AMENDMENT
NUMBER 4

     

    THIS
AMENDMENT NUMBER 4, dated as of September 30, 2009 (as amended, restated,
supplemented or otherwise modified from time to time, this "Agreement"), by and
among SANDERS MORRIS HARRIS GROUP INC., a Texas corporation (the "Borrower") and
PROSPERITY BANK, as lender (the "Lender") (each of the
Borrower and the Lender are referred to herein from time to time individually as
a "Party" and
collectively as the "Parties"),

     

    RECITALS

     

    WHEREAS,
the Parties entered into that certain Credit Agreement, dated as of May 11, 2009
(as amended by Amendment No. 1 to Credit Agreement dated as of June 23, 2009,
Amendment No. 2 to Credit Agreement dated as of July 15, 2009, Acknowledgement
and Agreement dated as of September 14, 2009, and Amendment No. 3 to Credit
Agreement dated as of September 15, 2009; and as may be further amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
and that certain related Guarantee and Security Agreement, dated as of May 11,
2009 (as amended, supplemented or otherwise modified from time to time, the
"Security
Agreement;

     

    WHEREAS,
Sections 5.18, 6.01, and 6.22 of the Credit Agreement contain a deadline which
the parties wish to modify;

     

    WHEREAS,
Borrower has requested that Lender agree to enter into this Agreement to address
matters relating to the foregoing items as and to the extent provided
herein.

     

    NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as
follows:

     

    AGREEMENT

     

    Section
1.          Definitions. Unless
otherwise specified herein, capitalized terms used but not defined herein shall
have the meanings specified in the Credit Agreement or Security Agreement (as
applicable).

     

    Section
2.          Recitals. The
recitals to this Agreement are each hereby incorporated by reference into and
made a part of this Agreement. Borrower hereby acknowledges and agrees that each
of the recitals to this Agreement is true and correct in all
respects.

     

    Section
3.          Amendments to Credit
Agreement. The Credit Agreement is hereby amended, in each case effective
as of September 30, 2009, as follows:

     

    (a)          Amendment to Section 5.18(a). Section
5.18(a) of the Credit Agreement is hereby amended and restated in its entirety
as follows

     

    "(a)      Consummate
in full to the satisfaction of the Lender the Concept Capital Division
Disposition on or prior to April 30, 2010 (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)          Amendment to
Section 6.01(c). Section 6.01(e)
of the Credit Agreement is hereby amended and restated in its entirety as
follows

     

    "(e)      Consolidated Short Sales
Exposure. Permit (i) Consolidated Short Sales Exposure at any time during
the period from the Closing Date until April 30, 2010 to be greater than
$1,000,000, or (ii) Consolidated Short Sales Amount at any time during the
period from May 1, 2010 until the Maturity Date to be greater than
$1,000,000."

     

    (c)           Amendment to Section
6.22(b). Section 6.22(b) of the Credit Agreement is hereby amended and
restated in its entirety as follows

     

    "(b)      hold
or maintain cash or any other assets or properties in the Existing Accounts in
an aggregate amount which (i) at any time from the Closing Date through April
30, 2010 exceeds $500,000, or (ii) at any time from May 1, 2010 through the
Maturity Date exceeds $400,000; or"

     

    Section
4.          Conditions to
Effectiveness. This Agreement shall become effective on the date on which
each of the following conditions shall have been satisfied, in each case as
determined by Lender:

     

    (a)          receipt
by Lender of this Agreement, in form and substance satisfactory to Lender, duly
executed by Borrower; and

     

    (b)          payment
by Borrower of all costs and expenses incurred by Lender (including, without
limitation, attorneys' fees) from, as a result of or in connection with the
preparation, negotiation, execution and delivery of this Agreement.

     

    Section
5.          Representations and
Warranties. Borrower hereby represents and warrants to Lender
that:

     

    (a)          Loan Document
Representations and Warranties. Other than as expressly provided herein,
each of the representations and warranties of each Loan Party contained in each
Loan Document are true and correct on and as of the date hereof, both before and
after giving effect to this Agreement (except to the extent any such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date).

     

    (b)          No Default. No
Default or Event of Default has occurred and is continuing.

     

    (c)          Perfection of Liens.
The security interests and hens created under the Security Documents constitute
valid, enforceable, perfected, first priority security interests in all of the
Collateral.


    
      
         


      

      
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    (d)          Organizational
Action; Enforceability. This Agreement has been duly authorized by
all necessary organizational action of Borrower and constitutes the legal, valid
and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.

     

    (e)          Set-off, Counterclaims and
Other Defenses. None of Borrower nor any other Loan Party has any rights
of set-off, counterclaims, claims, defenses or other causes of action
originating on or before the date hereof against the Lender arising out of or
relating to this Agreement, the Credit Agreement, any other Loan Document, or
otherwise.

     

    (f)          No Consent. No
consent or authorization of, filing with, or other act by or in respect of, any
arbitrator or Governmental Authority and no consent of any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.

     

    Section
6.         Validity of Obligations.
Guarantee, Liens and Loan Documents. Borrower acknowledges and agrees
that Borrower is indebted to Lender for all of the Obligations, without any
right of rescission, cross complaint, claim, demand, defense, counterclaim or
offset of any kind or nature whatsoever that can be asserted to reduce or
eliminate all or any part of the Obligations. Borrower hereby ratifies and
reaffirms the validity, enforceability and binding nature of all of the
Obligations. Borrower hereby further ratifies, acknowledges, confirms and agrees
that the Security Agreement and each of the Liens and guarantees created
thereunder is, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects.

     

    Section
7.          No Reliance on
Lender. Borrower understands that this Agreement is a legally binding
Agreement that affects or may affect the rights and interests of Borrower.
Borrower hereby acknowledges and agrees that (a) it has received legal advice
from its counsel in connection with the negotiation, preparation, execution,
delivery, and performance of this Agreement; (b) it entered into this Agreement
freely and voluntarily, without coercion, duress, distress or undue influence by
Lender, any of its Related Parties, or any other Person or any of its or their
respective directors, officers, partners, agents or employees or otherwise; and
(c) it has had a full and fair opportunity to consider all reasonable
alternatives to entering into this Agreement, and has made a business judgment
that this Agreement is an appropriate and fair agreement.

     

    Section
8.         Interpretation. If
any term or provision of this Agreement requires judicial or other
interpretation, the Parties hereby agree that any court or any other Person
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against any Party by reason of the rule
of construction that a document is to be construed more strictly against the
Party who itself or through its agent prepared the same.

     

    Section
9.         Costs
and Expenses, Without limiting Section 8.05 of the
Credit Agreement or Section 8.06 of the
Security Agreement, Borrower shall pay on demand and in full and in immediately
available funds any and all fees, costs and expenses that are paid or incurred
by the Lender, including, without limitation, attorneys' fees, arising from, out
of or in connection with the preparation, negotiation, execution, delivery and
performance of this Agreement,


    
      
         


      

      
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    Section
10.        Term. This Agreement
shall remain in effect until all of the Obligations have been indefeasibly paid
and performed in full and all Loan Documents have been satisfied and
terminated.

     

    Section
11.        Further Assurances.
Borrower hereby agrees to execute any further agreements, documents and
instruments and to take such other actions as may be reasonably requested by
Lender to more fully effect the purposes of this Agreement.

     

    Section
12.        Notices. All notices, requests and other communications
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given to the Lender and Borrower in the manner and at
their respective address for notices provided for in Section 8.02 of the Credit
Agreement.

     

    Section
13.        No Duties of Lender.
The rights and remedies of the Lender under this Agreement are solely for its
protection and nothing herein contained shall create or impose on the Lender any
duties of any kind with respect to Borrower or any assets or property of
Borrower heretofore or hereafter received by the Lender.

     

    Section
14.        Acknowledgment; Release of
Claims; Covenant Not to Sue. As a material inducement to the Lender to
enter into this Agreement, Borrower, for and on behalf of itself and each of its
respective Affiliates, permitted successors, permitted assigns, heirs,
representatives, beneficiaries, devisees, executors, and administrators (each, a
"Borrower
Party") (a) does hereby acknowledge and consent to the terms and
provisions of, and the execution, delivery and performance of, this Agreement,
to the Credit Agreement, and to the other Loan Documents, in all respects and
for all purposes; (b) does hereby remise, release, acquit, satisfy and forever
discharge the Lender, each of its Affiliates, each of its and their respective
successors and assigns, and each of its and their respective past, present and
future officers, directors, employees, agents, attorneys, representatives,
participants, heirs, devisees, executors, administrators, successors and assigns
(collectively, the "Released Parties"),
from any and all liabilities, obligations, expenses, damages, judgments,
actions, claims, demands and causes of action of any kind or nature whatsoever,
whether at law or in equity, whether now existing or hereafter arising and
whether known or unknown, which the Borrower or any other Borrower Party may now
or hereafter have by reason of any action, inaction, matter, cause or thing,
occurring on or prior to the date of this Agreement, arising out of, in
connection with or relating to (i) any of the Collateral or any of the
Obligations, including, but not limited to, the administration or funding
thereof, (ii) any Loan Document (or any of the transactions contemplated
thereby) or the indebtedness evidenced and secured thereby, and (iii) any other
agreement or transaction between or among any Borrower Party and the Lender or
any of its or their respective Affiliates of such parties relating to the Loan
Documents; and (c) does hereby covenant and agree never to institute or cause to
be instituted or continue prosecution of any suit or other form of action or
proceeding of any kind or nature whatsoever against any Released Party, by
reason of or in connection with any of the foregoing matters, claims or causes
of action, provided, however, that the
foregoing release and covenant not to sue shall not apply to any claims arising
after the date of this Agreement with respect to acts or events that occur after
the date of this Agreement.

     

    
      
        
        

      

      
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    Section
15.       Entire Agreement.
This Agreement constitutes and expresses the entire understanding between the
Parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, inducements or conditions, whether express
or implied, oral or written, with respect to the subject matter
hereof.

     

    Section
16.       Loan Document. This
Agreement shall be a Loan Document in all respects and for all purposes and each
reference in the Credit Agreement, the Security Agreement or any other Loan
Document to "Loan Document" or "Loan Documents" shall, notwithstanding any term
or provision in this Agreement, the Credit Agreement, the Security Agreement or
any other Loan Document, include and be a reference to this
Agreement.

     

    Section
17.        Amendments. This Agreement may not be amended, supplemented
or otherwise modified in any manner other than by an agreement in writing signed
by the Parties.

     

    Section
18.        GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

     

    Section
19.       Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the Borrower and its successors and permitted assigns, and upon the Lender and
its successors and assigns, provided that none of
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated in whole or in part to any Person without the prior
written consent of the Lender.

     

    Section
20.        Severability. The
provisions of this Agreement are independent of and separable from each other.
If any provision hereof shall for any reason be held invalid or unenforceable,
it is the intent of the parties that such invalidity or unenforceability shall
not affect the validity or enforceability of any other provision hereof, and
that this Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein; provided that the Parties shall
endeavor in good faith and using commercially reasonable efforts to replace such
invalid or unenforceable provisions with a substantially similar provisions that
is valid and enforceable.

     

    Section
21.       Execution in
Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement by telecopier or in PDF format via electronic mail
shall be effective as delivery of an original counterpart of this
Agreement.

     

    Section
22.       No Waiver; Cumulative
Remedies; Enforcement. Except as expressly set forth herein, 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.


    
      
         


      

      
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    Section
23.        Independence of
Covenants. All covenants and agreements hereunder and under the Loan
Documents 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 an Event of Default if such action is taken or such condition
exists.

     

    [Signatures
on following page]


    
      
         


      

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

     

    
      
        
          
            
              
                
                  
                    	
                            SANDERS
      MORRIS HARRIS GROUP INC.

                          
	 
      	 
      	 
      
	
                            By:

                          	 
      
	 
      	
                            Name: 

                          	 
      
	 
      	
                            Title:

                          	 
      
	 
      	 
      	 
      
	
                            PROSPERITY
      BANK

                          
	 
      	 
      
	
                            By:

                          	
                             

                          
	 
      	
                            Name: 

                          	
                            Randall
      R. Reeves

                          
	 
      	
                            Title:

                          	
                            President-Houston
      Area