Document:

Exhibit 10.237

                 U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN

                              Amended and Restated
                            Effective January 1, 2001

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                                  TABLE OF CONTENTS

                                                                           Page

ARTICLE 1         HISTORY AND PURPOSE OF PLAN.................................1

ARTICLE 2         DEFINITIONS.................................................1

ARTICLE 3         MEMBERSHIP..................................................8

   3.1        Commencement of Membership......................................8
   3.2        Termination of Membership.......................................9
   3.3        Resumption of Membership after Severance Date...................9

ARTICLE 4         CREDITED SERVICE............................................9

   4.1        Service Credited as of December 31, 1975........................9
   4.2        Service Credited after December 31, 1975........................9
   4.3        Effect of Breaks in Service on Credited Service.................9
   4.4        Veterans' Rights...............................................10

ARTICLE 5         VESTING....................................................10

   5.1        Eligibility for Vested Deferred Pension........................10
   5.2        Amount and Payment of Vested Deferred Pension..................10
   5.3        Effect of Breaks in Service after December 31, 1975............11
   5.4        Restoration to Service of Vested Member........................11
   5.5        Separation of Members Without Vested Rights....................12
   5.6        Death of Vested Member.........................................12

ARTICLE 6         RETIREMENT.................................................12

   6.1        Normal Retirement..............................................12
   6.2        Early Retirement...............................................12
   6.3        Postponed Retirement...........................................13
   6.4        Disability Retirement..........................................13
   6.5        Nonforfeitability of Pensions..................................13
   6.6        Restoration to Employment......................................13

ARTICLE 7         RETIREMENT PENSIONS........................................13

   7.1        Normal Retirement Pension......................................13
   7.2        Early Retirement Pension.......................................14
   7.3        Postponed Retirement Pension...................................15
   7.4        Disability Retirement Pension..................................15
   7.5        Restoration of Retired Members to Employment...................15
   7.6        Payment of Pensions............................................15
   7.7        Maximum Pension Limitations....................................16
   7.8        Post-Retirement Increase of Benefits of Members
              Retiring before January 1, 1976................................18
   7.9        Supplemental Benefit for Certain Retired Members...............18
   7.10       Benefit Enhancement for Certain Employees......................20

ARTICLE 8         SURVIVORSHIP AND OPTIONAL PENSIONS.........................22

   8.1        Form of Payment of Pensions....................................22
   8.2        Election of Form of Payment of Pension.........................22
   8.3        Notice to Members of Election of a Form of Payment of Pension..22
   8.4        Optional Forms of Pensions.....................................23
   8.5        Death of Member's Spouse or Beneficiary........................24
   8.6        Level Income Option............................................24
   8.7        Spouse's Preretirement Survivorship Pension....................25
   8.8        Distribution requirements......................................26
   8.9        Early Distributions............................................26
   8.10       Direct Rollovers...............................................27

ARTICLE 9         CERTAIN RIGHTS AND LIMITATIONS.............................27

   9.1        Benefits Payable Solely from Trust Fund........................27
   9.2        Prohibition against Alienation of Benefits.....................27
   9.3        Incompetency...................................................28
   9.4        No Right to Continued Employment...............................28
   9.5        Payment of Taxes...............................................28
   9.6        Merger or Consolidations with Other Plans......................28
   9.7        Purchase of Annuities..........................................29
   9.8        Periods of Liquidity Shortfall.................................29

ARTICLE 10        CONTRIBUTIONS..............................................29

   10.1       Manner of Funding..............................................29
   10.2       Nature of Obligation...........................................30
   10.3       Minimum Funding Standard.......................................30
   10.4       Effect of Forfeitures..........................................30
   10.5       Non-Diversion..................................................30

ARTICLE 11        ADMINISTRATION OF THE PLAN.................................30

   11.1       Appointment of the Committee...................................30
   11.2       Duties and Powers of Committee.................................31
   11.3       Appointment of Investment Committee............................31
   11.4       Conduct of Affairs of Investment Committee.....................31
   11.5       Duties and Powers of Investment Committee......................31
   11.6       Reports to Company.............................................31
   11.7       Conduct of Affairs of Committee................................32
   11.8       Actuarial Valuations...........................................32
   11.9       Appointment of the Plan Administrator..........................32
   11.10      Duties and Powers of the Plan Administrator....................32
   11.11      Delegation of Responsibilities by the Plan Administrator.......33
   11.12      Conduct of Affairs of the Plan Administrator...................34
   11.13      Expenses and Liability.........................................34
   11.14      Indemnification of Committee and Investment
              Committee Members and Persons Serving as Plan
              Administrator..................................................36
   11.15      Claims Procedure...............................................36

ARTICLE 12        MANAGEMENT OF THE TRUST FUND...............................37

   12.1       The Trustee....................................................37
   12.2       The Trust Agreement............................................37
   12.3       Compensation and Expenses......................................37

ARTICLE 13        AMENDMENT AND TERMINATION..................................37

   13.1       Amendment of Plan and Trust....................................37
   13.2       Termination of Plan............................................38
   13.3       Special Limitation for Highly Compensated Employees............39

ARTICLE 14        OTHER PARTICIPATING COMPANIES..............................40

   14.1       Additional Participating Companies.............................40
   14.2       Withdrawal of Participating Company............................40
   14.3       Successor Companies............................................41

ARTICLE 15        TOP HEAVY PROVISIONS.......................................41

   15.1       Top Heavy Plan Requirements....................................41
   15.2       Determination of Top Heavy Status..............................41
   15.3       Minimum Vesting Requirement....................................43
   15.4       Minimum Benefit Requirement....................................43
   15.5       Limitation on Compensation and Section 415 Compensation........44
   15.6       Other Definitions..............................................44
   15.7       Applicability..................................................45

ARTICLE 16        CONSTRUCTION...............................................45

   16.1       Plan Intended to Qualify.......................................45
   16.2       Governing Law..................................................45
   16.3       Words and Headings.............................................45

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                U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN

                                    ARTICLE 1
                            HISTORY AND PURPOSE OF PLAN

     This Plan is intended to provide  retirement  benefits to employees of U.S.
Trust Corporation and any affiliated company which chooses to participate in the
Plan upon their being retired after rendering productive and faithful service.

     A retirement program was initially adopted on June 2, 1939, effective as of
the same date, and was amended and formally adopted by the Board of Directors of
the  United  States  Trust  Company of New York on August  23,  1945,  effective
January 1, 1945.  Under the  Eighteenth  Amendment and  Restatement of the Plan,
adopted on November 22, 1997,  the name of the Plan was formally  changed to the
Employees'  Retirement  Plan of  United  States  Trust  Company  of New York and
Affiliated Companies.

     The Plan was most  recently  amended and  restated on  December  30,  1999,
effective  January 1, 1997.  The Plan is hereby  amended and restated  effective
January 1, 2001,  unless otherwise  provided herein, to (a) reflect the transfer
of the Plan  sponsorship  from United  States Trust  Company of New York to U.S.
Trust  Corporation,  (b) formally change the name of the Plan to the "U.S. Trust
Corporation  Employees'  Retirement  Plan," (c) reflect the merger of U.S. Trust
Corporation  with  Charles  Schwab  (as  hereinafter  defined),  (d)  limit  the
eligibility  for benefits under the formula in effect as of December 31, 2001 to
individuals who become  Employees of a  Participating  Company on or before such
date,  (e) embody  operational  changes  adopted to comply with  recent  changes
required by law, and (e) make certain other changes to the Plan.

     The rights of any person who  terminated  employment  or who  retired on or
before the effective date of a particular  amendment,  including his eligibility
for  benefits  and the time and form in which  benefits,  if any,  will be paid,
shall be determined  solely under the terms of the Plan as in effect on the date
of his termination of employment or retirement, unless such person is thereafter
reemployed and again becomes a Member.

                                    ARTICLE 2
                                   DEFINITIONS

     As used in this Plan, the following terms shall have the meanings described
in this Article 2:

     2.1  "Affiliated  Company"  means the  Company,  any  corporation  which is
included in a controlled  group of  corporations  (within the meaning of section
414(b) of the Code) which includes the Company,  any trade or business  (whether
or not incorporated)  which is under common control with the Company (within the
meaning of section 414(c) of the Code),  any  organization  included in the same
affiliated  service group (within the meaning of section  414(m) of the Code) as
the Company and any other  entity  required  to be  aggregated  with the Company
pursuant to the  regulations  under section  414(o) of the Code. In  identifying
Affiliated Companies for purposes of applying the provisions of Section 7.7 with
respect to the  limitations on benefits,  section 415(h) of the Code shall apply
in conjunction with the preceding sentence.

     2.2 "Average Final Compensation" means the average Compensation of a Member
for  those  five  consecutive  Plan  Years,  falling  within  the  period of ten
consecutive  Plan Years which ends with the Plan Year in which he separates from
service  under  Article 5 or retires under Article 6, that result in the highest
such  average.  If the  number  of Plan  Years  during  which a Member  received
Compensation  is  less  than  five  Plan  Years,   the  Member's  Average  Final
Compensation  shall be his average  Compensation for all Plan Years during which
he received Compensation.

     2.3  "Beneficiary"  means any person who will  receive any  benefits  which
become  payable  under the Plan upon the Member's  death in the case of a Member
who elects to have his Pension paid under Option 2 of Section 8.4.

     2.4 "Board of  Directors"  means the Board of  Directors of the Company and
such committees thereof as it may from time to time appoint to act on its behalf
with respect to the Plan.

     2.5  "Break  in  Service"  means any  Computation  Period  during  which an
Employee is credited with not more than 500 Hours of Service.

     2.6  "Charles  Schwab"  means  The  Charles  Schwab   Corporation  and  any
corporation which is included in a controlled group of corporations  (within the
meaning  of  section  414(b) of the Code)  which  includes  The  Charles  Schwab
Corporation,  any trade or business (whether or not incorporated) which is under
common  control with the The Charles Schwab  Corporation  (within the meaning of
section 414(c) of the Code),  any  organization  included in the same affiliated
service group (within the meaning of section  414(m) of the Code) as The Charles
Schwab  Corporation  and any other  entity  required to be  aggregated  with The
Charles Schwab  Corporation  pursuant to the regulations under section 414(o) of
the Code.

     2.7 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     2.8 "Committee" means the administrative  committee  appointed by the Board
of   Directors   to  have  the   powers,   and  to  carry  out  the  duties  and
responsibilities, set forth in Section 11.2.

     2.9 "Company" means U.S. Trust Corporation,  and any corporation succeeding
to its rights and  assuming  its  obligations  hereunder  as provided in Section
14.3.

     2.10  "Compensation"  for a Plan Year  means the  annual  rate of base pay,
including  a  shift  differential,  that  the  Employee  was  receiving  from  a
Participating  Company,  for personal services rendered,  as of the final day of
such Plan Year,  except that for the Plan Year in which the  Employee  separates
from service under Article 5 or retires  under Article 6,  "Compensation"  shall
mean  the  annual  rate of base  pay  that the  Employee  was  receiving  from a
Participating Company, for personal services rendered, as of the day immediately
preceding  the  date  on  which  he  so  separated   from  service  or  retired.
Compensation  shall be determined before reduction for any contributions made on
behalf of the Employee in accordance with the Employee's  election pursuant to a
cash or deferred  arrangement  qualified under section 401(k) of the Code, or in
accordance  with the  Employee's  election  relating  to the payment of medical,
dental,  or dependant  care coverage  pursuant to a cafeteria  plan described in
section 125 of the Code, or in accordance with the Employee's  election relating
to amounts that are not includable in the gross income of the Employee by reason
of Code Section 132(f)(4),  and before reduction for any deductions for taxes or
other items withheld.  Compensation  shall not include any overtime pay, bonuses
or special pay, but shall include shift differentials,  except that for purposes
of determining Average Final Compensation,  the definition of Compensation for a
prior Plan Year shall include a shift  differential  only if the Participant was
entitled to a shift differential on the last day of such Plan Year.

     Notwithstanding  the above,  in the case of an Employee  who has incurred a
Total  Disability,  for Plan  Years  ending  after the date on which  such Total
Disability arose (the "Total Disability  Date"),  the Employee's  "Compensation"
shall  be his  Compensation,  as  determined  above,  as of the day  immediately
preceding his Total Disability Date.

     For each Plan Year, the amount of Compensation taken into account under the
Plan for any Employee  shall not exceed the limitation on such amount imposed by
section  401(a)(17) of the Code in effect for such Plan Year  ($170,000 for 2001
and effective for Plan Years beginning on or after January 1, 2002, $200,000, as
adjusted for increases in the  cost-of-living  in  accordance  with Code Section
401(a)(17)(B) as in effect for the applicable Plan Year).

     Notwithstanding the above,  effective for Plan Years beginning on and after
January 1,  1994,  the  section  401(a)(17)  limitation  shall not be applied to
reduce the amount of the Pension  payable  under the Plan to a Member  below the
amount  equal to the sum of (a) the amount of the Pension  that would be payable
to such  Member  under the Plan as of  December  31,  1993,  computed as if such
Member had separated from service under Article 5 or retired under Article 6, as
applicable,  on December  31, 1993 and (b) the amount of the Pension  payable to
such Member  computed under Article 5 or Article 7, as  applicable,  taking into
account only Compensation  received,  and Years of Service and units of Credited
Service  earned,  for Plan Years  beginning  on and after  January  1, 1994.  In
applying the preceding  sentence,  the amount in clause (a) thereof shall not be
less than the amount of the  Pension  that would be payable to the Member  under
the Plan as of  December  31,  1988,  computed  without  regard  to the  section
401(a)(17) limitation, and computed as if such Member had separated from service
under Article 5 or retired under Article 6, as applicable, on December 31, 1988.

     2.11 "Computation  Period" means the 12 consecutive month period commencing
with the date on which a person first became an Employee and each  successive 12
consecutive month period commencing on the anniversary thereof.  With respect to
a person who suffers a Break in Service after  incurring a Severance  Date,  the
Computation  Period shall be the 12 consecutive month period commencing with the
date upon which he last became an Employee and each  successive  12  consecutive
month period commencing on the anniversary thereof.

     2.12 "Covered  Compensation"  means,  for any Member in any Plan Year,  the
average of the Taxable  Wage Bases (as  hereinafter  defined) in effect for each
calendar year during the 35 year period ending with the last day of the calendar
year in which the Member attains or will attain his Social  Security  Retirement
Age. In determining a Member's Covered Compensation for a Plan Year, the Taxable
Wage Base for such Plan Year and any subsequent  Plan Year shall be equal to the
Taxable  Wage Base in effect at the  beginning  of such Plan  Year.  A  Member's
Covered Compensation for a Plan Year after the 35 year period described above is
the  Covered  Compensation  for the Plan Year in which the Member  attained  his
Social  Security  Retirement  Age.  A  Member's  Covered  Compensation  shall be
redetermined  each Plan Year, as described  above,  to reflect any change in the
Taxable Wage Base. For purposes of this  definition,  the Taxable Wage Base in a
given  calendar  year  is  the  maximum  amount  of  compensation  which  may be
considered wages for such year under section 3121(a)(1) of the Code.

     2.13 "Credited  Service" means that period of employment for which a Member
is entitled to receive  units of credit  under the Plan as provided in Article 4
for the purpose of computing the Member's accrued benefits under the Plan.

     2.14 "Earliest  Payment Date" means the first date as of which a Member who
has  separated  from service  under Article 5 or who has retired under Article 6
may elect to have the payment of his Pension commence under the Plan.

     2.15  "Effective  Date" of the Plan  means  January  1,  1945.  The Plan as
amended  and  restated  herein is  effective  as of January  1, 1997,  except as
otherwise provided herein.

     2.16 "Employee" means any person who is employed by an Affiliated  Company;
provided,  however,  that the term Employee  shall not include any person who is
treated as a "leased employee" of any Affiliated Company under section 414(n)(2)
of the Code.

     2.17  "Equivalent  Actuarial  Value" means,  except as otherwise  specified
below,  equivalent  value  determined  on the  basis of the  conversion  factors
contained in Appendix A attached hereto.

     For purposes of Sections  5.4,  7.3, 7.5 and 8.7(c),  the term  "Equivalent
Actuarial Value" means equivalent value determined on the basis of the following
assumptions, and for purposes of Section 15.2(e) the actuarial assumptions to be
utilized  in  computing  the  Present  Value of  Accrued  Benefits  shall be the
following:  (1) life expectancy  based on the UP-84 mortality  table; and (2) an
interest rate of seven percent (7%) per year.

     For purposes of Section 7.7(c), the term "Equivalent Actuarial Value" means
equivalent value determined on the basis of the following assumptions:  (a) life
expectancy based on the mortality table described in section  415(b)(2)(E)(v) of
the Code;  and (b) an interest rate of five percent (5%) per year in the case of
any adjustment of a benefit, or the limitation of any form of benefit,  which is
a non-decreasing  annuity, or the "applicable  interest rate", as defined below,
in any other case.

     For  purposes  of Sections  7.6 and 8.7(d)  and, to the extent  applicable,
Section  8.6,  and for  valuing  the  lump  sum  payment  described  in  Section
7.10(a)(3),   the  term  Equivalent   Actuarial  Value  means  equivalent  value
determined on the basis of the following assumptions:  (i) life expectancy based
on the mortality table described in section 417(e)(3)(A)(ii)(I) of the Code; and
(ii) the  "applicable  interest  rate".  For purposes of this Section 2.17,  the
"applicable  interest  rate"  shall  mean the  interest  rate  specified  by the
Internal Revenue Service under section  417(e)(3)(A)(ii)(II) of the Code for the
month of August preceding the Plan Year in which the Equivalent  Actuarial Value
in question is being determined.

     2.18 "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended from time to time.

     2.19 "Executive/Policy-Making  Member" means any Member who (a) for the two
year period  immediately  preceding his Normal Retirement Date has been employed
in a bona fide executive or high policy-making  position and (b) is entitled, as
of his Normal  Retirement Date, to immediate  nonforfeitable  annual  retirement
benefits  aggregating  at least  $44,000 (or such other dollar  amount as may be
prescribed by law) from the Plan, the U.S. Trust Corporation 401(k) Plan and any
other deferred  compensation plan of a Participating Company (other than amounts
attributable to his voluntary contributions).

     2.20  "Former  Member"  means a person  who at the time he  ceased  to be a
Member was entitled to a Pension under Article 5 or Article 6.

     2.21 "Hour of  Service",  with  respect to any  Computation  Period or Plan
Year, as the case may be, shall mean the following:

          (a) Each hour for which an Employee  is paid,  or entitled to payment,
     for the performance of duties for an Affiliated Company.

          (b) Each hour for which an Employee  is paid,  or entitled to payment,
     directly or indirectly (through an insurer,  trust fund or otherwise) by an
     Affiliated  Company  for a  period  of time  during  which  no  duties  are
     performed  (irrespective  of whether he has  ceased to be an  Employee)  on
     account of vacation, holiday, illness, incapacity,  disability,  layoff, or
     jury duty. It is provided,  however,  that except as otherwise  required by
     law, (1) no more than 501 hours shall be credited under this subsection (b)
     for any single continuous period, (2) no such hours shall be credited under
     this subsection (b) if such payment is made under a plan maintained  solely
     for the purpose of complying  with the  applicable  worker's  compensation,
     disability  insurance or  unemployment  compensation  laws, and (3) no such
     hours shall be credited  under this  subsection  (b) for any payment  which
     solely  reimburses  an Employee for medical or medically  related  expenses
     incurred by the Employee.

          (c) Each  hour for which  back  pay,  irrespective  of  mitigation  of
     damages,  is awarded or agreed to by an  Affiliated  Company,  exclusive of
     hours previously  credited under subsection (a) or (b),  immediately above.
     No more than 501 hours shall be credited under this  subsection (c) for any
     single continuous period.

          (d) The number of Hours of Service to be  credited  under  subsections
     (a), (b) and (c) above, and the periods to which Hours of Service are to be
     credited  under  subsections  (a), (b) and (c) above,  shall be  determined
     under  the  rules  set  forth  in  Section  2530.200b-2(b)  and  (c) of the
     regulations  issued by the U.S.  Department  of  Labor,  as the same may be
     amended from time to time.

          (e) In the case of any Employee who incurs any Leave  (whether paid or
     unpaid),  including a maternity or paternity  absence  described in section
     411(a)(6)(E)(i)  of  the  Code  and  any  Leave  which  is  subject  to the
     requirements  of the Family and  Medical  Leave Act of 1993,  the  Employee
     shall be credited,  for the period  during which he is on such Leave,  with
     the  number of Hours of  Service  with  which he would  normally  have been
     credited for such period under the Plan but for such Leave,  as  determined
     by the Plan  Administrator.  In the case of any Employee who has incurred a
     Total  Disability,  the Employee  shall be credited,  for the period during
     which he is Totally  Disabled,  with the  number of Hours of  Service  with
     which he would  normally  have been  credited  during such period under the
     Plan  but  for  his  absence  from  active  employment  due to  such  Total
     Disability,  as  determined  by the  Plan  Administrator.  It is  provided,
     however,  that the Employee shall not be credited with any Hours of Service
     under the preceding  sentence which are otherwise credited to such Employee
     under  subsection  (b)  above for the  period  during  which he is  Totally
     Disabled.

          (f) Notwithstanding the foregoing, for the purposes of determining the
     number of Hours of Service with which the Employee is to be credited in any
     Computation  Period or Plan  Year,  as  applicable,  an  Employee  shall be
     credited  with a number of Hours of Service  computed  (i) for  purposes of
     Section 3.1, by crediting  the Employee  with 190 Hours of Service for each
     month in which he would be required to be credited  with an Hour of Service
     under  subsections (a) through (e) above,  and (ii) for all other purposes,
     by dividing by seven the number of days in such Computation  Period or Plan
     Year, as  applicable,  for which the Employee  would  otherwise be credited
     with at least one Hour of Service under  subsections  (a) through (e) above
     and multiplying the result by 45.

     2.22 "Investment Committee" means the Retirement and 401(k)/ESOP Investment
Committee appointed under Section 11.3.

     2.23  "Joint  and  Survivor  Pension"  means a Pension  payable to a Former
Member during his lifetime,  with a survivorship Pension payable after the death
of such Former  Member to his spouse on his Pension  Starting  Date who survives
him for such spouse's life  (regardless  of such spouse's  remarriage  after his
death) in the amount of 50% of the Pension  paid to the Former  Member  prior to
his death.

     2.24 "Leave"  means any period  during which a person is an Employee but is
absent  from  active  employment  pursuant  to an  authorized  leave of absence,
approved  by an  Affiliated  Company on a  nondiscriminatory  basis  under rules
uniformly  applicable to all Employees similarly  situated,  for a period not to
exceed five years.

     2.25  "Member"  means any person  included  in the  membership  of the Plan
pursuant to Article 3.

     2.26 "Normal  Retirement Date" means, for any Member,  the first day of the
calendar month  coinciding  with or  immediately  following the later of (a) the
65th anniversary of his birth or (b) the fifth  anniversary of the date on which
he became a Member.

     2.27  "Participating  Company"  means the Company and any other  Affiliated
Company  participating  in this Plan  pursuant  to Article 14 until such time as
such  Affiliated  Company  ceases to participate in the Plan pursuant to Article
14.  Appendix B provides a list of  Participating  Companies as of the date this
amended and restated Plan is executed.

     2.28  "Pension"  and  "Normal  Retirement  Pension"  means a  level  annual
retirement  income payable under this Plan in monthly  installments  to a Former
Member,  or his spouse,  only during the  lifetime of the same,  with no minimum
number of monthly payments guaranteed.

     2.29  "Pension  Starting  Date" means the date as of which the payment of a
Member's Pension is to commence, as determined under Section 7.6.

     2.30 "Plan" means the U.S. Trust Corporation Employees' Retirement Plan, as
described herein and as may hereafter be amended.

     2.31 "Plan  Administrator"  means the person or  persons  appointed  by the
Committee to have the powers, and to carry out the duties and  responsibilities,
set forth in Section 11.10.

     2.32 "Plan Year" means the calendar year.

     2.33 "Prior Service" means service  credited to an Employee under this Plan
for service with an entity that was  acquired by or merged with the Company,  as
set forth in Appendix B.

     2.34  "Severance  Date" means the first date as of which the Employee is no
longer in the employ of any Affiliated Company. An Employee shall not be treated
as having  incurred a Severance Date as a result of his absence from work unless
such  absence  is due to  his  resignation,  discharge,  retirement,  or  death.
However,  an Employee  who is on a Leave  shall be treated as having  incurred a
Severance Date (and as having ceased to be an Employee) (a) as of the expiration
of such Leave,  unless prior to such expiration he resumes his active employment
with an  Affiliated  Company,  or (b) at such earlier  time as he  notifies,  in
writing, the Affiliated Company with which he was last in active employment that
he does not intend to resume his active  employment  at the  expiration  of such
Leave.

     2.35  "Social  Security  Retirement  Age" shall have the same meaning as is
assigned to such term under section 415(b)(8) of the Code.

     2.36 "Spouse's Preretirement  Survivorship Pension" means a Pension payable
after  the  death  of a  Member  to  the  Member's  surviving  spouse  for  life
(regardless of the spouse's  remarriage  after the Member's death) in the amount
hereinafter  determined,  based upon the Member's units of Credited  Service and
Final Average Compensation as of the date of his death.

          (a) Death After  Becoming  Entitled to Retire Under  Article 6. In the
     case of a Member who dies after  becoming  entitled to retire under Article
     6, other than Section 6.2(b) thereof, but before the payment of his Pension
     has commenced,  the Spouse's  Preretirement  Survivorship  Pension shall be
     based on the Pension which would have been payable to such surviving spouse
     if (1) on the day immediately  preceding the date of his death,  the Member
     had  retired  and the  payment of his  Pension  had  commenced  in the form
     described in Option 1 in Section 8.4, with a 100% survivor annuity, and (2)
     the Member's  Pension  referred to in clause (1) had been computed  without
     the reductions described in Section 7.2(a)(2), if otherwise applicable.

          (b) Death Prior to Becoming Entitled to Retire Under Article 6. In the
     case of a Member who dies before becoming  entitled to retire under Article
     6, other than Section 6.2(b) thereof, and before the payment of his Pension
     has  commenced,   but  after  his  Earliest   Payment  Date,  the  Spouse's
     Preretirement Survivorship Pension shall be based on the Joint and Survivor
     Pension  which  would  have been  payable  if the  Member  had  incurred  a
     Severance  Date and  payments  under  the Joint and  Survivor  Pension  had
     commenced  immediately  preceding  the date of his death.  In the case of a
     Member who dies before  becoming  entitled to retire under Article 6 and on
     or  before  his  Earliest   Payment   Date,   the  Spouse's   Preretirement
     Survivorship Pension shall be based on the Joint and Survivor Pension which
     would have been payable if the Member had incurred a Severance  Date on the
     earlier of the date of his death or his  actual  Severance  Date,  survived
     until his Earliest Payment Date,  begun receiving  payments under the Joint
     and  Survivor  Pension  on his  Earliest  Payment  Date,  and  died  on the
     following day. This  subsection (b) shall apply in the case of a Member who
     dies after  becoming  entitled to retire  under  Section  6.2(b) but before
     becoming entitled to retire under any other provision of Article 6.

     2.37  "Total  Disability"  means a  mental  or  physical  disability  which
entitles  a Member to  receive a benefit  under the  long-term  disability  plan
maintained by the Affiliated Companies.

     2.38  "Trustee"  means the United  States  Trust  Company  of New York,  as
trustee, and any additional or successor trustee or trustees,  who may from time
to time act as trustee of the Trust Fund pursuant to Article 12.

     2.39 "Trust Fund" means the  contributions  deposited  with and held by the
Trustee  pursuant  to Article 12, any  property  into which the same or any part
thereof may be converted, and any appreciation therein and interest thereon.

     2.40  "Year of  Service"  means  any  Computation  Period  during  which an
Employee is credited with 1,000 or more Hours of Service.

                                    ARTICLE 3
                                   MEMBERSHIP

     3.1 Commencement of Membership.  Each Employee who was a Member on December
31, 1986 shall  continue as a Member.  Each other Employee shall become a Member
on the  January  1 or July 1  immediately  following  the date on which he first
satisfies  each  of  the  following   conditions:   (a)  he  receives  a  stated
compensation from a Participating  Company other than a pension,  severance pay,
retainer  or fee  under  contract,  (b) he has  completed,  or is  scheduled  to
complete, at least one Year of Service, and (c) he has attained age 21.

     An  Employee  who  receives  credit  for  Prior  Service  for  purposes  of
eligibility to participate in the Plan shall become a Member on the first day of
the month coincident with or next following the later of (i) the date he becomes
an Employee or (ii) the date he meets the  conditions in (a), (b) and (c) above,
taking into account Prior Service.

     Notwithstanding the foregoing,  no individual who becomes an Employee after
December  31, 2001 shall become a Member  unless the Company  amends the Plan in
accordance  with Section 13.1 to provide for such  Employee's  membership in the
Plan on such  terms and  condition  as the  Company in its sole  discretion  may
establish.

     3.2 Termination of Membership.  An Employee's  membership in the Plan shall
terminate:

          (a) on the Employee's Severance Date;

          (b)  Subject  to  Section  5.1,  on the  date  an  Employee  transfers
     employment from a Participating Company directly to Charles Schwab.

     3.3  Resumption  of  Membership  after  Severance  Date.  If an  Employee's
membership  in the Plan is  terminated  in  accordance  with  Section  3.2(a) on
account of his incurring a Severance  Date, or Section  3.2(b) on account of his
transferring  employment  directly to Charles  Schwab,  and he again  becomes an
Employee of a Participating  Company, his membership in the Plan shall resume as
of the date on which he again becomes such an Employee.

                                    ARTICLE 4
                                CREDITED SERVICE

     4.1 Service  Credited as of December 31, 1975. Each person who was a Member
on or prior to December  31,  1975  shall,  for  purposes  of this  Article,  be
credited  with one unit (or fraction  thereof to the next higher  one-tenth)  of
Credited Service with respect to service  performed prior to January 1, 1976 for
each 12  month  period  of  employment  with a  Participating  Company  (or part
thereof)  with which each such Member was credited as of December 31, 1975 under
the terms of the Plan as in effect on that date.

     4.2  Service   Credited  after  December  31,  1975.  Each  Employee  of  a
Participating  Company who is a Member at any time during a Plan Year commencing
after  December  31,  1975  shall be  credited  with a unit or part  thereof  of
Credited  Service  for each such Plan Year,  computed  by  dividing by 2,000 the
number of Hours of Service  credited to him as an  Employee  of a  Participating
Company for only the days  falling in such Plan Year during which he is a Member
(not in excess of 2,000 Hours of Service), and increasing the resulting fraction
to the next higher one-tenth.

     It is provided, however, that each person who ceased to be a Member for any
reason at any time  prior to  January  1,  1988  shall  not be  entitled  to any
Credited  Service he had otherwise  earned for periods after he had attained his
Normal  Retirement  Date unless he was  thereafter  employed by a  Participating
Company  on or after  January  1, 1988 and has at least one Hour of Service in a
Plan Year  beginning  on or after  January  1,  1988,  in which case he shall be
credited with units of Credited  Service in accordance  with the above paragraph
of this Section 4.2 with respect to all periods  (including  periods  after such
Member's Normal Retirement Date).

     4.3 Effect of Breaks in Service on Credited  Service.  If a Member incurs a
Severance Date after  December 31, 1975 and thereby  ceases to be a Member,  and
subsequent  to such  Severance  Date he again  becomes  a  Member,  all units of
Credited Service with which the Member was credited prior to such Severance Date
shall be taken into account  under the Plan.  It is provided,  however,  that if
upon his again  becoming  an  Employee  after such  Severance  Date the Years of
Service he performed prior to such Severance Date are not taken into account for
purposes  of Section  5.1 by reason of Section  5.3 (as in effect on the date he
again became an Employee),  the units of Credited  Service earned by such Member
prior to such Severance Date shall not be taken into account under the Plan.

     4.4  Veterans'  Rights.  Notwithstanding  any provision of this Plan to the
contrary, benefits and service credit with respect to qualified military service
will be provided in accordance with Code section 414(u).

                                   ARTICLE 5
                                    VESTING

     5.1 Eligibility for Vested Deferred  Pension.  A Member who ceases to be an
Employee for any reason other than his death and is not entitled to retire under
Article 6 shall be  entitled  to  receive  a vested  deferred  Pension  if he is
credited with five or more Years of Service for Computation Periods during which
he was at least age 18.

     For purposes of this  Section 5.1,  Years of Service  shall  include  Prior
Service.  With respect to an Employee of Charles Schwab who transfers employment
directly to a Participating Company, Years of Service shall include service with
Charles Schwab.

     5.2 Amount and  Payment of Vested  Deferred  Pension.  The vested  deferred
Pension  payable  under  Section  5.1 shall be a deferred  Pension  equal to the
Pension a Member would have been entitled to receive had he remained a Member in
the Plan at all times through his Normal Retirement Date, computed in accordance
with  Section 7.1 (based on his  Average  Final  Compensation  as of the date on
which he ceased to be an Employee and the number of units of Credited Service he
would have  earned to his  Normal  Retirement  Date,  not in excess of 35 units,
including all units of Credited  Service he had earned as of his Severance  Date
and  determined  by assuming  that the Member had remained both an Employee of a
Participating Company and a Member in the Plan during the period which begins on
the Member's Severance Date and ends on his Normal Retirement Date),  multiplied
by a  fraction  (x) the  numerator  of which is the  number of Years of  Service
credited to the Member as of his Severance Date and (y) the denominator of which
is the number of Years of Service that would have been credited to the Member to
his Normal  Retirement  Date (including all Years of Service he had earned as of
his Severance  Date, and determined by assuming that he had remained an Employee
of an Affiliated  Company for the period which begins on his Severance  Date and
ends on his Normal Retirement Date).

     Notwithstanding the foregoing,  Prior Service credited to a Member pursuant
to Section 5.1 and Appendix B, including service with Charles Schwab,  shall not
be taken into account for purposes of determining  the amount of vested deferred
Pension under this Section 5.2.

          (a)  Vested  Members  with  less  than 20 Years of  Service.  A Member
     eligible for a vested deferred  Pension under Section 5.1 who has completed
     less than 20 Years of  Service  as of the date he ceased to be an  Employee
     shall be entitled to receive a vested deferred  Pension,  commencing on the
     first day of the month immediately following his Normal Retirement Date, in
     the amount prescribed in this Section 5.2.

          (b) Vested  Members with 20 or more but less than 25 Years of Service.
     A Member eligible for a vested  deferred  Pension under Section 5.1 who has
     completed  20 or more but less than 25 Years of  Service  as of the date he
     ceased to be an Employee  shall be  entitled  to receive a vested  deferred
     Pension,  commencing  on the  first  day of the  month  coinciding  with or
     immediately  following  the date on which he attains  age 60 (or such later
     date, but not later than the first day of the month  immediately  following
     the  Member's  Normal  Retirement  Date,  as he may  elect)  in the  amount
     prescribed  in this Section 5.2,  but  actuarially  reduced to an amount of
     Equivalent  Actuarial  Value to the  payments  he would  have  received  if
     payment of his vested deferred Pension had started on his Normal Retirement
     Date.

          (c) Vested Members with 25 or more Years of Service. A Member eligible
     for a vested  deferred  Pension  under  Section 5.1 of this Article who has
     completed  25 or more  Years of  Service  as of the date he ceased to be an
     Employee shall be entitled to receive a vested deferred Pension, commencing
     on the first day of the month coinciding with or immediately  following the
     date on which he attains age 55 (or such later date, but not later than the
     first day of the month immediately following the Member's Normal Retirement
     Date, as he may elect),  in the amount  prescribed in this Section 5.2, but
     actuarially  reduced  to an amount  of  Equivalent  Actuarial  Value to the
     payments he would have received if payment of his vested  deferred  Pension
     had started on his Normal Retirement Date.

The Plan  Administrator  shall  advise the Member in writing as to the  earliest
date on which payment of his deferred vested Pension may commence.

     5.3 Effect of Breaks in Service  after  December 31,  1975.  In computing a
Member's Years of Service for purposes of Sections 5.1 and 5.2, in the case of a
Member who incurs a Severance Date after December 31, 1975, the Years of Service
he completed  prior to such  Severance  Date shall,  upon his again  becoming an
Employee, be taken into account under such Sections, except as follows:

          (a) If the Member has resumed  employment  with an Affiliated  Company
     after incurring a Break in Service following such Severance Date, the Years
     of Service he completed  before such  Severance  Date shall not be so taken
     into account  until he has  completed one Year of Service after so resuming
     employment.

          (b) If the  Member  was not  entitled  to a  vested  deferred  Pension
     pursuant  to Section  5.1 as of such  Severance  Date,  and he has  resumed
     employment  with  an  Affiliated   Company  after  incurring  a  number  of
     consecutive Breaks in Service following such Severance Date which equals or
     exceeds  the  greater  of five  years or the  aggregate  number of Years of
     Service he completed  before such  Severance  Date, the Years of Service he
     had  completed  before  such  Severance  Date  shall  not be so taken  into
     account. The number of Years of Service before any Severance Date shall not
     include  any  Years of  Service  which  are not taken  into  account  under
     Sections  5.1 and 5.2  because of the  application  of this  provision  (or
     because of the  application  of this provision as in effect on December 31,
     1984) with respect to an earlier Severance Date.

     5.4 Restoration to Service of Vested Member. If a Member who is entitled to
a vested deferred  Pension  pursuant to Section 5.1 is restored to service as an
Employee,  his right to such vested deferred  Pension shall be cancelled and his
subsequent retirement and any Pension payable thereupon shall be governed by the
provisions of this Plan then  applicable to him, taking into  consideration  his
Credited  Service and, where  appropriate,  his  Compensation,  prior as well as
subsequent  to the date he ceased to be an Employee,  but such Pension  shall be
actuarially  reduced by the Equivalent  Actuarial Value of the Pension  payments
(if any)  previously  made to the Member under this Article.  The application of
this Section 5.4 shall not result in a suspension of benefits within the meaning
of section 411(a)(3)(B) of the Code or section 203(a)(3)(B) of ERISA, unless the
requirements of the Code and ERISA which pertain to suspensions of benefits have
been satisfied.

     5.5 Separation of Members Without Vested Rights. No Pension or other amount
shall be paid  under  this Plan in respect of a person who ceases to be a Member
before becoming eligible to receive a deferred vested Pension under this Article
5, or before he is eligible  to retire  under  Article 6. Such  person  shall be
treated as if the entire  amount of the  benefit  under the Plan in which he was
vested has been distributed to him, in a lump sum payment of zero amount,  as of
his  Severance  Date.  Thereafter,  notwithstanding  Section  4.3,  the Credited
Service  that such  person  had  earned  prior to his  Severance  Date  shall be
disregarded  for  all  purposes  under  the  Plan.   However,   if  such  person
subsequently returns to employment with any Participating  Company,  such person
shall be treated as if he has  repaid  the entire  such lump sum  payment to the
Plan,  as of the date on which he so returns  to  employment,  and his  Credited
Service  earned prior to such  Severance  Date shall be taken into account under
the Plan, except as otherwise provided in Section 4.3.

     5.6 Death of Vested  Member.  Subject to Section  8.7,  in the event of the
death of a person entitled to a vested deferred  Pension pursuant to Section 5.1
either  (a) prior to the date such  Pension  was to  commence,  as  provided  in
Section 5.2 or (b) after such Pension was to commence and the Former  Member was
to receive such Pension in the form of a straight  life  annuity,  no Pension or
other amount shall be payable on the Former  Member's  behalf under this Article
or any other provision of this Plan.

                                    ARTICLE 6
                                    RETIREMENT

     6.1 Normal Retirement.  Each Member, other than an  Executive/Policy-Making
Member,  may retire on his Normal Retirement Date unless he has retired prior to
such date  pursuant to Section 6.2 or 6.4. Each  Executive/Policy-Making  Member
shall retire on his Normal  Retirement  Date unless he has retired prior to such
date  pursuant  to  Section  6.2 or 6.4 or unless he  continues  as an  Employee
thereafter pursuant to Section 6.3.

     6.2 Early Retirement.

          (a) Rule of 80. A Member whose  combined (a) attained age (in complete
     years from the anniversary of the Member's birth),  and (b) either Years of
     Service (as  computed  for  purposes  of Section  5.1) or units of Credited
     Service (as computed  under  Article 4), totals 80 or more shall be retired
     on the first day of the calendar month immediately following receipt by the
     Plan  Administrator  of  written  application  for his  retirement  by such
     Member.

          (b) Age 60. Effective  January 1, 1999, a Member who is an Employee of
     an  Affiliated  Company on the date he has  attained age 60 and is credited
     with at least ten (10) Years of  Service  shall be retired on the first day
     of  the  calendar  month   immediately   following   receipt  by  the  Plan
     Administrator of written application for his retirement by such Member.

          (c) Commencement.  The Pension of a Member who retires under either of
     the preceding  paragraphs ("early  retirement") shall commence on the first
     day of the month immediately following the date on which he had retired, or
     such later date, but not later than the first day of the month  immediately
     following the Member's Normal  Retirement  Date, as he may elect.  The Plan
     Administrator shall advise the Member in writing as to the earliest date on
     which payment of his early retirement Pension may commence.

     6.3    Postponed     Retirement.     Each    Member,    other    than    an
Executive/Policy-Making  Member,  who continues as an Employee  after his Normal
Retirement Date may retire on the first day of any calendar month  thereafter on
which the Member elects to retire.  An  Executive/Policy-Making  Member may upon
the request of the  Participating  Company by which he is employed  and with the
consent of such Executive/Policy-Making Member be continued as an Employee after
his Normal  Retirement  Date,  in each case for a period of one year,  and, upon
further requests and consents,  for successive one year periods  thereafter.  An
Executive/Policy- Making Member whose retirement is postponed under this Section
6.3 shall be retired at the end of the last of such one year periods,  or at any
earlier  date not less than  thirty  nor more than  ninety  days after a written
request for his retirement has been filed with the Plan  Administrator by either
the  Executive/Policy-Making  Member or the Participating Company by which he is
employed.

     6.4 Disability Retirement.  Any Member who has incurred a Total Disability,
and who otherwise meets the  requirements  for retirement under Section 6.1, 6.2
or 6.3,  may retire  under the  applicable  such Section on the first day of any
calendar  month after he has satisfied such  requirements  on which he elects to
retire.

     6.5  Nonforfeitability of Pensions. A Member who becomes entitled to retire
under this Article 6 shall have a  nonforfeitable  right to a Pension  under the
Plan.  A Member who retires  under this Article 6 shall be entitled to receive a
Pension, computed as under Article 7.

     6.6  Restoration  to  Employment.  Upon the  request  of any  Participating
Company and with the consent of the Member,  a Member retired pursuant to any of
the  preceding  Sections  of this  Article 6 may be  restored  to  service as an
Employee. In this event his subsequent retirement shall be governed by whichever
of such Sections, if any, is then applicable.

                                    ARTICLE 7
                               RETIREMENT PENSIONS

     7.1 Normal Retirement Pension. Each Member retiring after December 31, 1988
pursuant to the  provisions  of Section 6.1 shall receive a Pension equal to the
sum of

          (a) two and one-quarter percent (2 1/4%) of the Member's Average Final
     Compensation,  multiplied  by the number of the Member's  units of Credited
     Service not in excess of 20 units, plus

          (b) one percent  (1%) of such  Member's  Average  Final  Compensation,
     multiplied  by the  number of the  Member's  units of  Credited  Service in
     excess of 20 units but not in excess of 35 units, reduced by

          (c)  one-half  of one  percent  (.5%) of the  lesser of (1) a Member's
     Average Final Compensation and (2) 100% of a Member's Covered Compensation,
     multiplied by the number of units of Credited  Service earned by the Member
     for up to the first 35 units of  Credited  Service so earned less any units
     of Credited Service earned prior to January 1, 1976, and further multiplied
     by the factor indicated below for such Member's year of birth:

                        Year of Birth             Adjustment

                        1937 and earlier            1.00
                        1938 through 1954            .95
                        1955 and later   .           .90

provided,  however,  that the Normal Retirement Pension of any Member calculated
in  accordance  with the  foregoing  provisions of this Section 7.1 shall not be
less than the Normal  Retirement  Pension of such Member accrued pursuant to the
terms of Article  VII,  Paragraph A of the Plan as in effect as of December  31,
1988.

     7.2 Early Retirement Pension.

          (a) Rule of 80. Each Member  retiring after December 31, 1975 pursuant
     to the provisions of Section 6.2(a) shall receive a Pension equal,

               (1)  if the  Member  has  attained  age  60 at  the  time  of his
          retirement,  or if he retired  prior to attaining  age 60 but does not
          elect to have the  payment of his early  retirement  Pension  commence
          prior to his 60th birthday,  to an amount  computed in accordance with
          Section 7.1 on the basis of the Member's  Average  Final  Compensation
          and units of Credited Service at the time of his early retirement, or

               (2) if the  Member  has not  attained  age 60 at the  time of his
          retirement  and  elects to have the  payment  of his early  retirement
          Pension commence prior to his 60th birthday, to an amount equal to the
          Pension which he would have been entitled to receive under  subsection
          (a) above if he had attained age 60 at the time of his retirement, but
          computed by reducing the amounts  described in subsections (a) and (b)
          of Section 7.1 by  one-twelfth  (1/12) of five  percent  (5%) for each
          month or part thereof that the  commencement of such early  retirement
          Pension  precedes  the  Member's  60th  birthday,  and by reducing the
          amount  described  in  subsection  (c) of Section  7.1 by  one-twelfth
          (1/12) of six  percent  (6%) for each month or part  thereof  that the
          commencement of such early  retirement  Pension  precedes the Member's
          60th birthday.

          (b) Age 60. Each Member retiring pursuant to the provisions of Section
     6.2(b) shall receive a Pension to which the Member would be entitled  under
     Section 5.2, but actuarially  reduced to an amount of Equivalent  Actuarial
     Value to the  payments  he would  have  received  if  payment of his vested
     deferred Pension had started on his Normal Retirement Date.

     7.3 Postponed  Retirement  Pension. A Member who is an Employee on or after
January 1, 1988, and whose retirement has been postponed pursuant to Section 6.3
for a period  subsequent to his Normal Retirement Date, shall receive no Pension
during such  period of  postponement.  Upon his  retirement,  such Member  shall
receive a Pension  computed in  accordance  with Section 7.1 on the basis of the
Member's Average Final Compensation and units of Credited Service at the time of
his  postponed  retirement.  Notwithstanding  the above,  unless the  applicable
requirements relating to a suspension of benefits under sections 411(a)(3)(B) of
the Code and  203(a)(3)(B)  of ERISA  have been  satisfied  with  respect to the
Member,  including  any  requirement  that  notification  of such  suspension be
provided to the Member,  the Pension payable under this Section 7.3 shall not be
less than the  Equivalent  Actuarial  Value of the Pension that the Member would
have received if (a) the Member had retired on his Normal  Retirement  Date, (b)
the  payment  of such  Pension  had  commenced  on the  first  day of the  month
immediately  following his Normal  Retirement  Date,  and (c) the amount of such
Pension had been based on his Average Final  Compensation  and the number of his
units of  Credited  Service  as of his  Normal  Retirement  Date.  The amount of
Pension  payable under this Section shall be determined in accordance  with Code
Section 411(b)(1)(H) and regulations promulgated thereunder.

     7.4 Disability  Retirement Pension. Each Member retiring after December 31,
1975 pursuant to the provisions of Section 6.4 shall receive a Pension, computed
in accordance  with Section 7.1, 7.2 or 7.3, as applicable,  on the basis of his
Average  Final  Compensation  and units of  Credited  Service at the time of his
retirement.

     7.5  Restoration of Retired  Members to  Employment.  If any retired Member
again  becomes an Employee,  his Pension (if any was being paid) shall cease and
any  prior  election  under  Article  8 as to the  form  of  Pension  in  effect
thereunder shall become void. Any Credited Service to which he was entitled when
he retired  shall be  restored to him,  and his  subsequent  retirement  and any
Pension payable  thereupon shall be governed by the provisions of this Plan then
applicable to him,  taking into  consideration  his Credited  Service and, where
appropriate,  his  Compensation,  prior as well as subsequent to his retirement,
but such Pension shall be actuarially reduced by the Equivalent  Actuarial Value
of the Pension payments (if any) previously made to the Member.  The application
of this  Section 7.5 shall not result in a  suspension  of  benefits  within the
meaning of section  411(a)(3)(B)  of the Code or section  203(a)(3)(B) of ERISA,
unless the  requirements  of the Code and ERISA which  pertain to  suspension of
benefits have been satisfied.

     7.6 Payment of  Pensions.  All  Pensions  payable  pursuant to Article 5 or
Article  6  shall,  upon  direction  by the Plan  Administrator,  be paid by the
Trustee. All Pensions payable under the Plan shall, except as otherwise provided
under the Plan, be payable in level monthly installments, as of the first day of
each month.  The payment of a Pension shall commence (a) in the case of a Member
who is  entitled  to a  deferred  vested  Pension  under  Article 5, on the date
provided in subsection  (a), (b) or (c), as  applicable,  of Section 5.2, (b) in
the case of a Member who takes early  retirement  under Section 6.2 (including a
Member  with a Total  Disability  who  takes an early  retirement),  on the date
provided in Section 6.2 or (c) in all other cases, on the first day of the month
immediately following the date on which the Member retires. Payment of a Pension
shall cease with the monthly payment immediately following the Member's death.

     If the  Equivalent  Actuarial  Value of any Pension  payable to a Member as
computed  under  Article 5 or this Article 7 does not exceed $5,000 ($3500 prior
to  January  1,  1998)  as  of  the  Member's  Severance  Date,  then  the  Plan
Administrator  shall  direct that an amount equal to such  Equivalent  Actuarial
Value be paid by the Trustee to such  Member in a single lump sum cash  payment.
Such  payment  shall  be  made as soon as  practicable  following  the  Member's
Severance Date.

     Unless a Member elects otherwise, notwithstanding the above, the payment of
the Member's Pension shall commence not later than by the 60th day after the end
of the Plan  Year  during  which  occurs  the  latest of (a) the  Member's  65th
birthday,  (b) the 10th  anniversary  of the  year in  which  he first  became a
Member,  or (c) the  Member's  termination  of  employment  with all  Affiliated
Companies.

     Before any Pension shall be paid to a Member or to the surviving  spouse of
a deceased Member,  such Member, or his surviving  spouse, as applicable,  shall
file with the Plan  Administrator  such  information  as the Plan  Administrator
shall require to establish his or her rights to benefits under the Plan.

     7.7 Maximum  Pension  Limitations.  Notwithstanding  any other provision of
this Plan to the contrary, no Pension shall be payable under this Plan in excess
of the limitations prescribed in this Section 7.7.

          (a) Basic Limitation.  No Pension shall be paid to or on behalf of any
     Member which would,  as of the last day of the Plan Year,  annually  exceed
     the lesser of:

               (1) 100% of the Member's  average total  compensation (as defined
          in Treas. Reg. Sec. 1.415-2(d)(1), (2), (3) and (4)) but including any
          elective deferrals (as defined in Code Section 402(g)(3)),  any amount
          which is  contributed  or deferred by a  Participating  Company at the
          election  of the  Employee  and which is not  includable  in the gross
          income of the  Employee  by reason of Code  Section  125 or 457, or in
          accordance with the Employee's  election  relating to amounts that are
          not  includible  in the gross income of the Employee by reason of Code
          Section 132(f)(4) from the Participating Company or Companies by which
          he was  employed  for the three  consecutive  Plan Years for which the
          Member's  total  compensation  (as so defined)  was the  highest  (the
          "Compensation  Limitation")  and  during  which he was a Member in the
          Plan, or

               (2) $90,000 (the "Dollar Limitation").

     If the  Member has fewer  than 10 years of Plan  participation,  the Dollar
Limitation  shall be  multiplied  by a fraction,  the  numerator of which is the
number of years (computed to fractional parts of a year) of participation in the
Plan, and the  denominator of which is 10. If the Member has fewer than 10 Years
of Service, the Compensation  Limitation shall be multiplied by a fraction,  the
numerator of which is the number of the Member's  Years of Service  (computed to
fractional parts of a year), and the denominator of which is 10.

     The Dollar Limitation shall be adjusted annually,  for Plan Years beginning
after  December 31, 1987,  for  increases in the cost of living after October 1,
1986 in accordance with the Code and applicable  regulations or rulings, and, in
the case of Members who have ceased to be employed by a  Participating  Company,
the Compensation Limitation shall be adjusted annually for increases in the cost
of living in accordance with the Code and applicable regulations and rulings. No
such adjustment  shall be taken into account  hereunder before the Plan Year for
which such  adjustment  first  takes  effect  pursuant  to such  regulations  or
rulings.

          (b) Combined Plan  Limitation.  Notwithstanding  subsection (a) above,
     for any Plan Year commencing  prior to January 1, 2000, if a Member in this
     Plan is also a member in the U.S. Trust  Corporation  401(k) Plan (formerly
     known as the 401(k)  Plan and ESOP of United  States  Trust  Company of New
     York and Affiliated  Companies) (as in effect for the Plan Year in question
     or for any prior  Plan Year) (the  "Profit-Sharing  Plan"),  the sum of the
     Member's  Retirement  Plan  Fraction  (as defined  below) and the  Member's
     Profit-Sharing  Plan  Fraction (as defined  below) shall not exceed 1.0 for
     any  Plan  Year,  and in the  event  that in any  Plan  Year the sum of the
     Member's  Retirement  Plan  Fraction and the Member's  Profit-Sharing  Plan
     Fraction  exceeds 1.0,  then the Pension  payable  under this Plan shall be
     reduced so that the sum of such  fractions  in respect of that  Member will
     not exceed 1.0 for such Plan Year.

               (1) Retirement  Plan Fraction.  For purposes of this  subsection,
          "Retirement  Plan  Fraction"  for any Plan Year shall mean a fraction,
          (i) the numerator of which is the projected  annual Pension the Member
          is expected to receive under the Plan  determined as of the end of the
          Plan Year and in accordance with  applicable  regulations and (ii) the
          denominator  of  which  is the  lesser  of:  (A) the  product  of 1.25
          multiplied by the Dollar  Limitation in effect under subsection (a)(2)
          of this  Section  7.7 for the Plan  Year,  or (B) the  product  of 1.4
          multiplied  by the  amount  which  may be  taken  into  account  under
          subsection (a)(1) of this Section 7.7 for the Plan Year.

               (2)   Profit-Sharing   Plan   Fraction.   For  purposes  of  this
          subsection,  "Profit-Sharing  Plan  Fraction"  for any Plan Year shall
          mean a fraction,  (i) the  numerator of which is the sum of the annual
          additions  (as  defined in section  415(c)(2)  of the Code;  provided,
          however,  that the annual additions for any Plan Year beginning before
          January 1, 1987  shall not be  recomputed  to treat all  contributions
          made on an after-tax basis by the Member as annual additions) credited
          to the  account of the Member  under the  Profit-Sharing  Plan for the
          Plan Year and for all prior  Plan  Years and (ii) the  denominator  of
          which is the sum of the lesser of the  following  amounts,  determined
          for the Plan Year and for each  prior  Plan  Year  during  which  such
          Member was an Employee  (regardless of whether the Member was a member
          in the  Profit-Sharing  Plan during any such prior Plan Year): (A) the
          product of 1.25  multiplied  by the dollar  limitation in effect under
          section  415(c)(1)(A)  of the  Code  for such  Plan  Year  (determined
          without regard to section  415(c)(6) of the Code),  or (B) the product
          of 1.4  multiplied by the amount which may be taken into account under
          section  415(c)(1)(B)  of the Code with  respect to the Member for the
          Plan Year;  provided,  however,  that for Plan Years  ending  prior to
          January 1, 1976 the  numerator of such  fraction  shall in no event be
          deemed  to exceed  the  denominator  of such  fraction,  and  provided
          further that,  for any Plan Year ending after  December 31, 1982,  the
          Plan  Administrator  may  elect to  compute  the  Profit-Sharing  Plan
          Fraction for each Member by applying the  transitional  rule set forth
          in section 415(e)(6) of the Code.

The Retirement Plan Fraction and Profit-Sharing  Plan Fraction shall be computed
with regard to the limitation described in section 415(b)(5) of the Code.

          (c) Special  Rules.  For purposes of this Section 7.7, in  determining
     whether an  expected  Pension is within the  aforesaid  limitations,  (1) a
     Pension  which is paid in a form other than a  straight  life  annuity or a
     qualified joint and survivor  annuity (within the meaning of section 417 of
     the Code) shall be adjusted to a benefit which is of  Equivalent  Actuarial
     Value to such Pension,  and which is payable in the form of a straight life
     annuity  (with  no  ancillary  benefits),  (2) in  the  case  of a  Pension
     beginning prior to a Member's  Social  Security  Retirement Age, the Dollar
     Limitation  applicable to such Pension shall be reduced in accordance  with
     applicable  regulations  to an amount  which is equal to an annual  benefit
     which  commences  at the  same  time  as  such  Pension,  and  which  is of
     Equivalent Actuarial Value to an annual benefit in the amount of the Dollar
     Limitation that commences at the Member's  Social Security  Retirement Age.
     The adjustment provided for in the preceding sentence shall be made in such
     manner as the applicable regulations may prescribe which is consistent with
     the reduction for old age insurance  benefits  commencing before the Social
     Security  Retirement Age under the Social  Security Act and (3) in the case
     of a Pension  beginning after the Member's Social Security  Retirement Age,
     the Dollar  Limitation  applicable  to such  Pension  shall be increased in
     accordance  with the applicable  regulations to an amount which is equal to
     an annual  benefit which  commences at the same time as such  Pension,  and
     which is of Equivalent  Actuarial  Value to an annual benefit in the amount
     of the Dollar Limitation that commences at Social Security Retirement Age.

          (d) Special  Transitional Rule for Certain Members. The limitations on
     the amount of any Member's Pension  prescribed in this Section 7.7 shall be
     computed by applying the transitional rules set forth in section 1106(i)(3)
     and (4) of P.L. 99-514 and in section 235(g)(3) and (4) of P.L. 97-248.

     In the case of a person who was a Member in this Plan prior to September 2,
1974 and was also a Member in the Profit-Sharing Plan as of such prior date, the
sum of such  Member's  Retirement  Plan  Fraction  and his  Profit-Sharing  Plan
Fraction may exceed 1.4 (as described in subparagraph  (2) of Paragraph G of the
Plan, as in effect on December 31, 1982),  if (1) the Member's  Retirement  Plan
Fraction is not increased,  by amendment or otherwise,  after  September 2, 1974
and (2) no Profit-Sharing  Amounts (as defined in the  Profit-Sharing  Plan) are
contributed to or for the benefit of such Member under the  Profit-Sharing  Plan
after September 2, 1974.

     7.8 Post-Retirement Increase of Benefits of Members Retiring before January
1, 1976.  Effective  April 1, 1977,  the  monthly  installments  of the  benefit
payable to each retired Member  (including a disabled retiree) who retired on or
before January 1, 1976, or to the spouse or  beneficiary of such Member,  as the
case may be, shall be  increased,  as of the April 1 of each year,  by an amount
equal to two  percent  (2%) of the  amount  of the  monthly  installment  of the
benefit which preceded the first monthly installment of the benefit to which the
increase applies.

     7.9 Supplemental Benefit for Certain Retired Members.

          (a) Retired Members  (including  disabled  retirees) who retired on or
     before January 1, 1979, or the spouses or beneficiaries receiving a benefit
     under the Plan on account of such  retired  Members,  shall be  entitled to
     receive,  for each monthly installment of the benefit payable to them under
     the Plan on or after November 1, 1980, an additional  monthly  supplemental
     benefit in an amount equal to (1) such monthly  installment of the benefit,
     including any post-retirement increase described in Section 7.8, multiplied
     by (2) the  applicable  percentage  set  forth  in the  following  table in
     accordance with the Member's last year of employment with the Company or an
     Affiliated Company prior to his retirement:

                  Year of employment
                  preceding the year
                  in which he retired                Applicable Percentage

                  1970 and earlier                              11%
                  1971                                          10%
                  1972                                           9%
                  1973                                           8%
                  1974                                           7%
                  1975                                           6%
                  1976                                           8%
                  1977                                           6%
                  1978                                           4%

          (b) Retired Members  (including  disabled  retirees) who retired on or
     before January 1, 1984, or the spouses or beneficiaries receiving a benefit
     under the Plan on account of such  retired  Members,  shall be  entitled to
     receive,  for each monthly installment of the benefit payable to them under
     the Plan on or after January 1, 1986, an  additional  monthly  supplemental
     benefit in an amount equal to (1) such monthly  installment of the benefit,
     including  any  post-retirement  increases  described  in  Section  7.8 and
     subsection  (a) of this  Section  7.9,  multiplied  by (2)  the  applicable
     percentage set forth in the following table in accordance with the Member's
     last year of employment with the Company or an Affiliated  Company prior to
     his retirement:

                  Year of employment
                  preceding the year
                  in which he retired                Applicable Percentage

                  1979 and earlier                               5%
                  1980                                           4%
                  1981                                           3%
                  1982                                           2%
                  1983                                           2%

          (c) Retired Members  (including  disabled  retirees) who retired on or
     before January 1, 1990, or the spouses or beneficiaries receiving a benefit
     under the Plan on account of such  retired  Members,  shall be  entitled to
     receive,  for each monthly installment of the benefit payable to them under
     the Plan on or after January 1, 1990, an  additional  monthly  supplemental
     benefit in an amount equal to (1) such monthly  installment of the benefit,
     including  any  post-retirement  increases  described  in  Section  7.8 and
     subsections  (a)  and  (b) of  this  Section  7.9,  multiplied  by (2)  the
     applicable  percentage set forth in the following  table in accordance with
     the  Member's  last year of  employment  with the Company or an  Affiliated
     Company prior to his retirement.

                  Year of employment
                  preceding the year
                  in which he retired                Applicable Percentage

                  1983 and earlier                               8.84%
                  1984                                          10.69%
                  1985                                           8.84%
                  1986                                           8.27%
                  1987                                           6.22%
                  1988                                           4.31%
                  1989                                           2.34%

          (d) Retired Members  (including  disabled retirees) who retired before
     January 1, 1995, or the spouses or beneficiaries  receiving a benefit under
     the Plan on account of such retired Members,  shall be entitled to receive,
     for each monthly  installment of the benefit payable to them under the Plan
     on or after January 1, 1997, an additional monthly  supplemental benefit in
     an amount equal to (1) such monthly  installment of the benefit,  including
     any post-retirement increases described in Section 7.8 and subsections (a),
     (b)  and  (c)  of  this  Section  7.9,  multiplied  by (2)  the  applicable
     percentage set forth in the following table in accordance with the Member's
     last year of employment with the Company or an Affiliated  Company prior to
     his/her retirement.

                  Year of employment
                  preceding the year
                  in which s/he retired              Applicable Percentage

                  Before 1990                                    7.3%
                           1990                                  7.3%
                           1991                                  5.9%
                           1992                                  4.6%
                           1993                                  3.4%
                           1994                                  2.2%
                  After    1994                                    0%

          (e) The minimum monthly  supplemental benefit payable under subsection
     (a), (b), (c) or (d) of this Section 7.9 shall be $10.00.

          (f) A surviving spouse receiving a Spouse's Survivorship Pension under
     Paragraph F of Article VIII of the Plan (as in effect on December 31, 1984)
     shall  receive the  supplemental  pension  provided for in this Section 7.9
     computed as though the year in which the  member's  death  occurred was the
     year in which retirement occurred.

     7.10 Benefit Enhancement for Certain Employees.

          (a)  The  following  definitions  shall  apply  for  purposes  of this
     Section:

               (1) "Age and Service"  shall mean,  for any Member,  the total of
          (i) his  number of Years of  Service,  or, if  greater,  his number of
          units of Credited Service and (ii) his attained age.

               (2) "Eligible  Member" shall mean a Member who is employed in the
          Tax Compliance Department of the Company.

               (3) "Enhanced  Pension  Benefit" shall mean,  for any Member,  an
          increase  in the  Pension  payable  under the Plan to the Member by an
          amount  equal to the  excess of (i) the  amount  by which his  Pension
          would be increased if five years or units,  as applicable,  were added
          to each of his age,  his number of Years of Service  and his number of
          units of Credited  Service,  over (ii) the amount by which his Pension
          would be increased if he were  entitled to have his Pension  increased
          by an amount  which is of  Equivalent  Actuarial  Value to a  lump-sum
          payment  equal to three and  two-tenths  percent  (3.2%) of his annual
          base salary for each year of service with an Affiliated  Company.  The
          Enhanced  Pension  Benefit,  the  "Equivalent  Actuarial  Value,"  and
          "lump-sum payment" in clause (ii) of the preceding sentence,  shall be
          determined  as if payment of the Member's  Pension were to commence as
          of, and shall be based upon the Member's  Average Final  Compensation,
          Years of Service and units of  Credited  Service as of the date of the
          Member's Involuntary Termination.  The Enhanced Pension Benefit, as so
          determined,  shall not be reduced to reflect the early commencement of
          payment of the Eligible Member's Pension under Section 7.10(c).

               (4) "Involuntary  Termination"  shall mean the termination of the
          Eligible  Member's  employment by an Affiliated  Company in connection
          with the elimination of the Tax Compliance Department.

          (b) The Pension  payable to any Eligible  Member shall be increased by
     the  Enhanced  Pension  Benefit  if  (i)  the  Eligible  Member  incurs  an
     Involuntary  Termination  during the period which begins on January 1, 2000
     and ends on June 30, 2000, (ii) his Age and Service equals or exceeds 70 on
     the date of his  Involuntary  Termination,  and (iii) he is employed in the
     Tax Compliance  Department on a full-time  basis  immediately  prior to his
     Involuntary Termination.

          (c) The  Eligible  Member may elect to begin  payment  of the  Pension
     otherwise payable under the Plan and the Enhanced Pension Benefit as of the
     first day of any  month  that  coincides  with or  follows  the date of his
     Involuntary  Termination.  Based on actual Age and Service, if the Eligible
     Member qualifies for "early  retirement"  under Section 7.2(a),  his or her
     Pension  shall be  calculated in  accordance  with Section  7.2(a).  If the
     Eligible  Member  does not  qualify for "early  retirement"  under  Section
     7.2(a) of the Plan,  the  Pension  payable to the  Eligible  Member will be
     calculated  pursuant to Section  5.2,  actuarially  reduced to an amount of
     Equivalent  Actuarial Value based on the Eligible Member's actual age as of
     the Pension Starting Date.

                                    ARTICLE 8
                          SURVIVORSHIP AND OPTIONAL PENSIONS

     8.1 Form of Payment of Pensions. Every Pension payable under Article 5 or 6
to a Member who is not married on his Pension  Starting  Date shall,  unless the
Member  elects  otherwise in accordance  with the  provisions of Section 8.2, be
payable in the form of a straight-life annuity payable to the Member only during
his  lifetime.  Every  Pension  payable  under Article 5 or 6 to a Member who is
married on his Pension  Starting Date shall,  unless the Member elects otherwise
in  accordance  with the  provisions of Section 8.2, be payable in the form of a
Joint and Survivor  Pension which shall be of Equivalent  Actuarial Value to the
Pension otherwise payable to the Member computed under the applicable  provision
of Article 5 or Article 7.

     8.2 Election of Form of Payment of Pension.

          (a) Election Period. During the election period commencing on the date
     a Member  referred to in Section 8.3(a)  receives the Notice referred to in
     Section  8.3(a) and ending on the Member's  Pension  Starting  Date,  (1) a
     married  Member  may,  with the  consent  of his  spouse  (unless  the Plan
     Administrator makes a written determination in accordance with the Code and
     the applicable  regulations  that no such consent is required),  elect,  in
     writing on a form  furnished  by the Plan  Administrator,  to  receive  his
     Pension in one of the optional forms  described in Section 8.4 in lieu of a
     Joint and  Survivor  Pension,  and (2) an  unmarried  Member may elect,  in
     writing on a form  furnished  by the Plan  Administrator,  to  receive  his
     Pension in one of the optional  forms of Pension  available  under  Section
     8.4, in lieu of payment in the form of a straight-life annuity. No election
     shall be  effective  unless  such form has been  executed by the Member and
     delivered  by him to the Plan  Administrator  during the  election  period.
     During such  election  period,  a Member may revoke his  election,  without
     spousal  consent,  and such  revocation  shall not  affect the right of the
     Member to execute and file a further  election with the Plan  Administrator
     within such election period.  After the expiration of such election period,
     any election timely filed with the Plan Administrator  within such election
     period shall become  irrevocable,  and any election filed thereafter by the
     Member shall not be given effect.

          (b) Spousal Consent. Any consent that must be provided by the Member's
     spouse to the  Member's  election  to receive his Pension in any form other
     than  the  Joint  and  Survivor   Pension   must   satisfy  the   following
     requirements.  Such  consent  shall  be  in  writing.  Such  consent  shall
     acknowledge  the effect of such election on the spouse's rights to benefits
     under the Plan,  and shall be  witnessed by a notary  public.  In addition,
     such consent shall state and acknowledge (1) the specific  optional form of
     payment  selected by the Member and (2) where  applicable,  any  non-spouse
     Beneficiary designated by the Member. A spouse's consent so furnished shall
     be irrevocable, but it shall be effective only with respect to such spouse,
     such  specific  optional  form  of  payment  and,  where  applicable,  such
     non-spouse Beneficiary.

     8.3 Notice to Members of Election of a Form of Payment of Pension.

          (a)  Notice to  Members.  No more than 90 days  prior to the  Member's
     Pension  Starting  Date, the Plan  Administrator  shall provide such Member
     with a notice (the "Notice").  The Notice shall advise the Member as to the
     circumstances  under which his Pension will become payable, as to the forms
     in which it may be paid,  as to the material  features and relative  values
     of, and the amounts payable under,  such forms and as to all elections that
     may be available  for the Member to make with respect to the payment of his
     Pension,  including  information as to the eligibility  conditions for, and
     the time and method of,  making  such  elections.  In the case of a married
     Member,  the notice shall also contain an  explanation of (1) the terms and
     conditions  of the Joint and Survivor  Pension,  (2) the Member's  right to
     make,  and the effect of, an election  to have his  Pension  paid in a form
     other than the Joint and Survivor  Pension,  (3) the rights of the Member's
     spouse in  connection  with such  election,  and (4) the Member's  right to
     make,  and the  effect  of, a  revocation  of such  election.  A Member  is
     entitled to a period of no less than 30 days to consider this  information,
     but the  Committee  may permit the Member to waive this right in favor of a
     period of seven days,  provided the waiver  satisfies  the  requirement  of
     applicable Treasury regulations.

          (b)  Member's  Request  for  Further  Information.  At any time  after
     receipt of the Notice  described  above,  and no less than 30 days prior to
     the expiration of the election  period  prescribed in Section 8.2, a Member
     may  file  a  written  request  for  further   information  with  the  Plan
     Administrator.  The Plan Administrator  shall,  within 30 days after it has
     received such request,  provide the Member requesting  further  information
     with a  detailed  written  description  of each of the  forms in which  the
     Member's  Pension may be paid, and a detailed  explanation of the financial
     effect of receiving  his Pension in each such form,  including  the monthly
     payments which the Member,  or his surviving  spouse or Beneficiary,  would
     receive  under each such form.  A Member shall be entitled to make only one
     such  request.  If  a  Member  has  filed  a  timely  request  for  further
     information  hereunder,  the election period specified in Section 8.2 shall
     be  extended  for a period  ending 90 days after the date on which the Plan
     Administrator  has furnished  such Member with the  additional  information
     requested.  If the election period is so extended,  the actual payment of a
     Member's  Pension  shall not  commence  until the  election  period,  as so
     extended,  has  expired.  However,  such  extension  shall not  change  the
     Member's  Pension  Starting Date. Any  installment of the Member's  Pension
     that was otherwise due during such extension, based on the Member's Pension
     Starting Date, shall be paid, after the expiration of the extended election
     period,  retroactive  to the date on which such  installment  was otherwise
     due, and the amount of such payment shall be determined on the basis of the
     form in which the  Member's  Pension is to be paid  under the Plan,  taking
     into account any election made by the Member during the election period, as
     extended, as to the form of his Pension payments.

     8.4 Optional  Forms of  Pensions.  Any Member may, in  accordance  with the
provisions  of Section 8.2,  elect to receive his Pension in one of the optional
forms of Pension described below:

          OPTION 1. A reduced  Pension payable to the Member during the Member's
     life,  and after his death a Pension of 50%,  66-2/3%,  75%, or 100% of the
     amount of the Member's  reduced Pension payable during the life of, and to,
     the Member's spouse on his Pension Starting Date who survives him.

          OPTION 2. A reduced  Pension payable to the Member during the Member's
     life,  with  payment  thereof  guaranteed  to be  made  to the  Beneficiary
     designated by him for a period of 60 or 120 months.

          OPTION 3. A  straight-life  annuity  payable to the Member only during
     his lifetime.

     A Member who elects Option 1 or Option 2 shall specify in his election made
under Section 8.2 the  percentage  of his reduced  annuity that is to be paid to
his surviving  spouse under Option 2 or the number of months for which  payments
are to be guaranteed under Option 1, as applicable.  If the Member elects Option
2, he shall designate on his election form filed under Section 8.2 a Beneficiary
to receive  any amounts  payable  under  Option 2 upon his death.  If the Member
fails to  designate  a  Beneficiary  for  such  purpose,  or if the  Beneficiary
designated  by the Member for such  purpose  does not survive  him, the Member's
Beneficiary  for such  purpose  shall be his  surviving  spouse or, if he has no
surviving spouse, his estate.

     In the case of a Member who elects to have his Pension  paid under Option 2
providing for payments  guaranteed for a period certain,  and whose death occurs
after such  payments  have  commenced  but before he receives the full number of
payments  guaranteed  under Option 2, the  remaining  number of such  guaranteed
payments  shall be paid to his  Beneficiary  at the same  times  and in the same
amounts as they were payable to the Member  prior to his death.  It is provided,
however, that if the Member's estate is his Beneficiary,  an amount equal to the
lump sum Equivalent  Actuarial Value of any such remaining  guaranteed  payments
shall be paid to his  estate,  in a single  lump  sum cash  payment,  in lieu of
making any monthly  payments to the estate.  Such lump sum payment shall be made
as soon as practicable  after the Member's death, but no later than by the final
day of the Plan Year  immediately  following  the Plan Year in which the  Member
died.

     Each such optional form of Pension shall be of Equivalent  Actuarial  Value
to the  Pension to which the Member is  otherwise  entitled  computed  under the
applicable provision of Article 5 or Article 7.

     8.5  Death of  Member's  Spouse or  Beneficiary.  If a  Member's  spouse or
Beneficiary  shall die prior to the date a Member's  election  under Section 8.2
becomes irrevocable, the Member shall be entitled to revoke such election and to
make  such  other  election  under  Section  8.2  or  to  designate  such  other
Beneficiary  as the  Member  may  deem  appropriate  by  filing  with  the  Plan
Administrator  a further  election or designation  of  Beneficiary  prior to the
expiration date of the election  period  prescribed in Section 8.2 (as extended,
if  applicable,  pursuant to Section 8.3). If a Member's  spouse or  Beneficiary
shall die after the  Member has  received  the first  payment  under a Joint and
Survivor  Pension or other  optional form of Pension  elected under Section 8.2,
such  Pension  shall  continue  in  accordance  with its terms and the  Member's
Pension shall not be increased thereby.

     8.6  Level  Income  Option.  In the case of any  Member  who takes an early
retirement  under Section 6.2  (including a Member with a Total  Disability  who
takes an early retirement  under such Section),  and whose Pension Starting Date
precedes his 62nd  birthday,  the Member may elect,  by filing a written  notice
with the Plan Administrator  during the election period described in Section 8.2
with respect to his Pension Starting Date, to have the benefit payments he is to
receive prior to his 62nd birthday  increased,  and to have the benefit payments
he is to receive  after his 62nd  birthday  reduced,  by the amounts  determined
under the  applicable  table in  Appendix  A hereto,  or, if it would  produce a
greater benefit,  under the interest rate and mortality  assumptions provided in
Code Section 417(e).  The difference  between the amount of the Member's benefit
payments as so increased and the amount of the Member's  benefit  payments as so
decreased,  as determined under such table, shall be approximately  equal to the
amount of the  old-age  Social  Security  benefit  that  would be payable to the
Member if payment thereof were to commence as of his 62nd birthday.

     8.7 Spouse's Preretirement Survivorship Pension.

          (a) In General.  If a Member or a Former  Member who,  after earning a
     nonforfeitable  right to a Pension,  dies before his Pension Starting Date,
     his surviving spouse shall be entitled to receive a Spouse's  Preretirement
     Survivorship Pension.

          (b)  Commencement  of  Payments.  Payment of a Spouse's  Preretirement
     Survivorship  Pension  shall  commence (1) in the case of a Member who dies
     after his Earliest Payment Date, on the first day of the month  immediately
     following  the month in which the Member died or (2) in any other case,  on
     the date which would have been the Member's Earliest Payment Date if he had
     not died.  It is  provided,  however,  that  prior to the  Member's  Normal
     Retirement  Date (or the date  which  would have been the  Member's  Normal
     Retirement Date if he had not died),  payment may not commence  without the
     written consent of the Member's  surviving spouse,  obtained within 90 days
     of such  commencement.  Notwithstanding  the foregoing,  the payment of the
     Spouse's Preretirement  Survivorship Pension shall, in all events, commence
     no later  than by the  later of (i) the final day of the Plan Year in which
     the Member would have  attained age 70 1/2 if he had not died,  or (ii) the
     final day of the Plan Year following the Plan Year in which he died. If the
     surviving  spouse  dies  before  payment  of  the  Spouse's   Preretirement
     Survivorship Pension commences, no such pension shall be payable under this
     Section 8.7.

          (c)  Actuarial  Adjustments.  In the  event  that the  payment  of the
     Spouse's  Preretirement  Survivorship  Pension  is  delayed  because of the
     surviving  spouse's  failure to consent to the  commencement  thereof under
     subsection (b) above, the amount of the Spouse's Preretirement Survivorship
     Pension payable under this Section 8.7 shall be adjusted so that, as of the
     date on which  payment of such pension  actually  commences,  it will be of
     Equivalent  Actuarial  Value to the Pension that would have been payable if
     payment  thereof had commenced on the earliest  date on which  commencement
     was permitted under subsection (b) above.

          (d) Lump sum payments.  Notwithstanding  the above, if, as of the date
     of the  Member's  death,  the lump sum  Equivalent  Actuarial  Value of the
     Spouse's  Preretirement  Survivorship Pension does not exceed $5,000 ($3500
     prior to  January 1,  1998),  an amount  equal to such lump sum  Equivalent
     Actuarial Value shall be distributed to the Member's surviving spouse, in a
     single  lump  sum  cash  payment,  in  lieu of any  Spouse's  Preretirement
     Survivorship   Pension.   Such  distribution  shall  be  made  as  soon  as
     practicable  following the Member's  death,  but no later than by the final
     day of the Plan  Year  immediately  following  the Plan  Year in which  the
     Member died.

     8.8 Distribution requirements.

          (a)  Notwithstanding  any other  provision of the Plan,  distributions
     under the Plan shall comply with the provisions of Section 401(a)(9) of the
     Code and Treasury  Regulations  issued  thereunder,  including Treas.  Reg.
     Section  1.401(a)(9)-2,  which provisions are hereby incorporated herein by
     reference,   provided  that  such  provisions   shall  override  the  other
     distribution provisions of the Plan only to the extent that such other Plan
     provisions  provide for distribution that is less rapid than required under
     such  provisions  of the Code and  Regulations.  Nothing  contained in this
     Subsection  shall be construed as  providing  any optional  form of payment
     that is not available under the other distribution  provision provisions of
     the Plan.

          (b) Effective  January 1, 1997 through  December 30, 1999,  any Member
     who is still  employed  on December 31 of the year in which he turns age 70
     1/2 may elect to begin  receiving  retirement  benefits  in the amount that
     would have been  required  under Code  Section  401(a)(9),  as in effect on
     December 31, 1996.

          (c) If the Member remains employed by an Affiliated  Company after the
     calendar  year in which he turns 70 1/2 and has not  begun to  receive  his
     benefit  under the Plan,  the Pension  payable to a Member upon  retirement
     shall not be less than the Equivalent  Actuarial  Value of the Pension that
     the Member would have  received if the Member had retired on April 1 of the
     calendar  year in  which  he  attained  age 70  1/2,  plus  the  Equivalent
     Actuarial Value of any benefits accrued after such date, and reduced by the
     Equivalent Actuarial Value of any Pension  distributions made to the Member
     after  such  date.   The  actuarial   adjustment   required  under  Section
     411(b)(1)(H)(iii)(II)  of the Code,  or any successor  provision,  shall be
     reduced  by the  amount of the  actuarial  adjustment  under  this  Section
     8.8(c),  as permitted  under Code Section  401(a)(9)(C)(iii)  and any other
     applicable IRS guidance.

     8.9 Early  Distributions.  A Member who is  entitled  to a deferred  vested
Pension  under  Article 5, or to an early  retirement  Pension under Section 6.2
(including a Member with a Total Disability who takes an early retirement),  and
wishes to elect to have  payment  of his  Pension  commence  prior to his Normal
Retirement Date may, at any time, notify the Plan  Administrator  that he wishes
to  make  such  an  election.   Upon  receiving  such  notification,   the  Plan
Administrator  shall  furnish  the  Member  with a  written  explanation  of the
Member's right to elect to have payments commence prior to his Normal Retirement
Date,  and the effect of any such election.  After receipt of such  explanation,
the Member may make the election to have the payment of his Pension  commence by
filing with the Plan Administrator a written notification specifying the date on
which the Member wishes to have the payments commence.  The payment commencement
date specified by the Member must be the first day of any month which is no more
than 90 days after the date on which the Plan Administrator furnishes the Member
with the written  explanation  described above. A Member is entitled to a period
of at least 30 days to consider this  information,  but the Committee may permit
the  Member to waive  this  right in favor of a period of 7 days,  provided  the
waiver satisfies the  requirements of applicable  Treasury  regulations.  If the
Member is married on such payment  commencement  date,  and his Pension is to be
paid in a form other than the Joint and Survivor Pension,  the Member's election
to have Pension payments  commence prior to his Normal  Retirement Date shall be
accompanied  by the  written,  notarized  consent of his spouse to such  payment
commencement date (unless the Plan Administrator  makes a written  determination
in accordance with the Code and  regulations  that no such consent is required).
Any election so made shall be irrevocable.

     8.10 Direct  Rollovers.  This Section 8.10 applies to any distribution made
by the Plan on or after January 1, 1993, to the extent that such distribution is
an "Eligible Rollover  Distribution".  Notwithstanding any provision of the Plan
to the contrary, the "Payee" of any Eligible Rollover Distribution may elect, at
the time and in the manner prescribed by the Plan Administrator,  to have all or
any portion of such  distribution  paid as a "Direct  Rollover"  to an "Eligible
Retirement Plan" specified by the Payee.

     For the purpose of this  Section  8.10,  the  following  definitions  shall
apply. The term "Eligible Rollover  Distribution" shall have the same meaning as
such term has under section  402(c)(4) of the Code and the  applicable  Treasury
regulations,  and, in general, shall mean any lump sum distribution of a benefit
under the Plan, other than the portion,  if any, of such  distribution  which is
required to be made under  section  401(a)(9)  of the Code.  The term  "Eligible
Retirement  Plan"  shall mean an  individual  retirement  account  described  in
section  408(a) of the Code,  an  individual  retirement  annuity  described  in
section 408(b) of the Code, a qualified annuity plan described in section 403(a)
of the Code, or a qualified  trust described in section 401(a) of the Code, that
will accept a Direct Rollover of the Payee's distribution. However, if the Payee
is the surviving spouse of a Member,  only an individual  retirement  account or
individual  retirement  annuity  described above shall be treated as an Eligible
Retirement  Plan.  The term  "Payee"  shall mean any person who is  entitled  to
receive a distribution from the Plan, and who is a Member,  the surviving spouse
of a Member,  or the  spouse or former  spouse of a Member  who is  entitled  to
receive the  distribution  as the  alternate  payee  under a qualified  domestic
relations  order,  as defined in section  414(p) of the Code.  The term  "Direct
Rollover"  shall  mean a direct  payment  of a  distribution  by the Plan to the
Eligible Retirement Plan specified by the Payee, made in accordance with section
401(a)(31) of the Code and the Treasury regulations and Internal Revenue Service
rulings and notices  thereunder,  and made in such manner as  prescribed  by the
Plan Administrator.

                                    ARTICLE 9
                          CERTAIN RIGHTS AND LIMITATIONS

     9.1 Benefits  Payable  Solely from Trust Fund.  All benefits  payable under
this Plan shall be paid or  provided  for  solely  from the Trust  Fund,  and no
Participating  Company in the Plan shall have any  liability  or  responsibility
therefor.

     9.2  Prohibition  against  Alienation  of Benefits.  Except  insofar as may
otherwise  be required  by law or pursuant to the terms of a Qualified  Domestic
Relations Order (as defined  below),  no benefit under the Plan shall be subject
in any manner to anticipation,  alienation, sale, transfer,  assignment, pledge,
encumbrance  or  charge,  and any  attempt  so to  anticipate,  alienate,  sell,
transfer,  assign, pledge,  encumber or charge the same shall be void; nor shall
any  such  benefit  be in any  manner  liable  for or  subject  to  garnishment,
attachment, execution or levy, or liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled to such benefit; and in
the event that the Plan Administrator shall find that any Former Member,  spouse
or Beneficiary  has become  bankrupt or has attempted to  anticipate,  alienate,
sell, transfer,  assign, pledge, encumber or charge any benefits under the Plan,
then payment of such benefit shall, in the discretion of the Plan Administrator,
cease and  terminate,  and in that  event the Plan  Administrator  shall hold or
apply  the  same to or for  the  benefit  of  such  Former  Member,  spouse,  or
Beneficiary or the children or other  dependents of the same, in such manner and
in such  proportions  as the Plan  Administrator  may deem proper,  and any such
application shall be a complete discharge of all liabilities of the Plan and the
Trustee  therefor.  For  purposes of this  Section  9.2, a  "Qualified  Domestic
Relations Order" means any judgment,  decree, or order (including  approval of a
property   settlement   agreement)   which  has  been  determined  by  the  Plan
Administrator,  in accordance  with  procedures  established  under the Plan, to
constitute a qualified  domestic  relations  order within the meaning of section
414(p)(1) of the Code.

     Notwithstanding  any provision of the Plan to the contrary,  the Plan shall
honor a judgment, order, decree or settlement providing for the offset of all or
part of a  Participant's  benefit under the Plan, to the extent  permitted under
Code  Section  401(a)(13)(C);  provided  that the  requirements  of Code Section
401(a)(13)(C)(iii)  relating to the protection of the  Participant's  spouse (if
any) are satisfied.

     9.3 Incompetency.  In the event that the Plan Administrator shall find that
a Member or other person  entitled to a benefit under the Plan is unable to care
for his affairs  because of illness or  accident  or because he is a minor,  the
Plan  Administrator  may direct that any benefit  payment due him,  unless claim
shall have been made therefor by a duly appointed  guardian,  committee or other
legal representative, be paid to a spouse, child, parent or other blood relative
of such person or to anyone  found by the Plan  Administrator  to have  incurred
expense for the support and maintenance of such person,  and any such payment so
made shall be a complete  discharge of all  liabilities  of the Plan and Trustee
therefor.

     9.4 No Right to Continued Employment. The establishment and continuation of
the Plan  shall not  confer  any legal  rights  upon any Member or any person to
continued  employment,  nor shall such  establishment or continuation  interfere
with the  rights of a  Participating  Company  to  discharge  any  Member and to
otherwise treat him without regard to the effect which such discharge might have
upon him as a Member.

     9.5  Payment  of Taxes.  The  Trustee  shall  have the right to deduct  and
withhold from any benefit which it is otherwise obligated to pay under Article 5
or Article 6 any amount which it may be required to deduct or withhold  pursuant
to any  applicable  statute,  law,  regulation  or  order  of  any  jurisdiction
whatsoever.  The Trustee  shall not be required to pay any benefit to the spouse
or Beneficiary of any deceased Member pursuant to Article 8 until such spouse or
Beneficiary  or the legal  representatives  of the  deceased  Member  shall have
furnished the Trustee with evidence  satisfactory  to the Trustee of the payment
or the provision for the payment of any estate,  transfer,  inheritance or death
taxes which may be payable with respect thereto.

     9.6 Merger or  Consolidations  with Other Plans. In the event that the Plan
is merged or  consolidated  with any other plan, or in the event of any transfer
of assets or  liabilities  of the Plan to any other plan, the benefit which each
Member  would be entitled to receive if the Plan  terminated  immediately  after
such merger,  consolidation  or transfer  shall be at least equal to the benefit
which he  would  have  been  entitled  to  receive  if the  Plan had  terminated
immediately before the merger, consolidation or transfer.

     Moreover, the Company reserves the right, in its capacity as sponsor of the
Plan, to direct that Members'  accrued  benefits  under the Plan be spun off and
transferred  to a  qualified  plan  maintained  by the buyer in any  transaction
involving the sale of assets of the Company,  an Affiliated Company, or the sale
of a subsidiary of the Company,  or an Affiliated  Company,  if such Members are
employed in the  subsidiary  that is being sold or in the  division or operating
unit from which the assets are being sold. If such transfer of Members'  accrued
benefits occurs, any Member who becomes employed by the buyer or an affiliate of
the  buyer  shall  not be  deemed  to  have  retired  or  otherwise  incurred  a
termination  of employment for purposes of Article 7 of the Plan, and any future
rights to  distributions  of  transferred  accrued  benefits shall be determined
solely under the term of the plan to which the accrued benefits are transferred.

     9.7  Purchase  of  Annuities.  The  Committee  is  authorized,  in its sole
discretion,  to direct the  Trustee to provide for the payment of any Pension or
other  benefit  under the Plan  through the  purchase of one or more  annuity or
other contracts from any established  legal reserve life insurance company doing
business in the State of New York.  The proceeds of any such  contract  shall be
paid  directly  to the  Member,  spouse or  Beneficiary  entitled  thereto.  The
ownership of the contract shall,  however,  be vested exclusively in the Trustee
who  shall  hold the same in trust for the  benefit  of the  designated  Member,
spouse or  Beneficiary  and the  Trustee  shall have the power to  exercise  all
rights, privileges and options contained therein and to agree with the insurance
company to any release, reduction, modification or amendment thereof.

     9.8 Periods of  Liquidity  Shortfall.  During any period for which the Plan
has a "liquidity shortfall",  as defined in sections 401(a)(32)(C) and 412(m)(5)
of the Code, the Plan shall not make the following  benefit  payments:  (a) with
respect to any benefit  payable  under the Plan for which the "annuity  starting
date",  as defined in Code section  417(f)(2),  occurs  during such period,  any
benefit  payment in excess of the monthly  amount of the payment of such benefit
that would  have been made if such  benefit  were  being paid as an  actuarially
equivalent  single life annuity (plus the monthly amount of any Social  Security
supplement  described in the last sentence of Code section  411(a)(9));  (b) any
payment out of the Trust Fund for the purchase of an irrevocable commitment from
an insurer to pay a benefit under the Plan; and (c) any other payment  specified
by  the   Secretary   of  the   Treasury  by   regulation   under  Code  section
401(a)(32)(B)(iii).

                                    ARTICLE 10
                                  CONTRIBUTIONS

     10.1 Manner of Funding.  The  benefits  provided by this Plan shall be paid
from the Trust Fund managed by the Trustee, to which the Participating Companies
shall contribute in accordance with the provisions of this Article 10. No Member
shall be required or permitted to make any contributions to the Trust Fund. Each
Participating  Company's  contribution  to the Trust Fund for each Plan Year (a)
shall be accrued during the taxable year of the Participating Company which ends
coincident with such Plan Year, (b) except to the extent that earlier payment is
required under Section 10.3, shall be paid by the  Participating  Company to the
Trustee not later than by the date it is required to file its Federal income tax
return for such taxable year or by the last day of any extension thereof and (c)
is conditioned on its deductibility for Federal income tax purposes.

     10.2  Nature  of  Obligation.  It is the  intention  of each  Participating
Company to continue the Plan  indefinitely  and to  contribute to the Trust Fund
over a period  of time  such  amounts  as are  sufficient  to  satisfy  the full
actuarially  computed cost of providing  the Pensions  payable under the Plan in
respect of the Members employed by the Participating  Company in accordance with
generally accepted actuarial principles adopted by the Committee with the advice
of  its   actuaries.   Nevertheless,   subject  to  Section  10.3  below,   each
Participating Company reserves the right to suspend such contributions from time
to time or to discontinue them altogether.

     10.3 Minimum  Funding  Standard.  During the  continuance of this Plan with
respect to a Participating  Company,  the  Participating  Company shall, at such
times  as  shall  be  prescribed  by  the   Investment   Committee,   make  such
contributions  to the  Plan as  shall be  required  to  satisfy  its  share,  as
determined by the Investment  Committee,  of the contributions  required to meet
the  minimum  funding  standards  prescribed  under  section  412 of  the  Code,
provided,  however,  that a  Participating  Company shall not  contribute to the
Trust Fund any amounts  which are or may not be  deductible  from  income  under
section 404(a) of the Code.

     10.4 Effect of Forfeitures. Any excess funds resulting from the termination
of any Member's  employment under  circumstances that do not entitle the Member,
or his  spouse or  Beneficiary,  to a Pension or other  benefit  under the Plan,
shall not be applied  to  increase  the  benefits  payable to any other  Member,
spouse or  Beneficiary,  but shall  remain in the Trust  Fund and shall have the
effect of reducing the amount of any subsequent contributions to be made by each
Participating Company by which such Member was employed.

     10.5  Non-Diversion.  Prior to the  satisfaction  of all  liabilities  with
respect to Members and their spouses and Beneficiaries  under the Plan, it shall
be  impossible at any time for any part of the Trust Fund to be used or diverted
to purposes other than the exclusive  purposes of providing  benefits to Members
and their spouses and Beneficiaries,  and paying the reasonable  expenses of the
Plan and the Trust as determined by the Investment  Committee,  except under the
following circumstances:

          (a) In the case of a  contribution  which  is made by a  Participating
     Company  by  mistake  of  fact,  such  contribution  shall  revert  to  the
     Participating   Company   within  one  year   after  the   payment  of  the
     contribution.

          (b) Each  contribution  which a Participating  Company makes under the
     Plan  is so  made  subject  to the  condition  that  such  contribution  is
     deductible  under section 404 of the Code. To the extent a deduction  under
     section 404 of the Code for a contribution  by a  Participating  Company to
     the  Plan  is   disallowed,   such   contribution   shall  revert  to  such
     Participating  Company  within  one  year  after  the  disallowance  of the
     deduction.

                                    ARTICLE 11
                            ADMINISTRATION OF THE PLAN

     11.1  Appointment of the Committee.  The Board of Directors shall appoint a
Committee, which shall consist of not less than three nor more than six officers
of the Company or any Participating  Companies, all to be appointed by the Board
of Directors and to serve at the pleasure of the Board of Directors. Any vacancy
in the Committee  arising by death,  resignation or otherwise shall be filled by
the Board of Directors.

     11.2 Duties and Powers of Committee. The Committee shall be responsible for
the control and management of the operation and  administration  of the Plan and
the proper  execution of its provisions,  except as to those powers,  duties and
responsibilities  hereinafter assigned to the Plan Administrator,  and except as
to those  powers and  responsibilities  hereinafter  reserved  or granted to the
Investment  Committee,  the Trustee or to the Board of Directors.  The Committee
shall be a "named fiduciary" of the Plan within the meaning of section 402(a) of
ERISA.

     The  Committee  shall  appoint  a  person  or  persons  to  serve  as  Plan
Administrator  in  accordance  with Section 11.9 below,  and shall  periodically
review  the  performance  of  any  such  persons.   It  shall  also  (a)  settle
periodically  the  accounts of the  Trustee;  (b) perform  such other duties and
responsibilities  as are specifically  assigned to the Committee under the Plan;
and (c) retain such counsel and employ such accounting,  actuarial, clerical and
other such  assistants  as in its judgment may from time to time be required for
the proper  performance  of its duties and the duties of the plan  Administrator
hereunder.

     11.3  Appointment  of Investment  Committee.  The Board of Directors  shall
appoint an Investment  Committee,  which shall consist of not less than five nor
more than seven officers of the Company or any Participating  Companies,  all to
be appointed by the Board of Directors and to serve at the pleasure of the Board
of  Directors.  Any  vacancy  in the  Investment  Committee  arising  by  death,
resignation or otherwise shall be filled by the Board of Directors.

     11.4 Conduct of Affairs of Investment  Committee.  The Investment Committee
shall hold such  meetings  upon such  notice at such place or places and at such
times as it may from time to time deem appropriate. The Investment Committee may
act by a majority of its members in office from time to time. The action of such
majority  may be taken at a meeting of the  Investment  Committee or pursuant to
written consent of such majority without a meeting. The Board of Directors shall
appoint  one of the  Investment  Committee  members  to act as  Chairman,  and a
different person, who may but need not be a member of the Investment  Committee,
shall be appointed by the Board of Directors,  or may be elected or appointed by
the Investment Committee,  to act as Secretary. It may authorize any one or more
of its members to execute and deliver any documents on behalf of the  Investment
Committee.

     11.5 Duties and Powers of Investment  Committee.  The Investment  Committee
shall  establish  for the Plan a funding  policy,  within the meaning of section
402(b)(1) of ERISA, and shall communicate the same to the Trustee. It shall also
(a) review and suggest  revisions from time to time to the actuarial  tables and
rates of  interest  to be used in all  actuarial  calculations  which are or may
hereafter be required in connection with the Plan; (b) perform such other duties
and responsibilities as are assigned to the Investment Committee under the Plan:
and (c) retain such counsel and investment  advisers and employ such accounting,
actuarial,  clerical and other such  assistants as in its judgment may from time
to time be required for the proper performance of its duties.

     11.6 Reports to Company.  Within a reasonable  time after the close of each
Plan Year, the Investment Committee shall prepare a report showing in reasonable
detail the assets of the Plan held by the  Trustee  and the  liabilities  of the
Plan and giving a brief  account of the operation of the Plan for the prior Plan
Year, which report shall be submitted to the Board of Directors and the Board of
Directors of each Participating Company.

     11.7  Conduct  of  Affairs  of  Committee.  The  Committee  shall hold such
meetings  upon such  notice at such  place or places and at such times as it may
from time to time deem  appropriate.  The Committee may act by a majority of its
members in office from time to time. The action of such majority may be taken at
a meeting of the  Committee  or  pursuant  to written  consent of such  majority
without a meeting.  The Board of Directors  shall  appoint one of the  Committee
members to act as Chairman,  and a different  person,  who may but need not be a
member of the Committee, shall be appointed by the Board of Directors, or may be
elected or appointed by the Committee, to act as Secretary. It may authorize any
one or more of its members to execute and deliver any documents on behalf of the
Committee.

     11.8 Actuarial Valuations.  As an aid to the Investment Committee in fixing
the rates of contributions payable under the Plan, the actuary designated by the
Investment  Committee shall make annual  actuarial  valuations of the assets and
liabilities of the Plan, and shall submit to the Investment  Committee the rates
of  contribution  which he recommends  for use. The Investment  Committee  shall
maintain  accounts  showing the financial  status of the Plan, and shall keep in
convenient  form such data as may be necessary for  actuarial  valuations of the
Plan.

     11.9 Appointment of the Plan  Administrator.  The Committee shall appoint a
person or persons to serve as Plan Administrator.  The Committee shall determine
the number of persons who shall serve as Plan  Administrator,  and it may remove
and replace any persons it has appointed to so serve in its sole discretion.

     11.10 Duties and Powers of the Plan  Administrator.  The Plan Administrator
shall have the powers,  duties and responsibilities set forth below with respect
to the Plan. The Plan Administrator shall be deemed to be the "administrator" of
the Plan for purposes of section  3(16)(A) of ERISA,  and is also designated the
"plan  administrator"  of the Plan within the  meaning of section  414(g) of the
Code.

     The Plan  Administrator  shall be responsible,  and have full discretionary
authority,  for  the  construction  of the  Plan  and the  determination  of all
questions arising hereunder,  including, without limitation,  questions of fact.
It shall maintain all necessary books of accounts and records. In furtherance of
the  foregoing,   the  Plan   Administrator   shall  have  the  sole  power  and
responsibility:

          (a) to  interpret  the  provisions  of the  Plan  (including,  without
     limitation,  by supplying  omissions from,  correcting  deficiencies in, or
     resolving inconsistencies or ambiguities in, the language of the Plan),

          (b) to establish,  interpret,  enforce,  amend and revoke from time to
     time such rules and regulations for the  administration of the Plan and the
     conduct of its business as it deems  appropriate,  provided  such rules and
     regulations are uniformly applicable to all persons similarly situated,

          (c) to determine  the  eligibility  of persons for  membership  in the
     Plan, and to effect the retirement of Members,

          (d) to receive  elections  by Members as to optional  forms of benefit
     payments,

          (e) to determine the entitlement of Members,  Former Members and their
     spouses and their  Beneficiaries  to benefits under the Plan and the amount
     of such benefits  (including,  to the extent necessary,  making any factual
     findings  with  respect  thereto),  and,  in  accordance  with  the  claims
     procedure  set forth in Section  11.15,  to decide any  disputes  which may
     arise  relative to the rights of the  Members,  Former  Members,  and their
     spouses and Beneficiaries, with respect to such benefits,

          (f) to direct the  Trustee  to pay out of the Trust  Fund all  amounts
     which are payable  hereunder to Members,  Former Members or their surviving
     spouses or Beneficiaries,

          (g) to  keep  all  appropriate  records  and  data  pertaining  to the
     interests  of  the   Members,   Former   Members  and  their   spouses  and
     Beneficiaries in the Plan,

          (h) to  file  all  such  reports  with  the  appropriate  governmental
     departments  and agencies and to disclose such  information to the Members,
     Former Members and their spouses and Beneficiaries with respect to the Plan
     as may be required  under the  provisions of the Code and ERISA as the same
     may apply to plan administrators, and

          (i)  to  perform  such  other  duties  and   responsibilities  as  are
     specifically assigned to the Plan Administrator under the Plan.

Any action which the Plan Administrator is required or authorized to take shall,
to the extent  permitted by  applicable  law, be final and binding upon each and
every person who is or may become interested in the Plan or Trust Fund.

     11.11 Delegation of Responsibilities  by the Plan  Administrator.  The Plan
Administrator may delegate the following duties and  responsibilities  to one or
more Employees:

          (a)  application  of Plan  provisions  to  determine  eligibility  for
     membership or benefits,

          (b) preparation and distribution of communications to Members,  Former
     Members and their spouses and Beneficiaries,

          (c) maintenance of compensation and employment records,

          (d) preparation of reports and  applications  required by governmental
     agencies,

          (e) calculations of service, compensation, credit and benefits,

          (f) orientation of new Members,  advising Members,  Former Members and
     their spouses and  Beneficiaries of their rights and options under the Plan
     and  monitoring  completion of  application,  election and benefit forms by
     Members, Former Members and their spouses and Beneficiaries,

          (g) monitoring  collection of contributions and proper  application of
     the contributions to effectuate the purposes of the Plan,

          (h) preparation of reports concerning benefits,

          (i) initial processing of claims,

          (j) making  recommendations  to the Plan Administrator with respect to
     the merits of claims and the administration of the Plan, and

          (k) any  other  of its  duties  or  responsibilities  which  the  Plan
     Administrator  determines are  administrative  or ministerial in nature and
     are designed to  implement a policy,  interpretation,  system,  practice or
     procedure established by the Plan Administrator.

If any duties or responsibilities are delegated to any Employee pursuant to this
Section 11.11, the Plan Administrator  shall periodically review the performance
of such Employee.  Depending upon the  circumstances,  this  requirement  may be
satisfied by a formal review by the Plan  Administrator at such time or times as
the Plan  Administrator  in its  discretion may  determine,  through  day-to-day
contact and  evaluation or in any other manner  determined to be  appropriate by
the Plan Administrator.

     11.12 Conduct of Affairs of the Plan Administrator.  The Plan Administrator
shall meet periodically at such place or places and at such times as it may from
time to time deem appropriate.  The Plan  Administrator may act by a majority of
the persons serving as Plan  Administrator from time to time. The action of such
majority  may be taken at a meeting of the Plan  Administrator  or  pursuant  to
written consent of such majority without a meeting.  It shall elect from time to
time one of the persons serving as Plan  Administrator  to act as Chairman and a
different   person,   who  may  but  need  not  be  a  person  serving  as  Plan
Administrator,  to act as  Secretary.  It may  authorize  any one or more of the
persons  serving as Plan  Administrator  to execute and deliver any documents on
behalf of the Plan Administrator.

     11.13 Expenses and Liability.  Expenses  incurred in the  administration of
the Plan and Trust Fund,  including  fees for legal,  accounting  and  actuarial
services,  all  taxes  levied  or  assessed  against  the Plan and  Trust  Fund,
insurance premiums payable to the Pension Benefit Guaranty  Corporation and such
other expenses  incurred in the  administration of the plan and Trust Fund shall
be paid from the Trust Fund,  unless  paid by the Company or by a  Participating
Company.  The members of the Committee  and the  Investment  Committee,  and the
persons  serving as Plan  Administrator,  shall serve without  compensation  for
their  services as such, but shall be reimbursed by the Company for any expenses
they may  individually or collectively  incur in the performance of their duties
hereunder.  No bond or other  security  shall be  required  of any member of the
Committee  or  Investment   Committee,   or  of  any  person   serving  as  Plan
Administrator,  unless such member or person handles the funds or other property
of the Plan or trust established hereunder as provided in section 412 of ERISA.

     The Committee,  the Investment  Committee and every member thereof, and the
Plan  Administrator and all persons serving as such, shall perform its and their
duties with respect to the Plan solely in the  interest of the  Members,  Former
Members,  their spouses and Beneficiaries for the exclusive purpose of providing
benefits  under the Plan to the same and  defraying the  reasonable  expenses of
administering the Plan, with the care,  skill,  prudence and diligence under the
circumstances  then  prevailing  that prudent men acting in a like  capacity and
familiar  with such matters  would use in the conduct of an enterprise of a like
character  and with like aims,  and in  accordance  with the  provisions of this
Plan.  No member of the  Committee or the  Investment  Committee,  and no person
serving as Plan  Administrator,  shall be personally liable for anything done or
omitted to be done by him unless it shall have been  judicially  determined that
such member or person  failed to perform his duties under the Plan in the manner
described herein above.

     No member of the  Committee  or the  Investment  Committee,,  and no person
serving  as  Plan  Administrator,  shall  be  personally  liable  for any act or
omission of any other individual that constitutes a breach of such  individual's
duties  hereunder  unless it shall  have been  judicially  determined  that such
member or person  (a)  knowingly  participated  in, or  knowingly  undertook  to
conceal, such act or omission, knowing such act or omission constituted a breach
of such individual's  duties  hereunder,  (b) enabled such act or omission to be
committed  by failing to exercise  the above  described  degree of care,  skill,
prudence and diligence,  or (c) had knowledge of such act or omission and failed
to take reasonable efforts under the circumstances to remedy the breach.

     No member of the  Committee  shall be liable for any act or omission of the
Committee, or of any other member thereof,  occurring before such member became,
or after such member ceased to be, a member of the  Committee.  No member of the
Investment  Committee  shall be liable for any act or omission of the Investment
Committee, or of any other member thereof occurring before such member became or
after such member ceased to be, a member of the Investment Committee.  No person
serving as Plan  Administrator  shall be liable for any act or  omission  of the
Plan  Administrator,  or of any  other  person  serving  as Plan  Administrator,
occurring  before such person began,  or after such person  ceased,  to serve as
Plan Administrator.

     No  member  of the  Committee  shall be  personally  liable  for any act or
omission of any person  appointed to serve as Plan  Administrator  in accordance
with Section 11.9 unless it shall have been  judicially  determined that (1) the
Committee failed to act with the above described degree of care, skill, prudence
and diligence in  appointing  such person to serve as Plan  Administrator  or in
continuing  such  appointment,  or  (2)  the  Committee  or any  member  thereof
knowingly  participated  in, or  knowingly  undertook  to  conceal,  such act or
omission  knowing  such act or  omission  constituted  a breach  of duty by such
person. No person serving as Plan  Administrator  shall be personally liable for
any act or  omission  of an  Employee  to whom  any duty or  responsibility  was
delegated by the Plan  Administrator  in accordance with Section 11.11 unless it
shall have been judicially  determined that (i) the Plan Administrator failed to
act with the above described  degree of care,  skill,  prudence and diligence in
selecting such Employee or in continuing  such  delegation to such Employee,  or
(ii) the Plan Administrator or any person serving as such knowingly participated
in, or knowingly undertook to conceal, such act or omission, knowing such act or
omission constituted a breach of the Employee's duties.

     11.14  Indemnification  of Committee and Investment  Committee  Members and
Persons  Serving as Plan  Administrator.  The Company may, to the maximum extent
permitted under  applicable law,  indemnify each member of the Committee and the
Investment  Committee,  and each person serving as Plan Administrator,  from and
against any and all claims,  actions,  demands,  losses,  damages,  expenses and
liabilities  arising  from any act or  omission  of such  member or person  with
respect to the performance of his duties  hereunder and for which such member or
person is not reimbursed or otherwise made whole under any contract or contracts
of insurance.  Such indemnification  shall include attorneys' fees and all other
costs and  expenses  reasonably  incurred by such member or person in defense of
any claim or action  brought or asserted  against  him arising  from such act or
omission.  Notwithstanding  the  foregoing,  the Company shall not indemnify any
member of the Committee or the  Investment  Committee,  or any person serving as
Plan  Administrator,  with  respect to any  claims,  actions,  demands,  losses,
damages,  expenses  and  liabilities  arising  from any act or  omission of such
member or person with respect to the performance of his duties hereunder if such
act or omission is deemed by the Company to constitute gross negligence, willful
misconduct,  criminal conduct or dealing with the Plan or the trust  established
hereunder for his own benefit or for his own account.

     11.15  Claims  Procedure.  A  Member,  Former  Member,  Member's  spouse or
Beneficiary may claim any benefits under this Plan which such person believes is
properly payable pursuant to the provisions of the Plan by filing an application
therefor.   Such  claim  shall  be  filed,  on  a  form  approved  by  the  Plan
Administrator, with the Company's Vice President, Personnel. A copy of the claim
shall promptly be transmitted  to the Secretary of the Plan  Administrator,  and
shall be considered by the Company's Vice President,  Personnel,  within 90 days
of the date on which he received the claim. If the claim is denied in full or in
part, the claimant  shall be given written  notice  setting  forth,  in a manner
calculated to be understood by the claimant,  (a) the specific reason or reasons
for such denial, (b) specific reference to the pertinent provision or provisions
of the  Plan  upon  which  such  denial  was  based,  (c) a  description  of any
additional  information,  documentation  or  other  material  necessary  for the
claimant to perfect  his claim and an  explanation  as to why such  information,
documentation  or material is required,  and (d) an explanation of the procedure
for obtaining a review of the denial of the claim.

     The claimant or his duly authorized  representative may request a review of
the denial of the claim by filing with the Secretary of the Plan Administrator a
written  request  for  review  within,  and only  within,  the period of 60 days
commencing  with the date the denial of the claim was received by the  claimant.
The claimant and his duly authorized  representative shall be given a reasonable
opportunity  to review the  documents of the Plan and trust  agreement  executed
thereunder  and to  submit  their  written  issues  and  comments  to  the  Plan
Administrator  at any  time  prior to the  expiration  of the  aforesaid  60 day
period.

     Within the period of 60 days starting on the date a request for review of a
denial of claim is received by the Plan  Administrator,  the Plan  Administrator
shall  consider  the  request  and post its final  decision  to the  claimant by
registered or certified  mail. In the event that the Plan  Administrator  in its
sole discretion determines that the case presents special circumstances, such as
the need for a  hearing,  requiring  an  extension  of time for  processing  the
request for review, the Plan Administrator shall notify the claimant in writing,
prior  to the end of the  initial  60 day  review  period,  of the need for such
extension,  and shall post its final  decision to the claimant by  registered or
certified  mail not later than 120 days after the date on which the  request for
review was received by the Plan  Administrator.  Such final decision shall be in
writing,  shall  be  written  in a manner  calculated  to be  understood  by the
claimant, and shall fully set forth the reason or reasons for the decision, with
specific  references  to the  pertinent  provisions  of the Plan upon  which the
decision was based.

     To the extent that a named  fiduciary,  as this term is defined under ERISA
Section 402(a)(2), is appointed to conduct the review procedure described above,
such named  fiduciary  shall have the same powers to interpret the Plan and make
factual  findings with respect thereto as are granted to the Plan  Administrator
under Article 11 hereof.

                                    ARTICLE 12
                            MANAGEMENT OF THE TRUST FUND

     12.1 The Trustee.  The Trust Fund shall be  administered  by United  States
Trust  Company of New York,  as Trustee,  under a trust  agreement,  and by such
additional  or successor  Trustee as may be designated by the Board of Directors
or pursuant to said trust agreement.

     12.2 The Trust  Agreement.  The Company  shall  establish a trust under the
Plan  pursuant  to which the assets of the Plan shall be held and  administered.
The terms and conditions of the trust agreement shall be determined by the Board
of  Directors  and may be  amended  by the same  from time to time  pursuant  to
Article 13, provided that at all times it must be impossible  under the terms of
said  agreement  for any part of the trust  corpus or income to be used for,  or
diverted  to,  purposes  other than for the  exclusive  benefit of the  Members,
Former  Members  and their  spouses  and  Beneficiaries  and for  defraying  the
reasonable  expenses of administering the Trust Fund. Said trust agreement shall
be deemed to form part of this Plan,  and any and all rights or  benefits  which
may inure to any  person  under  this Plan shall be subject to all the terms and
conditions of said agreement. The Trustee shall have the exclusive authority and
discretion to manage and control the assets of the trust,  and shall exercise in
its absolute and sole  discretion the powers and duties provided under the terms
of the trust agreement, including the power to invest and reinvest the principal
and  income of the  trust,  without  the prior  authorization  or consent of the
Committee,  the Investment Committee,  the Plan Administrator,  any court or any
other person or persons.

     12.3  Compensation  and Expenses.  The  compensation of the Trustee and all
expenses  incurred  in the  administration  of the  trust  shall  be paid by the
Participating Companies.

                                    ARTICLE 13
                          AMENDMENT AND TERMINATION

     13.1 Amendment of Plan and Trust. Subject to the provisions hereinafter set
forth,  the  Company  reserves  the  right at any time and from  time to time by
action of its Board of  Directors  to modify or amend in whole or in part any or
all of the provisions of this Plan and the trust agreement  executed pursuant to
Article 12 and  delegates to the  Committee the authority to modify or amend the
Plan where such modification or amendment is either (a) necessary or appropriate
to facilitate the  administration,  management and interpretation of the Plan or
to conform the Plan  thereto,  or (b)  necessary  or  appropriate  to qualify or
maintain  the Plan and Trust as a plan and trust  meeting  the  requirements  of
sections 401(a) and 501(a) of the Code,  respectively,  or any other  applicable
section  of law and  regulations,  provided  that,  in  either  case,  any  such
modification or amendment adopted by the Committee shall not materially increase
the cost to the Participating Companies of maintaining the Plan. Notwithstanding
the  previous  sentence,  if a change in control  occurs (as  defined in Section
13.2) the provisions in Section 13.2 relative to the disposition of any balances
remaining  in the Trust Fund and the  definition  of change in  control  therein
shall  not be  subject  to any  amendment,  change,  substitution,  deletion  or
revocation  (except as may be  necessary  pursuant to clause (b) of this Section
13.1) in any respect whatsoever.  No modification or amendment may be made which
by reason thereof shall (1) deprive any Former Member or other person  receiving
a Pension, without his consent, of any benefits under the Plan to which he would
otherwise be entitled,  or (2) adversely affect the right of any Member,  in the
event that the Plan is  terminated,  to participate in the assets of the Plan at
termination to the extent and in the manner provided in this Article without his
consent,  and provided  that no such  modification  or  amendment  shall make it
possible for any part of the assets of the Plan,  except amounts  resulting from
erroneous actuarial computations, to be used for, or diverted to, purposes other
than for the  exclusive  purposes  of  providing  benefits  to  Members,  Former
Members,  their spouses or Beneficiaries,  and paying the reasonable expenses of
the Plan and the Trust as determined by the Committee, prior to the satisfaction
of all liabilities with respect to such persons under the Plan.

     13.2 Termination of Plan. The Board of Directors may terminate the Plan for
any reason at any time  (subject to the  requirements  of section 4041 of ERISA)
and any  Participating  Company may withdraw from  participation in the Plan and
discontinue contributions under the Plan for any reason at any time. If the Plan
is  terminated,  the  Trust  Fund  shall be used for  defraying  the  reasonable
expenses of the Trust Fund and for the exclusive benefit of the Members,  Former
Members and their spouses and  Beneficiaries as of the date of such termination.
In the event of the complete or partial  termination  of the Plan, the rights of
all Members,  if the Plan is  completely  terminated,  and the rights of Members
affected  by a partial  termination,  if the Plan is  partially  terminated,  to
benefits accrued to the date of such termination or partial termination,  to the
extent then funded, shall be nonforfeitable,  and that portion of the Trust Fund
which is  attributable  to the  interests of such Members and their  spouses and
Beneficiaries,  as determined by the Committee  with the advice of the actuaries
of the Plan, shall be held for the benefit of such Members and shall be used for
the exclusive benefit of such Members, their spouses and Beneficiaries and shall
be applied in accordance with the provisions of this Article.

     A complete  termination of the Plan shall be made in accordance with either
the  requirements  and  procedures  for a  "standard  termination"  set forth in
section  4041(b) of ERISA or the  requirements  and  procedures  for a "distress
termination" set forth in section 4041(c) of ERISA.

     In the  event  of  the  complete  termination  of the  Plan,  all  expenses
attributable to the liquidation and distribution of the Trust Fund shall be paid
or provided  for out of the assets of the Trust  Fund.  After the payment or the
provision  for the payment of such  expenses has been  completed,  the remaining
assets of the Trust Fund (subject to the limitations  prescribed in Section 13.3
below, if applicable) shall be converted into cash and shall be allocated to and
among  and  paid  over  to  the  Members,  Former  Members,  their  spouses  and
Beneficiaries  in accordance with the  requirements of sections 4041 and 4044 of
ERISA and the regulations  thereunder in complete  discharge of all liability of
such Participating Company or Companies and the Trustee for the benefits payable
under this Plan.  After the complete  satisfaction  of all  liabilities  to such
Members, Former Members, their spouses and Beneficiaries, any balances remaining
in the Trust Fund because of erroneous actuarial  computations shall be returned
to the  Participating  Company  or  Companies  in  proportion  to  its or  their
aggregate contributions to the Trust Fund; provided,  however, that in the event
the Plan is  terminated  within four years  following a "change in control"  (as
such term is defined  below) any surplus  balances  remaining  in the Trust Fund
shall not be returned to the  Participating  Company or  Companies  but shall be
immediately  contributed  to the  United  States  Trust  Company of New York and
Affiliated Companies Executive  Compensation Trust to be used for the benefit of
employees participating in the Retirement Plan.

     For purpose of this Section 13.2 "change in control"  means that any of the
following  events has occurred after the "Closing  Date",  as defined in Section
1.2 of the Merger Agreement:

          (a)  twenty  percent  (20%)  or  more  of  the  common  shares  of the
     Corporation,  as hereinafter  defined,  has been acquired by any person (as
     defined by Section  3(a)(9) of the  Securities  Exchange Act of 1934) other
     than directly from the Corporation;

          (b) there has been a merger or equivalent  combination after which 49%
     or more of the voting stock of the surviving corporation is held by persons
     other than former shareholders of the Corporation; or

          (c)  twenty  percent  (20%)  or  more  of  the  directors  elected  by
     shareholders  to the Board of Directors of the  Corporation are persons who
     were not nominated by management in the most recent proxy  statement of the
     Corporation;

provided,  however,  that  notwithstanding  anything  herein to the  contrary no
change in control  shall be deemed to have occurred to the extent that the Board
of Directors  otherwise  directs by  resolution  adopted  prior to the change in
control,  or not  later  than  45 days  after  the  change  in  control  (if the
percentage  of common shares  acquired or directors  elected under clause (a) or
(c) of the  definition  of change in control  shall be at least  twenty  percent
(20%) but less than  twenty-five  percent (25%)).  For these purposes,  the term
"Corporation" shall mean U.S. Trust Corporation.

     In the event of a partial  termination of the Plan, the benefits payable to
or on behalf of all affected  Members  shall be computed and paid in  accordance
with the  provisions  of Articles 5, 6, 7 and 8, except  that,  if such  partial
termination is attributable to a withdrawal from  participation in the Plan by a
Participating  Company under  Section  14.2,  then the interests of the affected
Members employed by such Company, and their spouses and Beneficiaries,  shall be
provided for as described in Section 14.2.

     13.3  Special  Limitation  for Highly  Compensated  Employees.  The benefit
payable under the Plan to, or with respect to, any Highly Compensated  Employee,
or any Highly  Compensated  Former  Employee,  as such terms are  defined  under
section 414(q) of the Code and the regulations  thereunder (referred to below as
an "HCE"), shall be limited as set forth below:

          (a) Each Plan Year,  the benefit  payments  made under the Plan to, or
     with respect to, any HCE, if not being paid in the form of a straight  life
     annuity,  shall be  limited  to the  payments  that would be so made if the
     benefit was being paid as an actuarially  equivalent straight life annuity.
     However,  the  preceding  sentence  shall  not  apply in any Plan Year with
     respect to which at least one of the requirements set forth in Treas.  Reg.
     Sec. 1.401(a)(4)-5(b)(3)(iv) is satisfied.

          (b) The limitation in subsection (a) above shall not apply to, or with
     respect  to, an HCE for any Plan Year  during  which such HCE is not in the
     group consisting of the top 25 nonexcludable Employees and former Employees
     when  ranked  on the  basis of  compensation  for such Plan Year or for any
     prior Plan Year. The terms "nonexcludable" and "compensation"  appearing in
     the preceding sentence shall have the same meaning as such terms have under
     section 401(a)(4) of the Code and the Treasury regulations thereunder.

          (c) Upon the  termination of the Plan,  the benefit  payable under the
     Plan to, or with  respect to, any HCE shall be limited to a benefit that is
     not  discriminatory  under  section  401(a)(4) of the Code and the Treasury
     regulations thereunder.

                                    ARTICLE 14
                           OTHER PARTICIPATING COMPANIES

     14.1 Additional  Participating  Companies.  With the written consent of the
Committee,  any  Affiliated  Company  may  become  a  Participating  Company  by
delivering  to the  Committee  and the Trustee a certified  copy of a resolution
duly adopted by its board of directors to the effect that it (a) adopts the Plan
as then in effect and as it may  thereafter be amended by the Board of Directors
and (b) agrees to become a party to the trust  agreement  under which the assets
of the Plan are held in accordance  with Article 12. If any  Affiliated  Company
becomes a  Participating  Company  in  accordance  with the  provisions  of this
Section  14.1,  to  the  extent  determined  by the  Committee,  all  prior  and
contemporaneous  service performed as an Employee of such Participating  Company
shall be credited on a cumulative  basis for all  purposes of the Plan,  and the
prior service of a Member whose employment is transferred from one Participating
Company to another shall be credited for all purposes of the Plan.

     14.2 Withdrawal of Participating  Company. Any Participating Company, other
than the Company,  may withdraw  from  participation  in the Plan at any time by
delivering  to the  Committee  and the Trustee a certified  copy of a resolution
duly  adopted by its board of directors  terminating  its  participation  in the
Plan.  If the result of any  merger,  consolidation,  sale of property or stock,
separation,  reorganization or liquidation of any Participating  Company,  other
than the Company, is that such Participating  Company ceases to be an Affiliated
Company, such Company shall be treated as having withdrawn from participation in
the Plan.

     In the  event  of any  withdrawal  from  participation  in  the  Plan  by a
Participating  Company  hereunder,  the  Committee  shall  direct the Trustee to
segregate  and  hold in  further  trust  that  portion  of the  Trust  Fund,  as
determined by the Committee with the advice of the actuaries of the Plan,  which
is  attributable  to the interests in the Plan of the Members and Former Members
employed  by such  withdrawing  Participating  Company  and  their  spouses  and
Beneficiaries, subject to the following conditions:

          (a) If such withdrawing  Participating  Company elects to continue the
     Plan, as adopted by it, on an independent  basis,  then the Committee shall
     direct the Trustee to hold such  segregated  portion of the Trust Fund in a
     separate trust under the same terms and  conditions as the trust  agreement
     executed  pursuant  to Article  12. The Plan,  as then in effect,  shall be
     continued as a separate plan for the  exclusive  benefit of the Members and
     Former Members employed by such withdrawing Participating Company and their
     spouses and  Beneficiaries,  and the board of directors of such withdrawing
     Participating  Company  shall  succeed  to all the powers and duties of the
     Board of Directors, including the appointment of a Committee thereunder.

          (b) If the Plan, as adopted by such withdrawing Participating Company,
     is merged into, or consolidated  with,  another employee benefit plan which
     is qualified  under section 401(a) of the Code, the Committee  shall direct
     the Trustee to transfer the above described segregated portion of the Trust
     Fund, either in cash or kind, to the trust established or to be established
     under such plan,  and such  transfer  shall be a complete  discharge of the
     responsibility of the Trustee and the Committee therefor.

          (c) If the Plan, as adopted by such withdrawing Participating Company,
     is terminated,  then the above  described  segregated  portion of the Trust
     Fund shall be applied to the  benefit  of the  Members  and Former  Members
     employed by such  withdrawing  Participating  Company and their spouses and
     Beneficiaries in the manner prescribed in Sections 13.2 to 13.5.

     14.3 Successor Companies. Any corporation which succeeds to the business or
assets of the Company shall,  upon such succession and without any action by any
person, (a) be treated as having adopted this Plan and (b) have the same rights,
and have the same duties,  responsibilities and obligations, as are conferred or
assigned to the Company hereunder.  Any corporation which succeeds to all or any
part of the  business  or assets of any  Participating  Company,  other than the
Company,  may become a  participant  hereunder  only if it is  eligible to do so
under Section 14.1 and then only in the manner described therein.

                                    ARTICLE 15
                               TOP HEAVY PROVISIONS

     15.1 Top Heavy Plan Requirements.  If the Plan becomes a Top Heavy Plan for
any Plan Year, the following  provisions shall apply,  notwithstanding any other
provision of this Plan to the contrary:  the minimum vesting  requirement  under
Section 15.3,  the minimum  benefit  requirement  under  Section  15.4,  and the
limitation on compensation under Section 15.5.

     15.2  Determination  of Top Heavy Status.  The Plan's status as a Top Heavy
Plan shall be determined in accordance with the following rules and definitions:

          (a) The Plan shall be a "Top  Heavy  Plan" for any Plan Year in which,
     as of the Determination Date for that year, the sum of the Present Value of
     Accrued Benefits and the Aggregate Accounts of all Key Employees under this
     Plan and all other plans of an Aggregation  Group exceeds 60% of the sum of
     the Present Value of Accrued Benefits and the Aggregate Accounts of all Key
     and Non-Key Employees under this Plan and all such other plans.

          (b) The Plan  shall be a "Super  Top Heavy  Plan" for any Plan Year in
     which it would be treated as a Top Heavy Plan under subsection (a) if "90%"
     were substituted for "60%" therein.

          (c) The "Determination Date" for any Plan Year shall mean (1) the last
     day of the preceding  Plan Year, or (2) in the case of the first Plan Year,
     the last day of such Plan Year. When  aggregating  this Plan with any other
     plans, the Present Value of Accrued  Benefits and Aggregate  Accounts under
     such  other  plans  as of the  Determination  Date  in  question  shall  be
     calculated  as of the  determination  dates  (within the meaning of section
     416(g)(4)(C)  of the Code)  for  those  plans  that  fall  within  the same
     calendar year as the Determination Date in question.

          (d) "Aggregate Account" shall mean, with respect to each Employee, the
     value of all individual  accounts maintained on the Employee's behalf under
     a defined  contribution  plan  maintained  by the  Employer,  calculated in
     accordance with the requirements of Treas. Reg. Sec. 1.416-1, T-24.

          (e) "Present Value of Accrued Benefit" shall mean, in the case of this
     Plan or another  defined  benefit  plan  maintained  by the  Employer,  the
     present  value of an  Employee's  accrued  benefit  under this Plan or such
     other plan, as determined in  accordance  with the  requirements  of Treas.
     Reg. Sec. 1.416-1, T-25 to T-28 and as hereinafter provided.  The actuarial
     assumptions set forth in Section 2.17 shall be used in determining  benefit
     values for these purposes,  and the same actuarial  assumptions shall apply
     in  determining  benefit  values  under  this Plan and each  other  defined
     benefit plan taken into  consideration for top heavy purposes.  The Present
     Value of  Accrued  Benefit as of a  Determination  Date in the case of this
     Plan,  or as  of a  determination  date  (within  the  meaning  of  section
     416(g)(4)(C) of the Code) in the case of another plan,  shall be determined
     as of the most  recent  valuation  date for this Plan,  or such other plan,
     within  the  12  month  period   ending  on  the   Determination   Date  or
     determination  date, as  applicable.  Such valuation date shall be the same
     date used by this Plan, or such other plan,  for  computing  Plan costs for
     minimum funding,  regardless of whether a valuation is actually  performed.
     The Present Value of Accrued  Benefit shall be determined  for each Non-Key
     Employee under the uniform method of benefit  accrual used by all qualified
     defined benefit plans of the Employer,  or, if there is no such method,  as
     if benefits  accrued not more rapidly  than under the slowest  accrual rate
     permitted under section 411(b)(1)(C) of the Code.

          (f) "Aggregation Group" shall mean either a Required Aggregation Group
     or, if the Employer so elects, a Permissive Aggregation Group as determined
     below:

               (1) A "Required Aggregation Group" consists of (i) each qualified
          plan  maintained  by the  Employer in which,  during the 5 year period
          ending on the  Determination  Date, at least one  participant is a Key
          Employee,  and (ii) each other  qualified plan of the Employer  which,
          during the period  described in (i), enables any plan described in (i)
          to meet the requirements of section 401(a)(4) or 410 of the Code.

          Each plan in the Required  Aggregation Group shall be considered a Top
     Heavy Plan if the Required  Aggregation Group is a Top Heavy Group. No plan
     in the Required  Aggregation  Group will be  considered a Top Heavy Plan if
     the Required Aggregation Group is not a Top Heavy Group.

               (2) A "Permissive Aggregation Group" consists of (i) the Required
          Aggregation  Group  and (ii) any  other  qualified  plan the  Employer
          elects to include,  provided the  resulting  group,  taken as a whole,
          would continue to satisfy the provisions of sections 401(a)(4) and 410
          of the Code.

          In the case of a  Permissive  Aggregation  Group,  only a plan that is
     part of the Required Aggregation Group shall be considered a Top Heavy Plan
     if the Permissive  Aggregation  Group is a Top Heavy Group.  No plan in the
     Permissive  Aggregation  Group shall be  considered a Top Heavy Plan if the
     Permissive Aggregation Group is not a Top Heavy Group.

               (3) A plan  that has been  terminated  during  the 5 year  period
          ending  on the  Determination  Date for the  Plan  Year  shall  not be
          excluded  from  an   Aggregation   Group  solely  on  account  of  the
          termination.

          (g) "Top Heavy Group" means an Aggregation  Group in which,  as of the
     Determination Date, the sum of:

               (1) the Present Value of Accrued  Benefits of Key Employees under
          all defined benefit plans included in the group, and

               (2) the  Aggregate  Accounts of Key  Employees  under all defined
          contribution  plans included in the group exceeds 60% of a similar sum
          determined for all Key and Non-Key Employees.

          (h) For purposes of this Section  15.2,  the Present  Value of Accrued
     Benefits and/or  Aggregate  Accounts of any individual shall be disregarded
     if such  individual  (1) has not  performed  any  services for the Employer
     during  the 5 year  period  ending on the  Determination  Date for the Plan
     Year,  or (2) had been a Key  Employee  for any Plan Year but  subsequently
     became a Non-Key Employee for any Plan Year. Further,  the Present Value of
     Accrued  Benefit  and/or  Aggregate  Account of any Employee under any plan
     taken  into  account  for top  heavy  purposes  shall be  increased  by the
     aggregate  amount of  distributions  made with respect to such  Employee by
     such plan during the 5 year period ending on the Determination Date for the
     Plan Year.  Rollovers  shall be taken into account in computing the Present
     Value of Accrued Benefits and Aggregate  Accounts as required under section
     416(g)(4)(A) of the Code and the Treasury regulations thereunder.

          (i) For purposes of this Section  15.2,  wherever  required by section
     416  of  the  Code  and  the  Treasury  regulations  thereunder,  the  term
     "Employer" includes all entities aggregated with the Employer under section
     414(b), (c), (m) or (o) of the Code and the regulations thereunder.

     15.3 Minimum Vesting Requirement. Any Member who earns at least one Hour of
Service during a Top Heavy Plan Year, or during any Plan Year thereafter,  shall
have a nonforfeitable right to his Pension upon the completion of three Years of
Service.

     15.4 Minimum Benefit Requirement. If the Plan becomes a Top Heavy Plan, the
following minimum benefit requirement shall be met:

          (a) For any Plan Year which is or  follows a Top Heavy Plan Year,  the
     accrued benefit of each Non-Key  Employee who is a Member shall not be less
     than a minimum accrued benefit  determined  under section  416(c)(1) of the
     Code and the  Treasury  regulations  thereunder.  Generally,  such  minimum
     accrued  benefit  shall be derived from  Employer  contributions  and, when
     expressed as a straight  life annuity  which is payable  annually and which
     commences at the Non-Key  Employee's Normal Retirement Date, shall be equal
     to  the  product  of  (1)  the  Non-Key   Employee's   annual  Section  415
     Compensation  averaged over the consecutive  Plan Years (not exceeding five
     (5) years) which produce the highest  average and (2) the lesser of (i) two
     percent (2%)  multiplied by the number of the Non-Key  Employee's  Years of
     Service or (ii) 20%.

          (b) For  purposes of this  Section,  a Non-Key  Employee  who is not a
     Member solely because (1) his  Compensation or Section 415  Compensation is
     below a stated amount or (2) he was not employed on a specific date will be
     considered to be a Member.

          (c) For  purposes  of this  Section,  Years of Service and Section 415
     Compensation shall be disregarded to the maximum extent permitted by law.

          (d) If a  Non-Key  Employee  participates  in this  Plan and a defined
     contribution  plan included in a Required  Aggregation Group which is a Top
     Heavy  Group,  the minimum  benefit  requirement  shall be met by this Plan
     unless  an  amount  equal  to or  greater  than  the  minimum  contribution
     described in Treas.  Reg. Sec.  1.416-1,  Section M-12 has been contributed
     for such Non-Key Employee under said defined contribution plan.

          (e) In applying the limitation described in section 415(e) of the Code
     to the Plan, in each Super Top Heavy Plan Year beginning  before January 1,
     2000,   "1.0"  shall  be  substituted  for  "1.25"  in  applying   sections
     415(e)(2)(B) and 415(e)(3)(B) of the Code.  Further, in each Top Heavy Plan
     Year,  "1.0" shall be  substituted  for "1.25" as provided in the preceding
     sentence unless benefits or contributions at least equal to those described
     in Treas.  Reg.  Sec.  1.416-1,  Section  M-14 are provided for the Non-Key
     Employee by this Plan or by any defined contribution plan which is included
     with this Plan in a Required Aggregation Group which is a Top Heavy Group.

     15.5 Limitation on Compensation and Section 415 Compensation.  For each Top
Heavy Plan Year beginning  before January 1, 1989,  Compensation and Section 415
Compensation in excess of $200,000 shall be disregarded.  In addition,  for each
Plan Year,  Section 415 Compensation  shall be subject to the section 401(a)(17)
limitation described in Section 2.10.

     15.6 Other  Definitions.  As used in this  Article 15 the  following  terms
shall have the following meanings:

          (a) "Key  Employee"  shall mean an Employee  treated as a key employee
     under section 416(i) of the Code and the Treasury regulations thereunder.

          (b)  "Non-Key  Employee"  shall  mean  any  Employee  who is not a Key
     Employee.

          (c) "Section 415  Compensation"  shall mean compensation as defined in
     section 415(c)(3) of the Code and Treas. Reg. Sec. 1.415-2(d)(1),  (2), (3)
     and (4).

          (d) "Top Heavy  Plan Year"  shall mean any Plan Year in which the Plan
     is Top Heavy under Section 15.2(a).

          (e) "Super Top Heavy Plan Year"  shall mean any Plan Year in which the
     Plan is Top Heavy under Section 15.2(b).

     15.7  Applicability.  In the event that Congress should provide by statute,
or the Treasury  Department or the Internal  Revenue  Service  should provide by
regulation  or  ruling,  that  the  provisions  of this  Article  are no  longer
necessary to meet the qualification  requirements of section 401(a) of the Code,
this Article shall become void, and shall no longer apply, without the necessity
of any amendment to the Plan.

                                    ARTICLE 16
                                   CONSTRUCTION

     16.1 Plan  Intended  to Qualify.  The Plan,  as amended  and  restated,  is
intended   to   continue  to  qualify   under   section   401(a)  of  the  Code.
Notwithstanding  Section 13.1,  the Company  reserves the right to further amend
the Plan by action of the Board of Directors, retroactively if necessary, to the
extent  necessary to retain such  qualified  status without regard to the effect
such amendment may have upon the vested interest of any Member.

     16.2  Governing  Law.  The  Plan  shall be  governed  by and  construed  in
accordance  with the  provisions  of ERISA and,  to the extent that ERISA is not
applicable, with the laws of the State of New York.

     16.3 Words and  Headings.  As used herein,  the  masculine  gender shall be
deemed to refer to the  feminine,  and the  singular  person  shall be deemed to
refer to the plural, wherever appropriate.  The subject headings and subheadings
appearing in the Plan are inserted for  convenience  and reference  only, and in
the event of any conflict  between the text of any provision of the Plan and the
heading thereof, the text shall control.

     Executed this 7th day of November,  2001, but effective as provided
                   --------------------------
herein.

                                    U.S. TRUST CORPORATION

                                    By:       /s/ John Kirby
                                           ------------------------

                                    Title: Executive Vice President
                                           ------------------------

<PAGE>

                                     B-1
                                APPENDIX A

             U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN

             REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS

                 DESCRIPTION OF JOINT AND SURVIVOR FACTORS

If a member  elects a Joint and 100%  Survivor  Pension,  the pension  otherwise
payable as a life annuity will be multiplied by a factor of .840.  The reduction
factor will increase  (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant.  For each of the first 10 years of age  difference,
the factor will change by .007. For each of the next 10 years of age difference,
the factor  will  change by .003.  For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.

If a member  elects a Joint and 75%  Survivor  Pension,  the  pension  otherwise
payable as a life annuity will be multiplied by a factor of .875.  The reduction
factor will increase  (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant.  For each of the first 10 years of age  difference,
the  factor  will  change  by  .0055.  For  each  of the  next 10  years  of age
difference, the factor will change by .004. For each of the next 10 years of age
difference,  the factor will  change by .003.  For any years in excess of 30 the
factor will change by .001 for each such year. In no event may the factor exceed
..980.

If a member  elects a Joint and 66?%  Survivor  Pension,  the pension  otherwise
payable as a life annuity will be multiplied by a factor of .885.  The reduction
factor will increase  (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant.  For each of the first 10 years of age  difference,
the factor will change by .005. For each of the next 10 years of age difference,
the factor will change by .004. For each of the next 10 years of age difference,
the factor  will  change by .003.  For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.

If a member  elects a Joint and 50%  Survivor  Pension,  the  pension  otherwise
payable as a life annuity will be multiplied by a factor of .910.  The reduction
factor will increase  (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant.  For each of the first 10 years of age  difference,
the factor will change by .004. For each of the next 10 years of age difference,
the factor will change by .003. For each of the next 10 years of age difference,
the factor  will  change by .002.  For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.

<PAGE>

                                       B-2
                REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS

Number of Years the
Beneficiary is
Younger than the
Member
                 100%               75%                 66-2/3%            50%
--------------------------------------------------------------------------------
  0             .8400              .8750               .8850              .9100
  1             .8330              .8695               .8800              .9060
  2             .8260              .8640               .8750              .9020
  3             .8190              .8585               .8700              .8980
  4             .8120              .8530               .8650              .8940
  5             .8050              .8475               .8600              .8900
  6             .7980              .8420               .8550              .8860
  7             .7910              .8365               .8500              .8820
  8             .7840              .8310               .8450              .8780
  9             .7770              .8255               .8400              .8740
  10            .7700              .8200               .8350              .8700
  11            .7650              .8160               .8310              .8670
  12            .7600              .8120               .8270              .8640
  13            .7550              .8080               .8230              .8610
  14            .7500              .8040               .8190              .8580
  15            .7450              .8000               .8150              .8550
  16            .7400              .7960               .8110              .8520
  17            .7350              .7920               .8070              .8490
  18            .7300              .7880               .8030              .8460
  19            .7250              .7840               .7990              .8430
  20            .7200              .7800               .7950              .8400
  21            .7170              .7770               .7920              .8380
  22            .7140              .7740               .7890              .8360
  23            .7110              .7710               .7860              .8340
  24            .7080              .7680               .7830              .8320
  25            .7050              .7650               .7800              .8300
  26            .7020              .7620               .7770              .8280
  27            .6990              .7590               .7740              .8260
  28            .6960              .7560               .7710              .8240
  29            .6930              .7530               .7680              .8220
  30            .6900              .7500               .7650              .8200
  31            .6890              .7490               .7640              .8190
  32            .6880              .7480               .7630              .8180
  33            .6870              .7470               .7620              .8170
  34            .6860              .7460               .7610              .8160
  35            .6850              .7450               .7600              .8150
  36            .6840              .7440               .7590              .8140
  37            .6830              .7430               .7580              .8130
  38            .6820              .7420               .7570              .8120
  39            .6810              .7410               .7560              .8110
  40            .6800              .7400               .7550              .8100

<PAGE>

                                       B-3
                 REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS

Number of Years The
Beneficiary is
Older than the
Member
               100%               75%                66-2/3%             50%
--------------------------------------------------------------------------------
0             .8400              .8750               .8850              .9100
1             .8470              .8805               .8900              .9140
2             .8540              .8860               .8950              .9180
3             .8610              .8915               .9000              .9220
4             .8680              .8970               .9050              .9260
5             .8750              .9025               .9100              .9300
6             .8820              .9080               .9150              .9340
7             .8890              .9135               .9200              .9380
8             .8960              .9190               .9250              .9420
9             .9030              .9245               .9300              .9460
10            .9100              .9300               .9350              .9500
11            .9150              .9340               .9390              .9530
12            .9200              .9380               .9430              .9560
13            .9250              .9420               .9470              .9590
14            .9300              .9460               .9510              .9620
15            .9350              .9500               .9550              .9650
16            .9400              .9540               .9590              .9680
17            .9450              .9580               .9630              .9710
18            .9500              .9620               .9670              .9740
19            .9550              .9660               .9710              .9770
20            .9600              .9700               .9750              .9800
21            .9630              .9730               .9780              .9800
22            .9660              .9760               .9800              .9800
23            .9690              .9790               .9800              .9800
24            .9720              .9800               .9800              .9800
25            .9750              .9800               .9800              .9800
26            .9780              .9800               .9800              .9800
27            .9800              .9800               .9800              .9800
28            .9800              .9800               .9800              .9800
29            .9800              .9800               .9800              .9800
30            .9800              .9800               .9800              .9800

<PAGE>

                                       B-4
                REDUCTION FACTORS FOR CONVERTING A LIFE PENSION
                         TO A CERTAIN AND LIFE PENSION

       5 Year Certain    10 Year              5 Year Certain       10 Year
          and Life     Certain and               and Life        Certain and
Age                       Life         Age                          Life
--------------------------------------------------------------------------------

49          .996          .988          68         .969             .890
50          .995          .985          69         .967             .880
51          .994          .982          70         .965             .870
52          .993          .979          71         .960             .855
53          .992          .976          72         .955             .840
54          .991          .973          73         .950             .825
55          .990          .970          74         .945             .810
56          .989          .965          75         .940             .795
57          .988          .960          76         .930             .775
58          .987          .955          77         .920             .755
59          .986          .950          78         .910             .735
60          .985          .945          79         .900             .715
61          .983          .940          80         .890             .695
62          .981          .935          81         .875             .673
63          .979          .930          82         .860             .651
64          .977          .925          83         .845             .629
65          .975          .920          84         .830             .607
66          .973          .910          85         .815             .585
67          .971          .900

Description of Factors:

     If a member  elects  the 5 year  certain  and life  pension  at age 65, the
amount  otherwise  payable as a life pension will be  multiplied  by a factor of
..975. The reduction  factor will increase  (decrease) by .002 for each year that
the member is between age 60 and 65 (or 65 and 70) and increase by an additional
..001 for each year prior to age 60. The factor will be further reduced after age
70 as  follows:  .005 for each year from 70 to 75, .010 for each year from 75 to
80, and .015 for each year after 80. The factor may not exceed 1.000.

     If a member  elects  the 10 year  certain  and life  pension at age 65, the
amount  otherwise  payable as a life pension will be  multiplied  by a factor of
..920.  The reduction  factor will  increase by .005  (decrease by .010) for each
year that the member is between age 55 and 65 (or 65 and 70) and  increase by an
additional  .003 for each  year  prior to age 55.  The  factor  will be  further
reduced after age 70 as follows: .015 for each year from 70 to 75, .020 for each
year from 75 to 80,  and .022 for each year  after 80. The factor may not exceed
1.000.

<PAGE>

                                      B-5
         FACTORS TO BE APPLIED TO THE ESTIMATED SOCIAL SECURITY BENEFIT
           PAYABLE AT AGE 62 TO DETERMINE EQUIVALENT TEMPORARY ANNUITY
           PAYABLE FROM THE PLAN FROM EARLY RETIREMENT DATE TO AGE 62

<TABLE>
 Years Benefit                                                          Months
 Commences
 before age 62     0        1       2        3        4          5          6         7          8         9          10       11
 -----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>      <C>       <C>      <C>     <C>        <C>        <C>       <C>       <C>        <C>       <C>      <C>
  0             1.0000   .9925     .9850    .9775   .9700      .9625      .9550     .9475     .9400      .9325     .9250    .9175
  1              .9100   .9025     .8950    .8875   .8800      .8725      .8650     .8575     .8500      .8425     .8350    .8275
  2              .8200   .8150     .8100    .8050   .8000      .7950      .7900     .7850     .7800      .7750     .7700    .7650
  3              .7600   .7550     .7500    .7450   .7400      .7350      .7300     .7250     .7200      .7150     .7100    .7050
  4              .7000   .6950     .6900    .6850   .6800      .6750      .6700     .6650     .6600      .6550     .6500    .6450
  5              .6400   .6350     .6300    .6250   .6200      .6150      .6100     .6050     .6000      .5950     .5900    .5850
  6              .5800   .5750     .5700    .5650   .5600      .5550      .5500     .5450     .5400      .5350     .5300    .5250
  7              .5200   .5167     .5133    .5100   .5067      .5033      .5000     .4967     .4933      .4900     .4867    .4834
  8              .4800   .4767     .4733    .4700   .4667      .4633      .4600     .4567     .4533      .4500     .4467    .4434
  9              .4400   .4367     .4333    .4300   .4267      .4233      .4200     .4167     .4133      .4100     .4067    .4035
  10             .4000   .3967     .3933    .3900   .3867      .3833      .3800     .3767     .3733      .3700     .3667    .3635
  11             .3600   .3567     .3533    .3500   .3467      .3433      .3400     .3367     .3333      .3300     .3267    .3235
  12             .3200

</TABLE>
<PAGE>
<TABLE>
                                                        B-6
                                        FACTORS TO BE APPLIED TO THE ACCRUED PENSION PAYABLE
                                        AT NORMAL RETIREMENT TO DETERMINE AMOUNT OF DEFERRED
                                  VESTED PENSION BENEFIT PAYABLE BEFORE NORMAL RETIREMENT DATE

Years Benefit                                                       Months
Commences
before Normal
Retirement Date    0         1         2        3        4          5         6        7          8          9         10        11
------------------------------------------------------------------------------------------------------------------------------------
<S>              <C>       <C>       <C>     <C>       <C>       <C>       <C>       <C>        <C>        <C>       <C>      <C>
        0        1.0000    .9933     .9867   .9800     .9733     .9667     .9600     .9533      .9467      .9400     .9333    .9267
        1        .9200     .9133     .9067   .9000     .8933     .8867     .8800     .8733      .8667      .8600     .8533    .8467
        2        .8400     .8333     .8267   .8200     .8133     .8067     .8000     .7933      .7867      .7800     .7733    .7667
        3        .7600     .7533     .7467   .7400     .7333     .7267     .7200     .7133      .7067      .7000     .6933    .6867
        4        .6800     .6733     .6667   .6600     .6533     .6467     .6400     .6333      .6267      .6200     .6133    .6067
        5        .6000     .5967     .5933   .5900     .5867     .5833     .5800     .5767      .5733      .5700     .5667    .5633
        6        .5600     .5567     .5533   .5500     .5467     .5433     .5400     .5367      .5333      .5300     .5267    .5233
        7        .5200     .5167     .5133   .5100     .5067     .5033     .5000     .4967      .4933      .4900     .4867    .4833
        8        .4800     .4767     .4733   .4700     .4667     .4633     .4600     .4567      .4533      .4500     .4467    .4433
        9        .4400     .4367     .4333   .4300     .4267     .4233     .4200     .4167      .4133      .4100     .4067    .4033
       10        .4000

</TABLE>
<PAGE>

                                       B-7
               U.S. Trust Corporation Employees' Retirement Plan
   Extended Early Retirement Reduction Factors For Terminated Vested Members

  Age               Factor                              Age              Factor
   20               0.0232                               38              0.0866
   21               0.0249                               39              0.0935
   22               0.0268                               40              0.1010
   23               0.0287                               41              0.1092
   24               0.0309                               42              0.1182
   25               0.0332                               43              0.1280
   26               0.0356                               44              0.1386
   27               0.0383                               45              0.1503
   28               0.0412                               46              0.1631
   29               0.0443                               47              0.1772
   30               0.0476                               48              0.1927
   31               0.0513                               49              0.2097
   32               0.0552                               50              0.2285
   33               0.0594                               51              0.2492
   34               0.0640                               52              0.2722
   35               0.0690                               53              0.2977
   36               0.0744                               54              0.3260
   37               0.0802                               55              0.4000

<PAGE>

                                      C-1
                                 APPENDIX B

              U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN

                 PARTICIPATING COMPANIES AS OF NOVEMBER 2001

     U.S. Trust Corporation
     United States Trust Co. International Corp.
     United States Trust Company of New York
     U.S. Trust Mortgage Service Company
     U.S. Trust Company of Delaware
     U.S. Trust Company, National Association
     U.S. Trust Company of New Jersey
     UST Fiduciary Services Ltd.
     UST Financial Services Corp.
     UST Securities Corporation
     U.S. Trust Company of Texas, National Association
     U.S. Trust Company of Florida Savings Bank
     U.S. Trust Company
     U.S. Trust Technology and Support Services, Inc.
     CTC Consulting, Inc.
     U.S. Trust Company of North Carolina

<TABLE>

                                                  SUMMARY OF BENEFIT PROVISIONS RELATING TO
                                                         MERGERS AND ACQUISITIONS

                                      Prior Service counts as      Prior Service counts as        Prior Service counts as
Acquisition                              Credited Service?             Vesting Service?             Eligibility Service
<S>                                   <C>                          <C>                            <C>
Capital Trust Company                           No                          Yes(c)                          Yes
McMurrey                                        No                            No                             No
Maier & Siebel                                  No                       Yes(a); (c)                       Yes(a)
Wood Island                                     No                       Yes(a); (c)                       Yes(a)
Radnor                                          No                       Yes(a); (c)                       Yes(a)
North Carolina Trust                            No                            No                             No
Charles Schwab (as defined in                   No                       Yes(b); (c)                       Yes(b)
Section 2.6)
Resource Companies, Inc.                        No                          Yes(c)                          Yes

</TABLE>

          (a) This provision is not contained in the purchase  agreement but was
     agreed to during final negotiations.
          (b) This provision  applies only to Employees who transfer  employment
     directly to a Participating Company.
          (c) Vesting Service is used in the calculation of the Rule of 80.EXHIBIT 10.238

                                 $1,200,000,000
                                CREDIT AGREEMENT
                              (364-DAY COMMITMENT)
                            dated as of June 22, 2001

                                      Among

                         THE CHARLES SCHWAB CORPORATION

                                       and

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                                       and

                  THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

                                       and

                      CITICORP USA, INC. and BANK ONE, NA,
                            as Co-Syndication Agents

                                       and

                                 COMMERZBANK AG

                                       and

                      WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                           as Co-Documentation Agents

                                       and

                         BANC OF AMERICA SECURITIES LLC,
                   as Sole Lead Arranger and Sole Book Manager

<PAGE>

                                Table of Contents

                                                                            Page

1.       DEFINITIONS  1

2.       THE CREDIT FACILITY..................................................13

         2.1      The Revolving Credit Facility...............................13
         2.2      Term Loan Facility..........................................13
         2.3      Evidence of Borrowing/Promissory Notes......................14
         2.4      Making of Revolving Loans and Term Loans, Borrowings;
                  Interest Periods; Notice....................................14
         2.5      Conversion and Continuation Elections.......................15
         2.6      Interest Periods............................................17
         2.7      Interest Rates..............................................17
         2.8      Substitute Rates............................................18
         2.9      Fees........................................................19
         2.10     Reduction of Credit.........................................19

<PAGE>

         2.11     Termination Date; Extensions................................20
         2.12     Payments by the Lenders to the Agent........................20
         2.13     Sharing of Payments, Etc....................................21
         2.14     Computation of Fees and Interest............................21

3.       PAYMENT.     22

         3.1      Repayment...................................................22
         3.2      Method of Payment...........................................22
         3.3      Optional Prepayment.........................................22
         3.4      Taxes/Net Payments..........................................22
         3.5      Illegality..................................................23
         3.6      Increased Costs and Reduction of Return.....................24
         3.7      Funding Losses..............................................25
         3.8      Certificates of Lenders.....................................25
         3.9      Substitution of Lenders.....................................25
         3.10     Survival....................................................26

4.       CONDITIONS.  26

         4.1      Conditions Precedent to the Effectiveness of this
                    Agreement.................................................26
         4.2      Conditions Precedent to Revolving Loans and Term Loans......27

5.       REPRESENTATIONS AND WARRANTIES.......................................28

         5.1      Organization and Good Standing..............................28
         5.2      Corporate Power and Authority...............................28
         5.3      Enforceability..............................................28
         5.4      No Violation of Laws or Agreements..........................28
         5.5      No Consents.................................................28
         5.6      Financial Statements........................................29
         5.7      Broker Subsidiary Licenses, Etc.............................29
         5.8      Broker Subsidiary/Broker Registration.......................29
         5.9      Broker Subsidiary/SIPC......................................29
         5.10     Taxes.......................................................29
         5.11     ERISA.......................................................29
         5.12     No Extension of Credit for Default Remedy/Hostile
                    Acquisition...............................................29
         5.13     Use of Proceeds/Margin Regulations..........................30
         5.14     Authorized Persons..........................................30
         5.15     Material Contracts..........................................30
         5.16     Litigation..................................................30
         5.17     Investment Company..........................................30

6.       AFFIRMATIVE COVENANTS................................................30

         6.1      Notice of Events of Default.................................30
         6.2      Financial Statements........................................30
         6.3      Insurance...................................................31
         6.4      Books and Records...........................................31
         6.5      Change in Business..........................................31

7.       NEGATIVE COVENANTS...................................................31

         7.1      Net Capital.................................................31
         7.2      Minimum Tangible Net Worth..................................31
         7.3      Merger/Disposition of Assets................................31
         7.4      Broker Subsidiary Indebtedness..............................32
         7.5      Indebtedness Secured by Subsidiary Stock....................32
         7.6      Liens and Encumbrances......................................32

8.       EVENTS OF DEFAULT....................................................33

         8.1      Defaults....................................................33
         8.2      Remedies....................................................34

9.       THE AGENT.   35

         9.1      Appointment and Authorization...............................35
         9.2      Delegation of Duties........................................35
         9.3      Liability of Agent..........................................35
         9.4      Reliance by Agent...........................................36
         9.5      Notice of Default...........................................36
         9.6      Credit Decision.............................................36
         9.7      Indemnification of Agent....................................37
         9.8      Agent in Individual Capacity................................37
         9.9      Successor Agent.............................................37
         9.10     Withholding Tax.............................................38
         9.11     Co-Agents...................................................39

10.      MISCELLANEOUS........................................................40

         10.1     Amendments and Waivers......................................40
         10.2     Notices.....................................................40
         10.3     No Waiver-cumulative Remedies...............................41
         10.4     Costs and Expenses..........................................41
         10.5     Borrower Indemnification....................................42
         10.6     Payments Set Aside..........................................43
         10.7     Successors and Assigns......................................43
         10.8     Assignments, Participations etc.............................43
         10.9     Confidentiality.............................................45
         10.10    Notification of Addresses, Lending Offices, Etc.............46
         10.11    Counterparts................................................46
         10.12    Severability................................................46
         10.13    No Third Parties Benefited..................................46
         10.14    Governing Law and Jurisdiction..............................46
         10.15    Waiver of Jury Trial........................................47
         10.16    Entire Agreement............................................47
         10.17    Headings....................................................47

<PAGE>

CHICAGO 166030v7 46715-01230

SCHEDULES:

Schedule 1 - Lenders' Commitments
Schedule 2 - List of Borrowing Agreements
Schedule 6.2 - Compliance Certificate
Schedule 10.2 - Notices

EXHIBITS:

Exhibit A-1 - Revolving Note
Exhibit A-2 - Term Note
Exhibit B - Borrowing Advice
Exhibit C - Notice of Conversion/Continuation
Exhibit D - Commitment and Termination Date Extension Request
Exhibit E - Borrower's Opinion of Counsel
Exhibit F - Form of Notice of Assignment and Acceptance

<PAGE>

                      CREDIT AGREEMENT (364-DAY COMMITMENT)

   THIS CREDIT AGREEMENT (364-DAY COMMITMENT) ("this Agreement") is entered into
as  of  June  22,  2001,  among  The  Charles  Schwab  Corporation,  a  Delaware
corporation (the "Borrower"),  the several  financial  institutions from time to
time party to this Agreement  (collectively  the "Lenders";  individually each a
"Lender")  and Bank of America,  N.A., as  administrative  agent for the Lenders
(the "Agent").

   WHEREAS, the Lenders are willing to make from time to time Revolving Loans to
the Borrower through June 21, 2002, and to make Term Loans to the Borrower on or
before June 21, 2002,  and maturing no later than June 20, 2003,  upon the terms
and subject to the conditions set forth in this Agreement.

   NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants herein contained, the parties hereto agree as follows:

1.    DEFINITIONS.  The following terms have the following meanings:

      Affiliate:  As  to  any  Person,  any  other  Person  which,  directly  or
         indirectly,  is in control  of, is  controlled  by, or is under  common
         control with, such Person.  A Person shall be deemed to control another
         Person if the controlling Person possesses, directly or indirectly, the
         power to direct or cause the direction of the  management  and policies
         of  the  other  Person,   whether   through  the  ownership  of  voting
         securities, membership interests, by contract, or otherwise.

      Agent:  Bank of America in its  capacity as  administrative  agent for the
         Lenders hereunder and any successor agent appointed under Section 9.9.

      Agent-Related  Persons:  Bank of America and any successor agent appointed
         under  Section  9.9,  together  with Bank of America's  Affiliate,  the
         Arranger,   and  the  officers,   directors,   employees,   agents  and
         attorney-in-fact of such Persons and Affiliate.

      Agreement: This Credit Agreement.

      Agent's  Payment  Office:  The  address  for  payments  set  forth  on the
         signature  page hereto in relation to the Agent,  or such other address
         as the Agent may from time to time specify.

      Applicable  Margin:  (i) with respect to Federal Funds Rate Loans,  0.40%;
         (ii) with  respect to CD Rate Loans,  0.50%;  and (iii) with respect to
         Eurodollar Rate Loans, 0.40%.

      Arranger: Banc of America Securities LLC.

      Assessment  Rate:  For any  Interest  Period for any Loan for which the CD
         Rate has been selected, the assessment rate per annum (adjusted upward,
         if necessary,  to the nearest  1/100 of 1%)  determined by the Agent on
         the first day of such Interest  Period for determining the then current
         annual  assessment  payable by Lenders to the Federal Deposit Insurance
         Corporation  (or any  successor  thereto)  for such  Corporation's  (or
         successor's)  insuring  U.S.  dollar  time  deposits of a Lender in the
         United States. The CD Rate shall be adjusted automatically on and as of
         the effective date of any change in the Assessment Rate.

      Assignee: Has the meaning specified in Section 10.8.

      Attorney Costs: Without duplication, (1) all fees and disbursements of any
         law firm or  other  external  counsel,  and (2) the  allocated  cost of
         internal legal services and all disbursements of internal counsel.

      Bank of America: Bank of America, N.A., a national banking association.

      Bankruptcy  Code:   The  Federal   Bankruptcy   Reform  Act  of  1978  (11
         U.S.C.ss.101, et seq.).

      Base Rate:  For any day,  the  higher  of:  (a) 0.50% per annum  above the
         Federal Funds Rate; and (b) the rate of interest in effect for such day
         as  publicly  announced  from  time to time by Bank of  America  as its
         "Prime  Rate".  The "Prime Rate" is a rate set by Bank of America based
         upon various  factors  including  Bank of  America's  costs and desired
         return, general economic conditions and other factors, and is used as a
         reference point for pricing some loans,  which may be priced at, above,
         or below such announced rate. Any change in such rate announced by Bank
         of America  shall take  effect at the  opening of  business  on the day
         specified in the public announcement of such change.

      Base Rate Loan: A Revolving Loan or Term Loan that bears interest based on
         the Base Rate.

      Borrowing:  A borrowing  hereunder  consisting of Revolving  Loans or Term
         Loans  of the same  Type  made to the  Borrower  on the same day by the
         Lenders under Section 2 and, other than in the case of a Base Rate Loan
         or Federal Funds Rate Loan, having the same Interest Period.

      Borrowing Advice:  A written  request made by the Borrower with respect to
         any  Loan  substantially  in the  form  of  Exhibit  B  specifying  the
         information required in Section 2.4 hereof and executed by the Borrower
         from time to time.

      Borrowing Agreements: The credit agreement(s) between the Borrower and the
         lenders listed in Schedule 2.

      Borrowing Date: Any date on which a Borrowing occurs under Section 2.4.

      Broker Subsidiary:  Charles Schwab & Co., Inc., a California  corporation,
         and its successors and assigns.

      Business  Day:  A day other  than a  Saturday,  Sunday or any other day on
         which   commercial  banks  are  authorized  or  required  to  close  in
         California or New York and, if the applicable Business Day relates to a
         Eurodollar Rate Loan, means such a day on which dealings are carried on
         in the applicable offshore dollar interbank market.

      Capital Adequacy  Regulation:  Any guideline,  directive or requirement of
         any central  bank or other  Governmental  Authority,  or any other law,
         rule or  regulation,  whether or not  having the force of law,  in each
         case,  regarding  capital  adequacy  of any bank or of any  corporation
         controlling a bank.

      CD Rate:  For any  Interest  Period for any Loan for which the CD Rate has
         been selected or is applicable, the sum of:

            (a) the Assessment Rate for the Interest Period, plus

            (b)the rate per annum  obtained by dividing (i) the rate of interest
               per  annum  determined  by  the  Agent  to be  (aa)  the  average
               (adjusted upward,  if necessary,  to the nearest 1/16 of 1%) rate
               per  annum  at which  bids  are  received  by the  Agent  for its
               certificates  of deposit as at 11:00 a.m.  New York City time (or
               as  soon  as  practicable  thereafter),  on the  first  day of an
               Interest  Period  from two or more New York City  certificate  of
               deposit dealers of recognized  standing selected by the Agent for
               the purchase at face value of such  certificates of deposit in an
               amount  comparable  to the  Loan for  which  the CD Rate has been
               selected  and  having  a  maturity  comparable  to such  Interest
               Period,  or (bb) in the  event the Agent  cannot,  without  undue
               effort, obtain rates, the certificate of deposit rate as reported
               for  the  date  of  the  Borrowing  Advice  in  "Federal  Reserve
               Statistical    Release--Selected    Interest    Rates-H.15(519)",
               published  by the  Board  of  Governors  of the  Federal  Reserve
               System,  or any  successor  publication,  under the caption  "CDs
               (Secondary Market)" having a maturity most closely  approximating
               the  conclusion  of such  Interest  Period,  by (ii) a percentage
               (expressed as a decimal)  equal to 1.00 minus the CD Rate Reserve
               Percentage.

      CD Rate Reserve Percentage: For any Interest Period for any Loan for which
         the  CD  Rate  has  been  selected  or is  applicable,  the  percentage
         (expressed  as a decimal) as  calculated by the Agent that is in effect
         on the first day of such Interest Period, as prescribed by the Board of
         Governors  of the  Federal  Reserve  System  (or  any  successor),  for
         determining  the  maximum  reserve  requirements  (including,   without
         limitation,  basic, supplemental,  marginal and emergency reserves) for
         Agent as a member of the  Federal  Reserve  System,  in  respect of new
         non-personal  time deposits in U.S. Dollars in the United States having
         a maturity  comparable to the applicable  Interest Period for said Loan
         for  which the CD Rate has been  selected  (Bank of  America's  reserve
         ratio on such time  deposits in effect on June 22, 2001 was 0%). The CD
         Rate shall be adjusted automatically on and as of the effective date of
         any change in the CD Rate Reserve Percentage.

      CD Rate Loan: A Revolving  Loan or Term Loan that bears  interest based on
         the CD Rate.

      Change  in  Control:  The  consummation  of a  reorganization,  merger  or
         consolidation  by the Borrower or the sale or other  disposition of all
         or  substantially  all  of the  assets  of the  Borrower  (a  "Business
         Combination"),  unless,  following  such Business  Combination,  (i) no
         person  or  entity  (excluding  any  corporation  resulting  from  such
         Business Combination or any employee benefit plan (or related trust) of
         the  Borrower  or  such   corporation   resulting  from  such  Business
         Combination) beneficially owns, directly or indirectly, 35% or more of,
         respectively,  the  then  outstanding  shares  of  common  stock of the
         corporation  resulting  from such Business  Combination or the combined
         voting  power  of  the  then  outstanding  voting  securities  of  such
         corporation  (except to the extent that such ownership existed prior to
         the Business Combination);  and (ii) at least a majority of the members
         of the  board of  directors  of the  corporation  resulting  from  such
         Business  Combination  were  members of the board of  directors  of the
         Borrower as of the time of the action of the board of  directors of the
         Borrower providing for such Business Combination.

      Closing Date:  The date (not before June 22, 2001) on which all conditions
         precedent set forth in Section 4 are satisfied or waived by all Lenders
         or, in the case of subsection 4.1(g),  waived by the person entitled to
         receive such payment.

      Code: The  Internal  Revenue  Code of 1986,  as amended,  and  Regulations
         promulgated thereunder.

      Commitment: Has the meaning specified in Section 2.1.

      Commitment Fee: Has the meaning specified in subsection 2.9(b).

      Consolidated Tangible Net Worth:  Means, with respect to any Person, as of
         any date of  determination,  all amounts that would, in accordance with
         GAAP, be included under shareholders'  equity on a consolidated balance
         sheet of such Person as at such date,  plus any preferred  stock,  less
         all  assets  of such  Person  and  its  Subsidiaries  (determined  on a
         consolidated basis) at such date that would be classified as intangible
         assets in accordance with GAAP, including, without limitation, trade or
         service marks, franchises, trade names and goodwill.

      Controlled  Subsidiary:  Any corporation 80% of whose voting stock (except
         for any  qualifying  shares) is owned  directly  or  indirectly  by the
         Borrower.

      Conversion/  Continuation  Date:  Any date on which under Section 2.5, the
         Borrower  (a)  converts  Loans  of one  Type to  another  Type,  or (b)
         continues as Loans of the same Type,  but with a new  Interest  Period,
         Loans having Interest Periods expiring on such date.

      Credit: The  aggregate  amount of the  Commitments  of all Lenders to make
         Revolving  Loans under the  Revolving  Credit  Facility  and Term Loans
         under the Term Loan Facility in an amount not to exceed One Billion Two
         Hundred Million and no/100 Dollars ($1,200,000,000.00).

      Default: Any event or circumstance  which, with the giving of notice,  the
         lapse of time,  or both,  would  (if not  cured or  otherwise  remedied
         during such time) constitute an Event of Default.

      Dollars, dollars, and $: Each mean lawful money of the United States.

      Effective  Amount:  With respect to any Revolving  Loans and Term Loans on
         any date,  the aggregate  outstanding  principal  amount  thereof after
         giving  effect to any  Borrowings  and  prepayments  or  repayments  of
         Revolving Loans and Term Loans occurring on such date.

      Eligible  Assignee:  (i) A commercial bank organized under the laws of the
         United States, or any state thereof, and having total equity capital of
         at least  $1,000,000,000  and a senior  debt  rating  of a least "A" by
         Standard & Poor's  Corporation  or at least "A-2" by Moody's  Investors
         Service,   Inc.   or,  if  not   rated  by  either  of  the   foregoing
         organizations,  an  equivalent  rating  from  a  nationally  recognized
         statistical  rating  organization;  or (ii) a commercial bank organized
         under  the  laws  of  any  other  country  which  is a  member  of  the
         Organization for Economic  Cooperation and Development (the OECD), or a
         political  subdivision  of any such  country,  and having  total equity
         capital of at least $1,000,000,000 and a senior debt rating of at least
         "A" by  Standard  & Poor's  Corporation  or at least  "A-2" by  Moody's
         Investors  Service,  Inc.,  or, if not rated by either of the foregoing
         organizations,  an  equivalent  rating  from  a  nationally  recognized
         statistical  rating  organization;  provided  that  such bank is acting
         through a branch or agency located in the United States.

      Eurodollar Base Rate: Means, for any Interest Period:

            (a)the rate per annum equal to the rate  determined  by the Agent to
               be the  offered  rate that  appears  on the page of the  Telerate
               screen  (or any  successor  thereto)  that  displays  an  average
               British Bankers Association Interest Settlement Rate for deposits
               in  Dollars  (for  delivery  on the  first  day of such  Interest
               Period)  with  a  term   equivalent  to  such  Interest   Period,
               determined  as of  approximately  11:00  a.m.  (London  time) two
               Business Days prior to the first day of such Interest Period, or

            (b)in the event the rate referenced in the preceding  subsection (a)
               does not  appear on such page or  service or such page or service
               shall cease to be available, the rate per annum equal to the rate
               determined by the Agent to be the offered rate on such other page
               or  other  service  that  displays  an  average  British  Bankers
               Association Interest Settlement Rate for deposits in Dollars (for
               delivery on the first day of such  Interest  Period)  with a term
               equivalent   to   such   Interest   Period,   determined   as  of
               approximately 11:00 a.m. (London time) two Business Days prior to
               the first day of such Interest Period, or

            (c)in the event the rates  referenced in the  preceding  subsections
               (a) and (b) are not  available,  the rate per annum  equal to the
               average  (rounded  upward to the next 1/100th of 1%) of the rates
               of interest  per annum  notified  to the Agent by each  Reference
               Lender as the rate at which  deposits in Dollars for  delivery on
               the  first day of such  Interest  Period in same day funds in the
               approximate  amount  of the  Eurodollar  Rate  Loan  being  made,
               continued or converted by such  Reference  Lender in its capacity
               as a Lender and with a term  equivalent to such  Interest  Period
               would be offered by its Offshore Lending Office to major banks in
               the  offshore  Dollar  market at their  request at  approximately
               11:00 a.m. (London time) two Business Days prior to the first day
               of such Interest Period.

      Eurodollar Rate: The rate obtained by dividing (i) Eurodollar Base Rate by
         (ii) a  percentage  (expressed  as a  decimal)  equal to 1.00 minus the
         Eurodollar Rate Reserve Percentage.

      Eurodollar  Rate Loan: A Revolving  Loan or Term Loan that bears  interest
         based on the Eurodollar Rate.

      Eurodollar Rate Reserve  Percentage:  For any Interest Period for any Loan
         for which the Eurodollar  Rate has been selected or is applicable,  the
         percentage  (expressed as a decimal) as calculated by the Agent that is
         in effect on the first day of such  Interest  Period,  as prescribed by
         the Board of  Governors  of the U.S.  Federal  Reserve  System  (or any
         successor),  for determining  reserve  requirements to be maintained by
         the Agent under Regulation D (or any successor  regulation  thereof) as
         amended to the date hereof  (including  such  reserve  requirements  as
         become  applicable  to the Agent  pursuant to phase-in or other similar
         requirements of Regulation D at any time subsequent to the date hereof)
         in respect of "Eurocurrency  liabilities" (as defined in Regulation D).
         The Eurodollar  Rate shall be adjusted  automatically  on and as of the
         effective date of any change in the Eurodollar Rate Reserve Percentage.

      Event of Default: Any of the events or circumstances  specified in Section
         8.1.

      Exchange Act: The  Securities  and Exchange Act of 1934,  as amended,  and
         regulations promulgated thereunder.

      Federal Funds Rate:  For any day, the interest rate per annum equal to the
         weighted average of the rates on overnight  Federal funds  transactions
         with members of the Federal  Reserve  System  arranged by Federal funds
         brokers,  as published  for such day (or, if such day is not a Business
         Day, for the next preceding  Business Day) by the Federal  Reserve Bank
         of New York.

      Federal Funds  Effective  Rate:  For any day, an  interest  rate per annum
         equal to the arithmetic mean as determined by the Agent of the rates on
         overnight  Federal  funds  transactions  with  members  of the  Federal
         Reserve System arranged by Federal funds brokers on such day,  received
         by the  Agent by each of three  Federal  funds  brokers  of  recognized
         standing  in New York City prior to 11:00  a.m.  (San  Francisco  time)
         selected by Agent in its sole discretion.

      Federal Funds Rate Loan: A Revolving Loan or Term Loan that bears interest
         based on the Federal Funds Effective Rate.

      Fee Letter: Has the meaning specified in subsection 2.9(a).

      FRB: The  Board  of  Governors  of the  Federal  Reserve  System,  and any
         Governmental Authority succeeding to any of its principal functions.

      GAAP: Generally accepted accounting principles set forth from time to time
         in the opinions and  pronouncements of the Accounting  Principles Board
         and  the  American   Institute  of  Certified  Public  Accountants  and
         statements and  pronouncements  of the Financial  Accounting  Standards
         Board (or agencies  with similar  functions of  comparable  stature and
         authority within the U.S. accounting profession),  which are applicable
         to the circumstances as of the date of determination.

      Governmental  Authority:  Any  nation  or  government,  any state or other
         political subdivision thereof, any central bank (or similar monetary or
         regulatory   authority)  thereof,  any  entity  exercising   executive,
         legislative,  judicial,  regulatory or  administrative  functions of or
         pertaining to government,  and any corporation or other entity owned or
         controlled,  through stock or capital ownership or otherwise, by any of
         the foregoing.

      Indebtedness:  Indebtedness,  as to any corporation,  means any obligation
         of, or  guaranteed  or assumed by, such  corporation  for (i)  borrowed
         money   evidenced  by  bonds,   debentures,   notes  or  other  similar
         instruments,  (ii) the deferred  purchase price of property or services
         (excluding  trade and other  accounts  payable),  (iii) the  leasing of
         tangible  personal  property  under leases which,  under any applicable
         Financial Accounting Standards Board Statement,  have been or should be
         recorded  as   capitalized   leases,   or  (iv)  direct  or  contingent
         obligations  under  letters of credit  issued  for the  account of such
         corporation.

      Indemnified Liabilities: Has the meaning specified in Section 10.5.

      Indemnified Person: Has the meaning specified in Section 10.5.

      Insolvency  Proceeding:  Means,  as to a debtor,  (a) any case,  action or
         proceeding before any court or other Governmental Authority relating to
         bankruptcy,  reorganization,   insolvency,  liquidation,  receivership,
         dissolution,  winding-up  or  relief  of  debtors,  or (b) any  general
         assignment  for the benefit of  creditors,  composition,  marshaling of
         assets for  creditors,  or other similar  arrangement in respect of its
         creditors  generally  or any  substantial  portion  of  its  creditors,
         undertaken  under U.S.  Federal,  state or foreign law,  including  the
         Bankruptcy Code.

      Interest  Payment  Date:  As to any Loan  other  than a Base  Rate Loan or
         Federal  Funds  Rate  Loan,  the  last  day  of  each  Interest  Period
         applicable  to such Loan and, as to any Base Rate Loan or Federal Funds
         Rate Loan,  the last Business Day of each calendar  quarter,  provided,
         however, that if any Interest Period for a Eurodollar Rate Loan or a CD
         Rate Loan exceeds three months or 90 days, respectively,  the date that
         falls three  months or 90 days,  respectively,  after the  beginning of
         such Interest Period and after each Interest Payment Date thereafter is
         also an Interest Payment Date.

      Interest  Period:  Any period  specified  in  accordance  with Section 2.6
         hereof.

      Intermediate Parent: Schwab Holdings, Inc., a Delaware corporation and its
         successors and assigns.

      Lender: Has the meaning specified in the introductory clause hereto.

      Lending  Office:  As to any  Lender,  the office or offices of such Lender
         specified  as its  "Lending  Office" or  "Domestic  Lending  Office" or
         "Offshore  Lending  Office",  as the case may be, on Schedule  10.2, or
         such  other  office or  offices  as such  Lender  may from time to time
         notify the Borrower and the Agent.

      Loan: An extension of credit by a Lender to the Borrower  under  Section 2
         in the form of a Revolving Loan or Term Loan.

      Loan Document:  This Agreement,  any Notes, the Fee Letter,  and all other
         documents delivered to the Agent or any Lender in connection herewith.

      Minimum Tangible Net Worth:  As of the Closing  Date,  and the last day of
         each fiscal quarter thereafter, the greater of:

            (a) $1,471,041,000, or

            (b) the sum of -

                  (i) $1,471,041,000, plus

                  (ii)  40% of the  sum of  cumulative  Net  Earnings  for  each
                        fiscal quarter  commencing with the fiscal quarter ended
                        June 30, 2001.

      Net Capital Ratio:   As of the date of  determination,  that percentage of
            net capital to  aggregate  debit items of any entity  subject to the
            Net  Capital  Rule 15c3-1  promulgated  by the  Securities  Exchange
            Commission  pursuant to the Securities  Exchange Act of 1934 and any
            successor or replacement rule or regulation therefor.

      Net Earnings:    With respect to any fiscal period,  the  consolidated net
            income of the  Borrower  and its  Subsidiaries,  after  taking  into
            account all extraordinary  items, taxes and other proper charges and
            reserves for the applicable  period,  determined in accordance  with
            U.S. generally accepted accounting principles, consistently applied.

      Note: A  promissory  note  executed  by the  Borrower in favor of a Lender
            pursuant to Section 2.3 in  substantially  the form of Exhibits  A-1
            and A-2.

      Noticeof Conversion/  Continuation:  A notice in substantially the form of
            Exhibit C.

      Obligations: All borrowings,  debts, liabilities,  obligations,  covenants
            and duties  arising under any Loan Document owing by the Borrower to
            any Lender, the Agent, or any Indemnified Person,  whether direct or
            indirect  (including  those  acquired  by  assignment),  absolute or
            contingent, due or to become due, now existing or hereafter arising.

      Person: Means an individual,  partnership,  corporation, limited liability
            company, business trust,  unincorporated  association,  trust, joint
            venture or Governmental Authority.

      Pro Rata Share:   As to any Lender at any time, the percentage  equivalent
            (expressed as a decimal, rounded to the ninth decimal place) at such
            time of such Lender's Commitment divided by the combined Commitments
            of all Lenders.

      Reference Lenders:  Means Bank of America,  N.A.,  Citicorp USA, Inc., and
            Bank One, NA.

      Replacement Lender: Has the meaning specified in Section 3.9.

      Required Lenders:  At any time at least two Lenders then holding in excess
            of 50% of the then aggregate  unpaid  principal amount of the Loans,
            or, if no such principal  amount is then  outstanding,  at least two
            Lenders then having in excess of 50% of the Commitments.

      Requirement of Law:  As to any  Person,  any law  (statutory  or  common),
            treaty, rule or regulation or determination of an arbitrator or of a
            Governmental  Authority,  in each case applicable to or binding upon
            the Person or any of its  property  or to which the Person or any of
            its property is subject.

      Responsible  Officer:  Any senior vice president or more senior officer of
            the Borrower,  or any other officer  having  substantially  the same
            authority and  responsibility;  or, with respect to compliance  with
            financial  covenants,  the chief financial  officer,  executive vice
            president-finance,  controller or the treasurer of the Borrower,  or
            any  other  officer  having  substantially  the same  authority  and
            responsibility.

      Revolving Credit Facility:  The revolving credit facility available to the
            Borrower pursuant to Section 2.1 hereof.

      Revolving Loan:  Has the meaning  specified  in Section  2.1, and may be a
            Base  Rate  Loan,  Federal  Funds  Rate  Loan,  CD  Rate  Loan  or a
            Eurodollar Rate Loan (each a "Type" of Revolving Loan).

      Revolving Note: Has the meaning specified in Section 2.3.

      Revolving Termination Date: The earlier to occur of:

            (a)   June 21, 2002; and

            (b)   the date on which the Commitments terminate in accordance with
                  the provisions of this Agreement.

      SCM:  Schwab Capital Markets L.P., a New Jersey limited  partnership,  and
            its successors and assigns.

      SEC:  The  Securities  and  Exchange   Commission,   or  any  Governmental
            Authority succeeding to any of its principal functions.

      Senior Medium-Term  Notes,  Series A:  Means  senior  debt  securities  or
            senior  subordinated  debt  securities  issued by The Charles Schwab
            Corporation  with a  maturity  between  9  months  and 30  years  in
            accordance  with the Senior  Indenture,  as amended,  and the Senior
            Subordinated  Indenture,  as amended, both dated as of July 15, 1993
            by  and  between  The  Charles  Schwab  Corporation  and  The  Chase
            Manhattan Bank, as trustee.

      Subsidiary: Any  corporation or other entity of which a sufficient  number
            of voting  securities  or other  interests  having  power to elect a
            majority  of the  board of  directors  or other  persons  performing
            similar  functions are at the time  directly or indirectly  owned by
            the Borrower.

      Term  Commitment: Means One Billion Two Hundred Million and no/100 Dollars
            ($1,200,000,000.00).

      Term  Loan:  Has the  meaning  specified  in Section 2.2 and may be a Base
            Rate Loan,  Federal Funds Rate Loan, CD Rate Loan or Eurodollar Rate
            Loan (each a "Type" of Term Loan).

      Term  Loan  Facility:  The term loan  facility  available  to the Borrower
            pursuant to Section 2.2 hereof.

      Term  Loan Maturity Date: Has the meaning specified in Section 2.2.

      Term  Note: Has the meaning specified in Section 2.3.

      Type: Has the meaning specified in the definition of "Revolving Loan".

2.       THE CREDIT FACILITY.

      2.1   The Revolving Credit Facility Each Lender severally  agrees,  on the
            terms and conditions set forth herein, to make loans to the Borrower
            (each  such  loan,  a  "Revolving  Loan")  from  time to time on any
            Business  Day  during  the  period  from  the  Closing  Date  to the
            Revolving  Termination Date, in an aggregate amount not to exceed at
            any time  outstanding,  together with the  principal  amount of Term
            Loans  outstanding  in favor of such Lender at such time, the amount
            set forth on Schedule 1 (such amount  together with the Lender's Pro
            Rata Share of the Term Commitment,  as the same may be reduced under
            Section 2.10 or as a result of one or more assignments under Section
            10.8, the Lender's  "Commitment");  provided,  however,  that, after
            giving  effect to any  Borrowing of Revolving  Loans,  the Effective
            Amount  of all  outstanding  Revolving  Loans  shall not at any time
            exceed the  combined  Commitments;  and  provided  further  that the
            Effective  Amount of the  Revolving  Loans,  together  with all Term
            Loans  outstanding at such time, of any Lender shall not at any time
            exceed such Lender's Commitment.  Within the limits of each Lender's
            Commitment,  and subject to the other terms and  conditions  hereof,
            the Borrower may borrow under this Section 2.1, prepay under Section
            3.3 and reborrow under this Section 2.1.

      2.2   Term Loan Facility.  Each Lender severally  agrees, on the terms and
            conditions  set forth herein,  to make Loans to the Borrower  during
            the period from the Closing Date to June 21,  2002,  in an aggregate
            amount  not to  exceed  such  Lender's  Pro  Rata  Share of the Term
            Commitment. The Borrower from time to time may borrow under the Term
            Loan  Facility  (and may  reborrow any amount  theretofore  prepaid)
            until close of business on June 21,  2002,  for a term not to exceed
            364 days from the date of the  Borrowing.  Each such loan  under the
            Term Loan Facility (a "Term Loan") shall be in the minimum amount of
            $10,000,000  and shall become due and payable on the last day of the
            term  selected  by the  Borrower  for such Term Loan (the "Term Loan
            Maturity Date"), which shall in no event be later than 364 days from
            the date of such Term Loan. The maximum  availability under the Term
            Loan Facility  shall be the amount of the Credit minus the aggregate
            outstanding  principal amount of Revolving Loans and Term Loans made
            by the Lenders;  provided,  however, that to the extent the proceeds
            of a Term Loan are used to repay an outstanding Revolving Loan (or a
            portion thereof), such Revolving Loan (or portion thereof) shall not
            be considered part of the aggregate  principal amount of outstanding
            Revolving  Loans made by the Lenders for  purposes of this  sentence
            (such maximum availability  hereafter being referred to as the "Term
            Loan  Availability").  Under no  circumstances  shall the  aggregate
            outstanding  principal amount of Term Loans and Revolving Loans made
            by the Lenders exceed the Credit,  and under no circumstances  shall
            any  Lender  be  obligated  (i) to make any Term  Loan  (nor may the
            Borrower  reborrow  any amount  heretofore  prepaid)  after June 21,
            2002,  or (ii) to make  any Term  Loan in  excess  of the Term  Loan
            Availability.  Each Term Loan made hereunder shall fully and finally
            mature and be due and payable in full on the Term Loan Maturity Date
            specified  in the  Borrowing  Advice for such Term  Loan;  provided,
            however,  that to the extent the Borrowing  Advice for any Term Loan
            selects  an  Interest  Period  that  expires  before  the Term  Loan
            Maturity Date specified in such Borrowing  Advice,  the Borrower may
            from  time to time  select  additional  interest  rate  options  and
            Interest  Periods  (none of which shall extend  beyond the Term Loan
            Maturity Date for such Term Loan) by  delivering a Borrowing  Advice
            or Notice of Conversion/Continuation, as applicable.

      2.3   Evidence  of  Borrowing/Promissory  Notes.  The  obligation  of  the
            Borrower  to repay  the  aggregate  unpaid  principal  amount of the
            Revolving  Loans and Term Loans  shall be  evidenced  by  promissory
            notes of the Borrower (respectively the "Revolving Note and the Term
            Note") in substantially the form attached hereto as Exhibits A-1 and
            A-2, with the blanks appropriately  completed,  payable to the order
            of each Lender in the principal  amount of its  Commitment,  bearing
            interest as hereinafter specified. Each Revolving Note and Term Note
            shall be dated,  and shall be delivered to each Lender,  on the date
            of the  execution  and delivery of this  Agreement by the  Borrower.
            Each Lender  shall,  and is hereby  authorized  by the  Borrower to,
            endorse on the  schedule  contained on the  Revolving  Note and Term
            Note, or on a  continuation  of such schedule  attached  thereto and
            made a part thereof,  appropriate  notations regarding the Revolving
            Loans and Term Loans evidenced by such Note as specifically provided
            therein and such Lender's record shall be conclusive absent manifest
            error;  provided,  however,  that the  failure to make,  or error in
            making,  any such notation  shall not limit or otherwise  affect the
            obligations  of the Borrower  hereunder or under the Revolving  Note
            and Term Note. The Agent, by notice to the Borrower (to be given not
            later than two Business Days prior to the initial  Borrowing or Term
            Loan  hereunder) may request that Revolving Loans or Term Loans made
            hereunder for which the interest  calculation  is to be based on the
            Eurodollar  Rate be  evidenced by separate  Revolving  Notes (in the
            case of Revolving Loans) and Term Notes (in the case of Term Loans),
            substantially  in the form of  Exhibit  A-1  hereto  (in the case of
            Revolving Loans) and Exhibit A-2 hereto (in the case of Term Loans),
            payable to the order of each  Lender for the  account of its office,
            branch or affiliate it may designate as its Lending Office.

      2.4   Making of  Revolving  Loans  and Term  Loans,  Borrowings;  Interest
            Periods; Notice.

            (a)   Each Borrowing of Revolving  Loans or Term Loans shall be made
                  upon Borrower's  irrevocable  written notice  delivered to the
                  Agent in the form of a Borrowing  Advice (which notice must be
                  received by the Agent prior to 9:00 a.m.  San  Francisco  time
                  for a CD Rate Loan, prior to 10:00 a.m. San Francisco time for
                  a Eurodollar  Rate Loan, and prior to 11:00 a.m. San Francisco
                  time for a Base Rate Loan or a Federal  Funds  Rate  Loan) (i)
                  the same Business Day as the requested  Borrowing  Date in the
                  case of Base Rate  Loans and  Federal  Funds  Rate Loans to be
                  made on such  Business Day, (ii) one Business Day prior to the
                  requested  Borrowing  Date in the  case of CD Rate  Loans,  or
                  (iii) three  Business  Days prior to the  requested  Borrowing
                  Date in the case of Eurodollar Rate Loans, with each Borrowing
                  Advice setting forth the following information:

                  (A)   the requested  Borrowing Date, which shall be a Business
                        Day, on which such  Revolving Loan or Term Loan is to be
                        made;

                  (B)   for a CD  Rate  Loan  or a  Eurodollar  Rate  Loan,  the
                        duration of the Interest  Period  selected in accordance
                        with Section 2.6 hereof (if the  Borrowing  Advice fails
                        to specify the duration of the  Interest  Period for any
                        Borrowing  comprised of a  Eurodollar  Rate Loan or a CD
                        Rate Loan, such Interest Period shall be three months);

                  (C)   the  Type of  Loans  comprising  the  Borrowing  and the
                        interest rate option selected in accordance with Section
                        2.7 hereof; and

                  (D)   the aggregate  principal amount of the Revolving Loan or
                        Term Loan (which shall be in an aggregate minimum amount
                        of  $10,000,000)  to  which  such  Interest  Period  and
                        interest rate shall apply.

            (b)   The Agent will  promptly  notify each Lender of its receipt of
                  any  Borrowing  Advice and of the amount of such  Lender's Pro
                  Rata Share of that Borrowing.

            (c)   Each Lender will make the amount of its Pro Rata Share of each
                  Borrowing  available  to the  Agent  for  the  account  of the
                  Borrower  at the  Agent's  Payment  Office  by 1:00  p.m.  San
                  Francisco time on the Borrowing Date requested by the Borrower
                  in funds immediately  available to the Agent. Each Loan to the
                  Borrower under this Agreement  shall be made by 1:30 p.m. (San
                  Francisco  time) on the date of the Requested  Borrowing Date,
                  and shall be in immediately  available funds (in the aggregate
                  amount made  available to the Agent by the  Lenders)  wired to
                  the Borrower's account at Citibank,  N.A. (Account  4055-4016)
                  or such other  account as may be designated by the Borrower in
                  writing.

            (d)   After giving  effect to any  Borrowing,  there may not be more
                  than ten (10) different Interest Periods in effect.

With respect to any Borrowing having an Interest Period ending on or before June
21, 2002, if prior to the last day of the Interest Period for such Borrowing the
Borrower  fails  timely  to  provide  a  Notice  of  Conversion/Continuation  in
accordance  with  Section  2.5,  such  Borrowing  shall,  on the last day of the
then-existing  Interest Period for such Borrowing,  automatically convert into a
Base Rate Loan. In the event of any such automatic  conversion,  the Borrower on
the  date of such  conversion  shall  be  deemed  to make a  representation  and
warranty to the  Lenders  that,  to the best of the  Borrower's  knowledge,  (i)
neither the Broker  Subsidiary  nor SCM is in  violation  of minimum net capital
requirements  as  described  in Section 7.1,  (ii) the  Borrower's  Consolidated
Tangible  Net Worth is not below the Minimum  Tangible Net Worth as described in
Section 7.2, and (iii) no amount owing with respect to any  Commitment  Fee, any
outstanding  Borrowing,  or any interest thereon, or any other amount hereunder,
is due and unpaid. If prior to the last day of the Interest Period applicable to
any  Term   Loan  the   Borrower   fails   timely   to   provide   a  Notice  of
Conversion/Continuation in accordance with Section 2.5, such Term Loan shall, on
the  last  day  of  the  then-existing  Interest  Period  for  such  Term  Loan,
automatically,  have  applicable to it a new Interest Period of thirty (30) days
(or, in the event there are fewer than  thirty (30) days  remaining  to the Term
Loan Maturity Date for such Term Loan, an Interest  Period of the number of days
remaining to such Term Loan  Maturity  Date) and shall bear interest at the Base
Rate.

      2.5   Conversion and Continuation Elections.

            (a)   The Borrower may, upon irrevocable written notice to the Agent
                  in accordance with this Section 2.5:

                  (i)   elect,  as of any Business Day, in the case of Base Rate
                        Loans or Federal Funds Rate Loans, or as of the last day
                        of the applicable  Interest  Period,  in the case of any
                        other  Type of Loan,  to  convert  any such Loan (or any
                        part  thereof in an amount  not less than  $10,000,000),
                        into Loans of any other Type; or

                  (ii)  elect  as of the  last  day of the  applicable  Interest
                        Period,  to continue any Loans having  Interest  Periods
                        expiring  on such day (or any part  thereof in an amount
                        not less than $10,000,000);

provided,  that if at any time the aggregate  amount of Eurodollar Rate Loans in
respect of any Borrowing is reduced,  by payment,  prepayment,  or conversion of
part  thereof to be less than  $10,000,000,  such  Eurodollar  Rate Loans  shall
automatically convert into Base Rate Loans.

            (b)   The Borrower shall deliver a Notice of Conversion/Continuation
                  to be  received  by the  Agent not  later  than 9:00 a.m.  San
                  Francisco  time for a CD Rate Loan,  not later than 10:00 a.m.
                  San Francisco  time for a Eurodollar  Rate Loan, and not later
                  than 11:00 a.m. San  Francisco  time for a Base Rate Loan or a
                  Federal Funds Rate Loan,  at least (i) three  Business Days in
                  advance of the  Conversion/Continuation  Date,  as to any Loan
                  that is to be converted into or continued as a Eurodollar Rate
                  Loan;    (ii)   one   Business   Day   in   advance   of   the
                  Conversion/Continuation  Date  as to any  Loan  that  is to be
                  converted into a CD Rate Loan; and (iii) the same Business Day
                  as the Conversion/Continuation Date, as to any Loan that is to
                  be converted into a Base Rate Loan or Federal Funds Rate Loan,
                  specifying:

                  (A)   the proposed Conversion/Continuation Date;

                  (B)   the  aggregate  amount  of  the  Loan  or  Loans  to  be
                        converted or renewed;

                  (C)   the Type of Loan or Loans  resulting  from the  proposed
                        conversion or continuation; and

                  (D)   other  than in the case of  conversions  into  Base Rate
                        Loans or Federal  Funds Rate Loans,  the duration of the
                        requested Interest Period.

            (c)   If upon the  expiration of any Interest  Period  applicable to
                  Eurodollar  Rate  Loans or CD Rate  Loans,  the  Borrower  has
                  failed to select timely a new Interest Period to be applicable
                  to such  Eurodollar  Rate  Loans or CD Rate  Loans,  or if any
                  Default or Event of Default then exists, the Borrower shall be
                  deemed to have elected to convert such  Eurodollar  Rate Loans
                  or CD Rate  Loans  into Base Rate  Loans  effective  as of the
                  expiration date of such Interest Period.

            (d)   The Agent will promptly notify each Lender of its receipt of a
                  Notice of Conversion/Continuation,  or, if no timely notice is
                  provided by the Borrower,  the Agent will promptly notify each
                  Lender  of  the  details  of  any  automatic  conversion.  All
                  conversions and continuations  shall be made ratably according
                  to the respective  outstanding  principal amounts of the Loans
                  with  respect  to which the  notice  was given as held by each
                  Lender.

            (e)   Unless  the  Required  Lenders  otherwise  agree,  during  the
                  existence  of a Default or Event of Default,  the Borrower may
                  not  elect to have a Loan  converted  into or  continued  as a
                  Eurodollar Rate Loan or a CD Rate Loan.

            (f)   After  giving  effect to any  conversion  or  continuation  of
                  Loans,  there may not be more than ten (10) different Interest
                  Periods in effect.

      2.6   Interest  Periods.  The  Borrower may select for any CD Rate Loan or
            Eurodollar  Rate Loan the  Interest  Period (as  defined in the next
            sentence) for each Borrowing,  it being understood that the Borrower
            may  request  multiple  Borrowings  on the same day and may select a
            different  Interest  Period  for each such  Borrowing.  An  Interest
            Period  shall  be  each  period,  as  selected  by the  Borrower  in
            accordance  with the  terms of this  Agreement,  in the case of each
            Borrowing,  beginning on the  Borrowing  Date of such Loan or on the
            Conversion/Continuation  Date on which the Loan is converted into or
            continued  as a  Eurodollar  Rate  Loan,  and  ending  on  the  date
            specified by the Borrower, subject to the following:

            (a)   either 30, 60, 90 or 180 days  thereafter,  in the case of any
                  Interest  Period for which the  interest is to be based on the
                  CD Rate,  provided that if the last day of an Interest  Period
                  would  be a day  that is not a  Business  Day,  such  Interest
                  Period shall be extended to the next succeeding  Business Day;
                  or

            (b)   the numerically  corresponding day in the first, second, third
                  or sixth month thereafter,  in the case of any Interest Period
                  that is to be based on the Eurodollar  Rate,  provided that if
                  the last day of an Interest  Period would be a day that is not
                  a Business Day, such Interest  Period shall be extended to the
                  next  succeeding  Business  Day,  unless such next  succeeding
                  Business Day is in a different  calendar  month, in which case
                  such interest period shall end on the next preceding  Business
                  Day;

provided, however, that (i) no Interest Period applicable to any Revolving Loan
shall extend beyond the Revolving Termination Date; and (ii) no Interest Period
applicable to any Term Loan shall extend beyond the Term Loan Maturity Date
specified in the Borrowing Advice for such Term Loan, which in no event shall be
later than June 20, 2003.

      2.7   Interest Rates.

            (a)   Each  Revolving  Loan and each Term Loan,  while  outstanding,
                  shall bear interest from the  applicable  Borrowing  Date at a
                  rate per annum equal to the Eurodollar  Rate, the CD Rate, the
                  Federal  Funds  Effective  Rate, or the Base Rate, as the case
                  may be,  (and  subject to the  Borrower's  right to convert to
                  other Types of Loans under  Section  2.5) plus the  Applicable
                  Margin.

            (b)   Interest on each Revolving Loan and Term Loan shall be paid in
                  arrears on each Interest Payment Date.  Interest shall also be
                  paid on the date of any  prepayment of Loans under Section 3.3
                  for the  portion  of the  Loan so  prepaid  and  upon  payment
                  (including  prepayment)  in  full  thereof,  and,  during  the
                  existence  of any Event of Default  interest  shall be paid on
                  demand of the Agent at the  request or with the consent of the
                  Required Lenders.

            (c)   After the principal amount of any Revolving Loan or Term Loan,
                  accrued  interest upon such Loan, the  commitment  fee, or any
                  other  amount  hereunder  shall have become due and payable by
                  acceleration,  or otherwise,  it shall thereafter (until paid)
                  bear  interest,  payable on  demand,  (i) until the end of the
                  Interest  Period with respect to such Loan at a rate per annum
                  equal to 1% per annum in excess of the rate or rates in effect
                  with respect to such Loan, and (ii) thereafter,  at a rate per
                  annum equal to 1% per annum in excess of the Base Rate.

      2.8   Substitute Rates. If upon receipt by the Agent of a Borrowing Advice
            relating to any Borrowing or of a Notice of Conversion/Continuation:

            (a)   the Agent shall determine that by reason of changes  affecting
                  the New York City  certificate  of deposit  market  and/or the
                  London interbank market,  adequate and reasonable means do not
                  exist  for   ascertaining   the   applicable  CD  Rate  and/or
                  Eurodollar  Rate,  respectively,  with respect to any Interest
                  Period; or

            (b)   the Agent shall  determine  that by reason of any change since
                  the  date  hereof  in  any  applicable  law  or   governmental
                  regulation  (other  than any such  change  in the  regulations
                  described  in  the  definition  of  Eurodollar   Rate  Reserve
                  Percentage  in Section 1 hereof),  guideline  or order (or any
                  interpretation  thereof), the adoption or enactment of any new
                  law  or   governmental   regulation  or  order  or  any  other
                  circumstance  affecting  the  Lenders  or the  New  York  City
                  certificate  of deposit  market  and/or  the London  interbank
                  market,  the CD Rate and/or  Eurodollar  Rate, shall no longer
                  represent the effective cost to the Lenders of certificates of
                  deposit and/or of U.S. dollar deposits,  respectively,  in the
                  relevant amount and for the relevant period; or

            (c)   Agent shall  determine  that,  as a result of any change since
                  the  date  hereof  in  any  applicable  law  or   governmental
                  regulation  or  as  a  result  of  the  adoption  of  any  new
                  applicable law or governmental  regulation,  the applicable CD
                  Rate and/or Eurodollar Rate, would be unlawful;

then, the Agent will promptly so notify the Borrower and each Lender, whereupon,
the  obligation of the Lenders to make or maintain  Eurodollar  Rate Loans or CD
Rate Loans,  as the case may be,  hereunder  shall be suspended  until the Agent
upon the  instruction  of the Required  Lenders  revokes such notice in writing.
Upon receipt of such notice,  the Borrower may revoke any Notice of Borrowing or
Notice of  Conversion/Continuation  then  submitted by it and, at its  election,
submit a Borrowing Advice or Notice of Conversion/Continuation selecting another
Type of Loan.  If the  Borrower  does not revoke such Notice or give a Notice as
provided  herein,  the Lenders  shall make,  convert or continue  the Loans,  as
proposed  by the  Borrower  in the amount  specified  in the  applicable  notice
submitted by the Borrower,  but such Loans shall be made, converted or continued
as Base Rate Loans  instead of  Eurodollar  Rate Loans or CD Rate Loans,  as the
case may be.

      2.9      Fees.

            (a)   Arrangement,   Agency  Fees.   The   Borrower   shall  pay  an
                  arrangement  fee to the Arranger for the  Arranger's  account,
                  and  shall pay an  agency  fee to the  Agent  for the  Agent's
                  account,  as required by the letter  agreement  ("Fee Letter")
                  between the Borrower,  the Agent and the Arranger  dated April
                  25, 2001.

            (b)   Commitment  Fee. The  Borrower  shall pay to the Agent for the
                  account of each Lender a commitment fee (the "Commitment Fee")
                  on the actual daily unused portion of such Lender's Commitment
                  computed on a quarterly  basis in arrears on the last Business
                  Day of each quarter based upon the daily  utilization for that
                  quarter  as  calculated  by  the  Agent,   equal  to  nine-one
                  hundredths of one percent  (0.09%) per annum.  For purposes of
                  calculating utilization under this subsection, the Commitments
                  shall be deemed used to the extent of the Effective  Amount of
                  Revolving  Loans  and  Term  Loans  then   outstanding.   Such
                  Commitment  Fee  shall  accrue  from the  Closing  Date to the
                  Revolving  Termination  Date  and  shall  be due  and  payable
                  quarterly in arrears on the last  Business Day of each quarter
                  commencing  on the quarter  ending  September 30, 2001 through
                  the Revolving  Termination  Date, with the final payment to be
                  made on the  Revolving  Termination  Date;  provided  that, in
                  connection  with any reduction or  termination  of Commitments
                  under Section 2.10, the accrued  commitment fee calculated for
                  the period  ending on such date shall also be paid on the date
                  of such reduction or termination, with the following quarterly
                  payment being  calculated on the basis of the period from such
                  reduction or termination date to such quarterly payment date.

            (c)   Utilization  Fee. The Borrower  shall pay to the Agent for the
                  account of each Lender quarterly in arrears commencing on June
                  30, 2001 a  utilization  fee equal to one tenth of one percent
                  (0.10%)  per  annum on the  aggregate  amount  of  outstanding
                  Revolving Loans and Term Loans,  provided that the outstanding
                  amount  of such  Loans  exceeds  fifty  percent  (50%)  of the
                  aggregate  amount of all the Commitments of the Lenders to the
                  Borrower.

      2.10  Reduction of Credit. The Borrower,  from time to time, upon at least
            three (3) Business Days' written notice to the Agent,  may terminate
            the  commitments,  or  permanently  reduce  the  Commitments  by  an
            aggregate minimum amount of $10,000,000, without penalty or premium;
            unless after giving effect  thereto and to any  prepayments of Loans
            made on the  effective  date thereof,  the  Effective  Amount of all
            Revolving  Loans and Term Loans  together would exceed the amount of
            the combined  Commitments then in effect. Once reduced in accordance
            with  this  Section,  the  Commitments  may  not be  increased.  Any
            reduction  of the  Commitments  shall be  applied  to each  Lender's
            Commitment  according to its Pro Rata Share. All accrued  Commitment
            Fees to, but not  including,  the effective date of any reduction or
            termination of  Commitments,  shall be paid on the effective date of
            such  reduction  or  termination.  During  the  continuation  of the
            Credit,  the  computation  of the  Commitment  Fee and the  Lenders'
            obligations  to make  Revolving  Loans or Term Loans  shall be based
            upon such  reduced  Commitments.  In the event the  Credit  shall be
            reduced to zero pursuant to this Section, the Credit shall be deemed
            terminated,  and any  Commitment  Fee or any  other  amount  payable
            hereunder  then  accrued  shall  become  immediately  payable.  Such
            termination of the Credit shall terminate the Borrower's obligations
            with  respect to the  Commitment  Fee to the extent not  theretofore
            accrued and shall  terminate  the Lenders'  obligations  to make any
            further Revolving Loans or Term Loans under this Agreement.

      2.11  Termination Date; Extensions.  The termination date of each Lender's
            Commitment  with  respect to the Credit  (the  "Termination  Date"),
            including  both the  Revolving  Credit  Facility  under  Section 2.1
            hereof and the Term Loan  Facility  under  Section  2.2  hereof,  is
            initially June 21, 2002. At any time no earlier than forty-five (45)
            days and no later than  thirty  (30) days  prior to the  Termination
            Date then in effect  (whether the initial  Termination  Date of June
            21,  2002 or any  later  Termination  Date as  extended  under  this
            Section  2.11),  the Borrower may, by written notice to the Agent in
            the form attached as Exhibit D hereto,  request that the Termination
            Date be extended  for a period of 364  calendar  days.  Such request
            shall be irrevocable and binding upon the Borrower. In no event will
            any Lender agree to approve any extension more than thirty (30) days
            before the Termination Date then in effect. If each Lender agrees to
            so extend its Commitment and the Termination  Date (which  agreement
            may be  given  or  withheld  in  such  Lender's  sole  and  absolute
            discretion),  the Agent shall  evidence such  agreement by executing
            and  returning  to the  Borrower  a copy of the  Borrower's  written
            request no later than fifteen (15) days after the Agent's receipt of
            the Borrower's written request.  If the Agent fails to so respond to
            and accept the Borrower's  request for extension of the  Termination
            Date then in effect, the Lenders' Commitments shall be terminated on
            the  Termination  Date then in effect.  If, on the other  hand,  the
            Agent  so  responds  to  and  accepts  the  Borrower's  request  for
            extension of the Termination Date, then upon receipt by the Borrower
            of a copy of the Borrower's  written  request  countersigned  by the
            Agent,  (i)  the  Lenders'   Commitments  then  in  effect  and  the
            Termination Date then in effect shall  automatically be extended for
            the 364-day period specified in such written request,  and (ii) each
            reference in this Agreement to "June 21, 2002",  and "June 20, 2003"
            (and any prior extension thereof pursuant to this Section 2.11) also
            shall automatically be correspondingly extended for 364 days.

      2.12     Payments by the Lenders to the Agent

      (a)   Unless the Agent  receives  notice  from a Lender on or prior to the
            Closing  Date or, with  respect to any  Borrowing  after the Closing
            Date,  at least one Business  Day in the case of a  Eurodollar  Rate
            Loan or CD Rate Loan, or, in the case of a Base Rate Loan or Federal
            Funds Rate Loan,  prior to noon  (12:00) San  Francisco  time on the
            date of such Borrowing,  that such Lender will not make available as
            and when  required  hereunder  to the Agent for the  account  of the
            Company the amount of that Lender's Pro Rata Share of the Borrowing,
            the Agent may assume that each Lender has made such amount available
            to the Agent in  immediately  available  funds on the Borrowing Date
            and the Agent may (but shall not be so  required),  in reliance upon
            such  assumption,  make  available  to the  Borrower  on such date a
            corresponding amount. If and to the extent any Lender shall not have
            made its full amount available to the Agent in immediately available
            funds and the Agent in such  circumstances  has made its full amount
            available  to the  Borrower  such Lender  shall on the  Business Day
            following  such  Borrowing  Date make such amount  available  to the
            Agent, together with interest at the Federal Funds Rate for each day
            during such  period.  A notice of the Agent  submitted to any Lender
            with  respect to amounts  owing under this  subsection  (a) shall be
            conclusive,  absent  manifest  error.  If  such  amount  is so  made
            available,  such payment to the Agent shall constitute such Lender's
            Loan on the date of Borrowing for all purposes of this Agreement. If
            such amount is not made  available  to the Agent on the Business Day
            following the Borrowing  Date, the Agent will notify the Borrower of
            such  failure to fund and,  upon demand by the Agent,  the  Borrower
            shall pay such amount to the Agent for the Agent's account, together
            with  interest  thereon for each day elapsed  since the date of such
            Borrowing, at a rate per annum equal to the interest rate applicable
            at the time to the Loans comprising such Borrowing.

      (b)   The  failure  of any Lender to make any Loan on any  Borrowing  Date
            shall not relieve any other  Lender of any  obligation  hereunder to
            make  a  Loan  on  such  Borrowing  Date,  but no  Lender  shall  be
            responsible  for the failure of any other Lender to make the Loan to
            be made by such other Lender on any Borrowing Date.

      2.13  Sharing of  Payments,  Etc.  If,  other than as  expressly  provided
            elsewhere  herein,  any Lender  shall obtain on account of the Loans
            made by it any payment (whether voluntary,  involuntary, through the
            exercise of any right of set-off, or otherwise) in excess of its Pro
            Rata Share,  such Lender shall  immediately  (a) notify the Agent of
            such  fact,   and  (b)   purchase   from  the  other   Lenders  such
            participation  in the Loans  made by them as shall be  necessary  to
            cause such  purchasing  Lender to share the excess  payment pro rata
            with each of them; provided,  however, that if all or any portion of
            such excess  payment is  thereafter  recovered  from the  purchasing
            Lender,  such  purchase  shall to that extent be rescinded  and each
            other Lender shall repay to the purchasing Lender the purchase price
            paid therefor, together with an amount equal to such paying Lender's
            ratable share (according to the proportion of (i) the amount of such
            paying  Lender's  required  repayment  to (ii) the  total  amount so
            recovered  from the  purchasing  Lender)  of any  interest  or other
            amount  paid or payable by the  purchasing  Lender in respect of the
            total amount so  recovered.  The Borrower  agrees that any Lender so
            purchasing a  participation  from another Lender may, to the fullest
            extent  permitted  by  law,  exercise  all  its  rights  of  payment
            (including  the right of set-off,  but subject to Section 10.5) with
            respect to such  participation  as fully as if such  Lender were the
            direct creditor of the Borrower in the amount of such participation.
            The Agent will keep records  (which shall be conclusive  and binding
            in the absence of manifest error) of  participation  purchased under
            this Section and will in each case notify the Lenders  following any
            such purchase or repayment.

      2.14     Computation of Fees and Interest.

            (a)   All computations of interest for Base Rate Loans when the Base
                  Rate is determined by Bank of America's  "Prime Rate" shall be
                  made on the  basis of a year of 365 or 366  days,  as the case
                  may be, and actual days  elapsed.  All other  computations  of
                  interest,  and all computation of fees under subsection 2.9(b)
                  and (c)  shall  be made on the  basis  of a  360-day  year and
                  actual  days  elapsed.  Interest  and such fees  shall  accrue
                  during  each  period  during  which  interest or such fees are
                  computed  from and  including  the  first day  thereof  to and
                  excluding the last day thereof.

            (b)   If  any  Reference   Lender's   Commitment   shall   terminate
                  (otherwise than on termination of all the Commitments), or for
                  any reason  whatsoever such Reference Lender shall cease to be
                  a Lender  hereunder,  such  Reference  Lender shall  thereupon
                  cease to be a Reference  Lender,  and the determination of the
                  Eurodollar Base Rate under subsection (c) of the definition of
                  such  term  shall be  determined  on the basis of the rates as
                  notified by the remaining Reference Lenders.

      3.       PAYMENT.

      3.1      Repayment.

            (a)   The Term Credit. The Borrower shall repay to the Agent for the
                  account of the Lenders the aggregate  principal  amount of the
                  Term Loans  outstanding  on each Term Loan  Maturity  Date, as
                  applicable.

            (b)   The Revolving  Credit.  The Borrower shall repay to the Agent,
                  for the account of the Lenders,  on the Revolving  Termination
                  Date  the  aggregate   principal  amount  of  Revolving  Loans
                  outstanding on such date.

      3.2   Method of Payment.  All payments  hereunder  and under the Revolving
            Note and the Term  Note  shall be  payable  in  lawful  money of the
            United  States of America  and in  immediately  available  funds not
            later than 12:00 noon (San  Francisco  time) on the date when due at
            the  principal  office  of the Agent or at such  other  place as the
            Agent may, from time to time, designate in writing to the Borrower.

      3.3   Optional  Prepayment.  Subject to Section 3.7, the Borrower shall be
            entitled  at any time or from  time to time,  upon not less than one
            (1) Business Day irrevocable  notice to the Agent, to ratably prepay
            Loans in whole or in part in minimum amounts of $10,000,000  without
            premium or penalty.  Each notice of payment  shall  specify the date
            and  aggregate  principal  amount  of any  such  prepayment  and the
            Type(s) of Loans to be repaid.  The Agent will promptly  notify each
            Lender of its  receipt of any such Notice and of such  Lender's  Pro
            Rata  Share  of such  prepayment.  If such  Notice  is  given by the
            Borrower,  the Borrower  shall make such  prepayment and the payment
            amount,  specified  in such  Notice  shall be due and payable on the
            date specified  therein,  together with all accrued interest to each
            such  date on the  amount  prepaid,  and  any  amounts  required  in
            accordance with Section 3.7 hereof as a result of such prepayment.

      3.4   Taxes/Net Payments. All payments by Borrower hereunder and under the
            Revolving Note and the Term Note to the Agent or any Lender shall be
            made without set-off or  counterclaim  and in such amounts as may be
            necessary  in order  that  all such  payments,  after  deduction  or
            withholding  for or on  account  of any  present  or  future  taxes,
            levies,  imposts,  duties  or other  charges  of  whatsoever  nature
            imposed by any Governmental  Authority or taxing  authority  thereof
            (collectively,   "Taxes"),  shall  not  be  less  than  the  amounts
            otherwise  specified to be paid under this  Agreement.  The Borrower
            shall pay all Taxes when due and shall  promptly  send to the Lender
            original  tax receipts or copies  thereof  certified by the relevant
            taxing authority together with such other documentary  evidence with
            respect to such payments as may be required from time to time by the
            Agent.  If the  Borrower  fails to pay any Taxes to the  appropriate
            taxing authorities when due or fails to remit to the Agent or Lender
            any such  original  tax  receipts  or  certified  copies  thereof as
            aforesaid or other required documentary evidence, the Borrower shall
            indemnify  the Agent or Lender  within thirty (30) days of demand by
            the Lender or Agent for any taxes,  interest or  penalties  that may
            become payable by the Agent or Lender as a result of such failure.

Notwithstanding  the  foregoing,  (i) the  Borrower  shall not be liable for the
payment of any tax on or  measured  by the net income of any Lender  pursuant to
the laws of the  jurisdiction  where an office of such  Lender  making  any loan
hereunder is located or does  business,  and (ii) the  foregoing  obligation  to
gross  up  the  payments  to  any  Lender  so as not to  deduct  or  offset  any
withholding  taxes or Taxes paid or payable by the Borrower  with respect to any
payments to such Lender  shall not apply (x) to any payment to any Lender  which
is a "foreign corporation,  partnership or trust" within the meaning of the Code
if such  Lender is not,  on the date  hereof (or on the date it becomes a Lender
under this Agreement pursuant to the assignment terms of this Agreement),  or on
any date hereafter that it is a Lender under this Agreement,  entitled to submit
either a Form W-8BEN or any successor form thereto  (relating to such Lender and
entitling  it to a complete  exemption  from  withholding  on all interest to be
received  by it  hereunder  in  respect  of the  Loans)  or Form  W-8ECI  or any
successor  form thereto  (relating to all interest to be received by such Lender
hereunder in respect of the Loans) of the U.S. Department of Treasury, or (y) to
any item referred to in the preceding  sentence that would not have been imposed
but for the failure by such Lender to comply with any applicable  certification,
information,  documentation  or  other  reporting  requirements  concerning  the
nationality,  residence,  identity or connections of such Lender with the United
States if such  compliance  is required by statute or  regulation  of the United
States as a precondition to relief or exemption from such item.

      3.5      Illegality.

            (a)   If  any  Lender   determines  that  the  introduction  of  any
                  Requirement  of Law, or any change in any  Requirement of Law,
                  or in the  interpretation or administration of any Requirement
                  of Law,  has made it  unlawful,  or that any  central  bank or
                  other Governmental Authority has asserted that it is unlawful,
                  for  any  Lender  or its  applicable  Lending  Office  to make
                  Eurodollar  Rate Loans,  then, on notice thereof by the Lender
                  to the  Borrower  through the Agent,  any  obligation  of that
                  Lender to make  Eurodollar Rate Loans shall be suspended until
                  the  Lender  notifies  the  Agent  and the  Borrower  that the
                  circumstances  giving  rise to such  determination  no  longer
                  exist.

            (b)   If a Lender  determines  that it is unlawful  to maintain  any
                  Eurodollar Rate Loan, the Borrower shall,  upon its receipt of
                  notice of such fact and demand from such  Lender  (with a copy
                  to the Agent),  prepay in full such  Eurodollar  Rate Loans of
                  that Lender then  outstanding,  together with interest accrued
                  thereon and amounts  required under Section 3.7, either on the
                  last day of the  Interest  Period  thereof,  if the Lender may
                  lawfully  continue to maintain such  Eurodollar  Rate Loans to
                  such day,  or  immediately,  if the  Lender  may not  lawfully
                  continue  to  maintain  such  Eurodollar  Rate  Loan.  If  the
                  Borrower is required  to so prepay any  Eurodollar  Rate Loan,
                  then  concurrently  with such  prepayment,  the Borrower shall
                  borrow  from  the  affected  Lender,  in the  amount  of  such
                  repayment,  a Base Rate Loan,  CD Rate Loan,  or Federal Funds
                  Rate  Loan,  subject  to any  applicable  notice for a CD Rate
                  Loan.

            (c)   If the obligation of any Lender to make or maintain Eurodollar
                  Rate Loans has been so terminated  or suspended,  the Borrower
                  may elect,  by giving  notice to the Lender  through the Agent
                  that all Loans which would  otherwise be made by the Lender as
                  Eurodollar  Rate Loans shall be instead  Base Rate  Loans,  CD
                  Rate  Loans,  or  Federal  Funds  Rate  Loans,  subject to any
                  applicable notice for a CD Rate Loan.

            (d)   Before giving any notice to the Agent under this Section,  the
                  affected  Lender shall  designate a different  Lending  Office
                  with respect to its Eurodollar Rate Loans if such  designation
                  will  avoid the need for  giving  such  notice or making  such
                  demand and will not, in the judgment of the Lender, be illegal
                  or otherwise disadvantageous to the Lender.

      3.6      Increased Costs and Reduction of Return.

            (a)   If  any  Lender   determines  that,  due  to  either  (i)  the
                  introduction of or any change (other than any change by way of
                  imposition of or increase in reserve requirements  included in
                  the  calculation  of  the  Eurodollar   Rate)  in  or  in  the
                  interpretation   of  any  law  or  regulation,   or  (ii)  the
                  compliance  by that Lender with any  guideline or request from
                  any central bank or other  Governmental  Authority (whether or
                  not having the force of law),  there shall be any  increase in
                  the cost to such Lender of agreeing to make or making, funding
                  or  maintaining  any Eurodollar  Rate Loan,  then the Borrower
                  shall be liable for, and shall from time to time,  upon demand
                  (with a copy of such demand to be sent to the  Agent),  pay to
                  the Agent for the account of such Lender,  additional  amounts
                  as are sufficient to compensate such Lender for such increased
                  costs.

            (b)   If any Lender shall have determined that (i) the  introduction
                  of any  Capital  Adequacy  Regulation,  (ii) any change in any
                  Capital   Adequacy   Regulation,   (iii)  any  change  in  the
                  interpretation  or  administration  of  any  Capital  Adequacy
                  Regulation by any central bank or other Governmental Authority
                  charged with the interpretation or administration  thereof, or
                  (iv)  compliance by the Lender (or its Lending  Office) or any
                  corporation  controlling the Lender with any Capital  Adequacy
                  Regulation,  affects  or would  affect  the  amount of capital
                  required  or expected  to be  maintained  by the Lender or any
                  corporation  controlling  the Lender and  determines  that the
                  amount of such capital is increased  as a  consequence  of its
                  Commitment, Loans, credits or obligations under this Agreement
                  then,  upon demand of such Lender to the Borrower  through the
                  Agent, the Borrower shall pay to the Lender, from time to time
                  as specified by the Lender,  additional  amounts sufficient to
                  compensate the Lender for the cost of such increase.

      3.7   Funding  Losses.  The Borrower shall  reimburse each Lender and hold
            each Lender  harmless  from any loss or expense which the Lender may
            sustain or incur as a consequence of:

            (a)   the  failure  of the  Borrower  to make on a timely  basis any
                  payment of principal of any Eurodollar Rate Loan;

            (b)   the failure of the  Borrower to borrow,  continue or convert a
                  Loan after the Borrower has given (or is deemed to have given)
                  a Notice of Borrowing or a Notice of Conversion/Continuation;

            (c)   the  failure  of  the  Borrower  to  make  any  prepayment  in
                  accordance with any notice delivered under Section 3.3;

            (d)   the prepayment or other payment  (including after acceleration
                  thereof) of any Eurodollar  Rate Loan or CD Rate Loan on a day
                  that is not the last day of the relevant Interest Period; or

            (e)   the automatic  conversion  under Section 2.5 of any Eurodollar
                  Rate Loan or CD Rate Loan to a Base Rate Loan on a day that is
                  not the last day of the relevant Interest Period,

including any such loss or expense  arising from the liquidation or reemployment
of funds obtained by it to maintain its  Eurodollar  Rate Loans or CD Rate Loans
or from fees  payable  to  terminate  the  deposits  from  which such funds were
obtained.  For purposes of  calculating  amounts  payable by the Borrower to the
Lenders under this Section and under subsection 3.6(a), (i) each Eurodollar Rate
Loan made by a Lender  and each  related  reserve,  special  deposit  or similar
requirement  shall be conclusively  deemed to have been funded at the LIBO-based
rate used in determining  the Eurodollar Rate for such Eurodollar Rate Loan by a
matching  deposit or other  borrowing in the interbank  eurodollar  market for a
comparable  amount and for a comparable  period,  whether or not such Eurodollar
Rate Loan is in fact so funded,  and (ii) each CD Rate Loan made by a Lender and
each  related  reserve,   special  deposit  or  similar   requirement  shall  be
conclusively  deemed to have been  funded at the rate  described  in  subsection
(b)(i)(bb)  of the CD  Rate  definition  in  Section  1 of this  Agreement  by a
matching  deposit or other borrowing in the CD market,  for a comparable  amount
and for a  comparable  period,  whether  or not such CD Rate  Loan is in fact so
funded.

      3.8   Certificates  of  Lenders.  Any  Lender  claiming  reimbursement  or
            compensation  under this  Section 3 shall  deliver  to the  Borrower
            (with a copy to the Agent) a certificate setting forth in reasonable
            detail  the  amount  payable  to  the  Lender   hereunder  and  such
            certificate  shall be conclusive  and binding on the Borrower in the
            absence of manifest error.

      3.9   Substitution  of Lenders.  Upon the receipt by the Borrower from any
            Lender (an  "Affected  Lender")  of a claim for  compensation  under
            Section 3.6, the  Borrower  may: (i) request the Affected  Lender to
            use its best  efforts  to  obtain a  replacement  bank or  financial
            institution  satisfactory  to the Borrower to acquire and assume all
            or a  ratable  part  of all of  such  Affected  Lender's  Loans  and
            Commitment (a "Replacement Lender"); (ii) request one or more of the
            other  Lenders  to acquire  and assume all or part of such  Affected
            Lender's Loans and Commitment (but no other Lender shall be required
            to do so);  or  (iii)  designate  a  Replacement  Lender.  Any  such
            designation of a Replacement Lender under clause (ii) or (iii) shall
            be subject to the prior written  consent of the Agent (which consent
            shall not be unreasonably withheld).

      3.10  Survival.  The  agreements  and  obligations of the Borrower in this
            Section 3 shall survive the payment of all other Obligations.

      4.       CONDITIONS.

      4.1   Conditions  Precedent to the  Effectiveness  of this Agreement.  The
            obligation  of each Lender to make its initial  extension  of credit
            hereunder is subject to the condition that the Agent has received on
            or  before  the  Closing  Date  all of the  following  in  form  and
            substance  satisfactory to the Agent and each Lender,  in sufficient
            copies for each Lender;

            (a)   This Agreement and the Notes executed by each party thereto.

            (b)   A copy of a resolution or resolutions  adopted by the Board of
                  Directors or Executive Committee of the Borrower, certified by
                  the  Secretary  or an  Assistant  Secretary of the Borrower as
                  being in full force and effect on the date hereof, authorizing
                  the execution,  delivery and performance of this Agreement and
                  the consummation of the transactions  contemplated hereby, and
                  a copy of the Certificate of Incorporation  and the By-Laws of
                  the Borrower, similarly certified.

            (c)   A  certificate,  signed  by  the  Secretary  or  an  Assistant
                  Secretary of the Borrower and dated the date hereof, as to the
                  incumbency of the person or persons  authorized to execute and
                  deliver this Agreement.

            (d)   A certificate  signed by the Chief  Financial  Officer or Vice
                  Chairman and Executive Vice President of the Borrower that, as
                  of the date hereof,  there has been no material adverse change
                  in its  consolidated  financial  condition  since December 31,
                  2000 not reflected on its Quarterly  Report on Form 10-Q filed
                  with the SEC for the period ending March 31, 2001.

            (e)   A  certificate,  signed  by  the  Secretary  or  an  Assistant
                  Secretary of the Borrower and dated the date hereof, as to the
                  persons  authorized to execute and deliver a Borrowing Advice,
                  a Notice of  Conversion/Continuation,  and the Revolving Notes
                  and the Term Notes. The Agent and each Lender may rely on such
                  certificate with respect to the Revolving Loans and Term Loans
                  hereunder  unless and until it shall have  received an updated
                  certificate  and,  after receipt of such updated  certificate,
                  similarly may rely thereon.

            (f)   A written opinion,  dated the date hereof,  of counsel for the
                  Borrower, in the form of Exhibit E.

            (g)   Evidence of payment by the  Borrower of all accrued and unpaid
                  fees, costs and expenses to the extent then due and payable on
                  the Closing  Date,  together  with  Attorney  Costs of Bank of
                  America  to the  extent  invoiced  prior to or on the  Closing
                  Date, plus such additional  amounts of Attorney Costs as shall
                  constitute Bank of America's  reasonable  estimate of Attorney
                  Costs  incurred  or to be  incurred  by it through the closing
                  proceedings  (provided that such estimate shall not thereafter
                  preclude final  settling of accounts  between the Borrower and
                  Bank of America);  including any such costs, fees and expenses
                  arising under or referenced in Sections 2.9 and 10.4.

            (h)   Written  evidence  that all of the Borrowing  Agreements  have
                  been or concurrently herewith are being terminated.

            (i)   A  certificate,  signed  by  the  Treasurer  or  an  Assistant
                  Treasurer  of the  Borrower  and dated as of the date  hereof,
                  which confirms that after giving effect to this Agreement, the
                  aggregate  principal  amount of credit  available under all of
                  the Borrower's committed unsecured revolving credit facilities
                  combined  will not  exceed  the  amount  authorized  under the
                  resolutions of the Borrower referenced in subsection 4.1(b).

      4.2   Conditions   Precedent  to  Revolving  Loans  and  Term  Loans.  The
            obligation of each Lender to make any Revolving Loan or Term Loan to
            be made by it (including its initial Revolving Loan), or to continue
            or convert any Loan under Section 2.5 is subject to the satisfaction
            of the following conditions precedent on the relevant Borrowing Date
            or Conversion/Continuation Date:

The  Agent   shall   have   received   a   Borrowing   Advice  or  a  Notice  of
Conversion/Continuation,  as  applicable.  Each  Borrowing  Advice  or Notice of
Conversion/Continuation   given  by  the  Borrower  shall  be  deemed  to  be  a
representation and warranty by the Borrower to each Lender,  effective on and as
of the date of such Notice and as of such Borrowing Date for a Revolving Loan or
Term Loan covered thereby, that (i) the representations and warranties set forth
in Section 5 hereof are true and  correct as of such date,  and (ii) no Event of
Default,  and no event  which  with the lapse of time or  notice  or both  would
become an Event of Default,  has occurred and is continuing.  No Lender shall be
required to make any Loan hereunder if:

            (a)   the Credit,  the Revolving  Credit  Facility (in the case of a
                  Revolving  Loan) or the Term Loan  Facility  (in the case of a
                  Term Loan) has been terminated; or

            (b)   any of the  representations  or warranties of the Borrower set
                  forth in Section 5 hereof  shall  prove to have been untrue in
                  any material  respect when made,  or when any Event of Default
                  or any event that, upon lapse of time or notice or both, would
                  become  an Event of  Default  as  defined  in  Section  8, has
                  occurred; or

            (c)   the Broker  Subsidiary  or SCM is in  violation of minimum net
                  capital requirements as described in Section 7.1; or

            (d)   the  Borrower's  Consolidated  Tangible Net Worth is below the
                  Minimum Tangible Net Worth as described in Section 7.2; or

            (e)   any amount  owing with  respect to any  Commitment  Fee or any
                  outstanding  Revolving  Loan  or  Term  Loan  or any  interest
                  thereon  or any  other  amount  payable  hereunder  is due and
                  unpaid.

      5.       REPRESENTATIONS AND WARRANTIES.

      The Borrower  represents and warrants to the Agent and each Lender,  as of
the date of delivery of this  Agreement and as of the date of any Revolving Loan
or Term Loan, as follows:

      5.1   Organization  and Good Standing.  The Borrower is a corporation duly
            organized,  validly  existing and in good standing under the laws of
            the state of Delaware and has full power,  authority and legal right
            and has all governmental  licenses,  authorizations,  qualifications
            and  approvals  required  to own  its  property  and  assets  and to
            transact  the  business  in  which  it is  engaged;  and  all of the
            outstanding  shares  of  capital  stock of  Borrower  have been duly
            authorized and validly issued, are fully paid and non-assessable.

      5.2   Corporate  Power  and  Authority.   The  Borrower  has  full  power,
            authority and legal right to execute and deliver, and to perform its
            obligations under, this Agreement,  and to borrow hereunder, and has
            taken all  necessary  corporate  and legal action to  authorize  the
            borrowings  hereunder on the terms and  conditions of this Agreement
            and to authorize the execution and delivery of this  Agreement,  and
            the performance of the terms thereof.

      5.3   Enforceability. This Agreement has been duly authorized and executed
            by the Borrower,  and when delivered to the Lenders will be a legal,
            valid and binding agreement of the Borrower, enforceable against the
            Borrower in  accordance  with its terms,  except,  in each case,  as
            enforcement  thereof  may be limited by  bankruptcy,  insolvency  or
            other laws relating to or affecting enforcement of creditors' rights
            or by general equity principles.

      5.4   No Violation of Laws or  Agreements.  The  execution and delivery of
            this  Agreement  by the Borrower  and the  performance  of the terms
            hereof will not violate any  provision of any law or  regulation  or
            any judgment,  order or  determination  of any court or governmental
            authority or of the charter or by-laws of, or any securities  issued
            by, the Borrower or any provision of any mortgage,  indenture,  loan
            or security agreement, or other instrument, to which the Borrower is
            a party or which purports to be binding upon it or any of its assets
            in any respect that reasonably  could be expected to have a material
            adverse effect on the Borrower and its Subsidiaries taken as a whole
            on a consolidated  basis; nor will the execution and the delivery of
            this  Agreement  by the Borrower  and the  performance  of the terms
            hereof  result in the  creation of any lien or security  interest on
            any assets of the Borrower  pursuant to the provisions of any of the
            foregoing.

      5.5   No Consents. Except as disclosed in writing by Borrower, no consents
            of others (including, without limitation, stockholders and creditors
            of the Borrower) nor any consents or  authorizations  of, exemptions
            by, or registrations, filings or declarations with, any Governmental
            Authority  are required to be obtained by the Borrower in connection
            with  the  execution   and  delivery  of  this   Agreement  and  the
            performance of the terms thereof.

      5.6   Financial Statements.  The consolidated  financial statements of the
            Borrower  contained in the  documents  previously  delivered to each
            Lender have been prepared in accordance with U.S. generally accepted
            accounting principles and present fairly the consolidated  financial
            position of the Borrower.

      5.7   Broker Subsidiary Licenses, Etc. The Broker Subsidiary possesses all
            material licenses,  permits and approvals  necessary for the conduct
            of its business as now  conducted  and as  presently  proposed to be
            conducted as are required by law or the applicable  rules of the SEC
            and the National Association of Securities Dealers, Inc.

      5.8   Broker  Subsidiary/Broker  Registration.  The Broker  Subsidiary  is
            registered as a broker-dealer  under the Securities  Exchange Act of
            1934, as amended.

      5.9   Broker Subsidiary/SIPC. The Broker Subsidiary is not in arrears with
            respect to any assessment  made upon it by the  Securities  Investor
            Protection Corporation, except for any assessment being contested by
            the Broker  Subsidiary in good faith by appropriate  proceedings and
            with  respect to which  adequate  reserves or other  provisions  are
            being maintained to the extent required by U.S.  generally  accepted
            accounting principles.

      5.10  Taxes. The Borrower has paid and discharged or caused to be paid and
            discharged all taxes, assessments, and governmental charges prior to
            the date on which the same would have become  delinquent,  except to
            the  extent  that  such  taxes,  assessments  or  charges  are being
            contested  in good  faith and by  appropriate  proceedings  by or on
            behalf of the Borrower and with respect to which  adequate  reserves
            or other  provisions are being  maintained to the extent required by
            U.S. generally accepted accounting principles.

      5.11  ERISA.  The Borrower is in  compliance  with the  provisions  of and
            regulations  under the Employee  Retirement  Income  Security Act of
            1974, as amended  ("ERISA"),  and the Internal Revenue Code of 1986,
            as amended, applicable to any pension or other employee benefit plan
            established or maintained by the Borrower or to which  contributions
            are made by the Borrower (the "Plans").  The Borrower has met all of
            the funding  standards  applicable  to each of its Plans,  and there
            exists no event or condition  that would permit the  institution  of
            proceedings  to  terminate  any of the Plans under  Section  4042 of
            ERISA. The estimated current value of the benefits vested under each
            of the Plans does not, and upon termination of any of the Plans will
            not,  exceed the estimated  current value of any such Plan's assets.
            The Borrower has not, with respect to any of the Plans, engaged in a
            prohibited  transaction set forth in Section 406 of ERISA or Section
            4975(c) of the Internal Revenue Code of 1986.

      5.12  No Extension of Credit for Default Remedy/Hostile  Acquisition.  The
            Borrower  will  not  use  any  amounts  borrowed  by it  under  this
            Agreement  to  remedy  a  default  under  any  mortgage,  indenture,
            agreement  or  instrument  under  which  there  may  be  issued  any
            Indebtedness of the Borrower to any bank or bank holding company, or
            their  respective  assignees,   for  borrowed  money.  Further,  the
            Borrower  will  not  use  any  amounts  advanced  to it  under  this
            Agreement for the immediate purpose of acquiring a company where the
            Board of  Directors  or other  governing  body of the  entity  being
            acquired has made (and not  rescinded) a public  statement  opposing
            such acquisition.

      5.13  Use of  Proceeds/Margin  Regulations.  The  Borrower  will  use  the
            proceeds  for  general  corporate   purposes,   including,   without
            limitation,  for the  back-up of the  issuance of  commercial  paper
            notes.  The Borrower  will not use the proceeds of any loan provided
            hereby in such a manner as to result in a violation  of  Regulations
            T, U or X of the Board of Governors of the Federal Reserve System.

      5.14  Authorized  Persons.  The  persons  named  for such  purpose  in the
            certificates  delivered  pursuant to  subsection  4.1(e)  hereof are
            authorized to execute Borrowing Advices.

      5.15  Material Contracts. Borrower is not in default in the performance or
            observance  of  any  material  obligation,  agreement,  covenant  or
            condition contained in any material contract,  indenture,  mortgage,
            loan agreement, note or lease to which the Borrower is a party or by
            which it may be bound.

      5.16  Litigation.  There is no action, suit or proceeding pending against,
            or  to  the  knowledge  of  the  Borrower,   threatened  against  or
            affecting, the Borrower or any of its Subsidiaries before any court,
            arbitrator,  governmental body, agency or official in which there is
            a significant  probability of an adverse decision which could have a
            material  adverse affect on the business or the financial  condition
            of the Borrower.

      5.17  Investment Company. The Borrower is not an "investment company" or a
            company  "controlled" by an "investment  company" within the meaning
            of the Investment Company Act of 1940, as amended.

      6.       AFFIRMATIVE COVENANTS.

      The Borrower  covenants and agrees that so long as any Lender shall have a
Commitment  hereunder  or any Loan or other  obligation  hereunder  shall remain
outstanding,  unpaid or unsatisfied and until full payment of all amounts due to
the Lenders  hereunder,  it will,  unless and to the extent the Required Lenders
waive compliance in writing:

      6.1   Notice of Events of  Default.  Give  prompt  notice to the Agent and
            each Lender,  no later than three Business Days after becoming aware
            thereof,  of any Event of Default or any event  that,  upon lapse of
            time or notice or both, would become an Event of Default.

      6.2   Financial  Statements.  Deliver  to the  Agent,  in form and  detail
            satisfactory  to the Agent and the Required  Lenders with sufficient
            copies  for each  Lender,  within  ten  Business  Days of the filing
            thereof with the SEC, a copy of each  registration  statement  filed
            under the Securities  Act of 1933, a copy of each filing  (including
            exhibits)  made by the  Borrower  with the SEC under the  Securities
            Exchange  Act of  1934,  as  amended,  accompanied  by a  compliance
            certificate  with an attached  schedule of calculations (in the form
            attached hereto as Schedule 6.2)  demonstrating  compliance with the
            Section  7.1 and 7.2  financial  covenants;  and,  in the  event the
            Borrower  requests  an  extension  of any such  filing from the SEC,
            promptly  (but not later than the second  Business Day following the
            filing of such request) deliver a copy of such request to the Agent.

      6.3   Insurance.  Maintain  and  keep in force in  adequate  amounts  such
            insurance as is usual in the business carried on by the Borrower and
            cause  the  Broker  Subsidiary  to  maintain  and  keep in  force in
            adequate  amounts such insurance as is usual in the business carried
            on by the Broker Subsidiary.

      6.4   Books and Records. Maintain adequate books, accounts and records and
            prepare all financial  statements  required  hereunder in accordance
            with U.S. generally accepted accounting principles and practices and
            in compliance  with the regulations of any  governmental  regulatory
            body having jurisdiction thereof.

      6.5   Change in Business.  Advise the Agent and such  Lender,  in a timely
            manner,  of  material  changes  to the  nature  of  business  of the
            Borrower  or the  Broker  Subsidiary  as at present  conducted.  The
            Broker Subsidiary is at present engaged in the business of providing
            financial services,  primarily to individual  investors and/or their
            advisors.

      7.    NEGATIVE COVENANTS.

      7.1   The Borrower  covenants  and agrees that so long as any Lender shall
            have any  Commitment  hereunder,  or any  Loan or other  obligation,
            shall  remain  outstanding,  unpaid or  unsatisfied  and until  full
            payment of all amounts due to the Lenders  hereunder,  unless and to
            the extent the Required Lenders waive compliance in writing:

      7.2   Net Capital.  The Borrower will not permit the Broker  Subsidiary to
            allow (a) the  average  of two  consecutive  month-end  Net  Capital
            Ratios to be less than 7%, or (b) any month-end Net Capital Ratio to
            be less than 5%. The Borrower similarly will not permit SCM to allow
            (i) the average of two  consecutive  month-end Net Capital Ratios to
            be less than 7%, or (ii) any  month-end Net Capital Ratio to be less
            than 5%.

      7.3   Minimum  Tangible  Net  Worth.  The  Borrower  will  not  allow  its
            Consolidated  Tangible Net Worth to fall below the Minimum  Tangible
            Net Worth.

      7.4   Merger/Disposition  of  Assets.  The  Borrower  will not (i)  permit
            either  Broker  Subsidiary  or  Intermediate  Parent to (a) merge or
            consolidate,   unless  the   surviving   company  is  a   Controlled
            Subsidiary,  or (b) convey or  transfer  its  properties  and assets
            substantially  as an  entirety  except  to  one or  more  Controlled
            Subsidiaries; or (ii) except as permitted by subsection 7.3(i) sell,
            transfer  or  otherwise  dispose  of  any  voting  stock  of  Broker
            Subsidiary  or   Intermediate   Parent,   or  permit  either  Broker
            Subsidiary  or  Intermediate  Parent  to  issue,  sell or  otherwise
            dispose of any of its voting stock,  unless,  after giving effect to
            any such transaction,  Broker Subsidiary or Intermediate  Parent, as
            the case may be, remains a Controlled Subsidiary.

      7.5   Broker  Subsidiary  Indebtedness.  The Borrower  will not permit the
            Broker Subsidiary to create,  incur or assume any Indebtedness other
            than:

            (a)   (i)  Indebtedness  to  customers,  other  brokers or  dealers,
                  securities  exchanges or securities  markets,  self-regulatory
                  organizations,   clearing   houses   and   like   institutions
                  (including,  without limitation,  letters of credit or similar
                  credit  support  devices  issued  for the  account  of  Broker
                  Subsidiary  and for the  benefit  of any of the  foregoing  in
                  order  to  comply  with  any  margin,  collateral  or  similar
                  requirements  imposed  by or  for  the  benefit  of any of the
                  foregoing),  (ii) "broker  call"  credit,  (iii)  indebtedness
                  consisting of borrowings  secured  solely by margin loans made
                  by Broker Subsidiary,  together with any underlying collateral
                  of Broker  Subsidiary,  (iv) stock loans,  (v)  obligations to
                  banks for disbursement  accounts,  (vi) Indebtedness  incurred
                  for  the   purchase  of  tangible   personal   property  on  a
                  non-recourse  basis or for the  leasing of  tangible  personal
                  property  under  a  capitalized   lease,   (vii)  Indebtedness
                  incurred  for  the  purchase,  installation  or  servicing  of
                  computer  equipment  and  software,  and  (viii)  Indebtedness
                  incurred  in the  ordinary  course of the Broker  Subsidiary's
                  business,  to the extent not already included in the foregoing
                  clauses (i) through (vii);

            (b)   intercompany Indebtedness; and

            (c)   other    Indebtedness   in   the   aggregate   not   exceeding
                  $100,000,000.

      7.6   Indebtedness Secured by Subsidiary Stock. The Borrower will not, and
            will not permit any Subsidiary at any time directly or indirectly to
            create, assume, incur or permit to exist any Indebtedness secured by
            a pledge,  lien or other encumbrance  (hereinafter  referred to as a
            "lien")  on the  voting  stock  of  any  Subsidiary  without  making
            effective  provision  whereby the Revolving Notes and the Term Notes
            shall be secured equally and ratably with such secured  Indebtedness
            so  long  as  other  Indebtedness  shall  be so  secured;  provided,
            however,  that the  foregoing  covenant  shall not be  applicable to
            Permitted Liens (as defined in Section 7.6 below).

      7.7   Liens and Encumbrances.  The Borrower will not create, incur, assume
            or suffer to exist any lien or  encumbrance  upon or with respect to
            any of its  properties,  whether  now owned or  hereafter  acquired,
            except the following (the "Permitted Liens"):

            (a)   liens securing taxes,  assessments or governmental  charges or
                  levies,   or  in  connection   with   workers'   compensation,
                  unemployment insurance or social security obligations,  or the
                  claims  or  demands  of  materialmen,   mechanics,   carriers,
                  warehousemen,   landlords  and  other  like  persons  not  yet
                  delinquent  or which  are  being  contested  in good  faith by
                  appropriate   proceedings   with  respect  to  which  adequate
                  reserves  or other  provisions  are  being  maintained  to the
                  extent  required  by  U.S.   generally   accepted   accounting
                  principles;

            (b)   liens not for borrowed money  incidental to the conduct of its
                  business or the ownership of property  that do not  materially
                  detract from the value of any item of property;

            (c)   attachment,  judgment or other  similar  liens  arising in the
                  connection  with  court   proceedings  that  do  not,  in  the
                  aggregate,  materially detract from the value of its property,
                  materially  impair  the use  thereof in the  operation  of its
                  businesses  and (i) that are discharged or stayed within sixty
                  (60) days of  attachment  or levy, or (ii) payment of which is
                  covered  in  full   (subject  to  customary   and   reasonable
                  deductibles) by insurance or surety bonds; and

            (d)   liens  existing at Closing Date provided that the  obligations
                  secured thereby are not increased.

      8.    EVENTS OF DEFAULT.

      8.1   Defaults.  The  occurrence  of  any of the  following  events  shall
            constitute an "Event of Default":

            (a)   The Borrower  shall fail to pay any  interest  with respect to
                  the Revolving Notes or the Term Notes or any Commitment Fee in
                  accordance  with the terms  hereof  within 10 days  after such
                  payment is due.

            (b)   The Borrower  shall fail to pay any principal  with respect to
                  the Revolving  Notes or the Term Notes in accordance  with the
                  terms thereof on the date when due.

            (c)   Any  representation or warranty made by the Borrower herein or
                  hereunder or in any certificate or other document furnished by
                  the Borrower hereunder shall prove to have been incorrect when
                  made  (or  deemed  made)  in any  respect  that is  materially
                  adverse to the  interests  of the Lenders or their  rights and
                  remedies hereunder.

            (d)   Except as specified in (a) and (b) above,  the Borrower  shall
                  default in the performance of, or breach,  any covenant of the
                  Borrower with respect to this  Agreement,  and such default or
                  breach shall  continue for a period of thirty days after there
                  has been  given,  by  registered  or  certified  mail,  to the
                  Borrower by the Agent a written notice specifying such default
                  or breach and requiring it to be remedied.

            (e)   An event of default as  defined  in any  mortgage,  indenture,
                  agreement or instrument under which there may be issued, or by
                  which there may be secured or evidenced,  any  Indebtedness of
                  the Borrower in a principal amount not less than  $75,000,000,
                  shall  have  occurred  and shall  result in such  Indebtedness
                  becoming or being  declared due and payable  prior to the date
                  on which it otherwise would become due and payable;  provided,
                  however,  that if such event of default  shall be  remedied or
                  cured  by the  Borrower,  or  waived  by the  holders  of such
                  Indebtedness,  within  twenty  days  after  the  Borrower  has
                  received   written   notice  of  such  event  of  default  and
                  acceleration,  then the Event of Default  hereunder  by reason
                  thereof  shall  be  deemed  likewise  to have  thereupon  been
                  remedied, cured or waived without further action upon the part
                  of either the Borrower or the Agent and Lenders.

            (f)   Any   involuntary   proceeding   shall  be   commenced  or  an
                  involuntary  petition  shall be filed in a court of  competent
                  jurisdiction  seeking (i) relief  against the  Borrower or the
                  Broker Subsidiary, or against all or a substantial part of the
                  property  of  either  of them,  under  Title 11 of the  United
                  States Code or any other federal, state or foreign bankruptcy,
                  insolvency,   reorganization   or   similar   law,   (ii)  the
                  appointment of a receiver,  liquidator,  assignee,  custodian,
                  trustee,  sequestrator or similar official for the Borrower or
                  the Broker  Subsidiary or for all or a substantial part of the
                  property  of  either  of them,  or  (iii)  the  winding-up  or
                  liquidation of the Borrower or the Broker Subsidiary;  and, in
                  any such case,  such  involuntary  proceeding  or  involuntary
                  petition  shall continue  undismissed  for 60 days, or, before
                  such  60-day  period has  elapsed,  there  shall be entered an
                  order  or  decree  ordering  the  relief   requested  in  such
                  involuntary proceeding or involuntary petition.

            (g)   The  Borrower  or  the  Broker  Subsidiary  shall  commence  a
                  voluntary case under any applicable bankruptcy,  insolvency or
                  other similar law now or hereafter in effect, or shall consent
                  to the entry of an order for  relief  in an  involuntary  case
                  under  such law,  or shall  consent to the  appointment  of or
                  taking  possession  by  a  receiver,   liquidator,   assignee,
                  custodian,  trustee, sequestrator (or similar official) of the
                  Borrower or Broker  Subsidiary or for any substantial  part of
                  its   respective   properties,   or  shall  make  any  general
                  assignment  for  the  benefit  of  creditors,  or  shall  fail
                  generally  to pay its  respective  debts as they become due or
                  shall take any corporate  action in  furtherance of any of the
                  foregoing.

            (h)   A final  judgment  or  judgments  for the  payment of money in
                  excess  of  $75,000,000  in the  aggregate  shall  be  entered
                  against  the  Borrower  by a  court  or  courts  of  competent
                  jurisdiction,  and  the  same  shall  not  be  discharged  (or
                  provisions shall not be made for such discharge), or a stay of
                  execution  thereof shall not be procured,  within 30 days from
                  the date of entry thereof and the Borrower  shall not,  within
                  said period of 30 days,  or such longer  period  during  which
                  execution of the same shall have been stayed, appeal therefrom
                  and cause the  execution  thereof  to be  stayed  during  such
                  appeal.

            (i)   At any time after a Change in Control,  the Borrower  fails to
                  maintain at least one of the following  credit ratings for its
                  Senior  Medium-Term  Notes,  Series A: (a) BBB- (or better) by
                  Standard & Poor's  Rating  Group,  or (b) Baa3 (or  better) by
                  Moody's Investor Service.

      8.2   Remedies. If an Event of Default occurs and is continuing,  then and
            in every such case the Agent shall,  at the request of, or may, with
            the consent of, the Required  Lenders (i) declare the  Commitment of
            each  Lender  to  make  Loans  to  be  terminated   whereupon   such
            Commitments  and  obligation  shall be  terminated,  and declare the
            unpaid  principal of all outstanding  Loans, any and all accrued and
            unpaid  interest,  any accrued and unpaid  Commitment  Fees,  or any
            other amounts owing or payable  under the Notes,  to be  immediately
            due and payable,  by a notice in writing to the  Borrower,  and upon
            such declaration such principal, interest, Commitment Fees, or other
            amounts   payable   hereunder  and  accrued   thereon  shall  become
            immediately  due and payable,  together with any funding losses that
            may  result  as  a   consequence   of  such   declaration,   without
            presentment,  demand,  protest or other  notice of any kind,  all of
            which are expressly waived by the Borrower;  provided, however, that
            in the case of any of the Events of Default  specified in subsection
            (f) or (g) of Section 8.1,  automatically  without any notice to the
            Borrower  or  any  other  act by  the  Agent,  the  Credit  and  the
            obligations  of  each  Lender  to  make  Loans  shall  automatically
            terminate and the unpaid principal amount of all outstanding  Loans,
            any accrued and unpaid interest,  any accrued and unpaid  Commitment
            Fees or any other amounts payable hereunder shall become immediately
            due and payable, together with any funding losses that may result as
            a  consequence  thereof,  without  further  act of the  Agent or any
            Lender and without presentment,  demand,  protest or other notice of
            any kind, all of which are expressly waived by the Borrower.

9.    THE AGENT.

      9.1   Appointment  and  Authorization.   Each  Lender  hereby  irrevocably
            (subject to Section 9.9)  appoints,  designates  and  authorizes the
            Agent to take such action on its behalf under the provisions of this
            Agreement  and each other Loan  Document and to exercise such powers
            and perform  such  duties as are  expressly  delegated  to it by the
            terms of this  Agreement or any other Loan  Document,  together with
            such powers as are reasonably  incidental  thereto.  Notwithstanding
            any provision to the contrary contained  elsewhere in this Agreement
            or in any other Loan  Document,  the Agent shall not have any duties
            or responsibilities  except those expressly set forth, nor shall the
            Agent have or be deemed to have any fiduciary  relationship with any
            Lender,  and  no  implied  covenants,  functions,  responsibilities,
            duties, obligations or liabilities shall be read into this Agreement
            or any other Loan Document or otherwise exist against the Agent.

      9.2   Delegation of Duties.  The Agent may execute any of its duties under
            this  Agreement  or any other Loan  Document  by or through  agents,
            employees  or  attorneys-in-fact  and shall be entitled to advice of
            counsel  concerning all matters pertaining to such duties. The Agent
            shall not be  responsible  for the  negligence  or misconduct of any
            agent or attorney-in-fact that it selects with reasonable care.

      9.3   Liability of Agent. None of the  Agent-Related  Persons shall (i) be
            liable  for any  action  taken or omitted to be taken by any of them
            under  or in  connection  with  this  Agreement  or any  other  Loan
            Document or the transactions contemplated hereby (except for its own
            gross negligence or willful  misconduct),  or (ii) be responsible in
            any  manner  to any of  the  Lenders  for  any  recital,  statement,
            representation or warranty made by the Borrower or any Subsidiary or
            Affiliate of the Borrower, or any officer thereof, contained in this
            Agreement  or in any other  Loan  Document,  or in any  certificate,
            report,  statement or other document referred to or provided for in,
            or received by the Agent under or in connection with, this Agreement
            or  any  other  Loan  Document,  or  the  validity,   effectiveness,
            genuineness,  enforceability or sufficiency of this Agreement or any
            other Loan Document, or for any failure of the Borrower or any other
            party to any Loan Document to perform its  obligations  hereunder or
            thereunder. No Agent-Related Person shall be under any obligation to
            any  Lender to  ascertain  or to  inquire  as to the  observance  or
            performance of any of the agreements contained in, or conditions of,
            this  Agreement  or any  other  Loan  Document,  or to  inspect  the
            properties,  books  or  records  of  the  Borrower  or  any  of  the
            Borrower's Subsidiaries or Affiliates.

      9.4   Reliance by Agent.

            (a)   The  Agent  shall  be  entitled  to rely,  and  shall be fully
                  protected in relying,  upon any writing,  resolution,  notice,
                  consent, certificate,  affidavit, letter, telegram, facsimile,
                  telex or telephone  message,  statement  or other  document or
                  conversation  believed  by it to be genuine and correct and to
                  have  been  signed,  sent  or  made by the  proper  Person  or
                  Persons,  and upon  advice  and  statements  of legal  counsel
                  (including counsel to the Borrower),  independent  accountants
                  and other  experts  selected by the Agent.  The Agent shall be
                  fully  justified  in  failing or  refusing  to take any action
                  under  this  Agreement  or any other Loan  Document  unless it
                  shall first receive such advice or concurrence of the Required
                  Lenders as it deems  appropriate  and, if it so  requests,  it
                  shall first be indemnified to its  satisfaction by the Lenders
                  against  any  and  all  liability  and  expense  which  may be
                  incurred by it by reason of taking or  continuing  to take any
                  such action.  The Agent shall in all cases be fully  protected
                  in acting, or in refraining from acting,  under this Agreement
                  or any other Loan  Document  in  accordance  with a request or
                  consent  of the  Required  Lenders  and such  request  and any
                  action  taken or  failure  to act  pursuant  thereto  shall be
                  binding upon all of the Lenders.

            (b)   For purposes of  determining  compliance  with the  conditions
                  specified in Section 4.1,  each Lender that has executed  this
                  Agreement  shall be deemed to have  consented to,  approved or
                  accepted  or to be  satisfied  with,  each  document  or other
                  matter  either  sent by  Agent  to such  Lender  for  consent,
                  approval,  acceptance or satisfaction,  or required thereunder
                  to  be   consented  to  or  approved  by  or   acceptable   or
                  satisfactory to the Lender.

      9.5   Notice of Default.  The Agent shall not be deemed to have  knowledge
            or notice of the  occurrence  of any  Default  or Event of  Default,
            except  with  respect  to  defaults  in the  payment  of  principal,
            interest  and fees  required to be paid to the Agent for the account
            of the Lenders,  unless the Agent shall have received written notice
            from  a  Lender  or  the  Borrower   referring  to  this  Agreement,
            describing  such  Default or Event of Default and stating  that such
            notice is a "notice of  default".  The Agent will notify the Lenders
            of its receipt of any such notice.  The Agent shall take such action
            with respect to such Default or Event of Default as may be requested
            by the Required  Lenders in  accordance  with  Section 8;  provided,
            however,  that  unless  and until the  Agent has  received  any such
            request,  the Agent may (but  shall not be  obligated  to) take such
            action,  or refrain  from taking such  action,  with respect to such
            Default or Event of Default  as it shall  deem  advisable  or in the
            best interest of the Lenders.

      9.6   Credit  Decision.   Each  Lender   acknowledges  that  none  of  the
            Agent-Related  Persons has made any representation or warranty to it
            and that no act by the Agent hereinafter taken, including any review
            of the affairs of the Borrower and its Subsidiaries, shall be deemed
            to constitute any  representation  or warranty by any  Agent-Related
            Person to any Lender.  Each Lender  represents  to the Agent that it
            has,  independently  and  without  reliance  upon any  Agent-Related
            Person and based on such documents and  information as it has deemed
            appropriate,  made its own appraisal of and  investigation  into the
            business,  prospects,  operations,  property,  financial  and  other
            condition and creditworthiness of the Borrower and its Subsidiaries,
            and all applicable bank regulatory laws relating to the transactions
            contemplated  hereby,  and made its own  decision to enter into this
            Agreement  and to extend  credit  to the  Borrower  hereunder.  Each
            Lender  also  represents  that it will,  independently  and  without
            reliance upon any  Agent-Related  Person and based on such documents
            and information as it shall deem  appropriate at the time,  continue
            to make its own credit analysis,  appraisals and decisions in taking
            or not  taking  action  under  this  Agreement  and the  other  Loan
            Documents,  and to make such investigations as it deems necessary to
            inform itself as to the business, prospects,  operations,  property,
            financial and other condition and  creditworthiness of the Borrower.
            Except for notices,  reports and other  documents  expressly  herein
            required  to be  furnished  to the  Lenders by the Agent,  the Agent
            shall not have any duty or responsibility to provide any Lender with
            any credit or other information concerning the business,  prospects,
            operations,    property,    financial   and   other   condition   or
            creditworthiness  of the Borrower which may come into the possession
            of any of the Agent-Related Persons.

      9.7   Indemnification   of  Agent.   Whether   or  not  the   transactions
            contemplated  hereby are  consummated,  the Lenders shall  indemnify
            upon demand the Agent-Related  Persons (to the extent not reimbursed
            by or on behalf of the Borrower and without  limiting the obligation
            of the  Borrower to do so),  pro rata,  from and against any and all
            Indemnified Liabilities;  provided, however, that no Lender shall be
            liable for the payment to the  Agent-Related  Persons of any portion
            of such  Indemnified  Liabilities  resulting  solely  from  any such
            Person's gross negligence or willful misconduct.  Without limitation
            of the foregoing,  each Lender shall reimburse the Agent upon demand
            for its  ratable  share,  of any  costs  or  out-of-pocket  expenses
            (including  Attorney Costs) incurred by the Agent in connection with
            the preparation, execution, delivery, administration,  modification,
            amendment  or  enforcement  (whether  through  negotiations,   legal
            proceedings  or otherwise)  of, or legal advice in respect of rights
            or responsibilities under, this Agreement,  any other Loan Document,
            or any document  contemplated by or referred to herein to the extent
            that the Agent is not  reimbursed  for such expenses by or on behalf
            of the Borrower.  The  undertaking in this Section shall survive the
            payment  of  all  Obligations   hereunder  and  the  resignation  or
            replacement of the Agent.

      9.8   Agent in Individual Capacity. Bank of America and its Affiliates may
            make loans to,  issue  letters of credit for the account of,  accept
            deposits from,  acquire equity  interests in and generally engage in
            any kind of banking,  trust,  financial  advisory,  underwriting  or
            other business with the Borrower and its Subsidiaries and Affiliates
            as though Bank of America were not the Agent  hereunder  and without
            notice to or consent of the Lenders.  The Lenders  acknowledge that,
            pursuant to such  activities,  Bank of America or its Affiliates may
            receive  information   regarding  the  Borrower  or  its  Affiliates
            (including  information  that  may  be  subject  to  confidentiality
            obligations  in  favor  of the  Borrower  or  such  Subsidiary)  and
            acknowledge  that the Agent shall be under no  obligation to provide
            such information to them. With respect to its Loans, Bank of America
            shall have the same rights and powers  under this  Agreement  as any
            other  Lender  and may  exercise  the same as though it were not the
            Agent.

      9.9   Successor  Agent.  The Agent may, and at the request of the Required
            Lenders  shall,  resign as Agent upon 30 days' notice to the Lenders
            and  Borrower.  If the  Agent  resigns  under  this  Agreement,  the
            Required  Lenders,  with the consent of the Borrower,  which consent
            shall not be  unreasonably  withheld,  shall  appoint from among the
            Lenders a successor  agent for the  Lenders  which  successor  agent
            shall  be  approved  by  the  Borrower.  If no  successor  agent  is
            appointed  prior to the  effective  date of the  resignation  of the
            Agent,  the Agent with the consent of the  Borrower,  which  consent
            shall not be unreasonably  withheld,  may appoint,  after consulting
            with the Lenders and the Borrower,  a successor agent from among the
            Lenders.  Upon the acceptance of its  appointment as successor agent
            hereunder,  such  successor  agent shall  succeed to all the rights,
            powers and duties of the retiring  Agent and the term "Agent"  shall
            mean such  successor  agent and the  retiring  Agent's  appointment,
            powers and duties as Agent shall be  terminated.  After any retiring
            Agent's  resignation  hereunder  as Agent,  the  provisions  of this
            Section 9 and  Sections  10.4 and 10.5 shall inure to its benefit as
            to any actions taken or omitted to be taken by it while it was Agent
            under this Agreement. If no successor agent has accepted appointment
            as Agent by the date which is 30 days  following a retiring  Agent's
            notice  of  resignation,  the  retiring  Agent's  resignation  shall
            nevertheless  thereupon  become  effective  and  the  Lenders  shall
            perform all of the duties of the Agent hereunder until such time, if
            any, as the Required  Lenders  appoint a successor agent as provided
            for above.  The retiring Agent shall refund to Borrower that portion
            of any  agency  fee paid to such  Agent as is not earned due to such
            Agent's   resignation,   prorated  to  the  date  of  such   Agent's
            resignation.

      9.10  Withholding Tax.

            (a)   If any Lender is a "foreign corporation, partnership or trust"
                  within  the  meaning  of  the  Code  and  such  Lender  claims
                  exemption from, or a reduction of, U.S.  withholding tax under
                  Section 1441 or 1442 of the Code,  such Lender agrees with and
                  in favor of the Agent, to deliver to the Agent:

                  (i)   if such Lender claims an exemption  from, or a reduction
                        of,  withholding  tax under a United  States tax treaty,
                        properly completed IRS Form W-8BEN before the payment of
                        any interest in the first  calendar  year and before the
                        payment of any interest in any subsequent  calendar year
                        during which the Form W-8BEN (or any successor  thereto)
                        then in effect expires;

                  (ii)  if such  Lender  claims  that  interest  paid under this
                        Agreement is exempt from United States  withholding  tax
                        because it is effectively connected with a United States
                        trade or business of such Lender, two properly completed
                        copies of IRS Form W-8ECI or any successor  form thereto
                        before the  payment of any  interest is due in the first
                        taxable  year of such  Lender and before the  payment of
                        any  interest  in any  subsequent  calendar  year during
                        which the Form W-8ECI (or any successor thereto) then in
                        effect expires; and

                  (iii) such  other form or forms as may be  required  under the
                        Code or other laws of the United  States as a  condition
                        to  exemption  from,  or  reduction  of,  United  States
                        withholding tax.

Such Lender agrees to promptly notify the Agent of any change  in  circumstances
which would modify or render invalid any claimed exemption or reduction.

            (b)   If  any  Lender  claims   exemption  from,  or  reduction  of,
                  withholding  tax under a United States tax treaty by providing
                  IRS Form  W-8BEN  and such  Lender  sells,  assigns,  grants a
                  participation  in, or otherwise  transfers  all or part of the
                  Obligations of the Company to such Lender,  such Lender agrees
                  to notify the Agent of the percentage amount in which it is no
                  longer the  beneficial  owner of Obligations of the Company to
                  such  Lender.  To the extent of such  percentage  amount,  the
                  Agent  will  treat  such  Lender's  IRS  Form  W-8BEN  or  any
                  successor form thereto as no longer valid.

            (c)   If  any  Lender   claiming   exemption   from  United   States
                  withholding  tax by filing  IRS Form  W-8ECI or any  successor
                  form  thereto  with  the  Agent  sells,   assigns,   grants  a
                  participation  in, or otherwise  transfers  all or part of the
                  Obligations of the Company to such Lender,  such Lender agrees
                  to  undertake  sole  responsibility  for  complying  with  the
                  withholding tax requirements imposed by Sections 1441 and 1442
                  of the Code.

            (d)   If any Lender is  entitled to a  reduction  in the  applicable
                  withholding  tax,  the Agent may  withhold  from any  interest
                  payment to such Lender an amount  equivalent to the applicable
                  withholding tax after taking into account such  reduction.  If
                  the forms or other documentation required by subsection (a) of
                  this  Section are not  delivered to the Agent or if any Lender
                  which is a "foreign corporation,  partnership or trust" within
                  the  meaning of the Code is not  entitled  to claim  exemption
                  from or a reduction of U.S. withholding tax under Section 1441
                  or 1442 of the Code,  then the Agent shall  withhold  from any
                  interest  payment to such Lender not  providing  such forms or
                  other  documentation  an amount  equivalent to the  applicable
                  withholding tax.

            (e)   If the IRS or any other  Governmental  Authority of the United
                  States or other  jurisdiction  asserts a claim  that the Agent
                  did not properly  withhold tax from amounts paid to or for the
                  account of any Lender  (because the  appropriate  form was not
                  delivered,  was not properly executed,  or because such Lender
                  failed to notify the Agent of a change in circumstances  which
                  rendered the exemption from, or reduction of,  withholding tax
                  ineffective,  or for any other  reason  other than the Agent's
                  gross  negligence  or willful  misconduct)  such Lender  shall
                  indemnify  the Agent fully for all amounts  paid,  directly or
                  indirectly,  by  the  Agent  as tax  or  otherwise,  including
                  penalties and interest, and including any taxes imposed by any
                  jurisdiction  on the  amounts  payable to the Agent under this
                  Section,  together  with all  costs  and  expenses  (including
                  Attorney  Costs).  The  obligation  of the Lenders  under this
                  subsection  shall survive the payment of all  Obligations  and
                  the resignation or replacement of the Agent.

      9.11  Co-Agents.  None of the  Lenders  identified  on the facing  page or
            signature pages of this Agreement as a "co-agent", "managing agent",
            "syndication  agent" or "documentation  agent" shall have any right,
            power,  obligation,  liability,  responsibility  or duty  under this
            Agreement  other  than  those  applicable  to all  Lenders  as such.
            Without limiting the foregoing, none of the Lenders so identified as
            a "co-agent",  "syndication  agent" or  "documentation  agent" shall
            have or be  deemed  to have  any  fiduciary  relationship  with  any
            Lender.  Each Lender  acknowledges that it has not relied,  and will
            not rely,  on any of the Lenders so  identified in deciding to enter
            into this Agreement or in taking or not taking action hereunder.

      10.   MISCELLANEOUS.

      10.1  Amendments  and Waivers.  No amendment or waiver of any provision of
            this  Agreement  or any other Loan  Document,  and no  consent  with
            respect  to  any  departure  by  the  Borrower  or  any   applicable
            Subsidiary therefrom, shall be effective unless the same shall be in
            writing and signed by the  Required  Lenders (or by the Agent at the
            written  request  of the  Required  Lenders)  and the  Borrower  and
            acknowledged by the Agent, and then any such waiver or consent shall
            be  effective  only in the  specific  instance  and for the specific
            purpose for which  given;  provided,  however,  that no such waiver,
            amendment, or consent shall, unless in writing and signed by all the
            Lenders and the Borrower and  acknowledged  by the Agent,  do any of
            the following:

            (a)   increase or extend the  Commitment of any Lender (or reinstate
                  any Commitment terminated pursuant to Section 8.2);

            (b)   postpone  or delay  any date  fixed by this  Agreement  or any
                  other Loan  Document for any payment of  principal,  interest,
                  fees or  other  amounts  due to the  Lenders  (or any of them)
                  hereunder or under any other Loan Document;

            (c)   reduce the  principal  of, or the rate of  interest  specified
                  herein on any Loan, or (subject to clause (ii) below) any fees
                  or other  amounts  payable  hereunder  or under any other Loan
                  Document;

            (d)   change the  percentage of the  Commitments or of the aggregate
                  unpaid principal amount of the Loans which is required for the
                  Lenders or any of them to take any action hereunder; or

            (e)   amend this Section,  or Section 2.13, or any provision  herein
                  providing for consent or other action by all Lenders;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the  Required  Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document,  and (ii) the Fee Letter may be amended or
rights or privileges  thereunder  waived,  in a writing  executed by the parties
thereto.

      10.2  Notices.

            (a)   All  notices,  requests and other  communications  shall be in
                  writing  (including,  unless the context  expressly  otherwise
                  provides, by facsimile transmission,  provided that any matter
                  transmitted by the Borrower by facsimile  shall be immediately
                  confirmed by a telephone  call to the  recipient at the number
                  specified on Schedule 10.2).

            (b)   All such  notices,  requests and  communications  shall,  when
                  transmitted by overnight delivery, or faxed, be effective when
                  delivered for overnight (next-day) delivery, or transmitted in
                  legible form by facsimile machine, respectively, or if mailed,
                  upon the third  Business Day after the date deposited into the
                  U.S. mail, or if delivered, upon delivery; except that notices
                  pursuant  to  Section  2 or 9  shall  not be  effective  until
                  actually received by the Agent.

            (c)   Any  agreement of the Agent and the Lenders  herein to receive
                  certain  notices by  telephone  or facsimile is solely for the
                  convenience and at the request of the Borrower.  The Agent and
                  the Lenders  shall be entitled to rely on the authority of any
                  Person  purporting  to  be  a  Person  who  is  named  in  the
                  then-current  certificate  delivered  pursuant  to  subsection
                  4.1(e) hereof as authorized to execute Borrowing Advices (each
                  an  "Authorized  Person")  and the Lenders  shall not have any
                  liability  to the  Borrower or other  Person on account of any
                  action  taken or not  taken by the  Agent  or the  Lenders  in
                  reliance upon such  telephonic or facsimile  notice,  provided
                  the Agent and the Lenders reasonably believe such Person to be
                  an Authorized  Person. The obligation of the Borrower to repay
                  the Loans  shall not be  affected  in any way to any extent by
                  any  failure by the Agent and the  Lenders to receive  written
                  confirmation  of any  telephonic  or  facsimile  notice or the
                  receipt by the Agent and the Lenders of a  confirmation  which
                  is at variance with the terms  understood by the Agent and the
                  Lenders to be contained in the telephonic or facsimile notice.

      10.3  No Waiver-Cumulative  Remedies.  No failure to exercise and no delay
            in  exercising,  on the part of the Agent or any Lender,  any right,
            remedy,  power or  privilege  hereunder,  shall  operate as a waiver
            thereof,  nor shall any  single or  partial  exercise  of any right,
            remedy,  power or privilege  hereunder preclude any other or further
            exercise thereof or the exercise of any other right,  remedy,  power
            or privilege.

      10.4  Costs and Expenses. The Borrower shall:

            (a)   whether  or  not  the  transactions  contemplated  hereby  are
                  consummated, pay or reimburse Bank of America including in its
                  capacity as Agent and Lender  within five  Business Days after
                  demand,  subject to subsection 4.1(g) for all reasonable costs
                  and  expenses  incurred  by Bank of America  including  in its
                  capacity   as  Agent  and  Lender  in   connection   with  the
                  development,   preparation,   delivery,   administration   and
                  execution  of,  and  any  amendment,   supplement,  waiver  or
                  modification  to (in each case,  whether or not  consummated),
                  this  Agreement,  any Loan  Document  and any other  documents
                  prepared  in  connection   herewith  or  therewith,   and  the
                  consummation  of  the  transactions  contemplated  hereby  and
                  thereby,  including reasonable Attorney Costs incurred by Bank
                  of America (including in its capacity as Agent and Lender with
                  respect thereto); and

            (b)   pay or  reimburse  the Agent,  the  Arranger  and each  Lender
                  within five Business Days after demand  (subject to subsection
                  4.1(g))  for all  reasonable  costs  and  expenses  (including
                  reasonable Attorney Costs) incurred by them in connection with
                  the enforcement, attempted enforcement, or preservation of any
                  rights or  remedies  under  this  Agreement  or any other Loan
                  Document  during the existence of an Event of Default or after
                  acceleration  of the Loans  (including in connection  with any
                  "workout" or restructuring  regarding the Loans, and including
                  in any  Insolvency  Proceeding  or appellate  proceeding).  In
                  connection with any claim,  demand,  action or cause of action
                  relating to the  enforcement,  preservation or exercise of any
                  rights or remedies  covered by this  Section  10.4 against the
                  Borrower,  all Lenders shall be  represented by the same legal
                  counsel selected by such Lenders; provided, that if such legal
                  counsel  determines in good faith that  representing  all such
                  Lenders would or could result in a conflict of interest  under
                  laws or ethical principles applicable to such legal counsel or
                  that a claim is available to a Lender that is not available to
                  all such Lenders,  then to the extent reasonably  necessary to
                  avoid such a conflict of interest or to permit an  unqualified
                  assertion  of such a claim,  each Lender  shall be entitled to
                  separate  representation  by legal  counsel  selected  by that
                  Lender,  with all such legal counsel using reasonable  efforts
                  to avoid unnecessary  duplication of effort by counsel for all
                  Lenders.

      10.5  Borrower   Indemnification.   Whether   or  not   the   transactions
            contemplated  hereby are  consummated,  the Borrower shall indemnify
            and hold the Agent-Related  Persons, and each Lender and each of its
            respective  officers,  directors,  employees,  counsel,  agents  and
            attorneys-in-fact  (each, an "Indemnified Person") harmless from and
            against  any  and all  liabilities,  obligations,  losses,  damages,
            penalties,  actions,  judgments, suits, costs, charges, expenses and
            disbursements  (including  Attorney  Costs)  of any  kind or  nature
            whatsoever  which may at any time  (including at any time  following
            repayment  of  the  Loans  and  the   termination,   resignation  or
            replacement  of the Agent or  replacement  of any Lender) be imposed
            on,  incurred  by or  asserted  against  any such  Person in any way
            relating  to or  arising  out of  this  Agreement  or  any  document
            contemplated  by  or  referred  to  herein,   or  the   transactions
            contemplated  hereby,  or any  action  taken or  omitted by any such
            Person under or in connection  with any of the foregoing,  including
            with  respect  to  any   investigation,   litigation  or  proceeding
            (including  any  Insolvency   Proceeding  or  appellate  proceeding)
            related to or arising out of this  Agreement or the Loans or the use
            of the proceeds thereof,  whether or not any Indemnified Person is a
            party thereto (all the  foregoing,  collectively,  the  "Indemnified
            Liabilities");  provided, that the Borrower shall have no obligation
            hereunder  to any  Indemnified  Person with  respect to  Indemnified
            Liabilities   resulting   from  the  gross   negligence  or  willful
            misconduct of such Indemnified Person. If any claim, demand,  action
            or cause of action is asserted against any Indemnified  Person, such
            Indemnified  Person shall promptly notify Borrower,  but the failure
            to  so  promptly  notify   Borrower  shall  not  affect   Borrower's
            obligations  under  this  Section  unless  such  failure  materially
            prejudices  Borrower's  right to  participate in the contest of such
            claim, demand,  action or cause of action, as hereinafter  provided.
            If requested by Borrower in writing,  such Indemnified  Person shall
            in good faith contest the validity, applicability and amount of such
            claim,  demand,  action or cause of action and shall permit Borrower
            to participate in such contest. Any Indemnified Person that proposes
            to settle or compromise  any claim or proceeding  for which Borrower
            may be liable for payment of indemnity hereunder shall give Borrower
            written  notice  of  the  terms  of  such  proposed   settlement  or
            compromise  reasonably in advance of settling or  compromising  such
            claim or proceeding and shall obtain  Borrower's  prior consent.  In
            connection with any claim, demand, action or cause of action covered
            by this Section 10.5 against more than one Indemnified  Person,  all
            such  Indemnified  Person  shall be  represented  by the same  legal
            counsel   selected  by  the   Indemnified   Persons  and  reasonably
            acceptable  to  Borrower;  provided,  that  if  such  legal  counsel
            determines  in good faith  that  representing  all such  Indemnified
            Persons  would or could result in a conflict of interest  under laws
            or ethical  principles  applicable  to such legal  counsel or that a
            defense or counterclaim  is available to an Indemnified  Person that
            is not available to all such Indemnified Persons, then to the extent
            reasonably  necessary  to avoid such a conflict  of  interest  or to
            permit unqualified assertion of such a defense or counterclaim, each
            Indemnified  Person shall be entitled to separate  representation by
            legal counsel  selected by that  Indemnified  Person and  reasonably
            acceptable to Borrower, with all such legal counsel using reasonable
            efforts to avoid  unnecessary  duplication  of effort by counsel for
            all  Indemnified  Persons.  The  agreements  in this  Section  shall
            survive payment of all other Obligations.

      10.6  Payments Set Aside.  To the extent that the Borrower makes a payment
            to the Agent or the  Lenders,  or the Agent or the Lenders  exercise
            any right of  set-off,  and such  payment  or the  proceeds  of such
            set-off or any part thereof are subsequently  invalidated,  declared
            to be fraudulent or preferential,  set aside or required  (including
            pursuant to any settlement  entered into by the Agent or such Lender
            in its discretion) to be repaid to a trustee,  receiver or any other
            party,  in connection  with any Insolvency  Proceeding or otherwise,
            then (a) to the  extent  of such  recovery  the  obligation  or part
            thereof  originally  intended to be  satisfied  shall be revived and
            continued  in full force and effect as if such  payment had not been
            made or such setoff had not occurred,  and (b) each Lender severally
            agrees to pay to the Agent  upon  demand  its pro rata  share of any
            amount so recovered from or repaid by the Agent.

      10.7  Successors and Assigns.  The  provisions of this Agreement  shall be
            binding  upon and inure to the  benefit  of the  parties  hereto and
            their  respective  successors and assigns,  except that the Borrower
            may not assign or transfer  any of its rights or  obligations  under
            this  Agreement  without the prior written  consent of the Agent and
            each Lender.

      10.8  Assignments, Participations Etc.

            (a)   Any Lender may, with the written  consent of the Agent and the
                  Borrower,  which  consent shall not be  unreasonably  withheld
                  (except  Borrower's  consent  shall not be  required  if (i) a
                  Default or an Event of Default exists and is  continuing,  and
                  (ii) the  Eligible  Assignee is not engaged in the  securities
                  brokerage business or the investment  advisory  business),  at
                  any time assign and delegate to one or more Eligible Assignees
                  (provided  that no  written  consent  of the  Agent  shall  be
                  required in connection with any assignment and delegation by a
                  Lender to an Eligible  Assignee  that is an  Affiliate of such
                  Lender) (each an "Assignee")  all, or any ratable part of all,
                  of the  Loans,  the  Commitments,  and the  other  rights  and
                  obligations of such Lender  hereunder,  in a minimum amount of
                  $10,000,000;  provided,  however,  that the Borrower  and, the
                  Agent may  continue  to deal  solely  and  directly  with such
                  Lender in  connection  with the  interest  so  assigned  to an
                  Assignee until (A) written notice of such assignment, together
                  with payment  instructions,  addresses and related information
                  with  respect  to the  Assignee,  shall have been given to the
                  Borrower  and the Agent by such Lender and the  Assignee;  (B)
                  such  Lender  and its  Assignee  shall have  delivered  to the
                  Borrower and the Agent an  Assignment  and  Acceptance  in the
                  form of Exhibit D ("Assignment and Acceptance")  together with
                  any  Note or Notes  subject  to such  assignment;  and (C) the
                  assignor Lender or Assignee has paid to the Agent a processing
                  fee in the amount of $3,500.

            (b)   From and after the date that the Agent  notifies  the assignor
                  Lender and the Borrower that it has received (and the Borrower
                  and the Agent have provided  their consent with respect to) an
                  executed   Assignment   and  Acceptance  and  payment  of  the
                  above-referenced  processing fee, (i) the Assignee  thereunder
                  shall be a party  hereto  and,  to the extent  that rights and
                  obligations  hereunder  have been  assigned  to it pursuant to
                  such  Assignment  and  Acceptance,  shall  have the rights and
                  obligations of a Lender under the Loan Documents, and (ii) the
                  assignor   Lender  shall,   to  the  extent  that  rights  and
                  obligations  hereunder and under the other Loan Documents have
                  been   assigned  by  it  pursuant  to  such   Assignment   and
                  Acceptance,  relinquish  its rights and be  released  from its
                  obligations under the Loan Documents.

            (c)   Within five  Business  Days after its receipt of notice by the
                  Agent  that  it  has  received  an  executed   Assignment  and
                  Acceptance  and payment of the  processing  fee (and  provided
                  that  it  consents  to  such  assignment  in  accordance  with
                  subsection 10.8(a)), the Borrower shall execute and deliver to
                  the Agent, new Notes evidencing such Assignee's assigned Loans
                  and  Commitment  and, if the  assignor  Lender has  retained a
                  portion of its Loans and its Commitment,  replacement Notes in
                  the  principal  amount  of  the  Commitment  retained  by  the
                  assignor  Lender (such Notes to be in exchange for, but not in
                  payment of, the Notes held by such Lender).  Immediately  upon
                  each  Assignee's  making its  processing fee payment under the
                  Assignment and  Acceptance,  this Agreement shall be deemed to
                  be amended to the extent, but only to the extent, necessary to
                  reflect  the  addition  of  the  Assignee  and  the  resulting
                  adjustment  of  the   Commitments   arising   therefrom.   The
                  Commitment  allocated  to  each  Assignee  shall  reduce  such
                  Commitments of the assignor Lender pro tanto.

            (d)   Any  Lender  may at any  time  sell to one or more  commercial
                  banks or other  Persons  not  Affiliates  of the  Borrower  (a
                  "Participant")  participating  interests  in  any  Loans,  the
                  Commitment  of that  Lender  and the other  interests  of that
                  Lender  (the  "originating  Lender")  hereunder  and under the
                  other  Loan  Documents;   provided,   however,  that  (i)  the
                  originating  Lender's  obligations  under this Agreement shall
                  remain  unchanged,  (ii) the  originating  Lender shall remain
                  solely  responsible for the  performance of such  obligations,
                  (iii) the  Borrower,  and the  Agent  shall  continue  to deal
                  solely and directly with the originating  Lender in connection
                  with the originating  Lender's  rights and  obligations  under
                  this  Agreement  and the  other  Loan  Documents,  and (iv) no
                  Lender  shall  transfer  or grant any  participating  interest
                  under  which  the   Participant  has  rights  to  approve  any
                  amendment  to, or any consent or waiver with  respect to, this
                  Agreement or any other Loan Document.  Any Lender that sells a
                  participation  to any Person  that is a "foreign  corporation,
                  partnership  or trust"  within  the  meaning of the Code shall
                  include  in its  participation  agreement  with such  Person a
                  covenant  by such Person that such Person will comply with the
                  provisions of Section 9.10 as if such Person were a Lender and
                  provide that the Agent and the  Borrower  shall be third party
                  beneficiaries of such covenant.

            (e)   Notwithstanding  any other  provision in this  Agreement,  any
                  Lender  may at any time  create a  security  interest  in,  or
                  pledge, all or any portion of its rights under and interest in
                  this Agreement and the Note held by it in favor of any Federal
                  Reserve  Bank in  accordance  with  Regulation A of the FRB or
                  U.S.  Treasury  Regulation 31 CFR ss.203.14,  and such Federal
                  Reserve Bank may enforce  such pledge or security  interest in
                  any manner permitted under applicable law.

            (f)   Any  Lender (a  "Granting  Lender")  may,  with  notice to the
                  Agent,  grant to a special  purpose funding vehicle (an "SPC")
                  the  option  to fund  all or any part of any  Loan  that  such
                  Granting  Lender would otherwise be obligated to fund pursuant
                  to this  Agreement.  The funding of a Loan by an SPC hereunder
                  shall utilize the Revolving Credit  Commitment of the Granting
                  Lender to the same extent, and as if, such Loan were funded by
                  such Granting Lender.  Each party hereto hereby agrees that no
                  SPC shall be liable for any  indemnity  or payment  under this
                  Agreement for which a Lender would  otherwise be liable for so
                  long as, and to the extent,  the Granting Lender provides such
                  indemnity or makes such payment.  Notwithstanding  anything to
                  the contrary  contained in the  foregoing or anywhere  else in
                  this  Agreement,   (i)  nothing  herein  shall   constitute  a
                  commitment by any SPC to fund any Loan,  (ii) if an SPC elects
                  not to exercise such option or otherwise  fails to fund all or
                  any part of such Loan, the Granting  Lender shall be obligated
                  to fund such Loan pursuant to the terms hereof,  and (iii) the
                  Borrower and Agent shall continue to deal exclusively with the
                  Granting  Lender and any funding by an SPC hereunder shall not
                  constitute an assignment,  assumption or  participation of any
                  rights or  obligations  of the  Granting  Lender.  Any SPC may
                  disclose on a confidential  basis any  non-public  information
                  relating  to  its  funding  of  Loans  to any  rating  agency,
                  commercial paper dealer or provider of any surety or guarantee
                  to  such  SPC,  provided,  as a  condition  precedent  to such
                  disclosure,  (A) such agency, dealer or provider has delivered
                  to such Granting  Lender for the benefit of Borrower a written
                  confidentiality  agreement  substantially  similar  to Section
                  10.9, and (B)  simultaneous  with or prior to such disclosure,
                  such Granting  Lender has given written  notice to Borrower of
                  the agency,  dealer or provider  to which such  disclosure  is
                  being made and the contents of such  disclosure.  This Section
                  may not be amended  without the prior written  consent of each
                  Granting Lender, all or any part of whose Loan is being funded
                  by an SPC at the time of such amendment.

      10.9  Confidentiality.   Each  Lender  agrees  to  hold  any  confidential
            information  that it may receive from  Borrower or from the Agent on
            such  Borrower's  behalf,  pursuant to this Agreement in confidence,
            except for  disclosure:  (a) to legal  counsel and  accountants  for
            Borrower  or any  Lender;  (b) to  other  professional  advisors  to
            Borrower or any Lender, provided that the recipient has delivered to
            such  Lender  a  written  confidentiality   agreement  substantially
            similar to this Section  10.9;  (c) to regulatory  officials  having
            jurisdiction  over any Lender;  (d) as required by applicable law or
            legal  process or in connection  with any legal  proceeding in which
            any Lender and  Borrower  are  adverse  parties;  and (e) to another
            financial  institution in connection  with a disposition or proposed
            disposition  to  that  financial  institution  of all or part of any
            Lender's  interests  hereunder  or a  participation  interest in the
            Revolving Note and/or the Term Note, each in accordance with Section
            10.8  hereof,  provided  that the  recipient  has  delivered to such
            Lender a written confidentiality  agreement substantially similar to
            this Section 10.9.  Each Lender  further agrees that it will not use
            such  confidential  information  in any  activity or for any purpose
            other  than the  administration  of credit  facilities  extended  to
            Borrower and its  Subsidiaries  and, without  limitation,  will take
            such steps as are reasonably  appropriate to preclude  access to any
            such confidential  information to be obtained by any Person employed
            by any Lender, or by an affiliate of any Lender, who is not involved
            in the administration of credit facilities  extended to Borrower and
            its  Subsidiaries.  For  purposes  of the  foregoing,  "confidential
            information" shall mean any information  respecting  Borrower or its
            Subsidiaries reasonably specified by Borrower as confidential, other
            than  (i)  information  filed  with  any  governmental   agency  and
            available to the public, and (ii) information  disclosed by Borrower
            to any  Person  not  associated  with  Borrower  without  a  written
            confidentiality  agreement  substantially  similar  to this  Section
            10.9.  Certain  of the  confidential  information  pursuant  to this
            Agreement  is  or  may  be  valuable  proprietary  information  that
            constitutes a trade secret of Borrower or its Subsidiaries;  neither
            the provision of such confidential  information to any Lender or the
            limited  disclosures  thereof  permitted  by this Section 10.9 shall
            affect the status of any such  confidential  information  as a trade
            secret of Borrower and its Subsidiaries. Each Lender, and each other
            Person who  agrees to be bound by this  Section  10.9,  acknowledges
            that any breach of the  agreements  contained  in this  Section 10.9
            would result in losses that could not be  reasonably  or  adequately
            compensated  by money  damages.  Accordingly,  if any  Lender or any
            other person breaches its obligations hereunder, such Lender or such
            other  person  recognizes  and  consents  to the right of  Borrower,
            Intermediate  Parent,  and/or Broker  Subsidiary to seek  injunctive
            relief to compel such  Lender or other  Person to abide by the terms
            of this Section 10.9.

      10.10 Notification of Addresses,  Lending Offices,  Etc. Each Lender shall
            notify the Agent in writing of any  changes in the  address to which
            notices  to the  Lender  should be  directed,  of  addresses  of any
            Lending Office,  of payment  instructions in respect of all payments
            to  be  made  to it  hereunder  and  of  such  other  administrative
            information as the Agent shall reasonably request.

      10.11 Counterparts.  This  Agreement  may be  executed  in any  number  of
            separate  counterparts,  each of which,  when so executed,  shall be
            deemed an  original,  and all of said  counterparts  taken  together
            shall be deemed to constitute but one and the same instrument.

      10.12 Severability. The illegality or unenforceability of any provision of
            this  Agreement or any  instrument or agreement  required  hereunder
            shall not in any way affect or impair the legality or enforceability
            of the remaining  provisions of this  Agreement or any instrument or
            agreement required hereunder.

      10.13 No Third Parties Benefited.  This Agreement is made and entered into
            for the sole  protection  and legal  benefit  of the  Borrower,  the
            Lenders, the Agent and the Arranger,  and their permitted successors
            and assigns, and no other Person shall be a direct or indirect legal
            beneficiary  of, or have any direct or  indirect  cause of action or
            claim in connection  with,  this  Agreement or any of the other Loan
            Documents.

      10.14 Governing Law and Jurisdiction.

            (a)   THIS  AGREEMENT  AND THE  NOTES  SHALL  BE  GOVERNED  BY,  AND
                  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAW  OF  THE  STATE  OF
                  CALIFORNIA;  PROVIDED  THAT THE  AGENT AND THE  LENDERS  SHALL
                  RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

            (b)   ANY LEGAL ACTION OR PROCEEDING  WITH RESPECT TO THIS AGREEMENT
                  OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
                  STATE OF  CALIFORNIA  OR OF THE UNITED STATES FOR THE NORTHERN
                  DISTRICT OF CALIFORNIA,  AND BY EXECUTION AND DELIVERY OF THIS
                  AGREEMENT,  EACH OF THE  BORROWER,  THE AGENT AND THE  LENDERS
                  CONSENTS,  FOR ITSELF AND IN RESPECT OF ITS  PROPERTY,  TO THE
                  NONEXCLUSIVE   JURISDICTION  OF  THOSE  COURTS.  EACH  OF  THE
                  BORROWER,  THE AGENT AND THE  LENDERS  IRREVOCABLY  WAIVES ANY
                  OBJECTION,  INCLUDING  ANY OBJECTION TO THE LAYING OF VENUE OR
                  BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
                  OR HEREAFTER  HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING
                  IN SUCH  JURISDICTION  IN  RESPECT  OF THIS  AGREEMENT  OR ANY
                  DOCUMENT RELATED HERETO.

      10.15 Waiver of Jury Trial.  THE BORROWER,  THE LENDERS AND THE AGENT EACH
            WAIVE  THEIR  RESPECTIVE  RIGHTS  TO A TRIAL BY JURY OF ANY CLAIM OR
            CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF OR  RELATED TO THIS
            AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTION CONTEMPLATED
            HEREBY OR THEREBY, IN ANY ACTION,  PROCEEDING OR OTHER LITIGATION OF
            ANY TYPE  BROUGHT BY ANY OF THE  PARTIES  AGAINST ANY OTHER PARTY OR
            ANY  AGENT-RELATED  PERSON,  PARTICIPANT  OR ASSIGNEE,  WHETHER WITH
            RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER,
            THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
            ACTION  SHALL BE  TRIED BY A COURT  TRIAL  WITHOUT  A JURY.  WITHOUT
            LIMITING  THE  FOREGOING,  THE  PARTIES  FURTHER  AGREE  THAT  THEIR
            RESPECTIVE  RIGHT TO A TRIAL BY JURY IS WAIVED BY  OPERATION OF THIS
            SECTION AS TO ANY ACTION,  COUNTERCLAIM  OR OTHER  PROCEEDING  WHICH
            SEEKS,   IN  WHOLE  OR  IN  PART,   TO  CHALLENGE  THE  VALIDITY  OR
            ENFORCEABILITY  OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
            PROVISION  HEREOF  OR  THEREOF.  THIS  WAIVER  SHALL  APPLY  TO  ANY
            SUBSEQUENT  AMENDMENTS,  RENEWALS,  SUPPLEMENTS OR  MODIFICATIONS TO
            THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

      10.16 Entire  Agreement.  This  Agreement,  together  with the other  Loan
            Documents, embodies the entire agreement and understanding among the
            Borrower,  the Lenders and the Agent,  and  supersedes  all prior or
            contemporaneous  agreements  and  understandings  of  such  Persons,
            verbal  or  written,  relating  to the  subject  matter  hereof  and
            thereof.

      10.17 Headings.  Articles  and  Section  headings  in this  Agreement  are
            included herein for the convenience of reference only.

                            (SIGNATURE PAGE FOLLOWS)

<PAGE>

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

                                      Borrower:

                                      THE CHARLES SCHWAB CORPORATION

                                      By: /s/ Joseph R. Martinetto
                                         ---------------------------------------
                                      Name: Joseph R. Martinetto

                                      Title: Senior Vice President and Treasurer

<PAGE>

                                     Lenders:

                                     BANK OF AMERICA, N.A., as Agent and
                                     individually as Lender

                                     By: /s/ Steven W. Kastenholz
                                        ----------------------------------------
                                     Name:  Steven W. Kastenholz
                                          --------------------------------------
                                     Title:  Managing Director
                                           -------------------------------------

                                     CITICORP USA, INC., as Co-Syndication Agent
                                     and individually as Lender

                                     By: /s/ Michael Mauerstein
                                        ----------------------------------------
                                     Name:  Michael Mauerstein
                                          --------------------------------------
                                     Title:  Managing Director
                                           -------------------------------------

                                     BANK ONE, NA (Main Office Chicago), as
                                     Co-Syndication Agent and individually as
                                     Lender

                                     By: /s/ Mona R. Giullano
                                        ----------------------------------------
                                     Name:  Mona R. Giullano
                                          --------------------------------------
                                     Title:  Assistant Vice President
                                           -------------------------------------

                                     COMMERZBANK AG, New York and
                                     Grand Cayman Branches, as
                                     Co-Documentation Agent and
                                     individually as Lender

                                     By: /s/ Christian Jagenberg
                                        ----------------------------------------
                                     Name:  Christian Jagenberg
                                          --------------------------------------
                                     Title:  Senior Vice President and Manger
                                           -------------------------------------

                                     By: /s/ Steven F. Larsen
                                        ----------------------------------------
                                     Name:  Steven F. Larsen
                                          --------------------------------------
                                     Title:  Senior Vice President
                                           -------------------------------------

                                     WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                                     New York Branch, as Co-Documentation Agent
                                     and individually as Lender

                                     By: /s/ Terence R. Law
                                        ----------------------------------------
                                     Name:  Terence R. Law
                                          --------------------------------------
                                     Title:  Executive Director
                                           -------------------------------------

                                     By: /s/ Robert D. Wieser
                                        ----------------------------------------
                                     Name:  Robert D. Wieser
                                          --------------------------------------
                                     Title:  Associate Director
                                           -------------------------------------

                                     BARCLAYS BANK PLC

                                     By: /s/ Alison A. McGuigan
                                        ----------------------------------------
                                     Name:  Alison A. McGuigan
                                          --------------------------------------
                                     Title:  Associate Director
                                           -------------------------------------

                                     PNC BANK, NATIONAL ASSOCIATON

                                     By: /s/ John T. Wilden
                                        ----------------------------------------
                                     Name:  John T. Wilden
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     CREDIT LYONNAIS, NEW YORK BRANCH

                                     By: /s/ Sebastian Rocco
                                        ----------------------------------------
                                     Name:  Sebastian Rocco
                                          --------------------------------------
                                     Title:  Senior Vice President
                                           -------------------------------------

                                     THE BANK OF NEW YORK

                                     By: /s/ Orla Nallen
                                        ----------------------------------------
                                     Name:  Orla Nallen
                                          --------------------------------------
                                     Title:  Assistant Vice President
                                           -------------------------------------

                                     LLOYDS TSB BANK PLC

                                     By: /s/ Michael J. Gilligan
                                        ----------------------------------------
                                     Name:  Michael J. Gilligan
                                          --------------------------------------
                                     Title:  Director, Financial Institutions,
                                             USA
                                           -------------------------------------

                                     By: /s/ Paul D. Briamonte
                                        ----------------------------------------
                                     Name:  Paul D. Briamonte
                                          --------------------------------------
                                     Title:  Director, Project Finance (USA)
                                           -------------------------------------

                                     DEUTSCHE BANK AG, NEW YORK
                                     AND/OR CAYMAN ISLAND BRANCHES

                                     By: /s/ Ruth Leung
                                        ----------------------------------------
                                     Name:  Ruth Leung
                                          --------------------------------------
                                     Title:  Director
                                           -------------------------------------

                                     By: /s/ John G. Moran
                                        ----------------------------------------
                                     Name:  John. G. Moran
                                          --------------------------------------
                                     Title:  Director
                                           -------------------------------------

                                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                                     By: /s/ Edward J. Meyer, Jr.
                                        ----------------------------------------
                                     Name:  Edward J. Meyer, Jr.
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     By: /s/ James J. Doherty
                                        ----------------------------------------
                                     Name:  James J. Doherty
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     NORDDEUTSCHE LANDESBANK GIROZENTRALE,
                                     NEW YORK BRANCH AND/OR
                                     CAYMAN ISLAND BRANCH

                                     By: /s/ Georg Peters
                                        ----------------------------------------
                                     Name:  Georg Peters
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     By: /s/ Hinrich Holm
                                        ----------------------------------------
                                     Name:  Hinrich Holm
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     BNP PARIBAS

                                     By: /s/ Frank Sodano
                                        ----------------------------------------
                                     Name:  Frank Sodano
                                          --------------------------------------
                                     Title:  Director
                                           -------------------------------------

                                     By: /s/ Richard Ungaro
                                        ----------------------------------------
                                     Name:  Richard Ungaro
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     MELLON BANK, N.A.

                                     By: /s/ Marla A. DeYulis
                                        ----------------------------------------
                                     Name:  Marla A. DeYulis
                                          --------------------------------------
                                     Title:  Lending Officer
                                           -------------------------------------

                                     BANCA DI ROMA - SAN FRANCISCO

                                     By: /s/ Luca Balestra
                                        ----------------------------------------
                                     Name:  Luca Balestra (#25050)
                                          --------------------------------------
                                     Title:  Senior Vice President and Manager
                                           -------------------------------------
                                     By: /s/ Thomas C. Woodruff
                                        ----------------------------------------
                                     Name:  Thomas C. Woodruff (#97969)
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     BANK OF TOKYO - MITSUBISHI TRUST COMPANY

                                     By: /s/ Jesse Reid
                                        ----------------------------------------
                                     Name:  Jesse Reid
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     FIRST TENNESSEE BANK NATIONAL ASSOCIATION

                                     By: /s/ James H. Moore, Jr.
                                        ----------------------------------------
                                     Name:  James H. Moore, Jr.
                                          --------------------------------------
                                     Title:  SVP
                                           -------------------------------------

                                     BANCA NAZIONALE DEL LAVORO S.p.A.,
                                     NEW YORK BRANCH

                                     By: /s/ Roberto Mancone
                                        ----------------------------------------
                                     Name:  Roberto Mancone
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------
                                     By: /s/ Leonardo Valentini
                                        ----------------------------------------
                                     Name:  Leonardo Valentini
                                          --------------------------------------
                                     Title:  First Vice President
                                           -------------------------------------
                                     HSBC BANK USA

                                     By: /s/ L. Sue Lomax
                                        ----------------------------------------
                                     Name:  L. Sue Lomax
                                          --------------------------------------
                                     Title:  Senior Vice President
                                           -------------------------------------

                                     THE CHASE MANHATTAN BANK

                                     By: /s/ Therese Bechet
                                        ----------------------------------------
                                     Name:  Therese Bechet
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     BANK OF HAWAII

                                     By: /s/ Dana Takushi
                                        ----------------------------------------
                                     Name:  Dana Takushi
                                          --------------------------------------
                                     Title:  Vice President
                                           -------------------------------------

                                     FIRST HAWAIIAN BANK

                                     By: /s/ Seth A. Bond
                                        ----------------------------------------
                                     Name:  Seth A. Bond
                                          --------------------------------------
                                     Title:  Assistant Vice President
                                           -------------------------------------

<PAGE>

                                   Schedule 1

                              LENDERS' COMMITMENTS

The  Charles  Schwab  Corporation   $1,200,000,000   Credit  Agreement  (364-Day
Commitment) dated as of June 22, 2001.

                                                        Lender Commitment Amount

1.   Bank of America, N.A.                                  1.  $125,000,000

2.   Citicorp USA, Inc.                                     2.  $100,000,000

3.   Bank One, NA (Main Office Chicago)                     3.  $100,000,000

4.   Commerzbank AG, NewYork and
     Grand Cayman Branches                                  4.  $100,000,000

5.   Westdeutsche Landesbank Girozentrale,
     New York Branch                                        5.  $100,000,000

6.   Barclays Bank PLC                                      6.  $  75,000,000

7.   PNC Bank, National Association                         7.  $  60,000,000

8.   Credit Lyonnais, New York Branch                       8.  $  55,000,000

9.   The Bank of New York                                   9.  $  55,000,000

10.  Lloyds TSB Bank plc                                    10. $  55,000,000

11.  Deutsche Bank AG, New York and/or
     Cayman Island Branches                                 11. $  55,000,000

12.  Wells Fargo Bank, National Association                 12. $  55,000,000

13.  Norddeutsche Landesbank Girozentrale,
     New York Branch and/or Cayman Island Branch            13. $  35,000,000

14.  BNP Paribas                                            14. $  35,000,000

15.  Mellon Bank, N.A.                                      15. $  35,000,000

16.  Banca Di Roma - San Francisco                          16. $  20,000,000

17.  Bank of Tokyo - Mitsubishi Trust Company               17. $  20,000,000

18.  First Tennessee Bank National Association              18. $  20,000,000

19.  Banca Nazionale Del Lavoro S.p.A.,
     New York Branch                                        19. $  20,000,000

20.  HSBC Bank USA                                          20. $  20,000,000

21.  The Chase Manhattan Bank                               21. $  20,000,000

22.  Bank of Hawaii                                         22. $  20,000,000

23.  First Hawaiian Bank                                    23. $  20,000,000

                                                       Total   $1,200,000,000

<PAGE>

                                   Schedule 2

                          LIST OF BORROWING AGREEMENTS

1.  $1,200,000,000  Credit Agreement  (364-Day  Commitment) dated as of June 23,
2000 among the Borrower,  the lenders party thereto, and Bank of America,  N.A.,
as administrative agent for such lenders.

<PAGE>

                                  Schedule 6.2

                             COMPLIANCE CERTIFICATE

      I, ____________________,  certify that I am the _______________________ of
The  Charles  Schwab  Corporation  (the  "Borrower"),  and  that  as  such  I am
authorized to execute this Compliance Certificate on behalf of the Borrower, and
do hereby further certify on behalf of the Borrower that:

      1. I have  reviewed the terms of that certain  Credit  Agreement  (364-Day
Commitment)  dated  as of June  22,  2001  among  the  Borrower,  the  financial
institutions  named therein (the "lenders") and Bank of America,  N.A., as Agent
for the lenders (the "Credit Agreement"),  and I have made, or have caused to be
made by  employees  or agents  under my  supervision,  a detailed  review of the
transactions and conditions of the Borrower during the accounting period covered
by the attached financial statements dated ______________, 200__.

      2. The examination  described in paragraph 1 did not disclose,  and I have
no knowledge  of the  existence of any  condition or event which  constitutes  a
Default  or Event  of  Default  during  or at the end of the  accounting  period
covered  by  the  attached  financial  statements  or as of  the  date  of  this
Compliance Certificate, except as set forth below.

      3. Schedule I attached hereto sets forth  financial data and  computations
evidencing  compliance  with the  covenants set forth in Sections 7.1 and 7.2 of
the Credit Agreement,  all of which data and computations are true, complete and
correct.  Capitalized  terms not  otherwise  defined  herein are  defined in the
Credit Agreement.

      4. Described below are the exceptions,  if any, to paragraph 2 by listing,
in detail,  the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken,  is taking,  or proposes to
take with respect to each such condition or event.

      The foregoing certifications,  together with the computations set forth in
Schedule I hereto and the financial  statements  delivered with this  Compliance
Certificate  in  support  hereof,  are  made  and  delivered  this  ___  day  of
_____________ 200__.

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

<PAGE>

                         The Charles Schwab Corporation

                      Credit Agreement (364-Day Commitment)
                            Dated as of June 22, 2001

                                   Schedule I
                                       to
                             Compliance Certificate
                             (Dollars in Thousands)

      1.    Net Capital Ratio of the Broker Subsidiary and SCM.

            Requirement:  Broker  Subsidiary and SCM - month-end  ratio not less
                  than 5%, 2-month average not less than 7%.

                  Net Capital Ratio for Broker Subsidiary

            Month                   Month-end Ratio             2-Month Average

                  Net Capital Ratio for SCM

            Month                   Month-end Ratio             2-Month Average

      2.    Minimum Tangible Net Worth of Borrower.

            Requirement: As of _____________,  200___, required Minimum Tangible
                  Net  Worth  is  $1,471,041,000  plus  40%  of  cumulative  Net
                  Earnings from March 31, 2001.

<PAGE>

                                  Schedule 10.2

                                     NOTICES

If to the Borrower:

If by U.S. mail:                     The Charles Schwab Corporation
                                     Treasury Department
                                     Attn:  Kim K. Davis or Successor
                                     211 Main St. (Mail Stop SF120KNY-09-305)
                                     San Francisco, CA 94105

If by hand delivery
(including courier
and overnight
messenger service):                  The Charles Schwab Corporation
                                     Treasury Department
                                     Attn:  Kim K. Davis or Successor
                                     120 Kearny St. 9th Floor
                                     San Francisco, CA 94104

Telephone:                           (415) 636-3855
Facsimile:                           (415) 636-9820

If to the Agent:

See  information  under  Bank  of  America,  N.A.  in  table below pertaining to
Lenders.

If to the Lenders:
<TABLE>
<CAPTION>
<S>                               <C>                             <C>                          <C>

Credit Contact                    Operations Contact              Lending Office               Payment
Instructions
--------------                    ------------------              --------------
--------------------

Bank of America, N.A.             Bank of America, N.A.           Bank of America, N.A.        Bank of America,
N.A.
335 Madison Avenue                101 N. Tryon Street             101 N. Tryon Street          ABA #:  053000196
New York, NY 10017                Mailcode:  NC1-001-15-04        Charlotte, NC 28255          Charlotte, NC
Attention:  Robert S. Brown       Charlotte, NC 28255-0001                                     Acct #:
1366212250600
            Managing Director     Attention:  Kristen Gilliam                                  Attention:
Credit
(212) 503-8334                    Agency Administrative Officer                                Services
Fax:  (212) 503-7027              (704) 388-1553                                               Ref:  The Charles
Schwab
                                  Fax: (704) 409-0296                                          Corporation

Citicorp USA, Inc.                Citicorp USA, Inc.              Citicorp USA, Inc.           Citibank NA
399 Park Avenue                   2 Penn's Way, Suite 200         399 Park Avenue              ABA #:  021-000-089
New York, NY 10043                New Castle, DE 19720            New York, NY 10043           New York, NY
Attention: Michael Mauerstein     Attention:  Lee Ocasio                                       Acct #:  40610794
           Vice President                     Assistant                                        Acct Name:
(212) 816-3431                                Manager                                          Wall Street Fees
Fax:  (212) 816-4140              (302) 894-6065                                               Attention: Lee
Ocasio
                                  Fax: (302) 894-6120                                          Ref:  The Charles
Schwab
                                                                                               Corporation

Bank One, NA                      Bank One, NA                    Bank One, NA                 Bank One, NA
153 W. 51st Street                (Main Office Chicago)           One Bank One Plaza           (Main Office
Chicago)
New York, NY 10019                One Bank One Plaza              Chicago, IL 60670            ABA #:  071000013
Attention: Andrea S. Kantor       Chicago, IL 60670                                            Chicago, IL
           First Vice             Attention:  Vickie Kobierski                                 Acct #:
481152860000
           President                          Asst.   Vice                                     Acct Name:
(212) 373-1023                                President                                        LS2 Incoming
Clearing
Fax:  (212) 373-1180              (312) 732-5627                                               Attention:
                                  Fax: (312) 732-3537                                          Vickie Kobierski

Commerzbank AG,                   Commerzbank AG,                 Commerzbank AG,              Commerzbank AG,
Los Angeles Branch                Los Angeles Branch              New York Branch              New York Branch
633 West Fifth Street             633 West Fifth Street           2 World Financial Center     ABA #:  026008044
Suite 6600                        Suite 6600                      New York, NY 10281           New York, NY
Los Angeles, CA 90071             Los Angeles, CA 90071                                        Acct #:
Attention: Steven F. Larsen       Attention: Joanne Si                                         150/1035104/05USD
           First Vice             (213) 683-5411                                               Ref:  The Charles
Schwab
           President              Fax: (213) 623-0039                                          Corporation
(213) 623-8223
Fax:  (213) 623-0039

Westdeutsche Landesbank           Westdeutsche Landesbank         Westdeutsche Landesbank      Westdeutsche
Landesbank
Girozentrale, New York Branch     Girozentrale, New York Branch   Girozentrale, New York       Girozentrale, New
York
1211 Avenue of the Americas       1211 Avenue of the Americas     Branch                       Branch
New York, NY 10036                New York, NY 10036              1211 Avenue of the           ABA #:  021-000-021
Attention: Terence R. Law         Attention:  Philip Green        Americas                     New York, NY
           Executive              (212) 852-6113                  New York, NY 10036           Acct #:
920-1-060663
           Director               Fax: (212) 302-7946                                          Acct Name:
(212) 852-6242                                                                                 Westdeutsche
Landesbank
Fax:  (212)852-6516                                                                            Girozentrale, New
York
                                                                                               Branch
                                                                                               Attention: Loan
                                                                                               Administration
                                                                                               Ref:  The Charles
Schwab
                                                                                               Corporation

Credit Lyonnais,                  Credit Lyonnais,                Credit Lyonnais,             Credit Lyonnais,
New York Branch                   New York Branch                 New York Branch              New York Branch
1301 6th Avenue                   1301 6th Avenue                 1301 6th Avenue              ABA #:  026-008-073
New York, NY 10019                New York, NY 10019              New York, NY 10019           New York, NY
Attention: Dick Reilly            Attention:  Seth Ruffer                                      Acct #:
           Vice President                     Asst. Vice                                       01-88179-3701-00
(212) 261-3861                    President                                                    Acct Name:
Fax:  (212) 261-3438              (212) 261-7410                                               Loan Servicing
                                  Fax: (212) 261-3401                                          Attention: S.
Ruffer
                                                                                               Ref:  The Charles
                                                                                               Schwab Corporation

Barclays Bank PLC                 Barclays Bank PLC               Barclays Bank PLC            Barclays Bank PLC
222 Broadway, 8th Floor           222 Broadway, 11th Floor        222 Broadway                 ABA #:  02-6002574
New York, NY 10038                New York, NY 10038              New York, NY 10038           New York, NY
Attention: Alison McGuigan        Attention: Marsha Hamlette                                   Acct #: 050-01910-4
(212) 412-7672                    (212) 412-4081                                               Acct Name:
Fax:  (212) 412-5610              Fax:  (212) 412-5306                                         Clad Control
Account
                                                                                               Ref: The Charles
                                                                                               Schwab Corporation

PNC Bank,                         PNC Bank,                       PNC Bank,                    PNC Bank,
National Association              National Association            National Association         National
Association
1600 Market Street                1600 Market Street              1600 Market Street           ABA #:  043000096
Philadelphia, PA 19103            Philadelphia, PA 19103          Philadelphia, PA             Pittsburgh, PA
Attention: Daniel K. Fitzpatrick  Attention: Christine Allio                                   Acct #:
196030010890
           Managing Director      (412) 768-7652                                               Acct Name:
Corporate
(215) 585-5622                    Fax:_______________                                          Banking
Fax:  (215) 585-6987                                                                           Attention:  Wire
Room

The Bank of New York              The Bank of New York            The Bank of New York         The Bank of New
York
One Wall Street, 42nd Floor       One Wall Street, 42nd Floor     One Wall Street              ABA #:  021000018
New York, NY 10286                New York, NY 10286              New York, NY 10286           New York, NY
Attention: Orla Nallen            Attention: Cheryl Smith                                      Acct #: GLA 111231
           Asst. Vice President   (212) 635-6735                                               Acct Name:
(212) 635-6703                    Fax:  (212) 635-6615                                         Broker Services
Fax:  (212) 809-9566                                                                           Attention:
                                                                                               Douglas Ottley
                                                                                               Ref:  The Charles
                                                                                               Schwab Corporation

Lloyds TSB Bank plc               Lloyds TSB Bank plc             Lloyds TSB Bank              Bank of America
575 Fifth Avenue, 17th Floor      575 Fifth Avenue, 17th Floor    plc, Miami                   International, New
York
New York, NY 10017                New York, NY 10017              One Biscayne Tower,          ABA #:  026-009-593
Attention: Michael Gilligan       Attention: Patricia Kilian      Suite 3200                   New York, NY
(212) 930-8911                    (212) 930-8914                  2 Biscayne Boulevard         Acct #:
655-010-1938
Fax:  (212) 930-5098              Fax:  (212) 930-5098            Miami, FL 33131              Acct Name: Lloyds
TSB
                                                                                               Bank plc, Miami
                                                                                               Ref:  The Charles
                                                                                               Schwab Corporation

Deutsche Bank AG,                 Deutsche Bank AG,               Deutsche Bank AG,            Federal Reserve
Bank of
New York Branch                   New York Branch                 New York and/or              New York
31 West 52nd Street               31 West 52nd Street             Cayman Island Branches       Acct: Deutsche Bank
Mail Stop NYC 01-2304             New York, NY 10019              130 Liberty Street           New York
New York, NY 10019                Attention: Thomas Balacki       Mail Stop NYC 02-1414        ABA #:  026003780
Attention: John Moran             (212) 250-5386                  New York, NY 10006           Attention:
(212) 469-8671                    Fax:  (212) 669-1706            Attention: Loan Operations   Thomas Balacki
Fax:  (212) 469-8366                                                         Thomas Balacki    Ref:  The Charles
Schwab
                                                                                               Corporation

Banca Di Roma - San Francisco     Banca Di Roma -San Francisco    Banca Di Roma -              Citibank N.A. -
One Market, Steuart Tower         34 East 51st Street             San Franciso Branch          New York.
Suite 1000                        New York, NY 10022              c/o Banca Di Roma -          ABA #: 021-000-089
San Francisco, CA 94105           Attention: Salvatore Rappa      New York Branch              For Acct of:
Attention: Thomas C. Woodruff                Asst. Vice           34 East 51st Street          Banca Di Roma -
           Vice President                    President            New York, NY 10022           New York Branch
(415) 977-7308                    (212) 407-1812                                               Acct #: 36003043
Fax:  (415) 357-9869              Fax:  (212) 407-1684                                         For further credit
to:
                                                                                               Banca Di Roma -
                                                                                               San Francisco
                                                                                               Sub-Acct #:
80994706

Norddeutsche Landesbank           Norddeutsche Landesbank         Norddeutsche Landesbank      Chase Manhattan
Bank,
Girozentrale New York Branch      Girozentrale New York Branch    Girozentrale, Cayman         New York
and/or Cayman Islands Branch      and/or Cayman Islands Branch    Islands Branch               ABA #:  021000021
1114  Avenue  of  the  Americas,  1114  Avenue of the  Americas,  1114 Avenue of the           New York, NY
37th Floor                        37th Floor                      Americas, 37th Floor         Acct Name:
New York, NY 10036                New York, NY 10036              New York, NY 10036           Norddeutsche
Landesbank,
Attention: Georg Peters           Attention: Norman Liebenstein                                New York
(212) 812-6699                    (212) 812-6809                                               Acct #:
001-1-352382
Fax:  (212) 812-6860              Fax:  (212) 812-6860                                         Ref: The Charles
Schwab
                                                                                               Credit Facility

Wells Fargo Bank,                 Wells Fargo Bank,               Wells Fargo Bank,            Wells Fargo Bank,
National Association              National Association            National Association         National
Association
6th Street and Marquette Avenue   201 3rd Street, 8th Floor       6th  Street  and  Marquette  ABA #:  121000248
N9305-075                         A0187-081                       Ave                          San Francisco, CA
Minneapolis, MN 55479             San Francisco, CA 94103         N9305-075                    Acct #: 2712507201
Attention: Edward J. Meyer, Jr.   Attention:  Cindy Dunn          Minneapolis, MN 55479        Account Name:
           Vice President                     Loan Servicing                                   Member Syndication
(612) 667-7375                                Spec.                                            Ref: The Charles
Schwab
Fax:  (612) 667-7251              (415) 477-5431                                               Corporation,
Obligor
                                  Fax:  (415) 979-0675                                         #1582242431

Mellon Bank, N.A.                 Mellon Bank, N.A.               Mellon Bank, N.A.            Mellon Bank, N.A.
One Penn Plaza, 29th Floor        3 Mellon Bank Center            One Mellon Center            ABA #:  043000261
New York, NY 10419                Pittsburgh, PA 15259            Pittsburgh, PA 15258         Pittsburgh, PA
Attention: Thomas P. Caruso       Attention:  Teresa Hayward                                   Acct #: 9908 73 800
           Vice President         (412) 234-4744                                               Acct Name: Mellon
Bank
(212) 330-1317                    Fax:  (412) 209-6134                                         Attention: Teresa
Hayward
Fax:  (212) 330-1332

BNP Paribas                       BNP Paribas                     BNP Paribas                  BNP New York
787 7th Avenue, 27th Floor        787 7th Avenue, 27th Floor      787 7th Avenue, 27th Floor   ABA #:  026007689
New York, NY 10019                New York, NY 10019              New York, NY 10019           New York, NY
Attention: Frank Sodano           Attention: Frank Chiofalo                                    Acct #: 10313000103
           Director               (212) 841-2297                                               Attn:  Loan
Services
(212) 841-2084                    Fax:  (212) 841-2717                                         Clearing Account
Fax:  (212) 841-2717

Bank of Tokyo-                    Bank of Tokyo-                  Bank of Tokyo-               Bank of Tokyo-
Mitsubishi Trust Company          Mitsubishi Trust Company        Mitsubishi Trust Company     Mitsubishi Trust
Company
1251 Avenue of the Americas,      1251 Avenue of the Americas,    1251 Avenue of the           ABA #:  0260-0968-7
12th Floor                        12th Floor                      Americas, 12th Floor         New York, NY
New York, NY 10022                New York, NY 10022              New York, NY 10022           Acct #: 97770477
Attention: Jesse A. Reid, Jr.     Attention: Jerry Stokes                                      Acct Name:
           Vice President                    Banking                                           The Charles Schwab
(212) 782-4210                               Officer                                           Corporation
Fax:  (212) 782-5650              (212) 782-5648                                               Attention: Rolando
Uy
                                  Fax:  (212) 782-5650

First Tennessee Bank              First Tennessee Bank            First Tennessee Bank         First Tennessee
Bank
National Association              National Association            National Association         National
Association
165 Madison Avenue, 9th Floor     165 Madison Avenue, 9th Floor   165 Madison Avenue,          ABA #:  084000026
Memphis, TN 38103-2723            Memphis, TN 38103-2723          9th Floor                    Memphis, TN
Attention: James H. Moore, Jr.    Attention: Linda Nguyen         Memphis, TN 38103-2723       Acct #: 114174-6830
           Senior Vice                       Sales                                             Acct Name:
           President                         Assistant                                         Bank Secrecy
(901) 523-4108                    (901) 523-4118                                               Attn:  Linda Nguyen
Fax:  (901) 523-4267              Fax:  (901) 523-4267

First Hawaiian Bank               First Hawaiian Bank             First Hawaiian Bank          First Hawaiian Bank
999 Bishop Street, 11th Floor     999 Bishop Street, 11th Floor   999  Bishop  Street, 11th    ABA #:  1213-0101-5
Honolulu, HI 96813                Honolulu, HI 96813              Floor                        Honolulu, HI
Attention: Charles L. Jenkins     Attention: Brenda Deakins /     Honolulu, HI 96813           Acct #:
205150109100
           VP / MGR                          Vicki Tanaka                                      Attn:
(808) 525-6289                               Operations                                        CRED WH LN SVCG
Fax:  (808) 525-6372                         Officer                                           Ref: The Charles
Schwab
                                  (808) 525-8100 / 8106                                        Corporation
                                  Fax:  (808) 525-5085

Banca Nazionale Del Lavoro        Banca Nazionale Del Lavoro      Banca Nazionale Del Lavoro   Chase Manhattan
Bank,
S.p.A, New York Branch            S.p.A, New York Branch          S.p.A, New York Branch       New York
25 West 51st Street               25 West 51st Street             25 West 51st Street          ABA #:  021000021
New York, NY 10019                New York, NY 10019              New York, NY 10019           For Account BNL
Attention: Roberto Mancone        Attention: Anna Hernandez                                    New York Branch
           Vice President                    Asst.Vice                                         Acct #:
001-1-465457
(212) 314-0734                               President                                         Ref: The Charles
Schwab
Fax:  (212) 765-2978              (212) 314-0679                                               Corporation
                                  Fax:  (212) 765-2978

HSBC Bank USA                     HSBC Bank USA                   HSBC Bank USA                HSBC Bank USA
HSBC Tower, 452 5th  Avenue       1 HSBC Center                   1 HSBC Center                ABA #:  021001088
5th Floor                         Buffalo, NY 14203               Buffalo, NY 14203            New York, NY
New York, NY 10018                Attention: Darlene Cardino                                   Acct #: 001-94050-3
Attention: L. Sue Lomax           (716) 841-1670                                               Acct Name:
           Senior Vice President  Fax:  (716) 841-0269                                         Syndications &
Asset
(212) 525-2460                                                                                 Trading
Fax:  (212) 525-2573                                                                           Ref: The Charles
Schwab
                                                                                               Corporation

The Chase Manhattan Bank          The Chase Manhattan Bank        The Chase Manhattan Bank     The Chase Manhattan
One Chase Plaza                   One Chase Plaza                 One Chase Plaza              Bank
21st  Floor                       21st  Floor                     New York, NY 10081           Acct #:  066-999979
New York, NY 10081                New York, NY 10081                                           ABA #:  021000021
Attention: Therese Bechet         Attention: Jerry Pucciarelli                                 Acct Name:
(212) 552-7785                    (212) 552-7514                                               Broker Dealer House
Fax:  (212) 552-1118              Fax:  (212) 552-7654                                         Account

Attention:          Jerry
                                                                                               Pucciarelli

Bank of Hawaii                    Bank of Hawaii                  Bank of Hawaii               Bank of Hawaii
130 Merchant Street               949 Kamokila Blvd., 2nd Floor   949 Kamokila Blvd.           ABA #: 1213-01028
20th Floor                        Kapolei, HI 96707               2nd Floor                    Honolulu, HI
Honolulu, HI 96813                Attention: Debbie Sullivan      Kapolei, HI 96707            Acct #: 9298-540626
Attention: Dana Takushi           (808) 693-1694                                               Acct Name:
           Vice President         Fax:  (808) 693-1672                                         Bank of Hawaii
(808) 537-8689                                                                                 Attn:
Fax:  (808) 537-8301                                                                           Business Loan
Center
                                                                                               Ref: The Charles
Schwab
                                                                                               Corporation

</TABLE>

<PAGE>

                                   EXHIBIT A-1

                                 REVOLVING NOTE

$____________________ (Amount of Commitment)               Date:  June 22, 2001

      For Value  Received,  The Charles  Schwab  Corporation  ("Schwab")  hereby
promises  to pay to the  order of  ________________  (the  "Lender")  to Bank of
America,  N.A., as Agent,  at Agent's  office located at 101 North Tryon Street,
Charlotte,  NC 28255,  for the account of the  applicable  Lending Office of the
Lender,  the  principal  amount of  ____________________  ($___________)  or the
aggregate amount of all Revolving Loans made to Schwab by the Lender,  whichever
is less, on June 21, 2002. The undersigned  also promises to pay interest on the
unpaid  principal amount of each Borrowing from the date of such Borrowing until
such  principal  amount is paid,  at the rates per  annum,  and  payable at such
times, as are specified in the Credit  Agreement.  This Note shall be subject to
the terms of the  Credit  Agreement,  and all  principal  and  interest  payable
hereunder  shall be due and payable in  accordance  with the terms of the Credit
Agreement.

      Schwab hereby authorizes the Lender to endorse on the Schedule attached to
this Note the  amount and Type of  Revolving  Loans made to Schwab by the Lender
and all renewals,  conversions,  and payments of principal amounts in respect of
such  Revolving  Loans,  which  endorsements  shall,  in the absence of manifest
error,  be  conclusive  as to the  outstanding  principal  amount  of  all  such
Revolving Loans, provided,  however, that the failure to make such notation with
respect to any Revolving  Loans or payments shall not limit or otherwise  affect
the obligation of Schwab under the Credit Agreement or this Note.

      This  Note is the  Revolving  Note  referred  to in the  Credit  Agreement
(364-Day  Commitment),  dated as of June 22,  2001  among  Schwab,  the  Lender,
certain other Lenders party  thereto,  and Bank America,  N.A., as Agent for the
Lenders (the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein  with the same  meanings.  The  Credit  Agreement,  among  other  things,
contains  provisions  for  acceleration  of the maturity of this Note,  upon the
happening of certain  stated events and also for  prepayments  on account of the
principal  of this Note  prior to the  maturity  of this Note upon the terms and
conditions specified in the Credit Agreement.

      Principal and interest  payments shall be in money of the United States of
America,  lawful at such times for the satisfaction of public and private debts,
and shall be in immediately available funds.

      Schwab  promises  to pay the  costs of  collection,  including  reasonable
attorney's fees, if default is made in the payment of this Note.

      The terms and  provisions of this Note shall be governed by the applicable
laws of the State of California.

IN WITNESS  WHEREOF,  the undersigned has caused this Note to be executed by its
officers  thereunto  duly  authorized  and  directed  by  appropriate  corporate
authority.
                                     The Charles Schwab Corporation

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

<PAGE>

                                   EXHIBIT A-1

                           SCHEDULE TO REVOLVING NOTE

   Date                                    Amount of        Unpaid
   Made,                                   Principal      Principal      Name of
Continued,                                Continued,      Balance of     Person
Converted,      Type of       Amount      Converted,      Revolving      Making
  or Paid        Loan        of Loan        or Paid          Note       Notation

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

<PAGE>

                                   EXHIBIT A-2

                                    TERM NOTE

                                                           Date:  June 22, 2001

      FOR VALUE  RECEIVED,  the  undersigned,  The  Charles  Schwab  Corporation
("Schwab")  hereby  promises  to pay to the  order of  ___________________  (the
"Lender"),  to Bank of America, N.A., as Agent, at the Agent's office located at
101 North Tryon Street,  Charlotte,  NC 28255, for the account of the applicable
Lending Office of the Lender, the principal amount of each Term Loan made by the
Lender  to  Schwab  pursuant  to the  terms  of the  Credit  Agreement  (364-Day
Commitment),  dated as of June 22, 2001, as amended,  among Schwab,  the Lender,
certain other Lenders party thereto, and Bank of America, N.A., as Agent for the
Lenders (the "Credit  Agreement"),  as shown in the schedule attached hereto and
any  continuation  thereof,  in  lawful  money  of  the  United  States  and  in
immediately  available  funds on the Term Loan Maturity Date for such Term Loan.
The undersigned  also promises to pay interest on the unpaid principal amount of
each Term Loan from the date of such Term Loan  until such  principal  amount is
paid, in like money,  at said office for the account of the Lender's  applicable
Lending  Office,  at the rates  per  annum,  and  payable  at such  times as are
specified in the Credit Agreement.  This Term Note shall be subject to the terms
of the Credit Agreement and all principal and interest payable  hereunder should
be due and payable in accordance with the terms of the Credit  Agreement.  Terms
defined in the Credit Agreement are used herein with the same meanings.

      This Term Note is one of the Term Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
contains  provisions for acceleration of the maturity of this Term Note upon the
happening  of  certain  stated  events  and also for  prepayments  on account of
principal  hereof  prior to the  maturity  of the Term  Note  upon the terms and
conditions specified in the Credit Agreement.

      Schwab  promises  to  pay  costs  of  collection,   including   reasonable
attorney's fees, if default is made in the payment of this Note.

      The  terms and  provisions  of this Term  Note  shall be  governed  by the
applicable laws of the State of California.

      IN  WITNESS  WHEREOF,  the  undersigned  has  caused  this Term Note to be
executed by its officer  thereunto  duly  authorized and directed by appropriate
corporate authority.

                                     The Charles Schwab Corporation

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

<PAGE>

                                   EXHIBIT A-2

                              SCHEDULE TO TERM NOTE

   Date                                       Amount of      Unpaid
  Made,                                       Principal     Principal    Name of
Continued,   Type of   Amount    Term Loan    Continued,   Balance of    Person
Converted,    Loan    of Loan    Maturity     Converted,    Term Note    Making
 or Paid                           Date        or Paid                  Notation

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

<PAGE>

                                    EXHIBIT B

                                BORROWING ADVICE

      1. This  Borrowing  Advice is executed and delivered by The Charles Schwab
Corporation  ("Borrower") to you pursuant to that certain Credit Agreement dated
as of June 22, 2001 (the "Credit Agreement"),  entered into by Borrower, Bank of
America,  N.A.  ("Bank of America") and certain other Lenders  parties  thereto,
collectively  with Bank of America (the  "Lenders") and Bank of America as Agent
for the Lenders (herein "Agent").  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit Agreement.

      2.  Borrower  hereby  requests  that the Lenders make a Revolving [or Term
Loan]  for  the   account  of   Borrower   (at   _______________,   Account  No.
________________) pursuant to Section 2.4 of the Credit Agreement as follows:

            (a)   Amount of Revolving [or Term Loan]: .

            (b)   Borrowing Date of Revolving [or Term Loan]: _________________.

            (c)   [If a Revolving Loan] Type of Revolving Loan (check one only):

                  ________ CD Rate with ______________- day Interest Period
                  ________ Eurodollar Rate with ________- day Interest Period
                  ________ Federal Funds Rate
                  ________ Base Rate

            (d)   [If a Term Loan] Type of Term Loan (check one only):

                  ________ CD Rate with initial ______________- day Interest
                  Period
                  ________ Eurodollar Rate with initial ________- day Interest
                  Period
                  ________ Federal Funds Rate
                  ________ Base Rate

            (e)   [If a Term Loan] Maturity Date of Term Loan: .

      3.  Following  this  request  for a  Revolving  Loan [or Term  Loan],  the
aggregate  outstanding  amount of all  Revolving  Loans and Term Loans under the
Revolving Note will not exceed the aggregate amount of the Commitments.

<PAGE>

      4.    This Borrowing Advice is executed on ______________ by the Borrower.

                                     BORROWER:

                                     THE CHARLES SCHWAB CORPORATION,
                                     a Delaware Corporation

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

<PAGE>

                                    EXHIBIT C

                        NOTICE OF CONVERSION/CONTINUATION

                         Dated as of: _________________

Bank of America, N.A., as Agent
_______________________________
_______________________________

Ladies and Gentlemen:

      This  irrevocable  Notice of  Conversion/Continuation  (this  "Notice") is
delivered to you under the Credit  Agreement  (364-Day  Commitment)  dated as of
June  22,  2001  (as  amended,  restated  or  otherwise  modified,  the  "Credit
Agreement") by and among The Charles Schwab Corporation,  a Delaware corporation
(the  "Company")  (herein  "Borrower");  and Bank of America,  N.A.,  a national
banking  association  (herein "Bank of America") and the other Lenders signatory
thereto  (together with Bank of America,  collectively  "Lenders"),  and Bank of
America as agent for the Lenders (herein "Agent").

      1.    This Notice is submitted for the purpose of:

(check one and complete applicable information in accordance with the Credit
Agreement)

            [__]  Converting  or  [__]  continuing  all  or  a  portion  of  the
                  following type of Loan:

            (a)   (check,  as applicable)  Base Rate Loan  ____________________;
                  Federal Funds Rate Loan  _____________;  Eurodollar  Rate Loan
                  ________________; CD Rate Loan ______________________.

            (b)   The aggregate  outstanding principal balance of the above Loan
                  is $_________________.

            (c)   As applicable, the last day of the current Interest Period for
                  such Loan is ------------------.

            (d)   The  principal  amount  of  such  Loan  to  be  [converted  or
                  continued] is $_________________.

            (e)   Such principal amount should be  converted/continued  into the
                  following type of Loan:

                  Base Rate Loan ____________________;
                  Federal Funds Rate Loan _____________;
                  Eurodollar Rate Loan ________________;
                  CD Rate Loan ______________________.

            (f)   The requested effective date of the  [conversion/continuation]
                  of such Loan is ---------------------.

            (g)   As applicable, the requested Interest Period applicable to the
                  new Loan is ---------------------.

      2.    No Event of Default under the Credit Agreement,  or event which with
            the passage of time or the giving of notice or both would constitute
            an Event of Default under the Credit Agreement,  has occurred and is
            continuing or will be caused by the advance requested hereby.

      3.    The  representations  and  warranties  set forth in Section 5 of the
            Credit  Agreement are true and correct as if made on the date hereof
            (except for such  representations and warranties as expressly relate
            to a prior date).

      Capitalized  terms used herein which are not defined herein shall have the
respective meanings set forth in the Credit Agreement.

      IN WITNESS  WHEREOF,  the undersigned  officer of the Company has executed
this Notice of Conversion/Continuation this ___ day of __________, _____.

                                     THE CHARLES SCHWAB CORPORATION

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________
                                     [must be signed by an Authorized Officer]

<PAGE>

                                    EXHIBIT D

                COMMITMENT AND TERMINATION DATE EXTENSION REQUEST

[Bank name and address]                                                [Date]

      Reference is made to that certain Credit  Agreement  (364-Day  Commitment)
dated as of June 22,  2001  ("Credit  Agreement")  entered  into by The  Charles
Schwab  Corporation  ("Borrower"),  Bank of America,  N.A., as Agent and Lenders
party thereto.  Terms defined in the Credit Agreement and not otherwise  defined
herein are used herein as defined in the Credit Agreement.

      Pursuant to Section 2.11 of the Credit Agreement, Borrower hereby requests
Agent to obtain  each  Lender's  agreement  to the  extension  of such  Lender's
Commitment  presently in effect,  in the amount of $[specify  amount of existing
Commitment], and the Termination Date presently in effect, for an additional 364
days.

      Agent's execution of a copy of this letter in the space provided below and
the transmission of such executed copy to Borrower shall constitute all Lenders'
acceptance  of  Borrower's  request and all  Lenders'  agreement  to the 364-day
extension sought herein. More specifically, upon the execution of a copy of this
letter by Agent on behalf of Lenders  and the  transmission  thereof to Borrower
within 15 days after Agent's receipt of this letter, (1) the Termination Date as
defined in Section 2.11 of the Credit  Agreement  shall be extended 364 days and
deemed changed to ___________________,  and (2) all other dates appearing in the
Credit  Agreement  that are referred to in Section 2.11 of the Credit  Agreement
shall correspondingly be extended 364 days.

      This  Commitment and  Termination  Date  Extension  Request is executed by
Borrower on ________________.

                                     BORROWER:

                                     THE CHARLES SCHWAB CORPORATION,
                                     a Delaware Corporation

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

ACCEPTED AND AGREED:

Agent, on Behalf of Lenders

By:_________________________
Name:_______________________
Title:______________________

<PAGE>

                                    EXHIBIT E

                          BORROWER'S OPINION OF COUNSEL

                            [Howard, Rice Letterhead]

                                     [Date]

Bank of America, N.A., as Agent
_______________________________
_______________________________

      Re:   Credit Agreement  (364-Day  Commitment),  dated June 22, 2001, among
            The Charles Schwab Corporation,  Bank of America, N.A., as Agent and
            the Lenders party thereto

Ladies and Gentlemen:

      This opinion is delivered at the request of The Charles Schwab Corporation
to you in your  capacity as Agent,  on behalf of the  Lenders,  under the Credit
Agreement  (364-Day   Commitment)  dated  as  of  June  22,  2001  (the  "Credit
Agreement")  among  The  Charles  Schwab  Corporation,  a  Delaware  corporation
("Borrower"), Bank of America, N.A., as the Administrative Agent and the Lenders
signatories  thereto (each a "Lender" and  collectively,  the  "Lenders").  This
opinion  letter speaks as of close of business on June 22, 2001  (hereafter  the
"operative date").

      We have acted as special counsel to Borrower in connection with the Credit
Agreement. In such capacity we have examined originals, or copies represented to
us by Borrower to be true copies, of the Credit Agreement;  and we have obtained
such  certificates  of such  responsible  officials  of  Borrower  and of public
officials  as we have deemed  necessary  for purposes of this  opinion.  We have
assumed  without  investigation  the  genuineness  of all signatures on original
documents,  the authenticity of all documents submitted to us as originals,  the
conformity to original documents of all documents submitted to us as photostatic
copies of originals,  and the accuracy and completeness of all corporate records
certified  to us by the Borrower to be accurate  and  complete.  We have further
assumed that the Credit  Agreement is binding upon and  enforceable  against the
Agent  and  the  Lenders.  As to  factual  matters,  we  have  relied  upon  the
representations  and  warranties  contained  in and made  pursuant to the Credit
Agreement.

      Capitalized terms not otherwise defined herein have the meanings given for
such terms in the Credit  Agreement.  For the  purpose  of this  opinion,  "Loan
Documents" as used herein means the Credit Agreement and the Notes.

<PAGE>

      Based upon the  foregoing  and in  reliance  thereon,  and  subject to the
exceptions and qualifications set forth herein, we are of the opinion that:

      1.    Borrower is a corporation duly formed, validly existing, and in good
            standing under the laws of Delaware.

      2.    Borrower has all requisite corporate power and authority to execute,
            deliver and perform all of its obligations under the Loan Documents.

      3.    Each Loan Document has been duly authorized,  executed and delivered
            by Borrower.  Each Loan Document  constitutes  the legal,  valid and
            binding  obligation  of Borrower,  enforceable  against  Borrower in
            accordance with its terms,  except as such validity,  binding nature
            or enforceability may be limited by:

            (a)   the  effect  of  applicable   federal  or  state   bankruptcy,
                  reorganization,  insolvency, fraudulent conveyance, moratorium
                  or other  similar  laws and  court  decisions  relating  to or
                  affecting creditors' rights generally;

            (b)   the  effect  of  legal  and  equitable   principles  upon  the
                  availability  of  creditors'  remedies,  regardless of whether
                  considered in a proceeding in equity or at law;

            (c)   the effect of California judicial decisions involving statutes
                  or principles of equity which have held that certain covenants
                  or  other   provisions  of   agreements,   including   without
                  limitation   those   providing   for   the   acceleration   of
                  indebtedness due under debt instruments upon the occurrence of
                  events   therein    described,    are   unenforceable    under
                  circumstances   where  it  cannot  be  demonstrated  that  the
                  enforcement of such provisions is reasonably necessary for the
                  protection  of the lender,  has been  undertaken in good faith
                  under the  circumstances  then existing,  and is  commercially
                  reasonable;

            (d)   the effect of Section  1670.5 of the  California  Civil  Code,
                  which  provides  that a court may refuse to enforce a contract
                  or may limit the  application  thereof or any  clause  thereof
                  which  the  court  finds  as a  matter  of  law to  have  been
                  unconscionable at the time it was made;

            (e)   the   unenforceability,   under  certain   circumstances,   of
                  provisions purporting to require the award of attorneys' fees,
                  expenses,  or costs,  where such provisions do not satisfy the
                  requirements of California Civil Code Section 1717 et seq., or
                  in any action where the lender is not the prevailing party;

            (f)   the   unenforceability,   under  certain   circumstances,   of
                  provisions  waiving stated rights or unknown future rights and
                  waiving  defenses  to  obligations,  where  such  waivers  are
                  contrary to applicable law or against public policy;

            (g)   the   unenforceability,   under  certain   circumstances,   of
                  provisions   which  provide  for   penalties,   late  charges,
                  additional  interest in the event of a default by the borrower
                  or fees or costs related to such charges;

            (h)   the   unenforceability,   under  certain   circumstances,   of
                  provisions  to the  effect  that  rights or  remedies  are not
                  exclusive, that every right or remedy is cumulative and may be
                  exercised in addition to or with any other right or remedy, or
                  that the election of some  particular  remedy or remedies does
                  not preclude recourse to one or another remedy;

            (i)   the  unenforceability  of  provisions  prohibiting  waivers of
                  provisions of either of the Loan  Documents  otherwise than in
                  writing  to the extent  that  Section  1698 of the  California
                  Civil Code permits oral modifications that have been executed;

            (j)   limitations on the  enforceability  of release,  contribution,
                  exculpatory,  or  nonliability  provisions,  under  federal or
                  state  securities   laws,   Sections  1542  and  1543  of  the
                  California  Civil Code,  and any other  applicable  statute or
                  court decisions; and

            (k)   limitations on the enforceability of any indemnity obligations
                  imposed upon or  undertaken by the borrower to the extent that
                  such  obligations do not satisfy the  requirements of Sections
                  2772 et seq.  of the  California  Civil Code and any  judicial
                  decisions  thereunder;   provided  that  the  limitations  and
                  qualifications   set  forth  in  the   immediately   preceding
                  sub-paragraphs (b) through (k) do not, in our opinion,  render
                  the remedies available to the Lenders under the Loan Documents
                  inadequate for the practical realization of the primary rights
                  and benefits reasonably expected by an institutional lender in
                  a comparable unsecured credit facility transaction governed by
                  California law.

      The  foregoing  opinions  are  subject  to the  following  exceptions  and
qualifications:

            a.    We have not been requested to verify and have not verified the
                  validity,  accuracy,  or  reasonableness of any of the factual
                  representations  contained  in  either  or  both  of the  Loan
                  Documents,  and we express no opinion  with  respect to any of
                  such matters.

            b.    We are members of the bar of the State of  California.  We are
                  opining herein only concerning matters governed by the Federal
                  laws of the United States of America,  the substantive laws of
                  the State of California,  and the General  Corporation  Law of
                  the State of Delaware,  and only with respect to Borrower.  We
                  express no opinion  concerning the  applicability to either or
                  both of the Loan Documents, or the effect thereon, of the laws
                  of any other jurisdiction.  Furthermore, we express no opinion
                  with respect to choice of law or conflicts of law, and none of
                  the opinions stated herein shall be deemed to include or refer
                  to choice of law or conflict of law.

            c.    We express no opinion on any Federal or state  securities laws
                  as they may relate to either or both of the Loan Documents.

            d.    We express no opinion as to compliance  with the usury laws of
                  any jurisdiction.

      The  opinions  set forth  herein are given as of the  operative  date.  We
disclaim  any  obligation  to notify you or any other person or entity after the
operative  date if any change in fact and/or law should  change our opinion with
respect to any matters set forth herein.  This opinion letter is rendered to you
in your  capacity  as the  Agent on  behalf  of the  Lenders  under  the  Credit
Agreement and may not be relied upon, circulated or quoted, in whole or in part,
by any other person or entity (other than the Lenders and a person or entity who
becomes an  assignee  or  successor  in  interest  of any  Lender or  acquires a
participation  from any Lender  consistent with the terms of the Loan Documents)
and shall not be referred to in any report or  document  furnished  to any other
person or entity without our prior written consent; provided,  however, that the
foregoing shall not preclude any Lender from describing or otherwise  disclosing
the  existence or contents of this letter to (i) any bank  regulatory  authority
having  jurisdiction  over such Lender,  as required by such  authority,  (ii) a
person or entity who, in  good-faith  discussions  between  such Lender and such
person or entity,  is proposed to become an assignee or successor in interest of
such  Lender or to acquire a  participation  from the Bank  consistent  with the
terms of the Loan Documents, and (iii) counsel to the Agent and the Lenders.

                                                     Very truly yours,

                                                     HOWARD, RICE, NEMEROVSKI,
                                                     CANADY, FALK & RABKIN
                                                     A Professional Corporation

                                                     By:________________________

<PAGE>

                                    EXHIBIT F

                   FORM OF NOTICE OF ASSIGNMENT AND ACCEPTANCE

To:      BANK OF AMERICA, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement (364-Day Commitment) dated as
of June 22, 2001 between THE CHARLES SCHWAB CORPORATION,  a Delaware corporation
("Borrower"),  Lenders  from time to time party  thereto,  and BANK OF  AMERICA,
N.A., as Administrative Agent (as amended, restated,  extended,  supplemented or
otherwise  modified in writing  from time to time,  the  "Agreement",  the terms
defined therein being used herein as therein defined).

1. We hereby give you notice of, and request your consent to, the  assignment by
_______________________  (the "Assignor") to __________________ (the "Assignee")
of  _________%  of the right,  title and  interest of the Assignor in and to the
Loan Documents,  including, without limitation, the right, title and interest of
the Assignor in and to the Commitment of the Assignor, and all outstanding Loans
made by the Assignor. Before giving effect to such assignment:

      (a)   the   aggregate    amount   of   the   Assignor's    Commitment   is
            $_______________.
      (b)   the  aggregate   principal  amount  of  its  outstanding   Loans  is
            $_____________.

2. The Assignee  hereby  represents  and warrants  that it has complied with the
requirements of Section 10.8 of the Agreement in connection with this assignment
and acknowledges and agrees that: (a) other than the representation and warranty
that it is the legal and  beneficial  owner of the Pro Rata Share being assigned
hereby  free  and  clear  of  any  adverse  claim,  the  Assignor  has  made  no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in  connection  with the
Agreement or the execution, legality, validity,  enforceability,  genuineness or
sufficiency  of the Agreement of any other Loan  Document;  (b) the Assignor had
made no representation or warranty and assumes no responsibility with respect to
the  financial  condition  of  Borrower  or the  performance  by Borrower of the
Obligations;  (c) it has received a copy of the Agreement,  together with copies
of the most  recent  financial  statements  delivered  pursuant  to Section  6.2
thereof and such other documents and information as it has deemed appropriate to
make its own credit  analysis  and  decision to enter into this  Assignment  and
Acceptance;  (d) it will independently and without reliance upon  Administrative
Agent or any Lender and based on such documents and information as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not  taking  action  under  the  Agreement;   (e)  it  appoints  and  authorizes
Administrative  Agent to take such action and to exercise  such powers under the
Agreement and the other Loan Documents as are delegated to Administrative  Agent
by the  Agreement  and such other  Loan  Documents;  and (f) it will  perform in
accordance  with their  terms all of the  obligations  which by the terms of the
Agreement are required to be performed by it as a Lender.

3. The Assignee  agrees that, upon receiving your consent to such assignment and
form and after  _______________,  the Assignee will be bound by the terms of the
Loan Documents,  with respect to the interest in the Loan Documents  assigned to
it as specified above, as fully and to the same extent as if the Assignee were a
Lender originally holding such interest in the Loan Documents.

4.       The following administrative details apply to the Assignee:

         (a)      Credit Contact:

                  Assignee name:_______________________________________
                  Address:_____________________________________________

                  Attention:___________________________________________
                  Telephone:___________________________________________
                  Telecopier:__________________________________________

         (b)      Operations Contract:

                  Assignee name:_______________________________________
                  Address:_____________________________________________

                  Attention:___________________________________________
                  Telephone:___________________________________________
                  Telecopier:__________________________________________

         (c)      Lending Office:

                  Assignee name:_______________________________________
                  Address:_____________________________________________

         (d)      Payment Instructions:

                  Assignee name:_______________________________________
                  ABA No.:_____________________________________________
                  Account No.:_________________________________________
                  Attention:___________________________________________
                  Reference:___________________________________________

<PAGE>

      IN WITNESS WHEREOF,  the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their  respective duly authorized
officials, officers or agents as of the date first above mentioned.

                                     Very truly yours,

                                     [ASSIGNOR]

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

                                     [ASSIGNEE]

                                     By:________________________________________
                                     Name:______________________________________
                                     Title:_____________________________________

We hereby consent to the foregoing assignment.

THE CHARLES SCHWAB CORPORATION,
as Borrower

By:_________________________________
Name:_______________________________
Title:______________________________

BANK OF AMERICA, N.A.,
as Administrative Agent

By:_________________________________
Name:_______________________________
Title:______________________________

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