SUBSCRIPTION AGREEMENT (the ?Agreement?) dated as of January 18, 2000, between Thomas Weisel Partners Group LLC, a Delaware limited liability company (the ?Company?), and the California Public Employees? Retirement System (?Subscriber?).

RECITALS

     WHEREAS, the Executive Committee of the Company has determined that it is in the best interests of the Shareholders of the Company to sell 100,000,000 shares of Class D Redeemable Convertible Shares of the Company (the ?Shares?) to Subscriber for an aggregate cash consideration of $100,000,000 (the ?Purchase Price?), upon the terms and conditions hereinafter described; and WHEREAS, Subscriber desires to purchase the Shares from the Company for the Purchase Price, upon the terms and conditions hereinafter described;

     NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE I.

Definitions

     Capitalized terms used in this Subscription Agreement and not otherwise defined herein shall have the meanings assigned to them in the LLC Agreement.

     ?Alternate Fund? shall have the meaning set forth in Section 2.2.

     ?Alternative Investment Management Program? shall mean the program of such name conducted by Subscriber.

     ?Closing Date? shall have the meaning set forth in Section 2.1.

     ?Company? shall have the meaning set forth in the opening paragraph.

     ?Existing Alternate Fund? shall have the meanings set forth in Section 2.2(a)(vi).

     ?ERISA? shall mean the Employee Retirement Income Security Act of 1974, as amended.

     ?ERISA Affiliate? shall mean any trade or business (whether or not incorporated) that is a member of a group of which the Company is a member and which is treated as a single employer under Section 414 of the Code.

     ?Future Funds? shall have the meaning set forth in Section 2.3 ?Hart-Scott-Rodino Act? means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     ?Key Man Trust? shall have the meaning set forth in Section 6.12.

     ?Liquidating Event? shall have the meaning assigned to such term in the LLC Agreement.

     ?LLC Agreement? shall mean the Limited Liability Company Agreement of the Company, as amended and restated as of the Closing Date, the form of which is attached hereto as Exhibit A.

     ?Material Adverse Effect? shall mean any effect that (i) is material and adverse to the financial position, results of operations or business of the Company, or (ii) would materially impair the ability of either the Company or Subscriber, respectively, to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this Agreement; provided, however, that Material Adverse Effect shall not be deemed to include the impact of (a) changes in laws of general applicability or interpretations thereof by courts or governmental authorities, (b) changes in generally accepted accounting principles or regulatory accounting requirements applicable to the Company or Subscriber, and (c) changes caused by fluctuations in securities markets or changes in economic conditions affecting the Company or Subscriber.

     ?Multiemployer Plan? shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

     ?PBGC? shall mean the Pension Benefit Guarantee Corporation referred to and defined in ERISA.

     ?Person? means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated association or governmental agency, body or authority.

     ?Plan? means any employee benefit plan, within the meaning of ERISA Section 3(3), of the Company or an ERISA Affiliate and any severance or stock or other similar equity plans, programs, contracts or arrangements in respect of any of the present or former employees, directors, officers, shareholders, consultants or independent contractors of the Company or an ERISA Affiliate.

     ?Purchase Price? shall have the meaning set forth in the Recitals.

     ?Qualified Institutional Investor? means an institutional investor of size, experience and sophistication such that it is recognized as a credible leading investor in private funds of the type that includes the applicable Alternate Fund.

     ?Reportable Event? shall have the meaning assigned to such term in ERISA and the regulations thereunder.

     ?Separation Event? shall be deemed to have occurred if (1) within 24 months following the Closing Date, Thomas Weisel voluntarily ceases to be actively involved in the operations of the Company, or (2) at any time, Thomas Weisel and another member of the Executive Committee, as constituted on the date hereof, or any replacement of any such member (other than Thomas Weisel) approved by Subscriber in accordance with Section 2.2(b), cease to be

actively involved in the operations of the Company for any reason or (3) at any time, three members of the Executive Committee, as constituted on the date hereof, or any replacement of any such member approved by Subscriber in accordance with Section 2.2(b), cease to be actively involved in the operations of the Company for any reason.

     ?Shares? shall have the meaning set forth in the Recitals.

     ?Shareholders? shall mean the members of the Company who are referred to as ?Shareholders? in the LLC Agreement.

     ?Subscriber? shall have the meaning set forth in the opening paragraph.

     ?Withdrawal Liability? shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

ARTICLE II.

Subscription; Contingent Commitments; Other Potential Investments

     2.1 Subscription. By executing this Agreement, the Company agrees to issue and sell to Subscriber, and Subscriber agrees to purchase from the Company, the Shares, for the Purchase Price. Such purchase is made on and subject to the terms and conditions set forth in this Agreement and in the LLC Agreement. Upon payment of the Purchase Price, the Company will admit Subscriber as a Shareholder of the Company. The closing of this transaction shall occur when the conditions in Article VI are satisfied and is scheduled to occur on January 21, 2000 at the offices of Sullivan & Cromwell in Los Angeles, California, or at such other date and location as the parties mutually agree. The date of closing is herein called the ?Closing Date?.

     2.2 Contingent Commitment. (a) From and after the Closing Date until the earliest to occur of (i) the end of the sixth year following the Closing Date, (ii) a Liquidating Event that results in a change of control of the Company (other than an initial public offering with respect to the Company or any successor to the Company) or (iii) a Separation Event, Subscriber will make capital commitments to each new alternative investment fund sponsored by the Company (an ?Alternate Fund?), and the Company shall cause such capital commitments to be accepted, subject to the following and the other provisions of this Section 2.2: