Citigroup (C)

THE CLOSING

Section 2.1 Closing. The closing of the transactions provided for in this Agreement (the “Closing”) shall take place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York New York, 10036-6522 at 9:00 a.m., New York City time, on the first calendar month-end following the date on which the last of the conditions required to be satisfied or waived pursuant to Article VII is either satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver thereof), or (b) at such other place, time or date as the Parties shall agree upon in writing. The date on which the Closing is to occur is referred to herein as the “Closing Date.”

Section 2.2 Preliminary Information.

(a) (i) Citigroup shall prepare, or cause to be prepared, and deliver, or cause to be delivered, to Legg Mason (A) at least five Business Days prior to the Closing Date, the CAM Estimated Closing Date Balance Sheet prepared in accordance with Section 2.2(a)(ii) and calculations in reasonable detail based upon such CAM Estimated Closing Date Balance Sheet setting forth the estimated amounts of CAM Tangible Book Value, together with a certificate duly executed by an appropriate officer of a Citigroup Seller certifying that the CAM Estimated Closing Date Balance Sheet and such calculations were prepared in accordance with Section 2.2(a)(ii) and (B) at least two Business Days prior to the Closing Date, an updated Revenue Run-Rate Schedule prepared as of the Closing Revenue Run-Rate Date.

(ii) Citigroup shall, in good faith and at Citigroup’s expense, prepare, or cause to be prepared, the CAM Estimated Closing Date Balance Sheet using the accounting principles, procedures, policies and methods used in preparing the CAM Base Balance Sheet, including the types of adjustments used in preparing such CAM Base Balance Sheet as set forth in the notes thereto. Citigroup shall give, and shall use its reasonable best efforts to cause its advisers to give,

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Legg Mason and its respective advisers reasonable access to such books, records and personnel of Citigroup (including the work papers of Citigroup and its accountants relating to the preparation of the CAM Estimated Closing Date Balance Sheet and such calculations based thereon) as may be necessary to enable Legg Mason and its advisers to review the CAM Estimated Closing Date Balance Sheet and such calculations based thereon prior to the Closing. For the avoidance of doubt, in the event of any disagreement between Citigroup and Legg Mason as to the preparation of the CAM Estimated Closing Date Balance Sheet (or any amount thereon) or the calculation of CAM Tangible Book Value, the amounts set forth in such CAM Estimated Closing Date Balance Sheet or such calculations shall control (without regard to any adjustment requested by Legg Mason that is not agreed to by Citigroup) for all purposes of this Agreement at the Closing, subject to the rights of Legg Mason as set forth in Section 3.1.

(b) (i) Legg Mason shall prepare, or cause to be prepared, and deliver, or cause to be delivered, to Citigroup (A) at least five Business Days prior to the Closing Date, the PC/CM Estimated Closing Date Balance Sheet prepared in accordance with Section 2.2(b)(ii) and calculations in reasonable detail based upon such PC/CM Estimated Closing Date Balance Sheets setting forth the estimated amounts of PC/CM Tangible Book Value and the capital ratio, together with a certificate duly executed by an appropriate officer of a Legg Mason Seller certifying that the PC/CM Estimated Closing Date Balance Sheet and such calculations were prepared in accordance with Section 2.2(b)(ii) and (B) at least two Business Days prior to the Closing Date, a certificate signed by the Chief Financial Officer of Legg Mason certifying as to the number of shares of Legg Mason Common Stock issued and outstanding as of the date of such certificate for purposes of the calculations to be made pursuant to Section 1.2(a).

(ii) Legg Mason shall, in good faith and at Legg Mason’s expense, prepare, or cause to be prepared, the PC/CM Estimated Closing Date Balance Sheet using the accounting principles, procedures, policies and methods used in preparing the PC/CM Base Balance Sheet, including the types of adjustments used in preparing such PC/CM Base Balance Sheet as set forth in the notes thereto. Legg Mason shall give, and shall use its reasonable best efforts to cause its advisers to give, Citigroup and its respective advisers reasonable access to such books, records and personnel of Legg Mason (including the work papers of Legg Mason and its accountants relating to the preparation of the PC/CM Estimated Closing Date Balance Sheet and such calculations based thereon) as may be necessary to enable Citigroup and its advisers to review the PC/CM Estimated Closing Date Balance Sheet and such calculations based thereon prior to the Closing. For the avoidance of doubt, in the event of any disagreement between Citigroup and Legg Mason as to the preparation of the PC/CM Estimated Closing Date Balance Sheet (or any amount thereon) or the calculation of PC/CM Tangible Book Value or the capital ratio, the amounts set forth in such PC/CM Estimated Closing Date Balance Sheet or such calculations shall control (without regard to any adjustment requested by Citigroup that is not agreed to by Legg Mason) for all purposes of this Agreement at the Closing, subject to the rights of Citigroup as set forth in Section 3.2.

(c) Citigroup shall deliver or cause to be delivered to Legg Mason, not later than five Business Days prior to the Closing Date, a notice specifying (i) the name(s) of one or more Citigroup Sellers or Affiliates thereof to whom the Legg Mason Shares shall be issued and in whose name(s) the issuance of the Legg Mason Shares shall be registered on Legg Mason’s transfer books by Legg Mason’s transfer agent, (ii) the amount(s) and form of shares comprising

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the Legg Mason Shares to be issued to each such Citigroup Seller or wholly-owned Subsidiary thereof and (iii) the name(s) of one or more Citigroup Sellers or wholly-owned Subsidiaries thereof to whom the Legg Mason Note shall be issued; provided, however, that, to the extent reasonably practicable, Citigroup shall cause the Legg Mason Shares and the Legg Mason Note to be held by one or more Citigroup Affiliates so as to facilitate compliance by the Parties hereto and their respective Affiliates with ERISA.

Section 2.3 Citigroup Deliveries at Closing. At the Closing, Citigroup shall deliver or cause to be delivered to Legg Mason:

(a) stock certificates (or similar evidence) representing the CAM Transferred Shares, duly endorsed in blank or with stock powers executed in proper form for transfer, and with any required stock transfer stamps affixed thereto;

(b) [intentionally omitted];

(c) the Transition Services Agreements, duly executed;

(d) the Services Agreement, duly executed;

(e) the Registration and Investor Rights Agreement, duly executed;

(f) the resignations of the officers and directors of the CAM Subsidiaries designated by Legg Mason in writing at least five Business Days prior to the Closing Date;

(g) the officer’s certificate required pursuant to Section 7.2(c);

(h) a duly executed certificate of non-foreign status (a “FIRPTA Certificate”) from each Citigroup Seller in the form and manner that complies with Section 1445 of the Code and the Treasury Regulations promulgated thereunder; provided, however, that if a FIRPTA Certificate is unable to be furnished by a Citigroup Seller, then such Citigroup Seller may instead provide a certificate (an “Alternate Certificate”) pursuant to which such Citigroup Seller certifies under penalties of perjury that such Citigroup Seller is not disposing of any United States real property interest (as defined in Section 897(c) of the Code and the Treasury Regulations promulgated thereunder);

(i) copies (or other evidence) of all valid approvals or authorizations of, filings or registrations with, or notifications to, all Governmental Authorities required to be obtained, filed or made by Citigroup in satisfaction of Section 7.1(b);

(j) cash in an amount equal to the Legg Mason Continuing Deferred Compensation Amount in respect of the senior note to be issued pursuant to Section 1.2(d); and

(k) all such additional instruments, documents and certificates provided for by this Agreement or as may reasonably be requested by Legg Mason in order to consummate the Transactions.

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Section 2.4 Legg Mason Deliveries at Closing. At the Closing, Legg Mason shall deliver or cause to be delivered to Citigroup:

(a) stock certificates (or similar evidence) representing the PC/CM Transferred Shares, duly endorsed in blank or with stock powers executed in proper form for transfer, and with any required stock transfer stamps affixed thereto;

(b) one or more stock certificates representing the Legg Mason Shares, registered in accordance with the instructions provided pursuant to Section 2.2(c);

(c) the Legg Mason Note, duly executed;

(d) the senior note to be issued in accordance with Section 1.2(d), duly executed;

(e) the Transition Services Agreements, duly executed;

(f) the Services Agreement, duly executed;

(g) the Registration and Investor Rights Agreement, duly executed;

(h) the resignations of the officers and directors of the PC/CM Subsidiaries designated by Citigroup in writing at least five Business Days prior to the Closing Date;

(i) the officer’s certificate required pursuant to Section 7.3(c);

(j) a duly executed FIRPTA Certificate from each Legg Mason Seller in the form and manner that complies with Section 1445 of the Code and the Treasury Regulations promulgated thereunder; provided, however, that if a FIRPTA Certificate is unable to be furnished by a Legg Mason Seller, then such Legg Mason Seller may instead provide an Alternate Certificate pursuant to which such Legg Mason Seller certifies under penalties of perjury that such Legg Mason Seller is not disposing of any United States real property interest (as defined in Section 897(c) of the Code and the Treasury Regulations promulgated thereunder);

(k) copies (or other evidence) of all valid approvals or authorizations of, filings or registrations with, or notifications to, all Governmental Authorities required to be obtained, filed or made by Legg Mason in satisfaction of Section 7.1(b); and

(l) all such additional instruments, documents and certificates provided for by this Agreement or as may reasonably be requested by Citigroup in order to consummate the Transactions.

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Section 2.5 Proceedings at Closing. All proceedings to be taken, and all documents to be executed and delivered by the Parties, at the Closing shall be deemed to have been taken and executed simultaneously, and, except as permitted hereunder, no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken, executed and delivered.

Section 2.6 Withholding Rights. Each of Legg Mason and Citigroup (and their respective Affiliates) shall be entitled to deduct and withhold from any consideration (whether in cash or in kind) payable or transferable to the other Party (or its Affiliates) such amounts as it is required to deduct and withhold with respect to the making of such payment or transfer under the Code and the rules and regulations promulgated thereunder, or any other Requirement of Law. To the extent that amounts are so withheld by Legg Mason or Citigroup, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the other (or its Affiliates) in respect of which such deduction and withholding was made. Any amounts so withheld shall be remitted to the appropriate Governmental Authority on a timely basis. For the avoidance of doubt, this Section 2.6 shall not apply to Conveyance Taxes.

Section 2.7 Delayed Closing.

(a) Notwithstanding anything to the contrary contained in this Agreement, in the event that the Parties have determined that the conditions set forth in Article VII have been satisfied (other than conditions which by their terms are intended to be satisfied as of the Closing Date, with respect to which, upon the request of a Party, the Parties shall certify as to the satisfaction of such conditions to each other Party in connection with such determination), except that the transfer of any of the CAM Transferred Shares in respect of any CAM Transferred Subsidiary that is created or organized outside the United States and is immaterial to the CAM Business or any of the PC/CM Transferred Shares in respect of any PC/CM Subsidiary that is created or organized outside the United States and is immaterial to the PC/CM Business requires any material approval or permit of any Governmental Authority that has not then been received or obtained or the expiration of any applicable waiting period that has not expired (such transferred shares and the assets relating to the CAM Business or the PC/CM Business, as the case may be, conducted by such Subsidiary, collectively, the “Delayed Closing Assets”), either party shall have the right to require the Closing other than with respect to such Delayed Closing Assets, which Closing shall be effected as contemplated hereby, subject to subsections (b) and (f) below.

(b) In the event that there shall be a Delayed Closing, the Delayed Closing Assets shall not be transferred to Citigroup or Legg Mason, as applicable, at the Closing.

(c) One or more subsequent closings (the “Delayed Closing”) with respect to Delayed Closing Assets shall occur on the later of the second Business Day (the “Delayed Closing Date”) following receipt of the applicable approvals of any Governmental Authority and the expiration of any applicable waiting period with respect to such Delayed Closing Assets, the transfer of which require such approvals, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036-6522 at 10:00 a.m., New York City time, or at such other place, time or date as the Parties shall agree upon in writing. At a Delayed

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Closing, the Parties shall make such deliveries as may be reasonably necessary to assign the Delayed Closing Assets, as contemplated by Section 2.3 and 2.4 of this Agreement.

(d) From the Closing Date to the applicable Delayed Closing, Citigroup shall, with any necessary cooperation from Legg Mason, (i) take such actions with respect to Delayed Closing Assets intended to be acquired by Legg Mason hereunder as may be reasonably requested by Legg Mason to the extent permitted by any Requirement of Law, and (ii) (A) preserve each Delayed Closing Asset, (B) hold and operate each such Delayed Closing Asset in trust for the account of Legg Mason and (C) provide Legg Mason the economic benefit thereof, and transfer to Legg Mason the economic burden thereof, including discharging any liabilities or obligations relating to such Delayed Closing Assets, and Legg Mason shall be liable for such liabilities and obligations. To the extent that any Citigroup Seller is not lawfully able to hold and operate any such Delayed Closing Asset in trust for the account of Legg Mason as contemplated by the preceding sentence, such Citigroup Seller shall use its commercially reasonable efforts to enter into an arrangement that passes on to Legg Mason the economic costs, economic burdens and benefits of ownership of such Delayed Closing Assets. The foregoing shall be undertaken pursuant to documentation to be mutually agreed upon by Citigroup and Legg Mason.

(e) From the Closing Date to the applicable Delayed Closing, Legg Mason shall, with any necessary cooperation from Citigroup, (i) take such actions with respect to Delayed Closing Assets intended to be acquired by Citigroup hereunder as may be reasonably requested by Citigroup to the extent permitted by any Requirement of Law, and (ii) (A) preserve each Delayed Closing Asset, (B) hold and operate each such Delayed Closing Asset in trust for the account of Citigroup and (C) provide Citigroup the economic benefit thereof, and transfer to Citigroup the economic burden thereof, including discharging any liabilities or obligations relating to such Delayed Closing Assets, and Citigroup shall be liable for such liabilities and obligations. To the extent that any Legg Mason Seller is not lawfully able to hold and operate any such Delayed Closing Asset in trust for the account of Citigroup as contemplated by the preceding sentence, such Legg Mason Seller shall use its commercially reasonable efforts to enter into an arrangement that passes on to Citigroup the economic costs, economic burdens and benefits of ownership of such Delayed Closing Assets. The foregoing shall be undertaken pursuant to documentation to be mutually agreed upon by Legg Mason and Citigroup.

(f) Notwithstanding anything contained herein to the contrary, Section 7.1(b) shall be the only condition required to be satisfied or waived by any Party prior to a Delayed Closing in order to consummate the transactions contemplated by this Section 2.7 with respect to any Delayed Closing Assets. In respect of the Delayed Closing Assets, from the Closing Date to the Delayed Closing, Citigroup and Legg Mason shall continue to comply with all covenants and agreements contained in this Agreement that are required by their terms to be performed prior to the Closing solely in respect of the Delayed Closing Assets and, unless the context clearly requires otherwise and except for purposes of Article VIII hereof, all references in this Agreement to the “Closing” or the “Closing Date” shall, with respect to the Delayed Closing Assets, be deemed to refer to the Delayed Closing or the Delayed Closing Date, respectively.

(g) In the event any Delayed Closing does not occur, the Parties shall, to the extent lawful and practicable, use their reasonable best efforts to enter into arrangements to

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reinstate the intended benefits, net of the intended burdens, associated with the transfer of the relevant Delayed Closing Assets.