SIEBERT, BRANDFORD, SHANK & CO., LLC

                               OPERATING AGREEMENT

                           Dated as of March 10, 1997


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                                                   TABLE OF CONTENTS

                                                                                                               Page

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ARTICLE I
                                                    Definitions.................................................  1
         SECTION 1.1  Definitions...............................................................................  1

ARTICLE II
                                                   Organization.................................................  7
         SECTION 2.1  Formation.................................................................................  7
         SECTION 2.2  Name......................................................................................  7
         SECTION 2.3  Principal Place of Business...............................................................  7
         SECTION 2.4  Term......................................................................................  7
         SECTION 2.5  Purposes and Powers.......................................................................  7
         SECTION 2.6  Title to Property.........................................................................  7
         SECTION 2.7  Certificates of Interest..................................................................  7
         SECTION 2.8  General Rights............................................................................  8
         SECTION 2.9  General Protective Provisions.............................................................  9

ARTICLE III
                                                      Members...................................................  9
         SECTION 3.1  Names and Addresses.......................................................................  9
         SECTION 3.2  Initial Contributions.....................................................................  9
         SECTION 3.3  Additional Contributions..................................................................  9
         SECTION 3.4  Withdrawal of Capital.....................................................................  9
         SECTION 3.5  No Interest on Capital.................................................................... 10
         SECTION 3.6  Admission of Members...................................................................... 10
         SECTION 3.7  Resignation of Member..................................................................... 10
         SECTION 3.8  Outside Business.......................................................................... 10
         SECTION 3.9  Representation and Warranties............................................................. 10
         SECTION 3.10  Power of Attorney........................................................................ 10

ARTICLE IV
                                                Meetings of Members............................................. 11
         SECTION 4.1  Annual Meeting............................................................................ 11
         SECTION 4.2  Special Meetings.......................................................................... 11
         SECTION 4.3  Place of Meetings......................................................................... 11
         SECTION 4.4  Notice of Meetings........................................................................ 11
         SECTION 4.5  Record Date............................................................................... 11
         SECTION 4.6  Waiver of Notice.......................................................................... 12
         SECTION 4.7  Number of Votes........................................................................... 12
         SECTION 4.8  Quorum.................................................................................... 12
         SECTION 4.9  Manner of Acting.......................................................................... 12
         SECTION 4.10  Action by Members Without a Meeting...................................................... 12
         SECTION 4.11  Action by Communication Equipment........................................................ 13

ARTICLE V
                                                 Board of Managers.............................................. 13
         SECTION 5.1  General Powers............................................................................ 13
         SECTION 5.2  Binding Authority......................................................................... 13
         SECTION 5.3  Number and Term of Office................................................................. 14

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         SECTION 5.4  Resignation and Vacancies................................................................. 14
         SECTION 5.5  Meetings.................................................................................. 14
         SECTION 5.6  Compensation; Expenses.................................................................... 16
         SECTION 5.7  Fiduciary Duty............................................................................ 16
         SECTION 5.8  Certain Matters Requiring Approval........................................................ 16

ARTICLE VI
                                             Chairpersons and Officers.......................................... 18
         SECTION 6.1  Chairperson............................................................................... 18
         SECTION 6.2  Election, Appointment and Term of Office.................................................. 18
         SECTION 6.3  Resignation, Removal and Vacancies........................................................ 19
         SECTION 6.4  Duties and Functions...................................................................... 19
         SECTION 6.5  Committees................................................................................ 20
         SECTION 6.6  Powers and Duties of Committees........................................................... 20

ARTICLE VII
                                Books and Records; Right of Inspection; Tax Matters............................. 21
         SECTION 7.1  Books and Records......................................................................... 21
         SECTION 7.2  Information............................................................................... 21
         SECTION 7.3  Tax Returns............................................................................... 21
         SECTION 7.4  Tax Elections............................................................................. 21
         SECTION 7.5  Tax Matters Partner....................................................................... 21
         SECTION 7.6  No Partnership............................................................................ 22

ARTICLE VIII
                                                 Capital Accounts............................................... 22
         SECTION 8.1  Maintenance............................................................................... 22
         SECTION 8.2  Adjustments............................................................................... 22
         SECTION 8.3  Market Value Adjustments.................................................................. 23
         SECTION 8.4  Transfer.................................................................................. 23

ARTICLE IX
                                         Allocations and Accounting Method...................................... 23
         SECTION 9.1  Determination............................................................................. 23
         SECTION 9.2  Allocations of Net Profits, Net Losses,
                      and Other Items........................................................................... 23
         SECTION 9.3  Allocations in the Event of Property
                      Distribution.............................................................................. 24
         SECTION 9.4  Special Rules............................................................................. 24
         SECTION 9.5  Tax Allocations........................................................................... 27

ARTICLE X
                                                   Distributions................................................ 28
         SECTION 10.1  Distributions............................................................................ 28
         SECTION 10.2  Withholding.............................................................................. 28
         SECTION 10.3  Offset................................................................................... 28
         SECTION 10.4  Limitation Upon Distributions............................................................ 28
         SECTION 10.5  Accounting Period and Method............................................................. 29
         SECTION 10.6  Tax Distributions........................................................................ 29

ARTICLE XI
                                                  Indemnification............................................... 29

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         SECTION 11.1  Indemnification.......................................................................... 29
         SECTION 11.2  Indemnification Not Exclusive............................................................ 30

ARTICLE XII
                                                    Dissolution................................................. 30
         SECTION 12.1  Dissolution.............................................................................. 30
         SECTION 12.2  Event of Withdrawal...................................................................... 31
         SECTION 12.3  Bankruptcy............................................................................... 31
         SECTION 12.4  Continuation............................................................................. 31

ARTICLE XIII
                                                    Liquidation................................................. 32
         SECTION 13.1  Liquidation.............................................................................. 32
         SECTION 13.2  Priority of Payment...................................................................... 32
         SECTION 13.3  Timing................................................................................... 32
         SECTION 13.4  Liquidating Reports...................................................................... 33
         SECTION 13.5  Certificate of Cancellation.............................................................. 33
         SECTION 13.6  Deficit Capital Account.................................................................. 33
         SECTION 13.7  Nonrecourse to Other Members............................................................. 33

ARTICLE XIV
                                                  Transferability............................................... 33
         SECTION 14.1  General.................................................................................. 33
         SECTION 14.2  First Refusal Rights..................................................................... 34
         SECTION 14.3  Right to Compel Sale..................................................................... 36
         SECTION 14.4  Right to Purchase........................................................................ 37
         SECTION 14.5  Call Right............................................................................... 38
         SECTION 14.6  Transferee Rights........................................................................ 39
         SECTION 14.7  Effective Date........................................................................... 40
         SECTION 14.8  Secured Party............................................................................ 40

ARTICLE XV
                                                General Provisions.............................................. 40
         SECTION 15.1  Waiver of Dissolution Rights............................................................. 40
         SECTION 15.2  Waiver of Partition Right................................................................ 40
         SECTION 15.3  Waivers Generally........................................................................ 40
         SECTION 15.4  Equitable Relief......................................................................... 41
         SECTION 15.5  Remedies for Breach...................................................................... 41
         SECTION 15.6  Costs.................................................................................... 41
         SECTION 15.7  Counterparts............................................................................. 41
         SECTION 15.8  Notice................................................................................... 41
         SECTION 15.9  Date of Performance...................................................................... 42
         SECTION 15.10  Limited Liability....................................................................... 42
         SECTION 15.11  Partial Invalidity...................................................................... 42
         SECTION 15.12  Entire Agreement........................................................................ 42
         SECTION 15.14  Benefit................................................................................. 43
         SECTION 15.15  Binding Effect.......................................................................... 43
         SECTION 15.16  Further Assurances...................................................................... 43
         SECTION 15.17  Headings................................................................................ 43
         SECTION 15.18  Terms................................................................................... 43
         SECTION 15.19  Conversion.............................................................................. 43
         SECTION 15.20  Governing Law; Consent to Jurisdiction.................................................. 44

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                      SIEBERT, BRANDFORD, SHANK & CO., LLC

                               OPERATING AGREEMENT

     This Operating Agreement (the "Agreement"),  dated as of March 10, 1997, is
entered  into by and among  Siebert,  Brandford,  Shank & Co.,  LLC,  a Delaware
limited  liability  company  (the  "Company"),  Muriel  Siebert & Co.,  Inc.,  a
Delaware corporation  ("Siebert"),  Napoleon Brandford III, an individual having
an address as set forth in Schedule I attached hereto ("Brandford"), and Suzanne
F. Shank,  an  individual  having an address as set forth on Schedule I attached
hereto ("Shank").

     WHEREAS,  the Persons  signing this  Agreement  desire to  establish  their
respective  rights and obligations  pursuant to the Delaware  Limited  Liability
Company Act in connection with forming and operating the Company.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are acknowledged,  the Persons signing this Agreement below
agree as follows:


                                    ARTICLE I
                                   Definitions

     SECTION 1.1 Definitions.  In this Agreement, the following terms shall have
the meanings set forth below:

          (a) "Act" means the Delaware Limited Liability Company Act, as amended
from time to time including any amendatory or successor provisions thereto.

          (b) "Adjusted Capital Account" means, with respect to any Member,  the
balance in such Member's  Capital  Account as of the end of the relevant  Fiscal
Year, after giving effect to the following adjustments:

               (i) such Capital  Account  shall be deemed to be increased by any
amounts  that such Member is  obligated  to restore to the Company  (pursuant to
this Agreement or otherwise) or is deemed to be obligated to restore pursuant to
(A) the penultimate sentence of section 1.704-2(g)(1) of the Regulations, or (B)
the penultimate sentence of section 1.704-2(i)(5) of the Regulations; and

               (ii) such Capital  Account shall be deemed to be decreased by the
items  described  in  sections  1.704-1(b)(2)(ii)(d)(4),  (5)  and  (6)  of  the
Regulations.

     The foregoing  definition of Adjusted Capital Account is intended to comply
with the provisions of section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted and applied consistently therewith.

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          (c)  "Affiliate"  of a  party  means  any  entity  which  directly  or
indirectly  controls,  is controlled by or is under the common control with such
party. The term "control",  with respect to an entity, means the power to direct
the  affairs  of such  entity  by  reason of  ownership  of  equity  securities,
contract, or otherwise.

          (d) "Available  Cash" means,  with respect to any fiscal quarter,  all
cash receipts of the Company from any source (excluding  Capital  Contributions)
during such quarter plus cash  available from any reduction in the amount of any
reserves of the Company during such quarter less the sum of the following to the
extent made from such cash receipts or reserves:

               (i) all cash expenditures of the Company made during such quarter
(except   Distributions),   including   expenses  and  costs   incurred  in  the
acquisition,  ownership,  or  management  of the  Company's  property  including
amounts paid for office space as well as salary and bonuses; and

               (ii)  funds  set  aside by the Board of  Managers  as  reasonable
reserves for contingencies,  working capital, debt service,  taxes, insurance or
other costs or expenses incident to the conduct of the Company's business in the
next succeeding fiscal quarter.

          (e)  "Bankruptcy"  shall have the  meaning  ascribed  to it in Section
12.3.

          (f) "Board of Managers"  shall mean a committee of Managers  comprised
in accordance with this Agreement and having the powers set forth herein.

          (g) "Book Value" means, with respect to any asset of the Company,  the
adjusted  basis of such asset as of the  relevant  date for  federal  income tax
purposes;  provided,  however,  that (1) the  initial  Book  Value of any  asset
contributed  by a Member to the Company  shall be such asset's Fair Market Value
on the date of  contribution;  (2) the Book Value of all Company assets shall be
adjusted in accordance with Regulations sections 1.704-  1(b)(2)(iv)(d) and (f);
and (3) if the Book Value of the Company's assets is adjusted as provided in (1)
and (2) above,  the Members'  Capital  Accounts  shall be adjusted in accordance
with Regulations section  1.704-1(b)(2)(iv)(g) for allocations to the Members of
Depreciation and gain or loss with respect to such property.  This definition is
intended  to comply  with the  provisions  of Section  1.704-1(b)(2)(iv)  of the
Regulations and shall be interpreted and applied consistently therewith.

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          (h) "Business Day" means any day other than Saturday or Sunday and any
other day on which banks in  Wilmington,  Delaware or New York, New York are not
open for business.

               (i)  "Capital  Account"  shall have the meaning  ascribed to such
term in Section 8.1.

          (j)  "Capital  Contribution"  means  the  amount  of cash and the Fair
Market Value of property (net of  liabilities  secured by such property that the
Company is  considered  to assume or take  subject to under  Code  section  752)
contributed  to  the  capital  of  the  Company  by a  Member  and  any  Company
liabilities assumed by a Member within the meaning of Regulations section 1.704-
1(b)(2)(iv)(c).  The  contributions  made to the  capital of the  Company by the
Members as of the date hereof are set forth in Schedule I.

          (k)  "Certificate of Formation"  means the Certificate of Formation of
the Company  filed or to be filed with the Office of the  Secretary  of State of
the State of Delaware, as the same may from time to time be amended.

          (l) "Code"  means the Internal  Revenue Code of 1986,  as amended from
time to time, or any superseding federal revenue statute.

          (m) "Combined  Marginal  Rate" means,  for any Fiscal Year, the sum of
(i) the highest marginal federal income tax rate assessable for such year on the
ordinary income of individual  taxpayers and (ii) the highest combined  marginal
state and local income tax rate  assessable for such year on the ordinary income
of individual taxpayers among the various states and localities in which holders
of Units shall be required to file income tax returns after giving effect to the
federal income tax benefit  derived from such state and local taxes based on the
rate determined in the preceding  clause (i), as certified to the Company by the
Members on or before April 1 of the immediately succeeding Fiscal Year.

          (n) "Company" shall have the meaning set forth in the preamble of this
Agreement.

          (o)  "Company  Minimum  Gain" means the  aggregate  amount of gain (of
whatever character),  determined for each Nonrecourse  Liability of the Company,
that would be realized  by the  Company if it  disposed of the Company  property
subject to such liability in a taxable transaction in full satisfaction  thereof
(and for no other  consideration)  and by  aggregating  the amounts so computed,
determined in accordance with sections 1.704-2(d) and (k) of the Regulations.

                                        3

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          (p)  "Depreciation"  means,  for each Fiscal Year or part thereof,  an
amount equal to the depreciation,  amortization or other cost recovery deduction
allowable  for federal  income tax  purposes  with  respect to an asset for such
Fiscal Year or part  thereof,  except that if the Book Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such
Fiscal Year, the depreciation, amortization or other cost recovery deduction for
such Fiscal Year or part  thereof  shall be an amount which bears the same ratio
to such Book Value as the federal income tax depreciation, amortization or other
cost  recovery  deduction  for such  Fiscal Year or part  thereof  bears to such
adjusted tax basis.

          (q) "Disability" means, with respect to Brandford, Shank, or any other
Member who is also an employee or officer of the Company, the incapacity of such
Member due to physical or mental illness or injury to perform  adequately his or
her duties  under his or her  employment  arrangement  with the  Company for one
hundred  twenty (120) days in any twelve (12) month period;  provided,  however,
that for  purposes  of this  definition,  pregnancy  shall not be  considered  a
"Disability"  and neither  maternity  leave nor time spent working  productively
from home shall be counted as part of any one  hundred  twenty  (120) day period
provided herein.

          (r)  "Distribution"  means any money and the Fair Market  Value of any
property (net of liabilities  secured by such property that the Member is deemed
to assume or take  pursuant  to  Section  752 of the  Code)  distributed  by the
Company to the Members in accordance with this Agreement.

          (s)  "Dissolution"  means the happening of any of the events set forth
in Section 12.1.

          (t) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

          (u)  "Event of  Withdrawal"  means,  with  respect  to any  Member the
occurrence   of  such  Member's   death,   insanity,   Bankruptcy,   retirement,
resignation,  expulsion,  adjudication of incompetency,  or any other event that
terminates  the continued  membership of such Person in the Company by operation
of law (including the dissolution of any Member that is not an individual).

          (v) "Exchange Act Rule" means a rule promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934.

          (w) "Fair Market Value" means, with respect to any property, the value
that would be obtained in an arm's  length  transaction  for  ownership  of such
property  for cash  between an informed  and willing  seller and an informed and
willing purchaser, each with an adequate understanding of the facts and under no
compulsion to buy or sell.

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          (x) "Fiscal Year" means the fiscal year of the Company, which shall be
each year ending December 31.

          (y)  "Liquidation"  means the process of winding up the Company  after
its Dissolution.

          (z) "Manager" shall have the meaning set forth in Section 5.1.

          (aa) "Member" means each Person who or which executes a counterpart of
this  Agreement  and is admitted to the Company as a Member in  accordance  with
this Agreement.

          (ab)  "Member  Minimum  Gain" means the  aggregate  amount of gain (of
whatever character),  determined for each Member Nonrecourse Debt, that would be
realized by the Company if it disposed of the Company  property  subject to such
Member  Nonrecourse Debt in a taxable  transaction in full satisfaction  thereof
(and for no other  consideration),  determined in accordance with the provisions
of  sections  1.704-2(i)(3)  and (k) of the  Regulations  for  determining  such
Member's share of minimum gain attributable to a Member Nonrecourse Debt.

          (ac) "Member  Nonrecourse Debt" has the meaning specified for "partner
nonrecourse debt" in section 1.704-2(b)(4) of the Regulations.

          (y) "Member  Nonrecourse  Deductions" has the meaning  ascribed to the
term  "partner   nonrecourse   deductions"  in  section   1.704-2(i)(2)  of  the
Regulations.

          (ad) "Net Losses"  means,  with  respect to any Fiscal  Year,  or part
thereof, of the Company,  the net losses of the Company for such period computed
using Book Values and applying the methods and principles of accounting used for
federal income tax purposes,  including,  as  appropriate,  each item of income,
gain, loss, deduction or credit entering into such determination,  as determined
by the accountants of the Company.  The  determination  of Net Losses shall take
into  account all items of income and  deduction  including  income  exempt from
taxation and related deductions.

          (ae) "Net  Profits"  means,  with respect to any Fiscal Year,  or part
thereof, of the Company, the net profits of the Company for such period computed
using Book Values and applying the methods and principles of accounting used for
federal income tax purposes,  including,  as  appropriate,  each item of income,
gain, loss, deduction or credit entering into such determination, as determined


                                        5

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by the accountants of the Company.  The  determination of Net Profits shall take
into  account all items of income and  deduction  including  income  exempt from
taxation and related deductions.

          (af)  "Nonrecourse  Liability" means any Company liability (or portion
thereof) for which no Member bears the economic risk of loss for such  liability
under section 1.752-2 of the Regulations.

          (ag)  "Person"  means  any   individual,   corporation,   governmental
authority, limited liability company, partnership, trust, estate, unincorporated
association, or other entity.

          (ah)  "Pre-Formation  Expenses"  shall mean any expenses,  budgeted or
unbudgeted,  incurred  directly or  indirectly  by Siebert in excess of revenues
received by Siebert  prior to the  formation  of the Company with respect to the
business of the Company including,  without  limitation,  payroll,  payroll tax,
employment  insurance,   commissions,   rent,  telephone,   quotes,  travel  and
entertainment,  postage, printing, office supplies, dues, donations and the like
from and after  October 1, 1996 through the date hereof.  Such  expenses for the
period from October 1, 1996 through the most recent available date are set forth
on Annex B hereto. Any such expenses from and after such date shall be submitted
to Brandford and Shank for their review and approval.

          (ai)  "Proportionate  Share"  shall mean the  percentage  of the total
number of Units that a Member is entitled  to purchase  pursuant to an option or
right set forth in this  Agreement  equal to the number of Units then owned by a
Member  divided by the  aggregate  number of Units then owned by such Member and
all other Members who are entitled to participate in such option or right.

          (aj) "Regulations" means all proposed, temporary and final regulations
promulgated  and in effect under the Code,  as the same may be amended from time
to time.

          (ak)  "Regulatory  Allocations"  shall have the  meaning  set forth in
Section 9.4(a)(vi).

          (al) "ss.704(b)  Regulations"  shall have the meaning ascribed to such
term in Section 8.1.

          (am) "Tax  Matters  Partner"  shall have the meaning  ascribed to such
term in Section 7.5.

          (an) "Transfer" means a sale, exchange, assignment,  transfer, pledge,
hypothecation  or other  disposition  of a Unit,  or portion  thereof,  (whether
voluntary  or  involuntary)  other than by  operation  of law or to an immediate
family member of a Member who is alive as of the date hereof.

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          (ao) "Unit"  means an  interest  in the Company  having the rights and
characteristics set forth herein.


                                   ARTICLE II
                                  Organization

     SECTION 2.1  Formation.  An  organizer  shall form the Company as a limited
liability company by preparing, executing and filing with the Secretary of State
of Delaware the Certificate of Formation pursuant to Section 18-201 of the Act.

     SECTION 2.2 Name.  The name of the Company is Siebert,  Brandford,  Shank &
Co., LLC.

     SECTION 2.3 Principal Place of Business. The principal place of business of
the  Company  shall be 885 Third  Avenue,  New York,  New  York,  or such  other
location as the Board of Managers may, from time to time, select,  provided that
no such changes of location  shall be made without  giving at least fifteen (15)
days prior written notice thereof to the Members.

     SECTION 2.4 Term.  The Company shall continue in existence from the date of
filing of the Certificate of Formation through the twentieth (20th)  anniversary
of the date  thereof,  unless the Company is dissolved  sooner  pursuant to this
Agreement or the Act; provided, however, that the Board of Managers shall in its
sole discretion have the right to extend the term of the Company for a period of
up to three (3) years.

     SECTION 2.5 Purposes and Powers. The purpose of the Company shall initially
be to provide  investment  banking,  sales and  trading and  financial  advisory
services  to clients  across the  country  focusing on  municipal  finance;  and
thereafter to conduct such other lawful activities as the Members may agree from
time to time.  In  connection  therewith,  the Company shall have all the powers
permitted to a limited  liability  company under the Act or which are necessary,
convenient or advisable and lawful in order for it to conduct its business.

     SECTION 2.6 Title to Property. Title to, and all right and interest in, the
Company's  assets shall be acquired in the name of and held by the Company,  or,
if acquired in any other name, be held for the benefit of the Company.

     SECTION 2.7  Certificates  of  Interest.  Every  holder of record of a Unit
shall be entitled to have a certificate  certifying the number of Units owned by
such Person in the Company. Each certificate evidencing ownership of Units shall
bear and be subject to the following legend:

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                  "THE  UNITS  EVIDENCED  HEREBY  ARE  SUBJECT  TO AN  OPERATING
                  AGREEMENT  DATED AS OF MARCH 10,  1997 (A COPY OF WHICH MAY BE
                  OBTAINED FROM THE ISSUER).  SUCH OPERATING AGREEMENT RESTRICTS
                  THE SALE, PLEDGE,  HYPOTHECATION AND TRANSFER OF THE UNITS AND
                  THE  INTEREST   REPRESENTED  HEREBY  AND  CONTAINS  PROVISIONS
                  GOVERNING  THE VOTING OF THE UNITS.  BY ACCEPTING ANY INTEREST
                  IN SUCH UNITS, THE PERSON ACCEPTING SUCH UNITS SHALL BE DEEMED
                  TO AGREE TO, AND SHALL BECOME BOUND BY, ALL THE  PROVISIONS OF
                  SUCH OPERATING AGREEMENT.

                  NO TRANSFER, SALE, ASSIGNMENT,  PLEDGE, HYPOTHECATION OR OTHER
                  DISPOSITION OF THE UNITS EVIDENCED BY THIS  CERTIFICATE MAY BE
                  MADE EXCEPT AS OTHERWISE PROVIDED IN SUCH OPERATING  AGREEMENT
                  AND (A) PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER
                  THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT"),  ANY
                  APPLICABLE  STATE SECURITIES AND "BLUE SKY" LAWS OR (B) IF NOT
                  PURSUANT TO AN  EFFECTIVE  REGISTRATION  STATEMENT,  THEN ONLY
                  WHEN THE ISSUER HAS BEEN  FURNISHED WITH AN OPINION OF COUNSEL
                  FOR THE HOLDER,  WHICH OPINION AND COUNSEL SHALL BE REASONABLY
                  SATISFACTORY TO THE ISSUER,  TO THE EFFECT THAT SUCH TRANSFER,
                  SALE, ASSIGNMENT,  PLEDGE,  HYPOTHECATION OR OTHER DISPOSITION
                  IS EXEMPT FROM THE  PROVISIONS OF SECTION 5 OF THE ACT AND THE
                  RULES AND  REGULATIONS  IN EFFECT  THEREUNDER  AND SUCH  STATE
                  SECURITIES AND "BLUE SKY" LAWS."

Each such certificate  shall be signed by, or in the name of the Company by, the
Chairperson,  President, or a Vice President, and the Treasurer, or Secretary of
the Company. In case any officer who has signed or whose facsimile signature has
been placed upon a certificate  while such officer was an officer of the Company
but such officer shall have ceased to be an officer  before such  certificate is
issued,  it may nevertheless be issued by the Company with the same effect as if
such individual were an officer at the date of issue.

     SECTION 2.8  General  Rights.  Units  shall not have a stated  value or any
rights to  Distributions  unless the Board of  Managers,  pursuant  to the terms
hereof,  shall have declared such a Distribution out of funds legally  available
therefor. Except as expressly provided herein, no Member holding any class of

                                        8

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Units  shall have  priority  over any other  Member  holding  any other class of
Units, and in no event shall any Member holding any class of Units have priority
over any other Member  holding that same class of Units,  whether for the return
of a Capital  Contribution  or for Net  Profits,  Net Losses or a  Distribution;
provided,  however,  that the  foregoing  shall not apply to loans,  advances or
other  indebtedness (as  distinguished  from a Capital  Contribution)  made by a
Member to the Company.

     SECTION 2.9 General Protective Provisions. Notwithstanding anything else to
the contrary  contained  herein,  the Company shall not, without first obtaining
the approval of those Members  holding of record at least a two-thirds of all of
the votes permitted hereunder:

          (a)  cause  or  permit  the  sale of all or  substantially  all of the
Company's assets;

          (b) cause or permit the merger or consolidation of the Company into or
with another Person;

          (c) cause or permit the conversion of the Company into another form of
business entity; or

          (d) cause or permit to be undertaken by the Company any other material
transactions  or other  activities  not in the ordinary  course of the Company's
business.


                                   ARTICLE III
                                     Members

     SECTION 3.1 Names and Addresses. The names and addresses of the Members are
as set forth in Schedule I to this Agreement.

     SECTION 3.2 Initial Contributions. Each of the Members has agreed to make a
contribution  to the Company in the amount set forth opposite such Member's name
on Schedule I hereto in exchange for the number of Units also set forth opposite
such Member's name on Schedule I hereto.

     SECTION  3.3  Additional  Contributions.  Except as provided in the Act and
Section 3.2 hereof,  no Member will be required to make any  additional  Capital
Contributions or restore any deficit to its Capital Account.

     SECTION 3.4 Withdrawal of Capital.  Except as specifically provided in this
Agreement,  no  Member  will be  entitled  to  withdraw  all or any part of such
Person's Capital Account from the Company prior to the Company's Dissolution and
Liquidation or to demand a Distribution of property or money.


                                        9

<PAGE>

     SECTION 3.5 No  Interest on Capital.  No Member will be entitled to receive
interest on such Person's Capital Account or any Capital Contribution.

     SECTION  3.6  Admission  of  Members.  A Person may be admitted as a Member
after the date of this Agreement only upon the unanimous consent of the Board of
Managers.

     SECTION 3.7  Resignation  of Member.  No Member may be  permitted to resign
without the consent of the Board of Managers.

     SECTION  3.8 Outside  Business.  Any Manager or any Member may engage in or
possess an interest  in other  business  ventures of any nature or  description,
independently  or with others,  except  business  ventures which are competitive
with the  business  of the  Company or which  detracts  from such  Manager's  or
Member's handling of the Company's  business.  The Company and the Members shall
have no rights by virtue of this Agreement in and to such  independent  ventures
or the income or profits derived therefrom,  and the pursuit of any such venture
shall not be deemed wrongful or improper.

     SECTION 3.9 Representation and Warranties.  Each Member,  hereby represents
and warrants to the Company and each other Member that: (a) if that Member is an
organization,  that it is duly organized, validly existing, and in good standing
under the law of its state of organization  and that it has full  organizational
power to execute  and agree to this  Agreement  and to perform  its  obligations
hereunder;  (b) that the  Member is  acquiring  its Units for the  Member's  own
account as an investment and without an intent to distribute the Units;  (c) the
Member acknowledges that the Units have not been registered under the Securities
Act of 1933, as amended,  or any state securities laws, and may not be resold or
transferred by the Member without  appropriate  registration or the availability
of an exemption from such requirements.

     SECTION 3.10 Power of Attorney.  (a) Each Member hereby  appoints the Board
of Managers, and any officer duly appointed thereby,  acting individually,  with
power   of   substitution,   as  its   true  and   lawful   representative   and
attorney-in-fact,  in  its  name,  place  and  stead  to  make,  execute,  sign,
acknowledge,  swear to and file: (i) any and all instruments,  certificates, and
other  documents  that may be  deemed  necessary  or  desirable  to  effect  the
Dissolution or  Liquidation  of the Company,  provided that such action has been
approved in  accordance  with this  Agreement;  (ii) any  business  certificate,
fictitious name certificate, or amendment thereto, or required by any applicable
federal,  state or local law; and (iii) all amendments or  modifications to this
Agreement,  provided that such  amendment or  modification  has been approved in
accordance with Section 15.13.

                                       10

<PAGE>

          (b) The power of  attorney  hereby  granted by each  Member is coupled
with an interest,  is irrevocable,  and shall survive, and shall not be affected
by, the subsequent death,  disability,  incapacity,  incompetency,  termination,
Bankruptcy or insolvency of such Member.


                                   ARTICLE IV
                               Meetings of Members

     SECTION 4.1 Annual Meeting. A meeting of the Members shall be held annually
for the  transaction of business as may properly come before the Members at such
meeting. The annual meeting of the Members shall be held on the third Tuesday in
March  or at such  other  time as  shall be  determined  by the vote or  written
consent of the Board of Managers and the Members holding a majority of the votes
permitted  hereunder,  except that no annual meeting need be held if all actions
required by this Agreement to be taken at an annual meeting of Members are taken
by written consent in lieu of a meeting pursuant to Section 4.10.

     SECTION 4.2 Special  Meetings.  Special  meetings of the  Members,  for any
purpose,  may be called by any Member or Members  holding  not less than  twenty
five  percent  (25%)  of the  votes  permitted  hereunder,  or by the  Board  of
Managers.

     SECTION 4.3 Place of  Meetings.  Meetings of the Members may be held at any
place, within or outside the State of Delaware.  If no such designation is made,
the place of any such meeting shall be the principal office of the Company.

     SECTION 4.4 Notice of Meetings.  Written notice stating the place,  day and
time of the  meeting,  the purpose or purposes  for which the meeting is called,
and by whom the meeting was called, shall be delivered no fewer than ten (10) or
more than sixty (60) days before the date of the meeting.

     SECTION  4.5 Record  Date.  For the  purpose  of  determining  the  Members
entitled to notice of or to vote at any meeting of Members or any adjournment of
such meeting, or Members entitled to receive payment of any Distribution,  or to
make a  determination  of Members for any other purpose,  the date five (5) days
prior to the date on which  notice of the meeting is mailed or the date on which
the  resolution   declaring  the   Distribution   is  adopted  or  the  date  of
determination of Members for any other purpose, as the case may be, shall be the
record date for making such a  determination.  When a  determination  of Members
entitled  to vote at any  meeting  of  Members  has been made  pursuant  to this
Section 4.5, the  determination  shall apply to any  adjournment of the meeting.
For the purpose of  determining  the Members  for any other  purpose  (excluding
entitlement to Distributions  which shall be governed by the provision contained
in Section  10.1),  the date  established by the Board of Managers as the record
date for making  such  determination  shall be deemed to be the record  date for
making such a determination.

                                       11

<PAGE>

     SECTION 4.6 Waiver of Notice.  Notice of a meeting need not be given to any
Member who  submits a signed  waiver of notice,  in person or by proxy,  whether
before or after the  meeting.  The  attendance  of any Member at a  meeting,  in
person or by proxy,  without  protesting  prior to the conclusion of the meeting
the lack of notice of such meeting,  shall  constitute a waiver of notice by him
or her.

     SECTION 4.7 Number of Votes.  With respect to all matters  requiring  their
vote,  each Member  shall be entitled to one vote in person or by proxy for each
one Unit such Member holds.

     SECTION 4.8 Quorum.  At each  meeting of the  Members,  except as otherwise
required  by the Act,  Members  holding  not less than a majority  of all of the
votes permitted hereunder, represented in person or by proxy, shall constitute a
quorum  for the  transaction  of  business.  In the  absence  of a quorum at any
meeting of Members,  Members  holding a majority of the votes so represented may
adjourn  the meeting  for a period not to exceed ten (10) days  without  further
notice.  If the  adjournment  is for more  than ten (10)  days,  or if after the
adjournment  a new record date is fixed for the adjourned  meeting,  a notice of
the adjourned  meeting shall be given to each Member of record  entitled to vote
at such meeting.  At a rescheduled meeting at which a quorum shall be present or
represented,  any business may be transacted  that might have been transacted at
the meeting as originally noticed. The Members present at a meeting may continue
to transact business until  adjournment,  notwithstanding  the withdrawal during
the meeting of a Person or Persons  holding votes whose absence  results in less
than a quorum being present.

     SECTION 4.9 Manner of Acting.  If a quorum is present at any  meeting,  the
vote or written consent of Members holding not less than a majority of the votes
permitted  hereunder  shall  be the act of the  Members,  unless  the  vote of a
greater or lesser  proportion  or number is  otherwise  required by the Act, the
Certificate of Formation or this Agreement.

     SECTION 4.10 Action by Members  Without a Meeting.  Any action  required or
permitted  to be taken at any annual or special  meeting of the  Members  may be
taken without a meeting, without prior notice and without a vote if a consent or
consents in writing,  setting forth the action so taken,  shall be signed by the
Members who hold of record the minimum  number of votes that would be  necessary
to  authorize  or to take  such  action at a  meeting  at which all the  Members
entitled to vote  thereon  were  present and voted and shall be delivered to the
officer or individual of the Company who shall have charge of its records.

                                       12

<PAGE>

Every  consent  must  be  signed  and  dated  by  the  Member  or  the  Member's
attorney-in-fact.  Any  consent  given  under  a  power-of-  attorney  shall  be
presented together with the executed, dated and notarized document granting such
power upon the Person  claiming  the same.  No consent  shall be valid after the
expiration  of thirty (30) days from the date  thereof.  Every  consent shall be
revocable  at  the  pleasure  of the  Member  executing  it.  In  the  event  of
conflicting consents, the later dated consent shall govern.

     SECTION 4.11 Action by Communication Equipment. The Members may participate
in  a  meeting  of  Members  by  means  of   conference   telephone  or  similar
communications  equipment  by means of which all  persons  participating  in the
meeting can hear or otherwise  interactively  communicate  with each other,  and
such participation shall constitute presence in person at such meeting.


                                    ARTICLE V
                                Board of Managers

     SECTION 5.1 General Powers.  (a) Subject to the rights expressly granted to
the  Members  under this  Agreement,  the Board of Managers  and the  authorized
officers  of the  Company  appointed  by the Board of  Managers  shall  have the
exclusive authority and responsibility to manage the business of the Company.

          (b) The members of the Board of  Managers  (the  "Managers")  shall be
"managers" within the meaning of the Act. Except as set forth in this Agreement,
the Board of Managers shall have power and authority,  on behalf of the Company,
to take any and all lawful acts that the Board of Managers considers  necessary,
advisable,  or in the best  interests  of the  Company  in  connection  with any
business of the Company,  including,  without  limitation:  (i) to authorize the
purchase,  lease or other acquisition,  or the sale, lease or other disposition,
of any property;  (ii) to open, maintain and close bank accounts, draw checks or
other  orders for the  payment  of moneys  and invest the funds of the  Company;
(iii) to  authorize  the purchase of insurance on the business and assets of the
Company;  (iv) to commence lawsuits and other proceedings;  (v) to authorize the
Company to enter into any agreement, instrument or other writing; (vi) to retain
accountants,  attorneys,  consultants,  appraisers  or other agents or advisors;
(vii) to  appoint  and  remove  officers  of the  Company;  and  (viii)  to hire
employees and establish base salaries and award  discretionary  bonuses with the
recommendation of Brandford and Shank.

     SECTION 5.2 Binding Authority.  Unless specifically  authorized to do so by
this  Agreement,  no Member or other Person shall have any power or authority to
bind the Company,  unless such Member or other Person has been authorized by the
Board of Managers to act on behalf of the Company.


                                       13

<PAGE>

     SECTION 5.3 Number and Term of Office. The number of Managers  constituting
the Board of Managers shall be three (3). Each of Brandford and Shank shall be a
Manager  as well as one person  designated  by Siebert  who  initially  shall be
Muriel F. Siebert.  Such persons shall hold offices until their successors shall
have been appointed and shall have qualified.

     SECTION 5.4  Resignation  and Vacancies.  (a) Any Manager may resign at any
time by  giving  written  notice  of his  resignation  to the  Chairperson,  the
President,  or the  Secretary of the Company.  Any such  resignation  shall take
effect at the time  specified  therein,  or,  if the time  when it shall  become
effective shall not be specified  therein,  when accepted by action of the Board
of Managers.  Except as aforesaid,  the acceptance of such resignation shall not
be necessary to make it effective.

          (b) Any vacancy which shall occur on the Board of Managers, whether by
resignation,  death,  or otherwise,  shall be filled by a designee of the Member
whose seat is being vacated.

     SECTION 5.5 Meetings.
             -------------

          (a) Annual Meetings.  As soon as practicable after each annual meeting
of Members, the Board of Managers shall meet for the purpose of organization and
the transaction of other business.

          (b) Regular Meetings.  Regular meetings of the Board of Managers shall
be  held at  such  times  as the  Board  of  Managers  shall  from  time to time
determine.

          (c) Special Meetings.  Special meetings of the Board of Managers shall
be held whenever called by the Chairperson,  the President or any Manager at the
time in office. Any and all business may be transacted at a special meeting that
may be transacted at a regular meeting of the Board of Managers.

          (d) Place of Meeting.  The Board of Managers  may hold its meetings at
such place or places  within or without  the State of  Delaware  as the Board of
Managers may from time to time by resolution determine or as shall be designated
in the respective notices or waivers of notice thereof.

          (e) Notice of Meetings.  Notice of any regular,  special, or adjourned
meeting  of the  Board  of  Managers  shall be  mailed  by the  Secretary  or an
Assistant Secretary of the Company to each Manager,  addressed to such Person at
such  Person's  residence  or usual place of  business,  so as to be received at
least two (2) calendar days before the day on which such meeting is to be held,

                                       14

<PAGE>

or shall be sent to such Person by telecopy,  telegraph,  cable or other form of
recorded  communication  or be delivered  personally not later than the close of
business  one (1)  calendar  day before  the day on which such  meeting is to be
held.  Such notice shall  include the time and place of such  meeting.  However,
notice of any such meeting need not be given to any Manager if waived in writing
or by  telecopy,  telegraph,  cable or  other  form of  recorded  communication,
whether  before or after such  meeting  shall be held or if such Person shall be
present at such meeting.

          (f) Quorum and Manner of Acting.  Except as otherwise  provided by law
or this  Agreement,  at least  two-thirds  (2/3) of the total number of Managers
shall be present at any meeting of the Board of Managers in order to  constitute
a quorum for the  transaction  of business at such meeting.  In the absence of a
quorum for any such  meeting,  the Manager  present  thereat  shall adjourn such
meeting from time to time until a quorum shall be present thereat.  Each Manager
shall, with respect to all matters requiring a vote of the Board of Managers, be
entitled to one vote.  At all  meetings of the Board of  Managers,  all matters,
except as otherwise  provided by law or in this  Agreement,  shall be decided by
the vote of a majority of the entire Board of Managers.

          (g) Action by Communication Equipment. The Managers may participate in
a meeting of the Board of Managers  and  members of a committee  of the Board of
Managers may  participate  in a meeting of such committee by means of conference
telephone  or similar  communications  equipment  by means of which all  persons
participating in the meeting can hear each other, and such  participation  shall
constitute presence in person at such meeting.

          (h) Action by Consent. Any action required or permitted to be taken by
the Managers or members of a committee of the Board of Managers, as the case may
be,  may be taken  without a meeting  if the  number of  Managers  that would be
necessary  to  authorize  or take  such  action  at a  meeting  of the  Board of
Managers,  or the number of members of a committee  that would be  necessary  to
authorize or take such action at a meeting of the committee, as the case may be,
consent  thereto in writing  and such  writing is filed with the  minutes of the
proceedings of the Board of Managers or of the committee, as the case may be.

          (i)  Organization.  At each meeting of the Board of  Managers,  in the
absence of the  Chairperson,  one of the following  shall act as chairman of the
meeting and preside  thereat,  in the  following  order of  precedence:  (i) the
President,  and (ii) any Manager  chosen by a majority of the Managers  present.
The Secretary or, in case of the Secretary's  absence,  any person (who shall be
an Assistant Secretary, if an Assistant Secretary shall be present thereat) whom
the Chairperson  shall appoint,  shall act as secretary of such meeting and keep
the minutes thereof.

                                       15

<PAGE>

     SECTION  5.6  Compensation;  Expenses.  (a)  Managers,  as such,  shall not
receive any stated salary for their services,  but by resolution of the Board of
Managers  may  receive a fixed  sum for  expenses  incurred  in  performing  the
functions of Manager, and such additional,  reasonable compensation as the Board
of  Managers  may award from time to time.  Nothing  herein  contained  shall be
construed  so as to preclude  any Manager  from serving the Company in any other
capacity and receiving compensation therefor.

          (b) The Company  shall be  responsible  for  paying,  and the Board of
Managers  shall pay directly out of Company  funds,  all ordinary and  necessary
costs and  expenses  incurred in  connection  with the  business of the Company,
including,  without  limitation,  any such  expenses  incurred by the  Managers,
liability and other insurance  premiums,  expenses in the preparation of reports
to the Members and legal, accounting and other professional fees and expenses.

     SECTION 5.7  Fiduciary  Duty.  Each Manager  shall  perform his duties as a
Manager in good faith and with that  degree of care that an  ordinarily  prudent
person in a like position would use under similar  circumstances.  In performing
his duties,  each Manager  shall be entitled to rely on  information,  opinions,
reports or statements,  including financial statements and other financial data,
in each case  prepared or  presented  by: (i) one or more agents or employees of
the Company;  (ii) counsel,  public  accountants  or other persons as to matters
that such Manager reasonably believes to be within such person's professional or
expert competence; or (iii) any other Manager duly designated in accordance with
this Agreement, as to matters within his designated authority, which the Manager
believes  to merit  confidence,  so long as in so  relying he shall be acting in
good faith and with such degree of care that an ordinarily  prudent  person in a
like position would use under similar circumstances;  provided,  however, that a
Manager  shall not be  considered to be acting in good faith if he has knowledge
concerning  the matter in  question  that  would  cause  reliance  on any of the
Persons listed above to be unwarranted. The provisions of this Agreement, to the
extent they restrict the duties and liabilities of a Manager otherwise  existing
at law or in equity,  are  agreed by the  parties  hereto to replace  such other
duties and liabilities of such Manager.

     SECTION 5.8 Certain Matters Requiring Approval. Notwithstanding anything to
the contrary  contained herein,  the Managers may not take or approve any of the
following  actions,  and  none  of the  following  matters  may be  acted  upon,
authorized  or caused to occur by the  Managers,  unless all of the Managers (or
their designated deputies who are reasonably acceptable to the other Managers

                                       16

<PAGE>

which initially,  in the case of Ms. Siebert,  shall be Nicholas P. Dermigny and
T.K. Flatley and, in the case of Mr. Brandford, shall be V. McCanley and, in the
case of Ms. Shank,  shall be D. Thompson)  agree to any such action or to act on
any such matter:

          (a) the admission of additional Members;

          (b) the making of calls by the Managers for capital contributions;

          (c) the  making of any  capital  expenditure  or the  purchase  of any
          capital asset (except in accordance with the business plan);

          (d) the  determination  of any plan for  winding up the  business  and
          affairs of the Company or liquidating  the assets of the Company after
          dissolution;

          (e) the approval of the sale of all or substantially all of the assets
          of the Company;

          (f)  amendment  of this  Agreement or the Articles of Formation of the
          Company;

          (g) the sale, lease, exchange, mortgage,  assignment,  pledge or other
          transfer  of,  or  guarantee  of  a  security   interest  in,  all  or
          substantially  all of the Company's  property and assets except in the
          liquidation  and winding up of the  business  of the Company  upon its
          termination or dissolution;

          (h) the  approval  of the annual  business  plan of the Company or any
          deviation  from the budget for the 1996- 1997 fiscal year as set forth
          in Annex A hereto;

          (i) any contract, agreement or undertaking between the Company and any
          of its  Members or Managers or any  material  contract  with any third
          party other than contracts for municipal bond underwritings  which are
          in  accordance  with the  Company's  written  guidelines  with respect
          thereto;

          (j) any amendments to or changes in the Company's  written  guidelines
          with respect to municipal bond underwritings;

          (k) the entry of the  Company  into any new lines of  business  or any
          other material  transactions  or other  activities not in the ordinary
          course of the Company's business;

                                       17

<PAGE>
          (l) the  filing by the  Company  of a petition  in  bankruptcy  or the
          taking of any other action by the Company in relief from  creditors or
          under any bankruptcy or insolvency law; and

          (m) the merger or  consolidation of the Company with or into any other
          Person,  the  dissolution  of the  Company  or the  conversion  of the
          Company into another form of business entity.


                                   ARTICLE VI
                            Chairpersons and Officers

     SECTION 6.1 Chairperson and Vice Chairperson.  (a) The Chairperson shall be
the  Chairperson of the Board of Managers and the  Chairperson  shall preside at
all  meetings of the Members  and at all  meetings of the Board of Managers  and
shall  perform such other duties and exercise such other powers as may from time
to time be  prescribed by the Board of Managers.  At each annual  meeting of the
Board of  Managers at which a quorum is  present,  the Manager or an  individual
designated  by a  Manager  receiving  the  greatest  number  of  votes  shall be
Chairperson  until his successor is elected at the next annual Board of Managers
meeting or until his  resignation  or removal in  accordance  with  Section  5.3
hereof in which event his replacement shall become Chairperson for the remainder
of his term. Napoleon Brandford III initially shall serve as the Chairperson.

          (b) The Vice  Chairperson  shall be the Vice  Chairperson the Board of
Managers  and the Vice  Chairperson,  in the absence of the  Chairperson,  shall
preside at all  meetings  of the  Members  and at all  meetings  of the Board of
Managers and shall  perform such other duties and exercise  such other powers as
may from time to time be  prescribed  by the Board of  Managers.  At each annual
meeting of the Board of Managers at which a quorum is present, the Manager or an
individual  designated by a Manager receiving the greatest number of votes shall
be Vice  Chairperson  until his successor is elected at the next annual Board of
Managers  meeting or until his resignation or removal in accordance with Section
5.3 hereof in which event his replacement  shall become Vice Chairperson for the
remainder  of  his  term.   Suzanne  F.  Shank  initially  shall  serve  as  the
Chairperson.

     SECTION 6.2 Election, Appointment and Term of Office.
                 -----------------------------------------

          (a) The officers of the Company  shall be a President,  Treasurer  and
Secretary who shall be chosen by and hold office at the pleasure of the Board of
Managers.  Any two (2) or more  offices  may be held by the  same  person.  Each
officer shall hold office until the next annual meeting of the Board of Managers
and until his successor is appointed or until his earlier death,  or his earlier
resignation  or  removal in the manner  hereinafter  provided.  Suzanne F. Shank
initially shall serve as the President.

                                       18

<PAGE>

          (b) The Board of Managers may appoint such other  officers as it deems
necessary,  including one or more Vice  Presidents,  Assistant Vice  Presidents,
Assistant  Treasurers  and Assistant  Secretaries.  Each such officer shall have
such authority and shall perform such duties as may be provided herein or as the
Board of Managers may prescribe.

          (c) If additional  officers are elected or appointed  during the year,
each of them shall hold  office  until the next  annual  meeting of the Board of
Managers  and until his  successor  is  appointed  or until his  earlier  death,
resignation or removal.

     SECTION 6.3 Resignation, Removal and Vacancies.
                 -----------------------------------

          (a) Any officer may resign at any time by giving written notice to the
Chairperson, the President or the Secretary of the Company, and such resignation
shall take  effect at the time  specified  therein or, if the time when it shall
become effective shall not be specified therein,  when accepted by action of the
Board of Managers. Except as aforesaid, the acceptance of such resignation shall
not be necessary to make it effective.

          (b) All  officers  and  agents  elected or  appointed  by the Board of
Managers shall be subject to removal at any time by the Board of Managers,  with
or without cause.

          (c) A vacancy in any office may be filled for the unexpired portion of
the term in the same manner as provided  for  election  or  appointment  to such
office.

     SECTION 6.4 Duties and Functions.
                 ---------------------

          (a) President.  The President shall be the chief executive  officer of
the Company and shall have the supervision and control over, and  responsibility
for, the day-to-day management of the operations of the Company,  subject to the
general  policy  directions of the  Chairperson  and the Board of Managers,  and
shall see that all orders and  resolutions  of the Board of Managers are carried
out and put into effect.

          (b) Treasurer.  The Treasurer shall keep and maintain,  or cause to be
kept and  maintained,  adequate  and  correct  accounts  of the  properties  and
business  transactions  of  the  Company,  including  accounts  of  its  assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and Units.
The Treasurer  shall  disburse the funds of the Company as may be ordered by the
Chairperson,  the Board of Managers or the President, taking proper vouchers for
such disbursements and shall render to the Chairperson, the Board of Managers

                                       19

<PAGE>

and the  President,  whenever  they shall so  request,  an account of all of his
transactions as Treasurer and of the financial condition of the Company.

          (c) Secretary. The Secretary shall give or cause to be given notice of
all  meetings of the Board of  Managers  and the Members and keep the records of
all meetings of the Board of Managers and the Members.  The  Secretary  shall be
custodian of all contracts,  deeds,  documents and all other indicia of title to
properties  owned by the Company and of its other  records and in general  shall
have all powers  incident to the office of Secretary  and perform such duties as
may be  prescribed  by the  Board of  Managers  or the  President,  under  whose
supervision he shall be.

     SECTION  6.5  Committees  of  Managers.  The  Board  of  Managers  may,  by
resolution or resolutions passed by a majority of the whole Board, designate one
or more committees,  each committee to consist of one or more of the Managers of
the Company.

          Except as herein  provided,  vacancies in  membership of any committee
shall be filled by the vote of a majority  of the whole Board of  Managers.  The
Board of Managers may  designate one or more  directors as alternate  members of
any committee,  who may replace any absent or disqualified member at any meeting
of the  committee.  In the  absence  or  disqualification  of  any  member  of a
committee,  the  member  or  members  thereof  present  at any  meeting  and not
disqualified  from voting,  whether or not he or they  constitute a quorum,  may
unanimously  appoint  another  member  of the  Board of  Managers  to act at the
meeting in the place of any such  absent or  disqualified  member.  Members of a
committee  shall  hold  office for such  period as may be fixed by a  resolution
adopted by a majority  of the whole  Board of  Managers,  subject,  however,  to
removal at any time by the vote of a majority of the whole Board of Managers.

     SECTION 6.6 Powers and Duties of Committees.  Any committee,  to the extent
provided in the resolution or resolutions  creating such  committee,  shall have
and may  exercise the powers of the Board of Managers in the  management  of the
business and affairs of the Company and may authorize the seal of the Company to
be affixed to all papers which may require it. No such committee  shall have the
power or  authority  with  regard to  amending  the  Certificate  of  Formation,
adopting an agreement of merger or  consolidation,  recommending  to the Members
the  sale,  lease  or  exchange  of all or  substantially  all of the  Company's
property and assets, recommending to the Members a dissolution of the Company or
a revocation of a dissolution or amending this Agreement.

                                       20

<PAGE>
                                   ARTICLE VII
               Books and Records; Right of Inspection; Tax Matters

     SECTION 7.1 Books and  Records.  The Company will keep  accurate  books and
records relating to transactions with respect to the assets of the Company based
on Book Values using federal income tax accounting principles.  The Company will
also keep the following books and records at the Company's principal office: (i)
a current  list of the full name and last known  business,  residence or mailing
address of each Member,  (ii) a copy of the Certificate of Formation and of this
Agreement,  (as well as any signed powers of attorney pursuant to which any such
document was executed);  (iii) a copy of the Company's federal,  state and local
income tax returns and reports,  and annual financial statements of the Company,
for all Fiscal Years; and (iv) minutes, or minutes of action (or written consent
without a meeting), of every meeting of the Members or the Board of Managers.

     SECTION 7.2 Information.  Each Member has the right upon reasonable  notice
to obtain from the  Company:  (i) a current list of the full name and last known
business,  residence  or  mailing  address  of each  Member;  (ii) a copy of the
Certificate  of Formation and of this Agreement (as well as any signed powers of
attorney pursuant to which any such document was executed);  (iii) a copy of the
Company's  federal,  state and local income tax returns and reports,  and annual
financial  statements  of the Company,  for all Fiscal  Years;  (iv) minutes (or
written  consents  without a  meeting)  of every  meeting  (or  action  taken by
consent) of the Members or the Board of Managers; and (v) such other information
as the Company  shall be required to make  available to the Members  pursuant to
Section 18-305 of the Act.

     SECTION  7.3 Tax  Returns.  The  Company,  at its  expense,  will cause the
preparation and timely filing (including extensions) of all tax returns required
to be filed by the Company  pursuant  to the Code as well as all other  required
state  and local tax  returns  in each  jurisdiction  in which  the  Company  is
required to file by applicable law. Within ninety (90) days following the end of
each Fiscal Year,  the Company will provide each Member with all  necessary  tax
reporting information,  a copy of the Company's informational federal income tax
return  for such  Fiscal  Year  and  such  other  information  as is  reasonably
necessary to enable the Members to comply with their tax reporting requirements.

     SECTION  7.4 Tax  Elections.  The  Company  shall make and revoke  such tax
elections as the Board of Managers may from time to time determine.

     SECTION 7.5 Tax Matters  Partner.  The Members by a two-thirds  vote of all
votes  permitted  hereunder  shall  designate  one Member to be the tax  matters
partner (the "Tax Matters  Partner")  under ss.  6231(a)(7)  of the Code.  Until
further action by the Company,  Siebert is hereby  designated as the Tax Matters
Partner.

                                       21

<PAGE>

     SECTION  7.6  No  Partnership.  The  classification  of  the  Company  as a
partnership  will apply only for federal (and, as appropriate,  state and local)
income tax purposes.  This characterization,  solely for tax purposes,  does not
create or imply a general  partnership  among the  Members  for state law or any
other purpose.  Instead,  the Members acknowledge the status of the Company as a
limited liability company formed under the Act.


                                  ARTICLE VIII
                                Capital Accounts

     SECTION 8.1  Maintenance.  Each Member agrees that a single capital account
(each a "Capital  Account") will be  established  and maintained for each Member
and will be credited, charged and otherwise adjusted as provided in this Article
VIII and as required by the regulations  promulgated under ss.704(b) of the Code
(the  "ss.704(b)  Regulations").  The initial  Capital  Account balance for each
Member is the contribution amount set forth in Schedule I to this Agreement. The
Capital Account of each Member will be:

          (a) credited with (i) each Capital  Contribution  made by such Member,
(ii) such Member's allocable share of Net Profits, including items of income and
gain exempt from tax, and (iii) all other items properly  charged to the Capital
Account of such Member as required by the ss.704(b) Regulations; and

          (b)  charged  with (i) each  Distribution  made to such  Member by the
Company,  (ii) such Member's  allocable share of Net Losses, and (iii) all other
items properly  charged to the Capital Account of such Member as required by the
ss.704(b) Regulations.

     SECTION 8.2  Adjustments.  The Members  intend to comply with the ss.704(b)
Regulations in all respects,  and agree to adjust their Capital  Accounts to the
full  extent  that the  ss.704(b)  Regulations  may  apply  (including,  without
limitation,  applying the concepts of the minimum gain chargebacks and qualified
income  offsets).  To this end, each Member  agrees to make any Capital  Account
adjustment  that,  in the  opinion  of tax  counsel  selected  by the  Board  of
Managers, is necessary or appropriate to maintain equality between the aggregate
Capital  Accounts  of the  Members  and the  amount of  capital  of the  Company
reflected on its balance sheet (as computed for book purposes),  as long as such
adjustments  are  consistent  with the  underlying  economic  arrangement of the
Members and, wherever practicable,  are based on and consistent with federal tax
accounting principles.

                                       22

<PAGE>

     SECTION 8.3 Market Value  Adjustments.  Each Member agrees that the Company
shall make  appropriate  adjustments to the Capital  Account of such Member upon
any  Transfer of all or any portion of a Unit,  including  those that apply upon
the  constructive  liquidation of the Company under ss. 708(b)(1) of the Code or
the  liquidation  of a Member's  Units,  all in  accordance  with the ss. 704(b)
Regulations.

     SECTION 8.4  Transfer.  Each Member  agrees that, if all or any part of its
Units is transferred  in accordance  with this  Agreement,  except to the extent
otherwise  provided  in  the  ss.704(b)  Regulations,   upon  admission  of  the
transferee  as  a  Member,  the  Capital  Account  of  the  transferor  that  is
attributable to the transferred Units will carry over to the transferee.


                                   ARTICLE IX
                        Allocations and Accounting Method

     SECTION 9.1  Determination.  Each Member  agrees that for each Fiscal Year,
Net  Profits  and Net  Losses,  and all other  items of income,  gain,  loss and
deduction  of the  Company,  will  be  determined  based  upon  Book  Values  in
accordance with federal income tax accounting  principles  consistently  applied
(including the ss.704(b) Regulations).

     SECTION 9.2 Allocations of Net Profits,  Net Losses,  and Other Items. Each
Member agrees that:

          (a) the Net  Profits  of the  Company  for each  Fiscal  Year shall be
allocated (i) first,  to Siebert  until the aggregate  amount of all Net Profits
allocated  pursuant to this  Section  9.2(a)(i)  for all Fiscal Years equals the
Pre-Formation Expenses; (ii) next, pro rata among the Members in accordance with
any Net Losses  allocated to such Members  pursuant to Section  9.2(b) until the
aggregate amount of Net Profits  allocated  pursuant to this Section  9.2(a)(ii)
equals the  aggregate  amount of Net Losses  allocated  to such  Members for all
prior  Fiscal  Years  pursuant  to  Section  9.2(b);  and (iii)  thereafter,  in
proportion to the Members'  holdings of Units  registered on the Company's books
on the last day of the Fiscal Year (subject to Section 9.4(b));

          (b) the Net  Losses  of the  Company  for each  Fiscal  Year  shall be
allocated in  proportion  to the Members'  holdings of Units  registered  on the
Company's books on the last day of the Company's Fiscal Year (subject to Section
9.4(b)); and

          (c) notwithstanding Sections 9.2(a) and 9.2(b), expenses or deductions
attributable to Pre-Formation Expenses to the extent otherwise includible in the
determination  of Net  Profit  or Net  Losses  for  such  Fiscal  Year  shall be

                                       23

<PAGE>

allocated  to Siebert and the Net Profits and Net Losses  allocable  pursuant to
Section 9.2(a) or 9.2(b),  as the case may be, for the period that includes such
deductions  or  expenses  attributable  to  Pre-  Formation  Expenses  shall  be
determined without regard to such deductions or expenses.

     SECTION 9.3 Allocations in the Event of Property Distribution. In the event
that property other than cash is distributed to any Member,  such property shall
be deemed sold at its Fair Market Value  immediately  prior to its Distribution,
and any gain or loss  resulting  from such deemed sale shall be allocated  among
the Members in accordance  with Section 9.2.  Similarly,  in accordance with the
ss.704(b) Regulations and Section 9.1(b)(iii), the Capital Account of any Member
receiving a  Distribution  of such  property  shall be charged based on the Fair
Market  Value  (as  determined  in  the  preceding  sentence)  of  the  property
distributed to such Member.

     SECTION 9.4 Special Rules. Notwithstanding the general allocation rules set
forth in  Section  9.2 or the  allocation  rules set forth in Section  9.3,  the
following   special   allocation  rules  shall  apply  under  the  circumstances
described.

          (a) Deficit Capital Account and Nonrecourse Debt Rules.

               (i) Limitation on Loss  Allocations.  The Net Losses allocated to
any Member  pursuant  to Section  9.2 with  respect to any Fiscal Year shall not
exceed the maximum amount of Net Losses that can be so allocated without causing
such Member to have a deficit in its Adjusted Capital Account at the end of such
Fiscal  Year.  All Net  Losses  in  excess  of the  limitation  set forth in the
preceding  sentence of this Section  9.4(a)(i)  shall be allocated (1) first, to
the maximum extent permitted by the Code and the Regulations, pro rata among the
Members having  positive  balances in their  Adjusted  Capital  Accounts  (after
giving effect to the  allocations  required by Section 9.2 in the ratio obtained
by dividing (x) each such Member's Capital Account balance by (y) the sum of all
such Members' Capital Account  balances and (2) second,  any remaining amount to
the Members in the manner required by the Code and the Regulations.

               (ii)  Qualified  Income  Offset.  If in any Fiscal  Year a Member
unexpectedly  receives an adjustment,  allocation or  distribution  described in
sections  1.704-1(b)(2)(ii)(d)(4),  (5)  or (6) of  the  Regulations,  and  such
adjustment,  allocation  or  distribution  causes or  increases a deficit in the
Adjusted Capital Account for such Member, then, before any other allocations are
made under this Agreement or otherwise,  such Member shall be allocated items of
income  and gain  (consisting  of a pro rata  portion  of each  item of  income,
including gross income and gain) in an amount and manner sufficient to eliminate
such deficit in the Adjusted Capital Account as quickly as possible.

                                       24

<PAGE>
               (iii) Company Minimum Gain Chargeback. If there is a net decrease
in Company  Minimum Gain during any Fiscal Year,  each Member shall be allocated
items of income and gain for such Fiscal Year (and, if necessary, for subsequent
Fiscal  Years) in  proportion  to, and to the extent of, an amount  equal to the
portion of such  Member's  share of the net  decrease  in Company  Minimum  Gain
during  such  Fiscal  Year,  subject  to the  exceptions  set forth in  sections
1.704-2(f)(2), (3) and (5) of the Regulations; provided that, if the Company has
any  discretion as to an exception set forth in section  1.704-2(f)(5),  the Tax
Matters Partner shall exercise such discretion on behalf of the Company. The Tax
Matters  Partner shall,  if the  application of this Section  9.4(a)(iii)  would
cause a  distortion  in the  economic  arrangement  among the  Members,  ask the
Commissioner  of the Internal  Revenue Service to waive the Company Minimum Gain
chargeback requirements pursuant to section 1.704-2(f)(4) of the Regulations. To
the  extent  that this  Section  is  inconsistent  with  section  1.704-2(f)  or
1.704-2(k) of the Regulations or incomplete with respect to such sections of the
Regulations,  the Company Minimum Gain  chargeback  provided for herein shall be
applied and interpreted in accordance with such sections of the Regulations.

               (iv) Member Minimum Gain  Chargeback.  If there is a net decrease
in Member Minimum Gain during any Fiscal Year,  each Member with a share of such
Member Minimum Gain shall be allocated  items of income and gain for such Fiscal
Year (and, if necessary,  for subsequent  Fiscal Years) in proportion to, and to
the extent of, an amount  equal to such  Member's  share of the net  decrease in
Member Minimum Gain during such Fiscal Year, subject to the exceptions set forth
in sections  1.704-2(f)(2),(3),  and (5) of the  Regulations  as  referenced  by
section 1.704-2(i)(4) of the Regulations.  The Tax Matters Partner shall, if the
application of this Section  9.4(a)(iv) would cause a distortion in the economic
arrangement  among the Members,  ask the  Commissioner  of the Internal  Revenue
Service to waive the Member  Minimum  Gain  chargeback  requirement  pursuant to
section  1.704-  2(i)(4) of the  Regulations.  To the extent  that this  Section
9.4(a)(iv) is  inconsistent  with sections  1.704-2(i)(4)  or 1.704- 2(k) of the
Regulations or incomplete with respect to such sections of the Regulations,  the
Member  Minimum  Gain  chargeback  provided  for  herein  shall be  applied  and
interpreted in accordance with such sections of the Regulations.

               (v) Member Nonrecourse Deductions.  Member Nonrecourse Deductions
shall be allocated  among the Members in accordance with the ratios in which the
Members  share the economic  risk of loss for the Member  Nonrecourse  Debt that
gave  rise to those  deductions  as  determined  under  section  1.752-2  of the
Regulations.  This  allocation  is intended to comply with the  requirements  of
section  1.704-2(i)  of the  Regulations  and shall be  interpreted  and applied
consistent therewith.

                                       25

<PAGE>

               (vi) Limited  Effect and  Interpretation.  The special  rules set
forth  in  Sections  9.4(a)(i),  (ii),  (iii),  (iv)  and (v)  (the  "Regulatory
Allocations")  shall  be  applied  only to the  extent  required  by  applicable
Regulations  for the  resulting  allocations  provided  for in this Section 9.4,
taking into account such  Regulatory  Allocations,  to be respected  for federal
income tax purposes.  The Regulatory Allocations are intended to comply with the
requirements of sections 1.704-1(b),  1.704-2 and 1.752-1 through 1.752-5 of the
Regulations and shall be interpreted and applied consistently therewith.

               (vii) Curative Allocations. The Regulatory Allocations may not be
consistent  with the  manner in which  the  Members  intend  to  divide  the Net
Profits, Net Losses and similar items. Accordingly,  Net Profits, Net Losses and
other items will be reallocated  among the Members in a manner  consistent  with
section  1.704-1(b) and 1.704-2 of the Regulations so as to negate as rapidly as
possible  any  deviation  from the manner in which Net  Profits,  Net Losses and
other items are intended to be allocated  among the Members  pursuant to Section
9.2 that is caused by the Regulatory Allocations.

               (viii) Change in Regulations.  If the  Regulations  incorporating
the  Regulatory  Allocations  are hereafter  changed or if new  Regulations  are
hereafter  adopted,  and such  changed  or new  Regulations,  in the  opinion of
independent  tax  counsel  for the  Company,  make it  necessary  to revise  the
Regulatory  Allocations or provide further special  allocation rules in order to
avoid a significant  risk that a material portion of any allocation set forth in
this  Article IX would not be respected  for federal  income tax  purposes,  the
Members  shall make such  reasonable  amendments  to this  Agreement  as, in the
opinion of such counsel,  are  necessary or  desirable,  taking into account the
interests of the Members as a whole and all other relevant factors,  to avoid or
reduce  significantly  such  risk  to the  extent  possible  without  materially
changing the amounts  allocable and distributable to any Member pursuant to this
Agreement.

          (b) Change in Member's Interests. If there is a change in any Member's
share of the Net  Profits,  Net Losses or other items of the Company  during any
Fiscal Year,  allocations  among the Members  shall be made in  accordance  with
their  interests  in the  Company  from time to time  during such Fiscal Year in
accordance with section 706 of the Code, using the closing-of-the-books  method,
except that  Depreciation,  amortization  and  similar  items shall be deemed to
accrue  ratably on a daily basis over the entire  Fiscal  Year during  which the
corresponding  asset is owned by the  Company if such asset is placed in service
prior to or during the Fiscal Year.


                                       26

<PAGE>

     SECTION 9.5 Tax Allocations.
                 ----------------

          (a) In General. Except as set forth in Section 9.5(b), allocations for
tax purposes of items of income, gain, loss and deduction, and credits and basis
therefor,  shall be made in the same manner as allocations  for book purposes as
set forth in Section  9.2.  Allocations  pursuant to this Section 9.5 are solely
for purposes of federal,  state and local income taxes and shall not affect,  or
in any way be taken into account in computing,  any Member's  Capital Account or
share of Net Profits, Net Losses,  other items or distributions  pursuant to any
provision of this Agreement.

          (b) Special Rules.
              --------------

               (i)  Elimination  of  Book/Tax  Disparities.   In  determining  a
Member's allocable share of the Company's taxable income, the Member's allocable
share of each item of Net Profits and Net Losses  shall be properly  adjusted to
reflect the difference between such Member's share of the adjusted tax basis and
the Book Value of the  Company's  assets  used in  determining  such item.  With
respect to  depreciation,  in determining  the taxable income  allocable to such
Member, Net Profits and Net Losses allocable to such Member shall be adjusted by
eliminating  Depreciation allocable to such Member and substituting therefor tax
depreciation  allocable to such Member  determined by reference to such Member's
share of the tax basis of the Company's  assets.  This  provision is intended to
comply  with  the  requirements  of  section  704(c)  of the  Code  and  section
1.704-1(b)(2)(iv)(f)  of the  Regulations  and shall be interpreted  and applied
consistently therewith.

               (ii)  Allocation  of Items  Among  Members.  Except as  otherwise
provided in Section 9.5(b)(i), each item of income, gain, loss and deduction and
all other items governed by section 702(a) of the Code shall be allocated  among
the Members in  proportion  to the  allocation of Net Profits and Net Losses set
forth in Section 9.2,  provided that any gain recognized from any disposition of
a Company asset that is treated as ordinary income because it is attributable to
the recapture of any  depreciation or amortization  shall be allocated among the
Members in the same ratio as the prior allocations of Net Profits, Net Losses or
other items that included such  depreciation or amortization,  but not in excess
of the gain otherwise allocable to each Member.

               (iii) Tax Credits.  All tax credits shall be allocated  among the
Members in accordance with applicable law.

          (c)  Conformity of Reporting.  The Members are aware of the income tax
consequences of the allocations  made by this Section 9.5 and hereby agree to be
bound by the  provisions  of this Section 9.5 in  reporting  their shares of the
Company's profits,  gains, income, losses,  deductions,  credits and other items
for income tax purposes.

                                       27

<PAGE>
                                    ARTICLE X
                                  Distributions

     SECTION 10.1 Distributions.  Distributions of Available Cash, if any, shall
be made  at such  time  and in such  amounts  as the  Board  of  Managers  shall
determine.  Notwithstanding  anything  else to the  contrary  contained  herein,
Distributions   in  each  Fiscal  Year  shall  be  made  first  to  satisfy  the
Distributions required by Section 10.6 hereof and thereafter as follows:

          (a) to Siebert until the aggregate  amount of the  Distributions  made
pursuant  to  this  Section  10.1(a)  for  all  Fiscal  Years  is  equal  to the
Pre-Formation Expenses; and

          (b)  thereafter  all  Distributions  shall  be  made  to  all  Members
(including  Siebert) pro rata in accordance with the Units held as of the record
date(s) set for such Distributions.

     SECTION 10.2 Withholding.  (a) If required by the Code or by state or local
law, the Company  will  withhold any  required  amount from  Distributions  to a
Member for payment to the appropriate  taxing authority.  Any amount so withheld
from a Member will be treated as a  Distribution  by the Company to such Member.
Each Member  agrees to timely file any  document  that is required by any taxing
authority  in order to avoid or reduce  any  withholding  obligation  that would
otherwise be imposed on the Company.

          (b) To the extent any amount is required to be withheld  with  respect
to a Member and paid over to an appropriate  taxing authority which amount is in
excess of the amounts distributed to such Member in respect of such withholding,
the amounts paid to the taxing authority in respect of such withholding shall be
treated as a Distribution to such Member and a corresponding  Distribution shall
be made to each other Member in proportion to the Capital Account  registered on
the  Company's  books in such  Member's  name.  To the  extent  that cash is not
available to make any of the Distributions  required under this Section 10.2(b),
such Distribution shall be delayed and paid out of the next Available Cash.

     SECTION  10.3  Offset.  The  Company  may offset all  amounts  owing to the
Company by a Member against any Distribution to be made to such Member.

     SECTION  10.4  Limitation  Upon  Distributions.  No  Distribution  shall be
declared and paid to the extent  that,  at the time of the  Distribution,  after
giving effect to the Distribution, all liabilities of the Company (other than

                                       28

<PAGE>

liabilities  to  Members  on  account  of  their  interest  in the  Company  and
liabilities for which recourse of creditors is limited to specified  property of
the Company)  exceed the Fair Market Value of the assets of the Company  (except
that the Fair Market Value of property  that is subject to a liability for which
the  recourse  of  creditors  is limited  shall be included in the assets of the
Company only to the extent that the Fair Market Value of such  property  exceeds
such liability).  To the extent that any Distribution  made pursuant to Sections
10.1 and 10.2 would be limited by reason of this  Section  10.4,  the  aggregate
Distributions  under  Sections 10.1 and 10.2 which  includes  such  Distribution
shall be repayable to extent provided in Section 18- 607 of the Act.

     SECTION 10.5  Accounting  Period and Method.  The accounting  period of the
Company  shall be the  Fiscal  Year.  For income  tax and  financial  accounting
purposes, the Company will use the accrual method of accounting.

     SECTION 10.6 Tax Distributions.  Notwithstanding Section 10.1, on or before
April 1 of each Fiscal  Year,  the Company  shall  distribute  to each Member an
amount in cash of Available  Cash,  if any,  equal to the product of (i) the Net
Profits  allocated to such Member for the  preceding  Fiscal Year,  and (ii) the
Combined Marginal Rate for such preceding Fiscal Year.


                                   ARTICLE XI
                                 Indemnification

     SECTION   11.1   Indemnification.   (a)  The   Managers  and  each  officer
(collectively,  the "Indemnified  Party") shall, in accordance with this Article
XI, be indemnified and held harmless by the Company from and against any and all
losses, claims, damages, liabilities, costs, expenses (including legal and other
professional fees and disbursements),  judgments, fines, settlements,  and other
amounts (collectively,  the "Indemnification  Obligations") arising from any and
all  claims,   demands,   actions,   suits  or  proceedings  (civil,   criminal,
administrative  or   investigative),   actual  or  threatened,   in  which  such
Indemnified  Party may be involved,  as a party or otherwise,  by reason of such
Indemnified  Party's  service to, or on behalf of, or  management of the affairs
of, the Company, or rendering of advice or consultation with respect thereto, or
which relate to the Company, its properties, business or affairs, whether or not
the Indemnified  Party continues to be a Manager or officer at the time any such
Indemnification   Obligation   is  paid  or   incurred,   provided   that   such
Indemnification  Obligation resulted from a mistake of judgment,  or from action
or inaction of such Indemnified  Party that did not constitute gross negligence,
willful misconduct or bad faith. The Company shall also indemnify and hold

                                       29

<PAGE>

harmless any Indemnified Party from and against any  Indemnification  Obligation
suffered  or  sustained  by such  Indemnified  Party by reason of any  action or
inaction  of any  employee,  broker or other  agent of such  Indemnified  Party,
provided, that such employee, broker or agent was selected,  engaged or retained
by such Indemnified  Party with reasonable care. The termination of a proceeding
by judgment, order, settlement, conviction or upon a plea of nolo contendere, or
its  equivalent,   shall  not,  of  itself,   create  a  presumption  that  such
Indemnification   Obligation   resulted  from  the  gross  negligence,   willful
misconduct or bad faith of such Indemnified Party. Expenses (including legal and
other  professional fees and  disbursements)  incurred in any proceeding will be
paid by the Company,  as incurred,  in advance of the final  disposition of such
proceeding  upon receipt of an undertaking  by or on behalf of such  Indemnified
Party to repay  such  amount  if it shall  ultimately  be  determined  that such
Indemnified Party is not entitled to be indemnified by the Company as authorized
hereunder.

          (b) To the  fullest  extent  permitted  by  applicable  law,  expenses
(including  reasonable legal fees) incurred by an Indemnified Party in defending
any claim, demand, action, suit or proceeding relating to Section 11.1(a) shall,
from time to time, be advanced by the Company prior to the final  disposition of
such claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnified  Party to repay such amount if it
shall  be  determined  by a court  of  competent  jurisdiction  having  final or
unappealed  dispositive authority over such matter that the Indemnified Party is
not entitled to be indemnified as authorized in this Article XI.

     SECTION 11.2 Indemnification Not Exclusive. The indemnification provided by
this Article XI shall not be deemed to be exclusive of any other rights to which
each  Indemnified  Party may be entitled under any agreement,  or as a matter of
law,  or  otherwise,  both as to action  in such  Indemnified  Party's  official
capacity  and to action in  another  capacity,  and  shall  continue  as to such
Indemnified  Party  who has  ceased  to have an  official  capacity  for acts or
omissions during such official  capacity or otherwise when acting at the request
of the Board of Managers,  or any Person granted  authority  thereby,  and shall
inure  to the  benefit  of the  heirs,  successors  and  administrators  of such
Indemnified Party.


                                   ARTICLE XII
                                   Dissolution

     SECTION 12.1  Dissolution.  Dissolution  of the Company will occur upon the
happening  of any of the  following  events:  (a) an  Event of  Withdrawal  of a
Member,  unless, after giving effect to the Event of Withdrawal,  the Company is
continued as provided in Section 12.4;  (b) the unanimous  consent of all of the
Members;  (c) the  conversion of the Company into a corporation or other Person;
(d) the expiration of the term set forth in Section 2.4 hereof; or (e) the entry
of a decree of judicial dissolution pursuant to Section 18-802 of the Act.


                                       30

<PAGE>

     SECTION 12.2 Event of Withdrawal. Within ten (10) days after the occurrence
of an Event of  Withdrawal  with  respect to any  Member,  such  Member (or such
Member's legal  representative or other successor in interest) shall give notice
to the Company of the  occurrence  of such Event of  Withdrawal.  Except for the
Bankruptcy of a Member,  which shall result in an immediate  Event of Withdrawal
of such Member,  any other Event of Withdrawal  shall,  in the absence of formal
notice of such Event of  Withdrawal as required in the  preceding  sentence,  be
deemed to occur upon the first date any other  Member has actual  notice of such
Event of Withdrawal.

     SECTION 12.3 Bankruptcy.  The bankruptcy or insolvency  ("Bankruptcy") of a
Member will be deemed to occur when (a) such  Person  shall  commence  any case,
proceeding  or  other  action  (i)  under  any  existing  or  future  law of any
jurisdiction,   domestic  or  foreign,   relating  to  bankruptcy,   insolvency,
reorganization,  conservatorship  or relief of debtors  seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent,  or  seeking  reorganization,  arrangement,  adjustment,  winding-up,
liquidation,  dissolution, composition or other relief with respect to it or its
debts,  or  (ii)  seeking  appointment  of  a  receiver,   trustee,   custodian,
conservator or other similar  official for it or for all or any substantial part
of its assets, or such Person shall make a general assignment for the benefit of
its  creditors;  (b) there  shall be  commenced  against  such  Person any case,
proceeding or other action of a nature  referred to in clause (a) above that (i)
results  in the  entry of an  order  for  relief  or any  such  adjudication  or
appointment or (ii) remains  undismissed,  undischarged or unbonded for a period
of sixty (60) days;  or (c) there  shall be  commenced  against  such Person any
case,  proceeding or other action  seeking  issuance of a warrant of attachment,
execution,  distraint or similar process against all or any substantial  part of
its assets that  results in the entry of an order for any such relief that shall
not have been vacated,  discharged,  or stayed or bonded  pending  appeal within
sixty (60) days from the entry thereof.

     SECTION 12.4  Continuation.  Upon the  occurrence of an Event of Withdrawal
with respect to any Member, the Company will be continued if, within ninety (90)
days following such event, the remaining Member or Members holding a majority of
the remaining  votes permitted  hereunder  consent(s) in writing to continue the
Company's  business  as a  limited  liability  company  under  the Act and  this
Agreement.  If  the  business  of the  Company  is so  continued,  an  Event  of
Withdrawal of one or more Members will not cause the Dissolution of the Company.

                                       31

<PAGE>
                                  ARTICLE XIII
                                   Liquidation

     SECTION 13.1 Liquidation. Upon Dissolution of the Company, the Company will
immediately proceed to wind up its affairs and liquidate. The Liquidation of the
Company will be accomplished in a businesslike  manner by such Person or Persons
designated  by the Board of  Managers,  which  Person(s)  shall be  entitled  to
reasonable  compensation  therefore.  A reasonable  time will be allowed for the
orderly Liquidation of the Company and the discharge of liabilities to creditors
so as to enable the Company to minimize any losses  attendant upon  Liquidation.
Any gain or loss on disposition  of any Company  assets in  Liquidation  will be
allocated  among the  Members  and  credited  or charged to Capital  Accounts in
accordance  with the  provisions  of this  Agreement.  Until  the  filing of the
certificate  of  cancellation  under  Section  13.5 and  without  affecting  the
liability of Members and without imposing liability on the liquidating  trustee,
the  Person or  Persons  conducting  the  liquidation  may  settle and close the
Company's  business,  prosecute  and  defend  suits,  dispose  of its  property,
discharge or make  provision  for its  liabilities,  and make  Distributions  in
accordance with the priorities set forth in Section 13.2.

     SECTION  13.2  Priority  of  Payment.  The  assets of the  Company  will be
distributed in Liquidation in the following order:

          (a) to creditors,  including Members who are creditors, by the payment
or  provision  for payment of the debts and  liabilities  of the Company and the
expenses of Liquidation;

          (b) to the setting up of any reserves  that are  reasonably  necessary
for any contingent or unforeseen liabilities or obligations of the Company; and

          (c) to the Members  pro rata in  proportion  to the  balances in their
Capital Accounts.

     SECTION 13.3 Timing. Final Distributions in Liquidation will be made by the
end of the Company's Fiscal Year in which such actual Liquidation occurs (or, if
later,  within  ninety  (90) days after such  event) in the manner  required  to
comply with the ss.704(b) Regulations.  Payments of Distributions in Liquidation
may be made to a liquidating trust established by the Company for the benefit of
those entitled to payments under Section 13.2 in any manner consistent with this
Agreement and the ss.704(b) Regulations.

                                       32

<PAGE>

     SECTION 13.4  Liquidating  Reports.  A report will be  submitted  with each
liquidating Distribution to the Members, showing the collections,  disbursements
and Distributions  during the period which is subsequent to any previous report.
A final report, showing cumulative collections, disbursements and Distributions,
will be submitted upon completion of the liquidation process.

     SECTION 13.5 Certificate of Cancellation. Within ninety (90) days following
the  Dissolution  of the  Company  and the  commencement  of  winding  up of its
business,  or at any other time there are no Members,  the  Company  will file a
certificate of  cancellation  (to cancel the  Certificate of Formation) with the
Secretary  of State of the State of Delaware  pursuant to the Act. At such time,
the Company will also file an application  for withdrawal of its  certificate of
authority in any jurisdiction where it is then qualified to do business.

     SECTION 13.6 Deficit  Capital  Account.  Upon a liquidation  of the Company
within the meaning of section  1.704-1(b)(2)(ii)(g)  of the Regulations,  if any
Member has a negative Capital Account (after giving effect to all contributions,
distributions, allocations and other adjustments for all Fiscal Years, including
the Fiscal  Year in which such  liquidation  occurs),  the Member  shall have no
obligation  to make any Capital  Contribution,  and the negative  balance of any
Capital Account shall not be considered a debt owed by the Member to the Company
or to any other person for any purpose.

     SECTION 13.7 Nonrecourse to Other Members. Except as provided by applicable
law or as expressly  provided in this Agreement,  upon Dissolution,  each Member
shall receive a return of his Capital Contribution solely from the assets of the
Company.  If the assets of the Company  remaining after the payment or discharge
of the debts and  liabilities  of the  Company  is  insufficient  to return  any
Capital  Contribution of any Member,  such Member shall have no recourse against
any other Member.


                                   ARTICLE XIV
                                 Transferability

     SECTION 14.1 General.  Except for a Transfer of some or all of its Units by
Siebert to an  Affiliate  or a Transfer  of any Unit or portion of a Unit by any
Member pursuant to Sections 14.2,  14.3.  14.4, or 14.5 hereof,  no Member shall
Transfer  to another  Person any  portion of a Unit  without  the prior  written
consent of the Board of Managers and the Member or Members holding fifty percent
(50%) of the votes  permitted  hereunder.  Notwithstanding  anything else to the
contrary  contained herein, no Unit, or any portion thereof,  may be Transferred
unless  the  transferee  executes  and  delivers  to the  Board of  Managers  an
instrument  pursuant  to  which  it  agrees  to be  bound  by the  terms of this
Agreement.  No  Transfer of a Unit,  or Transfer of an indirect  interest in the
Company, or any portion of either thereof, shall be made if such Transfer would:



                                       33

<PAGE>

          (a)  result by  itself,  or in  combination  with any  other  previous
Transfers, in the termination of the Company as a partnership for federal income
tax purposes;

          (b) result in the violation of the Securities Act of 1933, as amended,
or any other applicable federal or state laws;

          (c) be a violation  of or a default (or an event that,  with notice or
the lapse of time or both,  would  constitute a default)  under, or result in an
acceleration of any indebtedness  under, any note,  mortgage,  loan agreement or
similar instrument or document to which the Company is a party;

          (d)  result  in or  create a  "prohibited  transaction"  or cause  the
Company  or a Member to be or become a "party in  interest",  as such  terms are
defined in section  3(3) of ERISA,  or a  "disqualified  person",  as defined in
section  4975 of the Code,  with  respect to any  "plan",  as defined in section
3(14) of ERISA  and/or  section  4975 of the  Code;  or  result  in or cause the
Company or any Member to be liable for tax under Chapter 42 of the Code;

          (e) be a Transfer to an individual who is not legally competent or who
has not  achieved  his or her  majority  under the law of the  state  (excluding
trusts for the benefit of minors);

          (f) cause the Company or any Member (other than the  transferee) to be
subject to any excise tax pursuant to Chapter 42A of Subtitle D of the Code; or

          (g) be a Transfer to a "tax-exempt entity" or a "tax-exempt controlled
entity"  within  the  meaning  of  sections  168(h)(2)  and   168(h)(6)(F)(iii),
respectively, of the Code.

The  Company  shall not  transfer  on its  books any Unit or issue any  document
representing  any interest in the Company  unless,  in the opinion of counsel to
the  Company,  there has been  compliance  with all of the  material  conditions
hereof and any such attempted  Transfer in violation of this Agreement  shall be
void and of no effect.

     SECTION 14.2 First Refusal Rights. (a) If Siebert, Brandford, Shank, or any
other  holder of Units  receives a bona fide offer or enters or intends to enter
into an agreement (the "Offer") for the sale of one or more of the Units held of
record by such holder to a third party (the "Outside  Party"),  such holder (the
"Selling Holder") shall have the Offer reduced to writing and shall


                                       34

<PAGE>

give  notice  (the  "Option  Notice")  to the  Company  and  the  other  Members
containing  the name and address of the Outside  Party,  which  notice  shall be
accompanied by a copy of the Offer.  The Units subject to the Offer are referred
to herein as the "Offered Units".

          (b) Upon the  giving of the  Option  Notice,  Siebert  shall  have the
right, if Brandford  and/or Shank are the Selling  Holder(s),  and Brandford and
Shank  shall have the  right,  if Siebert  is the  Selling  Holder,  but not the
obligation  (the  "First  Right") to  purchase,  at the price,  on the terms and
subject to the  conditions  specified  in the Offer,  all or part of the Offered
Units  covered by the Option  Notice.  Within thirty (30) days after the date of
the Option  Notice,  the other  Member(s)  as  specified  above shall notify the
Selling  Holder(s) and all of the other Members (the "First Notice") whether and
to what extent it intends to exercise  the First  Right.  Failure to deliver the
First Notice within such period shall constitute a waiver of the First Right.

          (c) In the event that the other  Members  specified in  paragraph  (b)
above do not  exercise the First Right as to all of the Offered  Units,  each of
the other  Members  shall have the right,  but not the  obligation  (the "Member
Right") to purchase,  at the price,  on the terms and subject to the  conditions
specified in the Offer, such Member's  Proportionate  Share of the Offered Units
by notifying  the Selling  Holder,  the other Members and the Company in writing
(the "Member Notice") within forty (40) days after the date of the Option Notice
whether and to what extent such Member intends to exercise the Member Right.  If
any Member  fails to exercise  the Member  Right as to all of its  Proportionate
Share of the Offered  Units,  then any of the other Members shall have the right
to purchase all or part of the Offered Units that such Member has elected not to
purchase by amending its respective Member Notice within five (5) days after the
date that it receives  notice that any other  Member has so declined to exercise
the  Member  Right in full.  Failure to deliver  the  Member  Notice  within the
applicable  periods shall constitute a waiver of such Member's purchase right as
to the Offered Units.

          (d) The Selling  Holder(s)  shall have the  obligation  to sell to the
other  Members  such  portion of the  Offered  Units as are covered by the First
Notice and the Member Notice,  and the Selling Holder(s) may sell the balance of
the Offered  Units (or all of the  Offered  Units if no such  notices  have been
given) to the Outside  Party on terms not more  favorable to such Outside  Party
than  those  contained  in the  Offer.  In the event  that  such  terms are more
favorable  or if such sale to the Outside  Party is not  consummated  within the
time period  specified  herein,  the Offered Units shall again be subject to the
restrictions contained in this Agreement.

                                       35

<PAGE>

          (e) The  closing  for any  purchase  of  Offered  Units  by any of the
Members or the  Outside  Party  pursuant to this  Section  14.2 shall be held at
10:00 A.M. (local time) at the offices of the Company on the sixtieth (60th) day
after  the date of the  Option  Notice  or at such  other  time and place as the
parties shall agree. At the closing,  the applicable  Members and/or the Outside
Party,  as the case may be, shall pay for the Offered Units in  accordance  with
the terms of the Offer.  At any  closing  pursuant  to this  Section  14.2,  the
Selling  Holder(s)  shall  deliver  certificates  representing  the Units  being
Transferred,  free and clear of all liens, charges and encumbrances and properly
endorsed for Transfer.

     SECTION 14.3 Right to Compel Sale. (a) If Siebert,  Brandford or Shank (the
"transferring  party")  proposes to sell all of the Units then owned by him, her
or it to a third party in an arms-length  transaction in which the consideration
to be received  for such Units  consists of cash and/or  marketable  securities,
then Siebert may require Brandford, Shank and any other Member or Unit holder to
sell,  and  Brandford  and/or Shank may require  Siebert and any other Member of
Unit holder to sell,  all of the Units owned by him, her or it (the  "Designated
Units") to the third party for the same  consideration per Unit and otherwise on
the same  terms and  conditions  upon which  such  Member is  selling  its Units
pursuant to the provisions set forth in this Section 14.3.

          (b) Siebert  shall send written  notice of the exercise of such rights
pursuant to this Section 14.3 to Brandford,  Shank, and any other Member or Unit
holder,  and Brandford and/or Shank shall send written notice of the exercise of
such rights  pursuant to this  Section  14.3 to Siebert and any other  Member or
Unit holder,  setting forth the  consideration  per Unit to be paid by the third
party and the other terms and conditions of such transaction. Within twenty (20)
days following the date of the notice, Siebert,  Brandford, Shank, and any other
Member or Unit  holder  shall  deliver to the  transferring  party  certificates
representing the Units held by him, her, or it duly endorsed,  together with all
other transfer documents  reasonably  required to be executed in connection with
such  transaction.  In the event that  Brandford,  Shank, or any other Member or
Unit holder should fail to deliver such certificates to the transferring  party,
the  Company  shall cause the books and records of the Company to show that such
Units are bound by the provisions of this Section 14.3 and that such Units shall
be transferred only to the third party upon surrender for transfer by the holder
thereof.

          (c) If,  within  ninety (90) days after the  transferring  party gives
such  notice,  the  sale of all  Units  in  accordance  herewith  has  not  been
completed,  the transferring party shall return to Siebert,  Brandford or Shank,
and any other  Member or Unit holder all  certificates  representing  Units that
Siebert,Brandford,  Shank, or any Member or Unit holder  delivered for sale, and
all the  restrictions on sale or other  disposition  contained in this Agreement
with respect to Units owned by all Persons shall again be in effect.

                                       36

<PAGE>

          (d)  Simultaneously  with the consummation of the sale of the Units of
all Members pursuant to this Section 14.3, the  transferring  party shall notify
Siebert,  Brandford  or  Shank,  and any  other  Member  or Unit  holder  of the
consummation  of the sale, and shall:  (i) cause the purchaser to remit directly
to Siebert,  Brandford  or Shank,  and any other Member or Unit holder the total
sales  price for such  Person's  Units sold or  otherwise  disposed  of pursuant
hereto,  and (ii)  furnish  such other  evidence of the  completion  and time of
completion  of such sale or other  disposition  and the terms  thereof as may be
reasonably requested by any Member or Unit holder.

     SECTION 14.4 Right to  Purchase.  (a) Upon (i) the death or  Disability  of
Brandford,  Shank or any other  Member who is also an employee or officer of the
Company,  directly or indirectly,  or (ii) the  termination of any such Person's
employment directly or indirectly with the Company for any reason (the deceased,
disabled or terminated Member being known as the "Affected Member"), the Company
shall send a notice in writing to all Members  informing them of such occurrence
(the "Purchase Notice").

          (b) Upon the giving of the Purchase Notice,  whichever of Brandford or
Shank who has not died,  become disabled or been  terminated (the  "Non-Affected
Member")  shall have the right,  but not the  obligation,  to purchase,  and the
Affected Member (or his duly appointed legal  representative) shall sell, any or
all of the Units  owned by the  Affected  Member for the  purchase  price and in
accordance  with the  procedures  set forth in this Section 14.4.  Within thirty
(30) days after the date of the Purchase Notice,  the Non-Affected  Member shall
notify the Affected Member or his duly appointed legal representative and all of
the other  Members  whether and to what extent he intends to exercise his rights
under this Section 14.4. Failure to deliver such notice within such period shall
constitute a waiver of the Non-Affected Member's rights under this Section 14.4.

          (c) In the event that the  Non-Affected  Member does not  exercise his
purchase option as to all of the Affected  Member's  Units,  Siebert and each of
the other Members  shall have the right,  but not the  obligation  (the "Siebert
Right"), to purchase, at the price set forth in this Section 14.4, such Member's
Proportionate   Share  of  the  Affected  Member's  Units  not  claimed  by  the
Non-Affected Member by notifying the Affected Member or his duly appointed legal
representative,  the other  Members  and the  Company in writing  (the  "Siebert
Notice")  within forty (40) days after the date of the Purchase  Notice  whether
and to what extent such Member intends to exercise its rights under this Section

                                       37

<PAGE>

14.4. If any Member fails to exercise its rights as to all of its  Proportionate
Share of the Affected  Member's Units,  then any of the other Members shall have
the right to  purchase  all or part of the  Affected  Member's  Units  that such
Member has elected not to purchase by amending its respective notice within five
(5) days after the date that it  receives  notice  that any other  Member has so
declined to exercise its rights in full.  Failure to deliver any notice required
under this Section 14.4 within the applicable  periods shall constitute a waiver
of such Member's purchase rights as to the Affected Member's Units.

          (d) The  purchase  price  for the  Units  purchased  pursuant  to this
Section 14.4 shall be the Book Value of the Units owned by the  Affected  Member
(as  determined by the Company's  independent  certified  public  accountants in
accordance with generally accepted accounting  principles  consistently  applied
and  valued)  on the  date  of the  Affected  Member's  death,  disablement,  or
termination of employment; provided, however, that if:

               (i) the Affected Member's employment is terminated by the Company
due to the Affected Member's death, Disability or termination of employment; AND

               (ii) the Book Value of the Affected Member's Units on the date of
determination  is less than the Fair  Market  Value of the Units on such date as
determined in good faith by the Board of Managers; THEN

               (iii)  the  purchase  price  for  the  Affected   Member's  Units
purchased  pursuant to this  Section 14.4 shall be such Fair Market Value of the
Affected Member's Units.

          (e) The closing for any purchase of Units by the Non- Affected Member,
Siebert and/or any other Members  pursuant to this Section 14.4 shall be held at
10:00 A.M. (local time) at the offices of the Company on the sixtieth (60th) day
after the date of the  Purchase  Notice or at such  other  time and place as the
parties shall agree. At the closing, the Non-Affected Member, Siebert and/or the
other Members,  as the case may be, shall pay for the Affected Member's Units in
accordance  with the price  determined in Section 14.4(d) above. At any closing,
the Affected  Member shall  deliver  certificates  representing  the Units being
Transferred,  free and clear of all liens, charges and encumbrances and properly
endorsed for Transfer.

     SECTION  14.5 Call Right.  (a) In the event that at any time the  aggregate
Net Losses for all Fiscal Years shall exceed the  aggregate  Net Profits for all
Fiscal Years by One Million Dollars  ($1,000,000) or more (such excess being the
"Deficit"  and such  event  being  the  "Triggering  Event"),  Siebert  shall be
entitled to purchase  from each of Brandford  and Shank twenty  percent (20%) of
all the Units held by such Person (the  "Siebert  Call Right") and Brandford and
Shank shall sell such Units to Siebert at the price and in  accordance  with the
procedures set forth in this Section 14.5 unless Brandford and/or Shank elect to
contribute to the Company the amount of the Deficit in cash.

                                       38

<PAGE>

          (b) Within  thirty (30) days after the date of the  Triggering  Event,
Siebert shall notify  Brandford and Shank in writing (the "Siebert Call Notice")
whether  and to what  extent it intends to  exercise  the  Siebert  Call  Right.
Failure to deliver the Siebert Call Notice within such period shall constitute a
waiver of the Siebert Call Right. Within thirty (30) days after the Siebert Call
Notice,  Brandford  and Shank shall have notify  Siebert  whether they intend to
contribute  to the Company the amount of the Deficit in cash.  If they do not so
elect,  Siebert  shall be entitled to purchase the Units  described in paragraph
(a) above.  If they do so elect,  they shall have  thirty (30) days to do so. If
they fail to do so,  Siebert  shall  again be  entitled  to  purchase  the Units
described in paragraph (a) above.

          (c) The  purchase  price  for the  Units  purchased  pursuant  to this
Section 14.5 shall be the Book Value of the Units as determined by the Company's
independent  certified public  accountants in accordance with generally accepted
accounting  principles  consistently  applied  and  valued  on the  date  of the
occurrence of the Triggering Event.

          (d) The closing for any  purchase  of Units  pursuant to this  Section
14.5  shall be held at 10:00  a.m.  at the  offices  of the  Corporation  on the
sixtieth  (60th) day after the date of the Siebert  Call Notice or at such other
time and place as the parties shall agree. At the closing, Siebert shall pay for
the Units and Brandford and Shank shall deliver  certificates  representing  the
Units  free and  clear of all  liens,  charges  and  encumbrances  and  properly
endorsed for transfer.

     SECTION  14.6  Transferee  Rights.  Any  transferee  of a  Unit  who is not
admitted as a Member in  accordance  with Section 3.6 of this  Agreement  has no
right (i) to participate or interfere in the management or administration of the
Company's  business or affairs or (ii) to vote or agree on any matter  affecting
the Company or any Member.  The only rights of a transferee of a Unit who is not
admitted as a Member in  accordance  with  Section 3.6 of this  Agreement  is to
receive the  Distributions  to which the transferor  would otherwise be entitled
(to  the  extent  of the  Unit  transferred)  and  to  obtain  such  information
concerning  the  Company's  books and  financial  affairs  as  provided  herein.
However, each transferee will be subject to all of the obligations, restrictions
and other terms contained in this Agreement as if such transferee were a Member.
To the extent of any Unit  transferred,  the transferor Member shall not possess
any right or power as a Member or under the terms of this  Agreement and may not
exercise  any such  right or power  directly  or  indirectly  on  behalf  of the
transferee.

                                       39

<PAGE>

     SECTION 14.7 Effective Date. Any sale of a Member's Units or admission of a
Member pursuant to this Article XIV shall be deemed effective as of the last day
of the calendar month in which such sale or admission occurs.

     SECTION 14.8 Secured Party. The pledge or hypothecation of, or the granting
of any security interest in, or other lien or encumbrance against, a Unit by any
Person shall be made only in accordance  with this  Agreement and will not cause
the occurrence of an Event of Withdrawal of such Member from the Company.  In no
event will the Company have any  liability or obligation to any Person by reason
of the Company's  payment of a Distribution  to any secured party as long as the
Company makes such payment in reliance upon written instructions from the holder
of record on whose behalf such Distributions are payable. Any secured party will
be  entitled,  with  respect  to the  security  interest  granted,  only  to the
Distributions  to which the holder of record  granting the security  interest is
entitled under this  Agreement,  and only if, as and when such  Distribution  is
made  by the  Company.  Upon  any  foreclosure  or  other  Transfer  in  lieu of
foreclosure of a Unit to any secured party,  the Transfer will be subject to the
other provisions of this Agreement.


                                   ARTICLE XV
                               General Provisions

     SECTION  15.1  Waiver  of  Dissolution   Rights.  The  Members  agree  that
irreparable damage would occur if any Member should bring an action for judicial
dissolution  of the Company.  Accordingly,  each Member  accepts the  provisions
under this  Agreement as such Member's sole  entitlement  on  Dissolution of the
Company and waives and renounces  such Member's  right to seek a court decree of
dissolution  or to seek  the  appointment  by a court  of a  liquidator  for the
Company.  Each Member further waives and renounces any alternative  rights which
might  otherwise be provided by law upon the  withdrawal or  resignation of such
Member and accepts the  provisions  under this  Agreement as such  Member's sole
entitlement upon the happening of such event.

     SECTION 15.2 Waiver of Partition  Right.  Each Member  waives and renounces
any right that it may have prior to Dissolution  and Liquidation to institute or
maintain any action for partition with respect to any property of the Company.

     SECTION 15.3 Waivers  Generally.  No course of performance or other conduct
subsequently  pursued or acquiesced in, and no oral agreement or  representation
subsequently  made, by the Members,  whether or not relied or acted upon, and no
usage of trade,  whether or not relied or acted upon, shall amend this Agreement
or  impair  or  otherwise  affect  any  Member's  obligations  pursuant  to this
Agreement or any rights and remedies of a Member pursuant to this Agreement.  No
delay in the  exercise of any right will  operate as a waiver of such right.  No

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<PAGE>

single or partial  exercise of any right will preclude its further  exercise.  A
waiver of any right on any one  occasion  will not be  construed as a bar to, or
waiver of, any such right on any other occasion.

     SECTION 15.4 Equitable  Relief.  If any Member  proposes to Transfer all or
any part of its Units in violation of the terms of this  Agreement,  the Company
or any Member may apply to any court of competent jurisdiction for an injunctive
order  prohibiting such proposed  Transfer except upon compliance with the terms
of this Agreement,  and the Company or any Member may institute and maintain any
action or  proceeding  against  the Person  proposing  to make such  Transfer to
compel the specific  performance of this  Agreement.  Any attempted  Transfer in
violation of this  Agreement is null and void,  and of no force and effect.  The
Person  against whom such action or  proceeding  is brought  waives the claim or
defense that an adequate remedy at law exists,  and such Person will not urge in
any such  action or  proceeding  the claim or  defense  that such  remedy at law
exists.

     SECTION 15.5 Remedies for Breach.  Unless  otherwise set forth herein,  the
rights and  remedies  of the  Members  set forth in this  Agreement  are neither
mutually  exclusive  nor  exclusive  of any right or remedy  provided by law, in
equity or otherwise. The Members agree that all legal remedies (such as monetary
damages) as well as all equitable  remedies (such as specific  performance) will
be  available  for any  breach or  threatened  breach of any  provision  of this
Agreement.

     SECTION 15.6 Costs.  If the Company or any Member  retains  counsel for the
purpose of enforcing or preventing  the breach or any  threatened  breach of any
provision of this  Agreement  or for any other  remedy  relating to it, then the
prevailing  party will be entitled to be reimbursed by the  nonprevailing  party
for all costs and expenses so incurred  (including  reasonable  attorney's fees,
costs of bonds, and fees and expenses for expert witnesses).

     SECTION  15.7  Counterparts.  This  Agreement  may be  signed  in  multiple
counterparts.  Each counterpart will be considered an original,  but all of them
in the aggregate will constitute one instrument.

     SECTION 15.8 Notice.  All notices under this  Agreement  will be in writing
and will be  delivered or sent to a Member at the address or  telecopier  number
listed on Schedule I hereto,  or at such other address or fax number as a Member
may give by notice to the Company and all other  Members.  Any notices  given to
any Member in accordance  with this  Agreement  will be deemed to have been duly
given:  (a) on the date of receipt if  personally  delivered,  (b) five (5) days
after being sent by mail, postage prepaid,  (c) the date of receipt,  if sent by
registered or certified mail, postage prepaid, (d) when sent by confirmed

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facsimile or telecopier  transmission,  or (e) one (1) Business Day after having
been sent by a recognized overnight courier service.

     SECTION 15.9 Date of Performance.  Whenever this Agreement provides for any
action to be taken on a day which is not a Business  Day,  such action  shall be
taken on the next following Business Day.

     SECTION 15.10 Limited Liability.  (a) The liability of each Member,  holder
of any  interest  herein who is not a Member,  officer  or agent of the  Company
shall be limited as set forth in this  Agreement,  the Act and other  applicable
law.  No Member,  holder of any  interest  herein who is not a Member,  Manager,
officer  or agent  of the  Company  is  liable  for any  debts,  obligations  or
liabilities of the Company or each other,  whether arising in tort,  contract or
otherwise,  solely by reason of being a Member, holder of interest herein who is
not a Member, officer or agent of the Company, or acting (or omitting to act) in
such  capacities or  participating  (as an employee,  consultant,  contractor or
otherwise)  in the conduct of the business of the Company,  except that a holder
of any interest  herein shall remain  personally  liable for the payment of such
holder's Capital Contribution and as otherwise set forth in this Agreement,  the
Act and other applicable law.

          (b)  Notwithstanding  the  foregoing,  a Manager  shall  perform  such
Manager's  duties in accordance  with the  provisions  hereof.  A Manager who so
performs  such duties shall not have any  liability by reason of being or having
been a Manager.  No Manager  shall be liable to the Company or any holder of any
interest herein for any loss or damage sustained by the Company or any holder of
any interest herein,  unless a judgment or other final  adjudication  adverse to
such Manager establishes that such Manager's acts or omissions were in bad faith
or  involved  intentional  misconduct  or a knowing  violation  of law.  Without
limiting the generality of the preceding sentence, a Manager does not in any way
guaranty  the return of any  Capital  Contribution  to a holder of any  interest
herein or a profit for the holders of any interest herein from the operations of
the Company.

     SECTION 15.11 Partial Invalidity. Wherever possible, each provision of this
Agreement  will be  interpreted  in such a manner as to be  effective  and valid
under  applicable  law.  However,  if for  any  reason  any  one or  more of the
provisions of this Agreement are held to be invalid, illegal or unenforceable in
any respect,  such action will not affect any other provision of this Agreement.
In such event this  Agreement  will be construed as if such invalid,  illegal or
unenforceable provision had never been contained in it.

     SECTION  15.12  Entire  Agreement.   This  Agreement  contains  the  entire
agreement  among  the  Members  with  respect  to the  subject  matter  of  this
Agreement,   and  supersedes  each  course  of  conduct  previously  pursued  or
acquiesced in, and each oral agreement and  representation  previously  made, by
the Members and the Company with respect thereto, whether or not relied or acted
upon.

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     SECTION  15.13  Amendments.  No  course  of  performance  or other  conduct
subsequently  pursued or acquiesced in, and no oral agreement or  representation
subsequently  made, by the Members,  whether or not relied or acted upon, and no
usage of trade,  whether or not relied or acted upon, shall amend this Agreement
or  impair  or  otherwise  affect  any  Member's  obligations  pursuant  to this
Agreement or any rights and remedies of a Member pursuant to this Agreement.  No
amendment to this  Agreement  shall be  effective  unless made in a writing duly
executed by all of the Members and  specifically  referring to each provision of
this Agreement being amended.

     SECTION 15.14  Benefit.  The  contribution  obligations of each Member will
inure  solely to the  benefit  of the other  Members  and the  Company,  without
conferring on any other Person any rights of enforcement or other rights.

     SECTION 15.15 Binding Effect. This Agreement is binding upon, and inures to
the  benefit  of, the  Members and their  transferees,  successor  and  assigns,
provided  that, any  transferee  will have only the rights  specified in Section
14.6 unless admitted as an additional Member in accordance with this Agreement.

     SECTION 15.16  Further  Assurances.  Each Member  agrees,  without  further
consideration,  to sign and deliver such other documents of further assurance as
may reasonably be necessary to effectuate the provisions of this Agreement.

     SECTION 15.17  Headings.  Article and section titles have been inserted for
convenience  of reference  only.  They are not intended to affect the meaning or
interpretation of this Agreement.

     SECTION 15.18 Terms.  Terms used with initial capital letters will have the
meanings  specified,  applicable  to both  singular  and plural  forms,  for all
purposes of this  Agreement.  All pronouns (and any variation) will be deemed to
refer to the  masculine,  feminine or neuter,  as the identity of the Person may
require.  The singular or plural includes the other, as the context  requires or
permits.  The word include (and any variation) is used in an illustrative  sense
rather than in a limiting  sense.  The word "day" means a calendar  day,  unless
otherwise  specified.  Unless  otherwise  indicated  herein,  the term "section"
refers to Sections of this Agreement.

     SECTION 15.19 Conversion.  If the Net Profits of the Company warrant in the
opinion of Siebert  Financial  Corp.,  each of Brandford and Shank shall each be
entitled to exchange 20% of their Units for stock of Siebert  Financial Corp., a
New York corporation,  on a basis to be determined by Siebert Financial Corp. at
the time.

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<PAGE>

     SECTION 15.20 Governing Law; Consent to  Jurisdiction.  This Agreement will
be governed  by, and  construed  in  accordance  with,  the laws of the State of
Delaware  (without  giving  effect to Delaware  choice of law  provisions).  Any
conflict  or  apparent  conflict  between  this  Agreement  and the Act  will be
resolved in favor of this Agreement except as otherwise  required by the Act. In
any action or proceeding  arising out of, related to, or in connection with this
Agreement,  the parties consent to be subject to the  jurisdiction  and venue of
(a) the Superior  Court of the State of  California in and for the County of San
Francisco  located  in the  City of San  Francisco,  and (b) the  United  States
District  Court for the  Northern  District of  California.  Each of the parties
consents  to the  service  of  process  in any  action  commenced  hereunder  by
certified or registered mail, return receipt  requested,  or by any other method
or service  acceptable under federal law or the laws of the State of California.
IN THE EVENT THAT AN ACTION IS COMMENCED IN THE STATE OF CALIFORNIA, THE PARTIES
HEREBY AGREE TO WAIVE THEIR RIGHTS TO A TRIAL BY JURY.

                       [This Page Intentionally Ends Here]

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     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the
date first above written.


                                    SIEBERT, BRANDFORD, SHANK & CO., LLC


                                    By:  /S/  SUZANNE F. SHANK
                                        ---------------------------------------
                                        Name: Suzanne F. Shank
                                        Title: Member, President


                                    MURIEL SIEBERT & CO., INC.


                                    By: /S/  MURIEL F. SIEBERT
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       /S/  NAPOLEON BRADFORD III
                                       ----------------------------------------
                                       Napoleon Brandford III


                                       /S/  SUZANNE F. SHANK
                                       ----------------------------------------
                                              Suzanne F. Shank

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<PAGE>

                                   SCHEDULE I


Name of Member                   Total Contribution           Number of Units
--------------                   ------------------           ---------------

Muriel Siebert & Co., Inc.       Three Hundred Ninety-Two        490 Units
885 Third Avenue                 Thousand Dollars and No
Suite 1720                       Cents.
New York, NY 10022
(212) 838-0647

Napoleon Brandford III           Two Hundred Four Thousand       255 Units
220 Sansome Street               Dollars and No Cents.
15th Floor
San Francisco, CA  94104
(415) 439-4480

Suzanne F. Shank                 Two Hundred Four Thousand       255 Units
100 Renaissance Center           Dollars and No Cents.
Suite 1601
Detroit, MI 48243
(313) 396-0096




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