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<SEC-DOCUMENT>0000791963-10-000002.txt : 20100226
<SEC-HEADER>0000791963-10-000002.hdr.sgml : 20100226
<ACCEPTANCE-DATETIME>20100226172939
ACCESSION NUMBER:		0000791963-10-000002
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20100226
ITEM INFORMATION:		Entry into a Material Definitive Agreement
FILED AS OF DATE:		20100226
DATE AS OF CHANGE:		20100226

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OPPENHEIMER HOLDINGS INC
		CENTRAL INDEX KEY:			0000791963
		STANDARD INDUSTRIAL CLASSIFICATION:	SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
		IRS NUMBER:				980080034
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12043
		FILM NUMBER:		10641019

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1110, P.O. BOX 2015
		STREET 2:		20 EGLINTON AVE. WEST
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M4R 1K8
		BUSINESS PHONE:		(416)322-1515

	MAIL ADDRESS:	
		STREET 1:		PO BOX 2015 SUITE 1110
		STREET 2:		20 EGLINTON AVENUE WEST
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M4R 1K8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FAHNESTOCK VINER HOLDINGS INC
		DATE OF NAME CHANGE:	19950725

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VINER E A HOLDINGS LTD
		DATE OF NAME CHANGE:	19880622

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GOLDALE INVESTMENTS LTD
		DATE OF NAME CHANGE:	19861030
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f8kdoc.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
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<HEAD>
<TITLE>As filed with the Securities and Exchange Commission on February 26, 2010</TITLE>
<META NAME="author" CONTENT="robertse">
<META NAME="date" CONTENT="02/26/2010">
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<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>As filed with the Securities and Exchange Commission on February 26, 2010</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>___________________________________________________</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>UNITED STATES</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Washington, D.C. 20549</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CURRENT REPORT </B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PURSUANT TO SECTION 13 OR 15(d)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Date of Report (date of earliest event reported): February 23, 2010</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>OPPENHEIMER HOLDINGS INC.</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Exact Name of Registrant as Specified in its Charter)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>Commission File Number 1-12043</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><B><BR></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=512><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Delaware &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;98-0080034</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(State of incorporation) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(IRS employer identification number)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>125 Broad Street, New York, NY 10004</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Address of principal executive offices) (Zip code)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(212) 668-8000</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Registrant&#146;s telephone number, including area code)</P>
</TD></TR>
<TR><TD width=512><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12) </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>SECTION 1 &#150; REGISTRANT&#146;S BUSINESS AND OPERATIONS</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 1.01. Entry into a Material Definitive Agreement.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>SECTION 2 &#150; FINANCIAL INFORMATION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Balance Sheet Arrangement of a Registrant.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">During the week ended February 26, 2010, Oppenheimer &amp; Co. Inc. (&#147;Oppenheimer&#148;), a wholly owned subsidiary of Oppenheimer Holdings Inc. (the &#147;Company&#148;), finalized settlements with each of the New York Attorney General&#146;s office (&#147;NYAG&#148;) and the Massachusetts Securities Division (&#147;MSD&#148; and, together with the NYAG, the &#147;Regulators&#148;) concluding investigations and administrative proceedings by the Regulators concerning Oppenheimer&#146;s marketing and sale of auction rate securities (&#147;ARS&#148;).</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>The Settlement with the NYAG</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The NYAG accepted Oppenheimer&#146;s offer of settlement and entered an Assurance of Discontinuance (&#147;AOD&#148;) pursuant to New York State Executive Law Section 63(15) on February 23, 2010 in connection with Oppenheimer&#146;s marketing and sale of ARS. &nbsp;Oppenheimer did not admit or deny any of the findings or allegations contained in the AOD and no fine was imposed. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the terms of the AOD, Oppenheimer will offer to purchase at par plus accrued but unpaid dividends and interest to the day of purchase one (1) unit of Eligible ARS (defined below) from Eligible Investors (defined below) no later than May 24, 2010 (the &#147;Initial Purchase Offer&#148;). &nbsp;Starting on or about August 23, 2010, and continuing every six months thereafter until Oppenheimer has extended a purchase offer to all Eligible Investors, Oppenheimer will offer to purchase Eligible ARS from Eligible Investors who did not receive an Initial Purchase Offer, as excess funds become available to Oppenheimer after giving effect to the financial and regulatory capital constraints applicable to Oppenheimer (the &#147;Additional Purchase Offers&#148;). Oppenheimer&#146;s Initial Purchase Offer and Additional Purchase Offers will remain open for a period of seventy-five days from the date on which the offer to purch
ase is sent.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">In addition, Oppenheimer has agreed to (1) no later than 75 days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, use its best efforts to identify any Eligible Investors who purchased Eligible ARS and subsequently sold those securities below par between February 13, 2008 and February 23, 2010 and pay the investor the difference between par and the price at which the Eligible Investor sold the Eligible ARS, plus reasonable interest thereon (the &#147;ARS Losses&#148;); (2) no later than 75 days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, use its best efforts to identify Eligible Investors who took out loans from Oppenheimer after February 13, 2008 that were secured by Eligible ARS that were not successfully auctioning at the time the loan was taken out from Oppenheimer and who paid interest associated with the ARS-based portion of those loans in ex
cess of the total interest and dividends received on the Eligible ARS during the duration of the loan (the &#147;Loan Cost Excess&#148;) and reimburse such investors for the Loan Cost Excess plus reasonable interest thereon; (3) upon providing liquidity to all Eligible Investors, participate in a special arbitration process for the exclusive purpose of arbitrating any Eligible Investor&#146;s claim for consequential damages against Oppenheimer related to the investor&#146;s inability to sell Eligible ARS; and (4) work with issuers and other interested parties, including regulatory and governmental entities, to expeditiously provide liquidity solutions for institutional investors not within the definition of Small Businesses and Institutions (as defined below) that held ARS in Oppenheimer brokerage accounts on February 13, 2008. Oppenheimer believes that because items (1) through (3) above will occur only after it has provided liquidity to all Eligible Investors, it will take an extended period of time before
 the requirements of items (1) through (3) will take effect.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&#147;Eligible ARS&#148; are ARS that were purchased at Oppenheimer on or before February 13, 2008 and that have failed at auction at least once since February 13, 2008. &nbsp;Eligible ARS excludes ARS that were purchased at any firm other than Oppenheimer or at Oppenheimer in accounts owned or in the name of an independent registered investment adviser. &nbsp;&#147;Eligible Investors&#148; are the following current and former account owners who purchased Eligible ARS at Oppenheimer on or before February 13, 2008 and who held those securities on February 13, 2008: natural persons; charities, endowments or foundations with Internal Revenue Code Section 501(d)(3) status; and &#147;Small Businesses and Institutions,&#148; defined as including trusts; corporate trusts; corporations; employee pension plans/ERISA and Taft Hartley Act plans; educational institutions; incorporated not-for-profit organizations; limited liability comp
anies; limited partnerships; non-public companies; partnerships; personal holding companies; unincorporated associations; and government and quasi-government entities, with total assets at Oppenheimer of $10 million or less as of February 13, 2008, and excluding broker-dealers or banks acting as conduits for their customers or customers that had total assets of greater than $50 million as of February 13, 2008. &nbsp;In no event will Oppenheimer be required to purchase more than $10 million of ARS from any Small Business or Institution.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Oppenheimer estimates that it is obligated to purchase up to approximately $38 million of Eligible ARS (including Eligible MA ARS, as defined below) in the initial 15 month period covered by the AOD. &nbsp;The potential amount of future payments that may be required to be made in connection with the aggregate Loan Cost Excess and the aggregate ARS Losses is currently unknown.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">If Oppenheimer defaults on any obligation under the AOD, the NYAG may terminate the AOD, at his sole discretion, upon 10 days written notice to Oppenheimer.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Reference is made to the AOD between the NYAG and Oppenheimer, attached to this Current Report as Exhibit 10.1, for additional details of the agreement with the NYAG.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>The Settlement with the MSD</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The MSD accepted Oppenheimer&#146;s offer of settlement (the &#147;Offer&#148;) on February 22, 2010 and entered into a Consent Order pursuant to the Massachusetts Uniform Securities Act on February 26, 2010 settling the pending administrative proceeding against the respondents related to Oppenheimer&#146;s sales of ARS to retail and other investors in the Commonwealth of Massachusetts. &nbsp;Oppenheimer and named executives, Albert Lowenthal, Robert Lowenthal and Greg White (the &#147;Executives&#148;), did not admit or deny any of the findings or allegations contained in the Offer and no fine was imposed against any of such parties. &nbsp;All claims against the Executives were dismissed. &nbsp;Oppenheimer agreed to pay the external costs incurred by the MSD related to the investigation and the administrative proceeding in an amount totaling $250,000.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the terms of the Offer, Oppenheimer will offer to purchase $25,000 of Eligible MA ARS (defined below) from Eligible Customer Accounts (defined below) no later than May 29, 2010 (the &#147;T1 Purchase Offer&#148;). &nbsp;No later than August 28, 2010, Oppenheimer will establish a Fund for Redemption (the &#147;Fund&#148;) capitalized with $2.25 million and use the Fund for the benefit of eligible Massachusetts Customer Accounts to offer to purchase all Eligible MA ARS from Eligible Customer Accounts (the &#147;T2 Purchase Offer&#148;). &nbsp;No later than February 29, 2011, Oppenheimer will deposit into the Fund an additional $1.40 million to be used, for the benefit of eligible Massachusetts Customer Accounts, to offer to purchase all Eligible MA ARS from all Massachusetts Customer Accounts (the &#147;T3 Purchase Offer&#148;). &nbsp;Oppenheimer&#146;s T1 Purchase Offer, T2 Purchase Offer and T3 Purchase Offer wil
l remain open for a period of seventy-five days from the date on which the offer to purchase is sent.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">In addition, Oppenheimer has agreed to work with issuers and other interested parties, including regulatory and other authorities and industry participants, to provide liquidity solutions for accounts outside the definition of a Massachusetts Customer Account (&#147;MA Uncovered Accounts&#148;). &nbsp;In that regard, Oppenheimer has agreed to offer, no later than May 29, 2010, select MA Uncovered Accounts a margin loan with respect to such account holders&#146; holdings of Eligible MA ARS (the &#147;Alternative Liquidity Option&#148;). &nbsp;In addition to the offering of the Alternative Liquidity Option, Oppenheimer has agreed to use any capital remaining in the Fund after all Eligible MA ARS from all Massachusetts Customer Accounts have been fully redeemed to redeem Eligible MA ARS from MA Uncovered Accounts on a pro-rata basis.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&#147;Eligible MA ARS&#148; are ARS issued by municipalities or closed-end funds or backed by student loans that were purchased from Oppenheimer on or before February 13, 2008 and that are currently illiquid due to failed auctions. &nbsp;Eligible MA ARS excludes ARS that were purchased at any firm other than Oppenheimer or at Oppenheimer in accounts owned or in the name of an independent registered investment adviser. &nbsp;&#147;Eligible Customer Accounts&#148; are Massachusetts Customer Accounts (as defined below) that held $1 million or less in Total Asserts held at Oppenheimer as of February 29, 2008. &nbsp;&#147;Massachusetts Customer Accounts&#148; are the following current account owners with $2 million or less in Total Assets (as defined) held at Oppenheimer as of February 29, 2008 who purchased Eligible MA ARS at Oppenheimer on or before February 13, 2008, did not transfer Eligible MA ARS away from Oppenheimer and w
ho held those securities at Oppenheimer on February 13, 2008: natural persons; or charities, endowments or foundations with Internal Revenue Code Section 501(d)(3) status.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Oppenheimer estimates that it is obligated to purchase up to approximately $5 million of Eligible MA ARS in the initial 15 month period covered by the Offer and the Order.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">If Oppenheimer fails to comply with any of the terms set forth in the Offer, the MSD may institute an action to have the Offer declared null and void and reinstitute the previously pending administrative proceedings.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Reference is made to the Offer between the MSD and Oppenheimer et al., attached to this Current Report as Exhibit 10.2 for additional details of the agreement with the MSD.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>Other Material Provisions</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The AOD provides that in the event that Oppenheimer enters into another agreement that provides any form of benefit to any Eligible Investor or Oppenheimer ARS customer who is not an Eligible Investor on terms more favorable than those set forth in the AOD Oppenheimer will, at the election of the NYAG, immediately extend the more favorable terms contained in such other agreement to all Eligible Investors. &nbsp;The AOD further provides that if Oppenheimer pays (or makes any pledge or commitment to pay) to any governmental entity or regulator pursuant to any other agreement costs or a fine or penalty or any other monetary amount, then an equivalent payment, pledge or commitment will become immediately owed to the State of New York for the benefit of New York residents.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The Offer provides that, to the extent Oppenheimer agrees to any subsequent settlement and/or order with any other state or federal regulator which includes a term or terms which are more favorable to those terms contained in the Offer related to Oppenheimer&#146;s Massachusetts Customer Accounts, MA Uncovered Accounts or institutional investors, the subsequent term or terms will be incorporated by reference into the Offer and become equally applicable to such Massachusetts investors. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">As a result of the provisions of the AOD with the NYAG and the agreement with the MSD, Oppenheimer expects that it will be required by the NYAG to establish a fund similar to the Fund capitalized with at least $3.65 million for the benefit of Eligible Investors to purchase Eligible ARS.&nbsp; In addition, as a result of these provisions, Oppenheimer may be required to pay the external costs incurred by the NYAG, if any, related to the investigation by the NYAG in an amount not to exceed $250,000.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>SECTION 9 &#150; FINANCIAL STATEMENTS AND EXHIBITS</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 9.01. &nbsp;Financial Statements and Exhibits</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(d) Exhibits</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=55.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.1</P>
</TD><TD valign=top width=535.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Assurance of Discontinuance, dated February 23, 2010, between the Attorney General of the State of New York and Oppenheimer &amp; Co. Inc.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=55.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.2</P>
</TD><TD valign=top width=535.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Offer of Settlement, dated February 22, 2010, between the Commonwealth of Massachusetts Division of Securities and Oppenheimer &amp; Co. Inc., Albert Lowenthal, Robert Lowenthal and Greg White.</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">2</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. </P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Oppenheimer Holdings Inc. </B></P>
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<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=519.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Date: February 26, 2010</I></P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>By: /s/ E.K. Roberts</I></P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>E.K. Roberts</I></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>President and Treasurer</I></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>(Duly Authorized Officer and</I></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Principal Financial Officer)</I></P>
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<DESCRIPTION>EXHIBIT 10.1
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<TITLE>EXHIBIT 10</TITLE>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>EXHIBIT 10.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Execution Copy</B></P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ATTORNEY GENERAL OF THE STATE OF NEW YORK</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">INVESTOR PROTECTION BUREAU</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">-------------------------------------------------------------------------x</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">IN THE MATTER OF </P>
<P style="margin:0pt; padding-left:288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">: &nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">OPPENHEIMER &amp; CO. INC.</P>
<P style="margin:0pt; text-indent:288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>AOD#: 10-023</B> &nbsp;<BR>
- -------------------------------------------------------------------------x</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>ASSURANCE OF DISCONTINUANCE</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>PURSUANT TO EXECUTIVE LAW </U>&#167;</B><U> </U><B><U>63(15)</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">On April 28, 2008, the Office of the Attorney General of the State of New York (the &#147;Attorney General&#148;), commenced an investigation, pursuant to Article 23-A of the General Business Law (the &#147;Martin Act&#148;) and Section 63(12) of the Executive Law of New York, of Oppenheimer &amp; Co. Inc. (&#147;Oppenheimer&#148;), concerning Oppenheimer&#146;s marketing and sale of auction rate securities (the &#147;Investigation&#148;). &nbsp;This Assurance of Discontinuance (&#147;Assurance&#148;) contains the findings of the Attorney General&#146;s Investigation and the relief agreed to by the Attorney General and Oppenheimer.</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt" align=center><B>FINDINGS</B></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Attorney General finds as follows:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>I.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Relevant Entit</U>y </B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">1.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer is a New York corporation. &nbsp;It is licensed to do business in the State of New York and has offices located in New York City. &nbsp;Oppenheimer is a registered broker/dealer offering brokerage and investment products and services to investors across the United States. &nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>II.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Background on Auction Rate Securities</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">2.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Auction rate securities are long-term bonds issued by municipalities, corporations and student loan companies, or perpetual equity instruments issued by closed end mutual funds, with variable interest rates that reset through a bidding process known as a Dutch auction. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">3.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">At a Dutch auction, bidders generally state the number of auction rate securities they wish to purchase and the minimum interest rate they are willing to accept. &nbsp;Bids are ranked, from lowest to highest, according to the minimum interest rate each bidder is willing to accept. &nbsp;The lowest interest rate required to sell all of the auction rate securities available at auction, known as the &#147;clearing rate,&#148; becomes the rate paid to all holders of that particular security until the next auction. &nbsp;The process is then repeated, typically every 7, 28 or 35 days. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">4.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">When there are not enough orders to purchase all of the auction rate securities being sold, a &#147;failed&#148; auction occurs. &nbsp;In the event of a failed auction, investors cannot sell their auction rate securities. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">5.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To facilitate the auction process, the issuers of the auction rate securities select one or more broker-dealers to underwrite the offering and/or manage the auction process. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">6.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer did not act as a lead underwriter, manager or agent for any issuer of auction rate securities. &nbsp;Rather, Oppenheimer acted as agent, both on a solicited and unsolicited basis, for its investors by submitting their bids to purchase and orders to sell auction rate securities. &nbsp;Oppenheimer received revenue in connection with auction rate securities, including a fee from the auction agent(s) for acting as an agent for its investors. &nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>III.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Oppenheimer Made Misrepresentations to Certain Investors </B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>in Connection With the Sale of Auction Rate Securities </U></B><U>&nbsp;</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">7.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer represented to certain of its investors that auction rate securities were &#147;money market alternatives,&#148; &#147;liquid investments&#148; and &#147;cash alternatives.&#148; It did so through its retail brokers, known at Oppenheimer as &#147;Financial Advisers.&#148; &nbsp;In fact, until February, 2008, the account statements of Oppenheimer investors who owned auction rate securities listed them under the category of &#147;cash equivalents.&#148; &nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">8.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">These representations were misleading as to certain investors. &nbsp;Auction rate securities were in fact different from money market funds. &nbsp;As discussed above, the liquidity of an auction rate security relied on the successful operation of the Dutch auction process. &nbsp;In the event of a failed auction, investors can not sell their auction rate securities and are stuck holding long-term investments. &nbsp;As discussed below, starting in the Fall of 2007, the auction rate securities market faced dislocation and an increased risk of failure.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">9.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Since the inception of the auction rate securities market, certain other broker-dealers submitted support bids, purchase orders for the entirety of an auction rate security issue they underwrote and for which they acted as the sole or lead broker. &nbsp;Support bids were broker-dealers&#146; proprietary orders that would be filled, in whole or in part, if there was otherwise insufficient demand in an auction. &nbsp;When broker-dealers purchased auction rate securities through support bids, auction rate securities were recorded on the broker-dealers&#146; balance sheets. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">10.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">As a distributing broker-dealer, Oppenheimer did not submit bids to support the auctions and did not hold any significant inventory of auction rate securities in its proprietary account. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">11.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Because investors could not ascertain how much of an auction was filled through broker-dealer proprietary trades, investors could not determine if auctions were clearing because of normal marketplace demand, or because broker-dealers were making up for lack of demand through support bids. &nbsp;Generally, investors were also not aware that the auction rate securities market was dependent upon broker-dealers&#146; use of support bids for its operation. &nbsp;There was no way for investors to monitor supply and demand in the market or to assess when broker-dealers may decide to stop supporting the market, which could cause its collapse. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>IV.</B></P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>By the Fall of 2007, The Auction Rate </B></P>
<P style="margin:0pt; padding-left:3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Securities Market Faced Dislocation</U></B></P>
<P style="margin:0pt; padding-left:3.6pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">12.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In August 2007, the credit crisis and other deteriorating market conditions strained the auction rate securities market. &nbsp;Some institutional investors withdrew from the market, decreasing demand for auction rate securities.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">13.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">From the Fall of 2007 through February of 2008, demand for auction rate securities continued to erode and the auction rate securities inventory of many broker-dealers who acted as auction underwriters reached unprecedented levels. &nbsp;In February 2008, many broker-dealers stopped supporting the auctions. &nbsp;Without the benefit of support bids, the auction rate securities market collapsed, leaving investors who had been led to believe that these securities were &#147;money market alternatives&#148; and &#147;liquid investments,&#148; appropriate for managing short-term cash needs, holding long-term or perpetual securities that could not be sold at par value. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>V.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Violations</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">14.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The foregoing acts and practices of Oppenheimer violated provisions of the Martin Act, Article 23-A of the General Business Law.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">15.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The foregoing acts and practices of Oppenheimer violated provisions of &#167; 63(12) of the Executive Law.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">16.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The foregoing acts and practices of Oppenheimer violated provisions of &#167; 349 of the General Business Law.</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>AGREEMENT</U></B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">WHEREAS, the parties agree to settle allegations that Oppenheimer&#146;s conduct violated the Martin Act, Executive Law &#167; 63(12) and General Business Law <FONT FACE="WP TypographicSymbols">'</FONT> 349, and that the Attorney General, when misrepresentations are made in connection with the sale of securities, can bring an action and establish a violation of the Martin Act, General Business Law &#167; 349 and Executive Law &#167; 63(12), without having to prove the existence of scienter;</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">WHEREAS, Oppenheimer neither admits nor denies the Attorney General&#146;s Findings set forth above;</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">WHEREAS, the Attorney General is willing to accept the terms of the Assurance pursuant to New York Executive Law &#167; 63(15), and to temporarily suspend its Investigation of Oppenheimer for a period of time as determined at the sole discretion of the Attorney General; and</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">WHEREAS, the parties each believe that the obligations imposed by this Assurance are prudent and appropriate;</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">IT IS HEREBY UNDERSTOOD AND AGREED, by and between the parties, that:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>I.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Relief for Auction Rate Security Investors</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>A.</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Purchases from Auction Rate Securities Investors</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">17.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer will provide liquidity to Eligible Investors, as defined below, by purchasing Eligible Auction Rate Securities, as defined below, that have failed at auction at least once since February 13, 2008, at par, in the manner described below. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">18.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">&#147;Eligible Auction Rate Securities,&#148; for the purposes of this Assurance, shall mean auction rate securities purchased at Oppenheimer on or before February 13, 2008 that have failed at auction at least once since February 13, 2008. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">19.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">&#147;Eligible Investors,&#148; for the purposes of this Assurance, shall mean the following current and former account owners who purchased Eligible Auction Rate Securities at Oppenheimer on or before February 13, 2008 and who held those Eligible Auction Rate Securities on February 13, 2008:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">a.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Natural persons (including their IRA accounts, testamentary trust and estate accounts, custodian UGMA and UTMA accounts, and guardianship accounts); or</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">b.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Charities, endowments or foundations with Internal Revenue Code Section 501(c)(3) status; or</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">c.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Small Businesses and Institutions. &nbsp;For purposes of this provision, &#147;Small Businesses and Institutions&#148; shall mean the following account owners with total assets at Oppenheimer of $10 million or less as of February 13, 2008: trusts; corporate trusts; corporations; employee pension plans/ERISA and Taft Hartley Act plans; educational institutions; incorporated not-for-profit organizations; limited liability companies; limited partnerships; non-public companies; partnerships; personal holding companies; unincorporated associations; and government and quasi-government entities. <B>&nbsp;</B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">i.</P>
<P style="margin:0pt; padding-left:117pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In calculating total assets at Oppenheimer for the purposes of Paragraph 19(c), Oppenheimer may include household accounts. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ii.</P>
<P style="margin:0pt; padding-left:117pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If an account owner described within Paragraph 19(c) transferred its Eligible Auction Rate Securities away from Oppenheimer prior to February 13, 2008, then the date of the account owner&#146;s request to transfer its Eligible Auction Rate Securities shall be used for determining whether the account owner had $10 million or less at Oppenheimer. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">iii.</P>
<P style="margin:0pt; padding-left:117pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">&#147;Small Businesses and Institutions&#148; shall not include broker-dealers or banks acting as conduits for their investors, or investors that had total assets of greater than $50 million as of February 13, 2008.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">iv.</P>
<P style="margin:0pt; padding-left:117pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In no event shall Oppenheimer be required by this Assurance to purchase more than $10 million of auction rate securities from any Small Business or Institution. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">20.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall offer to purchase from Eligible Investors, at par plus accrued and unpaid dividends/interest, Eligible Auction Rate Securities that have failed at auction at least once since February 13, 2008 (the &#147;Purchase Offer&#148;). &nbsp;The Purchase Offer shall be extended as follows:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">a.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within ninety (90) days of the execution of this Assurance, Oppenheimer shall offer to purchase 1 unit of Eligible Auction Rate Securities from those Eligible Investors who had assets at Oppenheimer of $ 1,000,000 or less as of February 13, 2008 (&#147;Initial Purchase Offer&#148;). &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">b.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that any Eligible Investor transferred their Eligible Auction Rate Securities away from Oppenheimer before February 13, 2008, then the measurement date for the $1,000,000 threshold shall be the date on which the transfer was requested by the Eligible Investor.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">c.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Starting six months after the execution of this Assurance, and continuing every six months thereafter until Oppenheimer has extended a Purchase Offer to all Eligible Investors, Oppenheimer shall offer to purchase Eligible Auction Rate Securities from Eligible Investors who did not receive an Initial Purchase Offer, as funds identified pursuant to the process described in paragraph 27 below become available (&#147;Additional Purchase Offers&#148;). &nbsp;Oppenheimer shall extend Additional Purchase Offers first to purchase the remaining Eligible Auction Rate Securities held by Eligible Investors who had assets at Oppenheimer of $1,000,000 or less as of February 13, 2008 and then to all other Eligible Investors. &nbsp;Oppenheimer will extend Additional Purchase Offers in a manner acceptable to the Attorney General. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">d.</P>
<P style="margin:0pt; padding-left:90pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">An Initial Purchase Offer or Additional Purchase Offers shall remain open for a period of seventy-five (75) days from the date on which the given Purchase Offer was sent to an Eligible Investor (&#147;Offer Period&#148;).</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">21.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall undertake its best efforts to identify and provide notice to Eligible Investors of the relevant terms of this Assurance. &nbsp;Said notice shall explain what Eligible Investors must do to accept, in whole or in part, a Purchase Offer. &nbsp;Oppenheimer shall also provide written notice of the relevant terms of this Assurance to any subsequently identified Eligible Investors. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">22.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that any Eligible Investors have not responded to a Purchase Offer on or before forty-five (45) days before the end of the relevant Offer Period (as defined above), Oppenheimer shall provide any such Eligible Investor with a second written notice informing them again of the Purchase Offer, including the date by which the Offer Period will end. &nbsp;Oppenheimer shall also inform them of the relevant terms of this Assurance and any other material issues regarding the Eligible Investors&#146; rights. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">23.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Eligible Investors may accept a Purchase Offer by notifying Oppenheimer, as described in the Purchase Offer, at any time before midnight, Eastern Time, on the last day of the Offer Period. &nbsp;An acceptance must be received by Oppenheimer prior to the expiration of the Offer Period, or any extension thereof, to be effective.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">24.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">For those Eligible Investors who accept a Purchase Offer, Oppenheimer shall purchase their Eligible Auction Rate Securities no later than five (5) business days following such acceptance.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">25.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">No later than two (2) business days after the date of this Assurance, Oppenheimer shall establish: &nbsp;(a) a dedicated toll-free telephone assistance line, with appropriate staffing, to provide information and to respond to questions concerning the terms of this Assurance; and (b) a public Internet page on its corporate Web site(s), with a prominent link to that page appearing on Oppenheimer&#146;s relevant homepage(s), to provide information concerning the terms of this Assurance and, via an e-mail address or other reasonable means, to respond to questions concerning the terms of this Assurance. &nbsp;Oppenheimer shall maintain the telephone assistance line and Internet page through at least the last day of the Purchase Deadline, or any extension thereof. &nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>B.</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Financial Review Process</U></B></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:72pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">27.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Starting six months after the execution of this Assurance, and continuing every six months thereafter until Oppenheimer has extended a Purchase Offer to all Eligible Investors, Oppenheimer shall conduct a financial review (&#147;Six-Month Review&#148;) to determine whether Oppenheimer has funds available, after giving effect to the financial and regulatory capital constraints applicable to Oppenheimer, to extend Additional Purchase Offers to Eligible Investors (&#147;Excess Funds&#148;). &nbsp;If Oppenheimer identifies Excess Funds, it shall extend Additional Purchase Offers, as described in paragraph 20 above, no later than ninety days from the completion of each Six-Month Review.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">28.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within five days of the completion of each Six-Month Review, Oppenheimer shall submit written reports to the Attorney General detailing the results of Oppenheimer&#146;s Review, including the amount of Excess Funds, if any, and any proposed Additional Purchase Offers. &nbsp;At the Attorney General&#146;s request, Oppenheimer shall confer with the Attorney General to discuss the results of Oppenheimer&#146;s Six-Month Review and its progress in providing liquidity to Eligible Investors. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">29.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If the Attorney General determines, in its sole discretion, that Oppenheimer is not taking sufficient action to provide liquidity to Eligible Investors expeditiously, the Attorney General reserves the right to take any action the Attorney General deems appropriate, in its sole discretion, including, but not limited to commencing, on thirty (30) days notice to Oppenheimer, a plenary action against Oppenheimer under the Martin Act or any other applicable statute or law.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">30.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The timeframes set forth above may be amended with written permission from the Attorney General.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>C.</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Relief for Eligible Investors Who Sold Below Par </U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">31.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">No later than seventy-five (75) days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, Oppenheimer shall undertake its best efforts to identify any Eligible Investor who sold Eligible Auction Rate Securities below par between February 13, 2008 and the date of this Assurance (&#147;Below Par Seller&#148;) and pay them the difference between par and the price at which the Eligible Investor sold the Eligible Auction Rate Securities, plus reasonable interest thereon. &nbsp;Oppenheimer shall promptly pay any such Below Par Seller identified thereafter.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>D.</B></P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Reimbursement for Related Loan Expenses</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">32.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">No later than seventy-five (75) days after Oppenheimer has completed extending a Purchase Offer to all Eligible Investors, Oppenheimer shall make best efforts to identify Eligible Investors who took out loans from Oppenheimer after February 13, 2008, that were secured by Eligible Auction Rate Securities that were not successfully auctioning at the time the loan was taken out from Oppenheimer, and paid interest associated with the auction rate securities based portion of those loans in excess of the total interest and dividends received on the auction rate securities during the duration of the loan. &nbsp;Oppenheimer shall reimburse such investors promptly for the excess expense, plus reasonable interest thereon. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>E.</B></P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Consequential Damages Arbitration Process</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">33.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Upon providing liquidity to all Eligible Investors, Oppenheimer shall consent to participate in a special arbitration process (&#147;Arbitration&#148;) for the exclusive purpose of arbitrating any Eligible Investor&#146;s consequential damages claim arising from their inability to sell Eligible Auction Rate Securities. &nbsp;Oppenheimer shall notify Eligible Investors of the terms of the Arbitration process through the notice described in paragraphs 21-22 above. &nbsp;Oppenheimer will notify Eligible Investors when it is prepared to participate in the Arbitration. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">34.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer agrees to toll the statute of limitations applicable to any claim that may be made in the Arbitration, starting from the date of this Assurance and continuing through until two years after Oppenheimer, in the sole opinion of the Attorney General, has taken all reasonable steps to provide liquidity to all Eligible Investors, and notifies Eligible Investors that it is prepared to participate in the Arbitration. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">35.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Arbitration shall be conducted by a single public arbitrator (as defined by section 12100(u) of the NASD Code of Arbitration Procedures for Customer Disputes, eff. April 16, 2007), under the auspices of FINRA. &nbsp;Oppenheimer will pay all applicable forum and filing fees. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">36.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Any Eligible Investors who choose to pursue such claims in the Arbitration shall bear the burden of proving that they suffered consequential damages and that such damages were caused by their inability to access funds invested in Eligible Auction Rate Securities. &nbsp;&nbsp;In the Arbitration, Oppenheimer shall be able to defend itself against such claims; provided, however, that Oppenheimer shall not contest liability for the illiquidity of the underlying auction rate securities position or use as part of its defense any decision by an Eligible Investor not to borrow money from Oppenheimer.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">37.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Eligible Investors who elect to use the special arbitration process provided for herein shall not be eligible for punitive damages, or for any other type of damages other than consequential damages. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">38.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">All investors, including but not limited to Eligible Investors who avail themselves of the relief provided pursuant to this Assurance, may pursue any remedies against Oppenheimer available under the law. &nbsp;However, Eligible Investors that elect to utilize the special arbitration process set forth above are limited to the remedies available in that process and may not bring or pursue a claim relating to Eligible Auction Rate Securities in another forum.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>F.</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Institutional Investors</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">39.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall endeavor to work with issuers and other interested parties, including regulatory and governmental entities, to expeditiously provide liquidity solutions for institutional investors not covered by Paragraph 19 (c) above, that held auction rate securities in Oppenheimer brokerage accounts on February 13, 2008. (&#147;Institutional Investors&#148;).</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">40.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Beginning December 1, 2010, and continuing semi-annually after that, Oppenheimer shall submit written reports to the Attorney General outlining Oppenheimer&#146;s efforts to provide liquidity solutions for Institutional Investors and the results thereof. &nbsp;At the Attorney General&#146;s request, Oppenheimer shall confer with the Attorney General to discuss Oppenheimer&#146;s progress to date. The Attorney General shall advise Oppenheimer of any concerns regarding Oppenheimer&#146;s progress in providing liquidity solutions for Institutional Investors and, in response, Oppenheimer shall detail the steps that Oppenheimer plans to implement to address such concerns. &nbsp;Such written semi-annual reports and quarterly updates shall continue until December 2013. &nbsp;The reporting or meeting deadlines set forth above may be amended with written permission from the Attorney General.</P
>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>G.</B></P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B><U>Other Relief</U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">41.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer admits the jurisdiction of the Attorney General. &nbsp;Oppenheimer will cease and desist from engaging in any acts in violation of the Martin Act, Executive Law &#167; 63(12), and/or General Business Law &#167; 349 and will comply with the Martin Act, Executive Law &#167; 63(12) and General Business Law &#167; 349.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">42.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If Oppenheimer enters into or has entered into an agreement with any other governmental or self-regulatory entity resolving claims relating to Oppenheimer&#146;s marketing and sale of auction rate securities, providing liquidity relief to any Eligible Investors, or otherwise resolving Oppenheimer&#146;s role in the auction rate securities market (&#147;Other Agreement&#148;), Oppenheimer shall immediately provide the Attorney General with the terms of such agreement. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">43.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In the event that Oppenheimer enters into an Other Agreement under any circumstances that, in the sole opinion of the Attorney General, provides any form of benefit, express or implied, to any Eligible Investor or Oppenheimer auction rate securities customer who is not an Eligible Investor on terms more favorable than those set forth in this Assurance, Oppenheimer shall, at the election of the Attorney General, immediately extend the more favorable terms contained in the Other Agreement to all Eligible Investors. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">44.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If Oppenheimer, in the sole opinion of the Attorney General, pursuant to an Other Agreement, pays to any governmental entity or regulator, costs or a fine or penalty, or any other monetary amount, or makes any pledge or commitment, however delineated, an equivalent payment, pledge or commitment shall become immediately owed to the State of New York for the benefit of New York residents.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>II.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Other Provisions</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><U><BR></U></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">45.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Attorney General retains the right under Executive Law &#167; 63(15) to compel compliance with this Assurance. &nbsp;Evidence of a violation of this Assurance proven in a court of competent jurisdiction shall constitute <I>prima facie</I> proof of a violation of the Martin Act, General Business Law &#167;349 and/or Executive Law &#167;63(12) in any civil action or proceeding hereafter commenced by the Attorney General against Oppenheimer. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">46.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Should the Attorney General prove in a court of competent jurisdiction that a material breach of this Assurance by Oppenheimer has occurred, Oppenheimer shall pay to the Attorney General the cost, if any, of such determination and of enforcing this Assurance, including without limitation legal fees, expenses and court costs.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">47.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">&nbsp;If Oppenheimer defaults on any obligation under this Assurance, the Attorney General may terminate this Assurance, at his sole discretion, upon 10 days written notice to Oppenheimer. &nbsp;Oppenheimer agrees that any statute of limitations or other time related defenses applicable to the subject of the Assurance and any claims arising from or relating thereto are tolled from and after the date of this Assurance. &nbsp;In the event of such termination, Oppenheimer expressly agrees and acknowledges that this Assurance shall in no way bar or otherwise preclude the Attorney General from commencing, conducting or prosecuting any investigation, action or proceeding, however denominated, related to the Assurance, against Oppenheimer, or from using in any way any statements, documents or other materials produced or provided by Oppenheimer prior to or after the date of this Assurance, inc
luding, without limitation, such statements, documents or other materials, if any, provided for purposes of settlement negotiations, except as may otherwise be provided in a written agreement with the Attorney General.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">48.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Except in an action by the Attorney General to enforce the obligations of Oppenheimer in this Assurance or in the event of termination of this Assurance by the Attorney General, neither this Assurance nor any acts performed or documents executed in furtherance of this Assurance: &nbsp;(a) may be deemed or used as an admission of, or evidence of, the validity of any alleged wrongdoing, liability or lack of wrongdoing or liability; or (b) may be deemed or used as an admission of or evidence of any such alleged fault or omission of Oppenheimer in any civil, criminal, arbitration or administrative proceeding in any court, administrative agency or other tribunal. &nbsp;This Assurance shall not confer any rights upon persons or entities who are not a party to this Assurance. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">49.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall cooperate fully and promptly with the Attorney General and shall use its best efforts to ensure that all the current and former officers, directors, trustees, agents, members, partners and employees of Oppenheimer (and of any of Oppenheimer&#146;s parent companies, subsidiaries or affiliates) cooperate fully and promptly with the Attorney General in any pending or subsequently initiated investigation, litigation or other proceeding relating to auction rate securities and/or the subject matter of the Assurance. Such cooperation shall include, without limitation, and on a best efforts basis:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; padding-right:36pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(a)</P>
<P style="margin:0pt; padding-left:72pt; padding-right:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">production, voluntarily and without service of subpoena, upon the request of the Attorney General, of all documents or other tangible evidence requested by the Attorney General and any compilations or summaries of information or data that the Attorney General requests that Oppenheimer (or Oppenheimer&#146;s parent companies, subsidiaries or affiliates) prepare, except to the extent such production would require the disclosure of information protected by the attorney-client and/or work product privileges; </P>
<P style="margin:0pt; padding-left:72pt; padding-right:36pt; text-indent:-36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; padding-right:36pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(b)</P>
<P style="margin:0pt; padding-left:72pt; padding-right:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">without the necessity of a subpoena, having the current (and making all reasonable efforts to cause the former) officers, directors, trustees, agents, members, partners and employees of Oppenheimer (and of any of Oppenheimer&#146;s parent companies, subsidiaries or affiliates) attend any Proceedings (as hereinafter defined) in New York State or elsewhere at which the presence of any such persons is requested by the Attorney General and having such current (and making all reasonable efforts to cause the former) officers, directors, trustees, agents, members, partners and employees answer any and all inquiries that may be put by the Attorney General to any of them at any proceedings or otherwise, except to the extent such production would require the disclosure of information protected by the attorney-client and/or work product privileges; &#147;Proceedings&#148; include, but are not limi
ted to, any meetings, interviews, depositions, hearings, trials, grand jury proceedings or other proceedings;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; padding-right:36pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(c) </P>
<P style="margin:0pt; padding-left:72pt; padding-right:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">fully, fairly and truthfully disclosing all information and producing all records and other evidence in its possession, custody or control (or the possession, custody or control of Oppenheimer parent companies, subsidiaries or affiliates) relevant to all inquiries made by the Attorney General concerning the subject matter of the Assurance, except to the extent such inquiries call for the disclosure of information protected by the attorney-client and/or work product privileges; and</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; padding-right:36pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(d)</P>
<P style="margin:0pt; padding-left:72pt; padding-right:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">making outside counsel reasonably available to provide comprehensive presentations concerning any internal investigation relating to all matters in the Assurance and to answer questions, except to the extent such presentations or questions call for the disclosure of information protected by the attorney-client and/or work product privileges.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">50.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In the event Oppenheimer fails to comply with paragraph 49 of this Assurance, the Attorney General shall be entitled to specific performance, in addition to any other available remedies.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">51.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Attorney General has agreed to the terms of this Assurance based on, among other things, the representations made to the Attorney General by Oppenheimer, its counsel, and the Attorney General&#146;s own factual Investigation. &nbsp;To the extent that any material representations are later found to be inaccurate or misleading, this Assurance is voidable by the Attorney General in its sole discretion.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">52.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall, upon request by the Attorney General, provide all documentation and information reasonably necessary for the Attorney General to verify compliance with this Assurance. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">53.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">All notices, reports, requests, and other communications to any party pursuant to this Assurance shall be in writing and shall be directed as follows:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">If to Oppenheimer:</P>
<P style="margin:0pt; text-indent:144pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dennis P. McNamara</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Executive Vice President and General Counsel</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Oppenheimer &amp; Co. Inc.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">125 Broad Street </P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">New York, NY 10004</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If to the Attorney General:</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Office of the Attorney General of the State of New York &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:396pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">120 Broadway, 23<SUP>rd</SUP> Floor</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">New York, New York 10271</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Attn: &nbsp;David A. Markowitz</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">54.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">This Assurance and any dispute related thereto shall be governed by the laws of the State of New York without regard to any conflicts of laws principles.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">55.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer consents to the jurisdiction of the Attorney General in any proceeding or action to enforce this Assurance.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">56.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer agrees not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any finding in this Assurance or creating the impression that this Assurance is without factual basis. &nbsp;Nothing in this paragraph affects Oppenheimer&#146;s: &nbsp;(a) testimonial obligations; or (b) right to take legal or factual positions in defense of litigation or other legal proceedings to which the Attorney General is not a party. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">57.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">This Assurance may not be amended except by an instrument in writing signed on behalf of all the parties to this Assurance.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">58.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">This Assurance constitutes the entire agreement between the Attorney General and Oppenheimer and supersedes any prior communication, understanding or agreement, whether written or oral, concerning the subject matter of this Assurance. &nbsp;No representation, inducement, promise, understanding, condition or warranty not set forth in this Assurance has been relied upon by any party to this Assurance. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">59.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In the event that one or more provisions contained in this Assurance shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Assurance. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">60.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">This Assurance may be executed in one or more counterparts, and shall become effective when such counterparts have been signed by each of the parties hereto. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">61.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Upon execution by the parties to this Assurance, the Attorney General agrees to suspend, pursuant to Executive Law &#167; 63(15), this Investigation as and against Oppenheimer solely with respect to its marketing and sale of auction rate securities to Eligible Investors. <A NAME="OLE_LINK3"></A>The Attorney General reserves the right to resume its Investigation of Oppenheimer&#146;s marketing and sale of auction rate securities to Eligible Investors or to commence any proceeding the Attorney General deems appropriate, in its sole discretion, to obtain relief for Eligible Investors. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:-14pt; padding-left:3.6pt; text-indent:32.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">62.</P>
<P style="margin:0pt; padding-left:3.6pt; text-indent:68.4pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Any payments and all correspondence related to this Assurance must reference AOD # 10- 023. &nbsp;</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B>WHEREFORE</B>, the following signatures are affixed hereto on the dates set forth below.</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ANDREW M. CUOMO</B></P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Attorney General of the State of New York</P>
<P style="margin:0pt; padding-left:180pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:180pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By: <U>__/s/ David A. Markowitz</U>_________________</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;David A. Markowitz</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Deputy Attorney General </P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">for Investor Protection</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;120 Broadway, 23<SUP>rd</SUP> Floor</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New York, New York 10271</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(212) 416-8198</P>
<P style="margin:0pt; padding-left:180pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dated: February 23, 2010</P>
<P style="margin:0pt; padding-left:180pt; text-indent:-72pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="page-break-before:always; margin:0pt; padding-left:180pt; text-indent:-72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">OPPENHEIMER &amp; CO. INC.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:14pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By: &nbsp;<U>/s/ Albert G. Lowenthal</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Name: <U>Albert G. Lowenthal</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Title: <U>Chairman &amp; CEO</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><U>ACKNOWLEDGMENT</U> </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">On this 23 day of February, 2010, before me personally came Albert G. Lowenthal, known to me, who, being duly sworn by me, did depose and say that he is the CEO of Oppenheimer &amp; Co. Inc. the entity described in the foregoing Assurance, and is duly authorized by Oppenheimer &amp; Co. Inc. to execute the same, and that he signed his name in my presence by like authorization.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>Jennifer Kelly</U></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Notary Public</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">My commission expires:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Jennifer Kelly</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Notary Public-State of New York</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">No. 02KE6198826</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Qualified in New York County</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">My Commission Expires January 05, 2013</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Assurance of Discontinuance</P>
<P style="margin:0pt; padding-left:288pt; text-indent:-144pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Reviewed By:</P>
<P style="margin:0pt; padding-left:288pt; text-indent:-216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>/s/ Dennis R. McNamara</U></P>
<P style="margin:0pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>/s/ John T. McGuire</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:247.5pt; text-indent:-247.5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:288pt; text-indent:-288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Attorneys for Oppenheimer &amp; Co., Inc.</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dated:</P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">February 23, 2010</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
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<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex102.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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<TITLE>EXHIBIT 10</TITLE>
<META NAME="author" CONTENT="robertse">
<META NAME="date" CONTENT="02/26/2010">
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>EXHIBIT 10.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Execution Copy</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:21pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center>COMMONWEALTH OF MASSACHUSETTS</P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>OFFICE OF THE SECRETARY OF THE COMMONWEALTH</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>SECURITIES DIVISION</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>ONE ASHBURTON PLACE, ROOM 1701</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>BOSTON, MASSACHUSETTS 02108</B></P>
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<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">IN THE MATTER OF:</P>
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<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">OPPENHEIMER &amp; CO., INC.,</P>
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<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ALBERT LOWENTHAL,</P>
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<P style="margin:0pt; text-indent:288pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">DOCKET NO. 2008-0080</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ROBERT LOWENTHAL &amp;</P>
<P style="margin:0pt; text-indent:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">)</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">GREG WHITE</P>
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<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">RESPONDENTS.</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>OFFER OF SETTLEMENT</B></P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:36pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer &amp; Co., Inc., Albert Lowenthal, Robert Lowenthal and Greg White (&#147;Respondents&#148;), without admitting or denying the allegations set forth in the Administrative Complaint referenced below or the finding of fact and conclusions of law set forth below, submit this Offer of Settlement (&#147;Offer&#148;) in connection with an administrative proceeding against Respondents. On November 18, 2008, the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth (&#147;Division&#148;) filed an administrative complaint (&#147;Administrative Complaint&#148;) against Respondents alleging violations of the Massachusetts Uniform Securities Act (the &#147;Act&#148;). &nbsp;See Docket No. 2008-0080. &nbsp;The Administrative Complaint focused on Respondents&#146; roles in the sales of financial instruments known as auction rate securities (&#147;ARS&#148;
) to retail and other investors.</P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Offer is submitted, subject to the approval of Oppenheimer&#146;s Board of Directors and notification to the Division by Oppenheimer no later than February 26, 2010, for the purpose of settlement only and with the express understanding that it will not be used in any proceeding, unless this Offer is accepted by the Division, as hereafter set forth. If this Offer is not accepted by the Division, the Offer is withdrawn and shall not be used in or become part of any proceeding. &nbsp;Solely for the purpose of settling these proceedings, Respondents, consent to the entry of a Consent Order (&#147;Order&#148;) by the Division, consistent with this Offer, settling the pending administrative proceeding against Respondents (Docket No. 2008-0080) with prejudice. </P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>I. JURISDICTION AND AUTHORITY</B></P>
<P style="margin-top:0pt; margin-bottom:-26pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">1.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24pt; font-family:Times New Roman; font-size:12pt">The Massachusetts Securities Division is a division of the Office of the Secretary of the Commonwealth with jurisdiction over matters relating to securities, as provided for by the Act. The Act authorizes the Division to regulate: 1) the offers, sales, and purchases of securities; 2) those individuals offering and/or selling securities; and 3) those individuals and entities transacting business as investment advisers within the Commonwealth.</P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>I. RESPONDENTS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">2.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Oppenheimer &amp; Co., Inc.</U> (&#147;Oppenheimer&#148;) is a registered broker-dealer and investment adviser, registered and notice filed with Massachusetts, with a Central Registration Depository (&#147;CRD&#148;) number of 291. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">3.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Albert Lowenthal</U> &nbsp;is a natural person, registered as an agent of Oppenheimer, with a CRD number of 313519. &nbsp;Albert Lowenthal is Chairman and Chief Executive Officer at Oppenheimer.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">4.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Robert Lowenthal</U> is a natural person, registered as an agent of Oppenheimer, with a CRD number of 1639913. &nbsp;Robert Lowenthal is Senior Managing Director of the Taxable Fixed Income Trading Department at Oppenheimer. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">5.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Greg White </U>&nbsp;(&#147;White&#148;) is a natural person, registered as an agent of Oppenheimer, with a CRD number of 1107013. &nbsp;White is the Managing Director of the Auction Rate Department at Oppenheimer (&#147;Auction Rate Department&#148;).</P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>III. FACTS AND ALLEGATIONS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B>A. &nbsp;The Auction Rate Securities Market </B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">6. &nbsp;ARS consist of preferred shares from closed end funds (&#147;APS&#148;) which have a perpetual maturity, and dividends which reset every seven to thirty-five days through a Dutch Auction process, as well as long term debt instruments, issued by municipalities (&#147;Municipal ARCS&#148;) or student loan organizations (&#147;Student Loan ARCS&#148;), with maturities of twenty to forty years and interest rates that reset through the same process. &nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">7. &nbsp;Due to the upward sloping yield curve, issuers of long-term instruments typically have to pay higher interest rates, but due to the frequent auctions for ARS, the issuer of the ARS is allowed to pay short term rates on long term instruments. </P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">8. &nbsp;In a Dutch Auction ARS always trade at par, with the yield of the instrument determined by the dividend or interest rate determined by the auction. &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">9. &nbsp;In a Dutch Auction a security holder has three options, the holder can: (1) hold; (2) purchase or sell; or (3) purchase and hold at rate. &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">10. &nbsp;In order to acquire ARS, a bid needs to be placed into the auction at the rate and quantity that the bidder is willing to hold the securities. &nbsp;Orders for the available quantity of ARS are filled starting with the lowest bid rate up until all the shares offered for sale in the auction are allocated. &nbsp;The rate at which the final share from the auction is allocated sets the dividend or interest rate on the entire issue until the next auction. &nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">11. &nbsp;If there are not enough purchasers the auction fails, no shares change hands and the rate resets to a maximum rate proscribed in the instrument&#146;s offering document. </P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">12. &nbsp;The offering documents additionally proscribe that the rate set at auction can not exceed the maximum rate. </P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">13. &nbsp;The underwriting firms from which Oppenheimer obtained the ARS it sold, had the option but not the obligation to participate in the auctions and had traditionally supported their auctions by placing proprietary bids in the auctions to ensure the auction would not fail or hit its maximum rate. &nbsp;These firms were referred to as &#147;lead underwriters.&#148; &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">14. &nbsp;The ability of an ARS investor to liquidate his or her position is contingent on there being sufficient buy bids, whether they were placed by the lead underwriters or by other buyers. </P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B>B. Key ARS Features (Maximum Rates and AAA Ratings)</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">15. &nbsp;A key feature to the ARS was the maximum rate or penalty rate, which set an absolute ceiling on the dividend or interest rate on the instruments.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">16. &nbsp;Low maximum rates provided a strong basis for the instruments to achieve AAA ratings. </P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">17. &nbsp;AAA ratings from agencies such as Fitch and Moody&#146;s, are long term debt ratings, and signify a rating agency&#146;s assessment that there is a high likelihood that the security will pay interest or dividends as well as principal when due in a timely manner.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">18. &nbsp;Because the maximum rate places an absolute cap on the interest or dividend the instrument will pay, in turn restricting its potential obligations, lower maximum rates make it easier for the instrument to achieve a AAA rating.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">19. &nbsp;Financial firms including Oppenheimer used the AAA rating as an important marketing tool when describing the nature and safety of the product.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">20. &nbsp;However, the fact that lower maximum rates made acquiring a AAA rating easier had the perverse effect of motivating issuers and underwriters to set low maximum rates that were ultimately too low to garner investor interest. </P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">21. &nbsp;When the financial firms through which Oppenheimer offered ARS stopped supporting their ARS programs in February of 2008 due to their concerns over decreased buyer demand and low maximum rates, there were auction failures across much of the ARS market, causing many ARS to start paying their maximum rates.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">22. &nbsp;ARS with high maximum rates, typically Municipal ARCS with maximum rates in the range of 12-15% continued to have successful auctions because the rates were high enough to draw investor interest or to incentivize the issuer to offer a redemption. &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">23. &nbsp;ARS with low maximum rates, typically taxable and tax exempt APS and Student Loan ARCS, with maximum rates in the range of 3-5%, experienced failed auctions, and became illiquid, because the maximum rates were not high enough to draw investor interest or to incentivize issuers to offer a redemption. &nbsp;</P>
<P style="margin-top:3pt; margin-bottom:-26.8pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt"><B>C.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt"><B>Oppenheimer&#146;s Role in the ARS Market</B></P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">24.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">To facilitate the auction process, issuers of ARS selected one or more broker-dealers to underwrite an offering and/or manage an auction process.</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">25. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">In many instances, these chosen broker-dealers submitted their own bids to support the ARS auctions and to prevent the auctions from failing. </P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">26.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer, except in a limited number of circumstances, did not generally act as an underwriter, manager, or agent for any issuer of ARS.</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">27.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">As a distributing or &#147;downstream&#148; broker-dealer, Oppenheimer did not submit bids in an effort to support any of the ARS auctions or to prevent them from failing. </P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">28.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer also did not hold any significant inventory of ARS in its broker-dealer house account(s). </P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">29.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer acted as an agent, both on a solicited and unsolicited basis, for its investors by submitting their bids to purchase and orders to sell ARS.</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">30.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer received revenue, including fees for acting as an agent for investors in connection with ARS. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>D. Oppenheimer Marketed and Sold Auction Rate Securities as Safe, Liquid Short-Term Investments.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><B><BR></B></P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">31.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">In soliciting investors to purchase ARS prior to the middle of February 2008, Oppenheimer&#146;s retail brokers, known at Oppenheimer as Financial Advisors (&#147;FAs&#148;), made inaccurate comparisons between ARS and other investments, such as certificates of deposit or money market accounts, telling investors that ARS were similar investments but with a slightly higher yield. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">32.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">In soliciting investors to purchase ARS prior to the middle of February 2008, Oppenheimer&#146;s FAs also did not fairly characterize the investment nature of ARS since ARS are highly complex securities that are very different from money market funds or certificates of deposit, as evidenced by, among other things, the dependence of ARS on successful auctions for liquidity. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">33.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer&#146;s FAs also did not provide all investors with adequate and complete disclosures regarding the complexity of the auction process and the risks associated with ARS, including the circumstances under which an auction could fail. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">34.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer&#146;s FAs did not adequately disclose to investors that the customer&#146;s ability to liquidate the ARS depended on the willingness of other investors to buy the instruments at an auction. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-26.8pt; text-indent:36pt; line-height:26.8pt; font-family:Times New Roman; font-size:12pt">35.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24.8pt; font-family:Times New Roman; font-size:12pt">Oppenheimer was aware that its FAs marketed ARS to investors as liquid and as an alternative to cash, certificates of deposit, or money market funds without adequately disclosing that ARS are complex securities that may become illiquid. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">36. &nbsp;&nbsp;In addition, until February 2008, Auction Rate Preferred Shares were categorized as Cash Equivalents on customer account statements.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">37. &nbsp;Oppenheimer had no required training program regarding educating FAs on ARS or on selling ARS.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">38. &nbsp;Oppenheimer had no system in place to make sure that Oppenheimer FAs adequately understood the details about ARS before they sold them.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">39.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In or about August and September 2007, some auction rate securities auctions experienced failures. &nbsp;These failures were primarily based on credit quality concerns related to the ARS at issue, which often involved underlying assets of collaterized debt obligations. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">40.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Despite the fact that a number of auction-rate securities failed in August 2007, subsequent to August 2007, Oppenheimer did not inform all its FAs of those failures, but rather informed just those FAs that had investors who owned the auction rate securities that experienced the failures. </P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">41.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">During the fall of 2007 and into the beginning months of 2008, as the default rates on subprime mortgages soared and the market in general began experiencing significant credit tightening, monoline insurers that insured many issuances of auction rate securities were also becoming distressed and were at risk of ratings downgrades.</P>
<P style="margin:0pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">42. &nbsp;During 2007 and into 2008, Oppenheimer clients who purchased ARS typically had the ability to liquidate their holdings at the next auction. &nbsp;However, in late January and early February 2008, the lead underwriters sponsoring the entire ARS market stopped supporting their ARS programs. &nbsp;Once these lead underwriters stopped placing support bids, the market became illiquid, leaving certain Massachusetts investors and all other investors without the ability to liquidate their ARS holdings.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">43.</P>
<P style="margin:0pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The Division&#146;s investigation concluded that Oppenheimer &amp; Co. Inc., should have had knowledge that during the fall of 2007 and winter of 2008, that the auction markets were not functioning properly and were at increased risk for potential failure.</P>
<P style="margin:0pt; padding-right:-3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>IV. &nbsp;LEGAL CONCLUSIONS</B></P>
<P style="margin:0pt; padding-right:-3.6pt; font-family:Times New Roman; font-size:12pt" align=center><B><BR></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">A.</P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">VIOLATIONS OF &#167; 204 (a)(2)(G) BY OPPENHEIMER </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-3.6pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">44.</P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Section 204 (a)(2)(G) of the Act provides in pertinent part:</P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:36pt; padding-right:64.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(a) &nbsp;The secretary may by order impose an administrative fine or censure or deny, suspend, or revoke any registration or take any other appropriate action if he finds (1) that the order is in the public interest and (2) that the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser:&#150;</P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:36pt; padding-right:64.8pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:36pt; padding-right:64.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(G) has engaged in any unethical or dishonest conduct or practices in the securities, commodities or insurance business.</P>
<P style="margin:0pt; padding-right:-3.6pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-3.6pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">45.</P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The conduct of Oppenheimer, as described above, constitute violations of M.G.L. c.&nbsp;110A, &#167; 204 (a)(2)(G).</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">B. &nbsp;VIOLATION OF &#167; 204 (a)(2)(J) BY OPPENHEIMER</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-3.6pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">46.</P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Section 204 (a)(2)(J) of the Act provides in pertinent part:</P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:72pt; padding-right:134.65pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The secretary may by order deny, suspend, or revoke any registration if he finds (1) that the order is in the public interest and (2) that the applicant or registrant (J) has failed reasonably to supervise agents, investment adviser representatives or other employees to assure compliance with this chapter.</P>
<P style="margin:0pt; padding-left:72pt; padding-right:134.65pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:90pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">1.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:90pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The conduct of Oppenheimer, as described above, constitutes violations of M.G.L. c.&nbsp;110A, &#167; 204 (a)(2)(J).</P>
<P style="margin:0pt; padding-left:36pt; padding-right:63pt; text-indent:18pt; font-family:Times New Roman; font-size:12pt"><I><BR></I></P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>V. REPRESENTATIONS AND AGREEMENTS</B></P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:54pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>B.</B></P>
<P style="margin:0pt; padding-left:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Relief for Auction Rate Securities Investors</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">A.1.&nbsp;&nbsp;&nbsp;<B>&nbsp;Key Definitions</B></P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>48.</U></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Eligible Auction Rate Securities</U>. &nbsp;As used in the Offer, &#147;Eligible ARS&#148; shall mean auction rate securities issued by municipalities or closed-end funds or backed by student loans that were purchased &nbsp;from Oppenheimer on or before February 13, 2008 and that are currently illiquid due to failed auctions. Notwithstanding the foregoing definition, the term &#147;Eligible ARS&#148; shall not include ARS that were purchased at any firm other than Oppenheimer or at Oppenheimer in accounts owned or in the name of an independent registered investment adviser. </P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR>
<U>49.</U></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Massachusetts Customer Account</U>. &nbsp;As used in the Offer, a &#147;Massachusetts Customer Account&#148; shall mean the following, excluding Oppenheimer employee accounts and accounts identified in the associated side order, current owners with $2 million or less in Total Assets held (by one or more accounts residing at the same address) at Oppenheimer as of February 29, 2008, who purchased Eligible ARS at Oppenheimer on or before February 13, 2008, did not transfer Eligible ARS away from Oppenheimer, and held those securities at Oppenheimer on February 13, 2008:</P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">a.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Natural persons (including IRA accounts, testamentary trust and estate accounts, custodian accounts established under the Uniform Trust to Minors Act or Uniform Gifts to Minors Act, and guardianship accounts); or</P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">b.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Charities, endowments and foundations or organizations with Internal Revenue Code Section 501(c)(3) status.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>50.</U></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Tranche 1 and 2 Eligible Customer Accounts</U>. &nbsp;As used in the Offer, an &#147;Eligible Customer Account&#148; shall mean a Massachusetts Customer Account that held $1 million or less in Total Assets held (by one or more account residing at the same address) at Oppenheimer as of February 29, 2008. &nbsp;</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>51.</U></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Total Assets</U>. &nbsp;In calculating &#147;Total Assets&#148; held at Oppenheimer for the purposes of the Offer, Total Assets are calculated by aggregating all household accounts, which may include:</P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">a.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:72pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">All accounts with an identical address of record; </P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">b.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:72pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Accounts held in the name of immediate family members, which may include, husband or wife, parents, grandparents, mother-in-law or father-in-law, children, son-in law or daughter-in-law and grandchildren, who share the identical address of record as the primary account holder<U> </U>or whose account statements are also mailed to the primary account holder&#146;s address. &nbsp;</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>A.2.&nbsp;&nbsp;&nbsp;&nbsp;Purchase of ARS from Massachusetts Customer Accounts</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Tranche I </U></B></P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">52.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within 90 days of February 28, 2010, Oppenheimer shall offer to purchase $25,000 of Eligible ARS from Eligible Customer Accounts. (&#147;T1 Purchase Offer&#148;) &nbsp;The T1 Purchase Offer shall remain open for a period of seventy-five (75) days from the date on which the first written notice of the Purchase Offer was sent (the &#147;Offer Period&#148;). &nbsp;Upon acceptance of each Eligible Customer Account Offer, Oppenheimer shall have completed the purchase by, at the election of the customer, either crediting the customer&#146;s account or forwarding a check via certified mail payable to the Eligible Customer within ten (10) days after receiving the acceptance correspondence.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">53.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall, as soon as practicable after February 28, 2010, but within 90 days, provide Eligible Customer Accounts with first written notice of its offer to purchase $25,000 in Eligible ARS, as well as an explanation of what the customer must do to accept the T1 Purchase Offer, the relevant terms of the T1 Purchase Offer and any other material issues affecting the investors&#146; rights. &nbsp;The first written notice shall be sent to Eligible Investors via certified mail and Oppenheimer shall maintain return receipts of such written notices of Offers and make them available for inspection at the Division&#146;s request. &nbsp;For the Eligible Customer Accounts&#146; convenience, a Draft Acceptance Letter, along with a self-addressed stamped envelope, shall be included in the T1 Purchase Offer that can be signed and mailed back to Oppenheimer. &nbsp;Such T1 Purchase Offer and D
raft Acceptance Letter shall be in a form not unacceptable to the Division.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">54.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that any Eligible Customer Accounts have not responded to the T1 Purchase Offer on or before forty-five (45) days before the end of the Offer Period, Oppenheimer shall provide a second written notice, in a form not unacceptable to the Division, informing them again of the T1 Purchase Offer, the relevant terms of the T1 Purchase Offer, and any other material issues affecting the investors&#146; rights.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">55.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Eligible Customer Accounts may accept the T1 Purchase Offer by notifying Oppenheimer by returning a signed version of the Draft Acceptance Letter, or some other reasonable signed written substitute, at any time before midnight, Eastern Standard Time, on the last day of the applicable Offer Period. &nbsp;Failure by an Eligible Customer Account to accept the T1 Purchase Offer within the Offer Period shall result in the termination of the T1 Purchase Offer and render the Account ineligible for accepting the terms of the T1 Purchase Offer at any time in the future. </P>
<P style="margin-top:5pt; margin-bottom:5pt; padding-left:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Tranche II</B></P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">56.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within 90 days of the Tranche I Purchase Offer, but no later than August 28, 2010, Oppenheimer shall establish a Fund for Redemption (the &#147;Fund&#148;) capitalized with $2 million. &nbsp;Oppenheimer shall use the Fund, for the benefit of eligible Massachusetts Customer Accounts, to offer to purchase all Eligible ARS from Eligible Customer Accounts (&#147;T2 Purchase Offer&#148;). &nbsp;</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">57.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The T2 Purchase Offer shall remain open for a period of seventy-five (75) days from the date on which the first written notice of the Purchase Offer was sent (the &#147;Offer Period&#148;). &nbsp;Upon acceptance of each Eligible Customer Account Offer, Oppenheimer shall have completed the purchase by, at the election of the customer, either crediting the customer&#146;s account or forwarding a check via certified mail payable to the Eligible Customer within ten (10) days after receiving the acceptance correspondence.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">58.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall, as soon as practicable, but within 180 days of February 28, 2010, provide T2 Eligible Customer Accounts with first written notice of its offer to purchase all Eligible ARS, as well as an explanation of what the customer must do to accept the T2 Purchase Offer, the relevant terms of the T2 Purchase Offer and any other material issues affecting the investors&#146; rights. &nbsp;The first written notice shall be sent to Eligible Investors via certified mail and Oppenheimer shall maintain return receipts of such written notices of the T2 Purchase Offers and make them available for inspection at the Division&#146;s request. &nbsp;For the Eligible Customer Accounts&#146; convenience, a Draft Acceptance Letter, along with a self-addressed stamped envelope, shall be included in the T2 Purchase Offer that can be signed and mailed back to Oppenheimer. &nbsp;Such T2 Purchase O
ffer and Draft Acceptance Letter shall be in a form not unacceptable to the Division.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">59.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that any Eligible Customer Accounts have not responded to the T2 Purchase Offer on or before forty-five (45) days before the end of the Offer Period, Oppenheimer shall provide a second written notice, in a form not unacceptable to the Division, informing them again of the T2 Purchase Offer, the relevant terms of the T2 Purchase Offer, and any other material issues affecting the investors&#146; rights.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">60.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Eligible Customer Accounts may accept the T2 Purchase Offer by notifying Oppenheimer by returning a signed version of the Draft Acceptance Letter, or some other reasonable signed written substitute, at any time before midnight, Eastern Standard Time, on the last day of the applicable Offer Period. &nbsp;Failure by an Eligible Customer Account to accept the T2 Purchase Offer within the Offer Period shall result in the termination of the T2 Purchase Offer.-</P>
<P style="margin-top:5pt; margin-bottom:5pt; padding-left:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Tranche III</B></P>
<A NAME="OLE_LINK1"></A><A NAME="OLE_LINK2"></A><P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">61.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within 180 days of the Tranche II Purchase Offer, but no later than February 29, 2011, Oppenheimer shall deposit into the Fund for Redemption $1.45 million of additional capital, and shall use the Fund, for the benefit of eligible Massachusetts Customer Accounts, to offer to purchase all Eligible ARS from all Massachusetts Customer Accounts &nbsp;(&#147;T3 Purchase Offer&#148;). &nbsp;</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">62.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">The T3 Purchase Offer shall remain open for a period of seventy-five (75) days from the date on which the first written notice of the Purchase Offer was sent (the &#147;Offer Period&#148;). &nbsp;Upon acceptance of each Eligible Customer Account Offer, Oppenheimer shall have completed the purchase by, at the election of the customer, either crediting the customer&#146;s account or forwarding a check via certified mail payable to the Eligible Customer within ten (10) days after receiving the acceptance correspondence.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">63.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall, as soon as practicable, but &nbsp;no later than December 31, 2010, provide Massachusetts Customer Accounts with first written notice of its offer to purchase all Eligible ARS, as well as an explanation of what the customer must do to accept the T3 Purchase Offer, the relevant terms of the T3 Purchase Offer and any other material issues affecting the investors&#146; rights. &nbsp;The first written notice shall be sent to Eligible Investors via certified mail and Oppenheimer shall maintain return receipts of such written notices of the T3 Purchases Offers and make them available for inspection at the Division&#146;s request. &nbsp;For the Eligible Customer Accounts&#146; convenience, a Draft Acceptance Letter, along with a self-addressed stamped envelope, shall be included in the T3 Purchase Offer that can be signed and mailed back to Oppenheimer. &nbsp;Such T3 Purcha
se Offer and Draft Acceptance Letter shall be in a form not unacceptable to the Division.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">64.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that any Massachusetts Investors have not responded to the T3 Purchase Offer on or before forty-five (45) days before the end of the Offer Period, Oppenheimer shall provide a second written notice, in a form not unacceptable to the Division, informing them again of the T3 Purchase Offer, the relevant terms of the T3 Purchase Offer, and any other material issues affecting the investors&#146; rights.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">65.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Massachusetts Investors may accept the T3 Purchase Offer by notifying Oppenheimer by returning a signed version of the Draft Acceptance Letter, or some other reasonable signed written substitute, at any time before midnight, Eastern Standard Time, on the last day of the applicable Offer Period. &nbsp;Failure by an Eligible Customer Account to accept the T3 Purchase Offer within the Offer Period shall result in the termination of the T3 Purchase Offer.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; padding-left:54pt; text-indent:-36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>A.</B></P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Alternative Liquidity Option for High Net Worth Investors</B></P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">66.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer shall endeavor to continue to work with issuers and other interested parties, including regulatory and other authorities and industry participants, to provide liquidity solutions for High Net Worth Investors outside the definition of a Massachusetts Customer Account. &nbsp;</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">67.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Further, Oppenheimer shall offer those accounts with more than $2 million in Total Assets (&#147;High Net Worth Investors&#148;) an Alternative Liquidity Option.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">68.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Within 90 days of February 28, 2010, Oppenheimer shall offer High Net Worth Investors a margin loan (subject to receipt of appropriate margin loan documentation) in an amount equal to the High Net Worth Investor&#146;s holdings of Eligible ARS at an interest rate that shall not exceed the yield on the ARS held by the High Net Worth Investors.&nbsp; The rate on the loan shall&nbsp;at all times&nbsp; remain equal to or preferred as to the rate that the High Net Worth Investors could obtain from Oppenheimer independent of this Offer&nbsp; (the &#147;Agreed Upon Rate&#148;). &nbsp;Notwithstanding the Agreed Upon Rate, for the first twelve (12) months after the loan is made, High Net Worth Investors shall be charged an interest rate on the margin loan that will be limited to one half percentage point below the Agreed Upon Rate.&nbsp;&nbsp;The interest rate&nbsp;on the margin loan shall at 
all times be a positive integer or zero. &nbsp;All margin loans provided pursuant to this Offer must be collateralized by securities pledged by the High Net Worth Investors that are eligible collateral under Regulation T of the Federal Reserve.&nbsp; </P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">69.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">High Net Worth Investors accepting the Alternative Liquidity Option must agree that the proceeds of all redemptions of Eligible ARS shall be applied to the outstanding loan balance. &nbsp;Any such loan made under the Alternative Liquidity Option shall not prejudice the High Net Worth Investor&#146;s right to the redemption of ARS through issuer redemptions or any subsequent offers made by Oppenheimer.</P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">70.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">In addition to the offering of the Alternative Liquidity Option, Oppenheimer shall use its best efforts to assist High Net Worth Investors after all Eligible ARS have been fully redeemed from all Massachusetts Customer Accounts. &nbsp;To that end, any capital remaining in the Fund for Redemption after all Massachusetts Customer Accounts have been fully redeemed shall be used to redeem Eligible ARS from High Net Worth Investors&#146; accounts on a pro-rata basis.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>D.</B></P>
<P style="margin-top:0pt; margin-bottom:12pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B>Subsequent Investor Relief</B></P>
<P style="margin-top:5pt; margin-bottom:-14pt; text-indent:54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">71.</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">To the extent that Oppenheimer &amp; Co. Inc., agrees to any subsequent settlement and/or order with any other state or federal regulator, which includes a term or terms which are more favorable to those terms identified herein relating to Oppenheimer &amp; Co. Inc&#146;s Massachusetts Customer Accounts, High Net Worth Investors (as identified and defined herein) or institutional investors, the subsequent term or terms shall be incorporated by reference into this Settlement and become equally applicable to such Massachusetts investors.</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-3.6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>F.</B></P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><B>Other Provisions</B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-right:-3.6pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">72.</P>
<P style="margin:0pt; padding-right:-3.6pt; text-indent:72pt; line-height:26pt; font-family:Times New Roman; font-size:12pt"><U>Cost of Investigation/Administrative Proceeding</U></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer &amp; Co., Inc. shall pay the costs of external costs incurred by the Division, such as outside counsel, expert fees and vendors, as a result of the Division&#146;s investigation and Administrative Proceeding in an amount totaling $250,000.00 to the Secretary of the Commonwealth of Massachusetts. </P>
<P style="margin-top:12pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>73.</P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>No Disqualification</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">An Order issued by the Division consistent with this Offer shall waive any disqualification contained in the Massachusetts laws, or rules or regulations there under, including any disqualifications from relying upon the registration exemptions or safe harbor provisions that Oppenheimer &amp; Co., Inc. or any of its affiliates may be subject to. &nbsp;The Order shall not be intended to subject Oppenheimer &amp; Co., Inc. or any of its affiliates to any disqualifications contained in the federal securities laws, the rules and regulations thereunder, the rules and regulations of self regulatory organizations or various states&#146; or U.S. Territories&#146; securities laws, including, without limitation, any disqualifications from relying upon the registration exemptions or safe harbor provisions. &nbsp;In addition, the Order shall not be intended to form the basis for any such disqualif
ications.</P>
<P style="margin-top:0pt; margin-bottom:-26pt; text-indent:18pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">74.</P>
<P style="margin:0pt; text-indent:72pt; line-height:24pt; font-family:Times New Roman; font-size:12pt">Except in an action by the Division to enforce the obligations of Oppenheimer under the Consent Order consistent with this Offer, neither this Offer nor the Order nor any acts performed or documents executed in furtherance of this Offer or the Order: (a) may be deemed or used an admissions of , or evidence of , the validity of any alleged wrongdoing, liability or lack of wrongdoing or liability; or (b) may be deemed or used as an admission of or evidence of any such alleged fault or omission of Oppenheimer in any civil, criminal, arbitration or administrative proceeding in any court, administrative agency or other tribunal. &nbsp;This Offer and the Order shall not convey any rights upon persons or entities who are not a party to this Offer or the Order.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:12pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>75.</P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>In Consideration of the Offer the State will: </U></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:10.5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">a.</P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:117pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Terminate the investigation and Administrative Proceeding against Respondents related to their marketing and sale of auction rate securities; and</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">b.</P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:117pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;Not seek additional sanctions or penalties from Respondents relating to the issues raised by the Division in the administrative proceeding relating to Respondents&#146; marketing and sale of auction rate securities to investors; and,</P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:117pt; text-indent:-27pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">c. </P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:117pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Enter a cease and desist order against Oppenheimer from future violations of the Act.</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>76.</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>Failure to Comply With Terms of Settlement</U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:10.8pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">If after this settlement is executed, Respondents fail to comply with any of the terms set forth herein, the Division may institute an action to have this agreement declared null and void. Upon issuance of an appropriate order, after a fair hearing, the Division may reinstitute the actions and investigations referenced in this Offer.</P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>I. WAIVER</B></P>
<P style="margin:0pt; padding-left:18pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Respondents hereby waive any right to file an answer to the Consent Order entered pursuant to this Offer, to a hearing, to written findings of fact or conclusions of law, to any other process provided by statute or otherwise, and to judicial review of the Consent Order entered pursuant to this Offer. Nothing herein shall bind Respondents in any proceedings in which the Division is not a party.</P>
<P style="margin-top:12pt; margin-bottom:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>II. AUTHORITY</B></P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Respondents hereby state that the tender of this Offer is a voluntary act on their own individual parts, that each has the power and authority to tender and execute this Offer, and that each has had an opportunity to consult legal counsel regarding the terms and conditions of the Offer.</P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:26pt; font-family:Times New Roman; font-size:12pt">Oppenheimer &amp; Co., Inc.</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By &nbsp;<U>/s/ Albert Lowenthal</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Title &nbsp;<U>Chairman &amp; CEO</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date &nbsp;<U>February 22, 2010 &nbsp;&nbsp;&nbsp;&nbsp;</U>______________</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:12pt; margin-bottom:6pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Albert Lowenthal</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;<U>/s/ Albert Lowenthal</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date &nbsp;&nbsp;<U>February 22, 2010</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin-top:12pt; margin-bottom:6pt; padding-left:252pt; font-family:Times New Roman; font-size:12pt"><BR>
<BR></P>
<P style="page-break-before:always; margin-top:12pt; margin-bottom:6pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Robert Lowenthal</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;<U>/s/ Robert Lowenthal</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date <U>February 22, 2010</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:12pt; margin-bottom:6pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Greg White</P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;/<U>s/ Greg White</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
<P style="margin-top:12pt; margin-bottom:-14pt; padding-left:252pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date &nbsp;<U>February 22, 2010</U></P>
<P style="margin-top:0pt; margin-bottom:6pt; padding-left:252pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><U><BR></U></P>
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