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Exhibit 10.12

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AMENDED AND RESTATED

CREDIT AGREEMENT

by and between

LaBRANCHE & CO. LLC

AND

THE BANK OF NEW YORK

Dated as of October 31, 2002

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TABLE OF CONTENTS

 
   
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ARTICLE 1.    ACCOUNTING TERMS, DETERMINATION OF MARKED TO MARKET VALUE,
                           DEFINITIONS   1   Section 1.1.   Accounting Terms   1
  Section 1.2.   Determination of Marked to Market Value   1   Section 1.3.  
Definitions   1   Section 1.4.   Interpretation   4
ARTICLE 2.    LOANS
 
5   Section 2.1.   Amounts   5   Section 2.2.   Notice of Borrowing; Note   5  
Section 2.3.   Termination or Reduction of Commitment   5   Section 2.4.  
Increase of Commitment   6   Section 2.5.   Use of Proceeds   6   Section 2.6.  
Commitment Fee   6   Section 2.7.   Interest   6   Section 2.8.   Repayments;
Rollovers   7   Section 2.9.   Payments   7   Section 2.10.   Capital Adequacy  
8   Section 2.11.   Extension of Termination Date   8
ARTICLE 3.    REPRESENTATIONS AND WARRANTIES
 
8   Section 3.1.   Representations and Warranties   8
ARTICLE 4.    CONDITIONS OF LENDING
 
11   Section 4.1.   Conditions to Effectiveness and the Initial Loan   11  
Section 4.2.   Conditions to Each Loan   12
ARTICLE 5.    COVENANTS
 
12   Section 5.1.   Affirmative Covenants   12   Section 5.2.   Negative
Covenants   15
ARTICLE 6.    EVENTS OF DEFAULT
 
17   Section 6.1.   Events of Default   17

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ARTICLE 7.    OTHER PROVISIONS
 
19   Section 7.1.   Release of Collateral   19   Section 7.2.   Expenses and
Indemnification   19   Section 7.3.   Covenants to Survive   20   Section 7.4.  
Binding Agreement   20   Section 7.5.   Amendments and Waivers   20   Section
7.6.   No Waiver   20   Section 7.7.   Notices   20   Section 7.8.   Section
Headings   21   Section 7.9.   Severability   21   Section 7.10.   Entire
Agreement   21   Section 7.11.   Consent to Jurisdiction; Service of Process,
Waiver of Trial by Jury   21   Section 7.12.   Governing Law   22  
EXHIBITS
 
 
 
    Exhibit A   Promissory Note       Exhibit B   Security Agreement      
Exhibit C   Opinion of Counsel       Exhibit D   Compliance Certificate    

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AMENDED AND RESTATED CREDIT AGREEMENT

        Amended and Restated Credit Agreement, dated as of October 31, 2002 by
and between LaBRANCHE & CO. LLC, a New York limited liability company (the
"Borrower") and THE BANK OF NEW YORK (the "Bank").

ARTICLE 1.    ACCOUNTING TERMS, DETERMINATION OF MARKED TO MARKET VALUE,
DEFINITIONS

        Section 1.1.    Accounting Terms.    

        Unless otherwise defined, all accounting terms shall be construed, and
all computations or classifications of assets or liabilities and of income and
expenses shall be made or determined, in accordance with generally accepted
accounting principles consistently applied.

        Section 1.2.    Determination of Marked to Market Value.    

        The "marked to market value" of all or any portion of the Collateral (as
defined in Section 1.3 hereof) shall be based upon such price thereof as is
provided by Interactive Data Service (or such other nationally accepted pricing
service as the Bank may select); provided, however, that if trading is suspended
in any Specialist Security (as defined in Section 1.3 hereof) which comprises
all or part of the Collateral:

        (a)    on the first day of such suspension in trading, the marked to
market value of such Specialist Security shall be the last price thereof
provided by Interactive Data Service (or such other nationally accepted pricing
service as the Bank may select) immediately prior to such suspension in trading;

        (b)    on the second day of such suspension in trading, the marked to
market value of such Specialist Security shall be (i) an amount equal to 50% of
the last price thereof provided by Interactive Data Service (or such other
nationally accepted pricing service as the Bank may select) immediately prior to
such suspension in trading, or (ii) if the Bank shall have received information
which indicates that trading in such Specialist Security will continue to be
suspended for more than two (2) days, such lesser value as the Bank may
determine; and

        (c)    on the third and each subsequent day of such suspension in
trading, the marked to market value of such Specialist Security shall, unless
the Bank and the Borrower otherwise agree, be zero.

        Section 1.3.    Definitions.    

        As used herein, in the Note (as defined in this Section 1.3) and, except
as otherwise defined, in any certificate, document or report delivered pursuant
hereto or thereto, the following terms shall have the following meanings:

        "Affiliate" shall mean any member of the Borrower, or any Person
directly or indirectly controlling, controlled by or under common control with
the Borrower, or any member of the Borrower.

        "Agreement" shall mean this Credit Agreement as the same may from time
to time be amended, supplemented or otherwise modified.

        "AMEX" shall mean the American Stock Exchange, Inc.

        "Bank" shall mean The Bank of New York.

        "Borrower" shall mean LaBranche & Co. LLC, a New York limited liability
company.

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        "Borrowing Base" shall mean, at any time, an amount equal to the sum of
the Specialist Borrowing Base at such time plus the Non-Specialist Borrowing
Base at such time.

        "Borrowing Date" shall mean the date on which the Bank makes any Loan.

        "Broker Call Rate" shall mean the rate established from time to time by
the Bank in its sole discretion as its broker loan rate.

        "Business Day" shall mean any day other than a day on which commercial
banks in New York, New York are required or permitted by law to close.

        "Certificate of Conversion" shall mean the Certificate of Conversion of
Limited Partnership to Limited Liability Company of the Borrower (and any
amendments thereto), filed with the Secretary of State of the State of New York
pursuant to Section 1006 of the New York Limited Liability Company Law, on
June 30, 2000.

        "CFTC" shall mean the Commodity Futures Trading Commission, or any
regulatory body which succeeds to the functions thereof.

        "Close of Business" shall mean 5PM on any Business Day.

        "Collateral" shall mean all Specialist Securities and/or Non-Specialist
Securities in which the Bank has a security interest and upon which the Bank has
a lien pursuant to the Security Agreement as collateral security for the payment
and performance of all obligations and liabilities of the Borrower hereunder and
under the other Loan Documents.

        "Collateral Value" shall mean, at any time, the aggregate marked to
market value at such time of all Collateral at such time.

        "Commitment" shall mean $200,000,000, as the same may be (a) reduced
from time to time pursuant to Section 2.3(a)(ii) hereof and/or (b) increased
pursuant to Section 2.4 hereof.

        "Concentration Base" shall mean, at any time, an amount equal to 20% of
the Collateral Value at such time, provided that in the case of Collateral
consisting of any stock being a component of the Standard & Poor's 500 Index,
such percentage shall be 30%.

        "Counsel to the Borrower" shall mean Fulbright & Jaworski L.L.P.

        "Default" shall mean an event or condition which would constitute an
Event of Default with the giving of notice or the lapse of time, or both.

        "Dollar" and the sign "$" shall mean lawful money of the United States
of America.

        "DSRO" shall mean the self-regulatory organization designated as the
designated self-regulatory organization of the Borrower pursuant to a plan filed
with the CFTC Pursuant to Regulation 1.52 under the Commodity Exchange Act, as
amended.

        "DTC" shall mean Depository Trust Company.

        "ERISA" shall mean the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated pursuant thereto, as the same may from
time to time be supplemented or amended.

        "Event of Default" and "Events of Default" shall have the meanings
assigned thereto in Section 6.1 hereof.

        "Financial Statements" shall mean the audited consolidated financial
statements of the Parent for the year ended December 31, 2001.

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        "FOCUS Report" shall mean a Financial and Operational Combined Uniform
Single Report required to be filed on a monthly or quarterly basis, as the case
may be, with the SEC or the NYSE, or, if the Borrower is registered as a futures
commission merchant with the CFTC, the DSRO or the NFA, any report which is
required in lieu of such report.

        "Governmental Authority" means any foreign, federal, state, municipal or
other government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.

        "Indebtedness" of any Person shall mean (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property,
(b) all obligations of such Person for the payment of rent or hire of property
of any kind whatsoever under leases or lease arrangements which under generally
accepted accounting principles are required to be capitalized, (c) all
obligations of such Person under conditional sales or other title retention
agreements, and (d) all indebtedness for borrowed money secured by any lien upon
property owned by such Person (whether or not the holder of such indebtedness
has any recourse against such Person).

        "Loan" and "Loans" shall have the meanings assigned thereto in
Section 2.1 hereof.

        "Loan Document" shall mean any one of the Loan Documents.

        "Loan Documents" shall mean, collectively, this Agreement, the Note, the
Security Agreement and all other agreements, documents, instruments and/or
certificates executed and/or delivered pursuant hereto or thereto or in
connection herewith or therewith.

        "Maturity Date" shall mean with respect to a Loan the Business Day
immediately succeeding the Borrowing Date of such Loan, as such Maturity Date
may be extended as provided in Section 2.8(a).

        "NFA" shall mean the National Futures Association or any other
registered futures association which succeeds to the functions of the National
Futures Association.

        "Non-Specialist Borrowing Base" shall mean, at any time, an amount equal
to 50% of the aggregate marked to market value at such time of all
Non-Specialist Securities which comprise all or part of the Collateral at such
time.

        "Non-Specialist Loans" shall mean Loans, the proceeds of which are or
are to be used for the purpose described in Section 2.5(b) hereof.

        "Non-Specialist Securities" shall mean all securities, investment
property and other financial assets (a) for which the Borrower is not acting as
a specialist on the NYSE pursuant to the rules and regulations of the NYSE and
(b) which (i) are acceptable to the Bank, (ii) are listed on the NYSE and
(iii) were in the account of the Borrower with DTC immediately prior to the
grant by the Borrower to the Bank of a security interest therein and a lien
thereupon pursuant to the Security Agreement.

        "Note" shall mean a promissory note substantially in the form of
Exhibit A attached hereto as the same may from time to time be replaced,
amended, supplemented or otherwise modified.

        "Note Purchase Agreements" shall mean the several Note Purchase
Agreements, each dated June 3, 1998, among the Borrower and the purchasers party
thereto, as the same may be amended, modified or supplemented from time to time.

        "NYSE" shall mean the New York Stock Exchange, Inc.

        "Obligations" shall have the meaning assigned thereto in the Security
Agreement.

        "Option" shall have the meaning assigned thereto in Section 2.4 hereof.

        "Operating Agreement" shall mean the Operating Agreement, dated as of
June 30, 2000, of LaBranche & Co. LLC.

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        "Parent" shall mean LaBranche & Co Inc., a Delaware corporation.

        "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and each successor thereto.

        "Person" shall mean any individual, firm, partnership, limited liability
company, joint venture, corporation, association, business enterprise, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity.

        "Plan" shall mean any employee benefit plan or other plan maintained for
employees of the Borrower or any Subsidiary of the Borrower covered by Title I
of ERISA.

        "SEC" shall mean the Securities and Exchange Commission and each
successor thereto.

        "Security Agreement" shall mean the Security Agreement substantially in
the form of Exhibit B attached hereto as the same may from time to time be
amended, supplemented or otherwise modified.

        "Special Counsel" shall mean Bryan Cave LLP.

        "Specialist Borrowing Base" shall mean, at any time, an amount equal to
70% of the aggregate marked to market value at such time of all Specialist
Securities which comprise all or part of the Collateral at such time.

        "Specialist Loans" shall mean Loans, the proceeds of which are or are to
be used for the purpose described in Section 2.5(a) hereof.

        "Specialist Securities" shall mean all securities, investment property
and other financial assets (a) for which the Borrower is acting as a specialist
on the NYSE pursuant to the rules and regulations of the NYSE and (b) which
(i) are listed on the NYSE and (ii) were in the account of the Borrower with DTC
immediately prior to the grant by the Borrower to the Bank of a security
interest therein and a lien thereupon pursuant to the Security Agreement.

        "Specialist Security" shall mean any one of the Specialist Securities.

        "Subsidiary" shall mean, with respect to any Person, any corporation,
partnership, joint venture, firm or other Person or entity of which more than
50% of the outstanding shares of stock of each class having ordinary voting
power or other equity interests is at the time owned by such Person and/or by
one or more Subsidiaries of such Person; provided, however, that (a) a
partnership (general or limited) shall also be a "Subsidiary" if such Person
and/or one or more of such Person's Subsidiaries own more than 50% of the equity
interests owned by all managing partners or managing general partners, if any,
thereof, and (b) a limited partnership shall also be a "Subsidiary" if such
Person and/or one or more of such Person's Subsidiaries own more than 50% of the
equity interests owned by all general partners thereof.

        "Termination Date" shall mean the later of (i) October 31, 2003 or
(ii) the date to which the Termination Date may be extended pursuant to
Section 2.11 hereof.

        Section 1.4.    Interpretation.    

        Terms defined in the singular shall have a comparable meaning when used
in the plural, unless otherwise defined in the plural. The words "hereof",
"herein", "hereto", "hereunder" and similar expressions mean and refer to this
Agreement and not to any portion or provision of this Agreement.

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ARTICLE 2.    LOANS

        Section 2.1.    Amounts.    

        Subject to the terms and conditions contained in this Agreement, the
Bank agrees to make loans (each, a "Loan" and, collectively, "Loans") to the
Borrower from time to time prior to the Termination Date in an aggregate
principal amount not exceeding at any one time outstanding the lesser of the
Commitment or the Borrowing Base; provided, however, that (a) the aggregate
outstanding principal amount of all Specialist Loans shall not exceed the
Specialist Borrowing Base and (b) the aggregate outstanding principal amount of
all Non-Specialist Loans shall not exceed the Non-Specialist Borrowing Base.
Prior to the Termination Date, the Borrower may use the Commitment by borrowing,
repaying and reborrowing all in accordance with the terms and conditions of this
Agreement.

        Section 2.2.    Notice of Borrowing; Note.    

        When the Borrower desires to borrow a Loan, it shall give the Bank
irrevocable written or fax notice of its intention to borrow under this
Article II not later than one hour before the Close of Business on the date of a
proposed borrowing, specifying (a) the date of the proposed borrowing (which
shall be a Business Day), (b) the amount to be borrowed (which shall be an
integral multiple of $1,000,000), and (c) whether such borrowing is to be a
Specialist Loan or a Non-Specialist Loan. The Loans shall be evidenced by the
Note. The Note shall be dated the date of the first borrowing hereunder and
shall be payable to the order of the Bank in the principal amount of the
Commitment or the aggregate unpaid principal amount of all Loans made to the
Borrower by the Bank, whichever is less. The date of each borrowing, the
principal amount thereof and the aggregate principal amount of Loans outstanding
thereunder may be recorded by the Bank on the schedule attached to the Note, but
the failure of the Bank so to record shall not affect any of the Borrower's
obligations and liabilities hereunder or under any other Loan Document. The
aggregate unpaid principal amount of Loans set forth on such schedule shall,
absent manifest error, be conclusive evidence of the principal amount owing and
unpaid thereon.

        Section 2.3.    Termination or Reduction of Commitment.    

        (a)    Borrower's Option.

        At the Borrower's option, and upon prior written or fax notice to the
Bank at least five (5) Business Days prior to the end of any calendar quarter,
the Borrower, without premium or penalty, may permanently, as of the first day
of the immediately succeeding calendar quarter:

        (i)    terminate the Commitment upon payment in full of the Note,
together with accrued interest thereon to the date of such payment and all fees
and other amounts due the Bank hereunder and under the other Loan Documents; or

        (ii)    reduce the Commitment in integral multiples of $10,000,000 upon
payment of an amount equal to the sum of:

        (A)    the excess, if any, of the then outstanding principal amount of
the Note over the reduced Commitment; plus

        (B)    all accrued interest on such excess to the date of such payment.

Any notice of termination or reduction of the Commitment under this
Section 2.3(a) shall specify that the Commitment is being terminated in full or
reduced in part, the date of such termination or reduction (which shall be a
Business Day) and, in the case of a reduction, (x) the amount of the reduction
and (y) the amount of the payment pursuant to Section 2.3(a)(ii)(A) hereof which
is to be applied to Specialist Loans and/or Non-Specialist Loans (provided that
if the Borrower does not make the specification required by this clause (y),
such payment shall be applied first to the then aggregate

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outstanding principal amount of all Specialist Loans and, thereafter, to the
then aggregate outstanding principal amount of all Non-Specialist Loans).

        Section 2.4.    Increase of Commitment.    

        If, after the date hereof, the NYSE allocates to the Borrower the right
to make a market as a specialist (pursuant to the rules and regulations of the
NYSE) in any additional security listed on the NYSE, the Borrower shall have the
option (the "Option"), exercisable once during the term of this Agreement, to
increase the Commitment by an amount which is equal to or less than 10% of the
Commitment immediately prior to the Borrower's exercise of the Option. If the
Borrower desires to exercise the Option, it shall give the Bank at least three
(3) Business Days' prior irrevocable written or fax notice of its intention to
exercise the Option, which notice (a) shall specify the date (which shall be a
Business Day on or after the day on which such allocation becomes effective) on
which the Commitment is to be increased and the amount of the increase in the
Commitment, and (b) shall be accompanied by (i) evidence satisfactory to the
Bank and its counsel of such allocation by the NYSE (which evidence shall
indicate the date of effectiveness of such allocation) and (ii) if the Borrower
has theretofore executed and delivered to the Bank a Note, a new Note, duly
executed by the Borrower, in the amount of the increased Commitment.

        Section 2.5.    Use of Proceeds.    

        The proceeds of the Loans shall be used by the Borrower (a) to finance
the specialist security positions of the Borrower, (b) to finance the
"purchasing" or "carrying" by the Borrower of "margin stock" other than
specialist security positions (the terms "purchasing", "carrying" and "margin
stock" being as defined in Regulation U promulgated by the Board of Governors of
the Federal Reserve System) or (c) to reduce or retire a Loan outstanding
hereunder.

        Section 2.6.    Commitment Fee.    

        The Borrower shall pay to the Bank on the last Business Day of each
calendar quarter, commencing on the first such day following the date hereof, a
commitment fee at the rate of .25% per annum (calculated on the basis of a
360 day year for the actual number of days involved) on the average daily unused
amount of the Commitment during the quarter (or portion thereof) ending on the
date such payment is due. Any such fee payable with respect to the quarter in
which the Commitment is terminated pursuant to Section 2.3(a)(i), 2.3(b) or 6.1
hereof shall be paid on the date of such termination.

        Section 2.7.    Interest.    

        Each Loan shall bear interest at a rate per annum equal to the Broker
Call Rate, but in no event in excess of the maximum rate permitted by law.
Interest shall be payable (a) monthly on the last Business Day of each month,
commencing on the last Business Day of the month in which the initial Loan is
made, and (b) at maturity. Notwithstanding the foregoing, all principal payments
due on Loans which are in default shall bear interest, payable on demand, from
the date of default until paid (whether before or after judgment) at a rate per
annum equal to the Broker Call Rate plus two percent (2%). Interest shall be
calculated on the basis of a 360 day year for the actual number of days
involved. The interest rate shall change on the effective date of any change in
the Broker Call Rate; provided, however, that the Bank shall have no obligation
to notify the Borrower of such change in the Broker Call Rate.

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        Section 2.8.    Repayments; Rollovers.    

        (a)    Except as otherwise provided herein, each Loan shall be repaid by
the Borrower before the Close of Business on such Loan's Maturity Date.
Notwithstanding the foregoing sentence, and provided that no Default or Event of
Default exists or would exist after giving effect thereto, the Borrower may
request that a Loan be rolled over until not later than the Close of Business on
the Business Day immediately succeeding the Maturity Date of such Loan by giving
the Bank an irrevocable request therefor not later than one hour prior to the
Close of Business on such Maturity Date. As promptly as practicable after the
Bank decides, in its sole and absolute discretion, to roll over such Loan, the
Bank shall give telephonic notice to such effect to the Borrower and the
Maturity Date of such Loan shall be extended to the Close of Business on the
immediately succeeding Business Day. Under no circumstance, however, will the
Bank be obligated to roll over a Loan, even if the Collateral Value therefor is
or is made sufficient pursuant to Section 2.8(b) or (c), and the fact that a
Loan has been rolled over shall not obligate the Bank to do so again and if for
any reason or no reason a Loan is not rolled over, such Loan shall be due and
payable by the Close of Business on its Maturity Date. As used in this Section,
the term "rolled over" shall mean the making of a Loan the proceeds of which
shall be used to repay the Loan made to the Borrower on the immediately
preceding Business Day.

        (b)    If, at any time, whether on or after a Borrowing Date, the
outstanding principal balance of all Specialist Loans shall exceed the
Specialist Borrowing Base, the Borrower shall repay the Specialist Loans in a
sufficient amount (together with accrued interest on the amount repaid to the
date of repayment) such that, after giving effect to such repayment, the
outstanding principal balance of all Specialist Loans does not exceed the
Specialist Borrowing Base; provided, however, that in lieu of making all or part
of such repayment, the Borrower may, pursuant to the Security Agreement, grant
to the Bank a security interest in and lien upon a sufficient number of
Specialist Securities which are not, immediately prior to such grant, part of
the Collateral such that, after giving effect to such grant and any simultaneous
repayment of the Specialist Loans, the aggregate outstanding principal balance
of the Specialist Loans does not exceed the Specialist Borrowing Base.

        (c)    If, at any time, whether on or after a Borrowing Date, the
outstanding principal balance of all Non-Specialist Loans shall exceed the
Non-Specialist Borrowing Base, the Borrower shall repay the Non-Specialist Loans
in a sufficient amount (together with accrued interest on the amount repaid to
the date of repayment) such that, after giving effect to such repayment, the
outstanding principal balance of all Non-Specialist Loans does not exceed the
Non-Specialist Borrowing Base; provided, however, that in lieu of making all or
part of such repayment, the Borrower may, pursuant to the Security Agreement,
grant to the Bank a security interest in and lien upon a sufficient number of
Non-Specialist Securities which are not, immediately prior to such grant, part
of the Collateral such that, after giving effect to such grant and any
simultaneous repayment of the Non-Specialist Loans, the aggregate outstanding
principal amount of the Non-Specialist Loans does not exceed the Non-Specialist
Borrowing Base.

        (d)    Each determination by the Bank of the Non-Specialist Borrowing
Base, the Specialist Borrowing Base and the Collateral Value shall be conclusive
absent manifest error.

        Section 2.9.    Payments.    

        All payments hereunder, under the Note and under the other Loan
Documents shall be made in federal or other immediately available funds. The
Bank is hereby authorized to charge the Borrower's deposit account maintained at
the Bank for each payment of interest and fees due hereunder and under the Note.
If any payment under this Agreement or any other Loan Document becomes due and
payable on a day other than a Business Day, the date of such payment shall be
extended to the next

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succeeding Business Day, and interest thereon (to the extent permitted by law)
shall be payable for the extended time.

        Section 2.10.    Capital Adequacy.    

        (a)    In the event that the Bank shall have determined that any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank (or any
lending office of the Bank) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the Bank's capital as a consequence of its obligations hereunder to a
level below that which the Bank could have achieved but for such adoption,
change or compliance (taking into consideration the Bank's policies with respect
to capital adequacy) by an amount reasonably deemed by the Bank to be material,
then, from time to time, the Borrower shall pay upon demand to the Bank such
additional amount or amounts as will compensate the Bank for such reduction. In
determining such amount or amounts, the Bank may use any reasonable averaging
and attribution methods. The protection of this Section 2.10 shall be available
to the Bank regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which shall have been
imposed.

        (b)    A certificate of the Bank setting forth such amount or amounts as
shall be necessary to compensate the Bank as specified in Section 2.10(a) hereof
shall be delivered to the Borrower and shall be conclusive absent manifest
error.

        (c)    The obligations of the Borrower under Section 2.10(a) hereof
shall survive termination of the Commitment, this Agreement and the other Loan
Documents and payment of the Note and all Loans.

        Section 2.11.    Extension of Termination Date.    

        The Borrower may request an extension of any Termination Date for an
additional 364 days by notice to the Bank not less than 30 (nor more than
90) days prior to such Termination Date. If the Bank agrees to extend such
Termination Date, it shall give notice to the Borrower not later than 20 days
prior to such Termination Date and the Termination Date shall be extended for
364 days. If the Bank, in its sole discretion, refuses to consent to, or fails
to respond to, an extension request, the Commitment shall terminate on the
then-effective Termination Date, and on such Termination Date there shall be due
to the Bank all unpaid principal of, and all accrued and unpaid interest on, all
Loans, and all other amounts due to the Bank hereunder.

ARTICLE 3.    REPRESENTATIONS AND WARRANTIES

        Section 3.1.    Representations and Warranties.    

        The Borrower represents and warrants to the Bank as follows:

        (a)    NYSE Member, AMEX Member and Specialist.    The Borrower is a
member organization of the NYSE and the AMEX and is registered and acting as a
specialist on the NYSE and the AMEX pursuant to the rules and regulations of the
NYSE and the AMEX.

        (b)    Subsidiaries.    The Borrower has no Subsidiaries.

        (c)    Good Standing and Qualification.    The Borrower (i) is a limited
liability company, duly organized, validly existing and in good standing under
the laws of the State of New York, (ii) has all requisite power and authority to
own and operate its properties and to carry on its business as presently
conducted, and (iii) is duly qualified to do business in, and is in good
standing under the

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laws of, each jurisdiction where the character of the properties owned or leased
by it or the transaction of its business makes such qualification necessary.

        (d)    Members of the Borrower.    The Parent is the sole member of the
Borrower.

        (e)    Authority.    The Borrower has all requisite power and authority
(i) to enter into this Agreement, (ii) to make the borrowings contemplated
hereby, (iii) to grant to the Bank, pursuant to the Security Agreement, a
security interest in and lien upon the Collateral, (iv) to execute and/or
deliver this Agreement and each other Loan Document, and (v) to incur and
perform the obligations provided for herein and therein, all of which have been
duly authorized by all necessary and proper action.

        (f)    No Consent.    Except for the consent of the Parent, no consent
or approval or the taking of any other action (including, without limitation, of
or by members of the Borrower or of or by the SEC, the NYSE, the AMEX or any
other Governmental Authority) is required as a condition to (i) any borrowing
hereunder, (ii) the grant to the Bank, pursuant to the Security Agreement, of a
security interest in and lien upon any of the Collateral, (iii) the execution,
delivery or performance of this Agreement or any other Loan Document, or
(iv) the validity or enforceability of this Agreement or any other Loan
Document.

        (g)    Due Execution; Binding Agreements.    This Agreement has been
duly executed and delivered, and this Agreement constitutes, and each other Loan
Document, when executed and delivered for value received, shall constitute, the
valid and legally binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.

        (h)    Litigation.    There are no actions, suits, investigations or
administrative proceedings of or before any Governmental Authority, pending or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
properties or assets, which (i) either in any case or in the aggregate, if
adversely determined, could materially adversely affect the business, prospects,
operations, properties, assets or condition (financial or otherwise) of the
Borrower, (ii) question the validity or enforceability of this Agreement, any
other Loan Document, or any action to be taken in connection with the
transactions contemplated hereby and thereby, or (iii) seek (or are reasonably
expected) to rescind, terminate, revoke, cancel, withdraw, suspend, modify or
withhold any of the franchises, certificates, licenses, permits and other
authorizations referred to in Section 3.l(o) hereof.

        (i)    No Conflicting Law or Agreements.    Neither any borrowing
hereunder nor the grant to the Bank, pursuant to the Security Agreement, of a
security interest in and lien upon any of the Collateral nor the execution,
delivery or performance by the Borrower of this Agreement or any other Loan
Document (i) violates any provision of the Operating Agreement, (ii) violates
any order, decree or judgment, or any provision of any statute, rule or
regulation, (iii) violates or conflicts with, results in a breach of or
constitutes (with notice or lapse of time or both) a default under, any
agreement, mortgage, indenture or contract to which the Borrower is a party, or
by which it or any of its properties or assets is bound, or (iv) results in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or asset of the Borrower other than pursuant to the
Security Agreement. The obligations of the Borrower hereunder constitute
"Permitted Secured Debt" and "Senior Claims", as such terms are defined in the
Note Purchase Agreements.

        (j)    Taxes.    The Borrower has timely filed all tax returns required
to have been filed by it, and all federal, state, municipal, franchise and other
taxes shown to be due and payable on such

9

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filed returns have been paid or have been reserved against, as required by
generally accepted accounting principles, and the Borrower knows of no unpaid
assessment against the Borrower.

        (k)    Financial Statements.    There has heretofore been delivered to
the Bank the Financial Statements. Each of the Financial Statements fairly
presents the financial condition, results of operations and/or changes in
financial position of the Borrower as of the date and for the period referred to
therein and has been prepared in accordance with generally accepted accounting
principles consistently applied throughout the period involved.

        (l)    Adverse Developments.    Since December 31, 2001, there has been
no material adverse change in the business, prospects, operations, properties,
assets or condition (financial or otherwise) of the Borrower other than changes,
occurrences or events affecting the securities industry as a whole.

        (m)    Existence of Assets and Title Thereto.    The Borrower has good
and marketable title to its properties and assets, including the properties and
assets reflected in the Financial Statements (including, without limitation, the
Collateral). Such properties and assets are not subject to any mortgage, pledge,
lien, lease, encumbrance or charge except pursuant to the Security Agreement or
as expressly permitted under the terms of this Agreement.

        (n)    Regulations U and X.    The Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock", and the proceeds
of the borrowings hereunder are not to be used and will not be used, directly or
indirectly, for the purpose of "purchasing" or "carrying" any "margin stock" in
contravention of Regulation U or X promulgated by the Board of Governors of the
Federal Reserve System; the terms "purchasing", "carrying" and "margin stock"
being as defined in Regulation U promulgated by the Board of Governors of the
Federal Reserve System.

        (o)    Licenses, Etc.    The Borrower possesses all franchises,
certificates, licenses, permits and other authorizations from the SEC, the NYSE,
the AMEX and other Governmental Authorities, free from burdensome restrictions,
(i) that are necessary in any material respect for the ownership, maintenance
and operation of its properties and assets or the conduct of its business, and
(ii) the loss of possession of which would have a material adverse effect on the
business, prospects, operations, properties, assets or condition (financial or
otherwise) of the Borrower. The Borrower is not in violation of any of such
franchises, certificates, licenses, permits and other authorizations in any
material respect.

        (p)    Compliance.    The Borrower is not in default with respect to any
order, writ, injunction or decree of any court or of any Governmental Authority
or official or, to the knowledge of the Borrower, in violation of any law,
statute, rule or regulation to which it or any of its properties or assets is
subject. The Borrower is not in default in the payment or performance of any of
its obligations or in the performance of any material mortgage, indenture,
lease, contract or other agreement to which it is a party or by which it or any
of its properties or assets is bound.

        (q)    Leases.    The Borrower enjoys quiet and undisturbed possession
under all leases under which it is operating, and all such leases are valid and
subsisting and not in default.

        (r)    Pension Plans.    The PBGC has not made a determination that,
with respect to any Plan of the Borrower, an event or condition has occurred
which constitutes grounds under Section 4042 of ERISA for the termination of, or
for the appointment of a trustee to administer, any such Plan.

        (s)    Investment Company Act.    The Borrower is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended, and neither the
entering into of this Agreement or any of the other Loan Documents nor the
issuance of the Note nor the performance hereof or thereof nor any borrowing

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hereunder violates or will violate any provision of the Investment Company Act
of 1940, as amended.

        (t)    Security Interest.    The Security Agreement grants and will
grant to or for the benefit of the Bank a continuing security interest in and
lien upon the Collateral. Such security interest and lien (i) constitutes and
will constitute a valid and enforceable security interest and lien under the
laws of the State of New York, (ii) is and will be entitled to all of the
rights, benefits and priorities provided by applicable law, and (iii) is and
will be superior and prior to the rights, now existing or hereafter arising, of
all third persons, whether such rights result by way of mortgage, pledge, lien,
security interest, encumbrance or otherwise. All such action as is necessary in
law has been taken to establish and perfect the security interest of the Bank
in, and its lien upon, the Collateral and to entitle the Bank to exercise all
rights and remedies provided in the Security Agreement and under applicable law,
and no filing, recording, registration or giving of notice or other action is
required in connection therewith except such as have been made or given.

ARTICLE 4.    CONDITIONS OF LENDING

        Section 4.1.    Conditions to Effectiveness and the Initial Loan.    

        This Agreement shall not be effective and the Bank shall have no
obligation to make the initial Loan until the following conditions precedent
have been fulfilled:

        (a)    Note.    The Bank shall have received the Note, duly executed by
the Borrower.

        (b)    Security Agreement.    The Bank shall have received the Security
Agreement, duly executed by the Borrower.

        (c)    Evidence of Action and Formation.    The Bank shall have received
the following:

        (i)    Certified copies of all action (in form and substance
satisfactory to the Bank) taken by the Board of Managers of the Borrower, to
authorize the execution, delivery and/or performance of this Agreement and all
other Loan Documents, the borrowings to be made hereunder, and the grant to the
Bank, pursuant to the Security Agreement, of a security interest in and lien
upon the Collateral and certifying that such actions have not been modified,
rescinded or amended, and continue in full force and effect, setting forth the
incumbency of the members of the Board of Managers of the Borrower who may sign
the Loan Documents, including therein a signature specimen of such members,
together with such other documents as the Bank shall reasonably require; and

        (ii)    True copies of the following:

        (A)    The Operating Agreement; and

        (B)    The Certificate of Conversion.

        (d)    Opinion of Counsel.    The Bank shall have received a favorable
written opinion of Counsel to the Borrower, dated not more than five (5) days
prior to the date of this Agreement, satisfactory in form and substance to the
Bank and Special Counsel and substantially in the form of Exhibit C attached
hereto.

        (e)    Daily Filing.    The Bank shall have received a copy of the
latest daily capital computation filing made by the Borrower with the NYSE.

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        Section 4.2.    Conditions to Each Loan.    

        The obligation of the Bank to make any Loan (including the initial Loan)
is subject to the fulfillment of the following conditions:

        (a)    Notice.    The Bank shall have received the notice of borrowing
specified in Section 2.2 hereof.

        (b)    Perfected Security Interest.    The Bank shall have received and
accepted an Annex I to Schedule A to the Security Agreement and shall have
received evidence reasonably satisfactory to the Bank and its counsel that
(i) DTC has, by book entry, indicated that the Collateral has been credited to
the Bank's account with DTC, (ii) the Bank has control (within the meaning of
the Uniform Commercial Code as then in effect in the State of New York) in
respect of all of the Collateral and (iii) the Bank has a perfected first
priority security interest in and lien upon all of the Collateral.

        (c)    Approval of Bank's Counsel.    All legal matters incident to such
Loan shall be satisfactory to counsel to the Bank.

        (d)    Borrowing Base; Concentration Base.    On the date of making of
such Loan and after giving effect thereto, (i) the aggregate outstanding
principal amount of all Specialist Loans shall not exceed the Specialist
Borrowing Base, (ii) the aggregate outstanding principal amount of all
Non-Specialist Loans shall not exceed the Non-Specialist Borrowing Base,
(iii) the aggregate outstanding principal amount of all Loans shall not exceed
the Borrowing Base, and (iv) the marked to market value of the Specialist
Securities and/or Non-Specialist Securities of any one issuer which comprise
part of the Collateral shall not exceed the Concentration Base.

        (e)    Purpose Statement.    The Bank shall have received a Federal
Reserve Form U-1, duly executed by the Borrower prior to making the first
Specialist Loan and prior to making each Non-Specialist Loan.

        (f)    Compliance Certificate.    (i) On the date of making of such Loan
and after giving effect thereto, (A) the Borrower shall have complied, and shall
then be in compliance, with all the terms, covenants and conditions of this
Agreement and the other Loan Documents which are binding upon it, (B) there
shall exist no Default or Event of Default, and (C) the representations and
warranties contained herein and in the other Loan Documents shall be true and
correct with the same effect as though such representations and warranties had
been made at the time of making of such Loan, and (ii) the Borrower shall have
delivered to the Bank a certificate substantially in the form of Exhibit D
attached hereto executed by the Borrower with respect to all of the foregoing.

ARTICLE 5.    COVENANTS

        Section 5.1.    Affirmative Covenants.    

        So long as the Borrower may borrow under this Agreement, and until
payment in full of the Note and all amounts payable hereunder and under all
other Loan Documents and performance of all other obligations of the Borrower
hereunder and under all other Loan Documents, the Borrower will, unless the Bank
shall otherwise consent in writing:

        (a)    Minimum Net Capital and Net Liquid Assets.    Maintain at all
times "net capital," as defined in Rule 15c3-1(c)(2) promulgated under the
Securities Exchange Act of 1934, as amended, and "net liquid assets," as defined
in Rule 104 of the rules of the Board of Directors of the NYSE, as amended, in
amounts at least equal to the amounts required by said Rules.

12

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        (b)    Financial Statements.    Furnish to the Bank the following:

        (i)    As soon as available but in no event more than ninety (90) days
after the close of each fiscal year of the Parent, the following financial
statements of the Parent, all in reasonable detail and in form satisfactory to
the Bank:

        (A)    a balance sheet as of the close of such fiscal year;

        (B)    a statement of income and retained earnings to the close of such
fiscal year;

        (C)    a statement of changes in capital accounts to the close of such
fiscal year;

        (D)    a statement of cash flows for such fiscal year; and

        (E)    a copy of the detailed reports, if any, submitted by the Parent's
independent certified public accountants in connection with such financial
statements.

Each of the foregoing financial statements (I) shall set forth in each case in
comparative form the corresponding figures for the respective date or period for
the preceding fiscal year, (II) shall be audited by a nationally recognized firm
of certified public accountants as shall be selected by the Parent as its
independent auditor, (III) shall be certified by such accountants without
qualification or limitation because of the restricted or limited nature of the
examination made by such accountants, and (IV) shall be prepared in accordance
with generally accepted accounting principles consistently applied.

        (ii)    As soon as available but in no event more than thirty (30) days
after the end of each fiscal quarter of each fiscal year of the Borrower, the
Borrower's FOCUS Report for such fiscal quarter, all in reasonable detail and
with the opinion thereon of the chief financial officer of the Borrower stating
that such FOCUS Report presents fairly, in accordance with generally accepted
accounting principles consistently applied, the financial condition and results
of operations of the Borrower as at the end of and for such fiscal quarter
(subject to yearend adjustments).

        (iii)    Not later than 10:30 A.M. (New York City time) on each day
after the date of making of the initial Loan, a copy of the daily capital
computation filing made by the Borrower with the NYSE on such day.

        (c)    Certificates.    Furnish to the Bank, concurrently with each
delivery of financial statements or reports under Section 5.1(c) hereof, a
certificate of the chief financial officer of the Borrower stating whether a
Default or an event of Default has occurred, and, if so, stating the facts with
respect thereto and whether the same has been cured prior to the date of such
certificate. In the event that the certificate furnished pursuant to this
Section 5.1(d) shall state that a Default or Event of Default has occurred and
is continuing, such certificate shall be accompanied by a statement executed by
the chief financial officer of the Borrower as to the action taken, being taken
and proposed to be taken with respect to such Default or Event of Default. In
addition, within thirty (30) days after the end of each fiscal quarter, furnish
to the Bank a certificate signed by the chief financial officer of the Borrower
attaching reasonably detailed calculations demonstrating compliance by the
Borrower with Section 5.1 (a) hereof.

        (d)    Notice of Default or Event of Default.    Furnish to the Bank
promptly after the occurrence of each Default or Event of Default which is
continuing, a written statement executed by the chief financial officer of the
Borrower setting forth the details of such Default or Event of Default and the
action which has been taken, is being taken and is proposed to be taken with
respect thereto.

        (e)    Notice of Litigation.    Notify the Bank as soon as possible and
in any event within ten (10) days after the commencement or threat of
commencement of, and all developments with respect to, any action, suit,
investigation or administrative proceeding against the Borrower or any

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of its properties which (i) either alone or together with any other such
action(s), suit(s), investigation(s) or administrative proceeding(s), if
adversely determined, could materially adversely affect the business, prospects,
operations, properties, assets or condition (financial or otherwise) of the
Borrower, (ii) questions the validity or enforceability of this Agreement, any
other Loan Document or any action to be taken in connection with the
transactions contemplated hereby and thereby, or (iii) seeks (or may reasonably
be expected) to rescind, terminate, revoke, cancel, withdraw, suspend, modify or
withhold any of the franchises, certificates, licenses, permits and other
authorizations referred to in Section 3.1(o) hereof. Each notice pursuant to
this Section 5.1(f) shall specify in detail the nature of the action, suit,
investigation or administrative proceeding and the damages or other relief
sought, and shall be accompanied by a copy of the summons, complaint or other
documentation served on the Borrower in connection with such action, suit,
investigation or administrative proceeding.

        (f)    Offices: Books and Records.    (i) Keep and maintain at its own
expense satisfactory and complete books of account and financial records,
(ii) permit officers of the Bank (A) to visit and inspect any of the offices of
the Borrower, (B) to examine its books, and (C) to discuss the affairs and
accounts of the Borrower with the Borrower's executive officers and other
employees, in each case at reasonable times, at reasonable intervals and upon
reasonable advance notice, and (iii) furnish to the Bank such other information
as it may reasonably request.

        (g)    Taxes.    Pay and discharge all taxes, assessments, governmental
charges and levies upon the Borrower as and when they become due and payable,
unless, and only to the extent that, such taxes, assessments, governmental
charges and levies shall be contested in good faith and shall have been reserved
against (as required by generally accepted accounting principles) by the
Borrower.

        (h)    Insurance.    Maintain insurance with responsible insurance
companies on such of its properties and assets in such amounts and against such
risks as is customarily maintained by similar businesses.

        (i)    Compliance With Laws.    Comply or cause compliance in all
material respects with all applicable laws, rules, regulations and ordinances
affecting the Borrower or any of its properties or assets.

        (j)    Licenses.    Obtain and maintain any and all licenses, permits,
franchises and other governmental authorizations (including, without limitation,
from the SEC and the NYSE) that are necessary in any material respect for the
ownership of its properties and assets and the conduct of its business and the
loss of possession of which would have a material adverse effect on the
business, prospects, operations, properties, assets or condition (financial or
otherwise) of the Borrower.

        (k)    Existence.    Maintain its existence as a New York limited
liability company, and qualify and remain qualified to do business in each
jurisdiction where the character of the properties owned or leased by it or the
transaction of its business makes such qualification necessary.

        (l)    Loss of Specialist Position.    Notify the Bank promptly (and in
any event within ten (10) days after the Borrower knows or should have known
thereof) if, for any reason whatsoever, the Borrower ceases to act as a
specialist (pursuant to the rules and regulations of the NYSE) with respect to a
security, which for the fiscal quarter immediately preceding such cessation,
constituted, by dollar volume, one of the top ten (10) securities allocated to
the Borrower by the NYSE.

        (m)    Organizational and Operative Documents of the Borrower.    Notify
the Bank promptly of any material modification, amendment or cancellation of the
Operating Agreement or Certificate of Conversion.

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        (n)    Additional and/or Substitute Collateral.    If, at any time, the
marked to market value of the Specialist Securities and/or Non-Specialist
Securities of any one issuer which comprise part of the Collateral exceeds the
Concentration Base, grant to the Bank, pursuant to the Security Agreement, a
security interest in and lien upon, in addition to and/or in substitution for
all or part of such Specialist Securities and/or Non-Specialist Securities,
Specialist Securities and/or Non-Specialist Securities which are not,
immediately prior to such grant, part of the Collateral such that, after giving
effect to such grant, the marked to market value of the Specialist Securities
and/or Non-Specialist Securities of any one issuer which comprise part of the
Collateral does not exceed the Concentration Base.

        (o)    Supplementary Documentation.    Promptly upon the request of the
Bank, execute and deliver or cause to be executed and delivered such further
instruments and do or cause to be done such further acts as may be necessary or
as may be reasonably requested by the Bank to carry out more effectively the
purposes of this Agreement and the other Loan Documents.

        Section 5.2.    Negative Covenants.    

        So long as the Borrower may borrow under this Agreement, and until
payment in full of the Note and all other amounts payable hereunder and under
all other Loan Documents and performance of all other obligations of the
Borrower hereunder and under all other Loan Documents, the Borrower will not,
unless the Bank shall otherwise consent in writing:

        (a)    Indebtedness.    Create, incur, assume or suffer to exist any
Indebtedness, except for (i) Indebtedness to the Bank pursuant to this Agreement
or any other Loan Document, (ii) Indebtedness secured by the liens specifically
permitted by clauses (iii) and (iv) of Section 5.2(b) hereof,
(iii) Indebtedness, the payment of which is subordinated to the Borrower's
Indebtedness to the Bank under this Agreement on terms approved by the NYSE,
(iv) additional Indebtedness not in excess of $5,000,000 in the aggregate, and
(v) accounts payable and other liabilities created in the ordinary course of
business, but not including any Indebtedness incurred in connection with the
borrowing of money or the acquisition of any asset (except as permitted under
clause (iv) of this Section 5.2(a)).

        (b)    Mortgages and Pledges.    Create, incur, assume or suffer to
exist any mortgage, pledge, lien, charge or other encumbrance of any kind
(including the charge on property purchased under conditional sales or other
title retention agreements) upon, or any security interest in, the Collateral or
any of the other properties or assets, whether now owned or hereafter acquired,
of the Borrower, except for (i) liens under the Security Agreement, (ii) liens
incidental to the conduct of the business of the Borrower or the ownership of
its properties or assets not incurred in connection with the borrowing of money
or the acquisition of any asset, and which in the aggregate do not materially
detract from the business, prospects, operations, properties, assets or
condition (financial or otherwise) of the Borrower, (iii) liens constituting
purchase money mortgages, so long as each such lien secures only the
Indebtedness incurred to purchase the property subject to such lien (provided
that the total amount of Indebtedness secured by all such liens shall not exceed
$250,000 outstanding at any one time), and (iv) liens in existence on
December 31, 2001 as set forth in the Financial Statements (provided that the
Indebtedness secured thereby shall not be extended, renewed or increased).

        (c)    Merger, Consolidation and Acquisition of Assets.    Enter into
any merger or consolidation with any Person (other than an Affiliate), or
acquire from such Person all or substantially all of the assets of, such
Person[, for aggregate consideration of more than $30,000,000.

        (d)    Sale of Interests in Borrower.    Sell, transfer, assign, convert
or otherwise dispose of, or permit any sale, transfer, assignment, conversion or
other disposition of, any membership interest in the Borrower conveying an
interest of more than 10% in the profits of the Borrower.

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        (e)    Contingent.    Except for: (a) the indorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (b) repurchase agreements pertaining to U.S. Government
securities entered into in the ordinary course of business with member banks of
the Federal Reserve System or primary dealers in such securities and (c) seat
lease guarantees by the Borrower in the ordinary course of business, (i) assume,
guarantee, indorse, sell with recourse, contingently agree to purchase,
discount, or otherwise become or remain liable with respect to any Indebtedness,
obligation or other liability of any Person, or (ii) enter into any agreement
for the purchase or other acquisition of any product, materials or supplies, or
for transportation or for the payment for services, if in any such case payment
therefor is to be made regardless of the non-delivery of the product, materials
or supplies or the non-furnishing of the transportation or services, if, after
giving effect to any of the transactions specified in clauses (i) and (ii) of
this Section 5.2(e), the aggregate liability of the Borrower for all
transactions specified in clauses (i) and (ii) of this Section 5.2(e) exceeds
$5,000,000 during the term of this Agreement.

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        (f)    Transactions with Affiliates.    Enter into any transactions
(including, without limitation, the purchase, sale or exchange or property or
the rendering of any service) with any Affiliate, except in the ordinary course
and pursuant to the reasonable requirements of its business and upon fair and
reasonable terms no less favorable to the Borrower as would obtain in any
arm's-length transaction with a Person not an Affiliate (other than (i) any
borrowings from the Parent, provided that such borrowings are reasonably
necessary for the conduct of the Borrower's business and are upon fair and
reasonable terms no less favorable to the Borrower as would be obtained by the
Borrower in any arm's-length transaction with a Person not an Affiliate, or
(ii) any merger or consolidation with, or any acquisition of all or
substantially all of the assets of, any Affiliate).

        (g)    Formation of Subsidiaries.    Form, acquire, or acquire an
interest in any Subsidiary.

ARTICLE 6.    EVENTS OF DEFAULT

        Section 6.1.    Events of Default.    

        If any one or more of the following events (each, an "Event of Default"
and, collectively, "Events of Default")shall occur:

        (a)    The principal amount due on a Loan is not paid on the Maturity
Date of such Loan (unless such Loan is rolled over pursuant to Section 2.8); or

        (b)    Any interest on a Loan, any facility fee, or any other amount
(other than the principal amount of a Loan) payable hereunder or under any other
Loan Document is not paid within five (5) days of the due date thereof; or

        (c)    Default is made in the due observance or performance of any term,
covenant or agreement contained in Section 2.8(a), 2.8(b), 2.8(c), 5.1(a),
5.1(n) or 5.2 of this Agreement; or

        (d)    Default is made in the due observance or performance of any other
term, covenant or agreement contained in this Agreement or any other Loan
Document, and such default continues unremedied for a period of thirty (30) days
after the Bank shall have notified the Borrower thereof; or

        (e)    Any representation, warranty or statement made herein, in any
other Loan Document, in any certificate delivered pursuant to Section 4.2(f)
hereof or in any financial statement, certificate, report or opinion delivered
pursuant hereto or thereto proves to have been incorrect in any material respect
when made; or

        (f)    The Borrower makes an assignment for the benefit of creditors,
admits in writing its inability to pay its debts as they become due, generally
fails to pay its debts as they become due, files a voluntary petition under the
Federal Bankruptcy Code (as now or hereafter in effect), is adjudicated bankrupt
or insolvent, files any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any present or future statute, law or regulation of any
jurisdiction, petitions or applies to any tribunal for any custodian, trustee,
receiver, liquidator or fiscal agent for all or a substantial part of its
properties or assets, or there is commenced against the Borrower any such case
or proceeding, or the Borrower files any answer admitting or not contesting the
material allegations of a petition filed against the Borrower in any such case
or proceeding, or the Borrower seeks, approves, consents to or acquiesces in any
such case or proceeding or in the appointment of any custodian, trustee,
receiver, liquidator or fiscal agent of the Borrower for all or a substantial
part of the property of the Borrower, or any of its members shall take any
action looking to the dissolution or liquidation of the Borrower; or

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        (g)    Any judgment against the Borrower, or any attachment, execution,
levy or restraining notice against its property, for any amount in excess of
$250,000 remains unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of thirty (30) days; or

        (h)    Any proceeds of any of the Loans are used for a purpose which is
not in accordance with the terms of this Agreement; or

        (i)    The Borrower fails to obtain, renew, maintain or comply with any
license, permit, franchise or other governmental authorization (including,
without limitation, from the SEC or the NYSE) necessary for the ownership by the
Borrower of any of its properties or assets or the conduct by the Borrower of
its business as a specialist on the NYSE and the AMEX, the loss of possession of
which could have a material adverse effect on the business, prospects,
operations, properties, assets or condition (financial or otherwise) of the
Borrower, or any such license, permit, franchise or other governmental
authorization is rescinded, terminated, revoked, cancelled, withdrawn,
suspended, modified or withheld or ceases to be in full force and effect; or

        (j)    Obligations of the Borrower (other than its obligations
hereunder) for the payment of borrowed money in an aggregate amount in excess of
$250,000 (i) become or are declared to be due and payable prior to the stated
maturity thereof or such maturity is accelerated, or (ii) is not paid when due
or within any grace period for the payment thereof; or

        (k)    There shall occur any default in the performance or observance of
any other term, condition or agreement contained in any obligation referred to
in Section 6.1(j) hereof or in any agreement relating thereto, or any other
event or condition shall occur, if the effect of such default, event or
condition is to cause, or permit the holder or holders of such obligation to
cause, such obligation to become due prior to its stated maturity; or

        (l)    The PBGC makes a determination that there has occurred an event
or condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Plan of
the Borrower; or

        (m)    Any of the Collateral is subjected to any security interest,
lien, charge or other encumbrance (other than pursuant to the Security Agreement
or as permitted by this Agreement or any other Loan Document) or to attachment,
levy or execution or to any other judicial process, which is not removed, stayed
or bonded within thirty (30) days of such an occurrence; or

        (n)    Any Person (other than the Bank) seeks to enforce any judgment,
lien, mortgage, pledge, hypothecation, security interest, charge or other
encumbrance or any right or interest in or to any of the Collateral, unless any
such exercise enforcement is contested in good faith and the Borrower shall have
set aside adequate reserves therefor to the extent required by generally
accepted accounting principles; or

        (o)    The Security Agreement shall for any reason, except to the extent
permitted thereby, cease to create, or the Bank (for any reason other than
termination or release by the Bank) shall cease to have, a valid, enforceable
and perfected first priority security interest in the Collateral or any portion
thereof;

then, upon the happening of any of the foregoing Events of Default which shall
be continuing, all obligations of the Bank to make further Loans shall terminate
and the Loans and the Note and all amounts payable pursuant to each Loan
Document shall become immediately due and payable upon written or fax
declaration to that effect given by the Bank to the Borrower; provided, however,
that upon the occurrence of any Event of Default specified in Section 6.l(f)
hereof, all obligations of the Bank to make further Loans shall automatically
terminate, and the Loans and the Note and all amounts payable pursuant to each
Loan Document shall automatically become immediately due and payable. The
Borrower expressly waives any presentment, demand, protest, notice of protest or
other

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notice of any kind. The Bank may proceed to enforce its rights, whether by suit
in equity or by action at law, whether for specific performance of any covenant
or agreement contained in this Agreement, the Note or any other Loan Document,
or in aid of the exercise of any power granted in this Agreement, the Note or
any other Loan Document, or proceed to obtain judgment or any other relief
whatsoever appropriate to the enforcement of its rights, or proceed to enforce
any other legal or equitable right which the Bank may have by reason of the
occurrence of any Event of Default.

ARTICLE 7.    OTHER PROVISIONS

        Section 7.1.    Release of Collateral.    

        If requested by the Borrower, the Bank shall, at the Borrower's expense,
release from the Bank's security interest and lien pursuant to the Security
Agreement such of the Collateral as the Borrower may request the Bank to so
release, provided that (a) the Borrower makes such request in writing to the
Bank not less than one (1) Business Day prior to the requested date of release,
specifying the requested date of release (which shall be a Business Day) and the
Collateral to be released, and (b) at the time of, and after giving effect to,
such release, (i) the aggregate outstanding principal amount of all Specialist
Loans shall not exceed the Specialist Borrowing Base, (ii) the aggregate
outstanding principal amount of all Non-Specialist Loans shall not exceed the
Non-Specialist Borrowing Base, (iii) the aggregate outstanding principal amount
of all Loans shall not exceed the Borrowing Base, and (iv) the marked to market
value of the Specialist Securities and/or Non-Specialist Securities of any one
issuer which comprise part of the Collateral shall not exceed the Concentration
Base.

        Section 7.2.    Expenses and Indemnification.    

        (a)    The Borrower agrees to pay (i) all out-of-pocket expenses of the
Bank (including reasonable fees and expenses of Special Counsel) incurred in
connection with the development, preparation and execution of the Loan Documents
and any amendments of or supplements thereto, and (ii) all expenses (including
reasonable fees and expenses of the Bank's counsel) incidental to the
enforcement of the rights of the Bank under any provisions of this Agreement,
the Note and the other Loan Documents.

        (b)    The Borrower shall indemnify and hold harmless the Bank and its
officers, directors, employees, affiliates, agents and controlling Persons
(each, an "Indemnified Party") from and against (i) all documentary, stamp and
other similar taxes, levies, imposts and other charges of any nature imposed by
any taxing authority by reason of the execution and delivery of this Agreement,
the Note or any other Loan Document, and (ii) any and all losses, claims,
damages and liabilities to which any such Indemnified Party may become subject
arising out of or in connection with any claim, litigation, investigation or
proceeding relating to this Agreement, the Note, any other Loan Document, the
credit facility (including the use and intended use of the proceeds thereof)
contemplated hereby, the performance by the Borrower of its obligations under
this Agreement, the Note or any other Loan Document, the consummation of the
transactions contemplated hereby and thereby, or any related transaction,
whether or not any Indemnified Party is a party thereto, and to reimburse each
Indemnified Party upon demand for all legal and other expenses incurred in
connection with investigating or defending any of the foregoing; provided,
however, that the foregoing indemnity will not, as to any Indemnified Party,
apply to losses, claims, damages, liabilities or related expenses to the extent
arising from the willful misconduct or gross negligence of such Indemnified
Party.

        (c)    The obligations of the Borrower under this Section 7.2 shall
survive termination of the Commitment, this Agreement and the other Loan
Documents and payment of the Note and all Loans.

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        Section 7.3.    Covenants to Survive.    

        All covenants, agreements, warranties and representations made herein,
in the Note, in all other Loan Documents and in all certificates or other
documents delivered in connection herewith or therewith shall survive the
advances of money made by the Bank to the Borrower hereunder and the delivery of
the Note.

        Section 7.4.    Binding Agreement.    

        All covenants, agreements, warranties and representations made herein,
in the Note, in all other Loan Documents and in all certificates or other
documents delivered in connection herewith or therewith shall be binding upon
and inure to the benefit of the Borrower and the Bank and their respective
successors and permitted assigns, whether or not so expressed, except that the
Borrower may not assign or transfer any of its rights or delegate any of its
duties under this Agreement or any other Loan Document without the prior written
consent of the Bank, and any attempted assignment, transfer or delegation
without such consent shall be null and void.

        Section 7.5.    Amendments and Waivers.    

        Neither this Agreement nor the Note nor any other Loan Document nor any
term, covenant or condition hereof or thereof may be changed, waived,
discharged, modified or terminated except by a writing executed by the parties
hereto or thereto.

        Section 7.6.    No Waiver.    

        No failure on the part of the Bank to exercise, and no delay in
exercising, any right, remedy or power hereunder or under any other Loan
Document shall preclude any other or future exercise thereof, or the exercise of
any other right, remedy or power.

        Section 7.7.    Notices.    

        Except as otherwise provided herein, all notices, requests, consents,
demands and other communications hereunder shall be in writing and shall be
mailed by first class registered or certified mail or delivered personally to
the respective parties to this Agreement as follows:

The Borrower:

LaBRANCHE & CO. LLC
One Exchange Plaza
New York, New York 10006
Attention: Harvey S. Traison

with a copy to

Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: Jeffrey M. Marks, Esq.

The Bank:

THE BANK OF NEW YORK
One Wall Street
New York, New York 10286
Attention: Kenneth W. Dean,
        Assistant Vice President

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All such notices, requests, consents, demands and other communications shall be
effective upon receipt (in the case of personal delivery) or, if mailed, 3
Business Days after the day of deposit in the mails, except that the notices to
the Bank under Article II hereof shall not be effective until received by the
Bank. The Bank may, without the necessity of independent investigation, rely on
any notice which the Bank believes to be genuine and to have been given or
signed by a Person authorized to do so.

        Section 7.8.    Section Headings.    

        Section and subsection headings have been inserted herein for
convenience of reference only and shall not be construed as part of this
Agreement.

        Section 7.9.    Severability.    

        Every provision of this Agreement and the other Loan Documents is
intended to be severable, and if any term or provision of this Agreement, any
other Loan Document, or any other document delivered in connection herewith or
therewith shall be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.

        Section 7.10.    Entire Agreement.    

        All Exhibits and Schedules to this Agreement shall be annexed hereto and
shall be deemed to be part of this Agreement. This Agreement and the Exhibits
and Schedules attached hereto embody the entire agreement and understanding
between the Borrower and the Bank and supersede all prior agreements and
understandings relating to the subject matter hereof.

        Section 7.11.    Consent to Jurisdiction; Service of Process, Waiver of
Trial by Jury.    

        (a)    The Borrower hereby (i) agrees that any suit, action or
proceeding with respect to this Agreement and/or any other Loan Document, or the
subject matter hereof or thereof, may be brought in the state courts of the
State of New York or in the United States District Court for the Southern
District of New York, in each case sitting in New York County, (ii) irrevocably
submits to the nonexclusive jurisdiction of the aforesaid courts with respect to
any such suit, action or proceeding, and (iii) waives, to the extent permitted
by applicable law, and agrees not to assert, in any such suit, action or
proceeding, by way of motion, as a defense or otherwise, any claim that (A) it
is not personally subject to the jurisdiction of the aforesaid courts,
(B) except as required by applicable law, its property is exempt or immune from
attachment or execution, (C) any such suit, action or proceeding brought in one
of the aforesaid courts is brought in an inconvenient forum, (D) the venue of
any such suit, action or proceeding brought in one of the aforesaid courts is
improper, or (E) this Agreement or any other Loan Document, or the subject
matter hereof or thereof, may not be enforced in or by any such court.

        (b)    The Borrower hereby irrevocably consents to the service of
process of any of the courts specified in Section 7.11(a) hereof in any suit,
action or proceeding with respect to this Agreement or any other Loan Document,
or the subject matter hereof or thereof, by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Borrower at its address
specified in Section 7.7 hereof.

        (c)    Nothing contained in this Section 7.11 shall affect the right of
the Bank to serve process in any other manner permitted by law, or to commence
proceedings or otherwise proceed against the Borrower in any other jurisdiction.

        (d)    THE BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY CONNECTED TO,
THIS AGREEMENT AND/OR ANY OTHER LOAN DOCUMENT OR THE SUBJECT MATTER HEREOF OR
THEREOF.

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        Section 7.12.    Governing Law.    

        This Agreement and the other Loan Documents are being delivered, and are
intended to be performed, in the State of New York and shall be construed and
enforceable in accordance with, and governed by, the laws of the State of New
York other than those relating to conflict of laws.

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.

    LABRANCHE & CO. LLC
 
 
By:
/s/  HARVEY S. TRAISON      

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Name:  Harvey S. Traison
Title:    Senior Vice President and Chief Financial Officer

    THE BANK OF NEW YORK
 
 
By:
/s/  KENNETH W. DEAN      

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Name:  Kenneth W. Dean
Title:    Assistant Vice President

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Exhibit 10.12

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AMENDED AND RESTATED CREDIT AGREEMENT