EXECUTION COPY

  

AMENDED AND RESTATED CREDIT AGREEMENT
 
between
 
SANDERS MORRIS HARRIS GROUP INC.
 
as Borrower
 
and
 
PROSPERITY BANK
 
as Lender
 
Dated as of
December 31, 2010
 
   

 

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TABLE OF CONTENTS

       
Page
         
ARTICLE I
 
DEFINITIONS
 
1
         
Section 1.01.
 
Defined Terms
 
1
Section 1.02.
 
Other Definitional Provisions
 
25
Section 1.03.
 
Effect of Amendment and Restatement
 
26
         
ARTICLE II
 
AMOUNT AND TERMS OF COMMITMENT
 
26
         
Section 2.01.
 
Commitment
 
26
Section 2.02.
 
Procedure for Loan Borrowing
 
27
Section 2.03.
 
Repayment of Loan
 
27
Section 2.04.
 
Optional Prepayments
 
27
Section 2.05.
 
Mandatory Prepayments and Commitment Reductions
 
27
Section 2.06.
 
Interest Rates and Payment Dates
 
28
Section 2.07.
 
Computation of Interest and Fees
 
29
Section 2.08.
 
Payments
 
29
Section 2.09.
 
Increased Costs
 
29
Section 2.10.
 
Taxes
 
30
Section 2.11.
 
Use of Proceeds
 
32
Section 2.12.
 
Evidence of Debt
 
32
Section 2.13.
 
Mitigation Obligations
 
33
         
ARTICLE III
 
CONDITIONS PRECEDENT
 
33
         
Section 3.01.
 
Conditions to Effectiveness
 
33
         
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
38
         
Section 4.01.
 
Financial Condition
 
38
Section 4.02.
 
No Change
 
38
Section 4.03.
 
Corporate Existence; Compliance with Law
 
39
Section 4.04.
 
Corporate Power; Authorization; Enforceable Obligations
 
39
Section 4.05.
 
No Legal Bar
 
39
Section 4.06.
 
Litigation
 
40
Section 4.07.
 
No Default
 
40
Section 4.08.
 
Ownership of Property; Liens
 
40
Section 4.09.
 
Intellectual Property
 
40
Section 4.10.
 
Taxes
 
40
Section 4.11.
 
Labor Matters
 
40
Section 4.12.
 
ERISA
 
41
Section 4.13.
 
Investment Company Act; Investment Advisers Act; Other Regulations
 
41
Section 4.14.
 
Federal Reserve Regulations
 
41
Section 4.15.
 
Subsidiaries
 
42
Section 4.16.
 
Environmental Matters
 
42
Section 4.17.
 
Accuracy of Information, Etc
 
43

 
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TABLE OF CONTENTS
(continued)

       
Page
         
Section 4.18.
 
Security Documents
 
43
Section 4.19.
 
Solvency
 
43
Section 4.20.
 
Certain Documents
 
43
Section 4.21.
 
Material Contracts
 
43
Section 4.22.
 
Insurance
 
44
Section 4.23.
 
Foreign Assets Control Regulations, Etc
 
44
Section 4.24.
 
Net Capital
 
44
Section 4.25.
 
Group Member Accounts
 
44
         
ARTICLE V
 
AFFIRMATIVE COVENANTS
 
45
         
Section 5.01.
 
Financial Statements
 
45
Section 5.02.
 
Certificates; Other Information
 
45
Section 5.03.
 
Payment of Obligations
 
48
Section 5.04.
 
Maintenance of Existence; Compliance
 
48
Section 5.05.
 
Maintenance of Property; Insurance
 
48
Section 5.06.
 
Inspection of Property; Books and Records; Discussions
 
49
Section 5.07.
 
Notices
 
49
Section 5.08.
 
Environmental Laws
 
50
Section 5.09.
 
Additional Collateral
 
50
Section 5.10.
 
Further Assurances
 
52
Section 5.11.
 
Compliance with Leases
 
52
Section 5.12.
 
Material Contracts
 
52
Section 5.13.
 
Valuation and Appraisals
 
52
Section 5.14.
 
Board Visitation
 
53
Section 5.15.
 
Operating Accounts and Other Business
 
53
Section 5.16.
 
Net Capital
 
53
Section 5.17.
 
Concept Capital Division Disposition and Indemnification
 
53
         
ARTICLE VI
 
NEGATIVE COVENANTS
 
54
         
Section 6.01.
 
Financial Covenants
 
54
Section 6.02.
 
Indebtedness
 
54
Section 6.03.
 
Liens
 
55
Section 6.04.
 
Fundamental Changes
 
56
Section 6.05.
 
Disposition of Property
 
57
Section 6.06.
 
Restricted Payments
 
57
Section 6.07.
 
Capital Expenditures
 
58
Section 6.08.
 
Investments
 
58
Section 6.09.
 
Transactions with Affiliates
 
59
Section 6.10.
 
Sales and Leasebacks
 
59
Section 6.11.
 
Changes in Fiscal Periods
 
59
Section 6.12.
 
Negative Pledge Clauses
 
59
Section 6.13.
 
Clauses Restricting Subsidiary Distributions
 
60

 
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TABLE OF CONTENTS
(continued)

       
Page
         
Section 6.14.
 
Lines of Business
 
60
Section 6.15.
 
Amendments to Acquisition Documents
 
60
Section 6.16.
 
Amendments to Organizational Documents
 
60
Section 6.17.
 
Material Contracts
 
60
Section 6.18.
 
Terrorism Sanctions Regulations
 
61
Section 6.19.
 
Management and Director Compensation
 
61
Section 6.20.
 
Swap Contracts
 
61
Section 6.21.
 
Margin Stock
 
61
Section 6.22.
 
Accounts
 
61
Section 6.23.
 
SMHG - Salient Intercreditor Agreement
 
62
         
ARTICLE VII
 
EVENTS OF DEFAULT
 
62
         
Section 7.01.
 
Events of Default
 
62
         
ARTICLE VIII
 
MISCELLANEOUS
 
65
         
Section 8.01.
 
Amendments and Waivers
 
65
Section 8.02.
 
Notices; Electronic Communication
 
65
Section 8.03.
 
No Waiver; Cumulative Remedies; Enforcement
 
66
Section 8.04.
 
Survival
 
66
Section 8.05.
 
Expenses; Indemnity; Damage Waiver
 
67
Section 8.06.
 
Successors and Assigns; Participations and Assignments
 
68
Section 8.07.
 
Setoff
 
70
Section 8.08.
 
Counterparts; Integration; Effectiveness; Electronic Execution
 
70
Section 8.09.
 
Severability
 
70
Section 8.10.
 
GOVERNING LAW; JURISDICTION, ETC
 
70
Section 8.11.
 
Acknowledgments
 
71
Section 8.12.
 
Treatment of Certain Information; Confidentiality
 
72
Section 8.13.
 
Interest Rate Limitation
 
72
Section 8.14.
 
Headings
 
72
Section 8.15.
 
Time of the Essence
 
72
Section 8.16.
 
WAIVER OF JURY TRIAL
 
73
Section 8.17.
 
Electronic Execution of Assignments and Certain Other Documents
 
73
Section 8.18.
 
USA PATRIOT Act Notice
 
73
Section 8.19.
 
Press Releases and Related Matters
 
73
Section 8.20.
 
No Advisory or Fiduciary Responsibility
 
74
Section 8.21.
 
Independence of Covenants
 
74
Section 8.22.
  
ENTIRE AGREEMENT
  
74

 
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SCHEDULES:
 
1.01
 
Existing Letters of Credit
4.04
 
Consents, Authorizations, Filings and Notices
4.13
 
Investment Advisers
4.15
 
Subsidiaries
4.18
 
UCC Filing Jurisdictions
4.21
 
Material Contracts
4.22
 
Insurance
4.25
 
Existing Accounts
6.02(d)
 
Existing Indebtedness
6.03(f)
 
Existing Liens
6.06
 
Contractually Obligated Restricted Payments
6.08(a)
 
Existing Investments
 
EXHIBITS:
 
A
 
Form of Closing Certificate
B
 
Form of Mortgage
C
 
Form of Solvency Certificate
D
 
Form of Notice of Borrowing
E
  
Form of Compliance Certificate

 
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AMENDED AND RESTATED CREDIT AGREEMENT
 
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 11, 2009, and amended and
restated as of December 31, 2010, between SANDERS MORRIS HARRIS GROUP INC., a
Texas corporation (the "Borrower") and PROSPERITY BANK, as lender (the
"Lender").
 
WHEREAS, the Borrower and the Lender are parties to that certain Credit
Agreement, dated as of May 11, 2009 (as amended, the "Existing Credit
Agreement"), pursuant to which the Lender originally agreed to provide the
Borrower with an amortizing term loan in the original principal amount of
$25,000,000;
 
WHEREAS, the Borrower has requested that the Existing Credit Agreement be
amended and restated, subject to the conditions set forth herein, in order to,
among other things, increase the existing principal amount of the amortized term
loan and to make certain other amendments to the Existing Credit Agreement; and
 
WHEREAS, the Lender is willing to amend and restate the Existing Credit
Agreement, and to make and continue to make the term loan to the Borrower, upon
the terms and conditions set forth herein.
 
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Borrower and the
Lender hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
Section 1.01.     Defined Terms.  As used in this Agreement, the terms listed in
this Section 1.01 shall have the respective meanings set forth in this Section
1.01.
 
"Account Debtor" means any person obligated on an Account.
 
"Accounts" has the meaning specified in the UCC.
 
"Acquisition Documents" means the collective reference to the EFA Acquisition
Documents and the GFS Acquisition Documents.
 
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 5% or more of the Equity
Interests having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether through the
ownership of Equity Interests, by contract or otherwise.
 

 

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"Aggregate Indebtedness" means, at any time, "aggregate indebtedness" as defined
in and as computed in accordance with Rule 15c3-1.
 
"Agreement" means this Amended and Restated Credit Agreement.
 
"Allowable Assets" means, with respect to any Person, assets of such Person
which would reasonably be expected to be categorized as allowable assets under a
FOCUS Report prepared with respect to such Person as if such Person were subject
to, and under and in accordance with, applicable U.S. Federal securities laws
and regulations, including Rule 15c3-1.
 
"Anti-Terrorism Order" means Executive Order No. 13,224 of September 24, 2001,
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.
 
"Approved Fund" means any Fund that is administered or managed by (a) the
Lender, or (b) an Affiliate of the Lender, or (c) an entity or Affiliate of an
entity that administers or manages the Lender.
 
"Asset Sale" means (a) any Disposition or series of related Dispositions of any
Equity Interests in a Subsidiary of the Borrower, all or substantially all of
the assets of a Subsidiary of the Borrower, or all or substantially all of the
assets of a business unit of the Borrower or any Subsidiary of the Borrower,
excluding the Concept Capital Division Disposition or (b) any Disposition or
series of related Dispositions (excluding any such Disposition permitted by
clause (a), (b), (c) or (d) of Section 6.05) that yields gross proceeds to any
Group Member (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.
 
"Assigned Agreement Payment" means any payment made by any Person to the
Borrower and/or to SMH SPEADV under any Assigned Agreement.
 
"Assigned Agreement Payment Escrow Account" means deposit account number 4134371
established and maintained by the Lender with the Lender into which the Lender
transfers or deposits and holds Assigned Agreement Payment Escrow Amounts in
escrow until applied in accordance with this Agreement.
 
"Assigned Agreement Payment Escrow Amount" has the meaning specified in Section
2.06(d).
 
"Assigned Agreements" means the collective reference to the Redemption
Agreement, the Purchase and Sale Agreement, the Salient Note, the Servicing
Agreement, the SMH SPEADV Assignments, and all schedules, exhibits and annexes
thereto, and all side letters and agreements affecting the terms thereof or
entered into in connection therewith.
 
"Attributable Indebtedness" means, on any date, (a) in respect of any Capital
Lease Obligation of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount
of the remaining lease or similar payments under the relevant lease or other
applicable agreement or instrument that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease or other
agreement or instrument were accounted for as a Capital Lease Obligation, and
(c) all Synthetic Debt of such Person.

 
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"Available Cash" means, at any time, (a) the aggregate amount of all
unrestricted and unencumbered cash and Cash Equivalents of the Borrower and its
Subsidiaries at such time minus (b) the aggregate amount of taxes that would
then be payable if the cash or Cash Equivalents of the Foreign Subsidiaries were
paid as a dividend to the Borrower or any of its Domestic Subsidiaries as a
result of the payment of any such dividend.
 
"Board" means the Board of Governors of the Federal Reserve System of the United
States (or any successor).
 
"Borrower" has the meaning specified in the preamble hereto.
 
"Borrowing Date" means the Business Day specified by the Borrower as the date on
which the Borrower requests the Lender to make the Loan hereunder.
 
"Business" has the meaning specified in Section 4.16(b).
 
"Business Day" means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
 
"Capital Expenditures" means for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
 
"Capital Lease Obligations" means, as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
 
"Cash" or "cash" means money, currency or a credit balance in a deposit account.
 
"Cash Equivalents" means any of the following:
 
(a)           marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within one year from the date of acquisition;
 
(b)          certificates of deposit, time deposits, Eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by the Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000;
 

 
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(c)           commercial paper of an issuer rated at least A-1 by Standard &
Poor's Ratings Services ("S&P") or P-1 by Moody's Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within six months from the date
of acquisition;
 
(d)           fully collateralized repurchase obligations of the Lender or of
any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than thirty (30) days, with respect to
securities issued or fully guaranteed or insured by the United States
government;
 
(e)           securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, or by any political subdivision or taxing authority of any
such state, commonwealth or territory the securities of which state,
commonwealth, territory, political subdivision, or taxing authority (as the case
may be) are rated at least A by S&P or A by Moody's;
 
(f)           securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by the Lender or any
commercial bank satisfying the requirements of clause (b) of this definition;
 
(g)          shares of money market mutual or similar funds that invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition; or
 
(h)          shares of money market mutual funds that (i) comply with the
criteria set forth in Securities and Exchange Rule 2a-7 under the Investment
Company Act of 1940, (ii) are rated AAA by S&P or Aaa by Moody's, and (iii) have
portfolio assets of at least $5,000,000,000.
 
"Cash Management Agreement" means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.
 
"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
 
"CFTC" means the Commodity Futures Trading Commission and any successor entity.
 
"Clearing Account" means any deposit account, securities account or commodity
account established and maintained by any Loan Party with any other Person
pursuant to a Clearing Agreement.

 
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"Clearing Agreement" means any agreement, contract or other arrangement between
or among the Borrower or any other Loan Party and any broker, dealer, clearing
firm, clearing organization, or other Person governing, evidencing or relating
to the purchase, sale, brokering, trading, clearing and/or settlement of or the
provision of margin or other collateral for any securities transactions by, for,
in the name of or on behalf of any customer or other third party.
 
"Closing Date" means the date on which the conditions precedent set forth in
Section 3.01 shall have been satisfied, which date is December 31, 2010 or as
otherwise determined by the Lender.
 
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
 
"Collateral" means all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
 
"Collateral Account" has the meaning specified in the Guarantee and Security
Agreement.
 
"Commitment" means the obligation of the Lender, if any, to make the Loan to the
Borrower hereunder in the original principal amount of $24,995,238.
 
"Commitment Letter" means the letter agreement dated November 22, 2010, between
the Borrower and the Lender.
 
"Commonly Controlled Entity" means an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.
 
"Compliance Certificate" means a certificate duly executed and properly
completed by a Responsible Officer of the Borrower substantially in the form of
Exhibit E, or in such other form as may be required by the Lender.
 
"Concept Capital Division" means the division of Sanders Morris Harris Inc.
known as the Concept Capital Division based in New York, New York.
 
"Concept Capital Division Disposition" means the sale of the assets of Sanders
Morris Harris Inc. comprising the Concept Capital Division to NewCo LLC pursuant
to the terms of that certain Term Sheet dated as of January 1, 2009 by and among
the Borrower, SMH Capital Inc., Michael S. Rosen, and Jack D. Seibald and other
agreements, instruments and documents.
 
"Concept Capital Obligations" means any damages, costs, expenses, claims,
liabilities, obligations and other amounts which may be or have been paid or
incurred from time to time by the Borrower or any other Group Member directly or
indirectly from, as a result of or in connection with any Concept Capital Short
Sales Exposure or any other liability, obligation, transaction or matter, in
each case whether now existing or hereafter arising, with respect to NewCo LLC
or the Concept Capital Division from, under, with respect to or in connection
with any Clearing Agreement or other agreement, contract or arrangement,
applicable law or otherwise.

 
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"Concept Capital Short Sales Exposure" means, at any date, an aggregate amount
equal to the absolute value of the difference of (a) all amounts that NewCo LLC
has received from selling securities that NewCo LLC either does not own (or owns
but has not delivered to any other Person (which securities have been borrowed
by NewCo LLC from one or more third parties) to any Person on or prior to such
date minus (b) all amounts that NewCo LLC has paid (or would be required to pay)
on such date as a result of purchasing such securities in the open market on
such date and returning such securities to such third party lenders.
 
"Consent and Agreement" means, individually and collectively, (a) the Consent
and Agreement among the Borrower, Sanders Morris Harris Inc., the Lender,
Endowment Advisers, L.P., The Endowment Fund Management, LLC, and The Endowment
Fund, GP, L.P., dated as of May 11, 2009 and (b) the Consent and Agreement among
the Borrower, SMH Capital Inc., the Lender, Salient Partners, L.P., and Salient
Capital Management, LLC, dated as of May 11, 2009.
 
"Consolidated Client Assets" means, at any date, the aggregate fair market value
of all financial assets of all Persons that are invested in any account
maintained with, or that are under the management of or held and maintained by,
the Borrower or any of its Subsidiaries on behalf of such Persons at such date,
in any case on account of which the Borrower or any of its Subsidiaries receive
management fees or commission income in exchange for the ongoing management of
such financial assets or such accounts.
 
"Consolidated Current Assets" means, at any date, all amounts (other than cash
and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite
the caption "total current assets" (or any like caption) on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date.
 
"Consolidated Current Liabilities" means, at any date, all amounts that would,
in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
 
"Consolidated Leverage Ratio" means, as at the last day of any period, the ratio
of (a) Consolidated Total Debt on such date to (b) Consolidated Tangible Net
Worth on such date.
 
"Consolidated Liquid Assets" means, at any date, (a) all Available Cash and all
Cash Equivalents at such date, (b) all Marketable Equity Securities at such
date, (c) all fee and commission income earned but not yet received under
investment advisory and brokerage accounts managed by the Borrower and its
Subsidiaries which are due and payable to the Borrower within ninety (90) days
of such date, and (d) all amounts under the Redemption Agreement which are due
and payable to the Borrower within ninety (90) days of such date, in each case
that would, in conformity with GAAP, be included as an asset on a consolidated
balance sheet of the Borrower and its Subsidiaries at such date; provided,
however, that on any date of determination, Consolidated Liquid Assets as
determined hereunder on any date shall not include any Available Cash, Cash
Equivalents or Marketable Securities of Sanders Morris Harris Inc. or of Global
Financial Services the combined aggregate amount or fair market value (as
applicable) of which with respect to both such Persons exceeds $10,000,000 on
such date.

 
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"Consolidated Net Income" means, for any period, the consolidated net income (or
loss) of the Borrower and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or loss) of any Person (other than a Subsidiary of
the Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of cash dividends or similar cash
distributions, (c) the undistributed earnings of any Subsidiary of the Borrower
(other than a Subsidiary Guarantor) to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary, (d)
unrealized appreciation or depreciation in the value of any Investment owned by
the Borrower or its Subsidiaries, and (e) any charge to or write-down of
goodwill recorded by the Borrower in accordance with Statement of Financial
Accounting Standards No. 142 as in effect on the date hereof (i) for the fiscal
Quarter ended as at December 31, 2008, (ii) for the fiscal Quarter ended as at
March 31, 2009 or (iii) for the fiscal Quarter ended as at June 30, 2009 solely
as a result of an impairment of goodwill arising directly as a result of the EFA
Acquisition.
 
"Consolidated Short Sales Amount" means, at any date, an aggregate amount equal
to all amounts that the Borrower or any Group Member has received from selling
securities that such Person does not own (or owns but does not deliver to any
other Person (which securities have been borrowed by the Borrower or such other
Group Member from one or more third parties)) to any other Person on or prior to
such date which securities have neither been purchased or repurchased in the
open market prior to such date nor returned to such third party lender on or
prior to such date.
 
"Consolidated Short Sales Exposure" means, at any date, an aggregate amount
equal to the absolute value of the difference of (a) all amounts that the
Borrower or any such Subsidiary has received from selling securities that the
Borrower or any such Subsidiary does not own (or owns but has not delivered to
any other Person (which securities have been borrowed by the Borrower or any
such other Group Member from one or more third parties) to any other Person on
or prior to such date, minus (b) all amounts that the Borrower or any such other
Group Member has paid (or would be required to pay) on such date as a result of
purchasing such securities in the open market on such date and returning such
securities to such third party lenders; provided, however, that if such
difference (prior to taking the absolute value thereof) on any date is a
positive number, then the absolute value of such difference shall be deemed to
be zero on such date.
 
"Consolidated Tangible Net Worth" means, at any date, (a) all amounts that
would, in conformity with GAAP, be included on a consolidated balance sheet of
the Borrower and its Subsidiaries under stockholders' equity at such date, minus
(b) the net amount of all goodwill and all other intangible assets of the
Borrower and its Subsidiaries, determined on a consolidated basis in conformity
with GAAP at such date.

 
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"Consolidated Total Debt" means, at any date, the aggregate principal amount of
all Indebtedness for Borrowed Money of the Borrower and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
 
"Continuing Directors" means the directors of the Borrower on the Closing Date,
after giving effect to the GFS Acquisition and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least 66-2/3% of the then Continuing Directors.
 
"Contractual Obligation" means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
 
"Control Agreement" has the meaning specified in the Guarantee and Security
Agreement.
 
"Cumulative Consolidated Net Income" means, on any date, the sum of Consolidated
Net Income for the Fiscal Quarter commencing on January 1, 2008 and for each
Fiscal Quarter thereafter up to and including the Fiscal Quarter most recently
ended on such date.
 
"Cumulative Dividend Amount" means, on any date, the sum of all cash dividends
made by the Borrower on its issued and outstanding shares of common stock from
the Closing Date and through and including such date.
 
"Customer Security" has the meaning specified in Rule 15c3-3.
 
"Default" means any of the events specified in Section 7.01, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
 
"Default Rate" means a rate per annum equal to the Highest Lawful Rate.
 
"Disposition" means with respect to any property, any sale, lease, license, sale
and leaseback, assignment, conveyance, transfer or other disposition
thereof.  The terms "Dispose" and "Disposed of" shall have correlative meanings.
 
"Dollars" and "$" means dollars in lawful currency of the United States.
 
"Domestic Subsidiary" means any Subsidiary of the Borrower organized under the
laws of any jurisdiction within the United States.
 
"EFA Acquisition" means the collective reference to the purchase (a) from
Fredric M. Edelman, an individual, of 58% of the limited liability company
membership interests of Edelman Financial Advisors, LLC and (b) from Edward
Moore, an individual, 8% of the limited liability company membership interests
in Edelman Financial Advisors, LLC pursuant to the EFA Acquisition Documents.

 
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"EFA Acquisition Agreement" means the letter agreement dated as of January 1,
2009, among Fredric M. Edelman, an individual, Edward Moore, an individual, and
the Borrower, which sets forth agreements among the parties thereto regarding
transactions contemplated by the Reorganization and Purchase Agreement.
 
"EFA Acquisition Documents" means the collective reference to the EFA
Acquisition Agreement, the Reorganization and Purchase Agreement and all
schedules, exhibits and annexes thereto and all other agreements, instruments
and documents governing, evidencing or affecting the terms thereof or entered
into in connection therewith.
 
"Eligible Assignee" means (a) an Affiliate of the Lender, (b) an Approved Fund
and (c) any other Person (other than a natural person) approved by the Borrower
(such approval not to be unreasonably withheld or delayed); provided that no
such approval shall be required if a Default or an Event of Default has occurred
and is continuing.
 
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
 
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrant, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
"Event of Default" means any of the events specified in Section 7.01, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
 
"Excess Payment" means, for any Fiscal Quarter, the aggregate amount of cash,
securities or other property received by the Borrower under or in respect of the
Redemption Agreement which is in excess of $3,000,000 during such Fiscal
Quarter.
 
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
 
"Excluded Foreign Subsidiary" means any Foreign Subsidiary in respect of which
either (a) the pledge of all of the Equity Interests of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.

 
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"Excluded Taxes" means, with respect to the Lender, the Lender (a) taxes imposed
on or measured by its overall net income (however denominated), and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United
States or any similar tax imposed by any other jurisdiction in which the
Borrower is located, and (c) any backup withholding tax that is required by the
Code to be withheld from amounts payable to the Lender because the Lender has
failed to comply with clause (A) of Section 2.10(e)(i).
 
"Existing Accounts" has the meaning specified in Section 4.25.
 
"Extraordinary Receipts" means any and all cash received by or paid to or for
the account of any Group Member not in the ordinary course of business (and not
consisting of proceeds from an Asset Sale or Recovery Event), including, without
limitation, (a) foreign, United States, state or local tax refunds, (b) pension
plan reversions, (c) proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings) or casualty claims, (d) judgments, proceeds of settlements or
other consideration of any kind in connection with any claim or cause of action,
(e) indemnity payments, and (f) any purchase price adjustments.
 
"FINRA" means Financial Institution Regulatory Authority, Inc., and any
successor entity.
 
"Fiscal Quarter" means any of the four quarters of any Fiscal Year.
 
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries ending
on December 31 in any calendar year.
 
"FOCUS Report" means, for any Person, the Financial and Operational Combined
Uniform Single Report required to be filed by such Person on a monthly or
quarterly basis, as the case may be, with the SEC or the NYSE, or any report
that is required in lieu of such report.
 
"Foreign Subsidiary" means any Subsidiary of the Borrower that is not a Domestic
Subsidiary.
 
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
 
"Funding Office" means the office of the Lender specified in Section 8.02 or
such other office as may be specified from time to time by the Lender as its
funding office by written notice to the Borrower.

 
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"GAAP" means generally accepted accounting principles in the United States as in
effect from time to time, except that for purposes of Section 6.01, GAAP shall
be determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 5.01(b).  In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Lender agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been
made.  Until such time as such an amendment shall have been executed and
delivered by the Borrower and the Lender, all financial covenants, standards and
terms in this Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred.  "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.
 
"GFS Acquisition" has the meaning specified in Section 3.01(b)(i).
 
"GFS Acquisition Agreement" means the Purchase Agreement dated as of November
26, 2010, by and between Robert C.A. Benjamin, Gerardo A. Chapa, Ricardo
Perusquia, each an individual, and the Borrower, which sets forth agreements
between the parties thereto regarding the purchase by Borrower of equity
interests in each of Global Financial Services and GFS Advisors.
 
"GFS Acquisition Documents" means the collective reference to the GFS
Acquisition Agreement and all schedules, exhibits and annexes thereto and all
other agreements, instruments and documents governing, evidencing or affecting
the terms thereof or entered into in connection therewith
 
"GFS Advisors" means GFS Advisors, LLC, a Texas limited liability company.
 
"GFS Uncertificated Security Control Agreements" means the collective reference
to the Uncertificated Security Control Agreement among Borrower, Lender, and
Global Financial Services and the Uncertificated Security Control Agreement
between Borrower, Lender and GFS Advisors, in each case entered into pursuant to
Section 5.01 of the Guarantee and Security Agreement.
 
"Global Financial Services" means Global Financial Services, LLC, a Texas
limited liability company.
 
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any Self-Regulatory
Organization.
 
"Group Members" means the collective reference to the Borrower and its
Subsidiaries.

 
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"Guarantee and Security Agreement" means the Guarantee and Security Agreement
made by the Borrower and each Guarantor in favor of Lender.
 
"Guarantee Obligation" means, as to any Person (the "Guaranteeing Person"), any
obligation of (a) the Guaranteeing Person or (b) another Person (including any
bank under any letter of credit) to induce the creation of which the
Guaranteeing Person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "Primary Obligations")
of any other third Person (the "Primary Obligor") in any manner, whether
directly or indirectly, including any obligation of the Guaranteeing Person,
whether or not contingent, (i) to purchase any such Primary Obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such Primary Obligation or
(2) to maintain working capital or equity capital of the Primary Obligor or
otherwise to maintain the net worth or solvency of the Primary Obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such Primary Obligation of the ability of the Primary Obligor
to make payment of such Primary Obligation or (iv) otherwise to assure or hold
harmless the owner of any such Primary Obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee Obligation of any Guaranteeing Person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the Primary Obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such Guaranteeing Person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such Primary Obligation and the maximum amount for which such
Guaranteeing Person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such Guaranteeing Person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
 
"Guarantors" means the collective reference to each Material Subsidiary of the
Borrower (other than Sanders Morris Harris, Inc. and Global Financial Services).
 
"Hazardous Materials" means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.
 
"Highest Lawful Rate" means the maximum nonusurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged
or received on the Obligations under laws applicable to the Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.  On each day, if any, that Texas
law establishes the Highest Lawful Rate, the Highest Lawful Rate shall be the
"weekly ceiling" (as defined in Section 303 of the Texas Finance Code) for that
day.

 
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"Indebtedness" means, with respect to any Person, without duplication:
 
(a)           all indebtedness of such Person for borrowed money;
 
(b)          all obligations of such Person for the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of such Person's business that are not past due by more than sixty (60) days
after the respective dates on which such trade payables were created);
 
(c)          all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments;
 
(d)          all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property);
 
(e)          all Attributable Indebtedness in respect of Capital Lease
Obligations (but not operating leases) and Synthetic Lease Obligations of such
Person and all Synthetic Debt of such Person;
 
(f)           the maximum amount of all obligations of such Person, contingent
or otherwise, with respect to bankers' acceptances, letters of credit (except to
the extent such letters of credit are secured by cash collateral), letters of
guaranty, surety bonds, performance bonds and similar obligations;
 
(g)          all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interests in such Person
or any other Person, valued, in the case of redeemable Preferred Interests, at
the greater of its voluntary or involuntary liquidation preference plus all
accrued and unpaid dividends;
 
(h)          all Guarantee Obligations of such Person in respect of obligations
of the kind referred to in clauses (a) through (g) above;
 
(i)           all obligations of the kind referred to in clauses (a) through (h)
above secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation; and
 
(j)           all obligations of such Person in respect of Swap Contracts,
valued at the Swap Termination Value thereof.
 
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.

 
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"Indebtedness for Borrowed Money" means, with respect to any Person, without
duplication, all Indebtedness of such Person, except for obligations
constituting Indebtedness under clauses (b), (d) or (g) of the definition of
Indebtedness in this Agreement.
 
"Indemnified Taxes" means Taxes other than Excluded Taxes.
 
"Indemnitee" has the meaning specified in Section 8.05(b).
 
"Insolvency" means, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
 
"Insolvent" means pertaining to a condition of Insolvency.
 
"Intellectual Property" means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
 
"Intercompany Subordination Agreement" means the Intercompany Subordination
Agreement, dated as of December 31, 2010, among the Loan Parties, Global
Financial Services, Sanders Morris Harris Inc., the Lender and each other Group
Member which is from time to time a party thereto.
 
"Investment" means, with respect to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of any Equity Interest of another Person, (b) the purchase
or other acquisition (in one transaction or a series of transactions) of assets
of another Person that constitute a business unit or all or a substantial part
of the business of such Person, (c) any loan, advance, extension of credit or
capital contribution to, assumption of debt of, or purchase or other acquisition
of any other debt or interest in, another Person, (d) any Guarantee Obligation
incurred by that Person in respect of Indebtedness of any other Person, and (e)
any other investment by that Person in any other Person.  For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment.
 
"L/C Collateral Account" means a deposit account established and maintained by
the Borrower at JPMorgan Chase Bank, N.A. containing cash collateral permitted
under Section 6.03(i)(i).
 
"Lender" has the meaning specified in the preamble hereto.
 
"Lending Office" means the office or offices of the Lender as the Lender may
from time to time notify the Borrower.

 
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"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any capital lease having substantially the same
economic effect as any of the foregoing, and any easement, right of way or other
encumbrance on title to real property).
 
"Loan" means the term loan made by the Lender to the Borrower pursuant to this
Agreement in the original principal amount of $24,995,238.
 
"Loan Documents" means this Agreement, the Term Note, each Secured Cash
Management Agreement, each Consent and Agreement, the Commitment Letter, the
Security Documents and the Intercompany Subordination Agreement.
 
"Loan Parties" means each Group Member that is or hereafter becomes a party to a
Loan Document.
 
"Margin Stock" has the meaning assigned to that term under Regulation U.
 
"Marketable Debt Securities" means, at any time, any debt securities for which
an active trading market exists, and price quotations are available from dealers
of such securities and third-party pricing sources acceptable to the Lender at
such time.
 
"Marketable Equity Securities" means, at any time, any equity securities listed
on a national securities exchange located in the United States or quoted on the
Nasdaq Stock Market, Inc. quotation system for which valuations are available on
such exchange or from such quotation system at such time.
 
"Material Adverse Change" means any material adverse change in the business,
property, assets, liabilities, operations, condition (financial or otherwise) or
prospects of the Loan Parties and their respective Subsidiaries taken as a
whole.
 
"Material Adverse Effect" means a material adverse effect on (a) the GFS
Acquisition, (b) the business, property, assets, liabilities, operations,
condition (financial or otherwise) or prospects of the Loan Parties and their
respective Subsidiaries taken as a whole, (c) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or remedies of
the Lender under any Loan Document, (d) the validity, perfection or priority of
any Lien granted pursuant to the Security Documents, (e) the timing or amount of
any payment made (or to be made) by any Person to any Loan Party under any
Assigned Agreement, (f) the value of the Collateral taken as a whole, or (g) the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is or is to be a party.
 
"Material Contract" means any agreement or contract of any Group Member which
(a) involves consideration to any Group Member of $500,000 or more in any year,
(b) involves consideration by any Group Member of $500,000 or more in any year,
(c) imposes financial obligations on any Group Member of $500,000 or more in any
year, (d) is an Acquisition Document, an Assigned Agreement, a Swap Contract, or
a Clearing Agreement or (e) is otherwise material (or together with related
agreements and contracts, is material) to the business, operations, financial
condition, performance or properties of the Group Members, taken as a whole.

 
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"Material Subsidiary" means, on any date, (a) each Wholly Owned Subsidiary of
the Borrower and each other Subsidiary of the Borrower which accounts for at
least 10% of the Consolidated Tangible Net Worth of the Borrower and its
Subsidiaries on such date and (b) SMH SPEADV.
 
"Maturity Date" means December 31, 2014; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.
 
"Minority Owner" means, with respect to any Subsidiary of the Borrower, any
Person (other than a Group Member) who or which directly owns on the Closing
Date any Equity Interests in such Subsidiary.
 
"Mortgages" means the collective reference to the fee mortgages, deeds of trust
and similar documents made by any Loan Party in favor of, or for the benefit of,
the Lender substantially in the form of Exhibit B (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such mortgage or
deed of trust is to be recorded).
 
"MSRB" means the Municipal Securities Rulemaking Board and any successor entity.
 
"Multiemployer Plan" means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
"Net Capital" means, with respect to any Person, "net capital" of such Person
calculated in accordance with Rule 15c3-1.
 
"Net Cash Proceeds" means:
 
(a)           in connection with any Asset Sale, any Recovery Event or any
Extraordinary Receipt received or paid to the account of any Group Member, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) received in connection with such transaction, net of
attorneys' fees, accountants' fees, investment banking fees, amounts required to
be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset that is the subject of any such Asset Sale or
Recovery Event (other than any Lien pursuant to a Security Document) and other
customary fees and expenses actually incurred in connection therewith and net of
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements); and
 
(b)          in connection with any issuance or sale of Equity Interests or any
incurrence of Indebtedness, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
 
"NewCo LLC" means Concept Capital Advisors, LLC.
 
"Non-Allowable Assets" means, with respect to any Person, any assets of such
Person which are not Allowable Assets of such Person.

 
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"Notice of Borrowing" means a Notice of Borrowing, substantially in the form of
Exhibit D, duly executed by a Responsible Officer of the Borrower.
 
"Obligations" means the unpaid principal of and interest on (including interest
accruing after the maturity of the Loan and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loan and all other obligations, indebtedness liabilities of the Loan Parties
to the Lender and each of them, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, or any other document, instrument or agreement made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, guarantee obligations, fees, indemnities,
costs, expenses (including all fees, charges and disbursements of counsel to the
Lender that are required to be paid by the Loan Parties pursuant to any Loan
Document) or otherwise.
 
"Organizational Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
 
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
 
"Participant" has the meaning specified in Section 8.06(c).
 
"Payment Date" means the fifteenth calendar day of April, July, October and
January to occur while the Loan is outstanding and the Maturity Date.
 
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
 
"Permitted Letters of Credit" means each letter of credit described on Schedule
1.01.
 
"Permitted GFS - Loan Party Dispositions" means any Dispositions of
(i) securities in the ordinary course of business by any Loan Party to Global
Financial Services or GFS Advisors in exchange for cash or Cash Equivalents or
other Allowable Assets upon fair and reasonable commercial terms no less
favorable to the relevant Loan Party than it would obtain in a comparable arm's
length transaction with an unaffiliated Person, (ii) securities in the ordinary
course of business by Global Financial Services or GFS Advisors to any Loan
Party in exchange for cash or Cash Equivalents or other Allowable Assets upon
fair and reasonable commercial terms no less favorable to the relevant Loan
Party than it would obtain in a comparable arm's length transaction with an
unaffiliated Person or (iii) Non-Allowable Assets by Global Financial Services
or GFS Advisors to any Loan Party in exchange for Dispositions of Cash, Cash
Equivalents or other Allowable Assets by any Loan Party to Global Financial
Services or GFS Advisors (as applicable) after the Closing Date which are
consented to in writing by the Lender.

 
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"Permitted GFS - Loan Party Guarantee Obligations" means any Guarantee
Obligations of any Loan Party (other than Global Financial Services and GFS
Advisors) in favor of or for the benefit of any Person with respect to any
Indebtedness of Global Financial Services or GFS Advisors in an aggregate amount
not to exceed $250,000 at any time outstanding (other than Guarantee Obligations
of the Borrower with respect to any leasehold payment obligations of Global
Financial Services or GFS Advisors).
 
"Permitted GFS - Loan Party Indebtedness" means any Indebtedness of any Loan
Party to Global Financial Services or GFS Advisors in an aggregate amount not to
exceed $250,000 at any time outstanding, the repayment of which is, during the
continuance of a Default or an Event of Default, subordinated to the payment and
performance of the Obligations pursuant to the Intercompany Subordination
Agreement.
 
"Permitted GFS - Loan Party Investments" means any new Investments made by any
Loan Party in or to Global Financial Services or GFS Advisors after the Closing
Date which are consented to in writing by the Lender.
 
"Permitted SMHI - Loan Party Dispositions" means any Dispositions of
(i) securities in the ordinary course of business by any Loan Party to Sanders
Morris Harris Inc. in exchange for cash or Cash Equivalents or other Allowable
Assets upon fair and reasonable commercial terms no less favorable to the
relevant Loan Party than it would obtain in a comparable arm's length
transaction with an unaffiliated Person, (ii) securities in the ordinary course
of business by Sanders Morris Harris Inc. to any Loan Party in exchange for cash
or Cash Equivalents or other Allowable Assets upon fair and reasonable
commercial terms no less favorable to the relevant Loan Party than it would
obtain in a comparable arm's length transaction with an unaffiliated Person or
(iii) Non-Allowable Assets by Sanders Morris Harris Inc. to any Loan Party in
exchange for Dispositions of Cash, Cash Equivalents or other Allowable Assets by
any Loan Party to Sanders Morris Harris Inc. after the Closing Date which are
consented to in writing by the Lender.
 
"Permitted SMHI - Loan Party Guarantee Obligations" means any Guarantee
Obligations of any Loan Party (other than Sanders Morris Harris Inc.) in favor
of or for the benefit of any Person with respect to any Indebtedness of Sanders
Morris Harris Inc. in an aggregate amount not to exceed $1,500,000 at any time
outstanding (other than Guarantee Obligations of the Borrower with respect to
any leasehold payment obligations of Sanders Morris Harris Inc.).
 
"Permitted SMHI - Loan Party Indebtedness" means any Indebtedness of any Group
Member to Sanders Morris Harris Inc. in an aggregate amount not to exceed
$5,100,000 at any time outstanding, the repayment of which is, during the
continuance of a Default or an Event of Default, subordinated to the payment and
performance of the Obligations pursuant to the Intercompany Subordination
Agreement.

 
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"Permitted SMHI - Loan Party Investments" means any new Investments made by any
Loan Party in or to Sanders Morris Harris Inc. after the Closing Date which are
consented to in writing by the Lender.

 
"Person" means a natural person, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
 
"Plan" means at a particular time, any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
 
"Pledged Equity Interests" has the meaning specified in the Guarantee and
Security Agreement.
 
"Pledged Notes" has the meaning specified in the Guarantee and Security
Agreement.
 
"Preferred Interests" means, with respect to any Person, Equity Interests issued
by such Person that are entitled to a preference or priority over any other
Equity Interests issued by such Person upon any distribution of such Person's
property and assets, whether by dividend or upon liquidation.
 
"Prime Rate" means, for any date, the greater of (a) the prime rate published by
The Wall Street Journal on such date, or (b) 5.00%.  If at any time The Wall
Street Journal does not publish such prime rate, the Lender in its sole
discretion shall determine such prime rate using another source of information.
 
"Pro Forma Balance Sheet" has the meaning specified in Section 4.01(a).
 
"Projections" has the meaning specified in Section 5.02(c).
 
"Properties" has the meaning specified in Section 4.16(a).
 
"Purchase and Sale Agreement" means that certain Purchase and Sale Agreement
dated as of August 29, 2008 by and among Sanders Morris Harris Group Inc.,
Salient Partners, L.P. and Salient Capital Management, LLC and their respective
partners and members.
 
"Recovery Event" means any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any asset
of any Group Member.
 
"Redemption Agreement" means that certain Agreement to Retire Partnership
Interest and Second Amendment to the Limited Partnership Agreement of Endowment
Advisors, L.P., dated as of August 29, 2008, among the Borrower, Endowment
Advisors, L.P., The Endowment Fund, GP, L.P., and The Endowment Fund Management,
LLC and their respective partners and members.

 
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"Regulation T" has the meaning specified in Regulation T of the Board as in
effect from time to time.

 
"Regulation U" has the meaning specified in Regulation U of the Board as in
effect from time to time.
 
"Regulation X" has the meaning specified in Regulation X of the Board as in
effect from time to time.
 
"Reinvestment Deferred Amount" means, with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by any Group Member in connection
therewith that are not applied to prepay the Loan or reduce the Revolving
Commitments pursuant to Section 2.05(b) as a result of the delivery of a
Reinvestment Notice.
 
"Reinvestment Event" means any Asset Sale, Recovery Event or Extraordinary
Receipt in respect of which the Borrower has delivered a Reinvestment Notice.
 
"Reinvestment Notice" means a written notice executed by a Responsible Officer
stating that no Default or Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset
Sale, Recovery Event or Extraordinary Receipt to acquire or repair fixed or
capital assets useful in its business.
 
"Reinvestment Prepayment Amount" means, with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended prior
to the relevant Reinvestment Prepayment Date to acquire assets useful in the
Borrower's business.
 
"Reinvestment Prepayment Date" means, with respect to any Reinvestment Event,
the earlier of (a) the date occurring six (6) months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire assets useful in the Borrower's business
with all or any portion of the relevant Reinvestment Deferred Amount.
 
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person's Affiliates.
 
"Reorganization" means, with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
 
"Reorganization and Purchase Agreement" means that certain Reorganization and
Purchase Agreement, dated as of May 10, 2005, among the Borrower, the Edelman
Financial Center, Inc., The Edelman Financial Center, LLC and Fredric M.
Edelman, an individual.

 
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"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. §
4043.
 
"Requirement of Law" means, as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
 
"Responsible Officer" means the chief executive officer, president or chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party
and any other officer or employee of the applicable Loan Party so designated by
any of the foregoing officers in a notice to the Lender, but, in any event with
respect to financial matters, the chief financial officer of the applicable Loan
Party.  Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
 
"Restricted Payment" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to any Person's
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.
 
"Rule 8c1" means Rule 8c1 of the General Rules and Regulations as promulgated by
the SEC under the Exchange Act, as such rule may be amended from time to time,
or any rule or regulation of the SEC which replaces Rule 8c1.
 
"Rule 15c2-1" means Rule 15c2-1 of the General Rules and Regulations as
promulgated by the SEC under the Exchange Act, as such rule may be amended from
time to time, or any rule or regulation of the SEC which replaces Rule 15c2-1.
 
"Rule 15c3-1" means Rule 15c3-1 of the General Rules and Regulations as
promulgated by the SEC under the Exchange Act, as such rule may be amended from
time to time, or any rule or regulation of the SEC which replaces Rule 15c3-1.
 
"Rule 15c3-3" means Rule 15c3-3 of the General Rules and Regulations as
promulgated by the SEC under the Exchange Act, as such rule may be amended from
time to time, or any rule or regulation of the SEC which replaces Rule 15c3-3.
 
"Salient Note" means that certain Unsecured Subordinated Promissory Note, dated
as of August 29, 2008, in the original principal amount of $9,349,340 made by
Salient Partners, L.P. and payable to the order of the Borrower.

 
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"Sanders Morris Harris Inc." means Sanders Morris Harris Inc., a Texas
corporation, f/k/a SMH Capital Inc.
 
"SEC" means the Securities and Exchange Commission, any successor thereto and
any analogous Governmental Authority.
 
"Secured Cash Management Agreement" means any Cash Management Agreement that is
entered into by and between any Loan Party and the Lender.
 
"Security Documents" means the collective reference to the Guarantee and
Security Agreement, each Consent and Agreement, and all other security and
collateral agreements and documents hereafter delivered to the Lender that
create or purport to create, perfect or provide for the priority of a Lien in
favor of the Lender.
 
"Servicing Agreement" means the Servicing Agreement, dated effective as of
September 5, 2006, between Endowment Advisers, L.P. and the Borrower.
 
"Single Employer Plan" means any Plan that is subject to Title IV of ERISA, but
that is not a Multiemployer Plan.
 
"SMHG Operating Account" has the meaning specified in Section 3.01(q).
 
"SMHG - Salient Intercreditor Agreement" means the Intercreditor Agreement dated
as of April 29, 2010 among Salient Partners, L.P., the Borrower, Bank of Texas,
N.A. and SMH SPEADV.
 
"SMH SPEADV" means SMH SPEADV, LLC, a Delaware limited liability company.
 
"SMH SPEADV Assignments" means the collective reference to (a) the Assignment
and Assumption Agreement dated as of May 1, 2009 between the Borrower and SMH
SPEADV, pursuant to which the Borrower transfers all of its right, title and
interest in the Redemption Agreement to SMH SPEADV and (b) the Assignment and
Assumption Agreement, dated as of May 1, 2009 between the Borrower and SMH
SPEADV, pursuant to which the Borrower transfers all of its right, title and
interest in the Salient Documents to SMH SPEADV.
 
"SMH SPEADV LLC Interests" means 100% of the limited liability company
membership interests of SMH SPEADV.
 
"Solvent" means, with respect to any Person as of any date of determination,
that on such date (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they
mature.  For purposes of this definition, (i) "debt" means liability on a
"claim," and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.

 
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"Specified FOCUS Reports" has the meaning specified in Section 4.01(b).
 
"Subsidiary" means as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency)
representing a majority of such shares of stock or such other ownership
interests or to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person; provided, however, that the
term Subsidiary shall not include any limited partnership, limited liability
company, trust, or other special purpose investment entity managed by a Group
Member solely because any of the partners, members, or other beneficial owners
is a customer of such Group Member.  Unless otherwise qualified, all references
to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a direct
or indirect Subsidiary or Subsidiaries of the Borrower.  For the avoidance of
doubt, each of Sanders Morris Harris Inc., Global Financial Services and GFS
Advisors is and shall be a Subsidiary of the Borrower in all respects and for
all purposes of this Agreement and the other Loan Documents.
 
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
 
"Swap Termination Value" means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or any Affiliate of
the Lender).

 
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"Synthetic Debt" means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
"Indebtedness" or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.
 
"Synthetic Lease" means, at any time, any lease (including leases that may be
terminated by the lessee at any time) of any property (a) that is accounted for
as an operating lease under GAAP and (b) in respect of which the lessee retains
or obtains ownership of the property so leased for income tax purposes, other
than any such lease under which such Person is the lessor.
 
"Synthetic Lease Obligations" means, with respect to any Synthetic Lease, at any
time, an amount of equal to the higher of (a) the aggregate termination value or
purchase price or similar payments in the nature of principal payable thereunder
and (b) the then aggregate outstanding principal amount of the notes or other
instruments issued by, and the amount of the equity investment, if any, in, the
lessor under such Synthetic Lease.
 
"Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
"Term Note" means the Amended and Restated Term Note dated December 31, 2010,
made by the Borrower and payable to the order of the Lender in the original
principal amount of $24,995,238.
 
"UCC" means the Uniform Commercial Code as in effect in the State of Texas;
provided that if perfection or the effect of perfection or non-perfection is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Texas, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.
 
"Uncertificated Security Control Agreement" has the meaning specified in the
Guarantee and Security Agreement.
 
"United States" and "U.S." mean the United States of America.
 
"USA PATRIOT Act" means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

 
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"Wholly Owned Subsidiary" means, as to any Person, any other Person all of the
Equity Interests of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
 
Section 1.02.    Other Definitional Provisions.
 
(a)           Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the other Loan Documents
or any certificate or other document made or delivered pursuant hereto or
thereto.
 
(b)           As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.01 and accounting terms partly defined in Section 1.01, to the extent
not defined, shall have the respective meanings given to them under GAAP.
 
(c)           The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation."  The word "will" shall be
construed to have the same meaning and effect as the word "shall."  Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, amended
and restated, supplemented or otherwise modified from time to time (subject to
any restrictions on such amendments, amendments and restatements, supplements or
modifications set forth herein), (ii) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder," and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) the word "incur" shall be construed to mean incur,
create, issue, assume, become liable in respect of or suffer to exist (and the
words "incurred" and "incurrence" shall have correlative meanings), (v) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (vi) any reference to any law or regulation herein shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time and (vii) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Equity Interests,
securities, accounts and contract rights.
 
(d)           No inference in favor of, or against, any party to this Agreement
shall be drawn from the fact that such party has drafted any portion of this
Agreement.
 
(e)           All obligations of the Borrower and each other Loan Party under
this Agreement and the other Loan Documents shall be performed and satisfied by
or on behalf of the Borrower or such other Loan Party, as applicable, at its
sole cost and expense.

 
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Section 1.03.    Effect of Amendment and Restatement.
 
(a)           The parties hereto hereby agree that, upon the effectiveness of
this Agreement, the terms and provisions of the Existing Credit Agreement which
in any manner govern or evidence the Obligations, the obligations of the
Borrower and the other Loan Parties, the rights and interests of the Lender, and
any terms, conditions or matters related to any of the foregoing, shall be and
hereby are amended and restated in their entirety by the terms, conditions and
provisions of this Agreement, and the terms and provisions of the Existing
Credit Agreement, except as otherwise expressly provided herein or therein,
shall be superseded by this Agreement.
 
(b)           Notwithstanding this amendment and restatement of the Existing
Credit Agreement, including anything in this Section 1.03(b) and in any other
related Loan Documents (as defined in the Existing Credit Agreement and referred
to herein, individually or collectively, as the "Existing Loan Documents"), (i)
all of the indebtedness, liabilities and obligations owing by any Person under
the Existing Credit Agreement and any other Existing Loan Documents shall
continue as Obligations hereunder, (ii) the grants of security interests and
Liens under and pursuant to the Existing Loan Documents and the Loan Documents
shall continue unaltered and each such Existing Loan Document and other Loan
Document shall, except to the extent expressly amended, restated or modified in
writing in connection with this Agreement, continue in full force and effect in
accordance with its terms and the parties hereto hereby ratify and confirm the
terms thereof as being in full force and effect and unaltered by this Agreement,
(iii) each of this Agreement and the Term Note and any other Loan Document that
is amended and restated in connection with this Agreement is given as a
substitution of, and not as a payment of, the indebtedness, liabilities and
obligations of the Borrower or any other Loan Party under the Existing Credit
Agreement or any applicable Existing Loan Document and none of the execution and
delivery of such agreements, instruments or documents nor the consummation of
any other transaction contemplated hereunder or thereunder is intended to
constitute a novation, satisfaction, repayment or reborrowing of any Obligations
under the Existing Credit Agreement or of the other Existing Loan Documents or
any other obligations thereunder, nor does it operate as a waiver of any right,
remedy or power of the Lender under this Agreement or any other Loan Document,
(iv) all references to the Existing Credit Agreement in any Loan Document or
other document or instrument executed or delivered in connection therewith shall
be deemed to refer to this Agreement and the terms and provisions hereof and (v)
all Obligations shall continue to be continuously secured by the Security
Documents.
 
(c)           It is the intent of the parties hereto that this Agreement not
constitute a novation of any indebtedness, obligations and liabilities existing
under the Existing Credit Agreement which remain outstanding or evidence
repayment of any of such indebtedness, obligations and liabilities and that this
Agreement amend and restate in its entirety the Existing Credit Agreement and
re-evidence the indebtedness, obligations and liabilities of the Borrower
outstanding thereunder.
 
ARTICLE II

 
AMOUNT AND TERMS OF COMMITMENT
 
Section 2.01.    Commitment.  Subject to the terms and conditions hereof, the
Lender agrees to make the Loan to the Borrower in an amount not to exceed the
amount of the Commitment.

 
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Section 2.02.    Procedure for Loan Borrowing.  The Borrower shall give the
Lender irrevocable notice in the form of a Notice of Borrowing (which notice
must be received by the Lender prior to 10:00 A.M., Houston, Texas time, on
December 28, 2010) requesting that the Lender make the Loan to the Borrower.
 
Section 2.03.    Repayment of Loan.  The Borrower unconditionally promises to
repay the principal amount of the Loan in seventeen (17) consecutive amortizing
equal installments, due on each Payment Date, commencing on January 15, 2011,
subject to adjustment as provided in Section 2.04 and Section 2.05 (or such
earlier date on which the Loan becomes due and payable pursuant to Section
7.01); provided, however, that the final principal repayment installment of the
Loan shall be repaid on the Maturity Date and in any event shall be in an amount
equal to the unpaid principal amount of the Loan outstanding on such date.
 
Section 2.04.    Optional Prepayments.  The Borrower may at any time and from
time to time prepay the Loan, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Lender at least one Business Day prior
thereto, which notice shall specify the date and amount of prepayment.  If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid.  Partial prepayments of the Loan shall be in an
aggregate principal amount of $500,000 or a whole multiple thereof.  Each
prepayment of the Loan pursuant to this Section 2.04 shall be applied to the
principal repayment installments thereof in inverse order of maturity.
 
Section 2.05.    Mandatory Prepayments and Commitment Reductions.
 
(a)           If any Indebtedness shall be incurred by any Group Member
(excluding any Indebtedness incurred in accordance with Section 6.02), an amount
equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of
such issuance or incurrence toward the prepayment of the Loan as set forth in
Section 2.05(d).
 
(b)           If on any date any Group Member shall receive Net Cash Proceeds
from any Asset Sale, Recovery Event or Extraordinary Receipt then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Loan as set
forth in Section 2.05(d); provided, that (i) the aggregate Net Cash Proceeds of
Asset Sales, Recovery Events and Extraordinary Receipts that may be excluded
from the foregoing requirement pursuant to a Reinvestment Notice shall not
exceed $1,000,000 in any Fiscal Year and (ii) on each Reinvestment Prepayment
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Loan
as set forth in Section 2.05(d).
 
(c)           If, at any time during any Fiscal Quarter, the Borrower receives
Excess Payments under the Redemption Agreement, an amount equal to 100% of such
Excess Payments shall be applied on the Payment Date immediately succeeding the
last day of such Fiscal Quarter toward the prepayment of the Loan as set forth
in Section 2.05(d).
 
(d)           All amounts to be applied in connection with prepayments of the
Loan made pursuant to this Section 2.05 shall be applied to the Loan and to the
principal repayment installments thereof in inverse order of maturity.  Each
prepayment of the Loan under Section 2.05 shall be accompanied by accrued
interest to the date of such prepayment on the amount so prepaid.

 
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Section 2.06.    Interest Rates and Payment Dates.
 
(a)           The Loan shall bear interest for each day at a rate per annum
equal to the Prime Rate.
 
(b)           (i)           If any amount of principal of the Loan is not paid
when due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a rate per annum at all times equal to the Default Rate to the
fullest extent permitted by applicable Requirements of Law.
 
(ii)           If any amount (other than principal of the Loan) payable by the
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then such amount shall thereafter bear interest at a rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Requirements of Law.
 
(iii)           While any Event of Default exists, the Borrower shall pay
interest on the principal amount of all outstanding Obligations hereunder at a
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Requirements of Law.
 
(iv)           Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
 
(c)           Principal and interest on the Loan shall be due and payable on
each Payment Date applicable thereto and at such other times as may be specified
herein.  Interest hereunder shall be due and payable in accordance with the
terms hereof before and after judgment, and before and after the commencement of
any proceeding under any bankruptcy, insolvency, reorganization or similar law.
 
(d)          The Borrower covenants and agrees that (i) each Assigned Agreement
Payment made (or to be made) by any Person to the Borrower and/or to SMH SPEADV
shall be made, transferred or deposited directly into the Assigned Agreement
Payment Escrow Account, and (ii) after any Assigned Agreement Payment is made,
transferred or deposited into the Assigned Agreement Payment Escrow Account, the
Lender will, without notice to or consent of or other action by any other
Person, automatically apply a portion of such Assigned Agreement Payment Escrow
Amount to the payment and satisfaction of the next scheduled principal payment
and next scheduled interest payment on the Loan; provided that if at any time an
Event of Default has occurred and is continuing, the Lender may immediately
apply any funds on deposit in the Assigned Agreement Payment Escrow Account to
the payment and performance of the Obligations in such order and manner as the
Lender may from time to time determine in its sole discretion.

 
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Section 2.07.    Computation of Interest and Fees.
 
(a)           Interest and fees payable pursuant hereto shall be calculated on
the basis of a 360-day year for the actual days elapsed.  Any change in the
interest rate on the Loan resulting from a change in the Prime Rate shall become
effective as of the opening of business on the day on which such change becomes
effective.  The Lender shall as soon as practicable notify the Borrower of the
effective date and the amount of each such change in interest rate.
 
(b)           Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
in the absence of manifest error.
 
Section 2.08.    Payments.
 
(a)           All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without any condition or deduction for any counterclaim, defense,
recoupment or setoff and shall be made prior to 12:00 Noon, Houston, Texas time,
on the due date thereof to the Lender at the Funding Office, in Dollars and in
immediately available funds.  If any payment hereunder becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day.
 
(b)           The Borrower hereby authorizes the Lender and the Lender's
Affiliates, if and to the extent any payment owed to the Lender is not made when
due hereunder or any other Loan Document, to charge from time to time, to the
fullest extent permitted by applicable law, against any or all of the Borrower's
accounts with the Lender or such Affiliate any amount so due.
 
(c)           Nothing herein shall be deemed to obligate the Lender to obtain
the funds for the Loan in any particular place or manner or to constitute a
representation by the Lender that it has obtained or will obtain funds for the
Loan in any particular place or manner.
 
Section 2.09.    Increased Costs.
 
(a)           If any Change in Law shall:
 
(i)           impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
the Lender;
 
(ii)           subject the Lender to any tax of any kind whatsoever with respect
to this Agreement, or change the basis of taxation of payments to the Lender in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section
2.10) and the imposition of, or any change in the rate of, any Excluded Tax
payable by the Lender; or
 
(iii)           impose on the Lender any other condition, cost or expense
affecting this Agreement made by the Lender; and
 
the result of any of the foregoing shall be to reduce the amount of any sum
received or receivable by the Lender hereunder (whether of principal, interest
or any other amount) then, upon request of the Lender, the Borrower will pay to
the Lender such additional amount or amounts as will compensate the Lender for
such additional costs incurred or reduction suffered.

 
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(b)          If the Lender determines that any Change in Law affecting the
Lender or any Lending Office of the Lender or the Lender's holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on the Lender's capital or on the capital of the Lender's holding
company, if any, as a consequence of this Agreement or the Loan, to a level
below that which the Lender or the Lender's holding company could have achieved
but for such Change in Law (taking into consideration the Lender's policies and
the policies of the Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to the Lender such additional
amount or amounts as will compensate the Lender or the Lender's holding company
for any such reduction suffered.
 
(c)          A certificate of the Lender setting forth in reasonable detail the
amount or amounts necessary to compensate the Lender or its holding company, as
the case may be, and how such amount or amounts were determined as specified in
paragraph (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error.  The Borrower shall pay the Lender the amount
shown as due on any such certificate within ten (10) days after receipt thereof.
 
(d)          Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender's right to
demand such compensation, provided that the Borrower shall not be required to
compensate the Lender pursuant to this Section for any increased costs incurred
or reductions suffered more than nine (9) months prior to the date that the
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of the Lender's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).
 
(e)          The obligations of the Borrower pursuant to this Section shall
survive the termination of this Agreement and the payment of the Loan and all
other amounts payable hereunder.
 
Section 2.10.    Taxes.
 
(a)           Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall to the extent
permitted by applicable laws be made free and clear of and without reduction or
withholding for any Taxes.  If, however, applicable laws require the Borrower or
the Lender to withhold or deduct any Tax, such Tax shall be withheld or deducted
in accordance with such laws as determined by the Borrower or the Lender, as the
case may be, upon the basis of the information and documentation to be delivered
pursuant to subsection (e) below.  If the Borrower or the Lender shall be
required by the Code to withhold or deduct any Taxes, including both United
States Federal backup withholding and withholding taxes, from any payment, then
(i) the Lender shall withhold or make such deductions as are determined by the
Lender to be required based upon the information and documentation it has
received pursuant to subsection (e) below, (ii) the Lender shall timely pay the
full amount withheld or deducted to the relevant Governmental Authority in
accordance with the Code, and (C) to the extent that the withholding or
deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by the Borrower shall be increased as necessary so that after any
required withholding or the making of all required deductions (including
deductions applicable to additional sums payable under this Section) the Lender
receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

 
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(b)          Without limiting the provisions of subsection (a) above, the
Borrower shall timely pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.
 
(c)          Without limiting the provisions of subsection (a) or (b) above, the
Borrower shall, and does hereby indemnify the Lender and shall make payment in
respect thereof within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
withheld or deducted by the Borrower or the Lender and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount
of any such payment or liability delivered to the Borrower by the Lender shall
be conclusive absent manifest error.  Without limiting the provisions of
subsection (a) or (b) above, the Lender shall, and does hereby, indemnify the
Borrower and shall make payment in respect thereof within ten (10) days after
demand therefor, against any and all Taxes and any and all related losses,
claims, liabilities, penalties, interest and expenses (including the fees,
charges and disbursements of any counsel for the Borrower incurred by or
asserted against the Borrower by any Governmental Authority as a result of the
failure by the Lender to deliver, or as a result of the inaccuracy, inadequacy
or deficiency of, any documentation required to be delivered by the Lender to
the Borrower to subsection (e).  The agreements in the immediately preceding
sentence shall survive the termination of the Commitments and the repayment,
satisfaction or discharge of all other Obligations.
 
(d)          Upon request by the Borrower or the Lender, as the case may be,
after any payment of Taxes by the Borrower or the Lender to a Governmental
Authority as provided in this Section 2.10, the Borrower shall deliver to the
Lender or the Lender shall deliver to the Borrower the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of any return required by applicable law to report such payment or other
evidence of such payment reasonably satisfactory to the Borrower or the Lender,
as the case may be.

 
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(e)           The Lender shall deliver to the Borrower at the time or times
prescribed by applicable laws or when reasonably requested by the Borrower such
properly completed and executed documentation prescribed by applicable laws or
by the taxing authorities of any jurisdiction and such other reasonably
requested information as will permit the Borrower, as the case may be, to
determine (i) whether or not payments made hereunder or under any other Loan
Document are subject to Taxes, (ii) if applicable, the required rate of
withholding or deduction, and (iii) the Lender's entitlement to any available
exemption from, or reduction of, applicable Taxes in respect of all payments to
be made to the Lender by the Borrower pursuant to this Agreement or otherwise to
establish the Lender's status for withholding tax purposes in the applicable
jurisdiction.  Without limiting the generality of the foregoing, if the Borrower
is resident for tax purposes in the United States, Lender shall deliver to the
Borrower executed originals of Internal Revenue Service Form W-9 or such other
documentation or information prescribed by applicable laws or reasonably
requested by the Borrower as will enable the Borrower, as the case may be, to
determine whether or not the Lender is subject to backup withholding or
information reporting requirements.  The Lender shall promptly (i) notify the
Borrower of any change in circumstances which would modify or render invalid any
claimed exemption or reduction, and (ii) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of the Lender, and
as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable laws of any jurisdiction that the
Borrower make any withholding or deduction for taxes from amounts payable to the
Lender.
 
(f)           If the Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses incurred by the Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund),
provided that the Borrower, upon the request of the Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Lender in the event the
Lender is required to repay such refund to such Governmental Authority.  This
subsection shall not be construed to require the Lender to make available its
tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.
 
(g)          The agreements in this Section 2.10 shall survive the termination
of this Agreement and the payment of the Loan and all other amounts payable
hereunder.
 
Section 2.11.    Use of Proceeds.  The proceeds of the Loan shall be used to
finance a portion of the GFS Acquisition, to pay related transaction fees and
expenses and for other general corporate purposes.
 
Section 2.12.     Evidence of Debt.
 
(a)           The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to the Lender
resulting from the Loan from time to time, including the amounts of principal
and interest payable and paid to the Lender from time to time under this
Agreement.
 
(b)          The entries made in the account of the Lender maintained pursuant
hereto shall, to the extent permitted by applicable law, be prima facie evidence
of the existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of the Lender to maintain such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Loan in accordance with the
terms of this Agreement.

 
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(c)           The Borrower agrees that, upon the request by the Lender, the
Borrower will execute and deliver the Term Note to the Lender.  The Lender is
hereby authorized to record the Borrowing Date, the amount of the Loan and the
date and amount of each payment or prepayment of principal thereof, on the
schedule annexed to and constituting a part of the Term Note and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided that the failure by the Lender to make any
such recordation (or any error therein) shall not affect any of the obligations
of the Borrower under the Term Note or this Agreement.
 
Section 2.13.    Mitigation Obligations.  If the Lender requests compensation
under Section 2.09, or requires the Borrower to pay any additional amount to the
Lender or any Governmental Authority for the account of the Lender pursuant to
Section 2.10, then the Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking the Loan hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of the Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.09 or 2.10,
as the case may be, in the future and (ii) would not subject the Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to the
Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by the Lender in connection with any such designation or assignment.
 
ARTICLE III
 
CONDITIONS PRECEDENT
 
Section 3.01.   Conditions to Effectiveness.  The agreement of the Lender to
make the Loan is subject to the satisfaction, prior to or concurrently with the
making of the Loan, of the following conditions precedent:
 
(a)           Credit Agreement; Other Loan Documents.  The Lender shall have
received the following, each of which shall be originals or, at the discretion
of the Lender, telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party and each in form and substance satisfactory to the Lender:
 
(i)       this Agreement, duly executed and delivered by the Lender and the
Borrower;
 
(ii)      the Term Note, duly executed and delivered by the Borrower;
 
(iii)     the Guarantee and Security Agreement, duly executed and delivered by
the Borrower and each Guarantor;
 
(iv)    a Notice of Borrowing, requesting that the Lender make the Loan to the
Borrower and specifying the amount to be borrowed;

 
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(v)     each Control Agreement required by Section 5.01 of the Guarantee and
Security Agreement, including the GFS Uncertificated Security Control
Agreements, in each case duly executed by the Lender, the applicable Loan
Parties, and the applicable depository institutions, commodity intermediaries,
securities intermediaries and issuers, which is required to be delivered by any
Loan Party on or prior to the Closing Date pursuant to the Guarantee and
Security Agreement;
 
(vi)    a Reaffirmation of and Amendment to Guarantee and Security Agreement, in
form and substance satisfactory to the Lender, dated on or about the Closing
Date, duly executed by the Borrower and each of the Guarantors, pursuant to
which the Borrower and each Guarantor has ratified, approved, consented to and
confirmed the amendment and restatement of the Credit Agreement as set forth
herein and related matters;
 
(vii)   each Acknowledgment and Consent, in the form attached to the Guarantee
and Security Agreement, duly executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party, which is required to be delivered by
any Loan Party on or prior to the Closing Date pursuant to the Guarantee and
Security Agreement;
 
(viii)  each Assigned Agreement referred to in the Guarantee and Security
Agreement, together with each Consent and Agreement relating thereto and the SMH
SPEADV Assignments, duly executed and delivered by each party thereto;
 
(ix)     the SMHG - Salient Intercreditor Agreement, duly executed and delivered
by Salient Partners, L.P., the Borrower, Bank of Texas, N.A., and SMH SPEADV;
and
 
(x)      the Intercompany Subordination Agreement, duly executed and delivered
by the Loan Parties, Global Financial Services, Sanders Morris Harris Inc., the
Lender and each other Group Member a party thereto.
 
(b)          GFS Acquisition.  The following transactions shall have been
consummated, in each case on terms and conditions satisfactory to Lender:
 
(i)       The Borrower shall have purchased from Robert C.A. Benjamin, Gerardo
A. Chapa, and Ricardo Perusquia, limited liability company membership interests
representing an aggregate 50.1% profits interest and 48.743311% capital interest
in Global Financial Services and 50.1% of the limited liability company
membership interests of GFS Advisors pursuant to the GFS Purchase Agreement
(collectively, the "GFS Acquisition");
 
(ii)      the aggregate purchase price to be paid by the Borrower for the
limited liability company membership interests of each of Global Financial
Services and GFS Advisors to be purchased by the Borrower pursuant to the GFS
Acquisition shall not exceed $32,000,000;
 
(iii)     the aggregate Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries on the Closing Date, after giving effect to the GFS Acquisition,
shall not exceed $27,000,000; and

 
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(iv)    immediately following the consummation of the GFS Acquisition, the
Borrower shall own (A) 50.1% of the profit interests and 48.743311% of the
capital interests of Global Financial Services and (B) 50.1% of the equity
interests of GFS Advisors;
 
(v)     immediately following the consummation of the GFS Acquisition, the
Borrower shall (A) have ability to appoint or direct the appointment of a
majority of the members of the board of managers or any other applicable
managing body of Global Financial Services and GFS Advisors, (B) have the power
to vote or direct the voting of the limited liability company membership
interests of Global Financial Services and GFS Advisors having a majority of the
ordinary voting power (determined on a fully diluted basis) and (C) otherwise
have the ability to exercise control over the management and operations of
Global Financial Services and GFS Advisors.
 
(c)           Closing Certificates, Etc.  The Lender shall have received from
each Loan Party, a Closing Certificate for each such Person substantially in the
form of Exhibit A, with appropriate insertions and attachments, dated the
Closing Date, duly executed and delivered by such Person's Secretary or
Assistant Secretary, other Responsible Officer, managing member or general
partner, as applicable, as to:
 
(i)       resolutions of each such Person's board of directors (or general
partner, manager or managers, other managing body, in the case of an entity
other than a corporation) then in full force and effect authorizing, to the
extent relevant, all aspects of the GFS Acquisition applicable to such Person
and the execution, delivery and performance of each Loan Document to be executed
by such Person and the transactions contemplated hereby and thereby;
 
(ii)      the incumbency and signatures of such Person's officers, managing
member or general partner, as applicable, authorized to act with respect to each
Loan Document to be executed by such Person;
 
(iii)     the full force and validity of each Organizational Document of such
Person and copies thereof; and
 
(iv)    the other matters specified therein;
 
upon which certificates the Lender may conclusively rely until they shall have
received a further certificate of the Secretary, Assistant Secretary, other
Responsible Officer, managing member or general partner, as applicable, of any
such Person canceling or amending the prior certificate of such Person.
 
(d)          Pro Forma Balance Sheet; Financial Statements.  The Lender shall
have received (i) if requested by the Lender, the Pro Forma Balance Sheet, (ii)
audited consolidated and consolidating financial statements of the Borrower and
its Subsidiaries for the 2007, 2008 and 2009 Fiscal Years and unaudited interim
consolidated and consolidating financial statements of the Borrower and its
Subsidiaries for each fiscal month and quarterly period ended subsequent to the
date of the latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the Lender,
reflect any material adverse change in the consolidated financial condition of
the Borrower and its Subsidiaries.

 
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(e)           Approvals.  All governmental and third-party approvals (including
landlords' and other consents) necessary in connection with the Acquisition, the
continuing operations of the Borrower and its Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority that would restrain, prevent or
otherwise impose adverse conditions on the GFS Acquisition or the Loan
contemplated hereby.  There shall not exist any order, decree, judgment, ruling
or injunction which restrains the consummation of the transactions contemplated
by the Loan Documents or the GFS Acquisition Documents.
 
(f)           Lien Searches.  The Lender shall have received the results of
recent Lien searches by a Person satisfactory to the Lender, of the UCC,
Intellectual Property, judgment and tax lien filings that may have been filed
with respect to personal property of the Loan Parties, Global Financial Services
and GFS Advisors and the results of such searches shall be satisfactory in form
and substance to the Lender.
 
(g)          Fees and Expenses.  The Lender shall have received payment in full
of the commitment fee in the amount of $59,500, and all fees, costs and expenses
paid or incurred by Lender (including, without limitation, all attorneys' fees)
existing or arising from, as a result of or in connection with the preparation,
negotiation, execution, delivery and performance of this Agreement and any other
Loan Document.
 
(h)          Legal Opinion.  The Lender shall have received the legal opinion of
John T. Unger, general counsel of the Borrower and its Subsidiaries, in form and
substance satisfactory to Lender.
 
(i)           Pledged Equity Interests; Pledged Notes.  The Lender shall have
received (i) all Pledged Equity Interests required to be delivered by a Loan
Party to the Lender on or prior to the Closing Date pursuant to the Guarantee
and Security Agreement, in each case together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the
pledgor thereof, (ii) the original executed Salient Note and each of the other
Pledged Notes required to be delivered by any Loan Party to the Lender on or
prior to the Closing Date pursuant to the Guarantee and Security Agreement, in
each case endorsed (without recourse to the Lender) in blank (or accompanied by
an executed transfer form in blank) by the pledgor thereof.
 
(j)           Actions to Perfect Liens.  The Lender shall have received evidence
satisfactory to it that all filings, recordings, registrations, and other
actions necessary, or in the opinion of the Lender, desirable to perfect and
protect the Liens created by the Security Documents shall have been completed
(including, without limitation, the filing of financing statements on form
UCC-1, and receipt by the Lender of duly executed payoff letters, UCC-3
termination statements (or authorizations to terminate financing statements).
 
(k)           Solvency Certificate.  The Lender shall have received a Solvency
Certificate, in substantially the form of Exhibit C, executed by the chief
financial officer of the Borrower.

 
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(l)           Insurance.  The Lender shall have received insurance certificates
and endorsements satisfying the requirements of Section 5.02(b) of the Guarantee
and Security Agreement.
 
(m)         Related Agreements.  The Lender shall have received true and correct
executed copies, certified as to authenticity by the Borrower, of the GFS
Acquisition Documents, the Assigned Agreements, each Material Contract then in
effect and such other documents or instruments as may be requested by the
Lender, including a copy of each employment agreement, non-competition agreement
and other agreement with each officer of any Loan Party.
 
(n)          Capitalization; Legal Structure.  The Lender shall be satisfied
with the corporate (or other organizational) and legal structure and
capitalization of each Loan Party and each of its Subsidiaries, including the
terms and conditions of their Organizational Documents and each class of Equity
Interests in each Loan Party and each such Subsidiary and of each agreement or
instrument relating to such structure or capitalization.
 
(o)          FOCUS Reports.  The Lender shall have received copies of the FOCUS
Reports referred to in Section 4.01.
 
(p)          Business Plan.  If Lender has so requested, the Lender shall have
received a business plan for the Borrower and its Subsidiaries for the Fiscal
Year ending on December 31, 2011, which business plan shall be satisfactory in
form and substance to the Lender.
 
(q)          Operating Accounts.  The Borrower shall have established its
primary operating accounts with the Lender pursuant to one or more Cash
Management Agreements (each, an "SMHG Operating Account").
 
(r)           Representations and Warranties.  Each of the representations and
warranties of the Loan Parties contained in the Loan Documents shall be true and
correct on and as of such date, before and after giving effect to the Loan and
application of the proceeds therefrom, as if made on and as of such date (except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case, they shall be true and correct as of such earlier
date).
 
(s)          No Default.  No Default or Event of Default shall have occurred and
be continuing on such date or would result from the Loan or the application of
the proceeds therefrom.
 
(t)           Additional Matters.  All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, the other Loan Documents, the
Assigned Agreements, the Clearing Agreements and the GFS Acquisition Documents
shall be satisfactory in form and substance to the Lender, and the Lender shall
have received such other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.

 
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ARTICLE IV

 
REPRESENTATIONS AND WARRANTIES
 
To induce the Lender to enter into this Agreement and to make the Loan, the
Borrower hereby represents and warrants to the Lender that:
 
Section 4.01.    Financial Condition.
 
(a)           If required by the Lender, the unaudited pro forma consolidated
and consolidating balance sheets of the Borrower and its consolidated
Subsidiaries as at the Closing Date (including the notes thereto) (the
"Pro Forma Balance Sheet") has been prepared after giving effect (as if such
events had occurred on such date) to (i) the consummation of the GFS
Acquisition, (ii) the Loan to be made on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing.  If furnished to the Lender, the Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at the
Closing Date, assuming that the events specified in the preceding sentence had
actually occurred at such date.
 
(b)          The audited consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at December 31, 2007, December 31, 2008 and
December 31, 2009, and the related consolidated and consolidating statements of
income, changes in shareholders' equity, and of cash flows for the Fiscal Years
ended on such dates, reported on by and accompanied by an unqualified report
from KPMG LLP (or, with the written approval of the Lender, other independent
certified public accountants of nationally recognized standing), present fairly
on a consolidated and consolidating basis the financial condition of the
Borrower as at such date, and on a consolidated and consolidating basis the
results of its operations and its cash flows for the respective Fiscal Years
then ended.  All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein).  No Group Member has any material
Guarantee Obligations, contingent liabilities or liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, or any Swap
Contracts or other similar obligations, in each case that are not reflected in
the most recent financial statements referred to in this paragraph.  Other than
the Concept Capital Division Disposition, there has been no Disposition by any
Group Member of any material part of its business or property.  The Borrower has
also provided the Lender the quarterly FOCUS Reports provided by SMH Capital
Inc. to the SEC during 2008 (the "Specified FOCUS Reports").  The Specified
FOCUS Reports are correct and complete in all material respects and conform in
all material respects to Exchange Act requirements and applicable SEC rules and
regulations.
 
Section 4.02.    No Change.  Since December 31, 2008 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.

 
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Section 4.03.   Corporate Existence; Compliance with Law.  Each Group Member (a)
is duly incorporated or organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or other organization, (b) has
the corporate or other organizational power and authority, and the legal right,
to own and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly qualified
as a foreign corporation or other entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, (d) possesses all licenses,
registrations and authorizations from and with any Governmental Authority
necessary or material to the conduct of its business as now or presently
proposed to be conducted, (e) is in compliance, and after entering into this
Agreement will be in compliance, with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, (f) is not in arrears
in regard to any assessment made upon it by the SIPC or any other applicable
Governmental Authority, and (g) has not received any notice from the SEC, FINRA,
MSRB, CFTC or any other Governmental Authority of any alleged rule violation or
other circumstance which could reasonably be expected to have a Material Adverse
Effect.
 
Section 4.04.    Corporate Power; Authorization; Enforceable Obligations.  Each
Loan Party has the corporate or other organizational power and authority, and
the legal right, to make, deliver and perform the Loan Documents to which it is
a party and, in the case of the Borrower, to obtain the Loan hereunder.  Each
Loan Party has taken all necessary organizational action to authorize the
execution, delivery and performance of the Loan Documents and the Acquisition
Documents to which it is a party and, in the case of the Borrower, to authorize
the Loan on the terms and conditions of this Agreement and to authorize the
transactions and payments contemplated for the Acquisition.  No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Acquisition or the Loan or with the execution, delivery, performance, validity
or enforceability of this Agreement or any of the Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 4.04, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (ii) the filings referred to in Section 4.18.  Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
thereto.  This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
 
Section 4.05.    No Legal Bar.  The execution, delivery and performance of this
Agreement and the other Loan Documents, the making of the Loan hereunder and the
use of the proceeds thereof will not violate, conflict with or create a default
under any Requirement of Law or any Contractual Obligation of any Group Member
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents).  No Requirement of Law or Contractual Obligation applicable
to the Borrower or any of its Subsidiaries could reasonably be expected to have
a Material Adverse Effect.  The Acquisitions and the Acquisition Documents
comply with all applicable Requirements of Law.

 
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Section 4.06.    Litigation.  No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Group Member or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents, the Acquisition Documents or the Assigned Agreements or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
 
Section 4.07.    No Default.  No Group Member is in default under or with
respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect.  No Default or Event
of Default has occurred and is continuing.
 
Section 4.08.    Ownership of Property; Liens.  Each Group Member has title in
fee simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, and none of
such property is subject to any Lien except as permitted by Section 6.03.
 
Section 4.09.    Intellectual Property.  Each Group Member owns, or is licensed
to use, all Intellectual Property necessary for the conduct of its business as
currently conducted.  No claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim.  The use of Intellectual Property by each Group
Member does not infringe on the rights of any Person in any material respect.
 
Section 4.10.    Taxes.  Each Group Member has filed or caused to be filed all
Federal, state and other Tax returns that are required to be filed and has paid
all Taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other Taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the relevant Group Member).  No Tax Lien
has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such Tax, fee or other charge.  No Group Member is
a party to any Tax sharing or Tax allocation agreement.
 
Section 4.11.   Labor Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:  (a) there are no
strikes or other labor disputes against any Group Member  pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.

 
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Section 4.12.    ERISA.
 
(a)           Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code.
 
(b)           No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period.
 
(c)           The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by more than $250,000 in the aggregate as to all such
Plans.
 
(d)           Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made.  No such Multiemployer Plan is in Reorganization or
Insolvent.
 
Section 4.13.    Investment Company Act; Investment Advisers Act; Other
Regulations.
 
(a)           No Loan Party is an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940.
 
(b)           No Loan Party is an "investment adviser" under the Investment
Advisers Act of 1940, except as set forth in Schedule 4.13.  Each Loan Party set
forth on Schedule 4.13 is duly registered as an "investment adviser" under the
Investment Advisers Act of 1940.
 
(c)           No Loan Party is subject to regulation under any Requirement of
Law (other than Regulation X of the Board) that limits its ability to incur
Indebtedness.
 
Section 4.14.   Federal Reserve Regulations.  Neither the making of the Loan
hereunder nor the use of any of the proceeds thereof will violate or be
inconsistent with the provisions of Regulation T, Regulation U, or
Regulation X.  Following the application of the proceeds of the Loan, less than
25% of the value of the assets of the Borrower and its Subsidiaries which are
subject to any limitation on sale, pledge or other restriction hereunder taken
as a whole have been, and will continue to be, represented by Margin Stock.  If
requested by the Lender, the Borrower will furnish to the Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.

 
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Section 4.15.    Subsidiaries.  Except as disclosed to the Lender by the
Borrower in writing from time to time after the Closing Date, (a) Schedule 4.15
sets forth the name and jurisdiction of incorporation of each Subsidiary and, as
to each such Subsidiary, the percentage of each class of Equity Interests owned
by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock or
similar options granted to employees or directors and directors' qualifying
shares) of any nature relating to any Equity Interests of the Borrower or any
Subsidiary.  All of the outstanding shares of capital stock and other Equity
Interests of each Subsidiary are validly issued and outstanding and fully paid
and nonassessable, and all such shares and other Equity Interests owned by the
Borrower or a Subsidiary are owned, beneficially and of record, by the Borrower
or such Subsidiary free and clear of all Liens.
 
Section 4.16.    Environmental Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
 
(a)           the facilities and properties owned, leased or operated by any
Group Member (the "Properties") do not contain, and have not previously
contained, any Hazardous Materials in amounts or concentrations or under
circumstances that constitute or constituted a violation of any Environmental
Law or could give rise to any Environmental Liability;
 
(b)           no Group Member has received or is aware of any notice of
violation, alleged violation, non-compliance, Environmental Liability or
potential Environmental Liability or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the "Business"), nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened;
 
(c)           Hazardous Materials have not been transported or disposed of from
the Properties in violation of any Environmental Law, or in a manner or to a
location that could give rise to any Environmental Liability, nor have any
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could give rise
to any Environmental Liability;
 
(d)           no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;
 
(e)           there has been no release or threat of release of Hazardous
Materials at or from the Properties, or arising from or related to the
operations of any Group Member in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to any Environmental Liability;
 
(f)            the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and

 
(g)           no Group Member has assumed any Environmental Liability of any
other Person.

 
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Section 4.17.   Accuracy of Information, Etc.  No statement or information
contained in this Agreement, any other Loan Document, any Assigned Agreement, or
any Acquisition Document or any other document, report, certificate or statement
furnished by or on behalf of the Borrower or any Subsidiary to the Lender, or
any of them, in connection with the transactions contemplated by this Agreement,
any other Loan Document, any Assigned Agreement, or any Acquisition Document
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading.  The projections and pro forma financial information contained in
the materials referenced above are based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the time
made, it being recognized by the Lender that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount.  As of the
date hereof, all of the representations and warranties of the Borrower or any
Subsidiary contained in the Acquisition Documents and the Assigned Agreements
are true and correct in all material respects.  There is no fact known to the
Borrower or any Subsidiary that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in any other Loan
Document, in any Assigned Agreement, in any Acquisition Document or in any other
documents, certificates and statements furnished to the Lender for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
 
Section 4.18.    Security Documents.  The Guarantee and Security Agreement is
effective to create in favor of the Lender a legal, valid and enforceable
security interest in all of the Collateral described therein and proceeds
thereof.  In the case of the Pledged Equity Interests and the Pledged Notes
described in the Guarantee and Security Agreement, when certificates
representing such Pledged Equity Interests and when such Pledged Notes are
delivered to the Lender, and in the case of the other Collateral described in
the Guarantee and Security Agreement, when financing statements and other
filings specified on Schedule 4.18 in appropriate form are filed in the offices
specified on Schedule 4.18, the Guarantee and Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in and to all such Collateral and the proceeds
thereof, as security for the Obligations, in each case prior and superior in
right to any other Person (except, in the case of Collateral other than Pledged
Equity Interests and Pledged Notes, Liens permitted by Section 6.03).
 
Section 4.19.    Solvency.  Each Group Member is, and after giving effect to the
GFS Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.

 
Section 4.20.   Certain Documents.  The Borrower has delivered to the Lender
complete and correct copies of the Acquisition Documents and the Assigned
Agreements, including any amendments, supplements or modifications with respect
to any of the foregoing.
 
Section 4.21.    Material Contracts.  Schedule 4.21 sets forth as of the Closing
Date a complete and accurate list of all Material Contracts of each Group
Member, showing the parties, subject matter and term thereof.  Each such
Material Contract has been duly authorized, executed and delivered by all of the
parties thereto, has not been amended, supplemented or otherwise modified, is in
full force and effect and is binding upon and enforceable against all parties
thereto in accordance with its terms, and there exists no default under any
Material Contract by any party thereto.

 
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Section 4.22.    Insurance.  Schedule 4.22 sets forth as of the Closing Date a
complete and accurate list of all policies of insurance maintained by each Group
Member, showing with respect to each such policy the type of insurance, the
coverage amount, the carrier, and the duration of coverage.  All premiums with
respect to such policies of insurance have been fully paid.
 
Section 4.23.    Foreign Assets Control Regulations, Etc.
 
(a)           Neither the making of the Loan hereunder nor the use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
 
(b)           No Group Member (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) engages in
any dealings or transactions with any such Person.  Each Group Member is in
compliance with the USA PATRIOT Act.
 
(c)           No part of the proceeds from the Loan will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that
such Act applies to the Borrower.
 
Section 4.24.    Net Capital.
 
(a)           Sanders Morris Harris Inc. and Global Financial Services are each
operating pursuant to the Aggregate Indebtedness requirements provided in
paragraph (a)(1) of Rule 15c3-1;
 
(b)           Each of Sanders Morris Harris Inc. and Global Financial Services
is not in arrears with respect to any assessment made upon it by the SIPC,
except for any such assessment being contested in good faith and by appropriate
proceedings; and
 
(c)           No Group Member is subject to regulation under Rule 8c-1, Rule
15c2-1, Rule 15c3-1 or Rule 15c3-3, other than Sanders Morris Harris Inc. and
Global Financial Services.
 
Section 4.25.    Group Member Accounts.  No Group Member has established or is
maintaining, for its own account, any deposit account, securities account or
commodity account with any other Person, other than (i) the SMHG Operating
Accounts, (ii) the Clearing Accounts in effect on the date hereof, (iii) the L/C
Collateral Account in effect on the date hereof, and (iv) the deposit accounts
described on Schedule 4.25 as in effect on the date hereof (such scheduled
accounts being referred to herein collectively as the "Existing Accounts").

 
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ARTICLE V
 
AFFIRMATIVE COVENANTS
 
The Borrower hereby agrees that, so long as any of the Obligations remain
outstanding or any Loan Document remains in effect, the Borrower shall and shall
cause each of its Subsidiaries to:
 
Section 5.01.    Financial Statements.  Furnish to the Lender:
 
(a)           as soon as available, but in any event within ninety (90) days
after the end of each Fiscal Year of the Borrower, a copy of the audited
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related audited
consolidated and consolidating statements of income, changes in shareholders'
equity, and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by KPMG LLP or other independent certified public
accountants of nationally recognized standing; and
 
(b)           as soon as available, but in any event not later than fifty (50)
days after the end of each of the first three quarterly periods of each Fiscal
Year of the Borrower, the unaudited consolidated and consolidating balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated and consolidating statements of income,
changes in shareholders' equity, and of cash flows for such quarter and the
portion of the Fiscal Year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes).
 
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
 
Section 5.02.    Certificates; Other Information.  Furnish to the Lender:
 
(a)           concurrently with the delivery of the financial statements
referred to in Section 5.01(a), (i) a certificate of the independent certified
public accountants reporting on such financial statements stating that (A) in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate, and (B)
the Compliance Certificate delivered concurrently with such financial statements
is true and correct in all respects, (ii) a certificate, executed by an
authorized officer of an independent third party reasonably acceptable to the
Lender, stating the assets under management of each of The Edelman Financial
Center, LLC, Edelman Financial Services, LLC, Global Financial Services and GFS
Advisors and (iii) either a certificate, executed by an authorized officer of an
independent third party reasonably acceptable to the Lender, stating the assets
under management of The Endowment Master Fund, L.P. or a copy of the form N-CSR
Certified Shareholder Report filed by The Endowment Master Fund, L.P. with the
SEC;

 
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(b)           concurrently with the delivery of any financial statements
pursuant to Section 5.01, a Compliance Certificate executed by a Responsible
Officer of the Borrower (x) stating that, to the best of such Responsible
Officer's knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to which it
is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and (y) containing all information and
calculations necessary for determining compliance with the financial covenants
and other provisions of this Agreement specified by the Lender referred to
therein as of the last day of the Fiscal Quarter or Fiscal Year of the Borrower,
as the case may be;
 
(c)           as soon as available, and in any event no later than forty-five
(45) days after the end of each Fiscal Year of the Borrower, a detailed
consolidated budget for the following Fiscal Year (including the projected
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of the following Fiscal Year, the related
consolidated and consolidating statements of projected cash flow, projected
changes in financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such Fiscal Year (collectively, the "Projections"), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
 
(d)           within forty-five (45) days after the end of each of the first
three Fiscal Quarters of each Fiscal Year and ninety (90) days after the end of
the fourth Fiscal Quarter of each Fiscal Year of the Borrower, a narrative
discussion and analysis of the financial condition and results of operations of
the Borrower and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, as compared to the portion of the Projections covering such periods and
to the comparable periods of the previous year;
 
(e)           no later than ten (10) Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification under or pursuant to any Acquisition
Document or any Assigned Agreement;

 
(f)            within five (5) days after the same are sent, copies of all
financial statements and reports that any Group Member sends to any holder of
any of its debt securities or public equity securities and, within five (5) days
after the same are filed, copies of all financial statements and reports that
the Borrower or any other Loan Party may make to, or file with, the SEC or
FINRA;
 
(g)           no later than twenty (20) days prior to the closing of any Asset
Sale, a notice (i) describing such Asset Sale and the material terms thereof,
and (ii) stating the estimated Net Cash Proceeds anticipated to be received by
the Group Members from such Asset Sale;

 
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(h)           promptly, copies of all federal, state, local and foreign Tax
returns and reports filed by each Group Member in respect of Taxes measured by
income (excluding sales, use and like Taxes);
 
(i)            as soon as available and in any event within ninety (90) days
after the end of each Fiscal Year of the Borrower, (i) a report in form and
substance satisfactory to the Lender outlining all insurance coverage maintained
as of the date of such report by the Group Members (specifying the type, amount,
deductibles and carrier) and the duration of such coverage, and (ii) an
insurance broker's statement that all premiums then due and payable with respect
to such coverage have been paid and confirming compliance by the Group Members
with Section 5.02(a) of the Guarantee and Security Agreement;
 
(j)            as soon as available and in any event within five (5) Business
Days after the receipt thereof, copies of any "management letter" or similar
letter or report received by the Borrower from its independent public
accountants;
 
(k)           as soon as available and in any event within twenty-five (25) days
after the end of each Fiscal Quarter of the Borrower, the FOCUS Reports for such
Fiscal Quarter filed by each applicable Loan Party with the SEC;
 
(l)            as soon as available and in any event within forty-five (45) days
after the end of each Fiscal Quarter of the Borrower, a report from the
Borrower's general counsel showing all litigation to which the Borrower or any
of its Subsidiaries is a party;
 
(m)           as soon as available and in any event within five (5) Business
Days after the end of each calendar month, (i) a report describing the
Consolidated Short Sales Exposure, the Concept Capital Short Sales Exposure, the
Consolidated Short Sales Amount, and Available Cash and Cash Equivalents in each
case as of the last Business Day of such calendar month, and all Clearing
Agreements in effect as of the last Business Day of such calendar month, (ii) a
report describing any claims made or reasonably expected to be made by any
Person, directly or indirectly, against the Borrower or any other Group Member
from, as a result of or in connection with (A) any short sale transaction or (B)
any other claim, liability or obligation under any Clearing Agreement (including
any Concept Capital Obligation), (iii) a report describing in reasonable detail
all outstanding Swap Contracts and securities repurchase (and reverse
repurchase) agreements to which any Loan Party is a party and the estimated Swap
Termination Value or other liability of such Loan Parties thereunder, (iv) to
the extent not previously disclosed to the Lender in writing, a description of
any change in the jurisdiction of organization or name of any Loan Party and a
list of all Intellectual Property and real property (including any leasehold
interests) acquired by any Loan Party since the date of the most recent list
delivered pursuant to this subsection (m) (or, in the case of the first such
list so delivered, since the Closing Date), (v) a list of all Investments that
have been made or are held by any Loan Party and permitted under Section 6.08,
and (vi) updated versions of each Schedule to the Guarantee and Security
Agreement containing information to the effect that such Schedule is true,
correct and complete in all respects as of the last Business Day of such
calendar month; and
 
(n)           promptly, such additional financial and other information as the
Lender may from time to time reasonably request.

 
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Documents required to be delivered pursuant to Section 5.01(a) or (b) or Section
5.02(f) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower's website on the
Internet at www.smhgroup.com; or (ii) on which such documents are posted on the
Borrower's behalf on an Internet or intranet website, if any, to which the
Lender has access (whether a commercial, third-party website or whether
sponsored by the Lender); provided that:  (x) if requested by the Lender, the
Borrower shall deliver paper copies of such documents to the Lender and (y) the
Borrower shall notify the Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft copies) of such documents.  Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 5.02(b)
to the Lender.
 
Section 5.03.    Payment of Obligations.  Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Group Member.
 
Section 5.04.    Maintenance of Existence; Compliance.
 
(a)           (i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) maintain all registrations, consents,
approvals, authorizations, rights, permits, licenses, privileges and franchises
from any Governmental Authority, Self-Regulatory Organization or securities
exchange necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 6.04 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and
 
(b)           comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 5.05.    Maintenance of Property; Insurance.
 
(a)           Keep all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted; and
 
(b)           maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business.

 
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Section 5.06.    Inspection of Property; Books and Records; Discussions.
 
(a)           Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and
 
(b)           at the sole cost and expense of the Borrower, representatives of
the Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of any Group Member with officers and
employees of any Group Member and with its independent certified public
accountants.
 
Section 5.07.    Notices.  Promptly give notice to the Lender of:
 
(a)           the occurrence of any Default or Event of Default;
 
(b)           any (i) default, event of default, termination event or other
similar event or circumstance under any Contractual Obligation of any Group
Member or (ii) litigation, investigation or proceeding that may exist at any
time between any Group Member and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
 
(c)           any litigation, proceeding or other claim against or affecting any
Group Member (i) in which the amount involved is $250,000 or more and not
covered by insurance, (ii) in which injunctive or similar relief is sought or
(iii) which relates to any Loan Document;
 
(d)           as soon as possible, and in any event within ten (10) days after
any Responsible Officer of the Borrower learns thereof, notice of the assertion
or commencement of any claim, action, litigation, suit or proceeding against or
affecting any Group Member or any of its assets commenced by (i) the SEC or
FINRA or (ii) any other Governmental Authority which could reasonably be
expected to have a Material Adverse Effect;
 
(e)           any assertion of any Environmental Liability or any other claim
under any Environmental Law against, or with respect to any activities or
properties of, any Group Member in which the amount of the Environmental
Liability or claim is $250,000 or more;
 
(f)            the following events, as soon as possible and in any event within
thirty (30) days after any Group Member knows or has reason to know
thereof:  (i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;
 
(g)           any material change in accounting policies or financial reporting
practices by any Group Member;

 
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(h)           the occurrence of any Asset Sale, Recovery Event, incurrence or
issuance of Indebtedness or receipt of any Extraordinary Receipt for which the
Borrower is required to make a mandatory prepayment pursuant to Section 2.05;
 
(i)            as soon as possible, and in any event, within two (2) Business
Days, any information or notice provided to the Borrower by (A) any Person under
or in connection with any Consent and Agreement or any Assigned Agreement, (B)
The Edelman Financial Center, LLC, Edelman Financial Services, LLC, Global
Financial Services and GFS Advisors, (C) any Person under or in connection with
any SMHG - Salient Intercreditor Agreement or (D) The Endowment Master Fund,
L.P. or any of its Affiliates;
 
(j)            any default, event of default or similar occurrence by any party
to any of the Acquisition Documents or any of the Assigned Agreements;
 
(k)           prior to its occurrence, any change in the management of the
Borrower; and
 
(l)            any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
 
Each notice delivered to the Lender pursuant to this Section 5.07 shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the relevant Group Member
proposes to take with respect thereto.
 
Section 5.08.    Environmental Laws.
 
(a)           Comply with, and ensure compliance by all tenants and subtenants,
if any, with, all applicable Environmental Laws, and obtain and comply with and
maintain, and ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws; and
 
(b)           Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
 
Section 5.09.    Additional Collateral.
 
(a)           With respect to any property acquired after the Closing Date by
any Group Member (other than any property described in paragraph (b), (c) or (d)
below, property of Sanders Morris Harris Inc., property of Global Financial
Services and property acquired by any Excluded Foreign Subsidiary) as to which
the Lender does not have a perfected Lien, promptly (i) execute and deliver to
the Lender such amendments to the Guarantee and Security Agreement or such other
documents or agreements as the Lender may require to grant to the Lender, a
perfected first priority security interest in such property and (ii) take all
actions required by the Lender to grant to the Lender a perfected first priority
security interest in such property, including the filing of UCC financing
statements in such jurisdictions as may be required by the Guarantee and
Security Agreement or by law or as may be requested by the Lender.

 
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(b)           With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $100,000 acquired after
the Closing Date by any Group Member, promptly (i) execute and deliver a first
priority Mortgage, in favor of the Lender covering such real property, (ii) if
requested by the Lender, provide the Lender with (A) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be specified
by the Lender), together with such endorsements as the Lender may require, (B) a
current ALTA survey of such real property, together with a surveyor's
certificate, (C) an environmental site assessment report for such real property,
(D) an appraisal of such real property, and (E) such consents, waivers, and
estoppels, and intercreditor, attornment and subordination agreements as may be
required by the Lender in connection with such Mortgage, each of the foregoing
to be in scope, form and substance satisfactory to the Lender, and (iii) if
requested by the Lender, deliver to the Lender legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, satisfactory to the Lender.
 
(c)           With respect to any new Material Subsidiary (other than an
Excluded Foreign Subsidiary) which is created or acquired after the Closing Date
by any Group Member (which, for the purposes of this paragraph (c), shall
include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Lender such amendments to
the Guarantee and Security Agreement and take such other action as the Lender
may require to grant to the Lender, for the benefit of the Lender, a perfected
first priority security interest in the Equity Interests of such new Material
Subsidiary that is owned by any Group Member, (ii) deliver to the Lender the
certificates representing such Equity Interests, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, (iii) cause such new Material Subsidiary (A) to become a
party to the Guarantee and Security Agreement, (B) to take all actions required
by the Lender to grant to the Lender a perfected first priority security
interest in the Collateral described in the Guarantee and Security Agreement
with respect to such new Material Subsidiary, including the filing of UCC
financing statements in such jurisdictions as may be required by the Guarantee
and Security Agreement or by law or as may be requested by the Lender and (C) to
deliver to the Lender a certificate of such Material Subsidiary, substantially
in the form of Exhibit A, with appropriate insertions and attachments, and (iv)
if requested by the Lender, deliver to the Lender legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, satisfactory to the Lender.
 
(d)           With respect to any new Excluded Foreign Subsidiary that is a
Material Subsidiary which is created or acquired after the Closing Date by any
Group Member (other than by any Group Member that is an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Lender such amendments to
the Guarantee and Security Agreement and take such other action as the Lender
may require to grant to the Lender a perfected first priority security interest
in the Equity Interests of such new Material Subsidiary that is owned by any
such Group Member (provided that in no event shall more than 66% of the total
outstanding voting Equity Interests of any such new Material Subsidiary be
required to be so pledged), (ii) deliver to the Lender the certificates
representing such Equity Interests, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the relevant Group
Member and take such other action as may be required by the Lender to perfect
the Lender's security interest therein, and (iii) if requested by the Lender,
deliver to the Lender legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, satisfactory to
the Lender.

 
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Section 5.10.    Further Assurances.
 
(a)           Promptly upon request by the Lender, correct any defect or error
that may be discovered from time to time in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof; and
 
(b)           Promptly upon request by the Lender, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Lender may require from time to time in
order to (i) carry out more effectively the purposes of the Loan Documents, (ii)
to the fullest extent permitted by applicable law, subject any Group Member's
properties, assets, rights or interests to the Liens now or hereafter intended
to be covered by any of the Security Documents, (iii) perfect and maintain the
validity, effectiveness and priority of any of the Security Documents and any of
the Liens intended to be created thereunder and (iv) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto the Lender
the rights granted or now or hereafter intended to be granted to the Lender
under any Loan Document or under any other instrument executed in connection
with any Loan Document to which any Group Member is or is to be a party.
 
Section 5.11.    Compliance with Leases.  Make all payments and otherwise
perform all obligations in respect of all leases of real property to which any
Group Member is a party, keep such leases in full force and effect and not allow
such leases to lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, notify the Lender of any default by any party with
respect to such leases and cooperate with the Lender in all respects to cure any
such default.
 
Section 5.12.    Material Contracts.  Perform and observe all the terms and
provisions of each Material Contract to be performed or observed by it, maintain
each such Material Contract in full force and effect, enforce each such Material
Contract in accordance with its terms, take all such action to such end as may
be from time to time requested by the Lender and, upon request of the Lender,
make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Group Member is
entitled to make under such Material Contract, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect.
 
Section 5.13.    Valuation and Appraisals.  Promptly upon the request of the
Lender at any time and from time to time, and at the sole cost and expense of
the Borrower, provide the Lender with descriptions, valuations, appraisals and
updates of any or all of the Collateral (including, to the extent requested by
the Lender, valuations and appraisals from third parties selected or approved by
the Lender), and prepared on a basis satisfactory to the Lender, such appraisals
and updates to include, without limitation, information required by applicable
Requirements of Law and by the internal policies of the Lender.

 
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Section 5.14.   Board Visitation.  Permit the Lender to designate an observer,
without voting rights, who will be entitled to attend, observe or otherwise
participate in all meetings of the board of directors (or equivalent governing
body) of the Borrower, of Sanders Morris Harris Inc. and of Global Financial
Services (including meetings of committees and subcommittees thereof).  The
Borrower shall deliver to the Lender reasonable prior notice of the time and
place of each meeting of the board of directors (or equivalent governing body)
of the Borrower, Sanders Morris Harris Inc or of Global Financial Services.  The
Borrower shall deliver to the Lender (a) in advance of execution, any
resolutions adopted or taken by the board of directors (or equivalent governing
body), or any committee or subcommittee thereof, without a meeting, and (b) all
other materials provided to the board of directors (or equivalent governing
body) of the Borrower, Sanders Morris Harris Inc. or of Global Financial
Services.  The Borrower shall reimburse such observer on demand for all expenses
incurred by it in attending such meetings.
 
Section 5.15.    Operating Accounts and Other Business.  At all times maintain
all of the Borrower's primary operating accounts with the Lender and enter into
Cash Management Agreements with the Lender to the extent required by the Lender
to operate and maintain all such operating accounts, and take all actions
reasonably requested by the Lender from time to time to enable the Lender to
provide any Group Member with information regarding any products or services
offered by the Lender, including Cash Management Agreements and overnight
investments.
 
Section 5.16.    Net Capital.  Cause Sanders Morris Harris Inc. and Global
Financial Services to (a) maintain at all times a ratio of Net Capital to
Aggregate Indebtedness (computed in accordance with Rule 15c3-1) of not less
than 10% and (b) at all times extend or maintain credit to or for its customers
in compliance with the applicable provisions of Regulation T, and with respect
to any Customer Securities, in compliance with Regulation T, Rule 8c-1, Rule
15c2-1, and Rule 15c3-1, and all other applicable Requirements of Law from time
to time in effect.
 
Section 5.17.    Concept Capital Division Disposition and Indemnification.
 
(a)           Consummate in full to the satisfaction of the Lender the Concept
Capital Division Disposition on or prior to January 15, 2011 (including the
transfer by the Borrower to NewCo LLC of all short sales transactions and
exposures of the Concept Capital Division, either by assignment and assumption
or by termination of all short sales transactions, in effect on or immediately
prior to the date of such consummation); and
 
(b)           take all actions necessary or requested by the Lender to terminate
each Contractual Obligation (including any Clearing Agreement), the terms and
provisions of which directly or indirectly create (or may create) any Concept
Capital Obligations, on or prior to the date which is thirty (30) days after the
date of consummation of the Concept Capital Division Disposition, and provide
evidence of each such termination to the Lender.

 
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ARTICLE VI
 
NEGATIVE COVENANTS
 
The Borrower hereby agrees that, so long as any Obligations remain outstanding
or any Loan Document remains in effect, the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
 
Section 6.01.    Financial Covenants.
 
(a)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage
Ratio as at the last day of any Fiscal Quarter of the Borrower to exceed 0.50 to
1.00.
 
(b)           Consolidated Tangible Net Worth.  Permit Consolidated Tangible Net
Worth as at the last day of any calendar month to be less than $90,000,000.
 
(c)           Consolidated Liquid Assets.  Permit (i) Consolidated Liquid Assets
as at the last day of any Fiscal Quarter of the Borrower to be less than
$40,000,000, or (ii) the portion of Consolidated Liquid Assets consisting of
Available Cash and Cash Equivalents as at the last day of any calendar month to
be less than $20,000,000.
 
(d)           Consolidated Client Assets.  Permit Consolidated Client Assets at
any time to be less than $8,000,000,000.
 
(e)           Consolidated Short Sales Exposure.  Permit (i) Consolidated Short
Sales Exposure at any time after the Concept Capital Division Disposition to be
greater than $1,000,000, or (ii) Consolidated Short Sales Amount at any time
after the Concept Capital Division Disposition to be greater than $1,000,000.
 
(f)            Consolidated Net Income.  Permit (i) Consolidated Net Income for
any Fiscal Year of the Borrower to be less than zero, or (ii) Consolidated Net
Income for any three (3) consecutive Fiscal Quarters of the Borrower to be less
than zero for any such Fiscal Quarter.
 
Section 6.02.    Indebtedness.  Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
 
(a)           Indebtedness of any Loan Party pursuant to any Loan Document;
 
(b)           Indebtedness (i) of the Borrower to any Subsidiary (other than
Sanders Morris Harris Inc., Global Financial Services or GFS Advisors), (ii) of
any Material Subsidiary to the Borrower or any other Subsidiary (other than
Sanders Morris Harris Inc., Global Financial Services or GFS Advisors), (iii)
subject to Section 6.08(h), of any Foreign Subsidiary to the Borrower or any
Material Subsidiary, (iv) constituting Permitted SMHI - Loan Party Indebtedness,
(v) constituting Permitted GFS - Loan Party Indebtedness and (vi) of 10 Sports
Marketing, L.P., a Delaware limited partnership, to the Borrower or Sanders
Morris Harris Inc. in an aggregate amount not to exceed $776,000 at any time
outstanding.

 
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(c)           Guarantee Obligations incurred by the Borrower or any Material
Subsidiary in respect of (i) any Indebtedness of the Borrower or any Material
Subsidiary (other than Sanders Morris Harris Inc., Global Financial Services or
GFS Advisors) otherwise permitted by this Section 6.02, (ii) any Permitted SMHI
- Loan Party Guarantee Obligations and (iii) any Permitted GFS - Loan Party
Guarantee Obligations;
 
(d)           Indebtedness outstanding on the date hereof and listed on Schedule
6.02(d) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
 
(e)           Unsecured Indebtedness arising under Swap Contracts permitted by
Section 6.20 entered into in the ordinary course of business having an aggregate
Swap Termination Value not to exceed $100,000 at any time outstanding;
 
(f)            Indebtedness arising under securities repurchase agreements
entered into in the ordinary course of business in an aggregate amount not to
exceed $100,000 at any time outstanding;
 
(g)           Indebtedness arising from liabilities and obligations (including
Concept Capital Obligations) under any Clearing Agreement in an aggregate amount
not to exceed $500,000 at any time outstanding;
 
(h)           Indebtedness arising from (i) Permitted Letters of Credit and any
renewals thereof in an aggregate stated face amount not to exceed $1,250,000 at
any time outstanding and (ii) any letter of credit issued from time to time by
the Lender for the account of any Loan Party, provided that any reimbursement
obligations in respect of any letter of credit issued by the Lender is fully
cash-collateralized by the Borrower at all times in a manner satisfactory to the
Lender; and
 
(i)            Additional unsecured Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $250,000 at any one time outstanding.
 
Section 6.03.    Liens.  Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except for:
 
(a)           Liens for taxes, assessments or governmental charges not yet due
or that are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;
 
(b)           carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue or that are being contested in good faith by appropriate proceedings;
 
(c)           pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security, retirement benefit, or similar
legislation;

 
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(d)           deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal bonds
(not in excess of $100,000 in the aggregate), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
 
(e)           easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount and that do not in any case materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries;
 
(f)            Liens in existence on the date hereof listed on Schedule 6.03(f),
securing Indebtedness permitted by Section 6.02(d), provided that no such Lien
is spread to cover any additional property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
 
(g)           Liens created pursuant to the Security Documents;
 
(h)           any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;
 
(i)            Liens arising (i) under any Clearing Agreement as in effect on
the date hereof (provided that such Lien, the obligations secured by any such
Lien and the property (and amount or value of property) subject to any such Lien
is not or are not increased or extended in any manner after the date hereof),
(ii) under any other Clearing Agreement which are approved in writing by the
Lender, and (iii) by operation of law in the ordinary course of the clearance
and settlement of securities purchase and sale transactions; and
 
(j)            Liens securing reimbursement obligations in respect of letters of
credit permitted under Section 6.02(h).
 
Section 6.04.    Fundamental Changes.  Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
 
(a)           any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Material Subsidiary (other than
Sanders Morris Harris Inc., Global Financial Services or GFS Advisors (provided,
that a Subsidiary of Sanders Morris Harris Inc., Global Financial Services or
GFS Advisors may merge or consolidate with or into Sanders Morris Harris Inc.,
Global Financial Services or GFS Advisors as applicable)) (provided that the
Material Subsidiary shall be the continuing or surviving Person);
 
(b)           any Subsidiary of the Borrower may Dispose of any or all of its
assets (i) to the Borrower or any Material Subsidiary (other than Sanders Morris
Harris Inc., Global Financial Services or GFS Advisors; provided that a
Subsidiary of Sanders Morris Harris Inc., Global Financial Services or GFS
Advisors may Dispose of any or all of its assets to Sanders Morris Harris Inc.,
Global Financial Services or GFS Advisors as applicable) (upon voluntary
liquidation or otherwise) or (ii) pursuant to a Disposition permitted by Section
6.05;

 
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(c)           any Investment expressly permitted by Section 6.08 may be
structured as a merger, consolidation or amalgamation, provided that in no event
shall the Borrower participate in a merger, consolidation, or amalgamation
without being the surviving entity; and
 
(d)           any Subsidiary with assets of less than $50,000 may be liquidated,
wound up, or dissolved.
 
Section 6.05.    Disposition of Property.  Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any of such Subsidiary's Equity Interests to any Person, except:
 
(a)           Dispositions of obsolete or worn out property in the ordinary
course of business to any Person;
 
(b)           Dispositions of securities in the ordinary course of business to
any Person (other than to Sanders Morris Harris Inc., Global Financial Services
or GFS Advisors);
 
(c)           Dispositions permitted by Sections 6.04(a), (b) or (d);
 
(d)           the sale or issuance of any Subsidiary's Equity Interests to the
Borrower or any Material Subsidiary (other than Sanders Morris Harris Inc.,
Global Financial Services or GFS Advisors (provided that a Subsidiary of Sanders
Morris Harris Inc., Global Financial Services or GFS Advisors may issue or sell
its Equity Interests to Sanders Morris Harris Inc., Global Financial Services or
GFS Advisors, as applicable));
 
(e)           the Concept Capital Division Disposition;
 
(f)            the Dispositions of other property to any Person (other than
Sanders Morris Harris Inc., Global Financial Services or GFS Advisors) having a
fair market value not to exceed $3,000,000 in the aggregate during the period
from and including the Closing Date and to but excluding the Maturity Date;
 
(g)           any Permitted SMHI - Loan Party Dispositions; and
 
(h)           any Permitted GFS - Loan Party Dispositions.
 
Section 6.06.    Restricted Payments.  Declare or make any Restricted Payment,
or incur any obligation (contingent or otherwise) to do so, except that (a) any
Subsidiary may make any Restricted Payment to the Borrower or any Material
Subsidiary, (b) provided that no Default or Event of Default has occurred and is
continuing at the time of any such dividend or distribution or would result from
the declaration of or making of any such dividend or distribution, any
Subsidiary may make any dividends or distributions to any Minority Owner of such
Subsidiary in an aggregate amount during any consecutive twelve (12) month
period not to exceed the lesser of (i) such Minority Owner's pro rata share of
the net income of such Subsidiary for such period or (ii) any amounts such
Subsidiary is obligated to pay to such Minority Owner during such period
pursuant to a Contractual Obligation listed on Schedule 6.06, and (c) the
Borrower may declare and pay a cash dividend on its issued and outstanding
shares of common stock, provided that (x) no Default or Event of Default has
occurred and is continuing at the time of any such dividend or would result from
the declaration of or making of any such dividend, and (y) on the day of and
after giving effect to the making of any such dividend, the Cumulative Dividend
Amount on such date would be less than Cumulative Consolidated Net Income on
such date.

 
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Section 6.07.    Capital Expenditures.  Make or commit to make any Capital
Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries
made in the ordinary course of business in an aggregate amount during any of the
Fiscal Year of the Borrower not to exceed the amount set forth below opposite
such Fiscal Year below:
 
Fiscal Year
 
Amount
         
2009
  $ 6,000,000  
2010
  $ 6,000,000  
2011
  $ 6,000,000  
2012
  $ 4,500,000  
2013
  $ 4,500,000  
2014
  $ 4,500,000  

 
provided, that (x) up to $1,000,000 of any such amount referred to above, if not
so expended in the Fiscal Year for which it is permitted, may be carried over
for expenditure in the next succeeding Fiscal Year and (y) Capital Expenditures
made pursuant to this Section 6.07 during any Fiscal Year of the Borrower shall
for purposes hereof be deemed made, first, in respect of amounts permitted for
such Fiscal Year as provided above and, second, in respect of amounts carried
over from the prior Fiscal Year pursuant to clause (x) above.
 
Section 6.08.    Investments.  Make, hold, maintain, or permit to exist any
Investments, except:
 
(a)           Investments in Subsidiaries and Affiliates existing on the date
hereof (other than Investments constituting Indebtedness permitted under Section
6.02) and listed on Schedule 6.08(a) hereof;
 
(b)           Investments in Cash Equivalents;
 
(c)           Investments in (i) Marketable Equity Securities and Marketable
Debt Securities made in the ordinary course of business and (ii) private equity
participations, other non-publicly traded debt or equity securities or other
private Investments, provided that the aggregate cost of all such Investments
shall not exceed (A) $55,000,000 in the aggregate at any time outstanding or (B)
with respect to all such Investments made during any Fiscal Year of the Loan
Parties, $10,000,000 in the aggregate at any time outstanding during such Fiscal
Year;
 
(d)           Indebtedness and Guarantee Obligations permitted under Section
6.02;
 
(e)           securities purchased under repurchase agreements entered into in
the ordinary course of business;
 
(f)            securities owned and loaned under securities lending agreements
entered into in the ordinary course of business;

 
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(g)           repurchases of up to 1,000,000 shares of the Borrower's common
stock to fund the Borrower's incentive stock option and stock purchase plan;
 
(h)           loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and relocation
expenses) in an aggregate amount for all Group Members not to exceed $100,000 on
the last day of any quarter;
 
(i)           upfront or bonus loans to employees of any Group Member in the
ordinary course of business in an aggregate amount for all Group Members not to
exceed $5,000,000 at any time outstanding;
 
(j)            the GFS Acquisition;
 
(k)           Investments in assets useful in the business of the Borrower and
its Subsidiaries made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
 
(l)            (i) any other Investments by any Group Member in any other Group
Member (other than Sanders Morris Harris Inc., Global Financial Services or GFS
Advisors), (ii) any Permitted SMHI - Loan Party Investments and (iii) any
Permitted GFS - Loan Party Permitted Investments; and
 
(m)          any other Investments by the Borrower or any of its Subsidiaries in
an aggregate amount (valued at cost) not to exceed $250,000 at any time
outstanding.
 
Section 6.09.    Transactions with Affiliates.  Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Material Subsidiary) unless such
transaction is (a) otherwise expressly permitted under this Agreement, (b) in
the ordinary course of business of the relevant Group Member, and (c) upon fair
and reasonable terms no less favorable to the relevant Group Member than it
would obtain in a comparable arm's length transaction with a Person that is not
an Affiliate.
 
Section 6.10.    Sales and Leasebacks.  Enter into any arrangement with any
Person providing for the leasing by any Group Member of real or personal
property that has been or is to be sold or transferred by such Group Member to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of such
Group Member.
 
Section 6.11.    Changes in Fiscal Periods.  Permit the Fiscal Year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining Fiscal Quarters.
 
Section 6.12.    Negative Pledge Clauses.  Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of any Group
Member to create, incur, assume or suffer to exist any Lien upon any of its
property or revenues, whether now owned or hereafter acquired, to secure its
obligations under the Loan Documents to which it is a party or any refinancings
thereof, other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).

 
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Section 6.13.        Clauses Restricting Subsidiary Distributions.  Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments
in respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary or
(c) transfer any of its assets to the Borrower or any other Subsidiary except
for such encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents, (ii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement that has been entered
into in connection with the Disposition of all or substantially all of the
Equity Interests or assets of such Subsidiary, or (iii) any restrictions imposed
by the Exchange Act or rules issued thereunder or rules of any Governmental
Authority having jurisdiction over the Borrower or any Subsidiary.
 
Section 6.14.        Lines of Business.  Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the GFS Acquisition) or that are reasonably related thereto.
 
Section 6.15.        Amendments to Acquisition Documents.  
 
(a)        Amend, supplement or otherwise modify (pursuant to a waiver or
otherwise) the terms and conditions of the indemnities and licenses furnished to
the Borrower or any of its Subsidiaries pursuant to the Acquisition Documents or
any other document delivered in connection therewith such that after giving
effect thereto such indemnities or licenses shall be materially less favorable
to the interests of the Loan Parties or the Lenders with respect thereto; or
 
(b)        amend, supplement or otherwise modify the terms and conditions of any
of the Acquisition Documents or any such other documents in any other manner
except for any such amendment, supplement or modification that (i) becomes
effective after the Closing Date and (ii) could not reasonably be expected to
have a Material Adverse Effect.
 
Section 6.16.        Amendments to Organizational Documents. Amend, modify or
supplement any Organizational Document of any Group Member, in any manner that
could be materially adverse to the rights of the Lender.
 
Section 6.17.        Material Contracts.  (a) Cancel or terminate any Assigned
Agreement or any other Material Contract or permit, consent to or accept any
cancellation or termination thereof (other than as expressly permitted, without
any requirement that consent to such cancellation or termination be provided by
any non-terminating party, pursuant to the existing terms of any such Assigned
Agreement or other Material Contract), (b) except as and to the extent set forth
in the SMH SPEADV Assignments, amend, modify or supplement in any manner any
term or provision of any Assigned Agreement or any other Material Contract or
give any consent, waiver or approval thereunder, (c) waive any default or
termination event under or any breach or violation of any term or condition of
any Assigned Agreement or any other Material Contract, (d) agree in any manner
to any other amendment, modification or change of any term or condition of any
Assigned Agreement or any other Material Contract, (e) fail to perform any of
its obligations under any Assigned Agreement or any other Material Contract, or
(f) take any other action in connection with any Assigned Agreement or any other
Material Contract that would impair the value of the interests or rights of any
Loan Party thereunder or the timing or amount of any payment made (or to be
made) by any Person to any Loan Party thereunder or that would otherwise be
adverse to the interests or rights of the Lender thereunder or under any Consent
and Agreement or with respect to any of the foregoing.

 
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Section 6.18.        Terrorism Sanctions Regulations.  Become a Person described
or designated in the Specially Designated Nationals and Blocked Persons List of
the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order
or engage in any dealings or transactions with any such Person.
 
Section 6.19.        Management and Director Compensation.  Pay any management,
consulting or similar fee (excluding salary and bonus payments made to employees
in the ordinary course of business) to any Affiliate of any Loan Party or to any
officer, director or employee of any Loan Party or any Affiliate of any Loan
Party, except the payment of directors' fees in an aggregate amount not to
exceed $500,000 during any Fiscal Year of the Borrower; provided, however, the
Borrower shall not, and shall not permit any of its Subsidiaries to, pay any
such directors' fees if a Default or Event of Default shall have occurred and be
continuing or would result from any such payment.
 
Section 6.20.        Swap Contracts.  Enter into any Swap Contract, except Swap
Contracts that are reasonably acceptable to the Lender and which (a) hedge or
mitigate risks to which the Borrower or any Subsidiary of the Borrower has
actual exposure (other than those in respect of Equity Interests), and (b)
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower or any
Subsidiary of the Borrower.
 
Section 6.21.        Margin Stock.  Use any of the proceeds of the Loan to
purchase or carry any Margin Stock in violation of Regulation T, Regulation U or
Regulation X.
 
Section 6.22.        Accounts.
 
(a)        Establish or maintain any deposit account, securities account or
commodity account with any Person, other than (i) the SMHG Operating Accounts,
(ii) the Clearing Accounts in effect on the date hereof, (iii) the L/C
Collateral Account in effect on the date hereof, and (iv) the Existing Accounts;
 
(b)        hold or maintain cash or any other assets or properties in the
Existing Accounts in an aggregate amount which at any time after the Concept
Capital Division Disposition exceeds $400,000; or
 
(c)        cause (or permit SMH SPEADV to cause) any Assigned Agreement Payment
made to the Borrower and/or SMH SPEADV to be initially deposited or transferred
into any deposit account, securities account or other account other than the
Assigned Agreement Payment Escrow Account.

 
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Section 6.23.        SMHG - Salient Intercreditor Agreement.  Amend, modify or
supplement in any respect, the SMHG - Salient Intercreditor Agreement.
 
ARTICLE VII

 
EVENTS OF DEFAULT
 
Section 7.01.        Events of Default.  If any of the following events shall
occur and be continuing:
 
(a)        the Borrower shall fail to pay any principal of the Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on the Loan, or any other amount payable hereunder or under any other Loan
Document, within three (3) Business Days after any such interest or other amount
becomes due in accordance with the terms hereof; or
 
(b)        any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made; or
 
(c)        any Group Member shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 5.04(a) (with respect
to the Borrower only), Section 5.07(a), Section 5.16, Section 5.17 or Article VI
of this Agreement or Section 5.05 or Section 5.07(b) of the Guarantee and
Security Agreement; or
 
(d)        any Group Member shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of thirty (30) days after notice
to the Borrower from the Lender; or
 
(e)        any Group Member shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but excluding
the Loan) on the scheduled or original due date with respect thereto; or (ii)
default in making any payment of any interest on any such Indebtedness when the
same becomes due and payable; or (iii) default in the observance or performance
of any other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder
or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable; or

 
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(f)        (i) any Group Member shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or any Group Member shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Group Member any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of sixty (60) days; or (iii) there shall
be commenced against any Group Member any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or (iv) any Group Member shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) any Group Member shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
 
(g)        (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Lender, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Lender is likely
to, incur any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could, in the sole judgment of the Lender, reasonably be
expected to have a Material Adverse Effect; or
 
(h)        one or more judgments or decrees for the payment of money in an
aggregate amount in excess of $250,000 shall be rendered against any Group
Member or any combination thereof and the same shall remain undischarged for a
period of thirty (30) consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of any Group Member to enforce any such
judgment; or
 
(i)        any non-monetary judgment or order shall be rendered against any
Group Member that could reasonably be expected to have a Material Adverse
Effect, and there shall be any period of ten (10) consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or

 
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(j)        any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be perfected, enforceable and of the same effect and priority purported
to be created thereby; or
 
(k)       the guarantee of any Loan Party contained in Article II of the
Guarantee and Security Agreement shall cease, for any reason, to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
 
(l)        The SEC or any Self-Regulatory Organization has notified the SIPC
pursuant to Section 5(a)(1) of the SIPA of facts which indicate that the
Borrower or any other Loan Party is in or is approaching financial difficulty,
or the SIPC shall file an application for a protective decree with respect to
the Borrower, or such other Loan Party under Section 5(a)(3) of the SIPA; or
 
(m)      The SEC or other Governmental Authority shall revoke or suspend the
license or authorization of the Borrower or any other Loan Party under Federal
or state law to conduct business as a securities broker-dealer (and such license
or authorization shall not be reinstated within five (5) days), or the Borrower
or any other Loan Party shall be suspended or expelled from membership in FINRA
or any other Self-Regulatory Organization or securities exchange; or
 
(n)       there shall occur in the judgment of the Lender any Material Adverse
Change; or
 
(o)       except to the extent expressly permitted under this Agreement, any of
the Assigned Agreements shall be terminated by any party thereto or shall
otherwise cease for any reason to be in full force and effect, or any Loan Party
or any other party thereto shall so assert, or any failure by any Person to make
any payment required to be made to the Borrower or any other Loan Party or other
default shall occur and be continuing under any Assigned Agreement.
 
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitment shall immediately terminate and the Loan hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
and the other Loan Documents shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) the Lender may by notice to the Borrower declare the
Commitment to be terminated forthwith, whereupon the Commitment shall
immediately terminate; and (ii) the Lender may by notice to the Borrower,
declare the Loan hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.  Except
as expressly provided above in this Section, the Borrower waives presentment,
demand, protest, notice of acceleration, notice of intent to accelerate, and all
other notices of any kind.  If any Event of Default occurs and is continuing,
the Lender may exercise and all rights and remedies available to it under the
Loan Documents, and the Lender may apply all payments made in respect of any of
the Obligations, all funds on deposit in any Collateral Account or other account
pledged to the Lender under the Guarantee and Security Agreement, and all other
proceeds of Collateral, to the payment and performance of the Obligations in
such order and manner as the Lender may from time to time determine in its sole
discretion.

 
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ARTICLE VIII

 
MISCELLANEOUS
 
Section 8.01.        Amendments and Waivers.  Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 8.01.  The
Lender and each Loan Party to the relevant Loan Document may from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Lender may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences.  Any such waiver and any such amendment,
supplement or modification shall be binding upon the Loan Parties and the
Lender.  In the case of any waiver, the Loan Parties and the Lender shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
 
Section 8.02.        Notices; Electronic Communication.  
 
(a)          Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
 
(i)          if to the Borrower or any other Loan Party, to it at 600 Travis
Street, Suite 5800, Houston, Texas 77002, Attention of Rick Berry, Chief
Financial Officer (Facsimile No. 713.993.4611; Telephone No. 713.993.4614);
 
(ii)          if to the Lender, to Prosperity Bank at 777 Walker Street, Suite
L140, Houston, Texas 77002, Attention of Randall R. Reeves, President-Houston
Area (Facsimile No. 713.693.9259; Telephone No. 713.693.9251);
 
Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient).  Notices and other
communications delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

 
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(b)          Electronic Communications.
 
(i)          The Lender or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.
 
(ii)         Unless the Lender otherwise prescribes, (A) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (B) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (A) of notification that such notice or communication is
available and identifying the website address therefor.
 
(c)          Change of Address, Etc.  Each of the Borrower and the Lender may
change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.
 
(d)          Reliance by the Lender.  The Lender shall be entitled to rely and
act upon any notices (including telephonic borrowing requests) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  The Borrower shall
indemnify the Lender and Related Parties from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower.  All telephonic notices to
and other telephonic communications with the Lender may be recorded by the
Lender and each of the parties hereto hereby consents to such recording.
 
Section 8.03.       No Waiver; Cumulative Remedies; Enforcement.  No failure to
exercise and no delay in exercising, on the part of the Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
 
Section 8.04.        Survival.  All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of the Loan,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid.

 
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Section 8.05.        Expenses; Indemnity; Damage Waiver.  
 
(a)        Costs and Expenses.  The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lender and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Lender), and shall
pay all fees and time charges and disbursements for attorneys who may be
employees of the Lender, in connection with the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), and (ii) all out-of-pocket expenses incurred by the Lender
(including the fees, charges and disbursements of counsel), in connection with
any Default or the enforcement or protection of its rights (a) in connection
with this Agreement and the other Loan Documents, including its rights under
this section, or (b) in connection with the Loan, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of the Loan.
 
(b)        Indemnification by the Borrower.  The Borrower shall indemnify the
Lender and each of its Related Parties (each such Person being referred to
herein as an "Indemnitee") against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities, penalties, actions, judgments,
suits, costs, expenses, and disbursements (including the fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) the Loan
or the use or proposed use of the proceeds therefrom, (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned
or operated by any Group Member, or any Environmental Liability related in any
way to any Group Member, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by any
Group Member, and regardless of whether any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities, penalties, actions,
judgments, suits, costs, expenses or disbursements (x) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by any Group Member against an Indemnitee for breach in bad
faith of such Indemnitee's obligations hereunder or under any other Loan
Document, if such Group Member has obtained a final nonappealable judgment in
its favor on such claim as determined by a court of competent
jurisdiction.  Without limiting any provisions of this Agreement or of any other
Loan Document, it is the express intention of the parties hereto that each
Indemnitee shall be indemnified from and held harmless against any and all
losses, claims, damages, liabilities, penalties, actions, judgments, suits,
costs, expenses and disbursements (including the fees, charges and disbursements
of counsel) arising out of or caused in whole or in part by the ordinary
negligence of any Indemnitee.

 
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(c)        Waiver of Consequential Damages.  To the fullest extent permitted by
applicable law, the Borrower shall not assert, and the Borrower hereby
irrevocably and unconditionally waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
the Loan or the use of the proceeds thereof.  No Indemnitee shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.
 
(d)        Payments.  All amounts due under this Section 8.05 shall be payable
not later than ten (10) days after written demand therefor.  The agreements in
this Section 8.05 shall survive repayment of the Loan and all other amounts
payable hereunder.
 
Section 8.06.        Successors and Assigns; Participations and Assignments.
 
(a)        The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender and the Lender may not assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in accordance with
the provisions of subsection (b) of this Section, (ii) by way of participation
in accordance with the provisions of subsection (c) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (e) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (c) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
 
(b)        The Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of the Loan at the time owing to it) pursuant to documentation
acceptable to the Lender and the assignee.  From and after the effective date
specified in such documentation, such Eligible Assignee shall be a party to this
Agreement and, to the extent of the interest assigned by the Lender, have the
rights and obligations of the Lender under this Agreement, and the Lender shall,
to the extent of the interest so assigned, be released from its obligations
under this Agreement (and, in the case of an assignment of all of the Lender's
rights and obligations under this Agreement, shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.09, 2.10 and
8.05 with respect to facts and circumstances occurring prior to the effective
date of such assignment.  Upon request, the Borrower (at its expense) shall
execute and deliver a new or replacement Note to the Lender and the assignee,
and shall execute and deliver any other documents reasonably necessary or
appropriate to give effect to such assignment and to provide for the
administration of this Agreement after giving effect thereto.

 
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(c)        The Lender may at any time, without the consent of, or notice to, the
Borrower, sell participations to any Person (other than a natural person or the
Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of the Lender's rights and/or obligations
under this Agreement (including all or a portion of the Loan); provided that (i)
the Lender's obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible to the Borrower for the performance of
such obligations and (iii) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under this Agreement.  Any agreement or instrument pursuant to which the Lender
sells such a participation shall provide that the Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any  provision of this Agreement; provided that such agreement or
instrument may provide that the Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification that would (i)
postpone any date upon which any payment of money (other than a mandatory
prepayment) is scheduled to be made to such Participant, (ii) reduce the
principal, interest, fees or other amounts payable to such Participant
(provided, however, that the Lender may, without the consent of the Participant,
(A) amend any financial covenant hereunder (or any defined term used therein)
even if the effect of such amendment would be to reduce the rate of interest on
the Loan or to reduce any fee payable hereunder and (B) waive the right to be
paid interest at the Default Rate), or (iii) release any Guarantor from its
obligations under the Guarantee and Security Agreement.  Subject to subsection
(d) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Section 2.09 to the same extent as if it were the Lender and
had acquired its interest by assignment pursuant to subsection (b) of this
Section.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 8.07 as though it were the Lender.
 
(d)        A Participant shall not be entitled to receive any greater payment
under Section 2.09 or 2.10 than the Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower's prior written
consent.  A Participant that is not a "United States person" within the meaning
of Section 7701(a)(30) of the Code shall not be entitled to the benefits of
Section 2.10 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
provide to the Lender such tax forms prescribed by the IRS as are necessary or
desirable to establish an exemption from, or reduction of, U.S. withholding tax.
 
(e)        The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under the Term
Note, if any) to secure obligations of the Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party
hereto.

 
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Section 8.07.        Setoff.  If an Event of Default shall have occurred and be
continuing, each of the Lender and its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Lender and its
Affiliates to or for the credit or the account of the Borrower or any other Loan
Party against any and all of the obligations of the Borrower or such other Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to the Lender irrespective of whether or not the Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such other Loan Party may be contingent or
unmatured or are owed to a branch or office of the Lender different from the
branch or office holding such deposit or obligated on such indebtedness.  The
rights of the Lender and its Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that the Lender or
its Affiliates may have.  The Lender agrees to notify the Borrower promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
 
Section 8.08.        Counterparts; Integration; Effectiveness; Electronic
Execution.  This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.  This Agreement and the other Loan Documents, and any separate letter
agreements with respect to fees payable to the Lender, constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof.  Except as provided in Section 3.01, this Agreement
shall become effective when it shall have been executed by the Lender and when
the Lender shall have received counterparts hereof that, when taken together,
bear the signatures of each of the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed
counterpart of this Agreement.
 
Section 8.09.        Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
 
Section 8.10.        GOVERNING LAW; JURISDICTION, ETC.  
 
(a)        THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS.
 
(b)        THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS SITTING IN HARRIS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR
ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 
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(c)        THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
 
(d)        EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 8.02.  NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.
 
Section 8.11.        Acknowledgments.  The Borrower hereby acknowledges that:
 
(a)        it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
 
(b)        the Lender nor the Lender has no fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Lender, on one hand,
and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
 
(c)        no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby between the
Borrower and the Lender.

 
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Section 8.12.        Treatment of Certain Information; Confidentiality.
 
(a)        The Lender agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates' respective partners, directors,
officers, employees, agents, advisors and other representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any Self-Regulatory
Authority), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement,
(ii) any actual or prospective counterparty (or its advisors or representatives)
to any swap or derivative transaction relating to the Borrower and its
obligations, (iii) any rating agency, or (iv) the CUSIP Bureau Service or any
similar organization, (g) with the consent of the Borrower or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Lender or any of its
Affiliates on a nonconfidential basis from a source other than the Borrower.
 
For purposes of this Section, "Information" means all information received from
the Borrower or any of its Subsidiaries relating to the Borrower or any of its
Subsidiaries or any of their respective businesses, other than any such
information that is available to the Lender on a nonconfidential basis prior to
disclosure by the Borrower or any of its Subsidiaries, provided that, in the
case of information received from the Borrower or any of its Subsidiaries after
the date hereof, such information is clearly identified at the time of delivery
as confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
 
Section 8.13.        Interest Rate Limitation.  It is the intent of the Lender
and the Borrower to conform to and contract in strict compliance with all
applicable usury laws from time to time in effect.  Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the Highest Lawful Rate.  If
Lender shall receive interest in an amount that exceeds the Highest Lawful Rate,
the excess interest shall be applied to the principal of the Loan or, if it
exceeds such unpaid principal, refunded to the Borrower.  In determining whether
the interest contracted for, charged, or received by the Lender exceeds the
Highest Lawful Rate, such Person may, to the extent permitted by applicable law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.  The right to accelerate maturity of the Loan and the
other Obligations does not include the right to accelerate any interest which
has not otherwise accrued on the date of such acceleration, and the Lender does
not intend to charge or receive any unearned interest in the event of
acceleration.
 
Section 8.14.        Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
 
Section 8.15.        Time of the Essence.  Time is of the essence of this
Agreement and the other Loan Documents.

 
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Section 8.16.        WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
Section 8.17.        Electronic Execution of Assignments and Certain Other
Documents.  If expressly stated in such document, the words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
or in any amendment or other modification hereof (including waivers and
consents) shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act or any other similar state laws based on the
Uniform Electronic Transactions Act.
 
Section 8.18.        USA PATRIOT Act Notice.  The Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow the Lender to identify each Loan Party in accordance
with the Act.  The Borrower shall, promptly following a request by the Lender,
provide all documentation and other information that the Lender requests in
order to comply with its ongoing obligations under applicable "know your
customer" and anti-money laundering rules and regulations, including the Act.
 
Section 8.19.        Press Releases and Related Matters.  The Borrower agrees
that neither it nor any of its Affiliates will issue any press release or public
disclosure using the name of Prosperity Bank or any of its Affiliates or
referring to this Agreement or any of the other Loan Documents without at least
two (2) Business Days prior notice to Prosperity Bank and without the prior
written consent of Prosperity Bank unless (and only to the extent that) the
Borrower or such Affiliate is required to do so under applicable Requirements of
Law and then, in any event, the Borrower or such Affiliate will consult with
Prosperity Bank before issuing such press release or other public
disclosure.  The Borrower consents to the publication by the Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement.  The Lender reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.

 
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Section 8.20.        No Advisory or Fiduciary Responsibility.  In connection
with all aspects of each transaction contemplated hereby, the Borrower
acknowledges and agrees, and acknowledge its Affiliates' understanding,
that:  (i) the credit facility provided for hereunder and any related arranging
or other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document)
are an arm's-length commercial transaction between the Borrower and its
Affiliates, on the one hand, and the Lender, on the other hand, and the Borrower
is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, the Lender is and has been acting solely as a principal and is not
the financial advisor, agent or fiduciary, for the Borrower or any of its
Affiliates, stockholders, creditors or employees or any other Person; (iii) the
Lender has not assumed nor will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Lender has advised or is currently advising the
Borrower or any of its Affiliates on other matters) and the Lender has no
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; (iv) the Lender and its Affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Borrower and its Affiliates, and the Lender has no obligation
to disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Lender has not provided and will not provide any
legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate.  The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the Lender
with respect to any breach or alleged breach of agency or fiduciary duty.
 
Section 8.21.        Independence of Covenants.  All covenants and agreements
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants or agreements, the fact that
it would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant or agreement, shall not avoid the occurrence of
a Default or Event of Default if such action is taken or such condition exists.
 
Section 8.22.       ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

 
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.

SANDERS MORRIS HARRIS GROUP INC.
     
By:     
/s/ George L. Ball
 
Name:  
George L. Ball
 
Title:
Chief Executive Officer 
     
PROSPERITY BANK
     
By:
/s/ Randall R. Reeves
 
Name:
Randall R. Reeves
 
Title:
President-Houston Area

 
 

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