FREEDOM SECURITIES CORP /DE/, S-1, 1998-01-26

FREEDOM SECURITIES CORP /DE/
S-1, 1998-01-26

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1998

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FREEDOM SECURITIES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 6211 04-3335712
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

ONE BEACON STREET
BOSTON, MA 02108
(617) 725-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

JOHN H. GOLDSMITH
CHIEF EXECUTIVE OFFICER
ONE BEACON STREET
BOSTON, MA 02108
(617) 725-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

Copies to:

<TABLE>
<S> <C>
JAMES WESTRA, ESQUIRE RICHARD D. TRUESDELL, JR., ESQUIRE
HUTCHINS, WHEELER & DITTMAR DAVIS POLK & WARDWELL
A PROFESSIONAL CORPORATION 450 LEXINGTON AVENUE
101 FEDERAL STREET NEW YORK, NY 10017
BOSTON, MASSACHUSETTS 02110 (212) 450-4000
(617) 951-6600
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the earlier
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- - - - - - - - - - - - - - - ------------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE
- - - - - - - - - - - - - - - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per
share........................... shares $ $138,000,000 $40,710.00
==========================================================================================================
</TABLE>

(1) Includes an aggregate of shares which the Underwriters have
the option to purchase from the Selling Stockholders solely to cover
over-allotments, if any. See "Underwriting."

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JANUARY 26, 1998
PROSPECTUS
, 1998

(LOGO)

FREEDOM SECURITIES CORPORATION
COMMON STOCK

Of the shares of Common Stock of Freedom Securities
Corporation ("Freedom" or the "Company") offered hereby (the "Offering"),
shares are being sold by the Company and shares
are being sold by the Selling Stockholders (as defined herein). The Company will
not receive any of the proceeds from the sale of shares by the Selling
Stockholders.

Prior to the Offering, there has been no public market for the Common
Stock. It is currently anticipated that the initial public offering price of the
Common Stock will be between $ and $ per share. See "Underwriting" for
information relating to the factors to be considered in determining the initial
offering price.

The Company intends to apply to have the Common Stock approved for listing
on The New York Stock Exchange ("NYSE") under the symbol "FSI".
------------------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO THE DISCOUNTS AND TO THE SELLING
PUBLIC(1) COMMISSIONS(2) COMPANY(3) STOCKHOLDERS
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share....................... $ $ $ $
Total(4)........................ $ $ $ $
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
</TABLE>

(1) In connection with the offering, the Underwriters have reserved for sale
approximately shares of Common Stock for directors and current
employees of the Company who have an interest in purchasing such shares of
Common Stock in the Offering. The Underwriters have advised the Company that
the price per share for such shares will be the Price to the Public less
Underwriting Discounts and Commissions, or per share.
(2) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) Before deducting expenses estimated at $ , payable by the
Company.
(4) The Selling Stockholders have granted to the Underwriters a 30-day option to
purchase up to additional shares at the Price to the Public
less Underwriting Discounts and Commissions, solely to cover over-
allotments, if any. If such option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions, Proceeds to Company, and
Proceeds to Selling Stockholders will be $ , $ ,
$ and $ , respectively. See "Underwriting."

The shares are being offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them and subject to various
prior conditions, including their right to reject orders in whole or in part. It
is expected that delivery of the shares will be made against payment in New
York, New York on or about , 1998.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

CREDIT SUISSE FIRST BOSTON
SUTRO & CO. INCORPORATED
TUCKER ANTHONY
INCORPORATED
<PAGE> 3

[FRONT COVER ARTWORK]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE> 4

- - - - - - - - - - - - - - - -------------------------------------------------------------------------------

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes appearing elsewhere in the
Prospectus. Unless the context otherwise requires, the terms "Freedom" and "the
Company" mean Freedom Securities Corporation and its consolidated subsidiaries
during periods following the Acquisition described below and its predecessor
(the "Predecessor Company") during periods prior to the Acquisition. Certain
market information contained herein is based on securities industry
publications. Unless otherwise indicated, information in this Prospectus assumes
no exercise of the Underwriters' option to purchase up to additional
shares from the Selling Stockholders to cover over-allotments, if any. Share
information contained in this Prospectus gives effect to a for split of the
Company's Common Stock to be effected prior to consummation of the Offering.

THE COMPANY

Freedom, through its two brokerage subsidiaries, Tucker Anthony
Incorporated ("Tucker Anthony") and Sutro & Co. Incorporated ("Sutro"), and its
asset management subsidiary, Freedom Capital Management Corporation ("Freedom
Capital"), is a full-service, regionally focused retail brokerage and investment
banking firm. Tucker Anthony, headquartered in Boston and focused primarily on
the northeastern United States, and Sutro, headquartered in San Francisco and
focused primarily on the western United States, are both over 100 years old and
have well established reputations in their respective regions. Management
believes that it can best serve the needs of these distinct regions through
separate, locally managed organizations, while avoiding cost duplication through
the use of shared clearing, communications, information systems, and other
support services. This approach enables the Company to capitalize on each
organization's name recognition, historical areas of expertise and close
regional and community ties while lessening the Company's reliance on a single
region's economy.

The Company believes that its primary strengths are (i) the experience and
tenure of its investment executives, which have often led to long-term
relationships with clients in their respective communities; (ii) its high level
of employee commitment, evidenced by significant employee ownership in the
Company; (iii) its personalized, service-oriented culture emphasizing
responsiveness to client and regional market demands; (iv) its focus on emerging
and middle-market companies in targeted industries in which the Company has
specialized expertise or regional presence; and (v) its ability to manage and
control operating costs through centralization of certain services and other
cost effective solutions, including its clearing and processing arrangements
with Wexford Clearing Services Corporation ("Wexford"), a guaranteed wholly
owned subsidiary of Prudential Securities, Inc. ("PSI").

The Company's three primary areas of focus are (i) its full-service retail
brokerage operations; (ii) its equity capital markets activities, encompassing
investment banking, equity research, institutional sales and equity trading; and
(iii) its asset management operations.

Retail Operations. The retail operations of Tucker Anthony and Sutro,
conducted in 13 states and the District of Columbia, have together generated
over 55% of the Company's net revenues in each of the last three years and have
historically represented the Company's core strength. In its retail operations,
the Company focuses on maintaining and developing strong client relationships
through a dedicated community focus while providing the breadth and quality of
services and products offered by national brokerage firms. As of December 31,
1997, customers had over $28 billion of assets in over 200,000 Tucker Anthony
and Sutro brokerage accounts. Management believes that the experience of its 677
investment executives and their strong ties to their communities help to
differentiate the Company from its competitors and enable the Company to more
effectively access and serve its clients. Management also believes that its
strategy of providing its investment executives with a high level of support and
the flexibility to operate in an entrepreneurial manner has allowed the Company
to recruit and retain highly effective, motivated investment executives, many of
whom have significant tenure at their local branch offices.

- - - - - - - - - - - - - - - -------------------------------------------------------------------------------
3
<PAGE> 5

Equity Capital Markets. As with its retail brokerage business, management
believes that the Company can best serve the needs of its institutional and
corporate clients through regionally managed and focused operations. Each of
Tucker Anthony and Sutro has historically demonstrated strengths in offering
various investment banking services, such as merger and acquisition services,
primarily to clients within its respective region. The Company's strategy is to
develop equally strong, research-driven equity capital markets groups including
enhanced equity research, institutional sales, trading and syndication services.
Tucker Anthony's and Sutro's respective research departments target emerging and
middle-market companies within their respective regions as well as within the
industries in which they specialize. Management believes that the northeastern
and western United States are particularly fertile sources of emerging and
middle-market companies, especially in the technology, healthcare, financial
services and consumer product sectors. Both Tucker Anthony and Sutro have sought
to tailor their equity capital market services to such industries and other
industries concentrated in their respective regions.

Asset Management. Freedom Capital, headquartered in Boston, was formed in
1930 and as of December 31, 1997 managed approximately $5.6 billion of assets,
including approximately $3.0 billion of investments by public sector entities,
high net worth individuals and others, with the remainder comprised of money
market funds for the benefit of Tucker Anthony and Sutro clients. Through its
institutional group, Freedom Institutional Partners, Freedom Capital has
developed a leading position in the management of public funds for local
Massachusetts municipalities and agencies. This group has also developed an
important presence in the Taft-Hartley union pension fund market and is growing
its corporate funds management business. Freedom Capital is actively seeking to
acquire smaller regional money management firms to increase both assets under
management and the number of its portfolio managers. Management believes that
the additional services and products offered as a result of such acquisitions
will create significant opportunities to capitalize on the Company's established
retail brokerage network by capturing a higher percentage of customer investment
dollars.

BUSINESS STRATEGY

Management believes that certain market and demographic trends are creating
attractive opportunities for regional brokerage firms. Such trends include (i)
unprecedented amounts of capital being invested in securities; (ii) individuals'
increased reliance on self-directed as opposed to company managed retirement
savings plans; (iii) the transfer of wealth to the baby boom generation from
older generations; (iv) the securities industry's reduced emphasis on
personalized brokerage and money management services resulting primarily from
consolidation in the financial services industry and the advent of electronic
discount brokers; and (v) an increased number of emerging and middle-market
companies seeking to access financial markets. The Company's strategy is to
continue to differentiate itself from many of its competitors by providing a
high level of personalized service and a diverse product offering to its
brokerage and money management clients and by providing integrated equity
capital markets services to emerging and middle-market companies in selected
regions and industries. The elements of the Company's business strategy,
discussed below, are intended to capitalize on the opportunities resulting from
these existing market and demographic trends.

Enhance Personalized, High-End Service. The Company believes that the
scope and focus of its regional brokerage firms and their commitment to
personalized service allow Tucker Anthony and Sutro to fulfill the needs of
their current and prospective customers better than national full service and
discount brokerage firms. The Company intends to increase its commitment to
service by (i) combining the advantages of advanced account information systems
with personalized service; (ii) providing investment executives with flexibility
in determining appropriate fee schedules for certain services based upon the
level of customer needs; and (iii) providing an array of one-stop investment and
financial planning services.

4
<PAGE> 6

executives in order to better leverage its infrastructure, reduce turnover among
investment executives and, like Tucker Anthony, increase the productivity of its
existing investment executives. In the year ended December 31, 1997, average
production per retail investment executive increased 15% at Tucker Anthony and
13% at Sutro compared to 1996. Management believes that the implementation of
these strategies will be aided by the Company's entrepreneurial culture and
strategy of providing a high level of support for its investment executives.

Expand Regional and Specialty Investment Banking Activities. Tucker
Anthony and Sutro maintain separate and independent investment banking groups.
Each group is organized to meet the specific needs of the emerging and
middle-market companies located within its geographic region and within its
areas of specialized industry expertise. Each investment banking group is
supported by its own regionally and industry focused research department,
institutional sales group and equity trading. Management believes that the
demand for regionally focused investment banking services by emerging and
middle-market companies in the Company's two principal regions will grow due to
continued general economic expansion and the corresponding growth of new
business formations. Management believes that this independent and regional
focus is particularly well suited to the northeastern and western regions
currently served by Tucker Anthony and Sutro, respectively. In 1997, for
example, Massachusetts and California ranked seventh and first, respectively, in
dollar volume of public offerings of common stock of locally headquartered
companies. Management also believes that consolidation within the investment
banking industry, as a whole, will offer enhanced opportunities for those firms
which maintain their local and industry specific focus. The Company intends to
improve the penetration of Tucker Anthony's and Sutro's investment banking
services in their regional and industry specific markets by committing greater
resources to, and by carefully focusing their research coverage on, geographic
regions and on industry niches which offer the greatest opportunities.

Increase Asset Management Business. Management believes that opportunities
exist to increase the productivity and profitability of Freedom Capital. Freedom
Capital intends to make selective business acquisitions designed to increase the
assets under its management and increase the number of portfolio managers. The
Company also intends to increase the productivity and profitability of Freedom
Capital through improved coordination with the Tucker Anthony and Sutro
brokerage networks and other initiatives.

Achieve Growth Through Strategic Acquisitions and Other
Opportunities. Management plans to actively pursue opportunities to acquire
other firms with complementary businesses which would strengthen or expand the
firm's geographic or product offering base. Management believes that attractive
acquisition opportunities exist particularly among smaller regional firms that
want to affiliate with a larger firm while still retaining their regional
identity and focus and entrepreneurial culture, as Tucker Anthony and Sutro have
been able to do. In addition, the Company believes that the consolidation trends
in the brokerage and asset management businesses will allow it to hire proven
investment professionals who prefer the culture and opportunities inherent in a
smaller, entrepreneurial and independent firm. Management believes that
acquisitions may also allow the Company to realize further cost benefits by
leveraging its existing infrastructure.

THE ACQUISITION

To finance the acquisition of the Company (the "Acquisition") in November
1996 from a wholly owned subsidiary of John Hancock Mutual Life Insurance
Company ("Hancock"), approximately 350 employees of the Company, including
senior management and investment executives, purchased an aggregate of
approximately 31% of the Company's equity ( % after giving effect to the
Offering), with additional equity financing provided by affiliates of the Thomas
H. Lee Company ("THL") and SCP Private Equity Partners, L.P. ("SCP"). Incentive
equity programs have been established pursuant to which employees have acquired
or may acquire up to an additional % of the equity of the Company, which,
when added to shares previously purchased, would result in employees owning up
to approximately % of the shares of Common Stock outstanding ( % after
giving effect to the Offering).

5
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dence and employee ownership have resulted in progressively higher levels of
employee motivation, confidence and commitment during 1997, as compared to 1996
when the Predecessor Company was for sale and it was uncertain whether the
Acquisition would be consummated or whether the Predecessor Company would be
sold to another organization. Management believes that the Company's performance
in 1996 and early 1997 was adversely affected by uncertainty surrounding the
future of the Company. The Company believes that the Acquisition and the
strategies instituted in connection therewith have been successful. For example,
Tucker Anthony and Sutro managed or co-managed 34 equity offerings in 1997
compared to 16 in 1996, and investment banking revenues increased 45% in 1997
over 1996. In 1997 the Company reported net income of $18.7 million, a 52%
increase over net income of $12.3 million in 1996.

THE OFFERING

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<S> <C>
Common Stock offered by the Company.................... shares
Common Stock offered by the Selling Stockholders....... shares
Common Stock to be outstanding after the Offering...... shares(1)
Dividend policy........................................ The Company intends to pay quarterly
dividends of $ per share on the
outstanding shares of Common Stock beginning
with the dividend payable in the third
quarter of 1998 with respect to the second
quarter of 1998. See "Dividend Policy."
Use of proceeds........................................ To repay existing credit facility.
See "Use of Proceeds."
Proposed NYSE symbol................................... "FSI"
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) Excludes 1,181,256 shares of Common Stock issuable upon exercise of
outstanding stock options under the Company's stock option plans at December
31, 1997, with a weighted average exercise price of $10.00, of which 153,451
shares were exercisable as of such date at a weighted average exercise price
of $10.00 and up to 48,740 shares issuable to Hancock for no additional
consideration upon such exercise. See "Management -- Stock Option and Stock
Purchase Plans" and "Certain Transactions -- Additional Shares Agreement."

- - - - - - - - - - - - - - - -------------------------------------------------------------------------------

6
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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The information set forth below should be read in conjunction with
"Selected Historical Consolidated Financial and Other Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's and Predecessor Company's Consolidated Financial Statements and
Notes thereto appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
---------------------------------------- COMBINED(1)
------------
YEARS ENDED ELEVEN MONTHS ONE MONTH
DECEMBER 31, ENDED ENDED YEAR ENDED YEAR ENDED
------------------------ NOVEMBER 29, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1994 1995 1996 1996 1996 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Total revenues............. $383.9 $327.1 $368.5 $ 347.5 $ 30.6 $378.1 $398.2
Net revenues(2)............ 364.5 296.9 332.5 321.0 28.8 349.8 375.8
Total non-interest
expenses................ 335.8 286.0 310.2 300.6 26.8 327.4 337.3(3)
Acquisition interest
expense................. -- -- -- -- 0.6 0.6 6.1
Income before income
taxes................... 28.7 10.9 22.3 20.4 1.4 21.8 32.4
Net income................. 16.7 6.4 13.1 11.6 0.7 12.3 18.7
Earnings per share,
basic and diluted(4).... -- -- -- -- $ 0.09 -- $ 2.19
Pro forma earnings
per share, basic and
diluted
(unaudited)(5).......... -- -- -- -- -- -- $
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1997
---------------------
ACTUAL AS ADJUSTED
(IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
STATEMENT OF FINANCIAL CONDITION DATA:
Total assets............................................................ $727.6
Long-term debt.......................................................... 101.4
Stockholders' equity.................................................... 102.3
Book value per common share outstanding................................. $12.65
</TABLE>

<TABLE>
<CAPTION>
PREDECESSOR COMPANY COMBINED(1)
------------------------- -----------
YEARS ENDED DECEMBER 31,
---------------------------------------------------
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA:
After-tax return on average equity(6).............. 12.6% 4.5% 8.8% 10.6% 20.6%
Compensation and benefits expense as a percentage
of net revenues.................................. 64.9 66.8 65.4 65.2 65.5
Non-compensation and benefits operating expense as
a percentage of net revenues..................... 27.3 29.5 27.8 28.4 24.3
Amortization of Acquisition intangibles (in
millions)........................................ -- -- -- $ 0.2 $ 2.5
Assets in retail brokerage accounts (at end of
period) (in billions)............................ $15.0 $17.0 $20.0 $23.0 $28.0
</TABLE>

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(1) Year ended December 31, 1996 combined financial data refer to the
consolidated results of the Predecessor Company for the eleven months ended
November 29, 1996 combined with the consolidated results of the Company for
the one month ended December 31, 1996. These periods are not directly
comparable due to the effects of the Acquisition, including related purchase
accounting adjustments and the Acquisition financing.

(2) Net revenues equals total revenues less interest expense other than the
Acquisition interest expense.

(3) Includes the effect of $1.4 million of non-cash compensation expense
resulting from issuance of Common Stock and stock options to employees.

(4) Earnings per share ("EPS") is calculated by dividing net income by the
weighted average number of outstanding shares for basic and diluted EPS,
including the effects of the issuance of Common Stock, stock options and
other exercisable shares treated in accordance with Staff Accounting
Bulletin No. 83.

(5) Pro forma earnings per share ("pro forma EPS") for the year ended December
31, 1997 is calculated in the same manner as in (4) above with the following
adjustments: (i) net income is adjusted to eliminate the after-tax effect of
interest expense on the Acquisition indebtedness to be repaid with the net
Offering proceeds and available cash, and a decrease in interest income due
to the use of available cash, as if the repayment occurred at the beginning
of the year; and (ii) the number of outstanding shares used for basic and
diluted EPS gives effect to the issuance of million shares by the
Company in the Offering. These adjustments result in pro forma net income,
excluding extraordinary item (the write-off of capitalized debt issuance
costs related to the Acquisition), of $21.8 million.

(6) After-tax return on average equity is calculated by dividing net income by
average stockholders' equity for the year.

7
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RISK FACTORS

In addition to the other information contained in this Prospectus, the
following risk factors should be considered in evaluating the Company and its
business before purchasing the shares of Common Stock offered hereby.

VOLATILE NATURE OF THE SECURITIES BROKERAGE BUSINESS

The securities brokerage business is, by its nature, subject to significant
risks, particularly in volatile or illiquid markets. Such risks include the risk
of trading losses, losses resulting from the ownership or underwriting of
securities, risks associated with principal activities, the failure of
counterparties to meet commitments, customer fraud, employee fraud, issuer
fraud, litigation and errors, misconduct and failures in connection with the
processing of securities transactions. The Company's principal business
activity, its retail broker-dealer operations, as well as its investment
banking, institutional sales, proprietary trading, investment advisory and other
services, are highly competitive and subject to various risks, including
volatile trading markets and fluctuations in the volume of market activity. The
securities business is directly affected by many factors, including economic and
political conditions, broad trends in business and finance, legislation and
regulation affecting the national and international business and financial
communities, currency values, inflation, market conditions, the availability and
cost of short-term or long-term funding and capital, the credit capacity or
perceived creditworthiness of the securities industry in the marketplace and the
level and volatility of interest rates. Any one or more of these factors may
contribute to reduced levels of trading activity, securities offerings and
merger and acquisition activities, which would result in lower revenues from the
Company's brokerage, trading, institutional sales and investment banking
activities. In addition, these and other factors can contribute to lower price
levels for securities and illiquid markets.

The stock market has recently experienced significant volatility, including
some of the largest single day point declines in history. After the stock market
declines in October 1987 and October 1989, many firms in the industry suffered
financial losses and the level of individual investor trading activity
decreased. Reduced trading volume and lower prices generally result in reduced
transaction revenues. A severe market fluctuation in the future could have a
material adverse effect on the Company's business, financial condition and
operating results. Lower price levels of securities may result in (i) reduced
volumes of securities transactions, with a consequent reduction in commission
revenues, and (ii) reduced management fees calculated as a percentage of assets
managed. Sudden sharp declines in market values of securities and the failure of
issuers and counterparties to perform their obligations can result in illiquid
markets which, in turn, may result in the Company having difficulty selling
securities, hedging its securities positions and investing funds under its
management.

In addition, to the extent the Company, through its clearing broker,
Wexford, permits customers to purchase securities on margin, the Company is
subject to risks inherent in extending credit, especially during periods of
rapidly declining markets in which collateral value could fall below the amount
of a customer's indebtedness. Any resulting losses could have a material adverse
effect on the Company's business, financial condition and operating results.

SIGNIFICANT COMPETITION

All aspects of the Company's business and of the securities business in
general are highly competitive. The principal competitive factors influencing
the Company's business are its professional staff, its reputation in the
marketplace, its existing client relationships, its ability to commit capital to
client transactions and its mix of market capabilities. The Company's ability to
compete effectively in its securities brokerage and investment banking
activities will also be influenced by the adequacy of its capital levels and by
its ability to raise additional capital.

The Company competes directly with national and regional full service
broker-dealers and, to a lesser extent, with discount brokers, dealers,
investment banking firms, investment advisors and certain commercial banks. In
addition, the Company competes indirectly for investment assets with insurance
companies and others. In addition to competition from firms currently in the
securities business, domestic commercial banks

8
<PAGE> 10

and investment banking boutiques have recently entered the business. In recent
years, large international banks have entered the markets served by United
States investment banks, including the markets in which the Company competes.
The Company expects competition from domestic and international banks to
increase as a result of recent and anticipated legislative and regulatory
initiatives in the United States to remove or relieve certain restrictions on
commercial banks relating to the sale of securities. The financial services
industry has become considerably more concentrated as numerous securities firms
have either ceased operations or have been acquired by or merged into other
firms. Such mergers and acquisitions have increased competition from these
firms, many of which have significantly greater equity capital and financial and
other resources than the Company.

The Company also faces competition from a rapidly developing industry
comprised of companies offering discount and/or electronic brokerage services.
These competitors may have lower costs and may offer their customers more
attractive pricing or other terms than those offered by the Company. The Company
also anticipates competition from underwriters who attempt to effect public
offerings for emerging and middle-market companies through new means of
distribution, including transactions effected using electronic media such as the
Internet. In addition, issuers may attempt to sell their securities directly to
purchasers, including through sales using electronic media such as the Internet.
To the extent that issuers and purchasers of securities are able to transact
business without the assistance of financial intermediaries such as the Company,
the Company's operating results could be adversely affected.

DEPENDENCE ON PERSONNEL

The Company's business is dependent on the highly skilled and often highly
specialized individuals it employs. Retention of senior management and retail
investment executives, research, investment banking, public finance,
institutional sales and trading, money management and administrative
professionals is particularly important to the Company's prospects. The Company
generally does not have written employment agreements with its investment
professionals.

The departure of an investment executive typically results in such
executive taking his or her clients with him or her. The departure of investment
executives could adversely impact the Company's operating results.

The Company's strategy with respect to investment banking is to establish
relationships with the Company's prospective corporate clients in advance of any
transaction and to maintain such relationships over the long term by providing
advisory services to corporate clients in public or private offerings of equity
or debt securities and merger and acquisition transactions. Similarly, the
Company's strategy with respect to state and local government clients is to
establish long-term relationships by providing advisory services to governmental
entities as well as underwriting services. Research professionals contribute
significantly to the Company's ability to secure a role in managing public
offerings and in providing other investment banking services. From time to time,
the Company has experienced losses of equity research, investment banking,
public finance, and institutional sales and trading professionals. The loss of a
significant number of such professionals could materially adversely affect the
Company's operating results.

The intense competition for skilled professionals has led to escalating
compensation packages in the industry for such individuals. Upfront payments,
increased payouts and guaranteed contracts make hiring of employees more
difficult and can be a major factor in an employee leaving the Company. There
can be no assurance that losses of key personnel due to such competition or
otherwise will not occur in the future.

The Company's business, financial condition and operating results depend,
to a significant extent, on the ability of the management of the Company and its
subsidiaries to implement the Company's strategy outlined in this Prospectus.
See "Business -- Business Strategy." There is no guarantee, however, that
management will be able to successfully implement such strategy or that such
strategy will be effective, and the inability of management to succeed in its
efforts may have an adverse effect on the Company's business, financial
condition and operating results.

9
<PAGE> 11

RISKS OF LOSSES DUE TO REGIONAL CONCENTRATION OF THE COMPANY'S FOCUS

Because of the Company's focus on investors and equity capital market
clients based in the northeastern and western United States, a significant
economic downturn in either of those regions could adversely affect the
Company's revenues. Approximately 59% of the Company's 1997 operating revenue
(and a significantly greater percentage of the Company's operating income) was
generated from Tucker Anthony clients, primarily located in the northeastern
United States and approximately 35% was generated from Sutro clients, primarily
located in the western United States. As a result, an economic downturn in one
of these regions could adversely affect the companies in these regions, which in
turn could reduce the Company's underwriting and brokerage business relating to
those companies. In addition, a regional economic downturn in one of these
regions could have an adverse effect on the Company's retail clients in that
region or emerging and middle-market companies in that region. Any adverse
effect on emerging and middle-market companies or growth industries concentrated
in the northeastern or western United States or, to a lesser extent, in other
regions in which emerging or middle-market technology, healthcare, financial
service or consumer product companies are also concentrated could also reduce
the Company's business relating to those companies.

DEPENDENCE ON OUTSIDE SOURCES OF FINANCING

The principal sources of the Company's cash and liquidity are financing
activities, commissions, collateralized repurchase agreements and collateralized
loans. The Company currently has an uncommitted financing arrangement with
Wexford through which the Company finances its customer accounts and firm
trading positions. Such financing of customer accounts is not reflected in the
Company's Statements of Financial Condition, although the Company retains risk
with respect thereto. The availability of financing to the Company may vary
depending on market conditions, the volume of certain trading activities, credit
ratings, credit capacity and the overall availability of credit to the financial
services industry. There can be no assurance that the Company will be able to
access the necessary lines of credit or that financing adequate to support the
Company's business will be available in the future.

DEPENDENCE ON CERTAIN RELATIONSHIPS AND TECHNOLOGY

The Company has entered into an arrangement with Wexford pursuant to which
Wexford acts as the Company's clearing broker. The Company's communications and
information systems are coordinated with the clearing information systems of
Wexford. Additionally, Wexford furnishes the Company with information necessary
to run the Company's business, including commission runs, transaction summaries,
data feeds for various reports including compliance and risk management,
execution reports, trade confirmations, monthly account statements, cashiering
functions and the handling of margin accounts. Accordingly, the Company is
currently dependent upon Wexford's clearing capabilities and systems. The
Company and Wexford are parties to an agreement setting forth the terms and
conditions of their relationship. The initial term of the Agreement expires
April 3, 2001 and renews annually thereafter (unless either party gives notice
of its intent not to renew), subject to earlier termination by Wexford in the
event the Company fails to meet certain financial tests. The per trade charge
under the Wexford Agreement is subject to adjustment based on a consumer price
index commencing in April 1999. The Agreement provides that either Wexford or
the Company have the right to renegotiate the financial terms and services of
the contract to apply after the end of the initial term. Any interruption of
service by or at Wexford, or the inability of the Company to extend the Wexford
arrangement on acceptable terms or find an acceptable alternative for the
Company's financing or clearing arrangements could have a material adverse
effect on the Company's business, financial condition and operating results.

The Company's business is highly dependent on communications and
information systems. Any failure or interruption of the Company's or its
subsidiaries' systems, or of the systems of Wexford, could cause delays in the
Company's securities trading activities which could have a material adverse
effect on the Company's operating results. Such failures and interruptions may
result from the inability of certain computing systems (including those of the
Company, Wexford and other third party vendors) to recognize the year 2000.
There can be no assurance that the year 2000 issue can be resolved prior to the
upcoming change in the century. In addition, the Company may incur substantial
costs in addressing the year 2000 issue. In addition, there can be no assurance
that the Company, its subsidiaries or Wexford will not suffer any systems
failure or interruption,

10
<PAGE> 12

whether caused by earthquake, fire, other natural disaster, power or
telecommunications failure, act of God, act of war or otherwise, or that the
Company's or its subsidiaries' or Wexford's back-up procedures and capabilities
in the event of any such failure or interruption will be adequate. Furthermore,
any deterioration in Wexford's or its parent's financial condition could
materially adversely affect the Company.

RISK OF POTENTIAL LITIGATION IN THE SECURITIES BROKERAGE BUSINESS

Many aspects of the securities brokerage business involve substantial risks
of liability. From time to time the Company or its subsidiaries may be named as
defendants in civil litigation arising from their business activities as retail
broker-dealers. The plaintiffs in such litigation may allege misconduct on the
part of the Company's investment executives, claiming, for example, that
investments sold to such plaintiffs by the Company's investment executives were
unsuitable for their portfolios, or that such investment executives engaged in
excessive trading with respect to such plaintiffs' accounts. Factors affecting
the likelihood of such litigation include the conduct of individual investment
executives and the performance of the investment vehicles sold by the Company's
investment executives. Such factors have resulted in the Company making payments
to plaintiffs in the past, and there can be no assurance that substantial
payments in connection with the resolution of such litigation will not occur in
the future.

In recent years, there has been an increasing incidence of litigation
involving the securities brokerage industry, including class action lawsuits
that generally seek substantial damages and other suits seeking punitive
damages. Companies engaged in the underwriting of securities are subject to
substantial potential liability under federal and state securities laws,
including liability for material misstatements or omissions in prospectuses and
other communications with respect to underwritten offerings of securities such
as statements made by securities analysts. See "-- Regulated Industry and
Potential Regulatory Change." Like other securities brokerage firms, the Company
and its subsidiaries have been named as defendants in class action and other
lawsuits and have in the past been subject to substantial settlements and
judgments. The risk of liability may be higher for an underwriter which, like
the Company, is active in the underwriting of securities offerings for emerging
and middle-market companies due to the higher degree of risk and volatility
associated with the securities of such companies. The defense of such lawsuits
or arbitrations may divert the efforts and attention of the Company's management
and staff, and the Company may incur significant legal expense in defending such
litigation or arbitration. This may be the case even with respect to frivolous
claims or litigation. The amount of time that management and other employees may
be required to devote in connection with the defense of litigation could be
substantial and might divert their attention from other responsibilities within
the Company.

In the normal course of business, the Company and its subsidiaries are also
defendants in various civil actions and arbitrations arising out of their
activities as employers and as a result of other business activities. The
Company and its subsidiaries have in the past made substantial payments in
connection with the resolution of disputed claims, and there can be no assurance
that substantial payments in connection with the resolution of disputed claims
will not occur in the future.

As is common in the securities industry, the Company does not carry
insurance that would cover payments made in connection with certain types of
lawsuits. In addition, the Company's and its subsidiaries' charter documents
require indemnification of the Company's and such subsidiaries' officers,
directors and agents to the maximum extent permitted by law.

RISK OF LOSSES DUE TO FRAUD OR MISTAKES OF CUSTOMERS OR EMPLOYEES

The Company is exposed to the risk of significant losses as a result of
customer fraud, employee errors, misconduct and fraud (including unauthorized
transactions by traders) and failures in connection with the processing of
securities transactions. There can be no assurance that the Company's risk
management procedures and internal controls will prevent such losses from
occurring.

The Company has determined that a former employee improperly valued
securities positions of the Company over the first eleven months of 1997 in
order to conceal trading losses for which such former employee was responsible.
The Company determined in the fourth quarter of 1997 that approximately $2.6

11
<PAGE> 13

million of trading losses arose from the actions of the former employee. The
loss has been included in the Company's financial results as follows: $228,000
in the first quarter, $1,071,000 in the second quarter, $431,000 in the third
quarter and $901,000 in the fourth quarter. The Company has notified the
Securities and Exchange Commission (the "Commission") and the NYSE of this
situation and is conducting an internal review of the specific trading loss and
the Company's reports and procedures relating thereto. The Commission and the
NYSE are currently investigating this situation. The Company does not expect
that the results of these investigations will have a material adverse effect on
the Company's business, financial condition or operating results.

RISKS ASSOCIATED WITH MARKET MAKING, PRINCIPAL TRADING, ARBITRAGE AND
UNDERWRITING ACTIVITIES

The Company's market making, principal trading, arbitrage and underwriting
activities often involve the purchase, sale or short sale of securities as
principal. Such activities subject the Company's capital to significant risks
from markets that may be characterized by relative illiquidity or that may be
particularly susceptible to rapid fluctuations in liquidity. Such market
conditions could limit the Company's ability to resell securities purchased or
to repurchase securities sold short. Such activities subject the Company's
capital to significant risks, including market, credit, counterparty and
liquidity risks.

As a result of its underwriting and arbitrage activities, from time to time
the Company has large position concentrations in securities of, or commitments
to, a single issuer or issuers engaged in a specific industry. In addition, the
trend in all major capital markets, for competitive and other reasons, toward
larger commitments on the part of lead underwriters means that, from time to
time, an underwriter (including a co-manager) may retain significant position
concentrations in individual securities. Such concentrations increase the
Company's exposure to specific credit and market risks.

CONSTRAINTS IMPOSED BY NET CAPITAL REQUIREMENTS

The Commission, the NYSE, and various other securities exchanges and other
regulatory bodies in the United States have rules with respect to net capital
requirements which affect each broker-dealer subsidiary of the Company. These
rules are designed to ensure that broker-dealers maintain adequate regulatory
capital in relation to their liabilities and the size of their customer
business. These rules (the "Net Capital Rules") have the effect of requiring
that a substantial portion of a broker-dealer's assets be kept in cash or highly
liquid investments. Failure to maintain the required net capital may subject a
firm to suspension or revocation of its registration by the Commission and
suspension or expulsion by the National Association of Securities Dealers (the
"NASD") and other regulatory bodies, and ultimately may require its liquidation.
Compliance by the Company's broker-dealer subsidiaries with such Net Capital
Rules could limit certain operations that require intensive use of capital, such
as underwriting or trading activities. These rules could also restrict the
ability of the Company to withdraw capital, even in circumstances where the
Company's broker-dealer subsidiaries have more than the minimum amount of
required capital, which, in turn, could limit the ability of the Company to pay
dividends, implement its strategies, pay interest on and repay the principal of
its debt and redeem or repurchase shares of outstanding capital stock. In
addition, a change in such Net Capital Rules or the imposition of new rules
affecting the scope, coverage, calculation or amount of such net capital
requirements, or a significant operating loss or any large charge against net
capital, could have similar adverse effects.

CONTROL OF THE COMPANY

Upon the completion of this offering, THL is expected to own approximately
%, SCP is expected to own approximately % , the current employees of
the Company and its subsidiaries are expected to own approximately % and
Hancock will own approximately % of the outstanding Common Stock of the
Company. This concentration of ownership and voting power may have the effect of
accelerating, delaying or preventing a change in control of the Company or
otherwise affect the ability of any stockholder to influence the policies of the
Company. See "Certain Transactions -- Stockholders Agreement."

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<PAGE> 14

CONSTRAINTS IMPOSED BY BANK DEBT

The terms and conditions of a senior reducing revolving credit facility to
which the Company is a party (the "Credit Facility") imposes limitations that
affect, among other things, the ability of the Company to incur debt, make
acquisitions, sell assets or merge, grant or incur liens, make investments or
loans, make capital expenditures, engage in transactions with affiliates and
change its line of business. In addition, the terms of the Credit Facility limit
the Company's ability to redeem or otherwise repurchase shares of its capital
stock and limit the Company and its subsidiaries from paying cash dividends on
its capital stock. The terms of the Credit Facility also require the Company and
certain of its subsidiaries to maintain specified financial ratios and satisfy
certain tests, including, among others, a minimum interest coverage ratio, a
minimum debt service coverage ratio and a maximum leverage ratio. The ability of
the Company to comply with the foregoing financial ratios and tests may be
affected by events beyond the control of the Company, and there can be no
assurance that the Company will achieve operating results that comply with such
provisions. A breach of any of the foregoing covenants would result in a default
under the Credit Facility. In the event of any such default, the lenders could
elect to declare all amounts borrowed under the Credit Facility, together with
accrued interest thereon, to be immediately due and payable. If the Company were
unable to repay such amounts, the lenders could proceed against the collateral
granted to them to repay the indebtedness and other obligations due and payable
under the Credit Facility. If the Credit Facility were to be accelerated, there
can be no assurance that the assets of the Company would be sufficient to repay
in full such indebtedness and the other indebtedness of the Company. The stock
of the Company's subsidiaries currently is pledged as security under the terms
of the Credit Facility. The Company expects to amend or replace the Credit
Facility upon consummation of the Offering so that such limitations would not
apply after the Offering.

REGULATED INDUSTRY AND POTENTIAL REGULATORY CHANGE

Each subsidiary of the Company which is registered as a broker-dealer
and/or investment advisor is, and the securities industry in general is, subject
to extensive regulation in the United States at both the federal and state
level. Broker-dealers are subject to regulations covering all aspects of the
securities business, including sales methods, trade practices among
broker-dealers, use and safekeeping of customers' funds and securities, capital
structure, record keeping and the conduct of directors, officers and employees.

As registered investment advisors under the Investment Advisors Act of 1940
(the "Advisors Act"), Tucker Anthony, Sutro and Freedom Capital are subject to
regulations which cover various aspects of the Company's business, including
compensation arrangements. Under the Advisors Act, every investment advisory
agreement with the Company's clients must expressly provide that such contract
may not be assigned by the investment advisor without the consent of the client.
Under the Investment Company Act of 1940 (the "Investment Company Act"), every
investment advisor's agreement with a registered investment company must provide
for the agreement's automatic termination in the event it is assigned. Under
both the Advisors Act and the Investment Company Act, an investment advisory
agreement is deemed to have been assigned when there is a direct or indirect
transfer of the Agreement, including a direct assignment or a transfer of a
"controlling block" of the advisor's voting securities or, under certain
circumstances, upon the transfer of a "controlling block" of the voting
securities of its parent corporation. A transaction is not, however, an
assignment under the Advisors Act or the Investment Company Act if it does not
result in a change of actual control or management of the investment advisor.
Any assignment of the Company's investment advisory agreements would require, as
to any registered investment company client, the prior approval of a majority of
its shareholders, and as to the Company's other clients, the prior consent of
such clients to such assignments. Following completion of the Offering, sales by
THL and/or SCP or issuances of Common Stock by the Company, among other things,
could result in a deemed assignment of the Company's investment advisory
agreements under such statutes.

As a matter of public policy, regulatory bodies are charged with
safeguarding the integrity of the securities and other financial markets and
with protecting the interests of customers participating in those markets, not
with protecting the interests of the Company's stockholders. In addition,
self-regulatory organizations ("SROs") and other regulatory bodies in the United
States, such as the Commission, the NYSE, the NASD, the Commodities Futures
Trading Commission (the "CFTC"), the National Futures

13
<PAGE> 15

Association (the "NFA") and the Municipal Securities Rulemaking Board (the
"MSRB"), require strict compliance with their rules and regulations. Failure to
comply with any of these laws, rules or regulations, the application of which
under certain circumstances may be unclear, could result in a variety of adverse
consequences including censure, civil penalties (including treble damages in the
case of insider trading violations), fines, the issuance of cease-and-desist
orders, the deregistration or suspension of a broker-dealer, investment adviser
or futures commission merchant, the statutory disqualification of officers or
employees or other adverse consequences which could have a material adverse
effect on the Company. Even if none of such actions is taken, such
administrative or judicial proceedings or arbitrations could have a material
adverse effect on the Company's perceived creditworthiness, reputation and
competitiveness. Customers of the Company's subsidiaries or others who allege
that they have been damaged by a violation of applicable regulations also may
seek to obtain compensation from such subsidiary, including the unwinding of any
transactions with such subsidiary. Additional legislation or regulations, or
changes in the methods or enforcement of existing regulations by governmental
entities or SROs may materially and adversely affect the Company's business,
financial condition or operating results.

The Company's businesses may be materially affected not only by regulations
applicable to its subsidiaries as financial market intermediaries, but also by
regulations of general application. For example, the volume of the Company's
underwriting, merger and acquisition and principal investment business in a
given time period could be affected by, among other things, existing and
proposed tax legislation, antitrust policy and other governmental regulations
and policies (including the interest rate policies of the Federal Reserve Board)
and changes in interpretation or enforcement of existing laws and rules that
affect the business and financial communities. From time to time, various forms
of antitakeover legislation and legislation that could affect the benefits
associated with financing leveraged transactions with high-yield securities have
been proposed that, if enacted, could adversely affect the volume of merger and
acquisition business, which in turn could adversely affect the Company's
underwriting, advisory and trading revenues related thereto. The level of
business and financing activity in each of the industries on which the Company
and its subsidiaries focus can be affected not only by such legislation or
regulations of general applicability, but also by industry-specific legislation
or regulations.

The Company's subsidiaries' ability to comply with applicable laws and
rules is dependent in large part upon the establishment and maintenance of a
compliance system designed to monitor compliance with such laws and rules, as
well as the Company's ability to attract and retain qualified compliance
personnel. The Company and its subsidiaries could in the future be subject to
disciplinary or other actions due to claimed noncompliance which could have a
material adverse effect on the Company's business, financial condition and
operating results.

LIMITED OPERATING HISTORY AS STAND-ALONE COMPANY

The Company is a holding company formed in November 1996 to effect the
Acquisition. It conducts its business solely through its subsidiaries. Prior to
the Acquisition, Tucker Anthony, Sutro and the Company's other subsidiaries were
indirect wholly owned subsidiaries of Hancock. Consequently, the Company has a
limited history as a stand-alone operating company. In the past, Hancock or its
affiliates provided certain services to the Company, particularly short term
financing and various employee benefit and insurance services, and also limited
legal and other support services. The Company and its subsidiaries no longer
obtain such services from Hancock or its affiliates. See "Certain
Transactions -- Relationship Between the Company and Hancock."

ABSENCE OF PRIOR MARKET FOR COMMON STOCK

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price of the Common Stock has been determined
through negotiations among the Company and the Underwriters and may not be
indicative of the market price for the Common Stock after the Offering. The
Company believes that certain factors, such as sales of Common Stock into the
market by THL, Hancock, SCP or Company employees, fluctuations in operating
results of the Company or its competitors and market conditions generally for
similar stocks, could cause the market price of the Common Stock to fluctuate

14
<PAGE> 16

substantially. Such market volatility may adversely affect the market price of
the Common Stock. Although the Company intends to apply for listing of the
Common Stock on the NYSE, there can be no assurance that an active public market
will develop or, if developed, will be sustained following the Offering. See
"Underwriting."

POTENTIAL ADVERSE MARKET EFFECT OF FUTURE SALES OF COMMON STOCK

Sales of a substantial number of shares of Common Stock in the public
market, whether by purchasers in the Offering or by THL, Hancock, SCP or
employees of the Company, could adversely affect the prevailing market price of
the Common Stock and could impair the Company's future ability to raise capital
through an offering of its equity securities. There will be shares of
Common Stock outstanding immediately after completion of the Offering, of which
the shares offered hereby will be freely tradeable. All other shares
will be owned by THL, Hancock, SCP or Company employees and will be "restricted
securities" for purposes of the Securities Act of 1933, as amended (the
"Securities Act"), and, subject to the volume and other limitations set forth in
Rule 144 promulgated under the Securities Act, will be eligible for sale upon
expiration of 180 day lock-up agreements with the Underwriters, unless released
earlier by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"). The
Company, THL, Hancock, SCP and certain employees of the Company are parties to
an agreement which provides THL, Hancock, SCP and such employees with certain
registration rights. See "Certain Transactions," "Shares Eligible for Future
Sale" and "Underwriting."

IMMEDIATE DILUTION TO PURCHASERS IN THE OFFERING

Purchasers of Common Stock in the Offering will experience immediate
dilution in the net tangible book value of $ per share based on assumed
initial public offering price of $ per share (the mid-point of the
range on the cover page of this Prospectus). See "Dilution."

RESTRICTION ON PAYMENT OF DIVIDENDS

The Predecessor Company paid dividends on its Common Stock each year from
1991 to 1995. No dividends were paid by the Company in 1996 or 1997. Following
consummation of the Offering, the Company's Board of Directors intends to pay a
quarterly dividend of $ per share on the outstanding shares of Common
Stock beginning with the dividend payable in the third quarter of 1998 with
respect to the second quarter of 1998. The timing and amount of future dividends
will be determined by the Board and will depend, among other factors, upon the
Company's earnings, financial condition and cash requirements at the time such
payment is considered. Furthermore, the net capital rules of the various
regulatory bodies and covenants in instruments governing outstanding
indebtedness of the Company impose limitations on the payment of dividends by
the Company. See "Dividend Policy."

CERTAIN CERTIFICATE OF INCORPORATION, BYLAW AND STATUTORY ANTI-TAKEOVER
PROVISIONS AFFECTING STOCKHOLDERS

The Company's Certificate of Incorporation and Bylaws and certain statutes
affecting the Company contain provisions that might diminish the likelihood that
a potential acquiror would make an offer for the Common Stock, or impede a
transaction favorable to the interests of the stockholders, or increase the
difficulty of removing the incumbent Board of Directors and management. These
provisions with respect to the Company's Certificate of Incorporation and Bylaws
include (i) the authority of the Board of Directors to issue a series of
preferred stock with such voting rights and other powers as the Board of
Directors may determine; (ii) the inability of stockholders to take any action
without a meeting or to call a special meeting of stockholders; and (iii)
certain advance notice procedures for nominating candidates for election as
directors and for submitting proposals for consideration at stockholders'
meetings. See "Description of Capital Stock -- Certain Certificate of
Incorporation, Bylaw and Statutory Anti-Takeover Provisions Affecting
Stockholders."

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<PAGE> 17

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares
of Common Stock offered by the Company hereby are estimated to be $ ,
assuming an initial public offering price of $ per share (the mid-point
of the range on the cover page of this Prospectus) and after deducting
underwriting discount and commissions and estimated offering expenses. The
Company intends to use the Offering proceeds to repay existing indebtedness
under the Credit Facility, which was incurred in connection with the
Acquisition. Such indebtedness accrues interest at variable rates (which
averaged 7.1% per annum during 1997) and matures on December 31, 2001. The
Company will not receive any proceeds from the sale of shares of Common Stock by
the Selling Stockholders. See "Principal and Selling Stockholders."

DIVIDEND POLICY

The Predecessor Company paid dividends on its Common Stock each year from
1991 to 1995. No dividends were paid by the Company in 1996 or 1997. Following
consummation of the Offering, the Company's Board of Directors intends to pay a
quarterly dividend of $ per share on the outstanding shares of Common
Stock beginning in the third quarter of 1998 with respect to the second quarter
of 1998. The timing and amount of future dividends will be determined by the
Board and will depend, among other factors, upon the Company's earnings,
financial condition and cash requirements at the time such payment is
considered. Furthermore, the net capital rules of the various regulatory bodies
and covenants in instruments governing outstanding indebtedness of the Company
impose limitations on the payment of dividends by the Company. Under the most
restrictive of such covenants and limitations, the Company has substantial
excess capacity to make anticipated dividend payments. See "Risk
Factors -- Restriction on Payment of Dividends," "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

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<PAGE> 18

CAPITALIZATION

The following table sets forth the long term debt and total capitalization
of the Company as of December 31, 1997 on an actual basis and as adjusted to
give effect to the sale of the shares of Common Stock offered by
the Company hereby at an assumed initial public offering price of $ per
share (the mid-point of the range on the cover page of this Prospectus), after
deducting the underwriting discount and commissions and estimated offering
expenses and the application of the estimated net proceeds therefrom as
described in "Use of Proceeds."

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
------------------------
(IN THOUSANDS)
ACTUAL AS ADJUSTED
<S> <C> <C>
Long-term debt:
Credit Facility (1)................................................. $ 80,000
Fixed asset financing............................................... 21,446
--------
Total long-term borrowings.................................. 101,446
Stockholders' equity:
Common Stock, $.01 par value; 12,000,000 shares authorized,
8,163,161 actual shares issued; shares authorized, as
adjusted; shares issued, as adjusted................... 82
Additional paid-in capital.......................................... 83,719
Retained earnings................................................... 19,438
Subscribed stock (75,100 shares).................................... (913)
--------
Total stockholders' equity.................................. 102,326
--------
Total capitalization............................ $203,772
========
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) The Company expects that, upon consummation of the Offering, $80 million
will be outstanding under the Credit Facility, all of which is expected to
be repaid in full with the Company's net proceeds from the Offering and
available cash. See "Use of Proceeds."

17
<PAGE> 19

DILUTION

The net tangible book value of the Common Stock of the Company at December
31, 1997 was $75.1 million or $9.28 per share. After giving effect to the sale
of the shares of Common Stock by the Company pursuant to the Offering at an
assumed initial public offering price of $ per share (assuming that the
Underwriters' over-allotment option is not exercised, and after deducting
underwriting discounts and commissions and estimated expenses of the Offering),
the Company's adjusted pro forma net tangible book value at December 31, 1997,
would have been $ or $ per share.

Net tangible book value per share before the Offering has been determined
by dividing the net tangible book value of the Company (total tangible assets
less total liabilities) by the number of shares of Common Stock outstanding at
December 31, 1997. The Offering will result in an increase in net tangible book
value per share of $ to existing stockholders and a dilution of
$ per share to new investors who purchase shares of Common Stock in the
Offering. Dilution is determined by subtracting pro forma net tangible book
value per share of Common Stock from the assumed initial public offering price
of $ per share. The following table illustrates this dilution per share
of Common Stock.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share...................... $
-----
Net tangible book value per share at December 31, 1997............... $9.28
Increase attributable to sale of shares of Common Stock in the
Offering...........................................................
-----
Pro forma net tangible book value per share of Common Stock after the
Offering........................................................... .
-----
Dilution to persons who purchase shares of Common Stock in the
Offering........................................................... $ .
=====
</TABLE>

If the Underwriters' over-allotment option were exercised in full, the pro
forma net tangible book value per share of Common Stock after giving effect to
the Offering would be $ per share, the increase in net tangible book
value per share to existing stockholders would be $ per share and the
dilution to persons who purchase shares of Common Stock in the Offering would be
$ per share.

The following table summarizes (i) the number of shares of Common Stock to
be purchased from the Company pursuant to the Offering (assuming that the
Underwriters' over-allotment option is not exercised); (ii) the number of shares
of Common Stock held by existing stockholders after the Offering; and (iii) the
cash consideration paid therefor:

<TABLE>
<CAPTION>
TOTAL CASH CONSIDERATION
-------------------------------------
SHARES AVERAGE
--------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
<S> <C> <C> <C> <C> <C>
Common Stock purchased in the
Offering............................. % $ % $
Common Stock owned by existing
stockholders......................... 8,088,061 77,509,264 9.58(1)
--------- ------ ------------ ------ -----
Total.................................. % $ % $
========= ====== ============ ====== =====
</TABLE>

- - - - - - - - - - - - - - - ---------------
(1) Includes 394,654 shares issued to Hancock in connection with the Acquisition
for which no cash consideration was paid.

The foregoing tables assume no exercise of the Underwriters' over-allotment
option or stock options outstanding at December 31, 1997. At December 31, 1997,
there were 1,181,256 shares of Common Stock issuable upon exercise of
outstanding stock options at a weighted average exercise price of $10.00 per
share and up to 48,740 shares issuable to Hancock for no additional
consideration upon such exercise. To the extent that outstanding options are
exercised in the future, there will be further dilution to new investors. See
"Management -- Stock Option and Stock Purchase Plans," "Certain Transactions --
Additional Share Agreement" and Note 15 of the Notes to Consolidated Financial
Statements for the year ended December 31, 1997.

18
<PAGE> 20

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

The selected consolidated financial data set forth below as of December 31,
1996 and 1997 and for the one month period ended December 31, 1996 and year
ended December 31, 1997 are derived from the consolidated financial statements
of the Company included elsewhere in the Prospectus which have been audited by
Ernst & Young LLP, independent accountants. The selected consolidated financial
data set forth below for the year ended December 31, 1995 and for the eleven
months ended November 29, 1996 are derived from the consolidated financial
statements of the Predecessor Company included elsewhere in this Prospectus
which have been audited by Ernst & Young LLP, independent accountants. The
selected consolidated financial data as of December 31, 1993, 1994 and 1995 and
for the years ended December 31, 1993 and 1994 are derived from financial
statements of the Predecessor Company, also audited by Ernst & Young LLP, not
included in this Prospectus. The historical results are not necessarily
indicative of the results of operations to be expected in the future. The
following financial data are qualified in their entirety by, and should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
------------------------------------------ COMBINED(1)
ELEVEN ONE MONTH ------------
YEARS ENDED DECEMBER 31, MONTHS ENDED ENDED YEAR ENDED YEAR ENDED
-------------------------- NOVEMBER 29, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1994 1995 1996 1996 1996 1997
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues:
Commissions........................ $131.1 $122.9 $140.2 $139.0 $12.5 $151.5 $167.2
Principal transactions............. 125.3 85.3 105.8 95.5 8.4 103.9 99.3
Investment banking................. 63.0 40.1 34.8 34.0 4.1 38.1 55.2
Asset management................... 12.6 13.0 14.9 17.3 1.7 19.0 19.9
Other.............................. 12.9 13.7 12.7 15.2 0.6 15.8 12.5
------ ------ ------ ------- ------ ------ ------
Total operating revenue....... 344.9 275.0 308.4 301.0 27.3 328.3 354.1
Interest income.................... 39.0 52.1 60.1 46.5 3.3 49.8 44.1
------ ------ ------ ------- ------ ------ ------
Total revenues................ 383.9 327.1 368.5 347.5 30.6 378.1 398.2
Interest expense................... 19.4 30.2 36.0 26.5 1.8 28.3 22.4
------ ------ ------ ------- ------ ------ ------
Net revenues(2)............... 364.5 296.9 332.5 321.0 28.8 349.8 375.8
Non-interest expenses:
Compensation and benefits.......... 236.4 198.3 217.6 209.2 18.9 228.1 245.9(3)
Occupancy and equipment............ 26.0 25.8 26.1 31.0 2.2 33.2 24.3
Communications..................... 15.8 16.4 18.1 16.6 1.3 17.9 17.0
Brokerage and clearance............ 7.9 7.5 7.3 10.5 1.0 11.5 11.3
Promotional........................ 9.2 7.9 9.5 9.1 0.8 9.9 10.3
Other.............................. 40.5 30.1 31.6 24.2 2.6 26.8 28.5
------ ------ ------ ------- ------ ------ ------
Total non-interest expenses... 335.8 286.0 310.2 300.6 26.8 327.4 337.3
------ ------ ------ ------- ------ ------ ------
Acquisition interest expense......... -- -- -- -- 0.6 0.6 6.1
------ ------ ------ ------- ------ ------ ------
Income before income taxes........... 28.7 10.9 22.3 20.4 1.4 21.8 32.4
Income taxes......................... 12.0 4.5 9.2 8.8 0.7 9.5 13.7
------ ------ ------ ------- ------ ------ ------
Net income........................... $ 16.7 $ 6.4 $ 13.1 $ 11.6 $ 0.7 $ 12.3 $ 18.7
====== ====== ====== ======= ====== ====== ======
Earnings per share, basic and
diluted(4)......................... -- -- -- -- $ 0.09 -- $2.19
====== ======
Pro forma earnings per share, basic
and diluted (unaudited)(5)......... -- -- -- -- --
======
STATEMENT OF FINANCIAL CONDITION DATA
(AT END OF PERIOD):
Total assets......................... $1,159.8 $1,037.9 $1,214.0 $517.0(6) $727.6
Long-term debt....................... -- -- -- 110.8(7) 101.4
Stockholders' equity................. 140.0 145.4 152.7 79.5(7) 102.3
Book value per share of Common Stock
outstanding........................ -- -- -- $10.09 $12.65
</TABLE>

19
<PAGE> 21

- - - - - - - - - - - - - - - ------------------------------

(2) Net revenues equals total revenues less interest expense other than the
Acquisition interest expense.

(3) Includes the effect of $1.4 million of non-cash compensation expense
resulting from issuance of Common Stock and stock options to employees.

(4) Earnings per share ("EPS") is calculated by dividing net income by the
weighted average number of outstanding shares for basic and diluted EPS
including the effects of the issuance of Common Stock, stock options and
other exercisable shares treated in accordance with Staff Accounting
Bulletin No. 83.

(5) Pro forma earnings per share ("pro forma EPS") for the year ended December
31, 1997 is calculated in the same manner as in (4) above with the following
adjustments: (i) net income is adjusted to eliminate the after-tax effect of
interest expense on the Acquisition indebtedness to be repaid with the net
offering proceeds and available cash, and a decrease in interest income due
to the use of available cash, as if the repayment occurred at the beginning
of the year; and (ii) the number of outstanding shares used for basic and
diluted EPS to give effect to the Offering. These adjustments result in pro
forma net income, excluding extraordinary item (the write-off of capitalized
debt issuance costs related to the Acquisition costs) of $21.8 million.

(6) The decline in total assets from December 31, 1995 to December 31, 1996 is
primarily attributable to the initiation of the Wexford clearing arrangement
pursuant to which certain customer and broker-dealer balances are no longer
included on the Company's Statement of Financial Condition.

(7) The decrease in stockholders' equity and increase in long-term debt from
December 31, 1995 to December 31, 1996 was primarily a result of the
Acquisition.

(8) After-tax return on average equity is calculated by dividing net income by
average stockholders' equity for the year.

20
<PAGE> 22

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

The following discussion should be read in conjunction with "Selected
Historical Consolidated Financial and Other Data" and the Company's Consolidated
Financial Statements and Notes thereto, each appearing elsewhere in this
Prospectus. In addition to historical information, the following Management's
Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ significantly from those anticipated in
these forward-looking statements as a result of certain factors, including those
discussed in "Risk Factors" contained elsewhere in this Prospectus.

BUSINESS ENVIRONMENT

The Company's retail securities brokerage activities, as well as its
investment banking, investment advisory, institutional sales and trading and
equity research services, are highly competitive and subject to various risks
including volatile trading markets and fluctuations in the volume of market
activity. These markets are affected by general economic and market conditions,
including fluctuations in interest rates, volume and price levels of securities
and flows of investor funds into and out of mutual funds and pension plans and
by factors that apply to particular industries such as technological advances
and changes in the regulatory environment. Declining interest rates and an
improving economic environment contributed to a significant increase in activity
in the equity markets in the United States during the latter part of 1995, which
continued throughout 1996 and 1997. The Company's financial results have been
and may continue to be subject to fluctuations due to these and other factors.
Consequently, the results of operations for a particular period may not be
indicative of results to be expected for other periods.

THE ACQUISITION

The Acquisition of the Company occurred in November 1996. Discussions
herein with respect to 1996 refer to the consolidated results of the Predecessor
Company for the eleven months ended November 29, 1996 combined with the
consolidated results of the Company for the one month period ended December 31,
1996. As a result of purchase accounting in connection with the Acquisition, the
Company's goodwill, which is amortized over a period of 15 years, increased by
$18.6 million dollars in 1996. As part of the Acquisition, the Company increased
its level of long-term indebtedness and experienced an attendant increase in
annual interest expense. The net proceeds of the Offering to the Company,
together with available cash, will be used to repay this indebtedness and, as a
result, the Company will record an extraordinary item of $2.4 million ($1.4
million on an after-tax basis) for the write-off of capitalized debt issuance
costs during the period in which the Offering is consummated. The effects of the
Acquisition impact the comparability of the Company's financial results with
those of the Predecessor Company.

The Company believes that, especially during the months prior to the
Acquisition and to some extent immediately thereafter, uncertainty regarding a
change in ownership of the Company and the subsequent transition adversely
affected the business of the Company. In management's opinion, employee
purchases of equity of the Company in conjunction with the Acquisition and the
consummation of the Acquisition have significantly enhanced employee motivation
and the Company's ability to retain existing employees and improved its ability
to recruit additional investment professionals. The Company has allocated up to
20,000 shares for issuance to new employees at a purchase price of
$ per share. To the extent these shares are issued, the Company will
recognize non-cash compensation expense equal to the difference between the fair
market value of such shares and the purchase price therefor.

CONTRIBUTION OF PRINCIPAL SUBSIDIARIES

During 1996 and 1997, Tucker Anthony contributed 62% and 59%, respectively,
of the Company's total operating revenues while Sutro contributed 32% and 35%,
respectively, of total operating revenues and Freedom Capital contributed 6% of
total operating revenues in each of 1996 and 1997. During these periods, Tucker
Anthony and Freedom Capital contributed a significantly greater percentage of
the Company's net

21
<PAGE> 23

operating income than their respective contributions to total operating
revenues. As a result of initiatives to improve the productivity of Sutro, its
profit margins have been improving since 1995.

COMPONENTS OF REVENUES AND EXPENSES

Revenues. Commission revenues include retail and institutional commissions
received by the Company as an agent in securities transactions, including all
exchange listed, over-the-counter ("OTC") agency, mutual fund, insurance, and
annuity transactions. Principal transactions revenues include gains and losses
from the trading of securities by the Company as principal including principal
sales credits and dividends. Investment banking revenues include selling
concessions, underwriting fees and management fees received from the
underwriting of corporate or municipal securities as well as fees earned from
providing merger and acquisition and other financial advisory services. Asset
management revenues include fees generated from providing investment advisory
and portfolio management services to institutional and high net worth investors.
Other revenues primarily consist of transaction fees, retirement plan revenue
and third party correspondent clearing fees. Interest income primarily consists
of interest earned on margin loans made to customers, securities purchased under
agreements to resell and fixed income securities held in the Company's trading
accounts. Net revenues equal total revenues less interest expense. Interest
expense includes interest paid under its Wexford financing arrangement and on
bank borrowings, securities sold under agreements to repurchase, fixed asset
financing and cash balances in customer accounts.

Expenses. Compensation and benefits expense includes sales, trading and
incentive compensation, which are primarily variable based on revenue production
and/or business unit profit contribution, and salaries, payroll taxes, and
employee benefits which are relatively fixed in nature. Incentive compensation,
including bonuses for eligible employees, is accrued proratably throughout the
year based on actual or estimated annual amounts. Brokerage and clearance
expense includes the cost of securities clearance, floor brokerage and exchange
fees. Communications expense includes service charges for telecommunications,
news and market data services. Occupancy and equipment expense includes rent and
operating expenses for facilities, expenditures for repairs and maintenance, and
depreciation of furniture, fixtures, leasehold improvements, business equipment
and computer equipment. Promotional expense includes travel, entertainment and
advertising. Other expenses include general and administrative expenses,
including professional services, litigation expenses, goodwill amortization,
data processing and other miscellaneous expenses. Acquisition interest expense
represents the interest expense incurred under the Credit Facility.

22
<PAGE> 24

RESULTS OF OPERATIONS

The following table sets forth certain financial data as a percentage of
net revenues:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1995(1) 1996(2) 1997
<S> <C> <C> <C>
Revenues:
Commissions............................................. 42.1% 43.3% 44.5%
Principal transactions.................................. 31.8 29.7 26.4
Investment banking...................................... 10.5 10.9 14.7
Asset management........................................ 4.5 5.4 5.3
Other................................................... 3.8 4.5 3.3
----- ----- -----
Total operating revenues............................. 92.7 93.8 94.2
Interest income......................................... 18.1 14.2 11.7
----- ----- -----
Total revenues....................................... 110.8 108.0 105.9
Interest expense........................................ 10.8 8.0 5.9
----- ----- -----
Net revenues......................................... 100.0 100.0 100.0
Non-interest expenses:
Compensation and benefits............................... 65.4 65.2 65.5(3)
Occupancy and equipment................................. 7.9 9.5 6.5
Communications.......................................... 5.4 5.1 4.5
Brokerage and clearance................................. 2.2 3.3 3.0
Promotional............................................. 2.9 2.8 2.7
Other................................................... 9.5 7.7 7.6
----- ----- -----
Total non-interest expenses.......................... 93.3 93.6 89.8
----- ----- -----
Acquisition interest expense.............................. -- 0.2 1.6
----- ----- -----
Income before income taxes................................ 6.7 6.2 8.6
Income taxes.............................................. 2.8 2.7 3.6
----- ----- -----
Net income................................................ 3.9% 3.5% 5.0%
===== ===== =====
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) Predecessor Company.

(2) Based on the consolidated results of the Predecessor Company for the eleven
months ended November 29, 1996 combined with the consolidated results of the
Company for the one month ended December 31, 1996.

(3) Includes the effect of $1.4 million of non-cash compensation expense
resulting from issuance of Common Stock and stock options to employees.

1997 COMPARED TO 1996

The Company experienced strong operating results in 1997 compared to 1996.
Revenues increased in all of the Company's core businesses, with the exception
of principal transaction revenues, and expenses declined as a percentage of net
revenues. Net income increased $6.4 million or 52% to $18.7 million in 1997 from
net income of $12.3 million in 1996, even after deducting after-tax expenses of
$5.9 million in 1997 related to the Acquisition (primarily amortization of
goodwill and interest and other expenses related to the Credit Facility).

Total operating revenues increased $25.8 million or 8% to $354.1 million in
1997 from $328.3 million in 1996. During 1996 and 1997, Tucker Anthony
contributed 62% and 59%, respectively, of the Company's total operating revenues
while Sutro contributed 32% and 35%, respectively, and Freedom Capital
contributed 6% in each year. Net revenues, including the effect of interest
income and interest expense, other than the Acquisition interest expense,
increased $26.0 million or 7% to $375.8 million in 1997 versus $349.8 million in
1996.

23
<PAGE> 25

Commission revenues increased $15.7 million or 10% to $167.2 million in
1997 from $151.5 million in 1996, due to increased business in the Company's
retail systems, reflecting the growth in listed share volume on all the major
equity exchanges and higher mutual fund commission revenue. During 1997, Tucker
Anthony and Sutro increased average production per retail investment executive
by 15% and 13%, respectively, over the prior year.

Principal transaction revenues declined $4.6 million or 4% to $99.3 million
in 1997 from $103.9 million in 1996, as a result of management's decision to
discontinue certain institutional fixed income business, a decrease in
convertible arbitrage trading profits as interest rates declined during the
period and a mortgage-backed securities trading loss of $2.6 million caused by a
former employee.

Investment banking revenues increased $17.1 million or 45% to $55.2 million
in 1997 from $38.1 million in the prior year. The higher investment banking
revenues resulted from increased underwriting activity, similar to that
experienced in the securities industry generally, and due to the Company's
refocused and increased emphasis on the public offering business at Tucker
Anthony and Sutro. Tucker Anthony or Sutro collectively managed or co-managed 34
public equity offerings during 1997 compared to 16 during 1996 and generated an
increase in private placement and merger and acquisition advisory fees of 17%
over 1996.

Asset management revenues increased $0.9 million or 5% to $19.9 million in
1997 from $19.0 million in 1996. This revenue increase arose primarily in the
institutional area where assets grew 14% to $1.7 billion and related revenues
increased 21% or $1.0 million in 1997, reflecting the full year effect of new
accounts at year-end 1996 and asset appreciation arising from equity market
performance which produced higher fee income. Revenues from other areas of the
asset management business were essentially unchanged from 1996 as higher money
market fee income in 1997 was largely offset by lower revenues in the taxable
advisory business which discontinued its tax preparation services at year-end
1996. Total assets under management grew to $5.6 billion at year end 1997 from
$5.0 billion at year end 1996.

Other income decreased $3.3 million or 21% to $12.5 million in 1997 from
$15.8 million in 1996. This decrease resulted primarily from the mid-1997
expiration of a five year contract with John Hancock Broker Distribution
Services under which the Company recovered mutual fund sales charges.

Interest income decreased $5.7 million or 11% to $44.1 million in 1997 from
$49.8 million in 1996, due primarily to lower average inventory balances and a
partial shift from debt to equity transactions in the convertible arbitrage
area. Interest expense, excluding those expenses associated with financing the
Acquisition, decreased $5.9 million or 21% to $22.4 million in 1997 from $28.3
million in 1996, reflecting lower average inventory balances.

Total non-interest expenses increased $9.9 million or 3% to $337.3 million
in 1997 from $327.4 million in 1996. This increase was the result of higher
production-related compensation principally attributable to higher revenues
partially offset by reduced operating expenses mainly resulting from the
Company's outsourcing of its clearing function to Wexford and other cost
efficiencies. Although the Company's income statement refers to brokerage and
clearance as a specific category of expense, the compensation, occupancy and
other expense categories also included costs associated with the Company's
clearing activity, both while self clearing and after its conversion to Wexford.
The Company achieved substantial savings in these expense categories as a result
of the Wexford clearing arrangement, even after the incurrence of $4.5 million
of one-time occupancy expense in conjunction with entering into the Wexford
clearing arrangement. The Company began to clear through Wexford in April 1996;
consequently, comparisons between 1996 and 1997 do not reflect the full cost
savings experienced as a result of the new clearing arrangement.

Compensation and benefits expense increased $17.8 million or 8% to $245.9
million in 1997 from $228.1 million in 1996, primarily due to increased
incentive and production-related compensation, offset by lower fixed expenses
resulting from back office support personnel reductions associated with the
outsourcing of the Company's clearing function in 1996 and substantial
organizational changes in the fixed income area. Compensation and benefits as a
percentage of net revenues remained virtually unchanged at 65% in 1997 as
compared to 1996. During 1997, the Company incurred $1.4 million of non-cash
compensation expense resulting from issuance of Common Stock and stock options
to its employees.

24
<PAGE> 26

Despite substantially increased clearing activity, brokerage and clearance
expenses declined slightly to $11.3 million in 1997 compared to $11.5 million in
1996, primarily as a result of the cost effective Wexford clearing arrangement.

All other operating expenses decreased an aggregate of $7.7 million or 9%
to $80.1 million for 1997 from $87.8 million in 1996, primarily due to the
realization of benefits from outsourcing and other cost efficiencies initiated
by management. All other expenses as a percentage of net revenues declined to
21% in 1997 from 25% in 1996. Specifically, communications expense decreased
$0.9 million, or 5%, and occupancy and equipment expense decreased $8.9 million,
or 27% (including a one-time charge of $4.5 million in 1996 related to entering
into the Wexford clearing arrangement). These decreases were partially offset by
an increase in promotional expense of $0.4 million or 4% and an increase in
other expenses which totaled $28.5 million in 1997 (including $1.9 million in
additional goodwill amortization relating to the Acquisition), as compared to
1996 when other expenses totaled $26.8 million (including a one-time credit of
$6.3 million due to an insurance recovery associated with litigation expenses
incurred during a prior period). Without giving effect to such increased
amortization expense and insurance recovery, other expenses decreased $6.5
million or 20% compared to 1996, primarily as a result of the Wexford clearing
arrangement.

The Company's income tax provisions in 1997 and 1996 were $13.7 million and
$9.5 million, respectively, which represented a 42% effective tax rate in 1997
and a 44% effective tax rate in 1996. The lower effective tax rate in 1997 was
due mainly to an increase in non-taxable dividend income.

1996 COMPARED TO 1995

Total operating revenues increased $19.9 million or 6% to $328.3 million in
1996 from $308.4 million in 1995. The Company, along with the rest of the
securities industry, benefited during 1996 from continued strength in the equity
markets and resultant higher trading volumes. In particular, agency commission
income, OTC principal sales credits and asset management fee income increased
substantially over the prior year. Revenues from fixed income trading and
institutional sales declined, partially offsetting these gains. Net income
decreased $0.8 million or 6% to $12.3 million in 1996 from $13.1 million in
1995.

Commission revenues increased $11.3 million or 8% to $151.5 million in 1996
from $140.2 million in 1995 reflecting higher sales of both listed and OTC
securities and increased mutual fund business.

Principal transaction revenues decreased $1.9 million or 2% to $103.9
million in 1996 from $105.8 million in 1995, as a result of declines in fixed
income trading, particularly in the municipal bond business of Tucker Anthony.
Accordingly, management took steps in 1996 to curtail further such losses by
downsizing the fixed income group and redirecting the municipal bond trading
business away from institutional sales and trading towards support of retail
operations.

Investment banking revenues increased $3.3 million or 9% to $38.1 million
in 1996 from $34.8 million in 1995, primarily due to an increase in underwriting
and management fees of $4.3 million partially offset by lower public finance
fees which decreased $0.9 million at Sutro.

Asset management revenues increased $4.1 million or 28% to $19.0 million in
1996 from $14.9 million in 1995, due to growth in fees from the Company's asset
management subsidiary, Freedom Capital. Assets under management grew from $4.5
billion at the end of 1995 to $5.0 billion at the end of 1996, reflecting
increases of approximately $300 million in money market funds and $200 million
in institutional funds.

Other income increased $3.1 million or 24% to $15.8 million in 1996 from
$12.7 million in 1995, primarily reflecting an increase of $1.0 million in
Hancock mutual fund distribution fees and $1.5 million from the sale of
securities obtained from litigation settlements.

Interest income decreased $10.3 million or 17% to $49.8 million in 1996
from $60.1 million in 1995 reflecting a reduced level of tax exempt bond
inventories, lower convertible arbitrage bond interest and decreased stock
borrowing activity. Interest expense, excluding those expenses associated with
financing the Acquisition in 1996, decreased $7.7 million or 21% to $28.3
million in 1996 from $36.0 million in 1995 due in part to reduced stock loan
activity.

25
<PAGE> 27

Total non-interest expenses increased $17.2 million or 6% to $327.4 million
in 1996 from $310.2 million in 1995, largely as a result of increased
production-based compensation. During 1996, the Company incurred a one-time
charge of $4.5 million, included in occupancy and equipment expense, in
conjunction with entering into its Wexford clearing arrangement and the related
abandonment of certain properties previously leased for the Company's clearing
operations.

Compensation and benefits expenses increased $10.5 million or 5% to $228.1
million in 1996 from $217.6 million in 1995, primarily due to payment of higher
commissions, resulting from higher retail revenues, and increased
production-based compensation.

Brokerage and clearance expenses increased $4.2 million or 58% to $11.5
million in 1996 from $7.3 million in 1995. This increase is primarily
attributable to the costs associated with clearing through Wexford. Clearing
expenses in 1995, while the Predecessor Company was self-clearing, were also
reported in compensation, occupancy and other expense categories of the income
statement.

Occupancy and equipment expense increased $7.1 million or 27% to $33.2
million in 1996 from $26.1 million in 1995 primarily due to a $4.5 million
provision for future lease obligations pertaining to New York office space which
was previously occupied by the Company's clearing and cash management
operations, which operations are now performed by Wexford effective April 1,
1996.

All other expenses declined $4.6 million or 8% to $54.6 million in 1996
from $59.2 million in 1995. Specifically, communications expense decreased $0.2
million or 1%, promotional expense increased $0.4 million or 4%, and other
expenses decreased $4.8 million or 15%, attributable in large part to a $6.3
million insurance recovery related to litigation during a prior period.

The Company's income tax provision for 1996 and 1995 was $9.5 million and
$9.2 million, respectively, which represented a 44% effective tax rate in 1996
and a 41% effective tax rate in 1995. The higher effective tax rate for 1996 was
due primarily to decreases in tax-exempt interest income and non-taxable
dividend income.

LIQUIDITY AND CAPITAL RESOURCES

The Company is the parent of Freedom Securities Holding Corporation, which
is in turn the holding company for the Company's operating subsidiaries. The
Company receives dividends, interest on loans and other payments from its
subsidiaries which are the Company's primary source of funds to pay expenses,
service debt, and pay dividends. Distributions and interest payments to the
Company from its registered broker-dealer subsidiaries, which are expected to be
the Company's primary sources of liquidity, are restricted as to amounts which
may be paid by applicable law and regulations. The Net Capital Rules are the
primary regulatory restrictions. The Company's rights to participate in the
assets of any subsidiary are also subject to prior claims of the subsidiary's
creditors, including customers of the broker-dealer subsidiaries.

Borrowings under the Credit Facility will be repaid in full with 100% of
the net proceeds of the Offering to the Company, together with cash on hand,
leaving the Company only with $21.4 million of indebtedness secured by the
Company's fixed assets. See "Use of Proceeds."

The assets of Tucker Anthony, Sutro and Freedom Capital, the Company's
primary operating subsidiaries, are highly liquid with the majority consisting
of securities inventories and collateralized receivables, both of which
fluctuate depending on the levels of customer business. Collateralized
receivables consist primarily of securities purchased under agreements to resell
which are secured by U.S. government and agency securities. A relatively small
percentage of total assets is fixed or held for a period of longer than one
year.

The majority of the subsidiaries' assets are financed through Wexford, by
securities sold under repurchase agreements and through securities sold, not yet
purchased. The Company's principal source of short-term financing is based on
its clearing arrangement with Wexford under which the Company can borrow on an
uncommitted collateralized basis against its proprietary inventory positions.
This financing is generally obtained from Wexford at rates based upon prevailing
market conditions. The Company monitors overall

26
<PAGE> 28

liquidity by tracking the extent to which unencumbered marketable assets exceed
short-term unsecured borrowings.

Repurchase agreements are used primarily for customer accommodation
purposes and to finance the Company's inventory positions in U.S. government and
agency securities. These positions provide products and liquidity for customers
and are not maintained for the Company's investment or market speculation. The
level of activity fluctuates significantly depending on customer needs; however,
these fluctuations have no material effect on liquidity or capital resources.
The Company monitors the collateral position and counterparty risk on these
transactions daily. See "-- Risk Management."

The subsidiaries' total assets and short-term liabilities and the
individual components thereof vary significantly from period to period because
of changes relating to customer needs and economic and market conditions. The
Company's total assets at December 31, 1994, December 31, 1995, December 31,
1996 and December 31, 1997 were $1,037.9 million, $1,214.0 million, $517.0
million and $727.6 million, respectively. The decline in total assets from
December 31, 1995 to December 31, 1996 is primarily attributable to the
initiation of the Wexford clearing arrangement pursuant to which certain
customer and broker-dealer balances are no longer included in the Company's
Statements of Financial Condition.

The Company's operating activities generate cash resulting from net income
earned during the period and fluctuations in the Company's current assets and
liabilities. The most significant fluctuations have resulted from changes in the
level of customer activity and changes in proprietary arbitrage trading
strategies dictated by prevailing market conditions.

The Acquisition was funded through proceeds from the sale of Common Stock
and borrowings under the Credit Facility.

In addition to normal operating requirements, capital is required to
satisfy financing and regulatory requirements on securities inventories and
investment banking commitments. The Company's overall capital needs are
continually reviewed to ensure that its capital base can appropriately support
the anticipated capital needs of the subsidiaries. Management believes that
existing capital funds provided from operations and current credit arrangements
with Wexford will be sufficient to finance the operating subsidiaries' ongoing
businesses.

27
<PAGE> 29

QUARTERLY RESULTS

The information set forth below is derived from unaudited quarterly results
of operations of the Company for each quarter of 1996 and 1997. The data have
been prepared by the Company on a basis consistent with the Consolidated
Financial Statements included elsewhere in this Prospectus and includes all
adjustments, consisting principally of normal recurring accruals, that the
Company considers necessary for a fair presentation thereof. These operating
results are not necessarily indicative of the Company's future performance.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1996 1996 1996 1996(1) 1997 1997 1997 1997
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions....... $41,313 $ 38,621 $32,823 $38,783 $40,098 $ 37,592 $45,948 $43,546
Principal
transactions.... 26,224 27,062 24,614 25,931 22,009 22,561 28,553 26,146
Investment
banking......... 7,266 9,567 10,107 11,161 9,569 12,416 15,018 18,256
Asset management.. 4,473 4,640 4,819 5,066 4,828 4,635 5,087 5,400
Other............. 3,868 3,676 3,349 4,898 3,439 3,083 2,980 2,963
------- -------- ------- ------- ------- -------- ------- -------
Total operating
revenues...... 83,144 83,566 75,712 85,839 79,943 80,287 97,586 96,311
Interest income... 14,911 12,490 11,358 11,088 10,411 10,725 10,989 11,931
------- -------- ------- ------- ------- -------- ------- -------
Total
revenues...... 98,055 96,056 87,070 96,927 90,354 91,012 108,575 108,242
Interest
expense......... 8,774 7,888 6,036 5,585 5,906 5,883 4,996 5,643
------- -------- ------- ------- ------- -------- ------- -------
Net revenues.... 89,281 88,168 81,034 91,342 84,448 85,129 103,579 102,599
Non-interest
expenses:
Compensation and
benefits........ 58,363 56,566 52,358 60,759 54,476 55,261 68,196 68,006(2)
Occupancy and
equipment....... 6,826 7,235 7,303 11,860(3) 6,519 6,321 6,378 5,113
Communications.... 4,539 4,976 4,341 4,057 4,189 4,362 4,385 4,012
Brokerage and
clearance....... 2,024 3,308 3,084 3,064 2,704 2,914 2,872 2,772
Promotional....... 2,378 2,509 2,562 2,525 2,094 2,378 2,783 3,053
Other............. 8,711 8,213 6,906 2,984(4) 6,929 7,314 6,956 7,281
------- -------- ------- ------- ------- -------- ------- -------
Total
non-interest
expenses...... 82,841 82,807 76,554 85,249 76,911 78,550 91,570 90,237
Acquisition
interest
expense......... -- -- -- 567 1,494 1,539 1,545 1,474
------- -------- ------- ------- ------- -------- ------- -------
Income before
income taxes.... 6,440 5,361 4,480 5,526 6,043 5,040 10,464 10,888
Income taxes...... 2,763 2,332 1,963 2,466 2,550 2,122 4,497 4,568
------- -------- ------- ------- ------- -------- ------- -------
Net income........ $ 3,677 $ 3,029 $ 2,517 $ 3,060 $ 3,493 $ 2,918 $ 5,967 $ 6,320
======= ======== ======= ======= ======= ======== ======= =======
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) Represents the consolidated results of the Predecessor Company for the two
months ended November 29, 1996 combined with the consolidated results of the
Company for the one month ended December 31, 1996.

(2) Includes $1.2 million of the $1.4 million non-cash compensation expense
resulting from issuance of Common Stock and stock options to employees
during 1997.

(3) Includes $4.5 million in provisions for lease obligations pertaining to
abandoned New York office space.

(4) Includes an insurance recovery in the amount of $6.3 million relating to
litigation expenses incurred during prior periods.

28
<PAGE> 30

The following table sets forth certain financial data as a percentage of
net revenues for the periods presented:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1996 1996 1996 1996(1) 1997 1997 1997 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions........ 46.3% 43.8% 40.5% 42.5% 47.5% 44.2% 44.4% 42.4%
Principal
transactions..... 29.4 30.7 30.4 28.4 26.1 26.5 27.6 25.5
Investment
banking.......... 8.1 10.9 12.5 12.2 11.3 14.6 14.5 17.8
Asset management... 5.0 5.3 5.9 5.5 5.7 5.4 4.9 5.3
Other.............. 4.3 4.2 4.1 5.4 4.1 3.6 2.9 2.9
----- ----- ----- ----- ----- ----- ----- -----
Total operating
revenues....... 93.1 94.9 93.4 94.0 94.7 94.3 94.3 93.9
Interest income.... 16.7 14.2 14.0 12.1 12.3 12.6 10.6 11.6
----- ----- ----- ----- ----- ----- ----- -----
Total revenues... 109.8 109.1 107.4 106.1 107.0 106.9 104.9 105.5
Interest expense... 9.8 9.1 7.4 6.1 7.0 6.9 4.9 5.5
----- ----- ----- ----- ----- ----- ----- -----
Net revenues..... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Non-interest
expenses:
Compensation and
benefits......... 65.4 64.2 64.6 66.5 64.5 64.9 65.8 66.3(2)
Occupancy and
equipment........ 7.6 8.2 9.0 13.0(3) 7.7 7.4 6.2 5.0
Communications..... 5.1 5.6 5.4 4.4 5.0 5.1 4.2 3.9
Brokerage and
clearance........ 2.3 3.8 3.8 3.4 3.2 3.4 2.8 2.7
Promotional........ 2.7 2.8 3.2 2.8 2.5 2.8 2.7 3.0
Other.............. 9.8 9.3 8.5 3.3(4) 8.2 8.6 6.7 7.1
----- ----- ----- ----- ----- ----- ----- -----
Total
non-interest
expenses....... 92.9 93.9 94.5 93.4 91.1 92.2 88.4 88.0
Acquisition
interest
expense.......... -- -- -- 0.6 1.8 1.8 1.5 1.4
Income before
income taxes..... 7.2 6.1 5.5 6.0 7.1 6.0 10.1 10.6
Income taxes....... 3.1 2.6 2.4 2.7 3.0 2.5 4.3 4.5
----- ----- ----- ----- ----- ----- ----- -----
Net income......... 4.1% 3.5% 3.1% 3.3% 4.1% 3.5% 5.8% 6.1%
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>

- - - - - - - - - - - - - - - ---------------
(1) Based on the consolidated results of the Predecessor Company for the two
months ended November 29, 1996 combined with the consolidated results of the
Company for the one month ended December 31, 1996.

(2) Includes 1.2% of non-cash compensation expense resulting from issuance of
Common Stock and stock options to employees during the fourth quarter of
1997.

(3) Includes 4.9% in provisions for lease obligations pertaining to abandoned
New York office space.

(4) Includes an insurance recovery of 6.9% relating to litigation expenses
incurred during prior periods.

29
<PAGE> 31

RISK MANAGEMENT

Tucker Anthony's and Sutro's exposure to risk includes items that are
fundamental to the securities industry, such as trading of securities, extension
of credit to counterparties and investment banking activities, as well as other
risks, such as extension of credit to retail and institutional customers. Tucker
Anthony and Sutro monitor their market and credit risk daily through a number of
control procedures designed to identify and evaluate the various risks to which
Tucker Anthony and Sutro are exposed.

Tucker Anthony and Sutro may act as a principal to facilitate
customer-related transactions in financial instruments which expose the firm to
market risks. Tucker Anthony and Sutro make markets for dealers in certain
equity and debt securities and Tucker Anthony trades for its own account in
arbitrage trading activities. Whether acting as principal to facilitate customer
transactions or trading for their own account, Tucker Anthony and Sutro
undertake a variety of measures to manage against losses which may be incurred
through market risk.

Methods of managing exposure to market risk include: limiting firm
commitments by position levels both long and short for every product that is
traded; limiting the type of trade that can occur in each inventory account;
limiting the number of days inventory is held; using third party security
pricing services to enhance market price testing and variance analysis; and
tactically employing certain hedging techniques that reduce the amount of risk
taken by Tucker Anthony and Sutro. Management believes that the subsidiaries'
risk management and hedging practices aid in managing their market exposure and
reducing volatility of the Company's earnings.

At December 31, 1996 and December 31, 1997, the Company's securities owned
and securities sold, not yet purchased consisted of the following:

<TABLE>
<CAPTION>
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
OWNED:
Obligations of the U.S. government or its agencies..... $ 23,650 $ 27,396
State and municipal obligations........................ 56,057 38,222
Arbitrage securities................................... 84,967 291,023
Other corporate obligations............................ 73,127 51,709
Other corporate stocks and warrants.................... 15,305 15,172
-------- --------
$253,106 $423,522
======== ========
SOLD, NOT YET PURCHASED:
Obligations of the U.S. government or its agencies..... $ 37,663 $ 22,890
State and municipal obligations........................ 1,476 1,519
Arbitrage securities................................... 51,671 322,316
Other corporate obligations............................ 6,055 1,356
Other corporate stocks and warrants.................... 4,275 6,484
-------- --------
$101,140 $354,565
======== ========
</TABLE>

Tucker Anthony and Sutro manage their daily risk exposure in their firm
inventory accounts by requiring various levels of management to participate in
review of these accounts. The primary purpose of the risk management function is
to participate in the establishment of position limits and to monitor both the
buy and sell activity in the firm's trading accounts relative to the established
position limits. Tucker Anthony's and Sutro's trading activities result in the
creation of inventory positions. Position and exposure reports indicating both
long and short exposure are prepared, distributed and reviewed each day by
Tucker Anthony's and Sutro's risk management personnel as well as by certain
members of senior management. These reports enable Tucker Anthony and Sutro to
control their inventory levels, monitor trading results on a product-by-product
basis and review inventory aging, pricing and concentration.

30
<PAGE> 32

In addition to position and exposure reporting, Tucker Anthony and Sutro
each produce a daily revenue report which summarizes trading, interest and
commission revenue items for each product area. Daily revenues are reviewed
independently for various risk factors that could adversely affect certain
trading decisions. The daily revenue reports are produced by their accounting
departments and distributed to various levels of management together with the
position and exposure reports. The combined use of these reports enables senior
management to monitor and control firm trading activity on a product-by-product
basis.

Tucker Anthony and Sutro deal with counterparties or other broker-dealers
in conducting business for their clients or for their own account. Credit and
trading limits extended to counterparties are controlled and managed by Tucker
Anthony's and Sutro's credit and risk management functions. Financing extended
to counterparties is provided against collateral. Tucker Anthony and Sutro
monitor their exposure to counterparty risk on a daily basis through the use of
internally generated credit exposure information and the monitoring of
collateral values. The risk management function participates in the review of
counterparties to establish appropriate exposure limits on a product-by-product
basis. Tucker Anthony and Sutro manage their daily credit exposure by monitoring
on an ongoing basis the creditworthiness of counterparties and their related
trading limits, requesting additional collateral when deemed necessary and
limiting the amount and duration of counterparty exposure.

Tucker Anthony and Sutro, through Wexford, also extend credit to their
retail customers. Amounts loaned are limited by margin regulations of the Board
of Governors of the Federal Reserve System and other regulatory authorities and
are subject to Wexford's, Tucker Anthony's and Sutro's credit review and daily
monitoring procedures.

Risks associated with investment banking activities are controlled through
committees within Tucker Anthony and Sutro. Their respective commitment
committees review every significant proposed investment banking transaction
prior to its acceptance by Tucker Anthony and Sutro. Their respective capital
committees review major proposed transactions in order to determine the effect
of such transactions on regulatory capital prior to their acceptance. Only after
acceptance by both committees within a firm will that firm's commitment to
underwrite a specific security be extended to the investment banking client.

Tucker Anthony's and Sutro's compliance department professionals monitor
customer and employee transactions, conduct periodic and other examinations and
communicate with the various regulatory agencies that have jurisdiction over
Tucker Anthony and Sutro and their businesses.

31
<PAGE> 33

BUSINESS

INDUSTRY BACKGROUND

In recent years, the financial markets have grown in size and complexity,
characterized by a proliferation of investment products and services, frequent
innovations, increased globalization, strong capital flows and heavy trading
volume. These trends have increased the number and variety of choices available
to investors and the range of financing alternatives available to businesses and
other issuers of securities. Management believes these trends will continue in
the future and consequently believes that the needs of both investors and
issuers for high quality professional financial advice and services, such as
those offered by the Company, will continue to increase.

Demand for investment products has increased significantly as large numbers
of "baby boomers" have begun to invest for their children's education and for
their own retirement. In 1996, the first 3.4 million baby boomers turned 50; the
impact of this generation on the capital markets is expected to continue to
build through the year 2010, when 57 million people will be in what has
historically been their prime investing years (ages 50 through 65).
Additionally, it is estimated that these individuals will inherit over $10
trillion (adjusted for inflation) from the previous generation between 1990 and
2040, representing the largest absolute transference of wealth in history.

Changes in household investing patterns have also contributed to the
increase in demand for investment products. In 1980, households owned $1.3
trillion of marketable securities, representing 47% of their liquid financial
assets. By September 30, 1997, the household sector's ownership of marketable
securities had risen by more than 660% to $9.9 trillion, or 76% of household
liquid financial assets. Over the same period, bank deposits decreased from 53%
to 24% of household liquid financial assets.

The volume of equity securities offered to the public illustrates the
growth in supply of investment products. Initial public offerings ("IPOs")
underwritten and total common equity issued in the United States public market
grew from $1.4 billion and $12.8 billion, respectively, in 1980, to $10.2
billion and $19.2 billion, respectively, in 1990, to $43.9 billion and $118.4
billion, respectively, in 1997. California and Massachusetts (the headquarters
states of Sutro and Tucker Anthony, respectively) ranked first and eighth,
respectively, among the 50 states in dollar volume of IPOs for locally
headquartered companies in 1997 and first and seventh, respectively, in dollar
volume of public offerings of common stock. A significant portion of the growth
in equity offerings has come from emerging and middle-market companies that
previously had limited access to the capital markets. The dramatic increase in
emerging and middle-market issuers has been facilitated by large increases in
the flow of cash into equity mutual funds and other managed funds as a result of
these changes in household investing patterns.

The combination of increasing flows of funds into the equity markets and
new issuance activity has contributed to significantly higher trading volumes.
From 1980 to 1997, average daily trading volume grew at a compound annual rate
of 15.6% on the NYSE and 20.7% on the Automated Quotation System of the NASD
(the "Nasdaq"). More recently, the combined NYSE and Nasdaq average daily
trading volumes grew at a compound annual rate of 22.2% for the five years ended
1997 and increased 22.9% in 1997 over 1996.

COMPANY OVERVIEW

Freedom, through its two brokerage subsidiaries, Tucker Anthony and Sutro,
and its asset management subsidiary, Freedom Capital, is a full-service,
regionally focused retail brokerage and investment banking firm. Tucker Anthony,
headquartered in Boston and focused primarily on the northeastern United States,
and Sutro, headquartered in San Francisco and focused primarily on the western
United States, are both over 100 years old and have well established reputations
in their respective regions. Management believes that it can best serve the
needs of these distinct regions through separate, locally managed organizations,
while avoiding cost duplication through the use of shared clearing,
communications, information systems, and other support services. This approach
enables the Company to capitalize on each organization's name recognition,
historical areas of expertise and close regional and community ties while
lessening the Company's reliance on a single region's economy.

32
<PAGE> 34

The Company believes that its primary strengths are (i) the experience and
tenure of its investment executives, which have often led to long-term
relationships with clients in their respective communities; (ii) its high level
of employee commitment, evidenced by significant employee ownership in the
Company; (iii) its personalized, service-oriented culture emphasizing
responsiveness to client and regional market demands; (iv) its focus on emerging
and middle-market companies in targeted industries in which the Company has
specialized expertise or regional presence; and (v) its ability to manage and
control operating costs through centralization of certain services and other
cost-effective solutions, including its clearing and processing arrangements
with Wexford.

Asset Management. Freedom Capital, headquartered in Boston, was formed in
1930 and as of December 31, 1997 managed approximately $5.6 billion of assets,
including approximately $3.0 billion of investments by public sector entities,
high net worth individuals and others, with the remainder comprised of money
market funds for the benefit of Tucker Anthony and Sutro clients. Through its
institutional group, Freedom Institutional Partners, Freedom Capital has
developed a leading position in the management of public funds for local
Massachusetts municipalities and agencies. This group has also developed an
important presence in the Taft-Hartley union pension fund market and is growing
its corporate fund management business. Freedom Capital is actively seeking to
acquire smaller regional money management firms to increase both assets under
management and the number of its portfolio managers. Management believes that
the additional services and products offered as a result of such acquisitions
will create significant opportunities to capitalize on the Company's established
retail brokerage network by capturing a higher percentage of customer investment
dollars.

33
<PAGE> 35

BUSINESS STRATEGY

Improve Profitability of Retail Brokerage Operations. The Company intends
to continue to improve the profitability of its retail operations by
capitalizing on distinct opportunities present at Tucker Anthony and Sutro.
Tucker Anthony, which intends to modestly increase the number of its investment
executives, is focused on increasing the productivity of its existing investment
executives by capitalizing on their tenure, expertise and long-standing client
relationships and by providing them with enhanced training, product offerings,
information systems and support. Sutro intends to significantly increase the
number of its investment executives in order to better leverage its
infrastructure, reduce turnover among investment executives and, like Tucker
Anthony, increase the productivity of its existing investment executives. In the
year ended December 31, 1997, average production per retail investment executive
increased 15% at Tucker Anthony and 13% at Sutro compared to 1996. Management
believes that the implementation of these strategies will be aided by the
Company's entrepreneurial culture and strategy of providing a high level of
support for its investment executives.

Expand Regional and Specialty Investment Banking Activities. Tucker
Anthony and Sutro maintain separate and independent investment banking groups.
Each group is organized to meet the specific needs of the emerging and
middle-market companies located within its geographic region and within its
areas of specialized industry expertise. Each investment banking group is
supported by its own regionally and industry focused research department,
institutional sales group and equity trading desk. Management believes that the
demand for regionally focused investment banking services by emerging and
middle-market companies in its two principal regions will grow due to continued
general economic expansion and the corresponding growth of new business
formations. Management believes that this independent and regional focus is
particularly well suited to the northeastern and western regions currently
served by Tucker Anthony and Sutro, respectively. In 1997, for example,
Massachusetts and California ranked seventh and first, respectively, in dollar
volume of public offerings of common stock of locally headquartered companies.
Management also believes that consolidation within the investment banking
industry, as a whole, will offer enhanced opportunities for those firms which
maintain their local and industry specific focus. The Company intends to improve
the penetration of Tucker Anthony and Sutro's investment banking services in
their regional and industry specific markets by committing greater resources to
and by carefully focusing their research coverage on geographic regions and on
industry niches which offer the greatest opportunities.

Increase Asset Management Business. Management believes that opportunities
exist to increase the productivity and profitability of Freedom Capital. Freedom
Capital intends to make selective business

34
<PAGE> 36

acquisitions designed to increase the assets under its management and increase
the number of portfolio managers. The Company also intends to increase the
productivity and profitability of Freedom Capital through improved coordination
with the Tucker Anthony and Sutro brokerage networks and other initiatives.

THE ACQUISITION

To finance the Acquisition, approximately 350 employees of the Company,
including senior management and investment executives, purchased an aggregate of
approximately 31% of the Company's equity ( % after giving effect to the
Offering), with additional equity financing provided by THL and SCP. Incentive
equity programs have been established pursuant to which employees have acquired
or may acquire up to an additional % of the equity of the Company, which, when
added to shares previously purchased, would result in employees owning up to
approximately % of the Common Stock outstanding ( % after giving effect to
the Offering).

Since the Acquisition, management has identified and implemented strategies
to increase the productivity of Tucker Anthony's and Sutro's retail operations,
focus each firm's equity capital markets group and expand Freedom Capital's
money management business. Management believes that the Company's independence
and employee ownership have resulted in progressively higher levels of employee
motivation, confidence and commitment during 1997, as compared to 1996 when the
Predecessor Company was for sale and it was uncertain whether the Acquisition
would be consummated or whether the Predecessor Company would be sold to another
organization. Management believes that the Company's performance in 1996 was
adversely affected by uncertainty surrounding the future of the Company. The
Company believes that the Acquisition and the strategies instituted in
connection therewith have been successful. For example, Tucker Anthony and Sutro
managed or co-managed 34 equity offerings in 1997 compared to 16 in 1996, and
investment banking revenues increased 45% in 1997 over 1996. In 1997 the Company
reported net income of $18.7 million, a 52% increase over the net income of
$12.3 million for the prior year.

TUCKER ANTHONY AND SUTRO

Most of the Company's business activities are conducted through Tucker
Anthony and Sutro, with its asset management business conducted through Freedom
Capital. Tucker Anthony and Sutro's principle business activities are summarized
below.

Retail Brokerage

A large portion of the Company's revenues are generated from commissions or
fees earned as a broker for individual clients in the purchase and/or sale of
equity securities, fixed income securities, mutual funds, insurance products,
options and U.S. government and municipal securities. The Company also earns
commissions or fees for services provided in the areas of managed accounts and
personal trusts. As of December 31, 1997, Tucker Anthony had 448 investment
executives located in 10 states and the District of Columbia, and Sutro had 229
investment executives located in 3 states. For the fiscal years ended December
31, 1995, 1996 and 1997, commissions and sales credits from individual investors
constituted approximately 77%, 82% and 84%, respectively, of total commissions
and sales credits and 46%, 52% and 54%, respectively, of the Company's total
revenues. Management believes that such retail services will continue to be the
Company's primary source of revenue for the foreseeable future. Tucker Anthony
and Sutro charge

35
<PAGE> 37

retail commissions on both exchange and OTC transactions in accordance with
commission rate tables which they have formulated. Discounts from the commission
rate tables are granted in certain cases and the commission rate tables may
change from time to time. Each firm also offers certain account arrangements
under which a single fee is charged based on a percentage of the assets held in
a customer's account and no commissions are charged on a transaction by
transaction basis. Tucker Anthony and Sutro have also adopted the "Beacon
Account" and "Sutro Asset Value Account" programs, respectively, through which
clients may be charged negotiated fees based upon the level of services
provided.

The following table sets forth the locations and number of investment
executives in the Company's retail offices as of December 31, 1997:

TUCKER ANTHONY SUTRO

<TABLE>
<S> <C>
MASSACHUSETTS
Andover................ 3
Boston................. 72
Burlington............. 7
Franklin............... 6
New Bedford............ 5
Springfield............ 12
Worcester.............. 5
-------
Total................ 110
CONNECTICUT
Hartford............... 27
New Haven.............. 13
Stamford............... 12
-------
Total................ 52
MAINE
Bangor................. 7
Portland............... 15
-------
Total................ 22
RHODE ISLAND
Providence............. 20
NEW HAMPSHIRE
Concord................ 1
Nashua................. 4
Peterborough........... 3
Portsmouth............. 2
-------
Total................ 10
NEW YORK
Garden City............ 4
New York City
Fifth Avenue......... 32
World Financial
Center............ 61
Rochester.............. 8
Rome................... 8
Schenectady............ 6
Southampton............ 7
Syracuse............... 9
Watertown.............. 5
-------
Total................ 140
NEW JERSEY
Fairhaven.............. 16
Morristown............. 15
Princeton.............. 16
-------
Total................ 47
PENNSYLVANIA
Philadelphia........... 19
ILLINOIS
Chicago................ 18
DISTRICT OF COLUMBIA
Washington............. 7
DELAWARE
Wilmington............. 3
TOTAL TUCKER ANTHONY... 448
-------
CALIFORNIA
Beverly Hills.......... 27
Big Bear............... 2
Fresno................. 8
Hollywood.............. 1
La Jolla............... 9
Los Angeles............ 18
Newport Beach.......... 19
Oakland................ 18
Sacramento............. 12
San Francisco.......... 34
San Jose............... 13
San Luis Obispo........ 4
Santa Maria............ 5
Santa Rosa............. 12
West Los Angeles....... 2
Woodland Hills......... 13
-------
Total................ 197
ARIZONA
Scottsdale............. 14
Tucson................. 8
-------
Total................ 22
NEVADA
Las Vegas.............. 10

TOTAL SUTRO............ 229
-------
TOTAL COMPANY.......... 677
=======
</TABLE>

The Tucker Anthony and Sutro retail sales forces are comprised of an
experienced and productive group of investment executives. Management believes
that its strategy of providing its investment executives with a high level of
support and the flexibility to operate in an entrepreneurial manner has allowed
the Company to recruit and retain highly productive and experienced investment
executives. Tucker Anthony's and Sutro's investment executives average more than
10 and 6 1/2 years, respectively, of tenure with the Company and 19 and 17 1/2
years, respectively, of experience in the securities brokerage industry.
Management believes that Tucker Anthony and Sutro have been able to successfully
recruit and retain investment executives for a number of reasons including a
corporate culture which supports and encourages performance, employee ownership,
advanced technology, competitive payouts, no discount sharing and a
service-driven rather than a products-driven environment. The Company offers
services such as financial planning and tax, trust and estate advice to its
retail clients to complement the high level of service provided by its
investment executives. The

36
<PAGE> 38

Company believes that the personalized service it provides to its retail clients
is a key factor in the success of its retail brokerage units.

The following table illustrates the improved production of the Company's
retail investment executives.

AVERAGE PRODUCTION PER RETAIL INVESTMENT EXECUTIVE
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
TUCKER ANTHONY SUTRO
--------------------------------------------- ---------------------------------------------
AVERAGE AVERAGE
ANNUAL ANNUAL ANNUAL ANNUAL
YEAR PRODUCTION(1) INCREASE YEAR PRODUCTION(1) INCREASE
<S> <C> <C> <C> <C> <C>
1994............... $ 208 1994............... $ 271
1995............... 242 16.3% 1995............... 289 6.6%
1996............... 285 17.8 1996............... 312 8.0
1997............... 327 14.7 1997............... 352 12.8
</TABLE>

- - - - - - - - - - - - - - - ---------------

(1) Calculated by dividing total retail commissions and managed account fees by
the average of the number of investment executives at the beginning and end
of each period (excluding non-producing managers and trainees).

Tucker Anthony and Sutro together have over 200,000 accounts representing
approximately $28 billion in client assets as of December 31, 1997. The Company
maintains insurance provided by the Securities Investors Protection Corporation
(the "SIPC") for up to $500,000 (coverage of cash is limited to $100,000) per
customer account, as well as excess SIPC coverage for an additional $9.5 million
per client account. Clients who have established a Freedom Asset Account are
provided protection up to a maximum of $60 million, which is included in the
Freedom Asset Account annual fee. The excess SIPC coverage of $9.5 million and
$59.5 million is provided under an insurance policy arranged through Wexford.

Institutional Equity Sales and Research

Tucker Anthony and Sutro execute securities transactions for institutional
investors such as banks, mutual funds, insurance companies and pension and
profit-sharing plans. These investors normally purchase and sell securities in
large quantities, which transactions require specialized marketing and trading
expertise. In order to service these institutional accounts, the Company has
established a network of institutional offices located in New York, Boston, San
Francisco, Los Angeles, Washington, D.C. and Paris, France.

Institutional transactions are executed by the Company acting as broker or
principal. The Company permits discounts from its commission schedule to its
institutional customers. The size of such discounts varies with the size of
particular transactions and other factors. For the fiscal years ended December
31, 1995, 1996 and 1997, commissions and sales credits from institutional
investors constituted approximately 11%, 10% and 10%, respectively, of total
commissions and sales credits and 6% of the Company's total revenues in each
year. The Company believes that it receives a significant portion of its
institutional brokerage commissions as a consequence of its research advice and
services regarding specific corporations and industries, its principal
transactions business and its investment banking activity.

Historically, Tucker Anthony and Sutro combined their institutional equity
sales and research forces under a joint venture, which was intended to create
efficiencies in institutional account coverage and research development costs.
In order to better coordinate the respective institutional sales, investment
banking, equity research and trading departments of Tucker Anthony and Sutro,
the research joint venture was disbanded following the Acquisition, and each of
Tucker Anthony and Sutro have established their own targeted regional and
industry equity research and institutional equity sales programs.

Tucker Anthony and Sutro have each focused their equity research on
selected sectors of the consumer products, healthcare, financial services and
technology industries primarily concentrated in their respective regions. Within
each of these industries, Tucker Anthony and Sutro have focused on various
industry niches which each believes offers it the greatest opportunities. Each
firm focuses its equity capital markets group on

37
<PAGE> 39

integrating its research, institutional sales, corporate finance, trading and
syndication functions. Management believes that its research will be a key
factor in growing its equity capital markets activities.

Principal Transactions and Trading

The Company conducts its principal transactions and trading business
through Tucker Anthony and Sutro, with each firm's business focused on the
activities summarized below, except for arbitrage activities which are engaged
in primarily by Tucker Anthony.

Tucker Anthony and Sutro make markets, buying and selling as principal, in
common stocks, convertible preferred stocks, warrants and other securities
traded on Nasdaq or in other OTC markets. As of December 31, 1997, the Company
made markets in equity securities of over 400 issuers. Such securities are
principally those in which there is substantial continuing client interest and
include securities which the Company has underwritten or on which it provides
research opinions. The Company also effects transactions in blocks of
securities, usually with institutional investors and generally involving 10,000
or more shares of listed stocks. Such transactions are handled on an agency
basis to the extent possible, but the Company may take a long or short position
as principal to the extent that no buyer or seller is immediately available. By
engaging in block positioning, the Company places a portion of its capital at
risk to facilitate transactions for clients.

The Company provides clients access to a range of fixed income products
including municipal securities, U.S. government and agency securities, mortgage
related securities including those issued through Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA") and Federal
Home Loan Mortgage Corp. ("FHLMC"), and corporate investment-grade and
high-yield bonds. The Company takes positions on a principal basis in municipal,
U.S. government, agency and corporate securities to facilitate transactions for
its clients. Profits or losses are recognized from fluctuations in the value of
securities in which it maintains positions. The Company's capital can be at risk
to the extent significant adverse price fluctuations occur. Additionally,
trading activities include the purchase of securities under agreements to resell
at future dates (resale agreements) and the sale of the same or similar
securities under agreements to repurchase at future dates (repurchase
agreements). Profits and losses on the repurchase transactions result from the
interest rate differentials. The Company actively participates on a principal
basis in the mortgage-backed securities markets through the purchase or sale of
GNMA, FNMA, FHLMC, mortgage pass-through securities, collateralized mortgage
obligations and other mortgage related securities, in order to meet client
needs. The Company finances its trading positions as part of its Wexford
clearing arrangement, by overnight borrowing and by repurchase agreements. See
"Risk Factors -- Risks Associated with Principal Trading Activities."

Tucker Anthony and Sutro are each municipal securities dealers in both the
primary and secondary markets, buying and selling securities for their own
account and for clients. Revenues derived from these activities include
underwriting and management fees, selling concessions and trading profits.

Tucker Anthony engages in the purchase and sale of convertible and equity
securities to take advantage of price differences prevailing in separate
markets. These arbitrage activities include both convertible and risk arbitrage.
To the extent that purchase and sale transactions are not simultaneous, or the
closing of a position is subject to a subsequent event such as the successful
consummation of a corporate merger, Tucker Anthony places a portion of its
capital at risk. Sutro does not engage in significant arbitrage activities.

UNDERWRITING ACTIVITIES AND INVESTMENT BANKING

The Company's investment banking and underwriting activities are performed
by Tucker Anthony's and Sutro's corporate finance, public finance and syndicate
departments. The corporate finance groups manage and underwrite public offerings
of equity and, to a significantly lesser extent, debt securities, arrange
private placements of equity and debt securities and provide financial advice in
connection with mergers and acquisitions, divestitures and other corporate
reorganizations and restructurings. Tucker Anthony's and Sutro's managed public
equity offerings and merger and acquisition transactions are typically
undertaken for emerging

38
<PAGE> 40

or middle-market companies in the consumer products, healthcare, financial
services and technology sectors or companies located in each firm's respective
geographic region.

Historically, the Company's merger and acquisition advisory business has
been responsible for a majority of the Company's investment banking revenues.
The Company believes that it has a well established merger and acquisition
advisory business and plans to capitalize on this strength in further building
upon Tucker Anthony's and Sutro's equity capital markets groups.

Through the Company's renewed focus on its equity capital markets groups,
Tucker Anthony's and Sutro's corporate finance and syndicate departments
coordinate closely with their respective research and institutional sales
departments in order to enhance marketing and provide integrated services to
emerging and middle-market companies and institutional clients. As the following
chart indicates, the Company has been successful in increasing the underwriting
activities of Tucker Anthony and Sutro.

PUBLIC EQUITY OFFERINGS LED OR CO-MANAGED(1)

<TABLE>
<CAPTION>
1995 1996 1997
--------------- --------------- ---------------
NUMBER AMOUNT NUMBER AMOUNT NUMBER AMOUNT
(DOLLARS IN MILLIONS)(2)
<S> <C> <C> <C> <C> <C> <C>
Issues managed by Tucker Anthony............... 5 $192 10 $250 10 $ 473
Issues managed by Sutro........................ 3 129 5 282 20 1,170
Issues managed by Tucker Anthony and Sutro
jointly...................................... 1 24 1 57 4 205
---- ---- ----
- -- --
Total.......................................... $345 $589 $1,848
9 16 34
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) Including public common or preferred stock issues and rights offerings;
excluding closed-end funds.

(2) Shares offered by entire syndicate (excluding over-allotment shares)
multiplied by offering price.

The public finance departments of Tucker Anthony and Sutro provide
financial consulting, advisory and underwriting services to cities and public
service districts. The Company's subsidiaries manage and underwrite offerings of
municipal securities to finance the construction and maintenance of a broad
range of public-related facilities, including healthcare, housing, education,
public power, water and sewer, airports, highways and other infrastructure
needs. Over the last several years, the public finance sector has generally
experienced diminishing spreads and a lower level of publicly financed projects.
Nevertheless, both firms have experienced increasing profitability in this
sector in 1997 by concentrating on smaller local community projects.

The syndicate departments coordinate the distribution of managed and
co-managed corporate securities offerings and accept invitations to participate
in underwritings managed by other investment banking firms.

The Company, through certain subsidiaries, has from time to time in the
past and may from time to time in the future participate as an equity investor
in connection with specific transactions.

Other Activities

Tucker Anthony and Sutro hold memberships in major securities exchanges in
the United States (including the NYSE) in order to provide services to their
brokerage clients in the purchase and sale of listed securities.

Additionally, the Company's wholly owned subsidiary, Freedom Specialist
Inc. ("FSI"), has a 25% interest in the profits and losses of a joint specialist
account in which it participates with two other NYSE specialist firms, RPM
Specialist Corp. and R. Adrian & Co. Specialists are responsible for executing
transactions and maintaining a fair and orderly market in securities under NYSE
rules and regulations. In this function, the specialist firm acts as an agent in
executing orders entrusted to it and/or acts as a dealer on the opposite side of
public orders in the security executed on the floor of the NYSE. As of December
31, 1997, the specialist firm acted as a specialist in 39 equity issues. FSI's
specialist stock settlement and clearing activities are provided by RPM Clearing
Corporation.

39
<PAGE> 41

Retail client securities transactions are executed on either a cash or
margin basis. Under the current clearing arrangement with Wexford, in a retail
margin transaction, credit is extended to a client through Wexford for the
purchase of securities, using the securities purchased and/or other securities
in the client's account as collateral for amounts loaned. The Company receives
income from interest charged on such extensions of credit. The financing of
margin purchases can be an important source of revenue to the Company, since the
interest rate paid by the client on funds loaned through Wexford exceeds the
Company's interest costs for net customer debit balances paid to Wexford. The
amount of the Company's gross interest revenues is affected not only by
prevailing interest rates, but also by the volume of business conducted on a
margin basis. By permitting a client to purchase on margin, the Company takes
the risk that market declines could reduce the value of the collateral below the
principal amount loaned, plus accrued interest, before the collateral can be
sold. Amounts loaned are limited by margin regulations of the Board of Governors
of the Federal Reserve System and other regulatory authorities and are subject
to Wexford's, Tucker Anthony's and Sutro's credit review and daily monitoring
procedures.

FREEDOM CAPITAL

The Company's asset management activities are conducted principally by
Freedom Capital. Freedom Capital is a Massachusetts corporation, formerly named
Tucker Anthony Management Corp. organized in 1930. As of December 31, 1997,
Freedom Capital had 50 employees located in Massachusetts and New York. Freedom
Capital provides investment advisory and portfolio management services to
individuals, corporations, public funds, professional firms, endowments and
pension funds, and money market funds. As of December 31, 1997, total assets
under management were approximately $5.6 billion, comprised of approximately
$3.0 billion of investments by public sector entities, high net worth
individuals and others, with the remainder in money market funds for the benefit
of Tucker Anthony and Sutro clients.

The Company intends to enhance the profitability of Freedom Capital by
acquiring other money management businesses to increase both assets under
management and the number of investment professionals providing services and by
creating products to be marketed by Freedom Capital. Freedom Capital had offered
proprietary mutual funds to its clients until 1992, when the Company assigned
its investment advisory contracts to Hancock. The Company also intends to
increase the productivity and profitability of Freedom Capital through improved
coordination with the Tucker Anthony and Sutro brokerage networks and other
initiatives intended to allow Freedom Capital to manage a larger percentage of
funds held by Tucker Anthony and Sutro clients.

As with other aspects of the Company's business, Freedom Capital is focused
on service and client communication. To foster active and attentive management,
Freedom Capital limits the number of client relationships of each portfolio
manager. This policy is intended to provide each portfolio manager with the time
necessary to foster ongoing client relationships and the opportunity to discuss
portfolio strategies with the client. Freedom Capital offers comprehensive
client statements which include portfolio appraisals, performance analyses and
statements of transactions. In addition, Freedom Capital provides its clients
with economic commentary and investment letters on a regular basis. Freedom
Capital believes that its many strong, long-term client relationships attest to
its attention to service and client communication.

Freedom Trust Company, a New Hampshire chartered trust company and a
subsidiary of Freedom Capital, commenced operations in early 1996 to provide
clients the opportunity to place their assets in trust so that the Company may
continue to provide asset management services to such trusts after the client's
death. Freedom Trust Company had assets under custody of $642 million, of which
$20 million was under management, as of December 31, 1997.

RELATIONSHIP WITH WEXFORD

The Company clears all transactions, and carries accounts for customers and
proprietary accounts, with Wexford. Wexford furnishes the Company with
information necessary to run the Company's business, including commission runs,
transaction summaries, data feeds for various reports including compliance and
risk management, execution reports, trade confirmations, monthly account
statements, cashiering functions

40
<PAGE> 42

and the handling of margin accounts. As a result of its arrangement with
Wexford, the Company has achieved substantial savings in its clearing and
related operations. Under the Wexford arrangement, management believes that the
Company's cost of clearing its transactions is very competitive with the
industry's costs. The Company is entitled to pay a set fee per trade, subject to
an aggregate annual minimum payment for clearing trades through Wexford. The
Company's current trading volume allows the Company to realize substantially all
of the benefit of the per trade price, although the Company believes that the
Wexford arrangement provides substantial cost advantages to the Company even
during periods with reduced trading volumes.

Consistent with its strategy of providing its investment executives with a
high level of support, following the April 1996 conversion to the Wexford
clearing arrangement, the Company retained approximately 50 of its clearing
operation employees to serve as an interface between Wexford and the Company's
investment executives. The Company's retention of these employees allows its
investment executives to deal exclusively with Company employees in connection
with any client inquiries or problems. In addition to providing the Company and
its investment executives with access to advanced technology without substantial
capital investment by the Company, the Company's relationship with Wexford will
allow the Company to provide its clients with benefits resulting from this
technology. In early 1998, the Company expects to allow clients, for a fee, to
access information concerning their accounts and other market information from
their own personal computers and has acquired technology that will enable its
investment executives to communicate with its customers through electronic mail,
subject to rules and procedures in compliance with Commission and SRO
guidelines. The agreement between the Company and Wexford has a fixed term of
five years, with provisions for negotiated extensions. See "Risk
Factors -- Dependence on Certain Relationships and Technology" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The Company currently has an uncommitted financing arrangement with Wexford
pursuant to which the Company finances its customer accounts, certain
broker-dealer balances and firm trading positions through Wexford. Although the
customer accounts and such broker-dealer balances are not reflected on the
Company's Statements of Financial Condition for financial accounting reporting
purposes, the Company retains risk with respect thereto.

See "Risk Factors -- Dependence on Certain Relationships and Technology"
for a discussion of certain risks associated with the Company's Wexford
relationship.

PROPERTIES

The principal executive offices of the Company are located at One Beacon
Street, Boston, Massachusetts under a lease expiring December 31, 2005. The
Company is currently leasing approximately 88,000 square feet at that location,
and has agreed to lease an additional 15,000 feet there commencing in July 1998.
The Company also leases approximately 88,000 square feet (of which 20,000 square
feet has been sublet) at One World Financial Center, 200 Liberty Street, New
York, New York, under a lease expiring in January 2005; 64,000 square feet (of
which 9,000 square feet has been sublet) at 201 California Street, San
Francisco, California under a lease expiring on July 31, 2003; and 25,000 square
feet at 555 South Flower Street, Los Angeles, California under a lease expiring
July 31, 2002. For the year ended December 31, 1997, the Company's total
expenses for operating leases were $15.9 million. The Company believes that its
existing facilities will be adequate for the foreseeable future.

EMPLOYEES

As of December 31, 1997, the Company had a total of 1,812 employees, of
whom 1,156 were engaged in retail brokerage, 68 in institutional sales, 46 in
research, 116 in trading, 94 in investment banking, 15 in asset management and
317 in accounting, administration and operations. Of these employees, 1,170 were
classified as professionals and 642 were classified in support positions. None
of the Company's employees are subject to a collective bargaining agreement. The
Company believes that its relations with its employees generally are good. See
"Risk Factors -- Dependence on Personnel."

41
<PAGE> 43

COMPETITION

All aspects of the Company's business and of the securities business in
general are highly competitive. The principal competitive factors influencing
the Company's business are its professional staff, its reputation in the
marketplace, its existing client relationships, the ability to commit capital to
client transactions and its mix of market capabilities. The Company's ability to
compete effectively in securities brokerage and investment banking activities
will also be influenced by the adequacy of its capital levels and by its ability
to raise additional capital. See "Risk Factors -- Significant Competition."

REGULATION

The securities and commodities industry is one of the nation's most
extensively regulated industries. The Commission is responsible for carrying out
the federal securities laws and serves as a supervisory body over all national
securities exchanges and associations. The regulation of broker-dealers has to a
large extent been delegated by the federal securities laws to SROs. These SROs
include all the national securities and commodities exchanges, the NASD and the
MSRB. Subject to approval by the Commission and the CFTC, these SROs adopt rules
that govern the industry and conduct periodic examinations of the operations of
certain subsidiaries of the Company. The NYSE has been designated as the primary
regulator of certain of the Company's subsidiaries including Tucker Anthony and
Sutro. In addition, these subsidiaries are subject to regulation under the laws
of the 50 states, the District of Columbia, Puerto Rico and certain foreign
countries in which they are registered to conduct securities, investment
banking, insurance or commodities business. Broker-dealers are subject to
regulations which cover all aspects of the securities business, including sales
methods, trade practices among broker-dealers, use and safekeeping of customers'
funds and securities, capital structure of securities firms, record-keeping and
the conduct of directors, officers and employees. Violation of applicable
regulations can result in the revocation of broker-dealer licenses, the
imposition of censures or fines and the suspension or expulsion of a firm, its
officers or employees.

As registered broker-dealers and member firms of the NYSE, Tucker Anthony,
Sutro and FSI are subject to certain net capital requirements set forth in Rule
15c3-1 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and NYSE Rule 325. Freedom Distributors Corporation, a subsidiary of
Freedom Capital, is also subject to Rule 15c3-1. The Net Capital Rules, which
specifies minimum net capital requirements for registered broker-dealers, is
designed to measure the financial soundness and liquidity of broker-dealers. The
Net Capital Rules also (i) require that broker-dealers notify the Commission, in
writing, two business days prior to making withdrawals or other distributions of
equity capital or lending money to certain related persons if those withdrawals
would exceed, in any 30-day period, 30% of the broker-dealer's excess net
capital, and that they provide such notice within two business days after any
such withdrawal or loan that would exceed, an any 30-day period, 20% of the
broker-dealer's excess net capital; (ii) prohibit a broker-dealer from
withdrawing or otherwise distributing equity capital or making related party
loans if after such distribution or loan, the broker-dealer has net capital of
less than $300,000 or if the aggregate indebtedness of the broker-dealer's
consolidated entities would exceed 1,000% of the broker-dealer's net capital and
in certain other circumstances; and (iii) provide that the SEC may, by order,
prohibit withdrawals from capital from a broker-dealer for a period of up to 20
business days, if the withdrawals would exceed, in any 30-day period, 30% of the
broker-dealer's excess net capital and if the SEC believes such withdrawals
would be detrimental to the financial integrity of the firm or would unduly
jeopardize the broker-dealer's ability to pay its customer claims or other
liabilities. Under NYSE Rule 326, a broker-dealer that is an NYSE member is
required to reduce its business if its net capital (after giving effect to
scheduled maturities of subordinated indebtedness or other planned withdrawals
of regulatory capital during the following six months) is less than $312,500 or
4% of aggregate debit items (or 6% of the funds required to be segregated
pursuant to the Commodity Exchange Act) for fifteen consecutive days. NYSE Rule
326 also prohibits the expansion of a member's business if its net capital
(after giving effect to scheduled maturities of subordinated indebtedness or
other planned withdrawals of regulatory capital during the following six months)
is less than $375,000 or 5% of aggregate debit items (or 7% of the funds
required to be segregated pursuant to the Commodity Exchange Act) for fifteen
consecutive days.

42
<PAGE> 44

The Company also is subject to "Risk Assessment Rules" imposed by the
Commission which require, among other things, that certain broker-dealers
maintain and preserve certain information, describe risk management policies and
procedures and report on the financial condition of certain affiliates whose
financial and securities activities are reasonably likely to have material
impact on the financial and operational condition of the broker-dealers. Certain
"Material Associated Persons" (as defined in the Risk Assessment Rules) of the
broker-dealers and the activities conducted by such Material Associated Persons
may also be subject to regulation by the Commission. In addition, the
possibility exists that, on the basis of the information it obtains under the
Risk Assessment Rules, the Commission could seek authority over the Company's
unregulated subsidiaries either directly or through its existing authority over
the Company's regulated subsidiaries.

Tucker Anthony, Sutro, Freedom Capital and other subsidiaries are
registered with the Commission as investment advisors under the Investment
Advisors Act of 1940 (the "Advisors Act") and are subject to the requirements of
regulation pursuant to both the Advisors Act and certain state securities laws
and regulations. Such requirements relate to, among other things, limitations on
the ability of investment advisors to charge performance-based or non-refundable
fees to clients, record-keeping and reporting requirements, disclosure
requirements, limitations on principal transactions between an advisor or its
affiliates and advisory clients, as well as general anti-fraud prohibitions. The
state securities law requirements applicable to registered investment advisors
are in certain cases more comprehensive than those imposed under federal
securities laws.

As registered investment advisors under the Advisors Act, Tucker Anthony,
Sutro, Freedom Capital and certain other subsidiaries of the Company are subject
to regulations which cover various aspects of the Company's business, including
compensation arrangements. Under the Advisors Act, every investment advisory
agreement with the Company's clients must expressly provide that such contract
may not be assigned by the investment advisor without the consent of the client.
Under the Investment Company Act of 1940 (the "Investment Company Act"), every
investment advisor's agreement with a registered investment company must provide
for the agreement's automatic termination in the event it is assigned. Under
both the Advisors Act and the Investment Company Act, an investment advisory
agreement is deemed to have been assigned when there is a direct or indirect
transfer of the Agreement, including a direct assignment or a transfer of a
"controlling block" of the firm's voting securities or, under certain
circumstances, upon the transfer of a "controlling block" of the voting
securities of its parent corporation. A transaction is not, however, an
assignment under the Advisors Act or the Investment Company Act if it does not
result in a change of actual control or management of the investment advisor.
Any assignment of the Company's investment advisory agreements would require, as
to any registered investment company client, the prior approval of a majority of
its shareholders, and as to the Company's other clients, the prior consent of
such clients to such assignments. Following completion of the offering, sales by
THL and/or SCP or issuances of Common Stock by the Company, among other things,
could result in a deemed assignment of the Company's investment advisory
agreements under such statutes. See "Risk Factors -- Regulated Industry and
Potential Regulatory Change; Constraints Imposed by Net Capital Requirements."

In October 1996, during an annual review of the Company's former clearing
subsidiary by the NYSE, it was discovered that for the period of April 4, 1996
through July 1, 1996, such subsidiary had a net capital deficiency on certain
days in violation of the net capital requirements of the Commission and the
NYSE. These net capital deficiencies resulted from a misclassification on the
books of such subsidiary related to the continuation by such subsidiary of a
lending arrangement for overnight and short-term loans on an unsecured basis
with a lending institution during the winding down of its clearing operation
following the commencement of the Company's financing arrangement with Wexford.
While no net capital deficiencies have occurred between July 1, 1996 and the
Company's voluntary withdrawal of such subsidiary's broker-dealer license in
March 1997, the Company has reached a tentative settlement with the NYSE,
subject to approval of a hearing panel, in which the Company will be censured
and charged a fine of $60,000.

LITIGATION

The Company and its subsidiaries are parties to various legal proceedings
which are of an ordinary or routine nature incidental to the operations of the
Company and its subsidiaries. As of December 31, 1997,

43
<PAGE> 45

there were approximately 46 lawsuits and arbitrations pending against the
Company and its subsidiaries. The defense of such lawsuits or arbitrations may
divert the efforts and attention of the Company's management and staff, and the
Company may incur significant legal expense in defending such litigation or
arbitration. This may be the case even with respect to frivolous claims or
litigation. The amount of time that management and other employees may be
required to devote in connection with the defense of litigation could be
substantial and might divert their attention from other responsibilities within
the Company. The Company believes that it has adequately reserved for such
litigation matters.

44
<PAGE> 46

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The directors and executive officers of the Company and their respective
ages and positions are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
John H. Goldsmith.......... 56 Chairman, Director and Chief Executive Officer as well as
Chief Executive Officer of Tucker Anthony and Chairman of
Sutro
Robert H. Yevich........... 48 Director and President of Tucker Anthony
John F. Luikart............ 48 Director and President and Chief Executive Officer of Sutro
Henry Greenleaf............ 54 President and Chief Executive Officer of Freedom Capital
William C. Dennis, Jr...... 54 Executive Vice President and Chief Financial Officer
Kevin J. McKay............. 49 General Counsel and Secretary
Gregory N. Thomas.......... 50 Director and Executive Vice President
David V. Harkins........... 56 Director
C. Hunter Boll............. 42 Director
Thomas M. Hagerty.......... 35 Director
Seth W. Lawry.............. 33 Director
Winston J. Churchill....... 57 Director
</TABLE>

John H. Goldsmith. Mr. Goldsmith joined the Company in 1988 and has served
as Chairman, Director and Chief Executive Officer of the Company, Chief
Executive Officer of Tucker Anthony and Chairman of Sutro since that time. Prior
to joining the Company, Mr. Goldsmith served in various capacities at Prescott,
Ball & Turben in Cleveland, Ohio, including as managing partner and Chief
Executive Officer from 1978 to 1982 and as President and Chief Executive Officer
from 1982 to 1988. Mr. Goldsmith worked in the institutional sales department of
L.F. Rothschild from 1963 to 1971.

Robert H. Yevich. Mr. Yevich joined Tucker Anthony in 1985 and served as
National Sales Manager until being elected to the Board of Directors of the
Company and promoted to President of Tucker Anthony in 1995. Mr. Yevich has 24
years of varied experience in the retail brokerage business as a stockbroker,
branch manager and research associate. Prior to joining Tucker Anthony, Mr.
Yevich served as branch manager with Paine Webber.

John F. Luikart. Mr. Luikart joined Sutro in 1988 as President and was
responsible for directing all of the firm's capital markets activities. Mr.
Luikart was subsequently elected to the Board of Directors of the Company and
appointed Chief Executive Officer of Sutro in October 1995. Prior to joining
Sutro, Mr. Luikart served as General Partner and Executive Vice President at
Prescott, Ball & Turben in Cleveland, Ohio. Mr. Luikart is a former Chairman of
the NASD District Business Conduct Committee and is a member of the NYSE
Regional Firm Advisory Committee.

Henry Greenleaf. Mr. Greenleaf is the President and Chief Executive
Officer of Freedom Capital Management. Prior to joining Freedom in 1997, he was
Vice President and Senior Portfolio Manager with The Glenmede Trust Company.
From 1995 to 1997, he was a Principal and Chief Investment Officer with the
investment counseling firm of Resources Management Corporation/Asset Management
Partners of Farmington, Connecticut. Earlier, he was President and Chief
Investment Officer of HT Investors, Inc. and Senior Vice President of Rhode
Island Hospital Trust National Bank. Mr. Greenleaf also served as portfolio
manager for the Phoenix Mutual Life Insurance Company and The Aetna Life and
Casualty Company.

William C. Dennis, Jr. Mr. Dennis was elected Executive Vice President and
Chief Financial Officer of the Company in May, 1997. Prior to joining the
Company, he was a Director and Chief Financial Officer of Rodman & Renshaw
Capital Group, Inc., a financial services firm, from 1996 to 1997. Previously,
Mr. Dennis was a managing director of MIS, Inc., a database management company,
and prior to joining MIS, Inc. he was Chief Financial Officer of the Capital
Markets Sector of Merrill Lynch & Co., Inc. Earlier in his career, Mr. Dennis
was a senior financial executive of Exxon Corporation.

45
<PAGE> 47

Kevin J. McKay. Mr. McKay joined the Company in 1994 and has served as
General Counsel and Secretary since that time. Prior to joining the Company, Mr.
McKay was General Counsel of Prudential Securities, Inc. from 1990 to 1994. Mr.
McKay has over 19 years of experience in the legal and compliance field of the
securities industry. Mr. McKay is a past President of the Compliance & Legal
Division of the Securities Industry Association.

Gregory N. Thomas. Mr. Thomas joined the Company as Executive Vice
President in December 1997 and was elected to the Board of Directors in January
1998. Prior to joining the Company, Mr. Thomas served as President of ShadowWood
Corporation, a private real estate investment company. In 1997, Mr. Thomas also
served as an Adjunct Professor in the School of Business and Economics at the
College of Charleston. Previously, Mr. Thomas was a general partner of William
Blair & Company. Mr. Thomas is currently a director of Obermeyer Asset
Management Company.

David V. Harkins. Mr. Harkins was elected to the Board of Directors of the
Company in 1996. He has been affiliated with THL since its founding in 1974 and
joined THL as a full time employee in 1986. Mr. Harkins is Chairman of the Board
of National Dentex Corporation and is a director of First Alert, Inc., First
Security Services, Inc., Fisher Scientific International, Inc., HomeSide, Inc.,
Stanley Furniture Company, Inc. and Syratech Corp. Mr. Harkins also serves as
Senior Vice President and Trustee of Thomas H. Lee Advisors I, and T.H. Lee
Mezzanine II, affiliates of ML-Lee Acquisition Fund, L.P., and the ML-Lee
Acquisition Fund II, L.P., respectively.

C. Hunter Boll. Mr. Boll was elected to the Board of Directors of the
Company in 1996. He joined THL in 1986. From 1984 through 1986, Mr. Boll was
with The Boston Consulting Group. From 1977 through 1982, he served as an
Assistant Vice President, Energy and Minerals Division of Chemical Bank. Mr.
Boll is a Director of Big V Supermarkets, Inc., New York Restaurant Group,
Select Beverages, Inc., Stanley Furniture Company, Inc. and TransWestern
Publishing, L.P. Mr. Boll is also a Vice President of Thomas H. Lee Advisors I,
T.H. Lee Mezzanine II, and the Administrative General Partner of Thomas H. Lee
Advisors II, L.P., which is also affiliated with the ML-Lee Acquisition Fund II,
L.P.

Thomas M. Hagerty. Mr. Hagerty was elected to the Board of Directors of
the Company in 1996. He joined THL in 1988. Prior to joining THL, Mr. Hagerty
was in the Mergers and Acquisitions Department of Morgan Stanley & Co.
Incorporated. Mr. Hagerty is a director of HomeSide, Inc., Select Beverages,
Inc., and Syratech Corp. Mr. Hagerty is also a Vice President of Thomas H. Lee
Advisors I, T.H. Lee Mezzanine II, and the Administrative General Partner of
Thomas H. Lee Advisors II, L.P., which is also affiliated with the ML-Lee
Acquisition Fund II, L.P.

Seth W. Lawry. Mr. Lawry was elected to the Board of Directors of the
Company in 1996. He worked at THL from 1989 to 1990 and rejoined in 1994. From
1987 to 1989 and 1992 to 1994, Mr. Lawry worked at Morgan Stanley & Co.
Incorporated in the Mergers and Acquisitions, Corporate Finance and Equity
Capital Markets Departments. Mr. Lawry is a director of Safelite Glass Corp. and
Syratech Corp.

Winston J. Churchill. Mr. Churchill was elected to the Board of Directors
in 1996. Mr. Churchill joined SCP at its founding in 1996 as Managing General
Partner. Prior to joining SCP, Mr. Churchill formed CIP Capital, Inc., in 1990
and Churchill Investment Partners, Inc., in 1989. Mr. Churchill serves as
Chairman of the Boards of Geotek Communications, Inc., Central Sprinkler
Corporation, IBAH Inc., and Griffin Land and Nurseries, Inc. and as a director
of Fordham University, Georgetown University, and several other institutions.

The Company intends to elect two additional directors who are currently
unaffiliated with the Company within 180 days of the completion of the Offering.

46
<PAGE> 48

BOARD COMMITTEES

The Compensation Committee of the Board of Directors of the Company is
comprised of John H. Goldsmith, David V. Harkins, Thomas M. Hagerty and Winston
J. Churchill. The Audit Committee of the Board of Directors of the Company is
comprised of C. Hunter Boll, Seth W. Lawry, and Winston J. Churchill.

ELECTION AND COMPENSATION OF DIRECTORS

Each director of the Company holds office until his successor has been duly
elected and qualified. Directors of the Company are elected annually by the
stockholders of the Company. Officers of the Company are elected by the Board of
Directors of the Company at each annual meeting of the Board of Directors and
serve at its discretion. The current directors of the Company receive no
compensation for serving as directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Harkins, Boll, Hagerty and Lawry are employed by THL, Mr. Churchill
is employed by SCP and the other directors of the Company are employed by the
Company. THL, SCP and those directors who are employed by the Company have each
been involved in transactions with the Company. See "Certain Transactions."

EXECUTIVE COMPENSATION

The following table sets forth the compensation earned by the Company's
Chief Executive Officer and each of the Company's four other most highly
compensated executive officers (collectively, the "Named Executive Officers")
during the year ended December 31, 1997:

SUMMARY COMPENSATION TABLE(1)

<TABLE>
<CAPTION> LONG-TERM
1997 COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------- ----------------------
OTHER
ANNUAL SECURITIES ALL OTHER
COMPEN- UNDERLYING COMPEN-
SALARY BONUS SATION OPTIONS SATION
NAME AND PRINCIPAL POSITION ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
John H. Goldsmith................................ 400,000 (2) (5) 30,000 38,395(3)
Chairman, Director and Chief Executive Officer
William C. Dennis, Jr. (4)....................... 350,000 (2) -- 20,000 --
Chief Financial Officer
Kevin J. McKay................................... 300,000 (2) (5) 16,000 --
General Counsel and Secretary
Robert H. Yevich................................. 300,000 (2) (5) 24,500 --
Director and President of Tucker Anthony
John F. Luikart.................................. 250,000 (2) (5) 24,500 --
Director and Chief Executive Officer of Sutro
</TABLE>

- - - - - - - - - - - - - - - ------------------------------

(1) Amounts shown reflect compensation earned in the period presented, although
payments earned in prior periods may have been paid in the period presented
and compensation earned in the period presented may have been paid in a
subsequent period.

(2) Not yet determined. Messrs. Goldsmith and Dennis are entitled to certain
minimum compensation. See "Certain Transactions."

(3) Payment of insurance premiums.

(4) The amount presented in the table above includes a $250,000 forgivable loan.
Mr. Dennis' employment began May 12, 1997 and his effective annual base
salary rate is $400,000.

(5) Amount does not exceed lesser of $50,000 or 10% of compensation.

47
<PAGE> 49

The following table sets forth certain information regarding the option
grants made during Fiscal 1997 to each of the Company's named executive officers
in the Summary Compensation Table above. The Company issued no stock
appreciation rights in 1997.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------------------------- VALUE
PERCENT OF AT ASSUMED ANNUAL
TOTAL RATES
OPTIONS OF STOCK PRICE
NUMBER OF GRANTED TO MARKET APPRECIATION FOR
SECURITIES EMPLOYEES VALUE ON OPTION
UNDERLYING IN EXERCISE OR DATE OF TERM(1)
OPTIONS FISCAL YEAR BASE PRICE GRANT EXPIRATION --------------------
NAME GRANTED (#) (%) ($/SHARE) ($/SHARE) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C>
John H. Goldsmith... 9,900 10.00 10.00 01/31/07 62,261 157,781
20,100 10.00 10.00 05/31/06 116,014 288,746
------
30,000 2.54
------
William C. Dennis,
Jr................ 6,600 10.00 11.48 05/01/07 57,418 130,523
13,400 10.00 11.48 05/31/06 105,638 231,751
------
20,000 1.69
------
Kevin J. McKay...... 5,280 10.00 10.00 01/31/07 33,206 84,150
10,720 10.00 10.00 05/31/06 61,874 153,998
------
16,000 1.35
------
Robert H. Yevich.... 8,085 10.00 10.00 01/31/07 50,846 128,854
16,415 10.00 10.00 05/31/06 94,745 235,809
------
24,500 2.07
------
John F. Luikart..... 8,085 10.00 10.00 01/31/07 50,846 128,854
16,415 10.00 10.00 05/31/06 94,745 235,809
------
24,500 2.07
------
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) In accordance with the rules of the Commission, shown are the gains or
"option spreads" that would exist for the respective options granted. These
gains are based on the assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the option was granted over the
full option term. These assumed annual compound rates of stock price
appreciation are mandated by the rules of the Commission and do not
represent the Company's estimate or projection of future Common Stock
prices.

48
<PAGE> 50

Year End Option Table. The following table sets forth information
regarding exercise of options and the number and value of options held at
December 31, 1997, by each of the Company's named executive officers in the
Summary Compensation Table above:

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUE

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT MONEY OPTIONS AT
ACQUIRED FISCAL YEAR END FISCAL YEAR-END(1)
ON VALUE ----------------------------- --------------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
John H. Goldsmith........ -- -- 6,000 24,000
William C. Dennis, Jr.... -- -- 4,000 16,000
Kevin J. McKay........... -- -- 3,200 12,800
Robert H. Yevich......... -- -- 4,900 19,600
John F. Luikart.......... -- -- 4,900 19,600
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
(1) Value is based on the difference between the option exercise price and the
initial public offering price of the Common Stock multiplied by the number
of shares of Common Stock underlying the option. No market existed for the
Common Stock prior to this Offering.

STOCK OPTION AND STOCK PURCHASE PLANS

1996 Stock Option Plan. The 1996 Stock Option Plan (the "1996 Plan")
provides for the granting of incentive stock options and non-qualified options
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), to employees of the Company. The 1996 Plan is administered by either
the Company's Board of Directors ("the Board") or a committee (the "Committee")
comprised of members of the Board to which the Board may delegate its
administrative duties and authority. The Committee (i) interprets and applies
the 1996 Plan; (ii) determines the eligibility of an individual to participate
in the 1996 Plan; (iii) approves the assignment of options immediately prior to
the registration of the Company's stock pursuant to the 1934 Act if such
assignment would increase the number of Common Stock holders; and (iv)
determines and allocates the cancellation or exchange of outstanding options in
the case of a recapitalization, acquisition, merger or Change in Control. No
director or officer of the Company is eligible for such options unless such
director or officer is also an employee. No options may be granted to an
employee that, at the time of the grant, owns more than 10% of the voting power
or greater than 10% of each class of the Company's outstanding stock, unless the
purchase price for the purchase of the stock is not less than 110% of the
stock's fair market value on the date of the grant and the option, by its terms,
shall not be exercisable more than five years from the date it is granted.

The Company has authorized the issuance of options for up to 1,200,000
shares of the Company's Common Stock under the 1996 Plan. Matured options may be
exercised in full at one time or in part from time to time and the payment of
the exercise price may be made by delivery of (i) cash or a check payable to the
order of the Company in an amount equal to the exercise price of such options;
(ii) shares of Common Stock of the Company owned by the optionee having a fair
market value equal in amount to the exercise price of the options being
exercised; (iii) the cancellation of shares covered by this Option which are
then vested and exercisable having a fair market value equal in amount to the
purchase price of the shares being purchased; (iv) at the sole discretion of the
Committee, a promissory note; or (v) any combination of (i), (ii), (iii) and
(iv); provided, however, that payment of the exercise price by delivery of
shares of Common Stock of the Company owned by such optionee or cancellation of
shares covered by the option may be made only with the consent of the Committee
if such payment results in a charge to earnings for financial accounting
purposes as determined by the Committee. The Company may delay the issuance of
shares covered by the exercise of an option until (a) the shares for which such
option has been exercised have been registered or qualified under the applicable
federal or state securities laws or (b) counsel for the Company has opined that
such shares are exempt from the registration requirements of such federal or
state securities laws.

49
<PAGE> 51

The term of any option granted under the 1996 Plan shall be limited to ten
years. Upon the termination of an optionholder's employment with the Company,
such options shall terminate between 30 and 180 days after that optionholder
leaves the employ of the Company. All options under the 1996 Plan may only be
assigned to the spouse and children of the optionholder or by will or law of
descent.

As of December 31, 1997, options to purchase 1,181,256 shares were granted
under the 1996 Plan of which options to purchase 253,262 shares vest based on
time at the rate of 20% per year for five years following the date of grant and
options to purchase 927,994 shares vest on the sixth anniversary of the date of
grant, of which options to purchase 513,994 shares are subject to accelerated
vesting based on certain performance thresholds tied to the Company's operations
and options to purchase 414,000 shares are subject to accelerated vesting based
on individual performance (none of which have been granted to the Company's
executive officers). All of the outstanding options have an exercise price of
$10.00 per share. The following options under the 1996 Plan have been granted to
the executive officers of the Company:

<TABLE>
<CAPTION>
TIME-VESTED COMPANY PERFORMANCE
OPTIONS OPTIONS
<S> <C> <C>
John H. Goldsmith..................................... 9,900 20,100
William C. Dennis, Jr. ............................... 6,600 13,400
Kevin J. McKay........................................ 5,280 10,720
Robert H. Yevich...................................... 8,085 16,415
John F. Luikart....................................... 8,085 16,415
Henry Greenleaf....................................... 2,475 5,025
</TABLE>

1998 Long-Term Incentive Plan. The Company's 1998 Long-Term Incentive Plan
(the "1998 Plan") provides for the granting of stock options, SARs, restricted
stock and long-term performance awards, in each case on such terms and to such
officers and other key employees as the administrators of the 1998 Plan may
select. The 1998 Plan is administered by the Board of Directors of the Company
during such time as the Company's Common Stock is publicly traded. A total of
shares of the Common Stock have been reserved for issuance under the
1998 Plan.

The maximum number of stock options, SARs or shares of restricted stock
that can be granted at any time shall equal shares reduced by the sum
(without duplication) of: the number of shares of Common Stock subject to
outstanding awards under the 1998 Plan, the number of shares of Common Stock in
respect of which awards have been exercised, and the number of shares of Common
Stock issued without forfeiture or similar restrictions or issued with
forfeiture or similar restrictions which have lapsed, and increased by the
number of shares of Common Stock delivered or withheld in payment of the
exercise price, purchase price or tax withholding requirements of an award
granted under the 1998 Plan. Unless specifically consented to by the
administrators of the 1998 Plan, shares may not be delivered or withheld in
payment of the exercise price, purchase price or tax withholding requirements of
an award granted under the 1998 Plan if such payment would result in a charge to
earnings for financial accounting purposes. The maximum number of stock options,
SARs or shares of restricted stock that can be granted to any one participant in
any one plan year is . Stock options awarded under the 1998. Plan
may either be "incentive stock options" as defined in Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code") or non-qualified stock
options. The term of each stock option shall be fixed by the administrators of
the 1998 Plan, but no incentive stock option shall be exercisable for a period
of more than ten years from the date the option is granted and any option
granted to any optionee who, at the time the option is granted, owns more than
10% of the voting power of all classes of capital stock of the Company or of a
subsidiary may not have a term of more than five years from the date of grant.
Upon receipt of written notice to exercise a stock option, the Company may, in
the administrators' sole discretion, elect to cash out all or part of the option
to be exercised by paying the optionee an amount, in cash or Common Stock, equal
to the excess of the fair market value of the Common Stock over the option price
on the effective date of such cashout. Restricted stock under the 1998 Plan
shall be awarded for nominal or no consideration on behalf of the recipient.

The 1998 Plan contains provisions intended to comply with Section 162(m) of
the Code. During such time Section 162(m) of the Code or any successor provision
is in effect, the maximum value any participant

50
<PAGE> 52

subject to the provisions of Section 162(m) may receive in any calendar year
under the 1998 Plan will be $2 million multiplied by the number of years in the
relevant measuring period, but in no event more than $5 million, and the maximum
annual amount that may be paid to a participant under the 1998 Plan for (i) the
year in which the 1998 Plan is implemented shall equal no more than $2 million,
and (ii) each subsequent year shall equal 110% of such maximum amount for the
preceding year; provided that the maximum annual amount determined under this
provision shall be determined without regard to the value of any stock options
granted to a participant under the 1998 Plan.

The 1998 Plan provides that in the event of a Change in Control of the
Company (i) SARs and stock options awarded under the 1998 Plan not previously
exercisable and vested which have been held for at least six months from the
date of grant shall become fully vested and exercisable; (ii) the restrictions
applicable to any restricted stock awards under the 1998 Plan shall lapse and
such shares and awards shall be deemed fully vested and (iii) any outstanding
long-term performance awards shall be vested and paid out based on the pro rated
target results for the performance period relating to such awards, unless the
administrators of the 1998 Plan provide at or after grant and prior to the
Change in Control for a different payment. The value of outstanding stock
options, SARs and restricted stock awards shall, unless otherwise determined by
the administrator of the 1998 Plan at or after grant, be cashed out on the basis
of the Change in Control Price. "Change in Control" is defined as the happening
of any of the following: (i) when any "person" as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company or a subsidiary or
employee benefit plan of the Company) who is not the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing % or more of the combined voting power
of the Company's outstanding securities on the effective date of the 1998 Plan
is or becomes the beneficial owner, directly or indirectly, of securities of the
Company representing % or more of the combined voting power of the
Company's outstanding securities without the consent of the Board of Directors
of the Company; (ii) the occurrence of any transaction or event relating to the
Company required to be described pursuant to the requirements of item 6(e) of
Schedule 14A of the Exchange Act; (iii) when, during any period of two
consecutive years during the existence of the 1998 Plan, the individuals who, at
the beginning of such period, constitute the Board of Directors of the Company
cease for any reason other than death to constitute a majority thereof,
provided, however, that a director who is not a director at the beginning of
such period shall be deemed to have satisfied the two-year requirement if such
director was elected by, or on the recommendation of, at least a majority of the
directors who were directors at the beginning of such period (either actually or
by prior operation of this clause (iii)); or (iv) the occurrence of a
transaction requiring stockholder approval for the acquisition of the Company by
an entity other than the Company through purchase of assets, or by merger or
otherwise in which stockholders holding more than 50% of the equity interest of
the surviving entity in such transaction were not stockholders of the Company
prior to such transaction. The "Change in Control Price" is defined as the
highest sales price per share of Common Stock paid or offered in any bona fide
transaction relating to a Change in Control of the Company, as determined by the
administrators of the 1998 Plan. The 1998 Plan provides that no payment shall be
made in connection with a Change in Control which, when aggregated with other
payments made to the employee would, as determined by such persons as the
administrators of the 1998 Plan shall irrevocably designate at or prior to a
Change in Control, result in an "excess parachute payment" for which the Company
would not receive a federal income tax deduction by reason of Section 280G of
the Code.

The administrators of the 1998 Plan may amend, alter or discontinue the
1998 Plan at any time and from time to time, but no alteration or
discontinuation shall be made which would impair the rights of an optionee or
participant with respect to an award which has been granted under the 1998 Plan
without the optionee's or participant's consent. In addition, without the
approval of the Company's stockholders, the administrators of the 1998 Plan may
not make any such amendment which would, except in connection with stock splits,
dividends or similar recapitalizations of the Company, increase the total number
of shares reserved for purposes of the 1998 Plan, change the employees or class
of employees eligible to participate in the 1998 Plan or extend the maximum
option period applicable to incentive stock options granted under the 1998 Plan.

51
<PAGE> 53

The other terms and conditions of awards under the 1998 Plan, including
vesting provisions, term and exercisability of the awards, shall be as
determined by the administrators of the 1998 Plan. No awards have been granted
under the 1998 Plan.

1998 STOCK PURCHASE PLAN

The Company's 1998 Employee Stock Purchase Plan (the "1998 Purchase Plan")
authorizes the issuance of a maximum of shares of Common Stock
pursuant to the exercise of nontransferable options granted to participating
employees.

The 1998 Purchase Plan is administered by the Compensation Committee. All
employees of the Company whose customary employment is hours or more per
week and have been employed by the Company for at least months are eligible to
participate in the 1998 Purchase Plan. Employees who own 5% or more of the
Company's stock, directors who are not employees of the Company and persons
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934 may not participate in the 1998 Purchase Plan. To
participate in the 1997 Purchase Plan an employee must authorize the Company in
writing to deduct an amount (not less than 1% nor more than 10% of a
participant's base compensation) from his or her pay commencing on January 1 and
July 1, of each year (each a "Purchase Period"), commencing July 1, 1998. On the
first day of each Purchase Period, the Company grants to each participating
employee an option to purchase up to that number of shares of Common Stock, the
fair market value of which on the date of grant equals $25,000. The exercise
price for the option for each Purchase Period is % of the fair market value
of the Common Stock on the first or last business day of the Purchase Period,
whichever is lower. During such time as the Common Stock is listed on the NYSE,
the fair market value will be the closing selling price of the Common Stock on
the NYSE. If an employee is not a participant on the last day of the Purchase
Period, such employee is not entitled to exercise his or her option, and the
amount of his or her accumulated payroll deduction will be refunded to the
employee. An employee's rights under the 1998 Purchase Plan terminate upon his
or her voluntary withdrawal from the Plan at any time or upon termination of
employment.

Common Stock for the 1998 Purchase Plan will be made available either from
authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Company, including shares repurchased in the open market.

1998 EXECUTIVE PERFORMANCE BONUS PLAN

Certain of the Company's executive officers and other key employees are
entitled to participate in the Company's 1998 Executive Performance Bonus Plan
(the "Bonus Plan"). The Bonus Plan shall be administered by a committee (the
"Committee") of the Board of Directors comprised, if possible, of directors who
qualify as "non-employee directors" within the meaning of Rule 16(b) promulgated
under Section 16 of the Exchange Act and as "outside directors" within the
meaning of Code Section 162(m) and the regulations promulgated thereunder. The
failure of a Committee member to qualify under these requirements shall not
invalidate any award otherwise made under the Bonus Plan. Amounts paid pursuant
to the Bonus Plan are intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code. The Bonus Plan provides that
the Committee will establish an award pool from which awards may be paid to
eligible employees in accordance with the Bonus Plan. The amount included in the
award pool for any particular performance period shall be equal to a percentage
of pre-tax operating income of the Company (as defined) for the performance
period before provision for incentive compensation and extraordinary items,
which percentage shall be determined by the Committee and shall not exceed
%. Within ninety days following the commencement of each performance
period, the Committee shall allocate in writing, on behalf of each participant,
a portion of the award pool, if any, to be paid for such performance period;
provided in no event shall the percentage portion of the award pool allocated to
any participant exceed % of the award pool. The Committee is authorized at
any time during or after a performance period, in its sole discretion, to reduce
or eliminate (but not increase) the award pool or a portion of the award pool
allocated to any participant for any reason, including changes in the position
or duties of any participant with the Company during the performance period,
whether due to termination of employment or otherwise. Participants are

52
<PAGE> 54

entitled to receive payment under the Bonus Plan in cash as soon as practicable
after the total amount of the award pool and the awards payable to each
participant are determined. In the discretion of the Committee, partial payments
may be made to participants during the course of a performance period; provided
that the aggregate of such partial payments may not exceed the amount of the
award that a participant would otherwise receive pursuant to the Bonus Plan. The
Board of Directors of the Company may at any time terminate, suspend or modify
the Bonus Plan and the terms and conditions of any award thereunder that has not
been paid. No award may be granted under the Bonus Plan during any period of
suspension or after its termination. Amendments of the Bonus Plan are subject to
the approval of the stockholders of the Company only if such approval is
necessary to maintain the Bonus Plan in compliance with the requirements of
Section 162(m) of the Code, or any other applicable law or regulation. No awards
have yet been made under the Bonus Plan.

LIMITATION OF LIABILITY; INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by the Delaware General Corporation Law, the Company has
included in its Charter a provision to eliminate the personal liability of its
directors for monetary damages for breach or alleged breach of their fiduciary
duties as directors, subject to certain exceptions. In addition, the Bylaws of
the Company provide that the Company is required to indemnify its officers and
directors under certain circumstances, including those circumstances in which
indemnification would otherwise be discretionary, and the Company is required to
advance expenses to its officers and directors as incurred in connection with
proceedings against them for which they may be indemnified. The Company has also
agreed to indemnify its directors and certain officers to the maximum extent
permitted by Delaware law pursuant to agreements with such directors and
officers. At present, the Company is not aware of any pending or threatened
litigation or proceeding involving a director, officer, employee or agent of the
Company in which indemnification would be required or permitted. The Company
believes that its charter provisions and indemnification agreements are
necessary to attract and retain qualified persons as directors and officers.

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<PAGE> 55

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of December 31, 1997, and as adjusted
to reflect the sale of the Common Stock offered hereby by: (i) each person who
is known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock; (ii) each of the Company's directors; (iii) each of the
Selling Stockholders; (iv) each named executive officer, and (v) all directors
and executive officers as a group. Except as otherwise specified below, the
persons named in the table below have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.

<TABLE>
<CAPTION>
BENEFICIAL BENEFICIAL OWNERSHIP
OWNERSHIP PRIOR AFTER
TO THE OFFERING(1) THE OFFERING(1)
--------------------- NUMBER OF ---------------------
NUMBER OF SHARES BEING NUMBER OF
NAME OF BENEFICIAL OWNER(1) SHARES PERCENT OFFERED SHARES PERCENT
<S> <C> <C> <C> <C> <C>
Thomas H. Lee Equity Fund III,
L.P.(2).............................. 3,425,778 42.3%
Thomas H. Lee Foreign Fund III,
L.P.(2).............................. 211,977 2.6
THL-CCI, L.P. ......................... 355,365 4.4
SCP Private Equity L.P. ............... 998,280 12.3
John Hancock Subsidiaries, Inc.(3) .... 410,901 5.1
John H. Goldsmith(4)................... 66,000 * -- 66,000
William C. Dennis, Jr.(5) ............. 54,000 * -- 54,000
Kevin J. McKay(6)...................... 43,200 * -- 43,200
Robert H. Yevich(7).................... 59,600 * -- 59,600
John F. Luikart(8)..................... 59,600 * -- 59,600
Gregory N. Thomas...................... 50,000 * -- 50,000
David V. Harkins(9).................... 3,993,120 49.3
C. Hunter Boll(10)..................... 3,993,120 49.3
Thomas M. Hagerty(11).................. 3,993,120 49.3
Seth W. Lawry(12)...................... 3,993,120 49.3
Winston J. Churchill(13)............... 998,280 12.3
All Directors and Executive Officers as
a Group (12 persons, including the
above)............................... 5,331,300 65.6%
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
* Less than one percent

(1) Beneficial ownership is determined in accordance with rules of the
Commission and includes general voting power or investment power with
respect to securities. Shares of Common Stock subject to options and
warrants currently exercisable or exercisable within sixty (60) days of
December 31, 1997 are deemed outstanding for computing the percentage of
the person holding such options, but are not deemed outstanding for
computing the percentage of any other person. Unless otherwise indicated,
the address of each of the beneficial owners identified is One Beacon
Street, Boston, MA 02108.

(2) Each of THL Equity Advisors III, L.P. ("Advisors III"), the general partner
of Thomas H. Lee Equity Fund III, L.P. and Thomas H. Lee Foreign Fund III,
L.P., and THL Equity Trust III, the general partner of Advisors III, also
may be deemed to be beneficial owners of the 3,425,778 shares of Common
Stock held by Thomas H. Lee Equity Fund III, L.P. and the 211,977 shares of
Common Stock held by Thomas H. Lee Foreign Fund III, L.P. Each of Advisors
III and THL Equity Trust III disclaim beneficial ownership of such shares.
Each of Advisors III and THL Equity Trust III maintains a principal
business address c/o Thomas H. Lee Company, 75 State Street, Boston, MA
02109.

(3) Includes 16,247 shares Hancock has the right to acquire within 60 days.
Excludes shares issuable under the Additional Share Agreement. See "Certain
Transactions -- The Acquisition -- Additional Share Agreement." Hancock
maintains a principal business address at 200 Clarendon Street, Boston, MA
02116.

(4) Includes 6,000 shares of Common Stock which Mr. Goldsmith has the right to
acquire pursuant to the 1996 Stock Plan.

(5) Includes 4,000 shares of Common Stock which Mr. Dennis has the right to
acquire pursuant to the 1996 Stock Plan.

(6) Includes 3,200 shares of Common Stock which Mr. McKay has the right to
acquire pursuant to the 1996 Stock Plan.

(7) Includes 4,900 shares of Common Stock which Mr. Yevich has the right to
acquire pursuant to the 1996 Stock Plan.

(8) Includes 4,900 shares of Common Stock which Mr. Luikart has the right to
acquire pursuant to the 1996 Stock Plan.

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<PAGE> 56

(9) Includes the shares of Common Stock held by Thomas H. Lee Equity Fund III,
L.P., Thomas H. Lee Foreign Fund III, L.P. and THL-CCI, L.P. ("THL-CCI"),
which Mr. Harkins may be deemed to beneficially own by virtue of his
position as a Trustee of THL Equity Trust III and officer of THL Investment
Management Corp., the general partner of THL-CCI. Mr. Harkins disclaims
beneficial ownership of such additional shares. Mr. Harkins maintains his
principal business address c/o Thomas H. Lee Company, 75 State Street,
Boston, MA, 02109.

(10) Includes the shares of Common Stock held by Thomas H. Lee Equity Fund III,
Thomas H. Lee Foreign Fund III, L.P. and THL-CCI, which Mr. Boll may be
deemed to beneficially own by virtue of his position as officer of each of
THL Equity Trust III and THL Investment Management Corp. Mr. Boll disclaims
beneficial ownership of such additional shares. Mr. Ball maintains his
principal business address c/o Thomas H. Lee Company, 75 State Street,
Boston, MA 02109.

(11) Includes the shares of Common Stock held by Thomas H. Lee Equity Fund III,
L.P., Thomas H. Lee Foreign Fund III, L.P. and THL-CCI, which Mr. Hagerty
may be deemed to beneficially own by virtue of his position as officer of
each of THL Equity Trust III and THL Investment Management Corp. Mr.
Hagerty disclaims beneficial ownership of such additional shares. Mr.
Hagerty maintains his principal business address c/o Thomas H. Lee Company,
75 State Street, Boston, MA, 02109.

(12) Includes the shares of Common Stock held by Thomas H. Lee Equity Fund III,
L.P., Thomas H. Lee Foreign Fund III, L.P. and THL-CCI, which Mr. Lawry may
be deemed to beneficially own by virtue of his position as officer of each
of THL Equity Trust III and THL Investment Management Corp. Mr. Lawry
disclaims beneficial ownership of such additional shares. Mr. Lawry
maintains his principal business address c/o Thomas H. Lee Company, 75
State Street, Boston, MA, 02109.

(13) Mr. Churchill also may be deemed to be the beneficial owner the shares of
Common Stock held by SCP Private Equity L.P. by virtue of his position as
officer of the general partner of SCP Private Equity, L.P. Mr. Churchill
disclaims beneficial ownership of such additional shares. Mr. Churchill
maintains his principal business address c/o SCP Private Equity, L.P., 800
The Safeguard Building, 435 Devon Park Drive, Wayne, PA, 19087.

55
<PAGE> 57

CERTAIN TRANSACTIONS

THE ACQUISITION

On November 29, 1996, the Acquisition was completed pursuant to the terms
of the Contribution Agreement, dated October 4, 1996 (the "Contribution
Agreement").

Under the terms of the Contribution Agreement, THL, SCP and approximately
350 employee investors (the "Employee Investors") contributed to the Company an
aggregate of $75,000,000 in exchange for shares representing approximately 95%
of the then outstanding shares of the Company. THL contributed $39,931,200 in
exchange for approximately 51%. SCP contributed $9,982,800 in exchange for
approximately 13%, and the Employee Investors contributed an aggregate of
$25,086,000 in exchange for approximately 31%. Hancock contributed 100% of the
outstanding capital stock of the Predecessor Company to the Company in exchange
for $180,000,000 in cash and 4.999% of the Company's outstanding capital stock.
The consideration paid to Hancock was financed with the $75,000,000 equity
contribution of THL, SCP and the Employee Investors, $85,000,000 of Bank
Financing and $20,000,000 of excess cash of the Company. In connection with the
Acquisition, the Company also repaid its existing debt to Hancock totaling
approximately $32,400,000. Approximately $25,800,000 of the debt was paid with
bank financing and approximately $6,600,000 was paid from excess cash of the
Company.

Under the terms of the Contribution Agreement and a Tax Matters Agreement
(the "Tax Matters Agreement") entered into at the closing of the Acquisition,
each of the Company and Hancock agreed to indemnify the other party for breaches
of representations, warranties and covenants contained in the Contribution
Agreement, and Hancock has agreed to indemnify the Company for certain specified
matters. Each party's right to indemnification for breaches of any
representations and warranties contained in the Contribution Agreement survives
the closing until April 1, 1998, with the exception of certain representations
and warranties relating to authorization, validity and title to shares which
continue beyond such date. In addition, indemnification for breaches of certain
covenants contained in the Contribution Agreement, such as confidentiality and
non-competition, survive beyond April, 1998. With respect to most other claims,
if any, based on breaches of representations or warranties, a party providing
indemnification is liable for all of the other party's losses in excess of $1.75
million. Hancock's liability for all indemnification obligations under the
Contribution Agreement is limited to $30 million, except with respect to
representations regarding capitalization and share ownership and certain
covenants. In addition, the Chief Executive Officer of the Company agreed in a
separate agreement to contribute towards Hancock's indemnification obligations
for breaches of certain representations one-third of any amounts paid by Hancock
up to a maximum of $250,000.

The Contribution Agreement provides that following the closing of the
Acquisition, the Company and its affiliates have the exclusive right to use all
names incorporating "Freedom", "Tucker Anthony" or "Sutro" or to use the
Freedom, Tucker Anthony or Sutro logos. Hancock agreed to cause the mutual funds
managed by its affiliates to change their names to exclude the words "Freedom,"
"Tucker Anthony" or "Sutro" from their names and to no longer use any such names
or confusingly similar names, subject to the continuation of the use of the
"Freedom" name by Hancock for a period ending April 30, 1998 for certain
purposes relating to mutual funds advised by its affiliates. In addition, the
Company agreed that after the closing date of the Acquisition the Company and
its affiliates would not have any right to use names incorporating "John
Hancock" or use any John Hancock logo, and the Company agreed to discontinue the
use of any such names and logos, provided that the Company has no liability to
Hancock for any incidental or accidental use of such names for a twelve month
period following the closing date if it is attempting in good faith to
discontinue such use and does so when it becomes aware of such use.

In connection with the Acquisition, the Company and certain of its
stockholders entered into certain agreements described below affecting the
rights and obligations of the Company and its affiliates.

Tax Matters Agreement. Pursuant to the Tax Matters Agreement, the Company
assumed responsibility for all federal, state and local taxes of the Company
beginning in 1996, exclusive of (i) 50% of any sales or transfer taxes triggered
by the Acquisition and (ii) certain taxes for which Hancock has agreed to
indemnify the Company. Amounts paid by the Company in respect of its obligations
under the Tax Matters Agreement

56
<PAGE> 58

were treated by Hancock and the Company as an adjustment to the amount received
by Hancock pursuant to the Contribution Agreement.

Transition Services Agreement. At the closing of the Acquisition, the
Company and Hancock entered into a Transition Services Agreement (the
"Transition Services Agreement") pursuant to which, among other things, the
parties have provided for the continuation for specified periods of time of
certain services historically provided by Hancock to the Company and its
subsidiaries. These services included certain employee benefits and insurance
coverage, which are no longer provided, and access to telephone service rates
which is expected to continue until August 2000.

Additional Share Agreement. Upon consummation of the Acquisition, the
Company entered into an Additional Share Agreement with Hancock pursuant to
which Hancock is entitled to receive, for no additional consideration, up to
48,740 shares of Common Stock in connection with the issuance of shares pursuant
to any incentive stock plan adopted by the Company prior to November 29, 1998.

STOCKHOLDERS AGREEMENT

The Stockholders Agreement among certain of the existing stockholders of
the Company (the "Stockholders Agreement") provides that THL may require the
Company to effect the registration of shares of Common Stock held by THL for
sale to the public on two occasions, subject to certain limitations. The
Stockholders Agreement further provides that, at any time following the first
offering of the Common Stock of the Company to the public, SCP may require the
Company to effect the registration of shares of Common Stock held by SCP for
sale to the public and after the second offering, the employees party to such
agreements may require the Company to effect two such registrations. In
addition, under the terms of the Stockholders Agreement, if the Company proposes
to register any of its shares under the Securities Act, whether for its own
account or otherwise, any holders of the Company's registrable shares party to
the Stockholders Agreement are entitled to notice of such registration and are
entitled to include their shares therein, subject to certain conditions and
limitations. All fees, costs, and expenses (other than underwriting discounts
and commissions transfer taxes and attorneys' fees) of any registration effected
pursuant to the Stockholders Agreement, including this Offering, will be paid by
the Company. The Stockholders Agreement also grants certain "tag-along" rights
to the parties in the event THL enters into a single transaction to sell more
than 50% of the stock acquired by it in the Acquisition.

MANAGEMENT AGREEMENTS

In accordance with a management agreement entered into by the Company and
THL (the "Management Agreement"), the Company will pay THL an annual management
fee of $250,000 and reimburse any reasonable expenses incurred by THL in
performing such management services. The THL Management Agreement continues
until terminated by the mutual consent of the parties and terminates
automatically upon consummation of the Offering. In accordance with a Management
Agreement entered into by the Company and SCP (the "SCP Management Agreement"),
the Company will pay SCP an annual management fee of $62,500 and reimburse any
reasonable expenses incurred by SCP in performing such management services. The
SCP Management Agreement continues until terminated by the mutual consent of the
parties and terminates automatically upon consummation of the Offering.

EMPLOYMENT AGREEMENTS

Mr. Goldsmith is employed pursuant to a three year employment agreement
expiring on December 31, 1999 renewable annually thereafter. Mr. Goldsmith is
entitled to receive such annual base salary and bonus compensation as is agreed
to by Mr. Goldsmith and the Company from time to time, provided that he is
entitled to receive minimum cash compensation in any calendar year of at least
$750,000. Mr. Goldsmith is also entitled to participate in the employee benefit
and incentive compensation plans that the Company makes available to its key
executives. If Mr. Goldsmith's employment is terminated by the Company without
cause or if he resigns for certain enumerated reasons, ("Good Reason"), Mr.
Goldsmith is entitled to receive cash compensation at his then current rate of
pay and benefits through the end of the twenty-fourth month

57
<PAGE> 59

following such date of termination. Such amount shall be payable in a lump sum
amount equal to $500,000 at the time of termination with the remaining amounts
paid in equal monthly installments, plus interest. In addition, in the event of
any such termination, any unvested stock options granted to Mr. Goldsmith shall
become fully vested. If Mr. Goldsmith's employment is terminated for cause or if
he resigns other than for Good Reason, he shall be entitled to receive only that
compensation accrued through the date of termination. Mr. Goldsmith's employment
agreement contains a covenant not to solicit any of the Company's clients,
officers, senior managers or senior investment executives for a period of two
years following termination by the Company without cause or by Mr. Goldsmith for
Good Reason, or for a period of six months following termination by Mr.
Goldsmith for any other reason.

Mr. Thomas is employed pursuant to a two year employment agreement expiring
on December 3, 1999. Mr. Thomas is entitled to receive such annual base salary
and bonus compensation as is agreed to by Mr. Thomas and the Company from time
to time, provided that he is entitled to receive minimum cash compensation in
any calendar year of at least $700,000. Mr. Thomas is also entitled to
participate in the employee benefit and incentive compensation plans that the
Company makes available to its key executives. If Mr. Thomas' employment is
terminated by the Company without cause or if he resigns for Good Reason, Mr.
Thomas is entitled to receive cash compensation at his then current rate of pay
and benefits through the end of the twenty-fourth month following such date of
termination. Such amount shall be payable in a lump sum amount equal to $500,000
at the time of termination with the remaining amounts paid in equal monthly
installments, plus interest. In addition, in the event of any such termination,
any unvested stock options granted to Mr. Thomas shall become fully vested and
immediately exercisable. If Mr. Thomas' employment is terminated for cause or if
he resigns other than for Good Reason, he shall be entitled to receive only that
compensation accrued through the date of termination. Mr. Thomas' employment
agreement contains a covenant not to solicit any of the Company's clients,
officers, senior managers or senior investment executives for a period of two
years following termination by the Company without cause or by Mr. Thomas for
Good Reason, or for a period of six months following termination by Mr. Thomas
for any other reason.

Mr. Dennis is employed pursuant to a two year employment agreement with the
Company which expires May 11, 1999. Mr. Dennis is entitled to base salary of
$150,000 during the first year of employment and $400,000 during the second year
of employment. In addition, the Company loaned Mr. Dennis $250,000 upon
commencement of his employment which shall be forgiven on May 12, 1998 if he
remains employed by the Company on such date or is terminated without cause or
resigns for Good Reason prior thereto. He is entitled to minimum annualized
bonuses of $200,000 for 1997 and 1998, plus an additional $400,000 in the
aggregate if the Company attains certain performance targets in each of the
first two twelve month periods of his employment with the Company. Mr. Dennis is
eligible to receive additional merit bonuses as determined by the Board of
Directors of the Company. If, prior to May 12, 2001, Mr. Dennis' employment is
terminated by the Company without cause or if he resigns for Good Reason, he
shall be entitled to receive the greater of his salary and bonus compensation
through the end of his initial two year term of employment, if any, or $600,000.
If he is terminated for cause or resigns other than for Good Reason, Mr. Dennis
shall only be entitled to receive the compensation accrued up to the date of
termination or resignation. Mr. Dennis is also entitled to participate in the
Company's benefit and incentive plans to the same extent as any senior
management executive of the Company.

OTHER TRANSACTIONS WITH MANAGEMENT

Compensation and Benefits. The executive officers of the Company receive
compensation, bonuses and other benefits under various employee benefit plan
arrangements maintained by the Company and its subsidiaries. The executive
officers participated in such benefit plans under the same terms generally made
available to other similarly situated employees of the Company or its
subsidiaries with similar responsibilities and levels of compensation.

Outstanding Indebtedness. Certain executive officers and directors borrow
from time to time under margin accounts maintained at the Company's
subsidiaries. All such borrowings on margin are made in the ordinary course of
business, are made on substantially the same terms, including interest rates and
collateral,

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<PAGE> 60

as those prevailing for margin transactions with other persons at the time made
and do not involve more than the normal risk of collectibility or other
unfavorable features.

Investment Partnerships. Certain executive officers of the Company are the
limited partners of certain investment vehicles organized to allow these
employees to invest in funds and other investment vehicles sponsored by certain
of the Company's clients and on a co-investment basis in transactions in which
the Company's clients also invest (collectively, the "Employee Investment
Partnerships"). In certain instances, the Company lends to the limited partners
the amounts used by them to invest in the Employee Investment Partnerships.
Limited partnership interests owned by employees are subject to redemption by
the applicable Employee Investment Partnership if the employee terminates
employment with the Company for any reason during a three or, in certain
instances, four year period following his initial investment in the Employee
Investment Partnership at the lesser of (i) his paid-in capital contribution,
less distributions paid prior to such redemption, or (ii) the value of the
limited partnership interest. Such redemptions are made at the option of the
applicable Employee Investment Partnership. Any outstanding loans are also
callable by the Company at the time the limited partner ceases to be an employee
of the Company. Through December 31, 1997, the Employee Investment Partnerships
have invested $27.2 million in 44 investments and $22.9 million has been
contributed to date by the limited partners. The limited partners have received
distributions totaling $55.2 million through December 31, 1997, including $7.1
million, $23.1 million and $4.8 million during 1995, 1996 and 1997,
respectively. Amounts contributed to the Employee Investment Partnerships by
each of the Company's executive officers and distributions made during 1995,
1996 and 1997 and the outstanding balances of related loans made to them by the
Company as of December 31, 1997 are set forth below:

<TABLE>
<CAPTION>
AMOUNT DISTRIBUTIONS LOAN
NAME CONTRIBUTED MADE BALANCE
<S> <C> <C> <C>
John H. Goldsmith................................... $139,466 $333,333 $26,667
Gregory N. Thomas................................... -- -- --
William C. Dennis, Jr. ............................. -- -- --
Kevin J. McKay...................................... 140,416 51,593 86,861
Robert H. Yevich.................................... 113,065 238,239 26,667
John F. Luikart..................................... 75,194 13,944 40,678
Henry Greenleaf..................................... -- -- --
</TABLE>

TRANSACTIONS WITH HANCOCK PRIOR TO THE ACQUISITION

Prior to the Acquisition the Predecessor Company, Hancock and their
respective affiliates engaged in a variety of transactions in the ordinary
course of business. As a general rule, the Predecessor Company did not retain
independent third parties to evaluate transactions with Hancock and there was no
independent committee of the Board of Directors of the Predecessor Company to
evaluate such transactions. Notwithstanding this fact, the Company believes that
each of the arrangements described below was made on an arms-length basis. All
of the transactions or relationships described below were completed or
terminated at or prior to the time of the Acquisition. The Company anticipates
that future transactions with Hancock, if any, will be made on an arms-length
basis.

Loans, Advances and Dividends. The aggregate outstanding amount of
payables, primarily inter-company tax allocations and working capital financing,
between the Predecessor Company and Hancock and its affiliates was $233.7
million as of December 31, 1995 and $32.4 million as of November 29, 1996, which
was repaid in full in connection with the Acquisition. In addition, the
Predecessor Company paid dividends to Hancock in the amount of $5.8 million and
none, respectively, during 1995 and 1996.

Other Transactions with Hancock. As a wholly-owned subsidiary of Hancock,
the Predecessor Company participated in group insurance arrangements arranged
through Hancock. In addition, the Predecessor Company participated in certain
shared services provided by Hancock to certain of its affiliates, including
limited legal and other support functions. The Predecessor Company paid Hancock
its allocable share of the cost of such insurance and other items, which
amounted to $11.6 million and $11.1 million during 1995 and 1996, respectively.

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<PAGE> 61

DESCRIPTION OF CAPITAL STOCK

Upon completion of the Offering, the authorized capital stock of the
Company will consist of shares of Common Stock, $.01 par value per share,
of which shares will be outstanding, and shares of Preferred Stock,
$.01 par value per share, none of which will be outstanding. The following
description of the capital stock of the Company and certain provisions of the
Company's Restated Certificate of incorporation (the "Certificate of
Incorporation") and Bylaws is a summary and is qualified in its entirety by the
provisions of the Certificate of Incorporation and Bylaws, copies of which have
been filed as exhibits to the Company's Registration Statement of which this
Prospectus is a part.

COMMON STOCK

Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of the stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The Certificate of Incorporation
does not provide for cumulative voting for the election of directors. Holders of
Common Stock are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available therefor, and shall be entitled to receive, pro rata, all assets of
the Company available for distribution to such holders upon liquidation. Holders
of Common Stock have no preemptive, subscription or redemption rights.

PREFERRED STOCK

The Company is authorized to issue "blank check" preferred stock
("Preferred Stock"), which may be issued from time to time in one or more series
upon authorization by the Company's Board of Directors. The Board of Directors,
without further approval of the stockholders, is authorized to fix the dividend
rights and terms, conversion rights, voting rights, redemption rights and terms,
liquidation preferences, and any other rights, preferences, privileges and
restrictions applicable to each series of the Preferred Stock. The issuance of
Preferred Stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes could, among other things, adversely
affect the voting power of the holders of Common Stock and, under certain
circumstances, make it more difficult for a third party to gain control of the
Company, discourage bids for the Company's Common Stock at a premium or
otherwise adversely affect the market price of the Common Stock. The Company
currently has no plans to issue any Preferred Stock.

CERTAIN CERTIFICATE OF INCORPORATION, BYLAW AND STATUTORY ANTI-TAKEOVER
PROVISIONS AFFECTING STOCKHOLDERS

Section 203 of Delaware Law. The Company is subject to the "business
combination" statute of the Delaware General Corporation Law. In general, such
statute prohibits a publicly held Delaware corporation from engaging in various
"business combination" transactions with any "interested shareholder" for a
period of three years after the date of the transaction in which the person
became an "interested shareholder," unless (i) the transaction is approved by
the Board of Directors prior to the date the interested shareholder obtained
such status, (ii) upon consummation of the transaction which resulted in the
shareholder becoming an "interested shareholder," the "interested shareholder"
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the number
of shares outstanding those shares owned by (a) persons who are directors and
also officers and (b) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or (iii) on or subsequent
to such date the "business combination" is approved by the Board of Directors
and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the "interested shareholder." A "business combination" includes
mergers, asset sales and other transactions resulting in a financial benefit to
a shareholder. An "interested shareholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
a corporation's voting stock. By virtue of the Company's decision not to elect
out of the statute's provisions, the statute applies to the Company. No current
stockholders of the Company are "interested stockholders" because their
acquisition of shares was approved by the Board of Directors of the Company. The
statute could

60
<PAGE> 62

prohibit or delay the accomplishment of mergers or other takeover or change in
control attempts with respect to the Company and, accordingly, may discourage
attempts to acquire the Company.

Directors Liability. The Certificate of Incorporation provides that no
director shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director notwithstanding any
provision of law imposing such liability, provided that, to the extent provided
by applicable law, the Certificate of Incorporation shall not eliminate the
liability of a director for (i) any breach of the director's duty of loyalty to
the Company or its stockholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) acts
or omissions in respect of certain unlawful dividend payments or stock
redemptions or repurchases; or (iv) any transaction from which such director
derives improper personal benefit. The effect of this provision is to eliminate
the rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iv) above. The limitations summarized above,
however, do not affect the ability of the Company or its stockholders to seek
non-monetary based remedies, such as an injunction or rescission, against a
director for breach of his fiduciary duty nor would such limitations limit
liability under the Federal securities laws. The Company's Bylaws provide that
the Company shall, to the extent permitted by Delaware Law, as amended from time
to time, indemnify and advance expenses to the currently acting and former
directors, officers, employees and agents of the Company or of another
corporation, partnership, joint venture, trust or other enterprise if serving at
the request of the Company arising in connection with their acting in such
capacities.

REGISTRATION RIGHTS OF CERTAIN HOLDERS

Under the terms of the Stockholders' Agreement, if the Company proposes to
register any of its securities under the Securities Act following this Offering,
whether for its own account or otherwise, holders of approximately million
shares (the "Registrable Shares") of Common Stock are entitled to notice of such
registration and are entitled to include their shares therein, subject to
certain conditions and limitations. The holders of Registrable Shares also may
require the Company to effect the registration of their Registrable Shares for
sale to the public, subject to certain conditions and limitations. See "Certain
Transactions -- Stockholders Agreement".

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is , of
.

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<PAGE> 63

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
shares of Common Stock, assuming no exercise of options after December
31, 1997. Of these shares, the shares offered hereby ( shares
if the Underwriters' over-allotment option is exercised in full) will be freely
tradeable without restriction or further registration under the Securities Act,
unless purchased by "affiliates" of the Company as that term is defined in Rule
144 described below. The remaining shares of Common Stock outstanding
upon closing of the Offering are "restricted securities" as that term is defined
in Rule 144. Of the remaining shares, shares are subject to
lock-up agreements (described below).

Beginning 90 days after commencement of the Offering, approximately
shares will become eligible for sale pursuant to Rule 144 or Rule 701
under the Securities Act ("Rule 701"). Upon expiration of the lock-up
agreements, an aggregate of shares will become immediately eligible
for sale subject to the timing, volume, and manner of sale restrictions of Rule
144. Commencing , 1998, all outstanding shares not owned by
affiliates of the Company (currently shares) will be eligible for sale
pursuant to Rule 144(k). In addition, additional shares of Common
Stock subject to outstanding vested stock options could also be sold, subject in
some cases to compliance with certain volume limitations as described below.

In general, under Rule 144, as amended, a person (or persons whose shares
are aggregated) who has beneficially owned shares for at least one year
(including the holding period of any prior owner except an affiliate from whom
such shares were purchased) is entitled to sell in "brokers' transactions" or to
market makers, within any three-month period commencing 90 days after the date
of this Prospectus, a number of shares that does not exceed the greater of (i)
one percent of the number of shares of Common Stock then outstanding
(approximately shares immediately after the completion of the
Offering) or (ii) generally, the average weekly trading volume in the Common
Stock during the four calendar weeks preceding the required filing of a Form 144
with respect to such sale. Sales under Rule 144 are generally subject to the
availability of current public information about the Company. Under Rule 144(k),
a person who is not deemed to have been an affiliate of the Company at any time
during the 90 days preceding a sale, and who has beneficially owned the shares
proposed to be sold for at least two years (including the holding period of any
prior owner other than an affiliate from whom such shares were purchased), is
entitled to sell such shares without having to comply with the manner of sale,
public information, volume limitation or notice provisions of Rule 144. Under
Rule 701, persons who purchase shares upon exercise of options granted prior to
the effective date of the Offering are entitled to sell such shares 90 days
after the effective date of the Offering in reliance on Rule 144, without having
to comply with the holding period requirements of Rule 144 and, in the case of
non-affiliates, without having to comply with the public information, volume
limitation or notice provisions of Rule 144.

Pursuant to the lock-up agreements, all of the Company's officers and
directors and certain stockholders, including the Selling Stockholders, owning
upon completion of the Offering, in the aggregate, approximately
shares of Common Stock, have executed agreements pursuant to which each has
agreed that they will not, for a period of 180 days subsequent to the date of
this Prospectus, directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for any shares of Common Stock, enter into any swap
or other arrangement that transfers all or a portion of the economic
consequences associated with the ownership of any Common Stock without the prior
written consent of DLJ. Further, holders of outstanding vested stock options
for, in the aggregate, an additional shares of Common Stock are
subject to 180-day lock-up agreements with DLJ. The Company has agreed that it
will not, for a period of 180 days from the date of this Prospectus, directly or
indirectly, offer, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into, or exercisable or exchangeable for,
any shares of Common Stock, or enter into any swap or other arrangement that
transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock without the

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<PAGE> 64

prior written consent of DLJ, except that such agreement does not prevent the
Company from granting additional options under the Company's existing stock
option plans or from issuing shares pursuant to its stock option and purchase
plans. DLJ may in its sole discretion and at any time without notice, release
all or any portion of the securities subject to lock-up agreements.

The holders of an aggregate of shares of Common Stock or their
transferees are entitled to certain rights with respect to the registration of
such shares under the Securities Act. See "Description of Capital
Stock-Registration Rights of Certain Holders" and "Certain
Transactions -- Stockholders Agreement."

Prior to the Offering, there has not been any public market for the Common
Stock. Future sales of substantial amounts of Common Stock in the public market
could adversely affect the prevailing market prices and impair the Company's
ability to raise capital through the sale of equity securities.

63
<PAGE> 65

UNDERWRITING

Subject to the terms and conditions of an Underwriting Agreement, dated
, 1998 (the "Underwriting Agreement"), the Underwriters named
below, who are represented by Donaldson, Lufkin & Jenrette Securities
Corporation, Credit Suisse First Boston Corporation, Sutro & Co. Incorporated
and Tucker Anthony Incorporated (the "Representatives"), have severally agreed
to purchase from the Company and the Selling Stockholders the respective number
of shares of Common Stock set forth opposite their names below.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation..........
Credit Suisse First Boston Corporation.......................
Sutro & Co. Incorporated.....................................
Tucker Anthony Incorporated..................................
--------

Total..............................................
========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal matters
and to certain other conditions. The Underwriters are obligated to purchase and
accept delivery of all the shares of Common Stock offered hereby (other than
those shares covered by the over-allotment option described below) if any are
purchased.

The Underwriters initially propose to offer the shares of Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain dealers (including the
Underwriters) at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may re-allow, to certain
other dealers a concession not in excess of $ per share. After the
initial offering of the Common Stock, the public offering price and other
selling terms may be changed by the Representatives at any time without notice.
The Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The Selling Stockholders have granted to the Underwriters an option,
exercisable within 30 days after the date of this Prospectus, to purchase, from
time to time, in whole or in part, up to an aggregate of additional
shares of Common Stock at the initial public offering price less underwriting
discounts and commissions. The Underwriters may exercise such option solely to
cover overallotments, if any, made in connection with the Offering. To the
extent that the Underwriters exercise such option, each Underwriter will become
obligated, subject to certain conditions, to purchase its pro rata portion of
such additional shares based on such Underwriter's percentage underwriting
commitment as indicated in the preceding table.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

Each of the Company, its executive officers and directors and certain
stockholders of the Company (including the Selling Stockholders) has agreed,
subject to certain exceptions, not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise) for a period of 180 days after the date of this Prospectus
without the prior written consent of DLJ. In addition, during such period, the
Company has also agreed not to file any registration statement with

64
<PAGE> 66

respect to, and each of its executive officers, directors and certain
stockholders of the Company (including the Selling Stockholders) has agreed not
to make any demand for, or exercise any right with respect to, the registration
of any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock without DLJ's prior written consent.

Prior to the Offering, there has been no established trading market for the
Common Stock. The initial public offering price for the shares of Common Stock
offered hereby will be determined by negotiation among the Company and the
Representatives. The factors to be considered in determining the initial public
offering price include the history of and the prospects for the industry in
which the Company competes, the past and present operations of the Company, the
historical results of operations of the Company, the prospects for future
earnings of the Company, the recent market prices of securities of generally
comparable companies and the general condition of the securities markets at the
time of the Offering.

Application will be made to list the Common Stock on the NYSE. In order to
meet the requirements for listing the Common Stock on the NYSE, the Underwriters
have undertaken to sell lots of 100 or more shares to a minimum of 2,000
beneficial owners. In addition, NYSE Rule 312(g) prohibits a member corporation,
after the distribution of securities of its parent to the public, from effecting
any transactions (except on an unsolicited basis) for the account of any
customer in, or making any recommendation with respect to the purchase or sale
of, any such security. Thus, following the Offering, Tucker Anthony, Sutro and
FSI will not be permitted to make a market in or to make recommendations
regarding the purchase or sale of the Common Stock.

Other than in the United States, no action has been taken by the Company,
the Selling Stockholders or the Underwriters that would permit a public offering
of the shares of Common Stock offered hereby in any jurisdiction where action
for that purpose is required. The shares of Common Stock offered hereby may not
be offered or sold, directly or indirectly, nor may this Prospectus or any other
offering material or advertisements in connection with the offer and sale of any
such shares of Common Stock be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable
rules and regulations of such jurisdiction. Persons into whose possession this
Prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the Offering of the Common Stock and the distribution
of this Prospectus. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any shares of Common Stock offered hereby in any
jurisdiction in which such an offer or a solicitation is unlawful.

In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may overallot the Offering,
creating a syndicate short position. The Underwriters may bid for and purchase
shares of Common Stock in the open market to cover such syndicate short position
or to stabilize the price of the Common Stock. In addition, the underwriting
syndicate may reclaim selling concessions from syndicate members if the
syndicate repurchases previously distributed Common Stock in syndicate covering
transactions, in stabilizing transactions or otherwise. These activities may
stabilize or maintain the market price of the Common Stock above independent
market levels. The Underwriters are not required to engage in these activities,
and may end any of these activities at any time.

Tucker Anthony and Sutro are indirect wholly owned subsidiaries of the
Company. Tucker Anthony and Sutro have committed to purchase from the Company an
aggregate of % of the shares of Common Stock being underwritten by the
Underwriters in the Offering on the same basis as the other Underwriters.
Although the amount of proceeds derived from the Offering by the Company will
not be affected by Tucker Anthony's and Sutro's participation as Underwriters,
to the extent that part or all of the shares of Common Stock underwritten by
Tucker Anthony and Sutro are not resold; the consolidated equity of the Company
will be reduced. Until resold, any such shares will be eliminated in
consolidation as if they were not outstanding for purposes of any future
computation of earnings per common share and book value per common share. Tucker
Anthony and Sutro intend to resell any shares which they are unable to resell in
the Offering from time to time, at prevailing market prices.

65
<PAGE> 67

Under Rule 2720 of the Conduct Rules of the NASD ("Rule 2720"), the Company
is considered an affiliate of Tucker Anthony and Sutro. This Offering is being
conducted in accordance with Rule 2720, which provides that, among other things,
when an NASD member participates in the underwriting of its parent's equity
securities, the initial public offering price can be no higher than that
recommended by a "qualified independent underwriter" meeting certain standards
("QIU"). In accordance with this requirement, DLJ has assumed the
responsibilities of acting as QIU and will recommend a price in compliance with
the requirements of Rule 2720. In connection with the Offering, DLJ is
performing due diligence investigations and reviewing and participating in the
preparation of this Prospectus and the Registration Statement of which this
Prospectus forms a part. As compensation for the services of DLJ as QIU, the
Company has agreed to pay DLJ $5,000.

Tucker Anthony and Sutro have informed the Company that it will not confirm
sales to any accounts over which it exercises discretionary authority without
prior written approval of such transactions by the customer.

The Underwriters have reserved for sale approximately shares of
Common Stock for directors and current employees of the Company who have an
interest in purchasing such shares of Common Stock in the Offering. The price
per share for such shares will be the initial public offering price less
underwriting discounts and commissions or $ per share. The number of
shares available for sale to the general public in the Offering will be reduced
to the extent such persons purchase such reserved shares. Any reserved shares
not so purchased will be offered by the Underwriters to the general public on
the same basis as the other shares offered hereby. Any such directors and
current employees of the Company who purchase any of the shares offered in the
Offerings will be prohibited from selling, pledging, assigning, hypothecating or
transferring such shares for a period of five months following the effective
date of the Offering.

TAX CONSEQUENCES TO NON-U.S. HOLDERS

The material federal income tax consequences to Non-U.S. Holders expected
to result from the purchase, ownership and sale or other taxable disposition of
the Common Stock, under currently applicable law, are summarized below. A
"Non-U.S. Holder" is a person or entity that, for U.S. federal income tax
purposes, is a non-resident alien individual, a foreign corporation, a foreign
estate or trust or a foreign partnership as such terms are defined in the
Internal Revenue Code of 1986, as amended (the "Code").

This summary is based upon the current provisions of the Code, applicable
Treasury Regulations and judicial and administrative decisions and rulings.
There can be no assurance that the Internal Revenue Service (the "IRS") will not
take a contrary view, and no ruling from the IRS has been or will be sought.
Future legislative, judicial or administrative changes or interpretations could
alter or modify the statements set forth herein, and any such changes or
interpretations could be retroactive and could affect the tax consequences to
Non-U.S. Holders of Common Stock.

The following summary is for general information only and does not purport
to deal with all aspects of federal income taxation that may affect particular
Non-U.S. Holders in light of their individual circumstances and is not intended
for (a) stockholders other than Non-U.S. Holders, (b) Non-U.S. Holders who would
not hold the Common Stock as capital assets or (c) Non-U.S. Holders who are
otherwise subject to special treatment under the Code (including insurance
companies, tax-exempt entities, financial institutions, broker-dealers and
persons who would hold the Common Stock as part of a straddle, hedge or
conversion transaction). In addition, the summary does not consider the effect
of any applicable state, local or foreign tax laws on Non-U.S. Holders. EACH
PROSPECTIVE NON-U.S. HOLDER OF COMMON STOCK SHOULD CONSULT HIS OWN TAX ADVISOR
WITH RESPECT TO THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF COMMON STOCK, INCLUDING THE APPLICABILITY AND EFFECT OF STATE,
LOCAL AND FOREIGN TAX LAWS, AND OF CHANGES IN APPLICABLE TAX LAWS.

66
<PAGE> 68

DIVIDENDS ON COMMON STOCK

Dividends paid to a Non-U.S. Holder of Common Stock that are not
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business within the United States will generally be subject to withholding of
United States federal income tax at the rate of 30% of the gross amount of the
dividends unless the rate is reduced by an applicable income tax treaty. Except
to the extent that an applicable tax treaty otherwise provides, a Non-U.S.
Holder will be taxed in the same manner as United States citizens, resident
aliens and domestic corporations on dividends paid (or deemed paid) that are
effectively connected with the conduct of a trade or business in the United
States by the Non U.S. Holder. If such Non-U.S. Holder is a foreign corporation,
it may also be subject to a United States branch profits tax on such effectively
connected income at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. However, a Non-U.S. Holder may claim exemption
from withholding under the effectively connected income exception by filing Form
4224 (Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of Business in the United States) or a successor form with the Company
or its paying agent.

Under the currently applicable Treasury regulations, dividends paid to an
address in a country other than the United States are presumed to be paid to a
resident of such country for purposes of the withholding discussed above (unless
the payor has knowledge to the contrary) and, under the current interpretation
of Treasury regulations, for purposes of determining the applicability of a
reduced rate of withholding under an income tax treaty. However, under certain
recently finalized Treasury Regulations (the "New Withholding Regulations") a
Non-U.S. Holder of Common Stock who wishes to claim the benefit of an applicable
treaty rate would be required to satisfy certain certification and other
requirements. In addition, under the New Withholding Regulations, in the case of
Common Stock held by a foreign partnership, the certification requirement would
generally be applied to the partners of the partnership and the partnership may
be required to provide certain information, including a United States taxpayer
identification number. The New Withholding Regulations also provide look-through
rules for tiered partnerships. The New Withholding Regulations are generally
effective for payments made after December 31, 1998, subject to certain
transition rules. Non-U.S. Holders are encouraged to consult with their own tax
advisors with respect to the application of the New Withholding Regulations.

Generally, the Company must report to the IRS the amount of dividends paid,
the name and address of the recipient and the amount, if any, of the tax
withheld. A similar report is sent to the holder. Pursuant to income tax
treaties or certain other agreements, the IRS may make its reports available to
tax authorities in the recipient's country of residence.

If paid to an address outside the United States, dividends on Common Stock
held by a Non-U.S. Holder will generally not be subject to backup withholding,
provided that the payor does not have actual knowledge that the holder is a
United States person. However, under the New Withholding Regulations (which are
effective for dividends paid after December 31, 1998), dividend payments may be
subject to backup withholding imposed at a rate of 31% unless applicable
certification requirements are satisfied. See the discussion above with respect
to rules applicable to foreign partnerships under the New Withholding
Regulations.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to United States federal
income tax or withholding on gain recognized upon the sale or other disposition
of Common Stock unless (i) the gain is effectively connected with the conduct of
a trade or business within the United States by the Non-U.S. Holder, or (ii) in
the case of a Non-U.S. Holder who is a non-resident alien individual and holds
the Common Stock as a capital asset, such holder is present in the United States
for 183 or more days in the taxable year and certain other conditions are met,
or (iii) the Non-U.S. Holder is subject to tax pursuant to the provisions of
United States federal income tax law applicable to certain United States
expatriates. If a Non-U.S. Holder falls under clause (i) above, the holder will
be taxed on the net gain derived from the sale at regular graduated United
States federal income tax rates (the branch profits tax also may apply if the
Non-U.S. Holders is a corporation). If an individual Non-U.S. Holder falls under
clause (ii) above, the holder generally will be

67
<PAGE> 69

subject to a 30% tax on the gain derived from the sale, which gain may be offset
by U.S. capital losses recognized within the same taxable year of such sale. The
foregoing discussion in this paragraph is based on the Company's conclusion that
it is not presently a United States real property holding corporation ("USRPHC")
subject to the Foreign Investment on Real Property Tax Act of 1980 ("FIRPTA").
Different consequences would apply to certain Non-U.S. Holders if the Company
were to become a USRPHC subject to FIRPTA.

FEDERAL ESTATE TAXES

An individual Non-U.S. Holder who owns, or is treated as owning, Common
Stock at the time of his or her death or has made certain lifetime transfers of
an interest in Common Stock will be required to include the value of such Common
Stock in his gross estate for United States federal estate tax purposes, unless
an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Information reporting requirements and backup withholding tax will not
apply to any payment of the proceeds of the sale of Common Stock effected
outside the United States by a foreign office of a "broker" (as defined in
applicable Treasury Regulations), unless such broker is (i) a United States
person, (ii) a foreign person that derives 50% or more of its gross foreign
income for certain periods from activities that are effectively connected with
the conduct of a trade or business in the United States, (iii) a controlled
foreign corporation for United States federal income tax purposes or (iv)
effective December 31, 1998, certain brokers that are foreign partnerships with
partners who are U.S. Holders or that are engaged in a United States trade or
business. Payment of the proceeds of any such sale effected outside the United
States by a foreign office of any broker that is described in (i), (ii), (iii)
or (iv) of the preceding sentence will not be subject to backup withholding tax
but will be subject to information reporting requirements unless such broker has
documentary evidence in its records that the beneficial owner is a Non-U.S.
Holder and certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment of the proceeds of any such sale to or through
the United States office of a broker is subject to information reporting and
backup withholding requirements, unless the beneficial owner of the Common Stock
either (a) provides a Form W-8 (or a suitable substitute form) signed under
penalties of perjury that includes its name and address and certifies as to its
Non-U.S. Holder status in compliance with applicable law and regulations, or (b)
otherwise establishes an exemption. Effective for payments after December 31,
1998 (and subject to certain transition rules), the New Withholding Regulations
unify certain certification procedures and forms and the reliance standards
relating to information reporting and backup withholding.

THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH PROSPECTIVE
NON-U.S. HOLDER OF COMMON STOCK SHOULD CONSULT HIS OWN TAX ADVISOR WITH RESPECT
TO THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON
STOCK.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company and the Selling Stockholders by Hutchins, Wheeler &
Dittmar, A Professional Corporation, Boston, Massachusetts. Certain legal
matters in connection with the Offering will be passed upon for the Underwriters
by Davis Polk & Wardwell, New York, New York.

EXPERTS

The consolidated statements of financial condition of the Company as of
December 31, 1996 and 1997 and the related consolidated statements of income,
changes in stockholders' equity and cash flows for the one month period ended
December 31, 1996 and the year ended December 31, 1997 and the consolidated

68
<PAGE> 70

statements of income, changes in stockholders' equity and cash flows of the
Predecessor Company for the period from January 1, 1996 to November 29, 1996 and
for the year ended December 31, 1995, included in this Prospectus, have been
included herein in reliance on the report of Ernst & Young LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and such Common Stock, reference is
hereby made to such Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus as to the contents of
any contract or any other document referred to are not necessarily complete, and
in each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. A copy of the Registration
Statement may be inspected by anyone without charge at the Commission's
principal office in Washington, D.C., and copies of all or any part of the
Registration Statement may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of
certain fees prescribed by the Commission. The Commission maintains a World Wide
Website that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of the website is http://www.sec.gov.

Upon completion of the Offering, the Company will be subject to the
information reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, in accordance therewith, will file reports,
proxy statements and other information with the Commission.

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by the Company's independent public
accountants and quarterly reports for the first three fiscal quarters of each
fiscal year containing unaudited interim financial information.

69
<PAGE> 71

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors........................................................ F-2
Consolidated Statements of Financial Condition -- December 31, 1996 and 1997.......... F-3
Consolidated Statements of Income -- For the year ended December 31, 1995, eleven
months ended November 29, 1996, one month ended December 31, 1996 and year ended
December 31, 1997................................................................... F-4
Consolidated Statements of Changes in Stockholders' Equity -- For the year ended
December 31, 1995, eleven months ended November 29, 1996, one month ended December
31, 1996 and year ended December 31, 1997........................................... F-5
Consolidated Statements of Cash Flows -- For the year ended December 31, 1995, eleven
months ended November 29, 1996, one month ended December 31, 1996 and year ended
December 31, 1997................................................................... F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 72

REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of
Freedom Securities Corporation

We have audited the accompanying consolidated statements of financial
condition of Freedom Securities Corporation ("Company") as of December 31, 1996
and 1997 and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for the one month period ended December 31,
1996 and the year ended December 31, 1997, and the accompanying consolidated
statements of income, changes in stockholders' equity and cash flows of Freedom
Securities Holding Corporation ("Predecessor Company") for the year ended
December 31, 1995 and for the period January 1, 1996 to November 29, 1996. These
financial statements are the responsibility of the management of the Company and
the Predecessor Company. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly
in all material respects, the consolidated financial position of Freedom
Securities Corporation at December 31, 1996 and 1997 and the consolidated
results of its operations and its cash flows for the one month period ended
December 31, 1996 and for the year ended December 31, 1997, and the consolidated
results of operations and cash flows of the Predecessor Company for the year
ended December 31, 1995 and for the period January 1, 1996 to November 29, 1996
in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG, LLP

New York, New York
January 22, 1998

F-2
<PAGE> 73

FREEDOM SECURITIES CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1996 AND 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
ASSETS
Cash and cash equivalents.............................................. $ 7,248 $ 12,936
Receivables from brokers, dealers and others........................... 65,404 74,314
Securities purchased under agreements to resell........................ 84,211 113,335
Securities owned, at market............................................ 253,106 423,522
Fixed assets, net of accumulated depreciation and amortization......... 25,929 20,464
Goodwill, net of accumulated amortization.............................. 28,075 24,861
Other assets........................................................... 52,979 58,155
-------- --------
Total assets........................................................... $516,952 $727,587
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Payables to brokers, dealers and others.............................. $ 74,131 $ 59,062
Securities sold under agreements to repurchase....................... 44,976 --
Securities sold, not yet purchased, at market........................ 101,140 354,565
Accrued compensation and benefits.................................... 55,503 65,653
Accounts payable and accrued expenses................................ 50,915 44,535
Notes payable to banks............................................... 110,819 101,446
-------- --------
Total liabilities............................................ 437,484 625,261
-------- --------
Stockholders' equity:
Common stock (12,000,000 shares authorized, 7,894,653 and 8,163,161
shares issued in 1996 and 1997, respectively, $.01 par value)..... 79 82
Additional paid-in capital........................................... 78,868 83,719
Retained earnings.................................................... 740 19,438
Subscribed stock (75,100 shares in 1997)............................. -- (913)
Treasury stock (21,850 shares in 1996, at cost)...................... (219) --
-------- --------
Total stockholders' equity........................................ 79,468 102,326
-------- --------
Total liabilities and stockholders' equity................... $516,952 $727,587
======== ========
</TABLE>

See Notes to Consolidated Financial Statements

F-3
<PAGE> 74

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PREDECESSOR
COMPANY
----------------------------------
YEAR ENDED ELEVEN MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, NOVEMBER 29, DECEMBER 31, DECEMBER 31,
1995 1996 1996 1997
<S> <C> <C> <C> <C>
Revenues
Commissions........................ $140,180 $ 139,018 $12,522 $167,184
Principal transactions............. 105,789 95,481 8,350 99,269
Investment banking................. 34,773 33,964 4,137 55,259
Asset management................... 14,901 17,316 1,682 19,950
Other.............................. 12,766 15,218 573 12,465
-------- -------- ------- --------
Total operating revenues... 308,409 300,997 27,264 354,127
Interest income.................... 60,116 46,486 3,361 44,056
-------- -------- ------- --------
Total revenues............. 368,525 347,483 30,625 398,183
Interest expense................... 36,000 26,454 1,829 22,428
-------- -------- ------- --------
Net revenues............... 332,525 321,029 28,796 375,755
-------- -------- ------- --------
Non-interest expenses
Compensation and benefits.......... 217,589 209,187 18,859 245,939
Occupancy and equipment............ 26,050 30,993 2,231 24,331
Communications..................... 18,129 16,596 1,317 16,948
Brokerage and clearance............ 7,322 10,473 1,007 11,262
Promotional........................ 9,455 9,156 818 10,308
Other.............................. 31,696 24,237 2,577 28,480
-------- -------- ------- --------
Total non-interest
expenses................. 310,241 300,642 26,809 337,268
Acquisition interest expense......... -- -- 567 6,052
-------- -------- ------- --------
Income before income taxes........... 22,284 20,387 1,420 32,435
Income taxes......................... 9,220 8,844 680 13,737
-------- -------- ------- --------
Net income........................... $ 13,064 $ 11,543 $ 740 $ 18,698
======== ======== ======= ========
Basic and diluted earnings per
share.............................. -- -- $ 0.09 $ 2.19
======= ========
</TABLE>

See Notes to Consolidated Financial Statements

F-4
<PAGE> 75

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS AND SHARES IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK
------------------ ADDITIONAL RETAINED SUBSCRIBED TREASURY
SHARES PAR VALUE PAID-IN-CAPITAL EARNINGS STOCK STOCK TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
PREDECESSOR COMPANY:
Balance at December 31,
1994...................... 1 $ 1 $ 109,748 $ 35,719 $ -- $ -- $145,468
Net income.................. 13,064 13,064
Non-cash dividend to
Hancock................... (5,751) (5,751)
----- --- -------- ------- ----- ----- --------
Balance at December 31,
1995...................... 1 1 109,748 43,032 -- -- 152,781
----- --- -------- ------- ----- ----- --------
Net income.................. 11,543 11,543
----- --- -------- ------- ----- ----- --------
Balance at November 29,
1996...................... 1 $ 1 $ 109,748 $ 54,575 $ -- $ -- $164,324
===== === ======== ======= ===== ===== ========
FREEDOM SECURITIES
CORPORATION:
Sale of Common Stock at
November 29, 1996
(including $3,947 of
non-cash capital
contributed by Hancock)... 7,873 $79 $ 78,868 $ -- $ -- $ (219) $ 78,728
Net income.................. 740 740
----- --- -------- ------- ----- ----- --------
Balance at December 31,
1996...................... 7,873 79 78,868 740 -- (219) 79,468
----- --- -------- ------- ----- ----- --------
Sale of Common Stock........ 268 3 4,694 4,697
Net income.................. 18,698 18,698
Acquisition of treasury
stock..................... (53) (537) (537)
Reissuance of treasury
stock..................... -- 157 (913) 756 --
----- --- -------- ------- ----- ----- --------
Balance at December 31,
1997...................... 8,088 $82 $ 83,719 $ 19,438 $ (913) $ -- $102,326
===== === ======== ======= ===== ===== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 76

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
----------------------------------
YEAR ENDED ELEVEN MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, NOVEMBER 29, DECEMBER 31, DECEMBER 31,
1995 1996 1996 1997
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................ $ 13,064 $ 11,543 $ 740 $ 18,698
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation............................ 4,274 4,632 304 5,128
Amortization............................ 6,403 7,807 685 5,714
Non-cash compensation................... -- -- -- 1,432
Changes in assets and liabilities
(Increase) decrease in operating assets:
Receivables from brokers, dealers and
others................................ (28,855) 105,303 19,304 (8,910)
Receivables from customers.............. (24,408) 333,252 -- --
Securities purchased under agreements to
resell................................ (26,490) 92,052 31,212 (29,124)
Securities owned, at market............. (73,825) 57,720 37,698 (170,416)
Other assets............................ (11,163) (7,628) 3,876 (6,056)
Increase (decrease) in operating
liabilities:
Short-term loans from a Hancock
affiliate........................... 10,000 (200,000) -- --
Short-term loans...................... 61,535 (107,745) -- --
Payables to brokers, dealers and
others.............................. 19,443 (39,937) (33,027) (15,069)
Payables to customers................. 23,125 (186,206) -- --
Securities sold under agreements to
repurchase.......................... 28,710 (91,795) (5,061) (44,976)
Securities sold, not yet purchased, at
market.............................. 4,523 7,517 (47,088) 253,425
Accrued compensation and benefits..... 13,066 364 2,230 10,150
Accounts payable and accrued
expenses............................ 4,663 11,060 (7,930) (6,380)
-------- --------- --------- ---------
Net cash from operating activities........ 24,065 (2,061) 2,943 13,616
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets................. (10,883) (8,417) (112) (1,994)
Proceeds from sale of fixed assets........ -- -- -- 711
Purchase of Predecessor Company........... -- -- (180,000) --
Acquisition related expenditures.......... -- -- (5,740) --
-------- --------- --------- ---------
Net cash used in investing activities..... (10,883) (8,417) (185,852) (1,283)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, net... -- -- 74,781 2,728
Proceeds from notes payable to banks...... -- 25,819 110,819 --
Repayment of notes payable to banks....... -- -- -- (9,373)
Proceeds from notes payable to a Hancock
affiliate............................... 6,105 -- -- --
Repayment of notes payable to a Hancock
affiliate............................... (2,400) (33,736) -- --
-------- --------- --------- ---------
Net cash from financing activities........ 3,705 (7,917) 185,600 (6,645)
Increase (decrease) in cash and cash
equivalents............................. 16,887 (18,395) 2,691 5,688
Cash and cash equivalents, beginning of
period.................................. 6,065 22,952 4,557 7,248
-------- --------- --------- ---------
Cash and cash equivalents, end of
period.................................. $ 22,952 $ 4,557 $ 7,248 $ 12,936
======== ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Income taxes............................ $ 9,086 $ 10,453 $ 1,421 $ 14,859
Interest................................ $ 33,432 $ 22,912 $ 1,246 $ 28,338
</TABLE>

See Notes to Consolidated Financial Statements

F-6
<PAGE> 77

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

Freedom Securities Corporation (formerly JHFSC Acquisition Corp.) is a
holding company which together with its wholly owned subsidiaries (collectively,
the "Company") is a full-service, regionally focused retail brokerage and
investment banking firm. The Company is engaged primarily in the retail and
institutional brokerage business including corporate finance and underwriting
services. The consolidated financial statements include the accounts of the
Company including its primary operating subsidiaries Tucker Anthony Incorporated
("Tucker Anthony"), Sutro & Co. Incorporated ("Sutro") and Freedom Capital
Management Corporation ("Freedom Capital").

Tucker Anthony, headquartered in Boston and focused on the northeastern
United States, and Sutro, headquartered in San Francisco and focused on the
western United States, are full service regionally focused retail brokerage and
investment banking firms. Freedom Capital is the Company's investment advisory
and asset management subsidiary which is focused on public sector entities and
high net worth individuals.

Principles of Consolidation

All significant intercompany accounts and transactions have been eliminated
in consolidation. The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from these
estimates. Certain prior year amounts have been reclassified to conform with the
current period's financial statement presentation.

The Acquisition

The Company was established to facilitate a buyout of Freedom Securities
Holding Corporation (the "Predecessor Company" and formerly John Hancock Freedom
Securities Corporation). Until November 29, 1996, the Predecessor Company was a
wholly-owned subsidiary of John Hancock Mutual Life Insurance Company
("Hancock").

Under terms of a Contribution Agreement dated October 4, 1996 and
consummated on November 29, 1996 among Hancock, the Company, two private
investor groups and selected employee investors, Hancock contributed 100% of the
issued and outstanding capital stock of the Predecessor Company to the Company
in exchange for 4.999% of the issued and outstanding capital stock of the
Company and an aggregate consideration of $180 million. With the consummation of
the transactions under the Contribution Agreement, the Predecessor Company
became a wholly owned subsidiary of the Company as of the close of business
November 29, 1996. Through November 29, 1996, the consolidated financial
statements present the financial condition, results of operations and cash flows
of the Predecessor Company and its subsidiaries.

The Acquisition has been accounted for as a purchase and, accordingly, the
purchase price was allocated to the assets and liabilities acquired based upon
their fair values at the date of the Acquisition. The purchase price, including
acquisition costs, exceeded the fair value of net assets acquired by $28.2
million and the excess was recorded as goodwill.

Wexford Arrangement

Tucker Anthony and Sutro clear their securities transactions on a fully
disclosed basis through Wexford Clearing Services Corporation ("Wexford" or the
"clearing broker"), a guaranteed wholly owned subsidiary of Prudential
Securities, Inc. Prior to April 3, 1996, Tucker Anthony and Sutro cleared their
securities transactions through a wholly owned subsidiary of the Predecessor
Company. This subsidiary subsequently

F-7
<PAGE> 78

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
withdrew its broker-dealer registration but continues to perform certain liaison
functions and provides data processing and communications support to its
affiliates.

Securities

Securities transactions and related revenues and expenses are recorded on a
trade date basis. Securities owned and securities sold, not yet purchased,
including derivative contracts held for trading purposes, are stated at market
value with related changes in unrealized appreciation or depreciation reflected
in principal transactions revenues. Securities sold, not yet purchased,
represent obligations to deliver specified securities at predetermined prices.
The Company is obligated to acquire the securities sold short at prevailing
market prices in the future to satisfy these obligations.

Investment Banking

Investment banking revenues are recorded as follows: management fees as of
the offering date; sales commissions on trade date and underwriting fees at the
time the underwriting is completed and the income is reasonably determinable.

Fixed Assets

Furniture and fixtures are depreciated on a straight-line basis over their
estimated useful lives, generally three to ten years. Leasehold improvements are
amortized on a straight-line basis over the lesser of the economic useful life
of the improvements or the terms of the respective leases. Fixed assets are
stated at cost net of accumulated depreciation and amortization of $0.6 million
and $2.4 million at December 31, 1996 and 1997, respectively.

Intangibles

Intangibles related to the Acquisition include debt issuance costs ($2.9
million and $2.4 million at December 31, 1996 and 1997, respectively) which are
reported in other assets, and goodwill. Goodwill and debt issuance costs are
stated at cost net of accumulated amortization and are amortized on a
straight-line basis over fifteen and five years, respectively.

The accumulated amortization of intangibles totaled $0.2 million and $2.7
million at December 31, 1996 and 1997, respectively.

Income Taxes

Through November 29, 1996, the Predecessor Company was included in the
consolidated U.S. Federal income tax return of Hancock. Pursuant to an agreement
with Hancock, the Predecessor Company's share of combined Federal income taxes
was equivalent to the total provision or benefit the Predecessor Company would
have recorded for such taxes had they been determined on a stand-alone basis.
Pursuant to an agreement relating to the Acquisition, Hancock assumed
responsibility for all Federal, state and local taxes of the Predecessor Company
through 1995.

Subsequent to the Acquisition, the Company and its subsidiaries file a
consolidated U. S. Federal income tax return. State and local taxes are computed
on a separate company basis. The Company accounts for income taxes in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting
for Income Taxes". Under this method, the Company recognizes taxes payable or
refundable for the current year and deferred tax liabilities and assets for
future consequences of events that have been recognized in the Company's
financial statements or tax returns.

F-8
<PAGE> 79

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash Flows

For purposes of reporting cash flows, the Company considers all highly
liquid investments with original maturities of three months or less to be cash
equivalents. Cash flows for the one month ended December 31, 1996 are shown net
of the effects of the purchase of the Predecessor Company.

Accounting Pronouncements

In June 1996, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." SFAS No. 125 introduced the
financial-components approach which focuses on the recognition of financial
assets that an entity controls and the derecognition of financial assets for
which control has been transferred. The FASB, under SFAS No. 127 "Deferral of
the Effective Date of Certain Provisions of SFAS No. 125," has deferred the
effective date of accounting for other types of transfers of financial assets,
including repurchase agreements and securities lending transactions, until
January 1, 1998. The Company does not expect the adoption of this statement to
have a material impact on the Company's consolidated financial statements.

2. RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND OTHERS

Included in the receivables from brokers, dealers and others are unsettled
proprietary trades and certain overnight funds with a Wexford affiliate.
Included in payables to brokers, dealers and others are the amounts due to
Wexford for collateralized financing of proprietary positions and to Freedom
Capital's transfer agent for money market funds. The Company's principal source
of short-term financing is provided by Wexford, from which the Company can
borrow on an uncommitted basis against its proprietary inventory positions,
subject to collateral maintenance requirements.

The Company conducts business with brokers and dealers that are members of
the major securities exchanges. The Company monitors the credit standing of such
brokers and dealers, monitors the market value of collateral and requests
additional collateral as deemed appropriate.

3. TRANSACTIONS WITH CUSTOMERS

For transactions in which the Company, through Wexford, extends credit to
customers, the Company seeks to control the risks associated with these
activities by requiring customers to maintain margin collateral in compliance
with various regulatory and internal guidelines. The Company and Wexford monitor
required margin levels daily and, pursuant to such guidelines, request customers
to deposit additional collateral or reduce securities positions when necessary.

The Company has agreed to indemnify Wexford for losses that it may sustain
from the customer accounts introduced by the Company. At December 31, 1996 and
1997, there were no amounts to be indemnified to Wexford for these accounts.

4. SHORT-TERM LOANS

In periods prior to 1997, short-term loans with banks and a Hancock
affiliate were used to finance securities purchased by customers on margin and
proprietary inventory positions. Borrowings from the Hancock affiliate were on
an uncollateralized basis and bore interest at a rate approximating the
commercial paper rate of such affiliate. Interest expense related to these loans
was $7.7 million for the year ended December 31, 1995 and $12.1 million for the
eleven months ended November 29, 1996.

F-9
<PAGE> 80

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER
AGREEMENTS TO REPURCHASE

Securities purchased under agreements to resell and securities sold under
agreements to repurchase are treated as collateralized financing transactions,
and are carried at amounts at which the securities will be subsequently resold
or reacquired plus accrued interest. At December 31, 1996 and 1997 these
agreements matured within 13 days. Securities sold under agreements to
repurchase had a weighted-average interest rate of 6.0% at December 31, 1996. It
is the Company's policy to take possession or control of securities purchased
under agreements to resell. The Company is required to provide securities to
counterparties in order to collateralize repurchase agreements. The Company
minimizes credit risk associated with these activities by monitoring credit
exposure and collateral values on a daily basis and requiring additional
collateral to be deposited or returned when deemed appropriate.

6. TRANSACTIONS WITH AFFILIATES

During 1995, the Predecessor Company distributed its $5.8 million ownership
interest in JHM Capital Management Corp. to Hancock as a dividend. The earnings
prior to such distribution were not significant.

Prior to November 29, 1996, the Predecessor Company had outstanding notes
payable to a Hancock affiliate which incurred interest at rates approximating
such affiliate's average cost of borrowing and were payable on demand. These
notes were repaid on November 29, 1996. Interest expense incurred relating to
these notes was $1.8 million for the year ended December 31, 1995 and $1.7
million for the eleven months ended November 29, 1996.

The Predecessor Company participated in group insurance arrangements
arranged through Hancock and also received certain shared services. The
Predecessor Company paid Hancock its allocable share of the cost of such
insurance and other items, which amounted to $11.6 million and $11.1 million
during the year ended December 31, 1995 and the eleven months ended November 29,
1996, respectively. Subsequent to the Acquisition, the Company continued to
participate in the group insurance arrangements through Hancock until June 30,
1997 when the Company obtained its own insurance arrangements. The Company paid
its allocable share of the cost of such insurance which amounted to $0.8 million
and $6.1 million for the one month period ended December 31, 1996 and the six
month period ended June 30, 1997, respectively.

Effective with the Acquisition, the Company entered into management
agreements, with certain shareholders, and has agreed to pay annual management
fees totaling $0.3 million. These agreements terminate by the mutual consent of
the parties or upon an initial public offering of the Company's common stock.

F-10
<PAGE> 81

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. SECURITIES

Securities owned and securities sold, not yet purchased are recorded at
market value and consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
<S> <C> <C>
OWNED:
Obligations of the U.S. government or its agencies..................... $ 23,650 $ 27,396
State and municipal obligations........................................ 56,057 38,222
Arbitrage securities................................................... 84,967 291,023
Other corporate obligations............................................ 73,127 51,709
Other corporate stocks and warrants.................................... 15,305 15,172
-------- --------
$253,106 $423,522
======== ========
SOLD, NOT YET PURCHASED:
Obligations of the U.S. government or its agencies..................... $ 37,663 $ 22,890
State and municipal obligations........................................ 1,476 1,519
Arbitrage securities................................................... 51,671 322,316
Other corporate obligations............................................ 6,055 1,356
Other corporate stocks and warrants.................................... 4,275 6,484
-------- --------
$101,140 $354,565
======== ========
</TABLE>

8. NOTES PAYABLE TO BANKS

Included in notes payable to banks is the Company's borrowing for fixed
asset financing of approximately $25.8 million and $21.4 million at December 31,
1996 and 1997, respectively, which bears interest at 8.02% annually and is
payable in equal monthly installments through December 2001. This note is
collateralized by furniture, fixtures and leasehold improvements.

The Company entered into a Revolving Credit Agreement (the "credit
agreement") with certain participating banks. Borrowings under the credit
agreement equaled $85 million and $80 million at December 31, 1996 and 1997,
respectively. These borrowings bear interest, approximately 7.06% and 6.97% at
December 31, 1996 and 1997, respectively, at the current Eurodollar Rate plus
applicable margin, as defined, ranging from 0.75% to 2.00% based on a calculated
leverage ratio in accordance with the credit agreement. Interest expense related
to the credit agreement is shown in the consolidated statements of income as
acquisition interest expense. Subject to the terms and conditions as set forth
in this credit agreement, the Company may borrow, repay and reborrow from time
to time up to the maturity date, December 31, 2001, of this credit agreement.
The credit agreement also includes certain financial covenants (see note 10) and
a mandatory reduction of the participating banks' commitment at the end of
various calendar quarters.

The aggregate amount of principal repayment requirements on notes payable
is as follows by year (in thousands):

<TABLE>
<CAPTION>
FIXED ASSET BORROWINGS UNDER THE
YEAR FINANCING CREDIT AGREEMENT
<S> <C> <C>
1998........................................... $ 4,737 $ 10,000
1999........................................... 5,131 12,500
2000........................................... 5,558 25,000
2001........................................... 6,020 32,500
</TABLE>

F-11
<PAGE> 82

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. INCOME TAXES

The components of income tax expense (benefit) are (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED ELEVEN MONTHS ONE MONTH ENDED YEAR ENDED
DECEMBER 31, ENDED NOVEMBER 29, DECEMBER 31, DECEMBER 31,
1995 1996 1996 1997
<S> <C> <C> <C> <C>
Federal:
Current............... $ 6,969 $ 9,422 $ 581 $ 7,693
Deferred.............. (1,456) (3,930) (148) 1,482
State:
Current............... 4,116 4,784 300 4,501
Deferred.............. (409) (1,432) (53) 61
------- ------- ----- -------
$ 9,220 $ 8,844 $ 680 $13,737
======= ======= ===== =======
</TABLE>

The effective income tax differs from the amount computed by applying the
Federal statutory income tax rate as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED ELEVEN MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, NOVEMBER 29, DECEMBER 31, DECEMBER 31,
1995 1996 1996 1997
<S> <C> <C> <C> <C>
Federal statutory income tax.......... $7,799 $7,136 $497 $11,352
State and local incomes taxes, net of
federal tax benefit................. 2,410 2,179 160 2,965
Tax exempt interest, net.............. (840) (570) (53) (770)
Other, net............................ (149) 99 76 190
------ ------ ---- -------
Effective income tax.................. $9,220 $8,844 $680 $13,737
====== ====== ==== =======
</TABLE>

The temporary differences which created deferred tax assets and liabilities
are included as a net amount in other assets at December 31, 1996 and 1997 as
follows (in thousands):

<TABLE>
<CAPTION>
1996 1997
<S> <C> <C>
Deferred Tax Assets:
Deferred compensation.................................................. $ 6,122 $ 5,990
Reserves............................................................... 2,759 2,042
Other.................................................................. 3,240 2,118
Less valuation allowance............................................... (1,131) --
------- -------
Total deferred tax assets........................................... 10,990 10,150
------- -------
Deferred Tax Liabilities:
Net unrealized appreciation on investments and other................... 185 887
------- -------
Total deferred tax liabilities...................................... 185 887
------- -------
Net deferred tax asset................................................... $10,805 $ 9,263
======= =======
</TABLE>

At December 31, 1996, the Company had net operating loss carryforwards
("NOLs") related to the original acquisition of Sutro of $3.2 million for which
it had recorded a valuation allowance against the full amount of the deferred
tax asset. These NOLs were fully utilized in 1997 resulting in a reduction to
taxes payable but without a reduction to reported income tax expense as the
offset was reported as an adjustment to goodwill.

F-12
<PAGE> 83

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. NET CAPITAL REQUIREMENTS

Certain subsidiaries of the Company are subject to the net capital
requirements of the New York Stock Exchange ("Exchange") and the Uniform Net
Capital requirements of the Securities and Exchange Commission ("Commission")
under Rule 15c3-1. The Exchange and the Commission also provide that equity
capital may not be withdrawn or cash dividends paid if certain minimum net
capital requirements are not met. The Company's principal regulated subsidiaries
are discussed below.

Tucker Anthony is a registered broker and dealer. At December 31, 1997,
Tucker Anthony had net capital of approximately $47.0 million which was $46.0
million in excess of the $1 million amount required to be maintained at that
date.

Sutro is a registered broker and dealer. At December 31, 1997, Sutro had
net capital of approximately $9.7 million which was $8.7 million in excess of
the $1.0 million amount required to be maintained at that date.

Freedom Trust Company ("FTC") is a subsidiary of Freedom Capital and is a
limited purpose trust company. Pursuant to state regulations, FTC is required to
meet and maintain certain capital minimums and ratios. At December 31, 1997,
FTC's regulatory capital, as defined, was $1.1 million and FTC was in compliance
with all such requirements.

Under the clearing arrangement with Wexford, Tucker Anthony and Sutro are
required to maintain certain minimum levels of net capital and comply with other
financial ratio requirements. At December 31, 1997, Tucker Anthony and Sutro
were in compliance with all such requirements.

In accordance with the provisions of the credit agreement (see note 8), the
Company and its principal subsidiaries have executed agreements to guarantee the
borrowings to the benefit of the participating banks. The stock of the Company's
subsidiaries currently is pledged as security under the terms of the credit
agreement. Under the financial covenants of this credit agreement, the maturity
of amounts borrowed may be accelerated if the Company breaches certain
provisions of the credit agreement, among which are requirements for the Company
and its principal subsidiaries to maintain minimum levels, as defined, including
leverage ratio and net capital. The Company was in compliance with these
covenants at December 31, 1997.

11. COMMITMENTS AND CONTINGENCIES

The Company leases office space and various types of equipment under
noncancelable leases generally varying from one to ten years, with certain
renewal options for like terms. Rent expense was $18.1 million for the year
ended December 31, 1995, $22.5 million for the eleven month period ended
November 29, 1996, $1.5 million for the one month period ended December 31, 1996
and $15.9 million for the year ended 1997. Included in rent expense for the
eleven month period ended November 29, 1996 is $4.7 million of expense related
to the present value of future rent costs for space no longer required due
primarily to the outsourcing of clearing services.

F-13
<PAGE> 84

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
At December 31, 1997, the Company's future minimum rental commitments based
upon original terms (including escalation costs) under noncancelable leases
which have an initial or remaining term of one year or more are as follows (in
thousands):

<TABLE>
<S> <C>
1998.............................................. $ 17,204
1999.............................................. 16,915
2000.............................................. 15,025
2001.............................................. 14,350
2002.............................................. 13,586
Thereafter........................................ 26,184
--------
Sub-total....................................... 103,264
Less aggregate sublease income.................... (3,847)
--------
$ 99,417
========
</TABLE>

The Company is a defendant or co-defendant in legal actions primarily
relating to its broker-dealer activities. It is the opinion of management, after
consultation with counsel, that the resolution of these actions will not have a
material adverse effect on the consolidated financial position and results of
operations of the Company. Included in other operating expenses, for the eleven
month period ended November 29, 1996, is $6.3 million of insurance recoveries
relating to certain litigation costs that were incurred in prior years.

The Company has outstanding underwriting agreements and when-issued
contracts which commit it to purchase securities at specified future dates and
prices. The Company presells such issues to manage risk exposure related to
these off-balance sheet commitments. Subsequent to December 31, 1997, such
transactions settled at no loss.

In the normal course of business, the Company may enter into transactions
in financial instruments to manage its exposure to market risks. There were no
open contracts outstanding at December 31, 1996. At December 31, 1997, the
Company had open options on futures contracts outstanding approximating $34.5
million (notional amount). The notional amounts are not reflected on the
Consolidated Statements of Financial Condition and are indicative only of the
volume of activity at December 31, 1997. They do not represent amounts subject
to market risks, and in many cases, limit the Company's overall exposure to
market losses by hedging other on-balance sheet and off-balance sheet
transactions. The volume of activity in these contracts was not significant
during the years ended December 31, 1995, 1996 and 1997.

12. BENEFITS

Certain subsidiaries of the Company have qualified profit-sharing plans
which cover substantially all their full-time employees. Each plan includes a
salary reduction agreement and a matching contribution subject to certain
limitations. In addition, a subsidiary may contribute additional amounts to its
plan, at its discretion, based upon its profits for the year.

The aggregate contributions to these plans for the year ended December 31,
1995, the eleven month period ended November 29, 1996, the one month period
ended December 31, 1996 and the year ended December 31, 1997 were $6.4 million,
$5.5 million, $0.5 million and $7.1 million, respectively.

Freedom Capital has a noncontributory defined benefit pension plan covering
substantially all of its employees. Effective August 1, 1997, the plan was
amended to provide that no new pension benefits will accrue and no new
participants will be admitted after August 1, 1997. Amounts related to the plan
are not material to the consolidated financial statements.

Compensation cost recognized for Common Stock and stock options issued to
employees during 1997 was $1.4 million.

F-14
<PAGE> 85

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

Substantially all of the Company's financial instruments are carried at
fair value or amounts approximating fair value. Assets, including cash and cash
equivalents, securities owned, securities purchased under agreements to resell
and certain receivables are carried at fair value or contracted amounts which
approximate fair value. Similarly, liabilities including securities sold, not
yet purchased, securities sold under agreements to repurchase and certain
payables are carried at fair value or contracted amounts approximating fair
value.

The fair value of the fixed asset financing estimated using the Company's
incremental borrowing rate, approximated its carrying value at December 31, 1997
and 1996. The carrying value of the Company's debt under the variable rate
credit agreement approximates its fair value.

14. EARNINGS PER COMMON SHARE

The Company computes its earnings per share in accordance with SFAS 128
"Earnings Per Share." The following table sets forth the computation for basic
and diluted earnings per share (in thousands except per share amounts):

<TABLE>
<CAPTION>
ONE MONTH ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1997
----------------- -----------------
BASIC AND BASIC AND
DILUTED DILUTED
<S> <C> <C>
NUMERATOR:
Net Income............................................... $ 740 $18,698
------ ------
DENOMINATOR:
Weighted Average Shares Outstanding...................... 7,873 7,859
Dilutive effect (including the impact of Staff Accounting
Bulletin No. 83) of:
Common Stock issued to employees during the year...... 219 183
Stock options and other exercisable shares............ 503 503
------ ------
Adjusted weighted average shares outstanding.......... 8,595 8,545
------ ------
Earnings per share......................................... $ .09 $ 2.19
</TABLE>

15. STOCK OPTIONS

The Company's 1996 Stock Option Plan ("the Plan") provides for granting
officers and other key employees options to purchase shares of common stock at
the fair market value of the stock on the date of grant or such other prices as
provided by the Plan, and expire within either nine and one half years of
November 29, 1996, or ten years from the date of grant. The options vest over
periods from five to six years from November 29, 1996. Certain options issued
under performance-based agreements may be exercisable earlier, vesting over
three years for individual performance-based options and five years for Company
performance-based options, if certain individual and Company performance-based
goals are met. Regardless of whether these performance based targets are
attained, the options will vest no later than six years from November 29, 1996.
During 1997, the Company granted options on 1,285,287 shares, no options were
exercised, and options on 104,031 shares were forfeited. All options have an
exercise price of $10. At December 31, 1997, 1,200,000 shares were authorized
for issuance under options and options on 1,181,256 shares were outstanding,
with a weighted-average remaining contractual life of 8.6 years. At December 31,
1997, options on 153,451 shares were exercisable, with a weighted-average
remaining contractual life of 8.6 years.

F-15
<PAGE> 86

FREEDOM SECURITIES CORPORATION AND
FREEDOM SECURITIES HOLDING CORPORATION ("PREDECESSOR COMPANY")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. STOCK OPTIONS (CONTINUED)
The Company accounts for stock option grants in accordance with the
provisions of Accounting Principles Board Opinion ("APB") No. 25 "Accounting for
Stock Issued to Employees." Had compensation expense for the Company's stock
options been determined on the fair value at the date of grant for awards under
the Plan, consistent with the method of SFAS 123 "Accounting for Stock Based
Compensation," the Company's net income and earnings per share would have been
reduced to pro forma amounts presented below (in thousands except per share
amounts):

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
<S> <C> <C>
Net income........................................ As reported $ 18,698
Pro forma 18,318
Basic and diluted earnings per share.............. As reported 2.19
Pro forma 2.14
</TABLE>

The pro forma information presented is not representative of the effect
stock options will have on net income or earnings per share for future years.

The fair value of each option granted during the year ended December 31,
1997 is the estimated present value at grant date using the minimum value model
with the following assumptions: (i) dividend yield of 0.8%, (ii) expected life
of 6 years, and (iii) risk free interest rate of 5.4%. The weighted-average fair
value of the options on 1,170,350 shares granted January 31, 1997 whose exercise
price equals the fair market value of the Company's stock on grant date was
$2.36. The weighted-average fair value of the options on 114,937 shares granted
subsequent to January 31, 1997 whose exercise price is less than the fair market
value of the Company's stock on grant date was $7.95.

16. QUARTERLY INFORMATION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
--------------------------------------------------------- ONE
THREE MONTHS ENDED TWO MONTH ENDED
---------------------------------------- MONTHS ENDED DECEMBER
MARCH 31, JUNE 30, SEPTEMBER 30, NOVEMBER 29, 31,
1996 1996 1996 1996 1996
<S> <C> <C> <C> <C> <C>
Net revenues................... $89,281 $ 88,168 $ 81,034 $ 62,546 $ 28,796
Income before income taxes..... 6,440 5,361 4,480 4,106 1,420
Net income..................... 3,677 3,029 2,517 2,320 740
Basic and diluted earnings per
share........................ -- -- -- -- $ .09
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1997 1997 1997 1997
<S> <C> <C> <C> <C> <C>
Net revenues................... $84,448 $ 85,129 $ 103,579 $102,599
Income before income taxes..... 6,043 5,040 10,464 10,888
Net income..................... 3,493 2,918 5,967 6,320
Basic and diluted earnings per
share........................ $ .41 $ .34 $ .70 $ .74
</TABLE>

F-16
<PAGE> 87

======================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY OF THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY
OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS
PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 8
Use of Proceeds...................... 16
Dividend Policy...................... 16
Capitalization....................... 17
Dilution............................. 18
Selected Historical Consolidated
Financial and Other Data........... 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 21
Business............................. 32
Management........................... 45
Principal and Selling Stockholders... 54
Certain Transactions................. 56
Description of Capital Stock......... 60
Shares Eligible for Future Sale...... 62
Underwriting......................... 64
Tax Consequences to Non-U.S.
Holders............................ 66
Legal Matters........................ 68
Experts.............................. 68
Additional Information............... 69
Index to Financial Statements........ F-1
</TABLE>

------------------------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENT OR SUBSCRIPTIONS.
======================================================
======================================================

SHARES
[LOGO]
COMMON STOCK
-------------------------

P R O S P E C T U S
-------------------------
DONALDSON, LUFKIN & JENRETTE

SECURITIES CORPORATION

CREDIT SUISSE FIRST BOSTON
SUTRO & CO. INCORPORATED
TUCKER ANTHONY
INCORPORATED

======================================================
<PAGE> 88

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The expenses (other than underwriting discount and commissions) payable in
connection with the sale of the Common Stock offered hereby (including the
Common Stock which may be sold pursuant to the Underwriters' over-allotment
option) are as follows, all of which will be paid by the Company:

<TABLE>
<CAPTION>
AMOUNT
<S> <C>
Commission registration fee............................................. $ 40,710
NASD filing fee......................................................... 14,300
NYSE fee................................................................
Printing expenses.......................................................
Legal fees and expenses.................................................
Accounting fees and expenses............................................
Blue sky fees and expenses (including legal fees and expenses)..........
Transfer agent and registrar fees and expenses..........................
Miscellaneous...........................................................
-----------
Total.............................................................. $
===========
</TABLE>

- - - - - - - - - - - - - - - ------------------------------
* All amounts are estimated, except Commission registration, NASD and NYSE fees.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware provides as
follows:

A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly

II-1
<PAGE> 89

and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

In addition, pursuant to its Articles of Organization and Bylaws, the
Company shall indemnify its directors and officers against expenses (including
judgments or amounts paid in settlement) incurred in any action, civil or
criminal, to which any such person is a party by reason of any alleged act or
failure to act in his capacity as such, except as to a matter as to which such
director or officer shall have been finally adjudged not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
corporation.

The Underwriting Agreement provides that the Underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of the Company against certain liabilities, including liabilities under
the Securities Act. Reference is made to the form of Underwriting Agreement
filed as Exhibit 1.1 hereto.

The Company maintains directors and officers liability insurance for the
benefit of its directors and certain of its officers and has entered into
indemnification agreements with its directors and certain of its officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, the Company has issued the following
securities, none of which have been registered under the Securities Act:

(a) On November 29, 1996, the Company sold an aggregate of 454,500
shares of Common Stock for an aggregate consideration of $4,545,000 in
transactions exempt from registration pursuant to Rule 701 under the
Securities Act.

(b) On November 29, 1996, in transactions exempt from registration
pursuant to Section 4(2) of the Securities Act, the Company sold an
aggregate of 7,440,154 shares of Common Stock to accredited investors for
an aggregate consideration of $74,401,540.

(c) During 1997 the Company granted options to purchase 1,285,287
shares of Common Stock to certain employees of the Company, each with an
exercise price of $10.00, in transactions exempt from registration pursuant
to Section 4(2) and Rule 701 under the Securities Act.

(d) During 1997, in transactions exempt from registration pursuant to
Section 4(2) of the Securities Act, the Company sold an aggregate of
268,508 shares of Common Stock for aggregate consideration of $3,265,061 to
employees of the Company and its Subsidiaries who were accredited
investors. In addition, Hancock has indicated that it will exercise its
pre-emptive right to purchase an aggregate of 16,247 shares of Common Stock
for aggregate consideration of $197,564.

II-2
<PAGE> 90

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBITS
NO. DESCRIPTION OF DOCUMENTS
<C> <S>
*1.1 Form of Underwriting Agreement
3.1 Restated Articles of Organization of the Registrant to be effective prior to
effectiveness of the Registration Statement
3.2 Bylaws of the Registrant to be effective prior to effectiveness of the
Registration Statement
*4.1 Form of Stock Certificate
*5.1 Form of Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation
10.1 Contribution Agreement by and among the Registrant, Hancock, THL and SCP, dated
as of October 4, 1996
10.2 Stockholders Agreement by and among the Registrant and the persons listed on the
signature pages thereof as the Initial Investors, SCP Initial Investor, Employee
Investors and Seller Initial Investor dated as of November 30, 1996
10.3 Revolving Credit Agreement by and among the Registrant and The First National
Bank of Boston, as agent for the lenders listed on Schedule 1 thereto, dated as
of November 29, 1996
10.4 Additional Share Agreement by and between the Registrant and Hancock, dated as of
November 29, 1996
10.5 Tax Matters Agreement by and between the Registrant and Hancock, dated as of
November 29, 1996
10.6 Contribution and Indemnity Agreement by and between the Registrant and John H.
Goldsmith, dated as of November 29, 1996
10.7 Management Agreement by and between the Registrant and THL, dated as of November
29, 1996
10.8 Management Agreement by and between the Registrant and SCP, dated as of November
29, 1996
10.9 1996 Stock Option Plan
10.10 Employment Agreement by and between the Registrant and John H. Goldsmith, dated
as of November 29, 1996
10.11 Employment Agreement by and between the Registrant and Gregory N. Thomas, dated
as of December 3, 1997
10.12 Letter Agreement by and between the Registrant and William C. Dennis, Jr., dated
as of April 2, 1997
**10.13 Agreement, by and among Prudential Securities Incorporated, John Hancock Clearing
Corporation, Tucker Anthony Incorporated and Sutro & Co. Incorporated
10.14 Form of TAMP Incentive Plan Limited Partnership Limited Partnership Agreement,
dated as of July 1, 1989
10.15 Form of TAMP II Incentive Plan Limited Partnership Limited Partnership Agreement,
dated as of February 28, 1995
10.16 Form of TAMM II Incentive Plan Limited Partnership Limited Partnership Agreement,
dated April 8, 1984
10.17 Form of Sutro Venture Partners I, L.P. Limited Partnership Agreement, dated as of
March 21, 1996
10.18 Form of Sutro Venture Partners II, L.P. Limited Partnership Agreement, dated as
of March 21, 1996
10.19 Form of Operating Agreement for Sutro Investment Partners IV, LLC dated as of
June 30, 1997
21.1 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
*23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation (included in
Exhibit 5.1)
24.1 Power of Attorney (included on page II-5)
27.1 Financial Data Schedule
99.1 Consent of Mr. Thomas to be named as Director
</TABLE>

II-3
<PAGE> 91

- - - - - - - - - - - - - - - ---------------
* To be filed by amendment.

** Confidential Treatment Requested as to certain portions, which portions have
been omitted and filed separately with the Commission.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing the specified in the underwriting agreement, certificates in such
denomination and registered in such names as required by the underwriter to
permit proper delivery to each purchaser.

The undersigned registrant hereby undertakes that: (1) For purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of his registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective; and (2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 above, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-4
<PAGE> 92

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement on Form S-1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in Boston,
Massachusetts, on January 26, 1998.

FREEDOM SECURITIES CORPORATION

By: /s/ JOHN H. GOLDSMITH
------------------------------------
Name: John H. Goldsmith
Title: Chief Executive Officer

We, the undersigned officers and directors of Freedom Securities Corp.,
hereby severally constitute and appoint John H. Goldsmith and William C. Dennis,
Jr. and each of them singly, to sign for us and in our names in the capacities
indicated below, the Registration Statement on Form S-1 filed herewith and any
and all pre-effective and post-effective amendments to said Registration
Statement, and, in connection with any registration of additional securities
pursuant to Rule 462(b) under the Securities Act of 1933, to sign any
abbreviated registration statement and any and all amendments thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, in each case, with the Securities and Exchange Commission, and
generally to do all such things in our names and on our behalf in our capacities
with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>

/s/ JOHN H. GOLDSMITH Chairman, Director and Chief January 26, 1998
- - - - - - - - - - - - - - - ----------------------------------- Executive Officer as well as Chief
John H. Goldsmith Executive Officer of Tucker Anthony
and Chairman of Sutro

/s/ WILLIAM C. DENNIS, JR. Chief Financial Officer January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
William C. Dennis, Jr.

/s/ DAVID V. HARKINS Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
David V. Harkins

/s/ C. HUNTER BOLL Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
C. Hunter Boll

/s/ THOMAS M. HAGERTY Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
Thomas M. Hagerty

/s/ SETH W. LAWRY Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
Seth W. Lawry

/s/ WINSTON J. CHURCHILL Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
Winston J. Churchill

/s/ JOHN F. LUIKART Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
John F. Luikart

/s/ ROBERT H. YEVICH Director January 26, 1998
- - - - - - - - - - - - - - - -----------------------------------
Robert H. Yevich
</TABLE>

II-5
<PAGE> 93

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBITS
NO. DESCRIPTION OF DOCUMENTS PAGE
- - - - - - - - - - - - - - - -------- --------------------------------------------------------------------------- ----
<C> <S> <C>
*1.1 Form of Underwriting Agreement
3.1 Restated Articles of Organization of the Registrant to be effective prior
to effectiveness of the Registration Statement
3.2 Bylaws of the Registrant to be effective prior to effectiveness of the
Registration Statement
*4.1 Form of Stock Certificate
*5.1 Form of Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation
10.1 Contribution Agreement by and among the Registrant, Hancock, THL and SCP,
dated as of October 4, 1996
10.2 Stockholders Agreement by and among the Registrant and the persons listed
on the signature pages thereof as the Initial Investors, SCP Initial
Investor, Employee Investors and Seller Initial Investor dated as of
November 30, 1996
10.3 Revolving Credit Agreement by and among the Registrant and The First
National Bank of Boston, as agent for the lenders listed on Schedule 1
thereto, dated as of November 29, 1996
10.4 Additional Share Agreement by and between the Registrant and Hancock, dated
as of November 29, 1996
10.5 Tax Matters Agreement by and between the Registrant and Hancock, dated as
of November 29, 1996
10.6 Contribution and Indemnity Agreement by and between the Registrant and John
H. Goldsmith, dated as of November 29, 1996
10.7 Management Agreement by and between the Registrant and THL, dated as of
November 29, 1996
10.8 Management Agreement by and between the Registrant and SCP, dated as of
November 29, 1996
10.9 1996 Stock Option Plan
10.10 Employment Agreement by and between the Registrant and John H. Goldsmith,
dated as of November 29, 1996
10.11 Employment Agreement by and between the Registrant and Gregory N. Thomas,
dated as of December 3, 1997
10.12 Letter Agreement by and between the Registrant and William C. Dennis, Jr.,
dated as of April 2, 1997
**10.13 Agreement, by and among Prudential Securities Incorporated, John Hancock
Clearing Corporation, Tucker Anthony Incorporated and Sutro & Co.
Incorporated
10.14 Form of TAMP Incentive Plan Limited Partnership Limited Partnership
Agreement, dated as of July 1, 1989
10.15 Form of TAMP II Incentive Plan Limited Partnership Limited Partnership
Agreement, dated as of February 28, 1995
10.16 Form of TAMM II Incentive Plan Limited Partnership Limited Partnership
Agreement, dated April 8, 1984
10.17 Form of Sutro Venture Partners I, L.P. Limited Partnership Agreement, dated
as of March 21, 1996
10.18 Form of Sutro Venture Partners II, L.P. Limited Partnership Agreement,
dated as of March 21, 1996
10.19 Form of Operating Agreement for Sutro Investment Partners IV, LLC dated as
of June 30, 1997
21.1 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
</TABLE>
<PAGE> 94

<TABLE>
<CAPTION>
EXHIBITS
NO. DESCRIPTION OF DOCUMENTS PAGE
- - - - - - - - - - - - - - - -------- --------------------------------------------------------------------------- ----
<C> <S> <C>
*23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-5)
27.1 Financial Data Schedule
99.1 Consent of Mr. Thomas to be named as Director
</TABLE>

- - - - - - - - - - - - - - - ---------------
* To be filed by amendment.

** Confidential Treatment Requested as to certain portions, which portions have
been omitted and filed separately with the Commission.

<PAGE> 1
EXHIBIT 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

FREEDOM SECURITIES CORPORATION

Freedom Securities Corporation, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY
as follows:
The date of filing of its original Certificate of
Incorporation with the Secretary of State of the State of Delaware was
August 29, 1996 and was amended on November 15, 1996 and January __,
1998.
The Board of Directors of the Corporation, by Unanimous
Written Consent of Directors dated __________, 1998, duly adopted
resolutions setting forth the Amended and Restated Certificate of
Incorporation herein contained, declaring its advisability and
directing that such Amended and Restated Certificate of Incorporation
be submitted to the holders of the issued and outstanding Common Stock,
$.01 par value ("Common Stock") for approval in accordance with the
applicable provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware and the Corporation's Amended
and Restated Certificate of Incorporation, as previously amended. The
Amended and Restated Certificate of Incorporation was duly adopted,
after having been declared advisable by the Board of Directors of the
Corporation, by in excess of a majority of the outstanding shares of
Common Stock, all in accordance with the

<PAGE> 2

applicable provisions of Sections 228, 242 and 245 of the General
Corporation Law of the State of Delaware and the Corporation's
Certificate of Incorporation.

The text of the Amended and Restated Certificate of
Incorporation of the Corporation, as restated and amended (herein
called the "Restated Certificate of Incorporation") shall read in its
entirety as follows: FIRST: The name of the Corporation shall be:

FREEDOM SECURITIES CORPORATION

SECOND: The registered office of the Corporation in the State of
Delaware is located at 1209 Orange Street, in the City of Wilmington, County of
New Castle, 19801, and its registered agent at such address is The Corporation
Trust Company.

THIRD: The purpose or purposes of the Corporation shall be to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is _________ shares, which shares shall be divided into
two classes consisting of: (i) ________ shares of Common Stock (with $.01 par
value per share) ("Common Stock") and (ii) ______ shares of Preferred Stock
(with $.01 par value per share) ("Blank Check Preferred Stock").

The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions of the Common Stock and the
Preferred Stock shall be as follows:

A. COMMON STOCK

1. VOTING RIGHTS. Except as otherwise required by law or this Restated
Certificate of Incorporation, each holder of Common Stock shall have one vote in
respect of each share of Common Stock held by him of record on the books of the
Corporation for the election of directors and on all matters submitted to a vote
of stockholders of the Corporation.

2. DIVIDENDS. The holders of shares of Common Stock shall be entitled
to receive, when and if declared by the Board of Directors, out of the assets of
the Corporation which are by law available therefor, dividends payable either in
cash, in property or in shares of capital stock, subject, however, to the
limitations contained in Part B below.

- 2 -

<PAGE> 3

3. DISSOLUTION, LIQUIDATION OR WINDING UP. After distribution in full
of the preferential amount, if any, to be distributed to the holders of series
of the Blank Check Preferred Stock (in accordance with the relative preferences
among such series) in the event of involuntary liquidation, distribution,
dissolution or winding-up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining assets of the Corporation,
tangible and intangible, or whatever kind available for distribution to
stockholders, ratably in proportion to the number of shares of Common Stock held
by them respectively.

B. BLANK CHECK PREFERRED STOCK

1. ISSUANCE. Shares of Blank Check Preferred Stock may be issued from
time to time in one or more series as may from time to time be determined by the
Board of Directors, each of said series to be distinctly designated. All shares
of any one series of the Blank Check Preferred Stock shall be alike in every
particular, except that there may be different dates from which dividends, if
any, thereon shall be cumulative, if made cumulative. The voting powers, if any,
and the designations, relative preferences, participating, optional or other
special rights or privileges of each such series, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.

2. AUTHORITY OF THE BOARD OF DIRECTORS. The Board of Directors is
authorized, subject to limitations prescribed by law and the provisions of this
Article FOURTH, to provide for the issuance of the shares of the Blank Check
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix in the
resolution or resolutions providing for the issue of such stock adopted by the
Board of Directors of the Corporation the voting powers, if any, and the
designations, relative preferences, participating, optional or other special
rights or privileges, and the qualifications, limitations or restrictions of
such series, including, but without limiting the generality of the foregoing,
the following:

(a) The distinctive designation of, and the number of shares
of the Blank Check Preferred Stock which shall constitute such
series. The designation of a series of preferred stock need
not include the words "preferred" or "preference" and may be
designated "special" or other distinctive term. Unless
otherwise provided in the resolution issuing such series, the
number of shares of any series of the Blank Check Preferred
Stock may be increased or decreased (but not below the number
of shares thereof then outstanding) by the Board of Directors
in the manner prescribed by law;

(b) The rate and times at which, and the terms and conditions
upon which, dividends, if any, on the Blank Check Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the

- 3 -

<PAGE> 4

dividends payable on any other class or classes, or series of
the same or other classes of stock and whether such dividends
shall be cumulative or non-cumulative and, if cumulative, the
date from which such dividends shall be cumulative;

(c) Whether the series shall be convertible into, or
exchangeable for, at the option of the holders of the Blank
Check Preferred Stock of such series or the Corporation or
upon the happening of a specified event, shares of any other
class or classes or any other series of the same or any other
class or classes of stock of the Corporation, and the terms
and conditions of such conversion or exchange, including
provisions for the adjustment of any such conversion rate in
such events as the Board of Directors shall determine;

(d) Whether or not the Blank Check Preferred Stock of such
series shall be subject to redemption at the option of the
Corporation or the holders of such series or upon the
happening of a specified event, and the redemption price or
prices and the time or times at which, and the terms and
conditions upon which, the Blank Check Preferred Stock of such
series may be redeemed;

(e) The rights, if any, of the holders of the Blank Check
Preferred Stock of such series upon the voluntary or
involuntary liquidation, merger, consolidation, distribution
or sale of assets, dissolution or winding-up, of the
Corporation;

(f) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Blank Check Preferred
Stock of such series; and

(g) Subject to subparagraph 5 of Paragraph C hereof, whether
such series of the Blank Check Preferred Stock shall have
full, limited or no voting powers including, without limiting
the generality of the foregoing, whether such series shall
have the right, voting as a series by itself or together with
other series of the Blank Check Preferred Stock or all series
of the Blank Check Preferred Stock as a class, to elect one or
more directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of the Blank Check Preferred Stock or under such other
circumstances and on such conditions as the Board of Directors
may determine.

C. OTHER PROVISIONS.

1. No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by

- 4 -

<PAGE> 5

reason of any increase of the authorized capital stock of the Corporation of any
class or series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the Corporation of any
class or series, or carrying any right to purchase stock of any class or series,
but any such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations or
associations (including such holders or others) and upon such terms as may be
deemed advisable by the Board of Directors in the exercise of its sole
discretion.

2. The relative powers, preferences and rights of each series of the
Blank Check Preferred Stock in relation to the powers, preferences and rights of
each other series of the Blank Check Preferred Stock shall, in each case, be as
fixed from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in Paragraph B hereof. The
consent, by class or series vote or otherwise, of the holders of such of the
series of the Blank Check Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors of any other
series of the Blank Check Preferred Stock whether or not the powers, preferences
and rights of such other series shall be fixed by the Board of Directors as
senior to, or on a parity with, the powers, preferences and rights of such
outstanding series, or any of them; provided, however, that the Board of
Directors may provide in the resolution or resolutions as to any series of the
Blank Check Preferred Stock adopted pursuant to Paragraph B hereof, the
conditions, if any, under which the consent of the holders of a majority (or
such greater proportion as shall be fixed therein) of the outstanding shares of
such series shall be required for the issuance of any or all other series of the
Blank Check Preferred Stock.

3. Subject to the provisions of subparagraph 2 of this Paragraph C,
shares of any series of the Blank Check Preferred Stock may be issued from time
to time as the Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of Directors.

4. Shares of authorized Common Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.

5. The number of authorized shares of Common Stock and of the Blank
Check Preferred Stock, without a class or series vote, may be increased or
decreased from time to time (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote thereon.

- 5 -

<PAGE> 6

FIFTH:

A. NUMBER, ELECTION AND TERMS OF DIRECTORS. The number of directors
shall be fixed from time to time exclusively by the Board of Directors pursuant
to a resolution adopted by the Board of Directors.

B. REMOVAL. Any Director or the entire Board of Directors may be
removed with or without cause by the holders of a majority of the shares then
entitled to vote at an election of Directors, or a majority vote of the Board of
Directors.

C. AMENDMENT, REPEAL OR ALTERATION. Notwithstanding any other
provisions of the Restated Certificate of Incorporation or the Restated By-Laws
of the Corporation or the fact that a lesser percentage may be specified by law,
the affirmative vote of the holders of greater than fifty percent (50%) of the
combined voting power of the outstanding stock of the Corporation entitled to
vote generally in the election of Directors, voting together as a single class,
shall be required to amend, alter, adopt any provision inconsistent with or to
repeal this Article FIFTH.

SIXTH: The Corporation hereby affirmatively elects in this Restated
Certificate of Incorporation to be governed by Section 203 of the General
Corporation Law of Delaware.

SEVENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.

EIGHTH: No director shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
notwithstanding

- 6 -

<PAGE> 7

any provision of law imposing such liability; PROVIDED that, to the extent
provided by applicable law, this provision shall not eliminate the liability of
a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.

NINTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware.

A. The Board of Directors of the Corporation is expressly authorized to
adopt, amend, or repeal the By-laws of the Corporation.

B. Elections of directors need not be by written ballot unless the
By-laws of the Corporation shall so provide.

C. The books of the Corporation may be kept at such place within or
without the State of Delaware as the By-laws of the Corporation may provide or
as may be designated from time to time by the Board of Directors of the
Corporation.

TENTH: Except as otherwise stated elsewhere in this Restated
Certificate of Incorporation, the Corporation reserves the right to amend or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred upon
a stockholder herein are granted subject to this reservation.

ELEVENTH: The Corporation is to have perpetual existence.

[Remainder of Page Intentionally Left Blank]

- 7 -

<PAGE> 8

IN WITNESS WHEREOF, Freedom Securities Corporation has caused its
corporate seal to be hereunto affixed and this Restated Certificate of
Incorporation to be signed by John H. Goldsmith, its President, who hereby
acknowledges under penalties of perjury that the facts herein stated are true
and that this Restated Certificate of Incorporation is his act and deed, and
attested by Kevin J. McKay its Secretary, as of the ___ day of _________, 1998.

Freedom Securities Corporation

By:
-----------------------------
Name: John H. Goldsmith
Title: President

ATTEST:

By:
----------------------------
Name: Kevin J. McKay
Title: Secretary

- 8 -

<PAGE> 1
Exhibit 3.2

AMENDED AND RESTATED
--------------------

BY-LAWS
-------

FREEDOM SECURITIES CORPORATION
------------------------------

(A Delaware Corporation)

(F/K/A JHFSC Acquisition Corp.)

<PAGE> 2

Effective Date: ____________

AMENDED AND RESTATED

BY-LAWS

Freedom Securities Corporation

(A Delaware Corporation)

ARTICLE 1
CERTIFICATE OF INCORPORATION..........................................1
Section 1.1 CONTENTS.................................................1
Section 1.2 CERTIFICATE IN EFFECT....................................1

ARTICLE 2
MEETINGS OF STOCKHOLDERS..............................................1
Section 2.1 PLACE....................................................1
Section 2.2 ANNUAL MEETING...........................................2
Section 2.3 NOTICE OF STOCKHOLDER BUSINESS...........................2
Section 2.4 SPECIAL MEETINGS.........................................3
Section 2.5 NOTICE OF MEETINGS.......................................3
Section 2.6 AFFIDAVIT OF NOTICE......................................4
Section 2.7 QUORUM...................................................4
Section 2.8 VOTING REQUIREMENTS......................................4
Section 2.9 PROXIES AND VOTING.......................................5
Section 2.10 ACTION WITHOUT MEETING..................................5
Section 2.11 STOCKHOLDER LIST........................................6
Section 2.12 RECORD DATE.............................................6

ARTICLE 3
DIRECTORS.............................................................7
Section 3.1 NUMBER; ELECTION AND TERM OF OFFICE......................7
Section 3.2 DUTIES...................................................8
Section 3.3 COMPENSATION.............................................8
Section 3.4 RELIANCE ON BOOKS........................................9

<PAGE> 3

ARTICLE 4
MEETINGS OF THE BOARD OF DIRECTORS.....................................9
Section 4.1 PLACE.....................................................9
Section 4.2 ANNUAL MEETING............................................9
Section 4.3 REGULAR MEETINGS..........................................9
Section 4.4 SPECIAL MEETINGS..........................................9
Section 4.5 QUORUM...................................................10
Section 4.6 ACTION WITHOUT MEETING...................................10
Section 4.7 TELEPHONE MEETINGS.......................................10

ARTICLE 5
COMMITTEES OF DIRECTORS...............................................11
Section 5.1 DESIGNATION..............................................11
Section 5.2 RECORDS OF MEETINGS......................................12

ARTICLE 6
NOTICES...............................................................12
Section 6.1 METHOD OF GIVING NOTICE..................................12
Section 6.2 WAIVER...................................................12

ARTICLE 7
OFFICERS..............................................................13
Section 7.1 IN GENERAL...............................................13
Section 7.2 ELECTION OF PRESIDENT, SECRETARY AND TREASURER...........13
Section 7.3 ELECTION OF OTHER OFFICERS...............................13
Section 7.4 SALARIES.................................................13
Section 7.5 TERM OF OFFICE...........................................13
Section 7.6 DUTIES OF PRESIDENT AND CHAIRMAN OF THE BOARD............13
Section 7.7 DUTIES OF VICE PRESIDENT.................................14
Section 7.8 DUTIES OF SECRETARY......................................14
Section 7.9 DUTIES OF ASSISTANT SECRETARY............................15
Section 7.10 DUTIES OF TREASURER.....................................15
Section 7.11 DUTIES OF ASSISTANT TREASURER...........................16

ARTICLE 8
RESIGNATIONS, REMOVALS AND VACANCIES..................................16
Section 8.1 DIRECTORS................................................16
Section 8.2 OFFICERS.................................................17

ARTICLE 9
CERTIFICATE OF STOCK..................................................17
Section 9.1 ISSUANCE OF STOCK........................................18
Section 9.2 RIGHT TO CERTIFICATE; FORM...............................18
Section 9.3 FACSIMILE SIGNATURE......................................18
Section 9.4 LOST CERTIFICATES........................................18

<PAGE> 4

Section 9.5 TRANSFER OF STOCK........................................19
Section 9.6 REGISTERED STOCKHOLDERS..................................19

ARTICLE 10
INDEMNIFICATION.......................................................19
Section 10.1 THIRD PARTY ACTIONS.....................................20
Section 10.2 DERIVATIVE ACTIONS......................................20
Section 10.3 EXPENSES................................................21
Section 10.4 AUTHORIZATION...........................................21
Section 10.5 ADVANCE PAYMENT OF EXPENSES.............................22
Section 10.6 NON-EXCLUSIVENESS.......................................22
Section 10.7 INSURANCE...............................................22
Section 10.8 CONSTITUENT CORPORATIONS................................23
Section 10.9 ADDITIONAL INDEMNIFICATION..............................23

ARTICLE 11
EXECUTION OF PAPERS...................................................23

ARTICLE 12
FISCAL YEAR...........................................................24

ARTICLE 13
SEAL..................................................................24

ARTICLE 14
OFFICES...............................................................25

ARTICLE 15
AMENDMENTS............................................................25

<PAGE> 5

FREEDOM SECURITIES CORPORATION

AMENDED AND RESTATED BY-LAWS

ARTICLE 1

CERTIFICATE OF INCORPORATION

SECTION 1.1 CONTENTS. The name, location of principal office and purposes
of the Corporation shall be as set forth in its Certificate of Incorporation.
These By-Laws, the powers of the Corporation and of its Directors and
stockholders, and all matters concerning the conduct and regulation of the
business of the Corporation shall be subject to such provisions in regard
thereto, if any, as are set forth in said Certificate of Incorporation. The
Certificate of Incorporation is hereby made a part of these By-Laws.

SECTION 1.2 CERTIFICATE IN EFFECT. All references in these By-Laws to the
Certificate of Incorporation shall be construed to mean the Certificate of
Incorporation of the Corporation as from time to time amended, including (unless
the context shall otherwise require) all certificates and any agreement of
consolidation or merger filed pursuant to the Delaware General Corporation Law,
as amended.

ARTICLE 2

MEETINGS OF STOCKHOLDERS

SECTION 2.1 PLACE. All meetings of the stockholders may be held at such
place either within or without the State of Delaware as shall be designated from
time to time by the Board of Directors, the Chairman of the Board of Directors
or the President and stated in the notice of the meeting or in any duly executed
waiver of notice thereof.

<PAGE> 6

SECTION 2.2 ANNUAL MEETING. Annual meetings of stock holders, shall be held
on the 2nd Tuesday of April in each year, if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 10:00 A.M., or at such other
date and time as shall be designated from time to time by the Board of
Directors, the Chairman of the Board of Directors or the President and stated in
the notice of the meeting. If such annual meeting has not been held on the day
herein provided therefor, a special meeting of the stockholders in lieu of the
annual meeting may be held, and any business transacted or elections held at
such special meeting shall have the same effect as if transacted or held at the
annual meeting, and in such case all references in these By-Laws, except in this
Section 2.2, to the annual meeting of the stockholders shall be deemed to refer
to such special meeting.

SECTION 2.3 NOTICE OF STOCKHOLDER BUSINESS. To be properly brought before
the meeting, business must be of a nature that is appropriate for consideration
at an Annual Meeting and must be (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, or
(ii) otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by a
stockholder. In addition to any other applicable requirements, for business to
be properly brought before the Annual Meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, each such notice must be given either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (1) with respect to a matter to be brought before an
Annual Meeting of Stockholders or a Special Meeting in Lieu of an Annual
Meeting, sixty (60) days prior to the date set forth in the By-Laws for the
Annual Meeting and (2) with respect to a matter

<PAGE> 7

to be brought before a Special Meeting of the Stockholders not in lieu of an
Annual Meeting, the close of business on the tenth day following the date on
which notice of such meeting is first given to stockholders. The notice shall
set forth (i) information concerning the stockholder, including his or her name
and address, (ii) a representation that the stockholder is entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
present the matter specified in the notice, and (iii) such other information as
would be required to be included in a proxy statement soliciting proxies for the
presentation of such matter to the meeting.

Notwithstanding anything in these By-Laws to the contrary, no business
shall be transacted at the Annual Meeting except in accordance with the
procedures set forth in this section; provided, however, that nothing in this
section shall be deemed to preclude discussion by any stockholder of any
business properly brought before the Annual Meeting in accordance with these
By-Laws.

SECTION 2.4 SPECIAL MEETINGS. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the President, the Chairman of
the Board, or by the Board of Directors and shall be called by the President or
Secretary at the request in writing of a majority of the Directors then in
office. Such request shall state the purpose or purposes of the proposed
meeting, which need not be the exclusive purposes for which the meeting is
called. The stockholders shall not have the right, in their capacity as
stockholders, to call a special meeting of the stockholders.

SECTION 2.5 NOTICE OF MEETINGS. A written notice of all meetings of
stockholders stating the place, date and hour of the meeting and, in the case of
a special meeting, the purpose or

<PAGE> 8

purposes for which the special meeting is called, shall be given to each
stockholder entitled to vote at such meeting. Except as otherwise provided by
law, such notice shall be given not less than ten nor more than sixty days
before the date of the meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.

SECTION 2.6 AFFIDAVIT OF NOTICE. An affidavit of the Secretary or an
Assistant Secretary or the transfer agent of the Corporation that notice of a
stockholders meeting has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.

SECTION 2.7 QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented by proxy at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, except as hereinafter provided, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

SECTION 2.8 VOTING REQUIREMENTS. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon

<PAGE> 9

which by express provision of any applicable statute or of the Certificate of
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.

SECTION 2.9 PROXIES AND VOTING. Unless otherwise provided in the
Certificate of Incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after three years from its date, unless the proxy provides for a
longer period. Persons holding stock in a fiduciary capacity shall be entitled
to vote the shares so held, and persons whose stock is pledged shall be entitled
to vote the pledged shares, unless in the transfer by the pledgor on the books
of the Corporation he shall have expressly empowered the Pledgee to vote said
shares, in which case only the pledgee, or his proxy, may represent and vote
such shares. Shares of the capital stock of the Corporation owned by the
Corporation shall not be voted, directly or indirectly.

SECTION 2.10 ACTION WITHOUT MEETING. Unless otherwise provided in the
Certificate of Incorporation, until the closing of an underwritten public
offering of the Corporation's Common Stock (a "Public Offering") any action
referred or permitted to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without
vote, if a consent in writing, setting forth the action so taken, is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote on such action were present and voted. Prompt
notice of the taking of corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing.

<PAGE> 10

Effective upon the closing of a Public Offering, any action required or
permitted to be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without vote, only if all
stockholders entitled to vote on the matter consent to the action in writing and
written consents are filed with the records of the meetings of the stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.

SECTION 2.11 STOCKHOLDER LIST. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The original or duplicate stock ledger shall be the only evidence as to
who are the stockholders entitled to examine such list, the stock ledger or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.

SECTION 2.12 RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights

<PAGE> 11

in respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

If no record date is fixed by the Board of Directors:

(a) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held.

(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed.

(c) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.

ARTICLE 3

DIRECTORS

SECTION 3.1 NUMBER; ELECTION AND TERM OF OFFICE. There shall be a Board of
Directors of the Corporation consisting of not less than one member, the number
of members to be determined by resolution of the Board of Directors, unless the
Certificate of Incorporation fixes

<PAGE> 12

the number of Directors, in which case a change in the number of Directors shall
be made only by amendment of the Certificate. The Board of Directors shall be
divided into such classes for such terms as are provided for in the Certificate
of Incorporation. Subject to any limitation which may be contained within the
Certificate of Incorporation, the number of the Board of Directors may be
increased at any time by vote of a majority of the Directors then in office. The
Directors shall be elected at the annual meeting of the stockholders at which
the term of office of the class to which they have been elected expires, except
as provided in paragraph (c) of Section 8.1, and each Director elected shall
hold office until his successor is elected and qualified or until his earlier
resignation or removal. Directors need not be stockholders.

SECTION 3.2 DUTIES. The business of the Corporation shall be managed by or
under the direction of its Board of Directors which may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these By-Laws directed or required
to be exercised or done by the stockholders.

SECTION 3.3 COMPENSATION. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, the Board of Directors shall have the authority
to fix the compensation of Directors. The Directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as Directors. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.

<PAGE> 13

SECTION 3.4 RELIANCE ON BOOKS. A member of the Board of Directors or a
member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Corporation by any of its officers, or
by an independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any committee, or in relying in
good faith upon other records of the Corporation.

ARTICLE 4

MEETINGS OF THE BOARD OF DIRECTORS

SECTION 4.1 PLACE. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.

SECTION 4.2 ANNUAL MEETING. The first meeting of each newly elected Board
of Directors shall be held immediately following the annual meeting of
stockholders or any special meeting held in lieu thereof, and no notice of such
meeting shall be necessary to the newly elected Directors in order legally to
constitute the meeting.

SECTION 4.3 REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall from time to
time be determined by the Board.

SECTION 4.4 SPECIAL MEETINGS. Special meetings of the Board may be called
by the President on two days' notice to each Director either personally or by
mail or by telegram; special meetings shall be called by the President or
Secretary in like manner and on like notice on the written request of two
Directors unless the Board consists of only one Director, in which case

<PAGE> 14

special meetings shall be called by the President or Secretary in like manner
and on like notice on the written request of the sole Director.

SECTION 4.5 QUORUM. At all meetings of the Board a majority of the
Directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be Present at any meeting of the Board of
Directors, the Directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

SECTION 4.6 ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.

SECTION 4.7 TELEPHONE MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.

<PAGE> 15

ARTICLE 5

COMMITTEES OF DIRECTORS

SECTION 5.1 DESIGNATION.

(a) The Board of Directors may, by resolution passed by a majority of
the whole Board, designate one or more committees, each committee to consist of
one or more of the Directors of the Corporation. The Board may designate one or
more Directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee.

(b) In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

(c) Any such committee, to the extent provided in the resolution of
the Board of Directors designating the committee, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-Laws of the Corporation; and, unless the resolution or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or

<PAGE> 16

authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors.

SECTION 5.2 RECORDS OF MEETINGS. Each committee shall keep regular minutes
of its meetings and report the same to the Board of Directors when required.

ARTICLE 6

NOTICES

SECTION 6.1 METHOD OF GIVING NOTICE. Whenever, under any provision of the
law or of the Certificate of Incorporation or of these By-Laws, notice is
required to be given to any Director or stockholder, such notice shall be given
in writing by the Secretary or the person or persons calling the meeting by
leaving such notice with such Director or stockholder at his residence or usual
place of business or by mailing it addressed to such Director or stockholder, at
his address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Notice to Directors may
also be given by telegram.

SECTION 6.2 WAIVER. Whenever any notice is required to be given under any
provision of law or of the Certificate of Incorporation or of these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened.

<PAGE> 17

ARTICLE 7

OFFICERS

SECTION 7.1 IN GENERAL. The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President, a Secretary and a
Treasurer. The Board of Directors may also choose a Chairman of the Board, one
or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these By-Laws otherwise provide.

SECTION 7.2 ELECTION OF PRESIDENT, SECRETARY AND TREASURER. The Board of
Directors at its first meeting after each annual meeting of stockholders shall
choose a President, a Secretary and a Treasurer.

SECTION 7.3 ELECTION OF OTHER OFFICERS. The Board of Directors may appoint
such other officers and agents as it shall deem appropriate who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board.

SECTION 7.4 SALARIES. The salaries of all officers and agents of the
Corporation may be fixed by the Board of Directors.

SECTION 7.5 TERM OF OFFICE. The officers of the Corporation shall hold
office until their successors are chosen and qualify or until their earlier
resignation or removal. Any officer elected or appointed by the Board of
Directors may be removed at any time in the manner specified in Section 8.2.

SECTION 7.6 DUTIES OF PRESIDENT AND CHAIRMAN OF THE BOARD. The President
shall be the chief executive officer of the Corporation, shall preside at all
meetings of the stockholders and, if

<PAGE> 18

he is a Director, at all meetings of the Board of Directors if there shall be no
Chairman of the Board or in the absence of the Chairman of the Board, shall have
general and active management of the business of the Corporation and shall see
that all orders and resolutions of the Board of Directors are carried into
effect. The President shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation. The Chairman of the
Board, if any, shall make his counsel available to the other officers of the
Corporation, shall be authorized to sign stock certificates on behalf of the
Corporation, shall preside at all meetings of the Directors at which he is
present, and, in the absence of the President at all meetings of the
stockholders, and shall have such other duties and powers as may from time to
time be conferred upon him by the Directors.

SECTION 7.7 DUTIES OF VICE PRESIDENT. In the absence of the President or in
the event of his inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the Directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President not otherwise
conferred upon the Chairman of the Board, if any, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the President. The
Vice Presidents shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.

SECTION 7.8 DUTIES OF SECRETARY. The Secretary shall attend all meetings of
the Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of

<PAGE> 19

the Corporation and of the Board of Directors in a book to be kept for that
purpose and shall perform like duties for the standing committees when required.
He shall give, or cause to be given, notice of all meetings of the stockholders
and special meetings of the Board of Directors, except as otherwise provided in
these By-Laws, and shall perform such other duties as may be prescribed by the
Board of Directors or President, under whose supervision he shall be. He shall
have charge of the stock ledger (which may, however, be kept by any transfer
agent or agents of the Corporation under his direction) and of the corporate
seal of the Corporation.

SECTION 7.9 DUTIES OF ASSISTANT SECRETARY. The Assistant Secretary, or if
there be more than one, the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election) shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

SECTION 7.10 DUTIES OF TREASURER. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all of his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, he shall give the
Corporation a bond in such

<PAGE> 20

sum and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of this office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.

SECTION 7.11 DUTIES OF ASSISTANT TREASURER. The Assistant Treasurer, or if
there shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the Treasurer or in the event
of his inability or refusal to act, perform the duties and exercise the powers
of the Treasurer and shall perform such other duties and have such other powers
as the Board of Directors may from time to time prescribe.

ARTICLE 8

RESIGNATIONS, REMOVALS AND VACANCIES

SECTION 8.1 DIRECTORS.

(a) RESIGNATIONS. Any Director may resign at any time by giving
written notice to the Board of Directors or the President or the Secretary. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

(b) REMOVALS. Subject to any provisions of the Certificate of
Incorporation, any Director or the entire Board of Directors may be removed with
or without cause, at any meeting called for the purpose, by vote of the holders
of a majority of the shares entitled to vote for the election of Directors, or a
majority vote of the Board of Directors. This Section 8.1(b) may not

<PAGE> 21

be altered, amended or repealed except by the holders of a majority of the
shares of stock issued and outstanding and entitled to vote for the election of
the Directors.

(c) VACANCIES. Vacancies occurring in the office of Director and newly
created Directorships resulting from any increase in the authorized number of
Directors shall be filled by a majority of the Directors then in office, though
less than a quorum, unless previously filled by the stockholders entitled to
vote for the election of Directors, and the Directors so chosen shall hold
office subject to the By-Laws until the next annual meeting of Stockholders at
which the term of office of the class to which they have been elected expires
and until their successors are duly elected and qualify or until their earlier
resignation or removal. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute.

SECTION 8.2 OFFICERS. Any officer may resign at any time by giving written
notice to the Board of Directors or the President or the Secretary. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. The Board of Directors may, at any meeting
called for the purpose, by vote of a majority of their entire number, remove
from office any officer of the Corporation or any member of a committee, with or
without cause. Any vacancy occurring in the office of President, Secretary or
Treasurer shall be filled by the Board of Directors and the officers so chosen
shall hold office subject to the By-Laws for the unexpired term in respect of
which the vacancy occurred and until their successors shall be elected and
qualify or until their earlier resignation or removal.

ARTICLE 9

CERTIFICATE OF STOCK

<PAGE> 22

SECTION 9.1 ISSUANCE OF STOCK. The Directors may, at any time and from time
to time, if all of the shares of capital stock which the Corporation is
authorized by its Certificate of Incorporation to issue have not been issued,
subscribed for, or otherwise committed to be issued, issue or take subscriptions
for additional shares of its capital stock up to the amount authorized in its
Certificate of Incorporation. Such stock shall be issued and the consideration
paid therefor in the manner prescribed by law.

SECTION 9.2 RIGHT TO CERTIFICATE; FORM. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the Chairman of the Board, the President or a Vice
President and the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the number of shares owned by
him in the Corporation; provided that the Directors may provide by one or more
resolutions that some or all of any or all classes or series of the
Corporation's stock shall be uncertified shares. Certificates may be issued for
partly paid shares and in such case upon the face or back of the certificates
issued to represent any such partly paid shares, the total amount of the
consideration to be paid therefor, and the amount paid thereon shall be
specified.

SECTION 9.3 FACSIMILE SIGNATURE. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.

SECTION 9.4 LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the

<PAGE> 23

Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.

SECTION 9.5 TRANSFER OF STOCK. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

SECTION 9.6 REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.

ARTICLE 10

INDEMNIFICATION

<PAGE> 24

SECTION 10.1 THIRD PARTY ACTIONS. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

SECTION 10.2 DERIVATIVE ACTIONS. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
Director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees)

<PAGE> 25

actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.

SECTION 10.3 EXPENSES. To the extent that a Director, officer, employee or
agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 10.1 and 10.2,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.

SECTION 10.4 AUTHORIZATION. Any indemnification under Sections 10.1 and
10.2 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Sections 10.1 and 10.2.
Such determination shall be made (a) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such action,
suit or proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested Directors so directs, by independent legal
counsel in a written opinion, or (c) by the stockholders.

<PAGE> 26

SECTION 10.5 ADVANCE PAYMENT OF EXPENSES. Expenses incurred by an officer
or Director in defending a civil or criminal action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of such officer or Director to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article 10. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.

SECTION 10.6 NON-EXCLUSIVENESS. The indemnification provided by this
Article 10 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

SECTION 10.7 INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article 10.

<PAGE> 27

SECTION 10.8 CONSTITUENT CORPORATIONS. The Corporation shall have power to
indemnify any person who is or was a director, officer, employee or agent of a
constituent corporation absorbed in a consolidation or merger with this
Corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, in the same manner as hereinabove
provided for any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.

SECTION 10.9 ADDITIONAL INDEMNIFICATION. In addition to the foregoing
provisions of this Article 10, the Corporation shall have the power, to the full
extent provided by law, to indemnify any person for any act or omission of such
person against all loss, cost, damage and expense (including attorney's fees) if
such person is determined (in the manner prescribed in Section 10.4 hereof) to
have acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interest of the Corporation.

ARTICLE 11

EXECUTION OF PAPERS

Except as otherwise provided in these By-Laws or as the Board of Directors
may generally or in particular cases otherwise determine, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts and other instruments
authorized to be executed on behalf of the Corporation shall be executed by the
President or the Treasurer.

ARTICLE 12

<PAGE> 28

FISCAL YEAR

The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.

ARTICLE 13

SEAL

The Corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the word "Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

<PAGE> 29

ARTICLE 14

OFFICES

In addition to its principal office, the Corporation may have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

ARTICLE 15

AMENDMENTS

Except as otherwise provided herein, these By-Laws may be altered, amended
or repealed or new By-Laws may be adopted by the stockholders or by the Board of
Directors, when such power is conferred upon the Board of Directors by the
Certificate of Incorporation, at any regular meeting of the stockholders or of
the Board of Directors, or at any special meeting of the stockholders or of the
Board of Directors if notice of such alteration, amendment, repeal or adoption
of new By-Laws is contained in the notice of such special meeting, or by the
written consent of a majority in interest of the outstanding voting stock of the
Corporation or by the unanimous written consent of the Directors. If the power
to adopt, amend or repeal by-laws is conferred upon the Board of Directors by
the Certificate of Incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws. 261001-1

<PAGE> 1

EXHIBIT 10.1

EXECUTION COPY

CONTRIBUTION AGREEMENT

FOR THE FORMATION OF

JHFSC ACQUISITION CORP.

OCTOBER 4, 1996

<PAGE> 2

EXECUTION COPY

CONTRIBUTION AGREEMENT

TABLE OF CONTENTS

<TABLE>
<S> <C>
Preliminary Statement.............................................................................................1

1. Definitions.....................................................................................1

2. Contribution of the Shares......................................................................6
2.01 Contribution of Shares and Additional Share Agreement..................................6
2.02 Contributions by Lee and SCP...........................................................6
2.03 Contribution by Employee Investors.....................................................7
2.04 Further Assurances.....................................................................7
2.05 Shareholder Agreement..................................................................7
2.06 Closing................................................................................7

3. Representations of Hancock with Respect to Hancock and the Shares...............................8
3.01 Organization...........................................................................8
3.02 Title to Shares........................................................................8
3.03 Authority..............................................................................8
3.04 Enforceability; No Violation..........................................................8
3.05 Brokers................................................................................9
3.06 Purchase for Investment................................................................9

4. Representations of Hancock with Respect to the Company..........................................9
4.01 Organization and Qualification........................................................10
4.02 No Violation..........................................................................10
4.03 Capitalization........................................................................10
4.04 Subsidiaries..........................................................................10
4.05 Financial Statements..................................................................11
4.06 Absence of Undisclosed Liabilities....................................................11
4.07 Absence of Certain Material Changes...................................................11
4.08 Title to Assets.......................................................................13
4.09 Real Estate...........................................................................13
4.10 Intentionally Omitted.................................................................14
4.11 Intellectual Property.................................................................14
4.12 Contracts.............................................................................14
4.13 Compliance with Laws..................................................................15
</TABLE>

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<TABLE>
<S> <C>
4.14 Certain Employee Matters..............................................................17
4.15 Employee Benefit Plans................................................................17
4.16 [Intentionally Omitted]...............................................................21
4.17 Litigation............................................................................21
4.18 [Intentionally Omitted]...............................................................22
4.19 Transactions with Interested Persons..................................................22
4.20 Brokerage Clients.....................................................................22
4.21 Investment Advisory Clients...........................................................23
4.22 Investment Fund Clients...............................................................23

5. Representations of Newco.......................................................................24
5.01 Organization and Authority............................................................24
5.02 Authorization.........................................................................24
5.03 Capitalization of Newco...............................................................25
5.04 Regulatory Approvals..................................................................25
5.05 Actions or Proceedings................................................................25
5.06 Investment Representation.............................................................25
5.07 Financing Commitments.................................................................25
5.08 New Company; No Liabilities...........................................................26
5.09 Solvency..............................................................................26
5.10 Brokers...............................................................................27
5.11 No Agreement..........................................................................27

6. Covenants......................................................................................27
6.01 Covenants of Hancock with Respect to the Company......................................27
6.02 Covenants of Hancock with Respect to Closing..........................................29
6.03 Covenants of Newco with Respect to the Closing........................................30
6.04 Tax Matters...........................................................................30
6.05 Confidentiality.......................................................................30
6.06 Non-Competition.......................................................................32
6.07 12b-1 Funds...........................................................................33
6.08 Sutro Litigation Escrow...............................................................33
6.09 Public Announcements..................................................................33
6.10 Further Action........................................................................33
6.11 Reconciliation of Accounts............................................................33
6.12. Pursuit of Rights.....................................................................34
6.13. Compliance with Section 15(f).........................................................34
6.14. Further Cooperation...................................................................34
</TABLE>

(ii)

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<TABLE>
<S> <C>
7. Conditions to Obligations of Newco.............................................................34
7.01 Continued Truth of Representations and Warranties of Hancock;
Compliance with Obligations...........................................................34
7.02 Governmental and Third Party Approvals................................................35
7.03 Adverse Proceedings...................................................................35
7.04 Opinion of Counsel....................................................................35
7.05 Closing Deliveries....................................................................35
7.06 Financing.............................................................................36
7.07 Approval of Fund Trustees or Directors................................................36
7.08 Approval of Fund Shareholders.........................................................36
7.09 Execution of the Fund Agreements......................................................37
7.10 Transitional Services Agreement.......................................................37
7.11 Tax Matters Agreement.................................................................37
7.12 No Material Adverse Effect............................................................37

8. Conditions to Obligations of Hancock...........................................................37
8.01 Continued Truth of Representations and Warranties of Newco;
Compliance with Covenants and Obligations.............................................37
8.02 Corporate Proceedings.................................................................37
8.03 Governmental and Third Party Approvals................................................37
8.04 Adverse Proceedings...................................................................37
8.05 Opinion of Counsel....................................................................38
8.06 Tax Matters Agreement.................................................................38
8.07 Additional Share Agreement............................................................38
8.08 Newco Shareholder Agreements..........................................................38
8.09 Managements' Obligations..............................................................38
8.10 Closing Deliveries....................................................................38
8.11 Repayment of Commercial Paper Facility................................................39
8.12 Goldsmith Contribution Agreement......................................................39

9. Indemnification................................................................................40
9.01 Survival..............................................................................40
9.02 Indemnification by Hancock............................................................40
9.03 Special Indemnification with Respect to Certain Matters...............................41
9.04 Indemnification by Newco..............................................................41
9.05 Minimum Indemnification...............................................................42
9.06 Maximum Indemnification for Certain Losses............................................42
9.07 Notice and Opportunity to Defend......................................................42
9.08 Contribution..........................................................................44
</TABLE>

(iii)

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EXECUTION COPY

<TABLE>
<S> <C>
9.09 Exclusive Remedy......................................................................44
9.10 Determination of Loss.................................................................44
9.11 Effect of Indemnification.............................................................45

10. Termination of Agreement.......................................................................45
10.01 Termination by Lapse of Time..........................................................45
10.02 Termination by Agreement of the Parties...............................................45
10.03 Availability of Remedies at Law.......................................................46

11. Restriction On Use of Certain Names............................................................46

12. Agreement to Satisfy Certain Liabilities and Advances..........................................47

13. Notices........................................................................................47

14. Successors and Assigns.........................................................................48

15. Entire Agreement; Amendments; Attachments......................................................49

16. Severability...................................................................................49

17. Expenses.......................................................................................49

18. Governing Law..................................................................................50

19. Section Headings...............................................................................50

20. Counterparts...................................................................................50
</TABLE>

(iv)

<PAGE> 6

EXECUTION COPY

Exhibits
- - - - - - - - - - - - - - - --------

A Additional Share Agreement
B Terms of Shareholder Agreement
C Lee Commitment Letter
C-1 SCP Commitment Letter
D Performance Milestones
E Terms of Transitional Services Agreement
F Tax Matters Agreement
G Goldsmith Contribution Agreement

Schedules
- - - - - - - - - - - - - - - ---------

1. Active Subsidiaries

3.05 Brokers

4.04 Subsidiaries

4.06 Absence of Undisclosed Liabilities

4.07 Absence of Certain Material Changes

4.08 Title to Assets

4.09 Real Estate

4.11 Intellectual Property

4.12 Contracts

4.14 Certain Employee Matters

4.15 Employee Benefit Plans

4.17 Litigation

4.19 Transactions with Interested Persons

4.20 Brokerage Clients

4.21 Investment Advisory Clients

5.10 Brokers

6.02 Resigning Directors

6.06 Non-Competition

Exhibits and Schedules have been omitted from this Agreement. The
Registrant Agrees to furnish supplementally a copy of such Exhibits and
Schedules to the Commission upon request.

(v)

<PAGE> 7

EXECUTION COPY

CONTRIBUTION AGREEMENT

Contribution Agreement (the "Agreement") made as of the 4th day of
October, 1996 by and between JHFSC Acquisition Corp., a Delaware corporation
("Newco"), John Hancock Subsidiaries, Inc., a Delaware corporation ("Hancock"),
Thomas H. Lee Equity Fund III, L.P., a Delaware limited partnership ("Lee"), and
SCP Private Equity Partners, L.P., a Delaware limited partnership ("SCP").

PRELIMINARY STATEMENT

1. Hancock owns all of the issued and outstanding shares of the common
stock, no par value (the "Common Stock"), of John Hancock Freedom Securities
Corporation, a Massachusetts corporation (the "Company").

2. Hancock desires to contribute 100% of the issued and outstanding
shares of the Company (the "Shares") to Newco in exchange for (i) 4.999% of the
issued and outstanding capital stock of Newco on the Closing Date (the "Hancock
Newco Shares") and (ii) one hundred and eighty million dollars ($180,000,000),
subject to reduction, dollar for dollar, by the amount of any dividend or
distribution upon the equity securities of the Company made pursuant to Section
6.01(a)(iii);

3. As provided in Section 2.2, Lee and SCP desire to contribute an
aggregate of $50,000,000 to the capital of Newco (which amount may be reduced to
the extent that certain employees and members of management of the Company and
its Subsidiaries (the "Employee Investors") contribute more than $25,000,000 to
the capital of Newco;

4. The Employee Investors intend to contribute at least $25,000,000 to
the capital of Newco; and

5. The Parties hereto intend for the transactions contemplated by this
Agreement to be governed by Section 351 of the Code.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:

1. DEFINITIONS. For the purposes of this Agreement, all capitalized
words or expressions used in this Agreement (including the Schedules and
Exhibits annexed hereto) shall have the meanings specified in this Article 1
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

<PAGE> 8

EXECUTION COPY

"ACTIVE SUBSIDIARY" means any of the Subsidiaries of the Company listed
on SCHEDULE 1 attached hereto.

"ADDITIONAL SHARE AGREEMENT" means the Agreement attached hereto as
EXHIBIT A.

"ADVISERS ACT" means the Investment Advisers Act of 1940, as amended.

"AFFILIATE" means, when used with respect to any Person at any time,
(a) each Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such specified Person at such time, (b)
each Person who is or has been within two years prior to the time in question an
officer, director or direct or indirect beneficial holder of at least 5% of any
class of the outstanding capital stock of such specified Person, and (c) each
Person of which such specified Person or an affiliate (as defined in clauses (a)
or (b) above) thereof shall, directly or indirectly, beneficially own at least
5% of any class of outstanding capital stock or other evidence of beneficial
interest at such time.

"AGREEMENT" means this Contribution Agreement (together with all
Exhibits and Schedules hereto) as from time to time assigned, supplemented,
modified, amended, or restated or as the terms hereof may be waived.

"BUSINESS DAY" means any day, excluding Saturday, Sunday and any other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to close.

"CHARTER" means the Certificate of Incorporation, Articles of
Incorporation or articles of organization or other organizational document of a
corporation, as amended and restated through the date hereof.

"CLAIM" means an action, suit, proceeding, hearing, investigation,
litigation, complaint, claim or demand.

"CODE" means the Internal Revenue Code of 1986, and the regulations
thereunder, published Internal Revenue Service rulings, and court decisions in
respect thereof, all as the same shall be in effect at the time.

"COMMISSION" means the Securities and Exchange Commission and any other
similar or successor agency of the federal government administering the
Securities Act or the Exchange Act.

"COMMON STOCK" means the common stock of the Company, no par value per
share.

<PAGE> 9

EXECUTION COPY

"COMPANY" means John Hancock Freedom Securities Corporation, a
Massachusetts corporation, and its successors and assigns.

"CONTRIBUTION DOCUMENTS" means this Agreement, the Additional Share
Agreement, the Shareholder Agreement, the Transitional Services Agreement and
the Tax Matters Agreement.

"EMPLOYEE INVESTOR" means those employees and members of the management
of the Company and its Subsidiaries who agree prior to the Closing Date to
contribute, in the aggregate, at least $25,000,000 to the capital of Newco.

"EQUITY SECURITY" shall have the meaning given to such term in Section
3(a)(ii) of the Exchange Act.

"ERISA" means the Employee Retirement Income Security Act of 1974, and
any similar or successor federal statute, and the rules, regulations and
interpretations thereunder, all as the same shall be in effect at the time.

"ERISA AFFILIATE" means, for purposes of Title IV of ERISA, any trade
or business, whether or not incorporated, that together with the Company or any
Subsidiary of the Company, would be deemed to be a "single employer" within the
meaning of Section 4001 of ERISA, and, for purposes of the Code, any member of
any group that, together with the Company or any Subsidiary of the Company, is
treated as a "single employer" for purposes of Section 414 of the Code.

"ERISA LIABILITIES" means any Liability, loss, cost or expense incurred
by the Company or any Subsidiary and arising out of any breach of a
representation or warranty included in Section 4.15.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, and any
similar or successor federal statute, and the rules and regulations and
interpretations of the Commission thereunder, all as the same shall be in effect
at the time.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board.

<PAGE> 10

EXECUTION COPY

"HANCOCK" means John Hancock Subsidiaries, Inc., a Delaware
corporation, and its successors and assigns.

"HANCOCK NEWCO SHARES" means 4.999% of the issued and outstanding
shares of capital stock of Newco on the Closing Date.

"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended, and any similar or successor federal statute, and the rules and
regulations and interpretations of the Commission thereunder, all as the same
shall be in effect at the time.

"IRS" means the Internal Revenue Service and any similar or successor
agency of the federal government administering the Code.

"LEE" means Thomas H. Lee Equity Fund III, L.P., a Delaware limited
partnership, and its successors and assigns.

"LIABILITIES" means all obligations, contingent or otherwise, whether
current or long-term, which in accordance with GAAP would be classified upon the
obligor's balance sheet as liabilities (other than deferred taxes) and shall
also include capitalized leases, guaranties, endorsements (other than for
collection in the ordinary course of business) or other arrangements whereby
responsibility is assumed for the obligations of others (other than the Company
or any of its Subsidiaries), including any agreement to purchase or otherwise
acquire the obligations of others or any agreement, contingent or otherwise, to
furnish funds for the purchase of goods, supplies or services for the purpose of
payment of the obligations of others.

"LIEN" means, with respect to any asset, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, encumbrance, any
filing of any financing statement as debtor under the Uniform Commercial Code or
comparable law of any jurisdiction and any agreement to give or make any of the
foregoing, except for any Lien arising by operation of law.

"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
operations, assets, liabilities, or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole, (b) the ability of Hancock to
perform in any material respect its obligations under any of the Contribution
Documents, (c) the validity or enforceability of any of the Contribution
Documents or the rights and remedies of Newco thereunder.

<PAGE> 11

EXECUTION COPY

"NEWCO" means JHFSC Acquisition Corp., a Delaware corporation, and its
successors and assigns.

"NEWCO COMMON STOCK" means the common stock, no par value per share, of
Newco.

"OFFICER'S CERTIFICATE" means a certificate signed in the name of a
corporation by its President, Chief Executive Officer, Treasurer, Chief
Financial Officer, or, if so specified, the Clerk or Secretary, acting in his or
her official capacity.

"PERSON" means any individual, firm, partnership, association, trust,
corporation, limited liability company, governmental body or other entity.

"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor thereto.

"PRINCIPAL SUBSIDIARY" means any one or more of Freedom Capital
Management, Corporation, Sutro and Co. Incorporated, Tucker Anthony Incorporated
and John Hancock Clearing Corp.

"SCP" means SCP Private Equity Partners, L.P., a Delaware limited
partnership, and its successors and assigns.

"SECURITIES ACT" means the Securities Act of 1933, and any similar or
successor federal statute, and the rules, regulations and interpretations of the
Commission thereunder, all as the same shall be in effect at the time.

"SHAREHOLDER AGREEMENT" means the Agreement incorporating the terms set
forth on EXHIBIT B hereto among the shareholders of Newco.

"SHARES" means the outstanding shares of Common Stock of the Company.

"SUBSIDIARY" means, any Person of which the Company (or other specified
Person) shall own directly or indirectly through a Subsidiary, a nominee
arrangement or otherwise at least a majority of the outstanding capital stock
(or other shares of beneficial interest) presently entitled to vote generally or
at least a majority of the partnership, joint venture or similar interests, or
in which the Company (or other specified Person) is a general partner or joint
venturer without limited liability.

"TRANSITIONAL SERVICES AGREEMENT" means the Agreement to be entered
into between the Company and Hancock on the Closing Date containing the terms
set forth on EXHIBIT E.

<PAGE> 12

EXECUTION COPY

The following additional terms shall have the meanings set forth in the
section references.

Term Section Where Defined
---- ---------------------

Brokerage Clients 4.20
Brokerage Contracts 4.20
Newco Common Stock 2.01
Closing 2.01
Closing Date 2.01
Company Reports 4.13
Definitive Financing Agreements 6.03(b)
Financial Statements 4.05
Hancock Newco Shares Preliminary Statement
Investment Clients 4.20
Investment Contracts 4.20
Investment Fund 4.20
Investment Fund Clients 4.20
Investment Fund Client Financial Statements 4.20
License 11
Most Recent Financial Statements 4.05
Plan 4.15
Solvent 5.09
Tax Matters Agreement 6.04

2. CONTRIBUTION OF THE SHARES

2.01 CONTRIBUTION OF SHARES AND ADDITIONAL SHARE AGREEMENT.
Subject to and upon the terms and conditions of this Agreement, at the closing
of the transactions contemplated hereby (the "Closing"), Hancock shall
contribute to Newco the Shares in exchange for the Hancock Newco Shares and one
hundred eighty million dollars ($180,000,000) in immediately available funds
(the "Cash Boot"). At the time of such contribution, Hancock shall deliver to
Newco certificates evidencing the Shares duly endorsed in blank or with stock
powers duly executed by Hancock. At the time of such contribution, Newco and
Hancock shall enter into an Additional Share Agreement in the form of EXHIBIT A
hereto.

2.02 CONTRIBUTIONS BY LEE AND SCP. Subject to and upon the
terms and conditions set forth in separate commitment letters previously
delivered to Newco, copies of

<PAGE> 13

EXECUTION COPY

which are attached as EXHIBITS C AND C-1, respectively, at the Closing Lee and
SCP shall contribute to the capital of Newco the amounts set forth in SCHEDULE
2.02 and shall be entitled to receive in consideration thereof the number of
shares of Newco Common Stock set forth on SCHEDULE 2.02. The amounts contributed
by Lee and SCP and the shares of Newco Common Stock shall be reduced dollar for
dollar to the extent the Employee Investors contribute in excess of $25,000,000
to the Company. Lee and SCP are parties to this Agreement solely to evidence
their obligations under this Section 2.02 and Section 6.09, and shall have no
liability, obligation, commitment or benefit under any other provision of this
Agreement.

2.03 CONTRIBUTION BY EMPLOYEE INVESTORS. Subject to and upon
the terms and conditions of this Agreement, at the Closing the Employee
Investors shall contribute to the capital of Newco at least $25,000,000 and
shall be entitled to receive in consideration thereof the number of shares of
Newco Common Stock set forth on SCHEDULE 2.02. The number of shares of Newco
Common Stock will be increased to the extent the Employee Investors contribute
to the Company more than $25,000,000 so that the shares of Newco Common Stock
held by the Employee Investors when aggregated with the Newco Common Stock held
by Lee and SCP are equal to ninety-five and one one-thousandth percent (95.001%)
of the outstanding shares of Newco Common Stock.

2.04 FURTHER ASSURANCES. At any time and from time to time
after the Closing, at Newco's request and without further consideration, Hancock
shall promptly execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take all such other action as Newco
may reasonably request, more effectively to transfer, convey and assign to
Newco, and to confirm Newco's title to, all of the Shares. At any time and from
time to time after the Closing, at Hancock's request and without further
consideration, Newco shall promptly execute and deliver such instruments of
sale, transfer, conveyance, assignment and confirmation, and take such action as
Hancock shall reasonably request, more effectively to transfer, convey and
assign to Hancock, and to confirm Hancock's title to, all of the Hancock Newco
Shares.

2.05 SHAREHOLDER AGREEMENT. At the Closing each stockholder of
Newco shall enter into a Shareholder Agreement in a form reasonably acceptable
to Hancock, Lee, SCP and a representative of the Employee Investors
incorporating the terms set forth on EXHIBIT B hereto.

2.06 CLOSING. The Closing shall take place at the offices of
Hutchins, Wheeler & Dittmar, 101 Federal Street, Boston, Massachusetts 02110 at
10:00 a.m., Boston Time, on the first Business Day on which all of the
conditions in Sections 7 and 8 have been

<PAGE> 14

EXECUTION COPY

satisfied or at such other place, time or date as may be mutually agreed upon in
writing by the parties. The date on which the Closing occurs is referred to
herein as the Closing Date.

3. REPRESENTATIONS OF HANCOCK WITH RESPECT TO HANCOCK AND THE
SHARES.

Hancock, represents and warrants to Newco as follows:

3.01 ORGANIZATION. Hancock is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and Hancock has all requisite power and authority (corporate or otherwise) to
execute and deliver the Contribution Documents to which it is a party and to
consummate the transactions contemplated thereby.

3.02 TITLE TO SHARES. Hancock has good and marketable title to
the Shares, free and clear of any and all covenants, conditions, restrictions,
voting trust arrangements, liens, charges, encumbrances, options and adverse
claims or rights whatsoever.

3.03 AUTHORITY. Hancock has the full right, power and
authority to enter into this Agreement and the Contribution Documents to which
it is a party and Hancock has full right, power and authority to transfer,
convey and contribute to Newco at the Closing the Shares. The execution by
Hancock of the Contribution Documents to which it is a party and the performance
by Hancock of all of its obligations thereunder have been duly authorized by all
requisite corporate action on behalf of Hancock, and, upon consummation of the
Contribution and exchange contemplated hereby, Newco will acquire from Hancock
good and marketable title to the Shares, free and clear of all covenants,
conditions, restrictions, voting trust arrangements, liens, charges,
encumbrances, options and adverse claims or rights whatsoever except as provided
for under the Shareholder Agreement or any other agreement to which Newco is a
party.

3.04 ENFORCEABILITY; NO VIOLATION. This Agreement and each
Contribution Document to which Hancock is a party has been duly executed and
delivered by Hancock and is enforceable against Hancock in accordance with its
terms. The execution by Hancock of the Contribution Documents to which it is a
party and the performance by Hancock of its obligations thereunder will not
violate the provisions of (i) any applicable federal or state law or (ii)
Hancock's Charter or By-Laws, or (iii) any provision of, and will not result in
default or acceleration of any obligation under, any contract, agreement, order,
judgment or decree to which Hancock or any of its Affiliates is party, or to
which any property of Hancock or any of its Affiliates is subject where such
violation, or default or acceleration would have a Material Adverse Effect.

<PAGE> 15

EXECUTION COPY

3.05 BROKERS. Except as set forth on SCHEDULE 3.05 hereto,
no broker or finder has acted for Hancock or any of its Affiliates in connection
with this Agreement or the transactions contemplated hereby, and no broker or
finder is entitled to any brokerage or finder's fee or other commissions in
respect of such transactions based upon agreements, arrangements or
understandings made by or on behalf of Hancock or any of its Affiliates.

3.06 PURCHASE FOR INVESTMENT. Hancock hereby represents
and warrants to Newco as follows with respect to Newco Common Stock to be
received by Hancock:

(a) Hancock is acquiring the Hancock Newco
Shares for its own account for purposes of investment, and Hancock has no
present intention of selling such securities except in compliance with federal
securities laws or any applicable state securities laws;

(b) in acquiring the Hancock Newco Shares,
Hancock is not relying upon any information other than the results of Hancock's
own independent investigation, the representations and warranties contained
herein and the consummation of the transactions contemplated herein in
accordance with this Agreement;

(c) Hancock (or its representatives) has had an
opportunity to ask questions of and receive answers from the officers or
representatives of Newco concerning the Hancock Newco Shares, the terms and
conditions of its acquisition of such securities and all such questions have
been answered to the full satisfaction of Hancock;

(d) Hancock has the knowledge and experience in
financial and business matters such that it is capable of evaluating the merits
and risks of its investment in Newco;

(e) Hancock is able to bear the economic risks
of an investment in Newco; and

(f) Hancock is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act.

4. REPRESENTATIONS OF HANCOCK WITH RESPECT TO THE COMPANY

Hancock represents and warrants to Newco as follows with
respect to the Company:

<PAGE> 16

EXECUTION COPY

4.01 ORGANIZATION AND QUALIFICATION. The Company and each of
its Principal Subsidiaries is a corporation, validly existing and in good
standing under the laws of the state of its incorporation. The Company and each
of its Principal Subsidiaries has all requisite power and authority to conduct
its business as such business is currently conducted. The copies of the
Company's and each of its Principal Subsidiaries' Charter and By-Laws, as
amended to date and made available to Newco's counsel prior to the Closing, are
true, complete and correct. The Company and each of its Principal Subsidiaries
is qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the conduct of its business would require such
qualification, except where the failure to be so qualified would neither
significantly interfere with the ability of the Company or any of its Principal
Subsidiaries to conduct their respective businesses substantially as currently
conducted nor significantly diminish the value of the Company and its
Subsidiaries, taken as a whole.

4.02 NO VIOLATION. Assuming the accuracy of the
representations and warranties of Newco hereunder, that all necessary regulatory
or third party consents are obtained prior to Closing, and that all Liabilities
owed to Hancock and its Affiliates are repaid in accordance with Section 12, the
consummation by Hancock of the transactions contemplated hereby will not violate
the provisions of (i) the Charter or By-Laws of the Company or its Principal
Subsidiaries, or (ii) any provision of, or result in a default or acceleration
of any material obligation under, or result in any change in the material rights
or obligations of the Company or any Principal Subsidiary of the Company under,
any agreement or other contract required to be identified on SCHEDULE 4.12
hereto.

4.03 CAPITALIZATION. The Company's authorized capital stock
consists of 1,000 shares of Common Stock, no par value, of which 1,000 shares
are issued and outstanding, all of which are owned beneficially and of record by
Hancock. Except for the rights of Newco hereunder, there are no outstanding
options, warrants, rights or agreements of any kind for the issuance or sale of,
or outstanding securities convertible into or exchangeable for, any additional
shares of Common Stock or any other Equity Security of the Company.

4.04 SUBSIDIARIES. SCHEDULE 4.04 attached hereto sets forth
for each Subsidiary of the Company (a) the name of the Subsidiary, (b) its
jurisdiction of incorporation, and (c) the name of each holder (other than the
Company or one of its Subsidiaries) of any Equity Securities of such Subsidiary,
and the percentage of outstanding Equity Securities held by such holder. There
are no outstanding options, warrants, rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into or exchangeable
for, any additional Equity Securities of any Subsidiary. Except as set forth on
SCHEDULE 4.04, and except for securities held in the trading accounts or any
similar proprietary account of the

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Company or any Principal Subsidiary in the ordinary course of business, neither
the Company nor any Principal Subsidiary owns any Equity Securities issued by
any other Person or is a general partner in any partnership.

4.05 FINANCIAL STATEMENTS. There have been made available to
Newco the following financial statements (collectively the "Financial
Statements"): (i) audited consolidated statements of financial condition,
income, changes in stockholder's equity and cash flows as of and for the fiscal
years ended December 31, 1994 and December 31, 1995, for the Company and its
Subsidiaries (the "Audited Financial Statements"); and (ii) unaudited
consolidated statements of financial condition, income, changes in stockholder's
equity, and cash flows (the "Most Recent Financial Statements") as of and for
the seven (7) months ended July 31, 1996 for the Company and its Subsidiaries.
The Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby and present fairly the financial condition of the Company and
its Subsidiaries as of such dates and the results of operations of the Company
and its Subsidiaries for such periods, subject, in the case of the Most Recent
Financial Statements to normal year-end adjustments (which will not be material
individually or in the aggregate) and the absence of footnotes and other
presentation items.

4.06 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth
on Schedule 4.06 or reflected in the Financial Statements, there are no
liabilities of the Company or any of its Subsidiaries except for (i) liabilities
which have arisen in the ordinary course of business of the Company and its
Subsidiaries since the date of the Audited Financial Statements,(ii) liabilities
which, when added to the Net Out of Balance Account (as defined in this Section
4.06) do not exceed $250,000 in the aggregate, and (iii) liabilities which,
because of their contingent nature (but without regard to their materiality),
would not be required to be reflected in the Financial Statements in accordance
with GAAP. No "out of balance" or other similar reconciliation condition exists
with respect to the financial records of the Company or any of its Subsidiaries
or the account of any client of the Company or any of its Subsidiaries (whether
or not such account is maintained by the Company or any of its Subsidiaries)
except where the sum of the Net Out of Balance Account plus liabilities
described in clause (ii) above does not exceed $250,000. The term "Net Out of
Balance Account" means the net amount, if any, by which the net amount owed by
the Company or any Subsidiary to customers with respect to account imbalances
exceeds the net amount, if any, owed by customers to the Company and its
Subsidiaries on account of such imbalances.

4.07 ABSENCE OF CERTAIN MATERIAL CHANGES. Except as otherwise
disclosed in SCHEDULE 4.07 attached hereto, and except for changes occurring in
the ordinary course in the

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securities business conducted by the Company or any of its Subsidiaries, since
July 31, 1996, there has not been, or the Company or any Subsidiary has not
entered into:

(a) any event which has occurred on or before the date of this
Agreement which has had, or is reasonably likely to have, a Material Adverse
Effect;

(b) any Lien placed on any of the Company's or any of its
Principal Subsidiaries' properties or assets which remains in existence on the
date hereof, except for Liens arising in the ordinary course of business and
except where such lien would neither significantly interfere with the ability of
the Company or any of its Principal Subsidiaries to conduct their respective
businesses substantially as currently conducted nor significantly diminish the
value of the Company and its Subsidiaries taken as a whole;

(c) any sale, lease, assignment, transfer or other
disposition, or any agreement or other arrangement for the sale, lease,
assignment, transfer or other disposition, of any part of the Company's or any
of its Principal Subsidiaries' properties or assets, other than (i) fixed assets
or other capital expenditures made in the ordinary course of business, or (ii)
the sale of any property or assets which would not significantly interfere with
the ability of the Company or any of its Principal Subsidiaries to conduct their
respective businesses substantially as currently conducted;

(d) any damage, destruction or loss, whether or not covered by
insurance, which would either significantly interfere with the ability of the
Company or any of its Principal Subsidiaries to conduct their respective
businesses substantially as currently conducted, or significantly diminish the
value of the Company and its Subsidiaries, taken as a whole;

(e) any declaration, setting aside or payment of any dividend
on, or the making of any other distribution in respect of, any Equity Security
of the Company or any of its Subsidiaries (other than a dividend or distribution
to the Company or a Subsidiary), or any direct or indirect redemption, purchase
or other acquisition by the Company or any of its Subsidiaries of any of its own
Equity Securities, or any issuance by the Company or any of its Subsidiaries of
any Equity Security;

(f) any allegation in writing of unfair labor practices
involving the Company or any of its Principal Subsidiaries; any change in the
employment contracts of or compensation payable or to become payable by the
Company or any of its Principal Subsidiaries to any of its officers, directors,
or employees who are listed on SCHEDULE 4.14(B) hereto, or any change in bonus
payment or arrangement made to or with any of such officers,

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directors, or employees, other than in each case changes in compensation and
bonuses made in the ordinary course of business; or any material change in
coverage or benefits available under any Plan described in Section 4.15 that
significantly increase the costs to the Company and its Subsidiaries of
providing the benefits under such Plans;

(g) obligations or liabilities exceeding $100,000 in the
aggregate incurred by the Company or any of its Principal Subsidiaries with
respect to any loan, advance or commitment from any bank, financial institution
or institutional lender, other than such obligations and liabilities
contemplated by this Agreement or incurred pursuant to agreements in existence
on such date or any intercompany Liabilities between (i) the Company and any
Subsidiary or (ii) the Company or its Subsidiaries and Hancock or any of its
Affiliates;

(h) contracts, licenses, leases or agreements entered into by
the Company or any of its Subsidiaries which are to be performed in whole or in
part after the Closing Date and which obligate the Company or any of its
Subsidiaries for more than $250,000 in any one case; or

(i) any recapitalization or reorganization of the Company or
any of its Principal Subsidiaries.

4.08 TITLE TO ASSETS. Each of the Company and its Subsidiaries
has good and marketable title to, or a valid leasehold interest in, all of the
property and assets shown on the statement of financial condition contained in
the Most Recent Financial Statements, except (i) as otherwise set forth in the
Most Recent Financial Statements, (ii) for properties and assets disposed of in
the ordinary course of business since the date of the such statement, (iii) for
liens incurred in the ordinary course of business, and (iv) as set forth on
SCHEDULE 4.08. The assets reflected in the statement of financial condition
included in the Most Recent Financial Statements constitute all properties and
assets which are material to the conduct of the businesses of the Company and
its Principal Subsidiaries as currently conducted.

4.09 REAL ESTATE.

(a) Except as set forth on SCHEDULE 4.09 attached hereto,
neither the Company nor any Subsidiary owns any real estate.

(b) SCHEDULE 4.09 lists the lease or other contractual
obligation under which any real property is leased or subleased by or to any of
the Company and its Subsidiaries and which obligate the Company or any of its
Subsidiaries to make annual base rental payments in excess of $100,000 (the
"Leases"). With respect to each Lease;

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(i) correct and substantially complete copies
thereof have been made available to Newco;

(ii) each Lease is a legal, valid, binding
obligation enforceable against such of the Company and its Subsidiaries as are
parties thereto and, to Hancock's knowledge, enforceable against the other party
thereto, and is in full force and effect; and

(iii) neither the Company nor any Principal
Subsidiary, is in breach or default, nor has any event occurred which, with
notice or lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder, except, in each case, for
such Leases the termination of which would neither interfere significantly with
the ability of the Company or any of its Principal Subsidiaries to conduct their
respective businesses substantially as currently conducted, nor significantly
diminish the value of the Company and its Subsidiaries, taken as a whole.

4.10 INTENTIONALLY OMITTED.

4.11 INTELLECTUAL PROPERTY. SCHEDULE 4.11 lists all trade and
product names, trademarks and trademark applications and service marks that are
used in the businesses of the Company and its Principal Subsidiaries. Neither
the Company nor any Subsidiary has registered any such trade and product names,
trademarks and trademark applications or service marks. SCHEDULE 4.11 lists all
agreements pursuant to which the Company or any of its Principal Subsidiaries
licenses computer software, except for such licenses the termination of which
would neither significantly interfere with the ability of the Company and its
Principal Subsidiaries to conduct their respective businesses substantially as
currently conducted nor significantly diminish the value of the Company and its
Subsidiaries, taken as a whole. Except as set forth on SCHEDULE 4.11, there are
no written claims or demands of any other Person and no proceedings pending or
threatened in writing which challenge the right of the Company or any of its
Principal Subsidiaries rights to use the names and marks listed on SCHEDULE
4.11.

4.12 CONTRACTS. Except for contracts, commitments, leases,
licenses, plans and agreements (i) listed in SCHEDULE 4.12 and leases set forth
on SCHEDULE 4.09 attached hereto, or (ii) entered into in the securities
business conducted by the Company or any of its Subsidiaries, neither the
Company nor any of its Principal Subsidiaries is a party to or subject to:

(a) any collective bargaining or the like, or any contract or
agreement with any labor union;

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(b) any contract or agreement concerning a partnership or
joint venture with one or more Persons;

(c) any non-competition agreement or other contract or
agreement containing covenants limiting the Company's or any of its Principal
Subsidiaries' freedom to compete in any line of business or in any location or
with any Person;

(d) any note or bond issued by the Company or any
Subsidiary, any loan agreement, indenture, or debenture, or any document or
agreement evidencing a capitalized lease obligation in excess of $250,000 owed
to any Person;

(e) any agreement of guaranty (except for guarantees
constituting endorsements in the ordinary course of business), indemnification,
or other similar commitment with respect to the obligations or liabilities of
any other Person (other than lawful indemnification provisions contained in the
Charters and By-Laws of the Company and its Subsidiaries, or any indemnification
or guaranty in favor of the Company or any of its Subsidiaries);

(f) any agreement (other than an employment contract)
which is not terminable by the Company or a Subsidiary without penalty upon not
less than sixty (60) days notice and which entails an aggregate commitment of
the Company or any Subsidiary in excess of $250,000; provided, however, that
this Section 4.12(f) shall not be deemed to apply to or require disclosure of
any contract or agreement (i) between the Company and one of its Subsidiaries or
between any two Subsidiaries of the Company, or (ii) which will terminate at
Closing with no liability thereafter of the Company or any of its Subsidiaries.

Except as listed in SCHEDULE 4.12, none of the Company or any Principal
Subsidiary of the Company, is in default under any such contract, commitment,
plan, lease, license or agreement listed on SCHEDULE 4.12 (a "default" being
defined for purposes hereof as an actual default or event of default or the
existence of any fact or circumstance which would, upon receipt of notice or
passage of time, or both, constitute a default), except where such default would
neither significantly interfere with the ability of the Company or any of its
Principal Subsidiaries to conduct their respective businesses substantially as
now conducted nor significantly diminish the value of the Company and its
Subsidiaries, taken as a whole.

4.13 COMPLIANCE WITH LAWS.

(a) The Company and each Active Subsidiary possesses such
licenses, permits, franchises, orders, approvals, accreditations, written
waivers and other authorizations

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(the "Licenses") as are necessary to conduct their respective businesses as
currently conducted, except where the failure to possess the same would neither
interfere significantly with the ability of the Company or any such Active
Subsidiary to conduct their respective businesses substantially as currently
conducted, nor significantly diminish the value of the Company and its
Subsidiaries, taken as a whole. The Company and each Active Subsidiary is in
material compliance with the terms and conditions of all such Licenses.

(b) The Company and each Active Subsidiary has conducted and
is conducting its business in compliance with applicable federal or state laws,
statutes, regulations, rules or orders or other requirements of any
governmental, regulatory or administrative agency or authority or court or other
tribunal relating to it, except for such acts of non-compliance the correction
(including any regulatory sanctions) of which would neither interfere
significantly with the ability of the Company and its Principal Subsidiaries to
conduct their respective businesses substantially as currently conducted nor
significantly diminish the value of the Company and its Subsidiaries taken as a
whole. Neither the Company nor any of its Active Subsidiaries, nor to the
knowledge of Hancock, any employee is now charged with any material violation of
any applicable federal or state law, statute, regulation, rule, order or
requirement relating to any of the foregoing in connection with the businesses
of the Company and its Active Subsidiaries, except for such violations the
correction (including any regulatory sanctions) of which would neither interfere
significantly with the ability of the Company and its Principal Subsidiaries to
conduct their respective businesses substantially as currently conducted nor
significantly diminish the value of the Company and its Subsidiaries taken as a
whole.

(c) The Company and its Active Subsidiaries have filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that were required to be filed with the Commission
and any other applicable federal or state authorities, except where the failure
to so file does not subject the Company or any Subsidiary to any material
liability or penalty, and except for reports required to be filed as a result of
the transactions contemplated by this Agreement (all such reports and statements
are collectively referred to herein as the "COMPANY REPORTS"). As of their
respective date, the Company Reports complied with applicable federal or state
statutes, rules or regulations except where the failure to comply with such
statutes, rules and regulations would neither interfere significantly with the
ability of the Company and its Principal Subsidiaries to conduct their
respective businesses substantially as currently conducted nor significantly
diminish the value of the Company and its Subsidiaries taken as a whole. Except
as set forth on SCHEDULE 4.13, as of the date of this Agreement, none of
Hancock, the Company or any of its Principal Subsidiaries is a party to any
assistance agreement, supervisory agreement, memorandum of

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understanding, consent order, cease and desist order, or condition of any
regulatory order or decree or similar action (other than exemptive orders) with
or by, the Commission.

4.14 CERTAIN EMPLOYEE MATTERS. There has previously been
delivered to Newco a list of the top fifty (50) employees of the Company and its
Subsidiaries for 1995, based on compensation reported on Form W-2 for that year,
together with the gross compensation paid to each. SCHEDULE 4.14(a) hereto lists
each Person with whom the Company or any Subsidiary has a written employment
contract or agreement covering any portion of 1996, and to whom the Company is
obligated to pay base compensation at a rate in excess of $200,000 per year.

4.15 EMPLOYEE BENEFIT PLANS.

(a) IDENTIFICATION OF PLANS.

SCHEDULE 4.15 attached hereto lists and identifies with
respect to the Company and its Subsidiaries each:

(1) "Employee Pension Benefit Plan" (as such term is
defined in Section 3(2) of ERISA) which is not a Multiemployer Plan;

(2) "Multiemployer Plan" (as such term is defined in
Section 3(37) or 4001(a)(3) of ERISA);

(3) "Employee Welfare Benefit Plan" (as such term is
defined in Section 3(3) of ERISA); and

(4) Stock purchase, option or bonus plan, restricted
stock, stock appreciation right or similar equity-based plan, deferred
compensation, severance pay, incentive, plan, policy or arrangement ("Other
Plans"),

which is, or was within five (5) years prior to the Closing Date, maintained or
contributed to by the Company or any Subsidiary or under which the Company or
any Subsidiary has any liability or contingent liability (individually a "Plan"
and collectively, the "Plans"). Hancock agrees to indemnify Newco with respect
to any liability incurred by the Company or any Subsidiary in connection with
any Employee Pension Benefit Plan, Multiemployer Plan or Other Plan maintained
by Hancock or any of its ERISA Affiliates (other than the Company and any
Subsidiary).

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(b) REPRESENTATIONS APPLICABLE TO ALL EMPLOYEE PENSION
BENEFIT PLANS.

Except as set forth on SCHEDULE 4.15:

(1) Each Plan which is intended to be "qualified" under
Section 401(a) of the Code is and has been at all times so qualified, and the
trusts maintained thereunder are and have been at all times exempt from taxation
under Section 501(a) of the Code. There have been no amendments to any such
Plans that raised significant issues regarding the compliance of such Plan with
the Code which are not the subject of a determination letter issued with respect
thereto by the Internal Revenue Service. No event has occurred that will or
might reasonably be expected to give rise to disqualification of any such Plan
under the Code. The Plans do not pay any tax under Section 511 of the Code.

(2) No Plan has incurred any "accumulated funding
deficiency" (as described in Section 302 of ERISA or Section 412 of the Code),
whether or not waived, nor has there been any failure to make by its due date a
required installment under Section 302(e) of ERISA or Section 412(m) of the Code
with respect to any Plan.

Except as set forth on SCHEDULE 4.15:

(1) With respect to each Plan, no liability under Title
IV of ERISA has been incurred since the effective date of ERISA that has not
been satisfied in full, and which, when added to all other ERISA Liabilities,
would exceed $100,000 in the aggregate and no condition exists that presents a
risk of incurring a liability under Title IV, other than liability for PBGC
premiums which have been paid when due and other than liabilities which, when
added to other ERISA Liabilities, would not exceed $100,000 in the aggregate.

(2) No steps have been taken to terminate any Plan
subject to Title IV of ERISA.

(3) No Plan has been the subject of a "reportable event"
(as described in Section 4043 of ERISA) as to which a notice would be required
to be filed with the PBGC.

(4) With respect to each Plan which is subject to Title
IV of ERISA, the present value of accrued benefits under such Plan (based upon
the actuarial assumptions used for funding purposes in the most recent actuarial
report prepared by the Plan's actuary with

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respect to such Plan), as of its last valuation date, does not exceed the then
current value of the assets of such Plan. Since the last valuation date for each
such Plan, there have been no amendments or changes to such Plans that would
increase the amount of benefits thereunder.

(5) No Plan is a plan described in Section 4063(a) of ERISA.

(d) REPRESENTATIONS APPLICABLE TO ALL MULTIEMPLOYER PLANS.

(1) No Plan listed in SCHEDULE 4.15(a) is a Multiemployer
Plan.

(e) REPRESENTATIONS APPLICABLE TO ALL PLANS.

Except as set forth on Schedule 4.15:

(1) Each Plan complies and has been administered in form and
operation with all requirements of law and regulation applicable thereto, except
where the liability for failure to so comply or be administered, when added to
all other ERISA Liabilities, would not exceed $100,000 in the aggregate. The
Company and the Subsidiaries have performed all of their obligations under all
such Plans, except where the failure to so perform would not have given rise to
a liability which, when added to all other ERISA Liabilities, would not exceed
$100,000.

(2) There have been no acts or omissions which have given rise
to, or which could give rise to, any penalty, tax, or fine under Sections 406,
409 or 502 of ERISA, or Sections 4972, 4975, 4976, 4979 or 4980B of the Code,
for which, when added to all other ERISA Liabilities, would exceed $100,000 in
the aggregate.

(3) None of the assets of any Plan are invested in any
employer securities or employer real property.

(4) All contributions required with respect to, and premium
payments (including without limitation PBGC premium on account of) any Plan for
all periods ending prior to the Closing (including periods from the first day of
the current plan year to the Closing) will be timely made prior to the Closing
by the Company or the Subsidiaries.

(5) All required reports and descriptions of each Plan
(including IRS Form 5500 Annual Reports, Summary Annual Reports, and Summary
Plan Descriptions) have been filed and distributed in a manner that would not
result in the imposition of any material fines

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or penalties upon the Company or any of its Subsidiaries, which when added to
the other ERISA Liabilities, would exceed $100,000 in the aggregate.

(6) None of the Company or any Subsidiary has any plan or
commitment to establish any additional Plans or to amend any existing Plan.

(7) There are no actions, suits, or claims (other than routine
claims for benefits made in the ordinary course of plan administration for which
plan administrative review procedures have not been exhausted) pending or
threatened involving any Plans or the assets of such Plans.

(8) For each Plan providing benefits to current or former
employees of the Company or any of its Subsidiaries, a true and complete copy of
each of the following documents have been made available to Newco: (i) Plan
document and all amendments thereto (or when the Plan has not been reduced to
writing, a written summary of all material Plan terms); (ii) most recent Summary
Plan Description (together with each Summary of Material Modifications required
under ERISA); (iii) IRS Form 5500 Annual Report, if required under ERISA, for
the two most recent plan years, together with all schedules, financial
statements, and opinions of independent accountants; (iv) the actuarial report,
if required under ERISA, for the two most recent plan years; (v) Form PBGC-1, if
required under ERISA, for the two most recent plan years; (vi) if the Plan is
funded through a trust or any third party funding vehicle (including a voluntary
employee benefit association under section 501(c)(9) of the Code, or a "multiple
employer welfare arrangement" described in section 3(40) of ERISA), the trust or
other funding agreement, all amendments thereto, and the latest financial
statements thereof for the two most recent plan years; and (vii) the most recent
determination letter received from the Internal Revenue Service with respect to
each Plan that is intended to be qualified under section 401 of the Code.

(9) The execution and performance of this Agreement will not
(i) constitute a stated triggering event under any Plan that will result in any
payment becoming due from the Company and any Subsidiary to any present or
former officer, director, or employee of the Company or any Subsidiary, or any
dependent thereof, or (ii) accelerate the time of payment or vesting, or
increase the amount, of compensation due to any such officer, director,
employee, or dependent.

(10) Notwithstanding the representations set forth in section
4.15(e)(2), none of the Company, its Subsidiaries, or any of their officers,
directors, or employees has any liability or contingent liability under the
prohibited transaction rules of Section 4975 of the Code or section 406 of ERISA
for the acquisition, holding, or disposition of interests in the partnerships

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described in SCHEDULE 4.15(a)(4)(VIII) by any employee benefit plan maintained
or contributed to by the Company or any of its Subsidiaries, including the
Profit-Sharing Retirement Plan for Employees of Sutro & Co. Incorporated.

(11) No Plan provides benefits, including without
limitation death, medical, or severance benefits, with respect to current or
former employees or directors (or their beneficiaries) beyond their retirement
or other termination of service other than (i) coverage for benefits mandated by
applicable law, (ii) death benefits or retirement benefits under an Employee
Pension Benefit Plan, (iii) deferred compensation benefits properly accrued as
Liabilities on the Financial Statements, or (iv) benefits the full cost of which
is borne by the current or former employee or director or his beneficiaries.

(f) REPRESENTATIONS APPLICABLE TO THIRD PARTY PLANS.

None of the Company or its Subsidiaries (i) has any liability
for any non-exempt prohibited transaction (within the meaning of sections 503(b)
or 4975 of the Code or section 406 of ERISA) with respect to the assets of any
Employee Pension Benefit Plans (including plans not subject to Title I of ERISA)
established, maintained, or contributed to by entities other than the Company,
its Subsidiaries, or any ERISA Affiliate ("Third Party Plans"), (ii) has
knowledge of, or is the subject of, any governmental examination, investigation,
audit, or other inquiry regarding any Third Party Plan which is reasonably
likely to result in any liability to the Company or any of its Subsidiaries, or
(iii) has breached any fiduciary duty or obligation (under ERISA or applicable
state law) with respect to any Third Party Plan, where the consequence of a
breach of any representation or warranty, in this paragraph (f) would
significantly interfere with the ability of the Company or any of its Principal
Subsidiaries to conduct their respective businesses substantially as now
conducted, or would significantly diminish the value of the Company and its
Subsidiaries, taken as a whole.

4.16 [INTENTIONALLY OMITTED].

4.17 LITIGATION. Set forth as SCHEDULE 4.17 is a listing
of any Claims, which if adversely determined would involve a loss to the Company
or any Subsidiary (which loss shall exclude any cost of defense) in excess of
$50,000 and, which is pending, or threatened in writing, against the Company or
any Subsidiary or their respective businesses, properties or assets, or Hancock
at law or in equity, before any federal or state court or any other governmental
or administrative agency or tribunal or any arbitrator or arbitration panel.
There are no judgments or injunctions, and to Hancock's knowledge, no orders,
rulings, charges, decrees, notices of violation or other mandates against or
affecting the Company or any Subsidiary of the Company with respect to the
properties or assets of the Company or any of

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its Subsidiaries or which seek rescission of or seek to enjoin the consummation
of any of the transactions contemplated by this Agreement.

4.18 [INTENTIONALLY OMITTED].

4.19 TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth
on SCHEDULE 4.19 attached hereto, and except for transactions reflected in the
Financial Statements and employment agreements entered into in the ordinary
course of business, there exists no material contract or other material
agreement between the Company or one of its Principal Subsidiaries on the one
hand and Hancock or any of its Affiliates (other than the Company and its
Affiliates) on the other hand.

4.20 BROKERAGE CLIENTS. Each of Tucker Anthony Incorporated,
Sutro and Co., John Hancock Clearing Corporation, and John Hancock Specialist,
Inc. (each a "Broker-dealer" and collectively, the "Broker-dealers") is duly
registered as a broker-dealer with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), is a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD") and the securities
exchanges listed on SCHEDULE 4.20 hereto and is duly registered, licensed or
qualified as a broker or dealer under the laws of each jurisdiction listed on
SCHEDULE 4.20 hereto. Each Broker-dealer is and at all times since December 31,
1994 has been in compliance with the Exchange Act and the rules and regulations
thereunder applicable to it, the rules and regulations of the NASD applicable to
it (including the NASD's rules of fair practice), the rules and regulations of
the securities exchanges of which it is a member, and the laws of each
jurisdiction where it is registered as a broker or dealer, except for such
instances of non-compliance (i) that relate to a matter set forth on SCHEDULES
4.17 OR 4.20 or (ii) the correction of which would not interfere significantly
with the ability of any Broker-dealer to conduct its business substantially as
currently conducted or significantly diminish the value of the Company and its
Subsidiaries, taken as a whole. Hancock has previously made available to Newco a
complete copy of each Broker-dealer's Uniform Application for Broker-Dealer
Registration on Form BD, as amended to date, and complete copies of each
Broker-dealer's quarterly Focus Reports and annual statements of financial
condition filed since January 1, 1993. The Broker-dealers act pursuant to
written agreements and related documentation (collectively, the "Broker-dealer
Agreements") with parties to whom they provide broker dealer services. The
Broker-dealer Agreements have not been modified by any terms that are not
included in the Broker-dealer's files, and none of the Broker-dealers has
violated or is in default under, any Broker-dealer Agreement, except for such
violations or defaults that (i) relate to a matter set forth on SCHEDULES 4.17
OR 4.20 or (ii) relate to the actions of a registered representative of such
Broker-dealer where the total liability, cost and expense relating to all
actions or complaints which may be asserted at any time after the date of this

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Agreement with respect to the conduct of such registered representative do not
exceed $250,000.

4.21 INVESTMENT ADVISORY CLIENTS. Each of Tucker Anthony
Incorporated, Sutro and Co. and Freedom Capital Management Corporation (each an
"Advisory Subsidiary" and collectively, the "Advisory Subsidiaries") is and at
all times since December 31, 1994 has been in compliance with the Investment
Advisers Act of 1940, as amended, (the "Advisors Act") and the rules and
regulations thereunder applicable to it, and the laws of each jurisdiction where
it is registered as an investment advisor, except for such instances of
non-compliance (i) that related to a matter set forth on SCHEDULES 4.17 OR 4.21
or (ii) the correction of which would not interfere significantly with the
ability of any Advisory Subsidiary to conduct its business substantially as
currently conducted or significantly diminish the value of the Company and its
Subsidiaries, taken as a whole. Hancock has previously made available to Newco a
complete copy of each Advisory Subsidiary's Uniform Application for Investment
Advisor Registration on Form ADV, as amended to date. The Advisory Subsidiaries
act pursuant to written advisory agreements (collectively, the "Advisory
Agreements") with parties to whom they provide investment advisory services.
Each Advisory Agreement complies as to form with the requirements of the
Advisors Act. The Advisory Agreements have not been modified by any terms, oral
or otherwise, that are not included in the Advisory Subsidiaries' files, and
none of the Advisory Subsidiaries has violated, or is in default under, any
Advisory Agreement, except for such violations or defaults (i) that relate to a
matter set forth on SCHEDULES 4.17 OR 4.21 or (ii) the correction of which would
not interfere significantly with the ability of any Advisory Subsidiary to
conduct its business substantially as currently conducted or significantly
diminish the value of the Company and its Subsidiaries, taken as a whole.

4.22 INVESTMENT FUND CLIENTS. SCHEDULE 4.22 sets forth a list
of all agreements (the "Fund Agreements") pursuant to which the Company or an
Advisory Subsidiary performs investment advisory, administration or distribution
services, for the benefit of any investment company, as defined in the
Investment Company Act of 1940, as amended for which a Subsidiary acts as
investment advisor (each such investment company, together with investment
companies for which a Subsidiary has acted as an investment adviser in the past,
referred to as an "Investment Company"). Each Investment Company is, and at all
times since its organization was, registered as an investment company under the
Investment Company Act. All outstanding shares of each such Investment Company
that are required to be registered under the Securities Act have been sold
pursuant to an effective registration statement filed thereunder or qualify for
an exemption from registration thereunder and have been qualified for sale under
applicable "blue sky" laws. No such registration statement contained, as of its
effective date, and no prospectus or other offering material used in

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connection with the sale of shares of any such Investment Company contained, as
of any date on which it was used, any untrue statement of a material fact or
omitted to state a material fact required to be stated therein in order to make
the statements therein not misleading. Each Fund Agreement complies as to form
with the requirements of the Investment Company Act and, to the knowledge of
Hancock, has been adopted in compliance with the requirements of such Act. To
the knowledge of Hancock, the Fund Agreements have not been modified by any
terms, oral or otherwise, that are not included in the Company's and the
Subsidiaries' files and none of the Company and its Subsidiaries has any
liability under any Fund Agreement, except for such violations or defaults (i)
that relate to a matter set forth on SCHEDULES 4.17 OR 4.22 or (ii) the
correction of which would not interfere significantly with the ability of any
Advisory Subsidiary to conduct its business substantially as currently conducted
or significantly diminish the value of the Company and its Subsidiaries, taken
as a whole.

Newco has been furnished the audited and unaudited financial statements listed
on SCHEDULE 4.22, (the "Investment Fund Client Financial Statements"). Each of
the Investment Fund Client Financial Statements and notes thereto has been
prepared in accordance with the generally accepted accounting principles,
applied on a consistent basis (except as otherwise disclosed therein) and fairly
presents the financial condition, results of operations, changes in the net
assets and selected per unit data as of the respective dates and for the periods
specified therein except, in the case of interim financial statements, for
normal year-end audit adjustments and the absence of footnotes.

5. REPRESENTATIONS OF NEWCO

Newco represents and warrants to Hancock as follows:

5.01 ORGANIZATION AND AUTHORITY. Newco is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority (corporate and other) to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.

5.02 AUTHORIZATION. The execution and delivery of this
Agreement by Newco and the consummation by Newco of the transactions
contemplated hereby have been duly authorized by all requisite corporate action.
This Agreement constitutes the valid and legally binding obligations of Newco,
enforceable against Newco in accordance with its terms. The execution, delivery
and performance of this Agreement and the consummation by Newco of the
transactions contemplated hereby do not and will not (a) violate the provisions
of any law, rule or regulation applicable to Newco; (b) violate the provisions
of Newco's Charter; or (c) violate any judgment, decree, order or award of any
court, governmental body or arbitrator

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applicable to Newco; except, in the case of each of (a), (b) and (c), which
violation will not have a material adverse effect upon the ability of Newco to
perform its obligations under this Agreement or its operations, assets,
liabilities or condition (financial or otherwise).

5.03 CAPITALIZATION OF NEWCO. As of the date hereof, Newco's
authorized capital stock consists of 3,000 shares of Common Stock, $.01 par
value. Immediately prior to the Closing, Newco's authorized capital stock will
consist of 12,000,000 shares of Common Stock, of which 7,500,000 shares will be
issued pursuant to the financing arrangement described in Section 5.07 (the
"Financing Arrangements"). Except as expressly contemplated by this Agreement,
and except for shares of Newco Common Stock to be issued pursuant to the
Incentive Share Program, there are outstanding no options, warrants rights or
agreements of any kind for the issuance or sale of, or outstanding securities
convertible into or exchangeable for, any additional Equity Securities of Newco.

5.04 REGULATORY APPROVALS. All consents, approvals,
authorizations and other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by Newco, Lee or SCP and which are necessary
for the consummation of the transactions contemplated by this Agreement have
been, or will be prior to the Closing Date, obtained and satisfied.

5.05 ACTIONS OR PROCEEDINGS. There is no action, suit or
proceeding to which Newco, Lee or SCP is a party (either as a plaintiff or
defendant) pending before any court or governmental agency, authority, body or
arbitrator which seeks to restrain, prohibit, record or declare unlawful this
Agreement or materially adversely affect the right of Newco to own, operate or
control the Company or any of its subsidiaries; and Newco has not been
permanently or temporarily enjoined by any order, judgment or decree of any
court or any governmental agency, authority or body from engaging in the
businesses conducted by the Company or its subsidiaries.

5.06 INVESTMENT REPRESENTATION. Newco is acquiring the Shares
from Hancock for its own account for investment and not with a view to, or for
sale in connection with, any distribution thereof in violation of applicable
securities laws, nor with any present intention of distributing or selling the
same; and, except as contemplated by this Agreement Newco has no present or
contemplated agreement, undertaking, arrangement, obligation, liabilities or
commitment providing for the disposition thereof.

5.07 FINANCING COMMITMENTS. Newco has previously delivered to
Hancock true, accurate and complete copies of the following:

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(a) a commitment letter with respect to senior debt financing
of the transaction contemplated herein; and

(b) commitment letters from Thomas H. Lee Equity Fund III,
L.P. and SCP Private Equity Partners, L.P. relating to the purchase of an
aggregate of $50,000,000 of Newco Common Stock.

Pending the Closing, Newco shall keep in place such commitments or, in
the case of the commitment described in clause (a) above, a replacement thereof
from an institutional lender on terms no less favorable to Newco. The financing
described in clauses (a) and (b) above, taken together with not less than
$25,000,000 which is expected to be raised from the Employee Investors
(collectively the "Financing Arrangements") will be sufficient to enable Newco
to pay Hancock the Cash Consideration on the Closing Date.

5.08 NEW COMPANY; NO LIABILITIES. Newco was incorporated on
August 29, 1996 for the purpose of consummating the transactions contemplated
hereby. As of the date

hereof and as of immediately prior to the Closing,

(a) Newco's only assets are and will be cash received in
connection with the Financing Arrangements and rights under the documents and
instruments executed in connection with the transactions contemplated hereby;

(b) Newco's only liabilities are and will be its obligations
pursuant to the Financing Arrangements and its obligations under the
Contribution Documents (including without limitation, fees and expenses incurred
in connection herewith and therewith); and

(c) Newco has not, and will not have conducted any business
activities other than in connection with the negotiation and execution of the
Contribution Documents.

5.09 SOLVENCY. After giving effect to (i) the transactions
contemplated hereby, (ii) the Financing Arrangements in place on and immediately
after the Closing and (iii) the capitalization of Newco on and immediately after
the Closing, Newco will be Solvent. As used herein, "Solvent" shall mean Newco
(i) will have assets having a fair value in excess of its liabilities, (ii) will
have assets having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and matured, and
(iii) will have, and reasonably expects to continue to have, access to adequate
capital for the conduct of its business and the ability to pay its debts from
time to time incurred in connection with the operation of its business as such
debts mature. For purposes of this paragraph, Newco includes Newco and all of
its subsidiaries on a consolidated basis.

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5.10 BROKERS. Except as set forth on SCHEDULE 5.10 with
respect to Tucker Anthony Incorporated, Lee, SCP, and their respective
Affiliates, no broker or finder has acted for Newco or its Affiliates (other
than Hancock) in connection with the Agreement or the transactions contemplated
hereby, and no broker or finder is entitled to any brokerage or finder's fee or
other commission in respect of such transactions based on arrangements made by
or on behalf of Newco or any of its Affiliates (other than Hancock).

5.11 NO AGREEMENT. No agreement exists between Newco or
any shareholder of Newco or any Affiliate thereof and John Goldsmith with
respect to any reimbursement, contribution or other payment by Newco to Mr.
Goldsmith should Mr. Goldsmith be required to perform his obligations under the
Contribution Agreement attached hereto as EXHIBIT J.

6. COVENANTS.

6.01 COVENANTS OF HANCOCK WITH RESPECT TO THE COMPANY.
Hancock hereby agrees with Newco to keep, perform and fully discharge the
following covenants and agreements with respect to the Company:

(a) INTERIM CONDUCT OF BUSINESS. From the date hereof
until the Closing, Hancock shall take no action so as to cause the Company and
its Principal Subsidiaries to operate their respective businesses other than as
going concerns consistent in all material respects with prior practice and in
the ordinary course of business. Newco acknowledges and agrees that Hancock
shall not be deemed to have breached this covenant unless an action was taken by
the Company or any Subsidiary at the specific direction or authorization of
Hancock. Without limiting the generality of the foregoing, from the date hereof
until the Closing, except for (i) transactions contemplated by this Agreement,
(ii) in the case of subparagraphs (i), (ii), (v), (viii) or (ix), transactions
entered into in the ordinary course of business consistent with past practices,
(iii) transactions that could not be reasonably anticipated to have a Material
Adverse Effect or (iv) unless expressly approved in writing by Newco, Hancock
shall not cause either the Company or any of its Subsidiaries to:

(i) enter into or amend any employment, bonus,
severance or retirement contract or arrangement, or increase
any salary or other form of compensation payable or to become
payable to any executive or employee;

(ii) purchase, lease or otherwise acquire any
real estate or any interest therein;

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(iii) declare, set aside or pay any dividend or
make any other distribution with respect to any Equity
Security; provided, however, that to the extent the Company
has cash available, Hancock may, upon five (5) Business Days'
prior notice to Newco, cause the Company to pay to Hancock a
dividend in an amount not in excess of $35,000,000, which
dividend shall reduce, dollar for dollar, the Cash Boot as
provided in Section 2.01;

(iv) merge or consolidate with or agree to merge
or consolidate with, or purchase or agree to purchase all or
substantially all of the assets of, acquire securities of or
otherwise acquire any Person;

(v) sell, lease or otherwise dispose of or agree
to sell, lease or otherwise dispose of any of its assets,
properties, rights or claims, whether tangible or intangible;

(vi) authorize for issuance, issue, sell or
deliver any of its own Equity Securities;

(vii) split, combine or reclassify any class of
Equity Security or redeem or otherwise acquire, directly or
indirectly, any of its Equity Securities;

(viii) incur any liability, guaranty or obligation
(fixed or contingent);

(ix) place or permit to be placed any Lien on any
of its assets or properties;

(x) make or authorize any amendments or changes
to its Charter or By-Laws; or

(xi) make any investment in excess of $500,000,
whether singly or in the aggregate, in property, plant and
equipment and other items of capital expenditure.

(b) ACCESS. Hancock shall use its reasonable efforts to
cause the Company and each of its Principal Subsidiaries upon reasonable notice
to give Newco and its representatives and financing sources reasonable access to
all properties, assets, books, contracts, commitments and records of the Company
and each of its Principal Subsidiaries during reasonable business hours and
shall promptly furnish Newco with such financial and operating data and other
information as to the history, ownership, Affiliates, business,

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operations, properties, assets, liabilities, or condition (financial or
otherwise) of the Company and each of its Principal Subsidiaries as Newco may
from time to time reasonably request.

6.02 COVENANTS OF HANCOCK WITH RESPECT TO CLOSING. Hancock
agrees with Newco to keep, perform and fully discharge the following covenants
and agreements:

(a) SATISFACTION OF CONDITIONS. Hancock shall use all
commercially reasonable efforts to accomplish the satisfaction of the conditions
precedent to Closing contained in Section 7 herein on or prior to the Closing
Date, and to cause the Closing to occur as soon as practicable.

(b) NO SOLICITATION, CONFIDENTIALITY, ETC. Hancock agrees
that, prior to the termination of this Agreement pursuant to Section 10 neither
Hancock nor anyone acting on its behalf will (i) solicit or negotiate with
respect to any inquiries or proposals relating to (x) the possible direct or
indirect acquisition of the Shares or any other Equity Security of the Company
or any Principal Subsidiary or of all or substantially all of the assets or
business of the Company or any Principal Subsidiary of the Company or (y) any
merger, consolidation, joint venture or business combination with the Company or
any Principal Subsidiary of the Company. Newco acknowledges that the prior
distribution of material regarding the Company to interested parties shall not
be deemed to violate this Section 6.02(b). Hancock shall refrain from entering
into further discussions with such parties concerning the sale of the Company or
any Principal Subsidiary of the Company to the extent otherwise prohibited by
this Section 6.02(b). Notwithstanding the provisions of this Section 6.02(b), if
Newco shall fail to satisfy one or more of the performance milestones set forth
on EXHIBIT C hereto, Hancock may, by written notice to Newco given after the
date on which such milestone was scheduled to be completed, declare this Section
6.02(b) to be terminated, after which notice this Section shall not apply to any
action taken by Hancock, its Affiliates or representatives thereafter.

(c) ACCURACY OF REPRESENTATIONS AND WARRANTIES. Hancock
will not take any action from the date hereof to the Closing Date that would
cause any representation or warranty of Hancock contained in this Agreement to
become untrue in any material respect or cause the breach in any material
respect of any agreement hereof or covenant contained herein.

Hancock will promptly bring to the attention of Newco any facts which
come to the actual knowledge of any person named on SCHEDULE 6.02 that would
cause any of the representations and warranties of Hancock to be untrue or
materially misleading in any material respect.

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6.03 COVENANTS OF NEWCO WITH RESPECT TO THE CLOSING. Newco
hereby agrees with Hancock to keep, perform and fully discharge the following
covenants and agreements:

(a) SATISFACTION OF CONDITIONS. Newco agrees to use all
commercially reasonable efforts to accomplish the satisfaction of the conditions
precedent to Closing contained in Section 8 herein on or prior to the Closing
Date, and to cause the Closing to occur as soon as practicable.

(b) FINANCING. Newco shall use all commercially
reasonable efforts to enter into definitive credit agreements and other
agreements (the "Definitive Financing Agreements") with respect to the Financing
Arrangements and the refinancing of any Liabilities from the Company and any of
its Subsidiaries to Hancock and its Affiliates. If a portion of the Financing
Arrangements becomes unavailable under the Definitive Financing Agreements,
regardless of the reason therefor, Newco will, upon learning thereof, promptly
so advise Hancock and use its best efforts to obtain such portion of the
Financing Arrangements from other sources. Upon request, Newco shall promptly
advise Hancock as to the progress of negotiation and finalization of the
Definitive Financing Documents.

6.04 TAX MATTERS. Hancock and Newco will enter into a Tax
Matters Agreement substantially in the form attached hereto as EXHIBIT F (the
"Tax Matters Agreement") relating to the filing of Tax Returns and other
tax-related matters.

6.05 CONFIDENTIALITY. The parties agree to observe the
following covenants with respect to confidentiality:

(a) Hancock and Newco agree that no disclosure of this
Agreement or the terms and conditions hereof shall be made to any third party
without the consent of Newco and Hancock except; (i) to directors, officers,
employees, agents, auditors or advisors of Newco and Hancock or their respective
affiliates who are provided such information in connection with the consummation
of the transactions contemplated by this Agreement, and who have been informed,
and have agreed to comply with, the disclosure restrictions contained herein;
(ii) when required by law or regulation or as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation or
administrative proceeding; (iii) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state, provincial or
federal regulatory body having or claiming to have jurisdiction over Newco and
Hancock, as the case may be, or to the United States National Association of
Insurance Commissioners or similar organizations or their successors or any
nationally recognized rating agencies; or (iv) to Persons providing financings
with respect to the

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transactions contemplated herein (including certain employees of the Company and
its Subsidiaries).

(b) For a period of two (2) years after Closing, Newco shall
hold in confidence, and shall not disclose (or permit or suffer its personnel to
disclose) to any person outside its or its Affiliates' organization, any
Confidential Information (as defined below) concerning Hancock or its
Affiliates. Newco and its personnel shall use Confidential Information only for
the purposes contemplated hereby and, unless and until the Closing occurs, shall
not use or exploit such Confidential Information for its own benefit or the
benefit of another without the prior written consent of Hancock. Newco shall
disclose Confidential Information received by it under this Agreement only to
persons within its organization who have a need to know such Confidential
Information in connection with the consummation of the transactions contemplated
by this Agreement.

(c) For a period of two (2) years after the Closing, Hancock
shall hold in confidence, and shall not disclose (or permit or suffer its
personnel to disclose) to a person outside its or its Affiliates' organization,
any Confidential Information concerning Newco, the Company or any of its
Subsidiaries. Hancock shall disclose such Confidential Information only to
persons within its organization who have a need to know such Confidential
Information; provided that Hancock may disclose Confidential Information (i)
when required by law or regulation or as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation or
administrative proceeding; (ii) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state, provincial or federal
regulatory body having or claiming to have jurisdiction over Hancock or any of
its Affiliates, or to the United States National Association of Insurance
Commissioners or similar organizations or their successors or any nationally
recognized rating agency; or (iii) in connection with any Claim involving the
subject matter of this Agreement or any request for indemnification pursuant to
this Agreement.

(d) For purposes of Section 6.05(b) this Agreement,
"Confidential Information" shall mean all information regarding Hancock, the
Company or any of their respective Affiliates furnished or known by Newco prior
to, on or after the date of this Agreement. For purposes of Section 6.05(c) of
this Agreement, "Confidential Information" shall mean all information regarding
Newco, the Company and its Subsidiaries known by Hancock prior to the Closing
Date or furnished to Hancock or its Affiliates pursuant to the Shareholder
Agreement.

(e) The obligations of Newco and Hancock specified in Sections
6.05(b) and 6.05(c) above, respectively, shall not apply, and Newco and Hancock
shall have no further

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obligations, with respect to any Confidential Information to the extent that
such Confidential Information:

(i) is generally known to the public at the time
of disclosure or becomes generally known through no wrongful act on the part of
the Person charged with preserving the confidentiality of such Confidential
Information;

(ii) was known by the Person charged with
preserving the confidentiality of such Confidential Information prior to the
disclosure to such Person of the Confidential Information or was developed by
Hancock or one of its Affiliates without reference to the Confidential
Information of the Company and its Subsidiaries or was developed by the Company
or one of its Subsidiaries without reference to the Confidential Information of
Hancock and its Affiliates;

(iii) becomes known to the Person charged
with preserving the confidentiality of such Confidential Information through
disclosure by sources, other than such Person or its Affiliates or professional
advisers, having the legal right to disclose such Confidential Information;

(iv) is required to be disclosed by the Person
charged with preserving the confidentiality of such Confidential Information to
comply with applicable laws or governmental regulations; provided, that the such
Person provides prior written notice of such disclosure to the Person to which
such Confidential Information relates, and takes reasonable and lawful actions
to avoid and/or minimize the extent of such disclosure; or

(v) consists of information concerning an
account where such account was at any time prior to Closing (1) an account of
both Hancock or one of its Affiliates (other than the Company or one of its
Subsidiaries) and the Company or one of its Subsidiaries, or (2) actively
pursued as an account of Hancock or one of its Affiliates (other than the
Company or one of its Subsidiaries).

6.06 NON-COMPETITION. Hancock agrees that for a period of
two years after the Closing Date neither it nor any of its Subsidiaries shall:
(a) acquire for its own account in excess of 25% of the voting capital stock of,
or all or substantially all of the assets of, any one or more of the Persons
listed on SCHEDULE 6.06(a) attached hereto; provided that nothing herein shall
be deemed to prohibit Hancock or its Affiliates from acquiring a greater
interest in any such Person by virtue of acquiring the parent of any such
Person, where the parent is engaged primarily in the insurance or financial
services businesses, or (b) solicit to hire, hire,

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or engage as a consultant or independent contractor or in any other capacity any
of the Persons listed on SCHEDULE 6.06(b).

6.07 12B-1 FUNDS. Hancock hereby agrees that following the
Closing, the Company and its Subsidiaries shall be entitled to continue to
receive certain fees payable with respect to the sale of mutual fund interests,
until fees have been received in an amount equal to the unrecovered distribution
expenses reflected on the Financial Statements which were in the amount of
approximately $3,417,000 as of August 31, 1996 (the "12b-1 Fees"). Hancock
hereby agrees to pay to the Company the amount of such 12b-1 Fees that otherwise
would have been paid if for any reason the mutual funds have not paid such
distribution expenses on or prior to the date on which the same would otherwise
be payable.

6.08 SUTRO LITIGATION ESCROW. Newco agrees that it will
administer, at its cost and expense, the escrow account ( the "Sutro Escrow
Account") established in connection with Article VII of an agreement dated
February 28, 1986.

6.09 PUBLIC ANNOUNCEMENTS. The parties hereto agree that prior
to the Closing Date any and all general public pronouncements or other general
public communication concerning this Agreement and the transactions contemplated
herein, and the timing, manner and content of such disclosures, shall be subject
to the mutual agreement of Hancock and Newco.

6.10 FURTHER ACTION. The parties hereto agree to use their
respective best efforts to obtain the consent of mutual fund shareholders and
advisory clients to the transactions contemplated hereby and to receive an
exemptive order from the Commission with respect to mutual fund shareholder
consents not obtained by Closing.

6.11 RECONCILIATION OF ACCOUNTS. To the extent that there
exists as of the Closing any "out of balance" or similar reconciling condition
with respect to the financial records of the Company or any of its Subsidiaries
or the account of any client of the Company or any of its Subsidiaries, Newco
shall cause the Company and its Subsidiaries to use all commercially reasonable
efforts promptly after Closing to reconcile such condition, and the
administration cost and expense of doing so shall not be included as a "Loss"
for purposes of Section 9 of this Agreement.

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6.12. PURSUIT OF RIGHTS. If Hancock incurs any liability
hereunder with respect to a breach of the representation and warranty contained
in Section 4.06 hereof with respect to a Net Out of Balance Account, and such
liability relates in whole or in part to any action or omission on the part of
Wexford Clearing Services Corporation ("Wexford") with respect to any account
maintained by Wexford for the account of any customer of the Company or any
Subsidiary, the Company agrees that it will use commercially reasonable efforts
to pursue any claim which the Company or any Subsidiary may have against Wexford
arising out of such action or omission, and that any amounts received from
Wexford with respect to any such claim will be credited against amounts payable
by Hancock.

6.13. COMPLIANCE WITH SECTION 15(f). Hancock and its
Affiliates shall comply, and shall use all reasonable efforts to cause the
Investment Companies and the Boards of Trustees of the Investment Companies to
comply, at all times prior to the Closing with the requirements specified in
Section 15(f) of the Investment Company Act in order to permit Hancock to be
entitled to the benefits thereof. Newco and its Subsidiaries shall comply, and
shall use all reasonable efforts to cause the Investment Companies and the
Boards of Trustees of the Investment Companies to comply, at all times from and
after the Closing with the requirements specified in Section 15(f) of the
Investment Company Act in order to permit Hancock to be entitled to the benefits
thereof.

6.14. FURTHER COOPERATION. Each of Hancock and Newco agrees
that it will use all reasonable efforts, including making personnel and records
available upon reasonable request, to assist the other party in fulfilling its
obligations and exercising its rights hereunder.

7. CONDITIONS TO OBLIGATIONS OF NEWCO

The obligations of Newco under this Agreement are subject to
the fulfillment, at the Closing Date, of the following conditions precedent,
each of which may be waived in writing in the sole discretion of Newco;

7.01 CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES OF
HANCOCK; COMPLIANCE WITH OBLIGATIONS. The representations and warranties of
Hancock contained herein and in the Tax Matters Agreement shall be true in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of such date, except (i) representations and
warranties that were made as of a specified date shall continue on the Closing
Date to be true as of the specified date, (ii) for any changes permitted by the
terms hereof or consented to in writing by Newco and (iii) as provided in
amended schedules delivered by Hancock to Newco prior to the Closing Date, if
Newco agrees to accept such amended schedules. Hancock shall have performed and
complied in all material respects with

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all terms, conditions, obligations, agreements and restrictions required by this
Agreement to be performed or complied with by Hancock prior to or at the Closing
Date. Notwithstanding the foregoing, in the event that the Closing shall not
have occurred on or before November 26, 1996, then the condition set forth in
this Section 7.01 shall be deemed to have been satisfied if the representations
and warranties of Hancock contained herein shall have been true in all material
respects as of November 26, 1996, except (i) representations and warranties that
were made as of a specific date shall continue as of November 26, 1996 to be
true as of the specified date, (ii) for any changes permitted by the terms
hereof or consented to in writing by Newco, and (iii) as provided in amended
schedules delivered to Newco prior to November 26, 1996, if Newco agrees to
accept such amended schedules no later than November 26, 1996, and the opinion
of counsel required by Section 7.04, the consents and deliveries required by
Sections 7.02 and 7.05 and the Transitional Service Agreement and the Tax
Matters Agreement required by Sections 7.10 and 7.11 shall be placed into escrow
pending the Closing and the conditions required by such Sections and Section
7.07 shall be deemed to be satisfied for all purposes of this Agreement. Newco
agrees that if amended disclosure schedules are delivered to Newco pursuant to
Section 9.01 prior to November 26, 1996, Newco must confirm to Hancock prior to
November 26, 1996 whether Newco accepts such disclosure schedules as so amended.

7.02 GOVERNMENTAL AND THIRD PARTY APPROVALS. The consents
and approvals specified on SCHEDULE 7.02 shall have been obtained.

7.03 ADVERSE PROCEEDINGS. No action or proceeding by or
before any court or other governmental body shall have been instituted or
threatened by any governmental body or person whatsoever which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.

7.04 OPINION OF COUNSEL. Newco shall have received an
opinion of Hale and Dorr, counsel to Hancock, dated as of the Closing Date, in
form and content reasonably acceptable to Newco.

7.05 CLOSING DELIVERIES. Newco shall have received at or
prior to the Closing the following:

(a) the stock certificates representing the Shares duly
endorsed in accordance with Subsection 2.01 of this Agreement;

(b) certificates of Hancock's officers evidencing
satisfaction of the conditions specified in Section 7.01;

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(c) a certificate of the Secretary of Hancock attesting
to the incumbency of Hancock's officers, the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement, and the
authenticity and continuing validity of the charter documents and by-laws;

(d) a certificate of the Secretary of State of the
Commonwealth of Massachusetts as to the legal existence and good standing of the
Company in Massachusetts;

(e) the resignations, effective as of the Closing Date,
of all Directors and officers of the Company that are not employed thereby, so
requested by Newco at least two Business Days prior to the Closing Date; and

(f) a cross receipt executed by Newco and Hancock.

7.06 FINANCING. Financing for the transactions
contemplated hereby shall have been provided in accordance with the terms of the
Definitive Financing Agreements.

7.07 APPROVAL OF FUND TRUSTEES OR DIRECTORS. By a vote of
not less than a majority of all of the members of each Fund's Board of Trustees
or Directors and not less than a majority of all of the trustees or directors of
each Fund who are not "interested persons" of the relevant Fund, the Board of
Trustees or Directors of each Fund shall have adopted resolutions approving the
adoption of new investment advisory agreements between the Fund and Freedom
Capital Management Corporation substantially in the form to be filed with the
Funds' respective preliminary proxy materials, with changes to reflect the party
to the agreements and the duration thereof and such other changes as may be
approved by Hancock (the "Fund Agreements"). The resolutions approving each
action referred to in this Section 7.07 shall not have been amended, modified or
rescinded and shall remain in full force and effect.

7.08 APPROVAL OF FUND SHAREHOLDERS. Either (a) the
shareholders of each of the Funds, by the vote of a majority of such Fund's
outstanding voting securities, as defined in the Investment Company Act, or the
applicable class or series thereof, shall have approved the Fund Agreements or
(b) the Funds shall have received an exemptive order from the Commission
permitting the Funds to implement the Fund Agreements without prior Fund
shareholder approval for a period beginning on the Closing Date and ending on
the earlier of the 120th day after the Closing Date or the date the Fund
Shareholders approve or disapprove of the Fund Agreement.

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7.09 EXECUTION OF THE FUND AGREEMENTS. Each of the Funds shall
have duly authorized, executed and delivered the Fund Agreements.

7.10 TRANSITIONAL SERVICES AGREEMENT. Hancock shall have
executed and delivered the Transitional Services Agreement.

7.11 TAX MATTERS AGREEMENT. Hancock shall have executed and
delivered the Tax Matters Agreement to Newco.

7.12 NO MATERIAL ADVERSE EFFECT. Since the date of execution
of this Agreement, there shall have been no event or occurrence which has had,
or is reasonably

likely to have, a Material Adverse Effect.

8. CONDITIONS TO OBLIGATIONS OF HANCOCK

The obligations of Hancock under this Agreement are subject to
the fulfillment, at the Closing Date, of the following conditions precedent,
each of which may be waived in writing by Hancock in its sole discretion:

8.01 CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES OF
NEWCO; COMPLIANCE WITH COVENANTS AND OBLIGATIONS. The representations and
warranties of Newco in this Agreement shall be true in all material respects on
and as of the Closing Date as though such representations and warranties were
made on and as of such date, except (i) representations and warranties that were
made as of a specified date shall continue on the Closing Date to be true as of
the specified date and (ii) for any changes consented to in writing by Hancock.
Newco shall have performed and complied with all terms, conditions, covenants,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or at the Closing Date. Newco shall
have accepted any amendments to the disclosure schedule to Sections 3 and 4 of
this Agreement delivered by Hancock to Newco prior to the Closing.

8.02 CORPORATE PROCEEDINGS. All corporate and other
proceedings required to be taken on the part of Newco to authorize or carry out
this Agreement shall have been taken.

8.03 GOVERNMENTAL AND THIRD PARTY APPROVALS. The consents and
approvals specified on SCHEDULE 7.02 shall have been obtained.

8.04 ADVERSE PROCEEDINGS. No action or proceeding by or before
any court or other governmental body shall have been instituted or threatened by
any governmental body

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or person whatsoever which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or which might affect the right of
Hancock to transfer the Shares.

8.05 OPINION OF COUNSEL. Hancock shall have received an
opinion of Hutchins, Wheeler & Dittmar, counsel to Newco, dated as of the
Closing Date, in form and content reasonably acceptable to Hancock.

8.06 TAX MATTERS AGREEMENT. Newco shall have entered into
a Tax Matters Agreement substantially in the form attached hereto as Exhibit F.

8.07 ADDITIONAL SHARE AGREEMENT. Newco shall have entered
into the Additional Share Agreement substantially in the form of Exhibit A
hereto.

8.08 NEWCO SHAREHOLDER AGREEMENTS. Each of the
shareholders of Newco shall have entered into a Shareholder Agreement
incorporating the terms set forth on EXHIBIT B attached hereto. Hancock shall
have been provided with copies of the Definitive Financing Documents, the
articles of incorporation and by-laws of Newco and each agreement relating to
Newco to which Newco, Lee, SCP or Employee Investors is a party (collectively,
the "Newco Documents"), and the Newco Documents shall not be inconsistent in any
material respect with the commitment letters submitted to Hancock prior to
execution of this Agreement.

8.09 MANAGEMENTS' OBLIGATIONS. Employee Investors shall
have contributed not less than $25,000,000 to the capital of Newco in exchange
for Newco Common Stock.

8.10 CLOSING DELIVERIES. Hancock shall have received at or
prior to the Closing the following:

(a) such certificates of Newco's officers and such other
documents evidencing satisfaction of the conditions specified in this Section 8
as Hancock shall reasonably request;

(b) a certificate of the Secretary of State of the State
of Delaware as to the legal existence and good standing (including tax) of Newco
in Delaware;

(c) a certificate of the Secretary of Newco attesting to
the incumbency of Newco's officers, the authenticity of the resolutions
authorizing the transactions contemplated

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by this Agreement, and the authenticity and continuing validity of the charter
documents and by-laws;

(d) payment of the Cash Consideration and receipt of the
Hancock Newco Shares;

(e) payment to Hancock and its affiliates (other than the
Company and its Subsidiaries) of amounts necessary to satisfy all outstanding
liabilities or advances (including interest thereon) made by Hancock or its
Affiliates (other than the Company and its Subsidiaries) to the Company or any
of its Subsidiaries as of the Closing Date;

(f) organizational documents of Newco certified by the
President of Newco;

(g) a cross receipt executed by Newco and Hancock; and

(h) a certificate of the chief financial officer of Newco
confirming that after giving effect to (i) the transactions contemplated hereby,
(ii) the Financing Arrangements in place on and immediately after the Closing,
(iii) the repayment of any indebtedness from the Company and/or any Subsidiary
to Hancock; and (iv) the capitalization of Newco on and immediately after the
Closing:

(i) the fair value and present fair value of
Newco's assets will exceed the probable liabilities of Newco;

(ii) Newco will be able to pay its probable
liabilities as they mature;

(iii) Newco will have sufficient cash flow to
enable it to pay its probable liabilities as they mature; and

(iv) Newco will not have unreasonably small
capital with which to conduct its business as now conducted and as planned to be
conducted.

8.11 REPAYMENT OF COMMERCIAL PAPER FACILITY. All
Liabilities owed by the Company or any of its Subsidiaries to Hancock or any of
its Affiliates shall have been repaid in full.

8.12 GOLDSMITH CONTRIBUTION AGREEMENT. John Goldsmith
shall have executed and delivered to Hancock a Contribution Agreement in the
form of EXHIBIT G hereto.

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9. INDEMNIFICATION

9.01 SURVIVAL. The parties agree that the representations and
warranties contained in Sections 3, 4 and 5 shall survive the Closing until
April 1, 1998, except with respect to the representations and warranties set
forth in Sections 3.02, 4.03 and 5.03, which shall survive the Closing without
limitation. From and after the applicable period of survival with respect to
such respective representations and warranties of Hancock and Newco, neither
Hancock nor Newco nor any of their respective Affiliates shall have any
liability whatsoever with respect to any such representation or warranty, except
for breaches as to which any party shall have notified the other party in
writing prior to such date. The covenants contained in Sections 6.01, 6.02,
6.03, 6.04, 6.09 and 6.10 shall survive until the Closing, those contained in
Sections 6.05(b), 6.05(c), 6.06 and 6.07 shall survive during the periods
contemplated in those Sections, and those contained in Sections 6.05(a), 6.08,
6.11, 6.12, 6.13 and 6.14 shall survive the Closing without limit as to
duration. The obligations of Hancock and Newco under this Section 9 shall
continue without limit until they have been satisfied. The parties agree that
Hancock may amend the schedules setting forth exceptions to the representations
and warranties contained in Sections 3 and 4 to reflect any item or fact which
first becomes known to Hancock after execution of this Agreement. In such event,
Hancock shall deliver any such amended schedule to the Company as soon as
practicable after Hancock becomes aware of the need to amend such Schedule, but
in any event not less than three Business Days prior to Closing (or if Hancock
first becomes aware of an item or fact prior to Closing but less than three
Business Days prior to Closing, as soon as practicable after Hancock gains such
awareness). For the purposes of determining whether the closing condition set
forth in Section 7.01 has been satisfied, such disclosure schedules, unless
accepted by Newco, shall be read without inclusion of any such amendment, but if
Newco elects to close the transaction herein set forth, the disclosure schedules
as so amended shall be deemed the disclosure schedules for purposes of
determining whether Hancock has any liability under Section 9.02.

9.02 INDEMNIFICATION BY HANCOCK. Hancock hereby agrees to
indemnify, defend and hold Newco, its officers, directors, employees, owners,
agents and Affiliates, harmless from and in respect of any and all Losses (as
defined in Section 9.10), arising out of or resulting from (a) any breach or
inaccuracy of any representation or warranty contained in Section 3 or 4 of this
Agreement, (b) any breach by Hancock of its obligations under the last sentence
of Section 4.15(a) or under Section 6.06 or 6.07. Notwithstanding the foregoing,
Hancock shall have no liability under this Section 9.02 with respect to any Loss
attributable to the failure to obtain any third party consent or approval other
than those set forth on SCHEDULE 7.02.

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9.03 SPECIAL INDEMNIFICATION WITH RESPECT TO CERTAIN MATTERS.
Hancock hereby agrees to indemnify, defend and hold Newco, its officers,
directors employees, owners, agents and Affiliates harmless from and in respect
of all Losses which may be incurred after the Closing Date with respect to (i)
(x) the claims set forth in County of Cuyahoga, Case No. 293074, Court of Common
Pleas, Cuyahoga County, Ohio, and any other actions which may be brought on the
basis of the claims set forth in such case (the "Cuyahoga Claim"), (y) claims
which may be asserted with respect to the sale of interests in the New England
Residential Properties limited partnership, or the operation of such partnership
(the "New England Properties Claim"), or (z) claims which may be asserted with
respect to the establishment or administration of, or payments made or withheld
from, the Sutro Escrow Account, including, without limitation, any claims for
damages arising out of liabilities which were intended to be paid from the Sutro
Escrow Account and the amount payable by Sutro & Co. Incorporated with respect
to any such liabilities (the "Sutro Claim" and, together with the Cuyahoga Claim
and the New England Properties Claim, the "Special Litigation Matters"), (ii)
the Internal Revenue Service examination of the Profit-Sharing Retirement Plan
for Employees of Tucker Anthony Incorporated for plan years 1992 through 1995
(including any sanction payments that may be imposed or negotiated under any
closing agreement) (the "Special Employee Benefit Matter") and (iii) the
investigation by any one or more of the New York Stock Exchange, the Commission
and the National Association of Securities Dealers, Inc. of any breach by John
Hancock Clearing Corporation of the net capital rules during the period March
29, 1996 through the date of this Agreement (the "Net Capital Matter");
provided, however, that (a) with respect to the first $2 million of Losses
related to the Special Litigation Matters, Newco shall be responsible for 50% of
such Losses, (b) with respect to Losses related to the Special Litigation
Matters in excess of $2 million but not in excess of $12 million, Newco shall be
responsible for 20% of such Losses, and (c) with respect to Losses related to
the Special Employee Benefit Matter, Newco shall be responsible for 25% of such
Losses, up to a maximum liability on the part of Newco in connection with the
Special Employee Benefit Matter of $100,000. Newco agrees that before it
releases any funds from the Sutro Escrow Account it will give prior written
notice to Hancock, setting forth the reason for such proposed release, and that
it will give Hancock a reasonable opportunity to discuss such proposed action
before such release is effected.

9.04 INDEMNIFICATION BY NEWCO. Newco hereby agrees to
indemnify, defend and hold Hancock, its officers, directors, employees,
consultants, owners, agents and Affiliates, harmless from and in respect of any
and all Losses which may be sustained or suffered by any of them (a) arising out
of or resulting from any breach or inaccuracy of any representation or warranty
contained in Section 5 of this Agreement, (b) arising out of a breach by Newco
of its covenants in Sections 6.12 and 6.13, and (c) arising out of any and all
actions, suits, claims and administrative or other proceedings of every kind and
nature

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instituted or pending against Hancock or any of its Affiliates at any time
before or after the Closing Date to the extent that such Losses (a) relate to or
arise out of or in connection with the assets, businesses, operations, conduct,
products and/or employees (including former employees) of the Company or any of
its Subsidiaries, relating to or arising out of or in connection with
occurrences after the Closing Date and (b) do not arise out of a breach or
inaccuracy of Hancock's representations and warranties in, or a breach or
default in the performance of any warranty, covenant under, undertaking or other
agreement contained in this Agreement or any other Contribution Document.

9.05 MINIMUM INDEMNIFICATION. Notwithstanding anything to
the contrary contained herein, but subject to the last sentence of this Section
9.05, Hancock shall have no liability with respect to the indemnification
required under Section 9.02(a) unless and until the total of all claims for
Losses under that Section exceeds $1,750,000, and (b) Newco shall have no
liability with respect to the indemnification required under Section 9.04(a)
unless and until the total of all claims for Losses under that Section exceeds
$1,750,000, and then only for the amount by which such claims for indemnity or
damages exceeds $1,750,000. The foregoing limitations shall not apply with
respect to any Loss arising out of a breach of a representation or warranty
contained in Section 3.02, 3.05, 4.03, 5.03 or 5.10, or with respect to
Hancock's obligations under Sections 9.02(b) or 9.03 or with respect to Newco's
obligations under Section 9.04(b) or (c).

9.06 MAXIMUM INDEMNIFICATION FOR CERTAIN LOSSES. In no
event shall either (a) the maximum aggregate amount payable by Hancock with
respect to the indemnification required under Section 9.02(a) and under Section
9.03 exclusive of any amount paid with respect to a breach of a representation
or warranty contained in Section 3.02 or 4.03, or (b) the maximum aggregate
amount payable by Newco under Sections 9.03 and 9.04(a), exceed $30,000,000.

9.07 NOTICE AND OPPORTUNITY TO DEFEND. Hancock and Newco
agree as follows with respect to the defense of any matter for which
indemnification is payable hereunder:

(a) Subject to the provisions of subparagraph
(b) of this Section 9.07 with respect to a matter for which indemnity is payable
under Section 9.03, if there occurs an event which a party asserts is an
indemnifiable event pursuant to Section 9.02, 9.03, or 9.04, the parties seeking
indemnification shall promptly notify the other parties obligated to provide
indemnification (collectively, the "Indemnifying Party"). If such event involves
(a) any Claim or (b) the commencement of any action, suit or proceeding by a
third person, the party seeking indemnification will give such Indemnifying
Party prompt written notice of such Claim or the

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commencement of such action, suit or proceeding, PROVIDED, HOWEVER, that the
failure to provide prompt notice as provided herein will relieve the
Indemnifying Party of its obligations hereunder only to the extent that such
failure prejudices the Indemnifying Party hereunder. In case any such action,
suit or proceeding shall be brought against any party seeking indemnification
and it shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that it desires to do so, to assume the defense thereof, with counsel reasonably
satisfactory to such party seeking indemnification and, after notice from the
Indemnifying Party to such party seeking indemnification of such election so to
assume the defense thereof, the Indemnifying Party shall not be liable to the
party seeking indemnification hereunder for any attorneys' fees or any other
expenses, in each case subsequently incurred by such party, in connection with
the defense of such action, suit or proceeding. The party seeking
indemnification agrees to cooperate fully with the Indemnifying Party and its
counsel in the defense against any such action, suit or proceeding. In any
event, the party seeking indemnification shall have the right to participate at
its own expense in the defense of such action, suit or proceeding. In no event
shall an Indemnifying Party be liable for any settlement or compromise effected
without its prior consent. If, however, the party seeking indemnification
refuses its consent to a BONA FIDE offer of settlement which the Indemnifying
Party wishes to accept (which must include the unconditional release of the
parties seeking indemnification from all liability with respect to the Claim at
issue), the party seeking indemnification may continue to pursue such matter,
free of any participation by the Indemnifying Party, at the sole expense of the
party seeking indemnification. In such event, the obligation of the Indemnifying
Party to the party seeking indemnification shall be equal to the lesser of (i)
the amount of the offer or settlement which the party seeking indemnification
refused to accept plus the costs and expenses of such party prior to the date
the Indemnifying Party notifies the party seeking indemnification of the offer
of settlement and (ii) the actual out-of-pocket amount the party seeking
indemnification is obligated to pay as a result of such party's continuing to
pursue such matter.

(b) Notwithstanding the provision of subparagraph (a) of this
Section 9.07, Hancock and Newco agree as follows with respect to the defense of
the Net Capital Matter, Special Litigation Matters and the Special Employee
Benefit Matter. Newco shall control the defense of any Special Litigation Matter
until such time as the aggregate Losses with respect to all Special Litigation
Matters are reasonably likely to exceed $2 million. Thereafter, Hancock shall
have the right to assume the control of the defense of such Special Litigation
Matters as Hancock elects to control in its sole discretion. Hancock shall also
have the right to assume the control of the defense of the Special Employee
Benefit Matter and the Net Capital Matter. With respect to the Special
Litigation Matters and the Special Employee Benefit Matter, the party which does
not control the defense thereof may participate in such defense at its own cost.
Hancock and Newco agree that their mutual consent shall be required

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for any settlement of any of the Special Litigation Matters which includes
aggregate Losses with respect to any Special Litigation Matter exceeding
$500,000 or any settlement of the Special Employee Benefit Matter which includes
aggregate Losses with respect thereto which are reasonably likely to be less
than $400,000. Hancock shall be entitled to settle without Newco's consent the
Special Employee Benefit Matter if the aggregate Losses with respect thereto are
reasonably likely to exceed $400,000. Hancock shall have the right to approve
the settlement of the Net Capital Matter, without Newco's approval, if such
settlement involves only a monetary penalty. Newco also agrees that it will
agree to liquidate John Hancock Clearing Corporation if so requested as part of
the settlement of the Net Capital Matter. If settlement of the Net Capital
Matter involves other than a monetary penalty and liquidation of John Hancock
Clearing Corporation, the approval of each of Hancock and Newco shall be
required, which shall not be unreasonably withheld. Hancock shall be entitled to
settle without Newco's consent any of the Special Litigation Matters if the
aggregate Losses with respect to all Special Litigation Matters are reasonably
likely to exceed $12 million.

9.08 CONTRIBUTION. If the indemnification provided for in
Section 9.02 or 9.04 as the case may be, of this Agreement is unavailable to a
party seeking indemnification in respect to any Losses, then the Indemnifying
Party, in lieu of indemnifying such party seeking indemnification, shall have an
obligation to contribute, and shall contribute, to the amount paid or payable by
such party seeking indemnification as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party, on the one hand, and the party seeking indemnification, on the other
hand, in connection with the actions which resulted in such Losses, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party and the parties seeking indemnification shall be determined
by reference to, among other things, whether any action in question, including
any breach or inaccuracy of any representation or warranty, relates to
information supplied by the Indemnifying Party or the parties seeking
indemnification and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it will not be just and equitable if contribution
pursuant to the preceding provisions of this Section 9.08 were determined by any
method of allocation which does not take into account the equitable
considerations referred to in such provisions. No Person guilty of fraudulent
misrepresentation shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

9.09 EXCLUSIVE REMEDY. The parties hereto agree that, except
as provided in Section 10.3, and except for the obligations of the parties under
Section 6.05 and under the Tax Matters Agreement, the indemnification provided
by this Section 9 shall be an Indemnified Party's sole and exclusive remedy
against an Indemnifying Party for the recovery of any Loss under this Agreement
or the transactions contemplated by this Agreement.

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9.10 DETERMINATION OF LOSS. The term "Loss" or "Losses" shall
mean any and all losses, damages, costs and expenses of any kind and nature
whatsoever (including without limitation, interest and penalties, reasonable
expenses of investigation and court costs, reasonable attorneys' fees and
disbursements and the reasonable fees and disbursements of other professionals)
which may be sustained or suffered by a party hereto with respect to an event or
matter for which an Indemnifying Party is obligated to provide indemnity
hereunder. With respect to Losses consisting of amounts which the Company or any
of its Subsidiaries pays in defense of any Special Litigation Matter, the
Special Employee Benefit Matter or the Net Capital Matter, the term Loss shall
include only amounts paid from and after the Closing Date; provided that Hancock
agrees that it will not cause the Company or any of its Subsidiaries to
accelerate such payments prior to the Closing Date. Losses shall be calculated
net of any insurance proceeds actually received by the Company or any of its
Subsidiaries with respect to the event or occurrence giving rise to
indemnification, and the Company shall use, or shall cause its Subsidiaries to
use, commercially reasonable efforts to pursue any insurance recovery which may
be available with respect to any matter for which indemnification is sought
under this Section 9. Losses shall also be calculated on an after-tax basis,
such that indemnification payments shall be net of the present value of any tax
benefit to the recipient (Newco or Hancock) of such payments with respect to the
Loss which gave rise to such indemnification, and shall be increased by the
amount, if any, of tax payable by the recipient on account of the receipt of
such payments, it being the intent of the parties that the purpose of the
indemnification provisions of this Section 9 is to hold harmless the indemnified
party from the after tax economic effect of any Loss (subject to the limitations
contained in Sections 9.05 and 9.06).

9.11 EFFECT OF INDEMNIFICATION. Newco and Hancock agree that
should either party be required to provide indemnity pursuant to this Article 9,
such amount shall be deemed for tax reporting purposes to be an adjustment to
the consideration provided under Section 2.01.

10. TERMINATION OF AGREEMENT

10.01 TERMINATION BY LAPSE OF TIME. This Agreement shall
terminate at 5:00 p.m., Boston Time, on November 26, 1996, if the transactions
contemplated hereby have not been consummated, unless such date is extended by
the written consent of Newco and Hancock; provided, however, that if the
Commission shall fail to grant exemptive relief on or before November 26, 1996
permitting Hancock and Newco to consummate the transaction contemplated herein
without first obtaining the approval of the Funds shareholders, then the date on
which this Agreement shall terminate shall automatically be extended to December
31, 1996. In addition, if Newco fails to achieve a performance milestone set
forth on EXHIBIT D

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hereto, Hancock may terminate the Agreement by written notice given by Newco
after the date on which such milestone was to have been performed, and prior to
the date of such performance. Upon request, Hancock shall be provided with such
evidence as it may reasonably request of the completion of such milestones.

10.02 TERMINATION BY AGREEMENT OF THE PARTIES. This Agreement
may be terminated by the mutual written agreement of the parties hereto.

10.03 AVAILABILITY OF REMEDIES AT LAW. In the event of such
termination pursuant to this Section 10, Newco shall have no further obligation
or liability to Hancock under this Agreement, and Hancock shall have no further
obligation or liability to Newco under this Agreement except for a breach of
Sections 6.02(b), 6.05 and 17 of this Agreement which shall survive the Closing
without limitation.

11. RESTRICTION ON USE OF CERTAIN NAMES

(a) Newco acknowledges that, prior to the Closing Date,
Hancock and its Affiliates (other than the Company and its Subsidiaries) have,
and after the Closing Date such Persons will continue to have, the absolute and
exclusive proprietary right to all names, marks, trade names and trademarks
(collectively, "Names") incorporating "John Hancock" or using any John Hancock
logo, by itself or in combination with any other Name, and that none of the
rights thereto or goodwill represented thereby or pertaining thereto are being
transferred hereby or in connection herewith or being acquired as a result of
the transactions contemplated hereby; provided, however, that Newco shall not
have any liability to Hancock if during the twelve month period commencing on
the Closing Date Newco or its Affiliates make incidental or accidental use of
names incorporating "John Hancock" or use any John Hancock logo, but only to the
extent that Newco is attempting in good faith to discontinue the use of such
name and logo and discontinues any particular use promptly after becoming aware
of the same. On the Closing Date Newco shall cause the Company and each of its
Subsidiaries to change its corporate name so as to exclude the "John Hancock"
name or any confusingly similar name.

(b) Hancock acknowledges and agrees that, from and after the
Closing Date, Newco and its Affiliates shall have the absolute and exclusive
proprietary right to all Names incorporating "Freedom", "Tucker Anthony" or
"Sutro", or using the Freedom, Tucker Anthony or Sutro logos, by themselves or
in combination with any other Name, and that no right in such Names shall be
retained by Hancock or any of its Affiliates. From and after the Closing Date,
Hancock will cause the Freedom, Tucker Anthony or Sutro funds they manage to
change their name to exclude the "Freedom," "Tucker Anthony" or "Sutro" names,
as applicable, and Hancock will not, nor will it permit any of its Affiliates
to, use the name

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"Freedom", "Tucker Anthony" or "Sutro", or any name or phrase containing such
names, or any confusingly similar names, or the Freedom, Tucker Anthony or Sutro
logos. Notwithstanding the foregoing, Hancock's Affiliates may, for a period
ending April 30, 1998, continue to use the "Freedom" name in one or more trust
instruments executed in connection with mutual funds its Affiliates sells or
manages, and in proxy statements and regulatory filings made with respect to
such funds; provided that in no event shall Hancock use or permit such funds to
sue the "Freedom" name in any advertising, marketing or promotional efforts
(except to the extent necessary to identify a trust incorporating "Freedom" in
its name).

(c) If, after the Closing Date, Newco or any of its Affiliates
shall prepare any general advertisement to the effect that the Company and/or
one or more of its Subsidiaries are affiliated with Newco and not Hancock or its
Affiliates, Hancock shall have the right to review, comment upon and consent to
(which shall not be unreasonably withheld) such advertisement not less than five
Business Days prior to its first use.

12. AGREEMENT TO SATISFY CERTAIN LIABILITIES AND ADVANCES. Newco
agrees and covenants that it will pay, at or prior to the Closing, to Hancock
the amount necessary to satisfy as of the Closing Date all outstanding
liabilities and advances (including interest thereon) made by Hancock or its
Affiliates (other than the Company and its Subsidiaries) to the Company or any
of its Subsidiaries. Hancock agrees and covenants that it will pay, at or prior
to the Closing, to the Company or its Subsidiaries, as applicable, the amount
necessary to satisfy all outstanding liabilities and advances (including
interest thereon) made by the Company or its Subsidiaries, as applicable, to
Hancock as of the Closing Date.

13. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered personally or sent
by facsimile, federal express, registered or certified mail, postage prepaid,
addressed as follows or to such other address of which the parties may have
given notice:

To Newco: JHFSC Acquisition Corp.
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02108
Facsimile: 617-227-3514
Attn: Thomas M. Hagerty

With copies to: Tucker Anthony Incorporated
One World Financial Center
200 Liberty Street

<PAGE> 54

EXECUTION COPY

New York, New York 10281
Facsimile: 212-225-8852
Attn: Kevin J. McKay, Esq.

Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Facsimile: 617-951-1295
Attn: James Westra, Esq.

Ropes & Gray
One International Place
36th Floor
Boston, MA 02110
Facsimile: 617-951-7050
Attn: Alfred O. Rose, Esq.

To Hancock: John Hancock Mutual Life
Insurance Company
200 Clarendon Street
Boston, MA 02116
Facsimile: 617-572-4111
Attn: Foster Aborn, Vice Chairman
and Chief Investment Officer

With a copy to:
John Hancock Mutual Life
Insurance Company
200 Clarendon Street
Boston, MA 02116
Facsimile: 617-572-9268
Attn: Joanne P. Acford, Esq.
Second Vice President and Counsel

Hale and Dorr
60 State Street
Boston, MA 02109
Facsimile: 617-526-5000
Attn: Jeffrey N. Carp, Esq.

<PAGE> 55

EXECUTION COPY

Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date of personal delivery or facsimile transmission
(with telephone confirmation), or (b) one Business Day after being sent, if sent
by federal express, or (c) three Business Days after being sent, if sent by
registered or certified mail.

14. SUCCESSORS AND ASSIGNS

This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
Newco, on the one hand, and Hancock, on the other hand, may not assign their
respective obligations hereunder without the prior written consent of the other
party; provided, however, that Newco may grant a security interest in its rights
under Section 9 hereof to any Person who provides financing for the transactions
described herein. Any assignment in contravention of this provision shall be
void. No assignment shall release Newco or Hancock from any obligation or
liability under this Agreement.

15. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS

(a) This Agreement and all Schedules hereto represent the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof and supersede all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between such
parties, except that this Agreement shall not supersede the Confidentiality
Agreement, dated the date hereof, among Hancock, Lee and SPC. The parties, may
amend or modify this Agreement, in such manner as may be agreed upon, by a
written instrument executed by Newco and Hancock.

(b) If the provisions of any Schedule to this Agreement are
inconsistent with the provisions of this Agreement, the provisions of the
Agreement shall prevail. The Schedules attached hereto or to be attached
hereafter are hereby incorporated as integral parts of this Agreement.

16. SEVERABILITY

Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provision of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.

<PAGE> 56

EXECUTION COPY

17. EXPENSES

Each of Newco and Hancock shall pay all fees and expenses
(including, without limitation, legal, accounting and financial advisory and/or
investment banking fees and expenses) incurred by such party in connection with
the transactions contemplated hereby. Hancock shall cause the Company to advance
all expenses associated with soliciting the approval of Fund Shareholders
described in Section 7.08, and if the transaction herein contemplated is
consummated, half of such solicitation expenses shall be borne by Hancock and
half by Newco. Except as set forth in the preceding sentence with respect to
expenses associated with securing approval of the Fund Shareholders, the Company
and its Subsidiaries shall be responsible for all expenses that they incurred in
connection with the transactions contemplated by this Agreement.

18. GOVERNING LAW

This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.

19. SECTION HEADINGS

The section headings are for the convenience of the parties
and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.

20. COUNTERPARTS

This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall be one
and the same document.

<PAGE> 57

CONTRIBUTION AGREEMENT

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF this Agreement has been duly executed by the parties
hereto as of and on the date first above written.

(Corporate Seal) Newco:

ATTEST: JHFSC ACQUISITION CORP.

/s/ James Westra By: /s/ John H. Goldsmith
- - - - - - - - - - - - - - - ----------------------------- -------------------------------------
Secretary Name: John H. Goldsmith
Title: President

Hancock:

(Corporate Seal) JOHN HANCOCK SUBSIDIARIES, INC.

ATTEST:

By: /s/ John T. Farady
-------------------------------------
Name: John T. Farady
Title: Treasurer

- - - - - - - - - - - - - - - -----------------------------
Secretary

Lee:

THOMAS H. LEE EQUITY FUND III, L.P.

By: THL Equity Advisors III Limited
Partnership, General Partner

By: THL Equity Trust III, General Partner

By: /s/ Thomas M. Hagerty
-------------------------------------
Name: Thomas M. Hagerty
Title: Vice President

-S1-

<PAGE> 58

CONTRIBUTION AGREEMENT

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF this Agreement has been duly executed by the parties
hereto as of and on the date first above written.

SCP:

SCP PRIVATE EQUITY PARTNERS, L.P.

By: /s/ Samuel A. Plum
-------------------------------------
Name: Samuel A. Plum
Title: General Partner

-S2-

<PAGE> 1
Exhibit 10.2

EXECUTION COPY
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------

JHFSC ACQUISITION CORP.

------------------

STOCKHOLDERS AGREEMENT

------------------

DATED AS OF NOVEMBER 30, 1996

<PAGE> 2

TABLE OF CONTENTS

1. DEFINITIONS................................................................2
1.1. Certain Definitions ..............................................2
1.2. Certain Matters of Construction ..................................7
1.3. Cross Reference Table ............................................7

2. VOTING AGREEMENT ..........................................................8
2.1. Election of Directors ............................................9
2.2. Removal; Veto Rights .............................................9
2.3. Successors ......................................................10
2.4. Committees ......................................................10
2.5. Certain Liquidity Transactions ..................................10
2.6. Period ..........................................................11

3. CERTAIN TRANSFER RIGHTS AND RESTRICTIONS .................................11
3.1. Transfers of Employee Securities ................................12
3.2. Transfers by Holders of Fund Securities and
Seller Securities ...............................................13
3.3. Transfers of Employee Securities to the Company .................15
3.4. Period ..........................................................16
3.5. Lock-Up .........................................................16

4. CALL OPTIONS TO PURCHASE SECURITIES.......................................16
4.1. Call Options on Employee Securities Upon
Termination of Employment .......................................16
4.2. Call Options on Securities Pledged to
Financial Institution ...........................................17
4.3. Assignment of Call Right ........................................17
4.4. Closing .........................................................17
4.5. Period ..........................................................17

5. "TAKE ALONG" RIGHTS .....................................................17
5.1. Procedure .......................................................18
5.2. Certain Legal Requirements ......................................18
5.3. Further Assurances ..............................................19
5.4. Closing .........................................................19
5.5. Period ..........................................................20

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<PAGE> 3

6. CO-SALE RIGHTS...................................... .....................20
6.1. Tag Along .......................................................20
6.2. Certain Legal Requirements ......................................22
6 3 Further Assurances ..............................................22
6.4. Closing .........................................................23
6.5. Excluded Transactions ...........................................23
6.6. Period ..........................................................23

7. REGISTRATION RIGHTS ......................................................24
7.1. Piggyback Registration Rights ...................................24
7.2. Demand Registration Rights ......................................25
7.3. Certain Other Provisions ........................................27
7.4. Indemnification and Contribution ................................28
7.5. Lock-up .........................................................31

8. CERTAIN FUTURE EQUITY FINANCINGS OF THE COMPANY ..........................31
8.1. Right of Participation ..........................................32
8.2. Period ..........................................................35

9. INFORMATION AND INSPECTION RIGHTS ........................................35
9.1. Financial Statements; Information ...............................35
9.2. Availability of Financial and Other Information .................36
9.3. Inspection ......................................................36

10. AFFILIATED TRANSACTIONS .................................................36

11. REMEDIES ................................................................37
11.1 Generally ......................................................37
11.2. Deposit ........................................................37

12. LEGEND ..................................................................38

13. AMENDMENT, ETC ..........................................................38
13.1. No Oral Modifications ..........................................38
13.2. Written Modifications ..........................................38

14. MISCELLANEOUS ...........................................................38
14.1. Authority; Effect ..............................................38
14.2. Notices ........................................................39

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<PAGE> 4

14.3. Binding Effect, etc ........................................... 42
14.4. Descriptive Headings ...........................................42
14.5 Counterparts ...................................................42
14.6. Severability ...................................................42

15. GOVERNING LAW, ARBITRATION ..............................................43
15.1. Governing Law ..................................................43
15.2. Arbitration ....................................................43
15.3. Consent to Jurisdiction ........................................44
15.4. Waiver of Jury Trial ...........................................44
15.5. Reliance .......................................................45

-iv-

<PAGE> 5

STOCKHOLDERS AGREEMENT

This Stockholders Agreement (the "AGREEMENT") is dated as of November 30,
1996, and entered into as of November 29, 1996, by and among:

(i) JHFSC Acquisition Corp., a Delaware corporation (the "COMPANY"),

(ii) Thomas H. Lee Equity Fund III, L.P., a Delaware limited
partnership, Thomas H. Lee Foreign Fund III, L.P., a Delaware
limited partnership, THL-CCI Limited Partnership, a Massachusetts
limited partnership (collectively, the "LEE INITIAL INVESTORS"),
and each of the other Lee Investors from time to time becoming a
party hereto pursuant to the terms hereof,

(iii) SCP Private Equity Partners, L.P., a Delaware limited partnership
(the "SCP Initial Investor"), and each of the other SCP Investors
from time to time becoming a party hereto pursuant to the terms
hereof,

(iv) each of the Employee Investors from time to time party hereto
pursuant to the terms hereof, and

(v) John Hancock Subsidiaries, Inc., a Delaware corporation (the
"SELLER INITIAL INVESTOR"), and each of the other Seller Investors
from time to time becoming a party hereto pursuant to the terms
hereof.

RECITALS

1. On or about the date hereof, the Company will acquire all of the
issued and outstanding capital stock of John Hancock Freedom Securities
Corporation, a Massachusetts corporation ("JHFSC"), pursuant to a Contribution
Agreement dated as of October 4, 1996 (the "CONTRIBUTION AGREEMENT") among the
Company, the Seller Initial Investor, certain Lee Initial Investors and the SCP
Initial Investor.

2. Pursuant to a Stock Subscription Agreement dated as of the date
hereof, as listed on Schedule I hereto, the Lee Initial Investors have agreed to
purchase an aggregate of 4,000,000 shares of Common Stock of the Company, par
value $.01 per share ("COMMON STOCK").

<PAGE> 6

3. Pursuant to a Stock Subscription Agreement dated as of the date
hereof, as listed on Schedule I hereto, the SCP Initial Investor has agreed to
purchase an aggregate of 1,000,000 shares of Common Stock.

4. Pursuant to the Contribution Agreement, the Seller has contributed
100% of the outstanding capital stock of JHFSC in exchange for an aggregate of
394,653.7 shares of Common Stock, representing 4.999% of the fully-diluted
outstanding capital stock of the Company, and the cash consideration specified
in the Contribution Agreement.

5. The Employee Investors have been or will be issued from time to
time (i) shares of Common Stock and (ii) Options to acquire shares of Common
Stock.

6. The Lee Investors, the SCP Investors, the Seller Investors and the
Employee Investors are collectively referred to herein as the "INVESTORS", and
each an "INVESTOR."

7. The parties believe that it is in the best interests of the
Company and the Investors to: (i) provide that certain shares of Common Stock
and Options shall be transferable only upon compliance with the terms hereof;
(ii) provide the Company with certain rights and obligations with respect to the
purchase of shares of Common Stock and Options under certain circumstances;
(iii) provide for certain rights and obligations with respect to the election of
directors of the Company; and (iv) set forth their agreements on certain other
matters.

AGREEMENT

Now therefore, in consideration of the foregoing and the mutual
agreements set forth below, the parties hereto, each intending to be legally
bound, hereby agree as follows:

1. DEFINITIONS. For purposes of this Agreement:

1.1. CERTAIN DEFINITIONS. The following terms shall have the
following meanings:

1.1.1. "AFFILIATE" shall mean, with respect to any specified
Person, any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control
with, the Person specified.

1.1.2. "AFFILIATED BUYER" shall mean any Proposed Buyer which is
(i) any Fund Investor or Affiliated Fund, or any of their respective
Affiliates, other than any Person which first becomes an Affiliate of any
Fund Investor or Affiliated Fund upon the purchase of Securities in the
Sale, or (ii) any Person in which any Fund Investor or Affiliated Fund

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<PAGE> 7

holds any share of stock (or in the case of a Person which is not a
corporation, equivalent class of beneficial interest), other than shares
of stock (or equivalent beneficial interest) to be received in exchange
for Securities pursuant to the Sale.

1.1.3. "AFFILIATED FUND" shall mean any limited partnership or
other Person formed for the purpose of investing in other companies or
businesses and for which THL Equity Advisors III Limited Partnership, a
Massachusetts limited partnership, or SCP Private Equity Management,
L.P., a Delaware limited partnership, or any of their respective
Affiliates, acts as a general partner.

1.1.4. "BOARD" shall mean the Board of Directors of the Company.

1.1.5. "BLOCK TRANSACTION" shall mean any Transfer of Securities
constituting more than 50% of the aggregate Lee Securities held by the
Lee Investors immediately after the closing under the Contribution
Agreement to a single transferee (other than the Company).

1.1.6. "BOOK VALUE" shall mean, as at any date, the book value per
share of Common Stock determined by reference to the audited balance
sheet of the Company as of the most recent fiscal year ended prior to the
date of determination, adjusted appropriately to take account of any
stock splits, stock dividends, conversions or consolidations of stock or
substantially similar reorganizations of the Company's capital stock
since the date of such balance sheet, all in accordance with GAAP.

1.1.7. "COMPETITOR INSTITUTION" shall mean any Person listed on
Schedule 1.1.8 hereto and any Person engaged for the first time
subsequent to the date of this Agreement in a regional brokerage or
investment banking business, which Person is comparable to the entities
listed on Schedule 1.1.8 and which operates in a jurisdiction in which
the Company and its Subsidiaries competes; provided, however, that
neither the Seller Initial Investor nor any of its Affiliates shall be
deemed to be a Competitor Institution so long as such Person has not been
in breach of any non-competition agreement between such Person and the
Company or any of its Subsidiaries.

1.1.8. "EMPLOYEE INVESTOR" shall mean any officer or employee of
the Company or any of its Subsidiaries and any transferee permitted by
Section 3 who, from time to time, acquires Shares or Options and becomes
party to this Agreement by executing and delivering to the Company an
instrument in form satisfactory to the Company pursuant to which such
person agrees to be bound by the terms of this Agreement as an Employee
Investor.

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<PAGE> 8
1.1.9. "EMPLOYEE MAJORITY HOLDERS" shall mean, as of any date,
the holders of a majority of the Employee Securities outstanding on such
date.

1.1.10. "EMPLOYEE SECURITIES" shall mean all Shares originally
issued to (or issued upon conversion of or otherwise with respect to
Shares originally issued to) or held by the Employee Investors, whenever
issued, including without limitation all Shares issued or issuable
pursuant to the exercise of any Options originally issued to or held by
the Employee Investors, whenever issued, and all such Options.

1.1.11. "EXCHANGE ACT" shall mean Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as from time to time in
effect.

1.1.12. "FUND INVESTORS" shall mean, collectively, the Lee
Investors and the SCP Investors.

1.1.13. "FUND SECURITIES" shall mean, collectively, the Lee
Securities and the SCP Securities.

1.1.14. "INITIAL PUBLIC OFFERING" shall mean the first public
offering of shares of Common Stock registered on Form S-1 (or any
successor form) under the Securities Act.

1.1.15. "LEE INVESTORS" shall mean the Lee Initial Investors and
any Affiliated Fund or transferee pursuant to Section 6.5 which, from
time to time, acquires Lee Securities and becomes party to this
Agreement by executing and delivering to the Company an instrument in
form satisfactory to the Company pursuant to which such Person agrees to
be bound by the terms of this Agreement to the same extent as the Lee
Initial Investors.

1.1.16. "LEE MAJORITY HOLDERS" shall mean, as of any date, the
holders of a majority of the Lee Securities outstanding on such date.

1.1.17. "LEE SECURITIES" shall mean all Shares originally issued
to (or issued upon conversion of or otherwise with respect to Shares
originally issued to) or held by the Lee Investors, whenever issued.

1.1.18. "MEMBERS OF THE IMMEDIATE FAMILY" shall mean, with
respect to any individual, each spouse or child of such individual, each
trust created solely for the benefit of one or more of the
aforementioned Persons and each custodian or guardian of any

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<PAGE> 9
property of one or more of the aforementioned Persons in his capacity as
such custodian or guardian.

1.1.19. "OPTIONS" shall mean any options or warrants or other
rights to subscribe for, purchase or otherwise acquire Common Stock,
other than rights to acquire Shares pursuant to this Agreement.

1.1.20. "PERSON" shall mean any individual, partnership,
corporation, company, association, trust, joint venture, unincorporated
organization or entity, or any government, governmental department or
agency or political subdivision thereof.

1.1.21. "REGISTRABLE SECURITIES" shall mean all shares of Common
Stock, and all shares of Common Stock directly or indirectly issued or
issuable with respect to shares of Common Stock by way of stock dividend
or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, in each
case included in the Securities. As to any particular Registrable
Securities, such shares shall cease to be Registrable Securities when
they have been (a) effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them
or (b) distributed to the public through a broker, dealer or market
maker pursuant to Rule 144 or (c) may be distributed to the public
pursuant to Rule 144(k), in each case in compliance with any applicable
provisions of this Agreement.

1.1.22. "RULE 144" shall mean Rule 144, as from time to time in
effect, promulgated by the Securities and Exchange Commission under the
Securities Act (including without limitation clause (k) thereof).

1.1.23. "SCP INVESTOR" shall mean the SCP Initial Investor and
any Affiliated Fund or transferee pursuant to Section 6.5 which, from
time to time, acquires SCP Securities and becomes party to this
Agreement by executing and delivering to the Company an instrument in
form satisfactory to the Company pursuant to which such Person agrees to
be bound by the terms of this Agreement to the same extent as the SCP
Initial Investor.

1.1.24. "SCP MAJORITY HOLDERS" shall mean, as of any date, the
holders of a majority of the SCP Securities outstanding on such date.

1.1.25. "SCP SECURITIES" shall mean all Shares originally issued
to (or issued upon conversion of or otherwise with respect to Shares
originally issued to) or held by the SCP Investors, whenever issued.

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<PAGE> 10
1.1.26. "SECURITIES" shall mean all Shares and all Options
included in the Lee Securities, the SCP Securities, the Employee
Securities or the Seller Securities.

1.1.27. "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, all as from time to time in effect.

1.1.28. "SELLER INVESTOR" shall mean the Seller Initial Investor
and any other Person which, from time to time, acquires Seller
Securities and becomes party to this Agreement by executing and
delivering to the Company an instrument in form satisfactory to the
Company pursuant to which such Person agrees to be bound by the terms of
this Agreement to the same extent as the Seller Initial Investor.

1.1.29. "SELLER MAJORITY HOLDERS" shall mean, as of any date,
the holders of a majority of the Seller Securities outstanding on such
date.

1.1.30. "SELLER SECURITIES" shall mean all Shares originally
issued to (or issued upon conversion, exchange or exercise of, or
otherwise with respect to, Shares originally issued to) the Seller
Investors, whenever issued.

1.1.31. "SENIOR MANAGEMENT" shall mean the President, Chairman
and/or Chief Executive Officer of the Company and the President and/or
Chief Executive Officer of each of JHFSC, Tucker Anthony Incorporated
("Tucker Anthony") and Sutro & Co., Incorporated (" Sutro").

1.1.32. "SHARES" shall mean all shares of Common Stock.

1.1.33. "SUBSIDIARY" shall mean any Person of which the Company
or other specified Person now or hereafter shall at the time own
directly or indirectly through a Subsidiary at least a majority of the
outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally or control the Board of Directors, including
without limitation, in the case of the Company: JHFSC, Tucker Anthony,
Sutro, Freedom Capital Management Corporation ("Freedom Capital") and
their respective Subsidiaries.

1.1.34. "VOTING SHARES" shall mean, with respect to any matter
to be voted upon, all Shares included in the Securities entitled to vote
with respect to such matter.

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<PAGE> 11

1.2. CERTAIN MATTERS OF CONSTRUCTION. In addition to the definitions
referred to as set forth in the Section 1.1:

(a) The words "hereof", "herein", "hereunder" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Section or provision of this Agreement, and reference to a
particular Section of this Agreement shall include all subsections
thereof;

(b) References to a Section, Schedule or Exhibit are to a
Section of, or Schedule or Exhibit to, this Agreement;

(d) The masculine, feminine and neuter genders shall each
include the other; and

(e) Except as otherwise provided herein, any Person who
holds Options shall be deemed to be the holder of the Registrable
Securities obtainable upon exercise of the Options (to the extent that
such Options are then exercisable).

1.3. CROSS REFERENCE TABLE. The following terms defined elsewhere in
this Agreement in the Sections set forth below shall have the respective
meanings therein defined:

Term Definition
---- ----------

"Agreement" Preamble
"Call Employee Investor Group" Section 4
"Call Option" Section 4
"Common Stock" Recitals
"Company" Preamble
"Company Note" Section 4
"Designated Employee" Section 3.1.1
"Employee Initiating Party" Section 3.1.1
"Employee Designated Director" Section 2.1
"First Refusal Period" Section 3.1.1
"First Refusal Securities" Section 3.1.1
"General Representations" Section 5.3

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<PAGE> 12

"Individual Representations" Section 5.3
"Individual Underwriting Agreement Representations" Section 7.1
"Initiating Holders" Section 7.2
"Investor" Recitals
"Issuance" Section 8.1
"Lee Designated Directors" Section 2.1
"Lee Initial Investors" Preamble
"Majority Initiating Holders" Section 7.2
"Non-Complying Investor" Section 7
"Non-Employee Initiating Party" Section 3.2.1
"Offered Securities" Section 3.2.1
"Offer Proposal" Section 3.2.1
"Offer Period" Section 3.2.1
"Participating Buyer" Section 8.1
"Participating Seller" Section 5.1; 6.1
"Preemption Notice" Section 8.1
"Preemptive Portion" Section 8.1
"Preemptive Purchaser Offerees" Section 8.1
"Proposed Buyer" Section 5; 6.1; 8.1
"Proposed Fund Seller" Section 6.1
"Proposed Investor Seller" Section 5; 6.1
"Public Offering" Section 7.1
"Requesting Majority Holders" Section 5.5
"Sale" Section 5; 6.1
"Sale Percentage" Section 5; 6.1
"SCP Designated Directors" Section 2.1
"SCP Initial Investor" Section 2.1
"Seller Initial Investor" Preamble
"Subject Securities" Section 8.1
"Tag Along Notice" Section 6.1
"Tag Along Offerees" Section 6.1
"Take Along Notice" Section 5.1
"Transfer" Section 3
"Transfer Notice" Section 3.1.1

2. VOTING AGREEMENT.

-8-
<PAGE> 13

2.1. ELECTION OF DIRECTORS. Each holder of Voting Shares (other than
a holder of Seller Securities) hereby agrees to cast all votes to which such
holder is entitled in respect of the Voting Shares now or hereafter owned by
such holder, whether at any annual or special meeting of stockholders, by
written consent or otherwise, to:

(i) fix the number of directors on the Board at a number equal to
eight (8), such that the Board shall consist of an equal number
of directors designated by the SCP Majority Holders and the
Employee Majority Holders on the one hand, and the Lee Majority
Holders on the other hand;

(ii) elect as a director of the Company one individual (the "SCP
DESIGNATED DIRECTOR") that may be designated by the SCP Majority
Holders for election;

(iii) elect as directors of the Company three individuals, which
individuals shall initially consist of such individuals who
shall be the Chairman of JHFSC, the President of Tucker Anthony
and the President of Sutro (the "EMPLOYEE DESIGNATED
DIRECTORS"); and

(iv) elect as the remaining four members of the Board such
individuals as may be designated by the Lee Majority Holders for
election (the "LEE DESIGNATED DIRECTORS").

2.2. REMOVAL: VETO RIGHTS. No Employee Designated Director, SCP
Designated Director or Lee Designated Director may be removed without the
consent of a majority of the holders of Securities which designated such
Director, except for cause in accordance with the by-laws of the Company, as
from time to time in effect; PROVIDED, HOWEVER, that the Lee Designated
Directors (i) shall have the unilateral right, with or without cause, to
terminate the employment of any member of Senior Management, and the right to
remove with or without cause any Employee Designated Director in connection the
termination of the employment of any such Employee Designated Director, and (ii)
shall have the unilateral right to direct the appointment of any Person to a
Senior Management position. The Lee Investors hereby acknowledge and agree that
prior to taking any action set forth in this Section 2.2 (i) and (ii), they will
cause the Lee Designated Directors to notify and discuss such action with the
other members of the Board, it being acknowledged and agreed that the consent of
the SCP Designated Director and the Employee Designated Directors shall not be
required for the taking of any such action, nor shall any action be invalidated
based upon the failure of such Lee Designated Directors to notify and discuss
such actions with the other Directors.

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<PAGE> 14

2.3. SUCCESSORS. In the event that any SCP Designated Director shall
cease to serve for any reason, then the SCP Majority Holders shall have the
right to designate a successor SCP Designated Director, and in the event that
any Lee Designated Director shall cease to serve for any reason, then the Lee
Majority Holders shall have the right to designate a successor Lee Designated
Director. In the event that any Employee Designated Director shall cease to
serve for any reason, then the following shall apply: (i) at such time as any
one or more of the Employee Designated Directors shall cease to serve as an
Employee Designated Director and the initial Chairman of JHFSC shall continue to
serve as an Employee Designated Director, then the initial Chairman of JHFSC
shall have the right to designate one or more successor Employee Designated
Directors (which individual or individuals shall not have been terminated
pursuant to Section 2.2) from among those individuals who have held positions at
least equal to a senior vice president of the Company, JHFSC, Tucker Anthony,
Sutro or Freedom Capital for the immediately preceding year, and (ii) at such
time as the initial Chairman of JHFSC shall cease to serve as an Employee
Designated Director and the other initial Employee Designated Directors shall
continue to serve as Employee Designated Directors, then the individual who is
chosen by the Lee Designated Directors as the successor Chief Executive Officer
of JHFSC shall become the successor Employee Designated Director, and (iii) at
such time as the initial Chairman of JHFSC and one or more of the other initial
Employee Designated Directors shall cease to serve as Employee Designated
Directors, then the individual who is elected as the successor Chief Executive
Officer of JHFSC shall replace the initial Chairman as one Employee Designated
Director and the Employee Majority Holders shall have the right to nominate the
other successor Employee Designated Directors from among those individuals who
hold positions at least equal to a senior vice president of the Company, JHFSC,
Tucker Anthony, Sutro or Freedom Capital. Each holder of Voting Shares (other
than a holder of Seller Securities) shall, upon receipt of notice identifying
such nominee, promptly take all action necessary to cause the appointment of
such nominee to the Board pursuant to the Company's By-laws and Certificate of
Incorporation, each as amended and in effect from time to time.

2.4. COMMITTEES. Each committee of the Board shall be composed so
that the representation thereof of Lee Designated Directors, SCP Designated
Director and Employee Designated Directors shall be in the same proportion, as
nearly as may be, as the representation of such directors on the whole Board
unless otherwise agreed to by the Board. Notwithstanding the foregoing, the
Compensation Committee of the Board will include the Chief Executive Officer of
the Company, provided that such Chief Executive Officer shall not vote with
respect any matter regarding his own compensation, which Compensation Committee
shall be empowered, among other things, to select Designated Employees pursuant
to Sections 3.1 and 4 of this Agreement.

2.5. CERTAIN LIQUIDITY TRANSACTIONS. Each holder of Securities agrees
to cast all votes to which such holder is entitled in respect of the Voting
Shares now or hereafter owned by such

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<PAGE> 15

holder, and to cause any directors designated by such holder of Securities
pursuant to Section 2.1 or 2.3 to vote, in the manner specified by the Lee
Majority Holders or Lee Designated Directors, as the case may be, with respect
to: (i) any offering of securities of the Company; (ii) any sale of a
substantial portion of the assets of the Company or any of its Subsidiaries;
(iii) any merger or consolidation involving the Company or any of its
Subsidiaries; and (iv) any transaction to which Section 5 or 6 applies. The Lee
Investors hereby acknowledge and agree that prior to taking any action set forth
in this Section 2.5, they will cause the Lee Designated Directors to notify and
discuss such action with the other members of the Board, it being acknowledged
and agreed that the consent of the SCP Designated Director and the Employee
Designated Directors shall not be required for the taking of any such action,
nor shall any action be invalidated based upon the failure of such Lee
Designated Directors to notify and discuss such actions with the other
Directors.

2.6. PERIOD. The foregoing provisions of this Section 2 shall expire
on the earliest of: (i) the tenth anniversary of the date hereof; (ii) the date
of termination of this Agreement; (iii) the first date on which the Lee
Investors own less than thirty-three and one-third percent (33 1/3%) of the
aggregate Lee Securities held by the Lee Investors immediately after the closing
under the Contribution Agreement; or (iv) upon the closing of the Initial Public
Offering; PROVIDED, HOWEVER, that in the case of clause (iii) above, the holders
of Lee Securities, SCP Securities and Employee Securities shall continue to have
the right to designate a number of Directors on the Board which is proportional
to the aggregate percentage of Securities held by such Investors to the total
number of Securities then outstanding (which in the case of the holders of Lee
Securities, shall not in any event be less than two such Directors); and
PROVIDED, FURTHER, that if the holders of SCP Securities shall Transfer all of
such Securities to any holder of Lee Securities, then the Lee Majority Holders
shall have the right to designate one additional director on behalf of the
holders of Lee Securities, and if the holders of SCP Securities shall Transfer
all of such Securities to any holders of Employee Securities or to any
Designated Employees, then the Employee Majority Holders shall have the right to
designate one additional director on behalf of the holders of Employee
Securities, in each case which additional director shall replace the SCP
Designated Director.

3. CERTAIN TRANSFER RIGHTS AND RESTRICTIONS. No holder of any
Security shall sell, pledge, assign, grant a participation interest in, encumber
or otherwise transfer or dispose of any of such Securities to any other Person,
whether directly, indirectly, voluntarily, involuntarily, by operation of law,
pursuant to judicial process or otherwise (a "TRANSFER"), except as permitted by
this Section 3. Any attempted Transfer of Securities not permitted by this
Section 3 shall be null and void, and the Company shall not in any way give
effect to any such impermissible Transfer. Notwithstanding the foregoing, this
Section 3 shall not prohibit any Transfers made on the terms and subject to the
conditions of Sections 4, 5, 6 and 7 or to the

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<PAGE> 16

public through a broker, dealer or market maker pursuant to Rule 144 after the
Initial Public Offering. Prior to any registration by the Company under the
Exchange Act, no Investor shall Transfer any Securities if the result of such
Transfer shall be to increase the total number of holders of the Company's
Common Stock then outstanding without the Company's prior consent, which consent
may be withheld by the Company if it reasonably believes that withholding such
consent will reduce the likelihood that the Company would be required to
register its Common Stock under the Exchange Act. Notwithstanding any provision
herein contained to the contrary, no holder of Employee Securities shall
Transfer any such Securities to a Competitor Institution without the prior
written consent of the Company.

3.1. TRANSFERS OF EMPLOYEE SECURITIES. No holder of any Employee
Security shall Transfer any Employee Security to any Person except as provided
by this Section 3.1.

3.1.1. RIGHTS OF FIRST REFUSAL. If any Employee Investor (the
"EMPLOYEE INITIATING PARTY") desires to Transfer Securities to any
Person other than the Company, prior to Such Transfer, such Employee
Initiating Party shall give notice of such offer to the Company. Such
notice (the "TRANSFER NOTICE") shall state the terms and conditions of
such offer, including the name of the prospective purchaser, the
proposed purchase price per share of such Securities, payment terms, the
type of disposition and the number of shares of such Securities to be
transferred (the "FIRST REFUSAL SECURITIES") and any other material
terms and conditions of the proposed Transfer. For a period of
forty-five (45) days following the receipt of the Transfer Notice (the
"FIRST REFUSAL PERIOD"), the Company shall have the right to elect to
purchase any First Refusal Securities specified in the Transfer Notice
at the price and upon the terms set forth in the Transfer Notice. In the
event that the Company elects to purchase part or all of the First
Refusal Securities, it shall give written notice, during the First
Refusal Period, to the Employee Initiating Party of its election. In the
event that the Company elects to purchase the First Refusal Securities,
the Company shall purchase all such First Refusal Securities for such
price, within ninety (90) days after the date the Company receives the
Transfer Notice. The Company may elect to assign its right to purchase
any First Refusal Securities to an eligible employee designated by the
Compensation Committee of the Board (a "DESIGNATED EMPLOYEE").

Notwithstanding anything to the contrary in this Section 3.1.1,
in the event that all of the First Refusal Securities specified in the
Transfer Notice are not purchased by the Company or the Designated
Employee, as the case may be within such ninety (90) day period, then
neither the Company nor the Designated Employee shall have any right to
purchase any such First Refusal Securities, and the Employee Initiating
Party may, within the ninety (90) day period following the expiration of
the First Refusal Period, subject to compliance with Sections 5 and 6,
sell the First Refusal Securities specified in the Transfer

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<PAGE> 17
Notice to the proposed transferee upon the price and terms specified in
the Transfer Notice; PROVIDED, HOWEVER, that if such First Refusal
Securities are not sold within the ninety (90) day period, such First
Refusal Securities shall again become subject to all the restrictions
set forth in this Section 3.1. Any Transfer of shares of First Refusal
Securities consummated pursuant to this Section 3.1 shall remain subject
to the provisions of this Agreement, and the intended transferee
pursuant to this Section shall, as a condition to the effectiveness of
such Transfer, execute and deliver to the Company a counterpart of this
Agreement, which shall evidence such transferee's agreement that the
shares intended to be transferred shall continue to be subject to this
Agreement to the same extent as the Investor who transferred such First
Refusal Securities.

3.1.2. INAPPLICABLE TRANSFERS. The provisions of Section 3.1.1
shall not apply to (i) a Transfer of all of such holder's Employee
Securities to a Member of the Immediate Family of such holder who is not
employed by a Competitor Institution, (ii) a Transfer of all of such
holder's Employee Securities by will or other instrument taking effect
at death or by applicable laws of descent and distribution to such
holder's estate, executors, administrators and personal representations,
and then to such holder's heirs, legatees distributions (provided that
such Transfer shall only be effective as to one such transferee), (iii)
a Transfer of any portion of such holder's Employee Securities to the
Company or to a Designated Employee in compliance with Section 3.3, or
(iv) a pledge of any portion of such holder's Employee Securities to a
bank or other financial institution (other than a Competitor
Institution) to secure any bona fide recourse debt of such holder to
such bank or financial institution for borrowed money in connection with
the purchase of Common Stock; PROVIDED, HOWEVER, that no such Transfer
(other than to the Company) pursuant to this Section 3.1.2 shall be
effective until the recipient has delivered to the Company a written
acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that the Employee Securities to be received
by such recipient are subject to all of the provisions of this Agreement
and that such recipient is bound hereby and a party hereto to the same
extent as an Employee Investor, and in the case of any pledgee pursuant
to clause (iv) above, an acknowledgment that the Employee Securities
subject to such pledge shall remain (both before and after foreclosure,
if any) subject to all of the terms and provisions hereof as Employee
Securities; and PROVIDED, FURTHER, that any transfer of an Option shall
be subject to all of the terms and conditions of such Option, or the
plan under which such Option was issued, in addition to the terms and
conditions hereof.

3.2. TRANSFERS BY HOLDERS OF FUND SECURITIES AND SELLER SECURITIES.
No holder of Lee Securities, SCP Securities or Seller Securities shall Transfer
any Securities held by such Investor to any Person except as provided by this
Section 3.2.

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<PAGE> 18

3.2.1. RIGHTS OF FIRST OFFER. If any holder of Lee Securities,
SCP Securities or Seller Securities (each a "NON-EMPLOYEE INITIATING
PARTY") desires to Transfer any of the Securities held by such party
(the "OFFERED SECURITIES") to any Person other than the Company, then
the Non-Employee Initiating Party shall give written notice to the
Company to the effect that such Non-Employee Initiating Party would like
to Transfer such Securities, indicating the number and type of
securities proposed to be Transferred. Within thirty (30) days following
receipt of such written notice (the "OFFER PERIOD"), the Company may
elect to submit a written proposal (an "OFFER PROPOSAL") to purchase no
less than all of the Offered Securities at a price and on terms
specified in such Offer Proposal. If the Company does not furnish a
written proposal within the Offer Period, then, subject to compliance
with Sections 5 and 6, such Non-Employee Initiating Party may sell the
Offered Securities within one hundred eighty (180) days following the
expiration of the Offer Period to any other Person. If the Company
delivers the Offer Proposal within the Offer Period, the Non-Employee
Initiating Party must accept or reject such Offer Proposal within thirty
(30) days following receipt of such Offer Proposal. If the Non-Employee
Initiating Party rejects the Offer Proposal, then, subject to compliance
with Sections 5 and 6, such Non-Employee Initiating Party may sell to
any other Person the Offered Securities within one hundred eighty (180)
days following the date of rejection of the Offer Proposal at a price
which is higher than the price specified in the Offer Notice. If such
Offered Securities are subsequently proposed to be Transferred to
another Person at a price which is equal to or lower than the price
specified in the Offer Proposal, then such Offered Securities shall be
re-offered by the Non-Employee Initiating Party to the Company in
accordance with the terms of this Section 3.2. For purposes of this
Section 3.2, if the price contained in any Offer Proposal or any
proposal of any other Person shall not be payable solely in cash, then
"price" shall be determined in the reasonable judgment of the
Non-Employee Initiating Party upon review of the total amount of cash,
securities, debt instruments or other forms of consideration comprising
the purchase price for the Offered Securities, if any.

Notwithstanding the foregoing, (i) no holder of Seller
Securities shall Transfer all or any portion of such Seller Securities
to a Competitor Institution (unless pursuant to a Sale of all Securities
under Sections 5 and 6), and (ii) no Transfer to any Person other than
the Company pursuant to this Section 3.2 shall be effective until the
recipient has delivered to the Company a written acknowledgment and
agreement in form and substance reasonably satisfactory to the Company
that the Offered Securities to be received by such recipient are subject
to all of the provisions of this Agreement and that such recipient is
bound hereby and a party hereto to the same extent as the Non-Employee
Initiating Party, except that notwithstanding Section 9, transferees of
Seller Securities shall not have any inspection rights and shall have
only those information rights entitling them to receive

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<PAGE> 19

annual and quarterly financial statements of the Company and its
Subsidiaries required to be furnished under such Section.

3.2.2. INAPPLICABLE TRANSFERS. The provisions of Section 3.2.1
shall not be applicable to (i) a Transfer by a holder of Fund Securities
to a Fund Investor or an Affiliated Fund or to any trust established for
the benefit of partners of a Fund Investor or an Affiliated Fund or pro
rata to the partners of a Fund Investor or an Affiliated Fund, provided
that prior to any registration by the Company under the Exchange Act,
such Transfers in the case of the holders of SCP Securities shall not
result in an aggregate of more than 5 record holders of SCP Securities
at any one time, and in the case of the holders of Lee Securities, shall
not result in an aggregate of more than 5 record holders of Lee
Securities at any one time, (ii) a Transfer of all of such holder's Fund
Securities to a Member of the Immediate Family of such holder who is not
employed by a Competitor Institution, (iii) a Transfer of all of such
holder's Fund Securities by will or other instrument taking effect at
death or by applicable laws of descent and distribution to such holder's
estate, executors, administrators and personal representations, and then
to such holder's heirs, legatees distributions (provided that such
Transfer shall only be effective as to one such transferee), (iv) a
pledge of any portion of such holder's Fund Securities to a bank or
other financial institution (other than a Competitor Institution) to
secure any bona fide recourse debt of such holder to such bank or
financial institution, (v) a Transfer by a holder of Fund Securities to
the Company or a Designated Employee or (vi) a Transfer by a holder of
Seller Securities to any Affiliate thereof; PROVIDED, HOWEVER, that no
such Transfer (other than to the Company) pursuant to this Section 3.2.2
shall be effective until the recipient has delivered to the Company a
written acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that the Securities to be received by such
recipient are subject to all of the provisions of this Agreement and
that such recipient is bound hereby and a party hereto to the same
extent as the applicable Investor, and in the case of any pledgee
pursuant to clause (iv) above, an acknowledgment that the Fund
Securities subject to such pledge shall remain (both before and after
foreclosure, if any) subject to all of the terms and provisions hereof
as the holder of the applicable Fund Securities.

3.3. TRANSFERS OF EMPLOYEE SECURITIES TO THE COMPANY. If any holder
of Employee Securities desires to Transfer any portion of such Investor's
Securities to the Company, such holder may give written notice to the Company of
such proposed Transfer. Upon receipt of any such written notice, the Company may
accept or reject such written proposal to purchase Employee Securities in its
sole discretion, and may assign its right to purchase such Securities to a
Designated Employee. The purchase price of any Securities purchased by the
Company or any

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<PAGE> 20

Designated Employee pursuant to this Section 3.3 shall be at the then Book Value
of such Securities.

3.4. PERIOD. The foregoing provisions of this Section 3 shall terminate
immediately following the closing of the Initial Public Offering.

3.5. LOCK UP. Notwithstanding any provision to the contrary contained
in this Section 3, no Transfer may be made pursuant to this Section 3 except in
compliance with the provisions of Section 7.5 hereof.

4. CALL OPTIONS TO PURCHASE SECURITIES.

4.1. CALL OPTIONS ON EMPLOYEE SECURITIES UPON TERMINATION OF
EMPLOYMENT. Upon any termination of the employment of any Employee Investor who
is employed by the Company or any of its Subsidiaries, the Company shall have
the right to purchase any or all Securities held by such Employee Investor or by
Employee Transferees of such Employee Investor (collectively, the "CALL EMPLOYEE
INVESTOR GROUP"), at the Company's sole option, for cash or, in the event that
the Board of Directors determines in good faith that the Company does not have
sufficient liquidity or is otherwise restricted under its financing agreements
from paying such distribution in cash, for a five year note issued by the
Company, bearing interest at a fixed rate of interest per annum equal to the
applicable federal rate on the date of issuance for notes of that maturity, such
interest to be payable quarterly in arrears, which note shall be prepayable
without premium or penalty, and subordinated to all other funded debt of the
Company and its Subsidiaries on terms reasonably satisfactory to the holders of
such funded debt (each a "COMPANY NOTE", and collectively, the "COMPANY NOTES");
it being understood that all Options not exercisable at the time of such
termination of employment will be terminated pursuant to the option plan
pursuant to which such Option was issued. If the Company elects to exercise its
call right pursuant to this Section 4.1, it shall furnish to the Call Employee
Investor Group written notice within thirty (30) days following such date of
termination of employment, or within thirty (30) days following receipt by the
Company of audited financial statements of the Company for any fiscal year ended
after such date of termination. The purchase price for such Employee Securities
shall be payable in cash or in Company Notes, at a price equal to the Book Value
of such Securities on the date of exercise by the Company of such call right.
Notwithstanding the foregoing, the provisions of this Section 4.1 shall not
apply to any Employee Securities issued upon exercise of a right to purchase
shares of Common Stock granted to any Employee Investor under the Company's
Stock Incentive Plan adopted pursuant to Rule 701 under the Securities Act, the
terms and provisions of which Plan shall govern the call rights of the Company
to repurchase shares issued thereunder.

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<PAGE> 21

4.2. CALL OPTIONS ON SECURITIES PLEDGED TO FINANCIAL INSTITUTION. If
any bank or financial institution to which Securities are pledged pursuant to
Section 3.1.2(iv) forecloses on any such Securities, then the Company, upon
written notice furnished at any time following the Transfer of such Securities
to such bank or financial institution may purchase all or any portion of such
Securities at a price, payable in cash, equal to the then Book Value of such
Securities.

4.3. ASSIGNMENT OF CALL RIGHT. The Company may assign to a Designated
Employee the right to purchase any Securities held by the Call Employee Investor
Group or bank or other financial institution as the case may be, upon the
exercise of any call right pursuant to this Section 4; PROVIDED, HOWEVER, that
the price paid by the Designated Employee shall only be paid in cash.

4.4. CLOSING. The closing of the purchase of any Securities pursuant to
the exercise of the call option shall take place no later than 30 days from the
date the call notice was given by the Company, at the principal office of the
Company or at such other time and location as the parties to such purchase may
mutually determine. At the closing, the Company shall pay to the Call Employee
Investor Group or bank or other financial institution, as the case may be, the
call price for the Securities to be purchased pursuant to the call option in
cash by certified or bank check or by the issuance of a Company Note. At such
time, the Call Employee Investor Group or bank or other financial institution,
as the case may be, shall deliver to the Company the certificate or certificates
representing the Securities so purchased, each duly endorsed for transfer and
with signature guaranteed, free and clear of any liens, with any necessary stock
transfer tax stamps affixed.

4.5. PERIOD. The foregoing provisions of this Section 4 shall terminate
immediately following the closing of the Initial Public Offering.

5. "TAKE ALONG" RIGHTS. Subject to compliance with Section 3, each
holder of Securities hereby agrees, if requested by the Lee Majority Holders, to
Transfer for value (for purposes of this Section 5, a "SALE") all or a portion
of the Securities then owned by such holder to any Person, other than any Person
which is an Affiliate of any holder of Lee Securities (for purposes of this
Section 5, the "PROPOSED BUYER") in the manner and on the terms set forth in
this Section 5 in connection with the Sale by the holders of Lee Securities
(collectively, the "PROPOSED FUND SELLER") pursuant to a transaction (i) in
which the Proposed Fund Seller sells all of the Lee Securities held by them to
the Proposed Buyer or (ii) in which immediately following the consummation of
such transaction, the holders of Securities will retain no more than twenty
percent (20%) of all issued and outstanding shares of Common Stock of the
Company (the "Retained Securities") and the Proposed Fund Seller sells all of
the Lee Securities other than its pro rata share of the Retained Securities in
such transaction.

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<PAGE> 22

5.1. PROCEDURE. If the Lee Majority Holders elect to exercise their
rights under this Section 5, a notice (the "TAKE ALONG NOTICE") shall be
furnished by the Proposed Fund Seller to each holder of Securities (which shall
be furnished to the Compensation Committee of the Board on behalf of each holder
of Employee Securities). The Take Along Notice shall set forth the principal
terms of the proposed Sale insofar as it relates to the Securities, including
the number of Securities to be purchased from the Proposed Fund Seller, the
maximum and minimum purchase price, and the name and address of the Proposed
Buyer. If the Lee Majority Holders consummate the Sale referred to in the Take
Along Notice, each other holder of Securities (each a "PARTICIPATING SELLER")
shall be bound and obligated to Sell all of such Participating Seller's
Securities in the Sale on the same terms and conditions (subject to all of the
provisions of this Agreement), with respect to each Security sold, as the
Proposed Fund Seller shall sell each Lee Security in the Sale, and, in the case
of Options have the obligation to either (i) exercise such Options (if then
exercisable) and participate in such Sale as holders of Common Stock issuable
upon such exercise, or (ii) upon the consummation of the Sale, receive in
exchange for such Options (to the extent exercisable at the time of such Sale)
consideration equal to the amount (if greater than zero) determined by
multiplying (1) the same amount of consideration per Share received by the
holders of the Common Stock in connection with the Sale less the exercise price
per share of such Option by (2) the number of shares of Common Stock issuable
upon exercise of such Option. If at the end of the one year anniversary of the
date of the effectiveness of the Take Along Notice the Proposed Fund Seller has
not completed the Sale, each Participating Seller shall be released from his
obligation under the Take Along Notice, the Take Along Notice shall be null and
void, and it shall be necessary for a separate Take Along Notice to have been
furnished and the terms and provisions of this Section 5 separately complied
with, in order to consummate such Sale pursuant to this Section 5, unless the
failure to complete such Sale resulted from any failure by any Participating
Seller to comply in any material respect with the terms of this Section 5.

5.2. CERTAIN LEGAL REQUIREMENTS. In the event the consideration to be
paid in exchange for Securities in the proposed Sale pursuant to Section 5.1
includes any securities and the receipt thereof by any Investor as a
Participating Seller would require under applicable law (i) the registration or
qualification of such securities or of any person as a broker or dealer or agent
with respect to such securities or (ii) the provision to any participant in the
Sale of any information other than such information as would be required under
Regulation D of the Securities and Exchange Commission or similar rule then in
effect in an offering made pursuant to said Regulation D solely to "accredited
investors" as defined in said Regulation D, the Proposed Fund Seller shall be
obligated to use all commercially reasonable efforts to cause such requirements
to have been complied with to the extent necessary to permit such Participating
Seller to receive such securities. Each Participating Seller agrees to take such
actions as the Proposed Fund Seller shall reasonably request in order to permit
such requirements to have been complied with.

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<PAGE> 23

5.3. FURTHER ASSURANCES. Each Participating Seller, and each Investor
to whom the Securities held by such Participating Seller were originally issued,
shall, whether in his capacity as a Participating Seller, stockholder, officer
or director of the Company, or otherwise, take or cause to be taken all such
actions (subject to all the provisions of this Agreement) as may be reasonably
requested in order expeditiously to consummate each Sale pursuant to Section
5.1. Each such Participating Seller or Investor agrees to execute and deliver
such agreements that are reasonably requested in connection with the Sale so
that the Participating Seller to be subject to the same terms and conditions
(subject to all of the provisions of this Agreement) with respect to each
Security sold as the Proposed Fund Seller shall Sell each Fund Security in the
Sale, including, without limitation, an agreement by such Participating Seller
(i) to be subject to such purchase price escrow, indemnity or adjustment
provisions as may apply to Investors generally, (ii) to be liable in respect of
any individual representations or warranties to be given by selling Investors in
the Sale regarding such matters as legal capacity or due organization of such
Participating Seller, authority to participate in the Sale, compliance by such
selling Investor with laws and agreements applicable to it, and ownership (free
and clear of liens, charges, encumbrances and adverse claims) of Securities to
be sold by such Participating Seller ("INDIVIDUAL REPRESENTATIONS") (insofar as
such Individual Representations relate to such Participating Seller) and (iii)
except with respect to the Seller Investors, to make any general representations
or warranties to be given by selling Investors in the Sale regarding such
matters as the liabilities (contingent and otherwise), assets, agreements and
business of the Company and its Subsidiaries, the compliance of the Sale with
laws and contracts, and the adequacy of disclosure ("GENERAL REPRESENTATIONS");
PROVIDED, HOWEVER, that except with respect to Individual Representations, the
aggregate amount of the liability of each Participating Seller in the Sale in
respect of representations, warranties and indemnities shall not exceed the
lesser of (i) such Participating Seller's pro rata portion of any such
liability, in accordance with such Participating Seller's portion of the total
number of Securities included in the Sale or (ii) the net proceeds received by
such Participating Seller from the Sale; and PROVIDED, FURTHER, that no
Participating Seller who is an Employee Investor, SCP Investor or Seller
Investor shall be required as a condition of such Sale to be bound by any
non-competition, non-solicitation, no-hire or similar covenant applicable to the
holders of Lee Securities, provided that the foregoing shall not be deemed to
limit or otherwise affect the assignability of the non-competition provisions of
the Contribution Agreement which are applicable to the Seller Initial Investor.

5.4. CLOSING. The closing of a Sale pursuant to Section 5.1 shall take
place at such time and place as the Lee Majority Holders shall specify by notice
to each Participating Seller. At the closing of any Sale under this Section 5,
each Participating Seller shall deliver the certificates evidencing the
Securities to be sold by such Participating Seller, duly endorsed, or with stock
powers or other appropriate instruments duly endorsed, for transfer with
signature guaranteed,

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<PAGE> 24

free and clear of any liens, encumbrances or adverse claims, with any stock
transfer tax stamps affixed, against delivery of the applicable consideration.

5.5. PERIOD. The foregoing provisions of this Section 5 shall terminate
immediately following the closing of the Initial Public Offering.

6. CO-SALE RIGHTS.

6.1. TAG ALONG. Subject to compliance with Section 3, no holder or
holders of any Securities (for purposes of this Section 6, collectively, the
"PROPOSED SELLER") shall Transfer (for purposes of this Section 6, a "SALE") any
of such Investor's Securities to any other Person (the "PROPOSED BUYER") except
in the manner and on the terms set forth in this Section 6, and attempted
Transfers in violation of this Section 6 shall be null and void.

6.1.1. OFFER. A written notice (the "TAG ALONG NOTICE") shall be
furnished by the Proposed Seller to each holder of Securities (the "TAG
ALONG OFFEREES") at least five (5) business days prior to a Transfer. The
Tag Along Notice shall include:

(a) The principal terms of the proposed Sale insofar as
it relates to the Securities, including the number of Securities
to be purchased from the Proposed Seller, the percentage on a
fully-diluted basis of the total number of Securities held by all
holders of Securities which such number of Securities constitutes
(for purposes of this Section 6, the "SALE PERCENTAGE"), the
maximum and minimum purchase price (which maximum purchase price
shall not exceed the minimum price by more than 110%), the name
and address of the Proposed Buyer, and (if the Proposed Buyer is
not subject to the periodic reporting requirements of the Exchange
Act) the name of each director of the Proposed Buyer and of each
Person which is the beneficial owner of more than five percent
(5%) of the Common Stock of the Proposed Buyer; and

(b) An offer by the Proposed Seller to include, at the
option of each Tag Along Offeree, in the Sale to the Proposed
Buyer such number of Securities (not in any event to exceed the
Sale Percentage of the total number of Securities held by such Tag
Along Offeree) owned by each Tag Along Offeree determined in
accordance with Section 6.1.2 hereof, on the same terms and
conditions (subject to all of the provisions of this Agreement),
with respect to each Security Sold, as the Proposed Seller shall
Sell each of its Securities.

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<PAGE> 25

6.1.2. EXERCISE. Each Tag Along Offeree desiring to accept the
offer contained in the Tag Along Notice shall send a written commitment
to the Proposed Seller specifying the number of Securities (not in any
event to exceed the Sale Percentage of the total number of Securities
held by such Tag Along Offeree) which such Tag Along Offeree desires to
have included in the Sale within five (5) business days after the
effectiveness of the Tag Along Notice (each a "PARTICIPATING SELLER").
Each Tag Along Offeree who has not so accepted such offer shall be deemed
to have waived all of his or her rights with respect to the Sale, and the
Proposed Seller and the Participating Sellers shall thereafter be free to
Sell to the Proposed Buyer, at a price no greater than 110% of the
maximum price set forth in the Tag Along Notice and otherwise on terms
not more favorable in any material respect to them than those set forth
in the Tag Along Notice, without any further obligation to such
non-accepting Tag Along Offerees. If, prior to consummation, the terms of
such proposed Sale shall change with the result that the price shall be
greater than 110% of the maximum price set forth in the Tag Along Notice
or the other terms shall be more favorable in any material respect than
as set forth in the Tag Along Notice, it shall be necessary for a
separate Tag Along Notice to have been furnished, and the terms and
provisions of this Section 6 separately complied with, in order to
consummate such proposed Sale pursuant to this Section 6.

The acceptance of each Participating Seller shall be irrevocable
except as hereinafter provided, and each such Participating Seller shall
be bound and obligated to Sell in the Sale such number of Securities as
such Participating Seller shall have specified in such Participating
Seller's written commitment on the same terms and conditions (subject to
all of the provisions of this Agreement), with respect to each Security
Sold, as the Proposed Seller shall sell each Security in the Sale, and,
in the case of Options, have the opportunity to either (i) exercise such
Options (if then exercisable) and participate in such Sale as holders of
Common Stock issuable upon such exercise or (ii) upon the consummation of
the Sale, receive in exchange for such Options (to the extent exercisable
at the time of such Sale) consideration equal to the amount (if greater
than zero) determined by multiplying (1) the same amount of consideration
per Share received by the holders of the Common Stock in connection with
the Sale less the exercise price per share of such Option by (2) the
number of shares of Common Stock issuable upon exercise of such Option.
In the event the Proposed Seller shall be unable (otherwise than by
reason of the circumstances described in Section 6.2) to obtain the
inclusion in the Sale of all Securities which the Proposed Seller and
each Participating Seller desires to have included in the Sale (as
evidenced in the case of the Proposed Seller by the Tag Along Notice and
in the case of each Participating Seller by such Participating Seller's
written commitment), the number of Securities to be sold in the Sale by
the Proposed Seller and each Participating Seller shall be reduced on a
pro rata basis according to the proportion which

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<PAGE> 26

the number of Securities which each such Seller desires to have included
in the Sale bears to the total number of Securities desired by all such
Sellers to have included in the Sale.

If at the end of the one hundred eightieth (180th) day following
the date of the effectiveness of the Tag Along Notice the Proposed Seller
has not completed the Sale as provided in the foregoing provisions of
this Section 6.1, each Participating Seller shall be released from his
obligations under his written commitment, the Tag Along Notice shall be
null and void, and it shall be necessary for a separate Tag Along Notice
to have been furnished, and the terms and provisions of this Section 6
separately complied with, in order to consummate such Sale pursuant to
this Section 6, unless the failure to complete such Sale resulted from
any failure by any Tag Along Offeree to comply in any material respect
with the terms of this Section 6.

6.2. CERTAIN LEGAL REQUIREMENTS. In the event the consideration to be
paid in exchange for Securities in the proposed Sale pursuant to Section 6.1
includes any securities and the receipt thereof by any Investor as a
Participating Seller would require under applicable law (i) the registration or
qualification of such securities or of any person as a broker or dealer or agent
with respect to such securities or (ii) the provision to any participant in the
Sale of any information other than such information as would be required under
Regulation D of the Securities and Exchange Commission or similar rule then in
effect in an offering made pursuant to said Regulation D solely to "accredited
investors" as defined in said Regulation D, the Proposed Seller shall be
obligated to use all commercially reasonable efforts to cause such requirements
to have been complied with to the extent necessary to permit such Participating
Seller to receive such securities. Each Participating Seller agrees to take such
actions as the Proposed Seller shall reasonably request in order to permit such
requirements to have been complied with.

6.3. FURTHER ASSURANCES. Each Participating Seller, and each Investor
to whom the Securities held by such Participating Seller were originally issued,
shall, whether in his capacity as a Participating Seller, stockholder, officer
or director of the Company, or otherwise, take or cause to be taken all such
actions (subject to all the provisions of this Agreement) as may be reasonably
requested in order expeditiously to consummate each Sale pursuant to Section
6.1. Each such Participating Seller or Investor agrees to execute and deliver
such agreements as may be necessary for the Participating Seller to be subject
to the same terms and conditions (subject to all of the provisions of this
Agreement) with respect to each Security sold as the Proposed Seller shall Sell
each Security in the Sale, including, without limitation, an agreement by such
Participating Seller (i) to be subject to such purchase price escrow, indemnity
or adjustment provisions as may apply to Investors generally, (ii) to be liable
in respect of any Individual Representations to be given by selling Investors in
the Sale (insofar as such Individual Representations relate to such
Participating Seller) and (iii) except with respect to the Seller

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<PAGE> 27

Investors, to make any General Representations to be given by selling Investors
in the Sale; PROVIDED, HOWEVER, that except with respect to Individual
Representations, the aggregate amount of the liability of each Participating
Seller in respect of representations, warranties and indemnities shall not
exceed the lesser of (i) such Participating Seller's pro rata portion of any
such liability, in accordance with such Participating Seller's portion of the
total number of Securities included in the Sale or (ii) the net proceeds
received by such Participating Seller from the Sale; and PROVIDED, FURTHER, that
no Participating Seller who is an Employee Investor, SCP Investor or Seller
Investor shall be required as a condition of such Sale to be bound by any
non-competition, non-solicitation, no-hire or similar covenant applicable to the
holders of Lee Securities, provided that the foregoing shall not be deemed to
limit or otherwise affect the assignability of the non-competition provisions of
the Contribution Agreement which are applicable to the Seller Initial Investor.

6.4. CLOSING. The closing of a Sale pursuant to Section 6.1 shall take
place at such time and place as the Proposed Seller shall specify by notice to
each Participating Seller. At the closing of any Sale under this Section 6,
each Participating Seller shall deliver the certificates evidencing the
Securities to be sold by such Participating Seller, duly endorsed, or with stock
powers or other appropriate instruments duly endorsed, for transfer with
signature guaranteed, free and clear of any liens, encumbrances or adverse
claims, with any stock transfer tax stamps affixed, against delivery of the
applicable consideration.

6.5. EXCLUDED TRANSACTIONS. Notwithstanding any provisions of this
Section 6 to the contrary and subject to the provisions of Section 7 below, the
preceding provisions of this Section 6 shall not restrict any Transfer pursuant
to the provisions of Section 5 or 7 of this Agreement; and no holder of
Securities shall have pursuant to the provisions of this Section 6 any right of
participation or otherwise with respect to (i) any Transfer of Securities
permitted by Sections 3.1.2, 3.2.2 and 3.3, (ii) any Transfer of Seller
Securities, or (iii) any Transfers of Securities in connection with a Public
Offering or under Rule 144. Notwithstanding the provisions of the immediately
preceding sentence, no Transfer of Securities (other than to the Company) shall
be effective until the recipient has delivered to the Company a written
acknowledgment and agreement in form and substance reasonably satisfactory to
the Company that all Securities to be received by such recipient are subject to
all of the provisions of this Agreement and that such recipient is bound hereby
and a party hereto to the same extent as the applicable Investor effecting such
Transfer.

6.6. PERIOD. The foregoing provisions of this Section 6 shall terminate
immediately following the closing of the Initial Public Offering, except in the
case of any Block Transaction.

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<PAGE> 28

7. REGISTRATION RIGHTS. The Company will perform and comply, and
cause each of its Subsidiaries to perform and comply, with such of following
provisions as are applicable to it. Each holder of Securities will perform and
comply with such of the following provisions as are applicable to such holder.

7.1. PIGGYBACK REGISTRATION RIGHTS.

7.1.1. ELECTION. Whenever the Company proposes to register on Form
S-l, S-2 or S-3 (or any successor form) any shares of Common Stock for
its own or others' account under the Securities Act for a public offering
(each a "PUBLIC OFFERING"), the Company shall furnish each holder of
Registrable Securities prompt notice of its intent to do so. Upon the
request of any such holder given by notice to the Company within twenty
(20) days after the effectiveness of such notice from the Company, the
Company will use its reasonable best efforts to cause to be included in
such registration all of the Registrable Securities which such holder
requests.

7.1.2. FURTHER ASSURANCES. Holders of Registrable Securities
participating in any Public Offering shall take all such actions and
execute all such documents and instruments that are reasonably requested
by the Company to effect the sale of their Registrable Securities in such
Public Offering, including without limitation being parties to the
underwriting agreement entered into by the Company and any other selling
shareholders in connection therewith and being liable in respect of the
representations and warranties being made by each selling shareholder,
and any indemnification agreements and "lock-up" agreements made by each
selling shareholder for the benefit of the underwriters in such
underwriting agreement.

7.1.3. EXPENSES. The Company shall pay all expenses of the holders
of Registrable Securities participating in any Public Offering pursuant
to this Section 7.1, other than (i) underwriting discounts and
commissions, if any, (ii) applicable transfer taxes, if any, and (iii)
fees and charges of any attorneys or other advisors (other than attorneys
and advisors retained by the Company to advise it in connection with such
Public Offering and one counsel retained to advise all holders of
Registrable Securities in connection with such Public Offering) retained
by any such holders.

7.1.4. EXCLUDED TRANSACTIONS. Notwithstanding the preceding
provisions of this Section 7.1, no holder of Registrable Securities shall
have any right of participation or otherwise with respect to the
following Public Offerings:

(a) Any Public Offering relating primarily to employee
benefit plans, or

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<PAGE> 29

(b) Any Public Offering the proceeds of which are used
principally to finance the acquisition after the date hereof by
the Company or any of its Subsidiaries of any acquired business or
any Public Offering constituting an exchange of securities for
securities of any such acquired business.

7.2. DEMAND REGISTRATION RIGHTS.

7.2.1. REGISTRATION ON REQUEST OF HOLDERS OF FUND SECURITIES. The
Lee Majority Holders (as to such registration, the "INITIATING HOLDERS")
may, by notice to the Company specifying the intended method or methods
of disposition, request that the Company effect the registration under
the Securities Act of all or a specified part of the Registrable
Securities held by such Initiating Holders. Promptly after receipt of
such notice, the Company will give notice of such requested registration
to all other holders of Registrable Securities. The Company will then use
its reasonable best efforts to effect the registration under the
Securities Act of the Registrable Securities which the Company has been
requested to register by such Initiating Holders, and, subject to all of
the provisions of this Section 7, all other Registrable Securities which
the Company has been requested to register pursuant to Section 7.1.1 by
notice delivered to the Company within 20 days after the giving of such
notice by the Company (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent requisite
to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities which the Company has
been so requested to register. The demand registration rights granted
pursuant to this Section 7.2.1 may not be exercised on more than two
occasions. No holder of Lee Securities shall present any request for
registration pursuant to this Section 7.2.1 at any time within one
hundred twenty (120) days after either the furnishing by the Company of
any notice of proposed registration under Section 7.1 or 7.2 hereof
(unless abandoned by notice from the Company or the Majority Initiating
Holders, as applicable) or the consummation of any other Public Offering,
without the prior consent of the Company.

7.2.2. REGISTRATION ON REQUEST OF HOLDERS OF SCP SECURITIES AND
EMPLOYEE SECURITIES.

7.2.2.1. SCP INVESTORS. At any time following consummation
of the Initial Public Offering, the SCP Majority Holders (as to
such registration, the "INITIATING HOLDERS") may, by notice to the
Company specifying the intended method or methods of disposition,
request that the Company effect the registration under the
Securities Act of all or a specified part of the Registrable
Securities held by such

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<PAGE> 30

holders. The demand registration rights granted pursuant to
this Section 7.2.2.1 may not be exercised on more than one (1)
occasion.

7.2.2.2. OTHER INVESTORS. At any time following the
consummation of any two Public Offerings, the Employee
Majority Holders (as to such registration, the "INITIATING
HOLDERS") may, by notice to the Company specifying the
intended method or methods of disposition, request that the
Company effect the registration under the Securities Act of
all or a specified part of the Registrable Securities held by
such holders. The demand registration rights granted pursuant
to this Section 7.2.2.2 may not be exercised on more than two
(2) occasions.

7.2.2.3. CERTAIN PROVISIONS. No holder of SCP
Securities or Employee Securities shall present any request
for registration pursuant to this Section 7.2.2 at any time
within one hundred twenty (120) days after either the
furnishing by the Company of any notice of proposed
registration under Section 7.1 or 7.2 hereof (unless abandoned
by notice from the Company or the Majority Initiating Holders,
as applicable) or the consummation of any other Public
Offering without the prior consent of the Company. Promptly
after receipt of any notice requesting registration of
Registrable Securities pursuant to this Section 7.2.2, the
Company will give notice of such requested registration to all
other holders of Registrable Securities. The Company will then
use its reasonable best efforts to effect the registration
under the Securities Act of the Registrable Securities which
the Company has been requested to register by the holders
requesting pursuant to this Section 7.2.2, and, subject to all
of the provisions of this Section 7, all other Registrable
Securities which the Company has been requested to register
pursuant to Section 7.1.1 by notice delivered to the Company
within 20 days after the giving of such notice by the Company
(which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent
requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable
Securities which the Company has been so requested to
register.

7.2.3. FORM. Each registration requested pursuant to Section
7.2.1 shall be effected by the filing of a registration statement on
Form S-1 (or any other form which includes substantially the same
information as would be required to be included in a registration
statement on such form as currently constituted), unless the use of a
different form has been agreed to in writing by holders of at least a
majority of the Registrable Securities held by the Initiating Holders
(the "Majority Initiating Holders"). Each registration requested
pursuant to Section 7.2.2 shall be effected by the filing of a
registration statement on Form S-3; PROVIDED, HOWEVER, that if at such
time Form S-3 is

<PAGE> 31

not available to the Initiating Holders, then such registration may be
effected by the filing of a registration statement on Form S-1 or such
other form as may be agreed to in writing by the Majority Initiating
Holders. At the time of the Initial Public Offering and thereafter, the
Company shall use commercially reasonable efforts to make the Company
eligible to register Registrable Securities on Form S-3, including the
listing of its securities on a national securities exchange or the
quoting of its securities on an automated quotation system of a national
securities association.

7.2.4. REGISTRATIONS PURSUANT TO SECTION 7.2. In the case of a
registration pursuant to Section 7.2, whenever the Majority Initiating
Holders shall request that such registration shall be effected pursuant
to an underwritten offering, such registration shall be so effected, and
all Registrable Securities to be included in such registration shall be
included in such underwritten offering, subject to the cutback provisions
of Section 7.3.1. If requested by such underwriters, the Company will
enter into an underwriting agreement with such underwriters for such
offering containing such representations and warranties by the Company
and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions,
including, without limitation, customary indemnity and contribution
provisions.

7.2.5. EXPENSES. The Company shall pay all expenses of the holders
of Registrable Securities participating in any Public Offering pursuant
to this Section 7.2, other than (i) underwriting discounts and
commissions, if any, (ii) applicable transfer taxes, if any, and (iii)
fees and charges of any attorneys or other advisors (other than attorneys
and advisors retained by the Company to advise it in connection with such
Public Offering and one counsel retained to advise all holders of
Registrable Securities in connection with such Public Offering) retained
by any such holders.

7.3. CERTAIN OTHER PROVISIONS.

7.3.1. CUTBACKS. Notwithstanding the foregoing provisions of this
Section 7, if the Company is advised in good faith by any managing
underwriter of securities being offered pursuant to any Public Offering
under this Section 7 that the number of shares requested to be sold in
such Public Offering is greater than the number of such shares which can
be included in such Public Offering without materially adversely
affecting such Public Offering, the shares to be included in such
offering shall be reduced to the extent requested by such managing
underwriter as provided in this Section 7.3.1:

7.3.1.1. COMPANY REGISTRATION OR IPO. Upon registration by
the Company of securities for its own account as contemplated by
Section 7.1.1 or in

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<PAGE> 32
the case of an Initial Public Offering, shares to be included in
such offering shall be reduced in the following order and fashion:

(i) first, Registrable Securities requested to be
included in the Public Offering by Persons other than the Company,
if any, with respect to such Public Offering shall be reduced pro
rata (based on the number of shares requested to be included by
such Persons); and

(ii) second, shares of Common Stock proposed to be
included by the Company shall be reduced.

7.3.1.2. DEMAND REGISTRATION RIGHTS. Upon the exercise of
demand registration rights by the Initiating Holders pursuant to
Section 7.2 (except in the case of an Initial Public Offering),
the shares to be included in such offering shall be reduced pro
rata (based on the number of such shares proposed to be included).

7.3.2. SELECTION OF MANAGING UNDERWRITERS. In the case of any
registration proposed by the Company for the Public Offering of
securities for its own account, the managing underwriters, if any, with
respect thereto shall be selected by the Board of Directors. In the case
of any registration pursuant to Section 7.2 hereof, the holders of a
majority of the Registrable Securities requested to be included therein
hereunder shall select the managing underwriters, if any, with respect
thereto. Notwithstanding the foregoing provisions of this Section 7.3.2,
in the case of the Initial Public Offering, the managing underwriter with
respect thereto shall be selected by the Lee Majority Holders, provided
that the Lee Investors hereby acknowledge and agree that prior to
selecting any managing underwriter pursuant to this Section 7.3.2, they
will cause the Lee Designated Investors to notify and discuss such action
with the other members of the Board, it being acknowledged and agreed
that the consent of the SCP Designated Director and the Employee
Designated Directors shall not be required in connection with any such
selection, nor shall any action be invalidated based on the failure of
such Lee Designated Directors to notify and discuss such actions with the
other Directors.

7.3.3. Selection of Counsel. Counsel to the Company in connection
with any Public Offering shall be selected by the Board of Directors, and
counsel to the selling holders of Registrable Securities shall be
selected by the holders of a majority of the Registrable Securities
requested pursuant to the provisions hereof to be included therein.

7.4. INDEMNIFICATION AND CONTRIBUTION.

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<PAGE> 33

7.4.1. INDEMNITIES OF THE COMPANY. In the event of any
registration of any Registrable Securities or other debt or equity
securities under the Securities Act, and in connection with any
registration statement filed under the Securities Act, or any other
disclosure document produced by or on behalf of the Company and any of
its Subsidiaries, including without limitation reports required or other
documents filed under the Exchange Act and documents pursuant to which
securities of the Company and any of its Subsidiaries are sold (whether
or not for the account of the Company), the Company will, and hereby
does, and will cause each of its Subsidiaries, jointly and severally to,
indemnify and hold harmless each seller of Registrable Securities, any
other holder of Securities who is or might be deemed to be a controlling
Person of the Company and any of its Subsidiaries within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, their
respective direct and indirect partners, advisory board members,
directors, officers and shareholders, and each other Person, if any, who
controls any such seller or any such holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (each such
person being referred to herein as a "Covered Person"), against any
losses, claims, damages or liabilities, joint or several, to which such
Covered Person may be or become subject under the Securities Act, the
Exchange Act, state securities or blue sky laws, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained or incorporated by reference in any registration statement
under the Securities Act, any preliminary prospectus or final prospectus
included therein, or any related summary prospectus, or any amendment or
supplement thereto, or any document incorporated by reference therein, or
any other disclosure document (including without limitation reports and
other documents filed under the Exchange Act) or any document
incorporated by reference therein, (ii) any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any
violation by the Company and any of its Subsidiaries of any federal,
state or common law rule or regulation applicable to the Company or to
any of its Subsidiaries and relating to action or inaction in connection
with any such registration or disclosure document and will reimburse such
Covered Person for any legal or any other expenses incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; PROVIDED, HOWEVER, that neither the
Company nor any of its Subsidiaries shall be liable to any Covered Person
in any such case to the extent that any such loss, claim, damage,
liability, action or proceeding arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement or other
disclosure document in reliance upon and

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<PAGE> 34

in conformity with written information furnished to the Company or to any
of its Subsidiaries through an instrument duly executed by such Covered
Person specifically stating that it is for use in the preparation
thereof. The indemnities of the Company and each of its Subsidiaries
contained in this Section 7.4.1 shall remain in full force and effect
regardless of any investigation made by or on behalf of such Covered
Person and shall survive any transfer of securities.

7.4.2. INDEMNITIES TO THE COMPANY. The Company and any of its
Subsidiaries may require, as a condition to including any securities in
any registration statement filed pursuant to this Section 7, that the
Company and any of its Subsidiaries shall have received an undertaking
satisfactory to it from the prospective seller of such securities, to
indemnify and hold harmless the Company and any of its Subsidiaries, each
director of the Company or any of its Subsidiaries, each officer of the
Company or any of its Subsidiaries who shall sign such registration
statement and each other Person (other than such seller), if any, who
controls the Company and any of its Subsidiaries within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, with
respect to any statement in or omission from such registration statement
(or any violation by the Company of any federal, state or common law rule
or regulation applicable to the Company), any preliminary prospectus or
final prospectus included therein, or any amendment or supplement
thereto, or any other disclosure document (including without limitation
reports and other documents filed under the Exchange Act) if such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company or to any of its
Subsidiaries through an instrument executed by such seller specifically
stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement or other disclosure document. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company, any of its Subsidiaries, or any such
director, officer or controlling Person and shall survive any transfer of
securities.

7.4.3. CONTRIBUTION. If the indemnification provided for in
Sections 7.4.1 or 7.4.2 hereof is unavailable to a party that would have
been an indemnified party under any such Section in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of such
indemnifying party on the one hand and such indemnified party on the
other in connection with the statements or

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<PAGE> 35

omissions which resulted in such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof). The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or such indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties agree that it would not
be just or equitable if contribution pursuant to this Section 7.4.3 were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the preceding sentence. The amount paid or payable by a contributing
party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this
Section 7.4.3 shall include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 1l(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

7.4.4. LIMITATION ON LIABILITY OF HOLDERS OF REGISTRABLE
SECURITIES. The liability of each holder of Registrable Securities in
respect of any indemnification or contribution obligation of such holder
arising under this Section 7.4 shall not in any event exceed an amount
equal to the net proceeds to such holder (after deduction of all
underwriters' discounts and commissions and all other expenses paid by
such holder in connection with the registration in question) from the
disposition of the Registrable Securities disposed of by such holder
pursuant to such registration.

7.5. LOCK UP. No holder of Securities shall Transfer any Securities
without the prior written consent of the underwriters managing the offering (i)
for a period beginning seven days immediately preceding and ending on the 180th
day following the effectiveness of the registration statement filed in
connection with the Initial Public Offering, and (ii) for a period beginning
seven days immediately preceding and ending on the 180th day following the
effectiveness of the registration statement filed in connection with any
subsequent Public Offering, or such lesser period as may be consented to in
writing by the underwriters managing such subsequent Public Offering.

8. CERTAIN FUTURE EQUITY FINANCINGS OF THE COMPANY. The Company shall not
issue or sell any shares of any of its capital stock or any securities
convertible into or exchangeable for any shares of its capital stock, issue or
grant any rights (either preemptive or other) to subscribe for or to purchase,
or any options or warrants for the purchase of, or enter into any agreements
providing for the issuance (contingent or otherwise) of, any of its capital
stock

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<PAGE> 36

or any stock or securities convertible into or exchangeable for any shares of
its capital stock, or grant stock appreciation or other equity equivalent
rights, in each case to any Person (each an "ISSUANCE" of "SUBJECT SECURITIES"),
except in compliance with the following provisions of this Section 8; PROVIDED,
HOWEVER, that the provisions of this Section 8 shall not apply to any such
issuance or sale pursuant to options, warrants or rights for, or securities
convertible into, other securities, in each case if such options, warrants,
rights or convertible securities (i) were outstanding as of the date hereof, or
(ii) were issued after the date hereof in connection with employee compensation
or incentive plans established from time to time by the Company; and PROVIDED,
FURTHER, that the provisions of this Section 8 shall not apply to any such
issuance or sale of (i) shares of capital stock in connection with acquisitions
by the Company or any of its Subsidiaries which are approved by the Board or
(ii) warrants, debt instruments or other securities convertible into or
exchangeable for shares of capital stock which are issued to any bank or
financial institution in connection with any future debt financing of the
Company or any of its Subsidiaries unless and until such time as such securities
are actually converted into or exchanged for shares of capital stock.

8.1. RIGHT OF PARTICIPATION.

8.1.1. OFFER. Not fewer than thirty (30) business days prior to
the consummation of the Issuance, a notice (the "PREEMPTION NOTICE")
shall be furnished by the Company to each holder of Lee Securities, SCP
Securities, Seller Securities and the Compensation Committee of the Board
on behalf of the holders of Employee Securities (collectively, the
"PREEMPTIVE PURCHASER OFFEREES"). The Preemption Notice shall include:

(i) The principal terms of the proposed Issuance,
including without limitation the amount and kind of Subject
Securities to be included in the Issuance, the percentage of the
total number of shares of Common Stock outstanding as of
immediately prior to giving effect to such Issuance (calculated on
a fully diluted basis) which the number of Securities (giving
effect to all Options, as if such Options had been exercised to
purchase the number of shares of Common for which such Options
were then exercisable, on a cashless basis) held by such
Preemptive Purchaser Offeree (in the case of the Compensation
Committee, as to all Employee Securities) constitutes (the
"PREEMPTIVE PORTION"), the maximum price per unit of the Subject
Securities, the name and address of the Persons to whom the
Subject Securities will be Issued (the "PROPOSED BUYERS") and the
other principal terms of the proposed Issuance; and

(ii) An offer by the Company to Issue, at the option of
each Preemptive Purchaser Offeree, to such Preemptive Purchaser
Offeree, such portion of the

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<PAGE> 37

Subject Securities to be included in the Issuance as may be
requested by such Preemptive Purchaser Offeree (not to exceed the
Preemptive Portion of the total amount of Subject Securities to be
included in the Issuance) determined as provided in Section 8.1.2,
on the same terms and conditions, with respect to each unit of
Subject Securities issued to the Preemptive Purchaser Offerees, as
each of the Proposed Buyers shall be Issued each of his, her or
its units of Subject Securities.

8.1.2. TIME AND MANNER OF EXERCISE BY OFFEREES. Each Preemptive
Purchaser Offeree desiring to accept the offer contained in the
Preemption Notice shall send a written commitment to the Company
specifying the amount of Subject Securities (not in any event to exceed
the Preemptive Portion of the total amount of Subject Securities to be
included in the Issuance) which such Preemptive Purchaser Offeree desires
to be issued within ten (10) business days after effectiveness of the
Preemption Notice (each Preemptive Purchaser Offeree who so accepts the
offer contained in the Preemption Notice being referred to herein as a
"PARTICIPATING BUYER"). Each Preemptive Purchaser Offeree who has not so
accepted such offer shall be deemed to have waived all of his rights with
respect to the Issuance, and the Company shall thereafter be free to
Issue in the Issuance to the Proposed Buyers, at a price no less than
95% of the maximum price set forth in the Preemption Notice and on
otherwise substantially no more favorable terms than as set forth in the
Preemption Notice, without any further obligation to include such
non-accepting Preemptive Purchaser Offerees in the Issuance. If, prior to
consummation, the terms of such proposed Issuance shall change with the
result that the price shall be less than 95% of the maximum price set
forth in the Preemption Notice or the other principal terms shall be
substantially more favorable than as set forth in the Preemption Notice,
it shall be necessary for a separate Preemption Notice to have been
furnished, and the terms and provisions of this Section 8.1 separately
complied with, in order to consummate such proposed Issuance pursuant to
this Section 8.1.

The acceptance of each Participating Buyer shall be irrevocable
except as hereinafter provided, and each such Participating Buyer shall
be bound and obligated to acquire in the Issuance on the same terms and
conditions (subject to all of the provisions of this Agreement), with
respect to each unit of Subject Securities Issued, as the Proposed Buyers
shall be Issued each of his, her or its units of Subject Securities, such
amount of Subject Securities as such Participating Buyer shall have
specified in such Participating Buyer's written commitment. If at the end
of the one hundred twentieth (120th) day following the date on which the
Preemption Notice was given the Company has not completed the Issuance as
provided in the foregoing provisions of this Section 8, each
Participating Buyer shall be released from his obligations under the
written commitment, the Preemption Notice shall be null and void, and it
shall be necessary for a separate

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<PAGE> 38

Preemption Notice to have been furnished, and the terms and provisions of
this Section 8.1 separately complied with, in order to consummate an
Issuance pursuant to this Section 8.1, unless the failure to complete the
Issuance resulted from any failure by any Preemptive Purchaser Offeree to
comply in any material respect with the terms of this Section 8.

8.1.3. EXERCISE BY THE COMPENSATION COMMITTEE. Notwithstanding the
generality of the provisions of Section 8.1.2, the Compensation Committee
of the Board shall have the right to accept the offer contained in the
Preemption Notice as to the Preemptive Portion of Subject Securities on
behalf of any employee of the Company or any of its Subsidiaries as the
Compensation Committee may so designate. If the Compensation Committee
desires to accept the offer contained in the Preemption Notice, it shall
send a written notice of acceptance to the Company within ten (10)
business days after effectiveness of the Preemption Notice. The
Compensation Committee shall within ninety (90) days after effectiveness
of the Preemption Notice send to the Company a written notice which
specifies the name of each employee to whom the Compensation Committee
has delegated the right to purchase Subject Securities and the number of
shares of Subject Securities allocated to such employee (not to exceed as
to all such employees the Preemptive Portion of the total amount of
Subject Securities to be included in the Issuance).

8.1.4. CERTAIN LEGAL REQUIREMENTS. In the event the participation
by any Preemptive Purchaser Offeree as a Participating Buyer would
require under applicable law (i) the registration or qualification of any
securities or of any person as a broker or dealer or agent with respect
to such securities or (ii) the provision to any participant in the
Issuance of any information other than such information as would
be required under Regulation D of the Securities and Exchange Commission
or similar rule then in effect in an offering made pursuant to said
Regulation D solely to "accredited investors" as defined in said
Regulation D, the Company shall be obligated to use all commercially
reasonable efforts to cause such requirements to have been complied with
to the extent necessary to permit such Participating Buyer to receive
such securities. Notwithstanding any provisions of this Section 8, if use
of all commercially reasonable efforts shall not have resulted in such
requirements being complied with to the extent necessary to permit such
Participating Buyer to receive such securities, the Company may exclude
such Participating Buyer from participation in the Issuance. The
obligation of the Company to use reasonable best efforts to cause such
requirements to have been complied with to the extent necessary to permit
a Participating Buyer to receive such securities shall be conditioned on
such Participating Buyer executing such documents and instruments, and
taking such other actions (including without limitation, if required by
the Company on advice of its counsel, agreeing to be

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<PAGE> 39

represented during the course of such transaction by a "purchaser
representative" (as defined in Regulation D) in connection with
evaluating the merits and risks of the prospective investment and
acknowledging that he was so represented), as the Company shall
reasonably request in order to permit such requirements to have been
complied with. Each Participating Buyer agrees to take such actions as
the Company shall reasonably request in order to permit such requirements
to have been complied with.

8.1.5. CLOSING. Each Participating Buyer shall take such actions
and execute such documents and instruments as shall be reasonably
necessary or desirable in order to consummate the Issuance expeditiously
and on the same terms and conditions (subject to all of the provisions of
this Agreement) with respect to each unit of Subject Securities Issued,
as the Proposed Buyers shall be Issued each of his, her or its units of
Subject Securities.

8.2. PERIOD. The foregoing provisions of this Section 8 shall terminate
simultaneously with the closing of the Initial Public Offering.

9. INFORMATION AND INSPECTION RIGHTS.

9.1. FINANCIAL STATEMENTS; INFORMATION. The Company will, and will
cause each of its Subsidiaries to, maintain a standard system of accounts in
accordance with generally accepted accounting principles consistently applied
and the Company will, and will cause each of its Subsidiaries to, keep full and
complete financial records. The Company will furnish to the Seller Initial
Investor and each other Investor which holds Securities which constitute at
least 4% of the Common Stock then outstanding the information set forth in this
Section 9.1.

(a) Within ninety (90) days after the end of each fiscal year,
a copy of the consolidated and consolidating balance sheet of the Company
and its Subsidiaries, if any, as at the end of such year, together with
consolidated and consolidating statements of income, shareholders' equity
and cash flows of the Company and its Subsidiaries, if any, for such
year, setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, all in reasonable detail and duly
certified by an independent public accountant of national recognition
selected by the Board of Directors of the Company.

(b) Within forty-five (45) days after the end of each fiscal
quarter, a consolidated and consolidating balance sheet of the Company
and its Subsidiaries, if any, as of the end of such fiscal quarter and
consolidated and consolidating statements of income, shareholders' equity
and cash flow for such fiscal quarter and for the period

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<PAGE> 40

commencing at the end of the previous fiscal year and ending with the end
of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding
fiscal year, all in reasonable detail.

(c) Promptly upon receipt thereof, any written report, so
called "management letter", and any other communication submitted to the
Company or any Subsidiary by its independent public accountants relating
to the business, prospects or financial condition of the Company and its
Subsidiaries, if any.

(d) Such other information with regard to the business,
properties or the condition or operations, financial or otherwise, of the
Company of its Subsidiaries, if any, as such Investor may from time to
time reasonably request; PROVIDED, THAT, nothing contained herein shall
entitle the Seller Investors to receive information (other than the
foregoing) which is generally made available exclusively to the Board of
Directors of the Company.

9.2. AVAILABILITY OF FINANCIAL AND OTHER INFORMATION. The Company will
make available at the request of any holder of Securities upon reasonable
advance notice, the information described in Sections 9.1(a) and (b) above.

9.3. INSPECTION. The Company shall permit authorized representatives of
the Seller Initial Investor and each Investor which holds Securities which
constitute at least 4% of the Common Stock then outstanding to visit and
inspect and copy any of the properties of the Company, including its books of
account and other records, and to consult its officers, administrative employees
and independent accountants regarding its affairs, finances and accounts during
normal business hours and upon reasonable advance notice, as may be reasonably
requested by such Investor, but in no event on more than four occasions in any
calendar year; PROVIDED, HOWEVER, that all such information provided to such
Investor by the Company will be maintained as confidential by such Investor and
not be disclosed to third parties; PROVIDED, FURTHER, that any such Investor may
provide summaries of such information to Affiliates of such Investor (such as
reports provided by such Investor to its Affiliates in its fiduciary capacity)
so long as such Affiliate is not a Competitor Institution.

10. AFFILIATED TRANSACTIONS. The Company shall not, and shall cause
its Subsidiaries not to, effect or remain obligated with respect to any
transaction with any Affiliate of the Company or any such Subsidiary other than
(i) transactions between the Company or any of its Subsidiaries on the one hand
and the Company or any of its Subsidiaries on the other hand, and (ii)
transactions on arms' length terms approved by the Board after full disclosure;
PROVIDED,

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<PAGE> 41

HOWEVER, that the Company and its Subsidiaries may become and remain liable in
respect of compensation payable to executive officers and other employees of the
Company and its Subsidiaries in the ordinary course of business and transaction
and management fees payable to the Lee Investors and the SCP Investors pursuant
to agreements executed in connection with the closing under the Contribution
Agreement.

11. REMEDIES.

11.1. GENERALLY. The Company and all holders of Securities shall have
all remedies available at law, in equity or otherwise in the event of any breach
or violation of this Agreement or any default hereunder by the Company or any
holder of Securities. The parties acknowledge and agree that in the event of any
breach of this Agreement, in addition to any other remedies which may be
available, each of the parties hereto shall be entitled to specific performance
of the obligations of the other parties hereto and, in addition, to such other
equitable remedies (including, without limitation, preliminary or temporary
relief) as may be appropriate in the circumstances.

11.2. DEPOSIT. Without limiting the generality of Section 11.1, if any
Investor (a "Non-Complying Investor") fails to deliver any certificate or
certificates evidencing Securities that may be required to be Transferred
pursuant to any provision of this Agreement in accordance with the terms hereof,
the Company or other Person entitled to purchase or require the Transfer of such
securities may, at its option, in addition to all other remedies it may have,
deposit the price for such Securities with any national bank or trust company
having combined capital, surplus and undivided profits in excess of one hundred
million dollars ($100,000,000) and which has agreed to act as escrow agent in
the manner contemplated by this Section 11.2 and shall furnish or make available
to all interested Persons satisfactory evidence of such deposit and thereupon
the Company shall cancel on its books the certificate or certificates
representing such Securities and, in the case of any such Transfer of Securities
to a Person other than the Company issue, in lieu thereof and in the name of
such Person, a new certificate or certificates representing such Securities and
thereupon all of the Non-Complying Investor's rights in and to such Securities
shall terminate. Thereafter, upon delivery to the Company by such Non-Complying
Investor of the certificate or certificates evidencing such Securities (duly
endorsed, or with stock powers or other appropriate instruments of transfer duly
endorsed, for transfer, with signature guaranteed, free and clear of any liens
or encumbrances, and with all applicable stock transfer tax stamps affixed), the
Company shall instruct the escrow agent referred to above to deliver the
purchase price (without any interest from the date of the closing to the date of
such delivery, any such interest to accrue to the Person who deposited the
purchase price for such Securities) to such Non-Complying Investor.

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<PAGE> 42

12. LEGEND. Each certificate representing Securities shall have the
following legend endorsed conspicuously thereupon:

"The securities represented by this certificate are subject to
restrictions on voting and transfer and requirements of sale and the
provisions as set forth in the Stockholders Agreement dated as of
November 30, 1996, as amended and in effect from time to time, and
constitute Securities as defined in such Stockholders Agreement. The
Company will furnish a copy of such agreement to the holder of this
certificate without charge upon written request."

Any person who acquires Securities which are not subject to all or part
of the terms of this Agreement shall have the right to have such legend (or the
applicable portion thereof) removed from certificates representing such
Securities.

13. AMENDMENT, ETC.

13.1. NO ORAL MODIFICATIONS. This Agreement may not be orally amended,
modified, extended or terminated, nor shall any oral waiver of any of its terms
be effective.

13.2. WRITTEN MODIFICATIONS. This Agreement may be amended, modified,
extended or terminated, and the provisions hereof may be waived, by an agreement
in writing signed by the holders of not less than fifty-five percent (55%) of
the outstanding shares of Common Stock; provided, however, that no amendment,
restatement, modification, termination or waiver which adversely affects the
rights of the holders of SCP Securities, the holders of Employee Securities or
the holders of Seller Securities shall be effective without the written consent
(which, in the case of the holders of Employee Securities, such consent shall
not require as a condition precedent the solicitation of all holders of Employee
Securities) of those holders holding a majority of such type of Securities,
regardless of whether such proposed amendment or other modification equally
affects the holders of each other type of Securities. In addition, each party
hereto and each holder of Securities subject hereto may waive any of its rights
hereunder by an instrument in writing signed by such party or holder.

14. MISCELLANEOUS.

14.1. AUTHORITY; EFFECT. Each party hereto represents and warrants to
and agrees with each other party that the execution and delivery of this
Agreement has been duly authorized on behalf of such party and does not violate
any agreement or other instrument applicable to such party or by which its
assets are bound. This Agreement does not, and shall not be construed to,

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<PAGE> 43

give rise to the creation of a partnership among any of the parties hereto, or
to constitute any of such parties members of a joint venture or other
association.

14.2. NOTICES. Notices and other communications provided for in this
Agreement shall be in writing and shall be effective (i) when one day shall have
elapsed (exclusive of Saturdays, Sundays and banking holidays in the City of
Boston) from their deposit for overnight delivery with Federal Express or other
bonded courier (charges prepaid), addressed to the party or parties sought to
be charged with notice of the same at the respective addresses set forth or
referred to below, subject to written notice of change of address given by any
party to each other party, (ii) when three (3) days shall have elapsed
(exclusive of Saturdays, Sundays and banking holidays in the City of Boston)
from their deposit in the U.S. mail, postage prepaid and registered or
certified, addressed to the party or parties sought to be charged with notice of
the same at the respective addresses set forth or referred to below, subject to
written notice of change of address given by any party to each other party, or
(iii) if earlier, upon receipt.

If to the Company, to it at:

JHFSC Acquisition Corp.
c/o Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02108
Attention: Chairman

with copies to:

John Hancock Freedom Securities Corporation
One World Financial Center
200 Liberty Street
New York, New York 10281
Attention: Kevin J. McKay, Esq.

Ropes & Gray
One International Place
Boston, Massachusetts 02110
Attention: Alfred O. Rose, Esq.

Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109

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<PAGE> 44

Attention: Thomas M. Hagerty

Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
Attention: James Westra, Esq.

If to the Lee Initial Investor, to it at:

c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
Attention: Thomas M. Hagerty

with a copy to:

Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
Attention: James Westra, Esq.

If to the SCP Initial Investor, to it at:

SCP Private Equity Partners
800 The Safeguard Building
435 Devon Park Drive
Wayne, Pennsylvania 19087-1945
Attention: Winston J. Churchill

with a copy to:

SCP Private Equity Partners
800 The Safeguard Building
435 Devon Park Drive
Wayne, Pennsylvania 19087-1945
Attention: Wayne Weisman

If to the Seller Initial Investor, to it at:

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<PAGE> 45

c/o John Hancock Mutual Life
Insurance Company
200 Clarendon Street
Boston, Massachusetts 02116
Attention: Foster Aborn, Vice Chairman
and Chief Investment Officer

with a copy to:

John Hancock Mutual Life
Insurance Company
200 Clarendon Street
Boston, Massachusetts 02116
Attention: Joanne P. Acford, Esq.

Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Jeffrey N. Karp, Esq.

If to any Employee Investor, to him or her at:

c/o John H. Goldsmith, Employee Securities Representative
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02108

with copies to:

John Hancock Freedom Securities Corporation
One World Financial Center
200 Liberty Street
New York, New York 10281
Attention: Kevin J. McKay, Esq.

Ropes & Gray
One International Place
Boston, Massachusetts 02110
Attention: Alfred O. Rose, Esq.

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<PAGE> 46

If to any other Investor, to such Investor at the address set
forth in the stock record book of the Company.

Notice to the holder of record of any shares of capital stock shall be
deemed to be notice to the holder of such shares for all purposes hereof.

14.3. BINDING EFFECT, ETC. This Agreement constitutes the entire
agreement of the parties with respect to its subject matter, supersedes all
prior or contemporaneous oral or written agreements or discussions with respect
to such subject matter, and shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, representatives, successors and
assigns. No provision of this Agreement providing for the expiration of any
provision by lapse of time or upon the occurrence of specified events or
otherwise shall relieve any Person of liability for breach or violation prior to
such expiration.

14.4. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are for convenience of reference only, are not to be considered a part hereof
and shall not be construed to define or limit any of the terms or provisions
hereof.

14.5. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one instrument.

14.6. SEVERABILITY. If in any judicial or arbitral proceedings a court
or arbitrator shall refuse to enforce any provision of this Agreement, then such
unenforceable provision shall be deemed eliminated from this Agreement for the
purpose of such proceedings to the extent necessary to permit the remaining
provisions to be enforced. To the full extent, however, that the provisions of
any applicable law may be waived, they are hereby waived to the end that this
Agreement be deemed to be valid and binding agreement enforceable in accordance
with its terms, and in the event that any provision hereof shall be found to be
invalid or unenforceable, such provision shall be construed by limiting it so as
to be valid and enforceable to the maximum extent consistent with and possible
under applicable law.

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<PAGE> 47

15. GOVERNING LAW, ARBITRATION.

15.1. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction; PROVIDED, HOWEVER, that any dispute relating to the
provisions of Section 15.2 hereof shall be governed by the United States
Arbitration Act as then in force.

15.2. ARBITRATION.

15.2.1. GENERALLY. Except solely as set forth in Section 15.2.3
hereof, each dispute, difference, controversy or claim arising in
connection with or related or incidental to, or question occurring under,
this Agreement or the subject matter hereof shall be finally settled
under the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA") by an arbitral tribunal composed of three
arbitrators, at least one of whom shall be an attorney experienced in
corporate transactions, appointed by agreement of the parties in
accordance with said Rules. In the event the parties fail to agree upon a
panel of arbitrators from the first list of potential arbitrators
proposed by the AAA; the AAA will submit a second list in accordance with
said Rules. In the event the parties shall have failed to agree upon a
full panel of arbitrators from said second list, any remaining
arbitrators to be selected shall be appointed by the AAA in accordance
with said Rules. If, at the time of the arbitration, the parties agree in
writing to submit the dispute to a single arbitrator, said single
arbitrator shall be appointed by agreement of the parties in accordance
with the foregoing procedure, or, failing such agreement, by the AAA in
accordance with said Rules. The foregoing arbitration proceedings may be
commenced by any party by notice to the other parties.

15.2.2. PLACE OF ARBITRATION. The place of arbitration shall be
Boston, Massachusetts.

15.2.3. RECOURSE TO COURTS. The parties hereby exclude any right
of appeal to any court on the merits of the dispute. The provisions of
this Section 15.2 may be enforced in any court having jurisdiction over
the award of any of the parties or any of their respective assets, and
judgment on the award (including without limitation equitable remedies)
granted in any arbitration hereunder may be entered in any such court.
Nothing contained in this Section 15.2 shall prevent any party from
seeking interim measures of

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<PAGE> 48

protection in the form of pre-award attachment of assets or preliminary
or temporary equitable relief.

15.3. CONSENT TO JURISDICTION. Subject to the provisions of Section
15.2, each of the parties agrees that all actions, suits or proceedings arising
out of or based upon this Agreement or the subject matter hereof shall be
brought and maintained exclusively in the federal and state courts of The
Commonwealth of Massachusetts. Subject to the provisions of Section 15.2, each
of the parties hereto by execution hereof (i) hereby irrevocably submits to the
jurisdiction of the federal and state courts in The Commonwealth of
Massachusetts for the purpose of any action, suit or proceeding arising out of
or based upon this Agreement or the subject matter hereof and (ii) hereby waives
to the extent not prohibited by applicable law, and agrees not to assert, by way
of motion, as a defense or otherwise, in any such action, suit or proceeding,
any claim that he or it is not subject personally to the jurisdiction of the
above-named courts, that he or it is immune from extraterritorial injunctive
relief or other injunctive relief, that his or its property is exempt or immune
from attachment or execution, that any such action, suit or proceeding may not
be brought or maintained in one of the above-named courts, that any such action,
suit or proceeding brought or maintained in one of the above-named courts should
be dismissed on grounds of FORUM NON CONVENIENS, should be transferred to any
court other than one of the above-named courts, should be stayed by virtue of
the pendency of any other action, suit or proceeding in any court other than one
of the above-named courts, or that this Agreement or the subject matter hereof
may not be enforced in or by any of the above-named courts. Each of the parties
hereto hereby consents to service of process in any such suit, action or
proceeding in any manner permitted by the laws of The Commonwealth of
Massachusetts, agrees that service of process by registered or certified mail,
return receipt requested, at the address specified in or pursuant to Section
14.2 is reasonably calculated to give actual notice and waives and agrees not to
assert by way of motion, as a defense or otherwise, in any such action, suit or
proceeding any claim that service of process made in accordance with Section
14.2 does not constitute good and sufficient service of process. The provisions
of this Section 15.3 shall not restrict the ability of any party to enforce in
any court any judgment obtained in a federal or state court of The Commonwealth
of Massachusetts.

15.4. WAIVER OF JURY TRIAL. To the extent not prohibited by applicable
law which cannot be waived, each of the parties hereto hereby waives, and
covenants that he or it will not assert (whether as plaintiff, defendant, or
otherwise), any right to trial by jury in any forum in respect of any issue,
claim, demand, cause of action, action, suit or proceeding arising out of or
based upon this Agreement or the subject matter hereof, in each case whether now
existing or hereafter arising and whether in contract or tort or otherwise. Any
of the parties hereto may file an original counterpart or a copy of this Section
15.4 with any court as written evidence of the consent of each of the parties
hereto to the waiver of his or its right to trial by jury.

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<PAGE> 49

15.5. RELIANCE. Each of the parties hereto acknowledges that he or it
has been informed by each other party that the provisions of Section 15
constitute a material inducement upon which such party is relying and will rely
in entering into this Agreement and the transactions contemplated hereby.

[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

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<PAGE> 50

IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement (or caused this Agreement to be executed on its behalf by its officer
or representative thereunto duly authorized) under seal as of the date first
above written.

THE COMPANY: JHFCS ACQUISITION CORP.

By: /s/ John Goldsmith
---------------------------------
Title: President

THE LEE INITIAL INVESTORS: THOMAS H. LEE
EQUITY FUND
III, L.P.

By: THL Equity Advisors
Limited Partnership III,
General Partner

By: THL Equity Trust III,
General Partner

By: /s/ C. Hunter Boll
------------------------------
Title: Vice President

THOMAS H. LEE
FOREIGN FUND III, L.P.

By: THL Equity Advisors
Limited Partnership III,
General Partner

By: THL Equity Trust III,
General Partner

By: /s/ C. Hunter Boll
------------------------------
Title: Vice President

-46-
<PAGE> 51

THL-CCI LIMITED PARTNERSHIP

By: THL Investment Management Corp.,
General Partner

By: /s/ C. Hunter Boll
-----------------------------------
Title: Vice President

THE SCP INITIAL
INVESTOR: SCP PRIVATE EQUITY PARTNERS, L.P.

By: /s/ Samuel A. Plum
-----------------------------------
Title: General Partner

THE SELLER INITIAL
INVESTOR: JOHN HANCOCK SUBSIDIARIES, INC.

By:
-----------------------------------
Title:

THE EMPLOYEE INITIAL
INVESTORS: EACH OF THE INDIVIDUALS AND ENTITIES
LISTED ON SCHEDULE II HERETO*

By: /s/ Kevin McKay
-----------------------------------
* as attorney-in-fact for each
of the above-mentioned
Employee Investors

<PAGE> 52

THL-CCI LIMITED PARTNERSHIP

By: THL Investment Management Corp.,
General ParTNer

By:
-----------------------------------
Title:

THE SCP INITIAL
INVESTOR: SCP PRIVATE EQUITY PARTNERS, L.P.

By:
-----------------------------------
Title: General Partner

THE SELLER INITIAL
INVESTOR: JOHN HANCOCK SUBSIDIARIES, INC.

By: /s/ John T. Farady
-----------------------------------
Title: John T. Farady
Treasurer

THE EMPLOYEE INITIAL
INVESTORS: EACH OF THE INDIVIDUALS AND ENTITIES
LISTED ON SCHEDULE II HERETO*

By:
-----------------------------------
* as attorney-in-fact for each
of the above-mentioned
Employee Investors

<PAGE> 53

SCHEDULE I
----------

Stockholders and Holdings
-------------------------
<TABLE>
<CAPTION>

Class of Number
Stockholder Stock Options of Shares
----------- ----- ------- ---------

<S> <C> <C>
Thomas H. Lee Equity Common Stock 3,425,778
Fund III, L.P.

Thomas H. Lee Foreign Common Stock 211,977
Fund III, L.P.

THL-CCI Limited Common Stock 355,365
Partnership

SCP Private Equity Common Stock 998,280
Partners, L.P.

John Hancock Subsidiaries, Common Stock 394,653.7
Inc.

Employee Investors in the Common Stock 2,508,600
aggregate

</TABLE>

<PAGE> 54

SCHEDULE II
-----------

Employee Investors
------------------

Class Number Number
Name of Stock of Shares of Options
---- -------- --------- ----------

See Attached

<PAGE> 55
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET
<TABLE>
<CAPTION>

IRA'S CERTIFICATE EMPLOYEES TIME FIRM IND.
PURCHASER'S NAME NAME DEPT/LOCATION FIRM STOCK OPTIONS OPTIONS PERF. TOTALS
- - - - - - - - - - - - - - - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABRAHAMS, MICHAEL ABRAHAMS, MIKE SU - RESEARCH SU 5,000 330 670 1,000
ABRAMSON, ROBERT E. ABRAMSON, ROB TA - OTC TRADING TA 10,000 495 1,005 1,500
ACKLER, STEPHANIE LYNN ACKLER, STEPHANIE NY FIFTH AVE TA 4,800 429 871 1,300
ADAMS, WILLIAM P. ADAMS, BILL TA - ACCOUNTING TA 2,500 124 251 375
ALBERT, HARVEY. ALBERT, HARVEY BURLINGTON TA 5,000 495 1,005 1,500
ALBIN, WILLIAM F. ALBIN, WILLIAM LAS VEGAS SU 5,000 330 670 1,000
ALCAINE, CARLOS A. ALCAINE, CARLOS SAN JOSE SU 3,500 231 469 700
SUTRO C/F ALEXANDER, EARL E. ALEXANDER, EARL SU - RETAIL SU 5,000 330 670 1,000 2,000
ALEXION, JOHN TA 0 0 1,000 1,000
ALLEN, WALTER TA 0 0 1,000 1,000
ARCHIBALD, ROBERT B. ARCHIBALD, BOB SU - FIXED INC. SU 2,500 124 251 375
ARKINSON, FRANK P. ARKINSON, FRANK SYRACUSE TA 2,500 231 469 700
ARRIOLA, ROBERT ARRIOLA, ROBERT SAN FRANCISCO SU - 0 0 1,000 1,000
ATTIA, YOSSI SU 0 0 1,000 1,000
AZARA, JERRY AZARA, JERRY JHCC TA 2,500 124 251 375
TA C/F BACHMANN, THOMAS A. BACHMANN, TOM TA - FIXED INC. TA 2,500 124 251 375
BACKLUND, BARBARA BACKLUND, BARBARA SU - FIXED INC. SU - 0 0 1,000 1,000
BAGGOT JR., THOMAS M. BAGGOT, TOM TA - MANAGERS TA 2,500 124 251 1,000 1,375
BAGLEY, TERRENCE TA 0 0 1,000 1,000
BAIN, SHERWOOD E. AND
MARGARET B. HOOPI BAIN, SHERWOOD BOSTON TA 3,650 363 737 1,100
TTEES, OF THE S.E. BAIN
TRUST DTD 4-30-87 BAIN, SHERWOOD TA 0 0 -
BANDO, CATHERINE W. BANDO, CATHY SU - PUB FINANCE SU 6,000 429 871 1,300
TA C/F BANKS, JOHN G.C. BANKS, JOHN SYRACUSE TA 3,350 380 771 1,150
BARNA, ROBERT E. BARNA, ROBERT SU - PUB FINANCE SU 2,500 124 251 375
BARNARD, ROBERT SU 0 0 1,000 1,000
BARNES, JOHN C. BARNES, JOHN GABRIELE TA 2,500 251 509 760
BARNSTON, ALFRED TREE,
ALFRED BARNSTON TR BARNSTON, AL SAN FRANCISCO SU 3,000 619 1,256 1,875
BARON, BRAD BARON, BRAD SAN JOSE SU - 0 0 1,000 1,000
SUTRO C/F BARUCH, EDWARD W. BARUCH, TED SU - PUB FINANCE SU 3,500 173 352 525
BASILE, DAVID BASILE, DAVE BOSTON TA 4,000 396 804 1,200
BATER, JEFF TA 0 0 1,000 1,000
BATTEN, RICHARD J. BATTEN, RICH BURLINGTON TA 5,000 495 1,005 1,500
BECKLEAN, WILLIAM R. BECKLEAN, WILLIAM TA - RESEARCH TA 10,000 990 2,010 3,000
BEGGANS~ BETH TA - 0 0 1,000 1,000
BELL, LANTZ BELL, LANCE WOODLAND HILLS SU 4,800 373 757 1,130
BENHAYON, STEVE BENHAYON, STEVE SU - FIXED INC. SU 0 0 1,000 1,000
BENNING, GREGORY W. BENNING, GREG TA - BANKING TA 20,000 1980 4,020 6,000
BEN-PORAT, JOSEF BEN-PORAT, JOE WOODLAND HILLS SU 2,500 429 871 1,300
BERL, WARREN H.
ALINE M. BERL CO-TTEES BERL, WARREN TA - MISC./SYND SU 2,500 124 251 375
WARREN BERL & ALINE
BERL LIV TR BERL, WARREN SU 0 0 -
BERMAN, VICTOR L. BERMAN, VICTOR BOSTON TA 3,600 462 938 1,400
BERNSTEIN, JOAN M. BERNSTEIN, JOAN WOODLAND HILLS SU 2,500 140 285 425
BERTELSON FAMILY TRUST BERTELSON, THOMAS SU 5,000 248 503 750
TA C/F BEST, ARTHUR BEST, ART TA - MANAGERS TA 6,000 330 670 1,000 2,000
BISHOP, PETER TA 0 0 1,000 1,000
TA C/F BISHOPRIC, BRIAN E. BISHOPRIC, BRIAN TA - MANAGERS TA 2,500 124 251 1,000 1,375
BLANCHARD, KAREN A. BLANCHARD, KAREN HARTFORD TA 4,800 462 938 1,400
BOGGS, STEVE BOGGS, STEVE SU - MANAGERS SU 2,500 165 335 500
BOGGS, STEVE SU 0 0 1,000 1,005
BOISVERT, MARCIA BOISVERT, MARCIA SAN JOSE SU - 0 0 1,000 1,000
BONADIES, NICHOLAS
AND MARYANN BONADIES, NICK SR. MGMT. TA 20,000 2475 5,025 7,500

</TABLE>

Page 1

<PAGE> 56

TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

BONO, MARK L. BONO, MARK TA - BANKING TA 25,000 2475 5,025 7,500
BOWLIN, PATRICIA ANN BRUNO BOWLIN, PATRICIA BOSTON FR 2,500 124 251 375
BRADFORD, WILLIAM G. BRADFORD, BILL JHCC TA 2,500 124 251 375
BREEN, PAUL A. BREEN, PAUL PHILADELPHIA TA 3,000 248 503 750
BRENNAN, JAMES R. BRENNAN, JIM GABRIELE TA 4,000 380 771 1,150
BRODERICK, JENNIFER T. BRODERICK, JENNIFER GABRIELE TA 3,950 396 804 1,200
BROOKS, WARREN TA 0 0 1,000 1,000
BROWN, ERIC TA 0 0 1,000 1,000
BROWN, MATT BROWN, MATT SANTA ROSA SU 5,000 330 670 1,000
BROWN, MICHAEL D. BROWN, MIKE SU - BANKING SU 15,000 1073 2,178 3,250
BROWN, ROBERT BROWN, ROBERT TA - MANAGERS TA 2,500 116 235 1,000 1,350
BROYLES, DAVE BROYLES, DAVE SU - MANAGERS SU - 0 0 1,000 1,000
TA C/F BUCHHOLZ, GEORGE F. BUCHHOLZ, GEORGE TA - FIXED INC. TA 4,500 231 469 700
BUCHLER, ALEXANDER BENSON
AND LORA MARIE BUCHLER, ALEX SU - FIXED INC. SU 2,500 124 251 375
CO-TTEES BUCHLER REVOCABLE
TRUST BUCHLER, ALEX SU 0 0 -
BURKE, DOUGLAS BURKE, DOUG SU - BANKING SU 12,500 949 1,926 2,875
BURKE, EDWARD J. BURKE, EDWARD TA - FIXED INC. TA 3,500 165 335 500
BURNS, MIKE TA 0 0 1,000 1,000
BUSH, FRED FR 0 0 1,000 1,000
BUTLER, JOAN TA 0 0 1,000 1,000
BUTTERWORTH, VIRGINIA TA 0 0 1,000 1,000
CADWGAN, GORDON TA 0 0 1,000 1,000
CAMILLI, KATHLEEN CAMILLI, KATHY TA- FIXED INC. TA 2,500 124 251 375
CARBONE, CHRIS TA 0 O 1,000 1,000
CARLSON, ROBERT CARLSON, BOB TA- MANAGERS TA 5,000 248 503 1,000 1,750
CARPENTER, JAY CARPENTER, JAY CHICAGO TA - 0 0 2,000 2,000

TA C/F CARPENTER JR., JOHN E. CARPENTER, JOHN TA - RETAIL TA 3,350 254 516 770
CARPENTER, LAWRENCE TA 0 0 1,000 1,000
CARTER, RODERICK A. CARTER, ROD SU - PUB FINANCE SU 5,000 338 687 1,025
CASHMAN, JAMES J. CASHMAN, JIM TA - MANAGERS TA 2,500 124 251 1,000 1,375
CASON, DALLAS CASON, DALLAS OAKLAND SU - 0 0 1,000 1,000
CASSIDY, DENNIS E. CASSIDY, DENNIS SR. MGMT. TA 20,000 2475 5,025 7,500
CASSIDY, GERARD S. CASSIDY, GERARD TA - RESEARCH TA 20,000 1980 4,020 6,000
CASSlNELLI, ROBERT D. CASSINELLI, BOB SR. MGMT. TA 10,000 825 1,675 2,500
CENTA, DAVE CENTA, DAVE TA - FIXED INC. TA - 0 0 1,000 1,000
CERANKOWSKY JR., CHARLES CERANKOWSKY, CHARLES TA- RESEARCH TA 15,000 1485 3,015 4,500
CHABRIER, RUSS CHABRIER, RUSS FRESNO SU - 0 0 1,000 1,000
CHAO, HECTOR E. CHAO, HECTOR SU - BANKING SU 2,500 124 251 375
CHARCHENKO, DOUGLAS L. CHARCHENKO, DOUG SU - PUB FINANCE SU 7,500 536 1,089 1,625
CHEEK IV, LESLIE CHEEK, LES TA - BANKING TA 7,000 693 1,407 2,100
TA C/F CHIROS, MICHAEL F. CHIROS, MICHAEL BOSTON TA 3,350 221 449 670
CHUNG, BENNET CHUNG, BENNET OAKLAND SU - 0 0 1,000 1,000
CHUNG, JOHN H CHUNG, JOHN SU - LEGAL SU 3,500 173 352 525
CLAGHORN III. JOHN W. CLAGHORN, JOHN NY FIFTH AVE TA 10,000 1320 2,680 4,000
CLARK, RICHARD H. AND
HILARY WICKERSHAM CLARK, RICHARD SU - PUB FINANCE SU 3,500 173 352 525
TTEES FBO RICHARD CLARK &
HILARY WICKERSHAM TR CLARK, RICHARD SU 0 0 -
CLEMENT, BRIAN J. CLEMENT, BRIAN PORTLAND, ME TA 5,350 432 878 1,310
CLIFFORD, ROBERT C. CLIFFORD, BOB SU - JUDA SU 5,000 248 503 750
COHEN, DEBRA F. COHEN, DEBRA LAS VEGAS SU 3,350 221 449 670
COHEN, HEIDI COHEN, HEIDI GABRIELE TA 2,500 198 402 600
COHEN, ROBERT A. COHEN, ROBERT NY FIFTH AVE TA 3,950 333 677 1,010

</TABLE>

Page 2
<PAGE> 57

TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

COLBERG, KENT S. COLBERG, KENT BEVERLY HILLS SU 3,350 376 764 1,140
COLBY, DYLAN COLBY, DILLON LOS ANGELES SU 5,000 330 670 1,000
COLBY,TREVOR B. COLBY, TREVOR LOS ANGELES SU 5,000 330 670 1,000
COLLINS, MARY E. COLLINS, MARY E. LA JOLLA SU - 0 0 1,000 1,000
CONDE III, WILLIAM W. CONDE, SANDY WATERTOWN TA 6,300 617 1,253 1,000 2,870
CONGDON, BRAD TA 0 0 1,000 1,000
COOPER, STUART T. COOPER, STUART HARTFORD TA 5,500 594 1,206 1,800
COSTIKYAN, KENT TA 0 0 1,000 1,000
CRAMER, MOLLY ROGERS CRAMER, MOLLY TA - RETAIL TA 2,500 330 670 1,000
CRAMER, ROBERT E. CRAMER, ROBERT TA - BANKING TA 2,500 248 503 750
CRANE, DANIEL CRANE, DANIEL WOODLAND HILLS SU 5,000 330 670 1,000
SUTRO C/F CRAWFORD, ROBERT S. CRAWFORD, ROBERT TUCSON SU 6,200 627 1,273 1,900
CREBER, JANE T. CREBER, JANE TA -INST. EQUITY TA 2,500 124 251 375
CROWE JR., ROBERT E. CROWE, BOB SU - FIXED INC. SU 12,500 784 1,591 2,375
CURTIS, NICHOLAS CURTIS, NICK TA - OTC TRADING TA 3,500 124 251 375
SUTRO C/F CUSHING, STEPHEN CUSHING, STEVE WOODLAND HILLS SU 3,500 231 469 700
TA C/F DALTON, DAVID F. DALTON, DAVE WORCESTER TA 7,600 502 1,018 1,000 2,520
D'AMBROSIO, ROBERT TA 0 0 1,000 1,000
DANELLO, JOHN J. DANELLO, JOHN SR. MGMT. FR 10,000 495 1,005 1,500
DAY, ROBERT TA 0 0 1,000 1,000
DEBIASE, DONALD A. DEBIASE, DON SPRINGFIELD TA 7,100 611 1,240 1,000 2,850
DE GREGORIO, RICHARD A. DEGREGORIO, RICHARD BOSTON TA 7,000 627 1,273 1,900
DELANEY, MARY JANE DELANEY, MARY JANE SR. MGMT. SU 10,000 1650 3,350 5,000
DEL GRECO, PETER A. DELGRECO, PETER FREEDOM CAP FR 6,000 297 603 900
DEMAYO, WILLIAM TA 0 0 1,000 1,000
DENARDO, WILLIAM H. DENARDO, BILL PHILADELPHIA TA 3,000 297 603 900
DEUSCHEL, VINCENT DEUCHEL, VINCE TA - FIXED INC. TA - 0 0 1,000 1,000
TA C/F DEVINS, MARY JANE DEVINS, JIM BOSTON TA 5,700 528 1,072 600
DEVITO, ANTHONY TA 0 0 1,O00 1,000
DEVLIN, JOHN R. DEVLIN, JOHN ROME TA 5,200 396 804 1,000 2,200
DITTRICH, SCOTT W. DITTRICH, SCOTT FRANKLIN TA 5,000 503 1,022 1,525
DODGE, DEXTER A. DODGE, DEXTER SR. MGMT. FR 13,500 1485 3,015 4,500
DONAHUE, DAVID W. DONAHUE, DAVE BOSTON TA 3,600 413 838 1,250
DONOHUE, MARK G. DONOHUE, MARK GABRIELE TA 20,000 1980 4,020 6,000
DOOLEY, BRIAN SU 0 0 1,000 1,000
DOSHIER, DAVID AND LISA DOSHIER, DAVE SU - FIXED INC. SU 2,500 124 251 375
DOTTRINA, LOU TA 0 0 1,000 1,000
DOUGHERTY, KEN TA 0 0 1,000 1,000
SUTRO C/F DREITZLER, LORN T. DREITZLER, LORN SU - MANAGERS SU 2,500 165 335 1,000 1,500
TA C/F DROUGHT, BRIAN D. DROUGHT, BRIAN PROVIDENCE TA 2,500 124 251 375
DUNN, KEVIN J. DUNN, KEVIN SR. MGMT. TA 40,000 6600 13,400 20,000
DURGIN JR., EUGENE J. DURGIN, GENE FREEDOM CAP FR 4,000 198 402 600
EAGLES, LOREN TA 0 0 1,000 1,000
EDWARDS, FRANK SU 0 0 1,000 1,000
EDWARDS, HILARY G. EDWARDS, HILARY TA - INST. EQUITY TA 2,500 124 251 375
EGBERT, WILLIAM F. EGBERT, BILL JHCC TA 2,500 124 251 375
SUTRO C/F EISELE, JOHN W. EISELE, JOHN SR. MGMT. SU 22,500 3960 8,040 12,000
EMPLE, ROBERT K. EMPLE, ROBERT PORTLAND TA 2,500 165 335 500
DOWNING, JANET L. ENGELS, JANET DOWNING TA - RETAIL TA 3,000 165 335 500
TA C/F ENGLISH III, JAMES ENGLISH, JIM TA - MANAGERS TA 2,500 165 335 1,000 1,500
EPSTEIN, BARBARA B. EPSTEIN, BARBARA NY FIFTH AVE TA 4,400 363 737 1,100

</TABLE>

Page 3

<PAGE> 58
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

ETERGINO, ANNE MARIE ETERGINO, ANNE MARIE WASHINGTON TA 8,700 1122 2,278 3,400
ETZEL JR., DAVID P. ETZEL, DAVE NEW HAVEN TA 4,700 479 972 1,450
EVANS II, CHARLES A. EVANS, CHUCK SAN JOSE SU 5,000 375 760 1,135
EVANS, PAUL S. EVANS, PAUL BOSTON TA 4,450 545 1,106 1,650
SUTRO C/F FAIERMAN, EUGENE D. FAIERMAN, GENE WOODLAND HILLS SU 2,500 165 335 500
FALKOWSKI, MATTHEW P. FALKOWSKI, MATT SRINGFIELD TA 4,200 363 737 1,100
FALLENTINE, MIKE FALLENTINE, MIKE SANTA ROSA SU - 0 0 1,000 1,000
FARRELL, ROBERT FARRELL, ROBERT NY WORLD FIN TA - 0 0 1,000 1,000
FARRELL, THOMAS H. AND
LETHA D. CO-TTEES FARRELL, THOMAS SU 2,500 165 335 500
FARRELL FAMILY TRUST FARRELL, THOMAS SU 0 0 -
FEDOWITZ, MARGARET M. FEDOWITZ, MARGE TA - MISC./SYND TA 5,000 248 503 750
FELDMAN, JOEL P. FELDMAN, JOEL PHILADELPHIA TA 2,500 271 549 820
FELDMAN, WENDY FELDMAN, WENDY LA, JOLLA SU 5,600 370 750 1,120
FELLIS, PAUL FELLIS, PAUL TA - MANAGERS TA 2,500 165 335 1,000 1,500
FERRERO, RICHARD SU 2,500 165 335 500
FINK, PETER SU 0 0 1,000 1,000
FLEMING, GERALD S. FLEMING, JERRY SU - RESEARCH SU 15,000 990 2,010 3,000
FLYNN, THOMAS K. FLYNN, TOM NEW BEDFORD TA 3,350 429 871 1,000 2,300
SUTRO C/F FORST, DENNIS I. FORST, DENNIS SU - RESEARCH SU 6,500 429 871 1,300
FORSTER II, RAYMOND R. FORSTER, RAY BOSTON TA 5,350 363 737 1,100
TA C/F FOSS, JAMES S. FOSS, JIM TA - MISC./SYND TA 5,000 548 1,112 1,660
FOSTER, EVERETT G., JUDITH
J. FOSTER, JOHN B. FOSTER, EVERETT WATERTOWN TA 14,600 1485 3,015 1,000 5,500
JOHNSON JR. & EVERETT G.
FOSTER CO-TTEES
EVERETT G. FOSTER
LIVING TR FOSTER, EVERETT TA 0 0
FRANKS, MYRON SU 0 0 1,000 1,000
FROST, BRADFORD TA 0 0 1,000 1,000
FUIKS, LEWIS J. FUIKS, L.J. ITA - BANKING TA 25,000 2475 5,025 7,500
FURE, TIM TA 0 0 1,000 1,000
TA C/F G. ABRIELE, JOSEPH GABRIELE, JOE GABRIELE TA 9,900 726 1,474 1,000 3,200
GALEAZZI JR., DINO GALEAZZI, DINO SU - OTC SU 2,500 124 251 375
TA C/F GALLAGHER, SEAN K. GALLAGHER, SEAN GARDEN CITY TA 3,950 264 536 1,000 1,800
GAMBOA, MARTIN SU 0 0 1,000 1,000
GEASLEN, DAVID ALLEN GEASLEN, DAVE SU - MANAGERS SU - 0 0 1,000 1,000
GENTILE, RALPH P. AND
ALICE M. JT/WROS GENTILE, RALPH NEW HAVEN TA 2,500 218 442 660
GERARD, CONRAD GERARD, CONRAD TA - FIXED INC. TA 0 0 1,000 1,000
GERLICH, TERRENCE GERLICH, TERRY FREEDOM CAP FR 6,000 297 603 900
GIANARIS, ZACHARY G. GIANARIS, ZACK BOSTON TA 6,850 528 1,072 1,600
GIARRUSSO, JUDEE TA 0 0 1,000 1,000
GIES, RON GIES, RON SU- FIXED INC. SU 0 0 1,000 1,000
GIGLIO, PAUL G. GIGLIO, PAUL BOSTON TA 5,350 363 737 1,100
GILLIGAN, THOMAS E. GILLIGAN, TOM TA - ACCOUNTING TA 5,000 248 503 750
GILMAN, MICHAEL SU 0 1,000 1,000
GIORDANO, ANTHONY F. GIORDANO, TONY TA - MANAGERS TA 2,500 124 251 375
GOLDMAN, DAVID N. GOLDMAN, DAVE HARTFORD TA 3,650 429 871 1,300
GOLDSMITH, JOHN H. GOLDSMITH, JOHN SR. MGMT. 60,000 9900 20,100 30,000
GOODMAN, MARK SU 0 0 1,000 1,000
GOODRICH, GARY B. GOODRICH, GARY SU - RETAIL SU 7,000 462 938 1,000 2,400
TA C/F GRADY, KEVIN E. GRADY, KEVIN N Y FIFTH AVE TA 3,250 272 553 825
TA C/F GRAHAM, ANDREAS P. GRAHAM, ANDY TA - BANKING TA 10,000 495 1,005 1,500
GREEN, DAVID V. GREEN, DAVE TA - ACCOUNTING TA 2,500 124 251 375
GRIJALVA, DON P. GRIJALVA, DON SAN JOSE SU 2,500 432 878 1,310
SUTRO C/F GUILLOU SR., JAMES B. GUILLOU, JIM SU - MANAGERS SU 10,000 660 1,340 1,000 3,000

</TABLE>

Page 4

<PAGE> 59

TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

GUTHRIE, QUINTUS A. GUTHRIE, BUD LOS ANGELES SU 6,200 1089 2,211 3,300
HAEGELIN, STEVEN HAEGLIN, STEVE SU - BANKING SU 2,500 124 251 375
SUTRO C/F HALE, DOUGLAS HALE, DOUG SU - OTC SU 2,500 124 251 375
HALLING, DAVID SU 0 0 1,000 1,000
HALLORAN, ANNA MARIE HALLORAN, ANNA SU - BANKING SU 2,500 124 251 375
HALPERN, KENNETH SU 0 0 1,000 1,000
HAMILTON, ANNA C. HAMILTON, ANNA TA - MANAGERS TA 5,000 248 503 1,000 1,750
SUTRO C/F HAMILTON, MARK B. HAMILTON, BEN LAS VEGAS SU 4,500 297 603 900
HAMILTON, LINDA TA 0 0 1,000 1,000
HAMMANN, THOMAS B. HAMMANN, TOM SU - MANAGERS SU 2,500 165 335 1,000 1,500
HANSEL, CHARLES TA 0 0 1,000 1,000
TA C/F HARRIS, JAMES B. HARRIS, J J BOSTON TA 7,700 825 1,675 2,500
HASTINGS, JOHN M. HASTINGS, JOHN TA - PUB FINANCE TA 2,500 124 251 375
HAYES JR., JOHN A. HAYES, JOHN BOSTON TA 10,000 759 1,541 2,300
HAYES, RAYMOND J. HAYES, RAY N Y FIFTH AVE TA 7,000 660 1,340 2,000
HEATH, DARWIN HEATH, DARWIN BOSTON TA - 0 0 1,000 1,000
HEINZ, CURTIS HEINZ, CURT SU - OTC SU 2,500 124 251 375
HESS, GREGORY TA 0 0 1,000 1,000
HICKEY, CHRISTINE HICKEY, CHRISTINE TA - MISC./SYND TA 2,500 264 536 800
HIGHFIELD III, JOHN W. HIGHFIELD, JOHN TA - FLOOR TA 2,500 124 251 375
HOCHHAUSER, STANLEY M. HOCHHAUSER, STANLEY NY WORLD FIN TA 26,550 2290 4,650 2,000 8,940
HODGKINS, DOTTIE TA 0 0 1,000 1,000
HOFFMAN, DONALD P. HOFFMAN, DON HARTFORD TA 5,000 528 1,072 1,600
SUTRO C/F HONIBALL, ROBERT S. HONIBALL, BOB FRESNO SU 5,050 333 677 1,000 2,010
HOOLEY JR., HERBERT C HOOLEY, CHIP SYRACUSE TA 2,500 231 469 700
HORGAN, DANIEL SU 0 0 1,000 1,000
TA C/F HOWE, RICHARD V. HOWE, RICHARD FREEDOM CAP FR 6,000 297 603 900
HOWLEY, PATRICK J. HOWLEY, PAT TA - LEGAL TA 2,500 198 402 600
HRISTON, LUKE TA 0 0 1,000 1,000
HUBBARD, CHARLES W. HUBBARD, BILL SAN JOSE SU 21,850 1381 2,804 1,000 5,185
TA C/F HUGHES, JAMES S. HUGHES, JIM NEW BEDFORD TA 4,200 594 1,206 1,000 2,800
HULSMAN, GAVIN D. HULSMAN, GAVIN LOS ANGELES SU 4,800 386 784 1,170
HUMPHREYS, RONALD HUMPHREYS, RONALD TA - INST. EQUITY TA 3,500 180 365 545
SUTRO C/F HUTTON, JAMES B. ' HUTTON, JAMES SU 2,500 165 335 500
IRVING, BOB TA 0 0 1,000 1,000
ISACK, FILIP ISACK, FILIP SAN FRANCISCO SU 10,950 726 1,474 2,200
IVEY, PHILIP M. IVEY, PHIL TA - BANKING TA 2,500 248 503 750
JACKSON, CARRIE SU 0 0 1,000 1,000
JAEGER, JONATHAN TA 0 0 1,000 1,000
JENNINGS, MICHAEL C. JENNINGS, MIKE BOSTON TA 8,000 858 1,742 2,600
JICK, THEODORE S. JICK, THEO BOSTON TA 4,800 363 737 1,100
JODICE, MARY TA 0 0 1,000 1,000
JOHANSEN, ALAN J. JOHANSON, ALAN SU - RETAIL SU 4,000 264 536 1,000 1,800
TA C/F JOHNSON JR., GAYLORD M. JOHNSON, BUCKY PORTLAND, ME TA 6,300 693 1,407 2,100
JUDA, FELIX TRUSTEE
JUDA LIVING TRUST JUDA, FELIX SU - JUDA SU 8,000 396 804 1,200
JUDA, TOM TRUSTEE TOM &
NANCY JUDA LVG TR JUDA, TOM SU - JUDA SU 47,500 3300 6,700 10,000
JUSICK, STEPHEN F. JUSICK, STEVE PRINCETON TA 2,500 231 469 1,000 1,700
JUTROWSKI, EMIL J. JUTROWSKI, EMIL NY WORLD FIN TA 2,500 188 382 570
KABOT, JEFFREY D. KABOT, JEFF SU - BANKING SU 3,000 124 251 375
TA C/F KANE JR., CHARLES F. KANE, CHARLES BOSTON TA 3,500 330 670 1,000
KANE, RICHARD TA 0 0 1,000 1,000

</TABLE>

Page 5

<PAGE> 60
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

KARMAZIN, STEVE SU 0 0 1,000 1,000
KATZNER, DANIEL KATZNER, DAN TA - ARBITRAGE TA 12,500 4125 8,375 12,500
KELLEHER, STEPHEN T. KELLEHER, STEVE SU - FIXED INC. SU 12,500 825 1,675 2,500
TA C/F KELLY, EDWARD JOSEPH KELLY, JOE STAMFORD TA 11,450 693 1,407 1,000 3,100
KELLY, KEVIN SU 0 0 1,000 1,000
KENDALL, PETER G. KENDALL, PETER SU - FIXED INC. SU 2,500 124 251 375
KENNEDY, DANIEL P. KENNEDY, DAN TA - MANAGERS TA 2,500 124 251 1,000 1,375
KERLEY, PHILLIP TA 0 0 1,000 1,000
KERSHNER, MITCHELL R. KERSHNER, MITCH GABRIELE TA 5,000 495 1,005 1,500
KIERNAN JR., EDWARD F. KIERNAN, EDWARD TA - OTC TRADING TA 2,500 124 251 375
KIRBY, DUNCAN R. KIRBY, DUNCAN NEWPORT BEACH SU 2,500 350 710 1,060
KIRKORIAN, LEONARD KIRKORIAN, LEONARD SU - MANAGERS SU 0 0 1,000 1,000
TA C/F KIRSHBAUM, LAWRENCE G. KIRSHBAUM, LARRY TA - ACCOUNTING TA 20,000 1980 4,020 6,000
KLEEHAMMER, WENDEL TA 0 0 1,000 1,000
TA C/F KLEIN, BERNARD KLEIN, BERNIE TA - FLOOR TA 5,000 248 503 750
KOHLI, HARINDER S. KOHLI, HARRY SAN JOSE SU 5,000 554 1,126 1,680
KOKINS, PETER L. KOKINS, PETER TA - OTC TRADING TA 7,500 380 771 1,150
KORCH, KIETH KORCH, KIETH WORCESTER TA - 0 0 1,000 1,000
KOSAR, BRIAN J. KOSAR, BRIAN SUTRO - MISC/SYND SU 10,000 660 1,340 2,000
KRAUS, ARNOLD H. KRAUS, ARNOLD TUCSON SU 9,450 726 1,474 1,000 3,200
TA C/F KRAUSS, PHILIP DAVID KRAUSS, PHILIP GABRIELE TA 3,000 241 489 730
KRAWCZYK, RICHARD A. KRAWCZYK, DICK NASHUA TA 4,800 726 1,474 2,200
LABARTHE, JEFF SU 0 0 1,000 1,000
LADD, CARLETON R. LADD, CARL BOSTON TA 4,700 693 1,407 2,100
TA C/F LA ROCCO, WILLIAM LAROCCO, BILL TA - FIXED INC. TA 2,500 165 335 500
LARSEN, CHUCK LARSEN, CHUCK LOS ANGELES SU - 0 0 1,000 1,000
LAUBSCHER, HAROLD W. LAUBSCHER, HARRY TA - MISC/SYND TA 2,500 165 335 500
LAUGHLIN, LEIGHTON H. LAUGHLIN, LEIGHTON PRINCETON TA 8,000 908 1,843 1,000 3,750
LEE, CHOO-BENG LEE, C.B. SU - RESEARCH SU 5,000 330 670 1,000
LEE, ROBERT TA 0 0 1,000 1,000
LEHRER, ROBERT M.
AND NANCY M. LEHRER, BOB TA - ARBITRAGE TA 25,000 8250 16,750 25,000
LEITH, ALEXANDER LEITH, SANDY BOSTON TA 7,500 891 1,809 2,700
LENT, JEFFREY D. LENT, JEFF BOSTON TA 5,000 330 670 1,000
LESTER, BERNADETTE SU 0 0 1,000 1,000
LEYDEN, PAUL J. LEYDEN, PAUL TA - MANAGERS TA 2,500 124 251 1,000 1,375
LIEBERMAN, PAUL A. LIEBERMAN, PAUL TA - LEGAL TA 2,500 198 402 600
LINN, KURTIS SU 0 0 1,000 1,000
LITTLE, JEFFREY PAGE LITTLE, JEFF PORTSMOUTH TA 5,050 380 771 1,000 2,150
SUTRO C/F LOHBECK, RONALD LOHBECK, RON SAN JOSE SU 5,000 330 670 1,000
TA C/F LOVEJOY, LEE LOVEJOY, LEE TA - MANAGERS TA 5,000 330 670 1,000 2,000
LUBIC, ARTHUR M. LUBIC, ART BEVERLY HILLS SU 2,500 224 456 680
LUIKART, JOHN F. LUIKART, JACK SR MGMT. SU 50,000 8085 16,415 24,500
LUNEBERG, ROBERT H. LUNEBERG, BOB TA - MANAGERS TA 5,000 330 670 1,000 2,000
LYNCH, GERALD R. LYNCH, GERRY TA - MANAGERS TA 2,500 165 335 1,000 1,500
MACARTHUR, SCOTT SU 0 0 1,000 1,000
MADSEN, DANE MADSEN, DANE SU - MANAGERS SU 2,500 165 335 1,000 1,500
MAIN, GEORGE SU 0 0 1,000 1,000
MANGANELLI, PAUL MANGANELLI, PAUL SU - MANAGERS SU 2,500 124 251 375
MANNA, CARL MANNA, CARL SACRAMENTO SU - 0 0 1,000 1,000
MARANDETT, PAUL F. MARANDETT, PAUL FREEDOM CAP FR 2,500 124 251 375
MARRONE; JOHN MARRONE, JOHN SU - MANAGERS SU 2,500 165 335 1,000 1,500

</TABLE>

Page 6
<PAGE> 61

TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

MASIELLO, STEPHEN FR 1,000 1,000
MATTALIANO, JOSEPH P. MATTALIANO, JOE TA - INST. EQUITY TA 5,000 248 503 750
MCANDREWS JR.,JAMES J. MCANDREWS, JAMIE TA - INST. EQUITY TA 4,100 0 0 -
TA C/F MCANDREWS JR., JAMES J. MCANDREWS, JAMIE TA - INST. EQUITY TA 15,900 990 2,010 3,000
TA C/F MCCARTHY, ARTHUR E. MCCARTHY, ART BOSTON TA 13,200 1518 3,082 4,600
MCCARTHY, BRIAN TA 0 0 1,000 1,000
MCDANIEL, LAWRENCE SU 0 0 1,000 1,000
MCDONOUGH, MICHAEL S. MCDONOUGH, MIKE SACRAMENTO SU 3,650 307 623 930
MCGARRY, PATRICK TA 0 0 1,000 1,000
MCGEE, GREGG P. AND
MARY C. KEATING MCGEE, GREGG NY WORLD FIN TA 2,500 264 536 800
MACGILVRAY, SCOT D, MCGILVRAY, SCOT TA - BANKING TA 3,000 297 603 900
MCGRATH, IRENE P. &
STEPHEN W. SCHWEIRHART MCGRATH, IRENE NY WORLD FIN TA 5,000 495 1,005 1,500
MCKAY, KEVIN J. MCKAY, KEVIN SR. MGMT. TA 27,500 5280 10,720 16,000
TA C/F MCKEE, CHARLES D. MCKEE, CHARLIE PORTLAND, ME TA 6,300 644 1,307 1,950
MCKEE, PEIRCE MCKEE, PEIRCE OAKLAND SU - 0 0 1,000 1,000
MCKEE, SABRINA L. MCKEE, SABRINA TA - INST. EQUITY TA 2,500 124 251 375
MCMASTER, MIKE TA 0 0 1,000 1,000
TA C/F MEADE, THOMAS F. MEADE, TOM GARDEN CITY TA 7,850 518 1,052 1,570
MECOLI, ANTHONY P. MECOLI, TONY SU - OTC SU 2,500 124 251 375
SUTRO C/F MEEK, LYLE L. MEEK, LYLE SAN LUIS OBISPO SU 3,350 277 563 1,000 1,840
MELMAN, MICHAEL J. MELMAN, MIKE FAIRHAVEN TA 5,900 389 791 1,180
MENCHEL, MARC MENCHEL, MARC TA - LEGAL TA 10,000 990 2,010 3,000
TA C/F MESSALINE, DAVID J. MESSALINE, DAVE BOSTON TA 10,000 1122 2,278 3,400
METTER, DENNIS METTER, DENNIS CHICAGO TA - 0 0 2,000 2,000
METZ, BRIAN TA 0 0 1,000 1,000
MICERA, JOHN P. MICERA, JOHN GABRIELE TA 30,350 3185 6,466 9,650
MICHAELS, EDWARD TA 0 0 2,000 2,000
MILLS, ROBERT A. MILLS, ROCKY SU - MANAGERS SU 11,500 759 1,541 1,000 3,300
MINEHAN, RAYMOND J. MINEHAN, RAY SU 10,000 1980 4,020 6,000
TA C/F MIRANDA, TODD M. MIRANDA, TODD TA - RETAIL TA 2,500 132 268 400
TA C/F MOHAN, NATESH C. MOHAN, NAT TA - M.I.S. TA 3,000 149 302 450
MOITZ, BILL TA 0 0 1,000 1,000
MONAHAN, STEPHEN T. MONAHAN, STEVE WILTON, CT TA 4,200 393 797 1,190
MOON, BILL MOON, BILL SU - OTC SU 2,500 124 251 375
MOORE JR., CHARLES MOORE, CHARLIE SU - FIXED INC. SU 3,500 173 352 525
MORAN, DOUGLAS A, MORAN, DOUG NY WORLD FIN TA 3,350 221 449 670
MORI, ARTHUR MORI, ARTHUR OAKLAND SU - 0 0 1,000 1,000
MORRIS, JOHN M. MORRIS, JOHN SU - BANKING SU 12,000 924 1,876 2,800
MORTON, THOMAS MORTON, SKIP TA - RETAIL TA 2,500 165 335 500
MOSBERG, ROBERT MOSBERG, BOB TA - ARBITRAGE TA 30,000 3960 8,040 12,000
MUDARRI, JOSEPH G. MUDARRI, JOE BOSTON TA 3,950 743 1,508 2,250
MULLIGAN, HARRY TA 0 0 1,000 1,000
MULLIN, LEO R. AND
PATRICIA L. MULLIN
JTWROS MULLIN, LEO BURLINGTON TA 4,200 432 878 1,310
MULLIN, EDWARD & LUCINDA
COOKE MULLIN MULLIN, WOODY NY WORLD FIN TA 4,800 518 1,052 1,570
MUNTER, DAN MUNTER, DAN BEVERLY HILLS SU 2,500 190 385 575
MURPHY, JOHN TA 0 0 1,000 1,000
MURPHY, MARK TA 0 0 1,000 1,000
MURPHY, MICHAEL J. MURPHY, MIKE BOSTON TA 5,050 446 905 1,350
MURRAY, ROBERT SU 0 0 1,000 1,000
MURTHA, JEFFREY L. MURTHA, JEFF PORTLAND, ME TA 4,800 403 817 1,220
MUTTERPERL, MURIEL TA 0 0 1,000 1,000

</TABLE>

Page 7

<PAGE> 62
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

TA C/F MYERS, THEODORE W. MYERS, TED PHILADELPHIA TA 2,500 165 335 500
NASH, THOMAS J. NASH, TOM TA - MANAGERS TA 20,000 990 2,010 2,000 5,000
SUTRO C/F NESBIT, BRUCE D. NESBITT, BRUCE SU - JUDA SU 2,500 124 251 375
SUTRO C/F NISSIM, MATOOK R. NISSIM, M. SU 2,500 165 335 500
NOLAN, JAMES D. NOLAN, JIM BURLINGTON TA 10,000 660 1,340 1,000 3,000
NYDEGGER, RICHARD NYDEGGER, DICK SOUTHAMPTON TA 15,000 1452 2,948 1,000 5,400
O'BRIEN, C. DAVID O'BRIEN, DAVE TA - INST. EQUITY TA 5,000 248 503 750
O'DELL, BRIAN FR 0 0 1,000 1,000
OGLE, DAVID H. OGLE, DAVID FREEDOM CAP FR 3,500 198 402 600
OHANIAN, ABE S. OHANIAN, ABE LOS ANGELES SU 5,900 1109 2,251 3,360
OLSEN, CHRISTIANE OLSEN, CHRIS GABRIELE TA 6,750 584 1,188 1,770
OLSON, JOSEPH &
PATRICIA OLSON OLSON, JOE SU - FIXED INC. SU 2,500 124 251 375
O'NEILL, ROBERT F. O'NEILL, ROBERT TA - RETAIL TA 10,000 660 1,340 2,000
OSTEHAUS, NED TA 0 0 1,000 1,000
OVERSTREET, LISA SU 0 0 1,000 1,000
PABST, ROBERT E. PABST, BOB TA - FIXED INC. TA 2,500 124 251 375
PALLIN, JOHATHON SU 0 0 1,000 1,000
PALMER, ARNOLD PALMER, ARNOLD SU - JUDA SU 10,000 660 1,340 2,000
TA C/F PALMER, JAMES W. PALMER, JIM MORRISTOWN TA 4,500 528 1,072 1,600
PASKAL, STEVEN TA 0 0 1,000 1,000
PATANE, VICTOR J. PATANE, VIC TA - PUB FINANCE TA 2,500 124 251 375
PATE, ROBERT A. PATE, BOB LAS VEGAS SU 3,000 198 402 600
PATEL, RAMESH C. PATEL, RAMESH TA - ACCOUNTING SU 2,500 124 251 375
PEARSON IV, JONATHAN PEARSON, JON SCHENECTADY TA 5,600 627 1,273 1,900
PEER, MIKE PEER, MIKE TA - FIXED INC. TA 2,500 124 251 375
PERVERE, FRANCIS D. PERVERE, JACK HARTFORD TA 3,350 446 905 1,350
PETERSON, ROBERT PETERSON, ROBERT CHICAGO TA 0 0 2,000 2,000
PHILLIPPE, JOHN R. PHILLIPPE, DICK SCHENECTADY TA 4,600 429 871 1,000 2,300
PHILLIPS, JERRY D. &
CARLA CROSS PHILLIPS PHILLIPS, JERRY SR. MGMT. SU 22,500 3960 8,040 12,000
PHIPPS, GREG PHIPPS, GREG SU - RETAIL SU - 0 0 1,000 1,000
PICKELL, CURT TA 0 0 1,000 1,000
PIKE, JAMES PIKE, JIM SAN FRANCISCO SU 4,200 277 563 840
PINTO, MARK AND LISA PINTO, MARK SU - FIXED INC. SU 7,000 347 704 1,050
PORCELLI, DEBORAH TA 0 0 1,000 1,000
TA C/F PRINZIVALLI, JOSEPH G. PRINZIVALLI, JOE TA - FIXED INC. TA 5,000 248 503 750
RAAKA, SCOTT SU 0 0 1,000 1,000
RAY, JENNA TA 0 0 2,000 2,000
REED, FRAN TA 0 0 1,000 1,000
REEDY, MONTY SU 0 0 1,000 1,000
REGAN, KATHLEEN REGAN, KATHY TA- BANKING TA 15,000 1485 3,015 4,500
RENDALL, DOUGLAS B. RENDALL, DOUG PRINCETON TA 3,350 363 737 1,100
RENDALL JR., JAMES H. RENDALL, JIM PRINCETON TA 4,200 726 1,474 2,200
RICE, MARK C. RICE, MARK SU - JUDA SU 10,000 660 1,340 2,000
RICH, PAUL RICH, PAUL TA - FIXED INC. TA 2,500 124 251 375
RICHARDSON, PATRICIA L. RICHARDSON, PATTY SU - JUDA SU 2,500 124 251 375
RICHTER, STEVEN A. RICHTER, STEVE TA - RESEARCH TA 2,500 124 251 375
RIDGE, JOHN J. RIDGE, JODY TA - FLOOR TA 5,000 248 503 750
RIDGE, THOMAS V. RIDGE, THOMAS TA - OTC TRADING TA 22,500 2970 6,030 9,000
RIDPATH, JOHN P. RIDPATH, JOHN TA - INST. EQUITY TA 2,500 124 251 375
RIGATTI, TOM SU 0 0 1,000 1,000
TA C/F RIPP, ROBERT H. RIPP, ROBERT BOSTON TA 4,150 281 570 850

</TABLE>

Page 8
<PAGE> 63
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

TA C/F ROBERTS, JOSEPH T. ROBERTS, JOE BOSTON TA 8,550 990 2,010 3,000
RODRIGUEZ, FERNANDO E. RODRIGUEZ, FRED TA - M.I.S. TA 2,500 124 251 375
TA C/F ROEDER, LEE ROEDER, LEE TA - MANAGERS TA 10,000 495 1,005 1,000 2,500
ROGAN, JACK ROGAN, JACK ROCHESTER TA 2,500 218 442 660
ROMAN, WILLIAM E. &
DEBORAH C. ROMAN, BILL TA - BANKING TA 25,000 2475 5,025 7,500
ROMANO, CHRISTOPHER ROMANO, CHRIS TA - ACCOUNTING TA 2,500 124 251 375
ROSEN, ARTHUR TA 0 0 1,000 1,000
ROSENBERG, MARC ROSENBERG, MARC SAN FRANCISCO SU - 660 1,340 2,000
ROUSE, MICHAEL J. ROUSE, MIKE TA - FLOOR TA 2,500 124 251 375
ROWLAND, EDWARD S. ROWLAND, NED BOSTON TA 3,650 505 1,025 1,530
ROY, STEVEN P. ROY, STEVE SU - MANAGERS SU 4,000 264 536 800
RUBANO, ALEX TA 0 0 1,000 1,000
RUBIN, REED RUBIN, REED NY FIFTH AVE TA 2,500 314 637 950
RUIMERMAN, J. FRANCIS RUIMERMAN, FRANK HARTFORD TA 11,200 710 1,441 2,000 4,150
RULISON, MICHAEL E. RULISON, MIKE SYRACUSE TA 9,700 941 1,910 1,000 3,850
RUSH, GREGORY R. RUSH, GREG TA - BANKING TA 7,000 693 1,407 2 100
RUSSELL, MARK TA 0 0 1,000 1,000
SAGOUSPE, KENT SU 0 0 1,000 1,000
SALTER, LOU TA 0 0 1,000 1,000
SAMPSON, ROBERT P. SAMPSON, BOB TA - MANAGERS TA 8,500 561 1,139 1,000 2,700
SANDERSON, DEREK FR 0 0 1,000 1,000
SARGIS, RON SARGIS, RON CHICAGO TA - 0 0 2,000 2,000
SAVAGE, MIKE TA 0 0 1,000 1,000
SAVITSKY, VICTOR SAVITSKY, VICTOR NY WORLD FIN TA 3,350 264 536 800
SCALZO. RONALD W. SCALZO, RONALD TA - FLOOR TA 2,500 124 251 375
SCHULLER, EDWARD J. SCHULLER, ED SAN FRANCISCO SU 5,000 601 1,219 1,820
SCRANTON, SARAH H. SCRANTON, SARAH FREEDOM CAP FR 2,500 124 251 375
SEGEL, ROBERT G. SEGEL, ROBERT ROBERT SEGEL TA 41,100 4620 9,380 14,000
SHAPIRO, IRWIN H. SHAPIRO, IRWIN BEVERLY HILLS SU 2,500 165 335 500
SHARKEY, ROBERT J. SHARKEY, BOB GABRIELE TA 7,850 776 1,575 2,350
SHAW, RICHARD H. SHAW, DICK BIG BEAR, CA SU 3,500 231 469 700
SHEPARD, J. POWERS SHEPARD, J STAMFORD TA 7,200 693 1,407 2,100
SHIROCKY, JAY SHIROCKY, JAY TA - FLOOR TA 2,500 124 251 375
SUTRO C/F SILVERS, CRAIG M. SILVERS, CRAIG SU - RESEARCH SU 3,000 198 402 600
SKINNER, MICHAEL SU 0 0 1,000 1,000
SMITH, ARTHUR TA 0 0 1,000 1,000
SMITH, BEN TA 0 0 1,000 1,000
SMITH, GERALD SU 0 0 1,000 1,000
SOLOMON, LAWRENCE J. SOLOMAN, LARRY WOODLAND HILLS SU 9,850 736 1,494 2,230
SORRENTINO, ANTHONY V. SORRENTINO, ANTHONY TA - OTC TRADING TA 10,000 495 1,005 500
SPENCER, MICHAEL M. SPENCER, MIKE FREEDOM CAP FR 8,000 396 804 1,200
SQUITERI, PHILIP SQUITERI, BILL TA - OTC TRADING TA 2,500 330 670 1,000
STACK, CHARLES PATRICK STACK, PAT SU - MANAGERS SU 7,000 462 938 1,000 2,400
STAMM, MAURA TA 0 0 1,000 1,000
TA C/F STANEK SR., DENNIS J. STANEK, DENNIS HARTFORD TA 4,200 485 985 1,470
STANEK JR., DENNIS J. STANEK, DENNIS II HARTFORD TA 5,500 462 938 1,400
TA C/F STARK, STEPHEN H. STARK, STEVE NY FIFTH AVE TA 8,550 439 891 1,000 2,330
STAUNTON, JOHN TA 0 0 2,000 2,000
STEPANIK, CARL TA 0 0 1,000 1,000
TAC/F STEPHENSON, MARK STEPHANSON, MARK SU FIXED INC. SU 2,500 124 251 375
STEPHENS, THOMAS S. STEPHENS, TOM TA - INST. EQUITY TA 10,000 495 1,005 1,500

</TABLE>
Page 9
<PAGE> 64

TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

STOCKBRIDGE, CHARLES TA 0 0 1,000 1,000
STRATTON, JENNIFER TA 0 0 1,000 1,000
STRINGER, PAUL E. STRINGER, PAUL TA - M.I.S. TA 7,500 371 754 1,125
SULLIVAN, JOHN P. SULLIVAN, JOHN TA - INST. EQUITY TA 12,500 660 1,340 2,000
TANSEY, ROBERT F. TANSEY, BOB GABRIELE TA 6,450 637 1,293 1,930
THAYER, EDMUND SU 0 0 1,000 1,000
THOM, CAROL THOM, CAROL SANTA MARIA SU 5,000 330 670 1,000
THOM. NElL THOM, NElL SANTA MARIA SU 0 0 1,000 1,000
THOMAS, REBECCA SU 0 0 1,000 1,000
THWING, JARED R. THWING, JARED TA - OTC TRADING TA 2,500 330 670 1,000
TIETBOHL, JON A. TIETBOHL, JON TA - BANKING TA 25,000 2475 5,025 7,500
TILLMAN, FRED TA 0 0 1,000 1,000
TINGLE, ROBERT TA 0 0 1,000 1,000
TODD, VINCENT T. AND
KELLY TODD JTWROS TODD, VIN BOSTON TA 2,500 248 503 750
TOLLEFSON, ED SU 0 0 1,000 1,000
TOMPA, ALEXANDER
TA 0 0 1,000 1,000
TRASK, BOURKE C. TRASK, BOURKE BANGOR TA 6,000 660 1,340 1,000 3,000
TUCKER JR., DAVID &
ANN M. TTEES, TUCKER
FAMILY TRUST TUCKER JR., DAVID OAKLAND SU 7,850 1033 2,097 3,130
TUFFNELL, STUART A. TUFFNELL, STU MORRISTOWN TA 4,500 446 905 1,350
TUMINELLO, MICHAEL TUMINELLO, MICHAEL TA - RETAIL TA 8,500 825 1,675 2,500
TURANO, VINCENZO TURANO, ENZO NY FIFTH AVE TA 20,000 2310 4,690 7,000
UNDERDAHL, T. HANS UNDERDAHL, HANS PORTLAND, ME TA 2,500 205 415 620
VANDERBERG, GERARD T. VANDERBERG, JERRY TA - FIXED INC. TA 2,500 165 335 500
VARNEY, ELLEN FR 0 0 1,000 1,000
VENNARD, LAURA & THOMAS E.
MAHONY JTWROS VENNARD, LAURA TA - MISC./SYND TA 2,500 124 251 375
WALKER, JEFFREY A. WALKER, JEFF TA - ARBITRAGE TA 2,500 825 1,675 2,500
WALSH, RICHARD M. WALSH, RICK TA - FIXED INC. TA 4,000 198 402 600
WASSERMAN, MICHAEL B. WASSERMAN, MIKE BOSTON TA 4,500 366 744 1,110
WEBER, KATHY TA 0 0 1,000 1,000
VERMUT-WEINBERGER
LIVING TRUST WEINBERGER, TOM SR. MGMT. SU 22,500 4122 8,368 12,490
WEISMAN, JOHN WEISMAN, JOHN BEVERLY HILLS SU - 0 0 1,000 1,000
WENDELIN, SCOTT E. WENDELIN, SCOTT SU - BANKING SU 10,000 825 1,675 2,500
WEST, RICHARD TA 0 0 1,000 1,000
WESTON, COLLEEN SU - 0 0 1,000 1,000
WHITAKER, PAUL FR 0 0 1,000 1,000
WHITE, JOHN J. WHITE, JOHN BOSTON TA 5,600 380 771 1,150
WHITFIELD, MARGARET WHITFIELD, MARGARET TA- RESEARCH TA 0 0 2,000 2,000
WIESSONBORN, JOHN WIESSONBORN, JOHN CHICAGO TA 0 0 3,000 3,000
WILLFONG, DON WILLFONG, DON LOS ANGELES SU 16,850 3023 6,137 9,160
WILLIAMS, ALAN WILLIAMS, ALAN SU - OTC SU 7,500 495 1,005 1,500
WILLIAMS JR., ROBERT L. WILLIAMS, BOB SU - PUB FINANCE SU 4,000 330 670 1,000
WILSHINSKY, STEPHEN J. WILSHINSKY, STEVE WOODLAND HILLS SU 736 1,494 2,230
WING, JIM TA 0 0 1,000 1,000
TA C/F WING, THOMAS G. WING, TOM PROVIDENCE TA 11,800 1023 2,077 3,100
WODARK, GREG SU - 0 0 1,000 1,000
WORKMAN, WAYNE L. AND
SHARON SHAY WORKMAN, WAYNE TA - PUB FINANCE TA 7,500 371 754 1,125
YARMOLINSKY, TOBIAS YARMOLINSKY, TOBY TA - PUB FINANCE TA 2,500 124 251 375
YATES, SAMUEL SU 2,500 165 335 500
SUTRO C/F YENOFSKY, PAUL YENOFSKY, PAUL SU - MANAGERS SU 12,000 792 1,608 1,000 3,400
YEVICH, ROBERT H. YEVICH, BOB SR. MGMT. TA 50,000 8085 16,415 24,500
YOUNG, PETER SU 0 0 1,000 1,000

</TABLE>

Page 10

<PAGE> 65

<TABLE>
TUCKER ANTHONY/SUTRO
STOCK OFFERING WORKSHEET

YOUNGMAN JR., GERALD E. & CANDICE H. YOUNGMAN, GERRY CONCORD TA 2,500 228 462 1,000 1,600
TA C/F ZARRA, MICHAEL ZARRA, MIKE FAIRHAVEN TA 3,950 264 536 800
JOHN HANCOCK FREEDOM SECURITIES J. HANCOCK FREEDOM 21,850

TOTALS 2,508,600 247,500 502,499 215,000
</TABLE>

<PAGE> 1
Exhibit 10.3

================================================================================

REVOLVING CREDIT AGREEMENT
--------------------------

Dated as of November 29, 1996

among

JHFSC ACQUISITION CORP.

and

THE BANKS LISTED ON SCHEDULE 1
ATTACHED HERETO

and

THE FIRST NATIONAL BANK OF BOSTON, AS AGENT

================================================================================

<PAGE> 2

TABLE OF CONTENTS

ss.1. DEFINITIONS AND RULES OF INTERPRETATION. ............................1
ss.1.1. Definitions. ...............................................1
ss.1.2. Rules of Interpretation. ..................................15

ss.2. THE REVOLVING CREDIT FACILITY. .....................................16
ss.2.1. Commitment to Lend. .......................................16
ss.2.2. Mandatory Reductions in the Total Commitment. ............16
ss.2.3. Optional Reductions in the Total Commitment. ..............18
ss.2.4. The Notes. ................................................19
ss.2.5. Interest on Revolving Credit Loans. .......................19
ss.2.6. Requests for Revolving Credit Loans. ......................19
ss.2.7. Conversion Options. .......................................20
ss.2.7.1. Conversion to Different Type of Revolving
Credit Loan. ....................................20
ss.2.7.2. Continuation of Type of Revolving
Credit Loan. ...................................20
ss.2.7.3. Eurodollar Rate Loans. .........................20
ss.2.8. Funds for Revolving Credit Loans. .........................21
ss.2.8.1. Funding Procedures. ............................21
ss.2.8.2. Advances by Agent. .............................21

ss.3. REPAYMENT OF THE REVOLVING CREDIT LOANS. ...........................22
ss.3.1. Maturity. .................................................22
ss.3.2. Mandatory Repayments of Revolving Credit Loans. ...........22
ss.3.3. Optional Repayments of Revolving Credit Loans. ............22

ss.4. CERTAIN GENERAL PROVISIONS. ........................................22
ss.4.1. Closing Fee; Arrangement Fee. .............................22
ss.4.2. Agent's Fee. ..............................................22
ss.4.3. Commitment Fee. ...........................................22
ss.4.4. Funds for Payments. .......................................23
ss.4.4.1. Payments to Agent. .............................23
ss.4.4.2. No Offset, Etc. ................................23
ss.4.5. Computations. .............................................23
ss.4.6. Inability to Determine Eurodollar Rate. ...................23
ss.4.7. Illegality. ...............................................24
ss.4.8. Additional Costs, Etc. ....................................24
ss.4.9. Capital Adequacy. .........................................25
ss.4.10. Certificate. ..............................................26
ss.4.11. Indemnity. ................................................26
ss.4.12. Interest After Default. ...................................26
ss.4.12.1. Overdue Amounts. ..............................26
ss.4.12.2. Amounts Not Overdue. ..........................26

ss.5. SECURITY AND GUARANTIES. ...........................................27
ss.5.1. Security. .................................................27
ss.5.2. Guaranties of Subsidiaries. ...............................27
ss.5.3. Freedom Capital. ..........................................27

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-ii-

ss.6. REPRESENTATIONS AND WARRANTIES. ....................................27
ss.6.1. Corporate Authority. ......................................27
ss.6.1.1. Incorporation; Good Standing. ..................27
ss.6.1.2. Authorization. .................................27
ss.6.1.3. Enforceability. ................................28
ss.6.2. Capitalization; Subsidiaries, Etc...........................28
ss.6.3. Governmental Approvals. ...................................28
ss.6.4. Title to Properties; Leases. ..............................28
ss.6.5. Financial Statements. .....................................29
ss.6.6. No Material Changes, Etc.; Solvency. ......................29
ss.6.7. Business, Etc. ............................................30
ss.6.8. Litigation. ...............................................30
ss.6.9. No Materially Adverse Contracts, Etc. .....................30
ss.6.10. Compliance With Other Instruments, Etc. ..................30
ss.6.11. Tax Status. ..............................................31
ss.6.12. No Event of Default. .....................................31
ss.6.13. Absence of Financing Statements, Etc. ....................31
ss.6.14. Perfection of Security Interest. .........................31
ss.6.15. Certain Transactions. ....................................31
ss.6.16. Employee Benefit Plans. ..................................32
ss.6.16.1. In General. ..................................32
ss.6.16.2. Terminability of Welfare Plans. ..............32
ss.6.16.3. Guaranteed Pension Plans. ....................32
ss.6.16.4. Multiemployer Plans. .........................32
ss.6.17. Regulations U and X. .....................................33
ss.6.18. Real Estate. .............................................33
ss.6.19. Broker-Dealer Subsidiaries. ..............................34
ss.6.20. Advisory Subsidiaries. ...................................35
ss.6.21. Investment Fund Clients. .................................35
ss.6.22. Holding Company and Investment Company Acts................36
ss.6.23. Disclosure. ..............................................36
ss.6.24. Fiscal Year. .............................................36
ss.6.25. Acquisition Documents. ...................................36
ss.6.26. Other Representations; Etc. ..............................36

ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER. .............................37
ss.7.1. Punctual Payment. .........................................37
ss.7.2. Maintenance of Office. ....................................37
ss.7.3. Records and Accounts. .....................................37
ss.7.4. Financial Statements, Certificates and Information. .......37
ss.7.5. Notices. ..................................................38
ss.7.5.1. Defaults. ......................................38
ss.7.5.2. Notification of Claims Against Collateral. .....38
ss.7.5.3. Notice of Litigation and Judgments. ............38
ss.7.5.4. Claims Under Acquisition Documents. ............39
ss.7.6. Corporate Existence; Maintenance of Properties. ...........39
ss.7.7. Insurance. ................................................39

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ss.7.8. Taxes. ....................................................39
ss.7.9. Inspection of Properties and Books, Etc. ..................40
ss.7.9.1. General. ......................................40
ss.7.9.2. Communication with Accountants. ...............40
ss.7.10. Compliance with Laws, Contracts, Licenses,
and Permits. .............................................40
ss.7.11. Employee Benefit Plans. ..................................41
ss.7.12. Use of Proceeds. .........................................41
ss.7.13. Interest Rate Protection Arrangements. ...................41
ss.7.14. Additional Subsidiaries. .................................41
ss.7.15. Further Assurances. ......................................42

ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ........................42
ss.8.1. Restrictions on Indebtedness. .............................42
ss.8.2. Restrictions on Liens. ....................................44
ss.8.3. Restrictions on Investments. ..............................46
ss.8.4. Distributions. ............................................47
ss.8.5. Merger, Consolidation. ....................................47
ss.8.5.1. Mergers and Acquisitions. ......................47
ss.8.5.2. Disposition of Assets. .........................47
ss.8.6. Sale and Leaseback. .......................................48
ss.8.7. Compliance with Environmental Laws. .......................48
ss.8.8. Employee Benefit Plans. ...................................48
ss.8.9. Change in Terms of Equity Securities;
Issuance of Equity Securities by Subsidiaries. ............49
ss.8.10. Fiscal Year. ..............................................49
ss.8.11. Stockholders Agreement. ...................................49

ss.9. FINANCIAL COVENANTS OF THE BORROWER AND ITS SUBSIDIARIES. ..........49
ss.9.1. Leverage Ratio ............................................49
ss.9.2. Debt Service Coverage. ....................................49
ss.9.3. Net Worth. ................................................50
ss.9.4. Interest Coverage. ........................................50
ss.9.5. Tangible Net Capital ......................................50
ss.9.6. Subsidiary Leverage Ratio. ................................51
ss.9.7. Net Capital. ..............................................51
ss.9.8. Capital Expenditures. .....................................51

ss.10. CLOSING CONDITIONS. ................................................51
ss.10.1. Loan Documents; Acquisition Documents. ...................51
ss.10.2. Certified Copies of Charter Documents. ...................52
ss.10.3. Corporate Action. ........................................52
ss.10.4. Incumbency Certificate. ..................................52
ss.10.5. Validity of Liens. .......................................52
ss.10.6. Lien Search Certificates and UCC Search Results. .........52
ss.10.7. Certificates of Insurance. ...............................52
ss.10.8. Solvency Certificate. ....................................53
ss.10.9. Opinions of Counsel. .....................................53

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-iv-

ss.10.10. Payment of Fees. ........................................53
ss.10.11. Closing of Acquisition. .................................53
ss.10.12. Capital Contributions. ..................................53
ss.10.13. Compliance Certificate. .................................53
ss.10.14. Federal Reserve Forms U-1. ..............................53
ss.10.15. Financial Conditions. ...................................53
ss.10.16. Representations and Warranties. .........................54
ss.10.17. Proceedings and Documents. ..............................54

ss.11. CONDITIONS TO ALL BORROWINGS. ......................................54
ss.11.1. Representations True; No Event of Default. ...............54
ss.11.2. No Legal Impediment. .....................................54
ss.11.3. Governmental Regulation. .................................54
ss.11.4. Proceedings and Documents. ...............................55

ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC. ..............................55
ss.12.1. Events of Default and Acceleration. ......................55
ss.12.2. Termination of Commitments. ..............................58
ss.12.3. Remedies. ................................................58
ss.12.4. Distribution of Collateral Proceeds. .....................59

ss.13. SETOFF. ............................................................59

ss.14. THE AGENT. .........................................................60
ss.14.1. Authorization. ...........................................60
ss.14.2. Employees and Agents. ....................................60
ss.14.3. No Liability. ............................................61
ss.14.4. No Representations. ......................................61
ss.14.5. Payments. ................................................61
ss.14.5.1. Payments to Agent. ...........................61
ss.14.5.2. Distribution by Agent. .......................61
ss.14.5.3. Delinquent Banks. ............................62
ss.14.6. Holders of Notes. ........................................62
ss.14.7. Indemnity. ...............................................62
ss.14.8. Agent as Bank. ...........................................62
ss.14.9. Resignation. .............................................63
ss.14.10. Notification of Defaults and Events of Default. ..........63

ss.15. EXPENSES. ..........................................................63

ss.16. INDEMNIFICATION. ...................................................64

ss.17. SURVIVAL OF COVENANTS, ETC. ........................................64

ss.18. ASSIGNMENT AND PARTICIPATION. ......................................65
ss.18.1. Conditions to Assignment by Banks. .......................65
ss.18.2. Certain Representations and Warranties; Limitations;
Covenants. ...............................................65

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-v-

ss.18.3. Register. ................................................66
ss.18.4. New Notes. ...............................................66
ss.18.5. Participations. ..........................................67
ss.18.6. Disclosure. ..............................................67
ss.18.7. Assignee or Participant Affiliated with the Borrower. ....67
ss.18.8. Miscellaneous Assignment Provisions. .....................68
ss.18.9. Assignment by Borrower. ..................................68

ss.19. NOTICES, ETC. ......................................................68

ss.20. GOVERNING LAW. .....................................................69

ss.21. HEADINGS. ..........................................................69

ss.22. COUNTERPARTS. ......................................................69

ss.23. ENTIRE AGREEMENT, ETC. .............................................69

ss.24. WAIVER OF JURY TRIAL. ..............................................70

ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. ................................70

ss.26. SEVERABILITY. ......................................................70

<PAGE> 7

-vi-

EXHIBITS:

Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Loan Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Assignment of Acquisition Documents
Exhibit E - Form of Focus Report
Exhibit F - Form of Guaranty
Exhibit G - Form of Security Agreement
Exhibit H - Form of Stock Pledge Agreement
Exhibit I - Form of Assignment and Acceptance

SCHEDULES:

Schedule 1 - Banks, Commitment Amounts; Etc.
Schedule 6.2(a) - Obligations with respect to Borrower's Equity Securities
Schedule 6.2(b) - Subsidiaries; Active Subsidiaries
Schedule 6.3(a) - Consents Obtained
Schedule 6.3(b) - Approvals Required
Schedule 6.4 - Title to Properties
Schedule 6.8 - Litigation
Schedule 6.15 - Affiliated Transactions
Schedule 6.16 - ERISA Matters
Schedule 6.19(a) - Broker-Dealer Securities Exchanges
Schedule 6.19(b) - Broker-Dealer Noncompliance
Schedule 6.19(c) - Broker-Dealer Defaults
Schedule 6.20(a) - Advisor Jurisdictions
Schedule 6.20(b) - Advisor Noncompliance
Schedule 6.20(c) - Advisor Defaults
Schedule 6.21 - Fund Agreements
Schedule 8.1 - Indebtedness
Schedule 8.1(h) - Bank of New York
Financing Schedule 8.2 - Liens
Schedule 8.3 - Investments

Exhibits and Schedules have been omitted from this Agreement. The
Registrant Agrees to furnish supplementally a copy of such Exhibits and
Schedules to the Commission upon request.
<PAGE> 8

REVOLVING CREDIT AGREEMENT

This REVOLVING CREDIT AGREEMENT is made as of November 29, 1996, by and
among JHFSC ACQUISITION CORP. (the "Borrower"), a Delaware corporation, and THE
FIRST NATIONAL BANK OF BOSTON, THE BANK OF NEW YORK and the other lending
institutions listed on SCHEDULE 1 attached hereto, THE FIRST NATIONAL BANK OF
BOSTON, as agent for itself and such other lending institutions and THE BANK OF
NEW YORK as co-agent for itself and such other lending institutions.

SS.1. DEFINITIONS AND RULES OF INTERPRETATION.

SS.1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:

ACQUIRED COMPANY. John Hancock Freedom Securities Corporation, a
Massachusetts corporation.

ACQUISITION. The acquisition by the Borrower from the Seller of all of the
outstanding Equity Securities of the Acquired Company.

ACQUISITION DOCUMENTS. The Contribution Agreement and all other agreements
and documents required to be entered into or delivered pursuant to such
agreement or in connection with the Acquisition.

ACTIVE SUBSIDIARIES. The Advisory Subsidiaries, the Broker-Dealer
Subsidiaries and all other Subsidiaries of the Borrower that are not Inactive
Subsidiaries.

ADVISERS ACT. The Investment Advisers Act of 1940 (or any successor
statute) and the rules and regulations thereunder, all as from time to time in
effect.

ADVISORY AGREEMENTS. The binding written contractual agreements under which
the Borrower or any of its Subsidiaries provides investment advisory services.

ADVISORY SUBSIDIARIES. Those Subsidiaries of the Borrower that provide
investment advisory services.

AFFILIATE. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.

AGENT'S HEAD OFFICE. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.

AGENT. The First National Bank of Boston acting as agent for the Banks.

AGENT'S SPECIAL COUNSEL. Bingham, Dana & Gould LLP or such other counsel as
may be approved by the Agent.

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APPLICABLE MARGIN. For each period commencing at the beginning of the month
immediately following the month in which a Compliance Certificate is to be
delivered with respect to a fiscal quarter of the Borrower through the month in
which the next quarterly Compliance Certificate is to be delivered pursuant to
ss.7.4(c) hereof (each a "Rate Adjustment Period"), the Applicable Margin shall
be the percentage set forth below opposite the Borrower's Leverage Ratio as
determined at the end of the fiscal quarter of the Borrower ending immediately
prior to the applicable Rate Adjustment Period:

<TABLE>
<CAPTION>
Applicable Margin Applicable Margin
Leverage Ratio For Base Rate Loans For Eurodollar Rate Loans
-------------- ------------------- -------------------------

<S> <C> <C>
Less than 1.25 to 1.00 0.00% 0.75%

Greater than or equal to 1.25 to 0.00% 1.00%
1.00 but less than 1.75 to 1.00

Greater than or equal to 1.75 to 0.00% 1.25%
1.00 but less than 2.25 to 1.00

Greater than or equal to 2.25 to 0.00% 1.50%
1.00 but less than 2.75 to 1.00

Greater than or equal to 2.75 to 0.25% 1.75%
1.00 but less than 3.00 to 1.00

Greater than or equal to 3.00 to 0.50% 2.00%
1.00
</TABLE>

Notwithstanding the foregoing, for the period commencing on the Closing
Date through the end of the month in which the first quarterly Compliance
Certificate is to be delivered pursuant to ss.7.4(c) hereof, the Applicable
Margin shall be determined based upon the Compliance Certificate delivered to
the Banks on the Closing Date for Revolving Credit Loans outstanding during such
period.

ASSET SALE. The sale by the Borrower or any Subsidiary of the Borrower of
assets in any fiscal year, whether in one transaction or a series of
transactions, that constitute 5% or more of the Consolidated Total Assets of the
Borrower and its Subsidiaries as of the first day of such fiscal year, other
than sales by any Broker-Dealer Subsidiary of Investments permitted under
ss.8.3(i) hereof.

ASSIGNMENT AND ACCEPTANCE. See ss.18.1 hereof.

<PAGE> 10

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ASSIGNMENT OF ACQUISITION DOCUMENTS. The Collateral Assignment of
Acquisition Documents, dated as of the date hereof, between the Borrower and the
Agent and substantially in the form of EXHIBIT D attached hereto.

BALANCE SHEET DATE. The date of the Pro Forma Balance Sheet.

BANKS. FNBB and the other lending institutions listed on SCHEDULE 1
attached hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.18 hereof.

BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by FNBB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean, for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.

BASE RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.

BORROWER. As defined in the preamble hereto.

BRIDGE FINANCING. Subordinated Indebtedness of the Borrower payable to
Persons who own Equity Securities of the Borrower or any Affiliates of such
Persons, and incurred by the Borrower on an interim basis pending the receipt by
the Borrower of proceeds from the sale of its Equity Securities.

BROKER-DEALER AGREEMENTS. See ss.6.19 hereof.

BROKER-DEALER SUBSIDIARIES. Those Subsidiaries of the Borrower that (a)
provide broker/dealer services, (b) act as a broker or a dealer or (c) are
required to comply with net capital requirements under the Exchange Act.

BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts and New York, New York, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.

CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.

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CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by the Borrower
or any of its Subsidiaries in connection with the purchase or lease by the
Borrower or any of its Subsidiaries of Capital Assets that would be required to
be capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.

CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.

CASH DISTRIBUTION AMOUNT. See ss.8.4(a) hereof.

CERCLA. See ss.6.18 hereof.

CLOSING DATE. The first date on which the conditions set forth in ss.10
hereof have been satisfied.

CO-AGENT. The Bank of New York acting as co-agent for the Banks.

CODE. The Internal Revenue Code of 1986.

COLLATERAL. All of the property, rights and interests of the Borrower and
certain of its Subsidiaries that are subject to the security interests created
by the Security Documents.

COMMITMENT. The agreement of each Bank, subject to the terms and conditions
of this Credit Agreement, to make Revolving Credit Loans to the Borrower.

COMMITMENT AMOUNT. With respect to each Bank, the amount set forth on
SCHEDULE 1 attached hereto as the amount of such Bank's Commitment as the same
may be reduced from time to time in accordance with the terms hereof; or if such
Commitment is terminated pursuant to the provisions hereof, zero.

COMMITMENT FEE RATE. For each Rate Adjustment Period, the Commitment Fee
Rate shall be (a) 0.25% per annum if, as at the end of the fiscal quarter of the
Borrower ending immediately prior to such Rate Adjustment Period, the Leverage
Ratio is less than 1.75 to 1.00, (b) 0.375% per annum if, as at the end of the
fiscal quarter of the Borrower ending immediately prior to such Rate Adjustment
Period, the Leverage Ratio is greater than or equal to 1.75 to 1.00 but less
than 2.75 to 1.00, and (c) 0.50% per annum if, as at the end of the fiscal
quarter of the Borrower ending immediately prior to such Rate Adjustment Period,
the Leverage Ratio is greater than or equal to 2.75 to 1.00.

COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set forth
on SCHEDULE 1 attached hereto as such Bank's percentage of the Total Commitment.

COMMITMENT REDUCTION DATE. See ss.2.2 hereof.

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COMMODITIES ACT. The Commodities Exchange Act (or any successor statute),
the rules and regulations thereunder, the rules and regulations of the
Commodities Futures Trading Commission (or any successor), all as from time to
time in effect.

COMPLIANCE CERTIFICATE. See ss.7.4(c) hereof.

CONSOLIDATED or CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.

CONSOLIDATED EBITDA. For any fiscal period, the sum of (a) the Consolidated
Net Income of the Borrower and its Subsidiaries for such period, after all
expenses and other proper charges but before payment or provision for any income
(including capital gains), franchise, occupancy, sales and use taxes or interest
expense of the Borrower for such period, PLUS (b) the aggregate amount of
depreciation, amortization and other non-cash charges made in calculating
Consolidated Net Income for such period, MINUS (c) for purposes of the
calculation of Consolidated EBITDA for the covenants set forth in ss.ss.9.2 and
9.4 hereof and for purposes of determining Excess Cash Flow, the aggregate
amount of principal payments made during such period (but not including payments
made prior to the Closing Date) in respect of Indebtedness consisting of fixed
asset financings permitted under ss.8.1(f) hereof including the principal
component of any Capitalized Lease and other Indebtedness of Subsidiaries
permitted under ss.8.1(h) hereof, PLUS (d) for the fiscal quarter in which the
Acquisition is consummated, the aggregate amount of the Borrower's one-time
Acquisition related charges, PROVIDED that the aggregate amount of such charges
does not exceed $10,000,000, all as determined in accordance with generally
accepted accounting principles.

CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.

CONSOLIDATED NET WORTH. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, LESS, to the extent otherwise includable in the
computations of Consolidated Net Worth, any subscriptions receivable.

CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to (a)
the Consolidated EBITDA for such period, MINUS (b) the sum of (i) cash payments
for all taxes paid by the Borrower and its Subsidiaries during such period, PLUS
(ii) Capital Expenditures made by the Borrower and its Subsidiaries during such
period in an amount not to exceed the Scheduled Capital Expenditures Amount
(including any Scheduled Capital Expenditure Amount permitted to be carried over
from a previous period in accordance with ss.9.8 hereof) to the extent such
Capital Expenditures remain unfinanced 90 days after they are made and are not
subsequently financed and to the extent such Capital Expenditures are not made
from proceeds received by the Borrower from issuance of its Equity Securities.

<PAGE> 13
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CONSOLIDATED REVENUES. For any period, the total revenues of the Borrower
and its Subsidiaries determined in accordance with generally accepted accounting
principles.

CONSOLIDATED TOTAL ASSETS. All assets of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles.

CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrower and its
Subsidiaries.

CONTRIBUTION AGREEMENT. The Contribution Agreement for the formation of the
Borrower, dated as of October 4, 1996, by and among the Borrower, the Seller,
Lee and SCP.

CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with ss.2.7 hereof.

CREDIT AGREEMENT. This Revolving Credit Agreement, including the Schedules
and Exhibits attached hereto.

DEBT INCURRENCE. The incurrence by the Borrower of any Indebtedness in
respect of borrowed money (not including Indebtedness in respect of borrowed
money which the Borrower has guaranteed) other than Indebtedness of the Borrower
described in clauses (a), (f) and (k) of ss.8.1 hereof.

DEFAULT. See ss.12 hereof.

DELINQUENT BANK. See ss.14.5.3 hereof.

DISTRIBUTION. The declaration or payment of any dividend on or in respect
of any Equity Securities of any Person, other than dividends payable solely in
Equity Securities of such Person; the purchase, redemption, or other retirement
of any Equity Securities of any Person, directly or indirectly through a
Subsidiary of such Person or otherwise; the return of capital by any Person to
the holders of its Equity Securities as such; or any other distribution on or in
respect of any Equity Securities of any Person.

DOLLARS or $. Dollars in lawful currency of the United States of America.

DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 attached hereto; thereafter, such other office of such Bank,
if any, located within the United States that will be making or maintaining Base
Rate Loans.

DRAWDOWN DATE. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.6 hereof.

<PAGE> 14
- 7 -

ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, an
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution approved by
the Agent, such approval not to be unreasonably withheld.

EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(2) of ERISA maintained or contributed to by the Borrower, other than a
Guaranteed Pension Plan or a Multiemployer Plan.

EMPLOYEE GROUP. Collectively, as at any date of determination, the
employees of the Acquired Company and its Subsidiaries.

ENVIRONMENTAL LAWS. See ss.6.18(a) hereof.

EQUITY ISSUANCE. The issuance by the Borrower of its Equity Securities to
Persons (a) who do not own any Equity Securities of the Borrower on the Closing
Date or who are not affiliates of such Persons who own Equity Securities of the
Borrower on the Closing Date or (b) who are not members of the Employee Group.

EQUITY SECURITIES. With respect to any corporation, partnership, trust,
unincorporated association, joint venture, limited liability company, or other
legal or business entity, all equity securities of such entity, including any
(a) common or preferred stock, (b) limited or general partnership interests, (c)
options, warrants, or other legal rights to purchase or acquire any equity
security, or (d) securities convertible into any equity securities.

ERISA. The Employee Retirement Income Security Act of 1974.

ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.

ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.

EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors

<PAGE> 15
- 8 -

of the Federal Reserve System (or any successor or similar regulations relating
to such reserve requirements) against "Eurocurrency Liabilities" (as that term
is used in Regulation D), if such liabilities were outstanding. The Eurocurrency
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in the Eurocurrency Reserve Rate.

EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.

EURODOLLAR LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 attached hereto; thereafter, such other office of such Bank,
if any, that shall be making or maintaining Eurodollar Rate Loans.

EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the arithmetic average of the rates per
annum for the Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which the Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted at or about 10:00 a.m., Boston time, for delivery on the
first day of such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of the Eurodollar Rate Loan of the
Reference Bank to which such Interest Period applies, divided by (b) a number
equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.

EURODOLLAR RATE LOANS. Revolving Credit Loans bearing interest calculated
by reference to the Eurodollar Rate.

EVENT OF DEFAULT. See ss.12 hereof.

EXCESS CASH FLOW. For any fiscal year an amount equal to (a) the
Consolidated EBITDA of the Borrower and its Subsidiaries for such fiscal year,
MINUS (b) the aggregate amount of cash taxes of the Borrower and its
Subsidiaries paid during such fiscal year, MINUS (c) the aggregate amount of
Capital Expenditures made by the Borrower and its Subsidiaries during such
fiscal year in an amount not to exceed the Scheduled Capital Expenditures Amount
(including any Scheduled Capital Expenditures Amount permitted to be carried
over from a previous period in accordance with ss.9.8 hereof), MINUS (d) the
aggregate amount of all mandatory payments made on or in respect of Funded Debt
of the Borrower and its Subsidiaries during such fiscal year, without
duplication and to the extent not already subtracted in the calculation of
Consolidated EBITDA, MINUS (e) $2,500,000. Notwithstanding the foregoing, no
voluntary or mandatory payments made with respect to Indebtedness of the
Broker-Dealer Subsidiaries permitted under ss.8.1(h) hereof shall be subtracted
under clause (d), and only Capital Expenditures made during such fiscal year and
not financed within ninety days after the end of such fiscal year shall be
subtracted under clause (c), for purposes of calculating Excess Cash Flow.

<PAGE> 16
- 9 -

EXCHANGE ACT. The Securities Exchange Act of 1934 (or any successor
statute) and the rules and regulations thereunder, all as from time to time in
effect.

FEE LETTER. The letter agreement, dated as of the date hereof, between the
Borrower and the Agent.

FINANCIAL OBLIGATIONS. With respect to any fiscal period, an amount equal
to the sum of all principal payments on Funded Debt of the Borrower that become
due and payable or that are to become due and payable during such fiscal period
and all principal payments on all other Indebtedness of the Borrower that become
due and payable by the Borrower or that are to become due and payable by the
Borrower during such fiscal period pursuant to any agreement or instrument to
which the Borrower is a party relating to the borrowing of money or the
obtaining of credit or in respect of Capitalized Leases.

FNBB. The First National Bank of Boston in its individual capacity.

FOCUS REPORT. The Financial and Operational Combined Uniform Single Report,
in the form of EXHIBIT E attached hereto, used by a Broker-Dealer Subsidiary to
evidence compliance with applicable net capital requirements under the Exchange
Act, as such report and the defined terms used therein are in effect on the date
hereof.

FREEDOM CAPITAL. Freedom Capital Management Corporation, a Massachusetts
corporation and a wholly-owned Subsidiary of the Borrower.

FUND. With respect to any Trust that has more than one portfolio, the
individual portfolio for which the Borrower or any of its Subsidiaries provides
investment advisory services pursuant to an Advisory Contract.

FUND AGREEMENTS. As defined in ss.6.21 hereof.

FUNDED DEBT. With respect to any Person, at any time, all Indebtedness of
such Person at such time, whether recourse is to all or a portion of the assets
of such Person, and whether or not contingent, (a) in respect of money borrowed
or the deferred purchase price of property and services (excluding trade
accounts payable), (b) in respect of letters of credit, bankers' acceptances, or
similar facilities, (c) in respect of any Capitalized Leases, (d) evidenced by
any loan or credit agreement, reimbursement agreement, promissory note,
debenture, bond, or other similar contract, and (e) any Indebtedness of any
other entity of a type described in (a), (b), (c), or (d) that such Person has
guaranteed or for which such Person is otherwise responsible or liable, directly
or indirectly, PROVIDED, however that (i) with respect to Subsidiaries of the
Borrower, Funded Debt shall not include Indebtedness in respect of securities
repurchase agreements, and (ii) with respect to the Borrower, Funded Debt shall
not include Indebtedness of any Subsidiary of the Borrower of a type described
in (a), (b), (c) or (d) that the Borrower has guaranteed.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in ss.9 hereof,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the
<PAGE> 17
- 10 -

Financial Accounting Standards Board and its predecessors, in effect on the
Balance Sheet Date, consistently applied, and (ii) to the extent consistent with
such principles, the accounting practice of the Borrower reflected in its
financial statements delivered on the Balance Sheet Date, and (b) when used in
general, other than as provided above, means principles that are (i) consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, as in effect from time to time and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, PROVIDED that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.

GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

GUARANTOR. Any Subsidiary of the Borrower that is a party to the Guaranty
or that delivers an Instrument of Adherence to the Guaranty pursuant to ss.7.14
hereof.

GUARANTY. The Guaranty, dated as of the date hereof, made by certain of the
Subsidiaries of the Borrower in favor of the Banks and the Agent pursuant to
which such Subsidiary guaranties to the Banks and the Agent the payment and
performance of the Obligations, substantially in the form of EXHIBIT F attached
hereto.

HAZARDOUS SUBSTANCES. See ss.6.18(b) hereof.

INACTIVE SUBSIDIARIES. Those Subsidiaries of the Borrower that carry on
insignificant business activities and whose revenue for the most recently
completed fiscal year of the Acquired Company, on a combined basis, constitute
no more than 3% of the Consolidated Revenue of the Borrower and its Subsidiaries
for such fiscal year.

INDEBTEDNESS. All obligations, contingent and otherwise, that in accordance
with generally accepted accounting principles should be classified upon the
obligor's balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including in any event and whether or not so classified: (a)
all debt and similar monetary obligations, including, without limitation, all
Funded Debt, whether direct or indirect; (b) all liabilities secured by any
mortgage, pledge, security interest, lien, charge, or other encumbrance existing
on property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (c) all guarantees, endorsements
and other contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit.

<PAGE> 18
- 11 -

INSTRUMENT OF ADHERENCE. An Instrument of Adherence to the Guaranty
substantially in the form of EXHIBIT A to the Guaranty.

INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of the
calendar quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or
less, the last day of such Interest Period and (ii) more than 3 months, the date
that is 3 months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.

INTEREST PERIOD. With respect to each Revolving Credit Loan, (a) initially,
the period commencing on the Drawdown Date of such Revolving Credit Loan and
ending on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request (i) for any Base Rate Loan, the last day of the
calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3, or 6 months;
and (b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; PROVIDED that all of the foregoing provisions relating to
Interest Periods are subject to the following:

(A) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;

(B) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;

(C) if the Borrower shall fail to give notice as provided in ss.2.7
hereof, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;

(D) any Interest Period that begins on the last Eurodollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Eurodollar Business Day of a calendar month; and

(E) any Interest Period relating to any Revolving Credit Loan that
would otherwise extend beyond the Revolving Credit Loan Maturity Date shall
end on the Revolving Credit Loan Maturity Date.

INTEREST RATE PROTECTION ARRANGEMENTS. See ss.7.13 hereof.

<PAGE> 19

- 12 -

INVESTMENT COMPANY ACT. The Investment Company Act of 1940 (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.

INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

LEE. Collectively, Thomas H. Lee Equity Fund III, L.P., a Delaware limited
partnership, Thomas H. Lee Foreign Fund III, L.P., a Delaware limited
partnership, THL-CCI Limited Partnership and their respective Affiliates.

LEVERAGE RATIO. As at the last day of any fiscal quarter, the ratio of (a)
Funded Debt of the Borrower outstanding on such date to (b) Consolidated EBITDA
for the four consecutive fiscal quarters of the Borrower ended on such date.

LOAN DOCUMENTS. This Credit Agreement, the Notes, the Fee Letter, the
Security Documents and all other documents designated by the parties thereto as
a Loan Document for purposes hereof.

LOAN REQUEST. See ss.2.6 hereof.

MAJORITY BANKS. As of any date, the Banks holding at least 51% of the
outstanding principal amount of the Notes on such date; and if no such principal
is outstanding, the Banks whose aggregate Commitments constitutes at least 51%
of the Total Commitment.

MATERIAL ADVERSE EFFECT. Any (i) material adverse effect on the business,
properties, condition (financial or otherwise) and operations of the Borrower
and its Subsidiaries on a consolidated basis; or (ii) material adverse effect on
the legality, validity, binding effect or enforceability of this Credit
Agreement or any of the other Loan Documents.

MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

<PAGE> 20

- 13 -

NASD. The National Association of Securities Dealers, Inc. (or any
successor self-regulatory organization).

NET PROCEEDS. The aggregate amount received by the Borrower or any
Subsidiary of the Borrower from (a) any Asset Sale, net of out-of-pocket
expenses incurred by the Borrower or such Subsidiary in connection with such
sale including the taxes incurred by the Borrower or such Subsidiary as a result
of such Asset Sale and the payment of Indebtedness secured by the assets sold,
(b) any Equity Issuance, net of out-of-pocket expenses incurred in connection
with such Equity Issuance, or (c) any Debt Incurrence by the Borrower, net of
out-of-pocket expenses incurred by the Borrower in connection with such
transaction.

NOTES. See ss.2.3 hereof.

OBLIGATIONS. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Revolving Credit Loans or any of the Notes or other instruments at any time
evidencing any thereof.

OUTSTANDING. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.

PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.

PERMITTED LIENS. Liens, security interests and other encumbrances permitted
by ss.8.2 hereof.

PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

PRO FORMA BALANCE SHEET. See ss.6.5 hereof.

RATE ADJUSTMENT PERIOD. See the definition of Applicable Margin.

RCRA. See ss.6.18 hereof.

REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.

RECORD. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Revolving Credit Loan referred to in such Note.

<PAGE> 21
-14-

REDUCTION AMOUNT. See ss.2.2 hereof.

REFERENCE BANK. FNBB.

REVOLVING CREDIT LOAN MATURITY DATE. December 31, 2001 or such earlier date
on which the Total Commitment is terminated pursuant to the provisions hereof.

REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to ss.2 hereof.

SARA. See ss.6.18 hereof.

SCHEDULED CAPITAL EXPENDITURES AMOUNT. See ss.9.8 hereof.

SCP. SCP Private Equity Partners, L.P., a Delaware limited partnership.

SECURITIES ACT. The Securities Act of 1933 (or any successor statute) and
the rules and regulations thereunder, all as from time to time in effect.

SECURITY AGREEMENT. The Security Agreement, dated as of the date hereof,
between the Borrower and the Agent and substantially in the form of EXHIBIT G
attached hereto.

SECURITY DOCUMENTS. The Guaranty, the Security Agreement, all Instruments
of Adherence to the Guaranty delivered after the Closing Date pursuant to
ss.7.14 hereof, the Stock Pledge Agreements and the Assignment of Acquisition
Documents.

SELLER. John Hancock Subsidiaries, Inc., a Delaware corporation.

STOCK PLEDGE AGREEMENTS. Collectively, the Stock Pledge Agreements
delivered by the Borrower and certain Subsidiaries of the Borrower to the Agent
and, in each case, substantially in the form of EXHIBIT H attached hereto.

STOCKHOLDERS AGREEMENT. That certain Stockholders Agreement, dated as of
the date hereof, by and among the Borrower, Lee, SCP, the Employee Group and the
Seller, as the provisions thereof may be amended and in effect from time to
time.

SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.

SUBSIDIARY LEVERAGE RATIO. As at the last day of any fiscal quarter and
with respect to any Broker-Dealer Subsidiary, the ratio of (a) the total assets
(as defined in the Focus Report) of such Broker-Dealer Subsidiary MINUS the
aggregate amount of reverse repurchase agreements outstanding to such
Broker-Dealer Subsidiary to (b) the sum of the (i) equity (as such term is
defined in the Focus Report) PLUS (ii) subordinated debt (as such term is
defined in the Focus Report) of such Broker-Dealer

<PAGE> 22
-15-

Subsidiary including, without duplication, the subordinated debt of such
Broker-Dealer Subsidiary due within twelve months of the date of determination.

SUTRO. Sutro and Co. Incorporated, a Nevada corporation and a wholly-owned
Subsidiary of the Acquired Company.

TANGIBLE NET CAPITAL. With respect to any Broker-Dealer Subsidiary, the sum
of the net capital of such Broker-Dealer Subsidiary (as defined in the Focus
Report and, including, for purposes calculation of Tangible Net Capital, without
duplication, the subordinated debt of such Broker-Dealer Subsidiary due within
twelve months of the date of determination) PLUS an amount equal to 50% of the
aggregate amount of the haircuts (as defined in the Focus Report) required by
regulators on the securities position of such Broker-Dealer Subsidiary in
determining compliance with net capital requirements under the Exchange Act.

TOTAL COMMITMENT. The sum of the Commitment Amounts of the Banks, as in
effect from time to time.

TOTAL DEBT SERVICE. With respect to any fiscal period, an amount equal to
the sum of (a) the Financial Obligations for such period PLUS (b) the Total
Interest Expense for such period.

TOTAL INTEREST EXPENSE. For any fiscal period, the aggregate amount of
interest required to be paid or accrued by the Borrower during such period on
all Indebtedness of the Borrower outstanding during all or any part of such
fiscal period, whether such interest was or is required to be reflected as an
item of expense or capitalized, including payments consisting of interest in
respect of Capitalized Leases.

TRUST. Each registered investment company under the Investment Company Act
for which any of the Advisory Subsidiaries provides investment advisory services
pursuant to an Advisory Contract.

TUCKER ANTHONY. Tucker Anthony Incorporated, a Massachusetts corporation
and a wholly-owned Subsidiary of the Acquired Company.

TYPE. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.

VOTING STOCK. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.

SS.1.2. RULES OF INTERPRETATION.

(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.

<PAGE> 23
-16-

(b) The singular includes the plural and the plural includes the
singular.

(d) A reference to any Person includes its permitted successors and
permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.

(f) The words "include", "includes" and "including" are not limiting.

(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein, with the term "instrument" being that defined
under Article 9 of the Uniform Commercial Code.

(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.

(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.

SS.2. THE REVOLVING CREDIT FACILITY.

SS.2.1 COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.7 hereof,
such sums as are requested by the Borrower up to a maximum aggregate principal
amount outstanding (after giving effect to all amounts requested) at any one
time equal to such Bank's Commitment Amount, PROVIDED that the sum of the
outstanding amount of the Revolving Credit Loans (after giving effect to all
amounts requested) shall not at any time exceed the Total Commitment. The
Revolving Credit Loans shall be made PRO RATA in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in ss.ss.10 and 11 hereof, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and ss.11 hereof, in the case of all other
Revolving Credit Loans, have been satisfied on the date of such request.

SS.2.2. MANDATORY REDUCTIONS IN THE TOTAL COMMITMENT. (a) Unless the
Commitments are terminated earlier pursuant to the provisions of ss.2.3 hereof,
on each of the dates set forth in the table below (each such date being referred
to as a

<PAGE> 24
-17-

"Commitment Reduction Date"), the Total Commitment shall be automatically
reduced by the amount set forth opposite such date in the column headed
"Reduction Amount" set forth below (each a "Reduction Amount"), as such
Reduction Amount may be adjusted from time to time pursuant to ss.2.3 hereof and
clauses (b) and (c) of this ss.2.2:

<TABLE>
<CAPTION>
Commitment Reduction Date Reduction Amount
- - - - - - - - - - - - - - - ------------------------- ----------------

<S> <C>
September 30, 1997 $2,500,000
December 31, 1997 $2,500,000

March 31, 1998 $2,500,000
June 30, 1998 $2,500,000
September 30, 1998 $2,500,000
December 31, 1998 $2,500,000

March 31, 1999 $3,125,000
June 30, 1999 $3,125,000
September 30, 1999 $3,125,000
December 31, 1999 $3,125,000

March 31, 2000 $6,250,000
June 30, 2000 $6,250,000
September 30, 2000 $6,250,000
December 31, 2000 $6,250,000

March 31, 2001 $8,125,000
June 30, 2001 $8,125,000
September 30, 2001 $8,125,000

December 31, 2001 Remaining Amount
of the Facility
</TABLE>

On each Commitment Reduction Date there shall become absolutely and
unconditionally due and payable, and the Borrower hereby absolutely and
unconditionally promises to pay to the Banks, the amount by which the aggregate
principal amount of all Revolving Credit Loans outstanding exceeds the then
reduced Total Commitment. On the Revolving Credit Loan Maturity Date, unless
terminated earlier pursuant to the provisions hereof, the Total Commitment shall
be reduced to $0 and all Revolving Credit Loans, plus all accrued and unpaid
interest thereon shall be due and payable in full.

(b) If, as at the last day of each fiscal year of the Borrower commencing
with the fiscal year of the Borrower ending on December 31, 1997, the Leverage
Ratio is (a) greater than 2.00 to 1.00, then the Total Commitment will be
automatically reduced on the next June 30 by an amount equal to 50% of the
Excess Cash Flow calculated for the fiscal year of the Borrower then ended, or
(b) greater than 1.50 to 1.00 but less than or equal to 2.00 to 1.00, then the
Total Commitment will be automatically reduced on the

<PAGE> 25
-18-

next June 30 by an amount equal to 25% of the Excess Cash Flow calculated for
the fiscal year of the Borrower then ended.

(c) If, at any time after the Closing Date, the Borrower or any Subsidiary
of the Borrower receives Net Proceeds from an Asset Sale, the Total Commitment
will be automatically reduced 180 days after the receipt of such Net Proceeds by
the Borrower or such Subsidiary by an amount equal to 100% of such Net Proceeds
which are not used by the Borrower or such Subsidiary prior to such date to
replace the assets sold.

(d) If, at any time after the Closing Date, the Borrower receives Net
Proceeds from a Debt Incurrence (other than in respect of a Bridge Financing),
the Total Commitment will be automatically reduced 90 days after the receipt of
such Net Proceeds by the Borrower by an amount equal to 100% of such Net
Proceeds.

(e) If, at any time after the Closing Date, the Borrower receives Net
Proceeds from a Debt Incurrence which is a Bridge Financing, the Total
Commitment will be automatically reduced 120 days after the receipt of such Net
Proceeds by the Borrower by an amount equal to 100% of such Net Proceeds MINUS
the amount, if any, used by the Borrower to repay such Bridge Financing in
accordance with ss.8.1(l) hereof.

(f) If, at any time after the Closing Date, the Borrower or any Subsidiary
of the Borrower receives Net Proceeds from an Equity Issuance, the Total
Commitment will be automatically reduced 90 days after the receipt of such Net
Proceeds by the Borrower or such Subsidiary by an amount equal to 50% of such
Net Proceeds.

(g) On the date of each mandatory reduction in the Total Commitment under
clauses (b), (c), (d), (e) and (f) of this ss.2.2, the Reduction Amount for each
Commitment Reduction Date occurring after such date shall be adjusted by
applying the amount of such mandatory reduction against the subsequent Reduction
Amounts in the inverse order of maturity.

SS.2.3. OPTIONAL REDUCTIONS IN THE TOTAL COMMITMENT. The Borrower shall
have the right at any time and from time to time upon five (5) Business Days
prior written notice to the Agent to reduce the Total Commitment by $2,500,000
or a larger integral multiple of $500,000 or terminate entirely the Commitments,
whereupon the Commitment Amount of each Bank shall be reduced PRO RATA in
accordance with its respective Commitment Percentage of the amount specified in
such notice or, as the case may be, terminated. Promptly after receiving any
notice of the Borrower delivered pursuant to this ss.2.3, the Agent will notify
the Banks of the substance thereof. On the date of each voluntary reduction in
the Total Commitment under this ss.2.3, the Reduction Amount for each Commitment
Reduction Date occurring after such date shall be adjusted by applying the
amount of such voluntary reduction against the subsequent Reduction Amounts in
the inverse order of maturity. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction of the Total Commitment or termination of the
Commitments may be reinstated.

<PAGE> 26
-19-

SS.2.4. THE NOTES. The Revolving Credit Loans shall be evidenced by
separate promissory notes of the Borrower in substantially the form of EXHIBIT A
attached hereto (each a "Note"), dated as of the Closing Date and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Amount or, if less, the
outstanding amount of all Revolving Credit Loans made by such Bank, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Note, an appropriate notation on such Bank's
Record reflecting the making of such Revolving Credit Loan or (as the case may
be) the receipt of such payment. The outstanding amount of the Revolving Credit
Loans set forth on such Bank's Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Record
shall not limit or otherwise affect the obligations of the Borrower hereunder or
under any Note to make payments of principal of or interest on any Note when
due.

SS.2.5. INTEREST ON REVOLVING CREDIT LOANS. (a) Except as otherwise
provided in ss.4.12 hereof,

(i) each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate per annum equal to the Base Rate
PLUS the Applicable Margin for Base Rate Loans; and

(ii) each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period PLUS the Applicable
Margin for Eurodollar Rate Loans.

(b) The Borrower promises to pay interest on each Revolving Credit Loan in
arrears on each Interest Payment Date with respect thereto.

SS.2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
Agent written notice in the form of EXHIBIT B hereto (or telephonic notice
confirmed in a writing in the form of EXHIBIT B attached hereto) of each
Revolving Credit Loan requested hereunder (a "Loan Request") (a) no later than
11:00 a.m. (Boston time) on the proposed Drawdown Date of any Base Rate Loan and
(b) no less than three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify (i)
the principal amount of the Revolving Credit Loan requested, (ii) the proposed
Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such
Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan. Promptly
upon receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each such notice shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Revolving Credit Loan requested from
the Banks on the proposed Drawdown Date. Each Loan Request shall be in a minimum
aggregate amount of $500,000 or an integral multiple thereof.

<PAGE> 27
-20-

SS.2.7. CONVERSION OPTIONS.

SS.2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, PROVIDED that (a)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least three (3) Business
Days prior written notice of such election; (b) with respect to any such
conversion of a Eurodollar Rate Loan into a Base Rate Loan, such conversion
shall only be made on the last day of the Interest Period with respect
thereto; (c) with respect to any such conversion of a Base Rate Loan to a
Eurodollar Rate Loan, the Borrower shall give the Agent at least four (4)
Eurodollar Business Days prior written notice of such election and (d) no
Revolving Credit Loan may be converted into a Eurodollar Rate Loan when any
Event of Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is necessary
to transfer its Commitment Percentage of such Revolving Credit Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of outstanding Revolving Credit Loans of any Type may
be converted as provided herein, PROVIDED that partial conversions shall be
in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
Each Conversion Request relating to the conversion of a Revolving Credit
Loan to a Eurodollar Rate Loan shall be irrevocable by the Borrower.

SS.2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving
Credit Loans of any Type may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in ss.2.7.1 hereof; PROVIDED that no Eurodollar
Rate Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Event of Default of which the officers
of the Agent active upon the Borrower's account have actual knowledge. In
the event that the Borrower fails to provide any such notice with respect
to the continuation of any Eurodollar Rate Loan as such, then such
Eurodollar Rate Loan shall be automatically converted to a Base Rate Loan
on the last day of the first Interest Period relating thereto. The Agent
shall notify the Banks promptly when any such automatic conversion
contemplated by this ss.2.7.2 is scheduled to occur.

SS.2.7.2. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $1,000,000 or a whole multiple of $1,000,000 in excess thereof.

<PAGE> 28
-21-

SS.2.8. FUNDS FOR REVOLVING CREDIT LOANS.

SS.2.8.1 FUNDING PROCEDURES.

Not later than 11:00 a.m. (Boston time) on the proposed Drawdown Date
of any Revolving Credit Loan, each of the Banks will make available to the
Agent, at its Head Office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested Revolving Credit
Loan. Upon receipt from each Bank of such amount, and upon receipt of the
documents required by ss.ss.10 and 11 hereof and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Revolving Credit Loan
made available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested Revolving Credit Loan
shall not relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage of
any requested Revolving Credit Loan.

SS.2.8.2 ADVANCES BY AGENT.

The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Revolving
Credit Loan to be made on such Drawdown Date, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the period
referred to in clause (c) below, of the weighted average interest rate paid by
the Agent for federal funds acquired by the Agent during each day included in
such period, TIMES (b) the amount of such Bank's Commitment Percentage of such
Revolving Credit Loan, TIMES (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the date on
which the amount of such Bank's Commitment Percentage of such Revolving Credit
Loan shall become immediately available to the Agent, and the denominator of
which is 365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be PRIMA FACIE evidence of the
amount due and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loan is not made available to the
Agent by such Bank within three (3) Business Days following such Drawdown Date,
the Agent shall be entitled to recover such amount from the Borrower on demand,
with interest thereon at the rate per annum applicable to the Revolving Credit
Loan made on such Drawdown Date.

SS.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.

SS.3.1 MATURITY.

The Borrower promises to pay on the Revolving Credit Loan Maturity Date,
and there shall become absolutely due and payable on the Revolving Credit Loan
Maturity Date, all of the Revolving Credit Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon.

<PAGE> 29
-22-

SS.3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
outstanding amount of the Revolving Credit Loans exceeds the Total Commitment,
then the Borrower shall immediately pay the amount of such excess to the Agent
for application to the Revolving Credit Loans.

SS.3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, PROVIDED that the full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this ss.3.3 may be made only on the
last day of the Interest Period relating thereto unless the Borrower shall
indemnify the Banks as provided in ss.4.11(c) hereof. The Borrower shall give
the Agent, no later than 10:00 a.m., Boston time, at least three (3) Business
Days prior written notice, of any proposed repayment pursuant to this ss.3.3 of
Base Rate Loans, and four (4) Eurodollar Business Days notice of any proposed
repayment pursuant to this ss.3.3 of Eurodollar Rate Loans, in each case,
specifying the proposed date of payment of Revolving Credit Loans and the
principal amount to be paid. Each such partial prepayment of the Revolving
Credit Loans shall be in an integral multiple of $1,000,000, shall be
accompanied by the payment of accrued interest on the principal repaid to the
date of payment and shall be applied first to the principal of Base Rate Loans
and then to the principal of Eurodollar Rate Loans. Each partial prepayment
shall be allocated among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.

SS.4. CERTAIN GENERAL PROVISIONS.

SS.4.1 CLOSING FEE; ARRANGEMENT FEE. (a) The Borrower agrees to pay to the
Agent for the account of each Bank on the Closing Date a closing fee in an
amount equal to 0.25% of such Bank's Commitment Amount.

(b) The Borrower agrees to pay to the Agent, for its own account, an
arrangement fee as set forth in the Fee Letter.

SS.4.2. AGENT'S FEE. The Borrower shall pay to the Agent annually in
advance, for the Agent's own account, on the first anniversary of the Closing
Date and on each anniversary of the Closing Date thereafter prior to the
termination of the Commitments hereunder, a non-refundable Agent's fee in the
amount of $25,000.

SS.4.3. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of per annum equal to the Commitment Fee
Rate on the average daily amount during each calendar quarter or portion thereof
from the date hereof to the Revolving Credit Loan Maturity Date by which the
Total Commitment exceeds the outstanding amount of Revolving Credit Loans during
such calendar quarter. The commitment fee shall be payable quarterly in arrears
on the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on

<PAGE> 30
-23-

the Revolving Credit Loan Maturity Date or any earlier date on which the
Commitments shall terminate.

SS.4.4. FUNDS FOR PAYMENTS.

SS.4.4.1. PAYMENTS TO AGENT. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, at the Agent's Head Office or at such
other location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available funds.

SS.4.4.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.

SS.4.5. COMPUTATIONS. All computations of interest on the Revolving
Credit Loans and of commitment or other fees shall be based on a 360-day
year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the
other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business
Day, and interest shall accrue during such extension and be payable on such
extended due date. The outstanding amount of the Revolving Credit Loans as
reflected on the Records from time to time shall be considered correct and
binding on the Borrower unless within five (5) Business Days after receipt
of any notice by the Agent or any of the Banks of such outstanding amount,
the Agent or such Bank shall notify the Borrower to the contrary.

SS.4.6. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to
the commencement of any Interest Period relating to any Eurodollar Rate
Loan, the Agent shall determine that adequate and reasonable methods do not
exist for ascertaining the Eurodollar Rate that would otherwise determine
the rate of interest to be applicable to any Eurodollar Rate Loan during
any Interest Period, the Agent shall

<PAGE> 31
-24-

forthwith give notice at least one (1) Business Day prior to the requested
Drawdown Date of such Eurodollar Rate Loan of such determination (which shall be
conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (a) any Loan Request or Conversion Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each Eurodollar Rate Loan will automatically,
on the last day of the then current Interest Period thereof, become a Base Rate
Loan, and (c) the obligations of the Banks to make Eurodollar Rate Loans shall
be suspended until the Agent determines that the circumstances giving rise to
such suspension no longer exist, whereupon the Agent shall so notify the
Borrower and the Banks.

SS.4.7. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's
Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any, shall
be converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this ss.4.7, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.

SS.4.8. ADDITIONAL COSTS, ETC. If any change in any present applicable law
or any future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Bank or the Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law), shall:

(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, such Bank's Commitment or the
Revolving Credit Loans (other than taxes based upon or measured by the
income or profits of such Bank or the Agent), or

(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Revolving Credit Loans or any other amounts payable to
any Bank or the Agent under this Credit Agreement or the other Loan
Documents, or

(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special

<PAGE> 32
-25-

deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of any Bank, or

(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Revolving Credit Loans, such Bank's Commitment, or any class
of loans or commitments of which any of the Revolving Credit Loans or such
Bank's Commitment forms a part, and the result of any of the foregoing is

(i) to increase the cost to any Bank by an amount which such Bank
deems to be material of making, funding, issuing, renewing, extending
or maintaining any of the Revolving Credit Loans or such Bank's
Commitment, or

(ii) to reduce the amount of principal, interest or other amount
payable to such Bank or the Agent hereunder on account of such Bank's
Commitment or any of the Revolving Credit Loans, or

(iii) to require such Bank or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received
by such Bank or the Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, upon receipt of the certificate
referred to in ss.4.10 hereof, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.

SS.4.9. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) adopted or made subsequent to the date hereof of any
such entity regarding capital adequacy, has the effect of reducing the return on
such Bank's or the Agent's commitment with respect to any Revolving Credit Loans
to a level below that which such Bank or the Agent could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
the Agent's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Bank or
(as the case may be) the Agent to be material, then such Bank or the Agent may
notify the Borrower of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in good faith,
within

<PAGE> 33
-26-

thirty (30) days of the day on which the Borrower receives such notice, an
adjustment payable hereunder that will reflect the economics of the Revolving
Credit Loans made or to be made by such Bank hereunder prior to such reduction
in the return on capital. If the Borrower and such Bank are unable to agree to
such adjustment within thirty (30) days of the date on which the Borrower
receives such notice, then commencing on the date of such notice (but not
earlier than the effective date of any such increased capital requirement), the
fees payable hereunder shall increase by an amount that will, in such Bank's
reasonable determination, reflect the economics of the Revolving Credit Loans
made or to be made by such Bank hereunder prior to such reduction in the return
on capital. Each Bank shall allocate such cost increases among its customers in
good faith and on an equitable basis.

SS.4.10. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.8 or 4.9 hereof and an explanation in reasonable
detail of the basis for calculating the additional amounts which are due, shall
be promptly submitted by any Bank or the Agent to the Borrower, and such
certificate shall be conclusive, absent manifest error, that such amounts are
due and owing.

SS.4.11. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing after the Borrower has given (or is deemed
to have given) a Loan Request or a Conversion Request relating thereto in
accordance with ss.ss.2.6 or 2.7 hereof or (c) the making of any payment of a
Eurodollar Rate Loan or the making of any conversion of any such Eurodollar Rate
Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain any such Eurodollar
Rate Loans.

SS.4.12. INTEREST AFTER DEFAULT.

SS.4.12.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and all
other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand at a
rate per annum equal to 2% above the rate of interest otherwise applicable
to Base Rate Loans until such amount shall be paid in full (after as well
as before judgment).

SS.4.12.2. AMOUNTS NOT OVERDUE. During the continuance of any Event of
Default and so long as the Banks have not accelerated the entire
outstanding principal amount of the Revolving Credit Loans, the principal
of the Revolving Credit Loans not overdue shall, until such Event of
Default has been cured or waived by the Majority Banks pursuant to ss.25
hereof, bear interest at a rate per

<PAGE> 34
-27-

annum equal to 1.5% above the rate of interest otherwise applicable to such
Revolving Credit Loans pursuant to ss.2.5 hereof.

SS.5. SECURITY AND GUARANTIES.

SS.5.1. SECURITY. The Obligations shall at all times be secured by a
perfected first priority security interest in and lien on (subject only to
Permitted Liens entitled to priority under applicable law) all of the assets of
the Borrower, including, without limitation, all of the Equity Securities of all
of the Borrower's Subsidiaries, whether now owned or hereafter acquired,
pursuant to the terms of the Security Documents.

SS.5.2 GUARANTIES OF SUBSIDIARIES. The Obligations shall also be guaranteed
pursuant to the terms of the Guaranty, as amended by the Instruments of
Adherence delivered pursuant to ss.7.14 hereof after the Closing Date.

SS.5.3 FREEDOM CAPITAL. The Borrower shall cause Freedom Capital to (a) on
or before December 31, 1997 (unless clause (b) has been satisfied on or before
such date), mail proxy statements to the shareholders of each Fund and Trust to
which Freedom Capital provides investment advisory services which shall seek
approval for the delivery by Freedom Capital of an Instrument of Adherence to
the Guaranty and a Stock Pledge Agreement, and (b) on or before February 28,
1998, deliver to the Agent, for the benefit of the Banks, a duly executed
Instrument of Adherence to the Guaranty and a duly executed Stock Pledge
Agreement, together with stock certificates evidencing the Equity Securities
pledged by Freedom Capital under such Stock Pledge Agreement and such supporting
documentation, including legal opinions and corporate authority documents, as
the Banks may reasonably request.

SS.6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Banks and the Agent as follows:

SS.6.1. CORPORATE AUTHORITY.

SS.6.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as
now conducted and as presently contemplated, and (c) is in good standing as
a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a Material Adverse Effect.

SS.6.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of
such Person, (b) have been duly authorized by all necessary corporate
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
the Borrower or any of its Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to

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the Borrower or any of its Subsidiaries and (d) do not conflict with any
provision of the corporate charter or bylaws of, or any agreement or other
instrument binding upon, the Borrower or any of its Subsidiaries.

SS.6.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.

SS.6.2. CAPITALIZATION; SUBSIDIARIES, ETC. (a) The Borrower's Equity
Securities consist solely of 12,000,000 shares of authorized common stock, $0.01
par value. On the Closing Date, after giving effect to the Acquisition, and
before giving effect to any options or warrants, (i) Lee owns 3,993,120 shares
(50.58%) of the Borrower's outstanding Equity Securities, (ii) SCP owns 998,280
shares (12.645%) of the Borrower's outstanding Equity Securities, (iii) the
Employee Group owns 2,508,600 shares (31.77%) of the Borrower's outstanding
Equity Securities and (iv) the Seller owns 394,653.7 shares (4.999%) of the
Borrower's outstanding Equity Securities. Except as set forth on SCHEDULE 6.2(A)
attached hereto, the Borrower has not agreed, committed, or otherwise obligated
itself to authorize or issue any Equity Securities. All of the outstanding
Equity Securities of the Borrower are validly issued, fully paid and
non-assessable.

(b) SCHEDULE 6.2(B) attached hereto sets forth a list of (i) each
Subsidiary, Active Subsidiary, Advisory Subsidiary and Broker- Dealer Subsidiary
of the Borrower, (ii) the number of authorized and outstanding Equity Securities
of each class of each Subsidiary of the Borrower and the number and percentage
thereof owned, directly or indirectly, by the Borrower, and (iii) any
partnership or joint venture in which the Borrower or any of its Subsidiaries is
engaged with any other Person. All of the outstanding Equity Securities of each
Subsidiary of the Borrower are validly issued, fully paid and non-assessable.

SS.6.3. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval, authorization or other action by or consent of, or
declaration or filing with, any governmental agency or authority other than (a)
those already obtained and listed on SCHEDULE 6.3(A) attached hereto and (b)
those listed on SCHEDULE 6.3(B) attached hereto.

SS.6.4. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 6.4
attached hereto, the Borrower and its Subsidiaries own all of the assets
reflected in the Pro Forma Balance Sheet of the Borrower and its Subsidiaries or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of

<PAGE> 36
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business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.

SS.6.5. FINANCIAL STATEMENTS. (a) There has been furnished to the Banks an
unaudited consolidated PRO FORMA balance sheet of the Borrower and its
Subsidiaries as at the October 31, 1996 which gives effect to the Acquisition
(the "PRO FORMA BALANCE SHEET"). The Pro Forma Balance Sheet has been prepared
in accordance with generally accepted accounting principles (subject to normal
year-end adjustments and the absence of footnotes and other presentation items)
and fairly presents the financial condition of the Borrower and its Subsidiaries
as at the close of business on the date thereof. There are no contingent
liabilities of the Borrower or any of its Subsidiaries as of such date involving
material amounts, known to the officers of the Borrower not disclosed in the Pro
Forma Balance Sheet and the related notes thereto.

(b) There has been furnished to the Banks the (i) audited consolidated
financial statements of financial condition, income, changes in stockholder's
equity and cash flows as of and for the fiscal years ended December 31, 1994 and
December 31, 1995, for the Acquired Company and its Subsidiaries, and (ii)
unaudited consolidated statements of financial condition, income, changes in
stockholders' equity, and cash flows as of and for the seven (7) months ended
July 31, 1996 for the Acquired Company and its Subsidiaries. The financial
statements of the Acquired Company (including the notes thereto) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby and present fairly the
financial condition of the Acquired Company and its Subsidiaries as of such
dates and the results of operations of the Acquired Company and its Subsidiaries
for such periods, subject, in the case of the unaudited financial statements, to
normal year-end adjustments (which will not be material, individually or in the
aggregate) and the absence of footnotes and other presentation items.

SS.6.6. NO MATERIAL CHANGES, ETC.; SOLVENCY. (a) On and as of the Closing
Date, there has not occurred, since December 31, 1995, any materially adverse
change in the condition (financial or otherwise), business, properties or
operations of the Acquired Company and its Subsidiaries.

(b) Since the later of the Balance Sheet Date or the last day of the most
recently completed fiscal year of the Borrower, there has occurred no change
which has had a Material Adverse Effect since such date, and there has not
occurred any fact, event or condition which has resulted in, or could reasonably
be expected to have, a Material Adverse Effect.

(c) The Borrower (before and after giving effect to the transactions
contemplated by this Credit Agreement, the other Loan Documents and the
Acquisition Documents) (i) is solvent within the meaning ascribed to such term
by applicable state and federal debtor/creditor laws, bankruptcy laws and
fraudulent conveyance laws, (ii) has assets having a fair value in excess of its
liabilities, (iii) has assets having a fair value in excess of the amount
required to pay its liabilities on existing debts as such debts become absolute
and matured, and (iv) has, and expects to continue to have, access to adequate
capital for the conduct of its business and the ability to pay its debts from

<PAGE> 37
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time to time incurred in connection with the operation of its business as such
debts mature.

SS.6.7. BUSINESS, ETC. (a) The Borrower, prior to the consummation of the
Acquisition, has not conducted any business activities other than in connection
with the negotiation and execution of the Acquisition Documents and, prior to
the consummation of the Acquisition, no liabilities other than its obligations
under the Acquisition Documents and with respect to the financing arrangements
referred to therein. After the consummation of the Acquisition, neither the
Borrower nor the Acquired Company owns any assets other than the Equity
Securities of its Subsidiaries listed on SCHEDULE 6.2(B) attached hereto.

(b) After giving effect to the Acquisition, the Borrower and each of its
Subsidiaries enjoys peaceful and undisturbed possession under all leases of real
or personal property of which it is lessee, none of which contains any unusual
or burdensome provision which will have a Material Adverse Effect and all such
leases are valid and subsisting and in full force and effect.

(c) After giving effect to the Acquisition, the Borrower and each of its
Subsidiaries has, owns or possess the right to use all patents, patent
applications, patent rights, service marks, service mark rights, trademarks,
trademark rights, trade names, trade name rights, copyrights, licenses,
franchises, permits, authorizations, including authorizations under state
securities laws, and other material rights as are necessary for the conduct of
its business substantially as such business was conducted by the Acquired
Company and its Subsidiaries prior to the Acquisition. All of the foregoing are
in full force and effect, and each of the Borrower and its Subsidiaries is in
material compliance with the foregoing without any known conflict with others.
No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such license, franchise or
other right or affects the rights of any of the Borrower or its Subsidiaries
thereunder which event would have a Material Adverse Effect. There is no
litigation or other proceeding or dispute with respect to the validity or, where
applicable, the extension or renewal, of any of the foregoing.

SS.6.8. LITIGATION. Except as set forth on SCHEDULE 6.8 attached hereto,
there are no actions, suits, proceedings or investigations of any kind pending
or threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, is
reasonably likely, either in any case or in the aggregate, to have a Material
Adverse Effect.

SS.6.9. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries is a party to any contract or agreement that has, in
the judgment of the Borrower's officers, a Material Adverse Effect.

SS.6.10. COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the Borrower nor
any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws,

<PAGE> 38
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or any agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that is reasonably
likely to result in the imposition of substantial penalties or have a Material
Adverse Effect.

SS.6.11. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.

SS.6.12. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.

SS.6.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or rights
thereunder.

SS.6.14. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary, under applicable law, to establish and
perfect the Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower is the owner of the
Collateral free from any lien, security interest, encumbrance and any other
claim or demand, except for Permitted Liens.

SS.6.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 6.15
attached hereto and except for arm's length transactions pursuant to which the
Borrower or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Borrower or such Subsidiary could
obtain from third parties, none of the officers, directors, or employees of the
Borrower or any of its Subsidiaries is presently a party to any transaction with
the Borrower or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.

<PAGE> 39
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SS.6.16. EMPLOYEE BENEFIT PLANS.

SS.6.16.1. IN GENERAL. Except as set forth on SCHEDULE 6.16 attached
hereto, each Employee Benefit Plan and each Guaranteed Pension Plan has
been maintained and operated in compliance in all material respects with
the provisions of ERISA and, to the extent applicable, the Code, including
but not limited to the provisions thereunder respecting prohibited
transactions and the bonding of fiduciaries and the persons handling plan
funds as required by ss.412 of ERISA. The Borrower has heretofore delivered
to the Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted
under ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.

SS.6.16.2. TERMINABILITY OF WELFARE PLANS. Except as set forth on
SCHEDULE 6.16 attached hereto, no Employee Benefit Plan which is an
employee welfare benefit plan within the meaning of ss.3(1) or ss.3(2)(B)
of ERISA provides benefit coverage subsequent to termination of employment
except as required by Title I, Part 6 of ERISA or applicable state
insurance laws.

SS.6.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment of a Guaranteed Pension Plan
pursuant to ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event, or any other event or condition which presents a material risk of
termination of any Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each case occurred
within twelve months of the date of this representation), and on the
actuarial methods and assumptions employed for that valuation, the accrued
benefit liabilities of all such Guaranteed Pension Plans within the meaning
of ss.4001 of ERISA did not exceed the aggregate value of the assets of all
such Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in excess
of benefit liabilities by more than $1,500,000.

SS.6.16.4 MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
ss.4241 or ss.4245 of ERISA or is at risk of entering

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reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under ss.4041A of ERISA.

SS.6.17. REGULATIONS U AND X. The proceeds of the Revolving Credit Loans
shall be used for general corporate purposes including, without limitation, to
consummate the Acquisition in accordance with the Acquisition Documents. No
portion of any Revolving Credit Loan is to be used for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.

SS.6.18. REAL ESTATE. The Borrower has reasonable knowledge of the past and
present condition and usage of the Real Estate presently owned or leased by the
Borrower or any of its Subsidiaries and the operations conducted thereon and,
based upon such knowledge, has determined that:

(a) none of the Borrower, its Subsidiaries or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a Material
Adverse Effect;

(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA) as a
potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;

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(c) (i) no portion of the Real Estate has been used by the Borrower or
any of its Subsidiaries or, to the knowledge of the Borrower, by any other
Person for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws; and, to
the knowledge of the Borrower, no underground tank or other underground
storage receptacle for Hazardous Substances which is not in compliance with
applicable Environmental Laws is located on any portion of the Real Estate;
(ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or operators of its properties, no Hazardous Substances have
been generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws; (iii) there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping)
by the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, by any other Person of Hazardous Substances on, upon, into or
from the Real Estate, which releases would have a material adverse effect
on the value of any of the Real Estate or adjacent properties; and (iv) to
the best of the Borrower's knowledge, there have been no releases on, upon,
from or into any real property in the vicinity of any of the Real Estate
which, through soil or groundwater contamination, have come to be located
on, and which would have a material adverse effect on the value of, the
Real Estate; and

(d) none of the Borrower and its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to
the effectiveness of any other transactions contemplated hereby.

SS.6.19. BROKER-DEALER SUBSIDIARIES. Each of the Broker-Dealer Subsidiaries
is duly registered as a broker-dealer with the Securities Exchange Commission
under the Exchange Act, is a member in good standing of the NASD and the
securities exchanges listed on SCHEDULE 6.19(A) attached hereto and is duly
registered, licensed or qualified as a broker or dealer under the laws of each
jurisdiction listed on SCHEDULE 6.19(A) attached hereto. Each Broker-Dealer
Subsidiary is in compliance with the Exchange Act and the rules and regulations
thereunder applicable to it, the rules and regulations of the NASD applicable to
it (including the NASD's rules of fair practice), the rules and regulations of
the securities exchanges of which it is a member, and the laws of each
jurisdiction where it is registered as a broker or dealer, except for such
instances of non- compliance (a) that relate to a matter set forth on SCHEDULE
6.19(B) attached hereto or (b) the correction of which would not interfere
significantly with the ability of such Broker-Dealer Subsidiary to conduct its
business substantially as currently conducted or significantly diminish the
value of the Borrower and its Subsidiaries, taken as a whole. Each of the
Broker-Dealer Subsidiaries acts pursuant to written agreements and related
documentation (collectively, the "Broker-Dealer Agreements") with parties to
whom it provides broker dealer services. The Broker-

<PAGE> 42
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Dealer Agreements have not been modified by any terms that are not included in
the Broker-Dealer Subsidiary's files, and none of the Broker-Dealer Subsidiaries
has violated or is in default under, any Broker-Dealer Agreement, except for
such violations or defaults that (a) relate to a matter set forth on SCHEDULE
6.19(C) attached hereto or (b) relate to the actions of a registered
representative of such Broker-Dealer Subsidiary where the total liability, cost
and expense relating to all such actions or complaints with respect to the
conduct of such registered representative do not exceed $250,000.

SS.6.20. ADVISORY SUBSIDIARIES. Each of the Advisory Subsidiaries is duly
registered as an investment adviser with the Securities and Exchange Commission
under the Advisers Act and is duly registered, licensed or qualified as an
investment adviser under the laws of each jurisdiction listed on SCHEDULE
6.20(A) attached hereto. Each of the Advisory Subsidiaries is in compliance with
the Advisers Act and the laws of each jurisdiction where it is registered as an
investment adviser, except for such instances of non-compliance (a) that related
to a matter set forth on SCHEDULE 6.20(B) attached hereto, or (b) the correction
of which would not interfere significantly with the ability of such Advisory
Subsidiary to conduct its business substantially as currently conducted or
significantly diminish the value of the Borrower and its Subsidiaries, taken as
a whole. Each of the Advisory Subsidiaries acts pursuant to an Advisory
Agreement with parties to whom they provide investment advisory services. Each
Advisory Agreement complies as to form with the requirements of the Advisers
Act. The Advisory Agreements have not been modified by any terms, oral or
otherwise, that are not included in the Advisory Subsidiaries' files, and none
of the Advisory Subsidiaries has violated, or is in default under, any Advisory
Agreement, except for such violations or defaults (a) that relate to a matter
set forth on SCHEDULE 6.20(C) attached hereto, or (b) the correction of which
would not interfere significantly with the ability of such Advisory Subsidiary
to conduct its business substantially as currently conducted or significantly
diminish the value of the Borrower and its Subsidiaries, taken as a whole.

SS.6.21. INVESTMENT FUND CLIENTS. SCHEDULE 6.21 (as such schedule may be
supplemented from time to time by the Borrower) sets forth a list of all
agreements (the "Fund Agreements") pursuant to which the Borrower or any of its
Subsidiaries performs investment advisory, administration or distribution
services for the benefit of any Fund or Trust. Each Trust is registered as an
investment company under the Investment Company Act. All outstanding shares of
each Trust that are required to be registered under the Securities Act have been
sold pursuant to an effective registration statement filed thereunder or qualify
for an exemption from registration thereunder and have been qualified for sale
under applicable "blue sky" laws. No such registration statement contained, as
of its effective date, and no prospectus or other offering material used in
connection with the sale of shares of any Trust contained, as of any date on
which it was used, any untrue statement of a material fact or omitted to state a
material fact required to be stated therein in order to make the statements
therein not misleading. Each Fund Agreement complies as to form with the
requirements of the Investment Company Act and, to the knowledge of the
Borrower, has been adopted in compliance with the requirements of such Act. To
the knowledge of the Borrower, the Fund Agreements have not been modified by any
terms, oral or otherwise, that are

<PAGE> 43
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not included in the Borrower's and the Subsidiaries' files and none of the
Borrower or its Subsidiaries has any liability under any Fund Agreement, except
for such violations or defaults (a) that relate to a matter set forth on
SCHEDULE 6.21 attached hereto or (b) the correction of which would not interfere
significantly with the ability of the Borrower or any Subsidiary of the Borrower
to conduct its business substantially as currently conducted or significantly
diminish the value of the Borrower and its Subsidiaries, taken as a whole.

SS.6.22. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935. The Borrower is not
an "investment company" as such term is defined in the Investment Company Act.

SS.6.23. DISCLOSURE. None of this Credit Agreement, any of the other Loan
Documents, any of the Acquisition Documents, any proxy statement sent to a Fund
or a Trust in connection with the Acquisition, or any of the consent letters
sent to the advisory clients of the Advisory Subsidiaries in connection with the
Acquisition contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower in the case of any document or information
not furnished by it) necessary in order to make the statements herein or in each
such document not misleading.

SS.6.24. FISCAL YEAR. The Borrower and each of its Subsidiaries has a
fiscal year which is the twelve months ending on December 31 of each year.

SS.6.25. ACQUISITION DOCUMENTS. The Borrower has heretofore furnished to
the Banks, true, complete and correct copies of the Acquisition Documents
(including schedules, exhibits and annexes thereto). The Acquisition Documents
have not subsequently been amended, supplemented, or modified and constitute the
complete understanding among the parties thereto in respect of the matters and
transactions covered thereby.

SS.6.26. OTHER REPRESENTATIONS, ETC. (a) All of the representations and
warranties of the Borrower made in the other Loan Documents and the Acquisition
Documents are true and correct in all material respects. The Banks are entitled
to rely on the Borrower's representations and warranties set forth in the
Contribution Agreement with the same force and effect as though they were
incorporated in this Credit Agreement.

(b) The representations and warranties contained herein and in the other
Loan Documents are the only representations and warranties made by the Borrower
in connection with the transactions contemplated by this Credit Agreement.

<PAGE> 44
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SS.7. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Revolving Credit Loan or Note is outstanding or any
Bank has any obligation to make any Revolving Credit Loans:

SS.7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans and
the commitment fees and Agent's fee provided for in this Credit Agreement, all
in accordance with the terms of this Credit Agreement and the Notes.

SS.7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Boston, Massachusetts, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.

SS.7.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence
and amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves.

SS.7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:

(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as
at the end of such year, and the related consolidated statement of income
and consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for such year, each setting
forth in comparative form the figures for the previous fiscal year and all
such consolidated and consolidating statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
certified without qualification by nationally recognized independent
certified public accountants;

(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower,
copies of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries and the unaudited consolidating balance sheet of the Borrower
and its Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow
and consolidating statement of income and consolidating statement of cash
flow for the portion of the Borrower's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the principal
financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents in all

<PAGE> 45
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material respects the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments);

(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of EXHIBIT C attached hereto (a "Compliance Certificate") and
setting forth in reasonable detail computations evidencing compliance with
the covenants contained in ss.9 hereof and (if applicable) reconciliations
to reflect changes in generally accepted accounting principles since the
Balance Sheet Date;

(d) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower;

(e) contemporaneously with the filing thereof with the New York Stock
Exchange, copies of all quarterly Focus Reports of the Broker-Dealer
Subsidiaries; and

(f) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Bank may
reasonably request.

SS.7.5. NOTICES.

SS.7.5.1. DEFAULTS. The Borrower will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or obligor,
whether as principal or surety, the Borrower shall forthwith give written
notice thereof to each of the Banks, describing the notice or action and
the nature of the claimed default.

SS.7.5.2. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Agent in writing
of any setoff, claims, withholdings or other defenses to which any of the
Collateral, or the Agent's rights with respect to the Collateral, are
subject.

SS.7.5.3. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Agent in writing
within fifteen (15) days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and proceedings affecting
the Borrower or any of its Subsidiaries or to which the Borrower or any of
its Subsidiaries is or becomes a party involving an uninsured claim against
the Borrower or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of its
Subsidiaries to, give notice to the

<PAGE> 46
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Agent, in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess of
$2,000,000.

SS.7.5.4. CLAIMS UNDER ACQUISITION DOCUMENTS. The Borrower will,
immediately upon becoming aware thereof, give notice to the Agent in
writing of any claims made under ss.9 of the Contribution Agreement.

SS.7.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; PROVIDED that nothing in this
ss.7.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that does not in the aggregate have a Material Adverse
Effect.

SS.7.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and, with respect to the Borrower, in accordance with the
terms of the Security Agreement. The Borrower shall deliver to the Agent, no
later than December 31, 1996, certified copies of all policies evidencing the
Borrower's and its Subsidiaries' insurance.

SS.7.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
(other than taxes, assessments and other governmental charges imposed by foreign
jurisdictions that in the aggregate are not material to the business or assets
of the Borrower on an individual basis or of the Borrower and its Subsidiaries
on a consolidated basis) imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that the Borrower
and

<PAGE> 47
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each Subsidiary of the Borrower will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor.

SS.7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.

SS.7.9.1. GENERAL. The Borrower shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries to
examine the books of account of the Borrower and its Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with, and to be
advised as to the same by, its and their officers, all at such intervals as
the Agent or any Bank may reasonably request, PROVIDED that, unless an
Event of Default has occurred and is continuing, all such inspections shall
be upon reasonable notice and at reasonable times and the Banks shall be
only entitled to make one such inspection in any calendar quarter.

SS.7.9.2. COMMUNICATION WITH ACCOUNTANTS. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrower's independent certified public accountants and authorizes
such accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries, PROVIDED, however, that if no Event of Default has occurred
and is continuing, any communication with the Borrower's accountants shall
be coordinated through the Borrower and will not be conducted without the
Borrower's participation. At the request of the Agent, the Borrower shall
deliver a letter addressed to such accountants instructing them to comply
with the provisions of this ss.7.9.2.

SS.7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. (a) The
Borrower will, and will cause each of its Subsidiaries to, comply with (i) the
provisions of its charter documents and by- laws, (ii) all agreements and
instruments by which it or any of its properties may be bound and (iii) all
applicable decrees, orders, and judgments.

(b) The Borrower will cause each of its Advisory Subsidiaries to maintain
its registration as an investment adviser under the Advisers Act and each of its
Broker-Dealer Subsidiaries to maintain its registration as a broker or a dealer
under the Exchange Act, PROVIDED that nothing in this sentence shall prevent any
such Subsidiary from discontinuing such registration if such discontinuation is,
in the judgment of the Borrower, desirable for the conduct of their business and
such discontinuations, in the aggregate, do not have a Material Adverse Effect.
Each of the Borrower and its Subsidiaries will comply, and will use reasonable
efforts to cause each Fund and Trust to comply to the extent applicable (subject
to the discretion of its trustees or directors), with the Investment Company
Act, the Advisers Act, the Exchange Act, the Securities Act (including the
continued registration of the shares representing beneficial interests of, or
common stock in, each Fund or Trust), the rules

<PAGE> 48
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and regulations of the NASD, subchapter M of the Code (to the extent of each
Fund's or Trust's continued qualification as a regulated investment company
thereunder and subject to the Borrower's or the applicable Advisory Subsidiary's
reasonable business judgment that such compliance is not in the interests of
such Fund or Trust), the Commodities Act, any other law, statue, rule or
regulation governing investment advisers, investment companies, broker-dealers,
underwriters, custodians or transfer agents, including capital requirements, and
all other valid and applicable statutes, ordinances, zoning and building codes
and other rules and regulations of the United States of America, of the states
and territories thereof and their counties, municipalities and other
subdivisions and of any foreign country or other jurisdictions applicable to
such Person, except where compliance therewith shall at the time be contested in
good faith by appropriate proceedings.

(c) If at any time while any Revolving Credit Loan or Note is outstanding
or any Bank has any obligation to make Revolving Credit Loans hereunder, any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all reasonable steps within the power
of the Borrower to obtain such authorization, consent, approval, permit or
license and furnish the Banks with evidence thereof.

SS.7.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon the
request of the Agent, furnish to the Agent a copy of the most recent actuarial
statement required to be submitted under ss.103(d) of ERISA and Annual Report,
Form 5500, with all required attachments, in respect of each Guaranteed Pension
Plan and (b) promptly upon receipt or dispatch, furnish to the Agent any notice,
report or demand sent or received in respect of a Guaranteed Pension Plan under
ss.ss.302, 4041, 4042, 4043, 4063, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.

SS.7.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely for general corporate purposes, including, without
limitation, to consummate the Acquisition.

SS.7.13. INTEREST RATE PROTECTION ARRANGEMENTS. Within 90 days after the
Closing Date, the Borrower will enter into arrangements in form and substance
satisfactory to the Agent (the "Interest Rate Protection Arrangements") which
will protect the Borrower from the effect of increases in the interest rates
applicable to a notional amount of at least 50% of the Total Commitment, and the
Borrower will maintain such Interest Rate Protection Arrangements in effect for
no less than two years. The Agent hereby acknowledges that an interest rate cap
which is 200 basis points "out of the money" is satisfactory for purposes of
this ss.7.13.

SS.7.14. ADDITIONAL SUBSIDIARIES. (a) If, after the Closing Date, the
Borrower acquires, either directly or indirectly, any Subsidiary, it will notify
the Banks within three (3) Business Days of such acquisition and provide the
Banks with an updated SCHEDULE 6.2(B).

<PAGE> 49
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(b) The Borrower shall cause each of its Subsidiaries (other than
Broker-Dealer Subsidiaries) that are not parties on the Closing Date to the
Guaranty to execute and deliver to the Banks, on the date which is five (5)
Business Days after such Person becomes a Subsidiary of the Borrower, an
Instrument of Adherence to the Guaranty, together with such supporting
documentation, including legal opinions and corporate authority documents as the
Banks may reasonably request.

(c) The Borrower shall cause each Broker-Dealer Subsidiary to execute and
deliver to the Banks an Instrument of Adherence to the Guaranty, together with
such supporting documentation, including legal opinions and corporate authority
documents as the Banks may reasonably request, on the date which is five (5)
Business Days after the later of (i) the date on which such Person becomes a
Subsidiary of the Borrower and (ii) the date on which the net capital
requirements under the Exchange Act are no longer applicable to such
Broker-Dealer Subsidiary or permit the execution and delivery of such Instrument
of Adherence by such Broker-Dealer Subsidiary.

SS.7.15 FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.

SS.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that, so long as any Revolving Credit Loan or Note is outstanding or
any Bank has any obligation to make any Revolving Credit Loans:

SS.8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:

(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;

(b) current liabilities incurred in the ordinary course of business
not incurred through (i) the borrowing of money, or (ii) the obtaining of
credit except for credit on an open account basis customarily extended and
in fact extended in connection with normal purchases of goods and services;

(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of ss.7.8;

(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower or
such Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review;

<PAGE> 50
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(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;

(f) obligations under Capitalized Leases and in respect of other fixed
asset financings whether or not characterized as Capitalized Leases not
exceeding at any time (i) $27,000,000 in aggregate amount outstanding
during the period from the Closing Date through March 31, 1997, (ii)
$27,500,000 in aggregate amount outstanding during the period from April 1,
1997 through June 30, 1997, (iii) $28,000,000 in aggregate amount
outstanding during the period from July 1, 1997 through September 30, 1997,
(iv) $28,500,000 in aggregate amount outstanding during the period from
October 1, 1997 through December 31, 1997, (v) $31,000,000 in aggregate
amount outstanding during the period from January 1, 1998 through December
31, 1998, (vi) $33,000,000 in aggregate amount outstanding during the
period from January 1, 1999 through December 31, 1999, (vii) $35,000,000 in
aggregate amount outstanding during the period from January 1, 2000 through
December 31, 2000, and (viii) $37,000,000 in aggregate amount outstanding
at any time thereafter;

(g) Indebtedness of the Subsidiaries existing on the date of this
Credit Agreement and listed and described on SCHEDULE 8.1 attached hereto
and any renewals, extensions or refinancings thereof, provided that such
renewals, extensions or refinancings shall not increase (i) the amount of
collateral securing such Indebtedness or (ii) the aggregate amount of such
Indebtedness outstanding on the date hereof;

(h) Indebtedness of a Broker-Dealer Subsidiary incurred in connection
with standard and customary securities trading transactions, PROVIDED that
such Indebtedness is either without recourse to any assets of such
Broker-Dealer Subsidiary other than, or is fully secured by, the securities
to which such securities trading transactions relate (the Banks hereby
acknowledging that the form of agreement attached as SCHEDULE 8.1(H), when
modified to provide that the Indebtedness to be incurred thereunder is
either without recourse to any assets of the borrower thereunder other
than, or is fully secured by, the securities to which securities
transactions financed thereby relate, is satisfactory);

(i) Indebtedness of a Subsidiary of the Borrower to the Borrower;

(j) Indebtedness in respect of Interest Rate Protection Arrangements
permitted under ss.7.13 hereof;

(k) Indebtedness of the Borrower in respect of the subordinated notes
issued to members of the Employee Group pursuant to ss.8.4(a) hereof; and

(l) unsecured subordinated Indebtedness of the Borrower in respect of
a Bridge Financing, PROVIDED that (i) no principal payments shall be made
in respect of such Bridge Financing until the Obligations have been
indefeasibly paid in full and the Commitments terminated except if (A) such
repayment is made with the proceeds received by the Borrower from the sale
of its Equity

<PAGE> 51
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Securities, (B) such repayment is made within 120 days of the incurrence of
such Bridge Financing and (C) no Event of Default shall have occurred and
be continuing on the date of such repayment or shall occur as a result
thereof, and (ii) all other terms and conditions of such Bridge Financing
shall be satisfactory to the Majority Banks;

(m) unsecured subordinated Indebtedness of the Borrower in addition to
any Bridge Financing, PROVIDED, that (i) no principal payments shall be
made in respect of such subordinated Indebtedness until the Obligations
have been indefeasibly paid in full and the Commitments terminated and (ii)
all other terms and conditions of such subordinated Indebtedness shall be
satisfactory to the Majority Banks; and

(n) Indebtedness of the Subsidiaries of the Borrower, in addition to
the Indebtedness described elsewhere in this ss.8.1, in an aggregate amount
not to exceed $10,000,000 outstanding at any time, PROVIDED that until such
time as Freedom Capital has delivered an Instrument of Adherence to the
Guaranty and a Stock Pledge Agreement as contemplated in ss.5.3 hereof, the
aggregate outstanding Indebtedness of Freedom Capital shall not exceed
$3,000,000 at any time.

SS.8.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (i) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; (v) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse, except that the Borrower and its
Subsidiaries may sell assets to the extent permitted under ss.8.5.2 hereof; or
(vi) enter into, or permit to remain in effect, any agreement or arrangement by
which such Person agrees not to encumber, mortgage, pledge, restrict or grant a
security interest in any of its assets; PROVIDED that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:

(a) liens in favor of the Borrower on all or part of the assets of
Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries of
the Borrower to the Borrower;

(b) liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims
for labor, material or supplies in respect of obligations not overdue;

<PAGE> 52
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(c) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations;

(d) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by ss.8.1(d) hereof;

(e) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;

(f) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower or a Subsidiary of the Borrower is a party,
and other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Subsidiaries,
which defects do not individually or in the aggregate have a materially
adverse effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;

(g) presently outstanding liens listed on SCHEDULE 8.2 attached hereto
and other liens securing renewals, extensions or refinancings of
Indebtedness on SCHEDULE 8.1 to the extent permitted under ss.8.1(g);

(h) liens in respect of Indebtedness of Broker-Dealer Subsidiaries
permitted by ss.8.1(h) hereof;

(i) liens filed in respect of Capitalized Leases permitted under
ss.8.1(f) hereof;

(j) liens in respect of securities repurchase agreements of a
Broker-Dealer Subsidiary;

(k) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents; and

(l) involuntary liens which do not secure any obligation which is
otherwise prohibited by this Agreement and which are removed or discharged
within thirty (30) days so long as (i) the Borrower immediately (and in any
event within ten days of imposition of the lien) gives the Banks written
notice of the lien, (ii) the Borrower in the Banks' reasonable judgment is
taking all reasonable steps to remove the lien, (iii) in the Banks'
reasonable judgment there is a reasonable likelihood the lien will be
removed and (iv) no foreclosure proceedings are instituted or execution
levied.

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SS.8.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except:

(a) in marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase
by the Borrower;

(b) in demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000;

(c) in securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Moody's
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's;

(d) Investments existing on the date hereof and listed on SCHEDULE 8.3
attached hereto;

(e) Investments by the Borrower with respect to Indebtedness permitted
by ss.8.1(i) hereof so long as such entities remain Subsidiaries of the
Borrower;

(f) Investments in investment companies sponsored by the Borrower or
any of its Subsidiaries for which any Advisory Subsidiary is or will become
an investment adviser;

(g) Investments consisting of the Guaranty and the Instruments of
Adherence delivered after the Closing Date pursuant to ss.7.14 hereof;

(h) Investments by the Borrower in Subsidiaries of the Borrower;

(i) Investments by the Broker-Dealer Subsidiaries; and

(j) Investments by the Borrower and Subsidiaries of the Borrower
(other than the Broker-Dealer Subsidiaries), PROVIDED that the aggregate
amount of such Investments does not exceed, at any time, an amount equal to
(a) $10,000,000 PLUS (b) 100% of the net proceeds received by the Borrower
from the sale by the Borrower of its Equity Securities after the Closing
Date to the extent that such sale does not constitute an Equity Issuance
PLUS (c) 50% of the Net Proceeds of any Equity Issuance MINUS (d) the
amount of any such proceeds which are used make Capital Expenditures under
ss.9.8 hereof;

PROVIDED, HOWEVER, that, with the exception of demand deposits referred to in
ss.8.3(b) hereof such Investments by the Borrower will be considered Investments
permitted by this ss.8.3 only if all actions have been taken to the satisfaction
of the Agent to provide to the Agent, for the benefit of the Banks and the
Agent, a first priority perfected

<PAGE> 54
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security interest in all of such Investments free of all encumbrances other than
Permitted Liens.

SS.8.4. DISTRIBUTIONS. (a) The Borrower will not make any Distributions
other than Distributions in respect of the redemption of Equity Securities owned
by any member of the Employee Group in connection with the termination of such
member's employment with the Borrower or any of its Subsidiaries PROVIDED THAT
(i) the Borrower shall not at any time during any fiscal year pay more than
$1,250,000 in cash in respect of such Distributions (including payments made on
the subordinated notes referred to below), net of the aggregate amount received
by the Borrower in cash from the issuance of its Equity Securities to the
Employee Group during the period commencing on the first day of such fiscal year
and ending on the date of such Distribution (the "Cash Distribution Amount"),
and (ii) the Borrower shall not make any such Distribution in cash if any
Default or Event of Default has occurred and is continuing at the time of such
Distribution, or would result therefrom. All Distributions in respect of the
redemption of Equity Securities owned by any member of the Employee Group (A) in
excess of the Cash Distribution Amount, (B) made during the continuance of a
Default or an Event of Default or (C) which would cause a Default or Event of
Default, shall be made by the Borrower pursuant to subordinated notes which are
reasonably satisfactory to the Agent in all respects.

(b) Except pursuant to applicable net capital requirements under the
Exchange Act and agreements with securities exchanges, neither the Borrower nor
any Subsidiary of the Borrower will enter into or be bound by any agreement
(including covenants requiring the maintenance of specified amounts of net worth
or working capital) restricting the right of any Subsidiary of the Borrower to
make Distributions or extensions of credit to the Borrower (directly or
indirectly through another Subsidiary) unless such agreements are reasonably
acceptable to the Majority Banks, PROVIDED that to the extent that and for so
long as the right of any Subsidiary of the Borrower to make Distributions or
extensions of credit to the Borrower is restricted under any such agreement,
such Subsidiary's net income shall not be included in the calculation of
Consolidated EBITDA.

SS.8.5. MERGER, CONSOLIDATION.

SS.8.5.1 MERGERS AND ACQUISITIONS. The Borrower will not, and will not
permit any of its Subsidiaries to consummate any merger or consolidation or
any asset acquisition or stock acquisition (other than the acquisition of
assets in the ordinary course of business consistent with past practices)
unless (a) no Default or Event of Default has occurred and is continuing at
the time of any such merger, consolidation or acquisition or would result
therefrom and (b) if the Borrower or any Guarantor is a party to any such
merger or consolidation, the Borrower or such Guarantor is the surviving
entity.

SS.8.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, whether in one transaction or a series of
transactions (other than the disposition of assets in the ordinary course
of business, consistent with past practices), other than sales by any
Broker-Dealer

<PAGE> 55
-48-

Subsidiary of Investments permitted under ss.8.3(i) hereof, if in any
fiscal year such assets constitute 10% or more of the Consolidated Total
Assets of the Borrower and its Subsidiaries as of the first day of such
fiscal year.

SS.8.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred, other than any such arrangement which is permitted under ss.8.1(f)
hereof.

SS.8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws, (b) cause to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in accordance with applicable
Environmental Laws, (c) generate any Hazardous Substances on any of the Real
Estate except in accordance with applicable Environmental Laws, (d) conduct any
activity at any Real Estate or use any Real Estate in any manner so as to cause
a release (i.e. releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping into
the environment) of Hazardous Substances on, upon or into the Real Estate or (e)
otherwise conduct any activity at any Real Estate or use any Real Estate in any
manner that would violate in any material respect any Environmental Law or bring
such Real Estate in violation of any Environmental Law.

SS.8.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will:

(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or

(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether or
not such deficiency is or may be waived; or

(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to ss.302(f) or ss.4068 of
ERISA; or

(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of the
Code; or

(e) permit or take any action which would result in the accrued
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans by more than

<PAGE> 56
-49-

$3,000,000, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.

SS.8.9. CHANGE IN TERMS OF EQUITY SECURITIES; ISSUANCE OF EQUITY SECURITIES
BY SUBSIDIARIES. (a) The Borrower will not permit any of its Subsidiaries to
effect or permit any change in or amendment to any document or instrument
pertaining to the terms of such Person's Equity Securities without the prior
written consent of the Banks.

(b) The Borrower will not permit any of its Subsidiaries to issue or sell
any Equity Securities to any Person other than the Borrower or any wholly-owned
Subsidiary of the Borrower.

SS.8.10. FISCAL YEAR. The Borrower will not, and will not permit any of its
Subsidiaries to, change its fiscal year end from that set forth in ss.6.24
hereof.

SS.8.11. STOCKHOLDERS AGREEMENT. The Borrower will not cause or permit to
remain in effect any amendment, waiver, modification or supplement to ss.2 of
the Stockholders Agreement which would adversely affect the corporate governance
and control rights of Lee as set forth in ss.2 of the Stockholder Agreement as
in effect on the date hereof.

SS.9. FINANCIAL COVENANTS OF THE BORROWER AND ITS SUBSIDIARIES.

SS.9.1. LEVERAGE RATIO. The Borrower will not permit, as at the last day of
each fiscal quarter, the Leverage Ratio to exceed 3.25 to 1.00.

SS.9.2. DEBT SERVICE COVERAGE. The Borrower will not permit, as at the last
day of each fiscal quarter ending during each period set forth below, the ratio
of (a) the Consolidated Operating Cash Flow of the Borrower and its Subsidiaries
for the period consisting of the four consecutive fiscal quarters of the
Borrower ending on such date (which shall include, if four consecutive fiscal
quarters shall not have elapsed since the Closing Date, the Consolidated
Operating Cash Flow of the Acquired Company and its Subsidiaries for the fiscal
quarters ending prior to the Closing Date) to (b) the Total Debt Service of the
Borrower for the period consisting of the four consecutive fiscal quarters of
the Borrower ending on such date, PROVIDED, that if four fiscal quarters of the
Borrower have not elapsed since the Closing Date, the Total Debt Service for the
four consecutive fiscal quarters ending on such date shall be deemed to be the
Total Debt Service of the Borrower for the fiscal quarters that have elapsed
since the Closing Date on an annualized basis, to be less than or equal to the
ratio set forth opposite such date below:

<TABLE>
<CAPTION>
Period Ratio
------ -----

<S> <C>
March 31, 1997 through
December 31, 1997 1.50 to 1.00
</TABLE>
<PAGE> 57
-50-

<TABLE>
<S> <C>
January 1, 1998 through
December 31, 1998 1.40 to 1.00

January 1, 1999 through
December 31, 1999 1.20 to 1.00

January 1, 2000 and thereafter 1.10 to 1.00
</TABLE>

SS.9.3. NET WORTH. The Borrower will not permit, at any time, the
Consolidated Net Worth of the Borrower and its Subsidiaries to be less than (a)
$60,000,000, PLUS, on a cumulative basis (b) 50% of positive Consolidated Net
Income of the Borrower and its Subsidiaries earned during each fiscal year of
the Borrower commencing with the fiscal year ending December 31, 1997, PLUS (c)
75% of the Net Proceeds of any Equity Issuance.

SS.9.4. INTEREST COVERAGE. The Borrower will not permit, as at the last day
of each fiscal quarter commencing with the fiscal quarter ending March 31, 1997,
the ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for
the period consisting of the four consecutive fiscal quarters of the Borrower
ending on such date (which shall include, if four consecutive fiscal quarters
shall not have elapsed since the Closing Date, the Consolidated EBITDA of the
Acquired Company and its Subsidiaries for the fiscal quarters ending prior to
the Closing Date), to (b) the Total Interest Expense of the Borrower for the
period consisting of the four consecutive fiscal quarters of the Borrower ending
on such date, PROVIDED that if four fiscal quarters of the Borrower have not
elapsed since the Closing Date, the Total Interest Expense of the Borrower for
the four consecutive fiscal quarters ending on such date shall be deemed to be
the aggregate interest expense for the fiscal quarters that have elapsed since
the Closing Date on an annualized basis, to be less than or equal to 4.00 to
1.00.

SS.9.5. TANGIBLE NET CAPITAL. The Borrower will not permit, as at the end
of any of the fiscal quarters set forth below, the combined Tangible Net Capital
of Tucker Anthony and Sutro to be less than the percentage set forth opposite
such fiscal quarter below of the Total Commitment as at the end of such fiscal
quarter:

<TABLE>
<CAPTION>
Fiscal Percentage of
Quarter Total Commitment
------- ----------------

<S> <C>
September 30, 1997 50%
December 31, 1997 52%

March 31, 1998 56.5%
June 30, 1998 61%
September 30, 1998 65.5%
December 31, 1998 70%

March 31, 1999 73.75%
June 30, 1999 77.5%

</TABLE>

<PAGE> 58
-51-

<TABLE>
<S> <C>
September 30, 1999 81.25%
December 31, 1999 85%

March 31, 2000 88.75%
June 30, 2000 92.5%
September 30, 2000 96.25%
December 31, 2000 and each 100.00%
fiscal quarter thereafter
</TABLE>

SS.9.6. SUBSIDIARY LEVERAGE RATIO. The Borrower will not permit, as at the
last day of each fiscal quarter, the Subsidiary Leverage Ratio of any
Broker-Dealer Subsidiary to exceed 11 to 1.

SS.9.7. NET CAPITAL. The Borrower will not at any time permit (a) Tucker
Anthony to have capital in an amount less than the amount of capital required to
be maintained by it under applicable net capital requirements PLUS $14,000,000
or (b) Sutro to have capital in an amount less than the amount of capital
required to be maintained by it under applicable net capital requirements PLUS
$5,000,000.

SS.9.8. CAPITAL EXPENDITURES. The Borrower will not make, and will not
permit its Subsidiaries to make, Capital Expenditures that exceed, in the
aggregate, an amount (the "Scheduled Capital Expenditures Amount") equal to (a)
$4,500,000 during the period from the Closing Date through December 31, 1997,
(b) $5,000,000 during the period from January 1, 1998 through December 31, 1998,
and (c) $6,000,000 during the period from January 1, 1999 through December 31,
1999 and (d) $7,000,000 in any fiscal year thereafter, PROVIDED that (i) if
during any period the amount of Capitalized Expenditures permitted for that
period is not so utilized, such unutilized amount may be utilized in the next
succeeding period so long as the aggregate amount of Capital Expenditures made
by the Borrower and its Subsidiaries in any fiscal year does not exceed
$10,000,000 and (ii) for purposes of calculating this covenant, Capital
Expenditures which are made with insurance proceeds paid with respect to any
casualty loss and which are made to replace the assets with respect to which
such insurance was paid shall be excluded. Notwithstanding the preceding
sentence, the Borrower and its Subsidiaries may also make Capital Expenditures
at any time in an amount not to exceed the sum of (i) 100% of the net proceeds
received by the Borrower from the sale by the Borrower of its Equity Securities
after the Closing Date, to the extent that such sale does not constitute an
Equity Issuance PLUS (ii) 50% of the Net Proceeds of any Equity Issuance, MINUS
the amount of any such proceeds which are used for Investments pursuant to
ss.8.3(j) hereof.

SS.10. CLOSING CONDITIONS. The obligations of the Banks to make the initial
Revolving Credit Loans shall be subject to the satisfaction of the following
conditions precedent on or before December 31, 1996:

SS.10.1. LOAN DOCUMENTS; ACQUISITION DOCUMENTS.

(a) Each of the Loan Documents shall have been duly executed and delivered
by the respective parties thereto, shall be in full force and effect and shall
be in form and

<PAGE> 59
-52-

substance satisfactory to each of the Banks. Each Bank shall have received a
fully executed copy of each such document.

(b) Each of the Acquisition Documents shall have been executed and
delivered by the respective parties thereto and be in full force and effect.
Each Bank shall be entitled to rely on the opinion delivered by Borrower's
counsel in connection with the Acquisition. Each Bank shall have received
certified copies of each of the Acquisition Documents.

SS.10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower, and each Active Subsidiary of the Borrower a
copy, certified by a duly authorized officer of such Person to be true and
complete on the Closing Date, of each of (a) its charter or other incorporation
documents as in effect on such date of certification, and (b) its by-laws as in
effect on such date.

SS.10.3 CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.

SS.10.4 INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
the Borrower and each of its Active Subsidiaries an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of the
Borrower or such Active Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of each of the Borrower of such Active Subsidiary, each of the
Loan Documents and to which the Borrower or such Active Subsidiary is or is to
become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests; and (c) to give notices and to take other action on its
behalf under the Loan Documents.

SS.10.5 VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
the Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance satisfactory to the Agent.

SS.10.6 LIEN SEARCH CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall
have received from the Borrower and each of its Active Subsidiaries a completed
and fully executed lien search certificate and the results of UCC searches with
respect to its assets, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.

SS.10.7. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and

<PAGE> 60
-53-

otherwise describing the insurance obtained in accordance with the provisions of
the Security Agreement.

SS.10.8. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and the Acquisition and in form and substance
satisfactory to the Banks.

SS.10.9. OPINIONS OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable opinion addressed to the Banks and the Agent, dated as of
the Closing Date, in form and substance satisfactory to the Banks and the Agent
from each of Hutchins, Wheeler & Dittmar, a Professional Corporation counsel to
the Borrower and its Subsidiaries, and Goodwin, Procter & Hoar LLP, counsel to
the Borrower and its Subsidiaries with respect to investment advisory matters.

SS.10.10 PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
Agent, as appropriate, the closing fee and the arrangement fee pursuant to
ss.4.1. hereof.

SS.10.11. CLOSING OF ACQUISITION. The Acquisition shall be simultaneously
duly consummated on the Closing Date in accordance with the Acquisition
Documents and none of the closing conditions or any of the other terms of the
Acquisition Documents shall have been waived by the parties thereto. After
giving effect to the Acquisition, the Borrower shall own all of the outstanding
shares of common stock of the Acquired Company, free and clear of all security
interests, liens and encumbrances, other than the security interest in favor of
the Agent pursuant to the Stock Pledge Agreement.

SS.10.12. CAPITAL CONTRIBUTIONS. The Agent shall have received evidence
satisfactory to the Agent that the Borrower has received a capital contribution
of no less than $75,000,000 in the aggregate consisting of (a) a capital
contribution from Lee consisting of net cash proceeds to the Borrower of not
less than $35,000,000, (b) a capital contribution from SCP consisting of net
cash proceeds to the Borrower of not less than $7,500,000, and (c) a capital
contribution from the Employee Group consisting of net cash proceeds to the
Borrower of not less than $25,000,000, and that the Borrower has used all such
proceeds to consummate the Acquisition. The terms and conditions of all of the
above-described capital contributions to the Borrower shall be satisfactory to
the Banks in all respects.

SS.10.13. COMPLIANCE CERTIFICATE. The Borrower shall have delivered to the
Banks a Compliance Certificate dated the Closing Date and reflecting on a PRO
FORMA basis information accurate as of October 31, 1996.

SS.10.14. FEDERAL RESERVE FORMS U-1. The Borrower shall have completed,
executed and delivered to each Bank a Federal Reserve Form U-1 with respect to
the transactions contemplated herein.

SS.10.15. FINANCIAL CONDITION. The Banks shall have received the financial
statements referred to in ss.6.4.1 hereof, the Banks shall be satisfied that
such financial

<PAGE> 61
-54-

statements fairly present the business and financial condition of (a) the
Borrower and its Subsidiaries and (b) the Acquired Company and its Subsidiaries,
each as of the dates thereof and for the periods then ended, and the Banks shall
be satisfied with the assets and liabilities of the Borrower reflected in the
Pro Forma Balance Sheet. There shall have been no material adverse change in the
business, operations, assets, liabilities or financial condition of Acquired
Company and its Subsidiaries, taken as a whole, since the date of the financial
statements delivered to the Banks pursuant to ss.6.4.1 hereof.

SS.10.16. REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower and the Guarantors in the Loan Documents or
otherwise made by or on behalf of the Borrower or the Guarantors in connection
therewith or after the date thereof shall have been true and correct in all
material respects.

SS.10.17. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement and the other Loan Documents
shall be satisfactory to the Agent and the Agent's Special Counsel in form and
substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.

SS.11. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to make
any Revolving Credit Loan whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:

SS.11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement and the other Loan Documents shall be true as
of the date as of which they were made and, except with respect to the
representation and warranty set forth in ss.6.2(a) hereof, shall also be true at
and as of the time of the making of such Revolving Credit Loan, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate will not have a Material Adverse
Effect, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.

SS.11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan.

SS.11.3 GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.

<PAGE> 62
-55-

SS.11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.

SS.12. EVENTS OF DEFAULT; ACCELERATION; ETC.

SS.12.1 EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:

(a) the Borrower shall fail to pay any principal of the Revolving
Credit Loans when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;

(b) the Borrower shall fail to pay any interest on the Revolving
Credit Loans, the commitment fee, the Agent's fee, or other sums due
hereunder or under any of the other Loan Documents, within three (3) days
of the date when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;

(c) the Borrower shall fail to comply with any of its covenants
contained in ss.ss.5.3, 7, 8 or 9 hereof, (other than ss.7.7 or ss.7.14
hereof) or any of the covenants contained in any of the Security Documents;

(d) (i) the Borrower shall fail to comply with ss.7.7 or ss.7.14
hereof and such failure shall not be remedied for twenty (20) days or (ii)
the Borrower or any of its Subsidiaries shall fail to perform any term,
covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this ss.12) for twenty
(20) days after written notice of such failure has been given to the
Borrower by the Agent;

(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or
in any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;

(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases
in excess of $5,000,000, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money or credit received or in respect of
any Capitalized Leases in excess of $5,000,000 for such period of time as
would permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued

<PAGE> 63
-56-

thereunder to accelerate the maturity thereof and no waiver or forbearance
arrangement shall be in effect with respect thereto;

(g) the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Borrower or any of its Subsidiaries or of any
substantial part of the assets of the Borrower or any of its Subsidiaries
or shall commence any case or other proceeding relating to the Borrower or
any of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, or shall take any action
to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within sixty (60) days following the filing
thereof;

(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries bankrupt or insolvent, or approving a petition in any such
case or other proceeding, or a decree or order for relief is entered in
respect of the Borrower or any Subsidiary of the Borrower in an involuntary
case under federal bankruptcy laws as now or hereafter constituted;

(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final,
nonappealable judgment against the Borrower or any of its Subsidiaries
that, with other outstanding final, nonappealable judgments, undischarged,
against the Borrower or any of its Subsidiaries exceeds in the aggregate
$1,000,000;

(j) any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded or the Agent's security interests or liens in a substantial
portion of the Collateral shall cease to be perfected or shall cease to
have the priority contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof or with the express
prior written agreement, consent or approval of the Banks, or any action at
law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or any of its Subsidiaries party thereto or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;

(k) the Borrower or any ERISA Affiliate incurs any liability upon the
termination of a Guaranteed Pension Plan to the PBGC or a Guaranteed

<PAGE> 64
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Pension Plan pursuant to Title IV of ERISA in an aggregate amount exceeding
$250,000 (provided that nothing in this clause shall preclude the Borrower
or any ERISA Affiliate from making contributions in contemplation of any
standard termination), the Borrower or any ERISA Affiliate is assessed
withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $250,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA
Reportable Event, or a failure to make a required installment or other
payment (within the meaning of ss.302(f)(1) of ERISA), provided the Agent
determines in its reasonable discretion that such event (A) is likely to
result in liability of the Borrower to the PBGC or the Plan in an aggregate
amount exceeding $250,000, and (B) could constitute grounds for the
termination of such Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer such
Plan or for the imposition of a lien in favor of the Guaranteed Pension
Plan; (ii) the appointment by a United States District Court of a trustee
to administer such Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Plan;

(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any part of its
business and such order shall have a Material Adverse Effect;

(m) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a Material Adverse Effect;

(n) (i) at any time prior to a public offering of the Borrower's
Equity Securities under the Securities Act (A) Lee shall, legally or
beneficially, own less than 33-1/3% of the Equity Securities of the
Borrower which it owns on the Closing Date, as adjusted pursuant to any
stock split, stock dividend or recapitalization or reclassification of the
capital of the Borrower, (B) Lee shall fail to maintain representation on
the Board of Directors of the Borrower in the same proportion as its
representation on the Closing Date or fails to maintain its corporate
governance or control rights under ss.2 of the Stockholders Agreement, or
(C) Lee shall, when the Consolidated Revenue of the Borrower and its
Subsidiaries attributable to the Advisory Agreements for the most recently
ended fiscal quarter exceeds 10% of all Consolidated Revenue of the
Borrower and its Subsidiaries for such fiscal quarter, cause an
"assignment" of the Advisory Agreements under the Investment Company Act or
the Advisers Act and such Advisory Agreements shall have not been extended
or replaced with other Advisory Agreements with terms not materially less
favorable to the Borrower and its Subsidiaries and applicable fee rates not
materially less than the previous terms and applicable fee rates or (ii) at
any time after a public offering of the Borrower's Equity Securities under
the Securities Act Lee shall, legally or beneficially, own less than 25% of
the Equity Securities of the Borrower which it owns on the Closing Date, as
adjusted pursuant to any stock

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split, stock dividend or recapitalization or reclassification of the
capital of the Borrower; or

(o) any Guarantor denies that it has any liability or obligations
under the Loan Documents to which it is a party, or shall notify the Agent
or any Bank of the Guarantor's intention to attempt to cancel or terminate
the Guaranty to which it is a party or shall fail to observe any term,
covenant, condition or agreement under any Loan Document to which it is a
party;

then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; PROVIDED that in the event of any Event of Default specified in
ss.ss.12.1(g) or 12.1(h) hereof, all such amounts shall become immediately due
and payable automatically and without any requirement of notice from the Agent
or any Bank.

SS.12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.ss.12.1(g) or 12.1(h) hereof shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all obligations to make Revolving Credit Loans to the
Borrower. If any other Event of Default shall have occurred and be continuing,
or if on any Drawdown Date the conditions precedent to the making of the
Revolving Credit Loans to be made on such Drawdown Date are not satisfied, the
Agent may and, upon the request of the Majority Banks, shall, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Banks shall be relieved of all further obligations
to make Revolving Credit Loans. If any such notice is given to the Borrower the
Agent will forthwith furnish a copy thereof to each of the Banks. No termination
of the credit hereunder shall relieve the Borrower of any of the Obligations or
any of its existing obligations to any of the Banks arising under other
agreements or instruments.

SS.12.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to ss.12.1
hereof, each Bank, if owed any amount with respect to the Revolving Credit
Loans, may, with the consent of the Majority Banks but not otherwise, proceed to
protect and enforce its rights by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note is intended to be exclusive of any other
remedy and each and every remedy shall be cumulative and shall be in addition to
every other remedy given

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hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.

SS.12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following
the occurrence and during the continuance of any Event of Default, the Agent or
any Bank, as the case may be, receives any monies in connection with the
enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:

(a) FIRST, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of, all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral and supports the provision of adequate indemnity to the
Agent against all taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;

(b) SECOND, to all other Obligations in such order or preference as
the Majority Banks may determine; PROVIDED, HOWEVER, that distributions in
respect of such Obligations shall be made (i) PARI PASSU among Obligations
with respect to the Agent's fee payable under ss.4.2 hereof and all other
Obligations and (ii) Obligations owing to the Banks with respect to each
type of Obligation such as interest, principal, fees and expenses, shall be
made among the Banks PRO RATA; and PROVIDED, FURTHER, that the Agent may in
its discretion make proper allowance to take into account any Obligations
not then due and payable;

(c) THIRD, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to ss.9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and

(d) FOURTH, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.

SS.13. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any of the Banks to the Borrower and any securities or other property
of the Borrower in the possession of such Bank may be applied to or set off by
such Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Note held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by the Note held by such Bank,
and (b) if such Bank shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Note held by such Bank by

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proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note held by such
Bank any amount in excess of its ratable portion of the payments received by all
of the Banks with respect to the Notes held by all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Note held by its proportionate payment as contemplated by this Credit
Agreement; PROVIDED that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.

SS.14. THE AGENT.

SS.14.1. AUTHORIZATION.

(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, PROVIDED that
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The Co-Agent shall have no
rights or responsibilities under this Credit Agreement or any of the other
Loan Documents.

(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.

(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of
the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.

SS.14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and

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to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. After an
Event of Default has occurred and is continuing, the Agent may utilize the
services of such Persons as the Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.

SS.14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.

SS.14.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Notes, any
of the other Loan Documents or any instrument at anytime constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes or to
inspect any of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.

SS.14.5. PAYMENTS.

SS.14.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's PRO RATA share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.

SS.14.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under
the

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Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making such distribution until its right to
make such distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.

SS.14.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (a) to make available to the Agent its PRO RATA share of
any Revolving Credit Loan or (b) to comply with the provisions of ss.13
hereof with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by setoff
or otherwise, is in excess of its PRO RATA share of such payments due and
payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Credit Agreement, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall
be deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Revolving Credit Loans,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective PRO RATA shares of all
outstanding Revolving Credit Loans. The Delinquent Bank hereby authorizes
the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective PRO RATA shares of all outstanding Revolving
Credit Loans. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Revolving Credit Loans of the nondelinquent
Banks, the Banks' respective PRO RATA shares of all outstanding Revolving
Credit Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.

SS.14.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note as the absolute owner thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder.

SS.14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.15 hereof), and liabilities of every nature and character arising
out of or related to this Credit Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that any
of the same shall be directly caused by the Agent's willful misconduct or gross
negligence.

SS.14.8. AGENT AS BANK. In its individual capacity, FNBB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment

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and the Revolving Credit Loans made by it, and as the holder of any of the
Notes, as it would have were it not also the Agent.

SS.14.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.

SS.14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.14.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.

SS.15. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) the reasonable fees,
expenses and disbursements of the Agent's Special Counsel and any local counsel
to the Agent incurred in connection with the preparation, of the Loan Documents
and other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder and any
termination hereof, (c) the fees, expenses and disbursements of the Agent
incurred by the Agent in connection with the preparation of the Loan Documents
and other instruments mentioned herein, (d) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Bank or the Agent, and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or an Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Bank's or the Agent's relationship with the Borrower or any of its
Subsidiaries and (e) all reasonable fees, expenses and disbursements of any Bank
or the Agent incurred in connection with UCC searches, UCC filings or mortgage
recordings. The covenants

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of this ss.15 shall survive payment or satisfaction of payment of amounts owing
with respect to the Notes.

SS.16. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower or any of its Subsidiaries of the proceeds of any of the
Revolving Credit Loans; (b) any actual or alleged infringement of any patent,
copyright, trademark, service mark or similar right of the Borrower comprised in
the Collateral, (c) the Borrower or any of its Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents or (d) with
respect to the Borrower and its Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to claims with respect to wrongful death, personal injury or damage
to property), in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Banks and the Agent shall be
entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrower
under this ss.16 are unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The covenants contained in this ss.16
shall survive payment of satisfaction in full of all other obligations.

SS.17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower or any of its Subsidiaries pursuant hereto shall be deemed to have
been relied upon by the Banks and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Banks of the Revolving Credit Loans, as herein contemplated, and shall continue
in full force and effect so long as any amount due under this Credit Agreement
or the Notes or any of the other Loan Documents remains outstanding or any Bank
has any obligation to make any Revolving Credit Loans, and for such further time
as may be otherwise expressly specified in this Credit Agreement. All statements
contained in any certificate or other paper delivered to any Bank or the Agent
at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary
hereunder.

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SS.18. ASSIGNMENT AND PARTICIPATION.

SS.18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it) and the Notes held by it;
PROVIDED that (a) each of the Agent and, unless a Default or Event of Default
shall have occurred and be continuing, the Borrower shall have given its prior
written consent to such assignment, which consent, in each case, will not be
unreasonably withheld, (b) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Credit Agreement, (c) each assignment shall be in a minimum amount of
$5,000,000; (d) FNBB and its Affiliates shall at all times maintain a Commitment
Percentage of at least 11.7647%; (e) The Bank of New York and its Affiliates
shall at all times maintain a Commitment Percentage of at least 11.7647%; and
(f) the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT I attached hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in ss.18.3, be released from its obligations under this Credit Agreement.

SS.18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest;

(b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
and its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations
under this

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Credit Agreement or any of the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto;

(c) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements
referred to in ss.ss.6.4 and 7.4 hereof and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance;

(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement;

(e) such assignee represents and warrants that it is an Eligible
Assignee;

(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;

(g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Credit Agreement are
required to be performed by it as a Bank; and

(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.

SS.18.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to the
Banks from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $2,500.

SS.18.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and

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Acceptance and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Bank in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes. Within five (5) days of issuance of any new Notes pursuant to this
ss.18.4, the Borrower shall deliver an opinion of counsel, addressed to the
Banks and the Agent, relating to the due authorization, execution and delivery
of such new Notes and the legality, validity and binding effect thereof, in form
and substance satisfactory to the Banks. The surrendered Notes shall be
cancelled and returned to the Borrower.

SS.18.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$5,000,000 (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Revolving Credit Loans, extend the term
or increase the Commitment Amount of such Bank as it relates to such
participant, reduce the amount of any commitment fees to which such participant
is entitled or extend any regularly scheduled payment date for principal or
interest.

SS.18.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
PROVIDED that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.

SS.18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.ss.12.1 or 12.2
hereof, and the determination of the Majority Banks shall for all purposes of
this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Revolving Credit Loans. If any Bank
sells a participating interest in any of the Revolving Credit Loans to a
participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such

<PAGE> 75
-68-

participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
ss.ss.12.1 or 12.2 hereof to the extent that such participation is beneficially
owned by the Borrower or any Affiliate of the Borrower, and the determination of
the Majority Banks shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to the interest of such transferor Bank in
the Revolving Credit Loans to the extent of such participation.

SS.18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 hereof with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. If the
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrower and with
the consent of the Borrower and the Majority Banks, appoint another Bank to act
as the Reference Bank hereunder. Anything contained in this ss.18 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized under
ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.

SS.18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.

SS.19. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, telefax or telex and confirmed by delivery via courier or postal
service, addressed as follows:

(a) if to the Borrower, c/o Freedom Securities Corporation, One World
Financial Center, 200 Liberty Street, New York, New York 10281, Attention:
Kevin McKay, or at such other address for notice as the Borrower shall last
have furnished in writing to the Person giving the notice, with copies to
(i) Thomas H. Lee Company, 75 State Street, Boston, Massachusetts 02109,
Attention: Thomas M. Hagerty and (ii) Hutchins, Wheeler & Dittmar, 101
Federal Street, Boston, Massachusetts 02110, Attention: James Westra, Esq.;

(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Carol Clark, Managing Director or such other address
for notice

<PAGE> 76
-69-

as the Agent shall last have furnished in writing to the Person giving the
notice, with a copy to Bingham, Dana & Gould LLP, 150 Federal Street,
Boston, Massachusetts 02110 Attention: Lea Anne Copenhefer, Esq.; and

(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
attached hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.

Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.

SS.20. GOVERNING LAW. THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.19
HEREOF. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.

SS.21. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.

SS.22. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Credit Agreement
it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.

SS.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in ss.25 hereof.

<PAGE> 77
-70-

SS.24. WAIVER OF JURY TRIAL. The Borrower hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of such rights and obligations. Except as prohibited by law, the Borrower hereby
waives any right it may have to claim or recover in any litigation referred to
in the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. The
Borrower (a) certifies that no representative, agent or attorney of any Bank or
the Agent has represented, expressly or otherwise, that such Bank or the Agent
would not, in the event of litigation, seek to enforce the foregoing waivers and
(b) acknowledges that the Agent and each of the Banks have been induced to enter
into this Credit Agreement and the other Loan Documents to which it is a party
by, among other things, the waivers and certifications contained herein.

SS.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Credit Agreement, any consent or approval required or permitted
by this Credit Agreement to be given by one or more or all of the Banks may be
given, and any term of this Credit Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrower of any terms of this Credit Agreement or such other instrument or
the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrower and the written consent
of the Majority Banks. Notwithstanding the foregoing, the rate of interest on
the Notes (other than interest accruing pursuant to ss.4.12 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), the maturity of the Notes, the Commitment Amount or
the Commitment Percentages of the Banks, and the amount of commitment fee
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank affected thereby; the definition of Majority Banks
and this ss.25 may not be amended, no Guarantor may be released of its
obligations under the Guaranty, and the Agent's lien on the Collateral may not
be released without the written consent of all of the Banks; and the amount of
the Agent's fee and ss.14 hereof may not be amended without the written consent
of the Agent. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.

SS.26. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.

<PAGE> 78
-71-

IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.

JHFSC ACQUISITION CORP.

By: /s/ John Goldsmith
-----------------------------------
Name:
Title:

THE FIRST NATIONAL BANK OF
BOSTON, individually and as Agent

By: /s/ Carol A. Clark
-----------------------------------
Title:

THE BANK OF NEW YORK, individually
and as Co-Agent

By: /s/ Daniel F. Klinger
-----------------------------------
Title: V.P.

FLEET NATIONAL BANK

By: /s/ Duly Authorized
-----------------------------------
Title: Vice President

CREDIT LYONNAIS NEW YORK BRANCH

By: /s/ Sebastian Rocco
-----------------------------------
Title: Sebastian Rocco
First Vice President

<PAGE> 1
EXHIBIT 10.4

ADDITIONAL SHARE AGREEMENT

This Agreement is entered into as of the 29th day of November, 1996 by
and between JHFSC Acquisition Corp., a Delaware corporation (the "Company"), and
John Hancock Subsidiaries, Inc., a Delaware corporation ("Hancock").

WHEREAS, pursuant to a certain Contribution Agreement dated October 4,
1996 among Hancock, the Company and certain other parties (the "Contribution
Agreement") Hancock is acquiring 394,653.7 shares of the common stock, par value
$.01 per share, of the Company ("Common Stock"), representing 4.999% of the
issued and outstanding capital stock of the Company on the date hereof (the
"Shares");

WHEREAS, the Company intends to grant options or other rights to
purchase Common Stock of the Company to employees or directors of the Company
pursuant to any incentive share programs or other stock plans established during
the period commencing on the date hereof and ending two (2) years from the date
hereof (each, an "Incentive Share Program"); and

WHEREAS, the Company has agreed to protect Hancock from any dilution
which may occur as a result of the issuance by the Company of Incentive Shares
(as hereafter defined).

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1. ISSUANCE OF ADDITIONAL SHARES. In the event the Company issues any
Incentive Shares, the Company will, for no additional consideration, issue and
deliver to Hancock, a certificate in the name of Hancock representing that
number of shares of Common Stock equal to 4.999% of the Incentive Shares issued
(the "Additional Shares"). The term "Incentive Shares"

<PAGE> 2

shall mean any and all shares of Common Stock issued pursuant to an Incentive
Share Program up to an aggregate number of shares of Common Stock equal to
975,000, (which number shall be subject to adjustment for any stock split, stock
dividend or other form of recapitalization which occurs after the date hereof).
In no event shall Hancock have any right to receive Additional Shares pursuant
to this Agreement resulting from any issuance of shares of Common Stock pursuant
to an Incentive Share Program in excess of an aggregate of 975,000 shares of
Common Stock (which number shall be subject to adjustment for any stock split,
stock dividend or other form of recapitalization which occurs after the date
hereof).

2. INITIAL PUBLIC OFFERING. Upon the effective date of an initial
public offering of the Common Stock, the Company shall have the option to issue
to Hancock on such date the maximum number of Additional Shares to which Hancock
is entitled under Section 1 hereof (less any Additional Shares previously issued
to Hancock hereunder) regardless of whether the full number of Incentive Shares
have actually been issued under an Incentive Share Program (the "Accelerated
Additional Shares"). The Company shall have the right to repurchase the
Accelerated Additional Shares for a purchase price of $.01 per share to the
extent the Incentive Shares to which the Accelerated Additional Shares relate
are not ultimately issued under the Incentive Share Program.

3. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to Hancock that the Additional Shares, when issued and delivered in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and nonassessable.

4. LEGENDS. The certificates representing the Additional Shares shall
bear the same legends as set forth on the certificate(s) representing the
Shares.

-2-

<PAGE> 3

5. INVESTMENT REPRESENTATION. The representations and warranties of
Hancock set forth in Section 3.06 of the Contribution Agreement shall be deemed
remade by Hancock to the Company as of the date of the issuance of the
Additional Shares (except to the extent such representations are inaccurate as a
result of the proposed sale of all or greater than a majority of the issued and
outstanding stock of the Company in a single transaction or a proposed sale
pursuant to a tag-along right or a public offering) and the Company shall be
entitled to rely on such representations and warranties in issuing and
delivering said Additional Shares.

6. COMMUNICATIONS. Any communications hereunder shall be deemed
sufficiently given if sent to the appropriate party in accordance with the terms
and at the addresses set forth in Section 13 of the Contribution Agreement.

7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

8. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof. The parties may amend or modify this Agreement only by
written instrument executed by each of the Company and Hancock.

9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.

-3-

<PAGE> 4

10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
be one in the same document.

JHFSC ACQUISITION CORP.

By: /s/ John Goldsmith
---------------------------
Name: John Goldsmith
Title: President

JOHN HANCOCK SUBSIDIARIES, INC.

By: /s/ John T. Farady
---------------------------
Name: John T. Farady
Title: Treasurer

-4-

<PAGE> 1
EXHIBIT 10.5

TAX MATTERS AGREEMENT

TAX MATTERS AGREEMENT dated as of November 29, 1996 (the "Agreement")
among JHFSC Acquisition Corp., a Delaware corporation ("Newco") and John Hancock
Subsidiaries, Inc., a Delaware corporation ("Hancock").

WITNESSETH

WHEREAS, Hancock owns all of the issued and outstanding shares of
common stock, no par value of John Hancock Freedom Securities Corporation, a
Massachusetts corporation (the "Company");

WHEREAS, Newco, Hancock, Lee and SCP have entered into a Contribution
Agreement dated October 4, 1996;

WHEREAS, Newco and Hancock desire to memorialize their agreements
regarding certain matters pertaining to Taxes (as defined below).

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and in the Contribution Agreement, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

Section 1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:

"AFFILIATE" shall mean, with respect to any entity, any other
individual, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust or unincorporated
organization which directly or indirectly controls, is controlled by or
is under common control with such entity.

"CODE" shall mean the Internal Revenue Code of 1986, as amended.

"COMBINED GROUP" shall mean any "affiliated group" (as defined in
Section 1504(a) of the Code) of which Hancock is a member and any other
group of corporations that, at any time on or before the Closing Date,
files or has filed Tax Returns on a combined, consolidated or unitary
basis with the Company or its Subsidiaries (other than such a group
which includes the Company and/or one or more of its Subsidiaries, but
not other corporations).

"CLOSING DATE" shall have the meaning set forth in the
Contribution Agreement.

<PAGE> 2

"CURRENT YEAR PAYMENTS" shall have the meaning set forth in
Section 4(a)(1) hereof.

"CURRENT YEAR TAXES" shall have the meaning set forth in Section
4(a)(1) hereof.

"HANCOCK GROUP MEMBER" shall mean Hancock and any Affiliates of
Hancock (other than the Company and its Subsidiaries) and their
respective successors and assigns.

"NEWCO GROUP MEMBER" shall mean Newco and after the Closing Date,
the Company and its Subsidiaries and their respective successors and
assigns.

"REGULATIONS" shall mean Treasury Regulations promulgated under
the Code.

"SHARES" shall mean Shares as that term is defined in the
Contribution Agreement.

"STUB PERIOD" shall have the meaning set forth in Section 4(a)(1)
hereof.

"STUB PERIOD TAXES" shall have the meaning set forth in Section
4(a)(1) hereof.

"SUBSIDIARY" shall mean Subsidiary as that term is defined in the
Contribution Agreement.

"TAX" means any federal, state and local and foreign taxes,
levies, deficiencies or other assessments and other charges of whatever
nature (including income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock franchise, profits,
withholding, backup withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated)
imposed by any taxing authority, as well as any obligation to
contribute to the payment of Taxes determined on a consolidated,
combined or unitary basis with respect to the Company or any affiliate,
including any interest, penalty (civil or criminal), or addition
thereto, whether disputed or not, as well as any expenses incurred in
connection with the determination, settlement or litigation of any
liability.

"TAX PACKAGE" has the meaning set forth in Section 5(c).

"TAX RETURN" means any federal, state, local and foreign return,
declaration, report, claim for refund, amended return, declarations of
estimated Tax or information return or statement relating to Taxes, and
any schedule or attachment thereto, filed or maintained, or required to
be filed or maintained in connection with the calculation,
determination, assessment or collection of any Tax, and including any
amendment thereof, as well as, where permitted or required, combined or
consolidated returns for any group of entities that include the Company
or any Subsidiary.

- 2 -

<PAGE> 3

Section 2. TAXES. Except as set forth on SCHEDULE 2:

(a) Each of the Company and its Subsidiaries has filed all Tax
Returns that it was required to file on or before the Closing Date. All such Tax
Returns were correct and complete in all material respects. All Taxes owed and
required to have been paid on or before the Closing Date by any of the Company
and its Subsidiaries have been paid (whether or not shown on any Tax Return).
None of the Company and its Subsidiaries currently is the beneficiary of any
extension of time within which to file any Tax Return. No Claim has ever been
made by an authority in a jurisdiction where the Company or any of its
Subsidiaries does not file Tax Returns that it is or may be subject to the
imposition of any Tax by that jurisdiction.

(b) Each of the Company and its Subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, consultant, independent contractor,
creditor, stockholder, or other third party.

(c) Upon request by Newco, Hancock shall provide all federal,
state and local income Tax Return information in connection with Tax Returns
(and all Tax Returns not including any Hancock Group Member) filed with respect
to any of the Company and its Subsidiaries for all open Taxable periods,
indicating those Tax Returns that have been audited, and indicating those Tax
Returns that currently are the subject of audit. Hancock has made available to
Newco correct and complete copies of all requested Company and Subsidiary
federal and state income Tax information included in a consolidated, combined or
unitary filing, all other state Tax Returns, all federal and state examination
reports, and statements of deficiencies assessed against or agreed to by any of
the Company and its Subsidiaries for all Taxable periods for which the statute
of limitations has not expired.

(d) None of the Company and its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

(e) None of the Company and its Subsidiaries has filed a
consent under Section 341(f) of the Code concerning collapsible corporations.
None of the Company and its Subsidiaries has made or is obligated to make any
payments or is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under Section 280G
of the Code or that are subject to an excise tax under Section 4999 of the Code.
None of the Company and its Subsidiaries has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(f) Hancock is a member of an "affiliated group" of
corporations (as that term is used in Section 1504(a) of the Code and
Regulations promulgated under Section 1502 of the Code) which includes the
Company and its Subsidiaries. Hancock, the Company and its

- 3 -

<PAGE> 4

Subsidiaries are eligible to be included in the consolidated federal income Tax
Return of the Combined Group of which Hancock is a member for the taxable period
including the Closing Date. The Company and each of the Company's Subsidiaries
will be included in such consolidated federal income Tax Return for their
taxable period ending on the Closing Date and except as described in Schedule 2,
were included in such consolidated federal Tax Return for all years for which
the statute of limitations has not run.

(g) Neither the Company nor any Subsidiary is or has ever been
a member of an "affiliated group" of corporations (within the meaning of Section
1504 of the Code), other than a group of which Hancock is presently a member, or
has any liability for the Taxes of any person (other than any of the Company and
its Subsidiaries), including by reason of Regulations Section 1.1502-6 or
similar provisions of state or local law. Neither the Company nor any Subsidiary
has engaged in any transaction with any member of an "affiliated group" of
corporations of which the Company or any Subsidiary is a member which would
cause deferred income to be triggered into income under Regulations Sections
1.1502-13 or 1.1502-14 or similar provision of state or local law. There are no
excess loss accounts within the meaning of Regulations Section 1.1502-19 or
similar provision of state or local law with respect to the Company or any
Subsidiary. None of the Company or its Subsidiaries is liable for any Taxes
under any guaranty, indemnification, tax sharing or similar agreement other than
the existing tax sharing agreement by and among the Company and its Subsidiaries
and the Combined Group of which Hancock is a member, and other than any such
agreement solely between the Company and its Subsidiaries.

(h) The Company and its Subsidiaries have not agreed to make,
and are not required to make an adjustment under Section 481 of the Code (or any
comparable provisions of state, local or foreign law) by reason of a change in
accounting method.

(i) Each of Hancock, the Company and each of the Company's
subsidiaries is a "U.S. Person" within the meaning of Section 7701(a)(30) of the
Code.

Section 3. FIRPTA CERTIFICATE. Prior to Closing, Hancock shall have
provided the Purchaser with a statement, in a form reasonably satisfactory to
the Purchaser, pursuant to Regulations Section 1.897-2(h), certifying that the
Shares are not a U.S. real property interest within the meaning of Section
897(c)(1) of the Code and dated not more than 30 days prior to the Closing Date.

Section 4. LIABILITY FOR TAXES.

(a) (1) Hancock shall be liable for, and indemnify each Newco
Group Member against, all (i) Taxes imposed on the Company or any of its
Subsidiaries, or for which the Company or any of its Subsidiaries may otherwise
be liable, for any reason, for any taxable year or period, or any portion
thereof, that ends (or is deemed to end) on or before the close of the Closing
Date except for Stub Period Taxes, as defined below; and (ii) Taxes resulting
from the

- 4 -

<PAGE> 5

breach of any representation or warranty in Section 2 hereof as if made on the
Closing Date imposed on the Company or any of its Subsidiaries. For purposes of
this Agreement, "Stub Period Taxes" means the excess, if any, of (A) the Taxes
of the Company and its Subsidiaries imposed on items arising from the operations
of the business of the Company and the Subsidiaries in the ordinary course for
the period beginning on January 1, 1996 and ending on the close of the Closing
Date (the "Stub Period") as allocated to the Company and its Subsidiaries
consistent with the past custom and practice of Hancock, the Company and its
Subsidiaries and as set forth on the original Tax Returns filed or to be filed
for the Stub Period, except in no event including Taxes imposed pursuant to
Regulations Section 1.1502-6 or similar provisions of state and local law and
Taxes resulting from the Company or its Subsidiaries ceasing to members of any
Combined Group (the Taxes described in this clause (A) being referred to herein
as the "Current Year Taxes"), over (B) any payments of the Current Year Taxes
made by the Company and its Subsidiaries, whether made to a governmental
authority or to any Hancock Group Member (the "Current Year Payments").
Notwithstanding anything to the contrary contained herein, Hancock shall have no
liability with respect to the indemnification required under this Section
4(a)(1) with respect to Taxes, other than Federal, state and local income Taxes,
unless and until the total of all claims for Taxes, other than Federal, state
and local income Taxes, exceeds $100,000, and then only for the amount by which
such claims for indemnity exceed $100,000. The indemnity set forth in this
Section 4(a)(1) shall be without regard to any materiality qualification set
forth in Section 2(a) hereof.

(2) Hancock shall be entitled to any refund of (or credit for
or reduction of) Taxes attributable to Hancock or any of its Affiliates
(including the Company and each of its Subsidiaries) for any taxable year or
period for which Hancock is liable for Taxes under Section 4(a)(1).

(b) (1) Newco shall be liable for, and indemnify each Hancock
Group Member against all Stub Period Taxes and Taxes for periods beginning or
deemed to begin after the Closing Date imposed on the Company or any of its
Subsidiaries.

(2) Except as provided in Section 4(a)(2) of this Agreement,
Newco shall be entitled to any refund of (or credit for or reduction of) Taxes
attributable to the Company or any of its Subsidiaries for any taxable year or
period, or portion thereof for which Newco is liable for Taxes under Section
4(b)(1).

(c) Any tax sharing agreement (except this Agreement) between or
among Hancock and/or a Hancock Group Member and any of the Company or its
Subsidiaries shall be terminated as of the Closing Date and will have no further
effect on any taxable year (whether the current year, future years or past
years). Any powers of attorney with respect to Taxes of the Company or its
Subsidiaries currently in force will be terminated effective as of the Closing
Date. The Company will remit to Hancock or the applicable government authority
all Stub Period Taxes, if any, by the applicable estimated or filing extension
Tax payment due date to the extent such Taxes are due thereon, and with respect
to the balance of the Stub Period Taxes, if any, within 30

- 5 -

<PAGE> 6

days after the preparation and delivery of the Tax Package as provided in
Section 5(c) hereof, but in no event, in the case of payments made to Hancock,
later than 20 days prior to the due date of the payment of such Taxes. Hancock
shall remit to the Company within 30 days after the preparation and delivery of
the Tax Package as provided in Section 5(c) hereof the amount, if any, by which
Current Year Payments exceed Current Year Taxes, except to the extent the
Company or its Subsidiaries is entitled to a refund or credit from a
governmental authority.

(d) In order appropriately to apportion any income Taxes or Tax
refunds relating to any taxable year or period that begins before and ends after
the Closing Date, the parties hereto will, to the extent permitted by applicable
law, elect with the relevant taxing authority to terminate the taxable year as
of the Closing Date. In the case where applicable law does not permit any
corporation to treat the Closing Date as the end of the taxable year of such
corporation, then whenever it is necessary to calculate the liability for income
or franchise Taxes of the corporation for a portion of a taxable year, such
determination (unless otherwise agreed to in writing by Newco and Hancock) shall
be made by a closing of the corporation's books at the end of the Closing Date,
except that exemptions, allowances or deductions that are calculated on an
annual basis, such as the deduction for depreciation, will be apportioned on a
daily basis. In order appropriately to apportion any Taxes, other than income or
franchise Taxes, relating to any taxable year or other taxable period that
begins before and ends after the Closing Date, (1) AD VALOREM Taxes (including,
without limitation, real and personal property Taxes) will be accrued on a per
diem basis over the period for which the Taxes are levied, or if it cannot be
determined over what period the Taxes are being levied, over the fiscal period
of the relevant taxing authority, in each case irrespective of the lien or
assessment date of such Taxes, and (2) franchise and other privilege Taxes not
measured by income will be accrued on a per diem basis over the period to which
the privilege relates. In either such event, the taxable period shall for
purposes of this Agreement be deemed to end on the close of the Closing Date.

(e) The Combined Group of which Hancock is a member will include the
Company and each of its Subsidiaries in its federal consolidated income Tax
return for the Taxable periods ending on or before or including the Closing
Date, and any Combined Group will include the Company and each of its
Subsidiaries for the Taxable periods ending on or before the Closing Date in all
state combined, consolidated or unitary Tax returns, as applicable, in
accordance with past custom and practice.

(f) Hancock and Newco shall each pay, and shall indemnify each other
against 50% of any real property transfer or gains Tax, sales Tax, use Tax,
stamp Tax, stock transfer Tax, or other similar Tax imposed on the transactions
contemplated by this Agreement.

(g) All obligations hereunder shall extend to the applicable statute
of limitations relating thereto.

- 6 -

<PAGE> 7

(h) All payments hereunder shall be treated for Tax reporting
purposes as an adjustment to the consideration for the Shares acquired under the
Contribution Agreement and all parties agree to report such payments
consistently therewith.

(i) If, as a result of any action, suit, investigation, audit,
claim, assessment or amended Tax Return, there is any change after the Closing
Date in an item of income, gain, loss, deduction, credit or amount of Tax that
results in an increase in a Tax liability for which Hancock would be liable
pursuant to Section 4(a) or loss of a Tax attribute by Hancock or its
Affiliates, and such change results in an actual decrease (the "Decrease
Amount") in the Tax liability of Newco, the Company, any of its Subsidiaries or
any Affiliate thereof for any taxable year or period beginning after the Closing
Date, then Hancock shall be entitled to the full amount of such Decrease Amount
by a payment by Newco of an amount equal to the Decrease Amount at the time and
in the amount actually realized by Newco, the Company, the Subsidiaries or
Affiliates, as the case may be. If, as a result of any action, suit,
investigation, audit, claim assessment or amended Tax Return, there is any
change after the Closing Date in an item of income, gain, loss, deduction,
credit or amount of Tax that results in an increase in a Tax liability for which
Newco or its Affiliates would be liable pursuant to Section 4(b) or loss of a
Tax attribute by Newco or its Affiliates, and such change results in a Decrease
Amount in the Tax liability of any Hancock Group Member or the Company or its
Subsidiaries, for any taxable year or period beginning before the Closing Date,
then Newco shall be entitled to the full amount of such Decrease Amount by a
payment by Hancock of an amount equal to the Decrease Amount at the time and in
the amount actually realized by the Hancock Group Member. In all cases, if a
Decrease Amount is subsequently reversed or reduced, any payments made under
this Section 4(i) shall be returned to the party making payment with respect
thereto.

Section 5. TAX RETURNS.

(a) Hancock shall file or cause to be filed when due all income Tax
Returns of any Combined Group for taxable years or periods ending on or before
the Closing Date and shall remit or cause to be remitted any Taxes due in
respect of such Tax Returns. Newco shall file or cause to be filed when due all
Tax Returns that are required to be filed after the Closing Date by or with
respect to the Company and each of its Subsidiaries (other than the income Tax
Returns of any Combined Group) for periods including the Closing Date and shall
remit or cause to be remitted any Taxes due in respect of such Tax Returns.
Hancock or Newco shall pay the other party for the Taxes for which Hancock or
Newco, respectively, is liable pursuant to Section 4 of this Agreement but which
are payable with any Tax Return to be filed by the other party pursuant to this
Section 5(a) in accordance with the provisions of Section 4(c) hereof regarding
Tax Returns for the Combined Group of which Hancock is a member for the Stub
Period. All Tax Returns which Newco and Hancock are required to file or cause to
be filed in accordance with this Section 5(a) shall be prepared and filed in a
manner consistent with past practice and, on such Tax Returns, no position shall
be taken, elections made or method adopted that is inconsistent with positions
taken, elections made or methods used in preparing and filing similar Tax
Returns in prior periods.

- 7 -

<PAGE> 8

(b) Neither Hancock nor any Affiliate thereof, shall amend, refile
or otherwise modify any Tax Return relating in whole or in part to the Company
or any Subsidiary with respect to any taxable year or period ending on or before
Closing Date without the prior written consent of Newco, which consent may not
be unreasonably withheld.

(c) Newco shall cause the Company and each of its Subsidiaries to
prepare and provide to Hancock no later than 20 days prior to the due date of
the applicable Tax Returns, giving regard to extensions, a package of Tax
information materials, including, without limitation, schedules and work papers
(the "TAX PACKAGE") required by Hancock to enable Hancock to prepare and file
all Tax Returns required to be prepared and filed by it pursuant to Section
5(a). The Tax Package shall be completed in accordance with past practice,
including past practice as to providing such information and as to the method of
computation of separate taxable income or other relevant measure of income of
the Company. Hancock shall use the Tax Package in preparing all relevant Tax
returns.

Section 6. CONTEST PROVISIONS.

(a) Hancock shall have the sole right to represent the Company's and
each Subsidiaries' interests in any Tax audit or administrative or court
proceeding relating to taxable periods ending (or deemed to end) on or before
the Closing Date, and to employ counsel of its choice at its expense, PROVIDED
THAT neither Hancock nor any of its appointed representatives shall settle or
prosecute any Tax claim in a manner that would have an adverse effect on Newco,
the Company, the Subsidiaries or their Affiliates without the prior written
consent of Newco, which consent may not be unreasonably withheld.

(b) Newco shall have the sole right to represent the Company's and
each of its Subsidiaries' interests in all Tax audits or administrative or court
proceedings relating to the Company and its Subsidiaries for all taxable periods
beginning (or deemed to begin) after the Closing Date hereof; PROVIDED THAT
Newco shall not settle or prosecute any Tax claim in a manner that would have an
adverse effect on any Hancock Group Member without the prior written consent of
Hancock, which consent may not be unreasonably withheld, and provided further
that Newco shall not settle any matter for which Hancock may be liable under
Section 4(a) hereof without the prior written consent of Hancock, which consent
may not be unreasonably withheld.

Section 7. ASSISTANCE AND COOPERATION. After the Closing Date, each
of Hancock and Newco shall (and shall cause their respective Affiliates to):

(a) assist the other party in preparing any Tax Returns which such
other party is responsible for preparing and filing in accordance with Section
5(a) of this Agreement;

(b) cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding, any Tax Returns of the Company and each of its
Subsidiaries;

- 8 -

<PAGE> 9

(c) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to Taxes
of the Company and each of its Subsidiaries;

(d) provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments of the Company and each of its Subsidiaries
for taxable periods for which the other may have a liability under this
Agreement;

(e) furnish the other with copies of all correspondence received
from any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period;

(f) timely sign and deliver such certificates or forms as may be
necessary or appropriate to establish an exemption from (or otherwise reduce),
to file Tax Returns or other reports with respect to, Taxes described in Section
4(f) of this Agreement (relating to sales, transfer and similar Taxes); and

(g) report the transactions contemplated by the Contribution
Agreement as an exchange under Section 351 of the Code and shall take no action
inconsistent therewith.

Section 8. GENERAL PROVISIONS.

(a) DISPUTES. If Newco and the Purchaser are unable to reach mutual
agreement on any matter covered by this Agreement, including, without
limitation, matters regarding computation of Tax liabilities, within an
appropriate period of time taking into account relevant due dates for Tax
Returns and similar items, but in any event within 90 days of such disagreement,
such disagreement shall be submitted for resolution to such nationally
recognized independent certified public accounting firm as is mutually agreed
upon by Newco and Hancock (a "Tax Referee"). If the parties can not agree on a
Tax Referee, the Tax Referee shall be picked by two nationally recognized
accounting firms, one picked by Newco and one picked by Hancock; provided,
however, that the Tax Referee so picked may not then be the accountant regularly
employed by Newco or Hancock. The decision of the Tax Referee shall be binding
on the parties. The fees of the Tax Referee shall be shared equally by Newco and
Hancock.

(b) ENTIRE AGREEMENT; BINDING EFFECT. This Agreement (i) constitutes
the entire agreement and supersedes all other agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof, except for matters covered in the Contribution Agreement, and (ii) shall
not be assigned by either party (by operation of law or otherwise) without the
prior written consent of the other party.

(c) SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.

- 9 -

<PAGE> 10

(d) APPLICABLE LAW. This Agreement shall be governed by and be
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles thereof relating to conflicts of laws.

(e) NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
if telecopied (only if confirmed), if sent by FedEx or other overnight courier
or delivery service or if mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses or
facsimile numbers:

To the Newco: JHFSC Acquisition Corp.
c/o Thomas H. Lee Company
75 State Street
Boston, MA 02109
Facsimile: 617-227-3514
Attn: Thomas M. Hagerty

With copies to: Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Facsimile: 617-951-1295
Attn: James Westra, Esq.

Ropes & Gray
One International Place
36th Floor
Boston, MA 02110
Facsimile: 617-951-7050
Attn: Alfred O. Rose, Esq.

To Hancock: John Hancock Subsidiaries, Inc.
200 Clarendon Street
Boston, MA 02116
Facsimile: 617-572-4111
Attn: Foster Aborn, Vice Chairman
and Chief Investment Officer

With a copy to: John Hancock Subsidiaries, Inc.
200 Clarendon Street
Boston, MA 02116
Facsimile: 617-572-9268
Attn: Joanne P. Acford, Esq.
Second Vice President and Counsel

- 10 -

<PAGE> 11

Hale and Dorr
60 State Street
Boston, MA 02109
Facsimile: 617-526-5000
Attn: Jeffrey N. Carp, Esq.

(f) AMENDMENT AND WAIVER. No amendment of any provision of this
Agreement shall in any event be effective, unless the same shall be in writing
and signed by the parties hereto. Any failure of any party to comply with any
obligation, agreement or condition hereunder may only be waived in writing by
the other party, but such waiver shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No failure by any party to
take any action against any breach of this Agreement or default by the other
party shall constitute a wavier of such party's right to enforce any provision
hereof or to take any such action.

(g) PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.

(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which together shall constitute one and the same instrument.

(i) HEADINGS; PRONOUNS AND CONJUNCTIONS. The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Unless
otherwise indicated herein or the context otherwise requires, the singular shall
include the plural and the plural shall include the singular. The word "or"
shall not be deemed inclusive.

- 11 -

<PAGE> 12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

(Corporate Seal)

ATTEST: JHFSC ACQUISITION CORP.

/s/ Kevin J. McKay By: /s/ John H. Goldsmith
- - - - - - - - - - - - - - - ---------------------------- ---------------------------
Secretary Title: President

(Corporate Seal)

ATTEST: JOHN HANCOCK SUBSIDIARIES, INC.

/s/ Marion L. Nierintz By: /s/ John T. Farady
- - - - - - - - - - - - - - - ---------------------------- ---------------------------
Secretary Title: Treasurer

- 12 -

<PAGE> 13

CONTRIBUTION AGREEMENT FOR THE FORMATION
OF JHFSC ACQUISITION CORPORATION

SCHEDULE 2 ATTACHEMENT TO THE TAX MATTERS AGREEMENT:

1) The statute of limitations has been extended for the Company and Subsidiary
for federal tax purposes as part of the Hancock Group consolidated return from
1987 to present.

2) The statute of limitations has been extended, or has yet to toll, for the
following entities for the applicable periods and jurisdictions listed.

<TABLE>
<CAPTION>
ENTITY: JURISDICTION: PERIODS:
<S> <C> <C>
Tucker Anthony, Inc. New York State - Corp. Tax 1990 - Present

Tucker Anthony, Inc. Conneticut State - Corp. Tax 1990 - Present

Freedom Capital New York City - Corp. Tax 1991 - Present

John Hancock Clearing Corp. New York City - Corp. Tax 1994 - Present

Tucker Anthony Leasing New York State - Corp. Tax 1975 - Present
</TABLE>

<PAGE> 1
EXHIBIT 10.6

CONTRIBUTION AND INDEMNITY AGREEMENT

This Contribution and Indemnity Agreement is entered into this 29th day
of November, 1996 by and between John Hancock Subsidiaries, Inc., a Delaware
corporation ("Hancock"), and John H. Goldsmith (the "Indemnitor").

RECITALS

A. Simultaneously herewith, JHFSC Acquisition Corp. ("Newco"),
Hancock, Thomas H. Lee Equity Fund III, L.P. and SCP Private Equity Partners,
L.P. are entering into a Contribution Agreement (the "Contribution Agreement")
pursuant to which Hancock is contributing 100% of the issued and outstanding
shares of John Hancock Freedom Securities Corporation, a Massachusetts
corporation (the "Company") to Newco in exchange for cash and securities.

B. Pursuant to the Contribution Agreement, Hancock has agreed to
indemnify and hold harmless Newco against the losses specified therein.

C. Indemnitor has agreed, under certain conditions set forth below,
to be subject to liability for breaches of representations and warranties made
by Hancock under Sections 3 and 4 of the Contribution Agreement.

D. Hancock is unwilling to enter into the Contribution Agreement
unless the Indemnitor executes this Contribution and Indemnity Agreement in
favor of Hancock, and it is a condition precedent to closing the transactions
under the Contribution Agreement that Indemnitor enter into this Contribution
and Indemnity Agreement.

E. Terms used as defined terms herein and not otherwise defined shall
have the meanings set forth in the Contribution Agreement.

NOW, THEREFORE, in consideration of the premises and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

I. INDEMNIFICATION

1. CONTRIBUTION BY INDEMNITOR. In the event that Hancock has made a
payment to an indemnified party under Section 9.02(a) of the Contribution
Agreement (a "Claim"), the Indemnitor shall contribute to Hancock an amount
equal to thirty-three and 33/100 percent (33 1/3%) of such Claim; provided,
however, that the Indemnitor's maximum aggregate liability under this Agreement
shall in no event exceed $250,000.

<PAGE> 2

II. MISCELLANEOUS

1. TERM. This Contribution and Indemnity Agreement shall terminate
and Hancock shall have no right to seek any contribution from Indemnitor
hereunder immediately upon (a) the termination by the Company of the
Indemnitor's employment, (b) the termination by the Indemnitor of the
Indemnitor's employment for "Good Reason" (as defined in the Indemnitor's
Employment Agreement of even date with Newco) with Newco and/or any of its
Subsidiaries, as the case may be, or (c) the death or "disability" (as defined
in Indemnitor's Employment Agreement of even date with Newco) of Indemnitor;
PROVIDED, THAT, in the event the Indemnitor voluntarily terminates his
employment with the Company at any time after a claim by Newco has been asserted
against Hancock for which Hancock is required to make a payment to Newco
pursuant to Section 9.02(a) (a "Pending Claim"), then Hancock shall still have
the right to seek contribution under this Agreement from the Indemnitor only
with respect to the Pending Claim, and, to such extent, this Agreement shall
remain in full force and effect.

2. SOLE AND EXCLUSIVE REMEDY. The obligations of Indemnitor provided
under this Contribution and Indemnity Agreement shall constitute the sole and
exclusive remedy of Hancock against the Indemnitor for the recovery of any Loss,
except for any act involving fraud by the Indemnitor, arising under the
Contribution Agreement or out of the transactions contemplated thereby.

3. FEES AND EXPENSES. Each of the parties hereto will pay and
discharge its own expenses and fees in connection of with the negotiation of,
entry into and enforcement of its rights under this Contribution and Indemnity
Agreement.

4. NOTICES. All notices, requests, demands, consents and
communications necessary or required under this Contribution and Indemnity
Agreement shall be made in the manner specified, or, if not specified, shall be
delivered by hand or sent by registered or certified mail, return receipt
requested, or by telecopy (receipt confirmed) to:

(a) if to Indemnitor:

John H. Goldsmith
Tucker Anthony Incorporated
One Beacon Street
Boston, MA 02108-3106

Facsimile Transmission Number: (617) 725-2483

- 2 -

<PAGE> 3

with a copy to:

Ropes & Gray
36th Floor
One International Place
Boston, MA 02110
Attention: Alfred O. Rose, Esq.

Facsimile Transmission Number: (617) 951-7050

(b) if to Hancock:

John Hancock Mutual Life Insurance Co.
200 Clarendon Street
Boston, MA 02116
Attention: Jody Acford, Esq.

Facsimile Transmission Number: (617) 572-9268

with a copy to:

Hale and Dorr
60 State Street
Boston, MA 02109
Attention: Jeffrey N. Carp, Esq.

Facsimile Transmission Number: (617) 526-5000

All such notices, requests, demands, consents and other communications
shall be deemed to have been duly given or sent (a) on the date of personal
delivery or facsimile transmission (with telephone confirmation), (b) one
Business Day after being sent, if sent by federal express, or (c) three Business
Days after being sent, if sent by registered or certified mail, and addressed as
aforesaid.

5. SUCCESSORS AND ASSIGNS. All covenants and agreements set forth in
this Contribution and Indemnity Agreement and made by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the successors and assigns
of such party.

6. DESCRIPTIVE HEADINGS AND DEFINITIONS. The headings of the sections
and paragraphs of this Contribution and Indemnity Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Indemnity Agreement. Any capitalized terms used in this Indemnity Agreement and
not defined herein shall have the meanings ascribed thereto in the Contribution
Agreement.

- 3 -

<PAGE> 4

7. COUNTERPARTS. This Contribution and Indemnity Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
and the same instrument.

8. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason in any
jurisdiction, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected.

9. WAIVER. The failure of any of the parties to this Contribution and
Indemnity Agreement to require the performance of a term or obligation under
this Contribution and Indemnity Agreement or the waiver by any of the parties to
this Contribution and Indemnity Agreement of any breach hereunder shall not
prevent subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach hereunder.

10. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or entity, other than the parties hereto and
their permitted successors or assigns, any rights or remedies under or by reason
of this Contribution and Indemnity Agreement.

11. GOVERNING LAW. This Agreement, including the validity hereof and
the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the Commonwealth of Massachusetts.

12. ENTIRE AGREEMENT. This Contribution and Indemnity Agreement is the
complete understanding of the parties with reference to the subject matter
hereof. This Contribution and Indemnity Agreement may not be amended except by
an instrument in writing signed on behalf of Newco and the Indemnitor.

IN WITNESS WHEREOF the parties hereto have executed this Indemnity
Agreement under seal as of the date first set forth above.

ATTEST: JOHN HANCOCK SUBSIDIARIES, INC.

/s/ Marion L. Nierintz By: /s/ John T. Farady
- - - - - - - - - - - - - - - ------------------------- ---------------------------
Name: John T. Farady
Title: Treasurer

ATTEST:

/s/ Kevin J. McKey /s/ John H. Goldsmith
- - - - - - - - - - - - - - - ------------------------- -------------------------------
John H. Goldsmith

- 4 -

<PAGE> 1
EXHIBIT 10.7

MANAGEMENT AGREEMENT

WITH

THOMAS H. LEE COMPANY

AGREEMENT entered into as of November 29, 1996, by and between Thomas
H. Lee Company, a Massachusetts sole proprietorship with a principal place of
business at 75 State Street, Boston, Massachusetts 02109 (the "Consultant") and
JHFSC Acquisition Corp., a Delaware corporation (the "JHFSC").

WHEREAS, the Consultant has staff specially skilled in corporate
finance, strategic corporate planning, and other management skills and services;
and

WHEREAS, as of the date hereof, JHFSC has concluded the purchase of all
the equity securities of the JHFSC's subsidiary, John Hancock Freedom Securities
Corporation (the "Stock Purchase"); and

WHEREAS, JHFSC and its subsidiaries (which are collectively referred to
herein as the "Company") will require the Consultant's special skills and
management advisory services in connection with its general business operations;
and

WHEREAS, the Consultant is willing to provide such skills and services
to the Company.

NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto intending to be legally bound do hereby agree as
follows:

1. SERVICES. The Consultant hereby agrees that, during the term of
this Agreement (the "Term"), it will:

a. provide the Company with advice in connection with the negotiation
and consummation of agreements, contracts, documents and
instruments necessary to provide the Company with financing from
banks or other financial institutions or other entities on terms
and conditions satisfactory to the Company; and

b. provide the Company with financial, managerial and operational
advice in connection with its day-to-day operations, including,
without limitation:

(i) advice with respect to the investment of funds; and

<PAGE> 2

(ii) advice with respect to the development and implementation of
strategies for improving the operating, marketing and
financial performance of the Company.

2. TERM. This Agreement shall continue in full force and effect,
unless and until terminated by mutual consent of the parties, for so long as The
Consultant (or any successor or permitted assign, as the case may be) continues
to carry on the business of providing services of the type described in Section
1 above; provided, however, that either party may terminate this Agreement
following a material breach of the terms of this Agreement by the other party
hereto and a failure to cure such breach within 30 days following written notice
thereof; and provided further that each of (a) the obligations of the Company
under Sections 4.2 and 5 below and (b) any and all accrued and unpaid
obligations of the Company owed under Section 4.1 below shall survive any
termination of this Agreement to the maximum extent permitted under applicable
law.

3. SERVICES TO BE PERFORMED. The Consultant shall devote reasonable
time and efforts to the performance of the consulting and management advisory
services contemplated by the Agreement. However, no precise number of hours is
to be devoted by the Consultant on a weekly or monthly basis. The Consultant may
perform services under this Agreement directly, through its employees or agents,
or with such outside consultants as the Consultant may engage for such purpose.

4. COMPENSATION; EXPENSE REIMBURSEMENT.

4.1 In consideration of the management advisory services hereunder,
the Consultant (or its designee) shall be paid an annual fee (hereinafter, the
"Management Fee") equal to $250,000. The Management Fee shall be payable in
equal quarterly installments each year, to be paid quarterly in advance on the
first day of each calendar quarter, except for the installment which would
otherwise be payable on the first day of the first calendar quarter following
the date hereof which shall instead be paid on the date hereof.

4.2 The Company shall reimburse the Consultant for all reasonable
out-of-pocket expenses incurred in connection with the management advisory
services to be provided by the Consultant hereunder, including, without
limitation, reasonable travel, lodging and similar out-of-pocket costs
reasonably incurred by it in connection with or in account of its performance of
services for the Company hereunder. Reimbursement shall be made only upon
presentation to the Company by the Consultant of reasonably itemized
documentation therefor.

5. INDEMNIFICATION. In addition to their agreements and obligations
under this Agreement, the Company agrees to indemnify and hold harmless the
consultant, and its affiliates (including its officers, directors, stockholders,
partners, employees and agents) from and against any and all claims,
liabilities, losses and damages (or actions in respect thereof), in any way
related to or arising out of the performance by the Consultant of services under
this Agreement (other than for

<PAGE> 3

expenses incurred described in Section 4 hereof or for compensation for services
rendered), and to reimburse the Consultant and any other such indemnified person
for reasonable out-of-pocket legal and other expenses incurred by it in
connection with or relating to investigating, preparing to defend, or defending
any actions, claims or other proceedings (including any investigations or
inquiry) arising in any manner out of or in connection with the Consultant's
performance under this Agreement (whether or not such indemnified person is a
named party in such proceeding); provided, however, that the Company shall not
be responsible under this Section 5 for any claims, liabilities, losses, damages
or expenses to the extent that they are finally judicially determined to result
form actions taken by the Consultant (or such other indemnified person) due
primarily to the Consultant's (or such other indemnified person's) gross
negligence or willful misconduct.

6. NOTICE. All notices hereunder, to be effective, shall be in
writing and shall be mailed by certified mail, postage prepaid as follows:

(i) If to the Consultant:

Thomas H. Lee Company
75 State Street
Boston, MA 02109
Attention: Thomas M. Hagerty

With a copy to:

Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, MA 02110
Attention: James Westra, Esq.

(ii) If to the Company:

One World Financial Center
200 Liberty Street
New York, NY 10281
Attention: Kevin McKay, Esq.

7. MODIFICATIONS; TERMINATION. This Agreement constitutes the entire
agreement between the parties hereto with regard to the subject matter hereof,
superseding all prior understandings and agreements whether written or oral.
This Agreement may not be amended or revised except by a writing signed by the
parties. This Agreement will terminate upon an initial public offering of the
common stock of the Parent.

<PAGE> 4

8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
but may not be assigned by either party without the prior written consent of the
other.

9. CAPTIONS. Captions have been inserted solely for the convenience
of reference and in no way define, limit or describe the scope or substance of
any provision shall not affect the validity of any other provision.

10. GOVERNING LAW. This Agreement shall be construed under and
governed by the laws of the Commonwealth of Massachusetts (regardless of the
laws that might otherwise govern under applicable Commonwealth of Massachusetts
principles of conflicts of law).

11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same document.

* * * * * *

<PAGE> 5

IN WITNESS WHEREOF, the parties have duly executed this Agreement as a
sealed instrument as of the date first above written.

THOMAS H. LEE COMPANY JHFSC ACQUISITION CORP.

By: /s/ C. Hunter Boll By: /s/ John Goldsmith
------------------------- --------------------
Name: C. Hunter Boll Name: John Goldsmith
Title: Vice President Title: President

<PAGE> 1
EXHIBIT 10.8

MANAGEMENT AGREEMENT

WITH

SCP PRIVATE EQUITY PARTNERS, L.P.

AGREEMENT entered into as of November 29, 1996, by and between SCP
Private Equity Partners, L.P. a Delaware limited partnership with a principal
place of business at 800 The Safeguard Building, 435 Devon Park Drive, Wayne, PA
19087 (the "Consultant") and JHFSC Acquisition Corp., a Delaware corporation
(the "JHFSC").

WHEREAS, the Consultant has staff specially skilled in corporate
finance, strategic corporate planning, and other management skills and services;
and

WHEREAS, as of the date hereof, JHFSC has concluded the purchase of all
the equity securities of the JHFSC's subsidiary, John Hancock Freedom Securities
Corporation (the "Stock Purchase"); and

WHEREAS, the Consultant is willing to provide such skills and services
to the Company.

NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto intending to be legally bound do hereby agree as
follows:

1. SERVICES. The Consultant hereby agrees that, during the term of
this Agreement (the "Term"), it will:

b. provide the Company with financial, managerial and operational
advice in connection with its day-to-day operations, including,
without limitation:

(i) advice with respect to the investment of funds; and

<PAGE> 2

(ii) advice with respect to the development and implementation of
strategies for improving the operating, marketing and
financial performance of the Company.

2. TERM. This Agreement shall continue in full force and effect,
unless and until terminated by mutual consent of the parties, for so long as the
Consultant (or any successor or permitted assign, as the case may be) continues
to carry on the business of providing services of the type described in
Section 1 above; provided, however, that either party may terminate this
Agreement following a material breach of the terms of this Agreement by the
other party hereto and a failure to cure such breach within 30 days following
written notice thereof; and provided further that each of (a) the obligations of
the Company under Sections 4.2 and 5 below and (b) any and all accrued and
unpaid obligations of the Company owed under Section 4.1 below shall survive any
termination of this Agreement to the maximum extent permitted under applicable
law.

4. COMPENSATION; EXPENSE REIMBURSEMENT.

4.1 In consideration of the management advisory services hereunder,
the Consultant (or its designee) shall be paid an annual fee (hereinafter, the
"Management Fee") equal to $62,500. The Management Fee shall be payable in equal
quarterly installments each year, to be paid quarterly in advance on the first
day of each calendar quarter, except for the installment which would otherwise
be payable on the first day of the first calendar quarter following the date
hereof which shall instead be paid on the date hereof.

<PAGE> 3

6. NOTICE. All notices hereunder, to be effective, shall be in
writing and shall be mailed by certified mail, postage prepaid as follows:

(i) If to the Consultant:

SCP Private Equity Partners, L.P.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Attention: Winston J. Churchill

With a copy to:
SCP Private Equity Partners, L.P.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Attention: Wayne Weisman, Esq.

(ii) If to the Company:

One World Financial Center
200 Liberty Street
New York, NY 10281
Attention: Kevin McKay, Esq.

<PAGE> 4

11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same document.

* * * * * *

<PAGE> 5

IN WITNESS WHEREOF, the parties have duly executed this Agreement as a
sealed instrument as of the date first above written.

SCP PRIVATE EQUITY PARTNERS, L.P. JHFSC ACQUISITION CORP.

By: /s/ Samuel A. Plum By: /s/ John Goldsmith
----------------------------- --------------------
Name: Samuel A. Plum Name: John Goldsmith
Title: General Partner Title: President

<PAGE> 1
Exhibit 10.9

JHFSC ACQUISITION CORP.
1996 STOCK OPTION PLAN

1. PURPOSE OF THE PLAN.

This stock option plan (the "Plan") is intended to encourage ownership of
the stock of JHFSC Acquisition Corp., a Delaware corporation (the "Company"), by
employees of the Company and its subsidiaries, to induce qualified personnel to
enter and remain in the employ of the Company or its subsidiaries and otherwise
to provide additional incentive for optionees to promote the success of the
Company's business.

2. STOCK SUBJECT TO THE PLAN.

(a) The total number of shares of the authorized but unissued or
treasury shares of the common stock, $.01 par value per share, of the Company
(the "Common Stock") for which options may be granted under the Plan shall not
exceed 1,200,000 shares, subject to adjustment as provided in Section 12
hereof.

(b) Stock issuable upon exercise of an option granted under the Plan
may be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board of Directors of the Company or
the Committee (as defined below).

3. ADMINISTRATION OF THE PLAN.

(a) At the discretion of the Company's Board of Directors, the Plan
shall be administered either by (i) the full Board of Directors of the Company
or (ii) a committee (the "Committee") consisting of two or more members of the
Company's Board of Directors, to whom the Board of Directors may delegate its
authority hereunder. In the event the full Board of Directors is the
administrator of the Plan, references herein to the Committee shall be deemed to
include the full Board of Directors. The Board of Directors may from time to
time appoint a member or members of the Committee in substitution for or in
addition to the member or members then in office and may fill vacancies on the
Committee however caused. The Committee shall choose one of its members as
Chairman and shall hold meetings at such times and places as it shall deem
advisable. A majority of the members of the Committee shall constitute a quorum
and any action may be taken by a majority of those present and voting at any
meeting, unless otherwise expressly provided herein. So long as the Company
maintains a Compensation Committee of the Board of Directors, the Committee
shall consist of the same members as comprise the Compensation Committee.
Notwithstanding any other provision contained herein, at any time during which
the Company has a class of equity securities registered under the Securities
Exchange Act of 1934, as amended (the "Act"), the members of the Committee shall
meet all the requirements of the Act and the rules promulgated thereunder.

(b) Any action may also be taken without the necessity of a meeting
by a written instrument signed by a majority of the Committee. The decision of
the Committee as to

<PAGE> 2

all questions of interpretation and application of the Plan shall be final,
binding and conclusive on all persons. The Committee shall have the authority to
adopt, amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any option agreement granted hereunder in the manner and to the extent it shall
deem expedient to carry the Plan into effect and shall be the sole and final
judge of such expediency. No Committee member shall be liable for any action or
determination made in good faith.

4. TYPE OF OPTIONS.

Options granted pursuant to the Plan shall be authorized by action of the
Board of Directors or Committee and may be designated as either incentive stock
options meeting the requirements of Section 422 of the Internal Revenue Code of
1986 (the "Code") or non-qualified options which are not intended to meet the
requirements of such Section 422 of the Code, the designation to be in the sole
discretion of the Committee.

5. ELIGIBILITY.

(a) Options may be granted only to employees (including directors and
officers who are employees) of the Company or of any subsidiary corporation
(herein called "subsidiary" or "subsidiaries"), as defined in Section 424 of the
Code and the regulations promulgated thereunder (the "Regulations"). Directors
and officers who are not otherwise employees of the Company or a subsidiary
shall not be eligible to be granted an option pursuant to the Plan. In
determining the eligibility of an individual to be granted an option, as well as
in determining the number of shares to be issuable pursuant to options granted
to any individual, the Committee shall take into account the position and
responsibilities of the individual being considered, the nature and value to the
Company or its subsidiaries of his or her service and accomplishments, his or
her present and potential contribution to the success of the Company or its
subsidiaries, and such other factors as the Committee may deem relevant.

(b) No option designated as an incentive stock option shall be
granted to any employee of the Company or any subsidiary if such employee owns,
immediately prior to the grant of an option, stock representing more than 10% of
the voting power or more than 10% of the value of all classes of stock of the
Company or a parent or a subsidiary, unless the purchase price for the stock
under such option shall be at least 110% of its fair market value at the time
such option is granted and the option, by its terms, shall not be exercisable
more than five years from the date it is granted. In determining the stock
ownership under this paragraph, the provisions of Section 424(d) of the Code
shall be controlling. In determining the fair market value under this paragraph,
the provisions of Section 7 hereof shall apply.

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<PAGE> 3

6. OPTION AGREEMENT.

Each option shall be evidenced by an option agreement (the "Agreement")
duly executed on behalf of the Company and by the optionee to whom such option
is granted, which Agreement shall comply with and be subject to the terms and
conditions of the Plan. The Agreement may contain such other terms, provisions
and conditions which are not inconsistent with the Plan as may be determined by
the Committee, provided that options designated as incentive stock options shall
meet all of the conditions for incentive stock options as defined in Section 422
of the Code. The date of grant of an option shall be as determined by the
Committee. More than one option may be granted to an individual.

7. OPTION PRICE.

(a) Subject to the provision of Section 5(b), the option price or
prices of shares of the Company's Common Stock for options, whether
non-qualified or incentive stock options, shall be the fair market value of such
Common Stock at the time the option is granted, as determined in accordance with
Section 7(b) below or such other price as the Committee may determine.

(b) If such shares are then listed on any national securities
exchange, the fair market value shall be the mean between the high and low sales
prices, if any, on the largest such exchange on the business day immediately
preceding the date of grant of the option or, if none, shall be determined by
taking a weighted average of the means between the highest and lowest sales
prices on the nearest date before and the nearest date after the date of grant
in accordance with Section 25.2512-2 of the Regulations. If the shares are not
then listed on any such exchange, the fair market value of such shares shall be
the mean between the high and low sales prices, if any, as reported in the
Nasdaq National Market for the business day immediately preceding the date of
grant of the option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales on the nearest date
before and the nearest date after the date of grant in accordance with Section
25.2512-2 of the Regulations. If the shares are not then either listed on any
such exchange or quoted in the Nasdaq National Market, the fair market value
shall be the mean between the average of the "Bid" and the average of the "Ask"
prices, if any, as reported in the National Daily Quotation Service for the
business day immediately preceding the date of grant of the option, or, if none,
shall be determined by taking a weighted average of the means between the
highest and lowest sales prices on the nearest date before and the nearest date
after the date of grant in accordance with Section 25.2512-2 of the Regulations.
If the fair market value cannot be determined under the preceding three
sentences, it shall be determined in good faith by the Committee.

8. MANNER OF PAYMENT; MANNER OF EXERCISE.

(a) Options granted under the Plan may provide for the payment of the
exercise price by delivery of (i) cash or a check payable to the order of the
Company in an

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<PAGE> 4

amount equal to the exercise price of such options, (ii) shares of Common Stock
of the Company owned by the optionee having a fair market value equal in amount
to the exercise price of the options being exercised, (iii) the cancellation of
Shares covered by this Option which are then vested and exercisable having a
fair market value (as determined in accordance with Section 7 of the Plan) equal
in amount to the purchase price of the Shares being purchased, (iv) at the sole
discretion of the Committee, a promissory note in accordance with Section 17
hereof, or (v) any combination of (i), (ii), (iii) and (iv); provided, however,
that payment of the exercise price by delivery of shares of Common Stock of the
Company owned by such optionee or cancellation of Shares covered by the option
may be made only with the consent of the Committee if such payment results in a
charge to earnings for financial accounting purposes as determined by the
Committee. The fair market value of any shares of the Company's Common Stock
which may be delivered upon exercise of an option shall be determined by the
Committee in accordance with Section 7 hereof. With the consent of the
Committee, payment may also be made by delivery of a properly executed exercise
notice to the Company, together with a copy of irrevocable instruments to a
broker to deliver promptly to the Company the amount of sale or loan proceeds to
pay the exercise price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

(b) To the extent that the right to purchase shares under an option
has accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal office of the Company to the person or persons exercising the option
at such time, during ordinary business hours, not more than thirty (30) days
from the date of receipt of the notice by the Company, as shall be designated by
the Company following receipt of such notice, or at such time, place and manner
as may be agreed upon by the Company and the person or persons exercising the
option.

9. EXERCISE OF OPTIONS.

(a) Each option granted under the Plan shall, subject to Section
10(b) and Section 12 hereof, be exercisable at such time or times, during such
period and under such conditions as shall be set forth in the Agreement;
provided, however, that no option granted under the Plan shall have a term in
excess of ten (10) years from the date of grant.

(b) To the extent that an option to purchase shares is not exercised
by an optionee when it becomes initially exercisable, it shall not expire but
shall be carried forward and shall be exercisable, on a cumulative basis, until
the expiration of the exercise period.

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<PAGE> 5

10. TERM OF OPTIONS; EXERCISABILITY.

(a) TERM.

(1) Each option shall expire not more than ten (10) years from
the date of the granting thereof, but shall be subject to earlier termination as
herein provided.

(2) Except as otherwise provided in this Section 10, an option
granted to any employee optionee who ceases to be an employee of the Company or
one of its subsidiaries shall terminate on the 30th day after the date such
optionee ceases to be an employee of the Company or one of its subsidiaries, or
on the date on which the option expires by its terms, whichever first occurs.

(3) If such termination of employment is because (i) the
optionee has become permanently disabled (within the meaning of Section 22(e)(3)
of the Code, or as such term is otherwise defined in the Agreement), (ii) the
optionee has died, or (iii) the optionee has retired after the age of sixty
(60), such option shall terminate on the 180th day following the date such
optionee ceases to be an employee, or on the date on which the option expires by
its terms, whichever first occurs.

(4) Notwithstanding subparagraphs (2) and (3) above, (i) the
Committee may provide for expiration dates which are different than those set
forth above in any specific Agreement evidencing options granted hereunder and
(ii) the Committee shall have the authority to extend the expiration date of any
outstanding option in circumstances in which it deems such action to be
appropriate; provided that no such Agreement or extension shall extend the term
of an option beyond the date on which the option would have expired if no
termination of the optionee's employment had occurred.

(b) EXERCISABILITY. Except as otherwise may be provided in Section
12, an option granted to an employee optionee who ceases to be an employee of
the Company or one of its subsidiaries shall be exercisable only to the extent
that the right to purchase shares under such option has accrued and is in effect
on the date such optionee ceases to be an employee of the Company or one of its
subsidiaries.

11. OPTIONS NOT TRANSFERABLE.

The right of any optionee to exercise any option granted to him or her
shall not be assignable or transferable by such optionee otherwise than (i) by
will or the laws of descent and distribution, or (ii) to the spouse or children
of the optionee or a trust or family limited partnership or similar organization
created solely for the benefit of one or more of such persons; PROVIDED THAT,
prior to any registration by the Company under the Securities Exchange Act of
1934, as amended (the "Exchange Act") no optionee shall assign or transfer any
option if the result of such assignment or transfer shall be to increase, upon
exercise of the option, the total

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<PAGE> 6

number of holders of Common Stock without the prior written consent of the
Committee, which consent may be withheld by the Committee if it reasonably
believes that withholding such consent will reduce the likelihood that the
Company would be required to register its Common Stock under the Exchange Act.
Any option granted under the Plan shall be null and void and without effect upon
the bankruptcy of the optionee to whom the option is granted, or upon any
attempted assignment or transfer not permitted hereunder, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition,
attachment, divorce, trustee process or similar process, whether legal or
equitable, upon such option.

12. RECAPITALIZATIONS, REORGANIZATIONS AND THE LIKE.

(a) In the event that the outstanding shares of the Common Stock of
the Company are changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation by reason of
any reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, combination of shares, or dividends payable in capital stock,
appropriate adjustment shall be made in the number and kind of shares as to
which options may be granted under the Plan and as to which outstanding options
or portions thereof then unexercised shall be exercisable, to the end that
securities or other consideration issuable upon exercise of any option after
such event shall be equivalent to the securities or other consideration which
would have been issuable in respect of the shares issued upon exercise of such
option had such exercise been completed prior to such event; such adjustment in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of such options and with a corresponding adjustment
in the option price per share and subject to no other change which would be
adverse to the interests of the optionee.

(b) In addition, in the case of (i) any sale or conveyance to another
entity of all or substantially all of the assets or properties of the Company
including, without limitation, by way of merger or consolidation, or (ii) a
Change in Control (as hereinafter defined), but in any event specifically
excluding any public offering of stock by the Company, the Committee may, in its
discretion, (1) cancel all outstanding options in exchange for consideration in
cash, shares of stock or other securities of any such purchaser, which
consideration shall be equal in value to the value of any cash, shares of stock
or other securities the optionee would have received had the option been fully
exercised as to all options (whether or not then exercisable) and no disposition
of the shares acquired upon such exercise been made prior to such sale or
conveyance, less the option price therefor or (2) agree with purchaser that
purchaser may assume each outstanding option or replace each outstanding option
with a comparable option to purchase shares of capital stock of any successor
corporation or affiliate thereof. Upon any such option cancellation by the
Committee or receipt of such consideration by the optionee, all outstanding
options shall immediately terminate and be of no further force and effect. The
value of the cash, stock or other securities the optionee would have received if
the option had been exercised shall be determined in good faith by the
Committee, and in the case of shares of the Common Stock of the Company, in
accordance with the provisions of Section 7 hereof. The Committee shall also

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<PAGE> 7

have the discretion to accelerate the exercisability of any options granted
hereunder upon the happening of certain other events, such events to be
specified in the applicable Agreement. Upon any acceleration pursuant to this
Section 12, any options or portion thereof originally designated as incentive
stock options that no longer qualify as incentive stock options under Section
422 of the Code as a result of such acceleration shall be redesignated as
non-qualified stock options. A "Change in Control" shall be deemed to have
occurred if any person, or any two or more persons (other than the Thomas H. Lee
Company and its affiliates, SCP Private Equity Partners, L.P. and its affiliates
or the employees of the Company or its subsidiaries) shall acquire, whether by
purchase, exchange, tender offer, merger, consolidation or otherwise, such
additional shares of the Company's voting stock in one or more transactions, or
series of transactions, such that following such transaction or transactions,
such person or persons and affiliates beneficially own greater than fifty
percent (50%) of the Company's voting stock outstanding, provided that, a Change
of Control shall not include any public offering of stock by the Company.

(d) Except as otherwise provided in this Section 12, upon dissolution
or liquidation of the Company, all options granted under this Plan shall
terminate, but each optionee (if at such time in the employ of or otherwise
associated with the Company or any of its subsidiaries) shall have the right,
immediately prior to such dissolution or liquidation, to exercise his or her
option to the extent then exercisable.

(e) No fraction of a share shall be purchasable or deliverable upon
the exercise of any option, but in the event any adjustment hereunder of the
number of shares covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares.

13. NO SPECIAL EMPLOYMENT RIGHTS.

Nothing contained in the Plan or in any option granted under the Plan shall
confer upon any option holder any right with respect to the continuation of his
or her employment by the Company (or any subsidiary) or interfere in any way
with the right of the Company (or any subsidiary), subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the option holder from
the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Committee at the
time.

14. WITHHOLDING.

The Company's obligation to deliver shares upon the exercise of any option
granted under the Plan or payment of any consideration specified in Section 12
shall be subject to the option holder's satisfaction of all applicable Federal,
state and local income, excise, employment and any other tax withholding
requirements.

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<PAGE> 8

15. RESTRICTIONS ON ISSUE OF SHARES.

(a) Notwithstanding the provisions of Section 8, the Company may
delay the issuance of shares covered by the exercise of an option and the
delivery of a certificate for such shares until one of the following conditions
shall be satisfied:

(i) The shares with respect to which such option has been
exercised are at the time of the issuance of such shares effectively
registered or qualified under applicable Federal and state securities
laws now in force or as hereafter amended; or

(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such
shares are exempt from registration and qualification under applicable
Federal and state securities laws now in force or as hereafter
amended.

(b) It is intended that all exercises of options shall be effective,
and the Company shall use its best efforts to bring about compliance with the
above conditions within a reasonable time, except that the Company shall be
under no obligation to qualify shares or to cause a registration statement or a
post-effective amendment to any registration statement to be prepared for the
purpose of covering the issuance of shares in respect of which any option may be
exercised, except as otherwise agreed to by the Company in writing.

16. PURCHASE FOR INVESTMENT; RIGHTS OF HOLDER ON SUBSEQUENT REGISTRATION.

Unless the shares to be issued upon exercise of an option granted under the
Plan have been effectively registered under the Securities Act of 1933, as now
in force or hereafter amended (the "1933 Act"), the Company shall be under no
obligation to issue any shares covered by any option unless the person who
exercises such option, in whole or in part, shall give a written representation
and undertaking to the Company which is satisfactory in form and scope to
counsel for the Company and upon which, in the opinion of such counsel, the
Company may reasonably rely, that he or she is acquiring the shares issued
pursuant to such exercise of the option for his or her own account as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares, and that he or she will make no transfer of the
same except in compliance with any rules and regulations in force at the time of
such transfer under the 1933 Act, or any other applicable law, and that if
shares are issued without such registration, a legend to this effect may be
endorsed upon the securities so issued. In the event that the Company shall,
nevertheless, deem it necessary or desirable to register under the 1933 Act, or
other applicable statutes, any shares with respect to which an option shall have
been exercised, or to qualify any such shares for exemption from registration
requirements of the 1933 Act, or other applicable statutes, then the Company may
take such action and may require from each optionee such information in writing
for use in any registration statement, supplementary registration statement,
prospectus, preliminary prospectus or offering circular as is reasonably

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<PAGE> 9

necessary for such purpose and may require reasonable indemnity to the Company
and its officers and directors and controlling persons from such holder against
all losses, claims, damages and liabilities arising from such use of the
information so furnished and caused by any untrue statement of any material fact
therein or caused by the omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made.

17. LOANS

The Company may, in its discretion, make loans to optionees to permit them
to exercise options. If loans are made, the requirements of all applicable
Federal and state laws and regulations regarding such loans must be met.

18. MODIFICATION OF OUTSTANDING OPTIONS.

The Committee may authorize the amendment of any outstanding option with
the consent of the optionee when and subject to such conditions as are deemed to
be in the best interests of the Company and in accordance with the purposes of
this Plan.

19. APPROVAL OF STOCKHOLDERS.

The Plan shall be subject to approval by the vote of stockholders holding
at least a majority of the voting stock of the Company present, or represented,
and entitled to vote at a duly held stockholders' meeting, or by written consent
of the stockholders as provided for under applicable state law, within twelve
(12) months after the adoption of the Plan by the Board of Directors and shall
take effect as of the date of adoption by the Board of Directors upon such
approval. The Committee may grant options under the Plan prior to such approval,
but any such options shall become effective as of the date of stockholder
approval only upon such approval and, accordingly, no such option may be
exercisable prior to such approval.

20. TERMINATION AND AMENDMENT.

The Board of Directors may at any time terminate the Plan or make such
modification or amendment thereof as it deems advisable; provided, however, that
except as provided in this Section 20, the Board of Directors may not, without
the approval of the stockholders of the Company obtained in the manner stated in
Section 19, increase the maximum number of shares for which options may be
granted or change the designation of the class of persons eligible to receive
options under the Plan. The Committee may grant options hereunder after an
amendment to the Plan adopted by the Board of Directors requiring stockholder
approval under Section 20, but any such option shall become effective as of the
date of stockholder approval only upon such approval and, accordingly, no such
option may be exercisable prior to such approval. The Committee may terminate,
amend or modify any outstanding option without the consent of the option holder;
provided, however, that, except as provided in Section 12, without the consent
of

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the optionee, the Committee shall not change the number of shares subject to an
option, nor the exercise price thereof, nor amend the term of such option nor
make any other change that would be adverse to the interests of the optionee.

21. RESERVATION OF STOCK.

The Company shall at all times during the term of the Plan reserve and keep
available such number of shares of stock as will be sufficient to satisfy the
requirements of the Plan and shall pay all fees and expenses necessarily
incurred by the Company in connection therewith.

22. LIMITATION OF RIGHTS IN THE OPTION SHARES.

An optionee shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the options except to the extent that the option
shall have been exercised with respect thereto, the exercise price therefor
shall have been paid in full, and the optionee has complied with all applicable
provisions of the Plan and the Agreement pursuant to which such options were
granted.

23. NOTICES.

Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business to the
attention of the Corporate Secretary and, if to an optionee, to the address set
forth on the records of the Company.

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<PAGE> 1
Exhibit 10.10

Execution Copy
--------------

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 29th day
of November, 1996 is entered into between JHFSC Acquisition Corp., a Delaware
corporation with its principal place of business at One Beacon Street, Boston,
Massachusetts (the "Company"), and John H. Goldsmith, residing at 55 Galloupes
Point, Swampscott, MA 01907 (the "Executive").

The Executive currently serves as the Chairman, President and Chief
Executive Officer of John Hancock Freedom Securities Corporation ("JHFS"). As of
the date hereof, the Company will acquire substantially all of the outstanding
capital stock of JHFS pursuant to a certain Contribution Agreement dated as of
October 4, 1996, and in connection with such acquisition, the Company desires to
employ the Executive on the terms provided herein.

In consideration of the mutual covenants and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as follows:

1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the Company, upon the terms
set forth in this Agreement, for the period commencing on the date of this
Agreement and ending on December 31, 1999 (the "Expiration Date"), unless
extended or sooner terminated in accordance with the provisions of this
Agreement. On each date that is four months prior to the Expiration Date then in
effect, the Expiration Date shall be automatically extended by one year unless
either party hereto shall have previously given notice to the other party that
the Expiration Date shall not be so extended.

2. POSITION AND PERFORMANCE.

2.1 OFFICES. The Executive shall serve as Chairman, President
and Chief Executive Officer of the Company, as Chairman and Chief
Executive Officer of the Company's subsidiary, Tucker Anthony
Incorporated ("Tucker"), and as Chairman of the Company's subsidiary,
Sutro & Co., Incorporated ("Sutro"). The Executive shall be subject to
the supervision of the Board of Directors of the Company (the "Board of
Directors") and shall also have such other powers, duties and
responsibilities commensurate with such office or offices as may from
time to time reasonably be prescribed by the Board of Directors. In
addition, the Executive agrees to serve during the term of his
employment hereunder, if elected or appointed thereto, in one or more
positions as an officer or director of the Company or any one or more
of its present or future Subsidiaries, or as an officer, trustee or
director of any pension plan of the Company or any of its Subsidiaries.
Service in such additional offices will be without additional
compensation except for reimbursement of reasonably related business
expenses on the same terms as provided elsewhere in this Agreement. The
Company

<PAGE> 2

shall not cause the Executive to relocate his residence in connection with the
fulfillment of his duties and responsibilities hereunder without the Executive's
prior consent.

2.2 PERFORMANCE. During the term hereof, the Executive shall
be employed by the Company on a full-time basis and shall perform and
discharge (faithfully, diligently and to the best of his ability) his
duties and responsibilities hereunder and shall be accountable to the
Board of Directors; provided, however, that Executive may pursue
community and charitable activities and hold positions in connection
therewith and such other activities as may be approved in advance by
the Board of Directors, such approval not to be unreasonably withheld.

3. COMPENSATION AND BENEFITS.

3.1 SALARY. The Company shall pay the Executive such annual
base salary as the Employee and the Board of Directors agree upon from
time to time. In addition, the Employee shall be entitled to receive
bonus compensation, if any, in such amount or pursuant to such formula
as the Executive and the Board of Directors agree upon from time to
time. Notwithstanding the foregoing, the Employee shall be entitled to
receive minimum cash compensation under this Agreement (whether as
salary, bonus or otherwise) in any calendar year of at least $750,000,
less such amounts or deductions required to be withheld by applicable
law (it being agreed that the Employee's cash compensation during
calendar year 1996, whether paid to the Employee before or after the
date of this Agreement, shall not in the aggregate be less than
$750,000). Base salary shall be payable in accordance with the payroll
practices of the Company. In addition to the foregoing minimum annual
cash compensation, if any executive bonus pool or other compensation
shall be payable to executives of the Company or any of its
Subsidiaries in connection with a sale of substantially all of the
assets of the Company, or an acquisition by any party of capital stock
of the Company, Tucker or Sutro or a merger, consolidation or other
transaction in which the Company, Tucker or Sutro is not the surviving
corporation or which otherwise results in a change in control of the
Company, then the Executive shall be entitled to receive a
proportionate amount of any such bonus or other compensation based on
the Executive's position at the Company on the date of consummation of
such transaction.

3.2 OTHER FRINGE BENEFITS. The Executive shall be entitled to
participate in all benefit programs (including, without limitation, all
life and disability insurance, health and, accident plans, retirement
plans, stock incentive plans, and retention plans and other
arrangements) that the Company (or its subsidiaries) makes available to
employees or key executives of the Company (or any such subsidiary),
with the Executive's participation to be at a level consistent with the
Executive's positions with the Company, Tucker and Sutro. The Executive
shall be entitled to six weeks paid vacation per year, to be taken at
such times as he deems appropriate. The Executive shall be entitled to
carry forward unused vacation pay and to cash out any unused vacation
pay upon the termination of the Executive's employment. The benefits
described in this Section 3.2 are hereinafter referred to as the
"Benefits".

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<PAGE> 3

3.3 REIMBURSEMENT OF EXPENSES. The Company shall promptly
reimburse the Executive for reasonable travel, entertainment and other
expenses incurred or paid by the Executive in connection with, or
related to, the performance of the Executive's duties, responsibilities
or services under this Agreement and incurred or paid consistent with
past practices, upon presentation by the Executive of documentation,
expense statements, vouchers and/or such other supporting information
as the Company may request, provided, however, that the amount
available for such travel, entertainment and other expenses may be
fixed in advance by the Board.

4. EMPLOYMENT TERMINATION.

4.1 DATE OF TERMINATION: TERM OF EMPLOYMENT. The term "Date of
Termination" shall mean the earlier of (i) the Expiration Date or (ii)
if the Executive's employment is sooner terminated hereunder, the date
on which such termination is to be effective pursuant to the terms
hereof. For all purposes of this Agreement, references to the "term" of
the Executive's employment hereunder shall mean the period commencing
on the date hereof and ending on the Date of Termination.

4.2 UPON DEATH OR DISABILITY. This Agreement shall terminate
on the date of the death or disability of the Executive. As used in
this Agreement, the term "disability" shall mean the inability of the
Executive, due to a physical or mental disability, for a period of 180
consecutive days to perform the essential functions of the Executive's
position which are contemplated under this Agreement. A determination
of disability shall be made by a physician satisfactory to both the
Executive and the Company, provided that if the Executive and the
Company do not agree on a physician, the Executive and the Company
shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding
on all parties. The reasonable fees and expenses of any and all such
physicians shall be borne by the Company.

4.3 BY THE COMPANY FOR CAUSE. This Agreement may be terminated
by the Company for cause immediately upon written notice by the Company
to the Executive setting forth the basis for such termination with
particularity. For the purposes of this Section 4.3, "cause" for
termination shall mean (i) a material failure of the Executive to
perform the Executive's assigned duties for the Company or gross
negligence or willful misconduct of the Executive in the performance of
the Executive's assigned duties for the Company or any breach of any
covenant contained in Section 6 or 7 hereof, in each case after notice
and a reasonable opportunity to cure (if such act or failure shall be
susceptible to cure) of not less than 30 days, and (ii) the conviction
of the Executive of, or the entry of a pleading of guilty or nolo
contendere by the Executive to, any crime involving moral turpitude or
any felony.

4.4 BY THE EXECUTIVE FOR GOOD REASON. This Agreement may be
terminated by the Executive upon 30 days' prior written notice to the
Company for good reason. For

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<PAGE> 4

purposes of this Section 4.4, "good reason" shall mean (i) any removal by the
Company of the Executive from any of the positions indicated in Section 2
hereof, except in connection with termination of the Executive's employment for
cause or termination or suspension of employment due to the Executive's
incapacity, (ii) a reduction in the Executive's compensation below the minimum
amount provided for in Section 3.1 hereof or Benefits (except to the extent that
any such reduction is the result of a change to or termination of a benefit
program in which the Executive participates which applies equally to all other
participants therein), or (iii) any breach by the Company of its obligations
under this Agreement or any other willful action by the Company that is
materially inconsistent with the terms of this Agreement after written notice
and a reasonable opportunity to cure of not less than 30 days.

4.5 AT THE ELECTION OF EITHER PARTY. This Agreement may be
terminated by either the Company or the Executive at any time upon at
least 30 days' prior written notice.

5. EFFECT OF TERMINATION.

5.1 TERMINATION BY THE COMPANY FOR CAUSE OR TERMINATION BY
EXECUTIVE PURSUANT TO SECTION 4.5. In the event that the Executive's
employment is terminated for cause pursuant to Section 4.3 or the
Executive shall terminate this Agreement pursuant to Section 4.5, the
Company shall pay to the Executive salary, bonus and other cash
compensation at his then current rate of pay (which shall be not less
than the amount of salary, bonus and other cash compensation earned per
day for the fiscal year ended immediately prior to such Date of
Termination) and Benefits through the Date of Termination; provided,
however, that in the event of any termination of the Executive's
employment for cause, the foregoing compensation amount shall be the
minimum compensation set forth in Section 3.1 hereof.

5.2 TERMINATION BY THE COMPANY WITHOUT CAUSE OR TERMINATION BY
THE EXECUTIVE PURSUANT TO SECTION 4.4. In the event that the
Executive's employment is terminated by the Company pursuant to Section
4.5 or the Executive terminates his employment pursuant to Section 4.4,
the Company shall pay to the Executive an amount equal to his salary,
bonus and other cash compensation at his then current rate of pay
(which shall be not less than the amount of salary, bonus and other
cash compensation earned per day for the fiscal year ended immediately
prior to such Date of Termination) and Benefits (or the cash value
thereof) through the LATER of (i) the end of the twenty-fourth (24th)
month following such Date of Termination, or (ii) the Expiration Date
(the "Severance Period"). The compensation payable during the Severance
Period shall be paid in a lump sum amount equal to $500,000 within five
business days after the Date of Termination and the remaining
compensation shall be paid to the Executive in equal monthly
installments on the first day of each month during the Severance
Period, plus accrued interest on such installment amounts at a rate
equal to LIBOR. In addition, any unvested stock options, restricted
stock or other equity interests of the Company or any of its
Subsidiaries held by the Executive on the Date of Termination shall
become fully vested, and in the case of stock options immediately
exercisable, to the extent not prohibited by applicable law.

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<PAGE> 5

5.3 TERMINATION FOR DEATH OR DISABILITY. If the Executive's
employment is terminated by death or because of disability pursuant to
Section 4.2, the Company shall pay to the estate of the Executive or to
the Executive, as the case may be, salary, bonus and other cash
compensation at his then current rate of pay (which shall be not less
than the amount of salary, bonus and other cash compensation earned per
day for the fiscal year ended immediately prior to such Date of
Termination) and Benefits up to the end of the month in which the
termination of the Executive's employment because of death or
disability occurs.

5.4 LIQUIDATED DAMAGES. Any payments paid to the Executive by
the Company under this Section 5 shall be deemed liquidated damages and
shall be in lieu of any other rights to which the Executive may be
entitled.

5.5 SURVIVAL. The provisions of Sections 5, 6 and 7 shall
survive the termination of this Agreement.

6. NON-SOLICIT.

(a) During the Non-solicit Period, the Executive will not:

(i) solicit, divert or take away, or attempt to divert or
to take away, the business or patronage of any of the brokerage or
investment banking clients, customers or accounts of the Company or its
subsidiaries.

(ii) solicit any officer, senior manager or senior broker
who was an employee of the Company at any time during the term of this
Agreement to leave such employment.

(b) For purposes of this Section 6, the term "Non-solicit Period"
shall mean the period commencing on the date hereof and (i) ending two years
after the date the Executive's employment is terminated by the Company pursuant
to Section 4.5 or by the Executive pursuant to Section 4.4, or (ii) ending six
months after the date the Executive terminates his employment pursuant to
Section 4.5; provided, however that this Section 6 shall not apply if the
Executive's termination of employment is based upon non-renewal of this
Agreement by either party upon the Expiration Date.

(c) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

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<PAGE> 6

(d) The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and its affiliates
and are considered by the Executive to be reasonable for such purpose. The
Executive agrees that any breach of this Section 6 could cause the Company and
its affiliates substantial and irrevocable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, the
Company and its affiliates shall have the right to seek specific performance and
injunctive relief.

7. UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION.

(a) CONFIDENTIALITY. The Executive acknowledges that the
Company, its subsidiaries and its affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its affiliates and that the Executive may learn of Confidential
Information during the course of his employment. The Executive will comply with
the policies and procedures of the Company for protecting Confidential
Information and, for the term hereof and thereafter, will not disclose to any
person (except as required by any statutory or regulatory requirement or
mandatory court order, subpoena or other legal process, and except to any person
required for the proper performance of his duties and responsibilities to the
Company and its affiliates), or use for his own benefit or gain or otherwise use
in a manner adverse to the interests of the Company and its affiliates, any
Confidential Information obtained by the Executive incident to his employment or
other association with the Company or any of its affiliates.

(b) RETURN OF DOCUMENTS. All documents, records, tapes and
other media of every kind and description relating to the business, present or
otherwise, of the Company, its subsidiaries or its affiliates and any copies, in
whole or in part, thereof (the "Documents"), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company and its
affiliates. The Executive shall safeguard all Documents and shall surrender to
the Company at the time his employment terminates, or at such earlier time or
times as the Board of Directors or its designee may specify, any Documents then
in the Executive's possession or control.

(c) ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY. The
Executive shall promptly and fully disclose all Intellectual Property to the
Company. The Executive hereby assigns to the Company (or as otherwise directed
by the Company) the Executive's full right, title and interest in and to all
Intellectual Property now owned or hereafter acquired. The Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights or
other proprietary rights and to do such other acts (including without limitation
the execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the Company and
to permit the Company to enforce any patents, copyrights or other proprietary
rights to the Intellectual Property. The Executive will not charge the Company
for time spent in complying with these obligations. All copyrightable works that
the Executive creates shall be considered "work made for hire"

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<PAGE> 7

(d) DEFINED TERMS. "Confidential Information" as used herein means
any and all information of the Company and its subsidiaries that is not
generally known by others with whom they compete or do business, or with whom
they plan to compete or do business and any and all information, not publicly
known, which, if disclosed, would assist in competition against the Company and
its subsidiaries, or the disclosure of which would otherwise be adverse to the
interests of the Company or any of its subsidiaries. Confidential Information
also includes comparable information that the Company or any of its subsidiaries
have received belonging to others or which was received by the Company or any of
its subsidiaries with any understanding that it would not be disclosed;
provided, however, that Confidential Information shall not include anything (i)
that has been disclosed to the public (other than in connection with a breach by
the Executive of his obligations hereunder), (ii) that has been obtained by the
Executive from a third party otherwise than in violation of a confidentiality
agreement to which such third party is bound, or (iii) that has otherwise
lawfully entered the public domain. "Intellectual Property" as used herein means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) relating to the business of the Company, its Subsidiaries and its
affiliates conceived, made, created, developed or reduced to practice by the
Executive (whether alone or with others, whether or not during normal business
hours or on or off Company premises) during the Executive's employment.

8. NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States mail, by registered or certified
mail, postage prepaid, or via a reputable nationwide overnight courier service
addressed to the other party at the address shown above, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 8.

9. INDEMNITY. The Company hereby agrees, to the maximum extent
permitted from time to time under the law of the State of Delaware, to indemnify
the Executive, and upon request shall advance expenses to the Executive if he
shall become a party or is threatened to be made a party to, any threatened,
pending or completed action, suit, proceeding or claim, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was or has
agreed to be a director or hold any of such offices, against expenses (including
attorneys' fees and expenses), judgments, fines, penalties and amounts paid in
settlement incurred in connection with investigation, preparation to defend or
defense of such action, suit, proceeding or claim; PROVIDED, HOWEVER, that the
foregoing shall not require the Company to indemnify the Executive against, or
advance expenses to the Executive in connection with, any action, suit,
proceeding or claim resulting from any breach of the Executive's duties
hereunder that would permit the Company to terminate this Agreement for cause.
Such indemnification shall not be exclusive of other indemnification rights
arising under any by-law, agreement, vote of directors or stockholders or
otherwise.

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<PAGE> 8

10. PRONOUNS. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.

11. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.

12. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by each of the Company and the Executive.

13. GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of The Commonwealth of Massachusetts.

14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by him.

15. MISCELLANEOUS.

15.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

15.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

15.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

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<PAGE> 9

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.

JHFSC ACQUISITION CORP.

By: /s/ Kevin J. McKay
-------------------------------

Title: Secretary
----------------------------

/s/ John H. Goldsmith
-----------------------------------
John H. Goldsmith

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<PAGE> 1

Exhibit 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 3rd day of
December, 1997 is entered into between Freedom Securities Corporation, a
Massachusetts corporation with its principal place of business at One Beacon
Street, Boston, Massachusetts (the "Company"), and Gregory N. Thomas, ("the
Executive").

In consideration of the mutual covenants and promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties agree as
follows:

2. POSITION AND PERFORMANCE.

2.1 OFFICES. The Executive shall serve as an Executive Vice
President of the Company. The Executive shall be subject to the supervision of
the Chief Executive Officer (the "CEO") of the Company and shall also have such
other powers, duties and responsibilities commensurate with such office or
offices as may from time to time reasonably be prescribed by the CEO. In
addition, the Executive agrees to serve during the term of his employment
hereunder, if elected or appointed thereto, in one or more positions as an
officer or director of the Company or any one or more of its present or future
Subsidiaries. Service in such additional offices will be without additional
compensation except for reimbursement of reasonably related business expenses
on the same terms as provided elsewhere in this Agreement. The Company shall not
cause the Executive to relocate his residence in connection with the fulfillment
of his duties and responsibilities hereunder without the Executive's prior
consent.

2.2 PERFORMANCE. During the term hereof, the Executive shall
be employed by the Company on a full-time basis and shall perform and discharge
(faithfully, diligently and to the best of his ability) his duties and
responsibilities hereunder and shall be accountable to the CEO; PROVIDED,
HOWEVER, that Executive may pursue community and charitable activities and hold
positions in connection therewith and such other activities as may be approved
in advance by the CEO, such approval not to be unreasonably withheld.

3. COMPENSATION AND BENEFITS.

3.1 SALARY. The Company shall pay the Executive such annual
base salary as the employee and the CEO agree upon from time to time. In
addition, the Employee shall be entitled to receive bonus compensation, if any,
in such amount or

<PAGE> 2

pursuant to such formula as the Executive and the CEO agree upon from time to
time. Notwithstanding the foregoing, the Employee shall be entitled to receive
minimum cash compensation under this Agreement, whether as salary, bonus, or
otherwise (not including any gain on the purchase of Company stock) in any
calendar year of at least $700,000, less such amounts or deductions required to
be withheld by applicable law. Base salary shall be payable in accordance with
the payroll practices of the Company.

3.2 OTHER FRINGE BENEFITS. The Executive shall be entitled to
participate in all benefit programs (including, without limitation, all life and
disability insurance, health and accident plans, retirement plans, stock
incentive plans, and retention plans and other arrangements) that the Company
(or its subsidiaries) makes available to employees or key executives of the
Company (or any such subsidiary), with the Executive's participation to be at a
level consistent with the Executive's position with the Company. The Executive
shall be entitled to six weeks paid vacation per calender year, to be taken at
such times as he deems appropriate. The Executive shall be entitled to carry
forward unused vacation pay and to cash out any unused vacation pay upon the
termination of the Executive's employment. The benefits described in this
Section 3.2 are hereinafter referred to as the "Benefits".

3.3 REIMBURSEMENT OF EXPENSES. The Company shall promptly
reimburse the Executive for reasonable travel, entertainment and other expenses
incurred or paid by the Executive in connection with, or related to, the
performance of the Executive's duties, responsibilities or services under this
Agreement upon presentation by the Executive of documentation, expense
statements, vouchers and/or other supporting information as the Company may
request, PROVIDED, HOWEVER, that the amount available for such travel,
entertainment and other expenses may be fixed in advance by the CEO.

4. EMPLOYMENT TERMINATION.

4.1 DATE OF TERMINATION: TERM OF EMPLOYMENT. The term "Date
of Termination" shall mean the earlier of (i) the Expiration Date or (ii) if the
Executive's employment is sooner terminated hereunder, the date on which such
termination is to be effective pursuant to the terms hereof. For all purposes of
this Agreement, references to the "term" of the Executive's employment hereunder
shall mean the period commencing on the date hereof and ending on the Date of
Termination.

4.2 UPON DEATH OR DISABILITY. This Agreement shall terminate
on the date of the death or disability of the Executive. As used in this
Agreement, the term "disability" shall mean the inability of the Executive, due
to a physical or mental disability, for a period of 180 consecutive days to
perform the essential functions of the Executive's position which are
contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Executive and the Company, PROVIDED THAT
if the Executive and the Company do not agree on a physician, the Executive and
the Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all

<PAGE> 3

parties. The reasonable fees and expenses of any and all such physicians shall
be borne by the Company.

4.3 BY THE COMPANY FOR CAUSE. This Agreement may be terminated
by the Company for cause immediately upon written notice by the Company to the
Executive setting forth the basis for such termination with particularity. For
the purposes of this Section 4.3, "cause" for termination shall mean (i) a
material failure of the Executive to perform the Executive's assigned duties for
the Company or gross negligence or willful misconduct of the Executive in the
performance of the Executive's assigned duties for the Company or any breach of
any covenant contained in Section 6 or 7 hereof, in each case after notice and a
reasonable opportunity to cure (if such act or failure shall be susceptible to
cure) of not less than 30 days, and (ii) the conviction of the Executive of, or
the entry of a pleading of guilty or nolo contendere by the Executive to, any
crime involving moral turpitude or any felony.

4.4 BY THE EXECUTIVE FOR GOOD REASON. This Agreement may be
terminated by the Executive upon 30 days' prior written notice to the Company
for good reason. For purposes of this Section 4.4, "good reason" shall mean (i)
any removal by the Company of the Executive from the position indicated in
Section 2 hereof, except in connection with termination of the Executive's
employment for cause or termination or suspension of employment due to the
Executive's incapacity, (ii) a reduction in the Executive's compensation below
the minimum amount provided for in Section 3.1 hereof or Benefits (except to the
extent that any such reduction is the result of a change to or termination of a
benefit program in which the Executive participates which applies equally to all
other participants therein), or (iii) any breach by the Company of its
obligations under this Agreement or any other willful action by the Company that
is materially inconsistent with the terms of this Agreement after written notice
and a reasonable opportunity to cure of not less that 30 days.

4.5 AT THE ELECTION OF EITHER PARTY. This Agreement may be
terminated by either the Company or the Executive at any time upon at least 30
days' prior written notice.

5. EFFECT OF TERMINATION.

5.1 TERMINATION BY THE COMPANY FOR CAUSE OR TERMINATION BY
EXECUTIVE PURSUANT TO SECTION 4.5. In the event that the Executive's employment
is terminated for cause pursuant to section 4.3 or the Executive shall terminate
this Agreement pursuant to Section 4.5, the Company shall pay to the Executive
salary, bonus and other cash compensation at his then current rate of pay (which
shall be not less than the amount of salary, bonus and other cash compensation
earned per day for the fiscal year ended immediately prior to such Date of
Termination and in no event less than the $700,000 per annum rate of pay) and
Benefits through the Date of Termination, PROVIDED, HOWEVER, that in the event
of any termination of the Executive's employment

<PAGE> 4

for cause, the foregoing compensation amount shall be the minimum compensation
set forth in Section 3.1 hereof.

5.2 TERMINATION BY THE COMPANY WITHOUT CAUSE OR TERMINATION BY
THE EXECUTIVE PURSUANT TO SECTION 4.4. In the event that the Executive's
employment is terminated by the Company pursuant to Section 4.5 or the Executive
terminates his employment pursuant to Section 4.4, the Company shall pay to the
Executive an amount equal to his salary, bonus and other cash compensation at
his then current rate of pay (which shall be not less than the amount of salary,
bonus and other cash compensation earned per day for the fiscal year ended
immediately prior to such Date of Termination and in no event less than the
$700,000 per annum rate of pay) and benefits (or the cash value thereof) through
the end of the twenty-fourth (24th) month following such Date of Termination
(the "Severance Period"). The compensation payable during the Severance Period
shall be paid in a lump sum amount equal to $500,000 within five business days
after the Date of Termination and the remaining compensation shall be paid to
the Executive in equal monthly installments on the first day of each month
during the Severance Period, plus accrued interest on such installment amounts
at a rate equal to LIBOR. In addition, any unvested stock options, restricted
stock or other equity interests of the Company or any of its Subsidiaries held
by the Executive on the Date of Termination shall become fully vested, and in
the case of stock options immediately exercisable, to the extent not prohibited
by applicable law.

5.3 TERMINATION FOR DEATH OR DISABILITY. If the Executive's
employment is terminated by death or because of disability pursuant to Section
4.2, the Company shall pay to the estate of the Executive or to the Executive,
as the case may be, salary, bonus and other cash compensation at his then
current rate of pay (which shall be not less than the amount of salary, bonus
and other cash compensation earned per day for the fiscal year ended immediately
prior to such Date of Termination and in no event less than the $700,000 per
annum rate of pay) and Benefits up to the end of the month in which the
termination of the Executive's employment because of death or disability occurs.

5.4 LIQUIDATED DAMAGES. Any payments paid to the Executive by
the Company under this Section 5 shall be deemed liquidated damages and shall be
in lieu of any other rights to which the Executive may be entitled.

5.5 SURVIVAL. The provisions of Sections 5, 6 and 7 shall
survive the termination of this Agreement.

6. NON-SOLICIT.

(a) During the Non-solicit Period, the Executive will not:

<PAGE> 5

(i) solicit, divert or take away, or attempt to
divert or to take away, the business or patronage of any of
the brokerage or investment banking clients, customers or
accounts of the Company or its subsidiaries.

(ii) solicit any officer, senior manager or senior
broker who was an employee of the Company at any time during
the term of this Agreement to leave such employment.

(c) If any restriction set forth in this Section 6 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.

(d) The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the Company and its
affiliates and are considered by the Executive to be reasonable for such
purpose. The Executive agrees that any breach of this Section 6 could cause the
Company and its affiliates substantial and irrevocable damage and therefore, in
the event of any such breach, in addition to such other remedies which may be
available, the Company and its affiliates shall have the right to seek specific
performance and injunctive relief.

7. UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION.

(a) CONFIDENTIALITY. The Executive acknowledges that the
Company, its subsidiaries and its affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its affiliates and that the Executive may learn of Confidential
Information during the course of his employment. The Executive will comply with
the written policies and procedures of the Company for protecting Confidential
Information which will be provided to him and, for the term hereof and
thereafter, will not disclose to any person (except as required by any
statutory or regulatory requirement or mandatory court order, subpoena or other
legal process, and except to any person required for the proper performance of
his duties and responsibilities to the Company and its affiliates), or use for
his own benefit or gain or otherwise use in a manner adverse to the interests of
the Company and its affiliates, any Confidential Information obtained by the
Executive incident to his employment or other association with the Company or
any of its affiliates.

(b) RETURN OF DOCUMENTS. All documents, records, tapes
and other media of every kind and description relating to the business, present
or otherwise, of the

<PAGE> 6

Company, its subsidiaries or its affiliates and any copies, in whole or in part,
thereof (the "Documents"), whether or not prepared by the Executive, shall be
the sole and exclusive property of the Company and its affiliates. The Executive
shall safeguard all Documents and shall surrender to the Company at the time his
employment terminates, or at such earlier time or times as the CEO or his
designee may specify, all Documents then in the Executive's possession or
control.

(c) ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY. The
Executive shall promptly and fully disclose all Intellectual Property to the
Company. The Executive hereby assigns to the Company (or as otherwise directed
by the Company) the Executive's full right, title and interest in and to all
Intellectual Property as defined herein. The Executive agrees to execute any and
all applications for domestic and foreign patents, copyrights or other
proprietary rights and to do such other acts (including without limitation the
execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the Company and
to permit the Company to enforce any patents, copyrights or other proprietary
rights to the Intellectual Property. The Executive will not charge the Company
for time spent in complying with these obligations. All copyrightable works that
the Executive creates shall be considered "work made for hire".

(d) DEFINED TERMS. "Confidential Information" as used herein
means any and all information of the Company and its subsidiaries that is not
generally known by others with whom they compete or do business, or with whom
they plan to compete or do business and any and all information, not publicly
known which, if disclosed, would assist in competition against the Company and
its subsidiaries, or the disclosure of which would otherwise be adverse to the
interest of the Company or any of its subsidiaries. Confidential Information
also includes comparable information that the Company or any of its subsidiaries
have received belonging to others or which was received by the Company or any of
its subsidiaries with any understanding that it would not be disclosed;
PROVIDED, HOWEVER, that Confidential Information shall not include anything (i)
that has been disclosed to the public (other than in connection with a breach by
the Executive of his obligations hereunder), (ii) that has been obtained by the
Executive from a third party otherwise than in violation of a confidentiality
agreement to which such third party is bound, or (iii) that has otherwise
lawfully entered the public domain. "Intellectual Property" as used herein means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) relating to the business of the Company, its Subsidiaries and
its affiliates conceived, made, created, developed or reduced to practice by
the Executive (whether alone or with others, whether or not during normal
business hours or on or off Company premises) during the Executive's employment.

<PAGE> 7

New York Stock Exchange, Inc. Judgment may be entered on an arbitrator's award
relating to this Agreement in any court having jurisdiction.

16. MISCELLANEOUS.

16.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

16.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

16.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.

FREEDOM SECURITIES CORPORATION

By: /s/ John H. Goldsmith
-------------------------------

Title: President
----------------------------

EXECUTIVE: /s/ Gregory N. Thomas
-----------------------
Gregory N. Thomas

<PAGE> 1
Exhibit 10.12

[FREEDOM SECURITIES CORPORATION LETTERHEAD]

April 2, 1997

Mr. William C. Dennis, Jr.
312 Hadhill Road
Wilton, CT 06897

Re: Employment Terms
--------------------

Dear Bill,

This letter confirms our offer of employment under the following terms:

1. EMPLOYMENT

Effective May 12, 1997, you will be employed as Chief Financial Officer
("CFO") of JHFSC Acquisition Corp. ("JHFSCAC") and CFO of Freedom Securities
Corporation ("Freedom"). You will have supervisory authority over the CFOs at
each of JHFSCAC's subsidiaries (collectively, with JHFSCAC and Freedom, the
"Company"). You will attend the meetings of the Board of Directors and Operating
Committee meetings of the Company. You will report directly to me and, as
appropriate, the Board of Directors of JHFSCAC. You will be responsible for the
management and reporting of all financial and operating aspects of the Company's
business.

2. TERM

The term of this agreement is two years commencing on the date of your
employment, May 12, 1997 (the "Term").

3. BASE SALARY

Your base annual salary will be $150,000 from May 12, 1997 to May 11,
1998. Your base annual salary will be $400,000 from May 12, 1998 to May 12,1999.

<PAGE> 2

4. LOAN

JHFSCAC shall advance you a loan in the amount of $250,000 on your
employment date (May 12, 1997), which shall be forgiven on May 12, 1998 provided
you are employed by JHFSCAC on such date. The loan shall also be forgiven if you
are terminated without cause or resign for "good reason", as defined below.
(Attach promissory note)

5. BONUS

You shall be entitled to a bonus payable in accordance with the regular
policies of the Company as they may from time to time exist, as follows:

a) a minimum annualized bonus of $200,000 for 1997 and a minimum annual
bonus of $200,000 for 1998.

b) If Freedom Securities reaches its Budget numbers in each of the
first two 12 month periods of your employment, you shall receive an
additional minimum bonus of $200,000 for each such period.

c) an additional merit bonus as determined by the Board of Directors
of JHFSCAC in its sole discretion.

6. TERMINATION

You understand that this agreement does not constitute a contract or
promise by JHFSCAC to employ you for a particular period of time and that either
party may terminate this agreement immediately upon notice. In the event JHFSCAC
terminates your employment without cause or you resign for "good reason", you
shall be entitled to receive the greater of your compensation for the balance of
the Term or $600,000. The $600,000 sum is only payable if the termination
without cause or the resignation for "good reason" occurs within four years of
your employment date. "Good Reason" shall mean (i) any removal by JHFSCAC of
you from your CFO position, except in connection with termination of your
employment for cause, (ii) a material reduction of your compensation after the
Term of your agreement, except to the extent that any such reduction is the
result of a reduction in compensation or a benefits program which applies
equally to other members of senior management, or (iii)a material breach of this
agreement by the Company.

In the event you are terminated for cause or you resign without "good
reason", you shall only be entitled to receive the compensation accrued up to
the date of termination or resignation. "Cause" shall mean (i) dishonesty in the
performance of your duties; (ii) an act or acts by you constituting a violation
of the laws of the United States or regulation of any regulatory agency in
connection with the Company's business; (iii) any material violation of the
Company's compliance manual after notice and a reasonable opportunity to cure of
not less than 30 days; (iv) willful misconduct or gross negligence; and (v) the
indictment or conviction, or entry of a pleading of guilty or nolo contendere by
you to any crime involving moral turpitude or any felony.

<PAGE> 3

7. STOCK

We will enter into a separate arrangement for your purchase of 50,000
shares of JHFSCAC common stock, and options for 20,000 additional shares of
such stock on the same terms and conditions as existing stockholders.

8. BENEFITS AND MISCELLANEOUS

You shall be entitled to participate in such health and welfare, ERISA
and other benefit plans (including vacation, holiday, sick leave and similar
matters) and bonus, stock or other incentive plans, to the same extent as any
senior management executive of the Company. You shall be reimbursed for all
out-of-pocket expenses incurred in performing your duties in accordance with
normal policies of the Company.

9. COSTS

JHFSCAC shall pay the legal costs associated with your entering into
this agreement up to a maximum of $7,500. JHFSCAC also agrees to pay any
recruiting fee which may be owed to Highland Search Group.

10. STATE LAW AND ARBITRATION OF DISPUTES

The laws of the State of New York will govern this agreement. Any
controversy or dispute between you and JHFSCAC shall be submitted to
arbitration before the New York Stock Exchange, Inc. Department of Arbitration,
in accordance with applicable provisions of the Constitution and Rules of the
Exchange.

Bill, we look forward to your joining us. Please countersign and return a copy
of this letter to reflect your agreement to the foregoing.

Sincerely,
JHFSC Acquisition Corp.

by: /s/ John H. Goldsmith
-------------------------------
John H. Goldsmith
President and Chief Executive
Officer

ACKNOWLEDGED AND AGREED TO:

/s/ William C. Dennis, Jr.
- - - - - - - - - - - - - - - ---------------------------------
William C. Dennis, Jr.

<PAGE> 1
Exhibit 10.13

AGREEMENT made in New York, New York on the 5th day of September, 1995,
by and between Prudential Securities Incorporated ("PSI"), a Delaware
corporation, having its principal office at One Seaport Plaza, New York, New
York 10292 and John Hancock Clearing Corporation ("JHCC"), a Massachusetts
corporation, having its principal office at One World Financial Center, New
York, New York 10281, Tucker Anthony Incorporated ("TA"), a Massachusetts
corporation, having its principal office at One Beacon Street, Boston,
Massachusetts 02108 and Sutro & Co. Incorporated ("Sutro"), a Nevada
corporation, having its principal office at 201 California Street, San
Francisco, California 94111.

WHEREAS, PSI is registered as a broker/dealer in securities; and

WHEREAS, JHCC, TA and Sutro are also registered as broker/dealers in
securities; and

WHEREAS, Wexford Clearing Services Corporation ("WCSC") is a wholly
owned subsidiary of PSI; and

WHEREAS, JHCC is desirous of having PSI clear transactions and carry
accounts for the customers of JHCC (the term "JHCC" shall

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN
PORTIONS OF THIS EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND
REPLACED WITH [**] AND FILED SEPARATELY WITH THE COMMISSION
<PAGE> 2

include, unless stated otherwise or otherwise clear from the
context in which it is used, JHCC's affiliated companies, TA
and Sutro and any broker/dealer which JHCC may under the terms
of this Agreement provide with clearing services
["Correspondent" or "Correspondents"]) and JHCC's proprietary
accounts on a fully disclosed basis and whereby JHCC will be
an introducing firm as contemplated by Rule 382 of the New
York Stock Exchange, Inc. (the "EXCHANGE"), for which PSI will
receive compensation as set forth below; and

WHEREAS, PSI is also desirous of assigning its rights and obligations
under this Agreement to WCSC upon its becoming a registered
broker/dealer in securities;

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

I. FINANCIAL ARRANGEMENTS: COMMISSIONS, CHARGES AND INTEREST

The financial arrangements between the parties shall be those contained
in Attachment I, which is made part of this Agreement.

<PAGE> 3

II. CONFIRMATIONS, STATEMENTS OF ACCOUNTS AND OTHER CUSTOMER REPORTS

PSI shall furnish to JHCC, commission runs, transaction summaries and
data feeds with respect to introduced accounts and other data which JHCC may
reasonably request. Reports of executions, confirmations, statements and other
notices relating to introduced accounts will be prepared by PSI appropriately
marked to indicate that such accounts were introduced by JHCC, TA, Sutro or any
Correspondent. Unless otherwise mutually agreed to in writing, confirmations
shall be mailed to JHCC's customers by JHCC or, at JHCC's option, by PSI to
JHCC's customers and monthly statements shall be mailed to JHCC's customers by
PSI. Copies of all such customer reports will be provided to JHCC at its
principal office or mailed directly to each of JHCC's branch offices at JHCC's
request.

III. OPENING AND HANDLING OF ACCOUNTS

A. GENERAL

1) JHCC will furnish PSI all information and documentation as required by
PSI for the opening of an account. Only PSI approved forms may be used.
Such forms are to be commercially reasonable and their terms consistent
with industry practice. To the extent permissible by applicable
regulation and desired by JHCC, such forms shall be marked
appropriately as being, as the case may be, documentation of JHCC, TA
or Sutro.

<PAGE> 4

2) After prior consultation with JHCC, PSI, in its sole discretion, may
refuse to accept any account or any order and may terminate any account
previously accepted.

3) JHCC agrees that none of its directors, partners, officers, agents,
employees or authorized persons shall have discretionary power with
respect to any account introduced to PSI, unless JHCC first obtains a
properly executed written power of attorney from the account. JHCC
hereby agrees to indemnify and hold PSI harmless against any loss,
liability, damage, cost or expense (including but not limited to
reasonable attorneys' fees and expenses) suffered or incurred by PSI
directly or indirectly as a result of any liabilities or claims related
to the exercise of discretionary authority over any accounts by JHCC,
its directors, partners, officers, agents, employees or authorized
persons.

4) All transactions in any account are to be considered cash transactions
until such time as JHCC has furnished to PSI margin and lending
agreements on PSI approved forms duly executed by the customer and
approved by a JHCC NASD principal.

5) Any request for an extension of time for payment must be made to PSI.
JHCC is responsible for determining that any such extension request is
valid and in compliance with the requirements of PSI. After prior
consultation with JHCC, PSI shall not be obligated to accept any such
extension request

<PAGE> 5

made by JHCC.

6) JHCC accepts full responsibility for the authenticity of orders placed
by JHCC for the accounts of JHCC's customers and proprietary accounts
and for complying with all rules of the EXCHANGE and the NASD in
placing such orders; without limiting the generality of the foregoing,
JHCC will specifically be responsible for compliance with Rule 405 of
the EXCHANGE and Article III, Subparagraph 2 of the NASD Rules of Fair
Practice in connection with the placing of such orders.

7) Nothing in this Paragraph (A), or the Agreement as a whole, shall be
construed to require, or to impose any duty upon, either of the parties
to do anything that might be in violation of the laws of any
jurisdiction in which the parties do business under this Agreement, or
the rules of any regulatory body (including Exchanges and Clearing
Corporations) to which either or both parties are subject.

8) JHCC agrees to familiarize itself with the basic guidelines of PSI
operations procedures as contained in the PSI Correspondent Operations
Manual ("Manual") which PSI shall provide to JHCC, along with any
modifications or supplements to such manual which may be issued from
time to time. JHCC agrees that it will be familiar with all applicable
guidelines prior to the first scheduled trade date. PSI agrees to make
the Manual, as then modified or supplemented, available to JHCC upon
the execution of this

<PAGE> 6

Agreement. PSI agrees further that the terms, requirements and
applications, then in effect or to take effect in the future, of the
Manual and its modifications and supplements will be commercially
reasonable and consistent with industry practice.

9) PSI will engage in all cashiering functions for introduced accounts,
including the receipt, delivery and transfer of securities purchased,
sold, borrowed and loaned, receiving and distributing payment therefor,
holding in custody and safekeeping all securities and cash so received,
the handling of margin accounts, the receipt and distribution of
dividends and other distributions, and the processing of exchange
offers, rights offerings, warrants, tender offers and redemptions.

10) All correspondence, in the nature of customer inquiries or complaints,
is to be directed to JHCC. Any such correspondence is to be reviewed
and replied to by PSI or JHCC depending on who is responsible for the
function which is the subject matter of the correspondence. If such
correspondence is not directed to the appropriate party initially, PSI
or JHCC shall promptly forward such correspondence to the appropriate
party. Each party shall promptly furnish the other party with copies of
all responses to any and all JHCC customer correspondence.

11) PSI and JHCC respectively agree to maintain in accordance with
applicable retention policies such books and records as may be required
to discharge

<PAGE> 7

their respective functions under this Agreement.

12) PSI and JHCC agree to cooperate with each other with respect to the
performance of the various functions performed by PSI or JHCC. Such
cooperation shall include the provision to the other party of
appropriate data pertinent to the functions to be performed by PSI or
JHCC.

13) PSI shall inform existing and future accounts in writing of the general
nature of the functions performed by JHCC and PSI pursuant to the
Agreement and Rule 382 of the Exchange, using PSI's standard letter, as
amended by PSI from time to time.

14) For the sole and exclusive purpose of the Securities Investor
Protection Act and the financial responsibility rules of the Securities
and Exchange Commission, JHCC's customers shall be deemed to be
customers of PSI, as JHCC's Clearing Broker. Nothing herein shall cause
JHCC's customers to be construed or interpreted as customers of PSI for
any other purpose, or to negate the intent of any other section of this
Agreement, including, but not limited to, the delineation of
responsibilities as set forth elsewhere in this Agreement.

B. CASH TRANSACTIONS

If securities purchased for cash are sold because of non-payment by
JHCC or JHCC's customers or if securities sold in a cash account must be covered
by

<PAGE> 8

PSI because of non-delivery or delivery of non-transferable securities by JHCC
or JHCC's customers, then JHCC will promptly pay PSI any losses PSI may sustain
as a result thereof.

C. MARGIN TRANSACTIONS

It is understood that JHCC is responsible to PSI for collection of the
margin required by PSI to support each transaction in margin accounts. After the
initial margin on a transaction has been received, maintenance margin calls are
to be made by PSI. JHCC agrees to be responsible for promptly obtaining margin
on maintenance calls. After prior consultation with JHCC, PSI shall have the
right to modify the margin requirements of any account or accounts from time to
time. After prior consultation with JHCC, PSI shall determine the manner in
which accounts are to be maintained for margin purposes. On all transactions,
JHCC shall be solely and exclusively responsible to PSI for any loss, liability,
damage, cost or expense (including but not limited to reasonable attorneys' fees
and expenses) incurred or sustained by JHCC or PSI as a result of the failure of
any account to make timely payment for the securities purchased by it or timely
and good delivery of securities sold for it, or timely compliance by it with
margin or margin maintenance calls, whether or not any margin extensions have
been granted by PSI pursuant to the request of JHCC.

<PAGE> 9

D. UNSECURED DEBIT BALANCES

1) Upon demand by PSI made upon JHCC, JHCC will pay PSI the amount of any
unsecured debit balance, deficit or other financial obligation in any
account other than such unsecured debit balances arising through the
errors and omissions of PSI.

2) Upon JHCC's failure to pay PSI the amount as required in this Paragraph
(D), Subparagraph 1, PSI after written notice to JHCC shall have the
right to liquidate a sufficient portion of any position in JHCC's
proprietary accounts and shall have the right to apply any proceeds of
such liquidation towards any payment required to be made from JHCC to
PSI pursuant to this Paragraph (D), Subparagraph 1; JHCC agrees and
represents that it shall not make any withdrawals which would reduce
the balance in its proprietary accounts below the amount demanded,
without PSI's written consent, during the demand period.
Notwithstanding Article XII, Paragraph (B) to the contrary, notice
under this Article III, Paragraph (D), Subparagraph 2, shall be given
by personal delivery or facsimile.

IV. SUPERVISION OF BUSINESS

JHCC has sole responsibility, including sole supervisory responsibility, with
respect to all accounts handled by the personnel of its organization. This sole
responsibility includes, but is not limited to, the following:

A. Assuring that no transactions are made in violation of any laws or

<PAGE> 10

regulations.

B. Selecting, investigating, training, registering and supervising all
personnel, registered or otherwise, who service the accounts.

C. Establishing procedures to review transactions and trading in the
accounts.

D. Assuring the suitability of all transactions, including recommendations
made to the accounts.

E. Assuring the appropriateness of the frequency of trading in the
accounts.

F. Handling of any account for an employee or officer of any Exchange
member organization, self-regulatory organization, bank, trust company,
insurance company or other organizations engaged in the securities
business and for the compliance with applicable rules and regulations.

G. Furnishing investment advice to the accounts.

V. INDEMNITY, INSURANCE REPRESENTATIONS AND WARRANTIES

A. INDEMNIFICATION

1) Each of the parties agrees to indemnify and hold the other harmless
from and against any loss, damage, liability and expense including but
not limited to reasonable attorney's fees and expenses which either
party may incur or sustain in connection with any customer complaint,
claim, cause of action, lawsuit or arbitration (collectively
"Proceedings") to the extent the Proceedings arise from or are
connected with the negligence or malfeasance of the other party in the
exercise of its rights, duties and obligations under

<PAGE> 11

this Agreement.

2) Any party seeking indemnification ("Indemnified Party") hereunder shall
(a) give written notice to the other party from whom indemnification is
sought ("Indemnifying Party") of any claim, suit, action or proceedings
for which it seeks indemnification; and (b) permit the Indemnifying
Party to retain counsel reasonably acceptable to the Indemnified Party
to represent the Indemnifying and the Indemnified Party. The
Indemnifying Party shall be responsible to pay reasonable attorney's
fees for separate counsel for the Indemnified Party if such party can
show that counsel retained by the Indemnifying Party would have a
conflict of interest in representing both the Indemnifying Party and
the Indemnified Party. However, in the event the Indemnified Party is
unable to show that a conflict of interest exists, the Indemnified
Party shall still have the right to hire separate counsel at its own
expense.

3) JHCC further agrees to indemnify PSI and hold it harmless from and
against any loss, damage, liability and expense including but not
limited to reasonable attorney's fees and expenses which PSI may
sustain or incur arising from or connected with any securities, cash,
checks, drafts, etc., received by PSI from JHCC or from any customer of
JHCC in a transaction subject to this Agreement which shall be, or
shall be claimed to be, counterfeit, forged, altered, spurious or
invalid, or arising from or connected with any dishonest, fraudulent or
criminal act of any person or persons

<PAGE> 12

connected with or associated with JHCC, including losses resulting from
trading, whether in the name of a genuine customer, or in JHCC's name,
or in a fictitious account, or arising from or connected with any act
or omission on the part of any person or persons connected with or
associated with JHCC, or a customer's failure to pay for a transaction
due to a delay in delivery or transfer of the securities to the
customer or his agent, unless due to the negligence or willful
misconduct of PSI or its agents. Notwithstanding anything herein to the
contrary, JHCC shall not indemnify and hold harmless PSI with respect
to matters set out in this Article V, Paragraph (A), Subparagraph 3, in
the event such matters relate to or arise from the negligence of PSI
with respect to any statutory or regulatory duty it may have in its
capacity as a clearing broker.

B. INSURANCE

1) JHCC agrees to keep in full force and effect a stockbroker's blanket
bond (Form 14), with coverage for all insuring clauses and other
insurance required by the rules of the EXCHANGE as of the date of this
Agreement in an amount acceptable to PSI, which amount shall be
commercially reasonable and not in excess of customary industry
practice, or in an amount representing the current minimum required
limits of the EXCHANGE, whichever is the greater. JHCC agrees to
furnish PSI within reasonable time after the completion of JHCC's
annual audit, a statement

<PAGE> 13

from its auditors to the effect that the bonds are in full force and
effect.

2) JHCC agrees to give PSI at least thirty (30) days prior written notice
of any change or cancellation of the insurance referred to above.

C. REPRESENTATIONS AND WARRANTIES

Each party warrants and represents that except as disclosed in writing
to the other party, there are no impediments, prior or existing regulatory,
self-regulatory, administrative, civil or criminal matters affecting it and
that each party is, and agrees to remain throughout its contractual
relationship with each other, qualified to do business and properly licensed
and registered as a broker/dealer in all states in which JHCC has and will be
doing business and is, and will remain throughout its contractual relationship
with each other, a member in good standing with the NASD. Each party further
warrants and represents that there are no financial circumstances which will
interfere with, or prevent it from fulfilling all of its duties and
obligations throughout the course of its contractual relationship with the
other party.

VI. DURATION AND TERMINATION OF AGREEMENT

A. This Agreement shall take effect on execution hereof. The financial
terms and services provided under this Agreement shall be for a term of
five (5) years ("initial term") commencing from the date of the
completion of conversion of JHCC to PSI in respect of JHCC's
proprietary and customer

<PAGE> 14

accounts (the "Conversion Date"), with the right of either party
upon written notice, after three (3) years and each year
thereafter, to renegotiate the financial terms and services in
accordance with the Terms of Renegotiation contained in Attachment I,
Article VI of this Agreement. The parties agree that, unless agreed to
the contrary, conversion shall commence with respect to JHCC on or
about February 16, 1996 and shall continue on each successive week
thereafter until the Conversion Date which PSI shall use its best
efforts to be on or about February 29, 1996.

B. Unless written notice of termination shall have been received from the
other party ninety (90) days prior to the expiration of the initial
term, or any additional term, the term of this Agreement shall
automatically be extended for a further twelve (12) months.

C. JHCC may terminate this Agreement at any time it is in effect,
including any extension hereof, by giving PSI eighteen (18) months
written notice of JHCC's desire to terminate this Agreement provided
that such notice of termination may not be effective before the one
year anniversary of the Conversion Date.

D. The termination or assignment of this agreement, howsoever caused,
shall not release either party from any liability or responsibility to
the other as of the date of termination or assignment, whether or not
then ascertained, provided that such liability shall relate to
transactions prior to the effective date of such termination or
assignment.

<PAGE> 15

E. Notwithstanding any provision in this Agreement, the following events
or occurrences shall constitute an Event of Default under this
Agreement:

1) either PSI or JHCC shall fail to perform or observe any term,
covenant or condition to be performed or observed by it
hereunder; or

2) any representation or warranty made by either PSI or JHCC
herein shall prove to be incorrect at any time in any material
respect; or

3) a receiver, liquidator or trustee of either PSI or JHCC or of
any property held by either party, is appointed by court order
and such order remains in effect for more than thirty (30)
days; or an order for relief is entered against either PSI or
JHCC in bankruptcy or similar proceedings; or any of its
property is requested by court order and such order remains in
effect for more than thirty (30) days; or a petition is filed
against either PSI or JHCC under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether
now or hereafter in effect, and is not dismissed within thirty
(30) days after such filing; or

4) either PSI or JHCC files a petition in voluntary bankruptcy or
seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether
now or hereafter in effect, or consents to the filing of any
petition against it under such law; or

<PAGE> 16

5) either PSI or JHCC makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its debts
generally as they become due, or consents to the appointment
of a receiver, trustee or liquidation of either PSI or JHCC,
or of any property held by either party, or a judgment in
excess of fifty (50) percent of the aggregate net capital of
JHCC, TA and Sutro is entered against JHCC and is not appealed
from or satisfied within thirty (30) days; or

6) either PSI or JHCC, but not including any Correspondent, is
convicted of a felony.

F. Upon any Event of Default by either party (the "defaulting party"), the
defaulting party agrees to give immediate notice thereof to the other
party (the "non-defaulting party"). Upon the occurrence of any such
Event of Default, the non-defaulting party may, at its option, by
notice to the defaulting party declare that this Agreement shall be
thereby terminated and such termination shall be effective as of the
date such notice has been sent or communicated to the defaulting party.
If JHCC is the defaulting party, PSI agrees to provide JHCC with a
reasonable period of time to secure clearing services with another
party.

VII. ASSIGNMENT

This Agreement shall be binding and inure to the benefit of JHCC and PSI, and
their respective successors and assigns, except that JHCC may not assign or

<PAGE> 17

transfer any right hereunder without the prior written consent of PSI which
consent shall not be unreasonably withheld. Without JHCC's prior consent, which
consent shall not be unreasonably withheld, PSI may not assign this Agreement to
any legal person which is not a direct or indirect wholly owned subsidiary of
The Prudential Insurance Company of America. In the event of any assignment by
PSI hereunder to any direct or indirect subsidiary of The Prudential Insurance
Company of America, PSI agrees that at all times such assignment is in effect
PSI shall unconditionally guarantee the performance, obligations and duties of
the assignee and agrees further that in the event of any non-performance or
default by the assignee such guarantee shall be construed in such a manner that
PSI assumes liability as the primary obligor under this Agreement. In the event
of any other assignment, PSI shall guarantee the assignee on the same terms as
set forth in the immediately preceding sentence for a period which is the longer
of five (5) years from the Conversion Date or eighteen (18) months from the
date the assignment is in effect.

VIII. ARBITRATION

Any dispute or controversy between the parties relating to or arising out of
this Agreement shall be settled by using the arbitration facilities of the
EXCHANGE or the NASD in New York, New York. The party making claim against the
other will have the right to choose which arbitration facility will be utilized.

<PAGE> 18

IX. FINANCIAL INFORMATION, REPORTS AND CAPITAL WITHDRAWALS

A. Each party agrees to furnish to the other a copy of the quarterly
balance sheet and capital computation portion of the FOCUS Reports
prepared in accordance with Rule 17a-5 of the Securities Exchange Act
of 1934.

B. JHCC agrees to give PSI written notice prior to any capital withdrawals
exceeding thirty (30) percent of the aggregate net capital of JHCC, TA
and Sutro under Rule 15c3-1 of the Securities Exchange Act of 1934 as
reported in JHCC's most recent FOCUS Report furnished to PSI.

X. CAPITAL AND NET CAPITAL

A. JHCC, TA and Sutro agree to maintain in the aggregate net capital of
$25,000,000 or as required under the Rules of the EXCHANGE, Securities
and Exchange Commission and the State of New York, whichever of the
above is higher, and to maintain at all times a ratio of aggregate
indebtedness, as that term is defined in SEC Rule 15c3-1, to net
capital not in excess of 10 to 1.

B. JHCC agrees to notify PSI promptly, but in any event within three (3)
business days, if its net capital ratio exceeds 9 to 1.

XI. CONFIDENTIALITY

PSI and each of its affiliated companies shall hold in confidence and shall
use their best efforts to have all officers, directors and employees to hold in
confidence any

<PAGE> 19

and all knowledge of a proprietary, secret or confidential nature with respect
to the business of JHCC and its affiliated companies and shall not disclose,
publish or make use of such knowledge without the written consent of JHCC. For
the purpose of this Article XI the term "knowledge of a proprietary, secret or
confidential nature" shall include, but not be limited to, customer lists and
profile information, products and non-public JHCC marketing, business or trading
programs and strategy.

XII. GENERAL

A. As part of this Clearing Agreement, PSI will provide the following
additional services as outlined in Attachment II. Notwithstanding
anything in the Clearing Agreement to the contrary, the services
outlined in Attachment III will not be provided without the prior
written consent of PSI.

B. Notice, as provided herein, shall be by certified mail, return receipt
requested, and shall be sent to JHCC (Attention: John Goldsmith) at the
address in this Agreement. Further, notice to PSI shall be sent to the
attention of: Officer in Charge, Correspondent Division, at One New
York Plaza, 11th floor, New York, NY 10292. Either party may change its
address for notice purposes by giving written notice pursuant to
registered mail of the new address to the other party.

C. This Agreement contains the entire Agreement between the parties and
cannot be amended or modified except in writing executed by both
parties.

D. Neither this Agreement nor the operations hereunder shall be deemed to

<PAGE> 20

create a joint venture, partnership or agency relationship.

E. Each party agrees not to use the name of the other party in advertising
or any promotional matters without the explicit written consent of the
party whose name is being used.

F. JHCC agrees not to maintain a fully disclosed clearing relationship
with any broker/dealer other than PSI during the life of this
Agreement.

G. PSI agrees and covenants that in the event PSI is acquired or there is
a change of control of PSI then (i) in the case where PSI is still
directly or indirectly controlled by The Prudential Insurance Company
of America, the terms of acquisition shall provide that without
interruption clearing services will continue to be provided to JHCC
consistent with the terms of this Agreement for a minimum period of
time which is the longer of the remaining term of this Agreement and
any extension thereof or eighteen (18) months from the date of
notification of acquisition or change of control or (ii) in any other
case, the terms of acquisition shall provide that without interruption
clearing services will continue to be provided to JHCC consistent with
the terms of this Agreement for a minimum period which is the longer of
either eighteen (18) months from the date of notification of
acquisition or change of control or eighteen (18) months from the
first anniversary of the Conversion Date. JHCC shall have the option to
terminate this Agreement without any further obligations to PSI or any
assignee within ninety (90) days of the announcement of acquisition or

<PAGE> 21

change of control provided six (6) months notice is given to PSI. Any
continuation of clearing services shall be of a quality consistent to
that contemplated by the terms of this Agreement and in the event that
no agreement is in place with respect to the financial terms of a
period of continuation, then such financial terms shall be commercially
reasonable. The determination of commercially reasonable financial
terms shall be based upon rates and amounts of prior year-to-year
adjustments.

H. The parties hereto acknowledge that PSI may use certain computer
programs written solely by PSI (the "Software") in carrying out its
duties under this Agreement. PSI hereby agrees that if during the term
of this Agreement PSI ceases to do business for any reason, or there is
a change of control of PSI, that PSI will provide JHCC at no cost a
copy of the source code and object code of the Software promptly after
such ceasing of PSI's business.

I. JHCC agrees not to enter into a fully disclosed clearing relationship
with any other introducing firm which is registered as a broker dealer
in securities other than the existing clearing relationships listed in
Schedule B annexed to this Agreement.

J. JHCC must have a Dealer's Agreement with each Mutual Fund where
required, prior to entering the initial order via PSI.

K. The indemnification provisions contained in this Agreement shall remain
operative and in full force and effect, regardless of the termination
of this

<PAGE> 22

Agreement, and shall survive any such termination.

L. This agreement shall be deemed a contract under the laws of the State
of New York and for all purposes, shall be construed and enforced in
accordance with the laws of such state.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.

JOHN HANCOCK PRUDENTIAL SECURITIES
CLEARING CORPORATION INCORPORATED

BY BY
Signature: Nicholas E. Bonadies Signature: Edward Schlitzer
-------------------------- --------------------------
Nicholas E. Bonadies Edward Schlitzer

TITLE: President TITLE: Managing Director
------------------------------ ------------------------------

DATE: September 8, 1995 DATE: September 8, 1995
------------------------------- -------------------------------

TUCKER ANTHONY INCORPORATED SUTRO & CO. INCORPORATED

BY BY
Signature: Robert H. Yevich Signature: G.V. McGough
-------------------------- --------------------------
Robert H. Yevich G.V. McGough

TITLE: Executive Vice President TITLE: Chairman and CEO
------------------------------ ------------------------------

DATE: September 8, 1995 DATE: September 8, 1995
------------------------------- -------------------------------

<PAGE> 23

ATTACHMENT I - FINANCIAL ARRANGEMENTS

Prudential Securities Incorporated ("PSI") and John Hancock Clearing Corporation
("JHCC"), Tucker Anthony Incorporated ("TA") and Sutro & Co., Incorporated
("Sutro") agree to the following Financial Arrangements pursuant to the Clearing
Agreement dated ______________:

I. SECURITIES TRANSACTIONS

PSI will charge JHCC ** per trade with a minimum of $** per year for
the clearance and settlement of firm and customer transactions and the
maintenance of JHCC's firm and client accounts.

PSI will pay JHCC **% of their agency commissions, net of charges, on
settlement date, and the balance two days after settlement date. All
fees will be paid at month end. All wrap fees and other fees in lieu of
commission will be billed quarterly in advance and paid to JHCC on the
business day following the date on which such fees are charged to the
customers' accounts.

NOTE: A trade is defined as a transaction executed for the
same account, in the same security, on the same exchange, on
the same side, at the same price, on the same day.

II. INTEREST

A. John Hancock Freedom Securities Corporation ("JHFS") will
finance JHCC's customer and firm Net Debit Balance. The Net
Debit Balance is the net of JHCC's (customer and firm) cash
and margin debits, free credits, customer and firm short
account credit balances covered by excess inventory and Money
Market Fund suspense accounts.

PSI will charge JHCC ** basis points on the Net Debit Balance.

The amount to be financed by JHFS will be equal to the
estimated Net Debit Balance determined jointly by JHCC and PSI
by 11:00 a.m., New York time. If the Net Debit Balance exceeds
the amount sourced by JHCC, the difference will be charged to
JHCC at **. If the amount exceeds the Net Debit Balance,
PSI will credit JHCC at the **.

The interest charged on the Net Debit Balance will be debited
to the JHCC firm account monthly.

[**] Indicates that information has been omitted and filed
separately with the Commission pursuant to a request for
confidential treatment.
<PAGE> 24

PSI will credit JHCC's firm account with any net interest
charged JHCC's customers on margin and cash debits monthly,
following the close of the customer interest cycle (Friday
following the third Thursday).

B. PSI will retain ** basis points of the stock borrow rebates
attributable to JHCC's firm and customer stock borrows. The
balance will be credited to JHCC monthly.

C. Stock Loan Credit - PSI will credit JHCC ** basis points on
**% of JHCC's average monthly margin debit balances,
calculated and credited monthly.

III. GENERAL

A. PSI will provide JHCC with S&P Market Scope at $** per
terminal. JHCC agrees to pay any increase in the service
charge imposed by S&P for service usage.

B. PSI will allow JHCC to use the Prudential Securities Municipal
Bond Trading and Syndicate systems in their present form at a
charge of $**.

C. PSI will charge JHCC $**.

D. If JHCC requests data feeds or reports which require custom
development, JHCC and PSI will determine what, if any, is a
reasonable fee for such data feeds or reports. In any event
PSI's fee to JHCC shall be at a commercially reasonable rate.

IV. JHCC WILL PAY THE FOLLOWING FEES AND OUT OF POCKET EXPENSES:

A. **

B. **

C. **

D. **

E. **

[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.

<PAGE> 25

F. **

G. **

H. **

I. **

J. **

K. **

L. **

M. **

N. **

O. **

V. ALLOCATION OF CUSTOMER SERVICE FEES

A. Physical delivery of U.S. Treasury Notes and Bonds - $** per
delivery retained by PSI.

B. Optional Exchange Fee - $** per security: $** retained by PSI
and balance of $** to JHCC.

C. ACAT Transfer Fee excluding IRA Accounts - $** per account:
$** retained by PSI and balance of $** to JHCC.

D. Quarterly Abandoned Account Safekeeping Fee- $** per account,
retained by PSI. (Fee will be reversed if owner of the account
is located.)

[**] Indicates that Information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
<PAGE> 26

E. Postage and Handling Fee- $** to JHCC (or any amount
determined by JHCC).

F. Annual ASR Fee - Fee charged per household with less than two
(2) trades per year excluding Money Market trades. **

G. Purchase of U.S. Treasury Issues at auction - ** per
customer, per security retained by PSI if purchased through
PSI.

H. Estate handling fee optional and negotiated per account -
**

I. Returned check fee- *** per check, retained by PSI.

J. Transfer Agency Certificate Fee- **

VI. TERMS OF RENEGOTIATION

As set forth in Article VI, Paragraph (A), of the Agreement, it is
understood by and between the parties that any renegotiation as
provided for in the above referenced paragraph will be as follows:

A. Year 4 - The per trade charge described in Article I above
will be increased by an amount equal to the Consumer Price
Index increase (%) of calendar year 1998. The parties agree to
establish the per trade charge for year 6 or the basis for
calculating such charge on the fourth anniversary of the
conversion date of the Agreement. The parties further agree to
negotiate the increase in the per trade charge in good faith
in order to agree upon a commercially reasonable increase. In
determining a commercially reasonable increase the parties
shall use rates and amounts of prior year-to-year adjustments
as a basis of consideration.

B. Year 5 - The per trade charge of year 4 will be increased by
an amount equal to the Consumer Price Index increase (%) of
calendar year 1999.

The foregoing does not limit the renegotiation of any other financial
terms and services as provided for in this Agreement or as the parties
mutually agree to include herein.

[**] Indicates that information has been omitted and filed
separately with the commission pursuant to a request for
confidential treatment.

4
<PAGE> 27

ATTACHMENT II

Prudential Securities Incorporated ("PSI") and John Hancock Clearing Corporation
("JHCC"), Tucker Anthony Incorporated ("TA") and Sutro & Co., Incorporated
("Sutro") agree that the following additional services will be provided to JHCC
pursuant to the Clearing Agreement dated ______________:

A. BOSS 2000 functions outlined in Schedule A.

B. ACE System (Real time balances and positions).

C. Correspondent Trading System (Generic Trading System).

D. Automated Checkwriting System.

E. Development and implementation of a separate order routing
matrix for JHCC, TA and Sutro.

F. Client Profile System. (New Account System with customer new
account documents and controls).

G. Production of customer confirmations and statements with
JHCC's logos prominently displayed and Wexford Clearing
Services Corporation small print as the clearing broker.

H. Level 3 Networking and Fund Serv on all participating Mutual
Funds.

I. A Central Asset Account with an annual charge to the client.
(Utilizing a JHCC Money Market Fund with checking and debit
card through Prudential Bank and Trust).

J. Smart System for Branch originated Fed Fund wires (fee to JHCC
$5 per wire).

K. Production of Instant Replay statements for year-end tax
planning and reporting.

L. Downloading of JHCC customer and proprietary account
information in PSI format.

M. Customer Statements for select accounts with all the Command
Statement features to be charged at a reasonable fee to be
determined at a later date.

<PAGE> 28

N. Furnishing services and functionality to clear all products of
John Hancock Mutual Life Insurance Company and its affiliates
offered by JHCC, Sutro and TA, provided that PSI provides
written consent to clear said products which consent shall not
be unreasonably withheld and further provided that none of the
products will violate the provisions of Article III, Paragraph
(A), Subparagraph 7. JHCC and PSI will determine what, if any,
is a reasonable fee for the modifications and/or enhancements
to PSI's existing systems for providing such services and
functionality. In any event PSI's fee to JHCC shall be at a
commercially reasonable rate.

2
<PAGE> 29

SCHEDULE A

<TABLE>
<S> <C>
MARKETING BOSS

Broker Book Closed Lot Summary List Broker Book Summary
Branch Operations Index Contact Management System
Bond Yield Calculator Portfolio Evaluator
Commissions Calculator Year-end Closed Position Report
Dividend Information by Symbol/Cusip Fixed Income Portfolio Analysis
Dividend Operations Information Asset Allocation Reports
Household Information by Account Number
Margin Account Debit Ranking by Balance
Mutual Fund Operations Information REPORTS
General Margin Information
Option Yield Ranking (Calls) FA's Accounts Sorted by Balances
Option Yield Ranking (Puts) FA's Accounts Sorted by Security Positions
Automated Corporate Action System Good Till Canceled Orders
Security Look-up by Alpha Search Commissions by Product
Security Look-up by Symbol Total Commissions
Dividend Reinvestment System Total Commissions for one Product
Combined Statement Mailing Set-up System Commissions by Product for one FA
Telephone Directory Mutual Fund Commissions
WS/W9 Missing Documents Today's Trades by Product
Today's Trades by Account
Expiring Bonds
CLIENT Expiring Options
Expiring Options by Account
Client Balances Data Large Positions for Stocks
Client Positions Large Positions for Bonds
Client Transaction History Large Positions for Options
Client Name and Address All Items for Attention
List of Clients or Prospects Extensions Due Today
Operations Balance Data New Margin Calls
List of Active Accounts Cash Over the Wire
Client Memo List Securities Over the Wire
Delivery vs. Payment Information Journals Over the Wire
Interested Party Information
Related Accounts
Monthly Statements
Instant Replay (Year-end Consolidated
Statement)
</TABLE>

<PAGE> 30

ATTACHMENT III

Prudential Securities Incorporated ("PSI") and John Hancock Clearing Corporation
("JHCC"), Tucker Anthony Incorporated ("TA") and Sutro & Co., Incorporated
("Sutro") agree that the following services will not be provided to JHCC
pursuant to the Clearing Agreement dated ______________:

A. Connection to the Internet

B. E-Mail

C. Administration of IRA accounts for which PSI is not custodian

D. Risk Management System

E. Research

F. General Ledger and Accounting Systems

G. Accounts Payable System

H. Programming for customized commission schedules

I. FA compensation package

J. FA registration package

K. Trading System:

Government Trading Bond Fund Trading
Corporate Hi-Yield Money Desk
Corporate Syndicate Mortgage-Backed Trading
Corporate Trading Block Trading
Bond Fund Syndicates

<PAGE> 31

SCHEDULE B
**

[**] Indicates that information has been omitted and filed
separately with the Commission pursuant to a request for
confidential treatment.
<PAGE> 32

ADDENDUM

Addendum to Attachment I - Financial Arrangements of the Clearing Agreement,
dated September 8, 1995, between Prudential Securities Incorporated ("PSI"),
Tucker Anthony Incorporated ("TA") and Sutro & Co., Incorporated ("Sutro"),
effective December 18, 1995.

Paragraph II INTEREST, subparagraph A., second paragraph is changed to read as
follows:

PSI will charge JHCC **
For purposes of this calculation, Net Debit Balance is defined
as follows:

Customer account cash and margin debits net of
customer account free credits and customer short
account balances covered by PSI excess inventory.

Paragraph III GENERAL, add the following subparagraphs E, F and G:

E. PSI will provide the PSI Command Account Statement features
for ** at a charge of **

F. PSI will provide the support services described on the
attached schedule for JHCC Retirement accounts at the
following rates.

- All retirement accounts with the exception of spousal
accounts. **

- Spousal accounts **

[**] Indicates that information has been omitted and filed
separately with the commission pursuant to a request for
confidential treatment.
<PAGE> 33
'

- Development charges on 70 1/2 mandatory distribution
system of**.

G. PSI will update tax buckets daily, via an automated data feed
from JHCC for JHCC 401K Employee Accounts. JHCC agrees to pay
programming expenses to PSI.** PSI reserves the right to
charge JHCC ****** expenses associated with **.

JOHN HANCOCK PRUDENTIAL SECURITIES
CLEARING CORPORATION INCORPORATED

BY BY
Signature: Nicholas E. Bonadies Signature: Edward. Schlitzer
-------------------------- --------------------------
Nicholas E. Bonadies Edward. Schlitzer

TITLE: President TITLE: Managing Director
------------------------------ ------------------------------

DATE: January 5, 1996 DATE: January 19, 1996
------------------------------- -------------------------------

TUCKER ANTHONY INCORPORATED SUTRO & CO. INCORPORATED

BY BY
Signature: Robert H. Yevich Signature: Jack Luikart
-------------------------- --------------------------
Robert H. Yevich Jack Luikart

TITLE: President TITLE: President
------------------------------ ------------------------------

DATE: January 5, 1996 DATE: January 5, 1996
------------------------------- -------------------------------

[**] Indicates that Information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.

<PAGE> 34

SCHEDULE OF RETIREMENT ACCOUNT SERVICES

PSI WILL DO THE FOLLOWING FOR JHCC'S RETIREMENT ACCOUNTS

- - - - - - - - - - - - - - - - File all 1099R's for IRA's, SEP's and SARSEP's with the IRS and the
clients.
- - - - - - - - - - - - - - - - File all 5498's for IRA's, SEP's and SARSEP's with the IRS and the
clients.
- - - - - - - - - - - - - - - - File 2439 for IRA's, SEP's and SARSEP's with the IRS.
- - - - - - - - - - - - - - - - Do all tax correction from 1996 forward.
- - - - - - - - - - - - - - - - Provide Service Desk availability Monday through Friday from 8:30 a.m.
to 6:00 p.m. NYT for their branch personnel only. Will not accept calls
from their clients.
- - - - - - - - - - - - - - - - Do all Federal and State tax withholding (where applicable) for IRA's,
SEP's and SARSEP's.
- - - - - - - - - - - - - - - - Do all Federal and state tax filings (where applicable) for IRA's,
SEP's and SARSEP's.
- - - - - - - - - - - - - - - - Provide distribution processing and check disbursement for all
retirement accounts.
- - - - - - - - - - - - - - - - Provide fee bill notices twice a year.
- - - - - - - - - - - - - - - - Provide fee receipt processing.
- - - - - - - - - - - - - - - - Provide quarterly statements for accounts that have no activity and
monthly statements for accounts that have activity.
- - - - - - - - - - - - - - - - Provide a 70 1/2 mandatory distribution system for their Boston
operations.
- - - - - - - - - - - - - - - - Provide full access to the RPIN system.

<PAGE> 1
Exhibit 10.14

TAMP INCENTIVE PLAN

LIMITED PARTNERSHIP

LIMITED PARTNERSHIP AGREEMENT
<PAGE> 2
TABLE OF CONTENTS

Page Number
-----------

ARTICLE I General Provisions ................................ 1

Section 1.01 Definitions........................................ 1
(a) Agreement.............................................. 1
(b) Capital Account........................................ 1
(c) Capital Contribution................................... 1
(d) Certificate of Limited Partnership..................... 1
(e) Code................................................... 1
(f) General Partner........................................ 2
(g) Limited Partner........................................ 2
(h) Partner................................................ 2
(i) Partnership............................................ 2
(j) Securities............................................. 2
(k) TAH.................................................... 2
(l) ULPA................................................... 2
(m) Voting Control......................................... 2

Section 1.02 Partnership Name................................... 2
Section 1.03 Fiscal Year........................................ 2
Section 1.04 Nature and Liability of Partners................... 2
Section 1.05 Purposes of Partnership............................ 3
Section 1.06 Powers of Partnership.............................. 3
Section 1.07 General Partner as Limited Partner................. 4

ARTICLE II Management of Partnership.......................... 4

Section 2.01 General............................................ 4
Section 2.02 Services of General Partner........................ 4
Section 2.03 Compensation of General Partner.................... 5
Section 2.04 Restrictions....................................... 5
Section 2.05 Reliance by Third Parties.......................... 6
Section 2.06 Partner's Transactions............................. 6
Section 2.07 Exculpation of Liability........................... 6
Section 2.08 Indemnification.................................... 7

ARTICLE III Capital Accounts; Allocations; Distributions....... 7

Section 3.01 Capital Contributions.............................. 7
Section 3.02 Capital Accounts................................... 9
Section 3.03 Deficit Capital Accounts........................... 10
Section 3.04 Allocations........................................ 10
Section 3.05 Distributions to Partners.......................... 11
Section 3.06 No Interest on Capital............................. 12

(i)
<PAGE> 3
Page Number
-----------

ARTICLE IV Withdrawal of Limited Partner...................... 12

Section 4.01 Withdrawal of Limited Partner...................... 12
Section 4.02 Legal Representatives.............................. 12
Section 4.03 Mandatory Withdrawal............................... 13
Section 4.04 Liquidating Share.................................. 13
Section 4.05 Cessation of Participation......................... 14

ARTICLE V Transfer of Partnership Interests.................. 14

Section 5.01 Assignability of Interests......................... 14
Section 5.02 Substituted Limited Partners....................... 15
Section 5.03 Obligations of Assignee............................ 15

ARTICLE VI Duration and Termination of Partnership............ 15

Section 6.01 Duration........................................... 15
Section 6.02 Withdrawal of Limited Partner...................... 15
Section 6.03 Withdrawal of General Partner...................... 16
Section 6.04 Liquidation........................................ 17
Section 6.05 Distribution Upon Termination...................... 17

ARTICLE VII Reports to Partners................................ 18

Section 7.01 Financial Records.................................. 18
Section 7.02 Annual Reports..................................... 18
Section 7.03 Inspection......................................... 18
Section 7.04 Tax Returns........................................ 18

ARTICLE VIII Valuation.......................................... 19

Section 8.01 Valuation of Partnership Net Worth................. 19
Section 8.02 Valuation Date..................................... 19
Section 8.03 Valuing Securities and Other Assets................ 19

ARTICLE IX Miscellaneous...................................... 20

Section 9.01 Admission of Limited Partners...................... 20
Section 9.02 Disputed Matters................................... 21
Section 9.03 Payments in Kind................................... 21

(ii)
<PAGE> 4
Page Number
-----------

Section 9.04 General............................................ 21
Section 9.05 Notices............................................ 22
Section 9.06 Execution of Certificate of Limited Partnership
and Other Documents.............................. 22
Section 9.07 Force Majeure...................................... 22
Section 9.08 Amendments......................................... 22
Section 9.09 Headings........................................... 23
Section 9.10 Power of Attorney.................................. 23

EXHIBIT A ................................................... 25

(iii)
<PAGE> 5
TAMP
INCENTIVE PLAN LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT

BY THIS LIMITED PARTNERSHIP AGREEMENT made and entered into as of July
1, 1989, Tucker Anthony Holding Corporation, a corporation organized under the
laws of the Commonwealth of Massachusetts, as general partner, and those persons
and entities executing this Agreement or counterparts thereof and listed on
Exhibit A (as it may be amended from time to time) as limited partners, hereby
form a limited partnership pursuant to the laws of the Commonwealth of
Massachusetts.

ARTICLE I

General Provisions

SECTION 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a) Agreement. "Agreement" means this Limited Partnership Agreement as
it may from time to time be amended.

(b) Capital Account. "Capital Account" means those separate capital
accounts which are maintained for each Partner as defined in Section 3.02.

(c) Capital Contribution. "Capital Contribution" means the total amount
of money paid to the Partnership by each Partner as set forth on the signature
page hereof or counterpart thereof and reflected on Exhibit A hereto.

(d) Certificate of Limited Partnership. The "Certificate of Limited
Partnership" means the certificate of limited partnership for the Partnership
and all amendments thereto required under the laws of the Commonwealth of
Massachusetts to be signed and sworn to by the Partners of the Partnership and
filed for recording in the appropriate public offices within the Commonwealth of
Massachusetts to perfect or maintain the Partnership as a limited partnership
under the laws of the Commonwealth of Massachusetts and/or to effect the
admission, withdrawal or substitution of any Partner of the Partnership.

(e) Code. "Code" means the Internal Revenue Code of 1986, as amended.
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(f) General Partner. "General Partner" means Tucker Anthony Holding
Corporation, a Massachusetts corporation, or any person substituted for or who
succeeds Tucker Anthony Holding Corporation as such general partner pursuant to
the terms of this Agreement.

(g) Limited Partner. "Limited Partner" means any person who is or shall
become a Limited Partner of the Partnership.

(h) Partner. "Partner" means the General Partner or any Limited
Partner.

(i) Partnership. "Partnership" means TAMP Incentive Plan Limited
Partnership, a Massachusetts limited partnership.

(j) Securities. "Securities" means securities of every kind or
description.

(k) TAH. "TAH" means Tucker Anthony Holding Corporation, a
Massachusetts corporation. The subsidiaries of TAH shall include all
corporations and partnerships over which TAH or any of its subsidiaries have
Voting Control.

(l) ULPA. "ULPA" means the Massachusetts Uniform Limited Partnership
Act, as amended from time to time.

(m) Voting Control. "Voting Control" means the right to vote 50% or
more of the securities having the right to elect the directors of a corporation
or the right to designate a majority of the general partners of a partnership.

SECTION 1.02. Partnership Name. The Partnership shall do business under
the name and style of "TAMP Incentive Plan Limited Partnership," or such other
name as the General Partner may designate.

SECTION 1.03. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year, or such other fiscal year as the General Partner shall
designate.

SECTION 1.04. Nature and Liability of Partners. The General Partner
shall have such liability for the repayment, satisfaction and discharge of the
debts, liabilities and obligations of the Partnership as is provided by the ULPA
for a general partner of a limited partnership. The Limited Partners who execute
this Agreement or are otherwise admitted as Limited Partners shall be liable to
the Partnership for the repayment, satisfaction and discharge of its debts,
liabilities and obligations only (i) to the extent of their respective Capital
Contributions and (ii) to the extent provided in Section 38 of the ULPA.

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The Partners hereby agree among themselves to share in accordance with
the terms of this Agreement all losses, liabilities or expenses suffered or
incurred by virtue of the operation of the Partnership, provided that Limited
Partners shall share such losses, liabilities, and expenses only up to the limit
of their respective Capital Contributions. The General Partner agrees to assume
and be liable for all such losses, liabilities and expenses not covered by the
aggregate Capital Contributions of the Partners.

SECTION 1.05. Purposes of Partnership. The purposes of the Partnership
are to make investments in investment partnerships or companies formed for the
purpose of investing in the Securities of publicly and privately held
businesses, in order to provide incentives to senior managers of subsidiaries of
TAH who are given the opportunity to participate as Limited Partners in the
Partnership. Limited Partnership interests shall be allocated initially by TAH
based on the contributions of such managers to the business of TAH and its
subsidiaries and shall be subject to future vesting, redemption and other
provisions hereof which relate to the continued service of such managers.

SECTION 1.06. Powers of Partnership. In furtherance of the purposes of
the Partnership set forth in Section 1.05, the Partnership shall have the
following powers:

(a) To purchase or otherwise acquire, hold, and sell or
otherwise dispose of Securities, without regard to whether such
Securities are publicly traded, readily marketable, or otherwise
restricted as to transfer or resale;

(b) Subject to the limitations set forth in paragraph 2.04(c),
to possess, transfer, mortgage, pledge or otherwise deal in, and to
exercise all rights, powers, privileges and other incidents of
ownership or possession with respect to, Securities held or owned by
the Partnership, and to carry Securities in the name of a nominee or
nominees;

(c) Subject to the limitations set forth in paragraph 2.04(c),
to borrow or raise moneys, and to guarantee the obligations of others
and to sell, pledge or otherwise dispose of bonds or other obligations
of the Partnership for its purposes;

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(d) To have and maintain an office within the Commonwealth of
Massachusetts and in connection therewith to rent or acquire office
space, engage personnel and do such other acts and things as may be
necessary or advisable in connection with the maintenance of such
office, and on behalf of and in the name of the Partnership to pay and
incur reasonable expenses and obligations for legal, accounting,
consultative and custodial services, and all other reasonable costs and
expenses incident to the operation of the Partnership;

(e) To form and own one or more corporations, trusts or
limited partnerships, provided that no entity so formed may do directly
or indirectly what the Partnership is prohibited by this Agreement from
doing; and

(f) To enter into, make and perform all such contracts,
agreements and other undertakings as may be necessary or advisable or
incident to the carrying out of the foregoing objects and purposes.

SECTION 1.07. General Partner as Limited Partner. The General Partner
may also be a Limited Partner, and in such event its rights, powers,
restrictions and liabilities as a General Partner shall remain unaffected, and
in addition, it shall, in respect of its interest as a Limited Partner, have all
of the rights and powers and be subject to all of the restrictions and
liabilities of a Limited Partner.

ARTICLE II

Management of Partnership

SECTION 2.01. General. The management, operation and policy
determinations of the Partnership shall be, and hereby are, vested in the
General Partner who shall manage the Partnership's affairs. Except as otherwise
expressly provided herein, the General Partner shall have the power to exercise
the powers, rights and authority granted to the General Partner hereunder on
behalf and in the name of the Partnership.

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activities of the Partnership, and directly or through its parent or
subsidiaries it may engage or invest in other businesses and activities of every
nature, including those competitive with the activities of the Partnership,
without the Partnership or any Partner having any right by virtue of this
Agreement to an interest in such other businesses or activities or any profits
thereof.

SECTION 2.03. Compensation of General Partner.

(a) No Management Fee. The General Partner shall not receive
any fees or compensation from the Partnership for its services to the
Partnership.

(b) Expenses. The General Partner shall be reimbursed from the
Partnership for all reasonable expenditures made on behalf of the
Partnership or incurred incident to the operation of the Partnership,
including, without limitation, all legal, consulting and audit expenses
incurred in the organization of the Partnership, preparing any
amendment to the Partnership Agreement, and performing any other legal
and audit services for the Partnership, interest expenses, and
brokerage fees, commissions and discounts incurred in connection with
the purchase or sale of Securities, and other out-of-pocket expenses
incurred in connection with the making and monitoring of the
Partnership investments and the administration of the Partnership.

SECTION 2.04. Restrictions. Partners shall be restricted in their
activities as follows:

(a) No Services by Limited Partners. The Limited Partners
shall not participate in the management of the Partnership and shall
not hold themselves out as General Partners or take any action on
behalf of the Partnership or in any way commit the Partnership to any
agreement or contract and shall have no right or authority to do any of
the foregoing.

(b) Partnership Credit. No Partner shall lend or use the funds
or credit of the Partnership or employ the Partnership's name for any
purpose whatsoever, except that the General Partner may do so for the
purposes of the Partnership or as permitted by paragraph (c) of this
Section.

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institutions and secure payment of any such borrowing by
hypothecation or pledge of Partnership properties or otherwise
provided that (A) any such borrowing has an original maturity
of less than one year and (B) the aggregate of all
indebtedness of the Partnership for money borrowed outstanding
at any one time does not exceed 5% of the sum of the Capital
Contributions of all Partners.

(ii) The Partnership may guarantee the obligations of
others provided that the amount guaranteed, together with any
amount borrowed, shall at no time exceed the limitation set
forth in clause (i)(B) above.

(iii) Notwithstanding the foregoing, the Partnership
may borrow funds from TAH or its successors or assume
obligations of Limited Partners to TAH or its successors under
the terms which the General Partner deems appropriate in
connection with the redemption or withdrawal under Article IV
of the interests of Limited Partners who have outstanding
obligations to TAH under paragraph 3.01(b).

(d) Additional Restrictions. The Partnership shall not make
short sales of Securities not owned by the Partnership.

SECTION 2.05. Reliance by Third Parties. Notwithstanding any other
provision of this Article II, any third party dealing with the Partnership may
rely conclusively upon the authority, power and right of the General Partner
acting under this Agreement. This Section shall not be deemed to limit the
liabilities and obligations of the General Partner as set forth in this
Agreement.

SECTION 2.06. Partner's Transactions. Nothing in this Agreement shall
be construed to prohibit any Partner from buying or selling securities for its
own account, including securities of the same issuers as those held by the
Partnership.

SECTION 2.07. Exculpation of Liability. The General Partner and its
Affiliates (as defined in Section 2.08) shall have no liability to the
Partnership or to any Partner for any loss suffered by the Partnership which
arises out of any action or inaction of the General Partner or its Affiliates if
the General Partner or its Affiliates, in good faith, determined that such
course of conduct was in the best interests of the Partnership and such course
of conduct did not constitute negligence or misconduct of the General Partner or
its Affiliates.

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SECTION 2.08. Indemnification. The General Partner and its Affiliates
shall be indemnified by the Partnership against any losses, judgments,
liabilities, expenses and amounts paid in settlement of any claims sustained by
them in connection with the Partnership, provided that the same were not the
result of negligence or misconduct on the part of the General Partner or its
Affiliates.

Notwithstanding the above, the General Partner and its Affiliates shall
not be indemnified by the Partnership for any losses, liabilities or expenses
arising from or out of an alleged violation of federal or state securities laws
unless (1) there has been a successful adjudication on the merits of each count
involving alleged securities law violations; or (2) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction or
(3) with respect to a settlement of claims against a particular indemnitee, a
court of competent jurisdiction approves such settlement and finds that
indemnification of the settlement and related costs should be made.

The Partnership shall not incur the cost of the portion of any
insurance which insures any party against any liability as to which such party
is herein prohibited from being indemnified.

For the purposes of Sections 2.07 and 2.08, the term "Affiliates" shall
mean any person performing services on behalf of the Partnership who: (1)
directly or indirectly controls, is controlled by, or is under common control
with the General Partner; or (2) owns or controls 10% or more of the outstanding
voting securities of the General Partner; or (3) is an officer, director,
employee or agent of the General Partner.

The right of indemnification hereby provided shall not be exclusive of
or affect any other rights to which the General Partner or any Affiliate may be
entitled. Nothing contained in this Section 2.08 shall limit any lawful rights
to indemnification existing independently of this Section.

The right of indemnification provided by this Section 2.08 shall not be
construed to increase the liability of Limited Partners as set forth in Section
1.04.

ARTICLE III

Capital Accounts; Allocations; Distributions

SECTION 3.01. Capital Contributions.

(a) Contributions. On or prior to the date of his becoming a
Limited Partner of the Partnership, each Limited

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Partner shall make the Capital Contribution in cash as set forth next
to his name on Exhibit A. The Capital Contribution of the General
Partner shall at all times be not less than one percent (1%) of the
aggregate of all Capital Contributions of the Partners and the General
Partner shall make any additional Capital Contributions required to
maintain such Capital Contribution of not less than one percent (1%).
The aggregate of all Capital Contributions shall be, and hereby is
agreed to be, available to the Partnership to carry out the purposes
and objects of the Partnership.

(b) Borrowing. Limited Partners may be given the opportunity
prior to the due date of any Capital Contribution, to borrow all or any
part of such contribution from TAH upon such terms as may be offered by
TAH. Such terms may include, without limitation, the following:

(i) The principal of the loan may accelerate and be
payable earlier than the date due (i) to the extent of any
distributions payable to a borrower as a Limited Partner under
Section 3.05(a)(i), (ii) upon the termination of the
employment of the borrower by TAH and its subsidiaries, other
than a termination occasioned by the death or disability of
the borrower, or (iii) upon the termination of the borrower's
interest in the Partnership.

(ii) The General Partner may have the right to offset
loan obligations due TAH against distributions or other
payments due the borrower as a Limited Partner hereunder and
to cause the payment of such loans to the extent of such
distributions or payments.

(c) Vesting. Notwithstanding the foregoing, the interest of
each individual Limited Partner shall be subject to a vesting
requirement that the Limited Partner remain in the employment of
subsidiaries of TAH for a consecutive period of three (3) years after
the date of such Limited Partner's admission to the Partnership. This
vesting requirement may be waived in whole or in part by the General
Partner in its discretion and shall be waived in the event of
termination of employment due to normal retirement under the employer's
policies, death or disability. Upon termination of such employment of
an individual Limited Partner for any reason within three (3) years
from the date of his admission to this Partnership, unless the General
Partner otherwise determines in its discretion:

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(i) The remaining principal and accrued interest on
any loans owed by the Limited Partner under subparagraph (b)
hereof shall be immediately due and payable;

(ii) The right of the Limited Partner to any
distributions of assets of the Partnership under Section 3.05
shall terminate; and

(iii) The Limited Partner shall be required to
withdraw from the Partnership in accordance with Section 4.03
and his interest shall be liquidated under Section 4.04 or
purchased by the General Partner on equivalent terms for
retransfer to one or more substituted Limited Partners under
Section 5.02 and the proceeds of such liquidation or purchase
shall be applied to payment of the remaining principal and
accrued interest of any loans owed by the Limited Partner
under subparagraph (b) hereof before any payment or
distribution thereof is made to the Limited Partner.

SECTION 3.02. Capital Accounts. A separate capital account (each, a
"Capital Account") shall be established for each Partner initially as of July 1,
1989 and shall be maintained in accordance with the rules of Treasury
Regulations Section 1.704-1(b)(2)(iv), and this Section 3.02 shall be
interpreted and applied in a manner consistent therewith. Whenever the
Partnership would be permitted to adjust the Capital Accounts of the Partners
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) the Partnership
shall so adjust the Capital Accounts of the Partners. In an event, the
Partnership shall adjust the Capital Accounts of the Partners annually, and upon
the admission of a new Partner or the withdrawal of an existing Partner, to
reflect revaluations of Partnership property in accordance with Article VIII.
Whenever the Capital Accounts of the Partners are adjusted pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of Partnership
property, (i) the Capital Accounts of the Partners shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain or loss, as
computed for book purposes in accordance with Article VIII, with respect to such
property, and (ii) the Partners' distributive shares of depreciation, depletion,
amortization and gain or loss, as computed for tax purposes, with respect to
such property shall be determined so as to take account of the variation between
the adjusted federal income tax basis and book value of such property in the
same manner as under Code Section 704(c).

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SECTION 3.03. Deficit Capital Accounts. If upon the liquidation of the
General Partner's interest in the Partnership the General Partner has a deficit
balance in its Capital Account, the General Partner shall contribute to the
Partnership an amount equal to such deficit balance. Any such contribution shall
be made by the General Partner no later than the end of the taxable year of the
Partnership during which such liquidation occurs (or, if later, within ninety
(90) days after such liquidation). This Section 3.03 is intended to comply with
the requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(3) and
shall be interpreted and applied in a manner consistent therewith.

SECTION 3.04. Allocations.

(a) Book Items. Items of income, gain, deduction and loss, as
computed for book purposes (including any such items resulting from any
revaluation of property under Section 3.02), for any fiscal year or
portion thereof shall be allocated among the Partners pro rata in
proportion to the Capital Account balances of the Partners.

(b) Tax Items. Items of income, gain, deduction and loss, as
computed for federal income tax purposes, shall be allocated in the
same manner as under Code Section 704(c).

(c) Allocations on Withdrawal. If a Limited Partner's interest
in the Partnership is liquidated by the Partnership pursuant to Section
4.04 and the Limited Partner receives less than the amount of the
balance in his Capital Account, then the excess of (i) the balance in
his Capital Account over (ii) the amount distributed by the Partnership
shall be allocated among all the remaining Partners in proportion to
their Capital Account balances. This provision shall be applied so as
to maintain equality between the Capital Accounts of the Partners and
the amount of Partnership capital reflected on the Partnership's
balance sheet, as computed for book purposes, in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g). Further,
notwithstanding sections 3.02 and 9.01(b), if a Limited Partner's
interest is purchased by the General Partner pursuant to Section
3.01(c)(iii) and the purchase price is less than the balance of the
Capital Account of the Limited Partner, then (i) the excess of (x) the
balance in the Limited Partner's Capital Account over (y) the amount
paid by the General Partner shall be allocated among all the remaining
Partners in proportion to their Capital Account balances and (ii) the
General Partner (and any assignee of the General Partner) shall have a
Capital Account balance with respect to the purchased interest in the
Partnership equal to the purchase price paid by the General Partner.

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(d) Qualified Income Offset. No allocation shall be made
pursuant to Section 3.04(a) to the extent that it shall cause or
increase a deficit balance in any Limited Partner's Capital Account (in
excess of such Partner's obligation, if any, to restore a deficit in
his Capital Account) as of the end of the Partnership taxable year to
which such allocation relates. In making the foregoing determination, a
Limited Partner's Capital Account shall be reduced by the amounts
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6). Any Limited Partner who unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) shall be allocated items of income
and gain in an amount and manner sufficient to eliminate, to the extent
required by the Treasury Regulations, such deficit balance as quickly
as possible. This Section 3.04(d) is intended to comply with the
alternate test for economic effect set forth in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in a
manner consistent therewith.

(e) General Partner Nonrecourse Debt. If a Partner makes a
nonrecourse loan to the Partnership which is "partner nonrecourse debt"
within the meaning of Temporary Treasury Regulations Section
1.704-1T(b)(4)(iv)(h), then any item of Partnership loss, deduction or
Code Section 705(a)(2)(B) expenditure that is attributable to such debt
shall be allocated to such Partner and appropriate items of income and
gain shall be "charged back" to such Partner. This Section 3.04(e) is
intended to comply with Temporary Treasury Regulations Section
1.704-1T(b)(4)(iv)(h) and shall be interpreted and applied in a manner
consistent therewith.

(f) Curative Allocations. The allocations set forth in
Sections 3.04(d) and 3.04(e) (the "Regulatory Allocations") are
intended to comply with the requirements of Treasury Regulations
Section 1.704-1(b)(2)(ii)(d) and Temporary Treasury Regulations Section
1.704-1T(b)(4)(iv)(h), respectively. Notwithstanding any other
provisions of this Section 3.04 (other than the Regulatory
Allocations), the Regulatory Allocations shall be taken into account in
allocating other items of income, gain, deduction and loss among the
Partners, pursuant to Sections 3.04(a) and 3.04(c), so that, to the
extent possible, the net amount of such allocations of other items and
the Regulatory Allocations to each Partner shall be equal to the net
amount that would have been allocated to each such Partner if the
Regulatory Allocations had not occurred.

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SECTION 3.05. Distributions to Partners.

(a) Distributions to Partners.

(i) It shall be within the sole discretion of the
General Partner as to whether, when and in what amount a
distribution of cash or other assets of the Partnership shall
be made. Such distributions (other than a distribution made in
connection with the withdrawal of a Partner under Article IV)
shall be made to all of the Partners in the ratio that their
respective Capital Accounts bear to one another at the time of
the distribution.

(ii) The General Partner may, but shall not be
required to, make annual distributions to each Partner in an
amount which the General Partner estimates is sufficient to
pay federal and state income taxes attributable to
allocations under Section 3.04(b). Notwithstanding Section
3.05(a)(i), any distributions made pursuant to this Section
3.05(a)(ii) shall be made to the Partners in proportion to the
excess of cumulative income and gain over cumulative
deductions and losses allocated to each of the Partners
pursuant to Section 3.04(b).

(b) Application of Distributions. To the extent that there is
any amount due from a Limited Partner to TAH under a loan made pursuant
to paragraph 3.01(b), each distribution to a Limited Partner (except a
distribution under subsection(a)(ii) hereof) shall be applied in
payment of such obligation of such Partner.

(c) Repayment of Distributions. Partners shall be required to
repay Partnership distributions to the extent provided in the ULPA.

SECTION 3.06. No Interest on Capital. No Partner shall be entitled to
receive interest from the Partnership on his Capital Account.

ARTICLE IV

Withdrawal of Limited Partner

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believe that such withdrawal is in the best interests of the other Limited
Partners, whether because of the cash position of the Partnership, the
undesirability of liquidating any of the investments of the Partnership, or
otherwise. The following provisions shall govern with respect to any withdrawals
approved by the General Partner:

(a) No such withdrawal shall be made except as of the last day
of a fiscal year of the Partnership;

(b) Partial withdrawals shall not be permitted and a Partner
desiring to withdraw must withdraw his entire interest in the
Partnership;

(c) The Partner desiring to withdraw must notify the General
Partner in writing at least sixty (60) days prior to the close of the
fiscal year in which he wishes to effect his withdrawal; and

(d) The General Partner may, if necessary to accommodate a
request for withdrawal by a Limited Partner, attempt to obtain a
purchaser of the whole or a part of such Limited Partner's interest.

SECTION 4.02. Legal Representatives. In the event any Limited Partner
shall die or shall be declared incompetent or insane or shall be adjudicated a
bankrupt, the legal representative of such Limited Partner shall upon written
notice to the General Partner of the happening of any of such events become an
assignee of such Limited Partner's interest subject to all of the terms of this
Agreement as then in effect. Such legal representative may not withdraw from the
Partnership except in accordance with Section 4.01. If the General Partner does
not approve withdrawal of the interest of such legal representative, the General
Partner will use its best efforts, without legal obligation, to find another
person, suitable to the General Partner, willing to assume the Partnership
interest of such legal representative.

SECTION 4.03. Mandatory Withdrawal. Unless the General Partner
otherwise determines, an individual Limited Partner shall be required to
withdraw from the Partnership upon the termination of his employment by TAH or
its subsidiaries prior to the vesting of his interest under paragraph 3.01(c),
except for a termination by reason of normal retirement under the employer's
policies, death or disability, and his Partnership interest shall be liquidated
under Section 4.04 or purchased by the General Partner for retransfer to
substituted Limited Partners under Section 3.01(c)(iii).

SECTION 4.04. Liquidating Share. In the event any Limited Partner shall
withdraw or be required to withdraw in accordance

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with the provisions of this Article IV, there shall be paid to such Limited
Partner or his legal representative within 60 days after the last day of the
fiscal year of the Partnership which constitutes the effective date of
withdrawal, an amount equal to such Partner's positive Capital Account balance
as of the effective date of withdrawal; provided, however, that in the event of
a mandatory withdrawal under Section 4.03, such Partner shall be paid an amount
equal to the lesser of (i) his Capital Contribution(s) less distributions paid
to him prior to the withdrawal date, other than distributions paid under Section
3.05(a)(ii), or (ii) his positive Capital Account balance.

SECTION 4.05. Cessation of Participation. From and after the effective
date of withdrawal of a Partner from the Partnership under this Article IV, no
interest shall be payable on such Partner's interest in the Partnership to the
date of payout.

ARTICLE V

Transfer of Partnership Interests

SECTION 5.01. Assignability of Interests.

(a) Subject to the provisions of Section 4.02 hereof, the
interest of a Limited Partner shall not be assignable without the prior
written consent of the General Partner. No assignment shall be binding
upon the Partnership until the General Partner receives an executed
copy of such assignment in form and substance satisfactory to the
General Partner. The assignee of such interest may become a substituted
Limited Partner only upon the terms and conditions of Sections 5.02 and
9.01.

(b) The interest of the General Partner shall not be
assignable; provided, however, that in no event shall the interest of
the General Partner be reduced below a 1% interest in the Capital
Accounts of the Partners and that such interest may be assigned to a
successor to all or substantially all of the business of the General
Partner the Voting Control of which is held by those persons then
holding Voting Control of the General Partner upon (i) the execution by
the General Partner of a written assignment, the execution by the
successor of this Agreement, and the written assumption by the
successor of the obligations of the General Partner hereunder; and (ii)
the receipt by the Partnership of an opinion of counsel that such
assignment and assumption will not result in the Partnership being
classified as an association for Federal income tax purposes. In the
event of such assignment, the successor shall become the General
Partner hereunder, and the

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predecessor and successor General Partner shall cause the execution of
any necessary papers including, without limitation, an amendment to the
Certificate of Limited Partnership to record the substitution of the
successor as General Partner.

SECTION 5.02. Substituted Limited Partners. No Limited Partner shall
have the right to substitute an assignee as a Limited Partner in his place. The
General Partner shall have the right, in its discretion, to admit as a
substituted Limited Partner any person, firm or corporation acquiring a
partnership interest by assignment from another Limited Partner or from the
General Partner. The admission of an assignee as a substituted Limited Partner
shall be conditioned upon the assignee's written assumption of all obligations
of the assigning Limited Partner and execution of this Agreement as a Limited
Partner. Upon acceptance of a substituted Limited Partner, the General Partner
shall forthwith amend the Certificate of Limited Partnership and any other
necessary papers to show the substitution of such assignee in place of the
assigning Limited Partner. The General Partner's failure or refusal to admit an
assignee as a substituted Limited Partner shall not affect the right of such
assignee to receive the share of profits or other distribution or compensation
to which its assignor would otherwise be entitled.

SECTION 5.03. Obligations of Assignee. Any assignee, irrespective of
whether such assignee has accepted and adopted in writing the terms and
provisions of this Agreement, shall be deemed by the acceptance of such
assignment to have agreed to be subject to the terms and provisions of this
Agreement in the same manner as its assignor.

ARTICLE VI

Duration and Termination of Partnership

SECTION 6.01. Duration. Except as provided in Section 6.03, the
Partnership shall continue for a period of twenty (20) years from and after the
date hereof, provided, however, that with the written consent of the General
Partner and Limited Partners representing at least sixty-six and two-thirds
percent (66 2/3%) of the combined Capital Accounts of all the Limited Partners,
the Partnership may be terminated at any time after its first full fiscal year.

SECTION 6.02. Withdrawal of Limited Partner. If any Limited Partner
shall withdraw, die, be declared incompetent or insane, or be adjudicated a
bankrupt, such event shall not cause the dissolution or termination of the
Partnership, and the Partnership shall continue until terminated pursuant to
Section 6.01 or Section 6.03.

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SECTION 6.03. Withdrawal of General Partner.

(a) The General Partner may withdraw at any time after
December 31, 1994 by giving 90 days prior written notice to the other
Partners. If Limited Partners whose Capital Accounts constitute in
excess of 66 2/3% of all Capital Accounts consent in writing executed
within such 90-day period to the continuation of the Partnership and
elect a new General Partner, the Partnership shall not terminate but
shall continue in existence as though no such withdrawal or filing had
occurred, except that the new General Partner shall be substituted for
the former General Partner. Any Limited Partner who does not consent to
such continuation shall have the right to withdraw by giving notice
within 90 days after having been notified of the continuation of the
Partnership and shall be paid in the manner set forth in Section 4.04.

(b) In the event that the Limited Partners shall have
determined to continue the Partnership, the former General Partner (or
its representative, successors or assigns) shall become a Limited
Partner of the Partnership upon the effective date of such continuation
to the extent of its then interest in the Partnership as a General
Partner. Thereafter, except as otherwise provided below, such former
General Partner (or its representative) shall be treated so a Limited
Partner for all purposes of this Agreement, shall have all of the
rights and obligations of a Limited Partner hereunder, including the
right to receive allocations and distributions on the same basis as all
other Limited Partners, and shall not be entitled to receive any
further allocations or distributions to which the General Partner is
entitled hereunder. Upon becoming a Limited Partner, such former
General Partner's Capital Account and Capital Commitment shall
initially be the same as they were on the effective date of such
continuation. Once the General Partner ceases to be such for whatever
reason and becomes a Limited Partner hereunder, such former General
Partner will no longer be personally liable with respect to Partnership
liabilities arising out of events and transactions occurring after his
termination as General Partner (i.e., his Capital Account will be
debited for his share, if any, as Limited Partner of the losses and
expenses arising out of such liabilities but he will not be required to
make additional contributions to the Partnership to satisfy such
liabilities). However, a former General Partner will remain personally
liable for all Partnership liabilities arising out of events and
transactions occurring prior to his termination as General Partner
(i.e., his Capital Account will be debited for his share of losses and
expenses arising out of such liabilities and he will be required to
make additional contributions to the

16
<PAGE> 21
Partnership to the extent of a deficit in his Capital Account due to
such liabilities arising out of events and transactions occurring prior
to his termination).

SECTION 6.04. Liquidation. Upon the termination of the Partnership the
General Partner, or if there be no General Partner, then a person selected by
Limited Partners representing in excess of fifty percent (50%) of the combined
Capital Accounts of all Limited Partners, shall act as the liquidator (or
liquidators) of the Partnership with full power and authority to:

(a) sell, at such prices and upon such terms as the liquidator
in its sole discretion may deem appropriate, any or all of the
Securities, properties and assets of the Partnership, provided that
such sales shall only be made for cash and, when possible, consummated
within ninety (90) days after the date of termination; and provided
further that the liquidator shall not deal directly or indirectly with
the Partnership for its own account without the approval in writing of
all of the Limited Partners; and

(b) within ninety (90) days after the date of termination or
as soon thereafter as possible, effect distribution of the properties
and assets of the Partnership in cash or in kind in the manner set
forth in Section 6.05.

SECTION 6.05. Distribution Upon Termination. Upon liquidation of the
Partnership, the assets of the Partnership remaining after the payment, or
reasonable provision therefor, of all Partnership liabilities (and the es-
tablishment of reasonable reserves for contingent liabilities) shall be
distributed to the Partners in proportion to and to the extent of the positive
balances of their respective Capital Accounts. This Section 6.05 is intended to
comply with the requirements of Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2) and shall be interpreted and applied in a manner
consistent therewith.

ARTICLE VII

Reports to Partners

SECTION 7.01. Financial Records. The General Partner shall keep books
of account in which shall be entered fully and accurately the transactions of
the Partnership and financial records appropriate to the business of the
Partnership.

17
<PAGE> 22
SECTION 7.02. Annual Reports. Within ninety (90) days after the end of
each fiscal year and upon liquidation of the Partnership, the General Partner
shall prepare and mail to each Partner and to each former Partner who withdrew
during the applicable fiscal year or its legal representative, a report stating
in sufficient detail such transactions effected by the Partnership during such
fiscal year as shall enable such Partner or former Partner or the legal
representative of such former Partner to prepare its respective income tax
returns, including:

(a) such Partner's Capital Account balance as of the close of
such fiscal year;

(b) the sum of the Capital Account balances as of such date of
all the Partners;

(d) profit and loss statement;

(e) statement of holdings of Securities of the Partnership;

(f) a description of the nature of each of the Partnership's
investments, the cost thereof and the valuation thereof established
pursuant to Article VIII; and

(g) such other financial information and documents as the
General Partner deems appropriate, as a Limited Partner may reasonably
request, or as is required by this Agreement and any amendments hereto.

SECTION 7.03. Inspection. A Limited Partner shall have the right at
reasonable times to inspect the books and records of the Partnership and to
discuss its affairs with the agents of the General Partner.

SECTION 7.04. Tax Returns. The General Partner will file all Federal,
state or other income tax returns required of the Partnership and will supply to
each Limited Partner such Partner's Form K-1 submitted with the Partner's
Federal tax return. Upon the request of any Partner, subject to the approval of
the General Partner, the Partnership shall elect, pursuant to Code Section 754,
to adjust the basis of Partnership property as permitted and provided in Code
Sections 734 and 743.

<PAGE> 23
ARTICLE VIII
Valuation

SECTION 8.01. Valuation of Partnership Net Worth. In determining the net
worth of the Partnership, the value of any Partnership asset, the Capital
Accounts of the Partners, the value of any distribution, or in determining value
for any other purpose under this Agreement, the provisions of this Article VIII
shall apply.

SECTION 8.02. Valuation Date. Valuation shall be determined by the General
Partner as of the close of business on the Market Day preceding the last day of
each fiscal year of the Partnership or as of the close of business on the date
with respect to which valuation is to be taken, or if such day is not a Market
Day, then on the Market Day next preceding such date, as the case may be. A
Market Day shall be a day on which the New York Stock Exchange is open for
regular trading. If a valuation is taken other than in connection with the
annual reports described in Section 7.02, the General Partner shall give notice
of such valuation to the Limited Partners promptly after it is determined.

SECTION 8.03. Valuing Securities and Other Assets. The following
provisions shall apply in valuing the assets of the Partnership:

(a) Listed Securities which are not restricted as to saleability or
transferability shall be valued at the closing price as of the Valuation
Date. If any listed Security was not traded on such date, then the mean of
the closing high bid and low asked prices as of the close of business on
such date shall be used.

(b) Unlisted securities which are readily marketable shall be valued
at the mean of the closing bid and asked prices as of the Valuation Date.

(c) Securities, whether listed or unlisted, for which market
quotations are available, but which are restricted as to saleability or
transferability shall be valued as provided in (a) and (b) above, less a
discount of from ten percent (10%) to twenty-five percent (25%) of the
value thereof as determined in good faith by the General Partner. In
determining the amount of such discount the General Partner shall give
consideration to the nature and length of such restriction and the
relative volatility of the market price of such Security.

(d) Securities for which market quotations are not readily available
and all other assets of the Partnership

19
<PAGE> 24
shall be valued at a fair value as determined in good faith by the General
Partner.

(e) Interests in other partnerships shall be valued by each
partnership at the times and upon the terms provided in its partnership
agreement unless the General Partner of this Partnership otherwise
determines.

(f) Liabilities shall include, in addition to those recorded on the
books of the Partnership, such other accrued or contingent liabilities as
shall be determined in accordance with generally accepted accounting
principles.

(g) In determining the value of the interest of any Partner in the
Partnership, neither the goodwill nor the right to use the firm name or
trade name of the Partnership shall be considered as an asset of the
Partnership.

ARTICLE IX
Miscellaneous

SECTION 9.01. Admission of Limited Partners. Except as provided in this
Section, no new Limited Partner shall be admitted to the Partnership and no
additional contribution of capital by a Limited Partner to the Partnership shall
be accepted.

(a) Additional Limited Partners. Additional Limited Partners may be
admitted in the discretion of the General Partner as of the first day of
July or the first day of January of any year and the interest of such
additional Limited Partner in the Partnership shall be established by
creating a Capital Account for such additional Limited Partner as of that
day in an amount equal to the contribution made by such additional Limited
Partner to the Partnership.

(b) Substituted Limited Partners. Substituted Limited Partners may
also be admitted in the discretion of the General Partner by assignment or
transfer of the interest of a Limited Partner or the General Partner in
accordance with Article V or Sections 3.01(c)(iii), 4.01(d) or 4.02, in
which case the substituted Limited Partner will take over the Capital
Account of his assignor or transferor.

20
<PAGE> 25
this Agreement, which shall be accepted by its execution by the General
Partner, as well as any other documents required by the General Partner,
and (ii) make payment of his Capital Commitment, or purchase price in the
case of a substituted Limited Partner, as determined by the General
Partner, and (iii) an amendment to the Partnership's Certificate of
Limited Partnership shall be filed to reflect such addition. Each such new
Limited Partner shall thereafter be entitled to and subject to all the
rights and liabilities of Limited Partners as set forth herein.

SECTION 9.02. Disputed Matters. Any controversy or dispute arising out of
this Agreement, interpretation of any of the provisions hereof, or the actions
of the General or Limited Partners hereunder shall be submitted to arbitration
before the American Arbitration Association under the rules then obtaining of
said Association, such arbitration to be held in Boston, Massachusetts, and
judgment upon any award thus obtained may be entered in any court having
jurisdiction thereof. In any such arbitration each party to the arbitration
shall bear its own expenses, including expenses of attorneys, financial experts
and other witnesses; and any arbitration fees and expenses of the arbitrators
shall be divided equally between the disputing parties.

SECTION 9.03. Payments in Kind. In the event the Partnership is required
or elects to make a payment or other distribution to or on behalf of any Partner
or to the legal representative, liquidator, or receiver of any deceased,
incompetent, insane or bankrupt Partner, the General Partner may (but shall not
be obligated to) make such payment or distribution, either wholly or partially,
in Securities or other property of the Partnership. The amount of any such
payment or distribution shall be deemed to be equal to the value of such
securities or other property, as determined under Article VIII, as of the
effective date of their distribution to or on behalf of the Partner or his legal
representatives and the decisions of the General Partner with respect to in-kind
payments, including decisions with respect to selection, apportionment and
valuation of Securities or other property, shall be conclusive and binding upon
all Partners.

SECTION 9.04. General. This Agreement: (a) shall be binding on the
executors, administrators, estates, heirs and legal successors of the Partners;
(b) shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts; (c) may be executed in more than one counterpart
as of the day and year first above written; provided, however, that each
separate counterpart shall have been executed by the General Partner; and (d)
contains the entire Agreement among the Partners relating to the subject matter
hereof. The waiver of any of the provisions, terms or conditions contained in
this

21
<PAGE> 26
Agreement shall not be considered as a waiver of any of the other provisions,
terms or conditions hereof.

SECTION 9.05. Notices.

(a) To the Partners. Any notice to be given hereunder by the
Partnership to any Partner shall be in writing and signed by the General
Partner. Any such notice shall be conclusively deemed to have been given
if either delivered in person to such Partner or mailed by registered or
certified mail to such Partner at his address set forth in Exhibit A. Any
Partner may change his address for notice by written notice to the
Partnership.

(b) To the Partnership. Any notice to be given hereunder to the
Partnership shall be in writing and signed by the Partner giving notice.
Any such notice shall be conclusively deemed to have been given if
delivered in person or mailed by registered or certified mail, postage
prepaid to the General Partner at its address set forth in Exhibit A, or
such other address as the General Partner may from time to time designate
by notice to all Partners.

SECTION 9.06. Execution of Certificate of Limited Partnership and Other
Documents. The General Partner agrees to prepare and file and the Partners agree
to execute a certificate of limited partnership, any amendments thereto, and
such other instruments, documents and papers as the General Partner deems
necessary or appropriate to carry out the intent of this Agreement, and to take
such other action as the General Partner deems appropriate to maintain the
Partnership's status as a Limited Partnership under the ULPA.

SECTION 9.07. Force Majeure. Whenever any act or thing is required of the
Partnership hereunder within any specified period of time, the Partnership shall
be entitled to such additional period of time to do such acts or things as shall
equal any period of delay resulting from causes beyond the reasonable control of
the Partnership, including, without limitation, bank holidays, actions of
governmental agencies, closing the New York Stock Exchange at times other than
normal closing dates, and financial crises of a nature materially affecting the
purchase and sale of Securities.

22
<PAGE> 27
without the specific written consent of each Partner adversely affected thereby
no such modification or amendment shall (i) increase the obligation of a Limited
Partner beyond that set forth in Section 1.04, (ii) reduce the Capital Account
of any Partner or its rights to distribution and withdrawal with respect
thereto; or (iii) amend section 1.05 to permit Partnership activities which
would subject a Limited Partner to Federal or state taxation which such Partner
would not be subject to in the absence of such activity. Without unanimous
consent no amendment or modification may be made (x) which would cause the
Partnership to cease to be a Limited Partnership under applicable state law or
(y) which would amend this Section 9.08.

SECTION 9.09. Headings. Article, Section, Paragraph and Subparagraph
headings are for convenience of reference only, and are not part of this
Agreement, and shall not be considered in interpreting this Agreement.

SECTION 9.10. Power of Attorney. Each Limited Partner does hereby
constitute and appoint John H. Goldsmith, Richard K. Howe and Dennis O'Connor
and each of them, its true and lawful representative, in its name, place and
stead, to make, execute, sign, acknowledge, deliver and file all such
instruments, documents and certificates which may from time to time be required
by the laws of the United States of America, the Commonwealth of Massachusetts,
or any other state in which the Partnership shall determine to do business, or
any political subdivision or agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Partnership including,
without limitation, a Certificate of Limited Partnership and amendments thereto
and any such certificate or amendment filed for the purpose of admitting the
undersigned as Limited Partners of the Partnership.

23
<PAGE> 28
IN WITNESS WHEREOF, the General Partner and the Limited Partners have
hereunto set their hands and seals as of the date first set forth above.

GENERAL PARTNER

Tucker Anthony Holding
Corporation

By:____________________________________

LIMITED PARTNER
_______________________________________

_______________________________________
(Print Name)

S.S.#__________________________________

Allocation Accepted: $____________

STATE OF )
) ss:
COUNTY OF )

Then personally appeared before me ________________, known to me, and
acknowledged the same to be his free act and deed.

_______________________________________
Notary

24
<PAGE> 29
EXHIBIT A

General Partner

Capital
Name Address Contribution
- - - - - - - - - - - - - - - ---- ------- ------------

Tucker Anthony Holding One Beacon Street 1% of total
Corporation Boston, MA 02109 Capital as
General
Partner

Limited Partners

Capital
Name Address Contribution
- - - - - - - - - - - - - - - ---- ------- ------------

$
-----------

25
<PAGE> 30
EXHIBIT B

TA Holding Corporation
Balance Sheets (Unaudited)

<TABLE>
<CAPTION>
December 31
--------------------------
1988 1989
----------- -----------
<S> <C> <C>
Assets

Cash $ 127,000 $ 238,000
Investments:
Tucker Anthony Incorporated 47,837,000 47,937,000
Freedom Capital Management Corporation 1,000,000
Other 1,486,000 906,000
Deferred Taxes 514,000
Receivable from Employees 3,851,000 2,422,000
Prepaid Expenses 2,583,000 4,665,000
Other Assets 3,886,000 3,806,000
----------- -----------
Total Assets $60,770,000 $60,488,000
=========== ===========

Liabilities and Stockholder's Equity

Liabilities
Notes Payable to Affiliate $24,341,000 $10,341,000
Accounts Payable and Accrued Expenses 3,636,000 2,310,000
Income Taxes Payable 1,805,000 4,537,000
Intercompany Payable 3,064,000 1,247,000
----------- -----------
Total Liabilities $32,846,000 $18,435,000

Stockholder's Equity
Common Stock $ 1,000 $ 1,000
Paid in Capital 24,500,000 39,000,000
Retained Earnings 3,423,000 3,052,000
----------- -----------
Total Stockholder's Equity $27,924,000 $42,053,000
----------- -----------

Total Liabilities and Stockholder's Equity $60,770,000 $60,488,000
=========== ===========
</TABLE>

<PAGE> 1
Exhibit 10.15

TAMP II INCENTIVE PLAN
LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT

<PAGE> 2
TABLE OF CONTENTS

Page
----
ARTICLE I - General Provisions ...............................................1
SECTION 1.01. Definitions .............................................1
(a) Agreement .................................................1
(b) Capital Account............................................1
(c) Capital Contribution.......................................1
(d) Certificate of Limited Partnership.........................1
(e) Code ......................................................1
(f) General Partner............................................1
(g) Limited Partner............................................1
(h) Partner....................................................2
(i) Partnership................................................2
(j) Securities.................................................2
(k) TAH........................................................2
(l) ULPA.......................................................2
(m) Voting Control.............................................2
SECTION 1.02. Partnership Name.........................................2
SECTION 1.03. Fiscal Year..............................................2
SECTION 1.04. Nature and Liability of Partners.........................2
SECTION 1.05. Purposes of Partnership..................................2
SECTION 1.06. Powers of Partnership....................................3
SECTION 1.07. General Partner as Limited Partner.......................3

ARTICLE II - Management of Partnership........................................4
SECTION 2.01. General..................................................4
SECTION 2.02. Services of General Partner..............................4
SECTION 2.03. Compensation of General Partner..........................4
(a) No Management Fee..........................................4
(b) Expenses...................................................4
SECTION 2.04. Restrictions.............................................4
(a) No Services by Limited Partners............................4
(b) Partnership Credit.........................................5
(c) Limitation on Borrowing and Pledging.......................5
(d) Additional Restrictions....................................5
SECTION 2.05. Reliance by Third Parties.................................5
SECTION 2.06. Partner's Transactions....................................5
SECTION 2.07. Exculpation of Liability..................................5
SECTION 2.08. Indemnification...........................................6

ARTICLE III - Capital Accounts; Allocations; Distributions....................6
SECTION 3.01. Capital Contributions.....................................6
(a) Contributions.............................................7

(i)
<PAGE> 3
Page
----

(b) Borrowing.............................................. 7
(c) Vesting................................................ 7
SECTION 3.02. Capital Accounts................................... 8
SECTION 3.03. Deficit Capital Accounts........................... 8
SECTION 3.04. Allocations........................................ 8
(a) Book Items............................................. 8
(b) Tax Items.............................................. 9
(c) Allocations on Withdrawal.............................. 9
(d) Qualified Income Offset................................ 9
(e) General Partner Nonrecourse Debt....................... 9
(f) Curative Allocations................................... 10
SECTION 3.05. Distributions to Partners.......................... 10
(a) Distributions to Partners.............................. 10
(b) Application of Distributions........................... 10
(c) Repayment of Distributions............................. 10
SECTION 3.06. No Interest on Capital............................. 11

ARTICLE IV - Withdrawal of Limited Partner............................ 11
SECTION 4.01. Withdrawal of Limited Partner...................... 11
SECTION 4.02. Legal Representatives.............................. 11
SECTION 4.03. Mandatory Withdrawal............................... 11
SECTION 4.04. Liquidating Share.................................. 12
SECTION 4.05. Cessation of Participation......................... 12

ARTICLE V - Transfer of Partnership Interests......................... 12
SECTION 5.01. Assignability of Interests......................... 12
SECTION 5.02. Substituted Limited Partners....................... 13
SECTION 5.03. Obligations of Assignee............................ 13

ARTICLE VI - Duration and Termination of Partnership.................. 13
SECTION 6.01. Duration........................................... 13
SECTION 6.02. Withdrawal of Limited Partner...................... 13
SECTION 6.03. Withdrawal of General Partner...................... 13
SECTION 6.04. Liquidation........................................ 14
SECTION 6.05. Distribution Upon Termination...................... 15

ARTICLE VII - Reports to Partners..................................... 15
SECTION 7.01. Financial Records.................................. 15
SECTION 7.02. Annual Reports..................................... 15
SECTION 7.03. Inspection......................................... 16
SECTION 7.04. Tax Returns........................................ 16

ARTICLE VIII - Valuation.............................................. 16

(ii)
<PAGE> 4
Page
----

SECTION 8.01. Valuation of Partnership Net Worth................. 16
SECTION 8.02. Valuation Date..................................... 16
SECTION 8.03. Valuing Securities and Other Assets................ 16

ARTICLE IX - Miscellaneous............................................ 17
SECTION 9.01. Admission of Limited Partners...................... 17
(a) Additional Limited Partners............................ 17
(b) Substituted Limited Partners........................... 17
(c) Procedure.............................................. 17
SECTION 9.02. Disputed Matters................................... 18
SECTION 9.03. Payments in Kind................................... 18
SECTION 9.04. General............................................ 18
SECTION 9.05. Notices............................................ 19
(a) To the Partners........................................ 19
(b) To the Partnership..................................... 19
SECTION 9.06. Execution of Certificate of Limited Partnership and
Other Documents............................................. 19
SECTION 9.07. Force Majeure...................................... 19
SECTION 9.08. Amendments......................................... 19
SECTION 9.09. Headings........................................... 20
SECTION 9.10. Power of Attorney.................................. 20

(iii)
<PAGE> 5
TAMP II

INCENTIVE PLAN LIMITED PARTNERSHIP

LIMITED PARTNERSHIP AGREEMENT

BY THIS LIMITED PARTNERSHIP AGREEMENT made and entered into as of
February 28,1995, Tucker Anthony Holding Corporation, a corporation organized
under the laws of the Commonwealth of Massachusetts, as general partner, and
those persons and entities executing this Agreement or counterparts thereof and
listed on Exhibit A (as it may be amended from time to time) as limited
partners, hereby form a limited partnership pursuant to the laws of the
Commonwealth of Massachusetts.

ARTICLE I - General Provisions

SECTION 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a) Agreement. "Agreement" means this Limited Partnership Agreement as
it may from time to time be amended.

(b) Capital Account. "Capital Account" means those separate capital
accounts which are maintained for each Partner as defined in Section 3.02.

(e) Code. "Code" means the Internal Revenue Code, as amended.

(f) General Partner. "General Partner" means Tucker Anthony Holding
Corporation, a Massachusetts corporation, or any person substituted for or who
succeeds Tucker Anthony Holding Corporation as such general partner pursuant to
the terms of this Agreement.
<PAGE> 6
(g) Limited Partner. "Limited Partner" means any person who is or shall
become a Limited Partner of the Partnership.

(h) Partner. "Partner" means the General Partner or any Limited
Partner.

(i) Partnership. "Partnership" means TAMP II Incentive Plan Limited
Partnership, a Massachusetts limited partnership.

(j) Securities. "Securities" means securities of every kind or
description.

(k) TAH. "TAH" means Tucker Anthony Holding Corporation, a
Massachusetts corporation. The affiliates of TAH shall include all corporations
and partnerships (i) over which TAH or any of its affiliates has Voting Control,
(ii) which, directly or indirectly, have Voting Control over TAH, and (iii)
which are under Voting Control of any corporation or partnership described in
the immediately preceding clause (ii).

(l) ULPA. "ULPA" means the Massachusetts Uniform Limited Partnership
Act, as amended from time to time.

SECTION 1.02. Partnership Name. The Partnership shall do business under
the name and style of "TAMP II Incentive Plan Limited Partnership," or such
other name as the General Partner may designate.

SECTION 1.03. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year, or such other fiscal year as the General Partner shall
designate or the Code shall require.

2
<PAGE> 7
The General Partner agrees to assume and be liable for all such losses,
liabilities and expenses not covered by the aggregate Capital Contributions of
the Partners.

SECTION 1.05. Purposes of Partnership. The purposes of the Partnership
are to make investments in the Securities of publicly and privately held
companies and partnerships, in order to provide incentives to senior managers of
TAH or its affiliates who are given the opportunity to participate as Limited
Partners in the Partnership. Limited Partnership interests shall be allocated
initially by TAH based on the contributions of such managers to the business of
TAH and its affiliates and shall be subject to future vesting, redemption and
other provisions hereof which relate to the continued service of such managers.

SECTION 1.06. Powers of Partnership. In furtherance of the purposes of
the Partnership set forth in Section 1.05, the Partnership shall have the
following powers:

(d) To have and maintain an office within the Commonwealth of
Massachusetts and in connection therewith to rent or acquire office
space, engage personnel and do such other acts and things as may be
necessary or advisable in connection with the maintenance of such
office, and on behalf of and in the name of the Partnership to pay and
incur reasonable expenses and obligations for legal, accounting,
consultative and custodial services, and all other reasonable costs and
expenses incident to the operation of the Partnership;

(f) To enter into, make and perform all such contracts,
agreements and other undertakings as may be necessary or advisable or
incident to the carrying out of the foregoing objects and purposes.

3
<PAGE> 8
SECTION 1.07. General Partner as Limited Partner. The General Partner
may also be a Limited Partner, and in such event its rights, powers,
restrictions and liabilities as a General Partner shall remain unaffected, and
in addition, it shall, in respect of its interest as a Limited Partner, have all
of the rights and powers and be subject to all of the restrictions and
liabilities of a Limited Partner.

ARTICLE II - Management of Partnership

SECTION 2.02. Services of General Partner. The General Partner shall
(i) provide investment advice to the Partnership and shall bear the cost of
securing information with respect to prospective investments, (ii) maintain the
books and records of the Partnership, (iii) provide routine bookkeeping and
recordkeeping services and custody of Partnership securities, and (iv) provide
office space, office and executive staff, and office supplies and equipment for
the use of the Partnership. The General Partner shall be required to devote only
such time as is necessary to perform such services and to supervise the
activities of the Partnership, and directly or through its parent or affiliates
it may engage or invest in other businesses and activities of every nature,
including those competitive with the activities of the Partnership, without the
Partnership or any Partner having any right by virtue of this Agreement to an
interest in such other businesses or activities or any profits thereof.

SECTION 2.03. Compensation of General Partner.

(a) No Management Fee. The General Partner shall not receive
any fees or compensation from the Partnership for its services to the
Partnership.

(b) Expenses. The General Partner shall be reimbursed from the
Partnership for all reasonable expenditures made on behalf of the
Partnership or incurred incident to the operation of the Partnership,
including, without limitation, all legal, consulting and audit
expenses incurred in the organization of the Partnership, preparing any
amendment to the Partnership Agreement, and performing any other legal
and audit services for the Partnership, interest expenses, and
brokerage fees, commissions and discounts incurred in connection with
the purchase or sale of Securities, and other out-of-pocket expenses
incurred in connection with the making and monitoring of the
Partnership investments and the administration of the Partnership.

4
<PAGE> 9
SECTION 2.04. Restrictions. Partners shall be restricted in their
activities as follows:

(i) If in the reasonable judgment of the General
Partner it is desirable to do so to accomplish the purposes of
the Partnership, the Partnership may borrow money from banks
or other recognized financial institutions and secure payment
of any such borrowing by hypothecation or pledge of
Partnership properties or otherwise provided that (A) any such
borrowing has an original maturity of less than one year and
(B) the aggregate of all indebtedness of the Partnership for
money borrowed outstanding at any one time does not exceed 5%
of the sum of the Capital Contributions of all Partners.

(d) Additional Restrictions. The Partnership shall not make
short sales of Securities not owned by the Partnership.

5
<PAGE> 10
SECTION 2.06. Partner's Transactions. Nothing in this Agreement shall
be construed to prohibit any Partner from buying or selling securities for such
Partner's own account, including securities of the same issuers as those held by
the Partnership.

SECTION 2.08. Indemnification. The General Partner and its Affiliates
shall be indemnified by the Partnership against any losses, judgments,
liabilities, expenses and amounts paid in settlement of any claims sustained by
them in connection with the Partnership, provided that the same were not the
result of gross negligence or willful misconduct on the part of the General
Partner or its Affiliates.

The Partnership shall not incur the cost of the portion of any
insurance which insures any party against any liability as to which such party
is herein prohibited from being indemnified.

The right of indemnification provided by this Section 2.08 shall not be
construed to increase the liability of Limited Partners as set forth In Section
1.04.

6
<PAGE> 11
ARTICLE III - Capital Accounts; Allocations; Distributions

SECTION 3.01. Capital Contributions.

(a) Contributions. On or prior to the date of becoming a Limited
Partner of the Partnership, each Limited Partner shall make the Capital
Contribution in cash as set forth next to his/her name on Exhibit A. The Capital
Contribution of the General Partner shall at all times be not less than one
percent (1%) of the aggregate of all Capital Contributions of the Partners and
the General Partner shall make any additional Capital Contributions required to
maintain such Capital Contribution of not less than one percent (1%). The
aggregate of all Capital Contributions shall be, and hereby is agreed to be,
available to the Partnership to carry out the purposes and objects of the
Partnership.

(b) Borrowing. Limited Partners may be given the opportunity prior to
the due date of any Capital Contribution, to borrow all or any part of such
contribution from TAH upon such terms as may be offered by TAH. Such terms may
include, without limitation, the following:

(i) The principal of the loan may accelerate and be payable
earlier than the date due (i) to the extent of any distributions
payable to a borrower as a Limited Partner under Section 3.05(a)(i),
(ii) upon the termination of the employment of the borrower by TAH and
its affiliates, other than a termination occasioned by the death or
disability of the borrower, or (iii) upon the termination of the
borrower's interest in the Partnership.

(ii) The General Partner may have the right to offset loan
obligations due TAH against distributions or other payments due the
borrower as a Limited Partner hereunder and to cause the payment of
such loans to the extent of such distributions or payments.

(c) Vesting. Notwithstanding the foregoing, the interest of each
individual Limited Partner shall be subject to a vesting requirement that the
Limited Partner remain in the employment of TAH or any of its affiliates for a
consecutive period of three (3) years after the date of such Limited Partner's
admission to the Partnership. This vesting requirement may be waived in whole or
in part by the General Partner in its discretion and shall be waived in the
event of termination of employment due to normal retirement under the employer's
policies, death or disability. Upon termination of such employment of an
individual Limited Partner for any reason within three (3) years from the date
of such Limited Partner's admission to this Partnership, unless the General
Partner otherwise determines in its discretion:

7
<PAGE> 12
(i) The remaining principal and accrued interest on any loans
owed by the Limited Partner under subparagraph (b) hereof shall be
immediately due and payable;

(ii) The right of the Limited Partner to any distributions of
assets of the Partnership under Section 3.05 shall terminate; and

(iii) The Limited Partner shall be required to withdraw from
the Partnership in accordance with Section 4.03 and such Limited
Partner's interest shall be liquidated under Section 4.04 or
purchased by the General Partner on equivalent terms for retransfer to
one or more substituted Limited Partners under Section 5.02 and the
proceeds of such liquidation or purchase shall be applied to payment of
the remaining principal and accrued interest of any loans owed by the
Limited Partner under subparagraph (b) hereof before any payment or
distribution thereof is made to the Limited Partner.

SECTION 3.02. Capital Accounts. A separate capital account (each, a
"Capital Account") shall be established for each Partner and shall be maintained
in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv),
and this Section 3.02 shall be interpreted and applied in a manner consistent
therewith. Whenever the Partnership would be permitted to adjust the Capital
Accounts of the Partners pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(f) Partnership shall so adjust the Capital Accounts of the
Partners. In any event, the Partnership shall adjust the Capital Accounts of the
Partners annually, and upon the admission of a new Partner or the withdrawal of
an existing Partner, to reflect revaluations of Partnership property in
accordance with Article VIII. Whenever the Capital Accounts of the Partners are
adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to
reflect revaluations of Partnership property, (i) the Capital Accounts of the
Partners shall be adjusted in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain or loss, as computed for book purposes in accordance with Article VIII,
with respect to such property, and (ii) the Partners' distributive shares of
depreciation, depletion, amortization and gain or loss, as computed for tax
purposes, with respect to such property shall be determined so as to take
account of the variation between the adjusted federal income tax basis and book
value of such property in the same manner as under Code Section 704(c).

SECTION 3.03. Deficit Capital Accounts. It upon the liquidation of the
General Partner's interest in the Partnership the General Partner has a deficit
balance in its Capital Account, the General Partner shall contribute to the
Partnership an amount equal to such deficit balance. Any such contribution shall
be made by the General Partner no later than the end of the taxable year of the
Partnership during which such liquidation occurs (or, if later, within ninety
(90) days after such liquidation). This Section 3.03 is intended to comply with
the requirements of Treasury Regulations

8
<PAGE> 13
Section 1.704-1(b)(2)(ii)(b)(3) and shall be interpreted and applied in a manner
consistent therewith.

SECTION 3.04. Allocations.

(a) Book Items. Items of income, gain, deduction and loss as computed
for book purposes (including any such items resulting from any revaluation of
property under Section 3.02) for any fiscal year or portion thereof shall be
allocated among the Partners pro rata in proportion to the Capital Account
balances of the Partners.

(b) Tax Items. Items of income, gain, deduction and loss, as computed
for federal income tax purposes, shall be allocated in the same manner as under
Code Section 704(c).

(c) Allocations on Withdrawal. If a Limited Partner's interest in the
Partnership is liquidated by the Partnership pursuant to Section 4.04 and the
Limited Partner receives less than the amount of the balance in his/her Capital
Account, then the excess of (i) the balance in his/her Capital Account over (ii)
the amount distributed by the Partnership shall be allocated among all the
remaining Partners in proportion to their Capital Account balances. This
provision shall be applied so as to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(q). Further, notwithstanding
sections 3.02 and 9.01(b), if a Limited Partner's interest is purchased by the
General Partner pursuant to Section 3.01(c)(iii) and the purchase price is less
than the balance of the Capital Account of the Limited Partner, then (i) the
excess of (x) the balance in the Limited Partner's Capital Account over (y) the
amount paid by the General Partner shall be allocated among all the remaining
Partners in proportion to their Capital Account balances and (ii) the General
Partner (and any assignee of the General Partner) shall have a Capital Account
balance with respect to the purchased interest in the Partnership equal to the
purchase price paid by the General Partner.

9
<PAGE> 14
sufficient to eliminate, to the extent required by the Treasury Regulations,
such deficit balance as quickly as possible. This Section 3.04(d) is intended
to comply with the alternate test for economic effect set forth in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in
a manner consistent therewith.

(e) General Partner Nonrecourse Debt. If a Partner makes a nonrecourse
loan to the Partnership which is "partner nonrecourse debt" within the meaning
of Treasury Regulations Section 1.704-2(b)(4), then any item of Partnership
loss, deduction or Code Section 705(a)(2)(B) expenditure that is attributable to
such debt shall be allocated to such Partner and appropriate items of income
and gain shall be "charged back" to such Partner. This Section 3.04(e) is
intended to comply with Treasury Regulations Section 1.704-2(i) and shall be
interpreted and applied in a manner consistent herewith.

(f) Curative Allocations. The allocations set forth in Sections 3.04(d)
and 3.04(e) (the "Regulatory Allocations") are intended to comply with the
requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and Treasury
Regulations Section 1.704-(2)(i), respectively. Notwithstanding any other
provisions of this Section 3.04 (other than the Regulatory Allocations), the
Regulatory Allocations shall be taken into account in allocating other items of
income, gain, deduction and loss among the Partners, pursuant to Sections
3.04(a) and 3.04(c), so that, to the extent possible, the net amount of such
allocations of other items and the Regulatory Allocations to each Partner shall
be equal to the net amount that would have been allocated to each such Partner
if the Regulatory Allocations had not occurred.

SECTION 3.05. Distributions to Partners.

(a) Distributions to Partners.

(i) It shall be within the sole discretion of the General
Partner as to whether, when and in what amount a distribution of cash
or other assets of the Partnership shall be made. Such distributions
(other than a distribution made in connection with the withdrawal of a
Partner under Article IV) shall be made to all of the Partners in the
ratio that their respective Capital Accounts bear to one another at the
time of the distribution.

(ii) The General Partner may, but shall not be required to,
make annual distributions to each Partner in an amount which the
General Partner estimates is sufficient to pay federal and state income
taxes attributable to allocations under Section 3.04(b).
Notwithstanding Section 3.05(a)(i), any distributions made pursuant to
this Section 3.05(a)(ii) shall be made to the Partners in proportion to
the excess

10
<PAGE> 15
of cumulative income and gain over cumulative deductions and losses
allocated to each of the Partners pursuant to Section 3.04(b).

(c) Repayment of Distributions. Partners shall be required to
repay Partnership distributions to the extent provided in the ULPA.

SECTION 3.06. No Interest on Capital. No Partner shall be entitled to
receive interest from the Partnership on his/her Capital Account.

ARTICLE IV - Withdrawal of Limited Partner

SECTION 4.01. Withdrawal or Limited Partner. Except as otherwise
provided in Section 4.03 hereof, no Limited Partner shall be permitted to
withdraw from the Partnership until his interest in the Partnership is vested
under paragraph 3.01(c) and then only with the approval of the General Partner,
which approval may be withheld if the General Partner does not believe that such
withdrawal is in the best interests of the other Limited Partners, whether
because of the cash position of the Partnership, the undesirability of
liquidating any of the investments of the Partnership, or otherwise. The
following provisions shall govern with respect to any withdrawals approved by
the General Partner:

(a) No such withdrawal shall be made except as of the last day
of a fiscal year of the Partnership;

(b) Partial withdrawals shall not be permitted and a Partner
desiring to withdraw must withdraw his/her entire interest in the
Partnership;

(c) The Partner desiring to withdraw must notify the General
Partner in writing at least sixty (60) days prior to the close or the
fiscal year in which such Partner wishes to effect his/her withdrawal;
and

(d) The General Partner may, if necessary to accommodate a
request for withdrawal by a Limited Partner, attempt to obtain a
purchaser of the whole or a part of such Limited Partner's interest.

<PAGE> 16
Partner of the happening of any of such events become an assignee of such
Limited Partner's interest subject to all of the terms of this Agreement as then
in effect. Such legal representative may not withdraw from the Partnership
except in accordance with Section 4.01. If the General Partner does not approve
withdrawal of the interest of such legal representative, the General Partner
will use its best efforts, without legal obligation, to find another person,
suitable to the General Partner, willing to assume the Partnership interest of
such legal representative.

SECTION 4.03. Mandatory Withdrawal. Unless the General Partner
otherwise determines, an individual Limited Partner shall be required to
withdraw from the Partnership upon the termination of his/her employment by TAH
and its affiliates prior to the vesting of his/her interest under paragraph
3.01(c), except for a termination by reason of normal retirement under the
employer's policies, death or disability, and such Limited Partner's Partnership
interest shall be liquidated under Section 4.04 or purchased by the General
Partner for retransfer to substituted Limited Partners under Section
3.01(c)(iii).

SECTION 4.04. Liquidating Share. In the event any Limited Partner shall
withdraw or be required to withdraw in accordance with the provisions of this
Article IV, there shall be paid to such Limited Partner or his/her legal
representative within 60 days after the last day of the fiscal year of the
Partnership which constitutes the effective date of withdrawal, an amount equal
to such Partner's positive Capital Account balance as of the effective date of
withdrawal; provided, however, that in the event of a mandatory withdrawal under
Section 4.03, such Partner shall be paid an amount equal to the lesser of (i)
his/her Capital Contribution(s) less distributions paid to such Partner prior to
the withdrawal date, other than distributions paid under Section 3.05(a)(ii), or
(ii) his/her positive Capital Account balance.

ARTICLE V - Transfer of Partnership Interests

SECTION 5.01. Assignability of Interests.

(a) Subject to the provisions or Section 4.02 hereof, the
interest of a Limited Partner shall not be assignable without the prior
written consent of the General Partner. No assignment shall be binding
upon the Partnership until the General Partner receives an executed
copy of such assignment in form and substance satisfactory to the
General Partner. The assignee of such interest may become a substituted
Limited Partner only upon the terms and conditions of Sections 5.02 and
9.01.

12
<PAGE> 17
(b) The interest of the General Partner shall not be
assignable; provided, however, that in no event shall the interest of
the General Partner be reduced below a 1% interest in the Capital
Accounts of the Partners and that such interest may be assigned to a
successor to all or substantially all of the business of the General
Partner the Voting Control of which is held by those persons then
holding Voting Control of the General Partner upon (i) the execution by
the General Partner of a written assignment, the execution by the
successor of this Agreement, and the written assumption by the
successor of the obligations of the General Partner hereunder; and (ii)
the receipt by the Partnership of an opinion of counsel that such
assignment and assumption will not result in the Partnership being
classified as an association for Federal income tax purposes. In the
event of such assignment, the successor shall become the General
Partner hereunder, and the predecessor and successor General Partner
shall cause the execution of any necessary papers including, without
limitation, an amendment to the Certificate of Limited Partnership to
record the substitution of the successor as General Partner.

SECTION 5.02. Substituted Limited Partners. No Limited Partner shall
have the right to substitute an assignee as a Limited Partner in his/her place.
The General Partner shall have the right, in its discretion, to admit as a
substituted Limited Partner any person, firm or corporation acquiring a
partnership interest by assignment from another Limited Partner or from the
General Partner. The admission of an assignee as a substituted Limited Partner
shall be conditioned upon the assignee's written assumption of all obligations
of the assigning Limited Partner and execution of this Agreement as a Limited
Partner. Upon acceptance of a substituted Limited Partner, the General Partner
shall forthwith amend the Certificate of Limited Partnership and any other
necessary papers to show the substitution of such assignee in place of the
assigning Limited Partner. The General Partner's failure or refusal to admit an
assignee as a substituted Limited Partner shall not affect the right of such
assignee to receive the share of profits or other distribution or compensation
to which its assignor would otherwise be entitled.

ARTICLE VI - Duration and Termination of Partnership

13
<PAGE> 18
Accounts of all the Limited Partners, the Partnership may be terminated at any
time after its first full fiscal year.

SECTION 6.03. Withdrawal of General Partner.

(a) The General Partner may withdraw at any time after
February 28, 2000 by giving 90 days prior written notice to the other
Partners. If Limited Partners whose Capital Accounts constitute in
excess of 66 2/3% of all Capital Accounts consent in writing executed
within such 90-day period to the continuation of the Partnership and
elect a new General Partner, the Partnership shall not terminate but
shall continue in existence as though no such withdrawal or filing had
occurred, except that the new General Partner shall be substituted for
the former General Partner. Any Limited Partner who does not consent to
such continuation shall have the right to withdraw by giving notice
within 90 days after having been notified of the continuation of the
Partnership and shall be paid in the manner set forth in Section 4.04.

(b) In the event that the Limited Partners shall have
determined to continue the Partnership, the former General Partner (or
its representative, successors or assigns) shall become a Limited
Partner of the Partnership upon the effective date of such continuation
to the extent of its then interest in the Partnership as a General
Partner. Thereafter, except as otherwise provided below, such former
General Partner (or its representative) shall be treated as a Limited
Partner for all purposes of this Agreement, shall have all of the
rights and obligations of a Limited Partner hereunder, including the
right to receive allocations and distributions on the same basis as all
other Limited Partners, and shall not be entitled to receive any
further allocations or distributions to which the General Partner is
entitled hereunder. Upon becoming a Limited Partner, such former
General Partner's Capital Account and Capital Commitment shall
initially be the same as they were on the effective date of such
continuation. Once the General Partner ceases to be such for whatever
reason and becomes a Limited Partner hereunder, such former General
Partner will no longer be personally liable with respect to Partnership
liabilities arising out of events and transactions occurring after its
termination as General Partner (i.e., its Capital Account will be
debited for its share, if any, as Limited Partner of the losses and
expenses arising out of such liabilities but it will not be required to
make additional contributions to the Partnership to satisfy such
liabilities). However, a former General Partner will remain personally
liable for all Partnership liabilities arising out of events and
transactions occurring prior to such former General Partner's
termination as General Partner (i.e., its Capital Account will be
debited for its share of losses

14
<PAGE> 19
and expenses arising out of such liabilities and it will be required to
make additional contributions to the Partnership to the extent of a
deficit in its Capital Account due to such liabilities arising out of
events and transactions occurring prior to its termination).

SECTION 6.05. Distribution Upon Termination. Upon liquidation of the
Partnership, the assets of the Partnership remaining after the payment, or
reasonable provision therefor, of all Partnership liabilities (and the
establishment of reasonable reserves for contingent liabilities) shall be
distributed to the Partners in proportion to and to the extent of the positive
balances of their respective Capital Accounts. This Section 6.05 is intended to
comply with the requirements of Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2) and shall be interpreted and applied in a manner
consistent therewith.

ARTICLE VII - Reports to Partners

SECTION 7.02. Annual Reports. Within one hundred twenty (120) days
after the end of each fiscal year and upon liquidation of the Partnership, the
General Partner shall prepare and mail to each Partner and to each former
Partner who withdrew during the applicable fiscal year or its legal
representative, a report stating in sufficient detail such transactions effected
by the Partnership during such fiscal year as shall enable such Partner or
former Partner or the legal representative of such former Partner to prepare its
respective income tax returns, including:

15
<PAGE> 20
(a) such Partner's Capital Account balance as of the close of
such fiscal year;

(b) the sum of the Capital Account balances as of such date of
all the Partners;

(d) profit and loss statement;

(e) statement of holdings of Securities of the Partnership;

(f) a description of the nature of each of the Partnership's
investments, the cost thereof and the valuation thereof established
pursuant to Article VIII; and

ARTICLE VIII - Valuation

SECTION 8.01. Valuation of Partnership Net Worth. In determining the
net worth of the Partnership, the value of any Partnership asset, the Capital
Accounts of the Partners, the value of any distribution, or in determining value
for any other purpose under this Agreement, the provisions of this Article VIII
shall apply.

SECTION 8.02. Valuation Date. Valuation shall be determined by the
General Partner as of the close of business on the Market Day preceding the last
day of each fiscal year of the Partnership or as of the close of business on the
date with respect to which valuation is to be taken, or if such day is not a
Market Day, then on the Market Day next preceding such date, as the case may be.
A Market Day shall be a day on which the New York Stock Exchange is open for
regular trading. If a valuation is taken

16
<PAGE> 21
other than in connection with the annual reports described in Section 7.02, the
General Partner shall give notice of such valuation to the Limited Partners
promptly after it is determined.

SECTION 8.03. Valuing Securities and Other Assets. The following
provisions shall apply in valuing the assets of the Partnership:

(a) Listed Securities which are not restricted as to
saleability or transferability shall be valued at the closing price as
of the Valuation Date. If any listed Security was not traded on such
date, then the mean of the closing high bid and low asked prices as of
the close of business on such date shall be used.

(b) Unlisted securities which are readily marketable shall be
valued at the mean of the closing bid and asked prices as of the
Valuation Date.

(c) Securities, whether listed or unlisted, for which market
quotations are available, but which are restricted as to saleability or
transferability, shall be valued as provided in (a) and (b) above, less
a discount of from ten percent (10%) to twenty-five percent (25%) of
the value thereof as determined in good faith by the General Partner.
In determining the amount of such discount the General Partner shall
give consideration to the nature and length of such restriction and the
relative volatility of the market price of such Security.

(d) Securities for which market quotations are not readily
available and all other assets of the Partnership shall be valued at a
fair value as determined in good faith by the General Partner.

(f) Liabilities shall include, in addition to those recorded
on the books of the Partnership, such other accrued or contingent
liabilities as shall be determined in accordance with generally
accepted accounting principles.

(g) In determining the value of the interest of any Partner in
the Partnership, neither the goodwill nor the right to use the firm
name or trade name of the Partnership shall be considered as an asset
of the Partnership.

ARTICLE IX - Miscellaneous

17
<PAGE> 22
(a) Additional Limited Partners. Additional Limited Partners
may be admitted in the discretion of the General Partner as of the
first day of July or the first day of January of any year and the
interest of such additional Limited Partner in the Partnership shall be
established by creating a Capital Account for such additional Limited
Partner as of that day in an amount equal to the contribution made by
such additional Limited Partner to the Partnership.

(b) Substituted Limited Partners. Substituted Limited Partners
may also be admitted in the discretion of the General Partner by
assignment or transfer of the interest of a Limited Partner or the
General Partner in accordance with Article V or Sections 3.01(c)(iii),
4.01(d) or 4.02, in which case the substituted Limited Partner will
take over the Capital Account of his assignor or transferor.

(c) Procedure. The admission of a new Limited Partner, whether
an additional Limited Partner or a substituted Limited Partner, shall
be accomplished in accordance with the following procedures: Each
Limited Partner so admitted shall (i) sign a counterpart copy of this
Agreement, which shall be accepted by its execution by the General
Partner, as well as any other documents required by the General
Partner, and (ii) make payment of his/her Capital Commitment, or
purchase price in the case of a substituted Limited Partner, as
determined by the General Partner, and (iii) an amendment to the
Partnership's Certificate of Limited Partnership shall be filed to
reflect such addition. Each such new Limited Partner shall thereafter
be entitled to and subject to all the rights and liabilities of Limited
Partners as set forth herein.

SECTION 9.02. Disputed Matters. Any controversy or dispute out of this
Agreement, interpretation of any of the provisions hereof, or the actions of the
General or Limited Partners hereunder shall be submitted to arbitration before
the National Association of Securities Dealers, Inc. ("NASD") under the rules
then obtaining of the NASD. If the NASD refuses to accept jurisdiction of the
matter, then the dispute shall be submitted to arbitration before the American
Arbitration Association under the rules then obtaining of said Association. Any
such arbitration shall be held in Boston, Massachusetts, and judgment upon any
award thus obtained may be entered in any court having jurisdiction thereof. In
any such arbitration each party to the arbitration shall bear its own expenses,
including expenses of attorneys, financial experts and other witnesses; and any
arbitration fees and expenses of the arbitrators shall be divided equally
between the disputing parties.

<PAGE> 23
as of the effective date of their distribution to or on behalf of the Partner or
the Partner's legal representatives and the decisions of the General Partner
with respect to in-kind payments, including decisions with respect to selection,
apportionment and valuation of Securities or other property, shall be conclusive
and binding upon all Partners.

SECTION 9.05. Notices.

(a) To the Partners. Any notice to be given hereunder by the
Partnership to any Partner shall be in writing and signed by the
General Partner. Any such notice shall be conclusively deemed to have
been given if either delivered in person to such Partner or mailed by
registered or certified mail to such Partner at such Partner's address
set forth in Exhibit A. Any Partner may change their address for notice
by written notice to the Partnership.

(b) To the Partnership. Any notice to be given hereunder to
the Partnership shall be in writing and signed by the Partner giving
notice. Any such notice shall be conclusively deemed to have been given
if delivered in person or mailed by registered or certified mail,
postage prepaid to the General Partner at its address set forth in
Exhibit A, or such other address as the General Partner may from time
to time designate by notice to all Partners.

SECTION 9.07. Force Majeure. Whenever any act or thing is required of
the Partnership hereunder within any specified period of time, the Partnership
shall be entitled to such additional period of time to do such acts or things as
shall equal any period of delay resulting from causes beyond the reasonable
control of the Partnership, including, without limitation, bank holidays,
actions of governmental agencies, closing the

19
<PAGE> 24
New York Stock Exchange at times other than normal closing dates, and financial
crises of a nature materially affecting the purchase and sale of Securities.

SECTION 9.08. Amendments. Except as otherwise specifically provided
herein, the terms and provisions of this Agreement may be modified or amended at
any time and from time to time only with the written consent of (1) the General
Partner and (2) Limited Partners (excluding TAH) representing in excess of fifty
percent (50%) of the combined Capital Accounts of all Limited Partners insofar
as is consistent with the laws governing this Agreement; provided, however, that
without the specific written consent of each Partner adversely affected thereby
no such modification or amendment shall (i) increase the obligation of a Limited
Partner beyond that set forth in Section 1.04, (ii) reduce the Capital Account
of any Partner or its rights to distribution and withdrawal with respect
thereto; or (iii) amend Section 1.05 to permit Partnership activities which
would subject a Limited Partner to Federal or state taxation which such Partner
would not be subject to in the absence of such activity. Without unanimous
consent no amendment or modification may be made (x) which would cause the
Partnership to cease to be a Limited Partnership under applicable state law or
(y) which would amend this Section 9.08.

SECTION 9.10. Power of Attorney. Each Limited Partner does hereby
constitute and appoint John H. Goldsmith, Kevin J. McKay and Dennis O'Connor and
each of them, its true and lawful representative, in its name, place and stead,
to make, execute, sign, acknowledge, deliver and file all such instruments,
documents and certificates which may from time to time be required by the laws
of the United States of America, the Commonwealth of Massachusetts, or any other
state in which the Partnership shall determine to do business, or any political
subdivision or agency thereof, to effectuate, implement and continue the valid
and subsisting existence of the Partnership, including, without limitation, a
Certificate of Limited Partnership and amendments thereto and any such
certificate or amendment filed for the purpose of admitting the undersigned as
Limited Partners of the Partnership.

20
<PAGE> 25
IN WITNESS WHEREOF, the General Partner and the Limited Partners have
hereunto set their hands and seals as of the date first set forth above.

GENERAL PARTNER

Tucker Anthony Holding Corporation

By:_________________________________________

LIMITED PARTNER

____________________________________________

____________________________________________
(Print Name)

S.S.#_______________________________________

Allocation Accepted: $______________________

STATE OF )
) ss:
COUNTY OF )

Then personally appeared before me _____________________, known to me,
and acknowledged the same to be his/her free act and deed.

____________________________________________
Notary

21
<PAGE> 26
EXHIBIT A

General Partner
---------------

Capital
Name Address Contribution
- - - - - - - - - - - - - - - ---- ------- ------------

Tucker Anthony Holding One Beacon Street 1% of total
Corporation Boston, MA 02109 Capital as
General
Partner

Limited Partners
----------------

Capital
Name Address Contribution
- - - - - - - - - - - - - - - ---- ------- ------------

$
---------

22
<PAGE> 27
TA INCENTIVE PLAN 3
INVESTMENT ANALYSIS 12/18/97

<TABLE>
<CAPTION>
BATTERY STOLBERG TECHNOLOGY (40%)
SUMMIT III ADVENT VII VENTURES III PARTNERS LP LEADERS II SUMMIT IV TOTAL
---------- ---------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMITTED $1,000,000 $600,000 $1,000,000 $1,000,000 $1,000,000 $ 400,000 $5,000,000

CONTRIBUTED 1992 $ 100,000 $ 100,000

CONTRIBUTED 1993 $ 300,000 $ 60,000 $ 360,000

CONTRIBUTED 1994 $ 200,000 $180,000 $ 125,000 $ 170,000 $ 675,000

CONTRIBUTED 1995 $ 250,000 $ 90,000 $ 325,000 $ 100,000 $ 400,000 $ 40,000 $1,205,000

CONTRIBUTED 1996 $210,000 $ 375,000 $ 330,000 $ 250,000 $ 120,000 $1,285,000

CONTRIBUTED 1997 $ 50,000 $ 60,000 $ 100,000 $ 225,000 $ 150,000 $ 120,000 $ 705,000
========== ======== ========== ========== ========== ========== ==========
REMAINING COMMITMENT $ 100,000 $ 0 $ 75,000 $ 175,000 $ 200,000 $ 120,000 $ 670,000
</TABLE>

<PAGE> 1
EXHIBIT 10.16

TAMM II INCENTIVE PLAN

LIMITED PARTNERSHIP

LIMITED PARTNERSHIP AGREEMENT

<PAGE> 2
TABLE OF CONTENTS

Page Number
-----------

ARTICLE I General Provisions ................................ 1

Section 1.01 Definitions ......................................... 1
(a) Agreement ................................................ 1
(b) Capital Account .......................................... 1
(c) Capital Commitment ....................................... 1
(d) Capital Contribution ..................................... 1
(e) Certificate of Limited Partnership ....................... 1
(f) General Partner .......................................... 2
(g) Limited Partner .......................................... 2
(h) Net Gain and Net Loss .................................... 2
(i) Partner .................................................. 3
(j) Partnership .............................................. 3
(k) Securities ............................................... 3
(l) TAH ...................................................... 3
(m) ULPA ..................................................... 3
(n) Voting Control ........................................... 3
Section 1.02 Partnership Name .................................. 3
Section 1.03 Fiscal Year ....................................... 3
Section 1.04 Nature and Liability of Partners .................. 3
Section 1.05 Purposes of Partnership ........................... 4
Section 1.06 Powers of Partnership ............................. 4
Section 1.07 General Partner as Limited Partner ................ 5

ARTICLE II Management of Partnership ......................... 5

Section 2.01 General ........................................... 5
Section 2.02 Services of General Partner ....................... 5
Section 2.03 Compensation of General Partner ................... 5
Section 2.04 Restrictions ...................................... 6
Section 2.05 Reliance by Third Parties ......................... 7
Section 2.06 Partner's Transactions ............................ 7
Section 2.07 Exculpation of Liability .......................... 7
Section 2.08 Indemnification ................................... 7

ARTICLE III Capital Accounts; Distributions;
Profits and Losses .............................. 8

Section 3.01 Capital Contributions ............................. 8
Section 3.02 Capital Accounts .................................. 10
Section 3.03 Allocation of Gains and Losses .................... 10
Section 3.04 Distributions to Partners ......................... 10
Section 3.05 No Interest on Capital ............................ 11

(i)
<PAGE> 3
Page Number
-----------

ARTICLE IV Withdrawal of Profits, Gains
or Capital ...................................... 12

Section 4.01 Withdrawal of Profits, Gains
or Capital ...................................... 12
Section 4.02 Legal Representatives .............................. 12
Section 4.03 Mandatory Withdrawal ............................... 13
Section 4.04 Liquidating Share .................................. 13
Section 4.05 Cessation of Participation ......................... 13

ARTICLE V Transfer of Partnership Interests .................. 13

Section 5.01 Assignability of Interests ......................... 13
Section 5.02 Substituted Limited Partners ....................... 14
Section 5.03 Obligations of Assignee ............................ 14

ARTICLE VI Duration and Termination of
Partnership ..................................... 14

Section 6.01 Duration ........................................... 14
Section 6.02 Withdrawal of Limited Partner ...................... 15
Section 6.03 Withdrawal of General Partner ...................... 15
Section 6.04 Liquidation ........................................ 16
Section 6.05 Distribution Upon Termination ...................... 16

ARTICLE VII Reports to Partners ................................ 17

Section 7.01 Financial Records .................................. 17
Section 7.02 Annual Reports ..................................... 17
Section 7.03 Inspection ......................................... 18
Section 7.04 Tax Returns ........................................ 18

ARTICLE VIII Valuation .......................................... 18

Section 8.01 Valuation of Partnership Net Worth ................. 18
Section 8.02 Valuation Date ..................................... 18
Section 8.03 Valuing Securities and Other Assets ................ 19

ARTICLE IX Miscellaneous ...................................... 20

Section 9.01 Admission of Limited Partners ...................... 20
Section 9.02 Disputed Matters ................................... 20
Section 9.03 Payments in Kind ................................... 21
Section 9.04 General ............................................ 21
Section 9.05 Notices ............................................ 21

(ii)
<PAGE> 4
Page Number
-----------

Section 9.06 Execution of Certificate of Limited
Partnership and Other Documents ................... 22
Section 9.07 Force Majeure ....................................... 22
Section 9.08 Amendments .......................................... 22
Section 9.09 Headings ............................................ 22
Section 9.10 Power of Attorney ................................... 22

EXHIBIT A ..................................................... 24

(iii)
<PAGE> 5
TAMM II

INCENTIVE PLAN LIMITED PARTNERSHIP

LIMITED PARTNERSHIP AGREEMENT

BY THIS LIMITED PARTNERSHIP AGREEMENT made and entered into as of April
8, 1984, Tucker Anthony Holding Corporation, a corporation organized under the
laws of the Commonwealth of Massachusetts, as general partner, and those persons
and entities executing this Agreement or counterparts thereof and listed on
Exhibit A (as it may be amended from time to time) as limited partners, hereby
form a limited partnership pursuant to the laws of the Commonwealth of
Massachusetts.

ARTICLE I

General Provisions

SECTION 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a) Agreement. "Agreement" means this Limited Partnership Agreement as
it may from time to time be amended.

(b) Capital Account. "Capital Account" means, as to any Partner, the
capital account maintained on the books of the Partnership for such Partner, as
adjusted from time to time as hereinafter provided.

(c) Capital Commitment. "Capital Commitment" means the total amount of
the money paid and agreed to be paid to the Partnership by each Partner as set
forth on the signature page hereof or counterpart thereof and reflected on
Exhibit A hereto.

(d) Capital Contribution. "Capital Contribution" means the amount of
money at any given time which each Partner shall have actually paid to the
Partnership as part or all of his Capital Commitment.

(e) Certificate of Limited Partnership. The "Certificate of Limited
Partnership" means the certificate of limited partnership for the Partnership
and all amendments thereto required under the laws of the Commonwealth of
Massachusetts to be signed and sworn to by the Partners of the Partnership and
filed for recording in the appropriate public offices within the Commonwealth of
Massachusetts to perfect or maintain the Partnership as
<PAGE> 6
a limited partnership under the laws of the Commonwealth of Massachusetts and/or
to effect the admission, withdrawal or substitution of any Partner of the
Partnership.

(g) Limited Partner. "Limited Partner" means any person who is or shall
become a Limited Partner of the Partnership.

(h) Net Gain and Net Loss.

(i) "Net Gain" means, with respect to any fiscal period, the
net income of the Partnership determined in accordance with the same
principles employed in determining the Partnership's taxable income for
purposes of the United States Federal income tax, taking into account
the full amount of any recognized gains attributable to the sale or
exchange of Securities or other assets. For purposes of this
computation, taxable income shall include every item requiring separate
computation under Section 702(a) of the Internal Revenue Code of 1954
as the same may be amended from time to time, plus income which is
exempt from federal income tax.

(ii) "Net Loss" means, with respect to any fiscal period, the
net loss of the Partnership determined in accordance with the same
principles employed in determining the Partnership's taxable income for
purposes of the United States Federal income tax by taking into account
all items of expense, including the full amount of any recognized
losses attributable to the sale or exchange of Securities or other
assets. For purposes of this computation, taxable income shall include
every item requiring separate computation under Section 702(a) of the
Internal Revenue Code of 1954, as the same may be amended from time to
time.

(iii) The following rules shall apply in determining Net Gain
and Net Loss:

(A) Profit or loss on the sale or exchange of Partnership
property shall be included in the determination of Net
Gain and Net Loss when realized in accordance with the
United States Internal Revenue Code and when deemed
realized pursuant to the provisions of Sections 3.04 and
6.05 hereof.

2
<PAGE> 7
(B) Profit or loss on the sale of Partnership property shall be
determined, to the extent applicable, on the first in, first out
("FIFO") method.

(i) Partner. "Partner" means the General Partner or any Limited
Partner.

(j) Partnership. "Partnership" means TAMM II Incentive Plan Limited
Partnership, a Massachusetts limited partnership.

(k) Securities. "Securities" means securities of every kind or
description.

(l) TAH. "TAH" means Tucker Anthony Holding Corporation, a
Massachusetts corporation. The subsidiaries of TAH shall include all
corporations and partnerships over which TAH or any of its subsidiaries have
Voting Control.

(m) ULPA. "ULPA" means the Massachusetts Uniform Limited Partnership
Act, as amended from time to time.

(n) Voting Control. "Voting Control" means the right to vote 50% or
more of the securities having the right to elect the directors of a corporation
or the right to designate a majority of the general partners of a partnership.

SECTION 1.02. Partnership Name. The Partnership shall do business under
the name and style of "TAMM II Incentive Plan Limited Partnership," or such
other name as the General Partner may designate.

SECTION 1.03. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year, or such other fiscal year as the General Partner shall
designate.

SECTION 1.04. Nature and Liability of Partners. The General Partner
shall have such liability for the repayment, satisfaction and discharge of the
debts, liabilities and obligations of the Partnership as is provided by the ULPA
for a general partner of a limited partnership. The Limited Partners who execute
this Agreement or are otherwise admitted as Limited Partners shall be liable to
the Partnership for the repayment, satisfaction and discharge of its debts,
liabilities and obligations only (i) to the extent of the unpaid portion of
their respective Capital Commitments and (ii) to the extent provided in Section
38 of the ULPA.

3
<PAGE> 8
their respective Capital Commitments. The General Partner agrees to assume and
be liable for all such losses, liabilities and expenses not covered by the
aggregate Capital Commitments of the Partners.

SECTION 1.05. Purposes of Partnership. The purposes of the Partnership
are to make investments in the Securities of publicly and privately held
businesses, including those in the development stage, or in investment
partnerships or companies formed for the purpose of investing in such
businesses, in order to provide incentives to branch managers of subsidiaries of
TAH who are given the opportunity to participate as Limited Partners in the
Partnerships. Limited Partnership interests shall be allocated initially by TAH
based on the contributions of such managers to the business of TAH and its
subsidiaries and shall be subject to future vesting, redemption and other
provisions hereof which relate to the continued service of such managers.

SECTION 1.06. Powers of Partnership. In furtherance of the purposes of
the Partnership set forth in Section 1.05, the Partnership shall have the
following powers:

4
<PAGE> 9
(e) To form and own one or more corporations, trusts or limited
partnerships, provided that no entity so formed may do directly or
indirectly what the Partnership is prohibited by this Agreement from
doing; and

(f) To enter into, make and perform all such contracts, agreements
and other undertakings as may be necessary or advisable or incident to the
carrying out of the foregoing objects and purposes.

SECTION 1.07. General Partner as Limited Partner. The General Partner may
also be a Limited Partner, and in such event its rights, powers, restrictions
and liabilities as a General Partner shall remain unaffected, and in addition,
it shall, in respect of its interest as a Limited Partner, have all of the
rights and powers and be subject to all of the restrictions and liabilities of a
Limited Partner.

ARTICLE II

Management of Partnership

SECTION 2.01. General. The management, operation and policy determinations
of the Partnership shall be, and hereby are, vested in the General Partner who
shall manage the Partnership's affairs. Except as otherwise expressly provided
herein, the General Partner shall have the power to exercise the powers, rights
and authority granted to the General Partner hereunder on behalf and in the name
of the Partnership.

SECTION 2.02. Services of General Partner. The General Partner shall (i)
provide investment advice to the Partnership and shall bear the cost of securing
information with respect to prospective investments, (ii) maintain the books and
records of the Partnership, (iii) provide routine bookkeeping and recordkeeping
services and custody of Partnership securities, and (iv) provide office space,
office and executive staff, and office supplies and equipment for the use of the
Partnership. The General Partner shall be required to devote only such time as
is necessary to perform such services and to supervise the activities of the
Partnership, and directly or through its parent or subsidiaries it may engage or
invest in other businesses and activities of every nature, including those
competitive with the activities of the Partnership, without the Partnership or
any Partner having any right by virtue of this Agreement to an interest in such
other businesses or activities or any profits thereof.

SECTION 2.03. Compensation of General Partner.

(a) No Management Fee. The General Partner shall not receive any
fees or compensation from the Partnership for its services to the
Partnership.

5
<PAGE> 10
(b) Expenses. The General Partner shall be reimbursed from the
Partnership for all reasonable expenditures made on behalf of the
Partnership or incurred incident to the operation of the Partnership,
including, without limitation, all legal, consulting and audit expenses
incurred in the organization of the Partnership, preparing any amendment
to the Partnership Agreement, and performing any other legal and audit
services for the Partnership, interest expenses, and brokerage fees,
commissions and discounts incurred in connection with the purchase or sale
of Securities, and other out-of-pocket expenses incurred in connection
with the making and monitoring of the Partnership investments and the
administration of the Partnership.

SECTION 2.04. Restrictions. Partners shall be restricted in their
activities as follows:

(a) No Services by Limited Partners. The Limited Partners shall
not participate in the management of the Partnership and shall not hold
themselves out as General Partners or take any action on behalf of the
Partnership or in any way commit the Partnership to any agreement or
contract and shall have no right or authority to do any of the foregoing.

(b) Partnership Credit. No Partner shall lend or use the funds or
credit of the Partnership or employ the Partnership's name for any purpose
whatsoever, except that the General Partner may do so for the purposes of
the Partnership or as permitted by paragraph (c) of this Section.

(i) If in the reasonable judgment of the General Partner it
is desirable to do so to accomplish the purposes of the
Partnership, the Partnership may borrow money from banks or other
recognized financial institutions and secure payment of any such
borrowing by hypothecation or pledge of Partnership properties or
otherwise provided that (A) any such borrowing has an original
maturity of less than one year and (B) the aggregate of all
indebtedness of the Partnership for money borrowed outstanding at
any one time does not exceed 5% of the sum of the Capital
Commitments of all Partners.

(ii) The Partnership may guarantee the obligations of others
provided that the amount guaranteed, together with any amount
borrowed, shall at no time exceed the limitation set forth in
clause (i)(B) above.

(iii) Notwithstanding the foregoing, the Partnership may
borrow funds from TAH or its successors

6
<PAGE> 11
or assume obligations of Limited Partners to TAH or its successors
under the terms which the General Partner deems appropriate in
connection with the redemption or withdrawal under Article IV of the
interests of Limited Partners who have outstanding obligations to
TAH under paragraph 3.04(b).

(d) Additional Restrictions. The Partnership shall not make short
sales of Securities not owned by the Partnership.

SECTION 2.06. Partner's Transactions. Nothing in this Agreement shall be
construed to prohibit any Partner from buying or selling securities for its own
account, including securities of the same issuers as those held by the
Partnership.

SECTION 2.07. Exculpation of Liability. The General Partner shall not be
liable to the Partnership or any Limited Partner except for willful misconduct,
fraud or actions not taken in good faith by the General Partner in the
reasonable belief that it was acting in the best interests of the Partnership.

SECTION 2.08. Indemnification. The Partnership shall indemnify the General
Partner and its agents (including agents of the General Partner or agents of the
Partnership who serve at the request of the Partnership as directors, officers
or trustees of another organization in which the Partnership has any interest as
a security holder, creditor or otherwise) against all liabilities and expenses,
including, but not limited to, amounts paid in satisfaction of judgments, in
compromise settlements, and fines, penalties and counsel fees, reasonably
incurred in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or administrative
or legislative body, in which the General Partner or such agent(s) may be or
may have been involved as a party or otherwise or with which it or they may be
or may have been threatened, while in office or thereafter by reason of being or
having been such General Partner or such agent or serving or having served at
the request of the Partnership as such director, officer, or trustee; provided,
however, that indemnification shall not be paid hereunder with respect to any
matter as to which the General Partner or such agent(s) shall have been finally
adjudicated in any such action, suit or other proceeding to have committed
willful misconduct or fraud in the conduct of its office or to have failed to
act in good faith in the reason-

7
<PAGE> 12
able belief that it was acting in the best interests of the Partnership; and
provided, further, however, that neither the General Partner nor its agent(s)
shall be entitled to indemnification under this Section 2.08 in circumstances in
which Chapter 156B of the General Laws of the Commonwealth of Massachusetts
would not permit indemnification of officers or directors of the Partnership if
the Partnership were a Massachusetts corporation (assuming stockholders and
directors had taken all steps permitted by law to grant indemnification).
Expenses, including counsel fees, so incurred by the General Partner or such
agent(s) may be paid by the Partnership in advance of the final disposition of
any such action, suit or proceeding on the condition that the amounts so paid
shall be repaid to the Partnership if it is ultimately determined that
indemnification of such expenses is not authorized under this Section 2.08. As
to any matter disposed of by a compromise payment, pursuant to a consent decree,
voluntary settlement or otherwise, no such indemnification, either for said
payment or for any other expenses, shall be provided as to any matter to the
extent that the Partnership has obtained an opinion in writing of legal counsel
to the effect that the General Partner or any such agent failed to act in such
manner as would permit him to be indemnified hereunder.

The right of indemnification hereby provided shall not be exclusive of or
affect any other rights to which the General Partner or any such agent may be
entitled. As used in this Section 2.08, the terms "General Partner" and "agent"
include the officers and directors of the General Partner and their respective
heirs, executors, administrators, successors and assigns. Nothing contained in
this Section 2.08 shall limit any lawful rights to indemnification existing
independently of this Section.

The right of indemnification provided by this Section 2.08 shall not be
construed to increase the liability of Limited Partners as set forth in Section
1.04.

ARTICLE III

Capital Accounts; Distributions; Profits and Losses

SECTION 3.01. Capital Contributions.

(a) Contributions. On or prior to the date of his becoming a Limited
Partner of the Partnership, each Limited Partner shall pay to the
Partnership cash equal to his Capital Commitment as set forth on Exhibit
A. The General Partner's Capital Commitment shall be as set forth in
Exhibit A hereto and shall be payable to the Partnership within 30 days
after the date hereof. The Capital Contribution of the General Partner
shall at all times be not less than one percent (1%) of the aggregate of
all Capital Contributions of the Partners and the General Partner shall
make any additional Capital Contributions required to

8
<PAGE> 13
maintain such Capital Contribution of not less than one percent (1%). The
aggregate of all Capital Contributions shall be, and hereby is agreed to
be, available to the Partnership to carry out the purposes and objects of
the Partnership.

(b) Borrowing. Limited Partners may be given the opportunity prior
to the due date of any Capital Contribution, to borrow all or any part of
such contribution from TAH upon such terms as may be offered by TAH. Such
terms may include, without limitation, the following:

(1) The principal of the loan may accelerate and be payable
earlier than the date due (i) to the extent of any distributions
payable to a borrower as a Limited Partner under Section 3.04, (ii)
upon the termination of the employment of the borrower by TAH and
its subsidiaries, other than a termination occasioned by the death
or disability of the borrower, or (iii) upon the termination of the
borrower's interest in the Partnership.

(2) The General Partner may have the right to offset loan
obligations due TAH against distributions or other payments due the
borrower as a Limited Partner hereunder and to cause the payment of
such loans to the extent of such distributions or payments.

(c) Vesting. Notwithstanding the foregoing, the interest of each
individual Limited Partner shall be subject to a vesting requirement that
the Limited Partner remain in the employment of subsidiaries of TAH for a
consecutive period of five (5) years after the date of such Limited
Partner's admission to the Partnership. This vesting requirement may be
waived in whole or in part by the General Partner in its discretion and
shall be waived in the event of termination of employment due to normal
retirement under the employer's policies, death or disability. Upon
termination of such employment of an individual Limited Partner for any
reason within five (5) years from the date of his admission to this
Partnership, unless the General Partner otherwise determines in its
discretion:

(1) The remaining principal and accrued interest on any loans
owed by the Limited Partner under subparagraph (b) hereof shall be
immediately due and payable;

(2) The right of the Limited Partner to any distributions of
assets of the Partnership under Section 3.04 shall terminate; and

(3) The interest of the Limited Partner shall be redeemed by
the Partnership pursuant to Section 4.03 or

9
<PAGE> 14
purchased by the General Partner on equivalent terms for retransfer
to one or more substituted Limited Partners under Section 5.02 and
the proceeds of such redemption or purchase shall be applied to
payment of the remaining principal and accrued interest of any loans
owed by the Limited Partner under subparagraph (b) hereof before any
payment or distribution thereof is made to the Limited Partner.

SECTION 3.02. Capital Accounts. There shall be established (i) in the case
of the initial Partners, as of April 8, 1984 and (ii) in the case of any
additional Partners, as of the day as of which such Partner was admitted to the
Partnership an initial Capital Account equal to the amount of each Partner's
initial Capital Contribution. Each Partner's Capital Account shall be adjusted
from time to time as of the date of any of the following events by adding
thereto (i) any additional Capital Contributions made, and (ii) any Net Gain and
unrealized appreciation of Partnership property allocated to such Partner's
Capital Account, and deducting therefrom (x) any Net Loss and unrealized
depreciation of Partnership property allocated to such Partner's Capital
Account, (y) any distributions made to such Partner, and (z) any withdrawals of
capital or profits by such Partner pursuant to Article IV hereof.

SECTION 3.03. Allocation of Gains and Losses. As of the end of each fiscal
year of the Partnership and upon termination of the Partnership pursuant to
Article VI, the Capital Accounts of all Partners shall be adjusted by allocating
thereto in the proportion that such Capital Accounts bear to one another
immediately prior to such allocation, (i) the Net Gain or Net Loss of the
Partnership for the fiscal year or, in the case of termination of the
Partnership prior to the end of a fiscal year, for the portion of said fiscal
year ending on the date of termination, and (ii) any net unrealized appreciation
or depreciation of Partnership property which occurred during the fiscal year,
based on the valuation of such Partnership property pursuant to Article VIII at
the end of the fiscal year compared to the beginning of such fiscal year,
exclusive of Net Gains or Net Losses allocated with respect to the fiscal year.

SECTION 3.04. Distributions to Partners.

(a) Distributions to Partners.

(i) Other than in connection with the termination of the
Partnership or the withdrawal of a Partner from the Partnership, it
shall be within the sole discretion of the General Partner as to
whether and to what extent a distribution of the assets of the
Partnership shall be made. The General Partner will exercise such
discretion reasonably, and in the best interest of the Limited
Partners. In no event shall the General Partner be required to make
any such

10
<PAGE> 15
distributions to Limited Partners whose interests have not vested
under paragraph 3.01(c).

(ii) The General Partner may, but shall not be required to,
make annual distributions to each Partner in an amount not greater
than fifty percent (50%) of any interest or dividend income which is
allocated to such Partner for United States Federal income tax
purposes in the Partnership income tax return filed or to be filed
by the Partnership with respect to the fiscal year of the
Partnership immediately preceding such distribution.

(iii) Any distribution of assets (other than a distribution
made in connection with the withdrawal of a Partner or the
termination of a Partner's interest under Article IV) shall be made
to all of the Partners in the ratio that their respective Capital
Accounts bear to one another at the time of the distribution.

(iv) Any distribution of assets shall be charged to the
respective Capital Accounts of the Partners receiving the same.

(v) If a distribution is to be made in Securities or other
property other than cash, profit or loss shall be deemed to have
been realized on such Securities or other property for purposes of
determining the Capital Accounts of the Partners as of the end of
the preceding quarter. Such profit or loss shall be determined as if
such Securities or other property had been sold for their fair
market value on the effective date of the distribution, which shall
be the date on which the General Partner shall determine to make the
distribution.

(b) Withholding Distributions. No part of any distribution shall be
paid pursuant to this Section 3.04 to any Limited Partner (except under
subsection (a)(ii) hereof) to the extent that there is due and owing to
the Partnership, at the time of such distribution, any Capital
Contribution required to be paid to the Partnership pursuant to the
provisions of paragraph 3.01(a) or any amount due to TAH under a loan made
pursuant to paragraph 3.01(b).

(c) Repayment of Distributions. Partners shall be required to repay
Partnership distributions to the extent provided in the ULPA.

SECTION 3.05. No Interest on Capital. No Partner shall be entitled to
receive interest from the Partnership on his Capital Account.

11
<PAGE> 16
ARTICLE IV

Withdrawal of Profits, Gains or Capital

SECTION 4.01. Withdrawal of Profits, Gains or Capital. Except as otherwise
provided in Section 6.02 hereof, no Limited Partner shall be permitted to
withdraw profits, gains or capital from the Partnership until his interest in
the Partnership is vested under paragraph 3.04(c) and then only with the
approval of the General Partner, which approval may be withheld if the General
Partner does not believe that such withdrawal is in the best interests of the
other Limited Partners, whether because of the cash position of the Partnership,
the undesirability of liquidating any of the investments of the Partnership, or
otherwise. The following provisions shall govern with respect to any withdrawals
approved by the General Partner:

(a) No such withdrawal shall be made except as of the last day of a
fiscal year of the Partnership;

(b) Partial withdrawals of profits, gains or capital shall not be
permitted and a Partner desiring to withdraw must withdraw his entire
interest in the Partnership;

(c) The Partner desiring to withdraw must notify in writing the
General Partner at least sixty (60) days prior to the close of the fiscal
year in which he wishes to effect his withdrawal;

(d) Notwithstanding the provisions of Section 4.05, any Net Gains or
Net Losses recognized by the Partnership during the period between such
Partner's request for withdrawal and the actual distribution thereof and
otherwise allocable to such Partner or his Capital Account shall be made a
part of the payment to be made to such Partner pursuant to Section 4.04;
and

(e) The General Partner may, if necessary to accommodate a request
for withdrawal by a Limited Partner, attempt to obtain a purchaser of the
whole or a part of such Limited Partner's interest.

SECTION 4.02. Legal Representatives. In the event any Limited Partner
shall die or shall be declared incompetent or insane or shall be adjudicated a
bankrupt, the legal representative of such Limited Partner shall upon written
notice to the General Partner of the happening of any of such events become an
assignee of such Limited Partner's interest subject to all of the terms of this
Agreement as then in effect. Such legal representative may not terminate its
interest in the Partnership and withdraw capital, profits, or gains except in
accordance with Section 4.01. If the General Partner does not approve withdrawal
of the interest of such legal representative, the General Partner

12
<PAGE> 17
will use its best efforts, without legal obligation, to find another person,
suitable to the General Partner, willing to assume the Partnership interest of
such legal representative.

SECTION 4.03. Mandatory Withdrawal. Unless the General Partner otherwise
determines, an individual Limited Partner shall be required to withdraw from the
Partnership upon the termination of his employment by TAH or its Subsidiaries
prior to the vesting of his interest under paragraph 3.01(c), except for a
termination by reason of normal retirement under the employer's policies, death
or disability, and his Partnership interest shall be liquidated under Section
4.04 or purchased by the General Partner for retransfer to substituted Limited
Partners under subsection 3.01(c)(3).

SECTION 4.04. Liquidating Share. In the event any Limited Partner shall
withdraw or be required to withdraw in accordance with the provisions of this
Article IV, there shall be paid to such Limited Partner or his legal
representative within 60 days after the last day of the fiscal year of the
Partnership which constitutes the effective date of withdrawal, an amount equal
to the value of such Partner's interest as of the effective date of withdrawal
(determined in accordance with Article VIII); provided, however, that in the
event of a mandatory withdrawal under Section 4.03, the interest of the
withdrawing Limited Partner shall be valued at the lesser of (i) his paid-in
Capital Contribution, less distributions paid to him prior to the withdrawal
date other than distributions paid under subsection 3.04(a)(ii), or (ii) the
value of his interest determined under Article VIII.

SECTION 4.05. Cessation of Participation. From and after the date of
withdrawal of a Partner from the Partnership under this Article IV, no interest
shall be payable on its interest in the Partnership to the date of payout.

ARTICLE V

Transfer of Partnership Interests

SECTION 5.01. Assignability of Interests.

(a) Subject to the provisions of Sections 4.01(e) and 4.02 hereof,
the interest of a Limited Partner shall not be assignable without the
prior written consent of the General Partner. No assignment shall be
binding upon the Partnership until the General Partner receives an
executed copy of such assignment in form and substance satisfactory to the
General Partner. The assignee of such interest may become a substituted
Limited Partner only upon the terms and conditions of Section 5.02.

(b) The interest of the General Partner shall not be assignable;
provided, however, that in no event shall the

13
<PAGE> 18
interest of the General Partner be reduced below a 1% interest in the
Capital Accounts of the Partners and that such interest may be assigned to
a successor to all or substantially all of the business of the General
Partner the Voting Control of which is held by those persons then holding
Voting Control of the General Partner upon (i) the execution by the
General Partner of a written assignment, the execution by the successor of
this Agreement, and the written assumption by the successor of the
obligations of the General Partner hereunder; and (ii) the receipt by the
Partnership of an opinion of counsel that such assignment and assumption
will not result in the Partnership being classified as an association for
Federal income tax purposes. In the event of such assignment, the
successor shall become the General Partner hereunder, and the predecessor
and successor General Partner shall cause the execution of any necessary
papers including, without limitation, an amendment to the Certificate of
Limited Partnership to record the substitution of the successor as General
Partner.

SECTION 5.02. Substituted Limited Partners. No Limited Partner shall have
the right to substitute an assignee as a Limited Partner in his place. The
General Partner shall have the right, in its discretion, to admit as a
substituted Limited Partner any person, firm or corporation acquiring a
partnership interest by assignment from another Limited Partner or from the
General Partner. The admission of an assignee as a substituted Limited Partner
shall be conditioned upon the assignee's written assumption of all obligations
of the assigning Limited Partner and execution of this Agreement as a Limited
Partner. Upon acceptance of a substituted Limited Partner, the General Partner
shall forthwith amend the Certificate of Limited Partnership and any other
necessary papers to show the substitution of such assignee in place of the
assigning Limited Partner. The General Partner's failure or refusal to admit an
assignee as a substituted Limited Partner shall not affect the right of such
assignee to receive the share of profits or other distribution or compensation
to which its assignor would otherwise be entitled.

ARTICLE VI

Duration and Termination of Partnership

SECTION 6.01. Duration. Except as provided in Section 6.03, the
Partnership shall continue for a period of twenty (20) years from and after the
date hereof, provided, however, that

14
<PAGE> 19
with the written consent of the General Partner and Limited Partners
representing at least sixty-six and two-thirds percent (66 2/3%) of the combined
Capital Accounts of all the Limited Partners, the Partnership may be terminated
at any time after its first full fiscal year.

SECTION 6.02. Withdrawal of Limited Partner. If any Limited Partner shall
withdraw, die, be declared incompetent or insane, or be adjudicated a bankrupt,
such event shall not cause the dissolution or termination of the Partnership,
and the Partnership shall continue until terminated pursuant to Section 6.01 or
Section 6.03.

SECTION 6.03. Withdrawal of General Partner.

(a) The General Partner may withdraw at any time after December 31,
1989 by giving 90 days prior written notice to the other Partners. If
Limited Partners whose Capital Accounts constitute in excess of 66 2/3% of
all Capital Accounts consent in writing executed within such 90-day period
to the continuation of the Partnership and elect a new General Partner,
the Partnership shall not terminate but shall continue in existence as
though no such withdrawal or filing had occurred, except that the new
General Partner shall be substituted for the former General Partner. Any
Limited Partner who does not consent to such continuation shall have the
right to withdraw by giving notice within 90 days after having been
notified of the continuation of the Partnership and shall be paid in the
manner set forth in Section 4.04.

15
<PAGE> 20
termination as General Partner (i.e., his Capital Account will be debited
for his share, if any, as Limited Partner of the losses and expenses
arising out of such liabilities but he will not be required to make
additional contributions to the Partnership to satisfy such liabilities).
However, a former General Partner will remain personally liable for all
Partnership liabilities arising out of events and transactions occurring
prior to his termination as General Partner (i.e., his Capital Account
will be debited for his share of losses and expenses arising out of such
liabilities and he will be required to make additional contributions to
the Partnership to the extent of a deficit in his Capital Account due to
such liabilities arising out of events and transactions occurring prior to
his termination).

SECTION 6.04. Liquidation.

(a) Upon the termination of the Partnership the General Partner, or
if there be no General Partner, then a person selected by Limited Partners
representing in excess of fifty percent (50%) of the combined Capital
Accounts of all Limited Partners, shall act as the liquidator (or
liquidators) of the Partnership with full power and authority to:

(i) sell, at such prices and upon such terms as the liquidator
in its sole discretion may deem appropriate, any or all of the
Securities, properties and assets of the Partnership, provided that
such sales shall only be made for cash and, when possible,
consummated within ninety (90) days after the date of termination;
and provided further that the liquidator shall not deal directly or
indirectly with the Partnership for its own account without the
approval in writing of all of the Limited Partners;

(ii) within ninety (90) days after the date of termination or
as soon thereafter as possible, effect distribution of the
properties and assets of the Partnership in cash or in kind in the
manner set forth in Section 6.05; and

(iii) control and pay out the reserves established pursuant to
paragraphs 6.05(b) and (d) and distribute the balance to the
Partners pursuant to paragraphs 6.05(e) or (f) as additional assets.

SECTION 6.05. Distribution Upon Termination. On termination of the
Partnership, the General Partner or liquidator, as the case may be, shall make
distributions out of the properties and assets of the Partnership in the
following order of priority:

16
<PAGE> 21
(a) To the payment and discharge of the claims of all creditors of
the Partnership who are not Partners;

(b) To the establishment of such reserves as they may deem necessary
or advisable in order to provide for contingent liabilities of the
Partnership to all persons who are not Partners;

(d) To the establishment of such reserves as they may deem necessary
or advisable in order to provide for contingent liabilities of the
Partnership to Partners;

(e) To the Partners in the ratio that their respective Capital
Contributions bear to one another as of the date of termination of the
Partnership to the extent that the amount of each Partner's Capital
Contribution exceeds the sum of all distributions made to such Partner
pursuant to Section 3.04 hereof plus all withdrawals by such Partner
pursuant to Article IV hereof; and

(f) The remainder of the assets of the Partnership shall be
distributed to the Partners in the relative proportions that the
respective Capital Accounts of the Partners bear to one another after
giving effect to (i) the foregoing distributions and (ii) allocation of
any Net Gain or Net Loss through the date of termination. For purposes of
determining Net Gain or Net Loss to be so allocated, profit or loss on all
Securities or other property other than cash held by the Partnership on
the date of termination shall be deemed realized as of such date. Such
profit or loss shall be determined as if such Securities or other property
had been sold for their fair market value on the date of termination.

ARTICLE VII

Reports to Partners

SECTION 7.01. Financial Records. The General Partner shall keep books of
account in which shall be entered fully and accurately the transactions of the
Partnership and financial records appropriate to the business of the
Partnership.

SECTION 7.02. Annual Reports. Within ninety (90) days after the end of
each fiscal year and upon liquidation of the Partnership, the General Partner
shall prepare and mail to each Partner and to each former Partner who withdrew
during the applicable fiscal year or its legal representative, a report stating
in sufficient detail such transactions effected by the Partnership during such
fiscal year as shall enable such Partner

17
<PAGE> 22
or former Partner or the legal representative of such former Partner to prepare
its respective income tax returns, including:

(a) such Partner's Capital Account as of the close of such fiscal
year;

(b) the sum of the Capital Accounts as of such date of all the
Partners;

(d) profit and loss statement;

(e) statement of holdings of Securities of the Partnership;

(f) a description of the nature of each of the Partnership's
investments, the cost thereof and the valuation thereof established
pursuant to Section 8.02; and

(g) such other financial information and documents as the General
Partner deems appropriate, as a Limited Partner may reasonably request, or
as is required by this Agreement and any amendments hereto.

SECTION 7.04. Tax Returns. The General Partner will file all Federal,
state or other income tax returns required of the Partnership and will supply to
each Limited Partner such Partner's Form K-1 submitted with the Partner's
Federal tax return. If requested to do so by any Limited Partner, the General
Partner will file an election pursuant to Section 754 of the Internal Revenue
Code.

ARTICLE VIII

Valuation

SECTION 8.01. Valuation of Partnership Net Worth. In determining the net
worth of the Partnership, the value of any Partnership asset, the Capital
Accounts of the Partners, the value of any distribution, or in determining
value for any other purpose under this Agreement, the provisions of this Article
VIII shall apply;

SECTION 8.02. Valuation Date. Valuation shall be determined by the General
Partner as of the close of business on the

18
<PAGE> 23
Market Day preceding the last day of each fiscal year of the Partnership or as
of the close of business on the date with respect to which valuation is to be
taken, or if such day is not a Market Day, then on the Market Day next preceding
such date, as the case may be. A Market Day shall be a day on which the New York
Stock Exchange is open for regular trading. If a valuation is taken other than
in connection with the annual reports described in Section 7.02, the General
Partner shall give notice of such valuation to the Limited Partners promptly
after it is determined.

SECTION 8.03. Valuing Securities and Other Assets. The following
provisions shall apply in valuing interests in the Partnership:

(i) Listed Securities which are not restricted as to
saleability or transferability shall be valued at the closing price
as of the Valuation Date. If any listed Security was not traded on
such date, then the mean of the closing high bid and low asked
prices as of the close of business on such date shall be used.

(ii) Unlisted securities which are readily marketable shall be
valued at the mean of the closing bid and asked prices as of the
Valuation Date.

(iii) Securities, whether listed or unlisted, for which market
quotations are available, but which are restricted as to saleability
or transferability, shall be valued as provided in (i) and (ii)
above, less a discount of from ten percent (10%) to twenty-five
percent (25%) of the value thereof as determined in good faith by
the General Partner. In determining the amount of such discount the
General Partner shall give consideration to the nature and length of
such restriction and the relative volatility of the market price of
such Security.

(iv) Securities for which market quotations are not readily
available and all other assets of the Partnership shall be valued at
a fair value as determined in good faith by the General Partner.

(v) Interests in other partnerships shall be valued by each
partnership at the times and upon the terms provided in its
partnership agreement unless the General Partner of this Partnership
otherwise determines.

(vi) Liabilities shall include, in addition to those recorded
on the books of the Partnership, such other accrued or contingent
liabilities as shall be determined in accordance with generally
accepted accounting principles.

19
<PAGE> 24
(vii) In determining the value of the interest of any Partner
in the Partnership, neither the goodwill nor the right to use the
firm name or trade name of the Partnership shall be considered as an
asset of the Partnership.

ARTICLE IX

Miscellaneous

SECTION 9.01. Admission of Limited Partners. Except as provided in this
Section, no new Partner shall be admitted to the Partnership and no additional
contribution of capital to the Partnership shall be accepted. New Limited
Partners may be admitted in the discretion of the General Partner on the first
day of any fiscal year and the interest of such new Limited Partner in the
Partnership shall be established by creating a Capital Account for such new
Limited Partner as of the first day following the conclusion of the preceding
fiscal year of the Partnership in an amount equal to the contribution made by
such new Limited Partner to the Partnership. New Limited Partners may also be
admitted in the discretion of the General Partner by assignment or transfer of
the interest of a Limited Partner or the General Partner in accordance with
Article V or Sections 4.01(e) or 4.02. From time to time the General Partner may
select and admit additional Limited Partners to the Partnership in accordance
with the following procedures: Each Limited Partner so admitted shall (i) sign a
counterpart copy of this Agreement, which shall be accepted by its execution by
the General Partner, as well as any other documents required by the General
Partner, and (ii) make payment of his Capital Commitment as determined by the
General Partner; and an amendment to the Partnership's Certificate of Limited
Partnership shall be filed to reflect such addition. Each such additional
Limited Partner shall thereafter be entitled to and subject to all the rights
and liabilities of Limited Partners as set forth herein; provided, however, that
there shall be allocated to such Limited Partner pursuant to Section 3.03 only a
portion of the Net Gain, Net Loss or unrealized appreciation or depreciation of
the Partnership beginning with the fiscal year in which such Limited Partner is
first admitted.

20
<PAGE> 25
other witnesses; and any arbitration fees and expenses of the arbitrators shall
be divided equally between the disputing parties.

SECTION 9.03. Payments in Kind. In the event the Partnership is required
or elects to make a payment or other distribution to or on behalf of any Partner
or to the legal representative, liquidator, or receiver of any deceased,
incompetent, insane or bankrupt Partner, the General Partner may (but shall not
be obligated to) make such payment or distribution, either wholly or partially,
in Securities or other property of the Partnership. The amount of any such
payment or distribution shall be deemed to be equal to the value of such
securities or other property as of the effective date of their distribution to
or on behalf of the Partner or his legal representatives and the decisions of
the General Partner with respect to in-kind payments, including decisions with
respect to selection, apportionment and valuation of Securities or other
property, shall be conclusive and binding upon all Partners.

SECTION 9.05. Notices.

21
<PAGE> 26
SECTION 9.06. Execution of Certificate of Limited Partnership and Other
Documents. The General Partner agrees to prepare and file and the Partners agree
to execute a certificate of limited partnership, any amendments thereto, and
such other instruments, documents and papers as the General Partner deems
necessary or appropriate to carry out the intent of this Agreement, and to take
such other action as the General Partner deems appropriate to maintain the
Partnership's status as a Limited Partnership under the ULPA.

SECTION 9.07. Force Majeure. Whenever any act or thing is required of the
Partnership hereunder within any specified period of time, the Partnership
shall be entitled to such additional period of time to do such acts or things as
shall equal any period of delay resulting from causes beyond the reasonable
control of the Partnership, including, without limitation, bank holidays,
actions of governmental agencies, closing the New York Stock Exchange at
times other than normal closing dates, and financial crises of a nature
materially affecting the purchase and sale of Securities.

SECTION 9.10. Power of Attorney. Each Limited Partner does hereby
constitute and appoint R. Willis Leith, Jr., Gerald Segel and W. Ward Carey and
each of them, its true and lawful representative, in its name, place and stead,
to make, execute, sign, acknowledge, deliver and file all such instruments,
documents and

22
<PAGE> 27
certificates which may from time to time be required by the laws of the United
States of America, the Commonwealth of Massachusetts, or any other state in
which the Partnership shall determine to do business, or any political
subdivision or agency thereof, to effectuate, implement and continue the valid
and subsisting existence of the Partnership, including, without limitation, a
Certificate of Limited Partnership and amendments thereto and any such
certificate or amendment filed for the purpose of admitting the undersigned as
Limited Partners of the Partnership.

IN WITNESS WHEREOF, the General Partner and the Limited Partners have
hereunto set their hands and seals as of the date first set forth above.

GENERAL PARTNER
Tucker Anthony Holding Corporation

By:_______________________________________

LIMITED PARTNER

__________________________________________

__________________________________________
(Print Name)

S.S.#_____________________________________

Allocation Accepted: $____________

ss:

Then personally appeared before me ___________________, known to me, and
acknowledged the same to be his free act and deed.

__________________________________________
Notary

23
<PAGE> 28
EXHIBIT A

General Partner

Capital
Name Address Commitment
- - - - - - - - - - - - - - - ---- ------- ----------

Tucker Anthony Holding One Beacon Street 1% of total
Corporation Boston, MA 02109 Capital as
General Partner

Limited Partners

Capital
Name Address Commitment
- - - - - - - - - - - - - - - ---- ------- ----------
$___________

<PAGE> 1
EXHIBIT 10.17

SUTRO VENTURE PARTNERS I, LP

LIMITED PARTNERSHIP AGREEMENT

March 21, 1996

<PAGE> 2

TABLE OF CONTENTS
Page
----

<S> <C>
ARTICLE I - General Provisions ................................................1
SECTION 1.01. Definitions ................................................1
(a) Agreement .......................................................1
(b) Borrower ........................................................1
(c) Capital Account .................................................1
(d) Capital Contribution ............................................1
(e) Certificate of Limited Partnership ..............................1
(f) Code ............................................................1
(g) CRLPA ...........................................................1
(h) Disability ......................................................1
(i) General Partner .................................................2
(j) Limited Partner .................................................2
(k) Partner .........................................................2
(l) Partnership .....................................................2
(m) Securities ......................................................2
(n) Sutro ...........................................................2
(o) Sutro Employee ..................................................2
(P) Voting Control ..................................................2
SECTION 1.02. Partnership Name ...........................................2
SECTION 1.03. Fiscal Year ................................................2
SECTION 1.04. Nature and Liability of Partners ...........................2
SECTION 1.05. Purposes ...................................................3
SECTION 1.06. Powers of Partnership ......................................3
SECTION 1.07. General Partner as Limited Partner .........................4

ARTICLE II - Management of Partnership ........................................4
SECTION 2.01. General ....................................................4
SECTION 2.02. Services of General Partner ................................4
SECTION 2.03. Compensation of General Partner ............................4
(a) No Management Fee ...........................................4
(b) Expenses ....................................................4
SECTION 2.04. Restrictions ...............................................5
(a) No Services by Limited Partners .............................5
(b) Partnership Credit ..........................................5
(c) Limitation on Borrowing and Pledging ........................5
(d) Additional Restrictions .....................................6
SECTION 2.05. Reliance by Third Parties ..................................6
SECTION 2.06. Partner's Transactions .....................................6
SECTION 2.07. Exculpation of Liability ...................................6
</TABLE>

(i)

<PAGE> 3
<TABLE>
<CAPTION>
Page
----

<S> <C>
SECTION 2.08. Indemnification ............................................6

ARTICLE III - Capital Accounts; Allocations; Distributions ....................7
SECTION 3.01. Capital Contributions ......................................7
(a) Contributions .................................................7
(b) Borrowing .....................................................7
(c) Vesting .......................................................8
SECTION 3.02. Capital Accounts ...........................................8
SECTION 3.03. Deficit Capital Accounts ...................................9
SECTION 3.04. Allocations ................................................9
(a) Book Items ....................................................9
(b) Tax Items .....................................................9
(c) Allocations on Withdrawal .....................................9
(d) Qualified Income Offset .......................................9
(e) General Partner Nonrecourse Debt .............................10
(f) Curative Allocations .........................................10
SECTION 3.05. Distributions to Partners .................................10
(a) Distributions to Partners ....................................10
(b) Application of Distributions .................................11
(c) Repayment of Distributions ...................................11
SECTION 3.06. No Interest on Capital ....................................11

ARTICLE IV - Withdrawal of Limited Partner ...................................11
SECTION 4.01. Withdrawal of Limited Partner .............................11
SECTION 4.02. Legal Representatives .....................................12
SECTION 4.03. Mandatory Withdrawal ......................................12
SECTION 4.04. Liquidating Share .........................................12
SECTION 4.05. Cessation of Participation ................................12

ARTICLE V - Transfer of Partnerships Interests ...............................13
SECTION 5.01. Assignability of Interests ................................13
SECTION 5.02. Substituted Limited Partners ..............................13
SECTION 5.03. Obligations of Assignee ...................................14

ARTICLE VI - Duration and Termination of Partnership..........................14
SECTION 6.01. Duration...................................................14
SECTION 6.02. Withdrawal of Limited Partner .............................14
SECTION 6.03. Withdrawal General Partner ................................14
SECTION 6.04. Liquidation ...............................................15
SECTION 6.05. Distribution Upon Termination .............................15

ARTICLE VII - Records; Reports to Partners....................................16
</TABLE>

(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 7.01. Financial Records.................................. 16
SECTION 7.02. Annual Reports..................................... 16
SECTION 7.03. Inspection......................................... 17
SECTION 7.04. Tax Returns........................................ 17

ARTICLE VIII - Valuation.............................................. 17
SECTION 8.01. Valuation of Partnership Net Worth................. 17
SECTION 8.02. Valuation Date..................................... 17
SECTION 8.03. Valuing Securities and Other Assets................ 18

ARTICLE IX - Miscellaneous............................................ 18
SECTION 9.01. Admission of Limited Partners...................... 19
(a) Additional Limited Partners............................ 19
(b) Substituted Limited Partners........................... 19
(c) Procedure.............................................. 19
SECTION 9.02. Disputed Matters................................... 19
SECTION 9.03. Payments in Kind................................... 19
SECTION 9.04. General............................................ 20
SECTION 9.05. Notices............................................ 20
(a) To the Partners........................................ 20
(b) To the Partnership..................................... 20
SECTION 9.06. Execution of Certificate of Limited Partnership
and Other Documents......................................... 20
SECTION 9.07. Force Majeure...................................... 20
SECTION 9.08. Amendments......................................... 21
SECTION 9.09. Headings........................................... 21
SECTION 9.10. Power of Attorney.................................. 21
</TABLE>

(iii)
<PAGE> 5

SUTRO VENTURE PARTNERS I, LP

LIMITED PARTNERSHIP AGREEMENT

BY THIS LIMITED PARTNERSHIP AGREEMENT made and entered into as of March
21, 1996, The Sutro Group, a corporation organized under the laws of the State
of Nevada, as general partner, and those persons and entities executing this
Agreement or counterparts thereof and listed on Exhibit A (as it may be amended
from time to time) as limited partners, hereby form a limited partnership
pursuant to the laws of the State of California.

ARTICLE I - General Provisions

SECTION 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a) Agreement. "Agreement" means this Limited Partnership Agreement as
it may from time to time be amended.

(b) Borrower. "Borrower" has the meaning specified in Section 3.01(c).

(c) Capital Account. "Capital Account" means those separate capital
accounts which are maintained for each Partner as defined in Section 3.02.

(d) Capital Contribution. "Capital Contribution" means the total amount
of money paid to the Partnership by each Partner as set forth on the signature
page hereof or counterpart thereof and reflected on Exhibit A hereto.

(e) Certificate of Limited Partnership. The "Certificate of Limited
Partnership", means the certificate of limited partnership for the Partnership
and all amendments thereto required under the laws of the State of California to
be signed and sworn to by the Partners of the Partnership and filed for
recording in the appropriate public offices within the State of California to
perfect or maintain the Partnership as a limited partnership under the laws of
the State of California and/or to effect the admission, withdrawal or
substitution of any Partner of the Partnership.

(f) Code. "Code" means the Internal Revenue Code, as amended.

(g) CRLPA. "CRLPA" means the California Revised Limited Partnership
Act, as amended from time to time.

(h) Disability. "Disability" means permanent inability to be gainfully
employed at Sutro or its affiliates.

<PAGE> 6

(i) General Partner. "General Partner" means The Sutro Group, a Nevada
corporation, or any person substituted for or who succeeds The Sutro Group as
such general partner pursuant to the terms of this Agreement.

(j) Limited Partner. "Limited Partner" means any person who is or shall
become a Limited Partner of the Partnership.

(k) Partner. "Partner" means the General Partner or any Limited
Partner.

(l) Partnership. "Partnership" means Sutro Venture Partners I, LP, a
California limited partnership.

(m) Securities. "Securities" means securities of every kind or
description.

(n) Sutro. "Sutro" means The Sutro Group, a Nevada Corporation. The
affiliates of Sutro shall include all corporations and partnerships (i) over
which Sutro or any of its affiliates has Voting Control, (ii) which, directly or
indirectly, have Voting Control over Sutro, and (iii) which are under Voting
Control of any corporation or partnership described in the immediately preceding
clause (ii).

(o) Sutro Employee. "Sutro Employee" means an individual employed [on a
full-time basis] by Sutro or any of its affiliates.

(p) Voting Control. "Voting Control" means the right to vote 50% or
more of the securities having the right to elect the directors of a corporation
or the right to designate a majority of the general partners of a partnership.

SECTION 1.02. Partnership Name. The Partnership shall do business under
the name and style of "Sutro Venture Partners I, LP," or such other name as the
General Partner may designate.

SECTION 1.03. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year, or such other fiscal year as the General Partner shall
designate or the Code shall require.

SECTION 1.04. Nature and Liability of Partners. The General Partner
shall have such liability for the repayment, satisfaction and discharge of the
debts, liabilities and obligations of the Partnership as is provided by the
CRLPA for a general partner of a limited partnership. The Limited Partners who
execute this Agreement or are otherwise admitted as Limited Partners shall be
liable to the Partnership for the repayment, satisfaction and discharge of its
debts, liabilities and obligations only (i) to the extent of their respective
Capital Contributions and (ii) to the extent provided in Section 15666 of the
CRLPA.

2
<PAGE> 7

The Partners hereby agree among themselves to share in accordance with the
terms of this Agreement all losses, liabilities or expenses suffered or incurred
by virtue of the operation of the Partnership, provided that Limited Partners
shall share such losses, liabilities, and expenses only up to the limit of their
respective Capital Contributions. The General Partner agrees to assume and be
liable for all such losses, liabilities and expenses not covered by the
aggregate Capital Contributions of the Partners.

SECTION 1.05. Purposes of Partnership. The purposes of the Partnership
are to make investments in investment partnerships or companies formed for the
purpose of investing in the Securities of publicly and privately held
businesses, in order to provide incentives to investment executives and senior
management personnel of Sutro or its affiliates who are given the opportunity to
participate as Limited Partners in the Partnership. Limited Partnership
interests shall be allocated initially by Sutro based on the contributions of
such executives to the business of Sutro and its affiliates and shall be subject
to future vesting, redemption and other provisions hereof which relate to the
continued service of such executives.

SECTION 1.06. Powers of Partnership. In furtherance of the purposes of
the Partnership set forth in Section 1.05, the Partnership shall have the
following powers:

(d) To have and maintain an office within the State of
California and in connection therewith to rent, or acquire office
space, engage personnel and do such other acts and things as may be
necessary or advisable in connection with the maintenance of such
office, and on behalf of and in the name of the Partnership to pay and
incur reasonable expenses and obligations for legal, accounting,
consultative and custodial services, and all other reasonable costs and
expenses incident to the operation of the Partnership;

3
<PAGE> 8

(e) To form and own one or more corporations, trusts or limited
partnerships, provided that no entity so formed may do directly or indirectly
what the Partnership is prohibited by this Agreement from doing; and

(f) To enter into, make and perform all such contracts, agreements and
other undertakings as may be necessary or advisable or incident to the carrying
out of the foregoing objects and purposes.

ARTICLE II - Management of Partnership

SECTION 2.03. Compensation of General Partner.

(a) No Management Fee. The General Partner shall not receive any fees
or compensation from the Partnership for its services to the Partnership.

<PAGE> 9

legal, consulting and audit expenses incurred in the organization of the
Partnership, preparing any amendment to the Partnership Agreement, and
performing any other legal and audit services for the Partnership, interest
expenses, and brokerage fees, commissions and discounts incurred in connection
with the purchase or sale of Securities, and other out-of-pocket expenses
incurred in connection with the making and monitoring of the Partnership
investments and the administration of the Partnership.

SECTION 2.04. Restrictions. Partners shall be restricted in their
activities as follows:

(a) No Services by Limited Partners. The Limited Partners shall not
participate in the management of the Partnership and shall not hold themselves
out as General Partners or take any action on behalf of the Partnership or in
any way commit the Partnership to any agreement or contract and shall have no
right or authority to do any of the foregoing.

(b) Partnership Credit. No Partner shall lend or use the funds or
credit of the Partnership or employ the Partnership's name for any purpose
whatsoever, except that the General Partner may do so for the purposes of the
Partnership or as permitted by paragraph (c) of this Section.

(i) If in the reasonable judgment of the General Partner it is
desirable to do so to accomplish the purposes of the Partnership, the
Partnership may borrow money from banks or other recognized financial
institutions and secure payment of any such borrowing by hypothecation
or pledge of Partnership properties or otherwise provided that (A) any
such borrowing has an original maturity of less than one year and (B)
the aggregate of all indebtedness of the Partnership for money borrowed
outstanding at any one time does not exceed 5% of the sum of the
Capital Contributions of all Partners.

(ii) The Partnership may guarantee the obligations of others
provided that the amount guaranteed, together with any amount borrowed,
shall at no time exceed the limitation set forth in clause (i)(B)
above.

(iii) Notwithstanding the foregoing, the Partnership may
borrow funds from Sutro or its successors or assume obligations of
Limited Partners to Sutro or its successors under the terms which the
General Partner deems appropriate in connection with the redemption or
withdrawal under Article IV of the interests of Limited Partners who
are Borrowers who have outstanding obligations to Sutro under paragraph
3.01(b).

<PAGE> 10

(d) Additional Restrictions. The Partnership shall not make short sales
of Securities not owned by the Partnership.

SECTION 2.06. Partner's Transactions. Nothing in this Agreement shall
be construed to prohibit any Partner from buying or selling securities for such
Partner's own account, including securities of the same issuers as those held by
the Partnership.

The Partnership shall not incur the cost of the portion of any
insurance which insures any party against any liability as to which such party
is herein prohibited from being indemnified.

<PAGE> 11

an officer, director, employee or agent of the General Partner or of any of the
persons identified in the preceding clauses (1) or (2).

The right of indemnification provided by this Section 2.08 shall not be
construed to increase the liability of Limited Partners as set forth in Section
1.04.

ARTICLE III - Capital Accounts; Allocations; Distributions

SECTION 3.01. Capital Contributions.

(a) Contribution. On or prior to the date of becoming a
Limited Partner of the Partnership, each Limited Partner shall make the
Capital Contribution in cash as set forth next to his/her name on
Exhibit A. The Capital Contribution of the General Partner shall at all
times be not less than one percent (1%) of the aggregate of all
Capital Contributions of the Partners and the General Partner shall
make any additional Capital Contributions required to maintain such
Capital Contribution of not less than one percent (1%). The aggregate
of all Capital Contributions shall be, and hereby is agreed to be,
available to the Partnership to carry out the purposes and objects of
the Partnership.

(b) Borrowing. Certain Limited Partners (each, a "Borrower")
may be given the opportunity prior to the due date of any Capital
Contribution, to borrow all or any part of such contribution from Sutro
upon such terms as may be offered by Sutro. Such terms may include,
without limitation, the following:

(i) The principal of the loan may accelerate and be
payable earlier than the date due (i) to the extent of any
distributions payable to a Borrower as a Limited Partner under
Section 3.05(a)(i), (ii) upon the termination of the employment
of the Borrower by Sutro and its affiliates, except for a
termination by reason of death or Disability, or, in the sole
discretion of Sutro, normal retirement under the applicable
policies of Sutro and its affiliates, or (iii) upon the
termination of the Borrower's interest in the Partnership.

(ii) The General Partner may have the right to offset
loan obligations due Sutro against distributions or other
payments due the Borrower as a Limited Partner hereunder and to
cause the payment of such loans to the extent of such
distributions or payments.

7
<PAGE> 12

(c) Vesting. Notwithstanding the foregoing, the interest of
each individual Limited Partner shall be subject to a vesting
requirement that the Limited Partner remain a Sutro Employee for a
consecutive period of four (4) years after the date of such Limited
Partner's admission to the Partnership. This vesting requirement may be
waived in whole or in part by the General Partner in its discretion and
shall be waived in the event of termination of employment by reason of
death or Disability, or, in the sole discretion of Sutro, normal
retirement under the applicable policies of Sutro and its affiliates.
Upon termination of such employment of a Limited Partner for any reason
within four (4) years from the date of such Limited Partner's admission
to this Partnership, unless the General Partner otherwise determines in
its discretion:

(i) The remaining principal and accrued interest on
any loans owed by a Limited Partner who is a Borrower under
subparagraph (b) hereof shall be immediately due and payable;

(ii) The right of the Limited Partner to any
distributions of assets of the Partnership under Section 3.05
shall terminate; and

(iii) The Limited Partner shall be required to
withdraw from the Partnership in accordance with Section 4.03
and such Limited Partner's interest shall be liquidated under
Section 4.04; provided, however, that the General Partner may
elect instead, in its sole discretion, to purchase the limited
partnership interest of such Limited Partner on equivalent
terms. The proceeds of such liquidation or purchase shall be
applied to payment of the remaining principal and accrued
interest of any loans owed by a Limited Partner who is a
Borrower under subparagraph (b) hereof before any payment or
distribution thereof is made to the Limited Partner.

SECTION 3.02. Capital Accounts. A separate capital account (each, a
"Capital Account" shall be established for each Partner and shall be maintained
in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv),
and this Section 3.02 shall be interpreted and applied in a manner consistent
therewith. Whenever the Partnership would be permitted to adjust the Capital
Accounts of the Partners pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(f) Partnership shall so adjust the Capital Accounts of the
Partners. In any event, the Partnership shall adjust the Capital Accounts of the
Partners annually, and upon the admission of a new Partner or the withdrawal of
an existing Partner, to reflect revaluations of Partnership property in
accordance with Article VIII. Whenever the Capital Accounts of the Partners are
adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to
reflect revaluations of Partnership property, (i) the Capital Accounts of the
Partners shall be adjusted in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain or loss, as computed for book purposes in accordance with Article VIII,
with respect to such property, and (ii) the Partners' distributive shares of
depreciation, depletion, amortization and gain or

<PAGE> 13

loss, as computed for tax purposes, with respect to such property shall be
determined so as to take account of the variation between the adjusted federal
income tax basis and book value of such property in the same manner as under
Code Section 704(c).

SECTION 3.03. Deficit Capital Accounts. If upon the liquidation of the
General Partner's interest in the Partnership the General Partner has a deficit
balance in its Capital Account, the General Partner shall contribute to the
Partnership an amount equal to such deficit balance. Any such contribution shall
be made by the General Partner no later than the end of the taxable year of the
Partnership during which such liquidation occurs (or, if later, within ninety
(90) days after such liquidation). This Section 3.03 is intended to comply with
the requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(3) and
shall be interpreted and applied in a manner consistent therewith.

SECTION 3.04. Allocations.

(a) Book Items. Items of income, gain, deduction and loss, as
computed for book purposes (including any such items resulting from any
revaluation of property under Section 3.02) for any fiscal year or
portion thereof shall be allocated among the Partners pro rata in
proportion to the Capital Account balances of the Partners.

(b) Tax Items. Items of income, gain, deduction and loss, as
computed for federal income tax purposes, shall be allocated in the
same manner as under Code Section 704(c).

(c) Allocations on Withdrawal. If a Limited Partner's interest
in the Partnership is liquidated by the Partnership pursuant to Section
4.04 and the Limited Partner receives less than the amount of the
balance in his/her Capital Account, then the excess of (i) the balance
in his/her Capital Account over (ii) the amount distributed by the
Partnership shall be allocated among all the remaining Partners in
proportion to their Capital Account balances. This provision shall be
applied so as to maintain equality between the Capital Accounts of the
Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(q).
Further, notwithstanding sections 3.02 and 9.01(b), if a Limited
Partner's interest is purchased by the General Partner pursuant to
Section 3.01 (c)(iii) and the purchase price is less than the balance
of the Capital Account of the Limited Partner, then (i) the excess of
(x) the balance in the Limited Partner's Capital Account over (y) the
amount paid by the General Partner shall be allocated among all the
remaining Partners in proportion to their Capital Account balances and
(ii) the General Partner (and any assignee of the General Partner)
shall have a Capital Account balance with respect to the purchased
interest in the Partnership equal to the purchase price paid by the
General Partner.

<PAGE> 14

(d) Qualified Income Offset. No allocation shall be made
pursuant to Section 3.04(a) to the extent that it shall cause or
increase a deficit balance in any Limited Partner's Capital Account (in
excess of such Partner's obligation, if any, to restore a deficit in
his/her Capital Account) as of the end of the Partnership taxable year
to which such allocation relates. In making the foregoing
determination, a Limited Partner's Capital Account shall be reduced by
the amounts described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6). Any Limited Partner who
unexpectedly receives an adjustment, allocation or distribution
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
or (6) shall be allocated items of income and gain in an amount and
manner sufficient to eliminate, to the extent required by the Treasury
Regulations, such deficit balance as quickly as possible. This Section
3.04(d) is intended to comply with the alternate test for economic
effect set forth in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted and applied in a manner consistent therewith.

(e) General Partner Nonrecourse Debt. If a Partner makes a
nonrecourse loan to the Partnership which is "partner nonrecourse debt"
within the meaning of Treasury Regulations Section 1.704-2(b)(4), then
any item of Partnership loss, deduction or Code Section 705(a)(2)(B)
expenditure that is attributable to such debt shall be allocated to
such Partner and appropriate items of income and gain shall be "charged
back" to such Partner. This Section 3.04(e) is intended to comply with
Treasury Regulations Section 1.704-2(I) and shall be interpreted and
applied in a manner consistent herewith.

(f) Curative Allocations. The allocations set forth in
Sections 3.04(d) and 3.04(e) (the "Regulatory Allocations") are
intended to comply with the requirements of Treasury Regulations
Section 1.704-1(b)(2)(ii)(d) and Treasury Regulations Section
1.704-(2)(i), respectively. Notwithstanding any other provisions of
this Section 3.04 (other than the Regulatory Allocations), the
Regulatory Allocations shall be taken into account in allocating other
items of income, gain, deduction and loss among the Partners, pursuant
to Sections 3-04(a) and 3.04(c), so that, to the extent possible, the
net amount of such allocations of other items and the Regulatory
Allocations to each Partner shall be equal to the net amount that would
have been allocated to each such Partner if the Regulatory Allocations
had not occurred.

SECTION 3.05. Distributions to Partners.

(a) Distributions to Partners.

<PAGE> 15
all of the Partners in the ratio that their respective Capital
Accounts bear to one another at the time of the distribution.

(ii) The General Partner may, but shall not be
required to, make annual distributions to each Partner in an
amount which the General Partner estimates is sufficient to
pay federal and state income taxes attributable to allocations
under Section 3.04(b). Notwithstanding Section 3.05(a)(i), any
distributions made pursuant to this Section 3.05(a)(ii) shall
be made to the Partners in proportion to the excess of
cumulative income and gain over cumulative deductions and
losses allocated to each of the Partners pursuant to Section
3.04(b).

(b) Application of Distributions. To the extent that there is
any amount due to Sutro from a Limited Partner who is a Borrower under
paragraph 3.01(b), each distribution to such Borrower (except a
distribution under subsection(a)(ii) hereof) shall be applied in
payment of such obligation of such Borrower.

(c) Repayment of Distributions. Partners shall be required to
repay Partnership distributions to the extent provided in the CRLPA.

SECTION 3.06. No Interest on Capital. No Partner shall be entitled to
receive interest from the Partnership on his/her Capital Account.

ARTICLE IV -- Withdrawal of Limited Partner

SECTION 4.01. Withdrawal of Limited Partner. Except as otherwise
provided in Section 4.03 hereof, no Limited Partner shall be permitted to
withdraw from the Partnership until his interest in the Partnership is vested
under paragraph 3.01(c) and then only with the approval of the General Partner,
which approval may be withheld if the General Partner does not believe that such
withdrawal is in the best interests of the other Limited Partners, whether
because of the cash position of the Partnership, the undesirability of
liquidating any of the investments of the Partnership, or otherwise. The
following provisions shall govern with respect to any withdrawals approved by
the General Partner:

(a) No such withdrawal shall be made except as of the last day
of a fiscal year of the Partnership;

(b) Partial withdrawals shall not be permitted and a Partner
desiring to withdraw must withdraw his/her entire interest in the
Partnership;

11
<PAGE> 16

(c) The Partner desiring to withdraw must notify the General
Partner in writing at least sixty (60) days prior to the close of the
fiscal year in which such Partner wishes to effect his/her withdrawal;
and

(d) The General Partner may, if necessary to accommodate a
request for withdrawal by a Limited Partner, attempt to obtain a
purchaser of the whole or a part of such Limited Partner's interest.

SECTION 4.02. Legal Representatives. In the event any Limited Partner
shall die or shall be declared incompetent or insane or shall be adjudicated a
bankrupt, the legal representative of such Limited Partner shall upon written
notice to the General Partner of the happening of any of such events become an
assignee of such Limited Partner's interest subject to all of the terms of this
Agreement as then in effect. Such legal representative may not withdraw from the
Partnership except in accordance with Section 4.01. If the General Partner does
not approve withdrawal of the interest of such legal representative, the General
Partner will use its best efforts, without legal obligations, to find another
person, suitable to the General Partner, willing to assume the Partnership
interest of such legal representative.

SECTION 4.03. Mandatory Withdrawal. Unless the General Partner
otherwise determines, a Limited Partner who was a Sutro Employee at the time he
or she became a Limited Partner shall be required to withdraw from the
Partnership upon the termination of his/her employment by Sutro and its
affiliates prior to the vesting of his/her interest under paragraph 3.01(c),
except for a termination by reason of death or Disability, or, in the sole
discretion of Sutro, normal retirement under the applicable policies of Sutro
and its affiliates, and such Limited Partner's Partnership interest shall be
liquidated under Section 4.04 or purchased by the General Partner under Section
3.01(c)(iii).

<PAGE> 17

ARTICLE V - Transfer of Partnership Interests

SECTION 5.01. Assignability of Interests.

(b) The interest of the General Partner shall not be
assignable; provided, however, that in no event shall the interest of
the General Partner be reduced below a 1% interest in the Capital
Accounts of the Partners and that such interest may be assigned to a
successor to all or substantially all of the business of the General
Partner the Voting Control of which is held by those persons then
holding, Voting Control of the General Partner upon (i) the execution
by the General Partner of a written assignment, the execution by the
successor of this Agreement, and the written assumption by the
successor of the obligations of the General Partner hereunder; and (ii)
the receipt by the Partnership of an opinion of counsel that such
assignment and assumption will not result in the Partnership being
classified as an association for Federal income tax purposes. In the
event of such assignment, the successor shall become the General
Partner hereunder, and the predecessor and successor General Partner
shall cause the execution of any necessary papers including, without
limitation, an amendment to the Certificate of Limited Partnership to
record the substitution of the successor as General Partner.

<PAGE> 18

ARTICLE VI - Duration and Termination of Partnership

SECTION 6.03. Withdrawal of General Partner.

(a) The General Partner may withdraw at any time after March
21, 2001 by giving 90 days prior written notice to the other Partners,
If Limited Partners whose Capital Accounts constitute in excess of 66
2/3% of all Capital Accounts consent in writing executed within such
90-day period to the continuation of the Partnership and elect a new
General Partner, the Partnership shall not terminate but shall continue
in existence as though no such withdrawal or filing had occurred,
except that the new General Partner shall be substituted for the former
General Partner. Any Limited Partner who does not consent to such
continuation shall have the right to withdraw by giving notice within
90 days after having been notified of the continuation of the
Partnership and shall be paid in the manner set forth in Section 4.04.

<PAGE> 19

Upon becoming a Limited Partner, such former General Partner's Capital
Account and Capital Commitment shall initially be the same as they were
on the effective date of such continuation. Once the General Partner
ceases to be such for whatever reason and becomes a Limited Partner
hereunder, such former General Partner will no longer be personally
liable with respect to Partnership liabilities arising out of events
and transactions occurring after its termination as General Partner
(i.e., its Capital Account will be debited for its share, if any, as
Limited Partner of the losses and expenses arising out of such
liabilities but it will not be required to make additional
contributions to the Partnership to satisfy such liabilities). However,
a former General Partner will remain personally liable for all
Partnership liabilities arising out of events and transactions
occurring prior to such former General Partner's termination as General
Partner (i.e., its Capital Account will be debited its share of losses
and expenses arising out of such liabilities and it will be required to
make additional contributions to the Partnership to the extent of a
deficit in its Capital Account due to such liabilities arising out of
events and transactions occurring prior to its termination).

SECTION 6.05. Distribution Upon Termination. Upon liquidation of the
Partnership, the assets of the Partnership remaining after the payment, or
reasonable provision therefor, of all Partnership liabilities (and the
establishment of reasonable reserves for contingent liabilities) shall be
distributed to the Partners in proportion to and to the extent of the positive
balances of their respective Capital Accounts. This Section 6.05 is intended to
comply with the requirements of Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2) and shall be interpreted and applied in a manner
consistent therewith.

15
<PAGE> 20

ARTICLE VII - Records; Reports to Partners

SECTION 7.01. Financial Records. The General Partner shall keep at the
principal office of the Partnership books of account in which shall be entered
fully and accurately the transactions of the Partnership and financial records
appropriate to the business of the Partnership, as well as the following:

(a) a current list of the full name and last known business or
residence address of each Partner set forth in alphabetical order
together with the contribution and the share in profits and losses of
each Partner;

(b) a copy of the Certificate of Limited Partnership, together
with executed copies of any powers of attorney pursuant to which any
certificate has been executed;

(c) copies of the Partnership's Federal, state, and local
income tax or information returns and reports, if any, for the six most
recent taxable years;

(d) copies of this Agreement and all amendments hereto;

(e) financial statements of the Partnership for the six most
recent fiscal years; and

(f) the Partnership's books and records as they relate to the
internal affairs of the Partnership for at least the current and past
three fiscal years.

SECTION 7.02. Annual Reports. As soon as reasonably practicable after
the end of each taxable year of the Partnership, the General Partner shall
prepare and mail to each Partner and to each former Partner who withdrew during
the applicable taxable year or its legal representative, such information as is
necessary to enable such Partner or former Partner or the legal representative
of such former Partner to prepare its respective Federal and state income tax
returns. In addition, as soon as reasonably practicable after the end of each
fiscal year of the Partnership, the General Partner shall prepare and mail to
each Partner and to each former Partner who withdrew during the applicable
fiscal year or to its legal representative a report including the following:

(a) such Partner's Capital Account balance as of the close of
such fiscal year;

(b) the sum of the Capital Account balances as of such date of
all the Partners;

<PAGE> 21
(c) statement of assets and liabilities of the Partnership at
the end of such fiscal year;

(d) profit and loss statement and statement of changes in
financial position for such fiscal year;

(e) statement of holdings of Securities of the Partnership;

(f) a description of the nature of each of the Partnership's
investments, the cost thereof and the valuation thereof established
pursuant to Article VIII; and

The financial statements referred to above shall be accompanied by the
report thereon, if any, of the independent accountants engaged by the
Partnership or, if there is no such report, by the certificate of the General
Partner that such financial statements were prepared without audit from the
books and records of the Partnership.

ARTICLE VIII - Valuation

SECTION 8.01. Valuation of Partnership Net Worth. In determining the
net worth of the Partnership, the value of any Partnership asset, the Capital
Accounts of the Partners, the value of any distribution, or in determining value
for any other purpose under this Agreement, the provisions of this Article VIII
shall apply.

17
<PAGE> 22
date, as the case may be. A Market Day shall be a day on which the New York
Stock Exchange is open for regular trading. If a valuation is taken other than
in connection with the annual reports described in Section 7.02, the General
Partner shall give notice of such valuation to the Limited Partners promptly
after it is determined.

SECTION 8.03. Valuing Securities and Other Assets. The following
provisions shall apply in valuing the assets of the Partnership:

(a) Listed Securities which are not restricted as to
saleableness or transferability shall be valued at the closing price as
of the Valuation Date. If any listed Security was not traded on such
date, then the mean of the closing high bid and low asked prices as of
the close of business on such date shall be used.

(b) Unlisted securities which are readily marketable shall be
valued at the mean of the closing bid and asked prices as of the
Valuation Date.

(c) Securities, whether listed or unlisted, for which market
quotations are available, but which are restricted as to saleableness
or transferability, shall be valued as provided in (a) and (b) above,
less a discount of from ten percent (10%) to twenty-five percent (25%)
of the value thereof as determined in good faith by the General
Partner. In determining the amount of such discount the General Partner
shall give consideration to the nature and length of such restriction
and the relative volatility of the market price of such Security.

(d) Securities for which market quotations are not readily
available and all other assets of the Partnership shall be valued at a
fair value as determined in good faith by the General Partner.

(f) Liabilities shall include, in addition to those recorded
on the books of the Partnership, such other accrued or contingent
liabilities as shall be determined in accordance with generally
accepted accounting principles.

(g) In determining the value of the interest of any Partner in
the Partnership, neither the goodwill nor the right to use the firm
name or trade name of the Partnership shall be considered as an asset
of the Partnership.

ARTICLE IX - Miscellaneous

18
<PAGE> 23
SECTION 9.01. Admission of Limited Partners. Except as provided in this
Section, no new Limited Partner shall be admitted to the Partnership and no
additional contribution of capital by a Limited Partner to the Partnership shall
be accepted.

(a) Additional Limited Partners. Additional Limited Partners
may be admitted in the discretion of the General Partner as of the
first day of July or the first day of January of any year and the
interest of such additional Limited Partner in the Partnership shall be
established by creating a Capital Account for such additional Limited
Partner as of that day in an amount equal to the contribution made by
such additional Limited Partner to the Partnership.

(b) Substituted Limited Partners. Substituted Limited Partners
may also be admitted in the discretion of the General Partner by
assignment or transfer of the interest of a Limited Partner or the
General Partner in accordance with Article V or Sections 3.01(c)(iii),
4.01(d) or 4.02, in which case the substituted Limited Partner will
take over the Capital Account of his assignor or transferor.

SECTION 9.02. Disputed Matters. Any controversy or dispute arising out
of this Agreement, interpretation of any of the provisions hereof, or the
actions of the General or Limited Partners hereunder shall be submitted to
arbitration before the National Association of Securities Dealers, Inc. ("NASD")
under the rules then obtaining of the NASD. If the NASD refuses to accept
jurisdiction of the matter, then the dispute shall be submitted to arbitration
before the New York Stock Exchange under the rules then obtaining of said
Exchange. Any such arbitration shall be held in San Francisco, California, and
judgment upon any award thus obtained may be entered in any court having
jurisdiction thereof. In any such arbitration each party to the arbitration
shall bear its own expenses, including expenses of attorneys, financial experts
and other witnesses; and any arbitration fees and expenses of the arbitrators
shall be divided equally between the disputing parties.

19
<PAGE> 24
Partner, the General Partner may (but shall not be obligated to) make such
payment or distribution, either wholly or partially, in Securities or other
property of the Partnership. The amount of any such payment or distribution
shall be deemed to be equal to the value of such securities or other property,
as determined under Article VIII, as of the effective date of their distribution
to or on behalf of the Partner or the Partner's legal representatives and the
decisions of the General Partner with respect to in-kind payments, including
decisions with respect to selection, apportionment and valuation of Securities
or other property, shall be conclusive and binding upon all Partners.

SECTION 9.04. General. This Agreement: (a) shall be binding on the
executors, administrators, estates, heirs and legal successors of the Partners;
(b) shall be governed by and construed in accordance with the laws of the State
of California; (c) may be executed in more than one counterpart as of the day
and year first above written; provided, however, that each separate counterpart
shall have been executed by the General Partner; and (d) contains the entire
Agreement among the Partners relating to the subject matter hereof. The waiver
of any of the provisions, terms or conditions contained in this Agreement shall
not be considered as a waiver of any of the other provisions, terms or
conditions hereof.

SECTION 9.05. Notices.

(a) To the Partners. Any notice to be given hereunder by the
Partnership to any Partner shall be in writing and signed by the
General Partner. Any such notice shall be conclusively deemed to have
been given if either delivered in person to such Partner or mailed by
registered or certified mail to such Partner at such Partner's address
set forth in Exhibit A. Any Partner may change their address for notice
by written notice to the Partnership.

(b) To the Partnership. Any notice to be given hereunder to
the Partnership shall be in writing and signed by the Partner giving
notice. Any such notice shall be conclusively deemed to have been given
if delivered in person or mailed by registered or certified mail,
postage prepaid to the General Partner at its address set forth in
Exhibit A, or such other address as the General Partner may from time
to time designate by notice to all Partners.

SECTION 9.07. Force Majeure. Whenever any act or thing is required of
the Partnership hereunder within any specified period of time, the Partnership
shall be entitled to

20
<PAGE> 25
such additional period of time to do such acts or things as shall equal any
period of delay resulting from causes beyond the reasonable control of the
Partnership, including, without limitation, bank holidays, actions of
governmental agencies, closing the New York Stock Exchange at times other than
normal closing dates, and financial crises of a nature materially affecting the
purchase and sale of Securities.

SECTION 9.08. Amendments. Except as otherwise specifically provided
herein, the terms and provisions of this Agreement may be modified or amended at
any time and from time to time only with the written consent of (1) the General
Partner and (2) Limited Partners (excluding Sutro) representing in excess of
fifty percent (50%) of the combined Capital Accounts of all Limited Partners
insofar as is consistent with the laws governing this Agreement; provided,
however, that without the specific written consent of each Partner adversely
affected thereby no such modification or amendment shall (i) increase the
obligation of a Limited Partner beyond that set forth in Section 1.04, (ii)
reduce the Capital Account of any Partner or its rights to distribution and
withdrawal with respect thereto; or (iii) amend Section 1.05 to permit
Partnership activities which would subject a Limited Partner to Federal or state
taxation which such Partner would not be subject to in the absence of such
activity. Without unanimous consent no amendment or modification may be made (x)
which would cause the Partnership to cease to be a Limited Partnership under
applicable state law or (y) which would amend this Section 9.08.

SECTION 9.10. Power of Attorney. Each Limited Partner does hereby
constitute and appoint Fergus Henehan, Mary Jane Delaney and Jack Luikart, and
each of them, its true and lawful representative, in its name, place and stead,
to make, execute, sign, acknowledge, deliver and file all such instruments,
documents and certificates which may from time to time be required by the laws
of the United States of America, the State of California, or any other state in
which the Partnership shall determine to do business, or any political
subdivision or agency thereof, to effectuate, implement and continue the valid
and subsisting existence of the Partnership, including, without limitation, a
Certificate of Limited Partnership and amendments thereto and any such
certificate or amendment filed for the purpose of admitting the undersigned as
Limited Partners of the Partnership.

21
<PAGE> 26
IN WITNESS WHEREOF, the General Partner and the Limited Partners have
hereunto set their hands and seals as of the date first set forth above.

GENERAL PARTNER

The Sutro Group

By:____________________________________

LIMITED PARTNER

_______________________________________

_______________________________________
(Print Name)

S.S.#__________________________________

Allocation Accepted: $
=================
STATE OF )
) ss:
COUNTY OF )

Then personally appeared before me __________________________, known to me,
and acknowledged the same to be his/her free act and deed.

_______________________________________
Notary

<PAGE> 1
Exhibit 10.18
SUTRO VENTURE PARTNERS II, LP

LIMITED PARTNERSHIP AGREEMENT

March 21, 1996
<PAGE> 2
TABLE OF CONTENTS

Page
----
ARTICLE I - General Provisions ............................................. 1
SECTION 1.01. Definitions ............................................. 1
(a) Agreement ................................................. 1
(b) Capital Account ........................................... 1
(c) Capital Commitment......................................... 1
(d) Capital Contribution ...................................... 1
(e) Certificate of Limited Partnership ........................ 1
(f) Code ...................................................... 1
(g) CRLPA ..................................................... 1
(h) Disability................................................. 2
(i) General Partner............................................ 2
(j) Limited Partner............................................ 2
(k) Partner ................................................... 2
(l) Partnership ............................................... 2
(m) Securities ................................................ 2
(n) Sutro ..................................................... 2
(o) Sutro Employee ............................................ 2
(p) Voting Control ............................................ 2
SECTION 1.02. Partnership Name ........................................ 2
SECTION 1.03. Fiscal Year.............................................. 2
SECTION 1.04. Nature and Liability of Partners......................... 2
SECTION 1.05. Purposes of Partnership.................................. 3
SECTION 1.06. Powers of Partnership ................................... 3
SECTION 1.07. General Partner as Limited Partner ...................... 4

ARTICLE II - Management of Partnership ..................................... 4
SECTION 2.01. General.................................................. 4
SECTION 2.02. Services of General Partner.............................. 4
SECTION 2.03. Compensation of General Partner.......................... 4
(a) No Management Fee.......................................... 4
(b) Expenses................................................... 4
SECTION 2.04. Restrictions ............................................ 5
(a) No Services by Limited Partners............................ 5
(b) Partnership Credit......................................... 5
(c) Limitation on Borrowing and Pledging....................... 5
(d) Additional Restrictions.................................... 5
SECTION 2.05. Reliance by Third Parties................................ 5
SECTION 2.06. Partner's Transactions................................... 6
SECTION 2.07. Exculpation of Liability................................. 6

(i)
<PAGE> 3
Page
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SECTION 2.08. Indemnification .................................... 6

ARTICLE III - Capital Accounts; Allocations; Distributions ................ 7
SECTION 3.01. Capital Contributions .............................. 7
(a) Contributions ......................................... 7
(b) Vesting ............................................... 8
SECTION 3.02. Capital Accounts ................................... 8
SECTION 3.03. Deficit Capital Accounts ........................... 9
SECTION 3.04. Allocations ........................................ 9
(a) Book Items ............................................ 9
(b) Tax Items ............................................. 9
(c) Allocations on Withdrawal .............................. 9
(d) Qualified Income Offset ............................... 10
(e) General Partner Nonrecourse Debt ...................... 10
(f) Curative Allocations .................................. 10
SECTION 3.05. Distributions to Partners .......................... 11
(a) Distributions to Partners ............................. 11
(b) Repayment of Distributions ............................ 11
SECTION 3.06. No Interest on Capital ............................. 11

ARTICLE IV - Withdrawal of Limited Partner ................................ 11
SECTION 4.01. Withdrawal of Limited Partner ...................... 11
SECTION 4.02. Legal Representatives .............................. 12
SECTION 4.03. Mandatory Withdrawal ............................... 12
SECTION 4.04. Liquidating Share .................................. 12
SECTION 4.05. Cessation of Participation ......................... 13

ARTICLE V - Transfer of Partnership Interests.............................. 13
SECTION 5.01. Assignability of Interests ......................... 13
SECTION 5.02. Substituted Limited Partners........................ 13
SECTION 5.03. Obligations of Assignee............................. 14

ARTICLE VI - Duration and Termination of Partnership....................... 14
SECTION 6.01. Duration............................................ 14
SECTION 6.02. Withdrawal of Limited Partner....................... 14
SECTION 6.03. Withdrawal of General Partner....................... 14
SECTION 6.04. Liquidation ........................................ 15
SECTION 6.05. Distribution Upon Termination....................... 15

ARTICLE VII - Records; Reports to Partners................................. 16
SECTION 7.01. Financial Records................................... 16
SECTION 7.02. Annual Reports...................................... 16

(ii)
<PAGE> 4
<TABLE>
<CAPTION>

Page
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<S> <C>
SECTION 7.03. Inspection............................................... 17
SECTION 7.04. Tax Returns.............................................. 17

ARTICLE VIII - Valuation.................................................... 17
SECTION 8.01. Valuation of Partnership Net Worth ...................... 17
SECTION 8.02. Valuation Date........................................... 17
SECTION 8.03. Valuing Securities and Other Assets...................... 18

ARTICLE IX - Miscellaneous.................................................. 18
SECTION 9.01. Admission of Limited Partners............................ 19
(a) Additional Limited Partners................................. 19
(b) Substituted Limited Partners................................ 19
(c) Procedure................................................... 19
SECTION 9.02. Disputed Matters ........................................ 19
SECTION 9.03. Payments in Kind ........................................ 19
SECTION 9.04. General.................................................. 20
SECTION 9.05. Notices.................................................. 20
(a) To the Partners............................................. 20
(b) To the Partnership.......................................... 20
SECTION 9.06. Execution of Certificate of Limited Partnership and Other
Documents.......................................................... 20
SECTION 9.07. Force Majeure............................................ 20
SECTION 9.08. Amendments............................................... 21
SECTION 9.09. Headings................................................. 21
SECTION 9.10. Power of Attorney ....................................... 21
</TABLE>

(iii)
<PAGE> 5
SUTRO VENTURE PARTNERS II, LP

LIMITED PARTNERSHIP AGREEMENT

ARTICLE I - General Provisions

SECTION 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a) Agreement. "Agreement" means this Limited Partnership Agreement as
it may from time to time be amended.

(b) Capital Account. "Capital Account" means those separate capital
accounts which are maintained for each Partner as defined in Section 3.02.

(c) Capital Commitment. "Capital Commitment" means, as to any Partner,
the total amount agreed to be paid to the Partnership by such Partner, as set
forth on the signature page hereof or counterpart thereof and reflected on
Exhibit A hereto, as the same may be reduced by Section 3.

(d) Capital Contribution. "Capital Contribution" means, as to any
Partner, the total amount of money actually contributed to the Partnership by
such Partner.

(e) Certificate of Limited Partnership. The "Certificate of Limited
Partnership" means the certificate of limited partnership for the Partnership
and all amendments thereto required under the laws of the State of California to
be signed and sworn to by the Partners of the Partnership and filed for
recording in the appropriate public offices within the State of California to
perfect or maintain the Partnership as a limited partnership under the laws of
the State of California and/or to effect the admission, withdrawal or
substitution of any Partner of the Partnership.

(f) Code. "Code" means the Internal Revenue Code, as amended.

(g) CRLPA. "CRLPA" means the California Revised Limited Partnership
Act, as amended from time to time.
<PAGE> 6
(h) Disability. "Disability" means permanent inability to be gainfully
employed at Sutro or its affiliates.

(j) Limited Partner. "Limited Partner" means any person who is or shall
become a Limited Partner of the Partnership.

(k) Partner. "Partner" means the General Partner or any Limited
Partner.

(l) Partnership. "Partnership" means Sutro Venture Partners II, LP, a
California limited partnership.

(m) Securities. "Securities" means securities of every kind or
description.

(o) Sutro Employee. "Sutro Employee" means an individual employed [on a
full-time basis] by Sutro or any of its affiliates.

SECTION 1.02. Partnership Name. The Partnership shall do business under
the name and style of "Sutro Venture Partners II, LP," or such other name as the
General Partner may designate.

SECTION 1.03. Fiscal Year. The fiscal year of the Partnership shall be
the calendar year, or such other fiscal year as the General Partner shall
designate or the Code shall require.

SECTION 1.04. Nature and Liability of Partners. The General Partner
shall have such liability for the repayment, satisfaction and discharge of the
debts, liabilities and obligations of the Partnership as is provided by the
CRLPA for a general partner of a limited partnership. The Limited Partners who
execute this Agreement or are otherwise admitted as Limited Partners shall be
liable to the Partnership for the repayment, satisfaction and discharge

2
<PAGE> 7
of its debts, liabilities and obligations only (i) to the extent of their
respective Capital Contributions and (ii) to the extent provided in Section
15666 of the CRLPA.

The Partners hereby agree among themselves to share in accordance with
the terms of this Agreement all losses, liabilities or expenses suffered or
incurred by virtue of the operation of the Partnership, provided that Limited
Partners shall share such losses, liabilities, and expenses only up to the limit
of their respective Capital Contributions. The General Partner agrees to assume
and be liable for all such losses, liabilities and expenses not covered by the
aggregate Capital Contributions of the Partners.

SECTION 1.05. Purposes of Partnership. The purposes of the Partnership
are to make investments in investment partnerships or companies formed for the
purpose of investing in the Securities of publicly and privately held
businesses, in order to provide incentives to investment executives and senior
management personnel of Sutro or its affiliates, and others contributing to the
success of Sutro or its affiliates, who are given the opportunity to participate
as Limited Partners in the Partnership. Limited Partnership interests shall be
subject to future vesting, redemption and other provisions hereof which relate
to the continued service of such executives.

SECTION 1.06. Powers of Partnership. In furtherance of the purposes of
the Partnership set forth in Section 1.05, the Partnership shall have the
following powers:

(d) To have and maintain an office within the State of
California and in connection therewith to rent or acquire office space,
engage personnel and do such other acts and things as may be necessary
or advisable in connection with the maintenance of such office, and on
behalf of and in the name of the Partnership to pay and incur
reasonable expenses and obligations for legal, accounting, consultative
and custodial services, and all other reasonable costs and expenses
incident to the operation of the Partnership;

3
<PAGE> 8
(e) To form and own one or more corporations, trusts or
limited partnerships, provided that no entity so formed may do directly
or indirectly what the Partnership is prohibited by this Agreement from
doing; and

(f) To enter into, make and perform all such contracts,
agreements and other undertakings as may be necessary or advisable or
incident to the carrying out of the foregoing objects and purposes.

ARTICLE II - Management of Partnership

SECTION 2.03. Compensation of General Partner.

(a) No Management Fee. The General Partner shall not receive
any fees or compensation from the Partnership for its services to the
Partnership.

4
<PAGE> 9
legal, consulting and audit expenses incurred in the organization of
the Partnership, preparing any amendment to the Partnership Agreement,
and performing any other legal and audit services for the Partnership,
interest expenses, and brokerage fees, commissions and discounts
incurred in connection with the purchase or sale of Securities, and
other out-of-pocket expenses incurred in connection with the making and
monitoring of the Partnership investments and the administration of the
Partnership.

SECTION 2.04. Restrictions. Partners shall be restricted in their
activities as follows:

(i) If in the reasonable judgment of the General Partner
it is desirable to do so to accomplish the purposes of the
Partnership, the Partnership may borrow money from banks or
other recognized financial institutions and secure payment of
any such borrowing by hypothecation or pledge of Partnership
properties or otherwise provided that (a) any such borrowing
has an original maturity of less than one year and (B) the
aggregate of all indebtedness of the Partnership for money
borrowed outstanding at any one time does not exceed 5% of the
sum of the Capital Contributions of all Partners.

(d) Additional Restrictions. The Partnership shall not make
short sales of Securities not owned by the Partnership.

5
<PAGE> 10
shall not be deemed to limit the liabilities and obligations of the General
Partner as set forth in this Agreement.

SECTION 2.06. Partner's Transactions. Nothing in this Agreement shall be
construed to prohibit any Partner from buying or selling securities for such
Partner's own account, including securities of the same issuers as those held
by the Partnership.

SECTION 2.07. Exculpation of Liability. The General Partner and its
Affiliates (as defined in Section 2.08) shall have no liability to the
Partnership or to any Partner for any loss suffered by the Partnership which
arises out of any action or inaction of the General Partner or its Affiliates
if the General Partner or its Affiliates, in good faith, determined that such
course of conduct was in the best interests of the Partnership and such course
of conduct did not constitute negligence or misconduct of the General Partner
or its Affiliates.

The Partnership shall not incur the cost of the portion of any insurance
which insures any party against any liability as to which such party is herein
prohibited from being indemnified.

For the purposes of Sections 2.07 and 2.08, the term "Affiliates" shall
mean any person performing services on behalf of the Partnership who: (1)
directly or indirectly controls, is controlled by, or is under common control
with the General Partner; or (2) owns or controls 10% or more of the
outstanding voting securities of the General Partner; or (3) is an officer,
director, employee or agent of the General Partner or of any of the persons
identified in the preceding clauses (1) or (2).

The right of indemnification hereby provided shall not be exclusive of or
affect any other rights to which the General Partner or any Affiliate may be
entitled. Nothing contained

<PAGE> 11
in this Section 2.08 shall limit any lawful rights to indemnification existing
independently of this Section.

The right of indemnification provided by this Section 2.08 shall not be
construed to increase the liability of Limited Partners as set forth in Section
1.04.

ARTICLE III - Capital Accounts; Allocations; Distributions

SECTION 3.01. Capital Contributions.

(a) Contributions. (i) On or prior to the date of becoming a Limited
Partner of the Partnership, each Limited Partner shall make an initial
Capital Contribution in cash equal to one-third of his or her Capital
Commitment. The remainder of each Limited Partner's Capital Commitment
shall be due and payable in cash installments at such times and in
such amount as the General Partner shall determine in its reasonable
discretion. The Capital Contribution of the General Partner shall at
all times be not less than one percent (1%) of the aggregate of all
Capital Contributions of the Partners and the General Partner shall
make any additional Capital Contributions required to maintain such
Capital Contribution of not less than one percent (1%). The aggregate
of all Capital Contributions shall be, and hereby is agreed to be,
available to the Partnership to carry out the purposes and objects of
the Partnership.

(ii) If after written notification from the General Partner, a
Limited Partner (a "Defaulting Limited Partner") does not make any
payment required pursuant to Section 3.01(a), a second request for
payment shall be made to such Defaulting Limited Partner by the means
set forth in Section 9.05(a). If the full amount of the payment then
due is not received by the Partnership within 15 days after the
receipt of such second notice by the Defaulting Limited Partner, the
Partnership, by the General Partner, may take one or the other of the
following actions, which are in addition to and not in limitation of
any other right or remedy which the Partnership may have: (x) the
Partnership may commence legal proceedings against the Defaulting
Limited Partner to collect the due and unpaid amount plus the expenses
of collection, including attorneys' fees; (y) upon notice to the
Defaulting Limited Partner, the Partnership may elect to cancel the
interest of the Defaulting Limited Partner in the Partnership, at
which time the interest of such Defaulting Limited Partner shall
revert and inure to the benefit of the Partnership; or (z) upon notice
to the Defaulting Limited Partner, a designee of the General Partner
may assume the entire unpaid balance of the Capital Commitment of the
Defaulting Limited Partner and succeed to a fraction of the interest
of the Defaulting Limited Partner of which the unpaid balance of its
Capital Commitment is the numerator and the total Capital Commitment
of the Defaulting

<PAGE> 12
Limited Partner is the denominator, and become a substitute Limited
Partner to the extent of such interest. Further, any designee who
assumes the unpaid balance of the Capital Commitment of the Defaulting
Limited Partner pursuant to this Section 3.01(b)(ii) may, with the
consent of the General Partner, deliver to the Partnership an
additional amount equal to the lesser of (a) the Defaulting Limited
Partners' Capital Contribution, or (B) the value of such Defaulting
Limited Partner's interest in the Partnership at the time of such
notice, as determined in good faith by the General Partner. The
additional amount so delivered (less such an amount as the General
Partner may deem appropriate to cover the costs incurred in connection
with the default of the Limited Partner) shall be tendered to the
Defaulting Limited Partner in cash. On the date of such tender such
Defaulting Limited Partner shall cease to be a Limited Partner or have
any further right in the Partnership, and the designee delivering such
additional amount shall become a Limited Partner to the extent of the
whole interest of the Defaulting Limited Partner.

(b) Vesting. Notwithstanding the foregoing, the interest of each
Limited Partner who was a Sutro Employee at the time he or she became a
Limited Partner shall be subject to a vesting requirement that the Limited
Partner remain a Sutro Employees for a consecutive period of four (4) years
after the date of such Limited Partner's admission to the Partnership. This
vesting requirement may be waived in whole or in part by the General
Partner in its discretion and shall be waived in the event of termination
of employment by reason of death or Disability, or, in the sole discretion
of Sutro, normal retirement under the applicable policies of Sutro and its
affiliates. Upon termination of such employment of a Limited Partner for
any reason within four (4) years from the date of such Limited Partner's
admission to this Partnership, unless the General Partner otherwise
determines in its discretion:

(i) The right of the Limited Partner to any distributions of
assets of the Partnership under Section 3.05 shall terminate; and

(ii) The Limited Partner shall be required to withdraw from the
Partnership in accordance with Section 4.03 and such Limited Partner's
interest shall be liquidated under Section 4.04; provided, however,
that the General Partner may elect instead, in its sole discretion, to
purchase the limited partnership interest of such Limited Partner on
equivalent terms.

8
<PAGE> 13
In any event, the Partnership shall adjust the Capital Accounts of the Partners
annually, and upon the admission of a new Partner or the withdrawal of an
existing Partner, to reflect revaluations of Partnership property in accordance
with Article VIII. Whenever the Capital Accounts of the Partners are adjusted
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect
revaluations of Partnership property, (i) the Capital Accounts of the Partners
shall be adjusted in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain or loss, as computed for book purposes in accordance with Article
VIII, with respect to such property, and (ii) the Partners' distributive shares
of depreciation, depletion, amortization and gain or loss, as computed for tax
purposes, with respect to such property shall be determined so as to take
account of the variation between the adjusted federal income tax basis and book
value of such property in the same manner as under Code Section 704(c).

SECTION 3.03. Deficit Capital Accounts. If upon the liquidation of
the General Partner's interest in the Partnership the General Partner has a
deficit balance in its Capital Account, the General Partner shall contribute to
the Partnership an amount equal to such deficit balance. Any such contribution
shall be made by the General Partner no later than the end of the taxable year
of the Partnership during which such liquidation occurs (or, if later, within
ninety (90) days after such liquidation). This Section 3.03 is intended to
comply with the requirements of Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(3) and shall be interpreted and applied in a manner
consistent therewith.

SECTION 3.04. Allocations.

(a) Book Items. Items of income, gain, deduction and loss, as
computed for book purposes (including any such items resulting from any
revaluation of property under Section 3.02) for any fiscal year or
portion thereof shall be allocated among the Partners pro rata in
proportion to the Capital Account balances of the Partners.

(b) Tax Items. Items of income, gain, deduction and loss, as
computed for federal income tax purposes, shall be allocated in the
same manner as under Code Section 704(c).

9
<PAGE> 14
Regulations Section 1.704-1(b)(2)(iv)(q). Further, notwithstanding Sections 3.02
and 9.01(b), if a Limited Partner's interest is purchased by the General Partner
pursuant to Section 3.01(b)(ii) and the purchase price is less than the balance
of the Capital Account of the Limited Partner, then (i) the excess of (x) the
balance in the Limited Partner's Capital Account over (y) the amount paid by the
General Partner shall be allocated among all the remaining Partners (other than
any Limited Partners who, at the time of their admission to the Partnership as
Limited Partners, were not Sutro Employees) in proportion to their Capital
Account balances and (ii) the General Partner (and any assignee of the General
Partner) shall have a Capital Account balance with respect to the purchased
interest in the Partnership equal to the purchase price paid by the General
Partner.

(d) Qualified Income Offset. No allocation shall be made pursuant to
Section 3.04(a) to the extent that it shall cause or increase deficit balance
in any Limited Partner's Capital Account (in excess of such Partner's
obligation, if any, to restore a deficit in his/her Capital Account) as of the
end of the Partnership taxable year to which such allocation relates. In making
the foregoing determination, a Limited Partner's Capital Account shall be
reduced by the amounts described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6). Any Limited Partner who unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) shall be allocated
items of income and gain in an amount and manner sufficient to eliminate, to
the extent required by the Treasury Regulations, such deficit balance as
quickly as possible. This Section 3.04(d) is intended to comply with the
alternate test for economic effect set forth in Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in a manner
consistent therewith.

(e) General Partner Nonrecourse Debt. If a Partner makes a nonrecourse
loan to the Partnership which is "partner nonrecourse debt" within the meaning
of Treasury Regulations Section 1.704-2(b)(4), then any item of Partnership
loss, deduction or Code Section 705(a)(2)(B) expenditure that is attributable
to such debt shall be allocated to such Partner and appropriate items of income
and gain shall be "charged back" to such Partner. This Section 3.04(e) is
intended to comply with Treasury Regulations Section 1.704-2(I) and shall be
interpreted and applied in a manner consistent herewith.

(f) Curative Allocations. The allocations set forth in Section 3.04(d)
and 3.04(e) (the "Regulatory Allocations") are intended to comply with the
requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and Treasury
Regulations Section 1.704-(2)(i), respectively. Notwithstanding any other
provisions of this Section 3.04 (other than the Regulatory Allocations), the
Regulatory Allocations shall be taken into account in allocating other items of
income, gain, deduction and loss among the Partners, pursuant to Sections
3.04(a) and 3.04(c), so that, to the extent

10
<PAGE> 15
possible, the net amount of such allocations of other items and the
Regulatory Allocations to each Partner shall be equal to the net amount that
would have been allocated to each such Partner if the Regulatory Allocations
had not occurred.

SECTION 3.05. Distributions to Partners.

(a) Distributions to Partners.

(i) It shall be within the sole discretion of the General
Partner as to whether, when and in what amount a distribution of cash
or other assets of the Partnership shall be made. Such distributions
(other than a distribution made in connection with the withdrawal of a
Partner under Article IV) shall be made to all of the Partners in the
ratio that their respective Capital Accounts bear to one another at
the time of the distribution.

(ii) The General Partner may, but shall not be required to, make
annual distributions to each Partner in an amount which the General
Partner estimates is sufficient to pay federal and state income taxes
attributable to allocations under Section 3.04(b). Notwithstanding
Section 3.05(a)(i), any distributions made pursuant to this Section
3.05(a)(ii) shall be made to the Partners in proportion to the excess
of cumulative income and gain over cumulative deductions and losses
allocated to each of the Partners pursuant to Section 3.04(b).

(b) Repayment of Distributions. Partners shall be required to repay
Partnership distributions to the extent provided in the CRLPA.

SECTION 3.06. No Interest on Capital. No Partner shall be entitled to
receive interest from the Partnership on his/her Capital Account.

ARTICLE IV - Withdrawal of Limited Partner

SECTION 4.01. Withdrawal of Limited Partner. Except as otherwise
provided in Section 4.03 hereof, no Limited Partner shall be permitted to
withdraw from the Partnership until his interest in the Partnership is vested
under paragraph 3.01(b) and then only with the approval of the General Partner,
which approval may be withheld if the General Partner does not believe that
such withdrawal is in the best interests of the other Limited Partners, whether
because of the cash position of the Partnership, the undesirability of
liquidating any of the investments of the Partnership, or otherwise. The
following provisions shall govern with respect to any withdrawals approved by
the General Partner:

11
<PAGE> 16
(a) No such withdrawal shall be made except as of the last day of a
fiscal year of the Partnership;

(b) Partial withdrawals shall not be permitted and a Partner
desiring to withdraw must withdraw his/her entire interest in the
Partnership;

(c) The Partner desiring to withdraw must notify the General Partner
in writing at least sixty (60) days prior to the close of the fiscal year
in which such Partner wishes to effect his/her withdrawal; and

(d) The General Partner may, if necessary to accommodate a request
for withdrawal by a Limited Partner, attempt to obtain a purchaser of the
whole or a part of such Limited Partner's interest.

SECTION 4.02. Legal Representatives. In the event any Limited Partner
shall die or shall be declared incompetent or insane or shall be adjudicated a
bankrupt, the legal representative of such Limited Partner shall upon written
notice to the General Partner of the happening of any of such events become an
assignee of such Limited Partner's interest subject to all of the terms of this
Agreement as then in effect. Such legal representative may not withdraw from
the Partnership except in accordance with Section 4.01. If the General Partner
does not approve withdrawal of the interest of such legal representative, the
General Partner will use its best efforts, without legal obligation, to find
another person, suitable to the General Partner, willing to assume the
Partnership interest of such legal representative.

SECTION 4.03. Mandatory Withdrawal. Unless the General Partner otherwise
determines, a Limited Partner who was a Sutro Employee at the time he or she
became a Limited Partner shall be required to withdraw from the Partnership upon
the termination of his/her employment by Sutro and its affiliates prior to the
vesting of his/her interest under paragraph 3.01(b), except for a termination by
reason of death or Disability, or, in the sole discretion of Sutro, normal
retirement under the applicable policies of Sutro and its affiliates, and such
Limited Partner's Partnership interest shall be liquidated under Section 4.04 or
purchased by the General Partner under Section 3.01(b)(ii).

SECTION 4.04. Liquidating Share. In the event any Limited Partner shall
withdraw or be required to withdraw in accordance with the provisions of this
Article IV, there shall be paid to such Limited Partner or his/her legal
representative within 60 days after the last day of the fiscal year of the
Partnership which constitutes the effective date of withdrawal, an amount equal
to such Partner's positive Capital Account balance as of the effective date of
withdrawal; provided, however, that in the event of a mandatory withdrawal
under Section 4.03, such Partner shall be paid an amount equal to the lesser of
(i) his/her Capital Contribution(s) less distributions paid to such Partner
prior to the withdrawal date, other than distributions paid under Section
3.05(a)(ii), or (ii) his/her positive Capital Account balance.

<PAGE> 17
SECTION 4.05. Cessation of Participation. From and after the effective
date of withdrawal of a Partner from the Partnership under this Article IV, no
interest shall be payable on such Partner's interest in the Partnership to the
date of payout.

ARTICLE V - Transfer of Partnership Interests

SECTION 5.01. Assignability of Interests.

(a) Subject to the provisions of Section 4.02 hereof, the interest of
a Limited Partner shall not be assignable without the prior written consent
of the General Partner. No assignment shall be binding upon the Partnership
until the General Partner receives an executed copy of such assignment in
form and substance satisfactory to the General Partner. The assignee of
such interest may become a substituted Limited Partner only upon the terms
and conditions of Sections 5.02 and 9.01.

(b) The interest of the General Partner shall not be assignable;
provided, however, that in no event shall the interest of the General
Partner be reduced below a 1% interest in the Capital Accounts of the
Partners and that such interest may be assigned to a successor to all or
substantially all of the business of the General Partner the Voting Control
of which is held by those persons then holding Voting Control of the
General Partner upon (i) the execution by the General Partner of a written
assignment, the execution by the successor of this Agreement, and the
written assumption by the successor of the obligations of the General
Partner hereunder; and (ii) the receipt by the Partnership of an opinion of
counsel that such assignment and assumption will not result in the
Partnership being classified as an association for Federal income tax
purposes. In the event of such assignment, the successor shall become the
General Partner hereunder, and the predecessor and successor General
Partner shall cause the execution of any necessary papers including,
without limitation, an amendment to the Certificate of Limited Partnership
to record the substitution of the successor as General Partner.

SECTION 5.02. Substituted Limited Partners. No Limited Partner shall have
the right to substitute an assignee as a Limited Partner in his/her place. The
General Partner shall have the right, in its discretion, to admit as a
substituted Limited Partner any person, firm or corporation acquiring a
partnership interest by assignment from another Limited Partner or from the
General Partner. The admission of an assignee as a substituted Limited Partner
shall be conditioned upon the assignee's written assumption of all obligations
of the assigning Limited Partner and execution of this Agreement as a Limited
Partner. Upon acceptance of a substituted Limited Partner, the General Partner
shall forthwith amend the Certificate of Limited Partnership and any other
necessary papers to show the substitution of such assignee in place of the
assigning Limited Partner. The General Partner's failure or refusal to admit an
assignee as a substituted Limited Partner shall not affect the right of such
assignee to receive

13
<PAGE> 18
the share of profits or other distribution or compensation to which its
assignor would otherwise be entitled.

ARTICLE VI - Duration and Termination of Partnership

SECTION 6.03 Withdrawal of General Partner.

(a) The General Partner may withdraw at any time after March 21,
2001 by giving 90 days prior written notice to the other Partners. If
Limited Partners whose Capital Accounts constitute in excess of 66 2/3% of
all Capital Accounts consent in writing executed within such 90-day period
to the continuation of the Partnership and elect a new General Partner, the
Partnership shall not terminate but shall continue in existence as though
no such withdrawal or filing had occurred, except that the new General
Partner shall be substituted for the former General Partner. Any Limited
Partner who does not consent to such continuation shall have the right to
withdraw by giving notice within 90 days after having been notified of the
continuation of the Partnership and shall be paid in the manner set forth
in Section 4.04.

14
<PAGE> 19
Limited Partner hereunder, including the right to receive allocations and
distributions on the same basis as all other Limited Partners, and shall
not be entitled to receive any further allocations or distributions to
which the General Partner is entitled hereunder. Upon becoming a Limited
Partner, such former General Partner's Capital Account and Capital
Commitment shall initially be the same as they were on the effective date
of such continuation. Once the General Partner ceases to be such for
whatever reason and becomes a Limited Partner hereunder, such former
General Partner will no longer be personally liable with respect to
Partnership liabilities arising out of events and transactions occurring
after its termination as General Partner (i.e., its Capital Account will be
debited for its shares, if any, as Limited Partner of the losses and
expenses arising out of such liabilities but it will not be required to
make additional contributions to the Partnership to satisfy such
liabilities). However, a former General Partner will remain personally
liable for all Partnership liabilities arising out of events and
transactions occurring prior to such former General Partner's termination
as General Partner (i.e., its Capital Account will be debited its share of
losses and expenses arising out of such liabilities and it will be required
to make additional contributions to the Partnership to the extent of a
deficit in its Capital Account due to such liabilities arising out of
events and transactions occurring prior to its termination).

(a) sell, at such prices and upon such terms as the liquidator in its
sole discretion may deem appropriate, any or all of the Securities,
properties and assets of the Partnership, provided that such sales shall
only be made for cash and, when possible, consummated within ninety (90)
days after the date of termination; and provided further that the
liquidator shall not deal directly or indirectly with the Partnership for
its own account without the approval in writing of all of the Limited
Partners; and

(b) within ninety (90) days after the date of termination or as soon
thereafter as possible, effect distribution of the properties and assets of
the Partnership in cash or in kind in the manner set forth in Section 6.05.

SECTION 6.05 Distribution Upon Termination. Upon liquidation of the
Partnership, the assets of the Partnership remaining after the payment, or
reasonable provision therefor, of all Partnership liabilities (and the
establishment of reasonable reserves for contingent liabilities) shall be
distributed to the Partners in proportion to and to the extent of the positive
balances of their respective Capital Accounts. This Section 6.05 is intended to

<PAGE> 20
comply with the requirements of Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2) and shall be interpreted and applied in a manner
consistent therewith.

ARTICLE VII -- Records; Reports to Partners

(a) a current list of the full name and last known business or residence
address of each Partner set forth in alphabetical order together with
the contribution and the share in profits and losses of each Partner;

(b) a copy of the Certificate of Limited Partnership, together with
executed copies of any powers of attorney pursuant to which any
certificate has been executed;

(c) copies of the Partnership's Federal, state, and local income tax or
information returns and reports, if any, for the six most recent
taxable years;

(d) copies of this Agreement and all amendments hereto;

(e) financial statements of the Partnership for the six most recent fiscal
years; and

(f) the Partnership's books and records as they relate to the internal
affairs of the Partnership for at least the current and past three
fiscal years.

SECTION 7.02. Annual Reports. As soon as reasonably practicable after the
end of each taxable year of the Partnership, the General Partner shall prepare
and mail to each Partner and to each former Partner who withdrew during the
applicable taxable year or its legal representative, such information as is
necessary to enable such Partner or former Partner or the legal representative
of such former Partner to prepare its respective Federal and state income tax
returns. In addition, as soon as reasonably practicable after the end of each
fiscal year of the Partnership, the General Partner shall prepare and mail to
each Partner and to each former Partner who withdrew during the applicable
fiscal year or to its legal representative a report including the following:

(a) such Partner's Capital Account balance as of the close of such fiscal
year;

(b) the sum of the Capital Account balances as of such date of all the
Partners;

<PAGE> 21
(c) statement of assets and liabilities of the Partnership at the end
of such fiscal year;

(d) profit and loss statement and statement of changes in financial
position for such fiscal year;

(e) statement of holdings of Securities of the Partnership;

(f) a description of the nature of each of the Partnership's
investments, the cost thereof and the valuation thereof established
pursuant to Article VIII; and

(g) such other financial information and documents as the General
Partner deems appropriate, as a Limited Partner may reasonably request, or
as is required by this Agreement and any amendments hereto.

SECTION 7.04. Tax Returns. The General Partner will file all Federal,
state or other income tax returns required of the Partnership and will supply
to each Limited Partner such Partner's Form K-1 submitted with the Partner's
Federal tax return. Upon the request of any Partner, subject to the approval of
the General Partner, the Partnership shall elect, pursuant to Code Section 754,
to adjust the basis of Partnership property as permitted and provided in Code
Sections 734 and 743.

ARTICLE VIII - Valuation

SECTION 8.01. Valuation of Partnership Net Worth. In determining the net
worth of the Partnership, the value of any Partnership asset, the Capital
Accounts of the Partners, the value of any distribution, or in determining
value for any other purpose under this Agreement, the provisions of this
Article VIII shall apply.

SECTION 8.03. Valuing Securities and Other Assets. The following
provisions shall apply in valuing the assets of the Partnership:

(a) Listed Securities which are not restricted as to saleableness
or transferability shall be valued at the closing price as of the
Valuation Date. If any listed Security was not traded on such date,
then the mean of the closing high bid and low asked prices as of the
close of business on such date shall be used.

(b) Unlisted securities which are readily marketable shall be
valued at the mean of the closing bid and asked prices as of the
Valuation Date.

(c) Securities, whether listed or unlisted, for which market
quotations are available, but which are restricted as to saleableness
or transferability, shall be valued as provided in (a) and (b) above,
less a discount of from ten percent (10%) to twenty-five percent (25%)
of the value thereof as determined in good faith by the General Partner.
In determining the amount of such discount the General Partner shall
give consideration to the nature and length of such restriction and the
relative volatility of the market price of such Security.

(d) Securities for which market quotations are not readily
available and all other assets of the Partnership shall be valued at a
fair value as determined in good faith by the General Partner.

(f) Liabilities shall include, in addition to those recorded on the
books of the Partnership, such other accrued or contingent liabilities
as shall be determined in accordance with generally accepted accounting
principles.

ARTICLE IX - Miscellaneous

(b) Substituted Limited Partners. Substituted Limited Partners may
also be admitted in the discretion of the General Partner by assignment or
transfer of the interest of a Limited Partner or the General Partner in
accordance with Article V or Sections 3.01(b)(ii), 4.01(d) or 4.02, in
which case the substituted Limited Partner will take over the Capital
Account of his assignor or transferor.

(c) Procedure. The admission of a new Limited Partner, whether an
additional Limited Partner or a substituted Limited Partner, shall be
accomplished in accordance with the following procedures: Each Limited
Partner so admitted shall (i) sign a counterpart copy of this Agreement,
which shall be accepted by its execution by the General Partner, as well as
any other documents required by the General Partner, and (ii) make payment
of his/her Capital Commitment, or purchase price in the case of a
substituted Limited Partner, as determined by the General Partner, and
(iii) an amendment to the Partnership's Certificate of Limited Partnership
shall be filed to reflect such addition. Each such new Limited Partner
shall thereafter be entitled to and subject to all the rights and
liabilities of Limited Partners as set forth herein.

SECTION 9.02. Disputed Matters. Any controversy or dispute arising out
of this Agreement, interpretation of any of the provisions hereof, or the
actions of the General or Limited Partners hereunder shall be submitted to
arbitration before the National Association of Securities Dealers, Inc. ("NASD")
under the rules then obtaining of the NASD. If the NASD refuses to accept
jurisdiction of the matter, then the dispute shall be submitted to arbitration
before the New York Stock Exchange under the rules then obtaining of said
Exchange. Any such arbitration shall be held in San Francisco, California, and
judgment upon any award thus obtained may be entered in any court having
jurisdiction thereof. In any such arbitration each party to the arbitration
shall bear its own expenses, including expenses of attorneys, financial experts
and other witnesses; and any arbitration fees and expenses of the arbitrators
shall be divided equally between the disputing parties.

<PAGE> 24
Partner, the General Partner may (but shall not be obligated to) make such
payment or distribution, either wholly or partially, in Securities or other
property of the Partnership. The amount of any such payment or distribution
shall be deemed to be equal to the value of such securities or other property,
as determined under Article VIII, as of the effective date of their distribution
to or on behalf of the Partner or the Partner's legal representatives and the
decisions of the General Partner with respect to in-kind payments, including
decisions with respect to selection, apportionment and valuation of Securities
or other property, shall be conclusive and binding upon all Partners.

SECTION 9.04. General. This Agreement: (a) shall be binding on the
executors, administrators, estates, heirs and legal successors of the Partners;
(b) shall be governed by and construed in accordance with the laws of the State
of California; (c) may be executed in more than one counterpart as of the day
and year first above written; provided, however, that each separate counterpart
shall have been executed by the General Partner; and (d) contains the entire
Agreement among the Partners relating to the subject matter hereof. The waiver
of any of the provisions, terms or conditions contained in this Agreement shall
not be considered as a waiver of any of the other provisions, terms or
conditions hereof.

SECTION 9.05. Notices.

(a) To the Partners. Any notice to be given hereunder by the
Partnership to any Partner shall be in writing and signed by the
General Partner. Any such notice shall be conclusively deemed to have
been given if either delivered in person to such Partner or mailed by
registered or certified mail to such Partner at such Partner's address
set forth in Exhibit A. Any Partner may change their address for notice
by written notice to the Partnership.

(b) To the Partnership. Any notice to be given hereunder to the
Partnership shall be in writing and signed by the Partner giving
notice. Any such notice shall be conclusively deemed to have been given
if delivered in person or mailed by registered or certified mail,
postage prepaid to the General Partner at its address set forth in
Exhibit A, or such other address as the General Partner may from time
to time designate by notice to all Partners.

SECTION 9.06. Execution of Certificate of Limited Partnership and Other
Documents. The General Partner agrees to prepare and file and the Partners
agree to execute a certificate of limited partnership, any amendments thereto,
and such other instruments, documents and papers as the General Partner deems
necessary or appropriate to carry out the intent of this Agreement, and to take
such other action as the General Partner deems appropriate to maintain the
Partnership's status as a Limited Partnership under the CRLPA.

SECTION 9.07. Force Majeure. Whenever any act or thing is required of
the Partnership hereunder within any specified period of time, the Partnership
shall be entitled to

SECTION 9.08. Amendments. Except as otherwise specifically provided herein,
the terms and provisions of this Agreement may be modified or amended at any
time and from time to time only with the written consent of (1) the General
Partner and (2) Limited Partners (excluding Sutro) representing in excess of
fifty percent (50%) of the combined Capital Accounts of all Limited Partners
insofar as is consistent with the laws governing this Agreement; provided,
however, that without the specific written consent of each Partner adversely
affected thereby no such modification or amendment shall (i) increase the
obligation of a Limited Partner beyond that set forth in Section 1.04, (ii)
reduce the Capital Account of any Partner or its rights to distribution and
withdrawal with respect thereto; or (iii) amend Section 1.05 to permit
Partnership activities which would subject a Limited Partner to Federal or state
taxation which such Partner would not be subject to in the absence of such
activity. Without unanimous consent no amendment or modification may be made (x)
which would cause the Partnership to cease to be a Limited Partnership under
applicable state law or (y) which would amend this Section 9.08.

<PAGE> 26

IN WITNESS WHEREOF, the General Partner and the Limited Partners have
hereunto set their hands and seals as of the date first set forth above.

GENERAL PARTNER

The Sutro Group

By:
------------------------------

LIMITED PARTNER

-----------------------------------

-----------------------------------
(Print Name)

S.S.#
------------------------------

Allocation Accepted: $
==============

STATE OF )
) ss:
COUNTY OF )

Then personally appeared before me , known to me,
----------------------
and acknowledged the same to be his/her free act and deed.

-------------------------------------
Notary

<PAGE> 27
EXHIBIT A

General Partner

<TABLE>
<CAPTION>
Capital
Name Address Contribution
- - - - - - - - - - - - - - - ---- ------- ------------
<S> <C> <C>
The Sutro Group 201 California Street 1% of total
San Francisco, CA 94111 Capital as
General Partner

Limited Partners

<CAPTION>
Capital
Name Address Commitment
- - - - - - - - - - - - - - - ---- ------- ----------
<S> <C> <C>
$

</TABLE>

<PAGE> 1
EXHIBIT 10.19

OPERATING AGREEMENT
FOR

SUTRO INVESTMENT PARTNERS IV, LLC,
A DELAWARE LIMITED LIABILITY COMPANY

THE SECURITY WHICH IS THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 506 PROMULGATED UNDER THE ACT, AND THIS SECURITY
HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE STATE SECURITIES LAWS OF ANY
RELEVANT JURISDICTION IN WHICH THIS SECURITY HAS BEEN OFFERED AND SOLD PURSUANT
TO AN APPLICABLE EXEMPTION THEREFROM. IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY WITHOUT PROVIDING THE MANAGERS WITH AN OPINION OF
COUNSEL TO THE EFFECT THAT A PROPOSED TRANSFER OR SALE THIS SECURITY (i) DOES
NOT AFFECT THE ORIGINAL ISSUANCE AND SALE OF SECURITIES IN THE COMPANY PURSUANT
TO THE EXEMPTIONS FROM REGISTRATION PROVIDED BY RULE 506 UNDER THE ACT AND
PURSUANT TO ANY APPLICABLE STATE EXEMPTION FROM REGISTRATION AND QUALIFICATION
RELIED UPON BY THE MANAGER AND (ii) IS IN COMPLIANCE WITH ALL APPLICABLE STATE
OR FEDERAL SECURITIES LAWS.

THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITY WHICH IS THE
SUBJECT OF THIS AGREEMENT OR ANY INTEREST THEREIN IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN ARTICLE VII OF THIS AGREEMENT.

<PAGE> 2

TABLE OF CONTENTS

ARTICLE I DEFINITIONS ....................................... 1
1.1 "Act" ............................................. 1
1.2 "Affiliate" ....................................... 1
1.3 "Agreement" ....................................... 1
1.4 "Articles" ........................................ 1
1.5 "Assignee" ........................................ 1
1.6 "Bankruptcy" ...................................... 1
1.7 "Capital Account" ................................. 2
1.8 "Capital Contribution" ............................ 2
1.9 "Code" ............................................ 2
1.10 "Company" ......................................... 2
1.11 "Company Minimum Gain" ............................ 3
1.12 "Depreciation" .................................... 3
1.13 "Determination Date" .............................. 3
1.14 "Dissolution Event" ............................... 3
1.15 "Economic Interest" ............................... 3
1.16 "Fiscal Period" ................................... 3
1.17 "Fiscal Year" ..................................... 3
1.18 "Gross Asset Value" ............................... 3
1.19 "Interest" ........................................ 4
1.20 "Majority Interest" ............................... 5
1.21 "Manager" ......................................... 5
1.22 "McCown" .......................................... 5
1.23 "Member" .......................................... 5
1.24 "Membership Interest" ............................. 5
1.25 "Nonmanager Member" ............................... 5
1.26 "Percentage Interest" ............................. 5
1.27 "Person" .......................................... 5
1.28 "Profits" and "Losses" ............................ 5
1.29 "Regulations" ..................................... 6
1.30 "Remaining Members" ............................... 6
1.31 "Sutro" ........................................... 6
1.32 "Tax Matters Partner" ............................. 6

ARTICLE II ORGANIZATIONAL MATTERS ............................ 6
2.1 Formation ......................................... 6
2.2 Name .............................................. 6
2.3 Term .............................................. 6
2.4 Office and Agent .................................. 6
A. Principal Office ......................... 6
B. Registered Office ........................ 6
C. Other Jurisdictions ...................... 7
2.5 Purpose and Business of the Company ............... 7

ARTICLE III CAPITAL CONTRIBUTIONS ............................. 7
3.1 Capital Contributions of the Manager .............. 7
3.2 Capital Contributions of Nonmanager Members ....... 7
3.3 Timing; Other Contributions ....................... 7
3.4 Failure to Make Contributions ..................... 7
3.5 No Interest. ...................................... 8

<PAGE> 3

TABLE OF CONTENTS
(continued)

ARTICLE IV MEMBERS ........................................... 8
4.1 Limitations on Liability of Members ............... 8
4.2 Liability of Members to the Company ............... 9
A. Liability of Members to the Company ....... 9
B. Member as Trustee for the Company ......... 9
C. Waiver of Liability of Member ............. 9
4 3 Admission of Additional Members ................... 9
4.4 Withdrawals ....................................... 9
4.5 Transactions With The Company ..................... 9
4.6 Remuneration To Members ........................... 9
4.7 Members Are Not Agents ............................ 9
4.8 Voting Rights ..................................... 9
4.9 Meetings of Members ............................... 10
A. Date, Time and Place of Meetings of
Members; Secretary ........................ 10
B. Power to Call Meetings .................... 10
C. Notice of Meeting ......................... 10
D. Manner of Giving Notice; Affidavit of
Notice .................................... 10
E. Validity of Action ........................ 10
F. Quorum .................................... 10
G. Adjourned Meeting; Notice ................. 11
H. Waiver of Notice or Consent ............... 11
I. Action by Written Consent without
a Meeting ................................. 11
J. Telephonic Participation by Member
at Meetings ............................... 11
K. Record Date ............................... 12
L. Proxies ................................... 12
4.10 Certificate of Membership Interest ................ 12

ARTICLE V MANAGEMENT AND CONTROL OF THE COMPANY ............. 12
5.1 Management of the Company by Manager .............. 12
5.2 Resignation and Removal of Manager ................ 13
5.3 Powers of Managers ................................ 13
A. Powers of Managers ........................ 13
B. Limitations on Power of Managers .......... 13
5.4 Performance of Duties; Liability of Manager ....... 14
5.5 Payments to Managers .............................. 14
5.6 Limited Liability ................................. 15
5.7 Membership Interests of Manager ................... 15

ARTICLE VI ALLOCATIONS OF PROFITS AND LOSSES; DISTRIBUTIONS .. 15
6.1 Capital Accounts .................................. 15
6.2 Allocations ....................................... 15
A. Profits and Losses ........................ 15
B. Recapture ................................. 15
6.3 Special Capital Account Allocations ............... 15
A. Section 704 Allocations ................... 15
B. Tax Allocations ........................... 15
C. Other Allocation Rules .................... 16

<PAGE> 4

TABLE OF CONTENTS
(continued)

D. Provisional Allocation ................... 17
6.4 Withdrawals from Capital Accounts ................. 17
6.5 Distributions ..................................... 17
6.6 Form of Distribution .............................. 17
6.7 Restriction on Distribution ....................... 17
A. Limitation ............................... 17
B. Liability for Return ..................... 17
C. Limitation on Liability .................. 17
6.8 Returned Distributions ............................ 18
6.9 Obligations of Members to Report Allocations ...... 18

ARTICLE VII TRANSFER AND ASSIGNMENT OF INTERESTS .............. 18
7.1 Transfer and Assignment of Interests .............. 18
7.2 Further Restrictions on Transfer of Interests ..... 18
7.3 Substitution of Members ........................... 18
7.4 Permitted Transfers ............................... 18
7.5 Effective Date of Permitted Transfers ............. 19
7.6 Rights of Legal Representatives ................... 19
7.7 No Effect to Transfers in Violation of Agreement .. 19

ARTICLE VIII CONSEQUENCES OF DISSOLUTION EVENTS ................ 19

ARTICLE IX ACCOUNTING, RECORDS, REPORTING BY MEMBERS ......... 19
9.1 Books and Records ................................. 19
9.2 Delivery to Members and Inspection ................ 20
A. Delivery of Information .................. 20
B. Inspection and Copying ................... 20
C. Right to Request ......................... 20
D. Copies of Amendments ..................... 20
9.3 Annual and Quarterly Statements ................... 20
A. Delivery of Statements ................... 20
B. Tax Information .......................... 21
9.4 Company Accounts .................................. 21
9.5 Accounting Decisions and Reliance on Others ....... 21
9.6 Tax Matters for the Company Handled by
Manager and Tax Matters Partner ................... 21

ARTICLE X DISSOLUTION AND WINDING UP ........................ 21
10.1 Dissolution ....................................... 21
10.2 Certificate of Dissolution ........................ 21
10.3 Winding Up ........................................ 22
10.4 Distributions in Kind ............................. 22
10.5 Order of Payment Upon Dissolution ................. 22
10.6 Limitations on Payments Made in Dissolution ....... 22
10.7 Certificate of Cancellation ....................... 22

ARTICLE XI INDEMNIFICATION ................................... 22
11.1 Indemnification ................................... 22
11.2 Successors and Assigns; Limitations ............... 23

<PAGE> 5

TABLE OF CONTENTS
(continued)

ARTICLE XII COMPETING ACTIVITIES .............................. 23

ARTICLE XIII MISCELLANEOUS ..................................... 24
13.1 Counsel to the Company ............................ 24
13.2 Complete Agreement ................................ 24
13.3 Binding Effect .................................... 24
13.4 Parties in Interest ............................... 24
13.5 Pronouns; Statutory References .................... 24
13.6 Headings .......................................... 25
13.7 Interpretation .................................... 25
13.8 References to this Agreement ...................... 25
13.9 Jurisdiction; Arbitration ......................... 25
13.10 Exhibits .......................................... 25
13.11 Severability ...................................... 25
13.12 Additional Documents and Acts ..................... 25
13.13 Notices ........................................... 25
13.14 Amendments ........................................ 26
13.15 Reliance on Authority of Person Signing
Agreement ......................................... 26
13.16 No Interest in Company Property; Waiver of
Action for Partition .............................. 26
13.17 Multiple Counterparts ............................. 26
13.18 Attorney Fees ..................................... 26
13.19 Remedies Cumulative ............................... 27
13.20 Power of Attorney ................................. 27

<PAGE> 6

OPERATING AGREEMENT
FOR
SUTRO INVESTMENT PARTNERS IV, LLC
A DELAWARE LIMITED LIABILITY COMPANY

This Operating Agreement is made as of June 30, 1997, by and among THE
SUTRO GROUP, a Nevada corporation, and those persons who, themselves or by
attorney-in-fact, have executed this Agreement and been admitted as Members in
accordance with the provisions hereof. The parties by this Agreement set forth
the operating agreement for the limited liability company being organized by
them under the laws of the State of Delaware upon the terms and subject to the
conditions of this Agreement.

ARTICLE I

DEFINITIONS

When used in this Agreement, the following terms shall have the
meanings set forth below (all terms used in this Agreement that are not defined
in this Article I shall have the meanings set forth elsewhere in this
Agreement):

1.1 "ACT" shall mean the Delaware Limited Liability Company Act, as the
same may be amended from time to time.

1.2 "AFFILIATE" of a Member or Manager shall mean any Person, directly
or indirectly, through one or more intermediaries, controlling, controlled by,
or under common control with a Member or Manager, as applicable. The term
"control," as used in the immediately preceding sentence, shall mean with
respect to a corporation or limited liability company the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the controlled corporation or limited liability company, and,
with respect to any individual, partnership, trust, other entity or association,
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity.

1.3 "AGREEMENT" shall mean this Operating Agreement, as originally
executed and amended from time to time.

1.4 "ARTICLES" shall mean the Certificate of Formation for the Company
originally filed with the Delaware Secretary of State and as amended from time
to time.

1.5 "ASSIGNEE" shall mean the owner of an Economic Interest who has
not been admitted as a substitute Member in accordance with Article VII.

1.6 "BANKRUPTCY" shall mean: (a) the filing of an application by a
Manager for, or his or her consent to, the appointment of a trustee, receiver,
or custodian of his or her other assets; (b) the entry of an order for relief
with respect to a Manager in proceedings under the United States Bankruptcy
Code, as amended or superseded from time to time; (c) the making by a Manager of
a general assignment for the benefit of creditors; (d) the entry of an order,
judgement, or decree by court of competent jurisdiction appointing a trustee,
receiver, or custodian of the assets of a Manager unless the proceedings and the
person appointed are dismissed within ninety (90) days; or (a) the failure by a
Manager generally to pay his or her debts as the debts become due within the
meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined
by the Bankruptcy Court, or the admission in writing of his or her inability to
pay his or her debts as they become due.

<PAGE> 7

1.7 "CAPITAL ACCOUNT" shall mean with respect to any Member the
individual Capital Account that shall be established and maintained for each
Member and for each Capital Contribution of each Member in accordance with the
following provisions:

(a) To each Capital Account of a Member there shall be
credited such Member's related Capital Contribution, such Member's share of
Profit with respect thereto, any items in the nature of income or gain that are
specifically allocated thereto pursuant to this Agreement and the amount of any
Company liabilities that are personally assumed by such Member or that are
secured by any Company property distributed to such Member with respect thereto;

(b) To each Capital Account of a Member, there shall be
debited the amount of cash and the Gross Asset Value of any Company property
distributed to such Member pursuant to any provision of this Agreement with
respect thereto, such Member's share of Loss with respect thereto, any items in
the nature of expenses or loss that are specifically allocated thereto pursuant
to this Agreement and the amount of any liabilities of such Member that are
assumed by the Company or that are secured by any property contributed by such
Member to the Company with respect thereto;

(c) In determining the amount of any liability, there shall be
taken into account Code Section 752(c) and any other applicable provisions of
the Code and Regulations;

(d) If any interest in the Company is transferred in
accordance with this Agreement, the transferee shall succeed to the Capital
Accounts of the transferor to the extent that they relate to the transferred
interest.

(e) If the Gross Asset Values of Company assets are adjusted
pursuant to the Agreement, the respective Capital Accounts of all Members shall
be adjusted simultaneously to reflect the aggregate net adjustment as if the
Company were to have recognized gain or loss equal to the amount of such
aggregate net adjustment.

(f) The foregoing provisions and other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent therewith. If the Manager determines that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto are
computed in order to comply with Regulations Section 1.704-1(b), the Manager may
make such modification if it is not likely to have a material adverse effect on
amounts distributable to any Member pursuant hereto on the dissolution of the
Company. The Manager shall adjust the amounts debited or credited to Capital
Accounts with respect to any property contributed to the Company or distributed
to a Member and any liabilities secured by such contributed or distributed
property or assumed by the Company or Member in connection with such
contribution or distribution if the Manager determines that such adjustments are
necessary or appropriate under Regulations Section 1.704-1(b)(2)(iv). The
Manager shall also make any appropriate modifications if unanticipated events
might cause this Agreement not to comply with Regulations Section 1.704-1(b),
and the Manager shall make all elections provided for under such Regulations.

1.8 "CAPITAL CONTRIBUTION" of a Member shall mean the total amount
of cash and the initial Gross Asset Value of property contributed to the capital
of the Company by such Member.

1.9 "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, the provisions of succeeding law, and to the extent
applicable, the Regulations.

1.10 "COMPANY" shall mean Sutro Investment Partners IV, LLC, a
Delaware limited liability company.

<PAGE> 8

1.11 "COMPANY MINIMUM GAIN" shall have the meaning ascribed to the
term "Partnership Minimum Gain" in the Regulations Section 1.704-2(d).

1.12 "DEPRECIATION" shall mean, for each Fiscal Year or other
Fiscal Period, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such Year or other
Period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for Federal income tax purposes at the beginning of such Year or
other Period, Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the Federal income tax depreciation, amortization
or other cost recovery deduction for such Year or other Period bears to such
beginning adjusted tax basis.

1.13 "DETERMINATION DATE" shall mean the date as of which the value
or amount of Company assets and/or liabilities is to be determined.

1.14 "DISSOLUTION EVENT" shall mean with respect to any Manager,
one or more of the following: the death, insanity, withdrawal, resignation,
retirement, removal, expulsion, Bankruptcy or dissolution of any such Manager.

1.15 "ECONOMIC INTEREST" shall mean the right to receive
distributions of the Company's assets and allocations of Profit and Loss and
similar items from the Company pursuant to this Agreement and the Act, but shall
not include any other rights of a Member, including, without limitation, the
right to vote or participate in the management of the Company, or except as
provided in the Act, any right to information concerning the business and
affairs of the Company.

1.16 "FISCAL PERIOD" shall mean each period commencing (i) on the
first day of each calendar year, (ii) on the date of any Capital Contribution,
and (iii) on each date next following the date of any withdrawal from a Capital
Account, and the prior Fiscal Period, if any, shall terminate on the day
immediately preceding the day on which a new Fiscal Period commences.

1.17 "FISCAL YEAR" shall mean the period from January 1 through the
succeeding December 31 or, if earlier, the date of dissolution and termination
of the Company.

1.18 "GROSS ASSET VALUE" shall mean, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of such asset,
determined as provided in Paragraph 1.18(f) below;

(b) The Gross Asset Value of all Company assets shall be
adjusted to equal their respective gross fair market values, determined as
provided in Paragraph 1.18(f) below, as of the following times: (i) on the
acquisition of an additional interest in the Company by any new or existing
Member in exchange for more than a de minimis Capital Contribution; (ii) on the
distribution by the Company to a Member of more than a de minimis amount of
Company property, unless all Members receive simultaneous distributions of
undivided interests in the distributed property in proportion to their
respective Percentage Interests; (iii) on the last day of each Fiscal Period;
and (iv) on a liquidation within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g).

(c) The Gross Asset Value of any Company property distributed
to any Member shall be the gross fair market value of such Company property,
determined as provided in Paragraph 1.18(f) below:

<PAGE> 9

(d) The Gross Asset Value of any Company property shall
be increased (or decreased) to reflect any adjustments to the adjusted basis of
such Company property pursuant to Code Section 734(b) or 743(b), but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided that
Gross Asset Values shall not be so adjusted to the extent that the Manager
determines that an adjustment pursuant to Paragraph 1.18(b) is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this Paragraph 1.18(d); and

(e) If the Gross Asset Value of an asset has been
determined or adjusted pursuant hereto, such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to such assets
for purposes of computing Profit and Loss, and Capital Accounts shall be
adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) and the
Members' distributive shares of depreciation, depletion, amortization, gains and
net loss for tax purposes with respect to such property shall be determined to
take account of the variation between the adjusted tax basis and the Gross Asset
Value of such property in the same manner as under Code Section 704(c).

(f) Whenever the "value,""fair value" or "fair market
value" of Company property is to be determined, such "value" shall be
determined, and the assets and liabilities of the Company shall be valued, on
the following basis:

(i) Marketable securities listed on national
securities exchanges or reported in the National Market System will be valued at
the last sale price on the stock exchange or market on which the security is
traded on the Determination Date or, if the security is traded on more than one
stock exchange or market on the Determination Date, at the last sale price on
the exchange or market on which such securities are principally traded on that
Date; in the absence of a sale on such Date, such securities will be valued at
the average of the closing high bid and low ask prices on such exchange or
market on the Determination Date.

(ii) Marketable securities not so traded will be
valued at the last bid prices, reported by NASDAQ in the case of securities
quoted on NASDAQ, or by the National Quotations Bureau, Inc. in the case of any
other such securities.

(iii) Short term money market instruments and bank
deposits will be valued at cost plus reported interest to date.

(iv) All other assets and liabilities of the
Company will be valued at the fair value thereof as determined in good faith by
the Manager. In addition, and notwithstanding (i) and (ii) above, valuations of
portfolio securities which are restricted as to saleableness or transferability
will be effected as provided in (i) and (ii), above, less a discount of from ten
percent (10%) to twenty-five percent (25%) of the value thereof as determined in
good faith by the Manager based on the volatility of the security involved and
the nature and length of the restriction. In addition, interests in other
partnerships or companies such as the Company shall be valued by such
partnership or company at the times and upon the terms and conditions provided
in the partnership or operating agreement thereof, unless otherwise determined
by the Manager.

(v) If the Determination Date is not a business
day, values as of the close of business on the last business day preceding such
Date may be used. All determinations of values will, except as provided above,
be accomplished by the Manager, whose determination thereof shall be conclusive
and binding.

1.19 "INTEREST" shall mean any membership interest in the Company.

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<PAGE> 10

1.20 "MAJORITY INTEREST" shall mean those Members who hold
two-thirds of the Percentage Interests which all Members hold.

1.21 "MANAGER" shall mean and refer to Sutro, as well as to any
other person that succeeds any such person as a manager of the Company.

1.22 "MCCOWN" shall mean McCown De Leeuw & Co. IV L.P,. a
California limited partnership.

1.23 "MEMBER" shall mean each Person who is an initial signatory to
this Agreement or has been admitted to the Company as a Member in accordance
with the Articles or this Agreement (including an Assignee who has become a
Member in accordance with Article VII), and (a) has not ceased to be a Member
for other reason, and the term includes each Manager who is a Member.

1.24 "MEMBERSHIP INTEREST" shall mean a Member's entire interest in
the Company including the Member's Economic Interest, any right to vote, and the
right to receive information concerning the business and affairs of the Company.

1.25 "NONMANAGER MEMBER" shall mean any Member that is not also a
Manager.

1.26 "PERCENTAGE INTEREST" shall mean for each Member or Economic
Interest Owner as of a given date, the ratio of such Member's Capital Account to
the Capital Accounts of all Members as of such date.

1.27 "PERSON" shall mean an individual, partnership, limited
partnership, limited liability company, corporation, trust, estate, association
or any other entity.

1.28 "PROFITS" and "LOSSES" shall mean, for each Fiscal Year or
Fiscal Period, an amount equal to the Company's taxable income or loss for such
Fiscal Year or Fiscal Period, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments.

(a) Any income of the Company that is exempt from Federal
income tax and not otherwise taken into account in computing Profit or Loss
pursuant to this Section 1.28 shall be added to such taxable income or loss;

(b) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profit and Loss pursuant to this Section 1.28 shall be subtracted
from such taxable income or loss;

(c) If the Gross Asset Value of any company asset is adjusted
pursuant to Paragraphs 1.18(b) or 1.18(d), the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such asset for
purposes of computing Profit and Loss;

(d) Gain or loss resulting from any disposition of Company
property with respect to which gain or loss is recognized for Federal income tax
purposes shall be computed by reference to the Gross Asset Value of the Company
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;

<PAGE> 11

(e) In lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Fiscal Year or Fiscal
Period, computed in accordance with Section 1.12; and

(f) Notwithstanding any other provision of this Section 1.28,
any items that are specially allocated pursuant to Paragraphs 6.3A, 6.3B or 6.3D
shall not be taken into account in computing Profit and Loss.

1.29 "REGULATIONS" shall, unless the context clearly indicates
otherwise, mean the regulations in force as final or temporary that have been
issued by the U.S. Department of Treasury pursuant to its authority under the
Code, and any successor regulations.

1.30 "REMAINING MEMBERS" shall have the meaning ascribed to it in
Article VIII.

1.31 "SUTRO" shall mean The Sutro Group, a Nevada corporation.

1.32 "TAX MATTERS PARTNER" (as defined Code Section 6231) shall be
SPM or its successor as designated pursuant to Section 9.6.

ARTICLE II

ORGANIZATIONAL MATTERS

2.1 FORMATION. The Members have formed a Delaware limited
liability company under the laws of the State of Delaware by filing the Articles
with the Delaware Secretary of State and entering into this Agreement. The
rights and liabilities of the Members shall be determined pursuant to the Act
and this Agreement. To the extent that the rights or obligations of any Member
are different by reason of any provision of this Agreement than they would be in
the absence of such provision, this Agreement shall, to the extent permitted by
the Act, control.

2.2 NAME. The name of the Company shall be Sutro Investment
Partners IV, LLC. The business of the Company may be conducted under that name
or, upon compliance with applicable laws, any other name that the Manager deem
appropriate or advisable. The Manager shall file any fictitious name
certificates and similar filings, and any amendments thereto, that the Manager
considers appropriate or advisable.

2.3 TERM. The term of this Agreement commenced on the filing of
the Articles and shall continue until terminated as hereinafter provided.

2.4 OFFICE AND AGENT.

A. PRINCIPAL OFFICE. The principal office of the Company shall
be located at 3773 Howard Hughes Parkway, Suite 190 South, Las Vegas, Nevada,
89109, unless and until the Manager shall determine otherwise, and the Manager
may determine to establish such additional offices to be located at such place
or places inside or outside the State of Delaware as the Manager may designate
from time to time.

B. REGISTERED OFFICE. The Registered Office of the Company in
the State of Delaware is located at 15 East North Street, in the City of Dover,
County of Kent. The registered agent of the Company for service of process at
such address is Paracorp Incorporated.

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<PAGE> 12

C. OTHER JURISDICTIONS. The Company shall file or record such
documents and take such other actions under the laws of any jurisdiction outside
the State of Delaware as are necessary or desirable to permit the Company to do
business in any such jurisdiction as is selected by the Manager and to promote
the limitation of liability for the Members in any such jurisdiction.

2.5 PURPOSE AND BUSINESS OF THE COMPANY. The Company was formed to
acquire, own, hold for investment and otherwise dispose of securities, including
to invest in McCown, and to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to, or convenient for the furtherance
and accomplishment of such business, objectives, and purpose, but subject to the
provisions of Paragraph 5.3B hereof.

ARTICLE III

CAPITAL CONTRIBUTIONS

3.1 CAPITAL CONTRIBUTIONS OF THE MANAGER. The Manager shall not be
required to contribute to the capital of the Company the amount set forth for it
as of the date hereof on Exhibit A, and the Manager shall be admitted as a
Member in respect of any Capital Contribution which it MAKES.

3.2 CAPITAL CONTRIBUTIONS OF NONMANAGER MEMBERS. Each other Member
shall contribute to the capital of the Company the amount set forth for it on
Exhibit A hereto.

3.3 TIMING; OTHER CONTRIBUTIONS. The Capital Contributions called
for by Sections 3.1 and 3.2 hereof shall be made pro rata by each Member so as
to permit the Company to meet its obligations to McCown on a timely basis, and
the Members shall also make pro rata such additional Capital Contributions as
shall enable the Company to meet such additional obligations, if any, which
might arise in respect of capital contributions to McCown. No person shall be
permitted to make any Capital Contribution except as permitted pursuant to the
provisions of this Agreement.

3.4 FAILURE TO MAKE CONTRIBUTIONS. If a Member does not timely
contribute capital when required, that Member shall be in default under this
Agreement. In such event, the Manager shall send the defaulting Member written
notice of such default, giving him or her fourteen (14) days from the date such
notice is given to contribute the entire amount of his or her required Capital
Contribution (if the defaulting Member did not make a required contribution of
property or services, the Company may instead require the defaulting Member to
contribute cash equal to that portion of the fair market value of the
contribution that has not been made). If the defaulting Member does not
contribute his or her required capital to the Company within said fourteen
(14)-day period, the Manager or those non-defaulting Members who hold a Majority
Interest if the defaulting Member is the Manager may elect any one or more of
the following remedies:

(a) The non-defaulting Members may advance funds to the
Company to cover those amounts which the defaulting Member fails to contribute.
Amounts which a non-defaulting Member so advances on behalf of the defaulting
Member shall become a loan due and owing from the defaulting Member to such
non-defaulting Member and bear interest at the rate of ten percent (10%) per
annum, payable monthly. All cash contributions otherwise distributable to the
defaulting member under this Agreement shall instead be paid to the
non-defaulting Members making such advances until such advances and interest
thereon are paid in full. In any event, any such advances shall be evidenced by
a promissory note and be due and payable by the defaulting Member one (1) year
from the date that such advance was made, Any amounts repaid shall first be
applied to interest and thereafter to principal. Effective upon a Member
becoming a defaulting Member, each member grants to the non-defaulting Members
who advance funds under this Paragraph 3.4(a) a security interest in

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<PAGE> 13

his or her Economic Interest to secure his or her obligation to repay such
advances and agrees to execute and deliver a promissory note as described herein
together with a security agreement and such UCC-1 financing statements and
assignments of certificates of membership (or other documents of transfer) as
such non-defaulting Members may reasonably request.

(b) The Percentage Interests shall be adjusted, in which event
each member's Percentage Interest shall be a fraction, the numerator of which
represents the aggregate amount of such Member's Capital Contributions and the
denominator of which represents the sum of all Members' Capital Contributions.

(c) The defaulting Members shall have no right to receive any
distributions from the Company until the non-defaulting members have first
received distributions in an amount equal to the additional capital contributed
by each non-defaulting Member to the Company plus a cumulative, non-compounded
return thereon at the rate of ten percent (10%) per annum.

(d) The defaulting Member shall lose his or her voting and
approval rights under the Act, the Articles and this Agreement.

(e) The defaulting Member shall lose his or her ability
(whether as a Member or a Manager) to participate in the management and
operations of the Company.

(f) The Company may obtain a money judgement against the
defaulting Member.

Each Member acknowledges and agrees that (i) a default by any Member in
making a required Capital Contribution will result in the Company and the
non-defaulting Members incurring certain costs and other damages in an amount
that would be extremely difficult or impractical to ascertain and (ii) the
remedies described in this Section 3.4 bear a reasonable relationship to the
damages which the Members estimate may be suffered by the Company and the
non-defaulting Members by reason of the failure of a defaulting Member to make
any required Capital Contribution and the election of any or all of the above
described remedies is not unreasonable under the circumstances existing as of
the date hereof.

The election of the Manager or non-defaulting Members, as applicable,
to pursue any remedy provided in this Section 3.4 shall not be a waiver or
limitation of the right to pursue an additional or different remedy available
hereunder or of law or equity with respect to any subsequent default.

3.5 NO INTEREST. No Member shall be entitled to receive any
interest on his or her Capital Contributions.

ARTICLE IV

MEMBERS

4.1 LIMITATIONS ON LIABILITY OF MEMBERS. The debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member of the Company shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member or by
reason of such Member's acts or omissions in connection with the conduct of the
business of the Company.

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<PAGE> 14

4.2 LIABILITY OF MEMBERS TO THE COMPANY.

A. LIABILITY OF MEMBERS TO THE COMPANY. A Member is liable to
the Company: (i) for the difference between his or its contribution to capital
as actually made and that is stated in the Articles, this Agreement or other
document executed by the Member as having been made by the Member; and (ii) for
any unpaid Capital Contribution which he or it agreed in the Articles, this
Agreement or other document executed by the Member to make in the future at the
time and on the conditions stated in the Articles, Agreement or other document
evidencing such agreement. No Member shall be excused from an obligation to the
Company to perform any promise to contribute money, property or to perform
services because of death, disability, dissolution or any other reason.

B. MEMBER AS TRUSTEE FOR THE COMPANY. A Member holds as
trustee for the Company (i) specific property stated in the Articles, Agreement
or other document executed by the Member as contributed by such Member, but
which was not contributed or which has been wrongfully or erroneously returned;
and (ii) money or other property wrongfully paid or conveyed to such Member on
account of his or its Capital Contribution.

C. WAIVER OF LIABILITY OF MEMBER. The liabilities of a Member
as set out in this Section 4.2 can be waived or compromised only by the consent
of all Members; but a waiver or compromise shall only affect the right of a
creditor of the Company to the extent permitted by applicable law.

4.3 ADMISSION OF ADDITIONAL MEMBERS. The Manager may admit to the
Company additional Members, from time to time, only as expressly provided in
this Agreement, including pursuant Article VII hereof, and the Members shall not
be permitted to admit new Members, except as otherwise expressly provided in
this Agreement.

4.4 WITHDRAWALS OR RESIGNATIONS. No Member may withdraw or resign
from the Company, except as otherwise provided in this Agreement.

4.5 TRANSACTIONS WITH THE COMPANY. Subject to any limitations set
forth in this Agreement and with the prior approval of the Manager, a Member may
lend money to and transact other business with the Company. Subject to other
applicable law, such Member has the same rights and obligations with respect
thereto as a Person who is not a Member.

4.6 REMUNERATION TO MEMBERS. Except as otherwise specifically
provided in this Agreement, no Member is entitled to remuneration for acting in
the Company business.

4.7 MEMBERS ARE NOT AGENTS. Pursuant to Section 5.1, the
management of the Company is vested in the Manager. The Members shall have no
power to participate in the management of the Company except as expressly
authorized by this Agreement or the Articles and except as expressly required by
the Act. No Member, acting solely in the capacity of a Member, is an agent of
the Company nor does any Member, unless expressly and duly authorized in writing
to do so by the Manager, have any power or authority to bind or act on behalf of
the Company in any way, to pledge its credit, to execute any instrument on its
behalf or to render it liable for any purpose.

4.8 VOTING RIGHTS. Except as expressly provided in this Agreement
or the Articles, Members shall have no voting, approval or consent rights.

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<PAGE> 15

4.9 MEETINGS OF MEMBERS.

A. DATE, TIME AND PLACE OF MEETINGS OF MEMBERS; SECRETARY.
Meetings of Members may be held at such date, time and place within or without
the State of Delaware as the Manager may fix from time to time. No annual or
regular meetings of Members are required. At any Members' meeting, the Manager
shall appoint a person to preside at the meeting and a person to act as
secretary of the meeting. The secretary of the meeting shall prepare minutes of
the meeting which shall be placed in the minute books of the Company.

B. POWER TO CALL MEETINGS. Meetings of the Members may be
called by the Manager, or upon written demand of Members holding more than ten
percent (10%) of the Percentage Interests, for the purpose of addressing any
matters on which the Members may vote.

C. NOTICE OF MEETING. Written notice of a meeting of Members
shell be sent or otherwise given to each Member not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The notice shall specify
the place, date and hour of the meeting and the general nature of the business
to be transacted. No other business may be transacted at this meeting. Upon
written request to the Manager by any person entitled to call a meeting of
Members, the Manager shall immediately cause notice to be given to the Members
entitled to vote that a meeting will be held at a time requested by the person
calling the meeting, not less than ten (10) days nor more than sixty (60) days
after the receipt of the request. If the notice is not given within twenty (20)
days after the receipt of the request, the person entitled to call the meeting
may give the notice.

D. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of
any meeting of Members shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to the
Member at the address of that Member appearing on the books of the Company or
given by the Member to the Company for the purpose of notice. If no such address
appears on the Company's books or is given, notice shall be deemed to have been
given if sent to that Member by first-class mail or telegraphic or other written
communication to Company's principal executive office, or if published at least
once in a newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other means of
written communication.

If any notice addressed to a Member at the address of that
Member appearing on the books of the Company is returned to the Company by the
United States Postal Service marked to indicate that the United States Postal
Service is unable to deliver the notice to the Member at that address, all
future notices or reports shall be deemed to have been duly given without
further mailing if these shall be available to the Member on written demand of
the Member at the principal executive office of the Company for a period of one
year from the date of the giving of the notice.

An affidavit of the mailing or other means of giving any
notice of any meeting shall be executed by the Manager giving the notice, and
shall be filed and maintained in the minute book of the Company.

E. VALIDITY OF ACTION. Any action approved at a meeting, other
than by unanimous approval of those entitled to vote, shall be valid only if the
general nature of the proposal so approved was stated in the notice of meeting
or in any written waiver of notice.

F. QUORUM. The presence in person or by proxy of a Majority
Interest shall constitute a quorum at a meeting of Members.

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<PAGE> 16

G. ADJOURNED MEETING; NOTICE. Any Members' meeting, whether
or not a quorum is present, may be adjourned from time to time by the vote of
the majority of the Membership Interests represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting. When any meeting of Members is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place are announced at a meeting at which the adjournment is taken, unless a new
record date for the adjourned meeting is subsequently fixed, or unless the
adjournment is for more than forty-five (45) days from the date set for the
original meeting, in which case the Manager shall set a new record date. At any
adjourned meeting the Company may transact any business which might have been
transacted at the original meeting.

H. WAIVER OF NOTICE OR CONSENT. The actions taken at any
meeting of Members however called and noticed, and wherever held, have the same
validity as if taken at a meeting duly held after regular call and notice, if a
quorum is present either in person or by proxy, and if, either before or after
the meeting, each of the Members entitled to vote, who was not present in person
or by proxy, signs a written waiver of notice or consents to the holding of the
meeting or approves the minutes of the meeting. All such waivers, consents or
approvals shall be filed with the Company records or made a part of the minutes
of the meeting.

Attendance of a person at a meeting shall constitute a
waiver of notice of that meeting, except when the person objects, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, and except that attendance at a meeting is
not a waiver of any right to object to the consideration of matters not included
in the notice of the meeting if that objection is expressly made at the meeting.
Neither the business to be transacted nor the purpose of any meeting of Members
need be specified in any written waiver of notice except as provided in
Paragraph 4.10E.

I. ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action
that may be taken at a meeting of Members may be taken without a meeting, if a
consent in writing setting forth the action so taken, is signed and delivered to
the Company within sixty (60) days of the record date for that action by Members
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all Members entitled to vote
on that action at a meeting were present and voted. All such consents shall be
filed with the Manager or the secretary, if any, of the Company and shall be
maintained in the Company records. Any Member giving a written consent, or the
Member's proxy holders, may revoke the consent by a writing received by the
Manager or secretary, if any, of the Company before written consents of the
number of votes required to authorize the proposed action have been filed.

Unless the consents of all Members entitled to vote have
been solicited in writing, (i) notice of any Member approval of an amendment to
the Articles or this Agreement, a dissolution of the Company, or a merger of
the Company, without a meeting by less than unanimous written consent, shall be
given at least ten (10) days before the consummation of the action authorized by
such approval, and (ii) prompt notice shall be given of the taking of any other
action approved by Members without a meeting by less than unanimous written
consent, to those Members entitled to vote who have not consented in writing.

J. TELEPHONIC PARTICIPATION BY MEMBER AT MEETINGS. Members may
participate in any Members' meeting through the use of any means of conference
telephones or similar communications equipment as long as all Members
participating can hear one another. A Member so participating is deemed to be
present in person at the meeting.

<PAGE> 17

K. RECORD DATE. In order that the Company may determine
the Members of record entitled to notices of any meeting or to vote, or entitled
to receive any distribution or to exercise any rights in respect of any
distribution or to exercise any rights in respect of any other lawful action,
the Manager, or Members representing more than ten percent (10%) of the
Percentage Interests may fix, in advance, a record date, that is not more than
sixty (60) days nor less than ten (10) days prior to the date of the meeting and
not more than sixty (60) days prior to any other action. If no record date is
fixed:

(i) The record date for determining Members
entitled to notice of or to vote at a meeting of Members shall be at the close
of business on the business day next preceding the day on which notice is given
or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held.

(ii) The record date for determining Members
entitled to give consent to Company action in writing without a meeting shall be
the day on which the first written consent is given.

(iii) The record date for determining Members for
any other purpose shall be at the close of business on the day on which the
Manager adopts the resolution relating thereto, or the sixtieth (60th) day prior
to the date of the other action, whichever is later.

(iv) The determination of Members of record
entitled to notice of or to vote at a meeting of Members shall apply to any
adjournment of the meeting unless the Manager or the Members who called the
meeting fix a new record date for the adjourned meeting, but the Manager or the
Members who called the meeting shall fix a new record date if the meeting is
adjourned for more than forty-five (45) days from the date set for the original
meeting.

L. PROXIES. Every Member entitled to vote on any matter
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the Manager or
secretary, if any, of the Company. A proxy shall be deemed signed if the
Member's name is placed on the proxy (whether by manual signature, typewriting,
telegraphic transmission, electronic transmission or otherwise) by the Member or
the Member's attorney in fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the Company stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the Company before the vote
pursuant to that proxy is counted.

4.10 CERTIFICATE OF MEMBERSHIP INTEREST. Unless the Manager
otherwise elects, a Membership Interest shall not be represented by a
certificate of membership.

ARTICLE V

MANAGEMENT AND CONTROL OF THE COMPANY

5.1 MANAGEMENT OF THE COMPANY BY MANAGER. The business, property
and affairs of the Company shall be managed exclusively by the Manager. Except
for situations in which the approval of the Members is expressly required by the
Articles or this Agreement, the Manager shall have full, complete and exclusive
authority, power, and discretion to manage and control the business, property
and affairs of the Company, to make all decisions regarding those matters and to
perform any and all other acts or activities customary or incident to the
management of the Company's business, property and affairs. A Manager need not
be a Member.

<PAGE> 18

5.2 RESIGNATION AND REMOVAL OF MANAGER. No Manager may resign as
Manager at any time without the consent of a Majority Interest of the Members
other than the departing Manager. A Manager may be removed at any time, with
Cause (but may not be removed without Cause), by the unanimous vote of all of
the Members (other than the Member who is to be removed as Member) at a meeting
called expressly for that purpose, or by the written consent of all of the
Members (other than the Member who is to be removed as Manager). Removal as
Manager shall not affect the Manager's rights as a Member or constitute a
withdrawal of a Manager as a Member. For purpose of this Section 5.2, "Cause"
shall mean fraud, gross negligence, willful misconduct, embezzlement or a breach
of such Manager's obligations under this Agreement.

5.3 POWERS OF MANAGERS.

A. POWERS OF MANAGERS. Without limiting the generality
of Section 5.1, but subject to Paragraph 5.3B and to the express limitations set
forth elsewhere in this Agreement, the Manager shall have all necessary powers
to manage and carry out the purposes, business, property, and affairs of the
Company.

B. LIMITATIONS ON POWER OF MANAGERS. Notwithstanding any
other provisions of this Agreement, the Manager shall not have authority
hereunder to cause the Company to engage in the following transactions without
first obtaining the affirmative vote or written consent of all of the Members
and of the Manager, except that the matters specified in (v) and (xiii) shall
just require the vote of a Majority Interest and the concurrence of the Manager.

(i) The sale, exchange or other disposition of
all, or substantially all, of the Company's assets occurring as part of a single
transaction or plan or as part of related transactions or plans, except in the
ordinary course of business or in the orderly liquidation and winding up of the
business of the Company upon its duly authorized dissolution;

(ii) The merger of the Company with another
limited liability company or limited partnership or corporation, general
partnership or other Person;

(iii) The establishment of different classes of
Members;

(iv) An alteration of the primary purpose or
business of the Company as set forth in Section 2.5;

(v) Transactions between the Company and the
Manager or one or more of the Manager's Affiliates, or transactions in which the
Manager or one or more of the Manager's Affiliates, has a material financial
interest shall require the affirmative vote or written consent of a Majority
Interest (not including the Manager, if a Member);

(vi) Any act which would make it impossible to
carry on the ordinary business of the Company;

(vii) Borrowing, except that if it is in the
Manager's reasonable judgement desirable to do so to accomplish the purposes of
the Company, the Company may borrow money from banks or other recognized
financial institutions and secure payment of any such borrowing by hypothecation
or pledge of Company properties or otherwise, provided that (i) any such
borrowing has an original maturity of less than one (1) year and (ii) the
aggregate of all indebtedness of Company for money borrowed and outstanding at
any one time does not exceed five percent (5%) of the sum of all Capital
Contributions, and provided that the Manager may only cause the Company to
guaranty the obligations of others if the amount guaranteed, together with any
amount borrowed, does not at any time exceed the aforesaid limitation as to
borrowing upon the authority of the Manager;

13
<PAGE> 19

(viii) The underwriting or participation (except as
an investor)in the marketing of securities of any other company;

(ix) The buying or selling of commodities, other
than stock index futures;

(x) The buying or selling of real estate;

(xi) Investing the Company's assets directly in
the securities of any issuer other than McCown;

(xii) Purchasing securities issued by the Manager
or any affiliate thereof;

(xiii) Engaging in any other transaction described
in this Agreement as requiring the vote, consent, or approval of the Members.

5.4 PERFORMANCE OF DUTIES; LIABILITY OF MANAGER. The Manager shall
not be liable to the Company or to any Member for any loss or damage sustained
by the Company or any Members unless the loss or damage shall have been the
result of fraud, deceit, gross negligence, reckless or intentional misconduct,
or a knowing violation of law by the Manager. The Manager shall perform its
managerial duties in good faith, in a manner they reasonably believe to be in
the best interests of the Company and its Members, and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances. The Manager who so performs the duties of Manager
shall not have any liability by reason of being or having been a Manager of the
Company. Notwithstanding the foregoing, it is understood and agreed that the
Federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and, therefore, nothing herein shall in any way
be deemed to constitute a waiver or limitation of any rights which a Member may
have under any Federal securities laws.

In performing its duties, the Manager shall be entitled to
rely on information, opinions, reports, or statements, including financial
statements and other financial data, of the following persons or groups unless
they have knowledge concerning the matter in question that would cause such
reliance to be unwarranted and provided that the Manager acts in good faith and
after reasonable inquiry when the need therefor is indicated by the
circumstances:

(i) One or more employees or other agents of
the Company whom the Manager reasonably believe to be reliable and competent in
the matters presented; or

(ii) Any attorney, independent accountant, or
other person as to matters which the Manager reasonably believes to be within
such person's professional or expert competence.

5.5 PAYMENTS TO MANAGERS. Except as expressly provided in this
Agreement, no Manager or Affiliate of a Manager is entitled to remuneration for
services rendered or goods provided to the Company. The Manager shall not be
entitled to any management fee or other compensation; provided, however, that
the Company shall reimburse the Manager for all expenses incurred by the Manager
in conducting the Company's business, and all direct disbursements made and
obligations incurred on behalf of the Company, including the Company's trading,
custodial, borrowing, legal, accounting, documentation, reporting and auditing
expenses.

<PAGE> 20

5.6 LIMITED LIABILITY. No person who is a Manager of the Company
shall be personally liable under any judgement of a court, or in any other
manner, for any debt, obligation, or liability of the Company, whether that
liability or obligation arises in contract, tort, or otherwise, solely by reason
of being a Manager.

5.7 MEMBERSHIP INTERESTS OF MANAGER. Except as otherwise provided
in this Agreement, Membership Interests held by the Manager as a Member shall
entitle the Manager to all the rights of a Member, including without limitation
the economic, voting, information and inspection rights of a Member.

ARTICLE VI

ALLOCATIONS OF PROFITS AND LOSSES; DISTRIBUTIONS

6.1 CAPITAL ACCOUNTS. Individual Capital Accounts shall be
maintained in accordance with Section 1.7.

6.2 ALLOCATIONS. Profits and Losses shall be allocated to the
Members for each period described as follows:

A. PROFITS AND LOSSES. Profits and Losses for each
Fiscal Period shall be allocated to the Members in proportion to their
respective Percentage Interests as of the first day of such Fiscal Period.

B. RECAPTURE. Anything herein to the contrary
notwithstanding, any recapture under applicable tax laws shall be allocated to
the Members in the same proportions as the item generating the recapture shall
have been allocated.

6.3 SPECIAL CAPITAL ACCOUNT ALLOCATIONS. Notwithstanding the
allocation provisions of Section 6.2, the following special allocations shall be
made in allocating Profits and Losses;

A. SECTION 704 ALLOCATIONS. Any special allocations
necessary to comply with the requirements set forth in Section 704 of the Code
and the corresponding Regulations, including the qualified income offset and
minimum gain chargeback provisions contained therein, shall be made.

B. TAX ALLOCATIONS.

(i) Subject to clause 6.3B(ii) below, in each
Fiscal Year, items of income, deduction, gain, loss or credit that are
recognized for income tax purposes shall be allocated among the Members in such
manner as to reflect equitably amounts credited to or debited against the
Capital Account of each member, whether in such Fiscal Year or in prior Fiscal
Years. To this end, the Company shall establish and maintain records that shall
show the extent to which the Capital Account of each member shall, as of the
last day of each Fiscal Year, be comprised of amounts that have not been
reflected in the taxable income of such Member. To the extent deemed by the
Manager to be feasible and equitable, taxable income and gains in each Fiscal
Year shall be allocated among the Members who have enjoyed the related credits,
and items of deduction, loss and credit in each Fiscal Year shall be allocated
among the Members who have borne the burden of the related debits.

(ii) Notwithstanding any of the foregoing
provisions to the contrary, if a Member withdraws capital during a Fiscal Year,
allocations of taxable income and loss may, in the exclusive discretion of the
Manager, be made as follows:

<PAGE> 21

(a) Taxable income may be allocated first, to
each Member who shall have withdrawn all or part of such Member's Capital
Account In that Fiscal Year, to the extent that such withdrawal exceeds such
member's adjusted tax-basis in such Member's interest the Company immediately
prior to such withdrawal. If more than one Capital Account shall have so
withdrawn in full or in part, such allocations, if made, shall be made to the
extent of and in proportion to such differences;

(b) Taxable loss may first be allocated to each
member who shall have withdrawn all of such Member's Capital Account in that
Fiscal Year, to the extent that such Member's adjusted tax basis in such
Member's interest in the Company exceeds that Capital Account immediately prior
to such withdrawal. If more than one Capital Account has been so withdrawn, such
allocations of taxable loss, if made, shall be made to the extent of and in
proportion to such differences; and

The Manager, in its exclusive discretion, may cause the Company to make the
election to adjust the basis of the Company property under Code Section 754. In
any year in which the Code Section 754 election is in effect, this clause
6.3B(ii) shall be null and void.

(iii) Any elections or other decisions relating to such
allocations shall be made by the Manager in any manner that reasonably reflects
the purpose and intention of this Agreement. Allocations pursuant to this
Paragraph 6.3B are solely for purposes of Federal, state local taxes and shall
not affect, or in any way be taken into account in computing, any Capital
Account or share of Profits, Losses or other items of any Member, or
distributions to any Member, pursuant to any provision of this Agreement.

C. OTHER ALLOCATION RULES.

(i) Generally, all Profits and Losses shall be allocated
among the Members as provided in Section 6.2 and this Section 6.3. If Members
are admitted to the Company on different dates during any Fiscal Year, the
Profits or Losses allocated among the Members for each such Fiscal Year shall be
allocated in proportion to their respective Capital Accounts from time to time
during such Fiscal Year in accordance with Code Section 706, using any
convention permitted by law and selected by the Manager.

(ii) For purposes of determining the Profits, Losses or
any other items allocable to any period, Profits, Losses and any such other
items shall be determined on a daily, monthly or other basis, as determined by
the Manager using any permissible method under Code Section 706 and the
Regulations thereunder.

(iii) Notwithstanding any of the foregoing provisions to
the contrary, if taxable gain to be allocated includes income resulting from the
sale or disposition of Company property or propetry of a limited partnership or
joint venture in which the Company owns an interest that is treated as ordinary
income, such gain so treated as ordinary income shall be allocated to and
reported by each Member in proportion to allocations to that Member of the items
that gave rise to such ordinary income, and the Company shall keep records of
such allocations. In the event of the subsequent admission of any new Member,
any item that would constitute "unrealizod receivables" under Code Section 751
and the Regulations thereunder shall not be shared by the newly admitted
Members, but rather shall remain allocated to existing Members.

<PAGE> 22

D. PROVISIONAL ALLOCATION. If any amount claimed by the
Company to constitute a deductible expense in any Fiscal Year is treated by any
Federal, state or local taxing authority as a payment made to a Member in such
Member's capacity as a member of the Company for income tax purposes, with
regard to such authority, items of income and gain of the Company for such
Fiscal Year shall first be allocated to such member to the extent of such
payment.

6.4 WITHDRAWALS FROM CAPITAL ACCOUNTS. No Member shall, except as
provided in Section 6.5 below, have the right to withdraw any amount from its
Capital Account without the consent of both the Manager and a Majority Interest
of the Members other than the withdrawing Member.

6.5 DISTRIBUTIONS. From time to time, as the Manager in its sole and
absolute discretion shall determine, the Manager may distribute cash or other
property to the Members in proportion to their respective Capital Accounts; with
it being understood, however, that the Manager shall have the absolute right to
cause the Company to retain, invest and reinvest any and all cash or other
assets, including the proceeds from sale or other disposition of Company
investments, that no such discretionary distributions shall be required and that
the Manager does not intend generally, if ever, to make such distributions
(although the Manager may, but shall not be required to, make annual
distributions to each Member in an amount which the Manager estimates would
enable the Members to pay Federal and state taxes generated by Company
allocations).

6.6 FORM OF DISTRIBUTION. A Member, regardless of the nature of the
Member's Capital Contribution, has no right to demand and receive any
distribution from the Company in any form than money. Except as otherwise
expressly provided herein, Company distributions and redemptions may be made in
cash or in kind, in the discretion of the Manager, and the decision to effect
distributions in kind or in cash may be made independently of the tax
consequences of that, decision on the Member receiving the distribution.
Distributions may be made to some Members in kind, notwithstanding that others
are simultaneously receiving cash.

6.7 RESTRICTION ON DISTRIBUTIONS.

A. LIMITATION. No Distribution shall be made if, after giving
effect to the Distribution, all liabilities of the Company, other than
liabilities to Members on account of their Membership Interests and liabilities
for which the recourse of creditors is limited to specified property of the
Company, exceed the fair value of the assets of the Company, except that the
fair value of property that is subject to a liability for which the recourse of
creditors is limited shall be included in the assets of the Company only to the
extent that the fair value of that property exceeds that liability.

B. LIABILITY FOR RETURN. A Member who receives a distribution
in violation of Paragraph 6.7A and who knew at the time of the distribution that
the distribution violated Paragraph 6.7A shall be liable to the Company for the
amount of the distribution. A Member who receives a distribution in violation of
Paragraph 6.7A and who did not know at the time of the distribution that the
distribution violated Paragraph 6.7A shall not be liable for the amount of the
distribution. Subject to Paragraph 6.7C, this Paragraph 6.7B shall not affect
any obligation or liability of a Member under this Agreement or applicable law
for the amount of a distribution.

C. LIMITATION ON LIABILITY. A Member who receives a
distribution from the Company shall have no liability for the amount of the
distribution after the expiration of three (3) years from the date of the
distribution unless an action to recover the distribution from such Member is
commenced prior to the expiration of the said 3-year period and an adjudication
of liability against such Member is made in the said action.

<PAGE> 23

6.8 RETURNED DISTRIBUTIONS. The amount of any distribution returned
to the Company by a Member or Economic Interest owner or paid by a Member or
Economic Interest owner for the account of the Company or to a creditor of the
Company, shall be added to the account or accounts From which it was subtracted
when it was distributed to the Member or Economic interest owner.

6.9 OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS. The Members are
aware of the income tax consequences of the allocations made by this Article VI
and hereby agree to be bound by the provisions of this Article VI in reporting
their shares of Company income and loss for income tax purposes.

ARTICLE VII

TRANSFER AND ASSIGNMENT OF INTERESTS

7.1 TRANSFER AND ASSIGNMENT OF INTERESTS. No Member shall be
entitled to transfer, assign, convey, sell, encumber or in any way alienate all
or any part of his or her Membership Interest (collectively, "transfer") except
with the prior written consent of the Manager, which consent may be given or
withheld, conditioned or delayed, as the Manager may determine in their sole and
absolute discretion. Transfers in violation of this Article VII shall only be
effective to the extent set forth in Section 7.7. After the consummation of any
transfer of any part of a Membership Interest, the Membership Interest so
transferred shall continue to be subject to the terms and provisions of this
Agreement and any further transfers shall be required to comply with all the
terms and provisions of this Agreement.

7.2 FURTHER RESTRICTIONS ON TRANSFER OF INTEREST. In addition to
other restrictions found in this Agreement, no Member shall transfer, assign,
convey, sell, encumber or in any way alienate all or any part of his or her
Membership Interest: (i) without compliance with all Federal and state
securities law, (ii) if it would cause the Partnership to fail to qualify for
the exemption from the definition of "investment company" provided by Section
3(c)(1) of the Investment Company Act of 1940, as amended, or involve the resale
of Interests in increments or in a fashion which would cause the Company to lose
the safe harbor which is provided by Paragraph A of Revenue Notice 88-75 from
the definition of "publicly traded partnership" contained in Section 7704 of the
Code (and the Company shall not list the Interests on an established securities
market), or (iii) if the Membership Interest to be transferred, when added to
the total of all other Membership Interests transferred in the preceding twelve
(12) consecutive months prior thereto, would cause the tax termination of the
Company under Code Section 708(b)(1)(B).

7.3 SUBSTITUTION OF MEMBERS. An Assignee of a Membership Interest
shall have the right to become a substitute Member only if (i) the requirements
of Sections 7.1 and 7.2 relating to consent of the Manager and securities and
tax requirements hereof are met (ii) the Assignee executes an instrument
satisfactory to the Manager accepting and adopting the terms and provisions of
this Agreement, and (iii) the Assignee pays any reasonable expenses in
connect:ion with his or her admission as a new Member. The admission of an
Assignee as a substitute Member shall not result in the release of the Member
who assigned the Membership Interest from any liability that such Member may
have to the Company.

7.4 PERMITTED TRANSFERS. The Economic Interest of any Member may be
transferred subject, to compliance with Sections 7.2 and 7.3, but without the
prior written consent of the Manager as required by Section 7.1, by the Member
by inter vivos (lift or by testamentary transfer to any spouse, parent, sibling,
in-law, child or grandchild of the Member, or to a trust for the benefit of the
Member or such spouse, parent, sibling, in-law, child or grandchild of the
Member.

<PAGE> 24

7.5 EFFECTIVE DATE OF PERMITTED TRANSFERS. Any permitted transfer of
all or any portion of a Membership Interest or an Economic Interest shall be
effective as of the date provided in Section 6.3 Following the date upon which
the requirements of Sections 7.1, 7.2 and 7.3 have been met. Any transferee of a
Membership Interest shall take subject to the restrictions on transfer imposed
by this Agreement.

7.6 RIGHTS OF LEGAL REPRESENTATIVES. If a Member who is an
individual dies or is adjudged by a court of competent jurisdiction to be
incompetent to manage the Member's person or property, the Member's executor,
administrator, guardian, conservator, or other legal representative may exercise
all of the Member's rights for the purpose of settling the Member's estate or
administering the Member's property, including any power the Member has under
the Articles or this Agreement to give an assignee the right to become a Member.
If a Member is a corporation, trust, or other entity and is dissolved or
terminated, the powers of that Member may be exercised by his or her legal
representative or successor.

7.7 NO EFFECT TO TRANSFERS IN VIOLATION OF AGREEMENT. Upon any
transfer of a Membership Interest in violation of this Article VII, the
transferee shall have no right to vote or participate in the management of the
business, property and affairs of the Company or to exercise any rights of a
Member. Such transferee shall only be entitled to become an Assignee and
thereafter shall only receive the share of one or more of the Company's Profits,
Losses and distributions of the Company's assets to which the transferor of such
Economic Interest would otherwise be entitled. Notwithstanding the immediately
preceding sentences, if, in the determination of the Manager, a transfer in
violation of this Article VII would cause the tax termination of the Company
under Code Section 708(b)(1)(B), the transfer shall be null and void and the
purported transferee shall not become either a Member or an Assignee.

ARTICLE VIII

CONSEQUENCES OF DISSOLUTION EVENTS

Upon the occurrence of a Dissolution Event as to the Manager, the
Company shall dissolve unless the remaining Members ("Remaining Members")
holding a majority of the Percentage Interests which all Remaining Members hold,
consent within ninety (90) days of the Dissolution Event to the continuation of
the business of the Company and to the election of a new Manager.

ARTICLE IX

ACCOUNTING, RECORDS, REPORTING BY MEMBERS

9.1 BOOKS AND RECORDS. The books and records of the Company shall be
kept, and the financial position and the results of its operations recorded, in
accordance with the accounting methods followed for Federal income tax purposes.
The books and records of the Company shall reflect all the Company transactions
and shall be appropriate and adequate for the Company's business. The Company
shall maintain at its principal office in all of the following:

(a) A current list of the full name and last known business or
residence address of each Member and Assignee set forth in alphabetical order,
together with the Capital Contributions, Capital Account and Percentage Interest
of each Member end Assignee;

(b) A current list of the full name and business or residence
address of each Manager;

<PAGE> 25

(c) A copy of the Articles and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which the
Articles or any amendments thereto have been executed;

(d) Copies of the Company's Federal, state, and local income
tax or information returns and reports ,if any, for the six (6) most recent
taxable years.

(e) A copy of this Agreement and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which this
Agreement or any amendments thereto have been executed;

(f) Copies of the financial statements of the Company, if any,
for the six most recent Fiscal Years; and

(g) The Company's books and records as they relate to the
internal affairs of the Company for at least the current and past four (4)
Fiscal Years.

9.2 DELIVERY TO MEMBERS AND INSPECTION.

A. DELIVERY OF INFORMATION. Upon the request of any Member or
Assignee for purposes reasonably related to the interest of that Person as a
Member or Assignee, the Manager shall promptly deliver to the requesting Member
or Assignee, at the expense of the Company a copy of the information required to
be maintained under Paragraphs 9.1(a), (b) and (d) and a copy of this Agreement.

B. INSPECTION AND COPYING. Each Member, Manager and Assignee
has the right, upon reasonable request for purposes reasonably related to the
interest of the Person as Member, Manager or Assignee, to;

(i) inspect and copy during normal business hours any of
the Company records described in Paragraphs 9.1(a) through 9. l (g); and

(ii) obtain from the Manager, promptly after their
becoming available, a copy of the Company's Federal, state, and local income tax
or information returns for each Fiscal Year.

C. RIGHT TO REQUEST. Any request, inspection or copying by a
Member or Assignee under this Section 9.2 may be made by that Person or that
Person's agent or attorney.

D. COPIES OF AMENDMENTS. The Manager shall promptly furnish to
a Member a Copy of any amendment to the Articles or this Agreement executed by
the Manager pursuant to a power of attorney from the Member.

9.3 ANNUAL AND QUARTERLY STATEMENTS.

A. DELIVERY OF STATEMENTS. Within one-hundred and twenty (120)
days after the end of each Fiscal Year, the Manager shall prepare, and each
Member shall be furnished with, an Annual Report of the Company which shall
contain the following.

(i) a balance sheet as of the end of the Fiscal Year and
statements of income and expense, Members' equity, changes in financial position
and cash flow for the Year then ended, all of which shall be audited by and
accompanied by an audit report thereon of a certified public accountat or by the
certificate of the Manager stating that such financial statements were prepared
without audit from the Company's books and records;

<PAGE> 26

(ii) a report of the activities of the Company during the
Fiscal Year Then ended; and

(iii) a list of the Company's holdings ana their values.

In addition, the Manager shall also prepare and distribute to each Member
quarterly financial reports containing a list of the Company's holdings and
their values, as determined by the Manager.

B. TAX INFORMATION. The Manager shall cause to be prepared at
least annually, at Company expense, information necessary for the preparation of
the Members' and Assignees Federal and state income tax returns. The Manager
shall send or cause to be sent to each Member or Assignee within ninety (90)
days after the end of each taxable year such information as is necessary to
complete Federal and state income tax or information returns.

9.4 COMPANY ACCOUNTS. The Manager shall maintain the funds and
property of the Company with such Persons as the Manager may select.

9.5 ACCOUNTING DECISIONS AND RELIANCE ON OTHERS. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by the Manager. The Manager may rely upon the advice of their accountants
as to whether such decisions are in accordance with accounting methods followed
for Federal income tax purposes.

9.6 TAX MATTERS FOR THE COMPANY HANDLED BY MANAGER AND TAX MATTERS
Partner. The Manager shall from time to time cause the Company to make such tax
elections as they deem in the best interests of the Company and the Members. The
Tax Matters Partner shall represent the Company (at the Company's expense) in
connection with all examinations of the Company's affairs by tax authorities,
Including resulting judicial and administrative proceedings, and shall expend
The Company funds for professional services and costs associated therewith. The
Tax Matters Partner shall oversee the Company tax affairs in the overall best
interests of the Company. If for any reason the Tax Matters Partner can no
longer serve in that capacity or ceases to be a Member or Manager, as the case
may be, the Manager may designate another to be Tax Matters Partner.

ARTICLE X

DISSOLUTION AND WINDING UP

10.1 DISSOLUTION. The Company shall be dissolved, its assets shall be
diposed of, and its affairs wound up on the first to occur of the following:

(a) The entry of a decree of judicial dissolution;

(b) The vote of a Majority Interest (which may include the
Manager) end the concurrence of the Manager; or

(c) The occurrence of a Dissolution Event as to the last
remaining Manager and the failure of the Remaining Members and to consent in
accordance with Article VIII to continue the business of the Company within
ninety (90) days after the occurrence of such event.

10.2 CERTIFICATE OF DISSOLUTION. As soon as possible following the
occurrence of any of the events specified in Section 10.1, the Manager who has
not wrongfully dissolved the Company or, if none, the Members, shall execute a
Certificate of Dissolution in such form as shall be prescribed by the California
Secretary of State and file the Certificate as required by the Act.

<PAGE> 27

10.3 WINDING UP. Upon the occurrence of any event specified in
Section 10.1, the Company shall continue solely for the purpose of winding up
its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors. The Manager who has not wrongfully dissolved the
Company or, if none, the Members, shall be responsible for overseeing the
winding up and liquidation of Company, shall take full account of the
liabilities of Company and assets, shall either cause its assets to be said or
distributed, and if said shall cause the proceeds therefrom, to the extent
sufficient therefor, to be applied and distributed as provided in Section 10.5.
The Persons winding up the affairs of the Company shall give written notice of
the commencement of winding up by mail to all known creditors and claimants
whose addresses appear on the records of the Company. The Manager or Members
winding up the affairs of the Company shall not be entitled to any compensation
for such services.

10.4 DISTRIBUTIONS IN KIND. Any non-cash asset distributed to one or
more Members shall first be valued to determine the Profit or Loss that would
have resulted if such asset were said for such value, such Profit or Loss shall
then be allocated pursuant to Article VI, and the Members' Capital Accounts
shall be adjusted to reflect such allocations. The amount distributed and
charged to the Capital Account of each Member receiving an interest in such
distributed asst shall be the value of such interest (net of any liability
secured by such asset that such Member assumes or takes subject to).

10.5 ORDER OF PAYMENT UPON DISSOLUTION. Alter determining that all
known debts and liabilities of the Company, including, without limitation, debts
and liabilities to Members who are creditors of the Company, have been paid or
adequately provided for, the remaining assets shall be. distributed to the
Members in accordance with their positive Capital Account balances after taking
into account allocations for the Company's taxable year during which liquidation
occurs. Such liquidating distributions shall be made by the end of the Campday's
taxable year in which the Company is liquidated, or, if later, within ninety
(90) days after the date of such liquidation.

10.6 LIMITATIONS ON PAYMENTS MADE IN Dissolution. Except as otherwise
specifically provided in this Agreement, each Member shall only be entitled to
look solely at the assets of the Company for the return of his or her positive
Capital Account balance and shall have no recourse for his or her Capital
Contribution and/or share of Profits (upon dissolution or otherwise) against
Manager or any other Member,

10.7 CERTIFICATE OF CANCELLATION. The Managers or Members who filed
the Certificate of Dissolution shall cause to be filed in the office of and on a
form prescribed by, the California Secretary of State, a Certificate of
Cancellation of the Articles upon the completion of the winding up of the
affairs of the Company.

ARTICLE XI

INDEMNIFICATION

11.1 INDEMNIFICATION. Provided that(i)the person to be indemnified
was acting in good faith within what he reasonably believed to be the scope of
his employment or authority and for a purpose which he reasonably believed to be
in the furtherance of the purpose and best interests of the Company or the
Members, and (ii) the action or failure to act in which respect of which
indemnification is sought does not constitute negligence, willful misconduct or
violation of applicable law, the Manager and its Affiliates shall be indemnified
and held harmless by the Company from and against any and all losses,
liabilities, damages and expenses arising form claims, demands, investigations,
actions, suits or proceedings, whether civil, criminal or administrative, in
which it may be involved. as a party or otherwise, by reason of its status as a
Manager or Affiliate thereof, as the case may be, or any acts

<PAGE> 28

or omissions by it, or the business or its or his management of the affairs of
the Company, whether or not it continues to be such at the time any such loss,
liability, damage or expense is paid or incurred. The rights of indemnification
provided in this Article XI are in addition to any rights to which the Manager
may otherwise be entitled by contract or as a matter of law and shall extend to
its successors and assigns and apply to the fullest extent permitted under the
Act, the Employee Retirement Income Security Act of 1974, as amended, the
Federal securities laws or any other applicable statute. In particular, and
without limitation of the foregoing, the Manager shall be entitled to
indemnification by the Company against reasonable expenses (as incurred),
including attorneys' fees actually and necessarily incurred, by the Manager in
connection with the defense of any action to which the Manager may be a party,
and as to which it shall be entitled to indemnification hereunder, including any
derivative or similar action elating to the right of the Company to procure a
judgement in its favor.

11.2 SUCCESSORS AND ASSIGNS; LIMITATIONS. This Article XI shall inure
to the benefit of the Manager, its shareholders, partners, employees and agents,
the employees and agents of the Company, including Affiliates of the Manager,
and their respective heirs, executors, administrators, successors and assigns.

ARTICLE XII

COMPETING ACTIVITIES

The Manager need not devote all of its business time to the affairs of
the Company, but shall devote only so much of its time and attention as it shall
deem necessary and advisable. Each of the parties hereto acknowledges and agrees
that any of the Members may engage in or possess an interest in other business
ventures of any nature and description independently or with others, and neither
the Company nor the Members shall have any right by virtue of this Agreement in
or to such independent ventures or to the income or profits derived therefrom.
No Member shall be accountable to The Company for any investment or business
opportunity which a Member hereafter becomes aware of by reason of the affairs
of the Company. The Members and each of them hereby waive any and all rights
which they or any of them have now or may have in the future by reason of the
doctrine of partnership or corporate opportunity in connection with the affairs
of the Company. The fact that any Member, or any Affiliate of any Member, or a
member of his or her family, is employed by, or is directly or indirectly
interested in or connected with, any person, firm or corporation employed or
engaged by the Company to render or perform a service, or from whom the Company
may make any purchase, or to whom the Company may make any sale, or from or to
whom the Company may obtain or make any loan or enter into any lease or other
arrangement, shall not prohibit the Company from engaging in any transaction
with such person, firm or corporation, or create any additional duty of
justification by such Member or such person, firm or corporation beyond that of
an unrelated party, and neither the Company nor any other Member shall have any
right in or to any revenues or profits derived from such transaction by such
Member, Affiliate, person, firm or corporation. Neither the Company nor any
Member shall have any right in or to any such independent venture or Investment
or the revenues or profits derived therefrom. The above references to Members
include the Manager, whether or not a Member. Anything herein to the contrary
notwithstanding, however, the Manager shall not acquire securities from or sell
securities to the Company without the prior consent of all of the Members.

<PAGE> 29

ARTICLE XIII

MISCELLANEOUS

13.1 COUNSEL TO THE COMPANY. Counsel to the Company may also be
counsel to the Manager or any Affiliate of the Manager. The Manager may execute
on behalf of the Company and the Members any consent to the representation of
the Company that counsel may request pursuant to the California Rules of
Professional Conduct or similar rules in any other jurisdiction ("Rules"). The
Company has initially selected Cohen, Makoff & Kinnear LLP ("Company Counsel")
as legal counsel to the Company. Each Member acknowledges that Company Counsel
does not represent any Nonmanager Member in the absence of a clear and explicit
written agreement to such effect between the Nonmanager Member and Company
Counsel, and that in the absence of any such agreement Company Counsel shall owe
no duties directly to a Nonmanager Member. Notwithstanding adversity that may
develop, in the event any dispute or controversy arises between any Members and
the Company, or between any Members or the Company, on the one hand, and a
Manager (or Affiliate of a Manager) that Company Counsel represents, on the
other hand, then each Member agrees that Company Counsel may represent either
the Company or such Manager (or his or her Affiliate), or both, in any such
dispute or controversy to the extent permitted by the Rules, and each Member
hereby consents to such representation. Each Member further acknowledges that:
(a) Company Counsel has represented the interests of the Manager and/or its
Affiliates in connection with the formation of the Company and the preparation
and negotiation of this Agreement and (b) while communications with Company
Counsel concerning the formation of the Company, its Members and Manager may be
confidential with respect to third parties, no Member has any expectation that
such communications are confidential with respect to the Manager or any of its
Affiliates.

13.2 COMPLETE AGREEMENT. This Agreement and the Articles constitute
the complete and exclusive statement of agreement among the Members and the
Manager with respect to the subject matter herein and therein and replace and
supersede all prior written and oral agreements or statements by and among the
Members and the Manager or any of them. No representation, statement, condition
or warranty not contained in this Agreement or the Articles will be binding on
the Members or the Manager or have any force or effect whatsoever. To the extent
that any provision of the Articles conflict with any provision of this
Agreement, the Articles shall control.

13.3 BINDING EFFECT. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of the Members and their respective successors and assigns.

13.4 PARTIES IN INTEREST. Except as expressly provided in the Act,
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on any Persons other than the Members and Manager and their
respective successors and assigns nor shall anything in this Agreement relieve
or discharge the obligation or liability of any third person to any party to
this Agreement, nor shall any provision give any third person any right of
subrogation or action over or against any party to this Agreement.

13.5 PRONOUNS; STATUTORY REFERENCES. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require. Any reference to
the Code, the Regulations, the Act or other statutes or laws will include all
amendments, modifications, or replacements of the specific sections and
provisions concerned,

24
<PAGE> 30

13.6 HEADINGS. All headings herein are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.

13.7 INTERPRETATION. In the event any claim is made by any Member
relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Member or his or her counsel.

13.8 REFERENCES TO THIS AGREEMENT. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.

13.9 JURISDICTION: ARBITRATION. Each Member hereby consents to the
exclusive Jurisdiction of the state and Federal courts sitting in the States of
California or Nevada in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement. Each Member further agrees that personal jurisdiction over him or her
may be affected by service of process by registered or certified mail addressed
as provided in Section 13.13 of this Agreement, and that when so made shall be
as if served upon him or her personally within the States of California or
Nevada. Except as otherwise provided in this Agreement, any controversy between
the parties arising out of this Agreement shall be submitted to the National
Association of Securities Dealers, Inc. ("NASD"), or to the New York Stock
Exchange, Inc. ("NYSE") if the NASD refuses to accept jurisdiction. Any such
arbitration shall take place in San Francisco, California. The costs of the
arbitration, including any NASD or NYSE administration fee, the arbitrator's
fee, and costs for the use of facilities during the hearings, shall be borne
equally by the parties to the arbitration. Attorneys' fees may be awarded to the
prevailing or most prevailing party at the discretion of the arbitrator. The
arbitrator shall not have any power to alter, amend, modify or change any of the
terms of this Agreement nor to grant any remedy which is either prohibited by
the terms of this Agreement, or not available in a court of law. Each of the
parties reserves the right to file with a court of competent jurisdiction an
application for temporary or preliminary injunctive relief, writ of attachment,
writ of possession, temporary protective order and/or appointment of a receiver
on the grounds that the arbitration award to which the applicant may be
entitled may be rendered ineffectual in the absence of such relief. Judgement
upon the award rendered by the arbitrator may be entered in any Court having
jurisdiction thereof.

13.10 EXHIBITS. All Exhibits attached to this Agreement are
incorporated and shall be treated as if set forth herein.

13.11 SEVERABILITY. If any provision of this Agreement or the
application of,such provision to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
persons or circumstances other than those to which it is held invalid shall not
be affected thereby.

13.12 ADDITIONAL DOCUMENTS AND ACTS. Each Member agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be neccessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and the
transactions contemplated hereby.

13.13 NOTICES. Any notice to be given or to be served upon the Company
or any party hereto in connection with this Agreement must be in writing (which
may include facsimile) and will be deemed to have been given and received when
delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member or Manager at the address specified in

<PAGE> 31

Exhibit A hereto. Any party may, at any time by giving five (5) days' prior
written notice to the other parties, designate any other address in substitution
of the foregoing address to which such notice will be given.

13.14 AMENDMENTS. This Agreement may be amended only upon the written
consent thereto of the Manager and a Majority Interest of the Nonmanager
Members, except that the Manager may amend this Agreement without the consent of
or notice to any of the Members to (a) cure any ambiguity, correct or supplement
any provision in the Agreement which may be inconsistent with any other
provision in this Agreement, or make any other provisions with respect to
matters or questions arising under the Agreement which will not be inconsistent
with the intent of the Agreement; (b) delete or add any provision of the
Agreement required to be so deleted or added by the Securities Exchange
Commission or by a state securities law administrator or similar such official,
which addition or deletion is deemed by such agency or official to be for the
benefit or protection of the Members' (c) reflect the withdrawal, expulsion,
addition or substitution of Members; (d) reflect the proposal, promulgation or
amendment of Regulations under Code Section 704, if, in the opinion of the
Manager, the amendment does not have a material adverse effect on the Members;
(e) elect for the Company to be bound by any successor statute to the Act if, in
the opinion of the Manager, the amendment does not have a material adverse
effect on the Members; (f) conform the Agreement to changes in the Act or
interpretations thereof which, in the discretion of the Manager, it believes
appropriate, necessary or desirable, if, in its reasonable opinion, such
amendment does not have a materially adverse effect on the Members or the
Company; to) change the name of the Company; and (h) make any change which, in
the discretion of the Manager, is advisable to qualify or to continue the
qualification of the Company as a limited liability company or that is necessary
or advisable, in the discretion of the Manager, so that the Company will not be
treated as an association taxable corporation for Federal income tax purposes.
Any amendments made pursuant to this Section 13.14 may by its terms be made
effective as of the date of this Agreement.

13.15 RELIANCE ON AUTHORITY OF PERSON SIGNING AGREEMENT. If a Member
is not a natural person, neither the Company nor any Member will (a) be required
to determine the authority of the individual signing this Agreement to make any
commitment or undertaking on behalf of such entity or to determine any fact or
circumstance bearing upon the existence of the authority of such individual or
(b) be responsible for the application or distribution of proceeds paid or
credited to individuals signing this Agreement on behalf of such entity.

13.16 NO INTEREST IN COMPANY PROPERTY; WAIVER OF ACTION FOR
PARTITION. No Member or Assignee has any interest in specific property of the
Company. Without limiting the foregoing, each Member and Assignee irrevocably
waives during the term of the Company any right that he or she may have to
maintain any action for partition with respect to the property of the Company.

13.17 MULTIPLE COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

13.18 ATTORNEY FEES. In the event that any dispute hereunder should
result in litigation, the prevailing party in such dispute shall be entitled to
recover from the other party all reasonable foes, costs and expenses of
enforcing any right of the prevailing party, including without limitation,
reasonable attorneys' fees and expenses, all of which shall be deemed to have
accrued upon the commencement of such action end shall be paid whether or not
such action is prosecuted to judgement. Any judgement or order entered in such
action shall contain a specific provision providing for the recovery of attorney
fees and costs incurred in enforcing such judgement and an award of
pre-judgement interest from the date of the breech at the maximum rate of
interest allowed by law. For the purposes of this Section; (a) attorney fees
shall include, without limitation, fees incurred in the

<PAGE> 32

following. (1) post-judgement motions; (2) contempt proceedings; (3)
garnishment, levy, and debtor and third party examinations; (4) discovery; and
(5) bankruptcy litigation and (b) prevailing party shall mean the party who is
determined in the proceeding to have prevailed or who prevails by dismissal,
default or otherwise.

13.19 REMEDIES CUMULATIVE. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any person may be
lawfully entitled.

13.20 POWER OF ATTORNEY. Each Member does hereby constitute and
appoint the Manager its true and lawful representative, in its name, place and
stead, to make, execute, sign, acknowledge, deliver and file all such
instruments, documents and certificates which may from time to time be required
by the laws of the United States of America, the States of California, Nevada
and Delaware, or any other state in which the Company shall determine to do
business, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Company,
including, without limitations the Certificate and amendments thereto.

IN WITNESS WHEREOF, this Operating Agreement has been executed on the
date first above written.

MANAGER

THE SUTRO GROUP
a Nevada corporation

By: _________________________________
John F. Luikart, President

NONMANAGER MEMBERS

_____________________________________
John F. Luikart

_____________________________________
Tom Juda

_____________________________________
Thomas Weinberger

<PAGE> 33

EXHIBIT A

CAPITAL CONTRIBUTION OF MEMBERS AND ADDRESSES OF MEMBERS
AND MANAGER AS OF
--------------------------

<TABLE>
<CAPTION>
Member's Capital Member's
Member's Name Address Contribution Percentage Interest
------------- -------- ------------ -------------------
<S> <C> <C> <C>
John F. Lulkart $ 200,000 11.111

Thomas E, Bertelsen, Jr. $ 500,000 27.777

Tom Jude $ 500,000 27.777

Thomas Weinberger $ 100,OOO 5.555

The Sutro Group $ 500,000 27.777

$1,800,000
==========

Manager's Name Manager's Address
- - - - - - - - - - - - - - - -------------- -----------------

The Sutro Group 3773 Howard Hughes Parkway
Suite 190 South
Las Vegas, NV 89109
</TABLE>

<PAGE> 1
Exhibit 21.1

Subsidiaries of the Registrant

Freedom Securities Holding Corporation - Massachusetts

Freedom Capital Management Corporation - Massachusetts
Freedom Distributors Corporation - Massachusetts
Freedom Trust Company - New Hampshire

The Sutro Group - Nevada
Sutro and Co. Incorporated - Nevada
Sutro Real Estate Corporation - California
Sutro Leasing Corporation - California
Sutro Equipment Leasing Corporation - California
Sutro Investment Partners, Inc. - California
Sutro Specialists, Inc. - California
Sutro Agency Corporation - California
Computer Systems Design, Inc. - California

Tucker Anthony Holding Corporation - Massachusetts
TADCO Alpha, Inc. - New York
TADCO Bravo, Inc. - New York
T.A. of Delaware, Inc. - Delaware
Tucker Anthony Leasing Corporation - Massachusetts
Tucker Anthony Realty Corporation - Massachusetts
Tucker Anthony Incorporated - Massachusetts
Gabriele, Hueglin & Cashman, Inc. - New York
GH&C Advertising Agency, Inc. - New York
Tucker Anthony Insurance, Inc. - Massachusetts
Tucker Anthony Insurance Agency of Maine, Inc. - Maine
Tucker Anthony Agency of N.Y., Inc. - New York
Tucker Anthony Insurance Agency of N.H., Inc. - New Hampshire

Freedom Clearing Corporation - Massachusetts

Freedom Services Corporation - Delaware

Freedom Specialist, Inc. - Delaware

Tocqueville Asset Management L.P. - New York

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected
Historical Consolidated Financial and Other Data" and "Experts" and to the use
of our report dated January 22, 1998, in the Registration Statement (Form S-1
No. 333- ) and related Prospectus of Freedom Securities dated January 26,
1998.

/s/ Ernst & Young LLP

New York, New York
January 22, 1998

<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 12,936
<SECURITIES> 0
<RECEIVABLES> 74,314
<ALLOWANCES> 0
<INVENTORY> 423,522
<CURRENT-ASSETS> 0
<PP&E> 22,903
<DEPRECIATION> 2,439
<TOTAL-ASSETS> 727,587
<CURRENT-LIABILITIES> 0
<BONDS> 101,446
0
0
<COMMON> 82
<OTHER-SE> 102,244
<TOTAL-LIABILITY-AND-EQUITY> 727,587
<SALES> 0
<TOTAL-REVENUES> 398,183
<CGS> 0
<TOTAL-COSTS> 337,268
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,480
<INCOME-PRETAX> 32,435
<INCOME-TAX> 13,737
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,698
<EPS-PRIMARY> 2.16
<EPS-DILUTED> 2.16

</TABLE>

<PAGE> 1

Exhibit 99.1

Freedom Securities Corporation
One Beacon Street
Boston, MA 02108
Attn: John H. Goldsmith, Chairman

Dear John:

I hereby consent to being identified as a director of Freedom Securities
Corporation (the "Company"), effective prior to consummation of the initial
public offering of the Company, in any registration statements filed by the
Company with respect to its initial public offering.

Very truly yours,

/s/ Gregory N. Thomas