds from any Loan will violate (i) the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto, (ii) the Patriot Act or (iii) Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism).  Without limiting the foregoing, none of the Credit Parties is or will become a “blocked person” as described in Section 1 of such Exec utive Order or engages or will engage in any dealings or transactions with, or is otherwise associated with, any such blocked person.

ARTICLE II
REPORTING COVENANTS

Each Credit Party covenants and agrees that, from and after the date hereof (except as otherwise provided herein, or unless the Required Lenders have given their prior written consent) until all amounts owing hereunder or under any Security Document or in connection herewith or therewith have been paid in full, that:

SECTION 2.1.  Financial Statements.  Each Credit Party (i) shall keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which true and correct entries shall be made of all material financial transactions and the assets and business of the Borrower and each such Subsidiary and (ii) shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of consolidated financial statements in conformity with GAAP, and each of the financial statements described below shall be prepared from such system and records.  The Borrower shall deliver or cause to be delivered to the Administrative Agent:

(a)

Monthly Reports.  Within thirty (30) days after the end of each Fiscal Month, the Borrower shall deliver to the Administrative Agent the following information from its Financial and Operational Combined Uniform Single Report (the “FOCUS Report”) on Form X-17A-5 filed with the SEC pursuant to Rule 15c3-1 of the SEC under the Securities Exchange Act for such month:  (i) Minimum Net Capital (line 3760 on the FOCUS Report), (ii) Excess Net Capital (line 3910 on the FOCUS Report) and (iii) Monthly Profitability (line 4211 on the FOCUS Report).

(b)

Quarterly Reports.  As soon as available, but in any event within forty-five (45) days after the end of each Fiscal Quarter in each Fiscal Year (excluding the last Fiscal Quarter of each Fiscal Year), (i) the quarterly report of Parent filed with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act, including the unaudited consolidated balance sheets of the Parent and its Subsidiaries as at the end of such period, the related unaudited consolidated statements of income and cash flow of the Parent and its Subsidiaries and the related unaudited consolidated statements of income for such Fiscal Quarter, (ii) a certificate of a Responsible Officer of the Parent stating that such unaudited financial information fairly presents, in all material respects, the consolidated financial position of the Par ent and its Subsidiaries as at the dates indicated and the results of its operations and cash flow for the Fiscal Quarters indicated, such consolidated balance sheets and consolidated statements of income and cash flow in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes and (iii) a copy of the quarterly updated litigation report for such Fiscal Quarter.

(c)

Annual Reports and Insurance Information.  As soon as available, but in any event within one hundred twenty (120) days after the end of each Fiscal Year, (i) the annual report of Parent filed with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act, including the audited consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year, the related audited consolidated statements of income, stockholders’ equity and cash flow of the Parent and its Subsidiaries and the related unaudited consolidated statements of income of the Parent and its Subsidiaries for such Fiscal Year, (ii) a report on such financial statements of PricewaterhouseCoopers LLP or other independent public accountants of nationally recognized standing or other independent certified public ac countants reasonably acceptable to the Administrative Agent, which report shall be unqualified in all material respects and (iii) an updated list of all insurance maintained by the Credit Parties and their Subsidiaries as of the end of such Fiscal Year.

(d)

Officer’s Certificate; Etc.  Together with each delivery of any financial statement pursuant to subsections (b) and (c) of this Section 7.01, (i) an Officer’s Certificate substantially in the form of Exhibit F attached hereto and made a part hereof, stating that a Responsible Officer signatory thereto has reviewed the terms of the Loan Documents, and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and consolidated financial condition of the Parent and its Subsidiaries during the accounting period covered by such financial statements, that such review has not disclosed the existence during or at the end of such accounting period, and that such officer does not have knowledge of the existence as at the date of such Officer’s Certificate, of any condition or event which constitutes an Event of Default or a continuing Default, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Parent and its Subsidiaries have taken, are taking and propose to take with respect thereto (the “Officer’s Certificate”) and (ii) a certificate substantially in the form of Exhibit G attached hereto and made a part hereof (the “Compliance Certificate”), signed by the Parent’s chief financial officer or controller, setting forth calculations (with such specificity as the Administrative Agent may reasonably request) for the period then ended which demonstrate compliance, when applicable, with the provisions of Article IX and Article X during such period.

(e)

Budgets; Business Plans; Financial Projections.  As soon as practicable and in any event not later than 90 days after the beginning of each Fiscal Year of the Parent or financial forecast, prepared in accordance with the Parent’s normal accounting procedures applied on a consistent basis, for the two succeeding Fiscal Years prior to the Maturity Date, including (A) a forecasted consolidated balance sheet, and the related consolidated and statements of income and cash flows of the Parent and its Subsidiaries for and as of the end of such Fiscal Year and (B) the amount of forecasted Capital Expenditures for such Fiscal Year.

SECTION 2.2.  Other Financial Information.  Each Credit Party shall deliver to Administrative Agent any Credit Party’s such other information, with respect to (i) the Collateral or (ii) any Credit Party’s business, financial condition, results of operations, properties, projections, business or business prospects as Administrative Agent may, from time to time, reasonably request.  Each of the Credit Parties hereby authorizes Administrative Agent and its representatives to communicate directly with the accountants so long as a Responsible Officer of such Credit Party participates in such communication and authorizes the accountants to disclose to Administrative Agent, each Lender and their respective representatives any and all financial statements and other financial information, including copies of any fi nal management letter, that such accountants may have with respect to the Collateral or such Credit Party’s financial condition, results of operations, properties, projections, business and business prospects.  The Administrative Agent and such representatives shall treat any non-public information so obtained as confidential.

SECTION 2.3.  Defaults, Events of Default.  Promptly upon any Responsible Officer obtaining knowledge (i) of any condition or event which constitutes an Event of Default or Default, the Borrower shall deliver to the Administrative Agent an Officer’s Certificate specifying (A) the nature and period of existence of any such claimed default, Event of Default, Default, condition or event, (B) the notice given or action taken by such Person in connection therewith and (C) what action such Credit Party has taken, is and proposes to take with respect thereto.

SECTION 2.4.Lawsuits.  (i) Promptly upon any Responsible Officer obtaining knowledge of the institution of, or written threat of, (A) any action, suit, proceeding or arbitration against or affecting such Credit Party or any asset of such Credit Party not previously disclosed pursuant to Schedule 6.01(f), which action, suit, proceeding or arbitration could reasonably be expected to have a Material Adverse Effect, (B) any investigation or proceeding before or by any Governmental Authority, the effect of which could reasonably be expected to materially limit, prohibit or restrict the manner in which such Credit Party currently conducts its business, (C) any Forfeiture Proceeding which could reasonably be expected to have a Material Adverse Effect, or (D) any material Condemnation or Condemnation p roceeding, such Credit Party shall give written notice thereof to the Administrative Agent and provide such other information reasonably requested by the Administrative Agent as may be reasonably available to enable the Administrative Agent to evaluate such matters except, in each case, where the same is fully covered by insurance (other than applicable deductible), and (ii) in addition to the requirements set forth in clause (i) of this Section 7.04, such Credit Party upon request of the Administrative Agent, shall promptly give written notice of the status of any action, suit, proceeding, governmental investigation or arbitration covered by a report delivered pursuant to clause (i) above and provide such other information as may be reasonably requested by the Administrative Agent and reasonably available to such Credit Party to enable the Administrative Agent to evaluate such matters.

SECTION 2.5.  Insurance.  As soon as practicable and in any event within ten (10) Business Days of any cancellation without replacement thereof of any material insurance coverage set forth on the most recent schedule delivered pursuant to Section 6.01(q) or Section 7.01(c), as applicable, the Borrower shall deliver to the Administrative Agent notice of such cancellation.

SECTION 2.6.  Environmental Notices.  The Borrower shall, and shall cause the relevant Credit Party to, notify the Administrative Agent, in writing, promptly, and in any event within ten (10) Business Days after such Credit Party’s learning thereof, of any:  (i) notice or claim to the effect that such Credit Party or any of its Subsidiaries is or may be liable to any Person as a result of the Release or threatened Release of any Hazardous Material; (ii) investigation by any Governmental Authority of any Credit Party or any of its Subsidiaries evaluating whether any Remedial Action is needed to respond to the Release or threatened Release of any Hazardous Material; (iii) notice that any Property of such Credit Party or any of its Subsidiaries is subject to an Environmental Lien; (iv) any material violation of Environmental Laws by such Credit Party or any of its Subsidiaries or awareness by such Credit Party of a condition which might reasonably result in a material violation of any Environmental Law by such Credit Party or any of its Subsidiaries; (v) commencement or written threat of any judicial or administrative proceeding alleging a material violation of any Environmental Law by such Credit Party or any of its Subsidiaries; (vi) any proposed acquisition of stock, assets, real estate or leasing of property, or any other action by such Credit Party or any of its Subsidiaries that could subject such Credit Party or such Subsidiary to Environmental Liabilities and Costs; or (vii) document provided to a Governmental Authority concerning any Release of a Hazardous Material in excess of any reportable quantity from or onto property owned or operated by such Credit Party or any of its Subsidiaries or the incurrence of such obligation pursuant to any Environmental Law or any obligation to take any Remedial Action to abate any Release.  For purposes of clauses (i), (ii), (iii) and (iv), notice shall include any other written communications given to an agent or employee of the Borrower or such Credit Party with direct or indirect supervisory responsibility with respect to the activity, if any, which is the subject of such communication.  With respect to clauses (i) through (vii) above, such notice shall be required only if (A) the liability or potential liability, or with respect to clause (vii), the cost or potential cost of compliance, which is the subject matter of the notice is reasonably likely to exceed $6,000,000, or if (B) such liability or potential liability or cost of compliance when added to other liabilities of such Credit Party and its Subsidiaries of the kind referred to in clauses (i) through (vi) above is reasonably likely to exceed $12,000,000.

SECTION 2.7.  Labor Matters.  The Borrower shall, and shall cause the relevant Credit Party to, notify the Administrative Agent in writing, promptly, but in any event with ten (10) Business Days after learning thereof, of (i) any material labor dispute to which any Credit Party could reasonably be likely to become a party, any actual or threatened strikes, lockouts or other disputes relating to such Credit Party’s plants and other facilities and (ii) any material liability incurred with respect to the closing of any plant or other facility of such Credit Party.

SECTION 2.8.  Other Information.  Promptly upon receiving a request therefor from the Administrative Agent, the Borrower shall, and shall cause the relevant Credit Party to, prepare and deliver to the Administrative Agent such other information with respect to such Credit Party or the Collateral, including, without limitation, schedules identifying and describing the Collateral and any Dispositions thereof, as from time to time may be reasonably requested by the Administrative Agent.

ARTICLE III
AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Required Lenders have given their prior written consent) until all amounts owing hereunder or under any Security Document or in connection herewith or therewith have been paid in full, that:

SECTION 3.1.  Compliance with Laws and Contractual Obligations.  Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law (including with respect to the licenses, approvals, certificates, permits, franchises, notices, registrations and other governmental authorizations necessary to the ownership of its respective properties or to the conduct of its respective business, antitrust laws or Environmental Laws and laws with respect to social security and pension funds obligations) and all Material Contracts obligations, except, in each case, where the failures to do so, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.2.  Payment of Taxes and Claims.  Each Credit Party shall, and shall cause each of its Subsidiaries to, pay (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property, and (b) all claims (including claims for labor, services, materials and supplies) for sums material in the aggregate to such Credit Party which have become due and payable and which by law have or may become a Lien upon any of such Credit Party’s properties or assets, in each case prior to the time when any penalty or fine will be incurred by the Credit Party with respect thereto, except for (i) such taxes, assessments, other governmental charges and claims that are being contested in a Permitted Protest or (ii)  to the extent that the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.3.  Maintenance of Insurance.  Each Credit Party shall maintain, and cause each of its Subsidiaries to maintain (either in the name of such Credit Party or in such Subsidiary’s own name), insurance with financially sound and reputable insurance companies or associations with respect to their properties and business, in such amounts and covering such risks as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated.  All property policies of the Credit Parties (other than Parent), if any, shall name the Administrative Agent as an additional insured or loss payee of the Credit Parties, in case of loss.  All certificates of insurance of the Credit Parties (other than Parent) are to be delivered to the Administrative Agent and the policies shall contain a loss payable and additional insured endorsements in favor of the Administrative Agent (substantially in the form reasonably requested by the Administrative Agent), and shall provide for not less than 30 days’ prior written notice to the Administrative Agent and other named insureds of the exercise of any right of cancellation.

SECTION 3.4.  Conduct of Business and Preservation of Corporate Existence.  Each Credit Party shall, and shall cause each of its Subsidiaries to, (a) continue to engage in business of the same general type as now conducted by the Borrower and its Subsidiaries, taken as a whole, and (b) preserve and maintain its corporate existence, rights (charter and statutory), licenses, consents, permits, notices or approvals and franchises deemed material to its business; provided that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise if (i) the Borrower or any such Subsidiary shall determine in good faith that the preservation thereof is no longer necessary, and (ii) that the loss thereof could not reasonably be expected to have a Material Adverse Effect, and provided further that this Section 8.04 shall not prohibit any merger, consolidation, liquidation or dissolution otherwise permitted by Section 9.03 or any sale, transfer or other Disposition permitted under Section 9.04.

SECTION 3.5.  Inspection of Property; Books and Records; Discussions.  At any reasonable time during normal business hours and from time to time with at least three (3) Business Days’ prior notice, or at any time if a Default or Event of Default shall have occurred and be continuing, each Credit Party shall, and shall cause each of its Subsidiaries to, permit any authorized representative(s) designated by the Administrative Agent to visit and inspect any of its assets, to examine, audit, check and make copies of their respective financial and accounting records, books, journals, orders, receipts and any correspondence with regulators and other data relating to their respective businesses or the transactions contemplated by the Loan Documents (including in connection with environmental compliance, hazard or liability or i nsurance programs), and to discuss their affairs, finances and accounts with their officers and independent certified public accountants, all upon reasonable notice and at such reasonable times during normal business hours.  The visitations and/or inspections by or on behalf of the Administrative Agent shall be at the Borrower’s expense; provided, however, that so long as no Default or Event of Default has occurred and is continuing, no more than one (1) visitation or inspection shall be made in any Fiscal Year.  Each Credit Party shall, and shall cause each of its Subsidiaries to, keep and maintain in all material respects proper, complete and accurate books of record and account, in which entries in conformity with GAAP shall be made of all dealings and financial transactions and the assets and business of such Credit Party or Subsidiary in relation to their respective businesses and activities, including transactions and other dealings with respect to the Collateral.  If an Event of Default has occurred and is continuing and the Loans have been accelerated, the Borrower, upon the Administrative Agent’s request, shall turn over any such records to the Administrative Agent or its representatives.

SECTION 3.6.  Intentionally Omitted.  

SECTION 3.7.  Maintenance of Properties.  Each Credit Party shall, and shall cause each of its Subsidiaries to, maintain, preserve and protect consistent with past practice all of their tangible properties and Intellectual Property and other intangible assets which are necessary or useful in the proper conduct of their business in good working order and condition, ordinary wear and tear excepted, except where the failure to do so could reasonably be expected to have a Material Adverse Effect.  With respect to Intellectual Property, if consistent with reasonable commercial judgment, each Credit Party shall, and shall cause each of its Subsidiaries to, maintain all material Registered Intellectual Property and Trade Secrets owned by such Credit Party or Subsidiary, including taking all commercially reasonable steps to pres erve and protect such material Intellectual Property, including maintaining the quality of any and all products or services used or provided in connection with any material Trademark, substantially consistent with the quality of the products and services as of the date hereof, and ensuring that all licensed users of any such Trademark use such substantially consistent standards of quality, except where the failure to do so, in each case, could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.8.  Transactions with Related Parties.  Each Credit Party shall, and shall cause each of its Subsidiaries to, conduct all transactions otherwise permitted under this Agreement with any of its Related Parties on terms that are commercially reasonable and no less favorable to such Credit Party or Subsidiary, as the case may be, than it would obtain in a comparable arm’s-length transaction with a Person not a Related Party, provided that the following shall be allowed notwithstanding the foregoing:  (a) investments in the Capital Stock of the Parent, (b) nonexclusive licenses of patents, copyrights, trademarks, trade secrets and other intellectual property by any Credit Party or any Subsidiary to any Credit Party or any Subsidiary, (c) transactions between or among any Credit Party and any Subs idiary otherwise permitted under the Loan Documents, (d) the Exchangeable Debenture Subsequent Transaction and (e) other transactions in the ordinary course of business of any Credit Party or any Subsidiary.  Any Related Party may serve as director, officer, employee or consultant of any Credit Party or its Subsidiaries, subject to the preceding sentence.

SECTION 3.9.  Further Assurances.  Each Credit Party shall take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as the Administrative Agent may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected Liens (subject only to Permitted Encumbrances) on any of the Collateral or any other property of the Borrower or any Guarantor acquired after the Closing Date and required to be so perfected pursuant to any Loan Document, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfecti on and priority of the Liens intended to be created thereby (except for Permitted Encumbrances), and (iv) to better assure, convey, grant, assign, transfer and confirm unto the Administrative Agent for the ratable benefit of the Lenders the rights now or hereafter intended to be granted to the Administrative Agent for the ratable benefit of the Lenders under this Agreement or any other Loan Document.

SECTION 3.10.  Additional Security; Additional Guaranties; Further Assurances.

(a)

In the event that Borrower or any Guarantor acquires a fee interest in any Real Estate Asset with a fair market value in excess of $5,000,000 and such interest has not otherwise been made subject to a Lien in favor of Administrative Agent, for the benefit of the Secured Creditors, then Borrower or such Guarantor, as applicable, within 60 days after or such later time in the Administrative Agent’s reasonable discretion with acquiring such Real Estate Asset, shall take all such actions and execute and deliver, or cause to be executed and delivered, all such mortgages, documents, instruments, agreements, opinions and certificates that the Administrative Agent shall reasonably request to create in favor of Administrative Agent, for the benefit of the Secured Creditors, a valid and, subject to any filing and/or recording referred to herein, perfected (subject only to P ermitted Encumbrances) security interest in such Real Estate Assets.  In addition to the foregoing, the Borrower shall, at the request of the Required Lenders, deliver, from time to time, to the Administrative Agent such appraisals as are required by law or regulation of Real Estate Assets with respect to which Administrative Agent has been granted a Lien.

(b)

In the event that Borrower or any Guarantor enters into any lease after the Closing Date with respect to a real property asset with an annual base rent in excess of $2,000,000 after the expiration of any rent abatement or free rent period, then Borrower or such Guarantor, as applicable, shall promptly (and, in any event, within 60 days following the date of such lease or such later time in the Administrative Agent’s reasonable discretion), use commercially reasonable efforts to execute and deliver, all such mortgages, documents, instruments, agreements, opinions and certificates that the Administrative Agent shall reasonably request to create in favor of the Administrative Agent, for the benefit of the Secured Creditors, a valid and, subject to any filing and/or recording referred to herein, perfected security interest in such Leasehold Property.

(c)

After the date hereof, each Credit Party shall (i) cause each Person that becomes a Domestic Subsidiary of such Credit Party (other than Domestic Subsidiaries described in clauses (ii), (iii), (iv) and (v) of Section 8.18(a)) promptly to guarantee the Obligations and to grant to the Administrative Agent, for the benefit of the Secured Creditors, a security interest in the real, personal and mixed property of such Subsidiary to secure the Obligations, and (ii) pledge, or cause to be pledged, to the Administrative Agent, for the benefit of the Administrative Agent and Lenders, all of the Capital Stock owned by a Credit Party (other than Parent) of each Person that becomes a direct Domestic Subsidiary of such Credit Party (other than a Broker-Dealer Subsidiary), and 65% of the Capital Stock of each Person that becomes a Foreign Subsidiary of such Credit Party.  The documentation for such guaranty, security and pledge shall be in form and substance reasonably satisfactory to the Administrative Agent and shall be substantially similar to the Loan Documents executed concurrently herewith with such modifications as are reasonably requested by the Administrative Agent.

(d)

The Borrower will cause each Subsidiary which, after the Closing Date, is required to become a Guarantor in accordance with the requirements of Section 8.18 or Section 8.10(c) to, at their own expense, execute, acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and thereafter register, file or record in any appropriate governmental office, any document or instrument reasonably deemed by the Administrative Agent to be necessary or desirable for the creation and perfection of the Liens on its assets intended to be created pursuant to the relevant Security Documents.  The Borrower will take, and cause each Subsidiary described above in Section 8.10(c) to take, all actions reasonably requested by the Administrative Agent (including the filing of UCC-1s (or the appropriate equivalent filings under the la ws of any relevant foreign jurisdiction), the furnishing of legal opinions, etc.) in connection with the granting of such Liens.

(e)

The Liens required to be granted pursuant to this Section 8.10 shall be granted pursuant to the respective Security Documents previously executed and delivered by the Credit Parties (other than Parent) (or other security documentation substantially similar to such Security Documents or otherwise reasonably satisfactory in form and substance to the Administrative Agent) for the benefit of the Secured Creditors and shall constitute valid and enforceable perfected security interests on all of the Collateral subject thereto, prior to the rights of all third Persons and subject to no other Liens except Permitted Encumbrances, and with such exceptions, conditions and qualifications, as shall be permitted by the respective Security Documents.  Any Additional Security Documents and other instruments related thereto or related to existing Security Documents sha ll be duly recorded or filed in such manner and in such places and at such times as are required by law to create, maintain, effect, perfect, preserve, maintain and protect the Liens, in favor of the Administrative Agent for the benefit of the Secured Creditors, required to be granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable in connection therewith shall be paid in full by the Borrower.  At the time of the execution and delivery of any Security Documents or Additional Security Documents, the Borrower will, at the request of the Administrative Agent, cause to be delivered to the Administrative Agent such customary opinions of counsel and other related documents as may be reasonably requested by the Administrative Agent to assure that this Section 8.10 has been complied with.

(f)

Each Credit Party agrees that each action required above by this Section 8.10 shall be completed as promptly as reasonably practicable after such action is requested to be taken by the Administrative Agent, provided that any action required above by Sections 8.10(c), (d), and (e) with respect to a newly formed, created or acquired Subsidiary shall be completed as promptly as practicable following the formation, creation or acquisition of such Subsidiary.

SECTION 3.11.  Powers; Conduct of Business.  Each Credit Party shall, and shall cause each of its Subsidiaries to, qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified except for those jurisdictions where failure to so qualify does not have or could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.12.  Use of Proceeds.  Proceeds of the Loans shall be used in accordance with Section 2.02 hereof.

SECTION 3.13.  Obtaining of Permits, Etc.  Each Credit Party shall obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, all permits, licenses, authorizations, approvals, entitlements and accreditations which are necessary or useful in the proper conduct of its business, except where the failure to maintain and preserve such permits, licenses, authorizations, approvals, entitlements and accreditations does not or could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.14.  Environmental.  Each Credit Party shall, and shall cause each of its Subsidiaries to, (i) comply, and cause it Subsidiaries to comply, in all material respects with material Environmental Laws and provide to the Administrative Agent documentation of such compliance which Administrative Agent reasonably requests, which documentation shall include a notice by the Borrower six months after the Closing Date of the steps taken by the Borrower or its Subsidiaries to address any outstanding matters described on Schedule 6.01(p), (ii) promptly notify the Administrative Agent of any material violation of any material Environmental Law and undertake immediate measures to correct such violation, (iii) promptly provide the Administrative Agent a copy of any document provided to a Governmental Aut hority concerning any Release of a Hazardous Material from or onto property owned or operated by the Borrower or any of its Subsidiaries and take any Remedial Actions required of the Borrower or such Subsidiary by Environmental Laws or otherwise appropriate to abate said Release or avoid Environmental Liabilities and Costs; and (iv) perform any Remedial Action at property owned or operated by the Borrower or any of its Subsidiaries (x) that is required of the Borrower or such Subsidiary pursuant to any Environmental Law or agreement with a Governmental Authority, or (y) that was initiated prior to the Closing Date and is identified on Schedule 8.14.  With respect to clauses (i) and (ii), such notice to the Administrative Agent shall be required only if the liability or the cost or potential cost of compliance resulting from such a violation or Release of a Hazardous Material is reasonably likely to exceed $1,200,000.

SECTION 3.15.  Fiscal Year.  Each Credit Party shall cause its Fiscal Year to end on December 31 of each year unless the Required Lenders consent to a change in such Fiscal Year (and appropriate related changes to this Agreement).

SECTION 3.16.  Payment of Contractual Obligations.  Each Credit Party shall, and shall cause each of its Subsidiaries to, pay on a timely basis (i) any and all amounts due and payable pursuant to any Material Contracts (other than material insurance policies) except where the failure to pay could not reasonably be expected to cause a Material Adverse Effect and (ii) any and all premium, cash reserve, claims or other payment obligations in respect of any material insurance policy.

SECTION 3.17.  [Intentionally Omitted].

SECTION 3.18.  Formation of Subsidiaries.

(a)

The Parent shall have no Subsidiary other than the Borrower and Subsidiaries of the Borrower.  The Borrower shall have no Subsidiaries other than (i) Credit Parties (including any Persons that become Credit Parties after the date hereof pursuant to Section 8.18(b)), (ii) Wholly-Owned Domestic Subsidiaries that are (A) U.S. Broker-Dealer Subsidiaries, (B) registered investment companies under the Investment Company Act, or (C) registered investment advisors under the Investment Advisors Act or (D) prohibited by Applicable Law from becoming a Guarantor hereunder, (iii) one or more other Wholly-Owned Domestic Subsidiaries that are not Credit Parties so long as the assets of all such Wholly-Owned Domestic Subsidiaries do not exceed $2,400,000 in aggregate book value as of the last day of any Fiscal Quarter (iv) one o r more Subsidiaries that (A) are not Wholly-Owned Domestic Subsidiaries or (B) the Borrower has notified the Administrative Agent that such Subsidiaries are expected to become not Wholly-Owned Subsidiaries and, in each case of this clause (iv), are subject to the restrictions on Investments provided in Section 9.07 and (v) LoanCo.  

(b)

At the time that any Credit Party forms any Domestic Subsidiary or acquires any Domestic Subsidiary after the Closing Date (in each case, other than a Subsidiary described in clauses (ii), (iii), (iv) and (v) of Section 8.18(a) above), such Credit Party shall promptly (i) cause such Subsidiary to execute and deliver to the Administrative Agent a Counterpart Agreement, the Security Agreement, and such security documents, as well as appropriate financing statements, all in form and substance reasonably satisfactory to the Administrative Agent (including being sufficient to grant the Administrative Agent a Lien (subject only to Permitted Encumbrances) in and to the assets of such newly formed or acquired Subsidiary) and (ii) provide to the Administrative Agent all other documentation, including, at the Administrative Agent’s request, one or more opinions of counsel reasonably satisfactory to the Administrative Agent, which in the opinion of each of them is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including the grant and perfection of any Lien contemplated thereby).  Any document, agreement, or instrument executed or issued pursuant to this Section 8.18 shall be a Loan Document.

SECTION 3.19.  Cash Management.

(a)

Neither the Borrower nor any Guarantor shall have any Deposit Account or Securities Account other than accounts maintained in accordance with Section 3.04(c) of the Security Agreement (together, the “Permitted Accounts”).  To the extent the Borrower or any Guarantor has granted a valid, perfected security interest to the holders of the Senior Debt, the Borrower shall cause the Secured Creditors to have a valid, perfected, security in all Permitted Accounts, subject only to Permitted Encumbrances, as and to the extent provided in the Security Agreement.

(b)

The Borrower and Guarantors shall take all reasonable steps necessary from time to time to deposit or cause to be deposited promptly all of their Collections (including those sent in cash or otherwise directly to the Borrower or a Guarantor) into a Permitted Account.  

ARTICLE IV
NEGATIVE COVENANTS

Each Credit Party covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Required Lenders have given their prior written consent) until all amounts owing hereunder or under any other Loan Document or in connection herewith or therewith have been paid in full that:

SECTION 4.1.  Liens.  It shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any of its property or assets, whether now owned or hereafter acquired, or assign or otherwise transfer any account receivable or other right to receive income, other than Permitted Encumbrances.

SECTION 4.2.  Indebtedness.  It shall not, and shall not permit any of its Subsidiaries to, create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to any Indebtedness, other than Permitted Indebtedness.

SECTION 4.3.  Consolidation, Merger, Subsidiaries, Etc.  It shall not, and shall not permit any of its Subsidiaries to, (a) liquidate or dissolve, consolidate with, or merge into or with, any other corporation, provided that this clause (a) shall not prevent (i) a merger or consolidation involving only the Borrower and one or more of its Subsidiaries pursuant to which the Borrower is the surviving party, (ii) a merger or consolidation involving only one or more Wholly-Owned Domestic Subsidiaries of the Borrower pursuant to which the surviving Person is a Wholly-Owned Domestic Subsidiary of the Borrower, (iii) a merger or consolidation that constitutes a Permitted Acquisition or has the effect of a disposition of assets permitted by Section 9.04 or an Investment permitted by Secti on 9.07 or (iv) any liquidation or dissolution of a Subsidiary of the Borrower that is not a Credit Party if the board of directors of the Borrower determines that the book value of the assets of such Subsidiary is less than $1,200,000 and such liquidation or dissolution is not otherwise disadvantageous to the Lenders, or (b) purchase or otherwise acquire all or substantially all of the Capital Stock or assets of any Person (or of any division or business unit thereof), other than in a Permitted Acquisition.

SECTION 4.4.  Asset Dispositions, Etc.  It shall not, and it shall not permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of, or grant options, warrants or other rights with respect to, any of its assets (including any Capital Stock or Indebtedness of any Person), except:

(a)

sales, transfers, leases or other dispositions of Inventory or rights to Inventory in the ordinary course of business;

(b)

sales, transfers, leases or other dispositions of assets to the Borrower or a Wholly Owned Subsidiary;

(c)

the discount or sale, in each case without recourse and in the ordinary course of business, of receivables more than 90 days overdue and arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale or financing of receivables);

(d)

sales or other dispositions in the ordinary course of business of assets (including intellectual property) that have become obsolete, uneconomic, worn-out or no longer useful, including without limitation sales or dispositions arising in connection with Permitted Acquisitions;

(e)

Restricted Payments permitted by the terms of this Agreement;

(f)

dispositions of cash and Cash Equivalents in the ordinary course of business;

(g)

nonexclusive licenses of patents, copyrights, Trademarks, Trade Secrets and other intellectual property of the Borrower and its Subsidiaries entered into in the ordinary course of business;

(h)

in a transaction permitted under Sections 9.03, 9.06 or 9.07 and the disposition of the Exchangeable Debentures in connection with the Exchangeable Debenture Subsequent Transaction;

(i)

leases, subleases or licenses of property to other Persons not materially interfering with the business of the Borrower or any Subsidiary;

(j)

sales, transfers or other dispositions of assets by any Broker-Dealer Subsidiary, any Investment Advisor Subsidiary or LoanCo in the ordinary course of business;

(k)

sales, transfers or other dispositions of Capital Stock of a Subsidiary to any employees, officers or directors; provided that the total Investment of the Credit Parties and their Subsidiaries in such Subsidiary at the time it becomes a non-Wholly-Owned Subsidiary is otherwise permitted under Section 9.07(i); and

(l)

sales, transfers, leases and other dispositions of assets (excluding any direct or indirect interest in the Capital Stock of Oppenheimer & Co., Inc., Oppenheimer Asset Management Inc. or their respective successors) with an aggregate fair market value not exceeding $12,000,000 in any Fiscal Year.  

SECTION 4.5.  Limitations on Dividends and Distributions and Other Payment Restrictions Affecting Subsidiaries.  It shall not, and it shall not permit any of its Subsidiaries to, create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on its ability (i) to pay dividends or to make any other distribution on any shares of its Capital Stock, (ii) to subordinate or to pay, prepay, redeem or repurchase any Indebtedness owed to any Credit Party or Subsidiary of a Credit Party, (iii) to make loans or advances to any Credit Party or Subsidiary of a Credit Party or (iv) to transfer any of its property or assets to any Credit Party or Subsidiary of a Credit Party; provided, however, that nothing in clauses (i) through (iv) of this Section 9.05 shall prohibit or restrict:  (A) this Agreement and the other Loan Documents; (B) any applicable law, rule or regulation (including applicable currency control laws and applicable state or provincial corporate statutes restricting the payment of dividends or any other distributions in certain circumstances); (C) any restriction set forth in any document or agreement governing or securing any Existing Debt and any Permitted Refinancing thereof; (D) in the case of clause (iv) any restrictions on the subletting, assignment or transfer of any property or asset included in a lease, license, sale conveyance or similar agreement with respect to such property or asset; (E) in the case of clause (iv) any holder of a Permitted Encumbrance from restricting on customary terms the transfer of any property or assets subject to such Permitted Encumbrance; (F) any agreement or instrument in effect at the time a Pe rson first became a Subsidiary of the Borrower or the date such agreement or instrument is otherwise assumed by the Borrower or any of its Subsidiaries, so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower or such assumption; (G) customary provisions restricting assignment of any licensing agreement or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; (H) restrictions on the transfer of any asset pending the close of the sale of such asset; (I) customary provisions with respect to the payment of dividends or other distributions by any Subsidiary that is not a Credit Party set forth in the organizational documents for such Subsidiary so long as such provisions were not entered into in connection with any other agreement or arrangement not otherwise permitted under this Section 9.05; or (J) any restrictions in the Existing Credit Agreement, the Permitted Loan Trad ing Platform Facility, the Permitted Warehouse Facility, the Viner Debentures (as defined in the Asset Purchase Agreement) or the C Israel Indebtedness (as defined in the Asset Purchase Agreement).  The Lenders and the Administrative Agent acknowledge that any payments to be made by a Broker-Dealer Subsidiary to a Credit Party shall be subject to any required prior approval from an applicable SRO, including without limitation the NYSE, and that a failure to obtain such approval shall not constitute a violation of this Section 9.05.  

SECTION 4.6.  Limitation on Issuance of Capital Stock.  It shall not, and it shall not permit any of its Subsidiaries to, issue or sell or enter into any agreement or arrangement for the issuance and sale of any shares of its Capital Stock, any Securities convertible into or exchangeable for its Capital Stock or any warrants, options or other rights for the purchase or acquisition of any of its Capital Stock, other than (i) the issuance of Capital Stock by Parent; (ii) the issuance of Capital Stock to the Borrower or Wholly-Owned Subsidiaries of the Borrower; (iii) the issuance of Capital Stock by any Subsidiary of directors’ qualifying shares; or (iv) the issuance of Capital Stock by any Subsidiary (other than a Credit Party) to any Person; provided that the Investment in such Subsidiary at the time it becomes a non-Wholly-Owned Subsidiary is otherwise permitted under Section 9.07(i).

SECTION 4.7.  Investments.  It shall not, and it shall not permit any of its Subsidiaries to, directly or indirectly, hold, own or invest in or commit or agree to hold or invest in, or purchase or otherwise acquire or commit or agree to purchase or otherwise acquire any Investment, except the following:

(a)

Investments existing on the date hereof in Persons which are Subsidiaries of such Credit Party on the Closing Date;

(b)

Investments existing on the Closing Date and set forth on Schedule 9.07;

(c)

Cash Equivalents, provided that any Cash Equivalents of the Credit Parties (other than Parent) shall be held at all times in Securities Accounts or Deposit Accounts with respect to which a Control Agreement has been executed and delivered; provided, however, that if a Control Agreement has not been entered into in favor of the holders of the Senior Debt with respect to any Securities Account or Deposit Account, such Securities Account or Deposit Account will not be subject to the requirement of this clause (c);

(d)

receivables or trade credits created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

(e)

Investments (including obligations owing under Indebtedness) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

(f)

deposits made in the ordinary course of business consistent with past practices to secure the performance of leases;

(g)

Permitted Acquisitions (and Investments by Subsidiaries acquired in a Permitted Acquisition to the extent outstanding at the time of acquisition) and the acquisition of the Exchangeable Debentures in connection with the Exchangeable Debenture Subsequent Transaction;

(h)

Investments in the Borrower and its Wholly-Owned Domestic Subsidiaries (other than LoanCo);

(i)

Investments in Subsidiaries of the Borrower that are not Wholly-Owned Domestic Subsidiaries, provided that, at the time the Investment is made, the aggregate amount contributed to or invested in such Subsidiaries since the date hereof (net of any return or repayment thereof) does not exceed (x) $6,000,000 plus (y) the aggregate amount of operating losses generated by such Subsidiaries at any time following the beginning of the third Fiscal Quarter 2006 to the extent included in the definition of Consolidated EBITDA;

(j)

Investments of any Broker-Dealer Subsidiary (A) in the ordinary course of its “broker-dealer” business, including without limitation short-term equity positions maintained in the normal course of its securities clearing business and margin loans to clients, and (B) in the ordinary course of its investment banking business to the extent received in consideration of investment banking or financial advisory services;

(k)

Investments consisting of non-cash consideration received from the purchaser of assets in connection with a sale of such assets pursuant to Section 9.04;

(l)

Investments by LoanCo in the ordinary course of its business;

(m)

Investments in LoanCo; provided that an additional Investment in LoanCo shall not be permitted if (i) after giving effect to such Investment, the Borrower’s aggregate outstanding Investment in LoanCo (net of any cash distributions received from LoanCo) exceeds $36,000,000, unless no Event of Default or Default shall have occurred and be continuing and the Borrower shall have delivered a certificate to that effect, signed by a Senior Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent or (ii) at the time of such Investment, the aggregate amount of cumulative net operating losses (net of the aggregate amount of any cumulative net operating profits or gains) generated by LoanCo since the date hereof exceeds $24,000,000; and

(n)

other Investments by the Borrower and its Subsidiaries not otherwise permitted by this Section 9.07; provided that, at the time the Investment is made, the aggregate amount contributed, advanced or otherwise invested pursuant hereto since the date hereof (net of any return or repayment thereof) does not exceed $30,000,000.

SECTION 4.8.  Sale and Leaseback.  It shall not, and it shall not permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease, whether an Operating Lease or a Capitalized Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired, (i) that the Borrower or any of its Subsidiaries has sold or transferred or is to sell or transfer to any other Person or (ii) that the Borrower or any of its Subsidiaries intends to use for substantially the same purpose as any other property that has been or is to be sold or transferred by such Credit Party or any other Credit Party to any Person in connection with such lease (a “Sale and Leaseback”).

SECTION 4.9.  Negative Pledges.  It shall not, and it shall not permit any of its Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, except (i) pursuant to this Agreement and the Security Documents, (ii) pursuant to any document or instrument governing Existing Debt (and any Permitted Refinancing thereof) or governing Capital Lease Obligations or purchase money debt incurred pursuant to Section 9.02 if any such restriction contained therein relates only to the asset or assets acquired in connection therewith or in connection with any Lien permitted by Section 9.01 or any Disposition permitted by Section 9.04; (iii) pursuant to the Existing Credit Agreement, the Permitted Loan Trading Platform Facility, the Permitted Warehouse Facility, the Viner Debentures (as defined in the Asset Purchase Agreement) and the C Israel Indebtedness (as defined in the Asset Purchase Agreement) as and to the extent consistent with the definitions of those instruments; (iv) prohibitions or conditions under applicable law, rule or regulation; (v) any agreement or instrument to which any Person is a party existing on the date such Person first becomes a Subsidiary of the Borrower or the date such agreement or instrument is otherwise assumed by the Borrower or any of its Subsidiaries (so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower or such assumption and such prohibitions or conditions do not affect any other Subsidiary of the Borrower (other than Subsidiaries of such Person having primary obligation for repayment of such Indebtedness)); (vi) customary provisions restricting subletting or as signment of any lease governing any leasehold interest of the Borrower or any of its Subsidiaries; (vii) customary provisions restricting assignment of any licensing agreement or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; or (viii) restrictions on the transfer of any asset pending the close of the sale of such asset.

SECTION 4.10.  Change in Nature of Business.  It shall not, and it shall not permit any of its Subsidiaries to, make any material change in the nature of its business as such business is carried on as of the Closing Date or any business substantially related or incidental thereto.  Parent will conduct no business other than holding Indebtedness of the Borrower and owning the Capital Stock of Borrower or other Subsidiaries.

SECTION 4.11.  Capital Expenditures.  It shall not, and shall not permit any of its Subsidiaries to, make any Capital Expenditures that would cause the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries in any Fiscal Year to exceed the sum of (a) $24,000,000 plus (b) if the aggregate amount of Capital Expenditures made by the Borrower and its Subsidiaries during the immediately preceding Fiscal Year is less than $24,000,000, the difference between (x) $24,000,000 minus (y) the aggregate amount of Capital Expenditures made by the Borrower and its Subsidiaries during such immediately preceding Fiscal Year.

SECTION 4.12.  Modifications of Organizational Documents and Certain Other Agreements.  It shall not, and it shall not permit any of its Subsidiaries to, amend, modify or otherwise change (i) its certificate of incorporation or bylaws (or other similar organizational documents), including by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it, with respect to any of its Capital Stock (including any shareholders’ agreement) except any such amendments, modifications or changes pursuant to this clause that either individually or in the aggregate would not be materially adverse to the interests of the Lenders; or (ii) its accounting policies or reporting practices.

SECTION 4.13.  Federal Reserve Regulations.  It shall not, and it shall not permit any of its Subsidiaries to, use any Loan or the proceeds of any Loan for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X.

SECTION 4.14.  Investment Company Act of 1940.  It shall not, and it shall not permit any of its Subsidiaries (other than Oppenheimer Asset Management Inc. and its Subsidiaries) to, engage in any business, enter into any transaction, use any Securities or take any other action that would cause it or any of its Subsidiaries (other than Oppenheimer Asset Management Inc. and its Subsidiaries) to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.

SECTION 4.15.  Securities Accounts.  Subject to Section 3.04(c) of the Security Agreement, it shall not, and it shall not permit its Subsidiaries who are Credit Parties to, establish or maintain any Securities Account, Deposit Account or similar account unless the Administrative Agent shall have received a Control Agreement in respect of such Securities Account, Deposit Account or similar account.  Each Credit Party shall comply in all material respects with the provisions of each Control Agreement to which it is a party.

SECTION 4.16.  Impairment of Security Interests.  Except as otherwise permitted pursuant to any of the Loan Documents, it shall not, and it shall not permit its Subsidiaries who are Credit Parties to, directly or indirectly, take any action or do anything that would have the effect of terminating, limiting or impairing the perfection or priority of any Lien securing the Obligations except as expressly permitted under any Loan Document.

SECTION 4.17.  Restricted Payments.

It shall not, and it shall not permit any of its Subsidiaries to, make any Restricted Payment, except:

(a)

(i) Restricted Payments made by Wholly-Owned Subsidiaries of the Borrower to the Borrower or Wholly-Owned Subsidiaries of the Borrower and (ii) Restricted Payments made by any Subsidiary of the Borrower other than a Wholly-Owned Subsidiary, dividends or distributions on its Capital Stock to all holders of any series of such Capital Stock pro rata to all holders of such series;

(b)

Restricted Payments made by the Borrower to the Parent to pay expenses of the Parent; or otherwise to permit Parent to make any other Restricted Payment permitted under this Section 9.17;

(c)

(i) dividends and distributions by Parent to its stockholders payable in Capital Stock of Parent, (ii) Restricted Payments by Parent pursuant to and in accordance with stock option plans or other benefit plans for management, directors/or employees of the Parent and its Subsidiaries, (iii) repurchases of Capital Stock of Parent deemed to occur upon the exercise of stock options if such capital stock represents a portion of the exercise price thereof and repurchases of Capital Stock deemed to occur upon the withholding or surrender of a portion of the Capital Stock issued, granted or awarded to an employee or director to pay for the taxes payable by such employee or director upon such issuance, grant or award and (iv) repurchases of Capital Stock to the extent funded with the proceeds of the contemporaneous issuance of other Capital Stock;

(d)

so long as no Default or Event of Default has occurred and is continuing, (i) at the time of declaration thereof, cash dividends by Parent on any series of Capital Stock of Parent, provided that the aggregate amount of dividends does not exceed:  $9,000,000 during Fiscal Year 2007; $9,600,000 during Fiscal Year 2008; $10,200,000 during Fiscal Year 2009; $10,800,000 during Fiscal Year 2010; $11,400,000 during Fiscal Year 2011; $12,000,000 during Fiscal Year 2012; and $12,600,000 during Fiscal Year 2013; and $3,300,000 during the first Fiscal Quarter of Fiscal Year 2014; and (ii) at the time of payment, cash payments by Parent to repurchase the Class A Shares of the Parent listed on the New York Stock Exchange, provided that the aggregate number of Class A Shares so repurchased does not exceed: 325,000 during the last two Fiscal Qua rters of Fiscal Year 2006 (taken as one period); 650,000 during any Fiscal Year beginning with Fiscal Year 2007 and ending with Fiscal Year 2013; and 162,500 during the first Fiscal Quarter of Fiscal Year 2014 (taken as one period); and

(e)

Parent and any Subsidiary of the Parent may make regularly scheduled payments (but not prepayments) with respect to any Indebtedness permitted hereunder that is subordinated to the Obligations.

ARTICLE V
FINANCIAL COVENANTS

Each Credit Party covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Required Lenders have given their prior written consent) until all amounts owing hereunder or under any Security Document or in connection herewith or therewith have been paid in full, that:

SECTION 5.1.  Total Leverage Ratio.  Total Leverage Ratio, as of each date set forth below, for the Parent and its Subsidiaries (other than LoanCo) on a consolidated basis, shall not be greater than the ratio set forth opposite such date below:

Measurement Period Ending	Ratio
December 31, 2007	2.40:1.00
March 31, 2008	2.40:1.00
June 30, 2008	2.40:1.00
September 30, 2008	2.40:1.00
December 31, 2008	2.00:1.00
March 31, 2009	2.00:1.00
June 30, 2009	2.00:1.00
September 30, 2009	2.00:1.00
December 31, 2009	1.70:1.00
March 31, 2010	1.70:1.00
June 30, 2010	1.70:1.00
September 30, 2010	1.70:1.00
December 31, 2010	1.40:1.00
March 31, 2011	1.40:1.00
June 30, 2011	1.40:1.00
September 30, 2011	1.40:1.00
December 31, 2011	1.40:1.00
March 31, 2012	1.40:1.00
June 30, 2012	1.40:1.00
September 30, 2012	1.40:1.00
December 31, 2012	1.40:1.00
March 31, 2013	1.40:1.00
June 30, 2013	1.40:1.00
September 30, 2013	1.40:1.00
December 31, 2013	1.40:1.00

SECTION 5.2.  Regulatory Net Capital.  At all times, (a) the Regulatory Net Capital of all of each Credit Party’s Wholly-Owned, U.S. Broker Dealer-Subsidiaries, taken together, shall exceed the sum of (i) the required minimum net capital of all of each Credit Party’s Subsidiaries that are Wholly-Owned, U.S. Broker-Dealer Subsidiaries, taken together, plus (ii) $83,333,333 and (b) the Regulatory Net Capital of each U.S. Broker Dealer-Subsidiary shall exceed seven percent of its aggregate debit items for purposes of Rule 15c3-1 under the Securities Exchange Act.

SECTION 5.3.  Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio, as of any date set forth below, for the Parent and its Subsidiaries (other than LoanCo) on a consolidated basis, shall not be less than the ratio set forth opposite such date below:

Measurement Period Ending	Ratio
December 31, 2007	2.80:1.00
March 31, 2008	2.80:1.00
June 30, 2008	2.80:1.00
September 30, 2008	2.80:1.00
December 31, 2008	3.00:1.00
March 31, 2009	3.00:1.00
June 30, 2009	3.00:1.00
September 30, 2009	3.00:1.00
December 31, 2009	3.30:1.00
March 31, 2010	3.30:1.00
June 30, 2010	3.30:1.00
September 30, 2010	3.30:1.00
December 31, 2010	3.75:1.00
March 31, 2011	3.75:1.00
June 30, 2011	3.75:1.00
September 30, 2011	3.75:1.00
December 31, 2011	3.75:1.00
March 31, 2012	3.75:1.00
June 30, 2012	3.75:1.00
September 30, 2012	3.75:1.00
December 31, 2012	3.75:1.00
March 31, 2013	3.75:1.00
June 30, 2013	3.75:1.00
September 30, 2013	3.75:1.00
December 31, 2013	3.75:1.00

ARTICLE VI
EVENTS OF DEFAULT, RIGHTS AND REMEDIES

SECTION 6.1.  Events of Default.  Each of the following occurrences shall constitute an event of default (an “Event of Default”) under this Agreement.

(a)

Failure to Make Payments When Due.  The Borrower shall fail to pay (i) any principal or reimbursement obligations when due or (ii) any interest, fees, or any other monetary Obligation, and such failure shall continue for a period of three (3) Business Days after such amount was due (in each case, whether by scheduled maturity, required prepayment, acceleration, demand or otherwise).

(b)

Breach of Certain Covenants. Any Credit Party shall fail to perform or comply with any covenant or agreement contained in Sections 8.04, 8.05, 8.11, 8.12, 8.15, 8.18(b), 8.19, Article IX or Sections 10.01 or 10.03 under this Agreement.

(c)

Breach of Representation or Warranty. Any representation, warranty or statement made or deemed made by or on behalf of any Credit Party or by any officer of the foregoing under any Loan Document or in any report, certificate, or other document delivered to the Administrative Agent or any Lender pursuant to any Loan Document prove to be incorrect or misleading in any material respect when made or deemed made.

(d)

Section 10.02 Defaults (Ten (10) Day Cure).  Any Credit Party shall fail to perform or comply with the covenant contained in Section 10.02 and such failure continues for a period of ten (10) days provided that no more than one such failure may occur in any Fiscal Month.

(e)

Other Defaults (Thirty (30) Day Cure).  Any Credit Party shall fail to perform or comply with any other covenant or agreement and such failure continues for a period of thirty (30) days after learning of such failure or receiving written notice thereof from the Administrative Agent.

(f)

Default as to Other Indebtedness.  Any Credit Party or any Subsidiary of a Credit Party shall fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) with respect to any Indebtedness if the aggregate amount of such Indebtedness is in excess of $6,000,000 in the aggregate and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other breach, default or event of default shall occur, or any other condition shall exist under any instrument, agreement or indenture pertaining to any such Indebtedness, if the effect thereof (with or without the giving of notice or lapse of time or both) is to permit or require an acceleration, mandatory redemption or other required repurchase of such Indebtedness or, as to such Indebtedness, permit the holder or holders of such Indebtedness to accelerate the maturity of any such Indebtedness or require a redemption or other repurchase of such Indebtedness; or any Indebtedness if the aggregate amount of such Indebtedness is $6,000,000 shall be declared due and payable (by acceleration or otherwise) by a Person (other than a Credit Party or any Subsidiary of a Credit Party) as a result of a breach, Default or Event of Default by a Credit Party or any Subsidiary of a Credit Party, or required to be prepaid, redeemed or otherwise repurchased by any Credit Party or any Subsidiary of a Credit Party (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof; or the holder or holders of any Lien, securing obligations of $6,000,000 or more, shall commence foreclosure of such Lien upon property of any Credit Party or any Subsidiary of a Credit Party.

(g)

Voluntary Bankruptcy Proceeding.  Any Credit Party (i) shall institute any proceeding or voluntary case seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, receiver and manager, interim receiver, sequestration, administrator, monitor, custodian or other similar official for any such Credit Party or any Subsidiaries or for any substantial part of its property, (ii) shall consent to the entry of an order for relief in an involuntary bankruptcy case or to the conversion of an involuntary case to a voluntary case under bankruptcy, insolvency or reorganization law, (iii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iv) shall make a general assignment for the benefit of creditors or (v) shall take any action to authorize or effect any of the actions set forth above in this Section 11.01(g).

(h)

Involuntary Bankruptcy Proceeding.

(i)

An involuntary case shall be commenced against any Credit Party or any Subsidiary of a Credit Party and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of such Credit Party or Subsidiary of a Credit Party in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect; or any other similar relief shall be granted under any applicable federal, state, provincial, local or foreign law; or the board of directors of such Credit Party or Subsidiary of a Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(ii)

A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, receiver and manager, administrator, monitor, custodian or other officer having similar powers over any Credit Party or any Subsidiary of a Credit Party or over all or a substantial part of their respective assets shall be entered; or an interim receiver, trustee or other custodian of any Credit Party or any Subsidiary of a Credit Party or of all or a substantial part of their respective assets shall be appointed or a warrant of attachment, execution or similar process against any substantial part of their respective assets shall be issued and any such event shall not be stayed, dismissed, bonded or discharged; or the board of directors of any Credit Party or any Subsidiary of a Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(i)

Invalidity of Documents.  A court of competent jurisdiction shall declare that any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against a Credit Party intended to be a party thereto; or the validity or enforceability thereof shall be contested by any Credit Party that is a party thereto; or a proceeding shall be commenced by a Credit Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof; or a Credit Party shall deny in writing that it has any liability or obligation purported to be created under any Loan Document.

(j)

Loan Documents; Impairment.  At any time, for any reason, (i) any Loan Document shall for any reason (other than pursuant to the express terms hereof or thereof) fail or cease to create a valid and perfected Lien on any Collateral or the Liens intended to be created or perfected thereby are, or any Credit Party seeks to render such Liens, invalid or unperfected with respect to any Collateral except as otherwise contemplated hereby or thereby, or (ii) Liens with respect to any Collateral in favor of the Administrative Agent contemplated by the Loan Documents shall be invalidated or otherwise cease to be in full force and effect, or such Liens shall be subordinated or shall not have the priority contemplated hereby or by the other Loan Documents (subject to Permitted Encumbrances and to the exceptions set forth in the applicable Security Documents).

(k)

Judgments.  One or more judgments or judicial or administrative orders for the payment of money exceeding $6,000,000 in the aggregate shall be rendered against a Credit Party or any Subsidiary of a Credit Party and remain unsatisfied, undischarged, unvacated or unbonded and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment or judicial or administrative order or (ii) there shall be a period of twenty (20) consecutive Business Days after entry thereof during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not give rise to an Event of Default under this Section 11.01(k) if and to the extent that (A) the amount of such judgment or order i s covered by a valid and binding policy of insurance between the defendant and the insurer covering full payment thereof and (B) such insurer has been notified, and has not disputed the claim made for payment, of the amount of such judgment or order.

(l)

Change of Control.  A Change of Control shall have occurred.

(m)

ERISA.  With respect to any Plan or Benefit Plan, as applicable, (i) a prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA occurs which could reasonably be expected to result in material liability to any Credit Party or any Subsidiary of a Credit Party, (ii) any accumulated funding deficiency (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, shall exist with respect to any Benefit Plan, or (iii) the occurrence of any ERISA Event; provided, however, that the events listed in clauses (i) through (iv) shall constitute Events of Default only if the liability or deficiency of any Credit Party or any Subsidiary of a Credit Party or ERISA Affiliate, would reasonably be expected to exceed 6,000,000 in the aggregate for all such events.  

SECTION 6.2.  Remedies.  If any Event of Default specified in Section 11.01 shall have occurred and be continuing, the Administrative Agent may, and upon the written request of Required Lenders shall, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of Administrative Agent or any Lender to enforce its claims against any Guarantor or the Borrower: (i) terminate or reduce the Commitments, whereupon the Commitments shall immediately be terminated or reduced, (ii) declare all or a portion of the Loans then outstanding to be due and payable, whereupon all or such portion of the aggregate principal of such Loans, all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and all other Obligations shall become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower and (iii) exercise any and all of its other rights and remedies hereunder, under the other Loan Documents, under applicable law and otherwise; provided, however, that upon the occurrence of any Event of Default described in subsection (g) or (h) of Section 11.01, the Commitments shall automatically terminate and the Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other amounts due under this Agreement shall become immediately due and payable automatically, without presentment, demand, protest or notice of any kind, all of which are expressly waived by the Borrower, and provided further that the Administrative Agent shall pay and apply the proceeds and avails of any sale or other disposition of the Collateral, or any part thereof, resulting from the exercise of the remedies as provided for in this Section 11.02 in accordance with Section 2.05.

SECTION 6.3.  Waivers by the Credit Parties.  Except as otherwise provided for in this Agreement and Applicable Law, the Credit Parties waive (i) presentment, demand, protest, notice of presentment or dishonor, notice of intent to accelerate and notice of acceleration, (ii) all rights to notice and a hearing prior to the Lenders’ taking possession or control of, or to the Lenders’ replevin, attachment or levy upon, any collateral securing the Obligations, if any, or any bond or Security which might be required by any court prior to allowing such Lenders to exercise any of their remedies, (iii) the benefit of all valuation, appraisal and exemption laws and (iv) all rights of set-off against any Lender as it applies to the payment of the Obligations.  The Credit Parties acknowledge that they h ave been advised by counsel of their choice with respect to this Agreement, the other Loan Documents and the transactions evidenced by this Agreement and the other Loan Documents.

ARTICLE VII
GUARANTY OF OBLIGATIONS OF BORROWER

SECTION 7.1.  Guaranty.  In order to induce the Administrative Agent and the Lenders to enter into this Agreement and to make available the Loans hereunder, and in recognition of the direct benefits to be received by each Guarantor from the proceeds of the Loans, each Guarantor hereby agrees with the Administrative Agent, for the benefit of the Lenders, as follows:  each Guarantor hereby jointly, severally, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and prompt payment when due, whether upon maturity, acceleration or otherwise, and the performance, of any and all of the Obligations of all other Credit Parties (such Obligations, collectively, the “Guaranteed Obligations”).  If any or all of the Obligations becomes due and payable hereunder, each G uarantor irrevocably and unconditionally promises to pay such Indebtedness to the Administrative Agent, for the benefit of the Lenders.

SECTION 7.2.  Nature of Liability.  The Guarantors agree that this Guaranty is a guaranty of payment and performance and not of collection, and that their obligations under this Guaranty shall be primary, absolute and unconditional, irrespective of, and the liability of each Guarantor shall not be affected by, nor shall this Guaranty be discharged or reduced by reason of:

(a)

the genuineness, validity, regularity, enforceability or any future amendment of, or change in this Guaranty, any other Loan Document or any other agreement, document or instrument to which any Credit Party and/or Guarantors are or may become a party;

(b)

the absence of any action to enforce this Guaranty or any other Loan Document or the waiver or consent by the Administrative Agent and/or Lenders with respect to any of the provisions thereof;

(c)

any other continuing or other guaranty, undertaking or maximum liability of a Guarantor or of any other party as to the Obligations, or any payment on or in reduction of any such other guaranty or undertaking;

(d)

the incapacity or any change in the name, style or constitution of any Credit Party or any other person liable;

(e)

any dissolution, termination, increase, decrease or change in personnel by the Borrower;

(f)

the Administrative Agent granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, any Credit Party or any other person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from any Credit Party or any other person liable;

(g)

the existence, value or condition of, or failure to perfect its Lien against, any Collateral for the Guaranteed Obligations or any action, or the absence of any action, by the Administrative Agent in respect thereof (including, without limitation, the release of any such Collateral);

(h)

the insolvency of any Credit Party, or any payment made to Administrative Agent or Lender on the Obligations which Administrative Agent or any such Lender repays to the Borrower pursuant to a court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding;

(i)

any act or omission which would not have discharged or affected the liability of a Guarantor had it been a principal debtor instead of a Guarantor or by anything done or omitted which but for this provision might operate to exonerate or discharge a Guarantor; or

(j)

any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor.

SECTION 7.3.  Independent Obligation.

(a)

The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other party or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other party or the Borrower and whether or not any other Guarantor, any other party or the Borrower be joined in any such action or actions.

(b)

Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the Guaranteed Obligations.  Each Guarantor agrees that any notice or directive given at any time to the Administrative Agent that is inconsistent with the preceding paragraph shall be null and void and may be ignored by the Administrative Agent and the Lenders, and, in addition, may not be pleaded or introduced as evidence in any litigation relating to this Guaranty for the reason that such pleading or introduction would be at variance with the written terms of this Guaranty, unless the Administrative Agent and the Lenders have specifically agreed otherwise in writing.  It is agreed among each Guarantor, the Administrative Agent and the Lenders that the foregoing waivers are of the essence of the transaction contemplated by the Loan Documents and that, bu t for this Guaranty and such waivers, the Administrative Agent and the Lenders would decline to enter into this Agreement.

SECTION 7.4.  Demand by the Administrative Agent or the Lenders.  In addition to the terms of the Guaranty set forth in Section 12.01, and in no manner imposing any limitation on such terms, it is expressly understood and agreed that, if, at any time, the outstanding principal amount of the Guaranteed Obligations under this Agreement (including all accrued interest thereon) is declared to be immediately due and payable, then the Guarantors shall, without demand, pay to the holders of the Guaranteed Obligations the entire outstanding Guaranteed Obligations due and owing to such holders.  Payment by the Guarantors shall be made to the Administrative Agent in immediately available funds to an account designated by the Administrative Agent or at the address set forth herein for the giving of notice to the Administrati ve Agent or at any other address that may be specified in writing from time to time by the Administrative Agent, and shall be credited and applied to the Guaranteed Obligations.

SECTION 7.5.  Enforcement of Guaranty.  In no event shall the Administrative Agent have any obligation (although it is entitled, at its option) to proceed against the Borrower or any other Credit Party or any Collateral pledged to secure Guaranteed Obligations before seeking satisfaction from any or all of the Guarantors, and the Administrative Agent may proceed, prior or subsequent to, or simultaneously with, the enforcement of the Administrative Agent’s rights hereunder, to exercise any right or remedy it may have against any Collateral, as a result of any Lien it may have as security for all or any portion of the Guaranteed Obligations.

SECTION 7.6.  Waiver.  In addition to the waivers contained in Section 12.02, the Guarantors waive, and agree that they shall not at any time insist upon, plead or in any manner claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshaling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by the Guarantors of their Guaranteed Obligations under, or the enforcement by the Administrative Agent or the Lenders of, the Guaranty.  The Guarantors hereby waive diligence, presentment and demand (whether for non-payment or protest or of acceptance, maturity, extension of time, change in nature or form of the Guaranteed Obligations, acceptance of further Collateral, release of further C ollateral, composition or agreement arrived at as to the amount of, or the terms of, the Guaranteed Obligations, notice of adverse change in the Borrower’s financial condition or any other fact which might increase the risk to the Guarantors) with respect to any of the Guaranteed Obligations or all other demands whatsoever and waive the benefit of all provisions of law which are or might be in conflict with the terms of the Guaranty.  The Guarantors represent, warrant and jointly and severally agree that, as of the date of this Agreement, their obligations under the Guaranty are not subject to any offsets or defenses against the Administrative Agent or the Lenders or any Credit Party of any kind.  The Guarantors further jointly and severally agree that their obligations under this Guaranty shall not be subject to any counterclaims, offsets or defenses against the Administrative Agent or any Lender or against any Credit Party of any kind which may arise in the future.

SECTION 7.7.  Benefit of Guaranty.  The provisions of the Guaranty are for the benefit of the Administrative Agent and the Lenders and their respective permitted successors, permitted transferees, endorsees and assigns, and nothing herein contained shall impair, as between any Credit Party and the Administrative Agent or the Lenders, the obligations of any Credit Party under the Loan Documents.  In the event all or any part of the Guaranteed Obligations are transferred, endorsed or assigned by the Administrative Agent or any Lender to any Person or Persons in a manner permitted by this Agreement, any reference to “the Administrative Agent” or “the Lender” herein shall be deemed to refer equally to such Person or Persons.

SECTION 7.8.  Modification of Guaranteed Obligations, Etc.  Each Guarantor hereby acknowledges and agrees that the Administrative Agent and the Lenders may at any time or from time to time, with or without the consent of, or notice to, the Guarantors:

(a)

change or extend the manner, place or terms of payment of, or renew or alter all or any portion of, the Guaranteed Obligations;

(b)

take any action under or in respect of the Loan Documents in the exercise of any remedy, power or privilege contained therein or available to it at law, equity or otherwise, or waive or refrain from exercising any such remedies, powers or privileges;

(c)

subject to Section 14.02, amend or modify, in any manner whatsoever, the Loan Documents;

(d)

extend or waive the time for any Credit Party’s performance of, or compliance with, any term, covenant or agreement on its part to be performed or observed under the Loan Documents, or waive such performance or compliance or consent to a failure of, or departure from, such performance or compliance;

(e)

take and hold Collateral for the payment of the Guaranteed Obligations guaranteed hereby or sell, exchange, release, dispose of, or otherwise deal with, any property pledged, mortgaged or conveyed, or in which the Administrative Agent or the Lenders have been granted a Lien, to secure any Obligations;

(f)

release anyone who may be liable in any manner for the payment of any amounts owed by the Guarantors or any Credit Party to the Administrative Agent or any Lender;

(g)

modify or terminate the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors of any Guarantor or any Credit Party are subordinated to the claims of the Administrative Agent and the Lenders;

(h)

apply any sums by whomever paid or however realized to any amounts owing by any Guarantor or any Credit Party to the Administrative Agent or any Lender in such manner as the Administrative Agent or any Lender shall determine in its discretion; and/or

(i)

the Administrative Agent and the Lenders shall not incur any liability to the Guarantors as a result thereof, and no such action shall impair or release the Guaranteed Obligations of the Guarantors or any of them under the Guaranty.

SECTION 7.9.  Reinstatement.

(a)

The Guaranty shall remain in full force and effect and continue to be effective should any petition be filed by or against any Credit Party or any Guarantor for liquidation or reorganization, should any Credit Party or any Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of such Credit Party’s or such Guarantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Guaranteed Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by the Administrative Agent or any Lender, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or perf ormance had not been made.  In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Guaranteed Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(b)

If claim is ever made upon Administrative Agent or any Lender for repayment or recovery of any amount or amounts received in payment or on account of any of the Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) compliance by the Lenders or the Administrative Agent with any requirement of a Governmental Authority having jurisdiction over the Lenders or the Administrative Agent, then and in such event each Guarantor agrees that any such judgment, decree or order shall be binding upon it, notwithstanding any revocation of the Guaranty or other instrument evidencing any liability of the Borrower or any termination of this Agreement, and each Guarantor shall be and remain liable to the afo resaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.  In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Guaranteed Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

SECTION 7.10.  Waiver of Subrogation, Etc.  Notwithstanding anything to the contrary in the Guaranty or in any other Loan Document, each Guarantor hereby:

(a)

until the indefeasible payment and satisfaction in full in cash of the Guaranteed Obligations, expressly waives, on behalf of itself and its successors and assigns (including any surety), any and all rights at law or in equity to subrogation, to reimbursement, to exoneration, to contribution, to indemnification, to set off or to any other rights that could accrue to a surety against a principal, to a Guarantor against a principal, to a Guarantor against a maker or obligor, to an accommodation party against the party accommodated, to a holder or transferee against a maker, or to the holder of any claim against any Person, and which such Guarantor may have or hereafter acquire against any Credit Party in connection with or as a result of such Guarantor’s execution, delivery and/or performance of this Agreement, or any other documents to which such Guarantor is a par ty or otherwise; and

(b)

acknowledges and agrees (i) that this waiver is intended to benefit the Administrative Agent and the Lenders and shall not limit or otherwise effect any Guarantor’s liability hereunder or the enforceability of the Guaranty and (ii) that the Administrative Agent, the Lenders and their respective successors and assigns are intended third-party beneficiaries of the waivers and agreements set forth in this Section 12.10 and their rights under this Section 12.10 shall survive payment in full of the Guaranteed Obligations.

SECTION 7.11.  Election of Remedies.  If Administrative Agent may, under applicable law, proceed to realize benefits under any of the Loan Documents giving the Administrative Agent and the Lenders a Lien upon any Collateral owned by any Credit Party, either by judicial foreclosure or by non judicial sale or enforcement, the Administrative Agent may, at its sole option, determine which of such remedies or rights it may pursue without affecting any of such rights and remedies under this Guaranty.  If, in the exercise of any of its rights and remedies, the Administrative Agent shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Credit Party, whether because of any applicable laws pertaining to “election of remedies” or the like, the Guarantors hereby consent to such action by Administrative Agent and waive any claim based upon such action, even if such action by Administrative Agent shall result in a full or partial loss of any rights of subrogation which the Guarantors might otherwise have had but for such action by Administrative Agent.  Any election of remedies that results in the denial or impairment of the right of Administrative Agent to seek a deficiency judgment against any Credit Party shall not impair each Guarantor’s obligation to pay the full amount of the Guaranteed Obligations.  In the event Administrative Agent shall bid at any foreclosure or trustee’s sale or at any private sale permitted by law or the Loan Documents, Administrative Agent may bid all or less than the amount of the Guaranteed Obligations and the amount of such bid need not be paid by Administrative Agent but shall be credited against the Guaranteed Obligations.  The amount of the successful bid at any such sale shall be conclusively deemed to be the fair m arket value of the Collateral and the difference between such bid amount and the remaining balance of the Guaranteed Obligations shall be conclusively deemed to be the amount of the Guaranteed Obligations guaranteed under the Guaranty, notwithstanding that any present or future law or court decision or ruling may have the effect of reducing the amount of any deficiency claim to which the Administrative Agent and the Lenders might otherwise be entitled but for such bidding at any such sale.  

SECTION 7.12.  Funds Transfers.  If any Guarantor shall engage in any transaction as a result of which the Borrower is required to make a mandatory prepayment with respect to the Guaranteed Obligations under the terms of this Agreement, such Guarantor shall distribute to, or make a contribution to the capital of, the Borrower an amount equal to the mandatory prepayment required under the terms of this Agreement.

SECTION 7.13.  Further Assurances.  Each Guarantor agrees, upon the written request of the Administrative Agent, to execute and deliver to the Administrative Agent, from time to time, any additional instruments or documents reasonably considered necessary by the Administrative Agent to cause the Guaranty to be, become or remain valid and effective in accordance with its terms.

SECTION 7.14.  Payments Free and Clear of Taxes.  Except as set forth below, all payments required to be made by each Guarantor hereunder shall be made to the Administrative Agent and the Lenders free and clear of, and without deduction for, any and all present and future Taxes.  If any Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 12.14) the Administrative Agent or the Lenders, as applicable, receive an amount equal to the sum they would have received had no such deductions been made, (b) such Guarantor shall make such deductions and (c) such Guar antor shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law.  Notwithstanding the foregoing, no Guarantor should be required to pay any such additional amounts to Administrative Agent or a Lender with respect to any Taxes in respect of which the Borrower would not be required to pay any additional amounts pursuant to Section 3.04(a) if such Taxes were withheld or deducted by the Borrower and the payment had been made by the Borrower instead of the Guarantor.  Within thirty (30) days after the date of any payment of Taxes, each applicable Guarantor shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof.  Except as set forth below, each Guarantor shall jointly and severally indemnify and, within ten (10) days of receipt of written demand therefor, pay the Administrative Agent and each Lender for the full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 12.14) paid by the Administrative Agent or such Lender, as appropriate, with respect to any payment by or on account of any obligation of a Guarantor hereunder and any penalties, interest and reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.  Notwithstanding the foregoing, each Guarantor shall not be required to indemnify a Lender or Administrative Agent with respect to any Taxes in respect of which the Borrower would not be required to indemnify the Lender or Administrative Agent pursuant to Section 3.04(c) if the payment had been made by the Borrower and such Taxes arose with respect to any payment by or on account of any obligation of the Borrower.  Section 3.04(g) shall apply with respect to payments by a Guarantor pursuant to this Section 12.14 as it applies to payments by the Borrower pursuant to Section 3.04 .

SECTION 7.15.  Limitation on Amount Guarantied; Contribution by Guarantors.  Anything contained in this Article XII to the contrary notwithstanding, if any Fraudulent Transfer Law (as defined below) is determined by a court of competent jurisdiction to be applicable to the obligations of any Guarantor under this Agreement, such obligations of such Guarantor hereunder shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Guarantor, contingent or otherwise, that are re levant under the Fraudulent Transfer Laws (excluding, however, any liabilities of such Guarantor (a) in respect of intercompany indebtedness to Borrower or other affiliates of Borrower to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder and (b) under any guarantee of any subordinated indebtedness which guarantee contains a limitation as to maximum amount similar to that set forth in this Section 12.15, pursuant to which the liability of such Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount).

ARTICLE VIII
THE ADMINISTRATIVE AGENT

SECTION 8.1.  Appointment Powers and Immunities; Delegation of Duties, Liability of Administrative Agent.

(a)

Each Lender hereby irrevocably designates and appoints Canadian Imperial Bank of Commerce as Administrative Agent for itself and each Lender under this Agreement and the other Loan Documents.  Such Lender hereby irrevocably authorizes Administrative Agent to take such action on such Lender’s behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Administrative Agent agrees to act as such on the express conditions contained in this Article XIII.  The provisions of this Article XIII are solely for the benefit of the Administrative Agent and the Lenders.  Neither the Borrower nor any other Persons s hall have any rights as third-party beneficiaries of any of the provisions contained herein; provided, however, that the right to consent to a successor Administrative Agent as provided under Section 13.08 also shall be for the benefit of the Borrower.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Administrative Agent have or be deemed to have any fiduciary relationship with any Lender and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent; it being expressly understood and agreed that the use of the word “Administrative Agent” is for convenience only and that Administrative Agent is merely the representative of the Lenders, and has only the contractual duties set forth in this Agreement and the other Loan Documents.  Except as expressly otherwise provided in this Agreement, Administrative Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions which Administrative Agent is expressly entitled to take or assert under or pursuant to this Agreement and the other Loan Documents.  No Lender shall have any right of action whatsoever against Administrative Agent as a result of Administrative Agent acting or refraining from acting hereunder pursuant to such discretion and any action taken or failure to act pursuant to such discretion shall be binding on the Lenders.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to the Administrative Agent, each Lender agrees that, as long as this Agreement remains in effect:  (i) (A) the Adm inistrative Agent shall have the right to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Loans, the Collections and related matters and (B) the Administrative Agent shall have the right to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (ii) the Administrative Agent shall have the right to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents; (iii) the Administrative Agent shall have the right to make the Loans, for itself; (iv) the Administrative Agent shall have the right to exclusively receive, apply, and distribute the Collections as provided in the Loan Documents; (v) the Administrative Agent shall have the right to open and maintain such bank accoun ts and lock boxes as the Administrative Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collections and the Collateral; (vi) the Administrative Agent shall have the right to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Borrower, the Obligations, the Collateral, the Collections, or otherwise related to any of same as provided in the Loan Documents; and (vii) the Administrative Agent shall have the right to incur and pay such fees, charges, and expenses under the Loan Documents as the Administrative Agent reasonably may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.  The Administrative Agent may deem and treat the payee of any Obligation as the holder thereof for all purposes of the Loan Documents unless and until a notice of the assignment or transfer of such Obligation shall have been filed wit h the Administrative Agent.  Each Lender further consents to (x) the execution, delivery, and performance by the Administrative Agent of each Loan Document entered into by the Administrative Agent on behalf of the Lenders as contemplated by this Agreement, and (y) the terms of such Loan Documents.

(b)

Except as otherwise provided in this Section 13.01, the Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was made in compliance with this section and without gross negligence or willful misconduct.

(c)

None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct) or (ii) be responsible in any manner to any Lender for any recital, statement, representation or warranty made by any Credit Party or any Subsidiary or Affiliate of any Credit Party, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Credit Party or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Borrower or any of its Subsidiaries.

SECTION 8.2.  Reliance by Administrative Agent.  Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person, and upon advice and statements of legal counsel (including counsel to the Borrower or counsel to any Lender), independent accountants and other experts selected by Administrative Agent.  Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it first shall receive such advice or concurrence of the Lenders as it deems appropriate a nd until such instructions are received, Administrative Agent shall act, or refrain from acting, as it deems advisable.  If the Administrative Agent so requests, it first shall be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent in all cases shall be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all Lenders.  

SECTION 8.3.  Defaults.  Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Administrative Agent for the account of the Lenders, except with respect to Events of Default of which Administrative Agent has actual knowledge, and unless Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “Notice of Default”.  Administrative Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Administrative Agent has actual knowledge.  If any L ender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Administrative Agent of such Event of Default.  Each Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Sections 13.02 and 13.07, Administrative Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Article XI; provided, however, that unless and until Administrative Agent has received any such request, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

SECTION 8.4.  Rights as a Lender.  With respect to its Commitments and the Loans made by it, the Administrative Agent (and any successor acting as Administrative Agent, if any, as permitted by Section 13.08(a)) in its capacity as a Lender under the Loan Documents shall have the same rights, privileges and powers under the Loan Documents as any other Lender and may exercise the same as though it were not acting as Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity.  The Administrative Agent (and any successor acting as Administrative Agent) and its Affiliates may (without having to account for the same to any Lender) accept deposits from, lend money to, make investm ents in and generally engage in any kind of banking, trust or other business with the Borrower (and any of its Subsidiaries or Affiliates) as if it were not acting as Administrative Agent, and the Administrative Agent (and its successors) and its Affiliates may accept fees and other consideration from the Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

SECTION 8.5.  Costs and Expenses; Indemnification.  Administrative Agent may incur and pay fees, costs, and expenses under the Loan Documents to the extent Administrative Agent deems reasonably necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including without limiting the generality of the foregoing, court costs, reasonable attorneys fees and expenses, costs of collection by outside collection agencies and auctioneer fees and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not the Borrower is obligated to reimburse the Lenders for such expenses pursuant to the Loan Agreement or otherwise (to the extent the Borrower has not done so and without limiting its obligation to do so).  Each Lender her eby agrees that it is and shall be obligated to pay to or reimburse the Administrative Agent for the amount of such Lender’s Pro Rata Share thereof.  Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent the Borrower has not done so and without limiting the obligation of the Borrower to do so), according to their Pro Rata Shares, from and against any and all Indemnified Matters (including without limitation Indemnified Matters arising under any Environmental Law as provided in Section 14.18); provided, however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Matters resulting solely from such Person’s gross negligence or willful misconduct as determined in a final order by a court of competent jurisdiction.  Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon deman d for such Lender’s ratable share of any costs or out of pocket expenses (including reasonable attorneys fees and expenses) incurred by Administrative Agent in connection with the administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document.  The undertaking in this Section 13.05 shall survive the payment of all Obligations hereunder and the resignation or replacement of Administrative Agent.

SECTION 8.6.  Non-Reliance on Administrative Agent and Other Lenders.  Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Administrative Agent hereinafter taken, including any review of the affairs or Property of the Borrower and any of its Subsidiaries, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender.  Each Lender represents to Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and any other Person (other tha n the Lenders) party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and any other Person (other than the Lenders) party to a Loan Document.  Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by Administrative Agent, Administrative Agent shall not have any duty or resp onsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, Property, financial and other condition or creditworthiness of Borrower and any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.

SECTION 8.7.  Failure to Act.  Except for action expressly required of Administrative Agent under the Loan Documents, Administrative Agent shall in all cases be fully justified in failing or refusing to act under any Loan Document unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 13.05 against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

SECTION 8.8.  Resignation of Administrative Agent.  Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notice to the Lenders and the Borrower.  Upon any such resignation, the Required Lenders with the consent of the Borrower (which consent shall not be unreasonably withheld) shall have the right to appoint a successor Administrative Agent.  If no successor Administrative Agent shall have been appointed by the Required Lenders and consented to by the Borrower and no successor Administrative Agent shall have accepted such appointment within 30 days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Adminis trative Agent; provided, however, if the failure to do so was not a result of the failure by the Borrower to consent to any appointment, the Borrower shall retain the right to consent; provided, further, that if the failure to do so was not a result of the failure of the Required Lenders to appoint such successor, the Required Lenders shall obtain the right to consent to such successor.  Upon the acceptance of any appointment as the Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, remedies, powers, privileges, duties and obligations of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations, under the Loan Documents.  After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Article XIII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

SECTION 8.9.  Sub-Agents.  Each Lender by its execution and delivery of this Agreement (or any joinder hereto or any Assignment and Acceptance hereunder), agrees that, in the event it shall hold any monies or other investments on account of the Borrower, such monies or other investments shall be held in the name and under the control of such Lender, and such Lender shall hold such monies or other investments as a sub-agent for Administrative Agent under this Agreement and the other Loan Documents.  The Borrower, by its execution and delivery of this Agreement, hereby consents to the foregoing.

SECTION 8.10.  Communications by Borrower.  Except as otherwise provided in this Agreement, the Borrower’s communications with respect to the Loan Documents shall be with the Administrative Agent, and the Borrower shall be under no obligation to communicate directly with the Lenders.

SECTION 8.11.  Collateral Matters.

(a)

The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full of all Obligations; (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if the Borrower certifies in writing to the Administrative Agent that the sale or disposition is permitted under this Agreement or the other Loan Documents (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry); (iii) constituting Property in which the Borrower owned no interest at the time the security interest was granted or at any time thereafter; (iv) constituting property leased to the Borrower under a lease that has expired or is terminated in a transaction permitted under this Agreement; or (v) constituting Equipment which, in the aggregate with all other dispositions of Equipment covered by this clause (v), has a fair market value or book value, whichever is less, of $1,000,000 or less.  Upon request by the Administrative Agent or the Borrower at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 13.11; provided, however, that (1) the Administrative Agent shall not be required to execute any document necessary to evidence such release on terms that, in the Administrative Agent’s opinion, would expose the Administrative Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those express ly being released) upon (or obligations of the Borrower in respect of) all interests retained by the Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

(b)

Subject to Section 13.01(c)(i), the Administrative Agent shall have no obligation whatsoever to any other Lenders to assure that the Collateral exists or is owned by the applicable Credit Party or is cared for, protected, or insured or has been encumbered, or that the Lenders’ Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Administrative Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the terms and conditions contained herein, the Administrative Ag ent may act in any manner it may deem appropriate, in its sole discretion given the Administrative Agent’s own interest in the Collateral in its capacity as one of the Lenders and that the Administrative Agent shall have no other duty or liability whatsoever to any other Lender as to any of the foregoing, except as otherwise provided herein.

SECTION 8.12.  Restrictions on Actions by the Administrative Agent and the Lenders; Sharing Payments.

(a)

Each of the Lenders agrees that it shall not, without the express consent of the Administrative Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the request of the Administrative Agent, set off against the Obligations, any amounts owing by such Lenders to the Borrower or any accounts of the Borrower now or hereafter maintained with such Lenders.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so by the Administrative Agent, take or cause to be taken any action, including the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral the purpose of which is, or could be, to give such Lenders any preference or priority against the other Lenders with respect to the Collateral.

(b)

Subject to Section 13.04, if, at any time or times any Lender shall receive (i) by payment, foreclosure, set-off or otherwise, any proceeds of Collateral or any payments with respect to the Obligations arising under, or relating to, this Agreement or the other Loan Documents, except for any such proceeds or payments received by such Lender from the Administrative Agent pursuant to the terms of this Agreement or (ii) payments from the Administrative Agent in excess of such Lender’s ratable portion of all such distributions by the Administrative Agent, such Lender promptly shall turn the same over to the Administrative Agent, in kind, and with such endorsements as may be required to negotiate the same to the Administrative Agent, or in same-day funds, as applicable, for the account of the Lenders and for apportionment and application to the Obligations i n accordance with Section 3.01.

SECTION 8.13.  Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Administrative Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of the Administrative Agent, if any, to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments.  Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses , or liabilities of any other Lenders.  Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 13.05, Administrative Agent shall not have any liability for the acts of any Lender and no Lender shall have any liability for the acts of Administrative Agent or any other Lender.  No Lender shall be responsible to the Borrower or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for it or on its behalf in connection with its Commitment, nor to take any other action on its behalf hereunder or in connection with the financing contemplated herein.

ARTICLE IX
MISCELLANEOUS

SECTION 9.1.  Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied, emailed or delivered:

if to Borrower, at the following address:

c/o Oppenheimer & Co. Inc.

125 Broad Street, 16th Floor

New York, NY 10004

Telephone:  (212) 668-8000

Facsimile:  (212) 668-8081

Email:  albert.lowenthal@opco.com

Attention: Albert G. Lowenthal

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY  10036

Telephone:  (212) 735-2444

Facsimile:  (917) 777-2444

Email:  tgowan@skadden.com

Attention: Thomas W. Gowan

if to the Administrative Agent, at the following address:

Canadian Imperial Bank of Commerce

300 Madison Avenue, 6th floor

New York, New York 10017

Telephone:

(212) 856 3649

Facsimile:

(212) 885 4844

Email: gerald.girardi@us.cibc.com

Attn: Gerald Girardi

with operational notices to

CIBC Credit Processing Services

40 Dundas Street West, 5^th Floor

Toronto, ON Canada M5G 2C2

Telephone:

(416) 542-4502

Facsimile:

(416) 542-4558

Email:  blair.kissack@cibc.ca

Attn:  Blair Kissack

with a copy to:

Mayer Brown LLP

1675 Broadway

New York, NY 10019

Telephone:  (212) 506-2555

Facsimile:  (212) 849-5555

Email:  pjorissen@mayerbrown.com

Attn:  Paul A. Jorissen

or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 14.01.  All such notices and other communications shall be effective, (i) if mailed, when received or five (5) days after deposited in the mails as registered or certified (in each case with return receipt requested) with postage pre-paid and properly addressed, whichever occurs first, (ii) if telecopied, when transmitted and confirmation received, (iii) if emailed, when transmitted and confirmation acknowledged by recipient or (iv) if delivered, upon delivery, except that notices to the Administrative Agent pursuant to Article II shall not be effective until received by the Administrative Agent.

SECTION 9.2.  Amendments, Etc.  No amendment or waiver of any provision of this Agreement, any Loan or any other Loan Document, nor consent to any departure by any Credit Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Required Lenders (or the Administrative Agent at the request of the Required Lenders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:

(a)

in each case without the consent of the Administrative Agent, the Borrower and each Lender directly affected thereby;

(i)

subject such Lender to any additional obligations;

(ii)

reduce or forgive the principal of, or interest on, any Loan, fees or other amounts payable hereunder or release or discharge the Borrower from its obligations to make such payments;

(iii)

postpone any date fixed for any payment or principal of, or interest on, any Loan, any Obligations, fees or other amounts payable hereunder;

(iv)

other than as expressly permitted hereunder or in the other Loan Documents, release (or otherwise limit such Person’s liability with respect to its Obligations) the Borrower or any material Guarantor;

(v)

release, or permit the Credit Parties to otherwise dispose of, all or substantially all of the Collateral, or subordinate the right of the Administrative Agent and the Lenders with respect to all or substantially all of the Collateral (except as expressly permitted herein or in the other Loan Documents);

(vi)

amend, modify or waive Sections 2.05, 3.03(a), 3.03(b) or 3.03(c), 14.02 or the definition of “Pro Rata Share”;

(vii)

increase or extend any Commitment of such Lender;

(viii)

change the percentage specified in the definition of Required Lenders which shall be required for the Lenders or any of them to take any action under this Agreement.

Notwithstanding anything herein to the contrary, the consent of the FINRA is required for any amendment to this Agreement or the Security Agreement.

SECTION 9.3.  Non-Consenting Lenders.  If, in connection with any proposed amendment, waiver or consent requiring consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then so long as Administrative Agent is not a Non-Consenting Lender and no Default or Event of Default has occurred and is continuing, the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (a) another bank or other entity which is reasonably satisfactory to the Parent, Borrower and the Administra tive Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Acceptance and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 14.10 and (b) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (i) all principal, interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 3.05 and 5.02, and (ii) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 4.03 had the Loans of such Non-Consenting Lender been prepaid on such date rather th an sold to the replacement Lender.  Any processing or recordation fees associated with the transfer of a Non-Consenting Lender’s Loans shall be for the account of the Borrower.

SECTION 9.4.  No Waiver; Remedies, Etc.  No failure on the part of the Lenders or Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of the Lenders and Administrative Agent provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights of the Lenders and Administrative Agent under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Lenders and Administrative Agent to exercise any of their righ ts under any other Loan Document against such party or against any other Person.  

SECTION 9.5.  Expenses; Taxes; Attorneys’ Fees.  The Borrower will pay promptly following demand therefor, all reasonable fees, costs and expenses incurred by or on behalf of the Administrative Agent, including, without limitation, reasonable out-of-pocket fees, costs and expenses of counsel for the Administrative Agent, accounting, investigations, environmental assessments, miscellaneous disbursements, examination, travel, lodging and meals arising from or relating to:  (a) any requested amendments (other than amendments requested solely by the Lenders), waivers or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given, (b) the preservation and protection of any of the Lenders’ rights under this Agreement or the other Loan Documents, (c) the filing of any petition, complaint, answer, motion or other pleading by the Lenders, or the taking of any action in respect of the Collateral or other Security, in connection with this Agreement or any other Loan Document, (d) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other Security in connection with this Agreement or any other Loan Document, (e) any attempt to enforce any Lien or security interest in any Collateral or other Security in connection with this Agreement or any other Loan Document, (f) any attempt to collect from any Borrower or any other Credit Party, (g) during the continuance of an Event of Default, the receipt by any Lender of any advice from its professionals (including without limitation, the reasonable fees of its outside attorneys and consultants) with respect to any of the foregoing (to the extent that such fees, costs and expenses are not otherwise recoverable pursuant to any other provision of this Agreement or any other Loan Document), (h) all liabilities and costs arising from or in connection with the past, present or future operations of a Credit Party involving any damage to real or personal Property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such Property, (i) any Environmental Liabilities and Costs incurred in connection with facility of any Credit Party including any Remedial Action for any Hazardous Materials present or arising out of the operations of any facility of a Credit Party or (j) any liabilities and costs incurred in connection with any Environmental Lien.  Without limitation of the foregoing or any other provision of any Loan Document:  (x) the Borrower agrees to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions now or hereafter determined by the Lenders to be payable in connection with this Agreement or any other Loan Document, and the Borrower agrees to hold the Lenders harmless from and ag ainst any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions, (y) the Borrower agrees to pay all broker fees with respect to any broker retained by the Borrower or any of its Subsidiaries that may become due in connection with the transactions contemplated by this Agreement and (z) during the continuance of a Default or an Event of Default, if a Credit Party (A) fails to make any payments or deposits with respect to any taxes of any kind or nature to the extent that such payments or deposits are due and payable prior to delinquency, (B) fails to make any payments or deposits with respect to any other governmental assessment prior to the time that any Lien may inure against any property of any Credit Party, or (C) fails to make any payments or deposits with respect to any insurance premiums then due and payable or otherwise comply with Section 8.03, then the Administrative Agent, in th eir sole discretion and without prior notice to the Borrower, may do any or all of the following, without duplication:  (X) make payment of the same or any part thereof, (Y) in the case of any failure described in Section 14.05(z)(C), obtain and maintain insurance policies of the type described in Section 7.05 and take the actions with respect to such policies which are authorized pursuant to Section 12.21(c).  Any payment described above in clause (z) shall not constitute an agreement by the Lenders to make similar payments in the future or a waiver by the Lenders of any Event of Default under this Agreement.  The Administrative Agent need not inquire as to, or contest the validity of, any such obligation.  The foregoing to the contrary notwithstanding, the agreements set forth above in this Section 14.05 are subject to the limitations set forth in Section 9.07, solely to the extent applicable.  The Administrative Agent agr ee to provide to the Borrower an invoice with respect to each cost or expense incurred in connection with the Loan Documents by any Lender promptly upon the Administrative Agent’s receipt thereof, and agrees, upon the reasonable request of the Borrower, to provide reasonable backup information with respect to such costs or expenses (subject to the right of the Administrative Agent to take whatever steps are reasonably necessary to protect any confidential or privileged information which may be contained therein).

SECTION 9.6.  Right of Set-Off, Sharing of Payments, Etc.

(a)

Upon the occurrence and during the continuance of any Event of Default, and in addition to (and without limitation of) any right of set-off, banker’s lien or counterclaim any Lender may otherwise have, each Lender may, and is hereby authorized by the Borrower to, at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held for the credit or the account of the Borrower against any and all Obligations now or hereafter existing under any Loan Document, irrespective of whether or not the Lenders shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured.  During the continuance of any Event of Def ault, the Lenders may, and are hereby authorized to, at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held for the credit or the account of the Borrower against any and all Obligations now or hereafter existing under any Loan Document, irrespective of whether or not the Lenders shall have made any demand hereunder or thereunder.  The Lenders agree to notify the Borrower and the Administrative Agent promptly after any such set-off and application made by the Lenders, provided that the failure to give such notice to the Borrower shall not affect the validity of such set-off and application.  The rights of the Lenders under this Section 14.06 are in addition to other rights and remedies which the Lenders may have.

(b)

Nothing contained in this Section 14.06 shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or Obligation of the Borrower.  If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 14.06 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 14.06 to share in the benefits of any recovery on such secured claim.

SECTION 9.7.  Severability.  Any provision of this Agreement, which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 9.8.  Replacement of Lenders.  If any Lender requests compensation under Sections 3.04, 4.03, or 4.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.04, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 14.10), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provi ded that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld and (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts).  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 9.9.  Complete Agreement; Sale of Interest.  The Loan Documents constitute the complete agreement between the parties with respect to the subject matter hereof and thereof, supersede any previous agreement or understanding between them relating hereto or thereto and may not be modified, altered or amended except by an agreement in writing signed by the Credit Parties and the Lenders in accordance with Section 14.02.  The Credit Parties may not sell, assign or transfer any of the Loan Documents or any portion thereof, including their rights, title, interests, remedies, powers and duties hereunder or thereunder.  The Credit Parties hereby consent to any Lender’s sale of participations, assignment, transfer or other disposition, at any time or times, of any of the Loan Documents or of any porti on thereof or interest therein, including such Lender’s rights, title, interests, remedies, powers or duties thereunder, subject, in the case of a participation, assignment, transfer or other disposition, to the provisions of Section 14.10.

SECTION 9.10.  Assignment; Register.

(a)

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by any Credit Party without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Affiliates of the Administrative Agent) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)

Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining outstanding amount of the Loans at the time owing to it (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) or in the case of an assignment to an entity described in clause (a), (b) or (c) of the definition of Eligible Assignee, any such assignment shall not be less than $1,000,000, unless the Administrative Agent otherwise consents (such consent not to be unreasonably withheld or delayed), and (ii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance .  Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.04, 4.03, 4.04 and 14.17 to the extent any claim thereunder relates to an event arising or such Lender’s status or activity as Lender prior to such assignmen t.  Upon its receipt of an Assignment and Acceptance executed by an assigning Lender, an Eligible Assignee, the Administrative Agent and any other Person whose consent is required by this Section 14.10, together with a processing and recordation fee of $3,500 (except in the case of an assignment to an Affiliate of the assigning Lender or an Approved Fund of the assigning Lender, the processing and recordation fee shall be $500), and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire and an original tax form.

(c)

Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 14.10 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.  

(d)

The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender (for purposes of confirming its Commitment only), at any reasonable time and from time to time upon reasonable prior notice.  The Borrower may request in writing a copy of the Register from time to time and the Administrative Agent will promptly deliver a copy of such Register to the Borrower promptly thereafter.

(e)

Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower and the Lender Group shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall re tain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clauses (a)(ii) or (a)(iii) of the proviso to Section 14.02 that affects such Participant.  Subject to paragraph (f) of this Section the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.04, 4.03 and 4.04 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 14.06 as though it were a Lender, provided such Participant agrees to be subject to Section 3.03 as though it were a Lender.

(f)

A Participant shall not be entitled to receive any greater payment under Section 3.04 or Article IV than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 3.04 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.04 as though it were a Lender.

(g)

Any Lender may, without the consent of the Borrower or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation (i) any pledge or assignment to secure obligations to a Federal Reserve Bank and (ii) in the case of any Lender that is a Fund, any pledge or assignment of all or any portion of such Lender’s rights under this Agreement to any holders of obligations owed, or securities issued, by such Lender as security for such obligations or securities, or to any trustee for, or any other representative of, such holders, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.11.  Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Agreement or any of the other Loan Documents by telecopy shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Loan Documents.  Any party delivering an executed counterpart of any such agreement by telecopy shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

SECTION 9.12.  GOVERNING LAW.  THIS AGREEMENT, THE NOTES AND, EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.13.  CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS FOR NOTICES SET FORTH IN SECTION  14.01, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDERS OR THE ADMINISTRATIVE AGENT TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.  THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

SECTION 9.14.  WAIVER OF JURY TRIAL, ETC.  THE BORROWER, THE LENDERS AND THE ADMINISTRATIVE AGENT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE BORROWER CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDERS OR THE ADMINISTRATIVE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS OR THE ADMINISTRATIVE AGENT WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  THE BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS AND THE ADMINISTRATIVE AGENT ENTERING INTO THIS AGREEMENT.

SECTION 9.15.  Consent.  Except as otherwise expressly set forth herein or in any other Loan Document to the contrary, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of the Lenders or Administrative Agent, shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which the Borrower or any other Guarantors are parties and to which the Lenders or Administrative Agent have succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by the Lenders or Administrative Agent with or without any reason in their reasonable discretion.

SECTION 9.16.  Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the Lenders, Administrative Agent or the Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

SECTION 9.17.  Reinstatement; Certain Payments.  If any claim is ever made upon the Lenders or Administrative Agent for repayment or recovery of any amount or amounts received by the Lenders or Administrative Agent in payment or received on account of any of the Obligations, the Lenders or Administrative Agent shall give prompt notice of such claim to the Borrower, and if the Lenders or Administrative Agent repay all or part of such amount by reason of (i) any judgment, decree or order of any court of competent jurisdiction or administrative body having jurisdiction over the Lenders or Administrative Agent or any of their respective property, or (ii) compliance by the Lenders or Administrative Agent with any requirement of a Governmental Authority having jurisdiction over the Lenders or Administrative Agent, then an d in such event the Borrower agrees that (A) any such judgment, decree or order shall be binding upon it notwithstanding the cancellation of any instrument evidencing the Obligations or the other Loan Documents or the termination of this Agreement or the other Loan Documents and (B) it shall be and remain liable to the Lenders or Administrative Agent hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Lenders or Administrative Agent.

SECTION 9.18.  Indemnification.  In addition to the Borrower’s other Obligations under this Agreement, the Borrower agrees to defend, protect, indemnify and hold harmless the Lenders and each of their respective Affiliates and their officers, directors, trustees, employees, agents and advisors, the Administrative Agent, the Agent-Related Persons and the Lender-Related Persons (collectively called the “Indemnitees”) from and against any and all claims, losses, demands, settlements, damages, liabilities, obligations, penalties, fines, fees, reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses, but excluding income, franchise and similar taxes of an Indemnitee) incurred by such Indemnitees (but not taxes, which shall be governed by Section  ;3.04), whether prior to or from and after the Closing Date, as a result of or arising from or relating to or in connection with any of the following:  (i) the Administrative Agent or the Lenders furnishing of funds to the Borrower under this Agreement, including, without limitation, the management of any such Loans, (ii) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents, (iii) any claim, litigation, investigation or administrative or judicial proceeding in connection with any transaction consummated under the Loan Documents or (iv) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (it being understood and agreed that the indemnifications provisions herein do not cover any other transaction, action or proceeding under the Asset Purchase Agreement or contemplated thereby), including without limitation, claims, litigations, investigations or other proceedings arising out of (A) the presence, disposal, Release or threatened Release of any Hazardous Materials on, in, at, to, from or under any property at any time owned or occupied by the Borrower or any of its Subsidiaries (or any of their respective predecessors in interest or title) or at any facility which received Hazardous Materials generated by the Borrower or any of its Subsidiaries or any of their respective predecessors in interest in connection with the receipt of such Hazardous Materials, (B) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to any Hazardous Materials generated by the Borrower or any of its Subsidiaries, (C) any investigation, lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Materials, (D) any violation of any Environmental Law by the Borrower or any of its Subsidiaries or any of their respective predecessors in interest, and/or (E) any Environmental Action (collectively, the “Indemnified Matters”); provided, however, that the Borrower shall not have any obligation to any Indemnitee under this Section 14.18 for any Indemnified Matter to the extent resulting from the bad faith, gross negligence or willful misconduct of such Indemnitee; provided, however, that no Credit Party shall be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to up to one local counsel in each applicable local jurisdiction) for all Indemnitees under this Section 14.18 unless on advice of outside counsel, representation of all such Indemnitees would be inappropriate due to the existence of an actual or potential conflict of interest.  It is further agreed that notwithstanding anything to the contrary herein, no Credit Party shall have any liability to any Indemnitee for any Indemnified Matters that such Indemnitee has agreed to indemnify such Credit P arty against pursuant to the terms of the Asset Purchase Agreement.  Such indemnification for all of the foregoing losses, damages, fees, costs and expenses of the Indemnitees shall be due and payable promptly after demand therefor.  To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 14.18 may be unenforceable because it is violative of any law or public policy, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.  This Indemnity shall survive the repayment of the Obligations and the discharge of the Liens granted under the Loan Documents.  

SECTION 9.19.  Interest.  It is the intention of the parties hereto that Administrative Agent and each Lender shall conform strictly to usury laws applicable to it.  Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to Administrative Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to Administrative Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows:  (i) the aggregate of all co nsideration which constitutes interest under law applicable to Administrative Agent or any Lender that is contracted for, taken, reserved, charged or received by Administrative Agent or such Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by Administrative Agent or such Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by Administrative Agent or such Lender, as applicable, to the Borrower); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to Administrative Agent or any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by Administrative Agent or such Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by Administrative Agent or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by Administrative Agent or such Lender to the Borrower).  All sums paid or agreed to be paid to Administrative Agent or any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to Administrative Agent or such Lender, be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law.  If at any time and from time to time, (x) the amount of interest payable to Administrative Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to Administrative Agent or such Lender pursuant to this Section 14.19 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to Administrative Agent or such Lender would be less than the amount of interest payable to Administrative Agent or such Lender computed at the Highest Lawful Rate applicable to Administrative Agent or such Lender, then the amount of interest payable to Administrative Agent or such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to Administrative Agent or such Lender until the total amount of interest payable to Administrative Agent or such Lender shall equal the total amount of interest which would have been payable to Administrative Agent or such Lender if the total amount of interest had been computed without giving effect to this Section 14.19.

For purposes of this Section 14.19, the term “applicable law” shall mean that law in effect from time to time and applicable to the loan transaction between the Borrower, on the one hand, and Administrative Agent and the Lenders, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.

SECTION 9.20.  Records.  The unpaid principal of, and interest on, the Obligations, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability and the Commitment shall at all times be ascertained from the records of the Lender and Administrative Agent, which shall be conclusive and binding absent manifest or demonstrable error.

SECTION 9.21.  Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Borrower, Parent, Guarantors, the Lenders and Administrative Agent, and their respective successors and assigns, subject to Section 14.10.

SECTION 9.22.  Confidentiality.  The Lenders and the Administrative Agent each agree (on behalf of itself and each of its Affiliates, directors, officers, employees and representatives) (each, a “Recipient”) to hold in complete confidence and not disclose, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Credit Parties pursuant to this Agreement or the other Loan Documents (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), or available to suc h Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information, provided that nothing herein shall limit the disclosure of any such information (a) to the extent required by statute, rule, regulation or judicial process, (b) to the Lender, Administrative Agent, to counsel, accountants, auditors and other advisors for such member of the Lenders, or to counsel for any other member of the Lenders (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential pursuant to the terms hereof), (c) any actual or prospective counterparty (or its advisors) to any Hedging Agreement or other swap or derivative transaction relating to Borrower or any of its Subsidiaries and their obligations so long as such counter party or prospective counterparty first agrees in writing to the confidentiality provisions of t his Section 14.22, (d) to examiners, auditors or accountants to the extent required by any court, governmental or administrative agency, pursuant to any subpoena or other legal process, or by any law, statute, regulation or court order, or in connection with any litigation to which Administrative Agent or any of the Lenders are party, (e) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first agrees in writing to the confidentiality provisions of this Section 14.22, (f) to any Person that is an investor or prospective investor in a Securitization that agrees that its access to information regarding the Credit Parties and the Loans is solely for purposes of evaluating an investment in such Securitization and agrees in writing to maintain the confidentiality of such information in accordance herewith or (g) to a Person that is a trustee, collateral manager, servicer, no teholder, rating agency or secured party in a Securitization in connection with the administration, servicing and reporting on the assets serving as collateral for such Securitization, so long as such person agrees in writing to maintain the confidentiality of such information.

Upon the request of the Borrower to a Recipient on or after the Maturity Date, and subject to applicable law, rule or policy, such Recipient shall destroy any Borrower-related confidential information to the extent consistent with such Recipient’s document retention policies

SECTION 9.23.  Lender Advertising.  Administrative Agent and the Lenders shall be entitled to advertise the closing of the transactions contemplated by this Agreement in such trade publications, business journals, newspapers of general circulation and otherwise, as the Administrative Agent and the Lenders shall deem appropriate, including, without limitation, the publication of a tombstone announcing the closing of this transaction; provided that the Administrative Agent and the Lenders shall obtain written consent of the Borrower prior to disseminating any advertisement described in this Section 14.23 which consent shall not be reasonably withheld.

SECTION 9.24.  Common Enterprise.  The successful operation and condition of each of the Credit Parties is dependent on the continued successful performance of the functions of the group of the Credit Parties as a whole and the successful operation of each of the Credit Parties is dependent on the successful performance and operation of each other Credit Party.  Each Credit Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Credit Parties and (ii) the credit extended by the Lenders to the Borrower hereunder, both in their separate capacities and as members of the group of companies.  Each Credit Party has determined that executio n, delivery and performance of this Agreement and any other Loan Documents to be executed by such Credit Party is within its purpose, will be of direct and indirect benefit to such Credit Party, and is in its best interest.

SECTION 9.25.  USA PATRIOT ACT.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.  

SECTION 9.26.  Amendments to the Existing Credit Agreement.  In the event the parties thereto enter into any amendment, waiver or consent permitted hereunder in respect of any of the Existing Credit Agreement or any other Loan Document (as defined in the Existing Credit Agreement) for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any representations and warranties similar to those set forth in Article VI, any reporting covenants similar to those set forth in Article VII, any affirmative covenants similar to those set forth in Article VIII, any negative covenants similar to those set forth in Article IX, any financial covenants similar to those set forth in Article X, or any events of default similar to those set forth in Article XI of any Loan Document (as defined in the Existing Credit Agreement), then such amendment, waiver or consent shall, upon prior notice from the administrative agent under the Existing Credit Agreement or the Borrower to the Administrative Agent or to the Required Lenders, apply automatically to any comparable provision of this Agreement and the comparable Loan Document without the consent of the Administrative Agent, Lenders, the Parent, the Borrower or any Guarantor and without any action by the Administrative Agent, Lenders, the Parent, the Borrower or any Guarantor; provided, that (A) no such amendment, waiver or consent shall have the effect of (i) imposing duties on the Administrative Agent without its consent or (ii) modifying the terms of subordination under Article XV in this Agreement; and (B) the failure of any such notice to be given shall not create any liability on the part of the administrative agent under the Existing Credit Agreement or any Secured Creditor (as defined in the Existing Credit Agreement) , or impair or affect the Administrative Agent’s or any Lender’s obligations to the administrative agent under the Existing Credit Agreement or any Secured Creditor (as defined in the Existing Credit Agreement), the rights of the agents under the Existing Credit Agreement hereunder, the enforceability of this Agreement or any liens created or granted under any Loan Document (as defined in the Existing Credit Agreement), or limit or impair the effectiveness or effect in the Loan Documents (as defined in the Existing Credit Agreement) of any such amendment, waiver or consent.   

SECTION 9.27.  Schedules.  The parties to this Agreement acknowledge and agree that all Schedules to this Agreement provided as of the Closing Date are provided immediately prior to giving effect to the closing of the transactions contemplated under the Asset Purchase Agreement.

ARTICLE X
SUBORDINATION

SECTION 10.1.  Agreement to Subordinate.  The Borrower agrees, and each Lender agrees, that the Indebtedness evidenced by the Notes and this Agreement is subordinated in right of payment, to the extent and in the manner provided in this Article XV, to the prior payment in full of all Senior Debt, and that the subordination is for the benefit of the holders of Senior Debt.

SECTION 10.2.  Liquidation; Dissolution; Bankruptcy.  Upon any distribution to creditors of the Borrower in a liquidation or dissolution of the Borrower or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Borrower or its property or in an assignment for the benefit of creditors or any marshalling of the assets and liabilities of the Borrower:

(1)

holders of Senior Debt shall be entitled to receive payment in full of all obligations with respect to the Senior Debt (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt) before the Lenders shall be entitled to receive any payment of any Obligations with respect to the Notes or this Agreement; and

(2)

until all obligations with respect to Senior Debt (as provided in subsection (1) above) are paid in full, any distribution to which the Lenders would be entitled but for this Article XV shall be made to holders of Senior Debt, except that the Lenders may receive securities that are subordinated to at least the same extent as the Notes to (a) Senior Debt and (b) any securities issued in exchange for Senior Debt.

SECTION 10.3.  Payment Default on Senior Debt.  The Borrower may not make any payment or distribution to the Administrative Agent in respect of obligations with respect to the Notes or this Agreement until all obligations with respect to the Senior Debt have been paid in full if:

(i)

a default in the payment of any obligations with respect to the Senior Debt occurs and is continuing beyond any applicable grace period in the documentation evidencing the Senior Debt; or

(ii)

a default, other than a payment default, on the Senior Debt occurs and is continuing that then permits holders of the Senior Debt to accelerate its maturity, and such default is the subject of judicial proceedings or the Administrative Agent receives a notice of the default from a Person who may give it pursuant to Section 15.11 hereof.  If the Administrative Agent receives any such notice, a subsequent notice received within 360 days thereafter shall not be effective for purposes of this Section.  No nonpayment default which existed or was continuing on the date of delivery of any such notice to the Administrative Agent shall be, or be made, the basis for a subsequent notice unless such default shall have been cured or waived for a period of not less than 90 days.

The Borrower may and shall resume payments on and distributions in respect of the Notes when:

(1)

the default is cured or waived, or

(2)

in the case of a default referred to in Section 15.03(ii) hereof, 180 days pass after notice is received if the default is not the subject of judicial proceedings,

if this Article otherwise permits the payment at the time of such payment.

SECTION 10.4.  Acceleration of Notes.  If payment of the Notes or obligations due under this Agreement are accelerated because of an Event of Default, the Borrower shall promptly notify holders of Senior Debt of the acceleration.

SECTION 10.5.  When Distribution Must Be Paid Over.  In the event that the Administrative Agent or any Lender receives any payment of any obligations with respect to the Notes or this Agreement at a time when the Administrative Agent has actual knowledge that such payment is prohibited by Section 15.03 hereof, such payment shall be held by the Administrative Agent or such Lender, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.

If a distribution is made to the Administrative Agent or any Lender that because of this Article XV should not have been made to it, the Administrative Agent or such Lender who receives the distribution shall hold it in trust for the benefit of, and, upon written request, pay it over to, the holders of Senior Debt for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.

With respect to the holders of Senior Debt, the Administrative Agent undertakes to perform only such obligations on the part of the Administrative Agent as are specifically set forth in this Article XV, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Article XV against the Administrative Agent.  The Administrative Agent shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if the Administrative Agent shall pay over or distribute to or on behalf of Lenders or the Borrower or any other Person money or assets to which any holders of Senior Debt shall be entitled by virtue of this Article XV, except if such payment is made as a result of the willful misconduct or gross negligence of the Administrative Agent.

SECTION 10.6.  Notice by Borrower.  The Borrower shall promptly notify the Administrative Agent of any facts known to the Borrower that would cause a payment of any obligations with respect to the Notes or this Agreement to violate this Article XV, but failure to give such notice shall not affect the subordination of the Notes and this Agreement to the Senior Debt as provided in this Article XV.

SECTION 10.7.  Subrogation.  After all Senior Debt is paid in full and until the Notes and obligations due under this Agreement are paid in full, the Lenders shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes and the obligations due under this Agreement) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Lenders have been applied to the payment of Senior Debt.  A distribution made under this Article XV to holders of Senior Debt that otherwise would have been made to Lenders is not, as between the Borrower and Lenders, a payment by the Borrower on the Notes and the obligations due under this Agreement.

SECTION 10.8.  Relative Rights.  This Article XV defines the relative rights of the Lenders and holders of Senior Debt.  Nothing in this Article XV shall:

(1)

impair, as between the Borrower and the Lenders, the obligation of the Borrower, which is absolute and unconditional, to pay principal of and interest on the Loans in accordance with their terms of this Agreement;

(2)

affect the relative rights of the Lenders and creditors of the Borrower other than their rights in relation to holders of Senior Debt; or

(3)

prevent the Administrative Agent or any Lender from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to the Lenders.

If the Borrower fails because of this Article XV to pay principal of or interest due under this Agreement on the due date, the failure is still a Default or Event of Default.

SECTION 10.9.  Subordination May Not Be Impaired by Borrower.  No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Notes and this Agreement shall be impaired by any act or failure to act by the Borrower any Lender or by the failure of the Borrower or any Lender to comply with this Article XV.

SECTION 10.10.  Distribution or Notice.  Upon any payment or distribution of assets of the Borrower referred to in this Article XV, the Administrative Agent and the Lenders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of the Administrative Agent under the documentation evidencing the Senior Debt or to the Lenders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Borrower, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to his Article XV.  

SECTION 10.11.  Rights of Administrative Agent.  Notwithstanding the provisions of this Article XV, the Administrative Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Administrative Agent, and the Administrative Agent may continue to make payments on the Notes and this Agreement, unless the Administrative Agent shall have received at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Notes and this Agreement to violate this Article XV.  Only the Borrower or the Administrative Agent under the Existing Credit Agreement may give the notice.  

SECTION 10.12.  Authorization to Effect Subordination.  Each Lender authorizes and directs the Administrative Agent on the Lender’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article XV, and appoints the Administrative Agent the Lender’s attorney-in-fact for any and all such purposes.  If the Administrative Agent does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 15.08 hereof at least 30 days before the expiration of the time to file such claim, the Lenders are hereby authorized to file an appropriate claim for and on behalf of the Lenders.

SECTION 10.13.  No Modification.  The provisions of this Article XV and the defined terms used in this Article XV are for the benefit of the holders from time to time of Senior Debt and, so long as any Senior Debt or any commitments with respect thereto remain outstanding, such provisions and defined terms may not be modified, rescinded or canceled in whole or in part; provided that the provisions of this Article XV and the defined terms used in this Article XV may be modified, amended or supplemented by the parties to this Agreement upon obtaining the prior written consent of the Required Lenders (as defined by the Existing Credit Agreement or any Permitted Refinancing thereof) as in effect on the date hereof.

SECTION 10.14.  Reinstatement.  If, at any time, all or part of any payment with respect to Senior Debt previously made by the Borrower or any other Person is rescinded for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of the Borrower or such other Person), the subordination provisions set forth herein shall continue to be effective or be reinstated, as the case may be, all as though such payment had not been made.

SECTION 10.15.  Proofs of Claim.  If, while any Senior Debt is outstanding, any Event of Default of this Agreement, with respect to any Credit Party, occurs, the Administrative Agent and each Lender shall, to the extent permitted by applicable law, duly and promptly take such action as any agent of the Senior Debt may reasonably request to collect any payment hereunder to which the holders of Senior Debt may be entitled hereunder, and to file appropriate claims or proofs of claim in respect of this Agreement.  Upon the failure of the Administrative Agent or any Lender to take any such action, the agents of the Senior Debt are hereby irrevocably authorized and empowered (in its own name or otherwise and to the extent permitted by applicable law), but shall have no obligation, to demand, use, collect and receive every paym ent or distribution referred to hereunder and to file claims and proofs of claim with respect to this Agreement and the Administrative Agent and the Lenders hereby appoint such agent of the Senior Debt as attorney-in-fact for such Persons to take any and all actions permitted by this paragraph to be taken by such Persons; provided, however, that such agent shall only be permitted to file such proofs of claim upon notice to the Administrative Agent and each Lender and to the extent that the Administrative Agent and Lenders have failed to make such filings by the date which is ten (10) days prior to the last date on which such Persons are permitted to make such filings under the Bankruptcy Code.

SECTION 10.16.  Enforcement of Rights.  The Borrower, the Administrative Agent and the Lenders hereby expressly agree that the holders of Senior Debt may enforce any and all rights derived herein by suit, either in equity or at law, for specific performance of any agreement contained in this Article XV or for judgment at law and any other relief whatsoever appropriate to such action or procedure.

SECTION 10.17.  Subordination of Guarantees.  Without limiting the foregoing, the obligations of each Guarantor under any Guaranty shall be junior and subordinated to the Senior Debt on the same basis as the Obligations under this Agreement are junior and subordinated to the Senior Debt.  For the purposes of the foregoing sentence, the Administrative Agent and the Lenders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may be entitled to receive and/or retain payments in respect of this Agreement pursuant to this Agreement, including this Article XV.

(signature pages follow)

1

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

BORROWER:

E.A. VINER INTERNATIONAL CO.

By:

Name:

Title:

PARENT:

OPPENHEIMER HOLDINGS INC.

By:

Name:

Title:

GUARANTOR:

VINER FINANCE INC.

By:

Name:

Title:

ADMINISTRATIVE AGENT:

CANADIAN IMPERIAL BANK OF COMMERCE

By:

Name:

Title:

LENDER:

CIBC INC.

By:

Name:

Title:

2

EX-10

EXHIBIT 10.13

WAREHOUSE FACILITY AGREEMENT

by and among

OPY CREDIT CORP.

and

CANADIAN IMPERIAL BANK OF COMMERCE,
as Lender

Dated as of January 14, 2008

TABLE OF CONTENTS

Page

ARTICLE I.

DEFINITIONS; CERTAIN TERMS

1

SECTION 1.01

Definitions

1

SECTION 1.02

Terms Generally

12

SECTION 1.03

Accounting Terms

12

SECTION 1.04

Time References

12

SECTION 1.05

Letter of Credit Amounts

12

ARTICLE II.

THE FACILITY

12

SECTION 2.01

The Warehouse Facility

12

SECTION 2.02

Approval Procedures

13

SECTION 2.03

Financing Commitment Procedures

14

SECTION 2.04

Client Interface and Syndication Procedures

14

SECTION 2.05

Closing and Funding Procedures

15

SECTION 2.06

Treatment of Excess Retention

16

SECTION 2.07

Extension of Maturity Date

16

SECTION 2.08

First Offer Rights

16

SECTION 2.09

Assignment Fees

16

ARTICLE III.

TERMINATION OF WAREHOUSE FACILITY; CHANGE IN LAW

17

SECTION 3.01

Voluntary Reduction of Warehouse Facility

17

SECTION 3.02

Termination of Warehouse Facility

17

SECTION 3.03

Change in Law.

17

ARTICLE IV.

ADMINISTRATION AND SERVICING OF CREDIT FACILITIES

18

SECTION 4.01

Duties of Lender

18

SECTION 4.02

Administration Fee and Expenses

18

SECTION 4.03

Lender’s Certificate

18

ARTICLE V.

CONDITIONS TO ISSUANCE OF FINANCING COMMITMENTS

18

SECTION 5.01

Conditions Precedent to Initial Commitment Issuance

18

SECTION 5.02

Conditions to all Financing Commitment Issuances

20

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

20

SECTION 6.01

Representations and Warranties

20

ARTICLE VII.

REPORTING COVENANTS

22

SECTION 7.01

Financial Statements

22

SECTION 7.02

Other Information and Event Reporting

23

SECTION 7.03

Potential Termination Events, Termination Events

23

SECTION 7.04

Other Information

24

ARTICLE VIII.

AFFIRMATIVE COVENANTS

24

SECTION 8.01

Compliance with Laws

24

SECTION 8.02

Payment of Taxes and Claims

24

SECTION 8.03

Conduct of Business and Preservation of Corporate Existence

24

SECTION 8.04

Inspection of Property; Books and Records; Discussions

24

SECTION 8.05

Further Assurances

25

SECTION 8.06

Powers; Conduct of Business

25

ARTICLE IX.

NEGATIVE COVENANTS

25

SECTION 9.01

Liens

25

SECTION 9.02

Consolidation, Merger, Subsidiaries, Etc

25

SECTION 9.03

Collateral Dispositions, Etc

26

SECTION 9.04

Negative Pledges

26

SECTION 9.05

Investment Company Act of 1940

26

SECTION 9.06

Impairment of Security Interests

26

ARTICLE X.

[RESERVED]

26

ARTICLE XI.

TERMINATION EVENTS, RIGHTS AND REMEDIES

26

SECTION 11.01

Termination Events

26

SECTION 11.02

Remedies

28

SECTION 11.03

Waivers by OPY Credit Corp

28

ARTICLE XII.

MISCELLANEOUS

29

SECTION 12.01

Notices, Etc

29

SECTION 12.02

Amendments, Etc

30

SECTION 12.03

Expenses; Taxes; Attorneys’ Fees

30

SECTION 12.04

Right of Set-Off, Sharing of Payments, Etc

31

SECTION 12.05

Severability

32

SECTION 12.06

Complete Agreement

32

SECTION 12.07

Assignment

32

SECTION 12.08

Counterparts

32

SECTION 12.09

GOVERNING LAW

33

SECTION 12.10

CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE

33

SECTION 12.11

WAIVER OF JURY TRIAL, ETC

33

SECTION 12.12

Consent

34

SECTION 12.13

Interpretation

34

SECTION 12.14

Reinstatement; Certain Payments

34

SECTION 12.15

Binding Effect

34

SECTION 12.16

Confidentiality

34

SECTION 12.17

USA Patriot Act

35

SECTION 12.18

Initial Lender

35

-i-

EXHIBITS

EXHIBIT A

[Intentionally Omitted]

EXHIBIT B-1

Form of Opinion of Counsel to Opco

EXHIBIT B-2

Form of Opinion of General Counsel to Opco

EXHIBIT C

Form of Officer’s Certificate

EXHIBIT D

Form of Syndication Status Report

EXHIBIT E

Form of Portfolio Status Report

EXHIBIT F

Form of Report on Outstanding Credit Facilities

WAREHOUSE FACILITY AGREEMENT

This Warehouse Facility Agreement, dated as of January 14, 2008 (the “Agreement”), by and between OPY CREDIT CORP., a corporation formed under the laws of the State of New York (“OPY Credit Corp.”), and CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered bank (the “Lender”).

RECITALS

WHEREAS, OPY Credit Corp. has requested that the Lender extend Financing Commitments to third parties identified by OPY Credit Corp. and administer any Credit Extensions resulting therefrom, on the terms and conditions set forth herein; and

WHEREAS, the Lender is willing to extend Financing Commitments and administer any Credit Extensions thereunder upon the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.
DEFINITIONS; CERTAIN TERMS

SECTION 1.1  Definitions.  As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

“Accepted Commitments” means Financing Commitments that the Lender has issued upon the approval of the Special Credit Committee, and have been accepted by or on behalf of the respective borrower.

“Administrative Fee” means the monthly fee payable by OPY Credit Corp. pursuant to Section 4.02 for the services of the Lender’s Credit Personnel.

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied 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 specified Person, whether through the ownership of voting Securities or by contract or otherwise.

“Agreement” means this Warehouse Facility Agreement, together with all Exhibits and Schedules hereto, as such agreement may be amended, supplemented or otherwise modified from time to time.

“Applicable Law” means, in respect of any Person, all provisions of constitutions, laws, statutes, rules, regulations, treaties, directives, guidelines and orders of Governmental Authorities applicable to such Person, including zoning ordinances, all Environmental Laws, and all orders, decisions, judgments and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.

“Approved Borrower” means a Person that has been approved by the Special Credit Committee, in its discretion, exercised in good faith in accordance with the Lender’s approval practices and requirements as in effect from time to time.

“Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of November 2, 2007 among the Parent, CIBC World Markets Corp. and various affiliates, as the same may be amended, amended and restated or otherwise modified from time to time.

“Assignment Fees” means each of the assignment fees payable to the Lender or its Affiliates in their respective capacities as administrative agents under any syndicated Credit Facilities, in the amount set forth in the relevant syndicated loan agreement.

“Availability Period” means the period from the Closing Date to the Maturity Date.

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time, and any successor statute.

“Benefit Plan” means an employee pension benefit plan, excluding any Multiemployer Plan, which is subject to Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“Business Day” means any day that is not a Saturday, a Sunday or a day on which commercial banks are required or permitted to be closed in the State of New York.

“Capitalized Lease Obligations” means, with respect to any Person, obligations of such Person and its Subsidiaries as lessee under Capitalized Leases as determined in accordance with GAAP.

“Capital Stock” means (a) with respect to any Person that is a corporation, any and all shares, options, warrants, interests, participations or other equivalents (however designated and whether or not voting) of or in a Person, including common stock, preferred stock or any other “equity security” and (b) with respect to any Person that is not a corporation, any and all partnership, limited liability company interests or other equity interests of such Person excluding, in the case of clauses (a) and (b) above, any debt security that is exchangeable for or convertible into such capital stock.

“Cash Equivalent” means, at any time:

(a)

any direct obligation of (or unconditionally guaranteed by) the United States or a State thereof (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States or a State thereof) maturing not more than one year after such time; or

(b)

such other securities as may be acceptable to the Lender in its sole discretion.

A “Change of Control” shall be deemed to occur if, collectively, the Permitted Holders fail to retain beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act), directly or indirectly, of a majority of the Voting Stock (as defined below) of OPY Credit Corp.  As used in this definition, “Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right to so vote has been suspended by the happening of such a contingency.

“Clearing Agreement Exposure” means the maximum principal amount available to Oppenheimer & Co. Inc. under that certain Opco Margin Agreement with CIBC World Markets Corp. dated as of the Closing Date (or a date thereafter), as the same may be amended from time to time.

“Closing” means, for any Credit Facility, the day on which all of the conditions precedent to the effectiveness thereof have been satisfied.

“Closing Date” means the Business Day on which the Initial Closing under the Asset Purchase Agreement has occurred and all of the conditions precedent set forth in Section 5.01 have been satisfied (or waived in accordance with the terms of this Agreement).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of the Code shall be construed also to refer to any successor sections.

“Collateral” has the meaning ascribed to such term in the Security Agreement.  Notwithstanding anything herein or in the Security Agreement to the contrary, each party hereto agrees that no U.S. Broker Dealer Subsidiary as that term is used in that certain Subordinated Credit Agreement, dated as of January 14, 2008, by and among E.A. Viner International Co., as borrower, the other Persons parties thereto from time to time, the lenders party thereto from time to time, Canadian Imperial Bank of Commerce, as administrative agent, and CIBC World Markets Corp., as lead arranger, as amended from time to time, will be required to pledge any collateral or provide a guaranty of any obligation of OPY Credit Corp. hereunder.

“Commission” means the Securities and Exchange Commission and any Person succeeding to the functions thereof.

“Control Agreement” means, with respect to each Pledged Account, an agreement, in form and substance reasonably satisfactory to the Lender, which effectively gives “control” (as defined in the UCC) to the Lender in such Pledged Account and all investment property or funds contained therein, as the case may be.

“Credit Extension” means each of the following: (a) a Loan, (b) an L/C Credit Extension, (c) a Swap Contract or (d) a foreign exchange transaction.

“Credit Facility” has the meaning specified in Section 2.04 hereof.

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

“Disposition” means any transaction, or series of related transactions, pursuant to which OPY Credit Corp. conveys, sells, leases or subleases, assigns, transfers or otherwise disposes of any part of its business, property or assets (whether now owned or hereafter acquired) to any other Person, in each case whether or not the consideration therefor consists of cash, Securities or other assets, excluding any sales of Inventory in the ordinary course of business.

“Dollar”, “Dollars” and the symbol “$” each means lawful money of the United States of America.

“Eligible Assignee” means (a) an Affiliate of the Lender (in which case the Lender shall remain contingently liable for the performance of all of its obligations hereunder); or (b) any other Person nominated by the Lender and, if no Termination Event has occurred and is continuing, consented to by OPY Credit Corp. (such consent not to be unreasonably withheld or delayed); provided that, in the case of clause (a) and (b) above, such Person is a “qualified purchaser” under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of ERISA shall be construed also to refer to any successor sections.  

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” within the meaning of Sections 414(b), (c), (m) and (o) of the Code.

“ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan, (b) the filing of a notice of intent to terminate a Benefit Plan in a distress termination (as described in Section 4041(c) of ERISA), (c) the institution by the Pension Benefit Guaranty Corporation of proceedings to terminate a Benefit Plan or Multiemployer Plan, (d) the appointment of a trustee to administer any Benefit Plan under Section 4042 of ERISA, or (e) any event requiring OPY Credit Corp. or any ERISA Affiliate to provide security to a Benefit Plan under Section 401(a)(29) of the Code.  

“Excess Retention” means as of the Closing for any Credit Facility, or on any date thereafter, the aggregate principal amount of the Lender’s Financing Commitment thereunder minus the Lender’s Target Retention for such Financing Commitment.

“Excess Retention Loss” means the positive remainder, if any, resulting from the following calculation: (a) the product of (x) the Carrying Value and (y) the relevant amount of Excess Retention, minus (b) the proceeds of sale of the relevant amount of “Excess Retention” (not including accrued interest).  If the foregoing calculation results in a negative amount, the absolute value of such amount shall be payable by the Lender to OPY Credit Corp.

“Facility Documents” means this Agreement, the Security Agreement, any Control Agreement and all other agreements, instruments and other documents executed and delivered by OPY Credit Corp. hereto or thereto.

“Federal Funds Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Lender from three Federal Funds brokers of recognized standing selected by the Lender in the exercise of its reasonable discretion.

“Federal Reserve Board” means the Board of the Federal Reserve System or any Governmental Authority succeeding to its functions.

“Financing Commitment” has the meaning ascribed to such term in Section 2.01.

“Fiscal Month” means each fiscal month of OPY Credit Corp. consisting of a four (4) or five (5) week period.

“Fiscal Quarter” means the fiscal quarter of OPY Credit Corp. ending on each March 31, June 30, September 30 and December 31 of any Fiscal Year.

“Fiscal Year” means the fiscal year of OPY Credit Corp. ending on the last day of the last Fiscal Month of OPY Credit Corp.

“Forward Purchase Arrangements” means commitments that the Lender has issued in respect of certain participants under a Credit Facility that have committed to fund under such Credit Facility at a later date.  It is understood that a Forward Purchase Arrangement will not count as Excess Retention unless and until the earlier of (a) thirty days shall have passed since the Closing of such Credit Facility or (b) the underlying participant has defaulted on its funding obligation.

“GAAP” means generally accepted accounting principles in effect from time to time in the United States.

“Governing Documents” means, (a) with respect to any corporation, (i) the articles/certificate of incorporation (or the equivalent organizational documents) of such corporation, (ii) the by-laws (or the equivalent governing documents) of the corporation and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such corporation’s capital stock; and (b) with respect to any general partnership, (i) the partnership agreement (or the equivalent organizational documents) of such partnership and (ii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (c) with respect to any limited partnership, (i) the partnership agreement (or the equivalent organizational documents) of such partnership, (ii) a certificate of limited partnership (or the equivalent organizational documents) and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of the partnership interests; (d) with respect to any limited liability company, (i) the certificate of limited liability (or equivalent filings) of such limited liability company, (ii) the operating agreement (or the equivalent organizational documents) of such limited liability company, and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any of such company’s membership interests; and (e) with respect to any unlimited liability company, (i) the certificate of incorporation (or the equivalent organizational documents) of such unlimited liability company, (ii) the memorandum and articles of association (or the equivalent governing documents) of such unlimited liability company and (iii) any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such unlimited liability company’s Capital Stock.

“Governmental Authority” means any nation or government, any federal, state, provincial, city, town, municipal, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Indemnitees” has the meaning ascribed to such term in Section 13.16.

“IRS” means the Internal Revenue Service or any successor federal tax Governmental Authority.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Loan.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means the Lender in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lender’s Office” means the office of the Lender located at 300 Madison Avenue, 6^th Floor, New York, New York 10017, or such other office as may be designated pursuant to the provisions of Section 13.01.

“Lender-Related Persons” means each of the Lender and its Affiliates, and the officers, directors, employees, counsel, agents, and attorneys-in-fact of the Lender and its Affiliates.

“Letter of Credit” means any standby letter of credit issued by the Lender for the account of an Approved Borrower pursuant to a Credit Facility.  Unless otherwise agreed by the L/C Issuer, all Letters of Credit shall be subject to the ISP and/or the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce.

“Lien” means any lien, security interest or other charge of any kind, or any other type of preferential arrangement intended to have the effect of a lien or security interest, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“Loan Trading Facility Agreement” means that certain Secured Credit Agreement (Loan Trading Facility Agreement) of even date hereunder between OPY Credit Corp. and the Lender, as amended from time to time.

“Loan Trading Facility Loans” means loans outstanding under the Loan Trading Facility Agreement.

“Loans” means any loans made by the Lender to an Approved Borrower and which may include, without limitation, revolving loans, term loans or bridge loans.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, properties, assets or condition (financial or otherwise) of OPY Credit Corp., (b) the ability of OPY Credit Corp. to perform its obligations hereunder or (c) the rights and remedies of the Lender hereunder.

“Maturity Date” means January 14, 2013.

“Moody’s” means Moody’s Investors Service and any successor thereto.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which OPY Credit Corp. or any of its ERISA Affiliates has contributed, or has been obligated to contribute, at any time during the preceding six years, or has liability.

“Obligations” means all liabilities, obligations, covenants and duties under this Agreement owing by OPY Credit Corp. to the Lender or any Affiliate of the Lender, of any kind or nature, present or future, including, without limitation, OPY Credit Corp.’s obligations to pay to the Lender (i) its ratable share of fees under Section 2.05(a)(ii), its fees under Section 2.05(a)(iii) and (ii) the Administrative Fee.

“Officer’s Certificate” has the meaning ascribed to such term in Section 7.01(c).

“OPY Credit Corp.” has the meaning ascribed to such term in the introductory paragraph hereto.

“Open Commitments” means Financing Commitments that the Lender has issued upon the approval of the Special Credit Committee, but have not been accepted by or on behalf of the relevant borrower.

“Parent” means Oppenheimer Holdings Inc., a corporation formed under the laws of Canada.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. No. 107-56 (signed into law October 26, 2001).

“Pending Loan Syndication” shall have the meaning ascribed thereto in the Asset Purchase Agreement.

“Permitted Encumbrances” means:

(a)

Liens imposed by law for unpaid utilities and taxes, assessments or governmental charges or levies that are not yet due or are being contested in a Permitted Protest; and

(b)

Liens securing the Obligations and/or created or permitted by the Facility Documents or the Loan Trading Facility Agreement.

“Permitted Holder” means any member of the Lowenthal family or any entity directly or indirectly owned by any member of the Lowenthal family.

“Permitted Protest” means the right of a Person to protest any Lien or taxes, provided that (a) a reserve with respect to such obligation is established, if required, by such Person in such amount as is required under GAAP and (b) any such protest is instituted promptly and prosecuted diligently and in good faith by such Person.

“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or Governmental Authority.

“Plan” means any “employee benefit plan”, as defined in Section 3(3) of ERISA.

“Pledged Account” means any deposit account and/or securities account of OPY Credit Corp. that is maintained at a bank within the United States and is the subject of a Control Agreement in favor of Lender.

“Potential Termination Event” means an event which, with the giving of notice or the lapse of time or both, would constitute a Termination Event.

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“Regulation T”, “Regulation U”, and “Regulation X” mean, respectively, Regulations T, U, and X of the Federal Reserve Board or any successor, as the same may be amended or supplemented from time to time.

“Reportable Event” means any of the events described in Section 4043(c) of ERISA or the regulations thereunder other than a Reportable Event as to which the provision of 30 days’ notice to the PBGC is waived under applicable regulations.

“Request for Commitment” means the written submission from OPY Credit Corp. to the Lender requesting that the Lender issue a Financing Commitment, which submission shall be prepared in accordance with the Lender’s customary practices, as the same may be modified from time to time.

“Requirements of Law” means, as to any Person, the charter and by-laws or other organizational or Governing Documents of such Person, and any law, ordinance, rule, regulation, requirement, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, without limitation, the Patriot Act, the Securities Act, the Securities Exchange Act, Regulations T, U and X, ERISA, the Internal Revenue Code, the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or Permit or environmental, labor, employment, occupational safety or health law, rule or regulation.

“Responsible Officer” means the chief financial officer or treasurer of the Parent.

“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

“Securities” means any Capital Stock, shares, voting trust certificates, bonds, debentures, notes, loans or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire any of the foregoing, but shall not include the Obligations.

“Securities Act” means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended or any successor Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“Security Agreement” means the Pledge and Security Agreement, to be executed and delivered pursuant to this Agreement, between OPY Credit Corp. and the Lender, as such agreement may be amended, supplemented or otherwise modified from time to time in accordance therewith and herewith.

“Senior Officer” means, with respect to any Person, such Person’s president, chief executive officer, chief administrative officer, chief financial officer or chief accounting officer.

“Solvent” or “Solvency” any person means (i) the fair value of the property of such person exceeds its total liabilities (including, without limitation, contingent liabilities), (ii) the present fair saleable value of the assets of such person is not less than the amount that will be required to pay its probable liability on its existing debts as they become absolute and matured, (iii) such person does not intend to incur debts or liabilities beyond its ability to pay, as such debts and liabilities mature, and (iv) such person is not engaged, and is not about to engage, in business or a transaction for which its property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represe nts the amount that can reasonably be expected to become an actual or matured liability.

“Special Credit Committee” means the special credit committee which will review all Requests for Commitment and accompanying credit presentations as provided in Section 2.02.

“Subsidiary” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, association or other entity (a) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP or (b) of which more than 50% of (i) the outstanding Capital Stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors of such corporation, (ii) the interest in the capital or profits of such partnership or limited liability company or (iii) the beneficial interest in such trust or estate is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Person.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Syndication Loss” means, for any Credit Facility, the negative remainder, if any, resulting from the following calculation:

(i)

the aggregate amount of underwriting and upfront fees payable to OPY Credit Corp. or the Lender (if such fees shall be paid directly to the Lender) from or on behalf of the borrower under such Credit Facility (other than “ticking fees” or similar fees measured by the number of days that the relevant Financing Commitment is outstanding), whether such fees are paid in cash or through original issue discount, minus

(ii)

the positive remainder, if any, of (x) the face amount of the portion of the Credit Facility that is syndicated during the syndication period (for which purpose any portion of the Credit Facility held by the Lender shall be treated as a sale to other syndicate parties), minus (y) the proceeds of the sales to syndicate parties (100% minus the discount from par, if any, resulting from the foregoing calculation, expressed as a percentage, being the “Carrying Value” of any Excess Retention), minus

(iii)

the product of (x) the syndication discount, if any, determined under clause (ii) and (y) the amount of the Excess Retention, if any, minus

(iv)

without duplication of any amounts payable under clause (i) or (ii) above, any fees paid to syndicate parties to secure their commitments (for which purpose any portion of the Credit Facility held by the Lender shall be treated as a sale to other syndicate parties).

“Target Retention” means, for each Financing Commitment approved by the Lender pursuant to Section 2.02, the target commitment to be retained by the Lender after the completion of the syndication for such Financing Commitment (which, in the case of a Loan facility, will generally be $5,000,000 to $10,000,000; provided that such amount may be increased by CIBC in its sole discretion, on an individual transaction basis or in general, as the case may be).

“10% Cap” means, with respect to any Financing Commitment issued by the Lender, an amount equal to 10% of the aggregate amount thereof.

“Termination Event” has the meaning ascribed to such term in Section 11.01.

“UCC” means the Uniform Commercial Code enacted in the State of New York, as amended from time to time; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or priority is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unfunded Commitments” means the amount of any Financing Commitment or, after any Financing Commitment is replaced by a Credit Facility, the unutilized portion of such Credit Facility.

“Warehouse Facility” means the obligation of the Lender to extend Financing Commitments and make Credit Extensions thereunder pursuant to the terms and conditions of this Agreement (it being understood and agreed that the maximum aggregate principal amount of the Warehouse Facility shall be $1.5 billion, subject to increase up to $2.0 billion as provided in Section 2.01(b)).

SECTION 1.2  Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any res trictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

SECTION 1.3  Accounting Terms.  Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given to it under GAAP.

SECTION 1.4  Time References.  Unless otherwise indicated herein, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in New York, New York on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; provided, however, that with respect to a computation of fees or interest payable to the Lender, such period shall in any event consist of at least one full day.

SECTION 1.5  Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II.
THE FACILITY

SECTION 2.1  The Warehouse Facility.  i) Subject to the terms and conditions set forth herein, the Lender agrees to issue commitments (each such commitment, a “Financing Commitment”) to make Credit Extensions to Approved Borrowers from time to time during the Availability Period; provided, that the term of any Credit Facility executed in connection with a Financing Commitment shall not extend beyond the seventh anniversary of the Closing Date.  Each Financing Commitment shall initially be an Open Commitment which may, upon acceptance by the client or borrower, become an Accepted Commitment.

(b)

Unless and until waived by the Lender, the aggregate amount of Accepted Commitments (reduced to the extent funded or syndicated through assignments or participations), Forward Purchase Arrangements, Loan Trading Facility Loans, Clearing Agreement Exposure and two times the amount of any Excess Retention at any time outstanding may not exceed $1.5 billion, unless the reason for the excess is an Open Commitment becoming an Accepted Commitment, as described in the following sentence.  Unless and until waived by the Lender, the aggregate amount of Accepted Commitments (reduced to the extent funded or syndicated through assignments or participations), Forward Purchase Arrangements, Loan Trading Facility Loans, Open Commitments, Clearing Agreement Exposure and two times the amount of any Excess Retention may not exceed $2.0 billion; provided, that if an Open Comm itment is accepted, which causes the $1.5 billion ceiling described above to be exceeded, then no further Open Commitments will be made until such $1.5 billion ceiling is restored.

(c)

Subject to the following sentence, it is understood that any Pending Loan Syndication that OPY Credit Corp. elects to make subject to the terms of this Agreement pursuant to Section 2.05(b)(ii) of the Asset Purchase Agreement shall not be included in the calculation of Open Commitments or Accepted Commitments for purposes of Section 2.01(b).  OPY Credit Corp. shall not be responsible for any Syndication Losses or Excess Retention Losses in connection with the syndication of any Pending Loan Syndication, unless it agrees in its sole discretion to be responsible for Syndication Losses and Excess Retention Losses, and a Target Retention is agreed, such Losses if any to be determined on the basis and subject to the 10% Cap, in which case, such Pending Loan Syndication shall be subject to this Agreement in all respects, including for purposes of determ ining compliance with any utilization limits, restrictions or tests hereunder.

(d)

Client loan proposals, “staple financing” proposals and similar non-binding expressions of interest in financings will not be subject to the terms of this Agreement, but will be subject to the general credit policies and practices of the Lender.

SECTION 0.2  Approval Procedures.  Each Request for Commitment shall be made by OPY Credit Corp. in writing to the Lender not less than five (5) Business Days prior to the requested date for date of such Financing Commitment issuance and shall be accompanied by a written credit presentation and an underwriting opinion, all of which shall be in accordance with the Lender’s customary practices and requirements.  It is understood that any such credit presentation shall satisfy the underwriting criteria and diligence required by each of OPY Credit Corp. and the Lender.  It is also understood that as part of its credit review the Lender shall receive a summary (in form and substance satisfactory to it) of the due diligence that OPY Credit Corp. has performed with respect to such proposed Client Loan; provided , that the Lender shall have the right to conduct its own independent due diligence with respect to any proposed Client Loan.  Each Request for Commitment shall be subject to approval by the Special Credit Committee on which OPY Credit Corp. shall have two seats and the Lender shall have either a majority of the seats or votes which will be subject to the Lender’s separate credit committee, such that the Lender shall ultimately be responsible for and make all credit determinations.  It is understood that all members of the Special Credit Committee shall at all time comply with all relevant policies of the Lender and OPY Credit Corp. and all applicable laws.  It is understood that any Credit Approval may, at the discretion of the Special Credit Committee, include a ticking fee, commitment fee or other fee to compensate the Lender for the extension of its commitment and will include customary termination or “drop dead” dates.  The credit approval by the Special Credit Committ ee of any Client Loan shall be exercised in its discretion, exercised in good faith in accordance with the Lender’s and OPY Credit Corp.’s credit approval practices and requirements, as well as syndication and retention requirements in accordance with the Lender’s practices (“Credit Approval”).  Within five (5) Business Days of receipt of a duly completed Request for Commitment, the Lender shall notify OPY Credit Corp. of its credit decision and, in the case of each Credit Approval, the conditions of such Credit Approval and the Target Retention.  None of the activities undertaken by the Lender in connection with its review and approval of any Client Loan or the administration thereof shall in any way restrict the Lender’s ability to sell or otherwise transfer any retained portion of such Client Loan.

SECTION 0.3  Financing Commitment Procedures.  For each such Credit Approval, upon the request of OPY Credit Corp., the Lender shall prepare and deliver to OPY Credit Corp. a written Financing Commitment in accordance with the Lender’s customary practices, as the same may be modified by the Lender from time to time, evidencing the terms and conditions set forth in its Credit Approval.  It is understood that each Accepted Commitment will be signed by both the Lender and OPY Credit Corp.; provided, that OPY Credit Corp. shall have no obligation to extend any credit thereunder.  At any time from and after the issuance of a commitment letter (whether an Open Commitment or Accepted Commitment), the Lender may require that OPY Credit Corp. provide specified collateral security (“Specified Collateral”) in such amount as may be required by the Special Credit Committee in connection with approving the particular Financing Commitment, but not to exceed the 10% Cap as security for the payment of any Syndication Losses and Excess Retention Losses in connection with such commitment.  The Specified Collateral may be cash (which the Lender agrees is always acceptable collateral) or, if proposed by OPY Credit Corp. and satisfactory to the Lender in its sole discretion, Cash Equivalents, letters of credit, guaranties by an Affiliate of OPY Credit Corp., or other collateral or credit support as may be required by the Special Credit Committee in connection with approving the particular Financing Commitment.

SECTION 0.4  Client Interface and Syndication Procedures.  

(a)

OPY Credit Corp. shall be the primary interface with the client to lead, negotiate, price, structure and close the Credit Facilities on the terms specified by the Special Credit Committee.  OPY Credit Corp. shall be designated as arranger of Credit Facilities, and may (unless such titles are assigned to other lenders) be designated as syndication agent and documentation agent on Credit Facilities, and the Lender shall be designated as administrative agent and may be designated as a co-arranger or co-agent on Credit Facilities.  It is understood that the team that structures, negotiates and closes Client Loans shall cooperate fully with the Lender’s Credit Personnel and that the final structure, terms and designation of titles of each Credit Facility would be acceptable to each of OPY Credit Corp. and the Lender’s Credit Personnel.  The Lender&# 146;s Credit Personnel would review, monitor and administer the Credit Facilities once made, in their sole discretion.

(b)

Each Credit Facility shall be documented on terms satisfactory to each of OPY Credit Corp. and the Lender, and shall be syndicated by OPY Credit Corp.  If, during syndication, it is proposed that the terms of such facility be changed, the approval of the Special Credit Committee, subject to the Lender’s separate credit committee, shall be needed.  If approval of such new terms is declined, the Financing Commitment shall be terminated, and if approval is given, OPY Credit Corp. shall close the transaction on the terms contemplated by the original credit approval, as so modified (each a “Credit Facility”).  Each Credit Facility shall be documented by OPY Credit Corp. in accordance with the Lender’s customary practices, as the same may be modified from time to time with the Lender’s consent.  OPY Credit Corp. shall disch arge all of its duties using the same degree of skill and attention that the Lender historically exercised with respect to comparable credit facilities that it arranged and syndicated.  It is understood that for those syndications conducted by OPY Credit Corp. on a best efforts basis, the Lender would commit to fund only a portion of the proposed Credit Facility (which will be its Target Retention for such facility) and would be administrative agent for the facility and that for each underwritten syndication the Lender would commit to fund the entire Credit Facility (and would establish a separate Target Retention) and would be administrative agent for the facility.

SECTION 0.5  Closing and Funding Procedures.  ii) The obligation of the Lender to close and fund any Credit Facility shall be subject to the Lender’s determination that all of the conditions precedent included therein shall have been satisfied (which shall include, at a minimum, those conditions set forth in the Lender’s standard credit documentation, as the same may be modified by the Lender from time to time).  Without limitation of the Lender’s rights under Section 2.03, at the Closing of any Credit Facility, the Lender may (if it has not already done so) require that OPY Credit Corp. provide Specified Collateral up to 10% of the aggregate amount of such Credit Facility (taking into account any collateral previously provided under Section 2.03 hereof) as security for payment of a ny Syndication Losses and Excess Retention Losses in connection with such Credit Facility.  At the Closing for each Credit Facility, the Lender shall extend the credit for the amount of the Accepted Commitment, subject to any assignments or participations syndicated, arranged and closed by OPY Credit Corp. prior to such funding, and OPY Credit Corp. (subject to review and approval by the Lender) shall compute (i) any commitment, origination, closing, structuring, syndication and similar fees so designated and payable in connection with such Credit Facility, (ii) the portion of such fees shared by OPY Credit Corp. with assignees and participants (including the Lender with regard to the portion of such Credit Facility retained by it, if any), (iii) all designated fees payable to the Lender by a client after the issuance of an underwritten Financing Commitment and the net fees payable to the Lender, (iv) the market or syndication discount, if any, applicable to the syndication of such Credit Facility at fu nding, and (v) the Syndication Losses, if any, associated with such Credit Facility (including the portion of such Credit Facility retained by the Lender).  At the closing of the syndication (but in no event more than 30 days following the Closing), OPY Credit Corp. shall deduct the Syndication Loss, if any, from its retained fees, and pay any resulting shortfall.

(c)

From and after the Closing of each Credit Facility, the Lender shall hold the remaining amount of the Financing Commitments thereunder after giving effect to all assignments and participations arranged and completed by OPY Credit Corp. prior to, or simultaneously with, the Closing.  For so long as the Lender shall hold any such Financing Commitments, all voting, consent and other rights with respect thereto shall inure to the Lender, and the Lender shall receive its ratable share of all interest, unused fees, L/C fees, waiver and amendment fees and similar fees paid under the Credit Facility.  The Lender agrees to execute and deliver all documentation reasonably necessary to effect assignments arranged by OPY Credit Corp. prior to the Closing of a Credit Facility and completed within 30 days following such Closing.

(d)

Subject to Section 4.01, it is understood and agreed that Canadian Imperial Bank of Commerce may, in its sole discretion, cause one or more of its Subsidiaries to assume all of the rights and obligations of the Lender under any Credit Facility.

SECTION 0.2  Treatment of Excess Retention.  If, after the Closing of a Credit Facility, there exists Excess Retention for such Credit Facility, each of OPY Credit Corp. and the Lender shall have the right, in its discretion, to sell or dispose of all or any portion of the full amount of such Excess Retention at any price and on any terms which it shall determine, in which case OPY Credit Corp. will promptly reimburse the Lender for any and all Excess Retention Losses from such sale (exclusive of any Syndication Losses discharged in accordance with Section 2.05(a) hereof); provided, however, that (i) OPY Credit Corp. shall have the exclusive right to conduct such sales for the time period specified by the Special Credit Committee at the time it issues a credit approval for such Credit Facility, it be ing understood that after the expiry of such period, the Lender may continue to allow OPY Credit Corp. to manage such sale, and (ii) OPY Credit Corp.’s liability for Syndication Losses and Excess Retention Losses for any Financing Commitment by the Lender shall not exceed the 10% Cap.  Any Excess Retention Losses shall be payable upon each sale of any Excess Retention as provided above.

SECTION 0.3  Extension of Maturity Date.  OPY Credit Corp. may, by notice to the Lender not earlier than the third anniversary of the Closing Date and not later than the fourth anniversary of the Closing Date, request that the Lender extend the Maturity Date.  Upon receipt of notice by the Lender, the Lender and OPY Credit Corp. shall discuss in good faith whether the Maturity Date shall be extended and the terms upon which any such extension would be made.

SECTION 0.4  First Offer Rights.  From the Closing Date through the Maturity Date, OPY Credit Corp. shall grant the Lender the right of first offer to issue all Financing Commitments for clients of OPY Credit Corp.; provided, that such rights shall cease if and when (1) this facility has been fully utilized and/or (2) the Lender’s hold limits and/or utilization under this facility have rendered this facility unusable for fulfilling the financing needs of OPY Credit Corp.’s clients, in the context of market norms.

SECTION 0.5  Assignment Fees.  If OPY Credit Corp. elects to waive collection of any Assignment Fee from its client, OPY Credit Corp. agrees to pay to the Lender such Assignment Fee on the last Business Day of each month in respect of all Assignment Fees waived during such month.  If no Assignment Fee is due and payable under the terms of the underlying credit agreement in respect of any trade arranged by OPY Credit Corp., OPY Credit Corp. shall not be liable to make a payment on account of an Assignment Fee in respect of such trade.  The Assignment Fees shall be non-refundable.

ARTICLE I.
TERMINATION OF WAREHOUSE FACILITY; CHANGE IN LAW

SECTION 1.1  Voluntary Reduction of Warehouse Facility.  OPY Credit Corp. shall have the right, upon at least three (3) Business Days prior written notice to the Lender, to voluntarily reduce the amount of the Warehouse Facility hereunder.

SECTION 1.2  Termination of Warehouse Facility.  On the Maturity Date, any unused portion of the Warehouse Facility shall terminate without further action by any party.  No such termination shall in any way effect any Credit Facilities closed prior to the date of such termination.

SECTION 1.3  Change in Law.

(a)

If the Lender reasonably determines that the introduction of or any change in any Applicable Law regarding capital requirements, in each case after the date hereof, has or would have the effect of reducing the rate of return on the Lender’s capital as a consequence of its Warehouse Facility to a level below that which the Lender could have achieved but for such change in the Applicable Law (taking into consideration the Lender’s policies with respect to capital adequacy), then from time to time OPY Credit Corp. will pay to the Lender such additional amount or amounts as will compensate the Lender for any such reduction suffered to the extent that the Lender reasonably determines that such additional amounts are allocable to the existence of the Warehouse Facility.  It is understood and agreed that this provision relates solely to the Warehouse Facility a nd that OPY Credit Corp. shall have no responsibility for any capital requirements of the Lender attributable to any Credit Extensions, Open Commitments, Accepted Commitments or Forward Purchase Arrangements hereunder.

(b)

A certificate of the Lender setting forth in reasonable detail the amount or amounts necessary to compensate the Lender as specified in paragraph (a) of this Section 3.03 shall be delivered to OPY Credit Corp. and shall be binding and conclusive for all purposes, so long as it reflects the basis for the calculation of the amounts set forth therein and does not contain any manifest error.  OPY Credit Corp. shall pay the Lender the amount shown as due on any such certificate within ten days after receipt thereof.  Notwithstanding the foregoing, (i) the Lender shall take such actions that OPY Credit Corp. may reasonably request in order to reduce the amounts payable under Sections 3.03(a), provided that OPY Credit Corp. shall reimburse the Lender for any costs incurred by the Lender in doing so to the extent that the Le nder reasonably determines that such costs are allocable to OPY Credit Corp. with respect to the existent of the Warehouse Facility hereunder and provided further that the Lender shall only be required to take such actions if it determines in good faith that such actions would not be disadvantageous to it, and (ii) OPY Credit Corp. shall not be required to compensate the Lender under Sections 3.03(a) for any costs or additional amounts arising prior to the date that the Lender notifies OPY Credit Corp. of the event giving rise to such costs and amounts of the Lender’s intention to claim compensation therefor.

ARTICLE II.
ADMINISTRATION AND SERVICING OF CREDIT FACILITIES

SECTION 2.1  Duties of Lender.  The Lender shall manage, service and administer or cause to be managed, serviced and administered all Credit Facilities with reasonable care, using that degree of skill and attention that the Lender exercises with respect to all comparable credit facilities that it administers for itself.  The Lender’s duties shall include all credit review and approval functions, including processing all requests for Credit Extensions from Approved Borrowers, collection and posting of all payments, managing all requests for waivers and amendments to the Credit Facilities, responding to inquiries of Approved Borrowers, sending remittance advises to Approved Borrowers, reporting tax information to Approved Borrowers, accounting for collections and furnishing monthly statements to OPY Credit Corp.

SECTION 2.2  Administration Fee and Expenses.  OPY Credit Corp. shall pay the Lender a monthly Administrative Fee in the amount of $100,000 for the Credit Personnel retained by the Lender to provide services under this Agreement.  This Administrative Fee shall be applied against certain to-be-agreed fees for each credit application submitted by OPY Credit Corp. to the Lender for credit review, approval, monitoring and administration.  The Administrative Fee shall be payable in advance on the fifth day of each month (or if such day is not a Business Day, then on the next succeeding Business Day) and on the Closing Date for the period through January 31, 2008 (prorated for such shorter period).  After the Closing Date, OPY Credit Corp. may request that the Lender reduce the Administrative Fee, and the Lender shall evaluate this request in light of OPY Credit Corp.’s level of business activity.

SECTION 2.3  Lender’s Certificate.  On or before the tenth day of each month (or, if such tenth day is not a Business Day, then on the next succeeding Business Day), the Lender shall deliver to OPY Credit Corp. a report in substantially the form of Exhibit F, setting forth the outstanding principal amount of, and all accrued interest and fees on, each outstanding Credit Facility.

ARTICLE III.
CONDITIONS TO ISSUANCE OF FINANCING COMMITMENTS

SECTION 3.1  Conditions Precedent to Initial Commitment Issuance.  The obligation of the Lender to issue the initial Financing Commitment hereunder shall be subject to the satisfaction, or waiver by the Lender, of all of the following conditions precedent:

(a)

Authority.  The Lender shall have received certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the authorization for the execution, delivery and performance of this Agreement by the Lender and for the consummation of the transactions contemplated thereby.  All certificates shall state that the resolutions or other information referred to in such certificates have not been amended, modified, revoked or rescinded as of the Closing Date.

(b)

Documents.  The Lender shall have received, on the Closing Date, counterparts of each of the following documents duly executed and delivered by each party thereto, and in full force and effect and reasonably satisfactory to the Lender:

(i)

this Agreement;

(ii)

any Control Agreements;

(iii)

the Loan Trading Facility Agreement;

(iv)

the Security Agreement;

(v)

such corporate resolutions, certificates and other documents as the Lender reasonably requests.

(c)

No Material Adverse Effect.  There shall not have occurred any event, circumstance, change or condition, which could reasonably be expected to have a Material Adverse Effect.

(d)

Opinions of OPY Credit Corp.’s Counsel.  The Lender shall have received (i) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to OPY Credit Corp., in substantially the form of Exhibit B-1, and (ii) the opinion of  Dennis McNamara, General Counsel of OPY Credit Corp., in substantially the form of Exhibit B-2.

(e)

Good Standing Certificates.  The Lender shall have received, on the Closing Date, governmental certificates, dated the most recent practicable date prior to the Closing Date, showing that OPY Credit Corp. is organized and in good standing in the jurisdiction of its organization, and is qualified as a foreign corporation and in good standing in all other jurisdictions in which it is qualified to transact business except where the failure to so qualify could not reasonably be expected to have Material Adverse Effect.

(f)

Organizational Documents.  The Lender shall have received, on the Closing Date, a copy of the certificate of incorporation or certificate of formation, as applicable, and all amendments thereto of OPY Credit Corp., certified as of a recent date by the appropriate government official of the jurisdiction of its organization, and copies of OPY Credit Corp.’s by-laws or limited liability company agreement, as applicable, certified by the Secretary, Assistant Secretary or managing member, as applicable, of OPY Credit Corp. as true and correct as of the Closing Date.

(g)

Certificates.  (1) The Lender shall have received, on the Closing Date, certificates of the Secretary, Assistant Secretary or managing member of OPY Credit Corp., dated the Closing Date, as to the incumbency and signatures of its officers executing this Agreement and any other certificate or other document to be delivered pursuant hereto or thereto, together with evidence of the incumbency of such Secretary, Assistant Secretary or managing member.

(ii)

The Lender shall have received, on the Closing Date, the certificate of a Senior Officer of OPY Credit Corp., dated the Closing Date, stating that to the knowledge of such officer and on behalf of OPY Credit Corp. (not in such officer’s individual capacity) all of the representations and warranties of OPY Credit Corp. contained herein or in any of the other Facility Documents are true and correct in all material respects on and as of the Closing Date as if made on such date, that no breach of any covenant contained in Articles VIII or IX has occurred or would result from the Closing hereunder and that all of the conditions set forth in this Section 5.01(g)(ii) have been satisfied on such date (or shall, to the extent permitted therein, be satisfied substantially simultaneously on the Closing Date).

SECTION 0.2  Conditions to all Financing Commitment Issuances.  The obligation of the Lender to honor any Request for Commitment is subject to the following conditions precedents:

(a)

Representations and Warranties.  As of such date, both before and after giving effect to the Financing Commitment to be extended on such date, as the case may be, all of the representations and warranties of OPY Credit Corp. contained in Article VI or in any of the other Facility Documents shall be true and correct in all material respects (except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

(b)

No Potential Termination Events.  As of such date, no Termination Event or Potential Termination Event shall have occurred and be continuing or would result from the execution and delivery of, or the performance under, this Agreement, or the extension of the requested Financing Commitment.

(c)

Request for Commitment.  The Lender shall have received a Request for Commitment and all accompanying documentation in accordance with the requirements of Article II hereof.

Each Request for Commitment submitted by OPY Credit Corp. shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a) and (b) have been satisfied on and as of the date of the applicable Financing Commitment.

ARTICLE I.
REPRESENTATIONS AND WARRANTIES

SECTION 1.1  Representations and Warranties.  In order to induce the Lender to enter into this Agreement and to extend the Warehouse Facility, OPY Credit Corp. hereby represents and warrants as follows:

(a)

Organization, Good Standing, Etc.  OPY Credit Corp. (i) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated, to request the issuance of Financing Commitments, to execute and deliver each Loan Document, and to consummate the transactions contemplated thereby, and (iii) except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary for its business as currently conducted.

(b)

Authorization, Etc.  The execution, delivery and performance by OPY Credit Corp. of each Loan Document and the transactions contemplated thereunder, (i) have been duly authorized by all necessary corporate, limited liability company or partnership action, as applicable, (ii) do not and will not contravene its Governing Documents, (iii) do not and will not violate any Requirements of Law or any Material Contract of OPY Credit Corp. binding on or otherwise affecting it, or any of its properties except where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and (iv) do not and will not result in or require the creation of any Lien upon or with respect to any of its properties.  OPY Credit Corp. has the requisite corporate, limited liability company or partnership power and authority, as applicable, to execute, deliver and perform each Loan Document.

(c)

Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority that has not been obtained is required in connection with the due execution, delivery and performance by OPY Credit Corp. of each Loan Document, except where the failure to make such notice or filing or to obtain such authorization, approval or other action could not reasonably be expected to have a Material Adverse Effect.

(d)

Enforceability of Agreement.  Each Loan Document has been duly executed and delivered by OPY Credit Corp. and constitutes the legal, valid and binding obligation of OPY Credit Corp., enforceable against OPY Credit Corp. in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, or by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(e)

Subsidiaries.  OPY Credit Corp. has no Subsidiaries.

(f)

ERISA.  Neither OPY Credit Corp. nor any ERISA Affiliate has (i) any “accumulated funding deficiency” (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, with respect to any Benefit Plan, (ii) failed to make any contribution or payment to any Benefit Plan which has resulted, or could reasonably be expected to result, in the imposition of a Lien or the posting of a bond or other security under Section 302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred, or is reasonably likely to incur, any material liability under Title IV of ERISA (other than a liability to the PBGC for premiums under Section 4007 of ERISA) or (iv) violated any provision of ERISA that individually or in the aggregate can reasonably by expected to result in a material liability to OPY Credit Corp.  Neither OPY Credit Corp. nor any ERISA Affiliate is obligated to contribute to a Multiemployer Plan.

(g)

Taxes, Etc.  All Federal, state, provincial and material local tax returns and other material reports required by Applicable Law to be filed by OPY Credit Corp. have been filed, or extensions have been obtained, except to the extent subject to a Permitted Protest, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon OPY Credit Corp. and upon its properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable; provided, however, that such taxes, assessments or governmental charges referred to above need not be paid to the extent such taxes, assessments or governmental charges are being contested pursuant to a Permitted Protest or, in the aggregate, do not exceed $250,000 at any time.

(h)

Full Disclosure.  None of the reports, financial statements, certificates or other written information furnished by or on behalf of OPY Credit Corp. to the Lender under this Agreement or in connection with the negotiation of this Agreement or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in the light of the circumstances under which it was made, not materially misleading; provided that to the extent any such reports, financial statements, certificates or other written information therein was based upon or constitutes a forecast or projection, OPY Credit Corp. represents only that it acted in good faith and utilized assumptions believed by it to be reasonable at t he time made (it being understood that any such forecasts or projections are subject to significant uncertainties and contingencies, many of which are beyond OPY Credit Corp.’s control, that no assurance can be given that any such forecasts or projections will be realized and that actual results may differ from any such forecasts or projections and such differences may be material).  As of the Closing Date, there are no contingent liabilities or obligations that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(i)

Solvency.  OPY Credit Corp. is and, after giving effect to each of the transactions contemplated by this Agreement, OPY Credit Corp. will be, Solvent.

(j)

Investment Company Act.  OPY Credit Corp. is not, and is not controlled by, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

ARTICLE II.
REPORTING COVENANTS

OPY Credit Corp. covenants and agrees from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) until the Warehouse Facility has been terminated, that:

SECTION 2.1  Financial Statements.  OPY Credit Corp. (i) shall keep proper books of record and account, in which true and correct entries shall be made of all material financial transactions and the assets and business of OPY Credit Corp. and (ii) shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP, and each of the financial statements described below shall be prepared from such system and records.  OPY Credit Corp. shall deliver or cause to be delivered to the Lender:

(a)

Quarterly Reports.  As soon as available, but in any event within forty-five (45) days after the end of each Fiscal Quarter in each Fiscal Year (excluding the last Fiscal Quarter of each Fiscal Year), (i) the unaudited balance sheet of OPY Credit Corp. as at the end of such period, (ii) a certificate of a Responsible Officer of OPY Credit Corp. stating that such unaudited financial information fairly presents, in all material respects, the balance sheet position of OPY Credit Corp. as at the dates indicated, such balance sheet in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes and (iii) a copy of the quarterly public filings of financial statements and other information of the Parent.

(b)

Annual Report.  As soon as available, but in any event within one hundred twenty (120) days after the end of each Fiscal Year, (i) the balance sheet of OPY Credit Corp. as of the end of such Fiscal Year that is used in the audited, consolidated and consolidating balance sheet of the Parent (but which will not be audited on a standalone basis) and (ii) a copy of the annual public filings of financial statements and other information of the Parent.

(c)

Officer’s Certificate; Etc.  Together with each delivery of any financial statement pursuant to subsections (a) and (b) of this Section 7.01 (other than those of Parent), an Officer’s Certificate substantially in the form of Exhibit C attached hereto and made a part hereof, stating that a Responsible Officer signatory thereto has reviewed the terms of this Agreement, and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and financial condition of OPY Credit Corp. during the accounting period covered by such financial statements, that such review has not disclosed the existence during or at the end of such accounting period, and that such officer does not have knowledge of the existence as at the date of such Officer’s Certificate, of any condition or event wh ich constitutes a Termination Event or a continuing Potential Termination Event, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action OPY Credit Corp. has taken, is taking and proposes to take with respect thereto (the “Officer’s Certificate”).

SECTION 2.2  Other Information and Event Reporting.

(a)

Syndication Status Report.  Not later than three Business Days after the end of each week, a Syndication Status Report substantially in the form of Exhibit D attached hereto and made a part hereof.

(b)

Portfolio Status Report.  Not later than three Business Days after the end of each Fiscal Month of OPY Credit Corp., a Portfolio Status Report substantially in the form of Exhibit E attached hereto and made a part hereof.

(c)

Material Adverse Effects.  Promptly upon becoming aware thereof, it shall provide to the Lender written notice of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, an Obligation of OPY Credit Corp.; or (ii) any dispute, litigation, investigation, proceeding or suspension between OPY Credit Corp. and any Governmental Authority.

(d)

ERISA.  Promptly upon becoming aware thereof, it shall provide to the Lender written notice of the occurrence of any ERISA Event.

SECTION 2.3  Potential Termination Events, Termination Events.  Promptly, but in no event more than three Business Days thereafter, upon any Responsible Officer obtaining knowledge (i) of any condition or event which constitutes a Termination Event or Potential Termination Event, OPY Credit Corp. shall deliver to the Lender an Officer’s Certificate specifying (A) the nature and period of existence of any such claimed default, Termination Event, Potential Termination Event, condition or event, (B) the notice given or action taken by such Person in connection therewith and (C) what action OPY Credit Corp. has taken, is and proposes to take with respect thereto.

SECTION 2.4  Other Information.  Promptly upon receiving a request therefor from the Lender, OPY Credit Corp. shall prepare and deliver to the Lender such other information as from time to time may be reasonably requested by the Lender.

ARTICLE III.
AFFIRMATIVE COVENANTS

OPY Credit Corp. covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) until the Warehouse Facility has been terminated, that:

SECTION 3.1  Compliance with Laws.  OPY Credit Corp. shall comply with all Requirements of Law (including with respect to the licenses, approvals, certificates, permits, franchises, notices, registrations and other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, antitrust laws or laws with respect to social security and pension funds obligations) except, in each case, where the failures to do so, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.2  Payment of Taxes and Claims.  OPY Credit Corp. shall pay (a) all taxes, assessments and other governmental charges imposed upon it or on any of its properties or assets or in respect of any of its franchises, business, income or property, and (b) all claims (including claims for labor, services, materials and supplies) for sums material in the aggregate to OPY Credit Corp. which have become due and payable and which by law have or may become a Lien upon any of OPY Credit Corp.’s properties or assets, in each case prior to the time when any penalty or fine will be incurred by OPY Credit Corp. with respect thereto, except for (i) such taxes, assessments, other governmental charges and claims that are being contested in a Permitted Protest or (ii) to the extent that the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.3  Conduct of Business and Preservation of Corporate Existence.  OPY Credit Corp. shall (a) continue to engage in business of the same general type as now conducted by OPY Credit Corp. and (b) preserve and maintain its corporate existence, rights (charter and statutory), licenses, consents, permits, notices or approvals and franchises deemed material to its business; provided that OPY Credit Corp. shall not be required to preserve any right or franchise if (i) OPY Credit Corp. shall determine in good faith that the preservation thereof is no longer necessary, and (ii) that the loss thereof could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.4  Inspection of Property; Books and Records; Discussions.  At any reasonable time during normal business hours and from time to time with at least three (3) Business Days’ prior notice, or at any time if a Potential Termination Event or Termination Event shall have occurred and be continuing, OPY Credit Corp. shall permit any authorized representative(s) designated by the Lender to visit and inspect any of its assets, to examine, audit, check and make copies of its financial and accounting records, books, journals, orders, receipts and any correspondence with regulators and other data relating to its business or the transactions contemplated by this Agreement (including in connection with environmental compliance, hazard or liability or insurance programs), and to discuss its affairs, finances and accounts wit h its officers and independent certified public accountants, all upon reasonable notice and at such reasonable times during normal business hours.  The visitations and/or inspections by or on behalf of the Lender shall be at OPY Credit Corp.’s expense.  OPY Credit Corp. shall keep and maintain in all material respects proper, complete and accurate books of record and account, in which entries in conformity with GAAP shall be made of all dealings and financial transactions and the assets and business of OPY Credit Corp. in relation to its businesses and activities.  If a Termination Event has occurred and is continuing and the Warehouse Facility has been terminated, OPY Credit Corp., upon the Lender’s request, shall turn over any such records to the Lender or its representatives.

SECTION 3.5  Further Assurances.  OPY Credit Corp. shall take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as the Lender may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement, (ii) to subject to valid and perfected first priority Liens (except for Permitted Encumbrances) on any of the property from time to time constituting Collateral, (iii) to establish and maintain the validity and effectiveness of any of the Facility Documents and the validity, perfection and priority of the Liens intended to be created thereby (except for Permitted Encumbrances), and (iv) to better assure, convey, grant, assign, transfer and confirm unto the Lender the rights now or hereafter intended to be grante d to the Lender under this Agreement or any other Loan Document.

SECTION 3.6  Powers; Conduct of Business.  OPY Credit Corp. shall qualify and remain qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified except for those jurisdictions where failure to so qualify does not have or could not reasonably be expected to have a Material Adverse Effect.

ARTICLE IV.
NEGATIVE COVENANTS

OPY Credit Corp. covenants and agrees, from and after the date hereof (except as otherwise provided herein, or unless the Lender has given its prior written consent) until the Warehouse Facility has been terminated, that:

SECTION 4.1  Liens.  It shall not create, incur, assume or suffer to exist any Lien upon or with respect to any of the Collateral, whether now owned or hereafter acquired, other than Permitted Encumbrances.

SECTION 4.2  Consolidation, Merger, Subsidiaries, Etc.  It shall not (a) liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or (b) purchase or otherwise acquire all or substantially all of the Capital Stock or assets of any Person (or of any division or business unit thereof).

SECTION 4.3  Collateral Dispositions, Etc.  It shall not sell, transfer, lease or otherwise dispose of, or grant options, warrants or other rights with respect to, any of the property from time to time constituting Collateral, until it is released from the Lien of the Security Agreement in accordance with the terms thereof.

SECTION 4.4  Negative Pledges.  It shall not enter into any agreement prohibiting the creation or assumption of any Lien upon any Collateral, except (i) pursuant to this Agreement and the Facility Documents or (ii) prohibitions or conditions under applicable law, rule or regulation.

SECTION 4.5  Investment Company Act of 1940.  It shall not engage in any business, enter into any transaction, use any Securities or take any other action that would cause it to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.

SECTION 4.6  Impairment of Security Interests.  Except as otherwise permitted pursuant to the Security Agreement, it shall not, directly or indirectly, take any action or do anything that would have the effect of terminating, limiting or impairing the perfection or priority of any Lien upon the Collateral.

ARTICLE V.
[RESERVED]

ARTICLE VI.
TERMINATION EVENTS, RIGHTS AND REMEDIES

SECTION 6.1  Termination Events.  Each of the following occurrences shall constitute a termination event (a “Termination Event”) under this Agreement.

(a)

Failure to Make Payments When Due.  OPY Credit Corp. shall fail to pay when due (i) any fees payable to the Lender under Section 2.05(a)(ii) or (iii) or (ii) any other monetary Obligation, and such failure shall continue for a period of three (3) Business Days after written notice by Lender of such failure.

(b)

Breach of Representation or Warranty.  Any representation, warranty or statement made or deemed made by or on behalf of OPY Credit Corp. or by any officer of OPY Credit Corp. under any Loan Document or in any report, certificate, or other document delivered to the Lender pursuant to any Loan Document shall prove to be incorrect or misleading in any material respect when made or deemed made.

(c)

Other Potential Termination Events (Thirty (30) Day Cure).  OPY Credit Corp. shall fail to perform or comply with any other covenant or agreement and such failure continues for a period of thirty (30) days after learning of such failure or receiving written notice thereof from the Lender.

(d)

Default as to Loan Trading Facility Agreement.  An Event of Default shall have occurred and be continuing under the Loan Trading Facility Agreement.

(e)

Voluntary Bankruptcy Proceeding.  OPY Credit Corp. (i) shall institute any proceeding or voluntary case seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, receiver and manager, interim receiver, sequestration, administrator, monitor, custodian or other similar official for OPY Credit Corp. or for any substantial part of its property, (ii) shall consent to the entry of an order for relief in an involuntary bankruptcy case or to the conversion of an involuntary case to a voluntary case under bankruptcy, insolvency or reorganization law, (iii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iv) shall make a general assignment for the benefit of creditors or (v) shall take any action to authorize or effect any of the actions set forth above in this Section 11.01(e).

(f)

Involuntary Bankruptcy Proceeding.

(i)

An involuntary case shall be commenced against OPY Credit Corp. and the petition shall not be dismissed, stayed, bonded or discharged within sixty (60) days; or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of OPY Credit Corp. in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect; or any other similar relief shall be granted under any applicable federal, state, provincial, local or foreign law; or the board of directors of OPY Credit Corp. (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(ii)

A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, receiver and manager, administrator, monitor, custodian or other officer having similar powers over OPY Credit Corp. or over all or a substantial part of its assets shall be entered; or an interim receiver, trustee or other custodian of OPY Credit Corp. or of all or a substantial part of its assets shall be appointed or a warrant of attachment, execution or similar process against any substantial part of its assets shall be issued and any such event shall not be stayed, dismissed, bonded or discharged; or the board of directors of OPY Credit Corp. (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the foregoing.

(g)

Invalidity of Documents.  A court of competent jurisdiction shall declare that any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against OPY Credit Corp.; or the validity or enforceability thereof shall be contested by OPY Credit Corp.; or a proceeding shall be commenced by OPY Credit Corp. or any Governmental Authority having jurisdiction over OPY Credit Corp., seeking to establish the invalidity or unenforceability thereof; or OPY Credit Corp. shall deny in writing that it has any liability or obligation purported to be created under any Loan Document.

(h)

Facility Documents; Impairment.  At any time, for any reason, (i) any Facility Document shall for any reason (other than pursuant to the express terms hereof or thereof) fail or cease to create a valid and perfected Lien on any Collateral or the Liens intended to be created or perfected thereby are invalid or unperfected with respect to any Collateral except as otherwise contemplated hereby or thereby, or (ii) Liens with respect to any Collateral in favor of the Lender contemplated by the Facility Documents shall be invalidated or otherwise cease to be in full force and effect, or such Liens shall be subordinated or shall not have the priority contemplated hereby or by the other Facility Documents (subject to Permitted Encumbrances and to the exceptions set forth in the applicable Facility Documents), or (iii) OPY Credit Corp. seeks to render the Liens intended to be created or perfected by any Loan Document invalid or unperfected except as otherwise contemplated hereby and thereby, and, in the case of clause (i) and/or (ii) such failure continues for a period of thirty (30) days after OPY Credit Corp. learns of such failure or receives written notice thereof from Lender.

(i)

Change of Control.  A Change of Control shall have occurred without the prior written consent of the Lender.

(j)

ERISA.  With respect to any Plan or Benefit Plan, as applicable, (i) a prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA occurs which could reasonably be expected to result in material liability to OPY Credit Corp., (ii) any accumulated funding deficiency (within the meaning of Section 412 of the Code and Section 302 of ERISA), whether or not waived, shall exist with respect to any Benefit Plan, or (iii) the occurrence of any ERISA Event; provided, however, that the events listed in clauses (i) through (iii) shall constitute Termination Events only if the liability or deficiency of OPY Credit Corp. or any ERISA Affiliate, would reasonably be expected to exceed $5,000,000 in the aggregate for all such events.  

SECTION 6.2  Remedies.  If any Termination Event specified in Section 11.01 shall have occurred and be continuing, the Lender may, by written notice to OPY Credit Corp., take any or all of the following actions, without prejudice to the rights of the Lender to enforce its claims against OPY Credit Corp.:  (i) terminate or reduce the Warehouse Facility, whereupon the Warehouse Facility shall immediately be terminated or reduced, and (iii) exercise any and all of its other rights and remedies hereunder, under the other Facility Documents, under applicable law and otherwise; provided, however, that upon the occurrence of any Termination Event described in subsection (e) or (f) of Section 11.01, the Warehouse Facility shall automatically terminate and all amounts due under this Agreement shall become immediately due and payable automatically, without presentment, demand, protest or notice of any kind, all of which are expressly waived by OPY Credit Corp.

SECTION 6.3  Waivers by OPY Credit Corp.  Except as otherwise provided for in this Agreement, the Security Agreement and Applicable Law, OPY Credit Corp. waives (i) all rights to notice and a hearing prior to the Lender’s taking possession or control of, or to the Lender’s replevin, attachment or levy upon, any Collateral in satisfaction of the Obligations, if any, that it secures or any bond or security which might be required by any court prior to allowing the Lender to exercise any of its remedies, (ii) the benefit of all valuation, appraisal and exemption laws and (iii) all rights of set-off against the Lender as it applies to the payment of the Obligations.  OPY Credit Corp. acknowledges that it has been advised by counsel of its choice with respect to this Agreement, the other Facility Docu ments and the transactions evidenced by this Agreement and the other Facility Documents.

ARTICLE VII.
MISCELLANEOUS

SECTION 7.1  Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied, emailed or delivered:

if to OPY Credit Corp., at the following address:

125 Broad Street, 16th Floor

New York, NY 10004

Telephone:  (212) 668-8000

Facsimile:  (212) 668-8081

Email:

Attention: Albert G. Lowenthal

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY  10036

Telephone:  (212) 735-2444

Facsimile:  (917) 777-2444

Email:

Attention: Thomas W. Gowan

if to the Lender, at the following address:

Canadian Imperial Bank of Commerce
300 Madison Avenue, 6^th Floor
New York, NY 10017
Telephone:  (212) 856-3649
Facsimile:  (212) 885-4844
Email:  
Attention:  Gerald Girardi
cc:  Christine Aharonian
Email:

with a copy to:

Mayer Brown LLP

1675 Broadway
New York, NY 10019
Telephone:  (212) 506-2515

Facsimile:  (212) 262-1910

Email:

Attention:  James B. Carlson

or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 12.01.  All such notices and other communications shall be effective, (i) if mailed, when received or five (5) days after deposited in the mails as registered or certified (in each case with return receipt requested) with postage pre-paid and properly addressed, whichever occurs first, (ii) if telecopied, when transmitted and confirmation received, (iii) if emailed, when transmitted and confirmation acknowledged by recipient or (iv) if delivered, upon delivery, except that notices to the Lender pursuant to Article II shall not be effective until received by the Lender.

SECTION 7.2  Amendments, Etc.  

(a)

Amendments.  No amendment or waiver of any provision of this Agreement or any other Loan Document, nor consent to any departure by OPY Credit Corp. or the Lender therefrom, shall in any event be effective unless the same shall be in writing and signed by OPY Credit Corp. and the Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(b)

FINRA Approval for Certain Amendments.  Notwithstanding anything herein to the contrary, the consent of the Financial Industry Regulatory Authority is required for any amendment to this Agreement that would (i) result in a Lien on the assets of any U.S. Broker-Dealer Subsidiary; (ii) require any U.S. Broker-Dealer Subsidiary to become a Guarantor or Credit Party under this Agreement; or (iii) otherwise cause the Obligations under the Facility Documents to be included in the net capital computation of any U.S. Broker-Dealer Subsidiary.  Terms used in this Section 12.02 and not otherwise defined shall have the meaning ascribed thereto in that certain Subordinated Credit Agreement, dated as of January 14, 2008, by and among E.A. Viner International Co., as borrower, the other Persons parties thereto from time to time, the lenders party th ereto from time to time, Canadian Imperial Bank of Commerce, as administrative agent, and CIBC World Markets Corp., as lead arranger, as amended from time to time.

SECTION 7.3  Expenses; Taxes; Attorneys’ Fees.  OPY Credit Corp. will pay promptly following demand therefor, all reasonable fees, costs and expenses incurred by or on behalf of the Lender including, without limitation, reasonable out-of-pocket fees, costs and expenses of counsel for the Lender, arising from or relating to:  (a) any requested amendments (other than amendments requested solely by the Lender), waivers or consents to this Agreement or the other Facility Documents whether or not such documents become effective or are given, (b) the preservation and protection of any of the Lender’s rights under this Agreement or the other Facility Documents, (c) the filing of any petition, complaint, answer, motion or other pleading by the Lender, or the taking of any action in respect of the Collateral, in connect ion with this Agreement or any other Facility Document, (d) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral in connection with this Agreement or any other Facility Document, (e) any attempt to enforce any Lien or security interest in any Collateral in connection with this Agreement or any other Facility Document, (f) any attempt to collect from OPY Credit Corp., or (g) during the continuance of a Termination Event, the receipt by the Lender of any advice from its professionals (including without limitation, the reasonable fees of its outside attorneys and consultants) with respect to any of the foregoing (to the extent that such fees, costs and expenses are not otherwise recoverable pursuant to any other provision of this Agreement or any other Facility Document).  Without limitation of the foregoing or any other provision of any Facility Document:  (x) OPY Credit Corp. agrees to pay all stamp, document, transfer, recording or filing taxes o r fees and similar impositions now or hereafter determined by the Lender to be payable in connection with the execution of this Agreement, and OPY Credit Corp. agrees to hold the Lender harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions, and (y) OPY Credit Corp. agrees to pay all broker fees with respect to any broker retained by OPY Credit Corp. that may become due in connection with the transactions contemplated by this Agreement.  The Lender agree to provide to OPY Credit Corp. an invoice with respect to each cost or expense incurred in connection with this Agreement promptly upon the Lender’s receipt thereof, and agrees, upon the reasonable request of OPY Credit Corp., to provide reasonable backup information with respect to such costs or expenses (subject to the right of the Lender to take whatever steps are reasonably necessary to protect any confiden tial or privileged information which may be contained therein).

SECTION 7.4  Right of Set-Off, Sharing of Payments, Etc.

(a)

Upon the occurrence and during the continuance of any Termination Event, and in addition to (and without limitation of) any right of set-off, banker’s lien or counterclaim the Lender may otherwise have, the Lender may, and is hereby authorized by OPY Credit Corp. to, at any time and from time to time, without notice to OPY Credit Corp. (any such notice being expressly waived by OPY Credit Corp.), to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of OPY Credit Corp. against any and all Obligations now or hereafter existing under any Loan Document, irrespective of whether or not the Lender shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured.  During the continuance of any Termination Event, the Lender may, and is hereby authorized to, at any time and from time to time, without notice to OPY Credit Corp. (any such notice being expressly waived by OPY Credit Corp.), to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender to or for the credit or the account of OPY Credit Corp. against any and all Obligations now or hereafter existing, irrespective of whether or not the Lender shall have made any demand hereunder or thereunder.  The Lender agrees to notify OPY Credit Corp., promptly after any such set-off and application made by the Lender, provided that the failure to give such notice to OPY Credit Corp. shall not affect the validity of such set-off and application.  The rights of the Lender under this Section 12.04 are in addition to other r ights and remedies which the Lender may have.

(b)

Nothing contained in this Section 12.04 shall require the Lender to exercise any such right or shall affect the right of the Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or Obligation of OPY Credit Corp.  If, under any applicable bankruptcy, insolvency or other similar law, the Lender receives a secured claim in lieu of a set-off to which this Section 12.04 applies, the Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lender entitled under this Section 12.04 to share in the benefits of any recovery on such secured claim.

SECTION 7.5  Severability.  Any provision of this Agreement, which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 7.6  Complete Agreement.  This Agreement constitutes the complete agreement between the parties with respect to the subject matter hereof and thereof, supersede any previous agreement or understanding between them relating hereto or thereto and may not be modified, altered or amended except by an agreement in writing signed by OPY Credit Corp. and the Lender in accordance with Section 12.02.

SECTION 7.7  Assignment.

(a)

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that OPY Credit Corp. may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by OPY Credit Corp. without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)

The Lender may assign to one or more Eligible Assignees all of its rights and obligations under this Agreement; provided, that if the consent of OPY Credit Corp. is required by the definition of “Eligible Assignee”, such consent shall have been obtained.  From and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and have the rights and obligations of the Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (except to the extent otherwise provided in clause (a) of the definition of “Eligible Assignee”).

SECTION 7.8  Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Agreement or any other Loan Document by telecopy shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Loan Document.  Any party delivering an executed counterpart of any such agreement by telecopy shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

SECTION 7.9  GOVERNING LAW.  THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.10  CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, OPY CREDIT CORP. HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  OPY CREDIT CORP. FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO OPY CREDIT CORP. AT ITS ADDRESS FOR NOTICES SET FORTH IN SE CTION 12.01, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST OPY CREDIT CORP. IN ANY OTHER JURISDICTION.  OPY CREDIT CORP. HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

SECTION 7.11  WAIVER OF JURY TRIAL, ETC.  OPY CREDIT CORP. AND THE LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR OTHER FACILITY DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  OPY CREDIT CORP. CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  OPY CREDIT CORP. HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT.

SECTION 7.12  Consent.  Except as otherwise expressly set forth herein or in any other Loan Document to the contrary, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of the Lender, shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which OPY Credit Corp. is party and to which the Lender have succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by the Lender with or without any reason in their reasonable discretion.

SECTION 7.13  Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the Lender or OPY Credit Corp., whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

SECTION 7.14  Reinstatement; Certain Payments.  If any claim is ever made upon the Lender for repayment or recovery of any amount or amounts received by the Lender in payment or received on account of any of the Obligations, the Lender shall give prompt notice of such claim to OPY Credit Corp., and if the Lender repay all or part of such amount by reason of (i) any judgment, decree or order of any court of competent jurisdiction or administrative body having jurisdiction over the Lender or any of its property, or (ii) compliance by the Lender with any requirement of a Governmental Authority having jurisdiction over the Lender, then and in such event OPY Credit Corp. agrees that (A) any such judgment, decree or order shall be binding upon it notwithstanding the cancellation of any instrument evidencing the Obligations or the o ther Facility Documents or the termination of this Agreement or the other Facility Documents and (B) it shall be and remain liable to the Lender hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Lender.

SECTION 7.15  Binding Effect.  This Agreement shall be binding upon and inure to the benefit of OPY Credit Corp., the Lender, and their respective successors and assigns, subject to Section 12.07.

SECTION 7.16  Confidentiality.  The Lender agrees (on behalf of itself and each of its Affiliates, directors, officers, employees and representatives) (each, a “Recipient”) to hold in complete confidence and not disclose, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by OPY Credit Corp. pursuant to this Agreement (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), or available to such Person from another source not known to be subject to a confide ntiality obligation to such Person not to disclose such information, provided that nothing herein shall limit the disclosure of any such information (a) to the extent required by statute, rule, regulation or judicial process, (b) to counsel, accountants, auditors and other advisors for the Lender, (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential pursuant to the terms hereof), (c) to examiners, auditors or accountants to the extent required by any court, governmental or administrative agency, pursuant to any subpoena or other legal process, or by any law, statute, regulation or court order, or in connection with any litigation to which the Lender is party, or (d) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first agrees in writing to the confidentiality provisions of this Section 12.16.

Upon the request of OPY Credit Corp. to a Recipient on or after the Maturity Date, and subject to applicable law, rule or policy, such Recipient shall destroy any OPY Credit Corp.-related confidential information to the extent consistent with such Recipient’s document retention policies

SECTION 7.17  USA Patriot Act.  The Lender hereby notifies OPY Credit Corp. that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies OPY Credit Corp., which information includes the name and address of OPY Credit Corp. and other information that will allow the Lender to identify OPY Credit Corp. in accordance with the Act.

SECTION 7.18  Initial Lender.  Canadian Imperial Bank of Commerce as the initial Lender hereunder represents and warrants to the Company that it is a “qualified purchaser” under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder.

(signature pages follow)

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

OPY CREDIT CORP.:

OPY CREDIT CORP.


By:

Name:

Title:

LENDER:

CANADIAN IMPERIAL BANK OF COMMERCE


By:

Name:

Title:  

2

Exhibit A

[Intentionally Omitted]

Exhibit A

Exhibit C

OFFICER’S CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES SOLELY IN HIS CAPACITY AS AN AUTHORIZED OFFICER OF OPY CREDIT CORP. AS FOLLOWS:

1.

I am the [Chief Financial Officer]/[Treasurer] of OPY Credit Corp.

2.

I have reviewed the terms of that certain Warehouse Facility Agreement, dated as of January 14, 2008 (as it may be amended, supplemented or otherwise modified, the “Warehouse Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among OPY Credit Corp. (“OPY Credit Corp.”) and Canadian Imperial Bank of Commerce (the “Lender”) and the other Facility Documents thereunder, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and financial condition of OPY Credit Corp. during the accounting period covered by the attached financial statements.

3.

The examination described in paragraph 2 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, a Termination Event or Potential Termination Event as of the date of such Certificate, except as set forth in a separate attachment, if any, to this Certificate, describing in detail, the nature of the condition or event, the period during which it has existed and the action which OPY Credit Corp. has taken, is taking, and proposes to take with respect to each such condition or event.

The foregoing certifications, together with the financial statements delivered with this Certificate in support hereof, are made and delivered [mm/dd/yy] pursuant to Section 7.01(c) of the Warehouse Agreement.

OPY CREDIT CORP.


By:

Title:

Exhibit C

Exhibit D

For Week Ending [__/__/__]

Syndicated Bank Credit Report
Region: USA

    Data

Borrower Name	WAFLR	Committed	Approved Hold	Gross U/W Exposure	Status*	Start Date	Remnant	Comment	Risk Manager
Total (US Dollars)

*Status:

1 – Approval in Principle

2 – With Client, Awaiting Acceptance

3 – Fully Committed

Exhibit D

Exhibit E

For Week Ending [__/__/__]

Portfolio Status Report
Region: USA

    Data

Borrower Name	Total Commitment Amount	CIBC Commitment	Approved Hold	Remnant	Comment
Total (US Dollars)

Exhibit E

Exhibit F

For Month Ending [__/__/__]

Credit Facility Report
Region: USA

Borrower Name	Total Commitment Amount	CIBC Commitment	Total Outstandings	Accrued Interest	Accrued Fees
Total (US Dollars)

Exhibit F