Exhibit
10.05

     

    EXECUTION
VERSION


     

    EMPLOYMENT
AGREEMENT

     

    This
EMPLOYMENT AGREEMENT (as amended, supplemented or extended from time to time,
this “Agreement”) is entered into as of May 10, 2005,
between the The Edelman Financial Center, LLC, a Delaware limited liability
company (the “Employer”), and Fredric M. Edelman (the “Employee”).

     

    WITNESSETH

     

    WHEREAS,
pursuant to a Reorganization and Purchase Agreement dated as of May 10, 2005
(the “Purchase Agreement”), among the Employer, the Employee,
Sanders Morris Harris Group Inc. (“SMH”), and The Edelman Financial Center,
Inc. (“EFC”), SMH will purchase in three
related transactions an initial 51% direct membership interest, and later, an
additional 25% direct membership interest and an additional 24% indirect
membership interest, in the Employer;

     

    WHEREAS,
it is a condition precedent to the obligation of SMH to consummate the
transactions contemplated by the Purchase Agreement that the Employee enter into
an employment agreement with the Employer in the form hereof;

     

    WHEREAS,
SMH and the Employer recognize the importance of the Employee to the Employer
and to the Employer’s ability to obtain and maintain relationships with the
clients of the Employer after giving effect to the transactions contemplated in
the Purchase Agreement (the “Reorganization”);

     

    WHEREAS,
SMH and the Employer wish to be assured that the Employee will not compete with
the Employer and its Affiliates during his period of employment and for five
years thereafter or solicit any clients or customers of the Employer during such
period and will not, by such competition or solicitation, damage the Employer’s
goodwill among its clients and the general public;

     

    WHEREAS,
after giving effect to the Reorganization, Employee will have an indirect
ownership interest in the Employer through his ownership of all of the used and
outstanding capital stock of EFC (the “Equity Participation”);

     

    WHEREAS,
it is in the best interest of Employee, that SMH consummate the Reorganization;
and

     

    WHEREAS,
Employee desires to accept employment on the terms of this Agreement and to
induce SMH to consummate the Reorganization.

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
valuable consideration, including, without limitation, Employee’s Equity
Participation, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereby agree as
follows:

     

    1.           Employment and Employment Period. (a)
Position and
Duties. (i) Subject to the terms and conditions of this Agreement, the
Employer agrees to employ Employee, and Employee agrees to remain in the employ
of the Employer, during the Employment Period referred to in Section
1(b);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)           During
the Employment Period, Employee will serve as the Employer’s Chief Executive
Officer with respect to the business of the Employer in substantially the same
capacity (including authority and duties) as Employee served with respect to the
business of EFC immediately prior to the Initial Closing Date (as defined in the
Purchase Agreement); provided,
that (A) the authority of the Employee shall be subject to the authority
of the Board of Managers as and to the extent set forth in the Limited Liability
Company Agreement of the Employer, and (B) Employee shall have such other powers
and perform such additional duties as may be assigned or delegated to Employee
from time to time by the Board of Managers of the Employer (the “Board”), so long as such duties and authority
are substantially consistent with the position of Chief Executive Officer of a
company of similar size and nature;

     

    (iii)          At
all times during the Employment Period, Employee agrees to (A) perform all
services related to Employee’s employment hereunder faithfully and diligently
and to discharge the responsibilities thereof to the best of Employee’s ability,
(B) devote full business time and attention and energies to the duties of
Employee’s employment under this Agreement, and (C) use Employee’s best efforts
to promote the business of the Employer. Notwithstanding the foregoing, Employee
may continue to serve on any board of directors or trustees of any business
corporation or any charitable organization which he currently serves, each set
forth on Exhibit A attached hereto, and subject to the prior approval of the
Board, which shall not be unreasonably withheld, Employee may accept appointment
to serve on any board of directors or trustees of any business organization or
any charitable organization, so long as, in each case, (x) such activities do
not, individually or in the aggregate, conflict or materially interfere with the
performance of Employee’s duties or obligations hereunder and (y) such business
organization is not engaged in activities that compete with the business of the
Employer or any of its Affiliates. In addition, Employee’s activities with
respect to his and his family’s investments, the not-for-profit promotion of
financial literacy and consumer education and public policy and political
activities shall be permitted under the terms of this Agreement so long as, in
each case, such activities do not, individually or in the aggregate, conflict or
materially interfere with the performance of Employee’s duties or obligations
hereunder and arc not competitive with the business of the Employer or any of
its Affiliates.

     

    (b)           Employment Period.
The “Employment Period”
shall begin on the Initial Closing Date and end on the fourth anniversary
thereof, unless earlier terminated by the parties as provided in Section 4
hereof; provided, however,
that commencing on the fourth anniversary of the Initial Closing Date and
on each anniversary thereafter (each an “Extension Date”), the Employment Period shall be
automatically extended for an additional one-year period, unless the Employer or
Employee provides the other party hereto at least 60 days prior written notice
before the next Extension Date that the Employment Period shall not be so
extended.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)           Place of Employment.
The Employer may require Employee to travel on business of the Employer to an
extent substantially consistent with historical business travel obligations of
Employee on behalf of the business of EFC prior to the Initial Closing Date.
Except when engaged in travel on behalf of Employer or its Affiliates,
Employee’s place of employment shall be within a ten (10) mile radius of Fair
Oaks Mall in Fairfax, Virginia (except as otherwise mutually
agreed).

     

    (d)           Key Man Insurance.
The Employer shall have the right from time to time to purchase, increase,
modify or terminate insurance policies on the life of Employee for the direct
benefit of the Employer, in such amounts as the Employer shall determine in its
sole discretion. In connection therewith, Employee shall, at such time or times
and at such place or places as the Employer may reasonably direct, submit to
such physical examinations and execute and deliver such documents as the
Employer may reasonably deem necessary or desirable to obtain such insurance;
provided, that
the Employer shall reimburse the Employee for any out-of-pocket expenses
reasonably incurred by the Employee in connection therewith.

     

    (e)           Effectiveness of
Agreement. This Agreement shall constitute a binding agreement between
the parties as of the date hereof; provided, however, that in the
event the Purchase Agreement is terminated for any reason without the Initial
Closing therein described having occurred, this Agreement shall be terminated
without further obligation or liability on the part of any party hereto (other
than with respect to any breaches of the terms of this Agreement occurring prior
to the date of such termination of the Purchase Agreement, for which the party
breaching this Agreement shall remain liable notwithstanding such termination of
the Purchase Agreement and this Agreement).

     

    2.           Compensation. (a) Salary. During the
Employment Period, in consideration for the services to be rendered hereunder,
and subject to the terms and conditions of this Agreement, the Employer hereby
agrees to pay Employee, in accordance with its normal practices, a base salary
at the rate of $600,000 per annum (the “Annual Base Salary”). All
compensation shall be subject to all applicable tax withholding and similar
requirements under applicable law.

     

    (b)           Incentive
Compensation. During the Employment Period, Employee will be eligible to
participate in the bonus plan (the “Bonus Plan”) to be
established on the Initial Closing Date in accordance with the Employer’s
Limited Liability Agreement (the “Incentive
Compensation”).

     

    3.           Benefits. (a) Generally. During the
Employment Period, Employee shall be eligible to participate in any medical,
dental and life insurance plans or policies and any pension and retirement plans
and any disability plans which the Employer may hereafter, in its sole and
absolute discretion, make available to employees, but, subject to the
penultimate sentence of this Section 3(a), Employer will not be required to
establish any such program or plan. The Employee shall be entitled to such
annual vacation and to such reimbursement of expenses, each in accordance with
the Employer’s policies in effect from time to time with respect to employees.
Such programs, plans and policies shall be in the aggregate at least
substantially equivalent to the employee benefit programs, plans and policies
maintained by EFC immediately prior to the Initial Closing Date and disclosed as
such in EFC’s Disclosure Schedules delivered under the Purchase Agreement.
Employee shall be entitled to receive perquisites that are consistent with those
that are received by senior executives of SMH.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)           Payments to
Representatives. In the event of Employee’s death or other inability to
receive payments under this Agreement, payments which have accrued as of the
date of death or other inability to receive payments shall be made to Employee’s
estate, heirs or other representative as may be legally
appropriate.

     

    4.           
Termination of Employment. (a) Termination for
Cause. After the Initial Closing Date, this Agreement (and the Employment
Period) may be terminated by the Employer for Cause (as defined below), provided, the Employer
delivers written notice to the Employee specifying in reasonable detail the
reasons therefor. The term “Cause” shall include any of the
following:

     

    (i)           conviction
of, or plea of nolo contendere to, a felony under the laws of the United States
or any state thereof;

     

    (ii)          conviction
of an act involving embezzlement or fraud, or the intentional violation of
securities law; or

     

    (iii)         an
intentional breach by Employee of any material provision of this Agreement;
provided, that,
for the first instance of any such breach of a provision of this Agreement other
than any contained in Section 5 or 6 hereof, (A) Employee will be given written
notice by the Employer and a period of 15 Business Days to cure and (B) if (1)
Employee cures the action to the reasonable satisfaction of the Employer within
such 15 Business Day time period, or (2) in the case of a breach which cannot be
cured within the 15 Business Day cure period, Employee undertakes to cure the
action in a manner and within a time period reasonably acceptable to the
Employer and Employee so cures the action to the reasonable satisfaction of the
Employer within such agreed time period, then the action contained in the notice
shall not constitute “Cause” hereunder (it being understood and agreed that
nothing contained in this Agreement shall require the Employer to give more than
one notice and opportunity to cure under this Section 4(a)(iii) and in no event
shall this notice and opportunity to cure apply to any breach of Section 5 or 6
of this Agreement); provided, further, that no act or failure
to act on Employee’s part shall be deemed to be intentional if (x) taken (or
failed to be taken) by Employee with the good faith belief that such action or
inaction was in the best interest of the Employer, or (y) taken (or failed to be
taken) at the direction of the Board or any employee to whom Employee reports.
“Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks in
Fairfax, Virginia are authorized or required by law to close.

     

    (b)          Death or Permanent
Disability of Employee. Employee’s employment hereunder shall terminate
upon Employee’s death. In addition, after the Initial Closing Date the Employer
shall have the right to terminate Employee’s employment hereunder upon 15 days’
written notice if and when Employee, by reason of injury, illness or similar
cause (as determined by a licensed physician selected by Employee and approved
by the Employer) is unable to, and fails to, perform his duties for a period of
180 consecutive days.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c)           Termination Without Cause or
Voluntary Resignation. Following the fourth anniversary of the Initial
Closing Date, the Employer, by written notice to Employee, shall have the right
to terminate Employee’s employment without Cause for any reason or for no
reason, subject to Section 4(e) hereof. Employee, by 15 days’ written notice to
the Employer delivered after the Initial Closing Date, shall have the right to
terminate Employee’s employment for any reason or for no reason.

     

    (d)          Termination for Good
Reason. For purposes of this Agreement, “Good Reason” shall mean (i)
the failure of the Employer to pay or cause to be paid Employee’s Annual Base
Salary or any amount earned under the Bonus Plan or Profit Sharing Plan, (ii)
any diminution in the Employee’s title or substantial diminution in Employee’s
authority or responsibilities from those described in Section 1(a) hereof, (iii)
a material breach by the Employer of any other material obligations pursuant to
this Agreement or of any material obligations pursuant to the Purchase
Agreement; or (iv) the occurrence of a Change-in-Control (defined below); provided, that any of the
events described in clauses (1) or (2) of this Section 4(d) shall constitute
Good Reason only if the Employer fails to cure such event within 15 Business
Days following the Employer’s receipt of written notice from Employee describing
the event constituting Good Reason. As used in this Agreement, a “Change-in-Control” shall be
considered to occur if and when:

     

    (1)          the
sale by SMH of more than 50% of the membership interests of the Employer, to any
person (as such term is used in Section 13(d) of the Exchange Act) other than
SMH or an employee benefit plan of SMH; or

     

    (2)          the
execution of definitive documents pertaining to the foregoing.


     

    (e)          Compensation Upon Voluntary
Resignation or Termination for Cause. If (i) Employee voluntarily resigns
from employment with the Employer as described in the second sentence of Section
4(c), or (ii) the Employer terminates Employee’s employment for Cause, as
described in Section 4(a), then the Employer will pay to Employee within 30 days
following such termination of employment, (x) the unpaid salary and vacation
earned by Employee before the date of such event as provided for in this
Agreement (computed pro rata up to and including such date of such event), (y)
any Incentive Compensation earned but unpaid as of the date of termination for
any previously completed fiscal year, and (z) reimbursement for any unreimbursed
business expenses incurred by the Employee prior to the date of termination (the
“Accrued Obligations”).
Such payment will be in lieu of any and all other compensation, benefits
and claims of any kind, excepting only such additional amounts as may be
provided for under the express terms of any applicable benefit plans or be
required by law to be paid (which amounts will be paid in accordance with such
terms or requirements, as the case may be).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (f)          Compensation for Termination
without Cause or Termination for Good Reason. If the Employee’s
employment with the Employer is terminated (i) without Cause as described in the
first sentence of Section 4(c), or (ii) for Good Reason as described in Section
4(d), then (A) the Employer will pay to Employee a lump sum payment in cash
within 30 days following such termination equal to (1) the Accrued Obligations,
plus (2) an amount equal to (x) Employee’s Annual Base Salary in effect at the
date of termination plus the average of the amount of Employee’s bonus earned
during the last three fiscal years immediately preceeding such termination;
multiplied by (z) the number of years (including partial years prorated on a
daily basis) then remaining in the Employment Period; and (B) so long as
Employee has not breached Employee’s covenants and obligations under Sections 5
and 6, the Employer will continue to provide Employee with the welfare benefits
described in Section 3 for a period through the expiration of the Employment
Period; provided, any
such welfare benefit shall cease prior to the expiration of the Employment
Period if the Employee commences receiving coverage from a subsequent employer
under a comparable welfare benefit plan. The payment and continuation of
benefits described above will be in lieu of any and all other compensation,
benefits and claims of any kind, excepting only such additional amounts as may
be provided for under the express terms of any applicable benefit plans or
agreement, or be required by law to be paid (which amounts will be paid in
accordance with such terms or requirements, as the case may be).

     

    (g)          Compensation for Termination
upon Death or Disability. If the Employee’s employment is terminated as a
result of the Employee’s death or Disability as described in Section 4(b), then
the Employer will pay the Employee (or Employee’s estate or representatives, as
the case may be) within 30 days following such termination of employment, the
Accrued Obligations and an amount equal to the bonus paid to him for the fiscal
year immediately prior to the fiscal year in which such termination occurs
prorated for the current fiscal year based on the number of full months
elapsed.

     

    5.            Confidential Information. (a) During the
Employment Period, Employee will have access to, and become acquainted with,
confidential proprietary information of the Employer (or its predecessors),
including, without limitation, confidential or proprietary investment
methodologies, trade secrets, proprietary or confidential plans, Client
identities and relationships, compilations of information, Client lists, service
providers, business operations or techniques, records, specifications, and data
owned or used in the course of business by the Employer (or its predecessors)
(collectively, “Confidential
Information”). Employee shall not disclose any of the Confidential
Information, directly or indirectly, or use them in any way, either during the
term of this Agreement or at any time thereafter, except as required in the
course of Employee’s employment by the Employer. All files, records, documents,
drawings, specifications, equipment and similar items relating to the business
of the Employer (or its predecessors), whether prepared by Employee or otherwise
coming into Employee’s possession, will remain the exclusive property of the
Employer, and if removed from the premises of the Employer will be immediately
returned to the Employer upon any termination of Employee’s
employment.

     

    (b)          Employee
agrees that any and all presently existing investment advisory businesses of the
Employer (including, without limitation, its predecessors) and all businesses
developed by the Employer, including by Employee or any other employee or agent
of the Employer (including, without limitation, employees and agents of any of
EFC as its predecessor), including, without limitation, all investment
methodologies, all investment contracts, fees and fee schedules, commissions,
records, data, Client lists, agreements, trade secrets, and any other incident
of any business developed by the Employer (including, without limitation, its
predecessors) or earned or carried on by the Employee for the Employer (or any
predecessor), and all trade names, service marks and logos or any under which
the Employer does business, and any combinations or variations thereof and all
related logos, are and shall be, the exclusive property of the Employer for its
sole use, and (where applicable) shall be, payable directly to the Employer. In
addition, Employee acknowledges and agrees that the investment performance
of the accounts managed by the Employer (and EFC as its predecessor) was
attributable to the efforts of the team of professionals at the Employer (or EFC
as predecessor thereto) and not to the efforts of any single individual, and
that therefore, the performance records of the accounts managed by the Employer
(and EFC as its predecessor) are and shall be the exclusive property of the
Employer. Accordingly, at any time after the date hereof, subject to the other
terms and conditions of this Section 5 and the terns and conditions of Section
6, Employee shall use the performance information of the Employer (or EFC as its
predecessor), including, without limitation, the investment performance of any
accounts or group of accounts for which Employee was a portfolio manager, only
if Employee refrains from taking any credit, explicitly or implicitly, for the
achievement of such performance or results (it being understood and agreed that
nothing in this sentence shall be construed as relieving Employee from any of
Employee’s covenants and obligations under this Section 5 and Section
6).

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c)          As
used in this Section 5, (A) the term “Confidential Information”
does not include information that (1) becomes or has been generally
available to the public other than as a result of Employee’s disclosure in
violation hereof; (ii) was available to Employee on a nonconfidential basis
prior to its disclosure by the Employer (or its predecessors); (iii) is
independently developed or becomes available to Employee on a nonconfidential
basis from a source other than the Employer (or its predecessors); or (iv) is
required by law to be disclosed or is reasonably necessary for Employee to
defend himself or assert rights in a proceeding involving the Employer or its
Affiliates; and (B) the term “Employer” includes any person directly or
indirectly controlling or controlled by the Employer or under common control
with the Employer.

     

    6.           
Agreement Not to Solicit or Compete Under Certain
Circumstances. Employee agrees that until the ninth anniversary of
the Initial Closing Date, he will not, anywhere in the United States, directly
or indirectly, for his own account or the account of others (other than on
behalf of the Employer and its Subsidiaries and controlled
Affiliates):

     

    (i)           engage
in the securities brokerage, asset management or investment advisory businesses
in competition with the Employer or any of its Subsidiaries or controlled
Affiliates (the “Restricted
Businesses”), unless expressly approved by SMH; for the avoidance of
doubt, Employee’s activities with respect to his and his family’s investments,
the promotion of financial literacy and consumer education and public policy and
political activities shall be deemed not to be Restricted
Businesses;

     

    (ii)           solicit
or accept assets for management or securities brokerage services from any client
or customer of the Employer or its Subsidiaries or controlled Affiliates (or any
person that was such a client or other customer during the one year period
preceding such solicitation or acceptance, or who was offered such services in
an individually targeted manner during the one year period preceding such
solicitation or acceptance), or otherwise request or advise any client or
customer of the Employer or any of its Subsidiaries or controlled Affiliates to
reduce or cancel any of its business with such persons;

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (iii)           induce
or attempt to influence any employee of the Employer or any of its Subsidiaries
or controlled Affiliates to terminate his or her employment with any such
person; or

     

    (iv)           employ
any individuals employed by the Employer or any of its Subsidiaries or
controlled Affiliates during the one year period preceding such commencement of
employment.

     

    7.            
Miscellaneous.

     

    (a)          Waivers. Any waiver
of any terms or conditions or of the breach of any covenant, representation or
warranty of this Agreement in any one instance shall not operate as or be deemed
to be or construed as a further or continuing waiver of any other breach of such
terns, condition, covenant, representation or warranty or any other term,
condition, covenant, representation or warranty nor shall any failure or delay
at any time or times to enforce or require performance of any provision hereof
operate as a waiver of or affect in any manner such party’s right at a later
time to enforce or require performance of such provision or of any other
provision hereof, provided, however, that no such waiver, unless it, by its own
terms, explicitly provides to the contrary, shall be construed to effect a
continuing waiver of the provision being waived and no such waiver in any
instance shall constitute a waiver in any other instance or for any other
purpose or impair the right of the party against whom such waiver is claimed in
all other instances or for all other purposes to require full
compliance.

     

    (b)          Modification. Except
as otherwise provided in this Agreement, neither this Agreement nor any term
hereof may be changed, amended, modified, waived, discharged or terminated
except to the extent that the same is effected and evidenced by the written
consent of the party against whom enforcement of such change or modification is
sought and by written consent of SMH, which the parties acknowledge is an
intended third party beneficiary of this Agreement.

     

    (c)          Injunctive Relief.
Employee acknowledges and agrees that it is fair and reasonable that he make the
covenants and undertakings set forth in Sections 5 and 6 and has done so with
the benefit of the advice of counsel. Furthermore, Employee agrees that any
breach or attempted breach by him of the provisions of Section 5 or 6 of this
Agreement will cause irreparable harm to the Employer for which monetary damages
will not be an adequate remedy. Accordingly, the Employer and SMH shall be
entitled to apply for and obtain injunctive relief (temporary, preliminary and
permanent) in order to restrain the breach or threatened breach of, or otherwise
to specifically enforce, any of the provisions of Section 5 or 6, without the
requirement to post a bond or provide other security. Nothing herein shall be
construed as a limitation or waiver of any other rights or remedies that may be
available to the Employer for such breach or threatened breach. Employee further
agrees that the subject matter and duration of the restrictions covered in
Sections 5 and 6 are reasonable in light of the facts as they exist
today.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d)          Governing Law. This
Agreement shall be governed by, and interpreted in accordance with, the laws of
the Commonwealth of Virginia without regard to conflicts of law principles. No
suit, action or proceeding with respect to this Agreement may be brought in any
court or before any similar authority other than a federal or state court
located in the Commonwealth
of Virginia. Each of the Parties submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the suit, action or
proceeding may be heard and determined in any such court. Each Party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any suit, action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect thereto.

     

    (e)          Notices. (i) All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and sent as follows:

     

    
      
        
          
            	
                     If
      to Employee

                  	
                    Fredric
      M. Edelman

                  
	 
      	
                    12450
      Fair Lakes Circle
Fairfax, Virginia 22033

                  
	 
      	 
      
	
                    With
      a copy to:

                  	
                    Simpson
      Thacher & Bartlett LLP

                  
	 
      	
                    425
      Lexington Avenue
New York, NY 10017
Attention: Robert D.
      Goldbaum
                  
      Patrick J. Naughton

                  
	 	 
	
                    If
      to the Employer

                  	
                    The
      Edelman Financial Center, LLC

                  
	 
      	
                    12450
      Fair Lakes Circle
Fairfax, Virginia 22033

                  
	 
      	 
      
	
                    With
      a copy to:

                  	
                    Sanders
      Morris Harris Group Inc.

                  
	 
      	
                    600
      Travis, Suite 3100
Houston, Texas 77002
Attention: Robert E.
      Garrison II

                  


          

        

      

    

     

    (ii)          All
notices and other communications required or permitted under this Agreement
which are addressed as provided in Section 8(e)(i), (A) if delivered personally
against proper receipt shall be effective upon delivery and (B) if sent (1) by
certified or registered mail with postage prepaid or (2) by Federal Express or
similar courier service with courier fees paid by the sender, shall be effective
upon receipt. The parties hereto may from time to time change their respective
addresses for the purpose of notices to that party by a similar notice
specifying a new address, but no such change shall be deemed to have been given
unless it is sent and received in accordance with this Section
8(e).

     

    (f)          Entire Understanding; No
Third Party Beneficiaries. This Agreement, represents the entire
understanding of the Employer and Employee with respect to Employee’s employment
with the Employer and Employee’s compensation therefor. Nothing in this
Agreement, express or implied, is intended to confer on any person, other than
the parties hereto and SMH (which is a third party beneficiary of this
Agreement) and their respective heirs, permitted representatives, successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement. On and after the Initial Closing Date, this Agreement
will supersede any and all other agreements, written or oral. Specifically,
Employee acknowledges
that no commitment has been made by the Employer to Employee with respect to any
employment beyond the term of this Agreement (whether ending by lapse of time or
earlier termination pursuant to its terms) or with respect to any benefit not
expressly set forth in this Agreement or incorporated herein by
reference.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (g)          Severability. If any
of the provisions of Section 6 or any other provision of this Agreement are
found by any court of competent jurisdiction (or legally empowered agency) to be
in violation of applicable law or unenforceable for any reason whatsoever, then
it is the intention of the parties that such provision or provisions be deemed
to be automatically amended to the extent necessary to comply with applicable
law and permit enforcement. If any of the provisions of Section 6 or any other
provision of this Agreement shall be deemed by any court of competent
jurisdiction (or legally empowered agency) to be wholly or partially invalid,
such determination shall not affect the binding effect of the other provisions
of Section 6 or of any of the other provisions of this Agreement.

     

    (h)          Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    (i)           Plurals; Gender.
Whenever used herein, any singular term in this Agreement will be deemed to
include the plural, and any plural term the singular. All pronouns and
variations thereof will be deemed to refer to the feminine, masculine or neuter,
singular or plural, as the identity of the person referred to may
require.

     

    (j)         
 Headings;
Interpretation. The various headings contained herein are for reference
purposes only and do not limit or otherwise affect any of the provisions of this
Agreement. It is the intent of the parties that this Agreement not be construed
more strictly with regard to one party than with regard to any other
party.

     

    (k)          Assignment. Neither
this Agreement, nor any rights or obligations hereunder, may be assigned by one
party without the written consent of the other, except that this Agreement shall
be binding upon and inure to the benefit of any successor or successors of the
Employer, whether by merger, consolidation, sale of assets or otherwise, and
reference herein to the Employer shall be deemed to include any such successor
or successors.

     

    (1)          Definitions.
Capitalized terms used herein and not otherwise defined shall have the meaning
set forth in the Purchase Agreement when used in this Agreement. In addition,
for purposes of this Agreement,

     

    (i)  
        an interest or position is “publicly traded” if the
security underlying it is listed on a national securities exchange or registered
under Section 12(g) of the Securities Exchange Act of 1934;

     

    (ii)          a
business that is “competitive
with the business of the Employer” shall include, without limitation, a
business that involves providing Investment Services with respect to investment
products that are the same or similar to the investment products offered or
reasonably contemplated to be offered by the Employer; and

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (iii)          “Investment Services” shall mean any services
which involve (A) the management of an investment account or fund (or portions
thereof or a group of investment accounts or funds), or (B) the giving of advice
with respect to the investment and/or reinvestment of assets or funds (or any
group of assets or funds).

     

    (m)          Indemnification.
During the Employment Period and thereafter, Employer shall indemnify Employee
to the fullest extent permitted by law against any judgments, fines, amounts
paid in settlement and reasonable expenses (including attorneys’ fees) in
connection with any claim, action or proceeding (whether civil or criminal)
against Employee as a result of Employee serving as an employee, officer or
director of the Employer or in any capacity at the request of the Employer, in
or with regard to any other entity, employee benefit plan or enterprise. This
indemnification shall be in addition to, and not in lieu of, any other
indemnification Employee shall be entitled to pursuant to any other
agreement.

     

    (n)          Legal Fees. The
Company shall pay all legal fees and related expenses (including the cost of
experts, evidence and counsel) incurred by Employee in connection with any and
all disputes arising under this Agreement unless a court of competent
jurisdiction has finally determined that the Company has prevailed in such
dispute, in which case the Employee shall reimburse the Company for the payment
of such fees.

     

    (o)          Voiding of Agreement.
If the Purchase Agreement is terminated in accordance with its terms, this
Agreement and all the rights and obligations created hereunder shall be rendered
void ab
initio.

     

    [Remainder
of page intentionally left blank.]

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

    


    
      
        
          
            
              
                
                  
                    	 
      	
                            THE
      EDELMAN FINANCIAL CENTER, LLC

                          
	 
      	
                            By:

                          	
	 
      	 
      	
                            Name:

                          
	 
      	 
      	
                            Title:

                          
	 
      	 
      
	 	 
	 
      	
                            Fredric
      M.
Edelman

                          


                  

                

              

            

          

        

      

    

    


    [Signature
Page for Employment Agreement of Fredric M. Edelman]

     

    
      
        
        

      

      
        12