SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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


                                    FORM 10-Q


                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                          Commission file number 1-10994

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


                  For the quarterly period ended June 30, 1997



                        PHOENIX DUFF & PHELPS CORPORATION









DELAWARE
                                                                 95-4191764
(State of Incorporation)                (I.R.S. EmployerIdentification No.)


56 Prospect St., Hartford, Connecticut 06115-0480        (860) 403-5000
(Address of principal executive offices)        (Registrant's telephone number)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No___


On July 31, 1997, the registrant had 44,090,261  shares of $.01 par value common
stock outstanding.


<PAGE>


               PHOENIX DUFF & PHELPS CORPORATION AND SUBSIDIARIES

                           Quarter Ended June 30, 1997

                                      Index


PART I   -   FINANCIAL INFORMATION:


   Item 1. Consolidated Financial Statements:

           Consolidated Condensed Statements of Financial Condition.    3
              June 30, 1997 and December 31, 1996

           Consolidated Statements of Income .......................    4
              Three Months Ended June 30, 1997 and
              Three Months Ended June 30, 1996

           Consolidated Statements of Income .......................    5
              Six Months Ended June 30, 1997 and
              Six Months Ended June 30, 1996

           Consolidated Condensed Statements of Cash Flows .........    6
              Six Months Ended June 30, 1997 and
              Six Months Ended June 30, 1996

           Notes to the Consolidated Financial Statements...........    7


   Item 2. Management's Discussion and Analysis of:

           Results of Operations and Financial Condition............   10

           Liquidity and Capital Resources..........................   13


PART II   -   OTHER INFORMATION:


   Item 4. Submission of Matters to a Vote of Security Holders......   14

   Item 6. Exhibits and Reports on Form 8-K.........................   15

   Signatures..........................................................16



<PAGE>







PART  I.     Financial Information
   Item 1.     Consolidated Financial Statements



<PAGE>






               Phoenix Duff & Phelps Corporation and Subsidiaries
            Consolidated Condensed Statements of Financial Condition
                                 (In thousands)
                                                         (Unaudited)
                                                          June 30,  December 31,
                                                             1997   1996
Assets
Current Assets
 Cash and cash equivalents                                 $  40,021   $22,466
 Marketable securities, at market                              4,174    4,070
 Accounts receivable                                          25,495   25,668
 Prepaid expenses and other current assets                     1,890     4,287
                                                           ---------  --------
     Total current assets                                     71,580   56,491

Deferred commissions                                                   17,749
Furniture, equipment and leasehold improvements, net           8,342    8,377
Goodwill and intangible assets, net                          224,243  226,754
Investment in Beutel, Goodman & Company Ltd.                  32,016   31,746
Long-term investments and other assets                        20,008    24,567
                                                           ---------  --------
     Total assets                                          $ 356,189  $365,684
                                                           =========  ========

Liabilities and Stockholders' Equity
Current Liabilities
 Accounts payable and accrued liabilities                  $  10,215  $ 13,306
 Income taxes payable                                          5,988
 Payables to related parties                                   2,647     3,874
 Broker-dealer payable                                         7,417     8,487
 Current portion of long-term debt                                       2,500
                                                           ---------  --------
     Total current liabilities                                26,267    28,167

Deferred taxes, net                                           31,147    33,860
Long-term debt, net of current portion                                  14,000
Lease obligations and other long-term liabilities              6,837     7,884
                                                           ---------  --------
     Total liabilities                                        64,251    83,911
                                                           ---------  --------

Contingent Liabilities

Series A Convertible Exchangeable Preferred Stock             78,822   78,504
                                                           ---------  -------

Stockholders' Equity
Common stock, $.01 par value, 100,000,000 shares authorized,
 44,287,831 and 44,037,416 shares issued, 44,087,831 and
 44,037,416 outstanding and 200,000 and zero held in treasury    443       440
Additional paid-in capital                                   188,532   185,415
Retained earnings                                             16,236    12,812
Net unrealized gain on securities available for sale           9,916     4,932
Foreign currency translation                                   (461)     (330)
Treasury stock                                               (1,550)
                                                           ----------  --------
   Total stockholders' equity                                213,116   203,269
                                                           ---------  --------
   Total liabilities and stockholders' equity              $ 356,189  $365,684
                                                           =========  ========



          The accompanying notes are an integral part of these statements.
               Phoenix Duff & Phelps Corporation and Subsidiaries
                        Consolidated Statements of Income
                                   (Unaudited)
                      (In thousands, except per share data)


                                                    Three months ended June 30,
                                                             1997      1996
Revenues
Investment management fees                                 $  26,839  $ 29,691
Mutual funds - ancillary fees                                  5,331    5,322
Financial consulting and investment research fees                        3,044
Other income and fees                                          1,005     1,070
                                                           ---------  --------
    Total revenues                                            33,175   39,127
                                                           ---------  -------

Operating Expenses
Employment expenses                                           15,557   15,911
Other operating expenses                                       8,552    9,989
Depreciation and amortization of
 leasehold improvements                                          606      574
Amortization of goodwill and intangible assets                 2,366    2,422
Amortization of deferred commissions                           1,134    1,192
                                                           ---------  -------
    Total operating expenses                                  28,215   30,088
                                                           ---------  -------

Operating Income                                               4,960    9,039
                                                           ---------  -------

Other Income (Expense) - Net                                     592      710
                                                           ---------  -------

Gain on Sale                                                  6,907

Interest Income (Expense) - Net
Interest expense                                               (209)     (435)
Interest income                                                  330       508
                                                           ---------  --------
    Total interest income (expense) - net                        121       73
                                                           ---------  -------

Income before income taxes                                    12,580     9,822
Provision for income taxes                                     5,253     3,230
                                                           ---------  --------

Net Income                                                     7,327    6,592
Series A preferred stock dividends                             1,189     1,173
                                                           ---------  --------
Income available to common stockholders                    $   6,138  $  5,419
                                                           =========  ========

Weighted average shares outstanding
  Primary                                                     44,364    44,263
  Fully diluted                                               54,342    54,125

Earnings per share
  Primary                                                  $     .14  $   .12
  Fully diluted                                            $     .13  $    .12








          The accompanying notes are an integral part of these statements.

               Phoenix Duff & Phelps Corporation and Subsidiaries
                        Consolidated Statements of Income
                                   (Unaudited)
                      (In thousands, except per share data)


                                                      Six months ended June 30,
                                                             1997     1996
Revenues
Investment management fees                                 $  55,683  $ 60,299
Mutual funds - ancillary fees                                 11,152   10,175
Financial consulting and investment research fees                        7,699
Other income and fees                                          2,226     2,139
                                                           ---------  --------
    Total revenues                                            69,061   80,312
                                                           ---------  -------

Operating Expenses
Employment expenses                                           30,754   32,188
Other operating expenses                                      17,052    20,013
Depreciation and amortization of
 leasehold improvements                                        1,247    1,084
Amortization of goodwill and intangible assets                 4,731     4,830
Amortization of deferred commissions                           2,836     2,624
                                                           ---------  --------
    Total operating expenses                                  56,620    60,739
                                                           ---------  --------

Operating Income                                              12,441    19,573
                                                           ---------  --------

Other Income (Expense) - Net                                   (571)     3,513
                                                           ---------  --------

Gain on Sale                                                   6,907

Interest Income (Expense) - Net
Interest expense                                               (449)     (910)
Interest income                                                  623       981
                                                           ---------  --------
    Total interest income (expense) - net                        174        71
                                                           ---------  --------

Income before income taxes                                    18,951    23,157
Provision for income taxes                                     7,865     9,452
                                                           ---------  --------

Net Income                                                    11,086    13,705
Series A preferred stock dividends                             2,374     2,345
                                                           ---------  --------
Income available to common stockholders                    $   8,712  $11,360
                                                           =========  =======

Weighted average shares outstanding
  Primary                                                     44,479    44,258
  Fully diluted                                               54,369    54,122

Earnings per share
  Primary                                                  $     .20  $    .26
  Fully diluted                                                       $    .25








          The accompanying notes are an integral part of these statements.
               Phoenix Duff & Phelps Corporation and Subsidiaries
                 Consolidated Condensed Statements of Cash Flows
                                   (Unaudited)
                                 (In thousands)

                                                      Six months ended June 30,

                                                         1997             1996

Cash flows from operating activities:
Net income                                               $ 11,086      $ 13,705
 Adjustments to reconcile net income to net cash
    provided by operating activities:
  Depreciation and amortization of leasehold improvements   1,247         1,084
  Amortization of goodwill and intangible assets            4,731         4,830
  Amortization of deferred commissions                      2,836         2,624
  Equity earnings of unconsolidated affiliates                354
  Payments of deferred commissions                         (4,279)       (6,303)
  Gain on sale of deferred commissions                     (6,907)
  Changes in other operating assets and liabilities        (1,715)       (8,918)
  Unrealized (appreciation) depreciation on mutual 
      fund investments                                        (12)           64
                                                          --------       ------
   Net cash provided by operating activities                7,341         7,086 
                                                        ---------        ------
Cash flows from investing activities:
Proceeds from the sale of deferred commissions             26,015
Proceeds from long-term investments                        11,246         1,120
Duff & Phelps Capital Markets transaction                                (2,970)
Purchase of partnership interest                           (2,220)
Other investing activities                                    443         (486)
Capital expenditures, net                                  (1,211)      (2,075)
                                                         ---------     --------
 Net cash provided by (used in) investing activities       34,273      ( 4,411)
                                                         ----------  ---------- 

Cash flows from financing activities:
(Repayment) borrowing of long-term debt, net             (16,500)        1,600
Dividends paid                                            (7,662)       (6,709)
Stock repurchase                                          (1,550)
Proceeds from issuance of stock                            1,653           666
                                                        ----------    ---------
Net cash used in financing activities                    (24,059)      (4,443)
                                                         ---------      -------

Net increase (decrease) in cash and cash equivalents       17,555       (1,768)
Cash and cash equivalents, beginning of period             22,466        16,306
                                                         --------       -------

Cash and cash equivalents, end of period                 $ 40,021       $14,538
                                                         ========      ========















          The accompanying notes are an integral part of these statements.


<PAGE>



              Phoenix Duff & Phelps Corporation and Subsidiaries

                Notes to the Consolidated Financial Statements
                                 (Unaudited)

1. Basis of Presentation

   The  unaudited  consolidated  financial  statements  of Phoenix Duff & Phelps
   Corporation  (PDP or the  Company)  included  herein  have been  prepared  in
   accordance  with the  instructions  to Form  10-Q  pursuant  to the rules and
   regulations of the Securities and Exchange  Commission.  Certain  information
   and footnote  disclosures  normally included in financial statements prepared
   in  accordance  with  generally  accepted  accounting  principles  have  been
   condensed  or omitted.  It is  suggested  that these  consolidated  financial
   statements be read in  conjunction  with the financial  statements  and notes
   included in PDP's Form 10-K for the year ended December 31, 1996.

2. Organization

   As described  more fully in Notes 1 and 3 to PDP's Annual Report for the year
   ended  December  31,  1996,  PDP was formed on November 1, 1995 when  Phoenix
   Securities Group Inc. (PSG), merged into Duff & Phelps Corporation (D&P) (the
   Merger). The transaction was accounted for as a purchase of D&P by PSG.

3. Dividends and Other Capital Transactions

   For the periods  ended June 30, 1997 and June 30,  1996,  earnings  per share
   were computed using weighted  average shares of common stock and common stock
   equivalents  outstanding.  Common stock  equivalents are based on outstanding
   stock options under nonqualified stock option plans.

   On August 7,  1997,  the  Company's  Board of  Directors  approved  quarterly
   dividends of $.06 per common  share and $.375 per  preferred  share,  payable
   September 10, 1997 to stockholders of record on August 29, 1997.

   As of June 30, 1997, the Company, in accordance with the previously
announced stock repurchase  program,  had purchased 200,000 shares of PDP common
stock at a total cost of $1.6 million.

4. Investment in Beutel, Goodman & Company Ltd.

   At June 30, 1997, PDP had a 49% interest in the  outstanding  common stock of
   Beutel,  Goodman &  Company  Ltd.  (BG).  BG is a  Canadian-based  investment
   counseling firm with  approximately $ 9.9 billion in assets under  management
   at June 30, 1997.

   PDP's   consolidated   condensed   statements  of  financial   condition  and
   consolidated  income statements  contain the following  components related to
   the BG investment:

                                                       June 30,     December 31,
                                                         1997            1996
                                                             (in thousands)
   Statements of Financial Condition:
   Acquisition costs of investment in BG's
     common stock and debentures                         $ 30,045      $30,045
   Equity in BG net income                                  6,232        4,021
   Dividends received                                     (1,383)        (285)
   Amortization of BG acquisition costs over
     proportional net equity in BG's assets               (2,096)      (1,476)
   Deferred tax on translation adjustments                  (321)        (229)
   Currency translation adjustments                         (461)        (330)
                                                         --------      -------

   Total BG investment                                   $ 32,016      $31,746
                                                         --------      -------

                                                         June 30,     June 30,
                                                         1997         1996
                                                             (in thousands)
   Statements of Income:
   Equity in BG net income, net of amortization          $  1,591      $ 1,105
   Interest income - BG debentures                                         298
                                                         --------      -------
                                                         $  1,591      $ 1,403
                                                         ========      =======

   The PDP  consolidated  condensed  statements of financial  condition  contain
   currency  translation  adjustments,  related  to the  investment  in BG, as a
   component  of  stockholders'   equity.  These  losses,   resulting  from  the
   translation   of  foreign   currency,   are  deferred  and   accumulated   in
   stockholders'  equity  until the  investment  in BG is sold or  substantially
   liquidated.

   The following reflects summarized BG financial information for the six months
   ended June 30,:

                                                             1997     1996
                                                             (in thousands)

   Total revenues                                        $ 15,400    $ 14,000
   Net income                                            $  2,000    $  3,300

5. Other Investments

   In the first quarter of 1997, D&P CBO Partners, L.P. (D&P CBO) and Windy City
   CBO Partners, L.P. (WCCBO) were liquidated. In accordance with the respective
   partnership  agreements,  the remaining assets of the partnerships were sold,
   obligations  were  settled  and all  remaining  cash was  distributed  to the
   partners.  PDP  received  cash  proceeds of zero and $11.2  million  from the
   liquidation  of  D&P  CBO  and  WCCBO,  respectively.  As  a  result  of  the
   liquidation  of the  partnerships,  PDP  recognized  losses  of zero and $1.5
   million,  respectively,  from D&P CBO and  WCCBO  representing  its  share of
   partnership losses up to the date of liquidation.

6. Capital Markets

   On May 14,  1996 the  Company  announced  that it was  exiting  the fee based
   investment research and financial consulting businesses. Substantially all of
   the fee based investment  research activities were immediately closed and, on
   July 1,  1996,  the  Company  completed  the sale of  certain  assets  of the
   financial   consulting   and   underwriting   businesses  to  several  former
   executives.  These  divestitures were contemplated at the time of the Merger.
   The financial  effects of these  divestitures  were treated as adjustments to
   the purchase price relating to the Merger.

7.   Sale of Deferred Commissions

   On June 26,  1997,  PDP sold its title and  interest  in the  balance  of its
   deferred  commissions to an unrelated  third party.  PDP recognized a gain of
   $6.9  million  based on cash  proceeds  of $26.0  million and a book value of
   $19.1 million at the time of the sale. As part of the transaction,  the third
   party is entitled to receive the  distributor  fees and  contingent  deferred
   sales charges related to the Company's outstanding "B" share mutual funds.

   PDP has a three year  commitment,  expiring June 26, 2000, from the unrelated
   third party to purchase all commissions incurred by the Company upon the sale
   of "B" share mutual funds.




8. Merger Related Activity

   On June 9,  1997,  PDP  signed  an  agreement  and  plan of  merger  ("Merger
   Agreement) with Pasadena Capital Corporation ("Pasadena"), the parent company
   to Roger Engemann & Associates,  Inc. The Merger Agreement values Pasadena at
   $180 million,  subject to adjustment based on the rate of annualized revenues
   at the time of  closing,  and  provides  for an  additional  payment  for net
   tangible  assets.  The Merger  Agreement  further provides for an "earn out",
   based on growth in revenues over the next five years,  of up to an additional
   $66 million.  Pasadena,  which operates in southern California,  manages over
   $5.5 billion in assets, primarily individual accounts but also including The
   Pasadena Funds, a family of six equity mutual funds with  approximately $877 
   million in assets under management.

   On June 18,  1997,  PDP signed a  definitive  agreement to acquire a majority
   interest in GMG/Seneca Capital Management LLC ("GMG/Seneca"), a San Francisco
   based  investment  advisor.  On July 17, 1997, the acquisition was completed.
   The  preliminary  purchase  price of $36.2 million was paid in cash and short
   term notes. Under the terms of the transaction, GMG/Seneca was renamed Seneca
   Capital Management  ("Seneca").  The remaining  interests will continue to be
   held by Seneca senior management. Seneca currently manages over $4 billion in
   assets, primarily institutional accounts.

   Phoenix  Duff  &  Phelps  will  finance  the  acquisitions  of  Pasadena  and
   GMG/Seneca in part through existing  resources and in part through borrowings
   under a new $200  million  bank credit  facility  for which it has received a
   commitment.  Borrowings under this facility will be unsecured, mature in five
   years and bear  interest  at  variable  rates.  The  financing  is subject to
   execution of a definitive credit agreement.

9. Recent Accounting Pronouncements

   In February 1997, the Financial  Accounting  Standards Board issued Statement
   of Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings Per Share".
   This  statement  simplifies  the standards  for computing  earnings per share
   ("EPS").  Basic EPS will replace  primary EPS.  Basic EPS will be computed by
   dividing  income  available to common  shareholders  by the weighted  average
   number of common  shares  outstanding  for the  period.  Diluted  EPS will be
   computed similarly to the present fully diluted EPS. Dual presentation of the
   basic  and  fully  diluted  EPS will be  required  on the face of the  income
   statement. A reconciliation of the numerator and denominator of the basic EPS
   computation to the numerator and  denominator of the diluted EPS  computation
   will also be required. SFAS No. 128 is effective for financial statements
   issued for periods  ending after December  15,1997.  Restatement of all
   prior period EPS data will be required. Had EPS calculations for the 
   Company been computed for the three and six  months  ended  June 30, 1997 
   using the SFAS No. 128 methodology, basic EPS would have been $.14 and
   $.20 per share, respectively, and diluted EPS would have been $.13 and
   $.20 per share,  respectively.  EPS calculations for the same periods in
   1996 using the SFAS No. 128 methodology would not have been materially
   different from the reported amounts.

<PAGE>


Item 2.     Management's Discussion and Analysis of Results of Operations and
Financial Condition

Results of Operations

Assets Under Management

At June 30,  1997,  Phoenix  Duff & Phelps  had $34.4  billion  of assets  under
management, an increase of $1.4 billion from March 31, 1997, and $300 million
from June 30, 1996. Since the revenues of the Company are substantially
earned based upon assets under  management this information is important to
an understanding of the business.
                                     (In Millions)

                          June 30,     March 31,   December 31,  June 30,
                            1997         1997          1996        1996

Open-end Mutual funds     $ 11,969    $  11,227    $  11,532     $11,664
Closed-end Mutual funds      3,015        2,878        2,984       2,949
Institutional               12,367       12,020       12,276      12,860
PHL General Account          7,046        6,845        6,857       6,595
                          --------    ---------    ---------     -------
                          $ 34,397    $  32,970    $  33,649     $34,068
                          ========    =========    =========     =======

Three Months Ended June 30, 1997 Compared with Three Months Ended June 30,
1996

Investment  management fees of $26.8 million for the three months ended June 30,
1997  decreased  $2.9  million  (10%) as compared to $29.7  million for the same
period in 1996.  Management fees earned from  institutional  accounts  decreased
$1.7 million due to the loss of certain institutional accounts.  Management fees
earned from  open-end and  institutional  mutual funds  decreased  $871,000 as a
result of a net reduction in accounts partially offset by positive  performance.
Fees  earned  managing  Phoenix  Home  Life  Mutual  Insurance  Company's  (PHL)
sponsored  variable products  decreased  $323,000 as a result of a change in the
fee structure (which also affected fund accounting fees) offset,  in part, by an
increase  in  assets  under  management.  Fees  earned  managing  WRAP  accounts
increased $176,000 as a result of increased accounts and positive performance.

Mutual funds - ancillary fees were relatively  unchanged at $5.3 million for the
three  months  ended June 30,  1997 and 1996.  Fund  accounting  fees  increased
$761,000  primarily as a result of a change in the fee structures for the retail
mutual funds and PHL sponsored variable products. Net distributor fees decreased
$66,000 due to a decrease in distributor fees of $490,000,  primarily due to the
sale of B share deferred  commissions  and the related  distributor  fees (which
totaled $614,000 for the month of June 1997),  offset, in part, by a decrease in
trailing commissions expense of $424,000. Underwriter fees decreased $274,000 as
a result of the closure of Capital Markets in 1996 and lower mutual funds sales,
offset, in part, by underwriter fees received from  certain  PHL  sponsored
variable products.  Shareholder  service agent fees decreased as a result of
fewer mutual fund shareholder accounts.

Financial consulting and investment research services were not offered by PDP in
1997 as the  operations of Duff & Phelps  Capital  Markets Co. and the fee-based
investment  research  and  securities   businesses  were  divested  and  closed,
respectively, in 1996.

Other  income and fees  decreased  $65,000  (6%) to $1.0  million  for the three
months  ended  June 30,  1997 as  compared  to the same  period in 1996,  due to
reduced  contingent  deferred  sales  charges  resulting  from  the  sale of the
Company's deferred commissions.

Employment  expenses  of $15.6  million  decreased  $354,000  (2%) for the three
months  ended June 30, 1997 as compared to $15.9  million for the same period in
1996.  This decrease was due to a $3.5 million reduction in employment expense
resulting from the divestiture of Duff & Phelps Capital Markets Co. In addition,
in the second quarter of 1997, the Company  incurred  approximately  $350,000 in
fees  for  placement  services  associated  with  hiring  additional  investment
professionals.  The remaining increase was primarily the result of annual salary
adjustments, incentives and increases in the workforce. Other operating expenses
decreased $1.4 million (14%) to $8.6 million for the three months ended June 30,
1997  from  $10.0  million  for the  same  period  in 1996.  Operating  expenses
decreased  primarily as a result of the July 1996  divestiture  of Duff & Phelps
Capital  Markets Co. In  addition,  in the second  quarter of 1997,  the Company
recognized  a one-time  loss of  $638,000  relating  to the  sublease of certain
office space.

Amortization of deferred commissions decreased $58,000 (5%) for the three months
ended June 30, 1997  compared to the same period in 1996 as a result of the sale
of deferred  commissions in June 1997 which eliminated the amortization  charge.
This  decrease  was  offset,  in part,  by an  increase  in both the  sales  and
redemptions  of B shares  prior to the sale of the  deferred  commissions  which
increased amortization.  Amortization of goodwill and intangible assets remained
relatively unchanged.

Operating  income  decreased  $4.1 million  (45%) to $5.0 million for the second
quarter of 1997, as compared to the same period in 1996, as a result of the
changes discussed above.

Other  income  (expense)  - net of  $592,000  for  the  second  quarter  of 1997
decreased $118,000 (17%) as compared to $710,000 in the corresponding  period in
1996.  The  Company's  share of the equity  earnings of its  investment in BG of
$819,000 increased $535,000 for the three months ended June 30, 1997 as compared
to $284,000  for the same period in 1996.  PDP's share of equity  earnings  from
WCCBO was $300,000 for the second quarter of 1996 compared to zero in the second
quarter of 1997 due to the liquidation of WCCBO in early 1997. In addition,  PDP
recorded $240,000 in losses in the second quarter of 1997 from its investment in
Greystone  Financial  Group  representing  its share of equity  earnings  in the
company.  No income or loss was recognized from the Greystone  investment in the
second quarter of 1996.

A gain  on sale of the  Company's  deferred  commissions assets of  $6.9
million  was recognized in the second  quarter of 1997.  The sale, which was
to an unrelated third party, resulted in proceeds of $26.0 million.
Additionally, the purchaser will fund future B share  commissions  and be
entitled to distributor  fees from the Company's outstanding B share mutual
funds as well as any contingent deferred sales charges.

Interest  income - net  increased  $48,000 as a result of a decrease in interest
expense,  primarily  as a result of a decrease  in  outstanding  debt from $25.1
million at June 30, 1996 to zero at June 30, 1997, offset, in part, by a
decrease in interest incomeas there was no income in 1997 from the BG
debentures which were fully redeemed in December 1996.

The effective tax rate for the second quarter  increased from 33% in 1996 to 42%
in 1997. The lower rate in 1996 was the result of a change in  Connecticut tax
law,  enacted in May of 1996 and recognized by PDP at that time but  retroactive
to January 1996, which modified the method of apportioning income for investment
advisors.

As a result of the effects discussed above, net income for the second quarter of
1997 of $7.3 million  represents an increase of $735,000  (11%)  compared to the
$6.6 million for the second quarter of 1996.

Six Months Ended June 30, 1997 Compared with Six Months Ended June 30, 1996

Investment  management  fees of $55.7  million for the six months ended June 30,
1997  decreased  $4.6  million  (8%) as compared  to $60.3  million for the same
period in 1996.  Management  fees from  institutional  accounts  decreased  $2.6
million as a result of the loss of certain institutional  clients.  Fees earned
managing  the  open-end  mutual  funds  decreased  $749,000  as a result of lost
accounts  partially  offset  by  positive   performance.   Management  fees  for
institutional  mutual funds,  which were pooled separate accounts for two months
of 1996,  decreased  $529,000 as a result of lost accounts and lower fees earned
on  institutional  mutual funds as compared to pooled  separate  accounts.  Fees
earned managing PHL sponsored  variable products  decreased $580,000 as a result
of a change in the fee structure  (which also affected  fund  accounting  fees),
which decreased  investment  management fees, offset, in part, by an increase in
assets under  management.  Fees earned from  managing  WRAP  accounts  increased
$295,000 as a result of increased accounts and positive performance. Fees earned
from Windy City, which ceased operations in early 1997, decreased $198,000.

Mutual funds - ancillary  fees increased $1.0 million (10%) to $11.2 million for
the six months  ended June 30, 1997 as  compared  to $10.2  million for the same
period in 1996.  Fund  accounting  fees  increased  $1.2 million  primarily as a
result of a change in the fee  structures  for the retail  mutual  funds and PHL
sponsored  variable  products.  Net distributor fees increased $692,000 from the
prior year.  Distributor fees decreased  $172,000 primarily due to the sale of B
share  deferred  commissions  and the related  distributor  fees (which  totaled
$614,000 for the month of June 1997) offset,  in part,  by increased  sales of B
share mutual funds. The decrease in distributor fees was offset by a decrease of
$864,000 in trailing  commission  expense.  Underwriter fees decreased  $411,000
(30%) as a result of the closure of Capital  Markets in 1996 and decreased sales
of mutual funds,  offset by underwriter fees received from certain PHL sponsored
variable products. Shareholder service agent fees decreased as a result of fewer
shareholder accounts.

Financial consulting and investment research services were not offered by PDP in
1997 as the  operations of Duff & Phelps  Capital  Markets Co. and the fee-based
investment  research  and  securities   businesses  were  divested  and  closed,
respectively, in 1996.

Other income and fees increased  $87,000 (4%) to $2.2 million for the six months
ended June 30,  1997 as  compared  to the same  period in 1996,  primarily  as a
result of  increased  B share  redemptions  offset by the sale of the  Company's
deferred commissions and the associated contingent deferred sales charges.

Employment  expenses  decreased  $1.4 million (4%) to $30.8  million for the six
months  ended June 30, 1997 as compared to $32.2  million for the same period in
1996. Employment expense decreased $7.0 million due to the divestiture of Duff &
Phelps  Capital  Markets Co. This decrease was offset by  non-recurring  charges
resulting from a senior executive exercising certain rights under his employment
agreement  which  resulted in an additional  $1.6 million of employment  expense
being recognized in the first quarter of 1997. In addition, in 1997, the Company
incurred  approximately  $700,000 in fees for placement services associated with
hiring additional investment professionals. The remaining increase was primarily
the  result  of annual  salary  adjustments,  incentives  and  increases  in the
workforce.

Other operating  expenses  decreased $3.0 million (15%) to $17.0 million for the
six months  ended June 30, 1997 from $20.0  million for the same period in 1996.
Operating expenses decreased  primarily as a result of the July 1996 divestiture
of Duff & Phelps  Capital  Markets Co. In addition,  a one-time loss of $638,000
was recognized in the second quarter of 1997 relating to the sublease of certain
office space.

Amortization of deferred commissions  increased $212,000 (8%) for the six months
ended  June 30,  1997  compared  to the same  period  in 1996 as a result  of an
increase in both the sales and  redemptions  of B shares offset by the Company's
sale of its  deferred  commissions  asset  in June  1997  which  eliminated  the
amortization  charge.  Depreciation and  amortization of leasehold  improvements
increased  $163,000 (15%) for the six months ended June 30, 1997 compared to the
same period in 1996 as a result of increased capital  expenditures in late 1996.
Amortization of goodwill and intangible  assets decreased  $100,000 (2%) for the
six months ended June 30, 1997 compared to the same period in 1996.

Operating income decreased $7.1 million (36%) to $12.4 million for the first six
months of 1997,  as  compared  to the same  period  in 1996,  as a result of the
changes discussed above.

Other  income  (expense)  - net of  ($571,000)  for the first six months of 1997
decreased  $4.1 million (116%) as compared to $3.5 million in the same period in
1996.  PDP's  share of equity  earnings  from WCCBO was ($1.5)  million  for the
period  from  January 1, 1997  until  operations  were  terminated  in March,  a
decrease of $2.3  million  from the  $841,000  earned in the first six months of
1996.  The  Company's  share of the Duff &  Phelps/Inverness  LLC joint  venture
income was $1.5  million  for the six months  ended June 30, 1996 as a result of
the joint  venture's  recognition  of an advisory fee from a  significant  first
quarter 1996  transaction  compared to no equity earnings in 1997. The Company's
share of the equity  earnings of its investment in BG of $1.6 million  increased
$486,000  for the six months ended June 30, 1997 as compared to $1.1 million for
the same period in 1996.  The  Company's  share of the equity  earnings from its
investment  in  DPIM/Nuveen  was $324,000  for the first six months of 1996.  On
January 1, 1997,  the  Company  purchased  the  remaining  interest in the joint
venture and  consolidated  the  operations  in 1997.  In addition,  PDP recorded
$480,000 in losses for the six months ended June 30, 1997 from its investment in
Greystone  Financial  Group  representing  its share of equity  earnings  in the
company with no earnings or losses recorded for the same period in 1996.

A gain on the  sale of  Company's  deferred  commissions  asset of  $6.9 
million  was recognized in the second  quarter of 1997.  The sale,  which was
to an unrelated third party,  resulted in proceeds of $26 million.  As part
of the  transaction, the  purchaser  will fund future  B  share  commissions 
and  be  entitled  to distributor  fees from the  Company's outstanding 
B share mutual funds as well as any contingent deferred sales charges.

Interest  income - net increased  $103,000 as a result of a decrease in interest
expense,  primarily  as a result of a decrease  in  outstanding  debt from $25.1
million at June 30, 1996 to zero at June 30, 1997,  offset, in part, by a
decrease in  interest income resulting  from there being no income in 1997
from the BG debentures which were redeemed in December 1996.

The effective tax rate increased to 41.5% from 41% in 1996.

As a result of the effects  discussed above, net income for the first six months
of 1997 of $11.1 million represents a decrease of $2.6 million (19%) compared to
the $13.7 million for the first six months of 1996.

Liquidity and Capital  Resources

The  Company's  business  is not  considered  to be capital  intensive.  Working
capital  requirements  for  the  Company  have  historically  been  provided  by
operating  cash flow. It is expected that such cash flows will continue to serve
as the principal  source of working capital for the Company for the near future.
As a result of the sale of the deferred commissions on B share mutual funds, the
Company  will no longer need to fund such  commissions  for at least three years
allowing for additional operating capital.

The Company's current capital structure  includes 3.2 million shares of Series A
Preferred  Stock with a stated value of $25.00 per share and 44.1 million shares
of common stock.  Dividends on the preferred  stock would total $4.8 million per
annum  based on  preferred  shares  outstanding  at June 30,  1997.  The current
dividend  rate on common  stock is $.06 per share per  quarter.  If the dividend
rate  remains  constant  for 1997,  the total  dividend on common stock would be
approximately $10.6 million based upon shares outstanding at June 30, 1997.

The Company has a bank credit  agreement  in place  providing  for a $20 million
three year revolving  credit  facility.  The  outstanding  obligation  under the
credit  agreement at June 30, 1997 was zero.  Interest rates on such  borrowings
averaged 6.35% for the second  quarter of 1997. The credit agreement contains
financial and operating covenants  including,  among  other  provisions,
requirements  that the Company maintain  certain financial  ratios  and
satisfy  certain financial tests, restrictions on the ability to incur
indebtedness, and limitations on the amount of the  Company's  capital
expenditures.  At June 30, 1997,  the Company was in compliance  with all
covenants  contained in the credit  agreement.  The Company believes  that
funds from  operations  and  amounts  available  under the credit
agreement will provide adequate liquidity for the foreseeable future.

Management considers the liquidity of the Company to be adequate to meet present
and anticipated needs.

It is expected  that  Phoenix  Duff & Phelps will  finance the  acquisitions  of
Pasadena and GMG/Seneca in part through  existing  resources and in part through
borrowings  under a new $200  million  bank  credit  facility  for  which it has
received a commitment.  Borrowings  under this facility will be unsecured,  will
mature in five years and will bear  interest at a variable  rate.  The Company's
majority shareholder, Phoenix Home Life Mutual Insurance Company, will guarantee
the  obligation.  The  financing is subject to execution of a definitive  credit
agreement.


<PAGE>


PART II.       Other Information
    Item 4.   Submission of Matters to a Vote of Security Holders

     (a) The Annual Meeting of  Stockholders  of the registrant was held May 13,
         1997 for the election of directors  and approval of  amendments  to the
         registrant's 1992 Long-term Stock Incentive Plan to increase the number
         of  shares  of the  registrant's  common  stock  available  for  awards
         thereunder from 6.4 million to 9.7 million shares.

     (b) The following  persons were re-elected  Directors of the registrant and
         each continued to hold office after the meeting.

           John T. Anderson               Philip R. McLoughlin
           Richard H. Booth               James M. Oates
           Glen D. Churchill                     Calvin J. Pedersen
           Robert W. Fiondella                         David R. Pepin
           Michael E. Haylon                     Donna F. Tuttle
           Marilyn E. LaMarche                         Ferdinand Verdonck
           Edward P. Lyons                David A. Williams


     (c) Two matters were voted upon:

         The results of the election of directors are as follows:

         Candidate:            For:      Against/Withheld Abstain/Nonvote:

                 John T.                    659,888             0
Anderson                   41,735,974
                 Richard                    659,888             0
H. Booth                   41,735,974
                 Glen D.                    659,888             0
Churchill                  41,735,974
                 Robert                     659,888             0
W. Fiondella               41,735,974
                 Michael                    659,888             0
E. Haylon                  41,735,974
                 Marilyn                    659,888             0
E. LaMarche                41,735,974
                 Edward                     659,888             0
P. Lyons                   41,735,974
                 Philip                     659,888             0
R. McLoughlin              41,735,974
                 James                      659,888             0
M. Oates                   41,735,974
                 Calvin                     661,775             0
J. Pedersen                41,734,087
                 David                      659,888             0
R. Pepin                   41,735,974
                 Donna                      659,888             0
F. Tuttle                  41,735,974
                                            659,888             0
Ferdinand Verdonck         41,735,974
                 David                      659,888             0
A. Williams                41,735,974


          The results of the proposal to increase the number of shares of the
      registrant's common stock
          available for awards under its 1992 Long-term Stock Incentive Plan
      from 6.4 million to 9.7
          million shares are as follows:

            For:              34,561,432
            Against:            4,792,317
            Abstain:            3,042,113

          On the basis of the vote, the increase was approved.

<PAGE>


item 6. Exhibits and Reports on Form 8-K

(a)     The following documents are filed as part of these reports:

1.      Exhibits          

        10(nn)       Second Amended and Restated Operating Agreement between
                     Seneca Capital Management LLC and the Registrant.

        10(oo)       Form of Put/Call Agreement

(b)     Reports on Form 8-K

        A Current Report on Form 8-K was filed on July 1, 1997 describing the 
        agreements to acquire Pasadena Capital Corporation and a majority
        interest in GMG/Seneca Capital Management LLC.


 

                                    Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                    Phoenix Duff & Phelps Corporation




August 13, 1997                      /s/ Philip R.
McLoughlin
                       Philip R. McLoughlin, Chairman and
                                     Chief Executive Officer


August 13, 1997                      /s/ William R.
Moyer
                    William R. Moyer, Chief Financial Officer






<PAGE>

10(nn)



                                  EXHIBIT C-1




                         SENECA CAPITAL MANAGEMENT LLC
                    a California limited liability company


                          SECOND AMENDED AND RESTATED
                              OPERATING AGREEMENT







                             Dated  July 17, 1997









<PAGE>



                       




                                     (iii)




                                      (i)

                               TABLE OF CONTENTS


                                                                          Page

ARTICLE I - DEFINED TERMS....................................................2

ARTICLE II - ORGANIZATION AND POWERS........................................12
      2.01  Organization....................................................12
      2.02  Purposes and Powers.............................................12
      2.03  Principal Place of Business.....................................13
      2.04  Qualification in Other Jurisdictions............................14

ARTICLE III - SHARES; MEMBERS...............................................14
      3.01  Shares..........................................................14
      3.02  Issuance of Shares; Admission of Members........................15
      3.03  Representations of Members......................................16
      3.04  Limitation of Liability of Members..............................16
      3.05  Records; Rights to Information; Reports.........................17
      3.06  Waiver of Dissenters' Rights....................................18

ARTICLE IV - MANAGEMENT; OFFICERS...........................................18
      4.01  Management under Authority of the Members.......................18
      4.02  Power of the Members; Voting....................................18
      4.03  Special Membership Approval.....................................19
      4.04  Membership Approval.............................................20
      4.05  Meetings of Members.............................................21
      4.06  Action Without a Meeting........................................21
      4.07  Delegation of Authority to Officers.............................21
      4.08  Coordination of the Officers and PDP............................23
      4.09  Removal of Seneca as President; Name of the Company.............23
      4.10  Salaries of Officers............................................24
      4.11  Management Bonus Pool...........................................24
      4.12  Equity Bonus Payments...........................................25
      4.13  Acceleration of Vesting of Class A Shares.......................27
      4.14  Key Person Insurance............................................28
      4.15  Reliance by Third Parties.......................................29
      4.16  No Employment...................................................29

ARTICLE V - INDEMNIFICATION.................................................29
      5.01  Right to Indemnification........................................29
      5.02  Notice; Defense of Claims.......................................29
      5.03  Award of Indemnification........................................30
      5.04  Successful Defense..............................................31
      5.05  Advance Payments................................................31
      5.06  Insurance.......................................................31
      5.07  Employee Benefit Plan...........................................31
      5.08  Heirs and Personal Representatives..............................31
      5.09  Non-Exclusivity.................................................31
      5.10  Amendment.......................................................32
      5.11  Acknowledgment of Indemnification Assumption....................32

ARTICLE VI - CONFLICTS OF INTEREST..........................................32
      6.01  Transactions with Interested Persons............................32
      6.02  Conflicts.......................................................32

ARTICLE VII - CAPITAL CONTRIBUTIONS;  ACCOUNTS ANDALLOCATIONS;  DISTRIBUTIONS;
TAX MATTERS.................................................................33
      7.01  Capital Contributions...........................................33
      7.02  General Capital Accounts........................................33
      7.03  Equity Bonus Accounts...........................................35
      7.04  General Allocations.............................................36
      7.05  Tax Allocations.................................................38
      7.06  Distributions...................................................38
      7.07  Distributions Upon Dissolution; Establishment of Reserve
            Upon Dissolution................................................39
      7.08  Tax Withholding.................................................39
      7.09  No Deficit Restoration by Members...............................39
      7.10  Tax Matters Partner.............................................40
      7.11  Aggregate Payments..............................................40
      7.12  Special Allocations.............................................41
      7.13  Curative Allocations............................................43
      7.14  Loss Limitation.................................................43

ARTICLE VIII - TRANSFER OF SHARES BY MEMBERS................................44
      8.01  Restrictions on Transfers.......................................44
      8.02  Substitute Members..............................................45
      8.03  Allocation of Distributions Between Assignor and Assignee.......45
      8.04  Additional Requirements.........................................45

ARTICLE IX - WITHDRAWAL AND TERMINATION.....................................46
      9.01  Withdrawal.  ...................................................46
      9.02  Termination of Employment.......................................46

      9.03  Repurchase of Shares............................................47
      9.04  Acknowledgment  of  Limitations  on Withdrawal  and  Forfeiture of
Shares      49

ARTICLE X - DISSOLUTION AND LIQUIDATION.....................................49
      10.01 No Dissolution..................................................49
      10.02 Events Causing Dissolution......................................49
      10.03 Notice of Dissolution...........................................50
      10.04 Liquidation.....................................................50
      10.05 Certificate of Cancellation.....................................50

ARTICLE XI - GENERAL PROVISIONS.............................................50
      11.01 Offset..........................................................50
      11.02 Notices.........................................................50
      11.03 Entire Agreement................................................51
      11.04 Limitation of Litigation; Consent to Jurisdiction...............51
      11.05 Amendment or Modification.......................................51
      11.06 Binding Effect..................................................52
      11.07 Governing Law; Severability.....................................52
      11.08 Further Assurances..............................................52
      11.09 Waiver of Certain Rights........................................52
      11.10 Failure to Pursue Remedies......................................52
      11.11 Cumulative Remedies.............................................52
      11.12 Notice to Members of Provisions of this Agreement...............52
      11.13 Interpretation..................................................52
      11.14 Counterparts....................................................53

SCHEDULE A - SHARE SCHEDULE.................................................56

SCHEDULE B - OTHER OFFICERS.................................................59



<PAGE>








                                      12

                                                                          Page






                         SENECA CAPITAL MANAGEMENT LLC

                Second Amended and Restated Operating Agreement


      This Second  Amended and Restated  Operating  Agreement is made as of July
17, 1997 (the  "Effective  Date") by and among  Seneca  Capital  Management  LLC
(formerly  known as GMG/Seneca  Capital  Management  LLC) (the  "Company"),  the
Phoenix Members,  the Management Members and those Persons who become Members of
the Company in accordance with the provisions hereof.

      WHEREAS,  Seneca and Stapleton have heretofore  formed a limited liability
company  under the  Beverly-Killea  Limited  Liability  Company Act,  California
Corporation  Code Section  17000,  et seq.  (as amended  from time to time,  the
"Act"), by filing Articles of Organization of the Company with the office of the
Secretary of State of the State of California on December 29, 1995;

      WHEREAS,  Seneca and  Stapleton  have  heretofore  entered  into a written
Operating Agreement,  dated as of March 5, 1996, which agreement was amended and
restated in  connection  with the  admission  of certain  additional  Persons as
members of the Company pursuant to the Amended and Restated Operating  Agreement
of GMG/Seneca  Capital  Management  LLC by and among  Seneca,  Stapleton and the
other  Persons  set  forth  as a  party  thereto  (collectively,  the  "Founding
Members"), effective as of July 1, 1996 (the "Original Agreement");

      WHEREAS,  the Phoenix  Members  have agreed to acquire,  and the  Founding
Members have agreed to sell, a majority of the outstanding  membership interests
of the Company held by such Founding Members;

      WHEREAS,  effective upon such purchase by Phoenix of membership  interests
in the Company,  certain of the Founding  Members shall  withdraw as Members and
Seneca shall  withdraw as Manager (as defined in the Original  Agreement) of the
Company,  and the Phoenix  Members and the  Management  Members shall remain and
continue  or be added as  Members  of the  Company,  to which  continuation  and
addition such Manager has heretofore consented; and

      WHEREAS, the Phoenix Members and the Management Members desire to continue
the Company without  dissolution  thereof as a limited liability company managed
by the Members in accordance  with the Act and to amend and restate the Original
Agreement  in its  entirety in order to set out fully their  respective  rights,
obligations and duties regarding the Company and its assets and liabilities.

      NOW,  THEREFORE,  in  consideration  of the agreements and obligations set
forth  herein and for other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the Members and the Company hereby
agree as follows:




<PAGE>



                                       DEFINED TERMSD TERMS


             Unless the context  otherwise  requires,  the terms defined in this
Article I shall,  for the purposes of this  Agreement,  have the meanings herein
specified  (each such meaning to be equally  applicable to both the singular and
plural forms of the respective terms so defined).

             "Act" shall have the meaning set forth in the preamble hereof.

             "Additional Purchase Price Paid" shall mean the Additional Purchase
Price (as defined in Section 2.3(a) of the Purchase Agreement), if any, when and
to the extent  paid by PDP, in the amount  calculated  pursuant to clause (i) of
its definition, without regard to the interest payments in clause (ii) thereof.

             "ADV  Disclosure  Event"  shall mean any event  directly  involving
Seneca as a result of which  the  Company  is  required  to give an  affirmative
response to any matter listed under Item 11 of the Company's  Form ADV in effect
from time to time (including any successor item or form thereto).

             "Affiliate"  shall mean,  with respect to a specified  Person,  (i)
with respect to an  individual,  the spouse,  sibling or linear  descendant of a
Person and (ii) with respect to any Person other than an individual,  any Person
that  directly or  indirectly  controls,  is  controlled  by or is under  common
control  with,  the  specified  Person.  As used in this  definition,  the  term
"control" means the possession,  directly or indirectly,  of the power to direct
or cause the  direction  of the  management  and  policies of a Person,  whether
through ownership of voting securities, by contract or otherwise.

             "Agreement"  shall mean this Second Amended and Restated  Operating
Agreement, as amended, modified, supplemented or restated from time to time.

             "Articles of Organization"  shall mean the Articles of Organization
and any and all amendments  thereto and restatements  thereof filed on behalf of
the Company with the Secretary of State of the State of  California  pursuant to
the Act.

             "Bankruptcy" shall mean, with respect to a Person,  that either (i)
an  involuntary  petition  under any  bankruptcy  or  insolvency or other debtor
relief law or under the reorganization provisions of any such law has been filed
with  respect to such Person or a receiver of or for the property of such Person
has been appointed  without the  acquiescence of such Person,  which petition or
appointment  remains  undischarged or unstayed for an aggregate period of thirty
(30) days (whether or not  consecutive)  or (ii) a voluntary  petition under any
bankruptcy or insolvency or other debtor relief law or under the  reorganization
provisions of any such law has been filed by such Person, a voluntary assignment
of such Person's  property for the benefit of creditors has been made, a written
admission  by such Person of its  inability  to pay its debts as they mature has
been made, a receiver of or for the  property of such Person has been  appointed
with the  acquiescence of such Person or such Person has done any similar act of
like import.

             "Book  Event"  shall  mean  any of the  following  events:  (i) any
Transfer of Shares, (ii) any reissuance or issuance of Class A Shares, (iii) any
cancellation  of any Shares,  (iv) any forfeiture of Shares  pursuant to Section
9.02 hereof, (v) any repurchase of Shares pursuant to Section 9.03 hereof,  (vi)
any admission of a New Member to the Company,  (vii) any  withdrawal of a Member
from the  Company,  (viii) any  Extraordinary  Event or (ix) the last day of any
Fiscal Year of the Company.

             "Capital  Contribution"  shall  mean,  as to  each  Member  of  the
Company,  the  aggregate  amount  of cash and the net Fair  Market  Value of any
property  contributed  to the  capital of the Company  pursuant to Section  7.01
hereof by such Member (or any previous  holder of the General Capital Account of
such Member).

             "Capital Expenditure" means a payment for the purpose of acquiring,
constructing  or maintaining  fixed assets,  real property or equipment that, in
accordance with generally accepted accounting principles,  would be added to the
fixed asset account of the Company.

             "Cause"  shall,  with respect to the  termination of any Management
Member as an employee of the Company,  have the meaning ascribed thereto in such
Management  Member's  employment  agreement with the Company effective as of the
Effective  Date,  and any  amendments  thereto,  or similar  agreement  with any
additional  Management  Member or, in the event that such Management Member does
not have an employment  agreement  with the Company,  "Cause"  shall mean,  with
respect  to the  termination  of any  Management  Member as an  employee  of the
Company:

            ...... (i)  the  Management  Member has been  convicted by a court
of competent  jurisdiction  of, or has pleaded  guilty or nolo  contendere to,
any  felony or  misdemeanor  involving  an  investment  or  investment-related
business;

            ...... (ii) the Management  Member has committed any act of fraud,
embezzlement,  bribery,  forgery,  counterfeiting,   extortion  or  breach  of
fiduciary duty against the Company or any Affiliate;

            ...... (iii) the Securities and Exchange Commission or other federal
or state regulatory  agency or the National  Association of Securities  Dealers,
Inc.  has  entered an order  denying,  suspending  or  revoking  the  Management
Member's   registration  or  license,   prevented  the  Management  Member  from
associating  with an  investment-related  business or otherwise  disciplined the
Management Member by restricting her or his activities; or

            ...... (iv) the Management Member has failed to comply substantially
with written  instructions  from the President or the Company in accordance with
Section 4.07(b) of this Agreement,  which  instructions are under the Management
Member's  individual  control and shall reference the possibility of termination
for "Cause."

             "Change  in  Control  of the  Phoenix  Members"  shall mean (i) any
transaction  involving  the Transfer of assets or interests of a Phoenix  Member
that  would  result in an  "assignment"  within the  meaning  of the  Investment
Company Act or the  Investment  Advisers Act of any agreement  pursuant to which
the  Company  provides  Investment  Management  Services  or (ii) any  tender or
exchange  offer,  merger,   reorganization,   consolidation  or  other  business
combination,  sale of assets or contested  election,  or any  combination of the
foregoing transactions involving any Phoenix Member in connection with which the
persons who were directors of such Phoenix Member before such transaction  cease
to  constitute a majority of the Board of  Directors of such Phoenix  Member (or
successor entity).

             "Class A Shares" shall mean, as of any date, the Class A Shares (or
fraction  thereof)  authorized  by the Company  pursuant  hereto,  entitling the
holders  thereof to the  relative  rights,  title and  interests in the capital,
profits, losses, deductions and credits of the Company at any particular time as
are set  forth in this  Agreement,  and any and all  other  benefits  to which a
holder thereof may be entitled as provided in this Agreement,  together with the
obligations of such a holder to comply with all the terms and provisions of this
Agreement.  The number of Class A Shares  (or  fractions  thereof)  held by each
Member is set  forth on the  Share  Schedule,  as  amended  from time to time in
accordance  with the terms  hereof  and as in effect on such  date.  The Class A
Shares issued to and held by the  Management  Members as of the  Effective  Date
represent  certain  of the  membership  interests  in the  Company  held  by the
Management  Members  immediately prior to the adoption of this Agreement,  which
membership  interests  were  heretofore  referred to  pursuant  to the  Original
Agreement as either Class A-E Member  Interests,  Class A-P Member  Interests or
Class B Member Interests.

             "Class B Shares" shall mean, as of any date, the Class B Shares (or
fraction  thereof)  authorized  by the Company  pursuant  hereto,  entitling the
holders  thereof to the  relative  rights,  title and  interests in the capital,
profits, losses, deductions and credits of the Company at any particular time as
are set  forth in this  Agreement,  and any and all  other  benefits  to which a
holder thereof may be entitled as provided in this Agreement,  together with the
obligations of such a holder to comply with all the terms and provisions of this
Agreement.  The number of Class B Shares  (or  fractions  thereof)  held by each
Member is set  forth on the  Share  Schedule,  as  amended  from time to time in
accordance  with the terms  hereof  and as in effect on such  date.  The Class B
Shares  issued  to and held by the  Phoenix  Members  as of the  Effective  Date
represent  all of the  membership  interests  in the Company  purchased  by such
Members from certain of the Founding  Members as of the  Effective  Date,  which
membership  interests  were  heretofore  referred to  pursuant  to the  Original
Agreement as either Class A-E Member  Interests,  Class A-P Member  Interests or
Class B Member Interests.

             "Code"  shall mean the Internal  Revenue  Code of 1986,  as amended
from time to time, or any  corresponding  federal tax statute  enacted after the
date of this Agreement. A reference to a specific section of the Code refers not
only to such  specific  section but also to any  corresponding  provision of any
federal tax statute enacted after the date of this  Agreement,  as such specific
section or  corresponding  provision is in effect on the date of  application of
the provisions of this Agreement containing such reference.

             "Company"  shall  have the  meaning  set  forth  in the  preamble
hereof.

             "Disability" shall, with respect to any Management Member, have the
meaning ascribed thereto in such Management Member's  employment  agreement with
the Company effective as of the Effective Date, and any amendments  thereto,  or
similar  agreement with any additional  Management  Member or, in the event that
such Management  Member does not have an employment  agreement with the Company,
"Disability" shall mean the inability of Management Member by reason of sickness
or  accident,   substantially   to  perform  all  of  the  material  duties  and
responsibilities  of Management Member's  employment,  which inability continues
without  interruption for at least six (6) months, or which inability  continues
for an  aggregate  period of nine (9) months in any  eighteen  (18)  consecutive
months.

             "Distributable  Cash" shall have the meaning set forth in Section
7.06(a) hereof.

             "Effective  Date"  shall  have  the  meaning  set  forth  in  the
preamble hereof.

             "Equity Bonus  Account" shall have the meaning set forth in Section
7.03 hereof.

             "Equity Bonus Payment" shall mean, with respect to any Member as of
any date,  the amount  equal to the  product  of (i) the  number of  Outstanding
Equity  Bonus  Shares held by such Member as of such date and (ii) the  quotient
obtained by dividing (A) the Total Equity Bonus  Payments as of such date by (B)
the aggregate  number of Outstanding  Equity Bonus Shares held by all Members of
the Company as of such date.

             "Equity  Bonus  Percentage"  shall mean,  as of any date, an amount
equal to the product of (A)  seventeen  and thirty five  one-hundredths  percent
(17.35%),  multiplied by (B) a fraction, the numerator of which is the number of
Outstanding  Equity Bonus Shares as of such date and the denominator of which is
the number of Outstanding Equity Bonus Shares as of the Effective Date.

             "Equity Bonus Shares" shall mean, as of any date,  the Equity Bonus
Shares (or fraction thereof)  authorized by the Company pursuant hereto,  issued
to those  Persons  entitled to Equity Bonus  Payments (as adjusted  from time to
time),  which  Shares are subject to  forfeiture  in  accordance  with the terms
hereof.  The number of Equity Bonus Shares (or  fractions  thereof) held by each
Member is set  forth on the  Share  Schedule,  as  amended  from time to time in
accordance with the terms hereof and as in effect on such date.

             "Exercise  of the  Put/Call"  shall mean any exercise by PDP of any
call option or any exercise by any Management Member of any put option under and
in accordance with such Management Member's Put/Call Agreement.

             "Extraordinary  Event"  shall mean (i) any sale,  exchange or other
disposition  of all or  substantially  all of the  assets  and  business  of the
Company to any third party or parties;  (ii) the merger or  consolidation of the
Company with any other entity or the Transfer of equity interests in the Company
to any third party or parties, where in either case (x) there is a change in the
President  of the Company or of the  successor in interest to the Company or (y)
those successor equity owners who own in excess of 50% of the Outstanding  Class
A Shares and Class B Shares of the  Company  (on a combined  basis)  immediately
after such event did not own in excess of 50% of the Outstanding  Class A Shares
and  Class B Shares of the  Company  (on a  combined  basis)  immediately  prior
thereto;  or (iii) the  complete  or partial  liquidation  of the Company or the
filing of a  Certificate  of  Dissolution  of the Company with the  Secretary of
State of the State of California.

             "Fair Market  Value" shall mean the fair market value as reasonably
determined by Special Membership Approval.

             "Fiscal Year" shall mean,  unless  otherwise  changed in accordance
with the terms hereof,  (i) any twelve (12) month period commencing on January 1
and ending on December 31 or (ii) any portion of the period  described in clause
(i) of this  sentence  for which the Company is  required  to allocate  profits,
losses and other items of Company income,  gain,  loss or deduction  pursuant to
Sections 7.04, 7.05, 7.12, 7.13 or 7.14 hereof.

             "Founding  Members"  shall  have  the  meaning  set  forth in the
preamble hereof.

             "General  Capital  Account"  shall  have the  meaning  set forth in
Section 7.02 hereof.

             "Good  Reason"  shall,  with  respect  to  the  termination  of any
Management  Member as an employee  of the  Company,  have the  meaning  ascribed
thereto  in such  Management  Member's  employment  agreement  with the  Company
effective as of the  Effective  Date,  and any  amendments  thereto,  or similar
agreement with any additional Management Member or, in the event such Management
Member does not have an  employment  agreement  with the Company,  "Good Reason"
shall mean,  with  respect to the  termination  of any  Management  Member as an
employee of the Company:

            ......  (i)  PDP  has  committed  a  material  breach  of any of the
covenants, terms or provisions of such Member's Put/Call Agreement, which breach
has not been  remedied  within  thirty  (30) days after  delivery  to PDP by the
Management Member of written notice of the facts constituting the breach,  which
notice shall reference the possibility of termination for "Good Reason";

            ......  (ii) a reduction in the Management  Member's fixed salary or
any  failure  to  pay  the  Management   Member  any  compensation  or  benefits
(including,  without limitation,  Equity Bonus Payments and the Management Bonus
Pool) to which she or he is entitled within thirty (30) days of the due date;

            ...... (iii)      the Company's  requiring the  Management  Member
to be based at any place other than the area within a one hundred  mile radius
of San Francisco,  CA, except for reasonably required travel for the Company's
business;

            ...... (iv) the failure by the Company to continue the  Management
Member's  participation in any material compensation or employee benefit plans
established by the Company from time to time.

             "Indemnified  Parties"  shall  mean the  Members  and  each  Person
serving  as an  Officer  or  employee  or  Liquidating  Trustee  of the  Company
(including  Persons who serve at the Company's  request as directors,  managers,
members,  partners,   officers,   employees,   agents  or  trustees  of  another
organization  in which the Company has any  interest as a  shareholder,  member,
creditor or otherwise) and their  respective  successors  and assigns,  and such
Affiliates  of any of the foregoing and such agents of the Company who may, from
time to time, be determined to be included as Indemnified  Parties by Membership
Approval.

             "Initial   Enterprise   Value"   shall  mean  as  of  the  date  of
calculation,  (a) the sum of (i)  Thirty  Six  Million  Nine  Hundred  Forty Six
Thousand Dollars  ($36,946,000.00)  and (ii) any Additional Purchase Price Paid,
divided by (b) the Phoenix Percentage.

             "Investment Advisers Act" shall mean the Investment Advisers Act of
1940, as amended from time to time, together with any successor statute, and the
rules and regulations promulgated thereunder.

             "Investment  Company Act" shall mean the Investment  Company Act of
1940, as amended from time to time, together with any successor statute, and the
rules and regulations promulgated thereunder.

             "Investment  Management Fees" shall mean investment management fees
of the Company, the Partnership and any successor entity or entities, calculated
pursuant  to the  accrual  method of  accounting,  including  but not limited to
standard  performance fees and any subadvisory fees, but excluding any incentive
fees received from GMG/Little  Partners,  L.P.,  GMG/Little  (Bermuda) Partners,
L.P. and South Ferry Building Company, L.P.

             "Investment  Management  Services"  shall mean any  services  which
involve (i) the management for compensation of an investment account or fund (or
portions thereof or a group of investment accounts or funds); (ii) the giving of
advice for compensation,  with respect to the investment and/or  reinvestment of
assets  or funds  (or any group of  assets  or  funds);  and (iii) any  business
related to, or useful in connection with, the foregoing.

             "Issuance  Items"  shall  have the  meaning  set forth in Section
7.12(g) hereof.

             "Liability"  means any  liability,  direct or  indirect,  actual or
contingent,  with  respect  to  any  indebtedness  for  borrowed  money,  or any
mortgage,  deed of trust or pledge or other  security  device  securing any such
liability  or  the  refunding,  refinancing,  increasing,  modification  of  the
principal amount, maturity or interest rate of any of the foregoing.

             "Liquidating  Trustee"  shall  have  the  meaning  set  forth  in
Section 10.03 hereof.

             "Little" shall mean Richard D. Little.

             "LLC  Minimum  Gain"  shall have the  meaning  set forth in Section
7.12(a) hereof.

             "Losses"  shall  mean  all  liabilities,   judgments,  obligations,
losses,  damages,  taxes and interest and  penalties  thereon  (other than taxes
based on fees,  compensation or commissions  received by an Indemnified Party in
connection with the  administration  of the Company or the Company's  property),
claims, actions, suits or other proceedings (whether civil or criminal,  pending
or threatened,  before any court or administrative or legislative body, in which
an Indemnified Party may be or may have been involved as a party or otherwise or
with  which he or she may be or may have  been  threatened,  while in  office or
thereafter) and, as the same are accrued, all costs,  expenses and disbursements
(including,  without  limitation,  reasonable  legal  and  accounting  fees  and
expenses)  of any kind and nature  whatsoever  incurred in  connection  with the
foregoing.

             "Management Bonus Pool" shall have the meaning set forth in Section
4.11 hereof.

             "Management Fee Measurement Amount" shall mean, for the twelve (12)
month period ending on the last day of calendar month immediately  preceding the
date as of which such  measurement is made (or if such measurement is made as of
the last business day of a month, then such period ending on the last day of the
calendar month in which such measurement  date occurs),  the aggregate amount of
all Investment Management Fees for such twelve (12) month period.

             "Management  Members"  shall mean  those  Persons  holding  Class A
Shares  and  Equity  Bonus  Shares  of the  Company  listed as such on the Share
Schedule,  as such  Schedule may be amended from time to time upon the admission
as Members of the Company of (i)  employees of the Company to whom Shares of the
Company, or rights thereto, have been issued and (ii) subsequent  Transferees of
Class A Shares and Equity  Bonus  Shares in  accordance  with the terms  hereof;
provided,  however,  such  employees or Transferees  are not Phoenix  Members or
Affiliates of any Phoenix Member.

             "Management  Percentage"  shall mean  twenty  five and  one-tenth
percent (25.1%).

             "Member"  shall mean each of the  Management  Members,  the Phoenix
Members and any New Member,  and  includes any Person  admitted  pursuant to the
provisions of this Agreement when acting in his, her or its capacity as a member
of the Company,  and  "Members"  shall mean two (2) or more of such Persons when
acting in their capacities as members of the Company.

             "Member  Nonrecourse  Debt"  shall  have the  meaning  set forth in
Section 7.12(f) hereof.

             "Member  Nonrecourse  Debt Minimum Gain" shall have the meaning set
forth in Section 7.12(b) hereof.

             "Membership  Approval" shall mean the approval,  by vote or written
consent,  of Members  holding a majority of the  Outstanding  Class A Shares and
Class B Shares (on a combined basis) held by such Members.  Membership  Approval
may be effected by vote at a meeting or telephonic conference in accordance with
Section  4.05  hereof or by written  consent of the Members in  accordance  with
Section 4.06 hereof.

             "Net Income" and "Net Loss" shall mean,  for each Fiscal  Year,  an
amount  equal to the  Company's  taxable  income or loss for such  Fiscal  Year,
determined in accordance with Section 703(a) of the Code. For this purpose,  all
items of income, gain, loss or deduction (other than items of income, gain, loss
or  deduction  includible  in Net  Property  Gain  or Net  Property  Loss or any
deduction attributable to any Equity Bonus Payment allocated pursuant to Section
7.04(c) hereof) required to be stated  separately  pursuant to Section 703(a)(1)
of the Code shall be included in taxable  income or loss,  as adjusted  for book
purposes in  accordance  with the  principles  of Treasury  Regulations  Section
1.704-1(b)(2)(iv).  Notwithstanding the foregoing,  any items that are specially
allocated  pursuant to Section 7.12(c) hereof shall not be taken into account in
computing Net Income or Net Loss.

             "Net Property  Gain" and "Net Property  Loss" shall mean,  for each
Fiscal  Year,  an amount  equal to the  Company's  taxable gain or loss for such
Fiscal Year  attributable to an  Extraordinary  Event,  determined in accordance
with Section  703(a) of the Code. For this purpose,  all items of income,  gain,
loss or  deduction  attributable  to an  Extraordinary  Event  (other  than  any
deduction attributable to any Equity Bonus Payment allocated pursuant to Section
7.04(c) hereof) required to be separately  stated pursuant to Section  703(a)(1)
of the Code shall be included  in taxable  gain or loss,  as  adjusted  for book
purposes in  accordance  with the  principles  of Treasury  Regulations  Section
1.704-1(b)(2)(iv).  Notwithstanding the foregoing,  any items that are specially
allocated  pursuant to Section 7.12(c) hereof shall not be taken into account in
computing Net Property Gain or Net Property Loss.

             "New  Member"  shall  mean any Person  admitted  as a Member of the
Company  and  named as such in the  record  books of the  Company,  who is not a
Member as of the Effective Date.

             "Nonrecourse  Deductions"  shall  have the  meaning  set forth in
Section 7.12(e) hereof.

             "Officers"  shall  have the  meaning  set forth in  Section  4.07
hereof.

             "Operating  Expenses" means, for any period, the operating expenses
of the Company,  determined  on an accrual basis in  accordance  with  generally
accepted  accounting  principles,   consistently  applied;  provided,   however,
Operating  Expenses shall not include (i) corporate office allocation expense of
PDP, (ii) amortization  expense  (amortization of intangible assets only) of PDP
or (iii) any  severance  payments  made by the  Company to a  Management  Member
pursuant to such  Management  Member's  employment  agreement  with the Company,
other than payments of  compensation  accrued to the date of termination of such
Management Member's employment.

             "Original  Agreement"  shall  have the  meaning  set forth in the
preamble hereof.

             "Outstanding"  shall mean those Shares (or fraction  thereof)  that
are issued to a Member, whether or not vested.

             "Partnership" shall mean GMG/Seneca Capital Management L.P.

             "PDP"  shall mean  Phoenix  Duff & Phelps  Corporation,  a Delaware
corporation.

             "Person"  shall  mean  an  individual,  corporation,   association,
partnership  (general  or  limited),   joint  venture,   trust,   unincorporated
organization, limited liability company, any other entity or organization of any
kind or a government or any department,  agency,  authority,  instrumentality or
political subdivision thereof.

             "Phoenix  Members" shall mean those Persons  holding Class B Shares
of the Company  listed as such on the Share  Schedule,  as such  Schedule may be
amended  from time to time upon the  admission  as  Members  of the  Company  of
subsequent  Transferees of Class B Shares in accordance  with the terms hereof ;
provided,  however, such Transferees are not Management Members or Affiliates of
any Management Member.

             "Phoenix  Percentage"  shall mean  seventy  four and  nine-tenths
percent (74.9%).

             "President"  shall have the  meaning  set forth in  Section  4.07
hereof.

             "Purchase Agreement" shall mean the Purchase Agreement, dated as of
June 18, 1997 by and among PDP and the Persons set forth as signatories thereto.

             "Put/Call  Agreements"  shall mean the  Put/Call  Agreements,  each
dated as of the Effective  Date,  by and between PDP and each of the  Management
Members and the Put/Call  Agreements  entered into by PDP from time to time with
New  Members  of the  Company  to  whom  Class A  Shares  are  Transferred  by a
Management  Member or reissued or issued by the Company,  all in accordance with
this Agreement.

             "Regulatory  Allocations"  shall  have the  meaning  set forth in
Section 7.13 hereof.

             "Remaining  Net Property  Gain" shall have the meaning set forth in
Section 7.04(b) hereof.

             "Repurchase"  shall have the  meaning  set forth in Section  9.03
hereof.

             "Repurchase  Closing  Date"  shall  have the  meaning  set forth in
Section 9.03(a) hereof.

             "Repurchase  Price"  shall have the  meaning set forth in Section
9.03(b) hereof.

             "Repurchased  Interest"  shall  have  the  meaning  set  forth in
Section 9.03 hereof.

             "Repurchased  Member" shall have the meaning set forth in Section
9.03 hereof.

             "Restated  Profits" means,  for any period,  an amount equal to the
difference  between  (A) the gross  revenues  of the  Company  determined  on an
accrual  basis in  accordance  with  generally  accepted  accounting  principles
consistently  applied,  but specifically not including (i) any revenues from any
Extraordinary Event, (ii) any revenues of the Company from Capital Contributions
or the  issuance of  securities,  (iii) any  payments  received  pursuant to any
insurance policies (other than business  interruption payments or reimbursements
of amounts  previously  charged  against  revenues)  or (iv) any  revenues  that
ultimately inure to the benefit of a third party, and (B) Operating  Expenses of
the Company;  provided,  however,  that Restated Profits shall not be reduced by
any Equity Bonus Payments payable pursuant to this Agreement.

             "SEC" shall mean the Securities and Exchange Commission.

             "Retirement  Plans"  shall have the  meaning set forth in Section
4.11 hereof.

             "Securities  Act" shall mean the Securities Act of 1933, as amended
from  time  to  time,  and  successor  thereto,  together  with  the  rules  and
regulations promulgated thereunder from time to time.

             "Seneca" shall mean Gail P. Seneca.

             "Shares"  shall have the meaning set forth in Section  3.01 hereof,
and shall  include  all Class A Shares,  all Class B Shares,  all  Equity  Bonus
Shares and all Shares of any other class issued from time to time by the Company
representing membership interests in the Company.

             "Share  Schedule"  shall  have the  meaning  set forth in Section
3.01 hereof.

             "Special Membership  Approval" shall mean the approval,  by vote or
written  consent,  of (A) Members holding a majority of the Outstanding  Class A
Shares and Class B Shares (on a combined  basis) held by such  Members,  and (B)
Seneca  if she is  then  President  of  the  Company  (or,  if she is  not,  the
Management  Members holding a majority of the Outstanding Class A Shares held by
the Management Members).  Special Membership Approval may be effected by vote at
a meeting or telephonic  conference in accordance with Section 4.05 hereof or by
written consent of the Members in accordance with Section 4.06 hereof.

             "Stapleton"  shall mean Philip C.  Stapleton,  a Founding  Member
who has ceased to be a Member of the Company as of the Effective Date.

             "Tax Matters  Partner"  shall have the meaning set forth in Section
7.10 hereof.

             "Total Equity Bonus Payments" shall mean, as of any date, an amount
equal to the product of (A) the Equity  Bonus  Percentage  and (B) the lesser of
(i) the Initial  Enterprise Value and (ii) the product of 3.5 and the applicable
Management Fee Measurement Amount.

             "Transfer"  shall mean any sale,  assignment,  transfer,  exchange,
charge, pledge, gift, hypothecation,  conveyance or encumbrance (such meaning to
be equally applicable to verb forms of such term), or any offer to do any of the
foregoing.

             "Treasury  Regulations"  shall  mean the  income  tax  regulations,
including temporary regulations, promulgated under the Code, as such regulations
may be  amended  from  time  to  time  (including  corresponding  provisions  of
succeeding regulations).


                         ORGANIZATION AND POWERS POWERS

            II.1..  OrganizationOrganization.  The Articles of Organization  are
being amended and restated  concurrently with the execution of this Agreement to
indicate  that the  Company  shall  henceforth  be managed by its Members and to
change the name of the Company to Seneca Capital Management LLC. The Company was
formed by the filing of its Articles of Organization with the Secretary of State
of the State of California on December 29, 1995 pursuant to the Act.  Subject to
Section 4.03 hereof,  the Articles of Organization may be restated or amended by
the President, as an authorized person, from time to time in accordance with the
Act. The Company  shall deliver a copy of the Articles of  Organization  and any
amendment thereto to any Member who so requests.

            II.2..   Purposes  and  PowersPurposes  and  Powers.  The  principal
business  activity  and  purposes of the Company  shall  initially be to provide
Investment  Management  Services.  However,  the  business  and  purposes of the
Company shall not be limited to its initial principal business activity, and the
Company shall have authority to engage in any other lawful business,  purpose or
activity permitted by the Act. The Company shall possess and may exercise all of
the powers and  privileges  granted by the Act or which may be  exercised by any
Person,  together with any powers incidental  thereto,  so far as such powers or
privileges  are  necessary,   appropriate,   proper,  advisable,  incidental  or
convenient to the conduct,  promotion or attainment of the business  purposes or
activities of the Company, including, without limitation, the following powers:

 ..................(a)    to conduct its business and  operations in any state,
territory  or  possession  of the United  States or in any foreign  country or
jurisdiction;

 ..................(b)  to purchase,  receive,  take, lease or otherwise acquire,
own, hold, improve,  maintain,  use or otherwise deal in and with, sell, convey,
lease, exchange, Transfer or otherwise dispose of, mortgage, pledge, encumber or
create a security  interest in all or any of its real or personal  property,  or
any interest therein, wherever situated;

 ..................(c)  to borrow or lend  money or obtain or extend  credit  and
other financial accommodations,  to invest and reinvest its funds in any type of
security or  obligation  of or interest in any public,  private or  governmental
entity,  and to give and  receive  interests  in real and  personal  property as
security for the payment of funds so borrowed, loaned or invested;

 ..................(d) to make contracts, including contracts of insurance, incur
liabilities  and  give  guaranties,  whether  or  not  such  guaranties  are  in
furtherance  of the  business and  purposes of the  Company,  including  without
limitation, guaranties of obligations of other Persons who are interested in the
Company or in whom the Company has an interest;

 ..................(e)  to merge with, or consolidate  into,  another  California
limited  liability company or other business entity (as defined in Section 17001
of the Act) or to convert  into a Delaware  limited  liability  company or other
form of business  organization  so long as such  conversion does not violate the
Act;

 ..................(f)    to make  donations  irrespective  of  benefit  to the
Company  for the  public  welfare  or for  community,  charitable,  religious,
educational, scientific, civic or similar purposes;

 ..................(g)    to institute,  prosecute, and defend any legal action
or  arbitration   proceeding  involving  the  Company,  and  to  pay,  adjust,
compromise,  settle,  or refer to  arbitration  any  claim by or  against  the
Company or any of its assets; and

 ..................(h)  to appoint one or more managers of the Company, to employ
and  terminate  Officers,  employees,  agents  and other  Persons,  to  organize
committees of the Company,  to delegate to such Persons and/or  committees  such
power and  authority,  the  performance of such duties and the execution of such
instruments in the name of the Company as may be established  from time to time,
to fix the compensation and define the duties and obligations of such personnel,
to establish  and carry out  retirement,  incentive  and benefit  plans for such
personnel,  and to  indemnify  such  personnel  to the extent  permitted by this
Agreement and the Act.

            II.3..  Principal Place of BusinessPrincipal  Place of Business. The
principal  office and place of business of the Company  shall  initially  be 909
Montgomery Street,  Suite 500, San Francisco,  California 94133. The Company may
change its  principal  office or place of business at any time and may establish
other offices or places of business in various  jurisdictions and appoint agents
for  service of  process  in such  jurisdictions,  in each  case,  with  Special
Membership Approval.

            II.4..  Qualification in Other  JurisdictionsQualification  in Other
Jurisdictions.  The Company  shall be qualified or registered  under  applicable
laws of any  jurisdiction  in which  the  Company  transacts  business,  and the
President shall be authorized to execute,  deliver and file any certificates and
documents necessary to effect such qualification or registration.


                                       SHARES; MEMBERSARES; MEMBERS

            III.1. SharesShares.  The membership interests of the Members in the
Company  shall be  represented  by issued  and  outstanding  shares of  interest
("Shares"),  which are divided into  classes,  with each class having the rights
and privileges,  including voting rights, if any, set forth in this Agreement or
as set from time to time with  respect to new  classes of Shares  authorized  in
accordance with Section 4.03(j) hereof. The Company shall maintain a schedule of
all  Members,  their  respective  addresses  and the Shares  (whether  vested or
unvested)  held by them  (the  "Share  Schedule"),  a copy  of  which  as of the
Effective Date is attached  hereto as Schedule A. The Company will, upon request
by any Member,  advise such Member of the number of Shares that such Member then
holds and which of such Shares are vested and  unvested.  The Members shall have
no interest in the Company other than the interests  conferred by this Agreement
represented by the Shares,  which shall be deemed to be personal property giving
only the rights  provided in this  Agreement.  Ownership of a Share (or fraction
thereof)  shall not entitle a Member to any title in or to the whole or any part
of the  property of the Company or right to call for a partition  or division of
the same or for an accounting.  Every Member by virtue of having become a Member
shall be held to have  expressly  assented and agreed to the terms hereof and to
have become a party hereto.

 ..................(a)    Class A Shares.  The Company  hereby  authorizes  for
issuance  2,510  Class A  Shares.  The  Company  has the  power  to  authorize
additional  Class A Shares only with both Special  Membership  Approval as set
forth in Section  4.03(j)  hereof  and the  unanimous  vote of the  Management
Members.  On the Effective Date,  there are 2,510  Outstanding  Class A Shares
held by the  Management  Members in the  respective  amounts  set forth on the
Share  Schedule  attached  hereto as  Schedule A, none of which are vested and
2,510 of which are  unvested.  Unvested  Class A Shares  shall be  subject  to
acceleration  pursuant to Section 4.13 hereof and to the vesting  described on
the Share Schedule attached hereto as Schedule A.

 ..................(b)    Class B Shares.  The Company  hereby  authorizes  for
issuance  7,490  Class B Shares,  and the  Company  does not have the power to
authorize or issue any additional  Class B Shares.  On the Effective Date, all
7,490 Class B Shares are  Outstanding  and held by the Phoenix  Members in the
respective  amounts  set  forth  on the  Share  Schedule.  All of the  Class B
Shares are fully vested and recorded on the Share Schedule.

 ..................(c)    Equity Bonus Shares.  The Company  hereby  authorizes
for  issuance  1,735 Equity  Bonus  Shares,  and the Company does not have the
power to  authorize  or issue  any  additional  Equity  Bonus  Shares.  On the
Effective Date,  there are 1,735  Outstanding  Equity Bonus Shares held by the
Management  Members in the respective  amounts set forth on the Share Schedule
attached  hereto as Schedule A, all of which are fully vested (though  subject
to  forfeiture  pursuant to Section  9.02  hereof).  Equity Bonus Shares shall
not entitle the holder  thereof to any right to vote or receive  distributions
under this Agreement except Equity Bonus Payments under Section 4.12 hereof.

            III.2. Issuance  of  Shares;  Admission  of  MembersIssuance  of
Shares; Admission of Members.

 ..................(a)  The Company is not authorized to offer and sell, or cause
to be offered and sold any Shares except as provided  herein.  In the event that
(i) any Member  forfeits  its rights in and to any Class A Shares or the Company
repurchases  any Class A Shares from any  Member,  each in  accordance  with the
terms hereof, or (ii) additional Class A Shares are authorized by the Company in
accordance  with Section  3.01(a)  hereof,  it is the intent of the Members that
those Shares be available  for  reissuance  or  issuance,  respectively,  by the
Company.  At any time on or prior to December  31,  2001,  the  Company  (acting
through  the  President)  is hereby  authorized  to reissue  (as if such Class A
Shares  had  never  been  previously  issued)  or to issue  such  Class A Shares
(including fractions thereof) to Persons who are employed by the Company, and in
such case, the Company is authorized to admit any additional  Persons as Members
upon such terms as are  established  by the  President  (including  any required
Capital  Contribution).  The Company  shall provide prior notice of any proposed
reissuance  or issuance of Class A Shares to PDP,  and PDP may consult  with the
President as to such reissuance or issuance; provided, however, that any failure
to provide  such  notice  shall not affect the  authority  of the Company or the
Officers,  on behalf of the Company,  to effect any such  reissuance or issuance
and admission.  Class A Shares  reissued or issued from time to time pursuant to
the terms hereof may be vested or  unvested,  depending on the terms under which
they  were  reissued  or  issued  as  set in the  discretion  of the  President;
provided,  however,  that the vesting  schedule  of any such  reissued or issued
Class A Shares  shall not be extended  beyond the dates set forth in the vesting
schedule  described on the Share Schedule  attached hereto as Schedule A without
Special  Membership  Approval.  Any Class A Shares  available for  reissuance or
issuance  on  December  31,  2001  or,  if  earlier,  immediately  prior  to the
withdrawal  of the last  Management  Member from the Company  upon a Transfer or
otherwise  that have not been  reissued or issued in  accordance  with the terms
hereof shall  automatically be deemed to be reissued or issued,  as the case may
be, to the  Management  Members as of such date in  proportion  to their Class A
Shares held  immediately  prior to the close of  business on such date,  and all
such Class A Shares deemed to be reissued or issued in accordance herewith shall
be fully vested as of such date.

 ..................(b)  The Company may establish  eligibility  requirements  for
admission of a subscriber  as a Member and refuse to admit any  subscriber  that
fails  to  satisfy  such  eligibility  requirements.   The  President  shall  be
responsible  for  determining  whether a person or  entity is  eligible  to be a
Member. Each eligible Person who subscribes for Class A Shares to be reissued or
issued by the  Company  shall be admitted as a Member of the Company at the time
(i) such Person  agrees to be bound by the  provisions  hereof by  executing  an
instrument  satisfactory to the President whereby such Person becomes a party to
this Agreement as a Member, (ii) the President accepts such instrument on behalf
of  the  Company  and  (iii)  the   subscriber   makes  the   required   Capital
Contribution(s),  if any.  Existing  Members shall have no preemptive or similar
right to  subscribe  to the  reissuance  or  issuance  of Class A Shares  of the
Company,  and the  Members  acknowledge  that their  percentage  interest in the
profits of the Company allocable to the Class A Shares are subject to adjustment
(downward  and  upward)  in the  event  of  certain  issuances,  forfeitures  or
repurchases of Shares after the Effective  Date. Any Class A Shares  reissued or
issued by the  Company  and the Person to whom such  Shares are so  reissued  or
issued  shall be  subject  to all of the  terms  and  conditions  of a  Put/Call
Agreement to be entered into by such Person with PDP,  substantially in the form
of the Put/Call Agreements dated as of the Effective Date.

            III.3.  Representations of  MembersRepresentations  of Members. Each
Member  (including  each New Member  admitted  after the Effective  Date) hereby
represents and warrants to the Company and each other Member,  and  acknowledges
as follows:

 ..................(a)    Such  Member has such  knowledge  and  experience  in
financial  and business  matters that it is capable of  evaluating  the merits
and risks of an  investment  in the Company and making an informed  investment
decision with respect thereto.

 ..................(b)    Such  Member  is  able  to  bear  the   economic  and
financial  risk of an investment  in the Company for an  indefinite  period of
time.

 ..................(c)    Such Member is  acquiring  the Shares for  investment
only  and  not  with  a view  to,  or  for  resale  in  connection  with,  any
distribution to the public or public offering thereof.

 ..................(d) Such Member understands the Shares of the Company have not
been  registered  under  the  Securities  Act  or  the  securities  laws  of any
jurisdiction and cannot be disposed of unless they are  subsequently  registered
and/or  qualified  under  applicable  securities laws and the provisions of this
Agreement have been complied with.

 ..................(e) The execution,  delivery and performance of this Agreement
by such Member do not require it to obtain any consent or approval  that has not
been  obtained and do not  contravene or result in a default under any provision
of any  existing  law or  regulation  applicable  to it,  any  provision  of its
charter, by-laws or other governing documents (if an entity) or any agreement or
instrument to which it is a party or by which it is bound.

            III.4.  Limitation of Liability of MembersLimitation of Liability of
Members. Except as otherwise provided in the Act, no Member of the Company shall
be obligated personally for any debt,  obligation or liability of the Company or
of any other Member, whether arising in contract,  tort or otherwise,  solely by
reason  of being a Member  of the  Company.  No  Member  shall be  liable to the
Company  or any  other  Member  for  acting  in good  faith  reliance  upon  the
provisions of this Agreement. No Member shall have any responsibility to restore
any negative  balance in its General  Capital  Account or to contribute to or in
respect of the liabilities or obligations of the Company or return distributions
made by the  Company  except as  required  by this  Agreement,  the Act or other
applicable  law;  provided,  however,  that  Members are  responsible  for their
failure to make required  Capital  Contributions in accordance with Section 7.01
hereof.

            III.5. Records; Rights to Information;  ReportsRecords; Rights to
Information; Reports.

 ..................(a)    The Company shall maintain at its principal  place of
business all of the following:

                        (i)    The  Share  Schedule   (identical  in  form  to
Schedule A attached  hereto),  setting forth a current list of the full name and
last known business or residence address of each Member of the Company set forth
in alphabetical order,  together with the Capital  Contribution and the share in
profits and losses of each Member;

                        (ii)   Schedules  identical  in  form  to  Schedule  B
attached  hereto,  setting  forth  the  current  list of the  Officers  of the
Company;

                        (iii)  A copy of the Articles of Organization  and all
amendments  thereto,  together with any powers of attorney pursuant to which the
Articles of Organization or any amendments thereto were executed;

                        (iv)   Copies of the  Company's  federal,  state,  and
local income tax or information  returns and reports,  if any, for the six (6)
most recent taxable years;

                        (v)    A copy of this  Agreement,  and any  amendments
hereto,  together with any powers of attorney pursuant to which this Agreement
or any amendments hereto were executed;

                        (vi)   Copies  of  the  financial  statements  of  the
Company, if any, for the  six (6) most recent Fiscal Years; and

                        (vii)  The books and  records  of the  Company as they
relate to the internal  affairs of the Company for at least the current and past
four (4) Fiscal Years.

 ..................(b)  Upon the  request of a Member,  for  purposes  reasonably
related to such Member's interest as a Member of the Company,  the Company shall
promptly  deliver to such Member,  at the expense of the Company,  a copy of the
information  required to be maintained pursuant to subsections (a)(i),  (a)(ii),
(a)(iv)  and  (a)(v) of this  Section  3.05.  Each  Member  has the  right  upon
reasonable  request,  for  purposes  reasonably  related to the interest of that
Person as a Member to inspect and copy during normal  business  hours any of the
records  required  to be  maintained  pursuant to Section  3.05(a)  above and to
obtain,  promptly after  becoming  available,  a copy of the Company's  federal,
state and local income tax or information returns for each Fiscal Year.

 ..................(c) In addition to the information required to be furnished to
the Members pursuant to the Act as set forth above, the Company shall furnish to
each Person who was a Member for any portion of a Fiscal Year audited  financial
statements of the Company,  including a balance sheet and  statements of income,
such Member's  General  Capital  Account and Equity Bonus Account and changes in
financial  position for such year and all other  information  necessary  for the
preparation of such Person's federal income tax return.

            III.6.  Waiver of Dissenters'  RightsWaiver  of Dissenters'  Rights.
Each Member, by executing this Agreement, hereby agrees to waive the application
of Chapter 13  (commencing  with Section  17600) of the Act.  Each Member hereby
acknowledges  and agrees that such Member has waived,  pursuant to this  Section
3.06,  any rights such Member may have as of the Effective Date or thereafter to
dissenters' or appraisal rights under the Act.


                                       MANAGEMENT; OFFICERSFFICERS

            IV.1..  Management  under Authority of the  MembersManagement  under
Authority  of the  Members.  The  business  and affairs of the Company  shall be
managed under the authority of the Members subject to and in accordance with the
provisions set forth herein.

            IV.2.. Power of the Members; VotingPower of the Members; Voting.

            ......  (a) Members,  in their capacity as such, shall have no right
to amend or terminate this Agreement or to appoint,  select,  vote for or remove
the Officers or their agents or to exercise  voting  rights or call a meeting of
the Members,  except as specifically provided in this Agreement. No Member shall
have any  authority  or power to bind or to act for or on  behalf  of any  other
Member or the  Company in any respect in his/her  capacity  as Member,  with all
such authority and power being delegated to the Officers of the Company pursuant
to Section 4.07 hereof.

            ......  (b)  Members  holding  Equity  Bonus  Shares  shall  not  be
entitled,  with respect thereto, to vote on any matter except in certain limited
circumstances  in connection with an amendment to this Agreement as set forth in
Section 11.05 hereof.

            ......  (c)  Notwithstanding   anything  to  the  contrary  in  this
Agreement  (including  the  delegation  of  authority  pursuant to Section  4.07
hereof) or in the Act (other than provisions thereof that specifically cannot be
altered by the  Members),  each Member  holding Class A Shares or Class B Shares
shall be entitled, with respect thereto, to vote on or approve or consent to (i)
any  matter  specifically  set forth in  Section  4.03  hereof  or  specifically
requiring  Special  Membership  Approval  pursuant to the terms  hereof,  to the
extent provided thereby;  (ii) any matter specifically set forth in Section 4.04
hereof or  specifically  requiring  Membership  Approval  pursuant  to the terms
hereof,  to the  extent  provided  thereby;  (iii)  unless  such  Member  is the
Transferor,  the admission of a Transferee of Shares as a Member of the Company,
pursuant to Section 8.02 hereof;  and (iv) unless such Member is the withdrawing
Member,  the continuation of the business of the Company after the Bankruptcy of
PDP, pursuant to Section 10.02(b) hereof. In connection therewith,  such Members
shall  have one vote  for each  Class A Share or Class B Share  owned by them of
record  according  to the books of the  Company and a  proportionate  vote for a
fractional Class A Share or Class B Share.

            IV.3.. Special Membership  ApprovalSpecial  Membership Approval. The
Company,  and the  President  and the other  Officers on behalf of the  Company,
shall not take any of the following  actions  without  prior Special  Membership
Approval  until  December  31, 2001 and,  thereafter,  shall not take any of the
following actions without prior Membership Approval:

 ..................(a)  incurrence  by the  Company  of any  Liability  that,  if
combined  with  existing  Liabilities,  would result in total  Liabilities  (not
including  leases for real  property  or  liabilities  to make any Equity  Bonus
Payment  or pay any  bonus  out of the  Management  Bonus  Pool)  in  excess  of
$500,000.00;

 ..................(b)    making of any Capital  Expenditure in any Fiscal Year
not  included  in the final  annual  budget of the  Company  for the  relevant
Fiscal  Year that would  cause the  aggregate  Capital  Expenditures  for such
Fiscal Year to exceed $300,000.00;

 ..................(c)    entering into any lease for real property;

 ..................(d)    any  expenditure  or  commitment  which  exceeds  the
amount  allocated  therefor  in the final  annual  budget  for the  applicable
Fiscal Year;

 ..................(e)    entering the Company into Bankruptcy;

 ..................(f)    any sale of any  material  portion  of the  assets or
Shares of the Company;

 ..................(g)    any  voluntary  liquidation  or  dissolution  of  the
Company pursuant to Section 10.02(a) hereof;

 ..................(h)    consummation of any Extraordinary Event;

 ..................(i)    the  repurchase  of any Shares of the Company  except
in  connection  with (i) the  payment of Equity  Bonus  Payments  pursuant  to
Section 4.12 hereof or (ii) the repurchase of Shares  pursuant to Section 9.03
hereof;

 ..................(j)    the  authorization  of additional  Class A  Shares or
the creation of one or more  additional  classes of Shares after the Effective
Date;

 ..................(k)    any  change  in  the  principal  place  of  business,
Fiscal Year or name of the Company  (except to the extent  provided in Section
4.09(b) hereof);

 ..................(l)    consummation of any  transaction  between the Company
and any  Affiliate  of any  Management  Member or between  the Company and any
Person in which a family  member  of a  Management  Member  has,  directly  or
indirectly, a significant financial interest;

 ..................(m)  entering into any  employment  arrangement  or consulting
arrangement  or other  contract  or  agreement  not in the  ordinary  course  of
business  (and  specifically   excluding  contracts  for  Investment  Management
Services),   which  by  its  terms  (other  than,  in  the  case  of  employment
arrangements or consulting arrangements, if such terms are terminable "at will")
extends beyond December 31, 2001;

 ..................(n)    any  amendment  to the  Articles of  Organization  or
amendment of this Agreement pursuant to Section 11.05 hereof;

 ..................(o)    the   appointment   of  a   Liquidating   Trustee  in
accordance with Section 10.03 hereof; or

 ..................(p)    retention of  independent  public  accountants of the
Company other than Lallman,  Feltman,  Shelton & Peterson,  P.A. in connection
with services  rendered  during Fiscal Year 1997 and Price  Waterhouse  LLP or
such other "big six"  accounting  firm which may  hereafter be retained by PDP
to audit  its  consolidated  financial  statements  for  Fiscal  Year 1997 and
thereafter.

            IV.4.. Membership  ApprovalMembership Approval. The Company, and the
President and the other Officers on behalf of the Company, shall not take any of
the following actions without prior Membership Approval:

 ..................(a)    consenting  to any  Transfer  of Shares  pursuant  to
Section 8.01(a) hereof by Seneca;

 ..................(b)    the  amendment  or   modification  of  the  Company's
employment  agreement  or  noncompetition/nonsolicitation  agreement  with any
Management Member;

 ..................(c)    setting the maximum  percentage  of Restated  Profits
of the Company in excess of  $24,000,000.00  to be allocated to the Management
Bonus Pool for any Fiscal Year beginning after December 31, 1999,  pursuant to
Section 4.11 hereof; or

 ..................(d)    making any discretionary  determination in accordance
with  Section 5.03 hereof with  respect to  indemnification  by the Company of
any Indemnified Party pursuant to Article V hereof.

            IV.5.. Meetings of MembersMeetings of Members.

 ..................(a)    Meetings  of  Members  may be called  for any  proper
purpose at any time by the  President  of the Company or by Members  holding a
sufficient  number of  Outstanding  Class A Shares  and  Class B Shares  (on a
combined basis) to effect  Membership  Approval.  The President or the Members
calling the meeting shall determine the date,  time, place and purpose of each
meeting  of  Members,  and  written  notice  thereof  shall  be  given  by the
President  to each Member not less than ten (10) days nor more than sixty (60)
days  prior to the date of the  meeting.  Notice  shall be sent to  Members of
record on the date when the meeting is called.  The  business of each  meeting
of  Members  shall be limited  to the  purposes  described  in the  notice.  A
written  waiver of notice,  executed  before or after a meeting by a Member or
its  authorized  attorney  and  delivered  to  the  Company  shall  be  deemed
equivalent to notice of the meeting.

 ..................(b)    Members  holding a sufficient  number of  Outstanding
Class A Shares and Class B Shares (on a combined  basis) to effect  Membership
Approval  shall  constitute a quorum for the  transaction of any business at a
meeting  of  Members.  Members  may  attend a  meeting  in person or by proxy.
Members may also participate in a meeting by means of conference  telephone or
similar  communications  equipment  that  permits all Members  present to hear
each other.  If less than a quorum of the Members is present,  the meeting may
be adjourned by the chairman to a later date, time and place,  and the meeting
may be held as adjourned without
       further notice. When an adjourned meeting is reconvened, any business may
be  transacted  that might have been  transacted  at the  meeting as  originally
called.

 ..................(c)    The  President  shall act as chairman at all meetings
of the Members and, in such  capacity,  shall  determine the order of business
and the procedures to be followed at each meeting of Members.

            IV.6.. Action Without a MeetingAction  Without a Meeting. Any action
required or permitted to be taken at any meeting of Members may be taken without
a meeting if one or more  written  consents  to such  action  shall be signed by
Members  having at least such  number of votes as would be  required  to approve
such  action at a meeting.  Such  written  consents  shall be  delivered  to the
President at the Company's principal place of business and shall be filed in the
records of the Company.  The  President  shall give prompt notice to all Members
who did not consent to any action taken by written  consent of Members without a
meeting.

            IV.7.. Delegation of Authority to OfficersDelegation of Authority
to Officers.

 ..................(a) The officers of the Company (the "Officers") shall consist
of  a   President/Chief   Executive   Officer/Chief   Investment   Officer  (the
"President") and such other officers,  if any, as are contemplated  herein or as
the President may determine are  necessary,  appropriate  or desirable.  Subject
only to the reservation of rights set forth in Sections 4.03 and 4.04 hereof and
the coordination  with PDP set forth in Section 4.08 hereof,  the Members hereby
delegate to the President all power, right and authority as is usually exercised
by the President  and/or Chief  Executive  Officer of a corporation,  including,
without limitation,  the power, right and authority (i) to manage the day-to-day
business and affairs of the Company and for this purpose to employ or retain and
terminate any Officers, employees,  consultants,  agents, brokers, professionals
(provided  that,  with  respect to the  independent  public  accountants  of the
Company,  such action has been  authorized to the extent  required under Section
4.03(p)  hereof) or other Persons in any capacity for such  compensation  and on
such terms as may be necessary or desirable and to delegate to such Persons such
power and  authority,  the  performance of such duties and the execution of such
instruments  in the  name  of the  Company  as the  President  deems  advisable;
provided,  however,  that PDP shall have the right to appoint an  individual  to
serve as the Secretary, General Counsel and Compliance Officer, who shall not be
compensated by the Company without Special Membership Approval or removed by the
President  without  Membership  Approval;  (ii) to determine such matters as the
development,  maintenance and change of investment  management  policies and fee
structures,  the hiring,  promotion,  firing and  compensation  (including bonus
allocation)  of  staff,   management  and  executive   personnel,   new  product
development,  sales and marketing  policies and  implementation and decisions to
accept, reject, amend, maintain or terminate client relationships;  and (iii) to
enter into, execute, deliver, acknowledge, make, modify, supplement or amend any
documents  or  instruments  in  the  name  of the  Company  authorized  by  this
Agreement.  The  President  is an agent of the  Company  for the  purpose of the
Company's  business.  Any action taken by the President in accordance  with this
Agreement,  and the  signature  of the  President  on any  agreement,  contract,
instrument  or other  document on behalf of the Company  executed in  accordance
with  this  Agreement,  shall  be  sufficient  to bind  the  Company  and  shall
conclusively  evidence  the  authority  of the  President  and the Company  with
respect thereto.  Without  limiting the generality of any of the foregoing,  the
President  shall be  responsible  for  determining  the  salaries  of, and bonus
allocations to, the other Officers and employees of the Company  (subject to the
terms of any applicable  employment agreement with the Company) and to recommend
to PDP the  allocation of options to purchase  shares of capital stock of PDP to
be granted to Officers,  Management Members and employees of the Company. For so
long as  Seneca  is the  President  of the  Company,  the  power  and  authority
delegated  to the  President  in  accordance  with this  Agreement  shall not be
limited or restricted, except as specifically provided in this Agreement.

 ..................(b)  As to any matter  that is beyond the power and  authority
delegated to the President under Section 4.07(a) or elsewhere in this Agreement,
the  President  and other  Officers  shall act at the  direction  of the Members
acting by  Membership  Approval;  provided  that such  directed  action has been
authorized  by any and all  required  consents  and  approvals  pursuant  to any
provision of this Agreement  specifically  requiring Special Membership Approval
or the consent, approval or action of the President.

 ..................(c)  The President of the Company  shall  initially be Seneca,
who may be removed only pursuant to and in accordance  with the terms of Section
4.09 hereof.  The other  initial  Officers of the Company shall be those persons
whose  names are  initially  set forth on  Schedule  B attached  hereto,  and an
identical schedule shall be maintained as part of the records of the Company and
amended  from time to time to reflect  changes in the  Officers of the  Company.
Subject to paragraph  (a) of this Section  4.07,  the  Officers,  other than the
President,  may be  appointed  by the  President,  and the  powers,  duties  and
responsibilities of such Officers may be changed from time to time in accordance
with such Officers' employment  agreements or, if none, in the discretion of the
President.  Subject to paragraph (a) of this Section 4.07,  any such Officer may
be  removed  by the  President  at any time in  accordance  with such  Officer's
employment  agreement  or, if none,  in the  discretion  of the  President.  Any
Officer  may  resign as an Officer at any time,  and such  resignation  shall be
effective,  in  accordance  with the  terms  and  conditions  of such  Officer's
employment agreement with the Company.

 ..................(d) Notwithstanding anything to the contrary contained in this
Article  IV,  either  PDP or the  President  may  propose  the  modification  or
termination  of the Services  Agreement to be entered into as of the LLC Closing
(as defined in the Purchase Agreement) by the Company and Genesis Merchant Group
Securities  LLC (or of any of the Company  Personnel  Services or the Processing
Services as defined in and provided for in said Services Agreement),  subject to
the consent of PDP or the President, as the case may be, which consent shall not
be unreasonably withheld.

            IV.8..  Coordination  of the  Officers  and  PDPCoordination  of the
Officers  and PDP.  The  Officers of the Company  shall  provide PDP with annual
business and financial plans and a preliminary  annual budget for the Company by
not later than sixty (60) days prior to the  beginning  of each Fiscal Year and,
after  consultation with PDP, a final annual budget by not later than thirty-one
(31) days after the end of each Fiscal Year. The aggregate expenses set forth in
the final annual budget with respect to any Fiscal Year shall not exceed by more
than 10% the  aggregate  expenses set forth in the annual budget with respect to
the preceding Fiscal Year without prior Membership Approval.  The Officers shall
provide PDP with such financial and other information, with supporting schedules
and data as  requested by PDP, as  necessary  for PDP to prepare and file,  on a
timely basis, all periodic  reports,  registration  statements and other filings
required to be filed by PDP pursuant to the federal  securities laws, as well as
such other supporting  schedules and information as PDP may reasonably  request.
The  Officers  and PDP  shall  review at least  quarterly  the  performance  and
projections  of the  Company,  the  progress  of its  business,  key  personnel,
potential  sources of additional  capital for management,  new product offerings
and other appropriate matters. It is the intention of the Members of the Company
that there shall be open  communication  concerning  the business of the Company
between  PDP and the  Officers of the  Company,  with  opportunities  for PDP to
provide the President  with advice and to offer the President  suggestions as to
the  annual  budget,  strategic  position  and  conduct of the  business  of the
Company.  Accordingly,  the President, and such other Officers of the Company as
PDP may request,  shall meet with PDP at the principal offices of the Company at
such other times as PDP may reasonably request upon reasonable prior notice.

            IV.9.. Removal of Seneca as President; Name of the CompanyRemoval of
Seneca as President; Name of the Company.

 ..................(a)    Seneca  shall not be subject to removal as  President
by the  Company,  except  in  accordance  with  the  terms  of her  employment
agreement  with  the  Company,  dated  as  of  the  Effective  Date,  and  the
procedures set forth therein.

 ..................(b) At any time after December 31, 2001, the Company shall, at
the direction of the Members,  acting by Membership Approval,  promptly take any
and all action  necessary to include the word  "Phoenix" in its name or the name
of any Affiliate of the Company. After the occurrence of an ADV Disclosure Event
prior to December 31, 2001,  notwithstanding Section 4.03(k) hereof, the Company
shall, at the direction of the Members, acting by Membership Approval,  promptly
take any and all action  necessary to include the word  "Phoenix" in its name or
the name of any Affiliate of the Company; provided, however, that in such event,
upon the written  request of Seneca,  the Company and the Members shall promptly
take any and all action  necessary  to delete the  reference  to "Seneca" or any
name  similar  to  Seneca in the name of the  Company  or any  Affiliate  of the
Company. Upon the occurrence of any such change of name pursuant to this Section
4.09(b), the Company will promptly file an appropriate amendment to the Articles
of  Organization  and  other  documents  relating  to the  Company  or any  such
Affiliate to reflect such name change.

 ..................(c)    At such time as Seneca is no longer  President of the
Company,  a new President may be designated at any time prior to  December 31,
2001 by Special  Membership  Approval and at any time thereafter by Membership
Approval.

            IV.10.  Salaries of OfficersSalaries of Officers.  The Members shall
not receive any  compensation  from the  Company  for  services  provided to the
Company in their  capacity as  Members.  Any  Officers  of the Company  shall be
entitled to receive from the Company in any Fiscal Year,  such salaries  payable
in such  periodic  installments,  if any,  as are  specified  in the  employment
agreement  between such  respective  Officer and the Company  effective for such
Fiscal Year or, if none, as the President shall approve and determine.

            IV.11. Management Bonus PoolManagement Bonus Pool. Each Fiscal Year,
the Company shall establish a management bonus pool for certain key employees of
the Company,  as determined by the President (the "Management Bonus Pool").  The
Company  may  also  establish  such  non-qualified   deferred   compensation  or
retirement  plans for employees of the Company as the President  deems desirable
(collectively,   the   "Retirement   Plans");   provided,   however,   that  the
contributions by the Company on behalf of all Management Bonus Pool participants
to  all  such  Retirement  Plans  shall  be  deemed  to be  payments  out of the
Management  Bonus Pool  available  for the Fiscal  Year in respect of which such
contributions  are made. The Management Bonus Pool and the  contributions of the
Company on behalf of all Management  Bonus Pool  participants  to all Retirement
Plans shall be set for each Fiscal Year by the President in her sole discretion;
provided,  however, that (a) for any Fiscal Year beginning prior to December 31,
1999,  the Management  Bonus Pool shall be an amount of up to forty-two  percent
(42%) of the  Restated  Profits of the  Company for such Fiscal Year and (b) for
any Fiscal Year beginning  after  December 31, 1999,  the Management  Bonus Pool
shall be up to forty-two  percent  (42%) of the Restated  Profits of the Company
for the first twenty-four  million dollars  ($24,000,000.00) of Restated Profits
of the  Company  and such  maximum  percentage  of the  Restated  Profits of the
Company in excess of  twenty-four  million  dollars  ($24,000,000.00)  as may be
fixed from time to time by the President with Membership  Approval in accordance
with Section 4.04 hereof;  it being understood that Equity Bonus Payments do not
constitute part of the Management Bonus Pool.

            IV.12. Equity Bonus PaymentsEquity Bonus Payments.

 ..................(a)  Each  Management  Member  holding  Equity Bonus Shares is
entitled to receive an Equity Bonus  Payment from the Company upon the happening
of  certain  events,  subject  to the  terms  and  conditions  set forth in this
Agreement and in such Management Member's Put/Call Agreement, including, without
limitation,  the  provisions of this Agreement with regard to forfeiture of such
Equity Bonus Shares.  As of the Effective Date,  each Management  Member holding
Equity  Bonus Shares  shall be entitled to receive,  upon the  happening of such
events and  subject to such  conditions,  an Equity  Bonus  Payment in an amount
equal to the balance of such  Management  Member's  Equity Bonus  Account as set
forth opposite such Management  Member's name on Schedule A attached hereto. The
Equity Bonus Shares held by each Management  Member supersede and replace in its
entirety any Phantom Interest (as defined in the Original Agreement) held by any
Member in accordance  with the Original  Agreement and any Phantom  Equity Bonus
Agreement entered into between the Company or the Partnership and the respective
Member,  in each case, to the extent such Phantom Interest was not forfeited and
surrendered pursuant to the Purchase Agreement.

 ..................(b)  The Total Equity Bonus Payments are subject to adjustment
upon, and at the time (determined in accordance with Section  7.04(d)(1) hereof)
of, any Book Event in  accordance  with the formula set forth in the  definition
thereof  contained in Article I of this  Agreement.  Upon any such adjustment in
the Total Equity Bonus Payments,  each Management  Member's Equity Bonus Payment
(and Equity Bonus Account pursuant to Section 7.03 hereof) shall also be reduced
or increased, as the case may be, proportionately;  provided,  however, that the
Total Equity Bonus  Payments shall never exceed the product of (i) seventeen and
thirty five  one-hundredths  percent  (17.35%)  and (ii) the Initial  Enterprise
Value.

 ..................(c)  Upon any  Transfer of all or a portion of any Shares held
by any Management Member upon such Management Member's death pursuant to Section
8.01(b) hereof,  the Company shall  Repurchase all of the Outstanding  Shares of
the  Company  held by such  Management  Member in  accordance  with the terms of
Section  9.03 hereof.  Pursuant to such  Repurchase,  the Company  shall pay the
Repurchase Price to the Repurchased Member, which Repurchase Price is defined to
include such  Repurchased  Member's  Equity Bonus  Payment.  Upon payment of the
Repurchase Price, the Equity Bonus Shares held by such Repurchased  Member shall
be  automatically  forfeited and available for reissuance in accordance with the
last two sentences of Section 4.12(f) hereof.

 ..................(d)  Upon any  Transfer  of all or a  portion  of any  Class A
Shares held by any Management  Member upon an Exercise of the Put/Call  pursuant
to Section 8.01(c) hereof or, if approved by the President,  a Transfer of Class
A Shares in the  President's  discretion  pursuant  to Section  8.01(a) (in each
case,  other than in connection  with a Change in Control of the Phoenix Members
or other  Extraordinary  Event), the Company shall pay to the Transferor Member,
by wire transfer of immediately  available  funds no later than thirty (30) days
after  such  Transfer  occurs,  an  amount  equal  to the  product  of (i)  such
Transferor   Member's  Equity  Bonus  Payment  at  the  time  of  such  Transfer
(determined in accordance with Section 7.04(d)(1) hereof),  multiplied by (ii) a
fraction, the numerator of which is the number of Class A Shares Transferred and
the  denominator  of which is the total  number  of Class A Shares  held by such
Member  immediately  prior to the time of such  Transfer.  Upon  payment of such
Equity Bonus Payment,  the number of Equity Bonus Shares equal to the product of
the total number of Equity Bonus Shares held by such Member immediately prior to
the  time  of  such  Transfer  and  the  fraction   expressed   above  shall  be
automatically canceled and may not be reissued by the Company.

            ......IV(ddd)  Upon any Change in Control of the Phoenix  Members or
other Extraordinary Event, the President, in her sole discretion, shall have the
authority to cause the Company to pay to any  Management  Member  holding Equity
Bonus Shares by wire transfer of immediately available funds no later than sixty
(60)  days  after  such  Change  in  Control  of the  Phoenix  Members  or other
Extraordinary  Event  occurs  (but  not  later  than  ten (10)  days  after  the
determination  of the amount of the Equity Bonus Payment due to such  Management
Member),  one hundred  percent  (100%) of the Equity  Bonus  Payment due to such
Management  Member at the time of such Change in Control of the Phoenix  Members
or other Extraordinary  Event,  determined in accordance with Section 7.04(d)(1)
hereof.  Upon payment of any Management  Member's Equity Bonus Payment  pursuant
hereto,  such  Management  Member's  Equity Bonus Shares shall be  automatically
canceled  and may not be reissued by the Company.  ..................(a)  In the
event of a  forfeiture  of Equity  Bonus  Shares  by a  Management  Member  upon
termination of employment  voluntarily by such  Management  Member (without Good
Reason) or by the Company for Cause  pursuant to Section  9.02(a)  hereof,  such
Management  Member shall forfeit one hundred percent (100%) of his or her Equity
Bonus Shares and, as a result,  one hundred  percent (100%) of his or her Equity
Bonus  Payment.  In the  event of a  forfeiture  of  Equity  Bonus  Shares  by a
Management  Member (other than Seneca or Little) upon such  Management  Member's
termination of employment as a result of his or her Disability, without Cause by
the Company or with Good Reason by such  Management  Member  pursuant to Section
9.02(c) hereof,  such Management Member shall forfeit fifty percent (50%) of his
or her Equity Bonus Shares and, as a result,  fifty  percent (50%) of his or her
Equity Bonus  Payment.  Forfeited  Equity  Bonus  Shares shall be available  for
reissuance  by the  Company,  and any  Equity  Bonus  Shares so  reissued  shall
continue  to be  subject  to  all of the  terms  and  conditions  to  which  the
originally   issued  Equity  Bonus  Shares  are  subject,   including,   without
limitation,  the risk of forfeiture  pursuant to Section 9.02 hereof. Any Equity
Bonus  Shares  available  for  reissuance  on December  31, 2001 or, if earlier,
immediately  prior to the  withdrawal  of the last  Management  Member  from the
Company upon a Transfer or otherwise  that have not been  reissued in accordance
with the terms  hereof  shall  automatically  be deemed  to be  reissued  to the
Management  Members as of such date in  proportion  to their Class A Shares held
immediately prior to the close of business on such date.

 ..................(b)  Upon the  termination  of employment  with the Company of
Seneca or Little,  which  termination is the result of such Management  Member's
Disability  or which  termination  is without  Cause by the Company or with Good
Reason by such  Management  Member,  the  Company  shall pay to such  Management
Member  holding  Equity Bonus Shares by wire transfer of  immediately  available
funds no later than sixty (60) days after such  termination  of employment  (but
not later than ten (10) days after the determination of the amount of the Equity
Bonus Payment due to such Management Member),  one hundred percent (100%) of the
Equity  Bonus  Payment  due to  such  Management  Member  at the  time  of  such
termination  of employment  (determined  in accordance  with Section  7.04(d)(1)
hereof).  Upon payment of any Management  Member's Equity Bonus Payment pursuant
hereto,  such  Management  Member's  Equity Bonus Shares shall be  automatically
canceled and may not be reissued by the Company.

 ..................(c)  The Company and the Members hereby  acknowledge and agree
that PDP shall promptly make an additional  Capital  Contribution to the Company
in the  amount  of the  Equity  Bonus  Payment  due to a  Management  Member  in
connection with any Transfer of Shares  pursuant to Sections  8.01(a) or (c), in
order to permit the Company to make such payment in accordance  with the payment
terms set forth herein,  and upon payment thereof,  the Company's  obligation to
pay such Equity Bonus  Payment upon such  Transfer of Shares shall be satisfied.
Any additional  Capital  Contribution  made by PDP pursuant to this Agreement or
the Put/Call  Agreements  as a result or in  connection  with the payment of any
Equity Bonus Payment by the Company shall increase PDP's General Capital Account
allocable to the Class B Shares  pursuant to the adjustment set forth in Section
7.02(a)(ii) hereof.

            I.2...  Acceleration  of  Vesting of Class A  SharesAcceleration  of
Vesting of Class A Shares. Notwithstanding anything to the contrary contained in
this Agreement,  any employment agreement or other agreement between the Company
or the Partnership and any Management Member,

 ..................(a)  upon  notice to the Phoenix  Members  and any  applicable
Management  Member,  the  President,  in her  sole  discretion,  shall  have the
authority  to  accelerate  the vesting  (which  acceleration  shall be effective
immediately upon such notice or such later date as may be specified  therein) of
any and all unvested Class A Shares that are:

                        (i)    held   by   any   Management   Member   upon  a
determination  (in the sole  discretion  of the  President)  that  the  existing
vesting  schedule  for  such  Class A  Shares  poses a  hardship  to or for such
Management Member;

                        (ii)   held by any or all  Management  Members  in the
event of termination of Seneca's  employment by the Company  without Cause or by
Seneca with Good Reason,  and in such event,  the  decision of the  President to
accelerate  such vesting shall be deemed to have occurred  immediately  prior to
the effective date of such termination; or

                        (iii)  held by any or all  Management  Members  upon a
Change in Control of the Phoenix Members or other Extraordinary Event;

 ..................(b)    all unvested  Class A Shares  shall vest  immediately
upon the death or  Disability  of Seneca  if  Seneca is the  President  of the
Company immediately prior thereto;

 ..................(c)    all  unvested  Class A Shares held by any  Management
Member shall vest immediately upon the death of such Management Member;

 ..................(d) fifty percent (50%) of all unvested Class A Shares held by
any Management  Member (other than Seneca or Little) shall vest immediately upon
the  Disability of such  Management  Member or  termination  of such  Management
Member's  employment  without  Cause by the  Company or with Good  Reason by the
Management Member;

 ..................(e) in the case of Seneca and Little only, one hundred percent
(100%) of all unvested Class A Shares held by such Management  Member shall vest
immediately upon the Disability of such Management Member or termination of such
Management  Member's employment without Cause by the Company or with Good Reason
by such Management Member; and

 ..................(f)  in the case of Harold  Nathan only,  one hundred  percent
(100%) of all unvested Class A Shares held by such Management  Member shall vest
immediately  upon the retirement of such Management  Member at any time from and
after the age of fifty three and one half (53 1/2).

            I.3... Key Person InsuranceKey  Person Insurance.  The Company shall
maintain key person  insurance on the life of each Management  Member while such
Management  Member remains an Officer or employee of the Company,  in a coverage
amount equal to (a) the Repurchase Price for all Outstanding Shares held by such
Management  Member upon such  Management  Member's  death as provided in Section
9.03 hereof or (b) the maximum coverage amount obtainable from  acceptably-rated
insurers,  whichever is the lesser, and with such policy or policies to be owned
by and all  proceeds  thereunder  payable to the Company.  The maximum  coverage
amount shall be  increased  at any time or from time to time by the Company,  to
the extent additional  coverage is available,  to an amount necessary to satisfy
the  objectives of this Section 4.14.  All proceeds from such  insurance  policy
shall be utilized first to fund any Repurchase by the Company of the Shares held
by such Management Member's estate following his or her death in accordance with
Section 9.03 hereof,  and next to provide  additional working capital permitting
the Company to continue its  operations  and search  actively for a successor to
such Management  Member during the three (3) months  following the death of such
Management Member.

            I.4...  Reliance  by Third  PartiesReliance  by Third  Parties.  Any
person  dealing  with the  Company,  the  Officers or any Member may rely upon a
certificate signed by the Secretary of the Company as to (i) the identity of the
Officers or Members;  (ii) any  factual  matters  relevant to the affairs of the
Company;  (iii) the  persons  who are  authorized  to execute  and  deliver  any
document on behalf of the  Company;  or (iv) any action  taken or omitted by the
Company, the Officers or any Member.

            I.5... No EmploymentNo  Employment.  This Agreement does not, and is
not intended to,  confer upon any  Management  Member any rights with respect to
continuance of employment by the Company, and nothing herein should be construed
to have created any employment agreement with any Management Member.


                                       INDEMNIFICATIONICATION

            II.1.. Right to IndemnificationRight  to Indemnification.  Except as
limited by law and subject to the provisions of this Article,  the Company shall
indemnify each  Indemnified  Party from and against any and all Losses  asserted
against,  imposed on or  incurred by such Person at any time as a result of such
Person's  capacity as a Member,  Officer,  employee or  Liquidating  Trustee (or
Affiliate or agent if designated as an Indemnified  Party),  including,  without
limitation,  in  connection  with  the  actions  or  inactions  of  such  Person
hereunder; provided, however, that no such indemnification shall be provided for
any  Indemnified  Party  regarding  any  matter as to which it shall be  finally
determined  that such  Indemnified  Party  did not act in good  faith and in the
reasonable  belief that its action was in the best interests of the Company,  or
with respect to a criminal matter,  that it had reasonable cause to believe that
its  conduct was  unlawful,  and in the  discretion  of the  Members,  acting by
Membership  Approval,  the  Company  shall  not be  obligated  to  indemnify  an
Indemnified  Party if the  Losses  were the result of such  Indemnified  Party's
gross negligence, willful malfeasance or fraud in the conduct of his, her or its
office or actions not taken in good faith by such Indemnified  Party.  Except as
limited by law, such indemnification may be provided by the Company with respect
to Losses in  connection  with which it is claimed that such  Indemnified  Party
received an improper  personal benefit by reason of its position,  regardless of
whether  the  claim  arises  out of the  Indemnified  Party's  service  in  such
capacity,  except  for  matters  as to which it is  finally  determined  that an
improper   personal  benefit  was  received  by  such  Indemnified   Party.  The
indemnification  contained in this Article V shall survive  termination  of this
Agreement.

            II.2.. Notice; Defense of ClaimsNotice; Defense of Claims.

 ..................(a)  Promptly after receipt by an Indemnified  Party of notice
of any Losses to which the indemnification obligations set forth in Section 5.01
would apply,  the Indemnified  Party shall give notice thereof in writing to the
Company, but the omission to so notify the Company promptly will not relieve the
Company from any liability except to the extent that the Company shall have been
prejudiced  as a result of the  failure  or delay in giving  such  notice.  Such
notice shall state in reasonable detail the information then available regarding
the amount and nature of such Losses.

 ..................(b) If within twenty (20) days after receiving such notice the
Company gives written notice to the Indemnified Party stating that it intends to
defend  against  such Losses at its own cost and  expense,  then counsel for the
defense  shall  be  selected  by the  Company  (subject  to the  consent  of the
Indemnified  Party, which consent shall not be unreasonably  withheld),  and the
Indemnified Party shall not be required to make any payment with respect to such
Losses as long as the Company is conducting a good faith and diligent defense at
its own expense;  provided,  however, that the assumption of defense of any such
matters by the  Company  shall  relate  solely to the Losses that are subject or
potentially subject to  indemnification.  The Company shall have the right, with
the consent of the  Indemnified  Party,  which consent shall not be unreasonably
withheld, to settle all indemnifiable matters related to claims by third parties
which are  susceptible to being settled,  so long as its obligation to indemnify
the Indemnified Party therefor will be fully satisfied;  provided, however, that
in the event any such third party has agreed with Company on the  settlement  of
any such matter by the payment of a specified amount of monetary damages and the
Indemnified Party objects to such specified  amount,  then the Indemnified Party
must thereupon  assume the defense of such matter,  at the  Indemnified  Party's
expense and risk (including,  without limitation,  the cost and expense incurred
by the Company in  continuing  the defense of such  matter),  and the  Company's
obligations to indemnify the Indemnified  Party with respect only to such matter
shall be limited solely to the payment by the Company of such  specified  amount
of monetary  damages.  The Company shall keep the Indemnified  Party apprised of
the status of the Losses, shall furnish the Indemnified Party with all documents
and information that the Indemnified  Party shall  reasonably  request and shall
consult with the Indemnified  Party prior to acting on major matters,  including
settlement discussions.  Notwithstanding anything herein stated to the contrary,
the Indemnified  Party shall at all times have the right to participate fully in
such defense at its own expense, directly or through counsel; provided, however,
if the named  parties to any action or  proceeding  include both the Company and
the  Indemnified  Party and  representation  of both parties by the same counsel
would be inappropriate under applicable  standards of professional  conduct, the
expense of  separate  counsel  for the  Indemnified  Party  shall be paid by the
Company.  If no such  notice  of intent to  dispute  and  defend is given by the
Company,  or if such  diligent  good faith  defense is not being or ceases to be
conducted, the Indemnified Party shall, at the expense of the Company, undertake
the defense of (with counsel selected by the Indemnified  Party), and shall have
the right to compromise or settle (exercising reasonable business judgment) such
Losses with the consent of the Company,  which consent shall not be unreasonably
withheld.  If such Losses are such that by their  nature they cannot be defended
solely by the  Company,  then the  Indemnified  Party shall make  available  all
information  and assistance  that the Company may  reasonably  request and shall
cooperate with the Company in such defense.

            II.3..  Award  of  IndemnificationAward   of  Indemnification.   Any
discretionary  determination  required  to be made  hereunder  by the Company in
connection with its  indemnification  obligations shall be made in each instance
by the Members,  acting by Membership Approval.  The Company shall be obliged to
pay  indemnification  applied for by any  Indemnified  Party  unless there is an
adverse  determination (as provided above) within forty-five (45) days after the
application. If indemnification is denied, the applicant may seek an independent
determination of its right to indemnification by a court, and in such event, the
Company shall have the burden of proving that the applicant was  ineligible  for
indemnification under this Article.

            II.4..  Successful  DefenseSuccessful  Defense.  Notwithstanding any
contrary  provisions of this Article,  if any Indemnified  Party has been wholly
successful  on the merits in the defense of any action,  suit or  proceeding  in
which it was involved by reason of its position  with the Company or as a result
of serving in such capacity  (including  termination of  investigative  or other
proceedings  without a finding of fault on the part of such Indemnified  Party),
such  Indemnified  Party shall be indemnified by the Company  against all Losses
incurred by such Indemnified Party in connection therewith.

            II.5.. Advance PaymentsAdvance  Payments.  Except as limited by law,
Losses  incurred  by an  Indemnified  Party in  defending  any  action,  suit or
proceeding,  including a proceeding by or in the right of the Company,  shall be
paid by the Company to such Indemnified Party in advance of final disposition of
the proceeding  upon receipt of its written  undertaking to repay such amount if
such Indemnified Party is determined  pursuant to this Article or adjudicated to
be  ineligible  for  indemnification,  which  undertaking  shall be an unlimited
general obligation but need not be secured and may be accepted without regard to
the financial  ability of such  Indemnified  Party to make repayment;  provided,
however,  that  no  such  advance  payment  of  Losses  shall  be  made if it is
determined pursuant to this Article V on the basis of the circumstances known at
the  time  (without  further  investigation)  that  such  Indemnified  Party  is
ineligible for indemnification.

            II.6.. InsuranceInsurance.  The Company shall have power to purchase
and maintain  insurance on behalf of any Indemnified Party against any liability
or cost  incurred  by such  Person in any such  capacity  or arising  out of its
status as such, whether or not the Company would have power to indemnify against
such liability or cost.

            II.7..  Employee Benefit  PlanEmployee  Benefit Plan. If the Company
sponsors or  undertakes  any  responsibility  as a fiduciary  with respect to an
employee  benefit  plan,  then for  purposes of this  Article  (i)  "Indemnified
Parties"  shall be deemed to include  the Officer or employee of the Company who
serves at  its/his/her  request in any capacity with respect to said plan,  (ii)
the Officer or employee  shall not be deemed to have failed to act in good faith
or in the  reasonable  belief that its action was in the best  interests  of the
Company if such  Officer or employee  acted in good faith and in the  reasonable
belief  that  its  action  was in the  best  interests  of the  participants  or
beneficiaries  of said plan and (iii)  "Losses"  shall be deemed to include  any
taxes or penalties imposed upon such Indemnified Party with respect to said plan
under applicable law.

            II.8..   Heirs  and  Personal   RepresentativesHeirs   and  Personal
Representatives. The indemnification provided by this Article shall inure to the
benefit of the heirs and personal representatives, in their capacity as such, of
the Indemnified Parties.

            II.9..   Non-ExclusivityNon-Exclusivity.   The  provisions  of  this
Article  shall not be  construed  to limit the power of the Company to indemnify
its Members,  Officers,  employees or agents to the fullest extent  permitted by
law or to enter  into  specific  agreements,  commitments  or  arrangements  for
indemnification  permitted  by law.  The  absence of any express  provision  for
indemnification  herein  shall not limit any right of  indemnification  existing
independently of this Article.

            II.10.  AmendmentAmendment.  The  provisions  of this Article may be
amended or repealed in accordance  with Section  11.05;  provided,  however,  no
amendment or repeal of such provisions that adversely  affects the rights of the
Members  under this  Article  with  respect to its acts or omissions at any time
prior to such  amendment or repeal,  shall apply to any Member without its prior
consent.

            II.11. Acknowledgment of Indemnification AssumptionAcknowledgment of
Indemnification   Assumption.  Each  of  the  Members  and  the  Company  hereby
acknowledge that the Company has assumed all indemnification  obligations of the
Partnership  under and  pursuant  to Section  9.6 of the  Amended  and  Restated
Agreement  of Limited  Partnership  of the  Partnership  dated  effective  as of
December 31, 1995,  for acts or omissions with respect to any and all matters up
through July 1, 1996, and for all acts or omissions  after such date relating to
certain  sub-advisor  agreements  pursuant  to which the  Partnership  serves as
sub-advisor to Citizens Investment Trust in connection with the following mutual
funds: the Working Assets Money Market Portfolio, the Citizens Income Portfolio,
the Citizens Emerging Growth Portfolio,  the E Fund and the California  Tax-Free
Income Portfolio.


                       CONFLICTS OF INTERESTS OF INTEREST

            III.1.   Transactions  with  Interested   PersonsTransactions   with
Interested  Persons.  Unless  entered  into in bad faith or in violation of this
Agreement, no contract or transaction between the Company and one or more of its
Members or other  Indemnified  Parties,  or between  the  Company  and any other
Person in which one or more of its  Members or other  Indemnified  Parties has a
financial  interest  or is a  director,  manager or  officer,  shall be voidable
solely for this reason if such contract or transaction is fair and reasonable to
the  Company;  and no  Member  or other  Indemnified  Party  interested  in such
contract  or  transaction,  because  of such  interest,  shall be  liable to the
Company or to any other Person or organization  for any loss or expense incurred
by reason of such contract or transaction  or shall be accountable  for any gain
or profit realized from such contract or transaction.

            III.2.  ConflictsConflicts.   Unless  otherwise  expressly  provided
herein,  (i)  whenever a  conflict  of  interest  exists or arises  between  the
Company,  its Members and/or the other Indemnified Parties or (ii) whenever this
Agreement or any other  agreement  contemplated  herein  provides  that any such
Person  shall act in a manner  that is, or  provides  terms  that are,  fair and
reasonable to the Company or any Member, such Person shall resolve such conflict
of interest,  taking such action or providing  such terms,  considering  in each
case the relative  interest of each party  (including  its own interest) to such
conflict,  agreement,  transaction  or  situation  and the  benefits and burdens
relating to such interests,  any customary or acceptable industry practices, and
any applicable generally acceptable  accounting practices or principles.  In the
absence of bad faith by the Member or other  Indemnified  Party, as the case may
be, the  resolution,  action or term so made,  taken or  provided by such Person
shall  not  constitute  a  breach  of  this  Agreement  or any  other  agreement
contemplated  herein or of any duty or  obligation  of such  Person at law or in
equity or otherwise.


                                       IV   - CAPITAL CONTRIBUTIONS;
ACCOUNTS AND                           CAPITAL CONTRIBUTIONS;     ACCOUNTS AND
------------                           -----------------------    ------------
            ......             ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS
                        ----------------------------------------------

            IV.1.. Capital ContributionsCapital Contributions.

 ..................(a)    Prior to the  effectiveness  of this  Agreement,  the
Members have made the Capital  Contributions to the Company in the amounts set
forth on the Share Schedule  attached hereto as Schedule A with respect to the
Class A  Shares  and the  Class B  Shares  held  by the  Members.  No  Capital
Contributions  were made by the Members in connection with the issuance of the
Equity  Bonus  Shares  pursuant  hereto.  Except  (i) as  may be  agreed to in
connection  with the issuance of additional  Shares or (ii) as may be required
under  applicable law or this Agreement,  the Members shall not be required to
make any further Capital  Contributions  to the Company.  No Member shall make
any Capital  Contribution  to the Company  without  prior  Special  Membership
Approval,  except  as  otherwise  provided  in  Section  7.02(d)  and  Section
4.12(h).  The Share  Schedule  shall be amended by the  Company to reflect any
Capital Contribution made after the Effective Date of this Agreement.

 ..................(b)    No Member  shall have the right to withdraw  any part
of its (or  its  predecessors-in-interest)  Capital  Contributions  until  the
dissolution  and winding up of the Company  pursuant to Article X hereof,  the
forfeiture  of Shares  pursuant to Section  9.02 hereof or the  repurchase  of
Shares pursuant to Section 9.03 hereof upon the death of a Management  Member,
except as distributions  pursuant to this Article VII may represent returns of
capital,  in whole or in part.  No Member  shall be  entitled  to receive  any
interest    on   any    Capital    Contribution    made    by   it   (or   its
predecessors-in-interest)  to the  Company.  No Member shall have any personal
liability for the repayment of any Capital Contribution of any other Member.

            IV.2.. General Capital AccountsGeneral Capital Accounts. There shall
be  established  for each  Member  holding  Class A  Shares  or Class B Shares a
capital account (with respect to any such Member, a "General Capital  Account").
As of the Effective Date, the initial balance of the General Capital Accounts of
the  Members  shall be  determined  as  follows:  (i) in the case of the Phoenix
Members, the aggregate balance of their General Capital Accounts with respect to
the Class B Shares  shall equal the product of the  Phoenix  Percentage  and the
Initial  Enterprise Value as of the Effective Date,  allocated among the Phoenix
Members as indicated on the Share  Schedule  attached  hereto as Schedule A, and
(ii) in the case of the  Management  Members,  the  aggregate  balance  of their
General  Capital  Accounts  with  respect to the Class A Shares  shall equal the
difference between (A) the product of the Management  Percentage and the Initial
Enterprise  Value  as of the  Effective  Date  and (B) the  Total  Equity  Bonus
Payments as of the Effective  Date,  allocated  among the Management  Members as
indicated on the Share  Schedule  attached  hereto as Schedule A. In the case of
each New Member,  the General Capital Account of such New Member shall initially
be equal to the Capital Contribution of such Member (in the event of an issuance
by the Company) or the General Capital Account of the Transferor with respect to
the Shares  Transferred  (in the event of a Transfer  of Shares) as set forth on
the Share Schedule,  as amended pursuant to Section 7.01(a).  Except as provided
otherwise in this Article VII,  General Capital  Accounts shall be maintained in
accordance   with   the   requirements   of   Treasury    Regulations    Section
1.704-1(b)(2)(iv).

 ..................(a)    Adjustments.  The  General  Capital  Account  of each
Member shall be adjusted in the following manner:

                        (i)    On the  Effective  Date,  each General  Capital
Account  with  respect to the Class B Shares  shall be increased by such Phoenix
Member's pro rata share of the Total Equity Bonus  Payments as of the  Effective
Date.

                        (ii)   Each   General   Capital   Account   shall   be
increased by such Member's  allocable share of Net Income and Net Property Gain,
if any, of the Company in  accordance  with Section 7.04 (as well as any Capital
Contributions  made by such  Member  after  the  Effective  Date)  and  shall be
decreased by such Member's  allocable  share of Net Loss,  Net Property Loss and
any deduction made pursuant to Section  7.04(c)  hereof,  if any, of the Company
and by the amount of all distributions made to such Member.

                        (iii)  Immediately  preceding  the  effective  date of
any Book Event (determined in accordance with Section  7.04(d)(1)  hereof),  the
book value of the Company  property  shall be adjusted  (upward or downward,  as
applicable)  to its fair market value at that time,  which shall be deemed to be
equal  to the  product  of three  and one  half  (3.5)  and the  Management  Fee
Measurement Amount at the time of such Book Event, determined in accordance with
Section 7.04(d)(1) hereof).  Each General Capital Account of a Member shall also
be adjusted (upward or downward,  as applicable) in the manner and to the extent
it would be adjusted if the Company property were sold as of such Book Event for
its fair market value (determined in accordance with the foregoing sentence) and
the net gain or net loss,  as  applicable,  resulting  from such  deemed sale of
assets were "Net  Property  Gain" or "Net  Property  Loss," as  applicable,  and
allocated pursuant to Section 7.04(b) of this Agreement.

                        (iv)   The amount of any  distribution of assets other
than cash shall be deemed to be the Fair Market Value of such assets (net of any
liabilities  encumbering such property that the distributee Member is considered
to assume or take subject to).

 ..................(b)    Forfeiture.   In  the  event  of  a   forfeiture   of
unvested Class A Shares by a Management  Member upon certain  terminations  of
employment of such  Management  Member  pursuant to Section 9.02 hereof,  such
Management  Member shall be deemed to have  forfeited  that portion of its net
General  Capital  Account with respect to the Class A Shares (after the return
of Capital  Contributions)  equal to the  product  of (i) the  balance of such
Management  Member's  General  Capital  Account  with  respect  to the Class A
Shares at the time of such  forfeiture  (determined in accordance with Section
7.04(d)(1)  hereof) and (ii) a fraction,  the numerator of which is the number
of  unvested  Class A Shares  held by such  Management  Member  that are being
forfeited in accordance  with the terms of this Agreement and the  denominator
of which is the total number of Class A Shares held by such Management  Member
immediately  prior  to the time of such  forfeiture.  An  amount  equal to the
forfeited  portion of any Management  Member's  General  Capital  Account with
respect  to the  Class A Shares  shall be  allocated  to the  General  Capital
Accounts  with  respect  to the  Class A Shares  of the  remaining  Management
Members in proportion to their holdings of Class A Shares.

 ..................(c)  Transfer of Shares.  Upon a Transfer of Class A Shares or
Class B Shares by any Member in  accordance  with the terms and  conditions  set
forth in this  Agreement  (other  than a Transfer  pursuant  to Section  8.01(d)
hereof),  the  Transferee  of such Shares  shall  succeed to that portion of the
Transferor's  General  Capital Account with respect to such Shares that is equal
to the product of (i) such Transferor's  General Capital Account with respect to
the  Class A  Shares  or  Class B  Shares,  as  applicable,  at the time of such
Transfer  (determined in accordance with Section  7.04(d)(1)  hereof) and (ii) a
fraction,  the  numerator  of which is the  number  of Class A Shares or Class B
Shares,  as applicable,  Transferred by such Member and the denominator of which
is the total number of Class A Shares or Class B Shares,  respectively,  held by
such Member  immediately  prior to the time of such Transfer.  In the event such
Transferee was a Member prior to such Transfer,  the portion of the Transferor's
General Capital Account to which the Transferee  succeeded pursuant hereto shall
be added to the General  Capital  Account of the Transferee  with respect to the
class of Shares Transferred. In the event such Transferee was not a Member prior
to such  Transfer,  there shall be  established  for such  Transferee  a General
Capital  Account  which,  as of the  effective  date  of  such  Transfer,  shall
initially be equal to the portion of the Transferor's General Capital Account to
which the Transferee succeeded pursuant hereto.

 ..................(d)    Adjustments  with  respect  to  Additional  Purchase
Price Paid.  Upon any payment by PDP of the  Additional  Purchase  Price Paid,
the General  Capital  Accounts of the Members  shall be  increased as follows:
(i) the General  Capital  Accounts with respect to the Class B Shares shall be
increased  proportionately  among the Class B Shares held by the Members in an
aggregate  amount equal to the sum of (x) the  Additional  Purchase Price Paid
and (y) the Total  Equity  Bonus  Payments  after  payment  of the  Additional
Purchase  Price  Paid,  minus  the  Total  Equity  Bonus  Payments  as of  the
Effective  Date,  and (ii) the General  Capital  Accounts  with respect to the
Class A Shares shall be increased  proportionately  among the General  Capital
Accounts of the  Management  Members as of the Effective  Date in an aggregate
amount  equal  to the  product  of (x) the  Additional  Purchase  Price  Paid,
divided by the Phoenix  Percentage  and (y) seven and three  quarters  percent
(7.75%).

            IV.3.. Equity Bonus  AccountsEquity  Bonus Accounts.  There shall be
established  for  each  Member  holding  Equity  Bonus  Shares  an  account  for
bookkeeping  purposes  only (with  respect to any such Member,  an "Equity Bonus
Account").  The value of the Equity Bonus Account of any Member  holding  Equity
Bonus Shares shall be equal to such Member's  Equity Bonus Payment,  as adjusted
from time to time in accordance with Section 4.12 hereof, and shall be decreased
proportionately by the amount of any Equity Bonus Payment paid by the Company or
forfeited by such Member.  The value of the Equity Bonus Accounts of the Members
as of the Effective Date is set forth on the Share Schedule  attached  hereto as
Schedule  A. All Equity  Bonus  Payments  shall be treated  for all  purposes as
deferred  compensation  (subject to forfeiture as  contemplated  in Section 9.02
hereof) and not as distributions of capital or profits of the Company. No Person
shall be a "Member" of the Company by virtue of (or in any way with  respect to)
the ownership of Equity Bonus Shares or any interest in an Equity Bonus Account.

            IV.4.. General AllocationsGeneral  Allocations. For purposes of this
Article VII except to the extent otherwise  provided herein,  all allocations in
proportion to the Shares of a Member shall be determined  upon the occurrence of
any Book  Event on the basis of the  Shares  held at the time of such Book Event
(determined in accordance with Section 7.04(d)(1) hereof).

 ..................(a)    Net  Income and Net Loss  shall be  allocated  to the
General  Capital  Accounts of the Members as follows:  (i) an amount  equal to
the  Management  Percentage of such Net Income and Net Loss shall be allocated
to the Members in  proportion to their Class A Shares and (ii) an amount equal
to the  Phoenix  Percentage  of each  such Net  Income  and Net Loss  shall be
allocated to the Members in proportion to their Class B Shares.

 ..................(b)    With  respect to Net  Property  Loss and Net Property
Gain:

                        (i)    Net  Property  Loss shall be  allocated  to the
Members as follows:

            ...... (A) first, in the event that Net Property Gain has previously
been allocated to the Members pursuant to Section 7.04(b)(ii)(B) with respect to
any Fiscal Year,  then Net Property Loss for such Fiscal Year in an amount equal
to the difference,  if any,  between (X) the aggregate amount of such previously
allocated Net Property  Gain and (Y) the  aggregate  amount of Net Property Loss
previously allocated pursuant to this Section 7.04(b)(i)(A) for all prior Fiscal
Years shall be allocated among the General Capital Accounts in the same ratio as
all prior Net Property Gain in the aggregate for all Fiscal Years was originally
allocated pursuant to Section 7.04(b)(ii)(B) hereof; and

            ......  (B)  second,  an  amount  equal to the  difference,  if any,
between the aggregate Net Property Loss to be allocated pursuant to this Section
7.04(b) and the Net Property Loss  allocated  pursuant to Section  7.04(b)(i)(A)
shall be allocated to the General Capital  Accounts of the Members in proportion
to their General Capital Accounts.


                        (ii)   Net  Property  Gain shall be  allocated  to the
Members as follows:

                              (A)    first,  Net  Property  Gain in an  amount
equal to the excess,  if any, of (x) the  aggregate  amount of Net Property Loss
previously  allocated to the General Capital Accounts of the Members pursuant to
Section  7.04(b)(i)(B)  over  (y) the  aggregate  amount  of Net  Property  Gain
allocated to the Members pursuant to this Section 7.04(b)(ii)(A),  for all prior
Fiscal  Years (such  excess,  the  "Unrecovered  Net  Property  Loss")  shall be
allocated  among  the  General  Capital  Accounts  in the  same  ratio  as  such
Unrecovered  Net  Property  Loss was  originally  allocated  pursuant to Section
7.04(b)(i)(B) hereof; and

                              (B)    second,    an   amount   equal   to   the
Management  Percentage  of the  difference,  if any,  between the  aggregate Net
Property  Gain  to be  allocated  pursuant  to  this  Section  7.04(b)  and  the
Unrecovered  Net Property  Loss (the  "Remaining  Net  Property  Gain") shall be
allocated to the Members  holding  Class A Shares in proportion to their Class A
Shares,  and an amount  equal to the Phoenix  Percentage  of the  Remaining  Net
Property Gain shall be allocated to the General Capital  Accounts of the Members
holding Class B Shares in proportion to their Class B Shares.

 ..................(c)  All items of Company deduction arising in connection with
any Equity  Bonus  Payment  (other than payment of the  Repurchase  Price by the
Company upon the death of any Management Member pursuant to Section 9.03 hereof)
shall be allocated in their entirety solely to the General Capital Accounts with
respect  to the Class B Shares of the  Phoenix  Members in  proportion  to their
Class B Shares.

 ..................(d) In the event that during any calendar month (or any Fiscal
Year)  there  is a Book  Event  (other  than  pursuant  to  clause  (ix)  of the
definition  thereof),  the following shall apply: (1) such event shall be deemed
to have occurred as of the end of the last day of the calendar month immediately
preceding  such event (or if such event occurs as of the last  business day of a
month, then such event shall be deemed to occur as of the end of the last day of
the calendar month in which such event occurs);  (2) the books of account of the
Company  shall be  closed  effective  as of the  close of  business  on (or most
immediately  preceding)  the  effective  date of any such  event as set forth in
clause (1) and such  Fiscal  Year shall  thereupon  be divided  into two or more
portions;  (3) each item of income, gain, loss and deduction shall be determined
(on a closing of the books  basis) for the  portion of such  Fiscal  Year ending
with the date on which the books of account of the  Company  are so closed;  and
(4) each such item for such  portion  of such  Fiscal  Year  shall be  allocated
pursuant to the provisions of this Article VII to those persons who were Members
during such portion of such Fiscal Year based on their  respective  Shares as of
the end of each such period.

            IV.5.. Tax Allocations.Tax Allocations. For federal, state and local
income tax purposes,  each item of income,  gain, loss,  deduction and credit of
the Company  shall be  allocated  among the Members as nearly as possible in the
same  manner as the  corresponding  item of  income,  gain,  loss or  expense is
allocated  pursuant to Section 7.04 hereof. In accordance with Section 704(c) of
the  Code  and the  Treasury  Regulations  thereunder,  income,  gain,  loss and
deduction with respect to any property contributed to the capital of the Company
shall,  solely for tax  purposes,  be allocated  among the Members so as to take
account of any  variation  between the  adjusted  basis of such  property to the
Company for federal  income tax purposes and its initial fair market  value.  In
the event the fair market value of any asset of the Company is adjusted pursuant
to Section 7.02(a)(iii) hereof, subsequent allocations of income, gain, loss and
deductions  with  respect to such  asset  shall  take  account of any  variation
between the adjusted basis of such asset for federal income tax purposes and its
fair market value in the same manner as under Section 704(c) of the Code and the
Treasury  Regulations  thereunder.  Any elections or other decisions relating to
such  allocations  shall be made by the Tax  Matters  Partner in any manner that
reasonably  reflects the purpose and  intention of this  Agreement.  Allocations
pursuant to this  Section  7.05 are solely for  purposes  of federal,  state and
local  taxes  and shall  not  affect,  or in any way be taken  into  account  in
computing,  any Member's  General Capital  Account or share of profits,  losses,
other items, or distributions pursuant to any provisions of this Agreement.

            IV.6.. Distributions.Distributions.

 ..................(a)  Subject to Section  7.07  hereof,  the Company  shall (i)
within  ninety (90) days after the close of each Fiscal Year (unless the Company
otherwise  determines  in  good  faith)  make  distributions  of not  less  than
eighty-five  percent (85%) of the cash available  therefor (after payment of all
expenses of the Company including without  limitation any Equity Bonus Payments,
payment of principal and interest on any  indebtedness of the Company,  payments
in connection with  withdrawals  from the Company and the  establishment of such
reserves  as may be  necessary  or  appropriate)  ("Distributable  Cash") to the
Members,  (ii) at such times and in such  amounts as the Company may  reasonably
and in good faith determine,  make distributions of any additional Distributable
Cash to the Members  and (iii) at such times and in such  amounts as the Company
may reasonably and in good faith determine,  make distributions of any remaining
cash available for distribution to the Members, in each case, as follows: (x) an
amount  equal  to the  Management  Percentage  of  such  Distributable  Cash  or
remaining  cash, as the case may be, shall be distributed to the Members holding
Class A Shares in  proportion to their Class A Shares and (y) an amount equal to
the Phoenix Percentage of such Distributable Cash or remaining cash, as the case
may be, shall be distributed to the Members holding Class B Shares in proportion
to their Class B Shares.

 ..................(b)  Subject to Section 7.07 hereof, upon the occurrence of an
Extraordinary  Event, the Company shall (i) as soon as practicable after receipt
thereof,  make  distributions of not less than eighty-five  percent (85%) of the
Distributable  Cash  available,  (ii) at such  times and in such  amounts as the
Company may reasonably and in good faith  determine,  make  distributions of any
additional Distributable Cash to the Members and (iii) at such times and in such
amounts  as the  Company  may  reasonably  and in  good  faith  determine,  make
distributions  of any remaining cash available for  distribution to the Members,
in each case, in proportion to their General Capital Accounts.

 ..................(c)  In the event  that  Members  cease to be  Members  or New
Members are admitted,  at any time other than at the beginning of a Fiscal Year,
the  Company  shall,  in  good  faith,  make  appropriate   adjustments  to  the
distributions  provided  in  paragraphs  (a)  and  (b) to  reflect  the  varying
interests of the Members during the Fiscal Year.

 ..................(d)  Notwithstanding  any other  provision of this  Agreement,
neither the Company, nor any other Person on behalf of the Company, shall make a
distribution to any Member on account of its Shares if such  distribution  would
violate the Act or other applicable law.

            IV.7.. Distributions Upon Dissolution; Establishment of Reserve Upon
DissolutionDistributions   Upon  Dissolution;   Establishment  of  Reserve  Upon
Dissolution.  Upon the dissolution of the Company,  after payment (or the making
of reasonable provision for the payment) of all liabilities of the Company owing
to creditors and any  guaranteed  payments  (including  without  limitation  any
Equity Bonus  Payments),  the Liquidating  Trustee shall set up such reserves as
he, she or it deems  reasonably  necessary for any  contingent,  conditional  or
unmatured  liabilities  or  other  obligations  of the  Company,  including  any
guaranteed  payments.  Such reserves may be paid over by the Liquidating Trustee
to a bank (or other third party), to be held in escrow for the purpose of paying
any such contingent,  conditional or unmatured liabilities or other obligations.
At the  expiration  of  such  period(s)  as the  Liquidating  Trustee  may  deem
advisable,   such  reserves,   if  any  (and  any  other  assets  available  for
distribution),  or a portion thereof, shall be distributed to the Members in the
manner  contemplated in Section 7.06(b) hereof. If any assets of the Company are
to be distributed in kind in connection with such liquidation, such assets shall
be  distributed  on the basis of their Fair Market Value net of any  liabilities
encumbering  such  assets  and,  to  the  greatest  extent  possible,  shall  be
distributed  pro rata in accordance  with the total amounts to be distributed to
each   Member.   Immediately   prior   to  the   effectiveness   of   any   such
distribution-in-kind, each item of gain and loss that would have been recognized
by the Company had the property being distributed been sold at Fair Market Value
shall be determined and allocated to those persons who were Members  immediately
prior to the  effectiveness  of such  distribution  in  accordance  with Section
7.06(b) hereof.

            IV.8..  Tax  WithholdingTax  Withholding.  The Company may  withhold
taxes from distributions to any Member to the extent required by applicable law.
For purposes of this  Agreement,  any amount of taxes required to be withheld by
the Company with respect to any Member's interest in the Company shall be deemed
to be a  distribution  or  payment to such  Member  and shall  reduce the amount
otherwise  distributable to such Member pursuant to this Agreement.  The Company
may at any time request that a Member submit  appropriate  certifications of its
tax status so as to avoid otherwise applicable withholding requirements.

            IV.9.. No Deficit  Restoration by MembersNo  Deficit  Restoration by
Members.  No Member  shall be required to  contribute  capital to the Company to
restore a deficit  balance in its General  Capital  Account upon  liquidation or
otherwise,  except  for  an  excess  distribution  to  the  extent  such  excess
distribution was the result of a clerical or other similar error.

            IV.10. Tax Matters PartnerTax Matters Partner.

 ..................(a)    PDP shall serve as the initial "Tax Matters  Partner"
of  the  Company  for  purposes  of  Section   6231(a)(7)   of  the  Code  and
corresponding  provisions  of any  applicable  state  tax law.  PDP may at any
time hereafter,  upon five (5) days prior written notice to the other Members,
designate  a new  Tax  Matters  Partner,  which  may be an  Affiliate  of PDP;
provided,  however,  that only a Member may be  designated  as the Tax Matters
Partner of the Company.  Each Member hereby  consents to PDP's  designation of
any such Member as Tax Matters  Partner.  The Tax Matters  Partner  shall have
all the powers and duties  assigned  thereto under  Sections  6221-6232 of the
Code and the Treasury  Regulations  thereunder,  provided that the Tax Matters
Partner  shall not take or  initiate  any action or  proceeding  in any court,
extend
       any statute of  limitations,  or take any other  action  contemplated  by
Sections  6222 through 6232 of the Code that would legally bind any other Member
of the Company or make any material election, report or filing without notice to
the Members.  The Members agree to perform all acts necessary under Section 6231
of the Code and the Treasury  Regulations  thereunder  to designate  PDP (or any
other Member designated by PDP) as Tax Matters Partner. With respect to federal,
state and local tax matters, the Tax Matters Partner shall have the authority to
act,  elect,  report and  exercise  its  discretion  with respect to Company tax
matters  only with notice to each  Member.  Any action  taken by the Tax Matters
Partner  pursuant  hereto or in accordance  with its power to make  allocations,
elections and other tax decisions under Sections 7.05, 7.12, 7.13 or 7.14 hereof
shall be made as a fiduciary for the interest of all Members notwithstanding any
other provision contained herein.

 ..................(b)  The Tax  Matters  Partner  shall,  at the  expense of the
Company,  cause to be  prepared  and filed all tax  returns  (including  amended
returns)  required to be filed by the Company  and such  preparation  and filing
shall be made as a fiduciary for the interest of all Members notwithstanding any
other provision contained herein.

 ..................(c)    The Tax Matters  Partner shall  promptly  furnish the
Secretary  of the  Treasury,  or his  delegate,  the name and  address of each
Member and any other  required  information  in a manner  that  entitles  such
Member to notice with respect to administrative
       proceedings  involving the Company under Section  6223(a) of the Code and
shall provide  similar  information to any foreign or state tax authority if and
to the extent  required or  permitted so as to provide  similar  benefits to the
Members  under any  provision  of  foreign  or state law or with  respect to the
administrative practice of any such tax authority.

            IV.11.   Aggregate   PaymentsAggregate   Payments.   Notwithstanding
anything  contained  in this  Agreement  or in the  Put/Call  Agreements  to the
contrary,  it is acknowledged and agreed by all Members  (including New Members)
that in no event shall PDP be required to pay in the  aggregate  with respect to
its purchase of all the Class A Shares  pursuant to the Put/Call  Agreements and
the payment of all Equity Bonus Payments,  whether directly or indirectly to the
Management  Members or indirectly  through one or more Capital  Contributions to
the Company under Section 4.12(h) hereof,  an amount in excess of the sum of the
products,  as of each date upon which a put option or call  option is  exercised
thereunder,  of (i) the Fair  Market  Value of the  Company  (as  defined in the
Put/Call  Agreements)  determined  for  purposes of such  exercise  and (ii) the
Management Percentage and (iii) a fraction,  the numerator of which is the total
number of Class A Shares being put or called,  as  applicable,  on such date and
the  denominator of which is the sum of the number of Class A Shares held by all
of the  Management  Members on the  Effective  Date and the number of additional
Class A Shares  authorized by the Company for issuance after the Effective Date.
PDP hereby  acknowledges and agrees that the aggregate of all Holder's  Put/Call
Prices  (as  defined in the  Put/Call  Agreements)  with  respect to all Class A
Shares plus the aggregate  payment by PDP of all Equity Bonus Payments,  whether
directly or indirectly to the  Management  Members or indirectly  through one or
more Capital  Contributions  to the Company under Section 4.12(h) hereof,  shall
equal the sum of the products set forth in the preceding sentence.  In the event
that the Holders' Put/Call Prices (as defined in the Put/Call  Agreements) under
the Put/Call Agreements would give rise to a final payment by PDP such that such
final payment,  together with all prior payments by PDP of the Holders' Put/Call
Price  under the  Put/Call  Agreements  and all  payments  by PDP,  directly  or
indirectly,  of Equity Bonus Payments would in the aggregate  exceed the payment
contemplated  by this Section  7.11,  an equitable  adjustment  shall be made to
payments  under the Put/Call  Agreements to reduce all such payments  (including
prior  payments) to the amount  determined  under this Section  7.11;  provided,
however,  that such adjustment shall require prior Special  Membership  Approval
(which shall not be unreasonably withheld);  provided, further, however, that in
the event such adjustment does not receive Special Membership  Approval prior to
the date  payment  would  otherwise be due under the  Put/Call  Agreements,  the
amount  of such  adjustment  shall be  submitted  to  "Neutral  Accountants"  as
contemplated  by  the  procedures  set  forth  in  Section  4  of  the  Put/Call
Agreements, with the resulting determination being binding upon all parties; and
upon   determination  of  the  aggregate   adjustment   amount  by  the  Neutral
Accountants,  PDP may deposit, in an  interest-bearing  segregated account (in a
bank in San Francisco,  California  having a combined  capital and surplus of at
least $50 million) for the benefit of all  Management  Members  holding  Class A
Shares,  an  amount  equal  to the  unpaid  portion  of the  aggregate  payments
contemplated  by this  Section  7.11,  whereupon  PDP  shall be  deemed  to have
acquired all the remaining Class A Shares held by all of the Management Members.
The  allocation  of  such  equitable  adjustment  and  such  deposit  among  the
Management Members shall be determined  promptly (and in any event within thirty
(30) days) by a vote of two-thirds (in interest) of such Management Members and,
if not so determined  within such period,  then promptly in accordance  with the
procedures for employing "Neutral  Accountants" as set forth in Section 4 of the
Put/Call  Agreements,  with the  resulting  resolution  being  binding  upon all
parties.

            IV.12. Special  AllocationsSpecial   Allocations.   The  following
special allocations shall be made in the following order:

 ..................(a)    LLC  Minimum  Gain  Chargeback.  Notwithstanding  any
other  provision  of this Article VII, in the event there is a net decrease in
LLC Minimum Gain during any Fiscal Year, the Members shall be allocated  items
of  income  and  gain  in  accordance   with  Treasury   Regulations   Section
1.704-2(f).  For purposes of this  Article  VII,  the term "LLC Minimum  Gain"
shall have the same meaning as that for partnership  minimum gain set forth in
Treasury  Regulations  Section  1.704-2(b)(2),  and any Member's  share of LLC
Minimum Gain shall be  determined  in  accordance  with  Treasury  Regulations
Section  1.704-2(g)(1).  This  Section  7.12(a) is intended to comply with the
minimum  gain   chargeback   requirement  of  Treasury   Regulations   Section
1.704-2(f)  and  shall be  interpreted  and  applied  in a  manner  consistent
therewith.

 ..................(b)    Member Minimum Gain  Chargeback.  Except as otherwise
provided in Treasury  Regulations Section  1.704-2(i)(4),  notwithstanding any
other provision of this Article
       VII, if there is a net decrease in Member  Nonrecourse  Debt Minimum Gain
attributable  to a Member  Nonrecourse  Debt during any Fiscal Year, each Member
who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such
Member  Nonrecourse  Debt,  determined in accordance  with Treasury  Regulations
Section 1.704-2(i)(5),  shall be specially allocated items of Company income and
gain for such Fiscal Year (and,  if  necessary,  subsequent  Fiscal Years) in an
amount equal to such  Member's  share of the net decrease in Member  Nonrecourse
Debt Minimum Gain  attributable  to such Member  Nonrecourse  Debt determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant
to the previous  sentence shall be made in proportion to the respective  amounts
required to be allocated  to each Member  pursuant  thereto.  The items to be so
allocated shall be determined in accordance with Treasury  Regulations  Sections
1.704-2(i)(4) and 1.704-2(j)(2). The term "Member Nonrecourse Debt Minimum Gain"
means an amount,  with respect to each Member Nonrecourse Debt, equal to the LLC
Minimum Gain that would result if such Member Nonrecourse Debt were treated as a
nonrecourse  liability,  determined  in  accordance  with  Treasury  Regulations
Section  1.704-2(i)(3).  This  Section  7.12(b) is  intended  to comply with the
minimum   gain   chargeback   requirement   in  Treasury   Regulations   Section
1.704-2(i)(4) and shall be interpreted consistently therewith.

 ..................(c)    Qualified    Income    Offset.    Any    Member   who
unexpectedly receives an adjustment,  allocation or distribution  described in
Treasury  Regulations  Section  l.704-l(b)(2)(ii)(d)(4),  (5) or (6)  shall be
allocated  items of income  and gain in an amount  and  manner  sufficient  to
eliminate,  to the extent  required by the Treasury  Regulations,  the deficit
General Capital  Account balance as quickly as possible.  This Section 7.12(c)
is intended to comply with the  alternate  test for economic  effect set forth
in Treasury Regulations Section  l.704-l(b)(2)(ii)(d) and shall be interpreted
and applied in a manner consistent therewith.

 ..................(d)    Gross  Income  Allocation.  In the event  any  Member
has a  deficit  General  Capital  Account  at the end of any year  which is in
excess of the sum of (i) the  amount  such  Member  is  obligated  to  restore
pursuant to any  provision of this  Agreement  and (ii) the amount such Member
is deemed to be obligated to restore pursuant to the penultimate  sentences of
Treasury  Regulations  Sections  1.704-2(g)(1)  and  1.704-2(i)(5),  each such
Member shall be specially  allocated  items of Company  income and gain in the
amount of such  excess as quickly as  possible,  provided  that an  allocation
pursuant to this Section  7.12(d) shall be made only if and to the extent that
such Member  would have a deficit  General  Capital  Account in excess of such
sum after all other  allocations  provided for in Sections  7.04 and 7.12 have
been  tentatively made as if Section 7.12(c) and this Section 7.12(d) were not
in this Agreement.

 ..................(e)    Nonrecourse   Deductions.    Nonrecourse   Deductions
shall be allocated  among the Members in the same way that Net  Property  Loss
is allocated  under  Section  7.04(b).  For purposes of this Section  7.12(e),
the  term  "Nonrecourse  Deductions"  shall  have  the  meaning  set  forth in
Treasury Regulations Section 1.704-2(b)(1).

 ..................(f)    Member Nonrecourse  Deductions.  Notwithstanding  any
other  provisions  of this  Article  7, to the  extent  required  by  Treasury
Regulations Section 1.704-2(i),  any items of income, gain, deduction and loss
of the Company  that are  attributable  to a  nonrecourse  debt of the Company
that  constitutes  Member  Nonrecourse  Debt (including  chargebacks of Member
Nonrecourse  Debt  Minimum  Gain) shall be allocated  in  accordance  with the
provisions of Treasury  Regulations  Section 1.704-2(i).  For purposes of this
Article  VII, the term  "Member  Nonrecourse  Debt" shall have the meaning for
partner   nonrecourse   debt  set  forth  in  Treasury   Regulations   Section
1.704-2(b)(4).

 ..................(g)    Allocations  Relating to Taxable  Issuance of Shares.
Any income,  gain, loss, or deduction  realized as a direct or indirect result
of the  issuance of Shares by the Company to a Member (the  "Issuance  Items")
shall be allocated among the Members so that, to the extent possible,  the net
amount of such Issuance Items,  together with all other allocations under this
Agreement  to each  Member,  shall be equal to the net amount  that would have
been  allocated  to each  such  Member  if the  Issuance  Items  had not  been
realized.

            IV.13. Curative AllocationsCurative Allocations. The allocations set
forth in Sections 7.12(a),  7.12(b), 7.12(c), 7.12(d), 7.12(e), 7.12(f) and 7.14
hereof  (the  "Regulatory   Allocations")   are  intended  to  comply  with  the
requirements   of  Treasury   Regulations   Sections   1.704-1(b)  and  1.704-2.
Notwithstanding  any  other  provisions  of this  Article  VII  (other  than the
Regulatory Allocations),  the Regulatory Allocations shall be taken into account
in allocating other items of income,  gain, deduction and loss among the Members
so that, to the extent  possible,  the net amount of such  allocations  of other
items and the  Regulatory  Allocations  to each Member shall be equal to the net
amount  that would have been  allocated  to each such  Member if the  Regulatory
Allocations had not occurred. This Section 7.13 shall be interpreted and applied
in such a manner and to such extent as is reasonably necessary to eliminate,  as
quickly as possible,  permanent economic  distortions that would otherwise occur
as a consequence  of the  Regulatory  Allocations in the absence of this Section
7.13.

            IV.14. Loss  LimitationLoss  Limitation.  Any Net Loss, Net Property
Loss and  deductions  attributable  to Equity Bonus  Payments that are allocated
pursuant  to Section  7.04 hereof  shall not exceed the  maximum  amount of such
losses and  deductions  that can be allocated  without  causing or  increasing a
deficit  balance in any  Member's  General  Capital  Account  (in excess of such
Member's  obligation  to  restore  a deficit  in its  General  Capital  Account,
including  any  deemed  obligation  pursuant  to the  penultimate  sentences  of
Treasury  Regulations  Sections  1.704-2(g)(1) and 1.704-2(i)(5)).  In the event
that  some but not all of the  Members  would  have  deficit  balances  in their
General  Capital  Accounts as a consequence of  allocations  pursuant to Section
7.04  hereof in excess of the  amount,  if any,  permitted  under the  preceding
sentence,  the  limitation  set forth in this Section 7.14 shall be applied on a
Member by Member basis, and any losses or deductions not allocable to any Member
as a result  of this  limitation  shall be  allocated  to the other  Members  in
proportion to the positive balances of such Members' General Capital Accounts so
as to allocate the maximum  amount of such losses and  deductions to each Member
under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). In making the foregoing
determination,  a  Member's  General  Capital  Account  shall be  reduced by the
amounts described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),  (5),
or (6).


                      TRANSFER OF SHARES BY MEMBERSMEMBERS

            V.1...  Restrictions  on  Transfers.Restrictions  on  Transfers.  No
Shares of the Company may be Transferred,  nor may any Member offer to Transfer,
and no  Transfer  by a Member  shall be binding  upon the  Company or any Member
unless it is expressly  permitted by this Article VIII and the Company  receives
an executed copy of the documents  effecting  such  Transfer,  which shall be in
form and substance  reasonably  satisfactory  to the President.  The assignee of
Shares in the  Company  may become a  substitute  Member only upon the terms and
conditions set forth in Section 8.02 hereof.  If a Transferee of Shares does not
become  (and  until  any  such  Transferee  becomes)  a  substitute  Member,  in
accordance with the provisions of Section 8.02 hereof,  such Person shall not be
entitled  to  exercise  or receive  any of the  rights,  powers or benefits of a
Member other than the right to receive  distributions which the assigning Member
has  Transferred  to such  Person.  No Shares of the Company may be  Transferred
except:

 ..................(a)    with the prior written consent of the Company,  which
consent may be granted or withheld in the President's sole discretion  (unless
the Transferor is a Phoenix  Member,  in which case, the  President's  consent
shall not be unreasonably withheld);

 ..................(b)    upon the  death of a  Management  Member,  his or her
Class  A  Shares  may be  Transferred  by  will or the  laws  of  descent  and
distribution  (subject,  in all  cases,  to the  provisions  of  Section  9.03
hereof);

 ..................(c)    a  Management  Member may Transfer all or any portion
of his or her Class A Shares pursuant to an Exercise of the Put/Call;

 ..................(d)    a  Management  Member may Transfer all or any portion
of his or her Equity Bonus Shares to the Company upon an Equity Bonus  Payment
to such Management Member; and

 ..................(e)    a  Management  Member may  Transfer any or all of his
or her Shares to the Company upon forfeiture  thereof pursuant to Section 9.02
hereof;

       provided,  however,  that in the case of (a) or (b) above, the Transferee
enters into an agreement with the Company agreeing to be bound by the provisions
hereof to the same extent they would be if the  Transferred  Shares were held by
such Management Member.  Upon any Transfer of Shares, the Company shall make the
appropriate revisions to the Share Schedule.

             No Shares of a Member in the Company may be pledged,  hypothecated,
optioned or encumbered, nor may any offer to do any of the foregoing be made.

            V.2... Substitute MembersSubstitute Members. No Transferee of Shares
shall become a Member except in accordance  with this Section 8.02.  The Company
may admit as a substitute Member (with respect to all or a portion of the Shares
held by a Person),  any Person that acquires a Share by Transfer from any Member
pursuant   to  Section   8.01   hereof,   but  only  with  the  consent  of  the
non-Transferring  Members holding at least a majority of the Outstanding Class A
Shares and Class B Shares (on a combined basis) held by such Members;  provided,
however,  that the Company may admit a Transferee as a substitute Member without
the foregoing  consent of the Members if tax counsel to the Company  opines that
the Company will continue to be treated as a  partnership  for federal and state
income tax purposes without any such consent upon such admission.  The admission
of an assignee as a substitute  Member shall, in all events, be conditioned upon
the  execution  of an  instrument  satisfactory  to the  President  whereby such
assignee becomes a party to this Agreement as a Member.  Upon the admission of a
substitute Member, the Company shall make the appropriate revisions to the Share
Schedule.

            V.3...    Allocation   of   Distributions   Between   Assignor   and
AssigneeAllocation  of  Distributions  Between  Assignor and Assignee.  Upon the
Transfer  of Shares  pursuant  to  Section  8.01(a)  or  8.01(b),  distributions
pursuant  to Article  VII shall be made to the Person  owning such Shares at the
date of  distribution,  unless the assignor and assignee  otherwise agree and so
direct  the  Company  in a written  statement  signed by both the  assignor  and
assignee.  Upon  the  Transfer  of  Shares  pursuant  to  Section  8.01(c),  the
Management  Member's  allocable but as yet  undistributed  share (based on total
Class A Shares so Transferred) of Company profits and losses with respect to the
Fiscal Year during which the Transfer  occurred  through the  effective  date of
such  Transfer  shall be  distributed  to such  Management  Member no later than
ninety  (90) days after the end of the Fiscal Year  during  which such  Transfer
occurred.  In  connection  with a Transfer by a Member of Shares,  the  assignee
shall succeed to a pro-rata  (based on the  percentage  of such Person's  Shares
Transferred)  portion of the assignor's  General Capital Account with respect to
such Shares in accordance with Section  7.02(c) hereof,  unless the assignor and
assignee otherwise agree and so direct the Company in a written statement signed
by both the assignor and assignee and consented to by the President.

            V.4... Additional RequirementsAdditional Requirements. As additional
conditions  to the validity of any  Transfer of Shares  pursuant to this Article
VIII,  such Transfer shall not: (i) violate the  registration  provisions of the
Securities Act or the securities laws of any applicable jurisdiction, (ii) cause
the Company to become subject to regulation as an "investment company" under the
Investment  Company Act, and the rules and  regulations  of the SEC  thereunder,
(iii) result in the  termination of any contract to which the Company is a party
and which individually or in the aggregate are material (it being understood and
agreed  that any  contract  pursuant to which the  Company  provides  Investment
Management Services is material), or (iv) result in the treatment of the Company
as an association taxable as a corporation or as a "publicly traded partnership"
for federal income tax purposes.  The Company may require reasonable evidence as
to the foregoing, including, without limitation, a favorable opinion of counsel,
which expense shall be borne by the parties to such transaction.  To the fullest
extent  permitted by law,  any Transfer  that  violates the  conditions  of this
Section 8.04 shall be null and void.


                        WITHDRAWAL AND TERMINATIONINATION

            VI.1..  Withdrawal.  Withdrawal.  No Member  shall have any right to
resign or withdraw as a Member of the Company  (except  upon  Transfer of Shares
pursuant to Sections 8.01(b), (c), (d) or (e) hereof) without the consent of the
Company,  and no Member  shall have any right to receive  any  repayment  of its
Capital  Contribution  except as provided in Section 7.01(b) hereof upon certain
distributions, Section 9.03 hereof upon death of a Management Member and Article
X hereof  upon  liquidation  and  distribution  of the  Company.  If a permitted
withdrawal would leave the Company with less than two (2) Members, an additional
Member shall be admitted before the withdrawal is effective, so that there shall
always  be at  least  two (2)  Members  of the  Company.  Except  to the  extent
expressly provided in this Agreement, no Member shall have any right to have its
interest in the Company appraised or paid out upon the resignation or withdrawal
of such Member or any other circumstances.

            VI.2.. Termination of EmploymentTermination of Employment.

 ..................(a) Upon the termination of employment with the Company of any
Management  Member,  which  termination is either  voluntary by such  Management
Member (other than  termination  for Good Reason or termination of Harold Nathan
by retirement as contemplated  in Section  9.02(d)) or for Cause by the Company,
such  Management  Member  (or  such  Management  Member's  permitted  Transferee
pursuant to Section 8.01 hereof,  in the discretion of the  President)  shall be
deemed  to have  automatically  forfeited  any and all  rights in and to (i) any
unvested  Class A Shares  then held by such  Management  Member  (including  the
portion of such  Member's  General  Capital  Account with respect to such Shares
determined in accordance with Section 7.02(b) hereof); and (ii) any Equity Bonus
Shares then held by such Member and, as a result,  all of such  Member's  Equity
Bonus  Payment  as set  forth in  Section  4.12(f)  (and  including  all of such
Member's Equity Bonus Account),  all without any payment therefor (provided that
such Management  Member shall receive,  no later than ninety (90) days after the
end of the Fiscal Year during  which such  Management  Member's  termination  of
employment occurred,  his or her allocable but as yet undistributed share (based
on total Class A Shares held prior to termination) of Company profits and losses
with respect to the Fiscal Year during which the  termination  occurred  through
the effective  date of  termination of employment and an amount equal to the sum
of all previously made (but unreturned)  Capital  Contributions  with respect to
such Shares),  and without the  requirement of any notice from the Company.  Any
forfeited  Class A Shares or  Equity  Bonus  Shares  shall be  available  to the
Company for reissuance in accordance  with Sections  3.02(a) and 4.12(f) hereof,
respectively.

 ..................(b) Upon the termination of employment with the Company of any
Management Member,  which termination is the result of such Management  Member's
death,  all  unvested  Class  A  Shares  held  by the  Management  Member  shall
automatically have its vesting schedule  accelerated and shall be deemed to have
immediately  vested  prior to the date of such  termination,  and the  estate or
legal  representative  of such  Management  Member  (or the  Transferee  of such
Management  Member  pursuant to Section  8.01(b)  hereof) shall continue to be a
Member of the Company with all the rights and  obligations  of a Member  holding
such Shares as set forth herein, including,  without limitation, in Section 9.03
hereof. Upon payment by the Company to such Repurchased Member of any Repurchase
Price under Section 9.03 hereof, all Shares held by such Management Member shall
be deemed to have been  forfeited.  Any forfeited Class A Shares or Equity Bonus
Shares shall be  available  to the Company for  reissuance  in  accordance  with
Sections 3.02(a) and 4.12(c) hereof, respectively.

 ..................(c) Upon the termination of employment with the Company of any
Management Member (other than Seneca or Little), which termination is the result
of such Management  Member's Disability or which termination is without Cause by
the  Company or with Good  Reason by such  Management  Member,  such  Management
Member (or such Management  Member's  permitted  Transferee  pursuant to Section
8.01  hereof,  in the  discretion  of the  President)  shall be  deemed  to have
automatically  forfeited any and all rights in and to (i) fifty percent (50%) of
all unvested Class A Shares then held by such Management  Member  (including the
portion of such Management Member's General Capital Account with respect to such
Shares  determined in accordance  with Section 7.02(b)  hereof);  and (ii) fifty
percent  (50%) of all Equity  Bonus Shares then held by such  Management  Member
and, as a result,  half of such Management  Member's Equity Bonus Payment as set
forth in Section  4.12(f) (and including  fifty percent (50%) of such Management
Member's Equity Bonus Account),  all without any payment therefor (provided that
such Management  Member shall receive,  no later than ninety (90) days after the
end of the Fiscal Year during  which such  Management  Member's  termination  of
employment  occurred,  its  allocable but as yet  undistributed  share (based on
total Class A Shares held prior to  termination)  of Company  profits and losses
with respect to the Fiscal Year during which the  termination  occurred  through
the effective  date of  termination of employment and an amount equal to the sum
of all previously made (but unreturned)  Capital  Contributions  with respect to
such Shares) and without the  requirement  of any notice from the  Company.  Any
forfeited  Class A Shares or  Equity  Bonus  Shares  shall be  available  to the
Company for reissuance in accordance  with Sections  3.02(a) and 4.12(f) hereof,
respectively.  The remaining fifty percent (50%) of unvested Class A Shares held
by  such  Management  Member  shall  automatically  have  its  vesting  schedule
accelerated and shall be deemed to have immediately  vested prior to the date of
such termination.  With respect to all vested Shares (including those Shares for
which vesting is accelerated  pursuant  hereto),  such  Management  Member shall
continue to be a Member of the Company with all the rights and  obligations of a
Member holding such Shares as set forth herein.

 ..................(d)  Upon termination of employment with the Company of Harold
Nathan by  retirement  at any time from and after the age of fifty three and one
half (53 1/2) all unvested Class A Shares held by such  Management  Member shall
automatically  have their vesting  schedule  accelerated  and shall be deemed to
have vested immediately prior to the date of such termination.

            VI.3.. Repurchase of SharesRepurchase of Shares. In the event of the
death of any Management  Member (together with such Management  Member's estate,
legal  representative  or Transferee  pursuant to Section  8.01(b)  hereof,  the
"Repurchased   Member"),  the  Company  shall  purchase  for  cash  all  of  the
Outstanding   Shares  of  the  Company  held  by  the  Repurchased  Member  (the
"Repurchased Interest") pursuant to the terms hereof (the "Repurchase").

 ..................(a)  The closing of the Repurchase  shall take place on a date
set by the Company,  which shall be as soon as reasonably  practicable after the
later of (A) one hundred  eighty (180) days after the death of such  Repurchased
Member or (B) ninety (90) days after the Company has  received  the  proceeds of
all key-man life  insurance  policies  maintained  by the Company on the life of
such  Repurchased  Member (the  "Repurchase  Closing  Date").  The Company shall
provide  notice of the  Repurchase  Closing  Date at least  ten (10) days  prior
thereto.

 ..................(b)  The purchase  price for the Repurchase  (the  "Repurchase
Price")  shall  be equal to the  greater  of (i) the sum of (A) the  Repurchased
Member's   aggregate  General  Capital  Account  balance  with  respect  to  the
Repurchased Interest as of such death, as adjusted from time to time pursuant to
the terms hereof  (calculated as of such date by  disregarding  solely for these
purposes  for all Fiscal Years (i) any  adjustments  or special  allocations  to
General  Capital  Accounts made pursuant to Sections 7.12, 7.13 and 7.14 hereof;
(ii) any  distributions  made by the Company pursuant to Section 7.06, and (iii)
all items of Company income,  gain, loss,  deduction or credit,  but taking into
account for all Fiscal Years (i) the Net Property Gain or Net Property  Loss, as
applicable,  resulting  from the deemed  sale of assets  upon each Book Event as
calculated pursuant to Section  7.02(a)(iii) hereof, with such Net Property Gain
or Net Property  Loss  allocated  pursuant to Section  7.04(b)  hereof (and,  in
calculating  such Net Property Gain or Net Property  Loss, the book value of the
Company  property  shall be  deemed  to be the book  value  thereof  immediately
following the preceding Book Event or, if there is no such preceding Book Event,
the book value thereof as of the  Effective  Date, so that the Net Property Gain
or Net Property Loss, as applicable,  is solely  attributable  to changes in the
fair  market  value of Company  property  (as  defined  in Section  7.02(a)(iii)
hereof)  over  the  period  such  Net  Property  Gain  or Net  Property  Loss is
calculated),  (ii) the  adjustments  to General  Capital  Accounts  pursuant  to
Section  7.02(a)(i) and 7.02(d) and (iii) any  reallocation  of General  Capital
Account  balances  resulting  from a transfer or  forfeiture of Class A Shares),
plus (B) the Equity Bonus  Payment with respect to such  Repurchased  Member and
(ii) if such Management Member was a Management Member as of the Effective Date,
the product of the Management  Percentage and the Initial Enterprise Value and a
fraction,  the  numerator of which is the  difference  between (x) the number of
Outstanding  Class A Shares held by such  Management  Member as of the Effective
Date minus (y) the number of Class A Shares  forfeited or otherwise  Transferred
by such Management  Member prior to the date of such  Management  Member's death
and the  denominator of which is the total number of Outstanding  Class A Shares
of the Company held by the  Management  Members as of the Effective  Date (which
product includes by its definition the Equity Bonus Payment with respect to such
Repurchased Member).

 ..................(c) The rights and obligations of the Company hereunder are in
addition  to and shall not  affect  any other  rights or  obligations  which the
Company or other  Persons may otherwise  have to  repurchase or purchase  Shares
(including,  without  limitation,  pursuant to any  agreement  entered into by a
Management  Member which  provides for the vesting of Shares or such  Management
Member's Put/Call Agreement).

 ..................(d)  On the Repurchase  Closing Date, the Company shall pay to
the Repurchased  Member the Repurchase  Price for the Shares  repurchased in the
manner set forth in this Section 9.03,  and upon such payment,  the  Repurchased
Member  shall cease to hold any Shares,  and such  Repurchased  Member  shall be
deemed to have  withdrawn from the Company and shall cease to be a Member of the
Company  and shall no  longer  have any  rights  hereunder  (provided  that such
Management Member shall receive, no later than ninety (90) days after the end of
the Fiscal Year during which such Management Member's  termination of employment
occurred,  its allocable but as yet undistributed  share (based on total Class A
Shares held prior to  termination) of Company profits and losses with respect to
the Fiscal Year during which the termination occurred through the effective date
of termination of employment.  On the Repurchase  Closing Date, the  Repurchased
Member and the Company shall execute an agreement  reasonably  acceptable to the
President,  in which the  Repurchased  Member  represents  and  warrants  to the
Company  that  it has  sole  record  and  beneficial  title  to the  Repurchased
Interest,  free and clear of any liens,  encumbrances or restrictions other than
those imposed by this Agreement.  Payment of the Repurchase  Price shall be made
on the Repurchase  Closing Date by wire transfer of immediately  available funds
to an account  designated by the Repurchased  Member at least three (3) business
days prior to the Repurchase Closing Date.

            VI.4.. Acknowledgment of Limitations on Withdrawal and Forfeiture of
SharesAcknowledgment  of Limitations on Withdrawal and Forfeiture of Shares.  IN
CONSIDERATION  OF THE COMPANY'S  ISSUANCE OF SHARES TO EACH MEMBER,  EACH MEMBER
AGREES  THAT (A) HE OR SHE DOES NOT HAVE ANY RIGHTS TO RESIGN OR  WITHDRAW  AS A
MEMBER OF THE COMPANY EXCEPT AS SPECIFICALLY  PROVIDED HEREIN AND (B) HIS OR HER
RIGHTS  WITH  RESPECT TO CERTAIN  SHARES HELD BY HIM OR HER,  RESPECTIVELY,  ARE
SUBJECT TO  FORFEITURE  UNDER CERTAIN  CIRCUMSTANCES  AS PROVIDED  HEREIN.  EACH
MEMBER ACKNOWLEDGES THAT SUCH PROVISIONS REGARDING WITHDRAWAL OF SUCH MEMBER AND
FORFEITURE OF SUCH MEMBER'S SHARES ARE EACH REASONABLE  UNDER THE  CIRCUMSTANCES
EXISTING AS OF THE EFFECTIVE DATE.


                                       VII        -    DISSOLUTION     AND
LIQUIDATION                            DISSOLUTION AND LIQUIDATION

            VII.1. No DissolutionNo Dissolution.  Except as set forth in Section
10.02 below,  the Company  shall not be dissolved  and its affairs  shall not be
wound up by the  admission  of  additional  Members  or the  death,  withdrawal,
resignation, expulsion, Bankruptcy or dissolution of any Member, and the Company
shall continue to exist in perpetuity.

            VII.2. Events Causing DissolutionEvents  Causing Dissolution.  The
Company  shall be dissolved  and its affairs  wound up upon the  occurrence of
any of the following events:

 ..................(a)    Special    Membership    Approval    thereof    until
December 31, 2001 and, thereafter, Membership Approval thereof;

 ..................(b)    Bankruptcy  of PDP,  unless the Company is  continued
by the consent of not less than a majority in interest  (defined as a majority
of  the  profit,  interests  and  capital  interests  in the  Company)  of the
remaining Members, given within ninety (90) days following such event; or

 ..................(c)    the entry of a decree of judicial  dissolution  under
Section 17351 of the Act.

             Notwithstanding  the foregoing,  the Company shall not be dissolved
upon the event  specified  in  Section  10.02(b)  hereof if tax  counsel  to the
Company opines that the Company will be treated as a partnership for federal and
state income tax purposes without a dissolution of the Company upon such event.

            VII.3.  Notice  of  DissolutionNotice   of  Dissolution.   Upon  the
dissolution of the Company, PDP or the other Person or Persons (the "Liquidating
Trustee") named by PDP and approved by Special Membership  Approval to carry out
the  winding  up of the  Company,  shall  promptly  notify  the  Members of such
dissolution.  The  Liquidating  Trustee  shall be  empowered to give and receive
notices, reports and payments in connection with the dissolution and termination
of the Company,  and to hold and exercise  such other powers as are necessary to
permit  all  parties  to  deal  exclusively  with  the  Liquidating  Trustee  in
connection with the dissolution and termination of the Company.

            VII.4. LiquidationLiquidation.  Upon dissolution of the Company, the
Liquidating  Trustee shall proceed  diligently to liquidate the Company and wind
up its affairs  and to make final  distributions  as  provided  in Section  7.07
hereof and in the Act. The costs of dissolution and  liquidation  shall be borne
as an expense of the Company. Until final distribution,  the Liquidating Trustee
shall  continue  to operate  the  Company  properties  with all of the power and
authority  of the  President  of the  Company.  As promptly  as  possible  after
dissolution and again after final  liquidation,  the  Liquidating  Trustee shall
cause an accounting to be made by a firm of  independent  public  accountants of
the Company's assets, liabilities and operations.

            VII.5. Certificate of  CancellationCertificate  of Cancellation.  On
completion of the distribution of Company assets as provided herein, the Company
shall be  terminated,  and the  Liquidating  Trustee  (or such  other  Person or
Persons  as  the  Act  may  require  or  permit)  shall  file a  Certificate  of
Dissolution  with the  Secretary of State of the State of  California  under the
Act,  cancel any other filings made pursuant to Sections 2.01 and 2.04, and take
such  other  actions as may be  necessary  to  terminate  the  existence  of the
Company.


                         GENERAL PROVISIONSAL PROVISIONS

            VIII.1  OffsetOffset.  Whenever the Company is to pay any sum to any
Member,  any amounts  that Member owes to the Company may be deducted  from that
sum before payment.

            VIII.2 NoticesNotices. Except as expressly set forth to the contrary
in this Agreement,  all notices,  requests or consents provided for or permitted
to be given under this Agreement must be in writing and shall be given either by
registered or certified  mail,  addressed to the recipient,  with return receipt
requested,  or by delivering the writing to the recipient in person, by courier,
or by facsimile transmission; and a notice, request, or consent given under this
Agreement  is  effective  upon  receipt or three (3) days after the date mailed,
whichever is sooner. All notices,  requests and consents to be given to a Member
must be sent to or delivered at the addresses  given for that Member on Schedule
A, or such other  address as that  Member may  specify by written  notice to the
other Members and the Company. Any notice, request or consent to be given to the
Company must be sent to or delivered at the address of the  principal  office of
Company specified in accordance with Section 2.03 hereof to the attention of the
President  and to PDP at the address  set forth on  Schedule A attached  hereto.
Whenever  any notice is required  to be given by law,  the  Certificate  or this
Agreement,  a written waiver  thereof,  signed by the Person entitled to notice,
whether before or after the time stated therein,  shall be deemed  equivalent to
the giving of such notice.

            VIII.3  Entire  AgreementEntire   Agreement.   This  Agreement,  the
Purchase Agreement, the Put/Call Agreements and all other agreements referred to
herein or therein,  dated as of the date of the Purchase  Agreement or as of the
Effective Date,  constitute the entire  agreement of the Members relating to the
Company and  supersede  all prior  contracts or  agreements  with respect to the
Company,  whether oral or written.  This  Agreement  supersedes and replaces all
Phantom  Profits  Bonus  Agreements  entered  into by and between any Member and
either  the  Company  or the  Partnership  prior  to the  date  hereof,  and all
provisions of such agreements shall be null and void and shall cease to have any
effect whatsoever.

            VIII.4 Limitation of Litigation;  Consent to  JurisdictionLimitation
of Litigation;  Consent to Jurisdiction. No Member shall be entitled to initiate
or  participate  in a class  action  suit on  behalf  of all or any  part of the
Members against the Company or any other Member, and no Member shall be entitled
to initiate or participate in a derivative suit on behalf of the Company against
any Member, unless, in each case, such action or suit has received prior Special
Membership Approval, or unless otherwise required by law. A Member who initiates
a class action or derivative suit in violation of this Agreement shall be liable
to the Company and any Members who are  defendant  parties to the action or suit
for all damages and  expenses  which they incur as a result,  including  without
limitation  reasonable  fees and expenses of legal counsel and expert  witnesses
and  court  costs.   The  parties  to  this  Agreement  hereby  consent  to  the
non-exclusive  jurisdiction  of  the  courts  of  the  State  of  California  in
connection  with any matter or dispute  arising under this  Agreement or between
them regarding the affairs of the Company.

            VIII.5  Amendment or  ModificationAmendment  or  Modification.  This
Agreement  may be  amended  or  modified  from  time to time  only by a  written
instrument  signed by those  Members  required  to evidence  Special  Membership
Approval  thereof;  provided,  however,  that (a) an amendment  or  modification
changing  adversely  the  rights  of a Member  with  respect  to  distributions,
allocations  or  voting  (on a basis  that is  disproportionate  to any  adverse
changes  effected with respect to the rights of other Members  holding Shares of
the same class) shall be effective only with that Member's  consent (unless such
change  is  expressly  provided  by  this  Agreement),  (b)  an  amendment  or a
modification  increasing  any  liability of a Member to the Company or the other
Members, or adversely affecting the limitation of the liability of a Member with
respect to the Company,  shall be effective only with that Member's consent, and
(c) an amendment or modification  reducing the required percentage of Shares for
any consent or vote in this  Agreement  shall be effective only with the consent
or vote of Members having the percentage of Shares theretofore required.  Copies
of each amendment of this  Agreement  shall be delivered to each Member no later
than the effective date of such amendment.  Nothing  contained in this Agreement
shall  permit the  amendment  of this  Agreement  to impair the  exemption  from
personal liability of the Members, Officers, employees and agents of the Company
or to permit assessments upon the Members.

            VIII.6 Binding EffectBinding Effect.  Subject to the restrictions on
Transfers set forth in this  Agreement,  this Agreement is binding on and inures
to the  benefit  of  the  parties  hereto  and  their  respective  heirs,  legal
representatives, successors and assigns.

            VIII.7 Governing Law; SeverabilityGoverning Law; Severability.  This
Agreement is governed by and shall be construed in  accordance  with the laws of
the State of California,  exclusive of its conflict-of-laws  principles.  In the
event of a direct  conflict  between the  provisions  of this  Agreement and any
provision of the Articles of  Organization,  or any  mandatory  provision of the
Act, the applicable  provision of the Articles of  Organization or the Act shall
control.  If any provision of this Agreement or the  application  thereof to any
Person or  circumstance  is held  invalid or  unenforceable  to any extent,  the
remainder of this  Agreement  and the  application  of that  provision  shall be
enforced to the fullest extent permitted by law.

            VIII.8 Further AssurancesFurther Assurances. In connection with this
Agreement and the transactions  contemplated  hereby,  each Member shall execute
and deliver any additional  documents and instruments and perform any additional
acts  that may be  necessary  or  appropriate  to  effectuate  and  perform  the
provisions  of this  Agreement  and  those  transactions,  as  requested  by the
Company.

            VIII.9 Waiver of Certain RightsWaiver of Certain Rights. Each Member
irrevocably  waives any right it may have to maintain any action for dissolution
of the Company or for partition of the property of the Company.

            VIII.10 Failure to Pursue  RemediesFailure  to Pursue Remedies.  The
failure of any party to seek  redress  for  violation  of, or to insist upon the
strict  performance  of, any  provision  of this  Agreement  shall not prevent a
subsequent act, which would have originally constituted a violation, from having
the effect of any original violation.

            VIII.11  Cumulative  RemediesCumulative  Remedies.  The  rights  and
remedies  provided by this Agreement are cumulative and the use of any one right
or remedy by any party  shall not  preclude or waive its right to use any or all
other  remedies.  Said  rights and  remedies  are given in addition to any other
right the parties may have by law, statute, ordinance or otherwise.

            VIII.12 Notice to Members of Provisions of this  AgreementNotice  to
Members of Provisions  of this  Agreement.  By executing  this  Agreement,  each
Member  acknowledges  that  such  Member  has  actual  notice  of (a) all of the
provisions of this Agreement, including, without limitation, the restrictions on
the Transfer of Shares set forth in Article VIII, the provisions with respect to
withdrawal  and  forfeiture  set  forth in  Article  IX and the  limitations  on
participation  of Members in the  management of the Company set forth in Article
IV, and (b) all of the provisions of the Articles of  Organization.  Each Member
hereby  agrees  that  this  Agreement  constitutes  adequate  notice of all such
provisions,  and each  Member  hereby  waives any  requirement  that any further
notice thereunder be given.

            VIII.13  InterpretationInterpretation.  For  the  purposes  of  this
Agreement,  terms not defined in this Agreement  shall be defined as provided in
the Act;  and all  nouns,  pronouns  and verbs used in this  Agreement  shall be
construed as masculine,  feminine,  neuter, singular, or plural, whichever shall
be  applicable.  Titles or captions of Articles and  Sections  contained in this
Agreement are inserted as a matter of convenience  and for reference,  and in no
way define,  limit, extend or describe the scope of this Agreement or the intent
of any provision hereof.

            VIII.14 CounterpartsCounterparts.  This Agreement may be executed in
any number of  counterparts  with the same effect as if all signing  parties had
signed the same document,  and all counterparts  shall be construed together and
shall constitute the same instrument.

                                           [Remainder  of  page  intentionally
left blank]


<PAGE>


             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date set forth above.

          COMPANY:   SENECA CAPITAL MANAGEMENT LLC

           By: /s/ Gail P. Seneca
           Name:          Gail P. Seneca
           Title:President/Chief Executive Officer/Chief Investment Officer


                   PHOENIX MEMBERS:PHOENIX DUFF & PHELPS CORPORATION


                                                                           By:
                                                 Name:
                                                 Title:


                                     MANAGEMENT MEMBERS:


                                                            /s/ Gail P. Seneca
                                        Gail P. Seneca


                                                         /s/ Richard D. Little
                                        Richard D. Little


                                                              /s/ Ron K. Jacks
                                        Ron K. Jacks


                                                             /s/ Charles Dicke
                                        Charles Dicke


                                                            /s/ Laura Pantaleo
                                        Laura Pantaleo


                                                            /s/ Janice Diamond
                                        Janice Diamond

                                                            /s/ Sandta Westoff
                                        Sandra Westhoff


                                                            /s/ Belinda Melton
                                        Belinda Melton


                                                             /s/ Harold Nathan
                                        Harold Nathan


<PAGE>


                                           SENECA CAPITAL MANAGEMENT LLC

                                           SCHEDULE A

                                           SHARE SCHEDULE





                                                             [OMITTED]



<PAGE>

                              SENECA CAPITAL MANAGEMENT LLC
                              SCHEDULE B

                              OTHER OFFICERS

                              _________, 1997


       Richard D. Little, Director of Equities
       Ron K. Jacks, Equity Portfolio Manager
       Charles Dicke, Fixed Income Portfolio Manager
       Laura Pantaleo, Equity Analyst
       Janice Diamond, Fixed Income Analyst
       Sandra Westhoff, Chief Operating Officer
       Belinda Melton, Managing Director
       Harold Nathan, Senior Portfolio Manager
       Thomas N. Steenburg, Esq., Secretary, General Counsel and 
       Compliance Officer   



<PAGE>











<PAGE>

                        EXHIBIT 10(oo)    EXHIBIT B

                                    FORM OF
                              PUT/CALL AGREEMENT


      This PUT/CALL  AGREEMENT (this  "Agreement") is made as of ______________,
1997 by and between PHOENIX DUFF & PHELPS  CORPORATION,  a Delaware  corporation
(the "Buyer"),  and  _________________  (the "Holder") and is  acknowledged  and
agreed to by Seneca  Capital  Management  LLC, a  California  limited  liability
company (formerly known as GMG/Seneca Capital Management LLC) (the "Company").

                             W I T N E S S E T H:


      WHEREAS,  the Buyer and  certain  persons,  [including  the  Holder]  (the
"Sellers"),  have  entered into a purchase  agreement  dated as of June __, 1997
(the "Purchase  Agreement"),  pursuant to which the Buyer is purchasing from the
Sellers in the aggregate  74.9% of the outstanding  membership  interests of the
Company,  and  74.9% of the  outstanding  partnership  interests  of  GMG/Seneca
Capital Management L.P., a California limited partnership (the "Partnership");

      WHEREAS, effective upon such purchase by the Buyer of membership interests
in the Company, certain of the Sellers have withdrawn as Members of the Company,
and the Buyer,  the Holder and the other  Management  Members have continued the
Company  as a limited  liability  company  pursuant  to the Second  Amended  and
Restated  Operating  Agreement by and between the Company,  the Phoenix Members,
the  Management  Members and those Persons who become  Members of the Company in
accordance  with the  provisions  thereof,  dated as of the Effective  Date (the
"Operating Agreement"); and

      WHEREAS,  the Management  Members have agreed to transfer their  remaining
interests in the  Partnership to the Company  pursuant to the Support  Agreement
dated as of the date of the Purchase Agreement; and

      WHEREAS,  the Buyer is entering into this Agreement with the Holder and is
entering into  substantially  similar  put/call  agreements  (each,  a "Put/Call
Agreement") with the other Management Members (collectively with the Holder, the
"Holders"),  as  contemplated  by  the  Purchase  Agreement  and  the  Operating
Agreement,  in  order to set  forth  certain  rights,  obligations  and  options
relating to the Shares in the Company held by each Holder.

      NOW,  THEREFORE,  in consideration of the mutual promises  hereinafter set
forth and other good and  valuable  consideration,  the receipt and  adequacy of
which are hereby  acknowledged,  and intending to be legally bound thereby,  the
parties hereto hereby agree as follows.



<PAGE>



            I.1  Definitions.  All  capitalized  terms  used  but not  otherwise
defined in this Agreement shall have the meanings  ascribed to such terms in the
Operating Agreement.


             "Accelerated Call Event" means the termination of employment of the
Holder  either by the Company  with Cause or by the Holder  without  Good Reason
{(other than upon the  retirement  of such Holder at any time from and after the
age of fifty three and one half (53 1/2))}.  {bracketed item is ONLY included in
Nathan's Put/Call Agreement}

             "Accelerated  Put  Event"  means  [(a) the death or  Disability  of
Seneca, (b) the termination of Seneca's  employment by the Company without Cause
or by Seneca with Good  Reason,] [ bracketed  items are not included in Seneca's
Put/Call Agreement] (c) the consummation of any Change in Control of the Phoenix
Members or any other Extraordinary  Event, (d) the Disability (as defined in the
Employment Agreement of the Holder dated as of the date hereof) of the Holder or
(e) the termination of employment of such Holder by such Holder with Good Reason
or by the Company without Cause.

             "Call Notice" means the written  notice given pursuant to Section 3
of this  Agreement  by the Buyer to the Holder of the  Buyer's  exercise  of its
option to purchase all or a portion of the Holder's Class A Shares.

             "Contract Year" means (a) the Fiscal Years of the Company ending on
December 31, 1999, 2000 and 2001, respectively, or (b) upon the occurrence of an
Accelerated Call Event or an Accelerated Put Event, the twelve (12) month period
ending on the last day of the month immediately preceding such event (or if such
event occurs as of the last  business  day of a month,  then such event shall be
deemed  to occur as of the end of the  last day of the  calendar  month in which
such event occurs).

             "Fair  Market  Value of the  Company"  means the product of (a) the
Management Fee  Measurement  Amount with respect to the most recently  completed
Contract Year, multiplied by (b) three and one half (3.5).

             "Holder's  Put/Call  Percentage" means, as of any date, the product
of (a) an amount  equal to (i) the total  number of Class A Shares  being put or
called,  as  applicable,  from the Holder,  divided by (ii) the total  number of
Class A Shares held by the Holder as of such date immediately  prior to such put
or call, multiplied by (b) one hundred percent (100%).

             "Holder's  Put/Call Price" means an amount equal to (a) the product
of (i) the Holder's  Put/Call  Percentage  multiplied by (ii) the balance of the
Holder's  General Capital Account as of the last day of the applicable  Contract
Year  (calculated as of such date by disregarding  solely for these purposes for
all Fiscal Years (i) any  adjustments or special  allocations to General Capital
Accounts  made  pursuant  to  Sections  7.12,  7.13  and  7.14 of the  Operating
Agreement;  (ii) any distributions made by the Company pursuant to Section 7.06,
and (iii) all items of Company  income,  gain,  loss,  deduction or credit,  but
taking  into  account  for all  Fiscal  Years (i) the net gain or net  loss,  as
applicable,  resulting  from the deemed  sale of assets  upon each Book Event as
calculated  pursuant to Section  7.02(a)(iii) of the Operating  Agreement,  with
such net gain or net loss  allocated  as "Net  Property  Gain" or "Net  Property
Loss" pursuant to Section 7.04(b) thereof (and, in calculating  such net gain or
net loss,  the book  value of the  Company  property  immediately  prior to such
calculation shall be deemed to be the book value thereof  immediately  following
the preceding Book Event or, if there is no such preceding Book Event,  the book
value  thereof as of the  Effective  Date,  so that the net gain or net loss, as
applicable,  is solely  attributable  to  changes  in the fair  market  value of
Company property (as defined in Section 7.02(a)(iii) of the Operating Agreement)
over the period such net gain or net loss is  calculated),  (ii) the adjustments
to General Capital Accounts pursuant to Section 7.02(a)(i) and 7.02(d) and (iii)
any reallocation of General Capital Account  balances  resulting from a transfer
or forfeiture of Class A Shares),  and minus (b) the product of (x) one-third of
all  amounts  paid  or  payable  by all  Sellers  (as  defined  in the  Purchase
Agreement)   (excluding   for  these   purposes   payments   with   respect   to
representations  and covenants made severally  under Article 4 and Sections 5.3,
5.7,  5.22,  7.5,  8.1(b) and 8.4 of the Purchase  Agreement)  in the  aggregate
pursuant to Article 11 of the Purchase  Agreement  multiplied by (y) a fraction,
the  numerator of which is the number of Class A Shares being put or called,  as
applicable,  which were  authorized and issued as of the Effective Date, and the
denominator  of  which  is the  total  number  of  Class  A  Shares  held by all
Management Members as of the Effective Date.

             "Put/Call  Limit"  means (i) with  respect to the  Put/Call  Period
relating  to the  Contract  Year ended  December  31,  1999,  the Holder may not
require the Buyer to purchase, and the Buyer may not purchase,  more than twenty
five percent (25%) of the total (vested and unvested) Class A Shares held by the
original  Holder as of the Effective Date, and (ii) with respect to the Put/Call
Period relating to the Contract Year ended December 31, 2000, the Holder may not
require  the Buyer to  purchase,  and the Buyer may not  purchase,  more than an
additional  twenty-five percent (25%) of the total (vested and unvested) Class A
Shares held by the original Holder as of the Effective Date.

             "Put/Call Period" means the period of sixty (60) days commencing on
the date the Holder's Put/Call Price for the applicable Contract Year is finally
determined  in  accordance  with Section 4 of this  Agreement  and ending on the
sixtieth (60th) day thereafter; provided, however, that the Put/Call Period with
respect to any  Accelerated  Put Event under clause (a) or (b) of the definition
thereof  shall end on the date  that is the  later of (a) the end of such  sixty
(60) day period or (b) the date that is fifteen  (15) days  following  notice to
the Holder from the Company of the  appointment  of a replacement  for Seneca as
President of the Company.

             "Put Notice" means the written  notice given  pursuant to Section 4
of this  Agreement  by the Holder to the Buyer of the  Holder's  exercise of its
option  to  require  the Buyer to  purchase  all or a  portion  of the  Holder's
remaining Class A Shares.

             "Related  Equity Bonus  Payment" means the product of (a) the Total
Equity  Bonus  Payments  paid or  payable to the  Holder  multiplied  by (b) the
Holder's Put/Call Percentage.

            I.2    Put Option.

                  (a) At any  time  during  any  Put/Call  Period  (but not more
frequently  than  once in any  Put/Call  Period),  the  Holder  shall  have  the
irrevocable  right and option,  by giving the Buyer a Put Notice, to require the
Buyer to  purchase  all or a  portion  of the  Holder's  vested  Class A Shares,
subject  to the  Put/Call  Limit (if  applicable),  for an  amount  equal to the
Holder's  Put/Call  Price.  Notwithstanding  the  foregoing,  in the event of an
Accelerated Put Event specified in clause [(a), (b) or (c)] [(a) and (b) are not
included in Seneca's Put/Call Agreement] of the definition  thereof,  the rights
of the Holder  hereunder  may only be  exercised  upon  either  (i) the  written
determination  by Seneca if she is then the  President of the Company or (ii) if
Seneca is not then  President of the Company,  the  affirmative  vote or written
consent of Management  Members  holding not less than fifty percent (50%) of the
then outstanding Class A Shares held by Management  Members  (excluding,  in the
event of the death of Seneca as specified in clause (a) of the  definition of an
Accelerated  Put Event,  Class A Shares held by Seneca or her  Transferees  upon
death), which written determination,  vote or consent sets forth the information
required in a Put Notice described below (a "Management Vote"), and in the event
of a  Management  Vote  permitting  the  exercise  of the  Holder's  put  rights
hereunder,  the Holder shall be deemed to have exercised such rights without any
further action or notice on the part of such Holder).

                  (b) On the  date of sale  designated  in the Put  Notice,  the
Holder shall sell, assign, convey, transfer and deliver to the Buyer the Class A
Shares being sold, free and clear of all liens,  restrictions  and  encumbrances
(other than those set forth in the Operating Agreement) against payment therefor
by wire transfer to an account in a bank located in the United States designated
by the Holder for such purposes.

                  (c) The Put  Notice  (which  shall be  irrevocable)  shall (i)
state the number of Class A Shares  and/or  fraction  thereof  being sold in the
aggregate  and  per  Management  Member  in the  event  of a put  pursuant  to a
Management  Vote, (ii) designate the date of sale,  which date shall be not less
than ten (10) days nor more than  twenty  (20) days from the  effective  date of
such Put Notice (provided that such date of sale shall be extended to the extent
necessary to comply promptly with The Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976,  as  amended  (the  "HSR  Act")),  and (iii)  state the  applicable
Holder's Put/Call Price or, in the event of a put pursuant to a Management Vote,
for  each  Management  Member  as  determined  in  accordance  with  his  or her
respective Put/Call  Agreement.  With respect to an exercise of the Put pursuant
to a  Management  Vote,  delivery to the Buyer by any  Management  Member of the
applicable written determination, vote or written consent shall constitute a Put
Notice on behalf of the Holder and each of the other Management Members.

            I.3    Call Option.

                  (a) At any  time  during  any  Put/Call  Period  (but not more
frequently  than  once  in any  Put/Call  Period),  the  Buyer  shall  have  the
irrevocable right and option, by giving a Call Notice to the Holder, to purchase
all or a portion of the  Holder's  vested  Class A Shares for an amount equal to
the Holder's Put/Call Price for such Put/Call Period.

                  (b) On the date of purchase designated in the Call Notice, the
Holder  shall  Transfer and deliver to the Buyer the vested Class A Shares being
purchased,  free and clear of all liens,  restrictions and  encumbrances  (other
than those set forth in the Operating  Agreement)  against  payment  therefor by
wire transfer to an account in a bank located in the United States designated by
the Holder for such purpose.

                   (c) The Call Notice  (which shall be  irrevocable)  shall (i)
state the number of Class A Shares and/or  fraction  thereof being purchased (in
the aggregate and per Management Member in the event of a call other than a call
resulting from an Accelerated Call Event),  (ii) designate the date of purchase,
which date shall be not less than ten (10) days nor more than  twenty  (20) days
from the effective date of such Call Notice (provided that such date of purchase
shall be extended to the extent  necessary to comply promptly with the HSR Act),
and (iii) state the applicable Holder's Put/Call Price.

            I.4  Determination of Fair Market Value and Holder's Put/Call Price.
Within sixty (60) days after the end of each  Contract  Year,  the Company shall
prepare and  deliver to the Buyer and the Holder a statement  of the Fair Market
Value of the Company for such  Contract Year and the related  Holder's  Put/Call
Price and any unpaid Related  Equity Bonus  Payment.  Buyer and the Holder shall
have a period of fifteen (15) days after  delivery of such  statement to present
in writing to the other party any objections the objecting party may have to the
statement of the Fair Market Value of the Company for such Contract Year and the
related  Holder's  Put/Call  Price,  which  objections  shall  be set  forth  in
reasonable  detail.  If no  objections  are raised  within such fifteen (15) day
period by the Buyer or by any Holder,  the calculations of the Fair Market Value
of the Company for such Contract Year and the related  Holder's  Put/Call  Price
shall be deemed  accepted and approved by the parties hereto and shall be final,
binding and conclusive upon the parties and be deemed finally determined on such
fifteenth (15th) day (or such earlier date as may be agreed to in writing by the
Buyer and the  Holder).  If either  party shall  object in any respect as to the
calculation  of the Fair  Market  Value of the Company  for such  Contract  Year
and/or the related  Holder's  Put/Call  Price,  the parties shall use their best
efforts promptly to resolve the matter or matters in disagreement.  If the Buyer
and the  majority  in  interest  of the  objecting  Holders  under the  Put/Call
Agreements resolve the matter or matters in disagreement,  the parties shall, in
writing,  either confirm or revise the Company's calculations of the Fair Market
Value of the Company for such  Contract Year and the related  Holder's  Put/Call
Price and such  calculations  shall be final,  binding and  conclusive  upon the
Buyer and all Management Members, whether or not objecting Holders, and shall be
deemed finally determined on the date of such written  confirmation or revision.
If the Buyer and the  majority in interest of the  objecting  Holders  under the
Put/Call  Agreements are unable to resolve the matter or matters in disagreement
within ten (10) days following receipt of written notice from the last objecting
party of such party's  objections,  then the items in dispute shall be submitted
to a mutually agreed upon "big six" accounting firm (the "Neutral  Accountants")
for resolution. Each party shall furnish or cause to be furnished to the Neutral
Accountants such workpapers and other documents and information  relating to the
disputed issues as the Neutral Accountants may request and are available to that
party (or its independent public accountants),  and each party shall be afforded
the opportunity to present to the Neutral  Accountants any material  relating to
the determination and to discuss the determination with the Neutral Accountants.
The  Neutral  Accountants  shall be directed  to furnish  written  notice to the
parties of their  resolution of any disputed  issues referred to them as soon as
practicable  but in no event later than twenty (20) days  following the referral
of such disputed issues to the Neutral  Accountants.  The  determination  by the
Neutral  Accountants,  as set forth in such notice,  shall be final, binding and
conclusive upon the Buyer and all Management  Members,  whether or not objecting
Holders,  on the date of such notice.  The fees of the Neutral  Accountants,  if
required  hereunder,  shall be borne by whichever of the Buyer and the objecting
Holders whose position as presented to the Neutral  Accountants is furthest from
the final determination.

            I.5  Equity  Bonus  Shares.  Immediately  upon  the  payment  of the
Holder's Put/Call Price as contemplated by this Agreement, to permit the Company
to make any previously unpaid Related Equity Bonus Payment, the Buyer shall make
a capital  contribution  to the  Company  in the amount of such  unpaid  Related
Equity  Bonus  Payment.  The Company  shall for these  purposes be a third party
beneficiary entitled to enforce this Agreement.

            I.6  Representations and Warranties of the Holder. The Holder hereby
represents and warrants to the Buyer as follows:

                  (a) The  Holder  has the legal  right,  power,  authority  and
capacity to execute and deliver this Agreement,  to consummate the  transactions
contemplated hereby and to perform the Holder's obligations hereunder.

                  (b) This Agreement has been duly executed and delivered by the
Holder and is a legal,  valid and binding  obligation of the Holder  enforceable
against the Holder in accordance with its terms, except as limited by the effect
of bankruptcy, insolvency, reorganization,  moratorium and similar laws relating
to or affecting  creditors'  rights  generally and court  decisions with respect
thereto.

                  (c) Neither the execution  and delivery of this  Agreement nor
the  consummation  of  the  transactions  contemplated  hereby  will  (i) to the
Holder's  knowledge,  conflict with or violate any provision of law, domestic or
foreign,  applicable  to or  binding  upon  the  Holder,  (ii)  to the  Holder's
knowledge,  violate any provision of any regulation,  order, writ, injunction or
decree  of any  court  or  Governmental  Entity  (as  defined  in  the  Purchase
Agreement)  applicable to or binding upon the Holder or (iii) violate,  conflict
with,  result in a breach of,  constitute  a default  (or an event  which,  with
notice or lapse of time or both, would constitute a default) under, or result in
the termination,  cancellation or acceleration of, any lease, license, contract,
agreement, commitment or instrument to which the Holder is a party.

                  (d) The  Holder has as of the date of this  Agreement,  and at
the date of any  Transfer  of Class A Shares to the Buyer  pursuant  hereto will
have, good, valid and marketable title to the Class A Shares,  free and clear of
all liens,  restrictions  and  encumbrances  (other  than those set forth in the
Operating Agreement),  and the right, power and capacity to Transfer and deliver
the same as contemplated  by this  Agreement,  free and clear of all such liens,
restrictions and encumbrances,  subject to the terms of the Operating  Agreement
(including,  without limitation,  provisions therein restricting the Transfer of
Class A Shares).

            I.7  Covenant  of the Holder.  The Holder  hereby  acknowledges  and
agrees  that the  Holder's  Put/Call  Price  pursuant to this  Agreement  may be
equitably  reduced as and to the  extent  contemplated  by  Section  7.11 of the
Operating Agreement.

            I.8  Representations  and Warranties of the Buyer.  The Buyer hereby
represents and warrants to the Holder and the Company as follows:

                  (a) The  Buyer  has full  corporate  power  and  authority  to
execute and deliver this Agreement, to consummate the transactions  contemplated
hereby and to perform its obligations hereunder.

                  (b) This Agreement has been duly and validly authorized by all
necessary corporate action of the Buyer, has been duly executed and delivered by
the Buyer and is a legal, valid and binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms,  except as limited by the effect
of bankruptcy, insolvency, reorganization,  moratorium and similar laws relating
to or affecting  creditors'  rights  generally and court  decisions with respect
thereto.

                  (c) Neither the execution  and delivery of this  Agreement nor
the consummation of the transactions  contemplated hereby will (i) conflict with
or violate any provision of law,  domestic or foreign,  applicable to or binding
upon the Buyer,  (ii) violate any  provision  of any  regulation,  order,  writ,
injunction  or decree of any court or  Governmental  Entity  (as  defined in the
Purchase  Agreement)  applicable to or binding upon the Buyer or (iii)  violate,
conflict with,  result in a breach of,  constitute a default (or an event which,
with notice or lapse of time or both,  would  constitute  a default)  under,  or
result in the termination,  cancellation or acceleration of, any lease, license,
contract, agreement, commitment or instrument to which the Buyer is a party.

            I.9 Notices.  Except as expressly  set forth to the contrary in this
Agreement,  all  notices,  requests,  instructions  or consents  provided for or
permitted to be given under this Agreement must be in writing and shall be given
either by registered or certified mail, addressed to the recipient,  with return
receipt  requested,  or by delivering the writing to the recipient in person, by
courier, or by facsimile  transmission;  and a notice,  request,  instruction or
consent given under this  Agreement is effective  upon receipt or three (3) days
after the date mailed,  whichever is sooner.  Whenever any notice is required to
be given by law or this Agreement, a written waiver thereof signed by the Person
entitled to notice,  whether before or after the time stated  therein,  shall be
deemed  equivalent  to  the  giving  of  such  notice.  All  notices,  requests,
instructions and consents to be given to the Holder or the Buyer must be sent or
delivered  at the  address  given for that  party as  specified  below or,  with
respect to the Holder,  such other  address as the Holder may specify by written
notice to the Buyer and the Company or,  with  respect to the Buyer,  such other
address  as the Buyer may  specify  by  written  notice  to the  Holder  and the
Company:

                             If to the Buyer:Phoenix Duff & Phelps Corporation
                                                           56 Prospect Street
                                             Hartford, Connecticut 06115-0480
                                           Attention: Chief Executive Officer
                                                    Telephone: (860) 453-5365
                                                    Facsimile: (860) 403-5455

                                                              With copies to:

                                            Phoenix Duff & Phelps Corporation
                                                           56 Prospect Street
                                             Hartford, Connecticut 06115-0480
                                           Attention: Thomas N. Steenburg, Esq.
                                           Vice President and General Counsel
                                                    Telephone: (860) 403-5261
                                                    Facsimile: (860) 403-7600

                                                                          and

                                                Stroock & Stroock & Lavan LLP
                                                              180 Maiden Lane
                                                New York, New York 10038-4982
                                           Attention: David L. Finkelman, Esq.
                                                    Telephone: (212) 806-5400
                                                    Facsimile: (212) 806-6006

                                  If to the Holder:___________________________
                                                  ===========================
                                                                   Attention:
                                                                   Telephone:
                                                                   Facsimile:

                                                              With a copy to:

                                                Seneca Capital Management LLC
                                                    909 Montgomery, Suite 500
                                                     San Francisco, CA  94133
                                                   Attention:  Gail P. Seneca
                                                   Telephone:  (415) 677-1550
                                                   Facsimile:  (415) 677-1629

                                                                          and

                                                 Goodwin, Procter & Hoar  LLP
                                                               Exchange Place
                                                              53 State Street
                                             Boston, Massachusetts 02109-2881
                                           Attention:  Richard E. Floor, P.C.
                                                   Telephone:  (617) 570-1260
                                                   Facsimile:  (617) 570-8150

            I.10   Survival   of    Representations    and    Warranties.    All
representations,  warranties  and  agreements  in this  Agreement  shall survive
execution and delivery hereof and any Transfer of Class A Shares pursuant hereto
until the later of (i) expiration of the final Put/Call  Period in year 2002 and
(ii) the date that is the second anniversary of the purchase by the Buyer of all
Class A Shares held by the Holder pursuant hereto.

            I.11 Equitable Relief. The Buyer and the Holder each acknowledge and
agree  that the  other  would be  irreparably  damaged  in the  event any of the
provisions of this  Agreement  were not  performed by it in accordance  with the
specific terms or were otherwise  breached and that monetary  damages will be an
inadequate remedy of such non-performance or breach. Accordingly, in addition to
any other  remedy that the damaged  party may have,  the damaged  party shall be
entitled to enforce the specific performance of the provisions of this Agreement
and  to  seek  both  permanent  and  temporary   relief  in  the  event  of  any
non-performance of breach hereof.

            I.12  Counterparts.  This Agreement may be executed in any number of
counterparts   (including  executed  counterparts  delivered  and  exchanged  by
facsimile  transmission)  with the same  effect as if all  signing  parties  had
originally  executed the same document,  and all counterparts shall be construed
together and shall constitute the same instrument.

            I.13 Entire Agreement.  This Agreement,  the Purchase Agreement, the
Operating  Agreement  and the other  agreements  referred  to herein or therein,
dated as of the Effective Date,  constitute the entire  agreement of the parties
hereto  with  respect to the  transactions  contemplated  hereby and thereby and
supersede any and all other oral or written agreements heretofore.

            I.14 Amendments. This Agreement may be amended or modified from time
to time only (a) by a written  instrument  signed by the Buyer and the Holder or
(b) by agreement of the Buyer and all Holders by Management Vote,  provided that
all Put/Call Agreements are amended in the same manner; provided,  however, that
any such amendment or modification  that contradicts the provisions or intent of
the Operating Agreement shall be null and void and of no effect whatsoever.

            I.15  Governing  Law.  This  Agreement  is  governed by and shall be
construed in accordance  with the laws of the State of California,  exclusive of
its conflict-of-laws principles.

            I.16  Severability.  If  any  provision  of  this  Agreement  or the
application   thereof  to  any  Person  or   circumstance  is  held  invalid  or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision shall be enforced to the fullest extent permitted by law.

            I.17  Assignment.  Except  upon a Transfer  of Class A Shares by the
Holder  as  permitted  by and in  accordance  with the  terms  of the  Operating
Agreement, this Agreement may not be assigned in whole or in part by the Holder,
without the prior  written  consent of the Buyer.  Upon any  Transfer of Class A
Shares by the Holder in accordance  with the terms of the  Operating  Agreement,
the  Transferee   shall  take  the  Shares  subject  to  this  Agreement  and  a
proportionate  share of the rights and obligations under this Agreement shall be
deemed to be  transferred  to the  Transferee,  effective  upon  such  Transfer.
Promptly upon request,  each of the parties hereto (including without limitation
any  Transferee)  agrees to enter  into  such  further  agreements  or take such
further  actions as may be reasonably  necessary or  appropriate to reflect such
Transfer and the rights and  obligations of the parties  thereafter or resulting
therefrom.  No assignment by the Buyer of this Agreement shall relieve the Buyer
of any of its  obligations  under this  Agreement,  and the Buyer may not assign
this  Agreement  (except  by  operation  of  law  as a  result  of a  merger  or
consolidation transaction) without the written consent of the Holder.

            I.18 Binding Effect.  Subject to the  restrictions on assignment set
forth  herein,  this  Agreement  is binding on and inures to the  benefit of the
parties hereto and their respective heirs, legal representatives, successors and
permitted  assigns,   and  the  term  "Holder"  shall  include  any  such  heir,
representative, successor or assign.

            I.19  Interpretation.  For  purposes of this  Agreement,  all nouns,
pronouns  and verbs used in this  Agreement  shall be  construed  as  masculine,
feminine,  neuter, singular or plural, whichever shall be applicable.  Titles or
captions of Sections  contained  in this  Agreement  are inserted as a matter of
convenience and for reference,  and in no way define,  limit, extend or describe
the scope of this Agreement or the intent of any provision hereof.

                                [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


             IN WITNESS  WHEREOF,  the Buyer and the Holder have  executed  this
Agreement, and the Company has acknowledged and agreed to the provisions of this
Agreement, on and as of the date first above written.


                    BUYER: PHOENIX DUFF & PHELPS CORPORATION


                                         By:
                                                                        Name:
                                                                       Title:


                                     HOLDER:                         [HOLDER]








             Acknowledged and Agreed:



             SENECA CAPITAL MANAGEMENT LLC


             By:
                  Gail P. Seneca, President


    The following individuals were party to an execute Put/Call Agreement
    of the Form described above:

              Richard D. Little 
              Ron K. Jacks
              Charles Dicke
              Laura Pantaleo
              Janice Diamond
              Sandra Westhoff 
              Belinda Melton
              Harold Nathan