<PAGE>

                      SEVENTH AMENDMENT TO SECOND AMENDED
                          AND RESTATED LOAN AGREEMENT

     THIS SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
("Seventh Amendment") is made and entered into as of the 1st day of January,
2003, by and between Equus II Incorporated, a Delaware corporation, with offices
and place of business at 2929 Allen Parkway, Houston, Texas 77019 (hereinafter
called "Borrower") and Bank of America, N.A., a national banking association,
with offices at 700 Louisiana, Houston Texas 77002 (hereinafter called
"Lender"). For and in consideration of the mutual covenants and agreements
herein contained, Borrower and Lender hereby amend as of the date of this
Agreement that certain Second Amended and Restated Loan Agreement between
Borrower and Lender dated as of the 1st day of June, 1999, as previously amended
("Loan Agreement"), in the following respects:

        Section 1. Amendments to Loan Agreement.

               A. Section 1.1 is deleted and the following is substituted in its
          place:

                    1.1 Indebtedness. Upon the terms and conditions hereinafter
               set forth, the Lender agrees to lend to and/or issue letters of
               credit for the account of Borrower in an aggregate of up to
               $16,494,989.00 outstanding at any time as evidenced by Revolving
               Facility A to be extended to the Borrower by the Lender as more
               specifically described in Section 1.3.

               B. Section 1.2 is amended to delete the definitions of "Facility
          A Note" and "Maturity Date" and replace them with the following:

               "Facility A Note" means the Facility A promissory note of the
               Borrower in the maximum principal amount of $16,494,989.00, in
               the form attached as Exhibit "1.3.2" to the Seventh Amendment.

               "Maturity Date" means February 14, 2003.

                                       1

<PAGE>

          C. Section 1.3 and 1.3(a) is deleted and the following is substituted
     in its place:

               1.3 Revolving Facility A. The Lender, during the period from the
          date of this Agreement until the Maturity Date, subject to the terms
          and conditions of this Agreement, and subject to the condition that at
          the time of each borrowing and the issuance of each Credit hereunder
          no Default or Event of Default has occurred and is then continuing and
          that the representations and warranties given by the Borrower in
          Section 2 as of the date of this Agreement shall remain true and
          correct in all material respects (except for representations and
          warranties (i) which are made as of a particular date or (ii) as to
          which the facts which gave rise to the representation or warranty have
          changed as a result of circumstances or transactions which are
          contemplated or permitted pursuant to this Agreement):

               (a) agrees to make Loans to Borrower pursuant to a revolving line
          of credit up to but not in excess of an aggregate principal amount
          outstanding at any time of $16,494,989.00, provided the aggregate
          amount of Loans outstanding pursuant to this Section 1.3, when
          combined with the amount of outstanding Credits, shall not exceed the
          lesser of (i) $16,494,989.00 and (ii) the Borrowing Base. Borrower
          shall make written request for each Loan pursuant to Revolving
          Facility A pursuant to a loan request in substantially the form of
          Exhibit "1.3.1" attached hereto. If Borrower's written request
          therefor is received by 1:00 p.m., Lender shall make each such Loan
          available to Borrower on the same Business Day Lender receives such
          request. If Borrower's loan request with respect to any such Loan is
          received after 1:00 p.m., Lender may defer the making of such Loan to
          the next Business Day. Each Loan shall be in an amount of not less
          than $100,000.

          D. Section 1.5 is hereby deleted.

     Section 2. Closing.

     The closing of the transactions contemplated by this Seventh Amendment is
subject to the satisfaction of the following conditions.

     2.1 Counsel to Lender. All legal matters incident to the transactions
herein contemplated shall be satisfactory to Gardere Wynne Sewell LLP, counsel
to the Lender.

     2.2 Required Documents.

          (a) The Lender shall have received certified copies of resolutions of
     the Board of Directors of the Borrower in form and substance satisfactory
     to Lender with respect to

                                       2


<PAGE>

authorization of this Seventh Amendment, the Facility A Note of the Borrower
dated the date hereof in favor of the Lender in the original principal amount of
$16,494,989.00 (the "Note"), and the Ratification of Security Agreement-Pledge
dated as of the date hereof (the "Ratification of Security Agreement").

          (b) The Lender shall have received a certificate of the Secretary of
     the Borrower of the names of officers of the Borrower to sign this Seventh
     Amendment, the Note, the Ratification of Security Agreement and the other
     instruments or certificates related hereto together with the true
     signatures of such officers.

          (c) The Lender shall have received fully executed copies of the
     Seventh Amendment, the Notes, and the Ratification of Security Agreement.

          (d) The Lender shall have received originals of all certificates,
     notes or other instruments subject to the Security Agreement - Pledge dated
     as of March 18, 1996 between Borrower and Lender, as ratified by the
     Ratification of Security Agreement.

     Section 3. Ratification. Except as amended hereby, the Loan Agreement shall
remain unchanged and the terms, conditions, representations, warranties, and
covenants of said Loan Agreement and the Security Instruments, including but not
limited to the Security Agreement-Pledge, are true as of the date hereof, are
ratified and confirmed in all respects and shall be continuing and binding upon
the parties.

     Section 4. Defined Terms. All terms used in this Seventh Amendment which
are defined in the Loan Agreement shall have the same meaning as in the Loan
Agreement, except as otherwise indicated in this Seventh Amendment.

     Section 5. Multiple Counterparts. This Seventh Amendment may be executed by
the parties hereto in several separate counterparts, each of which shall be an
original and all of which

                                       3

<PAGE>

taken together shall constitute one and the same agreement.

     Section 6. Applicable Law. This Seventh Amendment shall be deemed to be a
contract under and subject to, and shall be construed for all purposes in
accordance with the laws of the State of Texas.

     Section 7. Final Agreement. THE WRITTEN LOAN AGREEMENTS IN CONNECTION WITH
THIS SEVENTH AMENDMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWER AND
THE LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE BORROWER AND THE LENDER. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE LENDER AND THE BORROWER.

     IN WITNESS WHEREOF, the parties have caused this Seventh Amendment to be
executed by their duly authorized officers as of the 1st day of January, 2003.

                                                EQUUS II INCORPORATED


                                                By: /s/ Nolan Lehmann
                                                   -----------------------------
                                                Name: Nolan Lehmann
                                                Title: President


                                                BANK OF AMERICA, N.A.


                                                By: /s/ David H. Strickert
                                                   -----------------------------
                                                Name: David H. Strickert
                                                Title: Senior Vice President


                                       4

<PAGE>

                                PROMISSORY NOTE

                               [Facility A Note]

$16,494,989                                                     January 1, 2003

     FOR VALUE RECEIVED, after date, without grace, in the manner, on the dates
and in the amounts so herein stipulated, the undersigned, EQUUS II INCORPORATED,
a Delaware corporation, acting by and through its duly authorized officer
("Borrower"), PROMISES TO PAY TO THE ORDER OF BANK OF AMERICA, N.A. ("Lender"),
in Houston, Harris County, Texas, the sum of SIXTEEN MILLION FOUR HUNDRED NINETY
FOUR THOUSAND NINE HUNDRED EIGHTY NINE AND 00/100 DOLLARS ($16,494,989) or, if
less, the aggregate unpaid principal amount of advances made by Lender to
Borrower pursuant to this Note, in lawful money of the United States of America,
which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment, and to pay interest on the unpaid principal
amount from date until maturity at a rate equal to the Stated Rate (as defined
in the Loan Agreement described herein), not to exceed the maximum non-usurious
interest rate permitted by applicable law from time to time in effect as such
law may be interpreted, amended, revised, supplemented or enacted ("Maximum
Rate"), provided that if at any time the Stated Rate exceeds the Maximum Rate
then interest hereon shall accrue at the Maximum Rate. In the event the Stated
Rate subsequently decreases to a level which would be less than the Maximum Rate
or if the Maximum Rate applicable to this Note should subsequently be changed,
then interest hereon shall accrue at a rate equal to the applicable Maximum Rate
until the aggregate amount of interest so accrued equals the aggregate amount of
interest which would have accrued at the Stated Rate without regard to any usury
limit, at which time interest hereon shall again accrue at the Stated Rate. This
Note is payable as follows:

          The entire balance of principal and accrued interest shall be due and
     payable on the 14th day of February, 2003.

     It is agreed that time is of the essence of this agreement. In the event of
default in the payment of any installment of principal or interest when due or
in the event of any other default hereunder, Lender may accelerate and declare
this Note immediately due and payable without notice. Any failure to exercise
this option shall not constitute a waiver by Lender of the right to exercise the
same at any other time.

     In the event of default in the making of any payment herein provided,
either of principal or interest, or in the event this Note is declared due,
interest shall accrue at Prime Rate plus 2% not to exceed the Maximum Rate.

     Borrower hereby agrees to pay all expenses incurred, including reasonable
attorneys' fees, all of which shall become a part of the principal hereof, if
this Note is placed in the hands of an attorney for collection or if collected
by suit or through any probate, bankruptcy or any other legal proceedings.

     Interest charges will be calculated on amounts advanced hereunder on the
actual number of days these amounts are outstanding on the basis of a 360-day
year, except for calculations of the Maximum Rate which will be on the basis of
a 365-day or 366-day year, as is applicable. It

                                       1

<PAGE>

is the intention of the parties hereto to comply with all applicable usury laws;
accordingly, it is agreed that notwithstanding any provision to the contrary in
this Note, or in any of the documents securing payment hereof or otherwise
relating hereto, no such provision shall require the payment or permit the
collection of interest in excess of the Maximum Rate. If any excess of interest
in such respect is provided for, or shall be adjudicated to be so provided for,
in this Note or in any of the documents securing payment hereof or otherwise
relating hereto, then in such event (1) the provisions of this paragraph shall
govern and control, (2) neither Borrower, endorsers or guarantors, nor their
heirs, legal representatives, successors or assigns nor any other party liable
for the payment hereof, shall be obligated to pay the amount of such interest to
the extent that it is in excess of the Maximum Rate, (3) any such excess which
may have been collected shall be either applied as a credit against the then
unpaid principal amount hereof or refunded to Borrower, and (4) the provisions
of this Note and any documents securing payment of this Note shall be
automatically reformed so that the effective rate of interest shall be reduced
to the Maximum Rate. For the purpose of determining the Maximum Rate, all
interest payments with respect to this Note shall be amortized, prorated and
spread throughout the full term of the Note so that the effective rate of
interest on account of this Note is uniform throughout the term hereof.

     Borrower agrees that the Maximum Rate to be charged or collected pursuant
to this Note shall be the applicable indicated rate ceiling as defined in the
Texas Finance Code, as supplemented by Article 1D.003 of the Texas Credit Title,
provided that Lender may rely on other applicable laws, including without
limitation laws of the United States, for calculation of the Maximum Rate if the
application thereof results in a greater Maximum Rate. Except as provided above,
the provisions of this Note shall be governed by the laws of the State of Texas.

     Each maker, surety, guarantor and endorser (i) waives demand, grace,
notice, presentment for payment, notice of intention to accelerate the maturity
hereof, notice of acceleration of the maturity hereof and protest, (ii) agrees
that this Note and the liens securing its payment may be renewed, and the time
of payment extended from time to time, without notice and without releasing any
of the foregoing, and (iii) agrees that without notice or consent from any
maker, surety, guarantor, or endorser, Lender may release any collateral which
may from time to time be pledged to secure repayment of this Note, or may
release any party who might be liable for this Note. Borrower grants to Lender a
lien on any of Borrower's funds which may from time to time be deposited with
Lender.

     Borrower may prepay this Note, in whole or in part, at any time prior to
maturity without penalty, and interest shall cease on any amount prepaid. Any
partial prepayment shall be applied toward the payment of the principal
installments last maturing on the Note, that is, in the inverse order of
maturity, without reducing the amount or time of payment of the remaining
installments.

     The principal of this Note represents funds which Lender will advance to
Borrower from time to time upon request of Borrower. Any part of the principal
may be repaid by Borrower and thereafter reborrowed, provided the outstanding
principal amount of this Note shall never exceed the face amount of this Note.
Each advance shall constitute a part of the principal hereof and shall bear
interest from the date of the advance. The provisions of Tex. Rev. Civ. Stat.
Ann. art. 5069-15.01, et seq., as may be amended, shall not apply to this Note
or to any of the security documents executed in connection with this Note.

                                       2

<PAGE>

     This Note is the Facility A Note referred to in, is subject to, and is
entitled to the benefits of, the Second Amended and Restated Loan Agreement
dated June 1, 1999 between Borrower and Lender, as that Second Amended and
Restated Loan Agreement may be amended, modified or supplemented from time to
time (the "Loan Agreement"). The Loan Agreement contains, among other things,
provisions for the acceleration of the maturity hereof upon the occurrence of
certain stated events. This Note is given in replacement and extension of those
certain Revolving Note A and Revolving Note B of Borrower in favor of Lender
previously delivered pursuant to the Loan Agreement. The liens securing the
payment of such prior Notes are not released but are hereby ratified and carried
forward to secure this Note.

     This Note is entitled to the benefits and security afforded by the Security
Agreement-Pledge dated March 18, 1996 between Borrower and Lender, as that
Security Agreement-Pledge may be ratified, amended, modified or supplemented
from time to time. This Note is subject to the provisions contained in the
foregoing security instrument which, among other things, provides for
acceleration of the maturity hereof upon the occurrence of certain events.

     This Note is given in renewal and extension, but not novation or discharge,
of that certain promissory note dated October 1, 2002, executed by Borrower and
payable to Lender in the amount of $22,500,000.00 The liens securing the payment
of the prior promissory note are not released but are hereby ratified and hereby
carried forward to secure this Note.

     Borrower represents and warrants that this loan is for business,
commercial, investment or similar purpose and not primarily for personal,
family, household or agricultural use, as such terms are used in Chapter One of
the Texas Credit Code.

                                        EQUUS II INCORPORATED,
                                        a Delaware corporation


                                        By:   /s/ Nolan Lehmann
                                           -------------------------------
                                           Name:  Nolan Lehmann
                                           Title: President

                                        3

<PAGE>

                    RATIFICATION OF SECURITY AGREEMENT-PLEDGE

     This Ratification of Security Agreement-Pledge ("Ratification") is made and
entered into as of the 1st day of January, 2003, by and between EQUUS II
INCORPORATED ("Pledgor") with offices and place of business at 2929 Allen
Parkway, Suite 2500, Houston, Texas 77019 and BANK OF AMERICA, N.A., with
offices at 700 Louisiana, Houston, Texas 77002 (hereinafter called "Lender").
For and in consideration of the mutual covenants and agreements herein
contained, Pledgor and Lender hereby ratify as of the date of this Ratification
that certain Security Agreement-Pledge ("Security Agreement") between Pledgor
and Lender dated the 18th day of March, 1996, as that Security Agreement has
been amended or modified from time to time, and agree that the Collateral, as
such term is defined in such Security Agreement, shall secure Pledgor's
obligations pursuant to (i) that certain Facility A Note dated January 1, 2003
in the maximum principal amount of $16,494,989; and (ii) that certain Facility C
Note dated October 1, 2002, in the maximum principal amount of $100,000,000.

     Except as expressly modified hereby, the Security Agreement shall remain
unchanged and the terms, conditions, representations, warranties, and covenants
of said Security Agreement are true as of the date hereof, are ratified and
confirmed in all respects and shall be continuing and binding upon the parties.

     This Ratification may be executed by the parties hereto in several separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.

     This Ratification shall be deemed to be a contract under and subject to,
and shall be construed for all purposes in accordance with the laws of the State
of Texas.

                                       1

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Ratification to be
executed by their duly authorized officers as of the 1st day of January, 2003.

                                        EQUUS II INCORPORATED


                                        By: /s/ Nolan Lehmann
                                           ---------------------------
                                           Name:  Nolan Lehmann
                                           Title: President

                                        Address:

                                        2929 Allen Parkway, Suite 2500
                                        Houston, Texas 77019

                                        BANK OF AMERICA, N.A.


                                        By: /s/ David H. Strickert
                                           ----------------------------
                                           Name:  David H. Strickert
                                           Title: Senior Vice President

                                        Address:

                                        700 Louisiana
                                        Houston, Texas 77002




                                       2