CREDIT SUISSE FIRST BOSTON USA INC (Form: 10-K405, Filing

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K405 Annual report pursuant to section 13 and 15(d), Regulation S-K Item 405

Filing Date: 2002-03-29 | Period of Report: 2001-12-31 SEC Accession No. 0000912057-02-012605

(HTML Version on secdatabase.com)

FILER CREDIT SUISSE FIRST BOSTON USA INC Mailing Address Business Address ELEVEN MADISON AVE ELEVEN MADISON AVE CIK:29646| IRS No.: 131898818 | State of Incorp.:DE | Fiscal Year End: 1231 NEW YORK NY 10010 NEW YORK NY 10010 Type: 10-K405 | Act: 34 | File No.: 001-06862 | Film No.: 02593997 2128923000 SIC: 6200 Security & commodity brokers, dealers, exchanges & services

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

For the fiscal year ended December 31, 2001 Commission File Number: 1-6862 Credit Suisse First Boston (USA), Inc. (Exact Name of Registrant as Specified in Its Charter)

Delaware 13-1898818 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) Eleven Madison Avenue 10010 New York, New York (Zip Code) (Address of Principal Executive Offices)

(212) 325-2000 (Registrant's Telephone Number, Including Area Code)

Reduced Disclosure Format

The Registrant meets the conditions set forth in General Instruction I (1) (a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure format.

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 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/

Because the Registrant is an indirect wholly owned subsidiary of Credit Suisse Group, none of the registrant's outstanding voting stock is held by nonaffiliates of the Registrant. As of the date hereof, 1,100 shares of the Registrant's Common Stock, $.01 par value, were issued and outstanding and held by Credit Suisse First Boston, Inc.

Documents Incorporated by Reference: None Securities Registered Pursuant to Section 12 (b) of the Act:

Title of Each Class: Name of Each Exchange on Which Registered:

Securities Registered Pursuant to Section 12 (g) of the Act: None

CREDIT SUISSE FIRST BOSTON (USA), INC. Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2001

Page No. Cautionary Statement Pursuant to The Private Securities Litigation Reform Act of 1995 (i)

Form 10-K Item Number:

PART I

Item 1: Business 1 Item 2: Properties 17 Item 3: Legal Proceedings 18 Item 4: Omitted Pursuant to General Instruction I 23

PART II

Item 5: Markets for Registrant's Common Equity and Related Stockholder Matters 23 Item 6: Selected Financial Data 23 Management's Discussion and Analysis of Financial Condition and Results of Item 7: 24 Operations Item 7A: Quantitative and Qualitative Disclosures about Market Risk 44 Item 8: Financial Statements and Supplementary Data 52 Changes in and Disagreements with Accountants on Accounting and Financial Item 9: 52 Disclosure

PART III

Item 10: Directors and Executive Officers of the Registrant 53 Item 11: Omitted Pursuant to General Instruction I 55 Item 12: Omitted Pursuant to General Instruction I 55 Item 13: Omitted Pursuant to General Instruction I 55

PART IV

Item 14: Exhibits, Financial Statement Schedule, and Reports on Form 8-K 56 Index to Financial Statements and Financial Statement Schedule F-1 Signatures II-1 Index to Exhibits E-1

Cautionary Statement Pursuant to The Private Securities Litigation Reform Act of 1995

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We have made in this Annual Report on Form 10-K, including, without limitation, in "BusinessLegal Proceedings" in Part I, Item 3 and in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7, and from time to time may otherwise make in our public filings and press releases, forward-looking statements concerning our operations, economic performance and financial condition, as well as our future plans and strategic objectives. Such forward-looking statements are subject to various risks and uncertainties, and we claim the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those anticipated herein or in any such other filings, releases or statements because of a number of factors, including without limitation, those detailed in "BusinessCertain Factors That May Affect Our Business" in Part I, Item 1, those discussed elsewhere herein, and in other public filings and press releases. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and beyond our control. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the results indicated in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements except as otherwise required by applicable law.

PART I

Item 1: Business

OVERVIEW

We are a leading integrated investment bank serving institutional, corporate, government and individual clients. We provide our clients with a broad range of products and services. These include:

securities underwriting, sales and trading,

investment banking,

financial advisory services,

private equity investments,

investment research,

full service brokerage services,

financial services outsourcing solutions, and

derivative and risk management products.

HISTORY

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We are the product of a business combination. On November 3, 2000, Credit Suisse Group acquired Donaldson, Lufkin & Jenrette, Inc., or DLJ, which we call the Acquisition. Credit Suisse Group is a global financial services company, providing a comprehensive range of insurance, banking and investment banking products in Switzerland and abroad. Credit Suisse First Boston Corporation, or CSFB Corp., Credit Suisse Group's principal U.S. registered broker-dealer subsidiary, became a subsidiary of DLJ, and DLJ changed its name to Credit Suisse First Boston (USA), Inc. We are now part of the Credit Suisse First Boston business unit of Credit Suisse Group. When we use the terms "we" and "our" and the "Company", we mean, after the Acquisition, Credit Suisse First Boston (USA), Inc. and its consolidated subsidiaries and, prior to the Acquisition, DLJ and its consolidated subsidiaries.

Effective January 1, 2002, Credit Suisse Group realigned its business. Its operations, formerly structured in eight business units, are now structured in two business units, the Credit Suisse Financial Services business unit and the Credit Suisse First Boston business unit, or CSFB. CSFB consists of investment banking and financial services businesses. The investment banking business provides financial advisory and capital raising services, sales and trading for users and suppliers of capital around the world. The financial services business provides international asset management to institutional, mutual fund, and private investors, financial services to broker-dealers and investment managers and financial advisory services to high-net-worth individuals and corporate investors.

For the year 2001, the businesses of CSFB ranked:

fourth in global mergers and acquisitions advisory services in dollar volume of announced transactions with a 23% market share, according to Thomson Financial Securities Data;

third in dollar value of global debt underwriting with an 8% market share, and first in dollar value of global high-yield debt underwriting with a 16% market share, according to Thomson Financial Securities Data;

fifth in dollar value of global equity and equity-linked underwriting with a 10% market share, according to Thomson Financial Securities Data;

third in dollar value of U.S. debt and equity underwriting with an 8% market share, according to Thomson Financial Securities Data; and

second in North American equity research, with 52 ranked analysts, and second in European equity research, with 38 ranked analysts, according to Institutional Investor.

RECENT DEVELOPMENTS

As part of CSFB's strategy to focus on core businesses while reducing costs, in the first quarter of 2002, we completed the sale of CSFBdirect, our online trading operations, and Autranet, Inc., a broker-dealer subsidiary active in the distribution to institutional investors of investment research products purchased from independent research specialists. On February 1, 2002, we completed the sale of the U.S.-based CSFBdirect business to Bank of Montreal for $520 million. On January 25, 2002, we completed the sale of the U.K.-based CSFBdirect business to TD Waterhouse. On February 1, 2002, we completed the sale of Autranet to The Bank of New York. As a result of the sales, we expect to record a total pre-tax gain of approximately $525 million in the first quarter of 2002.

On January 31, 2002, we acquired Holt Value Associates, L.P., a leading provider of independent research and valuation services to asset managers, which will be integrated with CSFBedge, CSFB's online research and valuation database service.

OPERATIONAL STRUCTURE; PRODUCTS AND SERVICES

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Following the Acquisition, we changed our organizational structure and began to operate and manage our business through four principal operating divisions, the Equity Division, the Investment Banking Division, the Fixed Income Division and the Financial Services Division. In September 2001, we combined the operation and management of our two largest divisions, the Equity Division and the Fixed Income Division, into the Securities Division and we now operate and manage our business through three principal operating divisions:

Securities Division, which is active in sales, trading and research in fixed income, equity and equity- linked products, including foreign exchange, listed and over-the-counter derivative and risk management products and securities lending and borrowing;

Investment Banking Division, or IBD, which serves a broad range of users and suppliers of capital, provides financial advisory and securities underwriting and placement services and, through the Private Equity Group, makes privately negotiated equity investments; and

Financial Services Division, which primarily includes the operations of Pershing, a leading provider of financial services outsourcing solutions for introducing broker-dealers and independent investment managers, and Private Client Services, a financial advisory business serving high-net-worth individuals and corporate investors.

The following table illustrates our revenue breakdown by our principal divisions, net of interest expense. Net revenues, however, are not necessarily indicative of the results for each division. The consolidated net revenues for 1999, 1998 and 1997 represent the results of operations of DLJ. The consolidated net revenues for 2000 represent the results of operations of only DLJ for the period from January 1, 2000 to November 2, 2000 and the results of operations of both DLJ and CSFB Corp. for the period from November 3, 2000 to December 31, 2000. As a consequence, our results may not be

fully comparable between periods. Certain reclassifications of prior year amounts have been made to conform to the current presentation.

Years Ended December 31,

2001 2000 1999 1998 1997

(in millions)

Securities Division Equity $ 1,973 $ 1,382 $ 995 $ 678 $ 576 Fixed Income 2,028 415 887 587 641 Investment Banking Division 1,815 1,918 1,901 1,484 1,166 Financial Services Division 1,652 2,214 1,783 1,258 999 Offsets and eliminations 80 109 (35) (83) 89

Net Revenues $ 7,548 $ 6,038 $ 5,531 $ 3,924 $ 3,471

PRODUCTS AND SERVICES

Our clients demand high quality products and services for their funding, investing, risk management and financial advisory needs. In response to these needs, we have developed a product-based structure delivered through regional teams. The following is a discussion of our key products and services and the divisions through which they are delivered.

Securities Division

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Equity. We engage in a broad range of equity activities for investors around the world, including sales, trading, brokerage and market- making in U.S. and international equity and equity-related securities, options and futures. Our activities cover securities, including equity derivatives and convertible securities, traded on exchanges and over-the-counter. Our primary equity-related activities include:

New Issue Distribution. We manage and participate in offerings of all types of equity securities, including common stock, convertible securities and other equity and equity-related securities. We participate in these offerings as underwriter or agent and sell these securities in public and private offerings throughout the world. Equity distribution specialists work closely with their colleagues in IBD on new equity issues.

Secondary Trading. We conduct our secondary sales and trading activities both as agent and as principal on behalf of investors and ourselves. As agent, we effect brokerage transactions in equity securities for customers, thereby generating commission revenues. Transactions as principal involve making markets in securities to facilitate customer investments as well as proprietary investments for our own risk. We execute and commit capital on all major exchanges globally.

Research. Our equities research department is engaged in the analysis of a broad range of industries and companies as well as market and economic trends. The department publishes studies and forecasts on economic conditions, financial markets, portfolio strategy, quantitative analysis, industry developments and individual companies.

Convertible Bonds and Equity and Other Derivatives. We structure innovative primary and secondary market transactions that are designed to solve a client's risk management problems and provide our clients with financing and investment alternatives through convertible bonds and various listed and over-the-counter financial derivatives, including options, equity- linked products and other proprietary risk management products. We also conduct convertible, international and index arbitrage and other program-trading activities on a proprietary basis and for institutions

wishing to liquidate, invest in or restructure large equity portfolios. In addition, we enter into a variety of derivatives transactions as part of our trading activities for our own account to manage our own risks and as an alternative to investment in the cash markets.

Risk Arbitrage. We engage in the risk arbitrage business, which involves investing for our own account in the equity securities of companies involved in publicly announced corporate transactions.

Equity Finance and Prime Brokerage. We finance our equity positions primarily through stock lending and equity repurchase agreements. We also engage in dealer-to-dealer financing and cover proprietary and client short positions through securities borrowing and lending arrangements. We participate in these transactions globally and have an established prime brokerage business to attract more client borrowings of cash and securities.

Fixed Income. We engage in underwriting, research, sales and trading of a broad range of financial instruments in developed and emerging markets, including U.S. Treasury and government agency securities, foreign sovereign bonds and U.S. and foreign corporate bonds, money market instruments, foreign exchange and real estate-related assets. We offer a full range of derivatives products for the financing, risk management and investment needs of our customers. Our fixed income business serves corporate, institutional and sovereign customers.

Key fixed income products and channels include:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Interest Rate Products. The interest rate products business includes the government bond, agency and interest-rate derivatives activities of our business. As part of this business, we participate in government debt markets, including U.S. Treasury securities. We are a primary dealer in U.S. Treasury and government agency securities and participate in U.S. Treasury auctions and government agency new issues. We engage in secondary market sales and trading in U.S. Treasury and government agency securities as well as futures and options on such securities. We also engage in the "stripping" of government and government-guaranteed bonds to create zero-coupon securities. We offer a wide range of interest rate derivatives products. Institutional clients include insurance companies, money managers, commercial banks, hedge funds and pension funds. We provide financing for the division's inventory positions and act as an intermediary between borrowers and lenders of short-term funds utilizing repurchase and reverse repurchase agreements.

Credit Products. Our credit products business engages in research, sales, trading and capital markets activities in all credit markets, including investment-grade, high-yield and distressed debt securities, mortgage- and asset-backed instruments and credit derivatives. We provide a platform for delivering a broad range of debt and debt-related products to meet clients' investment and financing needs. Linking our derivatives expertise with our underwriting and placement capabilities enables us effectively to provide a broad range of financing and investment alternatives to our customers. Our structuring group facilitates customized solutions to clients' asset and liability management requirements, while the integration of credit derivatives with asset-backed technology creates new opportunities for clients for capital raising and credit risk management.

Senior Bank Debt Group. The Senior Bank Debt Group syndicates loans and enters into commitments to extend credit to investment-grade and non-investment-grade borrowers through branches of Credit Suisse First Boston. This service provides our clients with the convenience of a single financing source. This group also engages in secondary market trading of syndicated loans and par loans as well as trading in defaulted and distressed loans.

Real Estate Activities. CSFB originates commercial real estate loans and acquires residential mortgages, which are pooled and sold as mortgage-backed securities.

Emerging Markets. The Emerging Markets Group underwrites, invests and trades in the fixed income securities and loans of a number of sovereign and corporate issuers and obligors located in emerging market countries.

Prime Brokerage and Futures. We provide brokerage services for our customers on major futures and options exchanges worldwide. We offer a wide array of execution services including floor and electronic execution, "upstairs execution" (which includes a combination of services such as research, development of trading ideas and strategies and more individualized institutional account coverage), quantitative and technical research and relative value analysis. We offer internet electronic trading systems to institutional clients covering major futures exchanges worldwide. We also offer customers risk management services, customized reporting, real-time transaction information, and fixed income prime brokerage service to clear trades.

Energy. We offer risk management and investment products in energy markets, principally oil, natural gas and oil distillates. Products include structured hedging, swaps, forwards, options, loans and spot trading. The majority of our energy-related derivatives business focuses on longer-term transactions, offering our clients liquidity that is difficult to find or is not available in exchange-traded markets.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Money Markets. Our Money Markets Group, in conjunction with our Corporate Treasury department, is responsible for managing our unsecured funding needs. The financing is conducted primarily in various branches of Credit Suisse First Boston and in certain non-bank subsidiaries through the issuance of a wide variety of products, including time deposits, certificates of deposit, bankers' acceptances, commercial paper, medium-term notes and long-term debt.

Foreign Exchange. We provide foreign exchange services to a broad range of clients worldwide, including multinational corporations, money managers, hedge funds, banks and high-net-worth individuals.

Research. We provide investment analysis on more than 500 issuers across the credit spectrum. In addition, we provide research on a variety of structured products and global economic analysis. We provide macroeconomic analysis on developed and emerging market countries and fundamental and technical analysis on a wide range of securities and market sectors. We prepare daily, weekly and monthly publications on various aspects of the market, including the U.S. Treasury, corporate, mortgage, asset-backed, emerging market, high-yield and foreign exchange markets. We provide these publications to customers through traditional and online channels.

Investment Banking Division

The Investment Banking Division's activities include financial advisory services on mergers and acquisitions and other matters, origination and distribution of equity and fixed income securities, and leveraged finance, as well as our private equity investment activities. IBD provides comprehensive financial advisory and capital raising services (in conjunction with the Securities Division) and develops and offers innovative financing for a broad range of clients. Through the Private Equity Group, IBD also conducts worldwide private equity investment activities.

We maintain offices in select major cities through which investment banking activities are conducted. IBD has established industry groups with a broad range of dedicated industry specialists. The industry group structure facilitates the delivery of specialist information and services to industry group clients regardless of their location. IBD's clients include U.S. and international public and private corporations, sovereigns, supranational and national agencies, and public sector entities.

IBD's principal services consist of:

Mergers and Acquisitions and Other Financial Advisory Services. We provide mergers and acquisitions and other financial advisory services, including corporate sales and restructuring, as well as divestitures and take-over defense strategy. Our professionals use an industry-intensive approach and work closely with our industry specialty groups in a broad range of sectors.

Capital Raising.

Equity and Equity-Linked Offerings. We provide financing for issuers of equity and equity-linked securities in the public and private markets in conjunction with the Securities Division. We are responsible for the origination and assist in the structuring and execution of transactions for our clients.

High-Yield Debt Underwriting. We provide high-yield debt financing in the public and private capital markets. We originate, structure and execute high-yield debt transactions across a wide range of companies and industries, as well as manage client

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document relationships with both high-yield corporate issuers and financial sponsors of leveraged transactions, all in conjunction with the Securities Division.

Investment-Grade Debt Underwriting. We provide strategic advice and execution services to clients seeking financing through the investment-grade capital markets in conjunction with the Securities Division.

Bank Debt and Bridge Financing. We underwrite and syndicate bank lending facilities, offering clients the convenience of "one- stop shopping" to accomplish their financing needs. We also offer bridge financing to meet the needs of clients in the timing and financing of transactions in conjunction with the Securities Division.

Private Placements. Our Private Finance Group originates, structures, markets and places private equity, equity-linked, high- yield, investment-grade and structured securities. The group also acts as placement agent for various funds. The group consistently ranks among the top three agents in the industry for overall placement volume and is a leading supplier of products to the largest institutional investors.

Structured Products. We offer clients financing alternatives to traditional capital market instruments. The products are customized to meet each client's strategic objectives.

Private Funds Group. We raise private capital, primarily from institutional investors, for direct investment by venture capital, management buyout and other investment firms in a variety of fund types, including technology and real estate, and for certain of our private equity activities.

Project Finance. We raise capital and coordinate capital-raising efforts through a variety of public and private sources to assist corporations, consortiums and supranational and national agencies in financing projects.

Private Equity. The Private Equity Group invests primarily in unlisted or illiquid equity or equity-related securities in privately negotiated transactions. This activity has expanded following the Acquisition. The Private Equity Group makes private equity investments across the entire capital structure, from venture capital to investments in the largest leveraged buyouts. In addition to debt and equity investments in companies, the Private Equity Group invests in real estate. Investments are made directly or through a variety of investment vehicles. At December 31, 2001, CSFB managed or advised funds and proprietary private equity portfolios with committed capital of approximately $27.4 billion, and the Company managed or advised funds and proprietary private equity portfolios with committed capital of approximately $20.7 billion. At December 31, 2001, CSFB had global investments in private equity for its account of approximately $2.4 billion and had unfunded

commitments of approximately $2.5 billion. At December 31, 2001, the Company had private equity investments for its own account of approximately $906 million and had unfunded commitments of approximately $1.7 billion.

Our principal fund groups include:

Leveraged Corporate Private Equity. Leveraged corporate private equity funds, which make investments in equity and mezzanine securities arising from leveraged acquisitions and recapitalizations, restructurings, over-leveraged companies and

Mezzanine Investing. Mezzanine investment funds, which typically invest in subordinated debt and preferred stock with warrants in companies across diverse industries.

Real Estate Investing. Real estate funds, which focus on opportunistic real estate investments and high quality properties and operating companies that the funds believe have strong fundamentals, attractive risk/return profiles and substantial value- creation potential.

Sprout. Venture capital funds managed by the Sprout Group, one of the oldest and largest groups in the private equity investment and venture capital industry, which invests in early-stage, high-growth companies, management buyouts and mezzanine financing of companies that are not yet ready to seek access to the public capital markets.

Customized Fund Investment Group. A customized fund investment group for "funds of funds" and similar products, which has invested in over 350 private equity funds.

Secondary Fund. A "secondary fund", which purchases existing interests in private equity funds and direct private equity investments.

Distressed Securities Fund. A distressed securities fund, which invests in the securities of companies that are undervalued or undergoing financial difficulties, usually with the intention of acquiring control of such companies.

Our strategy with respect to each private equity fund is to manage the fund over the medium to long term to maximize the value over time of its investments. In addition to an annual management fee, we may generate realized gains from carried interest after a threshold return for investors has been achieved. Operating income may also be derived from unrealized appreciation or realized appreciation upon the disposition of the investment. These latter sources of revenue typically emerge, if at all, over a number of years, and our private equity business is therefore a long-term business.

If a private equity investment in a company substantially declines in value, we may potentially lose some or all of any management or similar fees, may not receive any increased share of the income and gains from such investment (to which we are entitled when the return on such investment exceeds certain threshold returns) and may lose our pro rata share of the capital invested in that company and other companies in the same fund. Further, it may become more difficult to dispose of the investment. Depending on the size of the investment, the nature of the company's problems or other factors, we may become involved in disputes or legal proceedings relating to the company, and our reputation or our ability to sponsor private equity investment funds in the future could be adversely affected.

Financial Services Division

Pershing. Pershing is a leading provider of financial services outsourcing solutions to many of the world's major financial institutions and independent investment managers. Founded in 1939 and acquired by DLJ in 1977, Pershing now operates out of 11 offices worldwide. Pershing provides execution, settlement and clearance and an extended service model for major financial institutions, which enables customers to provide an array of asset-gathering products and services (e.g., retirement accounts, asset management accounts and fee-based brokerage accounts). Pershing's broad range of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document services, including custody, cash management, product development, information management, portfolio evaluation, financing, proprietary research, securities lending, and related services, are used by more than 750 customers, which at December 31, 2001 collectively maintained over 4 million "active" client accounts holding more than $400 billion of assets (including Private Client Services assets held in Pershing). Accounts are considered active if Pershing has sent a statement to the client during the year. As a wholesaler of these services, Pershing provides financial products and services to customers on a fee-for-service basis.

Pershing maintains a significant presence on the major U.S. exchanges and provides agency execution for institutional block and retail orders. Pershing also supplies broad coverage of fixed income securities and money market funds, and offers access to approximately 12,000 mutual funds. Through Pershing Trading Company, L.P., Pershing is also a specialist on regional exchanges and a market maker in the over- the-counter markets.

Pershing provides internet-based solutions for account management and order entry to approximately 34,000 investment professionals. Pershing technology also enables approximately 265 broker-dealers to serve over 740,000 clients online. Pershing uses a combination of in- house products and content partnerships with other e-commerce firms to deliver a wide range of content, such as market data, third-party research and analytical tools, for investment professionals and their clients. iNautix Technologies, originally the technology group of our former CSFBdirect operations, is now a part of Pershing, and it develops, designs and supports internet-based products and services for Pershing, our affiliates and third parties. In addition, Pershing's investment research department offers investment analysis and recommendations for retail customers through traditional and online channels.

Private Client Services. Private Client Services serves high-net-worth and corporate investors with significant financial resources and specialized investment needs. The range of services offered includes single-stock brokerage, hedging and sales of restricted securities. Private Client Services also offers its clients a wide range of investment management products including third-party managed accounts and alternative investments. Private Client Services operates out of offices in ten U.S. cities and in London. Private Client Services had 515 investment advisors and managed or advised clients on approximately $58 billion in assets as of December 31, 2001.

In the first quarter of 2002, we completed the sale of CSFBdirect, our online trading operations.

OPERATING ENVIRONMENT AND COMPETITION

We believe that the long-term outlook for leaders in the investment banking industry is positive, although the industry is volatile and subject to periodic market downturns worldwide or in particular geographic regions. The global "bulge bracket", or top-tier, investment banks are likely to be more successful than other firms, and there is continuing consolidation in the financial services industry. One of the principal macroeconomic trends affecting the investment banking industry is greater capital formation, which is produced by aging demographics, pension reforms and wealth creation. This trend has led to a shift of investments toward equity securities in the United States, and this shift is beginning to occur in Europe and Asia. Consolidation and convergence, driven by a blurring of traditional product and geographic boundaries, deregulation, and importance of scale and efficiency, have also created benefits for global full-service providers such as CSFB. Technology has led to productivity improvements and new distribution and business models, more demanding and better-informed customers and the need to balance productivity gains with investment requirements.

The slowdown in global economic growth in the second half of 2000 continued in 2001, particularly in the second half of the year. Market and economic conditions were characterized by volatile equity markets. The economic slowdown in the United States and Europe led to market uncertainty, a decline in all of the major stock indices from the higher levels experienced in 2000, and a sharp decline in merger and acquisition activity and capital markets transactions across most sectors. On September 11,

2001, terrorist attacks on the World Trade Center in New York and the Pentagon in Washington, D.C. and certain other related events resulted in, among other things, the closing of U.S. stock exchanges and volatility in global financial markets and had a negative impact on financial activity, including in businesses in which we operate. The aftermath of such events exacerbated the already difficult economic and market conditions experienced by us in 2001 prior to the terrorist attack. The short-term and long-term impact of these events, including, among other

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document things, military conflicts, economic or political sanctions and further terrorist attacks, is unclear, but could have a material adverse effect on economic and market conditions and market volatility. The poor market conditions have also been exacerbated by investor concerns about perceived accounting irregularities and a deteriorating credit environment. The difficult market and economic conditions had a negative impact in 2001 on our business, particularly capital markets and financial advisory services. As a result, in 2001 we made personnel reductions in a number of business areas and certain support and other departments. These staff reductions are expected to help reduce expenses in light of the current market environment but are also designed to allow us to remain appropriately staffed. The poor market conditions have persisted in the first quarter of 2002 notwithstanding some indications that the economy may be recovering.

The financial services business, including asset management, is viewed as a growth sector. Despite a weaker and more volatile market environment, the underlying fundamentals continue to support the sector. We believe that within this sector, there will be positive net new asset growth over the next several years. This growth, together with major external changes such as technological innovation and increased volatility and complexity in world markets, is changing the way the industry delivers services, manages investments and measures risk. Investment management firms are also experiencing historically high levels of mergers and acquisitions activity. New entrants are purchasing investment management companies, while existing firms are merging to create global organizations and achieve economies of scale.

We face intense competition from various types of firms, in all aspects of our business and throughout the world. The principal competitive factors influencing our business are our ability to attract and retain highly-skilled employees, our reputation in the market place, our client relationships and our mix of market and product capabilities.

In investment banking, we compete with brokers and dealers in securities and commodities, investment banking firms, commercial banks, merchant banks and other firms offering financial services. We have also experienced significant price competition in certain of our businesses, which has reduced underwriting spreads on certain products or in certain markets. Competition from alternative trading systems is reducing fees and commissions. In addition, as private equity funds grow and proliferate, competition to raise private capital and to find and secure attractive investments is accelerating.

In asset management, CSFB's major competitors are the asset management subsidiaries of financial services firms, U.S. mutual and institutional fund managers and European fund managers. Despite the trend towards globalization in the asset management industry, competition is most significant in individual geographic locations.

FINANCE, ADMINISTRATION AND OPERATIONS

We have finance, administration, operations and other support departments, including treasury, controller, credit, risk management, corporate services, information technology, tax, legal and compliance, human resources and operations. These departments support our businesses through the processing of securities, foreign exchange and commodities transactions; receipt and delivery of funds and securities; safeguarding of customers' securities; internal financial controls, including management of global expenses, capital structure and funding; and our efforts at ensuring compliance with regulatory and legal requirements. Certain of these areas also assist in the management and monitoring of the risks associated with our business activities.

EMPLOYEES

In October 2001, CSFB announced a broad cost-cutting initiative with the goal of eliminating $1 billion in operating costs by the end of 2002. The cost reduction plan includes reducing staff levels as well as achieving savings from other non-staff costs. As a result of these staff reductions, at December 31, 2001, we had 13,561 employees based in the United States and 503 employees outside the United States. We had 3,225 employees in the Securities Division, 2,134 in IBD, 4,532 in the Financial Services Division, and 4,173 in finance, administration and operations departments. These figures include contractors as well as employees. Professional personnel receive salary as well as incentive compensation in the form of bonuses and, in certain instances, through long-term incentive and/or other compensation plans. None of our employees is represented by a labor union. We have encountered no significant labor disputes.

REGULATION

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our business is, and the securities and commodity futures and options industries generally are, subject to extensive regulation in the United States and elsewhere. As a matter of public policy, regulatory bodies in the United States and the rest of the world are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interest of customers participating in those markets.

In the United States, the Securities and Exchange Commission, or SEC, is the federal agency that is responsible for the administration of the federal securities laws. Each of CSFB Corp., Donaldson, Lufkin & Jenrette Securities Corporation, or DLJSC, and Pershing Trading Company, L.P. is registered as a broker-dealer with the SEC and as a broker-dealer in a number of states. Each of these entities is a member of a number of securities industry self-regulatory organizations, including the New York Stock Exchange, Inc. and/or the National Association of Securities Dealers, Inc., or NASD, and is subject to their regulations. Credit Suisse First Boston Capital LLC is registered with the SEC as an over-the-counter derivatives dealer (also known as a "broker-dealer lite"). CSFB Corp. and DLJSC and certain other entities are registered with the SEC and in a number of states as investment advisors. Similarly, our business is also subject to regulation by various non-U.S. governmental and regulatory bodies and self-regulatory authorities in virtually all countries where we have offices.

The commodity futures and options industry in the United States is subject to regulation under the Commodity Exchange Act, as amended. The Commodity Futures Trading Commission is the federal agency charged with the administration of the Commodity Exchange Act and the regulations thereunder. DLJSC and CSFB Corp. are each registered with the Commodity Futures Trading Commission as a futures commission merchant.

In addition, the Department of Treasury and Municipal Securities Rulemaking Board have the authority to promulgate regulations relating to U.S. government and agency securities and to municipal securities, respectively. The Board of Governors of the Federal Reserve System promulgates regulations applicable to certain securities credit transactions. In addition, because we are an indirect wholly-owned subsidiary of Credit Suisse Group, our activities are subject to significant bank regulatory restrictions on our operations. These restrictions are imposed pursuant to, among other enactments, the

International Banking Act of 1978, the Bank Holding Company Act of 1956, the Gramm-Leach-Bliley Act of 1999 and the regulations and interpretations of the Federal Reserve Board and other applicable regulators.

As a result of registration with government authorities and memberships in self-regulatory organizations, these broker-dealers are subject to overlapping regulations, which cover all aspects of their securities business. These regulations cover matters including capital requirements, the use and safekeeping of customers' funds and securities, record-keeping and reporting requirements, supervisory and organizational procedures intended to assure compliance with securities laws and rules of the self-regulatory organizations and to prevent improper trading on "material nonpublic" information, employee-related matters, limitations on extensions of credit in securities transactions, required procedures for trading on securities exchanges and in the over-the-counter market, and procedures for the clearance and settlement of trades. A particular focus of the applicable regulations concerns the relationship between broker-dealers and their customers. As a result, the broker- dealers in some instances may be required to make "suitability" determinations as to certain customer transactions, are limited in the amounts that they may charge customers, cannot trade ahead of their customers and must make certain required disclosures to their customers.

We believe that we have been in compliance in all material respects with the regulations described herein.

Capital Requirements

As a registered broker-dealer and member firm of various self-regulatory organizations, each of our broker-dealer subsidiaries is subject to the uniform net capital rule, Rule 15c3-1 of the Securities Exchange Act of 1934, or Exchange Act. This rule specifies the minimum level of net capital a broker-dealer must maintain and also requires that part of its assets be kept in relatively liquid form. Our broker-dealer lite entity is also subject to the uniform net capital rule but calculates its capital requirements under Appendix F to Rule 15c3-1. DLJSC and CSFB Corp. are each subject to the net capital requirements of the Commodity Futures Trading Commission and various commodity exchanges. We refer you to Note 9 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The SEC and various self-regulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, dictate the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC's uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.

Compliance with net capital requirements of these and other regulators could limit those operations of our subsidiaries that require the intensive use of capital, such as underwriting and trading activities and the financing of customer account balances, and also could restrict our ability to withdraw capital from our regulated subsidiaries, which in turn could limit our ability to pay our debt obligations.

Our non-U.S. broker-dealer subsidiaries are subject to the net capital requirements imposed by non-U.S. financial regulatory authorities.

At December 31, 2001, our broker-dealer subsidiaries were in compliance with all applicable regulatory capital adequacy requirements.

CERTAIN FACTORS THAT MAY AFFECT OUR BUSINESS

Our businesses are materially affected by conditions in the financial markets and economic conditions generally. In addition, our businesses are exposed to a variety of risks that could materially affect our results of operations and financial condition, including those described below. See

"Quantitative and Qualitative Disclosures about Market Risk" for a description of how CSFB manages risk.

Market Risk

As an integrated investment bank, we are materially affected by conditions in the financial markets and economic conditions generally in the United States and around the world. In addition, results of operations in the past have been, and in the future may continue to be, materially affected by other factors of a global nature.

Our large trading and investment (other than trading) positions in the debt, currency, commodity and equity markets, and in private equity, mortgage and other assets, can be adversely affected by volatility in financial markets, i.e., the degree to which prices fluctuate over a particular period in a particular market, regardless of market levels. Such volatility can also lead to losses relating to our broad range of trading and hedging products including swaps, futures, options and structured products. To the extent that we own assets, or have net long positions, in any of those markets, a downturn in those markets could result in losses from a decline in the value of our net long positions. Conversely, to the extent that we have sold assets that we do not own, or have net short positions, in any of those markets, an upturn in those markets could expose us to potentially unlimited losses as we attempt to cover our net short positions by acquiring assets in a rising market. We may from time to time have a trading strategy of holding a long position in one asset and a short position in another, from which we expect to earn operating income based on changes in the relative value of two assets. If, however, the relative value of two assets changes in a direction or manner in which we did not anticipate or against which we are not hedged, we might realize a loss in those paired positions. Such losses, if significant, could adversely affect our results of operations and financial condition.

Adverse market or economic conditions would likely reduce the number and size of transactions in which we provide underwriting, mergers and acquisitions advice and other investment banking services and therefore adversely affect our financial advisory fees and underwriting fees. Market declines in the United States and elsewhere would also likely lead to a decline in the volume of securities trades that we execute for customers and, therefore, to a decline in operating income we receive from commissions and spreads. In addition, adverse market or economic conditions could negatively affect our private equity investments.

On September 11, 2001, terrorist attacks on the World Trade Center in New York and the Pentagon in Washington, D.C. and certain other related events resulted in, among other things, the closing of U.S. stock exchanges and volatility in global financial markets and had a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document negative impact on financial activity, including in businesses in which we operate. Future terrorist attacks and related military conflicts and economic or political sanctions could have a material adverse effect on economic and market conditions and market volatility.

We could also be adversely affected by a downturn in other sectors. In the real estate sector, we finance and acquire principal positions in a number of real estate and real estate-related products for major participants in the commercial and residential real estate markets, and we securitize and trade in a wide range of real estate and real-estate related products. In the technology and telecommunications sectors, we have made significant commitments to provide investment banking advisory and underwriting services and decreasing economic growth would likely reduce our operating income from those areas.

Concentration of risk could increase our losses due to our sizeable securities holdings. Furthermore, we could be exposed to increased losses in activities such as arbitrage, market making, block trading, private equity and underwriting. We have committed substantial amounts of capital to these businesses, which may allow us to take large positions in the securities of a particular company or companies in a particular industry, country or region. Moreover, the trend in all major capital markets is toward larger and more frequent commitments of capital in many of these activities.

If any of the variety of instruments and strategies we use to hedge our exposure to various types of risk is not effective, we may incur losses. Many of our strategies are based on historical trading patterns and correlations and unexpected market developments may affect our hedging strategies exposure in all market environments or against all types of risk. We may only be partially hedged or our hedging strategies may not be fully effective in mitigating our risk.

In addition to the potentially adverse effects described above, market risk could exacerbate the other risks we face. For example, if we were to incur substantial trading losses, our need for liquidity could rise sharply while access to liquidity could be impaired. In conjunction with a market downturn, our customers and counterparties could also incur substantial losses of their own, thereby weakening their financial condition and increasing our credit risk to them.

Credit Risk

We are also exposed to the risk that third parties that owe us money, securities or other assets will not perform their obligations. This risk may arise, for example, from holding securities of third parties; entering into swap or other derivative contracts under which counterparties have long-term obligations to make payments to us; executing securities, futures, currency or commodity trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearinghouses or other financial intermediaries; extending credit to our clients through bridge or margin loans or other arrangements; and economic and political conditions beyond our control.

We have experienced, due to competitive factors, pressure to assume longer-term credit risk, extend credit against less liquid collateral and more aggressively price these instruments based on the credit risks we take.

Although we regularly review credit exposure to specific clients and counterparties and to specific industries, countries and regions that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to foresee or detect, such as fraud. We may also fail to receive full information with respect to the trading risks of a counterparty. In addition, concerns about, or a default by, one institution could lead to significant liquidity problems, losses or defaults by other institutions because the commercial soundness of many financial institutions may be closely related as a result of credit, trading, clearing, or other relationships between institutions. This risk is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies, clearinghouses, banks, securities firms and exchanges with which we interact on a daily basis, and could adversely affect us.

Cross Border and Foreign Exchange Risk

Country, regional and political risks are components of market risk as well as credit risk. Economic or political pressures in a country or region including those arising from local market disruptions, currency crises and monetary controls, may adversely affect the ability of clients

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or counterparties located in that country to obtain foreign exchange and, therefore, to perform their obligations to us. The political, economic or other circumstances in which we operate may have an adverse impact on our results of operations.

We are also exposed to risk from fluctuations in exchange rates for currencies as a portion of our assets and liabilities are denominated in currencies other than the U.S. dollar, which is our financial reporting currency. Exchange rate volatility may have an adverse impact on our results of operations.

Liquidity Risk

Liquidity, or ready access to funds, is essential to our businesses. We depend on continuous access to capital markets to finance day-to- day operations. An inability to raise money in the long-term or short-term debt capital markets, or an inability to access the repurchase and securities lending markets, could have a substantial negative effect on our liquidity. Our ability to borrow in the debt markets

could be impaired by factors that are not specific to us, such as severe disruption of the financial markets or negative views about the financial services industry generally. In addition, lenders could develop a negative perception of our long-term or short-term financial prospects if we incurred large trading losses, the level of our business activity decreased due to a market downturn, regulatory authorities took significant action against us, or we discovered serious employee misconduct or illegal activity.

If we were unable to borrow in the debt capital markets, or access the repurchase and securities lending markets, we would need to liquidate assets, such as our investment and trading portfolios, to meet maturing liabilities. Our ability to liquidate portfolios could be adversely affected by a market downturn. In certain market environments, such as when there is market volatility or uncertainty, overall market liquidity may decline. In a time of reduced liquidity, we may be unable to sell some of our assets, or we may have to sell assets at depressed prices, which in either case could adversely affect our results of operations. In addition, our ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.

Furthermore, our borrowing costs and our access to the debt capital markets depend significantly on our credit ratings. These ratings are assigned by ratings agencies, which may reduce or withdraw their ratings or place us on "credit watch" with negative implications at any time. Credit ratings are important to us when competing in certain markets and when seeking to engage in long-term transactions, including over- the-counter derivatives. A reduction in our credit ratings could increase our borrowing costs and limit our access to capital markets. This, in turn, could reduce our liquidity, and could negatively impact our operating results and financial condition.

Operational Risks

Operational risk is the risk of adverse effects on our business as a consequence of conducting operations in an improper or inadequate manner, or as a result of external factors. Our businesses face a wide variety of operational risks. Operational risks arise from organizational factors, such as change of management and other personnel, data flow, communication, coordination and allocation of responsibilities, as well as from policy and process risks from weakness in or non-compliance with policies and critical processes involving documentation, due diligence and settlement. Operational risks also arise from dependencies on information technology and the telecommunications infrastructure and risks arising from e-commerce activities. We also face risks arising from human error and from external factors such as fraud and business disruption, including an interruption in the provision of communications, technology, utilities, transportation or other services on which the normal operation of our business depend.

In particular, we are exposed to risk from potential non-compliance with polices on securities transactions, and settlements and payments processes. There have been a number of highly publicized cases involving fraud or other misconduct by employees in the financial services industry in recent years, and we run the risk that employee misconduct could occur. Misconduct by employees could include engaging in unauthorized activities or binding us to transactions that exceed authorized limits or present unacceptable risks, which in either case may result in unknown or unmanaged risks or losses. Employee misconduct could also involve the improper use or disclosure of confidential information, which could result in regulatory sanction and serious reputational or financial harm. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We also face operational risk from potential losses caused by a breakdown in information, communication, transaction settlement and processing procedures. As an integrated investment bank, we rely heavily on our financial, accounting and other data processing systems. If any of these systems do not operate properly or are disabled, we could suffer financial loss, a disruption of our businesses, liability to our clients, regulatory intervention or reputational damage. The inability of our systems to

accommodate an increasing volume of transactions could also constrain our ability to expand our businesses.

Legal and Regulatory Risks

We face significant legal risks in our businesses, and the volume and amount of damages claimed in litigation and other adversarial proceedings against financial services firms is increasing. These include, among other things, disputes over the terms of trades and other transactions in which we act as principal, potential liability under securities law or other law for materially false or misleading statements made in connection with transactions in which we act as underwriter, placement agent or financial advisor, potential liability for the "fairness opinions" and other advice we provide to participants in corporate transactions, disputes over the terms and conditions of complex trading arrangements and disputes concerning the adequacy or enforceability of documents relating to some of our transactions. We face the possibility that counterparties in complex or risky trading transactions will claim that we improperly failed to tell them of the risks or that they were not authorized or permitted to enter into these transactions with us and that their obligations to us are not enforceable. We are also subject to claims arising from disputes with employees for, among other things, discrimination or harassment. These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time.

As a participant in the financial services industry, we are subject to extensive regulation by governmental and self-regulatory organizations around the world. The requirements imposed by our regulators are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with us. Consequently, these regulations often serve to limit our activities, including through net capital, customer protection and market conduct requirements, and restrictions on the businesses in which we may operate or invest. Compliance with many of these regulations entails a number of risks, particularly in areas where applicable regulations may be unclear. The authorities have the power to bring administrative or judicial proceedings against us, which could result, among other things, in suspension or revocation of our licenses, restrictions on some of our business activities, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action which could materially harm our results of operations and financial condition. For a description of the legal proceedings and regulatory examinations to which we are subject, please see "Legal Proceedings".

Changes in laws, rules or regulations affecting our operations, or in the interpretation or enforcement of such laws, rules and regulations, may adversely affect our results. We may be materially affected not only by regulations applicable to us as a financial services company, but also by regulations of general application. For example, the volume of our businesses in any one year could be affected by, among other things, existing and proposed tax legislation, antitrust and competition policies and other governmental regulations and polices and changes in the interpretation or enforcement of existing laws and rules that affect the business and financial communities.

Competition

We face increased competition which could affect our business and results of operations. In recent years, there has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks and other broad-based financial services firms have established or acquired broker-dealers or have merged with or acquired other financial institutions and insurance companies. This trend has created a number of firms that, like us, have the ability to offer a wide range of products. Some of these firms may offer a broader range of products than we do, or offer such products at more competitive prices. The passage of the Gramm-Leach-Bliley Act in the United States, which became effective in most respects in March 2000 and effectively repealed certain sections of the 1933 Glass-Steagall Act, has allowed commercial banks, securities firms and insurance firms to affiliate, which has accelerated consolidation and may increase competition in the financial services industry.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In the highly competitive environment arising from globalization and convergence in the financial services industry, a reputation for financial strength and integrity is critical to our ability to attract and maintain customers. Our reputation could be harmed if we fail adequately to promote and market our brand. Our reputation could also be damaged by, among other things, employee misconduct, a decline in results, or a downturn in financial markets or the financial services industry in general.

Our performance is largely dependent on the talents and efforts of highly skilled individuals. There is significant competition in the financial services industry for qualified employees. We also compete for employees with companies both in and outside the financial services industry. We have devoted considerable resources to recruiting, training and compensating such individuals. Our continued ability to compete effectively in our businesses depends on our ability to attract new employees and to retain and motivate existing employees.

We compete against a wide variety of firms in all aspects of our business throughout the world. The type of firms with which we compete include brokers and dealers in securities and commodities, investment banking firms, commercial banks, merchant banks and other firms offering financial services. The principal competitive pressures are price competition arising from the trend toward consolidation in the global financial services industry, the ability to recruit and retain high quality professional staff, the ability to maintain existing client relationships, the mix of market capabilities and the ability to preserve our reputation.

We also face competitive challenges from new trading technologies. Securities and futures transactions are now being conducted through the internet and other alternative, non-traditional trading systems, and it appears that the trend toward alternative trading systems will continue and probably accelerate. A dramatic increase in computer-based or other electronic trading may adversely affect our commission and trading revenues, exclude our businesses from certain transaction flows, reduce our participation in the trading markets and the associated access to market information and lead to the creation of new and stronger competitors. We may also be required to make additional expenditures to develop or invest in new trading systems or otherwise to invest in technology to maintain our competitive position.

Acquisition Risk

Acquisition of financial services businesses has been an important element of CSFB's strategy, and when appropriate, CSFB expects to consider additional acquisitions in the future. Even though CSFB reviews the records of companies it plans to acquire, such reviews are inherently incomplete and it is generally not feasible for CSFB to review in detail all such records. Even an in-depth review of records may not reveal existing or potential problems or permit us to become familiar enough with a business to assess fully its capabilities and deficiencies. As a result, CSFB may assume unanticipated liabilities, or an acquisition may not perform as well as expected. CSFB faces the risk that the returns on acquisitions will not support the expenditures or indebtedness incurred to acquire such business, or the capital expenditures needed to develop such businesses.

Integration Risk

We and CSFB face the risk that we will not be able to integrate acquisitions into existing operations effectively. Integration may be hindered by, among other things, differing procedures, business practices and technology systems, as well as difficulties in adapting an acquired company into the existing organizational structure. If we and CSFB are unable to address these changes effectively, our results of operations and financial condition could be adversely affected.

Item 2: Properties

A description of our principal offices as of February 28, 2002 is provided in the table below:

Lease Approximate Location Owned/Leased Expiration Square Feet New York City, NY

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Eleven Madison Avenue (1) Leased 2017 1.5 million One Madison Avenue (2) Leased 2020 1.4 million 277 Park Avenue (3) Leased 2021 415,000 315 Park Avenue South Leased 2107 183,000 Jersey City, NJ Leased 2004 12,000 Jersey City, NJ Leased 2006 29,000 Jersey City, NJ Leased 2009 485,000 Florham Park, NJ Owned 142,000 East Hanover, NJ Owned 325,000 Florham Park, NJ Leased 2004 43,000 111 Old Broad Street, London Leased 2018 121,000 (1) Our principal executive offices.

(2) On February 22, 2001, we signed a triple net lease commencing January 1, 2002 for the entirety of the building and subleased it back to Metropolitan Life Insurance Company ("MetLife") for the space that MetLife will occupy on a declining basis over time. At February 28, 2002, approximately 777,660 square feet were occupied by MetLife and another tenant pursuant to subleases.

(3) On February 1, 2001, we assigned our main lease interest to JP Morgan Chase Bank. We will continue to occupy space at 277 Park Avenue under the terms of a sub-lease with JP Morgan Chase Bank until April 2002.

In addition, we lease an aggregate of approximately 1.44 million square feet for our domestic and international regional offices, the leases for which expire at various dates through 2025. Other domestic offices are located in Atlanta, Austin, Bala Cynwyd, Baltimore, Beachwood, Bethesda, Boston, Charlotte, Chicago, Dallas, East Brunswick, Englewood, Hollywood, Houston, Los Angeles, Menlo Park, Miami, Mount Prospect, Newport Beach, Oak Brook, Palo Alto, Pasadena, Philadelphia, Plano, Plymouth Meeting, Princeton, San Francisco, Seattle, Tampa, Washington D.C. and Westport. Our international offices are located in Buenos Aires, Geneva, Toronto, Hong Kong, Tokyo, Geneva, London, Chennai and Dubai.

We previously leased approximately 246,000 square feet at 5 World Trade Center, one of the buildings that collapsed on September 11, 2001 as part of a terrorist attack in New York City and Washington, D.C. Our 5 World Trade Center operations have been relocated to certain of our other offices in New York City. We also previously leased approximately 188,000 square feet at 280 Park Avenue in New York City. In 2001, we subleased approximately 7,500 square feet to a third party and the leases on the remainder of the space either ended or were terminated. In New York City, we also previously occupied approximately 94,000 square feet at 120 Broadway. In August 2001, we subleased this space to third parties. In London, we previously leased approximately 107,000 square feet at 99 Bishopsgate. In April 2001, we surrendered some of the space back to the landlord and assigned the remainder to a third party. In Jersey City, New Jersey, we leased approximately 206,000 square feet for the operations of CSFBdirect. In connection with the sale of CSFBdirect to Bank of Montreal, we subleased approximately 35,000 square feet to Bank of Montreal and we also subleased approximately 78,000 square feet to a third party. We will vacate approximately 15,000 square feet and retain the rest of the space for disaster recovery operations.

We believe that our existing and planned facilities are adequate for our current and future needs. Our facilities at Eleven Madison Avenue, One Madison Avenue and 315 Park Avenue South constitute our corporate campus in Midtown South in New York City.

Item 3: Legal Proceedings

We are involved in a number of judicial, regulatory and arbitration proceedings (including those described below and actions that have been separately described in previous filings) concerning matters arising in connection with the conduct of our businesses. Some of the actions have been brought on behalf of various classes of claimants and seek damages of material and indeterminate amounts. We believe, based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not have a material adverse

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document effect on our financial condition but might be material to operating results for any particular period, depending, in part, upon the operating results for such period.

National Gypsum Company Litigation

In October 1995, DLJSC was named as a defendant in a purported class action filed in Texas state court on behalf of the holders of $550 million principal amount of subordinated redeemable discount debentures of National Gypsum Corporation ("NGC") that were cancelled in connection with a Chapter 11 plan of reorganization for NGC consummated in July 1993. The complaint alleges that the debentures were undervalued in the NGC plan of reorganization because after the plan was consummated, NGC's shares traded for values substantially in excess of, and in 1995 NGC was acquired for a value substantially in excess of, the values upon which NGC's plan of reorganization was based. The claims against DLJSC arise out of its activities as financial advisor to NGC in the course of NGC's Chapter 11 reorganization proceedings. The complaint seeks compensatory and punitive damages purportedly sustained by the class.

On October 10, 1997, DLJSC and others were named as defendants in an adversary proceeding in the Bankruptcy Court brought by the NGC Settlement Trust, an entity created by the NGC plan of reorganization to deal with asbestos-related claims. On May 7, 1998, DLJSC and others were named as defendants in a second action in a Texas state court brought by the NGC Settlement Trust. The allegations of these complaints are substantially similar to those of the earlier class action pending in Texas state court.

In an Order, dated March 1, 1999, the Texas state court granted motions for summary judgment filed by DLJSC and the other defendants in these state court actions, and the plaintiffs subsequently appealed. The plaintiffs and DLJSC have now entered into an agreement, dated September 28, 2001, to settle all of the claims against DLJSC in these actions. The Texas state court has now granted final approval to the settlement.

Plaintiff Initial Public Offering Fee Antitrust Litigation

Since November 1998, several lawsuits have been filed in the U.S. District Court for the Southern District of New York against CSFB Corp., DLJSC and numerous other brokerage firms, alleging that the defendant broker/dealers conspired to fix the "fee" paid for underwriting initial public offering securities by setting the underwriters' discount or "spread" at 7%, in violation of the federal antitrust laws. The lawsuits purport to be class actions brought on behalf of classes of persons and entities that purchased and issued securities in IPOs, and seek treble damages in an unspecified amount and injunctive relief as well as attorney's fees and costs.

In February 1999, the Court consolidated the various cases in a single litigation, captioned In re Public Offering Fee Antitrust Litigation and, on April 29, 1999, CSFB Corp. and other defendants filed a motion to dismiss the complaint as a matter of law. Meanwhile, beginning in August 2000, several other complaints were filed on behalf of issuers of stock in IPOs containing the same allegations of an

industry-wide conspiracy to fix IPO underwriting fees and by order, dated April 10, 2001, the Court consolidated the issuer complaints.

On February 14, 2001, the Court dismissed the purchaser plaintiffs' claims on the ground that those plaintiffs lacked legal standing to assert antitrust claims. The Court did not grant leave to replead, and subsequently denied the purchaser plaintiffs' motion to vacate or reconsider the ruling. The purchaser plaintiffs now are appealing the Court's dismissal to the United States Court of Appeals for the Second Circuit.

On July 6, 2001, the IPO issuer plaintiffs filed a consolidated issuer complaint in the U.S. District Court for the Southern District of New York, which names numerous defendants including CSFB Corp. and us, under the caption In re Issuer Plaintiff Initial Public Offering Fee Antitrust Litigation. The defendants have moved to dismiss the consolidated issuer complaint. This motion remains pending before the Court. Our entities intend to defend themselves vigorously against all of the allegations in this matter.

AmeriServe Food Distribution Inc. Litigation

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On or about January 31, 2000, AmeriServe Food Distribution, Inc. ("AmeriServe"), its parent company, Nebco Evans Holding Company, and related corporations filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Since then, the Bankruptcy Court has confirmed a liquidation plan, and the plan has been consummated. Pursuant to the plan, substantially all the assets of AmeriServe were sold and a "Post-Confirmation Estate" has been created. The Post-Confirmation Estate is authorized to assert a wide assortment of claims against various parties for the benefit of various creditors. On or about December 8, 1999, DLJ Bridge Finance, Inc., wholly-owned indirectly by us, made a $100 million secured loan to AmeriServe. The loan subsequently was transferred to DLJ Capital Funding, also indirectly wholly-owned by us, which has filed a claim with respect to the loan in the Bankruptcy Court proceeding. Pursuant to the plan, funds for payment of this claim have been escrowed pending allowance of the claim by the Bankruptcy Court.

On or about November 28, 2000, following discovery from us concerning our relationships with AmeriServe and related companies, holders of certain AmeriServe secured notes issued on or about October 1, 1999, commenced an adversary proceeding in the Bankruptcy Court, seeking under the Bankruptcy Code to subordinate DLJ Capital Funding's claim to the secured noteholders' claims. On April 4, 2001, the Court denied a motion to dismiss filed by DLJ Capital Funding and ordered plaintiffs to file an amended complaint setting forth with specificity their claims against DLJ Capital Funding. An amended complaint was filed and, on May 30, 2001, DLJ Capital Funding moved to dismiss the amended complaint. Resolution of that motion is pending. DLJ Capital Funding intends to defend itself vigorously against all of the allegations contained in the complaint.

On December 14, 2000, Morgens Waterfall Holdings, LLC ("Morgens") filed a complaint in the U.S. District Court for the Southern District of New York against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and entities. The complaint asserted common law and federal securities law claims arising out of alleged misrepresentations and omissions relating to Morgens' purchases of secured AmeriServe notes issued on or about October 1, 1999. The complaint sought, among other things, compensatory and punitive damages, as well as rescission and declaratory relief. On January 24, 2001, Morgens and certain affiliated entities filed an amended complaint asserting substantially similar claims. On February 1, 2001, the District Court dismissed the amended complaint for failure to meet certain pleading standards with leave to replead within 20 days. On February 20, 2001, Morgens filed a second amended complaint, which omits certain previously asserted claims but is similar in substance to Morgens' first amended complaint. On April 6, 2001, the defendants answered the second amended complaint and asserted counterclaims against Morgens seeking, among other things, compensatory damages for breach of contract. Morgens answered the counterclaims. Our entities filed summary judgment motions in February 2002. Plaintiffs cross-moved

for partial summary judgment. The Court granted our motion in part, dismissing entirely from the case all of our entities except DLJSC and denied plaintiffs' motion in full. Trial against DLJSC is scheduled to commence on April 15, 2002. Our entities intend to defend themselves vigorously against all of the allegations contained in the second amended complaint.

On December 27, 2000, GSC Recovery, Inc. ("GSC") filed a complaint in the Superior Court of New Jersey, Law Division, Morris County, against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and entities seeking compensatory and punitive damages. The complaint arose out of alleged misrepresentations and omissions relating to GSC's purchases of certain unsecured AmeriServe notes issued in 1997 and 1998. On March 6, 2001, the DLJ entities named as defendants moved to dismiss the complaint. The Court subsequently granted in part, and denied in part, the motion to dismiss. The plaintiffs moved the Court to reconsider its decision, but the Court denied the motion. GSC filed a second amended complaint on August 10, 2001, and our entities served an answer to the second amended complaint on September 4, 2001. Our entities intend to defend themselves vigorously against all of the allegations contained in the complaint.

On January 30, 2001, Conseco Capital Management, Inc. and certain affiliated entities ("Conseco") filed a complaint in the U.S. District Court for the Southern District of New York against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and entities. The complaint asserted common law and federal securities law claims arising out of alleged misrepresentations and omissions relating to Conseco's purchases of the AmeriServe secured notes issued on or about October 1, 1999. On August 31, 2001, Conseco filed an amended complaint asserting claims for fraud and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document control person liability under federal securities law. The parties entered into an agreement, dated March 15, 2002, to settle this case, which agreement has been approved by the Bankruptcy Court.

On November 8, 2001, Ronald A. Rittenmeyer, in his capacity as Plan Administrator of AFD Fund, the Post-Confirmation Estate of the bankruptcy cases of AmeriServe and its affiliates, filed a complaint in the County Court of Dallas, Texas against us, DLJSC, Donaldson, Lufkin & Jenrette Merchant Banking, Inc., Donaldson, Lufkin & Jenrette Merchant Banking Partners, L.P., Donaldson, Lufkin & Jenrette Merchant Banking Partners II, L.P., Donaldson, Lufkin & Jenrette Merchant Banking II, Inc., and certain officers, directors and other individuals and entities. Plaintiff asserts breach of fiduciary duty claims arising out of the acquisition of ProSource by AmeriServe in 1998. Our defendants filed answers generally denying all plaintiff's allegations on January 15, 2002; our two individual defendants also filed special appearances denying personal jurisdiction. Our entities intend to defend themselves vigorously against all of the allegations contained in the complaint.

Independent Energy Holdings PLC Litigation

Beginning on September 6, 2000, DLJSC, Donaldson, Lufkin & Jenrette International ("DLJI") and certain other individuals and entities were named as defendants in six putative class actions filed in the U.S. District Court for the Southern District of New York on behalf of a purported class of persons who purchased or acquired American Depository Shares ("ADS") of Independent Energy Holdings PLC ("Independent Energy") in Independent Energy's secondary offering of $200 million of ADS in March 2000. The complaints, which were substantially the same, alleged violations of the federal securities laws against DLJSC, as one of the underwriters of the ADS, and DLJI, as a financial advisor to Independent Energy that sold shares in connection with the secondary offering, arising out of alleged misrepresentations and omissions contained in the registration statement and prospectus for the secondary offering of ADS. The complaints seek, among other things, compensatory damages, rescission, and equitable and/or injunctive relief.

On December 15, 2000, the complaints pending in the Southern District court were consolidated. A consolidated amended complaint was filed on February 16, 2001, and a second amended consolidated complaint was later filed. On April 19, 2001, our entities named as defendants moved to dismiss the

second amended consolidated complaint. On July 26, 2001, the Court rendered a decision granting in part, and denying in part, our motion. The Court held that plaintiffs' second amended consolidated complaint states a claim against DLJSC and DLJI under the Securities Act and against DLJSC under the Exchange Act and also states a control person liability claim against us under the Securities Act. On August 23, 2001, our entities answered the second amended consolidated complaint. On September 28, 2001, plaintiffs moved to certify a class in this matter. Our entities intend to defend themselves vigorously against all of the allegations in this matter.

Litigation Related to CSFB's Acquisition of DLJ

In September 2000, DLJSC, we and our directors, and Credit Suisse Group, along with certain other entities, were named as defendants in a putative class action commenced in the U.S. District Court for the Southern District of New York brought on behalf of a purported class of public shareholders of DLJdirect (which was subsequently renamed CSFBdirect). The complaint alleges, among other things, that certain statements in the 1999 prospectus issued in connection with the initial public offering of DLJdirect shares were allegedly false and misleading in their description of the rights attributable to the DLJdirect shares; that the tender offer materials disseminated in connection with Credit Suisse Group's acquisition of us (the "CSG Transaction") were false and misleading in allegedly failing to describe certain rights to the DLJdirect shares in connection with the CSG Transaction, among other things; and that these alleged misstatements constitute violations of the federal securities laws. The complaint further alleges that defendants violated their fiduciary duties under state law by failing to provide for the purchase of DLJdirect shares as part of the CSG Transaction. The complaint seeks, among other things, an award of rescission or damages in an unspecified amount, a declaration that defendants have violated the federal securities laws and their state law fiduciary duties, and unspecified corrective disclosures. On February 23, 2001, the defendants moved to dismiss the complaint and, on October 5, 2001, the Court dismissed the complaint in its entirety.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of DLJdirect common stock against DLJ and others were consolidated and captioned In re CSFBdirect Tracking Stock Shareholders Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that alleged that our proposed offer, announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirect at a price of $4 per share was unfair. Subsequent to the proposed offer to acquire all of the publicly owned CSFBdirect common stock for $4 per share, an additional ten putative class actions were filed in the Delaware Chancery Court alleging that the proposed offer was unfair. Those actions were then consolidated with the In re CSFBdirect Tracking Stock Shareholders Litigation. On July 10, 2001, the parties to the consolidated cases entered into a Memorandum of Understanding providing for the settlement, pending Court approval, of those cases with no admission of liability by defendants. On March 18, 2002, the Court ordered that a hearing be scheduled for June 6, 2002 to determine whether the settlement should be approved.

Governmental/Regulatory Inquiries and Litigation Relating To IPO Allocation Practices

Governmental/Regulatory Inquiries Relating To IPO Allocation Practices. CSFB Corp. has been the subject of an investigation in connection with certain of its alleged practices as to the allocation of shares in IPOs and subsequent securities transactions and commissions by the NASD Regulation, Inc. ("NASDR"), the U.S. Attorney's Office for the Southern District of New York (the "U.S. Attorney, S.D.N.Y.") and the SEC. To our knowledge, several other investment banks have been the subjects of investigations regarding similar matters. These inquiries have principally focused on the allocation practices with respect to IPOs in 1999 and 2000, and, in particular, the receipt of allegedly excessive commissions on secondary trades from certain customers that received allocations of shares and the relationship between the payment of commissions and the receipt of initial public offering allocations. On January 22, 2002, CSFB Corp. fully resolved the investigation by the SEC, which filed a Complaint, Consent and Final Judgment in the U.S. District Court for the District of Columbia. CSFB Corp. has

also entered into a Letter of Acceptance, Waiver and Consent with the NASDR (the "AWC"), which fully resolves the NASDR investigation. Both documents charge CSFB Corp. with violations of certain NASD Conduct Rules and record keeping regulations and the NASDR document also charges CSFB Corp. with failure to supervise. Neither document made any allegations or findings of fraudulent conduct by CSFB Corp. Pursuant to these settlements, CSFB Corp. agreed to pay a total of $100 million. This amount includes a $30 million civil penalty to be divided between the SEC and NASDR and a $70 million payment to be made to the U.S. Treasury and NASDR, representing disgorgement as a result of the conduct described by the SEC and NASDR in the complaint and AWC. As part of these settlements, CSFB has adopted and agreed to follow new policies and procedures relating to the allocation of shares in IPOs. CSFB Corp. was also enjoined as part of these settlements from prescribed violations of the NASD Conduct Rules and record keeping requirements and was censured by the NASDR. CSFB Corp. settled these investigations without admitting or denying the allegations in the Complaint and AWC. CSFB Corp. has also been separately informed that the U.S. Attorney, S.D.N.Y. has closed its investigation of CSFB Corp. in connection with its practices of allocating shares of IPO securities during the period from 1999 through 2000 without bringing any action.

Litigation Relating To IPO Allocation Practices. Since January 2001, CSFB Corp., DLJSC and several other investment banks, have been named as defendants in a large number of putative class action complaints filed in the U.S. District Court for the Southern District of New York, alleging various violations of the federal securities law resulting from alleged material omissions and misstatements in registration statements and prospectuses for IPOs and with respect to transactions in the aftermarket. These lawsuits contain allegations that the registration statement and prospectus either omitted or misrepresented material information about commissions paid to CSFB Corp., DLJSC or the other investment banks and aftermarket transactions by certain customers that received allocations of shares in the IPOs. In certain complaints, CSFB Corp., DLJSC or the other investment banks are also alleged to have issued misleading analyst research reports that failed to disclose the alleged allocation practices and that analysts were allegedly subject to a conflict of interest resulting from the manner in which bonus compensation was paid. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

Since March 2001, CSFB Corp. and several other investment banks have been named as defendants in several putative class actions filed with the U.S. District Court for the Southern District of New York alleging violation of the federal and state antitrust laws in connection with alleged practices in allocation of shares in IPOs in which such investment banks were a lead or co-managing underwriter. The amended

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document complaint in these lawsuits, which have now been consolidated into a single action, alleges that the underwriter defendants have engaged in an illegal antitrust conspiracy to require customers, in exchange for IPO allocations, to pay non-competitively determined commissions on transactions in other securities, to purchase an issuers' shares in follow-up offerings, and to commit to purchase other less desirable securities. The complaint also alleges that the underwriter defendants conspired to require customers, in exchange for IPO allocations, to agree to make aftermarket purchases of the IPO securities at a price higher than the offering price, as a precondition to receiving an allocation. These alleged "tie-in" arrangements are further alleged to have inflated artificially the market price for the securities. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

On May 25, 2001, CSFB Corp. was sued in the U.S. District Court for the Southern District of Florida by a putative class of issuers in IPOs in which CSFB Corp. acted as lead manager on the grounds that CSFB Corp. underpriced IPOs, accepted excessive brokerage commissions in exchange for allocations in IPOs, required investors to give CSFB Corp. a share of IPO profits, and used IPO allocations to obtain additional investment banking business, all in breach of the underwriting agreement. This case was subsequently transferred to the U.S. District Court for the Southern District of New York. An amended complaint was filed on February 4, 2002 in this matter alleging, among

other claims, a claim for indemnification under the underwriting agreements in the aforementioned IPO securities cases pending in the U.S. District Court for the Southern District of New York. CSFB Corp. intends to defend itself vigorously against all of the claims asserted in this matter.

On June 29, 2001, CSFB Corp., together with another investment bank, was also named as a defendant in an action brought by a putative class consisting of CSFB Corp. retail customers that purchased shares in Covad Communications (the "Covad Action"). CSFB Corp. was alleged to have violated a fiduciary duty to its retail customers by issuing favorable analyst reports in an effort to obtain investment banking business from Covad, including secondary offerings. The complaint in the Covad Action has been dismissed on consent of all parties. The plaintiffs in the Covad Action have stated their intention to file a new complaint. CSFB Corp. intends to defend itself vigorously against all of the claims asserted in this matter.

On August 2, 2001, CSFB Corp. and five other investment banks were named as defendants in a putative class action filed with the U.S. District Court for the Southern District of New York, alleging violations of the federal securities laws resulting from the issuance by defendants' research analysts of research reports on certain internet and technology company stocks, which reports included "buy" recommendations that allegedly increased or sustained the trading price of the stocks, and allegedly were materially misleading because they did not disclose the alleged financial interests of the analyst or the defendant investment banks in the subject internet or technology company. On November 9, 2001, CSFB Corp. was served with the complaint in this action. CSFB Corp. intends to defend itself vigorously against all of the claims asserted in this matter.

NewPower Holdings, Inc. (Enron-related) Litigation

Since February 27, 2002, Credit Suisse First Boston, Inc. ("CSFBI"), DLJSC, CSFBdirect and certain other investment banks, along with NewPower Holdings, Inc. ("NewPower") and certain of NewPower's directors, have been named as defendants in four putative class actions filed with the U.S. District Court for the Southern District of New York. One of our employees is a director of NewPower and is named in the complaints. These complaints allege violations of federal securities law due to alleged material misrepresentations in, and omissions of material fact from, the registration statement and prospectus issued in connection with NewPower's October 5, 2000 IPO, and for alleged misrepresentations and omissions regarding NewPower after the IPO. According to the complaints, NewPower was formed by Enron Corp. ("Enron") in 1999, and Enron remains NewPower's controlling shareholder. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

CSFB Corp., as well as, we understand, other investment banks, has received inquiries and requests for information from certain U.S. Congressional committees and the SEC regarding certain transactions and business relationships with Enron and its affiliates, including certain Enron-related special purpose entities. We are cooperating fully with such inquiries and requests.

Item 4: Submission of Matters to a Vote of Security Holders

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Pursuant to General Instruction I of Form 10-K, the information required by Item 4 is omitted.

PART II

Item 5: Markets for Registrant's Common Equity and Related Stockholder Matters

All of our common equity securities are owned indirectly by Credit Suisse Group.

Item 6: Selected Financial Data

The Selected Consolidated Financial Data is set forth on pages 24 to 25 in Part II, Item 7 of this Annual Report.

Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations

SELECTED CONSOLIDATED FINANCIAL DATA(1) Credit Suisse First Boston (USA), Inc. and Subsidiaries

Years Ended December 31,

2001 2000 1999 1998 1997

(in millions, except share data)

Consolidated Statement of Operations Data: Revenues: Principal transactions-net $ 1,255 $ 704 $ 806 $ 12 $ 546 Investment banking and advisory 3,367 3,032 2,859 2,269 1,674 Commissions 1,479 1,474 1,201 855 691 Interest and dividends, net(2) 1,224 734 549 686 481 Other 223 94 116 102 79

Total net revenues 7,548 6,038 5,531 3,924 3,471

Expenses Employee compensation and benefits 4,746 4,393 3,146 2,271 1,938 Occupancy and equipment rental 700 444 321 262 186 Brokerage, clearing, and exchange fees 325 207 143 118 102 Communications 315 222 162 120 87 Professional fees 410 317 286 173 169 Merger-related costs 476 1,104 Other operating expenses 791 873 519 379 328

Total costs and expenses 7,763 7,560 4,577 3,323 2,810

Income (loss) before provision (benefit) for income taxes, extraordinary items and cumulative effect of a change in accounting (215) (1,522) 954 601 661 principle

Income (loss) before extraordinary items and cumulative effect of a (145) (1,064) 601 371 408 change in accounting principle Loss on early extinguishment of debt, net of tax benefit of ($5) (12) Cumulative effect of a change in accounting principle, net of tax 1 provision

Net income (loss) $ (144) $ (1,076) $ 601 $ 371 $ 408

As of December 31,

2001 2000 1999 1998 1997

(in millions, except share and financial ratios)

Consolidated Statement of Financial Condition Data: Securities purchased under agreements to resell and $ 112,193 $ 112,903 $ 59,887 $ 44,031 $ 43,227 securities borrowed Total assets 218,320 212,219 109,012 72,226 70,449 Securities sold under agreements to repurchase and 123,206 106,662 68,016 43,098 43,694 securities loaned Long-term borrowings 15,663 11,258 5,160 3,482 2,128 Redeemable trust securities 200 200 200 200 Stockholders' equity 6,888 6,506 3,907 2,928 2,061 Other Consolidated Financial Data: Ratio of net assets to stockholders' equity(3) 15.4x 15.3x 12.6x 9.6x 13.2x Ratio of long-term borrowings to total capitalization(4) 0.63 0.59 0.53 0.52 0.48 Ratio of earnings to fixed charges(5)(6) 0.98x 0.82x 1.19x 1.13x 1.16x (1) On November 3, 2000, Credit Suisse Group acquired DLJ. CSFB Corp., Credit Suisse Group's principal U.S. registered broker-dealer subsidiary, became a subsidiary of DLJ, and DLJ changed its name to Credit Suisse First Boston (USA), Inc. All of our outstanding shares of voting common stock are held by CSFBI, an indirect

wholly-owned subsidiary of Credit Suisse Group. We are part of the CSFB business unit of Credit Suisse Group, but our results do not reflect the overall performance of CSFB or Credit Suisse Group.

The consolidated statement of operations data, statement of financial condition data and other consolidated financial data as of or for the years ended December 31, 1999, 1998 and 1997 represent the data of DLJ. The consolidated statement of operations data for the year ended December 31, 2000 represent the results of operations of only DLJ for the period from January 1, 2000 to November 2, 2000 and the results of operations of both DLJ and CSFB Corp. for the period from November 3, 2000 to December 31, 2000 and for the year ended December 31, 2001. The consolidated statement of financial condition data and other consolidated financial data as of December 31, 2001 and 2000, represent the data of both DLJ and CSFB Corp. Due to the inclusion of CSFB Corp. data from November 3, 2000 through December 31, 2001, our financial statements may not be fully comparable between periods. We refer you to Note 2 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Prior year numbers have been changed to conform to current year presentation.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (2) Interest is net of interest expense of $10.3 billion, $8.2 billion, $4.8 billion, $4.5 billion and $4.0 billion for 2001, 2000, 1999, 1998 and 1997, respectively.

(3) Net assets are total assets excluding securities purchased under agreements to resell and securities borrowed.

(4) Long-term borrowings and total capitalization (the sum of long-term borrowings, redeemable trust securities and stockholders' equity) exclude current maturities (one year or less) of long-term borrowings.

(5) For the purpose of calculating the ratio of earnings to combined fixed charges, (a) earnings consist of income before the provision (benefit) for income taxes, extraordinary items and cumulative effect of a change in accounting principle and fixed charges and (b) fixed charges consist of interest expense and one-third of rental expense which is deemed representative of an interest factor.

(6) For the years ended December 31, 2001 and 2000, the dollar deficiency of the ratio of earnings to combined fixed charges was $0.2 million and $1.5 million, respectively.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are a leading integrated investment bank serving institutional, corporate, government and individual clients. We are part of the Credit Suisse First Boston business unit, which we call CSFB, of Credit Suisse Group, and our results do not reflect the overall performance of CSFB or Credit Suisse Group. We were acquired on November 3, 2000 by CSFBI, a subsidiary of Credit Suisse Group. No adjustments of the historical carrying values of our assets and liabilities to reflect the Acquisition by CSFBI were recorded in our historical financial statements. Similarly, although the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to us, and thus goodwill associated with the Acquisition will not affect our results of operations.

When we use the terms "we" and "our" and the "Company", we mean, after the Acquisition, Credit Suisse First Boston (USA), Inc., a Delaware corporation, and its consolidated subsidiaries and, prior to the Acquisition, DLJ, a Delaware corporation, and its consolidated subsidiaries.

BUSINESS ENVIRONMENT

Our principal business activities, investment banking and private equity, securities underwriting, sales and trading, and correspondent brokerage services, are, by their nature, highly competitive and subject to general market conditions which include volatile trading markets and fluctuations in the volume of market activity. Consequently, our results have been, and are likely to continue to be, subject to wide fluctuations reflecting the impact of many factors beyond our control, including securities market conditions, the level and volatility of interest rates, competitive conditions and the size and timing of transactions.

In 2001, the adverse operating environment in the financial markets, particularly in mergers and acquisitions and equity capital markets, has continued. The year was characterized by volatile U.S. stock markets and a global economic slowdown. Terrorism, military action and the onset of recessionary conditions caused stock markets around the world to plunge to their lowest levels in three years. Economic weakness was prevalent, with the economies of Europe, the United States and Japan slowing at the same time. The terrorist attacks of September 11, 2001 in New York and Washington D.C. led to the closing of the U.S. financial markets for almost a week. These poor market conditions have also been exacerbated by investor concerns about perceived accounting irregularities and a deteriorating credit environment.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Federal Reserve Bank cut interest rates eleven times during 2001, resulting in the lowest interest rates in decades. These low interest rates, along with economic volatility, caused a dramatic increase in the issuance of fixed income securities and convertible and exchangeable bonds, with dollar amount of issuances nearly twice that of 2000. Volume of global securities underwriting set a record last year, increasing 25% to $4.08 trillion. The record was primarily due to record fixed income securities issued by U.S. companies in 2001 as a result of interest rate cuts and increased investor demand. This was offset to a very significant degree by a decline in new stock issues, especially in IPOs. The dollar volume of IPOs was down 57% globally, primarily as a result of unfavorable market conditions. In addition, investors showed a preference for the securities of larger, more established companies. As a result, the IPO market in technology was effectively dormant all year as investors avoided the sector. The dollar volume of global merger and acquisition activity, negatively impacted by recession and volatile markets, decreased 50% compared with 2000.

These poor market conditions have persisted in the first quarter of 2002 notwithstanding some indications that the economy may be recovering.

CRITICAL ACCOUNTING POLICIES

In order to prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("US GAAP"), we must estimate certain amounts that affect the reported amounts of assets and liabilities and revenues and expenses.

We have determined the critical accounting policies used to record our financial condition and results that require our subjective or complex judgments and assessments. These policies require us to make estimates and assumptions regarding the fair value of inventory, derivatives, certain long-term investments and other matters that affect our consolidated financial statements and related disclosures. We believe that the estimates and assumptions used in the preparation of the consolidated financial statements are prudent and reasonable.

Fair Value

Financial Instruments Owned

As is the normal practice in our industry, substantially all of our financial instruments owned, including derivatives, are carried at fair value and, therefore, their value and our net revenues are subject to fluctuations based on market movements. "Financial instruments owned" and "Financial instruments sold, not yet purchased" on the consolidated statements of financial condition are carried at fair value, with related unrealized gains or losses included in the consolidated statement of operations. The majority of our derivative positions are trading-related. Trading derivative instruments are carried at fair value as positive and negative replacement values with realized and unrealized gains and losses included in income. We use derivatives to hedge certain interest rate, foreign currency, equity market, and credit risks and to meet our customers' objectives. Mortgage whole loans are carried at the lower of cost or market.

The determination of fair value is fundamental to our financial condition and results of operations and, in certain circumstances, requires management to make complex judgments. Fair value is based generally on listed market prices or broker or dealer price quotations. If prices are not readily determinable or if liquidating our positions is reasonably expected to affect market prices, fair value is based on either internal valuation models or management's estimate of amounts that could be realized under current market conditions, assuming an orderly liquidation over a reasonable period of time. Certain financial instruments, including over-the-counter derivative instruments, are valued using pricing models and other valuation methods that consider, among other factors, contractual and market prices, correlations, time value, credit, yield curve, volatility and/or prepayment rates of the underlying positions. The use of different pricing models and other valuation methods and different assumptions could produce materially different estimates of fair value.

Private Equity Investments

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Private equity investments are carried at estimated fair value with unrealized gains and losses included in the consolidated statement of operations. These principal investments generally are held for appreciation and are not readily marketable, as they are primarily in unlisted or illiquid equity or equity-related securities. These investments are generally disposed of in IPOs or mergers and acquisitions. Most of these investments require a high degree of judgment in determining fair value due to the lack of listed market prices, liquidity and market information, among other factors. Net revenues derived from these investments may fluctuate significantly depending on the revaluation of these investments in any given period.

See Note 1 to the consolidated financial statements included in Part II, Item 8 of this Annual Report for a summary of our significant accounting policies.

RECENT DEVELOPMENTS

As part of CSFB's strategy to focus on core businesses while reducing costs, in the first quarter of 2002 we completed the sale of CSFBdirect, our online trading operations, and Autranet, Inc., a broker-dealer subsidiary active in the distribution to institutional investors of investment research products purchased from independent research specialists. On February 1, 2002, we completed the sale of the U.S.-based CSFBdirect business to Bank of Montreal for $520 million. On January 25, 2002, we completed the sale of the U.K.-based CSFBdirect business to TD Waterhouse. On February 1, 2002, we completed the sale of Autranet to The Bank of New York. As a result of the sales, we expect to record a total pre-tax gain of approximately $525 million in the first quarter of 2002. The following analysis of our results of operations and financial condition for the years ended, and as of, December 31, 2001, include the results of the CSFBdirect and Autranet businesses.

On January 31, 2002, we acquired the assets of Holt Value Associates, L.P., a leading provider of independent research and valuation services to asset managers, which will be integrated with CSFBEdge, CSFB's online research and valuation database service.

RESULTS OF OPERATIONS

The transfer of CSFB Corp. in November 2000 to us had a significant effect on our results of operations. Our results of operations for the year ended December 31, 2000 included the results of CSFB Corp. for only the months of November and December. The results of CSFB Corp. are included for the full year ended December 31, 2001 and this had a significant effect on our financial statements, increasing almost every revenue, expense and statement of financial condition line item when compared to prior years. The asset management business of DLJ was transferred to CSFBI in connection with the Acquisition.

We recorded a net loss of $144 million for the year ended December 31, 2001. This result reflects the challenging market conditions throughout the industry in 2001, with weaknesses in the global economy and other factors leading to dramatically lower levels of equity issuance and merger and acquisition activity. In the fourth quarter of 2001, CSFB implemented a $1 billion cost cutting initiative in an effort to align more closely the size of its businesses with changing market conditions and to begin to bring its cost structure in line with its major competitors. CSFB also began to implement a strategy to exit non-core businesses to concentrate on increasing its market share and improving its results in those areas where it already has a significant leadership position. As part of this strategic realignment, we recorded one-time charges in 2001, primarily relating to personnel costs in connection with staff reductions. Excluding these one-time charges and the settlement of the regulatory investigations regarding the allocation of shares in IPOs discussed below, we would have a pro forma net profit of $256 million in 2001.

Our businesses are materially affected by conditions in the financial markets and economic conditions generally. Unpredictable or adverse market and economic conditions may adversely affect our results of operations. See "BusinessCertain Factors That May Affect Our Business".

The following table sets forth the net revenues, operating expenses, and income (loss) before provision (benefit) for income taxes, extraordinary items and the cumulative effect of a change in accounting principle of our divisions:

Years Ended December 31,

2001(1) 2000(1) 1999

(in millions)

Securities Division

Equity Net Revenues $ 1,973 $ 1,382 $ 995 Total Expenses 1,513 1,398 914

Income (loss)(2) 460 (16) 81

Fixed Income Net Revenues 2,028 415 887 Total Expenses 1,809 741 612

Income (loss)(2) 219 (326) 275

Investment Banking Division Net Revenues 1,815 1,918 1,901 Total Expenses 1,944 1,902 1,433

Income (loss)(2) (129) 16 468

Financial Services Division Net Revenues 1,652 2,214 1,783 Total Expenses 1,605 1,824 1,481

Income (loss)(2) 47 390 302

Total Net Revenues(3) 7,548 6,038 5,531 Total Expenses(4) 7,763 7,560 4,577

Income (loss)(2) $ (215) $ (1,522) $ 954

(1) Our results of operations for 2001 include the results of operations of CSFB Corp. for the full year ended December 31, 2001. The results of operations for 2000 include the results of operations of CSFB Corp. from November 3, 2000 through December 31, 2000. Therefore, our financial statements may not be fully comparable between periods.

(2) Before provision (benefit) for income taxes, extraordinary items and cumulative effect of change in accounting principle.

(4) Includes approximately $900 million and $1,700 million in 2001 and 2000, respectively, relating to certain merger-related and other charges that are not allocated to the divisions.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

As noted above, our results of operations for 2001 include the results of operations of CSFB Corp. for the full year ended December 31, 2001. The results of operations for 2000 include the results of operations of CSFB Corp. from November 3, 2000 through December 31, 2000. Therefore, our financial statements may not be fully comparable between periods.

For 2001, net revenues increased $1.5 billion, or 25.0% to $7.5 billion. During 2001, net revenues increased primarily as a result of increases in all areas as a result of the inclusion of revenues from CSFB Corp. for the full year 2001. The results for 2001 also include a one- time gain in other income of approximately $159.4 million on the assignment of the lease and related sale of leasehold improvements on our former headquarters. Equity net revenues increased $591 million or 42.8% to $2.0 billion primarily as a result of increased commissions, investment banking and advisory fees, and trading revenues from the inclusion CSFB Corp. for all of 2001. Fixed Income net revenues increased $1.6 billion to $2.0 billion, principally as a result of increases in trading volume and securitization of mortgages and asset-backed products and new issuances of investment grade debt. Even though CSFB Corp. was included for all of 2001, Investment Banking Division net revenues decreased $103 million or 5.4% to $1.8 billion primarily due to decreased merger and acquisition advisory revenues and losses on our private equity investments. Financial Services net revenues decreased $562 million or 25.4% to $1.7 billion primarily as a result of decreases in brokerage and correspondent clearance commission revenues, fee income in our correspondent and online brokerage businesses, and interest income. For more information on segment data, we refer you to Note 18 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Principal transactions-net increased $551 million or 78.3% to $1.3 billion primarily as a result of gains in proprietary trading from Fixed Income, particularly in mortgages and other real estate products, and, to a lesser extent, from Equity. These increases were offset by losses on our private equity investments as a result of unfavorable market conditions.

Investment banking and advisory revenues increased $335 million or 11.0% to $3.4 billion primarily as a result of the inclusion of CSFB Corp. revenues for full year 2001. The relatively small increase primarily reflects a decline in equity underwriting and merger and acquisitions activity notwithstanding the inclusion of CSFB Corp. results for the full year.

Commission revenues remained nearly flat at $1.5 billion, even with the inclusion of CSFB Corp. for all of 2001. Commissions declined in our brokerage businesses, including online and correspondent brokerage businesses, as a result of a significant decline in equity trading volumes. In February 2002, we completed the sales of our online brokerage business CSFBdirect and Autranet, a provider of independent research.

Interest and dividend income, net of interest expense increased $490 million or 66.8% to $1.2 billion. The increase was a result of falling global interest rates, which have reduced funding costs.

Total costs and expenses for 2001 increased approximately $203 million or 2.7% to $7.8 billion primarily due to the inclusion of CSFB Corp. for the full year and one-time charges of $492 million recorded in the fourth quarter of 2001. Of the one-time charges, $405 million relates to bonus and severance payments, guaranteed compensation and retention awards in connection with staff reductions. Of this $405 million, approximately $52 million relates to guarantees and retention awards for fiscal years 2002 and 2003. A significant portion of these one-time charges would have been recorded as compensation expense in 2001 if such staff reductions had not occurred. The other one- time charges relate primarily to exiting certain facilities and non-core businesses.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Employee compensation and benefits increased $353 million or 8.0% to $4.7 billion, primarily due to the inclusion of CSFB Corp. for all of 2001. As is normal in our industry, a significant portion of compensation expense is a bonus amount awarded at or shortly after year end. Bonuses are based upon a number of factors including the profitability of each business segment and market conditions. From time to time we guarantee certain minimum compensation levels to attract new employees or to retain existing employees in a competitive environment. Consistent with industry practice, certain of these guarantees are multi-year and extend into fiscal years beyond 2001. As a result of the change in senior management, the poor market conditions that currently exist, and efforts to promote greater teamwork across divisions and product areas, certain of these guarantees were renegotiated in 2001. A portion of

our non-cash incentive compensation consists of awards of Credit Suisse Group shares under a Credit Suisse Group stock plan, options to acquire shares, and units, the value of which is tied to the return on equity of CSFB over a three year period.

Occupancy and equipment rental increased $256 million to $700 million; brokerage, clearing, exchange fees and other expenses increased $118 million to $325 million; communications expense increased by $93 million to $315 million; and professional fees increased $93 million to $410 million. This was in each case primarily due to the inclusion of the full year results for CSFB Corp. Merger-related and restructuring costs of $476 million reflect the accrual in 2001 of retention awards related to the Acquisition. Other operating expenses decreased $82 million to $791 million, despite a $100 million settlement with the SEC and NASDR of their investigations into IPO allocation practices.

Equity pre-tax income improved from a loss of $16 million in 2000 to income of $460 million due to trading profits, investment banking and advisory fees and commission income from the inclusion of CSFB Corp. for all of 2001. Fixed Income pre-tax income improved from a loss of $326 million in 2000 to income of $219 million as a result of increased trading volumes, securitization and underwriting of investment grade and high-yield debt. Investment Banking Division pre-tax income decreased $145 million to a pre-tax loss of $129 million principally as a result of decreased underwriting and placement fees and losses on our private equity investments. Financial Services Division pre-tax income decreased $343 million to $47 million as a result of decreased commissions and fees related to its correspondent and online brokerage businesses.

Our income tax provision (benefit) for 2001 and 2000 was $(70) million and $(458) million, a (32.6)% and (30.1)% effective tax rate, respectively.

Net loss for 2001 was $144 million compared with a net loss of $1.1 billion in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Restructuring and merger-related costs of $842 million and $262 million, respectively, incurred in 2000 in connection with the Acquisition, significantly impacted our results of operations for the year ended December 31, 2000. Due to the uncertainties caused by the announcement of the Acquisition in August 2000, we experienced a significant negative impact on our business in 2000. Following the Acquisition, we incurred certain duplicative administrative costs and expenses in connection with our integration efforts.

For 2000, net revenues increased $507 million, or 9.2% to $6.0 billion. During 2000, net revenues increased primarily as a result of increases in fees, commissions and interest, and the inclusion of revenues from CSFB Corp. from November 3, 2000 through December 31, 2000. These increases were offset in part by decreases in underwriting, trading and investment gains, particularly during the fourth quarter. Equity net revenues increased $387 million or 38.9% to $1.4 billion primarily as a result of increased commissions and trading revenues, both domestically and internationally. Fixed Income net revenues decreased $472 million or 53.2% to $415 million, principally as a result of slowdowns in the high-yield and mortgage-backed securities areas. Investment Banking Division net revenues increased $17 million or 0.9% to $1.9 billion primarily due to the inclusion of CSFB Corp. revenues from November 3, 2000 through December 31, 2000. Financial Services Division net revenues increased $431 million or 24.2% to $2.2 billion primarily as a result of increased brokerage and correspondent clearance commission revenues and fee income in our correspondent and online brokerage businesses. For more information on segment data, we refer you to Note 18 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Principal transactions-net, decreased $102 million or 12.7% to $704 million primarily as a result of the difficult fixed income markets, particularly for high-yield securities, and declining equity markets

during the second half of the year. In addition, we experienced decreased gains on our private equity investments.

Investment banking and advisory revenues increased $173 million or 6.1% to $3.0 billion, primarily in our correspondent and online brokerage businesses, due to customer demand for a variety of portfolio advisory and technology services. These revenues were offset in part by the decline in mergers and acquisitions fees prior to the Acquisition. Mergers and acquisitions fees increased in November and December 2000 as a result of increased activity in the combined entity. In addition, underwriting revenues decreased as a result of the slowdown in underwriting activity in the two months prior to the Acquisition, as well as a decline in market activity in the fourth quarter, particularly in IPOs.

Commission revenues increased $273 million or 22.7% to $1.5 billion. The expansion of international equities trading prior to the Acquisition and increases in our correspondent and online brokerage businesses accounted for more than half the increase. The remainder of the increase was due to the inclusion of commission revenues from CSFB Corp. from November 3, 2000 through December 31, 2000.

Interest, net of interest expense, increased $185 million or 33.7% to $734 million. The increase was primarily due to higher rates on increased fixed income positions as a result of the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000.

Total expenses for 2000 increased approximately $3.0 billion or 65.2% to $7.6 billion primarily due to the merger-related and restructuring costs of $1.1 billion recorded in the fourth quarter of 2000, expenses related to growth in the correspondent and online brokerage businesses and the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000.

Employee compensation and benefits increased $1.2 billion or 39.6% to $4.4 billion. Base compensation, including benefits and payroll taxes, increased by 56.5%. Incentive and production-related compensation increased by 29.6% in 2000. The increases were primarily due to the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000.

Communications expenses increased by $60 million to $222 million due to expansion of our international operations, implementation and development of new systems and overhaul of the online customer trading and information systems for our correspondent brokerage network. Brokerage, clearing, exchange fees and other expenses increased $64 million to $207 million due to increased trading volume and transaction fee payments. Occupancy and equipment rental increased $123 million to $444 million primarily as a result of new office space leased in expectation of growth. Despite our integration efforts following the Acquisition, we incurred duplicate costs for technology, communications and occupancy in November and December 2000. Professional fees not related to the Acquisition increased $31 million primarily as a result of the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000. All other operating expenses increased $354 million to $873 million, which resulted principally from increases in litigation accruals in the fourth quarter of 2000. Also included in other operating expenses are travel and entertainment and printing and stationery expenses which increased due to an overall increase in the level of business activity and increases in advertising and rebranding expense of approximately $4 million incurred by CSFBdirect.

Equity pre-tax income decreased $97.0 million to a pre-tax loss of $16 million due to decreases in underwritings and fees. Fixed Income pre-tax income decreased $601 million to a pre-tax loss of $326 million as a result of decreased trading gains and decreased underwriting revenues in all areas. Investment Banking Division pre-tax income decreased $452 million or 96.6% to $16 million as a result of decreased underwritings and fees related to mergers and acquisitions activity. Financial Services Division pre-tax income increased $88 million or 29.1% to $390 million as a result of increased commissions and fees related to its correspondent and online brokerage businesses, offset by increased technology costs.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our income tax provision (benefit) for 2000 and 1999 was $(458) million and $353 million, a (30.1)% and 37.0% effective tax rate, respectively.

Net loss for 2000 was $1.1 billion compared with net income of $601 million in 1999.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Management Oversight

We believe that maintaining access to liquidity is fundamental for firms operating in the financial services industry. We have therefore established a comprehensive process for the management and oversight of our liquidity, funding and capital strategies. The Capital Allocation and Risk Management Committee ("CARMC") has primary oversight responsibility for these functional disciplines. CARMC periodically reviews and approves our liquidity management policies and targets, in addition to reviewing our liquidity position and other key risk indicators. The Corporate Treasury department is responsible for the management of liquidity, long-term funding, and capital as well as relationships with creditor banks. It also maintains regular contact with both rating agencies and regulators on liquidity and capital issues.

See "Liquidity" in "BusinessCertain Factors That May Affect Our Business" in Part I, Item I of this Annual Report.

Balance Sheet

Our assets are highly liquid with the majority consisting of securities inventories and collateralized receivables, which fluctuate depending on the levels of proprietary trading and customer business. Collateralized receivables consist primarily of resale agreements and securities borrowed, both of which are primarily secured by U.S. government and agency securities, and marketable corporate debt and equity securities. In addition, we have significant receivables from customers and broker/dealers that turn over frequently. To meet client needs as a securities dealer, we may carry significant levels of trading inventories.

In addition to these liquid assets, as part of our investment banking and fixed income markets activities we also maintain positions in less liquid assets, including mortgage whole loans, leveraged funds, high yield debt securities and private equity investments. These assets may be relatively illiquid at times, including periods of market stress. We typically fund a significant portion of less liquid assets with long-term borrowings and stockholders' equity.

Because of changes relating to customer needs, economic and market conditions and proprietary trading and other strategies, our total assets or the individual components of total assets may vary significantly from period to period. At December 31, 2001 and 2000, our total assets were $218.3 billion and $212.2 billion, respectively.

Funding Sources and Strategy

The majority of our assets is funded by collateralized short-term borrowings, which include repurchase agreements and securities loaned. Other significant funding sources include commercial paper, short-term borrowings from affiliates, payables to customers and broker/dealers, long-term borrowings and stockholders' equity. Short-term funding is generally obtained at rates related to the Federal Funds rate, LIBOR or other money market indices, while long-term funding is generally obtained at fixed and floating rates related to U.S. Treasury securities or LIBOR. Depending upon prevailing market conditions, other borrowing costs are negotiated. We continually aim to broaden our funding base by geography, investor and funding instrument. In 2001, we extended our debt maturity profile by issuing longer dated fixed income securities.

The majority of our unsecured funding originates largely from two sources: we borrow from affiliates and we issue liabilities directly to the market. We lend funds as needed to our operating subsidiaries and affiliates on both a senior and subordinated basis, the latter typically to meet capital requirements in regulated subsidiaries. We generally try to ensure that loans to our operating subsidiaries and affiliates have

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document maturities equal to or shorter in tenor than the maturities of our market borrowings. Additionally, we generally fund investments in subsidiaries with capital contributions.

Liquidity Planning and Measurement

We maintain a large secondary source of liquidity, principally through our broker/dealers and various other operating subsidiaries. We have historically been able to access significant liquidity through the secured funding markets (repurchase agreements, securities loaned and other collateralized financing arrangements), even in periods of market stress. We continually monitor overall liquidity by tracking the extent to which unencumbered marketable assets and other alternative unsecured funding sources exceed both contractual obligations and anticipated contingent commitments.

The principal measure we use to monitor our liquidity position is the "liquidity barometer", which estimates the time horizon over which the adjusted market value of unencumbered assets plus committed revolving credit facilities exceeds the aggregate value of our maturing unsecured liabilities plus anticipated contingent commitments. The adjusted market value of unencumbered assets includes a reduction from market value, or "haircut", reflecting the amount that could be realized by pledging an asset as collateral to a third party lender in a secured funding transaction. Contingent commitments include such things as letters of credit, guarantees and credit rating-related collateralization requirements. Our objective, as mandated by CARMC, is to ensure that the liquidity barometer equals or exceeds 365 days. We believe this will enable us to carry out our business plans during extended periods of market stress, while minimizing, to the extent possible, disruptions to our business.

Contractual Obligations and Contingent Commitments

We have contractual obligations to make future payments under long-term debt and long-term non-cancelable lease and other agreements and have contingent commitments under a variety of commercial arrangements as described in the notes to our consolidated financial statements.

The following table sets forth our long-term contractual obligations as of December 31, 2001.

Contractual Obligations

Less than 1 12 After 4 34 years Total year years years

(in millions)

Long term debt $ 4,028 $ 3,675 $ 3,912 $ 4,048 $ 15,663 Operating leases 179 358 344 1,776 2,657

Total contractual obligations $ 4,207 $ 4,033 $ 4,256 $ 5,824 $ 18,320

Our long-term borrowings are on an unsecured basis. As of December 31, 2001 and 2000, the weighted average maturity of our long- term borrowings was approximately 4.7 years and 3.4 years, respectively. Our lease obligations are primarily for our principal offices in New York City and our other office locations.

The following table sets forth our short-term unsecured borrowings at December 31, 2001 and 2000.

2001 2000

Bank Loans $ 911 $ 19,621 Commercial paper(1) 1,200 1,197 Loans from affiliates(2) 7,059

Total $ 9,170 $ 20,818

(1) Reflects amounts outstanding at year end under our $7 billion commercial paper programs.

(2) We have significant financing transactions with Credit Suisse Group and certain of its subsidiaries. See "Related Party Transactions".

The following table sets forth our contingent commitments at December 31, 2001.

Contingent Commitments

Amount of Commitment Expiration Per Period

Less than Total Amounts 12 years 34 years Over 4 years 1 year Committed

(in millions)

Standby letters of credit(1) $ 632 $ $ $ $ 632 Private equity(2) 56 11 1,589 1,656

Total contingent commitments $ 688 $ 11 $ $ 1,589 $ 2,288

(1) Since commitments associated with letters of credit may expire unused, the amounts shown do not necessarily reflect actual future cash funding requirements.

(2) We have commitments to invest in various partnerships that make private equity and related investments in various portfolio companies or other private equity funds.

We issue guarantees to customers of certain of our consolidated subsidiaries with respect to obligations of such subsidiaries incurred in the ordinary course of their business. These guarantees are reflected in our financial statements and do not create incremental obligations for us. We also issue from time to time a limited number of guarantees in respect of affiliated sister company obligations incurred in the ordinary course of business. These sister company obligations are not reflected in our financial statements but are reflected in the financial statements of our ultimate parent companies, Credit Suisse First Boston and Credit Suisse Group. These guarantees are not included in the table above and are not a material contingent commitment.

As of December 31, 2001, we had commitments to enter into resale agreements of $3.0 billion. See Note 17 of the consolidated financial statements included in Part II, Item 8 of this Annual Report for more information on our commitments and contingent liabilities.

Revolving Credit Facility

We maintain a committed revolving credit facility with various banks that, if drawn upon, would bear interest at short-term rates, such as Federal Funds or LIBOR. In May 2001, we replaced our $2.8 billion revolving credit facility with a 364 day $3.5 billion facility available to us and CSFBI as borrowers. Proceeds from borrowings under this facility can be used for general corporate purposes and the facility is guaranteed by Credit Suisse Group. The facility contains customary covenants that we

believe will not impair our ability to obtain funding. At December 31, 2001, no borrowings were outstanding under this facility.

Long-term Funding

We issue long-term debt through U.S. and Euro medium-term note programs, as well as syndicated and privately placed offerings around the world.

Under our currently effective $10.5 billion shelf registration statement on file with the SEC, which allows us to issue from time to time senior and subordinated debt securities and warrants to purchase such securities, we had at March 15, 2002, approximately $4 billion available for issuance. During 2001, under this and predecessor shelf registration statements, we issued both medium-term notes and longer-dated fixed 7 income securities as part of our program to extend the maturity profile of our debt. These issuances in 2001 included $2.25 billion of 5 /8% 1 senior notes due 2006, $3.0 billion 6 /8% senior notes due 2011, and $4.8 billion of medium-term notes. In January 2002, we issued 1 $2.0 billion 6 /2% notes due 2012 under our shelf registration statement.

In July 2001, we established a Euro medium-term note program to issue up to $5 billion of notes. This program replaces the $1.0 billion Euro medium-term note program established in April 2000. During 2001, we issued $613 million of Euro medium-term notes.

We issued approximately $1.6 billion of medium-term notes under our shelf registration statement and $217 million of Euro medium- term notes in the first quarter of 2002 through March 15.

In August 2001, we redeemed all of the outstanding shares of the Trust Securities of DLJ Capital Trust I. In November 2001, we completed our cash tender offer for our Fixed/Adjustable Rate Cumulative Preferred Stock, Series B, resulting in our acquisition of all but approximately 90,000 of the outstanding shares of such preferred stock. The Series B preferred stock has been deregistered and delisted and is subject to redemption in January 2003. In December 2001, we redeemed all of the outstanding shares of our Fixed/Adjustable Rate Cumulative Preferred Stock, Series A.

Credit Ratings

Our access to the debt capital markets and our borrowing costs depend significantly on our credit ratings. These ratings are assigned by agencies, which may raise, lower or withdraw their ratings or place us on "credit watch" with positive or negative implications at any time. Credit ratings are important to us when competing in certain markets and when seeking to engage in longer-term transactions, including over- the-counter derivatives. We believe agencies consider several factors in determining our credit ratings, including such things as earnings performance, business mix, market position, financial strategy, level of capital, risk management policies and practices and management team, in addition to the broader outlook for the financial services industry.

A reduction in our credit ratings could limit our access to capital markets, increase our borrowing costs, require us to post additional collateral and allow counterparties to terminate transactions under certain of our trading and collateralized financing contracts. This, in turn, could reduce our liquidity and negatively impact our operating results and financial position. Our liquidity planning takes into consideration those contingent events associated with a reduction in our credit ratings.

At December 31, 2001, our ratings and ratings outlooks were as follows:

Long-Term Commercial Outlook Debt Paper Fitch IBCA Ltd A+ F-1+ ratings watch positive Moody's Aa3 P-1 stable Standard & Poor's AA- A-1+ negative

On October 3, 2001, Standard & Poor's affirmed our credit ratings but revised our outlookan indication of longer term trendsfrom "stable" to "negative", reflecting the impact of the continued weak financial environment on our operating performance. On October 5, 2001, Fitch affirmed our credit ratings and noted that we remain on "ratings watch positive". On October 31, 2001, Moody's upgraded our long-term debt rating from A1 to Aa3. Subsequently, on February 20, 2002, Moody's affirmed our credit ratings but revised our outlook from "positive" to "stable", also reflecting the impact of the weak economic environment on our operating performance.

Capital Resources

Certain of our businesses are capital intensive. In addition to normal operating requirements, capital is required to cover financing and regulatory charges on securities inventories, private equity investments and investments in fixed assets. Our overall capital needs are regularly reviewed to ensure that our capital base can appropriately support the anticipated needs of our business divisions as well as the regulatory capital requirements of our subsidiaries. Based upon these analyses, we believe that our capitalization is adequate for current operating levels.

Regulated Subsidiaries

As registered broker-dealers and member firms of various self-regulatory organizations, each of our U.S. broker-dealer subsidiaries, which include DLJSC and CSFB Corp., is subject to the uniform net capital rule, Rule 15c3-1 of the Exchange Act. This rule specifies the minimum level of net capital a broker-dealer must maintain and also requires that part of its assets be kept in relatively liquid form. DLJSC and CSFB Corp. are also subject to the net capital requirements of the Commodity Futures Trading commission and various commodity exchanges. At December 31, 2001, DLJSC and CSFB Corp. had aggregate regulatory net capital, after adjustments required by Rule 15c3-1, of approximately $2.4 billion and $1.2 billion, respectively, which exceeded minimum net capital requirements by $2.3 billion and $1.1 billion, respectively. See Note 9 of the consolidated financial statements included in Part II, Item 8 of this Annual Report. Credit Suisse First Boston Capital LLC is registered with the SEC as an over-the-counter derivatives dealer (also known as a "broker-dealer lite") and is also subject to the uniform net capital rule, but calculates its requirements under Appendix F to Rule 15c3-1.

The SEC and various self-regulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, dictate the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC's uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital.

At December 31, 2001, our broker-dealer subsidiaries were in compliance with all applicable regulatory capital adequacy requirements.

Cash Flows

Our consolidated statements of cash flows classify cash flow into three broad categories: cash flows from operating activities, investing activities and financing activities. Our net cash flows are principally associated with operating and financing activities, which support our trading, customer and banking activities.

The transfer of CSFB Corp. to us had a significant effect on our statement of financial condition. Although the net assets transferred were approximately $2.5 billion, incremental assets transferred to us amounted to approximately $143.4 billion. As a result, inclusion of results of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CSFB Corp. from November 3, 2000 through December 31, 2000 had a significant effect on our financial statements, increasing almost every statement of financial condition line item.

Years Ended December 31, 2001, 2000 and 1999

At December 31, 2001, 2000 and 1999, cash and cash equivalents totaled $1.7 billion, $2.8 billion and $2.0 billion, respectively, a (decrease) increase of $(1.1) billion, $0.8 billion and $1.0 billion, respectively.

Net cash used in operating activities totaled $5.4 billion, $32.4 billion and $11.9 billion in 2001, 2000 and 1999, respectively. In 2001, there were increases in assets including financial instruments owned of $4.1 billion and receivables from brokers, dealers and others of $2.5 billion and a decrease in securities loaned of $8.5 billion, financial instruments sold not yet purchased of $1.5 billion and accounts payable and accrued expenses of $3.2 billion. These were partially offset by decreases in securities borrowed of $9.1 billion and receivables from customers of $4.3 billion and increases in other liabilities of $1.6 billion and obligation to return securities received as collateral of $1.0 billion. In 2000, there were increases in assets, including securities borrowed of $47.0 million and financial instruments owned of $35.8 million, partially offset by increases in liabilities, including securities loaned of $24.1 million, financial instruments sold not yet purchased of $19 billion and payables to brokers, dealers and other of $8.8 billion. In 1999, there were increases in assets including financial instruments owned of $14.8 billion, securities borrowed of $6 billion and receivables from customers of $2.9 billion. These increases were partially offset by increases in liabilities including payables to customers of $1.6 billion, securities loaned of $4.2 billion and financial instruments sold not yet purchased of $4.0 billion.

In 2001, 2000 and 1999, net cash used in investing activities was $4.5 billion, $1.0 billion and $1.4 billion, respectively. In November 2000, in connection with the Acquisition, we loaned $3.1 billion, to our parent, CSFBI, which loan was subsequently repaid in 2001. In addition, the transfer of CSFB Corp. to us increased our equity by $2.5 billion. In 1999 cash used in investing activities consisted primarily of purchases to expand our operations and purchases of private equity investments.

In 2001, 2000 and 1999, net cash provided by financing activities totaled $8.8 billion, $34.2 billion and $14.2 billion, respectively, of which $5.0 billion, $28.0 billion and $12.1 billion was provided by short-term financings (principally repurchase agreements), respectively. In 2001, we issued $8.8 billion of fixed and floating rate medium- and long-term debt securities. In 2000, we issued $2.1 billion of fixed and floating rate medium- and long-term debt securities. In addition, $4.2 billion of subordinated loan agreements were added with the transfer of CSFB Corp. to us. These loans were repaid in 2001. During 1999, we received net proceeds from the issuance of CSFBdirect common stock of $346.6 million. We also issued $1.8 billion of fixed and floating rate medium- and long-term debt securities.

We believe our cash, cash equivalents and cash generated from operations and financing activities will be sufficient to meet our expected cash needs through at least the end of 2002.

RELATED PARTY TRANSACTIONS

Credit Suisse Group, through CSFBI, owns all of our outstanding voting common stock. We are involved in significant financing and other transactions, and have significant related party balances, with Credit Suisse Group and certain of its subsidiaries and affiliates. We enter into these transactions in the ordinary course of our business, and we believe that the terms of these transactions are on market terms that could be obtained from unaffiliated parties. At December 31, 2001, our assets related to these transactions totaled $11.2 billion, including securities purchased under agreements to resell of $2.7 billion, securities borrowed of $1.6 billion and loans receivable of $6.9 billion. Our liabilities

related to these transactions totaled $36.6 billion, including securities sold under agreements to repurchase of $14 billion, securities loaned of $12.6 billion, payables to brokers, dealers and others of $1.6 billion, loans payable of $7.1 billion, intercompany taxes payable of $730 million and intercompany payables of $598 million. As a consequence, at December 31, 2001, we had net liability exposure to such related parties of $25.4 billion.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document See "Derivatives" and "Off Balance Sheet Transactions" for a discussion of transactions with affiliated companies.

Certain of our directors, officers and employees and those of our affiliates and their subsidiaries maintained margin accounts with DLJSC, CSFB Corp. and other affiliated broker-dealers. Margin account transactions for such directors, officers and employees were conducted by such broker-dealers in the ordinary course of business and were substantially on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated persons and did not involve more than the normal risk of collectibility or present other unfavorable features. In addition, certain of such directors, officers and employees had investments or commitments to invest in various private funds sponsored by us, pursuant to which we made loans to such directors, officers and employees. DLJSC, CSFB Corp. and other affiliated broker-dealers, from time to time and in the ordinary course of business, entered into transactions involving the purchase or sale of securities from or to such directors, officers and employees and members of their immediate families, as principal. Such transactions on a principal basis were effected on substantially the same terms as similar transactions with unaffiliated parties except that in some instances directors, officers and employees were not charged placement fees. Such broker-dealers offered their directors, officers and employees reduced commission rates.

See Note 4 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

DERIVATIVES

We enter into various transactions involving derivatives. In general, derivatives are contractual agreements that derive their values from the performance of underlying assets, interest or currency exchange rates, or a variety of indices. We enter into derivatives transactions primarily for trading purposes, hedges or to provide products for our clients. These transactions involve options, forwards, futures and swaps. We also enter into interest rate swaps to modify the characteristics of periodic interest payments associated with some of our long-term debt obligations.

Options

We write option contracts specifically designed to meet customers' needs or hedge our exposures. Most of the options do not expose us to credit risk, except for options entered into on a proprietary basis for hedging purposes, since we, not our counterparty, are obligated to perform. At the beginning of the contract period, we receive a cash premium for written options. During the contract period, we bear the risk of unfavorable changes in the value of the financial instruments underlying the options ("market risk"). To cover this market risk, we purchase or sell cash or derivative financial instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts and options.

We also purchase options for trading purposes. With purchased options, we get the right, for a premium, to buy or sell the underlying instrument at a fixed price on or before a specified date. The underlying instruments for these options include mortgage-backed securities, equities, interest rate instruments and foreign currencies. The counterparties to these option contracts are reviewed to determine whether they are creditworthy. All options are reported at fair value.

Forwards and Futures

We enter into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, we enter into futures contracts on equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts.

For forward contracts, cash is generally not required at inception; cash equal to the contract value is required at settlement. For futures contracts, the original margin is required in cash at inception; cash equal to the change in market value is required daily.

Since forward contracts are subject to the financial reliability of the counterparty, we are exposed to credit risk. To monitor this credit risk, we limit transactions with specific counterparties, review credit limits and adhere to internally established credit extension policies. For

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document futures contracts and options on futures contracts, the change in the market value is settled with the exchanges in cash each day. As a result, the credit risk with the futures exchanges is limited to the net positive change in the market value for a single day.

Swaps

Our swap agreements consist primarily of equity and interest rate swaps. Equity swaps are contractual agreements to receive the appreciation or depreciation in value based on a specific strike price on an equity instrument, in exchange for paying another rate, which is usually based on index or interest rate movements. Interest rate swaps are contractual agreements to exchange interest rate payments based on agreed notional amounts and maturity. Swaps are reported at fair value.

Quantitative Disclosures for All Trading Derivatives

The fair values of trading derivatives outstanding at December 31, 2001 and 2000 are as follows:

December 31, 2001 December 31, 2000

Assets Liabilities Assets Liabilities

(in millions)

Options $ 968 $ 1,010 $ 1,190 $ 1,065

Forward contracts 1,652 1,647 727 719

Futures contracts 103 20 180 16

Swaps 354 280 944 868

Total $ 3,077 $ 2,957 $ 3,041 $ 2,668

These amounts are included as derivative contracts in financial instruments owned/sold not yet purchased in the consolidated statements of financial condition. The majority of our derivatives are short-term in duration.

Derivatives With Related Parties

Included below are derivative transactions with related parties consisting primarily of interest rate, foreign exchange and credit default swaps. The fair value of derivatives outstanding at December 31, 2001 with related parties is as follows:

December 31, 2001

Assets Liabilities

(in millions)

Options $ 157 $ 383 Forward contracts 212 117 Swaps 341 209

Sources and Maturities of OTC Derivatives

The following table sets forth the distributions, by maturity, of substantially all of our exposure with respect to over-the-counter derivatives as of December 31, 2001, after taking into account the effect of netting agreements. Fair values were determined on the basis of pricing models and other valuation methods.

Assets Fair Value at December 31, 2001

Maturity less Maturity Maturity Maturity in Total fair than 1 year 1-3 years 4-5 years excess of 5 years Value

(in millions)

Options $ 229 $ 124 $ 250 $ 51 $ 654 Forward contracts 1,605 44 3 1,652 Swaps 108 68 94 85 355

Total $ 1,942 $ 236 $ 347 $ 136 $ 2,661

Liabilities Fair Value at December 31, 2001

Maturity less Maturity Maturity Maturity in Total fair than 1 year 1-3 years 4-5 years excess of 5 years Value

(in millions)

Options $ 312 $ 319 $ 204 $ 45 $ 880 Forward contracts 1,371 10 6 1,387 Swaps 60 99 70 50 279

Total $ 1,743 $ 428 $ 280 $ 95 $ 2,546

The following table sets forth as of December 31, 2001 substantially all of our exposure with respect to over-the-counter derivatives, after taking into account the effect of netting agreements, by counterparty credit rating and with affiliates.

OTC Derivatives Exposure

Credit Rating Equivalent(1) Fair Value

(in millions)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document AAA $ 79 AA+/AA 507 AA- 425 A+/A/A- 366 BBB+/BBB/BBB- 77 BB+ or lower 293 Unrated 204 Derivatives with affiliates 710

Total $ 2,661

(1) Credit ratings are determined by external ratings agencies or by equivalent ratings used by our Credit Risk department.

PRIVATE EQUITY ACTIVITIES

Our private equity activities include direct investments and investments in partnerships that make private equity and related investments in various portfolio companies and funds. Our subsidiaries act as general partner of many of these private equity partnerships. These investments are carried at estimated fair value in our consolidated financial statements. These instruments are primarily in unlisted or illiquid equity or equity-related securities. At December 31, 2001, we had private equity and other long-term investments of $963 million and had commitments to invest up to an additional $1.7 billion. We managed or advised funds and proprietary equity portfolios with total committed capital of $20.7 billion at December 31, 2001 and total committed capital investments of approximately $16 billion at December 31, 2000.

HIGH-YIELD DEBT AND MORTGAGE WHOLE LOANS AND OTHER NON-INVESTMENT-GRADE DEBT

We underwrite, trade and hold high-yield debt, mortgage whole loans, loan participations and foreign sovereign debt and other non- investment-grade debt. Due to credit considerations, liquidity of secondary trading markets and vulnerability to general economic conditions, these securities generally involve greater risk than investment-grade securities.

We record high-yield debt at fair value, mortgage whole loans and loan participations at lower of cost or fair value and foreign sovereign and other non-investment-grade debt at fair value. At December 31, 2001, we had long positions of high-yield debt, mortgage whole loans, loan participations and foreign sovereign debt, and other non-investment-grade debt of approximately $895 million, $6.8 billion, $162 million and $187 million, respectively, and short positions of approximately $731 million, $856 million, $0 and $0 million, respectively. At December 31, 2000, we had long positions of high-yield debt, mortgage whole loans, loan participations and foreign sovereign debt, and other non-investment-grade debt of approximately $1.1 billion, $6.9 billion, $929 million and $991 million, respectively, and short positions of approximately $537 million, $1.0 million, $0.8 million

and $238 million, respectively. Timing of the securitization of our mortgage whole loan inventory will impact the size of our positions at any given time.

OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of business, we sell commercial and residential mortgage whole loans to special purpose vehicles ("SPVs"). These SPVs are set up by our subsidiaries to securitize mortgage whole loans. Our principal broker-dealer subsidiary, CSFB Corp., underwrites asset-backed securities for the SPVs. These SPVs are qualified special purpose vehicles ("QSPEs") under Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilitiesa replacement of FASB Statement No. 125" ("SFAS 140"). As more fully described below under "Accounting Developments", SFAS 140 sets forth specific guidelines to distinguish transfers of financial assets that are sales from transfers that are secured borrowings. An SPV that is a QSPE is not required to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be consolidated in the transferor's financial statements. For an SPV to qualify as a QSPE, certain conditions must be met such as being an entity demonstratively distinct from the transferor, with limits on permitted activities, assets it can hold and on permitted sales, exchanges, puts or distribution of its assets. Since our securitization SPVs have been structured to qualify as QSPEs, the related assets and liabilities are not consolidated into our financial statements. For the year ended December 31, 2001 we sold $202 million of mortgage whole loans to such QSPEs.

In addition, we also engage indirectly in securitization transactions pursuant to which we sell mortgage whole loans and other financial instruments to affiliates of CSFBI. These affiliates in turn transfer such assets to SPVs. In the normal course of business, we sell mortgage whole loans and other financial instruments to such affiliates in connection with such transactions on market terms that could be obtained from unaffiliated parties. For the year ended December 31, 2001, we sold approximately $22 billion of mortgage whole loans and approximately $8.8 billion of other financial instruments to such affiliates in connection with such transactions.

ACCOUNTING DEVELOPMENTS

In September 2000, the Financial Accounting Standards Board (the "FASB") issued SFAS 140, which revises the standards for accounting for securitizations and other transfers of financial assets and collateral. In addition, as noted above, specific implementation guidelines have been established by SFAS 140 to further distinguish transfers of financial assets that are sales from transfers that are secured borrowings. This statement is effective for transfers occurring after March 31, 2001 and for disclosures relating to securitization transactions and collateral for fiscal years ended after December 15, 2000. We refer you to Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

In June 1998, the FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging ActivitiesDeferral of the Effective Date of FASB Statement No. 133an amendment of FASB Statement No. 133" and Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities". These statements establish new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. These statements require that an entity recognize all derivatives as either assets or liabilities in the statement of financial condition at fair value. The accounting for changes in the fair value of a derivative instrument depends on its intended use and the resulting designation. We adopted the provisions of these statements on January 1, 2001, the first day of our 2001 fiscal year. We refer you to Note 12 to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations", which requires that all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The pooling of interest method will no longer be permitted.

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill be reviewed for impairment instead of being amortized to earnings. The statement is effective for fiscal years beginning after December 15, 2001. Management is evaluating the impact of adopting SFAS 142. For the year ended December 31, 2001, the amount of goodwill amortization charged to earnings was $29.7 million.

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"), which addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for fiscal years beginning after June 15, 2002. SFAS 143 is not expected to have a significant impact on our consolidated financial statements.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document carrying amount or fair value less cost to sell and also broadens the reporting requirements for discontinued operations. This statement is effective for fiscal years beginning after December 15, 2001, and is to be applied prospectively. Management is evaluating the impact of adopting SFAS 144.

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

GENERAL

We are part of CSFB and our risks are managed as part of the global CSFB business unit. The CSFB risk management process is designed to ensure that there are sufficient independent controls to measure, monitor and control risks in accordance with CSFB's control strategy and in consideration of industry best practices. The primary responsibility for risk management lies with CSFB's senior business line managers. They are held accountable for all risks associated with their businesses, including counterparty risk, market risk, liquidity risk, legal risk, operating risk and reputational risk.

CSFB believes that it has effective procedures for measuring and managing the risks associated with its business activities. CSFB cannot completely predict all market developments and CSFB's risk management cannot fully protect against all types of risks. Unforeseen market developments or unexpected movements or disruption in one or more markets can result in losses due to events such as adverse changes in inventory values, a decrease in liquidity of trading positions, greater earnings volatility or increased credit risk exposure. Such losses could have a material adverse effect on our and CSFB's results of operations and financial condition.

Risk management is an ongoing process. The process begins with the determination of CSFB's business objectives and strategies and proceeds with the identification, assessment, management and control of the risks associated with its activities and the reaffirmation or reconsideration of objectives and strategies.

RISK MANAGEMENT AT CSFB

Risk Management

The Board of Directors of Credit Suisse First Boston, the Swiss bank, is ultimately responsible for the determination of general risk policy and risk management organization and for approving the overall market risk limit as recommended by the Credit Policy Committee/ Capital Allocation and Risk Management Committee ("CPC/CARMC"). CPC/CARMC establishes the policies and procedures regarding risk and capital allocation within CSFB. CPC/CARMC is responsible for approving market risk management policies and procedures, risk concentration limits, risks outside these limits within its authority and stress test and scenario analysis definitions. CPC/CARMC is also responsible for recommending overall market risk limits and market risk limit changes (total limit) to the Board of Directors for review and approval.

Strategic Risk Management ("SRM") is part of the independent risk oversight function of CSFB and is responsible for assessing the overall risk profile of CSFB on a global basis and recommending corrective action where appropriate. SRM acts as the "risk conscience" of CSFB with respect to all risks that could have a material economic effect.

Risk Measurement and Management ("RMM") is responsible for the measurement and reporting of all credit risk and market risk data for CSFB. RMM consolidates exposures arising from all trading portfolios and geographic centers on a daily basis. CSFB uses two main methodologies to measure and manage the market risks that it may undertake: the "value-at-risk" ("VAR") method and scenario analysis. In addition, RMM uses various models to measure "gap" risk and economic capital for certain complex activities and to estimate the effect of more severe market movements.

Credit Risk Management ("CRM") is responsible for approving all credit risk assumed by CSFB. This includes loans and loan-related credit risk, counterparty credit risk and country risk. In addition, CRM has oversight responsibility for concentrated positions in trading inventory. Unusual risks and specific policies and procedures are reviewed and approved by CPC/CARMC.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CRM's responsibilities are carried out by senior officers within the CRM function who provide dedicated coverage to each of CSFB's major businesses. Each of these CRM units is organized along regional lines, and in some cases further organized along industry or other lines of specialty, for example, leveraged and project finance. CRM, SRM and RMM are all independent of the front office and report to the Vice- Chairman of the Executive Board of CSFB.

Other business-specific risks are managed primarily through designated groups and committees within the different operating divisions. Before any new activity is undertaken, the New Business Committee is required to review the proposed business, its structure and infrastructure requirements and ensure that all material risks are identified and addressed appropriately. This Committee is composed of the senior managers responsible for the Finance, Administration and Operations functions of CSFB.

To supplement its control environment, CSFB has an oversight function with (a) selected executive officers who have overall responsibility for oversight in their respective regions, (b) regional oversight managers who assist the executive officers with this responsibility and (c) a country manager in each country to manage local oversight issues. Regional Oversight and Country Management serves as an additional line of control and concentrates on regulatory and reputational issues, supervising legal entities and supporting management in its efforts to improve the control environment.

The Corporate Treasury Department of CSFB is responsible for managing CSFB's liquidity risk.

See "BusinessCertain Factors that May Affect our Business" in Part I, Item 1 of this Annual Report.

Market Risk

Market risk can be described as the potential change in the value of a portfolio of financial instruments resulting from the movement of market rates and prices. A typical transaction or position may be exposed to a number of different market risks. Types of market risk include interest rate, foreign currency exchange rate, equity risk and commodity price risk. Interest rate risk can arise from changes such as changes in the level, slope and curvature of the yield curve; changes in the implied volatility of interest rate derivatives; changes in the rate of mortgage prepayments; and changes in credit spreads. Foreign currency exchange rate risk can arise from changes such as those in spot prices and the implied volatility of currency derivatives. Equity risk can arise from changes such as changes in the price of individual equity securities and equity indices, changes in the implied volatility of equity derivatives and dividend risk. We do not have material commodity price risk.

CSFB devotes considerable resources in its effort to ensure that market risk is comprehensively captured, accurately modeled and effectively managed and reported. RMM consolidates exposures arising from all trading portfolios in all geographical centers and calculates and reports CSFB's global aggregate risk exposure on a daily basis. To achieve this, RMM uses a number of complementary risk measurement techniques. The two principal techniques are value-at-risk and scenario analysis. VAR is a statistical estimate of the potential loss arising from a portfolio using a predetermined confidence level and holding period and market movements determined from historical data. Scenario analysis estimates the potential loss from significant changes in market parameters that are modeled on past extreme events and hypothetical scenarios.

Value at Risk

CSFB has used a VAR methodology to model market risk since 1995. The methodology is subject to continuous review in an effort to ensure that it remains relevant to the business being conducted, captures all significant risks, is consistent across risk types and meets or exceeds regulatory and industry standards. There is no uniform industry methodology for estimating VAR. The CSFB VAR methodology uses assumptions and estimates that CSFB believes are reasonable, but different assumptions or estimates could result in different estimates of VAR.

CSFB's VAR is defined as the 99th percentile greatest loss that may be expected in a portfolio over a 10-day holding period. In general, a rolling two years of historical data are used to derive the market movements used for this calculation. These movements are recalculated on a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document monthly basis and after periods of significant market turbulence. CSFB determines market risk exposures by taking current positions and calculating a series of profit and loss movements over a predetermined holding period of 10 days using two years of historical data. Risk is calculated as the 99th percentile of observed losses over the holding period. These parameters and procedures currently meet the quantitative and qualitative requirements prescribed by the Basel Committee on Banking Supervision, the Swiss Federal Banking Commission and other leading banking regulators. For some purposes, such as backtesting, the resulting VAR figures are scaled down using a one-day holding period values, including those provided in this disclosure.

VAR as a risk measure quantifies the loss on a portfolio under normal market conditions and is not intended to measure risk associated with unusually severe market moves. The VAR methodology also assumes that past data can be used to predict future events. VAR calculated for a 10-day period does not fully capture the market risk of trading positions that cannot be liquidated or hedged within 10 days. During periods of pronounced market disruption outside the 99th percentile, other techniques such as scenario analysis become more important tools than VAR for monitoring risk exposures.

The VAR data presented below has been scaled down using a one-day holding period. The one-day VAR data below shows the market risk exposures of our trading positions at December 31,

2001 and December 31, 2000. Due to the benefit of diversification, our VAR is less than the sum of the individual components.

December 31, December 31, 2001 2000

(in millions)

Trading: Interest rate risk $ 29.2 $ 31.6 Equity risk $ 10.0 $ 10.2 Foreign currency exchange risk $ 0.0 $ 0.5 Total $ 28.7 $ 32.5

The histogram below shows daily trading revenue for the year ended December 31, 2001 for substantially all of our trading activities.

2001 vs 2000 DISTRIBUTION OF CSFB'S DAILY TRADING REVENUE (UNAUDITED) $mm

Sensitivity analysis is used to quantify the market risk in non-trading portfolios. It is generally defined as a measure of the potential changes in a portfolio's fair value created by changes in one or multiple financial markets' rates or prices, including interest rates, foreign exchange rates, and equity and commodity prices. This means the results could be focused to show the impact of a negative or "adverse" shift in a single interest rate or could be calculated to show the effects of many simultaneous changes. As of December 31, 2001, the total non- trading market risk using sensitivity analysis was approximately $458 million.

We have equity risk on our non-trading financial instruments portfolio, which is comprised of our private equity investments. We measure equity risk on our private equity investments using a sensitivity analysis that estimates the potential decline in the recorded value of the investments resulting from a 10% decline in the equity markets of G-21 nations and a 20% decline in the equity markets of non-G-21 nations. As at December 31, 2001, the non-trading equity risk was approximately $95 million.

We measure interest rate risk on non-trading positions using sensitivity analysis that estimates the potential decline in the value of the non-trading portfolio resulting from a 100 basis point decline in the interest rates of G-21 nations and a 200 basis points decline in the interest rates of non-G-21 nations. During 2001 the interest rate risk on non-trading positions became significant because certain of our fixed rate long-term debt issues in 2001 were not hedged given historically low interest rates at the time of issue. The non-trading interest rate risk as at December 31, 2001 was approximately $361 million.

We do not have material foreign exchange or commodity price risks on our non-trading portfolio.

Market Risk Limit

Market risk limits are structured at three levels: an overall market risk VAR limit for CSFB as a whole; market risk limits by business division (e.g., Securities Division); and market risk limits by business line within a business division (e.g., Foreign Exchange). Asset class VAR limits are used to control exposure within a particular risk type.

Market risk is managed and controlled at three levels. Senior management is responsible for monitoring CSFB's market risk utilizations, exposures and risk-adjusted performance. Trading management is responsible for actively managing positions against approved risk limits.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document RMM is responsible for monitoring exposures against approved risk limits, obtaining appropriate sign-off for limit excesses and seeking to ensure that trading management bring exposures within the limits following limit excesses when appropriate.

Additional market risk limits (including limits by region or risk type) are imposed by trading management in consultation with RMM. These limits are essentially internal risk flags, which are used to assist trading management to identify potential risk concentrations. RMM monitors and reports compliance with the official limit framework and also provides assistance in an effort to ensure compliance with lower level risk flags, as required. CSFB uses various other types of limits to highlight potential risk concentrations. These include, among others, country exposure limits, issuer limits and market value limits.

Scenario Analysis

Scenario analysis is an essential component of CSFB's market risk measurement framework. Scenario analysis examines the potential effects of changes in market conditions, corresponding to exceptional but plausible events, on the financial condition of CSFB. The results of the analysis are used to manage exposures on a firm-wide basis, as well as at the portfolio level. Scenario analysis involves the revaluation of CSFB's major portfolios to arrive at a measure of the profit or loss the firm may suffer under a particular scenario. Scenarios are applied to all major markets in which CSFB operates.

Global scenarios are used to capture the risk of severe disruption to all major markets and are related to historic events such as the crisis in the 1987 equity markets, the 1990 U.S. real estate market and the 1994 bond markets and the 1998 credit crisis. Business level scenarios are used to capture portfolio-specific risks by employing scenarios based on non-parallel yield curve shifts, changes in correlations and other pricing assumptions.

Credit Risk

The counterparty risk portion of credit risk is determined by the likelihood of a counterparty not fulfilling its contractual obligations to CSFB and thus creating a partial or total loss. To assess the probability of default, CSFB utilizes a counterparty rating scale which approximates that used by the major public rating agencies (ranging from AAA as the best to D as the worst) and applies this grading

measure against all of its counterparties. CSFB takes a proactive approach to rating counterparties and, as a result, from time to time internal ratings may deviate from those assigned by public rating agencies.

Credit Authority

Credit authority is delegated by the Chief Credit Officer to specific senior CRM personnel based on each person's knowledge, experience and capability. These delegations of credit authority are reviewed periodically. Credit authorization is separated from line functions. CPC/ CARMC, in addition to its responsibilities for market risk described above, is also responsible for maintaining credit policies and processes, evaluating country, counterparty and transaction risk issues, applying senior level oversight for the credit review process and seeking to ensure global consistency and quality of the credit portfolio. CPC/CARMC regularly reviews credit limits measuring country, geographic region and product concentrations, as well as impaired assets.

Credit Analysis Methodology

All counterparties are assigned a credit rating as noted above. The intensity and depth of analysis is related to the amount, duration and level of risk being proposed together with the perceived credit quality of the counterparty or issuer in question. Analysis consists of a quantitative and qualitative portion and strives to be forward looking, concentrating on economic trends and financial fundamentals. In addition, analysts make use of peer analysis, industry comparisons and other quantitative tools. Any final rating requires the consideration of qualitative factors relating to the company, its industry and management. The Credit Rating System ("CRS"), an internally developed

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document quantitative model, is an integral part of CSFB's internal rating process. CRS is also a key tool in trying to ensure the global consistency of ratings, particularly for counterparties that are not rated by external agencies.

In addition to the aforementioned analysis, all counterparty ratings are subject to the rating of the country in which they are domiciled. Analysis of key sovereign and economic issues for all jurisdictions is undertaken and these are considered when assigning the rating and risk profile for individual counterparties.

Credit Risk Arising from Trading Positions and Derivative Transactions

Credit risk associated with CSFB's trading and derivatives business is measured against counterparty limits on at least a daily basis. Credit risk is defined in terms of mark-to-market replacement value and potential exposure to maturity. The latter is based on the volatility of the underlying market factors such as interest and foreign exchange rates. VAR analysis is conducted to estimate the potential impact of market volatility on the quality of CSFB's counterparty credit portfolio.

On a case-by-case basis, CSFB mitigates credit risk associated with its trading and derivatives business by taking collateral (normally consisting of cash and/or treasury instruments issued by G-7 sovereigns) from counterparties. Typically, counterparties have two days to meet collateral (margin) calls and during this period CSFB has potential credit risk which would crystallize in the event the collateral (margin) calls are not delivered and mark-to-market exposure remains positive (call period risk). In the case of lower-rated counterparties, additional collateral may also be taken to cover potential call period risk.

Collateral is managed and monitored by the Collateral Management Unit, a team of specialists independent of CRM and business line management.

Country Risk

Country risk is the risk of a substantial, systemic loss of value in the financial assets of a country or group of countries, which may be caused by dislocations in the credit, equity or currency markets. CSFB's four major operating divisions all manage country risk in a variety of ways. CARMC is responsible for setting of limits for this risk based on recommendations of CRM, SRM and CSFB's economists. In 1999, CSFB re-evaluated country risk limits for emerging markets, including extensive scenario testing, and CSFB's risk exposure to emerging markets countries was significantly reduced.

The measurement of exposures against country limits is undertaken by RMM. For trading positions, country risk is a function of the mark-to-market exposure of the position, while for loans and related facilities, country risk is a function of the amount that CSFB has lent or committed to lend. The day-to-day management of country exposure is assigned to each of the core businesses in accordance with its business authorizations and limit allocations. RMM and CRM provide independent oversight in an effort to ensure that the core businesses operate within their limits. CRM has the responsibility for periodically adjusting these limits to reflect changing credit fundamentals and business volumes. CARMC regularly reviews the status and creditworthiness of countries and adjusts country risk limits accordingly.

Settlement Risk

Settlement risk arises whenever the settlement of a transaction results in timing differences between the disbursement of cash or securities and the receipt of value from the counterparty. This risk arises whenever transactions settle on a "free of payment" basis and is especially relevant when operating across time zones.

CSFB seeks to minimize and manage settlement risk through its participation in regulated clearing and depository organizations, which offer delivery versus payment services. CSFB is also actively participating in the creation of new settlement systems. One such system is Continuous Linked Settlement, which aims to eliminate settlement risk in the field of foreign exchange trading and which is expected to be

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document available in the second quarter of 2002. In those markets in which these services do not exist, CSFB utilizes where possible agent banks that are instructed to exchange value for value.

In those instances where market convention and/or products preclude a value-for-value exchange, CSFB seeks to manage its risk through confirmation and affirmation of transaction details with counterparties. In addition, it also actively manages the timing of settlement instructions to its agents and the reconciliation of incoming payments in order to reduce the window of exposure. CRM considers these factors in deciding counterparty risk limits.

Legal Risk

CSFB faces significant legal risks in its businesses. Legal risks in the investment banking business include, among other things, disputes over the terms of trades and other transactions in which CSFB acts as principal; securities law disclosure and other liability in connection with transactions pursuant to which CSFB acts as underwriter, placement agent or financial adviser; the unenforceability or inadequacy of the documentation for some of the transactions in which CSFB participates; investment suitability concerns; compliance with the laws and regulations (including change in laws or regulations) of the many countries in which CSFB does business; and disputes with its employees. Some of these transactions or disputes result in potential or actual litigation and arbitration that CSFB must incur legal expenses to defend.

The investment banking business is subject to extensive regulation by governmental and self-regulatory organizations around the world. A failure to comply with these regulations could result in regulatory investigations, fines, and restrictions on some of CSFB's business activities or other

sanctions. CSFB seeks to minimize legal risk through the adoption of compliance and other policies and procedures, continuing to refine controls over business practices and behavior, extensive employee training sessions, the use of appropriate legal documentation, and the involvement of the Legal and Compliance Department and outside legal counsel. See "BusinessCertain Factors That May Affect Our BusinessLegal and Regulatory Risks" in Part I, Item 1 of this Annual Report on Form 10-K.

Operational Risk

The definition of operational risk used by Credit Suisse Group is "the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events". Business and strategic risk are specifically excluded from this definition.

Operational risk is inherent in many different aspects of CSFB's activities and comprises a large number of disparate risks. In comparison to market or credit risk, the sources of operational risk are difficult to identify comprehensively and the amount of risk is also not normally chosen willingly, but is accepted as a necessary consequence of doing business. CSFB therefore manages operational risk differently from market or credit risks. Operational risk is controlled through a network of controls, procedures, reports and responsibilities.

Credit Suisse Group uses a group-wide framework to monitor and control such risks. CSFB operates within this framework. CSFB's primary aim is the early identification, prevention, and mitigation of operational risks, as well as in timely and meaningful management reporting.

During 2001 the firm undertook a number of key initiatives. These include improvement of the firm's consolidated operational risk indicator report for senior management and the development of a risk assessment program. During 2002, the framework is expected to be developed further to provide enhanced risk identification reporting processes and to prepare for the forthcoming operational risk requirements in the revised Basel Accord on international capital adequacy requirements.

Reputational Risk

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CSFB's policy is to avoid any action or transaction that has a potentially unacceptable level of risk to CSFB's reputation. Senior business managers are primarily responsible for the effect on CSFB's reputation of all the business that they conduct. If a transaction has any characteristics that might impair CSFB's reputation, the transaction must be put through a reputational risk review procedure before CSFB makes a commitment to the client or the transaction. This procedure includes approval from senior members of Regional Oversight and specific senior business managers. In addition, CSFB has an extensive system of functional controls, within the Legal and Compliance Department, CRM, New Business and the Controllers Department, which highlight potential reputational risk issues.

Liquidity Risk

Our liquidity risk is managed as a part of CSFB's global liquidity policy. CSFB's liquidity policy focuses on the proven stability of its unsecured funding sources, which include CSFB-sourced deposits as well as access to customer funds sourced by affiliates. The deposit base provides CSFB with substantial sources of liquidity that are well diversified and driven by customer relationships rather than price. These deposits provide a stable source of funds. We also regularly access the capital markets through our commercial paper program, medium-term note programs and issues of senior debt and other securities. Additionally, we maintain a revolving credit facility with various banks. CSFB and we also have access to additional liquidity through our subsidiary broker-dealers, which have the capacity to increase their funding through the secured funding markets (repurchase agreements and other collateralized arrangements). These secured funding markets have proven reliable in high stress conditions. This secondary source of liquidity is potentially available as alternative funding to meet business plans and commercial commitments. CSFB regularly stress tests its liquidity using scenarios

designed to represent highly adverse conditions. See "Liquidity and Capital ResourcesLiquidity Planning and Measurement" for a discussion of how we monitor our liquidity position.

Item 8: Financial Statements and Supplementary Data

The consolidated financial statements of us and our subsidiaries, together with the notes thereto and the Independent Auditors' report thereon, are set forth on pages F-1 to F-47 of this Annual Report on Form 10-K. In addition, the supplementary financial information on selected quarterly financial data is set forth on page F-42 of this Annual Report.

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in or disagreements with accountants on accounting and financial disclosure.

PART III

Item 10: Directors and Executive Officers of the Registrant

DIRECTORS AND OFFICERS

Set forth below is certain information as of March 1, 2002 with respect to our directors and executive officers.

Name Age Position John J. Mack 57 Director, President & Chief Executive Officer David C. Fisher 55 Chief Financial and Accounting Officer Robert M. Baylis 63 Director

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Philip K. Ryan 45 Director Maynard J. Toll, Jr. 60 Director Brady W. Dougan 42 Director, Head of Securities Division Director, Chairman of Global Investment Banking and Private Hamilton E. James 51 Equity Richard E. Thornburgh 49 Director, Head of Finance & Risk Stephen R. Volk 65 Director, Managing Director David M. Brodsky 58 General Counsel, Managing Director D. Wilson Ervin 41 Head of Strategic Risk Management Eileen K. Murray 43 Managing Director Robert C. O'Brien 58 Chief Credit Officer Adebayo O. Ogunlesi 48 Head of Global Investment Banking, Managing Director Jeffrey M. Peek 55 Head of Financial Services Division, Managing Director Jeffrey H. Salzman 49 Head of Private Client Services/Pershing, Managing Director Lewis H. Wirshba 45 Treasurer

JOHN J. MACK. Mr. Mack was appointed President and Chief Executive Officer and a Director of our company in July 2001 and is a member of the Operating Committee of our Board of Directors. He is also the Chief Executive Officer of CSFB, Vice-Chairman of Credit Suisse Group's Executive Board and Chief Executive Officer and Chairman of the senior most executive board of CSFB (the "CSFB Operating Committee"). Prior to joining CSFB, Mr. Mack was the President and Chief Operating Officer of Morgan Stanley Dean Witter since the merger of Morgan Stanley and Dean Witter in May 1997 until January 2001.

DAVID C. FISHER. Mr. Fisher was appointed Chief Financial Officer of our company in March 2002 and was appointed Chief Accounting Officer of our company in November 2000. He also serves as Chief Accounting Officer of CSFB, a position he has held since 1999. Mr. Fisher joined CSFB from Bankers Trust Corporation where he served as Controller from 1998 to 1999. From 1985 to 1998, Mr. Fisher worked for Salomon Brothers Inc where he served as Controller for the majority of his tenure.

ROBERT M. BAYLIS. Mr. Baylis was appointed a Director of our company in November 2000. Prior to this appointment, Mr. Baylis was with CS First Boston for over 33 years, including serving as Vice Chairman of CS First Boston from March 1992 to March 1994 and from August 1995 until his retirement in January 1996 and as Chairman and Chief Executive Officer of CS First Boston Pacific Inc./Hong Kong from March 1993 to August 1994. He currently serves as a Director of Host Marriott Corporation, Gildan Activewear, Inc., Covance, Inc., PartnerRe Ltd. and New York Life Insurance Co.

PHILIP K. RYAN. Mr. Ryan was appointed a Director of our company in November 2000. He also serves as the Chief Financial Officer of Credit Suisse Group, a position he has held since 1999 and

is a member of the Executive Board of Credit Suisse Group. Prior to his appointment as the Chief Financial Officer of Credit Suisse Group, Mr. Ryan served as the Chief Financial Officer of Credit Suisse Asset Management LLC from 1996 through 1999 and worked as an investment banker at CSFB from 1985 through 1996.

MAYNARD J. TOLL, Jr. Mr. Toll was appointed a Director of our company in November 2000. From 1997 through 2000, he was self-employed. From 1975 to 1997, he worked as an investment banker and head of corporate communications at CSFB.

BRADY W. DOUGAN. Mr. Dougan was appointed Head of the Securities Division, which is a consolidation of our former Equity and Fixed Income Divisions, in November 2001 and has been a Director of our company since November 2000. Prior to serving as Head of the Securities Division, Mr. Dougan served as Division Head of Equity since November 2000. Mr. Dougan also serves as Head of the Securities Division at CSFB and is a member of the CSFB Operating Committee. Mr. Dougan served as Co-Head of the Global Debt Capital Markets

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Group at CSFB and Co-Head of the Credit Suisse Financial Products' marketing efforts in the Americas from 1993 to 1996. Mr. Dougan joined CSFB in 1990 from Bankers Trust Company.

HAMILTON E. JAMES. Mr. James was appointed Chairman of our Global Investment Banking and Private Equity businesses in March 2002 and is a Director of our company. In February 2002, Mr. James was appointed Chairman of Investment Banking and Private Equity of CSFB and a member of the CSFB Operating Committee. Prior to that, Mr. James served as Co-Head of the Investment Banking Division for us and CSFB. From 1995 to November 2000, Mr. James served as the Chairman of our Banking Group. He joined our company in 1975. Mr. James also serves as a Director of Costco Wholesale Corporation.

RICHARD E. THORNBURGH. Mr. Thornburgh was appointed Head of Finance & Risk in March 2002 and has been a Director and a member of the Operating Committee of our Board of Directors since November 2000. Mr. Thornburgh has also served as Chief Financial Officer since May 2000 and has served as Vice Chairman of the CSFB Executive Board since April 1999. Mr. Thornburgh is a member of the CSFB Operating Committee. From 1997 to mid-1999, Mr. Thornburgh served as Chief Financial Officer of Credit Suisse Group. For the period 1997 to 2001, Mr. Thornburgh served as a member of the Credit Suisse Group Executive Board. Prior to that, Mr. Thornburgh served as Chief Financial and Administrative Officer and was a member of the Executive Board of CS First Boston. Mr. Thornburgh began his investment banking career with CSFB in 1976.

STEPHEN R. VOLK. Mr. Volk was appointed a Managing Director and a Director of our company in August 2001 and is a member of the Operating Committee of our Board of Directors. Mr. Volk is also Chairman of CSFB and a member of the CSFB Operating Committee. Prior to joining our company, Mr. Volk was Senior Partner at Shearman & Sterling from 1991 until 2001.

DAVID M. BRODSKY. Mr. Brodsky was appointed a Managing Director and the General Counsel of our company in November 2001. Mr. Brodsky also has been the General Counsel for the Americas of CSFB since 1999. He joined CSFB in October 1999 after leaving Schulte Roth & Zabel LLP in New York where, for nearly twenty years, he was a senior partner, a member of the law firm's Executive Committee and head of the Litigation Department.

D. WILSON ERVIN. Mr. Ervin was appointed Head of Strategic Risk Management of our company in November 2000. He also serves as Head of Strategic Risk Management at CSFB. Prior to that, Mr. Ervin worked at Credit Suisse Financial Products from 1990. He has been with CSFB since 1982.

EILEEN K. MURRAY. Ms. Murray was appointed Managing Director of our company in March 2002 and was appointed the Head of Global Technology and Operations of CSFB in

February 2002. Ms. Murray is also a member of the CSFB Operating Committee. Ms. Murray joined CSFB in February 2002 from Morgan Stanley where she was Chief Administrative Officer for the Institutional Securities Group. Ms. Murray joined Morgan Stanley in 1984 as a Senior Analyst in the Controllers department. Prior to the merger of Morgan Stanley and Dean Witter, she was Controller and Treasurer of Morgan Stanley Group, Inc.

ROBERT C. O'BRIEN. Mr. O'Brien was appointed Chief Credit Officer of our company in November 2000. Mr. O'Brien also serves as Chief Credit Officer of CSFB, a position he has held since 1998. From 1994 to 1998, Mr. O'Brien held various positions in Corporate Banking and Leveraged Finance, and during 1996, he was Chief Executive Officer of Credit Suisse North America. Mr. O'Brien joined CSFB in 1994 from Chemical Bank, where he was a Senior Managing Director and member of the Management Committee of Banking and Finance.

ADEBAYO O. OGUNLESI. Mr. Ogunlesi was appointed a Managing Director and Head of our Global Investment Banking business in March 2002. Mr. Ogunlesi is also Head of the CSFB Investment Banking Division and a member of the CSFB Operating Committee. Mr. Ogunlesi joined CSFB in 1983 and prior to becoming Head of the Investment Banking Division, he was head of the Global Energy Group. Prior to joining CSFB, Mr. Ogunlesi was a corporate attorney at Cravath, Swaine & Moore.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document JEFFREY M. PEEK. Mr. Peek was appointed a Managing Director and Head of the Financial Services Division of our company in March 2002. Mr. Peek was appointed Vice Chairman of CSFB in December 2001. He is Head of CSFB's Financial Services businesses, including Credit Suisse Asset Management, Pershing and Private Client Services. He is also a member of the CSFB Operating Committee. Prior to joining our company, Mr. Peek was the head of the asset management division at Merrill Lynch, where he worked for eighteen years.

JEFFREY H. SALZMAN. Mr. Salzman was appointed a Managing Director and Head of the Private Client Services and Pershing businesses of our company in March 2002 and Head of Private Client Services and Pershing for CSFB in October 2001. Prior to joining CSFB, he held a variety of positions at Morgan Stanley since 1977. He left Morgan Stanley in 2000.

LEWIS H. WIRSHBA. Mr. Wirshba was appointed Treasurer of our company in November 2000. Mr. Wirshba also serves as Treasurer of CSFB, a position he has held since 1996, and as Global Head of CSFB's New Business Department since March 2000. He joined CSFB in 1986 from the treasurer's office of General Motors.

Messrs. Baylis, Ryan and Toll have resigned from our Board of Directors effective April 1, 2002. At that time, Messrs. Ogunlesi and Peek and Ms. Murray are expected to be elected to our Board of Directors.

Following the conclusion of our tender offer for the CSFBdirect common stock and the redemption or deregistration and delisting of our other equity securities, we are no longer subject to a requirement to maintain an audit committee. Effective April 1, 2002, our audit committee will be disbanded.

Item 11: Executive Compensation

Pursuant to General Instruction I of Form 10-K, the information required by Item 11 is omitted.

Item 12: Security Ownership of Certain Beneficial Owners and Management

Pursuant to General Instruction I of Form 10-K, the information required by Item 12 is omitted.

Item 13: Certain Relationships and Related Transactions

Pursuant to General Instruction I of Form 10-K, the information required by Item 13 is omitted.

PART IV

Item 14: Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a) Documents filed as part of this Report

1. Consolidated Financial Statements

The consolidated financial statements required to be filed in this Annual Report on Form 10-K are listed on page F-1 hereof.

2. Financial Statement Schedule

The financial statement schedule required to be filed in this Annual Report on Form 10-K is listed on page F-1 hereof. The required schedule appears on pages F-43 through F-47 hereof.

Exhibit Description Number

Purchase Agreement dated as of November 28, 2001, between Registrant and Bankmont 2.1 Financial Corp. ("Purchaser"), as amended by First Amendment to Purchase Agreement, dated as of February 1, 2002, between Registrant and Purchaser.*

Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to 3.1 Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001).

3.2 By-laws of the Registrant. *

The instruments defining the rights of holders of long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The 4.1 Registrant hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.

364-Day Auction Bid Advance and Revolving Credit Facility Agreement, dated as of May 25, 2001, among the Registrant and Credit Suisse First Boston, Inc. as borrowers, the banks named 10.1 therein, JP Morgan Chase Bank, as administrative agent, and The Bank of New York, Bank One, NA (Main Office Chicago), Citibank, N.A. and Deutsche Bank AG, New York Branch and/or Cayman Islands Branch, as syndication agents.*

Sublease Agreement, dated December 31, 2000, between The Chase Manhattan Bank and the Registrant, Subtenant, on 277 Park Avenue, New York, New York (incorporated by reference to 10.2 Exhibit 10.24 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Assignment of Lease, dated December 31, 2000, between the Registrant and The Chase Manhattan Bank on 277 Park Avenue, New York, New York (incorporated by reference to 10.3 Exhibit 10.6 of the Registrant's Quarterly Report on Form 10-Q for the period ended March 31, 2001).

Agreement of Lease, dated June 3, 1998, between USF Nominees Limited, Landlord, DLJ UK Properties Limited, Tenant, on 111 Old Broad Street, London and the Registrant, Surety 10.4 (incorporated by reference to Exhibit 10.92 of the Registrant's quarterly report on Form 10-Q for the period ended June 30, 1998).

Agreement of Lease, dated July 28, 1995, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by reference 10.5 to Exhibit 10.28 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Amendment of Lease, dated May 17, 1996, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.6 reference to Exhibit 10.29 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated September 10, 1997, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.7 reference to Exhibit 10.30 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Modification of Lease, dated February 5, 1998, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.8 reference to Exhibit 10.31 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Second Modification of Lease, dated June 12, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York 10.9 (incorporated by reference to Exhibit 10.32 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Third Modification of Lease, dated September 18, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York 10.10 (incorporated by reference to Exhibit 10.33 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fourth Modification of Lease, dated November 13, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York 10.11 (incorporated by reference to Exhibit 10.34 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Sublease, dated August 31, 1999 between GFT Apparel Corp. and the Registrant, Subtenant, on Eleven Madison Avenue, New York, New York (incorporated by reference to 10.12 Exhibit 10.35 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated November 13, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.13 reference to Exhibit 10.36 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated February 22, 2001, between Metropolitan Life Insurance Company and the Registrant, Tenant, on One Madison Avenue, New York, New York (incorporated by 10.14 reference to Exhibit 10.37 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Sublease, dated February 22, 2001, between Metropolitan Life Insurance Company and the Registrant, Landlord, on One Madison Avenue, New York, New York (incorporated by 10.15 reference to Exhibit 10.38 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Lease dated as of October 30, 2001, between Registrant and The Port Authority of New York and 10.16 New Jersey, on One Madison Avenue. *

Agreement of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey 10.17 (incorporated by reference to Exhibit 10.41 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

First Amendment of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey 10.18 (incorporated by reference to Exhibit 10.42 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Second Amendment of Lease, dated March 12, 1992, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.19 Jersey (incorporated by reference to Exhibit 10.43 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Third Amendment of Lease, dated December 27, 1992, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.20 New Jersey (incorporated by reference to Exhibit 10.44 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fourth Amendment of Lease, dated December 23, 1993, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.21 New Jersey (incorporated by reference to Exhibit 10.45 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fifth Amendment of Lease, dated May 1, 1994, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey 10.22 (incorporated by reference to Exhibit 10.46 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Sixth Amendment of Lease, dated March 9, 1995, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey 10.23 (incorporated by reference to Exhibit 10.47 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Seventh Amendment of Lease, dated June 16, 1995, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.24 Jersey (incorporated by reference to Exhibit 10.48 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Eight Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City 10.25 Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (incorporated by reference to Exhibit 10.49 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Ninth Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey 10.26 (incorporated by reference to Exhibit 10.50 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Tenth Amendment of Lease, dated December 31, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.27 New Jersey (incorporated by reference to Exhibit 10.51 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Eleventh Amendment of Lease, dated February 7, 1997, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.28 New Jersey (incorporated by reference to Exhibit 10.52 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Twelfth Amendment of Lease, dated August 18, 1997, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.29 Jersey (incorporated by reference to Exhibit 10.53 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Thirteenth Amendment of Lease, dated January 12, 1998, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.30 New Jersey (incorporated by reference to Exhibit 10.54 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fourteenth Amendment of Lease, dated December 28, 1998, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.31 New Jersey (incorporated by reference to Exhibit 10.55 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fifteenth Amendment of Lease, dated June 16, 1999, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.32 Jersey (incorporated by reference to Exhibit 10.56 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Sixteenth Amendment of Lease, dated March 31, 2000, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.33 New Jersey (incorporated by reference to Exhibit 10.57 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated August 15, 2000, between TM Park Avenue Associates and the 10.34 Registrant, Tenant, on 315 Park Avenue South, New York, New York (incorporated by reference

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to Exhibit 10.63 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

First Amendment to the Lease between Registrant and TM Park Avenue Associates dated August 10.35 16, 2000, on 315 Park Avenue South, New York, New York. *

12.1 Computation of ratio of earnings to fixed charges.*

23.1 Consent of KPMG LLP.*

24.1 Power of Attorney.* * Filed herewith.

(b) Reports on Form 8-K

On October 9, 2001, we filed a Current Report on Form 8-K attaching an excerpt from a Credit Suisse Group press release including information concerning financial results for the third quarter and nine months ended September 30, 2001 and a cost reduction program for CSFB.

On October 18, 2001, we filed a Current Report on Form 8-K attaching a CSFB press release announcing that Gary G. Lynch, a partner at Davis, Polk & Wardwell and former head of the Enforcement Division of the Securities and Exchange Commission, has been named Global General Counsel of CSFB effective October 1, 2001 and two CSFB press releases announcing the completion of the tender offer for CSFBdirect common stock.

On October 31, 2001, we filed a Current Report on Form 8-K attaching our press release announcing a cash tender offer to acquire all outstanding shares of our Series B Fixed/Adjustable Rate Cumulative Preferred Stock and reporting recent developments including expected financial results for the third quarter of 2001 and a cost reduction program.

On November 15, 2001, we filed a Current Report on Form 8-K attaching a CSFB press release regarding progress on efforts to promote a more unified culture throughout CSFB.

On December 4, 2001, we filed a Current Report on Form 8-K reporting that the United States Attorney for the Southern District of New York stated that it closed its investigation of CSFB Corp. in connection with its practices of allocating shares of IPO securities without filing criminal charges, attaching a press release concerning our agreement to sell the U.S.-based online trading operations of CSFBdirect to Bank of Montreal, attaching a press release concerning the completion of our cash tender offer to acquire the outstanding shares of our Series B Fixed/ Adjustable Rate Cumulative Preferred Stock and attaching a press release concerning notice of full redemption on December 31, 2001 of our Series A Fixed/Adjustable Rate Cumulative Preferred Stock.

On December 13, 2001, we filed a Current Report on Form 8-K reporting that on December 7, 2001, Credit Suisse Group and CSFB released information on estimated one-time charges, and expected fourth quarter operating results, for CSFB and that many of the estimated one-time charges will be taken at our level.

On January 7, 2002, we filed a Current Report on Form 8-K on our agreement to sell Autranet to The Bank of New York and on the resignation of Joe L. Roby from the Board of Directors.

On January 22, 2002, we filed a Current Report on Form 8-K on CSFB Corp.'s settlement with the SEC and NASDR of their investigations into CSFB Corp.'s practices of allocating shares of IPO securities.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On January 31, 2001, we filed a Current Report on Form 8-K on our results for the fourth quarter of 2001.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE ITEMS 14(a)(1) AND 14(a)(2)

Page CONSOLIDATED FINANCIAL STATEMENTS Credit Suisse First Boston (USA), Inc. and Subsidiaries Independent Auditors' Report F-2 Consolidated Statements of Financial Condition F-3 Consolidated Statements of Operations F-5 Consolidated Statements of Changes in Stockholders' Equity F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-9 FINANCIAL STATEMENT SCHEDULE Schedule ICondensed Financial Statements of Registrant (Parent Company Only) Condensed Statements of Financial Condition F-43 Condensed Statements of Operations F-44 Condensed Statements of Cash Flows F-45 Notes to Condensed Financial Statements F-46

F-1

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders Credit Suisse First Boston (USA), Inc.

We have audited the accompanying consolidated statements of financial condition of Credit Suisse First Boston (USA), Inc. and subsidiaries (formerly known as Donaldson, Lufkin and Jenrette, Inc. and subsidiaries), (the "Company"), as of December 31, 2001 and 2000, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2001, and the related financial statement schedule. These consolidated financial statements and related financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and related financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Credit Suisse First Boston (USA), Inc. and subsidiaries, (formerly known as Donaldson, Lufkin and Jenrette, Inc. and subsidiaries), as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document related financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP New York, New York

January 31, 2002

F-2

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (In millions)

ASSETS

December 31, December 31, 2001 2000 Cash and cash equivalents $ 1,666 $ 2,758 Cash and securities segregated for regulatory purposes or deposited with clearing 6,407 4,969 organizations Collateralized short-term agreements: Securities purchased under agreements to resell 43,961 35,599 Securities borrowed 68,232 77,304 Receivables: Customers 4,740 8,991 Brokers, dealers and other 11,747 9,207 Financial instruments owned: U.S. government and agencies (includes securities pledged as collateral of $21,639 and 30,836 25,052 $14,272, respectively) Corporate debt (includes securities pledged as collateral of $9,765 and $6,074, 13,420 12,702 respectively) Mortgage whole loans (includes loans pledged as collateral of $4,997 and $4,136, 6,846 6,870 respectively) Equities (includes securities pledged as collateral of $5,917 and $9,326, respectively) 11,142 15,332 Commercial paper 582 237 Private equity and other long-term investments 963 1,031 Derivative contracts-trading 3,077 3,041 Other 2,085 571 Net deferred tax asset 2,200 1,821 Office facilities at cost (net of accumulated depreciation and amortization of $683 and 759 991 $723, respectively) Goodwill 249 313 Other assets and deferred amounts 9,408 5,430

Total Assets $ 218,320 $ 212,219

See accompanying notes to consolidated financial statements.

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (In millions, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY

December 31, December 31, 2001 2000 Commercial paper and short-term borrowings $ 9,170 $ 20,818 Collateralized short-term financings: Securities sold under agreements to repurchase 96,101 71,064 Securities loaned 27,105 35,598 Payables: Customers 11,593 12,119 Brokers, dealers and other 12,830 13,579 Financial instruments sold not yet purchased: U.S. government and agencies 20,888 21,987 Corporate debt 3,402 4,116 Equities 3,063 3,421 Derivative contracts-trading 2,957 2,668 Other 422 Obligation to return securities received as collateral 1,034 Accounts payable and accrued expenses 4,276 7,488 Other liabilities 2,928 1,397 Long-term borrowings 15,663 11,258 Company-obligated mandatorily redeemable trust securities of subsidiary trust holding 200 solely debentures of the Company Stockholders' Equity: Preferred stock, 50,000,000 shares authorized: Series A Preferred Stock, at $50.00 per share liquidation preference (4,000,000 shares 200 issued and outstanding at December 31, 2000) Series B Preferred Stock, at $50.00 per share liquidation preference (90,000 and 5 175 3,500,000 shares issued and outstanding at December 31, 2001 and 2000, respectively) Common Stock, 1,500,000,000 shares authorized: CSFB (USA) Common Stock ($0.10 par value; 500,000,000 shares authorized; 1,100 shares issued and outstanding) CSFBdirect Common Stock ($0.10 par value; 500,000,000 shares authorized; 18,400,000 shares issued and outstanding at December 31, 2000; 84,250,000 notional 2 shares at December 31, 2000, in respect of CSFB (USA)'s retained interest) Paid-in capital 6,064 5,072 Retained earnings 891 1,064 Accumulated other comprehensive loss (72) (7)

Total stockholders' equity 6,888 6,506

Total Liabilities and Stockholders' Equity $ 218,320 $ 212,219

F-4

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Operations (In millions)

Years Ended December 31,

2001 2000 1999 Revenues: Principal transactions-net $ 1,255 $ 704 $ 806 Investment banking and advisory 3,367 3,032 2,859 Commissions 1,479 1,474 1,201 Interest and dividends, net of interest expense of $10,339, $8,161, and $4,840, 1,224 734 549 respectively Other 223 94 116

Total net revenues 7,548 6,038 5,531

Expenses: Employee compensation and benefits 4,746 4,393 3,146 Occupancy and equipment rental 700 444 321 Brokerage, clearing, and exchange fees 325 207 143 Communications 315 222 162 Professional fees 410 317 286 Merger-related and restructuring costs 476 1,104 Other operating expenses 791 873 519

Total expenses 7,763 7,560 4,577

Income (loss) before provision (benefit) for income taxes, extraordinary items and (215) (1,522) 954 cumulative effect of a change in accounting principle

Provision (benefit) for income taxes (70) (458) 353

Income (loss) before extraordinary items and cumulative effect of a change in accounting (145) (1,064) 601 principle

Loss on early extinguishment of debt, net of tax benefit of ($5) (12)

Income (loss) before cumulative effect of a change in accounting principle (145) (1,076) 601

Cumulative effect of a change in accounting principle, net of tax provision of $0.3 1

Net income (loss) $ (144) $ (1,076) $ 601

See accompanying notes to consolidated financial statements.

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders' Equity For the Years Ended December 31, 2001, 2000 and 1999 (In millions, except per share data)

CSFB Accumulated CSFBdirect Preferred (USA) Paid-in Retained Other Common Total Stock Common Capital Earnings Comprehensive Stock Stock Income (loss)

Balances at December 31, 1998 $ 375 $ $ $ 892 $ 1,658 $ 3 $ 2,928 Net income 601 601 Translation adjustment (1) (1) Total comprehensive income 600 Net proceeds from issuance of CSFBdirect Common 2 345 347 Stock Dividends: CSFB (USA) Common Stock (32) (32) Preferred stock (21) (21) Exercise of stock options 35 35 Tax benefit on exercise of stock options 37 37 Conversion of restricted stock units 13 13

Balances at December 31, 1999 375 2 1,322 2,206 2 3,907 Net loss (1,076) (1,076) Translation adjustment (9) (9) Total comprehensive loss (1,085) Issuance of shares in consideration of transfer of CSFB 2,538 2,538 Corp. Dividend of DLJ Asset Management Group to parent (29) (29) Dividends: CSFB (USA) Common Stock (16) (16) Preferred stock (21) (21) CSG Share Plan Activity 299 299 Exercise of stock options 373 373 Tax benefit on exercise of stock options 406 406 Tender shares to employee trust 123 123 Conversion of restricted stock units 11 11

Balances at December 31, 2000 375 2 5,072 1,064 (7) 6,506 Net loss (144) (144) Translation adjustment (1) (1) Change in accounting principle (SFAS 133) (1) (1) Increase in pension liability, net of tax benefit of ($34). (63) (63) Total comprehensive loss (209) Capital contribution of CSFB Capital Holdings, Inc. 34 34 Retirement of CSFBdirect stock (2) 2 Tender Preferred A shares. (200) (200)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Tender Preferred B shares. (170) (8) (178) Dividends: Preferred stock (21) (21) Tax benefit on CSG Share Plan Activity 37 37 CSG Share Plan Activity 919 919

Balances at December 31, 2001 $ 5 $ $ $ 6,064 $ 891 $ (72) $ 6,888

See accompanying notes to consolidated financial statements.

F-6

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000 and 1999

2001 2000 1999

(In millions)

Cash flows from operating activities: Net income (loss) $ (144) $ (1,076) $ 601 Adjustments to reconcile net income (loss) to net cash used in operating activities: Extraordinary loss on early extinguishment of debt 17 Depreciation and amortization 208 160 106 CSG Share Plan activity 919 299 Shares tendered to employee trust 123 Deferred taxes (344) (1,200) (264) Decrease (increase) in unrealized appreciation of private equity and other 254 18 (72) long-term investments Foreign currency translation adjustment (1) (9) (1) Cumulative effect of a change in accounting principle (1) (Increase) decrease in operating assets: Cash and securities segregated for regulatory purposes or deposited with (1,438) (4,773) 847 clearing organizations Securities purchased under agreements to resell 10,748 (2,878) (17,947) Securities borrowed 9,072 (46,956) (6,381) Receivables from customers 4,251 (320) (2,854) Receivables from brokers, dealers and other (2,540) (3,228) (1,499) Financial instruments owned (4,183) (35,823) (14,815) Other assets and deferred amounts 410 (288) (22) Increase (decrease) in operating liabilities: Securities sold under agreements to repurchase (10,748) 2,878 17,947 Securities loaned (8,493) 24,056 4,220 Payables to customers (526) 4,326 1,571 Payables to brokers, dealers and other (749) 8,798 1,102 Financial instruments sold not yet purchased (1,460) 19,249 4,005 Obligation to return securities received as collateral 1,034

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounts payable and accrued expenses (3,212) 4,193 1,070 Other liabilities 1,504 (12) 522

Net cash used in operating activities $ (5,439) $ (32,446) $ (11,864)

See accompanying notes to consolidated financial statements.

F-7

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000 and 1999

2001 2000 1999

(In millions)

Cash flows from investing activities: Net (payments for) proceeds from: Receivables from parent and affiliates $ (4,309) $ (3,100) $ Capital contribution of CSFB Capital Holdings, Inc. 34 Transfer of CSFB Corp. from parent 2,538 Acquisition of goodwill, net (262) Purchases of private equity and other long-term investments (509) (394) (988) Sales of private equity and other long-term investments 323 777 101 Office facilities 87 (560) (227) Other assets (110) (43) (273)

Net cash used in investing activities (4,484) (1,044) (1,387)

Cash flows from financing activities: Net proceeds from (payments for): Short-term financings 5,027 27,989 12,067 Redemption of preferred trust securities (200) Redemption of Series A preferred stock (200) Redemption of Series B preferred stock (178) Issuance (repayments) of: CSFBdirect Common Stock (2) 346 Subordinated loan agreements (4,150) 4,150 Senior notes 4,654 505 650 Senior secured floating rate notes (296) (155) Subordinated exchange notes (242) Medium-term notes 3,939 1,644 1,183 Structured notes (21) 169 149 Other long-term borrowings (17) 2 Cash dividends (21) (37) (53) Dividend of DLJAM to parent (28) Exercise of stock options 372 35

Increase (decrease) in cash and cash equivalents (1,092) 738 971 Cash and cash equivalents at beginning of period 2,758 2,020 1,049

Cash and cash equivalents at end of period $ 1,666 $ 2,758 $ 2,020

Supplemental Statement of Cash Flows Information Supplemental schedule of noncash investing and financing activities: Capital contribution of CSFB Capital Holdings, Inc. Fair value of assets contributed $ 67 Less: liabilities assumed 33

Capital contribution of CSFB Capital Holdings, Inc. $ 34

Transfer of CSFB Corp. from parent Fair value of assets acquired $ 168,387 Less: liabilities assumed 165,849

Transfer of CSFB Corp. from parent $ 2,538

See accompanying notes to consolidated financial statements.

F-8

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2001

1. Summary of Significant Accounting Policies

The consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries (the "Company"), formerly known as Donaldson Lufkin and Jenrette, Inc and Subsidiaries, ("DLJ Inc."). All significant intercompany balances and transactions have been eliminated. The Company is a wholly owned subsidiary of Credit Suisse First Boston, Inc. ("CSFBI" or the "parent"), an indirect wholly owned subsidiary of Credit Suisse Group ("CSG"). On August 30, 2000, CSG, a corporation organized under the laws of Switzerland, agreed to acquire DLJ, Inc. (the "Acquisition"). Pursuant to a tender offer, a CSG subsidiary purchased all the outstanding shares of DLJ, Inc.'s common stock of the series designated Donaldson, Lufkin & Jenrette, Inc.DLJ Common Stock. After the shares were tendered, the shares held by AXA, S.A., DLJ, Inc.'s ultimate parent at the time, and certain affiliates of AXA, were purchased by the CSG subsidiary. On November 3, 2000 (the "closing date"), DLJ, Inc. became an indirect wholly-owned subsidiary of CSG. Any unexercised or unvested stock options of the Company as of the closing date were converted into CSG stock options. After the Acquisition, DLJ, Inc. changed its name to Credit Suisse First Boston (USA), Inc.

CSG accounted for the Acquisition using the purchase method of accounting. However, since at the time of the Acquisition the Company had significant preferred stock and public debt outstanding, no adjustments of the historical carrying values of the Company's assets and liabilities to reflect the Acquisition were recorded in the Company's historical financial statements. Similarly, although the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to the Company, and thus goodwill associated with the Acquisition will not affect the Company's results of operations.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On November 3, 2000, in conjunction with the closing of the Acquisition, the Company's immediate parent, CSFBI, transferred all of the outstanding shares of CSFB Corp., a U.S. registered broker dealer that was a direct wholly-owned subsidiary of CSFBI, to the Company in exchange for newly issued shares of the Company. This was the final step in a series of transfers (collectively, the "Transfer") that were initiated by CSG and the Company on October 6, 2000 with a view to integrating their respective businesses. The consideration received was the fair market value of the financial assets and liabilities at and on the date of Transfer. As a result of the Transfer, CSFB Corp. became a direct wholly-owned subsidiary of the Company. Since the transfer of CSFB Corp. was between entities under common control, it has been accounted for at historical cost in the accompanying consolidated financial statements. Accordingly, operating results of CSFB Corp. have been included in the Company's consolidated financial statements from the date of the Transfer. The results of operations for CSFB Corp. are included for two months of 2000, and the full year of 2001, therefore results of operations may not be comparable.

The Company is a leading, integrated investment bank serving institutional, corporate, government and individual clients. The Company's businesses include securities underwriting; sales and trading; investment banking; financial advisory services; private equity investments; investment research; full service brokerage services; financial services outsourcing solutions; and derivatives and risk management products.

To prepare consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, management must estimate certain amounts that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses. Actual results could differ from those estimates.

F-9

Substantially all of the Company's financial assets and liabilities, as well as financial instruments with off-balance sheet risk, are carried at market or fair values or are carried at amounts that approximate fair value because of their short-term nature, except for mortgage whole loans, which are carried at the lower of cost or market. Fair value is estimated at a specific point in time, based on relevant market information or the value of the underlying financial instrument.

Cash and cash equivalents include all demand deposits held in banks and certain highly liquid investments with maturities of 90 days or less, other than those held for sale in the ordinary course of business.

Securities sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to resell ("resale agreements") are treated as financing arrangements and are carried at contract amounts that reflect the amounts at which the securities will be subsequently repurchased or resold. Interest on such contract amounts is accrued and is included in the accompanying consolidated statements of financial condition in receivables from and payables to brokers, dealers and other. Certain repurchase and resale agreements are considered operating activities for the purposes of the consolidated statements of cash flows. The Company takes possession of the assets purchased under resale agreements and obtains additional collateral when the market value falls below the contract value. Repurchase and resale agreements are presented net in the consolidated statements of financial condition, if they are with the same counterparty, have the same maturity date, settle through the same clearing bank, and are subject to master netting agreements.

Securities borrowed and securities loaned are financing arrangements that are recorded at the amount of cash collateral advanced or received. For securities borrowed, the Company deposits cash, letters of credit or other collateral with the lender. For securities loaned, the Company receives collateral in cash or other collateral that exceeds the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned daily and obtains or refunds additional collateral, as necessary.

Receivables from and payables to customers include amounts due on cash and margin transactions. For receivables, securities owned by customers are held as collateral totaling $32.4 billion. Such collateral is not reflected in the consolidated financial statements.

Principal securities transactions are recorded on a trade date basis. Financial instruments owned/sold not yet purchased, including securities not readily marketable and all derivative contracts are carried at fair value which is based on quoted market prices or estimated fair value. The determination of fair value is fundamental to our financial condition and results of operations and, in certain circumstances, requires management to make complex judgments. Fair value is based generally on listed market prices or broker or dealer price quotations. If

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document prices are not readily determinable or if liquidating our positions is reasonably expected to affect market prices, fair value is based on either internal valuation models or management's estimate of amounts that could be realized under current market conditions, assuming an orderly liquidation over a reasonable period of time. Certain financial instruments, including OTC derivative instruments, are valued using pricing models that consider, among other factors, contractual and market prices, correlations, time value, credit, yield curve, volatility factors and/or prepayment rates of the underlying positions. The use of different pricing models and assumptions could produce materially different estimates of fair value. Unrealized gains and losses on trading in investment inventories, futures, forwards, interest rate swaps and option

F-10

contracts are reflected in principal transactions-net, in the consolidated statements of operations. Customer securities and commodities transactions are recorded on a settlement date basis with related commission income and expenses reported on a trade date basis.

Mortgage whole loans held for sale are carried at the lower of aggregate cost or fair value. The amount by which aggregate cost exceeds fair value is reflected in principal transactions-net in the consolidated statements of operations. Management determines estimated fair value by taking into consideration outstanding commitments from investors, and the use of discounted cash flows, or model pricing. Purchases and sales of mortgage whole loans are recorded on a settlement date basis. Gains and losses on sales of mortgage whole loans held for sale are recognized in principal transactions-net in the consolidated statements of operations.

All trading derivative instruments including OTC derivative contracts, are carried at market value or estimated fair value with changes in unrealized gains and losses, as well as realized gains and losses included in principal transactions-net, in the consolidated statements of operations. Cash flows from derivative instruments are included as operating activities in the consolidated statements of cash flows.

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS 133 which was amended by Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities Deferral of the Effective Date of FASB Statement No. 133 an amendment of FASB Statement No. 133" ("SFAS 137") and Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" ("SFAS 138").

The standard establishes new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It does not change the accounting for derivative instruments held or issued for trading purposes. All derivatives are required to be recognized as assets or liabilities in the statement of financial condition at fair value.

The recognition of the changes in fair value in a derivative instrument depends upon the intended use and designation of the derivative instrument. If certain conditions are met, entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair values, or cash flows. If the hedged exposure is a fair value exposure, the gain or loss on the derivative instrument is recognized in current earnings together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially in other comprehensive income (a component of equity) and subsequently reclassified into earnings when the forecasted transaction affects earnings. Any amounts excluded from the assessment of hedge effectiveness as well as the ineffective portion of the gain or loss is reported in earnings immediately. If the derivative instrument is not designated as a hedge, the gain or loss is recognized in current earnings.

Investment banking underwriting revenues and fees, net of syndicate expenses, arising from securities offerings in which the Company acts as an underwriter or agent, are recorded in investment banking and advisory in the consolidated statements of operations. Investment banking revenues from fees earned for providing merger and acquisition and other advisory services are recorded in investment banking and advisory in the consolidated statements of operations. Investment banking fees are recorded at the time the transactions are substantially completed. Commissions are recorded in the

F-11

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document consolidated statements of operations on a settlement date basis and, if significant, adjustments are made to a trade date basis.

Assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated at exchange rates prevailing at the date of the consolidated statements of financial condition. Revenues and expenses are translated at average exchange rates during the period. Gains and losses from translating foreign currency financial statements into U.S. dollars are included as accumulated other comprehensive income (loss) in stockholders' equity. Gains and losses from foreign currency transactions are included in the consolidated statements of operations.

Private equity and other long-term investments represent the Company's involvement in private debt and equity investments. These investments generally have no readily available market or may be otherwise restricted as to resale under the Securities Act of 1933; therefore, these investments are carried at estimated fair value. Fair value for private equity and other long-term investments are based upon a number of factors. Publicly traded investments are valued based upon market quotes with appropriate adjustments for liquidity due to holding large blocks and/or for having trading restrictions. Privately held securities are priced taking into account a number of factors such as the most recent round of financings, an earnings multiple analysis using comparable companies or discounted cash flow analysis. Changes in net unrealized appreciation arising from changes in fair value or upon realization are reflected in principal transactions-net, in the consolidated statements of operations.

Office facilities are carried at cost and are depreciated on a straight-line basis over the estimated useful life of the related assets, ranging from three to eight years. Leasehold improvements are amortized over the lesser of the useful life of the improvement or term of the lease. Exchange memberships owned by the Company are included in other assets in the consolidated statements of financial condition and are carried at cost.

Goodwill consists primarily of historical amounts related to CSFB Corp. that arose prior to its transfer to the Company by CSFBI. This goodwill is being amortized over a 20-year life through 2015 at a current annual rate of approximately $26.5 million. Goodwill is reviewed for possible impairment annually. Management does not expect any impairment to goodwill as a result of adopting Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142").

The Company accounts for stock-based compensation in accordance with the intrinsic value-based method in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25"), rather than the fair value-based method in Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation". In accordance with APB No. 25, compensation expense is not recognized for stock options that have no intrinsic value on the date of the grant. There are no charges to earnings upon grant or exercise of fixed stock options. See Note 16.

The Company is included in the consolidated federal income tax return and combined state and local income tax returns filed by CSFBI. CSFBI allocates federal, state and local income taxes to its subsidiaries on a separate return basis. Prior to the Acquisition, the Company filed its own U.S. consolidated federal income tax return.

In September 2000, the FASB issued Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilitiesa

F-12

replacement of FASB Statement No. 125" ("SFAS 140"). While the Company adopted SFAS 140 as of December 31, 2000, certain provisions related to determining whether the transferor has relinquished control of assets and, therefore, determining if the transfer should be accounted for as a sale were adopted for transactions occurring after March 31, 2001. As a result, the Company was required to recognize securities received as collateral in certain securities lending transactions in the consolidated statement of financial condition as of December 31, 2001. See Note 6.

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"), which requires that all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The pooling of interest method will no longer be permitted.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill be reviewed for impairment instead of being amortized to earnings. The statement is effective for fiscal years beginning after December 15, 2001. Management is evaluating the impact of adopting SFAS 142. For the year ended December 31, 2001, the amount of goodwill amortization charged to earnings was $29.7 million.

In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which replaces FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS 144 requires that long-lived assets which are "held for sale" be measured at the lower of carrying amount or fair value less cost to sell and also broadens the reporting requirements for discontinued operations. This statement is effective for fiscal years beginning after December 15, 2001, and is to be applied prospectively. Management is evaluating the impact of adopting SFAS 144.

Certain reclassifications have been made to prior year consolidated financial statements to conform to the 2001 presentation.

2. Restructuring Costs, Merger-Related Costs and Other One Time Charges

As of December 31, 2001, all significant restructuring initiatives contemplated in the Acquisition have been completed. During the year ended December 31, 2001, restructuring costs of approximately $471 million were paid. The remaining balance of $4 million is included in accounts payable and accrued expenses in the consolidated statement of financial condition as of December 31, 2001. All components of restructuring costs were funded from working capital and do not require any incremental funding source.

F-13

The following is an analysis of the change in the restructuring accrual account for the year ended December 31, 2001:

Balance at Amounts Paid Balance at December 31, 2000 in 2001 December 31, 2001

(in million)

Compensation and benefits $ 325 $ 325 $ Occupancy and related costs 76 73 3 Technology costs 74 73 1

$ 475 $ 471 $ 4

Merger-related costs represent retention awards related to the Acquisition, which are being expensed over the vesting period. The vesting period is generally three years. Retention awards of $476 million are included in the consolidated statement of operations for the year ended December 31, 2001. The remaining retention awards of $538 million at December 31, 2001 are expected to be charged against earnings in the following periods:

Amounts to be charged

2002 $ 337 2003 181 2004 20

$ 538

In addition, during the fourth quarter of 2001, the Company incurred one-time charges of $492 million due to staff reductions of approximately 1,500 employees, as part of an extensive cost-reduction program initiated by Credit Suisse Group, our ultimate parent. $405 million of this charge relates to severance and is included in employee compensation and benefits, $87 million relates primarily to fixed assets and lease obligation write-offs and is included in other operating expenses in the consolidated statement of operations for the year ended December 31, 2001. As of December 31, 2001, $65 million in severance payments and $87 million in fixed assets and lease obligation write- offs have been made. The remaining balance of $340 million is included in accounts payable and accrued expenses in the consolidated statement of financial condition at December 31, 2001.

Included in other income for the year ended December 31, 2001 is a gain of approximately $186.1 million on the assignment of the lease and related sale of leasehold improvements on the Company's former headquarters.

3. CSFBdirect Common Stock

CSFBdirect common stock was the series of common stock issued by the Company that tracked the performance of the online brokerage unit, CSFBdirect.

On August 21, 2001, CSFBdirect Acquisition Corp., a wholly owned subsidiary of CSFBI, completed a tender offer to acquire the 18.4 million shares of CSFBdirect common stock owned by the

F-14

public for $6.00 per share in cash, or a total of approximately $110.4 million. The Company subsequently effected a short-form merger to acquire the shares and has deregistered and delisted the shares of CSFBdirect common stock from the New York Stock Exchange and retired all shares. Subsequent to completing the tender offer, CSFBdirect Acquisition Corp. was merged into the Company with the Company as the surviving entity. No earnings per share is presented for the current or prior periods.

4. Related Party Transactions

No dividends were paid to CSFBI in 2001 and 2000. For the years ended December 31, 2000, and 1999, dividends on common stock paid or accrued to AXA Financial, the Company's former parent, were $11.1 million and $22.2 million, respectively.

CSG, through CSFBI, owns all of our outstanding voting common stock. The Company is involved in significant financing and other transactions, and has significant related party balances, with CSG and certain of its subsidiaries and affiliates. The Company enters into these transactions in the ordinary course of business and believes that the terms of these transactions are on market terms that could be obtained from unrelated third parties. At December 31, 2001, our assets related to these transactions totaled $11.2 billion, including securities purchased under agreements to resell of $2.7 billion, securities borrowed of $1.6 billion and loans receivable of $6.9 billion. Our liabilities related to these transactions totaled $36.6 billion, including securities sold under agreements to repurchase of $14 billion, securities loaned of $12.6 billion, payables to brokers, dealers and others of $1.6 billion, loans payable of $7.1 billion, intercompany taxes payable of $730 million and intercompany payables of $598 million. As a consequence, at December 31, 2001, we had net liability exposure to such related parties of $25.4 billion. Revenues and expenses for the years ended December 31, 2001 and 2000 include $177.3 million and $1.5 billion, and $57.5 million and $369.8 million, respectively, resulting from these transactions. Included in these transactions are revenues and expenses

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document resulting from various securities trading, investment banking and financing activities with certain affiliates, as well as fees for administrative services performed by the Company under the terms of a management fee arrangement. Management fees are treated as a reduction of expenses in the consolidated statement of operations.

Pursuant to an agreement, CSFB Corp. sold at cost, without recourse, to CSFBI the right, title and interest in certain assets aggregating $216.2 million and $411.6 million for the years ended December 31, 2001 and 2000, respectively.

The CSG Share Plan (the "Plan") provides for equity-based awards to the Company's employees based on CSG registered shares. Pursuant to the Plan, employees of the Company may be granted, as compensation, stock or other equity based awards. The provisions of the Plan include a provision to deliver CSG registered shares to the employees as consideration for services performed. To the extent that the parent does not require reimbursement from the Company for these awards, amounts are considered a capital contribution to the Company and credited to paid-in capital. Amounts contributed by the parent relating to compensation expense for the years ended December 31, 2001 and 2000, were $919 million and $299 million, respectively.

Certain employees of the Company are awarded CSG stock and or granted options on CSG stock as part of overall compensation. CSG stock awards for year 2001 amounted to $62 million. Approximately 17.5 million options were granted for 2001. Options vest 25% upon issuance, 25% upon

F-15

the first anniversary of the grant, and the remaining 50% the second year. The options are outstanding for 10 years. The strike price for the 2001 options equals the price of CSG stock at grant date. Total estimated fair value of options granted for 2001 was $223 million. No compensation expense was recognized by the Company for these options.

As part of our securitization activities, the Company sells mortgage whole loans to affiliates at market value. The affiliates then securitize these assets. For the year ended December 31, 2001, the Company sold approximately $22 billion of mortgage whole loans and $8.8 billion of other financial instruments to affiliates.

5. Income Taxes

As a result of the Acquisition, the Company is included in a consolidated federal income tax return and combined New York State and New York City income tax returns filed by CSFBI. CSFBI allocates federal, state and city income taxes to its subsidiaries on a separate return basis. Any resulting liability will be paid currently to CSFBI. Any credits for losses will be paid by the CSFBI to the Company to the extent that such credits are for tax benefits that have been utilized in the consolidated federal or combined state and city income tax return. The amount due to CSFBI based on the allocation of tax expense amounted to $275 million and $0.5 million for the years ended December 31, 2001 and 2000 respectively.

In 2000 and 1999, respectively, the Company paid $100.0 million and $273.8 million in Federal income taxes, including $5.1 million in 2000, of Federal income tax equivalents, to AXA Financial, the Company's former parent.

The Company has federal net operating loss carryforwards, which, if not utilized, will expire in 2019 and 2020.

Income taxes (benefits) included in the consolidated statements of operations include the following:

December 31, December 31, December 31, 2001 2000 1999

(In millions)

Current: U.S. Federal $ 290 $ 18 $ 399

Total current 275 33 485

Deferred: U.S. Federal (345) (589) (110) State and local 93 (22)

Total deferred (345) (496) (132)

Total provision (benefit) for income taxes $ (70) $ (463) $ 353

F-16

The provision (benefit) for income taxes includes a benefit of approximately $5.05 million, from the early extinguishment of debt, which is shown as an extraordinary item in the consolidated statement of operations for the year ended December 31, 2000.

The following summarizes the difference between the "expected" tax provision (benefit), which is computed by applying the statutory tax rate to income before provision (benefit), for income taxes and the effective provision (benefit), for income taxes which is computed by using the effective tax rate:

2001 2000 1999

Percent of Percent of Percent of Amount Pre-tax Amount Pre-tax Amount Pre-tax Loss Income Income

(In millions) (In millions) (In millions)

Computed "expected" tax provision (benefit) $ (75) (35.0)% $ (538) (35.0)% $ 334 35.0% Increase (decrease) due to: Dividend exclusion (35) (16.0) (17) (1.1) (8) (0.8) Goodwill and Intangibles 9 4.3 5 0.3 Entertainment expense 10 4.7 4 0.3 4 0.4 Other 31 14.2 16 1.0 (16) (1.7) State and local taxes, net of Federal Income tax effects. (10) (4.8) 67 4.4 39 4.1

Provision (benefit) for income taxes $ (70) (32.6)% $ (463) (30.1)% $ 353 37.0%

Deferred tax assets and deferred tax liabilities are generated by the following temporary differences:

2001 2000

(In millions)

Deferred tax assets: Inventory $ 8 $ 56 Investments 319 237 Other liabilities and accrued expenses, primarily compensation benefits 1,630 1,296 Office facilities 21 11

Total deferred tax assets 2,413 2,055

Deferred tax liabilities: Inventory (58) (40) Investments (63) (74) Office facilities (24) (34) Other (6) (4)

Total deferred tax liabilities (151) (152)

Deferred tax assets net of deferred tax liabilities 2,262 1,903

Valuation allowance for state and local taxes (62) (82) Net deferred tax asset $ 2,200 $ 1,821

F-17

Management has determined that the realization of the recognized deferred tax asset of $2.4 billion at December 31, 2001 is more likely than not, based on anticipated future taxable income. In addition, for federal income tax purposes, the Company has planning strategies available, which may enhance its ability to utilize these tax benefits. However, if estimates of future taxable income are reduced, the amount of the deferred tax assets considered realizable could also be reduced. In addition, due to uncertainty concerning the Company's ability to generate the necessary amount and mix of state and local taxable income in future periods, the Company continues to maintain a valuation allowance against its deferred state and local tax asset in the amount of $62 million, and $82 million at December 31, 2001 and 2000 respectively.

6. Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

Effective December 31, 2000, the Company adopted SFAS 140. As of December 31, 2001 and 2000, the fair market value of assets that the Company has pledged to counterparties were $143.5 billion and $165.6 billion respectively, of which $42.3 billion and $33.8 billion respectively, are included in financial instruments owned. The Company has also received similar assets as collateral where it has the right to re-pledge or sell the assets. As of December 31, 2001 and 2000, the fair market value of the assets pledged to the Company were $135.2 billion and $155.5 billion respectively. The Company routinely re-pledges or lends these assets to third parties.

Certain provisions of SFAS 140 were required to be adopted for transactions occurring after March 31, 2001. Effective April 1, 2001, as a result of the Company's adoption of these provisions of SFAS 140, the Company recognized in the consolidated statement of financial condition securities received as collateral (as opposed to cash) in certain securities lending transactions. At December 31, 2001, as a result of these transactions, the Company recorded obligations to return securities received as collateral of approximately $1.0 billion in the consolidated statement of financial condition.

The Company enters into various transactions whereby commercial and residential mortgages are sold to qualifying entities or special purpose entities and securitized. Beneficial interests in those trusts are sold to investors. The investors and the securitization trusts have no recourse to the Company's assets. At December 31, 2001 the Company did not retain any interest in the securitized assets. During 2001, the Company sold $202.3 million in residential mortgages receivable in securitization transactions. Net revenues recognized on these transactions were $5.7 million for the year ended December 31, 2001.

F-18

Short-term borrowings are generally demand obligations with interest approximating Federal funds rates. Such borrowings are generally used to facilitate the securities settlement process, to finance securities inventories, and to finance securities purchased by customers on margin. At December 31, 2001 and 2000, there were no borrowings secured by Company-owned securities.

Short-term borrowings and repurchase agreements:

Weighted Average December 31, Interest Rates December 31,

2001 2000 2001 2000

(In millions)

Securities sold under repurchase agreements $ 96,101 $ 71,064 1.96% 6.28% Bank loans $ 7,970 $ 19,621 3.19% 7.51% Borrowings from other financial institutions $ 1,200 $ 1,197 3.99% 6.50%

The Company has two commercial paper programs totaling $7.0 billion, which are exempt from registration under the Securities Act of 1933. At December 31, 2001, and 2000, $1.2 billion of commercial paper was outstanding under these programs.

Long-term borrowings:

December 31,

2001 2000

(In millions)

Senior notes 5.875%8.00%, due various dates through 2011 $ 7,548 $ 2,894 Medium-term notes 0.625%7.49%, due various dates through 2021 7,813 3,874 Structured borrowings, 6.909%7.41% due various dates through 2007 297 318 Other 5 22

Subtotal long-term borrowings $ 15,663 $ 7,108 Subordinated Loan Agreements with CSFBI: Revolving Subordinated Loan Agreements due 2003-2008 2,650 Equity Subordination Agreements due 2005-2008 1,500

Subtotal subordinated loan agreements with CSFBI 4,150 Total long-term borrowings $ 15,663 $ 11,258

Current maturities of long-term borrowings $ 4,028 $ 1,485

The subordinated loan agreements at December 31, 2000 were with CSFBI and were at floating interest rates equivalent to those obtained by CSFBI for its subordinated borrowings. The weighted average effective interest rate at December 31, 2000 for these borrowings was 7.13%. The fair value of these borrowings approximates the amounts reflected in the consolidated statements of financial condition.

For the years ended December 31, 2001, 2000, and 1999, interest paid on all borrowings and financing arrangements was $9.8 billion, $8.4 billion, and $4.6 billion, respectively. Interest paid on repurchase agreements was $6.9 billion, $6.2 billion and $3.1 billion, for the years ended December 31,

2001, 2000, and 1999, respectively. At December 31, 2001, the Company had entered into interest rate and currency swaps on $3.3 billion of its senior and medium-term notes (see Note 11). Scheduled maturities of all long-term borrowings are as follows:

December 31,

2001 2000

(In millions)

2001 $ $ 1,485 2002 4,028 1,464 2003 2,389 1,523 2004 1,286 256 2005 1,627 3,124 2006 2,285 39 20072021 4,048 3,367

Total $ 15,663 $ 11,258

2001 Financings:

In November 2000, CSFBI obtained a $3.1 billion loan from the Company that had an original maturity date of November 1, 2001 and bore interest at a market rate based on LIBOR. On April 25, 2001, CSFBI, in a series of transactions, repaid the $3.1 billion loan from the Company with no gain or loss, including accrued interest, and the Company's $4.2 billion subordinated loan agreements with CSFBI referred to above were repaid by the Company in full with no gain or loss, including accrued interest.

In May 2001, the Company replaced its $2.8 billion credit facility with a 364 day $3.5 billion revolving credit facility available to the Company and CSFBI as borrowers. At December 31, 2001, no borrowings were outstanding under this facility.

During the first half of 2001, the Company issued $2.3 billion of medium-term notes off its then existing $3.1 billion shelf.

On June 29, 2001, the Company filed a new shelf registration statement with the Securities and Exchange Commission, which enables the Company to issue up to $5.0 billion of senior and subordinated debt securities, preferred stock and warrants. In the third and early part of 7 the fourth quarter of 2001, the Company issued $2.25 billion of 5 /8% senior notes due 2006 and $2.06 billion of medium-term notes off this shelf registration statement.

In July 2001, the Company established a Euro Medium-Term Note program, which enables it to issue up to $5 billion of notes. This program replaces the $1.0 billion Euro Medium-Term Note program established in April 2000. During 2001, the Company has issued $612.8 million of medium-term notes off this program.

On October 19, 2001, the Company filed a new $10.5 billion shelf registration statement with the Securities and Exchange Commission, which enables the Company to issue up to an additional $10.0 billion of senior and subordinated debt securities and warrants. In the fourth quarter 2001, the

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1 Company issued $3.0 billion of 6 /8% Senior Notes due 2011 and $465.0 million of medium term notes with various maturities dates through 2004 off this effective shelf registration statement.

During 2001, approximately $1.5 billion of medium term notes, $600 million of senior notes, $21 million of structured notes and $4.2 billion of subordinated loan agreements with CSFBI matured or were repaid.

2000 Financings:

In anticipation of the transfer of CSFB Corp., the Company retired $225.0 million of 9.58% Subordinated Exchange Notes for a total consideration of $245.4 million, which includes accrued interest and a premium. As a result of the early redemption of this debt, the Company recorded an after tax loss of $11.7 million as an extraordinary item.

In April, the Company established a Euro Medium-Term Note program which enables it to issue up to $1.0 billion of notes. During 2000, the Company issued $890.5 million medium-term notes with various maturity dates through 2005 of this program.

In February, the Company filed a shelf registration statement with the Securities and Exchange Commission which enables the Company to issue up to $3.1 billion of senior debt, subordinated debt securities, preferred stock and warrants. In 2000, the Company issued $869.0 million medium-term notes with various maturity dates through 2007 and $500.0 million of 8% senior notes with various maturity dates through 2005 under this shelf registration statement.

During 2000, $340.0 million of medium-term notes with various maturity dates through 2005 were issued under a $2.0 billion shelf registration statement established in 1999.

8. Private equity and other long-term investments

Private equity and other long-term investment activities include direct investments and investments in partnerships that make private equity and related investments in various portfolio companies and funds. The Company's subsidiaries act as general partner of many of these private equity partnerships. These investments are carried at estimated fair value in the consolidated financial statements. These instruments are primarily in unlisted or illiquid equity or equity-related securities. At December 31, 2001, the Company had investments of $963 million and had commitments to invest up to an additional $1.7 billion. The cost of these investments was $1.2 billion and $1.0 billion at December 31, 2001, and 2000, respectively. In the years ended December 31, 2001 and 2000, net unrealized appreciation of private equity and other long-term investments decreased by $254 million and $18 million, respectively. Changes in net unrealized (depreciation) appreciation arising from changes in fair value or upon realization are reflected in principal transactions-net in the consolidated statements of operations.

9. Net Capital

The Company's principal wholly owned subsidiaries, Donaldson, Lufkin & Jenrette Securities Corp. ("DLJSC") and CSFB Corp., are registered broker-dealers, registered futures commission merchants and member firms of The New York Stock Exchange, Inc. (the "NYSE"). As such, they are subject to the NYSE's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the alternative

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method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances arising from customer transactions or four percent of segregated funds, whichever is greater. If a member firm's capital is less than four percent of aggregate debit balances, the NYSE may require the firm to reduce its business. If a member firm's net capital is less than five percent of aggregate debit balances, the NYSE may prevent the firm from expanding its business and declaring cash dividends. At December 31, 2001, DLJSC's and CSFB Corp.'s net capital of approximately $1.2 billion and $2.4 billion, respectively, was 19.67 percent and 43.93 percent, respectively, of aggregate debit balances and in excess of the minimum requirement by approximately $1.1 billion and $2.3 billion, respectively. The

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Company's broker-dealer lite entity is also subject to the uniform net capital rule, but calculates it net capital requirements under Appendix F of SEC Rule ISC3-1.

The Company's London-based broker-dealer subsidiaries are subject to the requirements of the Securities and Futures Authority, a self- regulatory organization established pursuant to the U.K. Financial Services Act of 1986. Other U.S. and foreign broker-dealer subsidiaries of the Company are subject to net capital requirements of their respective regulatory agencies. At December 31, 2001, the Company and its broker-dealer subsidiaries complied with all applicable regulatory capital adequacy requirements.

10. Cash and Securities Segregated Under Federal and Other Regulations

In compliance with the Commodities Exchange Act, the Company segregates funds deposited by customers and funds accruing to customers as a result of trades or contracts. As of December 31, 2001 and 2000, cash and securities aggregating $1.03 billion and $985.1 million, respectively, were segregated or secured in separate accounts on behalf of customers.

In accordance with the Securities and Exchange Commission's no action letter dated November 3, 1998, the Company computed a reserve requirement for the proprietary accounts of introducing broker-dealers ("PAIB"). As of December 31, 2001, securities aggregating $40.4 million were segregated on behalf of introducing broker-dealers.

In addition, U.S. Treasury securities with a market value of $5.34 billion as of December 31, 2001 were segregated in a special reserve bank account to benefit customers as required by Rule 15c3-3 of the Securities and Exchange Commission.

11. Derivative Instruments and Hedging Activities

As of December 31, 2001, the Company only has fair value hedges of fixed rate debt for which derivatives hedge the fair value of the debt. These derivatives and other derivatives that do not qualify as hedges under SFAS 133 are carried at fair value with changes in value included in other revenues in the consolidated statements of operations. For the year ended December 31, 2001, the Company recognized an after-tax gain of $5.3 million for such non-trading derivatives.

The effectiveness of hedging relationships is evaluated using quantitative measures of correlation. If a hedge relationship is not found to be highly effective, it no longer qualifies as a hedge and any subsequent gains or losses attributable to the hedged item cease to be recognized, while the subsequent changes in the derivative instrument's fair value are recognized in earnings, in each reporting period. For the year ended December 31, 2001, the amount of hedge ineffectiveness that reduced other

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revenues was $1.0 million, net of tax. There were no gains or losses on derivatives that were excluded from the assessment of effectiveness during the year ended December 31, 2001.

The cumulative effect of adopting SFAS 133 at January 1, 2001, representing the initial revaluation of derivatives and other items as described above, was an after-tax gain of $1.0 million reported in the consolidated statement of operations separately as "cumulative effect of a change in accounting principle" and an after-tax loss of $1.0 million included in other comprehensive income. The Company estimates that $0.4 million of net derivative losses included in other comprehensive income will be reclassified into other revenues within the next twelve months.

The Company also enters into various transactions involving derivatives for trading purposes, hedging or to provide products for its clients. These derivatives include options, forwards, futures and swaps.

Options

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company writes option contracts specifically designed to meet customers' needs or for hedging purposes. These options do not expose the Company to credit risk since the Company, not its counterparty, is obligated to perform. At the beginning of the contract period, the Company receives a cash premium. During the contract period, the Company bears the risk of unfavorable changes in the value of the financial instruments underlying the options ("market risk"). To manage this market risk, the Company purchases or sells cash or derivative financial instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts and options. The counterparties to these purchases and sales are reviewed to determine whether they are creditworthy.

The Company also purchases options for trading purposes. With purchased options, the Company gets the right, for a fee, to buy or sell the underlying instrument at a fixed price on or before a specified date. The underlying instruments for these options include mortgage-backed securities, equities, interest rates and foreign currencies. All options are reported at fair value, with changes in unrealized gains and losses included in principal transactions-net, in the consolidated statements of operations.

Forwards and Futures

The Company enters into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, the Company enters into futures contracts on equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts.

Since forward contracts are subject to the financial reliability of the counterparty, the Company is exposed to credit risk. To monitor this credit risk, the Company limits transactions with specific counterparties, reviews credit limits and adheres to internally established credit extension policies. For futures contracts and options on futures contracts, the change in the market value is settled with a

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clearing broker in cash each day. As a result, the credit risk with the clearing broker is limited to the net positive change in the market value for a single day.

Swaps

The Company's swap agreements consist primarily of interest rate and equity swaps. Interest rate swaps are contractual agreements to exchange interest rate payments based on agreed notional amounts and maturity.

Equity swaps are contractual agreements to receive the appreciation or depreciation in value based on a specific strike price on an equity instrument in exchange for paying another rate, which is usually based on index or interest rate movements.

Quantitative Disclosures for All Trading Derivatives

The fair values of trading derivatives, the majority of which are short-term in duration, outstanding at December 31, 2001 and December 31, 2000 are as follows:

December 31, 2001 December 31, 2000

Assets Liabilities Assets Liabilities

(In millions)

Options $ 968 $ 1,010 $ 1,190 $ 1,065 Forward contracts 1,652 1,647 727 719 Futures contracts 103 20 180 16

Total $ 3,077 $ 2,957 $ 3,041 $ 2,668

These assets and liabilities are included as derivative contracts in financial instruments owned/sold not yet purchased in the consolidated statements of financial condition, respectively. All derivative contracts are carried at fair value with changes in unrealized gains and losses included in principal transactions-net in the consolidated statements of operations.

Prior to the Company's adoption of SFAS 133, swap transactions entered into for non-trading purposes to modify the interest rate and currency exposure associated with certain long-term debt issued by the Company were accounted for on an accrual basis.

12. Financial Instruments With Off-Balance Sheet Risk

In the normal course of business, the Company's customer, trading and correspondent clearance activities include executing, settling and financing various securities and financial instrument transactions. To execute these transactions, the Company purchases and sells (including "short sales") securities, writes options, and purchases and sells forward contracts for mortgage-backed securities and foreign currencies and financial futures contracts. If the customer or counterparty to the transaction is unable to fulfill its contractual obligations, and margin requirements are not sufficient to cover losses, the Company may be exposed to off-balance sheet risk. In these situations, the Company may be required to purchase or sell financial instruments at prevailing market prices, which may not fully cover

F-24

the obligations of its customers or counterparties. This risk is limited by requiring customers and counterparties to maintain margin collateral that complies with regulatory and internal guidelines. Additionally, with respect to the Company's correspondent clearance activities, introducing correspondent brokers are required to guarantee the performance of their customers to meet contractual obligations.

As part of the Company's financing and securities settlement activities, the Company uses securities as collateral to support various secured financing sources. If the counterparty does not meet its contractual obligation to return securities used as collateral, the Company may be exposed to the risk of reacquiring the securities at prevailing market prices to satisfy its obligations. The Company controls this risk by monitoring the market value of securities pledged each day and by requiring collateral levels to be adjusted in the event of excess market exposure.

The Company enters into forward contracts under which securities are delivered or received in the future at a specified price or yield. If counterparties are unable to perform under the terms of the contracts or if the value of securities and interest rates changes, the Company is exposed to risk. Such risk is controlled by monitoring the market value of the securities contracted for each day and by reviewing the creditworthiness of the counterparties.

The settlement of the above transactions is not expected to have a material adverse effect on the Company's consolidated financial statements.

13. Concentrations of Credit Risk

As a securities broker and dealer, the Company is engaged in various securities trading and brokerage activities servicing a diverse group of domestic and foreign corporations, governments, and institutional and individual investors. A substantial portion of the Company's transactions is executed with and on behalf of institutional investors including other brokers and dealers, mortgage brokers, commercial banks, U.S. government agencies, mutual funds and other financial institutions. These transactions are generally collateralized. Credit risk is the potential for loss resulting from the default by a counterparty of its obligations. Exposure to credit risk is generated by securities and currency settlements, contracting derivative and forward transactions with customers and dealers, and the holding in inventory of bonds and/or loans. The Company uses various means to manage its credit risk. The creditworthiness of all counterparties is analyzed at the outset of a credit

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document relationship with the Company. These counterparties are subsequently reviewed on a periodic basis. The Company sets a maximum exposure limit for each counterparty, as well as for groups or classes of counterparties. Furthermore, the Company enters into master netting agreements when feasible and demands collateral from certain counterparties or for certain types of credit transactions.

The Company's customer securities activities are transacted either in cash or on a margin basis, in which the Company extends credit to the customer. The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral to comply with various regulatory and internal guidelines. The Company monitors required margin levels each day and requires customers to deposit additional collateral, or reduce positions, when necessary.

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14. Trust Securities

On August 31, 2001, the Company redeemed at par value ($25 per security) its $200 million 8.42% redeemable preferred trust securities plus accrued and unpaid distributions to the redemption date.

15. Stockholders' Equity

In February 2001, CSFBI transferred CSFB Capital Holdings, Inc. to the Company as a capital contribution of $34 million. CSFB Capital Holdings, Inc. is the parent of Credit Suisse First Boston Capital LLC ("CSFB Capital"), which is a broker-dealer registered with the Securities and Exchange Commission. On May 1, 2001, CSFB Capital received regulatory approval to commence operating as an OTC derivatives dealer pursuant to Appendix F of Rule 15c3-1.

On August 21, 2001, a tender offer was completed for the outstanding shares of CSFBdirect common stock. See Note 3 for discussion of the tender offer and retirement of CSFBdirect common stock, and the sale of certain CSFBdirect entities. As a result of the change in capital structure brought about by the Acquisition by CSFBI of all of the outstanding shares of the Company's voting common stock and acquisition of CSFBdirect non-voting stock, 1,100 shares of the Company common stock were issued to CSFBI.

On November 29, 2001, pursuant to a tender offer, the Company purchased 3.41 million of its 3.5 million shares of Fixed/Adjustable Rate Cumulative Preferred Stock, Series B, (liquidation preference of $50.00 per share) for $52.20 per share plus accrued and unpaid dividends to the purchase date. The remaining 90,000 shares have an aggregate liquidation preference of $4.5 million. The Company recorded the excess of the purchase price over the carrying value of $8 million in retained earnings.

On December 31, 2001, the Company redeemed at par ($50 per security) its 4.0 million shares of Fixed/Adjustable Rate Cumulative Preferred Stock, Series A, plus accrued and unpaid dividends to the redemption date.

In connection with the transfer of CSFB Corp, the Company issued shares of its common stock to CSFBI in exchange for all of the outstanding shares of capital stock of CSFB Corp. The newly issued shares were contributed to Diamond Restructuring Corp. ("DRC"), an indirect subsidiary of CSG. On November 3, 2000, DRC was merged into the Company with the Company continuing as the surviving corporation. In connection with the above, each share of the Company's common stock owned by DRC was canceled, and each share of DRC Common Stock was converted and exchanged for one share of the Company's common stock, par value $0.10 per share. The capital stock of DRC prior to the merger consisted of 1,000 shares held by a subsidiary of CSFBI. This subsidiary was merged with CSFBI, with CSFBI continuing as the surviving corporation. As a result, CSFBI holds all of the shares of the Company's common stock.

In November 2000 the Company transferred DLJ Asset Management Group ("DLJAMG") to CSFBI in the form of a dividend. The dividend was based on the net equity of the transferred business on the closing date. The gross assets and liabilities of DLJAMG were not significant.

The CSG Share Plan Activity includes amounts contributed by CSFBI related to retention awards and other stock awards to be settled in CSG shares.

16. Employee Benefit Plans

The Company merged its defined contribution employee benefit plan into CSFBI's plan ("401K Plan") in December 2000, which covers the Company's domestic full-time and part-time employees. Company contributions to this plan are made in accordance with the underlying 401K Plan documents and were $59.4 million, $8.7 million and $10.4 million for 2001, 2000 and 1999, respectively.

Key employees participate in the CSG Share Plan, which primarily provides for the grant or sale of equity based awards based on, and ultimately settled with, shares of CSG. Such awards consist of incentive awards granted as part of annual compensation or retention awards that are considered compensation in future periods. The plan also includes options as well as other equity based awards.

CSFB Corp. together with certain of its affiliates participates in a non-contributory defined benefit pension plan ("Qualified Plan"). In addition, CSFB Corp. together with certain of its affiliates participates in a non-contributory, non-qualified, unfunded plan ("Supplemental Plan"), which is designed to provide benefits to plan participants whose benefits under the Qualified Plan may be limited by tax regulations. Benefits under these pension plans are based on years of service and employees' compensation. Contributions to the Qualified Plan are made to the extent that such amounts are deductible for federal income tax purposes.

In addition, CSFB Corp., with certain of its affiliates, provides certain unfunded health care benefits for retired employees, (the "Other Plans"). Employees hired by CSFB Corp. prior to July 1, 1998 become eligible for these benefits if they meet minimum age and service requirements and are eligible for retirement benefits. CSFB Corp. has the right to modify or terminate these benefits. At December 31, 2001, the aggregate accumulated postretirement benefit obligation was $35.5 million.

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The following table sets forth the funded status related to CSFB Corp., for the Qualified Plan, the Supplemental Plan and the Other Plans. Amounts shown are as of the valuation date, September 30, 2001.

Supplemental and Qualified Other

(in millions)

Change in Benefit Obligation Benefit obligation acquired at beginning of period $ 338 $ 52 Service cost 21 1 Interest cost 25 4 Amendments 3 (2) Actuarial loss 25 3 Benefits paid (14) (3)

Benefit obligation at end of period $ 398 $ 55

Change in Plan Assets Fair value of assets at beginning of period $ 404 $ Actual return on plan assets (97) Employer contributions 27 1 Benefits paid (14) (1)

Funded Status Funded status $ (78) $ (55) Benefits paid 1 Unrecognized transition (asset)/obligation (6) 2 Unrecognized prior service cost 4 (3) Unrecognized net actuarial (gain)/loss 132 (2)

Prepaid/(accrued) benefit cost $ 52 $ (57)

Weighted Average Assumptions Discount rate 7.00% 7.00% Expected rate of return on plan assets 9.00% N/A Rate of compensation increase 5.50% 5.50% Components of Net Periodic Benefit Cost Service cost $ 21 $ 1 Interest cost 25 4 Expected return on plan assets (33) Amortization of unrecognized transition (asset)/obligation (2) 1 Recognized net actuarial loss (1)

Net periodic benefit cost $ 11 $ 5

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The assumptions used in determining the accumulated postretirement benefit obligation and net periodic postretirement cost for 2001 were a discount rate of 7.50%, and health care trend rates ranging from 6.50% in 2002 for employees under age 65 and 6.10% in 2002 for employees who are age 65 and above to 5.25% in 2003 for both groups. The weighted average compensation increase was 5.50% for the year ended December 31, 2001. CSFB Corp. amortizes the transition obligation (the cumulative actuarial present value of postretirement benefits at the point of adoption) over a 20-year period.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care benefits. A one-percentage point change in assumed health care cost trend rates would have the following effects:

1% Increase 1% Decrease

(in millions)

Effect on benefit obligation $ 4 $ (3) Effect on total of service and interest costs 0.4 (0.3)

The decline in market conditions and falling interest rates combined to produce a shortfall in the value of the Qualified Plan's assets as of September 30, 2001, the "Valuation Date" of the Plan. This decline in Qualified Plan assets along with a decrease in the discount rate used in the calculation of the pension liability resulted in an unfunded accumulated benefit obligation as of the valuation date. In accordance with SFAS No. 87, "Employers' Accounting for Pensions", the Company recorded an after tax charge of $63 million, in Accumulated Other Comprehensive Loss in the consolidated statement of financial condition.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain key employees of the Company also participate in the following compensation and other arrangements: equity investments in selected private equity activities of the Company funded by deferred compensation and recourse and non-recourse leveraged loans provided by the Company; non-qualified deferred compensation plans that include managed investments; and other non-qualified plans that are funded by the Company with insurance contracts. The plans' investments, including the leverage factor, and the amounts accrued by the Company under the plans are both included in the consolidated statements of financial condition. These employee-related assets amounted to $1.3 billion and $952.2 million, respectively, at December 31, 2001 and 2000 and are included in other assets and deferred amounts in the consolidated statement of financial condition. Related liabilities for deferred compensation plans amounted to $1.5 billion and $585.9 million, respectively, at December 31, 2001 and 2000 and are included in other liabilities in the consolidated statements of financial condition. Gains and losses on these assets and liabilities are recorded in compensation expense and other income.

Stock Option Plans

In May 1999, with the issuance of the Tracking Stock, the Company adopted the 1999 CSFBdirect Incentive Compensation Plan (the "CSFBdirect Incentive Plan"). Under this plan, stock options on CSFBdirect stock were granted at a price equal to the fair value of the stock at the date of grant. The options were exercisable for up to ten years from the date of grant and vested in four equal annual installments starting one year from the date of grant. Under the CSFBdirect Incentive Plan, 10,000,000 shares were issuable. See Note 3 for discussion of the tender offer and deregistration of CSFBdirect common stock.

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16. Employee Benefit Plans (Continued)

The following summarizes the stock option activity:

CSFBdirect Common Stock: Outstanding at December 31, 1999 6,197,050 $ 19.76 Granted 3,975,850 $ 8.59 Forfeited (425,329) $ 16.20 Exercised

Outstanding at December 31, 2000 9,747,571 $ 15.37

CSFBdirect Common Stock: Forfeited and Cancelled (9,747,571)

Outstanding at December 31, 2001

At December 31, 1999, no options on CSFBdirect common stock were excercisable. At December 31, 2000, 2,061,049 options on CSFBdirect Common Stock were exercisable at prices ranging from $9.56-$20.00. The weighted average exercise price of such options was $16.89. In connection with the retirement of CSFBdirect Common Stock as described in Note 3, all options were cancelled or settled in cash.

17. Leases, Commitments and Contingent Liabilities

The Company leases office space and equipment under cancelable and non-cancelable lease agreements that expire on various dates through 2021. Rent expense for office space and equipment with lease terms in excess of one year was $327.2 million, $228.6 million and $157.7 million for the years ended December 31, 2001, 2000, and 1999, respectively. Sublease revenue was $10.4 million for the year ended December 31, 2001 and $0.1 million for each of the years ended December 31, 2000 and 1999, respectively.

At December 31, 2001, non-cancelable leases in excess of one year, excluding sublease revenue, escalation and renewal options had the following minimum lease commitments:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Period (In millions) 2002 $ 179 2003 180 2004 178 2005 172 2006 172 20072021 1,776

Total $ 2,657

The Company had commitments to invest on a side-by-side basis with private equity partnerships of approximately $1.7 billion and $1.6 billion at December 31, 2001 and 2000, respectively.

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The Company was contingently liable for letters of credit aggregating approximately $0.6 billion and $1.0 billion at December 31, 2001 and 2000, respectively, which satisfy various collateral requirements.

As of December 31, 2001, the Company had commitments to enter into resale agreements of approximately $3.0 billion.

18. Industry Segment and Geographic Data

The Company operates and manages its businesses through four operating segments: Investment Banking ("IBD"), Equity, Fixed Income ("FID") and Financial Services. In September 2001, we combined the operation and management of our Equity and Fixed Income divisions into the Securities Division.

Such segments are managed based on types of products and services offered and their related client bases. The Company evaluates the performance of its segments based primarily on income (loss) before income taxes and cumulative effect of a change in accounting principle.

The Investment Banking division (IBD) raises and invests capital and provides financial advice to companies throughout the U.S. and abroad. Through IBD, the Company manages and underwrites offerings of securities, arranges private placements, provides client advisory and other services, pursues private equity and private equity investments in a variety of areas, and provides venture capital to institutional investors.

The Equity division trades, conducts research on, originates and distributes equity and equity related derivative securities.

The Fixed Income division (FID) trades, conducts research on, originates and distributes fixed income securities and fixed income related derivatives, and places private debt instruments.

The Financial Services division provides a broad array of services to individual and high-net-worth investors and the financial intermediaries that represent them. Such services include correspondent brokerage services, and research and trading services.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In conjunction with the Acquisition, the Company changed its method of allocation of underwriting revenues and related expenses to operating segments to conform to the CSFB methodology. Accordingly, segment data has been restated to conform to the current method of managing its business. The change in allocation did not have an effect on the Company's consolidated results.

The Company allocates to its segments a pro rata share of certain centrally managed costs such as leased facilities and equipment costs, employee benefits and certain general overhead expenses based upon specified amounts, usage criteria or agreed rates, and allocates interest expense based upon the type of asset. The interest rates applied will also vary depending upon the type and duration of the asset. The segment allocation of some costs, such as incentive bonuses, has been estimated.

The Company has not allocated merger-related costs to its segments since none of these costs represent normal operating costs. Instead, these costs are in the Elimination & Other category. All

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other accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Securities Division Financial Elimination IBD Equity FID Services & Other Total

(In millions)

December 31, 2001: Net revenues from external sources $ 1,853 $ 2,130 $ 865 $ 1,267 $ 209 $ 6,324

Net intersegment revenues 97 (97)

Net interest revenue (38) (157) 1,163 288 (32) 1,224

Total expenses 1,944 1,513 1,809 1,605 892 7,763

Income (loss) before provision (benefit) for income $ (129) $ 460 $ 219 $ 47 $ (812) $ (215) taxes*

Segment assets $ 2,372 $ 40,552 $ 168,412 $ 15,047 $ (8,063) $ 218,320

December 31, 2000: Net revenues from external sources $ 1,960 $ 1,388 $ 223 $ 1,769 $ (36) $ 5,304

Net intersegment revenues 40 (40)

Net interest revenue (42) (6) 192 405 185 734

Total expenses 1,902 1,398 741 1,824 1,695 7,560

Income (loss) before provision (benefit) for income $ 16 $ (16) $ (326) $ 390 $ (1,586) $ (1,522) taxes*

Segment assets $ 1,832 $ 51,490 $ 130,723 $ 22,347 $ 5,827 $ 212,219

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document December 31, 1999: Net revenues from external sources $ 1,902 $ 991 $ 725 $ 1,377 $ (13) $ 4,982

Net intersegment revenues (9) 122 (113)

Net interest revenue (1) 13 162 284 91 549

Total expenses 1,433 914 612 1,481 137 4,577

Income (loss) before provision (benefit) for income $ 468 $ 81 $ 275 $ 302 $ (172) $ 954 taxes*

Segment assets $ 2,273 $ 5,326 $ 74,885 $ 30,586 $ (4,058) $ 109,012

* Before cumulative effect of a change in accounting principle and extraordinary items.

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The following is a reconciliation of the Company's reported revenues and income before provision for income taxes and cumulative effect of a change in accounting principle to the Company's consolidated totals:

December 31,

2001 2000 1999

(In millions)

Revenues: Total net revenues for reported segments $ 7,468 $ 5,929 $ 5,566 All other revenues 177 249 (5) Consolidation/elimination (1) (97) (140) (30)

Total consolidated net revenues $ 7,548 $ 6,038 $ 5,531

Income (loss) before provision (benefit) for income taxes, cumulative effect of a change in accounting principle and extraordinary items: Total income (loss) for reported segments $ 597 $ 64 $ 1,126 All other loss (2) (715) (1,383) (25) Consolidation/elimination (1) (97) (203) (147)

Total income (loss) before provision (benefit) for income taxes and cumulative $ (215) $ (1,522) $ 954 effect of a change in accounting principle

December 31,

2001 2000 1999

(In millions)

Segment assets:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Total assets for reported segments $ 226,383 $ 206,392 $ 113,070 All other assets 5,680 7,469 2,616 Consolidation/elimination (1) (13,743) (1,642) (6,674)

Total segment assets $ 218,320 $ 212,219 $ 109,012

(1) Consolidation/elimination represents intercompany accounts/intersegment revenue charges that are eliminated in consolidation.

(2) Represents certain one time charges, restructuring and merger related charges not allocated to segments.

The Company's principal operations are located in the United States. The Company maintains offices in Europe, Latin America and Asia. Historically, the majority of foreign business was done through the London offices. The Company's foreign revenues are not significant.

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The following are net revenues by geographic region:

December 31,

2001 2000 1999

(In millions)

United States $ 7,472 $ 5,126 $ 4,749 Foreign 76 912 782

Total $ 7,548 $ 6,038 $ 5,531

19. Legal Proceedings

The Company is involved in a number of judicial, regulatory and arbitration proceedings (including those described below and actions that have been separately described in previous filings) concerning matters arising in connection with the conduct of our businesses. Some of the actions have been brought on behalf of various classes of claimants and seek damages of material and indeterminate amounts. We believe, based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not have a material adverse effect on our financial condition but might be material to operating results for any particular period, depending, in part, upon the operating results for such period.

National Gypsum Company Litigation

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document others were named as defendants in a second action in a Texas state court brought by the NGC Settlement Trust. The allegations of these complaints are substantially similar to those of the earlier class action pending in Texas state court.

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In re Issuer Plaintiff Initial Public Offering Fee Antitrust Litigation

In February 1999, the Court consolidated the various cases in a single litigation, captioned In re Public Offering Fee Antitrust Litigation and, on April 29, 1999, CSFBC and other defendants filed a motion to dismiss the complaint as a matter of law. Meanwhile, beginning in August 2000, several other complaints were filed on behalf of issuers of stock in IPOs containing the same allegations of an industry-wide conspiracy to fix IPO underwriting fees and by order, dated April 10, 2001, the Court consolidated the issuer complaints.

On February 14, 2001, the Court dismissed the purchaser plaintiffs' claims on the ground that those plaintiffs lacked legal standing to assert antitrust claims. The Court did not grant them leave to replead, and subsequently denied the purchaser plaintiffs' motion to vacate or reconsider the ruling. The purchaser plaintiffs now are appealing the Court's dismissal to the United States Court of Appeals for the Second Circuit.

On July 6, 2001, the IPO issuer plaintiffs filed a consolidated issuer complaint in the U.S. District Court for the Southern District of New York, which names numerous defendants including CSFB Corp. and DLJ Inc., under the caption In re Issuer Plaintiff Initial Public Offering Fee Antitrust Litigation. The defendants have moved to dismiss the consolidated issuer complaint. This motion remains pending before the Court. Our entities intend to defend themselves vigorously against all of the allegations in this matter.

AmeriServe Food Distribution Inc. Litigation

On or about January 31, 2000, AmeriServe Food Distribution, Inc. ("AmeriServe"), its parent company, Nebco Evans Holding Company, and related corporations filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Since then, the Bankruptcy Court has confirmed a liquidation plan, and the plan has been consummated. Pursuant to the plan, substantially all the assets of AmeriServe were sold and a "Post-Confirmation Estate" has been created. The Post-Confirmation Estate is authorized to assert a wide assortment of claims against various parties for the benefit of various creditors. On or about December 8, 1999, DLJ Bridge Finance, Inc., wholly-owned by a CSFB, Inc. subsidiary, through a subsidiary, made a $100 million secured loan to AmeriServe. The loan subsequently was transferred to DLJ Capital Funding, also wholly-owned by a CSFB, Inc. subsidiary, which has filed a claim with respect to the loan in the Bankruptcy Court proceeding. Pursuant to the plan, funds for payment of this claim have been escrowed pending allowance of the claim by the Bankruptcy Court.

On or about November 28, 2000, following discovery from DLJ and certain affiliates concerning their relationships with AmeriServe and related companies, holders of certain AmeriServe secured

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document notes issued on or about October 1, 1999, commenced an adversary proceeding in the Bankruptcy Court, seeking under the Bankruptcy Code to subordinate DLJ Capital Funding's claim to the secured noteholders' claims. On April 4, 2001, the Court denied a motion to dismiss filed by DLJ Capital Funding and ordered plaintiffs to file an amended complaint setting forth with specificity their claims against DLJ Capital Funding. An amended complaint was filed and, on May 30, 2001, DLJ Capital Funding moved to dismiss the amended complaint. Resolution of that motion is pending. DLJ Capital Funding intends to defend itself vigorously against all of the allegations contained in the complaint.

On December 14, 2000, Morgens Waterfall Holdings, LLC ("Morgens") filed a complaint in the U.S. District Court for the Southern District of New York against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and entities. The complaint asserted common law and federal securities law claims arising out of alleged misrepresentations and omissions relating to Morgens' purchases of secured AmeriServe notes issued on or about October 1, 1999. The complaint sought, among other things, compensatory and punitive damages, as well as rescission and declaratory relief. On January 24, 2001, Morgens and certain affiliated entities filed an amended complaint asserting substantially similar claims. On February 1, 2001, the District Court dismissed the amended complaint for failure to meet certain pleading standards with leave to replead within 20 days. On February 20, 2001, Morgens filed a second amended complaint, which omits certain previously asserted claims but is similar in substance to Morgens' first amended complaint. On April 6, 2001, the defendants answered the second amended complaint and asserted counterclaims against Morgens seeking, among other things, compensatory damages for breach of contract; Morgens answered the counterclaims. Our entities intend to defend themselves vigorously against all of the allegations contained in the second amended complaint. See Note 21 for updates on legal proceedings.

On December 27, 2000, GSC Recovery, Inc. ("GSC"), filed a complaint in the Superior Court of New Jersey, Law Division, Morris County, against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors, and other individuals and entities seeking compensatory and punitive damages. The complaint arose out of alleged misrepresentations and omissions relating to GSC's purchases of certain unsecured AmeriServe notes issued in 1997 and 1998. On March 6, 2001, the DLJ entities named as defendants moved to dismiss the complaint. The Court subsequently granted in part, and denied in part, the motion to dismiss. The plaintiffs moved the Court to reconsider its decision, but the Court denied the motion. GSC filed a second amended complaint on August 10, 2001, and the DLJ entities served an answer to the second amended complaint on September 4, 2001. Our entities intend to defend themselves vigorously against all of the allegations contained in the complaint.

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On November 8, 2001, Ronald A. Rittenmeyer, in his capacity as Plan Administrator of AFD Fund, the Post-Confirmation Estate of the bankruptcy cases of AmeriServe Food Distribution Inc., and its affiliates filed a complaint in the County Court of Dallas, Texas against DLJ Inc., DLJSC, Donaldson, Lufkin & Jenrette Merchant Banking, Inc., Donaldson, Lufkin & Jenrette Merchant Banking Partners, L.P., Donaldson, Lufkin & Jenrette Merchant Banking Partners II, L.P., Donaldson, Lufkin & Jenrette Merchant Banking II, Inc., Credit Suisse First Boston (USA), Inc., and certain officers, directors and other individuals and entities. Plaintiff asserts breach of fiduciary duty claims arising out of the acquisition of ProSource by AmeriServe in 1998. The CSFB/DLJ defendants filed answers generally denying all plaintiff's allegations on January 15, 2002; our two individual defendants also filed special appearances denying personal jurisdiction. Our entities intend to defend themselves vigorously against all of the allegations contained in the complaint.

Independent Energy Holdings PLC Litigation

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Beginning on September 6, 2000, DLJSC, Donaldson, Lufkin & Jenrette International ("DLJI") and certain other individuals and entities were named as defendants in six putative class actions filed in the U.S. District Court for the Southern District of New York on behalf of a purported class of persons who purchased or acquired American Depository Shares ("ADS") of Independent Energy Holdings PLC ("Independent Energy") in Independent Energy's secondary offering of $200 million of ADS in March 2000. The complaints, which were substantially the same, alleged violations of the federal securities laws against DLJSC, as one of the underwriters of the ADS, and DLJI, as a financial advisor to Independent Energy that sold shares in connection with the secondary offering, arising out of alleged misrepresentations and omissions contained in the registration statement and prospectus for the secondary offering of ADS. The complaints seek, among other things, compensatory damages, rescission, and equitable and/or injunctive relief.

On December 15, 2000, the complaints pending in the Southern District Court were consolidated; a consolidated amended complaint was filed on February 16, 2001, and a second amended consolidated complaint was later filed. On April 19, 2001, the DLJ entities named as defendants moved to dismiss the second amended consolidated complaint. On July 26, 2001, the Court rendered a decision granting in part, and denying in part, the DLJ entities' motion. The Court held that plaintiffs' second amended consolidated complaint states a claim against DLJSC and DLJI under the Securities Act of 1933 and against DLJSC under the Exchange Act of 1934 and also states a control person liability claim against DLJ under the Securities Act. On August 23, 2001, the DLJ entities answered the second amended consolidated complaint. On September 28, 2001, plaintiffs moved to certify a class in this matter. Our entities intend to defend themselves vigorously against all of the allegations in this matter.

Litigation Related to CSFB's Acquisition of DLJ

In September 2000, DLJSC, DLJ and its directors, and Credit Suisse Group, along with certain other entities, were named as defendants in a putative class action commenced in the U.S. District Court for the Southern District of New York brought on behalf of a purported class of public shareholders of DLJdirect (which was subsequently renamed CSFBdirect). The complaint alleges, among other things, that certain statements in the 1999 prospectus issued in connection with the initial public offering of DLJdirect shares were allegedly false and misleading in their description of the rights attributable to the DLJdirect shares; that the tender offer materials disseminated in connection with

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Credit Suisse Group's acquisition of DLJ (the "CSG Transaction") were false and misleading in allegedly failing to describe certain rights to the DLJdirect shares in connection with the CSG Transaction, among other things; and that these alleged misstatements constitute violations of the federal securities laws. The complaint further alleges that defendants violated their fiduciary duties under state law by failing to provide for the purchase of DLJdirect shares as part of the CSG Transaction. The complaint seeks, among other things, an award of rescission or damages in an unspecified amount, a declaration that defendants have violated the federal securities laws and their state law fiduciary duties, and unspecified corrective disclosures. On February 23, 2001, the defendants moved to dismiss the complaint and, on October 5, 2001, the Court dismissed the complaint in its entirety.

On or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of DLJdirect common stock against DLJ and others were consolidated and captioned In re CSFBdirect Tracking Stock Shareholders Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that alleged that the proposed offer by CSFB (USA), Inc., announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirect (renamed from DLJdirect) at a price of $4 per share was unfair. Subsequent to the proposed offer to acquire all of the publicly owned CSFBdirect common stock for $4 per share, an additional ten putative class actions were filed in the Delaware Chancery Court alleging that the proposed offer was unfair. Those actions were then consolidated with the In re CSFBdirect Tracking Stock Shareholders Litigation. On July 10, 2001, the parties to the consolidated cases entered into a Memorandum of Understanding providing for the settlement, pending Court approval, of those cases with no admission of liability by defendants. See Note 21 for updates on legal proceedings.

Governmental/Regulatory Inquiries And Litigation Relating To IPO Allocation Practices

Governmental/Regulatory Inquiries Relating To IPO Allocation Practices

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CSFB Corp. has been the subject of an investigation in connection with certain of its alleged practices as to the allocation of shares in initial public offerings ("IPOs") and subsequent securities transactions and commissions by the NASD Regulation, Inc. ("NASDR"), the U.S. Attorney's Office for the Southern District of New York (the "U.S. Attorney, S.D.N.Y.") and the Securities and Exchange Commission (the "SEC"). To the Registrant's knowledge, several other investment banks have been the subjects of investigations regarding similar matters. These inquiries have principally focused on the allocation practices with respect to IPOs in 1999 and 2000, and, in particular, the receipt of allegedly excessive commissions on secondary trades from certain customers that received allocations of shares and the relationship between the payment of commissions and the receipt of IPO allocations. On January 22, 2002, CSFB Corp. fully resolved the investigation by the SEC, which filed a Complaint, Consent and Final Judgment in the U.S. District Court for the District of Columbia. CSFB Corp. has also entered into a Letter of Acceptance, Waiver and Consent with the NASDR (the "AWC"), which fully resolves the NASDR investigation. Both documents charge CSFB Corp. with violations of certain NASDR Conduct Rules and record keeping regulations and the NASDR document also charges CSFB Corp. with failure to supervise. Neither document made any allegations or findings of fraudulent conduct by CSFB Corp. Pursuant to these settlements, CSFB Corp. agreed to pay a total of $100 million. This amount includes a $30 million civil penalty to be divided between the SEC and

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NASDR, and a $70 million payment to be made to the U.S. Treasury and NASDR, representing disgorgement as a result of the conduct described by the SEC and NASDR in the complaint and AWC. As part of these settlements, CSFB has adopted and agreed to follow new policies and procedures relating to the allocation of shares in IPOs. CSFB Corp. was also enjoined as part of these settlements from prescribed violations of the NASD Conduct Rules and record keeping requirements and was censured by the NASDR. CSFB Corp. settled these investigations without admitting or denying the allegations in the Complaint and AWC. CSFB Corp. has also been separately informed that the U.S. Attorney, S.D.N.Y. has closed its investigation of CSFB Corp. in connection with its practices of allocating shares of IPO securities during the period from 1999 through 2000 without bringing any action.

Litigation Relating To IPO Allocation Practices

Since January 2001, CSFB Corp., DLJSC and several other investment banks, have been named as defendants in a large number of putative class action complaints filed in the U.S. District Court for the Southern District of New York, alleging various violations of the federal securities law resulting from alleged material omissions and misstatements in registration statements and prospectuses for the IPOs and with respect to transactions in the aftermarket. These lawsuits contain allegations that the registration statement and prospectus either omitted or misrepresented material information about commissions paid to CSFB Corp., DLJSC or the other investment banks and aftermarket transactions by certain customers that received allocations of shares in the IPOs. In certain complaints, CSFB Corp., DLJSC or the other investment banks are also alleged to have issued misleading analyst research reports that failed to disclose the alleged allocation practices and that analysts were allegedly subject to a conflict of interest resulting from the manner in which bonus compensation was paid. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

Since March 2001, CSFB Corp. and several other investment banks have been named as defendants in several putative class actions filed with the U.S. District Courts for the Southern District Court of New York, alleging violation of the federal and state antitrust laws in connection with alleged practices in allocation of shares in IPOs in which such investment banks were a lead or co-managing underwriter. The amended complaint in these lawsuits, which have now been consolidated into a single action, alleges that the underwriter defendants (CSFB Corp. is defined to include DLJSC in the amended complaint) have engaged in an illegal antitrust conspiracy to require customers, in exchange for IPO allocations, to pay non-competitively determined commissions on transactions in other securities, to purchase an issuers' shares in follow-up offerings, and to commit to purchase other less desirable securities. The complaint also alleges that the underwriter defendants conspired to require customers, in exchange for IPO allocations, to agree to make aftermarket purchases of the IPO securities at a price higher than the offering price, as a precondition to receiving an allocation. These alleged "tie-in" arrangements are further alleged to have artificially inflated the market price for the securities. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On May 25, 2001, CSFB Corp. was sued in the U.S. District Court for the Southern District of Florida by a putative class of issuers in IPOs in which CSFB Corp. acted as lead manager on the grounds that CSFB Corp. underpriced IPOs, accepted excessive brokerage commissions in exchange for allocations in IPOs, required investors to give CSFB Corp. a share of IPO profits, and used IPO

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allocations to obtain additional investment banking business, all in breach of the underwriting agreement. This case was subsequently transferred to the U.S. District Court for the Southern District of New York. CSFB Corp. intends to defend itself vigorously against all of the claims asserted in this matter. See Note 21 for updates on legal proceedings.

On August 2, 2001, CSFB Corp. and five other investment banks were named as defendants in a putative class action filed with the U.S. District Court for the Southern District of New York, alleging violations of the federal securities laws resulting from the issuance by defendants' research analysts of research reports on certain internet and technology company stocks and, reports included "buy" recommendations that allegedly increased or sustained the trading price of the stocks, that allegedly were materially misleading because they did not disclose the alleged financial interests of the analyst or the defendant investment banks in the subject internet or technology company. On November 9, 2001, CSFB Corp. was served with the complaint in this action. CSFB Corp. intends to defend itself vigorously against all of the claims asserted in this matter.

20. Other Event

As a result of the terrorist attacks in New York City on September 11, 2001, the Company has identified approximately $40 million of direct losses consisting primarily of leasehold improvements, furniture and fixtures and equipment at Five World Trade Center and other incremental expenses. The Company has received $20 million as an advance against these losses from insurance carriers in September and October, 2001 of which $17 million are recoverable costs to the Company. The results of operations for the year ended December 31, 2001 include $23 million of direct costs, which have not yet been recovered from insurance carriers. Certain other losses, including costs related to the recreation of lost data, relocation of operations, etc. have not been separately identified and will be included in the results of operations in the period in which they are incurred. The Company is in the process of assessing whether any of these losses qualify for recovery under any of CSFBI's insurance policies.

21. Subsequent Events (Unaudited)

On January 31, 2002, we acquired the assets of Holt Value Associates, L.P. ("Holt"), a leading provider of independent research and valuation services to asset managers. Holt will be integrated with CSFBEdge, CSFB's online research and valuation database service.

In February 2002 the Company sold three of its broker-dealers, CSFBdirect, Inc., CSFBdirect Ltd. and Autranet, Incorporated. As a result, the Company expects to record a pre-tax gain of approximately $525 million in the first quarter of 2002.

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Updates to Legal proceedings

With respect to the NGC litigation, in February 2002, the Texas state court granted final approval to the settlement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document With respect to the Morgens litigation, our entities filed summary judgment motions in February 2002; plaintiffs cross-moved for partial summary judgment. The Court subsequently granted our motion in part, dismissing entirely from the case all of our entities except DLJSC and denied plaintiffs' motion in full. Trial against DLJSC is scheduled to commence on April 15, 2002. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

With respect to the Conseco litigation, the parties entered into an agreement, dated March 15, 2002, to settle this case which agreement has now been approved by the Bankruptcy Court.

With respect to the In re CSFBdirect Tracking Stock Shareholders Litigation, on March 18, 2002, the Court ordered that a hearing be scheduled for June 6, 2002 to determine whether the settlement should be approved.

With respect to the action brought against CSFB Corp. by a putative class of issuers in IPOs which is now pending in the U.S. District Court for the Southern District of New York, an amended complaint was filed February 4, 2002 alleging, among other claims, a claim for indemnification in the aforementioned IPO securities cases pending in the U.S. District Court for the Southern District of New York.

NewPower Holdings, Inc. (Enron-related) Litigation

Since February 27, 2002, Credit Suisse First Boston, Inc., ("CSFBI"), DLJSC, CSFBdirect and certain other investment banks, along with NewPower Holdings, Inc. ("NewPower") and certain of NewPower' s directors, have been named as defendants in four putative class actions filed with the U.S. District Court for the Southern District of New York. One of our employees is a director of NewPower and is named in the complaints. These complaints allege violations of federal securities law due to alleged material misrepresentations in, and omissions of material fact from, the Prospectus and Registration Statement issued in connection with NewPower's October 5, 2000 IPO, and for alleged misrepresentations and omissions regarding NewPower after the IPO. According to the complaints, NewPower was formed by Enron Corp. ("Enron") in 1999, and Enron remains NewPower's controlling shareholder. Our entities intend to defend themselves vigorously against all of the claims asserted in these complaints.

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22. Quarterly Data (Unaudited)

Income (Loss) Before Total Net Net Provision For Revenues Income(Loss) Income Taxes **

(in millions)

2001: First quarter $ 2,511 $ 459 $ 303 Second quarter 2,127 97 69 Third quarter 1,333 (605) (398) Fourth quarter * 1,577 (166) (118)

Total year $ 7,548 $ (215) $ (144)

2000:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document First quarter $ 1,827 $ 389 $ 245 Second quarter 1,591 258 162 Third quarter 1,339 79 50 Fourth quarter * 1,281 (2,248) (1,533)

Total year $ 6,038 $ (1,522) $ (1,076)

* The fourth quarter of 2001 includes certain one-time charges of $492 as described in Note 2. The fourth quarter of 2000 includes an extraordinary item representing the loss on early extinguishment of debt of $11.7 million, net of tax benefit of $5.0 million.

** Before cumulative effect of a change in accounting principle in connection with the adoption of SFAS 133 and extraordinary items.

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SCHEDULE I CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Financial Condition (In millions, except share data)

December 31,

2001 2000 ASSETS Cash and cash equivalents $ 4 $ 57 Receivables from brokers, dealers and other 52 87 Derivative contracts 108 Private equity investments 44 41 Receivable from affiliates and parent 7,623 3,100 Receivables from subsidiaries 11,208 6,653 Investment in subsidiaries, at equity 5,584 6,387 Net federal deferred tax assets 1,191 1,115 Federal income taxes receivable 78 490 Other assets and deferred amounts 864 808

Total Assets $ 26,756 $ 18,738

LIABILITIES AND STOCKHOLDERS' EQUITY Commercial paper and short-term borrowings $ 2,200 $ 1,166 Derivative contracts 58 Accounts payable and accrued expenses 1,914 2,646 Other liabilities 330 1,446 8.42% Junior subordinated debentures, held by a subsidiary trust 206 Other long-term borrowings 15,366 6,768 Stockholders' Equity: Preferred Stock, 50,000,000 shares authorized:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Series A Preferred Stock, at $50.00 per share liquidation preference (4,000,000 shares issued and 200 outstanding at December 31, 2000) Series B Preferred Stock, at $50.00 per share liquidation preference (90,000 and 3,500,000 shares 5 175 issued and outstanding at December 31, 2001 and 2000, respectively) Common stock, 1,500,000,000 shares authorized: CSFB (USA) Inc. Common Stock ($0.10 par value; 500,000,000 shares authorized; 1,100 shares issued and outstanding) CSFBdirect Common Stock ($0.10 par value; 500,000,000 shares authorized; 18,400,000 shares issued and outstanding at December 31, 2000; 84,250,000 notional shares at December 31, 2000, in 2 respect of CSFB (USA)'s retained interest) Paid-in capital 6,056 5,072 Retained earnings 899 1,064 Accumulated other comprehensive loss (72) (7)

Total stockholders' equity 6,888 6,506

Total Liabilities and Stockholders' Equity $ 26,756 $ 18,738

See accompanying notes to condensed financial statements.

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CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Operations (In millions)

Years Ended December 31,

2001 2000 1999 Revenues: Principal transactions-net $ 26 $ $ Investment banking and advisory 2 Interest and dividends net of interest expense of $391, $459 and $297, respectively (111) 407 25 Other 166 79 85

Total net revenues 83 486 110

Expenses: Employee compensation and benefits 136 335 272 Merger-related costs 162 Other operating expenses 82 269 31

Total expenses 218 766 303

Loss before income tax benefit, equity in undistributed net income of subsidiaries, extraordinary (135) (280) (193) item and cumulative effect of a change in accounting principle

Income tax benefit 33 397 209

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income (loss) before equity in undistributed net income (loss) of subsidiaries, extraordinary item (102) 117 16 and cumulative effect of a change in accounting principle

Equity in undistributed net income (loss) of subsidiaries (44) (1,181) 585

Income (loss) before extraordinary item and cumulative effect of a change in accounting principle (146) (1,064) 601

Loss on early extinguishment of debt, net of tax benefit of ($5) (12)

Income (loss) before cumulative effect of a change in accounting principle (146) (1,076) 601

Cumulative effect of a change in accounting principle 2

Net income (loss) $ (144) $ (1,076) $ 601

See accompanying notes to condensed financial statements.

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CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Cash Flows (In millions)

Years Ended December 31,

2001 2000 1999 Net cash (used in) provided by operating activities $ (1,027) $ (1,530) $ 785

Cash flows from investing activities: Net proceeds from (payments for): Note receivable from parent 3,100 (3,100) Receivable from affiliates (7,623) Transfer of CSFB Corp. from parent 2,538 Capital contribution of CSFB Capital Holdings, Inc. 34 Dividends from affiliates 875 508 Investment in subsidiaries (72) (1,213) (892) Allocated equity to CSFBdirect (234) Other assets 183 (259) (15)

Net cash used in investing activities (3,503) (1,526) (1,141)

Cash flows from financing activities: Net proceeds from (payments for): Short-term financings 1,034 (166) 1,097 Redemption of 8.42% junior subordinated debentures (206) Issuance (repayments) of: CSFBdirect Common Stock (2) 346

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Series A preferred stock (200) Series B preferred stock (178) Senior notes (200) 504 650 Subordinated exchange notes (242) Other long-term debt 5 Medium-term notes 3,939 1,644 1,183 Global floating rate notes 4,854 1 Subordinated loan from subsidiaries (4,623) (469) 48 Dividends paid (21) (37) (53) Dividend of DLJAMG to parent (29) Exercise of stock options 372 35 Receivables from subsidiaries 75 587 (2,708)

Net cash provided by financing activities 4, 477 2,165 598

Increase (decrease) in cash and cash equivalents (53) (891) 242

Cash and cash equivalents at beginning of year 57 948 706

Cash and cash equivalents at end of year $ 4 $ 57 $ 948

See accompanying notes to condensed financial statements.

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CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Notes to Condensed Financial Statements December 31, 2001

1. Basis of Presentation

The condensed financial statements of CSFB (USA) Inc. ("Parent Company") should be read in conjunction with the consolidated financial statements of Credit Suisse First Boston (USA), Inc. and subsidiaries (the "Company") and the notes thereto. Investments in subsidiaries are accounted for under the equity method.

2. CSFBdirect Common Stock

CSFBdirect common stock was the series of common stock issued by the Parent Company that tracked the performance of the online brokerage unit, CSFBdirect.

On August 21, 2001, CSFBdirect Acquisition Corp., a wholly-owned subsidiary of CSFBI, completed a tender offer to acquire the 18.4 million shares of CSFBdirect common stock owned by the public for $6.00 per share in cash, or a total of approximately $110.4 million. The Parent Company subsequently effected a short-form merger to acquire the shares and has deregistered and delisted the shares of CSFBdirect common stock from the New York Stock Exchange and retired all shares. Subsequent to completing the tender offer, CSFBdirect Acquisition Corp. was merged into the Parent Company with the Parent Company as the surviving entity. No earnings per share data is being presented for the current or prior periods.

In 2002 the Company sold three of its broker-dealers, CSFBdirect, Inc., CSFBdirect Ltd. and Autranet, Incorporated.

Receivables from subsidiaries include $1.0 billion and $1.2 billion loaned under master note agreements at December 31, 2001 and 2000, respectively. Substantially all receivables from subsidiaries provide for interest based on federal funds rates.

The amount of cash dividends paid to the Parent Company by its consolidated subsidiaries amounted to $875.0 million and $508.5 million for the years ended December 31, 2001 and 2000, respectively. There were no cash dividends paid to the Parent Company by its consolidated subsidiaries in 1999. There are no restrictions on the payment of dividends, except for those stipulated in certain debt agreements and in those applicable to brokers and dealers which provide for certain minimum amounts of capital to be maintained to satisfy regulatory requirements in the Company's domestic and foreign broker-dealer subsidiaries. Under certain circumstances, the amount of excess capital that can be withdrawn is limited. The regulatory requirements are designed to measure the general financial integrity and liquidity of broker-dealers and provide minimum acceptable net capital levels to satisfy commitments to customers. Unless an adequate level of capital is maintained, regulated broker-dealer subsidiaries would be prohibited from paying dividends to the Parent Company.

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4. Long-term Borrowings

The Parent Company finances certain of its activities through long-term borrowing arrangements. At December 31, 2001 there were current maturities of long-term borrowings of $4.0 billion. Long-term borrowings consist of the following:

December 31,

2001 2000

(In millions)

Senior notes, 5.875%8.00% due various dates through 2008 $ 7,548 $ 2,894 Medium-term notes, 0.625%7.49% due various dates through 2016 7,813 3,874 Other 5

Total long-term borrowings $ 15,366 $ 6,768

For a detailed description of the Parent Company's long-term borrowings, see Note 7 of the Notes to the Company's consolidated financial statements.

Scheduled maturities of long-term borrowings are as follows:

December 31,

2001 2000

(In millions)

2001 $ $ 1,429 2002 4,019 1,454 2003 2,357 991 2004 1,143 130 2005 1,553 1,548 2006 2,247 20072021 4,047 1,216

In May 2001, the Parent Company replaced its $2.8 billion credit facility with a 364 day $3.5 billion revolving credit facility available to the Company and CSFBI as borrowers. At December 31, 2001, no borrowings were outstanding under this facility.

5. Income Taxes

The Parent Company's subsidiaries record income taxes as if each subsidiary files a separate income tax return. The tax rates used in the computation for such subsidiaries are generally higher than the Company's overall consolidated effective tax rate. The income tax benefit recorded by the Parent Company results from the Company's overall lower consolidated effective tax rate and the ability of the Parent Company to utilize tax attributes related to its subsidiaries and affiliates.

6. Contingent Liabilities

From time to time the Parent Company issues guarantees of the obligations of certain subsidiaries. The amounts of such items in the aggregate are not considered significant and management does not anticipate, as of December 31, 2001, losses as a result of these guarantees.

F-47

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, hereunto duly authorized, on the 29th day of March, 2002.

CREDIT SUISSE FIRST BOSTON (USA), INC.

/s/ DAVID C. FISHER By: Name: David C. Fisher Title: Chief Financial and Accounting Officer

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

Name Title Date

Director, President and Chief /s/ JOHN J. MACK* Executive Officer (Principal March 29, 2002 John J. Mack Executive Officer)

Chief Financial and /s/ DAVID C. FISHER Accounting Officer (Principal March 29, 2002 David C. Fisher Financial and Accounting Officer)

/s/ ROBERT M. BAYLIS* Director March 29, 2002 Robert M. Baylis

/s/ MAYNARD J. TOLL, JR.* Director March 29, 2002 Maynard J. Toll, Jr.

/s/ BRADY W. DOUGAN* Director, Head of Securities March 29, 2002 Brady W. Dougan Division

II-1

Director, Chairman of Global /s/ HAMILTON E. JAMES* Investment Banking and March 29, 2002 Hamilton E. James Private Equity

/s/ RICHARD E. THORNBURGH* Director, Head of Finance & March 29, 2002 Richard E. Thornburgh Risk

/s/ STEPHEN R. VOLK* Director, Managing Director March 29, 2002 Stephen R. Volk

/s/ DAVID C. FISHER *By: David C. Fisher Attorney-in-fact

II-2

INDEX TO EXHIBITS

Exhibit Description Number Purchase Agreement dated as of November 28, 2001, between Registrant and Bankmont 2.1 Financial Corp. ("Purchaser"), as amended by First Amendment to Purchase Agreement, dated as of February 1, 2002, between Registrant and Purchaser.*

3.2 By-laws of the Registrant. *

The instruments defining the rights of holders of long-term debt securities of the Registrant and 4.1 its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Registrant hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.

Sublease Agreement, dated December 31, 2000, between The Chase Manhattan Bank and the Registrant, Subtenant, on 277 Park Avenue, New York, New York (incorporated by reference 10.2 to Exhibit 10.24 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated July 28, 1995, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.5 reference to Exhibit 10.28 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Amendment of Lease, dated May 17, 1996, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated by 10.6 reference to Exhibit 10.29 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated September 10, 1997, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York 10.7 (incorporated by reference to Exhibit 10.30 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

E-1

Modification of Lease, dated February 5, 1998, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York (incorporated 10.8 by reference to Exhibit 10.31 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Second Modification of Lease, dated June 12, 2000, between Metropolitan Life Insurance 10.9 Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (incorporated by reference to Exhibit 10.32 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated November 13, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York 10.13 (incorporated by reference to Exhibit 10.36 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Sublease, dated February 22, 2001, between Metropolitan Life Insurance Company and the Registrant, Landlord, on One Madison Avenue, New York, New York 10.15 (incorporated by reference to Exhibit 10.38 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Lease dated as of October 30, 2001, between Registrant and The Port Authority of New York 10.16 and New Jersey, on One Madison Avenue. *

Agreement of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.17 Jersey (incorporated by reference to Exhibit 10.41 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

First Amendment of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.18 Jersey (incorporated by reference to Exhibit 10.42 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

E-2

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Second Amendment of Lease, dated March 12, 1992, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.19 New Jersey (incorporated by reference to Exhibit 10.43 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fifth Amendment of Lease, dated May 1, 1994, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.22 Jersey (incorporated by reference to Exhibit 10.46 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Sixth Amendment of Lease, dated March 9, 1995, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.23 Jersey (incorporated by reference to Exhibit 10.47 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Eight Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.25 Jersey (incorporated by reference to Exhibit 10.49 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Ninth Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New 10.26 Jersey (incorporated by reference to Exhibit 10.50 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Twelfth Amendment of Lease, dated August 18, 1997, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.29 New Jersey (incorporated by reference to Exhibit 10.53 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

E-3

Fourteenth Amendment of Lease, dated December 28, 1998, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey 10.31 City, New Jersey (incorporated by reference to Exhibit 10.55 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Fifteenth Amendment of Lease, dated June 16, 1999, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, 10.32 New Jersey (incorporated by reference to Exhibit 10.56 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

Agreement of Lease, dated August 15, 2000, between TM Park Avenue Associates and the Registrant, Tenant, on 315 Park Avenue South, New York, New York (incorporated by 10.34 reference to Exhibit 10.63 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

First Amendment to the Lease between Registrant and TM Park Avenue Associates dated 10.35 August 16, 2000, on 315 Park Avenue South, New York, New York. *

12.1 Computation of ratio of earnings to fixed charges.*

23.1 Consent of KPMG LLP.*

24.1 Power of Attorney.* * Filed herewith.

E-4

CREDIT SUISSE FIRST BOSTON (USA), INC. Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2001 PART I PART II SELECTED CONSOLIDATED FINANCIAL DATA(1) Credit Suisse First Boston (USA), Inc. and Subsidiaries MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Contractual Obligations Contingent Commitments Assets Fair Value at December 31, 2001 Liabilities Fair Value at December 31, 2001 OTC Derivatives Exposure 2001 vs 2000 DISTRIBUTION OF CSFB'S DAILY TRADING REVENUE (UNAUDITED) $mm PART III PART IV INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE ITEMS 14(a)(1) AND 14(a)(2) INDEPENDENT AUDITORS' REPORT CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (In millions) CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (In millions, except share data) CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Operations (In millions) CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders' Equity For the Years Ended December 31, 2001, 2000 and 1999 (In millions, except per share data) CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000 and 1999 CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000 and 1999 CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2001 SCHEDULE I CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Financial Condition (In millions, except share data) CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Operations (In millions) CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Condensed Statements of Cash Flows (In millions) CREDIT SUISSE FIRST BOSTON (USA), INC. (Parent Company only) Notes to Condensed Financial Statements December 31, 2001 SIGNATURES INDEX TO EXHIBITS

Exhibit 2.1

------

PURCHASE AGREEMENT

------

between

CREDIT SUISSE FIRST BOSTON (USA), INC.,

and

BANKMONT FINANCIAL CORP.

Dated as of November 28, 2001

TABLE OF CONTENTS

Page ----

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms...... 2 SECTION 1.02. Definitions...... 7

ARTICLE II

PURCHASE AND SALE

SECTION 2.01. Purchase and Sale of the LLC Interests...... 8 SECTION 2.02. Purchase Price...... 8 SECTION 2.03. Closing...... 8 SECTION 2.04. Closing Deliveries by the Seller...... 9 SECTION 2.05. Closing Deliveries by the Purchaser...... 9 SECTION 2.06. Adjustment of Purchase Price...... 9

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

SECTION 3.01. Organization, Authority and Qualification of the Seller...... 10 SECTION 3.02. Organization, Authority and Qualification of the Company...... 11 SECTION 3.03. Capital Stock of the Company; Ownership of the Shares and the LLC Interests...... 11 SECTION 3.04. No Interests...... 12 SECTION 3.05. Corporate Books and Records...... 12 SECTION 3.06. No Conflict...... 12 SECTION 3.07. Consents and Approvals...... 13 SECTION 3.08. Financial Information; Reports...... 13 SECTION 3.09. No Undisclosed Liabilities...... 14 SECTION 3.10. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions...... 14 SECTION 3.11. Litigation...... 16 SECTION 3.12. Customer Accounts...... 16 SECTION 3.13. Registrations...... 17 SECTION 3.14. Compliance with Legal Requirements...... 17 SECTION 3.15. Material Contracts...... 18 SECTION 3.16. Real and Tangible Property...... 19 SECTION 3.17. Intellectual Property...... 19

SECTION 3.19. Employee Benefit Plans; Labor Matters...... 21 SECTION 3.20. Taxes ...... 24 SECTION 3.21. Relationships with Related Persons...... 25 SECTION 3.22. Certain Payments...... 25 SECTION 3.23. Brokers...... 25 SECTION 3.24. No Other Representations...... 25

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF THE PURCHASER AND PARENT

SECTION 4.01. Organization and Authority of the Purchaser...... 25 SECTION 4.02. No Conflict...... 26 SECTION 4.03. Governmental Consents and Approvals...... 26 SECTION 4.04. Investment Purpose...... 26 SECTION 4.05. Financing...... 26 SECTION 4.06. Litigation...... 26 SECTION 4.07. Brokers...... 27

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.01. Conduct of Business Prior to the Closing...... 27 SECTION 5.02. Access to Information...... 27 SECTION 5.03. Confidentiality...... 28 SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents.....28 SECTION 5.05. Notice of Developments...... 29 SECTION 5.06. Investigation...... 30 SECTION 5.07. Use of Names...... 30 SECTION 5.08. Release of Indemnity Obligations; Assumption of Certain Employee Obligations...... 32 SECTION 5.09. Non-Competition...... 33 SECTION 5.10. No Negotiation...... 35 SECTION 5.11. Ancillary Agreements...... 35 SECTION 5.12. Leases ...... 36 SECTION 5.13. LLC Conversion...... 36 SECTION 5.14. Customer Accounts...... 36 SECTION 5.15. Further Action...... 37 SECTION 5.16. Intercompany Accounts...... 37 SECTION 5.17. Employee Accounts...... 37 SECTION 5.18. Transfer of Assets...... 37 SECTION 5.19. Certain Consents...... 37

ARTICLE VI

EMPLOYEE MATTERS

SECTION 6.01. General...... 38 SECTION 6.02. Service Recognition...... 38 SECTION 6.03. WARN ...... 38

ARTICLE VII

TAX MATTERS

SECTION 7.01. Tax Indemnities...... 38 SECTION 7.02. Refunds and Tax Benefits...... 40 SECTION 7.03. Contests...... 40 SECTION 7.04. Cooperation and Exchange of Information...... 41 SECTION 7.05. Conveyance Taxes...... 42 SECTION 7.06. Miscellaneous...... 42 SECTION 7.07. Intended Characterization...... 43

ARTICLE VIII

CONDITIONS TO CLOSING

SECTION 8.01. Conditions to Obligations of the Seller...... 43 SECTION 8.02. Conditions to Obligations of the Purchaser...... 44

ARTICLE IX

SECTION 9.01. Survival of Representations and Warranties...... 45 SECTION 9.02. Indemnification...... 46 SECTION 9.03. Third Party Claims...... 47

ARTICLE X

TERMINATION AND WAIVER

SECTION 10.01. Termination...... 48 SECTION 10.02. Effect of Termination...... 49 SECTION 10.03. Waiver...... 49

ARTICLE XI

GENERAL PROVISIONS

SECTION 11.01. Expenses...... 49

SECTION 11.02. Notices...... 49 SECTION 11.03. Public Announcements...... 50 SECTION 11.04. Headings...... 50 SECTION 11.05. Severability...... 50 SECTION 11.06. Entire Agreement...... 51 SECTION 11.07. Assignment...... 51 SECTION 11.08. No Third Party Beneficiaries...... 51 SECTION 11.09. Amendment...... 51 SECTION 11.10. Governing Legal Requirement...... 51 SECTION 11.11. Counterparts...... 51 SECTION 11.12. Specific Performance...... 51

SCHEDULES AND EXHIBITS

Disclosure Schedule

Exhibit 2.06(a) Balance sheet of the Company dated as of September 30, 2001 Exhibit 5.07(a) Form of Temporary License Agreement Exhibit 5.07(e) Form of Trademark and Service Mark License Agreement Exhibit 5.11(a) Form of Clearing Agreement Amendment Exhibit 5.11(b) Form of iNautix Agreement Exhibit 5.11(c) Form of Research Products Agreement Amendment Exhibit 5.11(d) Form of Transition Services Agreement Exhibit 8.01(e) Form of Opinion of Counsel to the Purchaser Exhibit 8.02(h)(i) Form of Opinion of Counsel to the Seller

PURCHASE AGREEMENT, dated as of November 28, 2001, between CREDIT SUISSE FIRST BOSTON (USA), INC., a corporation organized under the laws of the State of Delaware (the "SELLER"), and BANKMONT FINANCIAL CORP., a corporation organized under the laws of the State of Delaware (the "PURCHASER").

WHEREAS, CSFBDIRECT Holdings LLC., a limited liability company formed under the laws of the State of Delaware and wholly owned by an Affiliate (as defined below) of the Seller ("HOLDINGS"), owns all the issued and outstanding shares of common stock, par value $.10 per share (the "SHARES"), of CSFBDIRECT, Inc.;

WHEREAS, on or prior to December 31, 2001 (and in any event prior to the Closing Date), Holdings will implement a restructuring of its ownership of CSFBDIRECT, Inc. pursuant to which, among other things, CSFBDIRECT, Inc. will be converted (the "LLC CONVERSION") into a limited liability company (the "LLC");

WHEREAS, at all times after the conversion of the Company into a limited liability company through the Closing, all of the membership interests of the Company (the "LLC INTERESTS") shall be owned by Holdings (the "COMPANY" will refer to the LLC or CSFBDIRECT, Inc., as the context requires);

WHEREAS, the Seller wishes to exit the retail discount brokerage business and, in connection therewith, will cause Holdings to sell to the Purchaser, and the Purchaser will purchase from Holdings, the LLC Interests, upon the terms and subject to the conditions set forth herein;

WHEREAS, certain Affiliates of the Seller have agreed to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provide certain services and other support to the Purchaser following the sale of the retail discount brokerage business; and

WHEREAS, in connection with the sale to the Purchaser of the LLC Interests and the provision of the services described above, the Seller and certain of its Affiliates and the Purchaser shall enter into certain Ancillary Agreements (as defined below) providing for an ongoing relationship between the Seller or such Affiliates and the Company.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the Purchaser and the Seller hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings:

"ACTION" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

"ACTIVE EMPLOYEES" means all employees of the Company as of the Closing other than employees who are on lay-off, short-term disability, long-term disability, workers' compensation, or absent from work by reason of a family or medical leave covered under Section 102 of the Family and Medical Leave Act of 1993 or an approved leave of absence, unless the employee returns to work within ninety (90) calendar days (or one hundred twenty (120) calendar days if so provided under applicable state family medical leave Legal Requirements) of the first day the employee was absent from work under one of the above classifications.

"AFFILIATE" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

"AGREEMENT" or "THIS AGREEMENT" means this Purchase Agreement, dated as of November 28, 2001, between the Seller and the Purchaser (including the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made in accordance with the provisions of Section 11.09.

"ANCILLARY AGREEMENTS" means the Temporary License Agreement, the Trademark and Service Mark License Agreement, the iNautix Agreement, the Transitional Services Agreement, the Clearing Agreement, the Research Products Agreement Amendment and the IPO Allocation Agreement.

"BUSINESS DAY" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in The City of New York.

"CARIBBEAN" means the following: Anguilla, Antigua and Barbuda, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Cuba, Dominica, Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Montserrat, Netherlands Antilles, St. Barthelemy, St. Kitts and Nevis, St. Lucia, St. Maarten, St. Martin, St. Vincent and the Grenadines, Surinam, Trinidad and Tobago, and Turks and Caicos Islands.

"CODE" means the Internal Revenue Code of 1986, as amended through the date hereof.

"COMPANY INTELLECTUAL PROPERTY" means all Intellectual Property that is owned by or licensed or sublicensed to the Company.

"COMPANY IP LICENSES" means those (a) licenses of Intellectual Property by the Company to Third Parties, (b) licenses of Intellectual Property by Third Parties to the Company and (c) agreements between the Company and Third Parties relating to the development or use of Intellectual Property, the development or transmission of data, or the use, modification, framing, linking advertisement, or other practices with respect to Internet web sites, but excluding shrink wrap or click wrap licenses of commercial software having a replacement value of less than $10,000 and the Excluded IP Licenses.

"CONFIDENTIALITY AGREEMENT" means the letter agreement dated

"CONTRACT" means, with respect to any Person, any agreement, indenture, contract, obligation, lease or license to which such Person is a party or by which it may be bound or to which any of its properties may be subject.

"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto, dated as of the date hereof, and forming a part of this Agreement.

"ENCUMBRANCE" means any security interest, pledge, mortgage, lien (including environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement, licenses or restriction of any kind, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.

"EQUITY VALUE" means the total equity of the Company, calculated on a basis consistent with the calculation of the total equity on the Company's balance sheet dated September 30, 2001, as modified in accordance with Section 2.06(a) of the Disclosure Schedule.

"ERISA AFFILIATE" means any trade or business (whether or not incorporated) which is under common control, or which is treated as a single employer, with the Company under Section 414(b), (c), (m) or (o) of the Code.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"EXCLUDED INTELLECTUAL PROPERTY" means all Intellectual Property licensed or sublicensed to the Company pursuant to the Excluded IP Licenses.

"EXCLUDED IP LICENSES" means (i) licenses or sublicenses of Intellectual Property by the Seller or any of the Seller's Affiliates to the Company and (ii) enterprise or group-wide licenses of Software or data licensed to the Seller or any of the Seller's Affiliates for use by or on behalf of the Company as an Affiliate of the Seller or its Affiliates.

"GOVERNMENTAL AUTHORITY" means any United States federal, state or local or any non-United States government, governmental, regulatory or administrative authority, agency or commission, including any SRO, or any court, tribunal, or judicial or arbitral body.

"GOVERNMENTAL AUTHORIZATION" means any approval, consent, declaration, license, Order, permit, registration, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement.

"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

"INDEBTEDNESS" means, with respect to any Person, (a) all indebtedness of such Person, whether or not contingent, for borrowed money, (b) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the Sellers or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all obligations of such Person as lessee under leases that have been or should be, in accordance with U.S. GAAP, recorded as capital leases, (e) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities, (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of such Person or any warrants, rights or options to acquire such capital stock, valued, in the case of redeemable preferred stock, at the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, and (g) all Indebtedness of others referred to in clauses (a) through (e) above guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person.

"INTELLECTUAL PROPERTY" means (a) patents, patent applications and invention registrations (including any continuations, reissues, divisionals pertaining thereto), (b) Trademarks, (c) copyrighted works, copyrights, and registrations and applications for registration thereof (including, but not limited to, any of the foregoing as they pertain to Software), (d) internet domain names, (e) "semi-conductor chip product works" as defined in 17 U.S.C. Section 901, i.e., mask works and (f) confidential and proprietary information, including trade secrets, business methods and know-how.

"IRS" means the Internal Revenue Service of the United States.

"KNOWLEDGE" means, with respect to the Seller, the actual knowledge, after due inquiry, of the following executive officers of the Company: Blake Darcy, Glenn Tongue, Mike Hogan and David Sidari.

"LEASED REAL PROPERTY" means the real property leased by the Company or any Affiliate thereof, as tenant, and used in connection with the business of the Company, together with, to the extent leased by the Company or any Affiliate, all buildings and other structures,

4 facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of the Company attached or appurtenant thereto, and all easements, licenses, rights and appurtenances relating to the foregoing.

"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, law, ordinance, principle of common law, rule, regulation, statute, treaty, guideline or other requirement (including those of any securities or commodities exchange or SRO).

"LIABILITIES" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Legal Requirement, Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.

"MATERIAL ADVERSE EFFECT" means any circumstance, change in or effect on the Company that is or is reasonably likely to be materially adverse to the business operations, results of operations, assets, liabilities or the financial condition of the Company, except for any circumstance, change in or effect on the Company directly or indirectly arising out of or attributable to (i) changes or effects that generally affect the retail discount brokerage business, (ii) any actions required to be taken or omitted to be taken pursuant to the terms of this Agreement or in accordance with the Purchaser's instructions or (iii) any effects that are reasonably demonstrated to arise out of or be attributable to the execution of this Agreement with the Purchaser (as opposed to another Person) or the announcement of the transactions contemplated by this Agreement with the Purchaser (as opposed to another Person).

"NASD" means The National Association of Securities Dealers, Inc. and its wholly owned subsidiary, NASD Regulation, Inc.

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

"ORDER" means the entry in any judicial or administrative proceeding brought under any Legal Requirement by any Governmental Authority or any other Person of any permanent or preliminary injunction or other order.

"ORDINARY COURSE OF BUSINESS" means an action taken by a Person that is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person.

"PERMITTED ENCUMBRANCES" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) liens for taxes, assessments and governmental charges or levies that are not yet due and payable or that are being contested in good faith in proper proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP; (b) Encumbrances imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's liens and other similar liens arising in the Ordinary Course of Business securing obligations that (i) are not overdue

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for a period of more than 30 days and (ii) are not in excess of $15,000 in the case of a single property or $250,000 in the aggregate at any time; (c) pledges or deposits made in the Ordinary Course of Business to secure obligations

5 under workers' compensation laws or similar legislation or to secure public or statutory obligations; and (d) minor survey exceptions, reciprocal easement agreements and other customary encumbrances on title to real property that (i) were not incurred in connection with any Indebtedness and (ii) do not, individually or in the aggregate, materially adversely affect the value or use of such property , or interfere with the ordinary conduct of business at such property, for its current and anticipated purposes.

"PERSON" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

"PURCHASE PRICE BANK ACCOUNT" means a bank account in the United States to be designated by the Seller in a written notice to the Purchaser at least five Business Days before the Closing.

"REGULATIONS" means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.

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

"SELLER'S ACCOUNTANTS" means KPMG, independent accountants of the Seller.

"SOFTWARE" means (a) computer programs, including any and all implementations of algorithms, models and methodologies, whether in source code or object code form, (b) databases and data compilations, and (c) documentation, including flow charts, specifications, comments, user manuals and training materials, relating to any of the foregoing.

"SRO" means a Self Regulatory Organization registered under the Exchange Act, including the NYSE and the NASD.

"TAX" or "TAXES" means any and all taxes, fees, levies or other assessments, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any law, contractual agreement or otherwise, including: taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, real or personal property, sales, use, service use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, occupation, severance, or net worth; taxes or other charges in the nature of excise, withholding, estimated, ad valorem, stamp, transfer, recording, escheat, value added, environmental, or gains taxes; license, registration and documentation fees; and customs duties, tariffs, and similar charges, and any liability in respect of such amounts arising as a result of being a member of any affiliated, consolidated, combined, unitary or similar group, as a successor to another person or by Contract.

"TAX RETURN" shall mean any report, return, document, declaration, information, return or filing (including any related or supporting information and any amendments to any of the foregoing) filed or required to be filed with respect to Taxes.

"TERRITORY" means the United States, Canada, Mexico, the Caribbean and the United States possessions, protectorates and territories.

"THIRD PARTY" means any third Person other than an Affiliate.

"TRADEMARK" means trademarks, service marks, trade dress, logos, trade names, corporate names and other source identifiers, registrations, renewals and applications for registration thereof, and the goodwill of the business symbolized thereby in the Territory.

"U.S. GAAP" means United States generally accepted accounting

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document principles and practices as in effect from time to time and applied consistently throughout the periods involved.

SECTION 1.02. DEFINITIONS. The following terms have the meanings set forth in the Sections set forth below:

Definition Location ------

"ACQUISITION PROPOSALS"...... 5.10 "APPRAISER"...... 7.06(g) "ASSETS"...... 3.18 "CLAIM"...... 9.03(a) "CLEARING AGREEMENT AMENDMENT"...... 5.11 "CLOSING"...... 2.03 "CLOSING BALANCE SHEET"...... 2.06(a) "CLOSING DATE"...... 2.03 "COMMUNICATIONS"...... 7.03(b) "COMPANY"...... Recitals "COMPANY BENEFIT PLANS"...... 3.19(a) "COMPANY FINANCIAL STATEMENTS...... 3.08(b) "CONTEST"...... 7.03(b) "CUSTOMER"...... 5.09(c) "DAMAGES"...... 9.02(a) "DEDUCTIBLE AMOUNT"...... 9.02(a) "ERISA"...... 3.19(a) "FINANCIAL STATEMENTS"...... 3.08(a) "HOLDINGS"...... Recitals "INAUTIX AGREEMENT"...... 5.11 "INDEMNIFICATION ITEM"...... 7.03(a) "INDEMNITEE"...... 9.03(a) "INDEMNITOR"...... 9.03(a) "INDEPENDENT ACCOUNTING FIRM"...... 2.06(b) "INTENDED CHARACTERIZATION"...... 7.07(a) "IPO ALLOCATION AGREEMENT"...... 5.11 "LEASE"...... 3.16(a) "LLC"...... Recitals "LLC CONVERSION"...... Recitals "LLC INTERESTS"...... Recitals

7 Definition Location ------

"LOGO DESIGN"...... 5.07(c) "MATERIAL CONTRACTS"...... 3.15(a) "OSFI"...... 4.03 "PROCEEDING" ...... 7.03(b) "PROPRIETARY NAMES AND MARKS"...... 5.07(e) "PURCHASE PRICE"...... 2.02 "PURCHASER"...... Preamble "REGISTERED REPRESENTATIVES"...... 3.13(b) "RELEVANT LIABILITIES"...... 7.06(f) "RESEARCH PRODUCTS AGREEMENT AMENDMENT"...... 5.11 "RESTRICTED BUSINESS"...... 5.09(a) "RESTRICTED PERIOD"...... 5.09(a) "RETAINED DOMAIN NAMES"...... 5.07(f) "RETAINED NAMES AND MARKS"...... 5.07(a) "SELLER"...... Preamble "SELLER GROUP"...... 3.20(d) "SHARES"...... Recitals "TEMPORARY LICENSE AGREEMENT"...... 5.07(a) "TITLE IV PLAN"...... 3.19(a) "TRADEMARK AND SERVICE MARK LICENSE AGREEMENT".. 5.07(e) "TRANSITION SERVICES AGREEMENT"...... 5.11 "URLS"...... 5.07(f) "WARN"...... 3.19(c)

ARTICLE II

PURCHASE AND SALE

SECTION 2.01. PURCHASE AND SALE OF THE LLC INTERESTS. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller will cause Holdings (which is treated as a division of Donaldson, Lufkin & Jenrette Securities Corporation for tax purposes) to sell to the Purchaser, and the Purchaser shall purchase from the Seller or its Affiliate, the LLC Interests.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 2.02. PURCHASE PRICE. The purchase price for the LLC Interests and the assets set forth in Section 2.02 of the Disclosure Schedule shall be $520,000,000 (the "PURCHASE PRICE"), subject to the adjustment set forth in Section 2.06.

SECTION 2.03. CLOSING. Upon the terms and subject to the conditions of this Agreement, the sale and purchase of the LLC Interests contemplated by this Agreement shall take place at a closing (the "CLOSING") to be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York at 10:00 A.M. New York time on the first Business Day of the month that is at least three Business Days following the satisfaction or waiver of all conditions to the obligations of the parties set forth in Article VIII, or at such other

8 place or at such other time or on such other date as the Seller and the Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the "CLOSING DATE").

SECTION 2.04. CLOSING DELIVERIES BY THE SELLER. At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser:

(a) evidence of the registration of the sale of the LLC Interests;

(b) a receipt for the Purchase Price; and

SECTION 2.05. CLOSING DELIVERIES BY THE PURCHASER. At the Closing, the Purchaser shall deliver to the Seller:

(a) the Purchase Price by wire transfer in immediately available funds to the Purchase Price Bank Account; and

(b) the certificates, opinion and other documents required to be delivered pursuant to Section 8.01.

SECTION 2.06. ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be subject to adjustment after the Closing as specified in this Section 2.06:

(a) CLOSING BALANCE SHEET. As promptly as practicable, but in any event within 30 days following the Closing, the Company shall deliver to the Seller a balance sheet (the "CLOSING BALANCE SHEET") with respect to the Company as of 11:59 p.m. on the day immediately preceding the Closing Date, together with a certificate of the Company certifying that the Closing Balance Sheet has been prepared in accordance with U.S. GAAP and in a manner consistent with the preparation of the balance sheet of the Company dated as of September 30, 2001, a copy of which is attached hereto as Exhibit 2.06(a), as modified in the manner set forth on Section 2.06(a) of the Disclosure Schedule; PROVIDED that the assets set forth in Section 2.02 of the Disclosure Schedule will not be reflected on the Closing Balance Sheet.

(b) DISPUTES. The Seller may dispute any amounts reflected on the Closing Balance Sheet; PROVIDED, HOWEVER, that the Seller shall have notified the Purchaser in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute, within 20 Business Days of the Company's delivery of the Closing Balance Sheet to the Seller. With respect to any portions of the Closing Balance Sheet that are not in dispute, a purchase price adjustment shall be made in accordance with Section 2.06(c). In the event of such a dispute, the Seller and the Purchaser shall attempt to reconcile their differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the Seller and the Purchaser. If the Seller and the Purchaser are unable to reach a resolution with such effect within 20 Business Days after receipt by the Purchaser of the Seller's written notice of dispute, the Seller and the Purchaser shall submit the items remaining in dispute for resolution to an independent accounting firm of international reputation mutually acceptable to the Purchaser and the Seller or, if no such firm is agreed upon, Ernst & Young (the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document "INDEPENDENT ACCOUNTING FIRM"), which shall, within thirty Business Days after such submission, determine and report to the Purchaser and the Seller upon such remaining disputed items, and such report shall be final, binding and conclusive on the Seller and the Purchaser. The fees and disbursements of the Independent Accounting Firm shall be allocated between the Seller and the Purchaser in the same proportion that the aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that are unsuccessfully disputed by each such party (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted. In acting under this Agreement, the Independent Accounting Firm shall be entitled to the privileges and immunities of arbitrators.

(c) PURCHASE PRICE ADJUSTMENT. The Closing Balance Sheet shall be deemed final for the purposes of this Section 2.06 upon the earliest of (i) the failure of the Seller to notify the Purchaser of a dispute within 20 Business Days of the Company's delivery of the Closing Balance Sheet to the Seller, (ii) the resolution of all disputes, pursuant to Section 2.06(b), by the Purchaser and the Seller and (iii) the resolution of all disputes, pursuant to Section 2.06(b), by the Independent Accounting Firm. Within three Business Days of the Closing Balance Sheet being deemed final, a Purchase Price adjustment shall be made as follows:

(i) in the event that the Equity Value as reflected on the Closing Balance Sheet is less than $10,200,000, then the Purchase Price shall be adjusted downward in an amount equal to such deficiency, and the Seller shall, within three Business Days of such determination, pay the amount of such deficiency to the Purchaser by wire transfer in immediately available funds to an account designated by the Purchaser; and

(ii) in the event that the Equity Value reflected on the Closing Balance Sheet exceeds $10,200,000, then the Purchase Price shall be adjusted upward in an amount equal to such excess, and the Purchaser shall, within three Business Days of such determination, pay the amount of such excess to the Seller by wire transfer in immediately available funds to an account designated by the Seller.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER

As an inducement to the Purchaser to enter into this Agreement, the Seller hereby represents and warrants to the Purchaser as follows:

SECTION 3.01. ORGANIZATION, AUTHORITY AND QUALIFICATION OF THE SELLER. The Seller is a corporation duly organized and validly existing under the laws of the State of Delaware and has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Seller, the performance by the Seller of its obligations hereunder and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Seller. This Agreement has been duly executed and delivered by the Seller, and (assuming due authorization, execution and

10 delivery by the Purchaser) this Agreement constitutes, a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.

SECTION 3.02. ORGANIZATION, AUTHORITY AND QUALIFICATION OF THE COMPANY. (a) As of the date hereof, the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all necessary power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Set forth in Section 3.02 of the Disclosure Schedule is a true and complete list of all jurisdictions in which the Company is duly licensed or qualified to do business. The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary other than in such jurisdictions where the failure to be so qualified or licensed would not, individually or in the aggregate, have a Material Adverse Effect. All corporate actions taken by the Company have been duly authorized, and the Company has not taken any action that in any respect conflicts with, constitutes a default under

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or results in a violation of any provision of its certificate of incorporation or by-laws. True and correct copies of the certificate of incorporation and by-laws of the Company, each as in effect on the date hereof, have been delivered by the Seller to the Purchaser.

(b) As of the Closing Date, (i) the Company shall be a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and shall have all necessary power and authority to own, operate or lease the properties and assets owned, operated or leased by it and to carry on its business as it has been and is then conducted, (ii) all corporate actions taken by the Company shall have been duly authorized, and the Company shall not have taken any action that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its organizational documents, and (iii) true and correct copies of the organizational documents of the Company, as in effect on the Closing Date, shall have been delivered by the Seller to the Purchaser.

SECTION 3.03. CAPITAL STOCK OF THE COMPANY; OWNERSHIP OF THE SHARES AND THE LLC INTERESTS. (a) As of the date hereof, the authorized capital stock of the Company consists of 1,000 Shares. As of the date hereof, 1,000 Shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable. None of the Shares was issued in violation of any preemptive rights or any Legal Requirement. There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of the Company or obligating the Seller or the Company to issue or sell any shares of capital stock of, or any other interest in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Shares or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. As of the date hereof, the Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by Holdings free and clear of all Encumbrances. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

(b) As of the Closing, (i) all of the LLC Interests will be owned beneficially and of record by the Seller or one of its Affiliates, free and clear of all Encumbrances, (ii) none of the LLC Interests will be issued in violation of any Legal Requirement, (iii) there will be no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the LLC Interests or obligating the Seller or any of its Affiliates, including the Company to issue or sell any LLC Interests, (iv) there will be no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any LLC Interests or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person, and (v) there will be no voting trusts, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the LLC Interests. Upon consummation of the transactions contemplated by this Agreement and registration of the LLC Interests in the name of the Purchaser in the records of the Company, the Purchaser will own all of the LLC Interests, representing 100% of the interests in the Company, free and clear of all Encumbrances (other than those created by the Purchaser or any of its Affiliates).

SECTION 3.04. NO INTERESTS. There are no corporations, partnerships, joint ventures, associations or other entities in which the Company owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same. The Company is not a member of (nor is any part of its business conducted through) any partnership. The Company is not a participant in any joint venture or similar arrangement.

SECTION 3.05. CORPORATE BOOKS AND RECORDS. (a) The books of account, minute books, stock record books and tax records of the Company, all of which have been made available to the Purchaser, are complete and correct and have been maintained in accordance with sound business practices. The minute books of the Company contain accurate records of all meetings and accurately reflect all other actions taken by the stockholders or members, Board of Directors of the Company (or equivalent body) and all committees of the Board of Directors of the Company. At the Closing, all of such books and records will be in the possession of the Company.

(b) The Company has devised and maintained systems of internal accounting controls sufficient to provide reasonable assurances, that (i) all material transactions are executed in accordance with management's general or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document specific authorization; and (ii) all material transactions are recorded as necessary to permit the preparation of financial statements in conformity with U.S. GAAP consistently applied.

SECTION 3.06. NO CONFLICT. (a) Assuming that all consents, approvals, authorizations and other actions described in Section 3.07 have been obtained and all filings and notifications listed in Section 3.07 of the Disclosure Schedule have been made, the execution, delivery and performance of this Agreement by the Seller do not and will not:

(i) violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws (or similar organizational documents) of the Seller or the Company;

(ii) except as would not have a Material Adverse Effect, conflict with, result in a violation of, or give any Governmental Authority or other Person the right to exercise any remedy or obtain any relief under, any Legal Requirement or Order to which the Seller, the Company or any of the assets owned or used by the Company in connection with its business, are subject;

(iii) except as would not have a Material Adverse Effect, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by the Company or that otherwise relates to the business of, or any of the assets owned or used by, the Company;

(iv) except as would not have a Material Adverse Effect, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Seller or the Company pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Seller or the Company is a party or by which any of the Shares or the LLC Interests or any of such assets or properties is bound or affected; or

(v) result in the creation of any Encumbrance on any of the Shares or the LLC Interests.

(b) Except as set forth in Section 3.06(b) of the Disclosure Schedule, the LLC Conversion will not require any consents, approvals, authorizations or notifications, or trigger any default or other rights or obligations, under any Material Contract.

SECTION 3.07. CONSENTS AND APPROVALS. (a) The execution, delivery and performance of this Agreement by the Seller do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any Governmental Authority or any other Person, except (i) as described in Section 3.07 of the Disclosure Schedule, (ii) the notification requirements of the HSR Act, (iii) the notification requirement of Rule 1017 of the NASD, (iv) compliance with the notification requirements of NYSE Rule 312 and any further requests or directions received from the NYSE as a result of such notification, (v) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not have a Material Adverse Effect or (vi) as may be necessary as a result of any facts or circumstances relating solely to the Purchaser.

(b) Except as set forth in Section 3.07(b) of the Disclosure Schedule, the LLC Conversion does not and will not require any consent, approval, authorization or other Order of, action by, filing with or notification of any Governmental Authority.

SECTION 3.08. FINANCIAL INFORMATION; REPORTS. (a) The Seller has delivered to the Purchaser true and correct copies of its (i) audited consolidated balance sheets as of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document December 31, 1999 and 2000 and the related audited consolidated statement of income and cash flows, accompanied by the reports thereon of the Seller's Accountants and (ii) an unaudited consolidated balance sheet as of September 30, 2001, and the related consolidated statements of income and cash flows (all such financial statements being the "FINANCIAL STATEMENTS"). The Financial Statements present fairly in all material respects the Seller's consolidated financial condition and results of operations as of such dates or for the periods covered thereby and have been prepared in accordance with U.S. GAAP.

(b) The Seller has delivered to the Purchaser true and correct copies of the balance sheet of the Company as of September 30, 2001 and the related statement of income (such financial statements being the "COMPANY FINANCIAL STATEMENTS"). The Company Financial Statements present fairly in all material respects the Company's financial condition and results of operations as of such date and for such period and have been prepared in accordance with U.S. GAAP.

(c) The Seller has made available to Purchaser true and complete copies of the following documents since January 1, 1999 to the date hereof with respect to the Company: (i) Form BD and all amendments; (ii) all material state filings not included as part of clause (i); (iii) all material correspondence to or from the SEC, any SRO, and any state regulatory officials or agencies; (iv) all Rule 17a-5 reports; (v) all Forms U-4 and U-5; (vi) the results of any regulatory examinations; (vii) any operating restriction imposed by any SRO; and (viii) all material internal and external risk assessment reports.

SECTION 3.09. NO UNDISCLOSED LIABILITIES. There are no Liabilities of the Company, other than Liabilities (a) reflected or reserved against on the Company Financial Statements, (b) disclosed in Section 3.09 of the Disclosure Schedule, (c) incurred since September 30, 2001 in the Ordinary Course of Business of the Company or (d) which do not, individually or in the aggregate, have a Material Adverse Effect.

SECTION 3.10. CONDUCT IN THE ORDINARY COURSE; ABSENCE OF CERTAIN CHANGES, EVENTS AND CONDITIONS. Except as set forth in Section 3.10 of the Disclosure Schedule, since September 30, 2001, the business of the Company has been conducted in the Ordinary Course of Business. As amplification and not limitation of the foregoing, except as contemplated by this Agreement or as set forth in Section 3.10 of the Disclosure Schedule, since September 30, 2001 (or such other date as set forth below), the Company has not:

(i) except in the Ordinary Course of Business, permitted or allowed any of the assets or properties (whether tangible or intangible) of the Company to be sold, leased, subleased, licensed or subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing;

(ii) except in the Ordinary Course of Business, discharged or otherwise obtained the release of any Encumbrance or paid or otherwise discharged any Liability, other than current liabilities reflected on the Company Financial Statements and current liabilities incurred in the Ordinary Course of Business since September 30, 2001;

(iii) made any change in the Company's authorized and issued capital stock, purchased, redeemed, retired or otherwise acquired any of the capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of capital stock of the Company or otherwise;

(iv) merged with, entered into a consolidation with or acquired an interest in any Person or acquired a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquired any assets other than in the Ordinary Course of Business;

(v) issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of, or any other interest in, the Company other than in the Ordinary Course of Business;

(vi) since June 30, 2001, entered into, modified or terminated any agreement, arrangement or transaction with any of its directors, officers or employees (or with any relative, beneficiary or spouse living with such Person or Affiliate of such Person) or, other than in the Ordinary Course of Business, entered into, modified or terminated

(vii) made any material change in any method of accounting or accounting practice or policy used by the Company, other than such changes required by U.S. GAAP;

(viii) made any change in (A) any margin practice or policy, (B) any sales commission practice or policy, (C) any pricing, investment, inventory, credit or allowance, in each case other than in the Ordinary Course of Business, (D) any method of calculating any bad debt, contingency or other reserve of the Company for financial reporting or tax purposes or (E) the process of approving and opening new customer accounts, including establishing credit parameters;

(ix) allowed any material Company Intellectual Property to lapse, fall into the public domain or become abandoned;

(x) other than intercompany Indebtedness that will be paid prior to the Closing, incurred any Indebtedness, in excess of $500,000 individually or $2,500,000 in the aggregate or, from and after the date of this Agreement, in excess of $500,000 individually or $2,500,000 in the aggregate;

(xi) made any capital expenditure or commitment for any capital expenditure in excess of $50,000 individually or $1,000,000 in the aggregate or, from and after the date of this Agreement, in excess of $50,000 individually or $1,000,000 in the aggregate;

(xii) (A) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Company to any of its employees, including any increase, acceleration or change pursuant to any Company Benefit Plan or (B) established, increased, accelerated or promised to increase any benefits under any Company Benefit Plan, in each case, except

as required by any Legal Requirement or pursuant to any existing employment contract or arrangement in the Ordinary Course of Business;

(xiii) amended, modified or consented to the termination of any Material Contract or the Company's rights thereunder;

(xiv) suffered any damage to or destruction or loss of any material asset or property of the Company, whether or not covered by insurance;

(xv) cancelled or waived any claims or rights with a value to the Company in excess of $100,000 individually or $500,000 in the aggregate;

(xvi) opened an office or facility for the purpose of conducting the business or operations of the Company or otherwise binding upon the Company;

(xvii) vacated or abandoned any office or facility;

(xviii) suffered any Material Adverse Effect; or

(xix) agreed to take any of the actions specified in this Section 3.10.

SECTION 3.11. LITIGATION. Except as set forth in Section 3.11 of the Disclosure Schedule, (i) as of the date of this Agreement, there are no Actions (other than trademark oppositions or domain name disputes not material to the Company) by or against the Company or affecting any of the Assets, pending before any Governmental Authority or, to the knowledge of the Seller, threatened to be brought by or before any Governmental Authority and (ii) as of the Closing, there will not be any Actions by or against the Company or affecting any of the Assets pending before any Governmental Authority or threatened to be brought by or before any Governmental Authority that, individually or in the aggregate, would have a Material Adverse Effect. None of the matters disclosed in Section 3.11 of the Disclosure Schedule could reasonably be expected to affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. Except as set forth in Section 3.11 of the Disclosure Schedule, none of the Company nor any of the Assets is subject to any Governmental Order, nor, to the knowledge of the Seller, are there any such Governmental Orders threatened to be

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document imposed by any Governmental Authority, that, individually or in the aggregate, has a Material Adverse Effect.

SECTION 3.12. CUSTOMER ACCOUNTS. Each extension of credit by the Company to a customer is in material compliance with Regulation T of the Federal Reserve Board or any similar regulation of any SRO and is secured by an equity amount no less than the amounts permitted by the rules and regulations of any SRO. Substantially all customer margin accounts are evidenced by a customer account agreement substantially in the form attached to Section 3.12(b) of the Disclosure Schedule, subject to a system of customer credit and risk control and, to the knowledge of the Company, present no unreasonable risk of loss. To the knowledge of the Company, no employee of the Company has recommended trading strategies to customers, including day trading techniques or individual recommendations. As of the date of this Agreement, there are no pending material complaints from customers except those of which Seller has furnished to Purchaser a true and correct copy or, if oral, a written summary.

SECTION 3.13. REGISTRATIONS. (a) The Company is not subject to registration under the Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940, as amended, or any similar Legal Requirement of any Governmental Authority. Set forth in Section 3.13(a) of the Disclosure Schedule is a complete and accurate list of all jurisdictions in which the Company is registered as a broker-dealer, investment advisor, insurance agent or exchange member. In those circumstances in which the Company is required to be licensed or registered as a broker-dealer, investment adviser or insurance agency with any Governmental Authority, it is and at all times has been duly licensed or registered as such and such registrations are in full force and effect. All such registrations as currently filed, and all periodic reports required to be filed with respect thereto, are accurate and complete in all material respects.

(b) Except with respect to employees in training or employees who have been employed by the Company for fewer than 90 days, all of the Company's officers and employees who are required to be licensed or registered to conduct the business of the Company are and at all required times have been duly licensed or registered in each state and with each Governmental Authority in which or with whom such licensing or regulation is so required (such officers and employees are collectively, the "REGISTERED REPRESENTATIVES"). To the knowledge of Seller, none of the Registered Representatives is or has been subject to any disciplinary or other regulatory compliance proceeding that would, or would be reasonably likely to, prevent, restrict, unduly delay or otherwise limit the transfer from the Company to Purchaser, or the re-licensing or re-registration by Purchaser, of the licenses or registrations of such Registered Representatives in any state in which such Registered Representatives are licensed or registered.

SECTION 3.14. COMPLIANCE WITH LEGAL REQUIREMENTS. (A) Each of the Company and, to the Seller's knowledge, officers and employees of the Company (i) in the conduct of business is in material compliance with all material Legal Requirements (including the Gramm-Leach-Bliley Financial Services Modernization Act of 1999) or Orders applicable to the Company or to the employees conducting such business and with the applicable rules of all Governmental Authorities and (ii) has and at all times has had all Governmental Authorizations, and has made all filings, applications and registrations with, all Governmental Authorities that are required in order to permit, in all material respects, the Company to own and operate its business as presently conducted. All such Governmental Authorizations are in full force and effect, and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened or, as of the date of this Agreement, reasonably likely; and all such filings, applications and registrations are current. The Company has complied in all material respects with all privacy policies and standards established by the Company for the use and disclosure of personal data provided by its customers.

(b) Section 3.14(b) of the Disclosure Schedule sets forth all Governmental Authorities with which the Company is required to be registered as a broker-dealer as of the date hereof. The Company is not required to be registered in or obtain a license or similar authorization from any other jurisdiction. The Company has not exceeded in any material respect the business activities enumerated in any membership agreements or other limitations imposed in connection with its registrations, forms (including Form BDs) and reports filed with any Governmental Authority. The Company has filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that it has been required to file since 1995 with any Governmental Authority. All other reports and statements required to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be filed by the Company have been filed including any report or statement required to be filed pursuant to the laws, rules or regulations of the United States, any state or any Governmental Authority, and the Company has paid all fees and assessments due and payable in connection therewith. The information contained in such registrations, forms and reports was true and complete in all material respects as of the date of the filing thereof. Each such registration is in full force and effect on the date hereof. Except for normal examinations conducted by a SRO in the regular course of the Company's business, no SRO has initiated any proceeding or investigation into the business or operations of the Company. There is no unresolved violation, criticism or exception by any SRO with respect to any report or statement relating to any examinations of the Company.

(c) The Company's activities do not require it to be registered as an exchange or transfer agent, a clearing agency, a municipal securities dealer, a governmental securities dealer, a futures commission merchant, a commodity trading adviser or a commodity pool operator.

SECTION 3.15. MATERIAL CONTRACTS. (A) Except for Contracts entered into between the Company and its customers in the Ordinary Course of Business, Section 3.15(a) of the Disclosure Schedule contains a complete and accurate list, and Seller has made available to Purchaser, prior to the date of this Agreement, true and complete copies, or, in the event of oral Contracts, complete and accurate summaries (such contracts and agreements being "MATERIAL CONTRACTS"), of:

(i) All contracts and agreements that involve payment by or to the Company of an amount or value in excess of $50,000;

(ii) all Contracts relating to indebtedness for borrowed money of the Company to a third party;

(iii) all Contracts with any Governmental Authority to which the Company is a party;

(iv) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time;

(v) all Contracts between or among the Company and the Seller or any Affiliate of the Seller contemplating an exchange of value in excess of $50,000;

(vi) all material broker, distributor, dealer, agency, sales promotion, market research, marketing consulting and advertising Contracts to which the Company is a party;

(vii) all leases and subleases in respect of Leased Real Property;

(viii) all Contracts entered into by the Company relating to the acquisition or divestiture of a business that contain ongoing indemnification liabilities;

(ix) all Contracts for capital expenditures by the Company in excess of $50,000;

(x) all Contracts for clearing or sub-clearing services to which the Company is a party;

(xi) all material Company IP Licenses;

(xii) all advertising Contracts providing for aggregate payments exceeding $100,000 to which the Company is a party; and

(xiii) all material Contracts in respect of or with affinity partnerships and registered investment advisors to which the Company is a party.

(b) Each Material Contract: (i) is valid and binding on the Company, and, to the knowledge of the Seller, the counterparties thereto, and is in full force and effect and (ii) upon consummation of the transactions contemplated by this Agreement, except to the extent that any consents set forth in Section 3.07 of the Disclosure Schedule are not obtained, shall continue in

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document full force and effect without penalty or other adverse consequence. The Company is not in breach of, or default under, any Material Contract nor, to the knowledge of the Company, is any other party in breach of, or default under, any Material Contract.

SECTION 3.16. REAL AND TANGIBLE PROPERTY. (a) Section 3.16(a) of the Disclosure Schedule lists all of the Leased Real Property. The Seller has delivered to the Purchaser true and complete copies of all leases and subleases relating to the Leased Real Property (each, a "LEASE" and collectively, the "LEASES") and any and all ancillary documents pertaining thereto. The Company does not own any real property.

(b) Each material parcel of Leased Real Property is leased free and clear of all Encumbrances other than Permitted Encumbrances and is neither subject to any governmental decree or order to be sold nor is being condemned, expropriated or otherwise taken by any public authority with or without payment of compensation therefor, nor, to the knowledge of the Seller, has any such condemnation, expropriation or taking been proposed.

(c) Each Lease grants to the tenant thereunder the exclusive right to use and occupy the premises demised thereunder, and, except as set forth in Section 3.16(c) of the Disclosure Schedule, the Seller has not entered into any lease or sublease granting any Person the right to occupy or use (or the option to exercise the right to occupy or use) all or any portion of the Leased Real Property.

SECTION 3.17. INTELLECTUAL PROPERTY. (a) Section 3.17(a) of the Disclosure Schedule sets forth a true and complete list of all of the following items that are owned or used by the Company: (i) trademark registrations and applications owned by the Company and trademark registrations and applications in the Territory licensed to the Company by DLJ Long Term Investment Corp.; (ii) material internet domain names; (iii) common law trademarks material to the Company's business; and (iv) material Software. No royalties, honoraria or other fees are payable to any Third Parties (other than Governmental Authorities and Internet

19 registrars) or Affiliates of the Company for right to use any Company Intellectual Property except pursuant to the Company IP Licenses.

(b) To the knowledge of the Seller, the conduct of the Company's business as currently conducted and the Licensed Software (as defined in the iNautix Agreement) do not infringe or misappropriate or otherwise violate the Intellectual Property of any Third Party in the Territory. Except as disclosed in Section 3.17(b) of the Disclosure Schedule, no claim has been asserted to the Seller or the Company in writing in the two-year period immediately preceding the date hereof that the conduct of the Company's business infringes, misappropriates or otherwise violates the Intellectual Property of any third party in the Territory. With respect to each item of Company Intellectual Property owned by the Company, the Company is the owner of the entire right, title and interest in and to such Intellectual Property, free and clear of Encumbrances and is entitled to use such Intellectual Property in the continued operation of its business. With respect to each item of Company Intellectual Property licensed to the Company, the Company has the right to use such Intellectual Property in the continued operation of its business, free and clear of Encumbrances, in accordance with the terms of the Company IP License governing such Intellectual Property. The Company Intellectual Property owned by the Company and, to the knowledge of the Seller, the Company Intellectual Property licensed to the Company, is valid and enforceable, and has not been adjudged invalid or unenforceable in whole or part in the Territory. All registrations and applications for Company Intellectual Property that are owned by Company are recorded in the name of its current owner in the Territory. Except as disclosed in Section 3.17(b) of the Disclosure Schedule, there is no pending or threatened litigation, opposition, interference or cancellation or similar proceeding before any Governmental Authority involving the Company Intellectual Property owned by the Company, and, to the knowledge of the Seller, the Company Intellectual Property licensed to the Company, challenging the ownership, use, validity or enforceability of such Company Intellectual Property. To the knowledge of the Seller, no person is engaging in any activity that infringes, misappropriates or otherwise violates the Company Intellectual Property and no claim has been asserted by the Company to such effect.

(c) The Company takes reasonable measures to protect the confidentiality of trade secrets. To the Seller's knowledge, no trade secret of the Company has been disclosed or authorized to be disclosed to any third party other than pursuant to a non-disclosure agreement that requires the other party to maintain the secrecy of such trade secrets. To the Seller's knowledge, no party to any non-disclosure agreement relating to the Company's trade secrets is

(d) Subject to the consents set forth in Section 3.07 of the Disclosure Schedule and except as provided herein and in the Ancillary Agreements, the consummation of the transactions contemplated in this Agreement will not result in the loss, restriction or impairment, in any material respect, of the Company's right to own or use any of the material Company Intellectual Property, individually or in the aggregate, other than the Excluded Intellectual Property.

(e) Except as set forth in Section 3.17(e) of the Disclosure Schedule and except as provided herein and in the Ancillary Agreements, there are no settlements, forebearances to sue, consents, judgments, governmental, or similar obligations which, or claims

20 by third parties to, in any material respect (a) restrict Company's rights to use any Company Intellectual Property, (b) restrict Company's business in order to accommodate a third party's intellectual property rights or (c) permit third parties to use any Company Intellectual Property owned or exclusively licensed to the Company.

(f) Except as would not have a Material Adverse Effect, the Company Intellectual Property, together with the rights to be granted under the Ancillary Agreements, constitutes all the Intellectual Property owned by or licensed to the Company and used by the Company in the business of Company as currently conducted.

(g) Following the consummation of the transactions, none of the Seller, its Affiliates, or their respective employees, agents, directors and consultants shall retain any interest in the Company Intellectual Property owned by the Company, except as provided hereunder and in the Ancillary Agreements.

(h) To the Seller's knowledge, the Software included in the Company Intellectual Property was either: (i) created by employees of the Company as a 'work for hire'; (ii) all rights therein have been assigned to the Company by the creator or proprietor thereof; or (iii) duly licensed to the Company. To the Seller's knowledge, the Software included in the Company Intellectual Property is free of viruses, worms, material bugs and errors. To the Seller's knowledge, the documentation included such Software is adequate for the operation and maintenance of such Software in the Ordinary Course of Business.

SECTION 3.18. ASSETS. The Company owns, leases or has the legal right to use all the properties and tangible assets and, as of the Closing, except with respect to Leased Real Property which is the subject of Section 5.12, will own, lease or have the legal right to use all the properties and tangible assets used or intended to be used by the Company or otherwise owned, leased or used by the Company and, with respect to contract rights, except for the Excluded IP Licenses or as set forth in Section 3.07 or 3.18 of the Disclosure Schedule, is a party to or enjoys (and as of the Closing, will be a party to or enjoy) the right to the benefits of all Contracts, including Contracts with Affiliates of the Seller, used or intended to be used by the Company (all such properties, assets and contract rights being the "ASSETS"). Except with respect to the Excluded IP Licenses or Contracts set forth in Section 3.18 to the Disclosure Schedule, the Assets constitute all the properties, assets and rights forming a part of, used, held or intended to be used in, and all such properties, assets and rights as are necessary in the conduct of, the business of the Company in the United States as currently conducted. At all times since September 30, 2001, the Company has caused the Assets to be maintained in accordance with good business practice, and all the Assets are in good operating condition and repair and are suitable for the purposes for which they are used and intended.

SECTION 3.19. EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (A) Section 3.19 of the Disclosure Schedule sets forth a true and complete list of each employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and each material employee benefit, bonus, deferred compensation, incentive compensation, medical, dental, health, life insurance, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock, stock option or other equity related plan, program, policy, arrangement and contract and each golden parachute,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document change in control, employment, consulting, severance, retention or other similar plan, program, policy, arrangement and agreement maintained, contributed to or sponsored by the Company, to which the Company is a party or with respect to which the Company could incur liability under applicable Legal Requirements, including without limitation, Sections 4069, 4212(c) or 4204 of ERISA (collectively, the "COMPANY BENEFIT PLANS"). Except with respect to arrangements or agreements the full cost of which will be borne by the Seller or its Affiliates (other than the Company), the Seller has made available to the Purchaser a true and complete copy, including all applicable amendments, of (i) the two most recent annual reports (Forms 5500), including all schedules thereto, (ii) each such Company Benefit Plan, (iii) each trust agreement and insurance contract relating to each Company Benefit Plan, (iv) the most recent summary plan description and summary of material modifications for each Company Benefit Plan for which a summary plan description or a summary of material modifications is required, (v) the most recent actuarial report or valuation, if any, relating to a Company Benefit Plan subject to Title IV of ERISA ("TITLE IV PLAN") and (vi) the most recent determination letter, if any, issued by the IRS with respect to any Company Benefit Plan qualified under Section 401(a) of the Code.

(b) With respect to the Company Benefit Plans, no event has occurred and, to the knowledge of the Seller, there exists no condition or set of circumstances, in connection with which the Company could be subject to any liability under the terms of such Company Benefit Plans, ERISA, the Code or any other applicable Legal Requirement which would have a Material Adverse Effect. The Company does not have any actual or contingent liability under Title IV of ERISA, except as would not have a Material Adverse Effect. No action, claim or proceeding is pending or, to the knowledge of the Company, threatened with respect to any Company Benefit Plan (other than claims for benefits in the ordinary course).

(c) The Company is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company and no collective bargaining agreement is being negotiated by the Company. As of the date hereof, there is no labor dispute, strike, slowdown or work stoppage against the Company pending or, to the knowledge of the Seller, threatened which may interfere with the respective business activities of the Company. To the knowledge of the Seller, none of the Company or any of its representatives or employees, has committed any unfair labor practices in connection with the operation of the respective businesses of the Company, and there is no charge or complaint against the Company pending before the National Labor Relations Board or any comparable state agency, except as would not have a Material Adverse Effect. The Company is in compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment, health and safety, and wages and hours, except as would not have a Material Adverse Effect. The Company has not received written notice of any investigation, charge or complaint pending before the Equal Employment Opportunity Commission or any other federal or state government agency or court or other tribunal regarding an unlawful employment practice, except as would not have a Material Adverse Effect. The Company is and has been in material compliance with all notice and other requirements under the Worker Adjustment and Retraining Notification Act ("WARN") or similar state statute.

(d) Except with respect to arrangements or agreements the full cost of which will be borne by the Seller or its Affiliates (other than the Company), the Seller has made available to the Purchaser (i) copies of all employment, retention and consulting agreements with

22 officers, key employees or consultants of the Company (or copies of forms of agreements setting forth representative employment terms and conditions); (ii) copies of all severance and termination agreements, programs and policies of the Company with or relating to its employees, consultants or directors; and (iii) copies of all plans, programs, agreements and other arrangements of the Company with or relating to its employees, consultants or directors which contain change in control provisions; and (iv) copies of the forms of invention assignment (or work for hire) and confidentiality agreements, if any, signed by employees, consultants and contractors of the Company.

(e) Each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS and has complied with its terms and all material legal requirements, and to the knowledge of Seller no circumstance exists that is reasonably likely to result in the revocation or denial of any such favorable determination letter.

(f) The Company does not contribute to a "multiemployer plan," as defined in Section 3(37) of ERISA, nor has it contributed to such a

(g) Neither the execution and delivery of this Agreement nor the consummation of the contemplated transactions, either alone or upon the occurrence of any additional or further acts or events, will (i) result in any payment (including, without limitation, severance, unemployment compensation, golden parachute or otherwise) becoming due under any Company Benefit Plan or otherwise from the Company or to any "rabbi trust" or similar trust, (ii) increase any benefits otherwise payable under any Company Benefit Plan or (iii) result in any acceleration of the time of payment, exercisability or vesting of any benefit. No amounts payable under any Company Benefit Plan as a result of the consummation of the transactions contemplated by this Agreement, either alone or upon the occurrence of any additional or further acts or events, will fail to be deductible for federal income tax purposes by virtue of Section 280G of the Code.

(h) Neither the Company nor any of its ERISA Affiliate has used the services or workers provided by third party contract labor suppliers, temporary employees, "leased employees" (as that term is defined in Section 414(n) of the Code), or individuals who have provided services as independent contractors to an extent that would reasonably be expected to result in the disqualification of any of the Company Benefit Plans or the imposition of penalties or excise taxes with respect to the plans by the IRS, the Department of Labor, or the PBGC.

(i) No Company Benefit Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees after retirement or other termination of service (other than (i) coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, (ii) death benefits or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA, (iii) benefits the full cost of which is borne by the current or former employee (or his or her beneficiary) or (iv) deferred compensation benefits accrued as liabilities on the books of the Company).

SECTION 3.20. TAXES. Except as set forth in Section 3.20 of the Disclosure Schedule:

(a) The Company has duly and timely filed (or there have been duly and timely filed on its behalf) with the appropriate governmental authorities all income Tax and all other material Tax Returns required to be filed by it, and all such Tax Returns are true, correct and complete in all material respects; all material Taxes for which the Company is or may be liable (whether disputed or not and whether or not shown on any Tax Return) in respect of periods (or portions thereof) ending on or before the Closing Date have been timely paid, or will be timely paid, or have been provided for on the Company Financial Statements in accordance with U.S. GAAP;

(b) There are no liens for Taxes upon any property or assets of the Company, except for liens for Taxes not yet due and payable, and for which Taxes adequate reserves have been provided on the Company Financial Statements in accordance with U.S. GAAP;

(c) No power of attorney that is currently in force has been granted with respect to any matters relating to Taxes which power of attorney would be binding on the LLC after the Closing Date;

(d) As of the date hereof, the Company is an includible corporation within the meaning of Section 1504(b) of the Code with respect to the affiliated group of corporations of which Credit Suisse First Boston, Inc. is the parent (the "SELLER GROUP") and will continue to be such an includible corporation at all times through the LLC Conversion. For federal income Tax purposes, all of the LLC Interests will be owned by Donaldson, Lufkin & Jenrette Securities Corporation (a member of the Seller Group) and the LLC will be treated as a disregarded entity for all applicable income Tax purposes at all times from the time of the LLC Conversion through the Closing. None of Holdings, Seller, Company (prior to the LLC Conversion) or LLC (following the LLC Conversion), or any of their respective Affiliates, will take any action (or fail to take any action) which action (or failure to act) would cause the LLC to be treated as other than a disregarded entity for any income Tax purposes;

(e) Donaldson, Lufkin & Jenrette Securities Corporation, the seller for Tax purposes, is a United States person within the meaning of Section 7701(a)(30) of the Code. No withholding of Tax will be required under Section 1445 of the Code with respect to the purchase of the LLC Interests pursuant to this Agreement;

(f) The Company has duly and timely withheld, collected,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document deposited and paid to the proper governmental authority all Taxes required to have been withheld, collected, deposited or paid by it;

(g) The Company has not waived or requested to waive any statute of limitations in respect of Taxes, nor has requested or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver, request or agreement would be binding on the LLC after the Closing; and

(h) Since November 1, 1999, the Company has not been a distributing or controlled corporation in a transaction to which Section 355 of the Code applied.

SECTION 3.21. RELATIONSHIPS WITH RELATED PERSONS. Except as set forth on Section 3.21 of the Disclosure Schedule, no officer or director of the Seller or any Affiliate thereof has, or since January 1, 1999 has had, (a) any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Company's business or (b) any direct or indirect financial interest in any transaction with the Company or any competitor of the Company; PROVIDED, HOWEVER, that the ownership of securities representing no more than five percent of the outstanding voting power of any competitor and which are also listed on any national securities exchange shall not be deemed to be a "financial interest" so long as the Person owning such securities has no other connection or relationship with such competitor.

SECTION 3.22. CERTAIN PAYMENTS. Neither the Company nor, to the knowledge of the Company, any director, officer, agent, or employee of the Company has, directly or indirectly, (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured or (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any Affiliate, officer or director of the Company or any Affiliate thereof, in each case in violation of any applicable Legal Requirement or (b) established or maintained any fund or asset that has not been recorded in the books and records of the Company.

SECTION 3.23. BROKERS. Except for any fees or expenses for which the Seller is solely responsible, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller.

SECTION 3.24. NO OTHER REPRESENTATIONS. Neither the Seller, the Company nor any of their respective directors, officers, employees, agents or representatives has made, or shall be deemed to have made, and neither the Seller nor the Company is liable for or bound in any manner by, any express or implied representations, warranties, guaranties, promises or statements pertaining to the Company or any of its assets or businesses except as specifically set forth in this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND PARENT

As an inducement to the Seller to enter into this Agreement, the Purchaser hereby represents and warrants to the Seller as follows:

SECTION 4.01. ORGANIZATION AND AUTHORITY OF THE PURCHASER. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Purchaser, the performance by the

Purchaser of its obligations hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and (assuming due authorization, execution and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document delivery by the Seller) this Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms.

SECTION 4.02. NO CONFLICT. Assuming compliance with the notification requirements of the HSR Act and the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 4.03, except as may result from any facts or circumstances relating solely to the Seller, the execution, delivery and performance of this Agreement by the Purchaser do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation, by-laws or equivalent organizational documents of the Purchaser, (b) conflict with or violate any Legal Requirement or Governmental Order applicable to the Purchaser or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse or time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a party or by which any of such assets or properties are bound or affected which, the the case of clauses (b) and (c) above, would have a material adverse effect on the ability of such Person to perform its obligations under this Agreement or consummate the transactions contemplated hereby.

SECTION 4.03. GOVERNMENTAL CONSENTS AND APPROVALS. The execution, delivery and performance of this Agreement by the Purchaser do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, except (a) the approval of the Office of the Superintendent of Financial Institutions of Canada ("OSFI"), (b) the notification requirements of the HSR Act, and (c) as described in a writing given to the Seller by the Purchaser on the date of this Agreement.

SECTION 4.04. INVESTMENT PURPOSE. The Purchaser is acquiring the LLC Interests solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof.

SECTION 4.05. FINANCING. The Purchaser has available sufficient funds to pay the Purchase Price.

SECTION 4.06. LITIGATION. Except as disclosed in a writing given to the Seller by the Purchaser on or prior to the date of this Agreement, as of the date of this Agreement, no claim, action, proceeding or investigation is pending or, to the best knowledge of the Purchaser after due inquiry, threatened, that seeks to delay or prevent the consummation of, or that would be reasonably likely to materially adversely affect the Purchaser's ability to consummate, the transactions contemplated by this Agreement.

SECTION 4.07. BROKERS. Except for BMO Nesbitt Burns, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Purchaser. The Purchaser shall be solely responsible for payment of the fees and expenses of BMO Nesbitt Burns.

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.01. CONDUCT OF BUSINESS PRIOR TO THE CLOSING. (a) The Seller covenants and agrees that, except as described in Section 5.01(a) of the Disclosure Schedule, between the date hereof and the time of the Closing, the Company shall not conduct its business other than in the Ordinary Course of Business. Without limiting the generality of the foregoing, except as described in Section 5.01(a) of the Disclosure Schedule, the Seller shall cause the Company to (i) use its reasonable best efforts to (A) preserve intact its business organization, (B) keep available to the Purchaser the services of its employees, and (C) preserve its current relationships with its customers and other persons with which it has significant business relationships; (ii) exercise, but only after notice to the Purchaser and receipt of the Purchaser's prior written approval, any rights of renewal pursuant to the terms of any leases or subleases that by their terms would otherwise expire; (iii) not shorten or lengthen the customary payment cycles for any of its payables or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document receivables, except as required pursuant to Section 5.14; and (iv) not engage in any practice, take any action, fail to take any action or enter into any transaction which could cause any representation or warranty of the Seller to be untrue or result in a breach of any covenant made by the Seller in this Agreement; PROVIDED, HOWEVER, that prior to the Closing, subject to the provisions of Section 2.06, the Seller may, in its sole discretion and without the consent of the Purchaser, cause to be distributed to Seller any cash from the accounts of the Company as it deems desirable.

(b) Except as described in Section 5.01(b) of the Disclosure Schedule, the Seller covenants and agrees that, prior to the Closing, without the prior written consent of the Purchaser, the Company will not do any of the things enumerated in the second sentence of Section 3.10.

(c) Effective upon the Closing, the Seller will cause any and all Intellectual Property agreements between the Company and its Affiliates that are inconsistent with the rights to be granted to the Company under the Ancillary Agreements to be terminated.

SECTION 5.02. ACCESS TO INFORMATION. (a) From the date hereof until the Closing, upon reasonable notice, the Seller shall cause the Company and each of its officers, directors, employees, agents, representatives, accountants and counsel to: (i) afford the officers, employees and authorized agents, accountants, counsel, financing sources and representatives of the Purchaser reasonable access, during normal business hours, to the offices, properties, plants, other facilities, books and records of the Company (other than privileged materials) and to those officers, directors, employees, agents, accountants and counsel of the Company who have any knowledge relating to the Company and (ii) furnish to the officers, employees and authorized agents, accountants, counsel, financing sources and representatives of the Purchaser such

27 additional financial and operating data and other information regarding the assets, properties, operations and goodwill of the Company (or legible copies thereof) as the Purchaser may from time to time reasonably request.

(b) In order to facilitate the resolution of any claims made against or incurred by the Seller prior to the Closing, for a period of seven years after the Closing, the Purchaser shall (i) retain the books and records of the Company relating to periods prior to the Closing in a manner reasonably consistent with the prior practice of the Company and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the Seller reasonable access (including the right to make, at the Seller's expense, photocopies), during normal business hours, to such books and records.

(c) In order to facilitate the resolution of any claims made by or against or incurred by the Purchaser or the Company after the Closing or for any other reasonable purpose, for a period of seven years following the Closing, the Seller shall (i) retain the books and records of the Seller that relate to the Company and its operations for periods prior to the Closing and that shall not otherwise have been delivered to the Purchaser or the Company and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the Purchaser or the Company reasonable access (including the right to make photocopies, at the expense of the Purchaser or the Company), during normal business hours, to such books and records.

SECTION 5.03. CONFIDENTIALITY. (a) The terms of the Confidentiality Agreement are hereby incorporated herein by reference and shall continue in full force and effect until the Closing, at which time such Confidentiality Agreement and the obligations of the Purchaser under this Section 5.03 shall terminate; PROVIDED, HOWEVER, that the Confidentiality Agreement shall terminate only in respect of that portion of the Evaluation Material (as defined in the Confidentiality Agreement) exclusively relating to the Company and the transactions contemplated by this Agreement. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement shall continue in full force and effect.

(b) The Seller agrees to keep, and to cause its Affiliates to keep, confidential all nonpublic information in its possession regarding the Company (including any information made available to the Seller pursuant to Section 5.02(c)); PROVIDED, HOWEVER, that the Seller will not be required to maintain as confidential any information that (i) becomes generally available to the public other than as a result of a disclosure by the Seller or (ii) is required to be disclosed pursuant to the terms of a Legal Requirement or Order; PROVIDED, HOWEVER, that the Seller shall provide the Company with prior notice of any such disclosure and the opportunity to seek a protective order or other confidential treatment.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 5.04. REGULATORY AND OTHER AUTHORIZATIONS; NOTICES AND CONSENTS. (A) Subject to the terms and conditions herein provided, each of the Seller and Purchaser agrees to use its reasonable 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 to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and to cooperate with the other in connection with the foregoing, including using all reasonable commercial efforts (i) to refrain from taking any action that would inhibit or delay the parties' ability to consummate and make

28 effective the transactions contemplated by this Agreement; (ii) to obtain all consents, approvals and authorizations that are required to be obtained from Governmental Authorities; (iii) to obtain, without cost to the Purchaser, all necessary waivers, consents and approvals from other parties to material leases, contracts, licenses, commitments, agreements and arrangements; (iv) to lift or rescind any injunction, restraining order, decree or other order adversely affecting the ability of the parties hereto to consummate the transactions contemplated hereby; (v) to effect all necessary registrations and filings including, but not limited to, submitting notifications required by the HSR Act, including therein a request for early termination of the waiting period under the HSR Act, and providing information requested by Governmental Authorities; and (vi) to fulfill all conditions to this Agreement. The Seller and the Purchaser each agree to make, or to cause to be made, an appropriate filing of a notification and report form pursuant to the HSR Act or, in the case of the Purchaser, use its reasonable best efforts to file an appropriate submission to the OSFI, in each case with respect to the transactions contemplated by this Agreement within 10 Business Days after the date of this Agreement and to supply promptly any additional information and documentary material that may be requested pursuant to the HSR Act or by the OSFI, as applicable.

(b) Each party to this Agreement shall promptly notify the other party of any communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permit the other party to review in advance any proposed communication by such party to any Governmental Authority. No party to this Agreement shall agree to participate in any meeting with any Governmental Authority in respect of any filings, investigation or other inquiry unless it consults with the other party in advance and, to the extent permitted by such Governmental Authority, gives the other party the opportunity to attend and participate at such meeting. Subject to the Confidentiality Agreement, each party to this Agreement will coordinate and cooperate fully with the other parties in exchanging such information and providing such assistance as such other party may reasonably request in connection with the foregoing and in seeking early termination of any applicable waiting periods under the HSR Act. Subject to the Confidentiality Agreement and applicable Legal Requirements, each party to this Agreement will provide the other party with copies of all correspondence, filings or communications between it or any of its representatives, on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated by this Agreement. The preceding provisions of this Section 5.04(b) apply only through the Closing Date or termination of this Agreement.

SECTION 5.05. NOTICE OF DEVELOPMENTS. Prior to the Closing, (a) the Seller shall promptly notify the Purchaser in writing of (i) all events, circumstances, facts and occurrences arising subsequent to the date of this Agreement which could result in any breach of a representation or warranty or covenant of the Seller in this Agreement or which could have the effect of making any representation or warranty of the Seller in this Agreement untrue or incorrect in any respect and (ii) all other material developments affecting the assets, Liabilities, business, financial condition, operations, results of operations, customer or supplier relations, employee relations, projections or prospects of the Business and (b) the Purchaser shall promptly notify the Seller in writing of all events, circumstances, facts and occurrences arising subsequent to the date of this Agreement which could result in any breach of a representation or warranty or covenant of the Purchaser in this Agreement or which could have the effect of making any representation or warranty of the Purchaser in this Agreement untrue or incorrect in any respect.

The parties understand and agree that the delivery of a notice contemplated by this Section 5.05 shall not in any manner be deemed to cure or constitute a waiver of (or affect the right of either party with respect to) any breach of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any representation, warranty or covenant contained in this Agreement or have any effect for purposes of determining satisfaction of the conditions precedent hereto.

SECTION 5.06. INVESTIGATION. (a) The Purchaser acknowledges and agrees that (i) it has made its own inquiry and investigation into, and, based thereon, and its reliance upon clause (ii) of this Section 5.06 and this Agreement and the Ancillary Agreements, has formed an independent judgment concerning, the Company, (ii) to the Purchaser's knowledge, it has been furnished with or given adequate access to such information about the Company as it has requested and (iii) neither the Seller, the Company nor any of their respective directors, officers, employees, agents or representatives has made, or shall be deemed to have made, and none of such persons or the Seller or the Company shall be liable for or bound in any manner by, any express or implied representations, warranties, guaranties, promises or statements pertaining to the Company or any of its assets or businesses except as specifically set forth in Article III or in the certificate delivered pursuant to Section 8.02(a) of this Agreement, except in the case of fraud.

(b) In connection with the Purchaser's investigation of the Company, the Purchaser has received from the Seller certain estimates, projections and other forecasts for the Company, and certain plan and budget information. The Purchaser acknowledges that there are uncertainties inherent in attempting to make such projections, forecasts, plans and budgets, that the Purchaser is familiar with such uncertainties, that the Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, forecasts, plans and budgets so furnished to it, and that the Purchaser will not assert any claim against the Seller or any of its directors, officers, employees, agents, stockholders, Affiliates, consultants, counsel, accountants, investment bankers or representatives, or hold the Seller or any such persons liable, with respect thereto, except in the case of fraud. Accordingly, the Seller makes no representation or warranty with respect to any estimates, projections, forecasts, plans or budgets referred to in this Section 5.06(b).

SECTION 5.07. USE OF NAMES. (a) Notwithstanding any other provision of this Agreement to the contrary, no interest in or right to use the names "CSFB", "DLJ", "CSFBDIRECT" or "DLJDIRECT" or any confusingly similar derivation or modification thereof or any trademark, service mark, trade dress, logo, domain name, URL (uniform resource locator), trade name or corporate name, including registrations and applications therefor, of the Seller or any of its Affiliates (collectively, the "RETAINED NAMES AND MARKS") is being transferred to the Purchaser pursuant to the transactions contemplated hereby, and, except as expressly provided in the Temporary License Agreement and the Trademark and Service Mark License Agreement to be executed pursuant to this Section 5.07(a) and to Section 5.07(e), the use of any Retained Names and Marks in connection with the Company's business by the Purchaser or the Company shall cease as of the Closing Date. Subject to Section 5.07(f), at the Closing, the Seller's Affiliates shall grant to the Company a temporary, exclusive trademark license to use in the Territory the word "CSFBDIRECT" and, to the extent used by the Company as of the Closing Date, "DLJDIRECT", in connection with the business of the Company as of the date hereof pursuant to a license agreement substantially in the form attached hereto as Exhibit 5.07(a) (the "TEMPORARY

LICENSE AGREEMENT"). In addition, the Temporary License Agreement shall provide that the Company may, for a period of one year after Closing, use the word "CSFBDIRECT" and, to the extent used by the Company as of the Closing Date, "DLJDIRECT", in the Territory in advertising and marketing materials solely for the purpose of announcing and promoting the Company's change of ownership and name pursuant to the consummation of the transactions contemplated by this Agreement. Except as expressly authorized in the Temporary License Agreement, the Purchaser, promptly following the Closing Date and in any event within six months thereafter, will, and will cause the Company and any of its Affiliates to, remove or obliterate all the Retained Names and Marks from its signs, web sites, labels, letterheads and other items and materials of the Company's business and otherwise, and not put into use after the Closing Date any such items and materials not in existence on the Closing Date that bear any Retained Name or Mark or any name, mark or logo similar thereto. Notwithstanding the foregoing, but subject to any rights of the Seller and its Affiliates under applicable Legal Requirements, nothing shall preclude the Company from exercising its legal rights of "fair use" for which no license would be legally required with respect to the Retained Names and Marks, for example, used in describing the corporate history of the Company.

(b) It is hereby understood and agreed that the Purchaser and its Affiliates can use the name "_____DIRECT" in any name or mark adopted for the business of the Company and its Affiliates. The Purchaser and its Affiliates

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall not use the names "CSFBDIRECT" and "DLJDIRECT" in any manner except as permitted by the Temporary License Agreement. The Seller agrees that it and its Affiliates will not adopt or use the name "_____DIRECT" as all or part of the name of any online retail discount brokerage, online trading or direct investing business or any product or service offered in connection therewith; PROVIDED, HOWEVER, that the Seller and its Affiliates may use "CSFBDIRECT" and "DLJDIRECT" outside the Territory without limitation. Except as expressly provided herein and in any Ancillary Agreement, the Purchaser agrees that the Seller shall not have any responsibility for claims by third parties arising out of, or relating to, the use after the Closing Date by the Purchaser, the Company or any Affiliate thereof of any Retained Name or Mark.

(c) Subject to the existing rights of its Affiliates and joint ventures outside of the Territory, the Seller agrees to transfer to the Company, on or prior to Closing, any and all trademark and copyright rights in the Territory in and to solely the logo design incorporating the rectangular shape and the triangle in the letter "d" which has heretofore been used in connection with the marks "CSFBDIRECT" and "DLJDIRECT" (the "LOGO DESIGN"). At the Company's request and expense, the Seller will cancel any registrations for Trademarks in the Territory that incorporate such logo design. Nothing herein shall be deemed to limit the right of the Seller and its Affiliates to use a multiple-tone blue and red color scheme in connection with their businesses. In order to distinguish the use by the Purchaser and its Affiliates of the Logo Design, the Purchaser and its Affiliates shall not use the Logo Design with the color red for the triangle and in a blue color scheme.

(d) The Purchaser shall cause the Company to file, no later than two days after the Closing, amended articles of incorporation (or similar organizational documents) with the appropriate authorities changing its corporate name to a corporate name that does not contain any Retained Names and Marks and eliminates any reference or affiliation to Seller and its Affiliates.

(e) Notwithstanding anything herein to the contrary, no ownership interest in the names "FundCenter", "FundScan", "MarketSpeed", "StockScan", "TradeTalk" or "TradeUp" or any similar or related names, marks or logos of the Seller or any of its Affiliates (collectively, the "PROPRIETARY NAMES AND MARKS") is being transferred to the Purchaser pursuant to the transactions contemplated hereby. At the Closing, subject to existing license obligations of the Seller or any of its Affiliates, the Seller's Affiliates shall grant to the Company a perpetual, royalty-free license to use in any and all territories throughout the world the Proprietary Names and Marks pursuant to a license agreement substantially in the form attached hereto as Exhibit 5.07(e) (the "TRADEMARK AND SERVICE MARK LICENSE AGREEMENT") in connection with its Business (as defined in the Trademark and Service Mark License Agreement). Except as provided in the Trademark and Service Mark License Agreement, to the extent the Company had the exclusive or co-exclusive use of any of the Proprietary Names and Marks prior to the Closing, the Company shall continue to have the exclusive or co-exclusive, as applicable, use of such Proprietary Names and Marks after the Closing, it being understood that the rights granted to the Company with respect to the names "MarketSpeed," "Trade Up" and "Trade Talk" in the Territory shall be exclusive, notwithstanding any pre-existing licenses in the Territory. Except as expressly provided herein or in any Ancillary Agreement, the Purchaser agrees that the Seller shall not have any responsibility for claims by third parties arising out of, or relating to, the use after the Closing Date by the Purchaser, the Company or any Affiliate thereof of any Proprietary Name or Mark.

(f) For a period of two years after Closing, the Seller agrees to use the website at the Internet address www.CSFBdirect.com and any URLs that are under the control of the Seller or any of its Affiliates that as of the date of this Agreement points to CSFBDIRECT or DLJDIRECT (the "URLS") solely to shuttle traffic to the Company's primary website at an Internet address to be specified by Company. There shall be no content appearing on the URLs, other than a mutually agreeable message explaining the transaction. After such two year period, the URLs will be allowed to lapse or not contain any content. The CSFBDIRECT business may be run solely out of websites at internet addresses with Japan and United Kingdom Top Level Domains. After the expiration of such two year period, Seller shall have no responsibility to maintain, keep active any of the URLs, or to redirect any such users to the Purchaser or the Company's Internet web sites. Notwithstanding anything herein to the contrary, no right, title or interest in any domain name incorporating, in whole or in part, the Retained Names and Marks (collectively, the "RETAINED DOMAIN NAMES") is being transferred to the Purchaser pursuant to the transactions contemplated hereby, and the Company shall cease all use of the Retained Domain Names as of the Closing.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) At least three Business Days prior to the Closing Date, the Seller agrees to deliver to the Purchaser true and complete schedules of (i) Excluded IP Licenses and (ii) Pre-Existing Rights (as defined in the Trademark and Service Mark License Agreement).

SECTION 5.08. RELEASE OF INDEMNITY OBLIGATIONS; ASSUMPTION OF CERTAIN EMPLOYEE OBLIGATIONS (a) The Purchaser covenants and agrees, on or prior to the Closing, to execute and deliver to the Seller, for the benefit of the Seller, a general release and discharge, in form and substance reasonably satisfactory to the Seller and the Purchaser, releasing and discharging the Seller from any and all obligations (i) to guaranty the payment or performance of the Company of any liability or obligation, or (ii) to indemnify the Company or otherwise hold it

32 harmless, in each case, pursuant to those agreements and other arrangements set forth in Section 5.08 of the Disclosure Schedule, except as otherwise provided in this Agreement or the transactions contemplated hereby.

(b) The Seller covenants and agrees, on or prior to the Closing, to execute and deliver to the Purchaser, for the benefit of the Purchaser, the Company and their respective Affiliates, a general release and discharge in form and substance reasonably satisfactory to the Purchaser and the Seller, releasing and discharging, and holding harmless, the Purchaser, the Company and their respective Affiliates from, and the Seller or its Affiliates shall be responsible for the full cost of, any and all Liabilities under any and all Company Benefit Plans (as if such defined term was not modified by the "material" qualifier), including employment, retention and severance agreements, including those agreements, arrangements, plans, programs and policies referred to in Section 3.19(d), with respect to any and all current or former employees and directors of the Company on or prior to the Closing Date. In connection with the foregoing, the Purchaser and its Affiliates will cooperate with the Seller, including advising the Seller of employment status and whether any termination of employment was voluntary with respect to the Seller's obligations under any such Company Benefit Plan.

SECTION 5.09. NON-COMPETITION. (a) For the periods after the Closing described below, except to the extent permitted by paragraph (b) below, without the prior written consent of the Purchaser, (i) for a period of three years after the Closing, none of the Seller or any of its Affiliates other than Affiliated individuals and minority stockholders shall, and the Seller shall use all reasonable efforts to cause each such Affiliated individual and minority stockholder not to, engage, directly or indirectly, in the discount retail securities brokerage business (the "RESTRICTED BUSINESS") anywhere in the Territory or, directly or indirectly, own an interest in, manage, operate, control, or otherwise, directly or indirectly, engage in the ownership, management, operation or control of, any Person engaged in the Restricted Business in the Territory and (ii) for a period of five years after the Closing (the "RESTRICTED PERIOD"), none of the Seller or any of its Affiliates other than individuals and minority stockholders shall, and the Seller shall use all reasonable efforts to cause each such individual and minority stockholder not to, engage, directly or indirectly, in the Restricted Business through any online distribution channel anywhere in the Territory or, directly or indirectly, own an interest in, manage, operate, control or otherwise, directly or indirectly, engage in the ownership, management, operation or control of any Person engaged in the Restricted Business in the Territory through any online distribution channel.

(b) The restrictions set forth in Section 5.09(a) shall not be construed to prohibit or restrict any Person from acquiring the Seller or any of its Affiliates, nor shall they be construed to prohibit or restrict the Seller or any of its Affiliates from:

(i) offering asset management products, including through an online component, but not on a basis that includes all of the following characteristics: (A) a discounted commission (it being understood that for this purpose transaction fees relating to purchases and sales of no-load mutual funds and investment trust management products do not constitute commissions), (B) an online component and (C) no general involvement of a sales representative;

(ii) providing banking or back-office services in support of another entity that is engaged in the Restricted Business so long as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such services are provided in a manner that does not give the impression that the provider of such banking or back-office services is itself engaged in the Restricted Business;

(iii) acquiring, during the Restricted Period, any diversified business engaged in the Restricted Business with non-Affiliated Persons, as long as (A) during the first three years of the Restricted Period, the percentage of revenues of such business attributable to such Restricted Business during the preceding fiscal year represents less than 15% of such business' total revenues during such period (based on such business' latest financial statements) and (B) during the last two years of the Restricted Period, the percentage of revenues of such business attributable to the distribution of such Restricted Business through any online distribution channel during the preceding fiscal year represents less than 30% of such business' total revenues during such period (based on such business' latest financial statements);

(iv) owning securities having no more than five percent of the outstanding voting power of any Person engaged in the Restricted Business which are listed on any national securities exchange or traded actively in the national over-the-counter market or owning securities of any Person in the ordinary course of its brokerage business so long as the Seller or such Affiliate has no other involvement with such Person other than in the ordinary course of its business; or

(v) operating its business (excluding the Company) as it is being conducted as of the date hereof.

(c) During the Restricted Period, none of the Seller or any of its Affiliates will, directly or indirectly, use any customer lists, customer prospect information or information with respect to Customers developed by or for the use of the Company or from information provided by the Company, for any purpose, including to (i) induce any Person that is a customer of the Company as of the date hereof or as of the Closing Date (a "CUSTOMER") to patronize any business engaged in the Restricted Business; (ii) canvass, solicit or accept from any Customer, any such business; or (iii) request or advise any Customer or vendor of the Company to withdraw, curtail or cancel any such Customer's or vendor's business with the Company; PROVIDED, HOWEVER, that the restrictions set forth in this Section 5.09(c) shall not be construed to prohibit or restrict (x) any general solicitation or advertisement originating outside of, and not specifically targeted to or reasonably expected to target, the Territory, (y) continuing to service, except with respect to the Restricted Business, consistent with past practice, Customers of both the Company and the Seller or its Affiliates or (z) offering services to any employee of the Seller or any of its Affiliates generally available to employees.

(d) For a period of two (2) years after the Closing, the Seller will not in any way, directly or indirectly, (i) solicit for employment, or knowingly permit any Affiliate to solicit for employment, any officer or employee who was employed by the Company as of the Closing Date, or in any manner seek to induce any such person to leave the employ of the Purchaser or the Company or (ii) hire for employment, or knowingly permit any Affiliate to hire for employment, any officer or any management or sales employee or any other employee who at

34 the Closing is compensated at a base salary of $70,000 or more and in each case who was employed by the Company as of the Closing Date or at any time during the six months prior to the Closing Date, except for employees terminated by the Company following the Closing.

(e) The restrictions set forth in Section 5.09(d)(i) shall not apply with respect to any Person who is no longer employed by the Purchaser or any of its Affiliates (including the Company) at the time of such action or who responds to a BONA FIDE advertisement which is placed in general circulation by or on behalf of the Seller or any of its present or future Affiliates and which is not targeted at Persons to whom Section 5.09(d)(i) would otherwise apply.

(f) The Seller and its Affiliates agree and acknowledge that the restrictions contained in this Section 5.09 are reasonable in scope, duration and geography and are necessary to protect the Purchaser after the Closing. If any provision of this Section 5.09, as applied to any party or to any circumstance, is adjudged by a court to be invalid or unenforceable, the same will in no way affect any other circumstance or the validity or enforceability of the remainder of this Section 5.09. If any such provision, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such determination shall have the power to reduce the duration and/or area of such provision, and/or to delete specific words or phrases, and in its reduced form, such provision shall then be enforceable and shall be enforced.

SECTION 5.10. NO NEGOTIATION. The Seller, the Company and its Affiliates will immediately terminate all discussions, and the Seller and its Affiliates will not, and will cause the Company and its Representatives not to, and the Company will not directly or indirectly solicit, explore, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Purchaser) relating to any transaction involving the sale of the business or assets of the Company, or any of the capital stock of the Company, or any merger, consolidation, business combination, recapitalization or similar transaction involving the Company (collectively, "ACQUISITION PROPOSALS"). Additionally, the Company will not cooperate with or provide information to any Person (other than the Purchaser) in connection with an Acquisition Proposal. If the Seller or the Company receives any Acquisition Proposal, the Seller and the Company will immediately notify the Purchaser of its terms and the identity of the party making the proposal. The Company will request the return or destruction of all information provided to third parties pursuant to one or more confidentiality agreements prior to the date of this Agreement in connection with the solicitation of an Acquisition Proposal.

SECTION 5.11. ANCILLARY AGREEMENTS. At the Closing, the Purchaser or the Company, on the one hand, and the Seller or its Affiliates (as applicable), on the other hand, shall enter into (a) an amendment to the Fully Disclosed Clearing Agreement between Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation and the Company in substantially the form attached hereto as Exhibit 5.11(a) (the "CLEARING AGREEMENT AMENDMENT"), (b) an agreement with iNautix Technologies, Inc. in substantially the form attached hereto as Exhibit 5.11(b) (the "INAUTIX AGREEMENT"), (c) an amendment to the Research Products Agreement between CSFBDIRECT, Inc. and Donaldson, Lufkin & Jenrette Securities Corporation dated April 28, 1997 in substantially the form attached hereto as Exhibit 5.11(c) (the "RESEARCH PRODUCTS AGREEMENT AMENDMENT"), (d) a transition services agreement in

35 substantially the form attached hereto as Exhibit 5.11(d) (the "TRANSITION SERVICES AGREEMENT"), it being understood that the parties will negotiate in good faith between the date hereof and the Closing Date the schedule to such Transitional Services Agreement, (e) the Temporary License Agreement, (f) the Trademark and Service Mark License Agreement and (g) the IPO Allocation Agreement (as defined below), pursuant to which the Seller or one or more of its Affiliates will provide to the Company or the Purchaser services reasonably required by the Company to enable it to conduct its business substantially as conducted prior to the Closing Date. Following the Closing Date, the Seller or one of its Affiliates will continue to offer to allocate to the Company, on commercially reasonable terms, shares in initial public offerings for which the Seller or one of its Affiliates is the lead underwriter. The Seller and the Purchaser will negotiate in good faith between the date hereof and the Closing Date an agreement containing the specific parameters of such arrangements (the "IPO ALLOCATION AGREEMENT").

SECTION 5.12. LEASES. With respect to the Leased Real Property, the Seller will, and will cause its applicable Affiliate to, use its commercially reasonable efforts to obtain such third party consents as are necessary to assign the Leases to the Company for such portion of property covered by such Leases as agreed by the Purchaser and the Seller prior to Closing, it being understood that the Seller and the Purchaser will negotiate in good faith the exact portions of the properties to be transferred to the Company as promptly as practicable after the date hereof, taking into account the general discussions to date between the parties with respect to the amount of space required by the Company following the Closing. The parties hereto agree that, in the event any such consent is not obtained prior to Closing, the Seller will, prior to and subsequent to the Closing, cooperate with the Purchaser and the Company in attempting to obtain such consent as promptly thereafter as practicable. Until and unless such consent is obtained, the Seller shall either (a) provide the Company or the Purchaser with the rights and benefits of the affected lease and, if the Seller provides such rights and benefits, the Company or the Purchaser shall assume the obligations and burdens thereunder or (b) cause to be provided to the Company reasonably comparable space on terms and conditions no less favorable to the Company than those contained in the affected Lease. The Purchaser will cooperate with the Seller in obtaining any of the foregoing consents from third parties and, if applicable, in obtaining any of such rights and benefits.

SECTION 5.13. LLC CONVERSION. Prior to the Closing Date, the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Seller shall, and shall cause certain of its Affiliates to, take all actions as are reasonably necessary (including compliance with all applicable notification requirements of any SRO) to complete the LLC Conversion, in form and substance reasonably satisfactory to the Purchaser. Upon completion of the LLC Conversion, the Company shall be a limited liability company wholly owned by Holdings.

SECTION 5.14. CUSTOMER ACCOUNTS. At least two but no more than five Business Days prior to the Closing, the Company shall have delivered schedules (which information contained therein shall be as of a date no earlier than five Business Days prior to the date of the Closing) in electronic format setting forth (a) for each customer account, the (i) account number, (ii) name and address of the account holder, (iii) number of trades in the last twelve months, if any, (iv) net equity in the account, if any, and (iv) commissions and email addresses and (b) the Company's marketing database, including the email addresses contained therein, prospects and customers.

SECTION 5.15. FURTHER ACTION. Each of the parties hereto shall from time to time, whether before or after the Closing, use all reasonable efforts to take, or cause to be taken, all action, do or cause to be done all things necessary, proper or advisable under applicable Legal Requirements, and execute and deliver such documents and other papers, as may be reasonably requested by the other party or required to carry out the purposes and intents of this Agreement and the Ancillary Agreements and consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

SECTION 5.16. INTERCOMPANY ACCOUNTS. All intercompany accounts between the Company, on the one hand, and its Affiliates, on the other hand, shall be settled at or prior to the Closing.

SECTION 5.17. EMPLOYEE ACCOUNTS. If and to the extent that employees of Credit Suisse First Boston Corporation or its Affiliates retain or open brokerage accounts or other accounts at the Company after the Closing, the Purchaser shall cooperate, at no cost to Purchaser that is not promptly reimbursed, with Credit Suisse First Boston Corporation or any such Affiliates to ensure that trading in such accounts complies with the employee trading restrictions (including Credit Suisse First Boston Corporation's watch list) instituted by Credit Suisse First Boston Corporation or its Affiliates, to the extent such restrictions are consistent with normal regulatory compliance and disclosure practices, from time to time prior to the Closing. At or prior to Closing, Seller shall provide to Purchaser a list of all such employee accounts as of a date not earlier than five Business Days prior to Closing.

SECTION 5.18. TRANSFER OF ASSETS. At or prior to the Closing, the Seller shall cause all right, title and interest to the assets described in Section 2.02 and 5.07(b) of the Disclosure Schedule to be transferred to the Company pursuant to an assignment agreement in form and substance (not including purchase price, which shall be determined pursuant to Section 7.06(f)) reasonably satisfactory to the Purchaser.

SECTION 5.19. CERTAIN CONSENTS. With respect to any Contracts to which any of the Seller or any of its Affiliates is a party that (a) cannot be assigned without the consent of the other party thereto, and (b) are integral to the conduct of the business of the Company as conducted on the date of this Agreement, the Seller will, and will cause its applicable Affiliates to, use its commercially reasonable efforts to obtain such third party consents as are necessary to assign such Contracts to the Company. The Seller and the Purchaser agree that, in the event any such assignment cannot be obtained prior to the Closing, the Seller and its applicable Affiliate (including, prior to the Closing, the Company), on the one hand, and the Purchaser and, following the Closing, the Company, on the other hand, will cooperate with each other in attempting to obtain such consent as promptly as practical following the Closing. Unless and until such consent is obtained, the Seller shall, or shall cause its applicable Affiliate to, either (i) provide the Company with the rights and benefits of the affected Contract, in which case, the Company shall assume the obligations and burdens thereunder, or (ii) reimburse the Company for 50% of any incremental additional costs reasonably incurred by the Company during the period beginning on the Closing Date and ending on the date that is eighteen months from the Closing Date in obtaining comparable rights and benefits to those provided under the affected Contract.

EMPLOYEE MATTERS

SECTION 6.01. GENERAL. The Purchaser hereby agrees that, effective as of the Closing, it shall, or shall cause the Company to, provide to Active Employees employee benefits and compensation comparable in the aggregate to the employee benefits and compensation provided to similarly situated employees of Harris Investorline Inc. as of the Closing.

SECTION 6.02. SERVICE RECOGNITION. Employees of the Company shall receive credit for purposes of eligibility to participate, vesting and, for vacation and severance plans only, determination of the levels of benefits, but not for purposes of any benefit accruals under any plan, under any employee benefit plan, program or arrangement established or maintained for such employees by the Purchaser or the Company for service accrued or deemed accrued prior to and on the Closing Date, to the extent such service was recognized for such employees for similar purposes under comparable plans to which the Company was a party; PROVIDED, HOWEVER, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit.

SECTION 6.03. WARN. The Company shall be responsible for any notices required to be given under, or otherwise comply with, WARN or any applicable state or local statutes or regulations relating to any plant closing or mass layoff (or similar triggering event) with respect to employees of the Company prior to the Closing Date. The Purchaser shall be responsible for any notices required to be given under, or otherwise comply with, WARN or any applicable state or local statutes or regulations relating to any plant closing or mass layoff (or similar triggering event) with respect to its employees on or after the Closing Date. For the purposes of WARN and this Agreement, the Closing Date is and shall be the same as the "effective date" within the meaning of WARN.

ARTICLE VII

TAX MATTERS

SECTION 7.01. TAX INDEMNITIES. (a) From and after the Closing Date, the Seller shall indemnify and hold the Purchaser, the Company and their respective officers, directors, employees and Affiliates harmless from and against any and all Taxes, losses or other costs arising out of or incident to

(i) the imposition, assessment or assertion against the Purchaser, any Affiliate of the Purchaser, the Company or any subsidiary of the Company of any Taxes with respect to any taxable period or portion thereof that ends on or before the Closing Date;

(ii) the breach or inaccuracy of any representation or warranty made by the Seller in Section 3.20 (except with respect to representations made in Section 3.20(a) where the Taxes, losses or other costs result from the Purchaser's failure to file any Tax Returns for periods ending after the Closing Date);

(iii) the breach of any covenant of Seller contained in this Article VII;

(iv) with respect to taxable periods beginning before the Closing Date and ending after the Closing Date, Taxes imposed on the Company which are allocable, pursuant to Section 7.01(b), to the portion of such period ending on the Closing Date;

(v) any Taxes of any other person for whom the Company may be liable as a result of filing a Tax Return on a combined, consolidated, unitary or affiliated basis in any period that begins before the Closing Date (whether such liability is imposed pursuant to Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign law) as a successor, by contract or otherwise; and

(vi) the LLC Conversion (including, without limitation, any net loss of or reduction in Tax benefits that would have been available to the Purchaser, the Company, the LLC or any of their respective Affiliates or successors had the transactions contemplated by this Agreement been structured as a sale of 100% of the corporate stock of the Company by Seller to Purchaser with the relevant parties making a valid election pursuant to Section 338(h)(10) of the Code (and any similar election available under state or local Tax law) rather than a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document sale of the LLC Interests following the LLC Conversion); PROVIDED, HOWEVER, that the Purchaser, the Company, the LLC or any of their respective Affiliates or successors shall fully cooperate with the Seller in taking any reasonable actions requested by Seller to mitigate Seller's costs with respect to this clause (vi), including, without limitation,

(x) filing all required Tax Returns in a manner consistent with the Intended Characterization (as defined in Section 7.07) for: (A) all federal tax purposes and (B) for all other income tax purposes, except to the extent that the Purchaser shall receive an opinion from nationally recognized counsel that it will be subject to penalties for treating this transaction as an asset purchase; and

(y) for purposes of filing Canadian income tax returns, the Purchaser and its Affiliates shall take the position that the LLC did not earn any "Foreign Accruals Property Income" for the pre-Closing portion of any Tax period that begins before the Closing Date and ends after the Closing Date, except to the extent that the Purchaser shall receive an opinion from nationally recognized counsel that it will be subject to penalties for taking such position.

(b) For purposes of this Agreement, in the case of any Tax imposed on the Company that is imposed on a periodic basis and is payable for a taxable period that begins before the Closing Date and ends after the Closing Date, the portion of such Taxes which is payable for the portion of such taxable period ending on the Closing Date shall be (i) in the case of any Tax other than a Tax based upon or measured by gross or net income or receipts, the amount of such Tax for the entire taxable period (or, in the case of such Taxes determined on an arrears basis, the amount of such Tax for the immediately preceding period) multiplied by a fraction, the numerator of which is the number of days in the portion of such taxable period ending at the end of the day on the Closing Date and the denominator of which is the number of days in the entire taxable period and (ii) in the case of Taxes that are either based upon or measured by gross or net income or receipts, the amount which would be payable if the relevant taxable period ended on the Closing Date.

SECTION 7.02. REFUNDS AND TAX BENEFITS. (a) The Purchaser shall promptly pay to the Seller the amount of any refund or credit (including any interest paid or credited with respect thereto) received or used, in the case of a credit, by the Purchaser or by the Company of Taxes (i) relating solely to taxable periods or portions thereof ending on or before the Closing Date or (ii) attributable solely to an amount paid by the Seller under Section 7.01 hereof. The Purchaser shall cooperate in filing refund claims requested by the Seller in accordance with Section 7.04.

(b) Any amount otherwise payable by the Seller under Section 7.01 shall be reduced by the estimated present value of any net Tax benefit reasonably expected to be available to the Purchaser or its Affiliates in connection with the payment of Taxes for which the Seller is responsible under Section 7.01. For the avoidance of doubt, the estimated present value of any net Tax benefit referred to in the previous sentence (and in Section 9.02(d)) shall be reduced (but not below zero) by the estimated present value of any Tax costs (including, without limitation, any lost amortization deductions from reduction in basis of assets) reasonably expected to be incurred by Purchaser, the LLC or any of their respective Affiliates or successors as a result of the receipt of any indemnity payment. The estimated present value of any net Tax benefit and the estimated present value of any Tax costs referred to in this subsection (and in Section 9.02(d)) shall be computed using the applicable federal rate for the appropriate time period as defined in Section 1274(d)(1) of the Code as the discount rate and a tax rate for all relevant years of 38%.

SECTION 7.03. CONTESTS. (a) After the Closing Date, the Purchaser shall promptly notify the Seller in writing of the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on the Purchaser or the Company which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification by the Seller under Section 7.01 ("INDEMNIFICATION ITEM").

(b) In the case of a Tax audit or administrative or judicial proceeding (or part thereof) ("PROCEEDING") that relates solely to an Indemnification Item for which the Seller is exclusively liable under Section 7.01 (a "CONTEST") , the Seller shall have the sole right, at its expense, to control the conduct of such Contest that relates solely to the Indemnification

(i) obtain the Purchaser's written consent to any advisors (including any law or accounting firm) retained by the Seller with respect to any Contest regarding any Indemnification Item, which consent shall not be unreasonably withheld or delayed, and which consent is deemed to have been given for KPMG, LLP and its affiliates and any successor firms, and Shearman & Sterling and any successor firms,

(ii) keep the Purchaser informed of the progress of any Contest,

(iii) allow the Purchaser to review and comment on all materials to be submitted to any Governmental Authority in connection with any Contest,

(iv) provide the Purchaser with reasonable notice in advance of all meetings, telephone conversations and other communications ("COMMUNICATIONS") with any

Governmental Authority in connection with any Contest, and allow Purchaser's representatives to participate in any Communications, and

(v) not settle or compromise (or offer to settle or compromise) any Contest without the written consent of the Purchaser, which consent shall not be unreasonably withheld or delayed.

However, for any Contest that does not impact Taxes of the Purchaser, the LLC or their respective successors or Affiliates for periods after the Closing, the Purchaser will (a) not have any of the rights listed in subsections (i) through (v) above and (b) be deemed to have consented to any settlement or compromise proposal by the Seller. The Purchaser and the Seller agree to cooperate, and the Purchaser agrees to cause the Company to cooperate, in the defense against or compromise of any claim in any audit or proceeding, including, by executing appropriate powers of attorney empowering representatives of the Seller. Any expenses or fees incurred by the Purchaser in connection with the activities described in subsections (i) through (v) above shall not be payable or indemnified by Seller.

(c) In the case of a Proceeding that relates to an issue where both the Seller and the Purchaser would reasonably be expected to have liability and the Purchaser's reasonably anticipated liability with respect to such issue exceeds the Seller's reasonably anticipated liability with respect to such issue, the Purchaser shall have the sole right, at its expense, to control the conduct of such Proceeding; PROVIDED, HOWEVER, that Seller shall have the same rights with respect to such Proceeding as are granted to the Purchaser with respect to a Contest pursuant to Section 7.03(b)(i) through (v) (except that the deemed consent to representation by Shearman & Sterling (and successors) in Section 7.03(b)(i) shall be replaced by deemed consent to representation by Skadden, Arps, Slate, Meagher & Flom LLP and affiliates (and successors)).

(d) In the case of a Proceeding that relates to an issue where both the Seller and the Purchaser would reasonably be expected to have liability with respect to that issue and the Seller's reasonably anticipated liability with respect to such issue exceeds the Purchaser's reasonably anticipated liability with respect to such issue, the Seller shall have the sole right, at its expense, to control the conduct of such Proceeding; PROVIDED, HOWEVER, that Purchaser shall have the same rights with respect to such Proceeding as are granted to the Purchaser with respect to a Contest pursuant to Section 7.03(b)(i) through (v).

SECTION 7.04. COOPERATION AND EXCHANGE OF INFORMATION. The Seller and the Purchaser will provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax return, amended return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes. Such cooperation and information shall include providing copies of relevant Tax returns or portions thereof, together with accompanying schedules and related work papers and documents relating to rulings or other determinations by taxing authorities. Each party shall make its employees reasonably available on a mutually convenient basis to provide explanations of any documents or information provided hereunder. Each party will retain all returns, schedules and work papers and all material records or other documents relating to Tax matters of the Company for the taxable period that includes the Closing Date and for all prior taxable periods until the later of (i) the expiration of the statute of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 41 limitations of the taxable periods to which such returns and other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax periods or (ii) eight years following the due date (without extension) for such returns; provided, however, that a party shall not dispose of any such materials if at least 90 Business Days before the later of the end of either of the periods described in clause (i) or (ii) the other party has notified the disposing party of its desire to review such material in which case such other party shall be given an opportunity, at its cost and expense, to remove and retain all or any part of such materials. Any information obtained under this Section 7.04 shall be kept confidential, except as may be otherwise necessary in connection with the filing of returns or claims for refund or in conducting an audit or other proceeding.

SECTION 7.05. CONVEYANCE TAXES. The Seller shall be liable for, shall hold the Purchaser harmless against, and agrees to pay all sales, transfer, stamp, stock transfer, value added, use, real property transfer or gains and similar Taxes that may be imposed upon, or payable or collectible or incurred in connection with this Agreement and the transactions contemplated hereby. The Purchaser and Seller agree to cooperate in the execution and delivery of all instruments and certificates necessary to enable the Seller and/or Purchaser to comply with any pre-Closing filing requirements.

SECTION 7.06. MISCELLANEOUS. (a) For Tax purposes, the parties agree to treat all payments made under this Article VII (other than payments made by the Seller pursuant to Section 7.05), under any other indemnity provisions contained in this Agreement, and for any misrepresentations or breaches of warranties or covenants, as adjustments to the Purchase Price.

(b) Intentionally left blank.

(c) For purposes of this Article VII and Section 3.20 of this Agreement, all references to the Purchaser and the Seller shall include their successors, if any; and for purposes of Sections 7.03 and 7.04, shall include their Affiliates.

(d) Notwithstanding any provision in this Agreement to the contrary, the covenants and agreements of the parties hereto contained in this Article VII (i) shall be unconditional and absolute and (ii) shall survive the Closing and shall remain in full force and effect until 90 days after the expiration of the applicable statutes of limitations (taking into account any extensions or waivers thereof).

(e) All Tax sharing agreements or similar agreements with respect to or involving the Company shall be terminated on or prior to the Closing Date and, after the Closing Date, none of the Seller, its Affiliates or the Company shall be bound thereby or have any liability thereunder, including with respect to any payable or receivable thereunder.

(f) The sum of the Purchase Price and the amount of liabilities of the Company (as determined for federal income Tax purposes) (the "RELEVANT LIABILITIES") shall be allocated among the assets of the Company as agreed by Purchaser and Seller as of the Closing Date in accordance with the "Residual Method" as provided in the Treasury Regulations promulgated under Sections 338 and 1060 of the Code. Any subsequent adjustments to the sum of the Purchase Price and the Relevant Liabilities shall be reflected in the allocation as agreed by

Purchaser and Seller hereunder in a manner consistent with such Treasury Regulations. The Seller and the Purchaser shall timely file Form 8594 (and any similar forms required under state or local tax law) in accordance with the requirements of Section 1060 of the Code (or state or local tax law, as the case may be) and this Section 7.06(f). In the event that Purchaser and Seller are unable to agree on the allocation described in the previous sentence within 120 days following the Closing, Purchaser and Seller shall appoint KPMG as an independent appraiser (the "APPRAISER") to determine the allocation. (In the event KPMG is unable to serve as the Appraiser, the Purchaser and Seller shall jointly select another party as the Appraiser.) The expenses of the Appraiser shall be borne equally by Purchaser and Seller.

(g) For avoidance of doubt, nothing in Article VII or Article IX shall require the Seller to indemnify the Purchaser for the same Taxes, losses or costs more than once.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 7.07. INTENDED CHARACTERIZATION. Each of the Seller and the Purchaser covenants and agrees that

(a) it intends for (i) the LLC to be treated as a disregarded entity at all times beginning at the time of the LLC Conversion and ending with the Closing and (ii) all transactions contemplated by this Agreement to be characterized as a purchase of assets by Purchaser from Donaldson, Lufkin & Jenrette Securities Corporation, in each case for all United States federal, state and local income Tax purposes (the "INTENDED CHARACTERIZATION");

(b) it will not (and will cause all of its Affiliates to not) file any applicable Tax Returns taking a position that is inconsistent with the Intended Characterization; and

(c) it will not (and will cause all of its Affiliates to not) take any position in an audit, litigation or other proceeding that is inconsistent with the Intended Characterization.

ARTICLE VIII

CONDITIONS TO CLOSING

SECTION 8.01. CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) Each of the representations and warranties of the Purchaser contained in this Agreement that is qualified by materiality shall have been true and correct when made and shall be true and correct as of the Closing and each of the representations and warranties that is not so qualified shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing, with the same force and effect as if made as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date), in each case, except where the failure to be true and correct would not have a material adverse effect on the ability of the Purchaser to perform its obligations under this Agreement or consummate the transactions contemplated hereby, (ii) the covenants and agreements contained in this Agreement to be complied with by the Purchaser on or before the

Closing shall have been complied with in all material respects and (iii) the Seller shall have received a certificate from the Purchaser to such effect signed by a duly authorized officer thereof;

(b) HSR ACT. Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the LLC Interests contemplated hereby shall have expired or shall have been terminated;

(c) NO ORDER. No Governmental Authority shall have issued an Order or taken any other action that is then in effect restraining, enjoining or otherwise having the effect of making illegal any of the transactions contemplated by this Agreement or the Ancillary Agreements or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and the Ancillary Agreement;

(d) RECEIPT OF RELEASE. The Seller shall have received the release described in Section 5.08(a) of this Agreement;

(e) OPINION OF COUNSEL. The Seller shall have received an opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois), dated the Closing Date, in form and substance reasonably acceptable to the Seller and its counsel addressing the matters described in Exhibit 8.01(e); and

(f) ANCILLARY AGREEMENTS. The Purchaser shall have executed and delivered to the Seller each of the Ancillary Agreements to which it is a party.

SECTION 8.02. CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) Each of the representations and warranties of the Seller contained in this Agreement shall have been true and correct when made and shall be true and correct as of the Closing, with the same force and effect as if made as of the Closing (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date), except where the failure to be so true and correct (without giving effect to any limitation or qualification as to "materiality" (including the word "material") or "Material Adverse Effect" set forth therein) would not, individually or in the aggregate, have a Material Adverse Effect, (ii) the covenants and agreements contained in this Agreement to be complied with by the Seller on or before the Closing shall have been complied with in all material respects and (iii) the Purchaser shall have received a certificate of the Seller as to the matters set forth in clauses (i) and (ii) above signed by a duly authorized officer of the Seller;

(b) HSR ACT. Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the LLC Interests contemplated hereby shall have expired or shall have been terminated;

(d) RELEASE. The Purchaser shall have received the release (with respect to the period prior to the Closing Date) described in Section 5.08(b) of this Agreement.

(e) RESIGNATIONS OF THE COMPANY'S DIRECTORS. The Purchaser shall have received the resignations, effective as of the Closing, of all the directors and officers of the Company, except for such persons as shall have been designated in writing prior to the Closing by the Purchaser to the Seller;

(f) ANCILLARY AGREEMENTS. The Seller or its applicable Affiliate shall have executed and delivered to the Purchaser each of the Ancillary Agreements to which it is a party;

(g) CANADIAN APPROVAL. The Purchaser shall have received any approval of the OSFI necessary for the consummation of the transactions described herein; and

(h) ADDITIONAL DOCUMENTS. Each of the following documents shall have been delivered to the Purchaser:

(x) an opinion of Shearman & Sterling, dated the Closing Date, in form and substance reasonably acceptable to the Purchaser and its counsel addressing the matters described in Exhibit 8.02(h)(i); and

(y) a certificate in form and substance reasonably satisfactory to the Purchaser to the effect that the Seller is not a "foreign person" within the meaning of Section 1445 of the Code.

ARTICLE IX

INDEMNIFICATION

SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties set forth in this Agreement or any certificate delivered pursuant hereto shall survive for a period of eighteen months following the Closing Date; provided, however, that the representations and warranties set forth in Sections 3.03, 3.19(g) and 3.20 shall survive until the 90th day following the expiration of the applicable statute of limitations. Notwithstanding the foregoing, Section 3.17 shall survive for a period of three years from the Closing Date solely to the extent a claim for indemnification for any breach of Section 3.17 pertains to infringement of any patent of a Third Party by the Licensed Software (as defined in the iNautix Agreement). The covenants and agreements contained

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document herein shall survive the Closing without limitation as to time unless the covenant or agreement specifies a term, in which case such covenant or agreement shall survive for such specified term. Except as provided in Article VII or in the case of fraud, the sole and exclusive remedy for any breach of any

45 representation, warranty, covenant or agreement shall be pursuant to Section 9.02. Under no circumstances shall either party be liable to the other parties for consequential, incidental or punitive damages, except where such damages have been awarded to third parties with respect to claims for which a party is entitled to be indemnified hereunder.

SECTION 9.02. INDEMNIFICATION. (a) From and after the Closing, the Purchaser shall be entitled to assert claims against the Seller in respect of any liabilities, costs or expenses (including reasonable expenses of investigation and reasonable attorneys' fees), judgments, fines, losses, claims, damages and amounts paid in settlement (collectively, "DAMAGES") arising from or in connection with (i) any inaccuracy in any representation or the breach of any warranty of the Seller under this Agreement (except representations and warranties contained in Section 3.03 or Section 3.19(g)) or the certificate delivered pursuant to 8.02(a), in each case without giving effect to any materiality, "Material Adverse Effect" or knowledge qualifiers set forth therein, (ii) any inaccuracy in any representation or the breach of any warranty of the Seller contained in Section 3.03 or in Section 3.19(g), (iii) the failure of the Seller to duly perform or observe any term, provision, covenant or agreement to be performed or observed by the Seller pursuant to this Agreement, (iv) the termination of any employees of the Company prior to the Closing, including, notwithstanding anything to the contrary in Section 6.03, any related Damages arising under the WARN Act, (v) the matters set forth in Section 5.08(b), (vi) the application of Section 5.12(b) including but not limited to any Damages reasonably incurred in respect of business interruption, (vii) the transactions described in the Schedule TO filed by a wholly-owned subsidiary of Credit Suisse First Boston, Inc. and dated July 24, 2001, as subsequently amended, (viii) the LLC Conversion and the consequences thereof (other than Tax, which is the subject of Article VII), including but not limited to, the termination, amendment or modification of any Contract as a result of such LLC Conversion that would not have occurred had the Purchaser acquired 100% of the capital stock of the Company and made a valid election pursuant to Section 338(h)(10) of the Code, (ix) any claim by any Person for brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with the Seller or the Company (or any Person acting on their behalf) in connection with the transactions contemplated by this Agreement or the sale of the Company and (x) the matters set forth in Section 9.02 of the Disclosure Schedule. Notwithstanding anything herein to the contrary, no claims by the Purchaser shall be asserted pursuant to this Section 9.02(a)(i) unless and until the aggregate amount of Damages that would otherwise be payable pursuant to this Section 9.02(a)(ii) exceeds $10,000,000 (the "DEDUCTIBLE AMOUNT"), in which case the Purchaser shall be entitled to receive only that amount in excess of the Deductible Amount. In calculating the Deductible Amount or Damages hereunder, all claims for Damages which individually total less than $5,000 shall be excluded in their entirety, and the Purchaser shall have no recourse for such Damages. Notwithstanding anything herein to the contrary, the maximum aggregate liability of the Seller under Section 9.02(a)(i) shall not exceed $208,000,000.

(b) From and after the Closing, the Seller shall be entitled to assert claims against the Purchaser in respect of any Damages arising from or in connection with (i) any inaccuracy in any representation or the breach of any warranty of the Purchaser under this Agreement or (ii) the failure of the Purchaser to duly perform or observe any term, provision, covenant or agreement to be performed or observed by the Purchaser pursuant to this Agreement. Notwithstanding anything herein to the contrary, no claims by the Seller shall be asserted

46 pursuant to this Section 9.02(b)(i) unless and until the aggregate amount of Damages that would otherwise be payable pursuant to this Section 9.02(b)(i) exceeds the Deductible Amount, in which case the Seller shall be entitled to receive only that amount in excess of the Deductible Amount. In calculating the Deductible Amount or Damages hereunder, all claims for Damages which individually total less than $5,000 shall be excluded in their entirety, and the Seller shall have no recourse for such Damages. Notwithstanding anything herein to the contrary, the maximum aggregate liability of the Purchaser under Section 9.02(b)(i) shall not exceed $208,000,000.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) No action, claim or setoff for Damages under this Section 9.02 shall be brought or made (i) with respect to claims for Damages resulting from a breach of any covenant contained in this Agreement after the date on which such covenant shall terminate pursuant Section 9.01 hereof; and (ii) with respect to claims for Damages resulting from a breach of any representation or warranty, after the date on which such representation or warranty shall terminate pursuant to Section 9.01 hereof; PROVIDED, HOWEVER, that any claim made with reasonable specificity by the party seeking to be indemnified within the time periods set forth above shall survive until it is finally and fully resolved.

(d) For all purposes of this Article IX, "Damages" shall be net of (i) any insurance or other recoveries actually received (net of Taxes or other expenses incurred in connection with such recovery) by the indemnified party or its Affiliates in connection with the facts giving rise to the right of indemnification and (ii) the estimated present value of any net Tax benefit reasonably expected to be available to such indemnified party or its Affiliates. In determining the estimated present value of any net Tax benefit, the principles of Section 7.02(b) shall apply.

SECTION 9.03. THIRD PARTY CLAIMS. (a) Upon receipt by the party seeking to be indemnified pursuant to Section 9.02 (the "INDEMNITEE") of notice of any action, suit, proceedings, audit, claim, demand or assessment (each, a "CLAIM") against it which might give rise to a claim for Damages, the Indemnitee shall give prompt written notice thereof (which shall be within ten days of receipt by the Indemnitee of such Claim) to the party from which it seeks to be indemnified (the "INDEMNITOR") indicating the nature of such Claim and the basis therefor; PROVIDED, HOWEVER, that any delay or failure by the Indemnitee to give notice to the Indemnitor shall relieve the Indemnitor of its obligations hereunder only to the extent, if at all, that it is materially prejudiced by reason of such delay or failure.

(b) Subject to Section 9.03(c), if the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee against any Damages that may result from a Claim, then the Indemnitor shall be entitled to assume and control the defense of such Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnitee within five days of the receipt of notice from the Indemnitee delivered pursuant to Section 9.03(a). The Indemnitee agrees to cooperate fully with the Indemnitor and its counsel in the compromise of, or defense against, any such Claim; PROVIDED, HOWEVER, that the Indemnitor shall not settle any such Claim without the prior written consent of the Indemnitee unless the relief consists solely of money damages and includes a provision whereby the plaintiff or claimant in the matter releases the Indemnitee from all liability with respect thereto, in which case no consent of the Indemnitee shall be required. Notwithstanding an election to assume the defense

47 of such action or proceeding, the Indemnitee shall have the right to employ separate counsel and to participate in the defense of such action or proceeding, and the Indemnitor shall bear the reasonable fees, costs and expenses of such separate counsel if (A) the Indemnitor shall not have employed counsel reasonably satisfactory to the Indemnitee to represent it within a reasonable time after notice of the institution of such action or proceeding, (B) the Indemnitee shall have determined in good faith that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnitor inappropriate or (C) the Indemnitor shall have authorized the Indemnitee to employ separate counsel at the Indemnitor's expense. In the event the Indemnitee employs separate counsel pursuant to clause (A) and/or (C) above, but not in the case of clause (B) above, the Indemnitee and its counsel shall cooperate with the Indemnitor and its counsel and keep such person informed of all material developments relating to any such Claims and provide copies of all relevant correspondence and documentation relating thereto. All costs and expenses incurred in connection with the Indemnitee's cooperation shall be borne by the Indemnitor. In any event, the Indemnitee shall have the right at its own expense to participate in the defense of such asserted liability. In no event shall the Indemnitee settle any claim without the written consent of the Indemnitor (which consent will not be unreasonably withheld).

(c) Notwithstanding the foregoing, if a claim is brought by a Governmental Authority, the Indemnitee may, by notice to the Indemnitor, assume the exclusive right to defend, compromise, or settle such Proceeding, but the indemnifying party will not be bound by any determination of a Proceeding so defended or any compromise or settlement so effected without its consent.

ARTICLE X

SECTION 10.01. TERMINATION. This Agreement may be terminated at any time prior to the Closing:

(a) by either the Seller or the Purchaser if the Closing shall not have occurred by June 30, 2002; PROVIDED, HOWEVER, that the right to terminate this Agreement under this Section 10.01(a) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;

(b) by either the Purchaser or the Seller in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable;

(d) by Purchaser, in the event of the occurrence of any breach of any representation, warranty or covenant of the Seller, in each case that may make the satisfaction of any of the conditions set forth in Section 8.02 impossible; or

(e) by the Seller, in the event of the occurrence of any breach of any representation, warranty or covenant of the Purchaser, in each case that may make the satisfaction of any of the conditions set forth in Section 8.01 impossible.

SECTION 10.02. EFFECT OF TERMINATION. In the event of termination of this Agreement as provided in Section 10.01, this Agreement shall forthwith become void and there shall be no liability on the part of either party hereto except (a) as set forth in Section 5.03 and Article XI and (b) that nothing herein shall relieve either party from liability for any breach of this Agreement.

SECTION 10.03. WAIVER. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

ARTICLE XI

GENERAL PROVISIONS

SECTION 11.01. EXPENSES. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

SECTION 11.02. NOTICES. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02):

(a) if to the Seller:

Credit Suisse First Boston (USA), Inc. Eleven Madison Avenue

Attention: Neil Radey

with a copy to:

Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Telecopy: (212) 848-7179 Attention: Clare O'Brien, Esq.

(b) if to the Purchaser:

Bankmont Financial Corp. 111 West Monroe Chicago, Illinois 60603 Telecopy: (312) 461-3869 Attention: Paul Reagan, Esq.

with a copy to:

Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 Telecopy: (312) 407-0672 Attention: Gary P. Cullen, Esq.

SECTION 11.03. PUBLIC ANNOUNCEMENTS. No party to this Agreement shall make, or cause to be made, any press release, public announcement or communication to employees or customers in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any third party without the prior written consent of the other party unless otherwise required by any Legal Requirement or stock exchange regulation, and the parties shall cooperate as to the timing and contents of any such press release, public announcement or communication.

SECTION 11.04. HEADINGS. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

SECTION 11.05. SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Legal Requirement or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

SECTION 11.06. ENTIRE AGREEMENT. This Agreement and the Ancillary Agreements constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, between the Seller and the Purchaser with respect to the subject matter hereof and thereof.

SECTION 11.07. ASSIGNMENT. This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Seller and the Purchaser (which consent may be granted or withheld in the sole discretion of the Seller or the Purchaser, as the case may be); PROVIDED, HOWEVER, that the Seller or the Purchaser may assign this Agreement to an Affiliate without such consent; PROVIDED that no such assignment shall relieve the Seller or the Purchaser, as the case may be, of its obligations if the assignee does not perform such obligations.

SECTION 11.08. NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or

SECTION 11.09. AMENDMENT. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Seller and the Purchaser or (b) by a waiver in accordance with Section 10.03.

SECTION 11.10. GOVERNING LEGAL REQUIREMENT. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed in and to be performed entirely within that state. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any Delaware state or federal court sitting in the City of Wilmington. The parties hereto unconditionally and irrevocably agree and consent to the exclusive jurisdiction of, and service of process and venue in, the courts of the State of Delaware and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and further agree not to commence any such action, suit or proceeding except in any such court.

SECTION 11.11. COUNTERPARTS. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

SECTION 11.12. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

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

CREDIT SUISSE FIRST BOSTON (USA), INC.

By /s/ NEIL RADEY ------Name: Neil Radey Title: Managing Director

BANKMONT FINANCIAL CORP.

By /s/ Paul V. Reagan ------Name: Paul V. Reagan Title: General Counsel

DISCLOSURE SCHEDULE

to the

PURCHASE AGREEMENT

between

CREDIT SUISSE FIRST BOSTON (USA), INC.

and

BANKMONT FINANCIAL CORP.

dated as of November 28, 2001

SELLER'S DISCLOSURE SCHEDULE ------

This Disclosure Schedule has been prepared and delivered in connection with the Purchase Agreement dated as of November 28, 2001 (the "PURCHASE AGREEMENT") between Credit Suisse First Boston (USA), Inc. (the "SELLER") and Bankmont Financial Corp. (the "PURCHASER"). Certain agreements and other matters are listed in this Disclosure Schedule for informational purposes notwithstanding the fact that, because they do not rise above applicable materiality thresholds or otherwise, they are not required to be listed herein by the terms of the Purchase Agreement. In no event shall the listing of such agreements or other matters in this Disclosure Schedule be deemed or interpreted to broaden or otherwise amplify the representations and warranties contained in the Purchase Agreement.

Disclosure of any fact or item in any schedule referenced by a particular paragraph or Section in the Purchase Agreement shall, should the existence of the fact or item or its contents be relevant to any other paragraph or Section of the Purchase Agreement, be deemed to be disclosed with respect to such other paragraph or Section of the Purchase Agreement whether or not an explicit cross-reference appears, to the extent that the relevance of such disclosure is readily apparent.

The section headings in this Disclosure Schedule are for convenience of reference only and shall not be deemed to alter or affect the express description of the sections of this Disclosure Schedule as set forth in the Purchase Agreement.

Except as otherwise defined therein, capitalized terms used herein have the meanings assigned in the Purchase Agreement.

Section 2.02

PURCHASE PRICE

See attached spread sheet.

Schedule 2.06(a)

PREPARATION OF THE COMPANY'S CLOSING BALANCE SHEET

For purposes of preparing the Closing Balance Sheet, the Closing Balance Sheet shall be prepared as of the Closing Date and in a manner consistent with the preparation of the balance sheet of the Company attached to the Purchase Agreement as Exhibit 2.06(a), as modified to take into account the following:

A. Exclude the following accounts:

1. Non-marketable investments - CSFB GL account BD1340/ DLJ account 1618852

2. Intercompany obligations - CSFB GL AD5605/DLJ account 1417501, CSFB account AD6175/DLJ account 1417718, CSFB account AD6180/DLJ account 1417719, CSFB account AD6185/DLJ account 1417720, CSFB account 6195/DLJ account 1417722

3. Accrued expense obligation - CSFB GL account CD1740/DLJ

B. As part of the preparation of the Closing Balance Sheet, all general ledger accounts shall be reconciled to the underlying books and records of the Company. Unreconciled differences shall be written off.

Section 3.02

ORGANIZATION, AUTHORITY AND QUALIFICATION OF THE COMPANY

The Company is duly licensed and qualified to do business in the following jurisdictions: a) Arizona b) California c) Connecticut d) Colorado e) Washington D.C. f) Florida g) Georgia h) Illinois i) Maryland j) Minnesota k) New Jersey l) New York m) North Carolina n) Oregon o) Pennsylvania p) Texas q) Utah r) Virginia

Section 3.06(b)

NO CONFLICT

(a) LEASE AGREEMENT REGARDING THE SHOPPES AND MARKET AT ALBRECHTS, LOCATED IN LOWER MERION TOWNSHIP, PA. Section 22(a) of the lease provides that landlord consent is required for any "assignment encumbrancing or subletting which would otherwise occur by operation of law, merger, consolidation, reorganization, transfer or other change of Tenant's corporate or proprietary structure, stock or equity."

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) LEASE AGREEMENT REGARDING THE SHOPS AT GAINEY VILLAGE, LOCATED IN SCOTTSDALE, AZ. Section 12.1 of the lease provides that the "change or conversion of Tenant to any company, partnership or other entity which possesses the characteristics of limited liability" is deemed a transfer requiring Landlord's consent under the lease. Additionally, Tenant's exclusive use clause becomes void upon such transfer (Article 1).

Section 3.07(a)

CONSENTS AND APPROVALS

(a) The execution, delivery and/or performance of the Purchase Agreement will require consents, approvals, authorizations or notifications in connection with the following agreements:

o CSFBdirect Tournament of Champions Title Sponsorship Agreement, dated June 22, 2000, between Event Engine, Inc. and CSFBdirect Inc.

o Cusip Electronic Distribution Agreement, dated March 26, 2001, between Standard & Poor's Cusip Service Bureau and CFSBdirect Inc.

o Content Distribution Agreement, dated July 7, 1999, amended as of August 21, 2001, between Dow Jones & Company, Inc. and DLJdirect Inc.

o Long Term News License Agreement, dated as of May 1, 2001, between and among Dow Jones & Company, Inc. and CSFBdirect Inc., Pershing Clearing Corporation and Credit Suisse First Boston Corporation

o Charter Media Content License Agreement, dated December 12, 1997 between Charter Media, Inc. and DLJdirect Inc.

o TIN Website Agreement, dated December 29, 1997, between Thomson Investors Network and DLJdirect Inc.

o Intuit Marketing Agreement Online Investment Services, dated May 8, 1998, between Intuit Inc. and DLJdirect Inc.

o Wireless Internet Service Agreement, dated as of January 8, 2001, between Sprint Spectrum L.P. and DLJdirect Inc.

o Sublicense Agreement dated March 11, 1999, between DLJ Holdings, Inc. and DLJdirect Inc.(1)

o Intercompany Services Agreement, dated August 14, 1996, between PC Financial Networks, Holdings Inc. and PC Financial Networks, Inc.

o Dow Jones Newswire Distribution and Sales Agency Agreement dated October 9, 2001, between Dow Jones & Co., Inc. and the Company

o Content Distribution Agreement, dated May 1, 2000, between Omnisky, Inc. and DLJdirect Inc.

------(1) This agreement will be superceded by the Ancillary Agreements to be entered into by Purchaser and the Company upon Closing.

o Morningstar, Inc. License Agreement, effective November 9, 2001 between Morningstar, Inc. and CSFBdirect Inc.

o Morningstar, Inc. License Agreement, effective October 9, 2001, between Morningstar, Inc. and CSFBdirect Inc.

o Morningstar, Inc. License Agreement dated as of December 1,

o Co-Marketing Agreement, dated January 21, 2000, between GoAmerica Communications Corp. and DLJdirect Inc.

o License Agreement Terms and Conditions dated as of September 13, 1999 between DLJdirect Inc. and CommScan L.L.C.

o License Agreement, dated September 2, 1997, between DLJ Long Term Investment Corporation and DLJdirect Inc.

o Interactive Marketing Agreement dated as of December 15, 2000, amended as of March 25, 2001 and August 27, 2001, between America Online, Inc. and DLJdirect Inc.

o Broker Agreement, dated May 25, 2000, between MBNA America Bank, NA and DLJdirect Inc.

o Smartmoney Content Distribution Agreement, dated June 15, 2001, between Dow Jones and Company, Inc., Hearst Communications, Inc. and CSFBdirect Inc.

o IMG Worldwide, Inc Golf Sponsorship, dated March 17, 2000, amended as of May 16, 2001, between IMG Worldwide, Inc. and DLJdirect Inc.

o Dow Jones Indexes Enterprise Distribution Agreement dated as of June 1, 2001 between CSFBdirect Inc. and Dow Jones & Company, Inc.

o Data Subscriber License Agreement and Order Form, Iverson Financial Systems, Inc. Securities History Data, dated October 1, 1996, between Iverson Financial Systems, Inc. and PC Financial Network.

o Vendor Agreement for Level 1 Service, Last Sale Service and NQDS, dated October 22, 2001, between NASDAQ and the Company

o Severance Agreement by and between K. Blake Darcy and Credit Suisse First Boston Corporation

o Severance Agreement by and between Glenn Tongue and Credit Suisse First Boston Corporation

o Lease Agreement for Harborside Financial Center, Jersey City, NJ, dated April 12, 1999, subsequently amended, between Cal-Harbor II and III Urban Renewal Associates LP and Donaldson, Lufkin & Jenrette Securities Corporation and CSFBdirect Inc.

o Lease Agreement for 300 Park Avenue, New York, NY, dated October 30, 2000, between TST 300 Park, L.P. and Donaldson, Lufkin & Jenrette Securities Corporation and DLJdirect Inc.

o Lease Agreement for 33 North LaSalle, Chicago, IL, dated December 26, 2000, between Thirty-Three Associates LLC and Donaldson, Lufkin & Jenrette Securities Corporation and DLJdirect Inc.

o Lease Agreement for The Shoppes at Addison Place, Delray Beach, FL, dated February 1, 2000, between The Bear on Jog, Ltd. and Donaldson, Lufkin & Jenrette Securities Corporation

o Lease Agreement for Morris Corporate Center III, Parsippany, NJ, dated January 27, 1977, subsequently amended, between Morris Corporate Center III, LLC and Donaldson, Lufkin & Jenrette Securities Corporation

o Lease Agreement for the South Towne Corporate Center, Sandy, Utah, dated April 4, 2000, between the Workers Compensation Fund of Utah and Donaldson, Lufkin & Jenrette Securities Corporation

o Lease Agreement for The Shoppes and Market at Albrechts, Lower Marion Township, PA, dated December 20, 2000, between 701 Montgomery Avenue Investors and DLJdirect Inc.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document o Introducing Broker Agreement, dated November 8, 1999, between Scudder Financial Services, Inc. and DLJdirect Inc.

o Corporate Partnership Agreement, dated September 23, 1999, amended July 1, 2001, between Vail Resorts Management Company and CSFBdirect Inc.

(b) Prior notice to NASD and NYSE is required with respect to the Restructuring and the transactions contemplated by the Purchase Agreement.

(c) Amendments to the Company's filings on Form BD will be required in connection with the Restructuring and the transactions contemplated by the Purchase Agreement.

(d) State filings may be required with respect to the Restructuring and the transactions contemplated by the Purchase Agreement.

(e) Modification of the Company's filings on Form ADV will be required in connection with the transactions contemplated by the Purchase Agreement.

Section 3.07(b)

CONSENTS AND APPROVALS

(a) Prior notice to NASD and NYSE is required with respect to the Restructuring and the transactions contemplated by the Purchase Agreement.

(b) Amendments to the Company's filings on Form BD will be required in connection with the Restructuring and the transactions contemplated by the Purchase Agreement.

(c) State filings may be required in connection with the Restructuring and the transactions contemplated by the Purchase Agreement.

(d) Section 3.07(a) of this Disclosure Schedule is incorporated herein by reference.

Section 3.09

NO UNDISCLOSED LIABILITIES

Section 3.11 of this Disclosure Schedule is incorporated herein by reference.

Section 3.10

CONDUCT IN THE ORDINARY COURSE; ABSENCE OF CERTAIN CHANGES, EVENTS AND CONDITIONS

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Each of the following numbered paragraphs contains the disclosure required by the corresponding paragraphs of Section 3.10 of the Purchase Agreement.

(i) (A) On November 20, 2001, the Company transferred its equity investment in Redibook to DLJ Securities Corp. for an amount equal to the market value with respect to the investment; (B) on November 20, 2001, the Company transferred warrants held by it in the NASDAQ to DLJ Securities Corp. for an amount equal to the market value with respect to such warrants; (C) Siemens Fire Systems and QED, two subcontractors of Winward Electric, did not receive payments from Winward Electric for services provided in connection with the installation of mechanical equipment at the Company's Sandy, UT facility. Accordingly, each of Siemens Fire Systems and QED placed liens on the building where the equipment was installed. A bond with respect to the Siemens Fire Systems lien has been filed by the Company's surety, XL Surety. The Company has an ongoing relationship with XL Surety to cover these occurrences. The QED lien is for $2,300.62 and a bond will be posted with respect to such lien by XL Surety.

(ii) None

(iii) None, except for the transactions contemplated by the Purchase Agreement

(iv) None

(v) None, except for the transactions contemplated by the Purchase Agreement

(vi) (A) Severance Agreement by and between K. Blake Darcy and Credit Suisse First Boston Corporation; (B) Severance Agreement by and between Glenn Tongue and Credit Suisse First Boston Corporation; (C) The Company cancelled its car lease program without providing for any alternative compensatory benefit.

(vii) None

(viii) None

(ix) None

(x) None

(xi) None

(xii) As a consequence of the downsizing effected by the Company after September 30, 2001, terminated employees (i) became vested in their DLJdirect options (which were converted into a right to receive cash from Credit Suisse First Boston Corporation) through the end of the year, (ii) became fully vested in their DLJ

options (which were converted into Credit Suisse First Boston Corporation options) and (iii) became fully vested in their retention awards.

(xiii) Agreements with the following entities have been terminated as part of the downsizing effected by the Company after September 30, 2001.

o Messner o GS Schwartz o DoubleClick (DFA contract dated November, 2001) o Modem Media (Master Services Agreement, dated October 4, 2000) o Fuel NA o Quicken o CBS MarketWatch (Marketing Agreement) o MotleyFool o Prodigy o Various CPM-CPA deals o Kirschenbaum

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In addition, the Company has given notice of termination to Continental Airlines under the DLJdirect/Continental Airlines Agreement dated April 10, 2000.

(xiv) None

(xv) None

(xvi) None

(xvii) Although the lease for the premises located at Scottsdale, AZ is still in effect, the Company has discontinued operations at such offices.

(xviii) None

(xix) None

Section 3.11.

LITIGATION

(a) Wotherspoon Litigation. Neil and Penelope Wotherspoon had been bombarding the Company's computer systems with hundreds of emails a day for months. On December 13, 2000, the Company obtained a temporary restraining order ("TRO") against the Wotherspoons. The injunction hearing was set for February 1, 2000. In the period after the issuance of the TRO and before the hearing, the Wotherspoons stopped sending emails and the Company decided that it was unnecessary to proceed. The case was therefore dismissed without prejudice for the Company. Thereafter, the Wotherspoons resumed bombarding the Company with emails. Therefore, the Company filed, for the second time, a motion for Preliminary Injunction and Application for Temporary Restraining Order in New York State Supreme court, to prevent Neil and Penelope Wotherspoon from sending hundreds of emails a day to the Company. The Wotherspoons have not filed any counterclaims nor demanded any damages. The Company has obtained a new TRO.

(b) Eisenberg v. CSFBdirect (employee claims he did not receive appropriate compensation at time of termination; the Company offered $7,000 to settle the claim; employee failed to report to work for several weeks following a vacation and also failed to return to work on the date requested by the Company).

(c) Schauer v. CSFBdirect (employee claims age and sex discrimination caused her to be laid off from her position as sales representative; also claims harassment and a hostile work environment and poor work reviews; employee was laid off during a downsizing and had received consecutive poor reviews).

(d) Section 3.17(b) of this Disclosure Schedule is incorporated herein by reference.

Section 3.12

CUSTOMER MARGIN ACCOUNTS

A copy of the form of Customer Account Agreement is attached hereto.

Section 3.13(a)

REGISTRATIONS

The Company is registered as a broker-dealer under Section 15 of the Exchange Act, with the NASD and in all 50 states, as well as Puerto Rico. In addition, the Company and its agents listed below may rely on an exemption under Canada's National Instrument 53-101 and, therefore, are permitted to practice business as broker-dealers in all Provinces and Territories of Canada.

o Michael Turner o Juan Martinez o Paul Chen o Christopher Mathus o Mattia Buffolino o Steven Hedin o David McLaughlin o Jose Abied o Michael Moses o Lance Stone o Michael Page o Joseph Lubach o Kevin Mulcahy o James Murphy o Michael Lipton o Eric Zipp o Robert Buchanan o Margarita DeLeon o Joseph Lobue

Section 3.14(b)

COMPLIANCE WITH LEGAL REQUIREMENTS

List all Governmental Authorities with which the Company is required to be registered as a broker-dealer:

o SEC o NASD o Each of the 50 States and Puerto Rico

Section 3.15(a)

MATERIAL CONTRACTS

(i) All Contracts and agreements that involve payment of an amount or value in excess of $50,000

a) Presenting Sponsorship Contract, dated May 30, 2000, between Vail Valley Foundation and DLJdirect Inc.

b) Corporate Partnership Agreement, dated September 23, 1999, between Vail Resorts Management Company and CSFBdirect Inc., as amended

c) IMG Worldwide, Inc Golf Sponsorship, dated March 17, 2000, amended as of May 16, 2001, between IMG Worldwide, Inc. and DLJdirect Inc.

d) CSFBdirect Tournament of Champions Title Sponsorship Agreement, dated June 22, 2000, between Event Engine, Inc. and CSFBdirect Inc.

e) Services Agreement, dated July 24, 2001, between Keynote Systems, Inc. and CSFBdirect Inc.

f) Content Subscription and Marketing Agreement, dated June 15, 1999, between The Street.com, Inc. and DLJdirect Inc.

g) Interactive Marketing Agreement dated as of December 15, 2000, amended as of March 25, 2001 and August 27, 2001, between America Online, Inc. and DLJdirect Inc.

h) DLJdirect/Continental Airlines Agreement dated April 10, 2000, between DLJdirect Inc. and Continental Airlines, Inc.(2)

i) MBNA Affinity Agreement, dated May 25, 2000, between MBNA America Bank, N.A. and DLJdirect Inc.

j) RCL Agreement for Research Project, dated July 23, 2001, between NFO North America and CSFBdirect Inc.

k) Agreement, dated August 23, 2001, between CNN and CSFBdirect Inc. (Order Confirmation)

l) Agreement, dated August 28, 2001, between Time Warner Cable and CSFBdirect Inc. (Receipt of Proposal)

m) Agreement, dated August 27, 2001, between Money Magazine and CSFBdirect Inc. (Insertion Order)

------(2) Notice of termination of the contract was given by the Company.

n) Agreement, dated October 1, 2001, between New York Times and CSFBdirect Inc. (Insertion Order)

o) Q4 2001 Online Marketing Retainer, dated September 26, 2001, between Modem Media, Inc. and CSFBdirect Inc.

p) DART Service Agreement, dated December 13, 2000, between DoubleClick Inc. and DLJdirect Inc.

q) Emessaging Software License & Services Agreement, dated January 12, 2001, between FloNetwork Inc. (currently DoubleClick) and DLJdirect Inc.

r) Expovillage Official Sponsor Agreement, dated November 1,

s) Letter of Agreement, dated August 4, 2001, between Competitrack Advertising Tracking Service and MVBMS/CSFBdirect Inc.

t) BondDesk Trading Master Client Access Agreement, dated September 18, 2000, between BondDesk Trading LLC and DLJdirect Inc.

u) Intuit Marketing Agreement Online Investment Services, dated May 8, 1998, between Intuit Inc. and DLJdirect Inc.

v) RiskMetrics Group, Inc. Hosted Services Agreement, dated August 20, 2001, between RiskMetrics Group, Inc. and CSFBdirect Inc.

w) Financial Consulting Services Agreement, dated April 27, 2001, between London Pacific Advisory Services, Inc. and CSFBdirect Inc.

x) CheckFree APL System Agreement, dated August 20, 2001, between CheckFree Corporation and CSFBdirect Inc.

y) Long Term News License Agreement, dated as of May 1, 2001, between and among Dow Jones & Company, Inc. and CSFBdirect Inc., Pershing Clearing Corporation and Credit Suisse First Boston Corporation

z) Cusip Electronic Distribution Agreement, dated March 26, 2001, between Standard & Poor's Cusip Service Bureau and CSFBdirect Inc.

aa) Vendor Agreement for Level 1 Service, Last Sale Service and NQDS, dated October 22, 2001, between NASDAQ and the Company(3)

------(3) The Company sent an executed version of this agreement to the NASDAQ to replace the existing agreement between the NASDAQ and the Pershing division of DLJ Securities Corporation. The agreement has not yet been executed by the NASDAQ.

bb) Agreement for receipt and use of market data between New York Stock Exchange, Inc. and CSFBdirect Inc.(4)

cc) Options Price Reporting Authority Vendor Contract between the Options Price Reporting Authority and the Company(5)

dd) Morningstar Content License Agreement, dated November 18, 2001, between Morningstar, Inc. and CSFBdirect Inc.

ee) Agreement, dated October 1, 1996 between the Pershing division of DLJ Securities Corporation and Standard & Poor's

ff) TIN Website Agreement, dated December 29, 1997, between Thomson Investors Network and DLJdirect Inc.

gg) Content Licensing Agreement, dated November 1, 1998, between Zacks Investment Research Incorporated and DLJdirect Inc.

hh) Content Distribution Agreement, dated July 7, 1999, amended as of August 21, 2001, between Dow Jones & Company, Inc. and DLJdirect Inc.

ii) Smartmoney Content Distribution Agreement, dated June 15, 2001, between Dow Jones and Company, Inc., Hearst Communications, Inc. and CSFBdirect Inc.

jj) Fully Disclosed Clearing Agreement dated September 24, 1997, between the Pershing Division of Donaldson Lufkin and Jenrette Securities Corporation and DLJdirect Inc.

kk) Research Products Agreement, dated April 28, 1999, between Donaldson Lufkin & Jenrette Securities Corporation and DLJdirect Inc.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ll) Subscription to Equity Research, dated August 21, 2001, between CSFBdirect Institutional Services and Credit Suisse First Boston Corporation.

mm) Interim License Agreement, dated January 12, 2001, between Credit Suisse Group and PC Financial Network, Inc.

(ii) All Contracts relating to indebtedness for borrowed money of the Company to a third party

None

------(4) The Company sent an executed version of this agreement to NYSE to replace the existing agreement between NYSE and the Pershing division of DLJ Securities Corporation. The agreement has not yet been executed by the NYSE.

(5) The Company sent an executed version of this agreement to OPRA to replace the existing agreement between OPRA and iNautix Technologies, Inc.. The agreement has not yet been executed by the NASDAQ.

(iii) All Contracts with any Governmental Authority to which the Company is a Party

a) Vendor Agreement for Level 1 Service, Last Sale Service and NQDS, dated October 22, 2001, between NASDAQ and the Company(6)

b) Agreement for receipt and use of market data between New York Stock Exchange, Inc. and CSFBdirect Inc.(7)

c) Options Price Reporting Authority Vendor Contract between the Options Price Reporting Authority and the Company(8)

(iv) All Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time

a) DLJdirect/Continental Airlines Agreement dated April 10, 2000, between DLJdirect Inc. and Continental Airlines, Inc.(9)

b) MBNA Affinity Agreement, dated May 25, 2000, between MBNA America Bank, N.A. and DLJdirect Inc.

(v) All Contracts between or among the Company and the Seller or any Affiliate of the Seller contemplating an exchange of value in excess of $50,000

a) Fully Disclosed Clearing Agreement dated September 24, 1997, between the Pershing Division of Donaldson Lufkin and Jenrette Securities Corporation and DLJdirect Inc.

b) Private Label Managed Account Program, dated October 26, 2000, between Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation and DLJdirect Inc.

c) Subscription to Equity Research, dated August 21, 2001, between CSFBdirect Institutional Services and Credit Suisse First Boston Corporation.

d) License Agreement, dated September 2, 1997, between DLJ Long Term Investment Corporation and DLJdirect Inc.

------(6) The Company sent an executed version of this agreement to the NASDAQ to replace the existing agreement between the NASDAQ and the Pershing division of DLJ Securities Corporation. The agreement has not yet been executed by the NASDAQ.

(7) The Company sent an executed version of this agreement to NYSE to replace the existing agreement between NYSE and the Pershing division of DLJ Securities Corporation. The agreement has not yet been executed

(8) The Company sent an executed version of this agreement to OPRA to replace the existing agreement between OPRA and iNautix Technologies, Inc.. The agreement has not yet been executed by the NASDAQ.

(9) Notice of termination of the contract was given by the Company. 20

e) Letter Agreement dated June 2, 1997 between Donaldson Lufkin & Jenrette Securities Corporation and PC Financial Network, Inc.

f) Research Products Agreement, dated April 28, 1999, between Donaldson Lufkin & Jenrette Securities Corporation and DLJdirect Inc.

g) Sublicense Agreement dated March 11, 1999, between DLJdirect Holdings, Inc. and DLJdirect Inc.

h) Intercompany Services Agreement, dated August 14, 1996, between PC Financial Networks, Holdings Inc. and PC Financial Networks, Inc.

i) General Services Agreement, dated August 1, 2000, between DLJdirect Inc. and DLJ Asset Management Group, Inc.

j) Introducing Broker Agreement, dated June, 2000, between DLJdirect Ltd. and DLJdirect Inc.

(vi) All material broker, distributor, dealer, agency, sales promotion, market research, marketing consulting and advertising Contracts to which the Company is a party

a) Research Products Agreement, dated April 28, 1999 between Donaldson Lufkin and Jenrette Securities Corporation and DLJdirect Inc.

b) Services Agreement, dated July 24, 2001, between Keynote Systems, Inc. and CSFBdirect Inc.

c) Master Agreement Among Underwriters, dated December 1, 1986, subsequently amended as of March 21, 1996 and as of October 17, 1996, between Bear, Sterns & Co. Inc. and DLJdirect Inc.

d) Master Selling Agreement, dated December 1, 1986, subsequently amended as of March 21, 1996 and as of October 17, 1996, between Bear, Sterns & Co. Inc. and DLJdirect Inc.

e) Master Agreement Among Underwriters, dated November 19, 1997 between C.E. Unterberg, Towbin and DLJdirect Inc.

f) Master Selling Agreement, dated September 1, 1987 between Oppenheimer & Co. Inc. and DLJdirect Inc.

g) Master Agreement Among Underwriters, dated December 15, 1998 between Credit Suisse First Boston and CSFBdirect Inc.

h) Master Selected Dealers Agreement dated May 1, 1998 between Credit Suisse First Boston and CSFBdirect Inc.

i) Master Agreement Among Underwriters, dated July, 1998 between BT Alex.Brown Incorporated and DLJdirect Inc.

j) Master Selected Dealers Agreement, dated July, 1998 between BT Alex.Brown Incorporated and DLJdirect Inc.

k) Form of Master Selected Dealers Agreement, dated March 14, 2001 between ABN AMRO Incorporated and CSFBdirect Inc.

l) Representative Form of Master Selected Dealers Agreement, dated June 1, 2001 between ABN AMRO Financial Services, Inc. and CSFBdirect Inc.

n) Master Selected Dealer Agreement, dated as of October 10, 2001 between Incapital LLC and CSFBdirect Inc.

o) Agreement Among Underwriters, dated June 1, 2000, among DLJ International Securities, CA IB Investmentbank Aktiengesellschaft, DLJdirect Inc. and HSBC Investment Bank plc

p) Account Agreement, dated October 15, 2001 between eBondTrade LLC and CSFBdirect Inc.

q) Master Agreement Among Underwriters, dated as of May 15, 2000, between ING Barings LLC and DLJdirect Inc.

r) Underwriting Agreement, dated March 28, 2000, among meVC Draper Fisher Jurvetson Fund I, Inc., Prudential Volpe Technology, Raymond James & Associates, Inc., Gruntel & Co., Fidelity Capital Markets and DLJdirect Inc.

s) Master Agreement Among Underwriters, dated September 1, 1998, between BancBoston Robertson Stephens and DLJdirect Inc.

t) Master Selected Dealers Agreement, dated September 1, 1998, between BancBoston Robertson Stephens and DLJdirect Inc.

u) Master Agreement Among Underwriters, dated November 15, 2000, between The Robinson-Humphrey Company, LLC and DLJdirect Inc.;

v) Master Selected Dealer Agreement, dated November 15, 2000, between The Robinson-Humphrey Company, LLC and DLJdirect Inc.

w) Master Agreement Among Underwriters, dated July 18, 1985, between Smith Barney, Harris Upham & Co. Incorporated (now known as Salomon Smith Barney) and DLJdirect Inc.

x) Master Selected Dealer Agreement, dated July 1, 1999, between Salomon Smith Barney, Inc. and DLJdirect Inc. (re-executed on September 10, 2001 by CSFBdirect Inc.)

y) Master Agreement Among Underwriters, dated August 4, 1999, between U.S. Bancorp Piper Jaffray) and DLJdirect Inc.

z) Master Selected Dealer Agreement, dated August 4, 1999, between U.S. Bancorp Piper Jaffray) and DLJdirect Inc.

aa) Master Selected Dealers Agreement, dated December 6, 1999, between W.R. Hambrecht & Co., LLC and DLJdirect Inc.

bb) OpenIPO Participation Agreement, dated December 6, 1999, between W.R. Hambrecht & Co., LLC and DLJdirect Inc.

cc) Underwriting Agreement dated December 7, 1999, among Andover.Net, Inc., between W.R. Hambrecht & Co., LLC, Advest, Inc. and DLJdirect Inc.

dd) Master Agreement Among Underwriters, dated June 8, 1999, between W.R. Hambrecht & Co., LLC and DLJdirect Inc.

ee) Special Dealer Agreement, dated March 15, 2001, between Merrill Lynch, Pierce, Fenner & Smith Incorporated and CSFBdirect Inc.

ff) Master Dealer Agreement, dated August 1, 1982, between Morgan Stanley & Co. Incorporated and DLJdirect Inc.

gg) Master Agreement Among Underwriters, dated August 1, 1982, between Morgan Stanley & Co. Incorporated and DLJdirect Inc.

hh) Agreement, dated May 6, 1999 between Edgar Online Inc. and DLJdirect Inc.

ii) Interactive Marketing Agreement dated as of December 15, 2000, amended as of March 25, 2001 and August 27, 2001, between

jj) CSFBdirect Tournament of Champions Title Sponsorship Agreement, dated June 22, 2000, between Event Engine, Inc. and CSFBdirect Inc.

kk) Cusip Electronic Distribution Agreement, dated March 26, 2001, between Standard & Poor's Cusip Service Bureau and CSFBdirect Inc.

ll) Content Distribution Agreement, dated July 7, 1999, amended as of August 21, 2001, between Dow Jones & Company, Inc. and DLJdirect Inc.

mm) Dow Jones Newswire Distribution and Sales Agency Agreement dated October 9, 2001, between Dow Jones & Co., Inc. and the CSFBdirect Inc.

nn) Long Term News License Agreement, dated as of May 1, 2001, between and among Dow Jones & Company, Inc. and CSFBdirect Inc., Pershing Clearing Corporation and Credit Suisse First Boston Corporation

oo) Intuit Marketing Agreement Online Investment Services, dated May 8, 1998, between Intuit Inc. and DLJdirect Inc.

pp) Content Distribution Agreement, dated May 1, 2000, between Omnisky, Inc. and DLJdirect Inc.

qq) Letter of Agreement between Business Wire and PC Financial Network, dated October 24, 1996

rr) Morningstar, Inc. License Agreement, effective December 1, 2001, between Morningstar, Inc. and CSFBdirect Inc.

ss) Morningstar, Inc. License Agreement, effective November 9, 2001 between Morningstar, Inc. and CSFBdirect Inc.

tt) Morningstar, Inc. License Agreement, effective October 9, 2001, between Morningstar, Inc. and CSFBdirect Inc.

uu) Co-Marketing Agreement, dated January 21, 2000, between GoAmerica Communications Corp. and DLJdirect Inc.

vv) Riskmetrics Group, Inc. Hosted Services Agreement, dated August 20, 2001, between Riskmetrics Group, Inc. and CSFBdirect Inc.

ww) Broker Agreement, dated May 25, 2000, between MBNA America Bank, NA and DLJdirect Inc.

xx) MuniGroup Trading Master Client Access Agreement, dated September 18, 2000, between MuniGroup.com LLC and DLJdirect Inc.

yy) Content Licensing Agreement, dated November 1, 1998, between Zacks Investment Research Incorporated and DLJdirect Inc.

zz) Smartmoney Content Distribution Agreement, dated June 15, 2001, between Dow Jones and Company, Inc., Hearst Communications, Inc. and CSFBdirect Inc.

aaa) eCheck Secure, dated March 22, 2001 between Troy Systems International, Inc. and CSFBdirect Holdings Inc.

bbb) Dow Jones Indexes Enterprise Distribution Agreement, dated June 1, 2001, between Dow Jones and Company, Inc. and CSFBdirect Inc.

ccc) Morningstar Content License Agreement, dated November 18, 2001, between Morningstar, Inc. and CSFBdirect Inc.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ddd) Data Subscriber License Agreement and Order Form, Iverson Financial Systems, Inc. Securities History Data, dated October 1, 1996, between Iverson Financial Systems, Inc. and PC Financial Network.

eee) Lyster Watson and Company Investment Advisors, dated September 13, 2000, between Lyster Watson Management, Inc. and DLJdirect Inc.

fff) Wireless Internet Services Agreement, dated January 8, 2001 between Sprint Spectrum L.P. and DLJdirect Inc.

ggg) Financial Consulting Services Agreement, dated April 27, 2001, between London Pacific Advisory Services, Inc. and CSFBdirect Inc.

hhh) Customer Referral Agreement, dated November 28, 2000, between Hewitt Associates LLC and Hewitt Financial Services LLC and DLJdirect Inc.

iii) CheckFree APL System Agreement, dated August 20, 2001, between CheckFree Corporation and CSFBdirect Inc.

jjj) Mobile Channel Agreement Letter, dated October 2, 2000, between AT&T Wireless Services and DLJdirect Inc.

kkk) Customer Referral Agreement, dated September 4, 2000, between Putnam Retail Management, Inc. and DLJdirect Inc.

lll) License Agreement, dated September 2, 1997, between DLJ Long Term Investment Corporation and DLJdirect Inc.

mmm) BondDesk Trading Master Client Access Agreement, dated September 18, 2000, between BondDesk Trading LLC and DLJdirect Inc.

nnn) Content Subscription and Marketing Agreement, dated June 15, 1999, between TheStreet.com, Inc. and DLJdirect Inc.

ooo) Presenting Sponsorship Contract, dated May 30, 2000, between Vail Valley Foundation and DLJdirect Inc.

ppp) IMG Worldwide, Inc Golf Sponsorship, dated March 17, 2000, amended as of May 16, 2001, between IMG Worldwide, Inc. and DLJdirect Inc.

qqq) DLJdirect/Continental Airlines Agreement dated April 10, 2000, between DLJdirect Inc. and Continental Airlines, Inc.10

rrr) DART Service Agreement, dated December 13, 2000, between DoubleClick Inc. and DLJdirect Inc.

------(10) Notice of termination of the contract was given by the Company.

sss) Q4 2001 Online Marketing Retainer, dated September 26, 2001, between Modem Media, Inc. and CSFBdirect Inc.

ttt) Agreement, dated August 23, 2001, between CNN and CSFBdirect Inc. (Order Confirmation)

uuu) Agreement, dated August 28, 2001, between Time Warner Cable and CSFBdirect Inc. (Receipt of Proposal)

vvv) Agreement, dated August 27, 2001, between Money Magazine and CSFBdirect Inc. (Insertion Order)

www) Agreement, dated October 1, 2001, between New York Times and CSFBdirect Inc. (Insertion Order)

xxx) RCL Agreement for Research Project,, dated July 23, 2001, between NFO North America and CSFBdirect Inc.

yyy) Expovillage Official Sponsor Agreement, dated November 1, 2000, between Jack Morton Worldwide and DLJdirect Inc. (Bloomberg agreement)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document zzz) Letter of Agreement, dated August 4, 2001, between Competitrack Advertising Tracking Service and MVBMS/CSFBdirect Inc.

aaaa) License Agreement, Dated September 13, 1999, between Comm Scan, LLC and DLJdirect Inc.

bbbb) Power of Attorney, dated July 27 1999, with regard to an Agreement Among Underwriters, among First Union Capital Markets Corp., J.C. Bradford & Co., Wachovia Securities, Inc. and DLJdirect Inc.

cccc) Agreement Among Underwriters with Goldman Sachs & Company

dddd) Sales Agreement, dated July 29, 1999, between WSW Capital, Inc. and DLJdirect Inc.

(vii) All leases and subleases in respect of Leased Real Property

Section 3.16(a) and 3.16(c) hereof are hereby incorporated by reference

(viii) Contracts entered into by the Company relating to the acquisition or divestiture of a business that contain ongoing indemnification liabilities.

None

(ix) All Contracts for capital expenditures in excess of $50,000

None

(x) Contracts for Clearing or sub-clearing services

a) Fully Disclosed Clearing Agreement dated September 24, 1997, between the Pershing Division of Donaldson Lufkin and Jenrette Securities Corporation and DLJdirect Inc.

(xi) All Material Company IP Licenses

a) Emessaging Software License & Services Agreement, dated January 12, 2001, between FloNetwork Inc. (currently DoubleClick) and DLJdirect Inc.

b) BondDesk Trading Master Client Access Agreement dated as of September 18, 2000 between BondDesk Trading LLC and DLJdirect Inc.

c) Content Distribution Agreement dated as of May 1, 2000 between OmniSky, Inc. and DLJdirect Inc., as amended

d) Amendment No. 1 dated as of October 1, 1998 between Donaldson, Lufkin & Jenrette Securities Corporation and Standard & Poor's.

e) Letter of Agreement Business Wire and PC Financial Network dated as of October 24, 1996 between Business Wire and PC Financial Network.

f) Intuit Marketing Agreement Online Investment Services dated as of May 8, 1998 between Intuit Inc. and DLJdirect Inc.

g) Morningstar, Inc. License Agreement dated as of December 1, 2001 between Morningstar, Inc. and CSFBdirect Inc.

h) Co-Marketing Agreement V.2 dated as of January 21, 2000 between GoAmerica Communications Corp. and DLJdirect Inc.

i) RiskMetrics Group, Inc. Hosted Services Agreement dated as of August 20, 2001 between CSFBdirect Inc. and RiskMetrics Group, Inc.

j) TIN Website Agreement dated as of December 29, 1997 between Thomson Investors Network and DLJdirect Inc.

k) Proposal for Site Maintenance Agreement dated as January 26, 2001 between CSFBdirect Inc. and Industrial Cooling

l) License Agreement Terms and Conditions dated as of September 13, 1999 between DLJdirect Inc. and CommScan L.L.C.

m) Interactive Marketing Agreement dated as of December 15, 2000, amended as of March 25, 2001 and August 27, 2001 between America Online, Inc. and DLJdirect Inc.

n) Mobile Channel Agreement, dated as of October 2, 2000 between DLJdirect Inc. and AT&T Wireless Services, Inc.

o) Introducing Broker Agreement dated as of May 25, 2000 between MBNA America Bank, N.A. and DLJdirect Inc.

p) License Agreement dated as of May 25, 2000 between MBNA America Bank, N.A. and DLJdirect Inc.

q) Affinity Agreement dated as of May 25, 2000 between America Bank, N.A. and DLJdirect Inc.

r) Presenting Sponsorship Contract dated as of May 30, 2000 between Vail Valley Foundation and DLJdirect Inc.

s) MuniGroup Trading Master Client Access Agreement dated as of September 18, 2000 between MuniGroup.com, LLC and DLJdirect Inc.

t) Smartmoney Content Distribution Agreement, dated June 15, 2001, between Dow Jones and Company, Inc., Hearst Communications, Inc. and CSFBdirect Inc.

u) IMG Worldwide, Inc Golf Sponsorship, dated March 17, 2000, amended as of May 16, 2001, between IMG Worldwide, Inc. and DLJdirect Inc.

v) Corporate Partnership Agreement, dated September 23, 1999, amended July 1, 2001, between Vail Resorts Management Company and CSFBdirect Inc.

w) Content Distribution Agreement, dated July 7, 1999, amended as of August 21, 2001, between Dow Jones & Company, Inc. and DLJdirect Inc.

x) Dow Jones Indexes Enterprise Distribution Agreement dated as of June 1, 2001 between CSFBdirect Inc. and Dow Jones & Company, Inc.

y) Cusip Electronic Distribution Agreement, dated March 26, 2001, between Standard & Poor's Cusip Service Bureau and CFSBdirect Inc.

z) Content License Agreement dated as of December 12, 1997 between DLJdirect Inc. and Charter Media, Inc.

aa) Morningstar, Inc. License Agreement dated as of November 9, 2001 between Morningstar, Inc. and CSFBdirect Inc.

bb) Morningstar, Inc. License Agreement dated as of October 9, 2001 between Morningstar, Inc. and CSFBdirect Inc.

cc) Morningstar, Inc. License Agreement dated as of December 1, 2001 between Morningstar, Inc. and CSFBdirect Inc.

dd) Content Subscription and Marketing Agreement dated as of June 15, 1999 between TheStreet.com and DLJdirect Inc.

ee) Data Subscriber License Agreement and Order Form, Iverson Financial Systems, Inc. Securities History Data, dated October 1, 1996, between Iverson Financial Systems, Inc. and PC Financial Network.

(xii) All advertising Contracts providing for aggregate payments exceeding $100,000

a) CSFBdirect Tournament of Champions Title Sponsorship Agreement, dated June 22, 2000, between Event Engine, Inc. and CSFBdirect Inc.

b) Presenting Sponsorship Contract, dated May 30, 2000, between Vail Valley Foundation and DLJdirect Inc.

c) Corporate Partnership Agreement, dated September 23, 1999, between Vail Resorts Management Company and CSFBdirect Inc., as amended

d) IMG Worldwide, Inc Golf Sponsorship, dated March 17, 2000, amended as of May 16, 2001, between IMG Worldwide, Inc. and DLJdirect Inc.

e) Content Subscription and Marketing Agreement, dated June 15, 1999, between The Street.com, Inc. and DLJdirect Inc.

f) Interactive Marketing Agreement dated as of December 15, 2000, amended as of March 25, 2001 and August 27, 2001, between America Online, Inc. and DLJdirect Inc.

g) Agreement, dated August 23, 2001, between CNN and CSFBdirect Inc. (Order Confirmation)

h) Agreement, dated August 28, 2001, between Time Warner Cable and CSFBdirect Inc. (Receipt of Proposal)

i) Agreement, dated August 27, 2001, between Money Magazine and CSFBdirect Inc. (Insertion Order)

j) Agreement, dated October 1, 2001, between New York Times and CSFBdirect Inc. (Insertion Order)

k) Expovillage Official Sponsor Agreement, dated November 1, 2000, between Jack Morton Worldwide and DLJdirect Inc. (Bloomberg agreement)

l) Letter of Agreement, dated August 4, 2001, between Competitrack Advertising Tracking Service and MVBMS/CSFBdirect Inc.

(xiii) All material Contracts in respect of or with affinity partnerships and registered investment advisors.

a) Sales Agreement, dated as of July 29, 1999, between DLJdirect Inc. and WSW Capital, Inc., on behalf of and its capacity as general partner or investment advisor to certain investment funds, partnerships or other vehicles.

b) MBNA Affinity Agreement, dated May 25, 2000, between MBNA America Bank, NA and DLJdirect Inc.

c) Self-Directed Brokerage Agreement, dated May 3, 1999, between Putnam Fiduciary Trust Company and DLJdirect Inc.

d) Introducing Broker Agreement, dated March 1, 2000, between Bessemer Investor Services, Inc. and DLJdirect Inc.

e) Introducing Broker Agreement, dated November 8, 1999, between, Scudder Financial Services, Inc. DLJdirect Inc.

f) Introducing Broker Agreement, dated as of December 28, 2000, between Nomura Securities International, Inc. and DLJdirect Inc.

g) Introducing Broker Agreement, dated June, 2000, between DLJdirect Ltd. and DLJdirect Inc.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document h) Self-Directed Brokerage Services Agreement, dated March 19, 2001, between CNA Trust Corporation and CSFBdirect Inc.

i) Self-Directed Brokerage Services Agreement, dated April 30, 2001, between SunGard Institutional Brokerage Inc., SunGard Investment Products Inc., and CSFBdirect Inc.

j) Self-directed Brokerage Services Agreement, dated June 26, 2001, between Nationwide Trust Company, FSB, Nationwide Retirement Solutions, Inc., Nationwide Investment Services Corporation and CSFBdirect Inc.

k) Self-directed Brokerage Services Agreement, dated August 23, 1999, between 401(K) Company and DLJdirect Inc.

l) Self-Directed Brokerage Services Agreement, dated June 1, 2001, between Hewitt Associates LLC, Hewitt Financial Services LLC, and CSFBdirect Inc.

m) Self-Directed Brokerage Services Agreement, dated February 25, 2000, between Exeter Trust Company, Inc. and DLJdirect Inc.

n) Self-Directed Brokerage Services Agreement, dated February 28, 2001, between Transamerica Life Insurance and Annuity Company, AUSA Life Insurance Company, Inc. and Transamerica Financial Resources Inc.

o) Self-Directed Brokerage Services Agreement, dated July 7, 2000, between New England Financial and DLJdirect Inc.

p) Institutional Self-Directed Brokerage Agreement, dated September 21, 2000, between Bank of New York and DLJdirect Inc.

q) Institutional Self-Directed Brokerage Services Agreement, dated April 20, 2001, between Aetna Investment Services, LLC and CSFBdirect Inc.

r) Self-Directed Brokerage Services Agreement, dated June 28, 2000, between Financial Administrative Services Corporation, Greenwood Investments, Inc. and DLJdirect Inc.

s) Self-Directed Brokerage Services Agreement, dated May 5, 2000, between John Hancock Funds, Inc. and DLJdirect Inc.

t) Self-Directed Brokerage Services Agreement, dated August 18, 2000, between MFS Retirement Services, Inc. and DLFdirect Inc.

u) Self-Directed Brokerage Account Processing Services and Fee Agreement, dated September 13, 2000, between Reliance Trust Company and DLJdirect Inc.

v) Customer Referral Agreement, dated April 4, 2000, between Citistreet LLC and DLJdirect Inc.

w) Service Agreement, dated October 22, 2001, between Accredited Only, Inc. and CSFBdirect Inc.

x) Separate Account Manager Services Agreement, dated October 30, 2001, between Nordea Securities, Inc. and CSFBdirect Inc.

y) In addition, the Company is a party to a Services Agreement with each of the institutions listed below. Pursuant to such agreements, which are all substantially on the same form, the Company provides brokerage and related services to the institution to effect transactions for such institution's clients who enter into customer agreements with the Company. In addition, the Company provides the institution with access to software, databases, access devices or other communication facilities which enable the institution to enter purchase and sale orders for securities for such institution's clients.

o Advisor Partners, LLC, dated August 29, 2001 o Beaton Management Co., Inc., dated October 15, 2001 o Boone Financial Advisors, Inc., dated November 13, 2001

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document o Diesslin and Associates, Inc., dated March 28, 2001 o Vestar Strategic, LLC, dated December 13, 2000 o Emery and Howard Portfolio Management, dated October 3, 2001 o George M. Hiller Companies, LLC, dated September 7, 2001

o Howard Financial Services, Inc., dated August 21, 2001 o Hennsler Asset Management, LLC, dated September 4, 2001 o The Keller Group, dated January 12, 2001 o Liberty Capital Management, dated December 12, 2000 o McCarthy Financial Planning, dated October 15, 2001 o The MDE Group, dated October 3, 2001 o Spectrum Asset Management, dated October 9, 2001 o Smith and Howard Financial Group, dated August 7, 2001 o SORA Associates, LLC, dated October 15, 2001 o Silver Creek Equity Management, LLC, dated October 30, 2001 o Talkot Capital, LLC, dated September 4, 2001 o Seattle Capital* o Nicholas Applegate* o Rorer Asset Management* o Allegiance Capital* o Alger* o AIM Funds* o Brandeis* o 1838 Investment Advisors*

z) The Company is a party to a CSFBdirect Institutional Services Agreement with each of the Institutions listed below. Pursuant to such agreements, which are all substantially on the same form, the Company provides brokerage and related services to the institution to effect transactions for such institution's clients who enter into customer agreements with the Company. In addition, the Company provides the institution with access to software, databases, access devices or other communication facilities which enable the institution to enter purchase and sale orders for securities for such institution's clients.

o Buckhead Capital Management, LLC, dated May 14, 2001 o Caprock Capital Advisors, Inc., dated July 2, 2001 o The Commonwealth Group, Inc., dated July 27, 2001 o Corbin and Company, dated June 6, 2001 o CFS Investment Advisory Services, LLC, dated June 15, 2001 o GMG Asset Management, Inc., dated July 2, 2001 o Knightsbridge Asset Management, LLC, dated November 10, 2000 o One Capital Management, LLC, dated August 29, 2001 o Quantitative Advantage, July 25, 2001 o Robertson, Griege & Thoele Capital Management, dated May 31, 2001 o Sherry Bijan, dated June 15, 2001 o Wetherby Asset Management, dated May 18, 2001

------* Pending

aa) The company is a party to a CSFBdirect Institutional Sub- Advisor Services Agreement with each of the institutions listed below. Pursuant to such agreements, which are all substantially on the same form, the Company provides brokerage and related services to the institution to effect transactions for such institution's clients who enter into customer agreements with the Company. In addition, the Company provides the institution with access to software, databases, access devices or other communication facilities which enable the institution to enter purchase and sale orders for securities for such institution's clients.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document o Capstone Asset Management Company, dated August 24, 2001 o Miller/Howard Investments, dated September 17, 2001 o Navallier & Associates, dated October 15, 2001 o Starbuck, Tisdale & Associates, August 25, 2001 o Oak Associates, Ltd., dated November 6, 2001

Section 3.16(a)

REAL AND TANGIBLE PROPERTY

Section 3.16(c)

SUBLEASED REAL PROPERTY

None

Section 3.17(a)

INTELLECTUAL PROPERTY

(i) o Trademark registrations and applications owned by the Company

None

o Trademark registrations and applications licensed to the Company by DLJ Long Term Investment Corp.

REGISTRATIONS AND APPLICATIONS FOR MARKS USED IN THE TERRITORY

REGISTRATIONS FOR MARKS OWNED BY COMPANY IN THE TERRITORY

MARKS PREVIOUSLY USED IN THE TERRITORY

(ii) o The following domain name registrations are registered to CSFBdirect Holdings, Inc.:

CSFBINSTITUTIONAL.COM

VIEWMYPORTFOLIO.COM

CSFBPRIVATECIIENT.COM

CSFBPRLVATECIIENT.COM

CSFBPRIVATECLLENT.COM

CSFBPRLVATECLIENT.COM

CSFBPRLVATECLLENT.COM

CSFBPRIVATECILENT.COM

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document o The following domain name registrations are registered to DLJdirect Holdings, Inc.:

CSFBDIRECT.ORG

CSFBPRIVATECLIENT.COM

CSFBDIRECT.COM

CSFBDIRECTME.NET

CSFBPRIVATECLIENT.NET

CSFBDIRECTSUCKS.NET

CSFBPCS.NET

DLJDIRECT.COM

DLJDIRECTSUCKS.NET

WEBNAUTIX.COM

CSFBDIRECTEUNION.COM

CSFBPCS.COM

CSFBDIRECTMIDDLEEAST.COM

CSFBDIRECTINSTITUTIONAL.COM

CSFBDIRECT.NET

CSFBDIRECT-ME.NET

DLJDIRECTFP.COM

CSFBDIRECT-ME.COM

ONLINEINVESTING-CSFBDIRECT.COM

CSFBDIRECTSUCKS.COM

CSFBPRIVATECLIENT.ORG

DLJDM.COM

CITISTREETADVISERS.COM

DLJDIRECTINSTITUTIONAL.COM

CITISTREETADVISERS.NET

CSFBDIRECTSUCKS.ORG

CSFBDIRECT.NET

DLJDIRECT-EUNION.COM

CSFBPCS.ORG

CSFBDIRECTMIDEAST.COM

DLJDW.COM

CSFBDIRECT-MIDEAST.COM

DLJSUCKS.NET

DLJDIRECTJC.COM

DIRSUCKS.COM

DLJDIRECTSUCKS.ORG

DLJDIRECTSUCKS.COM

CSFBDIRECTME.COM

CSFBDIRECT-EUNION.NET

CSFBDIRECT-EUNION.COM

(iii) Common law Trademarks material to the Company's business.

None

(iv) Material Software.

Software licensed pursuant to the Company IP Licenses and Excluded IP Licenses, as applicable, and the iNautix Agreement.

Section 3.17(b)

INTELLECTUAL PROPERTY a) Katz: Attorney representing Katz sent a letter to a client of CSFBdirect Inc. alleging that Katz's patents were being infringed by CSFBdirect Inc.'s IVR telephone system. A complaint has not been filed. b) Techsearch LLC: Techsearch notified CSFBdirect that its website induces the infringement by others of various parts of Techsearch's patent. Techsearch is willing to grant a license for a one-time payment of $80,000. A complaint has not been filed. c) STAMBLER V. DLJDIRECT: Stambler claims that his patents cover all but the most rudimentary Internet security methods and that CSFBdirect has infringed these patents. d) WARNER-TAMERLANE PUBLISHING CORP. V. DLJDIRECT INC., DLJ INC. AND KISHENBAUM BOND & PARTNERS: Warner-Tamerlane claims that CSFBdirect used a copyrighted musical composition in a CSFBdirect television commercial without permission. Kishenbaum has agreed to indemnify the Company pursuant to its indemnification agreement and has retained counsel to represent both CSFBdirect and DLJ Securities in this matter. e) Brazil: DLJLTIC V. ULTRAPRISE CORPORATION: DLJLTIC Mark: TRADE UP, Application No. 821688774 v. Ultraprise Mark: TRADE ON, Application No. 821867067. Opposition Filed 12/6/1999, Published, 10/16/2001; Response Due: 12/16/2001 f) CTM: DLJLTIC V. ULTRAPRISE CORPORATION, OPPOSITON NO. B292237: DLJLTIC Mark: TRADE UP, Application No. 1193788 v. Ultraprise Corporation Mark: TRADE ON, Application No. 1253483. Opposition Filed 7/27/1999 g) CTM: ULTRAPRISE CORPORATION V. DLJLTIC: Ultraprise Corporation Mark: TRADE ON, Application No. 1253483 v. DLJLTIC Mark: TRADE UP, Application No. 1193788. Opposition Filed 12/4/2000

Section 3.18

ASSETS

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document a) Lipper Inc. Research and Webfeed Agreement dated as of September 1, 1999 between Lipper Inc. and Donaldson, Lufkin & Jenrette Securities Corporation. b) ECheck Secure for CSFBdirect Holdings Inc. dated as of March 22, 2001 between Troy Systems International, Inc. and CSFBdirect Holdings, Inc. c) Agreement dated as of December 10, 1999 between ILX Systems and iNautix Technologies Inc. d) Content License & Services Agreement dated as of August 22, 2000 between MarketWatch.com, Inc. and iNautix Technologies Inc. e) A-T Financial Master Distribution Terms and Conditions Agreement, dated November 30, 2000, between A-T Financial Information, Inc. and iNautix Technologies, Inc. f) Agreement, dated October 1, 1996 between the Pershing division of DLJ Securities Corporation and Standard & Poor's g) Consulting Services Agreement, dated February 3, 2000, between Chordiant (formerly Prime Response) and iNautix Technologies, Inc. h) Software License Agreement, dated April 25, 2000, between Speechworks International, Inc. and iNautix Technologies, Inc. i) Professional Services Agreement, dated April 25, 2000, between Speechworks International, Inc. and iNautix Technologies, Inc. j) Amendment To Professional Services Agreement, dated December 20, 2000, between Speechworks International, Inc. and iNautix Technologies, Inc. k) Agreement for the Development and License of Software, dated March 27, 1998, between A-T Financial Information, Inc. and iNautix Technologies, Inc. l) Customer Agreement, dated May 29, 1997, between Aspect Telecommunication Corporation and the Pershing division of DLJ Securities Corporation m) Content Licensing Agreement dated as of November 1, 1998 between DLJdirect Inc. and Zacks Investment Research Incorporated, subsequently assigned by the Company to iNautix Technologies, Inc. on June 23, 2000 n) Software End User License and Services Agreement, dated June 30, 1995 between Peoplesoft USA Inc. and Donaldson Leasing Corp.

43 o) US Volume Purchase Agreement dated April 6, 2000, between Cisco Systems, Inc. and iNautix Technologies, Inc. p) Master Services Agreement dated April 10, 2000, between Cisco Systems, Inc. and iNautix Technologies, Inc. q) Non-Disclosure Agreement dated July 10, 2001, between Cisco Systems, Inc. and iNautix Technologies, Inc.

Section 3.19(a)

EMPLOYEE BENEFIT PLANS; LABOR MATTERS a) Severance Agreement by and between K. Blake Darcy and Credit Suisse First Boston Corporation b) Severance Agreement by and between Glenn Tongue and Credit Suisse First Boston Corporation

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document c) Employees' Savings and Retirement Plan of Credit Suisse First Boston d) Employees' Pension Plan of Credit Suisse First Boston e) Deferred Compensation Plan of Credit Suisse First Boston f) Defined Benefit Master Trust Agreement by and between Credit Suisse First Boston Corporation and Mellon Bank, N.A. g) Trust Agreement between Credit Suisse First Boston Corporation and Fidelity Management Trust Company establishing Employees' Savings and Profit Sharing Plan of Credit Suisse First Boston Trust h) Human Resources Policies and Procedures Manual

o Maternity and Paternity Benefits

o Adoption Leave

o Honeymoon Leave

o Family, Medical and Personal Leave Policies

o Tuition Reimbursement

o Vacation

o Annual Required Absence

o Bonus Days

o Leave for Analysts Promoted to Associates

o Sabbatical Leave

o Health Club Reimbursement

o Executive Physicals

o Loyalty Bonus

o Mortgage Assistance

o Avoiding Workplace Harassment Policy i) CSFBdirect Severance Plan j) Health Care Plans k) Dental Plan l) Flexible Spending Accounts (including the Pre-tax Contribution Plan, the Medical Reimbursement Plan and the Dependent Care Plan) m) Flexible Life Insurance Plan n) Spousal Life Insurance Plan o) Personal Accident Insurance p) Business Travel Accident Insurance q) Short-Term Disability Plan r) Long-Term Disability Plan s) Group Personal Excess Liability Insurance t) Accidental Death & Dismemberment Insurance u) Workers' Compensation Insurance v) Employee Assistance Program w) Child Care Centers and Programs

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document x) Merchant Banking Plans: The following arrangements are leveraged co-investment arrangements in which certain CSFB employees participate, including CSFBdirect employees. CSFBdirect participants will continue to participate, if applicable, pursuant to the terms of the arrangements.

o EMA 2001

o DLJ/LBO Incentive Plans (1992 - 1999)

o DLJ/LBO Incentive Plans (2000 and 2001 LBO Plans)

o DLJ/MBIP Incentive Plans (1992 - 2000)

o DLJ Fund Investment Partners II, L.P. y) LTI VI Plan: [Long term incentive plan which will be paid out in July 2002]. z) Executive Supplemental Retirement Programs: [Benefits will be paid out pursuant to the terms of the plan.]

o DLJ Executive Supplemental Retirement Program I

o DLJ Executive Supplemental Retirement Program II

o DLJ Executive Supplemental Retirement Program III

- Employees of the Company participate, or are eligible to participate in, each of the Company Plans, except for the Employee Pension Plan of Credit Suisse First Boston.

- Other than the CSFBdirect Severance Plan, the Company does not sponsor any Company Benefit Plan.

Section 3.19(g)

EMPLOYEE BENEFIT PLANS; LABOR MATTERS

Severance Agreement by and between K. Blake Darcy and Credit Suisse First Boston Corporation

Section 3.20

TAXES

None

Section 3.21

RELATIONSHIPS WITH RELATED PERSONS

None

Section 5.01(a)

CONDUCT OF BUSINESS PRIOR TO CLOSING

The Company presently intends to terminate the Letter Agreement dated June 2, 1997 between Donaldson Lufkin & Jenrette Securities Corporation and PC Financial Network, Inc.

Section 5.01(b)

CONDUCT OF BUSINESS PRIOR TO THE CLOSING

None

Section 5.08

RELEASE OF INDEMNITY OBLIGATIONS; ASSUMPTION OF CERTAIN EMPLOYEE OBLIGATIONS

None

Section 9.02

INDEMNIFICATION OF THE PURCHASER a) The investigation being conducted by various governmental authorities and SROs in connection with the allocation of shares in IPOs, and all claims and litigation arising out of the investigation, including third party claims. b) The matters described in clauses (a), (b) and (c) of Section 3.17(b) of the Disclosure Schedules. c) The Andover.net matter. d) The Partello matter.

FIRST AMENDMENT TO PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO PURCHASE AGREEMENT (this "Amendment") dated as of February 1, 2002 is entered into by and between Credit Suisse First Boston

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (USA), Inc., a Delaware corporation (the "Seller") and Bankmont Financial Corp., a Delaware corporation (the "Purchaser").

WHEREAS, the Seller and the Purchaser are parties to a Purchase Agreement, dated as of November 28, 2001 (as amended, the "Purchase Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Purchase Agreement; and

WHEREAS, the Seller and Purchaser desire to make certain amendments to the Purchase Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises, and intending to be legally bound hereby, the Seller and the Purchaser hereby agree as follows:

SECTION 1 PURCHASE AGREEMENT.

Subject to and upon the terms and conditions set forth herein, the Purchase Agreement is amended as follows:

1.1 Section 2.02 of the Purchase Agreement shall be amended and restated to read as follows:

"Section 2.02. PURCHASE PRICE. The Purchase price for the LLC Interests and the assets set forth in Section 2.02 of the Disclosure Schedule shall be $517,339,321, (the "PURCHASE PRICE"), together with interest thereon during the period from (and including) February 2 through February 3, 2002 at the interest rate equal to that earned by the Purchaser (or any of its affiliates) on such funds during such period, subject to the adjustment set forth in Section 2.06."

1.2 Section 2.06 of the Purchase Agreement shall be amended by adding the following to the end of such Section as a new subsection(d):

"(d) Notwithstanding anything contained in this Section 2.06 that may be construed to the contrary, in no event shall the Purchase Price be adjusted in connection with the transfer of the assets set forth in Section 2.02 of the Disclosure Schedule, including without limitation to reflect any capital contribution made in connection therewith."

1.3 The following sentence shall be inserted at the end of Section 5.15 of the Purchase Agreement:

"The Seller shall use its reasonable best efforts to cause the Introducing Broker Agreement, dated February 11, 2000, between DLJDIRECT-eUnion and DLJDIRECT Inc. (the "INTRODUCING BROKER AGREEMENT") to be terminated or assigned to another person as soon as practicable after the Closing and the Purchaser agrees to cause the Company to cooperate with the Seller in effecting the foregoing. In addition, the Seller agrees to pay to the Company, monthly in arrears by wire transfer of immediately available funds to a bank account designated by the Company, $25,000 for each week (or portion thereof) following the Closing Date in which the Introducing Broker Agreement has not been so terminated or assigned."

1.4 Section 5.16 of the Purchase Agreement shall be amended by adding the following to the beginning of such Section:

"Except as agreed by the Seller and the Purchaser,"

1.5 Section 5.18 of the Purchase Agreement shall be amended and restated as follows:

"At or prior to the Closing, the Seller shall cause all right, title and interest to the assets described in Section 2.02 of the Disclosure Schedule to be transferred to the Company pursuant to an assignment agreement in form and substance (not including purchase price, which shall be determined pursuant to Section 7.06(f)) reasonably satisfactory to the Purchaser. In addition, at Closing, the Purchaser shall cause all right, title and interest to the assets described in Exhibit A hereto to be transferred to Seller pursuant to a Bill of Sale in the form attached hereto as Exhibit B. If and to the extent that any asset has been mistakenly transferred to the Company or retained by the Seller on the Closing Date, the parties shall, within 30 days after the Closing, use all reasonable efforts to transfer such assets for no consideration from the Company to the Seller or from the Seller to the Company, as appropriate."

1.6 The following Section 5.20 shall be added to the Purchase Agreement:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5.20. UNITED KINGDOM. Following the Closing, the Seller will use its reasonable best efforts to assist the Purchaser in transferring the accounts arising out of the Introducing Broker Agreement, dated June 16, 2000, by and between DLJDIRECT Ltd. and DLJDIRECTInc., to a third party."

1.7 The following clause (xi) shall be inserted at the conclusion of the first sentence in Section 9.02(a), and the "and" prior to clause (x) shall be deleted:

"and (xi) the Introducing Broker Agreement that do not arise from a breach by the Company of any of its obligations under such agreement."

SECTION 2 SCHEDULES.

2.1 Section 2.02 of the Disclosure Schedule shall be replaced in its entirety by Exhibit D hereto.

2.2 All references to the License Agreement, dated September 2, 1997, between DLJ Long Term Investment Corporation and DLJDIRECT Inc., in the Disclosure Schedule, including but not limited to the eighteenth bullet-point under Section 3.07(a)(a) of the Disclosure Schedule, shall refer instead to the License Agreement, dated March 11, 1999, between DLJ Long Term Investment Corporation and DLJdirect Holdings, Inc.

SECTION 3 GENERAL.

3.1 COUNTERPARTS. This Amendment may be executed in any number of counterparts and either party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which, when taken together, will be deemed to be one and the same Amendment.

3.2 REAFFIRMATION. As herein modified, the Purchase Agreement shall remain in full force and effect and is hereby ratified, approved and confirmed in all respects.

3.3 REFERENCES. On and after the date hereof, each reference in the Purchase Agreement and the related documents to "Purchase Agreement," "this Agreement" or words of like import shall, unless the context otherwise requires, be deemed to refer to the Purchase Agreement as modified hereby.

3.4 BINDING AGREEMENT. This Amendment shall be binding upon the Seller and the Purchaser and their respective successors and assigns.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

CREDIT SUISSE FIRST BOSTON (USA), INC.

By: /s/ Neil Radey ------Title:

BANKMONT FINANCIAL CORP.

By: ------Title:

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

CREDIT SUISSE FIRST BOSTON (USA), INC.

By: ------Title:

By: /s/ [ILLEGIBLE] ------Title: Executive VP and General Counsel

EXHIBIT A

SCOTTSDALE, ARIZONA TRANSFERRED ASSETS

See attached list

EXHIBIT B

BILL OF SALE

BILL OF SALE AND ASSINGNMENT AND ASSUMPTION AGREEMENT

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of February 1, 2002 (this "AGREEMENT"), by and between CSFBDIRECT HOLDINGS LLC, a Delaware limited liability company ("CSFB"), and CSFBDIRECT LLC, a Delaware limited liability company (the "COMPANY").

WHEREAS, Credit Suisse First Boston (USA), Inc., a Delaware corporation, and Bankmont Financial Corp., a Delaware corporation, have entered into a Purchase Agreement, dated as of November 28, 2001, as amended on February 1, 2001 (the "PURCHASE AGREEMENT;" unless otherwise defined herein, capitalized terms shall be used herein as defined in the Purchase Agreement); and

WHEREAS, the Company desires to transfer certain assets to CSFB at Closing;

NOW, THEREFORE, in consideration of the promises and mutual agreements set forth in the Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CSFB and the Company hereby agree as follows:

1. SALE AND ASSIGNMENT OF ASSETS. The Company hereby sells, assigns, transfers and conveys unto CSFB and its successors and assigns, forever, the entire right, title and interest of the Company free and clear of all Encumbrances in and to any and all of the assets included in the categories of assets listed as Schedule 1 hereto (the "ASSETS").

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2. ASSUMPTION OF LIABILITIES. CSFB hereby unconditionally and irrevocably assumes and agrees to pay, perform and discharge promptly and fully when due any and all Liabilities directly related to, or arising out of, the Assets.

3. FURTHER ASSURANCES. The Company hereby covenants and agrees that, at any time and from time to time after the date of this Agreement at CSFB's request, the Company will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, any and all further acts, conveyances, transfers, assignments, and assurances as reasonably necessary to sell, assign, transfer or convey to CSFB any of the Assets.

4. POWER OF ATTORNEY. The Company hereby constitutes and appoints CSFB, its successors and assigns, the true and lawful attorney and attorneys of the Company, with full power of substitution, in the name of CSFB or in the name and stead of the Company, but on behalf of and for the benefit of CSFB, its successors and assigns (and at the expense of the Company):

(a) to collect, demand and receive any and all Assets transferred hereunder and to give receipts and releases for and in respect of the same;

(b) to institute and prosecute in the Company's name, or otherwise, for the benefit of CSFB, any and all actions, suits or proceedings, at law, in equity or otherwise,

which CSFB may deem proper in order to collect, assert or enforce any claim, right or title of any kind in or to the Assets hereby sold and assigned to CSFB or intended so to be, to defend or compromise any and all such actions, suits or proceedings in respect of any of such Assets, and to do all such acts and things in relation thereto as CSFB shall deem advisable for the collection or reduction to possession of any of such Assets; and

(c) to take any and all other reasonable action designed to vest more fully in CSFB the Assets hereby sold and assigned to CSFB or intended so to be and in order to provide for CSFB the benefit, use, enjoyment and possession of such Assets.

The Company acknowledges that the foregoing powers are coupled with an interest and shall be irrevocable by it or upon its subsequent dissolution or in any manner or for any reason. CSFB shall be entitled to retain for its own account any amounts collected pursuant to the foregoing powers, including any amounts payable as interest with respect thereto. The Company shall from time to time pay to CSFB, when received, any amounts that shall be received directly or indirectly by the Company (including amounts received as interest) in respect of any Assets sold, assigned or transferred to CSFB pursuant hereto.

5. ASSIGNMENT. This Agreement may not be assigned by operation of Law or otherwise without the express written consent of the Company and CSFB; PROVIDED, HOWEVER, that the Company or CSFB may assign this Agreement to an Affiliate without such consent.

6. NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

7. NO REPRESENTATIONS AND WARRANTIES. No representations or warranties, express or implied, are made by the parties.

8. AMENDMENTS; NO WAIVER. This Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, the Company and CSFB. No failure or delay on the part of either part in exercising any right hereunder will operate as a waiver of, or impair, any such right. No single or partial exercise of any such right will preclude any other or further exercise thereof or the exercise of any other right. No waiver of any such right will be deemed a waiver of any other right hereunder.

9. SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

10. COUNTERPARTS. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

11. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties hereto shall be entitled to specific performance of the terms hereof in addition to any other remedy at law or equity.

12. GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

IN WITNESS WHEREOF, this Agreement has been executed by the Company and CSFB as of the date first above written.

CSFBDIRECT HOLDINGS LLC

By: ------Name: Title:

CSFBDIRECT LLC

By: ------Name: Title:

EXHIBIT C

REVISED SECTION 2.02

Project Charlie ------Summary of Fixed Assets ------

Category ------

As amended on May 14, 2001

BY-LAWS

-0F-

CREDIT SUISSE FIRST BOSTON (USA), INC (FORMERLY, DONALDSON, LUFKIN & JENRETTE, INC.)

BY-LAWS

-OF-

CREDIT SUISSE FIRST BOSTON (USA), INC. (HEREIN CALLED THE "CORPORATION")

ARTICLE I

STOCKHOLDERS

SECTION 1.01. ANNUAL MEETING. The annual meeting of stockholders for the election of directors and the transaction of such other business as may come before it shall be held on the last Tuesday in April in each year (or if said day is a legal holiday, then on the next succeeding day not a legal holiday), or such other day as shall be fixed by the Board of Directors, as such place within or without the State of Delaware and at such time of day as shall be fixed by the Board of Directors and stated in the notice of the meeting.

SECTION 1.02. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, may be called at any time by the Chairman of the Board, any Vice Chairman of the Board, the President, or by resolution of the Board of Directors. Special meetings of stockholders shall be held at such place, within or without the State of Delaware, as shall be fixed by the person or persons calling the meeting and stated in the notice or waiver of notice of the meeting.

SECTION 1.03. NOTICE OF MEETINGS OF STOCKHOLDERS. Whenever stockholders are required or permitted to take any action at a meeting, written notice of the meeting shall be given signed with the written, printed or facsimile signature of the Chairman of the Board, any Vice Chairman of the Board, the President, any Managing Director, Senior Vice President, Vice President or by the Secretary or Assistant Secretary of the Corporation (unless that notice shall be waived or unless the meeting is to be dispensed with in accordance with the provisions of paragraph 8 of Article Seventh of the Restated

2 hereof) which shall state the time and place of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. A copy of the notice of any meeting shall be given, personally or by mail, not less than ten nor more than fifty days before the date of the meeting, to each stockholder entitled to vote at such meeting. If mailed, such notice is given when deposition in the United States mail, with postage thereon prepaid, directed to the stockholder at his address as it appears on the record of stockholders, or, if he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, then directed to him at such other address.

When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, except as provided by the General Corporation Law of the State of Delaware, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting.

SECTION 1.04. QUORUM. At all meetings of the stockholders, the holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or by proxy, shall constitute a quorum for the transaction of any business. If, however, a majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time until the requisite amount of voting stock shall be represented. At such adjourned meeting at which the requisite amount of voting stock shall be represented, any business may be transacted which might have been transacted at the meeting as originally noticed.

SECTION 1.05. ORGANIZATION. Meetings of stockholders shall be presided over by a Chairman of the Board, if any, or in the absence of a Chairman of the Board by a Vice Chairman of the Board, if any, or in the absence of a Vice Chairman of the Board by a Chief Executive Officer, or in the absence of a Chief Executive Officer by a President, or in the absence of a President by a Senior Vice President, or in the absence of a Senior Vice President by a Vice

President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. A Secretary, or in the absence of a Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of a Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document chairman of the meeting shall have the right and authority to adjourn a meeting of stockholders without a vote of stockholders and to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting and are not inconsistent with any rules or regulations adopted by the Board of Directors pursuant to the provisions of the certificate of incorporation, including the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls for each item upon which a vote is to be taken.

SECTION 1.06. METHOD OF VOTING. The vote upon any question before the meeting need not be by ballot. All elections and all other questions shall be decided by a plurality of the votes cast, at a meeting at which a quorum is present, except as expressly provided otherwise by the General Corporation Law of the State of Delaware or the Certificate of Incorporation or other certificate filed pursuant to law, or these By-Laws.

SECTION 1.07. VOTING RIGHTS OF STOCKHOLDERS AND PROXIES. Each stockholder of record entitled to vote in accordance with the laws of the State of Delaware, the Certificate of Incorporation or these By-Laws, shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of stock entitled to vote standing in his name on the books of the Corporation, but no proxy shall be voted on after three yeas from its date, unless the proxy

4 provides for a longer period. Each proxy shall be valid only for the meeting in respect of which it is given and any and all adjournments thereof.

SECTION 1.08. OWNERSHIP OF ITS OWN STOCK. Shares of its own capital stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held by the Corporation, shall neither be entitled to vote nor counted for quorum purposes. Nothing in this section shall be construed as limited the right of the Corporation to vote its own stock held by it in a fiduciary capacity.

SECTION 1.09. VOTING BY FIDUCIARIES AND PLEDGORS. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held, and persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent said stock and vote thereon.

SECTION 1.10. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders of any adjournment thereof, or to express consent to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, or record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action. If no record date is fixed by the Board of Directors, the record date shall be determined in accordance with the provisions of the General Corporation Law of the State of Delaware.

SECTION 1.11. LIST OF STOCKHOLDERS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares

5 registered in the name of each stockholder. Such list shall be open to the examination of an stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held (which place shall be specified in the notice of the meeting) or, if not so specified at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of the meeting during the whole time thereof, any may be inspected by any stockholder who may be present. Upon the willful neglect or refusal of the directors to produce such a list at any meeting for the election of directors, they shall be ineligible for election to any office at such meeting.

SECTION 1.12. STOCKHOLDERS' RIGHT OF INSPECTION. Except as may be otherwise expressly provided by the laws of the State of Delaware, the Board of Directors shall have power to keep the stock ledger, books, documents and accounts of the Corporation outside the State of Delaware. Except as otherwise expressly provided by the laws of the State of Delaware and by the Certificate of Incorporation or any amendment thereto, and except as authorized by the directors of the stockholders (a) no stockholder shall have any right to inspect any book, document or account of the Corporation and (b) the Board of Directors may determine whether and to what extent and at what time and places and under what conditions and regulations the books, documents and accounts of the Corporation (other than the original or a duplicate stock ledger), or any of them, shall be open to the inspection of stockholders.

The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 1.10 or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.

SECTION 1.13. CONSENT IN LIEU OF MEETING. As provided in the Certificate of Incorporation, any corporate action, with respect to which the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document vote of the stockholders at a meeting thereof is required or permitted by any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation of the Corporation, or these By-Laws, may be

6 taken without that vote and meeting, and that vote and meeting may be dispensed with, if that corporate action has been consented to in writing by the holders of a majority (or, if with respect to a particular corporate action the General Corporation Law of the State of Delaware, the Certificate of Incorporation of the Corporation or these By-Laws specifies a greater percentage, by the holders of that percentage) of the stock that would have been entitled to vote upon that action if a meeting were held. Prompt notice shall be given to all stockholders of the taking of any corporate action pursuant to the provisions of this paragraph unless that action has been consented to in writing by the holders of all of the stock that would have been entitled to vote upon that action if a meeting were held.

ARTICLE II

DIRECTORS

SECTION 2.01. MANAGEMENT OF BUSINESS. The business of the Corporation shall be managed by its Board of Directors. Directors need not be holders of the Common Stock of the Corporation.

The Board of Directors, in addition to the powers and authority expressly conferred upon it herein, by statute, by the Certificate of Incorporation of the Corporation or otherwise, is hereby empowered to exercise all such powers as may by exercised by the Corporation, except as expressly provided otherwise by the statues of the State of the Delaware, by the Certificate of Incorporation of the Corporation or by these By-Laws.

Without prejudice to the generality of the foregoing, the Board of Directors, by resolution, or resolutions, may create and issue, whether or not in connection with the issue and sale of any shares of stock or other securities of the Corporation, rights or options entitling the holders thereof to purchase from the Corporation any shares of its capital stock of any class or classes or any other securities of the Corporation, such rights or options to be evidenced by or in such instrument or instruments as shall be approved by the Board of Directors. The terms upon which, including the time or time, which may be limited or unlimited in duration, at or within

7 which, and the price or prices at which, any such rights or options may be issued and any such shares or other securities may be purchased from the Corporation upon exercise of any such right or option shall be such as shall be fixed and stated in the resolution or resolutions adopted by the Board of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Directors providing for the creation and issue of such rights or options, and, in every case, set forth or incorporated by reference in the instrument or instruments evidencing such rights or options. In the absence of actual fraud in the transaction, the judgment of the directors as to the consideration for the issuance of such rights or options and the sufficiency thereof shall be conclusive. In case the shares of stock of the Corporation to be issued upon the exercise of such rights or options shall be shares having a par value, the price or prices so to be received therefore shall not be less than the par value thereof. In case the shares of stock so to be issued shall be share of stock without par value, the consideration therefore shall be determined in the manner provided in Section 153 of the General Corporation Law of the State of Delaware.

SECTION 2.02. NUMBER OF DIRECTORS. The number of directors which shall constitute the whole Board shall consist of such number of directors as may be fixed from time to time by the stockholders or by a majority of the whole Board, provided, however, that in no case shall the number be less than three.

SECTION 2.03. ELECTION AND TERM. The directors shall be elected at the annual meeting of the stockholders, and each director shall be elected to hold office until his successor shall be elected and qualified, or until his earlier resignation or removal.

SECTION 2.04. RESIGNATIONS AND REMOVAL. Any director of the Corporation may resign at any time by giving written notice to the Corporation. Such resignation shall take effect at the time specified therein, if any, or if no time is specified therein, then upon receipt of such notice by the Corporation; and, unless otherwise provided therein, the acceptance of such resignation shall not be necessary to make it effective.

Any director may be removed at any time, with or without cause, upon the affirmative vote of the holders of a majority of the stock of the Corporation at that time having voting power for the election of directors.

SECTION 2.05. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filed by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until their successors shall be elected and qualified, or until their earlier resignation or removal. When one or more directors shall resign from the Board or be removed, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chose shall hold office as herein provided in the filling of other vacancies.

SECTION 2.06. QUORUM OF DIRECTORS. At all meetings of the Board of Directors, one-third of the entire Board, but not less than two directors, shall constitute a quorum for the transaction of business and the act of a majority of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as provided in Section 2.05 and 2.14 hereof.

A majority of the directors present, whether or not a quorum is present, may adjourn any meeting of the directors to another time and place. Notice of any adjournment need not be given if such time and place are announced at the meeting.

SECTION 2.07. ANNUAL MEETING. The newly elected Board of Directors shall met immediately following the adjournment of the annual meeting of stockholders in each year at the same place, within or without the State of Delaware, and no notice of such meeting shall be necessary.

SECTION 2.08. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such time and place, within or without the State of Delaware as shall from time to time be fixed by the Board and no notice thereof shall be necessary.

SECTION 2.09. SPECIAL MEETINGS. Special meetings may be called at any time by the Chairman of the Board, any Vice Chairman of the Board, the President or by resolution of the Board of Directors. Special meetings shall be held at such place, within or without the State of Delaware, as shall be fixed by the person or persons calling the meeting and stated in the notice or waiver of notice of the meeting.

Special meetings of the Board of Directors shall be held upon notice to the directors of waiver thereof.

Unless waived, notice of each special meeting of the directors, stating the time and place of the meeting, shall be given to each director by delivered letter, by telegram or by personal communication either over the telephone or otherwise, in each such case not later than 24 hours prior to the meeting, or by mailed letter deposited in the United States mail with postage thereof prepaid not later than the seventh day prior to the meeting. Notices of special meetings of the Board of Directors and waivers thereof need not state the purpose or purposes of the meeting.

SECTION 2.10. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Unless otherwise restricted by the Certificate of Incorporation of the Corporation or these By-Laws, members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

SECTION 2.11. ORGANIZATION. Meetings of the Board of Directors shall be presided over by a Chairman of the Board, if any, or in the absence of a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Chairman of the Board by a Vice Chairman of the Board, if any, or in the absence of a Vice Chairman of the Board, by a Chief

Executive Officer, or in the absence of a Chief Executive Officer, by a President, or in the absence of a President, by a Managing Director, or in the absence of a Managing Director, by a chairman chosen at the meeting. A secretary, or in the absence of a Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of a Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting.

SECTION 2.12. ACTION WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Committee, as the case may be, consent thereto in a writing or writings and the writing or writings are filed with the minutes of proceedings of the Board or committee.

SECTION 2.13. COMPENSATION. Directors shall receive such fixed sums and expenses of attendance for attendance at each meeting of the Board or of any committee and/or such salary as may be determined from time to time by the Board of Directors; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation any other capacity and receiving compensation therefore.

SECTION 2.14. OPERATION COMMITTEE. The Board of Directors may, by resolution or resolutions, passed by a majority of the whole Board, designate an Operating Committee (and may discontinue the same at any time) to consist of two or more of the directors of the Corporation. The members shall be appointed by the Board and shall hold office during the pleasure of the Board. The Board may designate one or more directors as alternate members of the committee, who may replace an absent or disqualified member at any meeting of the Committee. The Operating Committee shall have and may exercise all the powers of the Board of Directors (when the Board is not in session) in the management of the business and affairs of the Corporation (and may authorize the seal of the Corporation to be affixed to all papers which may require it), except that the Operating Committee shall have no power (a) to elect directors;

(b) to alter, amend or repeal these By-Laws or any resolution or resolutions of the directors designating an Operating Committee; (c) to declare any dividend or make any other distribution to the stockholders of the Corporation except that such Committee may declare dividends on any series of the Corporation's preferred stock; or (d) to appoint any member of the Operating Committee. Regular meetings of the Operating Committee may be held at such time and place within or without the Sate of Delaware, as shall from

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document time to time be fixed by the Operating Committee and no notice thereof shall be necessary. Special meetings may be called at any time by the Chairman of the Board, any Vice Chairman of the Board, the President or the Chairman of the Operating Committee. Special meetings shall be held at such place, within or without the Sate of Delaware, as shall be fixed by the person calling the meeting and stated in the notice or waiver of the meeting. A majority of the members of the Operating Committee shall constitute a quorum for the transaction of the business and the act of a majority present at which there is a quorum shall be the act of the Operating Committee. Notice of each special meeting of the Operating Committee shall be give (or waiver) in the same manner as notice of a directors' meeting.

SECTION 2.15. OTHER COMMITTEES. The Board of Directors may by resolution passed by a majority of the whole Board, designate one or more other committees, each committee to consist of two or more of the directors of the Corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required.

SECTION 2.16. ADVISORY DIRECTORYS. The Board of Directors may, by resolution or resolutions, passed by a majority of the whole Board, appoint one or more persons to the position

12 of Advisory Director to serve in such position at the pleasure of the Board of Directors. The Advisory Directors shall inform and counsel the Board of Directors on such matters as the Board may deem appropriate and shall have such other responsibilities and shall perform such other duties as the Board shall assign to them, but they shall have no authority to exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Each Advisory Director shall have the privilege of attending meetings of the Board but shall do so solely as an observer. Notice of such meetings to an Advisory Director shall not be required. Each Advisory Director shall be entitled to receive such compensation, and such reimbursement for expenses of attendance at each meeting of the Board, as may be fixed or determined from time to time by the Chief Executive Officer of the Corporation. No Advisory Director shall be entitled to vote on any business coming before the Board of Directors nor shall an Advisory Director be counted as a member of the Board for the purpose of determining the number of directors necessary to constitute a quorum, for the purpose of determining whether a quorum is present or for any other purpose whatsoever. Each Advisory Director shall be indemnified to the same extent as are directors, offices, employees and agents of the Corporation under Article Eight of the Corporation's Restated Certificate of Incorporation.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 2.17. ABSENCE OR DISQUALIFICATION OF COMMITTEE MEMBERS. Notwithstanding any other provision of these By-Laws, in the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not the member or members present constitute a quorum, may unanimously appoint another member of the Board of Directors to act as the meeting in a place of any such absent or disqualified member.

ARTICLE III

OFFICERS

SECTION. 3.01. NUMBER. The offices of the Corporation shall be chosen by the Board of Directors. The offices shall be a Chairman of the Board of Directors, a President, a Secretary, a

Treasurer, and such number of Vice Chairmen of the Board, Managing Directors, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers and other offices as the Board may from time to time determine. Any person may hold two or more offices at the same time, other than the offices of President and Secretary. The Chairman of the Board, each Vice Chairman of the Board, the President and the Chairman of the Operating Committee shall be chosen from among the Board of Directors, but other offices need not be members of such Board.

SECTION 3.02. TERMS OF OFFICE. The Chairman of Board, the President, the Secretary and the Treasurer shall hold their offices until their successors are chosen and qualified, subject to the provisions of Section 3.04 hereof. All other officers shall hold office at the pleasure of the Board of Directors.

SECTION 3.02. REMOVAL. Any officers, including, upon the choosing of a successor, the Chairman of the Board, the President, the Secretary and the Treasurer, may be removed from office at any time by the Board of Directors with or without cause.

SECTION 3.04. AUTHORITY. The Secretary shall record all the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose, and shall have the authority, perform the duties and exercise the powers in the management of the Corporation usually incident to the office held by him, and/or such other authority, duties and powers as may be assigned to him from time to time by the Board of Directors or the President. The other officers and agents, if any, shall have the authority, perform the duties and exercise the powers in the management of the Corporation usually incident to the offices held by them, respectively, and/or such other authority, duties and powers as may be assigned to them from time to time by the Board of Directors or (except in the case of the President) by the President.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 3.05. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of attorney, proxies, waivers of notice of meetings and other instruments relating to securities owned by the Corporation may be executed in the name and on behalf of the Corporation by the Chairman of

14 the Board, any Vice Chairman of the Board, the President, any Managing Director, any Senior Vice President, any Vice President, the Secretary, the Assistant Secretary and the Treasurer, and any such officer may in the name of and on behalf of the Corporation, take all such actions as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which this Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

ARTICLE IV

CAPITAL STOCK

SECTION 4.01. STOCK CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by, the Chairman of the Board, or a Vice Chairman of the Board, or the President, or a Managing Director, or a Senior Vice President, or a Vice President, and by the Treasurer or an Assistant Treasurer, or by the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Where such certificate is signed (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, then the signature of the offices of the Corporation may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.

SECTION 4.02. TRANSFERS. Stock of the Corporation shall be transferable in the manner prescribed by the laws of the State of Delaware and in these By-Laws. Transfers of stock shall be made on the books of the Corporation only by the person named on the certificate or by attorney

15 lawfully constituted in writing and upon the surrender of the certificate therefore, which shall be canceled before the new certificate shall be issued.

SECTION 4.03. REGISTERED HOLDERS. The Corporation shall be entitled to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document treat the person in whose name any share of stock or any warrant, right or option is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share, warrant, right or option on the part of any other person, whether or not the Corporation shall have notice thereof, save as may be expressly provided otherwise by the laws of the State of Delaware. No transfer of stock shall be valid as against the Corporation, its stockholders and creditors for any purpose until it shall have been entered in the Stock Book, as required by these By-Laws, by an entry showing from and to whom transferred, save as expressly provided otherwise by the laws of the State of Delaware.

SECTION 4.04. NEW CERTIFICATES. The Corporation shall issue a new certificate of stock in the place of any certificate therefore issued by it, alleged to have been lost, stolen or destroyed, if the owner (1) so requests before the Corporation has notice that the shares of stock represented by that certificate have been acquired by a bona fide purchaser; (2) files with the Corporation a bond sufficient (in the judgment of the directors or the transfer agent) to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or theft of the certificate or the issuance of a new certificate; and (3) satisfies any other requirements imposed by the directors that are reasonable under the circumstances. A new certificate may be issued without requiring any bond, when, in the judgment of the directors, it is proper to do so.

SECTION 4.05. CLOSING TRANSFER BOOKS -- RECORD DATE. The Board of Directors may close the stock transfer books of the Corporation for a period not exceeding 50 days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect or for a period of not exceeding 50 days in connection with obtaining the consent of stockholders for any purpose. In lieu of closing the stock transfer books as aforesaid, the

16 directors are hereby authorized to fix in advance a date, not exceeding 50 days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to received payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after such record date

ARTICLE. VI

MISCELLANEOUS

SECTION 5.01 OFFICES. The registered office of the Corporation in the State of Delaware shall be at 2711 Centerville Road, Suite 400, Wilmington, Delaware. The Corporation may also have offices at other places within and/or without the State of Delaware.

SECTION 5.02. SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its incorporation and the words "Corporate Seal Delaware".

SECTION 5.03. CHECKS. All checks or demands for money shall be signed by such person or persons as the Board of Directors may from time to time determine.

SECTION 5.04. FISCAL YEAR. The fiscal year shall begin the first day of January in each year and shall end on the thirty-first day of December of such year,

SECTION 5.05. WAIVERS OF NOTICE; DISPENSING WITH NOTICE. Whenever any notice whatever is required to be given under the provisions of the General Corporation Law of the State

17 of Delaware, of the Certificate of Incorporation of the Corporation, or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time sated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

Attendance of a person at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Whenever any notice whatever is required to be given under the provisions of the General Corporation Law of the Sate of Delaware, of the Certificate of Incorporation of the Corporation, or of these By-Laws, to any person with whom communication is made unlawful by any law of the United States of America, or by any rule, regulation, proclamation or executive order issued under any such law, then the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person; and any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document action or meeting which shall be taken or held without notice to any such person or without giving or without applying for a license or permit to give any such notice to any such person with whom communication is made unlawful as aforesaid, shall have the same force and effect as if such notice had been given as provided under the provisions of the General Corporation Law of the State of Delaware, or under the provisions of the Certificate of Incorporation of the Corporation or of these By-Laws. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any of the other sections of this title, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

SECTION 5.06. LOANS TO AND GUARANTEES OF OBLIGATIONS OF EMPLOYEES AND OFFICERS. The Corporation may lend money to or guaranty any obligation of, or otherwise assist any officer

18 or other employee of the Corporation or of a subsidiary, including any officer or employee who is a director of the Corporation or a subsidiary, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any other statute.

SECTION 5.07. AMENDMENT OF BY-LAWS. These By-Laws may be altered, amended or repealed by a majority of the Directors present at any meeting of the Board of Directors.

SECTION 5.08. SECTION HEADINGS AND STATUTORY REFERENCES. The headings of the Articles and Sections of these By-Laws have been inserted for convenience of reference only and shall not be deemed to be part of these By-Laws.

EXECUTION COPY

U.S. $3,500,000,000

364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT

Dated as of May 25, 2001

Among

CREDIT SUISSE FIRST BOSTON, INC.,

and

CREDIT SUISSE FIRST BOSTON (USA), INC.

as Borrowers,

and

THE BANKS NAMED HEREIN,

as Banks,

and

THE CHASE MANHATTAN BANK,

as Administrative Agent,

and

THE BANK OF NEW YORK, BANK ONE, NA (MAIN OFFICE CHICAGO), CITIBANK, N.A. and DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch,

as Syndication Agents

------

J.P. MORGAN SECURITIES INC., as Sole Arranger, Sole Advisor and Sole Bookrunner

T A B L E O F C O N T E N T S

Page ----

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms...... 1

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 1.02. Computation of Time Periods...... 11 SECTION 1.03. Accounting Terms...... 12

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Advances...... 12 SECTION 2.02. Revolving Credit and Swing Line Borrowing Procedures...... 17 SECTION 2.03. General Provisions Relating to Advances...... 18 SECTION 2.04. Fees...... 19 SECTION 2.05. Termination or Reduction of the Facility...... 19 SECTION 2.06. Repayment of Advances...... 20 SECTION 2.07. Interest...... 21 SECTION 2.08. Additional Interest on Eurodollar Rate Advances...... 22 SECTION 2.09. Interest Rate Determination...... 22 SECTION 2.10. Prepayments...... 22 SECTION 2.11. Increased Costs...... 22 SECTION 2.12. Illegality...... 23 SECTION 2.13. Payments and Computations...... 24 SECTION 2.14. Taxes...... 25 SECTION 2.15. Sharing of Payments, Etc...... 27 SECTION 2.16. Substitution of Lenders...... 27 SECTION 2.17. Use of Proceeds...... 28 SECTION 2.18. Extension of Termination Date and Maturity Date...... 28 SECTION 2.19. Conversion and Continuation of Revolving Credit Borrowings.....29

ARTICLE III

CONDITIONS OF LENDING

SECTION 3.01. Conditions of Effectiveness...... 30 SECTION 3.02. Conditions Precedent to Each Borrowing...... 31

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Borrowers...... 32

Page ----

ARTICLE V

COVENANTS OF THE BORROWERS

SECTION 5.01. Affirmative Covenants...... 34 SECTION 5.02. Negative Covenants...... 38

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default...... 40

ARTICLE VII

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Amendments, Etc...... 45 SECTION 8.02. Notices, Etc...... 45 SECTION 8.03. No Waiver; Remedies...... 45 SECTION 8.04. Costs, Expenses and Taxes...... 46 SECTION 8.05. Right of Set-Off...... 47 SECTION 8.06. Binding Effect...... 47 SECTION 8.07. Assignments and Participations...... 47 SECTION 8.08. Confidentiality...... 50 SECTION 8.09. Parity...... 51 SECTION 8.10. Survival...... 51 SECTION 8.11. Governing Law...... 51 SECTION 8.12. Execution in Counterparts...... 51 SECTION 8.13. Currency Indemnity...... 51 SECTION 8.14. Waiver Under Existing Credit Agreements...... 52 SECTION 8.15. WAIVER OF JURY TRIAL...... 52 SECTION 8.16. Jurisdiction; Consent To Service of Process...... 52

SCHEDULES AND EXHIBITS

Schedule 1 Lending Offices Schedule 2.01 Lenders and Commitments Exhibit A-1 Auction Bid Request Exhibit A-2 Notice of Auction Bid Request Exhibit A-3 Auction Bid Exhibit A-4 Auction Bid Accept Letter Exhibit B-1 Revolving Credit Borrowing Request Exhibit B-2 Swing Line Borrowing Request Exhibit C Request of Extension Exhibit D-1 Opinion of Cleary, Gottlieb, Steen & Hamilton Exhibit D-2 Opinion of Joseph T. McLaughlin, Esq., General Counsel of the Borrowers Exhibit D-3 Opinion of Niederer Kraft & Frey Exhibit E Assignment and Acceptance Exhibit F Guarantee Agreement

iii

U.S. $3,500,000,000 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT DATED AS OF MAY 25, 2001

CREDIT SUISSE FIRST BOSTON, INC., a Delaware corporation ("CSFB Inc."), CREDIT SUISSE FIRST BOSTON (USA), INC., a Delaware corporation ("CSFB (USA)" and, together with CSFB Inc., the "Borrowers"), the banks (the "Banks") listed on Schedule 2.01 hereof, THE CHASE MANHATTAN BANK ("Chase"), as administrative agent for the Lenders and the Swing Line Banks hereunder (the "Administrative Agent") and THE BANK OF NEW YORK, BANK ONE, NA (MAIN OFFICE CHICAGO), CITIBANK, N.A. and DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch, as syndication agents (collectively, the "Syndication Agents"), agree as follows:

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"ADVANCE" means an advance by a Lender to a Borrower pursuant to Section 2.01 and shall include Revolving Credit Advances, Swing Line Advances and Auction Bid Advances.

"AFFILIATE" means, as to any Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person or is a director or officer of such Person.

"AGGREGATE DEBIT ITEMS" means all those items listed as debit items in Exhibit A to Rule 15c3-3, adopted by the Commission under the Securities Exchange Act of 1934, as amended from time to time.

"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

"APPLICABLE RATE" means, for any day, with respect to any Eurodollar Rate Advance, or with respect to the facility fees or utilization fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "Eurodollar Spread prior to Termination Date" (in the case of any Eurodollar Rate Advance to a Borrower outstanding prior to the earlier of the Termination Date and the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI), "Eurodollar Spread on and after Termination Date" (in the case of any Eurodollar Rate Advance outstanding on or at any time after the earlier of the Termination Date and the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI), "Facility Fee Rate" (in the case of any facility fee payable pursuant to clause (a) of Section 2.04) or "Utilization Fee Rate" (in the case of any utilization fee payable pursuant to clause (c) of Section 2.04), as the case may be, based upon the ratings by S&P and Moody's, respectively, applicable on such date to the Index Debt:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For purposes of the foregoing, (i) if either S&P or Moody's shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then the Borrowers and the Lenders shall negotiate in good faith to select a substitute rating agency and during such negotiations the ratings with respect to the Index Debt shall be deemed to be equal to the available remaining rating; (ii) if both S&P and Moody's shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agencies shall be deemed to have established ratings in Category 3; (iii) if the ratings established or deemed to have been established by S&P and Moody's for the Index Debt shall fall within different Categories, the ratings with respect to the Index Debt shall be deemed to be (A) the higher of the two ratings so long as the two ratings are adjacent and (B) the rating that is one rating higher than the lower of the two ratings so long as the two ratings are not adjacent; and (iv) if the ratings established or deemed to have been established by S&P and Moody's for the Index Debt shall be changed (other than as a result of a change in the rating system of S&P or Moody's), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of S&P or Moody's shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrowers and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating of such rating agency most recently in effect prior to such change or cessation and the rating of the other rating agency.

"APPROPRIATE LENDER" means (a) as to the Facility, a Lender that has a Commitment for a portion of, or an Advance under, the Facility, (b) as to the Swing Line Advances, a Swing Line Bank or (c) as to the Auction Bid Advances, any Lender making an Auction Bid Advance.

"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit E hereto.

"AUCTION BID" means an offer by a Lender to make an Auction Bid Advance pursuant to Section 2.01(c).

"AUCTION BID ACCEPT LETTER" means a notification made by a Borrower pursuant to Section 2.01(c)(iv) in the Form of Exhibit A-4.

"AUCTION BID ADVANCE" means an Advance by a Lender to a Borrower as part of an Auction Bid Borrowing resulting from the auction bidding procedure described in Section 2.01(c).

"AUCTION BID BORROWING" means a Borrowing consisting of simultaneous Auction Bid Advances from each of the Lenders whose offer to make one or more Auction Bid Advances as part of such Borrowing has been accepted by a Borrower under the auction bidding procedure described in Section 2.01(c).

"AUCTION BID RATE" means, as to any Auction Bid made by a Lender pursuant to Section 2.01(c)(ii), (x) in the case of a Eurodollar

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Auction Bid Advance, the Margin, and (y) in the case of a Fixed Rate Advance, the fixed rate of interest offered by the Lender making such Auction Bid.

"AUCTION BID REQUEST" means a request made pursuant to Section 2.01(c) in the form of Exhibit A-1.

"BASE RATE" means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the higher of:

(a) the Prime Rate; or

(b) 1/2 of one percent per annum above the Federal Funds Rate.

"BASE RATE ADVANCE" means an Advance which bears interest as provided in Section 2.07(a)(i).

"BHCA" has the meaning specified in Section 5.02(c).

"BORROWING" means a borrowing initially consisting of Advances of the same Type made on the same day by a Lender or Lenders to a Borrower pursuant to Article II. Types of Borrowings may be referred to herein as "Base Rate Borrowings", "Eurodollar Rate Borrowings" or "Fixed Rate Borrowings".

"BUSINESS DAY" means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

"COMMISSION" means the U.S. Securities and Exchange Commission or any other regulatory body which succeeds to the functions of the U.S. Securities and Exchange Commission.

"COMMITMENT" has the meaning specified in Section 2.01(a). On the Effective Date, the aggregate Commitments equal $3,500,000,000.

"CONFIDENTIAL INFORMATION" means information that the Borrowers furnish to the Administrative Agent, the Syndication Agents, any Swing Line

Bank or any Lender and designate in writing to be confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Administrative Agent, the Syndication Agents, such Swing Line Bank or such Lender from a source other than the Borrowers.

"CONTROL" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and "Controlling" and "Controlled" shall have meanings correlative thereto.

"CREDIT SUISSE GROUP" means Credit Suisse Group, a corporation with limited liability organized under the laws of Switzerland.

"CSFB" means Credit Suisse First Boston, a Swiss bank.

"CSFB BROKER-DEALER" means Credit Suisse First Boston Corporation, a Massachusetts corporation and an indirectly wholly owned

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subsidiary of CSFB, Inc., and each other Subsidiary of CSFB Inc. that is a U.S. registered broker-dealer.

"CSFB INC. EVENT OF DEFAULT" means (a) any Event of Default referred to in (i) clause (a) of Section 6.01 which is attributable to any failure of CSFB Inc. to make a payment referred to therein, (ii) clause (b) of Section 6.01 which is attributable to any representation or warranty made by CSFB Inc. or the Guarantor or (iii) clause (c) of Section 6.01 which is attributable to any failure by CSFB Inc. or the Guarantor to observe or perform any term, covenant or agreement referred to therein and (b) any Event of Default referred to in clause (d) through (o), inclusive, of Section 6.01. A CSFB Inc. Event of Default may also constitute a CSFB (USA) Event of Default.

"CSFB (USA) EVENT OF DEFAULT" means (a) any Event of Default referred to in (i) clause (a) of Section 6.01 which is attributable to any failure of CSFB (USA) to make a payment referred to therein, (ii) clause (b) of Section 6.01 which is attributable to any representation or warranty made by CSFB (USA) or the Guarantor or (iii) clause (c) of Section 6.01 which is attributable to any failure by CSFB (USA) or the Guarantor to observe or perform any term, covenant or agreement referred to therein and (b) any Event of Default referred to in clause (d) through (o), inclusive, of Section 6.01. A CSFB (USA) Event of Default may also constitute a CSFB Inc. Event of Default.

"DEBT" of any Person means (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, (iv) all obligations of such Person as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (v) all amounts available to be drawn, and the amount of all unpaid drawings, under letters of credit issued for the account of such Person, and (vi) all obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect

of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (v) above.

"DEFAULT" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both

"DOLLARS" or "$" shall mean lawful money of the United States of America.

"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent.

"EFFECTIVE DATE" means the date on which this Agreement becomes effective pursuant to Section 3.01.

"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized or licensed under the laws of the United States, or any State thereof, and having total assets in excess of $2,000,000,000; (ii) a savings and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document loan association or savings bank organized under the laws of the United States, or any State thereof, and having total assets in excess of $2,000,000,000; (iii) a commercial bank organized under the laws of any other country, or a political subdivision of any such country, having total assets in excess of $2,000,000,000; (iv) the central bank of any country; (v) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership or other entity) which is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business, and having total assets in excess of $1,000,000,000; (vi) any Lender; (vii) an Affiliate of any Lender; and (viii) any special purpose corporation organized under the laws of the United States or any State thereof which is (A) engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and that issues (or the parent of which issues) commercial paper rated at least "Prime-1" by Moody's or "A-1" by S&P or a comparable rating from the successor or either of them and (B) advised by any Lender which is a banking institution.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA is a member of a Borrower's controlled group, or under common control with a Borrower, within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended from time to time.

"ERISA EVENT" means (i) the occurrence with respect to a Plan of a Borrower or any of its ERISA Affiliates of a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (ii) the provision by the administrator of any Plan of a Borrower or any of its ERISA Affiliates of a notice of intent to terminate such Plan under a distress termination, pursuant to

Section 4041(c) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA which would be deemed to be, or result in, a distress termination); (iii) the cessation of operations at a facility of a Borrower or any of its ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA; (iv) the withdrawal by a Borrower or any of its ERISA Affiliates from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the creation of a lien upon property or rights to property of a Borrower or any of its ERISA Affiliates for failure to make a required payment to a Plan are satisfied; (vi) the adoption of an amendment to a Plan of a Borrower or any of its ERISA Affiliates requiring the provision of security to such Plan, pursuant to Section 307 of ERISA; or (vii) the occurrence of any event or condition described in Section 4042(a)(1), (2) or (3) of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan of a Borrower or any of its ERISA Affiliates.

"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent.

"EURODOLLAR RATE" means, with respect to any Eurodollar Rate Borrowing for any Interest Period, (i) the interest rate per annum for deposits in U.S. dollars for a maturity most nearly comparable to such Interest Period which appears on page 3750 (or any successor page) of the Dow Jones Market Service as of 11:00 a.m., London time, on the day that is two Business Days prior to the first day of such Interest Period, or if such a rate does not appear on page 3750 (or any successor page) of the Dow Jones Market Service, (ii) an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the rate at which dollar deposits approximately equal in principal amount to (a) in the case of a Revolving Credit Borrowing, Chase's portion of such Eurodollar Rate Borrowing and (b) in the case of an Auction Bid Borrowing, a principal amount that would have been Chase's portion of such Eurodollar Rate Borrowing had such Auction Bid Borrowing been a Revolving Credit Borrowing, and for a maturity comparable to such Interest Period are offered to the principal London office of Chase in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

"EURODOLLAR RATE ADVANCE" means an Advance which bears interest as provided in Section 2.07(a)(ii).

"EURODOLLAR RATE RESERVE PERCENTAGE" of any Lender for the Interest Period for any Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in

such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.

"EXISTING CREDIT AGREEMENTS" means (i) the U.S. $1,495,000,000 364-Day Auction Bid Advance and Revolving Credit Facility Agreement dated as of June 30, 2000, among CSFB Inc., Credit Suisse First Boston International (Guernsey) Ltd., various lenders party thereto, and Chase, as Administrative Agent and (ii) the Third Amended and Restated Credit Agreement dated as of May 26, 2000, among Donaldson, Lufkin & Jenrette, Inc., Donaldson, Lufkin & Jenrette Securities Corporation, various lenders party thereto, and Chase, as Administrative Agent .

"FACILITY" means the aggregate of the Commitments of all Lenders without taking into account any utilization or deemed utilization of the Commitments.

"FACILITY USAGE" means, at any time, the sum of the amount of Advances outstanding at such time.

"FEDERAL BANKRUPTCY CODE" means the Bankruptcy Reform Act of

"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per annum 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 it.

"FIXED RATE" means, for the period for each Fixed Rate Advance comprising part of the same Auction Bid Borrowing, the fixed interest rate per annum determined for such Advance, as provided in Section 2.01(c).

"FIXED RATE ADVANCE" means an Auction Bid Advance that bears interest at a fixed rate per annum determined as provided in Section 2.01(c).

"FOCUS REPORT" means the Financial and Operational Combined Uniform Single Report required to be filed with the Commission or the NYSE on a monthly and quarterly basis or any report which is required in lieu of such report.

"GAAP" means generally accepted accounting principles in the United States of America.

"GUARANTEE" means the Guarantee Agreement in the form of Exhibit F hereto between Credit Suisse Group and Chase, as Administrative Agent on behalf of the Beneficiaries (as defined therein).

"GUARANTOR" means Credit Suisse Group.

"IBA" has the meaning specified in Section 5.02(c).

"INDEX DEBT" means senior, unsecured long-term indebtedness for borrowed money of the Guarantor that is not guaranteed by any other Person or subject to any other credit enhancement.

"INSUFFICIENCY" means, with respect to any Plan, the amount of "unfunded benefit liabilities" (as defined in Section 4001(a)(18) of ERISA), if any, for such Plan.

"INTEREST PERIOD" means, for each Advance comprising part of the same Borrowing, the period commencing on the date of such Advance (or the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be) and ending on the last day of the period selected by the applicable Borrower pursuant to the provisions below. The duration of each such Interest Period shall be (a) in the case of a Base Rate Advance which is a Swing Line Advance other than an Unrefunded Swing Line Advance, five Business Days, and in the case of all other Base Rate Advances, 1, 2, 3 or 6 months, (b) in the case of a Eurodollar Rate Advance, 1, 2, 3 or 6 months, and (c) in the case of a Fixed Rate Advance, any period of not fewer than seven and not more than 360 days, in each case as the applicable Borrower may select pursuant to notice given in accordance with Section 2.01(c), 2.02(a), 2.02(b) or 2.19, as the case may be; PROVIDED, HOWEVER, that:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) the duration of any Interest Period for an Auction Bid Advance or a Swing Line Advance which commences before the Termination Date and would otherwise end after the Termination Date shall end on the Termination Date;

(ii) the duration of the Interest Period for any Advance which commences before the Maturity Date and would otherwise end after the Maturity Date shall end on the Maturity Date;

(iii) Interest Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration; and

(iv) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, PROVIDED, in the case of any Interest Period for a Eurodollar Rate Advance, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day.

"LENDER AFFILIATE" means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

"LENDERS" means the Banks listed on Schedule 2.01 hereof and each Eligible Assignee that shall become a party hereto pursuant to Section 8.07(a), (b) and (c).

"LIEN" means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement.

"MAJORITY LENDERS" means at any time Lenders having Commitments representing at least 51% of the aggregate Commitments (or the aggregate Advances, if the Commitments have been terminated) or, for purposes of actions taken to accelerate Advances under Article VI, Lenders holding Advances representing at least 51% of the aggregate principal amount of the Advances outstanding.

"MARGIN" means, as to any Eurodollar Auction Bid Advance, the margin (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) to be added to or subtracted from the Eurodollar Rate in order to determine the interest rate applicable to such Auction Bid Advance, as specified in the Auction Bid relating thereto.

"MATURITY DATE" means, subject to the terms of Section 2.18, May 24, 2003.

"MOODY'S" means Moody's Investors Service, Inc.

"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in Section 4001(a)(3) of ERISA, to which a Borrower or any of its ERISA Affiliates is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions, such plan being maintained pursuant to one or more collective bargaining agreements.

"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a Borrower or any of its ERISA Affiliates and at least one Person other than such Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which such Borrower or any of its ERISA Affiliates could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

"NASD" means the National Association of Securities Dealers, Inc., or any other self-regulatory organization which succeeds to the functions of the National Association of Securities Dealers, Inc.

"NET ASSETS" means, with respect to any Person, the excess (if positive) of (i) such Person's consolidated assets over (ii) such Person's consolidated liabilities, each case determined in accordance with GAAP.

"NET CAPITAL RULE" means Rule 15c3-1, adopted by the Commission under the Securities Exchange Act of 1934, as amended from time to time.

"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).

"NOTICE OF SWING LINE BORROWING" has the meaning specified in Section 2.02(b).

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

"OTHER TAXES" has the meaning specified in Section 2.14(b).

"PBGC" means the Pension Benefit Guaranty Corporation or any successor corporation thereto.

"PERSON" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

"PLAN" means a Single Employer Plan or a Multiple Employer Plan subject to Title IV of ERISA.

"PRIME RATE" means the prime commercial lending rate as publicly announced by Chase in New York City to be in effect, from time to time, as Chase's prime rate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.

"PRINCIPAL SUBSIDIARY" means each CSFB Broker-Dealer and each other Subsidiary of CSFB Inc. the Net Assets of which constitute, as of the last day of the most recently ended fiscal quarter of the Borrowers, 5% or more of the consolidated Net Assets of CSFB Inc.

"REGISTER" has the meaning specified in Section 8.07(d).

"REVOLVING CREDIT ADVANCE" means an Advance by a Lender to a

"REVOLVING CREDIT BORROWING" means a Borrowing consisting of simultaneous Revolving Credit Advances made by the Lenders to a Borrower pursuant to Section 2.01(a).

"S&P" means Standard and Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.

"SIMILAR CREDIT AGREEMENT" has the meaning specified in Section 8.09.

"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a Borrower or any of its ERISA Affiliates and no Person other than such

Borrower or any of its ERISA Affiliates or (ii) was so maintained and in respect of which such Borrower or any of its ERISA Affiliates could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

"SIPA" means the Securities Investor Protection Act of 1970, as amended from time to time.

"SIPC" means the Securities Investor Protection Corporation or any successor thereto.

"SUBSIDIARY" means with respect to any Person (including a Borrower), any Person that is accounted for as a consolidated subsidiary of such Person in accordance with generally accepted accounting principles.

"SWING LINE ADVANCE" has the meaning specified in Section 2.01(b).

"SWING LINE BANK" means each financial institution having a Swingline Commitment in Schedule 2.01; PROVIDED, however, that with the agreement of the Borrowers, any other Lender may become a Swing Line Bank after the date hereof pursuant to a notification given to the Administrative Agent by such Lender and the Borrowers which sets forth such Lender's Swing Line Commitment (which shall not in any event exceed such Lender's Commitment hereunder).

"SWING LINE BORROWING" means a Borrowing consisting of Swing Line Advances.

"SWING LINE COMMITMENT" means the commitment of a Swing Line Bank to make Swing Line Advances, as set forth opposite such Swing Line Bank's name on Schedule 2.01 hereof or, in the case of a Lender becoming a Swing Line Bank after the date hereof, as notified to the Administrative Agent by such Lender and the Borrowers.

"TERMINATION DATE" means the earlier of (i) subject to the terms of Section 2.18, May 24, 2002, and (ii) the date of termination in whole of the Commitments pursuant to Section 2.05.

"TYPE" means, with respect to any Advance, a Base Rate Advance, a Eurodollar Rate Advance or a Fixed Rate Advance.

"UNREFUNDED SWING LINE ADVANCES" has the meaning specified in

"WITHDRAWAL LIABILITY" shall have the meaning given such term under Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the computation of periods 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".

SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles applicable to the entity in respect of which such term is used.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. THE ADVANCES. (a) REVOLVING CREDIT ADVANCES. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make one or more Revolving Credit Advances (such advances, together with (i) the Swing Line Advances and (ii) to the extent any Lender elects to make them, Auction Bid Advances as provided in subsection (c) of this Section 2.01, being the "Advances") to the Borrowers from time to time on any Business Day during the period from the date hereof to but excluding the Termination Date (or, if earlier with respect to either Borrower, the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI) in an aggregate principal amount not to exceed at any time outstanding the amount set opposite such Lender's name on Schedule 2.01 hereof or, if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d), as such amount may be reduced pursuant to Section 2.05 (such Lender's "Commitment"); PROVIDED, HOWEVER, that (A) the Facility Usage shall not at any time exceed the Facility at such time, (B) the deemed use of the aggregate amount of the Commitments resulting from outstanding Auction Bid Advances and Swing Line Advances shall be applied to all the Lenders ratably according to their respective Commitments and (C) each Revolving Credit Advance shall be made as part of a Borrowing consisting of Revolving Credit Advances made by the Lenders ratably in accordance with their Commitments. Each Revolving Credit Borrowing shall be in an aggregate amount not less than $25,000,000 and in an integral multiple of $5,000,000. Within the limits of the foregoing and of each Lender's Commitment, each Borrower may, from time to time prior to the earlier of the Termination Date and the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI, borrow under this Section 2.01(a), repay pursuant to Section 2.06, prepay pursuant to Section 2.10 and reborrow under this Section 2.01(a).

(b) THE SWING LINE ADVANCES. (i) Each Swing Line Bank severally agrees, on the terms and subject to the conditions hereinafter set forth, to make one or more Base Rate Advances (such advances made pursuant to this Section 2.01(b) being the "Swing Line Advances") to the Borrowers from time to time on any Business Day during the period from the date hereof to but excluding the Termination Date (or, if earlier with respect to either Borrower, the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI) in an aggregate amount at any time outstanding not in excess of the amount of such Swing Line Bank's Swing Line Commitment at such time; PROVIDED, HOWEVER, that immediately after giving effect to each such Swing Line Advance, the Facility Usage shall not exceed the Facility; PROVIDED FURTHER, HOWEVER, that (A) each

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Swing Line Advance shall be deemed to utilize the Commitment of each Lender by such Lender's pro rata portion (based on the Commitments of the Lenders) of the amount of such Swing Line Advance; (B) the aggregate amount of Swing Line Advances of each Swing Line Bank at any time outstanding, when added to the aggregate amount of Revolving Credit Advances of such Swing Line Bank then outstanding, may not exceed the Commitment of such Swing Line Bank; (C) each Swing Line Borrowing

13 shall be in an amount of at least $25,000,000 and shall be in an integral multiple of $5,000,000; and (D) each Swing Line Advance shall mature and be repaid on the fifth Business Day after the date of such Swing Line Borrowing. In no event may Swing Line Advances be borrowed hereunder if (x) the Administrative Agent shall have received notice from the Majority Lenders specifying that a Default or Event of Default shall have occurred and be continuing, (y) such Default or Event of Default shall not have been subsequently cured or waived and (z) any other applicable condition precedent set forth in Article III has not been fulfilled or waived in accordance with the terms thereof. All Swing Line Advances shall at all times be Base Rate Advances and may not be converted to Advances of a different type. Swing Line Advances shall be made by the Swing Line Banks pro rata in accordance with the relative amounts of their Swing Line Commitments which, after giving effect to the foregoing provisions of this Section 2.01(b)(i), are available for the making of Swing Line Advances. Within the limits and subject to the conditions of the foregoing, each Borrower may, prior to the earlier of the Termination Date and the date on which the obligations of the Lenders to make Advances to such Borrower are terminated pursuant to Article VI, borrow under this Section 2.01(b), repay pursuant to Section 2.06(b) or prepay pursuant to Section 2.10 and reborrow under this Section 2.01(b).

(ii) Notwithstanding the occurrence of any Default or Event of Default or noncompliance with the conditions precedent set forth in Article III or the minimum borrowing amounts specified in Section 2.01, if any Swing Line Advances shall remain outstanding at 10:00 a.m., New York City time, on the fourth Business Day following the borrowing date thereof and if by such time on such fourth Business Day the Administrative Agent shall have received neither (i) a notice of borrowing delivered by the applicable Borrower pursuant to Section 2.02 requesting that Revolving Credit Advances be made pursuant to Section 2.01(a) on the immediately succeeding Business Day in an amount at least equal to the aggregate principal amount of such Swing Line Advances nor (ii) any other notice satisfactory to the Administrative Agent indicating the applicable Borrower's intent to repay all such Swing Line Advances on or before the immediately succeeding Business Day with funds obtained from other sources, the Administrative Agent shall be deemed to have received a notice from such Borrower pursuant to Section 2.02 requesting that a Revolving Credit Borrowing of Base Rate Advances be made pursuant to Section 2.01(a) on such immediately succeeding Business Day in an amount equal to the aggregate amount of such Swing Line Advances, and the procedures set forth in Section 2.02 shall be followed in making such Base Rate Advances, provided that the proceeds of such Base Rate Advances received by the Administrative Agent shall be immediately delivered to the Swing Line Banks and applied to the direct repayment of such Swing Line Advances. Effective on the day such Base Rate Advances are made, the portion of the Swing Line Advances so paid shall no longer be outstanding as Swing Line Advances and shall be outstanding as Revolving Credit Advances of the Lenders. On the day such Revolving Credit Borrowing is made, each Swing Line Bank's proportionate share of such Revolving Credit Advances shall be deemed to be funded from its Swing Line Advances being refunded. Each Borrower authorizes the Administrative Agent and each of the Swing Line Banks to charge such Borrower's accounts with the Administrative Agent or such Swing Line Bank (up to the amount available in each such account) in order to immediately pay the amount of such Swing Line Advances to the extent amounts received from the Lenders are not sufficient to repay in full such Swing Line Advances. If any portion of any such amount

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document paid (or deemed paid) to a Swing Line Bank should be recovered by or on behalf of such Borrower from such Swing Line Bank in the event of the bankruptcy or reorganization of such Borrower or otherwise, the loss of the amount so recovered

14 shall be ratably shared among all the Lenders in the manner contemplated by Section 2.15.

(iii) If, for any reason (including without limitation, the occurrence of an event described in Section 6.01(e)), Base Rate Advances may not be, or are not, made pursuant to subparagraph (b)(ii) of this Section to repay Swing Line Advances as required by such subparagraph, effective on the date such Base Rate Advances would otherwise have been made, each Lender severally, unconditionally and irrevocably agrees that it shall, without regard to the occurrence of any Default or Event of Default, purchase a participating interest in such Swing Line Advances ("Unrefunded Swing Line Advances") in an amount equal to the amount of Base Rate Advances which would otherwise have been made by such Lender pursuant to subparagraph (b)(ii) of this Section. Each Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amount of its participation, and the proceeds of such participation shall be distributed by the Administrative Agent to the Swing Line Banks, pro rata in accordance with the amount of their Swing Line Advances, to such extent as will reduce the amount of the participating interest retained by each such Swing Line Bank in its Swing Line Advances to the amount of the Base Rate Advances which were to have been made by each such Swing Line Bank pursuant to subparagraph (b)(ii) of this Section. Each Lender purchasing a participating interest in Swing Line Advances under this Section 2.01(b)(iii) shall have the same rights as a Lender under this Agreement. In the event any Lender fails to make available to a Swing Line Bank the amount of such Lender's participation as provided in this subparagraph (b)(iii), such Swing Line Bank shall be entitled to recover such amount on demand from such Lender together with interest at the customary rate set by the Swing Line Bank for correction of errors among banks for one Business Day and thereafter at the Base Rate then in effect.

(iv) Each Lender's obligation to make Revolving Credit Advances pursuant to subparagraph (b)(ii) of this Section and to purchase participating interests pursuant to subparagraph (b)(iii) of this Section shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or either Borrower may have against a Swing Line Bank, a Borrower, or any other Person, as the case may be, for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default; (iii) any adverse change in the condition (financial or otherwise) of either Borrower or any of its Subsidiaries; (iv) any breach of this Agreement by either Borrower or any Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

(c) THE AUCTION BID ADVANCES. (i) In order to request Auction Bid Borrowings, a Borrower shall hand deliver or telecopy to the Administrative Agent a duly completed Auction Bid Request substantially in the form of Exhibit A-1 hereto, to be received by the Administrative Agent (i) in the case of a Eurodollar Rate Borrowing, not later than 10:00 a.m., New York City time, four Business Days before a proposed Auction Bid Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one Business Day before a proposed Auction Bid Borrowing. No Base Rate Advance shall be requested in, or made pursuant to, an Auction Bid Request. An Auction Bid Request that does not conform substantially to the format of Exhibit A-1 may be rejected in the Administrative Agent's sole discretion, and the Administrative Agent shall promptly notify the applicable Borrower of such rejection by telecopier. Such request shall in each case refer to this Agreement and specify (x) whether the Borrowing then being requested is to be a Eurodollar Borrowing

Borrowing (which shall be a Business Day occurring on or prior to the Termination Date) and the aggregate principal amount thereof which shall be in a minimum principal amount of $25,000,000 and in an integral multiple of $5,000,000, and (z) the Interest Period with respect thereto. Promptly after its receipt of an Auction Bid Request that is not rejected as aforesaid, the Administrative Agent shall invite by telecopier (in the form set forth in Exhibit A-2 hereto) the Lenders to bid, on the terms and conditions of this Agreement, to make Auction Bid Advances pursuant to the Auction Bid Request. A Borrower may request Auction Bids for up to three separate Interest Periods in a single Auction Bid Request, provided that the aggregate principal amount of each Borrowing requested shall be in a minimum principal amount of $25,000,000 and in an integral multiple of $5,000,000.

(ii) Each Lender may, in its sole discretion, make one or more Auction Bids to the applicable Borrower responsive to an Auction Bid Request. Each Auction Bid by a Lender must be received by the Administrative Agent via telecopier, in the form of Exhibit A-3 hereto, (A) in the case of a Eurodollar Rate Auction Bid Borrowing, not later than 9:30 a.m., New York City time, three Business Days before a proposed Auction Bid Borrowing and (B) in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the day of a proposed Auction Bid Borrowing. Multiple bids with respect to each Interest Period specified in the related Auction Bid Request will be accepted by the Administrative Agent. Auction Bids that do not conform substantially to the format of Exhibit A-3 may be rejected by the Administrative Agent after conferring with, and upon the instruction of, the applicable Borrower, and the Administrative Agent shall notify the Lender making such nonconforming bid of such rejection as soon as practicable. Each Auction Bid shall refer to this Agreement and specify (x) the principal amount (which shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000, and which may equal the entire principal amount of the Auction Bid Borrowing requested by the applicable Borrower) of the Auction Bid Advance or Advances with respect to an Interest Period that the applicable Lender is willing to make to the applicable Borrower, (y) the Auction Bid Rate or Rates at which such Lender is prepared to make the Auction Bid Advance or Advances and (z) the Interest Period and the last day thereof. If a Lender submits an Auction Bid containing offers to make Auction Bid Advances for different Interest Periods, then such Lender may specify the maximum aggregate principal amount of Auction Bid Advances (which shall not be less than $5,000,000 and which shall be an integral multiple of $1,000,000) that such Lender is willing to make in response to the related Auction Bid Request, and the applicable Borrower may not accept offers from such Lender for Auction Bid Advances in an aggregate principal amount that exceeds such specified maximum aggregate principal amount. An Auction Bid submitted by a Lender pursuant to this subparagraph (ii) shall be irrevocable unless rejected by the applicable Borrower.

(iii) The Administrative Agent shall, by 10:00 a.m., New York City time, on the day specified in subparagraph (ii) above by which Auction Bids must be received, notify the applicable Borrower by telecopier of all the Auction Bids made, the Auction Bid Rate and the principal amount of each Auction Bid Advance in respect of which an Auction Bid was made and the identity of the Lender that made each bid. The Administrative Agent shall send a copy of all Auction Bids to the applicable Borrower for its records as soon as practicable after completion of the bidding process set forth in this Section 2.01(c).

(iv) The applicable Borrower may in its sole and absolute discretion, subject only to the provisions of this subparagraph (iv) and Section 2.01, accept or reject any Auction Bid referred to in subparagraph (iii) above; PROVIDED, HOWEVER,

16 that, immediately after giving effect to any such acceptance, the Facility Usage shall not exceed the Facility. The applicable Borrower shall notify the Administrative Agent by telephone, confirmed by telecopier in the form of an Auction Bid Accept Letter substantially in the form of Exhibit A-4, whether and to what extent it has decided to accept any of or all the bids referred to in subparagraph (iii) above, (A) in the case of a Eurodollar Auction Bid Advance, not later than 10:30 a.m. New York City time, three Business Days before a proposed Auction Bid Borrowing, and (B) in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the day of a proposed Auction Bid Borrowing; PROVIDED, HOWEVER, that (A) the failure by the applicable Borrower to give such notice shall be deemed to be a rejection of all the bids referred to in subparagraph (iii) above, (B) any bid referred to in subparagraph (iii) above which is not specified in such notice as being accepted by the applicable Borrower shall (subject to clause (C) below) be deemed rejected, (C) subject to the next following sentence, the applicable Borrower shall not accept a bid for a particular Interest Period made at a particular Auction Bid Rate if such Borrower has decided to reject a bid for such Interest Period made at a lower Auction Bid Rate, (D) if the applicable Borrower shall accept a bid or bids for a particular Interest Period made at a particular Auction Bid Rate but the amount of such bid or bids plus the amount of bids accepted at lower Auction Bid Rates exceeds the aggregate principal amount specified for such Interest Period in the Auction Bid Request, then such Borrower shall be deemed to have accepted a portion of such bid or bids in an amount equal to the aggregate principal amount specified for such Interest Period in the Auction Bid Request less the amount of all other Auction Bids at a lower Auction Bid Rate accepted with respect to such Interest Period, which acceptance, in the case of multiple bids at such Auction Bid Rate, shall be made pro rata in accordance with the amount of each such bid at such Auction Bid Rate, (E) Auction Bids shall not be accepted for Auction Bid Advances in an amount in excess of the amount specified in the relevant Auction Bid Request, and (F) except pursuant to clause (D) above, no bid shall be accepted for an Auction Bid Advance unless such Auction Bid Advance is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; PROVIDED FURTHER, HOWEVER, that if an Auction Bid Advance must be in an amount less than $5,000,000 because of the provisions of clause (D) above, such Auction Bid Advance may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple bids at a particular Auction Bid Rate pursuant to clause (D), the amounts shall be rounded to integral multiples of $1,000,000 in a manner which shall be in the discretion of the applicable Borrower. If a Lender submits an Auction Bid for multiple Interest Periods specifying a maximum aggregate principal amount of Auction Bid Advances that such Lender is willing to make in respect of an Auction Bid Request and the applicable Borrower accepts Auction Bids from such Lender for more than one Interest Period, then such Borrower shall instruct the Administrative Agent how to apportion such Borrower's acceptances among such bids for different Interest Periods to the extent, if any, necessary to provide for acceptance of bids for such maximum specified amount of Auction Bid Advances, but no more than such maximum amount. A notice given by the applicable Borrower pursuant to this subparagraph (iv) shall be irrevocable.

(v) The Administrative Agent shall, by telecopy, promptly notify each bidding Lender whether or not its Auction Bid has been accepted (and if so, for which Interest Period or Interest Periods and in what amount and at what Auction Bid Rate for each such Interest Period), and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Auction Bid Advance in respect of which its bid has been accepted.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (vi) An Auction Bid Request shall not be made within five Business Days after the date of any previous Auction Bid Request.

(vii) If the Administrative Agent shall elect to submit an Auction Bid in its capacity as a Lender, it shall submit such bid directly to the applicable Borrower one quarter of an hour earlier than the latest time at which the other Lenders are required to submit their bids to the Administrative Agent pursuant to subparagraph (ii) above.

(viii) All Notices required by this Section 2.01(c) shall be given in accordance with Section 8.02. Notwithstanding any other provision of this Agreement, neither Borrower shall request, and no Lender shall make, any Auction Bid Advance having a borrowing date after the seventh day prior to the Termination Date.

SECTION 2.02. REVOLVING CREDIT AND SWING LINE BORROWING PROCEDURES. (a) Each Revolving Credit Borrowing shall be made on notice (a "Notice of Borrowing"), given not later than 10:00 a.m. (New York City time) on (i) if such Advances are Eurodollar Rate Advances, the third Business Day prior to the date of the proposed Borrowing or (ii) if such Advances are Base Rate Advances, one Business Day prior to the date of the proposed Borrowing. Such Notice of Borrowing shall be in substantially the form of Exhibit B-1 or in such other form as the Administrative Agent and the applicable Borrower may agree upon, and shall in each case specify which Borrower is requesting such Borrowing and the requested (A) date of the proposed Borrowing, (B) Type of Advances comprising the proposed Borrowing, (C) amount of the proposed Borrowing, (D) Interest Period for the proposed Borrowing and (E) additional information set forth in Exhibit B-1, as the case may be. If the proposed Borrowing is comprised of Eurodollar Rate Advances, the Administrative Agent shall promptly contact Chase to determine the applicable Eurodollar Rate, which Chase shall promptly provide. Promptly after receipt of such Eurodollar Rate from Chase, the Administrative Agent shall notify the applicable Borrower and each Appropriate Lender of the applicable interest rate under Section 2.07. No Auction Bid Advance and no Fixed Rate Advance shall be requested or made pursuant to a Notice of Borrowing. The Administrative Agent shall promptly advise the Lenders of any notice given pursuant to this 2.02(a) and of each Lender's portion of the requested Borrowing.

(b) Each Swing Line Borrowing shall be made on notice, given not later than 12:00 noon (New York City time) on the date of the proposed Swing Line Borrowing, by the applicable Borrower to the Administrative Agent, which shall give each Swing Line Bank prompt notice thereof and of its portion of the requested Swing Line Borrowing. Each such notice of a Swing Line Borrowing (the "Notice of Swing Line Borrowing") shall be in the form of Exhibit B-2 or in such other form as the Administrative Agent and the applicable Borrower may agree upon, and shall be given by telephone, telex or telecopier and, if by telephone, shall be confirmed immediately in writing (which may be by telecopier) and shall specify therein the requested date (which shall be a Business Day) and amount of such Swing Line Borrowing. Each Swing Line Bank shall, not later than 3:00 p.m., New York City time, on the requested borrowing date, make its portion of the requested Swing Line Borrowing available to the Administrative Agent by wire transfer of immediately available funds to the Administrative Agent. After the Administrative Agent's receipt of such funds and upon fulfillment of the conditions set forth in Article III, the Administrative Agent will make such funds available to the applicable Borrower at the Administrative Agent's aforesaid address, or, if a Borrowing shall not occur on

18 such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Swing Line Banks.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on the applicable Borrower.

SECTION 2.03. GENERAL PROVISIONS RELATING TO ADVANCES. (a) If (i) the Administrative Agent shall, at least one Business Day before the date of any requested Borrowing comprised of Eurodollar Rate Advances, determine that dollar deposits in the principal amounts of the Eurodollar Rate Advances comprising such Borrowing are not generally available in the London interbank market or that reasonable means do not exist for determining the Eurodollar Rate or (ii) if the Majority Lenders shall, at least one Business Day before the date of any requested Borrowing comprised of Eurodollar Rate Advances, notify the Administrative Agent that the Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not adequately reflect the cost to such Majority Lenders of making or funding their respective Eurodollar Rate Advances for such Borrowing, then, in each case, the Administrative Agent shall give prompt notice thereof to the Borrowers and the right of the Borrowers to select Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrowers and the Lenders that the circumstances giving rise to such suspension no longer exist, and each Advance comprising any such Borrowing shall be a Base Rate Advance.

(b) In the case of any Borrowing to be comprised of Eurodollar Rate Advances or Fixed Rate Advances, the applicable Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the proposed date of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to minimize the amount of any loss of anticipated profits payable by the applicable Borrower to such Lender pursuant to the immediately preceding sentence.

(c) Subject to Section 2.18 and, in the case of Swing Line Advances, Sections 2.01(b) and 2.02(b), each Lender shall make each Advance to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not later than 11:00 a.m., New York City time (or 2:00 p.m., New York City time, in the case of a Base Rate Advance), and the Administrative Agent shall promptly credit the amounts so received to the general deposit account of the applicable Borrower with the Administrative Agent or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders. Auction Bid Rate Advances shall be made by the Lender or Lenders whose Auction Bids therefor are accepted pursuant to Section 2.01(c) in the amounts so accepted and Revolving Credit Advances shall be made by the Lenders pro rata in accordance with Section 2.01(a).

(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Revolving Credit Borrowing that such Lender will not make available to the Administrative Agent such Lender's ratable portion of such

Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Administrative Agent, such Lender and the applicable Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of such Borrower, the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Agreement.

(e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.04. FEES. (a) The Borrowers agree, jointly and severally, to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of such Lender's Commitment from time to time in effect (whether used or unused) from and including the date hereof in the case of each Bank and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender, to but excluding the date on which such Commitment terminates. Accrued facility fees shall be payable in arrears on the last Business Day of March, June, September and December of each year, commencing June 30, 2001, on any date on which the obligations of the Lenders to make Advances to a Borrower are terminated pursuant to Article VI and on the Termination Date.

(b) The Borrowers agree, jointly and severally, to pay to the Administrative Agent for its own account such fees as may from time to time be agreed between the Administrative Agent and the Borrowers.

(c) For each day prior to and including the Termination Date on which the aggregate amount of Facility Usage exceeds 50% of the aggregate amount of the Commitments, each Borrower agrees to pay to the Administrative Agent for the account of each Lender a utilization fee on the unpaid principal amount of each Advance owed by it to such Lender at a rate per annum equal to the Applicable Rate in effect for such day. Accrued utilization fees shall be payable in arrears on the last Business Day of March, June, September and December of each year, commencing June 30, 2001, on any date on which the Advances become due and payable pursuant to Article VI and on the Termination Date.

SECTION 2.05. TERMINATION OR REDUCTION OF THE FACILITY. (a) The Commitments and the Swing Line Commitments shall be automatically terminated on the Termination Date.

(b) The Borrowers shall have the right at any time prior to the Termination Date, upon at least three Business Days' notice to the Administrative

Agent, to terminate in whole or reduce ratably in part the unused portion of the Facility (such unused portion being determined by subtracting the Facility Usage from the Facility); PROVIDED, HOWEVER, that each partial reduction shall be in an amount not less than $25,000,000 or an integral multiple of $5,000,000 in excess thereof; PROVIDED FURTHER, HOWEVER, that the Commitments shall not in any event be reduced to an amount less than the Swing Line Commitments. Each notice delivered by the Borrowers pursuant to this Section 2.05(b) shall be irrevocable; PROVIDED that a notice of termination of the Commitments delivered by the Borrowers may state that such

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrowers (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.

(c) Each reduction in the aggregate Commitments hereunder shall be made ratably among the Lenders in accordance with their respective Commitments. The Borrowers agree, jointly and severally, to pay to the Administrative Agent for the account of the Lenders, on the date of each termination or reduction, the facility fees on the amount of the Commitments so terminated or reduced accrued to the date of such termination or reduction. Each reduction in the aggregate Swing Line Commitments hereunder shall be made ratably among the Swing Line Banks in accordance with their respective Swing Line Commitments.

(d) Upon at least three Business Days' irrevocable notice to the Administrative Agent, the Borrowers may at any time prior to the Termination Date in whole permanently terminate, or from time to time in part permanently reduce, the Swing Line Commitments; PROVIDED, HOWEVER, that (i) any outstanding Swing Line Advances that would exceed the reduced or terminated Swing Line Commitments must be prepaid in accordance with Section 2.10(b) and (ii) each partial reduction of the Swing Line Commitments shall be in an integral multiple of $5,000,000.

(e) Upon at least three Business Days' irrevocable notice to the Administrative Agent, each Borrower may at any time prior to the Termination Date in whole permanently terminate such Borrower's rights to borrow under this Agreement; PROVIDED, HOWEVER, that any outstanding Advances made to such Borrower, all accrued and unpaid interest thereon and all other amounts owed by such Borrower hereunder (including indemnities with respect to any payments in connection with such termination) shall be paid in full on or before the effective date of any such termination in accordance with the terms hereof.

SECTION 2.06. REPAYMENT OF ADVANCES. (a) REVOLVING CREDIT ADVANCES. The principal amount of each Revolving Credit Advance made to either Borrower shall become due and payable, and such Borrower agrees to pay the outstanding principal balance of each such Advance, on the Maturity Date.

(b) SWING LINE ADVANCES. Each Borrower shall repay the outstanding principal amount of any Swing Line Advance made to it on the earlier of (i) the date that is five Business Days after the date on which such Swing Line Advance was made and (ii) the Termination Date.

(c) AUCTION BID ADVANCES. Each Borrower shall repay the aggregate principal amount of each Auction Bid Advance made to it on the earlier of (i) the last day of the Interest Period applicable to such Auction Bid Advance and (ii) the Termination Date.

(d) Each Lender and each Swing Line Bank shall, and is hereby authorized by each Borrower to, maintain in accordance with its usual practice records evidencing the indebtedness of such Borrower to such Lender hereunder from time to time, including the amounts and Types of and Interest Periods applicable to the Advances made by such Lender from time to time and the amounts of principal and interest paid to such Lender from time to time in respect of such Advances.

(e) The entries made in the records maintained pursuant to paragraph (d) of this Section 2.06 and in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) shall be PRIMA FACIE evidence of the existence and amounts of the obligations of each Borrower to which such entries relate; PROVIDED, HOWEVER, that the failure of any Lender, any Swing

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Line Bank or the Administrative Agent to maintain or to make any entry in such records or the Register, as applicable, or any error therein, shall not in any manner affect the obligations of such Borrower to repay the Advances in accordance with the terms of this Agreement.

SECTION 2.07. INTEREST. (a) ORDINARY INTEREST. Each Borrower shall pay interest on the unpaid principal amount of each Advance owed by it to each Lender from the date of such Advance until such principal amount shall become due and payable, at the following rates per annum:

(i) BASE RATE ADVANCES. If such Advance is a Base Rate Advance (including a Swing Line Advance), a rate per annum for any day during the applicable Interest Period equal to the Base Rate in effect from time to time during such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of six months, on the day which occurs during such Interest Period three months from the first day of such Interest Period.

(ii) EURODOLLAR RATE ADVANCES. If such Advance is a Eurodollar Rate Advance, a rate per annum for any day during the applicable Interest Period equal to the sum of (A) the Eurodollar Rate determined by Chase to be in effect for the Interest Period applicable to such Eurodollar Rate Advance plus (B) in the case of each Eurodollar Revolving Credit Advance, the Applicable Rate in effect from time to time during such Interest Period, and, in the case of each Eurodollar Auction Bid Advance, the Margin (which may be negative) applicable to such Advance, in each case payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of six months, on the day which occurs during such Interest Period three months from the first day of such Interest Period.

(iii) FIXED RATE ADVANCES. If such Advance is a Fixed Rate Advance, a rate per annum equal to the Fixed Rate applicable to such Advance, payable in arrears on the last day of the Interest Period applicable to such Fixed Rate Advance and, if such Interest Period has a duration of more than 90 days, on each day which occurs during such Interest Period every 90 days from the first day of such Interest Period.

(b) DEFAULT INTEREST. Each Borrower shall pay interest on the unpaid principal amount of each Advance made to it that is not paid when due and, to the extent permitted by law, on the unpaid amount of all interest, fees and other amounts payable hereunder by it that is not paid when due, payable on demand, at a rate per annum equal at all times to (i) in the case of any amount of principal, the greater of

(A) 2% per annum above the rate per annum required to be paid on such Advance immediately prior to the date on which such amount became due and (B) 2% per annum above the Base Rate in effect from time to time and (ii) in the case of all other amounts, 2% per annum above the Base Rate in effect from time to time.

SECTION 2.08. ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES. The applicable Borrower shall pay to each Lender, so long as such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance. Such additional interest shall be determined by such Lender and notified to the applicable Borrower through the Administrative Agent.

SECTION 2.09. INTEREST RATE DETERMINATION. The Administrative Agent shall give prompt notice to the applicable Borrower and the Appropriate Lenders of the applicable Eurodollar Rate determined by Chase hereunder in respect of each Interest Period for Eurodollar Rate Advances. The failure of the Administrative Agent to give notice to the applicable Borrower pursuant to this Section 2.09 shall not relieve such Borrower from its obligation to pay any interest in accordance with the terms of this Agreement.

SECTION 2.10. PREPAYMENTS. (a) The Borrowers shall have no right to prepay (i) any principal amount of any Revolving Credit Advances other than as provided in subsection (b) below or (ii) any Auction Bid Advances.

(b) Each Borrower may, upon irrevocable notice given to the Administrative Agent not later than 10:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed prepayment in the case of a Eurodollar Rate Advance, and on the first Business Day prior to the date of the proposed prepayment in the case of Base Rate Advances and Swing Line Advances, stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given such Borrower shall, prepay the outstanding principal amounts of the Advances made to it comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; PROVIDED, HOWEVER, that (x) each partial prepayment shall be in an aggregate principal amount not less than $25,000,000 or an integral multiple of $5,000,000 in excess thereof and (y) in the case of any such prepayment of a Eurodollar Rate Advance, such Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c). Any prepayment of Advances after the Termination Date shall be permanent, and no portion of Advances prepaid after the Termination Date may be re-borrowed hereunder.

SECTION 2.11. INCREASED COSTS. (a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements, in the case of Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall

23 be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances or Fixed Rate Advances, then the applicable Borrower, in the case of outstanding Advances, and each Borrower, jointly and severally, in all other cases, agrees from time to time, upon demand by such Lender (with a copy of such demand to the Administrative Agent), to pay to the Administrative Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; PROVIDED, HOWEVER, that, before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate as to the amount of such increased cost, submitted to the applicable Borrower or the Borrowers, as the case may be, and the Administrative Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.

(b) If any Lender determines that the adoption after the date

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document hereof of any applicable law, rule, regulation or guideline regarding minimum capital, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof (whether or not having the force of law) or compliance by any Lender with any such adoption or change has the effect of reducing the rate of return on capital for such Lender or any corporation controlling such Lender as a consequence of its Commitment or Swing Line Commitment to lend hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance, then from time to time, upon demand by such Lender, the Borrowers agree, jointly and severally, to pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.

SECTION 2.12. ILLEGALITY. Notwithstanding any other provision of this Agreement, if any Lender shall in good faith determine that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, such Lender shall so notify the Borrowers and the Administrative Agent. Before giving any such notice to the Borrowers pursuant to this Section, such Lender shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office if such designation will avoid the need for giving such notice and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender. Upon receipt of such notice, (i) each then outstanding Eurodollar Rate Advance of such Lender shall automatically convert to a Base Rate Advance and shall be maintained as a Base Rate Advance through the last day of the Interest Period applicable thereto, (ii) such Lender shall not submit an Auction Bid in response to a request for Eurodollar Auction Bid Advances, and (iii) the obligation of such Lender to make Eurodollar Rate Advances shall be suspended until such Lender shall notify the Borrowers and the Administrative Agent that the circumstances causing such suspension no longer exist. Without limiting the Borrowers' rights under Section 2.16, if at any time after such Lender gives notice of a determination as provided above in this Section 2.12, a Borrower notifies the Administrative Agent that it wishes to make a Borrowing consisting of Eurodollar Rate Advances (or if at the time of such notice, a Borrower has previously notified the Administrative Agent of such a Borrowing, but such Borrowing has not yet been

24 made), such notification of Borrowing shall be deemed to request that such Lender (and only such Lender) make an Advance in the form of a Base Rate Advance for the Interest Period corresponding to the Interest Period applicable to the Eurodollar Rate Advances to be made by the other Lenders.

SECTION 2.13. PAYMENTS AND COMPUTATIONS. (a) Each Borrower shall make each payment hereunder not later than 11:00 a.m. (New York City time) on the day when due in U.S. dollars to the Administrative Agent at its address referred to in Section 8.02 in same day funds. Except as required under Section 2.12, each Revolving Credit Borrowing, each payment or prepayment of principal of any Revolving Credit Borrowing, each payment of the facility fees, each reduction of the Commitments and each conversion or continuation of any Revolving Credit Borrowing with a Revolving Credit Borrowing of any Type, shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Revolving Credit Advances). Each payment of principal of any Auction Bid Borrowing shall be allocated pro rata among the Lenders participating in such Borrowing in accordance with the respective principal amounts of their outstanding Auction Bid Advances comprising such Borrowing. Each payment of interest on any Auction Bid Borrowing shall be allocated pro rata among the Lenders participating in such Borrowing in accordance with the respective amounts of accrued and unpaid

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document interest on their outstanding Auction Bid Advances comprising such Borrowing. For purposes of determining the available Commitments of the Lenders at any time, each outstanding Auction Bid Borrowing and each outstanding Swing Line Borrowing shall be deemed to have utilized the Commitments of the Lenders (including those Lenders which shall not have made Swing Line Advances or shall not have made Advances as part of such Auction Bid Borrowing) pro rata in accordance with such respective Commitments; provided, HOWEVER, that the Commitments so deemed to be utilized shall in any event be available for the purpose of refinancing such Borrowing or such Swing Line Borrowing, as the case may be. Each Lender agrees that in computing such Lender's portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender's percentage of such Borrowing to the next higher or lower whole dollar amount. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(d), from and after the effective date specified in such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) All computations of interest pursuant to Section 2.07 and of fees payable hereunder shall be made by the Administrative Agent, and all computations of interest pursuant to Section 2.08, shall be made by a Lender, on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable; PROVIDED, HOWEVER, that all computations of interest based on the Base Rate when the Base Rate is determined by reference to paragraph (a) of the definition thereof shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as applicable, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent (or, in the case of Section 2.08, by a Lender) of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(d) Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due to the Lenders hereunder that such Borrower will not make such payment in full, the Administrative Agent may assume that such Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that a Borrower shall not have so made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

SECTION 2.14. TAXES. (a) Any and all payments by a Borrower hereunder shall be made, in accordance with Section 2.13, free and clear of and without deduction for any and all present or future taxes, levies, imposts,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document deductions, charges or withholdings, and all liabilities with respect thereto, EXCLUDING, in the case of each Lender and the Administrative Agent, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If a Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Borrowers agree, jointly and severally, to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, enforcement or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes").

(c) Without duplication with respect to any amounts paid pursuant to Section 2.14(a) or (b), to the extent attributable to an Advance made to a Borrower, such Borrower will, and in each other case, the Borrowers will, on a joint and several basis, indemnify each Lender, each Swing Line Bank and the Administrative Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this

Section 2.14) paid by such Lender, such Swing Line Bank or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Lender, such Swing Line Bank or the Administrative Agent (as the case may be) makes written demand therefor.

(d) Within 30 days after the date of any payment of Taxes, the applicable Borrower will furnish to the Administrative Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing payment thereof. If any payment hereunder is to be made by a Borrower through an account or branch outside the United States or on behalf of a Borrower by a payor that is not a United States person and if no taxes are payable with respect to such payment, such Borrower will, upon the request of the Majority Lenders, furnish, or will cause the payor to furnish, to the Administrative Agent, at such address, a certificate from each appropriate taxing authority, or an opinion of counsel acceptable to the Administrative Agent, in either case stating that such payment is exempt from or not subject to Taxes. For purposes of this subsection (d) and subsection (e), the terms "United States" and "United States person" shall have the meanings specified in Section 7701 of the Internal Revenue Code of 1986, as amended.

(e) Each Lender that is organized under the laws of any jurisdiction other than the United States of America or any political subdivision thereof (a "Non-U.S. Lender") shall deliver to the Borrowers and the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Administrative Agent (i) two copies of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI or (ii) in the case of a Non-U.S. Lender claiming exemption from Federal withholding tax under Section 871(h) or 881(c) of the United States Internal Revenue Code (the "Code") with respect to payments of "portfolio interest", a Form W-8BEN or any successor form accompanied by a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a ten percent shareholder of either Borrower within the meaning of 871(h)(3)(B) of the Code and is not a controlled foreign corporation related to either Borrower within the meaning of Section 864(d)(4) of the Code. Such forms shall be properly executed and delivered to the Borrowers on or before the date upon which such Non-U.S. Lender becomes a party to this Agreement (or, in the case of a Non-U.S. Lender that is an assignee or participant, on or before the date of assignment or transfer) or, in the event that such Non-U.S. Lender changes its applicable lending office, the date such new lending office is designated. In addition, each Non-U.S. Lender shall deliver successor forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender.

(f) For any period with respect to which a Lender has failed to provide a Borrower with the appropriate form described in Section 2.14(e) (OTHER THAN if such failure is due to a change in law occurring subsequent to the date on which a form originally was required to be provided, or if such form otherwise is not required under the first sentence of subsection (e) above), such Lender shall not be entitled to indemnification under Section 2.14(c) with respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that, should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the applicable Borrower shall take such steps (at the expense of such Lender) as such Lender shall reasonably request to assist such Lender to recover such Taxes.

(g) Subject to compliance with Section 8.07, in the event that a Lender that originally provided such form as may be required under Section 2.14(e) thereafter

27 ceases to qualify for complete exemption from United States withholding tax, such Lender may assign its interest under this Agreement to any assignee and such assignee shall be entitled to the same benefits under this Section 2.14 as the assignor provided that (i) the rate of United States withholding tax applicable to such assignee shall not exceed the rate then applicable to the assignor and (ii) in the reasonable judgment of such Lender, such assignment will not subject such Lender to any unreimbursed cost or be otherwise disadvantageous to such Lender.

(h) Any Lender claiming any additional amounts payable pursuant to this Section 2.14 shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Eurodollar Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

(i) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 2.14 shall survive the payment in full of principal and interest hereunder.

SECTION 2.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Credit Advances made by it (other than pursuant to Section 2.03(b), 2.08, 2.11, 2.14, 2.16 or 2.18) to either Borrower in excess of its ratable share of payments on account of the Revolving Credit Advances to such Borrower obtained by all the Lenders, such

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Lender shall forthwith purchase from the other Lenders such participations in the Revolving Credit Advances to such Borrower made 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 Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such 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 or payable by the purchasing Lender in respect of the total amount so recovered. The foregoing provisions shall apply equally to payments obtained in respect of Unrefunded Swing Line Advance participations held by the Lenders pursuant to Section 2.01(b)(iii), with the same effect as if each reference in the immediately preceding sentence to "Revolving Credit Advances" of a Borrower were a reference to participations in Unrefunded Swing Line Advances of such Borrower. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation.

SECTION 2.16. SUBSTITUTION OF LENDERS. If (i) any Lender shall request payment by a Borrower of any amounts payable by such Borrower pursuant to Section 2.11 or 2.14 and at such time additional amounts payable by a Borrower to such Lender pursuant to Section 2.11 or 2.14 shall continue to accrue or (ii) any Lender's obligation to make Eurodollar Rate Advances shall be suspended pursuant to Section 2.12, then, in each case, the Borrowers may demand that such Lender assign its rights and obligations hereunder to one or more Eligible Assignees selected by the Borrowers in accordance with Section 8.07; PROVIDED, HOWEVER, that no Lender shall

28 be obligated to make any such assignment as a result of a demand by the Borrowers unless and until such Lender shall have received one or more payments from the Borrowers or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest and accrued fees thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement.

SECTION 2.17. USE OF PROCEEDS. The proceeds of the Advances shall be available (and each Borrower agrees that it shall use such proceeds) for general corporate purposes outside of Switzerland.

SECTION 2.18. EXTENSION OF TERMINATION DATE AND MATURITY DATE. (a) The Borrowers may, by delivery to the Administrative Agent of a written request of extension (a "Request of Extension") in substantially the form of Exhibit C, given no earlier than 45 days and no later than 30 days prior to May 24, 2002 (the "First Extension Date") and, if the Termination Date shall have been extended pursuant hereto on the First Extension Date, May 23, 2003 (the "Second Extension Date"; and together with the First Extension Date, each an "Extension Date"), respectively, request that each Lender agree to extend the Termination Date applicable to its Commitment by, in the case of the First Extension Date, 364 days and, in the case of the Second Extension Date, an additional 364 days. Each Lender shall respond by returning a completed Request of Extension to the Administrative Agent no earlier than 30 days and no later than 15 days prior to the Extension Date identified in such Request of Extension, and the Administrative Agent shall promptly but in no event later than such 10th day prior to such Extension Date, notify the Borrowers as to each Lender's response. A failure on the part of any Lender to return a completed Request of Extension hereunder shall be deemed a rejection by such Lender of such Request of Extension. If on the 10th day prior to the Extension Date

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document identified in such Request of Extension, the Majority Lenders (determined as of such 10th day) shall have agreed to such extension, then the Termination Date shall, on such Extension Date, become the date which is 364 days from such Extension Date and the Maturity Date shall become the date which is one year after such new Termination Date, in each case as to each Lender which agreed to such extension; PROVIDED, HOWEVER, that such extension of the Termination Date and the Maturity Date shall not become effective as to any Lender which did not agree to such extension. If on such 10th day the Majority Lenders (determined as of such 10th day) shall not have agreed to such extension, such extension shall not become effective as to any Lender.

(b) If on the 10th day referred to above, the Majority Lenders (determined as of such 10th day) have approved such extension, but any Lender has notified the Administrative Agent that such Lender does not agree to an extension requested by a Request of Extension, the Borrowers may demand such Lender to assign, pursuant to Section 8.07, all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances owing it) to an Eligible Assignee, with such assignment to be consummated before the 5th day prior to such Extension Date identified in such Request of Extension; PROVIDED, HOWEVER, that no Lender shall be obligated to make any such assignment as a result of a demand by the Borrowers unless and until such Lender shall have received one or more payments from the applicable Borrowers or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest and accrued fees thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement.

SECTION 2.19. CONVERSION AND CONTINUATION OF REVOLVING CREDIT BORROWINGS. Each Borrower shall have the right at any time upon prior irrevocable notice to the Administrative Agent (i) not later than 11:00 a.m., New York City time, one Business Day prior to conversion, to convert any Revolving Credit Borrowing of such Borrower into a Borrowing consisting of Base Rate Advances and (ii) not later than 11:00 a.m., New York City time, three Business Days prior to conversion or continuation, to convert any Revolving Credit Borrowing of such Borrower into a Borrowing consisting of Eurodollar Rate Advances or to continue any Borrowing consisting of Eurodollar Rate Advances to such Borrower for an additional Interest Period, subject in each case to the following:

(a) each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Advances comprising the converted or continued Borrowing;

(b) less than all the outstanding principal amount of any Borrowing may be converted or continued, but in such case the aggregate principal amount of such Borrowing converted or continued shall be an integral multiple of $5,000,000 and not less than $25,000,000;

(c) accrued interest on an Advance (or portion thereof) being converted shall be paid by the applicable Borrower at the time of conversion;

(d) if any Borrowing consisting of Eurodollar Rate Advances is converted at a time other than the end of the Interest Period applicable thereto, the applicable Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to Section 8.04(c) as a result of such conversion;

(e) any portion of a Borrowing maturing or required to be repaid in less than one month or 30 days, respectively, may not be converted into or continued as a Borrowing consisting of Eurodollar

(f) any portion of a Borrowing consisting of Eurodollar Rate Advances which cannot be continued as such by reason of clause (e) above shall be automatically converted at the end of the Interest Period in effect for such Borrowing into a Revolving Credit Borrowing consisting of Base Rate Advances;

(g) no Interest Period may be selected for any Borrowing that would end later than the Maturity Date; and

(h) at any time when there shall have occurred and be continuing any Default or Event of Default, no Borrowing may be converted into or continued as a Eurodollar Rate Advance.

Each notice pursuant to this Section 2.19 shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Revolving Credit Borrowing that the applicable Borrower requests to be converted or continued, (ii) the Type of Advances into which such Borrowing is to be converted to or continued, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (iv) if such Borrowing is to be converted to or continued as a Borrowing consisting of Eurodollar Rate Advances, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Borrowing consisting of Eurodollar Rate

Advances, the applicable Borrower shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall advise the other Lenders of any notice given pursuant to this Section 2.19 and of each Lender's portion of any converted or continued Borrowing. If the applicable Borrower shall not have given notice in accordance with this Section to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into a new Interest Period as a Base Rate Borrowing.

ARTICLE III

CONDITIONS OF LENDING

SECTION 3.01. CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective as of May 25, 2001, when, and only when, before 3:00 p.m. May 25, 2001, (x) the Existing Credit Agreements shall have been terminated and all indebtedness and other monetary obligations thereunder shall have been repaid in full by the borrowers thereunder and (y) the Administrative Agent shall have received (i) counterparts of this Agreement executed by the Borrowers, the Administrative Agent and each Lender, (ii) counterparts of the Guarantee executed by the Guarantor and the Administrative Agent and (iii) all of the following documents, each document (unless otherwise indicated) being dated the date of receipt thereof by the Administrative Agent (which date shall be the same for all such documents except as otherwise approved by the Administrative Agent), in form and substance satisfactory to the Administrative Agent:

(a) Certified copies of the resolutions of the Board of Directors of each Borrower approving or authorizing approval of the execution, delivery and performance of this Agreement and of all documents evidencing other necessary corporate action and governmental and regulatory approvals, if any, with respect to this Agreement.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) A certificate of the Secretary or an Assistant Secretary of each Borrower certifying the names and true signatures of the officers of such Borrower authorized to sign this Agreement and the other documents to be delivered hereunder.

(c) a certificate or certificates of an appropriate officer of the jurisdiction of organization of each Borrower, dated as of a date reasonably near the Effective Date, attaching the certificate of incorporation or other constitutive documents of such Borrower and each amendment thereto on file in his office and certifying that (i) such certificate of incorporation or other constitutive documents are true and complete copies thereof, (ii) such amendments (if any) are the only amendments to such certificate of incorporation or other constitutive documents on file in his office, (iii) such Borrower has paid all franchise taxes to the date of such certificate and (iv) such Borrower is duly incorporated and in good standing under the laws of such jurisdiction; and

(d) A favorable opinion of each of Cleary, Gottlieb, Steen & Hamilton, Joseph T. McLaughlin, Esq., General Counsel of the Borrowers, and Niederer Kraft & Frey, counsel for the Guarantor, substantially in the

form of Exhibit D-1, D-2, and D-3, respectively, and as to such other matters as any Lender and any Swing Line Bank through the Administrative Agent may reasonably request.

(e)(i) Certified copies of the resolutions of the Board of Directors of the Guarantor approving or authorizing approval of the execution, delivery and performance of the Guarantee and of all documents evidencing other necessary corporate action and governmental and regulatory approvals, if any, with respect to the Guarantee.

(ii) A certificate of the Secretary, an Assistant Secretary, a Director or another officer of the Guarantor certifying the names of the officers of the Guarantor authorized to sign the Guarantee and the other documents to be delivered thereunder.

(iii) A certificate from the jurisdiction of domicile of the Guarantor as to registration and incorporation of the Guarantor, dated as of a date reasonably near the Effective Date, and a certified copy of the By-Laws of the Guarantor as presently in force and on file in such jurisdiction.

SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING. The obligation of each Lender to make an Advance on the occasion of each Borrowing (including the initial Borrowing) and the obligation of the Swing Line Banks to make Swing Line Advances hereunder shall be subject to the further conditions precedent that on the date of such Borrowing: (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the applicable Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by such Borrower that on the date of such Borrowing such statements (other than any such statements with respect to representations and warranties made by the other Borrower) are true):

(i) The representations and warranties contained in Article III of the Guarantee (excluding that set forth in the last sentence of Section 3.05 thereof) and contained in Article IV hereof (excluding that contained in Section 4.01(l)) are correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) No Default has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom; and

(b) the Administrative Agent shall have received such other approvals, opinions or documents as the Majority Lenders through the Administrative Agent may reasonably request. During the term of this Agreement (whether or not any Advances are outstanding hereunder), each Lender shall use reasonable efforts to promptly notify the Borrowers of any approvals, opinions or documents which such Lender may thereafter request pursuant to this clause (b) of Section 3.02.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each Borrower represents and warrants as follows:

(a) Such Borrower and each of its Principal Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation (or, if not a corporation, the jurisdiction of its organization), (ii) has all corporate power (or, in the case of any such Principal Subsidiary which is not a corporation, has all necessary power) to own its property and carry on its business as now being conducted and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except to the extent that failure to so qualify (or be so licensed or registered) does not and is not reasonably likely to have a material adverse effect on the consolidated financial condition or operations of the Guarantor and its Subsidiaries.

(b) The execution, delivery and performance by such Borrower of this Agreement are within such Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not (i) contravene such Borrower's charter or by-laws, (ii) violate any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any agreement to which such Borrower or any of its Principal Subsidiaries is a party or which is binding on such Borrower's or any of its Principal Subsidiaries' properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of such Borrower or any of its Principal Subsidiaries.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Borrower of this Agreement.

(d) This Agreement is a legal, valid and binding obligation of such Borrower enforceable against such Borrower in accordance with its terms.

(e) There is no pending or threatened action or proceeding affecting such Borrower or any Principal Subsidiary of such Borrower before any court, governmental agency or arbitrator, (i) which has or is likely to have a material adverse effect on the consolidated financial condition or business of the Guarantor and its Subsidiaries or (ii) which purports to affect the legality, validity or

(f) Neither such Borrower nor the Guarantor is an "investment company", as such term is defined in the Investment Company Act of 1940, as amended.

(g) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan of such Borrower or any of its ERISA Affiliates that has resulted in or is reasonably likely to result in liability of such Borrower or any of its ERISA Affiliates exceeding $30,000,000.

(h) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan of such Borrower or any of its ERISA Affiliates at the time of such filing, copies of which have been filed with the Internal Revenue Service and furnished to the Banks, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status except any change that has been previously disclosed in writing to the Banks.

(i) Neither such Borrower nor any of its ERISA Affiliates has incurred or is reasonably expected to incur any Withdrawal Liability exceeding $30,000,000 to any Multiemployer Plan.

(j) Neither such Borrower nor any of its ERISA Affiliates has been notified by the sponsor of a Multiemployer Plan of such Borrower or any of its ERISA Affiliates that such Multiemployer Plan is in reorganization or has been terminated with a resulting Withdrawal Liability exceeding $30,000,000, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA, with a resulting Withdrawal Liability exceeding $30,000,000.

(k) No part of the proceeds of any Advance will be used in such a manner as to result in a violation of Section 7 of the Securities Exchange Act of 1934 or any of the margin regulations of the Board of Governors of the Federal Reserve System promulgated thereunder, including, without limitation, Regulations U, T and X thereunder.

(l) No material adverse change in the financial position or business of the Guarantor or the Guarantor and its Subsidiaries, on a consolidated basis, has occurred since December 31, 2000.

(m) Each CSFB Broker-Dealer is a registered broker-dealer in each jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so register except to the extent that failure to so register does not and is not reasonably likely to have a material adverse effect on the financial condition or operations of such CSFB Broker-Dealer or the consolidated financial condition or operations of Credit Suisse Group and its Subsidiaries. Each CSFB Broker-Dealer is a member organization in good standing of the NYSE and the NASD and is duly registered as a broker-dealer with the Commission.

(n) The Part I FOCUS Reports of each CSFB Broker-Dealer for the quarter most recently ended, and for the month ended March 31, 2001, each prepared in accordance with NYSE and Commission rules and regulations and generated from the same information used by such CSFB Broker-Dealer to prepare the Part II FOCUS Report filed with the NYSE or Commission for each such period, copies of which are to be furnished to each Bank, are correct in all material respects.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (o) Each CSFB Broker-Dealer is engaged, directly or indirectly, in the business of investment banking.

ARTICLE V

COVENANTS OF THE BORROWERS

SECTION 5.01. AFFIRMATIVE COVENANTS. So long as the principal of or interest on any Advance shall remain unpaid or any Lender shall have any Commitment hereunder, each Borrower will, unless the Majority Lenders shall otherwise consent in writing:

(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each Principal Subsidiary owned by it to comply, with all applicable laws (including, without limitation, any applicable federal or state securities laws, any applicable provisions of ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rules, regulations and orders, except when the failure to so comply is not reasonably likely to have a material adverse effect on the consolidated financial condition or operations of the Guarantor and its Subsidiaries or, in the case of any such failure by a Principal Subsidiary, on the financial condition or operations of such Principal Subsidiary.

(b) MAINTENANCE OF EXISTENCE. Preserve and maintain, and cause each Principal Subsidiary owned by it to preserve and maintain, its corporate existence in good standing and qualify and remain qualified to do business as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it therein or the conduct of its business is such that failure to qualify or be licensed has or would be reasonably likely to have a material adverse effect on the consolidated financial condition or operations of the Guarantor and its Subsidiaries; PROVIDED, HOWEVER, that the foregoing shall not prohibit any merger, consolidation or liquidation permitted by Sections 5.01(f), 5.02(b) and 5.02(i).

(c) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each Principal Subsidiary owned by it to pay and discharge, before the same shall become delinquent, all taxes, assessments and governmental charges or levies imposed upon it or upon its property; PROVIDED, HOWEVER, that neither such Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained in accordance with generally accepted accounting principles.

(d) MAINTENANCE OF INSURANCE. Maintain, and cause each Principal Subsidiary owned by it to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Borrower or such Subsidiary operates.

(e) REPORTING REQUIREMENTS. Furnish to the Lenders:

(i) as soon as available and in any event within 90 days after the end of each fiscal year of each Borrower, a copy of the annual audit report for such year for such Borrower and its Subsidiaries, containing consolidated financial statements for such year certified in a manner acceptable to the Majority Lenders by KPMG LLP or other

independent public accountants acceptable to the Majority Lenders, together with (A) a certificate of the chief financial officer or the comptroller or other appropriate officer of such Borrower stating that no Default with respect to such Borrower or the Guarantor has occurred and is continuing or, if such a Default has occurred and is continuing, a statement as to the nature thereof and the action that such Borrower or the Guarantor, as the case may be, has taken and proposes to take with respect thereto and (B) a summary of legal proceedings relating to the Guarantor or any of its Subsidiaries the likely effect of which would be to result in a material adverse change in the financial condition of the Guarantor and its Subsidiaries on a consolidated basis;

(ii) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of each of the Borrowers and each CSFB Broker-Dealer, consolidated balance sheets of each Borrower and its Subsidiaries and each CSFB Broker-Dealer and its Subsidiaries as of the end of such quarter and consolidated statements of income and cash flows of each Borrower and its Subsidiaries and each CSFB Broker-Dealer and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer or the comptroller or other appropriate officer of each Borrower and each CSFB Broker-Dealer, respectively, together with (A) a certificate of said officer stating that no Default with respect to such Borrower or the Guarantor has occurred and is continuing or, if such a Default has occurred and is continuing, a statement as to the nature thereof and the action that such Borrower or the Guarantor, as the case may be, has taken and proposes to take with respect thereto and (B) a summary of legal proceedings relating to the Guarantor or any of its Subsidiaries the likely effect of which would be to result in a material adverse change in the financial condition of the Guarantor and its Subsidiaries on a consolidated basis;

(iii) as soon as available and in any event within 90 days after the end of each fiscal year of each CSFB Broker-Dealer, a copy of the annual audit report for such year for such CSFB Broker-Dealer and its Subsidiaries, containing consolidated financial statements for such year certified in a manner acceptable to the Majority Lenders by KPMG LLP or other independent public accountants acceptable to the Majority Lenders, together with a certificate of such accounting firm to the Lenders stating that in the course of the regular audit of the business of such CSFB Broker-Dealer and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default under Section 5.02 or 6.01(n) has occurred and is continuing or, if such accounting firm has obtained knowledge that such a Default has occurred and is continuing, a statement as to the nature thereof;

(iv) promptly after the sending or filing thereof, a copy of any notification given by any CSFB Broker-Dealer to the Commission regarding a net capital deficit or any capital withdrawal made pursuant to the Net Capital Rule;

(v) within two Business Days after any CSFB Broker-Dealer files its Part II FOCUS Report for each month with the NYSE or the Commission, a Part I FOCUS Report for such CSFB Broker-Dealer for such period, prepared in accordance with NYSE and Commission rules and regulations, and generated from the same information used by such CSFB Broker-Dealer to prepare the Part II FOCUS Report filed with the NYSE or the Commission for such period; PROVIDED, HOWEVER, that, notwithstanding the foregoing, a copy of any Part I FOCUS Report for such CSFB Broker-Dealer actually filed with the NYSE or the Commission shall be furnished to the Lenders promptly upon the filing thereof;

(vi) as soon as available and in any event within 90 days after the end of the first six months of each fiscal year of CSFB, consolidated balance sheets of CSFB and its Subsidiaries as of the end of such six month period and consolidated statements of income of CSFB and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such six month period, certified by the chief financial officer or the comptroller or other appropriate officer of CSFB (it being understood that the furnishing of any such certified balance sheets and statements of income by either Borrower shall fulfill this requirement for the relevant period for both Borrowers);

(vii) as soon as available and in any event within 180 days after the end of each fiscal year of CSFB, a copy of the annual audit report for such year for CSFB and its Subsidiaries, containing consolidated financial statements for such year certified in a manner acceptable to the Majority Lenders by KPMG LLP or other independent public accountants acceptable to the Majority Lenders (it being understood that the furnishing of any such certified audit report by either Borrower shall fulfill this requirement for the relevant fiscal year for both Borrowers);

(viii) as soon as available and in any event within 90 days after the end of the first six months of each of Credit Suisse Group's financial years, Credit Suisse Group's consolidated semi-annual report and unaudited accounts, certified in a manner acceptable to the Majority Lenders by the chief financial officer or the comptroller or other appropriate officer of Credit Suisse Group, as at the end of and for such six month period, together with copies of the related directors' reports;

(ix) as soon as available and in any event within 180 days after the end of each of Credit Suisse Group's financial years, Credit Suisse Group's consolidated and unconsolidated annual reports and audited accounts as at the end of and for that financial year, certified in a manner acceptable to the Majority Lenders by independent public accountants acceptable to the Majority Lenders, together with copies of the related directors' and auditors' reports;

(x) as soon as possible and in any event within five days after the occurrence of each Event of Default with respect to such Borrower or the Guarantor and each event which, with the giving of notice or

lapse of time, or both, would constitute an Event of Default with respect to such Borrower or the Guarantor, a statement of the Chief Financial Officer or other appropriate officer of such Borrower setting forth details of such Event of Default or event and the action which such Borrower or the Guarantor, as the case may be, has taken and proposes to take with respect thereto;

(xi) promptly after the sending or filing thereof, (A) copies of all reports which such Borrower or any CSFB Broker-Dealer sends to any holders of its securities registered with the Commission under the Securities Exchange Act of 1934, as amended, and (B) copies of all regular, periodic and special reports, and all registration statements, that such Borrower or any CSFB Broker-Dealer, as applicable, files with the Commission or any governmental agency that may be substituted therefor, or with any national securities exchange in each case with respect to such securities;

(xii) promptly after the filing or receiving thereof, (a) copies of all notices received from the Internal Revenue Service, the Department of Labor or the PBGC by such Borrower or any Subsidiary of such Borrower with respect to an ERISA Event and (b) copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed with the Internal Revenue Service for each Plan of such Borrower and any of its ERISA Affiliates;

(xiii) promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Guarantor or any of its Subsidiaries the likely effect of which would be to result in a material adverse change in the financial condition of the Guarantor and its Subsidiaries, on a consolidated basis;

(xiv) such other information respecting the condition or operations, financial or otherwise, of such Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request;

(xv) (A) at the same time as sent to the Guarantor's shareholders, any circular, document or other written information sent to the Guarantor's shareholders as such (including interim reports if and to the extent that these are prepared and distributed); and

(B) such other information relating to the consolidated financial condition or business of the Guarantor and its Subsidiaries as the Administrative Agent (or any Lender through the Administrative Agent) may from time to time reasonably request, except for such information as is customarily and reasonably regarded by the Guarantor as confidential; and

(xvi) promptly after the announcement thereof by the applicable rating agency, notice of any change in the rating of the Index Debt by S&P or Moody's (or any substitute rating agency).

(f) OWNERSHIP OF PRINCIPAL SUBSIDIARIES. In the case of CSFB Inc., maintain ownership of 100% of (i) the voting common stock of each Principal Subsidiary and (ii) the combined voting power of all capital stock of each Principal Subsidiary entitled to vote in the election of directors; PROVIDED, HOWEVER, that the foregoing shall not prohibit any merger or consolidation of a Principal Subsidiary with or into a Borrower or another Person or any liquidation of a Principal Subsidiary into a Borrower or another Subsidiary of CSFB Inc., so long as the requirements of clauses (i) and (ii) of this sentence are satisfied by CSFB Inc. with respect to the surviving entity in any such merger or consolidation or the Subsidiary receiving such liquidation (in each case if such surviving or receiving entity is not CSFB Inc.). In the case of CSFB (USA), maintain ownership of 100% of (i) the voting common stock of each CSFB Broker-Dealer and (ii) the combined voting power of all capital stock of each CSFB Broker-Dealer entitled to vote in the election of directors; PROVIDED, HOWEVER, that the foregoing shall not prohibit any merger or consolidation of a CSFB Broker-Dealer with or into another Person or any liquidation of a CSFB Broker-Dealer into another Subsidiary of CSFB (USA), so long as the entity surviving such merger or consolidation or receiving such liquidation is a CSFB Broker-Dealer in respect of which the requirements of clauses (i) and (ii) of this sentence are satisfied by CSFB (USA).

SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance shall remain unpaid or any Lender shall have any Commitment hereunder, each Borrower will not, without the written consent of the Majority Lenders:

(a) LIENS, ETC. Create or suffer to exist any Lien, upon or with respect to any of its properties of any character (including, without limitation, the capital stock of the Principal Subsidiaries owned by it) whether now owned or hereafter acquired, or assign any right of such Borrower to receive income to secure or provide for the payment of any Debt of any Person, OTHER THAN any of the following Liens as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (i) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(c) hereof; (ii) Liens imposed by law arising in the ordinary course of business securing obligations that are not overdue for a period of more than 30 days; (iii) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; (iv) Liens incurred in the ordinary course of business.

(b) MERGERS, ETC. Consolidate with or merge into or with, or sell or otherwise dispose of all or substantially all of its assets to, any Person, or acquire all or substantially all of the assets of any Person, unless, in the case of any such proposed consolidation, merger or acquisition of assets, (i) immediately after giving effect to such transaction, (A) no Default would exist and (B) the ratings by S&P and Moody's of the Index Debt would not be less than the ratings by S&P and Moody's of the Index Debt immediately before giving effect to such proposed transaction and (ii) in the case of any proposed merger or consolidation to which such Borrower will be a party (unless such Borrower will be the survivor), the corporation formed by any such consolidation or into which such Borrower shall be merged shall (A) assume such Borrower's obligations hereunder pursuant to an agreement or instrument reasonably satisfactory in form and substance to the Administrative Agent and (B) be a direct or indirect wholly-owned Subsidiary of the Guarantor.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) INTERNATIONAL BANKING ACT OF 1978; BANK HOLDING COMPANY ACT OF 1956. Violate the International Banking Act of 1978, as amended from time to time ("IBA") or the Bank Holding Company Act of 1956, as amended from time to time ("BHCA"), or any order, regulation, interpretation or advice issued or promulgated by, or on behalf of, the Board of Governors of the Federal Reserve System with respect to the applicability of the IBA or the BHCA to such Borrower, its Subsidiaries and its and their respective activities (including, without limitation, any restrictions on such Borrower's ability to, directly or indirectly, acquire the voting stock of a company or engage in investment banking or merchant banking activity) if such violation could reasonably be expected to have a material adverse effect on the financial condition or operations of any CSFB Broker-Dealer or the consolidated financial condition or operations of the Guarantor and its Subsidiaries.

(d) COMPLIANCE WITH ERISA. Permit to exist any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any other event or condition, which presents a material risk of termination by the PBGC of any Plan and the imposition of liability on such Borrower or any of its ERISA Affiliates exceeding $30,000,000.

(e) PREPAYMENTS, ETC. OF SUBORDINATED DEBT. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof, or make any payment in violation of any subordination terms of, any Debt which is subordinated in right of payment to the obligations of such Borrower under this Agreement at any time when (i) an Advance is outstanding hereunder or (ii) any interest, fees or other amounts are due and payable by such Borrower hereunder; PROVIDED, HOWEVER, that such limitation shall not apply to the prepayment, redemption, purchase or defeasance by such Borrower of any subordinated medium-term note or other such subordinated debt if such Borrower immediately reissues subordinated Debt in a principal amount equal to or greater than the amount of such subordinated debt so prepaid, redeemed, purchased or defeased and such reissued subordinated Debt (A) is subordinated in right of payment to the Debt under this Agreement on terms no less favorable to the Lenders than the Debt being so prepaid, redeemed, purchased or defeased and (B) does not mature prior to the stated maturity of, and has an average life equal to or greater than, the Debt being so prepaid, redeemed, purchased or defeased.

(f) LOANS AND ADVANCES. Make any loans, advances or other extensions of credit to Credit Suisse Group or any Subsidiary of Credit Suisse Group; PROVIDED, HOWEVER, that so long as no Event of Default shall have occurred and be continuing (i) such Borrower may make loans, advances or other extensions of credit to any Subsidiary of Credit Suisse Group (other than a Subsidiary of such Borrower) on terms no less favorable to such Borrower than it would obtain in a comparable arm's-length transaction in the ordinary course of business and (ii) such Borrower may make loans, advances or other extensions of credit to any of its Subsidiaries so long as such loans, advances or other extensions of credit bear interest at a rate consistent with reasonable business practices.

(g) DEBT. Create or suffer to exist any Debt other than Debt which ranks PARI PASSU with, or subordinate in right of payment to, the senior indebtedness of such Borrower represented by the Advances.

(h) COMPLIANCE WITH NET CAPITAL RULE. Permit any violation of the Net Capital Rule by any CSFB Broker-Dealer to remain uncured for 5 days after a Borrower obtains knowledge of such violation.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (i) MAINTENANCE OF OWNERSHIP OF THE CSFB BROKER-DEALERS. Sell or otherwise dispose of any shares of common stock of any CSFB Broker-Dealer; PROVIDED, HOWEVER, that a merger between CSFB Broker-Dealers may be effected so long as the surviving entity is a wholly-owned Subsidiary of CSFB (USA) and a registered broker-dealer.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. EVENTS OF DEFAULT. If any of the following events ("Events of Default") shall occur and be continuing:

(a) Either Borrower shall fail to pay any principal of any Advance made to it when the same becomes due and payable, or shall fail to pay any interest on any Advance made to it or any fees payable hereunder within five days after such interest or fees become due and payable; or

(b) Any representation or warranty made by either Borrower herein or by the Guarantor in the Guarantee or by either Borrower or the Guarantor (or any of their officers) in connection with this Agreement or the Guarantee shall prove to have been incorrect in any material respect when made or deemed made; or

(c) Either Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(e)(viii) or 5.02 or the Guarantor shall fail to perform or observe any covenant or agreement contained in Sections 4.02 and 4.03 of the Guarantee; or either Borrower or the Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or the Guarantee on its part to be performed or observed if the failure to perform or observe such other term, covenant or agreement shall remain unremedied for 21 days after written notice thereof shall have been given to the Guarantor or, as the case may be, by the Administrative Agent or any Lender; or

(d) Any one or more of the Guarantor, the Borrowers and the Principal Subsidiaries shall fail to pay any principal of or premium or interest on any Debt which is outstanding in a principal amount of at least $100,000,000 in the aggregate (but excluding Debt represented by the Advances) of the Guarantor, the Borrowers or the Principal Subsidiaries (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt and, in the case of the Principal Subsidiaries (other than CSFB (USA)), such failure shall continue for 10 days after the later of the date the same becomes due and payable and the last day of the applicable grace period, if any; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled

required prepayment), redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or

(e) the Guarantor, any Borrower or any Principal Subsidiary shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Guarantor, any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Borrower or any Principal Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Guarantor, any Borrower or any Principal Subsidiary shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or

(f) Any judgment or order for the payment of money in excess of $100,000,000 or its equivalent in the aggregate shall be rendered against any one or more of the Guarantor, the Borrowers and the Principal Subsidiaries and there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(g) Any non-monetary judgment or order shall be rendered against the Guarantor, any Borrower or any Principal Subsidiary that would be reasonably likely to have a material adverse effect on the Guarantor and its Subsidiaries as a whole, and there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h) Any ERISA Event shall have occurred with respect to a Plan of any Borrower or any of its ERISA Affiliates and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans of any Borrower and its ERISA Affiliates with respect to which an ERISA Event shall have occurred and then exist (or the liability of any Borrower and its ERISA Affiliates related to such ERISA Event) exceeds $30,000,000; or

(i) Any CSFB Broker-Dealer shall cease to be a member organization of the NYSE or the NASD or shall fail to maintain its registration as a broker-dealer with the Commission; PROVIDED, HOWEVER, that a merger between CSFB Broker-Dealers may be effected so long as the surviving entity is in compliance with this Section 6.01(i); or the Commission or the NYSE shall make a decision, enter an order, or take other action with respect to any CSFB Broker-Dealer, which materially adversely affects its business, and such decision, order or other action shall continue unstayed and in effect for a period of 30 days; or

(j) CSFB and its Affiliates shall cease to own beneficially, directly or indirectly, capital stock of CSFB Inc. (or any successor thereof resulting from a transaction permitted by Section 5.02(b)) representing at least 51% of (i) the common stock of CSFB Inc. and (ii) the combined voting power of all capital stock of CSFB Inc. entitled to vote in the election of directors; or

(k) CSFB Inc. shall cease to own beneficially, directly or indirectly, 100% of the voting stock of CSFB (USA) (or any successor thereof resulting from a transaction permitted by Sections 5.01(f),

(l) CSFB (USA) shall cease to own beneficially, directly or indirectly, 100% of the voting stock of each CSFB Broker-Dealer (or any successor thereof resulting from a transaction permitted by Section 5.02(b)); or

(m) The SIPC shall apply for a protective decree with respect to any CSFB Broker-Dealer as provided in the SIPA and such application shall remain undismissed for a period of 30 days;

(n) Any CSFB Broker-Dealer shall fail to maintain net capital equal to at least 5% of its Aggregate Debit Items as required to be shown on any FOCUS Report for such CSFB Broker-Dealer; or

(o) the Guarantee shall for any reason be held by a court of competent jurisdiction not to be, or shall be asserted by either Borrower or the Guarantor not to be, valid in accordance with the terms thereof; then, and in any such event, (x) the Administrative Agent shall at the request, or may with the consent, of the Majority Lenders, by notice to CSFB Inc., in the case of a CSFB Inc. Event of Default, and/or CSFB (USA), in the case of a CSFB (USA) Event of Default, declare the obligation of each Lender to make Revolving Credit Advances to such Borrower and the obligation of each of the Swing Line Banks to make Swing Line Advances to such Borrower to be terminated, whereupon the same shall forthwith terminate, (y) the Administrative Agent shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrowers, declare the Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable (regardless of whether such Event of Default is a CSFB Inc. Event of Default or a CSFB (USA) Event of Default), whereupon the Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrowers, and (z) the obligations of the Lenders to make Advances to any Borrower in respect of which the lending obligations hereunder have not been terminated pursuant to clause (x) above shall be subject to the prior written consent of the Majority Lenders; PROVIDED, HOWEVER, that, in the event of an actual or deemed entry of an order for relief with respect to any Borrower under the Federal Bankruptcy Code or upon the occurrence of an Event of Default described in Section 6.01(e), (A) the obligation of each Lender to make Advances to such Borrower and of each Swing Line Bank to make Swing Line Advances to such Borrower shall automatically be terminated and (B) all the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrowers.

ARTICLE VII

THE ADMINISTRATIVE AGENT

Subject to the further provisions of this Article VII, each of the Lenders and each Swingline Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrowers or their Subsidiaries or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 8.01), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Guarantor, the Borrowers or any of their Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity (other than as Administrative Agent). The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 8.01) or in the absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the applicable Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made by any other Person in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness (other than its own execution) or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing reasonably believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be

44 made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for either Borrower or the Guarantor), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Affiliates. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Affiliates of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Swingline Banks and the Borrowers. Upon any such resignation, the Majority Lenders shall have the right, subject to the approval of the Borrowers (provided no Event of Default exists), to appoint a successor. If no successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Swingline Banks, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 8.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any provision of this Agreement, nor consent to any departure by a Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and each Borrower, 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, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in Section 3.01 or 3.02, (b) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (c) reduce or forgive the principal of, or interest on, the Advances or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Advances or any fees or other amounts payable hereunder, (e) change the definition of "Majority Lenders" or the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances which shall be required for the Lenders, the Swing Line Banks or any of them to take any action hereunder, (f) modify the second, third or fourth sentence of Section 2.13, Section 2.15 or any other provision providing for the equal or ratable treatment of the Lenders or (g) amend this Section 8.01; PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall, unless in writing and signed by (i) the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or (ii) a Swing Line Bank in addition to the Lenders required above to take such action, increase

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such Swing Line Bank's Swing Line Commitment or otherwise affect the rights or obligations of such Swing Line Bank hereunder.

SECTION 8.02. NOTICES, ETC. All notices and other communications provided for hereunder shall be in writing (including telecopier communication) and mailed, telecopied or delivered, to each Borrower at its address at Eleven Madison Avenue, New York, New York 10010, Telecopy No. 212-325-8227, Attention: Corporate Treasurer; if to any Bank, at its Domestic Lending Office specified opposite its name on Schedule 1 hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; and if to the Administrative Agent, at its address at One Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Telecopy No. (212) 552-7490, Attention: Laura A. Rebecca, with a copy to The Chase Manhattan Bank, One Chase Manhattan Plaza, 21st Floor, New York, New York 10081, Telecopy No. 212-552-5142, Attention: Jane Buyers-Russo; or, as to each of the aforementioned parties, at such other address as shall be designated by such party in a written notice to the Borrowers and the Administrative Agent and, in the case of any such notice by a Borrower or the Administrative Agent, to each other party thereto. All such notices and communications shall, when mailed or telecopied be effective when deposited in the mails or telecopied respectively, except that notices and communications to the Administrative Agent pursuant to Article II or VII shall not be effective until received by the Administrative Agent.

SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of any Lender, any Swing Line Bank or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 8.04. COSTS, EXPENSES AND TAXES. (a) The Borrowers agree, jointly and severally, to pay on demand all costs and expenses in connection with the syndication of the credit facilities provided for herein and the preparation, execution, delivery, administration, modification and amendment of this Agreement and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement. The Borrowers further agree, jointly and severally, to pay on demand all costs and expenses, if any (including, without limitation, reasonable fees and expenses of counsel for the Administrative Agent and the Lenders hereunder), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for the Administrative Agent and the Lenders hereunder in connection with the enforcement of rights under this Section 8.04(a).

(b) The Borrowers agree, jointly and severally, to indemnify and hold harmless the Administrative Agent, each Swing Line Bank and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with an Event of Default or with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with this Agreement, including, without limitation, any transaction in which the proceeds of any Borrowing hereunder are or are to be applied, whether or not an Indemnified Party is a party thereto and whether or not the transactions contemplated hereby

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document are consummated, except to the extent any such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct.

(c) If any payment, prepayment or conversion of any Eurodollar Rate Advance or Fixed Rate Advance is made other than on the last day of the Interest Period for such Advance, as a result of a payment pursuant to Section 2.10 or 2.12, a conversion of a Revolving Credit Advance pursuant to Section 2.19, acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other reason, the applicable Borrower shall, upon demand by any Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance. In the event of the failure to borrow, convert, continue or prepay any Revolving Credit Advance on the date specified in any notice delivered pursuant hereto, the failure to borrow any Auction Bid Advance after accepting the Auction Bid to make such Advance or the assignment of any Advance other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrowers pursuant to Section 2.16, 2.18(b) or 8.07(a), then, in any such event, the applicable Borrower shall, upon demand by any Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of such event, including, without limitation, any loss

(including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance. A certificate as to the amount of such losses, costs or expenses submitted to the applicable Borrower and the Administrative Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error.

SECTION 8.05. RIGHT OF SET-OFF. Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01, each Lender and each Swing Line Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to 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 or such Swing Line Bank to or for the credit or the account of the applicable Borrower against any and all of the obligations of such Borrower now or hereafter existing under this Agreement and any Advances held by such Lender or such Swing Line Bank, whether or not such Lender or such Swing Line Bank shall have made any demand under this Agreement and although such obligations may be unmatured. Each Lender and each Swing Line Bank agrees promptly to notify the applicable Borrower after any such set-off and application made by such Lender or such Swing Line Bank; PROVIDED, HOWEVER, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender and each Swing Line Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Lender or such Swing Line Bank may have.

SECTION 8.06. BINDING EFFECT. This Agreement shall become effective in accordance with Section 3.01 and thereafter shall be binding upon and inure to the benefit of the Borrowers, the Administrative Agent, each Swing

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Line Bank and each Lender and their respective successors and assigns, except that the Borrowers shall not have the right to assign their rights hereunder or any interest herein without the prior written consent of the Lenders and the Swing Line Banks.

SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may and, if demanded by the Borrowers (pursuant to Section 2.16 or 2.18(b)) upon at least five Business Days' notice to such Lender and the Administrative Agent, will assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances owing to it); PROVIDED, HOWEVER, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement, (ii) the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 (or $5,000,000, in the case of an assignment to a Lender Affiliate) or the remaining amount of such Lender's Commitment and shall be an integral multiple of $500,000, (iii) each such assignment shall be to a Lender, a Lender Affiliate, a Person described in clause (viii) of the definition of "Eligible Assignee" in Section 1.01 or, with the consent of the Borrowers (such consent not to be unreasonably withheld), any other Eligible Assignee, (iv) each such assignment made as a result of a demand by the Borrowers pursuant to this Section 8.07(a) shall be arranged by the Borrowers after consultation with the Administrative Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such

48 assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Borrowers pursuant to this Section 8.07(a) unless and until such Lender shall have received one or more payments from either the Borrowers or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement and (vi) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (or $1,000, in the case of an assignment to a Lender Affiliate); PROVIDED, HOWEVER, that, if such assignment is made as a result of a demand by the Borrowers pursuant to this Section 8.07(a), the Borrowers shall pay or cause to be paid such fee. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than any such rights which by their terms survive the termination of this Agreement or the payment in full of principal and interest hereunder) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto (other than with respect to any such rights which by their terms survive the termination of this Agreement or the payment in full of principal and interest hereunder)). Notwithstanding the foregoing, any Lender assigning its rights and obligations under this Agreement may retain any Auction Bid Advances made by it, outstanding at such time, and in such case shall retain its rights hereunder in respect of any Advances so retained until such

(b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or the Guarantor or the performance or observance by the Borrowers or the Guarantor of any of their obligations under this Agreement or the Guarantee or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the Guarantee, together with copies of the financial statements referred to in Section 5.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such

49 assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit E hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrowers.

(d) The Administrative Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of each of the Lenders and, with respect to Lenders, the Commitment of, and principal amount of the Advances owing to, each such Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding, absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for the purposes of this Agreement. The Register shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice.

(e) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Advances owing to it); PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitment to the Borrowers hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Advances for all purposes of this Agreement, (iv) the Borrowers, the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Administrative Agent, the Swing Line Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and (v) such Lender shall not sell a participation pursuant to this Section 8.07(e) to any bank or other entity which is not a Lender, a Lender Affiliate or a Person described in clause (viii) of the definition of "Eligible Assignee" in Section 1.01 without the consent of the Borrowers, such consent not to be unreasonably withheld. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such 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, HOWEVER, 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 the first proviso to Section 8.01 that affects such participant. Subject to paragraph (f) of this Section, the Borrowers agree that each participant shall be entitled to the benefits of Sections 2.03(b), 2.11, 2.14 and 8.04(c) 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 8.05 as though it were a Lender, provided such participant agrees to be subject to Section 2.15 as though it were a Lender.

(f) A participant shall not be entitled to receive any greater payment under Section 2.11 or 2.14 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 Borrowers' prior written consent. A participant that is organized under the laws of a jurisdiction outside the United States shall not be entitled to the benefits of Section 2.14 unless the Borrowers are notified of the participation sold to such participant and such participant agrees, for the benefit of the Borrowers, to comply with Section 2.14(e) as though it were a Lender.

(g) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Borrowers furnished to such Lender by or on behalf of the Borrowers; PROVIDED, HOWEVER, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrowers received by it from such Lender on terms substantially the same as those applicable to such Lender under Section 8.08.

(h) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System, and each Borrower will, if requested, issue a note to be pledged to such Federal Reserve Bank evidencing its obligations in respect of principal of and interest on Advances of such Lender hereunder.

(i) Except as expressly provided in this Agreement, the Swing Line Banks may not assign or delegate any of their respective rights and duties hereunder without the prior written consent of the Borrowers and the Administrative Agent.

(j) Prior to any assignment to, or purchase of a participation by, any employee benefit plan or any entity the assets of which would be considered "plan assets" within the meaning of U.S. Department of Labor regulations (29 CFR ss. 2510.3-101, or any successor thereto) (together referred to herein as "employee benefit plans") of any rights and obligations under this Agreement, each such employee benefit plan or other such entity shall represent

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to the Borrowers that the holding of any such assignment or the purchase and holding of any such participation hereunder by such plan or other entity is exempt from the prohibited transaction rules of ERISA and the Internal Revenue Code of 1986, as amended from time to time. This representation shall be made on each date from and including the date of any assignment or purchase of any participation and through the date of disposition thereof.

SECTION 8.08. CONFIDENTIALITY. None of the Administrative Agent or any Lender shall disclose any Confidential Information to any Person without the consent of the Borrowers, other than (a) to the Administrative Agent's or such Lender's Affiliates and its and their officers, directors, employees, agents and advisors and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process and (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking.

SECTION 8.09. PARITY. If at any time hereafter either Borrower shall enter into a Similar Credit Agreement (i) that shall contain a term or condition (not including any such term or condition which would otherwise be subject to this clause (i) but relates to the matters as are covered herein by Section 2.03 or the definition of "Applicable Rate" in Section 1.01) which a reasonable Person would conclude is favorable to a lender and that is not contained in this Agreement or (ii) that shall contain a modification of a term or condition (not including any such term or condition which would otherwise be subject to this clause (ii) but relates to the matters as are covered herein by Section 2.03 or the definition of "Applicable Rate" in Section 1.01) contained herein, which a reasonable Person would conclude is more favorable to a lender than the term or condition as set forth herein, then such Borrower will promptly notify the Administrative Agent and the Lenders of such term or condition (or modification thereof) and, at the request of the Majority Lenders, shall agree to an amendment of this Agreement so that it shall contain such a term or condition or modification, as the case may be, applicable to such Borrower. "Similar Credit Agreement" means a committed senior unsecured bank credit agreement or similar agreement with respect to indebtedness for money borrowed (which shall not be deemed to include letter of credit facilities) (i) which has an initial commitment termination date of 364 days or less, (ii) the proceeds of which may be used by a Borrower for the same purposes the proceeds hereunder are permitted to be used by such Borrower under Section 2.16 and (iii) which contains terms and conditions which, when taken as a whole, have similar or comparable import and effect on the relevant Borrower and its Subsidiaries as the terms and conditions contained in Section 6.01(j).

SECTION 8.10. SURVIVAL. All covenants, agreements, representations and warranties made by the Borrowers and the Principal Subsidiaries herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Advances, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Advance or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.11, 2.12, 2.13 and 8.04 and Article VII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Advances and the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 8.11. GOVERNING LAW. This Agreement shall be governed

SECTION 8.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

SECTION 8.13. CURRENCY INDEMNITY. The sole currency of account and payment for all sums payable by the Borrowers under this Agreement, including in respect of indemnities, costs and damages, is Dollars. Any amount received or recovered in a currency other than Dollars (whether as a result of a judgment or order

52 of a court of any jurisdiction, or the enforcement thereof, in the winding up or dissolution of a Borrower or otherwise) by the Administrative Agent, or any Lender in respect of any sum expressed to be due to it from a Borrower shall only constitute a discharge to such Borrower to the extent of the amount of Dollars that the recipient is able to purchase with the amount so received or recovered in that currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that amount of Dollars is less than the amount of Dollars expressed to be due to the recipient under this Agreement, the applicable Borrower shall indemnify it against any loss sustained by it as a result. In any event, the applicable Borrower shall indemnify the recipient against the cost of making any such purchase. For the purpose of this Agreement, it will be sufficient for any recipient to demonstrate that it would have suffered a loss had an actual purchase been made. These indemnities constitute a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Administrative Agent or any Lender and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Agreement or any other judgment or order.

SECTION 8.14. WAIVER UNDER EXISTING CREDIT AGREEMENTS. The banks who are parties to the Existing Credit Agreements agree that their commitments thereunder and their rights under the Guarantee Agreement (as defined in the Existing Credit Agreement referred to in clause (i) of the definition of such term) shall be deemed terminated upon the effectiveness of this Agreement pursuant to Section 3.01 and hereby waive any prior notice of such termination of their commitments under either of the Existing Credit Agreements.

SECTION 8.15. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE GUARANTEE, THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

SECTION 8.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each of the Borrowers hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan, The City of New York, and any appellate court from any thereof, in any suit, action or proceeding arising out of or relating to this Agreement or any other document delivered hereunder, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, Federal court. Each of the parties hereto agrees

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other document delivered hereunder against any Borrower or any of its Subsidiaries or any of their respective properties in the courts of any jurisdiction.

(b) Each of the Borrowers hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other document delivered hereunder in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8.02. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

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.

CREDIT SUISSE FIRST BOSTON, INC.,

by: /s/ Lewis H. Wirshba ------Name: Lewis H. Wirshba Title: Managing Director and Corporate Treasurer

CREDIT SUISSE FIRST BOSTON (USA), INC.,

by: /s/ Lewis H. Wirshba ------Name: Lewis H. Wirshba Title: Managing Director and Corporate Treasurer

THE CHASE MANHATTAN BANK, in its individual capacity and as Administrative Agent,

by: ------Name: Title:

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.

CREDIT SUISSE FIRST BOSTON, INC.,

by: ------Name: Title:

CREDIT SUISSE FIRST BOSTON (USA), INC.,

by: ------Name: Title:

THE CHASE MANHATTAN BANK, in its individual capacity and as Administrative Agent,

by: /s/ Jane Buyers Russo ------Name: Jane Buyers Russo Title: Managing Director

THE BANK OF NEW YORK,

by: ------Name: Title:

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.

CREDIT SUISSE FIRST BOSTON, INC.,

by: ------Name:

CREDIT SUISSE FIRST BOSTON (USA), INC.,

by: ------Name: Title:

THE CHASE MANHATTAN BANK, in its individual capacity and as Administrative Agent,

by: ------Name: Title:

THE BANK OF NEW YORK,

by: /s/ John Vinci ------Name: John Vinci Title: Vice President

BANK ONE, NA (MAIN OFFICE CHICAGO)

by: /s/ Denise de Diego ------Name: Denise de Diego Title: Director, Capital Markets

CITIBANK, N.A.,

by: ------Name: Title:

DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH,

by: ------Name:

by: ------Name: Title:

BANK ONE, NA (MAIN OFFICE CHICAGO)

by: ------Name: Title:

CITIBANK, N.A.,

by: /s/ Shirley C. Henning ------Name: Shirley C. Henning Title: Vice President

DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH,

by: ------Name: Title:

BANK ONE, NA (MAIN OFFICE CHICAGO)

by: ------Name: Title:

CITIBANK, N.A.,

by: ------Name: Title:

DEUTSCHE BANK AG, NEW YORK

by: /s/ Gayma Z. Shivnarain ------Name: Gayma Z. Shivnarain Title: Director

by: /s/ John S. McGill ------Name: John S. McGill Title: Director

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: IntesaBci New York Branch

by: /s/ J. Dickerhof ------Name: J. Dickerhof Title: Vice President

/s/ Frank Maffei ------Frank Maffei Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Bank of Tokyo-Mitsubishi Trust Company

by: /s/ Jean L. Still ------Name: Jean L. Still Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

by: /s/ Frank Sodano ------Name: Frank Sodano Title: Director

/s/ Richard Ungaro ------Richard Ungaro Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Commerzbank AG, New York and Grand Cayman Branches

by: /s/ Lawrence J. Manochio ------Name: Lawrence J. Manochio Title: Assistant Treasurer

by: /s/ Joseph J. Hayes ------Name: Joseph J. Hayes Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Credit Lyonnais New York Branch

by: /s/ Gina Harth-Cryde ------Name: Gina Harth-Cryde Title: Senior Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Danske Bank A/S

by: /s/ John A. O'Neill ------Name: John A. O'Neill Title: Assistant General Manager

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: HSBC Bank USA

by: /s/ Paul N. Lopez ------Name: Paul N. Lopez Title: FVP

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Lloyds TSB Bank plc

by: /s/ Michael J. Gilligan ------Name: Michael J. Gilligan Title: Director, Financial Institutions, USA G311

LENDER: Lloyds TSB Bank plc

by: /s/ Paul D. Briamonte ------Name: Paul D. Briamonte Title: Director-Project Finance (USA) B374

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

by: /s/ Thomas Caruso ------Name: Thomas Caruso Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Standard Chartered Bank

by: /s/ William Hughes ------Name: William Hughes Title: Senior Vice President

by: /s/ Robert Gilbert ------Name: Robert Gilbert Title: Senior Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Svenska Handelsbanken

by: /s/ Geoffrey Walker ------Name: Geoffrey Walker Title: Senior Vice President

by: /s/ H.N. Bacon ------Name: H.N. Bacon Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

by: /s/ Diane Wilson ------Name: Diane Wilson Title: Head of Corporate & Institutional Relationships

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: National Australia Bank Limited

by: /s/ Michael G. McHugh ------Name: Michael G. McHugh Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Norddeutsche Landesbank Girozentrale, New York and/or Cayman Islands Branch

by: /s/ Georg Peters ------Name: Georg Peters Title: Vice President

by: /s/ Hinrich Holm ------Name: Hinrich Holm Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Royal Bank of Canada

by: /s/ B.F. Heintzman ------

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Banco Santander Central Hispano, S.A.

by: /s/ Jorge Saavedra ------Name: Jorge Saavedra Title: Vice President

by: /s/ Sen Louie ------Name: Sen Louie Title: Assistant Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Bayerische Landesbank Bayerische Landesbank Girozentrale Brienner Strasse 20 80277 Munchen

by: /s/ Peter Walcher ------Name: Peter Walcher Title: First Vice President

by: /s/ Andrea Henkel ------Name: Andrea Henkel Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Landesbank Baden-Wurttemberg London Branch Bucklersbury House, 83 Cannon Street

by: /s/ Jon March ------Name: Jon March Title: Manager

by: /s/ Ulrike Kaes ------Name: Ulrike Kaes Title: Assistant Manager

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Skandinaviska Enskilda Banken AB (publ)

by: /s/ Pedro Ekeroth ------Name: Pedro Ekeroth Title:

by: /s/ Ulf Hellners ------Name: Ulf Hellners Title:

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Wells Fargo Bank, N.A.

by: /s/ Edward J. Meyer, Jr. ------Name: Edward J. Meyer, Jr. Title: Vice President

by: /s/ Michael J. Giese ------Name: Michael J. Giese Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT,

LENDER: WESTDEUTSCHE LANDESBANK GIROZENTRALE through the New York Branch

by: /s/ Lillian T. Lum ------Name: Lillian T. Lum Title: Director

by: /s/ Salvatore Battinelli ------Name: Salvatore Battinelli Title: Managing Director Credit Department

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Banca Di Roma New York Branch

by: /s/ A. Paoli ------Name: A. Paoli Title: Assistant Treasurer

by: /s/ C. Strike ------Name: C. Strike Title: Assistant Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Australia and New Zealand Banking Group Limited

by: /s/ Roy J. Marsden ------Name: Roy J. Marsden Title: Executive Vice President-- Americas

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: BANCA ANTONIANA POPOLARE VENETA, New York Branch

by: /s/ Domenico P. Loschiavo ------Name: Domenico P. Loschiavo Title: Senior Vice President & Deputy Manager

by: /s/ Constantine L. Manzini ------Name: Constantine L. Manzini Title: General Counsel

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Banca Monte dei Paschi di Siena S.p.A.

by: /s/ Giulio Natalicchi ------Name: Giulio Natalicchi Title: Senior Vice President & General Manager

by: /s/ Brian R. Landy ------Name: Brian R. Landy Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: CREDIT INDUSTRIEL ET COMMERCIAL

by: /s/ Eric Dulot ------Name: Eric Dulot Title: Vice President

by: /s/ Dora DeBlasi Hyduk ------Name: Dora DeBlasi Hyduk

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: The Fuji Bank, Limited

by: /s/ Yuji Tanaka ------Name: Yuji Tanaka Title: Vice President & Manager

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH

by: /s/ Debra L. Laskowski ------Name: Debra L. Laskowski Title: Managing Director

by: /s/ Charles J. Sahli ------Name: Charles J. Sahli Title: Associate Director

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Royal Bank of Scotland PLC

by: /s/ Andy Powell ------Name: Andy Powell Title: Senior Relationship Manager

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: Sumitomo Mitsui Banking Corporation

by: /s/ Peter R. C. Knight ------Name: Peter R. C. Knight Title: Senior Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: BBL International (UK) Limited

by: /s/ C.P. Wright ------Name: C.P. Wright Title: Authorized Signatory

by: /s/ G.A. Michael ------Name: G.A. Michael Title: Authorized Signatory

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: The Northern Trust Company

by: /s/ Jaron Grimm ------Name: Jaron Grimm Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

by: /s/ Shinichi Makatani ------Name: Shinichi Makatani Title: Assistant General Manager

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: The Sanwa Bank, Limited

by: /s/ Jean-Michel Fatovic ------Name: Jean-Michel Fatovic Title: Vice President

SIGNATURE PAGE TO THE CREDIT SUISSE FIRST BOSTON, INC. AND CREDIT SUISSE FIRST BOSTON (USA), INC. 364-DAY AUCTION BID ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, DATED AS OF MAY 25, 2001.

LENDER: UNICREDITO ITALIANO-NEW YORK BRANCH

by: /s/ Christopher Eldin ------Name: Christopher Eldin Title: First Vice President & Deputy Manager

by: /s/ Saiyed Abbas ------Name: Saiyed Abbas Title: Vice President

EXHIBIT F

GUARANTEE AGREEMENT (this "AGREEMENT") dated as of May 25, 2001, from CREDIT SUISSE GROUP, a corporation with limited liability organized under the laws of Switzerland (the "GUARANTOR"), in favor of the Beneficiaries (as defined herein).

Reference is made to the U.S. $3,500,000,000 364-Day Auction Bid Advance and Revolving Credit Facility Agreement dated as of May 25, 2001 (as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document amended, supplemented or modified from time to time, the "CREDIT AGREEMENT"), among Credit Suisse First Boston, Inc. ("CSFB INC."), Credit Suisse First Boston (USA), Inc. ("CSFB (USA)" and, together with CSFB Inc., (the "BORROWERS"), the financial institutions party thereto, as lenders (the "Lenders"), The Chase Manhattan Bank, as Administrative Agent (the "AGENT") and The Bank of New York, Bank One, NA (Main Chicago Office), Citibank, N.A. and Deutsche Bank AG, New York Branch and/or Cayman Islands Branch, as Syndication Agents (the "SYNDICATION AGENTS").

The Lenders have agreed to extend credit to the Borrowers pursuant to, and subject to the terms specified in, the Credit Agreement. The obligations of the Lenders to extend credit under the Credit Agreement are conditioned on, among other things, the execution and delivery by the Guarantor of a guarantee agreement in the form hereof. As the indirect or direct owner of 100% of the issued and outstanding voting stock of each of CSFB Inc. and CSFB (USA), the Guarantor derives substantial benefits from the extension of credit to the Borrowers under the Credit Agreement. As consideration therefor and in order to induce the Lenders to extend credit to the Borrowers under the Credit Agreement, the Guarantor is willing to execute and deliver this Agreement. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. TERMS DEFINED IN THE CREDIT AGREEMENT. Capitalized terms used herein and not defined herein shall have the meanings set forth in the Credit Agreement.

SECTION 1.02. DEFINITION OF CERTAIN TERMS USED HEREIN. As used herein, the following terms shall have the following meanings:

"BENEFICIARIES" shall mean the Lenders, the Administrative Agent and their respective successors and assigns.

"BORROWED MONEY" includes any Indebtedness (a) for or in respect of money borrowed or raised (whether or not for cash) by whatever means (including acceptances, deposits and finance leases) or (b) for the deferred purchase price of assets or services (other than goods or services obtained on normal commercial terms in the ordinary course of trading or business).

"CREDIT AGREEMENT" shall have the meaning assigned to such term in the recitals hereto.

"DOLLARS" or "$" shall mean lawful money of the United States of America.

"ENCUMBRANCE" shall mean any mortgage, charge, pledge, lien or other encumbrance securing any obligation of any Person or any other type of preferential arrangement (including, without limitation, title transfer and retention arrangements) having a similar effect:

"INDEBTEDNESS" shall include any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent.

ARTICLE II

GUARANTEE

SECTION 2.01. GUARANTEE. The Guarantor unconditionally and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document irrevocably guarantees, as a primary obligor and not merely as a surety, the due and punctual payment by each Borrower of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable as a claim in such proceeding) on the Advances made to such Borrower, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, of each Borrower to the Lenders or the other Beneficiaries under the Credit Agreement (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable as a claim in such proceeding) (all the foregoing obligations being collectively called the "OBLIGATIONS"). The Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation.

SECTION 2.02. PAYMENT AND PERFORMANCE. If at any time either Borrower fails to make any payment to the Beneficiaries of any or all the Obligations when due (subject to any applicable notice or grace periods) under and in strict accordance with the terms of the Credit Agreement, the Guarantor shall, on or before the Business Day immediately following the date of written demand by the Administrative Agent or any Beneficiary, pay to such Beneficiary or to the Administrative Agent for the benefit of the Beneficiaries any Obligations that such Borrower has failed to pay as aforesaid. Any amounts paid by the Guarantor hereunder in respect of Advances, interest and fees shall be applied in accordance with the terms of the Credit Agreement.

SECTION 2.03. GUARANTEE OF PAYMENT. The Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Lender to any balance of any deposit account or credit on the books of the Administrative Agent or any Lender in favor of either Borrower or any other person.

SECTION 2.04. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The obligations of the Guarantor hereunder shall be absolute and unconditional and shall not be subject to any reduction, limitation, impairment or termination for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be discharged or impaired or otherwise affected by:

(a) the failure of the Administrative Agent or any Beneficiary to assert any claim or demand or to enforce any remedy under the Credit Agreement, any guarantee or any other agreement;

(b) any lack of validity or enforceability of either or both Borrowers' obligations under the Credit Agreement;

(c) any change in time, manner or place of payment of, or in the principal amount, interest rate or any other term of, any of the Obligations, or any other amendment or waiver of, or any consent to or departure from any of the terms of, the Obligations or the Credit Agreement;

(d) any change in ownership or control of either or both Borrowers (it being expressly understood that Obligations incurred after the date of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any such change shall continue to be covered by this Agreement to the extent provided in Section 2.01);

(e) any bankruptcy, insolvency, winding up or reorganization of, or similar proceedings involving, either or both Borrowers; or

(f) any other act, omission or circumstance which might constitute a defense available to either or both Borrowers or might in any manner or to any extent vary the risk of the Guarantor or otherwise operate as a discharge of the Guarantor as a matter of law or equity (other than the indefeasible payment in full of all the Obligations).

SECTION 2.05. AVOIDANCE OF PAYMENTS. The Guarantor further agrees that its guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Obligation is rescinded or must otherwise be restored by the Administrative Agent or any Beneficiary upon the bankruptcy or reorganization of either Borrower or otherwise, all as though such payment had not been made.

SECTION 2.06. INDEPENDENT OBLIGATIONS. The obligations of the Guarantor hereunder are independent of the obligations of either Borrower or of any other Person and a separate action or actions may be brought and prosecuted against the Guarantor whether or not action is brought against either Borrower or any other Person, and whether or not either Borrower or any other Person is joined in such action.

SECTION 2.07. CONTINUING OBLIGATION. This Agreement constitutes a primary obligation of the Guarantor and is a continuing obligation and shall (a) remain in full force and effect in accordance with the terms hereof until the Commitments shall have expired or been terminated and the Lenders shall have received payment in full of all the Obligations and until all possibility for the rescission or return of any payment to the Beneficiaries shall have ended, (b) be binding upon the Guarantor and its successors and assigns and (c) inure to the benefit of and be enforceable by the Beneficiaries and their respective successors and permitted assigns.

SECTION 2.08. WAIVER. Except for notices or demands expressly required hereunder, the Guarantor hereby waives, to the extent permitted by applicable law, (a) acceptance hereof by the Beneficiaries, (b) presentment, demand for performance, protest, promptness, diligence, notice of acceptance, notice of dishonor and any other notice with respect to any of the Obligations, this Agreement or any obligation of the Guarantor hereunder and (c) any other notices or demands of any kind.

SECTION 2.09. SUBROGATION. The Guarantor will not exercise any rights against either Borrower that it may acquire by way of subrogation hereunder, by any payment made hereunder or otherwise, until the Commitments shall have expired or been terminated with respect to such Borrower and the Obligations shall have been paid in full. If any amount shall nevertheless be paid to the Guarantor on account of such subrogation rights at any time prior to the expiration or termination of the Commitments with respect to such Borrower and payment in full of the Obligations and all of the Guarantor's payment obligations contained in this Agreement, such amount shall be held in trust for the benefit of the Beneficiaries and shall forthwith be paid to the Beneficiaries or the Administrative Agent for the benefit of the Beneficiaries and shall be credited and applied toward the Obligations in accordance with the terms hereof and of the Credit Agreement. Subject to the foregoing, nothing contained in this Agreement shall be deemed a waiver of the Guarantor's right of subrogation against either Borrower.

SECTION 2.10. TAXES. (a) Any and all payments by the Guarantor hereunder shall be made free and clear of and without deduction for any and all

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, EXCLUDING, in the case of each Beneficiary, taxes imposed to or measured by its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Beneficiary is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "TAXES"). If the Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Beneficiary, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.10) such Beneficiary receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Guarantor shall make such deductions and (iii) the Guarantor shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Guarantor 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 any payment made hereunder or from the execution, delivery, enforcement or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "OTHER TAXES").

(c) The Guarantor will indemnify each Beneficiary for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.10) paid by such Beneficiary and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Beneficiary makes written demand therefor.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Guarantor represents and warrants to each Beneficiary that:

SECTION 3.01. ORGANIZATION; POWER. The Guarantor (i) is duly organized, validly existing and in good standing utider the laws of Switzerland, (ii) has all corporate power to own its property and carry its business as now being conducted and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except to the extent that failure to so qualify (or be so licensed or registered) does not and is not reasonably likely to have a material adverse effect on the consolidated financial condition or operations of the Guarantor and its Subsidiaries.

SECTION 3.02. AUTHORIZATION. The execution, delivery and performance by the Guarantor of this Agreement are within the Guarantor's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not (i) contravene the Guarantor's constitutive documents, (ii) violate any law, rule, regulation (including, without limitation, any exchange control or similar regulation), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any agreement to which the Guarantor or any of its Subsidiaries is a party or which is binding on the Guarantor's or any of its Subsidiaries' properties or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of the Guarantor or any of its Subsidiaries.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 3.03. GOVERNMENTAL APPROVALS. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Guarantor of this Agreement (including, without limitation, the making of payments hereunder in Dollars, as contemplated hereby).

SECTION 3.04. ENFORCEABILITY. This Agreement is a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms.

SECTION 3.05. FINANCIAL STATEMENTS. The consolidated balance sheets of the Guarantor and its consolidated Subsidiaries as at December 31, 2000, and the related consolidated statements of profit and loss account and source and application of funds of the Guarantor and such Subsidiaries for the fiscal year or six-month period then ended, as applicable, copies of which have been furnished to each Lender, fairly present the financial condition of the Guarantor and such Subsidiaries as at such date and the results of the operations of the Guarantor and such Subsidiaries for the period ended on such date, all in accordance with applicable provisions of Swiss law. During the period from December 31, 2000 to the date of this Agreement there has not occurred any material adverse change in the Guarantor's financial condition or business or in the consolidated financial position or business of it and its Subsidiaries.

SECTION 3.06. LITIGATION. There is no pending or threatened action or proceeding affecting the Guarantor or any Subsidiary of the Guarantor before any court, governmental agency or arbitrator, (a) which has or probably will have a material adverse effect on the consolidated financial condition or business of the Guarantor and its Subsidiaries or (b) which purports to affect the legality, validity or enforceability of this Agreement.

ARTICLE IV

COVENANTS

The Guarantor covenants and agrees with each Beneficiary that so long as this Agreement shall remain in effect and until the Commitments have been terminated and all the Obligations shall have been paid in full, unless the Majority Lenders shall otherwise consent in writing, the Guarantor:

SECTION 4.01. EXISTENCE. (a) Will preserve and maintain its corporate existence, provided that the foregoing will not prohibit the Guarantor from merging or consolidating with or into any other corporation if, (i) immediately after giving effect thereto, no Default would exist and (ii) if the Guarantor is not the surviving corporation, the surviving corporation shall assume the Guarantor's obligations hereunder in an agreement or instrument reasonably satisfactory in form and substance to the Majority Lenders.

SECTION 4.02. STATUS OF GUARANTEE. Will at all times cause its payment obligations under this Agreement to rank at least equally and ratably in all respects with all its other unsecured and unsubordinated indebtedness except for such indebtedness as would, by virtue only of the law in force in its place of incorporation, be preferred ire the event of its winding-up.

SECTION 4.03. LIENS. Will not create or have outstanding any Encumbrance in respect of Borrowed Money on or over its assets, except for:

(a) liens arising solely by operation of law (or by an agreement evidencing the same) in the ordinary course of its business in respect of indebtedness which either (a) has been due for less than 30 days or (b) is being contested in good faith and by appropriate means;

(b) any Encumbrance created on any asset acquired by it after the date of this Agreement for the purpose of financing or refinancing that acquisition and securing a principal, capital or nominal amount not exceeding the cost of that acquisition;

(d) any other Encumbrance created or outstanding on or over assets of the Guarantor provided that the aggregate outstanding principal, capital or nominal amount secured by all Encumbrances created or outstanding under this exception on or over assets of the Guarantor does not at any time exceed U.S.$200,000,000 or its equivalent (for the avoidance of doubt, any Encumbrance on shares owned by and/or shares of the share capital of the Guarantor in connection with the securing of options ("Stillhalteroptionen") shall not be considered for the purposes of this paragraph (d)).

ARTICLE V

MISCELLANEOUS

SECTION 5.01. CURRENCY INDEMNITY. The sole currency of account and payment for all sums payable by the Guarantor under this Agreement, including in respect of indemnities, costs and damages, is Dollars. Any amount received or recovered in a currency other than Dollars (whether as a result of a judgment or order of a court of any jurisdiction, or the enforcement thereof, in the winding up or dissolution of the Guarantor or otherwise) by any Beneficiary in respect of any sum expressed to be due to it from the Guarantor shall only constitute a discharge to the Guarantor to the extent of the amount of Dollars that the recipient is able to purchase with the amount so received or recovered in that currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that amount of Dollars is less than the amount of Dollars expressed to be due to the recipient under this Agreement, the Guarantor shall indemnify it against any loss sustained by it as a result. In any event, the Guarantor shall indemnify the recipient against the cost of making any such purchase. For the purpose of this Guarantee, it will be sufficient for any Beneficiary to demonstrate that it would have suffered a loss had an actual purchase been made. These indemnities constitute a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Beneficiary and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Agreement or the Credit Agreement or any other judgment or order.

SECTION 5.0. SURVIVAL OF AGEEMENT. This Agreement and the terms, covenants and conditions hereof shall be binding upon the Guarantor and its successors

8 and shall inure to the benefit of the Beneficiaries and their respective successors and assigns. The Guarantor shall not be permitted to assign or transfer any of its rights or obligations under this Agreement, except as expressly contemplated by this Agreement or the Credit Agreement.

SECTION 5.03. WAIVERS; AMENDMENT. (a) No failure on the part of any

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Beneficiary to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by any Beneficiary preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder and under the Credit Agreement are cumulative and are not exclusive of any other remedies provided by law. Except as provided in the Credit Agreement, neither the Administrative Agent nor the Lenders shall be deemed to have waived any rights hereunder or under any other agreement or instrument unless such waiver shall be in writing and signed by such parties.

(b) (i) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Guarantor and the Administrative Agent with the prior written consent of the Majority Lenders and (ii) this Agreement shall not be terminated and the Guarantor shall not be released from any of its obligations under Article II of this Agreement without the prior written consent of all of the Lenders.

SECTION 5.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 5.05. NOTICES. All communications and notices hereunder shall be in writing and given as provided in Section 8.02 of the Credit Agreement. All communications and notices hereunder to the Guarantor shall be given to it at:

Credit Suisse Group Paradeplatz 8 Postfach 1 8070, Zurich SWITZERLAND Telecopy No: 41-1-333-2587

SECTION 5.06. JURIDICTION; CONSENT TO SERVICE. The Guarantor irrevocably agrees that any legal suit action or proceeding arising out of or based upon this Agreement and the transactions contemplated hereby may be instituted in any State or Federal court in the Borough of Manhattan, The City of New York (each, a "New York Court"), irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding in any such court and irrevocably submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding. The Guarantor hereby appoints Credit Suisse First Boston Corporation, acting through its offices located at Eleven Madison Avenue, New York, New York 10010 in the Borough of Manhattan, The City of New York and its successors as its authorized agent upon which process may be served in any action arising out of or based on this Agreement which may be instituted in any New York Court by any

Beneficiary. Such appointment shall be irrevocable until all obligations of the Guarantor under this Agreement have been performed. The Guarantor shall take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the authorized agent at the address indicated above, as such address may be changed within the Borough of Manhattan, The City of New York by notice given by the authorized agent to the Guarantor, shall be deemed, in every respect, effective service of process upon the Guarantor. Notwithstanding the foregoing, any action arising out of or based on this Guarantee may be instituted by any Beneficiary in any competent court in Switzerland, and the Guarantor further submits to the jurisdiction of the courts of its own domicile in any such action.

SECTION 5.07. COST AND EXPENSES. The Guarantor agrees to pay on

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document demand all costs and expenses, if any (including, without limitation, reasonable fees and expenses of counsel for any Beneficiary) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, including, without limitation, reasonable fees and expenses of counsel for any Beneficiary in connection with the enforcement of rights under this Section.

SECTION 5.08. WAIVER OF JURY TRIAL. THE GUARANTOR, THE ADMINISTRATIVE AGENT AND THE BENEFICIARIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE GUARANTOR, THE ADMINISTRATIVE AGENT OR THE BENEFICIARIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this Agreement as of the day and year first above written.

CREDIT SUISSE GROUP,

by ------Name: Title:

The foregoing Guarantee Agreement is hereby accepted as of the date first above written.

THE CHASE MANHATTAN BANK, as Administrative Agent on behalf of the Beneficiaries, by

------Name: Title:

LEASE BETWEEN

CREDIT SUISSE FIRST BOSTON (USA), INC.

AND

THE PORT AUTHORITY OF

NEW YORK AND NEW JERSEY

AS OF OCTOBER 30, 2001

LEASE BETWEEN CREDIT SUISSE FIRST BOSTON (USA), INC. AND THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY

AS OF OCTOBER 30, 2001

------

CREDIT SUISSE FIRST BOSTON (USA), INC.

Landlord

THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY

Tenant

------

LEASE

------

TABLE OF CONTENTS

EXHIBITS

A. Description of Land B. Initial Premises Floor Space Plan C. Rules and Regulations D. Overlease E. HVAC Specifications F. Form of Non-Disturbance Agreement G. Overlandlord Consent H. Cleaning Specifications

~~INDEX OF DEFINED TERMS ------~~

~~iii~~

LEASE (this "LEASE"), dated as of October 30, 2001, between CREDIT SUISSE FIRST BOSTON (USA), INC. ("LANDLORD"), a New York corporation whose address is Eleven Madison Avenue, New York, New York 10010-3629 and THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY ("TENANT"), a body corporate and politic, created by compact between the States of New Jersey and New York, with the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document consent of the Congress of the United States of America, whose address is 225 Park Avenue South, New York, New York 10003.

~~W I T N E S S E T H~~

WHEREAS, Landlord is willing to lease to Tenant and Tenant is willing to hire from Landlord, on the terms hereinafter set forth, certain space in the office building commonly known as One Madison Avenue, New York, New York (the "BUILDING") on the land more particularly described in EXHIBIT A (the "LAND"; the Land and the Building and all plazas, sidewalks and curbs adjacent thereto are collectively called the "PROJECT").

~~NOW, THEREFORE, Landlord and Tenant agree as follows:~~

~~ARTICLE 1~~

~~DEFINITIONS~~

~~As used in this Lease, the following terms shall have the following respective meanings:~~

~~(a) "AUDITORIUM" means the auditorium located in the South Building Lobby.~~

~~(b) "CAFETERIA" means the cafeteria located on the B-2 floor of the South Building.~~

~~(c) "HLW Report" means that certain report, dated December 6, 2000 and prepared by HLW and designated as Area Calculations, Project 3785.~~

~~(d) "OVERLANDLORD" means the Metropolitan Life Insurance Company, a New York corporation, or any successor or assign of its interest under the Overlease.~~

(e) OVERLEASE" means that certain Lease by and between Landlord and Overlandlord, dated as of February 22, 2001, as the same may amended, modified or supplemented from time to time. A true and correct copy of the Overlease (with financial terms redacted) is attached hereto as Exhibit D.

~~(f) "SOUTH Building" means the portions of the Building shown on the floor plans included in the HLW Report as "Area Calculations-South Building."~~

~~(g) "TOWER" means the portions of the Building shown on the floor plans included in the HLW Report as "Area Calculations-Tower."~~

~~ARTICLE 2~~

~~PREMISES: TERM: USE~~

SECTION 2.01. DEMISE. (a) Landlord hereby leases to Tenant and Tenant hereby hires from Landlord, subject to the terms and conditions of this Lease, the entire 7th floor of the South Building and the entire 6th floor of the Tower substantially as shown on the plan annexed as EXHIBIT B (collectively, the "INITIAL PREMISES") and the Additional Premises (the Initial Premises and the Additional Premises being collectively, the "PREMISES") together with the non-exclusive right to use and to permit its permitted subtenants, assignees and invitees to use, in common with other tenants and occupants of the Project, the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document lobbies (other than the Tower lobby), loading dock and other public portions and common facilities of the Project subject to, and in accordance with the terms of this Lease, including without limitation the Rules and Regulations. Landlord and Tenant agree that the Initial Premises is conclusively deemed to contain 98,348 rentable square feet. The amount of rentable square feet in the Additional Premises shall be as set forth in Section 2.01(b) hereof. Subject to the terms and conditions of this Lease, Tenant shall have access to the Premises twenty-four (24) hours per day, seven (7) days per week.

(b) Landlord shall, in accordance with this Section 2.01(b) and the other provisions of this Lease, separately demise to Tenant premises (the "ADDITIONAL PREMISES") comprised, at Landlord's option, of either (x) a portion of the 8th floor of the South Building and, if applicable, 7th floor of the Tower (the "EIGHTH FLOOR SPACE"), (y) a portion of the 4th floor of the South Building and, if applicable, the 3rd floor of the Tower (the "4TH FLOOR SPACE") or (z) a portion of the 5th floor of the South Building and, if applicable, the 4th floor of the Tower (the "5TH FLOOR SPACE") (each, an "OPTIONAL LOCATION"). Landlord shall give written notice to Tenant within five days after Landlord receives notice as to when any particular Optional Location shall be delivered by Overlandlord to Landlord. Landlord shall deliver to Tenant written notice (the "ADDITIONAL SPACE NOTICE") setting forth, INTER ALIA, in which Optional Location the Additional Premises will be located in as timely a fashion from and after the date hereof as practicable taking into consideration Landlord's own space planning needs and the anticipated delivery schedule of the Optional Locations from Overlandlord. Landlord shall deliver the Additional Premises to Tenant within thirty (30) days from the date that it receives possession of the 4th Floor Space or the 5th Floor Space, as the case may be, or such longer period as Landlord may reasonably need to physically separate the premises as hereinafter provided, should either such Optional Locations be designated as the Additional Premises or upon not less than fifteen (15) days after the date of delivery of the Additional Space Notice or such longer period as Landlord may reasonably need to physically separate the premises should Landlord designate the 8th Floor Space as the Additional Premises. The Additional Premises shall comprise approximately 50,000 rentable square feet and shall be located in such portions of an Optional Location as Landlord may determine, subject to Tenant's reasonable approval, provided, that, the Additional Premises shall, except to the extent of DE MINIMIS variations, be divided on a north/south axis and shall consist of an eastern or western portion. Unless the parties shall otherwise mutually agree, in no event shall the rentable square footage of the Additional Premises exceed 55,000 rentable square feet or be less than 45,000 rentable square feet, such relative square footage amount being reasonably determined by Landlord with reference to such factors as the location or proximity of

2 common areas to general floor plate of the Additional Premises and the ease and cost of physical demise. The Additional Space Notice shall contain a floor plan delineating the Additional Premises. In the event Tenant reasonably disapproves of the location of the Additional Premises within such Optional Location by written notice to Landlord, and such notice is received by Landlord within fifteen (15) days after receipt of the Additional Space Notice, the Additional Space Notice shall be deemed to have been delivered to Tenant on the date that Landlord and Tenant agree on an appropriate location or the date that Landlord delivers to Tenant a revised Additional Space Notice setting forth a location for the Additional Premises for which Tenant has no reasonable objection. Any dispute as to whether Landlord has acted reasonably in connection with selecting the location of the Additional Premises shall be resolved pursuant to an expedited arbitration in accordance with the procedures set forth in Section

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 9.19 hereof. The parties acknowledge and agree that the Additional Premises may or may not contain space located on the contiguous Tower floor. The Additional Space Notice shall set forth Landlord's determination as to the amount of rentable square feet contained within the Additional Premises. The rentable square footage shall be calculated using the same methodology as Landlord used in determining the rentable square footage of the Initial Premises. Upon possession of the Additional Premises being delivered to Tenant, Tenant shall be deemed to have received, and is hereby granted, such rights in common with Landlord, or other occupants of the floor on which the Additional Premises is located, to use such corridors, hallways, restrooms, electrical closets and other common areas on such floor as may be reasonably necessary for the operation of Tenant's business. On or prior to the Possession Date of the Additional Premises, Landlord shall take all steps reasonably necessary, at its sole cost and expense, to physically separate the Additional Premises from the premises retained by Landlord, including, without limitation, the erection of a demising wall.

SECTION 2.02. TERM. The term of this Lease (the TERM") shall commence on the date (the "COMMENCEMENT DATE") that is the latest to occur of (a) the Possession Date with respect to the Initial Premises and (b) the date that Overlandlord's Consent to this Lease has been obtained by Landlord in the form attached hereto as Exhibit G (or such other form as may be reasonably acceptable to Tenant) and Overlandlord shall have executed a Subordination and Non-Disturbance Agreement substantially in the form attached hereto as Exhibit F and shall end, unless sooner terminated as herein provided, on the last day of the calendar month in which occurs the tenth (10th) anniversary of the Commencement Date ("EXPIRATION DATE").

SECTION 2.03. POSSESSION DATE. (a) "POSSESSION DATE" shall mean (x) with respect to the Initial Premises, the date possession of the Initial Premises is delivered to Landlord by Overlandlord pursuant to the Overlease and (y) with respect to the Additional Premises, on or prior to July 1, 2002, subject to receipt by Landlord of possession of the Additional Premises from Overlandlord pursuant to the terms of the Overlease. Landlord anticipates that the Initial Premises shall be delivered by Overlandlord to Landlord on or prior to November 12, 2001. In the event that the Initial Premises shall be delivered subsequent to November 12, 2001, Landlord shall give Tenant two (2) Business Days prior written notice of such subsequent delivery date of the Initial Premises. Landlord shall keep Tenant reasonably apprised of the delivery schedule of the Initial Premises as Landlord receives such information from Overlandlord. Landlord agrees to use good faith efforts to cause Overlandlord to deliver the Additional Premises to Landlord as soon after the date hereof as may be reasonably practicable, provided, however, that the foregoing obligation shall not be deemed or construed to require Landlord to expend sums of

3 money, grant any concessions to Overlandlord under the Overlease or undertake any other measures of a significant monetary or non-monetary nature. Provided Landlord has received Overlandlord's consent hereto, Landlord shall deliver possession of the Premises to Tenant on the Possession Date. In the event that Landlord is delayed in delivering possession of the Initial Premises or the Additional Premises as a result of the failure of the Overlandlord to deliver possession of the same to Landlord and Landlord shall have received any additional rental abatement from Overlandlord as a result thereof, Tenant shall be entitled to the same number of days of additional rental abatement with respect to the premises so not delivered as Landlord shall have received from Overlandlord, it being understood that Landlord shall have no obligation to pass

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document through any rental abatement for the Premises received from Overlandlord with respect to the period prior to November 12, 2001.

(b) Subject to Landlord's obligation to physically separate the Additional Premises from the premises retained by Landlord as heretofore provided, Landlord shall deliver the Premises to Tenant in the condition Overlandlord delivers the Premises to Landlord and Tenant shall accept the Premises "as is", provided, that, Landlord shall deliver the Premises with such existing furniture in place as is delivered to Landlord by Overlandlord pursuant to the Overlease. The parties hereby agree that the value of the existing furniture is DE MINIMIS and no portion of the Rent payable hereunder is allocable to the existing furniture. Tenant represents and warrants that Tenant is exempt from New York State and New York City sales tax and agrees that it shall indemnify Landlord against any New York State or New York City sales tax which may be due and payable in connection with the leasing of such furniture. Landlord does not make, and Tenant acknowledges that Landlord has not made or given, any representation or warranty, express or implied, with respect to the existing furniture or the present or future merchantability, condition, quality, durability, fitness or suitability of the existing furniture or any part thereof in any respect or in connection with or for the purposes and uses of Tenant, or any other representation or warranty of any kind or character, expressed implied. Tenant accepts the existing furniture "as-is". Notwithstanding any other provision of this Lease, Tenant shall not be obligated to remove the furniture delivered with the Premises from Landlord from the Premises on the Expiration Date. Tenant waives any right to rescind this Lease under Section 223-a of the New York Real Property Law or any successor statute of similar nature and purpose then in force and further waives the right to recover any damages which may result from Landlord's failure for any reason to deliver possession of the Premises for the commencement of the Term. The provisions of this Article are intended to constitute an "express provision to the contrary" within the meaning of Section 223-a of the New York Real Property Law.

SECTION 2.04. SPECIAL TERMINATION RIGHTS. (a) In the event that the Tenant named herein (i.e., the Port Authority of New York and New Jersey) or a Permitted Successor has either (i) signed a binding, written commitment to relocate a majority of its staff in the Building to a new building for which construction has commenced or (ii) has undertaken a bonafide, company-wide plan of consolidation pursuant to which Tenant shall lease no less than 4000,000 rentable square feet in a single building (or connected building complex) in which a majority of its staff located at the Building shall be relocated to such building (the circumstances described in the foregoing clauses (i) and (ii) being each a "PORT CONSOLIDATION EVENT"), then, in such event, Tenant may elect by written notice to Landlord (the "TENANT TERMINATION NOTICE") to terminate this Lease effective as of the date (the "TENANT LEASE TERMINATION DATE") set forth in the Tenant Termination Notice, which Tenant Lease Termination Date may be no earlier than the

4 sixth (6th) anniversary of the Commencement Date and no later than the seventh (7th) anniversary of the Commencement Date. In no event shall Tenant have the right to terminate this Lease unless Tenant shall have delivered to Landlord the Tenant Termination Notice at least eighteen (18) months prior to the Tenant Lease Termination Date. In consideration of the right granted to Tenant herein, Tenant shall be obligated to pay to Landlord on or prior to the Tenant Lease Termination Date Landlord's Lease Procurement Costs. As used herein, the term "LEASE PROCUREMENT COSTS" means, (A) if the Tenant Lease Termination Date shall be the 6th anniversary of the Commencement Date, the sum of $1,254,877.00, (B)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document if the Tenant Lease Termination Date shall be the 7th anniversary of the Commencement Date, the sum of $977,625.00,and (C) if the Tenant Lease Termination Date shall be a date between the 6th and 7th anniversary of the Tenant Lease Termination Date, a sum obtained by pro-rating the amounts described in the foregoing clauses (B) and (C) on a straight-line basis. In the event that Tenant has properly exercised its right to terminate the Lease under this Section 2.04(a), this Lease shall terminate on the Tenant Lease Termination Date and the Term shall come to an end as if such date were the Expiration Date and Tenant shall thereafter be discharged of any and all liabilities accruing from and after the Tenant Lease Termination Date, except such obligations as by the terms hereof expressly survive the Expiration Date.

(b) In the event that Landlord desires to occupy the Premises for its own use and occupancy or the use and occupancy of one of its Affiliates, Landlord may elect by written notice to Tenant (the "LANDLORD LEASE TERMINATION NOTICE") to terminate this Lease effective as of the date (the "LANDLORD LEASE TERMINATION DATE") set forth in the Landlord Lease Termination Notice, which Landlord Lease Termination Date may be no earlier than the sixth (6th) anniversary of the Commencement Date and no later than the seventh (7th) anniversary of the Commencement Date, provided, however, that in the event Tenant submits to Landlord within thirty (30) days from receipt of the Landlord Lease Termination Notice reasonably satisfactory evidence that a Port Consolidation Event has occurred, the Landlord Lease Termination Notice shall be deemed to have been rescinded. Landlord shall thereafter have the option, by written notice to Tenant, to terminate this Lease effective as of the date (the "SUBSEQUENT LANDLORD LEASE TERMINATION DATE") set forth in a subsequent written notice to Tenant (a "SUBSEQUENT NOTICE") occurring on or after the eighth (8th) anniversary of the Commencement Date. In no event shall Landlord have the right to terminate this Lease unless Landlord shall have delivered to Tenant the Landlord Termination Notice or the Subsequent Notice, as the case may be, at least eighteen (18) months prior to the Landlord Lease Termination Date or the Subsequent Landlord Lease Termination Date, as applicable. In the event that Landlord has properly exercised its right to terminate the Lease under this Section 2.04(b), this Lease shall terminate on the Landlord Lease Termination Date or the Subsequent Landlord Lease Termination Date, as applicable, and the Term shall come to an end as if such date were the Expiration Date and Tenant shall thereafter be discharged of any and all liabilities accruing from and after the Landlord Lease Termination Date or the Subsequent Landlord Lease Termination Date, as the case may be, except such obligations as by the terms hereof survive the Expiration Date. The right of Landlord to terminate the Lease as provided in this Section 2.04(b) shall be personal to the Landlord originally named herein (i.e., Credit Suisse First Boston (USA), Inc.) and its present and future Affiliates and their successors by merger, consolidation, corporate reorganization or sale of all or substantially all of its assets.

SECTION 2.05. USE. Except to the extent expressly waived by Overlandlord, Tenant shall use the Premises only for such uses as are permitted pursuant to SECTION 6.1 and 6.2 of the Overlease, the terms and provisions of which are incorporated herein by reference as if fully set forth herein, except that the term "NON-RETAIL SPACE" theirin shall be deemed to refer to the term "Premises" herein and Section 6.1(b) shall not be so incorporated. To the extent permitted by the Overlease, Tenant shall have the right to include up to four (4) classrooms in the Premises for managerial and administrative training of Tenant's employees and contract employees only.

~~ARTICLE 3~~

~~SECTION 3.01. RENT. "RENT" shall consist of fixed Rent and Additional Charges.~~

SECTION 3.02 FIXED RENT. (a) The fixed rent ("FIXED RENT") for the Initial Premises shall be, for the period commencing on the Commencement Date and ending on the day immediately preceding the fifth anniversary of the Commencement Date, Four Million Six Hundred Twenty Two Thousand Three Hundred Fifty Six Dollars ($4,622,356), payable in equal monthly installments of Three Hundred Eighty Five Thousand One Hundred Ninety Six Dollars and Thirty Three Cents ($385,196.33) and (ii) for the period commencing on the fifth anniversary of the Commencement Date and ending on the day immediately preceding the tenth anniversary of the Commencement Date, Five Million One Hundred Fourteen Thousand Ninety Six Dollars ($5,114,096), payable in equal monthly installments of Four Hundred Twenty Six Thousand One Hundred Seventy Four Dollars and Sixty Seven Cents ($426,174.67).

(b) The Fixed Rent for the Additional Premises shall be, (i) for the period commencing on the later to occur of (x) the Commencement Date and (y) the date that possession of the Additional Premises is delivered to Tenant in accordance with Section 2.01(b), and ending on the day immediately preceding the fifth anniversary of the Commencement Date, a sum equal to the product of (A) $47.00 and (B) the number of rentable square feet in the Additional Premises and (ii) for the period commencing on the fifth anniversary of the Commencement Date and ending on the tenth anniversary of the Commencement Date, a sum equal to the product of (A) $52.00 and (B) the number of rentable square feet in the Additional Premises.

(c) Fixed Rent shall be payable by Tenant in equal monthly installments in advance on the Commencement Date and on the first day of each calendar month thereafter, provided, that, if the Commencement Date or the date the Additional Premises is delivered is not the first day of the month, the Fixed Rent shall be appropriately prorated.

SECTION 3.03. ADDITIONAL CHARGES. "ADDITIONAL CHARGES" means Tax Payments, Operating Payments and all other sums of money, other than Fixed Rent, at any time payable by Tenant under this Lease, all of which Additional Charges shall be deemed to be rent.

~~SECTION 3.04. TAX PAYMENTS. (a) "BASE TAX AMOUNT" means the Taxes (excluding any amounts described in Section 3.04(b)(iii)) for the calendar year 2002.~~

(b) "TAXES" means (i) the real estate taxes, vault taxes, assessments and special assessments levied, assessed or imposed upon or with respect to the Land and the Building by any federal, state, municipal or other government or governmental body or authority (including, without limitation, any taxes, assessments or charges imposed upon or against Project, Landlord or the owner of the Project with respect to any business improvement district (collectively, "BID TAXES")) but only if and to the extent that the same shall be reflected in any tax bill with respect to the Project and after giving effect to any and all abatements, refunds, reductions and credits which are not made expressly for the benefit of another tenant by the Building, but expressly excluding any benefit accruing to Landlord under any discretionary municipal incentive program (as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document opposed to benefits granted by the applicable governmental entity on a Building-wide basis "as of right", including any Building-wide benefits which may be granted pursuant to the Industrial and Commercial Incentive Program), (ii) all taxes assessed or imposed with respect to the rentals payable under this Lease other than general income and gross receipts taxes; PROVIDED, that any such tax shall exclude Commercial Rent or Occupancy Taxes imposed pursuant to Title 11, Chapter 7 of the New York City Administrative Code so long as such tax is required to be paid by Tenants directly to the taxing authority and (iii) any expenses incurred by Landlord in contesting such taxes or assessments and/or the assessed value of the Project, which expenses shall be allocated to the Tax Year to which such expenses relate. If at any time the method of taxation shall be altered so that in lieu of or as an addition to or as a substitute for, the whole or any part of such real estate taxes, assessments and special assessments now imposed on real estate, there shall be levied, assessed or imposed (x) a tax, assessment, levy, imposition, fee or charge wholly or partially as a capital levy or otherwise on the rents received therefrom, or (y) any other additional or substitute tax, assessment, levy, imposition, fee or charge, including without limitation, business improvement district and transportation taxes, fees and assessments, then all such taxes, assessments, levies, impositions, fees or charges or the part thereof so measured or based shall be included in "TAXES," computed as if Landlord's sole asset were the Project. If the owner, or lessee under a Superior Lease, of all or any part of the Project is an entity exempt from the payment of taxes described in CLAUSES (i) and (ii), there shall be included in "TAXES" the taxes described in clauses (i) and (ii) which would be so levied, assessed or imposed if such owner or lessee were not so exempt and such taxes shall be deemed to have been paid by Landlord on the dates on which such taxes otherwise would have been payable if such owner or lessee were not so exempt. Except as permitted in this SECTION 3.04(b), "TAXES" shall not include (x) any municipal, state or federal taxes on Landlord's income, franchise taxes, taxes on gross receipts or revenue, estate or inheritance taxes value added, transfer, transfer gains, succession, capital stock excise, excess profits, gift, foreign ownership or control, corporate franchise, corporate, unincorporated association, payroll or stamp tax, or any similar taxes or charges imposed or assessed against Landlord, including any other tax, assessment, charge or levy on the rent reserved under leases, including this Lease or (y) unless due to default in Tenant timely paying Tenant's Tax Share hereunder, any penalties, late charges or fines imposed against Landlord with respect to real estate taxes, assessments and the like than are otherwise includable within the term "Taxes." If the Bid Taxes are eliminated or reduced after the date hereof, then, as of the date of such elimination or reduction, the Base Tax Amount shall be recalculated to take into account the elimination or reduction of the Bid Taxes.

(c) "TAX YEAR" means each period of 12 months, commencing on the first day of July of each such period, in which occurs any part of the Term, or such other period or 12 months occurring during the Term as hereafter may be adopted as the fiscal year for real estate tax purposes of the City of New York.

(d) "TENANT'S SHARE" means 6.97%, as the same may be increased or decreased in accordance with the terms of this Lease. The parties hereto agree that the rentable square foot area of the Premises shall be deemed to be, as of the date hereof and prior to the addition of the Additional Premises, 98,348 rentable square feet and the rentable square foot area of the Building shall be deemed to be 1,410,765 rentable square feet. Tenant's Share has been, and shall be upon the addition of the Additional Premises and as otherwise provided for herein, determined and/or redetermined by dividing the rentable square foot area

(e) If Taxes for any Tax Year, shall exceed the Base Tax Amount, Tenant shall pay to Landlord (each, a "TAX PAYMENT") Tenant's Share of the amount by which Taxes for such Tax Year are greater than the Base Tax Amount. Landlord shall give Tenant a statement showing the computation of Tenant's Share of Taxes, which statement shall cover only those Taxes which Landlord is then required to pay pursuant to the Overlease and such statement shall be accompanied by copies of the applicable tax bills or other evidence showing the Taxes or tax assessments. The Tax Payment for each Tax Year shall be due and payable in installements in the same manner that Taxes for such Tax Year are due and payable to the City of New York, except that Tenant shall pay each such installment to Landlord on or before the later of (A) twenty (20) days after the rendering by Landlord to Tenant of the above-referenced statement or (B) thirty (30) days prior to the date such installment first becomes due and payable to the City of New York; PROVIDED, HOWEVER, that if Landlord shall at any time be required pursuant to the terms of any Superior Mortgage to make any escrow payments in respect of Taxes on a more frequent basis than such installments are due and payable to the City of New York, then Tenant shall pay to Landlord on the first day of each period for which Landlord is required make such escrow payments during such Tax Year an amount equal to the Tax Payment for such Tax Year divided by the number of such escrow payments that Landlord is required to make in respect of Taxes for such Tax Year. If there shall be any increase or decrease in the Taxes for any Tax Year, the Tax Payment for such Tax Year shall be appropriately adjusted and paid or refunded, as the case may be, in accordance herewith. In no event, however, shall Tenant be entitled to a refund or credit against any sums payable under this Lease if Taxes are reduced below the Base Tax Amount. Except as heretofore provided, Tenant shall receive an equitable share of any and all real estate tax incentives, abatements and credits granted to the Building and Land during the Term of this Lease, PROVIDED that such real estate tax incentives, abatements and credits may be directly attributed, at least in part, to Tenant's use and occupancy of the Premises (or any portion thereof located in the Building). Similarly, if any such incentives, abatements or credits are directly attributed to space in the Building not leased to Tenant in no event shall Tenant be entitled to share in any such benefits. Landlord, at Tenant's in no event shall Tenant be entitled to share in any such benefits. Landlord, at Tenant's sole cost and expense, shall reasonably cooperate with Tenant in Tenant's efforts to obtain municipal tax rebates, credits or other incentives with respect to the Premises; it being acknowledged that any such incentives shall be the sole property of Tenant.

(f) If Landlord shall receive a refund of Taxes for any Tax Year, Landlord shall pay to Tenant Tenant's Share of the net refund (after deducting from such refund the costs and expenses of obtaining the same, including, without limitation, appraisal, accounting and legal fees, to the extent that such costs and expenses were not included in the Taxes for such Tax Year); PROVIDED, that (i) Tenant shall not be eligible to receive such payment if, at the time such payment is required to be refunded to Tenant, Tenant is in default under the Lease beyond any notice and grace period, if applicable, until such time as such default iS cured, at which time such payment shall be made to Tenant, PROVIDED, that Landlord shall be entitled to deduct any costs and expenses arising from such default (including, withhold limitation, any payments made to cure such default) from any such payment to be made to Tenant and (ii) such payment to Tenant shall in no event exceed Tenant's Tax Payment paid for such Tax Year. Such refund shall be made to Tenant within sixty (60) days of Landlord's receipt thereof.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) If the Taxes comprising the Base Tax Amount are reduced as a result of an appropriate proceeding or otherwise, the Taxes as so reduced shall for all purposes be deemed to be the Base Tax Amount and Landlord shall notify Tenant of the amount by which the Tax Payments previously made were less than the Tax Payments required to be made under this SECTION 3.04, and Tenant shall pay the deficiency within twenty (20) days after demand therefor.

~~SECTION 3.05. [INTENTIONALLY OMITTED]~~

SECTION 3.06. TAX PROVISIONS. (a) Landlord's failure to render or delay in rendering any statement with respect to any Tax Payment or installment thereof shall not prejudice Landlord's right to thereafter render such a statement, nor shall the rendering of an incorrect statement for any Tax Payment or installment thereof prejudice Landlord's right to thereafter render a corrected statement therefor. If Landlord fails to render a statement with respect to any particular Tax Payment or installment thereof within two (2) years after the Expiration Date of this Lease, Landlord shall be deemed to have waived its right to claim any deficiency.

(b) Landlord and Tenant confirm that the computations under this ARTICLE 3 are intended to constitute a formula for agreed rental escalation and may or may not constitute an actual reimbursement to Landlord for the Taxes. If the Building shall be condominiumized, then Tenant's Tax Payments shall, if necessary, be equitably adjusted such that Tenant shall thereafter continue to pay the same share of the Taxes of the condominiumized Building as Tenant would pay in the absence of such condominimization.

(c) Each Tax Payment in respect of a Tax Year, which begins prior to the commencement of the Term or ends after the expiration or earlier termination of this Lease, and any tax refund pursuant to SECTION 3.04(f), shall be prorated to correspond to that portion of such Tax Year occurring within the Term.

(d) Landlord shall have no obligation to bring any application or proceeding seeking a reduction in Taxes or the assessed valuation of the Building. Tenant hereby waives to the fullest extent permitted by law any right Tenant may now or in the future have to protest or contest any Taxes or to bring any application or proceeding seeking a reduction in Taxes or the assessed valuation of the Building or otherwise challenging the determination thereof.

SECTION 3.07. ELECTRIC CHARGES. (a) Landlord shall supply the Premises with electrical service equal to six (6) watts, demand load, exclusive of the HVAC System serving the Premises, per rentable square foot contained in the Premises ("ELECTRIC CAPACITY"), and shall cause Tenant's electric energy usage to be measured on a submetering basis. If the electric service supplied to the Premises is supplied by more than one (1) submeter, then the readings will be aggregated through a totalizing meter and billed on a coincident demand basis as if billed through a single meter. Landlord shall, at Landlord's expense, purchase and install the submeter(s). Tenant shall pay Landlord, as additional rent within thirty (30) days of receipt of its next rent bill, for the kw hours and kw demand used by Tenant at Landlord's average cost per kilowatt hour for the Building, plus five (5%) percent thereof for providing, reading and billing the submetering service (the "5% FEE"). Landlord shall have the sole right to select the provider of electricity for the Building; PROVIDED, however, that Landlord shall not select a provider of electricity for the Buildings in which Landlord has an economic interest other than the ownership of publicly-traded

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document common stock. Tenant, from time to time, shall have the right to review the readings of Tenant's submeter(s) and Landlord's calculation of the Additional Charges for electricity, at reasonable times and on reasonable prior notice, on or prior to the ninetieth (90th) day after the date on which Tenant receives the rent bill or statement which includes such Additional Charges. If (x) Tenant participates in a rebate or incentive program sponsored by the utility company serving the Project, (y) such rebate inures exclusively to the benefit of Tenant and (z) such rebate or credit is paid or given to Landlord, Landlord shall pay the amount of the same to Tenant thirty (30) days after the receipt of a request from Tenant therefor. Notwithstanding the foregoing, Tenant shall have the right to obtain electric service directly from the Power Authority of the State of New York ("PASNY") provided that (i) Tenant shall have notified Landlord that it has elected to obtain electric service from PASNY, (ii) Tenant shall pay all costs and expenses incurred by Tenant or Landlord in connection with obtaining such direct electric service from PASNY, including without limitation, the cost of installing any direct meters and risers required in connection therewith, (iii) Tenant shall pay to Landlord the 5% Fee, (iv) Tenant shall have obtained such direct service on or before the six (6) month anniversary of the date of this Lease, and (v) Tenant at its cost and expense shall remove all meters, risers or other equipment installed in the Building or Premises in connection with such direct electrical service from PASNY upon the Expiration Date or the earlier termination of this Lease. In the event that Tenant has not contracted with PASNY on or before the 6th month anniversary of the date of this Lease, Tenant shall be required to obtain electrical service from Landlord in accordance with the provisions of this Section 3.07.

(b) Prior to the date that Landlord shall install submeter(s) at the Initial Premises or the Additional Premises, as the case may be, Tenant shall pay in monthly installments in advance, as additional rent for its consumption of electricity at the Initial Premises or the Additional Premises, as applicable, a per annum sum equal to the product of (A) $2.50 and (B) the rentable square feet of the Initial Premises and/or the Additional Premises, as applicable, provided, however, that until such time as Tenant shall have occupied the Initial Premises or the Additional Premises, respectively, for the conduct of its business, Tenant shall pay for its consumption of electricity a per annum sum equal to the product of (A) $1.00 and (B) the rentable square feet of the Initial Premises and/or the Additional Premises. Landlord shall install submeter(s) at the Premises no later than one year from the Possession Date with respect to each of the Initial Premises and the Additional Premises, respectively.

~~(c) If it shall become unlawful for Landlord to submeter Tenant's electric energy usage, such usage shall thereafter be paid for and measured as follows:~~

(i) Tenant agrees to pay for its electric usage as additional rent (hereinafter referred to as the "ADDITIONAL RENT FOR ELECTRICITY"). The Additional Rent for Electricity shall be determined initially by a survey of the Premises made by an electrical consultant or electrical engineer chosen by Landlord. The survey so made will determine the number of kw hours and kw demand based on the electrical equipment and fixtures in the Premises and the period of use thereof, and based thereon will determine the value, expressed in dollars per year, of Tenant's electric energy usage. The rate Tenant shall pay will be the service classification under which the public utility bills Landlord commensurate with the rate of usage as shown by the survey, plus five (5%) percent of such amount for Landlord's administrative costs. The Additional Rent

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document for Electricity so determined, as adjusted from time to time pursuant to subparagraphs (ii), (iii) and (iv), shall be paid by Tenant in equal monthly installments in advance on the first day of each month during the Term, without any set off or deduction of any kind.

(ii) If the public utility rate schedule for the supply of electric current to the Building shall be increased or decreased subsequent to the date of the survey referred to above, or if there shall be an increase or decrease in the fuel adjustment or taxes, or if additional taxes, surcharges, or charges of any kind shall be imposed upon the sale or furnishing of such electric current, the Additional Rent for Electricity shall be increased or decreased by applying the changed rate, fuel adjustment and taxes to the kw hours and kw demand shown on the electric survey then in effect.

(iii) If there shall be a change subsequent to the initial survey, or any future survey, in the Premises, or in the number of hours during which the Premises is used, or if Tenant's failure to maintain its installations in good order and repair causes greater consumption of electric current, or if Tenant uses electricity for purposes other than the use permitted hereunder, or if Tenant adds and fixtures, machinery or equipment which significantly increases its electricity usage, the Additional Rent for Electricity, theretofore adjusted, shall be increased by applying to the additional kw hours and kw demand furnished by Landlord the Service Classification Rate under which the public utility bills Landlord commensurate with the rate for the usage as shown by the survey, plus five (5%) percent of such amount for Landlord's administrative costs. If Tenant's electricity usage shall decrees due to the use of its electric fixtures or equipment, the Additional Rent for Electricity, theretofore adjusted, shall be decreased by applying the Service Classification Rate aforesaid to the lesser kw hours and kw demand.

(iv) Landlord and Tenant shall each have the right from time to time during the Term to have an electric rate consultant or electrical engineer survey the electric current consumed by Tenant in the Premises. If such consultant determines that the value of the electric current furnished Tenant is more or less than the Additional Rent for Electricity, as most recently adjusted, such annual amount shall be further adjusted to equal the amount determined by said consultant. The cost of the survey shall be borne by the party ordering the same.

(v) Landlord shall deliver a copy of the initial survey, and a copy of any future survey made pursuant to this Section 3.07(c), to Tenant, and Tenant shall have ninety (90) days within which it may protest the findings contained therein. If Tenant fails to protest within the ninety (90) day period, the findings contained in the survey shall be final. If Tenant protests within the ninety (90) day period (by sending Landlord a notice in the manner herein provided for the giving of notices), Tenant shall have a second survey made by an electric engineer or electric rate consultant of its choice, and deliver a copy thereof to Landlord within ninety (90) days of the date of the protest. If Landlord's and Tenant's surveyors are unable to agree upon the amount of electric energy consumed by Tenant, or the amount of any increase or decrease, or an any other matter contained in the surveys, the determination of the same shall be submitted to arbitration under the rules of the American Arbitration Association then obtaining. The determination of the electric rate consultant or engineer, or the American Arbitration Association if there is disagreement and the determination is submitted to arbitration made pursuant to this subparagraph, shall be binding on Landlord and Tenant. The parties hereto shall,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document within ten (10) days from the date of any such determination, execute, acknowledge and deliver to each other an agreement setting forth the adjusted Additional Rent for Electricity, but such increase or decrease shall be effective from the date of the increase or decrease (subparagraph (ii)), or change (subparagraph (iii)), or new survey (subparagraph (iv)), whether or not such agreement is executed, and notwithstanding the date of execution thereof.

(d) Landlord shall not in any way be liable or responsible to Tenant, except where due to Landlord's negligence, for any loss, damage or expense which Tenant may sustain or incur if, during the Term, by reason of the act or inaction of the public utility servicing the Project, either the quantity or character of electrical energy is changed or is no longer available or suitable for Tenant's requirements. Landlord shall not be obligated to increase the existing electrical capacity of any portion of the Building's systems, nor to provide any additional wiring or capacity to meet Tenant's requirements, other than as set forth in SECTION 3.07(a). Tenant shall make no substantial alteration or addition to the electrical equipment in the Premises as of the commencement of the Term, nor increase the use of electricity in the Premises (except to a DE MINIMIS extent) without the prior written consent of the Landlord in each instance, which consent Landlord agrees not to unreasonably withhold or delay. Subject to Tenant's Electric Capacity right under SUBSECTION 3.07(a) herein, Tenant covenants and agrees that at all times its use of electric current shall never exceed the capacity of the then existing feeders of the Building or the risers or wiring installations, and further agrees, subject to its Electric Capacity right under SUBSECTION 3.07(a) herein, that Tenant may not use any electrical equipment which, in Landlord's opinion, reasonably exercised, will overload such installations or interfere with the use thereof by any other tenants of the Building.

SECTION 3.08. MANNER OF PAYMENT. Tenant shall pay all Rent as the same shall become due and payable under this Lease (a) in the case of Fixed Rent and recurring Additional Charges, by wire transfer of immediately available federal funds as directed by Landlord, and (b) in the case of all other sums, either by wire transfer as aforesaid or by check (subject to collection) drawn on a New York Clearing House Association member bank, in each case at the times provided herein without notice or demand and without setoff or counterclaim. If Landlord shall direct Tenant to pay Fixed Rent by wire transfer, then Tenant shall not be in default of Tenant's obligation to pay any such Fixed Rent if and for so long as Tenant shall timely comply with Landlord's wire instructions in connection with such payments. If Tenant shall have timely

12 complied with Landlord's instructions pertaining to a wire transfer, but the funds shall thereafter have been misdirected or not accounted for properly by the recipient bank designated by Landlord, then the same shall not relieve Tenant's obligation to make the payment so wired, but shall toll the due date for such payment until the wired funds shall have been located. All Rent shall be paid in lawful money of the United States to Landlord at its office or such other place as Landlord may from time to time designate. If Tenant fails timely to pay any Rent, Tenant shall pay interest thereon from the date when such Rent became due to the date of Landlord's receipt thereof at the lesser of (i) the base rate from time to time to announced by Citibank, N.A. (or if Citibank, N.A. shall not exist, such other major bank in New York, New York as shall be designated by Landlord in a notice to Tenant) to be in effect at its principal office in New York, New York (the "BASE RATE") plus 3% per annum or (ii) the maximum rate permitted by law. Any Additional Charges for which no due date is

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document specified in this Lease shall be due and payable on the 30th day after the date of Landlord's invoice therefor. All bills, invoices and statements rendered to Tenant with respect to this Lease shall be binding and conclusive on Tenant subject to Section 6.13 hereof. Notwithstanding anything to the contrary contained in this Lease, Rent shall be due and payable on the first day of the month and failure to pay such Rent on or prior to the first day of any month shall be considered a default under this Lease and interest shall accrue as provided in this SECTION 2.08 from and after the first day the Rent becomes due and payable.

SECTION 3.09. OPERATING EXPENSES. (a) The term "OPERATING EXPENSES" shall mean all expenses of each and every type and nature, foreseen and unforeseen, ordinary and extraordinary paid or incurred (without duplication of an included item) by Landlord in respect of the operation, repair, safety, management, security and maintenance (including deferred maintenance) of the Premises which are necessary or appropriate for the operation of the Building as a First-Class Office Building (as defined in the Overlease), but specifically excluding (or deducting as appropriate) expenses incurred in connection with or arising from:

~~(i) Taxes,~~

(ii) Fees paid or payable for managing and/or operating the Building in excess of the amount customarily charged by highly reputable managing and/or operating firms providing such services in First-Class Office Buildings;

(iii) Any capital expenditure made by Landlord unless such capital expenditure results in a savings of, or reduction in, Operating Expenses ("COST SAVINGS"); provided, however, (i) the costs of such capital expenditure shall only be included in Operating Expenses in any Operating Year to the extent of the annual amortization thereon calculated on a straight-line basis over the useful life of such capital improvement (as reasonably determined in accordance with generally accepted accounting principles), together with interest thereon at the Interest Rate and (ii) in no event shall there be included in Operating Expenses for any Operating Year an amount greater than the amount by which Operating Expenses are reduced in such Operating Year due to such capital expenditure;

(iv) Any other capital improvement or replacement not described in clause (iii) above made by Landlord unless such capital improvement is required by a Law enacted after the Commencement Date other than a Law which affects

only leaseable space other than the than the Premises; provided, however, the costs of such capital improvement shall only be included in Operating Expenses in any Operating Year to the extent of the annual amortization thereon calculated on a straight-line basis over the useful life of such capital improvement (as reasonably determined in accordance with generally accepted accounting principles), together with interest thereon at the Interest Rate;

~~(v) Any repairs (whether or not pursuant to Laws) made solely for the benefit of leaseable space other than Premises;~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (vi) Any machinery, equipment or tools used (A) solely within, or solely for the benefit of leaseable areas (other than the Premises) or (B) in connection with any alteration or other capital improvement or replacement which is excluded from Operating Expenses;

(vii) Premiums for any insurance carried by Landlord other than (A) the insurance specified in Section 7.1(a), (b), (c), (d), (e), (f), (g) and (i) of the Overlease and (B) the insurance specified in Section 7.1 (h) of the Overlease to the extent that such insurance relates to a capital expenditure which is not excluded from Operating Expenses pursuant hereto.

~~(viii) Professional and consulting fees, including legal and accounting fees, not directly related to the operation of the Premises;~~

~~(ix) Computer time, telephone, bookkeeping and other expenses not directly related to the operation of the Premises;~~

~~(x) Security within any leaseable space;~~

(xi) Leasing or procuring subtenants for the Building, including leasing commissions and advertising expenses, and all legal, accounting and consultants, fees, disbursements and expenses incurred in disputes with subtenants or enforcement of subleases or entering into sublease or preparing space for any subtenant;

~~(xii) Any items which are reimbursable to Landlord by insurance, warranties or otherwise other than pursuant to operating expense clauses similar to those in this Article 3;~~

(xiii) Charges for which Landlord is entitled to reimbursement from any subtenant, including services rendered or performed directly for the account of subtenants at such subtenants' cost or for which a separate charge is made (other than pursuant to operating expense clauses similar to those in this Article 3);

(xiv) Depreciation (provided, however, that such exclusion of depreciation shall not affect the inclusions in Operating Expenses of the amortized items required to be amortized pursuant to the provisions of clauses (iii) and (iv) of this Section 3.09(a));

(xv) Any debt incurred by Landlord, including, without limitation, installments of principal and interest and any other sum due and payable under any mortgage (provided that the foregoing shall not exclude the costs of performing and obligations under such mortgage if such costs are not otherwise excluded under this Section 3.09), and any expenses incurred in connection therewith;

(xvi) Rent and other charges due and payable under the Overlease (provided that the foregoing shall not exclude the costs of performing any obligations under the Overlease if such costs are not otherwise excluded under this Section 3.09);

~~(xvii) The cost of installing, operating and maintaining any specialty service or facility, such as the Auditorium, an observatory,~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document broadcasting facilities, athletic or recreational club, other than the net costs of operating the Cafeteria during any period in which the Cafeteria is in operation;

~~(xviii) The portion of any costs paid to a party related to Landlord and included in Operating Expenses which is in excess of the amount which would have been paid in the absence of such relationship;~~

(xix) The costs of acquiring, maintaining, displaying and insuring all sculptures, paintings and other works of art in the Building (other than the costs of maintaining and insuring the Works of Art (as defined in the Overlease);

~~(xx) Lease payments for rented equipment, the cost of which equipment if purchased would not be includable in Operating Expenses;~~

~~(xxi) Income, franchise, capital stock, transfer, inheritance, estate or gift taxes of Landlord;~~

~~(xxii) Investigation, removal, enclosure or encapsulation of asbestos or other Hazardous Materials;~~

(xxiii) All employee wages, salaries and other labor costs for personnel above the grade of building manager and the portion of employee wages, salaries and other labor costs attributable to time not spent in connection with the Building or for items excludable from Operating Expenses (it being agreed that items such as vacation time, sick days and such other time off included in other labor costs shall not be deemed to be "time not spent in connection with the Building" but shall be apportioned in the same manner as wages and salaries);

(xxiv) The gross negligence, willful misconduct or other tortious conduct of Landlord or any of Landlord's subtenants (other than Tenant and any person (other than Landlord) rightfully claiming by, through or under Tenant in its capacity as subtenant under this Lease);

~~(xxv) Fines or penalties, interest or late fees imposed upon Landlord;~~

~~(xxvi) Advertising and other promotional expenditures or any signage installed by Landlord in or on the Building;~~

~~(xxvii) Landlord's Roof Installations (as defined in the Overlease);~~

~~(xxviii) The contest of any Law if such Law applies solely to leaseable space other than the Premises;~~

~~(xxix) Any special events (e.g., receptions, concerts);~~

(xxx) Any violation by Landlord or any of Landlord's subtenants (other than Tenant and any person (other than Landlord) rightfully claiming by, through or under Tenant in its capacity as subtenant under this Lease) of any other sublease of space in the Building (provided that the foregoing shall not exclude the costs incurred by Landlord in performing any of Landlord's obligations (such as repairs)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document under such sublease if such costs are not otherwise excluded under this Section 3.09);

~~(xxxi) Landlord's general corporate overhead and general and administrative expenses;~~

(xxxii) All charitable or political contributions (other than any reasonable fees, dues and other contributions paid by or on behalf of Landlord to real estate organizations such as the Real Estate Board of New York and BOMA (and their successors) to the extent generally that landlords of First-Class Office Buildings are members thereof or make contributions thereto);

(xxxiii) The incremental additional cost of providing services to another occupant of the Building in excess of the services which Landlord is obligated to provide to Tenant under this Lease at Landlord's expense; and

~~(xxxiv) Any takeover lease obligations or lease or sublease obligations assumed by Landlord.~~

~~(b) The term "OPERATING YEAR" shall mean the Base Operating Year and each succeeding calendar year thereafter.~~

(c) The term "OPERATING STATEMENT" shall mean a written statement prepared by Landlord or its agent, setting forth Landlord's computation of the sum payable by Tenant under this Section 3.09 for a specified Operating Year.

(d) In determining the amount of Operating Expenses for any Operating Year (including the Base Operating Year), if less than all of the Building leasable area shall have been occupied by Landlord and/or subtenant(s) (including Tenant) at any time during any such Operating Year, Operating Expenses shall be determined for such Operating Year to be an amount equal to the like expenses which would normally be expected to be incurred had all such areas (to the extent of ninety-eight percent (98%) of the leasable area of the Building, excluding

~~16 all Mechanical Space (as defined in the Overlease) and areas used to provide services to which Tenant is not granted access) been occupied throughout such Operating Year.~~

(e) For each Operating Year, Tenant shall pay to Landlord as Additional Rent, an amount (herein called the "OPERATING PAYMENT") equal to Tenant's Share of the Operating Expenses for such Operating Year to the extent such Operating Expenses are in excess of the Operating Expenses for the calendar year 2002 (the "BASE OPERATING YEAR"). If Tenant's Share for an applicable Operating Year is redetermined in a particular Operating Year, Tenant's Operating Payment for that Operating Year shall be adjusted accordingly to reflect the applicable redetermination of Tenant's Share.

(f) Landlord shall furnish to Tenant, prior to the commencement of each Operating Year after the Base Operating Year, a written statement setting forth in reasonable detail Landlord's reasonable estimate of the Operating Payment for such Operating Year, based upon the method set forth in the preceding sections for computing the Operating Payment. Tenant shall pay to Landlord on the first day of each month during such Operating Year an amount

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document equal to one-twelfth (1/12th) of Landlord's reasonable estimate of the Operating Payment for such Operating Year (or the amount necessary to pay the estimate in full in equal monthly installments prior to the expiration of the then Operating Year). If, However, Landlord shall furnish any such estimate for an Operating Year subsequent to the thirtieth (30th) day prior to the commencement thereof, then (a) until the first day of the month following the month in which such estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day of each month an amount equal to the monthly sum payable by Tenant to Landlord under this Section 3.09 in respect of the last month of the preceding Operating Year; (b) promptly after such estimate is furnished to Tenant, Landlord shall give notice to Tenant stating whether the installments of the Operating Payment previously made for the Operating Year were greater of less than the installments of the to be made for such Operating Year in accordance with such estimate, and (i) if there shall be a deficiency, Tenant shall pay the amount thereof within thirty (30) days after demand therefor, and (ii) if there shall have been an overpayment, Landlord shall, within thirty (30) days of providing Tenant with such estimate, at Tenant's election either refund to Tenant the amount thereof or permit Tenant to credit the amount thereof against the Rent against the Rent payable hereunder, and (c) on the first day of the month commencing at least thirty (30) days subsequent to date on which such estimate is furnished to Tenant, and monthly thereafter throughout the remainder of such Operating Year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of the Operating Payment shown on such estimate. Landlord may, not more than twice during each Operating Year, furnish to Tenant a revised statement of Landlord's estimate of the Operating Payment for such Operating Year, based upon the method set forth in the preceding sections for computing the Operating Payment; and in such case, the Operating Payment for such Operating Year shall be adjusted and paid or refunded, as the case may be, substantially in the same manner as provided in the preceding sentence.

(g) Within one hundred twenty (120) days after the end of each Operating Year occurring after the Base Operating Year, Landlord shall furnish to Tenant an Operating Statement for such Operating Year, based on the method set forth in the preceding sections for computing the Operating Payment and certified by a reputable independent certified public accountant selected by Landlord setting forth in reasonable detail the actual Operating Expenses

17 incurred by Landlord during such Operating Year. If the Operating Statement shall show that the sums paid by Tenant exceeded the Operating Payment to be paid by Tenant for such Operating Year, Landlord shall promptly at Tenant's election either refund to Tenant the amount of such excess or permit Tenant to credit the amount of such excess against subsequent payments of Rent payable under this Lease; and if the Operating Statement for such Operating Year shall show that the sums so paid by Tenant were less than the Operating Payment to be paid by Tenant for such Operating Year, Tenant shall pay the amount of such deficiency within thirty (30) days after demand therefor. If the Operating Statements shall show that the estimated sums theretofore estimated by Landlord and paid by Tenant for such operating Year exceeded the Operating Payment for such Operating Year by more than ten (10%) percent, Landlord shall pay to Tenant interest on the excess over ten (10%) percent at the Interest Rate from the end of the applicable Operating Year to which the overpayment relates to the date such overpayment is refunded or credited.

(h) Each Operating Statement given by Landlord shall be conclusive and binding upon Tenant (i) unless within three (3) months after the receipt of the Operating Statement for the succeeding Operating Year, Tenant shall notify

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Landlord that it disputes the correctness of the Operating Statement specifying the particular respects in which the Operating Statement is claimed to be incorrect, and (ii) if such disputes shall not have been settled by agreement within three (3) months after such notice of dispute, either party may submit the dispute to arbitration in accordance with the provisions of Section 8.19 hereof. Pending the determination of such dispute by agreement or arbitration as aforesaid, Tenant shall within thirty (30) days after the receipt of such Operating Statement pay the Operating Payment in accordance with Landlord's statement, without prejudice to Tenant's position. If the dispute shall be determined in Tenant's favor, Landlord shall forthwith pay to Tenant the amount of Tenant's overpayment resulting from compliance with Landlord's Operating Statement and interest, if applicable, in accordance with Section 3.09(g) hereof.

~~(i) If an Operating Year ends after the expiration or termination of this Lease, the Operating Payment in respect thereof shall be appropriately prorated.~~

(j) The failure of Landlord to render an Operating Statement for any Operating Year shall not prejudice Landlord's right, or relieve Landlord of the obligation, to thereafter render such Operating Statement or relieve or release Tenant from any obligation to pay Tenant's Share of Operating Expenses for any Operating Year, but, if Landlord shall fail to render an Operating Statement for any year by June 30 of the succeeding calendar year, Tenant may cease to pay, until such Operating Statement is rendered, estimated installments of Tenant's Operating Payment. Further, Landlord shall be precluded from adjusting any Operating Statement to increase the costs included within Tenant's Share of Operating Expenses subsequent to the date (the "CUT-OFF DATE") that is thirty-six (36) months subsequent to the expiration of the Operating Year to which the applicable Operating Statement relates, but nothing shall preclude or prevent Landlord from furnishing Tenant with corrections or adjustments to any Operating Statement for any applicable Operating Year prior to the applicable Cut-Off Date.

(k) Tenant, upon reasonable notice, may (but only with its authorized employees or with a firm of reputable independent certified public accountants selected by Tenant) elect to examine such of Landlord's books and records with respect to the applicable Operating

Statement (collectively, "Records") as are directly relevant to any disputed amount included in the Operating Statement in question. In making such examination, Tenant shall, and shall cause its officers, employees and accountants to, keep confidential any and all information contained in the Records.

(l) Subject to the foregoing clause (j) of this Section, the provisions of this Article 3 shall survive the expiration or earlier termination of this Lease as to all Additional Charges due Landlord or credit owed Tenant accruing on or before the date of such expiration or termination, including all disputed items as well as the Additional Charges due for the last Operating Year, or portion thereof, falling within the Term. Within one hundred fifty (150) days following such expiration or earlier termination, Landlord shall render to Tenant a preliminary uncertified Operating Statement, and Landlord and Tenant shall, subject to year-end adjustments, preliminarily adjust the amount due Landlord or Tenant, as the case may be, for such last year or portion thereof, subject to year-end adjustments, and the party owing any portion of the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document same to the other shall promptly pay the same. Landlord shall issue a final Operating Statement for such last year or portion thereof on or before April 30 of the succeeding calendar year, and all amounts due Landlord or Tenant based thereon shall be adjusted between the parties.

~~ARTICLE 4~~

~~LANDLORD SERVICES~~

SECTION 4.01. LANDLORD SERVICES. (a) From and after the date that Tenant first occupies any portion of the Premises for the conduct of Tenant's business, Landlord shall continue to operate the Building in the same manner as it is being operated as of the date hereof and Landlord shall furnish Tenant with the following services (collectively, "LANDLORD SERVICES"):

(i) Landlord shall furnish air conditioning, ventilation and heat ("HVAC") (i) to the common areas of the Building, including, without limitation, the Building lobby to the extent such areas would customarily be provided with such services and (ii) to the Premises, during the hours between 8:00 A.M. and 6:00 P.M. on Business Days, subject to all Laws and in accordance with the Specifications for HVAC, which are attached hereto as Exhibit E. Landlord, throughout the Term, shall have free access to any and all mechanical installations of Landlord, including, but not limited to, air-cooling, fan, ventilating and machine rooms and electrical closets; Tenant shall not construct partitions or other obstructions which may unreasonably interfere with Landlord's free access thereto, or unreasonably interfere with the moving of Landlord's equipment to and from the enclosures containing said installations. Neither Tenant, nor its agents, employees or contractors shall at any time enter the said enclosures or tamper with, adjust or touch or otherwise in any manner affect said mechanical installations.

(ii) Tenant acknowledges that, during hours other than Business Hours ("OVERTIME PERIODS"), the Premises will likely require overtime or alternative HVAC for comfortable occupancy. Tenant further acknowledges that the normal operation of the HVAC

System is not designed to provide sufficient cooling of portions of the Premises which shall have an electrical load in excess of 4 watts per square foot of area for all purposes (including lighting and power) or which shall have a human occupancy factor in excess of one person per 150 square feet of usable area. Tenant shall be responsible for the proper distribution of HVAC throughout each floor of the Premises based upon its design criteria, occupancy, equipment and lighting and other factors which affect the effective cooling or heating of each floor.

(iii) The Fixed Rent does not reflect or include any charge to Tenant for the furnishing of any HVAC to Premises during Overtime Periods. Accordingly, if Landlord furnishes HVAC to the Premises at the request of Tenant during Overtime Periods, then Tenant shall pay Landlord additional rent for such services at the Building Rate. As used herein, the term "BUILDING RATE" shall mean Landlord's cost of providing HVAC services, as reasonably determined by Landlord (without additional charge), computed on the basis of (a) the cost of labor and (b) charges for electricity and other utilities. Landlord shall not be required to furnish any such services during any Overtime Period unless Landlord has received advance written notice delivered to Landlord's designated building manager from Tenant requesting such services prior to 3:00 P.M. of the day upon

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document which such services are requested or by 3:00 P.M. of the last preceding Business Day if such Overtime Periods are to occur on a day other than a Business Day. If Tenant fails to give Landlord such advance notice, then failure by Landlord to furnish or distribute any such services during such Overtime Periods shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rent, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business or otherwise. If more than one tenant utilizing the same system as Tenant requests the same Overtime Periods for the same services as Tenant, the charge to Tenant shall be adjusted pro rata.

(iv) Tenant shall be entitled to Tenant's Share of the 500 tons of condenser water in the Building and Landlord agrees to reserve Tenant's Share for the operation of Tenant's supplemental air conditioning units servicing the Premises on a twelve-month basis. Tenant shall advise Landlord by no later than, with respect to the Initial Premises, May 1, 2002 and, with respect to the Additional Premises, the later of May 1, 2002 ninety (90) days after delivery of the Additional Premises, of the amount of condenser water Tenant shall thereafter need for its supplemental condenser water requirements. Prior to the date that Tenant advises Landlord of the amount of air conditioning required, Landlord shall reserve Tenant's Share of the condenser water. If Tenant fails to advise Landlord of the amount of condenser water to reserve for Tenant by the dates set forth in the preceding sentence, Tenant shall be deemed to reserve the Tenant's Share thereof. Tenant shall pay Landlord's actual cost (not to include depreciation or amortization of equipment) for the amount of condenser water reserved, whether or not actually used. Landlord agrees to reasonably substantiate such costs to Tenant with bills, invoices and other pertinent documentation. Landlord, upon request of Tenant, will consider in good faith increasing Tenant's Share with respect to the 500 tons of condenser water in the Building based on the current and anticipated needs of Landlord and other tenants at the Building. Should Landlord, after good faith consideration, advise Tenant that it is unable to increase Tenant's share with respect to such condenser water, Landlord shall, at Tenant's request, consider in good faith after consideration of the amount of current and future riser space and roof space and other relevant factors, allowing Tenant to install, at Tenant's sole cost and

20 expense, a cooling tower on the roof of the Building for Tenant's additional air conditioning needs, subject to such reasonable requirements and reimbursement and indemnity obligations as Landlord may impose with respect thereto.

(v) Landlord shall provide non-exclusive passenger elevator service to each floor of the Premises twenty-four (24) hours per day, seven (7) days per week, it being agreed that Landlord may reasonably reduce the number of elevator cars in operation at times other than Business Hours.

(vi) Landlord will, through vertical plumbing risers in the Building, supply Tenant with (i) an adequate quantity of warm and cool water for (a) lavatory, cleaning and drinking purposes, and (b) pantry purposes, provided that there is no more than (4) pantries per floor of the Premises consuming not more than (3) gallons per minute per pantry, and such pantry consists of no more than a sink, a unit for brewing and dispensing coffee, a microwave, vending machines and a refrigerator, and that the same are used by Tenant for standard pantry purposes in keeping with a First-Class Office Building and (ii) a quantity of water for Tenant's sprinklers in the Premises which complies with

(vii) Landlord shall provide electrical capacity equal to 6 watts, demand load, exclusive of the HVAC system serving the Premises, per rentable square foot contained in the Premises; [such electrical capacity shall be available at the electrical closet on each floor of the Building on which the Premises is located (it being understood that Tenant shall be responsible for distributing such electrical capacity from the electrical closet to the Premises)]. In no event shall Tenant's consumption of electricity exceed the capacity of existing feeders to the Building or the risers or wiring serving the Premises (which shall not be less than 6 watts, demand load, exclusive of the HVAC system serving the Premises, per rentable square foot), nor shall Tenant be entitled to any unallocated power available in the Building unless, in Landlord's judgment (taking into account the then existing and future reasonably anticipated needs of other then existing and future tenants, including Landlord, and other needs of the Building), the same is available and reasonably necessary for Tenant's use. If such additional capacity is not available, Landlord shall, if reasonably feasible, extend or install, at Tenant's sole cost and expense (which expense shall equal Landlord's actual out-of-pocket costs), additional risers.

(viii) From and after the date that Tenant first occupies any portion of the Premises for the conduct of Tenant's business, cleaning services shall be provided in accordance with the standards set forth on Exhibit H attached hereto. Landlord shall not be required to perform any (A) extra cleaning work in the Premises required because of (w) carelessness, indifference, misuse or neglect on the part of Tenant, its subtenants or their respective employees or visitors, (x) interior glass partitions or an unusual quantity of interior glass surfaces, (y) non-building standard materials or finishes installed in the Premises and/or (z) the use of the Premises other than during Business Hours on Business Days and/or (B) removal from the Premises and the Building of any refuse of Tenant (x) in excess of that ordinarily accumulated in business office occupancy, including, without limitation, kitchen refuse and/or (y) at times other than Landlord's standard cleaning times, which times shall be consistent with the times during which offices are customarily cleaned. Notwithstanding the foregoing, Landlord shall not be required to clean any portions of the Premises used for preparation, serving or consumption of food or beverages, training rooms, data processing or reproducing operations,

21 private lavatories or toilets or other special purposes requiring greater or more difficult cleaning work than office areas, and Tenant shall retain Landlord's cleaning staff or Landlord's cleaning contractor, as applicable, to perform such cleaning at Tenant's expense; provided, however, that Landlord shall, to the extent practicable, perform the cleaning services specified on Exhibit H in any training rooms and data processing or reproducing operations, at no additional charge. Landlord agrees that the rate charged to Tenant for any additional cleaning services shall be at Landlord's standard cleaning rates. Landlord's cleaning staff or Landlord's cleaning contractor, as applicable, shall have access to the Premises after 5:00 p.m. and before 8:00 a.m. and shall have the right to use, without charge therefore, all light, power and water in the Premises reasonably required to clean the Premises.

(ix) Freight elevator service shall be provided to the Premises on an equitable basis from 8:00 a.m. to 5:00 p.m. Monday through Friday, and on a reserved basis at all other times upon the payment of Landlord's actual cost for the use of the freight elevator and loading dock, including, without

(b) Landlord may stop or interrupt any Landlord Services, electricity, or other service and may stop or interrupt the use of any Building facilities and systems at such times as may be necessary and for as long as may reasonably be required by reason of accidents, strikes, or the making of repairs, alterations or improvements, or inability to secure a proper supply of fuel, gas, steam, water, electricity, labor or supplies, or by reason of any other cause (other than lack of funds) beyond the reasonable control of Landlord ("FORCE MAJEURE"). Landlord shall have no liability to Tenant by reason of any stoppage or interruption of any Landlord Service, electricity or other service or the use of any Building facilities and systems for any reason. Landlord shall use reasonable diligence (which shall not include incurring overtime charges unless (x) the stoppage or interruption is the result of Landlord's negligence or (y) Tenant requests the same in which event Landlord shall employ contractors or labor at so-called overtime or other premium pay rates and incur any other overtime costs or expenses in making any repairs, and Tenant, if Tenant has requested such service shall pay to Landlord, as additional rent, within thirty (30) days after demand, an amount equal to the difference between the overtime or other premium pay rates and the regular pay rates for such labor together with any other overtime costs or expenses so incurred) to make such repairs as may be required to machinery or equipment within the Project to provide restoration of any Landlord Services and, where the cessation or interruption of such Landlord Services has occurred due to circumstances or conditions beyond the Project boundaries, to cause the same to be restored by diligent application or request to the provider. Notwithstanding anything herein to the contrary, in the event that any stoppage or interruption of services arises solely from Landlord's negligence and as a result thereof Tenant is not able to occupy all or any portion of its Premises for the conduct of its business therein for a period in excess of ten (10) days, Fixed Rent and Additional Charges for the portion of the Premises so affected shall be abated on a day-for-day basis for each day following such 10-day period until such time as Tenant is able to re-occupy the Premises (or portion thereof) for the conduct of its business.

(c) Without limiting any of Landlord's other rights and remedies, if Tenant shall be in material monetary default beyond any applicable notice and/or grace period, Landlord shall not be obligated to furnish to the Premises any service outside of Business Hours on Business Days, and Landlord shall have no liability to Tenant by reason of any failure to provide, or

22 discontinuance of, any such service during the continuance of any such default. For purposes hereof, material monetary default shall mean default in the payment of Fixed Rent, recurring Additional Charges and non-recurring Additional Charges in an amount in excess of $50,000.

(d) "BUSINESS HOURS" means 8:00 a.m. to 6:00 p.m., Monday through Friday. "BUSINESS DAYS" means all days except Saturdays, Sundays and holidays, which shall include (but shall not be limited to) days which are either (i) observed by both the federal and the state governments as legal holidays or (ii) designated as a holiday by the applicable building service union employee service contract or operating engineers contract; provided, that the holidays covered under subsections (i) and (ii) above shall not be duplicative and provided, further, that Lincoln's Birthday shall be deemed to be a Business Day.

~~(e) "RULES AND REGULATIONS" means the rules and regulations attached hereto as EXHIBIT C, as the same may be modified or amended from time to time in~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Landlord's reasonable discretion, provided that Tenant shall have been given reasonable notice of such modifications or amendments. If there is any conflict between the provisions of the Rules and Regulations and the provisions of this Lease, the provisions of this Lease will control. Landlord shall not discriminate against Tenant in the promulgation and enforcement of the Rules and Regulations.

SECTION 4.02. AUDITORIUM AND CAFETERIA. (a) Effective as of January 1, 2002, Tenant shall have the right to utilize the Auditorium no more frequently than once per calendar month, subject to the provisions of this SECTION 4.02.

(b) If Tenant desires to use the Auditorium, Tenant shall give notice to Landlord prior to November 1st of each calendar year of the dates on which Tenant desires to use the Auditorium during the period January 1st through June 30th of the subsequent calendar year and prior to May 1st of each calendar year of the dates on which Tenant desires to use the Auditorium during the period July 1st through December 31st of the current calendar year. Landlord shall grant to Tenant the use of the Auditorium on such requested dates provided the same have not been previously reserved by Landlord or Overlandlord. In addition, Tenant shall have the right to request the use of the Auditorium on other dates upon such prior notice as may be practicable. Landlord shall reasonably consider such requests in light of its and Overlandlord's anticipated use of the Auditorium for other purposes. Landlord represents and warrants that Overlandlord is granted the right by Landlord to use the Auditorium no more than twelve (12) times annually and the charges therefor are the same as those set forth in Section 4.02(c) hereof. Tenant acknowledges that Overlandlord must specify the dates it desires to use the Auditorium on or prior to November 1st of each calendar year and that in the event Tenant and Overlandlord request the same date, Landlord shall give Overlandlord first priority, as is required by the prior agreement of the parties. Landlord shall promptly notify Tenant of the dates that Overlandlord has requested use of the Auditorium upon obtaining the same.

(c) Landlord shall charge Tenant for use of the Auditorium $5,000 per day. The Auditorium may be reserved in full day or half day increments (and the charges therefor adjusted accordingly). The foregoing charge shall be "all-inclusive" and shall cover the costs of Landlord's supplying a customary number of employees to operate the media equipment, cleaning, air conditioning and all other services within the customary scope of operation of the

~~Auditorium. To the extent Tenant may request supplemental services outside of such scope, Tenant shall billed at Landlord's actual cost therefor.~~

(d) All media equipment in the Auditorium shall be operated by Landlord's employees or agents, provided that Tenant's employees shall have the right to be present during the operation of the media equipment to ensure the confidentiality of all of Tenant's presentations and confidential information and Landlord's employees or agents shall reasonably cooperate with Landlord's employees to ensure such confidentiality.

(e) The Cafeteria shall be operated by Landlord and Landlord's agents. For so long as Landlord maintains the Cafeteria in the Building, Tenant will have the right to use the Cafeteria on the same basis as Landlord and Landlord agrees not to discriminate against Tenant in the use and enjoyment of, or access to, the Cafeteria. In the event Landlord does not charge its employees for use of the Cafeteria, Landlord shall change Tenant's employees the standard menu

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document prices for Cafeteria, Landlord agrees to make available for purchase by Tenant's business visitors and employees "charge up" cards on the same basis as Landlord makes such cards available to Landlord's employees and visitors by installing one or more "cash to card" machines outside the Cafeteria. Notwithstanding anything to the contrary in this Section 4.02(e), in no event shall the Cafeteria be made available to any construction workers performing work at the Building on behalf of Tenant or employees of Tenant not occupying portions of the Premises. Landlord may establish from time to time reasonable rules and regulations for the operation of the Cafeteria.

SECTION 4.03. TELECOMMUNICATIONS. Subject to Landlord's reasonable prior approval and, to the extent required by the Overlease, the written approval of Overlandlord, Tenant shall have the right to install, maintain and operate, at Tenant's sole cost and expense, communications equipment (e.g. a satellite dish) in a location on the roof of the Building, which location shall be determined in Landlord's sole discretion. Such communications equipment shall not exceed a footprint of five (5') feet by five (5') feet and shall weigh no more than twenty (20) pounds. Landlord shall have the right to charge Tenant for the use of space on the roof, in an amount not to exceed $1,250.000 per annum, and such charge shall be considered an Additional Charge under this Lease. In addition Landlord shall provide Tenant with sufficient shaft space within the Building which is reasonably required to satisfy Tenant's telecommunication needs to the extent such needs are not based on telecommunications use in excess of that which is customary for commercial tenants of First-Class Office Buildings using premises for general administrative office use.

SECTION 4.04. SECURITY. Landlord will furnish security for the common areas of the Building, the procedures for which and type of security systems and personnel involved shall be determined by Landlord, it being understood and agreed that Landlord shall have no obligation to provide any security services or systems to the Premises or to any area or system that is exclusively used by, or is exclusively available to, Tenant other than existing tap-in points to the Building's main vertical sprinkler riser and existing class "E" life-safety system on each floor of the Premises, at Tenant's expense. Tenant, at Tenant's expense, shall be allowed to interface its electronic security and life safety systems with the Building's systems so that Tenant will be able to trigger the Building's (i) security alarms through its security system (if the existing security system, as modified, is capable of handling the same), and (ii) life safety system

24 alarms through its life safety system (if the existing life safety system, as modified, is capable of handling the same) provided that Tenant's systems (and the interfacing of the same with the Building's systems) are compatible with, and do not materially adversely affect, the Building's systems. Landlord shall provide to Tenant employee access cards for the employees of Tenant located at the Building, the number of which Tenant estimates to be 750, it being understood that no employee shall be permitted access to the Building without a valid and proper access card. The cost of the first 750 access cards shall be borne by Landlord. Tenant shall reimburse Landlord for its actual cost of supplying any future access cards or any replacement cards.

SECTION 4.05. SPECIAL PARKING RESTRICTION. Tenant agrees that, irrespective of any right it may be granted pursuant to Laws to do otherwise, it shall not park any vehicles in the "No Standing" or "No Parking" areas on 24th street between Madison and Park Avenues.

~~LEASEHOLD IMPROVEMENTS; TENANT COVENANTS~~

SECTION 5.01. INITIAL IMPROVEMENTS. (a) On the Possession Date, Tenant shall accept the Premises in its "as is" condition on such date, subject to Landlord's obligation to physically separate the Additional Premises as heretofore provided. Except to the extent expressly provided for herein, all improvements shall be performed by Tenant at Tenant's expense in accordance with the terms of this Article 5.

(b) Tenant may improve the Initial Premises and the Additional Premises for Tenant's initial occupancy in accordance with detailed specifications and working drawings to be prepared by Tenant's architect. The detailed specifications and working drawings are hereinafter referred to as "TENANT'S PLANS", and the work shown by the Tenant's Plans is hereinafter referred to as "TENANT'S INITIAL IMPROVEMENTS".

(c) Tenant shall proceed forthwith to cause Tenant's Plans to be prepared by an architect licensed as such in the State of New York. Tenant's Plans, including structural and mechanical drawings and specifications, shall be prepared at Tenant's sole cost and expense. Tenant shall submit five (5) sets of Tenant's Plans and two (2) CAD discs which shall contain such Tenant's Plans in CAD format to Landlord for Landlord's approval. Landlord agrees to review Tenant's plans and to approve the same or make written exceptions thereto within five (5) Business Days from the date of the submission of the plans. Landlord agrees not to unreasonably withhold or delay its approval of Tenant's Plans, and failure by Landlord to provide the written exceptions within the ten (10) Business Day period aforesaid shall be deemed approval of Tenant's Plans. If Landlord disapproves Tenant's Plans, Tenant shall revise them and re-submit them to Landlord for approval. Any disapproval given by Landlord shall be accompanied by a statement in reasonable detail of the reasons for such disapproval, itemizing those portions of the plans so disapproved. Landlord shall advise Tenant within ten (10) Business Days following receipt of Tenant's revised plans of Landlord's approval or disapproval of the revised plans or portions thereof, and shall set forth its reasons for any such further disapproval in writing and in reasonable detail. If Landlord fails to approve or disapprove such

25 revised plans within such ten (10) Business Day period, Landlord shall be deemed to have approved such revised plans or such portions thereof; PROVIDED that ten (10) days prior to the expiration of such ten (10) Business Day period, Tenant shall send a second notice to Landlord with the phrase "FAILURE TO APPROVE OR DISAPPROVE TENANT'S PLANS, AS REVISED, WITHIN TEN (10) DAYS AFTER THE DATE HEREOF SHALL RESULT IN THE DEEMED APPROVAL OF TENANT'S PLANS, AS REVISED" in bold lettering at the top of such notice. Any dispute regarding the reasonableness of Landlord's withholding of its consent to Tenant's Plans shall be submitted to expedited arbitration pursuant to SECTION 9.19 hereof. Upon approval by Landlord of Tenant's Plans, Tenant shall submit the same to the New York City Department of Buildings for approval and for issuance of a building permit to perform the Improvements. Landlord agrees, at Tenant's cost and expense, to cooperate with Tenant and Tenant's architect and engineer in providing information needed for the preparation of Tenant's Plans, the application for a building permit and all other permits required for the Improvements, and to promptly execute all documents required to be signed by Landlord.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Tenant agrees to hire a reputable general contractor, construction manager or subcontractors and materialmen (hereinafter "CONTRACTOR(S)") to be approved by Landlord such approval not to be unreasonably withheld or delayed, (other than with respect to Contractors performing connections to any Building systems which Contractors shall be those designated by Landlord provided such Contractors shall perform such work at market prices) to perform Tenant's Initial improvements in a good and workmanlike manner in accordance with (x) the approved Tenant's Plans and any material amendments or additions thereto approved by Tenant and Landlord and all municipal authorities having jurisdiction; PROVIDED that Landlord shall not unreasonably withhold or delay its approval of any such material amendments or additions (it being agreed that Landlord's approval shall not be required for any amendments, additions, change orders or modifications to Tenant's Plans costing less than $100,000 unless the same (i) affects the usage or the proper functioning of any of the Building systems or (ii) materially changes the scope of Tenant's Initial Improvements) and further provided, that, with respect to any subsequent amendments, additions, change orders or modifications after Landlord's approval of Tenant's Plans, Landlord shall approve or disapprove of such changes within ten (10) business days of the receipt of such changes (to the extent such approval of Landlord is required pursuant to this SECTION 5.01(d)) from Tenant and (y) all provisions of Laws and any and all permits and other requirements specified by any ordinance, law or public regulation. Tenant shall cause the Contractor(s) to obtain and maintain throughout the work, Workers' Compensation Insurance and New York State Disability Insurance in the amounts required under any applicable Laws and comprehensive general liability insurance, including contractual liability coverage, in an amount of not less than $2 million combined single limit for bodily injury or death for any one occurrence, and for property damage, plus a $10 million umbrella policy; PROVIDED however, that any subcontractor or materialman shall only be required to carry such liability insurance as is being carried by prudent subcontractors or materialman is being employed by Tenant or its Contractors. The liability coverage shall name Landlord and Overlandlord as additional insured parties, and Tenant shall deliver to Landlord proper certificates of insurance confirming the coverages described above prior to commencement of Tenant's Initial Improvements. If Tenant acts as its own General Contractor or Construction Manager, Tenant shall obtain and maintain such insurance. All Contractor(s) shall be members of a union affiliated with the building trades in the city of New York that has jurisdiction over the Building and Tenant's Initial Improvements. Tenant shall pay

Landlord, within thirty (30) days after being billed therefor, the actual out of pocket fees and disbursements paid by Landlord to architects, engineers and other technical advisors, other than the regular staff of Landlord for reviewing Tenant's Plans, provided such fees are commercially reasonable.

SECTION 5.02. ALTERATIONS (a) Tenant shall make no Material Alterations without Landlord's and, to the extent required pursuant to the terms of the Overlease, Overlandlord's prior written approval. "MATERIAL ALTERATION" means an Alteration that (i) is not limited to the interior of the Premises or which affects the exterior (including the appearance) of the Building, (ii) is structural and which in Landlord's sole judgment adversely affects the structural integrity or the strength of the Building either during construction or upon completion, (iii) affects the usage or the proper function of any of the base building systems provided by Landlord, (iv) requires the consent of any Superior Mortgage or Superior Lessor, or (v) requires any governmental permits. In no event shall Tenant have any right to install interior stairwells or a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document kitchen or other food preparation facility (other than pantries). Alterations shall not include (and Landlord's approval shall not be required for) decorations, painting, wall papering, carpeting or the installation or removal of Tenant's Property or any other movable equipment, furniture, furnishings and other personal property that is not affixed to the Premises. Tenant shall be permitted to make improvements, changes or alterations ("MINOR ALTERATIONS") in or to the Premises which are not Material Alterations provided that prior to commensing performance of such Minor Alterations Tenant shall submit to Landlord Alteration Plans therefor for Landlord's review. If Landlord notifies Tenant that Landlord Alteration Plans therefor for Landlord's review. If Landlord notifies Tenant that Landlord objects to such Alteration Plans within five (5) Business Days of receipt of such plans, Tenant shall discontinue the performance of such Minor Alterations until such plans are revised to satisfy Landlord's reasonable objections. Upon completion of any Minor Alterations, Tenant shall submit to Landlord a set of completed as-built drawings reflecting such Minor Alterations.

(b) Tenant, in connection with any Alteration, shall comply with the Rules and Regulations applicable thereto. Tenant shall not proceed with any Material Alteration unless and until Landlord approves Tenant's plans and specifications ("ALTERATION PLANS") therefor in writing. Landlord shall have twenty (20) Business Days from the submission of Tenant's Alteration Plans to approve or disapprove of such plans. If Landlord fails to approve or disapprove Tenant's Alteration Plans during such period, the same shall be deemed approved. If Landlord disapproves of Tenant's Alteration Plans, such disapproval shall be accompanied by a statement in reasonable details of the reasons from such disapproval, itemizing those portions of the plans so disapproved. Landlord shall advise Tenant within thirty (30) days following the receipt of Tenant's revised plans of Landlord's approval or disapproval of the revised Alteration Plans or portions thereof and shall set forth its reasons for any such further disapproval in writing. If Landlord fails to approve or disapprove such revised Alteration Plans within thirty (30) days following the receipt thereof, Landlord shall be deemed to have approved such revised Alteration Plans; PROVIDED that ten (10) days prior to the expiration of such thirty (30) day period, Tenant shall send a second notice to Landlord with the phrase "FAILURE TO APPROVE OR DISAPPROVE ALTERATION PLANS, AS REVISED, WITHIN TEN (10) DAYS AFTER THE DATE HEREOF SHALL RESULT IN THE DEEMED APPROVAL OF ALTERATION PLANS, AS REVISED" in bold lettering at the top of such notice. Any dispute regarding the reasonableness of Landlord's withholding of its approval to Tenant's Alteration Plans may be submitted to expedited arbitration by either party pursuant to SECTION

9.19 of this Lease. Any review or approval by Landlord of Tenant's Alteration Plans is solely for Landlord's benefit, and without any representation or warranty to Tenant with respect to the adequacy, correctness or efficiency thereof, its compliance with Laws or otherwise.

(c) Tenant shall pay to Landlord within thirty (30) days of receipt of Landlord's invoice therefor Landlords reasonable, actual out-of-pocket costs and expenses paid to architects, engineers and other technical advisors by Landlord or any Superior Lessor or Superior Mortgagee for reviewing Tenant's Alteration Plans and inspecting Alterations.

(d) Upon the completion of any Alteration in accordance with the terms of this SECTION 5.02 Tenant shall submit to Landlord (x) proof evidencing the payment in full for said Alteration, (y) written unconditional lien waivers of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document mechanics' liens and other liens on the Project from all contractors performing said Alteration and (z) all submissions required pursuant to Laws.

(e) Tenant shall obtain (and furnish copies to Landlord of) all necessary governmental permits and certificates for the commencement and prosecution of Alterations and for final approval thereof upon completion, and shall cause Alterations to be performed in compliance therewith, and in compliance with all Laws and with the Alteration plans approved (or deemed approved) by Landlord. Alterations shall be diligently performed in a good and workmanlike manner, using new materials and equipment at least equal in quality and class to the then standards for the Building reasonably established by Landlord. Alterations shall be performed by contractors first approved by Landlord (which approval shall not be unreasonably withheld or delayed); PROVIDED that any Alterations which involve performing connections to any Building system shall be performed only by the contractor(s) designated by Landlord, which contractors shall perform such work at market prices. The performance of any Alteration shall not be done in a manner which would violate Landlord's union contracts affecting the project, or create any work stoppage, picketing, labor disruption, disharmony or dispute or any interference with the business of Landlord or any tenant or occupant of the Building. Tenant shall immediately stop the performance of any Alteration if Landlord notifies Tenant that continuing such Alteration would violate Landlord's union contracts affecting the Project, or create any work stoppage, picketing, or labor disruption, disharmony or dispute or any interference with the business of Landlord or any tenant or occupant of the Building.

(f) Throughout the performance of Alterations, Tenant shall carry, or shall cause its contractors to carry, worker's compensation insurance in statutory limits, "all risk" Builders Risk coverage and general liability insurance, with completed operation endorsement, for any occurrence in or about the Project, under which Landlord and its agent and any Superior Lessor and Superior Mortgagee whose name and address have been furnished to Tenant shall be named as parties insured, in such limits as Landlord may reasonably require, with insurers reasonably satisfactory to Landlord. Tenant shall furnish Landlord with evidence that such insurance is in effect at or before the commencement of Alterations and, on request, at reasonable intervals thereafter during the continuance of Alterations.

(g) Should any mechanics' or other liens be filed against any portion of the Project by reason of the acts or omissions of, or because of a claim against, Tenant or anyone claiming under or through Tenant, Tenant shall cause the same to be canceled or discharged of

28 record by bond or otherwise within twenty (20) days after notice from Landlord. If Tenant shall fail to cancel or discharge said lien or liens within said twenty (20) day period. Landlord may cancel or discharge the same and, upon Landlord's demand, Tenant shall reimburse Landlord for all costs incurred in canceling or discharging such liens, together with interest thereon at the Interest Rate from the date incurred by Landlord to the date of payment by Tenant, such reimbursement to be made within twenty (20) days after receipt by Tenant of a written statement from Landlord as to the amount of such costs. Tenant shall indemnify and hold Landlord harmless from and against all costs (including, without limitation, reasonable attorneys' fees and disbursements and costs of suit), losses, liabilities or causes of action arising out of or relating to any Alteration, including, without limitation, any mechanics' or other liens asserted in connection with such Alteration.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) Tenant shall deliver to Landlord, within 60 days after the completion of an Alteration, five (5) sets of "as-built" drawings thereof and two (2) CAD discs which shall contain such "as-built" drawings in CAD format, both of which shall have been prepared by Tenant's architect. During the Term, Tenant shall keep records of Material Alterations including plans and specifications, copies of contracts, invoices, evidence of payment and all other records customarily maintained in the real estate business relating to Alterations and the cost thereof and shall, within 30 days after demand by Landlord, furnish to Landlord copies of such records.

(i) All Alterations to and Fixtures installed by Tenant in the Premises shall be fully paid for by Tenant in cash and shall not be subject to conditional bills of sale, chattel mortgages, or other title retention agreements.

SECTION 5.03. LANDLORD'S AND TENANT'S PROPERTY. (a) All fixtures, equipment, improvements and appurtenances attached to or built into the Premises, whether or not at the expense of Tenant (collectively, "FIXTURES"), shall be and remain a part of the Premises and shall not be removed by Tenant, unless such Fixtures are replaced. All Fixtures constituting Improvements and Betterments shall be the property of Tenant during the Term and, upon expiration or earlier termination of this Lease, shall become the property of Landlord. All Fixtures other than Improvements and Betterments shall, upon installation, be the property of Landlord. "IMPROVEMENTS AND BETTERMENTS" means (i) all Fixtures, if any, installed at the expense of Tenant, whether installed by Tenant or by Landlord (I.E., excluding any Fixtures paid for by Landlord directly or by way of an allowance) and (ii) all carpeting in the Premises.

(b) All movable partitions, business and trade fixtures, machinery and equipment, and all furniture, furnishings and other articles of movable personal property owned by Tenant and located in the Premises (collectively, "TENANT'S PROPERTY") shall be and shall remain the property of Tenant and may be removed by Tenant at any time during the Term; PROVIDED, that if any Tenant's Property is removed, Tenant shall repair any damage to the Premises or to the Building resulting from the installation and/or removal thereof.

(c) At or before the Expiration Date or any earlier termination of this Lease, Tenant at Tenant's expense, shall remove Tenant's Property from the Premises (except such items thereof as Landlord shall have expressly permitted to remain, which shall become the property of Landlord), and Tenant shall repair any damage to the Premises or the Building resulting from any installation and/or removal of Tenant's Property. Any items of Tenant's

Property which remain in the Premises after the Expiration Date or any earlier termination of this Lease, may, at the option of Landlord, be deemed to have been abandoned, and may be retained by Landlord as its property or disposed of by Landlord, without accountability, in such manner as Landlord shall determine, at Tenant's expense.

(d) Landlord shall advise Tenant at the time it approves Tenant's plans therefore whether Landlord will require Tenant, notwithstanding SECTION 5.03(a), to remove all or any Fixtures, Improvements and Betterments, including without being limited to, kitchens, vaults, safes, raised flooring and interior stairwells; PROVIDED, however, that Tenant shall not be required to remove any improvements that are solely decorative work or constitute a standard office

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document installation. If Landlord shall have so advised Tenant, then Tenant, at Tenant's expense, prior to the Expiration Date or, in the case of an earlier termination of this Lease, within 15 days after the giving of such notice by Landlord shall remove the same from the Premises, shall repair and restore the Premises to the condition existing prior to installation thereof and shall repair any damage to the Premises or to the Building due to such removal. Notwithstanding the foregoing, Tenant shall not be required to remove any Fixtures, Betterments or Improvements located, as of the date hereof, on or in the Upper Floors of the Premises.

SECTION 5.04. ACCESS AND CHANGES TO BUILDING. (a) Subject to the terms of subsection (d) below, Landlord reserves the right, at any time, to make changes in or to the Project as Landlord may deem necessary or desirable, and Landlord shall have no liability to Tenant therefor, provided that after such change access to the Premises is reasonably equivalent to that which existed prior to such change, it being agreed that the "reasonably equivalent" standard shall not apply if such changes are made in order to comply with Laws, does not affect the nature of the Project and does not eliminate any of the specific benefits granted to Tenant under this Lease. Landlord may install and maintain pipes, fans, ducts, wires and conduits within or through the walls, floors or ceilings of the Premises; PROVIDED, that if there are no dropped ceilings in any of the floors of the Premises, such pipes, fans, ducts, wires and conduits shall be installed in a manner consistent with any other exposed elements. In exercising its rights under this SECTION 5.04, Landlord shall use reasonable efforts to (1) minimize any interference with Tenant's use of the Premises for the ordinary conduct of Tenant's business and (2) to not reduce the size of the Premises except to a de minimis extent. In the event that the floor space in any floor in the Premises is reduced by more than 300 square feet and the change which caused such reduction did not benefit Tenant, the Fixed Rent and Additional Charges for such floor shall be proportionately reduced. Tenant shall not have any easement or other right in or to the use of any door or any passage or any concourse or any plaza connecting the Building with any subway or any other building or to any public conveniences, and the use of such doors, passages, concourses, plazas and conveniences may, without notice to Tenant, be regulated or discontinued at any time by Landlord.

(b) Except for the space within the inside surfaces of all walls, hung ceilings, floors, windows and doors bounding the Premises, all of the Building, including, without limitation, exterior Building walls, core corridor walls and doors and any core corridor entrance, any terraces or roofs adjacent to the Premises, and any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, and the use thereof, as well as access thereto through the Premises, are

~~30 reserved to Landlord and are not part of the Premises. Landlord reserves the right to name the Building to change the name or address of the Building at any time and from time to time.~~

(c) Landlord shall have no liability to Tenant if at any time any windows of the Premises are either temporarily darkened or obstructed by reason of any repairs, improvements, maintenance and/or cleaning in or about the Building (or permanently darkened or obstructed if required by Law) or covered by any translucent material for the purpose of energy conservation, or if any part of the Building, other than the Premises, is temporarily or permanently closed or inoperable; PROVIDED, that if the same adversely affects Tenant's use

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and occupancy of the Premises, Landlord shall only have the right to do so if required by Law. If any time the windows of the Premises are temporarily closed, darkened or bricked-up, Landlord shall perform such repairs, maintenance, alterations or improvements with reasonable diligence as are reasonably required to restore the same and, unless such condition has been imposed pursuant to Law, Landlord shall use reasonable efforts to minimize the period of time during which such windows are temporarily closed, darkened or bricked up.

(d) Landlord and persons authorized by Landlord shall have the right, at reasonable times and upon reasonable advance notice to Tenant (except in an emergency), to enter the Premises (together with any necessary materials and/or equipment), to inspect or perform such work as Landlord may reasonably deem necessary or to allow Overlandlord to exhibit the Premises to prospective purchasers or others and, during the last 24 months of the Term, to exhibit to prospective tenants, or for any other purpose as Landlord may deem necessary or desirable. Landlord shall use reasonable efforts not to interfere with Tenant's use and occupancy of the Premises in connection with the exercise of Landlord's rights under this SECTION 5.04(d). To the extent that Tenant has designated portions of the Premises as "secured areas," except in cases of emergency, Landlord shall not enter into such areas unless accompanied by an employee of Tenant. Landlord shall have no liability to Tenant by reason of any such entry. Landlord shall not be required to make any improvements or repairs of any kind or character to the Premises during the Term, except as otherwise set forth in this Lease. Any work performed or installations made pursuant to this Section shall be made with reasonable diligence, and Landlord shall use due diligence to repair any damage to the Premises or Tenant's Property as a result of such work or installations.

SECTION 5.05. REPAIRS. (a) Tenant shall keep the Premises (including, without limitation, all Fixtures) in good condition and, upon expiration or earlier termination of the Term, shall, subject to the terms and conditions of SECTION 5.03(d) herein, surrender the same to Landlord in the same condition as when first occupied, reasonable wear and tear excepted. Tenant's obligation shall include, without limitation, the obligation to repair all damage caused by Tenant, its agents, employees, invitees and licensees to the equipment and other installations in the Premises or anywhere in the Building. Any maintenance, repair or replacement to the windows (including, without limitation, any solar film attached thereto), the Building systems, the Building's structural components or any areas outside the Premises and which is Tenant's obligation to perform shall be performed by Landlord at Tenant's expense (which expense shall be equal to Landlord's actual out-of-pocket costs, which shall be commercially reasonable). Tenant shall not commit or allow to be committed any waste or damage to any portion of the Premises or the Building.

(b) Landlord shall at all times operate and maintain the Building in accordance with the standards that are customarily followed in the operation and maintenance of First-Class Office Buildings (as defined in the Overlease)(the "STANDARD").

(c) Landlord shall use reasonable efforts to minimize interference with Tenant's use and occupancy of the Premises in making any repairs, alterations, additions or improvements to the Building or in the cleaning and maintenance thereof; PROVIDED, HOWEVER, that Landlord shall have no obligation to employ contractors or labor at so-called overtime or other premium pay rates or to incur any other overtime costs or expenses whatsoever, except that Landlord, at its expense shall employ contractors or labor at so-called overtime

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or other premium pay rates if necessary to make any repair required to be made by it hereunder to remedy any condition that either (i) results in a denial of access to the Premises and/or (ii) except in the case of a fire or other casualty, precludes Tenant from conducting its business from more than thirty percent (30%) of the Premises. In all other cases, at Tenant's request, Landlord shall employ contractors or labor at so-called overtime or other premium pay rates and incur any other overtime costs or expenses in making any repairs, alterations, additions or improvements to the extent it is practicable to do so, and Tenant shall pay to Landlord, as additional rent, within twenty (20) days after demand, an amount equal to the difference between the overtime or other premium pay and straight time pay.

SECTION 5.06. COMPLIANCE WITH LAWS/COMPLIANCE LANGUAGE. (a) Tenant shall comply with all laws, ordinances, rules, orders and regulations (present, future, ordinary, extraordinary, foreseen or unforeseen) of any governmental, public or quasi-public authority and of the New York Board of Underwriters, the New York Fire Insurance Rating Organization and any other entity performing similar functions, at any time duly in force (collectively "LAWS"), attributable to any work, installation, occupancy, particular use or particular manner of use (as opposed to mere "office" use) by Tenant of the Premises or any part thereof. Nothing contained in this SECTION 5.06 shall require Tenant to make any structural changes unless the same are necessitated by reason of Tenant's particular manner of use of the Premises or the particular use by Tenant of the Premises for purposes other than normal and customary ordinary office purposes. Tenant shall procure and maintain all licenses and permits required for its business. Nothing contained herein shall be deemed or be construed as a submission by Tenant to the application to itself of any such laws.

(b) Except to the extent the same is Tenant's responsibility pursuant to SECTION 5.06(a) above or elsewhere in this Lease, Landlord shall comply with all Laws in effect as of the Possession Date applicable to the common areas of the Building generally made available to tenants of the Building, but only if Tenant's use of the Premises shall be materially and adversely affected by non-compliance therewith, subject to Landlord's right to contest the applicability or legality of such Laws.

(c) Tenant, at its sole cost and expense and after reasonable, written notice to Landlord, may contest by appropriate proceedings prosecuted diligently and in good faith, the legality or applicability of any Laws affecting the Premises and with which it is obligated to comply pursuant to SUBSECTION (a) above, provided that (a) Landlord shall not be subject to imprisonment or to prosecution for a crime, nor shall the Project or any part there of be subject to being condemned or vacated, nor shall the certificate of occupancy for the Premises or the

Building be suspended or threatened to be suspended by reason of non-compliance or by reason of such contest; (b) such non-compliance or contest shall not constitute or result in a violation (either with the giving of notice or the passage of time or both) of the terms of any Superior Mortgage or Superior Lease; (c) Tenant shall indemnify Landlord against the cost of such compliance and liability resulting from or incurred in connection with such contest or non-compliance, and (d) Tenant shall keep Landlord regularly advised as to the status of such proceedings. Landlord agrees that it shall reasonably cooperate with Tenant's efforts to contest the validity or applicability to the Premises of any Laws; PROVIDED that (i) the provisions of clauses (a) through (d) of this Section shall be complied with and (ii) Landlord shall not incur any expense or

(d) Tenant shall not use or dispose of any Hazardous Materials in the Premises. "HAZARDOUS MATERIALS," as used herein, shall mean any flammables, explosives, radioactive materials, hazardous wastes, hazardous and toxic substances or related materials, as defined by any Federal, state or local environmental law, ordinance, rule or regulation, including, without limitation, the Comprehensive Environmental Response Liability Act, as amended, the Resource Conservation and Recovery Act, as amended, and in the regulations adopted and publications promulgated pursuant to each of the foregoing, except that the term "Hazardous Materials" shall not include any such materials in amounts typically found in office buildings of a similar age and character as the Buildings, including asbestos and asbestos containing materials. Landlord shall enforce the obligations of Overlandlord with respect to asbestos removal in the Premises pursuant to Section 28.10 of the Overlease.

SECTION 5.07. TENANT ADVERTISING. Tenant shall not use, and shall cause each of its Affiliates not to use, the name or likeness of the Building or the Project in any advertising (by whatever medium) without Landlord's consent, but shall be permitted to use the address of the Building for such purposes.

SECTION 5.08 RIGHT TO PERFORM TENANT COVENANTS. If Tenant fails to perform any of its obligations under this Lease, Landlord, any Superior Lessor or any Superior Mortgagee (each, a "CURING PARTY") may perform the same at the expense of Tenant (a) immediately and without notice in the case of emergency or in case such failure unreasonably interferes with the use of space by any other tenant in the Building or adversely affects the efficient operation of the Building or may result in a violation of any Law or in a cancellation of any insurance policy maintained by Landlord and (b) in any other case if such failure continues beyond any applicable grace period. If a Curing Party performs any of Tenant's obligations under this Lease, Tenant shall pay to Landlord (as Additional Charges) the costs thereof, together with interest at the Interest Rate from the date incurred by the Curing Party until paid by Tenant, within twenty (20) days after receipt by Tenant of a statement as to the amounts of such costs. If the Curing Party effects such cure by bonding any lien which Tenant is required to bond or otherwise discharge, Tenant shall obtain and substitute a bond for the Curing Party's bond and shall reimburse the Curing Party for the cost of the Curing Party's bond. "INTEREST RATE" means the lesser of (i) the Base Rate plus 2% per annum or (ii) the maximum rate permitted by law.

~~33 ARTICLE 6~~

~~ASSIGNMENT AND SUBLETTING~~

SECTION 6.01. ASSIGNMENT; ETC. (a) Subject to SECTION 6.02, and except as otherwise provided in this Article, neither this Lease nor the term and estate hereby granted, nor any part hereof or thereof, shall be assigned, mortgaged, pledged, encumbered or otherwise transferred voluntarily, involuntarily, by operation of law or otherwise, and neither the Premises, nor any part thereof, shall be subleased, be licensed, be used or occupied by any person or entity other than Tenant or be encumbered in any manner by reason of any act or omission on the part of Tenant, and no rents or other sums receivable by Tenant under any sublease of all or any part of the Premises shall be assigned or otherwise encumbered, without the prior consent of Landlord. The dissolution or direct or indirect transfer of control of Tenant (however accomplished including, by way of example, the admission of new partners or

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document members or withdrawal of existing partners or members, or transfers of interests in distributions of profits or losses of Tenant, issuance of additional stock, redemption of stock, stock voting agreement, or change in classes of stock) shall be deemed an assignment of this Lease regardless of whether the transfer is made by one or more transactions occurring over a twenty-four (24) month period (provided that if any such transactions made subsequent to such twenty-four (24) month period are made pursuant to a plan designed to effect such transfer over an extended period of time, the same shall be deemed to have been made during the twenty-four (24) month period), or whether one or more persons or entities hold the controlling interest prior to the transfer or afterwards. An agreement under which another person or entity becomes responsible for all or a portion of Tenant's obligations under this Lease shall be deemed an assignment of this Lease or a sublease, as the case may be. Except as provided in SECTION 6.02(d) herein, no assignment or other transfer of this Lease and the term and estate hereby granted, and no subletting of all or any portion of the Premises shall relieve Tenant of its liability under this Lease or of the obligation to obtain Landlord's prior consent to any further assignment, other transfer or subletting. Any attempt to assign this Lease or sublet all or any portion of the Premises in violation of this ARTICLE 6 shall be null and void. If Tenant shall become a publicly held entity, the sale or transfer of shares of Tenant shall not require the consent of Landlord, shall be permitted under this Lease and shall not be deemed a transfer or an assignment hereunder if such transfer or sale is effected through the "over-the-counter market" or through any recognized stock exchange.

(b) Notwithstanding SECTION 6.01(a), without the consent of Landlord and without Tenant being subject to the requirements of the Overlease and SECTIONS 6.02, 6.03 or 6.05 of this Lease, this Lease may be assigned to (x) if Tenant named herein is the assignor, (i) an entity with which Tenant is merged, (ii) an entity which succeeds to Tenant, or (iii) a newly created entity, provided that any of the foregoing have been formed or created by the State of New York and/or New Jersey for the purposes of performing functions similar to, or ancillary with, those performed by Tenant and such entity intends to continue to perform one or more of the operations which the Tenant is permitted to perform or (y) if this Lease shall have been assigned to a "private" entity (i) to an entity created by merger, reorganization or recapitalization of or with Tenant or (ii) a purchaser of all or substantially all of Tenant's assets, stock or interests

(such entity or purchaser being referred to herein as a "SUCCESSOR ENTITY"); PROVIDED that (A) Landlord shall have received a notice of such assignment from Tenant, (B) the assignee assumes by written instrument satisfactory to Landlord all of Tenant's obligations under this Lease, (C) such assignment is for a valid business purpose and not to avoid any obligations under this Lease, and (D) the assignee is a reputable entity of good character and shall have, immediately after giving effect to such assignment, an aggregate net worth reasonably acceptable to Landlord.

(c) Notwithstanding SECTION 6.01 (a), without the consent of Landlord and without, Tenant being subject to the requirements of SECTION 6.02, 6.03 or 6.05 of this Lease, Tenant may, subject to the requirements of the Overlease, assign this Lease or sublet all or any part of the Premises (x) if Tenant named herein is the assignor or sublessor, to a corporation which is wholly owned by the Tenant and which has been or may be created pursuant to the laws of the State of New York or New Jersey to perform one or more operations which the Tenant is permitted to perform pursuant to such laws or (y) if this Lease shall

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document have been assigned to a "private" entity, to an Affiliate of Tenant; PROVIDED, that (x) Landlord shall have received a notice of such assignment or sublease from Tenant; and (y) in the case of any such assignment, (A) the assignment is for a valid business purpose and not to avoid any obligations under this Lease, and (B) the assignee assumes by written instrument satisfactory to Landlord all of Tenant's obligations under this Lease. "AFFILIATE" means, as to any designated person or entity, any other person or entity which controls or is controlled by, such designated person or entity. "CONTROL" (and with correlative meaning, "controlled by" and "under common control with") means ownership and control by Tenant, directly or indirectly, of 51% or more of the stock, partnership interests or other beneficial ownership interests of the entity in question and the power to direct the management and affairs of such entity.

SECTION 6.02. LANDLORD'S OPTION RIGHT. (a) If Tenant desires to assign this Lease or sublet all or a portion of the Premises (other than in accordance with SECTIONS 6.01 (b) OR 6.01 (c)), Tenant shall give to Landlord notice ("TENANT'S OFFICER NOTICE") thereof, specifying (i) in the case of a proposed subletting, the location of the space to be sublet and the proposed terms of the subletting of such space, (ii) (A) in the case of a proposed assignment, Tenant's good faith offer of the consideration Tenant desires to receive or pay for such assignment or (B) in the case of a proposed subletting, Tenant's good faith offer of the fixed annual rent which Tenant desires to receive for such proposed subletting (assuming that a subtenant will pay for Taxes, expense escalations and electricity as described in ARTICLE 3 herein in the same manner, and utilizing the same base year or base amount, as Tenant pays for such amounts under this Lease) and (iii) the proposed assignment or sublease commencement date.

(b) Tenant's Offer Notice shall be deemed an offer from Tenant to Landlord whereby Landlord (or Landlord's designee) may, at Landlord's option, (i) sublease such space from Tenant or (ii) have this Lease assigned to it or terminate this Lease, provided that if the proposed transactions is (x) an assignment or (y) a sublease of all or substantially all of the Premises for all or substantially all of the remainder of the Term or (z) a sublease of a portion of the Premises which, when aggregated with other subleases then in effect, covers all or substantially all of the Premises for all or substantially all of the remainder of the Term, Landlord's option shall be limited to having this Lease assigned to it or to terminating this Lease (any such space being referred to as the "RECAPTURE SPACE"). Said option may be exercised by

~~Landlord by notice to Tenant within 60 days after a Tenant's Offer Notice, together with all information required pursuant to SECTION 6.02(a), has been given by Tenant to Landlord.~~

(c) If Landlord exercises its option under SECTION 6.02(b)(ii) to terminate this Lease, then this Lease shall terminate on the proposed assignment or sublease commencement date specified in the applicable Tenant's Offer Notice, all Rent shall be paid and appointed to such date and the date of such termination shall be deemed the Expiration Date for all purposes of this Lease.

(d) If Landlord exercises its option under SECTION 6.02(b)(ii) to have this Lease assigned to it (or its designee), then Tenant shall assign this Lease to Landlord (or Landlord's designee) by an assignment in form and substance reasonably satisfactory to Landlord, effective on the proposed assignment or sublease commencement date specified in the applicable Tenant's Offer Notice. If Landlord exercises its option to take an assignment of this Lease as it relates

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to the Recapture Space, Tenant shall be released from Tenant's obligations under this Lease arising from and after the date of such assignment. Tenant shall not be entitled to consideration or payment from Landlord (or Landlord's designee) in connection with any such assignment. If the Tenant's Offer Notice provides that Tenant will pay any consideration or grant any concessions in connection with the proposed assignment, then Tenant shall pay such consideration and/or grant any such concessions to Landlord (or Landlord's designee) on the date Tenant assigns this Lease to Landlord (or Landlord's designee).

~~(e) [INTENTIONALLY OMITTED]~~

(f) If Landlord exercises its option under SECTION 6.02(b)(i) to sublet the Premises, such sublease to Landlord or its designee (as subtenant) shall be in form and substance reasonably satisfactory to Landlord at the lower of (i) the rental rate per rentable square foot of Fixed Rent and Additional Charges then payable pursuant to this Lease or (ii) the rental set forth in the applicable Tenant's Offer Notice with respect to such sublet space, and shall be for the term set forth in the applicable Tenant's Offer Notice, and:

(A) shall be subject to all of the terms and conditions of this Lease except such as are irrelevant or inapplicable, and except as otherwise expressly set forth to the contrary in this SECTION 6.02(f).

(B) shall be upon the same terms and conditions as those contained in the applicable Tenant's Offer Notice and otherwise on the terms and conditions of this Lease, except such as are irrelevant or inapplicable, and except as otherwise expressly set forth to the contrary in this SECTION 6.02(f).

(C) shall permit the sublease, without Tenant's consent, freely to assign such sublease or any interest therein or to sublet all or any part of the space covered by such sublease and to make any and all alterations and improvements in the space covered by such sublease, provided that Tenant shall not be responsible for removing such alterations or improvements at the expiration of the Term, unless the Offer Notice reasonably restricts the making of any such alterations or improvements in which event Landlord or its designee (as

~~36 subtenant) shall also be reasonably restricted in the making of any such alterations or improvements;~~

(D) shall provide that any assignee or further subtenant of Landlord or its designee may, at the election of Landlord, make alterations, decorations and installations in such space or any part thereof, any or all of which may be removed, in whole or in part, by such assignee or subtenant, at its option, prior to or upon the expiration or other termination of such sublease, provided that such assignee or subtenant, at its expense, shall repair any damage caused by such removal, unless the Offer Notice reasonably restricts the making of any such alterations or improvements in which event Landlord shall impose the same restrictions on any assignee or further subtenant of Landlord or its designee; and

(E) shall provide that (1) the parties to such sublease expressly negate any intention that any estate created under such sublease be merged with any other estate held by either of said parties, (2) any assignment or subletting by Landlord or its designee (as the subtenant) may be for any purpose or purposes that Landlord shall deem appropriate, (3) Landlord, at Tenant's

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document expense, may make such alterations as may be required or deemed necessary by Landlord to demise separately the subleased space and to comply with any Laws relating to such demise, unless the Offer Notice reasonably restricts the making of any alterations or improvements in which event Landlord shall only make alterations or improvements to demise separately such subleased space if Landlord shall restore, or shall cause to be restored, the subleased space to the same condition in which such subleased space was delivered from Tenant to Landlord, and (4) at the expiration of the term of such sublease, Tenant shall accept the space covered by such sublease in its then existing condition, subject to the obligations of the sublessee to make such repairs thereto as may be necessary to preserve such space in good order and condition.

(g) In the case of any proposed sublease requiring Landlord's consent under this Article 6, Tenant shall not sublet any space to a third party at a rental which is less (on a per rentable square foot basis) that 95% of the rental (on a per rentable square foot basis) specified in Tenant's Offer Notice with respect to such space, without complying once again with all of the provisions of this SECTION 6.02 and re-offering such space to Landlord at such lower rental. In the case of a proposed assignment, Tenant shall not assign this Lease to a third party where Tenant pays consideration greater than 5% more or grants a greater concession to such third party for such assignment than the consideration offered to be paid or concession offered to be granted to Landlord in Tenant's Offer Notice without complying once again with all of the provisions of this SECTION 6.02 and re-offering to assign this Lease to Landlord and paying such consideration or grant such concession to Landlord.

(h) If Landlord fails to respond to Tenant's Offer Notice within 60 days after the receipt of such Tenant's Offer Notice, together with all information required pursuant to SECTION 6.02(a), has been given by Tenant to Landlord, Landlord shall be deemed to have declined Tenant's offer, PROVIDED, that 15 days prior to the expiration of such 60-day period, Tenant shall send a second notice to Landlord with the phrase "FAILURE TO RESPOND ON OR BEFORE THE 15TH DAY AFTER THE GIVING OF THIS NOTICE SHALL BE DEEMED TO BE A WAIVER OF LANDLORD'S OPTION RIGHT UNDER SECTION 5.02 OF THE LEASE" in bold lettering at the top of such notice.

SECTION 6.03. ASSIGNMENT AND SUBLETTING PROCEDURES. (a) If Tenant delivers to Landlord a Tenant's Offer Notice with respect to any proposed assignment of this Lease or subletting of all of the Premises and Landlord does not timely exercise any of its options under SECTION 6.02, and Tenant thereafter desires to assign this Lease or sublet the Premises as specified in Tenant's Offer Notice, Tenant shall notify Landlord (a "TRANSFER NOTICE") of such desire, which notice shall be accompanied by (i) a statement of the material terms and conditions of the proposed subletting or assignment, as the case may be, the effective date of which shall be at least 30 days after the giving of the Transfer Notice, (ii) a statement setting forth in reasonable detail the identity of the proposed use of the Premises, (iii) current financial information with respect to the proposed assignee or subtenant, including, without limitation, its most recent financial statement or other evidence of proposed entity's creditworthiness and (iv) such other information as Landlord may reasonably request (provided such request is made within fifteen (15) days of Landlord's receipt of the Transfer Notice), and Landlord's consent to the proposed assignment or sublease shall not be unreasonably withheld, provided that:

~~(A) Such Transfer Notice shall be delivered to Landlord within~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document three months after the delivery to Landlord of the applicable Tenant's Offer Notice.

(B) In Landlord's reasonable judgment the proposed assignee or subtenant will use the Premises in a manner that (x) is in keeping with the Standard and (y) is limited to the use expressly permitted under the Lease.

(C) The proposed assignee or subtenant is, in Landlord's judgment, a reputable person or entity of good character and, in Landlord's reasonable judgment, has sufficient financial worth considering the responsibility involved.

~~(D) Neither the proposed assignee or sublessee, nor any Affiliate of such assignee or sublessee, is then an occupant of any part of the Building.~~

~~(E) The proposed assignee or sublessee is not a person with whom Landlord is then negotiating or has within the prior 3 months negotiated to lease space in the Building.~~

~~(F) The form of the proposed sublease shall be reasonably satisfactory to Landlord and shall comply with the applicable provisions of this ARTICLE 6.~~

~~(G) There shall be no more than 4 subtenants (excluding Affiliates) in the Premises at any one time and no subtenant shall sublet less than 25,000 rentable square feet.~~

(H) Tenant shall reimburse Landlord within twenty (20) days of demand for any reasonable out-of-pocket costs that may be incurred by Landlord in connection with said assignment or sublease, including, without limitation, the costs of making investigations as to the acceptability of the proposed assignee or subtenant, and reasonable legal costs incurred in connection with the granting of any requested consent.

~~(I) With respect to any subletting or assignment entered into prior to the second anniversary of the Commencement Date, the proposed sublessee or assignee does not~~

~~38 conduct or operate any business which is in direct competition with the principal lines of business of Landlord.~~

~~(J) The subletting or assignment complies with all of the terms and provisions of the Overlease.~~

(b) If Landlord's consent to a proposed assignment or sublease is required under this Article 6 and Landlord so consents (or is deemed to have consented) and Tenant thereafter fails to execute and deliver the assignment or sublease to which Landlord consented within 45 days (or if such request is made pursuant to subsection (d) below, within 60 days) after the giving of such consent, then Tenant shall again comply with this ARTICLE 6 before assigning this Lease or subletting all or part of the Premises.

(c) If Landlord fails to respond to a Transfer Notice within 30 days (or if such request is made pursuant to subsection (d) below, within 60 days) after such Transfer Notice, together with all information required pursuant to SECTION 6.03(a) has been given by Tenant to Landlord, Landlord shall be deemed

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to have consented to such proposed assignment or subletting; PROVIDED, that 15 days prior to the expiration of such 30 day period (or if such request is made pursuant to subsection (d) below, within 60 days), Tenant shall send a second notice to Landlord with the phrase "FAILURE TO RESPOND WITHIN TEN (10) DAYS AFTER THE DATE HEREOF SHALL BE DEEMED CONSENT TO THE ASSIGNMENT OR SUBLETTING PROPOSED IN TENANT'S TRANSFER NOTICE" in bold lettering at the top of such notice.

(d) If Tenant delivers to Landlord a Transfer Notice, together with all information required under SECTION 6.03(a) above, at the same time that Tenant delivers Tenant's Offer Notice, together with all information required under SECTION 6.02(a) above, then Landlord shall either (i) exercise its options under SECTION 6.02 or (ii) approve or deny Tenant's request to assign this Lease or sublet the Premises under the provisions of SECTION 6.03 within 60 days after Tenant's Offer Notice, together with all information required pursuant to SECTION 6.02 (a), and the Transfer Notice, together with all information required pursuant to SECTION 6.03(a), have been given by Tenant to Landlord. If Landlord fails to respond within 60 days after receiving Tenant's Offer Notice, together with all information required pursuant to SECTION 6.02(a) and the Transfer Notice, together with all information required pursuant to SECTION 6.03(b), Landlord shall be deemed to have consented to such proposed assignment or subletting; PROVIDED, that 15 days prior to the expiration of such 60-day period, Tenant shall send a second notice to Landlord with the phrase "FAILURE TO RESPOND SHALL BE DEEMED TO BE A WAIVER OF LANDLORD'S OPTION RIGHT UNDER SECTION 5.02 OF THE LEASE AND CONSENT TO THE ASSIGNMENT OR SUBLETTING PROPOSED IN TENANT'S TRANSFER NOTICE (SUCH TENANT'S OFFER NOTICE AND TRANSFER NOTICE HAVING BEEN DELIVERED SIMULTANEOUSLY)" in bold lettering at the top of such notice.

SECTION 6.04. GENERAL PROVISIONS. (a) If this Lease is assigned, whether or not in violation of this Lease, Landlord may collect rent from the assignee. If the Premises or any part thereof are sublet or occupied by anybody other than Tenant, whether or not in violation of this Lease, Landlord may, after default by Tenant, and expiration of Tenant's time to cure such

39 default, collect rent from the subtenant or occupant. In either event, Landlord may apply the net amount collected against Rent, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any of the provisions of SECTION 6.01(a), or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the performance of Tenant's obligations under this Lease.

(b) No assignment or transfer shall be effective until the assignee delivers to Landlord (i) evidence that the assignee, as Tenant hereunder, has complied with the requirements of SECTIONS 8.02 and 8.03, and (ii) an agreement in form and substance reasonably satisfactory to Landlord whereby the assignee assumes Tenant's obligations under this Lease.

(c) Notwithstanding any assignment or transfer, whether or not in violation of this Lease, and notwithstanding the acceptance of any Rent by Landlord from as assignee, transferee, or any other party, other than with respect to any assignment or sublease to Landlord or its designee pursuant to Section 6.02, the original named Tenant and each successor Tenant shall remain fully liable for the payment of the Rent and the performance of all the Tenant's other obligations under this Lease. The joint and several liability of Tenant and any immediate or remote successor in interest of Tenant shall not be

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document discharged, released or impaired in any respect by any agreement made by Landlord extending the time to perform, or otherwise modifying, any of the obligations of Tenant under this Lease, or by any waiver or failure of Landlord to enforce any of the obligations of Tenant under this Lease.

~~(d) Each subletting by Tenant shall be subject to the following:~~

~~(i) No subletting shall be for a term (including any renewal or extension options contained in the sublease) ending later than one day prior to the Expiration Date.~~

(ii) No sublease shall be valid, and no subtenant shall take possession of the Premises or any part thereof, until there has been delivered to Landlord, both (A) an executed counterpart of such sublease, and (B) a certificate of insurance evidencing that (x) Landlord and Overlandlord are additional insureds under the insurance policies required to be maintained by occupants of the Premises pursuant to SECTION 8.02, and (y) there is in full force and effect, the insurance otherwise required by SECTION 8.02.

(iii) Each sublease shall provide that it is subject and subordinate to this Lease, and that in the event of termination, reentry or dispossess by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublessor, under such sublease, and such subtenant shall, at Landlord's option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be liable for, subject to or bound by any item of the type that a Successor Landlord is not so liable for, subject to or bound by in the case of an attornment by Tenant to a Successor Landlord under SECTION 7.01(a).

(e) Each sublease shall provide that the subtenant may not assign its rights thereunder or further sublet the space demised under the sublease, in whole or in part, without Landlord's consent, which shall not be unreasonably withheld and shall be granted or denied in

40 accordance with the standards applicable to an assignment or subletting by Tenant which requires Landlord's consent provided that any sublease requiring Landlord's consent hereunder may only be further sublet one time without complying with all of the terms and conditions of this ARTICLE 6, including, without limitation, SECTION 6.02 and SECTION 6.05, which for purposes of this SECTION 6.04(e) shall be deemed to be appropriately modified to take into account that the transaction in question is an assignment of the sublease or a further subletting of the space demised under the sublease, as the case may be.

(f) Tenant shall not publicly advertise the availability of the Premises or any portion thereof as sublet space or by way of an assignment of this Lease, without first obtaining Landlord's consent, which consent shall not be unreasonably withheld or delayed provided that Tenant shall in no event advertise the rental rate or any description thereof.

SECTION 6.05. ASSIGNMENT AND SUBLEASE PROFITS. (a) If the aggregate of the amounts payable as Fixed Rent and as Additional Charges on account of Taxes and electricity by a subtenant under a sublease of the Premises and the amount of any Other Sublease Consideration payable to Tenant by such subtenant, whether received in a lump-sum payment or otherwise, shall be in excess of Tenant's Basic Cost therefor at that time then, promptly after the collection thereof, Tenant shall pay to Landlord in monthly installments as and when collected, as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Additional Charges, 50% of such excess. Tenant shall deliver to Landlord within 60 days after the end of each calendar year and within 60 days after the expiration or earlier termination of this Lease a statement specifying each sublease in effect during such calendar year or partial calendar year, the rentable area demised thereby, the term thereof and a computation in reasonable detail showing the calculation of the amounts paid and payable by the subtenant to Tenant, and by Tenant to Landlord, with respect to such sublease for the period covered by such statement. "TENANT'S BASIC COST" for sublet space at any time means the sum of (i) the portion of the Fixed Rent and Tax Payments which is attributable to the sublet space, plus (ii) the amount payable by Tenant on account of electricity in respect of the sublet space, plus (iii) the amount of any costs reasonably incurred by Tenant in making changes in the layout and finish of the sublet space for the subtenant amortized on a straight-line basis over the term of the sublease plus (iv) the amount of any reasonable brokerage commissions and reasonable legal fees (including those of Tenant's in-house counsel) paid by Tenant in connection with the sublease amortized on a straight-line basis over the term of the sublease. "OTHER SUBLEASE CONSIDERATION" means all sums paid for the furnishing of services by Tenant and the sale or rental of Tenant's fixtures, leasehold improvements, equipment, furniture or other personal property less, in the case of the sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant's federal income tax returns.

(b) Upon any assignment of this Lease, Tenant shall pay to Landlord 50% of the Assignment Consideration received by Tenant for such assignment, after deducting therefrom customary and reasonable closing expenses which shall include commissions and legal fees (including those of Tenant's in-house counsel). "ASSIGNMENT CONSIDERATION" means an amount equal to all sums and other considerations paid to Tenant by the assignee for or by reason of such assignment (including, without limitation, sums paid for the furnishing of services by Tenant and the sale or rental of Tenant's fixtures, leasehold improvements, equipment, furniture, furnishings or other personal property, less, in the case of a sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant's federal income tax returns).

~~SECTION 6.06. ASSIGNOR CURE RIGHTS.~~

If this Lease shall have been assigned by Tenant (other than to an Affiliate of Tenant), Landlord shall give the initially named Tenant (the "TENANT ASSIGNOR"), a copy of each notice of default given by Landlord to the then current tenant (the "TENANT ASSIGNEE") under this Lease. Landlord shall not have any right to terminate this Lease, or otherwise to exercise any of Landlord's rights and remedies hereunder, after a default by such Tenant Assignee, unless and until (A) Landlord shall have made a demand on the Tenant Assignee to cure the default in question, (B) the Tenant Assignor receives a copy of the default notice in question, and (C) the Tenant Assignor has an opportunity to remedy such default within the time periods set forth in this Lease (such time periods, with respect to the Tenant Assignor, being deemed to run from the date that Landlord gives such Tenant Assignor a copy of the default notice in question); provided, that this sentence shall not be applicable if the Tenant Assignee under this Lease in an Affiliate of the Tenant Assignor. Landlord shall accept timely performance by the Tenant Assignor of any term, covenant, provision or agreement contained in this Lease on the Tenant Assignee's part to be observed and performed with the same force and effect as if performed by the Tenant Assignee (but only if such Tenant Assignee is not an Affiliate of the Tenant Assignor). If the Tenant Assignor shall cure the default

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document by such Tenant Assignee, or if the default shall be incurable (such as bankruptcy), and Landlord or the Tenant Assignee, seeks to terminate this Lease, then the Tenant Assignor shall have the right to enter into a new lease with Landlord upon all of the then executory terms of this Lease and to resume actual possession of the Premises for the unexpired balance of the Term; provided, that this sentence shall not be applicable if the Tenant Assignee under this Lease is an Affiliate of the Tenant Assignor.

SECTION 6.07. LANDLORD NON-DISTURBANCE If Tenant shall so request at the same time it requests Landlord's approval of a sublease, Landlord agrees that it shall enter into a non-disturbance, attornment agreement with permitted sublessees of one full floor or more of the Premises provided that (x) such floor or floors shall be the uppermost or the bottommost floor and/or any floor contiguous thereto, (y) such sublease shall be for the balance of the term of this Lease and (z) if the rent such subtenant is paying at the time of attornment is less than that required pursuant of the terms of this Lease, such subtenant shall agree to pay Fixed Rent and Additional Charges in accordance with the terms of this Lease and provided, further, that in determining whether or not Landlord shall consent to such a sublease, it shall be reasonable for Landlord to take into account that under certain circumstances Landlord may have to have such subtenant as its direct tenant.

~~ARTICLE 7~~

~~SUBORDINATION; DEFAULT; INDEMNITY~~

SECTION 7.01. SUBORDINATION. (a) Subject to the provisions of this ARTICLE 7, this Lease is subject and subordinate to each mortgage (a "SUPERIOR MORTGAGE") and each underlying lease including, without limitation, the Overlease (a "SUPERIOR LEASE") which may now or hereafter affect all or any portion of the Project or any interest therein; provided that the Superior Mortgagee under such Superior Mortgage or Superior Lessor under such Superior Lease shall

42 have executed and delivered a non-disturbance and attornment agreement substantially to the effect that so long as Tenant is not in default hereunder beyond any applicable notice and grace periods, (i) this Lease will not be terminated or cut off not shall Tenant's possession hereunder be disturbed by enforcement of any rights given to such Superior Mortgagee or Superior Lessor pursuant to such Superior Mortgage or Superior Lease, and (ii) such Superior Mortgagee or Superior Lessor shall recognize Tenant as the tenant under this Lease. The lessor under a Superior Lease is called a "SUPERIOR LESSOR" and the mortgagee under a Superior Mortgage is called a "SUPERIOR MORTGAGEE". Tenant shall execute, acknowledge and deliver any instrument reasonably requested by Landlord, a Superior Lessor or Superior Mortgagee to evidence such subordination, but no such instrument shall be necessary to make such subordination effective if a non-disturbance and attornment agreement shall have been delivered. Notwithstanding anything contained in this SECTION 7.01 to the contrary, if any Superior Mortgagee or Superior Lessee executes and delivers a non-disturbance and attornment agreement either (i) in the form attached hereto as EXHIBIT F or (ii) in a form which is not in any material respect less favorable to Tenant as the non-disturbance and attornment agreement executed and delivered contemporaneously herewith by Tenant and the existing Superior Mortgagee or Superior Lessor, as applicable, and Tenant either fails or refuses to execute and deliver such agreement within 30 days after delivery of such agreement to Tenant, then this Lease shall automatically and without further act

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be deemed to be subject and subordinate to such Superior Mortgage or Superior Lease and such non-disturbance and attornment agreement shall then be deemed to be in effect with respect to such Superior Mortgage or Superior Lease. Tenant acknowledges and agrees that simultaneously herewith Tenant and the existing Superior Mortgagee and the existing Superior Lessor have executed and exchanged non-disturbance and attornment agreements which satisfy the requirements of this SECTION 7.01. Tenant shall execute any amendment of this Lease requested by a Superior Mortgagee or a Superior Lessor; PROVIDED such amendment shall not (i) result in a material increase in Tenant's obligations under this Lease or a material reduction in the benefits available to Tenant or (ii) diminish the rights, privileges, interest or estate or Tenant or alter the Term, the Premises or the services to be provided to Tenant by Landlord hereunder (except, in either case, to a DE MINIMIS extent). In the event of the enforcement by a Superior Mortgagee of the remedies provided for by law or by such Superior Mortgage, or in the event of the termination or expiration of a Superior Lease, Tenant, upon request of such Superior Mortgagee, Superior Lessor or any person succeeding to the interest of such mortgagee or lessor (each, a "SUCCESSOR LANDLORD"), shall, subject to the terms of this ARTICLE 7 and the delivery of a subordination, non-disturbance and attornment agreement in accordance with this Section automatically become the tenant of such Successor Landlord without change in the terms or provisions of this Lease (it being understood that Tenant shall, if requested, enter into a new lease on terms identical to those in this Lease); provided, that any Successor Landlord shall not be (i) liable for any act, omission or default of any prior landlord (including, without limitation, Landlord); (ii) liable for the return of any monies paid to or on deposit with any prior landlord (including, without limitation, Landlord), except to the extent such monies or deposits are delivered to such Successor Landlord; (iii) subject to any offset, claims or defense that Tenant might have against any prior landlord (including, without limitation, Landlord); (iv) bound by any Rent which Tenant might have paid for more than thirty (30) days in advance of the date upon which such payment was due to any prior landlord (including, without limitation, Landlord) unless actually received by such Successor Landlord or expressly approved in writing by it or received by it; (v) bound by any covenant to perform or complete any construction in

43 connection with the Project or the Premises or to pay any sums to Tenant in connection therewith, or (vi) bound by any waiver or forbearance under, or any amendment, modification, abridgement, cancellation or surrender of this Lease made without the consent of such Successor Landlord. Nothing contained herein shall be deemed to relieve any Successor Landlord of any liability arising by reason of its acts or omissions from or after the date that such Successor Landlord shall become the landlord under this Lease, and such Successor Landlord shall be obligated to perform Landlord's obligations under this Lease arising from and after becoming landlord, in accordance with the provisions of this Lease. Upon request by such Successor Landlord, Tenant shall, subject to the terms of this ARTICLE 7 and the delivery of a subordination, non-disturbance and attornment agreement in accordance with this Section execute and deliver an instrument or instruments, reasonably requested by such Successor Landlord, confirming the attornment provided for herein, but no such instrument shall be necessary to make such attornment effective. It is hereby acknowledged and agreed that the foregoing provisions are not intended to relieve any Successor Landlord from its obligations under this Lease from and after the date it becomes Landlord under this Lease.

~~(b) Tenant shall give each Superior Mortgagee and each Superior Lessor a copy of any notice of default served upon Landlord, provided that Tenant has~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document been notified of the address of such mortgagee or lessor. If Landlord fails to cure any default as to which Tenant is obligated to give notice pursuant to the preceding sentence within the time provided for in this Lease, then each such mortgagee or lessor shall have an additional 30 days after receipt of such notice within which to cure such default or if such default cannot be cured within that time, then such additional time as may be necessary if, within such 30 days, any such mortgagee or lessor has commenced and is diligently pursuing the remedies necessary to cure such default (including, without limitation, commencement of foreclosure proceedings or eviction proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated and Tenant shall not exercise any other rights or remedies under this Lease or otherwise seek a termination of this Lease while such remedies are being so diligently pursued. Nothing herein shall be deemed to imply that Tenant has any right to terminate this Lease or any other right or remedy, except as may be otherwise expressly provided for in this Lease.

SECTION 7.02 ESTOPPEL CERTIFICATE. Each party shall, at any time and from time to time, but in any event no more than two (2) times in any twelve month period, within 10 days after request by the other party, execute and deliver to the requesting party (or to such person or entity as the requesting party may designate) a statement certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), certifying the Premises Possession Date, Expiration Date and the dates to which the Fixed Rent and Additional Charges have been paid and stating whether or not, to the best knowledge of such party, the other party is in default in performance of any of its obligations under this Lease, and, if so, specifying each such default of which such party has knowledge, it being intended that any such statement shall be deemed a representation and warranty to be relied upon by the party to whom such statement is addressed. Tenant also shall include or confirm in any such statement such other information concerning this Lease as Landlord may reasonably request. Any statement delivered pursuant to this SECTION 7.02 shall reflect the state of facts existing only as of the date it is given by such party.

~~SECTION 7.03. DEFAULT. (a) This Lease and the term and estate hereby granted are subject to the limitation that:~~

(i) if Tenant defaults in the payment of any Fixed Rent, and such default continues for 5 days after Landlord gives to Tenant a notice specifying such default, or if Tenant defaults in the payment of any Additional Charges, and such default continues for 10 days after Landlord gives to Tenant a notice specifying such default, or

(ii) if Tenant defaults in the keeping, observance or performance of any covenant or agreement (other than a default of the character referred to in SECTION 7.03(a)(i), (iii), (iv) OR (v)), and if such default continues and is not cured within 30 days after Landlord gives to Tenant a notice specifying the same, or, in the case of a default which for causes beyond Tenant's reasonable control cannot with due diligence be cured within such period of 30 days, if Tenant shall not immediately upon the receipt of such notice, (x) advise Landlord of Tenant's intention duly to institute all steps necessary to cure such default and (y) institute and thereafter diligently prosecute to completion all steps necessary to cure the same,

~~(iii) if this Lease or the estate hereby granted would, by~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document operation of law or otherwise, devolve upon or pass to any person or entity other than Tenant, except as expressly permitted by ARTICLE 6, or

~~(iv) if Tenant shall abandon the entire Premises, has removed a substantial portion of its personal property and left the Premises unattended for a period in excess of sixty (60) days, or~~

(v) if there shall be a failure of Tenant to comply with any of the material terms and provisions of that certain Overlandlord Consent entered into by and among Landlord, Overlandlord and Tenant in connection with this Lease beyond applicable notice and cure periods relating thereto, if any.

SECTION 7.04. RE-ENTRY BY LANDLORD. If this Lease shall terminate as in SECTION 7.03 provided, Landlord or Landlord's agents and servants may immediately or at any time thereafter re-enter into or upon the Premises, or any part thereof, either by summary dispossess proceedings or by any suitable action or proceeding at law, without being liable to indictment, prosecution or damages therefor, and may repossess the same, and may remove any persons therefrom, to the end that Landlord may have, hold and enjoy the Premises. The words "re-enter" and "re-entering" as used in this Lease are not restricted to their technical legal meanings. Upon such termination or re-entry, Tenant shall pay to Landlord any Rent then due and owing (in addition to any damages payable under SECTION 7.05).

~~SECTION 7.05. DAMAGES. (a) If this Lease is terminated under SECTION 7.03 Tenant shall pay to Landlord as damages, at the election of Landlord, either:~~

(b) a sum which, at the time of such termination, represents the value (discounted to present value using Base Rate) of the excess, if any, of (1) the aggregate of the Rent which, had this Lease not terminated, would have been payable hereunder by Tenant for the period commencing on the day following the date of such termination to and including the Expiration Date over (2) the aggregate fair rental value of the Premises for the same period (for

45 the purposes of this CLAUSE (a) the amount of Additional Charges which would have been payable by Tenant under SECTIONS 3.04 and 3.05 shall, for each calendar year ending after such termination, be deemed to be an amount equal to the amount of such Additional Charges payable by Tenant for the calendar year immediately preceding the calendar year in which such termination shall occur), or

(c) sums equal to the Rent that would have been payable by Tenant through and including the Expiration Date had this Lease not terminated, payable upon the due dates therefor specified in this Lease; PROVIDED, that if Landlord shall relet all or any part of the Premises for all or any part of the period commencing on the day following the date of such termination or re-entry to and including the Expiration Date, Landlord shall credit Tenant with the net rents received by Landlord from such reletting, such net rents to be determined by first deducting from the gross rents as and when received by Landlord from such reletting the expenses incurred or paid by Landlord in terminating this Lease and of re-entering the Premises and of securing possession thereof, as well as the expenses of reletting, including, without limitation, altering and preparing the Premises for new tenants, brokers' commissions, legal fees and all other expenses properly chargeable against the Premises and the rental therefrom in connection with such reletting, it being understood that any such reletting may

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be for period equal to or shorter or longer than said period; PROVIDED, FURTHER, that (i) in no event shall Tenant be entitled to receive any excess of such net rents over the sums payable by Tenant to Landlord under this Lease, (ii) in no event shall Tenant be entitled, in any suit for the collection of damages pursuant to this SECTION 7.05(b), to a credit in respect of any net rents from a reletting except to the extent that such net rents are actually received by Landlord prior to the commencement of such suit, (iii) if the Premises or any part thereof should be relet in combination with other space, then proper apportionment on a square foot rentable area basis shall be made of the rent received from such reletting and of the expenses of reletting and (iv) Landlord shall have no obligation to so relet the Premises and Tenant hereby waives any right Tenant may have, at law or in equity, to require Landlord to so relet the Premises.

Suit or suits for the recovery of any damages payable hereunder by Tenant, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained herein shall require Landlord to postpone suit until the date when the Term would have expired but for such termination or re-entry.

SECTION 7.06. OTHER REMEDIES. Nothing contained in this Lease shall be construed as limiting or precluding the recovery by Landlord against Tenant of any sums or damages to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any default hereunder on the part of Tenant. Anything in this Lease to the contrary notwithstanding, during the continuation of any default by Tenant, Tenant shall not be entitled to exercise any rights or options, or to receive any funds or proceeds being held, under or pursuant to this Lease.

SECTION 7.07. RIGHT TO INJUNCTION. In the event of a breach or threatened breach by Tenant of any of its obligations under this Lease, including, but not limited to, holding over after the Expiration Date or the date of any earlier termination of this Lease, Landlord subject to applicable law shall also have the right of injunction and, in the case of a threatened holdover, the right to bring a summary proceeding for possession of the Premises on the Expiration Date or

46 the date of any earlier termination of this Lease. The specified remedies to which Landlord may resort hereunder are cumulative and are not intended to be exclusive of any other remedies or means of redress to which Landlord may lawfully be entitled, and Landlord may invoke any remedy allowed at law or in equity as if specific remedies were not herein provided for.

SECTION 7.08. CERTAIN WAIVERS; WAIVER OF TRIAL BY JURY. (a) Tenant waives and surrenders all right and privilege that Tenant might have under or by reason of any present or future law to redeem the Premises or to have a continuance of this Lease after Tenant is dispossessed or ejected therefrom by Landlord, by process of law or under the terms of this Lease or after any termination of this Lease. Tenant also waives the provisions of any law relating to notice and/or delay in levy of execution in case of any eviction or dispossession for nonpayment of rent, and the provisions of any successor or other law of like import.

~~(b) Landlord and Tenant each waive trial by jury in any action in connection with this Lease.~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SECTION 7.09. NO WAIVER. Failure by either party to declare any default immediately upon its occurrence or delay in taking any action in connection with such default shall not waive such default but such party shall have the right to declare any such default at any time thereafter. Any amounts paid by Tenant to Landlord may be applied by Landlord, in Landlord's discretion, to any items then owing by Tenant to Landlord under this Lease. Receipt by either party of a partial payment shall not be deemed to be an accord and satisfaction (notwithstanding any endorsement or statement on any check or any letter accompanying any check or payment) nor shall such receipt constitute a waiver by such party of the other party's obligation to make full payment. No act or thing done by Landlord or its agents shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender shall be valid unless in writing and signed by Landlord and by each Superior Lessor and Superior Mortgagee whose lease or mortgage provides that any such surrender may not be accepted without its consent.

SECTION 7.10. HOLDING OVER. If Tenant holds over without the consent of Landlord after expiration or termination of this Lease, Tenant shall (a) pay as holdover rental for each month of the holdover tenancy an amount equal to (w) 125% for the first month of the holdover tenancy, (x) 150% for the second month of the holdover tenancy, (y) 175% for the third month of the holdover tenancy and (z) 200% for the fourth month and any additional month(s) of the holdover tenancy of the greater of (i) the fair market rental value of the Premises for such month (as reasonably determined by Landlord) or (ii) the Rent which Tenant was obligated to pay for the month immediately preceding the end of the Term; and (b) be liable to Landlord for and indemnify Landlord against (i) any payment or rent concession which Landlord may be required to make to any tenant obtained by Landlord for all or any part of the Premises (a "NEW TENANT") by reason of the late delivery of space to the New Tenant not to terminate its lease by reason of the holding over by Tenant, (ii) the loss of the benefit of the bargain if any New Tenant shall terminate its lease by reason of the holding over by Tenant, and (iii) any claim for damages by any New Tenant. No holding over by Tenant after the Term shall operate to extend the Term. Notwithstanding the foregoing, the acceptance of any rent paid by Tenant pursuant to this

~~SECTION 7.10 shall not preclude Landlord from commencing and prosecuting a holdover or summary eviction proceeding.~~

SECTION 7.11. ATTORNEYS' FEES. If Landlord places the enforcement of this Lease or any part thereof upon the default of Tenant, or the collection of any Rent due or to become due hereunder, or recovery of the possession of the Premises, in the hands of an attorney, or files suit upon the same, or in the event any bankruptcy, insolvency or other similar proceeding is commenced involving Tenant (an "ACTION"), Tenant shall, within twenty (20) days of demand, reimburse Landlord for landlord's attorney's fees and disbursements and court costs, provided, however, that if a court of competent jurisdiction renders a final unappealable verdict there was no basis for the Action, Landlord shall not be entitled to recover such fees and costs.

SECTION 7.12. NONLIABILITY AND INDEMNIFICATION. (a) Neither Landlord, any Superior Lessor or any Superior Mortgagee, nor any partner, director, officer, shareholder, principal, agent, servant or employee of Landlord, any Superior Lessor or any superior Mortgagee (whether disclosed or undisclosed), shall be liable to Tenant for (i) any loss, injury or damage to Tenant or to any other person, or to its or their property, irrespective of the cause of such injury, damage or loss, nor shall the aforesaid parties be liable for any loss

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of or damage to property of Tenant or of others, entrusted to employees of Landlord; PROVIDED, that, except to the extent of the release of liability and waiver of subrogation provided in SECTION 8.03 hereof, the foregoing shall not be deemed to relieve Landlord of any liability to the extent resulting from the willful misconduct or negligence of Landlord, its agents, servants or employees in the operation or maintenance of the Premises to the Building. (ii) any loss, injury or damage described in CLAUSE (i) above caused by other tenants or persons in, upon or about the Building, or caused by operation in construction of any private, public or quasi-public work, or (iii) even if negligent, consequential damages arising out of any loss of use of the Premises or any equipment, facilities or other Tenant's Property therein.

(b) Tenant shall indemnify and hold harmless Landlord, all Superior Lessors and all Superior Mortgagees and each of their respective members, partners, directors, officers, shareholders, principals, agents and employees (each, an "INDEMNIFIED PARTY"), from and against any and all claims arising from or in connection with (i) the conduct or management of the Premises or of any business therein, or any work or thing done, or any condition created, in or about the Premises, (ii) any negligence or wrong doing of Tenant or any person claiming through or under Tenant or any of their respective members, partners, directors, officers, agents, employees or contractors, (iii) any accident, injury or damage occurring in, at or upon the Premises, (iv) any default by Tenant in the performance of Tenant's obligations under this Lease and (v) any brokerage commission or similar compensation claimed to be due by reason of any proposed subletting or assignment by Tenant; together with all costs, expenses and liabilities incurred in connection with each such claim or action or proceeding brought thereon, including without limitation, all reasonable attorneys' fees and disbursements; PROVIDED ,that the foregoing indemnity shall not apply to the extent such claim results from the negligence (other than negligence to which the release of liability and waiver of subrogation provided in SECTION 8.03 below applies) willful misconduct of the Indemnified Party. If any action or proceeding is through against any Indemnified Party by reason of any such claim, Tenant, upon notice from such Indemnified Party shall resist and defend such action or proceeding (by counsel, including Tenant's in-house counsel, reasonably satisfactory to such Indemnified Party)

(c) In the event of any claim, action or proceeding which may give rise to liability under the indemnity contained in this SECTION 7.12 or other provision of this Lease. (a) the indemnified party shall give the indemnifying party prompt notice of such claim or action, (b) the indemnifying party may defend against such claim or action with counsel selected by it, subject to the reasonable approval of indemnified party, which approval shall not be unreasonably withheld or delayed, (c) the indemnified party shall reasonably cooperate with the indemnifying party and its counsel in the defense of such claim or action and, (d) the indemnified party shall not settle such claim or action without indemnifying party's prior written consent, which consent shall not be unreasonably withheld or delayed.

SECTION 7.13. PROTEST OF LANDLORD CHARGES. Except as otherwise set forth, Tenant shall have ninety (90) days from receipt (i) of a bill or other request from Landlord for payment of any charge, other than the Fixed Rent, payable by Tenant under this Lease or (ii) a refund or credit under the terms of this Lease within which to protest the correctness of such charge or credit, provided however, if, in connection with a disputed payment, Tenant shall pay such disputed amount to Landlord under Protest prior to the expiration of such 90 day period, such 90 day period shall be extended to 120 days. If Tenant fails

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to make such protest, which shall be made in the manner herein set forth for the giving of notices, within the ninety (90) day or one hundred twenty (120) day period, as applicable, the charge set forth in such bill or other request or the applicable refund or credit shall be deemed to have been accepted by Tenant and shall no longer be contestable by Tenant, time being of the essence.

~~ARTICLE 8~~

~~INSURANCE; CASUALTY; CONDEMNATION~~

SECTION 8.01. COMPLIANCE WITH INSURANCE STANDARDS. (a) Tenant shall not violate, or permit the violation of, any condition imposed by any insurance policy then issued in respect of the Project and shall not do, or permit anything to be done, or keep or permit anything to be kept in the Premises, which would subject Landlord, any Superior Lessor or any Superior Mortgagee to any liability or responsibility for personal injury or death or property damage, or which would increase any insurance rate in respect of the Project over the rate which would otherwise then be in effect or which would result in insurance companies of good standing refusing to insure the Project in amounts reasonably satisfactory to Landlord, or which would result in the cancellation of, or the assertion of any defense by the insurer in whole or in part to claims under, any policy or insurance in respect of the Project. Landlord hereby agrees that the users permitted under SECTION 2.05 do not violate its insurance policies.

(b) if, by reason of any failure of Tenant to comply with this Lease, the premiums on Landlord's insurance on the Project shall be higher than they otherwise would be, Tenant shall reimburse Landlord, within twenty (20) days of demand, for that part of such premiums attributable to such failure on the part of Tenant. A schedule or "make up" of rates for the Project or the Premises, as the case may be, issued by the New York Fire Insurance Rating Organization or other similar body making rates for insurance for the Project or the Premises as the case may be, shall be conclusive evidence of the facts therein stated and of the several items

~~49 and charges in the insurance rate then applicable to the project or the Premises, as the case may be.~~

SECTION 8.02. TENANT'S INSURANCE. (a) Tenant shall maintain at all times during the Term (i) "all risk" property, insurance covering all present and future Tenant's Property, Fixtures and Tenant's Improvements and Betterments to a limit of not less than the full replacement cost thereof, and (ii) commercial general liability insurance, including a contractual liability endorsement, and personal injury liability coverage, in respect of the Premises and the conduct or operation of business therein, with Landlord and each Superior Lessor and Superior Mortgagee whose name and address shall have been furnished to Tenant, as additional insureds, with limits of not less than $10,000,000 combined single limit for bodily injury and property damage liability in any one occurrence and (iii) boiler and machinery insurance, if there is a boiler, supplementary air conditioner or pressure object or similar equipment in the Premises, with Landlord and each Superior Lesser and Superior Mortgagee whose name and address shall have been furnished to Tenant, as additional insureds, with limits of not less than $10,000,000 and (iv) when Alterations are in process, the insurance specified in SECTION 5.02(f) hereof. The limits of such insurance shall not limit the liability of Tenant. Tenant shall deliver to Landlord and any other additional insureds, at least 10 days prior to the Commencement Date, such fully paid-for policies or certificates of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document insurance, in form reasonably satisfactory to Landlord issued by the insurance company or its authorized agent. Tenant shall procure and pay for renewals of such insurance from time to time before the expiration thereof, and Tenant shall deliver to Landlord and any other additional insureds such renewal policy or a certificate thereof atleast 30 days before the expiration of any existing policy. All such policies shall be issued by companies of recognized responsibility approved to do business in New York State and rated by Best's Insurance Reports or any successor publication of comparable standing as A-/VIII or better or the then equivalent of such rating, and all such policies shall contain a provision whereby the same cannot be canceled, allowed to lapse or modified unless Landlord any additional insureds are given at least 30 days' prior written notice of such cancellation, lapse or modification. The proceeds of policies providing "all risk" property insurance of Fixtures and Improvements and Betterments shall be payable to Landlord, Tenant and each Superior Lessor and Superior Mortgagee as their interests may appear. Tenant shall have the right to receive the proceeds paid with respect to Tenant's Property of any policy maintained by Tenant to provide insurance of Tenant's property. Tenant shall cooperate with Landlord in connection with the collection of any insurance monies that may be due in the event of loss and Tenant shall execute and deliver to Landlord such proofs of loss and other instruments which may be required to recover any such insurance monies. Landlord may from time to time require that the amount of the insurance to be maintained by Tenant under this SECTION 8.02 be increased, so that the amount thereof adequately protects Landlord's interest but such increase shall not be in excess of to that amount of insurance which in Landlord's reasonable judgment is then being customarily required by prudent landlords of non-institutional first class office buildings in New York City. Any insurance policy with respect to the insurance required to be maintained by Tenant hereunder may be carried under a blanket policy covering the Premises and other locations of Tenant, if any, provided that (x) the coverages and limits applicable to the Premises are separately stated in amounts not less than the amounts required hereunder and (y) the coverage afforded under such blanket policy allocable to the Premises shall not be less than the coverage which would have been afforded had such insurance not been covered under a blanket policy.

(b) To the extent not maintained by Overlandlord, Landlord agrees that Landlord shall maintain at all times during the Term such (i) "all risk" property insurance, (ii) commercial general liability insurance and (iii) any other form of insurance, and in such amounts, as is carried by prudent owners of similar properties. Landlord shall be deemed to have satisfied the foregoing obligation of this Section 8.02(b) if Landlord maintains the insurance required by the Overlease.

(c) Notwithstanding anything in this Lease to the contrary, so long as (i) Tenant is not in default of its obligations under this Lease to pay Fixed Rent and Additional Charges beyond applicable notice and grace periods, (ii) Tenant maintains substantially the same creditworthiness as exists on the date hereof and (iii) Tenant named herein, any Successor Entity or any Affiliate is the Tenant hereunder, Tenant may, in lieu of maintaining the liability insurance required under this Lease, self-insure and assume the risks of, and shall pay all costs of or related to, all liability claims that may be asserted against Tenant and all liability claims which may be asserted against Landlord, Landlord's agents, any Superior Mortgagee or any Superior Lessor in a combined aggregate amount not to exceed $5,000,000.00 (it being understood that Tenant shall maintain coverage for liability in excess of such amount otherwise in accordance with Section 8.02(a) above) for which Tenant is responsible pursuant to this Lease and with respect to which Tenant has self-insured. As a

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document self-insurer Tenant shall be responsible for any and all obligations of Tenant to indemnify and hold Landlord harmless from and against any matters refereed to in this Lease or which otherwise would have been included within the coverage of any insurance policy required by Tenant to be obtained under any provision of this Lease. If Tenant elects to provide insurance coverage for which Tenant is responsible under this Section by self-insurance, it shall provide coverage upon the same terms and conditions as would be provided by an insurance company if Tenant had procured such policies as described in this Section and as if Landlord, Overlandlord and any Superior Mortgagee were named in such policies as additional insureds. In the event Tenant elects to act as self-insurer pursuant to the provisions of this paragraph, then, without limiting the provisions of this Section, Tenant shall act as insurer of Landlord, Overlandlord and any Superior Mortgagee with respect to, shall defend and answer actions against Landlord and Overlandlord against all claims and demands of third persons, including, without limitation, any claim or demand of any third person arising out of any willful or negligent act or omission of Landlord or Overlandlord, and their respective directors, officers, agents or employees and liability therefor to the same extent that an insurance company would have done and to the same extent as would be covered under the policy of commercial general liability insurance described in this Section. If Tenant elects to self-insure, Tenant will provide a written statement of Tenant's self-insurance. In the event that any of the conditions specified in CLAUSES (i), (ii) or (iii) are no longer satisfied, then within 5 Business Days thereafter Tenant shall obtain and keep in full force and effect during the Team of this Lease the liability insurance otherwise required by this Lease. If Tenant fails to obtain such insurance within such 5 Business Day period, Landlord may purchase such insurance at Tenant's expense. Tenant may elect to cease its self-insurance program hereunder at any time so long as not less than 10 days prior thereto Tenant puts in place all liability insurance required under this Lease and delivers evidence thereof to Landlord.

SECTION 8.03. SUBROGATION WAIVER. Landlord and Tenant shall each include in each of its insurance policies (insuring the Project in case of Landlord, and insuring Tenant's Property, Fixtures and Improvements and Betterments in the case of Tenant, against loss,

51 damage or destruction by fire or other casualty) a waiver of the insurer's right of subrogation against the other party during the Term or, if such waiver should be unobtainable or unenforceable, (a) an express agreement that such policy shall not be invalidated if the assured waives the right of recovery against any party responsible for a casualty covered by the policy before the casualty or (b) any other form of permission for the release of the other party. Each party hereby releases the other party with respect to any claim (including a claim for negligence) which it might otherwise have against the other party for loss, damage or destruction with respect to its property occurring during the Term to the extent to which it is, or is required to be, insured under a policy or policies containing a waiver of subrogation or permission to release liability. Nothing contained in this SECTION 8.03 shall be deemed to relieve either party of any duty imposed elsewhere in this Lease to repair, restore or rebuild or to nullify any abatement of rents provided for elsewhere in this Lease.

SECTION 8.04. CONDEMNATION. (a) If there shall be a total taking of the Land and/or the Building in condemnation proceedings or by any right of eminent domain, this Lease and the term and estate hereby granted with respect to the Premises shall terminate as of the date of taking of possession by the condemning authority and all Rent shall be prorated and paid as of such

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document termination date. If there shall be taking of any material (in Landlord's reasonable judgment) portion of the Land and/or Building (whether or not the Premises or any portion thereof are affected by such taking), then Landlord may terminate this Lease and the term and estate granted hereby by giving notice to Tenant within 60 days after the date of taking of possession by the condemning authority. If there shall be a taking of the Premises of such scope (but in no event less than 25% thereof) that the untaken part of the Premises would in Tenant's reasonable judgment no longer suited for the purposes set forth in Article 2 of this Lease, or Tenant no longer has responsible means of access to such Premises then Tenant may terminate this Lease and the term and estate granted hereby by giving notice to Landlord within 60 days after the date of taking of possession by the condemning authority. If either Landlord or Tenant shall give a termination notice as aforesaid, then this Lease and the term and estate granted hereby shall terminate as of the date of such notice and all Rent shall be prorated and paid as of such termination date. In the event of taking of Premises which does not result in the termination of this Lease (i) the term and estate hereby granted with respect to the taken part of the Premises shall terminate as of the date of taking of possession by the condemning authority and all Rent shall be appropriately abated for the period from such date to the Expiration Date and (ii) Landlord shall with reasonable diligence restore the remaining portion of the Premises (exclusive of Tenant's Property) as nearly as practicable to its condition prior to such taking.

(b) In the event of any taking of all or a part of the Building, Landlord shall be entitled to receive the entire award in the condemnation proceeding, including, without limitation, any award made for the value of the estate vested by this Lease in Tenant or any value attributable to the unexpired portion of the Term, and Tenant hereby assigns to Landlord any and all right, title and interest of Tenant now or hereafter arising in or to any such award or any part thereof, and Tenant shall be entitled to receive no part of such award; PROVIDED, that nothing shall preclude Tenant from intervening in any such condemnation proceeding to claim or receive from the condemning authority any compensation to which Tenant may otherwise lawfully be entitled in such case in respect of Tenant's Property, Tenant's Alterations, Betterments or Improvements (except to the extent such Alterations constitute property which is, or at the expiration of the Term, becomes Landlord's property) or moving expenses, provided the same does not include

~~52 any value of the estate vested by this Lease in Tenant or of the unexpired portion of the Term and does not reduce the award available to Landlord or materially delay the payment thereof.~~

(c) If all or any part of the Premises shall be taken for a limited period, Tenant shall be entitled, except as hereinafter set forth, to that portion of the award for such taking which represents compensation for the use and occupancy of the Premises, for the taking of Tenant's Property, Tenant's Alterations (except to the extent such Alterations constitute property which is, or at the expiration of the Term, becomes Landlord's property) or for moving expenses, and Landlord shall be entitled to that portion which represents reimbursement for the cost of restoration of the Premises. This Lease shall remain unaffected by such taking and Tenant shall continue responsible for all of its obligations under this Lease to the extent such obligations are not affected by such taking and shall continue to pay in full all Rent when due. If the period of temporary use of occupancy shall extend beyond the Expiration Date, that part of the award which represents compensation for the use and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document occupancy of the Premises shall be apportioned between Landlord and Tenant as of the Expiration Date. Any award of temporary use and occupancy for a period beyond the date to which the Rent has been paid shall be paid to, held and applied by Landlord as a trust fund for payment of the Rent thereafter becoming due.

(d) In the event of any taking which does not result in termination of this Lease, (i) Landlord, whether or not any award shall be sufficient therefor, shall proceed with reasonable diligence to repair the remaining parts of the Building and Premises (other that those parts of the Premises which constitute Tenant's Property) to substantially their former condition to the extent that the same may be feasible (subject to reasonable changes which Landlord deems desirable) and so as to constitute a complete and rentable Building and Premises and (ii) Tenant, whether or not any award shall be sufficient therefor, shall proceed with reasonable diligence to repair the remaining parts of the Premises which constitute Tenant's Property, to substantially their former condition to the extent that the same may be feasible, subject to reasonable changes which shall be deemed Alterations.

SECTION 8.05. CASUALTY. (a) If the Building or the Premises shall be partially or totally damage or destroyed by fire or other casualty (each, a "CASUALTY") and if this Lease is not terminated as provided below, then (i) Landlord shall repair and restore the Building, including the exterior and public portions thereof (including, without limitation, the Building lobbies, exterior walls, elevator shafts), Building systems servicing the Premises, and the Premises (excluding Tenant's Improvements and Betterments, Fixtures and Tenant's Property) with reasonable dispatch to substantially the condition as existed prior to the damage to the extent permitted by applicable Law (but Landlord shall not be required to perform the same on an overtime or premium pay basis) after notice to Landlord of the Casualty and the collection of the insurance proceeds attributable to such Casualty provided, however, in the event that Landlord fails to maintain the insurance customarily carried by prudent Landlords of similar type buildings, the collection of insurance proceeds shall not be a condition to Landlord performing such restoration and (ii) Tenant shall repair and restore in accordance with SECTION 5.02 all Tenant's Property, Fixtures and Improvements and Betterments with reasonable dispatch after the Casualty, including any tenant build-out existing in the Premises on the date of delivery thereof by Landlord (collectively, "TENANT CASUALTY REPAIR OBLIGATIONS"). Landlord agrees that, if and to the extent, Landlord, any Superior Mortgagee or any Superior Lessor receives insurance proceeds in respect of Tenant Casualty Repair Obligations Landlord shall notify Tenant thereof

53 and upon request of Tenant, make such proceeds available to Tenant so that Tenant may perform its Tenant Casualty Repair Obligations. In the event Landlord has received proceeds in respect of Tenant Casualty Repair Obligations and Landlord does not make such proceeds available to Tenant, Landlord shall be obligated, at Landlord's cost and expense, to perform the Tenant Casualty Repair Obligations with reasonable dispatch after the Casualty. In the event any Superior Mortgagee or any Superior Lessor has received proceeds in respect of Tenant Casualty Repair Obligations and such Superior Mortgagee or Superior Lessor shall refuse to release such proceeds to Tenant, Landlord shall be obligated, at Landlord's cost and expense, to perform or cause to be performed the Tenant Casualty Repair Obligations.

~~(b) If all or part of the Premises shall be rendered untenantable by reason of a Casualty, the Fixed Rent and the Additional Charges under SECTION~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3.04 and 3.05 shall be abated in the proportion that the untenantable area of the Premises bears to the total area of the Premises, for the period from the date of the Casualty to the earlier of (i) the date the Premises is made tenantable (PROVIDED, that if the Premises would have been tenantable at an earlier date but for Tenant having failed to cooperate with Landlord in effecting repairs or restoration or collecting insurance proceeds or (ii) the date Tenant or any subtenant reoccupies a portion of the Premises (in which case the Fixed Rent and the Additional Charges allocable to such reoccupied portion shall be payable by Tenant from the date of such occupancy). Landlord's determination of substantial completion of the restoration of the Premises (excluding Tenant's Improvement, Betterments, Fixtures and Tenant's Property the repair of which shall be Tenant's obligation), shall be controlling unless Tenant disputes same by notice to Landlord within 30 days after such determination by Landlord, and pending resolution of such dispute, Tenant shall pay Rent in accordance with Landlord's determination. Notwithstanding the foregoing, if by reason of any act or omission by Tenant, any subtenant or any of their respective partners, directors, officers, servants, employees, agents or contractors, Landlord, any Superior Lessor or any Superior Mortgagee shall be unable to collect all of the insurance proceeds (including, without limitation, rent insurance proceeds) applicable to the Casualty, then, without prejudice to any other remedies which may be available against Tenant, there shall be no abatement of Rent. Nothing contained in this SECTION 9.05 shall relieve Tenant from any liability that may exist as a result of any Casualty. Prior to the substantial completion of Landlord's repair obligations set forth in this Section, Landlord shall provide Tenant and Tenant's contractors, subcontractors and materialmen access to the Premises to perform such repairs that Tenant is required or desire to make hereunder as a result of the Casualty (but not to occupy the same for the conduct of business); PROVIDED that any such access shall be subject to all of the applicable provisions of the Lease, and, shall not interfere with the conduct of Landlord's work AND in the Premises or in any other damaged portion of the Building.

(c) If by reason of a Casualty (i) the Building shall be totally damaged or destroyed, (ii) the Building shall be so damaged or destroyed (whether or not the Premises are damaged or destroyed) that repair or restoration shall require more than 270 days or the expenditure of more that 25% percent of the full insurable value of the Building (which, for purposes of this SECTION 9.05(c), shall mean replacement cost less the cost of footings, foundations and other structures below the street and first floors of the Building) immediately prior to the Casualty or (iii) more than 50% of the Premises shall be damaged or destroyed (as estimated in any such case by a reputable contractor, architect or engineer designated by

~~Landlord), then in any such case Landlord may terminate this Lease by notice given to Tenant within 180 days after the Casualty.~~

(d) Within ninety (90) days after notice to Landlord of any Casualty, Landlord shall deliver to Tenant a statement prepared by a reputable contractor selected by Landlord setting forth such contractor's estimate as to the time required for Landlord to substantially complete the repairs required to be performed by it hereunder (the "REPAIR ESTIMATE NOTICE"). If the estimated time period exceeds eighteen (18) months from the date of such statement, Tenant may elect to terminate this Lease by notice to Landlord not later than thirty (30) days following receipt of such statement. If Tenant makes such election, the Term shall expire upon the 30th day after notice of such election is given by Tenant.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (e) If Landlord shall have delivered a notice to Tenant pursuant to SECTION 9.05(d) and no right to terminate this Lease shall have accrued to Tenant by reason thereof, but Landlord shall have failed to substantially complete the repairs by the date which is six (6) months after the date set forth in the Repair Estimate Notice (the "REQUIRED SUBSTANTIAL COMPLETION DATE"), as the same may be extended by reason of Unavoidable Delays (but not in excess of one hundred twenty (120) days), Tenant may elect to terminate this Lease by notice to Landlord given not later than thirty (30) days after the Required Substantial Completion Date and if Tenant makes such election, the Term shall expire on the thirtieth (30th) day after notice of such election is given by Tenant.

(f) Notwithstanding anything to the contrary contained in this SECTION 8.05, if more than twenty-five percent (25%) of the Premises shall be damaged during the last eighteen (18) months of the Term (as the same may be renewed or extended), Landlord or Tenant may elect by notice, given within sixty (60) days after the occurrence of such damage, to terminate this Lease and, if either party makes such election, the Term shall expire upon the sixtieth (60th) day after notice of such election is given by such party.

(g) Landlord shall not carry any insurance on Tenant's Property, Fixtures or on Tenant's Improvements and Betterments and shall not be obligated to repair or replace Tenant's Property, Fixtures or Improvements and Betterments. Tenant shall look solely to its insurance for recovery of any damage to or loss of Tenant's Property, Fixtures or Tenant's Improvements and Betterments. Tenant shall notify Landlord promptly of any Casualty in the Premises.

(h) This SECTION 9.05 shall be deemed an express agreement governing any damage or destruction of the Premises by fire or other casualty and Section 277 of the New York Real property Law providing for such a contingency in the absence of an express agreement, and any other law of like import now or hereafter in force, shall have no application.

~~ARTICLE 9~~

~~MISCELLANEOUS PROVISIONS~~

~~SECTION 9.01. NOTICE. All notices, demands, consents, approvals, advices, waivers or other communications which may or are required to be given by either party to the~~

55 other under this Lease shall be in writing and shall be deemed to have been given one Business Day after deposit in the United States mail, certified or registered, postage prepaid, (return receipt requested) or, rendered if delivered by hand (against a signed receipt) or nationally recognized, overnight courier service (against a signed receipt), and addressed to the party to be notified at the address for such party specified in the first paragraph of this Lease 5 day's notice to the notifying party. In the case of each notice to Landlord, such notice shall be sent to the attention of: Managing Director, Corporate Services, with a copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, Attention: Chris M. Smith, Esq. and, in the case of each notice to Tenant at the Premises to the attention of General Counsel and Chief, Real Estate and Environmental Law Division, Law Department, The Port Authority of New York and New Jersey. Any such bill, statement, consent, notice,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document demand, request or other communication shall be deemed to have been rendered or given on the date when it shall have been delivered (or upon refusal to accept delivery). Notices from Tenant may be given by Tenant's attorney. Notices from Landlord may be given by Landlord's managing agent, if any, or by Landlord's attorney.

SECTION 9.02. BUILDING RULES. Tenant shall comply with, and Tenant shall cause its licensees, employees, contractors, agents and invitees to comply with, the rules of the Building set forth in the Rules and Regulations, as the same may be reasonably modified or supplemented by Landlord from time to time for the safety, care and cleanliness of the Premises and the Building and for preservation of good order therein. Landlord shall not be obligated to enforce the rules of the Building against Tenant or any other tenant of the Building or any other party, and Landlord shall have no liability to Tenant by reason of the violation by any tenant or other party of the rules of the Building; PROVIDED, that Landlord shall not enforce the rules of the Building in a manner which discriminates against Tenant. If any rule of the Building shall conflict with any provision of this Lease, such provision of this Lease shall govern.

SECTION 9.03. SEVERABILITY. If any term or provision of this Lease, or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected, and each provision of this Lease shall be valid and shall be enforceable to the extent permitted by law.

SECTION 9.04. CERTAIN DEFINITIONS. Landlord shall have no liability to Tenant" or words of similar import mean that Tenant is not entitled to terminate this Lease, or to claim actual or constructive eviction, partial, or total, or to receive any abatement or diminution of Rent, or to be relieved in any manner or any of its other obligations under this Lease, or to be compensated for loss or injury suffered or to enforce any other right or kind of liability whatsoever against Landlord under or with respect to this Lease or with respect to Tenant's use or occupancy of the Premises.

SECTION 9.05. QUIET ENJOYMENT. Tenant shall and may peaceably and quietly have, hold and enjoy the Premises, subject to the other terms of this Lease and to Superior Leases and Superior Mortgages, provided that Tenant is not in default of its obligations hereunder beyond any applicable notice and cure periods.

SECTION 9.06. LIMITATION OF LIABILITY (a) Tenant shall look solely to Landlord's interest in the Project, the proceeds of any sale thereof (provided a claim shall have been made within three (3) months of such sale), casualty proceeds and any condemnation award for the recovery of any judgment against Landlord, and no other property or assets of Landlord or Landlord's members, partners, officers, directors, shareholders or principals, direct or indirect, disclosed or undisclosed, shall be subject to levy, execution attachment or other enforcement procedure for the satisfaction of any judgment or Tenant's remedies under or with respect to this Lease, the relationship of Landlord and Tenant hereunder, or Tenant's use and occupancy of the Premises, or any other liability of Landlord to Tenant.

(b) In the event of a transfer of title to the land and Building of which the Premises is a part, or in the event of a lease of the Building of which the Premises is a part, or of the land and Building, upon notification to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Tenant of such transfer or lease, the said transferor landlord named herein shall be and hereby is entirely freed and relieved of all future covenants, obligations and liabilities of Landlord hereunder, and it shall be deemed and construed without further agreement between the parties or their successors in interest, or between the parties and the transferee of title to or lessee of said land and Building, that the transferee or lessee has assumed and agreed to carry out all of the covenants and obligations of Landlord thereunder.

~~(c) Neither the Commissioners of the Port Authority nor any of them nor any officer, employee or agent shall be personally liable for the performance of Tenant's obligations under this Lease.~~

SECTION 9.07. COUNTERCLAIMS. If Landlord commences any summary proceeding or action for nonpayment of Rent or to recover possession of the Premises, Tenant shall not interpose any counterclaim of any nature or description in any such proceeding or action, unless Tenant's failure to interpose such counterclaim in such proceeding or action would result in the waiver of Tenant's right to bring such claim in a separate proceeding under applicable law.

SECTION 9.08. SURVIVAL. All obligations and liabilities of Landlord or Tenant to the other which accrued before the expiration or other termination of this Lease and all such obligations and liabilities which by their nature or under the circumstances can only be, or by the provisions of this Lease may be, performed after such expiration or other termination, shall survive the expiration or other termination of this Lease. Without limiting the generality of the foregoing, the rights and obligations of the parties with respect to any indemnity under this Lease, and with respect to Tax payments and any other amounts payable under this Lease, and with respect to Tax Payments and any other amounts payable under this Lease, shall survive the expiration or other termination of this Lease.

SECTION 9.09. CERTAIN REMEDIES. If Tenant requests Landlord's consent and Landlord fails or refuses to give such consent, Tenant shall not be entitled to any damages for any withholding by Landlord of its consent, it being intended that Tenant's sole remedy shall be an action for specific performance or injunction or for arbitration as provided for in Section 8.19 herein, and that such remedy shall be available only in those cases where this Lease provides that Landlord shall not unreasonably withhold its consent. No dispute relating to this Lease or the relationship of Landlord and Tenant under this Lease shall be resolved by arbitration unless this Lease expressly provides for such dispute to be resolved by arbitration.

SECTION 9.10. NO OFFER. The submission by Landlord of this Lease in draft form shall be solely for Tenant's consideration and not for acceptance and execution. Such submission shall have no binding force or effect and shall confer no rights nor impose any obligations, including brokerage obligations, on either party unless and until both Landlord and Tenant shall have executed a lease and duplicate originals thereof shall have been delivered to the respective parties.

SECTION 9.11. CAPTIONS; CONSTRUCTION. The table of contents, captions, headings and titles in this Lease are solely for convenience of reference and shall not affect its interpretation. This Lease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Lease to be drafted. Each covenant, agreement, obligation or other

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document provision of this Lease on Tenant's part to be performed, shall be deemed and construed as a separate and independent covenant of Tenant, not dependent on any other provision of this Lease.

~~SECTION 9.12. AMENDMENTS. This Lease may not be altered, changed or amended nor any of its provisions waived, except by an instrument in writing signed by the party to be charged.~~

SECTION 9.13. BROKER. Each party represents to the other that such party has dealt with no broker other than Insignia/ESG, Inc. (the "BROKER") in connection with this Lease or the Building, and each party shall indemnify and hold the other harmless from and against all loss, cost, liability and expense (including, without limitation, reasonable attorneys' fees and disbursements) arising out of any claim for a commission or other compensation by any broker other than Broker who alleges that is has dealt with the indemnifying party in connection with this Lease or the Building. Landlord shall pay Broker a commission in accordance with the terms and conditions of a separate agreement between Landlord and Broker.

SECTION 9.14. MERGER. Tenant acknowledges that Landlord has not made and is not making, and tenant, in executing and delivering this Lease, is not relying upon, any warranties, representations, promises or statements, except to the extent that the same are expressly set forth in this Lease. This Lease embodies the entire understanding between the parties with respect to the subject matter hereof, and all prior agreements, understanding and statements, oral or written, with respect thereto are merged in this Lease.

SECTION 9.15. SUCCESSORS. This Lease shall be binding upon and inure to the benefit of Landlord, its successors and assigns, and shall be binding upon and inure to the benefit of Tenant, its successors, and Tenant's permitted assigns.

~~SECTION 9.16. APPLICABLE LAW. This Lease shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any principles of conflicts of laws.~~

SECTION 9.17. NO DEVELOPMENT RIGHTS. Tenant acknowledges that it has no rights to any developments rights, air rights or comparable rights appurtenant to the Project, and Tenant consents, without further consideration, to any utilization of such rights by Landlord. Tenant shall promptly execute and deliver any instruments which may be requested by Landlord,

58 including instruments merging zoning lots, evidencing such acknowledgement and consent. The provisions of this SECTION 9.17 shall be construed as an express waiver by Tenant of any interest Tenant may have as a "party in interest" (as such term is defined in Section 12-10 Zoning Lot of the Zoning Resolution of the City of New York) in the Project.

SECTION 9.18. SURRENDER. Upon the expiration or earlier termination of this Lease, Tenant shall quit and surrender to Landlord the Premises, vacant, broom clean, in good order and condition, ordinary wear and tear, casualty, condemnation and damage for which Tenant is not responsible under the terms of this Lease excepted, provided, however, that the foregoing shall not obligate Tenant to restore the Premises to any greater condition than was delivered to Tenant by Landlord. Tenant expressly waives, for itself and for any person claiming through or under Tenant, any rights which Tenant or any such person may

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document have under the provisions of Section 2201 of the New York Civil Practice Law and Rules and of any successor law of like import then in force in connection with any holdover summary proceedings which Landlord may institute to enforce the foregoing provisions of this Section 9.18. Tenant acknowledges that possession of the Premises must be surrendered to Landlord on the Expiration Date.

SECTION 9.19. ARBITRATION. If expressly permitted under this Lease, Landlord or Tenant (the "ELECTING PARTY") may elect to resolve a dispute by arbitration pursuant to the provisions of this Section. Such Electing Party shall deliver to the other party a written notice specifying the nature of the dispute, the reasons therefor and such Electing Party's determination of the item in dispute. If the other party shall not agree with the Electing Party's determination of the item in dispute, then either party shall have the right to submit such dispute to arbitration pursuant to this SECTION 9.19 by notice to the other party. The parties hereby agree that all such disputes submitted to arbitration shall be resolved by an arbitrator mutually agreed to by the parties, and if the parties cannot agree on an arbitrator, either party may apply to the American Arbitration Association for the appointment of an arbitrator (the "ARBITRATOR"). The Arbitrator shall, as promptly as possible, determine the matter which is the subject of the arbitration and the decision of the Arbitrator shall be conclusive and binding on all parties and judgment upon the award may be entered in any court having jurisdiction. The arbitration shall be conducted in the City and County of New York and, to the extent applicable and consistent with this SECTION 9.19, shall be in accordance with the Commercial Arbitration Rules then obtaining of the American Arbitration Association or any successor body of similar function. The expenses of arbitration shall be shared equally by the parties but each party shall be responsible for the fees and disbursements of its own attorneys and the expenses of its own proof. The Arbitrator shall be a licensed professional appropriate to the dispute, having at least ten (10) years' continuous experience in the real estate industry including the management of multi-tenant, commercial office buildings in Manhattan similar in type to the Project. At the option of either party, any arbitration under this Lease shall be governed by the Expedited Procedures provisions of the Commercial Arbitration Rules of the American Arbitration Association (the "AAA RULES") (presently Section 53 through 57 of the AAA Rules and, to the extent applicable, Section 19 thereof).

SECTION 9.20. SIGNAGE. Tenant shall be permitted to install, at its sole cost and expense, signs identifying Tenant in the elevator lobby of the Initial Premises and the Additional Premises, subject to Landlord's reasonable approval as to design and materials. Landlord, at

Landlord's option, shall either (i) in the Building lobby a sign of appropriate size and suitable design identifying Tenant as an occupant of the Building, (ii) maintain a Building directory in which Tenant shall be allocated an appropriate number of listings, or (iii) provide some other reasonable and appropriate means of indicating in the lobby of the Building that Tenant is an occupant of the Building and Tenant's location therein, provided, that, with respect to the matters set forth in clauses (ii) and (iii) above, Landlord agrees that the directory related services or means of identification Landlord provides to Tenant described therein shall be at least commensurate in quality and extensiveness with the directory related services or means of identification Landlord provides to Overlandlord.

~~SECTION 9.21. ATTORNEYS' FEES. Each party shall reimburse the other party, within twenty (20) days following written demand, for all reasonable~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document costs and expenses (including reasonable attorneys' fees, disbursements and court costs) incurred by such other party in connection with enforcing such other party's obligations hereunder or in protecting such other party's rights hereunder, whether incurred in connection with an action or proceeding commenced by Landlord, by Tenant, by a third party or otherwise, if such other party is successful in such proceeding.

SECTION 9.22. COUNTERPARTS. This Lease may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Lease to produce or account for more than one such counterpart.

SECTION 9.23. INVOICES. Wherever in the Lease it is provided that either party shall render a bill or invoice to the other, the party giving such bill or invoice shall include evidence of the amounts set forth in the bill or invoice.

~~ARTICLE 10~~

~~SUBLEASE PROVISIONS~~

SECTION 10.01.SUBLEASE PROVISIONS. (a) Notwithstanding the title of this document as "Lease", the parties acknowledge that this Lease is a sublease. This Lease is subject to, and Tenant accepts this Lease subject to, all of the terms, covenants, provisions, conditions and agreements contained in the Overlease and the matters to which the Overlease is subject and subordinate. This Lease shall also be subject to, and Tenant accepts this Lease also subject to, any future amendments or supplements to the Overlease hereafter made between Overlandlord and Landlord, provided that any such future amendment or supplement to the Overlease, except as herein expressly recognized, contemplated or agreed, does not in any material respect increase Tenant's obligations or decrease Tenant's rights from, out of or under this Lease or prohibit Landlord from meeting its obligations under hereunder. Except to the extent provided in this Subordination and Non-Disturbance Agreement between Tenant and Overlandlord, in the event of termination, re-entry or dispossess by Overlandlord under the Overlease, Overlandlord may, at its option, take over all of the right, title and interest of Landlord, as sublessor, under this Lease, and Tenant shall, at Overlandlord's option, attorn to

Overlandlord pursuant to the then executory provisions of this Lease, except that Overlandlord shall not (i) be liable for any previous act or omission of Landlord under this Lease, (ii) be subject to any offset, not expressly provided in this Lease, which theretofore accrued to Tenant against Landlord, or (iii) be bound by any previous modification of this Lease made without Overlandlord's consent or by any previous prepayment of more than one month's rent. In the event of any conflict between the terms of any Subordination and Non-Disturbance Agreement entered into between Tenant and Overlandlord and the provisions of this Lease, including the foregoing sentence, the terms and provisions of the Subordination and Non-Disturbance Agreement shall govern.

(b) The term "Landlord", as used in this Lease, shall mean only the owner from time to time of the interest of the tenant under the Overlease. In the event of any transfer or assignment of such interest, the transferor or assignor shall be relieved and freed of all covenants, obligations and liability of Landlord under this Lease accruing after such transfer or assignment, and it

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall be deemed, without further agreement, that the transferee or assignee has assumed and agreed to perform and observe all obligations of Landlord under this Lease subsequent to the effective date of the transfer or assignment.

(c) Whenever Landlord has agreed that a required consent or approval shall not be withheld or delayed or unreasonably withheld or delayed, Landlord may withhold its consent or approval and/or it shall be deemed reasonable for Landlord to withhold or delay its consent or approval if Overlandlord, to the extent its consent is required pursuant to the terms of the Overlease, shall have delayed or refused to give any consent or approval which may be requested of it. Landlord shall promptly forward to Overlandlord such requests as Tenant may submit for approval or consent from Overlandlord. In the event a matter hereunder requires the consent of Overlandlord pursuant to the terms hereof or the Overlease and the time period for obtaining Overlandlord's consent to a particular matter under the Overlease exceeds the time period set forth in the Lease with respect to such matter, such time period in the Lease shall be extended to the date set forth in the Overlease, plus an additional five (5) Business Days. If Landlord is willing to grant its consent to Tenant to a particular matter and Overlandlord is not willing to grant such consent, Landlord shall use good faith efforts to intermediate with Overlandlord to obtain such consent (without the obligation to spend sums of money, grant any concessions to Overlandlord under the Overlease or undertake any other significant monetary or non-monetary measures) and Tenant shall have the right to take whatever action may available at law or under the Overlease to obtain such consent in its own name, and for that purpose and only to such extent, all of the rights of Landlord under the Overlease hereby are conferred upon and assigned to Tenant and Tenant is subrogated hereby to such rights to the extent that the same shall apply to the matter for which consent is sought. If any such action against Overlandlord in Tenant's name shall be barred by reason of lack of privity, nonassignability or otherwise, Tenant may take such action in Landlord's name provided Tenant has obtained the prior written consent of Landlord, which consent shall not be unreasonably withheld, provided, and Tenant hereby agrees, that Tenant shall indemnify and hold Landlord harmless from and against all liability, loss, damage or expense, including, without being limited to, reasonable attorneys' fees and expenses, which Landlord shall suffer or incur by reason of such action. Landlord agrees to cooperate with Tenant in any reasonable manner requested by Tenant in connection with an action or proceeding by Tenant against Overlandlord to enforce Landlord's rights under the Overlease in respect of such consent; PROVIDED, HOWEVER, that Tenant shall have agreed in writing

~~61 to reimburse Landlord for any out-of-pocket expenses incurred by Landlord in connection with such cooperation~~

(d) Tenant covenants and agrees to perform (including to refrain from any action not permitted on the part of Landlord under the Overlease) and to observe all of the covenants, agreements, terms, provisions and conditions of the Overlease on the part of the Landlord to be performed and observed, to the extent that they apply to the Premises or the use and occupancy by Tenant of the Premises and the services and facilities of the Building. Tenant also covenants and agrees not to do or cause to be done or suffer or permit any act or thing to be done or suffered which would or might (i) constitute or cause a default under the Overlease, (ii) cause the Overlease or the rights of Landlord as tenant thereunder to be canceled, terminated or forfeited, (iii) cause Landlord to become liable for any damages, costs, claims or penalties, or (iv) adversely affect or reduce any of Landlord's rights or benefits under the Overlease.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Without limiting the generality of foregoing, Tenant acknowledges that Landlord is obligated pursuant to the terms of the Overlease, including, without limitation, Section 27.26 thereof, to reasonably cooperate with Overlandlord in connection with the conversion of the Building ownership to a synthetic condominium in connection with a transaction with the New York City Industrial Development Agency. Tenant agrees that it shall reasonably cooperate with Landlord to the extent necessary for Landlord to fulfill its obligations under the Overlease in connection with the foregoing condominium conversion, provided that Tenant's rights and obligations under the Lease shall not be adversely affected thereby, except to a DE MINIMIS extent. Tenant agrees to indemnify, defend and hold Landlord harmless of, from and against any and all liabilities, losses, damages, suits, penalties, claims and demands of every kind or nature, including, without being limited to, reasonable attorneys' fees and expenses of defense and of enforcing this indemnity, by reason of Tenant's failure to comply with the foregoing provisions of this clause (d) or arising from the use, occupancy or manner of use and/or occupancy of the Premises or of any business conducted therein, or from any work or thing whatsoever done or any condition created by or any other act or omission of Tenant, its assignees or subtenants, or their respective employees, agents, servants, contractors, invitees, visitors or licensees, in or about the Premises or any other part or the Building, provided, however, that Tenant shall not be obligated to indemnify Landlord with respect to the acts and omissions of its invitees and visitors committed outside of the Premises to the extent such parties were not specifically authorized or invited by Tenant to enter the Building, it being understood that, without limiting the generality of the foregoing, that messengers from outside companies, delivery personnel, federal express and other courier service workers bringing packages to Tenant shall be deemed to be "not specifically authorized or invited" for the purposes of this Section.

(e) Landlord covenants and agrees to perform and observe all of the terms, covenants, provisions, conditions and agreements of the Overlease (including any and all rules and regulations which shall be in effect from time to time during the term of this Lease) in such manner so as to prevent the Overlease from being terminated and so as to not adversely affect or reduce the rights and benefits of Tenant under the Lease, it being understood that the foregoing relates solely to Landlord's compliance with the Overlease in accordance with its terms and shall not be deemed or construed to obligate Landlord to seek to amend or contest, or otherwise act in any manner in contradiction to the express terms of the Overlease, or to commence any action against Overlandlord. Landlord represents that the Overlease is in full force and effect and that, to the best of Landlord's knowledge, Landlord is not in default with respect to any material

62 obligation of Landlord under the Overlease. Provided that Tenant is not then in default under the terms of this Lease, Landlord agrees that it will not agree to a termination of the Overlease unless in connection therewith Overlandlord accepts this Lease as direct lease between Overlandlord and Tenant. Unless the parties have otherwise entered into a Subordination and Non-Disturbance Agreement, the terms of which will govern, if Landlord desires to terminate the Overlease, Tenant agrees to attorn to Overlandlord in connection with any such termination and to execute an attornment agreement in such form as may reasonably be requested by Landlord or Overlandlord. Landlord further covenants and agrees that if and so long as Tenant pays the Fixed Rent and Additional Charges and performs and observes all of the agreements, terms, conditions, covenants and provisions hereof, (i) Tenant shall quietly hold and enjoy the Premises, subject, however, to the terms of this Lease and the Overlease and to

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the matters to which the Overlease is subject and subordinate, and (ii) Landlord shall not do or suffer or permit anything to be done or suffered which would cause the Overlease to be cancelled, terminated or forfeited, except as provided in the casualty and condemnation sections contained therein.

(f) Tenant acknowledges and agrees that all services, repairs, restorations, and access to and from the Premises may be provided by Overlandlord, particularly during the Gross Lease Period (as defined in the Overlease), and Landlord shall have no obligation during the term of this Lease to provide any such services, repairs, restorations, equipment and access to the extent the same is an obligation of Overlandlord under the Overlease. Tenant agrees to look solely to Overlandlord for the furnishing of such services, repairs, restorations, equipment and access. Landlord shall in no event be liable to Tenant nor shall the obligations of Tenant hereunder be impaired or the performance thereof excused because of any failure or delay on Overlandlord's part in furnishing such services, repairs, restorations, equipment and access; PROVIDED, HOWEVER, that if Landlord's rent is actually abated pursuant to the Overlease in respect of the Premises with respect to a service or condition that Overlandlord is required to provide or maintain, then Fixed Rent payable hereunder by Tenant shall also be abated during the same period that Landlord's rent is so abated. If Overlandlord shall default in any of its obligations to Landlord with respect to the Premises, Tenant shall be entitled to participate with Landlord in the enforcement of Landlord's rights against Overlandlord, but Landlord shall have no obligation to bring any action or proceeding or to take any steps to enforce Landlord's rights against Overlandlord. If, after written request from Tenant, Landlord shall fail or refuse to take appropriate action for the enforcement of Landlord's rights against Overlandlord in respect of the Premises within a reasonable period of time considering the nature of Overlandlord's default, Tenant shall have the right to take such action in its own name, and for that purpose and only to such extent, all of the rights of Landlord under the Overlease hereby are conferred upon and assigned to Tenant and Tenant is subrogated hereby to such rights to the extent that the same shall apply to the Premises. If any such action against Overlandlord in Tenant's name shall be barred by reason of lack of privity, nonassignability or otherwise, Tenant may take such action in Landlord's name provided Tenant has obtained the prior written consent of Landlord, which consent shall not be unreasonably withheld, provided, and Tenant hereby agrees, that Tenant shall indemnify and hold Landlord harmless from and against all liability, loss, damage or expense, including, without being limited to, reasonable attorneys' fees and expenses, which Landlord shall suffer or incur by reason of such action. Landlord agrees to cooperate with Tenant in any reasonable manner requested by Tenant in connection with an action or proceeding by Tenant against Overlandlord to enforce Landlord's rights under the Overlease in respect of the

~~Premises; PROVIDED, HOWEVER, that Tenant shall have agreed in writing to reimburse Landlord for any out-of-pocket expenses incurred by Landlord in connection with such cooperation.~~

(g) This Lease is subject to and conditioned upon Landlord's obtaining the prior written consent of Overlandlord hereto as provided in Article 14 of the Overlease. Promptly following execution and delivery hereof, Landlord will submit this Lease to Overlandlord for such consent. Tenant agrees that it shall cooperate in good faith with Landlord and shall comply with any reasonable request made of Tenant by Landlord or Overlandlord in connection with the procurement of such consent including, without being limited to, the execution

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and delivery of a written form of Consent to Sublease. However, in no event shall Landlord be obligated to make any payment to Overlandlord in order to obtain the consent of Overlandlord to this Lease or any provision hereof. In the event that Overlandlord has not executed the form of Overlandlord Consent attached hereto as Exhibit G (or such other form of consent as may be reasonably acceptable to Tenant) on or prior to November 30,12001, then either party hereto shall have the right to terminate this Lease on five (5) Business Days prior written notice to the other, in which event this Lease shall terminate and the parties hereto shall be fully discharged and released from all obligations hereunder. In the event that Overlandlord has not executed the Subordination and Non-Disturbance Agreement substantially in the form attached hereto as Exhibit F on or prior to November 30, 2001, the Tenant shall have the right, upon five (5) Business Days prior written notice to Landlord to terminate this Lease, in which event this Lease shall terminate and the parties hereto shall be fully discharged and released from all obligations hereunder.

~~ARTICLE 11A~~

~~REPRESENTATIONS AND WARRANTIES~~

~~SECTION 11.01. LANDLORD'S REPRESENTATIONS AND WARRANTIES. (a) Landlord hereby represents and warrants to Tenant that, as of the date hereof:~~

~~(b) This Lease has been duly authorized by all necessary action on the part of Landlord.~~

~~(c) The person executing this Lease on behalf of Landlord, has full power and authority to execute and deliver this Lease on behalf of Landlord and perform any action in connection therewith.~~

(d) The execution, delivery and performance of this Lease by Landlord, and the consummation of the transaction contemplated hereby, will not result in any violation of, or be in conflict with or constitute a default under any term or provision of the operating agreement or governing corporate documents of Landlord.

(e) Except for the consent of Overlandlord, no consent, approval or authorization is required in connection with the execution, delivery and performance hereof by Landlord from any governmental entity or agency, or any party pursuant to any contract, mortgage, credit agreement, lease or other agreement or instrument to which Landlord is a party or by which it is bound.

~~(f) Landlord knows of no outstanding claims, actions, suits, or proceedings affecting Landlord that, if adversely determined, would have a material adverse effect upon the operation of the Project.~~

~~SECTION 11.02. TENANT'S REPRESENTATIONS AND WARRANTIES. (a) Tenant hereby represents and warrants to Landlord that, as of the date hereof:~~

~~(b) This Lease has been duly authorized by appropriate action of its Commissioners.~~

(c) The officer executing this Lease on behalf of Tenant has all necessary licenses, authorization, permits and approvals, and full power and authority, to execute and deliver this Lease on behalf of Tenant and perform any action in connection therewith.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) The execution, delivery and performance of this Lease by Tenant, and the consummation of the transaction contemplated hereby, will not result in any violation of, or be in conflict with or constitute a default under:

~~(i) any term or provision of the articles or certificate of incorporation, by-laws and/or any other similar document of Tenant.~~

~~(ii) any term or condition of any contract, mortgage, loan agreement, lease, or other agreement or instrument to which Tenant is a party or by which it is bound; or~~

(iii) any term or condition of any judgment, decree, order, law, statute, rule, regulation, ordinance, franchise, certificate, permit or the like applicable to Tenant or by which Tenant or its properties or assets are bound or affected.

(e) No consent, approval or authorization is required in connection with the execution, delivery and performance hereof by Tenant from any governmental entity or agency, or any party pursuant to any contract, mortgage, credit agreement, lease or other agreement or instrument to which Tenant is a party or by which it is bound.

(f) Tenant knows of no outstanding claims, actions, suits, or proceedings affecting Tenant that, if adversely determined, would have a material adverse effect upon the financial condition of Tenant or upon the operation of the Premises.

~~IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first written above.~~

~~Landlord: CREDIT SUISSE FIRST BOSTON (USA), INC.~~

~~By: /s/ Andrew B. Federbusch ------Name: ANDREW B. FEDERBUSCH Title: MANAGING DIRECTOR~~

~~Tenant: THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY~~

~~By: ------Cherrie Nanninga Director Real Estate Department~~

~~Tenant's Federal Tax I.D. No.: ------~~

~~I-69~~

~~IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first written above.~~

~~Landlord: CREDIT SUISSE FIRST BOSTON (USA), INC.~~

~~Tenant: THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY~~

~~By: /s/ Cherrie Nanninga ------Cherrie Nanninga Director Real Estate Department~~

~~Tenant's Federal Tax I.D. No.: ------~~

~~I-69~~

~~Metropolitan Life Insurance Company Real Estate Investments (EIM) 200 Park Avenue / 12th Floor New York, New York 10166~~

~~October 30, 2001~~

~~Credit Suisse First Boston (USA), Inc. Eleven Madison Avenue New York, New York 10010~~

Re: Agreement of Lease dated February 22, 2001 (the "Lease") between Metropolitan Life Insurance Company ("Landlord") and Credit Suisse First Boston (USA), Inc. ("Tenant") demising the building known as One Madison Avenue, New York, New York 10010 (the "Demised Premises")

~~Gentlemen:~~

In accordance with your request, Landlord, having declined its option to recapture the Demised Premises, hereby grants its consent (the "Consent") to the execution and delivery of the sublease (the "Sublease") dated October 30, 2001 between Tenant, as sublessor, and The Port Authority of New York and New Jersey, ("Subtenant"), a body corporate and politic, created by compact between the States of New York and New Jersey, with the consent of the Congress of the United States of America, having an office at 225 Park Avenue South, New York, New York 10003 as sublessee of portions of the Demised Premises as more particularly in the Sublease (the "Sublet Space"), subject to the following terms and conditions:

~~1. This consent shall not be assignable.~~

~~2. This Consent is for this transaction only.~~

3. The Sublet Space may be used and occupied, solely as general, executive and administrative offices keeping with the character and reputation in a manner befitting a "First-Class Office Building", by the following departments of Subtenant (collectively, the "Permitted Users"), and none other without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed: Law Department, Comptroller's Department, Aviation Department (headquarters staff), Treasury Department, Technology

~~Services Department and Tunnel, Bridges and Terminals Department (headquarters staff).~~

4. Solely with respect to the Sublease to Subtenant (and any "Permitted Successor Entity", hereinafter defined in this Paragraph 4) for the exclusive use of the Sublet Space by the Permitted Users and none others, Landlord hereby expressly waives the "Prohibitions" contained in Section 6.2.(a)(i) of the Lease further provided that notwithstanding the foregoing, nothing herein contained shall be deemed or construed to modify, waive, impair or affect any of the provisions, covenants, agreements, terms or conditions contained in the Lease (except as may be herein expressly provided), or to waive any breach thereof, or any right of Landlord against Tenant, or to enlarge or increase Landlord's obligations under the Lease, and all provisions, covenants, agreements, terms and conditions contained in the Lease are (except as expressly herein modified, waived, impaired or affected) hereby ratified and confirmed as being in full force and effect. As used herein, the term "Permitted Successor Entity" shall mean (i) an entity that is merged with Subtenant; (ii) a governmental or quasi-governmental entity that succeeds to subtenant; or (iii) an entity that is newly created by the State of New York and/or the State of New Jersey further provided that the departments of the Permitted Successor Entity that would occupy the Sublet Space are substantially comparable to the Permitted Users with respect to the functions to be performed.

5. Notwithstanding any subletting provided for herein, Tenant shall be and remain fully liable for payment of the rent, additional rent due and all other sums to become due under the Lease and for the performance of all the covenants, agreements, terms, provisions and conditions contained in the Lease on the part of Tenant to be performed and all acts and omissions of Subtenant or anyone claiming under or through Subtenant which shall be in violation of any of the covenants, agreements, terms, provisions and conditions contained in the Lease, shall be deemed a violation by Tenant.

6. The Sublease shall be subject and subordinate at all times to the Lease, to all of the provisions, covenants, agreements, terms and conditions contained in the Lease and in this Consent, and to the matters to which the Lease and this Consent are or shall be subject and subordinate, and Subtenant shall not do or permit anything to be done which may or shall violate any of said provisions, covenants, agreements, terms and conditions and matters. The use of the Demised Premises as general and executive business offices, shall not be deemed such a violation.

7. This Consent shall not be deemed or construed as a consent by Landlord to, or as permitting, any other or further subletting by Tenant or anyone claiming under or through Tenant (including without limitation,

Subtenant), and no other or further sublease of the premises demised by the Lease or any part thereof or any assignment of the Lease or of the Sublease shall be made by Tenant or anyone claiming under or through Tenant (including without limitation, Subtenant) without Landlord's prior written consent in each instance. Notwithstanding the foregoing, expressly subject and subordinate to Landlord's "right of recapture" contained in the Lease, Landlord agrees that its consent to one (1) such further subletting shall not be unreasonably withheld or denied.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. In the event of termination, re-entry or dispossess by Landlord under the Lease, expressly provided (i) Subtenant is not in default, subject to applicable notice and cure periods under the Sublease, and (ii) all payments of annual rent and additional rent due under the Sublease being current, Landlord agrees not to disturb Subtenant's possession of the Sublet Space and to take over all of the right, title and interest of Tenant, as sublessor, under the Sublease, and Subtenant shall attorn to Landlord pursuant to the then executory provisions of the Sublease, except that Landlord shall not (i) be liable for any previous act or omission of Tenant under the Sublease, (ii) be subject to any offset which theretofore accrued or may thereafter accrue to Subtenant against Tenant, or (iii) be bound by any previous modification of the Sublease or by any previous prepayment of more than one (1) month's rent.

~~9. The Sublease shall not be valid, and Subtenant shall not take possession of the Sublet Space or any part thereof, until an executed counterpart of the Sublease has been delivered to Landlord.~~

10. Notwithstanding any provision of the Sublease to the contrary, the term of the Sublease (including any extension or renewal thereof, if any) shall expire and terminate at least one (1) day prior to the expiration date of the Lease.

11. Except as otherwise provided in paragraph 8 of this Consent, nothing contained herein or in the Sublease shall or shall be deemed to create any landlord-tenant relationship between Landlord and Subtenant.

12. Tenant and Subtenant warrant and represent to Landlord that they have had no dealings, conversations or negotiations with any broker other than Insignia/ESG, Inc. (the "Broker") concerning the execution and delivery of the Sublease. Tenant agrees to pay the commission of the Broker, if any, further provided that Tenant and Subtenant each agree to defend, indemnify and hold harmless Landlord against and from any claims by the Broker or other party claiming to have dealt with them for any brokerage commissions in connection with the Sublease and all costs, expenses and liabilities in connection therewith, including, without limitation, reasonable attorneys' fees

~~3 and disbursements, arising out of their respective representations and warranties contained in this Paragraph 12 being untrue.~~

13. Tenant and Subtenant each acknowledges, as contained in the Lease, that there are general tenant guidelines for the Building covering construction, maintenance, repair or other work. Tenant and Subtenant each agrees that all repairs, renovations, alterations, installations, additions and improvements and other activities within the scope of the general tenant guidelines for the Building (including, without limitation, electrical and communications systems and fireproofing) effected by or on behalf of Tenant and/or Subtenant in the Sublet Space shall be conducted in accordance with and pursuant to the aforesaid tenant guidelines, as well as any applicable governmental requirements and regulations. Tenant and Subtenant each agrees that it is their responsibility to ensure that Tenant and Subtenant and those working for them and/or either of them comply with the aforesaid tenant guidelines as well as any other applicable governmental requirements and regulations. Tenant and Subtenant each acknowledges that they are aware that the aforesaid tenant guidelines are available for their reference and use in the Building Manager's Office.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 14. In the event of any inconsistency between the terms and conditions of this Consent and the terms and conditions of the Sublease, the terms and conditions of this Consent shall govern.

Upon the return to Landlord of six counterpart copies hereof with the acceptance of Tenant and Subtenant endorsed thereon, not later than ten (10) business days from the date hereof, this Consent shall be deemed to be the binding obligation of each party in respect of all matters herein required on the part of such party to be done or performed. In the event this Consent is not executed by duly authorized officers of Tenant and Subtenant and returned to Landlord within ten (10) days from the date hereof, this Consent, at Landlord's option, shall be deemed to be null and void and of no force and effect.

~~Very truly yours, Metropolitan Life Insurance Company, Landlord~~

~~By: /s/ W. Mark Keeney ------W. Mark Keeney, Vice-President~~

~~The undersigned hereby agree to the terms, provisions and conditions of this letter agreement as set forth above this 30th day of October, 2001~~

~~Credit Suisse First Boston (USA), Inc., Tenant~~

~~By: /s/ Andrew B. Federbusch ------Its MANAGING DIRECTOR~~

~~The Port Authority of New York and New Jersey, Subtenant~~

~~By: /s/ [ILLEGIBLE] ------Its Director of Real Estate~~

~~OVER LANDLORD'S NON-DISTURBANCE AGREEMENT AND SUBTENANT'S AGREEMENT TO ATTORN~~

This Agreement, made as of this 30th day of October, 2001, by and between METROPOLITAN LIFE INSURANCE COMPANY, a corporation organized and existing under the laws of the State of New York, having its principal office and place of business located at 200 Park Avenue, New York, New York 10166 (hereinafter referred to as "OVERLANDLORD") and THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, a body corporate and politic, created by compact between the States of New York and New York, with the consent of the United States of America, having an office and place of business located at 225 Park Avenue South, New York, New York 10003 (hereinafter referred to as "SUBTENANT").

~~WHEREAS, Overlandlord is the present holder of the fee estate land and in the building located at One Madison Avenue, New York, New York (hereinafter referred to as the "BUILDING");~~

WHEREAS, by indenture of lease (hereinafter referred to as the "LEASE") dated February 22, 2001, between Overlandlord, as landlord, and Credit Suisse First Boston (USA) Inc., as tenant (hereinafter referred to as "TENANT"), Overlandlord leased the Building to Tenant;

WHEREAS, Tenant, as sublandlord, and Subtenant, as subtenant, entered into a certain sublease of space in the Building dated as of October ____, 2001, which sublease is hereinafter referred to as "SUBLEASE" and the premises demised thereby are hereinafter referred to as "DEMISED PREMISES" and which Demised Premises are more particularly described in the Sublease;

WHEREAS, Subtenant has requested that Overlandlord agree not to disturb Subtenant's possessory rights in the Demised Premises in the event that Overlandlord should terminate the Tenant's interest in the Lease or otherwise cancels the Lease provided that Subtenant is not in default under the Sublease (for a period in excess of the applicable grace period contained in the Sublease) and further provided the Subtenant attorns to Overlandlord; and

~~WHEREAS, Overlandlord is willing to so agree on the terms and conditions hereinafter provided.~~

~~NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein and TEN ($10.00) DOLLARS and other good and valuable consideration each to~~

~~I-1 the other in and paid, receipt of which is hereby acknowledged, Overlandlord and Subtenant hereby agree as follows:~~

~~1. The Sublease is and shall be subject and subordinate in all respects to the Lease and to all renewals, modifications, replacements, amendments and/or extensions of the same.~~

2. a. Subject to the provisions of Section 2(b) below, provided Subtenant complies with this Agreement and is not in default under the Sublease of (A) any payment of rent or additional rents called for under the Sublease (for a period in excess of the applicable grace period contained in the Sublease), or (B) in the performance of any of the other terms, conditions, covenants, clauses or agreements on Subtenant's part to be performed under the Sublease (for a period in excess the applicable grace period contained in the Sublease), then as of the date Overlandlord cancels or terminates the Lease for any reason before the expiration date or earlier termination date provided in the Sublease, as the same may have been modified, extended, renewed and/or replaced, no cancellation or termination of the Lease will disturb Subtenant's possession under the Sublease and the Sublease will not be affected or cut off thereby (except that Subtenant's right to receive or set off any monies or obligations owed or to be performed by the Tenant or the successors or assigns to Tenant's interest in the Lease shall not be enforceable thereafter against Overlandlord or any subsequent fee owner of the Building) and notwithstanding any such termination or cancellation of the Lease or other acquisition of the Tenant's interest in the Lease and merger with the Overlandlord's fee interest

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in the Building, the Sublease will be recognized as a direct lease from Overlandlord or any subsequent holder of the fee estate in the Building, except that the Overlandlord or any subsequent holder of the fee estate in the Building shall not (a) be liable for any previous act or omission under the Sublease by the holder of the Lease interest, (b) be subject to any offset which Subtenant may have against Tenant, (c) have any obligation with respect to any security deposited under the Sublease unless such security has been physically delivered to Overlandlord, (d) be bound by any previous modification of the Sublease or by any previous prepayment of rent for a period greater than one (1) month, unless such modification or prepayment shall have been expressly approved in writing by the Overlandlord, or (e) be obligated to complete or permit the construction of any improvements under the Sublease.

b. Notwithstanding anything contained herein or in the Sublease, in the event that the rent and additional rent under the Sublease (after deducting therefrom an amount equal to the impositions payable by Tenant under the Lease prorated on a rentable square foot basis with respect to the Demised Premises and an amount equal to the expenses payable by Tenant to provide to the Demised Premises with the services required to be provided under the Sublease prorated on a rentable square foot basis) (such net rent herein called the "SUBLEASE NET RENT") shall be less than the portion of the Minimum Rent (as defined in the Lease) payable by the Tenant prorated on a rentable square foot basis with respect to the Demised premises (the "APPLICABLE MINIMUM RENT"); then, effective as of the date of aforementioned attornment and recognition, the Sublease shall be deemed to be automatically

~~I-2~~

amended to increase the Sublease Net Rent to an amount equal to the Applicable Minimum Rent and to provide for Subtenant to continue to pay additional rent under the Sublease at least equal to the sum of (i) the Impositions payable by Tenant under the Lease prorated on a rentable square foot basis with respect to the Demised Premises and (ii) an amount equal to the expenses payable by Tenant to provide to the Demised Premises with the services required to be provided under the Sublease prorated on a rentable square foot basis.

3. If Overlandlord elects to accept from the then holder of Tenant's interest in the Lease a surrender or an assignment of the leasehold interest in the Lease in lieu of canceling or terminating the Lease, Tenant's right to receive or set off any monies or obligations owed or to be performed by the then holder of the leasehold interest in the Lease shall not be enforceable thereafter against Overlandlord or any subsequent holder of the fee estate in the Building.

4. Subtenant will, upon request of the Overlandlord or any subsequent holder of the fee estate in the Building, execute a written agreement whereunder Subtenant (A) confirms this attornment to Overlandlord or any such subsequent holder of the fee estate in the Building, (B) affirms Subtenant's obligations under the Sublease, (C) agrees to pay all rentals and charges then due or to become due as they become due to Overlandlord or any such subsequent holder of the fee estate in the Building, and (D) confirms the automatic amendments to the Sublease provided for in Section 2(b) above.

5. Subtenant from and after the date hereof shall send a copy of any notice of default or statement of default under the Sublease to Overlandlord at the same time such notice or statement is sent to the landlord under the

6. Subtenant hereby agrees that from and after the date hereof in the event of any act or omission by the landlord under the Sublease which would give Subtenant the right, either immediately or after the lapse of a reasonable period of time, to terminate the Sublease, or to claim a partial or total eviction, Subtenant will not exercise any such right (i) until it has given written notice of such act or omission to Overlandlord by delivering such notice of such act or omission, by certified mail, return receipt requested, addressed to Overlandlord, at the Overlandlord's address as given herein (Metropolitan Life Insurance Company, 200 Park Avenue, New York, New York 10166, Attention: Vice President, Real Estate Investments (EIM), 12th Floor, with a duplicate thereof, simultaneously being sent by the same mailing procedure to Metropolitan Life Insurance Company, 200 Park Avenue, New York, New York 10166, Attention: Attorney-in-Charge, Law/REI 12th Floor, and to Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036, Attention: Mark Lipschutz, Esq.), or at the last address of Overlandlord, furnished to Subtenant in writing and (ii) until a reasonable period for remedying such act or omission shall have elapsed following such giving of notice and following the time when Overlandlord shall have become entitled under the Sublease to remedy the same; provided that Overlandlord, at its option

~~I-3 shall, following the giving of such notice, have elected to commence and continue to remedy such act or omission or to cause the same to be remedied.~~

7. Subtenant will neither offer nor make prepayment of rent (for a period in excess of one month) nor further change the terms, covenants, conditions and agreements of the Subtenant in any manner without the express consent in writing of the Overlandlord, except for those modifications which would have been permitted under Article 14 of the Lease had they been made at the time the Sublease was executed.

8. No modification, amendment, waiver or release of any provision of this Agreement or of any right, obligation, claim or clause of action arising hereunder shall be valid, or binding for any purpose whatsoever unless in writing and duly executed by the party against whom the same is sought to be asserted.

9. This Agreement shall inure to the benefit of the parties hereto, their successors and assigns; provided, however, that in the event of the assignment or transfer of the interest of Overlandlord, all obligations and liabilities of Overlandlord under this Agreement thereafter accruing shall terminate, and thereupon all such obligations and liabilities shall be the responsibility of the party to whom Overlandlord's interest is assigned or transferred; and provided further that the interest of Subtenant under this Agreement may not be assigned or transferred except in connection with an assignment permitted under and in accordance with the terms of the Sublease.

10. Subtenant agrees that this Agreement satisfies any condition or requirements in the Sublease relating to the granting of a non-disturbance agreement from the fee owner of the real property of which the Demised Premises are a part.

11. In the event that Overlandlord notifies Subtenant of an Event of Default under the Lease and demands that Subtenant pay its rent and all other sums due under the Sublease to Overlandlord, Subtenant agrees that it will honor

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document such demand and pay its rent and all other sums due under the Sublease directly to the Overlandlord during the continuance of such default.

12. Subtenant covenants and acknowledges that it has no right or option of any nature whatsoever, whether pursuant to the Sublease or otherwise, to purchase the Demised Premises or the real property of which the Demised Premises are a part, or any portion thereof or any interest therein and to the extent that Subtenant has, or hereafter acquires any such right or option, the same is hereby acknowledged to be subject to and subordinate to the Lease and is hereby waived and released as against Overlandlord.

13. Overlandlord shall have no obligation, nor incur any liability, with respect to any warranties of any nature whatsoever, whether pursuant to the Sublease or otherwise, including, without limitation, any warranties respecting use, compliance with zoning, title of landlord under

~~I-4 the Sublease, the authority of landlord under the Sublease, habitability, fitness for purpose and possession.~~

14. Anything herein or in the Sublease to the contrary notwithstanding, Overlandlord shall have no obligation, nor incur any liability, beyond Overlandlord's then interest, if any, in the fee estate in the Building and Subtenant shall look exclusively to such interest of Overlandlord, if any, in the fee estate in the Building for the payment and discharge of any obligations imposed upon Overlandlord hereunder or under the Sublease and Overlandlord is hereby released or relieved of any other obligations hereunder and under the Sublease. Subtenant agrees that with respect to any money judgment which may be obtained or secured by Subtenant against Overlandlord, Subtenant shall look solely to the fee estate or interest owned by the Overlandlord in the Building, and Subtenant will not collect or attempt to collect any such judgment out of any other assets of Overlandlord.

15. No disclosed or undisclosed officers, shareholders, principals, directors, employees, members or servants of Overlandlord shall be personally liable for the performance of Overlandlord's obligations under this Agreement or the Sublease. Notwithstanding anything to the contrary contained herein, Subtenant's sole recourse for the enforcement of Overlandlord's obligations under the Sublease and this Agreement is to satisfy a judgment for Overlandlord's failure to perform such obligations shall be against the Building (or any casualty proceeds or condemnation awards paid to Overlandlord and not applied to a restoration of the Building), and in no event shall any other assets of Overlandlord be subject to any claim arising under the Sublease or this Agreement, except for any claim relating to misappropriation by Overlandlord of, or fraud by Overlandlord with respect to, any casualty proceeds disbursed to, received by or otherwise in Overlandlord's custody and control.

~~I-5~~

~~IN WITNESS WHEREOF, the parties hereto have respectively signed and sealed this Agreement as of the day and year first above written.~~

~~METROPOLITAN LIFE INSURANCE COMPANY~~

~~THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY~~

~~By: /s/ [ILLEGIBLE] ------Name: Title: Director of Real Estate~~

~~I-6~~

Tenant, as landlord under the Sublease and as the tenant under the Lease, agrees for itself and its successors and assigns, that (i) the within Agreement does not (a) constitute a waiver by Overlandlord of any of its rights under the Lease and/or (b) in any way release the Tenant from its obligation to comply with the terms provisions, conditions, covenants, agreements and clauses of the Lease, (ii) the provisions of the Lease remain in full force and effect and must be complied with by Tenant, and (iii) upon the occurrence and continuance of an Event of Default under the Lease, Subtenant may pay all rent, additional rents and all other sums due under the Sublease to the Overlandlord as provided in the within Agreement.

~~CREDIT SUISSE FIRST BOSTON (USA), INC.~~

~~By: /s/ Andrew B. Federbusch ------Name : ANDREW B. FEDERBUSCH Title: MANAGING DIRECTOR~~

~~I-7~~

~~FIRST AMENDMENT TO THE LEASE BETWEEN CREDIT SUISSE FIRST BOSTON CORPORATION (CSFB) ("TENANT") AND TM PARK AVENUE ASSOCIATES LP ("LANDLORD") DATED AUGUST 16, 2000 (THE "LEASE")~~

~~WHEREAS, Landlord and Tenant entered into the Lease dated as of August 16, 2000, which Landlord and Tenant desire to amend as of December 8, 2000.~~

~~THE LEASE IS HEREBY AMENDED AS FOLLOWS:~~

~~1. Article 1 of the Lease is hereby deleted and in its place is substituted the following:~~

SECTION 1.01. Landlord leases to Tenant, and Tenant hires from Landlord, and upon and subject to the covenants, agreements, Terms, provisions and conditions of this Lease, for the Term hereinafter stated, that portion of the twenty-story building (hereinafter called the "Building") known as 315 Park Avenue South, New York, New York, (hereinafter called the "Building") consisting of the entire Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Twelfth, Thirteenth, Fourteenth and Fifteenth Floors, portions of the Lobby Floor (the "Tenant's Lobby") as set forth on the diagram marked Exhibit A attached hereto and a portion of the Basement Floor as set forth on the diagram marked Exhibit A-1 attached hereto (except for common areas, including, without limitation, areas devoted to elevator shafts and conduits for mechanical systems, which common areas Tenant shall have non-exclusive right to use with other Building occupants but excluding Tenant's dedicated shaft space. Such leased Premises, together with all fixtures, equipment, installations and appurtenances which at the commencement of or during the Term of this Lease are thereto attached (except items not deemed to be included therein and removable by Tenant as provided in Article 4 of this Lease) are hereinafter called the "Premises". The plot of land on which the Building is erected is hereinafter called the "Land". This agreement is called this "Lease".

~~SECTION 1.02. (a) The Commencement Dates of the respective floors of the Premises are as follows:~~

Whenever the phrase "Commencement Date" appears in the Lease it shall refer to the respective dates set forth above in this Section. This Lease has commenced on the dates set forth above (the "Commencement Date") and shall expire unless same shall sooner cease or be terminated as hereinafter provided or pursuant to law on April 30, 2017 (such term being hereinafter referred to as the "Term").

~~(b) The 9,121 square foot portion of the Lobby and the 11,038 square foot portion of the Basement shall be collectively referred to as the "New Space".~~

~~SECTION 1.03. The rent reserved under this Lease for the Term shall be a fixed annual rent (hereinafter called the "Fixed Rent") as follows:~~

(a) At the annual rate of $9,353,502 per annum for the period from and including the Commencement Date to and including September 30, 2005 and at such rate to be paid in equal monthly installments of $779,458.50 each, in advance, on the last day of each and every prior calendar month during the entirety of such period (plus such Additional Rent and other charges as shall become due and payable hereunder) by Federal Funds wire transfer, to an account designated in writing by Landlord;

(b) At the annual rate of $10,166,850 per annum for the period from and including October 1, 2005 to and including September 30, 2010 and at such rate to be paid in equal monthly installments of $847,237.50 each, in advance, on the last day of each and every prior calendar month during the entirety of such period (plus such Additional Rent and other charges as shall become due and payable hereunder), by Federal Funds wire transfer, to an account designated in writing by Landlord;

(c) At the annual rate of $10,980,198 per annum for the period from and including October 1, 2010 to and including September 30, 2015 and at such rate to be paid in equal monthly installments of $915,016,50 each, in advance, on the last day of each and every prior calendar month during the entirety of such period (plus such Additional Rent and other charges as shall become due and payable hereunder) by Federal Funds wire transfer, to an account designated in writing by Landlord; and

(d) At the annual rent of $ 11,183,535 per annum for the period from and including October 1, 2015 to and including April 30, 2017 and at such rate to be paid in equal monthly installments of $ 931,961.25 each in advance on the last day of each and every prior calendar month during the entirety of such period (plus Additional Rent and other charges as shall become due and payable hereunder) to an account designated in writing by Landlord.

SECTION 1.04. Tenant agrees promptly to pay the Fixed Rent, Additional Rent and other charges herein reserved as and when the same shall become due and payable, without demand thereof, and without any set-off or deduction whatsoever except as expressly provided in this Lease and to keep, observe and perform, and

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to permit no violation of, each and every of the covenants, agreements, terms, provisions and conditions herein contained on the part and on behalf of Tenant to be kept, observed and performed. Any Fixed Rent payments that are due under this Lease shall, if not received by Landlord by

the fifth day after such rent is due, bear a three (3%) percent surcharge for the late payment and interest at the Default Rate; provided, however, that if a monthly payment is inadvertently late no more than once in any twelve month period and is paid within two (2) days after notice from Landlord to Tenant, the three (3%) percent surcharge shall not apply to that late payment.

~~SECTION 1.05. Additional Rent shall mean all charges owed pursuant to Sections 16.04, 19.01, 21.02, 21.03, 21.04, 22.06, 23.02, 23.03 and 23.04 and such other Sections of similar purport.~~

SECTION 1.06. If, by reason of any of the provisions of this Lease, the Term expires on any date other than the last day of a calendar month (except if the Term Terminates by reason of Tenant's default hereunder), the Fixed Rent and Additional Rent for such calendar month shall be equitably prorated. If the Commencement Date of the respective floors of the Premises of this Lease are on any day other than the first of a calendar month, the Fixed and Additional Rent for those floors shall be prorated for that first month.

SECTION 1.07. For all purposes hereof, it is agreed that the Premises consists of 203,337 square feet consisting of 16,288 square feet on each of the second through eighth floors and the twelfth through fifteenth floors and 13,131 square feet in the Tenant's Lobby and 11,038 square feet in the Basement.

SECTION 1.08. Notwithstanding any other provisions of the Lease, Tenant will not be obligated to make any payments of the Fixed Rent for: (a) the two month period commencing with the Commencement Date of the applicable floors and (b) the month of September, 2003. During the months of October 1, 2005 through September 30, 2006, Tenant shall receive a rent credit of $63,603.47 per month (or, if Tenant shall have expended less than $483,179 in order to remove the linoleum or other floor tiles in the Premises, and if all such linoleum or other floor tiles have not been removed, the credit will be reduced by one twelfth (1/12) of $483,179 less the amount so expended). Tenant shall pay, upon the execution of this Lease, the Fixed Rent for the third month after the Commencement Date, in respect to each applicable floor. Tenant shall pay, upon the execution of this First Amendment, the sum of $77,276.16, which represents the Fixed Rent for the month of February 2001 for the New Space.

2. Section 3.01 is hereby amended by adding the following sentence to the end of the Section: "Notwithstanding anything above to the contrary, Tenant may use (i) the Basement only for storage and the placement of mechanical equipment; and (ii) Tenant may use the Tenant's Lobby for a conference facility and other purposes ancillary to its office use".

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3. Section 3.05 is hereby amended as follows: The last sentence is deleted and replaced with "Tenant may place such exterior signage on the exterior of the First Floor of the Building as Landlord in its reasonable discretion shall allow. Tenant shall maintain and repair the windows on the exterior of the Tenant's Lobby. Except as provided in the Lease, Landlord will not allow any exterior signage on the Building's North and West facades."

4. Section 3.06 is hereby amended as follows: The last sentence of the Section is deleted and in its place shall appear the following: "The Park Avenue elevators shall be re-programmed, as soon as is practical, so that when each specific elevator is turned over to Tenant it shall be able to service all floors of the Building. The cost of the re-programming will be borne by the Tenant. One half of this cost (not to exceed $350,000) shall be returned to the Tenant in the form of a rent credit to be applied in sixty (60) equal monthly installments starting in November 2005 and ending in October 2010. In computing the amount of the credit, the cost will be increased by applying a Six and a half (6.5%) percent annual interest factor. The two most westerly of the Park Avenue elevators shall be dedicated exclusively for Tenant's use (the cost of providing the openings on each floor shall be totally borne by the Tenant). When the Tenant leases fourteen (14) floors in the Building, Landlord shall dedicated a third elevator for Tenant's exclusive use. The other elevators will only open on the floors the Tenant does not occupy. For the purpose of determining when Tenant is entitled to receive additional dedicated elevators, neither the Tenant's Lobby nor the Basement shall constitute floors. The Landlord reserves the right at all times to use all of the Park Avenue elevators that open on the Basement floors to obtain access to the Basement."

5. Section 16.03 is amended by adding the following sentences at the end of the Section: "Tenant has decided to install supplemental air conditioning units throughout the Premises and to install two cold air drying units on the roof at its own cost and expense Landlord shall have no responsibility to repair or maintain such supplemental units or systems. Tenant shall have reasonable right of access to the roof for purposes of maintenance and repair of such equipment.

~~6. Section 21.04 of the Lease shall be amended by deleting the amount $41,978.29 in line 3 of the Section and replacing it with the amount $46,598.06.~~

7. Section 22.04(g) shall be amended by adding the following sentence: "Tenant may only sublet or assign the Basement and Lobby Floor in conjunction with a sublease or assignment of the Tenant's entire Premises."

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Section 23.01(d) shall be amended by deleting the words fifty-six percent (56%) and replacing it with "62.163%".

9. Section 23.01(h) is amended by deleting the "215,444 square feet" in lines 3 and 5 and substituting "203,337 square feet"; furthermore, in line 5 the amount $107,722 is deleted and replaced with $101,668.50.

~~10. As to the New Space, Section 27.06 is amended to delete "Insignia ESG and Company" and to substitute in instead "CSFB Realty Services".~~

~~11. Section 27.28 of the Lease is hereby deleted.~~

~~12. In regard to the New Space the following Sections of the Lease shall not apply:~~

a. Section 7.01 as to the Basement b. Section 7.02 c. Section 16.01 as it relates to the heating ventilation air conditioning system. d. Section 16.03 e. Exhibit C and Exhibit F. f. Landlord shall have no obligation to create demising walls in the Lobby floor for Tenant.

~~13. Except as expressly set forth above, the Lease is unamended, unchanged and in full force and effect in regard to all of its terms.~~

~~LANDLORD: TM PARK AVENUE ASSOCIATES LP~~

~~By: /s/ Steve Mullins ------NAME: STEVE MULLINS TITLE: GENERAL PARTNER~~

~~TENANT: CREDIT SUISSE FIRST BOSTON CORPORATION~~

~~By: ------NAME: TITLE:~~

~~State of New York ) County of New York ) ss.:~~

~~On the 26 day of December in the year 2000 before me, the undersigned, personally appeared George Twill, personally known to me a Notary Public of~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Sate of New York or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

~~/s/ [ILLEGIBLE] ------[SEAL ILLEGIBLE]~~

~~State of New York ) County of New York ) ss.:~~

On the ______day of December in the Year 2000 before me, a Notary Public in the State of New York, the undersigned, personally appeared ______, personally known to me a Notary Public of the State of New York or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

~~------~~

~~8. Section 23.01(d) shall be amended by deleting the words fifty-six percent (56%) and replacing it with "62.163%".~~

~~10. As to the New Space, Section 27.06 is amended to delete "Insignia ESG and Company" and to substitute in instead "CSFB Realty Services".~~

~~11. Section 27.28 of the Lease is hereby deleted.~~

~~12. In regard to the New Space the following Sections of the Lease shall not apply:~~

~~a. Section 7.01 as to the Basement b. Section 7.02 c. Section 16.01 as it relates to the heating ventilation air~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document conditioning system. d. Section 16.03 e. Exhibit C and Exhibit F. f. Landlord shall have no obligation to create demising walls in the Lobby floor for Tenant.

~~13. Except as expressly set forth above, the Lease is unamended, unchanged and in full force and effect in regard to all of its terms.~~

~~LANDLORD: TMPARK AVENUE ASSOCIATES LP~~

~~By: /s/ Steve Mullins ------NAME: STEVE MULLINS TITLE: GENERAL PARTNER~~

~~TENANT: CREDIT SUISSE FIRST BOSTON CORPORATION~~

~~By: ------NAME: TITLE:~~

~~State of New York ) County of New York ) ss.:~~

On the 27 day of December in the year 2000 before me, the undersigned, personally appeared Stephen Mullins, personally known to me a Notary Public of the Sate of New York or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

~~/s/ Maria Vullis [SEAL] ------~~

~~State of New York ) County of New York ) ss.:~~

On the______day of December in the Year 2000 before me, a Notary Public in the State of New York, the undersigned, personally appeared ______, personally known to me a Notary Public of the State of New York or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

~~------~~

~~Exhibit 12.1~~

~~(1) The dollar amount of the deficiency in the ratio of earnings to fixed charges was $1.5 million for the year ended December 31, 2000.~~

~~(2) The dollar amount of the deficiency in the ratio of earnings to fixed charges was $0.2 million for the year ended December 31, 2001.~~

~~Exhibit 23.1~~

~~INDEPENDENT AUDITORS' CONSENT~~

~~The Board of Directors Credit Suisse First Boston (USA), Inc.:~~

We consent to incorporation by reference in the registration statement (No. 333-71850) on Form S-3 of Credit Suisse First Boston (USA), Inc. (formerly known as Donaldson, Lufkin & Jenrette, Inc.) of our report dated January 31, 2002, with respect to the consolidated statements of financial condition of Credit Suisse First Boston (USA), Inc. and Subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2001, and the related financial statement schedule, which report appears in the December 31, 2001, annual report on Form 10-K of Credit Suisse First Boston (USA), Inc., and to the reference to our firm under the heading "Experts" in the registration statement.

~~/s/ KPMG LLP New York, New York March 29, 2002~~

~~QuickLinks~~

~~Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT~~

~~EXHIBIT 24.1~~

~~POWER OF ATTORNEY~~

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David M. Brodsky, David C. Fisher and D. Neil Radey, and each of them severally, his or her true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with Credit Suisse First Boston (USA), Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001 and any and all amendments hereto, as fully for all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

~~-1-~~