Document:

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                                                                  Exhibit 10.1

               [Wexford Clearing Services Corporation Letterhead]

                   Agreement for Securities Clearance Services
                              Maxcor Financial Inc.

This letter sets forth our agreement (the "Agreement"), made as of March 20,
2000, concerning certain clearing services to be performed by Wexford Clearing
Services Corp. ("Wexford"), a wholly owned, fully guaranteed subsidiary of
Prudential Securities Inc. ("PSI"), for Maxcor Financial Inc. ("Introducing
Firm") with respect to transactions of Approved Counterparties (as defined
below) in the securities specified in Exhibit A hereto ("Specified Securities").
It is understood and agreed that this Agreement is contingent upon the approval
of the New York Stock Exchange, Inc. ("NYSE").

1.   Certain Definitions

         A.   "Applicable Rules" are, to the extent applicable, the Securities
              Act of 1933 and The Exchange Act of 1934, all rules and
              regulations thereunder and interpretations by the Securities and
              Exchange Commission ("SEC"), the rules and regulations of the
              National Association of Securities Dealers ("NASD") and the NYSE,
              all as in effect from time to time.

         B.   An "Approved Counterparty" is a dealer trading with Introducing
              Firm or a customer of Introducing Firm, which Wexford as of the
              date of this Agreement is accepting as a counterparty for trades
              brokered by Introducing Firm or to which Wexford hereafter sends a
              letter in the form of Exhibit B and which, in either case, Wexford
              continues to consider acceptable; provided, however, that (i)
              Wexford will make no material changes to the form of Exhibit B
              without the prior consent of Introducing Firm and (ii) any
              decision by Wexford to change the status of an Approved
              Counterparty will be communicated either orally and followed by
              fax or in writing to Introducing Firm in advance of its
              implementation.

         C.   A "Back-to-Back Transaction" occurs where Introducing Firm (i) has
              executed in a recorded conversation a sale by an Approved
              Counterparty to be settled by Wexford's parent, PSI, ("Side One")
              of Specified Securities and a buy to be settled by Wexford's
              parent, PSI, by another Approved Counterparty of Specified
              Securities ("Side Two"), (ii) has confirmed that Side One and Side
              Two agree on all details of the trade that must be met in order to
              settle (i.e. that Side One and Side Two are Validated
              Transactions) and (iii) has transmitted Side One and Side Two to
              Wexford on the same day.

         D.   "Clearing Corporation" means CEDEL/Euroclear or any other clearing
              organization that settles Transactions that Wexford clears for
              Introducing Firm.

         E.   A "Matching Back-to-Back Transaction" is a Back-to-Back
              Transaction with respect to which the counterparty to Side One and
              Side Two have both submitted instructions to the Clearing
              Corporation in the form required to settle Side One and Side Two,
              and a "Matching Transaction" is a Back-to-Back Transaction with
              respect to which only one counterparty has submitted instructions
              to the Clearing

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              Corporation in the form required to settle the side to which such
              counterparty is a party.

         F.   "Transactions" are any trades transmitted by Introducing Firm
              hereunder to Wexford for clearing and settlement.

         G.   A "Validated Transaction" is a sale or purchase of Specified
              Securities with an Approved Counterparty for which the Introducing
              Firm has confirmed all of the trade details necessary for
              settlement.

2.   Responsibilities of Introducing Firm

         A.   Transmitting Transactions

                  Introducing Firm shall execute orders for purchases and sales
         of Specified Securities by Approved Counterparties and transmit the
         Transactions to Wexford three times a day, at approximately 12:00 p.m.
         and 3:00 p.m., and by no later than 6:00 p.m. Eastern Standard Time
         (EST), (the last of which being referred to as the "Cut-Off Time"). Any
         Transactions that Wexford receives after the Cut-Off Time shall be
         subject to the additional fees set forth on Schedule A hereto.

                  (i)      Transmitting Back-to-Back Transactions

                  Introducing Firm shall not transmit to Wexford any Transaction
         that, by the Cut-Off Time, is not a Back-to-Back Transaction, with the
         following exception. Notwithstanding anything to the contrary in the
         Additional Terms forming a part of Exhibit B (the "Additional Terms"),
         Introducing Firm may transmit only Side One or Side Two, if at the end
         of the trading day one of the two sides is not a Validated Transaction,
         subject to the aggregate amount of such one-sided Transactions not
         exceeding a limit established by Wexford and communicated to
         Introducing Firm from time to time. Introducing Firm shall exert
         reasonable best efforts to transmit a Validated Side One or Side two
         the following business day. If Introducing Firm has not done so by the
         end of the day after the settlement date, Wexford may, upon prior
         notice to Introducing Firm, on the second day after settlement date buy
         in or sell out the securities to settle the other side. Introducing
         Firm shall be liable for all loss, costs and expenses relating thereto
         to the extent set forth in Sections 2.D. and 5.A. The foregoing right
         of Introducing Firm to delay the transmission of one side is subject to
         (i) termination at any time that Wexford deems that it is no longer
         prudent to accept only one side and (ii) satisfactory amounts on
         deposit in the Collateral Account, in Wexford's sole discretion. In any
         event, such one-sided Transactions shall give rise to the additional
         fees established in Section 3.A. (iii) and Schedule A, regardless of
         when after trade date Introducing Firm transmits to Wexford the other
         side of the Transaction.

         B.       Responsibility for Accounts

              Except as otherwise specified in this Agreement, Introducing Firm
         shall be solely responsible for the opening, approving and monitoring
         of counterparties (the "Accounts"), and ensuring that Transactions are
         in compliance with the Applicable Rules. Such responsibility, where
         applicable, includes, but is not limited to:

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                  (i) Using due diligence to learn and on a continuing basis to
                  know the essential facts of each customer, knowing all persons
                  holding power of attorney over any Account, being familiar
                  with each order in any Account and at all times to comply
                  fully with Rule 405 of the NYSE and the Conduct Rules of the
                  NASD, and any interpretations thereof, and all similar
                  Applicable Rules; (ii) selecting, investigating, training and
                  supervising all personnel who open, approve or authorize
                  transaction in the Accounts; (iii) establishing written
                  procedures for the conduct of the Accounts and ongoing review
                  of all Transactions in Accounts, and maintaining compliance
                  and supervisory personnel adequate to implement such
                  procedures; (iv) determining the suitability of all
                  Transactions; (v) ensuring that there is a reasonable basis
                  for all recommendations made; (vi) determining the
                  appropriateness of the frequency of trading in Accounts; (vii)
                  determining the authorization and legality of each transaction
                  in the Account; (viii) determining the amount of any
                  difference between the prices paid or received by an Account
                  for a Specified Security and the prices paid or received by
                  Wexford for said Specified Security; (ix) obtaining and
                  maintaining all documents necessary for the performance of
                  Introducing Firm's responsibilities under this Agreement and
                  retaining such documents in accordance with all the Applicable
                  Rules; (x) responding to all its customer inquiries and
                  complaints, and promptly notifying Wexford in writing of
                  complaints concerning Wexford; (xi) arranging for completion
                  of all Wexford forms and providing any supporting documents
                  required for the opening and maintenance of the Account and
                  (xii) promptly furnishing Wexford with all information
                  concerning its customer and Introducing Firm's relationship
                  with its customer and any related documents that Wexford may
                  reasonably require. Nothing herein shall restrict Wexford from
                  making any further inquiry or investigation, as Wexford deems
                  necessary.

         Introducing Firm authorizes and directs Wexford to (i) furnish promptly
         any written customer complaint received by Wexford, regarding
         Introducing Firm or its associated persons and relating to functions
         and responsibilities allocated to Introducing Firm, directly to
         Introducing Firm and to Introducing Firm's designated examining
         authority, and (ii) notify the customer, in writing, that Wexford has
         received the complaint and that the complaint has been furnished to
         Introducing Firm and Introducing Firm's designated examining authority.
         All other correspondence in the nature of customer inquiries or
         customer complaints relating to functions and responsibilities
         allocated to Wexford is to be directed to and responded to by Wexford.
         All such correspondence (including customer inquiries and complaints)
         is to be reviewed and replied to by Wexford or Introducing Firm
         depending on who is responsible for the function which is the subject
         matter of the correspondence. If such correspondence is not directed to
         the appropriate party initially, Wexford or Introducing Firm shall
         promptly forward such correspondence to the appropriate party.

         C.       Volume Limitations

         Introducing Firm shall not transmit to Wexford more than the number of
         Transactions per day that Wexford informs Introducing Firm from time to
         time constitute the Introducing Firm's volume limit, as set by Wexford
         in its reasonable discretion, acting in good faith. Any Transactions in
         excess of the volume limitation, as in effect from time to time, may be
         rejected by Wexford unless Wexford has earlier indicated orally or in
         writing in the course of the applicable day that it will accept such
         Transactions.

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         D.   Indemnification

         Introducing Firm agrees to indemnify and hold harmless Wexford, its
         officers, directors, employees and affiliates, against any and all
         losses, costs, claims and expenses (including reasonable attorneys'
         fees), as incurred, (a) arising out of (i) Wexford acting as clearing
         broker for Introducing Firm pursuant to this Agreement, (ii)
         Introducing Firm's failure to perform its obligations under this
         Agreement or the willful misconduct of Introducing Firm, and (b)
         constituting Introducing Firm Failure Costs or Counterparty Failure
         Costs (all referred to as "Indemnified Losses"), but excluding Credit
         Failure Costs, as defined in Section 5.B., any indirect or
         consequential losses, lost opportunity costs, or any Indemnified Loss
         caused by Wexford's or PSI's negligence, Wexford's or PSI's failure to
         perform their respective obligations under this Agreement, or Wexford's
         or PSI's willful misconduct. Wexford shall give Introducing Firm prompt
         written notice of any matter that may constitute an Indemnified Loss
         hereunder, and, if the Indemnified Loss involves a third-party claim,
         the Introducing Firm may, but shall not be obligated to, assume the
         defense thereof with counsel of its own choosing and at its own
         expense.

         E.   Recording, Retaining Tapes

         Introducing Firm shall record every trading conversation with
         counterparties to Transactions and shall retain tapes of all such
         conversations for at least thirty business days, and longer with
         respect to specified days, Approved Counterparties or Transactions if
         Wexford so requests, either orally and confirmed by fax or in writing.

3.   Responsibilities of Wexford

         A.   Clearing

         Subject to the exception described in Section 2. A. (i), Wexford's
         parent, PSI, is obligated to clear only Matching Back-to-Back
         Transactions and Matching Transactions with Approved Counterparties in
         Specified Securities, which entails Wexford's parent, PSI, taking a
         position as a fully disclosed principal on Side One and on Side Two of
         Matching Back-to-Back Transactions (or, in the case of Matching
         Transactions on the side that is matched) pursuant to the following
         procedure.

                  (i) Upon receipt of a transmission of Back-to-Back
                           Transactions from Introducing Firm, Wexford may, but
                           is not obligated to, check whether all or any number
                           of such Transactions fail to meet the definition of a
                           Back-to-Back Transaction. Subject to the exception
                           established in Section 2.A. (i), any Transaction that
                           does not meet the definition of a Back-to-Back
                           Transaction may be rejected by Wexford, and Wexford's
                           parent, PSI, shall not, unless the Transaction is
                           subsequently accepted by Wexford, be principal to the
                           counterparty nor carry the position on its books.

                  (ii) Wexford shall download to the Clearing Corporation by
                           either the end of the day of trade date or, with
                           respect to Transactions transmitted after the Cut-Off
                           Time, on T +1, the trade details received from
                           Introducing

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                           Broker for each Transaction that Wexford has not
                           rejected pursuant to subsection (i) above.

                  (iii) On the business day following the download of
                           information regarding any Transaction to the Clearing
                           Corporation, Wexford shall review a report from the
                           Clearing Corporation indicating whether any
                           Transactions were not Back-to-Back Transactions or
                           were not Matching Back-to-Back Transactions. In
                           either case, if Introducing Firm has transmitted any
                           Transaction to Wexford other than a Back-to-Back
                           Transaction, Introducing Firm shall pay to Wexford
                           the applicable fees set forth in Schedule A, and, as
                           set forth in Section 5.A., Introducing Firm shall
                           reimburse Wexford for all Introducing Firm Failure
                           Costs. Wexford's parent, PSI, shall settle as fully
                           disclosed principal any Transactions for which
                           Wexford has sent a confirmation, pursuant to Section
                           3.B. The sending of a confirmation shall mean that
                           Wexford's parent, PSI, has taken a position as
                           principal and is therefore carrying such Transactions
                           on its books, notwithstanding that Introducing Firm
                           remains financially responsible to Wexford hereunder
                           for any Introducing Firm Failure Costs and
                           Counterparty Failure Costs. Upon prior notice to
                           Introducing Firm, Wexford may take commercially
                           reasonable action to settle or liquidate any
                           unmatched Back-to-Back Transactions for which it has
                           sent a confirmation to the counterparty and has
                           submitted settlement instructions to the Clearing
                           Corporation.

         B.   Confirmations

         No later than T+1 or one day after Wexford has received a Transaction,
         whichever is later, Wexford shall deliver confirmations to all
         counterparties on Transactions that Wexford has not rejected pursuant
         to Section 3.A. (i) hereof and that Wexford is obligated to transmit to
         the Clearing Corporation, pursuant to Section 3.A. (ii). From the time
         that Wexford transmits a confirmation with respect to a Transaction
         pursuant to this Section 3.B, its parent, PSI, shall be acting as
         principal for and carrying such Transaction on its books for regulatory
         capital purposes. For the avoidance of doubt with respect to any
         Transaction transmitted to Wexford pursuant to the exception described
         in Section 2.A (i), Wexford's parent, PSI, shall act as principal for
         and carry such Transaction on its books for regulatory capital
         purposes, provided that it is a Validated Transaction, notwithstanding
         anything to the contrary in the Additional Terms.

         C.   Revenue; Fees

         Wexford shall receive on settled Matching Back-to-Back Transactions and
         Matching Transactions revenue in the form of commissions of Introducing
         Firm or the spread between Side One and Side Two. Wexford shall remit
         to Introducing Firm within five business days of the end of each
         calendar month such amounts remaining after Wexford deducts (i) its
         fee, as established in Schedule A, including any additional fees set
         forth therein for transmissions after the Cut-Off Time pursuant to
         Section 2.A. and for transmissions of non Back-to-Back Transactions
         pursuant to Section 3.A (iii) ("Fees"), (ii) Introducing Firm Failure
         Costs, (iii) Counterparty Failure Costs and (iv) amounts for any
         Indemnified Losses.

         Wexford shall furnish Introducing Firm with a detailed supporting
         schedule with each revenue payment. Wexford's determination of the
         amount payable to Introducing Firm

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         with respect to any calendar month shall be conclusive and binding on
         the parties hereto if Introducing Firm does not object thereto in
         writing, with details of its objections, within thirty (30) days after
         its receipt of such supporting schedule and any reasonably requested
         additional information with respect thereto, provided such request is
         made no later than 15 days after initial receipt of the supporting
         schedule.

         D.   Safekeeping/Credit

         Wexford shall be responsible for (i) the delivery and receipt of funds
         and/or Specified Securities to and from Accounts, as applicable, and
         for the transfer of Specified Securities to and from Accounts and (ii)
         the receipt, timely delivery and safeguarding of funds and securities
         and maintenance of books and records (including preparation and timely
         transmittal of the trade confirmations and statements) relating to all
         Transactions settled by Wexford or PSI pursuant to Section 3.A.

         Although Wexford in no way undertakes to extend credit to any Approved
         Counterparty, if it were to do so, any credit shall be extended in
         compliance with Regulation T, Rule 431 of the NYSE Rules and any other
         applicable margin regulations.

         E.   Indemnification

         Wexford agrees to indemnify and hold harmless Introducing Firm, its
         officers, directors, employees and affiliates, against any and all
         losses, costs, claims and expenses, reasonable legal fees (including
         reasonable legal fees incurred in the enforcement of this provision),
         as incurred, (a) caused by (i) Wexford's or PSI's failure to perform
         their respective obligations under this Agreement or (ii) Wexford's or
         PSI's negligence or willful misconduct or (b) constituting Credit
         Failure Costs, as defined in Section 5.B. (all referred to as "IF
         Indemnified Losses"), but excluding any indirect or consequential
         losses, or lost opportunity costs. The Introducing Firm shall give
         Wexford prompt written notice of any matter that may constitute an IF
         Indemnified Loss hereunder, and, if the IF Indemnified Loss involves a
         third party claim, Wexford may, but shall not be obligated to, assume
         the defense thereof with counsel of its own choosing and at its own
         expense.

         F.   Reports

         Wexford will provide Introducing Firm with same-day reports of
         Transactions that do not constitute Back-to-Back Transactions and with
         daily morning reports, starting with T+1, of Transactions that are not
         Matching Transactions.

         Simultaneously with the execution of this Agreement, and annually
         thereafter, Wexford shall furnish to Introducing Firm a list of all
         reports (i.e., exception and other types of reports) which it offers to
         Introducing Firm to assist Introducing Firm to supervise and monitor
         its introduced accounts in order for Introducing Firm to carry out its
         functions and responsibilities pursuant to this Agreement. These
         reports are in addition to the data, information or reports provided to
         Introducing Firm in the ordinary course of providing clearing Services
         to Introducing Firm. Introducing Firm shall notify Wexford promptly, in
         writing, of those specific reports offered by Wexford that Introducing
         Firm requires to supervise and monitor its introduced accounts.
         Annually, within 30 days of July 1 of each year, Wexford shall give
         written notice to Introducing Firm's chief executive and compliance
         officers, indicating, as of the date of such notice, the list of
         reports offered to

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         Introducing Firm pursuant to this paragraph and specifying those
         reports that were actually requested by and/or supplied to Introducing
         Firm as of such date. At the same time, Wexford shall provide a copy of
         this written notice to Introducing Firm's designated examining
         authority. Simultaneously with the execution of this Agreement,
         Introducing Firm shall furnish Wexford with a list of its chief
         executive and compliance officers and the name of its designated
         examining authority.

4.   Separate Responsibilities

         Pursuant to NYSE Rule 382, the parties have allocated between
         themselves in this Agreement responsibility for compliance with all
         applicable laws, rules and regulations of the SEC, NYSE and NASD. In
         addition, for purposes of the Securities and Exchange Commission's
         financial responsibility rules and SIPC, the Introducing Firm's
         customers will be considered customers of Wexford and not customers of
         the Introducing Firm; provided, however, that nothing in this Section
         shall cause the Introducing Firm's customers to be construed or
         interpreted as customers of Wexford for any other purpose or to negate
         the intent of any other Section of this Agreement, including, but not
         limited to, the delineation of responsibilities as set forth elsewhere
         in this Agreement.

         Each party shall be solely responsible for (i) adherence to Applicable
         Rules and for the supervision of its own operations area and personnel;
         (ii) compliance with all restricted/control stock requirements, as
         applicable to it; (iii) compiling and filing its respective regulatory
         reports, as applicable; and (iv) supplying the other with reasonable
         access to its relevant records and supplying any information in its
         possession reasonably requested by such party in order for both parties
         to properly perform their respective functions under the Agreement.
         Each party shall be responsible for its own errors with respect to this
         Section 4.

5.   Failure to Match; Failure to Settle; Responsibilities of the Parties

         A.      Not Back-to-Back Transactions/Introducing Firm Failure

         In the event Wexford receives a Transaction that does not meet the
         definition of a Back-to-Back Transaction for any reason, including
         without limitation, (i) the failure of Introducing Firm to transmit to
         Wexford Validated Transactions or (ii) the failure of Introducing Firm
         to transmit to Wexford Side One and Side Two on the same day,
         Introducing Firm shall have full responsibility for, and shall pay to
         Wexford upon demand, all amounts constituting Wexford's reasonable
         out-of-pocket costs (whether or not already paid), losses and expenses
         (including reasonable attorneys' fees) arising therefrom including,
         without limitation, costs to buy-in, borrow or sell-out the securities,
         to compel performance by the counterparty, or to pay additional
         personnel or overtime, but only if such additional personnel or
         overtime costs are beyond the ordinary course of business. All of the
         foregoing is referred to as "Introducing Firm Failure Costs".

         B.      Settlement Failure/Counterparty Failure

         In the event Wexford has transmitted a Back-to-Back Transaction to the
         Clearing Corporation that becomes a Matching Back-to-Back Transaction
         but that (i) fails on settlement date due to failure of the
         counterparty to deliver securities or cash or (ii) fails

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         to become a Matching Back-to-Back Transaction because of the failure of
         the counterparty to either Side One or Side Two to send to the Clearing
         Corporation adequate instructions required for settlement, but
         excluding in either case counterparty failure due to actual or
         impending bankruptcy or similar insolvency proceedings or credit issues
         ("Credit Failure Costs"), Introducing Firm shall be responsible for,
         and shall pay to Wexford upon demand, all amounts constituting
         Wexford's reasonable out-of-pocket costs (whether or not already paid),
         losses and expenses (including reasonable attorneys' fees) arising from
         such fail, including, without limitation, costs to buy-in, borrow or
         sell-out securities, to compel performance by the counterparty, to pay
         additional personnel or to pay overtime, but only if such personnel or
         overtime costs are beyond the ordinary course of business. All of the
         foregoing costs, losses, and expenses are referred to herein as the
         "Counterparty Failure Costs".

         C.   Suspension of Certain Trading

         If at any time the number of Transactions (either Side One or Side
         Two), with respect to which the counterparty has not provided Clearing
         Corporation with matching instructions, reaches an amount that Wexford
         finds unacceptable Wexford may, acting in good faith, suspend accepting
         Transactions from Introducing Firm, with respect to that counterparty,
         immediately upon written or oral notice, until such time that Wexford
         decides that it is prudent to resume accepting such Transactions
         hereunder. If at any time the number of Transactions that are not
         Back-to-Back Transactions reaches an amount that Wexford finds
         unacceptable (subject to Section 2.A. (i)), Wexford may, acting in good
         faith, suspend accepting Transactions from Introducing Firm immediately
         upon written or oral notice, until such time that Wexford decides that
         it is prudent to resume accepting Transactions hereunder.

         D.   Regulatory Capital

         It is understood that in no event shall Introducing Firm Failure Costs,
         Counterparty Failure Costs or Indemnified Losses include any costs or
         expenses of Wexford or PSI incurred in connection with capital charges
         for Transactions.

         In conformity with the SEC No-Action Letter dated November 3, 1998 and
         publicly available November 10, 1998 ("No-Action Letter") relating to
         the capital treatment of assets in the proprietary account of an
         introducing broker ("PAIB") and to permit Introducing Firm to use PAIB
         assets in its net capital computations, Wexford and Introducing Firm
         agree as follows:

         1)       Introducing Firm shall identify to Wexford in writing all
                  accounts that are, or from time to time may be, proprietary
                  accounts of Introducing Firm. Wexford shall perform a
                  computation for PAIB assets of Introducing Firm ("PAIB Reserve
                  Computation") in accordance with the customer reserve
                  computation set forth in Rule 15c3-3 under the Securities
                  Exchange Act of 1934 ("Customer Reserve Formula") with the
                  following modifications:

                  A) Any credit (including a credit applied to reduce a debit)
                  that is included in the customer reserve formula may not be
                  included as a credit in the PAIB Reserve Computation;

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                  B) Note E (3) to Rule 15c3-3a which reduces debit balances by
                  1% under the basic method and subparagraph (a)(1)(ii)(A) of
                  Rule 15c3-1 which reduces debit balances by 3% under the
                  alternative method shall not apply; and C) Neither Note E (1)
                  to Rule 15c3-3a nor Exchange Interpretation /04 to Item 10 of
                  Rule 15c3-3a regarding securities concentration charges shall
                  be applied to the PAIB Reserve Computation.

         2)       The PAIB Reserve Computation shall include all proprietary
                  accounts of introducing Firm. All PAIB assets shall be kept
                  separate and distinct from customer assets under the Customer
                  Reserve Formula in Rule 15c3-3.

         3)       The PAIB Reserve Computation shall be prepared within the same
                  time frames as those prescribed by Rule 15c3-3 for the
                  Customer Reserve Formula.

         4)       Wexford shall establish and maintain a separate "Special
                  Reserve Account for the Exclusive Benefit of Customers" with a
                  bank in conformity with the standards of paragraph (f) of Rule
                  15c3-3 ("PAIB Reserve Account"). Cash and/or qualified
                  securities as defined in the Customer Reserve Formula shall be
                  maintained in the PAIB Reserve Account in an amount equal to
                  the PAIB reserve requirement.

         5)       If the PAIB Reserve Computation results in a deposit
                  requirement, the requirement may be satisfied to the extent of
                  any excess debit in the Customer Reserve Formula of the same
                  date. However, a deposit requirement resulting from the
                  Customer Reserve Formula shall not be satisfied with excess
                  debits from the PAIB Reserve Computation.

         6)       Within two business days of entering into this Agreement,
                  Introducing Firm shall notify its designated examining
                  authority in writing (with a copy to Wexford) that it has
                  entered into this Agreement regarding the capital treatment of
                  Introducing Firm's PAIB assets.

         7)       Commissions receivable and other receivables of Introducing
                  Firm from Wexford (excluding clearing deposits) that are
                  otherwise allowable assets under Rule 15c3-1 may not be
                  included in the PAIB Reserve Computation, provided the amounts
                  have been clearly identified as receivables on the books and
                  records of Introducing Firm and as payables on the books of
                  Wexford.

         8)       If Introducing Firm is a guaranteed subsidiary of Wexford or
                  if Introducing Firm guarantees Wexford (i.e., guarantees all
                  liabilities and obligations) then the proprietary accounts of
                  Introducing Firm shall be excluded from the PAIB Reserve
                  Computation.

         9)       Upon discovery that any deposit made to the PAIB Reserve
                  Account did not satisfy its deposit requirement, Wexford shall
                  by facsimile or telegram immediately notify its designated
                  examining authority and the SEC. Unless a corrective plan is
                  found acceptable by the SEC and the designated examining
                  authority, Wexford shall provide written notification within 5
                  business days of the date of discovery to Introducing Firm
                  that PAIB assets held by Wexford shall not be deemed allowable
                  assets for net capital purposes. The notification shall also
                  state that if Introducing Firm wishes to continue to count its
                  PAIB assets as allowable, it has until the last business day
                  of the month following the month in which the notification was
                  made to transfer all PAIB assets to another clearing broker.
                  However, if the deposit deficiency is remedied before the time
                  at which Introducing Firm must transfer its PAIB assets to
                  another clearing broker, Introducing Firm may choose to keep
                  its assets at Wexford.

         10)      Wexford and Introducing Firm shall adhere to the terms of the
                  No Action Letter, including the Interpretations as set forth
                  therein, in all respects.

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         6.   Fees and Charges

         Introducing Firm agrees to pay Wexford the fees and charges set forth
         in Schedule A hereto.

         7.   Introducing Firm Representations and Covenants

         Introducing Firm represents, warrants and covenants to Wexford as
         follows:

                  (i) It is a member in good standing of the NASD.

                  (ii) It is and during the term of this Agreement will remain
                         duly registered or licensed and in good standing as a
                         broker/dealer under the Applicable Rules.

                  (iii) It has all the requisite authority in conformity with
                           all Applicable Rules to enter into this Agreement and
                           to retain the services of Wexford in accordance with
                           the terms hereof and has taken all necessary action
                           to authorize the execution of this Agreement and the
                           performance of the obligations hereunder.

                  (iv) It is in compliance, and during the term of this
                           Agreement will remain in compliance with (a) the
                           capital and financial reporting requirements of any
                           and all national securities exchange or other
                           securities exchange and/or securities association of
                           which it is a member, (b) the capital requirements of
                           the Securities and Exchange Commission and (c) the
                           NASD Conduct Rules.

                  (v) It shall provide representatives of any governmental
                           body having jurisdiction over the respective
                           businesses of the parties with reasonable access to
                           the records relating to Accounts and their owners.

                  (vi) It shall keep confidential any information it may
                           acquire as a result of this Agreement regarding the
                           business and affairs of Wexford, which requirements
                           shall survive the termination of this Agreement.

         8.   Wexford and PSI Representations and Covenants

         Each of PSI and Wexford represents, warrants and covenants to
         Introducing Firm as follows:

                  (i) Each of PSI and Wexford is a member in good standing
                           of the NASD and of the NYSE.

                  (ii) Each of PSI and Wexford is and during the term of
                           this Agreement will remain duly licensed and in good
                           standing as a broker/dealer under the Applicable
                           Rules.

                  (iii) Each of PSI and Wexford has all the requisite
                           authority, in conformity with all Applicable Rules to
                           enter into and perform this Agreement and has taken
                           all necessary action to authorize the execution of
                           this Agreement and the performance of the obligations
                           hereunder.

                  (iv) Each of PSI and Wexford is in compliance, and during
                           the term of this Agreement will remain in compliance
                           with (a) the capital and financial reporting
                           requirements of every national securities exchange
                           and/or other securities exchange or association of
                           which it is a member, (b) the capital requirements of
                           the Securities and Exchange Commission and (c) the
                           NASD Conduct Rules.

                                       10
<PAGE>

                  (v) The names and addresses of Introducing Firm's
                           customers which have or which may come to Wexford's
                           or PSI's attention in connection with the clearing
                           and related functions it has assumed under this
                           Agreement are confidential and shall not be utilized
                           by Wexford or PSI except in connection with the
                           functions performed by Wexford and PSI pursuant to
                           this Agreement. Notwithstanding the foregoing, should
                           any customer of Introducing Firm request, on an
                           unsolicited basis that Wexford become its broker,
                           acceptance of such Account by Wexford and PSI shall
                           in no way violate this representation and warranty,
                           nor result in a breach of this Agreement.

                  (vi) Each of PSI and Wexford shall keep confidential any
                           information it may acquire as a result of this
                           Agreement regarding Introducing Firm's business and
                           affairs, which requirement shall survive the
                           termination of this Agreement.

         9.   Nature of Relationship

              A.  Wexford shall limit its services pursuant to the terms of this
                  Agreement to that of the clearing and the specified related
                  functions described herein, and Introducing Firm shall not
                  hold itself out as an agent of Wexford or of any subsidiary or
                  company controlled directly or indirectly by or affiliated
                  with Wexford. Neither this Agreement nor any operation
                  hereunder shall create a general or limited partnership,
                  association or joint venture or agency relationship between
                  the parties.

              B.  Introducing Firm shall not, without the prior written approval
                  of Wexford, place any advertisement in any newspaper,
                  publication, periodical or any other media if such
                  advertisement in any manner makes reference to Wexford or to
                  the clearing arrangements set forth in this Agreement;
                  provided, however, that the public parent company of
                  Introducing Firm may name Wexford and accurately describe this
                  Agreement in any filing such company makes with the Securities
                  and Exchange Commission pursuant to either the Securities Act
                  of 1933 or the Securities Exchange Act of 1934.

              C.  Should Introducing Firm in any way hold itself out as,
                  advertise or represent that it is the agent of Wexford,
                  Wexford may, at its option, terminate this Agreement and
                  Introducing Firm shall be liable for any loss, liability,
                  damage, claim, cost or expense (including but not limited to
                  reasonable fees and expenses of legal counsel) sustained or
                  incurred by Wexford as a result of such a representation of
                  agency or apparent authority to act as an agent of Wexford or
                  agency by estoppel.

         10.  Deposit of Collateral

              A.  To ensure Introducing Firm's performance of its obligations
                  under this Agreement (including, without limitation, the
                  payment of Fees, Introducing Firm Failure Costs, Counterparty
                  Failure Costs and Indemnified Losses), there shall be
                  established a securities holding account with Wexford to be
                  opened in the name of Introducing Firm and designated as the
                  Introducing Firm Collateral Account (the "Collateral
                  Account"). The Collateral Account shall at all times contain
                  cash, securities, or a combination of both, having a market
                  value of not less than the sum required by Wexford as of the
                  date of this Agreement; provided that Wexford shall have the
                  right, in its reasonable discretion, to increase upon not less
                  than three business days

                                       11
<PAGE>

                  notice to Introducing Firm, the Collateral Amount to reflect
                  materially changed conditions relating to the Introducing Firm
                  or its business or an unusually high number or value of
                  unresolved errors or fails with respect to Transactions (the
                  "Collateral Amount"). Said securities shall consist only of
                  direct obligations issued by or guaranteed as to principal and
                  interest by the United States and such other securities as
                  Wexford may in writing consent to, in its sole discretion,
                  from time to time. As collateral security for all of its
                  obligations to Wexford under and with respect to this
                  Agreement, Introducing Firm hereby pledges, assigns and grants
                  a first priority security interest and lien to Wexford in and
                  upon all property from time to time now or hereafter in the
                  Collateral Account, and Wexford shall have all rights and
                  remedies with respect thereto of a secured party under the New
                  York Uniform Commercial Code or other applicable law, as well
                  as its other rights hereunder. Introducing Firm represents and
                  warrants that any Collateral shall be free of any lien, pledge
                  or interest other than that of Wexford. Introducing Firm shall
                  be entitled to receive all cash distributions made on or in
                  respect of the securities unless the market value of the cash
                  and/or securities in the Collateral Account is less than the
                  Collateral Amount. If the Collateral Account consists of cash,
                  Wexford shall pay interest to the Introducing Firm on this
                  cash held from time to time at an agreed upon rate. If at any
                  time the market value of the cash and/or securities in the
                  Collateral Account fall below 90% of the Collateral Amount, as
                  determined by Wexford, Wexford may, by notice to Introducing
                  Firm, demand that Introducing Firm deliver additional
                  collateral to the Collateral Account no later than the third
                  following business day to increase the market value to the
                  full Collateral Amount.

              B.  Except as provided herein, Introducing Firm shall not have
                  access to, nor have any right to transfer or withdraw any cash
                  or securities from, the Collateral Account without the prior
                  written consent of Wexford. The Collateral Account shall not
                  be deemed to be margin for any Approved Counterparty accounts.

              C.  Wexford shall have the right to deduct the amount of any and
                  all amounts owed to Wexford hereunder, including without
                  limitation, Fees, Introducing Firm Failure Costs and
                  Counterparty Failure Costs and Indemnified Losses, from the
                  securities collateral, and, in such event, Wexford shall have
                  the right to liquidate the securities in a commercially
                  reasonable manner; provided, however, Wexford agrees to deduct
                  the foregoing amounts first from revenue, pursuant to Section
                  3.C. and then, to the extent revenue is insufficient, from the
                  Collateral Account. Any amounts deducted from revenue or the
                  Collateral Account, which are subsequently determined (by
                  Wexford, mutual agreement, arbitration or otherwise) to be
                  incorrect, excessive or otherwise not the responsibility of
                  Introducing Firm, shall be promptly reimbursed by Wexford to
                  Introducing Firm together with interest thereon (from the date
                  of deduction to the date of reimbursement) calculated at a
                  comparable Treasury rate.

              D.  Within thirty (30) days of the termination of this Agreement,
                  Wexford will (a) effect the payment and delivery to
                  Introducing Firm of the funds and/or securities in the
                  Collateral Account, less any amounts Wexford is entitled to
                  withdraw under the preceding paragraph; provided, however,
                  that Wexford may retain in the Collateral Account such amount
                  as it reasonably deems appropriate for its protection from any
                  claim or proceeding of any type then threatened or pending,
                  until the final determination thereof is made, and (b) deliver
                  or cause to be delivered to Introducing Firm (without the
                  reproduction or other copying thereof) all documents and other
                  materials, including customer lists, prepared in connection
                  with this Agreement or

                                       12
<PAGE>

                  the business of Introducing Firm, except for such documents
                  and other materials as Wexford may have destroyed in the
                  normal course of its business or may be required to keep for
                  regulatory purposes or otherwise as may be required by law. In
                  any event, Wexford agrees that no such documents or other
                  materials will be distributed by it to any person or group in
                  or outside Wexford that does not have responsibility for the
                  administration, legal or audit review of this Agreement or
                  transactions thereunder.

         11.  Assignment

                  This Agreement shall be binding upon and inure to the benefit
                  of each party hereto and its successors and assigns.
                  Introducing Firm may not assign its rights and/or obligations
                  hereunder without the prior written consent of Wexford, which
                  consent shall not be unreasonably withheld.

         12.  Amendments; Waiver; Integration

                  Any amendment or supplement to this Agreement and any waiver
                  of any rights hereunder must be in writing signed by the
                  Parties. Further, without limiting the foregoing, no failure
                  to enforce a right, no act or pattern of conduct shall
                  constitute an amendment, supplement or waiver. This Agreement
                  supersedes all other agreements between the parties with
                  respect to the subject matter hereof.

         13.  Governing Law

                  This agreement shall be construed and interpreted in
                  accordance with the internal laws of the state of New York
                  without reference to choice of law principles.

         14.  Arbitration

                  Each party agrees that any claim, dispute, grievance or
                  controversy arising under this Agreement or any Transactions
                  executed or arising therefrom or thereunder shall be settled
                  by arbitration pursuant to and in accordance with Article XI
                  of the NYSE Constitution and the NYSE Arbitration Rules. Each
                  party further agrees to service of process in any arbitration
                  proceeding by mailing of copies thereof (by registered or
                  certified mail, if practicable) postage prepaid, or by telex,
                  to it at an address for notices under this Agreement; and
                  agrees that nothing herein shall affect the other party's
                  right to effect service of process in any other manner
                  permitted by NYSE Arbitration Rules, and that each party shall
                  have the right to bring a proceeding for enforcement of a
                  judgment entered by any arbitration panel against the other
                  party in any court or jurisdiction in accordance with
                  applicable law.

         15.  Termination

                  This Agreement may be terminated by either party upon ninety
                  days' written notice given to the other party at any time, or
                  immediately upon written notice following an

                                       13
<PAGE>

                  Event of Default which event shall occur if (i) either party
                  shall fail to perform or observe any term, covenant or
                  condition to be performed or observed by it hereunder and such
                  failure shall continue to be un-remedied for a period of five
                  business days after written notice from the non-defaulting
                  party to the defaulting party specifying the failure and
                  demanding that the same be remedied; (ii) any representation
                  or warranty made by either party shall prove to be incorrect
                  at any time in any material respect; (iii) a receiver,
                  liquidator or trustee of either party, or of any material
                  property held by either party, is appointed by court order; or
                  either party is adjudicated bankrupt or insolvent; or any of
                  its material property is sequestered by court order and such
                  order is not appealed and stayed within fifteen days of its
                  entrance; or a petition is filed against either party under
                  the bankruptcy, reorganization, arrangement, insolvency,
                  readjustment of debt, dissolution or liquidation law of any
                  jurisdiction, whether now or hereafter in effect and is not
                  dismissed within fifteen days of such filing, or (iv) either
                  party makes an assignment for the benefit of its creditors, or
                  admits in writing its inability to pay its debts generally as
                  they become due, or consents to the appointment of a receiver,
                  trustee or liquidator of either party, or of any property held
                  by either party.

         16.  Notices

                  Written notices shall be properly made if hand delivered,
                  mailed (registered mail) or telecopied ("faxed") to the party
                  entitled to receive such notices at the following address or
                  telephone number:

                       To Introducing Firm:
                       Maxcor Financial Inc
                       2 World Trade Center, 84th Floor
                       New York, N.Y. 10048-0697
                       Tel. No:  (212) 748-7040
                       Fax No.: (212) 748-7049
                       Attn.:  Steven Vigliotti, Chief Financial Officer

                       To Wexford:
                       Wexford Clearing Services Corp.
                       One New York Plaza, 34th Floor
                       New York, New York 10292-2034
                       Tel. No.: 212-778-7772
                       Fax No.: 212-778-7622
                       Attn. Thomas S. Dillon, Executive Vice President

         17.   Miscellaneous

                  There will be no Account opened on behalf of any employee or
                  officer of any New York Stock Exchange member organization,
                  self-regulatory organization or other financial institution
                  without the prior written consent of Wexford.

                                       14
<PAGE>

         This Agreement and all transactions in the Accounts, will be subject to
         the applicable constitution, rules, by-laws, regulations and customs of
         any securities market, association, exchange or clearing house where
         such transactions are effected, and also to all applicable NYSE and
         NASD Rules and to all U.S. federal and state laws and regulations.

         All telephone conversations in connection with Transactions under the
         Agreement may be electronically recorded and may be used to resolve any
         uncertainty or any dispute arising in connection with this Agreement or
         any transaction hereunder.

                                       15
<PAGE>

         Please indicate your agreement with the foregoing by signing and
         returning the enclosed copy of this letter.

                            Very truly yours,

                            Wexford Clearing Services Corporation

                            By:      /s/ Thomas S. Dillon
                                     -----------------------------------

                            Name:    Thomas S. Dillon
                                     -----------------------------------

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

                            Prudential Securities Incorporated

                            By:      /s/ Daniel Cavanaugh
                                     -----------------------------------

                            Name:    Daniel Cavanaugh
                                     -----------------------------------

                            Title:   Senior Vice President
                                     -----------------------------------

ACCEPTED AND AGREED TO AS OF
THE DATE FIRST SET FORTH ABOVE:

Maxcor Financial Inc

By:      /s/ Keith E. Reihl
         -----------------------------------

Name:    Keith E. Reihl
         -----------------------------------

Title:   Chief Operating Officer
         -----------------------------------

                                       16
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                        Schedule of Specified Securities
                        --------------------------------

      1.       Securitized Adjustable Rate Mortgages

      2.       Asset-backed Securities bearing a credit rating of AA or better

      3.       Collateralized Mortgage Obligations bearing a credit rating
               Have AA or better

      4.       GNMA, FNMA and Freddie Mac Securities

      5.       Brady Bonds

      6.       U.S. Government and Agency Securities

      7.       Sovereign Debt - EuroClear/CEDEL/DTC Eligible

      8.       Euro Bonds

      9.       Corporate Securities

      10.      Convertible Bonds

      11.      Municipal Securities

      12.      High Yield Corporate Bonds

                                       17
<PAGE>

                                                                       Exhibit B
                                                                       ---------

                  RE:  Maxcor Financial Inc.
                       Allocation of Brokerage Account Responsibilities
                       ------------------------------------------------

Ladies and Gentlemen:

         As you know, your account has been introduced to Wexford Clearing
Services Corporation ("Wexford"), a wholly owned, fully guaranteed subsidiary of
Prudential Securities Incorporated ("PSI"), by your brokerage firm, Maxcor
Financial Inc. ("Maxcor"), for the purpose of Wexford's parent, PSI, clearing
trades, as fully disclosed principal, in certain specified securities pursuant
to the clearing services agreement between Maxcor and Wexford.

         Once Wexford enters a trade on its books, you will be considered a
customer of Wexford for purposes of the Securities and Exchange Commission's
financial responsibility rules and the Securities Investor Protection Act.
Nothing herein shall cause customers of Maxcor to be construed as customers of
Wexford for any other purpose..

         In establishing this relationship, Maxcor is acting solely on your
behalf and not on behalf of, or as agent of, Wexford. Maxcor shall remain
responsible for the ongoing relationship that it has with you, and for the
following:

         o  Learning your investment objectives and opening, approving and
            monitoring your account and in all respects complying with Rule 405
            of the New York Stock Exchange.

         o  Reviewing your account and all orders in it and supervising all
            investment advice.

         o  Accepting or rejecting your orders and correcting errors in trade
            details in order to transmit only matching transactions to Wexford.

         o  Ensuring that all the transactions conducted in your account are in
            compliance with all applicable law and rules.

         o  Responding to any inquiries or complaints you may make concerning
            your account.

         o  Supervising all functions performed by Maxcor's employees, including
            investment advisory, sales, trading and account opening and
            approving activities.

         Additionally, Maxcor is responsible to Wexford for supplying all
documentation required by Wexford, notwithstanding the fact that Wexford has at
all times the right to contact you directly regarding its information
requirements. Wexford has at all times the right, exercisable in its sole
discretion, to refuse to accept orders for your account.

         Wexford will be responsible for the following areas:

                                       18
<PAGE>

         o  Clearing as a principal, transactions in your account pursuant to
            Maxcor's instruction.

         o  Maintaining books and records and filing regulatory reports.

         o  Delivering and receiving funds and securities to or from your
            account, transfers of securities, payment of dividends or interest
            and the handling of exchange or tender offers, rights, warrants and
            redemptions in accordance with the last instructions received either
            from you or Maxcor.

         o  Safeguarding funds and securities.

         o  Preparing and transmitting confirmations and statements.

         Any questions you may have concerning the conduct of your account
should be addressed directly to Maxcor.

         You agree that any and all telephone conversations between us with
respect to the contemplated transactions may be tape recorded and we each
authorize the other to do so and we each hereby waive further notice of tape
recording. In the event of any dispute, tapes can be used in any forum in which
a dispute is sought to be resolved.

         THE ATTACHED ADDITIONAL TERMS SET FORTH ADDITIONAL INFORMATION,
PROCEDURES AND LIMITATIONS APPLICABLE TO TRANSACTIONS IN YOUR ACCOUNT. PLEASE
READ IT CAREFULLY. UNLESS AND UNTIL OTHERWISE AGREED AMONG YOU, WEXFORD AND
MAXCOR, THE TERMS OF THIS LETTER, INCLUDING THE ATTACHED ADDITIONAL TERMS, WILL
GOVERN ANY TRADES THAT MAXCOR INTRODUCES TO WEXFORD ON YOUR BEHALF.

                            Very truly yours,

                            WEXFORD CLEARING SERVICES CORPORATION

                            By:
                                ----------------------------------
                                Thomas S. Dillon
                                Executive Vice President

                                       19
<PAGE>

                                ADDITIONAL TERMS
                                ----------------

The following are procedures for trades in the specified securities below which
will be initiated by Maxcor Financial Inc. ("Maxcor"), and in which you and
Wexford Clearing Services Corporation's ("Wexford") parent, Prudential
Securities Incorporated ("PSI"), will act as principals. In general, Wexford
will be responsible for the booking of trades initiated by Maxcor and approved
by Wexford and for maintaining appropriate records of all such transactions and
sending you confirmation. Maxcor. is responsible for adherence to those
securities laws, regulations and rules, that apply to it regarding its own
operations and for supervision of its own personnel.

Authorized employees of Maxcor may, by telephone, directly contact your trading
desk to initiate transactions between you and Wexford. However, such employees
of Maxcor will not be acting as agent for Wexford and no proposed transaction
will be deemed approved or confirmed by Wexford and no such transaction will be
consummated by Wexford until your trading desk compares the transaction by
telephone with Wexford's authorized personnel and Wexford directly confirms by
telephone the transaction. Wexford's parent, PSI, will act as a principal in
each of these back-to-back transactions only after each side, i.e., the purchase
side and the sell side is independently and severally confirmed by Wexford's
authorized personnel. Exceptions to telephonic confirmation will be if trades
are confirmed via GSCC for Government Securities; MBSCC for Mortgage-backed
Securities; MATCH-EM System operated by Emerging Markets Clearing Corporation,
or EuroClear, or CEDEL for Euro Bonds and Emerging Debt Securities (LDC's); and
GEMS MATCH-EM System or EuroClear or CEDEL for Brady Bonds. Wexford agrees that
once a transaction has been so confirmed, Wexford's parent, PSI, is thereafter
acting as principal in the trade, and you agree that you will always act as
principal on the other side of the trade. All your customary documentation for
trades in which you act as principal, regardless of how initiated, should be
sent directly to Wexford and Wexford will send you its usual documentation.

The specified securities are: Securitized Adjustable Rate Mortgages;
Asset-backed Securities bearing a credit rating of AA or better; CMO's bearing a
credit rating of AA or better; GNMA, FNMA and Freddie Mac Securities; Brady
Bonds; U.S. Government and Agency Securities; Sovereign Debt/ EuroClear/CEDEL
eligible; Euro Bonds; Corporate Bonds; Convertible Bonds; Municipal Securities;
High Yield Corporate Bonds.

Euro and Brady Bond transactions should be submitted to Ken Shore for
comparison. Our number is (212) 778-2872; FAX (212) 778-8115/7244/7962.
Confirmations should be sent to Wexford Clearing Services Corporation, Attn: Ken
Shore, One New York Plaza, and 34th floor, New York, N.Y. 10292.

Mortgage trades should be submitted to Len Bialous for comparison. Our number is
212-778-7719; FAX (212) 778-8184. Confirmations of such trades should be sent to
Wexford Clearing Services Corporation, Attn: Len Bialous, One New York Plaza,
34th floor, New York, N.Y. 10292.

Government trades should be submitted to Bruce Wallace for comparison. Our
number is (212) 778-3376. Confirmations of such trades should be sent to:
Wexford Clearing Services Corporation, Attn: Bruce Wallace, One New York Plaza,
12th Floor, New York, NY 10292.

Corporate and Equity transactions should be submitted to Hilda Mele for
comparison. Our number is (212) 778-7746; FAX (212) 778-8184. Confirmations
should be sent to Wexford

                                       20
<PAGE>

Clearing Services Corporation, Attn: Hilda Mele, One New York Plaza, and 34th
floor, New York, N.Y. 10292.

Attached please find a complete list of all delivery instructions.

                                       21
<PAGE>

                                   Schedule A
                                   ----------

Schedule A has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of
1934, as amended.

                                       22<PAGE>

                          AGREEMENT AND GENERAL RELEASE

                  This Agreement and General Release is entered into among
Reliance Group Holdings, Inc., Park Avenue Plaza, 55 East 52nd Street, 29th
Floor, New York, New York 10055 ("RGH"), Reliance Insurance Company, 3 Parkway,
Philadelphia, Pennsylvania 19102 ("RIC") (RGH and RIC are sometimes referred to
together as "Reliance"), and Robert M. Steinberg, 2 Stevens Lane, Bernardsville,
New Jersey 07924 ("Steinberg"):

                  WHEREAS, Steinberg and Reliance mutually desire to terminate
Steinberg's employment with Reliance and his service as an officer and director
of RGH, RIC, and their parent companies, subsidiaries and affiliates; and

                  WHEREAS, Steinberg and Reliance disagree with respect to
certain aspects of the Employment Agreement dated as of February 15, 1996
between Steinberg and RGH, as amended (the "RGH Employment Agreement") and the
Employment Agreement dated as of February 15, 1996 between Steinberg and RIC
(the "RIC Employment Agreement"); and

                  WHEREAS, in order to resolve this disagreement and to settle
Steinberg's and Reliance's rights and obligations in connection with the
termination of Steinberg's employment with Reliance, Steinberg and Reliance
agree to enter into this Agreement and General Release, intending to fully
supersede and cancel the RGH Employment Agreement and the RIC Employment
Agreement; and

                  WHEREAS, Steinberg understands that, by entering into this
Agreement and General Release, which fully supersedes and cancels the RGH
Employment Agreement and the RIC Employment Agreement, he relinquishes any and
all right he has to future employment with Reliance; and

                  WHEREAS, Steinberg further understands that, as provided in
paragraph "10" below, this Agreement and General Release waives, settles and
releases any and all claims that he has or might have against RGH and RIC and
their past, present and future direct and indirect parent companies,
subsidiaries, affiliates, divisions, predecessors, successors and assigns and
the past, present and future officers, directors, employees and agents of each
of the foregoing entities, arising up to and including the date of his execution
of this Agreement and General Release; and

                  WHEREAS, the terms of this Agreement and General Release are
the product of mutual negotiation and compromise between Reliance and Steinberg;
and

                  WHEREAS, Steinberg has been afforded 21 days to consider the
meaning and effect of this Agreement and General Release and has used that time
to read it and consider the

<PAGE>

general release by him set forth in this Agreement and General Release; and

                  WHEREAS, Steinberg is advised to consult with an attorney of
his choosing prior to his execution of this Agreement and General Release, and
Steinberg has in fact consulted with and been represented by Earl H. Nemser,
Esq. and Richard A. Goldberg, Esq., of Swidler Berlin Shereff Friedman, LLP,
with respect to this Agreement and General Release; and

                  WHEREAS, Steinberg has carefully considered alternatives to
executing this Agreement and General Release.

                  THEREFORE, RGH, RIC, and Steinberg, for the good and
sufficient consideration set forth below and in consideration of the mutual
promises contained herein, hereby agree as follows:

                  1. The terms and conditions of this Agreement and General
Release shall become effective, operable, and enforceable immediately upon the
expiration of the seven-day revocation period referred to below without there
having been a revocation by Steinberg of this Agreement and General Release.

                  2. (a) Steinberg acknowledges and agrees that his last day of
employment with Reliance shall be the date of his execution of this Agreement.
Steinberg hereby resigns from any and all officer and director positions he
holds with RGH and RIC, and their parent companies, subsidiaries and affiliates,
such resignation to be effective upon his execution of this Agreement and
General Release.

                     (b) Steinberg acknowledges and agrees that he is not
entitled to, and shall not receive, any bonus for any past, present or future
year or any part thereof.

                  3. (a) Steinberg shall be entitled to participate in the
Reliance group medical and dental plans for one year after his last day of
employment with Reliance (on the same terms and with the same level of benefits
as were provided prior to the date hereof), provided that he pays to Reliance
the cost allocated to an employee for such participation.

                     (b) Steinberg acknowledges and agrees that the period, if
any, under paragraph "3(a)" above for which he participates in the Reliance
group medical and dental plans after his last day of employment with Reliance
shall be counted toward the maximum period under COBRA for which Steinberg is
entitled to participate in such plans after his employment with Reliance has
ceased.

                     (c) Steinberg acknowledges and agrees that, except as
provided in paragraph "3(a)" above, his eligibility for and participation in all
Reliance employee benefits and benefit plans shall cease as of his last day of
employment with Reliance.

                                       2
<PAGE>

                     (d) Steinberg acknowledges and agrees that any and all
contributions, benefit accruals and vesting service by him in the Reliance
Savings Incentive Plan, the RGH Pension Plan, the RIC Employee Retirement Plan,
and the RGH Benefit Equalization Plan shall cease as of his last day of
employment with Reliance.

                     (e) Steinberg acknowledges and agrees that his eligibility
for and use of all Reliance fringe benefits and perquisites (including but not
limited to car allowances, cellular phone allowances and club memberships) shall
cease as of his last day of employment with Reliance.

                  4. (a) Within two (2) business days after the expiration of
the seven-day revocation period referred to below (five (5) business days in the
case of (ii) and (iii) below) without there having been a revocation by
Steinberg of this Agreement and General Release:

                  (i)      Reliance will pay into an account at M&T Bank (the
                           account name and number of which is to be supplied
                           jointly by M&T Bank and Steinberg immediately upon
                           the expiration of the seven-day revocation period
                           referred to below) One Million Five Hundred Thousand
                           Dollars ($1,500,000.00) by a check or checks drawn on
                           the account of RGH and/or RIC;

                  (ii)     Reliance will assign to Steinberg any and all
                           interest Reliance has or may have in the following
                           life insurance policies heretofore maintained on
                           Steinberg's life: (x) Nationwide Life Insurance
                           Company Policy No. N100224770; (y) Phoenix American
                           Life Insurance Company Account No. A000433; and (z)
                           Security Mutual Life Insurance Company of New York
                           Policy No. 915837; and

                  (iii)    Steinberg will surrender to Reliance all of his
                           options to purchase RGH common stock with an exercise
                           price greater than $5.00 per share and, in exchange
                           therefor, Reliance will permit Steinberg to exercise
                           his remaining options until April 16, 2002.

                     (b) Within five (5) business days after the later of (x)

the expiration of the seven-day revocation period referred to below without
there having been a revocation by Steinberg of this Agreement and General
Release and (y) the occurrence of the Effectiveness Event (as defined in
paragraph "4(c)" below):

                  (i)      Reliance will pay Steinberg Two Million Five Hundred
                           Thousand Dollars ($2,500,000.00) by a

                                       3
<PAGE>

                           check or checks drawn on the account of RGH and/or
                           RIC; and

                  (ii)     Reliance will deliver to Steinberg two million
                           (2,000,000) shares of RGH common stock (the "Shares")
                           or, in the event of a merger of RGH with or into
                           another company at or before the Effectiveness Event,
                           the merger consideration which the holder of such
                           Shares immediately prior to the merger would be
                           entitled to receive, provided, however, that Reliance
                           shall have the right in its sole and absolute
                           discretion to elect (the "Election"), in lieu of and
                           in full satisfaction of any obligation to deliver the
                           Shares or merger consideration, to pay Steinberg Five
                           Million Dollars ($5,000,000.00) by a check or checks
                           drawn on the account of RGH and/or RIC. The Election
                           shall be made, if at all, only after the occurrence
                           of the Effectiveness Event and may be made by sending
                           written notice to Steinberg at the address specified
                           above.

                     (c) The term "Effectiveness Event" shall mean the first to
occur of the following: (i) RGH's receipt of a firm written commitment for at
least $350,000,000 in new and additional capital through an equity investment in
RGH by a third party unaffiliated with RGH as of the date of Steinberg's
execution of this Agreement and General Release; (ii) the successful refinancing
(or extension of the maturity until at least August 31, 2001) of the
$237,500,000 in debt due to be repaid by RGH's subsidiary Reliance Financial
Services Corp. on August 31, 2000; (iii) the closing of an acquisition, whether
by merger, stock purchase, or tender offer, approved by the Board of Directors
of RGH of more than 50% of RGH's outstanding common stock by a third party
unaffiliated with RGH; or (iv) the expiration of the four (4) year term of the
consultancy as provided for in Section 2.2 of the Consulting Agreement (as
defined in paragraph "21" below).

                  5. Steinberg represents and agrees that any Shares he may
acquire under this Agreement and General Release are for his own account and are
acquired with no present intention of distributing or reselling the Shares in
any transaction which would be in violation of the securities laws of the United
States of America or any state thereof. Steinberg acknowledges that: (i) the
Shares are "restricted securities" as defined in the Securities Act of 1933, as
amended (the "Act"), and are therefore subject to restrictions on resale; and
(ii) Steinberg is an "accredited investor" as such term is defined in Regulation
230.501(a) under the Act. Steinberg acknowledges and agrees that, in making any
subsequent offering or sale of the Shares, he will be acting only for himself
and not as part of a sale or planned distribution which would be in violation of
the Act.

                                       4
<PAGE>

                  6. If at any time within two (2) years of the date of
Reliance's delivery of the Shares to Steinberg, RGH proposes to register any
shares of its common stock under the Act, whether or not for sale for its own
account or for the account of any stockholder (other than shares to be issued
pursuant to (i) an employee compensation program or (ii) a merger, acquisition
or similar transaction), in a manner which would permit registration of the
shares for sale to the public under the Act, it will each such time give written
notice to Steinberg of its intention to do so and, upon the written request of
Steinberg made within ten (10) business days after his receipt of any such
notice (which request shall specify the Shares intended to be disposed of by
Steinberg and the intended method of disposition thereof), RGH will use its best
efforts to effect the registration under the Act of all Shares which RGH has
been so requested to register by Steinberg, to the extent requisite to permit
the disposition (in accordance with the intended methods thereof as aforesaid)
of the Shares so to be registered; provided that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the Registration Statement filed in connection with such
registration, RGH shall determine for any reason not to register such
securities, RGH may, at its election, give written notice of such determination
to Steinberg and, thereupon, shall be relieved of its obligation to register any
Shares in connection with such registration.

                  7. Steinberg shall not: (a) in any manner acquire, agree to
acquire, or make any proposal to acquire, directly or indirectly, any securities
or property of Reliance, except at the specific written request of Reliance or
pursuant to his exercise of outstanding stock options; (b) propose to enter
into, directly or indirectly, any merger or business combination involving
Reliance or to purchase, directly or indirectly, a material portion of the
assets of Reliance; (c) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are used in the proxy
rules of the Securities and Exchange Commission) to vote, or seek to advise or
influence any person with respect to the voting of, any voting securities of
Reliance; (d) form, join, or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) with respect
to any voting securities of Reliance; (e) otherwise act, alone or in concert
with others, to seek to control or influence the management, Board of Directors,
or policies of Reliance; (f) disclose any intention, plan, or arrangement
inconsistent with the foregoing; or (g) advise, assist, or encourage any other
person in connection with any of the foregoing. Steinberg's obligations under
this paragraph shall terminate six (6) years from the date of his execution of
this Agreement and General Release. Steinberg also agrees during such six-year
period not to (x) request Reliance (or its directors, officers, employees or
agents), directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence), or (y) take any

                                       5
<PAGE>

action which might require Reliance to make a public announcement regarding the
possibility of a business combination or merger.

                  8. All payments to be made to Steinberg under this Agreement
and General Release shall be made subject to all withholding obligations, if
any, of Reliance, as determined by Reliance's tax department and tax advisors.
Based on current law, Reliance believes that, currently, withholding obligations
do not apply to the payments provided for in paragraph "4" above.

                  9. RGH and RIC shall indemnify and hold harmless, and provide
advancement of expenses to, Steinberg, to the same extent he had the right to
indemnification or advancement of expenses immediately prior to the termination
of his employment or resignation from any positions with Reliance or its
subsidiaries, pursuant to RGH's and RIC's certificates of incorporation, bylaws,
and indemnification agreements, if any, in existence on the date of Steinberg's
execution of this Agreement and General Release, but only with respect to claims
actually and first asserted against him during the six (6) years after his
execution of this Agreement and General Release by reason of the fact that he
was a director, officer, employee, fiduciary, or agent of Reliance or its
subsidiaries.

                  10. Steinberg, of his own free will, voluntarily releases and
forever discharges RGH and RIC and their past, present and future direct and
indirect parent companies, subsidiaries, affiliates, divisions, predecessors,
successors and assigns and the past, present and future officers, directors,
employees and, in their capacities as such, agents of each of the foregoing
entities (the foregoing released parties are referred to collectively in this
Agreement and General Release as "Releasees") of and from any and all actions,
causes of action, suits, claims, debts, charges, complaints, and promises
whatsoever, known or unknown, in law or equity, arising up to and including the
date of Steinberg's execution of this Agreement and General Release, which
Steinberg, his heirs, executors, administrators, successors and assigns may now
have or hereafter can, shall or may have against the Releasees, or any of them,
for, upon, or by reason of any matter, cause or thing whatsoever. The foregoing
general release and discharge includes but is not limited to any and all matters
arising out of or relating to Steinberg's ownership of Reliance securities, his
employment with Reliance, the termination of said employment, any and all
breaches of the RGH Employment Agreement and the RIC Employment Agreement, and
any and all violations of Title VII of the Civil Rights Act of 1964 (as amended
by, inter alia, the Civil Rights Act of 1991), the Americans With Disabilities
Act of 1990, the Age Discrimination in Employment Act, the Older Workers Benefit
Protection Act, Sections 1981 through 1988 of Title 42 of the United States
Code, the Immigration Reform and Control Act of 1986, the Employee Retirement
Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act
of 1985, the National Labor Relations Act, the Fair Labor Standards Act, the

                                       6
<PAGE>

Occupational Safety and Health Act, the Family and Medical Leave Act, the New
York Human Rights Law (New York Executive Law ss. 290, et seq.), the New York
Equal Pay Act, the New York Wage and Hour Laws, the New York City Human Rights
Law (New York City Administrative Code ss. 8-101, et seq.), or any other
federal, state or local civil, labor, wage-hour or human rights law, and any and
all alleged violations of any other federal, state or local law, regulation or
ordinance, or of any public policy, contract or tort or common law having any
bearing whatsoever on the terms and conditions of or termination of Steinberg's
employment with Reliance. Notwithstanding anything in this paragraph to the
contrary, the foregoing release shall not be construed to release (x) any claim
Steinberg may have for vested benefits under the RGH Pension Plan, the RIC
Employee Retirement Plan, and the RGH Benefit Equalization Plan; or (y) any
rights under this Agreement and General Release or the Consulting Agreement (as
defined in paragraph "21" below).

                  11. To the fullest extent permitted by law:

                       (a) Steinberg affirms and agrees that he has not caused
or permitted to be filed, nor will he cause or permit to be filed, nor will he
accept any relief or recovery from, any charge, complaint or action brought
before any federal, state or other agency or court, within the United States or
elsewhere, against the Releasees, or any of them, which arises out of any
conduct, acts or omissions of the Releasees, or any one or more of them,
occurring on or before the date of Steinberg's execution of this Agreement and
General Release, other than to enforce his rights under this Agreement and
General Release or the Consulting Agreement (as defined in paragraph "21"
below).

                       (b) Prior to and as a condition precedent to the filing
by Steinberg of any such charge, complaint or action, and in addition to any and
all other remedies to which Reliance is, or would under such circumstances be,
entitled under this Agreement and General Release and applicable law, Steinberg
agrees to and shall return to Reliance any and all amounts paid to him and any
Shares or merger consideration delivered to him under paragraph "4" above. In
the event that (i) Steinberg becomes obliged, pursuant to the preceding
sentence, to return any and all amounts paid to him and any and all Shares or
merger consideration delivered to him under paragraph "4" above and (ii)
Steinberg has theretofore sold or otherwise disposed of some or all of the
Shares or merger consideration, Steinberg shall, in lieu of returning the Shares
or merger consideration theretofore sold or otherwise disposed of by him (and in
addition to returning to Reliance any and all amounts paid to him under
paragraph "4" above and any and all Shares or merger consideration still in his
possession, custody or control), pay Reliance an amount equal to the value of
the consideration received for the Shares or merger consideration so sold or
otherwise disposed of.

                                       7
<PAGE>

                       (c) In addition to any and all other remedies to which
the Releasees are, or would under such circumstances be, entitled under this
Agreement and General Release and applicable law, if any such charge, complaint
or action is filed by Steinberg, Steinberg acknowledges and agrees that it shall
be dismissed with prejudice upon presentation of a copy of this Agreement and
General Release to the pertinent agency or court.

                       (d) In addition to any and all other remedies to which
the Releasees are, or would under such circumstances be, entitled under this
Agreement and General Release and applicable law, Steinberg shall reimburse the
Releasees for the costs, including but not limited to reasonable attorneys'
fees, of defending against any such charge, complaint or action filed by
Steinberg.

                  12. To the fullest extent permitted by law, Steinberg agrees
to release the Releasees, as specifically provided in paragraph "10" above, not
only from any and all claims which he could make on his own behalf, but also
from those which may be made by any other person or entity on his behalf, and
specifically waives any right to become, and promises not to become, a member of
any class in a case in which a claim or claims against the Releasees, or any of
them, are made involving any events up to and including the date of his
execution of this Agreement and General Release. To the fullest extent permitted
by law, Steinberg further agrees that he shall not in any way, except as
compelled by a court order or subpoena, assist or cooperate with any other
person or entity in commencing or prosecuting any action or proceeding against
the Releasees, or any of them, or receive any proceeds as a result thereof. In
the event that Steinberg is served with such a court order or subpoena,
Steinberg agrees to notify the General Counsel of RGH of such service within 24
hours after obtaining actual knowledge of the service or receiving the court
order or subpoena, whichever occurs first.

                  13. Steinberg agrees to cooperate fully with and to make
himself available to Reliance and/or the other Releasees, at his expense (except
as provided for in the next sentence of this paragraph) and at such times and
locations and for such durations as Reliance may request, on such notice to
Steinberg as Reliance may give, in connection with any and all investigations,
enforcement actions, subpoenas, litigation, arbitrations, proceedings, claims,
or other matters, whether pending, threatened or otherwise, and whether or not
Steinberg or Reliance or any other Releasee is a party thereto, including but
not limited to making himself available for witness interviews and court
appearances and to prepare for and give testimony and depositions. In the event
that Reliance requests Steinberg, in writing, pursuant to the preceding sentence
of this paragraph, to travel to and make himself available at a location more
than 100 miles from Steinberg's residence referred to above, then Reliance shall
pay Steinberg's reasonable expenses actually incurred in

                                       8
<PAGE>

making himself available at that location. Steinberg's obligations as set forth
in this paragraph shall not be subject to prior business or social commitments
or vacations.

                  14. Except as compelled by a court order or subpoena,
Steinberg agrees not to disclose, directly or indirectly, any information
regarding the existence, substance or terms of this Agreement and General
Release, except to his spouse (who shall be deemed to be bound by this
confidentiality provision) and any attorney or certified public accountant with
whom he chooses to consult regarding this Agreement and General Release. In
addition, Steinberg represents and affirms that heretofore he has not disclosed
any information regarding the existence, substance or terms of this Agreement
and General Release, except to his spouse and any attorney or certified public
accountant with whom he chose to consult regarding this Agreement and General
Release.

                  15. Steinberg agrees not to disparage or impugn Reliance or
any of its past, present and future employees, officers and directors to or in
the presence of any third party, or otherwise to refer to Reliance or any of its
past, present and future employees, officers and directors in derogatory terms,
or in terms or in a manner intended or tending to subject any of them to
ridicule or contempt, to or in the presence of any third party.

                  16. Except as otherwise specified in this Agreement and
General Release, Steinberg agrees to direct all communications relating to this
Agreement and General Release or any matters relating to his employment with
Reliance, or the termination of such employment, to the Chief of Corporate
Operations of RGH. In addition, Steinberg agrees to direct all prospective
employers and other third parties to communicate with Reliance concerning
Steinberg only through the Chief of Corporate Operations of RGH.

                  17. Steinberg agrees not to be interviewed by, answer
questions of, or otherwise communicate in any way with any reporter, journalist,
broadcaster, editor, or other representative of any broadcast, print, or other
medium regarding Reliance, any of Reliance's past, present and future employees,
officers and directors, his employment with Reliance, or the termination of such
employment. Steinberg further agrees that he will not cause or permit anyone
else to do so on his behalf. Steinberg shall direct all such press and media
inquiries to the Chief of Corporate Operations of RGH.

                  18. No later than his last day of employment with Reliance,
Steinberg shall return to Reliance any and all property of Reliance and its
direct and indirect parent companies, subsidiaries and affiliates, including but
not limited to: files, documents, records, manuals and other things relating to
the business of Reliance and its direct and indirect parent companies,
subsidiaries and affiliates; company cars; employee

                                       9
<PAGE>

identification cards; keys to vehicles, desks, offices, rooms and buildings;
security and "key" cards; and computer equipment, printers, modems, telephones,
telecopiers, beepers, pagers and other office equipment and supplies. In
addition, no later than his last day of employment with Reliance, Steinberg
shall surrender any and all club memberships for which Reliance bears any
liability or responsibility (including but not limited to any liability to pay
any dues, costs, or expenses in connection with any such membership), and shall
obtain the return to Reliance of any and all deposits made on behalf of
Steinberg by Reliance in connection with any such membership.

                  19. Steinberg and Reliance acknowledge and agree that this
Agreement and General Release, the terms and provisions hereof, and the
furnishing by Reliance of the consideration specified herein are the product of
mutual negotiation and compromise between Reliance and Steinberg, and may not
and shall not be used against Reliance or the other Releasees, or any of them,
in any action or proceeding other than an action by Steinberg to enforce the
terms of this Agreement and General Release. Steinberg agrees that neither this
Agreement and General Release nor the furnishing by Reliance of the
consideration specified herein shall be deemed or construed at any time as an
admission by Reliance of any liability for unlawful or improper conduct of any
kind.

                  20. This Agreement and General Release may not be modified,
altered or changed except upon the express written consent of Steinberg, RGH,
and RIC, in which specific reference is made to this Agreement and General
Release.

                  21. This Agreement and General Release fully supersedes and
cancels any and all prior agreements and understandings between Steinberg and
RGH and between Steinberg and RIC, including but not limited to the RGH
Employment Agreement and the RIC Employment Agreement. Notwithstanding anything
herein to the contrary, however, this Agreement and General Release does not
supersede or cancel that certain Consulting Agreement (the "Consulting
Agreement") made as of the 23rd day of June, 2000 by and between RIC and
Steinberg, which Consulting Agreement shall not become effective, operable or
enforceable unless and until executed by the parties thereto, and which RIC and
Steinberg hereby agree to execute (in the form annexed hereto) within five (5)
business days after the expiration of the seven-day revocation period referred
to below without there having been a revocation by Steinberg of this Agreement
and General Release.

                  22. This Agreement and General Release shall be governed by
the laws of the State of New York without regard to any choice of law or
conflicts of law principles.

                  23. Should any provision of this Agreement and General

                                       10
<PAGE>

Release be declared illegal or unenforceable by any court of competent
jurisdiction and it cannot be modified to be enforceable, said provision shall
immediately become null and void, leaving the remainder of this Agreement and
General Release in full force and effect. However, if any portion of paragraph
"10," "11," or "12" above is ruled to be unenforceable, in whole or in part, for
any reason, Steinberg agrees to and shall return to Reliance any and all amounts
paid to him and any Shares or merger consideration delivered to him under
paragraph "4" above. In the event that (i) Steinberg becomes obliged, pursuant
to the preceding sentence, to return any and all amounts paid to him and any and
all Shares or merger consideration delivered to him under paragraph "4" above
and (ii) Steinberg has theretofore sold or otherwise disposed of some or all of
the Shares or merger consideration, Steinberg shall, in lieu of returning the
Shares or merger consideration theretofore sold or otherwise disposed of by him
(and in addition to returning to Reliance any and all amounts paid to him under
paragraph "4" above and any and all Shares or merger consideration still in his
possession, custody or control), pay Reliance an amount equal to the value of
the consideration received for the Shares or merger consideration so sold or
otherwise disposed of.

                  24. This Agreement and General Release has been, and shall be
deemed to have been, jointly prepared by the parties hereto, and the terms
hereof shall not be construed in favor of or against any party hereto by reason
of its or his participation or role in such preparation.

                  25. This Agreement and General Release shall inure to the
benefit of and be binding on RGH and RIC and their successors and assigns and
Steinberg and his heirs, administrators, executors, successors and assigns.

STEINBERG SPECIFICALLY REPRESENTS, AGREES, AND ACKNOWLEDGES THAT HE HAS BEEN
ALLOWED 21 DAYS WITHIN WHICH TO CONSIDER CAREFULLY AND, IF HE SO DESIRES, TO
EXECUTE THIS AGREEMENT AND GENERAL RELEASE. STEINBERG FURTHER UNDERSTANDS THAT
HE WILL HAVE 7 DAYS AFTER EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE WITHIN
WHICH TO REVOKE IT. THIS AGREEMENT MAY BE REVOKED BY STEINBERG BY WRITTEN NOTICE
OF SUCH REVOCATION ADDRESSED AND ACTUALLY DELIVERED TO HOWARD E. STEINBERG,
EXECUTIVE VICE PRESIDENT AND CHIEF OF CORPORATE OPERATIONS, RELIANCE GROUP
HOLDINGS, INC., PARK AVENUE PLAZA, 55 EAST 52ND STREET, 29TH FLOOR, NEW YORK,
NEW YORK 10055, WITH SAID REVOCATION TO BE EFFECTIVE ONLY UPON RECEIPT. IN THE
EVENT OF SUCH REVOCATION, (1) THE RIGHTS, OBLIGATIONS AND DUTIES OF STEINBERG
AND RELIANCE UNDER THIS AGREEMENT AND GENERAL RELEASE SHALL BE DEEMED TO HAVE
TERMINATED IN ALL RESPECTS AND (2) THIS AGREEMENT AND GENERAL RELEASE SHALL BE
DEEMED TO HAVE BEEN SOLELY FOR PURPOSES OF ATTEMPTED SETTLEMENT AND NO PARTY
SHALL REFER TO IT OR THE FACT THAT ANY PARTY EXECUTED IT IN ANY SUBSEQUENT LEGAL
PROCEEDING.

                                       11
<PAGE>

RELIANCE AND STEINBERG HAVE READ AND FULLY CONSIDERED THIS AGREEMENT AND GENERAL
RELEASE AND ARE MUTUALLY DESIROUS OF ENTERING INTO IT. THE TERMS OF THIS
AGREEMENT AND GENERAL RELEASE ARE THE PRODUCT OF MUTUAL NEGOTIATION AND
COMPROMISE BETWEEN RELIANCE AND STEINBERG. STEINBERG HAS BEEN ADVISED TO CONSULT
WITH AN ATTORNEY OF HIS CHOOSING PRIOR TO HIS EXECUTION OF THIS AGREEMENT AND
GENERAL RELEASE, AND HAS IN FACT CONSULTED WITH AN ATTORNEY REGARDING THIS
AGREEMENT AND GENERAL RELEASE. HAVING ELECTED TO EXECUTE THIS AGREEMENT AND
GENERAL RELEASE AND TO FULFILL THE PROMISES AND RECEIVE THE CONSIDERATION SET
FORTH HEREIN, STEINBERG VOLUNTARILY, FREELY, AND KNOWINGLY, AND AFTER DUE
CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING, AS MORE
SPECIFICALLY PROVIDED IN PARAGRAPH "10" ABOVE, TO WAIVE, SETTLE AND RELEASE ANY
AND ALL CLAIMS THAT HE HAS OR MIGHT HAVE AGAINST RGH AND RIC AND THEIR PAST,
PRESENT AND FUTURE DIRECT AND INDIRECT PARENT COMPANIES, SUBSIDIARIES,
AFFILIATES, DIVISIONS, PREDECESSORS, SUCCESSORS AND ASSIGNS AND THE PAST,
PRESENT AND FUTURE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS OF EACH OF THE
FOREGOING ENTITIES, ARISING UP TO AND INCLUDING THE DATE OF HIS EXECUTION OF
THIS AGREEMENT AND GENERAL RELEASE.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement and General
Release on the dates shown below.

                                                    /s/ Robert M. Steinberg
                                              ------------------------------
                                                     ROBERT M. STEINBERG

STATE OF ________________)
                         :  ss.:
COUNTY OF _______________)

         On the ___ day of ____________, 2000, before me personally came Robert
M. Steinberg, to me known and known to me to be the individual described in and
who executed the foregoing instrument, and acknowledged to me that he executed
the same.

--------------------------------
       Notary Public

                                       12
<PAGE>

                                             RELIANCE GROUP HOLDINGS, INC.

                                             By: /s/ George E. Bello
                                                 -------------------------
                                                 Name:  George E. Bello
                                                 Title: Executive Vice President

STATE OF NEW YORK   )
                    :  ss.:
COUNTY OF NEW YORK  )

         On the ___ day of _____________, 2000, before me personally came
__________________, to me known, who being by me duly sworn, did depose and say
that he is _______________________ of RELIANCE GROUP HOLDINGS, INC., the
corporation described in and which executed the foregoing instrument; that he
signed the foregoing instrument on behalf of said corporation; and that he was
duly authorized to sign the foregoing instrument on behalf of said corporation
and to bind said corporation thereto.

--------------------------------
        Notary Public

                                       13
<PAGE>

                                             RELIANCE INSURANCE COMPANY

                                             By: /s/ George E. Bello
                                                 -------------------------
                                                 Name:  George E. Bello
                                                 Title: Executive Vice President

STATE OF NEW YORK   )
                    :  ss.:
COUNTY OF NEW YORK  )

         On the ___ day of _____________, 2000, before me personally came
__________________, to me known, who being by me duly sworn, did depose and say
that he is _______________________ of RELIANCE INSURANCE COMPANY, the
corporation described in and which executed the foregoing instrument; that he
signed the foregoing instrument on behalf of said corporation; and that he was
duly authorized to sign the foregoing instrument on behalf of said corporation
and to bind said corporation thereto.

--------------------------------
        Notary Public

                                       14

<PAGE>

                              CONSULTING AGREEMENT

         This Consulting Agreement is made as of the 23rd day of June, 2000, by
and between Reliance Insurance Company ("Company") and Robert M. Steinberg
("Consultant").

         WHEREAS, Consultant has experience in the administration and operation
of insurance companies; and

         WHEREAS, Company wishes to engage Consultant as a consultant to assist
in the administration and operation of Company and its insurance subsidiaries
and to obtain an agreement not to compete;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                            SECTION 1. EFFECTIVENESS

         1.1 Effectiveness. The terms and conditions of this Agreement shall
become effective, operable and enforceable as of the date first recited above.

                             SECTION 2. CONSULTANCY

         2.1 Engagement as Consultant. Company hereby engages Consultant and
Consultant agrees to serve as a consultant for the term and pursuant to the
terms and conditions hereinafter set forth.

         2.2 Term of Consultancy. The term of the engagement of Consultant shall
commence on the first day of the month immediately following the date as of
which this Agreement is executed by the parties and shall terminate four (4)
years later.

         2.3 Services as Consultant.

         2.3.1 Consultant shall perform such services, consistent with his past
duties and responsibilities, as are reasonably requested by the Board of
Directors or the Chief Executive Officer of Company from time to time upon
reasonable advance notice, subject to Consultant's prior business commitments,
disabilities and vacations, involving the administration and operation of
Company or its insurance subsidiaries.

         2.3.2 Consultant shall provide such services in a competent and
professional manner, using his own independent skills and judgment and the
manner and means that are reasonably suited to his performance of such services.

         2.3.3 Consultant agrees to serve Company faithfully and to perform his
duties under this Agreement to the best of his ability and capacity. Consultant
further agrees to perform his consulting services and all other obligations
undertaken by him under this Agreement in a manner in all respects consistent
with his continuing fiduciary duties to Company (including but not limited to
the duty of loyalty), which duties Consultant hereby acknowledges and affirms.

<PAGE>

         2.3.4 Consultant's services will be rendered in such locations in New
York, New Jersey, or Pennsylvania as Company shall request at such times as may
be mutually agreed upon by Company and Consultant. The availability of
Consultant to perform such services shall be subject to his prior business
commitments, disabilities and vacations. Consultant shall not be required to
devote more than 480 man-hours per full calendar year to the performance of such
services.

         2.3.5 In addition to his obligations set forth elsewhere in this
Section 2.3, Consultant agrees to cooperate fully with and to make himself
available to Company, at his expense (except as provided for in the next
sentence of this paragraph 2.3.5) and at such times and locations and for such
durations as Company may request, on such notice to Consultant as Company may
give, in connection with any and all investigations, enforcement actions,
subpoenas, litigation, arbitrations, proceedings, claims, or other matters,
whether pending, threatened or otherwise, and whether or not Consultant or
Company is a party thereto, including but not limited to making himself
available for witness interviews and court appearances and to prepare for and
give testimony and depositions. In the event that Company requests Consultant,
in writing, pursuant to the preceding sentence of this paragraph 2.3.5, to
travel to and make himself available at a location more than 100 miles from
Consultant's residence at 2 Stevens Lane, Bernardsville, New Jersey, then
Company shall pay Consultant's reasonable expenses actually incurred in making
himself available at that location. Consultant's obligations as set forth in
this Section 2.3.5 shall not be subject to prior business or social commitments
or vacations.

         2.4 Consulting Fee.

         2.4.1 In consideration of and subject to the punctilious performance by
Consultant of his obligations hereunder, Company shall pay Consultant an annual
consulting fee of Two Million Two-Hundred Fifty Thousand and 00/100 Dollars
($2,250,000.00), payable monthly in arrears on the last day of each month during
the term of the engagement of Consultant under this Agreement.

         2.4.2 Consultant and Company acknowledge and agree that Consultant is
an independent contractor and not an agent or employee of Company and that
Consultant has no authority to bind Company. Inasmuch as Consultant is an
independent contractor under applicable current laws and regulations, Company
will not withhold income, social security or other taxes from payments made
under this Section 2.4. Consultant hereby agrees to be responsible for all
income, social security and other taxes that may be applicable to Consultant's
receipt of payments made under this Section 2.4.

         2.4.3 Except insofar as Consultant is required under Section 2.3.5 to
make himself available at his own expense, Consultant will be reimbursed by
Company for certain verified expenses, but only to the extent such expenses are
required in and in furtherance of the performance of his duties hereunder, as
evidenced by an express written authorization from an officer of Company in
advance of the incurring of the expense.

         2.4.4 In the event of Consultant's death during the term of his
engagement under this Agreement, Consultant's legal representatives shall be
entitled to receive the remaining monthly

                                       2
<PAGE>

payments which otherwise would have been due Consultant under Section 2.4.1 at
the times such payments would have been due.

                           SECTION 3. NON-COMPETITION

         3.1 Covenant Not to Compete.

         3.1.1 Consultant hereby agrees that during the term of his engagement
under this Agreement, without the prior written consent of Company, he will not,
alone or with others, directly or indirectly, whether as principal, agent,
officer, director, employee, salesman, or consultant, enter into, participate
in, engage in or own any interest in the business of any person, firm,
corporation, or other organization which is engaged in or proposes to become
engaged in the property and casualty insurance business. Notwithstanding the
foregoing, this Covenant Not to Compete shall not prohibit (a) passive ownership
by Consultant of common stock of RGH, or of not more than five percent (5%) of
the equity securities of companies listed on any United States stock exchange or
traded over the counter, or (b) engagements which do not involve, directly or
indirectly, the business of insurance.

         3.1.2 Consultant hereby agrees that during the term of his engagement
under this Agreement, he will not (directly or indirectly) recruit, solicit or
induce, or attempt to recruit, solicit or induce, any employee or employees of
Company or its parent companies, subsidiaries, or affiliates to terminate their
employment, or otherwise cease or modify their relationship, with Company or its
parent companies, subsidiaries, or affiliates.

         3.1.3 Consultant hereby agrees that during the term of his engagement
under this Agreement, he will not (directly or indirectly) knowingly solicit,
divert or take away, or attempt to solicit, divert or take away, or accept,
regardless of whether solicited, the property and casualty insurance business or
patronage of any of the clients, customers or accounts of Company or its parent
companies, subsidiaries, or affiliates or prospective clients, customers or
accounts that were contacted or solicited while Consultant was employed by
Company.

         3.2 Proprietary Information. Consultant agrees that all information and
know-how, whether or not in writing, of a private, secret or confidential nature
concerning the business or financial affairs of Company or its parent companies,
subsidiaries, or affiliates (collectively, "Proprietary Information") is and
shall be the exclusive property of Company or its parent companies,
subsidiaries, or affiliates so long as it is not in the public domain.
Consultant will not disclose any Proprietary Information to others outside
Company or its parent companies, subsidiaries, or affiliates or use the same for
any purpose without the prior written consent of Company or unless compelled to
do so by law.

         3.3 Non-Disparagement. Consultant agrees not to disparage or impugn
Company or any of its past, present or future employees, officers and directors
to or in the presence of any third party, or otherwise to refer to Company or
any of its past, present and future employees, officers and directors in
derogatory terms or in a manner intended to or tending to subject any of them to
ridicule or contempt, to or in the presence of any third party.

                                       3
<PAGE>

         3.4 Communications With Media. Consultant agrees not to be interviewed
by, answer questions of, or otherwise communicate in any way with any reporter,
journalist, broadcaster, editor, or other representative of any broadcast,
print, or other medium regarding Company or any of its past, present and future
employees, officers and directors. Consultant further agrees that he will not
cause or permit anyone else to do so on his behalf. Consultant shall direct all
such press and media inquiries to the Chief of Corporate Operations of Reliance
Group Holdings, Inc.

         3.5  Breach of Any Provisions.

         3.5.1 Consultant and Company agree that the covenants set forth in
Section 3.1 are a material part of this Agreement and are reasonable as to time,
territory, and scope of prohibited activity. Consultant and Company acknowledge
that a breach of any of the provisions of Section 3.1 cannot, due to (among
other things) Consultant's unique skills, knowledge, reputation and ability,
reasonably or adequately be redressed in damages or in an action at law and may
cause Company or its successor or assign irreparable injury and damage.
Therefore, Consultant and Company agree that Company is entitled, in addition to
any other remedies it may have under this Agreement or otherwise, to preliminary
and permanent injunctive and other equitable relief to prevent or curtail any
breach of Section 3.1 of this Agreement, provided, however, that no
specification in this Agreement of a specific legal or equitable remedy shall be
construed as a waiver of or prohibition against the pursuing of other legal or
equitable remedies in the event of such a breach.

         3.5.2 Company and Consultant agree that, in the event of a breach by
Consultant of any of the provisions of this Section 3 (regardless of whether
such breach is material or not), Company shall be entitled, at its sole option,
to terminate this Agreement, in addition to any other remedies it may have under
this Agreement or otherwise.

         3.5.3 In the event that Company shall fail to make any payment under
Section 2.4.1 of this Agreement within thirty (30) days of the due date thereof,
then, upon written notice of default to Company, and upon Company's failure to
cure said default within twenty (20) business days of its actual receipt of said
notice, Consultant shall have the option to accelerate any of the then remaining
payments under this Agreement such that they are all immediately due and
payable.

                               SECTION 4. GENERAL

         4.1 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon and enforceable by Consultant and inure to the benefit of and be
binding upon and enforceable by Company and its successors and assigns. This
Agreement and the payments hereunder may not be assigned, pledged or otherwise
hypothecated by Consultant. The rights of Company hereunder may be assigned by
Company to successors and assigns of Company. In the event of any such
assignment by Company, all obligations of Company hereunder shall be assumed by
such successors and assigns of Company.

                                       4
<PAGE>

         4.2 Entire Agreement. This Agreement is intended by the parties hereto
to constitute the entire understanding of the parties with respect to the
engagement of Consultant by Company as a consultant and his agreement not to
compete and supersedes all prior agreements and understandings, oral or written,
relating to such engagement and agreement.

         4.3 Enforceability. The parties hereto agree that, should any provision
of this Agreement be declared illegal or unenforceable by any court of competent
jurisdiction, said provision shall be modified to the least extent necessary to
be enforceable. Should any provision of Section 3 of this Agreement be declared
illegal or unenforceable by any court of competent jurisdiction, and said
provision cannot be modified to be enforceable, this Agreement shall immediately
become null and void in its entirety and Consultant shall return to Company any
and all amounts theretofore paid to him under Section 2.4.1.

         4.4 No Conflicts. Consultant represents that the execution and
performance by him of this Agreement does not and will not conflict with or
breach the terms of any other agreement by which he is bound.

         4.5 Employment Termination. Consultant agrees and affirms that any and
all employment relationships with Company have been voluntarily terminated by
Consultant no later than as of the commencement of the term of his engagement
under this Agreement, and this Agreement describes the only relationship
Consultant will have with Company following the commencement of said term.

         4.6 Modifications. This Agreement may not be amended or modified except
in a writing signed by both parties hereto.

         4.7 Waivers. The failure of any party to insist upon a strict
performance of any provision hereof shall not constitute a waiver of such
provision. All waivers must be in writing.

         4.8 Attorneys' Fees. In any suit or proceeding between the parties
arising out of or relating to this Agreement, the prevailing party shall be
entitled to recover its or his costs thereof, including reasonable attorneys'
fees.

         4.9 Governing Law. This Agreement shall be deemed to be made in and in
all respects shall be interpreted, construed and governed by and in accordance
with the laws of the State of New York without regard to applicable principles
of conflicts of law.

                                       5
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                             RELIANCE INSURANCE COMPANY

                                             By: /s/ George E. Bello
                                                 -------------------------
                                                 Title: Executive Vice President

                                             /s/ Robert M. Steinberg
                                             ----------------------------------
                                             ROBERT M. STEINBERG

                                       6

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