<PAGE>

                                                                    Exhibit 10.1

                         TRANSITION/SEPARATION AGREEMENT

      TRANSITION/SEPARATION AGREEMENT (THE "AGREEMENT") DATED AS OF AUGUST
    22, 2005 BY AND BETWEEN BKF CAPITAL GROUP, INC. ("BKF") AND JOHN A. LEVIN
                                    ("JAL").

            WHEREAS, JAL has heretofore been employed by BKF as Chief Executive
Officer;

            WHEREAS, BKF and JAL wish to document their agreement regarding
JAL's transition to resignation as Chief Executive Officer and as an employee of
BKF; JAL's ongoing consulting relationship with BKF, and JAL's ability to
establish a Successor Business (as defined in Section 4(a) below) all as set
forth more fully below.

            NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, BKF and JAL agree as follows:

            1. Transition/Position

            (a) JAL shall resign as Chief Executive Officer and from all
positions as an employee of BKF and its affiliates as of the earlier to occur of
(i) October 1, 2005 and (ii) BKF's retention of a successor or interim Chief
Executive Officer of BKF (the "Resignation Date"). Following JAL's resignation
as Chief Executive Officer and as an employee, JAL shall continue as a
non-employee consultant to BKF with the title of Chair Emeritus of BKF ("CE"), a
non-voting advisor to the Board of Directors of BKF (the "Board"), until the
earlier of (i) the termination of the Consulting Period (defined in Section 2(a)
below) and (ii) JAL's receipt of written notice from the Board requesting JAL's
resignation from such position.

            (b) If requested by BKF, JAL shall review and execute, as Chief
Executive Officer of BKF, the Form 10-Q required to be filed by BKF for the
fiscal quarter ended June 30, 2005 and shall cooperate with and assist BKF and
its accountants in preparing and filing such Form 10-Q.

            (c) JAL and BKF will cooperate in good faith towards reaching
agreement regarding public announcement of the execution of this Agreement and
JAL's resignation as Chief Executive Officer and as an employee and his
continued role as CE; and as a consultant to, and client of, BKF and his current
intention to remain active in financial services and pursue personal interests.

            (d) Until the Resignation Date, BKF shall continue to pay JAL his
base salary at the current rate of $935,430.72 per annum, subject to applicable
withholding taxes, and JAL shall continue to participate in all employee benefit
plans, programs and arrangements of BKF. JAL shall not be entitled to receive
any portion of the annual bonus otherwise payable to JAL in respect of the year
ending December 31, 2005.

                                       1

<PAGE>

            2. Consulting Arrangement

            (a) JAL will serve as a consultant to BKF for a period (the
"Consulting Period") commencing on the Resignation Date and ending on the
earliest to occur of (i) the third anniversary of the Resignation Date, (ii)
termination of the Consulting Period by JAL upon 30 days advance written notice
to BKF; provided that any termination pursuant to this clause (ii) may not occur
prior to April 1, 2006; and (iii) termination of the Consulting Period by BKF at
any time upon 30 days advance written notice to JAL.

            (b) During the Consulting Period, JAL will, from time to time, at
the request of the Board upon reasonable advance notice, provide advice to BKF
and use JAL's reasonable efforts to assist BKF in its efforts to retain and
attract accounts for the core and developing BKF strategies and, if requested by
BKF, assist BKF in identifying potential successor Chief Executive Officer
candidates and potential additional members of the Board, it being agreed that
JAL's consulting services shall be incidental to, and shall not materially
interfere with, JAL's other obligations, business activities or commitments. JAL
shall not be required to travel, except at his convenience, in performing
services to BKF during the Consulting Period.

            (c) During the Consulting Period, BKF shall pay JAL a consulting fee
at the rate of $30,000 per month (the "Consulting Fee"). JAL shall be entitled
to the full Consulting Fee regardless of the amount and frequency of consulting
services actually requested of him by BKF, subject to BKF's ability to terminate
the Consulting Period pursuant to Section 2(a). It is intended that the
Consulting Fee shall constitute revenues to JAL and, to the extent consistent
with applicable law, BKF will not withhold any amounts there from as federal
income tax withholding from wages or as employee contributions under the Federal
Insurance Contributions Act or any other state or federal laws.

            (d) During the Consulting Period, JAL shall not be an employee of
BKF and JAL shall only consult, and render advice and perform such tasks as JAL
reasonably determines in good faith are necessary to achieve the results
specified by BKF. During the Consulting Period, JAL will not direct the work of
any employee of BKF, or make any management decisions or undertake to commit BKF
to any course of action in relation to third persons.

            3. Restrictive Covenants

            (a) Following JAL's ceasing to be employed by BKF for any reason
(including, without limitation, any resignation by JAL on the Resignation Date),
JAL shall be permitted to engage in any business activities (a "New Business"),
including without limitation, engaging directly or indirectly (or providing
services as an employee, director or consultant to an entity that engages
directly or indirectly ) in business activities that are competitive with the
business of BKF or its affiliates and JAL and the New Business shall not be
restricted from soliciting or otherwise providing services to, or from receiving
services from, any clients, customers, employees or agents of BKF and its
affiliates; provided that:

            (i) JAL shall not be able to solicit or hire any employee of BKF
      prior to the date which is 36 months following the time JAL ceases to be
      an employee of BKF, except that (x) JAL shall be permitted at any time to
      solicit and hire those employees of BKF listed on Schedule A (provided
      that with respect to up to three employees on Schedule A to be identified
      on such Schedule with an asterisk, such employees may only be hired by JAL
      after the earlier of (A) BKF's hiring (as confirmed by BKF in writing) of
      a replacement for such employees and (B) January 1, 2006) and (y) JAL
      shall be permitted at any time to solicit and, on or following January 1,
      2007, to hire any employee of BKF identified on Schedule B; and

                                       2

<PAGE>


            (ii) JAL and the New Business shall only be permitted to solicit
      certain agreed upon clients (or classes of clients) (x) listed on Schedule
      C hereto or (y) that are otherwise mutually agreed upon from time to time
      by the Board of Directors and JAL that are deemed by JAL and BKF to be
      highly unlikely to remain with the firm in the event of JAL's departure
      (the clients in (x) and (y) being collectively referred to as, the "JAL
      Clients") which shall include, without limitation (a) individual accounts,
      (b) selected institutional accounts, and (c) participants in the Island
      Drive and 360 Fund strategies and BKF and JAL shall cooperate to effect an
      orderly transition of such JAL Clients to the Successor Business if such
      JAL Clients do not wish to remain with BKF. JAL may not solicit any other
      person that is a client of BKF at the time he ceases to be an employee of
      BKF, or any person that was a client of BKF in the 12 months period
      preceding the date on which JAL ceased to be an employee (a "BKF Client")
      for a period of 36 months following the time JAL ceases to be an employee
      of BKF; provided, however, that this restriction shall only prevent JAL
      from soliciting BKF Clients with respect to an investment strategy offered
      by the New Business that is similar to the particular long only large cap
      value strategies provided, or that had been provided, to the BKF Client by
      BKF (other than any strategies being offered to JAL Clients); provided
      further that JAL is permitted to accept new money from any BKF Clients
      regardless of investment strategy or product involved.

            (b) Nothing herein in this Section 3 shall prevent BKF from seeking
to retain either (i) the services of any employee who JAL is permitted to
solicit or hire, or (ii) the business of any client of BKF who JAL is permitted
to solicit. Furthermore, nothing herein shall preclude BKF from establishing or
utilizing any investment strategy which may be directly or indirectly
competitive with any strategy employed by the New Business.

            (c) BKF acknowledges and agrees that any employee of BKF listed on
Schedule B who remains in employment with BKF through December 31, 2006 shall be
entitled (unless he or she has entered into a written agreement with BKF which
provides otherwise) to receive his or her annual bonus incentive compensation to
which he or she would otherwise be entitled for 2006 had he or she remained in
employment to the date or dates following December 31, 2006 on which such annual
bonus incentive compensation becomes payable.

            (d) During the three-year period commencing upon the date that JAL
ceases to be an employee of BKF, if any employee of BKF or its affiliates
terminates employment and if, at the time of such termination, JAL is then still
subject to a restriction on soliciting or hiring such individual under this
Section 3, JAL may request that BKF waive the restriction on soliciting or
hiring such individual and BKF agrees to reasonably consider such request;
provided, however, that the determination whether to waive such restriction
shall remain within BKF's sole discretion. If any employee described in the
immediately preceding sentence terminated employment with BKF or its affiliates
at least six months prior to the date on which JAL first makes the request to
BKF to solicit or hire such employee, then BKF agrees that its determination
whether to waive such restriction will not be unreasonably withheld.

            4. Successor Business

            (a) In the event JAL engages in a New Business in which JAL
(together with his immediate family and/or entities controlled by any of them)
directly or indirectly has a greater than 50% voting or economic interest (a
"Successor Business"), then:

            (i) to the extent any such Successor Business derives revenues from
      JAL Clients who have transitioned pursuant to this Agreement to the
      Successor Business ("Carry-Over Clients"), BKF will be entitled to 15% the
      of the annual revenues collected by the Successor Business from such
      Carry-Over Clients which are generated based the Successor Businesses

                                       3

<PAGE>

      utilization of the same investment strategy used with respect to such
      Carry-Over Clients at BKF (the "Carry-Over Business Revenues") for the
      five-year period commencing with the first full calendar quarter following
      the date JAL ceased to be an employee of BKF (the "Revenue Sharing
      Period"). Such amount shall be paid on a quarterly basis following the
      Successor Businesses actual collection of revenue. For the avoidance of
      doubt, the Carry-Over Business Revenues will include revenues on
      additional money invested in the Successor Business by the Carry-Over
      Clients and/or increases in the value of the account of the Carry-Over
      Clients which are managed by the Successor Business, in each case, to the
      extent the revenues are generated based upon the Successor Businesses
      utilization of the same or similar investment strategy used with respect
      to such Carry-Over Clients at BKF but shall not include (A) revenues
      generated from Carry-Over Clients based upon any other investment strategy
      and (B) revenues generated from clients that are not Carry-Over Clients.

            (ii) If JAL and BKF mutually agree to transfer LEVCO Securities,
      Inc., BKF's registered broker-dealer, to the Successor Business, then BKF
      will also be entitled to 15% of the first $1,500,000 of Net Brokerage
      Commissions each year during the Revenue Sharing Period ("Brokerage
      Revenues"). For this purpose, "Net Brokerage Commissions" shall mean gross
      commissions less any applicable clearing firm charges incurred.

            (iii) The determination of annual revenues which are Carry-Over
      Business Revenues and those revenues which are not Carry-Over Business
      Revenues (and the amount of Brokerage Revenues, if applicable) shall be
      made by JAL (or his designee), in good faith, based upon calculations
      audited by a nationally recognized accounting firm. Any such determination
      may be reviewed by an independent accounting firm selected by BKF. In the
      event of a dispute, each such accounting firm shall jointly retain a third
      nationally recognized accounting firm (the cost of which shall be borne
      equally by JAL and BKF) and such third accounting firm's determination
      shall be binding and conclusive on the parties.

            (iv) BKF will provide the Successor Business with the documents, or
      access to documents, necessary for the Successor Business to utilize
      performance history generated at BKF by employees of the Successor
      Business who had been portfolio managers at BKF. JAL shall have access to
      research meetings and company visits at BKF. The foregoing provisions of
      this paragraph will be subject to any constraints imposed by applicable
      law or regulation.

            (b) JAL shall be permitted, as of the date hereof, to immediately
commence taking all reasonable steps necessary or desirable to establish a
Successor Business effective immediately including, without limitation, applying
for any necessary registrations, licenses or permits, offering employment to
non-BKF employees, and offering employment to BKF employees to the extent
permitted under Section 3 (Restrictive Covenants) above.

            (c) BKF and JAL shall each enter into identical standard and
customary confidentiality agreements relating to the information provided to the
other hereunder.

            5. Other BKF Employees

            Subject to the limitations imposed on JAL and the New Business by
Section 3 hereof, JAL shall be free, and encouraged by BKF, to resume
interactions with other BKF employees and to share information with such
employees regarding JAL's plans and the terms of this Agreement.

                                       4

<PAGE>

            6. Indemnification

            (a) BKF shall indemnify and hold harmless JAL and his legal
representatives to the fullest extent permitted by law from and against all
judgments, fines, penalties, excise taxes, amounts paid in settlement, losses,
expenses, costs, liabilities and legal fees (the "Losses") JAL may incur by
reason of entering into this Agreement and the performance of his duties
hereunder.

            (b) BKF shall also indemnify and hold harmless JAL and his legal
representatives to the fullest extent permitted by Section 145 of the Delaware
General Corporation Law, from and against all Losses if he is made, or
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, including any action by or in the right of BKF to procure a
judgment in its favor, by reason of the fact that JAL is or was a director or
officer of BKF or its affiliates or is or was serving in any capacity at the
request of BKF or its affiliates for any other entity.

            (c) The right to indemnification provided by this Section 6 shall
not be deemed exclusive of any other rights to which JAL may have or hereafter
be entitled under any law or the charter or by-laws of BKF or its affiliates,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue after JAL has ceased to be a
director or officer and shall insure to the benefit of the heirs, executors and
administrators of JAL. JAL shall be entitled to the protection of any insurance
policies BKF or its affiliates may elect to maintain generally for the benefit
of their respective directors and officers.

            7. Mutual Releases

            JAL and BKF shall enter into mutual general releases, substantially
in the form of Exhibits A and B hereto, respectively, releasing the other party
of all claims relating to matters occurring up to and including the signing of
the Agreement, other than claims to enforce the terms of the Agreement and JAL's
rights to benefits, if any, under BKF's employee benefit plans (in accordance
with their terms) (and a bring down general release as of the Resignation Date
for claims relating to matters occurring up to and including the Resignation
Date); provided that BKF's release of JAL shall not apply to any act or acts
which constituted (i) fraud resulting in a required restatement of BKF's
financial statements or other fraud having a material adverse effect of BKF,
(ii) a criminal act under applicable law or regulation involving the assets or
business of BKF or (iii) a willful breach of duty of loyalty owed to BKF or any
of it affiliates (or their respective shareholders), other than (x) any such
breach which the Board knows about (or should have known about) as of the date
of the signing of the applicable release or (y) the matters set forth in this
Agreement.

            8. JAL Stock

            With respect to unrestricted shares of BKF common stock currently
held by JAL, (i) 1/3 of such shares may be contributed by JAL to any foundation
or other entity controlled by him at any time (which shares may not be resold or
otherwise transferred by the foundation in any volitional transaction to any
third party prior to April 1, 2006) ; (ii) an additional 1/3 of such shares may
be sold or otherwise transferred by JAL at any time to any party, subject to
compliance with any applicable securities laws or other legal restrictions; and
(iii) 1/3 of such shares shall be held by JAL until the earlier of (x) 36 months
following the date of JAL's resignation as Chief Executive Officer of BKF and
(y) 10 days following the termination of the Consulting Period; provided,
however, that if a foundation described in clause (i) above sells or transfers
any shares of BKF common stock prior to April 1, 2006 in a non-volitional
transaction or otherwise, the number of shares that JAL may sell under clause
(ii) shall be reduced, share-for-share, by the number of shares so sold or
transferred by the foundation to the extent that JAL has not then already sold
or transferred all of the shares which he is otherwise permitted to sell under
clause (ii).

                                       5

<PAGE>

            9. Blind Trust

            (a) JAL to establish, for a one-year period, a blind trust account
with the BKF Long Only group of at least $5,000,000 (the "Blind Trust
Arrangement").

            (b) The aggregate fees payable by JAL to BKF and its affiliates in
respect of the Blind Trust Arrangement shall be 75 basis points.

            10. Legal Fees/Governing Law

            (a) Upon BKF's receipt of written invoices prepared by JAL's
counsel, BKF shall reimburse JAL for the fees and expenses of his counsel
reasonably incurred from and after June 23, 2005 in connection with the
negotiation and preparation of the Agreement, up to a maximum of $110,000. In
addition, BKF shall advance JAL on a monthly basis for legal fees and expenses
incurred in connection with any dispute under the Agreement, provided that JAL
must return such advance or any reimbursement received in the event that JAL
does not substantially prevail on a majority of the material claims that are the
subject of the legal proceeding, in which such dispute is adjudicated, as
determined by the court or arbitrator engaged in such proceeding.
Notwithstanding the preceding sentence, BKF will not advance or reimburse JAL
for any legal fees incurred by JAL in disputing whether BKF acted reasonably
under Section 3(d) hereof.

            (b) Any dispute, controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by final and binding
arbitration in accordance with the rules of the American Arbitration Association
before a panel of three independent and impartial arbitrators of whom each party
shall designate one and the third shall be chosen by the arbitrators selected by
the parties. In all other respects, the Commercial Arbitration Rules of the
American Arbitration Association shall govern the proceedings, which the
American Arbitration Association will administer. Judgment upon an award
rendered by the arbitrators may be entered in any court having jurisdiction
there over. The arbitration shall be held in New York, New York or in such other
place as the parties may agree.

            (c) This Agreement shall be governed by the laws of the State of New
York, without regard to conflicts of laws principles thereof.

            11. Levin Name

            Following JAL's cessation of employment with BKF for any reason, JAL
shall not be prohibited from using his name (or any derivations thereof) for any
purposes (except that for 1 year following JAL's resignation as Chief Executive
Officer (or such earlier period as BKF shall subsequently agree in writing) he
shall not use the name John A. Levin or John Levin in the name of the Successor
Business and BKF agrees to cease using the name "John A. Levin" or any similar
modification of the term "Levin" (e.g., "J.A. Levin" or "John Levin") within one
year following the cessation of employment.

            12. Office Space

            BKF shall provide JAL and the Successor Business with quality office
space suitable for the principal executive offices of the Successor Business, on
the same floor as, or contiguous by stairway to, the existing principal
investing operations of BKF, during the Consulting Period and during the
Consulting Period JAL will cover overhead/occupancy costs associated with JAL's
operation of the Successor Business equal to the actual costs incurred by BKF
for such space. In addition, JAL shall reimburse BKF for the actual cost
incurred by BKF for any office services provided to JAL at his request. JAL
acknowledges and agrees that the space in the northeast corner of the 18th floor
of BKF's officers at

                                       6
<PAGE>

One Rockefeller Plaza, New York, NY previously identified by BKF to JAL will
qualify as suitable space and that the estimated costs of such space will be in
accordance with Schedule D hereto.

            13. Entire Agreement/Amendments.

            This Agreement contains the entire understanding of the parties with
respect to the employment and termination of employment of JAL with BKF and its
affiliates. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.

            14. No Waiver.

            The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

            15. Severability.

            In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

            16. Assignment/Successors.

            This Agreement shall be assigned by BKF to any person or entity
which is or becomes a successor in interest to substantially all of the business
operations of BKF. Upon such assignment, the rights and obligations of BKF
hereunder shall become the rights and obligations of such successor person or
entity. This Agreement shall inure to the benefit of and be binding upon
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

            17. Notice.

            For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below in this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

            If to BKF:

            BKF Capital Group, Inc.
            One Rockefeller Plaza
            New York, NY 10020
            Attention:  General Counsel

            If to JAL:

            To the most recent address of Executive set forth in the personnel
records of BKF.

                                       7
<PAGE>

            18. Prior Agreements

            This Agreement supersedes all prior agreements and understandings
(including verbal agreements and draft term sheets and memorandum of
understanding) between JAL and the BKF and/or its affiliates regarding the terms
and conditions of JAL's employment, and termination of employment, with the BKF
and/or its affiliates including any understandings with respect to any New
Business or Successor Business.

Counterparts.

            This Agreement may be signed in counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.

                                       8

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.

BKF CAPITAL GROUP, INC.                        JOHN A. LEVIN

By: /s/ ANSON M. BEARD, JR.                    /s/ JOHN A. LEVIN
   ------------------------                    -----------------
        CHAIRMAN


                                       9

<PAGE>

                                    EXHIBIT A
                                  (JAL RELEASE)

            GENERAL REALEASE OF CLAIMS ("Release") dated as of August 22, 2005
by and between John A. Levin ("JAL") and BKF Capital Group, Inc. ("BKF").

            Reference is made to the Transition/Separation Agreement dated as of
August 22, 2005 between JAL and BKF (the "Agreement") to which this Release is
attached as Exhibit A.

            For and in consideration of the mutual covenants and agreements set
forth in the Agreement, JAL does hereby agree on behalf of JAL, JAL's agents,
assignees, successors, assigns, heirs and executors, to, and JAL does hereby,
fully and completely forever release BKF and its affiliates, predecessors and
successors and all of their respective past and/or present officers, directors,
partners, members, managing members, managers, employees, agents,
representatives, administrators and fiduciaries in their individual and/or
representative capacities (hereinafter collectively referred to as the "BKF
Releasees"), from any and all causes of action, suits, agreements, promises,
damages, disputes, controversies, contentions, differences, judgments, claims,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities,
covenants, contracts, variances, trespasses, extents, executions and demands of
any kind whatsoever, which JAL or JAL's heirs, executors, administrators,
successors and assigns ever had, now have or may have against the BKF Releasees
or any of them, in law, admiralty or equity, whether known or unknown to JAL,
for, upon, or by reason of, any matter, action, omission, course or thing
whatsoever occurring up to the date this Release is signed by JAL, including,
without limitation, in connection with or in relationship to JAL's employment or
other service relationship with BKF or its affiliates, the termination of any
such employment or service relationship; provided that such released claims
shall not include (i) any claims to enforce JAL's rights under, or with respect
to, the Agreement and (ii) JAL's rights to vested benefits, if any, under the
employee benefit plans of BKF and its affiliates (such released claims are
collectively referred to herein as the "Released Claims").

            (a) Notwithstanding the generality of clause (a) above, the Released
Claims include, without limitation, (i) any and all claims under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
the Civil Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and
any and all other federal, state or local laws, statutes, rules and regulations
pertaining to employment or otherwise, and (ii) any claims for wrongful
discharge, breach of contract, fraud, misrepresentation or any compensation
claims, or any other claims under any statute, rule or regulation or under the
common law, including compensatory damages, punitive damages, attorney's fees,
costs, expenses and all claims for any other type of damage or relief.

            (b) JAL represents that he has read carefully and fully understand
the terms of this Release, and that he has been advised to consult with an
attorney and has had the opportunity to consult with an attorney prior to
signing this Release. JAL acknowledges that JAL is executing this Release
voluntarily and knowingly and that JAL has not relied on any representations,
promises or agreements of any kind made to JAL in connection with JAL's decision
to accept the terms of this Release, other than those set forth in this Release
and the Agreement.

                                       10
<PAGE>

            This Release will be governed, construed and interpreted under the
laws of the State of New York, without regard to conflicts of laws principles
thereof.

            IN WITNESS WHEREOF, this Release has been duly executed as of the
date first above written:


/s/ JOHN A. LEVIN
-----------------
John A. Levin

                                       11
<PAGE>

                                    EXHIBIT B
                                  (BKF RELEASE)

            GENERAL REALEASE OF CLAIMS ("Release") dated as of August 22, 2005
by and between BKF Capital Group, Inc. ("BKF") and John A. Levin ("JAL").

            Reference is made to the Transition/Separation Agreement dated as of
August 22, 2005 between BKF and JAL (the "Agreement") to which this Release is
attached as Exhibit B.

            For and in consideration of the mutual covenants and agreements set
forth in the Agreement, BKF does hereby agree on behalf of BKF and its
affiliates, predecessors and successors and all of their respective past and/or
present officers, directors, partners, members, managing members, managers,
employees, agents, representatives, administrators, fiduciaries and assigns in
their individual and/or representative capacities (hereinafter collectively
referred to as the "BKF Releasors") to, and BKF does hereby, fully and
completely forever release JAL, JAL's family, estate, agents, successors and
assigns (the "JAL Releasees") from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialities, covenants, contracts, variances,
trespasses, extents, executions and demands of any kind whatsoever, which any of
the BKF Releasors ever had, now have or may have against the JAL Releasees in
law, admiralty or equity, whether known or unknown to BKF, for, upon, or by
reason of, any matter, action, omission, course or thing whatsoever occurring up
to the date this Release is signed by BKF, including, without limitation, in
connection with or in relationship to JAL's employment or other service
relationship with BKF or its affiliates, the termination of any such employment
or service relationship; provided that such released claims shall not include
(i) any claims to enforce BKF's rights under, or with respect to, the Agreement
and (ii) any claims with respect to any act or acts which constituted (A) fraud
resulting in a required restatement of BKF's financial statements or other fraud
having a material adverse effect on BKF, (B) a criminal act under applicable law
or regulation involving the assets or business of BKF or (iii) a willful breach
of duty or loyalty owed to BKF or any of its affiliates (or their respective
shareholders), other than (x) any such breach which the Board of Directors of
BKF knows about (or should have known about) as of the date of this Release or
(y) the matters set forth in the Agreement (such released claims are
collectively referred to herein as the "Released Claims").

            (a) Notwithstanding the generality of clause (a) above, the Released
Claims include, without limitation any claims for breach of contract, fraud,
misrepresentation or any compensation claims, or any other claims under any
statute, rule or regulation or under the common law, including compensatory
damages, punitive damages, attorney's fees, costs, expenses and all claims for
any other type of damage or relief.

            (b) BKF represents that BKF has read carefully and fully understand
the terms of this Release, and that he has been advised to consult with an
attorney and has had the opportunity to consult with an attorney prior to
signing this Release. BKF acknowledges that BKF is executing this Release
voluntarily and knowingly and that BKF has not relied on any representations,
promises or agreements of any kind made to BKF in connection with BKF's decision
to accept the terms of this Release, other than those set forth in this Release
and the Agreement.

            This Release will be governed, construed and interpreted under the
laws of the State of New York, without regard to conflicts of laws principles
thereof.

                                       12

<PAGE>

            IN WITNESS WHEREOF, this Release has been duly executed as of the
date first above written:

BKF CAPITAL GROUP, INC.


By: /s/ ANSON M. BEARD, JR.
   ------------------------
          CHAIRMAN

                                       13